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CC 2001-05-29 Agendas
e CITY OF NORTH RICHLAND HILLS PRE-COUNCIL AGENDA MAY 29, 2001 - 5:00 PM For'the Meeting conducted at the North Richland Hills City Hall - Pre-Council Chambers 7301 NDrtheast Loop 820. . NUMBER ITEM ACTION TAKEN Discuss Items from Regular May 29,2001 City Council 1.. Meeting (5 Minutes) 2. IR 2001-074 Review Request by Direct Development to Allow Limited (Left Turn Only) Median Opening in Mid Cities Boulevard between Smithfield Road and Davis Boulevard (10 Minutes) 3. *Executive Session (90 minutes) - The Council may enter into closed executive session to discuss the following: a. Consultation with City Attorney Under Government Code §551.071 - Buckingham et al vs. NRH , b. Deliberation Regarding Real Property Under Government Code §551.052 - Land Acquisition - Fire Service c. Personnel Matters Under Government Code §551.074 - Personnel - Fire Service I /4. I Adjournment - 6:50 pm I *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 ~-~ S_O( Dato L/:q~ Ih TI e e gCllySec:retory [ . -;tit~ , 5/29/0.': City Council Agenda Page 1 of4 . CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA MAY 29,2001 -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. Hems 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 concerning 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 2. Invocation - Girl Scout Troop #1262 3. Pledge - Girl Scout Troop #1262 4. Special Presentations Yard of the Month 5. Removal of Item(s) from the Consent Agenda e 5/29/01 City Council Agenda Page 2. of 4 e ¡- NUMBER I ITEM \ ACTION TAKEN 1 f Consent Agenda: 6. a. Minutes of the Special Council Meeting May 8, 2001 b. Minutes of the Pre-Council Meeting May 14, 2001 c. Minutes of the City Council Meeting May 14, 2001 GN 2001-055 d. Approve Interlocal Agreement with Tarrant County for the Maintenance of North Tarrant Parkway - Resolution No. 2001-037 PAY 2001-001 e. Approve Payment in the Amount of $498,160.91 to the Texas Department of Transportation for the Rufe Snow Drive/Glenview Drive Intersection Project 7. 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 (Tabled at the 4123101 City Council Meeting) 8. PZ 2001-05 Consideration of a Site Plan for a Walgreen's Pharmacy in a C1 Commercial zoning district requested by Lawrence Cates & Associates on Lot 3R, Block 1, Smithfield Corners Addition at 6350 Davis Boulevard 9. .PZ 2001-06 Appeal Request for a Public Hearing to Consider a Zoning Change Request from R2 Single Family to PD Planned Development Requested by James Michael Wilson on Lot 20, Block 5, Richland Terrace Addition at 4705 Susan Lee Lane. - Ordinance No. 2554 (Denied at the 5110101 Planning and Zoning Commission Meeting) . e 5/2Q/01 City Council Agenda Page 3 of 4 - e NUMBER ITEM ACTION TAKEN 10. SRC 2001-01 Public Hearing to Consider Variances to the Sign Regulations Ordinance No 2374. Specifically to Subsection 13. C.1 a, and 13.C.1.e Regarding the Permit Period, and Size of New Temporary Development Signs for Three Signs Addressed as the 6200 Block of Davis Boulevard, the 9100 Block of Grapevine Highway, and the 8500 Block of Mid-Cities Boulevard 11. GN 2001-056 Appointment to Place 2 on the Park & Recreation Board 12. GN 2001-057 Appointment to Place 1 on the Park and Recreation Facilities Development Corporation 13. GN 2001-058 Approval of Fire Services Analysis 14. a) Citizens Presentation b) Information and Reports 15. Adjournment . e POSTED ..5- ;;l5-0( oa¡¡¡ ¡¡:L¡ 3 /-J./n nfne c;;J City Secretary 8, ~ - 5/29/01 City Council Agenda Page 4 of 4 · .A NRH Office of the City Secretary < CITY OF NORTH RICHLAND HILLS - NOTICE OF CANCELLATION OF MEETING The joint meeting of the North Richland Hills City Council and the Board of Directors of the North Richland Hills Parks and Recreation Facilities Development Corporation scheduled for May 31, 2001 at 6:00 p.m. has been cancelled. ª ~-ßìl, City Secretary - e P.O. Box 820609 * North Richland Hills, Texas * 76182-0609 7301 Northeast Loop 820 * 817-427-6060 * FAX 817-427-6016 - . JOINT MEETING OF THE NORTH RICHLAND HILLS CITY COUNCIL AND THE BOARD OF DIRECTORS OF THE NORTH RICHLAND HILLS PARKS AND RECREATION FACILITIES DEVELOPMENT CORPORATION AGENDA MAY 31,2001 For the Meeting conducted at the North Richland Hills City Hall Council Chambers, 7301 Northeast Loop 820, at 6:00 p.m. The below listed items are placed on the Agenda for discussion and/or action. 