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HomeMy WebLinkAboutCC 2001-04-23 Agendas -,\ - .. ....' .. CITY OF NORTH RICHLAND HILLS PRE-COUNCIL AGENDA APRIL 23, 2001 - 5:45 PM . For the Meeting conducted at the North Richland Hills ~City Hall - Pre-Council Chambers 7301 Northeast Loop 820. . NUMBER ITEM ACTION TAKEN Discuss Items from Regular April 23, 2001 City Council 1. Meeting (5 Minutes) Presentation Regarding Agreement with North Hills Mall for 2. GN 2001-045 Aggressive Skaters Association World Championships at North Hills Mall- October 19-21, 2001 (10 minutes) Discuss of Creation of Temporary Technical Code Review 3. IR 2001-057 Committee (10 minutes) 4. IR 2001-058 Discuss Dates for Park Dedications (5 Minutes) 5. IR 2001-056 Update on Electric Aggregation Options (10 Minutes) 6. IR 2001-059 Discuss Legislative Update - 77th Legislature (10 Minutes) 7. *Executive Session - The Council may enter into closed Executive Session to discuss the following: (15 Minutes) Consultation with City Attorney as authorized by Local Government Code §551.071 Fire Department 8. Adjournment - 6:50 pm *Closed due to subject matter as provide by the Open Meetings Law. If any action is contemplated, it will be taken in open session 4/23/01 City Council Agenda Page 1 014 "4 M4"ð , Dat&t. ~:3 ð {} r-v') TIme rnt 'Qty~ . tJ.--U ~..~ ~ By . .. . . CITY OF NORTH RICHLAND HILLS CITY COU~CIL AGENDA APRIL 23, 2001 - 7:00 PM For the Meeting conducted at the North Richland Hills City Hall Council Chambers 7301 Northeast Loop 820, at 7:00 p.m. The below listed items are placed on the Agenda for discussion and/or action. 1. Items on the consent agenda will be voted on in one motion unless a Council Member asks for separate discussion. 2. The Council reserves the right to retire into executive session conceming any of the items listed on this Agenda, whenever it is considered necessary and legally justified under the Open Meetings Act. 3. Persons with disabilities who plan to attend this meeting and who may need assistance should contact the City Secretary's office at 817-427-6060 two working days prior to the meeting so that appropriate arrangements can be made. NUMBER ITEM ACTION TAKEN 1 . Call to Order Invocation - 2. 3. Girl Scout 1270 - Karen Alpert, Leader Pledge - Girl Scout 1270 - Karen Alpert, Leader 4/23/01 City Council Agenda Page 2 of 4 . .. . . NUMBER ITEM ACTION TAKEN 4. Special Presentations Proclamation - National Day of Prayer - NRH Pastors Prayer Fellowship Volunteer Week - Ed Lesser, United Way Cinta Burrell, NRH Volunteer of the Year International Pet Adoptathon - Don Sharp,· Animal Services Candi Henderson, Animal Services Certificate of Recognition - Richland High School Hockey Team - John Thomas 5. Removal of Item( s) from the Consent Agenda 6. Consent Agenda: a. Minutes of the Pre-Council Meeting Apri109,2001 b. Minlites of the City Council Meeting April 09,2001 c. Minutes of the Joint Work Session February 19, 2001 PU 2001-025 d. Award Annual Contract for Aquatic Chemical Supplies to D.C.C. Inc. - Resolution No. 2001-031 PU 2001-026 e. Award Annual Food Supply Contract for NRH20 to Ben E. Keith - Resolution No. 2001-032 Consider a Replat of Lots 2R & 3, Block 34, 7. PS 2001-10 Fox Hollow Addition to Lots 2R1 & 3R, Block 34, Fox Hollow Addition Requested by Owen D. Long on 1.43 Acres of Land Known as 7605 and 7609 Mid Cities Boulevard 4/23/01 City Council Agenda Page 3 of 4 . , NUMBER ITEM ACTION TAKEN Consider an Amendment of the Final Plat of 8. PS 2001-11 Lots 3R & 4R, Block 1, Smithfield Addition requested by Don Phifer on 3.9 acres of land in the 6600 Block of Davis Boulevard 9. GN 2001-041 Consideration of Action on all Matters Pertaining to the Award and Sale of $5,950,000 in General Obligation Bonds and Approve Ordinance No. 2551 10. GN 2001-042 Consideration of Action on all Matters Pertaining to the Award and Sale of $3,255,000 in Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001 and Approve Ordinance No. 2552 11. GN 2001-043 Consideration of Action on all Matters Pertaining to the Award and Sale of $7,225,000 in Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 and Approve Resolution No. 2001-034 12. GN 2001-044 Approve Striping Plan on Meadow Lakes Drive Consideration of Agreement with North Hills 13. GN 2001-045 Mall Related to Construction for Skate Park and Hosting 2001 Aggressive Skaters Association World Championships at North Hills Mall October 19-21,2001 - Resolution No. 2001-033 14. GN 2001-046 Consideration of North Tarrant/Davis Blvd Traffic Study with Kimley Horn 15. Citizens Presentation Information and Reports 16. Adjournment . I PO~D '11 'VI \. 0 ~ -~ 4/23/01 City Council Agenda Page 4 of 4 DeW 3-. ~ ð v'¡v\ TIme ~-t. ÇIty ~ ... f~\ ,I' '-. ,. .) V& ¿"-t ~~ ~ ~ ~ 'Bv · CITY OF NORTH RICHLAND HILLS PRE-COUNCIL AGENDA APRIL 23, 2001 - 5:45 PM For the Meeting conducted at the North Richland Hills City Hall - Pre-Council Chambers 7301 Northeast Loop 820. e NUMBER ITEM ACTION TAKEN Discuss Items from Regular April 23, 2001 City Council 1. Meetina (5 Minutes) Presentation Regarding Agreement with North Hills Mall for 2. GN 2001-045 Aggressive Skaters Association World Championships at North Hills Mall- October 19-21,2001 (10 minutes) Discuss of Creation of Temporary Technical Code Review 3. IR 2001-057 Committee (10 minutes) 4. IR 2001-058 Discuss Dates for Park Dedications (5 Minutes) 5. IR 2001-056 Update on Electric AQQreQation Options (10 Minutes) 6. IR 2001-059 Discuss Leaislative Update - 77th Leaislature (10 Minutes) 7. *Executive Session - The Council may enter into closed Executive Session to discuss the following: (15 Minutes) Consultation with City Attorney as authorized by Local Government Code §551.071 Fire Department 8. Adiournment - 6:50 pm *Closed due to subject matter as provide by the Open Meetings Law. If any action is contemplated, it will be taken in open session POSTED Date e Time 4123101 City Council Agenda Page 1 of 4 City Secretary ~ . . e CITY OF NORTH RICHLAND HILLS ADDITION TO PRE COUNCIL AGENDA APRIL 23, 2001 - 5:45 P.M. 7. *Executive Session - The Council may enter into closed Executive Session to discuss the following Consultation with City Attorney as authorized by Local Government Code §551.071 a. Fire Department b. Deshong vs. NRH (item added) Posted at 4:20 p.m. on the 20th day of April, 2001 o~ City Secretary *Closed due to subject matter as provided by the Open Meetings Law. If any action is contemplated, it will be taken in open session. POSTED .~.;Æ1 ~ lJl Date 4:rd'J p. f(L Time ByO~ / / - . INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2001-057 April 18, 2001 Discussion of Creation of Temporary Technical Code Review Committee The City of North Richland Hills is in need of updating the Building Codes. Currently the City is under the 1991 version of the Uniform Building Code, Uniform Plumbing Code, Uniform Mechanical Code and Uniform Fire Code. Traditionally, staff has presented the amendments to the model codes along with any local amendments to the City Council. The City has a citizen "Board of Appeals" that deals with appeal procedures and building condemnations but does not have a technical board to deal with complicated technical issues for updating model codes. The Temporary Technical Code Review Committee would serve as a general review for City Council and would recommend major code updates to the City Council. Because of the technical nature of the building codes, it will be necessary to appoint experienced and educated professionals. It would be ideal for all members to be citizens of North Richland Hills, however language in the model codes does not require local citizenship. It may also be difficult in getting experienced technical assistance within the boundaries of our city limits. Staff is recommending City Council consider appointing a seven member Temporary Technical Code Review Committee to work with the Building Official and Fire Marshal to make recommendations for major code updates involving matters concerning Building, Plumbing, Mechanical, Electrical and Fire. Staff would recommend the following Board makeup: 1. Commercial General Contractor 2. Residential General Contractor 3. Plumbing Contractor (Master Plumber) 4. Electrical Contractor (Master Electrician) 5. Mechanical Contractor (Licensed by TDLR) 6. Registered Architect 7. Fire Protection Specialist/Engineer We have included a preliminary list of possible names of professionals that either live or work in North Richland Hills. Other names can be included for Council consideration. If Council concurs with creation of a temporary committee to review code updates, staff will bring back an active item for its creation and the appointment of individuals to serve on the committee. At Pre-Council, staff is seeking Council direction. Sincerel~ . .-fl2 I~ John Pitstick Development Director ISSU ED BY TH E CITY MANAG ER NORTH RICHLAND HILLS, TEXAS ~ e Following is a listing of names of firms or individuals that work or live in North Rich/and Hills by category: Commercial General Contractor Pierce General Contractors - Michael Pierce - 817-589-7872 Residential General Contractor J. B. Sandlin Homes - Terry Sandlin - 817-281-3509 R. Brown Enterprises, Inc. - Ricky Brown - 817-728-6616 Lyn Motheral- Resident - Stonegate Construction - 817-589-8599 x103 Alamo Homes - David Pokluda - 817-281-5759 Plumbing Contractor (Master Plumber) Bills Plumbing - Billy Whisenant - 817-280-0334 Robinson Plumbing - Lloyd Robinson - 817-284-8424 e Electrical Contractor (Master Electrician) Cable Electric, Inc. - Terry Browning - 817-595-1055 Joe Crane Electric, Inc. - Joe Crane - 817-485-0615 Wayne Loyd - Resident - Chief Electrical Inspector for City of Arlington - 817-459-6510 Mechanical Contractor (Licensed by Texas Department of Licensing & Regulation) A-Arctic Circle AlC - Larry Houk - 817-577-8180 Brown Service Company - James Brown - 817-284-9204 W. D. McCarthy Service Company - Dale McCarthy - 817-281-5792 Registered Architect Kyle Bacon- Resident - SHW Architects - 817-281-0720 GSBS Batenhorst Architects - Tom Batenhorst 817-589-1722 Fire Protection Specialist/Engineer e .-'....., ,,,,.. ..' ., INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2001-058 ^ ~ Date: Pf Subject: April 23, 2001 Discuss Dates for New Park Dedications Thornbridge Neighborhood Park and Cross Timbers Community Park are now ready for official dedication events. We would also like to have the J. B. Sandlin dedication concurrently with Thornbridge Park's ceremony. The family would like to have the Sandlin Memorial and the park dedication together also. Several groups have expressed an interest in being part of these ceremonies. Thornbridge Neighborhood Association has expressed interest in participating and the Board of Liberty Bank along with the family and friends of J. B. Sandlin would desire to be involved with the dedication of his memorial plaque. The Richland Youth Association and North Area Youth Association would like to be a part of the dedication of Cross Timbers Park. Staff would propose the following dates for your consideration. 1) Saturday, April 28th: both parks 2) Saturday, May 12th: both parks 3) Saturday, May 19th: both parks and the new slide at NRH20 ... 4) Weekday afternoon of your choice: both parks ...... a. Thursday May 3 b. Friday May 18 If options 1,2 or 4 were selected, we would probably schedule the two évents about one-hour apart. Option 3 would involve a ribbon cutting on the new slide, "The Purplepalooza" at 1 0:00 am on NRH20 opening day, Thornbridge Park and J.B. Sandlin Memorial at 11 :00 am, and Cross Timbers at 12:00 noon. This event could possibly be called 'The Triple Play" dedication. It is possible that the media could choose to focus on the slide rather than the parks. The two park opening could be "The Double Play". Possible activities that could be used with the ceremonies include: -- The Richland Youth Association and North Area Youth Association hosting baseball games with the Mayor and Council throwing ceremonial pitches to begin the first baseball season at Cross Timbers Park. Invite a member of the Texas Ranger's Baseball Team Possibly a "celebrity or media personality" could take the first "plunge" on the Purplepalooza and arrive at the end of the slide as the ribbon is cut. Food and drinks could be available to get people to both events if done in the afternoon. A special arts event, planned for May 19th at multiple facilities ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS .,. ... . . - We are planning a special arts event that would be held at each of these facilities along with other city parks for that date as well. "Chalk it up!" is a national sidewalk arts contest that will engage youth in a positive, self-esteem building, fun activity. Numerous neighborhood associations have been contacted to participate in this event. Youth of our community will create temporary chalk art on our trails and plazas in our city parks. A panel of Parks and Recreation Board members and representatives of the arts community will judge and select winners in this unique event. These events, dates and suggestions are submitted for your consideration and direction. Please come prepared Monday night to choose a date and time. ReSpeCtfUI;JU~ Greg V' Managing Director of Community Services and Facilities GTV/ld INFORMAL REPORT TO MA VOR AND CITY COUNCIL No. IR 2001-056 ~> II Date: April 23, 2001 Subject: Update on Electric Aggregation Options Monday night the City Council will be presented with a brief PowerPoint proposal outlining options for electric service beginning January 1, 2002. These options will include aggregation with two different aggregation units being considered around the state and two other options dealing with TXU and its affiliates. As you will see from the presentation, a number-of cities are joining aggregation units, but the vast majority have not taken any action. This is because the process is taking all entities, not just cities into uncharted waters and there is no guaranteed best solution at this time. I am and have been leaning in one direction as our options become clearer. At this point a final recommendation is not being made, because issues seem to become clearer as we reach certain deadlines. It is anticipated that the Council will need to take action at its May 14th Council meeting to make decisions regarding electric service providers beginning in 2002. tJespectfully Submitted, / ~C/~ ~;J Managing Director of Community Services and Facilities GTV/ld e ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ." INFORMAL REPORTTO MAYOR AND CITY COUNCIL No. JA 01-059 .\ ~ Date: April 23, 2001 V" Subject Legislative Update Attached is the most recent Legislative Update for the 77th Regular Session of Texas. The information in this report is what was available at the time agendas were prepared. With April upon us, legislators will be hearing more bills in the coming weeks in order to meet the deadlines for getting bills passed. May 7th is the last day that House committees can approve House bills, and May 11 th is the last day that the House can pass any House bills except for local or consent bills. The last day for Senate committees to pass bills is May 11th. Most of the work of this session must be complete by May 25th, as the session ends May 28th and the last few days of the session are usually reserved for conference committee reports and corrections. The following is a list of some of the main bills we are following with significant actions: · HB 2667 - our bill regarding TXDOT population thresholds for traffic signal maintenance is still pending in committee . · HB 1362 - the House version of the Dangerous Wild Animal bill passed the House and has been received in the Senate, the Senate is scheduled to vote on this bill 4/18/01 · HB 64 - regarding financial disclosure is still pending in committee · SB 243 - the Senate Impact Fee bill was passed out of the House Land & Resource Management Committee on 4/17/01 as substituted. Staff will make sure the substitute is something we agree with. · SB 1275 - regarding the child safety fee is pending in the Senate Intergovernmental Relations Committee. · HB 2810 - regarding legislation with population brackets was voted favorably out of the House State Affairs committee last week. · HB 1115 - regarding photographic traffic control was sent to the House Calendars Committee 3/1/01 but has not been set for House floor action. · The bills regarding sales tax holiday extensions and exemptions are still pending in committee. · SB 407 - allowing cities to borrow from the state infrastructure bank account for certain transportation projects was signed by the Governor on April 9th. With regard to redistricting, as of the writing of this report staff has the most recent Senate District map. A House district map was not available as of this writing. Staff will present maps that are available at Monday's meeting. If any of you are interested in looking up a bill via the legislative web page, you can do that by going to www.capitol.state.tx.us. On this page is a section called Bill Information. In that section you can enter a bill number (for example SB 243 or HB 2667) and click the go button. This will bring up bill information. Please note that the HB or SB is case sensitive and must be capitalized. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS - ;"'" ~ ~ e As was stated earlier, this is the information that was available at the time agendas were prepared. We will provide you with updated information during the meeting Monday..Please call if you have questions or need additional information in the mean time. Bills will be'moving very quickly over the next several weeks, and staff will do our best to stay current as bills progress. Respectfully submitted, ~ ) U;J, Greg Vicl! Managing Director of Community Services & Facilities e 2 This is the sixth issue of the NRH Legislative Update for the 77th Regular Session. In- formation in this report is gathered from the Texas Municipal League and the legislative tracking service we are using for the first time, Gallery Watch. Bills and information that will affect municipalities will be added or deleted as necessary throughout the session. State legislation Affecting NRH HB 438 & HJR 25 (Gallego) - Property Taxes - would amend the Texas Constitution to exempt from property taxes "goods in transit" defined as tangible personal property, other than oil and gas, that is located at a site not under the control of the property owner for less than 270 days SB 174 & SJR 6 (Ouncan) - Property Taxes - same as above HB 444 (Madden) - Write-in Candidates - would provide that in a special election (in addition to a general election) for city officers, a write-in vote will not be counted unless the names appears on the list of write-in candidates SB 205 (Shapleigh) - Commercial Vehicles - would allow all cities to apply for certification to conduct safety inspections on commer- cial vehicles and vehicles transporting hazardous materials. HB 320 (Tillery) - Fire Fighters - would allow fire fighters to meet and confer with a political subdivision regarding wages, salaries, hours of work and other terms of employment. HB 64 (Wolens) - City Officers - would require all elected and some appointed city officials to file a financial statement that includes the person's financial activity and the financial activity of the person's spouse and dependent children. HB 217 (A. Reyna) - Plumbing Code - would require the State Board of Plumbing Examiners to adopt the International Plumbing Code and the Uniform Plumbing Code, would eliminate adoption of the Southern Standard Piumbing Code and the National Standard Plumbing Code, and would require plumbing in an area not other- wise regulated under the Plumbing Ucense law to be installed in accordance with one of those two codes. A city would be allowed to adopt any nationally recognized model plumbing code. HB 501 (Carter) - 911 Service Districts - would (1) allow the governing body of the third most populous city in a 911 district to appoint a member to the district's governing board, and (2) require that the budget of the district merely be presented to (not approved by) the governing body of each city that is part of the district. Same as above Hearing set Senate Finance 4(19(01 Referred to Senate Senate Intergovernmental Committee Relations 3(19(2001 Referred to Senate Intergovern- Committee mental Relations 1(11(2001 Not Heard House Uroan Affairs 3(14(2001 left Pending House State Affairs 2(12(2001 City Secretary Support Environmental Support Services Fire Oppose Administration Oppose Development Support 3(21(2001 Sent to House Calendars Administration Support Received in the Senate 4(9(01 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action Committee SB 170 (Wentworth) - Open Meetings - would provide that the appearance of a quo- Administration Support Sent to House rum of a governing body at a meeting of a legislative committee is not a meeting of that Calendars 3/5/2001 governing body if the members of the governing body merely testify, comment or re- spond to the members of the committee, SB 187 (Shapleigh) - Texas Online Commission - would create a 15 member com- Information Services & Sent to House mission (which would include three local government representatives) to establish a Administration Calendars 4/9/01 common Internet system through which state agencies and local governments can send documents, receive applications for permits and licenses, and receive payments from members of the public, HB 215 (Longoria)) - Employment-At-WIII - would provide that an employer may not Human Resources Oppose Left Pending House Economic discharge an employee who has been employed for at least ten years, except for cause, 3/21/2001 Development HB 303 (Burnam) - Minimum Wage - would tie the Texas minimum wage to fair Human Resources & Oppose Left Pending House Economic market rent, and would require an employer to pay the greater of the Texas minimum Budget 3/21/2001 Development wage or the federal minimum wage, HB 374 (Wohlgemuth) - Child Health and Safety - would provide that all cities may Municipal Court Support Not Heard 4/10/01 House Insurance add an additional $25 fee for a traffic offense committed in a school crossing zone and use the resulting revenue for child health and safety programs, HB 458 (Pitts) - Municipal Courts - would allow a municipal court judge to defer Municipal Court Support Referred to Committee House Juvenile Justice & proceedings against a juvenile until the 90th day after the date on which the teen court 1/31/2001 Family Issues hearing to determine the juvenile's punishment is held, HB 46 (McClendon) - Accident Reports - would prohibit the release of motor vehicle Police Support Left Pending House Public Safety accident reports to the public unless a person provides two or more of the following: (1) 3/19/2001 the date of the accident, (2) the name of any person involved in the accident, (3) the , c location of the accident, (Puente) - School Zones - would double the minimum and maximum fine Municipal Court Left Pending House Transportation amounts for speeding violations that occur within a school crossing zone when reduced 3/6/2001 speed limits apply, HB 63 (Wolens) - D.W.!. - would require a police officer to take possession of a per- Police Sentto House son's driver license and issue a temporary driving permit to that person if the person is Calendars arrested for a OWl offense, 3/19/2001 HB 307 (Hupp) - Motor Vehicle Information - would require a city to obtain written Police Support left Pending House State Affairs consent from a person before the city could release any personal information about the 3/5/2001 person that is contained in a motor vehicle record that the city has been requested to release to the public, HB 345 (Keel) - Alcohol Related Offense - would require a peace officer to take a Police Sent to House blood or breath specimen of a person involved in a motor vehicle or watercraft accident Calendars 3/9/2001 if the officer, at the time of arrest, reasonably believes that an individual has died, or will die, or has suffered bodily injury as a direct result of the accident HB 363 (Gallego) - Traffic Offenses - would require a police officer to issue a written Police Sentto House House Public Safety notice to appear for any traffic offense that is punishable by a fine only, Calendars 3/26/01 HB 433 (Drivery - Trock Safety - would allow all cities to seek certification to enforce Police Not Heard House Public Safety commercial motor vehicle safety standards. 3/5/2001 HB 486 (Berman) - Photographic Traffic Control - would allow only the City of Tyler to Police Support for all cities Referred to Committee House Public Safety implement a photographic traffic control system, 1/31/2001 HB 489 (Pickett) - Junked Vehicles - would require that a vehicle have an expired Police & Develop- Oppose Received in the Senate license plate and an expired vehicle inspection certificate before the vehicle can be mentjCode Enforce- 4/9/01 considered a junked vehicle (current law only requires one of these conditions), ment HB 507 (Allen) - Concealed Handguns - would allow the Department of Public Safety Police Oppose left Pending House Public Safety to grant a permit that would allow the permittee to carry a concealed weapon anywhere 2/26/2001 a eace officer may carry a weapon, (Keeij - Arrest Warrants - would (1) require that any affidavit presented in Police Sent to House su ort of the issuance of an arrest warrant must be shown to the defendant upon the Calendars defendanfs request, and (2) provide that an arrest warrant and any supporting affida- 3/19/2001 vits are public information immediately after the warrant has been executed, Page 2 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action Committee Police Referred to Committee Senate State Affairs 1/11/2001 Police Referred to Committee Senate Jurisprudence 1/11/2001 Police Support Pending in Committee Senate Intergovernmental 1/23/2001 Relations SB 111 (Moncrief) - Accident Reports - would require a person seeking to obtain accident report information to affirm that the person will not use the information for direct solicitation of business or employment for pecuniary gain. SB 112 (Moncrief) - Traffic Offenses - would require a police officer to issue a written notice to appear for all traffic offense punishable by fine only. SB 202 (Duncan) - Interlocal Contracts - would provide that a govemmental unit that enters into a contract to receive police protection services from another governmental unit is responsible for any civil liability that arises from the receipt of those services (current law only addresses agreements for fire protection) SB 217 (Frase" - Traffic Regulations - would allow all cities to apply for certification to conduct safety inspections on commercial vehicles and vehicles transporting haz- ardous materials Police & Environmental Services Sent to House Calendars 3/30/01 House Transportation HB 490 (Heflin) - Property Taxes: would amend the Property Tax Code in numerous ways. Budget & Research Sent to House local/ Consent 4/20/01 HB 559 (Mowery) - Property Tax - would provide that attorney's fees in a judicial appeal of property tax shall not be subject to limitations if the property's appraised value exceeds by 200 percent the appraised value required by law. Budget & Research left Pending 2/28/2001 House Ways & Means HB 277 (Berman) - Property Taxes - would repeal the "rollback" tax imposed on Budget & Research Referred to Committee House Ways & Means agriculturally appraised land that changes to a non-agricultural use, 1/29/2001 HB 377 (B. Tul11el - Condemnation - would provide that in certain circumstances the Public Works, Develop- Oppose Sent to House fair market value of natural resources may be included in the assessment of damage to ment, City Attorney Calendars 3/2/2001 an owner in a condemnation proceeding. HB 423 (fillery) - Zoning - would provide that an open-enrollment charter school is Development Support Sent to House subject to municipal zoning ordinances. Calendars 3/14/2001 HB 57 (Cuella" - Sales Tax - would provide a sales tax exemption for the purchase of Budget & Research Oppose Left Pending 3/28/01 House Ways & Means elernentary and secondary school supplies during August, would impose a $ 75 limit per exempted item, and would provide that a city may repeal the exemption only if the exemption would impair an existing contract, HB 256 (Gallego) - Sales Tax - would provide a sales tax exemption for building mate- Budget & Research Oppose Left Pending House Ways & Means rials used to repair uninsured damage to residential homesteads in state or federal 3/21/2001 disaster areas. HB 272 (Berman) - Sales Tax - would provide a sales tax exemption for blood transfu- Budget & Research Oppose Left Pending House Ways & Means sion equipment used during surgery. 3/21/2001 HB 324 (Cuellar) - Sales Tax - would provide a sales tax exemption for college text- Budget & Research Oppose Referred to Committee House Ways & Means books purchased by students. 1/29/2001 HB 445 (Goodman) - Sales Tax - would authorize a city to hold an election to adopt a ourth percent sales tax for city street maintenance. Page 3 State Legislation Affecting NRH (continued) H.B. 562 (Madden) - Elections: would: (a) require a city that elects its candidates by plurality vote to conduct an automatic recount in an election that results in a tie vote; (b) provide that the city may order a second election to resolve the tie only if it's already done the automatic recount; and (c) require the city to pay the costs of conducting the automatic recount. H.B. 563 (Madden) - Elections: would require a city that changes its election polling places to post a notice of the change at the previous polling place, City Secretary Voted favorably 4/10/01 House Elections 7 G - Munici al P e . would provide that any real property owned by a city is taxable by another taxing unit if the property is situated in a county in which less than 20 percent of the city's entire territory is situated, (Please see H.RJ. 28 below.) Budget & Research Oppose Referred to Committee 2/1/2001 House Ways & Means H.B. 578 (Solomons) - Texas Online Commission: would create a 15-member com- mission (which would include three local government representatives) to establish a common Internet system through which state agencies and locai governments can send documents, receive applications for permits and licenses, and receive payments from members of the public. (companion SB 187) Information Services Left Pending 3/12/2001 House State Affairs H.B. 610 (B. Turnen - Theft of Retail Water Service: would amend the Penal Code to add theft of retail water service to the offense of Theft of Service and would provide that theft of water service valued at more than $500 but less than $750 is a felony of the third degree; at $750 but less than $1000 is a felony of the second degree and at $1000 or more is a felony of the first degree, H.B. 612 (Maxey) - Tax Increment Financing: would: (1) require cities to inform the state comptroller of new tax Increment financing agreements or of changes to existing agreements; (2) require the city to send a copy of its annual tax increment financing report to the comptroller; (3) require the comptroller to maintain a central registry of tax increment financing agreements; and (4) authorize the comptroller to assist a city with tax increment financing upon request of the mayor. Finance Received in the Senate 4/3/01 Senate Business & Commerce H.B. 617 (Puente) - Neil!hborhood Associations: would allow a city to establish a zm to use volunteers from a neighborhood association to help the city enforce _and safety ordinances. H.B. 620 (CaDelo) - SDeedln£! Offenses: would decrease from 25 to 20 the number of miles per hour over the speed limit at which a speeder could obtain dismissal for a speeding offense by taking driver's training. Environmental Services & Development Received in the Senate 4/9/01 Senate Intergovernmental Relations Municipal Court Support Left Pending 4/10/01 House Criminal Jurisprudence Page 4 State Legislation Affecting NRH (continued) Pending Legislation H.B. 621 (Caoelo) - Traffic Offenses: would require that a written notice to appear in court is mandatory for all traffic offenses punishable by a fine only; and would provide that a peace officer who charges a person with committing a traffic offense that is a Class C misdemeanor shall issue a citation to the person instead of taking the person before a magistrate. H.B. 630 (5. Turner! - Unmarked Vehicles: would exempt automobiles used by mu- nicipal code enforcement officers to enforce environmental laws from the requirement to have an inscription on each side of the vehicle identifying the name of the city and the department or office having custody of the vehicle. H.B. 668 (Maxeyl - Emolovment Discrimination: would prohibit all employers includ- ing a city from subjecting an individual to different standards or treatment on the basis of the person's sexual orientation; and would waive a city's sovereign immunity and make a city liable for damages for any violation of these provisions. H.B. 698 (Gutierrez) - Transoortation Fundinll: this bill is the same as S.B. 245 below, HJ.R. 28 (Green! - Municioal Prooerty: would amend the Texas Constitution to allow for the taxation of municipal real property as described in H.8. 573 above. S.B. 227 (Shaoleil!h! - Desil!/l-BuUd: please see H.B. 579 above. 231 Harris - Poli Officers: would provide that a city is not immune from for the wrongful act omission or neg1igence committed by an off-duty pOlice S.B. 248 (Carona! - Prooertv Tax: would grant a property tax exemption to the owner of a motor vehicle that is subject to a lease if the lessee does not hold the vehicle for production of income. S.B. 251 (Harris! - Asset Forfeiture: this bill is the companion of H.B, 676 above. S.B. 256 (Carona) - ProoertvTaxes: would penuit taxing units in possession of fore- closed land following a bid-off procedure to recover personnel and overhead costs when the original owner redeems the property. S.B. 262 (Bernson! - Public Safety Emolovees: would require a city to provide coun- seling services to a public safety employee who: (a) is exposed to or involved in an accident invoMng death or serious injury and (b) requests such services. S.B. 264 (Ollden) - Alcohol-Free School Zones: would authorize a school in any city to petition the municipal governing body to adopt lOoo-foot alcohol-free zones around schools. (Note: under current law this can be done only in a city with a population of 900,000 or more,) SJ.R. 10 (lucio! - Hil!hwav Fundin~: would amend the Texas Constitution to penuit the state to sell grant anticipation revenue bonds. (Note: this resolution is similar to please see SB 241 above,) Dept. Police Development Human Resources Public Works Budget Public Works Police Police Administration Police Development Public Works Page 5 Position Last Action Committee left Pending 3/19/2001 House Public Safety Support Certified for Senate local/Consent 4/17/01 Referred to Committee House State Affairs 2/1/2001 Oppose Referred to Committee House Transportation 2/1/2001 Referred to Committee House Ways & Means 1/31/2001 Support Referred to Committee Senate Intergovernmental 1/16/2001 Relations Oppose Not Heard in Senate Intergovernmental Committee Relations 1/23/2001 Voted favorably House Criminal Jurisprudence 4/3/01 Support Received in the House House Ways & Means 2/21/2001 Support Referred to Committee Senate Intergovernmental 1/17/2001 Relations Referred to Committee Senate Education 1/22/2001 Support Hearing set for House Transportation 4/17/01 State Legislation Affecting NRH (continued) H.B. 761 (Colemanl - Certificate Fees: would double (from two dollars to four dollars) the fee that a local registrar must charge for a copy of a birth certificate would place an additional one-dollar fee on the issuance of a death certificate and would require that local registrars remit the additional funds to the State Department of Health to be used to improve the state's administrative procedures relative to birth and death records. H.B. 785 llsettl - Interlocal Contracts: would provide that a governmental unit that enters into a contract to receive police protection services from another governmental unit is responsible for any civil liability that arises from the receipt of those services. (Note: current law addresses interlocal contract liability for fire protection services only.) (Companion bill is S.B. 202.) H.B. 794 (Yarl:jfougltl - Child Health and Safety: would provide that all cities may add an additional $25 fee for a traffic offense committad in a school crossing lone and use the resulting revenue for child health and safety programs. (Note: under current law only a city with a population of 400 000 or more has this authority.) (This bill is similar to H.8. 374.) Coun - Sales T es: would provide a sales tax exemption fur construc- tion-relatad purchases made by nonprofit water supply and sewer service corporations. (Companion is 5.8.369,) Police Set for House Floor Action 4/18/01 Municipal Court Support Referred to Committee 2/5/2001 House Criminal Jurisprudence Budget & Research Oppose left Pending 3/21/2001 House Ways & Means Page 6 State Legislation Affecting NRH (continued) H.B. 862 {Dutton! - Public Nuisances: wouid allow a city resident to file a lawsuit against a city forcing the city to take remediai action against a public nuisance and wouid allow a court that determines a nuisance exists to require that the city abate the nuisance or purchase or condemn the property that constitutes a nuisance. H.B. 866 {Dutton! - Public Information Act: would amend the Public Information Act to limit the types of law enforcement records that a law enforcement agency could withhold from public disciosure. H.B. 882 (J. Jones! - MunlciDal Courts: would allow a municipal court judge to defer proceedings against a juvenile until the 9()th day after the date on which the teen court hearing to determine the juvenile's punishment is held. (This bill is the same as H.B. 458 and H.B. 822 above.) H.B. 884 U. Jones! - Interlocal Contracts: this bill is the companion of S.B. 335 below. 4 Hin . M n: would: (1) require a governmental body to designate a primary place at which notices of all meetings must be posted; (2) allow a governmental body to designate a secondary place of posting If the primary place be- comes inaccessibie; and (3) require a govemmental body that customarily posts notice of a meeting in two places to designate each location as a primary place. Police Oppose left Pending 3/12/2001 House State Affairs Municipal Court left pending 2/13/2001 House Juvenile Justice & Family Issues Administration Sent to House Calendars 3/6/2001 House County Affairs City Secretary Referred to Committee 2/5/2001 House State Affairs H.B. 928 (Coleman! - Local Government Comorations: this bill is the companion of S.B. 354 below. H.B. 931 (Solis! - Economic DeveloDment would provide for the development of an economic development plan for the state would require that the plan include goals and standards would require that the state "encourage" local governments to use the standards contained in the plan and provide that local economic development efforts that" produce a cost to the state " must use the standards, (Companion bill is S.B. 143.) Solis - Economi Devel men: this bill is the companion of S.B. 275 Public Works Referred to Committee 2/6/2001 House Transportation Development Oppose Voted favorably as amended 4/11/01 House Economic Develop- ment Parks Voted favorably 4/11/01 House Economic Develop- ment Page 7 State Legislation Affecting NRH (continued) S.B. 275 (Shaolej¡ml - Economic Develooment: would require the state comptroller to Parks prepare a report every two years on the economic development activities and perfonn- ance of state agencies, institutes of higher education, and 4A and 4B economic devel- opmentcorporations. (Companion bill is H.B. 932.) S.B. 336 (Madlal Rabies - Vaccination: would allow a local rabies control authority to Environmentsl Services administer rabies vaccinations to animals and would allow the local rabies control authority to designate someone to administer the vaccinations on behalf of the authority. Pending Legislation HJ.R. 44 (Floresl - prooerty Taxes: would amend the Texas Constitution to pennit the legislature to exempt travel trailers not used for production of income from property taxes, (Companion legislation is SJ.R. 11.) Dept. Position Last Action Committee Budget & Research Oppose left Pending 3/28/01 House Ways & Means Voted favorably as substituted 4/17/01 Senate Business & Commerce Referred to Committee 1/23/2001 Senate Health & Human SelVices S.B. 365 (Armbristerl - International Residentail Code (lRCI: would provide that the IRC shall be the only municipal residential building code to be used in Texas but would authorize cities to adopt local amendments to the IRC. S.B. 369 (OJ!denl - Sales Tax: this bill is the companion of H.B. 836 above, Budget & Research Oppose Referred to Committee 1/25/2001 Senate Rnance 2 Gall os - R D artm : would rewrite the current law that requires fire departments to provide to its personnel protective clothing and self-contained breathing apparatus would require departments to provide personal alert safety systems H.B. 199 (Pitts) - Building Inspections: Relating to the review of plans and specifica- tions and the inspection of buildings or facilities for the purpose of eliminating architec- tural barriers encountered by persons with disabilities. H.B. 450 (Yarbrough) - Building Permits: Relating to notice and hearings regarding the application for certain building pennits and the authority of municipalities to deny certain building pennlts. H.B. 969 (Ollveiral - Purchaslnl/: would provide that a city with a population of 200,000 or less when purchasing real or personal property may give preference to a local bidder. (Note: current law grants this option to any city with a population of 100,000 or less.) H.B. 984 (Grusendorfl - Develooment Pennlts: would provide that property owned by a religious organization that is exempt from property taxes is not required to be platted before the religious organization can obtain a building penn it or any other pennit re- quired to develop the property. H.B. 989 !Duttonl - Personnel Records: would require an employer to allow an em- ployee to inspect the employee's personnel records at least twice a year; would allow an employee to remove or correct any infonnation contained in the personnel records if the employer agrees with the correction; would provide that if the employer disagrees the H.B. 1021 (Clarki - Consultation With Attorney: would provide that a governmental body may use a telephone conference call a videoconference or the Internet to consult with its attorney in open or closed session. H.B. 1022 (McCalll - Hotel Occuoanev Tax: would provide that: (a) any entity that .. nd hotel occupancy tax revenue or that is funded by such revenue must before n moon and expenditure specify in a list the activity or event that is funded by the nd directly promotes tourism and hotel and convention activity: and (b) events or activities can be added to the list at any time. Development left Pending House licensing & Adminis- 2/26/2001 trative Procedures Referred to Committee House land & Resource 1/30/2DDl Management Support Referred to Senate Senate intergovernmental Committee Relations 3/15/2001 left Pending House land & Resource 4/2/2001 left Pending House State Affairs 3/12/2001 Support Hearing set for House State Affairs 4/18/01 Postponed until 4/23/01 Oppose Received in the Senate 4/9/01 Development Rnance Development Human Resources Administration Development Page 8 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action Committee H.B. 1025 rlsett} - Sales Taxes: would exclude the following fees from the taxable Budget & Research Referred to Committee House Ways & Means sales price of telecommunications services provided the fee is passed through to the 2/6/2001 purchaser: (1) the utility gross receipts assessment; (2) the state universal service fund assessment; (3) the federal universal service fund charge; (4) the state telecommunica- tions infrastructure fund charge; and (5) city franchise or right-of-way fees assessed under Chapter 283 of the local Government Code. H.B. 1056 CGallel!O} - Ooon Meetin6: would provide that the appearance of a quorum City Secretary Oppose Sent to House House State Affairs of a governing body at a meeting of a legislative committee is not a meeting of that Calendars 3/30/01 governing body and does not require the governing body to post a notice if: (a) the legislative committee posts notice that the governing body will appear and (b) the governing body takes no actions. H.B. 1070 CCraddiclò - Imoact Fees: would provide that a city with a population of less Development Referred to Committee House land & Resource than 115,000 that constiMes more than three-fourths of the county in which it is 10- 2/7/2001 Management cated may prohibit a landowner from connecting to a capital improvement unless the landowner enters into a written agreement with the city to pay a proportional share of the cost of the capital improvement if the city has not adopted an impact fee. H.B. 1082 ffhomoson } - Wal!in!! Discrimination: would generally prohibit discrimina- Human Resources Support Sent to House tion in wages based on race, color, disability, religion, sex, national origin, or age, Calendars 4/3/01 S.B. 4 CShaDiro} - TransDDrtatlon Funding: would create a Texas mobility fund; would Public Works Support left Pending 4/17/01 House Transportation provide that an undetermined amount of the state's general revenue shall be placed in the fund; would authorize TXDOT to sell bonds backed by revenue in the fund or by the state's full faith and credit; and would provide that the revenue shall be used for the state's highway, roads, and other mobility projects. (Note: this act would go into effect on e Texas ConstiMion is amended; please see SJ.R. 16 below.) S.B. 396 (Duncan) - Real Prooertv: would exempt a city from the notice and bidding legal Certified for Senate requirements of Chapter 272 of the local Government Code when the city sells or trans- Intent Calendar fers real property to a nonprofit 501(c)(3) organization. (Companion bill is H.B. 122.) 3/15/2001 S.B. 407 CCain} - Transoortation Funding: would authorize public entities including Public Works Support Signed by the Governor cities to borrow money from the state infrastructure bank account for certain transpor- 4/9/01 tation projects that are partially funded by federal money. S.B. 411 CShaolro} - Transoortatlon Funding: would provide that all revenues gener- Public Works Support left Pending Senate Finance aled by certain transportation-related fees (for example the vehicle registration fee) 3/1/2001 shall be deposited in the state highway fund and not be used for other purposes as is the case under current law. S.B. 438 CMadla} - Eminent Domain: would require a political subdivision that con- legal Oppose Certified for Senate demns land for the stated purpose of developing the land's natural resources to pay for Intent Calendar the value of the resources in addition to the value of the land. (Note: current law requires 2/21/2001 payment only for the market value of the land.) S.B. 455 CArmbrister! - Peace Officers: would provide that person may not enroll in Police Not Heard 2/21/2001 Senate Criminal Justice peace officer training unless the person has either: (a) a high school diploma or (b) a high school equivalency certificate with 12 hours of higher education with at least a 2.0 grade point average. SJ.R. 16 CShaoiro} - Transoortatlon Fundin!!' would amend the Texas Constitution to Public Works Support Hearing set for House Transportation allow for the sale of bonds for transportation projects as outlined in 5.8. 4 above, 4/17/01 Page 9 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action Committee H.B. 1121 lB. Tumerl - Peace Officers: would provide that a person may not enroll in peace officer training unless the person has either. (a) a high school diploma or (b) a high school equivalency certificate with 12 hours of higher education with at least a 2.0 left Pending 2/26/2001 House Public Safety H.B. 1133 IColeman} - Parking: would require a city to dedicate all fines collected for disabled parking violations to a special fund to be used only for improving accessibility for disabled persons. The bill would also allow a city to use fines collected for other traffic offenses to: (1) defray the expense of captioning and personal assistance services for a disability-related community event sponsored by the city and (2) provide technical equipment such as Braille writers and telecommunications devices for the deaf for use by persons with disabilities at a city facility. Municipal Court Referred to Committee 2/7/2001 House Urban Affairs H.B. 1149 {Martinez Fischer} - Police Officers: would allow school district police officers to arrest a person who commits a traffic offense in a school crossing zone and would require school district police officers to receive training in the proper use of radar or laser units from a city police officer or county sheriff's deputy. Police Not heard 3/5/2001 House Public Safety H.B. 1194 IBrimer! - Conflict of Interest: would allow property owned by a person who becomes a member of a city council or a planning and zoning board to continue to receive tax abatement and tax increment financing that is already in effect prior to that person joining the governing body, (Note: this bill would reverse Attorney Generai Opin- Sent to House Calendars 4/2/01 House Ways & Means H.B. 1200 {Brimer! - ProDeltv Taxes: would allow school districts to cap the taxable value of certain property as an economic development incentive; and would provide that unlike tax abatement the cap on taxable value would not hinder the school district's eligibility for state funding. Budget & Reserach Support Voted favorabiy 4/17/01 House Ways & Means o n - Police cers: would create a criminal offense for racial or eth profiling by a police officer; and would generally prohibit a police officer from making an arrest detention or search that is based on a person's race Of ethnicity. Police left Pending 3/27/2001 House Criminal Jurisprudence Page 10 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position H.B. 1265 (Clark! - Munlcioal Re!!ulations: would clarify several statutory provisions Administration Sent to Senate Senate Intergovernmental relating to cities including the following: (1) would provide that a municipal officer may 3/22/01 Relations not be removed from office for an act committed before the officer took office if the act was a matier of record or otherwise known to the voters; (2) would provide that for obtaining pre-clearance from the U.S. Department of Justice for annexation a city must apply for pre-clearance on the earliest date permitted under federal law; (3) would provide that if another law requires a city to give notice of its budget hearing the notice provisions of Chapter 102 of the local Governrnent Code do not apply; (4) would provide that the unclaimed or abendoned property provisions of the Texas Property Code do not apply to property seized by a police officer under Article 18.17 of the Texas Code of Criminal Procedure; and (5) would provide that the governing body of a general law city could remove a municipal court judge from office only by following the removal provi- sions in Chapter 21 of the Texas Local Government Code. H.B. 1273 tJ. Davis! - Peace Officer and Fire Fighter Benefit Fund: would create a Human Resources Left Pending 4/2/01 House Pensions & benefit fund for peace officers and fire fighters injured in the line of duty, (Note: the bill Investments has no provisions regarding the source of revenue for the fund.) H.B. 1278 (Coleman! - Buildln!! Permits: would amend the Texas Abestos Health Development Set on House Local! Protection Act to provide that a city may not issue a building permit to renovate or de- Consent 4/20/01 molislt a public building until after the applicant for the permit provides evidence that an asbestos survey of the building has been completed by a person licensed to perfomr such services (companion bill is S.B, 509 below). H.B. 1280 (Hilderbran! - Gasoline Tax: would provide that for each gallon of gasoline Budget & Research Referred to Committee House Ways & Means .In a city one cent of the state gasoline tax shall be returned by the state comp- Public Works 2/8/2001 . the city for the acquisition of rights-of-way and for road construction and maln- ten . H.8. 