R-99-06-24-10G1 - 6/24/1999EXHIBIT A
ORDER AUTHORIZING THE ISSUANCE OF $1,410,000 THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT COMBINATION UNLIMITED
TAX AND REVENUE BONDS, SERIES 1999; AWARDING THE SALE OF THE BONDS;
AUTHORIZING THE LEVY OF AN AD VALOREM TAX IN SUPPORT OF THE BONDS;
APPROVING AN OFFICIAL STATEMENT; AND AUTHORIZING OTHER MATTERS
RELATED TO THE ISSUANCE OF THE BONDS
Adopted: 1999
TABLE OF CONTENTS
Paee
ARTICLE I - DEFINITIONS, FINDINGS AND INTERPRETATION 2
Section 1.1 Definitions 2
Section 1.2 Findings 4
Section 1.3 Table of Contents, Titles and Headings 4
Section 1.4 Interpretation 4
ARTICLE II - AUTHORIZATION; GENERAL TERMS AND - PROVISIONS
REGARDING THE BONDS 4
Section 2.1 Authorization 4
Section 2.2 Date, Denomination, Maturities, Numbers and Interest 4
Section 2.3 Medium, Method and Place of Payment 5
Section 2.4 Execution and Initial Registration 6
Section 2.5 Ownership 7
Section 2.6 Registration, Transfer and Exchange 8
Section 2/ Cancellation and Authentication 9
Section 2.8 Temporary Bonds 10
Section 2.9 Replacement Bonds 10
Section 2.10 Book -Entry Only System
Section 211 Successor Securities Depository; Transfer Outside
Book -Entry Only System
Section 2.12 Payments to Cede & Co
ARTICLE III - REDEMPTION OF BONDS BEFORE MATURITY 11
Section 3.1 Limitation on Redemption I 1
Section 3.2 Optional Redemption 11
Section 3.3 Mandatory Redemption 11
Section 3.4 Partial Redemption 12
Section 3.5 Notice of Redemption to Registered Owners 12
Section 3.6 Payment Upon Redemption 12
Section 3.7 Effect of Redemption 13
Section 3.8 Lapse of Payment 13
ARTICLE IV - PAYING AGENT/REGISTRAR 13
Section 4.1 Appointment of Paying Agent/Registrar 13
Section 4.2 Qualifications of Paying Agent/Registrar 13
Section 4.3 Maintaining Paying Agent/Registrar 13
Section 4.4 Termination of Paying Agent/Registrar 14
Section 4.5 Notice of Change of Paying Agent/Registrar to Registered Owners 14
Section 4.6 Agreement of Paying Agent/Registrar to Perform Duties and
Functions 14
Section 4.7 Delivery of Records to Successor 14
ARTICLE V - FORM OF BONDS 14
TABLE OF CONTENTS
(continued)
Page
Section 5.1 Form 14
Section 5.2 CUSIP Registration 21
Section 5.3 Legal Opinion 21
ARTICLE VI - SECURITY OF THE BONDS 21
Section 6.1 Security of Bonds 21
Section 6.2 Levy of Tax 22
Section 6.3 Net Revenue Pledge as Additional Security 22
ARTICLE VII - FUNDS; FLOW OF FUNDS; AND INVESTMENTS 24
Section 7.1 Creation of Funds 24
Section 7.2 Security of Funds 24
Section 7.3 Debt Service Fund 24
Section 7.4 Operating Fund 24
Section 7.5 Deposit of Proceeds 24
Section 7.6 Investments 25
ARTICLE VIII - SPECIFIC OBLIGATIONS OF BOARD 25
Section 8.1 Covenants 25
ARTICLE IX - TAX EXEMPTION 2 6
Section 9.1 Provisions Conceming Federal Income Tax Exclusion 26
Section 9.2 No Private Use or Payment and No Private Loan Financing 26
Section 9.3 No Federal Guaranty 27
Section 9.4 Bonds Are Not Hedge Bonds 27
Section 9.5 No- Arbitrage Covenant 27
Section 9.6 No Rebate Required 2 7
Section 9.7 Information Reporting 28
Section 9.8 Qualified Tax- Exempt Obligations 28
Section 9.9 Continuing Obligation 28
ARTICLE X - CONTINUING DISCLOSURE OF FINANCIAL INFORMATION 28
Section 10.1 Annual Reports 28
Section 10.2 Material Event Notices 29
Section 10.3 Limitations, Disclaimers and Amendments 29
ARTICLE XI - ADDITIONAL BONDS AND REFUNDING BONDS 30
Section 11.1 Additional Bonds 30
Section 11.2 Revenue Bonds 31
2
TABLE OF CONTENTS
(continued)
Page
Section 11.3 Inferior Lien Bonds 31
Section 11.4 Special Project Bonds 31
Section 11.5 Refunding Bonds 31
ARTICLE XI1 - SALE AND DELIVERY OF BONDS 31
Section 12.1 Sale and Delivery of Bonds 31
Section 12.2 Approval of Official Statement 32
ARTICLE XIII - DEFAULT AND REMEDIES 32
Section 13.1 Events of Default 32
Section 13.2 Remedies for Default 32
Section 13.3 Remedies Not Exclusive 33
ARTICLE XIV - DISCHARGE 33`
Section 14.1 Discharge by Payment 33
Section 14.2 Discharge by Deposit 33
ARTICLE XV - MISCELLANEOUS 35
Section 15.1 Persons Deemed Registered Owners 35
Section 15.2 Districts Successors and Assigns 35
Section 15.3 Benefits of Order Provisions 35
Section 15.4 Severability Clause 35
Section 15.5 Open Meeting 35
Section 15.6 Amendments 36
Section 15.7 No Personal Liability 36
Section 15.8 Notice to Registered Owners 36
Section 15.9 Districts Officers' Duties 36
ARTICLE XVI - EFFECTIVENESS 36
Section 16.1 Effectiveness 36
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ORDER NO. 99-
ORDER AUTHORIZING THE ISSUANCE OF $1,410,000 THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT COMBINATION
UNLIMITED TAX AND REVENUE BONDS, SERIES 1999; AWARDING THE
SALE OF THE BONDS; AUTHORIZING THE LEVY OF AN AD VALOREM
TAX IN SUPPORT OF THE BONDS; APPROVING AN OFFICIAL
STATEMENT; AND AUTHORIZING OTHER MATTERS RELATED TO THE
ISSUANCE OF THE BONDS
THE STATE OF TEXAS §
COUNTY OF TRAVIS §
Recitals
WHEREAS, at an election held in the District on June 13, 1985 (the "1985 election"), the
District was authorized to issue bonds in the maximum amount of $13,000,000 for the purpose or
purposes of purchasing, constructing, acquiring, owning, operating, repairing, improving or
extending a waterworks system, sanitary sewer system, and drainage and storm sewer system,
including, but not limited to, all additions to such systems and all works, improvements, facilities,
plants, equipment, appliances, interests in property, and contract rights needed therefor and
administrative facilities needed in connection therewith, and all expenses incidental thereto,
including expenses incidental to the organization, administration and financing of the District, and
to provide for the payment of principal of and interest on such bonds by the levy and collection of
a sufficient tax upon all taxable property within the District and by a pledge of all or any designated
part or parts of the net revenues resulting from the ownership or operation of the District's works,
improvements, facilities, plants, equipment and appliances, or under specific contracts;
WHEREAS, the election described above was called and held under and in strict conformity
with the Constitution and laws of the State of Texas, and of the United States of America, and the
Board of Directors has heretofore officially declared the results of said election and declared that
the District was legally created and authorized to issue the bonds described above;
WHEREAS, to construct the various phases of a waterworks, sanitary sewer and drainage
and storm sewer systems within the District, the District previously issued $2,450,000 Waterworks
and Sewer System Combination Unlimited Tax and Revenue Bonds, Series 1987, dated January 1,
1987 ( "Series 1987 Bonds "). A portion of the Series 1987 Bonds remain outstanding;
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WHEREAS, the District previously reserved the right to issue the now remaining
$10,550,000 unissued balance of the bonds authorized at the 1985 election and intends to issue
$1,410,000 in bonds to pay for the costs of acquiring water, wastewater, and drainage trunk lines
to serve the single - family residential subdivision of The Meadows at Chandler Creek, Sections 7,
10 and 10A and for acquiring water, wastewater and drainage facilities to serve Sections 1, 2, 3 and
4 [what about 7A and 241 of the same subdivision. In addition, proceeds of the Bonds will be used
to pay certain administrative and issuance costs of the Bonds. As a result of the issuance of such
bonds, the District's remaining authorized but unissued bonds for the purposes of financing
improvements to the District's water, sewer and drainage systems or any other lawful purpose will
be $9,140,000;
WHEREAS, the District has been authorized to levy taxes, and the taxes to be collected,
together with the net revenues from the operation of the District's waterworks and sanitary sewer
system to be constructed or acquired, will be sufficient to make the principal of and interest
payments on the outstanding bonds and the Bonds authorized by this Order;
WHEREAS, the Board of Directors reserves the right to issue the remaining $9,140,000
bonds which were voted on at the election described above, and any other bonds as may hereinafter
be authorized by the District voters, in one or more series at a future date or dates when, in the
Board's judgment, such amounts are required for the authorized purposes; Now, Therefore
BE IT ORDERED BY THE BOARD OF DIRECTORS OF THE MEADOWS AT
CHANDLER CREEK MUNICIPAL UTILITY DISTRICT THAT:
ARTICLE I
DEFINITIONS, FINDINGS AND INTERPRETATION
Section 1.1 Definitions. Throughout this Order the following teens and expressions as
used herein shall have the meanings set forth below:
"Act" means Chapters 49 and 54, Texas Water Code, as amended.
"Additional Bonds" means the additional bonds which the District expressly reserves the
right to issue in Section 11.1 of this Order.
"Board" means the Board of Directors of the District.
"Bond" or "Bonds" means one or more bonds of the issue of The Meadows at Chandler
Creek Municipal Utility District Combination Unlimited Tax and Revenue Bonds, Series 1999
authorized in this Order unless the context clearly indicates otherwise.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the
Paying Agent/Registrar is authorized by law or executive order to remain closed.
2
Order.
"Capital Projects Fund" means the Capital Projects Fund created and established in this
"Closing Date" means the date of initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Debt Service Fund" means the Debt Service Fund created and established in this Order.
"District" means The Meadows at Chandler Creek Municipal Utility District.
"DTC" shall mean the Depository Trust Company of New York, New York.
"DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Initial Bonds" means the Initial Bonds authorized by Section 2.4 of this Order.
"Initial Date" means the date designated as the Initial Date by Section 2.2(a) of this Order.
"Interest Payment Date, " when used in connection with any Bond, means February 1, 2000,
and each August 1 and February 1 thereafter until maturity or prior redemption of such Bond.
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each entity whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule.
"Operating Fund" means the Operating Fund affirmed in this Order.
"Order" means as used herein and in the Bonds means this Order authorizing the Bonds.
"Paying Agent/Registrar" means Bank of New York, Houston, Texas, or any successor
thereto or replacement thereof as provided in this Order.
"Person" means any individual, corporation, partnership, joint venture, association,
joint -stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"Purchaser" shall have the meaning stated in Section 12.1 of this Order.
"Record Date" means, for any Interest Payment Date, the fifteenth calendar day of the month
next preceding each Interest Payment Date.
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"Register" means the books of registration kept by the Paying Agent/Registrar, in which are
maintained the names and addresses of, and the principal amounts of the Bonds registered to, each
Registered Owner.
Bond.
DTC.
"Registered Owner" means any person who shall be the registered owner of any outstanding
"Representation Letter" means the Letter of Representations between the District and the
"Revenue Bonds" means the revenue bonds that the District expressly reserves the right to
issue in Section 11.2 of this Order.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any entity designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information'
depository within the meaning of the Rule from time to time.
"System" means the waterworks system, sanitary sewer system, and drainage and storm
sewer system of the District, including, but not limited to, all works, improvements, facilities,
plants, equipment, appliances, interests in property and contract rights needed therefor, now owned
or to be hereafter purchased, constructed or otherwise acquired, whether by deed, contract or
otherwise, together with any additions or extensions thereto or improvements and replacements
thereof, except the water, sewer, and/or drainage or storm sewer facilities that the District may
purchase or acquire with the proceeds of the sale of special project bonds, so long as such special
project bonds are outstanding, notwithstanding that such facilities may be physically connected with
the System.
Section 1.2 Findings. The declarations, determinations and findings declared, made and
found in the preamble to this Order are hereby adopted, restated and made a part of the operative
provisions hereof.
Section 1.3 Table of Contents, Titles and Headings. The table of contents, titles and
headings of the Articles and Sections of this Order have been inserted for convenience of reference
only and are not to be considered a part hereof and shall not in any way modify or restrict any of
the terms or provisions hereof and shall never be considered or given any effect in construing this
Order or any provision hereof or in ascertaining intent, if any question of intent should arise.
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Section 1.4 Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlativewords of the feminine and neuter genders and vice versa, and words
of the singular number shall be construed to include correlative words of the plural number and vice
versa.
(b) This Order and all the terms and provisions hereof shall be liberally construed to
effectuate the purposes set forth herein to sustain the validity of the Bonds and the validity of the
taxes levied in payment thereof.
ARTICLE 11
AUTHORIZATION: GENERAL TERMS AND
PROVISIONS REGARDING THE BONDS
Section 2.1 Authorization. The District's tax and revenue bonds to be designated the
"THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLIMITED TAX AND REVENUE BONDS, SERIES 1999" are hereby
authorized to be issued and delivered in accordance with the Constitution and the laws of the State
of Texas, particularly Section 59 of Article XVI of the Constitution of the State of Texas and the
Act. The Bonds shall be issued in the total aggregate amount of One Million Four Hundred and Ten
Thousand and No /100 Dollars ($1,410,000.00) for the purposes of providing funds to pay the costs
of acquiring water, wastewater, and drainage trunk lines to serve the single - family residential
subdivision of The Meadows at Chandler Creek, Sections 7, 10 and 10A and for acquiring water,
wastewater and drainage facilities to serve Sections 1, 2, 3 and 4 [what about 7A and 24 ?] of the
same subdivision. In addition, proceeds of the Bonds will be used to pay certain administrative and
issuance costs of the Bonds.
Section 2.2 Date. Denomination, Maturities, Numbers and Interest.
(a) The Bonds shall have an Initial Date of July 1, 1999. The Bonds shall be in fully
registered form, without coupons, and shall be numbered consecutively from R -1 upward, except
the Initial Bonds, which shall be numbered as specified in Section 5.1.
(b) The Bonds shall be issued as fully registered obligations in denominations of $5,000
or any integral multiple thereof, shall mature on February 1 in the years and in the principal amounts
and shall bear interest at the per annum rates set forth in the following table:
Principal Year of Interest
Bond Number Amount Maturity Rate
R -1 $30,000 2003 L,%
R -2 40,000 2004
R -3 40,000 2005
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R-4 40,000 2006
R -5 40,000 2007
R -6 50,000 2008
R -7 50,000 2009
R -8 50,000 2010
R -9 50,000 2011
R -10 60,000 2012
R -11 60,000 2013
R -12 70,000 2014
R -13 70,000 2015
R -14 80,000 2016
R -15 80,000 2017
R -16 90,000 2018
R -17 100,000 2019
R -18 100,000 2020
R -19 100,000 2021
R -20 100,000 2022
R -21 110,000 2023
(c) Interest shall accrue and be paid on each bond respectively until its maturity or earlier
redemption from the later of the Initial Date or the most recent Interest Payment Date to which
interest has been paid or provided for at the per annum rates specified in the schedule contained in
subsection (b) above. Such interest shall be payable semiannually on February 1 and August 1 of
each year, commencing February 1, 2000, computed on the basis of a 360 -day year of twelve 30 -day
months.
(d) [Insert if Initial Purchaser exercises option to designate one or more maturity dates
on or after February 1, 2012 as serial or term bonds]
Section 23 Medium, Method and Place of Payment.
(a) The District will duly and punctually pay the principal of and interest on the Bonds
in accordance with their terms in lawful money of the United States of America and shall deposit
with the Paying Agent/Registrar on or before each Interest Payment Date funds sufficient to pay the
principal of and interest on the Bonds then due, as provided in this Section.
(b) Interest on the Bonds shall be paid to the Registered Owners thereof as shown in the
Register at the close of business on the Record Date by check (dated as of the Interest Payment
Date) and sent by the Paying Agent/Registrar to the person entitled to such payment, first class
United States mail, postage prepaid, to the address of such person as it appears in the Register, or
by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the
person to whom interest is paid; provided, however, that such person shall bear all risk and expense
of such other customary banking arrangement.
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(c) The principal of each Bond shall be paid to the Registered Owner of such Bond on
the due date thereof (whether at the maturity date or the date of prior redemption thereof) upon
presentation and surrender of such Bond at the designated office of the Paying Agent/Registrar.
(d) If the specified date for any payment of principal of or interest on the Bonds shall
be a Saturday, Sunday, or legal holiday or equivalent (other than a moratorium) for banking
institutions generally in the city in which the principal corporate trust office of the Paying
Agent/Registrar is located, such payment may be made on the next succeeding day which is not one
of the foregoing days without additional interest and with the same force and effect as if made on
the specified date for such payment.
(e) In the event of nonpayment of interest on a Bond on an Interest Payment Date, and
for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date ")
will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the District. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (the "Special Payment Date" that shall be fifteen
(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 Registered
Owner of a Bond appearing on the 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.
(f) Unclaimed payments shall be segregated in a special escrow account and held in
trust, uninvested by the Paying Agent/Registrar, for the account of the Registered Owners of the
Bonds to which the unclaimed payments pertain. Subject to Title 6 of the Texas Property Code,
payments remaining unclaimed by the Registered Owners entitled thereto for three years after the
applicable payment or redemption date shall be applied to the next payment or payments on the
Bonds thereafter coming due and, to the extent any such money remains after the retirement of all
outstanding Bonds, shall be paid to the District to be used for any lawful purpose. Thereafter,
neither the District, the Paying Agent/Registrar nor any other person shall be liable or responsible
to any Registered Owners of such Bonds for any further payment of such unclaimed moneys or on
account of any such Bonds, subject to Title 6 of the Texas Property Code.
Section 2.4 Execution and Initial Registration.
(a) The Bonds shall be executed on behalf of the District by the President and Secretary
(or Assistant Secretary) of the Board, by their manual or facsimile signatures, and the official seal
of the District shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Bonds shall have the same effect as if each of the Bonds had been signed manually and in person
by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the
official seal of the District had been manually impressed upon each of the Bonds.
(b) In the event that any officer of the District whose manual or facsimile signature
appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the
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delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for
all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Order unless and until there appears thereon the
Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated
by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It
shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign
the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of
Paying Agent/Registrar described above, the Initial Bonds delivered at the Closing Date shall have
attached thereto the Comptroller's Registration Certificate substantially in the form provided herein,
manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly
authorized agent, which Certificate shall be evidence that the Bond has been duly approved by the
Attorney General of the State of Texas, that it is a valid and binding obligation of the District and
that it has been registered by the Comptroller of Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Bond for each stated maturity representing the entire
principal amount of the Bonds, payable in stated installments to the Purchaser or its designee,
executed by manual or facsimile signature of the President and Secretary of the Board, approved
by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts,
will be delivered to the Purchaser or its designee. Upon payment for the Initial Bonds, the Paying
Agent/Registrar, pursuant to written instructions from the Purchaser or its designee, shall cancel the
Initial Bonds and deliver to DTC on behalf of the Purchaser one registered Definitive Bond for each
year of maturity of the Bonds in the aggregate principal amount of all Bonds for such maturity,
registered in the name of Cede & Co., as nominee of DTC.
Section 2.5 Ownership.
(a) The District, the Paying Agent/Registrar and any other person may treat the person
in whose name any Bond is registered as the absolute Registered Owner of such Bond for the
purpose of making and receiving payment of the principal, for the further purpose of making and
receiving payment of the interest thereon (subject to the terms of this Order requiring the Paying
Agent/Registrar to make payments of interest to the person who is the Registered Owner on the
Record Date or the Special Record Date), and for all other purposes, whether or not such Bond is
overdue, and neither the District nor the Paying Agent/Registrar shall be bound by any notice or
knowledge to the contrary.
(b) All payments made to the person deemed to be the Registered Owner of any Bond
in accordance with this Section shall be valid and effectual and shall discharge the liability of the
District and the Paying Agent/Registrar upon such Bond to the extent of the sums paid.
Section 2.6 Registration, Transfer and Exchange.
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(a) So long as any Bonds remain outstanding, the District shall cause the Paying
Agent/Registrar to keep at its designated office a register (the "Register ") in which, subject to such
reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the
registration and transfer of Bonds in accordance with this Order.
(b) Registration of any Bond may be transferred in the Register only upon the
presentation and surrender thereof at the designated office of the Paying Agent/Registrar for transfer
of registration and cancellation, together with proper written instruments of assignment, in form and
with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of
the Bonds, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees
thereof, and the right of such assignee or assignees thereof to have the Bond or any portion thereof
registered in the name of such assignee or assignees. No transfer of any Bond shall be effective until
entered in the Register. Upon assignment and transfer of any Bond or portion thereof, a new Bond
or Bonds will be issued by the Paying Agent/Registrar in exchange for such transferred and
assigned Bond. To the extent possible, the Paying Agent/Registrar will issue such new Bond or
Bonds in not more than three business days after receipt of the Bond to be transferred in proper form
and with proper instructions directing such transfer.
(c) Any Bond may be exchanged only upon the presentation and surrender thereof at the
designated office of the Paying Agent/Registrar, together with a written request therefor duly
executed by the Registered Owner or assignee or assignees thereof, or its or their duly authorized
attorney or representatives, with guarantees of signatures satisfactory to the Paying Agent/Registrar,
for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination and
in an aggregate principal amount equal to the unpaid principal amount of the Bond presented for
exchange. If a portion of any Bond is redeemed prior to its scheduled maturity as provided herein,
a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in the
denomination or denominations of any integral multiple of $5,000 at the request of the Registered
Owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued
to the Registered Owner upon surrender thereof for cancellation. To the extent possible, a new
Bond or Bonds will be required to be delivered by the Paying Agent/Registrar to the Registered
Owner of the Bond or Bonds in not more than three business days after receipt of the Bond to be
exchanged in proper form and with proper instructions directing such exchange.
(d) Each Bond issued in exchange for any Bond or portion thereof assigned or transferred
shall be of the same tenor and shall have the same maturity date and bear interest at the same rate
and in the same manner as the Bond for which it is being exchanged. The Paying Agent/Registrar
shall exchange the Bonds as provided herein, and each substitute Bond delivered in accordance with
this Section shall constitute an original additional contractual obligation of the District and shall be
entitled to the benefits and security of this Order to the same extent as the Bond or Bonds in lieu of
which such substitute Bond is delivered.
(e) The District will pay the Paying Agent/Registrar's reasonable and customary charge
for the initial registration of the Bonds and the subsequent exchange of the Bonds pursuant to the
provisions hereof. However, the Paying Agent/Registrar will require the Registered Owner to pay
9
a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in
connection with the registration, transfer or exchange of a Bond. In addition, the District hereby
covenants with the Registered Owners of the Bonds that it will (i) pay the reasonable and standard
or customary fees and charges of the Paying Agent/Registrar for its services with respect to the
payment of the principal of and interest on the Bonds, when due, and (ii) pay the fees and charges
of the Paying Agent/Registrar for services with respect to the transfer, registration and exchange of
Bonds as provided herein to the extent such fees and charges are payable hereunder by the District.
(t) Neither the District nor the Paying Agent/Registrar shall be required to issue, transfer
or exchange any Bond called for redemption, in whole or in part, where such redemption is
scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however,
such limitation shall not be applicable to an exchange by the owner of the uncalled principal balance
of a Bond.
Section 2/ Cancellation and Authentication.
(a) All Bonds paid or redeemed before scheduled maturity in accordance with this Order,
and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and
delivered in accordance with this Order, shall be canceled and proper records shall be made
regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall
then return such canceled Bonds to the District or may in accordance with law destroy such canceled
Bonds and periodically fumish the District with certificates of destruction of such Bonds.
(b) Each substitute Bond issued in exchange for or replacement of (pursuant to the
provisions of Section 2.9 hereof) any Bond or Bonds issued under this Order shall have printed
thereon a Paying Agent/Registrar's Authentication Certificate, in the form hereinafter set forth. An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such bond,
manually sign and date such Certificate, and no such bond shall be deemed to be issued or
outstanding unless such Certificate is so executed. No additional resolutions or orders need be
passed or adopted by the District or any other body or person so as to accomplish the foregoing
exchange or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed
herein. Pursuant to Article 717k -6, V.A.T.C. S., as amended, and particularly Section 6 thereof, the
duty of exchange or replacement of Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication
Certificate, the exchanged or replaced Bonds shall be valid, incontestable, and enforceable in the
same manner and with the same effect as the Bonds which originally were delivered pursuant to this
Order, approved by the Attorney General, and registered by the Comptroller of Public Accounts.
Section 2.8 Temporary Bonds.
(a) Pending the preparation of definitive Bonds, the proper officers of the District may
execute and, upon the District's request, the Paying Agent/Registrar shall authenticate and deliver,
one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or
10
otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu
of which they are delivered, without coupons and with such appropriate insertions, omissions,
substitutions and other variations as the officers of the District executing such temporary Bonds may
determine, as evidenced by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall
be entitled to the benefit and security of this Order.
(c) The District, without unreasonable delay, shall prepare, execute and deliver to the
Paying Agent/Registrar the Bonds in definitive form and thereupon, upon the presentation and
surrender of the Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor a Bond or Bonds of the same
maturity and series, in definitive form, in the authorized denomination, and in the same aggregate
principal amount as the Bond or Bonds in temporary form surrendered. Such exchange shall be
made without the making of any charge therefor to any Registered Owner.
Section 2.9 Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated'
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement
Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding.
The District or the Paying Agent/Registrar may require the Registered Owner of such Bond to pay
a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in
connection therewith and any other expenses connected therewith,
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the
Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of
notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate
and deliver a replacement Bond of like tenor and principal amount, bearing a number not
contemporaneously outstanding, provided that the Registered Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the District harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other
governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the District and the
Paying Agent/Registrar.
11
(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such original Bond,
the District and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from
the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the District or the Paying Agent/Registrar in connection
therewith.
(d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken
Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and
payable or may pay such Bond when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with this Section shall constitute an
original additional contractual obligation of the District and shall be entitled to the benefits and
security of this Order to the same extent as the Bond or Bonds in lieu of which such replacement
Bond is delivered.
(f) Replacement Bonds may be issued directly to beneficial owners of Bonds other than
DTC, or its nominee, but only in the event that (i) DTC determines not to continue to act as
securities depository for the Bonds (which determination shall become effective no less than 90 days
after written notice to such effect to the District and the Paying Agent/Registrar); or (ii) the District
has advised DTC of its determination (which determination is conclusive as to DTC and the
beneficial owners of the Bonds) that the interests of the beneficial owners of the Bonds might be
adversely affected if such book -entry only system of transfer is continued. Upon occurrence of any
of the foregoing events, the District shall use its best efforts to attempt to locate another qualified
securities depository. If the District fails to locate another qualified securities depository to replace
DTC, the District shall cause to be authenticated and delivered replacement Bonds, in certificate
form, to the beneficial owners of the Bonds. In the event that the District makes the determination
noted in (i) or (ii) above (provided that the District undertakes no obligation to make any
investigation to determine the occurrence of any events that would permit the District to make any
such determination), and has made provisions to notify the beneficial owners of Bonds of such
determination by mailing an appropriate notice to DTC, it shall cause to be issued replacement
Bonds in certificate form to beneficial owners of the Bonds as shown on the records of DTC
provided to the District.
Section 2.10 Book -Entry Only System.
(a) The definitive Bonds shall be initially issued in the form of a separate single fully
registered Bond for each of the maturities thereof. Upon initial issuance, the ownership of each such
Bond shall be registered in the name of Cede & Co, as nominee of DTC, and except as provided in
Section 2.11 hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as
nominee of DTC. For so long as DTC shall continue to serve as securities depository for the Bonds
as provided herein, all transfers of beneficial ownership interests will be made by book -entry only,
12
and no investor or other party purchasing, selling or otherwise transferring beneficial ownership of
Bonds is to receive, hold or deliver any Bond certificate.
(b) With respect to registered in the name of Cede & Co., as nominee of DTC,
the District and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in the
Bonds, except as provided in this Order. Without limiting the immediately preceding sentence, the
District and the Paying Agent/Registrar shall have no responsibility or obligation with respect to
(i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any
ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other
than a Holder, as shown on the Register, of any notice with respect to the Bonds, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than
a Holder, as shown in the Register of any amount with respect to principal of, premium, if any, or
interest on the Bonds. Notwithstanding any other provision of this Order to the contrary, the District
and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each
Bond is registered in the Register as the absolute Holder of such Bond for the purpose of payment
of principal of, premium, if any, and interest on the Bonds for the purpose of giving notices of
redemption and other matters with respect to such Bond, for the purpose of registering transfer with
respect to such Bond and for all other purposes whatsoever, The Paying Agent/Registrar shall pay
all principal of, premium, if any and interest on the Bonds only to or upon the order of the respective
Holders, as shown in the Register as provided in this Order, or their respective attorneys duly
authorized in writing and all such payments shall be valid and effective to fully satisfy and discharge
the District's obligations with respect to payment of principal of, premium, if any, and interest on
the Bonds to the extent of the sum or sums so paid. No person other than a Holder, as shown in the
Register, shall receive a Bond certificate evidencing the obligation of the District to make payments
of amounts due pursuant to this Order. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede
& Co., and subject to the provisions in this Order with respect to interest checks being mailed to the
registered Holder at the close of business on the Record Date, the words "Cede & Co." in this Order
shall refer to such new nominee of DTC.
(c) The execution and delivery of the Representation Letter is hereby approved with such
changes as may be approved by the President of the Board, and the President of the Board is hereby
authorized to execute such Representation Letter.
Section 2.11 Successor Securities Depositorv: Transfer Outside Book-Entry Only System.
In the event that the District or the Paying Agent/Registrar determines that DTC is incapable of
discharging its responsibilities described herein and in the Representation Letter, and that it is in the
best interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, or
in the event DTC discontinues the services described herein, the District or the Paying
Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants, as identified by DTC, of the appointment of such successor securities depository and
transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and
13
DTC Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one
or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts, as
identified by DTC. In such event, the Bonds shall no longer be restricted to being registered in the
Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the
successor securities depository, or its nominee, or in whatever name or names Holders transferring
or exchanging Bonds shall designate, in accordance with the provisions of this Order.
Section 2.12 Payments to Cede & Co. Notwithstanding any other provision of this Order
to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to principal of, premium, if any, and interest on such Bonds and all notices
with respect to such Bonds, shall be made and given, respectively, in the manner provided in the
Representation Letter.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 3.1 Limitation on Redemption. TheBonds shall be subject to redemption before
their scheduled maturity only as provided in this Article.