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. e NUMBER ITEM ACTION TAKEN 1. Call to Order 2. 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 3. FDC 2001-01 Consideration By Park and Recreation Facilities Development Corporation 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. FDC 2001-01 4. GN 2001-043 Consideration by City Council 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. POSTED 2001-034 . ,:). Q2 s:. 0 I 5. Adjournment - .n. '- 4/.. C/.3 ¿;; fi1. ~...._._-_.";-..,,, e "Time By@~ "'- - e e NRH CITY OF NORTH RICHLAND HILLS MEMO TO: Mayor and City Council Members FROM: Larry J. Cunningham, City Manager SUBJECT: Need for Special City Council Meeting - Thursday, May 31 DATE: May 21,2001 REF: CMM#01-043 David Medanich of First Southwest Company has informed us that the market is improving that would allow for the refunding of Sales Tax Certificates of Obligation. You may recall that we were previously planning to refund these along with the General Obligation Bonds and some other certificates, but because of the market situation it was determined that it was not economically feasible at that time. However, David indicates that the market is improving and he believes we need to move forward in a refunding very soon. At the present time we plan to put an item on the Tuesday, May 29 Regular City Council Meeting for the purposes of refinancing these Certificates of Obligation for the Sales Tax. Because of the Holiday on Monday and the longer weekend, David has indicated that there is a possibility that the market could change and another day may be needed to adjust as this happens frequently with holiday and seasonal times of year. He therefore is requesting that a backup date of Thursday, May 31 for the refunding sale. We would like to schedule a Special City Council meetinQ for 6:00pm Thursday. May 31, 2001 to be held in the City Council Chamber for the purposes of refunding of the Sales Tax Certificates of Obligation. If the market is not affected by the three-day weekend, then we will be able to take action on Tuesday, May 29 and the Thursday, May 31 meeting will not be needed. We should know this by the 29th. We would very much appreciate your putting on your calendars for May 31 for the Special Meeting. It should last no more than 30 minutes. Would you please advise the City Secretary if it is not possible for you to attend the Special Council Meeting on May 31? If you have any questions feel free to give me a call. L~ City Manager e LJC/ld Cc: Larry Koonce, Director of Finance Patricia Hutson, City Secretary .. , INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR #2001-074 . * Date: May 29,2001 Subject: Request by Direct Development to allow a limited (left turn only) median opening in Mid Cities Boulevard between Smithfield Road and Davis Boulevard Direct Development has a contract on all of the property off the southwest corner of Mid Cities and Davis Boulevard to Smithfield Road and is negotiating with Kroger as the anchor for the retail center. In their negotiations with Kroger they have stated that Kroger needs a median opening in Mid Cities between Davis and Smithfield for left turn traffic for customers going west on Mid Cities past Davis. Our current guidelines require a minimum of 500 feet from intersections for a median opening. This request does not specifically meet the subdivision guidelines. Staff has told Direct Development that a Traffic Impact Analysis would have to be undertaken to prove a median opening could fit geometrically; would not be detrimental to the intersection; and our Traffic Consultant would have to concur with the proposed median opening. . A Traffic Impact Analysis has been completed and submitted to Kimley Hom our traffic consultant. The May 10, 2001 letter from Brian Shamburger concludes that the proposed limited median opening will fit geometrically and the analysis is reasonable. It does recommend immediate improvements for right-of-way dedication; construction of a third eastbound through lane on Mid Cities; construction of a new eastbound right-turn lane on Mid Cities; and construction of a new northbound right-turn on Davis. Kimley Horn is also recommending improvements to allow for dual left turn lanes at all streets at the Mid Cities and Davis intersection within 5 years. The bottom line is that the proposed limited median opening on Mid Cities for