1281 (Counts! Water and Sewer Rates: would: (a) limit the authority of a water or Finance Set for House floor sewer utility that operates multiple systems to consolidate those systems in a single action 4/18/01 tariff by restricting the total number of such systems to 20 by requiring that the systems serve contiguous areas or are interconnected and by requiring that the systems be substantially similar in terms of facilities quality of service and cost of service; (b) require that tariffs relating to more than five systems provide rates that promote water conservation; (c) authorize the TNRCC and cities to adopt alternative methodologies for water and sewer rates based on factors other than rate of return; (d) provide that affili- ates of utilities owning more than 50 systems that provide retail water or sewer service would be prohibited from supplying wholesale water supply service to that utility except in emergency situations and only if TNRCC finds that the utility cannot obtain wholesale water service from another source, H.B. 1285 (Brimer! - Sales Taxes: would pennlt a city under 600,000 in population (as Budget & Research Support Sent to House Local! opposed to less than 275,000 POPulation as Is current law) to request information from Consent 4/20/01 the comptroller about the amount of city sales taxes collected by large local busi- nesses; and would permit any city to request Information from the comptroller about the amount of city sales taxes collected by any businesses which are party to the following: (1) an interlocal agreement; (2) a tax abatement; (3) a reinvestment zone; (4) tax incre- ment financing; (5) a revenue sharing agreement; (6) an enterprise zone; (7) a neighbor- hood empowerment zone; or (8) any other similar agreement zone or district. H.B. 1322 /Brimer! - Billboards: would allow a city to regulate the size of a sign or Development Not heard 3/7/2001 House County Affairs billboard in a residential area and would provide that a sign in a residential area may not be larger than 36 inches by 36 inches, H.B. 1336 twilson) - Racial Profiling: would require a police officer who stops a vehi- Police Left Pending 3/27/01 House Criminal Jurisprudence cle for traffic offense to report the age, gender, race and ethnicity of the driver of the vehicle stopped and would require a city to maintain compile and report traffic stop info ation to the Texas Commission on Human Rights. H. 7 (Green! - Bond Flection~: would provide that when voters defeat a munici- Finance Referred to Committee House Urban Affairs pal bond proposal the city may not conduct another election on a proposal that is Administration 2/12/2001 similar to or related to the earlier bond proposal until one year has elapsed. Last Action Committee Page 11 State Legislation Affecting NRH (continued) S.B. 381 {Sbaolell!lJ} - Public InformatIon: would requIre the Texas Attorney Gen- eral to provide a statewide toll-free number through which citizens could contact the open records dMsion of the attorney generai's office and wouid require a city to post S.B. 427 {Luclol - Mandated Health Benefits: would provide that health benefit pians Including intergevernmental risk pools must provide coverage for autism and "pervasive development disorders. " S.B. 509 {Moncrief} - Bulldln!! PermIts: would amend the Texas Asbestos Health Protection Act Article 4477 -3a to provide that a city may not Issue a building permit to renovate or demolish a public building until after the applicant for the permit provides evidence that an asbestos survey of the building has been completed by a person licensed to perform such surveys. (Companion Is H.B. 1278.) S.B. 510 {Armbrlsterl - Alternative Procurement and Delivery Methods: would allow cities to use competitive bidding competitive sealed proposals a design-build contract a construction manager or job order contracting for the construction or maintenance of a public facility; would define "public facility" as a building In- tended for human habitation and office use but would exclude highways, roads, streets, bridges, utilities, water supply projects, water plants, wastewater plants, water and wastewater distribution or conveyance facilities, wharves, docks, elec- tric generation or distribution facilities, or drainage projects. S.B. 511 {Slblev} - Plumbln!! Code: would require the State Board of Plumbing Examiners to adopt the International Plumbing Code and the Uniform Plumbing Code would eliminate adoption of the Southern Standard Plumbing Code and the National Standard Plumbing Code and would require plumbing in an area not otherwise regnlated under the Plumbing Ucense Law (Art. 6243-101) to be installed In accor- dance with one of those two codes. A city would be allowed to adopt any nationally reco nlzed model piumblngcode. (Companion bill Is H.B. 217.) Administration Referred to Committee 1/29/2001 Senate State Affairs Human Resources Referred to Committee 1/29/2001 Senate Business & Commerce Development Sent to House Local! Consent 4/12/01 Finance Support Sent to House Calendars 4/12/01 House Urban Affairs Development Referred to Committee 2/5/2001 Senate Business & Commerce Page 12 State Legislation Affecting NRN (continued) S.B. 530 {Bernsen} - ProoertvTaxes: this bill Is the same as H.B. 1100 above. S.B. 537 {lucio} - Manufactured Housing: would allow a city to require a permit, bond, fee or license In addition to that required by state law for the movement of a manufactured home within the city. S.B. 547 (Slblevl - Sales Taxes: would exclude the following foes from the taxable sales price of telecommunications services provided the fee Is passed through to the purcllaser and Is listed as a separate line Item on a bill: (1) the utility gross receipts assessment; (2) the state universal service fund assessment; (3) the federal univer- sal service fund cIIarge; (4) the state telecommunications Infrastructure fund cIIarge; and (5) city franchise or right-of-way fees assessed under Chapter 283 of the Local Government Code. (Note: this hili Is similar to H. B. 1025.) S.B. 559 {Madia I - OoeD Meetlnl!S: would provide that a committee, subcommit- tee, or other similar entity that Is created by a municipal governing body shall be covered by the open meetings law if a majority of members of the committee, sub- committee or similar entity are members of the municipal governing body, and If the entity engages In deliberation. Budget & Research Referred to Committee 2/6/2001 Senate Intergovernmental Relations Development Referred to Committee 2/7/2001 Senate Intergovernmental Relations Budget & Research Oppose Hearing set for 4/19/01 Senate Finance Administration Left Pending 4/17/01 House State Affairs H.B. 1411 /Walkeri - Alternative Procurement and Delivery Methods: would allow cities to use competitive Wddlng, competitive sealed proposals, a design-build con- tract, a construction manager, or job order contracting for the construction or mainte- nance of a public facility; would define "public facility" as a building intended for human habitation and office use but would exclude highways. roads, streets, bridges, utilities. water supply projects, water plants, wastewater plants water and wastewater distribution or conveyance facilities, whalVes, docks, electric generation or distribution facilities, or drainage projects. (Companion bill is S.B. 510.) Finance Referred to Committee 2/12/2001 House Urban Affairs Page 13 State Legislation Affecting NRH (continued) Pending Legislation Dept. H.B. 144B (Oliveira) - Tax Abatement would allow cities to grant tax abatements on Economic Development personal property located on leased, tax-exempt, real property. (Note: this bill would reverse Attorney General Opinion JC-0300 which concluded that lessees of tax-exempt real property may not participate in tax abatement). Position Last Action Committee Support Sent to House Calendars 3/26/01 House Ways & Means H.B. 1449 (Oliveira! - Tax Abatement: would allow new tax abatements by cities after Economic Development September 1, 2001. (Note: under current law the chapter of the Tax Code authorizing tax abatements expires on that date.) H.B. 1454 (Martinez Fischer! - Elections: would prohibit a city from paying its election judges and clerks more money than that paid by the state or county in their elections. (Companion bill is S.B. 608.) Support Received in the Senate 4/9/01 City Secretary Sent to subcommittee 4/4/01 House Elections H.B. 1501 (Hunn! - Police OffIcers: would require police officers to return a place they have searched to the condition the place was in before the search warrant was executed. H.B. 1505 /Yarbrough! - Plumbinl! Standards: would: (1) require a city that regulates .' ,fixtures, valves, tanks, and other fixtures through which water, gas, or 's carried, to use a licensed plumber to perform plumbing inspections; (2) p that if the , boundaries of a city and a municipal utility district (MUD) overlap, only the city may perform a plumbing inspection and collect a permit fee; and (3) clarify the provisions of the Plumbing Standards Act by providing that in adopting a plumbing code a city may only adopt a code that does not substantially vary from the rules or laws of the state, H.B. 1509 /Yarbroul!h! - Public SafetY Emnlovees: would expand the provision of state law that allows a public safety employee to seek reimbursement from a govern- mental entity for exposure to a contagious disease by including exposure to hazardous materials if the exposure to the hazardous material occurs during the course of employ- ment the disease caused by the exposure is not an ordinary disease of life and the employee requires preventive medical treatment because of the exposure, H.B. 1527 (Ballev! - Prevailing Wages: would allow a governmental body to require an entity that has contracted with the governmental body to pay its employees more than the prevailing wage rate, H.B. 1528 IBallev! - Collective Barl!aining: would provide that the state or a political subdivision of the state may not enter into a collective bargaining agreement with a labor organization that advocates the right to strike. (Note: current law prohibits collec- tive bargaining under any circumstances except that municipal police or fire employees can get collective bargaining rights through a popular vote. Thus this bill would broaden collective bargaining rights,) Development Sent to House Calendars 4/10/01 House Uœnsing & Administration Human Resources left Pending 4/3/01 House Business & Industry Human Resources Referred to Committee 2/14/2001 House State Affairs Human Resources Oppose Hearing set for 4/17/01 Not heard House State Affairs H.B. 1543 (luna! - Sales Taxes: would provide a specific sales tax for city-created crirne control and prevention districts. (Note: current law requires cities to enact such a s under a chapter of the Tax Code generally related to counties.) H.B. 1544 (Uher! - Public Information: would prohibit the release of personal informa- tion contained in the files of the Texas Department of Public Safety and would allow the reiease of motor vehicle accident information only if two separate types of information regarding the accident are provided, Police Voted favorably 4/9/01 House State Affairs Page 14 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position H.B. 1574 (JunelD - Emergencv Communications: would abolish the Commission on Police Referred to Committee House State Affairs State Emergency Communications (the so-called "9-1-1 Commission") and transfer its 2/15/2001 duties to the Public Utility Commission of Texas. H.B. 1611 (Kolkhorst) - Prevaillnl! Wage: wouid provide that all cities (not just those Human Resources Voted favorably House Urban Affairs over 10,000 in population as is current law) may collect a penalty from a contractor who 4/11/01 fails to pay the prevailing wage rate. H.B. 1643 (Hinoiosa) - Poiice Officers: would create a criminal offense for raciai or Police left Pending House Criminal Jurisprudence ethnic profiling by a police officer; and would generally prohibit a police officer from 3/27/01 making an arrest, detention or search that is based on a person's race or ethnicity. (This bill is the same as H,B. 1250,) H.B. 1652 /WIlliams) - Fire Fighters: would extend the protections of the Texas Tort Fire Referred to Committee House Civil Practices Ciaims Act to any non-profit fire department or fire fighter responding to a fire emer- 2/15/2001 gency if an error or omission occurs in responding to the emergency. H.B. 1654 CTaiton) - Arrest Warrants: wouid provide that infonnation in an arrest Police Sent to House warrant or an affidavit supporting an arrest warrant is not required to be disclosed to the Calendars 3/19/2001 pUblic until after the arrest warrant is executed or three days after the warrant is issued or affidavit is filed whichever time period is later; and would provide that these disclo- sure requirements do not apply to warrants or affidavits relating to the arrest of a person for a misdemeanor offense punishable by a fine only. H.B. 1660 (Farran - Municloal Ordinances: would allow a city to impose a fine up to Administration Referred to Committee House Urban Affairs $2,000 for violation of a city ordinance that regulates municipal beautification, 2/15/2001 9 (B. Tum.." - IInn......mUnn Facilities: would provide that an operator of an Public Works Sent to House House Public Safety u und facility who has been contacted by a notification center must not later than Calendars 4/5/01 24 hours before an excavation is to begin notify the excavator of the operator's plans to H.B. 1675 (Burnam) - Minimum Wage: would provide that a city must pay a minimum Human Resources left Pending 4/17/01 House State Affairs wage that is the greater of the federal minimum wage or a wage based on federal pov- erty guidelines for a family of four. HJ.R. 7 (Bettv Brown) - Prooertv Taxes: would amend the Texas Constitution to cap Budget & Research Hearing set for House Ways & Means city and county property taxes on the unimproved homesteads of persons over age 65 4/18/01 similar to the cap on school district taxes for persons over age 65 if one of the following occurs: (1) the governing body of the city or county votes for the cap; or (2) the cap is passed at an eiection which must be called upon a petition of five percent of the regis- tered voters of the city or county, S.B. 578 (Madia) - Provision of Emergencv Communication Selvices: would require Fire & Police Set on Senate Intent the Commission on State Emergency Communications to develop and operate an emer- Calendar 4/18/01 gency call box system; to deveiop standards for allowable expenses for facîlíties, equip- ment and personnel necessary to establish and operate a public safety answering point and 9-1-1 system; to develop where feasible a wireless Phase II system (as defined by the Federal Communications Commission); and to use the most current technology to ensure that 9-1-1 service has the most up-to-date network, database, and equipment. The bill wouid also provide that a home rule city operating a 9-1-1 service would be required to participate in the state administration of emergency communications, or become part of an emergency communications district, or elect to form a new emer- gency communication district, Further, a district formed by a home rule city would be governed by a six-member board one non-voting member of which would be appointed by the principal service supplier in the city. Finally, the district would be authorized to impose a 9-1-1 fee of not to exceed three percent of the monthly base rate charged a service user by the principal service supplier In the city and to Issue and sell bonds in the name of the district to finance facilities, equipment or supplies to begin providing 9-1-1 service or to install equipment necessary to provide 9-1-1 service, S.B. 604 (Sibley) - Public Information: would allow an agency, board, commISSion, Administration Support Received in the House House State Affairs .t or committee created by the executive or legislative branch of govemment 4/4/01 t confidential Information to another government body of the state another sta r the United States without violating the provisions of the Public Information Act. S.B. 608 Nan de Putte) - Elections: this bill is the same as H.B. 1454 above. City Secretary left Pending 4/2/01 Senate State Affairs Last Action Committee Page 15 State Legislation Affecting NRH (continued) Pending Legislation S.B. 650 (Carona! - ProDertv Taxes: would eliminate auxiliary members of appraisal review boards and authorize the appraisal district board of directors in certain populous counties to increase the number of regular appraisal review board members. S.B. 658 (Barrientos! - ProDertv Taxes: would make the following changes to the Tax Code relating to property tax exemptions for disabied veterans: (1) increase the amount of exemption a disabled veteran or surviving family member is entitled to up to the maximums permitted by the Texas Constitution; (2) allow the children of deceased disabled veterans and their spouses to continue to receive the veteran parent's tax exemption until the child reaches age 30 instead of age 18 as under current law; and (3) allow each surviving child to receive the full amount of the exemption that the veteran parent was entitled to at the time of death instead of dividing the exemption amount among all of the surviving children as current law requires. (Please see SJ.R. 22 be- low). S.B. 678 IR. West! - MuniciDal Courts: would allow a municipal court judge to defer proceedings against a juvenile until the 9()th day after the date on which the teen court hearing to determine the juvenile's punishment is held. (Companion bill is H.B. 458,) S.B. 679 !Harris! - Prooertv Taxes: would allow school districts to cap the taxable value of certain property as an economic development incentive; and would provide that unlike tax abatement the cap on taxable value would not hinder the school district's eligibility for state funding. (Companion bill is H.B. 1200.) S.B. 695 (Wentworth! - Consultation With AttomQy: would provide that a govemmen- tal body may use a telephone conference call a videoconferenœ or the Internet to consult with its attorney in open or closed session. (Companion bill is H.B. 1021.) SJ.R. 22 (Barrientos! - Prooertv Taxes: would amend the Texas Constitution relating to property tax exemptions for disabled veterans in the following ways: (1) allow any child not just a minor child of a deceased disabled veteran to continue to receive the veteran parent's tax exemption; and (2) allow each child the full amount of the exemp- tion the veteran parent was entitled to at his or her death instead of dividing the exemp- tion amount among all of the surviving children. (Please see S. B. 658 above.) H.B. 1692 (Chisum! - Electric Derel!ulation: would provide new safeguards against electric deregulation failure by providing that retail customer choice will not begin in competitive development areas until the PUC finds that electric rates will not be higher for any customer class; by requiring electric utilities to identify how they will mitigate market power and to guarantee that rates will not rise due to the implementation of customer choice; by prohibiting utilities from unbundling until their regions are identi- fied as qualifying power regions; by limiting transfers of generation assets to no more than 20 percent every 24 months; by requiring PUC approval of transfers of generation assets; by requiring that proceeds above book value from the sale of assets prior to deregulation be shared 10 percent by utility shareholders and 90 percent by customers; and by ensuring that electric utilities are subject to all applicable PUC authority. H.B. 1693IDelisil - Emergencv Manal!ement: would require a local emergency man- agement agency to address the issue of bioterrorism in its local emergency manage- ment plan. (Companion bill is S.B. 94,) Dept. Position Last Action Committee Budget & Research Referred to House Committee 3/26/01 House Ways & Means Budget & research Referred to House Committee 3/19/2001 House Ways & Means Municipal Court Support Removed from Senate Intent 3/ 15/2001 Budget & Research Hearing set for 4/19/01 Senate Ananœ Finance Support Referred to House Committee 3/26/01 House State Affairs Administration Support Voted favorably 4/17/01 House State Affairs Budget & Research Referred to House Committee 3/19/2001 House Ways & Means Administration Voted favorably 4/9/01 House State Affairs Are Hearing set for 4/18/01 House Public Health Page 16 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position H.B. 1694 (Hamrlc\ - Pronertv Taxes: would grant a property tax exemption to the Budget & Research leftPending4/4/01 House State Affairs owner of a motor vehicle that is subject to a lease if the lessee does not use the vehicle for production of income. (Note: this bill is similar to S.B. 248.) H.B. 1727 (Maxev\ - local laws: would require a person who introduces a local or Administration Voted favorably House State Affairs special law in the state legislature to deliver notice to the city or county that is the sub- 4/9/01 ject of the special law and would require proof of delivery of the notice by affidavit from the person who delivered the notice. H.B. 1731 cr. KJne} - Freenort ExemDtion: would: (1) allow late filing of an application Economic Development Sent to House Local! for a freeport exemption; (2) extend the time during which a property owner claiming a Consent 4/20/01 freeport exemption must respond to a request from the appraiser for additional support- ing documentation; and (3) provide that in both cases taxing units would be entitled to a ten percent penalty from the late-filing property owner, H.B. 1736 CWolens\ - Advanced Telecommunications Services: would: (1) require a Administration Left Pending 3/26/01 House State Affairs certificated local exchange telecommunications company begînning September 1, 2002 to provide advanced telecommunications services (those services that enable users to originate and receive high-quality voice data, graphics, and video using any technology) to any customer within its certificated areas who request such services; (2) provide that such services would be provided in rural areas at prices terms conditions and quality similar to such services in urban areas; and (3) provide that rural communi- ties of less than 20 000 in population would have access to various funding sources including economic development funds Texas Infrastructure Fund grants and loans Texas Agricultural Finance Authority financing and community development block grants. __/Bailey\ - Elections: would allow a person to regîster to vote and vote on City Secretary Hearing set for House Elections 4/18/01 H.B. 780 (Mowerv\ - Aooraisal Districts: would make several changes to the board of Budget & Research Referred to Committee House Ways & Means directors of an appraisal district (1) provide for the general election instead of appoint- 2/20/2001 ment by taxing units of some members of an appraisal district board; (2) expand the number of members on an appraisal district board according to county population; (3) provide that the county assessor-collector is a voting member of the board; and (4) change the procedures by which an appraisal district board may be further increased in size. H.B. 1781 (Mowery) - Aooraisal Districts: would make numerous changes to the law Budget & Research Referred to Committee House Ways & Means relating to appraisal districts including: (1) abolish appraisal district boards of directors 2/20/2001 gîving complete authority over the district to the county assessor-collector, (2) expand the ability of taxing units in more than one county to switch appraisal districts; (3) estab- lish that the chief appraiser is an optional position and serves at the pleasure of the assessor-collector, (4) limit the distribution of appraisal district budgetary funds avail- able to special districts within the appraisal district; (5) permit intertocal contracts between the appraisal district and taxing units including contracts to consolidate employee benefit plans; (6) provide that members of the appraisal review board are appointed by the taxing units instead of the appraisal district board of directors based on procedures established by the county assessor-collector, (7) provide that appoint- ment of auxiliary members of the appraisal review board must be approved by the taxing units in the district; (8) abolish the office of taxpayer liason; and (9) eliminate the ability of taxing units to revoke certain actions by the appraisal district, H.B. 1815 (Green\ - Bond Elections: would provide that when voters defeat a munici- Rnance Referred to Committee House County Affairs pal bond proposal the city may not conduct another election on a proposal that is simi- 2/20/2001 lar to or related to the earlier bond proposal until one year has elapsed. (Note: this bill is similar to H.B. 1337.) H.B. 1833 (Giddines\ - Health and Safety Ordinances: would: (1) allow a city to Development Referred to Senate Senate Intergovernmental receive information from birth and death records if the information is used only to iden- Committee 4/17/01 Relations tify a property owner to whom the city rnust give notice of a violation of a state statute or city ordinance; (2) provide that a city must exercise "due diligence" to determine the identity of a property owner or lien holder whose property is in violation of a city building standards regulation; (3) provide that the city may search several different types of :~rds in order to establish that due diligence has been met; and (4) allow a city t an administrative adjudication process to assess adrninistrative penalties for viola ons of city ordinances that regulate substandard structures. H.B. 1834 mneryJ - Immunity: would provide that a person is not liable for damages Administration Left Pending House Civil Practices for any communication the person made to a governmental entity or law enforcement 2/28/2001 agency if the communication was made in good faith and was a matter of concern to the governmental entity or law enforcement agency, Last Action Committee Page 17 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action H.B. 1847 (Kefferl - ProPertv Taxes: would permit a property owner who wins a tax appeal to recover interest if the taxing unit does not refund any excess taxes paid within 60 days after the appraisal roll is corrected; and would permit recovery of court costs and attorney's fees if the refund has not been made within 180 days after the appraisal roll is corrected. H.B. 1861 /Danbur!!l - Public Information: would provide that certain audit working papers are exempt from the requirements of the Public Information Act. (Companion bill isS.B.796.) Budget & Research Referred to Committee 2/21/2001 Finance Referred to Committee 2/21/2001 H.B. 1869 /Wohlgemuthl - Manufactured Homes: would: (1) provide that when a consumer purchases a manufactured home to be placed on a nonpemJanent foundation on land owned - or to be owned - by the consumer the home is considered to be rem property unless the consumer elects to have the home considered to be oersonal prop- erty; and (2) require a person who is purchasing a manufactured home through monthly payments to make payments to the retailer to pay property taxes through an escrow account Development Sent to House Calendars 3/23/01 H.B. 1879 (Chavez! - PropertY Tax Exemption: would allow for late application for a property tax exemption for: (a) disabled veterans or (b) survivors of disabled veterans and members of the armed forces who die on active duty, Budget & Research left Pending 3/21/2DOl Committee House Ways & Means House State Affairs House Ways & Means H.B. 1899 (5. Turner! - Solid Waste: would provide that: (1) solid waste tipping fee revenue can be granted by the TNRCC directly to local governments or regional planning commissions; and (2) any local government that gets a grant must submit a report detailing how the revenue was spent. H.B. 19DD (5. Tumen - Waste Tire Enforcement and Cleanup: would: (1) require tire EnvironmentaJ Services dealers to collect a fee of $2.DD per tire to be deposited in the waste tire enforcement and cleanup account with the TNRCC and allocated to local governments for enforce- ment of waste tire laws and cleanup of waste tires; and (2) authorize local governments consistent with regional plans approved by the TNRCC to regulate and dispose of waste tires and to adopt programs to address improper waste tire disposal problems. left Pending 4/ 10/01 H.B. 1912 (Caoelo) - Utilitv Fees: would allow a city to add a one-dollarfee to a utility Finance bill and use the revenue for improvements necessary to comply with the I\mericans with Disabilities Act. Voted favorably 4/11/01 H.B. 1916 (Caoelo) - Public Information: would: (1) create a new exception under the Police Texas Public Information Act that would allow a police officer to restrict the release of information regarding the officer's home address telephone number social security number and personal family information; and (2) make confidential appraisal district left Pending 3/19/2001 S.B. 729 /Barrientosl - Collective Banæaining' would eliminate the prohibition on a Human Resources political subdivision entering into a collective bargaining contract with a labor organiza- tion but would retain the provision that prohibits a state official from entering into a collective bargaining contract. (Companion bill is H.B. 1345.) S.B. 778 (Shapiro) - Signs: would provide that an off-premise sign that qualifies as a Development non-conforming sign and that is pennitted to remain in place is not eligible for replace- ment or reconstruction except as provided by Chapter 216 of the local Government Referred to Committee 2/19/2001 left Pending 4/ 10/01 S.B. 796 (Madia) - Public Information: this bill is identical to H.B. 1861 above. Finance Voted favorably 4/17/01 House Environmental Regula- tion House Urban Affairs House State Affairs Senate Intergovernmental Relations Senate Intergovemmental Relations Senate State Affairs Page 18 State Legislation Affecting NRH (continued) Pending Legislation H.B. 1932 (Elkinsl - Sales Taxes: would provide a sales tax exemption for certain machinery that operates on alternative fuels. H.B. 1953 lLongorial - Sales Taxes: would provide a sales tax exemption for the purchase of certain renewable energy equipment and devices. (Companion bill is S.B. 857.) H.B. 1955 IZllranekJ - MuniciDal Court Rnes: would provide that a municipal court judge who sentences an indigent defendant to jail time to satisfy payment of fines and costs may specify the period of time for satisfying the judgement at not less then eight hours nor more than 24 hours for eve¡y $100 of fines or costs that the defendant owes. H.B. 1965 lDanburgl - Sales Taxes: would provide that billboard advertising services are taxable services; and would provide that the state portion of such tax is dedicated to the Texas Department ofTransportation to De used for billboard removal. H.B. 1968 mllerv\ - Public Funds Investment: would provide that certain certificates of deposit of out-of-state banks are authorized investments under the Public Funds Investment Act. H.B. 1980 (Farabeel - Public Works Contracts: would amend the provisions that require contractors on public works contracts to provide proof of workers' compensation coverage to require proof of coverage only on a contract in which the total dollar amount exceeds $9000. H.B. 1992 lMarchant! - ComDetitive Bidding; would: (1) allow a city to specify in its notice for bids that the city will consider a particular financing alternative when review- .. and (2) provide that a city that does not provide this notice must reject all bids bid prices contingent on a particular financing alternative, ~ Position Last Action Committee Budget & Research Oppose Referred to Committee House Ways & Means 2/22/01 Budget & Research Oppose Referred to Committee House Ways & Means 2/22/01 Municipal Court Referred to Committee House Criminal Jurisprudence 2/22/01 Budget & Research Left Pending House Ways & Means 3/28/01 Rnance Sent to House House Pensions Calendars 4/17/01 & Investments Public Works Left Pending House Business & Industry 4/3/01 Finance Referred to Committee House Uman Affairs 2/26/01 H.B. 2013 lMcCaln - Public Information: would amend the Texas Public Inlormation Act to provide that a credit card, debit card, or access device number collected, as- sembled or maintained by a governmental body is confidential information, H.B. 2020 mllerv\ - Public Funds Investment: would: (1) provide that certain certifi- cates of deposit of out-of-state banks are authorized investments under the Public Funds Investment Act; and (2) eliminate certain requirements that certificates of deposit must be secured or insured prior to their use as investments. H.B. 2021l1settl - ProDertv Taxes: would: (1) lower the rollback tax rate for cities from an eight percent increase to a four percent increase; (2) require a city collecting more than $5 million in property taxes to conduct a tax increase hearing whenever the tax levy would increase as opposed to current law which requires a hearing only if the property tax levy will increase by more than three percent; and (3) require a city collecting more than $5 million in property taxes to publish different notices relating to the hearing and vote. H.B. 2111 lGallegol - Court Costs: would create a new statutory provision to ciarify that money collected from the judicial technology fund may be used only for teclmologi- cal support of the judiciary and any money paid out of the fund must be approved by the Texas Judicial Council whose membership includes municipal court judges. H.B. 2117 lWalken - DeveloDment Moratoria: would provide that: (1) a city may not impose a development moratorium without a 15-day advance notice of hearings two separate public hearings and two separate readings (separated by at least a week) by the city council; (2) before imposing a moratorium the city must issue written findings of evidence that the moratorium is needed due to a shortage of essential public services including water sewer streets police or fire fighting capacity; (3) a moratorium may not ~20 days unless the city extends the moratorium by repeating the notice/ hi written findings process; (4) a moratorium must allow for a waiver from the mora orium for certain reasons; and (5) the definition of moratorium inciudes "routinely" delaying the issuance of permits. (Companion bill is S.B. 980,) Left Pending 3/12/01 House State Affairs Finance Referred to Committee 2/26/01 House Pensions & Investments Budget & Research Oppose Referred to Committee 2/26/01 House Ways & Means Municipal Court Sent to House Calendars 3/20/01 Development Voted favorably as substituted 4/10/01 House land & Resource Management Page 19 State Legislation Affecting NRH (continued) Pending Legislation H.B. 2140 tMarchant! - ProDertv Taxes: would allow cities to adjust their effective and rollback tax rates to compensate for unfunded state and federal mandates, H.B. 2141 tMarchant! - SiI!nS: would provide that an off-premise sígn that qualifies as a non-confonTIing sígn and that is penTIltted to remain in place is not eligible for re- placement or reconstruction except as provided by Chapter 216 of the Local Govern- ment. (Companion bill is S.B. 77B,) H.B. 2151 tDanburgl- Authority of local Governments to Al!I!reJlate. Purchase and Sell Enerl!V and Natural Gas: would amend Chapter 304 of the local Government Code to authorize counties, cities, school districts, special districts or any other political subdívision to join with other political subdivisíons to fOnTI a political subdivisíon corpo- ration and thereafter to obtain certification as a retail electríc provider under the Utilities Code; to allow the corporation to negotiate the purchase of natural gas for its public facilities; to provide for education with regard to aggregation, purchase, sale use, management and operation of electrícity and natural gas; to allow the corporation to negotiate, contract, purchase and take other legal action with regard to natural gas; to expand the ways in which the corporation may recover its aggregation expenses; and to limit the corporation's aggregation of the purchase of electrícity for the facilities of political subdivisions to utílíties that have implemented customer choice. (Companion bill is S.B. 996.) H.B. 2161 tBosse! - City Streets: would: (1) create a joint interim legislative commit- tee to study the availabílíty and adequacy of funding sources for the construction, repair and maintenance of city streets; and (2) require the committee to analyze these issues and prepare a final report to full legislature not later than November 1, 2002. Ehrh - Rre D artments: would rewrite the current law that requires rtments to provide to its personnel protective clothing and self-contained bre mg apparatus would require departments to provide personal alert safety sys- tems would require each department to adopt an incident management system and a personnel accountabílíty system and would allow the Texas Commissíon on Rre Protec- tion to enforce all these standards and requirements. (Note: this bill is similar - but not identical - to S.B. 382.) Dept. Budget & Research Development Administration Public Works Position Rre Last Action Referred to Committee 2/28/01 Referred to Committee 2/28/01 left Pending 4/2/01 Referred to Committee 2/28/01 left Pending 4/11/01 Committee House Ways & Means House land & Resource Management House State Affairs House AdministratÍOl1 House Urban Affairs H.B. 2297 tThomoson! - Electronic Pavments: would allow for payment of a municipal fee or fine by electronic means through the Internet. HJ.R. 69 tJunelll - Texas Constitution: would revise and reorganize the current Texas Constitution to streamline and consolidate most local government provisions under one article. (Note: this resolution is similar to HJ.R. 1 filed in 1999.) S.B. 819 tArmbrister! - Handl!Uns: would: (1) provide that except as provided by federal law only the legislature (not a city government) may regulate the carrying of a handgun even on city-owned property; and (2) eliminate current law that makes it an offense for a person who has a concealed handgun license to carry a handgun onto government property where handguns are prohibited, S.B. 833 tMoncrief\ - Sales Taxes: would provide a sales tax exemption for items purchased by certain child-care facilítíes. S.B. 866 tNelson! - Texas Privacy Act: would create the Texas Privacy Act to: (1) pro- hibit a governmental entity from releasing certain personal infonTIation to the public under the Public InfonTIation Act unless the attorney general authorizes the disclosure; (2) require a governmental entity to establish procedures to ensure that the governmen- tal entity collects personal infonTIation only to the extent reasonably necessary to imple- .rogram authenticate a person's identity ensure security or accomplish an- ernmental purpose; (3) require a governmental entity to adopt or amend its records retention schedule to ensure that personal information is retained only for the period of time necessary to accomplish the purpose for which the information was collected; (4) require a governmental entity to develop a privacy policy that describes why the governmental entity collects personal information the procedures used to collect the information the manner in which the information may be disclosed Municipal Court Administration Police Budget & Research Page 20 Support Received in the Senate 4/9/01 Referred to Committee 2/28/01 Voted favorably 4/11/01 Oppose Referred to House Committee 4/17/01 Sent to the House 3/20/01 House Urban Affairs House Select Committee on Constitutional Revision Senate Criminal Justice House Human Services House State Affairs State Legislation Affecting NRH (continued) Pending Legislation S.B. 949 (ShaDiro} - Zoning: would provide that an open enrollment charter school is subject to municipal zoning regulations, (Companion bill is H.B. 423.) S.B. 980 (Carona} - Buik/im! Moratoria: this bill is the same as H.B. 2117 above. S.B. 996 (Undsay) - Authority of local Governments to M€regate Purchase and Sell Enel'l!V and Natural Gas: this bill is identical to H.B. 2151 above, Dept Position Last Action Committee Development Support left Pending 4/17/01 Senate Intergovernmental Relations Development Hearing set for Senate Business & Commerce 4/19/01 Administration Referred to Committee Senate Business & Commerce 3/1/01 H.B. 2318 (Solomons} - Purchasin!!: would allow a city to receive sealed bids or sealed proposals through the Internet or by other electronic means if the city imple- ments certain security measures regarding electronic transmissions. H.B. 2391 (B. Turnen - Undel'l!rOund Excavations: would amend the "one-call" or "dial-before-you-dig" statute to increase the penalties on excavators who violate the provisions of the statute. H.B. 2411IRitteñ - Buildin!! Codes: would provide that the International Residential Code shall be used throughout the state but would allow a city to adopt local amend- ments to the Code. 7 . D vis - C e or en! Offi : would allow the state board of prescribe continuing education requirements for code enforcement officers. H.B. 2448 (Dukes} - EmDlovment Tests: would require that any test administered by a fire department or law enforcement agency must be reviewed by the Commission on Human Rights to ensure that the test doesn't discriminate on the basis of race, color, disability, religion, sex, national origin or age unless discrimination is a result of a bona fide occupational qualification. Public Works Support Sent to House Calendars 4/2/01 Development Support Set on House floor calendar 4/19/01 Development Set on House/local Consent 4/20/01 Police & Fire Sent to House Calendars 4/12/01 H.B. 2486 (Clark} - ComDetitive Bidding: would: (1) expand the definition of high technology procurement to include a subscription to an Intemet service provider a computerized database subscription service or any other Internet-based or computer- based information storage processing acquisition or subscription service; (2) provide that purchases made under the terms of an interlocal agreement are exempt from the competitive bidding requirements; (3) allow a city to post notice of its request for bids on a city Web site; (4) provide criteria for how to determine when a bidder is the "lowest responsible bidder," (5) allow a city to disqualify a person from bidding on city contracts based on the person's prior contracting history with the city; (6) allow a city to conduct its entire competitive bidding process online on the city's Web site; and (7) allow cities to engage in reverse auction procedures with an online bidding or auction service. H.B. 2509 lDanberl!l - Elections: would: (1) require that a run-off election could not be held later than 45 days after the date of the final election canvass unless a home rule city's charter provides otherwise; (2) allow a person wooong at an election polling place ite ute an affidavit attesting to the identity of a voter if the voter does not have any o f of identification to show at the polling place; (3) allow a permanent city who is not a qualified voter of the city to serve as early voting clerk or deputy early voting clerk; and (4) require that a ballot with a written-in candidate in any city election may not be counted unless the name appears on the list of write-in candidates (Note: current law only requires write-in names to appear on a list at the general city election,) City Secretary Referred to Senate Committee 4/17/01 Senate State Affairs Page 21 State Legislation Affecting NRH (continued) Pending Legislation H.B. 2528 (Junell) - Purchasing: would amend the Electronic Procurement Market- place Act to allow cities to purchase goods and services through an electronic network on the Internet in conjunction with the General Services Commission (GSC) and would require the GSC to adopt guidelines specifying the circumstances under which it would be advantageous for a local government to purchase goods or services under a contract made by another local government or a state agency other than the GSC. Dept. Position Last Action Committee Finance Support Left Pending 4/9/01 House State Affairs H.B. 2792 (Raymond) - Elections: would allow a city to begin early voting by personal City Secretary appearance for a city election at least 30 days but not more than 17 days before the election. Support Hearing set for 4/18/01 House Elections Dun n T Abatem nt: would allow cities to grant tax abatements on personal property located on leased real property. (Note: this bill would reverse Attorney General Opinion JC-0300 which concluded that lessees of tax-exempt real property may not participate In tax abatement Unlike H.B. 1448 which Is similar this bill does not require that the leased land itself be tax-exempt.) S.B. 986 (Duncanl - Tax Abatement: would allow cities to recover abated property Development taxes when the property owner fails to create the number of new jobs specified in the agreement Voted favorably as substituted 4/17/01 Senate Intergovernmental Relations S.B. 1018 (Van de Puttel - Elections: would: (1) require that a candidate for election City Secretary must file an application for a place on the ballot at least 45 days before the earliest allowable date for the beginning of early voting by personal appearance; and (2) require a city that has a deadline for filing for election that is prescribed by another law to adjust its time line to comply with the 45-day time period set out above. Referred to Committee 3/5/01 Senate Intergovernmental Relations S.B. 1123 (Armbristerl - Taxes: would grant the Texas attorney general the exclusive Budget & Research right to bring a lawsuit to recover delinquent sales and use taxes Imposed by a city; and would repeal the Tax Code provisions that allow a city acting through Its city attorney to bring a lawsuit for collection of delinquent sales and use taxes. Refe!Ted to House Committee 4/ 17/01 House Ways & Means S.B. 1170 (Madlal - Platting: would provide that a division of land into parts greater Development than 10 acres Is exempt from the platting requirements of Section 212,OO4(a) of the Local Government Code. (Note: under current law the exemption applies to a division of land into parts greater than five acres.) Referred to Committee 3/8/01 Senate Intergovernmental Relations S.B. 1177 (Gallel!os) - MuniciDal Court Costs: would allow a city to implement an Municipal Court electronic system to collect fines, fees and court costs through the Internet; and would allow a city to Impose a processing fee to cover the cost of providing this electronic Internet system. S.B. 1182 !Wentworthl - Public Information: would amend the Texas Public Informa- tion Act to provide that the Texas Rules of Civil Procedure the Texas Rules of Evidence .T exas Disciplinary Rules of Professional Conduct are not considered to be laws make certain categories of information confidential under the Public informa- ti ; and would codify the Texas Supreme Court decision in the City of Geol'lfetown v Austin American Statesman case relating to providing an attorney-client/work product privilege for information relating to completed reports audits evaluations or investiga- tions. (Please see page 2 of the February 23 2001 TMllegislatlve Update.) Referred to Committee 3/8/01 Senate Intergovernmental Relations Set on Senate Intent Calendar 4/18/01 Page 22 State Legislation Affecting NRH (continued) S.B. 1204 (Shaoiro) - City Streets: would: (1) create a joint interim legislative commit- Public Works tee to study the availability and adequacy of funding sources for the construction repair and maintenance of city streets; and (2) require the committee to analyze these issues and prepare a final report to full legislature not later than November 1, 2002. (Note: this bill is similar - but not identical- to H.B. 2161,) S.B. 1208/West) - Municioal Court Costs: this bill is the same as H.B. 2733 above. Municipal Court Support Referred to Committee 3/8/01 Senate Administration Referred 3/8/01 Senate Jurisprudence H.B. 2842 (Coleman) - Tax increment Financing: would pennit a local government Finance corporation that is administering a tax increment financing zone to contract with the city for funding and wouid pennit a city to reduce its funding of a tax increment financing zone to reflect the retirement of bonds and other debt Not heard 4/4/01 House Ways & Means H.B. 2951 /Walkeri - Pennits: would amend Section 245 of the local Government Development Code (the so-called "permit vesting statute") to provide that: (1) a "project" includes a subdivision of land for development and all land within a piat final plat preliminary plan site plan and planned unit development and all uses permitted by the applicable land use regulations; and (2) a change in the use of land within a preliminary plat final plat preliminary plan site plan or planned unit development is not a new project if the new use is permitted by right or under special conditions or approval under the land use regulations. (Note: the effect of this bill would be to provide landowners with even more vested rights in pennits even when the landowners change the use of the land.) left Pending 4/2/01 House land & Resource Management 005 resti - T Abetem nt: would eliminate the 90-day deadline that other Development its face when deciding whether to join in city-initiated tax abatement; and w rify that such additional tax abatements are subject to the same requirements as city tax abatements. H.B. 3078 (Clarki - Joint liability: would provide that a city is not vicariously liable because the city participates in a joint enterprise. leftPending4/4/01 House Ways & Means left Pending 4/4/01 House Civil Practices H.B. 3143 /Armbristerl - Sales Taxes: would: (1) clarify that cities that enter into Budget & Research strategic partnerships with certain water districts under Chapter 43 of the local Govem- ment Code may collect sales and use taxes within the limited purpose annexation areas pursuant to that chapter; (2) provide that the municipal sales tax laws under the Tax Code apply to such sales taxes within limited purposes annexation areas; (3) make various changes affecting the election to abolish a crime control and prevention district; (4) provide that cities may not abate sales taxes within neighborhood empowennent zones but may grant saies tax refunds; (5) provide for the abolition of a county develop- ment district's sales tax if it has not been collected for twelve months; (6) clarify the comptroller's refund procedures for sales taxes collected within municipal tax abate- ment zones; (7) provide that the installation of tangibie personal property is included in its taxable sales price; (8) provide that the sale of a taxable item in electronic rather than physical fonn does not alter its sales tax status; (9) provide a sales tax exemption for packaging and wrapping supplies used by laundries and dry cleaners; (10) permit tax-exempt religious educational and public service organizations to hold additional tax-free sales and auctions; (11) provide a sales tax exemption for dietary supplements; (12) provide a sales tax exemption for gas and electricity used in the production of movies video or audio recordings; (13) provide a sales tax exemption for gas and elec- tricity used in timber operations including irrigation; (14) provide a saies tax exemption for photographic props; (15) provide a sales tax exemption for the sale of motion picture video and audio master tapes; and (16) authorize a city that holds its own sales tax pennit to retain the municipal share of its sales taxes without having to remit it to the comptroller. and audio master tapes; and (16) authorize a city that holds its own saies tax pennit to retain the municipal share of its sales taxes without having to remit it to the comptroller. left Pending 4/11/01 House Ways & Means Page 23 State Legislation Affecting NRH (continued) Pending Legislation ~ Position Last Action Committee H.B. 3182 (Danbul'l!l - Elections: would: (1) delete the May uniform election date and City Secretary replace it with the fourth Saturday in March; (2) require a city that uses the May date to change its general election date by December 31, 2001; and (3) prohibit a rental charge for use of a public building to conduct an election if the election is held on a day the building is not usually open for business but would allow a . reasonable" charge for reimbursement of the actual expenses resulting from the use of the building. Oppose Left Pending3/28/01 House Elections H.B. 3201 (Brimer! - PI'oÐerw Taxes: would include certain child care facilities in the Budget & Research list of charitable organizations eligible to receive property tax exemptions under Section 11.18 of the Tax Code. Referred to Committee 3/14/01 House Ways & Means H.B. 3204 Uonesl - Internet: would allow a city to provide or contract with a vendor to Rnance provide access to information through the Internet; and would allow a city to collect or contract with a vendor to collect taxes fines fees and court costs through the Internet. SB 201 considered in lieu of House County Affairs H.B. 3272 (Oliveiral - Sales Taxes: would extend the current sales tax holiday on Budget & Research clothing and footwear by one week. Oppose left Pending 3/28/01 House Ways & Means H.B. 3273 (Oliveiral - Sales Taxes: would include certain writing instruments in the Budget & Research sales tax holiday but would not provide for a local option on those items. Oppose left Pending 3/28/01 House Ways & Means 74 r 'ra - Sales T : would include certain paper products in the sales Budget & Research ay but would not provide for a local option on those items. Oppose Left Pending 3/28/01 House Ways & Means H.B. 3275 (Oliveiral - Sales Taxes: would include calculators rulers and other similar Budget & Research school supplies in the sales tax holiday but would not provide for a local option on those items. Oppose Left Pending 3/28/01 House Ways & Means H.B. 3276 (Oliveri - Sales Taxes: would include certain reference books costing less Budget & Research than $25 in the sales tax holiday but would not provide for a local option on those items. Oppose Left Pending 3/28/01 House Ways & Means H.B. 3277 (Oliveiral - Sales Taxes: would include certain arts and craft items in the Budget & Research sales tax holiday but would not provide for a local option on those items. Oppose Left Pending 3/28/01 House Ways & Means H.B. 3278 (OIlveiral - Sales Taxes: would include certain backpacks in the sales tax Budget & Research holiday but would not provide for a local option on those items. Oppose Left Pending 3/28/01 House Ways & Means H.B. 3279 (Oliveiral - Sales Taxes: would include sewing supplies in the sales tax Budget & Research holiday but would not provide for a local option on those items, Oppose Left Pending 3/28/01 House Ways & Means H.B. 3280 (Oliveiral - Sales Taxes: would include certain child safety seats and other Budget & Research child safety products in the sales tax holiday but would not provide for a local option on those items. Oppose left Pending 3/28/01 House Ways & Means S.B. 1398 (Fraser! - Zoning: would prohibit a city from changing a previously enacted zoning classification unless the owner of the property waives the right to object to the change or the city compensates the property owner for any diminution in value that r.. from the change as determined by an agreement with the property owner or a c . ation action under Chapter 21 of the Texas Property Code. S.B. 1405 (Madlal - Peace Officer Salaries: would provide that a peace officer whose Police annual salary is less than $30,000 shall get from the state a salary supplement in an amount that raises the salary to $30,000; and would prohibit a city from reducing salaries or pay scales in order to use the state supplements. Referred to Committee 3/13/01 Senate Finance Page 24 State Legislation Affecting NRH (continued) Pending Legislation Dept. Position H.B. 2329 (Solis! - Public Finance: would provide that after a city has issued any type Finance of public security the city is required to hire local legal counsel to handle any legal services needed in connection with the issuing of the public security. H.B. 2332 (Uresti) - Vital Statistics Records: would allow a local register to collect an City SecretaI)' additional fee of not more than one dollar for a birth or death certificate and use the revenue for preservation of vital statistics records maintained by the local register. H.B. 2863 (Farabee! - Comnetitive Bidd¡n~: would amend the Certificates of Obliga- Finance tion Act by raising the competitive bidding threshold from $15,000 to $25,000 for contracts involving the issuance of certificates of obligation. H.B. 2912 (Bosse! - Texas Natural Resource Conservation Commission fTNRCC): Environmental Services this bill is the TNRCC "sunset" bill designed to continue the life of the agency. Among other things this bill would: (1) prohibit a person licensed, certified, registered or permitted by the commission from being a commissioner; (2) require commissioners and each commission staff member who has discretional)' authority over any aspect of permitting, enforcement. rulemakìng or other regulatol)' matter pending before or within the jurisdiction of the commission to keep a written record of each contact with any person other than a commissioner or staff member regarding a regulatol)' matter; (3) require the commission to maintain a file on each written complaint filed with the commission; (4) require the commission to provide each complainant with the agency's complaint policies and procedures and require the commission to notify each com- plainant and each person that is the subject of a complaint quarterly to tell them the status of the complaint investigation; (5) require the commission to share complaint information with local enforcement officials and to provide training for a fee for local .ent officials in how to deal with complaints; (6) make the executive director's p s in contested cases discretional)' based on policies to be developed by the commission; (7) prohibit the executive director from rehabilitating the testimony of a witness; (8) prohibit the executive director from assisting a permit applicant in meeting its burden of proof except for a type of pennit the commission has designated as quali- fying for assistance; (9) allow the public interest counsel to recommend legislative and rule changes and to employ outside technical support; (10) allow the commission to initiate an enforcement action based on evidence received from a private individual; (11) change numerous notice requirements for permits and approvals requiring more notice and more information; (12) prohibit the disputing of a fee until it has been paid in full; (13) allow the commission consistent with the general appropriations act to trans- fer fees from one activity to another activity; (14) establish components and standards for detennining the compliance histol)' of entities and permittees; (15) require develop- ment of rules to use compliance histol)' in commission decisions on permits and en- forcement; (16) prohibit the commission from announcing an inspection unless the person to be inspected has a good compliance history; (17) prohibit an entity from participating in flexible permitting unless it has a better than average compliance his- tOI)'; (18) require the commission to review solid waste permits every five to seven years to assess compliance histol)'; and (19) allow the commission to certify water treatment specialists who install utility connections in residential commercial or industrial facili- ties. (Companion bill is S.B. 318.) H.B. 2933 (Chavez! - Animals: would: (1) require a city to inspect all circuses carnivals Environmental Services and zoos to ensure that they comply with the standards adopted by the Texas Depart- ment of Health; and (2) require a city to enforce state regulations Texas Department of Health rules and local animal regulations as they effect the operators of a circus carni- valor zoo. H.B. 3297 (Dukes! - Environmental ComDliance HistorY. would require the TNRCC to Environmental Services establish a set of components and standards for evaluating the compliance histOI)' of applicants and permit holders and to thereafter utilize compliance histOI)' as a deter- mining factor in permitting enforcement inspections renewals and amendments, H.B. 3305 (Martinez-Ascher! - Elections: would: (1) require that a candidate for City SecretaI)' election must file an application for a place on the ballot at least 45 days before the e.llowable date for the beginning of early voting by personal appearance; and (2) r . city that has a deadline for filing for election that is prescribed by another law to st its time line to comply with the 45-day time period set out above. (Companion bill is S.B. 1018.) Page 25 Last Action left Pending 4/5/01 Referred to Committee 3/5/01 Sentto House local! Consent 4/11/01 Set on House floor calendar 4/19/01 left Pending 4/18/01 left Pending 3/20/01 left Pending 3/28/01 Committee House Financial Institutions House Public Health House County Affairs House Environmental Regula- tions House Elections State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action H.B. 3307 IMenendez) - Platting: would provide that a division of land into parts Development greater than ten acres is exempt from the platting requirements of Section 212.oo4(a) of the local Government Code. (Note: under current law the exemption applies to a division of land into parts greater than five acres. S.B. 1170 is verysimilarto this bill.) Referred to Committee 3/14/01 H.B. 3347 IGrav) - Prooertv Taxes: would make numerous changes to the property tax Budget & Research laws to assist in collection of delinquent taxes including: (1) permit appraisal districts to share othelWise confidential information with taxing units for collection purposes; (2) pennit the chief appraiser to make certain corrections to the appraisal roll; (3) clarify that cash notes royalties and certificates of deposit are personal property subject to seizure for delinquent taxes; (4) permit police officers to seize property pending a tax sale; (5) provide civil immunity to third parties surrendering property subject to a tax sale; and (6) permit injunctive relief on behalf of a taxing unit in a tax suit. Hearing set for 4/18/01 H.B. 3353 IS. Tumen - Undel'l!round Excavations: among other things would provide Public Works that an operator contacted by the notification center must notify the center of the opera- tor's plans to mark or not mark the underground facilities; would provide that location markers must be within 18 inches of the underground facility or the excavator will not be liable for damages; and would provide that an excavator who is following the law will not be liable to an operator who doesn't participate in the notification program. Referred to Committee 3/15/01 H.B. 3362 IMenendez) - Public Imorovement District IPID): would allow a county to Development create a PID that could include municipal territory without approval of the city. (Note: this bill is identical to H.B. 3172 and is a companion to S.B. 1716.) Referred to Committee 3/15/01 H.B. 3364 IMenendez) - Prooertv Taxes: would allow disabled persons to defer or Budget & Research abate lawsuits against them for the collection of delinquent homestead property taxes, ( is bill is similar to S.B. 1542 below.) Referred to Committee 3/15/01 H. 88 IOliveira) - Sales Taxes: would provide that the sale of a taxable item in Budget & Research electronic rather than physical form does not alter its sales tax status. (Note: this bill is similarto a section of S.B. 1125.) Referred to Committee 3/15/01 H.B. 3390 IOliveira) - Sales Taxes: would provide a sales tax exemption for the ma- Budget & Research chinery supplies and equipment used to repair or maintain federal government aircraft. (Note: also see S.B. 1479 below.) left Pending 4/4/01 H.B. 3396 !Bailev\ - Public Emolovees: would allow a public employee to have a Human Resources representative present at any investigative meeting where an adverse employment action may be taken. Referred to Committee 3/15/01 H.B. 3397 IBailey) - Fire Fll!hter Hours: would provide that a fire fighter or fire fighter Fire EMS personnel shall be paid overtime for any work hours exceeding an average of 42.7 hours a week during a 72-day work cycle. (Note: under current law the weekly average is 46.7 hours. Companion bill isS.B. 1577.) H.B. 3422 IKrusee) - land Regulation: would provide that a school district is exempt Development from all municipal land development regulations including regulations relating to aes- thetics maintaining property value and zoning but a school district is required to com- ply with municipal fire safety health and building codes. H.B. 3425 IMerritt) - Prooertv Taxes: would provide a $3 000 property tax exemption Budget & Research on the homesteads of certain retired school employees including teachers. (Note: this bill would go into effect only if the Texas Constitution is amended by HJ.R. 104 below.) Referred to Committee 3/15/01 Not Heard 3/26/01 Referred to Committee 3/15/01 H.B. 3429 IMerritt) - Gas Utilitv Regulation: would transfer gas utility regulation from Administration the Railroad Commission to the Public Utility Commission. Referred to Committee 3/15/01 Committee House land & Resource Management House Ways & Means House Public Safety House County Affairs House Ways & Means House Ways & Means House Ways & Means House Urban Affairs House Urban Affairs House land & Resource Management House Ways & Means House Energy Resources Page 26 State Legislation Affecting NRH (continued) Pending Legislation H.B. 3457 (Kitchen) - Prooerl;y Taxes: would permit an appraiser to limit the increase of certain residential appraisal values to no more than the inflation rate. H.B. 3461 (A. Revna) - Juveniles: would: (1) allow truancy complaints to be filed in municipal court; (2) allow municipal courts to hold parents and juveniles in contempt of court for failure to abide by court orders regarding school attendance; (3) allow a city council to employ a case manager for truancy cases in municipal court and apply for reimbursement of the costs from the criminal justice division of the governor's office; and (4) allow a law enforcement agency to take a child into custody for an offense in which a municipal court has jurisdiction over the child other than public intoxication as long as the child is put in a place designated as nonsecure custody. (Companion bill is S.B. 1432.) Dept. Position Last Action Committee House Ways & Means House Juvenile Justice & Family Issues H.B. 3500 (Hinoiosal - Bilinl!ual Pay: would require a city to pay bilingual pay to any fire fighter or pOlice officer who uses an additional language skill that is not part of that person's job description. H.B. 3512 (Hamric) - Failure to ADDear: would amend the statutory provisions that allow a city to contract with the Texas Department of Public Safety (DPS) to deny the renewal of a person's driver's license for failure to appear (FTA) by providing that DPS may no longer deny a driver's license if: (1) the person is acquitted of a charge; (2) the person pays the $30 FTA administrative fee; (3) the city has sent the information relating .1 of a driver's license in error, or (4) the city has purged the FTA information in ce with the city's records retention policy. Budget & Research Referred to Committee 3/15/01 Municipal Court left Pending 4/3101 Human Resources Oppose left Pending 4/11/01 Municipal Court Referred to Committee 3/15/01 H.B. 3528 (Countsl - TNRCC Fees: would: (1) combine wastewater discharge fees with Environmental Services clean river program fees for the purpose of funding the TNRCC's water quality programs; (2) raise the maximum annual fee that cities and other discharge permit holders pay from $25,000 per year to $75,000 per year/per permit; (3) authorize the TNRCC when setting the fees to consider its own reasonable costs for administering water quality management programs and any other programs reasonably related to the activities of fee payers; and (4) repeal the current limitations on the TNRCC's collection of clean river program fees. (Companion bill is S.B. 1025.) H.B. 3540 (Madden) - Economic DeveloDment Coroorations: would allow any number of persons who are not employees officers or members of the governing body of the city to be members of the board of directors of a 4A economic development corporation. H.B. 3548 (Chisum) - Relil!lDus Orl!anlzations: would provide that if a city permits religious assembly in both residential and commercial areas the city shall enforce only the least restrictive site development and zoning regulations on all religious organiza- tions within the city. H.B. 3549 (Chisum) - ReI!ulation of School ProDertv: would provide that a city that regulates land development for school shall enforce identical and the least restrictive regulations on all schools public and private. H.B. 3553 tRa)'lllOnd) - Franchise Fees for POlitical Subdivisions: would prohibit a city from collecting franchise fees from political subdivisions that use the city's rights-of- way to provide electric, water, sewer or gas utility service. H.B. 3579 (Hilderbran) - ProDertv Taxes: would establish stricter hearing notice re- quirements when a city council intends to vote to tax otherwise exempt tangible per- sonal property that is not producing income. - Oppose Set on House local Consent Calendar 4/17/01 Parks Referred to Committee 3/15/2001 Development Referred to Committee 3/15/01 Development Referred to Committee 3/15/01 Administration Referred to Committee 3/15/01 Budget & Research Referred to Committee 3/15/01 Page 27 House Urban Affairs House Public Safety House Urban Affairs House land & Resource Management House land & Resource Management House land & Resource Management House Ways & Means State Legislation Affecting NRH (continued) Pending Legislation Dept. Position Last Action ,- H.B. 3580 {Gravl - Sales Taxes: would provide a sales tax exemption for certain fax or Budget & Research Oppose Referred to Committee House Ways & Mean e-mail information selViœs with fewer than 750 subscribers. (Companion bill is S.B. 3/15/01 1678 below.) H.B. 3594 {Oliveiral - Sales Taxes: would provide a phased-in sales tax exemption for Budget & Research Oppose Hearing set for House Ways & Means equipment used to provide broadband selVice in strategic investment areas. (Note: this 4/18/01 bill is similarto S.B. 1550.) H.B. 3603 {CaDelol - Police/Fire Civil SelVice: would amend Chapter 143 of the local Human Resources Voted favorably as House Urban Affairs Government Code (relating to cities that have adopted police and/or fire civil service) to substituted 4/11/01 provide that if a person's line of duty illness or injury leave is not extended after one year the person may retire on pension until able to return. (This bill is the same as H.B. 2025.) H.B. 3610 {CaDelol - Food Service Workers: would repeal the statutOI)' provisions that Environmental Services Referred to Committee House Public Health provide that a food selVice worker who is employed by a single entity is considered to 3/15/01 have met the local health jurisdiction's training and testing requirements only as to food selVice performed for that entity and would provide that the Texas Board of Health shall specify the course content required for accreditation and training programs for food selVice workers. (Companion bill is S.B. 1373.) S.B. 1408 {Madlal - Affordable Housing: would: (1) create the Texas Affordable Hous- Development Referred to Committee Senate Intergovernmental ing Partnership Program to promote the production of affordable housing and inspire 3/13/01 Relations local governments to muster the resources necessary to expand the supply of affordable housing; (2) establish a mechanism to create a local Affordable Housing Advisory Com- mittee; (3) direct each city to review its policies ordinances and regulations and recom- mend incentive strategies to encourage affordable housing; (4) create an affordable _trust fund made up of revenue collected by municipal courts (see below); (5) hat a city must have a local housing assistance plan in order to receive money from the fund; (6) impose a $30 fee on each traffic violation; and (7) provide that 15 percent of the resulting revenue shall be spent on job training for persons released by the Texas Youth Commission and that 85 percent shall go into the affordable housing trust fund. S.B. 1458 {Duncan! - Electronic Government Prol!ram Manal!ement: would: (1) Information Services Referred to Committee Senate State Affairs create an electronic government program management office to guide promote and 3/13/01 facilitate the implementation of electronic government projects; (2) allow the General Services Commission to contract for the use of a consolidated telecommunications system with a collaborative community computer network in which one or more pOlitical subdivisions participate; and (3) allow the formation of an advanced electronic procure- ment system over the internet called "Tex-Mall" in which state agencies and local governments could procure goods and selVices. S.B. 14 71 {Ol!den! - Sales Taxes: would create a sales tax exemption for student meal Budget & Research Not heard 4/11/01 Senate Finance plans provided by institutes of higher education. (Companion bill is H.B. 3262.) S.B. 1419 {Madia! - Sales Taxes: would provide a sales tax exemption for the machin- Budget & Research Hearing set for Senate Finance ery supplies and equipment used to repair or maintain federal government aircraft. 