Section 3.2 Optional Redemption
(a) The District reserves the option to redeem the Bonds maturing on and after February
1, 2006, in whole or in part, in inverse order of maturity and by lot (or by any other customary
method that results in a random selection) within a maturity, before their respective scheduled
maturity dates, on February 1, 2005, or any date thereafter, at a redemption price equal to the
principal amount thereof, plus accrued interest from the most recent Interest Payment Date to the
redemption date.
(b) The District, at least 45 days before the redemption date (unless a shorter period shall
be satisfactory to the Paying Agent/Registrar), shall notify the Paying Agent/Registrar of such
redemption date and of the principal amount of Bonds to be redeemed.
(c) The exercise by the District of its option to redeem Bonds shall be evidenced by an
order or resolution of the Board entered into its minutes.
Section 3.3 Mandatory Redemption.
(a) In addition to being subject to optional redemption as provided above, the Bonds
maturing on February 1, [ 1 and February 1, [ 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 Debt
Service Fund:
Bonds Maturi Febr 1. f 1 Bonds Maturing February 1, f 1
14
Mandatory Principal Mandatory Principal
Redemption Date Amount Redemption Date Amount
[TO FOLLOW]
(b) 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 District,
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 District, 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 for cancellation, (2) shall have been purchased and canceled by the
Paying Agent at the request of the District, with monies in the Debt Service 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.
Section 3.4 Partial Redemption.
(a) A portion of a single Bond of a denomination greater than $5,000 may be redeemed,
but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Bond is
to be partially redeemed, the Paying Agent/Registrar shall assign a separate number for each $5,000
portion of the Bonds and select the portion or portions of the Bond to be redeemed by lot or by any
other customary method that results in a random selection.
(b) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in
accordance with the provisions of this Order, shall authenticate and deliver an exchange Bond or
Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so
surrendered, such exchange being without charge.
(c) The Paying Agent/Registrar shall promptly notify the District in writing of the Bonds
selected for redemption and, in the case of any Bond selected for partial redemption, the principal
amount thereof to be redeemed.
Section 3.5 Notice of Redemption to Registered Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending
notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed
for redemption, to DTC and to the Registered Owner of each Bond (or portion thereof) to be
redeemed, at the address shown in the Register at the close of business on the Business Day next
preceding the date of mailing of such notice.
(b) The notice shall state, among other things, the redemption date, the redemption price,
the place at which the Bonds are to be surrendered for payment, that the Bonds so called for
15
redemption shall cease to bear interest at the redemption date, and, if less than all the Bonds
outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed.
(c) Any notice given as provided in this Section shall be conclusively presumed to have
been duly given, whether or not the Registered Owner receives such notice.
(d) The Paying Agent/Registrar shall give written notice of redemption, by registered
mail, overnight delivery, or other comparably secure means, not less than 30 days prior to the
Redemption Date, to each registered securities depository (and to each national information service
that disseminates redemption notices) known to the Paying Agent/Registrar, but neither the failure
to give such notice nor any defect therein shall affect the sufficiency of notice given to the
Registered Owner as hereinabove stated. The Paying Agent/Registrar may provide written notice
of redemption to DTC by facsimile.
Section 3.6 Payment Upon Redemption.
(a) Before or on each redemption date, the Paying Agent/Registrar shall make provision
for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust an
amount received by the Paying Agent/Registrar sufficient to pay the principal of and accrued interest'
on such Bonds.
(b) Upon presentation and surrender of any Bond called for redemption at the designated
office of the Paying Agent/Registrar, on or after the date fixed for redemption, the Paying
Agent/Registrar shall pay the principal of, and accrued interest on such Bond from the moneys set
aside for such purpose.
Section 3.7 Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 3.5 of this Order, the
Bonds or portions thereof called for redemption shall become due and payable on the date fixed for
redemption and unless the District defaults in the payment of the principal thereof or accrued
interest thereon, such Bonds or portions of such Bonds shall cease to bear interest from and after the
date fixed for redemption, whether or not such Bonds are presented and surrendered for payment
on such date.
(b) If any Bond or portion thereof called for redemption is not so paid upon presentation
and surrender thereof for redemption, such Bond or portion thereof shall continue to bear interest
at the rate stated on the Bond until paid or until due provision is made for the payment of same.
Section 3.8 Lapse of Payment. Money set aside for the redemption of Bonds and
remaining unclaimed by the Registered Owners thereof shall be subject to the provisions of Section
2.3(0.
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ARTICLE IV
PAYING AGENT/REGISTRAR
Section 4.1 Appointment of Paying Agent/Registrar.
(a) The Bank of New York, Houston, Texas, is hereby appointed as the initial Paying
Agent/Registrar for the Bonds.
(b) The President and the Vice President of the Board or either of them, and the
Secretary and any Assistant or Acting Secretary of the Board, or any of them, are hereby authorized
and directed to execute an agreement with the Paying Agent/Registrar for the Bonds.
Section 4.2 Qualifications of Paving Agent/Registrar. Every Paying Agent/Registrar
appointed hereunder shall be a commercial bank, 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 and registrar for the Bonds. Every Paying Agent/Registrar shall
maintain the Register at a location in the State of Texas
Section 4.3 Maintaining Paving Agent/Registrar.
(a) At all times while any Bonds are outstanding, the District will maintain a Paying
Agent/Registrar that is qualified under Section 4.2 of this Order.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the District
will promptly appoint a replacement.
Section 4.4 Termination of Paving Agent/Registrar.
(a) The District reserves the right to appoint a successor Paying Agent/Registrar by (1)
filing with the entity then performing such functions a certified copy of a resolution or order giving
thirty (30) days notice of the termination of the appointment, stating the effective date of such
termination and (2) appointing a successor Paying Agent/Registrar.
(b) If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon
the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Bonds to the successor Paying Agent/Registrar.
Section 4.5 Notice of Change of Paying Agent/Registrar to Registered Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the District will cause
notice of the change to be sent to each Registered Owner by first class United States mail, postage
prepaid, at the address in the Register, stating the effective date of the change and the name and
mailing address of the replacement Paying Agent/Registrar.
17
Section 4.6 Agreement of Paving Agent/Registrar to Perform Duties and Functions. By
accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is deemed to have
agreed to the provisions of this Order and that it will perform the duties and functions of Paying
Agent/Registrar prescribed hereby.
Section 4.7 Delivery of Records to Successor. If a Paying Agent/Registrar is replaced,
such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the
Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the
successor Paying Agent/Registrar.
(a) Form of Bonds.
REGISTERED
NUMBER
R-
ARTICLE V
FORM OF BONDS
Section 5.1 Form. The form of the Bonds, including the form of the Registrar's
Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, which shall be attached or affixed to the
Bonds initially issued, shall be, respectively, substantially in the form set forth in this Article, with
such additions, deletions and variations as may be necessary or desirable and not prohibited by this
Order:
(Face of Bond)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TRAVIS
18
REGISTERED
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
COMBINATION UNLIMITED TAX AND REVENUE BOND
SERIES 1999
Interest Rate Maturity Date Initial Date CUSIP No.
July 1, 1999
The Meadows at Chandler Creek Municipal Utility District (the "District "), in the County
of Travis, State of Texas, for value received, hereby promises to pay to
or registered assigns, but solely from
the sources and in the manner hereinafter provided, on the Maturity Date specified above, the sum
of
DOLLARS
unless this Bond shall have been sooner called for prior redemption and the payment of the principal
hereof shall have been paid or provided for, and to pay interest on such principal amount from the
later of the Initial Date set forth above or the most recent interest payment date to which interest has
been paid or provided for until payment of such principal amount has been paid or provided for, at
the per annum rate of interest specified above, computed on the basis of a 360 -day year of twelve
30 -day months, such interest to be paid semiannually on February 1 and August 1 of each year,
commencing February 1, 2000. The principal of this Bond shall be payable without exchange or
collection charges in lawful money of the United States of America upon presentation and surrender
of this Bond at the designated office of the Paying Agent/Registrar or any successor thereto
executing the registration certificate appearing hereon. Interest on this Bond is payable by check,
dated as of the interest payment date, mailed by the Paying Agent/Registrar to the registered owner
at the address shown on the registration books kept by the Paying Agent/Registrar or by such other
customary banking arrangements acceptable to the Paying Agent/Registrar and the person to whom
interest is paid; provided, however, that such person shall bear all risk and expense of such other
customary banking arrangements. For the purpose of the payment of interest on this Bond, the
registered owner shall be the person in whose name this Bond is registered at the close of business
on the "Record Date," which shall be the fifteenth day of the month next preceding such interest
payment date. In the event of a nonpayment of interest on a scheduled payment date, and for thirty
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 District. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (the "Special Payment Date," which date shall be fifteen 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 owner of a Bond appearing
on the 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.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday, or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date for
such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or
day on which banking institutions are required or authorized to close, and payment on such date
shall for all purposes be deemed to have been made on the original date payment was due.
This Bond is one of a series of fully registered bonds specified in the title hereof, dated as
of July 1, 1999, issued in the aggregate principal amount of $1,410,000 (herein referred to as the
"Bonds "), and issued pursuant to the authority provided by the Constitution and laws of the State
of Texas, particularly Chapters 49 and 54 of the Texas Water Code, as amended, by authority of an
election held for and within the District on June 13, 1985, and a certain order of the District (the
"Order ") for the purpose of providing funds to pay the costs of acquiring water, wastewater, and
drainage trunk lines to serve the single - family residential subdivision of The Meadows at Chandler
Creek, Sections 7, 10 and 10A and for acquiring water, wastewater and drainage facilities to serve
19
Sections 1, 2, 3 and 4 of the same development. In addition, proceeds of the Bonds will be used to
pay certain administrative and issuance costs of the Bonds, as described in the Order. Capitalized
terms used herein and not otherwise defined shall have the meaning assigned thereto in the Order.
The District reserves the option to redeem Bonds maturing on or after February 1, 2006, in
whole or in part, in principal amounts of $5,000 or any integral multiple thereof, before their
respective scheduled maturity dates, on February 1, 2005, or on any date thereafter, at a price equal
to the principal amount of the Bonds so called for redemption plus accrued interest to the
redemption date. If less than all of the Bonds are to be optionally redeemed, the Bonds shall be
redeemed in inverse order of maturity and by lot within such maturity to be redeemed.
In addition, the Bonds maturing on February 1, [ 1 and February 1, [ 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 Debt Service Fund:
Bonds Maturing February 1, f 1 Bonds Maturing February 1, f 1
Mandatory Principal Mandatory Principal
Redemption Date Amount Redemption Date Amount
[Insert table from Section 3.3]
A portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only
in a principal amount equal to $5,000 or any integral multiple thereof If such a Bond is to be
partially redeemed, the Paying Agent/Registrar shall assign a separate number for each $5,000
portion of the Bonds and select the portion or portions of the Bond to be redeemed by lot or by any
other customary method that results in a random selection.
Notice of such redemption or redemptions shall be given by first class mail, postage prepaid,
not less than 30 days before the date fixed for redemption, to the registered owner of each of the
Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or portions
thereof designated for redemption shall become due and payable on the redemption date specified
in such notice, and from and after such date, notwithstanding that any of the Bonds or portions
thereof so called for redemption shall not have been surrendered for payment, interest on such
Bonds or portions thereof shall cease to accrue.
As provided in the Order and subject to certain limitations therein set forth, this Bond is
transferable upon surrender of this Bond for transfer at the designated corporate trust office of the
Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the
Paying Agent/Registrar, and, thereupon, one or more new fully registered Bonds of the same stated
maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
20
Neither the District nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Bond called for redemption when such redemption is to occur within 45 calendar days
after the transfer or exchange date. However, such limitations of transfer shall not be applicable to
an exchange by the Registered-Owner of the unredeemed balance of a Bond called for redemption
in part.
The District, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
District, the Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
issued and delivered; that all acts, conditions and things required or proper to be performed, to exist
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist
and have been done in accordance with law; and that annual ad valorem taxes, without legal limit
as to rate or amount, sufficient to provide for the payment of the interest on and principal of this
Bond, as such interest comes due and such principal matures, have been levied and ordered to be
levied against all taxable property in the District and have been pledged irrevocably for such
payment.
IT IS FURTHER CERTIFIED, RECITED AND COVENANTED that certain net revenues
to be derived from the ownership and operation of the District's waterworks and sanitary sewer
system also have been pledged to the payment of the interest on and principal of the Bonds to the
extent that ad valorem taxes levied and collected for the payment thereof, together with other
amounts on deposit in the District's Debt Service Fund, are insufficient for such purpose, all as set
forth in the Order, to which reference is made for all particulars, and that such Order also permits
the District and its successors to issue obligations secured in whole or in part by lien on and pledge
of such net revenues on a parity with or subordinate to the lien securing the Bonds.
IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature
of the President of the Board of Directors and countersigned with the manual or facsimile signature
of the Secretary (or the Assistant Secretary) of the Board of Directors, and the official seal of the
District has been duly impressed, or placed in facsimile, on this Bond.
The Meadows at Chandler Creek Municipal Utility
District
President, Board of Directors
21
Secretary, Board of Directors
(SEAL)
(b) Form of Comptroller's Registration Certificate.
[to be printed on Initial Bonds only]
COMPTROLLER'S REGISTRATION CERTIFICATE
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
STATE OF TEXAS
§ REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
(SEAL)
WITNESS MY SIGNATURE AND SEAL this
XXXXX
Comptroller of Public Accounts
of the State of Texas
22
(c) Form of Registrar's Authentication Certificate
It is hereby certified that this Bond has been delivered pursuant to the Order described in the
text of this Bond, in exchange for or in replacement of a bond, bonds or a portion of a bond or bonds
of a series which was originally approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State of Texas.
(d) Form of Assignment
DATED:
AUTHENTICATION CERTIFICATE
Bank of New York
Houston, Texas
By:
Authorized Signature
Date of Authentication:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney .
to transfer said Bond on the books kept for registration thereof, with full power of substitution in
the premises.
Registered Owner
NOTICE: The signature above must correspond
to the name of the Registered Owner as shown on
the face of this Bond in every particular, without
any alteration, enlargement or change whatsoever.
23
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
(e) The Initial Bonds shall be in the form set forth in subsection (a) of this Section,
except for the following alterations:
(1) immediately under the name of the Bond, the headings "Interest Rate,"
"Maturity Date" shall be completed with the words As Shown Below" and the heading
"CUSIP No." deleted.
(2) in the first paragraph of the Bond:
(A) the words "on the Maturity Date specified above the sum of
DOLLARS" shall be deleted and the following will be
inserted: on September 1 in each of the years, in the principal amounts and bearing
interest at the per annum rates set forth in the following schedule:
Year
(Information to be inserted from schedule in
Section 2.2 of this Order)
Principal Interest
Amount te"
(B) the words "executing the registration certificate appearing hereon"
shall be deleted and an additional sentence shall be added to the paragraph as
follows: The initial Paying Agent/Registrar is Bank of New York, Houston,
Texas. ";
(3) the Initial Bonds shall be numbered T -1 and upward.
Section 5.2 CUSIP Registration. The President of the Board may secure the printing of
identification numbers on the Bonds through the CUSIP Service Bureau Division of Standard and
Poors Corporation, New York, New York.
Section 5.3 Legal Opinion. The approving opinion of Bond Counsel, Winstead Sechrest
& Minick P.C., may be printed on the back of the Bonds with the certification of the Secretary of
the Board which may be executed in facsimile.
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ARTICLE VI
SECURITY OF THE BONDS
Section 6.1 Security of Bonds. The Bonds are secured by and payable from the levy of
a continuing, direct annual ad valorem tax, without limit as to rate or amount, upon all taxable
property within the District, and are further secured by and payable from a hen on and pledge of
certain Net Revenues (as defined below) of the District's System.
Section 6.2 Levy of Tax. To pay the interest on the Bonds, and to create a sinking fund
for the payment of the principal thereof when due, and to pay the expenses of assessing and
collecting such taxes, there is hereby levied, and shall be assessed and collected in due time, a
continuing, direct annual ad valorem tax, without limit as to rate or amount, on all taxable property
in the District for each year while any of the Bonds are outstanding. All of the proceeds of such
collections, except expenses incurred in that connection, shall be paid into the Debt Service Fund,
and the aforementioned tax and such payments into such fund shall continue until the Bonds and the
interest thereon have been fully paid and discharged, and such proceeds shall be used for such
purposes and no other. While said Bonds, or any of them, are outstanding and unpaid, an ad
valorem tax each year at a rate from year to year as will be ample and sufficient to provide funds
to pay the interest on said Bonds and to provide the necessary sinking fund to pay the principal when
due, full allowance being made for delinquencies and costs of collection, shall be levied, assessed,
and collected and applied to the payment of principal and interest on the Bonds. In determining the
amount of taxes which should be levied each year, the Board of Directors may consider whether
proceeds from the sale of Bonds have been placed in escrow to pay interest during construction and
whether the Board of Directors reasonably expects to have revenue or receipts available from other
sources which are legally available to pay principal of or interest or redemption price on the Bonds.
Section 6.3 Net Revenue Pledge as Additional Security.
(a) For purposes of this Section the following terms shall have the following definitions:
(i) The term "Maintenance and Operation Expenses" shall mean the
expenses necessary to provide for the administration, efficient operation and adequate
maintenance of the System together with such other costs and expenses as may now or
hereafter be defined by law as proper Maintenance and Operation Expenses of the System;
and
(ii) The term Net Revenues" shall mean all income derived from the
ownership and operation of the System after deducting the Maintenance and Operation
Expenses and providing for the funding of any operating reserve from time to time
established by the Board.
(b) In order to further secure the Bonds, the District hereby grants a lien on and pledge
of the District's Net Revenues. Such Net Revenues, as herein provided, are hereby pledged to the
payment of the principal, interest, redemption price and bank charges of the Bonds If at any time
25
ad valorem taxes levied and collected for the payment thereof, together with other amounts in the
Debt Service Fund, are insufficient for such purpose, the District shall transfer to the Debt Service
Fund such available Net Revenues as shall be necessary to provide (together with other amounts on
deposit in the Debt Service Fund) for the payment of principal, interest, redemption price and bank
charges of the Bonds; provided, however, that no transfers of revenues shall be made to the Debt
Service Fund by the District until all Maintenance and Operation Expenses, including the cost of
maintaining an operating reserve, shall have been paid by the District. The District reserves the
right to apply Net Revenues not required for current payments of principal, interest, redemption
price and bank charges of the Bonds for any lawful purpose of the District. Notwithstanding the
foregoing, no revenues generated from maintenance taxes shall be included in Net Revenues or used
to make payments on the Bonds.
(c) The pledge of the Net Revenues hereunder is on a parity with the pledge of the Net
Revenues made to secure the obligations relating to the Series 1987 Bonds. The District reserves
the right to issue Additional Bonds and incur obligations secured in whole or in part by a lien on and
pledge of Net Revenues on a parity with or subordinate to the lien on and pledge of Net Revenues
securing the Bonds, and to apply such Net Revenues to the payment of such Additional Bonds and
obligations on a parity with or subordinate to the Bonds.
(d) The District is located within the extraterritorial jurisdiction of the City of Round
Rock, Texas (the "City"). The City has the right to annex and dissolve the District. At such time,
the obligations of the District payable in whole or in part from ad valorem taxes shall become
obligations of the City, and the governing body of the City is thereafter required to levy and cause
to be collected taxes on all taxable property within the City sufficient to pay the principal of and
interest on the obligations of the District so assumed by the City. In order to allow the City to
integrate the District's System into the City's water and sewer system, the City may terminate the
pledge of and lien on the Net Revenues of the District's System to the payment of the Bonds. The
City may under certain circumstances annex but not dissolve the District in which case the District
may continue to provide retail water and wastewater service and the maintenance of parks and
recreation areas.
(e) The laws permit the District to be consolidated with one or more conservation and
reclamation districts. In the event the District is consolidated with another district or districts, the
District reserves the right to:
(i) Consolidate the System with a similar system of one or more districts with
which the District is consolidating and operate and maintain the systems as one consolidated
system (the "Consolidated System ");
(ii) Apply the net revenues from the operation of the Consolidated System to the
payment of principal, interest, redemption price and bank charges on the Bonds and any
other combination tax and revenue bonds or bonds or other obligations secured solely or
primarily by such net revenues (the "Revenue Bonds ") of the District and of the district or
districts with which the District is consolidating (herein collectively, the "Consolidating
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Districts ") without preference to any series of bonds (except subordinate lien revenue bonds
which shall be subordinate to the Revenue Bonds of the Consolidating Districts); or
(iii) Pledge the net revenues of the Consolidated System to the payment of
principal, interest, redemption price and bank charges on any Revenue Bonds which may be
issued by the Consolidating Districts on a parity with the outstanding Revenue Bonds of the
Consolidating Districts.
ARTICLE VII
FUNDS: FLOW OF FUNDS: AND INVESTMENTS
Section 7.1 Creation of Funds.
(a) There are hereby created and established the following funds of the District:
(i) the" The Meadows at Chandler Creek Municipal Utility District Combination
Unlimited Tax and Revenue Bonds, Series 1999 - Debt Service Fund "; and
(ii) the "The Meadows at Chandler Creek Municipal Utility DistrictCombination'
Unlimited Tax and Revenue Bonds, Series 1999 - Capital Projects Fund."
(b) There is hereby affirmed the "Operating Fund," created and maintained as set forth
in the District's order authorizing the Series 1987 Bonds.
(c) The Debt Service Fund and Capital Projects Fund shall be held at an official
depository of the District, and shall be kept separate and apart from all other funds of the District
The Debt Service Fund shall constitute a trust fund which shall be held in trust by the District for
the benefit of the Registered Owners of the Bonds. There may be created within the Capital Projects
Fund and Debt Service Fund such accounts and subaccounts as the District deems necessary or
desirable.
Section 7.2 Security of Funds. Any cash balance in any fund shall be invested subject
to the Public Funds Investment Act, V.T.C.A. Government Code, Chapter 2256, as amended.
Section 7.3 Debt Service Fund.
(a) The District shall deposit or cause to be deposited into the Debt Service Fund the
aggregate of the following at the time specified:
(i) upon receipt by the District, the accrued interest on the Bonds; and
(ii) taxes levied and collected pursuant to Section 6.2 hereof, less costs of
collection, as collected.
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(b) Not later than five (5) days prior to any principal and /or Interest Payment Date on
the Bonds, the Board of Directors shall cause the transfer of moneys out of the Debt Service Fund
to the Paying Agent/Registrar in an amount not less than that which is sufficient to pay the principal
which matures on such date, the interest which accrues on such date, and the Paying
Agent/Registrar's fees for handling such payments on that date.
Section 7.4 Operating Fund. The Operating Fund is the maintenance fund of the District
into which shall be placed the revenues from operations of the System. The Operating Fund shall
be used first to pay all reasonable expenses of administration, efficient operation, and adequate
maintenance of the System and the District, including payments to political subdivisions or
municipalities for regional waste disposal and water supply services and facilities, if necessary, after
which Net Revenues, if any, shall either (i) periodically be transferred into the Debt Service Fund
for so long as any part of the principal of or interest on the Bonds is outstanding, or (ii), to the extent
that the balance in the Debt Service Fund and tax collections available for deposit thereto are
sufficient to pay when due the obligations of the District payable from the Debt Service Fund, to
pay other proper expenses of the District.
Section 7.5 Deposit of Proceeds. Accrued interest on the Bonds and any amount
appropriated by the District for capitalized interest shall be deposited into the Debt Service Fund
upon receipt. The remaining proceeds of sale of the Bonds, including interest earnings thereon, shall
be deposited into the Capital Projects Fund and shall be used for the purposes set forth in this Order
and for payment of the costs of issuing the Bonds, with any remainder after completion of the entire
System described in this Order being transferred to the Debt Service Fund, all in accordance with
the applicable laws and regulations, including those of the Texas Natural Resource Conservation
Commission or its successor, in effect at such time.
Section 7.6 Investments. Moneys deposited into the Bond or Capital Projects Funds and
any other fund or funds that the District may lawfully create may be invested or reinvested in any
legally authorized investments. All investments and any profits realized from or interest accruing
on such investments shall belong to the fund from which the moneys for such investments were
taken; provided. however, that in the discretion of the Board the profits realized from and interest
accruing on investments made from any fund may be transferred to the Debt Service Fund.
ARTICLE VIII
SPECIFIC OBLIGATIONS OF BOARD
Section 8.1 Covenants. The Board of Directors, 011 behalf of the District, expressly
stipulates and covenants that, for the benefit of the Purchaser and any and all subsequent Registered
Owners of the Bonds (and enforceable by any one or all of said Registered Owners), in addition to
all other provisions hereof, it will:
(a) Fix and maintain rates and collect charges for the facilities and services rendered by
the District which, together with any taxes levied for maintenance purposes, will provide revenues
sufficient at all times to pay all reasonable administration expenses of the District and all efficient
28
operation and adequate maintenance expenses of the System. The Board has enacted and will
maintain in effect an order fixing rates and charges for services which contains, among other
provisions, a requirement for periodic billing of all customers of the District and a prohibition
against the furnishing of water -or sewer service without charge to any person, firm, organization,
or corporation.
(b) Subject to the provisions of Article VI of this Order, levy an ad valorem tax that will
be ample and sufficient to provide funds to pay the interest on the Bonds and to provide the
necessary sinking fund.
(c) Not mortgage or otherwise encumber the physical properties of the System, nor sell,
lease or otherwise dispose of any substantial portion of such physical properties, unless said
properties of the System are deemed by the Board of Directors of the District to be unnecessary to
the operation of the System.
(d) Maintain the System in good condition and operate it in an efficient manner and at
a reasonable cost.
(e) Maintain insurance on the System of a kind and in an amount which usually would`
be carried by municipal corporations and political subdivisions in Texas operating similar facilities.
(f) Keep accurate records and accounts and employ an independent certified public
accountant of recognized integrity and ability to direct the installation of the required accounting
procedures and to audit its affairs at the close of each fiscal year. The fiscal year of the District is
from October 1 to September 30 of the following year, or such other fiscal year as the Board of
Directors may hereafter designate. Said audits shall include a statement in detail of the income and
expenditures of the System for each year; a balance sheet as of the end of the year; the auditor's
comments regarding the manner in which the District has carried out the requirements of all bond
resolutions and orders; his recommendations, if any, for changes or improvements in the operation
of the District's plants, facilities, and improvements; a list of insurance policies in force as of the
date of the audit including the amount, expiration date, risk covered, and name of the insurer for
each such policy; and the number of properties connected to the System as of the end of the fiscal
year. The audit report shall be delivered to each member of the Board not later than 120 days after
the close of each fiscal year, and shall be retained and filed in the office of the auditor. Copies of
said audit shall be filed as required by law and maintained m the office of the District, available for
inspection by any interested person or persons during normal office hours.
ARTICLE IX
TAX EXEMPTION
Section 9.1 Provisions Concerning Federal Income Tax Exclusion. The District intends
that the interest on the Bonds shall be excludable from gross income for purposes of federal income
taxation pursuant to sections 103 and 141 through 150 of the Code and the Regulations promulgated
thereunder. The District covenants and agrees not to take any action, or knowingly omit to take any
29
action within its control, that if taken or omitted, respectively, would cause the interest on the Bonds
to be includable in gross income, as defined in section 61 of the Code, of the Registered Owners for
purposes of federal income taxation. In particular, the District covenants and agrees to comply with
each requirement of this Article IX; provided, however, that the District shall not be required to
comply with any particular requirement if the District has received an opinion of nationally
recognized bond counsel ("Counsel's Opinion ") that such noncompliance will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the
District has received a Counsel's Opinion to the effect that compliance with some other requirement
set forth in this Article will satisfy the applicable requirements of the Code, in which case
compliance with such other requirement specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in this Section.
Section 9.2 No Private Use or Payment and No Private Loan Financing The District
shall certify, through an authorized officer, employee or agent, that, based upon all facts and
estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the
proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "private
activity bonds" within the meaning of section 141 of the Code and the regulations. The District
covenants and agrees that it will make such use of the proceeds of the Bonds, including interest or
other investment income derived from Bond proceeds, regulate the use of property financed, directly`
or indirectly, with such proceeds, and take such other and further action as may be required so that
the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code and
the Regulations.
Section 9.3 No Federal Guaranty. The District covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively,
would cause the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the
Code and applicable regulations thereunder, except as permitted by section 149(b)(3) of the Code
and such regulations.
Section 9.4 Bonds Are Not Hedge Bonds. The District covenants and agrees not to take
any action, or knowingly omit to take and action, and has not knowingly omitted and will not
knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would
cause the Bonds to be "hedge bonds" within the meaning of section 149(g) of the Code and the
Regulations.
Section 9.5 No- Arbitrage Covenant. The District shall certify, through an authorized
officer, employee or agent that based upon all facts and estimates known or reasonably expected to
be in existence on the date the Bonds are delivered, the District will reasonably expect that the
proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage
bonds" within the meaning of section 148(a) of the Code and the Regulations. Moreover, the
District covenants and agrees that it will make such use of the proceeds of the Bonds including
interest or other investment income derived from Bond proceeds, regulate investments of proceeds
of the Bonds and take such other and further action as may be required so that the Bonds will not
be "arbitrage bonds" within the meaning of section 148(a) of the Code and the Regulations.
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Section 9.6 No Rebate Required. The District warrants and represents that it satisfies
the requirements of paragraph (2) and (3) of section 148(0 of the Code with respect to the Bonds
without making the payments for the United States described in such section. Specifically, the
District warrants and represents that:
(1) the District is a governmental unit with general taxing powers;
(2) at least 95% of the Gross Proceeds of the Bonds will be used for the
local governmental activities of the District; and
(3) the aggregate face amount of all tax- exempt obligations issued or
expected to be issued by the District in the calendar year in which the Bonds are
issued (including the Bonds but excluding obligations to be redeemed with Gross
Proceeds of the Bonds within 90 days after the date on which the Bonds are being
issued) is not reasonably expected to exceed $5,000,000.
Section 9.7 Information Reporting. The District covenants and agrees to file or cause to
be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month
after the close of the calendar quarter in which the Bonds are issued, an information statement'
concerning the Bonds, all under and in accordance with section 149(e) of the Code and the
Regulations.
Section 9.8 OualifiedTax- ExemptObligat ions. The District hereby designates the Bonds
as "qualified tax- exempt obligations" pursuant to section 265(6x3) of the Code. In connection
therewith, the District hereby warrants and represents the following:
(a) the aggregate face amount (or, in the case of obligations on which interest is paid less
frequently than semiannually, the aggregate amount of principal and interest due at
Maturity) of all debt obligations issued or expected to be issued by the District in the
calendar year of the Closing Date (including the Bonds) is not reasonably expected to exceed
$10,000,000;
(b) there are no other Persons which derive their authority from or are subject to the
control of the District and which have authority to issue obligations described in section 103
of the Code; and
(c) consequently, the Bonds are eligible to be "qualified tax- exempt obligations"
pursuant to section 265(b)(3) of the Code.