a Kroger grocery store will fit and will not adversely affect traffic in the area. but according to Kimley Horn the median opening is not required or necessary from a traffic perspective. Staff has taken this analysis as a briefing item at a Planning & Zoning Commission meeting and it was a consensus to allow these improvements with the requirement that all initial construction improvements be made by the developer. This item is brought forward as a briefing item to seek City Council consensus. Direct Development is requesting a general approval on the median opening so they can proceed with Kroger and the necessary site plans and platting of the property. :Je'1~ John Pitstick Development Director ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS . . . It Jon Andrus Vice President April 18, 2001 Mr. John Pitstick Economic Development Director City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76182 Re: Proposed Kroger-Anchored Shopping Center Southwest Quadrant of Mid-Cities Blvd. And Davis Blvd. North Richland Hills, Texas Dear John: Thank you for your thoughts and guidance regarding the most expeditious route to have the City consider our request for left-turn only access into our proposed shopping center. We are including a Concept Site Plan and Traffic Impact Analysis in support of our request. Weare hopeful that we can be scheduled for consideration at the May 10th P&Z meeting and the May 29th council meeting. As we discussed, we have a bit of a "chicken-and-egg" problem in that left-turn access into the project is essential to obtaining formal approval of this site by Kroger, and Kroger requires the site to have received formal approval before they will authorize the expenditures necessary to make our application to the City for site-plan and plat approval. It is now, and has always been, our plan to develop these two parcels (the E-Systems Tract and the Hamm Tract) as a unified and cohesive development in full compliance with all ordinances and other applicable municipal requirements. Weare prepared to evidence our commitment to this end in whatever manner the City would like to see. We know the peak hour traffic along Mid-Cities Boulevard is of vital concern to the City and that any request that has the potential to aggravate the situation will be, and should be, rigorously scrutinized by the City. You will note that our TIA indicates that the level of service at the intersection is improved as a direct result of the thoroughfare improvements we are proposing in connection with our development. Moreover, as it relates to the issue of stacking at peak hours, we have data from Kroger showing that less than 1.5% of daily store traffic is generated during a.m. peak traffic hours. 8150 N. Central Expressway Su ite 1515 Dallas. Texas 75206 tel 214,891.3222 fax 214,891.3223 . Again, thank you for your assistance in this process, and we remain optimistic that with the cooperation of the City we can craft a win-win result that is in the best interest of all concerned. Sincerely, ~~ Jon Andrus jalkpmidcit2 Enclosure . . · · · ~=~ Kimley-Horn and Associates, Inc. May 10,2001 . Suite 1100 801 Cherry Street Fort Worth, Texas 76102-6803 Via Mail and Facsimile # (817) 427-6404 Mr. Mike Curtis, P.E. City of North Richland Hills - Director of Public Works 5301 N.E. Loop 820 North Richland Hills, Texas 76180 Re: North Richland Hills - Smithfield Market Traffic Engineering Study Review - Follow-up Dear Mr. Curtis: Upon request of the developer, David Watson, Brad Tribble, P.E. and I met with Mr. Watson, his civil engineer Larry Cates, P.E., and his traffic Engineer Jody Short, P.E. yesterday to discuss our review comments dated May 4,2001. It was a productive meeting. They were responsive to our questions and concerns. The review comments from our May 4, 2001 letter remain valid. The letter points out two areas in which we needed additional information: . We requested that capacity analyses information be provided. This information would help in our review of the appropriateness of the operational analysis inputs (i.e., cycle lengths, splits and phasing). This data has a significant impact on the reported queue lengths. We also requested that a plan (to scale) be provided for the proposed improvements to verify that geometry is reasonable and that there is room physically to construct the proposed roadway and intersection improvements. . This additional