4/19/01 (Note: this bill is substantially the same as H.B. 3390 above.) S.B. 1480 {Madia! - Tax Abatement and Increment Financing: would: (1) increase the Development Not Heard 4/17/01 Senate Intergovernmental number of non-municipal board members on the board of directors of a reinvestment Finance Relations zone; (2) provide that the chairman of the zone board is appointed by the other board members rather than the city; (3) authorize a $1 000 application fee for tax abatement requests; (4) provide that tax abatement agreements are effective only after the required improvements in the reinvestment zone are substantially completed; and (5) eliminate the go-day deadline that other taxing units face when deciding whether to join in a city- initiated tax abatement. S.B. 1512 {Lucio! - Purchasing: would require the Texas General SelVice Commission Finance Hearing set for Senate Business & Commerce .re a list of multiple award contracts that have been competitiveiy bid by state 4/19/01 . , and local governments and would allow a state agency or local government to pu se goods or selVices directly from a vendor under a contract listed on the sched- ule. Committee Page 28 State Legislation Affecting NRH (continued) Pending Legislation S.B. 1544 /West} - Health and Safety Ordinances: would: (1) allow a city to receive information from birth and death records if the information is used only to identify a property owner to whom the city must give notice of a violation of a state statute or city ordinance; (2) provide that a city must exercise "due diligence" to determine the iden- tity of a property owner or lien holder whose property is in violation of a city building standards regulation; (3) provide that the city may search several different types of public records in order to establish that due diligence has been met; and (4) allow a city to adopt an administrative adjudication process to assess administrative penalties for violations of city ordinances that regulate substandard structures. (Companion bill is H. B. 1833.) S.B. 1551 (Madia) - Regional DeveloDment CDordlnator: would require the Texas Department of Housing and Community Affairs to have five regional development coor- dinators to: (1) assist local communities in determining how to address affordable housing and community development needs; (2) establish regional planning and re- source-sharing partnerships; and (3) facilitate the leverage of local state and federal funds. (Companion bill is H.B. 2715.) S.B. 1554 !Barrientos} - ProDertv Taxes: would: (1) provide a property tax exemption for certain organizations engaged primarily in pe¡forming charitable functions; and (2) provide that if certified by the state comptroller the exemption must be granted by the appraiser. (Note: the current tax exemption for a charitable organization requires the organization to exclusively engage in charitable activities as opposed to "primarily" as this bill provides. Companion bill is H.B. 1689.) Dept. Position Last Action Committee Development Voted favorably 4/17/01 Senate Intergovernmental Relations Development Referred to Committee 3/14/01 Senate Intergovernmental Relations Budget & Research Referred to Committee 3/14/01 Senate Intergovernmental Relations 22 Barrl n - Am m id: among many other things would provide that: (1) a municipal pOlice officer may inspect an amusement ride; (2) the officer may shut down an unsafe ride or a ride for which the operator has no inspection sticker or insurance certificate; and (3) the law officer shall have no liability unless the officer's action involves gross negligence or malice. S.B. 1635 (Bernsen) - Collective Bal'l!alnlng: would create collective bargaining rights for fire fighters complete with "good faith" bargaining mediation or arbitration judicial enforcement and much much more. Human Resources Not Heard 4/17/01 Senate Intergovernmental Relations S.B. 1759 (Armbrister! - City Utilities and Bonds: would: (1) permit a city over 100,000 in population as opposed to 1.2 million or more as is current law to sell a natural gas utility without holding an election; (2) permit cities over 50,000 to pledge city sales taxes to pay certain certificates of obligation; (3) authorize Issuers of public securities including cities to make private sales of securities; (4) permit issuers of securities to establish certain terms of the sales of their securities; (5) establish that a single meeting of a governing body including a city council is sufficient to call for the election for or to authorize the issuance of securities such as bonds and stipulate that this provision would supercede any stricter city charter requirement; (6) require that registrars of public securities must keep their registry records in the state only at the request of the issuing entity; (7) provide issuers of public debt more flexibility in issuing refunding bonds; (8) permit issuers of refunding bonds to deposit repayment funds with a trust company or commercial bank; (9) clarify that sports and community venue proj- ects are eligible to issue certain public debt; and (10) authorize governing bodies to issue securities to finance interest rate locks and interest rate hedging agreements. (Note: this bill is similar to H.B. 1914,) e Page 29 " . e Present: e Absent: MINUTES OF THE PRE-COUNCIL MEETING OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE PRE-COUNCIL ROOM AT CITY HALL, 7301 NORTHEAST LOOP 820 - APRIL 09, 2001 - 5:30 P.M. Charles Scoma Lyle E. Welch Frank Metts, Jr. JoAnn Johnson Don Phifer T. Oscar Trevino, Jr. Larry J. Cunningham Randy Shiflet Steve Norwood Greg Vick Patricia Hutson Alicia Richardson Rex McEntire Paulette Hartman Mike Curtis Jimmy Cates Jim Browne Larry Koonce John Pitstick Jenny Kratz Ashley Stathatos Andy Jones Tom Shockley Mayor Mayor Pro T em Councilman Councilwoman Councilman Councilman City Manager Deputy City Manager Assistant City Manager Managing Director Community Services City Secretary Assistant City Secretary Attorney Assistant to the City Manager Public Works Director Street Superintendent Parks & Recreation Director Finance Director Director of Development Communications Director Marketing & Research Coordinator Fire Chief Police Chief Russell Mitchell Councilman ITEM DISCUSSION ASSIGNMENT CALL TO ORDER Mayor Scoma called the meeting to order at 5:34 p.m. DISCUSS ITEMS None FROM REGULAR APRIL 09, 2001 CITY COUNCIL AGENDA IR 2001-050 Mr. Burk Collins and Mr. Stephen King of North UPDATE OF Hills Mall updated council on the mall NORTH HILLS development and possible tenants. Mr. King MALL advised Council North Hills Mall would not DEVELOPMENT compete with Northeast Mall, but complement it. PLAN North Hills Mall is being promoted as an entertainment theme. NAN IR 2001-051 Mr. John Pitstick advised Council of Aaaressive f e PRESENTATION REGARDING AGGRESSIVE SKATERS ASSOCIATION WORLD CHAMPIONSHIPS AT NORTH HILLS MALL - OCTOBER 19-21,2001 IR 2001-046 DISCUSS REQUEST FOR TRAFFIC STUDY - NORTH TARRANT AND DAVIS RESIDENTIAL AND COMMERCIAL AREAS Pre Council Minutes April 09, 2001 Page 2 Skaters Association desire to have North Richland Hills host the 2001 ASA World Championships at North Hills Mall. The basic proposal to host the 2001 ASA World Championships requires the City of North Richland Hills to make guarantees for the event. The host city is responsible for $60,000 in cash and approximately $80,000 for in-kind services for the three day event including security, permits, bleachers, maintenance, setup and hotel rooms. The city may sell two premier sponsorships at $80,000 each to recoup expenses, in addition to having numerous local sponsors. The decision to move forward with the ASA World Championships would be tied to an agreement between North Hills Mall and Eisenberg's Skate Park to construct a $2 million extreme skate park at North Hills Mall. Staff believes this event would be a great way to kick off the new entertainment theme at North Hills Mall. Ms. Vicki Eisenberg representing Eisenberg's Skate Park and Rick Bratman with Aggressive Skaters Association were available to answer questions. Mayor Scoma asked staff for additional information on the possibility of more than two sponsors to help recoup the city's cost. Mr. Pitstick responded that additional sponsors could be secured. Council consensus was favorable for city participation and to seek reimbursement of city's portion with sponsorship. Staff to bring back before Council for action at the April 23 City Council meetin . J. Pitstick/So Norwood Mr. Steve Norwood advised Council of Councilman Tolbert's concern regarding traffic issue in North Tarrant-Davis Blvd area. Councilman Tolbert would like for Council to consider exploring a traffic study that will look at the entire area as it relates to access. Recently, there was significant discussion at the comprehensive plan public hearing regarding various ways to access North Tarrant and Davis Blvd. Staff believes it would be advantageous for the cit to look at the overall area and not a e IR 2001-049 MEADOW LAKES DRIVE, TRAFFIC CALMING Pre Council Minutes April 09, 2001 Page 3 particular retail development as it impacts North Tarrant and Davis. Staff is seeking direction from Council as to whether or not to hire an outside consultant to study the area. Councilman Trevino advised staff and Council that the city needs to be ready to act when the study is completed. He does not want the study completed and tucked away for a later date. Mayor Scoma believes a city study should be done overall. Mr. Norwood advised Council staff can get a proposal on the next council agenda for 5 or 6 intersections. Mayor Scoma asked staff to bring back befo.re Council for the whole city, but to have it in sections. Mr. Norwood advised Council staff could bring back North Tarrant and Davis at the next council meeting. If Council wants the whole city then it will be at least two months before staff can bring' it back to Council. Council consensus was for staff to bring North Tarrant and Davis for Council consideration at the April 23 meeting. The whole city can be brou ht back before Council later. Mr. Mike Curtis advised Council staff has received concerns from citizens regarding speed of traffic along Meadow Lakes Drive. Due to recent development adjacent to Loop 820, there has been an increase of traffic on Meadow Lakes Drive. Road humps are the most common method used to slow traffic. However, Meadow Lakes Drive is a collector street, and city ordinance does not allow road humps to be constructed. Mr. Curtis presented the following calming alternative for Council consideration. Rumble strips Flashing beacons Raised pavements . table to s S.Norwood/M.Curtis e Pre Council Minutes April 09, 2001 Page 4 · raised crosswalk) - Restriping · from 4 to 3 lanes · strip shoulder - Chokers or angle points - Traffic circle Mr. Curtis informed Council the less expensive options being the rumble strips or flashing beacons. Council consensus was to restripe Meadow Mike Curtis Lakes Drive. RECESS Mayor Scoma recessed the Pre-Council meeting at 6:50 p.m. to the regular City Council meeting. The Pre-Council meeting to continue after the reqular Council meeting BACK TO ORDER Mayor Scoma called the Pre-Council meeting back to order at 7:49 p.m. C 2001-048 Mr. Greg Vick advised Council the deadline for ISCUSS filing legislation was Friday, March 9th. LEGISLATIVE However, staff has added several bills to the list UPDATE - 77TH since the last update. Mr. Vick updated the LEGISLATURE Council on the following Legislative Bills: HB 2667, HB 1362, SB 243, HB 1115, SB 1275, HB 2291, SB 108, and SB 339. NAN ADJOURNMENT Mayor Scoma announced at 7:59 p.m. that the Council would adjourn to Executive Session for consultation with City Attorney as authorized by Government Code §551.071 for Davis vs. NRH and Buckingham vs. NRH. The Executive Session adjourned at 8:23 p.m. with no action required. Charles Scoma - Mayor .TTEST: Patricia Hutson - City Secretary " e e e MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 - APRIL 9, 2001 - 7:00 P.M. 1. CALL TO ORDER Mayor Scoma called the meeting to order April 9, 2001 at 7:00 p.m. ROLL CALL Present: Charles Scoma Lyle E. Welch Frank Metts, Jr. JoAnn Johnson Don Phifer Joe D. Tolbert T. Oscar Trevino, Jr. Mayor Mayor Pro Tem Councilman Councilwoman Councilman Councilman Councilman Absent: Russell Mitchell Councilman Staff: Larry J. Cunningham Randy Shiflet Steve Norwood Greg Vick Patricia Hutson Rex McEntire City Manager Deputy City Manager Assistant City Manager Managing Director of Community Services City Secretary Attorney 2. INVOCA TION Girl Scout Troop1262 gave the invocation. 3. PLEDGE OF ALLEGIANCE Girl Scout Troop 1262 led the pledge of allegiance. 4. SPECIAL PRESENTATIONS A. PROCLAMATIONS , e e e City Council Minutes April 9, 2001 Page 2 · NATIONAL ORGAN AND TISSUE DONOR AWARENESS WEEK Mayor Scoma presented proclamation to Ms. Carol Metker, volunteer for LifeGift Organ Donation Center, recognizing National Organ and Tissue Donor Awareness Week. · INTERNATIONAL BUILDING SAFETY WEEK Mayor Scoma presented to North Richland Hills Building Official, Ed Dryden, and Building Staff, Penny Peterson, Darren Williams, Tim Horvath and Lance Thornhill, a proclamation recognizing International Building Safety Week. B. CERTIFICATE OF APPRECIATION TO NORTH RICHLAND HILLS POLICE DEPARTMENT Ms. Mary Lee Hafley and Lisa Estrella, representatives from the Women's Shelter, presented to Chief Tom Shockley, a certificate of appreciation to the North Richland Hills Police Department. 5. REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA None. 6. APPROVAL OF CONSENT AGENDA ITEMS APPROVED A. MINUTES OF THE PRE-COUNCIL MEETING MARCH 26, 2001 B. MINUTES OF THE CITY COUNCIL MEETING MARCH 26, 2001 C. GN 2001-036 APPROVE "NO PARKING ANYTIME" ZONE ON MEADOW LAKES DRIVE - ORDINANCE NO. 2550 D. GN 2001-037 MAY COUNCIL MEETING DATES Councilwoman Johnson moved, seconded by Mayor Pro Tem Welch, to approve the Consent Agenda. Motion to approve carried 6-0. , e e e City Council Minutes April 9, 2001 Page 3 7. GN 2001-038 CONDUCT PUBLIC HEARING FOR 27TH YEAR COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM Ms. Paulette Hartman, Assistant to City Manager, briefed the Council on Agenda Items No. 7 and 8. Council was advised that the City Council is required to hold a public hearing to receive comments and input from citizens on the proposed 27th year (2000-2001) CDBG project. The proposed 27th year CDBG project is a continuation of the reconstruction of Susan Lee Lane from Maplewood to Lola Drive. The 26th year CDBG project started the reconstruction of Susan Lee from Loop 820 to Maplewood. The project will be funded with the $292,800 27th CDBG allocation, $221,225 of remaining funds from previous CDBG projects and $75,000 from the Drainage Utility Fund. Mayor Scoma opened the Public Hearing and asked for public comments regarding the 27th CDBG program. There being no one wishing to speak, Mayor Scoma closed the Public Hearing. 8. GN 2001-039 APPROVE 27TH (2000/2001) COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - RESOLUTION NO. 2001-029 APPROVED Item was explained with Agenda Item NO.7. Ms. Hartman recommended Council approval of Resolution No. 2001-029 outlining the 27th CDBG program, and approve using $75,000 from the Drainage Utility fund to complete the reconstruction of Susan Lee Lane. Councilman Phifer moved, seconded by Councilman Trevino, to approve GN 2001-039, Resolution No. 2001-029 as recommended by staff. Motion to approve carried 6-0. 9. GN 2001-040 APPOINTMENT OF ALTERNATE TO BEAUTIFICATION COMMISSION APPROVED Councilman Metts moved, seconded by Mayor Pro Tem Welch, to approve the appointment of Ms. Tonya Littlejohn as Alternate to the Beautification Commission, term expiring June 30, 2002. Motion to approve carried 6-0. , e City Council Minutes April 9, 2001 Page 4 10. A. CITIZENS PRESENTATION None. B. INFORMATION AND REPORTS · IR 2001-047 RUFE SNOW DRIVE STATUS REPORT Mr. Mike Curtis, Public Works Director, reported on the status of the Rufe Snow Drive Project. Mr. Curtis advised the condemnation hearings were complete, the City has control of all necessary right of way, and utility adjustments are underway. TxDOT is planning to let the project in July 2001. · IR 2001-052 POLICE DEPARTMENT QUARTERLY REPORT Chief Shockley presented a power point presentation ·of the second quarter 2000101 fiscal year Police Department Report. e · ANNOUNCEMENTS & INFORMATION "A Lotta Night Music Concert Series" will be hosting Teye Viva el Flamenco, guitar and flamenco dancers, on Friday, April 13. The concerts will be lJeld at 7:00 p.m. at Green Valley Park, 7701 Smithfield Road. Early voting for the City Council and Crime Control and Prevention District Elections begins Wednesday, April 18. Voting is at City Hall from 8:00 a.m. to 5:00 p.m. through Tuesday, May 1. 11. ADJOURNMENT Mayor Scoma adjourned the meeting at 7:40 pm. Charles Scoma - Mayor ATTEST: e Patricia Hutson - City Secretary e e e MINUTES OF THE JOINT WORK SESSION WITH THE CITY COUNCIL AND PLANNING & ZONING COMMISSION OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD AT THE FIRE TRAINING CENTER, 7202 DICK FISHER DRIVE - FEBRUARY 19, 2001 - 5:30 P.M. CALL TO ORDER Mayor Scoma called the joint work session to order on February 19, 2001 at 5:35 p.m. ROLL CALL Present: City Council: Charles Scoma Lyle E. Welch Russell Mitchell Frank Metts, Jr. Don Phifer JoAnn Johnson T. Oscar Trevino, Jr. Mayor Mayor Pro Tem Council Member Council Member Council Member Council Member Council Member Planning & Zoning Commission: Don Bowen Chair Timothy Welch, P.E. Commission Member James Laubacher Commission Member ' Richard Davis Commission Member Staff: Larry J. Cunningham Randy Shiflet Steve Norwood Greg Vick Patricia Hutson John Pitstick Greg Dickens Cathy Horton City Manager Deputy City Manager Assistant City Manager Managing Director Community Services City Secretary Director of Community Development Public Works Director Zoning Administrator Absent: Joe Tolbert Doug Blue Ted Nehring Ron Lueck Council Member Commission Member Commission Member Commission Member e e e City Council Work Session Minutes February 19,2001 Page 2 2. DISCUSSION OF COMPREHENSIVE PLAN UPDATE Mayor Scoma advised that they would begin with Item No.3 on the agenda as Mr. Dan Sefko, Dunkin, Sefko & Associates, was not yet present. 3. REVIEW OF PUBLIC INPUT Mr. Pitstick introduced to the City Council and Planning and Zoning Commission, Ms. Cathy Horton, Zoning Administrator. Mr. Pitstick reviewed the letters and survey responses that were received from the public in response to the proposed Comprehensive Plan Update. 1) Letter from Richard Luedke, Senior Planner from City of Keller, regarding extension of Keller-Smithfield Road in Keller to Smithfield Road in North Richland Hills. The City of Keller would like to see Smithfield Road realigned from North Tarrant Parkway south. The consensus was that Staff would make the City of Keller aware of the city's plans for Smithfield Road and that the road is already designated as a four-lane thoroughfare. 2) Five letters regarding 19.2 acres of property located at the approximate address of 8600 Davis Boulevard supporting a change for retail designation. Staff advised that the Planning and Zoning Commission had identified that area for office use. The consensus was not to make any changes to this area on the proposed Land Use Plan before the public hearing. 3) Letter from Mark Howe of Howe/Wood & Company representing owners of property located at the intersection of Rumfield Road and Precinct Line Road and letter from Dr. and Mrs. Thomas Harris, owner of the property, requesting a change to reflect the existing zoning of a retail designation. The consensus was to leave as recommended by the Planning & Zoning Commission. 4) Letter from Marjorie Nash Dodd, representing property at 8125 Precinct Line Road requesting a change from the proposed plan of office to retail. The consensus was to leave as recommended. e e - City Council Work Session Minutes February 19, 2001 Page 3 5) Memo from Larry Cunningham, City Manager, to Mayor and Council regarding the Greenwald property located south of Grapevine Highway and east of Strummer Drive. Mr. Greenwald would like the plan changed to reflect retail. Staff recommendation was to increase the strategic planning area for this area, which would include his property, and not to change the land use designation on the map. 6) Survey response from Stanley Christmas regarding adequate fire protection in the Spring Oaks Addition area, which is northwest of the proposed Town Center. Staff advised that the Fire Chief would send a letter to Mr. Christmas advising him that adequate fire response time will be possible in this area. 7) Survey response from John Ciclio expressing concern regarding the retail/commercial designation at the Davis Boulevard and North Tarrant Parkway intersection. Mr. Ciclio is concerned with the retail/commercial dedication and that the rural character of this area will be lost when the property develops. Staff advised that the right-of-way dedication was almost complete and this would be a mute issue. 8) Survey response from an unnamed citizen regarding the desire to have a traffic light installed at the intersection of Davis Boulevard and Northeast Parkway. Staff advised that the intersection is controlled by TxDOT. The City will contact TxDOT and inquire if a signal is warranted at this location. Staff felt that a light would not be warranted because Northeast Parkway is not a collector street and all intersections along Davis Boulevard that are signalized are collectors. 2. DISCUSSION OF COMPREHENSIVE PLAN UPDATE Mr. Dan Sefko, Dunkin, Sefko & Associates, reviewed the purpose of updating the Comprehensive Land Plan and gave a brief overview of the proposed plan. Mr. Sefko advised that the updated future Land Use Plan and Thoroughfare Plan should be included as an addendum to the current Comprehensive Plan. Mr. Sefko advised that Staff would be able to keep the plan updated using the City's computer system. The Council called attention to a couple of areas on the proposed Land Use Plan in which the land use designation was incorrect. Staff made a note of the corrections and will make the necessary revisions. There was discussion on neighborhood service areas and office areas. There was concern expressed that the Council's philosophy of shared access would not be conveyed e City Council Work Session Minutes February 19, 2001 Page 4 to future city leaders and board members. There was also concern that prospective businesses in the neighborhood and office areas would not understand that curb cuts are limited in these districts. The consensus was to add verbiage to the Plan explaining the desire for collective utilization of shared access by businesses in neighborhood service areas and office areas. 4. REVIEW OF STRATEGIC PLANNING AREAS Ms. Cathy Horton gave a brief overview of the five proposed strategic planning areas _ Freeway Business District, South Grapevine Highway Planning Area, Smithfield Conservation District, North Precinct Line Transition Area and Denton Highway Transition Area. Ms. Horton explained that the initiatives listed under each of the Strategic Planning areas are very general in nature. Council consensus was requested on the initiatives listed under each of the planning areas. Ms. Horton advised that one of the initiatives listed under South Grapevine Highway Planning area - "investigate the potential for the long- term redevelopment of t~e Richland Terrace, Richaven, Richland Oaks, Woodcrest and Richland Heights neighborhoods. Assist any residential neighborhood in achieving a buy out plan for redevelopment purposes" - should have been listed under Freeway Business District. e Feedback from the Council on each of the strategic areas was received. There was discussion on the rationale for a minimum commitment of 25 acres of land for the Freeway Business District and the desire for the area not to be piece-milled. The consensus was to add wording that it would be 25 acres of land or other logical geographical areas. A recommendation was made from the Council that the Linda Spurlock Park area (to include the Honey Lane and Dawn Drive area) be included in the South Grapevine Highway Planning Area. Mayor Scoma commented that he could foresee the Smithfield area becoming a Smithfield Urban Center with the Cottonbelt train, businesses, offices and shops. A recommendation was made to use the term multi-use planned development for the North Precinct Line Transition area instead of single-family or mixed-used development. There were no recommendations made to the Denton Highway Transition area. 5. REVIEW CHANGES TO THOROUGHFARE PLAN UPDATE e Mr. Dickens gave a brief overview of the amendments to be added to the City's Thoroughfare Plan. Mr. Dickens advised the following additional changes had been made to the Plan - · Davis Boulevard was changed through the city to a designation of P6D with 120 feet of right of way as recommended by the Mayor · Updated the base map with all current subdivision streets e e e City Council Work Session Minutes February 19, 2001 Page 5 · Strummer Drive - designation changed to M5U · Newman Drive - eliminated C4U designation from Emerald Hills Way to Smithfield Road East · Guy Street - removed as public right-of-way · Shady Grove Road - removed as a public right-of-way between Davis Boulevard and Precinct Line Road 6. IMPLEMENTATION STRATEGY FOR COMPREHENSIVE PLAN Mr. Pitstick advised that there would be need for fine-tuning to the Zoning Ordinance. The Planning and Zoning Commission will begin to review the existing zoning categories in the Zoning Ordinance and revising them to correspond to the Comprehensive Plan. The proposed Comprehensive Plan will also create inconsistencies between the Future Land Use Map and the existing Zoning Map. Staff will not initiate zoning changes, but will study and review those areas in which the zoning does not conform to the Plan and develop strategies for dealing with the zoning inconsistencies. Staff asked for Council to prioritize the strategic planning areas. Council advised that the Freeway Business District would not take place for several years until after completion of the freeway expansion and construction. The South Grapevine Highway Planning area was a number one priority with the need to begin planning for the Cotlonbelt Rail in the Smithfield Conservation District. Third priority was the Precinct Line area followed by the Denton Highway Transition area. The Council agreed that the Precinct Line Road and Denton Highway Districts could be accomplished by in-house studies, but that the Grapevine Highway Planning area and the Smithfield Conservation District will require outside consultants. A Town Hall Public Hearing on the proposed Plan was set for March 27,2001. ADJOURNMENT Mayor Scoma adjourned the work session at 7:42 p.m. Charles Scoma - Mayor ATTEST: Patricia Hutson - City Secretary ~. .. CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Council Meeting Date: 4/23/01 Subject: Award Annual Contract for Aquatic Chemical Supplies to D.C.C., Inc. - Resolution No. 2001-031 Agenda Number: PU 2001-025 Staff has requested and received bids for the supply of pool chemicals for NRH20 Family Water Park. The existing contract with Advance Chemicals is expiring and based on the volumes of chemicals purchased, a new contract must be signed. The bid is comprised of two major chemicals and three minor chemicals that are utilized for sanitizing and balancing the 750,000 gallons of treated pool water at NRH20. The two major chemicals utilized for sanitation are Sodium Hypochlorite (NaOCI) and Muriatic Acid (HCI). The three minor chemicals utilized for balancing are Sodium Carbonate (Na2C03), Sodium Bicarbonate (NaHC03) and Calcium Chloride (CaCI2). Bids were received from three vendors: D.C.C. Inc., HCI Advance Chemicals and Harcross Chemicals. Harcross Chemicals turned in a "no bid", which resulted in two bids being evaluated. The following table outlines the bidders' prices and schedules: Bidderl Sodium Muriatic Sodium Sodium Calcium Total (Delivery Hypochlorite Acid Carbonate Bicarbonate Chloride Schedule in Days) D.C.C., Inc. (2) $56,100.00 $2,625.00 $58,650.00 $2,666.00 NIB NIB $36.00 $26.62 NIB $44.00 $39.00 NIB $48.00 $58,853.00 $84.00 $61,459.62 NIB NIB Advance Chemicals (2-3) Harcross Chemicals (-) In evaluating the bids, staff examined both price and delivery schedules. In both areas D.C.C. Inc. was the number one performer. Neither firm meets local provider preference criteria and both firms' references are good. Recommendation: To award the bid to D.C.C., Inc. and approve Resolution No. 2001-031, authorizing the City Manager to execute the contract for the supply of swimming pool related chemicals. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other Account Number 415-7517-722.66-15 Sufficient·Funds Available / (£.U"'.?¿./(/ ~" Budget Director ) ~~<~ De artment Head Si nature ,.~ J 0v Page 1 of 1 · · · . ~ RESOLUTION NO. 2001-031 BE IT RESOLVED BY THE CITY COUNCil OF THE CITY OF NORTH RICHLAND HillS, TEXAS, that: The City Manager is hereby authorized to execute the contract with D.C.C., Inc. for the purchase of swimming pool related chemicals for NRH20 Family Water Park, as act and deed of the City. PASSED AND APPROVED this 23rd day of April, 2001. APPROVED: Charles Scoma, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for the City APPROVED AS TO CONTENT: ~~s & Recreation " CITY OF NORTH RICHLAND HILLS Department: Parks & Recreation Council Meeting Date: 4/23/01 Subject: Award Annual Food Supply Contract for NRH20 to Agenda Number: PU200 1-026 Ben E. Keith Foods - Resolution No. 2001-032 Request for Proposals were solicited for an annual contract to supply food items for NRH20 Water Park. Bidders were requested to submit prices on a list of specific food items as well as specific brands that were high volume sellers in the 2000 season. Attached is a breakdown of the prices submitted. Evaluation factors include brand of food item offered, price, quality, and customer service response. Staff also tested various items offered by vendors. Proposal requests were sent to the following companies: Ben E. Keith, Sysco Foods, Bassham Foods and Food Sales Systems. Bids were returned from Ben E. Keith and Sysco Foods. Bassham Foods does not carry many of the required brands and therefore declined to submit a bid. Food Sales Systems provides specific branding and pricing information to the distributors and is not able to provide the service. Staff recommends the contract be awarded to Ben E. Keith Foods based on the evaluation factors listed above. Ben E. Keith Foods has an excellent reputation and provided very reliable service to NRH20 during the 1996 through 1998 and 2000 seasons. All the brands offered by Ben E. Keith Foods meet the specifications for high quality and availability. We plan to continue to use the on-line ordering system that allows the park to take advantage of the distributor's full inventory. Recommendation: To award the annual food supply contract for NRH20 to Ben E. Keith Foods and approve Resolution No. 2001-032 authorizing the City Manager to execute the contract. Finance Review =- ~~~'Sl~ "<-- Department Head Signature uV '- Budget Director Source of Funds: Bonds (GO/Rev.) Operating Budget Other Page 1 of 1 · · · RESOLUTION NO. 2001-032 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS, that: The City Manager is hereby authorized to execute the contract with Ben E. Keith Foods for the annual food supply contract for NRHzO Family Water Park, as act and deed of the City. PASSED AND APPROVED this 23rdday of April, 2001. APPROVED: Charles Scoma, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for the City APPROVED AS TO CONTENT: ~\c~ Jim Browne, Director of Parks & Recreation NRH20 Family Water Park PRODUCT E. KEITH SYSCO DIFFERE Flame Broiled Beef Steak Burger 3 oz. (80030ACN $ 18,776.34 $ 21,266.08 $ (2,489.74) Hotdogs all meat 6/1 $ - $ - $ - Hotdogs all meat 6/1 $ 5,073.00 $ 4,215.00 $ 858.00 Hotdogs all meat 6/1 (21253) N/A $ - N/A Bacon - precooked (Iayed out) (14081) $ 125.00 $ 102.05 $ 22.95 Bacon - precooked (round) (14032) $ 132.55 $ 210.90 $ (78.35) Premio's Pizza 6.4oz - (4) cheese $ 6,508.50 $ 7,098.00 $ (589.50) Premio's Pizza 6.40z - pepperoni $ 8,752.00 $ 9,464.00 $ (712.00) Bite Size Corn Dogs $ 3,048.00 $ 3,165.00 $ (117.00) Thin French Fries - 5/16" (OIF00910) $ 9,540.00 $ 8,887.50 $ 652.50 Mesquite Skinless Chicken Breast Fillets (PTM840) $ 474.70 $ 474.80 $ (0.10) Sizzle strips Fajita Seasoned Breast Strips (6264) $ 2,005.50 $ 1,452.50 $ 553.00 Precooked Baby Back Ribs(11106) $ 235.00 $ 232.50 $ 2.50 Pepper Jack Cheese Sausage $ - N/A N/A Cracked Black Pepper Sausage (23299) $ 552.75 $ 536.75 $ 16.00 Hot Top2 Jalapeno Cheese Sauce (#05100) - BIB $ 4,983.00 $ 5,398.50 $ (415.50) Sliced American Cheese $ 500.40 $ 545.25 $ (44.85) Waffle Cones - large $ 1,371.20 $ 1,422.40 $ (51.20) Medium Cake Cones $ 1,210.80 $ 1,174.00 $ 36.80 Large Cake Cones $ 259.68 $ 274.80 $ (15.12) Bite Size Cookie Variety Box (30008) $ - N/A N/A Individually Wrapped Pouches - Cookies $ 3,375.00 $ 3,630.00 $ (255.00) ndividually Wrapped Cookies .$ 900.00 $ 968.00 $ (68.00) Potato Chip Regular $ 484.40 $ 521.50 $ (37.10) Potato Chip Baked Lays $ 219.15 $ 236.25 $ (17.10) Potato Chip Ruffles - Bulk $ 367.36 $ 402.88 $ (35.52) Tortilla Chips - Triangle White $ 1,122.00 $ 1,884.00 $ (762.00) Baked Beans $ 211.80 $ 193.00 $ 18.80 Potato Salad wI mustard $ 490.86 $ 544.50 $ (53.64) Ketchup (can) $ 1,064.25 $ 1,271.25 $ (207.00) Ketchup packets (PPI) $ 315.84 $ 496.56 $ (180.72) Mustard $ 236.88 $ 215.10 $ 21.78 Mustard Packets $ 300.00 $ 405.00 $ (105.00) Relish Packets $ 153.84 $ 211 .20 $ (57.36) Liquid Vegetable Fryer Oil $ 501.75 $ 533.25 $ (31.50) 9" paper plates $ 357.15 $ 798.84 $ (441.69) Tall Folded Dispenser Napkins $ 654.60 $ 689.00 $ (34.40) Grease Resistant French Fry Bags - 5x1x4 - square $ 16.26 $ 136.00 $ (119.74) ·must say "French Fries" on bag $ - $ - $ - Hamburger sandwich wraps - cushion foil - 10.5x13 $ 345.45 $ 347.55 $ (2.10) ·must say "Hamburger" on bag $ - $ - $ - Cheeseburger sandwich wraps - cushion foil - 10.5x13 $ 1,091.40 $ 1,158.30 $ (66.90) ·must say "Cheeseburger" on bag $ - $ - $ - Food Trays, quarter pound #25 $ 119.80 $ 129.90 $ (10.10) 1 oz. Paper Souffle Cup $ 62.86 $ 86.88 $ (24.02) oz. Translucent Plastic Portion Cups (PC200) $ 143.35 $ 190.50 $ (47.15) Pink Dish Soap $ 216.84 $ 253.80 $ (36.96) Degreaser Cleaner $ 226.20 $ 267.75 $ (41.55) ¡Totals $76,525.46 $81,491.04 ($4,965.59) ,-.-, ^ ...."".'_~.~"..__..........-..;;....._,.;"..,.,'".;.;"."..1.i.. , CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Department Council Meeting Date: 4/23/2001 Subject: Consider a Replat of Lots 2R & 3, Block 34, Fox Hollow Agenda Number: PS 2001-10 Addition to Lots 2R1 and 3R, Block 34, Fox Hollow Addition requested by Owen D. Long on 1.43 acres of land known as 7605 and 7609 Mid Cities Boulevard. CASE SUMMARY: Owen D. Long has submitted a plat of Lots 2R1 and 3R, Block 34 of the Fox Hollow Addition. The property is zoned "C-1" Commercial. The plat has been reviewed by the Development Review Committee. The plat complies with the Subdivision Ordinance and is consistent with the Comprehensive Land Use Plan. RECOMMENDA TION: The Planning and Zoning Commission at their meeting on April 12, 2001, recommended approval of PS 2001-10 by a vote of 6 to O. To approve PS 2001-10 as recommended by the Planning and Zoning Commission. . Finance Review ,. Source of Funds: Bonds (GO/Rev.) Operating Budget Other Account Number Sufficient Funds Available Department Head Signature Finance Director )- ~cR.l~ Docurnent6 Page I or 2 . . . 4. PS 2001-10 CONSIDER AN AMENDMENT OF THE FINAL PLAT OF LOTS 2R1 & 3R. BLOCK 34. FOX HOLLOW ADDITION REQUESTED BY OWEN D. LONG ON 1.43 ACRES OF LAND KNOWN AS 7605 AND 7609 MID-CITIES BLVD. APPROVED C.ty Zoning Administrator Cathy Horton gave a brief summary of the case stating the property as being zoned as C-1 Commercial and complying with the Subdivision Ordinance and the Comprehensive Land Use Plan. Mr. Richard Davis, seconded by Mr. Ted Nehring, motioned to approve PS 2001- 10. The motion carried (6-0). 5. PS 2001-11 CONSIDER AMENDMENT OF THE FINAL PLAT OF LOTS 3R & 4R. BLOCK 1. SMITHFIELD ADDITION REQUESTED BY DON PHIFER ON 3.9 ACRES OF LAND IN THE 6600 BLOCK OF DAVIS BLVD. APPROVED Cathy Horton gave a brief summary of the case stating that the property is zoned 1-2 Industrial and complies with the Subdivision Ordinance and the Comprehensive Land Use Plan. Mr. Ted Nehring, seconded by Mr. Richard Davis, motioned for approval of case PS 2001-11. The motion carried (6-0). 6. PS 2000-11 CONSIDER THE REQUEST FOR A FINAL PLAT OF FOREST GLENN EAST ADDITION PHASE 1 BY DOUG LONG ON 45.013 ACRES OF LAND IN THE 8500 BLOCK OF NORTH T ARRANT PARKWAY. APPROVED \ \ 16A ./' ...' \ 16// /........ 1 R \ If ,.",.,....-,,:r···' .../'/' L 0 -Vi /'\ \ ß' /"' ,. . \, \ <':.. //..... tl 0 ~ D N /,/'/\ (/f 0 1-. 4 A. D . ........,(. /........-\. \ ..x·····" /""'... \ \ .y" ..././ .../'/ \ \ .. /.../ \ \ .,.,,-.../' 2 \ \ -" ¡ \ 33 \ i I ~I --.--..--- f.41DwCtTrES BLV~ .".. "'." "J ~ ~ 41R ~ ~ 42R 43R 44R <4e <4 R RI : :-..: '. k~ ~i ISR 14Rl 14R 13RI .. ... ,. I i ':.. j I., I:," ..... 3 I'" 1 R2 ) :t í ::.., I2R ' 7R ~ ." 8R ..................... .......................... TR 10H4 .672 0 TR 10H 1.C!a73 Q I I I ------__ TR 11!IH2 ¡ ____. I '!2& . I -_ I I AIC .36~6 0 ¡ ./' : /' TR. 11 \ /./ 1 . 62 AC //?/ ../ ;:;/ TR ,¡IIIIIII¡!; ,IIII!ilil\\IIIIIIIIIIIIIIIIIII\III: /~t/ / :~O i I! ~~ ............................ I· .r' R :;::::::::.:....... ., _...../~~í 102 / . 334 Q 'k Q >- ~. SA S ..J ~; 13 14 34 ~ _....~ ') ~. lR PS2001-10 FINAUAMENDED PLAT FOX HOLLOW 1í ...L\ Ì'. I". I >- .L'" 1 ~ .1 // .// .~~,¡.: _....__..,..=.::::..-:..:..__~ "iii \ \ \. ~ì ~~ I \ :t: I L 2 i i 2 ¡ j i . I j I 3 í í . ........,., I i 3 I/~ /~ ~í J 4 I 5 /' /~ / / 5 A2"~ ;' / 7/ ~6 .).,"'.../ /........ '.,.::.:<.:::'........ .~ ............ .// / 10 ~:.-;:>.~ - ./",/ ",-... ,./ .'. ~ '.' '''', " ,./ /\:::. \ 11 C! ./ ./" \ :>\ ./ /' ,'..:, //'«./::\::""'./:\1~6 \(':> ::'. /."...,:." // 15' ,". .,.."" .·.:",::"·..x .. "... TR. IOH 4.C!873 ~ AlA 2.57Ø7 Q ---.---.---- ~ ------ --- --,--- .......... -'............., ~ ~, .". ......, ........ ". .~ . '. "'" "\'\ \ ce ......... ......... /H '-- '---' A2 NRH CITY OF NORTH RICHLAND HILLS . . . Public Works I Administration March 30, 2001 MEMO TO: Planning and Zoning Commission /nJ}Y FROM: Julia W. Skare, Senior Staff Engineer{[ SUBJECT: Fox Hollow Addition, Block 34, Lots 2R1 and 3R; PS2001-10; Replat We have reviewed the revised plat submitted to Public Works on March 29, 2001. All items commented on in the March 27, 2001 memo have been addressed. P.O. Box 820609 · North Richland Hills,Texas · 76182-0609 7301 Northeast Loop 820· 817-427-6400· FAX 817-427-6404 CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Department Council Meeting Date: 4/23/2001 Subject: Consider an Amendment of the Final Plat of Lots 3R & 4R, Agenda Number: PS2001-11 Block 1, Smithfield Addition requested by Don Phifer on 3.9 acres of land in the 6600 Block of Davis Boulevard. "" CASE SUMMARY: Don Phifer has submitted a plat application on property zoned "1-2". The plat has been amended to correct the location of the access and driveway easements to match the existing driveways. The Development Review Committee has reviewed the plat for compliance with the Subdivision Rules and Regulations. The plat complies with both the Subdivision Ordinance and the Comprehensive Land Use Plan. RECOMMENDATION: The Planning and Zoning Commission at their meeting on April 12, 2001, recommended approval of PS 2001-11 by a vote of 6 to O. To approve PS 2001-11 as recommended by the Planning and Zoning Commission. rrnance KeVlew Source of Funds: Bonds (GO/Rev.) Operating Budget ____ ) Other - ~V ~c/2~ Account Number Sufficient Funds AvaIlable Finance Director Department Head Signature ~~~ lty Manager Si a e Document6 Page 1 of2 . 4. PS 2001-10 CONSIDER AN AMENDMENT OF THE FINAL PLAT OF LOTS 2R1 & 3R. BLOCK 34. FOX HOLLOW ADDITION REQUESTED BY OWEN D. LONG ON 1.43 ACRES OF LAND KNOWN AS 7605 AND 7609 MID-CITIES BLVD. APPROVED City Zoning Administrator Cathy Horton gave a brief summary of the case stating the property as being zoned as C-1 Commercial and complying with the Subdivision Ordinance and the Comprehensive Land Use Plan. Mr. Richard Davis, seconded by Mr. Ted Nehring, motioned to approve PS 2001- 10. The motion carried (6-0). 5. PS 2001-11 . CONSIDER AMENDMENT OF THE FINAL PLAT OF LOTS 3R & 4R. BLOCK 1. SMITHFIELD ADDITION REQUESTED BY DON PHIFER ON 3.9 ACRES OF LAND IN THE 6600 BLOCK OF DAVIS BLVD. APPROVED Cathy Horton gave a brief summary of the case stating that the property is zoned 1-2 Industrial and complies with the Subdivision Ordinance and the Comprehensive Land Use Plan. Mr. Ted Nehring, seconded by Mr. Richard Davis, motioned for approval of case PS 2001-11. The motion carried (6-0). 6. PS 2000-11 CONSIDER THE REQUEST FOR A FINAL PLAT OF FOREST GLENN EAST ADDITION PHASE 1 BY DOUG LONG ON 45.013 ACRES OF LAND IN THE 8500 BLOCK OF NORTH TARRANT P ARKW A Y. APPROVED . ,. r" " . . . '.. :..-. " ..''''',' ..... :.-::~: '.' ;~:~.~:" j .:.. ~.) :.. l~b .27 AC 'R IB5 eAC : f ~ ¡ í TR / 3B I ¡ .40 I ~~ AC / .:: æ I I I I ¡ i / i I :'-/ :..~ ~ ~~~ TR IB CJ.5CJ AC i f i i I ~;~ . TR 1 B2 . h~' ...... i TR IBl TR 183 I .. .53 AC I ;::: ~ .",,' . 73 AC ! I I , f I ,I ,... ---' 1 . .~ / r \ A \.:........./ ,~, "-~ ~: L.......::·:~..n................. ;:~..~,~,. í / 2 ! . 563 a / CU ¡ I I I I í 1 I l .6'43 2 .624 AC q ~ ~ ~ - I >. ,- it: ',:'! .- Q:;" ./ :,$'1./ .. 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Œ .-., ~ \. .:::::" NRH· Public Works / Administration · CITY OF NORTH RICHLAND HILLS March 30, 2001 MEMO TO: Planning and Zoning Commission FROM: Julia W. Skare, Senior Staff Engineer rY SUBJECT: Smithfield Addition, Block 1, Lots 3R1 and 4R1; PS2001-11; Amended Plat We have reviewed the revised plat submitted to Public Works on March 29, 2001. All items commented on in the March 19, 2001 memo have been addressed. · · P.o. Box 820609 . North Aichland Hills, Texas" 76182-0609 7301 Northeast Loop 820 .. 817-427-6400 .. FAX 817-427-6404 CITY OF NORTH RICHLAND HILLS epartment: Finance Council Meeting Date: 4/23/2001 Subject: Consideration of Action on all Matters Pertaining to the Agenda Number: GN 2001-041 Award and Sale of $5,950,000 in General Obligation Bonds and Approve Ordinance No. 2551 On Monday, April 23, 2001 the City will be selling $5,950,000 in General Obligation Bonds. Of this amount, $980,000 is new money for the 1994 bond program projects of Crane Road and Rumfield Road as approved by City Council. Of this issue $4,970,000 is the refunding of prior bond issues. Because of the inclusion of the refundings of prior year bond issues, the Director of Finance and the City's financial advisors, First Southwest Company (FSW), are recommending that the City sell all bonds on a negotiated basis. The following are reasons why a negotiated sale rather than a fixed bid sale is recommended: · Complexity and timing of refundings makes a negotiated sale preferable to a fixed bid sale. Flexibility in sizing and structure of the bond issue is important as market conditions change. A negotiated sale gives the City the flexibility to structure the issue to fit market conditions and legal requirements. A fixed bid structure does not offer this flexibility. . The negotiation process gives the City the ability to test the market and get the best deal possible on the day of pricing. Management and staff have set a standard of at least 4.5% present value savings as a bench mark for accepting the refundings. The industry standard is 3% or higher. A market resulting in 4.5% savings would save the City thousands of dollars in interest payments over the life of the bonds. Staff and First Southwest believe that the market is currently favorable to do better than 4.5% on the G.O. refunding. It is also recommended that the underwriters of Southwest Securities (SWS) and Dain Raucher (DR) be selected to market the bonds. SWS purchased the NRH 1999 bond issue and DR purchased the NRH 2000 bond issue, which reflects not only their ability to market and sell our securities, but also their interest in the City. Prior to Monday night's Council meeting the Director of Finance assisted by FSW will negotiate the sale of the bonds. The prices being offered will be compared to recent municipal sales and the current market to obtain the best possible pricing on the City of North Richland Hills bonds. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget e Other ;h~/~ De rtment Head Signature Account Number Sufficient Funds Available Finance Director .". CITY OF NORTH RICHLAND HILLS The results of the sale will be submitted to City Council at the regular meeting on April 23. Upon acceptance of the bond purchase agreement, it will be necessary for City Council to award the bid and to authorize the issuance as prepared by our bond counsel, Fulbright and Jaworski. The enclosed ordinance is for your consideration to be passed on Monday, April 23. This ordinance also authorizes all the other necessary actions such as paying agenUregistrar agreements. Rating conferences with Standard and Poor's and Moody's were held recently. The City received credit ratings on this issue from both Moody's Investors Service and Standard and Poor's. Moody's reaffirmed the AA3 rating and Standard and Poor's reaffirmed the AA- rating. Recommendation: Request the City Council to transact the following business in relation to the sale and issuance of bonds: I move to approve the bond purchase agreement with and authorize the issuance of $5,950,000 "City of North Richland Hills, Texas, General Obligation Bonds, Series 2000" at a true interest cost of % and adopt Ordinance 2551 authorizing the issuance of such bonds. e CITY COUNCIL ACTION ITEM e ORDINANCE NO. 2551 AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICH LAND HILLS, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2001"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; providing for the redemption of certain outstanding bonds of the City; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval and execution of a Paying Agent/Registrar Agreement, a Purchase Contract and a Special Escrow Agreement and the approval and distribution of an Official Statement; and providing an effective date. WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding obligations, payable from ad valorem taxes, totaling in original principal amount $4,890,000 of the following issues or series (collectively hereinafter called the "Refunded Bonds"), to wit: (i) City of North Richland Hills, Texas, Tax and Golf Course Revenue Refunding Bonds, Series 1991, dated April 1, 1991, maturing on September 1 in each of the years 2002 through 2011, and aggregating in principal amount $3,590,000 (the "Series 1991 Refunded Bonds"); and e (ii) City of North Richland Hills, Texas, General Obligation Bonds, Series 1993, dated May 1, 1993, maturing on February 15 in each of the years 2004 through 2009, and aggregating in principal amount $1,300,000 (the "Series 1993 Refunded Bonds"); AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Refunded Bonds, and such deposit, when made in accordance with said statute, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Bonds; and WHEREAS, the City Council hereby finds and determines the Refunded Bonds should be refunded at this time to restructure the overall debt service of the City to allow for the issuance of new bonds to finance improvements with a minimum tax rate impact on the residents of the City and notwithstanding the aggregate amount of payments to be made on the refunding bonds herein authorized exceeds the aggregate amount of payments that would have been made on the Refunded Bonds had the refunding not occurred by a maximum amount of $ and results in a present value cost of $ ; and WHEREAS, in combination with the issuance of such refunding bonds, the City Council further finds and determines that general obligation bonds in the principal amount of $980,000 approved and authorized to be issued at an election held September 27, 1994, should be issued and sold at this time; a summary of the general obligation bonds authorized at said e election, the principal amount authorized, amounts heretofore issued and being issued 45007991 1 '""._______..._ -_0.- pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Purpose Amount Previously Authorized Issued Amount Being Unissued Issued Balance Street Improvements $20,000,000 $16,115,000 $980,0000 $2,905,000 AND WHEREAS, the Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said election in one or more installments when, in the judgment of the Council, funds are needed to accomplish the purposes for which such bonds were voted; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS: SECTION 1: Authorization - Desianation- Principal Amount- Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $ , to be designated and bear the title "CITY OF NORTH RICHLAND HILLS, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2001" (hereinafter referred to as the "Bonds"), for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Bonds"), to pay costs of issuance and to provide funds in the amount of $980,000 for permanent public improvements and public purposes, to wit: street improvements, including traffic signalization, drainage incidental thereto and the acquisition of land and right-of-way therefor, in accordance with authority conferred at the aforesaid election and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapters 1331 and 1207. SECTION 2: Fully Reaistered Obliaations - Bond Date -Authorized Denominations-Stated Maturities-Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated April 15, 2001 (the "Bond Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") in accordance with the following schedule: 45007991 2 e e Year of Principal Interest Stated Maturity Amount Rate(s) 2002 $ 270,000 % 2003 375,000 % 2004 570,000 % 2005 590,000 % 2006 610,000 % 2007 635,000 % 2008 660,000 % 2009 685,000 % 2010 465,000 % 2011 480,000 % 2012 50,000 % 2013 50,000 % 2014 55,000 % 2015 55,000 % 2016 60,000 % 2017 60,000 % 2018 65,000 % 2019 70,000 % 2020 70,000 % 2021 75,000 % The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s) per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Bonds shall be payable on February 15 and August 15 in each year, commencing February 15, 2002. SECTION 3: Terms of Payment-PayinQ AQent/ReQistrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Bank One, National Association to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent! Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying _ Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and - authorized to serve in such capacity and perform the duties and services of Paying 45007991 3 Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Westerville, Ohio (the "Designated PaymenVTransfer Office"). Interest on the Bonds shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymenVTransfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities on and after February 15, 2012, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2011 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by 45007991 4 e dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. e All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated PaymentlTransfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption, and has been called for redemption, and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Reaistration - Transfer - Exchanae of Bonds-Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond for transfer at the Designated PaymentlTransfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. e At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated PaymentlTransfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. 45007991 5 All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated PaymenUTransfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered, and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book-Entry Onlv Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case 45007991 6 e may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - ReQistration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9D, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered, and delivered. e SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the aggregate principal amount of the Bonds with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms.A. Forms Generallv. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American _ Bankers Association) and such legends and endorsements (including insurance legends in the . event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction 45007991 7 of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. B. Form of Definitive Bond. REGISTERED NO. REGISTERED $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF NORTH RICHLAND HILLS, TEXAS GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 2001 Bond Date: April 15, 2001 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and political subdivision in the County of Tarrant, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Bond Date 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 being payable on February 15 and August 15 in each year, commencing February 15, 2002. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. 45007991 8 e This Bond is one of the series specified in its title issued in the aggregate principal amount of $ (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Bonds"), to pay costs of issuance and to provide funds in the amount of $980,000 for permanent public improvements and public purposes, to wit: street improvements, including traffic signalization, drainage incidental thereto and the acquisition of land and right-of-way therefor, under and in strict conformity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after February 15, 2012, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2011, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor; provided e moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, _ and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon ,., which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be 45007991 9 no longer Outstanding thereunder; and for other terms and provIsions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 45007991 10 · IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF NORTH RICHLAND HILLS, TEXAS Mayor COUNTERSIGNED: City Secretary (SEAL) C. *Form of ReQistration Certificate of Comptroller of Public Accounts to appear on Initial Bondes) on Iv. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS e OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE 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 duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do not print on definitive bonds e 45007991 11 D. Form of Certificate of PavinQ AQent/ReQistrar to appear on Definitive Bonds on Iv. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Westerville, Ohio is the "Designated PaymentlTransfer Office" for this Bond. BANK ONE, NATIONAL ASSOCIATION Registration date: By Authorized Signature E. Form of AssiQnment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. Signature guaranteed: F. The Initial Bondes) shall be in the form set forth in paraQraph B of this Section. except that the form of the sinQle fullv reQistered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headings "Interest Rate" and "Stated Maturity" shall both be omitted. 45007991 12 e (ii) Paragraph one shall read as follows: Registered Owner: Principal Amount: DOLLARS The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 in each year, commencing February 15, 2002. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the registered owner hereof by Bank One, National Association (the e "Paying Agent/Registrar"), upon its presentation and surrender, at its designated offices in Westerville, Ohio (the "Designated PaymentlTransfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all _times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt "Service Requirements on the Bonds shall be deposited to the credit of a "Special 2001 Bond 45007991 13 Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. SECTION 11: Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of ObliQation of City. If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as 45007991 14 · will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. The term "Government Securities" shall mean (i) direct noncallable obligations of the It United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than MA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AM or its equivalent. SECTION 13: Ordinance a Contract - Amendments - OutstandinQ Bonds. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal e of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any 45007991 15 other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section 14, the following terms have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. 45007991 16 · "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: e (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. _ (e) Not to Invest at HiQher Yield. Except to the extent permitted by section 148 of .. the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the 45007991 17 final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038- T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. 45007991 18 · (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. ú) Elections. The City hereby directs and authorizes the Mayor, City Manager, Deputy City Manager, Director of Finance and City Secretary, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. e (k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (I) Not An Advance Refunding. The portion of the Bonds being issued to refund the Series 1991 Refunded Bonds is a current refunding in that the Series 1991 Refunded Bonds are to be paid and redeemed in full on September 1, 2001, which date is within 90 days of the delivery date of the Bonds. (m) Qualified Advance Refunding. A portion of the Bonds are issued in part to refund the Series 1993 Refunded Bonds, and the Bonds will be issued more than 90 days before the redemption of the Series 1993 Refunded Bonds. The City represents as follows: (a) The Bonds are the first advance refunding of the Series 1993 Refunded Bonds, within the meaning of section 149(d)(3) of the Code. (b) The Series 1993 Refunded Bonds are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. e (c) The initial temporary period under section 148(c) of the Code will end: (i) with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds; and (ii) with respect to proceeds of the Series 1993 Refunded Bonds on the Closing Date if not ended prior thereto. 45007991 19 (d) On and after the date of issue of the Bonds, no proceeds of the Series 1993 Refunded Bonds will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such Series 1993 Refunded Bonds. (e) The Bonds are being issued for the purposes stated in the preamble of this Ordinance. There is a present value savings associated with the refunding. In the issuance of the Bonds the City has neither: (i) overburdened the tax-exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material financial advantage based on arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. SECTION 15: Sale of Bonds - Official Statement Approval. The Bonds authorized by this Ordinance are hereby sold by the City to Southwest Securities and Dain Rauscher Incorporated (herein referred to as the "Underwriters") in accordance with the Purchase Contract, dated April 23, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this City Council, and in regard to the approval and execution of the Purchase Contract, the City Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Purchase Contract are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Secretary, City Manager, Deputy City Manager, and Director of Finance, one or more of said officials), shall be and is hereby in all respects approved and the Underwriters are hereby authorized to use and distribute said final Official Statement, dated April 23, 2001, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Underwriters, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Underwriters. SECTION 16: Special Escrow AQreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and Bank One, National Association (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content, and such Agreement in substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of the City and as the act and deed of this City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. 45007991 20 · Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 2001 CITY OF NORTH RICHLAND HillS, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1207, as amended, this Ordinance and the Agreement. SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the initial purchasers. Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager, Deputy City Manager, and Director of Finance, anyone or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure, and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the purchasers, and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the purchasers and the initial exchange thereof for definitive Bonds. e SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale in the sum of (i) $ shall be deposited to the construction fund and $ shall be deposited with the Escrow Agent for application in accordance with the Agreement and (iii) $ shall be deposited in the Interest and Sinking Fund. The balance of the proceeds of sale shall be disbursed for payment of costs of issuance in accordance with instructions from the City, and any proceeds of sale remaining after payment of the costs of issuance for the Bonds shall deposited in the Interest and Sinking Fund for the Bonds. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Bond Fund as shall be determined by the appropriate authorized officials of the City. All surplus proceeds of sale of the Bonds, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. Additionally, on or immediately prior to the date of the delivery of the Bonds to the Underwriters, the Director of Finance shall cause to be transferred in immediately available funds to the Escrow Agent from moneys on deposit in the interest and sinking funds maintained for the payment of the Refunded Bonds the sum of $ to accomplish the refunding. SECTION 19: Redemption of Refunded Bonds. (a) The bonds of that series known as "City of North Richland Hills, Texas, Tax and Golf Course Revenue Refunding Bonds, _ Series 1991", dated April 1, 1991, maturing in the years 2002 through 2011, and aggregating .. in principal amount $3,590,000, shall be redeemed and the same are hereby called for 45007991 21 redemption on September 1, 2001, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, National Association (successor paying agent/registrar to Team Bank, Fort Worth), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this Ordinance for all purposes. (b) The bonds of that series known as "City of North Richland Hills, Texas, General Obligation Bonds, Series 1993", dated May 1, 1993, maturing in the years 2004 through 2009, and aggregating in principal amount $1,300,000, shall be redeemed and the same are hereby called for redemption on February 15, 2003, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, National Association (successor paying agent/registrar to Bank One, Texas, NA), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of this Ordinance for all purposes. The redemption of the obligations described above being associated with the advance refunding of such obligations, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such obligations of the City's decision to redeem such obligations on the dates and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the obligations and this Ordinance. SECTION 20: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder 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 of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 21: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying 45007991 22 . Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 22: Leaal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart thereof shall accompany the global Bonds deposited with the Depository Trust Company. SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. . SECTION 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 26: Govemina Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 27: Effect of Headinas. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 28: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 29: Continuina Disclosure Undertakina. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. e "Rule" means SEC Rule 15c2-12, as amended from time to time. 45007991 23 "SEC" means the United States Securities and Exchange Commission. "SID" means any person 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. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2001) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 15 of this Ordinance, being the information described in Exhibit F hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit F hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City 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 City otherwise would be required to provide financial information and operating data pursuant to this Section. 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. (c) Material Event Notices. The City 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 holders of the Bonds; (8) Bond calls; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Bonds; and (11) Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. 45007991 24 · (d) Limitations. Disclaimers. and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." SECTION 30: Severabilitv. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 31: Public MeetinQ. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 32: Effective Date. This Ordinance shall be in force and effect from and after its passage on the date shown below and it is so ordained. PASSED AND ADOPTED, this April 23, 2001. CITY OF NORTH RICH LAND HILLS, TEXAS -- Mayor ATTEST: City Secretary (City Seal) e 45007991 25 Exhibit A PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of April 23, 2001 (this "Agreement"), by and between the City of North Richland Hills, Texas (the "Issuer"), and Bank One, National Association, a national association duly organized and existing under the laws of the United States of America, (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of North Richland Hills, Texas, General Obligation Refunding and Improvement Bonds, Series 2001" (the "Securities") in the aggregate principal amount of $ , which Securities are scheduled to be delivered to the initial purchasers on or about June 5, 2001; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto forthe first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close 45024736 . of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the offices of the Bank located in Westerville, Ohio at the address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the Secretary . or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, ending September 30. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor, Mayor Pro Tern, City Manager, Deputy City Manager, Director of Finance or City Secretary, anyone or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution). e 45024736 -2- "Record Date" means the last business day of the month next preceding each interest payment date. "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Securities" means the securities defined in the recital paragraphs herein. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of PavinQ AQent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following offices: Bank One, Texas, N.A. Attention: Securities Transfer 235 West Schrock Road Westerville, Ohio 43081-0393 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date (as defined in the Resolution). All payments of principal and/or interest on the 45024736 -3- i Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Reaister - Transfers and Exchanaes. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and Bank may prescribe. The Bank represents and warrants its office in Fort Worth, Texas will at all times have immediate access to the Security Register by electronic or other means and will be capable at all times of producing a hard copy of the Security Register at its Fort Worth office for use by the Issuer. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. . Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. e 45024736 -4- Section 4.03. Form of Security Reaister. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of 1934, all Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated, Destroyed. Lost or Stolen Securities. The Issuer hereby instructs the Bank, subject to the provisions of Section 11 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. Section 4.07. Transaction Information to Issuer. The Bankwill, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange 45024736 -5- t of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon . any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, i consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction oftransfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counselor any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. e 45024736 -6- Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Moneys Held by Bank - Fiduciary Account/Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the United States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank its directors, officers and employees, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.08. DTC Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. 45024736 -7- , ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assianment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on page 9. Section 6.04. Effect of Headinas. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assians. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Severabilitv. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. . Section 6.07. Benefits of Aareement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Aareement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for e the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a 45024736 -8- successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of such notice of resignation. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. GoveminQ Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BANK ONE, TEXAS, N.A. BY Title: [SEAL] Attest: Address: 403 West Fourth Street PG-1 Fort Worth, Texas 76102 Title: CITY OF NORTH RICH LAND HILLS BY Mayor (CITY SEAL) Address: P. O. Box 820609 North Richland Hills, Texas 76182 Attest: City Secretary 45024736 -9- r ~ EXHIBIT B PURCHASE CONTRACT . .. 45025073 EXHIBIT C SPECIAL ESCROW AGREEMENT COUNTY OF DALLAS § § § THE STATE OF TEXAS THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of April 23, 2001, by and between the City of North Richland Hills, Texas, a duly incorporated municipal corporation in Tarrant County, Texas (the "City") acting by and through the Mayor and City Secretary, and Bank One, National Association, a national banking association organized and existing under the laws of the United States of America, or its successors or assigns hereunder (the "Bank"), WITNESSETH: WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $4,890,000 (collectively, the "Refunded Obligations") more particularly described as follows: (i) City of North Richland Hills, Texas, Tax and Golf Course Revenue Refunding Bonds, Series 1991, dated April 1, 1991, maturing on September 1 in each of the years 2002 through 2011, and aggregating in principal amount $3,590,000 (the "Series 1991 Refunded Bonds"); and (ii) City of North Richland Hills, Texas, General Obligation Bonds, Series 1993, dated May 1, 1993, maturing on February 15 in each of the years 2004 through 2009, and aggregating in principal amount $1,300,000 (the "Series 1993 Refunded Bonds"); AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds of such refunding bonds with any place of payment for the obligations being refunded and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon such terms and conditions as the parties may agree, provided such deposits may be invested only in direct obligations of the United States of America, including obligations the principal of and interest on are unconditionally guaranteed by the United States of America, (hereinafter called the "Federal Securities") that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of Refunded Obligations; and WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and WHEREAS, the City on the 23rd day of April, 2001, pursuant to an ordinance (the "Bond Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds known as "City of North Richland Hills, Texas, General Obligation Refunding and Improvement 45024864 - Bonds, Series 2001" (the "Bonds"), and such Bonds are being issued to refund, discharge and make final payment of the principal of and interest on the Refunded Obligations; and WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other available funds of the City, are to be deposited with the Bank and used in part to purchase the Federal Securities listed and identified in Exhibit B attached hereto and incorporated by reference as a part of this Agreement for all purposes; and WHEREAS, the Federal Securities shall be held and deposited to the credit of the "Escrow Fund" to be established and maintained by the Bank in accordance with this Agreement; and WHEREAS, the Federal Securities, together with the beginning cash balance in the Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the existence of monies sufficient to pay the principal amount of the Refunded Obligations and the accrued interest thereon, as the same shall become due in accordance with the terms of the ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements for the purchase of the Federal Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as provided herein; and WHEREAS, the Bank is a banking association organized and existing under the laws of . the State of New York, possessing trust powers and is fully qualified and empowered to enter into this Agreement; and WHEREAS, in Section 16 of the Bond Ordinance, the City Council duly approved and authorized the execution of this Agreement; and WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the provisions thereof, including, without limitation, all actions required by the ordinances authorizing the Refunded Obligations, the Act, the Bond Ordinance and this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to secure the payment of the principal of and the interest on the Refunded Obligations as the same shall become due, the City and the Bank hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of said documents shall be deemed an incorporation of such provision as a part hereof in the same manner and with the same effect as if it were fully set forth herein. SECTION 2: Escrow Fund Creation/FundinQ. There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2001 CITY OF NORTH RICH LAND HILLS, TEXAS. REFUNDING BOND ESCROW FUND" (hereinafter called . the "Escrow Fund") for the benefit of the holders of the Refunded Obligations, and, immediately 45024864 2 following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank the following amounts: $ For the purchase of Federal Securities identified in Exhibit B to be held for the account of the Escrow Fund $ For deposit in the Escrow Fund as a beginning cash balance. The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys, apply the same as set forth herein, and to hold the cash and Federal Securities deposited and credited to the Escrow Fund for application and disbursement for the purposes and in the manner provided in this Agreement. SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the cash and Federal Securities, together with the interest to be earned thereon, deposited to the credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on the Refunded Obligations as the same shall become due and payable, and such Refunded Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. FURTHERMORE, the Bank acknowledges receipt of a copy of the order providing for the redemption of the (i) Series 1991 Refunded Obligations on September 1, 2001 at the redemption price of par plus accrued interest thereon and (ii) Series 1993 Refunded Obligations on February 15, 2003; all in accordance with the provisions of the notice requirements applicable to said Refunded Obligations and the notice requirements contained in the respective ordinances authorizing such Refunded Obligations. The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations to be sent to the registered owners thereof appearing on the registration books at least thirty (30) days prior to the respective redemption date therefor. SECTION 4: PledQe of Escrow. The Bank agrees that all cash and Federal Securities, together with any income or interest earned thereon, held in the Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations which will mature and become due on and after the date of this Agreement, and such funds initially deposited and to be received from maturing principal and interest on the Federal Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this Agreement. SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely deposits to the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be immediately given by the Bank to the City by the fastest means possible, but the Bank shall in no manner be responsible for the City's failure to make such deposits. SECTION 6: Escrow Fund Securities/SeQreQation. The Bank shall hold said Federal Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys and securities on deposit with the Bank; shall never commingle said Federal Securities and 45024864 3 - moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Federal Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow agent; and a special account evidencing such facts shall at all times be maintained on the books of the Bank. SECTION 7: Escrow Fund Collections/Pavments. The Bank shall from time to time collect and receive the principal of and interest on the Federal Securities as they respectively mature and become due and credit the same to the Escrow Fund. On or before each principal and/or interest payment date or redemption date, as the case may be, for the Refunded Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including the City, shall cause to be withdrawn from the Escrow Fund the amount required to pay the accrued interest on the Refunded Obligations due and payable on said payment date and the principal of the Refunded Obligations due and payable on said payment date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and deposited with the paying agent for the Refunded Obligations to be paid with such amount. The paying agent for the Refunded Obligations is the Bank. 4 If any Refunded Obligation thereon shall not be presented for payment when the principal thereof or interest thereon shall have become due, and if cash shall at such times be held by the Bank in trust for that purpose sufficient and available to pay the principal of such Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash without liability to the holder of such Refunded Obligation for interest thereon after such maturity or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on or with respect to said Refunded Obligation, including for any claim for the payment thereof and interest thereon. All cash required by the provisions hereof to be set aside or held in trust for the payment of the Refunded Obligations, including interest thereon, shall be applied to and used solely for the payment of the Refunded Obligations and interest thereon with respect to which such cash has been so set aside in trust. Subject to the provisions of the last sentence of Section 25 hereof, cash held by the Bank in trust for the payment and discharge of any of the Refunded Obligations and interest thereon which remains unclaimed for a period of three (3) years after the stated maturity date or redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding the above and foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 8: Disposal of Refunded Obliaations. All Refunded Obligations cancelled on account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and an appropriate certificate of destruction furnished the City. SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be irrevocable and the holders of the Refunded Obligations shall have an express lien on all moneys and Federal Securities in the Escrow Fund until paid out, used and applied in accordance with this Agreement. . Unless disbursed in payment of the Refunded Obligations, all funds and the Federal Securities received by the Bank for the account of the City hereunder shall be and remain the 45024864 4 property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be entitled to a preferred claim and shall have a first lien upon such funds and Federal Securities enjoyed by a trust beneficiary. The funds and Federal Securities received by the Bank under this Agreement shall not be considered as a banking deposit by the City and the Bank and the City shall have no right or title with respect thereto, except as otherwise provided herein. Such funds and Federal Securities shall not be subject to checks or drafts drawn by the City. SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien whatsoever upon any of the moneys or Federal Securities in the Escrow Fund for payment of services rendered hereunder, services rendered as paying agent/registrar for the Refunded Obligations, or for any costs or expenses incurred hereunder and reimbursable from the City. SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized to accept initially and temporarily cash and/or substituted Federal Securities pending the delivery of the Federal Securities identified in the Exhibit B attached hereto, or shall be authorized to redeem the Federal Securities and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in noncallable direct obligations of the United States of America provided such early redemption and reinvestment of proceeds does not change the repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives the following: (1) an opinion by an independent certified public accountant to the effect that (i) the initial and/or temporary substitution of cash and/or securities for one or more of the Federal Securities identified in Exhibit B pending the receipt and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the Federal Securities and the reinvestment of such funds in one or more substituted securities (which shall be noncallable direct obligations of the United States of America), together with the interest thereon and other available moneys then held in the Escrow Fund, will, in either case, be sufficient, without reinvestment, to pay, as the same become due in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) with respect to an early redemption of Federal Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause interest on the Bonds or Refunded Obligations to be included in the gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such investment, or otherwise make the interest on the Bonds or the Refunded Obligations subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations and the Bonds. SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Federal Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow Fund except as specifically provided by this Agreement. SECTION 13: Excess Funds. If at any time through redemption or cancellation of the Refunded Obligations there exists or will exist excesses of interest on or maturing principal of 45024864 5 - the Federal Securities in excess of the amounts necessary hereunder for the Refunded Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Bank the following: (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the Escrow Fund, together with the interest thereon, and other available monies then held in the Escrow Fund, will be sufficient to pay, as the same become due and without reinvestment, in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such transfer will not cause interest on the Bonds or the Refunded Obligations to be included in gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such transfer, or otherwise make the interest on the Bonds or the Refunded Obligations subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations or the Bonds. SECTION 14: Collateralization. The Bank shall continuously secure the monies in the Escrow Fund not invested in Federal Securities by a pledge of direct obligations of the United States of America, in the par or face amount at least equal to the principal amount of said uninvested monies to the extent such money is not insured by the Federal Deposit Insurance Corporation. SECTION 15: Absence of Bank's Liabilitv for Investments. The Bank shall not be liable or responsible for any loss resulting from any investment made in the Federal Securities or substitute securities as provided in Section 11 hereof. SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Paving Aaent's Charges. The City agrees to pay the Bank for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $ and, except for reimbursement of costs and expenses incurred by the Bank pursuant to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete payment for the administration of this Agreement. The City also agrees to deposit with the Bank on the effective date of this Agreement, the sum of $ , which represents the total charge due all paying agents for the Refunded Obligations and the Bank acknowledges and agrees that above amount is and represents the total amount of compensation due the Bank for services rendered as paying agent for the Refunded Obligations. The Bank hereby agrees to pay, assume and be fully responsible for any additional charges that it may incur in the performance of its duties and responsibilities as paying agent for the Refunded Obligations. The Bank agrees to continue to provide paying agent services for the life of the Refunded Obligations, with the remedy for nonpayment being solely an action for amounts owing under the paying agent contract. . SECTION 17: Escrow Agent's Duties / Responsibilities/Liability. The Bank shall not be . responsible for any recital herein, except with respect to its organization and its powers and 45024864 6 authority. As to the existence or nonexistence of any fact relating to the City or as to the sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution or other instrument in the form therein set forth has been adopted by the City Council of the City, as conclusive evidence that such resolution or other instrument has been duly adopted and is in full force and effect. The duties and obligations of the Bank shall be determined solely by the express provisions of this Agreement and the Bank shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Bank. In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement; but notwithstanding any provision of this Agreement to the contrary, in the case of any such certificate or opinion or any evidence which by any provision hereof is specifically required to be furnished to the Bank, the Bank shall be under a duty to examine the same to determine whether it conforms to the requirements of this Agreement. The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent in ascertaining or acting upon the pertinent facts. The Bank shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of all said Refunded Obligations at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bank not in conflict with the intent and purpose of this Agreement. For the purposes of determining whether the holders of the required principal amount of said Refunded Obligations have concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded Obligations, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such obligor, shall be disregarded, except that for the purposes of determining whether the Bank shall be protected in relying on any such direction only Refunded Obligations which the Bank knows are so owned shall be so disregarded. The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and include the Chairman of the Board of Directors, the President, any Vice President and any Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any Assistant Treasurer, and every other officer and assistant officer of the Bank customarily performing functions similar to those performed by the persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred, because of his knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in this Agreement, shall mean and include any of said officers or persons. SECTION 18: Limitation Re: Bank's Duties/Responsibilities/liabilities to Third Parties. The Bank shall not be responsible or liable to any person in any manner whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to the City, or for the identity or authority of any person making or executing this Agreement for 45024864 7 t and on behalf of the City. The Bank is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to the City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or attempt to assign or transfer any interest hereunder or any portion of any such interest. Any such assignment or attempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 19: Interpleader. In the event conflicting demands or notices are made upon the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to what action should be taken hereunder, the Bank shall have the right at its election to: (1) Withhold and stop all further proceedings in, and performance of, this Agreement with respect to the issue in question and of all instructions received hereunder in regard to such issue; and (2) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requiring all persons involved to interplead and litigate in such court their several claims and rights among themselves. In the event the Bank becomes involved in litigation in connection with this Section, the City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result t thereof. The obligations of the Bank under this Agreement shall be performable at the corporate office of the Bank in the City of Houston, Texas. The Bank may advise with legal counsel in the event of any dispute or question regarding the construction of any of the provisions hereof or its duties hereunder, and in the absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting in accordance with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the field of law addressed in any such legal opinion or with respect to the instructions given. SECTION 20: AccountinQ - Annual Report. Promptly after September 30th of each year, commencing with the year 2001, while the Escrow Fund is maintained under this Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or other designated official of the City, a statement in detail of the Federal Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding 12 month period ending September 30th of each year. SECTION 21: Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF NORTH RICH LAND HILLS, TEXAS . P. O. Box 820609 North Richland Hills, Texas 76182 45024864 8 Attention: Director of Finance BANK ONE, NATIONAL ASSOCIATION 8111 Preston Road, 2nd Floor Dallas, Texas 75225 Attention: Corporate Trust Department The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. SECTION 22: Performance Date. Whenever under the terms of this Agreement the performance date of any provision hereof, including the date of maturity of interest on or principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the Bank is authorized by law to close, then the performance thereof, including the payment of principal of and interest on the Refunded Obligations, need not be made on such date but may be performed or paid, as the case may be, on the next succeeding business day of the Bank with the same force and effect as if made on the date of performance or payment and with respect to a payment, no interest shall accrue for the period after such date. SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow AQreement. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Agreement, in any and every said Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining thereto as said Refunded Obligations shall have been modified as provided in this Agreement. The City covenants that it is duly authorized under the Constitution and laws of the State of Texas to execute and deliver this Agreement, that all actions on its part for the payment of said Refunded Obligations as provided herein and the execution and delivery of this Agreement have been duly and effectively taken and that said Refunded Obligations and coupons in the hands of the holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof as provided in this Agreement. SECTION 24: Severabilitv. If anyone or more of the covenants or agreements provided in this Agreement on the part of the parties to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. In the event any covenant or agreement contained in this Agreement is declared to be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement. SECTION 25: Termination. This Agreement shall terminate when the Refunded Obligations, including interest due thereon, have been paid and discharged in accordance with the provisions of this Agreement. If any Refunded Obligations are not presented for payment when due and payable, the nonpayment thereof shall not prevent the termination of this Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued 45024864 9 , interest thereon shall upon termination of this Agreement be held by the Bank for such purpose in accordance with Section 7 hereof. Any moneys or Federal Securities held in the Escrow Fund at termination and not needed for the payment of the principal of or interest on any of the Refunded Obligations shall be paid or transferred to the City. SECTION 26: Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Bank by this Agreement. SECTION 27: Successors/Assians. (a) Should the Bank not be able to legally serve or perform the duties and obligations under this Agreement, or should the Bank be declared to be insolvent or closed for any reason by federal or state regulatory authorities or a court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held hereunder, together with all books, records and accounts relating to the Escrow Fund and the Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under this Agreement to such successor. If the City should fail to appoint such a successor within ninety (90) days from the date the City discovers, or is notified of, the event or circumstance causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor or assigns of the Bank and such court, upon determining the Bank is unable to continue to serve, shall appoint a successor to serve under this Agreement and the amount of compensation, if any, to be paid to such successor for the remainder of the term of this Agreement for services to be rendered both for administering the Escrow Fund and for paying agent duties and responsibilities for the Refunded Obligations. 4t (b) Furthermore, the Bank may resign and be discharged from performing its duties and responsibilities under this Agreement upon notifying the City in writing of its intention to resign and requesting the City to appoint a successor. No such resignation shall take effect until a successor has been appointed by the City and such successor has accepted such appointment and agreed to perform all duties and obligations hereunder for a total compensation equal to the unearned proportional amount paid the Bank under Section 16 hereof for the administration of this Agreement and the uneamed proportional amount of the paying agents fees for the Refunded Obligations due the Bank. Any successor to the Bank shall be a bank, trust company or other financial institution that is duly qualified under applicable law (the Act or other appropriate statute) to serve as escrow agent hereunder and authorized and empowered to perform the duties and obligations contemplated by this Agreement and organized and doing business under the laws of the United States or the State of Texas, having its principal office and place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or State authority. Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder, and the Bank shall execute and deliver an instrument transferring to such successor, subject to the terms of this Agreement, all the rights, powers and trusts created and established and to be performed under this Agreement. Upon the request of any such successor Bank, the City shall execute any and all instruments in writing for more fully and certainly vesting in and tilL. confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used .., herein shall be the Bank and its legal assigns and successor hereunder. 45024864 10 SECTION 28: Escrow Aareement - Amendment/Modification. This Agreement shall be binding upon the City and the Bank and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the Bank and their respective successors and legal representatives. Furthermore, no alteration, amendment or modification of any provision of this Agreement shall (1) alter the firm financial arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the holders of all Refunded Obligations outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the City and the Bank may, without the consent of the holders of the Refunded Obligations, amend or modify the terms and provisions of this Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any amendment or modification to this Agreement, prior written notice of such amendment or proposed modification, together with the legal documents amending or modifying this Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation, Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement, prior to such amendment or modification being executed. SECTION 29: Effect of Headinas. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 30: Executed Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. This Agreement shall be governed by the laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds. 45024864 11 , IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF NORTH RICHLAND HILLS, TEXAS Mayor ATTEST: City Secretary (City Seal) BANK ONE, NATIONAL ASSOCIATION, as Escrow Agent Title: t ATTEST: Authorized Signer (Bank Seal) . 45024864 12 EXHIBIT 0 NOTICE OF REDEMPTION CITY OF NORTH RICH LAND HILLS, TEXAS, TAX AND GOLF COURSE REVENUE REFUNDING BONDS SERIES 1991 DATED APRIL 1, 1991 NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on and after September 1, 2002 and aggregating in principal amount $3,590,000 have been called for redemption on September 1, 2001 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Maturitv 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Principal Amount OutstandinQ $265,000 280,000 300,000 320,000 340,000 365,000 390,000 415,000 445,000 470,000 CUSIP Number ALL SUCH BONDS shall become due and payable on September1, 2001, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to Bank One, National Association (successor paying agent/registrar to Bank One, Texas, N. A. ) at its designated office in Westerville, Ohio, at the following address: 235 West Schrock Road, Westerville, Ohio 43081-0393, Attention: Bond Services. THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. 45015246/10019217 BANK ONE, NATIONAL ASSOCIATION as Paying Agent/Registrar Address: 8111 Preston Road, 2nd Floor, Dallas, Texas 75225 , r' EXHIBIT E NOTICE OF REDEMPTION CITY OF NORTH RICH LAND HILLS, TEXAS, GENERAL OBLIGATION BONDS SERIES 1993 DATED MAY 1,1993 NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on and after February 15, 2004 and aggregating in principal amount $1,300,000 have been called for redemption on February 15, 2003 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Maturitv 2004 2005 2006 2007 2008 2009 Principal Amount OutstandinQ $190,000 200,000 210,000 220,000 235,000 245,000 CUSIP Number ALL SUCH BONDS shall become due and payable on February 15, 2003, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to Bank One, National Association (successor paying agent/registrar to Bank One, Texas, N. A. ) at its designated office in Westerville, Ohio, at the following address: 235 West Schrock Road, Westerville, Ohio 43081-0393, Attention: Bond Services. THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. BANK ONE, NATIONAL ASSOCIATION as Paying Agent/Registrar Address: 8111 Preston Road, 2nd Floor, Dallas, Texas 75225 4t 45015246 Exhibit F to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 28 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix 0, but for the most recently concluded fiscal year. 2. The information in the Official Statement under "Investment Policies - Current Investments" and Tables 1 through 6, 8 through 15 and Appendix B. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above .~' 45015246 - " , . , CITY OF NORTH RICHLAND HILLS .artment: Finance Council Meeting Date: 4/23/2001 Subject: Consideration of Action on all Matters Pertaining to the Agenda Number: GN 2001-042 Award and Sale of $3,255,000 in Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001 and Approve Ordinance No. 2552 On Monday, April 23, 2001 the City will be selling $3,255,000 in Tax and Waterworks and Sewer System Revenue Certificates of Obligation for street improvements on Shady Grove Road, Smithfield Road, and North Tarrant Parkway as approved by City Council. Because of the inclusion of the refundings of prior year bond issues, (not included in this issue but in the other two issues on this agenda) the Director of Finance and the City's financial advisors, First Southwest Company (FSW), are recommending that we sell all bonds on a negotiated basis. The following are reasons why a negotiated sale rather than a fixed bid sale is recommended: . Complexity and timing of refundings makes a negotiated sale preferable to a fixed bid sale. Flexibility in sizing and structure of the bond issue is important as market conditions change. A negotiated sale gives the City the flexibility to structure the issue to fit market conditions and legal requirements. A fixed bid structure does not offer this flexibility. . The negotiation process gives the City the ability to test the market and get the best deal possible e on the day of pricing. Management and staff have set a standard of at least 4.5% present value savings as a bench mark for accepting the refundings. The industry standard is 3% or higher. A market resulting in a 4.5% savings would save the City thousands of dollars in interest payments over the life of the bonds. Staff and First Southwest believe the market is currently favorable to do better than 4.5% on the G.O. refunding. It is also recommended that the underwriters of Southwest Securities (SWS) and Dain Raucher (DR) be selected to market the bonds. SWS purchased the NRH 1999 bond issue and DR purchased the NRH 2000 bond issue, which reflects not only their ability to market and sell our securities, but also their interest in the City. Prior to Monday night's Council meeting the Director of Finance assisted by FSW will negotiate the sale of the bonds. The prices being offered will be compared to recent municipal sales and the current market to obtain the best possible pricing on the City of North Richland Hills bonds. Source of Funds: Bonds (GO/Rev.) Operating Budget e Other ~~ Dep ment Head Signature Finance Review Account Number Sufficient Funds Available " ~/ ~ F;~.",eD1Æcto' '--åM~~ ~t4Nv~ U Ity Manager Sig t e e CITY OF NORTH RICHLAND HILLS The results of the sale will be submitted to City Council at the regular meeting on April 23. Upon acceptance of the bond purchase agreement, it will be necessary for City Council to authorize the issuance of the bonds and to approve the ordinance as prepared by our bond counsel, FUlbright and Jaworski. The enclosed ordinance is for your consideration to be passed on Monday, April 23. This ordinance also authorizes all the other necessary actions such as paying agent/registrar agreements. Rating conferences with Standard and Poor's and Moody's were held April 10 and 11. The City received credit ratings on this issue from both Moody's Investors Service and Standard and Poor's. Moody's reaffirmed the AA3 and Standard and Poor's reaffirmed the AA- rating. Recommendation: Request the City Council to transact the following business in relation to the sale and issuance of Certificates of Obligation: e I move to approve the bond purchase agreement with and authorize the issuance of $3,255,000 "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2001" at a true interest cost of _ % and adopt Ordinance 2552 authorizing the issuance of such Certificates of Obligation. CITY COUNCIL ACTION ITEM e ORDINANCE NO. 2552 AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICH LAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 "; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of the net revenues from the operation of the City's Waterworks and Sewer System; and resolving other matters incident and relating to the issuance, payment, security, sale and delivery of said Certificates, including the approval and execution of a Paying Agent/Registrar Agreement and a Purchase Contract and the approval and distribution of an Official Statement; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $3,255,000 for the purpose of paying contractual obligations to be incurred for (i) street improvements, including drainage and utility line relocations and the purchase of land and right-of-way, and (ii) professional services rendered in relation to such projects and the financing thereof, has been duly published in the Fort Worth Star Telegram, a newspaper hereby found and determined to be of general circulation in the City of North Richland Hills, Texas, on , 2001 and , 2001, the date the first .-publication of such notice being not less than fifteen (15) days prior to the tentative date stated _therein for the passage of the ordinance authorizing the issuance of such certificates; and WHEREAS, no petition protesting the issuance of the certificates of obligation and bearing valid petition signatures of at least 5% of the qualified electors of the City, has been presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to the date of the passage of this Ordinance; and WHEREAS, the Council hereby finds and determines that all of the certificates of obligation described in the aforesaid notice should be issued and sold at this time in the amount and manner as hereinafter provided; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS: SECTION 1: Authorization, Desianation, Principal Amount. Purpose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $3,255,000, to be designated and bear the title "CITY OF NORTH RICH LAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001" (hereinafter referred to as the "Certificates"), for the purpose of paying contractual obligations to be incurred for (i) street improvements, including drainage and utility line relocations and the purchase of land and right-of-way, and (ii) professional services rendered in relation to such projects and the financing thereof, pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended. e 45024656.1 1 SECTION 2: Fullv Registered Obligations - Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated April 15, 2001 (the "Certificate Date") and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturitv Amount Rate(s) 2002 $50,000 % 2003 110,000 % 2004 115,000 % 2005 120,000 % 2006 125,000 % 2007 130,000 % 2008 135,000 % 2009 140,000 % 2010 150,000 % 2011 155,000 % 2012 160,000 % 2013 170,000 % 2014 175,000 % 2015 185,000 % 2016 195,000 % 2017 205,000 % 2018 215,000 % 2019 230,000 % 2020 240,000 % 2021 250,000 % The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months), and such interest shall be payable on February 15 and August 15 of each year, commencing February 15, 2002. SECTION 3: Terms of Pavment-Paving Agent/Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Bank One National Association to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, 45024656.1 2 _and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Certificates shall be payable at the Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in Westerville, Ohio (the "Designated PaymentlTransfer Office"). Interest on the Certificates shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymentITransfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which _ is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to . close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Certificates having Stated Maturities on and after February 15, 2012 shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2011, or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the e City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. 