The President of the Board of Directors is hereby authorized to take such other action as may be
necessary to make effective the designation herein.
31
Section 9.9 Continuing Obligation. Notwithstanding any other provision of this Order
, the District's obligations under the covenants and provisions of this Article shall survive the
defeasance and discharge of the Bonds.
ARTICLE X
CONTINUING DISCLOSURE OF FINANCIAL INFORMATION
Section 10.1 Annual Reports.
(a) The District shall provide annually to each NRMSIR and any SID, within six months
after the end of each fiscal year ending in or after 1999, financial information and operating data
with respect to the District, including the District's annual financial statements, current tax data,
water and sewer operations data and debt service information. Any financial statements so to be
provided shall be (i) prepared in accordance with generally accepted auditing standards or such other
accounting principles as the District may be required to employ from time to time pursuant to State
law or regulation and (ii) audited, if the audit is completed within the period during which they must
be provided. If the audit of such financial statements is not complete within such period, then the
District shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR
and any SID within such six month period and audited financial statements when the audit report'
on such statements becomes available.
(b) If the District changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the District
otherwise would be required to provide financial information and operating data pursuant to this
Section.
(c) The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
Section 10.2 Material Event Notices.
(a) The District shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any of the following events with respect to the Bonds, if such event is material within
the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax- exempt status of the Bonds;
7. Modifications to rights of the Registered Owners;
32
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds;
and
11. Rating changes affecting the Bonds.
(b) The District shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the District to provide financial information or operating data in
accordance with Section 10.1 of this Order by the time required by such Section.
Section 10.3 Limitations, Disclaimers and Amendments.
(a) The District shall be obligated to observe and perform the covenants specified in this
Article for so long as, but only for so long as, the District remains an "obligated person" with respect
to the Bonds within the meaning of the Rule, except that the District in any event will give notice
of any deposit made in accordance with Texas law that causes the Bonds no longer to be
outstanding.
(b) The provisions of this Section are for the sole benefit of the Registered Owners and`
nothing in this Article, express or implied, shall give any benefit or any legal or equitable right,
remedy, or claim hereunder to any other person. The District undertakes to provide only the
financial information, operating data, financial statements and notices which it has expressly agreed
to provide pursuant to this Article and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the District's financial results,
condition, or prospects or hereby undertake to update any information provided in accordance with
this Article or otherwise, except as expressly provided herein. The District does not make any
representation or warranty concerning such information or its usefulness to a decision to invest in
or sell Bonds at any future date.
(c) UNDER NO CIRCUMSTANCES SHALL THE DISTRICT BE LIABLE TO A
REGISTERED OWNER OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR
DAMAGES RESULTING IN WHOLE ORIN PART FROM ANY BREACH BY THE DISTRICT,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION. EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
(d) No default by the District in observing or performing its obligations under this
Article shall comprise a breach of or default under the Order for purposes of any other provision of
this Order . Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the
duties of the District under federal and state securities laws.
(e) Notwithstanding any other provision within this Order, the provisions of this Article
may be amended by the District from time to time to adapt to changed circumstances that arise from
33
a change in legal requirements, a change in law, or a change in the identity, nature, or status or type
of operations of the District, if (I) the agreement, as so amended, would have permitted an
underwriter to purchase or sell Bonds in the original primary offering in compliance with the Rule,
taking into account such amendment as well as such changed circumstances, and (2) a person
unaffiliated with the District (such as nationally recognized bond counsel) determines that the
amendment will not materially impair the interests of the Registered Owners. If any such
amendment is made, the District will include in its next annual update an explanation in narrative
form of the reasons for the change and its impact on the type of operating data or financial
information being provided.
ARTICLE XI
ADDITIONAL BONDS AND REFUNDING BONDS
Section 11.1 Additional Bonds. The District expressly reserves the right to issue, in one
or more installments, for the purpose of completing, repairing, improving, extending, enlarging, or
replacing the System or any other lawful purpose (a) the unissued unlimited tax and revenue bonds
which were authorized at the bond elections described in the recitals of this Order; and (2) such
other unlimited tax and revenue bonds as may hereafter be authorized at subsequent elections.
Section 11.2 Revenue Bonds. The District expressly reserves the right to issue revenue
bonds in one or more installments for the purpose of completing, repairing, improving, extending,
enlarging or replacing the System, which will be payable solely from the Net Revenues and such
bonds may be payable from and equally secured by a lien on and pledge of the Net Revenues.
Section 11.3 Inferior Lien Bonds. The District also reserves the right to issue inferior lien
bonds and pledge the Net Revenues to the payment thereof, such pledge to be subordinate in all
respects to the lien of previously issued Additional Bonds and Revenue Bonds.
Section 11.4 Special Proiect Bonds. The District further reserves the right to issue bonds
in one or more installments for the purchase, construction, improvement, extension, replacement,
enlargement, or repair of water, sewer and /or drainage facilities necessary under a contract or
contracts with persons, corporations, municipal corporations, political subdivisions, or other entities,
such bonds to be payable from and secured by the proceeds of such contract or contracts. The
District further reserves the right to refund such bonds.
Section 11.5 Refunding Bonds. The District further reserves the right to issue Refunding
Bonds in any manner permitted by law to refund any Bonds and Additional Bonds at or prior to their
respective dates of maturity or redemption.
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ARTICLE MI
SALE AND DELIVERY OF BONDS
Section 12.1 Sale andDelivery of Bonds.
(a) The sale and delivery of the bonds to [ 1 (herein referred
to as the "Purchaser ") at a price of Si 1 plus accrued interest thereon to date of
delivery, is hereby authorized, approved, ratified and confirmed, subject to the approving opinion
as to the legality of the Bonds of the Attorney General of the State of Texas, and of Winstead
Sechrest & Minick P.C., bond counsel.
(b) It is hereby found and declared that the Purchaser's bid is the best bid for the Bonds
after advertisement and public sale, and that the net effective interest rate resulting from such bid
is [ 1 %, which rate is less than the maximum rate permitted by law.
(c) The President, Vice President and Secretary of the Board of Directors are authorized
to execute such documents, certificates and receipts and to take such actions as they may deem
appropriate in order to consummate the delivery of the Bonds in accordance with this Order.
Section 12.2 Approval of Official Statement The District ratifies and confirms its prior
approval of the form and content of the Preliminary Official Statement prepared in the initial
offering of the Bonds and hereby authorizes and approves the amendment of the Preliminary
Official Statement to add the terms of the Purchasers bid and to make any other changes necessary
to comply with the provisions of this Order and existing law. The use of such final Official
Statement m the referring of the Bonds by the Purchaser is hereby approved and authorized. The
proper officials of the District are hereby authorized to execute and deliver a certificate pertaining
to such Official Statement as prescribed therein, dated as of the date of payment for and delivery
of the Bonds. The District will furnish to the Purchaser of the Bonds from the District (and to each
other "Participating Underwriter" of the Bonds, within meaning of SEC Rule 15c2- 12(a), designated
by the Purchaser), within seven (7) business days after the sale date, copies of the final Official
Statement in such amount required by the Purchaser not to exceed 200 copies. The District will also
furnish to the Purchaser a like number of any supplement or amendment prepared by the District
for dissemination to potential purchasers of the Bonds as described above as well as such additional
copies of the Official Statement or any supplement or amendment as the Purchaser may request
prior to the 90th day after the end of the underwriting period referred to in SEC Rule 15c2- 12(e)(2).
The District will pay the expense of preparing up to 200 copies of the Official Statement and all
copies of any supplement or amendment issued on or before the delivery date, but the Purchaser
must pay for all other copies of the Official Statement or any supplement or amendment thereto.
35
Section 13.1 Events of Default. Each of the following occurrences or events for the
purpose of this Order is hereby declared to be an Event of Default:
(a) the failure to make payment of the principal of or interest on any of the Bonds
when the same becomes due and payable;
(b) default in the performance or observance of any other covenant, agreement,
or obligation of the District and the continuation thereof for a period of 60 days after notice
of such default is given by any Registered Owner to the District; or
(c) the District files for protection under the federal Bankruptcy Code or other
similar state or federal statute.
Section 13.2 Remedies for Default.
ARTICLE XIII
DEFAULT AND REMEDIES
(a) Upon the happening of any Event of Default, then any Registered Owner or an
authorized representative thereof, including but not limited to, a trustee or trustees therefor, may
proceed against the District for the purpose of protecting and enforcing the rights of the Registered
Owners under this Order, by mandamus or other suit, action or special proceeding in equity or at
law, in any court of competent jurisdiction, for any relief permitted by law, including the specific
performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing
that may be unlawful or in violation of any right of the Registered Owners hereunder or any
combination of such remedies.
(b) All such proceedings shall be instituted and maintained for the equal benefit of all
Registered Owners.
Section 13.3 Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at
law or in equity; provided, however, that notwithstanding any other provision of this Order, the right
to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Order.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
36
Section 14.1 Discharge by Payment. When all or any portion of the Bonds have been paid
in full or when all or any portion of the Bonds have become due and payable, whether at maturity
or otherwise, and the District shall have provided for the payment of the whole amount due or to
become due on such Bonds then outstanding by depositing with the Paying Agent/Registrar for
payment of such Bonds the entire amount due or to become due thereon, and the District shall also
have paid or caused to be paid all sums payable under this Order by the District with respect to all
Bonds, including the compensation due or to become due the Paying Agent/Registrar, then the
Paying Agent/Registrar, upon receipt of a letter of instructions from the District requesting the same,
shall discharge and release the lien of this Order with respect to such Bonds and execute and deliver
to the District such releases or other instruments as shall be requisite to release the lien hereof.
Section 14.2 Discharge by Deposit.
ARTICLE XIV
DISCHARGE
(a) The District may discharge its obligation to pay the principal of and interest on all
or any portion of the Bonds and its obligation to pay other sums payable or to become payable under
this Order by complying with the following procedures:
(i) the District shall deposit or cause to be deposited with the Paying
Agent/Registrar an amount of money that, together with the interest earned on or capital
gains or profits to be realized from the investment of such money, will be sufficient to pay
the principal of and accrued interest on such Bonds to maturity or to the date fixed for prior
redemption of such Bonds and to pay such other amounts as may be reasonably estimated
by the Paying Agent/Registrar to become payable under this Order with respect to the Bonds
being provided for, including the compensation due or to become due the Paying
Agent/Registrar;
(ii) the District shall establish or cause to be established a separate escrow
account fund with the Paying Agent/Registrar for the deposit pursuant to subdivision (i) of
this subsection (a);
(iii) Only cash, direct non - callable obligations of the United States of America
and securities fully and unconditionally guaranteed as to the timely payment of principal and
interest by the United States of America, to which direct obligation or guarantee the full
faith and credit of the United States of America has been pledged shall be used to effect
defeasance of the Bonds. In the event of an advance refunding, the District shall cause to
be delivered a verification report of an independent nationally recognized certified public
accountant. If a forward supply contract is employed in connection with the refunding,
(i) such report shall expressly identify the types of securities to be purchased pursuant to the
forward supply contract and shall state that the adequacy of the escrow to accomplish the
refunding relies solely on the initial escrowed investments and the maturing principal thereof
and interest income thereon and does not assume performance under or compliance with the
37
forward supply contract, and (ii) the applicable escrow agreement shall provide that in the
event of any discrepancy or difference between the terms of the forward supply contract and
the escrow agreement (or the authorizing document, if no separate escrow agreement is
utilized), the terms of the escrow agreement or authorizing document, if applicable, shall be
controlling;
(iv) the District shall make provision for the payment to the Registered Owners
at the date of maturity or redemption of the full amount to which the Registered Owners of
the appropriate Bonds would be entitled by way of principal and interest to the date of such
maturity,
(v) the District shall make provision for the sending of written notice by first
class postage prepaid United States mail to the Registered Owner of each appropriate Bond
then outstanding within 30 days following the date of such deposit that such moneys are so
available for such payment; and
(vi) the District shall provide the Paying Agent/Registrar with an opinion of
Winstead Sechrest & Minick P.C. or other nationally recognized bond counsel selected by
the District and acceptable to the Paying Agent/Registrar to the effect that the deposit'
specified in subdivision (i) of this subsection (a) will not cause the interest on any of the
Bonds to become includable in the gross income of the Registered Owners thereof and that
such Bonds are legally defeased.
(b) Upon compliance with subsection (a) of this Section, the Bonds for the payment of
which provision is thus made shall no longer be regarded as outstanding and unpaid, and the Paying
Agent/Registrar, upon receipt of a letter of instructions from the District requesting the same, shall
discharge and release the lien of this Order as to such Bonds and shall execute and deliver to the
District such releases or other instruments as shall be requisite to release the lien hereof
(c) Following final payment of the principal of and interest on the appropriate Bonds,
any moneys, interest earnings, profits or capital gains over and above the amounts necessary for
such purposes shall be paid to the District.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Persons Deemed Registered Owners. The District, the Paying
Agent/Registrar, and any agent of either of them may treat the Person in whose name any Bond is
registered as the owner of such Bond for the purpose of receiving payment of the principal (and
Redemption Price) of and interest on such Bond and for all other purposes whatsoever, and to the
extent permitted by law, neither the District, the Paying Agent/Registrar, nor any agent of either of
them shall be affected by notice to the contrary.
38
Section 15.2 District's Successors and Assigns. Whenever in this Order the District is
named and referred to, it shall be deemed to include its successors and assigns, and all covenants
and agreements in this Order by or on behalf of the District, except as otherwise provided herein,
shall bind and inure to the benefit of its successors and assigns whether or not so expressed.
Section 15.3 Benefits of Order Provisions. Nothing in this Order or in the Bonds,
expressed or implied, shall give or be construed to give any person, firm or corporation, other than
the District, the Paying Agent/Registrar and the Registered Owners any legal or equitable right or
claim under or in respect of this Order , or under any covenant, condition or provision herein
contained, all the covenants, conditions and provisions contained in this Order or in the Bonds
being for the sole benefit of the District, the Paying Agent/Registrar and the Registered Owners.
Section 15.4 Severability Clause. If any word, phrase, clause, sentence, paragraph, section
or other part of this Order , or the application thereof to any person or circumstance, shall ever be
held to be invalid or unconstitutional by any court of competent jurisdiction, the remainder of this
Order and the application of such word, phrase, clause, sentence, paragraph, section or other part
of this Order to any other persons or circumstances shall not be affected thereby.
Section 15.5 Open Meeting. It is hereby officially found and determined that the meeting'
at which this Order was adopted was open to the public, and public notice of the time, place and
purpose of said meeting was properly given, all as required by Chapter 551, Texas Government
Code, and Section 49.063, Texas Water Code, as amended.
Section 15.6 Amendments. The District may, without the consent of or notice to any
Registered Owners of the Bonds, amend, change, or modify this Order as may be required (a) for
the purpose of curing any ambiguity, inconsistency, or formal defect or omission herein, or (b) in
connection with any other change which is not to the prejudice of the Registered Owners of the
Bonds. Except for such amendments, changes, or modifications, the District shall not amend,
change, or modify this Order in any manner without the consent of the Registered Owners of the
Bonds.
Section 15.7 No Personal Liability. No recourse shall be had for payment of the principal
of or interest on any Bonds or for any claim based thereon, or on this Order, against any official or
employee of the District or any person executing any Bonds.
Section 15.8 Notice to Registered Owners. Except as may be otherwise provided in this
Order , where this Order provides for notice to Registered Owners of any event, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Registered Owner, at the address of such Registered Owner as
it appears in the Register. Neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Registered Owner of Bonds shall affect the sufficiency of such notice with
respect to all other Registered Owners. Wherever this Order provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such notice, either before or
after the event with respect to which such notice is given, and such waiver shall be the equivalent
39
of such notice. Waivers of notice by Registered Owners shall be filed with the District, but such
filing shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver.
Section 15.9 District's Officers' Duties. The President, Vice President and Secretary of the
Board of Directors are authorized to do any and all things proper and necessary to carry out the
intent of this Order.
ARTICLE XVI
EFFECTIVENESS
Section 16.1 Effectiveness. This Order shall take effect and be in force from and after
its passage and approval.
The remainder of this page intentionally left blank
40
ATTEST:
PASSED AND APPROVED on this day of , 1999.
Secretary, Board of Directors
(SEAL)
::ODMA\PCDOC S \AUSTM_1 \118684 \4
0615/999
1002:19239-2
President, Board of Directors
41
EXHIBIT B
OFFICIAL NOTICE OF SALE
S1,410,000
THE MEADOWS AT'CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
(A Political Subdivision of the State of Texas Located in Williamson County, Texas)
COMBINATION UNLIMITED TAX AND REVENUE BONDS, SERIES 1999
Selling: Tuesday, July 13, 1999 at 12:00, Noon, C.D.T.
Bids Due 11:30 A.M., C.D.T.
The Bonds are obligations solely of The Meadows at Chandler Creek Municipal Utility District and are not obligations
of the City of Round Rock, Texas; Williamson County, Texas; the State of Texas or any entity other than the District.
THE DISTRICT IS EXPECTED TO DESIGNATE THE BONDS AS "QUALIFIED TAX - EXEMPT OBLIGATIONS"
FOR FINANCIAL INSTITUTIONS.
THE SALE
Bonds Offered for Sale at Competitive Bidding ... The Meadows at Chandler Creek Municipal Utility District (the
"District ") is offering for sale 51,410,000 Combination Unlimited Tax and Revenue Bonds, Series 1999 (the "Bonds ").
Address of Bids/Bids Delivered in Person ... Sealed bids, plainly marked "Bid for Bonds," should be addressed
the Board of Directors of The Meadows at Chandler Creek Municipal Utility District, and if delivered in person,
delivered at the designated meeting place outside the boundaries of the District, at the offices of Winstead Sechrest &
Minick, P.C., 100 Congress Avenue, Suite 900, Austin, Texas 78701, by 11:30 A.M., C.D.T., on the date of the bid
opening. All bids must be submitted on the "Official Bid Form" without alteration or interlineation. Copies of the
Official Bid Form accompany the Preliminary Official Statement.
Bids by Telephone or Facsimile ... Bidders that choose to exercise the telephone or facsimile bidding options MUST
SUBMIT SIGNED Official Bid Forms to Cheryl Allen, Southwest Securities, 701 Brazos Street, Suite 400, Austin,
Texas 78701 and submit their bid by telephone or facsimile on the date of the sale. Any bids received by facsimile will
be attached to the signed Official Bid Form previously submitted.
Telephone bids will be accepted by Cheryl Allen at (512) 457 -4204, between 10:30 AM and 11:30 AM, C.D.T. on the
date of sale.
Facsimile bids will be accepted at (512) 457 -4250, between 10:30 AM and 11:30 AM, C.D.T. on the date of sale to the
attention of Phil Haag or Cheryl Allen.
The District and Southwest Securities are not responsible if such facsimile or telephone number is busy or
malfunctioning which prevents a bid or bids from being submitted on a timely basis. The District and Southwest
Securities will not be responsible for submitting any bids received after the above deadlines. The District and
Southwest Securities assume no responsibility or liability with respect to any irregularities associated with the
submission of bids if the telephone or facsimile bid options are exercised.
Place and Time of Bid Opening ... The Board will open and publicly read sealed bids for purchase of the Bonds at
the designated meeting place outside the boundaries of the District, at the offices of Winstead Sechrest & Minick, P.C.,
100 Congress Avenue, Suite 900, Austin, Texas 78701, (512) 370 -2800, at 12:00 Noon, C.D.T
Award of Bonds ... The District will take action to award the Bonds or reject all bids promptly upon the opening of
bids. Upon awarding the Bonds, the District will also adopt the order authorizing issuance of the Bonds (the "Bond
Order ") and will approve the Official Statement, which will be an amended form of the Preliminary Official Statement.
Sale of the Bonds will be made subject to the terms, conditions and provisions of the Bond Order to which Bond Order
reference is hereby made for all purposes.
THE BONDS
Description of Bonds .. The Bonds will be dated July 1, 1999, and interest on the Bonds will be payable February 1,
2000, and semiannually thereafter on August 1 and February 1 until maturity or earlier redemption. The Bonds will be
delivered to the Initial Purchaser as one Bond for each maturity, in fully registered form, and may be exchanged for
Bonds in the denomination of 55,000 or any integral multiple thereof. The initial paying agent/registrar (the "Paying
Agent ") is Bank of New York, Houston, Texas. Payment of the principal and semiannual interest, and transfer and
exchange of Bonds shall be handled at the offices of the Paying Agent in Houston, Texas. Principal and redemption
price of the Bonds will be payable to the registered owner at maturity or earlier redemption upon presentation and
surrender of the Bonds to the Paying Agent. Interest on the Bonds will be payable by check or draft, dated as of the
interest payment date, and mailed on or before each interest payment date by the Paying Agent to each registered owner
of record as of the Record Date (as defined herein). The Bonds mature serially on February 1 in the years and amounts
shown below.
Principal Principal
Amount Year of Amount Year of
Maturing Maturity Maturity Maturity
$30,000 2003 $70,000 2014
40,000 2004 70,000 2015
40,000 2005 80,000 2016
40,000 2006 80,000 2017
40,000 2007 90,000 2018
50,000 2008 100,000 2019
50,000 2009 100,000 2020
50,000 2010 100,000 2021
50,000 2011 100,000 2022
60,000 2012 110,000 2023
60,000 2013
The District reserves the right to redeem prior to maturity those Bonds maturing on February 1 in each of the years
2006 through 2023, both inclusive, in whole or from time to time in part on February 1, 2005, or any date thereafter, in
integral multiples of $5,000 at a price of par plus accrued interest from the most recent interest payment date to the date
fixed for redemption. If less than all of the Bonds are to be redeemed, the particular Bonds thereof shall be selected and
designated by the District, and if less than all of the Bonds within a maturity are redeemed, the particular Bonds or
portions thereof to be redeemed shall be selected by the Paying Agent by lot.
Bidders have the right to designate one or more maturity dates for the Bonds on or after February 1, 2012 as serial
or term bonds; however, no more than three dates can be designated as maturity dates for term bonds. No maturity
of any serial bond shall be scheduled to occur on or after the date of the rust sinking fund installment on any term bond.
No sinking fund installment with respect to any term bond shall be due on or prior to the date of the fmal maturity of any
earlier maturity term bond. The amount of term bonds, if any, maturing on each maturity date shall be equal to the sum of
(1) the installment specified above for such maturity date, and (u) the installments specified above preceding such date (and
subsequent to any earlier food maturity date of another specified tenn bond, and the term bonds of such maturity shall be
retired utilizing such installments and sinking fund installments at par plus accrued interest). If and to the extent the
successful bidder specifies for the bonds a maturity date or dates of February 1, 2012 and consecutive subsequent years, the
District will issue such bonds as serial bonds maturing on such date or dates in amounts in accordance with the foregoing
respective schedules. The balance of such bonds, if any, shall be issued as term bonds as designated by the successful
bidder.
Successor Paying Agents ... The Paying Agent may be removed from its duties as Paying Agent with or without
cause by action of the Board of D of the District upon thirty (30) days notice to be effective at such time which
will not disrupt orderly payment on the next principal or interest payment date, but no such removal shall become
effective until a successor Paying Agent has accepted the duties of the Paying Agent by written instrument. Every
Paying Agent appointed by the Board of Directors must be a competent and legally qualified bank, trust company,
financial institution or other agency qualified to act as and perform the services as Paying Agent.
Source of Payment ... The Bonds, when issued, will constitute valid and binding obligations of the District payable as
to principal and interest from the proceeds of a continuing, direct, annual ad valorem tax levied against taxable property
located within the District, without legal limitation as to rate or amount and are further secured by a pledge of the Net
Revenues of the System, as described in the Official Statement.
Other Terms and Covenants ... Other terms of the Bonds and various covenants of the District contained in the Bond
Order under which the Bonds are to be issued are described in the Preliminary Official Statement, to which reference is
made for all purposes.
CONDITIONS OF SALE
Types of Bids and Interest Rates ... The Bonds will be sold in one block, all or none, and no bid of Tess than 97% of
par value plus accrued interest to the date of delivery will be considered. Bidders must specify the rate or rates of
interest the Bonds will bear, but no bid which results in a net effective interest rate as defined by Article 717k -2,
Vernon's Annotated Texas Civil Statutes, as amended (the IBA method), of more than % will be considered. The
difference between the highest interest rate bid and the lowest interest rate bid shall not exceed 2 %. Interest rates must
be in multiples of 1 /8th or 1/20th of 1 %. Any number of interest rates and rate changes may be named, but graduating
or declining interest rates within a maturity, split interest rates within a maturity, or supplemental or zero interest rates
will not be acceptable.
Basis of Award ... For the purpose of awarding sale of the Bonds, the total interest cost of each bid will be computed
by determining, at the rate or rates specified, the total dollar value of all interest on the Bonds from the date thereof to
their respective maturities and adding thereto the dollar amount of the discount bid, if any, or deducting therefrom the
premium bid, if any. Subject to the right of the District to reject any or all bids, the Bonds will be awarded to the bidder
whose bid, based on the above computation, produces the lowest interest cost to the District. In the event of
mathematical discrepancies between the interest rates and the interest cost determined therefrom, as both appear on the
"Official Bid Form," the bid will be determined solely from the interest rates shown on the "Official Bid Form."
Good Faith Deposit ... Each bid must be accompanied by a bank cashier's check payable to the order of "The
Meadows at Chandler Creek Municipal Utility District" in the amount of $28,200 which is 2% of the par value of the
Bonds. The check will be considered as a Good Faith Deposit, and the check of the successful bidder (the "Initial
Purchaser ") will be retained uncashed by the District until the Bonds are delivered. Upon payment for and delivery of
the Bonds, the Good Faith Deposit will be returned to the Initial Purchaser uncashed. If the Initial Purchaser should fail
or refuse to make payment for or accept delivery of the Bonds in accordance with its bid, then the check will be cashed
and accepted by the District as full and complete Liquidated damages. Such check may accompany the Official Bid
Form or it may be submitted separately. If submitted separately, it shall be made available to the District prior to the
opening of the bids and shall be accompanied by instructions from the bank on which it is drawn which authorized its
use as a Good Faith Deposit. The checks of the unsuccessful bidders will be returned immediately after bids are opened
and sale of the Bonds has been awarded.
Financial Advisor's Reservation of Rights ... The District's Financial Advisor, Southwest Securities, has requested
the right to bid on the Bonds, and the District has given its consent.
OFFICIAL STATEMENT
By accepting the winning bid, the District agrees to the following representations and covenants to assist the Initial
Purchaser in complying with Rule 15c2 -12 of the Securities and Exchange Commission ( "SEC ").
Final Official Statement ... The District has prepared the accompanying Preliminary Official Statement for
dissemination to potential purchasers of the Bonds, but will not prepare any other document or version for such purpose
except as described below. The District will be responsible for completing the Official Statement by inserting the
interest rates bid, the purchase price bid, the ratings assigned to the Bonds (if not currently included) if applicable, the
iii
purchase of municipal bond insurance, if any, the initial public offering yields as set forth in the Official Bid Form, or
otherwise supplied by the Initial Purchaser, and for preparing and inserting the final debt service schedule. The District
does not intend to amend or supplement the Official Statement otherwise, except to take into account certain subsequent
events, if any, as described below. Accordingly, the District deems the accompanying Preliminary Official Statement
to be final as of its date, within the meaning of SEC Rule 15c2- 12(b)(1), except for the omission of the foregoing items.
By delivering the final Official Statement or any amendment or supplement thereto in the requested quantity to the
Initial Purchaser on or after the sale date, the District represents the same to be complete as of such date, within the
meaning of SEC Rule 15c2- 12(e)(3). Notwithstanding the foregoing, the only representations concerning the absence of
material misstatements or omissions from the Official Statement which are or will be made by the District are those
described in the Official Statement under "OFFICIAL STATEMENT - Certification as to Official Statement."
Changes to Official Statement During Underwriting Period... If, subsequent to the date of the Official Statement to
and including the date the Initial Purchaser is no longer required to provide an Official Statement to potential customers
who request the same pursuant to 15c2 -12 of the federal Securities Exchange Act of 1934 (the "Rule ") (the earlier of (i)
90 days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement
is available to any person from a nationally recognized repository but in no case less than 25 days after the "end of the
underwriting period "), the District leams or is notified by the Initial Purchaser of any adverse event which causes any of
the key representations in the Official Statement to be materially misleading, the District will promptly prepare and
supply to the Initial Purchaser a supplement to the Official Statement which corrects such representation to the
reasonable satisfaction of the Initial Purchaser, unless the Initial Purchaser elects to terminate its obligation to purchase
the Bonds as described below. See "DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS -
Delivery." The obligation of the District to update or change the Official Statement will terminate when the District
delivers the Bonds to the Initial Purchaser (the "end of the underwriting period" within the meaning of the Rule), unless
the Initial Purchaser provides written notice to the District that less than all of the Bonds have been sold to ultimate
customers on or before such date, in which case the obligation to update or change the Official Statement will extend
for an additional period of time of 25 days after all of the Bonds have been sold to ultimate customers. In the event the
Initial Purchaser provides written notice to the District that less than all of the Bonds have been sold to ultimate
customers, the Initial Purchaser agrees to notify the District in writing following the occurrence of the "end of the
underwriting period" as defined in the Rule.
Delivery of Official Statements ... The District will furnish to the Initial Purchaser (and to each other participating
underwriter of the Bonds, within the meaning of SEC Rule 15c2- 12(a), designated by the Initial Purchaser), within
seven (7) business days after the sale date, the aggregate number of Official Statements requested but not in excess of
250 copies. The District will also furnish to the Initial Purchaser a like number of any supplement or amendment
prepared by the District for dissemination to potential purchasers of the Bonds as described above in "OFFICIAL
STATEMENT -. Changes to Official Statement During Underwriting Period" as well as such additional copies of the
Official Statement or any supplement or amendment as the Initial Purchaser may request prior to the 25th day after the
"end of the underwriting period" within the meaning of the Rule. The District will pay the expense of preparing up to
250 copies of the Official Statement and all copies of any supplement or amendment issued on or before the delivery
date, but the Initial Purchaser must pay for all other copies of the Official Statement or any supplement or amendment
thereto.
Rule G -36 Requirements ... It is the responsibility of the Initial Purchaser to comply with the Municipal Securities
Rule Making Board's Rule G -36 within the required time frame. The Initial Purchaser must send two copies of the
"Official Statement" along with two complete Form G -36's to the appropriate address.
DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS
Delivery ... The Bonds will be tendered to the Initial Purchaser as a single typewritten, photocopied or otherwise
reproduced bond in fully registered form in the aggregate principal amount of $1,410,000 payable to the Initial
Purchaser or its representative as designated in the Official Bid Form, manually signed by the President and Secretary
of the Board of Directors, or executed by the facsimile signatures of the President and Secretary of the Board of
Directors, and approved by the Attorney General of the State of Texas and registered and manually signed by the
Comptroller of Public Accounts of the State of Texas. Initial delivery will be at the designated office for payment of
the Paying Agent in Houston, Texas. Payment for the Bonds must be made in immediately available funds for
iv
unconditional credit to the District, or as otherwise directed by the District. The Initial Purchaser will be given five
business days' notice of the time fixed for delivery of the Bonds. It is anticipated that initial delivery can be made on or
about July 22, 1999, and it is understood and agreed that the Initial Purchaser will accept delivery and make payment
for the Bonds not later than 10:00 a.m., C.D.T., on July 22, 1999 or thereafter on the date the Bonds are tendered for
delivery up to and including August 24, 1999. If for any reason the District is unable to make delivery on or before
August 24, 1999, then the District shall immediately contact the Initial Purchaser and offer to allow the Initial Purchaser
to extend his offer for an additional thirty (30) days. If the Initial Purchaser does not elect to extend its offer within five
(5) business days thereafter, then the Good Faith Deposit will be retumed, and both the District and the Initial Purchaser
shall be relieved of any further obligation.
Exchange for Definitive Bonds ... The District shall provide definitive Bonds which shall be printed, lithographed,
engraved or produced by any combination of these methods. At any time following the initial delivery, the Paying
Agent shall, in the time and manner provided in the Bond Order, exchange the Initial Bond and deliver registered
definitive Bonds in the denomination of $5,000 or any integral multiple thereof for any one maturity, in accordance
with instructions received from the Initial Purchaser as to the persons to whom such definitive Bonds are to be
registered and transferred, the addresses of such persons, and the principal amounts and maturities of such definitive
Bonds; provided, however, should the Initial Purchaser fumish to the Paying Agent such written instructions at least
five (5) business days prior to the initial delivery on forms to be provided by the Paying Agent, the Paying Agent shall
exchange such definitive Bonds for the Initial Bond immediately upon payment for and surrender for exchange of such
Initial Bond by the Initial Purchaser. The Paying Agent will not be required to accept registration instructions after the
commencement of the five (5) day period.
CUSIP Numbers ... It is anticipated that CUSIP identification numbers will be printed or otherwise reproduced on tAe
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute
cause for a failure or refusal by the Initial Purchaser to accept delivery of and pay for the Bonds in accordance with the
terms of this Notice of Sale and the terms of the Official Bid Form. All expenses in relation to the printing of CUSIP
numbers on the Bonds shall be paid by the District. However, the CUSIP Service Bureau charge for the assignment of
the numbers shall be the responsibility of and shall be paid for by the Initial Purchaser.
Conditions to Delivery ... The obligation of the Initial Purchaser to take up and pay for the Bonds is subject to the
Initial Purchaser's receipt of the legal opinion of the Attorney General of Texas and the legal opinion of Winstead
Sechrest & Minick, P.C., Austin, Texas, Bond Counsel for the District ( "Bond Counsel "), the no- litigation certificate,
all described below, and the non - occurrence of the events described below under "No Material Adverse Change." In
addition, if the District fails to comply with its obligations under "OFFICIAL STATEMENT" above, the Initial
Purchaser may terminate its contract to purchase the Bonds by delivering written notice to the District within five (5)
days thereafter.
Legal Opinions ... The District will furnish the Initial Purchaser a transcript of certain proceedings held incident to the
authorization and issuance of the Bonds, including a certified copy or original of the approving opinion of the Attorney
General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State of Texas, to the
effect that the Bonds are valid and binding obligations of the District, payable from the proceeds of an annual ad
valorem tax levied, without limit as to rate or amount , upon all taxable property within the District and further secured
by a pledge of the Net Revenues of the District's System. The District also will furnish the legal opinion of Winstead
Sechrest & Minick, P.C., Bond Counsel, to the effect that, based upon an examination of such transcript, (1) the Bonds
are valid and legally binding obligations of the District payable from the sources and enforceable in accordance with the
terms and conditions described therein, except to the extent that the enforceability thereof may be affected by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the exercise of
judicial discretion in accordance with general principles of equity, (2) the Bonds are payable, both as to principal and
interest, from the levy of ad valorem taxes, without limitation as to rate or amount, against taxable property within the
District and further secured by a pledge of the Net Revenues of the District's System, and (3) pursuant to the Internal
Revenue Code of 1986, (the "Code ") then in effect and existing regulations, published rulings, and court decisions
thereunder and assuming continuing compliance by the District with the provisions of the Bond Order, the interest on
the Bonds is excludable from the gross income, and will not be subject to the alternative minimum tax on individuals
for federal income tax purposes. The statutes, regulations, rulings, and court decisions on which such opinion is based
are subject to change. Neither the opinion of the Attomey General nor the opinion of Bond Counsel will express any
v
opinion or make any comment with respect to the sufficiency of the security for or the marketability of the Bonds.
The opinion of Bond Counsel is expected to be reproduced on the back panel of the definitive Bonds over a
certification by the facsimile signature of the Secretary of the Board attesting that such reproduction is a true and
correct copy of the original opinion. The failure to print such legal opinion on any Bond shall not constitute cause for a
failure or refusal by the Initial Purchaser to accept delivery of and pay for the Bonds.
Certification of Issue Price ... In order to provide the District with information required to enable it to comply with
certain conditions of the Internal Revenue Code of 1986, as amended, relating to the exemption of interest on the Bonds
from the gross income of their owners, the Initial Purchaser will be required to complete, execute, and deliver to the
District (on or before the date of delivery of the Bonds) a certification as to the "issue price" of the Bonds substantially
in the form accompanying this "Notice of Sale" of the Bonds. In the event the successful bidder will not re -offer the
Bonds for sale or is unable to sell a substantial amount of the Bonds of any maturity by the date of delivery, such
certificate may be modified in a manner approved by the District and Bond Counsel. Each bidder, by submitting its
bid, agrees to complete, execute, and deliver such a certificate by the date of delivery of the Bonds, if its bid is accepted
by the District. It will be the responsibility of the Initial Purchaser to institute such syndicate reporting requirements, to
make such investigation, or otherwise to ascertain the facts necessary to enable it to make such certification with
reasonable certainty. Any questions concerning such certification should be directed to Bond Counsel. In no event will
the District fail to deliver the Bonds as a result of the Initial Purchaser's inability to sell a substantial amount of the
Bonds at a particular price prior to delivery.
Qualified Tax - Exempt Obligations for Financial Institutions ... Section 265(a) of the Code provides, in pertinent
part, that interest paid or incurred by a taxpayer, including a "financial institution," on indebtedness incurred br
continued to purchase or carry tax- exempt obligations is not deductible by such taxpayer in determining taxable
income. Section 265(b) of the Code provides an exception to the disallowance of such deduction for any interest
expense paid or incurred on indebtedness of a taxpayer which is a "financial institution" allocable to tax- exempt
obligations, other than "private activity bonds," which are designated by a "qualified small issuer" as "qualified tax -
exempt obligations." A "qualified small issuer" is any governmental issuer (together with any subordinate issuers) who
issues no more than $10,000,000 of tax- exempt obligations during the calendar year. Section 265(b)(5) of the Code
defines the term "financial institution" as referring to any corporation described in section 585(a)(2) of the Code, or any
person accepting deposits from the public in the ordinary course of such person's trade or business which is subject to
federal or state supervision as a financial institution.
The District expects to designate the Bonds as "qualified tax- exempt obligations" within the meaning of section 265(b)
of the Code. In furtherance of that designation, the District will covenant to take such action which would assure or to
refrain from such action which would adversely affect the treatment of the Bonds as "qualified tax- exempt obligations."
Potential purchasers should be aware that if the issue price to the public (or, in the case of discount bonds, the amount
payable at maturity) exceeds $10,000,000, then such obligations might fail to satisfy the $10,000,000 limitation and the
obligations would not be "qualified tax -exempt obligations."
No Material Adverse Change ... The obligations of the District to deliver the Bonds and of the Initial Purchaser to
accept delivery of and pay for the Bonds are subject to the condition that at the time of delivery of and receipt of
payment for the Bonds, there shall have been no material adverse change in the condition of the District from those set
forth in or contemplated by the "Preliminary Official Statement" as it may have been supplemented or amended through
the date of sale.
No-Litigation Certificate ... On the date of delivery of the Bonds to the Initial Purchaser, the District will deliver to
the Initial Purchaser a certificate, as of the same date, to the effect that to the best of the District's knowledge no
litigation of any nature is pending or, to the best of the certifying officers' knowledge or belief, threatened against the
District, contesting or affecting the Bonds; restraining or enjoining the authorization, execution, or delivery of the
Bonds; affecting the provision made for the payment of or security for the Bonds; in any manner questioning the
authority or proceedings for the issuance, execution or delivery of the Bonds; or affecting the validity of the Bonds or
the title of the present officers and directors of the District.
vi
CONTINUING DISCLOSURE
The District will agree in the Bond Order to provide certain periodic information and notices of material events in
accordance with the Rule, as described in the Preliminary Official Statement under "CONTINUING DISCLOSURE OF
INFORMATION." The Initial Purchaser's obligation to accept and pay for the Bonds is conditioned upon delivery to
the Initial Purchaser(s) or its (their) agent of a certified copy of the Bond Order containing the agreement described
under such heading.
GENERAL CONSIDERATIONS
Future Registration ... The Bonds are transferred, registered and exchanged only on the registration books of the
Paying Agent, and such registration shall be at the expense of the District though the District or Paying Agent may
require payment by an owner of the Bonds requesting a transfer or exchange of Bonds of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any transfer or exchange of any Bond. A
Bond may be transferred or exchanged upon surrender to the Paying Agent accompanied by a written instrument of
transfer acceptable to the Paying Agent duly executed by the registered owner thereof or his attorney duly authorized in
writing. Upon surrender for transfer of any Bond to the Paying Agent, the District shall execute and the Paying Agent
shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the
same stated maturity and of any authorized denomination, and of a like aggregate principal amount.
Record Date ... The record date ( "Record Date ") for the interest payable on any interest payment date means the 15th
calendar day of the month next preceding such interest payment date.
Record Date for Bonds to be Redeemed ... Neither the District nor the Paying Agent shall be required (1) to issue,
transfer, or exchange any Bond during the period commencing with the close of business on any Record Date and
ending with the opening of business on the next following principal or interest payment date or (2) to transfer or
exchange, in whole or in part, any Bond or any portion thereof selected for redemption prior to maturity, within forty-
five (45) calendar days prior to its redemption date.
Investment Considerations ... The Bonds involve certain investment considerations and all prospective bidders are
urged to examine carefully the Preliminary Official Statement with respect to the investment considerations associated
with the Bonds. Particular attention should be given to the information set forth therein under the caption "RISK
FACTORS."
Municipal Bond Rating and Insurance ... The District has exercised its best efforts, but has not been successful in
obtaining an investment grade rating for the Bonds. In addition, no application has been made to a bond insurance
company for a municipal bond insurance policy.
Reservation of Rights ... The District reserves the right to reject any and all bids and to waive any and all
irregularities, except time of filing.
Not an Offer to Sell ... This Official Notice of Sale does not alone constitute an offer to sell the Bonds but is merely
notice of sale of the Bonds. The invitation for bids on the Bonds is being made by means of this Official Notice of
Sale, the Preliminary Official Statement and the Official Bid Form
Registration and Qualification Under Securities Laws ... The offer and sale of the Bonds have not been registered
or qualified under the Securities Act of 1933, as amended, in reliance upon the exemptions provided thereunder; the
Bonds have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions
contained therein; nor have the Bonds been registered or qualified under the securities laws of any other jurisdiction.
The District assumes no responsibility for registration or 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 registration or 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 or qualification
provisions.
vii
By submission of a bid, the Initial Purchaser represents that its sale of the Bonds m states other than Texas will be made
only pursuant to exemptions from registration or qualification or, where necessary, the Initial Purchaser will register
and qualify the Bonds in accordance with the securities laws of any jurisdiction which so requires. The District agrees
to cooperate, at the Initial Purchaser's written request and expense, in registering or qualifying the Bonds, or in
obtaining exemption from registration. or qualification, in any state where such action is necessary, provided that the
District shall not be required to file a general or special consent to service of process in any jurisdiction.
Copies of Documents ... Copies of the Official Notice of Sale, the Preliminary Official Statement, the Official Bid
Form, Audits, and the pro forma Bond Order may be obtained at the offices of Southwest Securities, 701 Brazos Street,
Suite 400, Austin, Texas 78701, Financial Advisor to the District.
June 17, 1999
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viii
Doug Eastwood, President
Board of Directors
The Meadows at Chandler Creek
Municipal Utility District
President and Board of Directors
The Meadows at Chandler Creek
Municipal Utility District
Winstead Sechrest & Minick, P.C.
100 Congress Avenue, Suite 900
Austin, Texas 78701
Directors:
OFFICIAL BID FORM
We have read in detail the Official Notice of Sale and Preliminary Official Statement of The Meadows at Chandler
Creek Municipal Utility District (the "District ") relating to its $1,410,000 Combination Unlimited Tax and Revenue
Bonds, Series 1999 (the "Bonds "), which by reference are made a part hereof. We recognize the special investment
considerations involved in these securities, and have made such inspections and investigations as we deem necessary in
order to evaluate the investment quality of the Bonds. Accordingly, we offer to purchase the District's legally issued
Bonds, upon the terms and conditions set forth in the Bond Order, the Official Notice of Sale and the Preliminary
Official Statement, for a cash price of $ (which represents % of par value)
plus accrued interest to the date of delivery of the Bonds to us, provided such Bonds mature February 1 and bear
interest in each year at the following rates:
Maturity Interest Maturity Interest
(February 1) Amount Rate (February 1) Amount Rate t
2003 $30,000 2014 $70,000 *
2004 40,000 2015 70,000 *
2005 40,000 2016 80,000 *
2006 40,000 * 2017 80,000
2007 40,000 • 2018 90,000 •
2008 50,000 * 2019 100,000 •
2009 50,000 * 2020 100,000 •
2010 50,000 * 2021 100,000 *
2011 50,000 * 2022 100,000 *
2012 60,000 * 2023 110,000 •
2013 60,000 •
* The District reserves the right to redeem, prior to maturity, those Bonds maturing February 1, 2006 through 2023,
both inclusive in whole or from time to time in part on February 1, 2005 or on any date thereafter at a price of par
plus accrued interest from the most recent interest payment date to the date fixed for redemption.
Our calculation (which is not a part of this bid) of the interest cost from the above bid is:
Total Interest Cost $
Plus: Cash Discount $
Net Interest Cost $
Net Effective Interest Rate
The mandatory sinking fund installments checked above, if any, shall be applied for the redemption of term bonds maturing as
follows:
The initial bond shall be registered in the name of (syndicate manager). We
will advise the office of Bank of New York, Houston, Texas, the Paying Agent, on forms to be provided by the Paying
Agent, of our registration instructions at least five business days prior to the date set for initial delivery of Bonds on the
closing date. We will not ask the Paying Agent to accept any registration instructions after the five day period for
delivery of Bonds on the closing date,
Cashiers Check No. , issued by Bank, , Texas and payable to
your order in the amount of $28,200 (is attached hereto) (has been made available to you prior to the opening of this
bid) as the Good Faith Deposit for disposition in accordance with the terms and conditions set forth in the Official
Notice of Sale. Should we fail or refuse to make payment for the Bonds in accordance with the terms and conditions of
such Official Notice of Sale, such check shall be cashed and the proceeds retained as complete liquidated damages
against us. We hereby represent that sale of the Bonds in states other than Texas will be made only pursuant to
exemptions from registration or qualification and that, where necessary, we will register or qualify the Bonds in
accordance with the securities laws of the states in which the Bonds are offered or sold.
The undersigned agrees to complete, execute, and deliver to the District, by the date of delivery of the Bonds, a
certificate relating to the "issue price" of the Bonds in the form and to the effect attached to or accompanying the
Official Notice of Sale, with such changes thereto as may be acceptable to the District. The undersigned further agrees
to provide in writing the initial reoffering prices and other term, if any, to Southwest Securities by the close of the next
business day after the award.
Term Bond Year of First Principal
Maturity Date Mandatory Amount of Interest
February 1 Redemption Term Bond Rate
(Syndicate members, if any) Respectfully submitted,
ATTEST:
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby accepted by The Meadows at Chandler Creek Municipal Utility District this 13th
day of July, 1999.
Secretary, Board of Directors President, Board of Directors
ii
By:
(Authorized Representative)
Phone Number:
BOND YEARS
Interest Accrues From: July 1, 1999.. Due: February 1
Cumulative
Year Amount Bond Years Bond Years Year
2003 $30,000 15.00 15.00 2003
2004 40,000 183.33 198.33 2004
2005 40,000 223.33 421.67 2005
2006 40,000 263.33 685.00 2006
2007 40,000 303.33 988.33 2007
2008 50,000 429.17 1,417.50 2008
2009 50,000 479.17 1,896.67 2009
2010 50,000 529.17 2,425.83 2010
2011 60,000 579.17 3,005.00 2011
2012 60,000 755.00 3,760.00 2012
2013 70,000 815.00 4,575.00 2013
2014 70,000 1,020.83 5,595.83 2014
2015 70,000 1,090.83 6,686.67 2015
2016 80,000 1,326.67 8,013.33 2016
2017 80,000 1,406.67 9,420.00 2017
2018 90,000 1,672.50 11,092.50 2018
2019 100,000 1,958.33 13,050.83 2019
2020 100,000 2,058.33 15,109.17 2020
2021 100,000 2,158.33 17,267.50 2021
2022 100,000 2,258.33 19,525.83 2022
2023 110,000 2,594.17 22,120.00 2023
$1,410,000
Total Bond Years: 22,120.00
Average Maturity: 15.69 years
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111
ISSUE PRICE CERTIFICATE
The undersigned hereby certifies with respect to the sale of The Meadows at Chandler Creek Municipal Utility District
Combination Unlimited Tax and Revenue Bonds, Series 1999 (the "Bonds "), issued in the aggregate principal amount
of $1,410,000, as follows:
1. The undersigned is the underwriter ( "Underwriter") or the manager of the syndicate of underwriters which has
purchased the Bonds from The Meadows at Chandler Creek Municipal Utility District (the "Issuer ") at
competitive sale.
2. The undersigned and/or one or more other members of the underwriting syndicate, if any, have made a bona
tide offering to the public of the Bonds of each maturity at the respective prices set forth below.
3. The first price during the initial offering (expressed as a "yield ") of each maturity of the Bonds which a
substantial amount thereof (at least 10 percent of principal amount of each maturity of the Bonds) has been
sold to the public is as set forth below:
Offering Offering
Year of Principal Price Year of Principal Price
Maturity Amount ( %/Yield) Ma Amount ( %/ Yield)
2003 $30,000 2014 $70,000 t
2004 40,000 2015 70,000
2005 40,000 2016 80,000
2006 40,000 2017 80,000
2007 40,000 2018 90,000
2008 50,000 2019 100,000
2009 50,000 2020 100,000
2010 50,000 2021 100,000
2011 50,000 2022 100,000
2012 60,000 2023 110,000
2013 60,000
4. For purposes of this certificate, the term "public" does not include (a) the undersigned, (b) members of the
syndicate, if any, managed by the undersigned, or (c) any bondhouses, brokers, dealers, and similar persons or
organizations acting in the capacity of underwriters or wholesalers that are related to, or controlled by, or are
acting on behalf of or as agents for the undersigned or members of any syndicate in which the undersigned is
participating in the sale of the Bonds.
5. The offering prices described above reflect current market prices at the time of such sales.
6. The undersigned understands that the statements made herein will be relied upon by the Issuer in its efforts to
comply with the conditions imposed by the Internal Revenue Code of 1986, as amended, and by Bond Counsel
in rendering their opinion that the interest on the Bonds is excludable from the gross income of the owners
thereof.
EXECUTED AND DELIVERED this day of , 1999.
(Name of Underwriter or Manager)
By:
Title:
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 17, 1999
NEW ISSUE -BOOK- ENTRY -ONLY
Delivery of the Bonds is subject to the opinion of Bond Counsel to the effect that interest on the Bonds will be excludable from gross income for fedora
income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described unde
"LEGAL MATTERS - Tax Exemption" herein including the alternative minimum tax on corporations. The District is expected to designate the Bonds as
Qualified Tax - Exempt Obligations. See "LEGAL MATTERS - Qualified Tax - Exempt Obligations,"
51,410,000
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
(A Political Subdivision of the State of Texas Located in Williamson County, Texas)
COMBINATION UNLIMITED TAX AND REVENUE BONDS, SERIES 1999
Dated: July 1, 1999 Due: February 1, as shown below
Interest on the herein described bonds (the "Bonds ") will accrue from July 1, 1999 and is payable February I, 2000 and each August I and
February 1 thereafter until the earlier of maturity or redemption, and will be calculated on the basis of a 360 -day year composed of twelve
30 - day months. The Bonds will be issued in fully registered form only, without coupons, in the denomination of $5,000 or any integra
multiple thereof, and when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trus
Company ( "DTC "), New York, New York, acting as securities depository for the Bonds until DTC resigns or is discharged. The Bonds
initially will be available to purchasers in book -entry form only. So long as Cede & Co., as the nominee of DTC, is the registered owner of
the Bonds, principal of and interest on the Bonds will be payable by the paying agent to DTC, which will be solely responsible for making
such payment to the beneficial owners of the Bonds. The initial Paying Agent/Registrar (the "Paying Agent ") for the Bonds is Bank of New
York, Houston, Texas (the "Paying Agent "). The Bonds are obligations solely of the District and are not obligations of the City of Round
Rock, Texas; Williamson County, Texas; the State of Texas; or any entity other than the District.
MATURITIES
(Due February 1)
Initial Initial
Principal Interest Reoffering Principal Interest Reoffering
Amount a Due Yield (b) Amount Rate a Due Yield (b)
130,000 2003 570,000• 2014
40,000 2004 70,000• 2015
40,000 2005
80,000' 2016'
40,000• 2006 80,000• 2017
40,000• 2007 90,000• 2018
50,000' 2008 100,000' 2019
50,000• 2009 100,000' 2020
50,000• 2010 100,000• 2021
50,000• 201 I 100,000• 2022
60,000• 2012 110,000• 2023
60,000• 2013
• Redemption Provisions: The District reserves the right to redeem, prior to maturity, in integral multiples of 15,000, those Bonds maturing February
2006 through 2023, both inclusive, in whole or from time to time in part, on February 1, 2005, or on any date thereafter at a price of par plus accrued
interest from the most recent interest payment date to the date fixed for redemption. The Bonds maturing February 1, _ and February 1, _ are
subject to mandatory sinking fund redemption . See THE BONDS - Redemption."
(a) After requesting competitive bids for purchase of the Bonds, the District has accepted the lowest bid to purchase the Bonds, bearing interest as shown
at a price of % of par plus accrued interest to the date of delivery, resulting in a net effective interest rate to the District o
(b) The initial reoffering yields indicated represent the lower of the yields resulting when priced to maturity or the first call date. The initial yields on
which the Bonds will be priced will be established by and will be the sole responsibility of the Initial Purchaser (as herein defined). The yields may
be changed at any time at the discretion of the Initial Purchaser. Accrued interest from July 1, 1999 to the date of delivery of the Bonds to the Initia
Purchaser is to be added to the price.
The Bonds, when issued, will constitute valid and legally binding obligations of the District and will be payable from the proceeds of an
annual ad valorem tax, without legal limitation to rate or amount, levied against taxable property within the District. See "THE BONDS -
Source of Payment." THE BONDS ARE SUBJECT TO SPECIAL RISK FACTORS DESCRIBED HEREIN. See "RISK FACTORS."
The Bonds are offered by the Initial Purchaser subject to prior sale, when, as and if issued by the District and accepted by the Initia
Purchaser, subject, among other things to the approval of the Initial Bond by the Attorney General of Texas and the approval of certain lega
matters by Winstead Sechrest & Minick, P.C., Austin, Texas, Bond Counsel. Delivery of the Bonds is expected on or about July 22, 1999, in
Austin, Texas.
Selling: Tuesday, July 13, 1999 at 12:00 Noon, C.D.T.
at 100 Congress Avenue, Suite 900, Austin Texas 78701
Bids Due by 11:30 A.M., C.D.T.
USE OF INFORMATION IN OFFICIAL STATEMENT _
SALE AND DISTRIBUTION OF THE BONDS
Prices and Marketability 2
Securities Laws 3
MUNICIPAL BOND RATING AND INSURANCE 3
OFFICIAL STATEMENT SUMMARY 4
THE DISTRICT 4
THE BONDS 5
RISK FACTORS..._.,.,._........._....._.,..._.,..._ 6
SELECTED FINANCIAL INFORMATION 7
OFFICIAL STATEMENT
TABLE OF CONTENTS
(TO BE UPDATED)
8
THE BONDS
General Description 8
Optional Redemption 9
Authority for Issuance ....... ,..._ ........ . .... ................ ... .,.., 9
Source of and Security for Payment 9
Payment Record 10
Flow of Funds and Investment of Funda....._..._..,.,, _..,, 10
Defeasance of Outstanding Bonds........ .. .............. _______ 10
Registration, Transfer and Exchange 11
Record Date II
Issuance of Additional Debt 11
Lost, Stolen or Destroyed Bonds 12
Legal Investment and Eligibility to Secure Public
Funds in Texas 12
Specific Tax Covenantt,..,,._.,,,.,_...._.... ......_ ..............._ 12
Additional Covenants 12
Remedies in Event of Default 13
Consolidation 13
Arurexal ion........................._...,._,..........,.. ..................,.,......_, , 13
Alteration of Boundaries 13
Approval of the Bonds 14
No-Litigation Certificate 14
No Material Adverse Change 14
Amendments to the Bond Order 14
USE AND DISTRIBUTION OF BOND PROCEEDS 14
RISK FACTORS 15
General 15
Factors Affecting Taxable Values and Tax Payments 15
Overlapping and Combined Tax Rates 16
Water, Wastewater and Water Quality.. 17
Undeveloped Acreage.. _ ............ .................. _.. _...., .....,...,,.,., 17
Demand for Certain Housing Products___ .................... 17
Tax Collections and Foreclosure Remedies 18
Registered Owners' Remedies 18
Bankruptcy Limitation to Registered Owners' Rights...,, 19
The Effect of the Financial Institutions Act of 1989
on Tax Collections of the District 19
Marketability 20
Continuing Compliance with Certain Covenants ....... .._., 20
Future Debt 20
LOCATION MAP 22
THEDISTRICT_ ................. _.._.,..,...._ ._..................._...,.,, 24
General 24
Management of the Distract 25
Location 26
Current Status of Development 27
Builders 28
Future Development 28
Annexation of the District 28
THE DEVELOPER 29
Role of a Developer 29
Historical and Current Status of Development 29
Description of the Developer 30
Utility Development Agreements__ ................ _............,..,, ,. 32
Agricultural Waiver 32
2
Future Development 32
THE SYSTEM 32
General 32
Water System 33
Wastewater System 33
100 -Year Flood Plain 34
Water and Wastewater Operations 34
PROJECTED DEBT SERVICE REQUIREMENTS 36
FINANCIAL STATEMENT - 37
Assessed Value 37
Combination Unlimited Tax and Revenue Bonds
Authorized but Unissued 37
Outstanding Bonds 37
Cash and Investment Balances 37
Investment Authority and Investment Practices
of the District 38
Current Investments 39
Estimated Overlapping Debt Statement 39
Overlapping Taxes for 1998 40
Classification of Assessed Valuation......... _ ..............__,.,_ 40
TAX DATA 40
Tax Collections 38
District Tax Rates ............ .............._.,., ._....................___., 40
District Bond Tax Rate Limitation 40
Maintenance Tax 41
Principal Taxpayers 41
Tax Adequacy for Debt Service 41 E
Debt Service Fund Management Index 42
TAXING PROCEDURES 42
Authority to Levy Taxes 42
Property Tax Code and County-Wide Appraisal
District 42
Property Subject to Taxation by the District 42
Valuation of Property for Taxation....... .................. ........ 43
District and Taxpayer Remedies 43
Levy and Collection of Taxes 43
District's Rights in the Event of Tax Delinquencies 44
Effect of FIRREA on Tax Collections 44
LEGAL MATTERS 44
Legal Opinions 44
No-Litigation Certificate 45
No Material Adverse Change ............... ........_. ....... 45
TAX MATTERS 45
Opinion................._...._...._...,........,.., .,._..._........_......,._., _ 45
Federal Income Tax Accounting Treatment of
Original Issue Discount 45
Collateral Federal Income Tax Consequences 46
State, Local and Foreign Taxes 46
Qualified Tax - Exempt Obligations for Financial
Institutions 47
CONTINUING DISCLOSURE OF INFORMATION 47
Availability of Information from NRMSIRs and SID 48
Limitations and Amendments 48
Compliance with Prior Undertakings 48
FINANCIAL ADVISOR...,.,.,_.. 48
OFFICIAL STATEMENT 48
Preparation 48
Experts 49
Updating the Official Statement During Underwriting
Period 49
Certification as to Official Statement 49
Official Statement Deemed Final ................. 50
Annual Audits 50
PHOTOGRAPHS
APPENDIX A - Audited Financial Statements
APPENDIX B - Bond Counsel Opinion
Award of the Bonds
Prices and Marketability
USE OF INFORMATION IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized to give any information or to make any representations
other than those contained in this Official Statement, and if given or made, such other information or representations
must not be relied upon as having been authorized by the District.
This Official Statement does not alone constitute, and is not authorized by the District for use in connection with, an
offer to sell or the solicitation of any offer to buy in any state in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to
make such offer or solicitation.
All of the summaries of the statutes, orders, contracts, records, and engineering and other related reports set forth in the
Official Statement are made subject to all of the provisions of such documents. These summaries do not purport to be
complete statements of such provisions, and reference is made to such documents, copies of which are available from
the Financial Advisor, for further information.
This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions, or matters of
opinion, or as to the likelihood that they will be realized. Any information and expressions of opinion herein contained
are subject to change without notice, and neither the delivery of this "Official Statement" nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the
other matters described herein since the date hereof. However, the District has agreed to keep this "Official Statement"
current by amendment or sticker to reflect material changes in the affairs of the District, and to the extent that
information actually comes to its attention, other matters described in the "Official Statement" until delivery of the
Bonds to the Initial Purchaser and thereafter only as specified in "OFFICIAL STATEMENT - Updating the Official
Statement During Underwriting Period" and "CONTINUING DISCLOSURE OF INFORMATION."