information we requested was provided to us in our May 9, 2001 meeting. It appears that the proposed improvements will fit geometrically and their analysis is reasonable. The project requires some give and take concerning the strict interpretation of City design criteria (allowing the hooded left-turn), but it does provide some traffic benefit to the City by rerouting Smithfield. This project will require a number of improvements to be completed in both the short term and within the next 5 years (anticipated build-out of the properties at the intersection). Improvements needed initially: · ROW dedication (southwest corner of intersection) for additional ROW required to accommodate future dual left-turn lanes on Mid-Cities; · Construction of a third eastbound through lane on Mid-Cities; . TEL 817 335 6511 MET 817 654 4266 FAX 817 335 5070 · · · ~=~ Kimley-Horn and Associates, Inc. Mr. Mike Cunis, P.E., May 10,2001, Page 2 · Construction of a new eastbound right-turn lane on Mid-Cities. This lane needs extra width to accommodate future dual left-turn lanes on Mid- Cities; and · Construction of a new northbound right-turn lane on Davis. Improvements needed within the next five years: · ROW dedication (remaining comers of intersection) for additional ROW required to accommodate future dual left-turn lanes on Mid-Cities; · Construction of the dual left-turn lanes on Mid-Cities. This requires the widening of Mid-Cities on: · The eastbound departure side of Mid-Cities; · The westbound approach side of Mid-Cities; and · The westbound departure side of Mid-Cities. · Restriping of Davis to provide three through lanes. The geometry of the proposed hooded left-turn will initially provide approximately 140-ft. of storage. When the dual lefts are constructed, the storage will be reduced to approximately 65-ft. The TIA shows that this reduced storage is adequate. An alternative to consider is to push the hooded left-turn further to the west. This would increase the storage for the hooded left turn but decrease the storage for the westbound left-turn at Smithfield. The TIA shows that the westbound left-turn volume at Smithfield is low and could accommodate a reduction in storage. As you can see, there are a number of issues to consider concerning the traffic impact of the proposed project. The TIA's assumptions are reasonable and the proposed improvements can be constructed. It has become a policy issue for the City's consideration. It concerns allowing a hooded left-turn that is not required from a traffic perspective but required from the developer's perspective. It also involves balancing the benefit of developer funded improvements against the requirement for City funded improvements in the future. We appreciate the opportunity to be of service to the City of North Richland Hills. Should you have any questions or comments, please do not hesitate to call me at (817) 335-6511. Sincerely, CBS/GBT Copy to: Mr. John Pitstick, City of North Richland Hills Mr. Brad Tribble, P.E., Kimley-Horn and Associates, Inc. P:lOOOOO8024\North Richland HillsIKroger Lee TIA ReviewlTIA Rev;ew2,doc I '. I I I J I ( I I. I I TRAFFIC ENGINEERING STUDY FOR THE SMITHFIELD MARKET Prepared for: Direct Development 5950 Berkshire Lane, Suite 450 Dallas, TX 75225 Prepared by: Lee Engineering, LLC 17440 Dallas Parkway, Suite 204 . Dallas, Texas 75287 Phone: (972) 248-3006 Fax: (972) 248-3855 . April 2001 r-"'.~ - --~--?"'''-''''''~N.--''''___ ¡ ;~ i ;'-; ,:"'~ ;-:: : ~ . ' ; i '" -. v.' '- .' .' ,'. /-" ~p~ .~ 7 2~O~~ ~ , L±"R" ,- . -. ,",. ¡ ",\I :,~:-'; n,· " , ¡".' ¡\ .-. ' - '',I ,,, ·1 ..,... ; .. ,~~~.. -,I - ~ -",,' ~'t.'J . I f ,. J I r J I I I. I J r I r I l I. INTRODUCTION This traffic study was conducted to analyze the traffic impacts of the planned Smithfield Market development in North Richland Hills, Texas. The specific focus of this study was to detennine the impact on the adjacent intersections and at the access driveways to the development. This analysis was required according to City of North Richland Hills Ordinance #2461. Executive Summary The Smithfield Market development will be located on the southwest comer of the intersection of Mid-Cities Boulevard and Davis Boulevard in North Richland Hills. The study area for this project consisted of the roadways (Davis Boulevard, Mid-Cities Boulevard, and Smithfield Road) and intersections adjacent to the development. The Smithfield