45024656,1 3 (b) Mandatory Redemption. The Certificates having Stated Maturities of February 15, 20_, February 15, 20_ and February 15, 20_ (the "Term Certificates") shall be subject to mandatory redemption in part prior to maturity at the redemption price of par and accrued interest to the date of redemption on the respective dates and in principal amounts as follows: Term Certificates due February 15, 20_ Redemption Date Principal Amount Term Certificates due February 15, 20_ Redemption Date Principal Amount February 15, 20 February 15, 20 $ ,ODD $ ,ODD February 15, 20 February 15,20 $ ,ODD $ ,ODD Term Certificates due February 15, 20 Redemption Date Principal Amount February 15, 20 February 15,20 February 15, 20 $ ,ODD $ ,000 $ ,000 Approximately forty-five (45) days prior to each redemption date specified above the Term Certificates are to be mandatorily redeemed, the Paying Agent/Registrar shall select by lot the numbers of the Term Certificates within the applicable Stated Maturity to be redeemed on the next following February 15 from moneys set aside for that purpose in the Certificate Fund (as hereinafter defined). Any Term Certificate not selected for prior redemption shall be paid on the date of their Stated Maturity. The principal amount of the Term Certificates for a Stated Maturity required to be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced, at the option of the City, by the principal amount of Term Certificates of like Stated Maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions set forth in paragraph(a) of this Section and not theretofore credited against a mandatory redemption requirement. (c )Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent! Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. 45024656.1 4 A All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii) ~dentify the Certificates to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed. shall become due and payable on the redemption date specified and the interest thereon. or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, provided moneys sufficient for the payment of such Certificate (or the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed. shall be made at the Designated PaymentlTransfer Office of the Paying Agent/Registrar only upon presentation and surrender of the Certificates. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption has been duly given as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor. SECTION 5: Reaistration Transfer - Exchanae of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or Arequest for exchange duly executed by the Holder or by his duly authorized agent, in form ., satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in Section 8 hereof) for transfer at the Designated PaymentlTransfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in Section 8 hereof) may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated PaymentlTransfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated PaymentlTransfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates e surrendered in such transfer or exchange. 45024656.1 5 All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 20 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/ Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. SECTION 6: Book-Entry Onlv Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC) , a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representations by and between the City and DTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants"). While the Certificates are held by DTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - ReQistration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the 45024656.1 6 e City Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201. No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 90, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount of $3,255,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the _ designee thereof. The Initial Certificate(s) shall be the Certificates submitted to the Office of the _ Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generallv. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Certificates, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be _ set forth on the reverse thereof, with an appropriate reference thereto on the face of the ., certificate. 45024656.1 7 The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Certificates as evidenced by their execution. B. Form of Certificates. REGISTERED NO._ REGISTERED $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF NORTH RICH LAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATE OF OBLIGATION, SERIES 2001 Issue Date: April 15, 2001 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Certificate Date 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 being payable on February 15 and August 15 in each year, commencing February 15, 2002. Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated PaymentlTransfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor; provided, however, while this Certificate is registered to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Certificate. Interest is payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United 45024656.1 8 e States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $3,255,000 (herein referred to as the "Certificates") for the purpose of paying contractual obligations to be incurred for (i) street improvements, including drainage and utility line relocations and the purchase of land and right-of-way, and (ii) professional services rendered in relation to such projects and the financing thereof, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Certificates maturing on dates hereinafter identified (the "Term Certificates") are subject to mandatory redemption prior to maturity with funds on deposit in the Certificate Fund established and maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to maturity at the price of par and accrued interest thereon to the mandatory redemption date on the respective dates and in principal amounts as follows: Term Certificates due February 15, 20_ Redemption Date Principal Amount Term Certificates due February 15, 20_ Redemption Date Principal Amount February 15,20 February 15, 20 $ ,000 $ ,000 February 15, 20 February 15, 20 $ ,000 $ ,000 e Term Certificates due February 15, 20 Redemption Date Principal Amount February 15, 20 February 15, 20 February 15, 20 $ ,000 $ ,000 $ ,000 The particular Term Certificates of a stated maturity to be redeemed on each redemption date shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal amount of Term Certificates for a stated maturity required to be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced, at the option of the City, by the principal amount of Term Certificates of like stated maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions appearing below and not theretofore credited against a mandatory redemption requirement. The Certificates maturing on and after February 15, 2012, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2011, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. e At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered 45024656.1 9 owners of each Certificate to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Certificate (or the portion of its principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Certificate is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part. The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City, and are additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer System (the "System"), such lien and pledge, however, being junior and subordinate to the lien on and pledge of such Net Revenues securing the payment of the "Prior Lien Obligations" (identified and defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations without limitation as to principal amount but subject to any applicable terms, conditions or restrictions under law or otherwise. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the nature and extent of the pledge of the Net Revenues securing the payment of the Certificates; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and the pledge of the Net Revenues and covenants made in the Ordinance may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized 45024656.1 10 ~gent. When a transfer on the Security Register occurs, one or more new fully registered ~ertificates of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Certificates is duly _authorized by law; that all acts, conditions and things required to exist and be done precedent to wand in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. CITY OF NORTH RICH LAND HILLS, TEXAS Mayor COUNTERSIGNED: City Secretary e 45024656.1 11 (SEAL) 45024656.1 12 .. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Certificate(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER ) ) OF PUBLIC ACCOUNTS ) ) THE STATE OF TEXAS ) REGISTER NO. I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas e (SEAL) *NOTE TO PRINTER: Do not print on definitive Certificates D. Form of Certificate of Paying Agent/Registrar to appear on Definitive Certificates only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar located in New York, New York, is the "Designated PaymentfTransfer Office" for this Certificate. BANK ONE NATIONAL ASSOCIATION, as Paying Agent/Registrar Registration Date: By Authorized Signature e 45024656.1 13 E. Form of Assianment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DA TED: Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate(s) shall be in the form set forth in paraaraph B of this Section. except that the form of a sinale fullv reaistered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings "Interest Rate _" and "Stated Maturity " shall both be omitted; (ii) paragraph one shall read as follows: Registered Owner: Principal Amount: DOLLARS The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). (or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest specified above computed on the basis of a 36D-day year of twelve 3D-day months; such 45024656.1 14 e interest being payable on February 15 and August 15 of each year, commencing February 15, 2002. Principal installments of this Certificate are payable at its Stated Maturity or on a prepayment date to the registered owner hereof by Bank One National Association (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Westerville, Ohio (the "Designated PaymentITransfer Office"). Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appears herein without qualifying language, are defined to mean as follows: e (a) The term "Additional Obligations" shall mean tax and revenue obligations hereafter issued which by their terms are payable from ad valorem· taxes and additionally payable from and secured by a parity lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien and pledge securing the payment of the Certificates. (b) The term "Certificates" shall mean the $3,255,000 "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2001 "authorized by this Ordinance. (c) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 11 of this Ordinance. (d) The term "Collection Date" shall mean, when reference is being made to the levy and collection of annual ad valorem taxes, the date the annual ad valorem taxes levied each year by the City become delinquent. (e) The term "Fiscal Year" shall mean shall mean the twelve month operating period for the System ending September 30th of each year. e (f) The term "Government Securities" shall mean (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than MA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by 45024656.1 15 the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (g) The term "Net Revenues" shall mean and include the gross revenues derived from the operation of the System, less reasonable expenses of operation and maintenance, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair the security of obligations payable from and secured by a lien on and pledge of the Net Revenues of the System shall be deducted in determining "Net Revenues", (h) The term "Outstanding" when used in this Ordinance with respect to Certificates means, as of the date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: (1) those Certificates cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Certificates for which payment has been duly provided by the City in accordance with the provisions of Section 21 hereof; and (3) those Certificates that have been mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 20 hereof. (i) The term "Prior Lien Obligations" shall mean all revenue bonds or other obligations, now outstanding and hereafter issued, payable from and secured by a lien on and pledge of the Net Revenues of the System, including, but not limited to, the outstanding and unpaid: (1) "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996; and issued in the original principal amount of $5,135,000; (2) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1992", dated February 1, 1992, and issued in the original principal amount of $900,000; (3) ""City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1997", dated April 15, 1997, and issued in the original principal amount of $2,755,000; 45024656.1 16 e (4) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1998", dated May 1, 1998, and issued in the original principal amount of $8,180,000; (5) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1999", dated April 15, 1999, and issued in the original principal amount of $3,560,000; and (6) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2000", dated May 1, 2000, and issued in the original principal amount of $2,315,000. (j) The term "System" shall mean the City's combined Waterworks and Sanitary Sewer System, including all present and future additions, extensions, replacements and improvements thereto, whether situated within or without the corporate limits of the City. SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and is hereby created a special account or fund on the books and records of the City known as the "SPECIAL SERIES 2001 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and _ all moneys deposited to the credit of such Fund shall be shall be kept and maintained in a . special banking account at the City's depository bank. Authorized officials of the City are hereby authorized and directed to make withdrawals from said Fund sufficient to pay the principal of and interest on the Certificates as the same become due and payable, and, shall cause to be transferred to the Paying Agent/Registrar from moneys on deposit in the Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar on or before the last business day next preceding each interest and principal payment date for the Certificates. Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter 2256) relating to the investment of "bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levv. To provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied a sufficient tax on each one hundred dollars' e valuation of taxable property in said City, adequate to pay such Debt Service Requirements while the Certificates remain Outstanding, full allowance being made for delinquencies and 45024656.1 17 costs of collection; and said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on the Certificates shall be determined and accomplished in the following manner: (a) Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the Council shall determine: (1) The amount on deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the amount of the Net Revenues of the System appropriated and allocated to pay such Debt Service Requirements prior to the Collection Date for the ad valorem taxes to be levied. (2) The amount of Net Revenues of the System, appropriated and to be set aside for the payment of the Debt Service Requirements on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (3) The amount of Debt Service Requirements to become due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (b) The amount of taxes to be levied annually each year to pay the Debt Service Requirements on the Certificates shall be the amount established in paragraph (3) above less the sum total of the amounts established in paragraphs (1) and (2), after taking into consideration delinquencies and costs of collecting such annual taxes. SECTION 13: PledQe of Net Revenues. The City hereby covenants and agrees that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment and security of Prior Lien Obligations, all the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest on the Certificates and Additional Obligations, if issued, and the pledge of Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be 45024656.1 18 a valid and binding without further action by the City and without any filing or recording except for - the filing of this Ordinance in the records of the City. SECTiON 14: System Fund. The City covenants and agrees that all Gross Revenues (excluding eamings from the investment of money held in any special funds or accounts created for the payment and security of the Prior lien Obligations) shall be deposited as collected into a fund maintained at an official depository of the City and known on the books of the City as the "System Fund" (hereinafter called the "System Fund"). All moneys deposited to the credit of the System Fund shall be allocated, dedicated and disbursed to the extent required for the following purposes and in the order of priority shown, to wit: First: To the payment of all necessary and reasonable maintenance and operating expenses of the System as defined herein or required by statute to be a first charge on and claim against the revenues thereof, Second: To the payment of all amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior lien Obligations. Third: To the payment of the amounts pledged to the payment of the Certificates. Any Net Revenues remaining in the System Fund after satisfying the foregoing .. payments, or making adequate and sufficient provision for the payment thereof, may be _ appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Deposits to Certificate Fund. The City hereby covenants and agrees to cause to be deposited to the credit of the Certificate Fund prior to each principal and interest payment date for the Certificates from the pledged Net Revenues of the System in the System Fund, after the deduction of all payments required to be made to the special Funds or accounts created for the payment and security of the Prior lien Obligations, an amount equal to one hundred per centum (100%) of the amount required to fully pay the interest and principal payments then due and payable on the Certificates, such deposits to pay accrued interest 'and maturing principal on the Certificates to be made in substantially equal monthly installments on or before the 20th day of each month beginning on or before the 20th day of the month following the date of delivery of the Certificates to the initial purchaser. The monthly deposits to the Certificate Fund, as hereinabove provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Accrued interest received from the purchasers of the Certificates deposited to the Certificate Fund and ad valorem taxes levied, collected and deposited in the Certificate Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate Fund from the Net Revenues of the System. In addition, any proceeds of sale of the Certificates in excess of the amount required to pay the contractual obligations to be incurred (including change orders to a construction contract) shall be deposited in the Certificate Fund, which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. e 45024656.1 19 SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 17: Special Covenants. The City hereby further covenants as follows: (a) It has the lawful power to pledge the Net Revenues of the System to the payment of the Certificates in the manner herein contemplated and has lawfully exercised such power under the Constitution and laws of the State of Texas, including said power existing under V.T.C.A, Government Code, Sections 1502.056 and 1502.058 and V.T.C.A., Local Government Code, Sections 271.041, et seq. (b) Other than for the payment of the Prior Lien Obligations and the Certificates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. SECTION 18: Issuance of Prior Lien ObliQations. The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise, payable, in whole or in part, from the Net Revenues (without impairment of the obligation of contract with the Holders of the Certificates) upon such terms and conditions as the City Council may determine. Additionally, the City reserves the right to issue obligations payable, in whole or in part, from the Net Revenues of the System and, to the extent provided, secured by a lien on and pledge of the Net Revenues of equal rank and dignity with the lien and pledge securing the payment of the Certificates. SECTION 19: Application of Prior Lien ObliQations Covenants and AQreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System, and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in the ordinances authorizing the issuance of the Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders of the Prior Lien Obligations. SECTION 20: Mutilated - Destroved - Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and 45024656.1 20 _ChargeS associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Certificates. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Certificates. SECTION 21: Satisfaction of Obliaation of City. If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and the Net Revenues of the System and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Certificates or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certificates or the principal amount(s) thereof at maturity or the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Govemment Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an .. authorized escrow agent, which Government Securities have been certified by an independent ., accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Intemal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Certificates such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. e SECTION 22: Ordinance a Contract -Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or 45024656.1 21 repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 23: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section, the following terms have the following meanings: "Closing Date" means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the Regulations, of the Certificates. "Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. "Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross 45024656.1 22 _proceedS) in a manner which if made or omitted, respectively, would cause the interest on any Certificate to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not· adversely affect the exemption from federal income tax of the interest on any Certificate, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Certificates: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and _ (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at HiQher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such e investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or 45024656.1 23 with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Certificates. (f) Not Federallv Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitraae Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. (3) As additional consideration for the purchase of the Certificates by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Certificates equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be 45024656.1 24 _ accompanied by Form 8038- T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Certificates not been relevant to either party. U) Elections. The City hereby directs and authorizes the Mayor, City Manager, Deputy City Manager or Director of Finance, individually or jointly, to make elections ~ermitted or required pursuant to the provisions of the Code or the Regulations, as they deem Wnecessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 24: Sale of Certificates - Official Statement Approval. The Certificates authorized by this Ordinance are hereby sold by the City to Southwest Securities and Dain Rauscher Incorporated (herein referred to as the "Purchasers") in accordance with the Purchase Contract, dated April 23, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Bond Purchase Contract for and on behalf of the City and as the act and deed of this City Council, and in regard to the approval and execution of the Bond Purchase Contract, the City Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Purchase Contract are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, Deputy City Manager, Director of Finance, or City Secretary, one or both of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated April 23, 2001, in the reoffering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such final Official Statement _in the form and content manually executed by said officials shall be deemed to be approved by 45024656.1 25 the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 25: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest and premium, if any, received from the Purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies and guidelines, and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. Accrued interest and premium, if any, as well as all surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. SECTION 26: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending the sale of the Certificates, the investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Certificates, and shall take and have charge and control of the Initial Certificate(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, Mayor Pro Tern, City Manager, Director of Finance, Deputy City Manager and City Secretary, anyone or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General and their registration by the Comptroller of Public Accounts. In addition, such officials, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed to make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers and the initial exchange thereof for definitive Certificates. SECTION 27: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder 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 of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 28: Cancellation. All Certificates surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be 45024656.1 26 Apromptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying . Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 29: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Certificates. An executed counterpart of said opinion shall accompany the global certificates deposited with The Depository Trust Company or a reproduction thereof shall be printed on the definitive Certificates in the event the book entry only system shall be discontinued. SECTION 30: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 31: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying A Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by . reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is intended to be and shall be for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 32: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 33: Govemina Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 34: Effect of Headinas. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 35: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 36: Severabilitv. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. e 45024656.1 27 SECTION 37: Continuina Disclosure Undertakina. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person 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. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2001) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 24 of this Ordinance, being the information described in Exhibit B hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit B hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City 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 City otherwise would be required to provide financial information and operating data pursuant to this Section. 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. (c) Material Event Notices. The City 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 Certificates, if such event is material within the meaning of the federal securities laws: (1) (2) (3) (4) (5) (6) (7) (8) Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the Certificates; Modifications to rights of holders of the Certificates; Certificate calls; 45024656.1 28 e (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Certificates; and (11) Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such e information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT 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. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted underwriters to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that e authorizes such an amendment) of the Outstanding Certificates consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) 45024656.1 29 determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 38: Public MeetinQ. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 39: Effective Date. This Ordinance shall be in force and effect from and after its passage on the date shown below. PASSED AND ADOPTED, this April 23, 2001. CITY OF NORTH RICH LAND HILLS, TEXAS Mayor ATTEST: City Secretary APPROVED: City Attorney (City Seal) 45024656.1 30 e EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of April 23, 2001 (this "Agreement"), by and between the City of North Richland Hills, Texas (the "Issuer"), and Bank One, National Association, a national association duly organized and existing under the laws of the United States of America, (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligations, Series 2001" (the "Securities") in the aggregate principal amount of $3,255,000, which Securities are scheduled to be delivered to the initial purchasers on or about June 5, 2001; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the _ Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the . Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying _ Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in . Annex A attached hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close 45024736 of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the offices of the Bank located in Westerville, Ohio at the address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, ending September 30. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Deputy City Manager, Director of Finance or City Secretary, anyone or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution). 45024736 -2- e "Record Date" means the last business day of the month next preceding each interest payment date. "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Securities" means the securities defined in the recital paragraphs herein. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. e "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Paving Agent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following offices: Bank One, Texas, N.A. Attention: Securities Transfer 235 West Schrock Road Westerville, Ohio 43081-0393 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and .. making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the .Record Date (as defined in the Resolution). All payments of principal and/or interest on the 45024736 -3- Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Reaister - Transfers and Exchanaes. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and Bank may prescribe. The Bank represents and warrants its office in Fort Worth, Texas will at all times have immediate access to the Security Register by electronic or other means and will be capable at all times of producing a hard copy of the Security Register at its Fort Worth office for use by the Issuer. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. 45024736 -4- _ Section 4.03. Form of Security Reaister. The Bank, as Registrar, will maintain the .Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of e 1934, all Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section 4.06. Mutilated. Destroyed. Lost or Stolen Securities. The Issuer hereby instructs the Bank, subject to the provisions of Section 20 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. Section 4.07. Transaction Information to Issuer. The Bankwill, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange _ of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in . lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. 45024736 -5- ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents. Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counselor any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04. Mav Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. 45024736 -6- ... Section 5.05. Moneys Held by Bank - Fiduciary AccountlCollateralization. A fiduciary -account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the United States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank its directors, officers and employees, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in _connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. J Section 5.08. DTC Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. e 45024736 -7- ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. AssiQnment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on page 9. Section 6.04. Effect of HeadinQs. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and AssiQns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Severabilitv. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of AQreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire AQreement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a 45024736 -8- successor Paying Agent/Registrar has not been delivered to the resigning Agent/Registrar within sixty (60) days after the giving of such notice of resignation. e Paying Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governina Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITN ESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BANK ONE, TEXAS, N.A. BY Title: [SEAL] Attest: e Title: Address: 403 West Fourth Street PG-1 Fort Worth, Texas 76102 CITY OF NORTH RICH LAND HILLS BY Mayor ~ (CITY SEAL) Address: P. O. Box 820609 North Richland Hills, Texas 76182 Attest: City Secretary - 45024736 -9- Exhibit B to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 38 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. Statement The information contained in Tables 1 through 6 and 8 through 15 in the Official Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 45024656 - e . If FIRST SOUTHWEST COMPANY TO: Larry Koonce FROM: David Medanich DATE: April 23, 2001 RE: $5,920,000 City of North Richland Hills, Texas General Obligation Refunding and Improvement Bonds, Series 2001 (the "Bonds"); $3,255,000 Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2001 (the "Certificates") and $7,225,000 Sales Tax Revenue Refunding Bonds, Series 2001 (the "Revenue Bonds") The a negotiated sale earlier today we received a firm commitment to purchase the above referenced Bonds and Certificates from the Underwriters, Southwest Securities and Dain Rauscher Incorporated. The City's outstanding tax-supported debt is rated Aa3 and AA- by Moody's and Standard and Poor's, respectively. After receiving bond insurance quotes, we determined that it would be economical for the City to purchase insurance and sell based on the insurance company's AaaJAAA ratings. The Bonds sold at a True Interest Cost ("TIC") of 4.65% with an average life of 6.4 years. The coupon rates on the Bonds ranged from 4.25% to 5.375%. Proceeds from the Bonds will be used for street and drainage improvement and to refund the Series 1991 and Series 1993 Bonds at rates that range from 5.3% to 7.25%. As a result of the refunding, the total interest savings to the City will be approximately $594,452 for an average of $59,445 per year over 10 years. The Underwriters also committed to purchase the Certificates at a TIC of 5.08% with an average life of 10.3 years. The Certificates are being issued for street and drainage improvements. There is no refunding associated with the Certificates. The economics for the Revenue Bond refunding are not favorable under current market conditions. We will continue to monitor the issue on a day by day basis and report back to the City when conditions again become favorable. The Revenue Bonds have been rated AlIA+ by Moody's and Standard and Poor's. We have also received bond insurance quotes for the Revenue Bonds and will evaluate the economics of bond insurance at pricing. We recommend that the City award the Bonds and Certificates to Southwest Securities and Dain Rauscher Incorporated at 4.65% and 5.08%, respectively. INVESTMENT BANKERS SINCE 1946 201 Main Street. Suite 1320· Fort Worth, Texas 76102-3123· 817-332-9710· FAX 817-336-5572 ~~i·· ."." ·.'c';;··c . , CITY OF NORTH RICH LAND HILLS .partment: Finance Council Meeting Date: 4/23/2001 Subject: Consideration of Action on all Matters Pertaining to the Agenda Number: GN 2001-043 Award and Sale of $7,225,000 in Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 and Approve Resolution No. 2001-034 On Monday, April 23, 2001 the City will be selling $7,225,000 in Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds. Because this is a refunding of prior year bond issues, the Director of Finance and the City's financial advisors, First Southwest Company (FSW), are recommending that we sell all bonds on a negotiated basis. The following are reasons why a negotiated sale rather than a fixed bid sale is recommended: . Complexity and timing of refundings makes a negotiated sale preferable to a fixed bid sale. Flexibility in sizing and structure of the bond issue is important as market conditions change. A negotiated sale gives the City the flexibility to structure the issue to fit market conditions and legal requirements. A fixed bid structure does not offer this flexibility. · The negotiation process gives the City the ability to test the market and get the best deal possible on .. the day of pricing. Management and staff have set a standard of at least 4.5% present value savings ., as a bench mark for accepting the refundings. The industry standard is 3% or higher. A market resulting in 4.5% savings would save the City thousands of dollars in interest payments over the life of the bonds. The market in recent days has not been favorable for the Sales Tax Revenue Bond refunding. If the market is not favorable at the time of pricing, staff and First Southwest will continue to monitor the market to determine if a refunding on the sales tax revenue bonds can be done in the future. It is also recommended that the underwriters of Southwest Securities (SWS) and Dain Raucher (DR) be selected to market the bonds. SWS purchased the NRH 1999 bond issue and DR purchased the NRH 2000 bond issue, which reflects not only their ability to market and sell our securities, but also their interest in the City. Prior to Monday night's Council meeting the Director of Finance assisted by FSW will negotiate the sale of the bonds. The prices being offered will be compared to recent municipal sales and the current market to obtain the best possible pricing on the City of North Richland Hills bonds. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget e Other ~ ~ ~ent Head Signature Account Number Sufficient Funds Available ~ ~ F;"ooo D;,ect" , , , ,~ '''T' ',~, , CITY OF NORTH RICHLAND HILLS e Rating conferences with Standard and Poor's and Moody's were held recently. The City received ratings on this issue from both Moody's Investors Service and Standard and Poor's. Moody's upgraded the rating on the sales tax revenue bonds from A2 to A1. Standard and Poor's upgraded the rating on the sales tax revenue bonds from A to A+. The last rating on sales tax revenue bonds was done in 1995. Including G.O., C.O., water and sewer revenue bonds, and sales tax revenue bonds the City of North Richland Hills has received six credit rating upgrades in the last five years. The City mayor may not accept this sale on April 23. This will be determined depending on market conditions. If the deal is not economically feasible staff and First Southwest will continue to monitor the market to determine if a refunding can be done in the future. The results of the sale (if completed) will be submitted to City Council at the regular meeting on April 23. Upon acceptance of the bond purchase agreement, it will be necessary for City Council to award the bid and to authorize the issuance as prepared by our bond counsel, Fulbright and Jaworski. The enclosed ordinance is for your consideration to be passed on Monday, April 23. This ordinance also authorizes all the other necessary actions such as paying agent/registrar agreements. Recommendation: e Request the City Council to transact the following business in relation to the sale and issuance of bonds: I move to approve the bond purchase agreement with and authorize the issuance of $7,225,000 "City of North Richland Hills, Texas, Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001" at a true interest cost of % and adopt Resolution No. 2001-034 authorizing the issuance of such bonds. e c CITY COUNCIL ACTION ITEM e RESOLUTION NO. 2001-034 A RESOLUTION authorizing the issuance of "NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2001"; pledging certain "Pledged Revenues" of the Corporation, including "Gross Sales Tax Revenues", to the payment of the principal of and interest on said Bonds and enacting other provisions incident and related to the issuance, payment, security and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement and a Purchase Contract, and resolving other matters incident and related to the issuance and sale of the Bonds. WHEREAS, the North Richland Hills Park and Recreation Facilities Development Corporation (the "Corporation"), a non-profit corporation duly organized and existing under the laws of the State of Texas, including Vernon's Ann.Civ.St., Section 4B of Article 5190.6, as amended, has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $6,880,000 (collectively, the "Refunded Obligations") more particularly described as follows: e (1) North Richland Hills Parks and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1992, dated November 15, 1992, maturing on September 1 in each of the years 2005 through 2012, and aggregating in principal amount $4,165,000; (2) North Richland Hills Parks and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1994, dated July 1, 1994, maturing on September 1 in each of the years 2006 through 2013, and aggregating in principal amount $2,190,000 (3) North Richland Hills Parks and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1995, dated April 1, 1995, maturing on September 1 in each of the years 2008 through 2012, and aggregating in principal amount $525,000 AND WHEREAS, the Board of Directors of the Corporation hereby finds and determines that refunding bonds should be issued in accordance with the provisions of Vernon's Ann.Civ St., Article 5190.6 at this time to refund the Refunded Obligations to provide debt service savings of approximately $ and present value savings of approximately $ ; and WHEREAS, the Board of Directors hereby finds and determines such bonds can and should be issued on a parity with the outstanding and unpaid "Previously Issued Bonds" (hereinafter identified and defined), in that (i) the Treasurer of the Corporation will execute a certificate stating that, to the best of his knowledge and belief, the Corporation is not now in default as to any covenant, obligation or agreement contained in the resolution authorizing the issuance of the Previously Issued Bonds, (ii) a certificate or opinion of a certified public accountant can be obtained to the effect that, according to the books and records of the Corporation, the Gross Sales Tax Revenues received by the Corporation during any twelve (12) consecutive months out of the previous eighteen (18) months next preceding the adoption of e 45018133.1 this Resolution were equal to not less than 1.50 multiplied by the Average Annual Debt Service during such twelve consecutive month period with respect to the Parity Bonds now Outstanding and after giving effect to the issuance of the Bonds herein authorized to be issued, and (iii) the amount to be accumulated and maintained in the Reserve Fund will be increased to the extent required by the provisions of the resolutions authorizing the issuance of the Previously Issued Bonds; now, therefore BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION: SECTION 1: Authorization - Desiqnation - Principal Amount - Purpose. Bonds of the Corporation shall be and are hereby authorized to be issued in the aggregate principal amount of $ to be designated and bear the title "NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2001", hereinafter referred to as the "Bonds" to provide funds for the discharge and final payment of certain outstanding obligations of the Corporation (identified in the preamble hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, in conformity with the Constitution and laws of the State of Texas, including Vernon's Ann. Civ. Stat., Article 5190.6., as amended and V.T.C.A., Government Code, Chapter 1207. SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons, shall be dated April 15, 2001 (the "Issue Date") and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), shall be numbered consecutively from One (1) upward and shall become due and payable annually on September 1 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the following schedule: Principal Interest Stated Maturity Amount Rates 2001 $ ,000 % 2002 ,000 % 2003 ,000 % 2004 ,000 % 2005 ,000 % 2006 ,ODD % 2007 ,ODD % 2008 ,000 % 2009 ,000 % 2010 ,000 % 2011 ,000 % 2012 ,000 % 2013 ,000 % The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the per annum rates shown above (calculated on the basis of a 360-day year of twelve 3D-day months). Interest on the Bonds shall be payable on March 1 and September 1 in each year, commencing September 1 , ,2001. 45018133.1 2 _ SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, and the . interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Bank One, Texas, National Association to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, exchange and transfer of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the Corporation by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A and such reasonable rules and regulations as the Paying Agent/Registrar and the Corporation may prescribe. The President and Secretary of the Corporation are hereby authorized to execute and delivèr such Agreement in connection with the delivery of the Bonds. The Corporation covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the Corporation agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. e Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or upon their earlier redemption, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Westerville, Ohio (the "Designated Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name appear in the Security Register at the close of business on the Record Date (the 15th day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Paying Agent/Registrar is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a non-payment of interest on one or more maturities on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment for such maturity or maturities (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 Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder of such maturity or maturities appearing on the Security e Register at the close of business on the last business day next preceding the date of mailing of such notice. 45018133.1 3 SECTION 4: Redemption. (a) Optional Redemption. The Bonds maturing on and after September 1, 2012 shall be subject to redemption prior to maturity, at the option of the Corporation, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/ Registrar), on March 1, 2011 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a date set for the redemption of Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the Corporation shall notify the Paying Agent/Registrar of its decision to exercise the right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date set for the redemption thereof. The decision of the Corporation to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the Corporation. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bond by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the Corporation and at the Corporation's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (Hi) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/ Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given or waived as herein provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each registered owner of the Bonds issued under and pursuant to the provisions of this Resolution. Any Bond may, in accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of other authorized denominations upon the Security 45018133.1 4 a Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond ,., to the Designated PaymentfTransfer Office of the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender for transfer of a Bond at the Designated PaymentfTransfer Office of the Paying Agent/Registrar, one or more new certificates evidencing the Bonds, in authorized denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrender for transfer shall be registered and issued to the assignee or transferee of the previous Holders. At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated PaymentfTransfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new printed certificates evidencing the Bonds, executed on behalf of, and furnished by, the Corporation, to the Holder requesting the exchange. All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the designated office of the Paying Agent/- Registrar, or sent by United States Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be valid obligations of the Corporation, evidencing the same obligation to pay, and entitled to the same e benefits under this Resolution, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to Section 26 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. SECTION 6: Book-Entry Onlv Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the Corporation hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the Corporation and DTC (the "Depository Agreement"). e 45018133.1 5 Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the Corporation determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the Corporation covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the Corporation by the Chairman of the Board of Directors or President of the Corporation under its seal reproduced or impressed thereon and attested by the Secretary of the Corporation. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the Corporation on the Issue Date shall be deemed to be duly executed on behalf of the Corporation, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchasers and with respect to Bonds delivered in subsequent exchanges and transfers. No Bond shall be entitled to any right or benefit under this Resolution, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9D, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate upon any Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount noted in Section 1 with principal installments to become due and payable as provided in Section 2 hereof and numbered T -1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written 45018133.1 6 _ instructions from the initial purchaser(s), or the designee thereof, and such other information . and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas (to be printed on the Initial Bond(s) only), the Certificate of Registration, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Resolution and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends on insured Bonds and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the Board of Directors of the Corporation or determined by the officers executing such Bonds as evidenced by the execution thereof. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The Bonds, including the Initial Bond(s), shall be typewritten, printed, lithographed, or engraved or produced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. B. Form of Bond. REGISTERED eNO. REGISTERED $ UNITED STATES OF AMERICA STATE OF TEXAS NORTH RICH LAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BOND, SERIES 2001 Issue Date: April 15,2001 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS The North Richland Hills Park and Recreation Facilities Development Corporation (hereinafter referred to as the "Corporation"), a non-profit industrial development corporation organized and existing under the laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. S1. Ann., as amended, (the "Act"), with its principal office located in Tarrant County, Texas, for value received, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues and sources pledged under the Resolution identified below, the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) on the Stated Maturity _ date specified above and to pay interest (computed on the basis of a 360-day year of . twelve 30-day months) on the unpaid Principal Amount hereof from the Issue Date at the per 45018133.1 7 annum rate of interest specified above; such interest being payable on March 1 and September 1 of each year, commencing September 1, 2001. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated PaymentfTransfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the resolution hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the 15th day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $ (herein referred to as the "Bonds") to provide funds for the discharge and final payment of certain outstanding obligations of the Corporation (identified in the preamble hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, in conformity with the Constitution and laws of the State of Texas, including the Act and V.T.C.A., Government Code, Chapter 1207, as amended, and pursuant to a Resolution adopted by the governing body of the Corporation (herein referred to as the "Resolution"). The Bonds maturing on and after September 1, 2012 may be redeemed prior to their Stated Maturities, at the option of the Corporation, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on March 1, 2011 or on any date thereafter at the redemption price of par plus accrued interest thereon to the redemption date. At least thirty days prior to the date fixed for any redemption of Bonds, the Corporation shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Resolution. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount hereof redeemed. In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and there shall be issued to the registered owner hereof, without charge, a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided in the Resolution for the then unredeemed balance of the principal sum hereof. If this Bond is called for redemption, in whole or in part, the Corporation and the Paying Agent/Registrar shall not be required to transfer this Bond to an assignee of the Holder within 45 45018133.1 8 e days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance hereof in the event of its redemption in part. The Bonds are payable solely from and, together with the Previously Issued Bonds (identified and defined in the Resolution), equally and ratably secured by a pledge of the "Pledged Revenues" (as defined in the Resolution) received by the Corporation, including the receipts from a Sales Tax levied for the benefit of the Corporation pursuant to the Act and an election held in the City. The Bonds do not constitute a legal or equitable, pledge, charge, lien or encumbrance upon any property of the Corporation or the City of North Richland Hills, Texas (the "City") except with respect to the "Pledged Revenues". This Bond may not be paid in whole or in part from any property taxes raised or to be raised by the City and is not a debt of and does not give rise to a claim for payment against the City, except as to the sales and use tax revenues held by the City and required under the Act to be paid over to the Corporation. Neither the State of Texas, the City or any political corporation, subdivision or agency of the State of Texas shall be obligated to pay this Bond or the interest hereon and neither the faith and credit nor the taxing power of the State, the City or any other political corporation, subdivision or agency thereof is pledged to the payment of the principal of and interest on this Bond except as noted above. Subject to satisfying the terms and conditions prescribed therefor, the Corporation has reserved the right to issue additional revenue obligations payable, in whole or in part, from the "Pledged Revenues" and equally and ratably secured in like manner and effect as the Bonds. _ Reference is hereby made to the Resolution, a copy of which is on file in the principal _ office of the Paying Agent/Registrar, and to all of the provisions of which the Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the payment of the Bonds; the rights of Holders of the Bonds the terms and conditions for the issuance of additional obligations; the terms and conditions relating to the payment, transfer or exchange of this Bond; the conditions upon which the Resolution may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the Corporation and the Paying Agent/Registrar; the terms and provisions upon which the encumbrances, pledges, charges and covenants made therein may be discharged; and for the other terms and provisions contained therein. Capitalized terms used herein have the same meanings assigned in the Resolution. This Bond, subject to certain limitations contained in the Resolution, may be transferred on the Security Register only upon its presentation and surrender at the principal office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The Corporation and the Paying Agent/Registrar, and any agent of either, may treat the registered owner hereof whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as e the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the 45018133.1 9 Corporation nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of non-payment of interest on a scheduled 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 Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and covenanted that the Corporation is a non-profit industrial development corporation duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas, including the Act; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid special obligations of the Corporation have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that due provision has been made for the payment of the principal of and interest on the Bonds from the sources and in the manner provided in the Resolution. In case any provision in this Bond or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Resolution shall be construed in accordance with and shall be governed by the laws of the State of Texas. 