SALE AND DISTRIBUTION OF THE BONDS
After requesting competitive bids for the Bonds, the District has accepted the bid of (the
"Initial Purchaser ") to purchase the Bonds at the interest rates shown on the cover page of this Official Statement at a
price of % of par plus accrued interest to date of delivery. No assurance can be given that any trading market will
be developed for the Bonds after their sale by the District to the Initial Purchaser. The District has no control over the
price at which the Bonds are subsequently sold, and the initial yields at which the Bonds are priced and reoffered are
established by and are the sole responsibility of the Initial Purchaser.
The delivery of the Bonds is conditioned upon the receipt by the District of a certificate executed and delivered by the
Initial Purchaser on or before the date of delivery of the Bonds stating the prices at which a substantial amount of the
Bonds of each maturity has been sold to the public. For this purpose, the term "public" shall not include any person
who is a bond house, broker or similar person acting in the capacity of underwriter or wholesaler. Otherwise, the
District has no understanding with the Initial Purchaser regarding the reoffering yields or prices of the Bonds.
Information concerning reoffering yields or prices is the responsibility of the Initial Purchaser.
The prices and other terms with respect to the offering and sale of the Bonds may be changed from time -to time by the
Initial Purchaser after the Bonds are released for sale, and the Bonds may be offered and sold at prices other than the
initial offering prices, including sales to dealers who may sell the Bonds into investment accounts. IN CONNECTION
WITH THE OFFERING OF THE BONDS, THE INITIAL PURCHASER MAY OVER - ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OR THE BONDS AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
3
The District has no control over trading of the Bonds in the secondary market. Moreover, there is no guarantee that a
secondary market will be made in the Bonds. In such a secondary market, the difference between the bid and asked
price of utility district bonds may be greater than the difference between the bid and asked price of bonds of
comparable maturity and quality issued by more traditional municipal entities, as bonds of such entities are more
generally bought, sold or traded in the_secondary market.
Securities Laws
No registration statement relating to the offer and sale of the Bonds has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, in reliance upon the exemptions provided thereunder. The
Bonds have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions
contained therein; nor have the Bonds been registered or qualified under the securities laws of any other jurisdiction.
The District assumes no responsibility for registration of the Bonds under the securities laws of any other jurisdiction in
which the Bonds, may be offered, sold or otherwise transferred. This disclaimer of responsibility for registration or
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 or qualification provisions in such other
jurisdiction.
MUNICIPAL BOND RATING AND INSURANCE
The District has utilized its best efforts but has not been successful in obtaining an investment grade rating for the Bonds.
No application has been made to a bond insurance company for a municipal bond insurance policy.
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4
OFFICIAL STATEMENT SUMMARY
The following material is qualified in its entirety by the more detailed information and financial statements appearing
elsewhere 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 DISTRICT
The Issuer The Meadows at Chandler Creek Municipal Utility District (the "District ") is a
political subdivision of the State of Texas, as authorized by Article XVI, Section 59 of
the Texas Constitution, was created in 1985 by an order of the Texas Water
Commission, predecessor to the Texas Natural Resource Conservation Commission,
and operates pursuant to Chapters 49 and 54 of the Texas Water Code, as amended.
The District was created to provide water, wastewater treatment and storm drainage to
the approximately 528.4 acres within its boundaries, all of which lies within
Williamson County, Texas. See "THE DISTRICT - General."
Location The District, which encompasses approximately 531 acres of land, is located in south
central Williamson County and lies approximately 25 miles north of the City of
Austin's central business district and 3 miles northeast of the City of Round Rock.
The District lies entirely within the extraterritorial jurisdiction of the City of Round
Rock, Texas. See "THE DISTRICT."
Landowners and
Developers The primary landowners within the District are Chandler Creek Development Limited
Partnership ( "Development "), a Texas limited partnership, and Chandler Creek
Investment Limited Partnership ( "Investment "), a Texas limited partnership, owning a
combined total of approximately 223 acres. The general partner of both Development
and Investment is E W Development Company, the president of which is Ed Wendler,
Jr.
Kaufman & Broad of Texas, Ltd. ( "K & B ") owns approximately 112 acres of land
within the District which, according to representatives of K & B, is expected to be
developed as single family lots and houses. Camco Land, Ltd. ( "Camco ") owns
approximately 36 acres. Approximately 4 acres are owned by Centex Homes, which is
ultimately expected to be developed as additional phases of an existing retirement
center. The remaining approximate 36 acres are owned by Camco. See
"LANDOWNERS AND DEVELOPERS" and "THE DISTRICT - Historical and
Current Status of Development."
Development within
the District Of the approximately 531 acres within the District, approximately 439 acres are
developable under current land development regulations. As of June 1, 1999, utility
facilities have been constructed, or are currently under construction, to serve
approximately 37% of the District including the development of 159 acres of land as
the residential subdivision of The Meadows at Chandler Creek. Development includes
481 completed single family homes, 10 homes under construction, and 42 vacant
developed single family Tots. In an addition to the single family development, the
development includes a _ - bed retirement center, a five acre park and an
approximate 12 acre elementary school site. The District currently includes
approximately 268 remaining undeveloped but developable acres. See "THE
DISTRICT - Historical and Current Status of Development ."
5
Homebuilders There are currently three homebuilders active within the District including : Choice
Homes (21 lots); Opportunity (7 lots) and K & B who is currently developing 51 lots.
Homes currently under construction within the District range in price from S84,750
to over $150,000 with an average square footage from to in living area.
THE BONDS
Description The Bonds, in the aggregate principal amount of $1,410,000 include serial bonds
maturing annually in varying amounts on February 1 of each year from through
and term bonds maturing _ and with certain mandatory redemption
amounts. Interest accrues from July 1, 1999 at the rates per annum set forth on the
cover page hereof and is payable February 1, 2000 and each August 1 and February t
thereafter until maturity or earlier redemption. The Bonds are offered in fully
registered form in integral multiples of 55,000 for any one maturity. See THE
BONDS - General Description and Redemption."
Redemption Bonds maturing in the years 2006 through 2023, inclusive, are subject to redemption
in whole or from time to time in part at the option of the District on February 1, 2005,
or on any date thereafter, at par plus accrued interest from the most recent interest
payment date to the date of redemption. The Bonds maturing February 1, and
February 1, _ are also subject to mandatory sinking fund redemption. See "THE
BONDS - Redemption."
Source of Payment Principal of and interest on the Bonds are payable from the proceeds of a continuing
direct annual ad valorem tax levied upon all taxable property within the District,
which under Texas law is not limited as to rate or amount and a lien on the Net
Revenues (hereinafter defined), if any, of the District's System (hereinafter defined).
The Bonds are obligations solely of The Meadows at Chandler Creek Municipal
Utility District and are not obligations of the City of Round Rock, Texas;
Williamson County, Texas; the State of Texas; or any entity other than the
District. See "THE BONDS - Source of Payment."
Payment Record The District has never defaulted in the timely payment of principal of or interest on its
previously issued bonds. See "FINANCIAL STATEMENT - Outstanding Bonds.
Authority for
Issuance The Bonds are issued pursuant to Article XVI, Section 59 of the Texas Constitution
and the general laws of the State of Texas, including particularly Chapters 49 and 54
of the Texas Water Code, as amended, an order of the Texas Natural Resource
Conservation Commission, and pursuant to an order (the "Bond Order ") adopted by
the Board of Directors of the District. See "THE BONDS - Authority for Issuance."
Use of Proceeds The proceeds of the Bonds will be used to acquire water, wastewater and drainage
trunk lines to serve Sections 7, 10 and 10A as well as water, wastewater and drainage
facilities to serve The Meadows at Chandler Creek, Sections 1, 2, 3 and 4 of the
development. In addition, proceeds of the Bonds will be used to pay certain costs
associated with the issuance of the Bonds. See "USE AND DISTRIBUTION OF
BOND PROCEEDS."
Bonds Authorized But
Unissued The Bonds are the second installment of $13,000,000 bonds authorized at an election
held within the District on July 13, 1985. After the sale of the Bonds, $9,140,000
bonds will remain authorized but unissued (See "FINANCIAL STATEMENT -
Combination Unlimited Tax and Revenue Bonds Authorized but Unissued ").
6
Municipal Bond Rating
and Insurance The District has utilized its best efforts but has not been successful in obtaining an
investment grade rating for the Bonds. No application has been made to a bond
insurance company for a municipal bond insurance policy.
Qualified Tax - Exempt
Obligations The District is expected to designate the Bonds as "qualified tax- exempt obligations"
pursuant to section 265(b) of the Internal Revenue Code of 1986, as amended, and
will represent that the total amount of tax- exempt bonds (including the Bonds) issued
by it during calendar year 1999 is not reasonably expected to exceed $10,000,000.
See "LEGAL MATTERS - Qualified Tax- Exempt Obligations."
Bond & General Counsel Winstead Sechrest & Minick P.C., Austin, Texas.
Financial Advisor Southwest Securities, Austin, Texas.
Engineer Gray Rinsing & Associates, Inc., Austin, Texas.
RISK FACTORS
The purchase and ownership of the Bonds involve certain investment considerations and all prospective purchasers are
urged to examine carefully the Official Statement, including particularly the section captioned "RISK FACTORS," with
respect to the investment security of the Bonds.
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7
SELECTED FINANCIAL INFORMATION
(Unaudited as of June 1, 1999)
1998 Assessed Valuation (100% of estimated market value) $46,369,612 (a)
Preliminary 1999 Assessed Valuation (100% of estimated market value) $53,882,494 (b)
Gross Debt Outstanding (after issuance of the Bonds) $3,245,937 (c)
Ratio of Gross Debt to 1998 Assessed Valuation 7.00%
Ratio of Gross Debt to Preliminary 1999 Assessed Valuation 6.02%
1998 Tax Rate
Debt Service $0.6333
Maintenance & Operation 0.1627
Total $0.7960 (d)
Debt Service Fund Balance $175,249 (e)
Average percentage of current tax collections - Tax Years 1994 -1998 98.50%
Average percentage of total tax collections - Tax Years 1994 -1998 98.96%
Projected Average Annual Debt Service Requirement (2000/2008) of the Bonds
and the Outstanding Bonds ( "Projected Average Requirement ") $388,666
Tax rate required to pay Projected Average Requirement based upon
1998 Assessed Valuation at 95% collections $0.8824/$100 A.V.
Tax rate required to pay Projected Average Requirement based upon
Preliminary 1999 Assessed Valuation at 95% collections $0.7593/$100 A.V.
Projected Maximum Annual Debt Service Requirement (2004) of the Bonds
and the Outstanding Bonds ( "Projected Maximum Requirement ") $401,464
Tax rate required to pay Projected Maximum Requirement based upon
1998 Assessed Valuation at 95% collections $0.9114/$100 A.V.
Tax rate required to pay Projected Maximum Requirement based upon
Preliminary 1999 Assessed Valuation at 95% collections $0.7843/$100 A.V.
Number of active connections as of June 1, 1999 501 (f)
Estimated population as of June 1, 1999 1,754 (g)
(a) As certified by the Williamson County Appraisal District ( "WCAD "). See "TAXING PROCEDURES."
(b) As estimated by WCAD and included solely for purposes of illustration. Such amount reflects the preliminary estimate of the taxable value
within the District on January 1, 1999, and is subject to review and change by the WCAD and the Williamson County Appraisal Review Board.
No tax will be levied on such amount unless it is certified by the WCAD. See "TAXING PROCEDURES."
(c) Includes premium on capital appreciation bonds. See "PROJECTED DEBT SERVICE REQUIREMENTS."
(d) In its order authorizing issuance of the Bonds, the Texas Natural Resource Conservation Commission directed that the District levy a tax rate
for debt service purposes of no less than 50.655 per 5100 valuation for 1999.
(e) Neither Texas law nor the Bond Order requires the District to maintain any particular sum in the Debt Service Fund.
(0 Includes 20 builder connections,
(g) Based on 3.5 residents per completed single family connection.
8
OFFICIAL STATEMENT
relating to
$1,410,000
THE MEADOWS AT CHANDLER CREEK MUNICIPAL UTILITY DISTRICT
(A Political Subdivision of the State of Texas Located in Williamson County, Texas)
Combination Unlimited Tax and Revenue Bonds, Series 1999
INTRODUCTION
This Official Statement provides certain information in connection with the issuance by The Meadows at Chandler
Creek Municipal Utility District (the "District ") of its $1,410,000 Combination Unlimited Tax and Revenue Bonds,
Series 1999 (the "Bonds ").
The Bonds are issued pursuant to Article XVI, Section 59 of the Texas Constitution and the general laws of the State of
Texas, including particularly Article 717k, Vemon's Annotated Texas Civil Statutes, as amended, Chapters 49 and 54
of the Texas Water Code, as amended, and pursuant to an order (the "Order ") adopted by the Board of Directors of the
District on the date of the sale of the Bonds, and pursuant to the Constitution and general laws of the State of Texas,
and the approving order of the Texas Natural Resource Conservation Commission (the "TNRCC" or "Commission ").
Unless otherwise indicated, capitalized terms used in this Official Statement have the same meaning assigned to such
terms in the Order.
Included in this Official Statement are descriptions of the Bonds and certain information about the District and its
finances. ALL DESCRIPTIONS OF DOCUMENTS CONTAINED HEREIN ARE SUMMARIES ONLY AND ARE
QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO EACH SUCH DOCUMENT. Copies of such documents
may be obtained from the District at Winstead Sechrest & Minick, P.C., 100 Congress Avenue Suite 900, Austin, Texas
78701 or during the offering period from the District's Financial Advisor, Southwest Securities, 701 Brazos, Suite 400,
Austin, Texas 78701 upon payment of reasonable copying, mailing and handling charges.
General Description
THE BONDS
The $1,410,000 The Meadows at Chandler Creek Municipal Utility District Combination Unlimited Tax and Revenue
Bonds, Series 1999 will bear interest from July 1, 1999 and will mature on February 1 of the years and in the principal
amounts, and will bear interest at the rates per annum, set forth on the cover page hereof. Interest on the Bonds will be
paid on February 1, 2000 and each August 1 and February 1 thereafter until maturity or earlier redemption and will be
calculated on the basis of a 360 -day year composed of twelve 30 -day months. The Bonds will be issued in fully
registered form only, without coupons, in the denomination of $5,000 or any integral multiple thereof, and when issued,
will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company
( "DTC "), New York, New York, acting as securities depository for the Bonds until DTC resigns or is discharged. The
Bonds initially will be available to purchasers in book -entry form only. So long as Cede & Co., as the nominee of
DTC, is the registered owner of the Bonds, principal of and interest on the Bonds will be payable by the paying agent to
DTC, which will be solely responsible for making such payment to the beneficial owners of the Bonds. The initial
paying agent/registrar for the Bonds is Bank of New York, Houston, Texas (the "Paying Agent ").
Redemption
Optional Redemption... The Bonds maturing on and after February 1, 2006, are subject to redemption prior to maturity
at the option of the District, in whole or from time to time in part, on February 1, 2005, or on any date thereafter, at a
redemption price equal to the principal amount thereof plus accrued interest from the most recent interest payment date
to the date fixed for redemption.
9
Mandatory Sinking Fund Redemption ... In addition to being subject to optional redemption, as provided above, the Bonds
maturing on February 1, and February 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 theDebt Service Fund:
Bonds Maturing February 1, Bonds Maturing February 1,
Mandatory Principal Mandatory Principal
Redemption Date Amount Redemption Date 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 District, 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 District, 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 for cancellation, (2) shall have been purchased and cancelled by the Paying Agent at the request of the
District, with monies in the Debt Service 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.
Notice of Redemption ... At least 30 calendar days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be published once in a fmancial journal or publication of general
circulation in the City of New York, New York or in the City of Austin, Texas. Notice shall also be sent by the Paying
Agent by United States mail, first -class postage prepaid, at least 30 calendar days prior to the date fixed for redemption, to
the registered owner of each Bond to be redeemed at its address as it appeared on the 45th calendar day prior to such
redemption date and to major securities depositories and bond information services.
The Bonds of a denomination larger than $5,000 may be redeemed in part ($5,000 or any multiple thereof). Any Bond to
be partially redeemed must be surrendered in exchange for one or more new Bonds of the same maturity for the
unredeemed portion of the principal of the Bonds so surrendered. In the event of redemption of less than all of the Bonds,
the particular Bonds to be redeemed shall be selected by the District, if less than all of the Bonds of a particular maturity are
to be redeemed, the Paying Agent is required to select the Bonds of such maturity to be redeemed by lot.
Termination of Book- Entry-Only System
The Bonds are subject to the book -entry-only system administered by DTC. See "BOOK- ENTRY -ONLY SYSTEM." In
the event that the book -entry-only system is discontinued by DTC or the District, the following provisions will be
applicable to the Bonds.
Payment... Principal of the Bonds will be payable at maturity to the registered owners as shown by the registration books
maintained by the Paying Agent upon presentation and surrender of the Bonds to the Paying Agent at the designated office
for payment of the Paying Agent in Houston, Texas (the "Designated Payment/Transfer Office "). Interest on the Bonds will
be payable by check or draft, dated as of the applicable interest payment date, sent by the Paying Agent by United States
mail, first class, postage prepaid, to the registered owners at their respective addresses shown on such records, or by such
other method acceptable to the Paying Agent requested by a registered owner at the risk and expense of such registered
owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday, or
day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent is located
are required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding
day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to
close, and payment on such date shall for all purposes be deemed to have been made on the original date payment was due.
10
Registration... If the book -entry-only system is discontinued, the Bonds may be transferred and re- registered on the
registration books of the Paying Agent only upon presentation and surrender thereof to the Paying Agent at the Designated
Payment/Transfer Office. A Bond also may be exchanged for a Bond or Bonds of like maturity and interest and having a
like aggregate principal amount or maturity amount, as the case may be, upon presentation and surrender at the Designated
Payment/Transfer Office. All Bonds . surrendered for transfer or exchange must be endorsed for assignment by the
execution by the registered owner or his duly authorized agent of an assignment form on the Bonds or other instruction of
transfer acceptable to the Paying Agent. Transfer and exchange of Bonds will 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 transfer or
exchange. A new Bond or Bonds, in lieu of the Bond being transferred or exchanged, will be delivered by the Paying
Agent to the registered owner, at the Designated Payment/Transfer Office of the Paying Agent or by United States mail,
first- class, postage prepaid. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered
to the registered owner not more than three (3) business days after the receipt of the Bonds to be canceled in the exchange
or transfer and the denominations of $5,000 or any integral multiple thereof.
Limitation on Transfer of Bonds ... Neither the District nor the Paying Agent shall be required to make any transfer,
conversion or exchange to an assignee of the registered owner of the Bonds (i) during the period commencing on the close
of business on the 15'" calendar day of the month preceding each interest payment date (the "Record Date ") and ending
with the opening of business on the next following principal or interest payment date, or (ii) with respect to any Bond
called for redemption, in whole or in part, within forty-five (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.
Replacement Bonds ... If a Bond is mutilated, the Paying Agent will provide a replacement Bond in exchange for the
mutilated Bond. If a Bond is destroyed, lost or stolen, the Paying Agent will provide a replacement Bond upon (i) the
filing by the registered owner with the Paying Agent of evidence satisfactory to the Paying Agent of the destruction, loss or
theft of the Bond and the authenticity of the registered owner's ownership, and (ii) the furnishing to the Paying Agent of
indemnification in an amount satisfactory to hold the District and the Paying Agent harmless. All expenses and charges
associated with such indemnity and with the preparation, execution and delivery of a replacement Bond must be home by
the registered owner. The provisions of the Bond Order relating to the replacement Bonds are exclusive and to the extent
lawful, preclude all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or
stolen Bonds.
Source of Payment
While the Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, the District
covenants to levy and annually assess and collect in due time, form and manner, and at the same time as other District
taxes are assessed, levied and collected, in each year, beginning with the current year, a continuing direct annual ad
valorem tax, without legal limit as to rate or amount, upon all taxable property in the District sufficient to pay the
interest on the Bonds as the same becomes due and to pay each installment of the principal of the Bonds as the same
matures, with full allowance being made for delinquencies and costs of collection. In the Bond Order, the District
covenants that said taxes are irrevocably pledged to the payment of the interest on and principal of the Bonds and to no
other purpose. The Bonds are further payable from and secured by a pledge of and a lien on certain net revenues, if
any, of the District's waterworks, sanitary sewer and drainage system ( "Net Revenues "). The Bonds are obligations of
the District and are not the obligations of the State of Texas; Williamson County, Texas; the City of Round Rock,
Texas; or any other political subdivision or any entity other than the District.
Payment Record
The District has previously issued 52,450,000 Combination Unlimited Tax and Revenue Bonds, Series 1987 and
$2,124,995.80 Combination Unlimited Tax and Revenue Refunding Bonds, Series 1994. There has been no default by
the District in payment of principal of or interest on such bonds.
11
Funds
In the Bond Order, the Debt Service Fund is created and established, and the proceeds from all taxes levied, assessed
and collected for and on account of the Bonds authorized by the Bond Order shall be deposited, as collected, in such
fund.
Upon the receipt by the District of the purchase price for the Bonds, the accrued interest on the Bonds shall be
deposited into the Debt Service Fund. The remaining proceeds of sale of the Bonds, including interest earnings
thereon, shall be deposited into the Capital Projects Fund, to be used for the purposes described in the Bond Order.
Any monies remaining in the Capital Projects Fund after completion of construction of the entire System will be
transferred to the Debt Service Fund. See "USE AND DISTRIBUTION OF BOND PROCEEDS" for a more complete
description of the use of Bond proceeds and the projects related thereto.
Authority for Issuance
At a bond election held within the District on July 13, 1985, the voters of the District authorized the issuance of
$13,000,000 principal amount of unlimited tax and revenue bonds. See "Issuance of Additional Debt" below.
By adoption of an order dated February 19, 1999, the TNRCC authorized the District to sell the Bonds subject to
certain restrictions, including restrictions on the use of Bond proceeds as summarized in "USE AND DISTRIBUTION
OF BOND PROCEEDS" and recommended, among other things, the levy of a debt service tax of at least $0.655per
$100 of assessed valuation in the initial year of the Bonds, which is 1999.
The Bonds are issued by the District pursuant to an Order of the TNRCC; an ordinance of the City of Round Rock; the
terms and conditions of the Bond Order; Article XVI, Section 59 of the Constitution of the State of Texas; Chapters 49
and 54 of the Texas Water Code, as amended; and general laws of the State of Texas relating to the issuance of bonds
by political subdivisions of the State of Texas.
Before the Bonds can be issued, the Attomey General of Texas must initially pass upon the legality of certain related
matters. The Attorney General of Texas does not guarantee or pass upon the safety of the Bonds as an investment or
upon the adequacy of the information contained in this Official Statement.
Registration and Transfer
So long as the Bonds remain outstanding, the Paying Agent shall keep a register of the owners (the "Register ") at its
principal corporate trust office and, subject to such reasonable regulations as it may prescribe, the Paying Agent shall
provide for the registration and transfer of Bonds in accordance with the terms of the Bond Order.
Each Bond shall be transferable only upon the presentation and surrender of such Bond at the principal corporate trust
office of the Paying Agent, duly endorsed for transfer, or accompanied by an assignment duly executed by the
registered owner or his authorized representative in form satisfactory to the Paying Agent. Upon due presentation of
any Bond in proper form for transfer, the Paying Agent has been directed by the District to authenticate and deliver in
exchange therefor, within three (3) business days after such presentation, a new Bond or Bonds, registered in the name
of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount
and paying interest at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal corporate trust office of the
Paying Agent for a Bond of the same maturity and interest rate and in any authorized denomination in an aggregate
amount equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The Paying Agent is
authorized to authenticate and deliver exchange Bonds. Each exchange Bond delivered shall be entitled to the benefits
and security of the Bond Order to the same extent as the Bond or Bonds in lieu of which such exchange Bond is
delivered.
Neither the District not the Paying Agent shall be required to transfer or to exchange any Bond during the period
beginning on a Record Date and ending the next succeeding interest payment date or to transfer or exchange any Bonds
12
for a period of thirty (30) days next preceding the selection of Bonds for redemption or to transfer or exchange any
Bonds called for redemption.
The District or the Paying Agent may require the registered owner of any Bond to pay a sum sufficient to cover any tax
or other governmental charge that may be imposed in connections with the transfer or exchange of such Bond(s). Any
fee or charge of the Paying Agent for such transfer or exchange shall be paid by the District.
Replacement of Paying Agent
Provision is made in the Bond Order for replacement of the Paying Agent by the District. If the Paying Agent is
replaced by the District, the new registrar shall act in the same capacity as the previous Paying Agent. Any Paying
Agent selected by the District shall be a national or state banking institution, a corporation organized and doing
business under the laws of the State of Texas, authorized to exercise trust powers, and subject to supervision or
examination by federal or state authority, to act as Paying Agent for the Bonds.
Lost, Stolen or Destroyed Bonds
Upon presentation and surrender to the Paying Agent of a mutilated Bond, the Paying Agent shall authenticate and
deliver in exchange therefor a replacement Bond of like maturity, interest rate and principal amount, bearing a number
not contemporaneously outstanding. If any Bond is lost, apparently destroyed, or wrongfully taken, the District,
pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bonds have
been acquired by a bona fide purchaser, shall, upon receipt of certain documentation from the registered owner
requested by the District or the Paying Agent and an indemnity bond, and such other security or indemnity as its
satisfactory to the District and the Paying Agent to hold them harmless, and satisfaction by the registered owner of any
other reasonable requirements of the District and the Paying Agent, execute and the Paying Agent shall authenticate and
deliver a replacement Bond of like maturity, interest rate and principal amount bearing a number not
contemporaneously outstanding.
Registered owners of lost, stolen or destroyed Bonds will be required to pay the District's cost to replace such Bonds
(including, but not limited to the fees and expenses of the Paying Agent). In addition, the District or the Paying Agent
may require the registered owner to pay a sum sufficient to cover any tax or other governmental charge that may be
imposed.
Issuance of Additional Debt
The District may issue additional bonds, with the approval of the TNRCC, necessary to provide and maintain
improvements and facilities consistent with the purposes for which the District was created. See "THE DISTRICT -
General." The District's voters have authorized the issuance of $13,000,000 of unlimited tax and revenue bonds and
could authorize additional amounts. Any additional bonds sold may be on a parity with the Bonds. Following the
issuance of the Bonds, the District will have 59,140,000 of unlimited tax and revenue bonds authorized but unissued.
The Bond Order imposes no limitation on the amount of additional parity bonds which may be authorized for issuance
by the District's voters or the amount ultimately issued by the District. See "RISK FACTORS - Future Debt."
The District is also authorized by statute to engage in fire fighting activities, including the issuance of bonds payable
from taxes for such purpose. Before the District could issue fire- fighting bonds payable from taxes, the following
actions would be required: (a) amendment to the existing City of Round Rock ordinance and agreements specifying the
purposes for which the District may issue bonds; (b) authorization of a detailed master plan and approval for the
issuance of bonds for such purpose by the qualified voters in the District; (c) approval of the master plan and issuance
of bonds by the TNRCC; and (d) approval of such bonds by the Attorney General of Texas. The Board has not
considered calling an election for purposes of authorization of a detailed master plan and issuance of bonds for fire
fighting activities at this time. Issuance of bonds for fife - fighting activities could dilute the investment security for the
Bonds.
13
Consolidation
A district (such as the District) has the legal authority to consolidate with other districts and, in connection therewith, to
provide for the consolidation of its assets, such as cash and the utility system, with the water and wastewater systems of
the district(s) with which it is consolidating as well as its liabilities (which would include the Bonds). No representation
is made conceming the likelihood of consolidation.
Remedies in Event of Default
Other than a writ of mandamus and other relief authorized by law, the Bond Order does not expressly provide a specific
remedy for a default. Although a registered owner could presumably obtain ajudgment against the District for a default
in the payment of principal or interest, such judgment could not be satisfied by execution against any property of the
District. If the District defaults, a registered owner could petition for a writ of mandamus issued by a court of
competent jurisdiction requiring the District and the District's officials to observe and perform the covenants,
obligations or conditions prescribed in the Bond Order. Such remedy might need to be enforced on a periodic basis.
The enforcement of a claim for payment on the Bonds would be subject to the applicable provisions of the federal
bankruptcy laws, any other similar laws affecting the rights of creditors of political subdivisions, and general principals
of equity. See "RISK FACTORS - Registered Owners' Remedies, and - Bankruptcy Limitation to Registered Owners'
Rights."
Legal Investment and Eligibility to Secure Public Funds in Texas
The Texas Legislature has enacted four partially conflicting statutes which pertain to the eligibility of bonds issued byfa
levee improvement district as investments for certain entities and as security for deposits of public funds in Texas:
Section 57.217 of the Water Code; Article 717k -6, Vemon's Texas Civil Statutes; Chapter 2256, Texas Government
Code ( "Public Funds Investment Act "); and Chapter 2257, Texas Government Code ( "Public Funds Collateral Act ").
After reconciling their conflicting provisions, these four statutes provide the following authorization:
I. Whether rated or unrated, bonds of the District (including the Bonds) are authorized investments in the State of
Texas for banks, savings and loan associations, insurance companies, fiduciaries, trustees and the State of Texas;
2. Bonds of the District are authorized investments for political subdivisions of the State of Texas; and
3. Bonds of the District (including the Bonds) may be used to secure the deposit of public funds in the State of Texas
only if they have been rated by a nationally recognized investment rating firm and have received a rating of not less
than "A" or its equivalent.
The District has not made any investigation of any other laws, rules, regulations or investment criteria that might affect
the suitability of the Bonds for any of the above purposes or limit the authority of any of the above entities or persons to
purchase or invest in the Bonds.
The District makes no representation that the Bonds will be acceptable to banks, savings and loan associations or public
entities for investment purposes or to secure deposits of public funds. The District has made no investigation of other
laws, regulations or investment criteria which might apply to or otherwise limit the availability of the Bonds for
investment or collateral purposes. Prospective purchasers are urged to carefully evaluate the investment quality of the
Bonds and as to the acceptability of the Bonds for investment or collateral purposes.
Defeasance
In the Bond Order the District reserves the right to defease the Bonds and discharge its obligations to the registered
owners of any or_ all of the Bonds to pay principal, interest and redemption price thereon in any manner permitted by
law.
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Specific Tax Covenants
In the Bond Order the District has covenanted with respect to, among other matters, the use of the proceeds of the
Bonds and the manner financed therewith by persons other than state or local governmental units, and the manner in
which the proceeds of the Bonds are to_ be invested. The District may cease to comply with any such covenant if it has
received a written opinion of a nationally recognized bond counsel to the effect that regulations or rulings hereafter
promulgated modify or expand provisions of the Internal Revenue Code of 1986, as amended (the "Code "), so that such
covenant is ineffective or inapplicable or compliance with such covenant adversely affects the exemption from federal
income taxation of interest on the Bonds under Section 103 of the Code.