Market development is planned to contain 111,850 ft2 of retail space and will consist of land uses including a fast-food restaurant, quality restaurant, gas station, grocery store, and general retail. It is estimated that 8,834 daily trips will be generated by this development. To accommodate these trips, five driveways will be provided for access to the development from the three roadways that border it. With two major arterial roadways (Mid-Cities Boulevard and Davis Boulevard) bordering the Smithfield Market development, the site should have good accessibility from all directions of the mid-cities area. This development was analyzed under different scenarios using the existing traffic volumes and projected volumes with and without traffic generated by the Smithfield Market development. Capacity analyses were performed at the signalized and unsignalized intersections in the study area during the AM and PM peak hours for horizon year 2005. At the signalized intersection of Mid-Cities Boulevard at Davis Boulevard, the capacity analyses indicated that the intersection will operate at unacceptable levels in the horizon year with or without the traffic generated by the Smithfield Market development. Traffic volumes generated by the Smithfield Market development will simply add to an already congested intersection. However, with the Smithfield Market in place, traffic delays during the AM peak were reduced, as it was assumed that eastbound traffic improvements would be completed along with the Smithfield Market rather than at a later date. These improvements include providing a separate eastbound right turn lane along with the third eastbound through lane. The eastbound improvements provided by the Smithfield Market development will reduce the average delays at the intersection from 55 seconds per vehicle to 42 seconds per vehicle in the morning peak and reduce the existing eastbound queue in the morning from 655 feet to 365 feet with the Smithfield Market. Without the improvements in the eastbound direction provided by the Smithfield Market development, future eastbound queues are predicted to extend from Davis Boulevard Traffic Engineering Study for Smithfield Marice! Development Page 1 I I ~ I I J J I J Ie I I I I f Ie I through the Smithfield Road intersection. Analyses results under opening day conditions are summarized in Table I. Table I. Existing vs Smithfield Market Opening Day Capacity Analyses Mid-Cities Boulevard at Davis Boulevard EB WB NB SB Intersection AM - Existing 47.9 (D)l 78.4 (E) 69.2 (E) 46.3 (D) 55.0 (D) AM - Smithfield Market Opening Day 39.2 (D) 46.7 (D) 53.2 (D) 38.2 (D) 42.3 (D) PM - Existing 43.3 (D) 47.5 (D) 49.7 (D) 52.4 (D) 48.3 (D) PM - Smithfield Market Opening Day 36.8 (D) 51.2 (D) 51.0 (D) 55.5 (E) 49.1 (D) xX.x - Average Control Delay (seconds/vehIcle) (X) - Level of Service A proposed improvement of providing dual left turn lanes in,each approach to the intersection of Mid-Cities Boulevard at Davis Boulevard would significantly reduce the delays under projected conditions with or without the Smithfield Market development. The addition of the Smithfield Market project alone will not necessitate the addition of the dual left turn lanes. The need for the dual left turn lanes is a result of the continuing growth of traffic at this high volume intersection and the combined effect of the development of all of the comers of the intersection. The developer of the Smithfield Market will dedicate right-of-way from his property for this improvement. The development of the Smithfield Market will realign Smithfield Road with Bridge Street at Davis Boulevard and create a four-leg signalized intersection. This will eliminate the existing skewed intersection, improve safety, and allow the heavy northbound left turns in the PM peak to use the signal to turn safely. The recommended design for the realignment of Smithfield Road at Davis Boulevard should provide an eastbound right turn lane to allow eastbound right turn traffic to flow freely through the intersection. This configuration is predicted to allow the intersection to operate at a level of service C during the AM peak period and LOS D during the PM peak period. Without the Smithfield Market development, the existing skewed, unsignalized intersection of Smithfield Road at Davis Boulevard will remain in place. At the unsignalized intersections in the study area, there does