45018133.1 10 e IN WITNESS WHEREOF, the Board of Directors of the Corporation has caused this Bond to be duly executed under the official seal of the Corporation as of the Issue Date. NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION President/Chairman of the Board of Directors ATTEST: Secretary (SEAL) C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bondes) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS e OFFICE OF THE COMPTROLLER ) ) OF PUBLIC ACCOUNTS ) REGISTER NO. ) THE STATE OF TEXAS ) 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 duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do not print on definitive bonds e 45018133.1 11 D. Form of Certificate of Paving Aaent/Registrar to Appear on definitive Bonds. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered in the name of the Registered Owner shown above under the provisions of the within-mentioned Resolution and duly approved, or a Predecessor Bond hereof duly approved, by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar located in Westerville, Ohio, is the "Designated PaymenVTransfer Office" for this Bond. Bank One, Texas, National Association, as Paying Agent/Registrar Registration date: By Authorized Signature E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section. except that the form of a single fully registered Initial Bond shall be modified as follows:: (i) immediately under the name of the bond the headings "Interest Rate _" and "Stated Maturity _" shall both be omitted;" (ii) Paragraph one shall read as follows: 45018133.1 12 e The North Richland Hills Park and Recreation Facilities Development Corporation (hereinafter referred to as the "Corporation"), a non-profit industrial development corporation organized and existing under the laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. S1. Ann., as amended, (the "Act"), with its principal office located in Tarrant County, Texas, for value received, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues and sources pledged under the Resolution identified below, the Principal Amount hereinabove stated on September 1 in each of the years and in principal amounts and bearing interest at per annum rates in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). (or so much thereof as shall not have been paid upon prior redemption) and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal Amount hereof from the Issue Date at the per annum rate of interest specified above; such interest being payable on March 1 and September 1 of each year, commencing September 1, 2001. Principal installments of this Bond are payable at its Stated Maturity or on a prepayment date to the registered owner hereof by Bank One, Texas, National Association (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Westerville, Ohio (the "Designated PaymentfTransfer Office"). Interest is payable to the registered owner of .. this Bond (or one or more Predecessor Bonds, as defined in the resolution hereinafter _ referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the 15th day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. For all purposes of this Resolution and in particular for clarity with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of revenues to the payment of the Bonds, the following definitions are provided: "Act" - The Development Corporation Act of 1979, Vernon's Ann. Civ.St. Art. 5190.6, as amended at any time. "Additional Obligations" - Bonds, notes or other evidences of indebtedness which the Corporation reserves the right to issue or enter into, as the case may be, in the future in accordance with the terms and conditions provided in Section 18 hereof and which, together with the Bonds, are equally and ratably secured by a parity pledge of and claim on the Pledged Revenues under the terms of this Resolution and a Supplemental Resolution. e 45018133.1 13 "Average Annual Debt Service" - That amount which, at the time of computation, is derived by dividing the total amount of Debt Service to be paid over a period of years as the same is scheduled to become due and payable by the number of years taken into account in determining the total Debt Service. Capitalized interest payments provided from proceeds or borrowings of the Corporation shall be excluded in making the aforementioned computation. "Board" - The Board of Directors of the Corporation. "Bonds" - The "North Rich/and Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001", dated April 15, 2001, authorized by this Resolution. "City" - The City of North Richland Hills, Texas. "Corporation" - The North Richland Hills Park and Recreation Facilities Development Corporation, a non-profit industrial development corporation organized and existing under and pursuant to the laws of the State of Texas, including Section 4B of the Act, with its principal place of business in Tarrant County, Texas. "Debt Service" - As of any particular date of computation, with respect to any obligations and with respect to any period, the aggregate of the amounts to be paid or set aside by the Corporation as of such date or in such period for the payment of the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations; assuming, in the case of obligations without a fixed numerical rate, that such obligations bear, or would have borne, interest at the maximum legal per annum rate applicable to such obligations, and further assuming in the case of obligations required to be redeemed or prepaid as to principal prior to maturity, the principal amounts thereof will be redeemed prior to maturity in accordance with the mandatory redemption provisions applicable thereto. "Depository" - A commercial bank or other qualified financial institution eligible and qualified to serve as the custodian of the Corporation's monetary accounts and funds. "Fiscal Year" - The twelve month financial accounting period used by the Corporation ending September 30 in each year, or such other twelve consecutive month period established by the Corporation. "Government Obligations" - (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the Corporation are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their 45018133.1 14 e e e acquisition or purchase by the Corporation, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. "Gross Sales Tax Revenues" - All of the revenues or receipts due or owing to, or collected or received by or on behalf of the Corporation by the City or otherwise pursuant to Section 4B of the Act and the election held August 8, 1992, less any amounts due and owed to the Comptroller of Public Accounts of the State of Texas as charges for the collection of the Sales Tax or retention by said Comptroller for refunds and to redeem dishonored checks and drafts, to the extent such charges and retention are authorized or required by law. "Outstanding" - When used in this Resolution with respect to Bonds or Parity Bonds, as the case may be, means, as of the date of determination, all Bonds and Parity Bonds theretofore sold, issued and delivered by the Corporation, except: (1) those Bonds or Parity Bonds canceled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Bonds or Parity Bonds paid or deemed to be paid in accordance with the provisions of Section 24 hereof or similar provisions of any Supplemental Resolution authorizing the issuance of Additional Bonds. (3) those Bonds or Parity Bonds that have been mutilated, destroyed, lost, or stolen and replacement obligations have been registered and delivered in lieu thereof. "Parity Bonds" - Collectively, the Previously Issued Bonds, the Bonds and Additional Obligations. "Pledged Revenues" - Collectively (i) Gross Sales Tax Revenues from time to time deposited or owing to the Pledged Revenue Fund and (ii) such other money, income, revenue, receipts or other property as may be specifically dedicated, pledged or otherwise encumbered in a Supplemental Resolution for the payment and security of Parity Bonds. "Previously Issued Bonds" - the outstanding (i) "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Bonds, Series 1992", dated November 15, 1992, and issued in the original aggregate principal amount of $7,500,000 (ii) "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Bonds, Series 1994", dated July 1, 1994, and issued in the original aggregate principal amount of $3,895,000 and (iii) "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Bonds, Series 1995", dated April 1 , 1995, and issued in the original aggregate principal amount of $2,000,000. "Required Reserve" - The amount required to be accumulated and maintained in the Reserve Fund under the provisions of Section 14 hereof. 45018133.1 15 "Sales Tax" - The local sales and use tax authorized under Section 4B of the Act, approved at an election held on August 8, 1992, and the effective date for the imposition and application of such Sales Tax within the corporate limits of the City by the Comptroller of Public Accounts of the State of Texas being January 1, 1993, together with any increases in the rate of such Sales Tax authorized and provided by law. "Supplemental Resolution" - Any resolution of the Board supplementing this Resolution for the purpose of authorizing and providing the terms and provisions of the Bonds or Additional Obligations, or supplementing or amending this Resolution for any other authorized purpose permitted in Section 18 or 25 hereof, including resolutions authorizing the issuance of Additional Obligations or pledging and encumbering income, revenues, receipts or property other than the Gross Sales Tax Revenues to the payment and security of the Parity Bonds. SECTION 11: Pledge. The Corporation hereby covenants and agrees that the Pledged Revenues, with the exception of those in excess of the amounts required for the payment and security of the Parity Bonds, are hereby irrevocably pledged to the payment and security of the Previously Issued Bonds, the Bonds and Additional Obligations, if issued, including the establishment and maintenance of the special funds required to be maintained in this Resolution and any Supplemental Resolution, all as hereinafter provided. The Corporation hereby resolves the Parity Bonds shall constitute a lien on the Pledged Revenues in accordance with the terms of this Resolution and any Supplemental Resolution, which lien shall be valid and binding without any further action by the Corporation and without any filing or recording with respect thereto except in the records of the Corporation. SECTION 12: Pledqed Revenue Fund. The Corporation has heretofore established and hereby agrees and covenants to maintain a fund or account at a Depository for the deposit of the Pledged Revenues as received and collected by the Corporation, which fund or account is known on the books and records of the Corporation as the "Pledged Revenue Fund". All Pledged Revenues deposited to the credit of such Fund shall be accounted for separate and apart from all other revenues, receipts and income of the Corporation and, with respect to the Gross Sales Tax Revenues, the Corporation shall further account for such funds separate and apart from the other Pledged Revenues deposited to the credit of the Pledged Revenue Fund. All Pledged Revenues deposited to the credit of the Pledged Revenue Fund shall be appropriated and expended to the extent required by this Resolution and any Supplemental Resolution for the following uses and in the order of priority shown: First: To the payment of the amounts required to be deposited in the Bond Fund for the payment of Debt Service on the Parity Bonds as the same becomes due and payable. Second: To the payment of the amounts required to be deposited in the Reserve Fund to establish and maintain the Required Reserve in accordance with the provisions of this Resolution and any Supplemental Resolution. Third: To the payment of amounts required to be deposited in any other fund or account required by any Supplemental Resolution authorizing the issuance of Parity Bonds; and 45018133.1 16 e Fourth: To any fund or account held at any place or places, or to any payee, required by any other resolution of the Board which authorized the issuance of obligations or the creation of debt of the Corporation having a lien on the Pledged Revenues subordinate to the lien created for the payment and security of the Parity Bonds. Any Pledged Revenues remaining in the Pledged Revenue Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other lawful purpose now or hereafter permitted by law. SECTION 13: Bond Fund. For the purpose of providing funds to pay the principal of and interest on Parity Bonds, the Corporation has established and hereby agrees and covenants to maintain a separate and special account or fund on the books and records of the Corporation known as the "NRH Park and Recreation Facilities Development Corp. Debt Service Account" (the "Bond Fund"), and all monies deposited to the credit of such Fund shall be held in a special banking fund or account maintained at a Depository of the Corporation. In addition to the amounts required to be deposited to the credit of such Fund for the payment of the Previously Issued Bonds, there shall be deposited into the Bond Fund prior to each principal and interest payment date for the Bonds from the Pledged Revenues an amount equal to one hundred per centum (100%) of the interest on and the principal of the Bonds then falling due and payable, and such deposits to pay principal and accrued interest on the Bonds shall be made in substantially equal monthly installments on or before the 20th day of each month, beginning on or before the 20th day of the month next following the delivery of the Bonds to the initial purchasers. e The required deposits to the Bond Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until (i) the total amount on deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and discharge all Parity Bonds (principal and interest) then Outstanding or (ii) the Bonds are no longer Outstanding. SECTION 14: Reserve Fund. The Corporation has established and agrees and covenants to maintain on the books and records of the Corporation a separate and special fund or account to be known as the "Reserve Account" (the "Reserve Fund"), which fund or account shall be a special banking fund maintained at a Depository. All Pledged Revenues deposited to the credit of such fund or account shall be used solely for the payment of the principal of and interest on the Parity Bonds when (whether at maturity, upon a redemption date or any interest payment date) other funds available for such purposes are insufficient, and, in addition, may be used to the extent not required to maintain the "Required Reserve", to pay, or provide for the payment of, the final principal amount of a series of Parity Bonds so that such series of Parity Bonds is no longer deemed to be "Outstanding" as such term is defined herein. In accordance with the provisions of the resolution authorizing the issuance of the Previously Issued Bonds, there is currently on deposit to the credit of the Reserve Fund the sum of $1,070,600 (the "Current Reserve"). By reason of the issuance of the Bonds, the total amount required to be accumulated and maintained in the Reserve Fund is hereby redetermined to be $ ("Required Reserve), which amount is less than the Current Reserve. _ As and when Additional Obligations are delivered or incurred, the Required Rese~e _ shall be increased, if required, to an amount equal to the Average Annual Debt Service 45018133.1 17 (calculated on a Fiscal Year basis) for all Parity Bonds then Outstanding (after giving effect to the issuance of the Additional Obligations), as determined on the date each series of Additional Obligations are delivered or incurred, as the case may be. Any additional amount required to be accumulated and maintained in the Reserve Fund shall be deposited in full to the credit of the Reserve Fund in cash immediately after the delivery of the then proposed Additional Obligations. While the cash and investments in the Reserve Fund total not less than the Required Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and when the Reserve Fund at any time contains less than the Required Reserve, the Corporation covenants and agrees to cure the deficiency in the Required Reserve by making monthly deposits to said Fund from the Pledged Revenues; such monthly deposits to be in amounts equal to not less than 1/36th of the then total Required Reserve to be maintained in said Fund and to be made on or before the 20th day of each month until the total Required Reserve then required to be maintained in said Fund has been fully restored. The Corporation further covenants and agrees that the Pledged Revenues shall be applied and appropriated and used to establish and maintain the Required Reserve and to cure any deficiency in such amounts as required by the terms of this Resolution and any Supplemental Resolution. During such time as the Reserve Fund contains the total Required Reserve, the Corporation may, at its option, withdraw all surplus in the Reserve Fund in excess of the Required Reserve and deposit such surplus in the Pledged Revenue Fund. SECTION 15: Deficiencies. If on any occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Bond Fund or Reserve Fund, such deficiency shall be cured as soon as possible from the next available Pledged Revenues, or from any other sources available for such purpose. SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the Treasurer of the Corporation (or other designated financial officer of the Corporation) shall cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund, and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly as each installment of interest and principal of the Bonds accrues or matures; such transfer of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the date of payment for the Bonds. SECTION 17: Investments - Security of Funds. Money in any Fund required to be maintained pursuant to this Resolution may, at the option of the Corporation, be invested in obligations and in the manner prescribed by the Public Funds Investment Act of 1987 (V.T.C.A., Govemment Code, Chapter 2256), including investments held in book-entry form; provided that all such deposits and investments shall be made in such a manner that the money required to be expended from any Fund will be available at the proper time or times and provided further the maximum stated maturity for any investment acquired with money deposited to the credit of the Reserve Fund shall be limited to five (5) years from the date of the investment of such money. Such investments shall be valued in terms of current market value within 45 days of the close of each Fiscal Year and, with respect to investments held for the account of the Reserve Fund, within 45 days of the date of passage of each authorizing document of the Board pertaining to the issuance of Additional Obligations. All interest and income derived from deposits and investments in the Bond Fund immediately shall be credited to, and any losses debited to, the appropriate account of the Bond Fund. All interest and interest income derived 45018133.1 18 .. from deposits in and investments of the Reserve Fund shall, subject to the limitations provided _ in Section 15 hereof, be credited to and deposited in the Pledged Revenue Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds. That money deposited to the credit of the Pledged Revenue Fund, Bond Fund and Reserve Fund, to the extent not invested and not otherwise insured by the Federal Deposit Insurance Corporation or similar agency, shall be secured by a pledge of direct obligations of the United States of America, or obligations unconditionally guaranteed by the United States of America. SECTION 18: Issuance of Additional Parity Obligations. Subject to the provisions hereinafter appearing as to conditions precedent which must be satisfied, the Corporation reserves the right to issue, from time to time as needed, Additional Obligations for any lawful purpose. Such Additional Obligations may be issued in such form and manner as the Corporation shall determine, provided, however, prior to issuing or incurring such Additional Obligations, the following conditions precedent for the authorization and issuance of the same are satisfied, to wit: (1) The Treasurer of the Corporation (or other officer of the Corporation then having the primary responsibility for the financial affairs of the Corporation) shall have executed a certificate stating that, to the best of his or her knowledge and belief, the Corporation is not then in default as to any covenant, obligation or agreement contained in the Resolution or a Supplemental Resolution. e (2) The Corporation has secured from a certified public accountant a certificate or opinion to the effect that, according to the books and records of the Corporation, the Gross Sales Tax Revenues received by the Corporation during any twelve (12) consecutive months out of the previous eighteen (18) months next preceding the adoption of the Supplemental Resolution authorizing the Additional Obligations were equal to not less than 1.50 multiplied by the Average Annual Debt Service with respect to the Parity Bonds then Outstanding and after giving effect to the issuance of the Additional Obligations then being issued. Additionally, for the purpose of providing this certificate or opinion, if the Corporation shall not have received Gross Sales Tax Revenues for a full 12 month period, one-half of the amount of sales tax revenues actually received by the City under Chapter 321, TEX.TAX CODE, may be used for the months during which the Corporation did not receive Gross Sales Tax Revenues. (3) The Required Reserve to be accumulated and maintained in the Reserve Fund is increased to the extent required. SECTION 19: Refunding Bonds. The Corporation reserves the right to issue refunding bonds to refund all or any part of the Parity Bonds (pursuant to any law then available) upon such terms and conditions as the Board may deem to be in the best interest of the Corporation, and if less than all such Parity Bonds then Outstanding are refunded, the conditions precedent prescribed (for the issuance of Additional Bonds) set forth in Section 18 above shall be satisfied, and shall give effect to the refunding. .. SECTION 20: Right to Create Subordinate Debt. Except as may be limited by a _ Supplemental Resolution, the Corporation shall have the right to issue or create any debt 45018133.1 19 payable from or secured by a lien on all or any part of the Pledged Revenues for any lawful purpose without complying with the provisions of Section 18 or 19 hereof; provided the pledge and the lien securing the payment of such indebtedness is subordinate to the pledge and lien established, made and created in Section 11 of this Resolution with respect to the Pledged Revenues to the payment and security of the Parity Bonds. SECTION 21: Confirmation and Levv of Sales Tax.(a) The Board hereby represents the City has duly complied with the provisions of the Act for the levy of the Sales Tax at the rate voted at the election held by and within the City on August 8, 1992, and such Sales Tax is being imposed within the corporate limits of the City and the revenues of such Sales Tax are being remitted to the City by the Comptroller of Public Accounts on a monthly basis. (b) While any Bonds are Outstanding, the Corporation covenants, agrees and warrants to take and pursue all action permissible to cause the Sales Tax, at said rate or at a higher rate if legally permitted, to be levied and collected continuously, in the manner and to the maximum extent permitted by law, and to cause no reduction, abatement or exemption in the Sales Tax or rate of tax below the rate stated, confirmed and ordered in subsection (a) of this Section to be ordered or permitted while any Bonds shall remain Outstanding. (c) If hereafter authorized by law to apply, impose and levy the Sales Tax on any taxable items or transactions that are not subject to the Sales Tax on the date of the adoption hereof, to the extent it legally may do so, the Corporation agrees to use its best efforts to cause the City to take such action as may be required to subject such taxable items or transactions to the Sales Tax. (d) The Corporation agrees to take and pursue all action legally permissible to cause the Sales Tax to be collected and remitted and deposited as herein required and as required by Section 4B of the Act, at the earliest and most frequent times permitted by law. (e) The Corporation agrees to use its best efforts to cause the City, to comply with Section 4B of the Act and shall cause the Gross Sales Tax Revenues to be deposited to the credit of the Pledged Revenue Fund in their entirety immediately upon receipt thereof by the City. In the alternative and if legally authorized, the Corporation shall, by appropriate notice, direction, request or other legal method, use its good-faith efforts to cause the Comptroller of Public Accounts of the State of Texas (the "Comptroller") to pay all Gross Sales Tax Revenues directly to the Corporation for deposit to the Pledged Revenue Fund. SECTION 22: Records and Accounts. While any of the Bonds are Outstanding, the Corporation agrees to keep and maintain complete financial records and accounts in accordance with generally accepted accounting principles, and following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of certified public accountants. Each such audit, in addition to whatever other matters may be thought proper by the accountant, shall particularly include the following: (1) A statement in reasonable detail regarding the receipt and disbursement of the Pledged Revenues for such Fiscal Year; and (2) A balance sheet for the Corporation as of the end of such Fiscal Year. Such annual audit of the financial records and accounts of the Corporation shall be in the form of a report and be accompanied by an opinion of the accountant to the effect that such 45018133.1 20 a examination was made in accordance with generally accepted auditing standards and contain a .. statement to the effect that in the course of making the examination necessary for the report and opinion, the accountant obtained no knowledge of any default of the Corporation on the Bonds or in the fulfillment of any of the terms, covenants or provisions of this Resolution, or under any other evidence of indebtedness, or of any event which, with notice or lapse of time, or both, would constitute a failure of the Corporation to comply with the provisions of this Resolution or if, in the opinion of the accountants, any such failure to comply with a covenant or agreement hereof, a statement as to the nature and status thereof shall be included. Copies of each annual audit report shall be furnished upon written request, to any Holders of any of said Bonds. The audits herein required shall be made within 120 days following the close of each Fiscal Year insofar as is possible. The Holders of any Bonds or any duly authorized agent or agents of such Holders shall have the right to inspect such records, accounts and data of the Corporation during regular business hours. SECTION 23: Representations as to Securitv for the Bonds. (a) The Corporation represents and warrants that, except for the Parity Bonds, the Pledged Revenues are and will be and remain free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien created in or authorized by this Resolution except as expressly provided herein. (b) The Bonds and the provisions of this Resolution are and will be the valid and a legally enforceable obligations of the Corporation in accordance with their terms and the terms .. of this Resolution, subject only to any applicable bankruptcy or insolvency laws or to any laws affecting creditors rights generally. (c) The Corporation shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged Revenues and all the rights of the Holders against all claims and demands of all persons whomsoever. (d) The Corporation will take, and use its best efforts to cause the City to take, all steps reasonably necessary and appropriate to collect all delinquencies in the collection of the Sales Tax to the fullest extent permitted by the Act. (e) The provisions, covenants, pledge and lien on and against the Pledged Revenues, as herein set forth, are established and shall be for the equal benefit, protection and security of the owners and holders of Parity Bonds without distinction as to priority and rights under this Resolution. (f) The Parity Bonds shall constitute special obligations of the Corporation, payable solely from, and equally and ratably secured by a parity pledge of and lien on, the Pledged Revenues, and not from any other revenues, properties or income of the Corporation. The Bonds may not be paid in whole or in part from any property taxes raised or to be raised by the City and shall not constitute debts or obligations of the State or of the City, and the Holders, shall never have the right to demand payment out of any funds raised or to be raised by any system of ad valorem taxation. a SECTION 24: Satisfaction of Obligation of Corporation. If the Corporation shall payor .. cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if 45018133.1 21 any, and interest on the Bonds, at the times and in the manner stipulated in this Resolution, then the pledge of the Pledged Revenues under this Resolution and all other obligations of the Corporation to the Holders shall thereupon cease, terminate, and become void and be discharged and satisfied. Bonds or any principal amount(s) shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Govemment Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Obligations have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the Bonds on the Stated Maturities thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor accepted to the Paying Agent/Registrar have been made) the redemption date thereof. The Corporation covenants that no deposit of moneys or Government Obligations will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section in excess of the amount required for the payment of the Bonds shall be remitted to the Corporation or deposited as directed by the Corporation. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall, upon the request of the Corporation, be remitted to the Corporation against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the Corporation shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 25: Resolution a Contract - Amendments. This Resolution shall constitute a contract with the Holders from time to time, be binding on the Corporation, and shall not be amended or repealed by the Corporation while any Bond remains Outstanding except as permitted in this Section. The Corporation, may, without the consent of or notice to any Holders, from time to time and at any time, amend this Resolution in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the Corporation may, with the written consent from the owners holding a majority in aggregate principal amount of the Parity Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Resolution; provided that, without the written consent of all Holders of Outstanding Bonds effected, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds or Parity Bonds, as the case may be, required to be held for consent to any such amendment, addition, or rescission. 45018133.1 22 e SECTION 26: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying AgenVRegistrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the Corporation and after (i) the filing by the Holder thereof with the Paying AgenVRegistrar of evidence satisfactory to the Paying AgenVRegistrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the fumishing to the Paying AgenVRegistrar of indemnification in an amount satisfactory to hold the Corporation and the Paying AgenVRegistrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Corporation, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Resolution equally and ratably with all other Outstanding Bonds. SECTION 27: Covenants Regardinq Tax-Exempt Status. (a) Definitions. When used in this Section 27, the following terms have the following meanings: II Closing DaM' means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. e "Code" means the Intemal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date "has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations. e "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. 45018133.1 23 "Yie/d"of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148- 4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The Corporation shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Corporation receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the Corporation shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. The Bonds are being issued to finance the costs of the Project for and on behalf of the City, a political subdivision of the State of Texas and, in connection therewith, the City and the Corporation will execute an agreement relating to the ownership, operation and maintenance of the Projects while the Bonds are outstanding and unpaid, which agreement provides that, except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the Projects shall at all times prior to the last Stated Maturity of Bonds: (1) be exclusively owned, operated and maintained by the City, and prohibits the City from using or permitting the use of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity other than a state or local govemment, unless such use is solely as a member of the general public; and (2) prohibits the City from directly or indirectly imposing or accepting any charge or other payment for use of Gross Proceeds of the Bonds or for any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the Corporation shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Corporation shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any 45018133.1 24 e Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the Corporation shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The Corporation shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The Corporation and the City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the Corporation may commingle Gross Proceeds of the Bonds with other money of the Corporation, provided that the Corporation separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. e (2) Not less frequently than each Computation Date, the Corporation shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The Corporation shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. e (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the Corporation shall pay to the United States out of the Bond Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attomey General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The Corporation shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable 45018133.1 25 amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Corporation shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. U) Elections. The Corporation hereby directs and authorizes the President, Secretary or Treasurer for the Corporation, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the Corporation reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (I) Qualified Advance Refunding. The Bonds are issued exclusively to refund the Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption of the Refunded Obligations. The Corporation represents as follows: (1) The Bonds are the first advance refunding of the Refunded Obligations, within the meaning of section 149(d)(3) of the Code. (2) The Refunded Obligations are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. (3) The initial temporary period under section 148(c) of the Code will end: (i) with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded Obligations on the Closing Date if not ended prior thereto. (4) On and after the date of issue of the Bonds, no proceeds of the Refunded Obligations will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such Refunded Obligations. (5) The Bonds are being issued for the purposes stated in the preamble of this Resolution. There is a present value savings associated with the refunding. In the issuance of the Bonds the Corporation has neither: (i) overburdened the tax-exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably 45018133.1 26 e necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material financial advantage based on arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. SECTION 28: Notices to Holders - Waiver. Wherever this Resolution provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder as it appears in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Resolution provides for notice in any manner, such notice may be waived in writing by the Holder 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 of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 29: Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the Corporation, shall be delivered to the Paying Agent/Registrar and, if not _ already canceled, shall be promptly canceled by the Paying Agent/Registrar. The Corporation . may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the Corporation may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the Corporation. SECTION 30: Sale of Bonds -Official Statement Approval. The Bonds authorized by this Resolution are hereby sold by the Corporation to Southwest Securities and Rain Rauscher Incorporated (herein referred to as the "Purchasers") in accordance with the Purchase Contract, dated April 23, 2001, attached hereto as Exhibit B and incorporated herein by reference as a part of this Resolution for all purposes. The President of the Board of Directors is hereby authorized and directed to execute said Purchase Contract for and on behalf of the Corporation and as the act and deed of this Board, and in regard to the approval and execution of the Purchase Contract, the Board hereby finds, determines and declares that the representations, warranties and agreements of the Corporation contained in the Purchase Contract are true and correct in all material respects and shall be honored and performed by the Corporation. Furthermore, the use of the Official Statement by the Purchasers in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Chairman of the Board of Directors or the President, Vice President, Secretary and Treasurer of the Corporation, one or both of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated April 23, 2001, in the _ reoffering, sale and delivery of the Bonds to the public. The President and Secretary of the . Corporation are further authorized and directed to manually execute and deliver for and on 45018133.1 27 behalf of the Corporation copies of said Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the Board of Directors and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 31: Special Escrow Agreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the Corporation and Bank One, National Association (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Resolution for all purposes, is hereby approved as to form and content, and such Agreement in substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the Corporation, is hereby authorized to be executed by the President and Secretary of the Corporation for and on behalf of the Corporation and as the act and deed of this Board of Directors; and such Agreement as executed by said officials shall be deemed approved by the Board of Directors and constitute the Agreement herein approved. Furthermore, appropriate officials of the Corporation in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 2001 NORTH RICH LAND HILLS PARK AND RECREATION DEVELOPMENT CORPORATION REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in Act, this Resolution and the Agreement. SECTION 32: Redemption of Refunded Obligations. (a) The bonds of that series known as "North Richland Hills Park and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1992", dated November 15, 1992, aggregating in principal amount $4,165,000 and more particularly described in the preamble hereof shall be redeemed and the same are hereby called for redemption on September 1, 2002, at the price of par and accrued interest to the date of redemption. The Secretary of the Corporation is hereby authorized and directed to file a copy of this resolution, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, National Association (successor paying agenVregistrar to Bank One, Texas N. A. ), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this resolution for all purposes. (b)The bonds of that series known as "North Richland Hills Park and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1994", dated July 1, 1994. aggregating in principal amount $2,190,000 and more particularly described in the preamble hereof shall be redeemed and the same are hereby called for redemption on September 1, 2004, at the price of par and accrued interest to the date of redemption. The Secretary of the Corporation is hereby authorized and directed to file a copy of this resolution, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, National Association (successor paying agenVregistrar to Bank One, Texas N. A. ), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of this resolution for all purposes. (c) The bonds of that series known as "North Richland Hills Park and Recreation Development Corporation Sales Tax Revenue Bonds, Series 1995", dated April 1, 1995. aggregating in principal amount $525,000 and more particularly described in the preamble 45018133.1 28 e hereof shall be redeemed and the same are hereby called for redemption on September 1, 2005, at the price of par and accrued interest to the date of redemption. The Secretary of the Corporation is hereby authorized and directed to file a copy of this resolution, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, National Association (successor paying agent/registrar to Bank One, Texas N. A. ), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit F and incorporated herein by reference as a part of this resolution for all purposes. The redemption of the bonds described above being associated with the advance refunding of such bonds, the approval, authorization and arrangements herein given and provided for the redemption of such bonds on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the Secretary of the Corporation is hereby authorized and directed to make all arrangements necessary to notify the holders of such bonds of the Corporation's decision to redeem such bonds on the dates and in the manner herein provided and in accordance with the respective resolutions authorizing the issuance of such bonds and this Resolution. SECTION 33: Proceeds of Sale. Immediately following the delivery of the Bonds, the proceeds of sale thereof (less certain costs of issuance, the accrued interest received from the Purchasers of the Bonds, amounts to be deposited to the reserve fund and the amounts to be deposited to the credit of the construction fund) shall be deposited with the Escrow Agent for application and disbursement in accordance with the provisions of the Agreement. The proceeds of sale of the Bonds not so deposited with the Escrow Agent for the refunding of the Refunded Obligations shall be disbursed and deposited for payment of costs of issuance, e deposited in the Bond Fund, deposited in the Reserve Fund and deposited in the construction fund, all in accordance with written instructions from the Corporation. Pending expenditure for authorized projects and purposes, the proceeds of sale of the Bonds deposited to the construction fund may be invested in authorized investments and any investment eamings realized may be expended for such authorized projects or purposes or deposited in the Bond Fund as shall be determined by the Board of Directors. All surplus proceeds of sale of the Bonds deposited in the construction fund, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Bond Fund. Additionally, on or immediately prior to the date of the delivery of the Bonds to the Purchasers, the Treasurer of the Corporation shall cause to be transferred in immediately available funds to the Escrow Agent from moneys on deposit in the interest and sinking fund maintained for the payment of the Refunded Obligations the sum of $ to accomplish the refunding. SECTION 34: Market Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. An executed counterpart of said opinion shall accompany the global certificates deposited with The Depository Trust Company or a reproduction thereof shall be printed on the definitive Bonds in the event the book entry only system shall be discontinued. _ SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or typed on the _ definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP 45018133.1 29 numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the Corporation nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 36: Control and Custody of Bonds. The President of the Board shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Chairman of the Board of Directors or the President, Vice President, Secretary and Treasurer of the Corporation, anyone or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the Corporation and the issuance of the Bonds, as may be necessary for the approval of the Attorney General, registration by the Comptroller of Public Accounts and delivery of the Bonds to the initial purchasers and, together with the Corporation's financial advisor, general counsel, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 37: Benefits of Resolution. Nothing in this Resolution, expressed or implied, is intended or shall be construed to confer upon any person other than the Corporation, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the Corporation, the Paying Agent/Registrar and the Holders. SECTION 38: Inconsistent Provisions. All orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict and the provisions of this Resolution shall be and remain controlling as to the matters contained herein. SECTION 39: Governing Law. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 40: Severability. If any provision of this Resolution or the application thereof to any circumstance shall be held to be invalid, the remainder of this Resolution and the application thereof to other circumstances shall nevertheless be valid, and the Board hereby declares that this Resolution would have been enacted without such invalid provision. SECTION 41: Construction of Terms. If appropriate in the context of this Resolution, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 42: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. 45018133.1 30 e "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person 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. (b) Annual Reports. The Corporation shall provide annually to any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2001) financial information and operating data with respect to the Corporation of the general type included in the final Official Statement approved by Section 30 of this Resolution, being the information described in Exhibit G hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit G hereto and (2) audited, if the Corporation commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the Corporation shall provide unaudited financial statements for the applicable fiscal year to any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. e If the Corporation changes its fiscal year, it will notify any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the Corporation otherwise would be required to provide financial information and operating data pursuant to this Section. 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 any SID or filed with the SEC. (c) Material Event Notices. The Corporation 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: e 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 holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11 . Rating changes. 45018133.1 31 The Corporation shall notify any SID, in a timely manner, of any failure by the Corporation to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The Corporation shall be obligated to observe and perform the covenants specified in this Section while, but only while, the Corporation remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the Corporation in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the Corporation to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Corporation undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the Corporation's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The Corporation 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. UNDER NO CIRCUMSTANCES SHALL THE CORPORATION BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CORPORATION, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT 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. No default by the Corporation in observing or performing its obligations under this Section shall constitute a breach of or default under this Resolution for purposes of any other provision of this Resolution. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Corporation under federal and state securities laws. The provisions of this Section may be amended by the Corporation from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Corporation, but only if (1) the provisions of this Section, 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 to the date of such amendment, 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 this Resolution that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the Corporation (such as nationally recognized bond counsel) 45018133.1 32 _ determines that such amendment will not materially impair the interests of the Holders and ., beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the Corporation if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the Corporation's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the Corporation so amends the provisions of this Section, it shall include with any amended financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 43: Public Meeting. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by V.T.C.A, Government Code, Chapter 551, as amended. SECTION 44: Effective Date. This Resolution shall be in force and effect from and after its passage on the date shown below. PASSED AND ADOPTED, this April 23, 2001. NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION e President ATTEST: Secretary (Corporation Seal) e 45018133.1 33 Exhibit G To Resolution DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 42 of this Resolution. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1 . The financial statements of the Corporation appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information in Tables 1 through 4 of the Official Statement. Accounting Principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 45018133.1 34 CITY OF NORTH RICHLAND HILLS . Department: Public Works Council Meeting Date: 4/23/01 Subject: Approve Stripinq Plan on Meadow Lakes Drive Agenda Number: GN 2001-044 In an effort to reduce the traffic concerns along Meadow Lakes Drive, staff is proposing the following striping plan. The attached location map indicates the "Beginning" and "Ending" limits of the proposed plan. As shown, the proposed striping will begin at Lariat Trail. Diagram #1 indicates how the existing 4 lane striping will transition to the proposed 2 lane, 2 shoulder, continuous left turn lane configuration. The striping plan will continue as shown on Diagram #2 until the existing median begins at Skylark Circle. Diagram #3 indicates how the continuous left turn lane will end. Shoulder lanes will be added to the area where the landscaped median exists. Diagram #4 shows the proposed shoulders. This diagram also indicates the existing northbound lane from Skylark Circle to Loop 820 (next to Richland Hills Church of Christ) will be striped for 2 northbound lanes. This is being done at the request of the church to facilitate traffic flow in and out of the parking lot before and after church services. The approximate cost for the proposed striping plan is $20,000. Sufficient funds are available in the Public Works Operations Budget. Recommendation: To approve the proposed striping plan for Meadow Lakes Drive. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other í1ll,~ C;t:; tz¡/ Department Head Signature Account Number 001-6002-552.61-60 Sufficie t Funds Ävallable Finance Director L- - I ~ Jj ~ ~¡ ~ 1- :J ~I ~¡J..; ~J ., ),OO:~~" '.'.'~_ :.,1 ~ :0 J£ . ,~ . I. , " 'I _, . . < -- 1:1 I" \I~:, f-~;;;' 1':"/h. ;~, 't~J~.~ ¡¡: '"1"0 I î:, .. ., '/ ~:~! ~. -=-:'J-=-I~ ~ ~n- CD f-I <J) . 0 /. . . ",.1". 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CITY OF NORTH RICHLAND HILLS e Department: Economic Development Department Council Meeting Date: 04/23/01 Subject: Consideration of Agreement with North Hills Mall Related Agenda NumberGN 2001-045 To Construction of Skate Park and Hosting 2001 Aggressive Skaters Association World Championships at North Hills Mall - October 19-21, 2001 Resolution # 2001-033 Case Summary The Aggressive Skaters Association has approached North Hills Mall and the City of North Richland Hills for a proposal to host the 2001 ASA World Championships at North Hills Mall. This proposal is in association with Eisenberg's Skate Park, North Hills Mall and ESPN Sports. North Hills Mall developers are working on a contract to build a $2 million Extreme Skate Park in the Mall as part of the new entertainment theme at North Hills. Vicki Eisenberg has a unique relationship with the Aggressive Skaters Association and ESPN and is hoping to utilize the new construction of a Skate Park at North Hills Mall to bring exposure by hosting the ASA World Championships with extensive coverage from ESPN. e The Aggressive Skaters Association is a growing sport that includes inline skaters, skateboarding and trick bicycling. The professional association has 23 annual events that lead to the ASA World Championships. Other events that Council may be familiar with include the X-Games, Gravity Games and Extreme Games that have been broadcast on ESPN. "Extreme Sports" is a growing sport popular among 12 to 22 year olds. Staff is encouraged by the proposed event and the benefits in new exposure to the city on a national and worldwide scale with emphasis to a new teenage market segment. This event could also be a great help in kicking off the new entertainment theme at North Hills Mall and be a catalyst for promoting continued redevelopment of the Mall. After discussions with North Hills Mall, staff is proposing to seek an agreement with North Hills Mall to cover 50% of the local costs of hosting the ASA World Championships. North Hills Mall would be responsible for making the proposal and guarantees to ASA. The City of North Richland Hills would be responsible for approximately $90,000 in cash and in kind services for the three day event. As a host city we can sell a premier sponsorship at $40,000 and seek numerous local sponsors to recoup expenses. Finance Review Department Head Signature ¿'~!j~ . Director Source of Funds: ~ Bonds (GO/Rev.) e Operating Budget Other _1i2~ ...... ASA World Championships Page 1 of 1 CITY OF NORTH RICHLAND HILLS -. cost/benefit analysis has been undertaken for the proposed three-day event. The total cost would be approximately $245,000 with ASA contributing $65,000 for staging and set-up, North Hills Mall and the City of North Richland Hills contributing $90,000 each for television production fees, security, permits, bleachers, maintenance, setup and hotel rooms. The increase in cost from what was previously submitted to Council is for temporary set-up due to the incomplete construction of the Skate Park. RECOMMENDATION: Staff is recommending the City Council authorize the City Manager to enter into a contract with North Hills Mall contingent upon the following: · North Hills Mall constructs a $2 million Skate Park. · North Hills Mall secures the ASA World Championships from October 19-21, 2001. · North Hills Mall shares 50% of the cost of the local expenses for the event. · The City's cost does not exceed $90,000. · In the event, a $2 million Skate Park is not under construction or the ASA World Championships are not secured, the City of North Richland Hills is refunded all its expenses from North Hills Mall. e e ".'TV ,,"'. ...."" A "-r.,,,... .