Additional Covenants
The District has additionally covenanted in the Bond Order that to the extent it has the authority to do so, it will (i)
maintain the System in good condition and repair, ordinary wear and tear and obsolescence excepted, and operate the
System in an efficient manner and at reasonable cost, (ii) maintain insurance on the System of a kind and in an amount
which usually would be carried by municipal corporations and political subdivisions in Texas engaged in a similar type
of business, but considering any governmental immunities to which the District may be entitled, and (iii) keep accurate
records and accounts and employ an independent certified public accountant to audit and report on its financial affairs
at the close of each fiscal year, such audits to be in accordance with applicable law, rules and regulations and open to
inspection in the office of the District.
Amendment to Bond Order
The Bond Order contains provisions to the effect that the District may, without the consent of or notice to any
registered owners of the Bonds amend, change or modify the Bond Order as may be required (a) for the purpose of
curing any ambiguity, inconsistency, or formal defect or omission in the Bond Order, or (b) in connection with any
other change which is not to the prejudice of the registered owners of the Bonds. Except for such amendments, changes
or modifications, the District shall not amend, change or modify the Bond Order in any manner without the consent of
the registered owners.
Alteration of Boundaries
In certain circumstances, under Texas law the District may alter its boundaries to: 1) upon satisfying certain conditions,
annex additional territory; and 2) exclude land subject to taxation within the District that is not served by District
facilities if the District simultaneously annexes land of equal acreage and value that may be practicably served by
District facilities. No representation is made concerning the likelihood that the District would effect any change in its
boundaries.
Approval of the Bonds
The Attorney General of Texas must approve the legality of the Bonds prior to their delivery. The Attorney General of
Texas does not pass upon or guarantee the quality of the Bonds as an investment, nor does he pass upon the adequacy
or accuracy of the information contained in this Official Statement.
Bank of New York Y2K Efforts
Year 2000 renovation and testing of mission- critical systems was completed by December 31, 1998 in compliance with
requirements set forth by the Federal Financial Institutions Examination Council (FFIEC). The Paying Agent is now
operating compliant systems in critical production environments. The Paying Agent will continue its programs to
monitor major service providers and major clients and those business continuity plans are continually reviewed and
upgraded to mitigate potential risks.
As with any major company, the Paying Agent does rely on certain vendors for hardware, software, or operating
systems. To determine whether these products are Year 2000 compliant, the Paying Agent has established a Vendor
Management Program. In addition to maintaining an inventory of vendor products, the goal of the program is to
15
identify and monitor compliance status and progress. This has been achieved through several means, including written
correspondence, web -site searches, and face -to -face meetings between vendor representatives and Paying Agent users.
We continue to verify vendor claims that products are Year 2000 -ready through internal future -dated testing at the
Paying Agent's Year 2000 certification facility and proxy testing. The Paying Agent has replaced vendor products with
alternative ones if: 1) the vendor was _evaluated as not managing the Year 2000 issue adequately, 2) severe risks were
associated with remaining with that vendor product, and 3) an appropriate replacement was practicably identified and
implemented.
BOOK - ENTRY -ONLY SYSTEM
The Depository Trust Company ( "DTC "), New York, New York, will act initially as securities depository for the
Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's partnership
nominee). One fully registered certificate will be issued for each maturity of the Bonds in the aggregate principal
amount of such maturity, and will be deposited with DTC.
DTC is a limited - purpose trust company organized under the New York Banking Law, a "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 Direct
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 organizationl.
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 rules applicable to DTC
and its participants are on file with the Securities and Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit
for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ( "Beneficial Owner ") is
in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interest in the
Bonds are to be accomplished by entries made on the books of Direct or Indirect Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds,
except in the event that use of the book -entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede &
Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds;
DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may
or may not be the Beneficial Owners. The participants will remain responsible for keeping account of their holdings 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 a maturity are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be
redeemed.
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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 District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants'
accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payment dates. 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, the Initial Purchaser or the District, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the District,
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 District. Under such circumstances, in the event that a successor securities depository is riot
obtained, Bonds are required to be printed and delivered.
The District 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 in accordance with the Bond Order.
In reading this Official Statement it should be understood that while the Bonds are in the book -entry-only systegt,
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 Bond Order will be given only to DTC.
DTC management is aware that some computer applications, systems, and the like for processing data ( "Systems ") that
are dependent upon calendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial community (the "Industry") that it
has developed and is implementing a program so that its Systems, as the same relate to the timely payment of
distributions (including principal and income payments) to securityholders, book -entry deliveries, and settlement of
trades within DTC ( "DTC Services "), continue to function appropriately. This program includes a technical assessment
and a remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is
expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent upon other parties, including but not limited
to issuers and their agents, as well as third party vendors from whom DTC licenses software and hardware, and third
party vendors on whom DTC relies for information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed the Industry that it is contacting (and will continue
to contact) third party vendors from whom DTC acquires services to: (1) impress upon them the importance of such
services being Year 2000 compliant; and (ii) determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it
deems appropriate.
According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational
purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind.
Information concerning DTC and the book -entry-only system has been obtained from DTC and is not guaranteed as to
accuracy or completeness, and is not to be construed as a representation by the District, the Financial Advisor or the
Initial Purchaser.
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EXTRATERRITORIAL JURISDICTION AND ANNEXATION
The District lies wholly within the extraterritorial jurisdiction of the City of Round Rock, Texas (the "City" or "Round
Rock "). Under Texas law a city may annex and dissolve a special district located within its extraterritorial jurisdiction
without the special district's consent. When such special district is dissolved, the City must assume the assets, functions
and liabilities of the special district, including its bonded indebtedness. The City and the District have entered into
several agreements concerning the creation, operation and services to be provided to the District (collectively, the
"Agreements "). The Agreements, as supplemented, set forth, among other things, plans for operation and maintenance
of a water and wastewater system to service customers within the District and the provision of water and wastewater
services by the City to the District. Such agreements contain various provisions regarding bond issuance, land
development as well as provisions for annexation and dissolution of the District. In particular, such agreements provide
that the District will install at least 90% of the facilities and amenities for which District bonds have been authorized by
December 10, 1997. In the event the District violates such provision, the City is entitled to injunctive relief or writ of
mandamus or may revoke its approval of the installation of any further facilities or amenities and the issuance of the
balance of the District's unissued bonds; provided however, the City's right to revoke such authorization may be
exercised only if the City concurrently annexes the entire District. The District has not installed 90% of the facilities
and amenities for which District bonds have been authorized, but the City has not taken any relief to which it is entitled
under the Agreements. Upon annexation of the District into the City, the Agreements provide that the City may collect
a surcharge not to exceed $50 per month in addition to the water and sewer rate. No representation is made concerning
the likelihood of annexation of the District by Round Rock or the ability of Round Rock to make debt service payments
on the Bonds should annexation occur.
USE AND DISTRIBUTION OF BOND PROCEEDS t
The proceeds of the Bonds will be used to acquire water, wastewater, and drainage trunk lines to serve Sections 7, 10
and IOA as well as water, wastewater and drainage facilities to serve Sections 1, 2, 3 and 4 of the development. In
addition, proceeds of the Bonds will be used to pay certain costs associated with the issuance of the Bonds,
The presently estimated use and distribution of Bond proceeds is set forth below. Of the proceeds to be received from
the sale of the Bonds, $1,259,486 is estimated to be required for construction costs and $150,514 is estimated to be
required for non - construction costs.
Construction Costs: Amount
Meadows at Chandler Creek, Sections 1 & 2
Water $136,106
Wastewater 180,024
Drainage 297,006
Subtotal $613,136
Meadows at Chandler Creek, Section 3
Water $ 51,414
Wastewater 37,882
Drainage 95 339
Subtotal $184,635
Meadows at Chandler Creek, Section 4
Water $ 87,066
Drainage 884 822
Subtotal $171,888
Meadows at Chandler Creek Trunk lines to Serve,
Sections 7, 10 and 10A
Water $ 70,796
Wastewater 47,526
Drainage 171505
Subtotal $289,827
TOTAL CONSTRUCTION COSTS 51,259,486
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Non- Construction Costs:
1. Legal Fees (3 %) $ 42,300
2. Financial Advisor Fees (2 %) 28,200
3. Bond Discount (3 %) 42,300
4. Printing and Issuance Costs 14,189
5. Bond Report 20,000
6, TNRCC Fee (0.25 %) 3,525
TOTAL NONCONSTRUCTION COSTS $150,514
TOTAL BOND ISSUE REQUIREMENT $1,410,000
General
Factors Affecting Taxable Values and Tax Payments
RISK FACTORS
The Bonds, which are obligations of the District and are not obligations of the State of Texas; Williamson County,
Texas; Round Rock, Texas; or any other political subdivision, will be secured by a continuing direct annual ad valorem
tax, without legal limitation as to rate or amount, on all taxable property located within the District and a pledge of Net
Revenues, if any, of the District's System. See "THE BONDS - Source of and Security for Payment." The ultimate
security for payment of principal of and interest on the Bonds depends on the ability of the District to collect from the
property owners within the District all taxes levied against the property, or in the event of foreclosure, on the value of
the taxable property with respect to taxes levied by the District and by other taxing authorities. The collection by the
District of delinquent taxes owed to it and the enforcement by registered owners of the District's obligation to collect
sufficient taxes may be a costly and lengthy process. Furthermore, the District cannot and does not make any
representations that continued development of property within the District will accumulate or maintain taxable values
sufficient to justify continued payment by property owners or that there will be a market for the property. See
"Registered Owners' Remedies" below.
Economic Factors and Interest Rates: A substantial percentage of the taxable value of the District results from the
current market value of single - family residences and developed lots. The market value of such homes and lots is related
to general economic conditions affecting the demand for and taxable value of residences. Demand for lots and
residential dwellings can be significantly affected by factors such as interest rates, credit availability, construction costs,
energy availability and the prosperity and demographic characteristics of the urban center toward which the marketing
of lots is directed. Decreased levels of construction activity would tend to restrict the growth of property values in the
District or could adversely impact existing values.
Interest rates and the availability of mortgage and development funding have a direct impact on the construction
activity, particularly short-term interest rates at which developers and homebuilders are able to obtain financing for
development and construction costs. Lenders have been selective in recent years in making real estate loans in the
Austin area because of the negative impact to their real estate portfolios. Interest rate levels may affect the ability of a
landowner with undeveloped property to undertake and complete development activities within the District. Because of
the numerous and changing factors affecting the availability of funds, the District is unable to assess the future
availability of such funds for continued development and construction within the District. In addition, although located
approximately 25 miles from the central downtown business district of the City of Austin, the success of development
within the District and growth of District taxable property values are, to a great extent, a function of the Austin
metropolitan and regional economics.
Competition: The demand for single - family homes in the District could be affected by competition from other
residential developments including other residential developments located in other utility districts located near the
District. In addition to competition for new home sales from other developments, there are numerous previously-
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owned homes in more established neighborhoods closer to downtown Round Rock that are for sale. Such homes could
represent additional competition for homes proposed to be sold within the District.
The competitive position of the developers in the sale of developed lots and of prospective builders in the construction
of single - family residential houses within the District is affected by most of the factors discussed in this section. Such a
competitive position is directly related to the growth and maintenance of taxable values in the District and tax revenues
to be received by the District. The District can give no assurance that building and marketing programs in the District
by the developers will be implemented or, if implemented, will be successful,
Landowners Under No Obligation to the District: The principal landowners in the District, Investment and
Development, have not announced any plans to develop any of their respective acreage with the exception of
preliminary engineering plans for Section 7B, and have informed the District that they are currently negotiating the sale
of additional and within the District. K & B has informed the District of its current plans to develop its acreage into
lots and that it has no current plans otherwise to sell its land within the District. However, neither the principal
landowner nor K & B is obligated to implement such plans on any particular schedule or at all. Thus, the furnishing of
information related to the proposed plans by such parties should not be interpreted as such a commitment. The District
makes no representation about the probability of development continuing in a timely manner or about the ability of the
principal landowners, or any other subsequent landowner to whom such party may sell all or a portion of its holdings
within the District, to implement any plan of development. Furthermore, there is no restriction on the principal
landowners or K & B's right to sell its land. The District can make no prediction as to the effects that current or future
economic or governmental circumstances may have on any plans of the principal landowners or K & B. Failure to
construct taxable improvements on developed lots and tracts and failure of the principal landowners or K & B to
develop its land would restrict the rate of growth of taxable value in the District. The District is also dependent upon the
principal landowners and K & B (see "TAX DATA - Top Ten Taxpayers ") for the timely payment of ad valorem taxes,
and the District cannot predict what the future financial condition of the principal landowners or K & B will be or what
effect, if any, such conditions may have on its ability to pay taxes. See "LANDOWNERS AND DEVELOPERS."
Impact on District Tax Rates: Assuming no further development or construction of taxable improvements, the value of
the land and improvements currently within the District will be the major determinant of the ability or willingness of the
District property owners to pay their taxes. The 1998 assessed valuation of the District is $46,369,612 (see
"FINANCIAL STATEMENT "). After issuance of the Bonds, the Projected Maximum Annual Debt Service
Requirement will be $401,464 (2004) and the Projected Average Annual Debt Service Requirement will be $388,666
(2000 through 2008, inclusive). Assuming (1) no increase or decrease from the 1998 assessed valuation, and (2) no use
of funds on hand, a tax rate of $0.9114/5100 assessed valuation, at a 95% collection rate would be necessary to pay the
Projected Maximum Annual Debt Service Requirement of $401,464, and a tax rate of $0.8824 per $100 assessed
valuation at a 95% collection rate would be necessary to pay the Projected Average Annual Debt Service Requirement
of $388,666. Based on the Preliminary 1999 Assessed Valuation of $53,882,494, tax rates of $0.7843/5100 assessed
valuation and $0.7593 /$100 assessed valuation would be necessary to pay the Projected Maximum Annual Debt
Service Requirement and Projected Average Annual Debt Service Requirement, respectively. PROJECTED DEBT
SERVICE REQUIREMENTS" and "TAX DATA - Tax Adequacy for Debt Service,"
Tax Collections and Foreclosure Remedies
The District has a right to seek judicial foreclosure on a tax lien, but such remedy may prove to be costly and time
consuming and, since the future market or resale market, if any, of the taxable real property within the District is
uncertain, there can be no assurance that such property could be sold and delinquent taxes paid. Additionally, the
District's tax lien is on a parity with the liens of all other State and local taxing authorities on the property against
which the taxes are levied. Registered owners are entitled under Texas law to a writ of mandamus to compel the
District to perform its obligations. Such remedy would have to be exercised upon each separate default and may prove
costly, time consuming and difficult to enforce. Furthermore, there is no trust indenture or trustee, and all legal actions
would have to be taken on the initiative of, and be financed by, registered owners to enforce such remedies. The rights
and remedies of the registered owners and the enforceability of the Bonds may also be limited by bankruptcy,
reorganization and other similar laws affecting the enforcement of creditors' rights generally.
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Registered Owners' Remedies
In the event of default in the payment of principal of or interest on the Bonds, the registered owners have the right to
seek a writ of mandamus and other relief authorized by law, requiring the District to levy adequate taxes each year to
make such payments. Except for mandamus and other relief authorized by law, the Bond Order does not specifically
provide for remedies to protect and enforce the interest of the registered owners. There is no acceleration of maturity of
the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to
year. Although the registered owners could obtain a judgment against the District, such a judgment could not be
enforced by direct levy and execution against the District's property. Further, the registered owners cannot themselves
foreclose on property within the District or sell property within the District in order to pay the principal of and interest
on the Bonds. The enforceability of the rights and remedies of the registered owners may further be limited by laws
relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of
political subdivisions such as the District.
Bankruptcy Limitation to Registered Owners' Rights
The enforceability of the rights and remedies of registered owners may be limited by laws relating to bankruptcy,
reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions such
as the District. Subject to the requirements of Texas law discussed below, a political subdivision such as the District
may voluntarily file a petition for relief from creditors under Chapter 9 of the Federal Bankruptcy Code, 11 USC
sections 901 -946. The filing of such petition would automatically stay the enforcement of registered owners' remedies,
including mandamus and the foreclosure of tax liens upon property within the District discussed above. The automatic
stay would remain in effect until the federal bankruptcy judge hearing the case dismissed the petition, enters an order
granting relief from the stay or otherwise allows creditors to proceed against the petitioning political subdivision. A
political subdivision, such as the District, may qualify as a debtor eligible to proceed in a Chapter 9 case only if it (1) is
generally authorized to file for federal bankruptcy protection by applicable state law, (2) is insolvent or unable to meet
its debts as they mature, (3) desires to effect a plan to adjust such debts, and (4) has either obtained the agreement of or
negotiated in good faith with its creditors or is unable to negotiate with its creditors because negotiations are
impracticable. Under Texas law a municipal utility district, such as the District, must obtain the approval of the
Commission as a condition to seeking relief under the Federal Bankruptcy Code. The Commission is required to
investigate the financial condition of a financially troubled district and authorize such district to proceed under federal
bankruptcy law only if such district has fully exercised its rights and powers under Texas law and remains unable to
meet its debts and other obligations as they mature.
Notwithstanding noncompliance by a district with Texas law, a district could file a voluntary bankruptcy petition under
Chapter 9, thereby involving the protection of the automatic stay until the bankruptcy court, after a hearing, dismisses
the petition. A federal bankruptcy court is a court of equity and federal bankruptcy judges have considerable discretion
in the conduct of bankruptcy proceedings and in making the decision of whether to grant the petitioning district relief
from its creditors. While such a decision might be applicable, the concomitant delay and loss of remedies to the
registered owners could potentially and adversely impair the value of the registered owner's claim.
If a petitioning district were allowed to proceed voluntarily under Chapter 9 of the Federal Bankruptcy Code, it could
Ole a plan for an adjustment of its debts. If such a plan were confirmed by the bankruptcy court, it could, among other
things, affect a registered owner by reducing or eliminating the amount of indebtedness, deferring or rearranging the
debt service schedule, reducing or eliminating the interest rate, modifying or abrogating collateral or security
arrangements, substituting (in whole or in part) other securities, and otherwise compromising and modifying the rights
and remedies of the registered owner's claim against a district.
The Effect of the Financial Institutions Act of 1989 on Tax Collections of the District
The "Financial Institutions Reform, Recovery and Enforcement Act of 1989" ( "FIRREA "), enacted on August 9, 1989,
contains certain provisions which affect the time for protesting property valuations, the fixing of tax liens, and the
collection of penalties and interest on delinquent taxes on real property owned by the Federal Deposit Insurance
Corporation ( "FDIC ") when the FDIC is acting as the conservator or receiver of an insolvent financial institution.
21
Under FIRREA real property held by the FDIC is still subject to ad valorem taxation, but such act states (i) that no real
property of the FDIC shall be subject to foreclosure or sale without the consent of the FDIC and no involuntary liens
shall attach to such property, (ii) the FDIC shall not be liable for any penalties or fines, including those arising from the
failure to pay any real or personal property tax when due and (iii) notwithstanding failure of a person to challenge an
appraisal in accordance with state law, such value shall be determined as of the period for which such tax is imposed.
There has been little judicial determination of the validity of the provisions of FIRREA or how they are to be construed
and reconciled with respect to conflicting state laws. However, certain recent federal court decisions have held that the
FDIC is not liable for statutory penalties and interest authorized by State property tax law, and that although a lien for
taxes may exist against real property, such lien may not be foreclosed without the consent of the FDIC, and no liens for
penalties, fines, interest, attorneys fees, costs of abstract and research fees exist against the real property for the failure
of the FDIC or a prior property owner to pay ad valorem taxes when due. It is also not known whether the FDIC will
attempt to claim the FIRREA exemptions as to the time for contesting valuations and tax assessments made prior to and
after the enactment of FIRREA. Accordingly, to the extent that the FIRREA provisions are valid and applicable to any
property in the District, and to the extent that the FDIC attempts to enforce the same, these provisions may affect the
timeliness of collection of taxes on property, if any, owned by the FDIC in the District, and may prevent the collection
of penalties and interest on such taxes.
Marketability
The District has no understanding with the Initial Purchaser regarding the reoffering yields or prices of the Bonds and
has no control over trading of the Bonds in the secondary market. Moreover, there is no assurance that a secondary
market will be made in the Bonds. If there is a secondary market, the difference between the bid and asked price for the
Bonds may be greater than the difference between the bid and asked price of bonds of comparable maturity and quality
issued by more traditional issuers as such bonds are more generally bought, sold or traded in the secondary market.
Continuing Compliance with Certain Covenants
Failure of the District to comply with certain covenants contained in the Bond Order on a continuing basis prior to the
maturity of the Bonds could result in interest on the Bonds becoming taxable retroactively to the date of original
issuance. See "LEGAL MATTERS - Tax Exemption."
Future Debt
The District reserves in the Bond Order the right to issue the remaining $9,140,000 authorized but unissued bonds (see
"COMBINATION UNLIMITED TAX AND REVENUE BONDS AUTHORIZED BUT UNISSUED "), and such
additional bonds as may hereafter be approved by both the Board of Directors and voters of the District. The District
has also reserved the right to issue certain other additional bonds, special project bonds, refunding bonds, inferior lien
bonds, and other obligations described in the Bond Order. All of the remaining $9,140,000 bonds which have
heretofore been authorized by the voters of the District may be issued by the District, with the approval of the
Commission, from time to time as improvement needs arise. If the District does issue future bonds or other debt
obligations, such issuance could increase gross debt/property valuation ratios and might adversely affect the investment
security of the Bonds.
To date, Investment and Development (or their predecessors) have advanced certain funds for construction of utilities
for which they have not been reimbursed. Additionally, K & B is currently advancing funds for the development of
Section 6A (approximately 16 acres, platted as 51 lots) for which the District has agreed to partially reimburse. After
reimbursements made with Bond proceeds, approximately $1,000,000 will be reimbursable to various parties for the
development currently existing within the District (see "THE DISTRICT - Historical and Current Status of
Development "). In the opinion of the District's Engineer, the $9,140,000 authorized but unissued bonds should be
sufficient to fully reimburse amounts owed for the existing utility facilities and provide utility service to the remaining
undeveloped but potentially developable acres within the District. The District anticipates that it may issue the full
principal amount of authorized but unissued bonds ($9,140,000) in installments over the next several years. Each future
issue of bonds is intended to be sold at the earliest practicable date consistent with the maintenance of a reasonable tax
rate in the District (assuming projected increases in the value of taxable property made at the time of issuance of the
22
bonds are accurate) see "LANDOWNERS AND DEVELOPERS - Utility Development Agreements." The District
does not employ any formula with respect to assessed valuations, tax collections or otherwise to limit the amount of
parity bonds which it may issue. The issuance of additional bonds is subject to approval by the Commission pursuant
to its rules regarding issuance and feasibility of bonds. In addition, future changes in health or environmental
regulations could require the construction and financing of additional improvements without any corresponding
increases in taxable value in the District. See "THE BONDS - Issuance of Additional Debt."
Approval of the Bonds
As required by law, engineering plans, specifications and estimates of construction costs for the facilities and services
to be purchased or constructed by the District with the proceeds of the Bonds have been approved, subject to certain
conditions, by the TNRCC. See "USE AND DISTRIBUTION OF BOND PROCEEDS." In addition, the Attorney
General of Texas must approve the legality of the Bonds prior to their delivery.
Neither the TNRCC nor the Attorney General of Texas passes upon or guarantees the security of the Bonds as an
investment, nor have the foregoing authorities passed upon the adequacy or accuracy of the information contained in
this Official Statement.
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23
General
The District was created by order of the Texas Water Commission ( "TWC "), now known as the Texas Natural
Resource Conservation Commission (the "TNRCC" or "Commission "), adopted on May 14, 1985, and confirmation
election held within the District on July 13, 1985, and operates as a municipal utility district pursuant to provisions of
Chapters 49 and 54 of the Texas Water Code, as amended and other general statutes of the State of Texas applicable to
municipal utility districts. The District is subject to the continuing supervision of the Commission and is located within
the extraterritorial jurisdiction of the City of Round Rock, Texas.
The District has the statutory authority, among other things, to purchase, construct, operate and maintain all works,
improvements, facilities and plants necessary for the supply and distribution of water; the collection, transportation, and
treatment of wastewater; and the control and diversion of storm water. The District may issue bonds and other forms of
indebtedness to purchase or construct such facilities. The District may also provide solid waste collection and disposal
service and is empowered to establish, operate and maintain a fire department, independently or with one or more other
conservation and reclamation districts, if approved by the voters of the District and the Commission. The District
contracts for waste collection and disposal services and for fire protection and emergency services and has no present
plans to provide a fire department. The District is also empowered to operate and maintain recreational facilities.
Location
The District is located approximately one mile north of the intersection of U.S. Highway 79 and Texas State Highway
1460 approximately three miles north of the central business district of the City of Round Rock, Texas (the "City" pr
"Round Rock "). The District is situated on both sides of State Highway 1460 and lies adjacent to the city limits of
Round Rock.
Management of the District
Board of Directors
The District is governed by a board, consisting of five directors, which has control over and management
supervision of all affairs of the District. Directors' terms are four years with elections held within the District on the
first Saturday in May in each even numbered year. All of the directors own property in the District.
Length of Term
Name Position Service Expires May
Douglas Eastwood President 1 Year 2002
Stacy Hower Vice President 1 Year 2002
Nancy Beleckis Secretary I Year 2000
John Daniel Wilcox Treasurer 3 Years 2000
Diane Barnes Director 6 Months 2002
Consultants
Tax Assessor /Collector
THE DISTRICT
Land and improvements in the District are being appraised by the Williamson County Appraisal District. The Tax
Assessor /Collector is appointed by the Board of Directors of the District. The Travis County Tax
Assessor /Collector, Ms. Nelda Wells Spears, currently serves the District in this capacity under contract. The Travis
County Tax Assessor, Ms. Spears, serves approximately 75 other special districts as Tax Assessor /Collector.
Operator/Bookkeeper
The District contracts with Sevem Trent Environmental Services ( "Severn Trent ") to serve as Operator and
Bookkeeper for the District. Severn Trent serves in this capacity for 6 other special districts in the Austin
25
metropolitan area.
Engineer
The District's consulting engineer is Gray Jansing & Associates, Inc. (the "Engineer "). Such firm serves as
consulting engineer to 10 other special districts.
Auditor
Jeff D. Heard, Jr. P.C., ( "Heard ") certified public accountant, audited the District's September 30, 1998 financial
statements. Heard serves as auditor to one other special district.
Financial Advisor
Southwest Securities serves as the District's financial advisor (the "Financial Advisor "). The fee for services
rendered in connection with the issuance of the Bonds is based on the percentage of the Bonds actually issued, sold
and delivered and, therefore, such fee is contingent upon the sale and delivery of the Bonds. The Financial Advisor
has been authorized through a resolution of the Board to submit a bid for the purchase of the Bonds.
Bond & General Counsel
The District has engaged Winstead Sechrest & Minick P.C. ( "Winstead "), Austin, Texas, as Bond Counsel in
connection with the issuance of the District's Bonds. The fees of Bond Counsel are contingent upon the sale of and
delivery of the Bonds. Winstead also serves as the District's general counsel.
Historical and Current Status of Development
Development within the District began in 1985 with the development of the initial sections of The Meadows at
Chandler Creek Subdivisions. From 1985 through 1987 development and the construction of single family homes
continued intermittently. In 1987 the then developer conveyed all of its vacant Lots and all of the remaining
undeveloped land within the District to its development lender, a subsidiary of American General Corporation
(hereinafter "American General ").
From 1987 through March, 1994, American General maintained the development and sold lots to homebuilders. In
June, 1993, American General entered into contracts for the sale of a total of 99 lots in Chandler Creek, Section 3 to
Pioneer Homes and Clark Wilson Homes, and such homebuilders began constructing homes in the $95,000 to $120,000
price range.
In March, 1994, Camco Land Ltd., a Texas limited partnership ( "Camco ") purchased all of American General's 458
undeveloped acres and 152 vacant lots in the District and assumed the lot sales contracts with Pioneer Homes and Clark
Wilson Homes. From 1994 to early 1999, Camco developed an additional acres as single family lots and
homes were constructed within the District.
In August, 1998, Camco sold 335 acres within the District to Chandler Creek Development Limited Partnership
( "Development "), a Texas limited partnership (305.6 acres) and to Chandler Creek Investment Limited Partnership
( "Limited "), a Texas limited partnership (29.5 acres). The general partners of both Development and Limited is E W
Development Company, a Texas Corporation, JOB Real Properties, Inc., a Texas corporation and Butler Broadcasting
Management Company, Inc. Ed Wendler, Jr. is managing the property. See "LANDOWNERS AND DEVELOPERS."
According to Mr. Wendler, Development purchased Sections 6A and 7B (approximately 29.5 acres) and Investment
purchased the remaining approximate 305.6 acres.
In April, 1999, Investments sold approximately 96 acres of land within the District to Kaufman & Broad of Texas,
Ltd. ( "K & B ") and Development sold K & B an additional 16.5 acres.
26
In May, 1999, K & B commenced development of Section 6A as 51 single family lots and on June 1, 1999,
development of utility facilities to serve Section 6A was approximately 50% complete with street paving expected to
be complete by mid August, 1999. According to representatives of K & B, K & B expects to construct and market
homes on the 51 lots ranging in size from 1,106 to 2,960 square feet and in sales price from $84,750 to $119,450.
Additionally, K & B has stated that it has prepared a preliminary plat for Section 6B (approximately 22.3 acres,
platted as 54 lots) and anticipates completion of a final plat within the next 90 days with construction of utility
facilities expected to commence in October, 1999. K & B expects to develop its remaining 54 acres as an extension
of its ongoing development.
Development and Interest have announced no plans to develop their remaining 223 acres with the exception of
preparing preliminary plats and engineering plans for an additional 100 Tots. However, Development and Investment
have informed the District that they are is currently negotiating the sale of additional land within the District to K & 13
(approximately 40 -50 acres) and to other potential buyers.
In addition to the above development, there are approximately 28 vacant lots within the District which are owned by
three homebuilders: Choice Homes (21 lots); Opportunities (7 lots) and K & B who is currently developing 51 lots.
These builders are constructing homes ranging in size from _ to _ square feet and in sales price from $84,750
to $150,000. Choice Homes purchased their lots from Doyle Wilson Homebulders, who filed for bankruptcy earlier
in the year.
Additional development includes a _ - bed assisted living center (the "Center ") owned by Centex
( "Centex ") and located on a 1.4 acre site. Centex has informed the District that the Center is approximately 50%
occupied. According to Centex, it expects to expand the Center to include two other phases as development needs
arise.
The chart below reflects the status of development as of June 1, 1999:
A. Developed with Utility Facilities
Single Family Development Commercial
Platted Completed Homes Under Vacant Development
Section Acreage Lots Homes Construction Lots (Square Footage)
1 33.8650 164 157 1 6
2 9.1590 48 46 0 2
3 21.1030 99 98 0 1
4 29.2850 130 117 1 12
7A 23.0300 81 53 8 20
10A 5.6030 0 0 0 0
24 3.8310 11 10 0 1
8A (a) 3.6000 0 0 0 0
School Site (b) 12.8000 0 0 0 0
142.2760 533 481 10 42
B. Lots Platted; but not developed with Utility Facilities
6A (c) 16.3810 51
7B 12.8020 50
29.1830 101
C. Remaining Developable Acreage
267.64
27
D. Other
Park 5.0000
Flood Plain 87.0000
92.0000
Total Acreage 531.1000
(a) Land owned by Centex, assisted living center is located on approximately 1.4 acres.
(b) Round Rock Independent School District elementary school site.
(c) Contract for water, wastewater and storm drainage facilities awarded; construction of
of utilities and street paving expected to occur mid August, 1999.
Additional development within the District consists of an approximately
pool, bathhouse, tennis courts and playground. Such park is owned and
Home Owners Association and is available to all residents of the District.
within the District on approximately 12 acres.
Homebuilders
facilities is approximately 50% complete with completion
five acre park with junior olympic swimming
operated by the Meadows at Chandler Creek
A 740 pupil elementary school is also located
There are currently three homebuilders within the District including : Choice Homes (21 Tots); Opportunity (7 lots) and
K & B is currently developing 51 lots on which it expects to construct homes. Homes currently under construction
within the District in price from 584,740 to over 5150,000 with an average square footage of living area ranging frofn
to has sold homes from 19 through , 1999.
Future Development
The District contains approximately 267 remaining undeveloped but developable acres under current land development
regulations all of which is currently owned by Investment, Development and K & B. K & B has stated that its current
intention is to develop its remaining 50 acres as lots for the construction of homes; however, they are under no
obligation to continue development. Neither Investment nor Development have announced any plans to develop their
remaining 240 acres.
Annexation of the District
The District lies wholly within the extraterritorial jurisdiction of the City of Round Rock, Texas. See
"EXTRATERRITORIAL JURISDICTION AND ANNEXATION" for a discussion of the ability of the City of Round
Rock to annex the District.
Role of a Developer
LANDOWNERS AND DEVELOPERS
In general, the activities of a landowner or developer within a utility district, such as the District, include, among other
activities, purchasing land within the future district, petitioning for creation of the district, designing the development,
defining a marketing program, planning and scheduling building schedules, securing necessary governmental approvals
and permits for development, arranging for the construction of roads and the installation of utilities (including, in some
cases water, sewer, and drainage facilities in the utility district) pursuant to the rules of the Commission, and selling
improved lots or commercial reserves to builders, other developers or third parties. Ordinarily, the developer pays one
hundred percent (100 %) of the costs of paving and amenity design and construction and up to 30% of the costs of
construction of the water supply and distribution, wastewater collection and drainage facilities. While a landowner or
developer is required by the Commission to pave streets and pay for its allocable portion of the costs of utilities to be
financed by the district through a specific bond issue, if any, a developer is generally under no obligation to a district to
undertake development activities with respect to other property it owns within a district. Furthermore, there is no
restriction on a developer's right to sell any or all of the land which the developer owns within a district. In addition,
the developer is ordinarily the major taxpayer within the district during the early stages of development. The relative
28
success or failure of the developer to perform such activities in development of the property within the utility district
may have a profound effect on the security for the bonds issued by a district.
Description of Principal Landowners and Developers
In August, 1998, Camco sold 335 acres within the District to Chandler Creek Development Limited Partnership
( "Development "), a Texas limited partnership (29.5 acres) and to Chandler Creek Investment Limited Partnership
( "Limited "), a Texas limited partnership (305.6 acres). The general partners of both Development and Limited are E W
Development Company, a Texas corporation, JOB Real Properties, Inc., a Texas corporation, and Butler Broadcasting
Management Company, Inc., a Texas corporation. E W Development Company, whose President is Ed Wendler, Jr. is
managing the property. Acquisition of the property was funded through cash provided by the partners of Deevlopment
and Investments. A portion of the cash provided by the partners was borrowed from Coastal State Bank, which
borrowing ( "The Note ") is secured by a lien on approximately 198 acres of Investment's and Development's land in the
District. The Note requires quarterly interest payments and has a one -year term with the option to renew upon maturity.
According to Mr. Wendler, Development and Investment are in compliance with the repayment terms of the Note.
In April, 1999, Development and Investment entered into a purchase agreement with Kaufman & Broad of Texas, Ltd.
( "K & B ") to sell Section 6A (16.38 acres, platted as 51 lots) and 96 acres of undeveloped land. The purchase of the
lots and land was funded with cash. Utility construction is 50% complete and completion of the development of the lots
is anticipated to occur mid August, 1999, at which time K & B expects to construct and market the sale of single family
homes with a sales price ranging from the 584,75010 $119,450.
K & B representatives have stated that the remaining 96 acres are expected to be developed as additional single family
lots as development demands occur. The District makes no representation that the 96 acres will ever be developed; or if
developed, will include development similar to that presently occurring within the District.
Development and Investment have stated that additional negotiations with two entities are presently occurring with
regard to the sale of additional acres within the District, including the potential sale of an additional 40 -50 acres to K &
B. No representations can be made that the sale of this property will or will not occur. Development and Investment
have no plans for the development of any additional acreage with the exception of preparing preliminary plats and plans
for an additional 100 lots in the District.
Agricultural Waiver
Camco previously executed an agreement affecting approximately 403 acres, which is recorded in the real property
records of Williamson County and is a covenant running with the land, waiving the right to have undeveloped land
located within the District classified as agricultural, open -space or timberland. In addition, such agreement waives the
right of a developer to have its lots and houses (if any) classified as business inventory. Such agreement may not be
modified without the approval of the Commission and is binding on purchasers of such land. See "TAXING
PROCEDURES - Property Subject to Taxation by the District."
Utility Construction Agreements
The District is a party to Utility Construction Agreements with Development, Investment, K & B, and the City of
Round Rock which defines the conditions under which the District will issue additional bonds to reimburse such entities
for the water, wastewater and drainage facilities within and outside the District. Under the terms of the agreements, the
District has agreed to repay the cost of facilities through a series of bond sales over time. The District's obligation to
issue bonds and reimburse the entities for funds advanced for facilities is subject to various conditions including
approval of such facilities and bonds by the TNRCC and the Texas Attorney General, the recommendation of the
District's financial advisor that the sale of the bonds is feasible and prudent, and approval of the City of Round Rock,
Texas. Generally; bonds will be issued to pay 70% of reimbursable costs unless the District, in its sole discretion,
increases reimbursement to 100% if such expenditures qualify pursuant to the Commission's rules. The District bonds
issued will be at a net effective interest rate not to exceed 2% above the highest average interest rate reported by the
Daily Bond Buyer in its weekly "20 Bond Index."
29
General
Wastewater System
THE SYSTEM
The water, wastewater and storm drainage facilities, the purchase, acquisition and construction of which have been
permanently financed by the District with the proceeds of the bonds issued in 1987 (the "Outstanding Bonds "), have
been designed in accordance with accepted engineering practices and the recommendation of certain govemmental
agencies having regulatory or supervisory jurisdiction over construction and operation of such facilities, including,
among others, the Commission. According to Gray Jansing & Associates, Inc. (the "Engineer "), the design of all such
facilities has been approved by all governmental agencies which have jurisdiction over the District.
Operation of the District's waterworks and wastewater facilities is subject to regulation by, among other, the
Environmental Protection Agency and the Commission. In many cases, regulations promulgated by these agencies have
become effective only recently and are subject to further development and revision. By agreement, between the City of
Round Rock and the District, the City operates and maintains the District's waterworks and wastewater facilities.
Water System
Water is currently supplied to the District under a contract with the City of Round Rock through an existing 16 inch
waterline at the western boundary of the District. Billings to individual residences are handled directly by the City of
Round Rock. Elevated storage requirements for the District are met through capacity in an existing 750,000 gallon
elevated water storage tank. Pursuant to an agreement with the City of Round Rock, sufficient capacity of water is
provided to serve 2,506 living unit equivalents.
Wastewater treatment is provided to the District by agreement with the City of Round Rock. The City of Round Rock
operates a 2,100 gpm sewage lift station located on the eastern boundary of the District which pumps wastewater
through a 20 inch force main to the Chandler Creek interceptor which flows into the Round Rock wastewater treatment
plant. Pursuant to an agreement with the City of Round Rock, sufficient capacity of sewage treatment service is
provided for 2,506 living unit equivalents.
Drainage System
The storm drainage system that serves the District consists of curb and gutter streets and storm sewers that collect storm
water runoff for outfall into Chandler Creek. The facilities are designed in accordance with Williamson County, City of
Austin, and City of Round Rock criteria.
100 -Year Flood Plain
According to U.S.G.S. topographic maps and Federal Insurance Administration (FIA) maps, the District is relatively
flat with elevations ranging from 670 to 730 feet above mean sea level. The land within the District slopes generally
from 0.5% to 3.5 %. Approximately 87 acres of the District lie within the 100 -year flood plain. This acreage has been
planned as green space and will not be used for development.
Future Debt
After issuance of the Bonds, $9,140,000 unlimited tax bonds will remain authorized but unissued. To date, the major
land owner, their predecessor -in- interest and K & B have advanced certain funds to the District which are estimated to
be approximately $1,000,000 for construction of utilities for which they have not been reimbursed. In order to fully
reimburse and provide utility service to the remaining undeveloped but developable acres within the District, the
District anticipates that it may issue up to the full principal amount of authorized but unissued bonds in installments
over the next several years. In the opinion of the District's Engineer, the $9,140,000 authorized but unissued bonds
should be sufficient to fully reimburse amounts owed for the existing facilities and provide utility service to the
remaining undeveloped but potentially developable acreage.
30
Water and Wastewater Operations
Rate and Fee Schedule - Table 1
(UPDATE)
The Board of Directors establishes rates and fees for water and sewer service, subject to change from time to time. The
following schedule sets forth the rates and fees for the District's water and sewer service which have been in effect
since March 1, 1997. The City of Round Rock charges the District for water and sewer service at the same rates it
charges to its retail customers, and the City bills the District's customers for such services directly.
Water (Monthly Billing)
Base rate 5/8" meter $10.45 (minimum)
Per 1,000 gallons (for 2001 gallons and over) $1.76 per 1,000 gallons
Wastewater (Monthly Billing)
Single Family:
Base Rate $7.85 (minimum)
Per 1,000 gallons of winter average water usage (for 2001 gallons and over) $1.73 per 1,000 gallons
Tap Fees:
Tap Fees for In- District Customers per LUE:
Water $350.00
Wastewater $350.00
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31
Waterworks and Sewer System Operating Statement - Table 2
The following statement sets forth in condensed form the historical operations of the District's water and sewer system.
Accounting principles customarily employed in the determination of net revenues for coverage of debt service have
been observed and in all instances exclude depreciation. Such summary has been prepared upon information obtained
from the District's audited financial statements and records. Reference is made to such statements for further and more
complete information.
REVENUE
Property Taxes $ 67,030 $ 57,385 $ 133,501 $ 90,814 $ 29,295
Water and Wastewater Service 249,658 224,677 205,676 173,798 132,829
Interest on Temporary Investments 7,139 6,724 10,707 8,217 5,706
Developer Funding 0 0 6,009 39,204 110,593
Tap Inspection Fees 1,500 1,490 3,250 15,150 39,600
Penalties and Interest 534 196 513 0 0
Miscellaneous 414 35 207 3,783 11,074
Pool Revenue 0 0 40 9,863 9,143
TOTAL REVENUE 5326,275 5 290,507 5359,903 5340,829 $338,240
EXPENDITURES
Professional Fees $ 21,982 $ 21,765 $ 30,895 $ 30,856 $ 28,813 t
Purchased Services for Resale 249,658 224,677 205,676 175,273 136,129
Contracted Services 19,208 19,099 20,344 19,716 10,734
Utilities 7,024 6,984 6,540 5,335 5,573
Repa and Maintenance 7,088 2,982 8,291 5,039 900
Administrative 8,035 7,708 10,220 7,301 42,762
Capital Outlay 0 0 0 0 0
Solid Waste Disposal 0 0 0 0 0
Fire Fighting 0 0 0 0 0
Parks & Recreation 0 0 4,272 53,265 49,665
Other Expenditures 2,965 3,396 4,765 1,341 425
TOTAL EXPENDITURES 5315,960 $286,611 $291,003 5298,126 $268,528
TOTAL REVENUE OVER
(UNDER) EXPENDITURES 5 10 ,315 $ 3,896 $ 68,900 $ 42,703 $ 69,712
Fund Balance, End of Year
(a) Audited.
Active Single Family Connections
September 30, 1998 480
September 30, 1997 443
September 30, 1996 411
September 30, 1995 342
September 30, 1994 305
Fiscal Year Ended September 30 (a)
1998 1997 1996 1995 1994
$141,100 $130,785 $126,889 5 57,989 $ 15,286
32
Issue Dated: July 1, 1999
First Interest Payment Date: February 1, 2000
(a)
PROJECTED DEBT SERVICE REQUIREMENTS - TABLE 3
THE MEADOWS AT CHANDLER CREEK MUNIIPAL UTILITY DISTRICT
$1,410,000 Combination Unlimited Tax and Revenue Bonds, Series 1999
Series 1999 Projected
Year Outstanding Bonds Projected Total
Ending Prin Interest (a) Principal Debt Service
12/31 Principal Interest Total (Due 02/01) (Due 02 /01) (Due 08/01) Total and Interest Requirements
1999 $ 56,741 $ 56,741 $ 56,741
2000 $ 35,937 257,546 293,483 $ 45,238 $ 38,775 $ 84,013 $ 84,013 377,496
2001 180,000 108,083 288,083 38,775 38,775 77,550 77,550 365,633
2002 190,000 96,888 286,888 38,775 38,775 77,550 77,550 364,438
2003 205,000 84,738 289,738 $ 30,000 38,775 37,950 76,725 106,725 396,463
2004 215,000 71,664 286,664 40,000 37,950 36,850 74,800 114,800 4181,464
2005 230,000 57,700 287,700 40,000 36,850 35,750 72,600 112,600 400,300
2006 245,000 42,615 287,615 40,000 35,750 34,650 70,400 110,400 398,015
2007 260,000 26,325 286,325 40,000 34,650 33,550 68,200 108,200 394,525
2008 275,000 8,938 283,938 50,000 33,550 32,175 65,725 115,725 399,663
2009 50,000 32,175 30,800 62,975 112,975 112,975
2010 50,000 30,800 29,425 60,225 110,225 110,225
2011 50,000 29,425 28,050 57,475 107,475 107,475
2012 60,000 28,050 26,400 54,450 114,450 114,450
2013 60,000 26,400 24,750 51,150 111,150 111,150
2014 70,000 24,750 22,825 47,575 117,575 117,575
2015 70,000 22,825 20,900 43,725 113,725 113,725
2016 80,000 20,900 18,700 39,600 119,600 119,600
2017 80,000 18,700 16,500 35,200 115,200 115,200
2018 90,000 16,500 14,025 30,525 120,525 120,525
2019 100,000 14,025 11,275 25,300 125,300 125,300
2020 100,000 11,275 8,525 19,800 119,800 119,800
2021 100,000 8,525 5,775 14,300 114,300 114,300
2022 100,000 5,775 3,025 8,800 108,800 108,800
2023 110,000 3,025 3,025 113,025 113,025
$1,835,937 $811,236 52,647,173 $1,410,000 $633,463 $588,225 $1,221,688 $2 631 688 $5,278,861
Calculated at an annual interest raze of 5.50%; shown solely for purposes of illustration.
33
Assessed Value - Table 4
1998 Assessed Valuation (100% of estimated market value) $46,369,612 (a)
Preliminary 1999 Assessed Valuation (100% of estimated market value) $53,882,494 (b)
Gross Debt Outstanding $3,245,937 (c)
Debt Service Fund Balance $ 175,249 (d)
Ratio of Gross Debt to 1998 Assessed Valuation 7.00%
Ratio of Gross Debt to Preliminary 1999 Assessed Valuation 6.02%
Area of District: 531 acres
Estimated 1999 Population: 1,754 (e)
(a) M certified by the Williamson County Appraisal District ( "WCAD "). See "TAXING PROCEDURES."
(b) As estimated by WCAD and included solely for purposes of illustration. See "TAXING PROCEDURES" Such amount reflects an estimate of
the taxable value within the District on January 1, 1999, and is subject to review and change by the WCAD and the Williamson County
Appraisal Review Board. No tax will be levied on such amount unless it is certified by the Appraisal District.
(c) Includes Premium on Capital Appreciation Bonds. See "PROJECTED DEBT SERVICE REQUIREMENTS"
(d) Neither Texas law nor the Bond Order requires the District to maintain any particular sum in the Debt Service Fund.
(e) As of June 1, 1999. Based on 3.5 residents per active single family connection.
Combination Unlimited Tax and Revenue Bonds Authorized but Unissued - Table 5
Date
Authorization Purpose
(a) Includes the Bonds.
Outstanding Bonds - Table 6
(a) The Bonds.
FINANCIAL STATEMENT
(Unaudited as of June 1, 1999)
Authorized
07/13/85 Water, Sanitary Sewer & Drainage $13,000,000 $3,860,000(a) $9,140,000
Total $13,000,000 $3,860,000 $9,140,000
Principal
Original Amount
Dated Principal Outstanding
Date Series Purpose Amount a, 06/01/99
A. 01/01/87 1987 Water, Sanitary Sewer & Drainage $ 2,450,000 $ 0
07/01/99 1999 Water, Sanitary Sewer & Drainage 1,410,000 (a) 1,410,000
Subtotal $3,860,000 $1,410,000
B. 09/01/94 1994 Refunding $ 2,124,996 $1,835,937
Subtotal $ 2,124,996 $1,835,937
TOTAL $5,984,996 $3,245,937
Cash and Investment Balances (Unaudited as of May 20, 1999) - Table 7
Operating Fund $143,363
Debt Service Fund 175,249 (a)
Construction Fund 308,442 (b)
(a) Neither Texas law nor the Bond Order requires the District to maintain any particular sum in the Debt Service Fund.
(b) Upon the issuance of the Bonds, 5278,860 will be transferred from the construction fund to the Debt Service Fund.
34
Issued
to Date Unissued
Investment Authority and Investment Practices of the District
Available District funds are invested as authorized by Texas Law and in accordance with investment policies approved
by the Board of Directors. Both state law and the District's investment policies are subject to change.
Under Texas law, the District is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities; (2) direct obligations of the State of Texas 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 obligation, the principal and
interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas 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 that are guaranteed or insured by the Federal Deposit Insurance
Corporation or are secured as to principal by obligations described in the preceding clauses or in any other manner and
amount provided by law for District deposits, (7) certificates of deposit and share certificates issued by a state or federal
credit union domiciled in the State of Texas 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 clauses 1) through 5) or in any other manner and amount provided by law for District 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 of Texas, (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 1) two nationally
recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper if fully secured by an
irrevocable letter of credit issued by the U.S. 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 SI 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.
The District 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 AAAm or an equivalent by at least one nationally
recognized rating service. The District 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) collateralized mortgage obligations the interest rate of which is
determined by an index that adjusts opposite to the changes in the market index.
Under Texas law, the District 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 District funds, maximum allowable
stated maturity of any individual investment and maximum average dollar- weighted maturity allowed for pooled fund
groups. All District funds must be invested consistent with a formally adopted "Investment Strategy Statement" that
specifically addresses each fund's investment. Each Investment Strategy Statement will describe its objectives
concerning: 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 Texas law District 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 probable income to be derived." At least
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quarterly the investment officers of the District shall submit an investment report detailing: I) the investment position
of the District, 2) that all investment officers jointly prepared and signed the report, 3) the beginning market value, and
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 strategies and (b)
State law. No person may invest District funds without express written authority from the Board of Directors.
Under Texas law the District 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 Board of Directors,
3) require the registered principal of firms seeking to sell securities to the District to: a) receive and review the District'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) in conjunction
with its annual financial audit, perform a compliance audit of the management controls on investments and adherence to
the District's investment policy, 5) provide specific investment training for the Treasurer 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 District'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 - Table 8
The District's funds are currently invested in Texpool ($ ), LOGIC (8 ) and money market funds.
This investment portfolio is generally representative of the District's investment practices although the District has in
the past or may in the future also invest in authorized Government Securities. State law requires the District to mark its
investments to market price each calendar quarter and upon the conclusion of each fiscal year, for the purpose of
compliance with applicable accounting policies concerning the contents of the District's audited fmancial statements.
The District currently marks its investments to market price monthly.
Year 2000 Issue
The Year 2000 issue results from computer programs that do not differentiate between the year 1900 and the year 2000
because they were written using two digits rather than four to define the applicable year; accordingly, computer systems
that have time- sensitive calculations may not properly recognize the year 2000. The District contracts with various
vendors and consultants for services. See "BOOK -ENTRY -ONLY SYSTEM" for a discussion of the Year 2000
compliance of DTC.
The District's General Manager, Severn Trent has represented to the District that they have conducted date sensitive
tests on their internal system and have determined they are Year 2000 compliant. Severn Trent has further advised the
District that most of their vendors and suppliers are taking steps to become compliant in advance of December, 1999
and that they will continue to monitor the situation. The District's Engineer has further informed the District that its
water and wastewater facilities are Year 2000 compliant.
The City has made the following statement regarding its Year 2000 compliance in connection with its most recent bond
issue.
(TO COME)
While institutions are generally aware of the Year 2000 issues and are generally working to address and prevent such
problems, no assurances can be made that all such problems will be successfully resolved, and that Year 2000 issues
will not affect the District.
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Estimated Overlapping Debt Statement
Other governmental entities whose boundaries overlap the District have outstanding bonds payable from ad valorem
taxes. The following statement of direct and estimated overlapping ad valorem tax debt was developed from several
sources, including information contained in "Texas Municipal Reports," published by the Municipal Advisory Council
of Texas. Except for the amount relating to the District, the District has not independently verified the accuracy or
completeness of such information, and no person is entitled to rely upon information as being accurate or complete.
Furthermore, certain of the entities listed below may have issued additional bonds since the dates stated in this table,
and such entities may have programs requiring the issuance of substantial amounts of additional bonds, the amount of
which cannot be determined. Political subdivision overlapping the District are authorized by Texas law to levy and
collect ad valorem taxes for operation, maintenance and/or general revenue purposes in addition to taxes of debt service
and the tax burden for operation, maintenance and/or general purposes is not included in these figures.
Taxing Body
Williamson County $ 47,615,681 09/30/97 0.49% $ 233,317
Round Rock Independent School District 271,925,985 02/24/98 0.67% 1,821,904
TOTAL ESTIMATED OVERLAPPING NET DEBT $ 2,055,221
The District (a) $ 3,245,937 07/01/99 100.00% $3,245,937
TOTAL ESTIMATED DIRECT AND OVERLAPPING NET DEBT 55,301,158
Ratio of Estimated Direct and Overlapping Net Debt
to 1998 Assessed Valuation 11.43%
Ratio of Estimated Direct and Overlapping Net Debt
to Preliminary 1999 Assessed Valuation 9.84%
(a) Includes the Bonds.
Overlapping Taxes for 1998
Overlapping Entity
Williamson County $0.299000 $ 271
Round Rock Independent School District 1.757537 1,592
The District 0.796000 721
Total $2.852537 $2 584
(a) Based upon the average single family home value of 590,583
Percentage
Net Debt of Ovlpg Ovlpg
Amount As of Net Debt Net Debt
1998 Tax
Rate Per Average
5100 A.V. Tax Bill
/The rest of this page intentionally kit blank/
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Classification of Assessed Valuation (a) - Table 9
1998 1997 1996
Type Property Amount % Amount % Amount %
Single Family $40,195,367 87.39 $39,023,527 87.77 $32,917,828 85.17
Vacant Lots 532,900 1.16 1,363,790 3.07 957,790 2.48
Acreage 3,187,920 6.93 3,334,880 7.50 4,077,200 10.55
Commercial 378,829 .82 0 0
Utilities 640,850 1.39 561,270 1.26 564,230 1.46
Personal Property 176,248 .39 176,480 .40 134,558 .34
Inventory 885,000 1.92 0 .00 0 .00
Total $45,997,114 100.00% $44,459,947 100.00% $38,651,606 100.00%
TAX DATA
(a) Reflects classification of assessed valuation as supplied by the Williamson County Appraisal District ( "WCAD ") prior to adjustments or
exemptions. Such value may differ from the original certified assessed valuation, and any supplements or adjustments thereto, as supplied by
WCAD.
Tax Collections - Table 10
The following statement of tax collections reflects the historical tax collection experience of the District. Such
summary has been prepared for inclusion herein based upon information from District audits and records of the District
Tax Assessor /Collector. Reference is made to such audits and records for further and more complete information. Ste
"Classification of Assessed Valuation" above.
Tax Assessed Tax Current Total Year
Year Valuation Rate Tax Levy Amount % Amount % Ending
1993 $15,284,850 $1.0726 $163,945 $163,377 99.65 $164,513 100.35 09/30/94
1994 23,134,675 0.8750 203,723 203,114 99.70 203,603 99.94 09/30/95
1995 31,472,476 0.8250 256,259 254,445 99.29 255,547 99.72 09/30/96
1996 38,862,774 0.8500 330,142 325,359 98.55 325,359 98.55 09/30/97
1997 44,439,386 0.8111 360,448 356,966 99.03 361,302 100.24 09/30/98
1998 46,369,612 0.7960 371,291 351,785 94.75 352,576 94.96 09/30/99
(a) Collections through May 21, 1999. Taxes are due January 31 of each year
District Tax Rates - Table 11
Tax Rate per 5100 A.V. 1998 1997 1996 1995 1994
Debt Service $0.6333 $0.6611 $0.7000 $0.3933 $0.4860
Maintenance 0.1627 0.1500 0.1500 0.4317 0.3890
Total $0.7960 $0.8111 $0.8500 $0.8250 $0.8750
District Bond Tax Rate Limitation
The District's tax rate for debt service on the Bonds is legally unlimited as to rate or amount.
Maintenance Tax
The Board of Directors of the District has the statutory authority to levy and collect an annual ad valorem tax for
planning, constructing, acquiring, or maintaining or repairing or operating the District's improvements, if such
maintenance tax is authorized by a vote of the District's electors. Such tax is in addition to taxes which the District is
authorized to levy for paying principal of and interest on the Bonds, and any tax bonds which may be issued in the
future. At an election held on July 13, 1985, voters within the District authorized a maintenance tax not to exceed
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$1.00 /$100 assessed valuation. As shown above under "District Tax Rates," the District levied a 1998 maintenance and
operations tax of $0.1627/$100 assessed valuation.
Principal Taxpayers - Table 12
The following list of principal taxpayers was provided by the Williamson County Appraisal District based on the 1996,
1997 and 1998 tax rolls of the District, which reflect ownership as of January 1, of each year shown.
Name Type of Property 1998 1997 1996
Camco Land Ltd Acreage $3,572,920 53,535,270 $4,516,120
Chandler Creek Land Ltd. Acreage 537,510 685,000 233,905
Texas Utilities Electric Utilities 517,330 416,840 404,530
Centex Senior Services Group Assisted Living Center 378,828 (a) (a)
Doyle Wilson Homebuilder Inc. Vacant Lots, homes 343,531 (a) (a)
8 -A Homes Inc. Vacant Lots, homes (a) 431,698 (a)
Noonan Family Trust Acreage (a) 231,839 233,905
Scott Felder Ltd. Partnership Vacant Lots, homes (a) (a) 230,300
Buffington Homes Vacant Lots, homes 154,606
Total
Percent of Assessed Valuation
(a) Not a principal taxpayer for respective year.
Tax Adequacy for Debt Service
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$5,350,119
11.54%
Projected Average Annual Debt Service Requirements on
the Bonds (2000 through 2008)
$0.8824 Tax Rate on 1998 Assessed Valuation
of $46,369,612 @ 95% collections produces
$0.7593 Tax Rate on Preliminary 1999 Assessed Valuation
of $53,882,494 @ 95% collections produces
Projected Maximum Annual Debt Service Requirements on the Bonds (2004)
$0.9114 Tax Rate on 1998 Assessed Valuation
of $46,369,612 @ 95% collections produces
$0.7843 Tax Rate on Preliminary 1999 Assessed Valuation
of $53,882,494 @ 95% collections produces
$5,300,647 $5,773,366
11,93% 14.86%
$388,666
$388,707
$388,673
$401,464
$401,482
$401,470
The calculations shown below assume, solely for purposes of illustration, no increase or decrease in assessed valuation
from the 1998 Assessed Valuation and the Preliminary 1999 Assessed Valuation and utilize tax rates adequate to
service the District's total projected debt service requirements, including the Bonds (at an estimated interest rate of
5.50% per annum). No available debt service funds are reflected in these computations. See "RISK FACTORS -
Impact on District Tax Rates."
Debt Service Fund Management Index
Debt Service Requirements for year ending 12/31/00
Projected Debt Service Fund Balance as of 12/31/99 $395,368 (b)
1999 Tax Levy @ 95% collections produces 335,283 (c)
Total Available for Debt Service
(a) Interest payments on the Bonds begin February 1, 2000.
(b) The projected debt service fund balance includes the following:
(c) In its order approving the issuance of the Bonds, the 1NRCC recommended that a minimum 1999 debt service tax rate of 80.655 be levied by
the District.
Authority to Levy Taxes
5/20/99 Debt Service Fund Balance 8175,249
Less: 8/01/99 ( 56,741)
Plus: Transfer of Construction Funds 27J860
$395,368
Property Subject to Taxation by the District
TAXING PROCEDURES
The Board is authorized to levy an annual ad valorem tax on all taxable property within the District in an amount
sufficient to pay the principal of and interest on the Bonds and the Outstanding Bonds, its pro rata share of debt service
on any contract tax bonds and any additional bonds or obligations payable from taxes which the District may hereafter
issue (see "RISK FACTORS - Future Debt ") and to pay the expenses of assessing and collecting such taxes. The
District agrees in the Bond Order to levy such a tax from year-to -year as described more fully herein under "THE
BONDS - Source of and Security for Payment." Under Texas law, the Board is also authorized to levy and collect an
ad valorem tax for the operation and maintenance of the District and its water and wastewater system and for the
payment of certain contractual obligations, if authorized by its voters. See "TAX DATA - Tax Rate Limitation."
Property Tax Code and County-Wide Appraisal District
$377,496 (a)
$730,651
The Texas Property Tax Code (the "Property Tax Code ") specifies the taxing procedures of all political subdivisions of
the State of Texas, including the District. Provisions of the Property Tax Code are complex and are not fully
summarized herein.
The Property Tax Code requires, among other matters, county-wide appraisal and equalization of taxable property
values and establishes in each county of the State of Texas an appraisal district with the responsibility for recording and
appraising property for all taxing units within the county and an appraisal review board with responsibility for
reviewing and equalizing the values established by the appraisal district. The Williamson County Appraisal District
(the "WCAD ") has the responsibility for appraising property for all taxing units within Williamson County, including
the District. Such appraisal values are subject to review and change by the Williamson County Appraisal Review
Board (the "Appraisal Review Board "). The appraisal roll as approved by the Appraisal Review Board must be used by
the District in establishing its tax roll and tax rate.