-re:.. e e e RESOLUTION NO. 2001-033 BE IT RESOLVED BY THE CITY COUNCIL OF NORTH RICHLAND HILLS, TEXAS, that: 1. The City Manager is hereby authorized to execute an Agreement with North Hills Mall to cover 50% of the local costs of hosting the Aggressive Skaters Association World Championships on October 19-21, 2001 at North Hills Mall and set aside a maximum of $90,000 in a fund account. Said agreement is conditioned on the construction of a $2 million extreme skate park within North Hills Mall property as the act and deed of the City. PASSED AND APPROVED this 23rd day of April, 2001. APPROVED: Charles Scoma - Mayor ATTEST: Patricia Hutson - City Secretary APPROVED AS TO CONTENT John Pitstick - Director of Development APPROVED AS TO FORM AND LEGALITY: Rex McEntire, City Attorney e ASA World ChampionshiQ§ Host City Evaluation North Richland Hills is being considered by the Aggressive Skaters Association (ASA) to host the uASA World Championships" at North Hills Mall on October 19 through the 21st. The ASA World Championships is the final competition in the ASA Pro Tour, the only professional skating circuit in the world for in-line skating, skateboarding, and BMX trick riding. All the Tour's events, including twenty- three competitions and ESPN's famous X-Games and NBC's Gravity Games, lead up to the ASA World Championships. Approximately, 30,000 people are expected at the event over a 3-day period. Benefits Exposure - North Richland Hills will receive a significant amount of exposure through hosting the ASA World Championships. ESPN and ESPN2 will televise the ASA World Championships for ten hours over three days in the U.S. and Abroad. There will also be two, thirty second vignettes showing a North Richland Hill's most important tourism assets that will be aired a minimum of eight times. ~e total number of viewers expected to see the ASA World Championships is 3,353,070 in the U.S., and the number viewing the event internationally should exceed the U.S. audience two-fold. North Richland Hills will also be mentioned in other forms of media including magazines, newspapers, promotional materials, website, radio, and additional domestic television exposure and syndicated broadcasts. The total media value to the host City is estimated at $1,556,400. North Hills Mall Revitalization - Hosting the ASA World Championships would help jump-start the revitalization of North Hills Mall. North Hills Mall is proposing to construct a $2 million, 70,000 square foot Skate Park. The ASA World Championships would be a very visible entrée for the Skate Park into the market. Seeing the construction of the Skate Park on television would show the public the new entertainment venues, retail, and restaurants coming to North Hills Mall. Hotel/ Motel Occupancy Revenues - Due to new hotels and motels being constructed in neighboring cities, North Richland Hills Hotel/Motel Occupancy Taxes have been steadily declining. Hotel/Motel Occupancy Tax revenues are projected at 68% of the revenues that came in fiscal year ~97/1998. Competitions held at the new skate park such as the ASA World Championships would ~ost occupancy at the City's hotels and motels and increase hotel/motel occupancy tax revenues. _rect Impact The Economic Development Department conducted an economic analysis of the ASA World Championship on the region, the City, and Government taxes. The total direct impact of the event over a four day period is as follows: Region: $2,363,244 NRH: $805,300 Government Taxes: $19,224 Costs The Aggressive Skaters Association submitted a proposal to North Hills Mall and the City of North Richland Hills to host the ASA World Championships. Based on their proposal, the City has made the following cost estimates: e ASA: North Hills Mall: NRH: Total: $65,000 $89,500 $89,500 $244,000 To assist the City and North Hills Mall in recovering costs associated with the event, ASA has offered two premiere sponsors (an $80,000 value) into the event. They are also allowing the City to develop their own sponsorship package through festivities associated with the event such as booths, sampling, and other festivities. Obliaation North Hills Mall will make a formal proposal and gaurantee to host the ASA World Championships. The City will enter into an agreement with North Hills Mall for approximately 50% of the local costs related to the event. The City and North Hills Mall plan to pursue sponsorships and in-kind contributions to cover costs to host the ASA World Championships. 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'," ". ," '-'<f-" e NI~H CITY OF NORTH RICHLAND HILLS MEMO TO: Mayor and City Council FROM: Steve Norwood, Assistant City Manager SUBJECT: Agenda Item #13 - GN 2001-045 DATE: April 20, 2001 REF: CM M#O 1-034 We wanted to let you know that we received word today that North Hills Mall has stated that their plans are changing again pertaining to the ASA World Championships at North Hills Mall. At this point they are wanting to take on the entire event solely. We are in the process of getting a letter from them and will report on it more fully at Monday nights Pre-Council meeting. As of today it looks as though it will not be necessary for Council to take action on Agenda Item #13 - GN 2001-045 on Monday night. .~~ Steve Norwood Assistant City Manager e SPN/ld -- . e Mr. John Pitstick Director of Development City of North Richland Hills, Texas 7301 N.E. Loop 820 North Richland Hills, TX 761180 Dear John: G¡1/ ~tIOt tJ¿¡5 NORTH HILLS M-A-L-L April 23, 2001 RE: ASA World Championship Financing Pursuant to our recent conversation, please be advised that North Hills Mall and Burk Collins have decided to move forward alone in their negotiations with the ASA for their up- coming world championships. While we may undoubtedly need city assistance, at this time we do not feel it appropriate to approach the City Council of North Richland Hills relative to any direct financial assistance. SK:eso cc: file Your~ very truly, ¿l ., 2>lj~~ K.~(,~ Steve King J Vice-President of Leasing 7624 Grapevine Hwy.. North Richland Hills, Texas 76180-8308. (817) 589-2236. Fax (817) 284-9730 · , CITY OF NORTH RICHLAND HILLS e Department: Administration Council Meeting Date: 04/23/01 Subject: Consideration of North Tarrant Parkway / Davis Blvd - Kimley Horn Engineering Firm Agenda Number: GN 2001-046 At our previous City Council meeting there was discussion during the Pre-Council session regarding the need to study the traffic patterns of the North Tarrant Parkway / Shady Grove Road / Davis Boulevard area. With recent developments and with planned future developments in and around the area it is becoming increasingly clear that a thorough detailed traffic study is needed. The study will analyze potential alignment issues of roadways, specifically Shady Grove Road, traffic signalization analysis, and what impact the single family development that is occurring in the areas (including Keller). Councilman Joe Tolbert initiated this request due to the significant discussion that was held at the comprehensive land use plan public hearing on March 2ih. There were questions raised about the possibility of a Shady Grove Road realignment as well as other traffic concerns. The scope of services contract is attached for your review with Kimley Horn with the primary work to be: e Kimley Horn will thoroughly examine three operational and alignment alternatives. One alternative will be a no build with the new signal at Davis Boulevard and Precinct Line Road. Another alternative will be to widen Shady Grove Road at Davis Boulevard intersection, another option will be to provide a new North-South connection between Shady Grove Road and North Tarrant Parkway or realign Shady Grove Road. Kimley Horn will prepare and attend one City Planning and Zoning Commission meeting to present and discuss the study results as well as one City Council meeting. The estimated total cost is $29,000 and should be completed in eight weeks. As part of engineering design on North Tarrant Parkway we are recommending utilizing the same firm and attach as part of their design work the analysis of the North Tarrant - Davis area. If contract is approved, we can include the cost as part of the upcoming sale of Certificate of Obligation for North Tarrant Parkway design and construction. Recommendation: To approve engineering services with Kimley Horn to study the North Tarrant Parkway - Davis Boulevard area and approve amendment to CIP Budget for funding from North Tarrant Certificate of Obligations. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other Account Number Sufficient Funds Available ,~U ~ F'o,"œ 0''''''0' ~~ ' .. ./. »YMana~# Page 1 of _ Contract # e CITY OF NORTH RICHLAND HILLS, TEXAS PUBLIC WORKS CONTRACT AGREEMENT FOR ENGINEERING SERVICES This AGREEMENT is made and entered into this day of ,2001, by and between THE CITY OF NORTH RICHLAND HILLS, hereinafter called the OWNER, and KIMLEY-HORN and ASSOCIATES, INC. , a corporation hereinafter called the ENGINEER. RECITALS This AGREEMENT is applicable to the furnishing of Basic Engineering Services by the ENGINEER to the OWNER for the Operational Analysis and Alignment Study for Shady Grove Rd., hereinafter called the PROJECT. CONTRACTUAL UNDERTAKINGS SECTION I EMPLOYMENT OF ENGINEER The OWNER agrees to employ the ENGINEER and the ENGINEER agrees to furnish the Basic Engineering Services in connection with the PROJECT as stated in Section II following, and for having rendered such services the OWNER agrees to pay to the ENGINEER compensation as stated in Section VI following. e SECTION II CHARACTER AND EXTENT OF SERVICES The BASIC ENGINEERING SERVICES to be rendered by ENGINEER, include and are limited to the Scope of Services outlined in Attachment" A". SECTION III AUTHORIZATION OF SERVICES No professional services of any nature shall be undertaken by the ENGINEER under this AGREEMENT until 'he has received written authorization from the OWNER. SECTION IV PERIOD OF SERVICE This AGREEMENT shall be effective upon execution by the OWNER and the ENGINEER, and shall remain in force until terminated under the provisions hereinafter provided in Section X. SECTION V COORDINATION WITH THE OWNER The ENGINEER shall hold up to two (2) conferences with the OWNER, or its representatives in accordance with the Scope of Services, to the end that the project shall have full benefit of the OWNER'S EXPERIENCE AND KNOWLEDGE OF EXISTING NEEDS AND FACILITIES, AND BE CONSISTENT WITH ITS CURRENT POLICIES AND CATRUCTION STANDARDS. To implement this coordination, the OWNER shall make available to the ENGINEER fo~e in planning the project, all existing plans, maps, field notes, statistics, computations and other data in his possession relative to existing facilities and to the project without additional cost to the ENGINEER, and upon which the ENGINEER may rely. Page 1 e , I SECTION VI THE ENGINEER'S COMPENSATION For and in consideration of the Basic Engineering Services to be rendered by the ENGINEER, as cited in Section II above, the OWNER shall pay and the ENGINEER shall receive the compensation hereinafter set forth: e e 1. BASIC ENGINEERING SERVICES Compensation for the Basic Engineering Services of the PROJECT, the ENGINEER will provide the services described in the Scope of Services (shown in Attachment "A") on a labor fee plus expense basis. Labor fees to be computed on the basis of labor hours charged to the project and the Kimley-Horn Billing Rate Schedule in effect at the time services are rendered (shown in Attachment "B"). Computer equipment use, in- house duplicating and blueprinting, facsimile, local mileage, telephone, postage, reproduction, and telephone use will not be charged separately, but will be covered by "Allocation." Allocation is an amount equal to six percent (6%) of the labor fee, and will be added to each invoice to cover direct expenses. Subcontractor charges (other than KHA's Traffic Count Subcontractor) will only be paid for if previously approved by the City in writing. All other itemized direct non-labor and subcontractor (including KHA's Traffic Count Subcontractor) expenses approved by the City will be paid at cost plus 10%. All permitting, application, and similar project fees will be paid directly by the OWNER. The total compensation to the ENGINEER for the Basic Engineering Services will not exceed $29,000 without additional negotiation and authorization. Payment to the ENGINEER shall be due in monthly installments made upon receipt of an invoice from the ENGINEER outlining the employee's name, amount of hours worked by each employee, the employee's hourly billing rate, and the total amount charged for each employee. 2. ADDITIONAL SERVICES (if needed) Services other than those set forth in the Scope of Services shall constitute Additional Services. Additional Services, such as attendance at meetings, other than those included in the Scope of Services, or any other services, such as additional analyses, or coordination with TxDOT, shall be performed only with OWNER's authorization, and shall be computed the same as Basic Engineering ~ervices. Additional Services will be in addition to the total amount in sub-paragraph 3 below. 3. TOTAL COMPENSATION Total compensation to the ENGINEER for "Basic Engineering Services" shall be a total amount not to exceed $29,000 without additional negotiation and authorization. The compensation for engineering services stated does not include sales tax. If the State of Texas imposes a sales tax on engineering services during the time of this contract, then the Owner agrees to pay the sales tax as an extra payment, above and beyond the agreed compensation for engineering services. Page 2 e SECTION VII REVISION OF REPORTS, PLANS, SPECIFICATIONS AND OTHER DOCUMENTS The revision and redrafting of reports and other documents during the formative stages as an orderly process in the development of the project to meet the needs of the OWNER shall be considered as part of the Basic Engineering Services; however after a definite plan has been approved by the OWNER, if a decision is subsequently made by the OWNER, which, for its proper execution involves extra services and expenses for changes in, or additions to the drawings, specifications or other documents, or if the ENGINEER incurs extra labor cost or expenses due to delays imposed on him from causes not within his control, the ENGINEER shall be compensated for such extra expense which shall be considered Additional Services. The ENGINEER is responsible for notifying the OWNER as soon as possible if this circumstance arises. SECTION VIII OWNERSHIP OF DOCUMENTS Original report materials and documents, represent the product of training, experience, and professional skill, and accordingly belong to, and remain the property of the ENGINEER who produced them and the OWNER, regardless of whether the instruments were copyrighted or whether the project for which they were prepared is executed. The OWNER shall be furnished with three original Final Reports. The OWNER will use these reports and data in connection with the project only as a source of information. SECTION IX COMPLETION SCHEDULE See Attachment "C" for completion schedule. e SECTION X TERMINATION Either party to this AGREEMENT may terminate the AGREEMENT by giving to the other 30 days notice in writing. Upon delivery of such notice by the OWNER to the ENGINEER, the ENGINEER shall discontinue all services in connection with the performance of this AGREEMENT and shall proceed to cancel promptly all existing orders and contracts insofar as such orders or contracts are chargeable to this AGREEMENT. As soon as practicable after receipt of notice of termination, the ENGINEER shall submit a statement, showing in detail the services performed under this AGREEMENT to the date of termination. The OWNER shall then pay the ENGINEER promptly that proportion of the prescribed charges which the services actually performed under this AGREEMENT bear to the total services called for under this AGREEMENT less such payments on account of the charges as have been previously made. Copies of all completed or partially completed designs, plans and reports prepared under this AGREEMENT shall be delivered to the OWNER when and if this AGREEMENT IS TERMINATED, but subject to the restrictions, as to their use, as set forth in Section VIII. SECTION XI LIABILITY The ENGINEER agrees to indemnify, and hold City whole and harmless against any and all claims for damages, costs, and expenses of persons or property that may arise out of, or be occasioned by, or from any negligent act, error or omission of ENGINEER, or an agent, servant, or employee of ENGINEER in the execution or performance of this Contract, without regard to whether such persons are under the direction of City agents or employees. The ENGINEER agrees to carry an errors and omissions type of professional liability insurance policy and will furnish the OWNER a certificate of insurance for the OWNER'S file. e Page 3 SECTION XII SUCCESSORS AND ASSIGNMENTS _ The OWNER and the ENGINEER each binds himself and his successors, executors, administrators and assigns to~ other party of this AGREEMENT and to the successors, executors, administrators, and assigns of such other party, in respect to all covenants of this AGREEMENT. Except as above, neither the OWNER nor the ENGINEER shall assign, sublet or transfer his interest in this AGREEMENT without the written consent of the other. Nothing herein shall be constituted as creating any personal liability on the part of any officer or agent of any public body which may be a party thereto. SECTION XIII SPECIAL CONDITIONS Special conditions, under the AGREEMENT, include and are limited to those listed hereinafter; the conditions shall become part of the AGREEMENT: Other provisions contained in the written "Authorization of Services", issued by the OWNER, under Section III, and accepted by the ENGINEER, shall become part of the AGREEMENT. EXECUTED in three counterparts (each of which is an original) on behalf of ENGINEER by its VICE PRESIDENT, as shown below, and on behalf of the OWNER by its CITY MANAGER (thereunto duly authorized) this day of ,2001. CITY OF NORTH RICHLAND HILLS, Texas KIM LEY-HORN and ASSOCIATES, INC. e By: Larry Cunningham, City Manager ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM: Rex McEntire, City Attorney e Page 4 e ATTACHMENT "An SCOPE OF SERVICES Project Understanding Shady Grove Road is an existing two-lane east-west collector roadway that intersects Davis Blvd. just north of North Tarrant Parkway. When the proposed Wal-Mart site develops, Shady Grove Road will terminate at Davis Blvd and a new signal will be installed at Davis Blvd. and Precinct Line Road. This study will examine three (3) operational and alignment alternatives. The first alternative will examine the operational impacts of installing a new signal at Davis Blvd. and Precinct Line Road. The second alternative will examine the impacts of providing a two-lane approach along Shady Grove Road at Davis Blvd. The final alternative will examine the feasibility and operational impacts of providing a new north-south connection between Shady Grove Road and North Tarrant Parkway. Our evaluation will consider existing conditions, traffic forecasts, and preliminary construction costs for each alternative. Task 1 - Data Collection The study area includes those existing and planned thoroughfares north of North Tarrant Parkway shown on the CITY's current Thoroughfare Plan. e KHA will gather existing Thoroughfare Plans and Street Maps from the City of North Richland Hills and the City of Keller. KHA will gather available aerial survey maps and subdivision site plans that are specific to the study area and transportation related. This information will be used to define the existing conditions within the study area. KHA will make field observations and collect AM and PM peak hour turning movement counts at the following intersections: 1. Davis Blvd. at North Tarrant Parkway; 2. Davis Blvd. at Shady Grove Road; 3. Davis Blvd. at Precinct Line Road; 4. North Tarrant Parkway at Smithfield Road; and 5. Shady Grove Road at Precinct Line Road. KHA will collect 24-hour directional tube counts at the following locations: 1. Davis Blvd. between North Tarrant Parkway and Precinct Line Road; 2. Shady Grove Road west of Davis Blvd.; and 3. North Tarrant Parkway between Davis Blvd. and Castle Creek Road. KHA will gather from the City of North Richland Hills the latest copy of the Wal-Mart traffic impact analysis (TIA) prepared by Sverdrup, Inc. e The combination of the existing traffic counts and the site generated traffic developed, as part of the Wal-Mart TIA will be used to evaluate the existing and future operations of area roadway system. Page 5 e Task 2 - Evaluate Operational and Alignment Alternatives In order to accomplish the goals of the study, KHA will examine three (3) operational and alignment alternatives. These alternatives outlined below will examine the engineering and public issues regarding future improvements or modifications to Shady Grove Road. It should be noted that each alternative assumes a completed 6-lane divided section along North Tarrant Parkway. Alternative A - No Build with New Signal at Davis Blvd. and Precinct Line Rd. The introduction of a new signal at Precinct Line Road and Davis Blvd. may potentially create additional gaps in traffic along Davis Blvd. If created, the additional gaps could provide more opportunities for vehicles to turn on and off of Shady Grove Road. This alternative will serve as a baseline condition assuming no additional improvements are made along Shady Grove or along Davis Blvd. KHA will perform an AM and PM peak hour capacity analysis for the intersection of Davis Blvd. and Shady Grove Road. The analysis will include the existing signalized intersection at North Tarrant Parkway and the future signalized intersection at Precinct Line Road. The analysis will also assume that the opposing Wal-Mart site access drive will be limited to right-in/right-out only. As part of the analyses, KHA will calculate the maximum back of queue along Shady Grove Road. KHA will attempt to validate these queue calculations based on field observations made during the AM and PM peak hours. Alternative B - Widen Shady Grove Rd. at Davis Blvd. e This alternative examines the impact of providing a two-lane approach along Shady Grove Road at Davis Blvd. The addition of a second lane or simply a right-turn lane could impact the long queues and delays experienced by motorists during the AM and PM peak hours. A right-turn lane could allow vehicles turning right to bypass vehicles, turning left and turn freely onto the shoulder. KHA will perform an AM and PM peak hour capacity analysis to determine the operational impacts of adding a right-turn lane. This analysis will also assume that a signal will be in place at Precinct Line and Davis Blvd. Again, KHA will calculate the maximum back of queue for both left- and right- turning vehicles. These values will be compared to the queue lengths for Alternative A. Alternative C - Provide New North-South Connection between Shady Grove Road and North Tarrant Parkway or Realign Shady Grove Road This alternative will examine the feasibility and operational impacts of providing a new north-south Connection between Shady Grove Road and North Tarrant Parkway or realign the existing Shady Grove Road to intersect North Tarrant Parkway. Each alternative assumes that the existing Shady Grove would terminate west of Davis Blvd. in a cul-de-sac. Using the mapping gathered in Task 1, KHA will perform an aerial reconnaissance to develop two (2) conceptual alternatives for a new north-south connection between Shady Grove Road and North Tarrant Parkway and the realignment of Shady Grove Road to intersect North Tarrant Parkway. This will include: 1. Determining the apparent right-of-way available; 2. An investigation of potential impediments to extending the roadway, such as major developments, potential environmental constraints, and severe topography; 3. Identification of major drainage structures; and 4. A conceptual determination and order of magnitude of the right-of-way taking required. e Page 6 , I , . e Exhibits will be prepared to show the conceptual alternatives. Preliminary construction cost projections will be prepared for each conceptual alternative. Using the traffic count data collected in Task 1, KHA will evaluate the operational impacts of providing a new north-south connection or realigning Shady Grove Road to intersect North Tarrant Parkway. KHA will reassign the existing traffic along Shady Grove Road to North Tarrant Parkway and the study intersections listed in Task 1. KHA will perform AM and PM peak hour capacity analyses to determine if the intersections can accommodate the additional traffic. If it is determined that roadway or intersection improvements are necessary from a capacity standpoint, KHA will identify the types of improvements needed to create an effective roadway system for the study area. Task 3 - Documentation KHA will prepare a Final Report that documents the study methodology, traffic volumes, analysis results, conceptual alternatives, project drawings, and recommendations for mitigation improvements (if necessary) for each Alternative. KHA will prepare and submit three (3) copies of the Final Report to the CITY. Meetings KHA will prepare for and attend up to two (2) meetings with the CITY. e KHA will prepare for and attend one (1) CITY Council meeting to present and discuss the study results. e Page 7 , . ATTACHMENT "B" e KIM LEY-HORN AND ASSOCIATES, INC. Billing Rate Schedule Effective January 1, 2001 through December 31, 2001 Principal $150-160 Brad Tribble, P.E. $150 Wayne Kurfees, P.E. $150 Charlie Staples, P.E. $150 Senior Professional $110-135 Brian Shamburger, P.E. $120 Professional $80-100 David Halloin $100 George Roland $100 Lori Reyes $90 Stephanie Felton $85 Technical Support $50-100 Support $ 50-60 Hilda Herrera $55 e Tencha Johnson $50 Jennifer Cordova $50 The staff listed above includes, but is not limited to, the anticipated personnel assigned to this project. e Page 8 e . . e , I ATTACHMENT "C" COMPLETION SCHEDULE TASK DATE OF COMPLETION 1 . City Council Award of Engineering Services Contract April 23, 2001 2. Completion of Final Report June 18, 2001 This schedule is exclusive of OWNER review time. Additional Services, if requested, will be performed in a timely manner upon authorization by the OWNER. e Page 9 e AUTHORIZE SETTLEMENT WITH ADRON HICKMAN . e GN 2001-047 I move that we approve the agreement with Mr. Adron Hickman as presented by legal counsel during Executive Session. . e Announcements and Information April 23, 2001 Announcements The new cultural arts event,"A Lotta Night Music Concert Series," will be hosting Joey Love's Blues Xpress on Friday, April 27. The concerts are free and held at 7:00 p.m. at Green Valley Park, 7701 Smithfield Road. Call 817-427-6600 for information. Early voting for the City Council and Crime Control and Prevention District elections is being held through Tuesday, May 1. Registered voters can vote at City Hall from 8:00 a.m. - 5:00 p.m. Election Day for City Council Places 1,3,5,7 and for the Crime Control and Prevention District Election is May Sth from 7:00 a.m. - 7:00 p.m. Call 427-6000 to determine your specific voting location. Information April 26 Citizens Police Academy Police Administration 7:00 p.m. 817-427-7000 April 28 Opening Ceremony for Corporate Challenge Northfield Park MavS Paws for the Cause Walk a Thon Call 427-6570 to obtain an application. Mav8 Masterworks Series Fort Worth Opera NRH Public Library 7:00 p.m. . I I I I I I I I I I I I I I I I I I II NllH CITY OF NORTH RICHLAND HILLS, TEXAS $5,920,000 GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2001 AND $3,255,000 TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 Monday, April 23, 2001 The following ratings have been assigned: MBIA Insured Underlying Credit RatinS!: II Aa3 II Moody's Investors Service, Inc. II Aaa II Standard & Poor's Rating Group A Division of McGraw-Hill, Inc. "AAA" "AA_" PREPARED By: II FIRST SOlJ11l\lÆST COMPANY I I I I I I I I I I I I I I I I I I I $ Moody'. Investors Service '!!1 Global Credit RfttNll'Ch Municipal Credit Research New Issue Published 19 Apr 2001 North Richland Hills (City of) TX Contacts Kristin Button Jody Savant Linda Lipnick 214-220-4383 214-220-4382 212-553-1617 Moody's Rating Issue Rating General Obligation Limited Tax Refunding and Improvement Bonds, Series 2001 Sale Amount $5,950,000 Expected Sale Date 04/23/01 Rating Description General Obligation Limited Tax Aa3 Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2001 Sale Amount $3,255,000 Expected Sale Date 04/23/01 Rating Description General Obligation Limited Tax Aa3 MOODY'S ASSIGNS Aa3 RATING TO THE CITY OF NORTH RICHLAND HILLS [TX] GENERAL OBLIGATION BONDS, SERIES 2001 AND TAX AND WATERWORKS & SEWER SYSTEM REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 AFFECTS $63 MILLION IN DEBT Opinion Moody's Investors Service has assigned a Aa3 rating to the City of North Richland Hills [TX] General Obligation Refunding and Improvement Bonds, Series 2001, and the Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2001. The rating also applies to the City's $73.8 million of outstanding debt. The rating is reflective of the City's growing tax base, manageable debt level, and favorable financial performance. The bonds are secured by a continuing ad valorem tax on all taxable property within the City, within the limits prescribed by law. Additionally, the Certificates of Obligation are further secured by a limited pledge of surplus Net Revenues of the City's Waterworks and Sewer System not in excess of $1 ,000. The bond proceeds will be used to refund a portion of the City's outstanding Tax and Golf Course Revenue Refunding Bonds, Series 1991 and GO Bonds Series 1993. The refunding will produce an estimated $500,000 in savings for the City. Approximately $900,000 of the bonds and the total amount of the certificates will be issued for street and drainage improvements. I I I I I I I I I I I I I I I I I I I North Richland Hills is located in northeast Tarrant County, and is approximately 10 miles northeast of downtown Fort Worth, and 25 miles northwest of downtown Dallas. Due to the City's location within the Dallas/Fort Worth Metroplex, the City has enjoyed the growth that the Metroplex has experienced in recent years. The City's fiscal 2000 assessed valuation of a sizable $2.34 billion has grown at an average rate of 8.8% annually over the past three years. New construction and redevelopment have been adding to the tax base and Moody's expects this trend will continue. Future projects that are underway in the City include a new Home Depot, a new super Wal-Mart, and redevelopment of the local mall to include a big screen movie theater and popular retail shops and restaurants. Factors contributing to the attractiveness of the City for businesses are the availability of the Freeport Exemption which allows "goods in transit" to benefit from the absence of tariffs and taxes, and the City's close location to expanding highway accessibility. Moody's believes that the tax base will continue to expand given the City's location within the Dallas/Fort Worth Metroplex and recent plans for economic activity. Debt burdens of the City are high but manageable at 3.0% direct and 6.6% overall. These debt burdens include sales tax revenue bonds that are supported by a %% sales tax. The Birdville Independent School District accounts for almost half of the City's total debt. The City has $2.9 million of bonds authorized but unissued which the City plans to issue in 2002. The issuance of the bonds will have little impact on the debt burden due to tax base growth. The principal rate of retirement is rapid with 68.1 % retired in ten years and all debt matures in 18 years. The trend of favorable financial performance supported by management's due diligence, has led to an ample financial position as reflected by the City's healthy Undesignated General Fund balance of $7.4 million or 27.3% of General Fund revenues for the 2000 fiscal year. General Fund revenues are composed of property taxes contributing 48%, sales taxes at 26%, and charges for service at 14%. The City levies a 2% sales tax, of which 1 % is for sales and use tax, %% is for economic development, and %% is for crime control and prevention. Sales tax growth has continued to increase each year averaging 7% growth annually for the past three years. Increased collections are being realized due to new retail development. Moody's expects financial operations will continue to be well maintained with the City's tax base growth and fiscally conservative management. KEY STATISTICS: 2001 population: 56,500 2000 full valuation: $2.36 billion 2000 full value per capita: $41,765 Debt burden: 6.3% Payout of principal (10 years): 68% FYOO Undesignated General Fund balance: $7.4 million (27.3% of General Fund revenues) © Copyright 2001 by Moody's Investors Service, 99 Church Street, New York, NY 10007. All rights reserved. I I I I I I I I I I I I I I I I I I I STANDARD PUB Lie F'I NAN C E ,~, POOR'S Publication date: 17-Apr-2001 Reprinted from RatingsDirect Analysis North Richland Hills, Texas; Tax Secured, General Obligation Analyst: Paul Jasin, Dallas (1) 214-871-1424; Alexander M Fraser, Dallas (1) 214-871-1406 Credit Profile $3.3 mil muni debt muni issue ser 2001 due 2021 AA- Sale date: 23-APR-2001 $6 mil muni debt muni issue ser 2001 due 2021 AA- Sale date: 23-APR-2001 AFFIRMED $2.465 mil. North Richland Hills GO bnds ser 1998 dtd 05/01/1998 due 02115/1999- 2018 AAAlAA-(SPUR) $1.700 mil. North Richland Hills GO bnds ser 1999 dtd 04/15/1999 due 02/15/2000- 201220152018 AAAlAA-(SPUR) $2.580 mil. North Richland Hills GO bnds ser 2000 dtd 05/0112000 due 02/15/2001- 2020 AAAlAA-(SPUR) $5.395 mil, North Richland Hills GO rfdg bnds ser 1997 dtd 09/01/1997 due 02/15/1998 2002-2012 AAAlAA-(SPUR) $2.195 mil. North Richland Hills tax & wtrwrks & swr sys (lid pledge) rev certs of oblig ser 2000 dtd 05/0112000 due 02/1512001-2020 AAAlAA-(SPUR) $3.200 mil. North Richland Hills tax and wtrworks & swr sys (Itd pledge) rev cert of oblig ser 1999 dtd 04/15/1999 due 02/1512000-20152017 2019 AAAlAA-(SPUR) $6,110 mil. North Richland Hills wtrwks & swr sys Itd pledge rev certs of oblig ser 1998 dtd 05/01/1998 due 02/15/1999-2018 AAAlAA-(SPUR) OUTLOOK: STABLE Rationale Outlook Economv Finances Rationale The rating on North Richland Hills, Texas' certificates of obligation reflects the full faith and credit pledge of the city. The rating reflects: · Participation in the strong Dallas-Fort Worth area economy, · Above-average wealth indicators, · Good financial performance with steady levels of reserves, and · Healthy assessed value (AV) growth. Partially offsetting these strengths are a high debt burden and carrying charges, although a rapid rate of debt repayment somewhat mitigates this risk. North Richland Hills (population 56,500) is in the mid-cities area of Tarrant County ('MA'/Stable), near Dallas-Fort Worth International Airport. The city began as a bedroom community and has since developed a strong retail and commercial base. Retail sales are 37% above both the state's and nation's levels. The city's ongoing development is largely attributed to its proximity to Fort Worth, Texas (8.5 miles away); Dallas, Texas (26.0 miles); and the Dallas-Fort Worth Airport (10.0 miles). Although the city's local economy remains somewhat limited, city residents participate in the vibrant Dallas-Fort Worth MSA In the city itself, leading employers include Birdville Independent School District (875 employees), North Hills Hospital (767), Kimberty Clark/Technology Division (713), and MEGA Life and Health Insurance Center (600). The city's wealth levels are well above the state's and nation's averages, with median household effective buying income at 139% and 132% of the state's and nation's levels, respectively. Unemployment was 2.43% in 2000 and compares favorably against the state (4.30%) and national averages (3.90%). Outlook The stable outlook reflects Standard & Poor's expectation that management will continue to maintain a good financial position despite the city's growth. The outlook also reflects the expectation that obligations incurred by the city, related to the town center development, will not materially affect the city's general fund operations. Economy New developments and redevelopment are strengthening the tax base. The city's property tax base has demonstrated healthy growth, increasing 35% from fiscal 1997 to $2.4 billion in fiscal 2001. The city's tax base is diverse with the 10 leading taxpayers accounting for 8.4% of total AV. With roughly 25% of the city's land still available for development, the city is poised to benefit from further residential and commercial development. Through public and private cooperation, a 330-acre new town center project is being developed in the city. The project will be a mixed-use development, which will include 650 custom houses, 800 apartments and town houses, 160,000 square feet of stores and restaurants, and 600,000 square feet of office space. It is estimated that the project will add between $550-$650 million in property I I Debt I I I I I I I I I I I I I I I I I values over the next 10 years. A tax increment financing district has been formed to fund about $25 million for infrastructure and $42 million for additional projects. Of this amount, the city expects to issue $34.7 million in certificates of obligation in fiscals 2000-2005. The certificates will provide funds for infrastructure improvements, a new library, a new recreation center, and a conference and performing arts center, all of which will be in the town center development. Participating entities in the tax increment financing district include Tarrant County, Tarrant County Hospital District, and Tarrant Community College. Finances Historically, the city's financial position has been strong. The city posted surpluses during fiscals 1996-2000, which increased the fiscal 2000 unreserved general fund balance to $7.4 million, or 30% of expenditures. While the city's policy is to maintain at least 15% of unreserved expenditures, in practice, it has been consistently well above this figure. Fiscal 2001 revenues are projected at $28 million and expenditures at $27.8 million. Debt Excluding the city's self-supporting debt, overall net debt is moderate at $2,220 per capita, but high as a percent of true value (5.3%). Debt service expenditures are a high 25% of the combined general and debt service fund. Principal repayment, however, is rapid with 68% repaid in 10 years. Debt proceeds will fund a variety of street, drainage, and recreation. The city expects to issue another $3 million from 2002-2005. This report was reproduced from Standard & Poor's RatingsDirect, the premier source of real-time, Web-based credit ratings and research from an organization that has been a leader in objective credit analysis for more than 140 years. To preview this dynamic on-line product, visit our RatingsDirect Web site at www.standardandpoors.com/ratingsdirect. Standard & Poor's. Setting The Standard. St4tul4rd & Poor's Z!2 A DiPØieIt øfTftd.Gw."'_~ Published by Standard & Poor's, a Division of The McGraw-Hili Companies, Inc. Executive offices: Avenue of the Americas, New York, NY 10020. Editorial offices: 55 Water Street, New York, NY 10041. Subscriber services: (1) 212-438-7280. Copyright 2001 by The McGraw-Hili Companies, Inc. Reproduction in whole or in part prohibited except by permission. All rights reserved. Information has been obtained by Standard & Poor's from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Standard & Poor's or others, Standard & Poor's does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. I I I I I I I I I I I I I I I FINAL $5,920,000 City of North Rich/and Hills, Texas General Obligation Refunding & Improvement Bonds, Series 2001 DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I 913012001 - - - - 913012002 295,000.00 4.250% 342,264.58 637,264.58 9130/2003 375,000.00 4.250% 240,893.75 615,893.75 9130/2004 580,000.00 4.250% 220,600.00 800,600.00 913012005 600,000.00 4.250% 195,525.00 795,525.00 9130/2006 620,000.00 4.250% 169,600.00 789,600.00 9130/2007 645,000.00 4.250% 142,718.75 787,718.75 9130/2008 675,000.00 4.375% 114,246.88 789,246.88 9/30/2009 695,000.00 4.500% 83,843.76 778,843.76 9/30/2010 470,000.00 4.500% 57,631.26 527,631.26 9/3012011 485,000.00 4.625% 35,840.63 520,840.63 9130/2012 50,000.00 4.750% 23,437.50 73,437.50 913012013 50,000.00 4.875% 21,031.25 71,031.25 9130/2014 50,000.00 5.000% 18,562.50 68,562.50 913012015 50,000.00 5.125% 16,031.25 66,031.25 9130/2016 50,000.00 5.125% 13,468.75 63,468.75 9130/2017 50,000.00 5.250% 10,875.00 60,875.00 913012018 45,000.00 5.250% 8,381.25 53,381.25 9130/2019 45,000.00 5.250% 6,018.75 51,018.75 9130/2020 45,000.00 5.375% 3,628.13 48,628.13 9/30/2021 45,000.00 5.375% 1,209.38 46,209.38 Total 5,920,000.00 - 1,725,808.37 7,645,808.37 YIELD STATISTICS Accrued Interest from 04/1512001 to 06/05/2001........................................................................ 36,305.55 Average Life................................................................. .............._............................................... 6.404 Years True Interest Cost (TIC)............................................................................................................. 4.6508189% First Southwest Company Public Finance File = GO Debt.sf-2001 GO Ref pricing v4-lssue Summa/}' 4/2312001 4:11 PM I I I I I I I I I I I I I I I First So Public F, I I I I I I I I FINAl $5,920,000 City of North Rich/and Hills, Texas General Obligation Refunding & Improvement Bonds, Series 2002 REFUNDING ONL Y DEBT SERVICE COMPARISON Date Total P+I Net New DIS Old Net DIS Savings 9/3012001 (29,864.58) (29,864.58) 9130/2002 526,493.75 526,493.75 585,902.50 59,408.75 9/30/2003 522,706.25 522,706.25 583,677.50 60,971.25 9/30/2004 709,537.50 709,537.50 768,310.00 58,772.50 9130/2005 706,587.50 706,587.50 765,522.50 58,935.00 9130/2006 702,787.50 702,787.50 762,557.50 59,770.00 913012007 703,031.25 703,031.25 762,707.50 59,676.25 9/3012008 706,715.63 706,715.63 765,006.25 58,290.62 9/3012009 698,531.26 698,531.26 759,837.50 61,306.24 913012010 449,568.76 449,568.76 509,050.00 59,481.24 9/3012011 445,059.38 445,059.38 502,900.00 57,840.62 Total 6,171,018.78 6,141,154,20 6,735,606.67 594,452.47 PRESENT VALUE ANALYSIS SUMMARY (NET TO NET) NET PRESENT VALUE BENEFIT.................... ........... .... ............................ ... .................................................. '" $386,427.82 NET PV BENEFIT / $4,890,000 REFUNDED ..PRINCIPAL................................................................................ 7.902% uthwest Company inance File = GO Debt.sf-2001 GO Ref pricing v4-GO Refunding 4/2312001 4:11 PM I I I I I I I I I I I I I I I I I I I FINAl $5,920,000 City of North Rich/and Hills, Texas General Obligation Refunding & Improvement Bonds, Series 2002 REFUNDING ONL Y SUMMARY OF BONDS REFUNDED ISSUE Maturity Type of Bond Coupon Maturity Value Call Date Call Price txgfrevrefbds91 9/0112002 Serial Coupon 6.500% 265,000 9/0112001 100.000% txgfrevrefbds91 9/01/2003 Serial Coupon 6.600% 280,000 9/01/2001 100.000% txgfrevrefbds91 9/0112004 Serial Coupon 6.700% 300,000 9/0112001 100.000% txgfrevrefbds91 9/0112005 Serial Coupon 6.750% 320,000 9/0112001 100.000% txgfrevrefbds91 9/0112006 Serial Coupon 6.850% 340,000 9/01/2001 100.000% txgfrevrefbds91 9/0112007 Serial Coupon 6.900% 365,000 9/0112001 100.000% txgfrevrefbds91 9/01/2008 Serial Coupon 6.900% 390,000 9/0112001 100.000% txgfrevrefbds91 9/01/2009 Serial Coupon 7.000% 415,000 9/0112001 100.000% txgfrevrefbds91 9/01/2010 Serial Coupon 7.000% 445,000 9/0112001 100.000% txgfrevrefbds91 9/0112011 Serial Coupon 7.000% 470,000 9/0112001 100.000% Subtotal 3,590,000 - gobds93 2/15/2004 Serial Coupon 7.250% 190,000 2/15/2003 100.000% gobds93 2/15/2005 Serial Coupon 5.800% 200,000 2/15/2003 100.000% gobds93 2/15/2006 Serial Coupon 5.300% 210,000 2/15/2003 100.000% gobds93 2/15/2007 Serial Coupon 5.450% 220,000 2/1512003 100.000% gobds93 2/15/2008 Serial Coupon 5,550% 235,000 2/1512003 100.000% gobds93 2/1512009 Serial Coupon 5.500% 245,000 2/15/2003 100.000% Subtotal 1,300,000 Total 4,890,000 First Southwest Company Public Finance File = GO Debt.sf-2oo1 GO Refpricing v4-GO Refunding 4/2312001 4:11 PM I I I I I I I I I I I I I I I $3,255,000 City of North Rich/and Hills, Texas Tax & Waterworks & Sewer System Surplus Revenue Certificates of Obligation Series 2001 DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I 9/30/2001 - - - - 9/3012002 165,000.00 4.500% 205,745.84 370,745.84 913012003 165,000.00 4.500% 145,956.26 310,956.26 9130/2004 165,000.00 4.500% 138,531.26 303,531.26 913012005 165,000.00 4.500% 131,106.26 296,106.26 9130/2006 165,000.00 4.500% 123,681.26 288,681.26 9/30/2007 165,000.00 4.500% 116,256.26 281,256.26 9/30/2008 165,000.00 4.500% 108,831.26 273,831.26 9130/2009 165,000.00 4.500% 101,406.26 266,406.26 913012010 165,000.00 4.500% 93,981.26 258,981.26 9/30/2011 165,000.00 4,625% 86,453.13 251,453.13 9/30/2012 165,000.00 4.750% 78,718.75 243,718.75 9/30/2013 160,000.00 4.875% 70,900.00 230,900.00 9/30/2014 160,000.00 5.000% 63,000.00 223,000.00 913012015 160,000.00 5.125% 54,900.00 214,900.00 9130/2016 160,000.00 5.250% 46,600.00 206,600.00 913012017 160,000.00 5.250% 38,200.00 198,200.00 9/30/2018 160,000.00 5.250% 29,800.00 189,800.00 9/30/2019 160,000.00 5.250% 21,400.00 181,400.00 9/3012020 160,000.00 5.375% 12,900.00 172,900.00 913012021 160,000.00 5.375% 4,300.00 164,300.00 Total 3,255,000.00 - 1,672,667.80 4,927,667.80 FINAL YIELD STATISTICS Accrued Interest from 04/15/2001 to 06/05/2001...................................................................... 21,818.58 Average Life.............. ........................................... ..........,... .......... ...... ......... ..... ........... ............. 10.257 Years True Interest Cost (TIC).... ............ ............................. .............. ...... .... ... .........., ........... ....... ....... 5,0850674% First Southwest Company Public Finance File = GO Debt.sf-2001 GO Ref & CO pricing v4-CO 4/2312001 4:12 PM I I I I I I I I I I I I I I I I I I I I I I I ~ £/.2d ê;2æ CZ)~- CZ):>¡"";¡ -< E- CZ)~ ~E- ~;2 ~ ~ < o ~ ~ CZ) ô ~ o ~ ~ ~ CZ) ~ U ~ o E- CZ) s:: .... = = _N = <'-1 ... ~ ~ .... = ... ~ ~ í-'~ <'-1 <'-1 ="0 ~ = ~ Q ~~ ~.. <'-1 = = ~ .... e = ~ "0 ~ = Q = ... - Q., "5 e æ:; -= = 't = Q bIJ Z .5 ,-"0 Q = .è>cS .... ~ U~ = = = Q =.... =-= N.!:,I) =" - ~.c ~o ~ = ~ ~ = ~ .,¡; ~ = ~ t"- V) N = .... 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( ) u~ o s:: g .8 ~ ..... lr'¡ ~ lr'¡ OJ) ~:.= ~..c ~o (/J a ~ 00 - N o - ~ \0 0'\ N - "<:t ('f') ~ lr'¡ t'-- 0'\ I 00 I 0'\ (/J~ - - æ "'t:I § :Et'-- C,)O'\ ~~ '€ ·ê ~ ( ) <+-<CZ) o (/J~ þ] ..... 0 uQ:I o s:: o 0 0..... ~ ..... o ~ o OJ) -..... - ~..c ao - ~ ~ ('f') ('f') ('f') o - (/J a ~ 0'\ o o r' ~ ('f') N o N "<:t - \0 lr'¡ ~ ('f') N lr'¡ \0 ('f') ('f') ~ lr'¡ t'-- 0'\ I 00 N I "<:t t'-- 0'\ I 00 N I "<:t ( ) "'t:I ::s c s:: to:! ~ ~~ ~ ~ ~"'t:I ( ) ( ) E-~ (/J~ "'t:I SEt' =:r:: ..... 0'\ "'t:I .5 0'\ §8:: :E s·ê C,) ( ) ( ) ~t;;CZ) >. ~ ~CZ)s:: 1:: 1-<.8 ~~~ <+-< ( )..... oCZ);:õ .€]2 U (/J 0 O~(/J 01-<2 o~ ff ~ lr'¡1:,t;::;: lr'¡ ( ). .... ~tat:: ~~8 I I OFFICIAL STATEMENT Dated April 23, 2001 Ratings: Moody's: "Aaa" S&P: "AAA" MBIA Insured - See ("Other Information - Ratings" herein) I NEW ISSUE - Book-Entry-Only In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax pllIpOses under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum tax on corporations. I THE BONDS WILL NOT BE DESIGNATED AS "QUALIFIED TAX-EXEMPT OBLIGA nONS" FOR FINANCIAL INSTITUTIONS I $5,920,000 CITY OF NORm RICHLAND HILLS, TEXAS (Tarrant County) GENERAL OBLIGATION REF1JNDING AND IMPROVEMENT BONDS, SERIES 2001 Dated Date: April 15, 2001 Due: February 15, as shown below I PA YMJ:NT TERMs . . . Interest on the $5,920,000 City of North Richland Hills, Texas General Obligation Refunding and Improvement Bonds, Series 2001 (the "Bonds") will accrue ITom April 15, 2001 (the "Dated Date"), will be payable February 15 and August 15 of each year, commencing Februa¡y 15, 2002, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereofNo pbysical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying AgenURegistrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Bonds and Certificates - Book-Entry-Only System" herein. The initial Paying AgentlR.egistrar is Bank One, NA, Fort Worth, Texas (see "The Bonds and Certificates - Paying AgenURegistrar"). I I AUTHORITY FOR ISSUANCE . . . The Bonds are issued pursuant to the Constitution and general laws of the State of Texas (the "State"), including particularly Vernon's Texas Codes Annotated ("V.T.C.A."), Texas Govemment Code, Chapters 1207 and 1331, as amended, and an election held in the City of North Richland Hills (the City"), and are direct obligations of the City, payable ITom a continuing ad valorem tax levied on all taxable property within the limits prescribed by law, as provided in the ordinance authorizing the Bonds (the "Bond Ordinance") (see "The Bonds and Certificates _ Authority for Issuance"). I PuRPOSE. . . Proceeds ITom the sale of the Bonds will be used to refund a portion of the City's outstanding debt, to-wit, $3,590,000 Tax and Golf Course Revenue Refunding Bonds, Series 1991 and $1,300,000 General Obligation Bonds, Series 1993 (collectively, the "Refunded Bonds") in order to lower the overall debt service requirements of the City. See "Schedule I - Schedule of Refunded Bonds". Proceeds from the sale of the Bonds will also be used for street and drainage improvements and to pay the costs of issuance associated with the sale of the Bonds. I A1BIA I Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by MBIA Insurance Corporation simultaneously with the delivery of the Bonds. I MATURITY SCHEDULE· Maturity Maturity Amount February 1 5 Rate Yield Amount February 15 Rate Yield $ 295,000 2002 4:2šõ% 3:4õ% $ 50,000 2012 4.750% 4.86% 375,000 2003 4.250% 3.75% 50,000 2013 4,875% 4.97% 580,000 2004 4.250% 3.91% 50,000 2014 5.000% 5.07% 600,000 2005 4.250% 4.04% 50,000 2015 5.125% 5.17% 620,000 2006 4.250% 4.17% 50,000 2016 5.125% 5.25% 645,000 2007 4.250% 4.29% 50,000 2017 5,250% 531% 675,000 2008 4375% 4.43% 45,000 2018 5.250% 5.35% 695,000 2009 4.500% 4.55% 45,000 2019 5.250% 5.41% 470,000 2010 4.500% 4.63% 45,000 2020 5.375% 5.45% 485,000 2011 4.625% 4.72% 45,000 2021 5.375% 5.46% (Accrued Interest from April 15, 2001 to be added) I I I I REDEMPTION. . . The City reserves the right, at its option, to redeem Bonds having stated maturities on and after Februa¡y 15,2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2011, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. SEPARATE IssUJ:s . . . The Bonds are being offered by the City concurrently with the "City of North Richland Hills, Texas Tax and Waterworks and Sewer System (Surplus) Revenue Certificates of Obligation, Series 200 I" (the "Certificates"), under a common Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the "Obligations", The Bonds and Certificates are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its tenns for payment, the security for its payment, the rights of the holders, and other features. Ll:GALITY . . . The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Fonn of Bond Counsel's Opinions"). Certain legal matters will be passed upon for the Underwriters by McCall, Parkhurst, and Horton LLP, Dallas, Texas, Counsel for the Underwriters. I I' I DJ:LIVJ:RY. . . It is expected that the Bonds will be available for delivery through The Depository Trust Company on June 5, 2001. SOUTHWEST SECURITIES DAIN RAUSCHER INCORPORATED I I OFFICIAL STATEMENT Dated April 13, 2001 Ratings: Moody's: "A.a" S&P: "AAA" MBIA Insured - See ("Other Information - Ratings" herein) NEW ISSUE - Book-Entry-Only I In the opinion of Bond Counsel, interest on the Certificates will be excludable ftom gross income for federal income tax pwposes under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum tax on cœporations. I 11IE CERTIFICA'IES WILL NOT BE DESIGNATED AS "QUALIFŒD TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS I 53,255,000 CITY OF NORTH RlCHLAND mLLS, TEXAS (I'arrant County) TAX AND WATERWORKS AND SEWER SYSl'EM (SURPLUS) REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 Dated Date: April 15, 2001 Due: February 15, as shown below I PAYMENT TERMs . . . Interest on the $3,255,000 City of North Richland Hills, Texas Tax and Waterworks and Sewer System (Swplus) Revenue Certificates of Obligation, Series 2001 (the "Certificates") will accrue from April 15, 2001 (the "Dated Date"), will be payable February 15 and August 15 of each year, commencing Febrwuy 15, 2002, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Certificates will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Certifieates wiD be made to the ownen thereof. Principal of, premium, if any, and interest on the Certificates will be payable by the Paying AgentlRegistrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Bonds and Certificates - Book-Entry-Only System" herein. The initial Paying AgentlRegistrar is Bank One, NA, Fort Worth. Texas (see "The Bonds and Certificates _ Paying AgentlRegistrar"). I I AUTHORITY fOR ISSUANCE. . . The Certificates are issued pursuant to the Constitution and general laws of the State of Texas (the "State"), particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and constitute direct obligations of the City of North Richland Hills, Texas (the "City"), payable ftom a combination of (i) the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a pledge of surplus Net Revenues of the City's Waterworks and Sewer System as provided in the ordinance authorizing the Certificates (the "Certificate Ordinance") (see "The Bonds and Certificates - Authority for Issuance"). I PuRPosE . . . Proceeds from the sale of the Certificates will be used for the pwpose of constructing street improvements (including utilities repair, replacement, aod relocation) and drainage incidental thereto, and the payment of professional services related to the constructioo aod financing of the aforementiooed projects. A1BIA I Payment of the principal of and interest on the Certificates when due will be insured by a municipal bond insurance policy to be issued by MBIA Insurance Cmporation simultaneously with the delivery of the Certificates. I MATURITY SCHEDULE" Amount Maturity Rate Yield Amount Maturity Rate Yield $ 165,000 2002 4.500% 3.40% S 165,000 2012 4.750% 4.88% 165,000 2003 4.500% 3.75% 160,000 2013 4.875% 5.00% 165,000 2004 4.500% 3.91% 160,000 2014 5.000% 5.09% 165,000 2005 4.500% 4.04% 160,000 2015 5.125% 5.17% 165,000 2006 4.500% 4.19% 160,000 2016 5.250% 5.25% 165,000 2007 4.500% 4.31% 160,000 2017 5.250% 5.33% 165,000 2008 4.500% 4.45% 160,000 2018 5.250% 5.35% 165,000 2009 4.500% 4.55% 160,000 2019 5.250% 5.41% 165,000 2010 4.500% 4.63% 160,000 2020 5.375% 5.45% 165,000 2011 4.625% 4.74% 160,000 2021 5.375% 5.46% (Accrued Interest from April 15, 2001 to be added) I I I I REDEMPTION. . . The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15,2011, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. SEPARATE ISSUES. . . The Certificates are being offered by the City concurrently with the "City of North Richland Hills, Texas, General Obligation Refunding and hnprovement Bonds, Series 2001" (the "Bonds"), and such Certificates and Boods are hereinafter sometimes referred to collectively as the "Obligations". The Certificates and Bonds are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate ftom the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, and other features. I I LEGALITY . . . The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Fonn of Bond Counsel's Opinions"). Certain legal matters will be passed upon for the Underwriters by McCall, Parkhurst, and Horton LLP, Dallas, Texas, Counsel for the Underwriters. I DELIVERY. . . It is expected that the Bonds will be available for delivery through The Depository Trust Company on June 5, 2001. SOUTHWEST SECURITIES DAIN RAUSCHER INCORPORATED I 3 I I This OjJìcial Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. I No dealer, bro1ær, salesperson or other person has been authorized to give i'!formation or to maJee any representation other thon those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. I Certain i"¡ormation setforth herein has been provided by sources other than the City thot the City believes is reliable, but the City makes no representation as to the accuracy of such information. Any i'!formation and expressions of opinion herein contained are subject to change withoUl notice, and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the dole hereof. See "Other Information - Continuing Disclosure of Information" for a description of the City's undertaking to provide certain information on a continuing basis. I For purposes of compliance with Rule 15c2-12 of the Securities Exchange Commission, this document constitutes an OjJìcial Statement of the City with respect to the Bonds that has been deemed "final" by the City as of its date except for the omission of no more than the information permitted by Rule 15c2- 12. I THE BONDS AND THE CERTIFICATES ARE EXEMPT FROM REGISTRATION WITH THE SECURlTlES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE BONDS AND THE CERTIFICATES IN ACCORDANCE WITH APPUCABLE SECURlTlES LAW PROVISIONS OF THE JURISDICTION IN WHICH THESE SECURITIES HAVE BEEN REGISTERED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. I NEITHER THE CITY NOR THE UNDERWRITERS MAKE ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT REGARDING THE DEPOSITORY TRUST COMPANY OR ITS BOOK-ENTRY-ONLY SYSTEM, AS SUCH INFORMATION HAS BEEN FURNISHED BY THE DEPOSITORY TRUST COMPANY. I IN CONNECTION WITH THE OFFERING OF THE BONDS AND THE CERTIFICATES, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AND/OR THE CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. I TABLE OF CONTENTS I OFFICIAL STATEMENT SUMMARY......................... 6 CITY OFFICIALS, STAFF AND CONSULTANTS..... 8 ELECTED OFFICIALS .............m............................................8 SELECTED ADMINISTRATIVE STAFF.....................................8 CONSULTANTS AND ADVISORS ............................................ 8 I INTRODUCTION ............................................................9 I PLAN OF FINANCING ................................................... 9 THE BONDS AND CERTIFICATES........................... II I BOND INSURANCE ......................................................15 I TAX INFORMATION ...................................................17 TABLE I - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT ..............................................,...20 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORy....... ..................................... .................. 21 TABLE 3 - VALVA TION AND GENERAL OBLIGATION DEBT HISTORy..... .................... ................................ ..... .... 22 TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY 22 TABLE 5 - TEN LARGEST TAXPAYERS .............................22 TABLE6 - TAXADEQUACY..,...........................................23 TABLE 7 - ESTlMATEDOVERLAPPING DEBT ....................23 I i DEBT INFORMATION .................................................24 TABLE 8 - PRo-FoRMA GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS ........................................ 24 TABLE 9 - INTEREST AND SINKING FuND BUDGET PROJECTION ....... ..... ........... ....... ...... ............... .... ..... 24 TABLE 10 - COMPUTATION OF SELF-SUPPORTING DEBT.. 25 TABLE 11 - AUTIlORlZED BUT UNISSUED GENERAL OBLIGATION BONDs................................................ 25 TABLE 12 - OTHER OBLIGATIONS...................................... 26 I I I FINANCIAL INFORMATION..................................... 27 TABLE 13 - GENERAL FuND REVENUES AND ExpENDITURE HISTORy............... ................................... ............. ...27 TABLE 14 - MUNICIPAL SALES TAXHISTORY..................28 TABLE 15 - CURRENTlNVEsTMENTS.m..............................31 TAX MATTERS ............................................................ 32 OTHER INFORMATION ............................................. 34 RATINGs... ...............,..................... ................ ...,.................34 LmGATION ........................................................................34 REGISTRATION AND QUALIFICATION OF BONDS AND CERTIFICATES FOR SALE..........................................34 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PuBLIC FuNDS IN TExAs......................................................34 LEGAL OPINIONS. ....... ................ .... ...... .'.................. ..........35 AUTHENTICITY OF FINANCIAL DATA AND ÛTHER INFORMATION ..... .............,......... ......... ........ .... .........35 CONTINUING DISCLOSURE OF INFORMATION ..............m....35 FINANCIAL ADVISOR......... ......... ......... ......... .... ........ ..........36 VERlFICA TION OF ARITHMETICAL AND MA THEMA TICAL COMPUTATIONS ........ .......... .............. .,...... ............. ..37 FORWARD-LOOKING STATEMENTS DISCLAIMER ................37 UNDERWRITING... ................ ....... ... ....... ..... ... ............ ..........38 APPROVAL OF OFFICIAL STATEMENT .................................38 SCHEDULE OF REFUNDED BONDS .......................Schedule I APPENDICES GENERAL INFORMATION REGARDING THE CITy................ A ExcERPTS FROM THE ANNuAL FINANCIAL REPORT ......... B FORM OF BOND COUNSEL'S OPINIONS .............m.............. C SPECIMEN BOND INSURANCE POLICy............................... D The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement. 5 I I USE OF PROCEEDS ....................... Proceeds from the sale of the Bonds will be used to refund a portion of the City's outstanding debt, to-wit, $3,590,000 Tax and Golf Course Revenue Refunding Bonds, Series 1991 and $1,300,000 General Obligation Bonds, Series 1993 (collectively, the "Refunded Bonds") in order to lower the overall debt service requirements of the City. See "Schedule I - Schedule of Refunded Bonds". Proceeds from the sale of the Bonds will also be used for street and drainage improvements and to pay the costs of issuance associated with the sale of the Bonds. I I Proceeds from the sale of the Certificates will be used for the purpose of constructing street improvements (including utilities repair, replacement, and relocation) and drainage incidental thereto, and the payment of professional services related to the construction and financing of the aforementioned projects. I I RATINGS ..................................... The Bonds and Certificates are rated "Aaa" by Moody's Investors Service, Inc. ("Moody's") and "AAA" by Standard & Poor's Ratings Services, A Division of the McGraw-Hill Companies, Inc. ("S&P") through an insurance policy to be issued by MBIA Insurance Corporation. The uninsured tax supported debt of the City is rated "AaJ" by Moody's and "AA-" by S&P (see "Other Infonnation - Ratings"). I BOOK-ENTRY-ONL Y SYSTEM ...................................... The definitive Bonds and Certificates will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds and Certificates may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds and Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds and Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds and Certificates (see liThe Bonds and Certificates - Book-Entry-Only System "). I I PAYMENT RECORD ..... ........... ...... The City has never defaulted on the payment of its bonded indebtedness. I SELECTED FINANCIAL INFORMATION Ratio G.O. Fiscal Net Per Capita General Per Tax Debt Year Estimated Taxable Net Taxable Obligation Capita to Taxable %of Ended City Assessed Assessed (G.O.) G. O. Tax Assessed Total Tax 9-30 Population(l) Valuation (2) Valuation Tax Debt (3) Debt Valuation Collections 1997 52,757 $1,752,991,454 $ 33,228 $49,955,141 $ 947 2.85% 99.82% 1998 52,800 1,833,197,816 34,720 57,095,141 1,081 3.11% 99.45% 1999 54,850 1,961,955,687 35,769 58,140,141 1,060 2.96% 99.23% 2000 55,635 2,134,155,901 38,360 58,812,289 1,057 2.76% 98.93% 2001 56,500 2,359,719,271 41,765 58,127,359 (4) 1,029 2.46% 93.53% (5) I I I I I I (1) Estimate of City Planning Department. (2) As reported by the Tarrant Appraisal District on City's annual State Property Tax Reports; subject to change during the ensuing year. (3) Includes self-supporting debt. (4) Projected, includes the Bonds and Certificates. Excludes the Refunded Bonds. (5) Collections for partial year only, through March 1,2001. For additional infonnation regarding the City, please contact: I I LaITy Koonce Director of Finance City of North Richland Hills P.O. Box 820609 or North Richland Hills, Texas 76182-0609 (817) 427-6167 David Medanich Laura Alexander First Southwest Company 201 Main Street, Suite 1320 Fort Worth, Texas 76102-3123 (817) 332-9710 I 7 I I OFFICIAL STATEMENT RELATING TO I 55,920,000 GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2001 $3,255,000 TAX AND WATERWORKS AND SEWER SYSTEM (SURPLUS) REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001 I INTRODUCTION I This Official Statement, which includes the Appendices hereto, provides certain infonnation regarding the issuance of $5,920,000 City of North Richland Hills, Texas, General Obligation Refunding and Improvement Bonds, Series 2001 (the "Bonds") and $3,255,000 City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Surplus) Revenue Certificates of Obligation, Series 2001 (the "Certificates"). Capitalized tenns used in this Official Statement have the same meanings assigned to such tenns in the Bond Ordinance and Certificate Ordinance to be adopted on the date of sale of the Bonds and Certificates (collectively, "The Ordinances") which will authorize the issuance of the Bonds and Certificates, respectively, except as otherwise indicated herein. I I There follow in this Official Statement descriptions of the Bonds and Certificates and certain infonnation regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained trom the City's Financial Advisor, First Southwest Company, Dallas, Texas. I DESCRIPTION OF TIlE CITY . . . The City is a political subdivision and municipal corporation of the State, duly organized and existing under the laws of the State, including the City's Home Rule Charter. The City was incorporated in 1953, and first adopted its Home Rule Charter in 1964. The City operates under a CouncillManager fonn of government with a City Council comprised of the Mayor and seven Councilmembers. The tenn of office for the Mayor and the Councilmembers is two years with the tenns of the Mayor and three of the Councilmembers' tenns expiring in even-numbered years and the terms of the other four Councilmembers expiring in odd-numbered years. The City Manager is the chief administrative officer for the City. Some of the services that the City provides are: public safety (police and fire protection), highways and streets. water and sanitary sewer utilities, health services, culture and recreation, public improvements, planning and zoning, and general administrative services. The 2000 Census population for the City was 55.635, with an estimated 2001 population of 56,500. The City covers approximately 18.29 square miles. For additional infonnation relating to the City, see "Appendix A - General Infonnation Regarding the City." I I I PLAN OF FINANCING I PuRPoSE. . . Proceeds trom the sale of the Bonds will be used to refund a portion of the City's outstanding debt, to-wit, $3,590,000 Tax and Golf Course Revenue Refunding Bonds, Series 1991 and $1,300,000 General Obligation Bonds, Series 1993 (collectively, the "Refunded Bonds") in order to lower the overall debt service requirements of the City. Proceeds trom the sale of the Bonds will also be used for street and drainage improvements and to pay the costs of issuance associated with the sale of the Bonds. See "Schedule I - Schedule of Refunded Bonds" for a detailed listing of the Refunded Bonds and their respective call dates at par. Proceeds trom the sale of the Certificates will be used for the purpose of constructing street improvements (including utilities repair, replacement, and relocation) and drainage incidental thereto, and the payment of professional services related to the construction and financing of the aforementioned projects. REFUNDED BoNDS. . . The principal and interest due on the Refunded Bonds are to be paid on the scheduled interest payment dates and the respective redemption dates of such Refunded Bonds, trom funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement") between the City and Bank One, NA, Fort Worth, Texas (the "Escrow Agent"). The Ordinance provides that from the proceeds of the sale of the Bonds received from the Underwriters, the City will deposit with the Escrow Agent an amount necessary, together with other available funds, to accomplish the discharge and final payment of the Refunded Bonds on their respective redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the "Escrow Fund") and used to purchase direct obligations of the United States of America (the "Federal Securities"). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds. I I I I I Grant Thornton, L.L.P., a nationally recognized accounting finn, will verify at the time of delivery of the Bonds to the Underwriters thereof the mathematical accuracy of the schedules that demonstrate the Federal Securities will mature and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest on the Federal Securities will not be available to pay the Bonds (see "Other Infonnation - Verification of Arithmetical and Mathematical Computations"). I By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of all of the Refunded Bonds in accordance with applicable law. As a result of such defeasance the 9 I I I THE BONDS AND CERTIFICATES I DESCRIFI'ION OF TIlE BoNDS AND CERTIFICATES ... The Bonds and Certificates are dated April 15, 2001, and mature on February 15 in each of the years and in the amounts shown on the cover page and page 3 hereof. Interest will be computed on the basis of a 360-day year of twelve 30-day months, and will be payable on August 15 and February 15 of each year, commencing February 15, 2002. The definitive Bonds and Certificates will be issued only in fully registered form in any integral multiple of $5,000 for anyone maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds and Certificates will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds and Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds and Certificates. See "Book- Entry-Only System" herein. I I AurnoRITY FOR IssuANCE. . . The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly V.T.CA Government Code, Chapters 1207 and 1331, an election held within the City, and the Bond Ordinance. A portion of the Bonds represent voted obligations approved at an election held within the City. See "Table 11 - Authorized But Unissued General Obligation Bonds" hereafter. I I The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas. particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and the Certificate Ordinance passed by the City Council. SECURITY AND SoURCE OF PAYMENf . . . I The Bonds. . . The principal of and interest on the Bonds is payable from a continuing direct annual ad valorem tax levied by the City within the limits prescribed by law upon all taxable property in the City. I The Certificates. . . The principal of and interest on the Certificates is payable from a continuing direct annual ad valorem tax levied by the City, within limit prescribed by law, upon all taxable property in the City. Additionally, the Certificates are payable from a pledge of the surplus Net Revenues (as defmed in the Ordinance) of the City's combined Waterworks and Sewer System (the "System"), such pledge of the Net Revenues for the payment of the Certificates being junior and subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien Obligations" (as defmed in the Ordinance) now outstanding and hereafter issued by the City. The City reserves and retains the right to issue Prior Lien Obligations without any limitations as to principal amount, and the Certificate Ordinance imposes no terms, conditions or restrictions on the issuance of such Prior Lien I I TAX RATE LIMITATION. . . All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt within the limit prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 taxable assessed valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of$I.50 per $100 Taxable Assessed Valuation. I I OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem the Bonds or Certificates, or both, having stated maturities on and after February 15,2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2011, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds or Certificates are to be redeemed, the City may select the maturities of Bonds and Certificates, as the case may be, to be redeemed. If less than all the Bonds or Certificates of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Bonds and Certificates are in Book-Entry-Only fonn) shall determine by lot the Bonds and Certificates, or portions thereof, within such maturity to be redeemed. If a Bond or Certificate (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond or Certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. I I I NOTICE OF REDEMPTION. . . Not less than 30 days prior to a redemption date for the Obligations, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Obligations to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN NOTWITHSTANDING WHETHER ONE OR MORE REGISTERED OWNERS MA Y HAVE FAILED TO RECEIVE SUCH NOTICE. If an Obligation (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Obligation (or the portion of its principal sum to be redeemed) shall become due and payable, and, if monies for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. I I I II I I has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer fonn or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. I I DTC may discontinue providing its services as securities depository with respect to the Bonds or Certificates, or both at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds and Certificates are required to be printed and delivered. I The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bonds and Certificates will be printed and delivered. I USE OF CERTAIN TERMS IN OTHER SECTIONS OF TIllS OFFICIAL STATEMENT. In reading this Official Statement it should be understood that while the Obligations are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds and Certificates, 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 Trust Agreement will be given only to DTC. I I Infonnation concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City. I EFFEer OF TERMINATION OF BOOK-ENTRY-ONLY SYSTEM. In the event that the Book-Entry-Only System is discontinued by DTC or the use of the Book-Entry-Only System is discontinued by the City, printed securities certificates will be issued to the respective holders and the Bonds and the Certificates, as the case may be, will be subject to transfer, exchange and registration provisions as set forth in the Ordinances and summarized under "The Bonds and Certificates - Transfer, Exchange and Registration" below. I PAYING AGENTIREGISTRAR. . . The initial Paying Agent/Registrar is Bank One, NA, Fort Worth, Texas. In the Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds or Certificates, as the case may be, are duly paid and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perfonn the duties and services of Paying Agent/Registrar for the Bonds and Certificates. Upon any change in the Paying Agent/Registrar for the Bonds or Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds and Certificates affected by the changes by United States mail, first class, postage prepaid. which notice shall also give the address of the new Paying Agent/Registrar. I I Interest on the Obligations shall be paid to the registered owners appearing on the registration books of the Paying Agent/Registrar at the close of business on the Record Date (hereinafter defined), and such interest shall be paid (I) by check sent United States Mail, flJ'St class postage prepaid to the address of the registered owner recorded in the registration books of the Paying Agent/Registrar or (ii) by such other method, acceptable to the Paying Agent/Registrar requested by, and at the risk and expense of, the registered owner. Principal of the Obligations will be paid to the registered owner at their stated maturity or earlier redemption upon presentation to designated payment/transfer office of the Paying Agent/Registrar. If the date for the payment of the principal of or interest on the Obligations shall be a Saturday, Sunday, a legal holiday or a day when banking institutions in the city where the designated payment/transfer office of the Paying Agent/ Registrar is located are authorized to close, then the date for such payment shall be the next succeeding day which is not such a day, and payment on such date shall have the same force and effect as if made on the date payment was due. In the event the Book Entry Only System is discontinued and printed certificates are issued to the registered owners, the City and the Paying Agent/Registrar shall not be required to transfer or exchange any Obligation called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfembility shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond or Certificate, as the case may be. I I I I RECORD DATE FOR INTEREST PAYMENT. . . The record date ("Record Date") for the interest payable on the Bonds and Certificates on any interest payment date means the close of business on the last business day of the month next preceding. I In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each registered I I 13 I I The following information has been furnished by MBIA Insurance Corporation (the "Insurer") for use in this Official Statement. Reference is made to Appendix D for a specimen of the Insurer's policy. I BOND INSURANCE I The Insurer's policy unconditionally and itTevocably guarantees the full and complete payment required to be made by or on behalf of the Issuer to the Paying Agent or its successor of an amount equal to (i) the principal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Bonds and Certificates as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting ftom default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the Insurer's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered ftom any owner of the Bonds and Certificates pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). I I The Insurer's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Certificate. The Insurer's policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemption (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iü) payments of the purchase price of Bonds and Certificates upon tender by an owner thereof; or (iv) any Preference relating to (i) through (Hi) above. The Insurer's policy also does not insure against nonpayment of principal of or interest on the Bonds and Certificates resulting ftom the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Bonds and Certificates. I I Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mai~ by the Insurer ftom the Paying Agent or any owner of a Certificate the payment of an insured amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, wilI make a deposit of funds, in an account with State Street Bank and Trost Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Bonds and Certificates or presentment of such other proof of ownership of the Bonds and Certificates, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Bonds and Certificates as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Bonds and Certificates in any legal proceeding related to payment of insured amounts on the Bonds and Certificates, such instruments being in a form satisfactory to State Street Bank and Trost Company, N.A., State Street Bank and Trost Company, N.A. shall disburse to such owners or the Paying Agent payment of the insured amounts due on such Bonds and Certificates, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. I I I I The Insurer is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange listed company. MBIA Inc. is not obligated to pay the debts of or claims against the Insurer. The Insurer is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Tenito!)' of Guam. The Insurer has two European branches, one in the Republic of France and the other in the Kingdom of Spain. New York has laws prescribing minimum capital requirements, limiting classes and concentrations of investments and requiring approval of policy rates and foons. State laws also regulate the amount of both the aggregate and individual risks that may be insured, the payment of dividends by the Insurer, changes in control and transactions among affiliates. Additionally, the Insurer is required to maintain contingency reserves on its liabilities in certain amounts and for certain periods oftime. I I I As of December 31, 1999, the Insurer had admitted assets of $7.0 biIlion (audited), total liabilities of $4.6 billion (audited), and total capital and sUlplus of $2.4 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of September 30, 2000, the Insurer had admitted assets of $7.5 billion (unaudited), total liabilities of $5.1 biIlion (unaudited), and total capital and surplus of $2.4 billion (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulato!)' authorities. I Furthermore, copies of the Insurer's year end financial statements prepared in accordance with statutory accounting practices are available without charge ftom the Insurer. A copy of the Annual Report on Form IO-K ofMBIA Inc. is available ftom the Insurer or the Securities and Exchange Commission. The address of the Insurer is 113 King Street, Armonk, New York 10504. The telephone number of the Insurer is (914) 273-4545. I I Moody's Investors Service, Inc. rates the claims paying ability of the Insurer "Aaa", I 15 I I TAX INFORMATION I AD V ALOREM TAX LAw . . . The appraisal of property within the City is the responsibility of the Tammt Appraisal District (the "Appraisal District"). Excluding agricultural and open-space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under the Property Tax Code to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited ftom applying any assessment ratios. In determining market value of property, different methods of appraisal may be used, including the cost method of appraisal, the income method of appraisal and market data comparison method of appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law further limits the appraised value of a residence homestead for a tax year to an amount not to exceed the less of (I) the market value of the property, or (2) the smn of (a) 100/0 of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised, plus (b) the appraised value of the property for the last year in which the property was appraised plus (c) the market value of all new improvements to the property. The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of three members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the detennination of appraised value of property within the City by petition filed with the Appraisal Review Board. I I I Reference is made to the V.T.CA, Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted ftom taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of ad valorem taxes. I Article vrn of the State Constitution ("Article VIII") and State law provide for certain exemptions from property taxes, the valuation of agricultural and open-space lands at productivity value, and the exemption of certain personal property ftom ad valorem taxation. I Under Section I-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (I) An exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the political subdivision; (2) An exemption of up to 20% of the market value of residence homesteads. The minimum exemption under this provision is $5,000. I In the case of residence homestead exemptions granted under Section I-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. I State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the anned forces; the exemption applies to either real or personal property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of$12,000. I Article vrn provides that eligible owners of both agricultural land (Section 1-<1) and open-space land (Section 1-<1-1), including open-space land devoted to fann or ranch purposes or open-space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Sections l-d and I-d-l. I I Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation. I Article VIII, Section I-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal. I The City and the other taxing bodies within its territory may agree to jointly create tax increment fmancing zones, under which the tax values on property in the zone are "frozen" at the value of the property at the time of creation of the zone. To date, the City has created two tax increment financing districts ("TIFDs") within the boundaries of the City. The base value of TIFD Number One is $1,152,929 and the assessed taxable value of real property in such TIFD Number One is anticipated to increase to $5,375,000 when all development within its boundaries has been completed. The base value of TIFD Number Two is $57,510,907 and assessed taxable value of real property in such TIFD Number Two is anticipated to increase to $452,959,392 when all development within its boundaries has been completed. The difference between any increase in the assessed valuation of taxable real property in the TIFD in excess of the base value of taxable real property in the TIFD is known as the "Incremental Value", and during the existence of the TIFDs, taxes levied by the City against the Incremental Value in the TIFDs are restricted to paying project and fmancing costs within the TIFDs and are not available for the payment of other obligations of the City, including the Bonds and the Certificates. I II I The City also may enter into tax abatement agreements to encourage economic development Under the agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10 years. I 17 I I The City has granted an additional exemption of 15% of the market value of residence homesteads. I See Table 1 for a listing of the amounts of the exemptions described above. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. I The City does not tax nonbusiness personal property and Tarrant County collects taxes for the City. The City does not permit split payments of taxes, and discounts for the early payment of taxes are not allowed. I The City does not tax freeport property. The City does not collect the additional one-half cent sales tax for reduction of ad valorem taxes. I The City has adopted a tax abatement policy as described below. I TAX ABATEMENT POLICY AND OTHER TAX-BASED EcONOMIC DEVELOPMENT INITIATIVES. . . The City has established a tax abatement program to encourage economic development. I In 1989, the City Council adopted a resolution setting guidelines and criteria for granting abatements in reinvestment zones created within the City. These guidelines specifically note that incentives are limited to companies that create new wealth and do not adversely affect existing businesses operating within the City. The guidelines provide that the abatement shall be equal to 500% of investment by the business in eligible property. The guidelines further state that under no circumstance shall the value of the abatement in a single year exceed 50% of the value of the eligible property. Since 1989, the City has abated taxes for five companies, and two of such abatements expired in 1994 and 1997, respectively. The following abatements currently exist: 80% of $20,800,000 in new construction by Columbia North Hills Hospital for five years beginning in 1998; 71 % of $16,900,000 in new construction by H&M Food Systems Company, Inc. for five years beginning in 1998; and 33% of $178,965 in new construction for Blue Line Ice Complex for ten years beginning in 1999. I I The City has also established two tax increment fmancing districts (tlTIFstl), whereby incremental tax base growth within a targeted development area is captured for purposes of financing improvements within the area. The City, with participation from Tarrant County, Tarrant County Hospital District and Tarrant County Community College District, and North Richland Hills Independent School District, established TIF #1 to fund $5.9 million in real property improvements and $6.4 million in personal property improvements for Richland Plaza, a 300,000 square-foot shopping center originally built in 1959. The City, with participation from Tarrant County, Tarrant County Hospital District and Tarrant County Community College District, established TIF #2 to fund approximately $25 million for infrastructure and $42 million for additional projects for the Hometown NRH mixed use development in the City. State law provides that the City and the other participating taxing units continue to receive ad valorem taxes levied against the base value of the property in the TIF (being the property value at the time the district was created) for general governmental use, but taxes levied against the incremental growth of the property after the creation of the TIF are earmarked for various improvements for the district. I I I The City also entered in the year 2000 into a revenue-sharing agreement with a developer for the North Hills Mall in which the City will share certain sales taxes, ad valorem taxes, and mixed beverage taxes generated by North Hills Mallon a 100% incentive basis for the purpose of financing public improvements at North Hills Mall. I I I i I I (The remainder of this page left blank intentionally.) I 19 I I I TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY Taxable Appraised Vaue for Fiscal Year Ended September 30, 2001 2000 1999 %of %of %of Category Amount Total Amount Total Amount Total Real, Residential, Single-Family $ 1,502,682,259 55.58% $1,377,817,960 56.47% $ 1,295,249,550 58.02% Real, Residential, Multi-Family 186,791,674 6.91% 166,907,124 6.84% 138,643,175 6.21% Real, Vacant Lots/I'racts 59,306,470 2.19% 54,837,901 2.25% 43,332,499 1.94% Real, Acn:age (Land Only) 55,047,483 2.04% 6,132,456 0.25% 5,925,480 0.27% Real, Farm and Ranch Improvements 6,240,451 0.23% 70,004,570 2.87% 56,735,276 2.54% Real, Commercial 520,578,309 19.25% 427,669,772 17.53% 387,694,361 17.37% Real, Industrial 31,376,923 1.16% 26,463,962 1.08% 24,367,797 1.09% Real and Tangible Personal, Utilities 42,407,990 1.57% 39,998,409 1.64% 36,478,336 1.63% Tangible Personal, Couunercial 249,636,478 9.23% 194,552,278 7.97% 186,619,644 8.36% Tangible Personal, Industrial 39,563,540 1.46% 60,949,384 2.50010 44,006,699 1.97% Tangible Personal, Other 219,852 0.01% 269,780 0.01% 327,054 0.01% Tangible Personal, Mobile Homes 2,882,005 0.11% 2,084,809 0.09% 1,955,261 0.09% Real Property, Inventory 7,057,643 0.26% 12,427,900 0.51% 11,010,260 0.49% Total Appraised Value Before Exemptions $ 2,703,791,077 100.00% $ 2,440,116,305 100.00% $ 2,232,345,392 100.00% Adjustments 5,933,770 Less: Net Taxable Value in Arbitration (10,226,707) (4,551,238) (13,620,098) Less: Total Exemptions/Reductions (333,845,099) (301,409,166) (262,703,377) Taxable Assessed Value $ 2,359,719,271 $ 2,134,155,901 $ 1,961,955,687 Taxable Appraised Value for Fiscal Year Ended September 30, 1998 1997 %of %of Category Amount Total Amount Total Real, Residential, Single-Family $ 1,234,408,446 58.95% $ 1,168,147,734 58.42% Real, Residential, Multi-Family 133,019,847 6.35% 132,233,661 6.61% Real, Vacant Lots/I'racts 38,868,084 1.86% 40,783,953 2.04% Real, Acreage (Land Only) 5,030,153 0.24% 5,008,162 0.25% Real, Farm and Ranch Improvements 47,843,334 2.28% 51,482,634 2.57% Real, Couunercial 358,456,724 17.12% 334,453,343 16.73% Real, Industrial 13,672,677 0.65% 13,211,304 0.66% Real and Tangible Personal, Utilities 35,186,496 1.68% 31,661,475 1.58% Tangible Personal, Couunercial 187,848,388 8.97% 182,799,808 9.14% Tangible Personal, Industrial 31,096,834 1.49% 27,801,887 1.39% Tangible Personal, Other 220,432 0.01% 360,010 0.02% Tangible Personal, Mobile Homes 1,736,929 0.08% 1,715,334 0.09% Real Property, Inventory 6,489,490 0.31% 10,021,470 0.50% Total Appraised Value Before Exemptions $ 2,093,877,834 100.00% $ 1,999,680,775 100.00% Adjustments 25,480,689 Less: Net Taxable Value in Arbitration (36,688,013) (36,341,461 ) Less: Total Exemptions/Reductions (249,472,694) (210,347,860) Taxable Assessed Value $ 1,833,197,816 $1,752,991,454 I I I I I I I I I I I I I I NOTE: Valuations shown are certified taxable assessed values reported by the Tarrant Appraisal District to the State Controller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. I I 21 I I GENERAL OBLIGATION DEBT LIMITATION. . . No general obligation debt limitation is imposed on the City under current State law or the City's Home Rule Charter (see "The Bonds and Certificates - Tax Rate Limitation"). I TABLE6 - TAXADEQUACV(1) 2001 Principal and Interest Requirements $0.2187 Tax Rate at 98.500/0 Collection Produces $ 5,082,867 $ 5,083,295 I Average Annual Principal and Interest Requirements, 2001 - 2021 $0.1351 Tax Rate at 98.500/0 Collection Produces $ 3,138,018 $ 3,140,161 I Maximum Principal and Interest Requirements, 2002 $0.2683 Tax Rate at 98.50% Collection Produces $ 6,236,047 $ 6,236,160 I (I) Includes the Bonds and Certificates, less self-supporting debt Excludes the Refunded Bonds. I TABLE 7 - ESTIMATED OVERLAPPING DEBT I Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax bonds ("Tax Debt") was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City. I I 2000/0 I City's Authorized Taxable 2000101 Total Estimated Overlapping But Unissued Assessed Tax Funded % Funded Debt Debt as of Tax Jurisdictions Valuation Rate Debt Applicable As on-I-Ol 3-1-01 City of North Richland Hills $ 2,359,719,271 $ 0.570000 $ 39,417,602 (I) 100.00% $ 39,417,602(1) $ 2,905,000 Birdville Independent School District 4,65 I ,858, 122 1.569800 158,184,767 42.1 0% 66,595,787 10,840,148 Hurst-Euless-Bedford Independent School District 6,201,253,141 1.677500 251,627,686 0.05% 125,814 Keller Independent School District 3,478,884,119 1.522700 301,174,243 3.50"/0 10,541,098 104,795,000 Tarrant County 64,319,791,314 0.274785 127,305,000 3.58% 4,557,519 74,800,000 Tarrant County Hospital District 64,323,488,860 0.234100 12,258,877 3.58% 438,868 Tarrant County Junior College District 65,087,632, I 04 0.1 06400 88,990,000 3.58% 3,185,842 Total Direct and Overlapping Tax Supported Debt $ 124,862,530 I I I I Ratio of Direct and Overlapping Tax Supported Debt to Taxable Assessed Valuation. . . . . . . . .......... ........... ... 5.29% Per Capita Direct and Overlapping Tax Supported Debt. . . . . '" . . . . . . . , . . . . . . . , , . . . . . . . . '" . . . . . . . . . . . . . . . . . . . . $ 2,210 I I (I) Includes the Bonds and Certificates, less self-supporting debt and Refunded Bonds. I I I 23 I I CAPITAL IMPROVEMENT PLAN I The City maintains a multi-year plan for capital improvement needs. The capital improvement plan ("CIP") is part of the ongoing effort by the City to meet the needs of a growing community, while stabilizing the tax burden of the citizens of the City. The strategy includes managing the cost of capital projects, paying cash for capital projects when possible and reducing interest expense by managing the borrowing of funds. The current CIP identifies approximately $10,000,000 of expenditures over a five-year period, approximately $9,000,000 of wbich the City is considering funding through the issuance of debt. A CIP is by its nature a planning tool and it is possible that new projects will be added that are not currently identified, and that some projects in the CIP will not be undertaken for various reasons. I I In the 1998-1999 budget, the City Council established a Reserve Fund for Capital Improvements. This fund was established to provide pay-as-you-go funding for capital improvement projects such as maintaining City facilities and infrastructure. This reserve fund now has a balance of approximately $1,200,000, and the 2000-2001 budget adds an additional $550,000. Monies from this fund will be for smaller type capital projects such as acquiring land for the new fire stations, architectural design costs of the new fire stations, and other types of costs associated with smaller projects. I TABLE 12 - OTHER OBLIGATIONS I The City has lease-purchase arrangements and notes payable for an automatic fmgerprint identification system and various equipment purchases. The lease/purchases have been declared funded debts of the City and are included in the Debt Service Fund tax levy. I Payments for the various leases are as follows (as of March 1,2001): I Fiscal Year 2000-2001 2001-2002 Principal $ 45,107 81,529 $ 126,636 Interest $ 4,193 2,985 $ 7,178 Total $ 49,300 84,514 $ 133,814 I PENSION FuND. . . The City provides pension benefits for all of its full-time employees through the Texas Municipal Retirement System ("TMRS"), a State-wide administered pension plan. The City makes annual contributions to the plan equal to the amounts accrued for pension expense. (For more detailed infonnation concerning the retirement plan, see Appendix B, "Excerpts from the City's Annual Financial Report".) I I I I (The remainder of this page left blank intentionally.) I I I I I 26 I I I I I I I I I I I I I I I I I I I TABLE 13 - GENERAL FuND REVENUES AND ExPENDITURE HIsroRY FINANCIAL INFORMATION Revenues Taxes, Penalties and Interest Licenses and Permits Intergovernmental Charges for Services Interest Income Fines and Forfeitures Miscellaneous Total Revenues Expenditures General Government Public Safety Public Works Culture and Recreation Total Expenditures 2000 $ ]9,]26,403 ],39],263 38,994 4,559,674 486,044 ],550,554 90,5] 6 $ 27,243,448 For Fiscal Year Ended September 30, ]999 ]998 ]997 $ ]7,873,]26 $ ]6,389,608 $ ]5,462,900 1,163,82] ],]82,582 755,08] 13,776 46,222 77,112 3,738,739 3,500,687 3,]87,037 423,959 336,]66 3]5,827 ],493,628 ],280,520 1,159,825 277,029 186,699 221,439 $24,984,078 $22,922,484 $2],179,22] 1996 $ ]4,8]5,492 855,780 2,332,]9] 232,64] 884,970 305,998 $ 19,427,072 $ 6,686,549 $ 6,022,845 $ 5,311,918 $ 4,898,226 $ 4,432,868 12,988,270 ] ],499,552 ] ],342,]03 10,9] ],9]6 10,108,971 2,005,802 ] ,960,966 ],85],4]6 1,665,715 1,609,482 3,097,272 2,796,230 2,655,435 2,472,]59 2,310,529 $ 24,777,893 $ 22,279,593 $ 21,160,872 $ 19,948,016 $ ]8,46],850 Excess (deficiency) of Revenues over Expenditures $ 2,465,555 $ 2,704,485 $ ],76],6]2 $ 1,23 ],205 $ 965,222 Net Transfers In (Out) $ (1,]51,287) $ (],328,052) $ (90],593) $ (826, ] 77) $ (223,056) Fund Balance - October ] 7,004,]29 5,627,696 4,767,677 4,362,649 3,620,483 Fund Balance - September 30 $ 8,3]8,397 (1) $ 7,004,]29 $ 5,627,696 $ 4,767,677 $ 4,362,649 (1) As of September 30,2000 the unrestricted portion of the general fund balance was $7,437,950. (The remainder o/this page left blank intentionally.) 27 I I FINANCIAL PoUCIES I Basis af Accounting. . .The City's accounting records of the governmental fund revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they are available and measurable. Expenditures are recorded when the related fund liability is incurred except for interest on generallong-tenn obligations. which is recorded when due or when amounts have been accumulated in the Debt Service Fund for payments to be made early in the following year, and a portion of accrued vacation leave which is recorded in the generallong-tenn debt account group. I Proprietary Fund revenues and expenses are recognized on the accrual basis. Revenues are recognized in the accounting period in which they are earned. Expenses are recognized in the accounting period incurred. I Fiduciary Fund revenues and expenses or expenditures are recognized on the modified accrual basis. I Transfers are recognized in the accounting period in which the interfund receivable and payable arise (see Appendix B - "Excerpts from The City of North Richland Hills, Texas Annual Financial Report for the Year Ended September 30, 2000"). General Fund Balance. . . The City's policy is to maintain surplus and unencumbered funds equal to 12% to 15% of the next fiscal year's operating budget. I Debt Service Fund Balance . . . The City's policy is to maintain surplus funds equal to a minimum of three (3) months of debt service in the Debt Service Fund. City policy is to pay "first dollar" tax collections into the Debt Service Fund until the levy for debt service has been collected. The City budgets on a 98.5% collections ratio and the 1.5% non-collectible factor is accounted for in the General Fund. I Use af Band Proceeds. . . The City's policy is to use bond proceeds for capital expenditures only. Such revenues are never to be used to fund nonnal City operations. I Budgetary Procedures . . . The City Charter establishes the fiscal year as the twelve-month period beginning October 1. The departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the middle of May. The City Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August 15. The City Council shall hold a public hearing on the budget after giving at least 10 days notice of the hearing in the official newspaper of the City. The Council shall then make any changes in the budget as it deems advisable and shall adopt a budget prior to October 1. If the Council fails to adopt a budget then the budget proposed by the City Manager shall deem to have been adopted. I I During the fiscal year, strict budgetæy control is maintained by various methods, including the review of departmental appropriation balances with purchase requisitions prior to their release to vendors. I Departmental appropriations that have not been expended or encumbered lapse at the end of the fiscal year. Therefore, funds that were budgeted and not used by the departments during the fiscal year are not available for their use unless appropriated in the ensuing fiscal year's budget I Fund Investments. . . The City investment policy parallels the state laws which govern the investment of public funds. The City generally restricts investments to direct obligations of the United States Government and its agencies and to insured or collateralized bank certificates of deposit and investment pools. I INvESTMENTS I The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council of the City. Both state law and the City's investment policies are subject to change. I I LEGAL INvEsTMENTS. . . Under Texas law, the City is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities, (2) direct obligations of the State 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 obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State 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 fInn 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 City 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 the clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (8) fully collateralized repurchase agreements that have a defined tennination date, are fully secured by obligations described in clause (1), and are placed 29 I I I I TABLE 15 - CURRENT INvESTMENTS As of March 1,2001, the City's investable funds were invested in the following categories: I Type ofInvestment Agency Notes US Treasury Notes TexPool Money Market LOGIC Money Market Maturity Date 4117/0I-07fl6/02 03131/01-10131/01 Maturity Value $16,000,000 2,000,000 46,480,643 10,064,110 S 74,544,753 %of Portfolio 21.46% 2.68% 62.35% 13.50% 100.00% I I I TexPool is a local government investment pool under the control of the Texas Comptroller of Public Accounts. The Comptroller has engaged Chase Bank of Texas, and its affiliates, to provide investment management and fund accounting services for TexPool. First Southwest Asset Management, Inc., an affiliate of First Southwest Company, the City's Financial Advisor, provides customer service and marketing for the pool. TexPool currently maintains an AAAm rating from Standard & Poor's. The pool's investment objectives include achieving a stable net asset value of $1.00 per share. Daily investment or redemption of funds is allowed by the participants. I I I (Fhe Remainder a/This Page Left Blank Intentionally.) I I I I I I I I I I 31 I I I 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, fmancial institutions, 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 earned income tax credit, owners of an interest in a FASIT, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carty, 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 Obligation by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Obligation in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Obligation was held) is includable in gross income. I I Owners of Discount Obligations should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Obligations for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Obligations. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Obligations may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. I I The initial public offering price of certain Bonds or Certificates (the "Premium Obligations") may be greater than the amount at their maturity. An amount equal to the difference between the initial public offering price of a Premium Obligation (assuming that a substantial amount of the Bonds or Certificates, as the case may be, of that maturity are sold to the public at such price) and the amount payable at maturity constitutes premium to the initial purchaser of such Premium Obligations. The basis for federal income tax purposes of a Premium Obligation in the hands of such initial purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Obligation. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity. I I I Purchasers of the Premium Obligations should consult with their own tax advisors with respect ~o the determination of amortizable bond premium on Premium Obligations for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Obligations. I I I I I (The remainder of this page left blank intentionally.) I I I I 33 I I LEGAL OPINIONS I The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds and Certificates. including the unqualified approving legal opinions of the Attorney General of Texas approving the Initial Bond and Initial Certificate and to the effect that the Bonds and Certificates are valid and legally binding obligations of the City, and based upon initial examination of such transcript of proceedings, the approving legal opinions of Bond Counsel, to like effect and to the effect that the interest on the Bonds or Certificates, as the case may be, will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Official Statement, and such finn has not assumed any responsibility with respect thereto or undertaken independently to verifY any of the infonnation contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the infonnation under captions "Plan of Financing", "The Bonds and Certificates" (exclusive of subcaptions "Book- Entry-Only System"), "Tax Matters" and "Continuing Disclosure of Infonnation" and the subcaptions "Legal Opinions" and "Legal Investments and Eligibility to Secure Public Funds in Texas" in the Official Statement and such finn is of the opinion that the infonnation relating to the Bonds and Certificates and the legal issues contained under such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and, with respect to the Bonds and Certificates, such infonnation confonns to the Bond Ordinance or Certificate Ordinance, as the case may be. The legal fee to be paid to Bond Counsel for services rendered in connection with the issuance of the Bonds and Certificates is contingent on the sale and delivery of the Bonds and Certificates. The legal opinions will accompany the Bonds and Certificates deposited with DTC or will be printed on the Bonds and Certificates in the event of the discontinuance of the Book-Entry-Only System. Certain legal matters will be passed upon for the Underwriters by McCall, Parkhurst, and Horton LLP, Dallas, Texas, Counsel to the Underwriters. The fee of McCall, Parkhurst & Horton LLP is contingent on the successful sale and delivery of the Bonds and the Certificates. I I I I I The various legal opinions to be delivered concurrently with the delivery of the Bonds and the Certificates express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the future perfonnance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. I AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION I The fmancial data and other infonnation contained herein have been obtained from City records. audited financial statements and other sources, which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further infonnation. Reference is made to original documents in all respects. I I CONTINUING DISCLOSURE OF INFORMATION I In the Bond Ordinance and the Certificate Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of the Bonds and Certificates. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds or Certificates. Under the agreement, the City will be obligated to provide certain updated financial infonnation and operating data annually, and timely notice of specified material events, to certain infonnation vendors. This infonnation will be available to securities brokers and others who subscribe to receive the infonnation from the vendors. I ANNUAL REPORTS . . . The City will provide certain updated financial infonnation and operating data to certain infonnation vendors annually. The infonnation to be updated includes all quantitative fmancial infonnation and operating data with respect to the City of the general type included in this Official Statement under Tables numbered I through 6 and 8 through 15 and in Appendix B. The City will update and provide this infonnation within six months after the end of each fiscal year ending in or after 2001. The City will provide the updated infonnation to each nationally recognized municipal securities infonnation repository ("NRMSIR") and to any state infonnation depository ("SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC"). I I I The City may provide updated infonnation in full text or may incorporate by reference certain other publicly available documents, as pennitted by SEC Rule 15c2-12. The updated infonnation will include audited financial statements, if the City commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the City will provide unaudited financial statements by the required time and audited financial statements when and if such audited fmancial statements become available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation. I I 35 I I I The Financial Advisor to the City has provided the following sentence for inclusion in this Official Statement The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. VERIF1CATION OF ARIDlMETICAL AND MATHEMATICAL COMPUTATIONS I The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the City relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and Certificates and the restricted Federal Securities were verified by Grant Thornton, L.L.P., certified public accountants. Such computations were based solely on assumptions and infonnation supplied by First Southwest Company on behalf of the City. Grant Thornton, L.L.P. has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and infonnation on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. I I FORW ARB-LOOKING STATEMENTS DISCLAIMER 'I The statements contained in this Official Statement, and in any other infonnation provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City' expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on infonnation available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City' actual results could differ materially from those discussed in such forward-looking statements. I I The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, indusUy, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions related to the foregoing involve judgements with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. I I I (The Remainder o/This Page Left Blank Intentionally.) I I I I I I I 37 I I I I I I I I I I I I I I Schedule I SCHEDULE OF REFUNDED BONDS Tax and Golf Course Revenue Refunding Bonds, Series 1991 Original Maturity Interest Principal Dated Date Date Rate Amount 411/91 911/02 6.50"/0 3i265,OOO 911103 6.60% 280,000 9/1104 6.70% 300,000 9/1105 6.75% 320,000 9/1106 6.85% 340,000 9/1107 6.90010 365,000 9/1108 6.90% 390,000 9/1109 7.00% 415,000 9/1110 7.00% 445,000 9/1111 7.00% 470,000 The 2002 - 2011 maturities will be redeemed prior to original maturity on September 1, 2001 at par. General Obligation Bonds, Series 1993 Original Dated Date 511/93 Maturity Date 2115/04 2/15/05 2/15/06 2/15/07 2/15/08 2/15/09 Interest Rate 7.25% 5.80% 5.30% 5.45% 5.55% 5.50% Principal Amount $ 190,000 200,000 210,000 220,000 235,000 245,000 The 2004 - 2009 maturities will be redeemed prior to original maturity on February 15,2003 at par. I, I I I I I I I I I I I I I I I I I I I I I I I APPENDIX A GENERAL INFORMATION REGARDING THE CITY I I I · Major developments completed in 2000 include: a $15 million, 18,000 square foot expansion at H&M Food Systems; a $5 million, 305,000 square foot redevelopment of Richland Plaza Mall into a business center; and a 210,000 square foot redevelopment of Richland Pointe Mall into a business center. Plans continue for the $628 million, 287-acre master-planned Town Center development featuring 650 custom homes, 800 multi-family dwellings, 160,000 square feet of retail space and 650,000 square feet of office space. Occupation of the custom homes is expected in mid-2001. The Crossing, a shopping center valued at $24 million consisting of 285,000 square feet, anchored by Kohl's department store and Minyard's grocery store; Tarrant Parkway Plaza shopping center with 102,000 square feet anchored by an Albertson's grocery store; Tarrant County's first Home Depot Expo Design Center consisting of 92,475 square feet; and the128,925 square foot Sam's Club, one of the largest in the area. · Anticipated major developments scheduled for 2001 include $100 million in continued renovations to North Hills Mall that include a 3-acre lake with a laser-lit fountain, a 20-screen cinema, and an ice rink. Also scheduled are the addition of: the City's second Super Wal-Mart at 220,000 square feet; the City's second Home Depot at 159,000 square feet; and Fury Sports flI'St-ever indoor sports mall valued at $6 million with 170,000 square feet. · In 2000, approximately 320 new jobs were created by existing major employers: North Hills Hospital, Kimberly Clarkffecnol, City of North Richland Hills, Five Star Ford, Home Depot, Sealy Mattress Manufacturing, Bates Container, and CTS Con-Way Transportation. New business employment is estimated at 1,370 new jobs in North Richland Hills. Home Depot Expo Design Center, Sam's Club, Albertson's grocery store, and Minyard's food store have already opened. SilverLeafResorts and WideOpen West are expected to open by mid-2001. · Other factors contributing to the City's economic base include continued operation of existing employers such as: Kimberly Clarkffecnol (713), MEGA Life & Health Insurance Center (600), North Hills Hospital (767) - as well as the growth ofH & M Food Systems (432), and Wal-Mart (550). The City has also benefited from the success of new employers: Five Star Ford (264) and Sam's Club (275). I I I I I I I North Richland Hill's status as a "triple Freeport" City (i.e., one with the Freeport exemption available through Tarrant County, the City, and the Birdville Independent School District on qualified in-transit inventories) is intended to attract manufacturers such as Teenol and encourage their expansion. With approximately 20"10 - 25% of the City remaining undeveloped, North Richland Hills offers additional opportunities for commercial, industrial, and residential growth. Other factors contributing to the City's prosperity include: · A location near the center of nine of the ten largest business centers in Tarrant County. I I · Close proximity to new or expanding employers like Alliance Airport (9 miles), Burlington Northern's Corporate Headquarters (8 miles), Bell Helicopter (4 miles), Siecor Corporation (8 miles), AST Research (8 miles), and Haggar Manufacturing (6 miles). · The growth of existing manufacturers such as Kimberly Clark'slTecnol Medical Products, H&M Food Systems, Sealy Mattress Manufacturing, Bates Container, and Arabesque Fragrance Manufacturing. I Residential platting activity continues to be strong, especially in the northern areas of the City and near the City's Iron Horse Golf Course. One of two courses with adjacent residential lots, Iron Horse attracted almost 54,000 rounds of golf in 2000. I MUNICIPAL SERVICES. . . With active involvement by the Mayor, a seven member City Council and 14 citizen boards, commissions and committees, the City strives to provide proper and effective representation. Low crime statistics are maintained by a police force consisting of 104 police officers. The City has four professionally staffed fire stations. Fully equipped to handle most emergencies, the City utilizes its own mobile intensive care ambulance system, staffed with highly trained paramedics. I I QUALITY OF LIFE. . . Two privately owned and fully operational hospitals in the region offer City residents excellent health care. The City has a full service central library housing almost 120,000 volumes with a circulation in excess of 430,000 annually. I' With over 650 acres of park land, the City offers such facilities as playgrounds, picnic areas, recreation center, a championship golf course, lighted tennis courts, football fields, softball and baseball fields, basketball courts, volleyball courts and two senior citizen centers. Families in the City are served by churches throughout the area representing many denominations. I I EDUCATION. . . Education for the citizens of the City is provided primarily by the Birdville Independent School District (the "District") which encompasses an area of approximately 40 square miles. The District conducts programs for K-12 and is fully accredited by the Southern Association of Colleges and the Texas Education Agency and operates on a middle school structure, Le. Pre-kindergarten-5, 6-8, 9-12. A-2 I I I I I MAJOR EMPLOYERS IN TIlE CITY Employer Birdville Independent School District North Hills Hospital Kimberly Clarklfecnol Division TeC - N.E. Campus· MEGA Life & Health Insurance Center The City of North Richland Hills Wal-Mart H&M Food Systems, Inc. Sam's Club Five Star Ford I I I I I' I I I I ,I I I I I Product School District HospitalJMedical Center Medical Products Manufacturer Higher Education Lif~ealth Insurance Municipal Government Retail Sales Food Processing Retail Sales Automobile Dealership · Split with Hurst Source: North Central Texas Council ofGovemments, Local Media, City of North Richland Hills. BUILDING PERMIT INFORMATION Construction Estimated Number of Employees 875 767 713 615 600 574 550 432 275 264 Commercial Residential Fiscal Number Number Total Total Year of Units Value of Units Value Units Value 1996 116 $ 29,200,801 346 $ 32,309,977 462 $ 61,510,778 1997 133 25,986,136 302 25,573,591 435 51,559,727 1998 134 80,576,845 345 35,665,625 479 116,242,470 1999 21 29,047,456 299 47,601,097 320 76,648,553 2000 66 54,733,881 351 45,817,144 417 100,551,025 Source: City Records. A-4 I I I I I I APPENDIX B I EXCERPTS FROM 1HE CITY OF NORTH RICHLAND HILLS, TEXAS I I ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2000 I I The infonnation contained in this Appendix consists of excerpts from the City of North Richland Hills, Texas Annual Financial Report for the Year Ended September 30, 2000, and is not intended to be a complete statement of the City's fmancial condition. Reference is made to the complete Report for further infonnation. I I I I I I I I I I I I I I I I I I I I I I I I I I I APPENDIX C FORM OF BOND COUNSEL'S OPINIONS I I I I I I I I I I I I APPENDIX D SPECIMEN BOND INSURANCE POLICY I I I I I i I