General: Except for certain exemptions provided by Texas law, all real property, tangible personal property held or
used for the production of income, mobile homes, and certain categories of intangible personal property with a tax situs
in the District are subject to taxation by the District. Principal categories of exempt property include, but are not limited
to property owned by the State of Texas or its political subdivisions if the property is used for public purposes;
property exempt from ad valorem taxation by federal law; income producing tangible personal property or mineral
interest with a taxable value of less than $1,500; certain property used for the control of air, water or land pollution;
40
solar and wind powered energy devices; certain household goods, wares and merchandise in transit; certain farm
products owned by the producer; certain property of charitable organizations, youth development organizations,
religious organizations, and qualified schools; designated historical sites; and most individually owned automobiles. In
addition, the District may by its own action exempt residential homesteads of persons sixty-five (65) years or older and
of certain disabled persons to the extent deemed advisable by the Board of Directors of the District. The District may be
required to offer such an exemption if a majority of voters approve same at an election. The District would be required
to call such an election upon petition by twenty percent (20 %) of the number of qualified others who voted in the
preceding election. The District is authorized by statute to disregard exemptions for the disabled and elderly if granting
the exemption would impair the District's obligation to pay tax supported debt incurred prior to adoption of the
exemption by the District. Furthermore, the District must grant exemption to disabled veterans or certain surviving
dependents of disabled veterans, if requested, but only to the maximum extent of $3,000 of taxable valuation.
Residential Homestead Exemptions: The Property Tax Code authorizes the governing body of each political
subdivision in the State of Texas to exempt up to twenty percent (20 %) of the appraised value of residential homesteads
from ad valorem taxation. Where ad valorem taxes have previously been pledged for the payment of debt, the
governing body of a political subdivision may continue to levy and collect taxes against the exempt value of the
homesteads until the debt is discharged, if the cessation of the levy would impair the obligations of the contract by
which the debt was created. The adoption of a homestead exemption may be considered each year, but must be adopted
by May 1. The District has never adopted a general homestead exemption.
Freeport Goods Exemption: Freeport goods are goods, wares, merchandise, other tangible personal 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, repair, maintenance, processing or fabricating or used to repair or maintain aircraft
of a certified air carrier, and shipped out of the state within one hundred seventy five (175) days. As a result of a state
constitutional amendment passed by the Texas voters on November 7, 1989, goods in transit ( "freeport goods ") are
exempted from taxation by the District effective January 1, 1990.
Tax Abatement: The City of Round Rock, Texas, and Williamson County, Texas may designate all or part of the area
within the District as a reinvestment zone, and thereafter, the City of Round Rock, Williamson County, Round Rock
Independent School District, and the District may enter into tax abatement agreements with owners of real property
within such zone. The tax abatement agreements may exempt from ad valorem taxation by the applicable taxing
jurisdiction for a period of up to ten years, all or any part of the increase in the assessed valuation of property covered
by the agreement over its assessed valuation in the year in which the agreement is executed, on the condition that the
property owner make specified improvements or repairs to the property in conformity with a comprehensive plan. No
portion of the District is currently classified as a reinvestment zone, nor are any tax abatement agreements currently in
place.
Valuation of Property for Taxation
Generally, property in the District must be appraised by the WCAD at market value as of January 1 of each year. Once
an appraisal roll is prepared and formally approved by the Appraisal Review Board, it is used by the District in
establishing its tax rolls and tax rate. Assessments under the Property Tax Code are to be based on one hundred percent
(100 %) of market value, as such is defined in the Property Tax Code.
The Property Tax Code permits land designated for agricultural use, open space or timberland to be appraised at its
value based on the land's capacity to produce agricultural or timber products rather than at its fair market value. The
Property Tax Code permits under certain circumstances that residential real property inventory held by a person in the
trade or business be valued at the price that such property would bring if sold as a unit to a purchaser who would
continue the business. Landowners wishing to avail themselves of the agricultural use, open space or timberland
designation or residential real property inventory designation must apply for the designation and the appraiser is
required by the Property Tax Code to act on each claimant's right to the designation individually. A claimant may
waive the special valuation as to taxation by some political subdivisions while claiming it as to another. If a claimant
receives the agricultural use designation and later loses it by changing the use of the property or selling it to an
unqualified owner, the District can collect taxes based on the new use, including taxes for the previous three years for
agricultural use and taxes for the previous five years for open space land and timberland.
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The Property Tax Code requires the WCAD to implement a plan for periodic reappraisal of property. The plan must
provide for appraisal of all real property in the WCAD at least once every three (3) years. It is not known what
frequency of reappraisal will be utilized by the WCAD or whether reappraisals will be conducted on a zone or county-
wide basis. The District, however, at its expense has the right to obtain from the Appraisal District a current estimate of
appraised values within the District or an estimate of any new property or improvements within the District. While
such current estimate of appraised values may serve to indicate the rate and extent of growth of taxable values within
the District, it cannot be used for establishing a tax rate within the District until such time as the WCAD chooses
formally to include such values on its appraisal roll.
District and Taxpayer Remedies
Under certain circumstances taxpayers and taxing units (such as the District), may appeal the orders of the Appraisal
Review Board by filing a timely petition for review in State district court. In such event, the value of the property in
question will be determined by the court or by a jury, if requested by any party. Additionally, taxing units may bring
suit against the WCAD to compel compliance with the Property Tax Code.
The Property Tax Code sets forth notice and hearing procedures for certain tax rate increases by the District and
provides for taxpayer referenda which could result in the repeal of certain tax increases. The Property Tax Code also
establishes a procedure for notice to property owners of reappraisals reflecting increased property values, appraisals
which are higher than renditions, and appraisals of property not previously on an appraisal roll.
Levy and Collection of Taxes
The District is responsible for the levy and collection of its taxes unless it elects to transfer the collection functions to
another governmental entity. By September 1 of each year, or as soon thereafter as practicable, the rate of taxation is set
by the Board based upon the valuation of property within the District as of the preceding January 1. Taxes are due
October 1, or when billed, whichever comes later, and become delinquent after January 31 of the following year. A
delinquent tax incurs a penalty of six percent (6 %) of the amount of the tax for the first calendar month it is delinquent,
plus one percent (1 %) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year
in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax
incurs a total penalty of twelve percent (12 %) regardless of the number of months the tax has been delinquent and
incurs an additional penalty of up to fifteen percent (15 %) if imposed by the District. The delinquent tax also accrues
interest at a rate of one percent (1 %) for each month or portion of a month it remains unpaid. The Property Tax Code
also makes provision for the split payment of taxes, discounts for early payment and the postponement of the
delinquency date of taxes under certain circumstances. Ms. Nelda Wells Spears, the Travis County Tax
Assessor /Collector, collects the taxes for the District. The District does not allow split payment of taxes, discounts for
early payments or the postponement of the delinquency date of taxes.
District's Rights In The Event Of Tax Delinquencies
Taxes levied by the District are a personal obligation of the owner of the property on January 1 of the year for which
the tax is imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local
taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of the State of
Texas and each local taxing unit, including the District, having power to tax the property. The District's tax lien is on a
parity with tax liens of such other taxing units. See "FINANCIAL STATEMENT - Overlapping Taxes for 1998 ". A
tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property
encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however,
whether a lien of the United States is on a parity with or takes priority over a tax lien of the District is determined by
applicable federal law. Personal property under certain circumstances is subject to seizure and sale for the payment of
delinquent taxes, penalty, and interest.
At any time after taxes on property become delinquent, the District may file suit to foreclose the lien securing payment
of the tax, to enforce personal liability for the tax, or both. In filing a suit to foreclose a tax lien on real property, the
District must join other taxing units that have claims for delinquent taxes against all or part of the same property.
42
Collection of delinquent taxes may be adversely affected by the amount of taxes owed to other taxing units, by the
effects of market conditions on the foreclosure sale price, by taxpayer redemption rights (a taxpayer may redeem
property within two years after the purchaser's deed issued at the foreclosure sale is filed in the county records) or by
bankruptcy proceedings which restrict the collection of taxpayer debts. See "RISK FACTORS - General - Tax
Collections and Foreclosure Remedies."
Legal Proceedings
LEGAL MATTERS
Delivery of the Bonds will be accompanied by the unqualified approving legal opinion of the Attomey General of Texas to
the effect that the Bonds are valid and legally binding obligations of the District under the Constitution and laws of the
State of Texas payable from the proceeds of an annual ad valorem tax levied, without legal limit as to rate or amount, upon
all taxable property within the District and from certain Net Revenues generated from the Districts water, sanitary sewer
and drainage system and based upon their examination of a transcript of certified proceedings relating to the issuance and
sale of the Bonds; the approving legal opinion of Bond Counsel, to a like effect, and to the effect that interest on the Bonds
is excludable from gross income of the holders for federal tax purposes under existing law, and the Bonds are not "private
activity bonds" under the Internal Revenue Code of 1986, as amended (the "Code ") and interest on the Bonds will not be
subject to the alternative minimum tax on individuals and corporations, except as described below in the discussion
regarding the adjusted current eamings adjustments for corporations.
Bond Counsel has reviewed the information appearing in this Official Statement under the caption "THE DISTRICT -
General" "THE BONDS," "TAXING PROCEDURES," "CONTINUING DISCLOSURE OF INFORMATION ", aqd
"LEGAL MATTERS" (as it relates to Bond Counsel's opinion) solely to determine whether such information fairly
summarizes matters of law and the provisions of the documents referred to therein. Bond Counsel has not, however,
independently verified any of the factual information contained in this Official Statement nor has it conducted an
investigation of the affairs of the District or the developer for the purpose of passing upon the accuracy or completeness of
this Official Statement. No person is entitled to rely upon Bonds Counsel's limited participation as an assumption of
responsibility for or an expression of opinion of any kind with regard to the accuracy or completeness of any information
contained herein.
The legal fees paid to Bond Counsel for services rendered in connection with the issuance of the Bonds are based on a
percentage of the bonds actually issued, sold and delivered and, therefore, such fees are contingent upon the sale and
delivery of the Bonds.
Tax Exemption
The delivery of the Bonds is subject to the delivery of the opinion of Winstead Sechrest & Minick P.C., Austin, Texas,
Bond Counsel to the District ( "Bond Counsel "), to the effect that interest on the Bonds under existing statutes, regulations,
published rulings, and court decisions (1) will be excludable from the gross income, as defined in Section 61 of the Internal
Revenue Code of 1986, as amended to the date of initial delivery of the Bonds (the "Code "), of the owners thereof for
federal income tax purposes, pursuant to Section 103 of the Code, and (2) will not be included in computing the alternative
minimum taxable income of the owners thereof who are individuals or, except as hereinafter described, corporations. The
statutes, regulations, rulings, and court decisions on which such opinions will be based are subject to change.
Interest on all tax- exempt obligations, including the Bonds owned by a corporation will be included in such corporation's
adjusted current eamings for purposes of calculating the alternative minimum taxable income of such corporation, other
than an S corporation, a qualified mutual fund, a financial asset securitization investment trust, a real estate investment
trust, or a real estate mortgage investment conduit. A corporation's alternative minimum taxable income is the basis on
which the alternative minimum tax imposed by Section 55 of the Code will be computed.
In rendering such opinion, Bond Counsel will rely upon representations and certifications of the Issuer made in a certificate
pertaining to the use, expenditure, and investment of the proceeds of the Bonds and certain other funds of the Issuer, and as
described above, will assume continuing compliance with the provisions of the Order subsequent to the issuance of the
Bonds. The Order contains covenants by the Issuer with respect to, among other matters, the use of the proceeds of the
43
Bonds and the facilities financed or refinanced therewith by persons other than state or local governmental units, the
manner in which the proceeds of the Bonds are to be invested, if required, the periodic calculation and payment to the
United States Treasury of any arbitrage "profits" from the investment of the proceeds of the Bonds and the reporting of
certain information to the United States Treasury. Failure to comply with any of these covenants would cause interest on
the Bonds to be includable in the gross income of the owners thereof for federal income tax purposes from the date of the
issuance of the Bonds.
Except as described above, Bond Counsel will express no other opinion with respect to any other federal, state or local tax
consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the
acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax -
exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial
institutions (see discussion under caption "Qualified Tax- Exempt Obligations" below), life insurance companies, property
and casualty insurance companies, S corporations with subchapter C earnings and profits, certain foreign corporations
doing business in the United States, individual recipients of Social Security or Railroad Retirement benefits, individuals
otherwise qualifying for the earned income credit, owners of an interest in a financial asset securitization investment trust,
and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or
incurred certain expenses allocable to, tax- exempt obligations. Prospective purchasers should consult their own tax
advisors as to the applicability of these consequences to their particular circumstances.
Tax Accounting Treatment of Original Issue Discount Bonds
The initial public offering price of certain Bonds (the "Discount Bonds ") may be less than the amount payable on such
Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond
(assuming that at least 10% of the Discount Bonds of that maturity are sold to the public at such price) and the amount
payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such
original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will, upon the
disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable from
gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for
other interest on the Bonds described above under "Tax Exemption." Such interest is considered to be accrued actuarially
in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual
compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an
original purchaser in a different amount from the amount of the payment denominated as interest actually received by the
original purchaser during the tax year.
However, such interest may be required to be taken into account in determining the alternative minimum taxable income of
a corporation, for purposes of calculating a corporation's alternative minimum tax imposed by Section 55 of the Code, and
the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even
though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other
collateral federal income tax consequences to, among others, financial institutions (see discussion under the heading
"Qualified Tax- Exempt Obligations" herein), life insurance companies, property and casualty insurance companies, S
corporations with "subchapter C" earnings and profits, individual recipients of Social Security or Railroad Retirement
benefits, individuals otherwise qualifying for the earned income credit, owners of an interest in a financial asset
securitization investment trust, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase
or carry, or who have paid or incurred certain expenses allocable to, tax- exempt obligations. Moreover, in the event of the
redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized
by such owner in excess of the basis of such 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 Discount Bond was held) is includable in gross income.
Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original
issue discount on Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences
of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of
state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even
though there will not be a corresponding cash payment.
44
Qualified Tax - Exempt Obligations
The Code requires a pro rata reduction in the interest expense deduction of a financial institution to reflect such financial
institution's investment in tax- exempt obligations acquired after August 7, 1986. An exception to the foregoing provision is
provided in the Code for "qualified tax- exempt obligations" which include tax- exempt obligations, such as the Bonds, (a)
designated by the issuer as "qualified tax- exempt obligations" and (b) issued by a political subdivision for which the
aggregate amount of tax -exempt obligations (not including private activity bonds other than qualified 501(c) (3) bonds) to
be issued during the calendar year is not expected to exceed $10,000,000.
The District will designate the Bonds as "qualified tax- exempt obligations" and has represented that the aggregate amount
of tax - exempt bonds (including the Bonds) issued by the District and entities aggregated with the District under the Code
during calendar year 1999 is not expected to exceed $10,000,000 and that the District and entities aggregated with the
District under the Code have not designated more than $10,000,000 in "qualified tax- exempt obligations" (including the
Bonds) during calendar year 1999.
Based on the foregoing representations, Bond Counsel's opinion will state that the Bonds are "qualified tax- exempt
obligations" under existing law.
Notwithstanding this exception, financial institutions acquiring the Bonds will be subject to a twenty percent (20 %)
disallowance of allocable interest expense.
No Material Advance Change
The obligations of the Initial Purchaser to take and pay for the Bonds, and of the District to deliver the Bonds, are
subject to the condition that, up to the time of delivery of and receipt of payment for the Bonds, there shall have been
no material adverse change in the condition (financial or otherwise) of the District subsequent to the date of sale from
that set forth or contemplated in the Preliminary Official Statement, as it may have been supplemented or amended
through the date of sale.
No-Litigation Certificate
The District will furnish the Initial Purchaser a certificate, dated as of the date of delivery of the Bonds, executed by both
the President or Vice President and Secretary or Assistant Secretary of the Board, to the effect that no litigation of any
nature has been filed or is to their knowledge then pending or threatened, either in state or federal courts, contesting or
attacking the Bonds; restraining or enjoining the issuance, execution or delivery of the Bonds; affecting the provisions
made for the payment of or security for the Bonds; in any manner questioning the authority or proceedings for the issuance,
execution or delivery of the Bonds; or affecting the validity of the Bonds.
CONTINUING DISCLOSURE OF INFORMATION
In the Bond Order, the District is obligated to provide certain updated financial information and operating data
annually, and timely notice of specified material events, to certain information vendors for the benefit of the registered
and beneficial owners of the Bonds. This information will be available to securities brokers and others who subscribe
to receive the information from the vendors.
Annual Reports
The District 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 District of the general type included in this Official Statement under Tables 1 through 12 and in Appendix A.
The District will update and provide this information within six months after the end of each fiscal year ending in or
after 1999. The District will provide the updated information to each nationally recognized municipal securities
information repository ( "NRMSIR ") and to any state information depository ( "SID ") that is designated by the State of
Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC ").
45
The District 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 "Rule "). The updated information will include audited
financial statements, if it is completed by the required time If audited financial statements are not available by the
required time, the District will provide unaudited financial statements and audited financial statements when the audit
report becomes available. Any such financial statements will be prepared in accordance with the accounting principles
described in Appendix A or such other accounting principles as the District may be required to employ from time to
time pursuant to state law or regulation.
The District's current fiscal year end is September 30, 1999. Accordingly, it must provide updated information by June
30, in each year, commencing after 1999 unless the District changes its fiscal year. If the District changes its fiscal
year, it will notify each NRMSIR and any SID of the change.
Material Event Notices
The District will also provide timely notices of certain events to certain information vendors. The District will provide
notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell
Bonds: (1) principal and interest payment delinquencies; (2) non - payment related defaults; (3) unscheduled draws on
debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial
difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or
events affecting the tax- exempt status of the Bonds; (7) modifications to rights of registered owners; (8) Bond calls;
(9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating
changes. In addition, the District will provide timely notice of any failure by the District to provide information, data,
or financial statements in accordance with its agreement described above under "Annual Reports ". The District 11
provide each notice described in this paragraph to any SID and to either each NRMSIR or the Municipal Securities
Rulemaking Board ( "MSRB ").
Availability of Information from NRMSIRs and SID
The District has agreed to provide the foregoing information only to NRMSIRs and any SID. The information will be
available to registered owners of the Bonds only if the registered owners comply with the procedures and pay the
charges established by such information vendors or obtain the information through securities brokers who do so.
The Municipal Advisory Council of Texas has been designated by the State of Texas as a SID, but the SEC staff has not
yet determined that it is a qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P.O.
Box 2177, Austin, Texas 78768 -2177, and its telephone number is 512/476 -6947.
Limitations and Amendments
The District has agreed to update information and to provide notices of material events only as described above. The
District 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 District 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 District 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 registered owners of the Bonds may seek a writ of mandamus to
compel the District to comply with its agreement.
This continuing disclosure agreement may be amended by the District 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 District, but only if (1) the provisions, as so amended, would have permitted an underwriter
to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a)
the holders of a majority in aggregate principal amount (or any greater amount required by any other provision of the
Bond Order that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person
that is unaffiliated with the District (such as nationally recognized bond counsel) determined that such amendment will
46
not materially impair the interest of the registered and beneficial owners of the Bonds. The District may also amend or
repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of
the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to
the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling
Bonds in the primary offering of the Bonds.
Compliance with Prior Undertakings
The District has not previously made a continuing disclosure agreement in connection with SEC Rule 15c2-12 in as
much as it has not issued bonds since the adoption of continuing disclosure obligations.
The Official Statement was compiled and edited under the supervision of Southwest Securities (the "Financial
Advisor "), which firm was employed in 1997 as Financial Advisor to the District. The fees paid the Financial Advisor
for services rendered in connection with the issuance and sale of the Bonds are based on a percentage of the Bonds
actually issued, sold and delivered, and therefore such fees are contingent on the sale and delivery of the Bonds. The
Financial Advisor has requested the right to bid on the Bonds, and the District has given its consent.
Preparation
FINANCIAL ADVISOR
OFFICIAL STATEMENT
The information in this Official Statement was compiled and edited by the Financial Advisor. In addition to compiling
and editing such information, the Financial Advisor has obtained the information set forth herein under the captions
indicated from the following sources:
"THE DISTRICT - District General Manager; Gray Jansing & Associates, Inc. ( "Engineer "), Round Rock
Independent School District and Development, Limited and K & B ( "Developers "); "LANDOWNERS AND
DEVELOPER" — the Developers; "THE SYSTEM" - Engineer; "COMBINATION UNLIMITED TAX AND
REVENUE BONDS AUTHORIZED BUT UNISSUED" - Records of the District ( "Records "), "FINANCIAL
STATEMENT" - Williamson County Appraisal District; "ESTIMATED OVERLAPPING DEBT STATEMENT" -
Municipal Advisory Council of Texas and Financial Advisor; "TAX DATA" and "WATER AND SEWER
OPERATIONS" - Audits, Records and Tax Assessor /Collector; "MANAGEMENT" - District Directors;
"PROJECTED DEBT SERVICE REQUIREMENTS" - Financial Advisor; "THE BONDS," "CONTINUING
DISCLOSURE OF INFORMATION"; "TAXING PROCEDURES," and "LEGAL MATTERS" — Winstead,
Sechrest & Minick P.C.
Experts
In approving this Official Statement, the District has relied upon the following experts in addition to the Financial
Advisor.
The Engineer: The information contained in the Official Statement relating to engineering matters and to the
description of the System and, in particular, that information included in the sections entitled "THE DISTRICT" and
"THE SYSTEM," has been provided by Gray Jansing & Associates, Inc., and has been included in reliance upon the
authority of said firm as experts in the field of civil engineering.
Appraisal District: The information contained in this Official Statement relating to the certified assessed valuation
of property in the District and, in particular, such information contained in the sections captioned "FINANCIAL
STATEMENT' and "TAX DATA — Principal Taxpayers" has been provided by the Williamson County Appraisal
District, in reliance upon their authority as experts in the field of appraising and tax assessing.
47
Tax Assessor /Collector: The information contained in this Official Statement relating to tax collection rates has
been provided by Ms. Nelda Wells Spears in reliance upon her authority as an expert in the field of tax assessing
and collecting.
Updating the Official Statement During Underwriting Period
If, subsequent to the date of the Official Statement to and including the date the Initial Purchaser is no longer required
to provide an Official Statement to potential customers who request the same pursuant to Rule 15c2 -12 of the federal
Securities Exchange Act of 1934 (the "Rule ") (the earlier of (i) 90 days from the "end of the underwriting period" (as
defined in the Rule) and (ii) the time when the Official Statement is available to any person from a nationally
recognized repository but in no case less than 25 days after the "end of the underwriting period "), the District teams or
is notified by the Initial Purchaser of any adverse event which causes any of the key representations in the Official
Statement to be materially misleading, the District will promptly prepare and supply to the Initial Purchaser a
supplement to the Official Statement which corrects such representation to the reasonable satisfaction of the Initial
Purchaser, unless the Initial Purchaser elects to terminate its obligation to purchase the Bonds as described below. See
"DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS - Delivery." The obligation of the District
to update or change the Official Statement will terminate when the District delivers the Bonds to the Initial Purchaser
(the "end of the underwriting period" within the meaning of the Rule), unless the Initial Purchaser provides written
notice the District that less than all of the Bonds have been sold to ultimate customers on or before such date, in which
case the obligation to update or change the Official Statement will extend for an additional period of time of 25 days
after all of the Bonds have been sold to ultimate customers. In the event the Initial Purchaser provides written notice to
the District that less than all of the Bonds have been sold to ultimate customers, the Initial Purchaser agrees to notify the
District in writing following the occurrence of the "end of the underwriting period" as defined in the Rule.
Certification as to Official Statement
The District, acting by and through its Board of Directors in its official capacity in reliance upon the experts listed
above, hereby certifies, as of the date hereof, that to the best of its knowledge and belief, the information, statements
and descriptions pertaining to the District and its affairs herein contain no untrue statements of a material fact and do
not omit to state any material fact necessary to make the statements herein, in light of the circumstances under which
they were made, not misleading. The information, description and statements concerning entities other than the
District, including particularly other governmental entities, have been obtained from sources believed to be reliable, but
the District has made no independent investigation or verification of such matters and makes no representation as to the
accuracy or completeness thereof. All changes in the affairs of the District and other matters described in the Official
Statement subsequent to the delivery of the Bonds and all information with respect to the resale of the Bonds are the
responsibility of the Initial Purchaser.
Official Statement "Deemed Final"
For purposes of compliance with Rule 15c2 -12 of the Securities Exchange Commission, this document, as the same
may be supplemented or corrected by the District from time -to -time, may be treated as an Official Statement with
respect to the Bonds described herein "deemed final" by the District as of the date hereof (or of any such supplement or
correction) except for the omission of certain information referred to in the succeeding paragraph.
The Official Statement, when further supplemented by adding information specifying the interest rates and certain other
information relating to the Bonds, shall constitute a "FINAL OFFICIAL STATEMENT" of the District with respect to
the Bonds, as that term is defined in Rule 15c2 -12.
Annual Audits
Under Texas Law; the District must keep its fiscal records in accordance with generally accepted accounting principles,
must have its financial accounts and records audited by a certified or permitted public accountant within 120 days after
the close of each fiscal year of the District, and must file each audit report with the Commission within 135 days after
the close of the fiscal year. Copies of each audit report must also be filed in the office of the District. The District's
fiscal records and audit reports are available for public inspection during regular business hours, and the District is
48
required by law to provide a copy of the District's audit reports to any registered owner or other member of the public
within a reasonable time on request, upon payment of charges prescribed by the Texas General Services Commission.
This Official Statement was approved by the Board of Directors of The Meadows at Chandler Creek Municipal Utility
District, as of the date shown on the first page hereof.
/s /
Nancy Beleckis
Secretary, Board of Directors
The Meadows at Chandler Creek
Municipal Utility District
/s/
/The rest of this page intentionally left blank)
49
Douglas Eastwood
President, Board of Directors
The Meadows at Chandler Creek
Municipal Utility District
PHOTOGRAPHS
The following photographs were taken in the District in June, 1999. The homes and commercial establishments shown
in the photographs are representative of the type of construction presently located within the District, and these
photographs are presented solely to. illustrate such construction. The District makes no representation that any
additional construction such as that as illustrated in the following photographs will occur in the District. See "THE
DISTRICT."
APPENDIX A
Audited Financial Statements
The information contained in this appendix has been excerpted from the audited financial statements of The Meadows
at Chandler Creek Municipal Utility District for the fiscal year ended September 30, 1998. Certain information not
considered to be relevant to this financing has been omitted; however, complete audit reports are available upon
request.
APPENDIX B
Bond Counsel Opinion
DATE: June 18, 1999
SUBJECT: City Council Meeting, June 24, 1999
ITEM: 10. G. 1. Consider a resolution consenting to the issuance of $1,410,000 in
Combination Unlimited Tax and Revenue Bonds, Series 1999 by the
Meadows at Chandler Creek Municipal Utility District.
The Bonds are obligations solely of The Meadows at Chandler Creek
Municipal Utility District and are not obligations of the City of Round Rock.
However, under the consent agreement between the district and the City, the
City must approve the issuance of bonds by the district. Staff Resource Person:
David Kautz, Finance Director
RESOLUTION NO. R- 99- 06- 24 -10G1
WHEREAS, the Council of the City of Round Rock, Texas has
previously consented to the creation of The Meadows at Chandler
Creek Municipal Utility District, and
WHEREAS, The Meadows at Chandler Creek Municipal Utility
District (the "District ") is a conservation and reclamation
district, a body corporate and politic and governmental agency of
the State of Texas, created under Article XVI, Sec. 59 of the
Texas Constitution by order of the Texas Water Commission, now
the Texas Natural Resource Conservation Commission ( "the TNRCC "),
and the District operates under Chapters 49 and 54 of the Texas
Water Code, as amended, and
WHEREAS, the City of Round Rock previously granted its
consent to the creation of the District, and the City, the
District and Nash Phillips /Copus, Inc. entered into an "Agreement
Concerning Creation and Operation
Creek Municipal Utility District" (the
certain "Utility Construction
setting
R:\ WPOOCS \RESOL"TI \R9062401.WPU /scg
of The Meadows
at Chandler
"Consent Agreement "),
which sets forth the terms and conditions for creation and
operation of the District, and
WHEREAS, the District and the City also entered into that
Contract" dated May 10, 1984
forth the terms and conditions pursuant to which the City
agreed to provide water and sanitary sewer service within the
boundaries of the District and pursuant to which the District
agreed to purchase, construct and acquire facilities for such
purposes, and
WHEREAS, by an election held on June 13, 1985, the District
was authorized to issue bonds in the maximum amount of
$13,000,000, and
WHEREAS, the District is authorized by law to purchase,
construct, acquire, own, operate, maintain, repair, improve, or
extend, inside or outside its boundaries, any and all works,
improvements, facilities, plants, equipment, and appliances
necessary to accomplish the purposes of its creation, and
WHEREAS, the District made application to the TNRCC for
approval of the issuance by the District of its unlimited tax and
revenue bonds to finance or reimburse the developer for the cost
of water, sewer and drainage improvements (the "Improvements ")
serving lands within the District, and
WHEREAS, under the Consent Agreement, the Utility
Construction Contract, and that certain "Order Authorizing the
Issuance of $1,410,000 The Meadows at Chandler Creek Municipal
Utility District Combination Unlimited Tax and Revenue Bonds,
Series 1999" proposed to be adopted by the Board of Directors of
the District (the "1999 Bond Order "), the District proposes to
authorize the issuance of its combination unlimited tax and
revenue bonds designated as its "$1,410,000 The Meadows at
Chandler Creek Municipal Utility District Combination Unlimited
2
Tax and Revenue Bonds, Series 1999" (the "Series 1999 Bonds ") to
finance or reimburse the developer for the cost of the
Improvements, and
WHEREAS, by its order dated February 19, 1999, the TNRCC
approved the project and the issuance of the Series 1999 Bonds,
and
WHEREAS, the District has submitted to the City for review
and approval a substantial draft of the 1999 Bond Order and
Preliminary Official Statement and requested approval of the
District's Series 1999 Bond, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS THAT,
1. The issuance by the District of the Series 1999 Bonds in
an amount not to exceed $1,410,000 is hereby approved.
2. The City Council approves the substantial draft of the
1999 Bond Order and Preliminary Official Statement for the Series
1999 Bonds, the form and substance of which are attached as
Exhibits A and B, respectively, incorporated by reference, and
are approved.
AT T.
W _ /A ILA % ,ryt/
•it
LAND, City Secretary
3
ROB A. STLUKA, J , Mayor
City of Round Rock, Texas