not appear to be any adverse impacts to through traffic on the major streets (Mid-Cities Boulevard, Davis Boulevard, and Smithfield Road) due to the traffic generated by the Smithfield Market. At the unsignalized intersections, all movements are predicted to operate at acceptable levels of service. While concerns over the median opening and driveway on Mid-Cities Boulevard have been raised, analysis results indicated that eastbound queues will not extend past the proposed median opening under any scenarios analyzed with the Smithfield Market in place. The 100 feet of Traffic Engineering Study for Smithfield Market Development Page 2 ,. f f· J f J J I '. I I . storage provided at this opening will easily accommodate the 24 vehicles per hour (one every 150 seconds) in the AM peak and the 59 vehicles per hour (one every 60 seconds) during the PM peak. In addition, the "left turn in only" configuration for the median opening will prevent capacity problems at this opening. As a result of projected future background traffic volumes in the area of the Smithfield Market, the following improvements at the Mid-Cities Boulevard and Davis Boulevard intersection were proposed to be implemented by the City of North Richland Hills or TxDOT: · Modify signal phasing to allow eastbound / westbound throughs to operate together. · Additional lane of traffic in each direction on Davis Boulevard. · Dual left turn lanes to accommodate future background traffic volumes, when warranted by volumes and congestion (right-of-way should be allocated on all four comers of this intersection). In the vicinity of the Smithfield Market development, several improvements will be proposed to be provided by the developer when the site is developed. These improvements include: · Realigning the Smithfield Road at Davis Boulevard intersection to Bridge Street and providing a free eastbound right turn lane. · Modifying the traffic island in the southwest comer of the Mid-Cities Boulevard at Davis Boulevard intersection to allow a third eastbound through lane. · Extending the eastbound right turn lane at the Mid-Cities Boulevard and Davis Boulevard intersection. · Providing right-of-way for dual left turn lanes at the Mid-Cities Boulevard and Davis Boulevard intersection. Traffic Engineering Study for Smithfield Marlcet Development Page 3 " I. I I I J J I I I. I I , I . r \ I : PROPOSED DEVELOPMENT The proposed Smithfield Market development will be located on slightly less than 12 acres bordered by Mid-Cities Boulevard, Smithfield Road, and Davis Boulevard (FM 1938). The land is currently zoned C-l. The development will contain land uses including a fast-food restaurant, quality restaurant, gas station, grocery store, and general retail. A summary of the land use and size of each tract is shown in Table 1. Table 1. Land Use Table Lot Land Use Acreage Building Size Floor-Area Ratio 1 Grocery Store 5.75 62,680 ft2 0.25 2 Gas Station 0.52 4,200 ft2 0.19 .., Retail 1.01 6,500 ft2 0.15 .J 4 Retail 2.61 27,470 ft2 0.24 5 Fast-Food Restaurant 0.80 3,000 ft2 0.09 6 Quality Restaurant 1.19 8,000 ft2 0.15 TOTAL 11.88 111,850 ft2 0.22 This development is expected to be completed in a single phase within a one year time frame. When analyzing traffic impacts in the area, the year 2005 was selected as the design horizon year. The site plan for this development is provided in Figure 1. According to the Zoning Map for North Richland Hills, all four comers of the intersection of Mid-Cities Boulevard and Davis Boulevard are zoned commercial (C-I). Therefore, it is expected that the other three comers will contain similar land uses to the Smithfield Market. Based on discussions with the City of North Richland Hills and examining both the North Richland Hills Zoning Map and TAD maps for the area, the antic,ipated land uses and intensity of the other three comers of the subject intersection are summarized in Table 2. On the northeast comer of this intersection, some retail (gas station, equipment rental) is currently in operation. For this analysis, that land was not included in totals for the northeast comer. The projected intensity for the northwest and northeast comers were estimated from the existing acreage assuming a Floor-Area Ratio (FAR) of 0.25. The projected intensity for the southeast comer was based on development plans for this land. The projected development intensities for the northwest and northeast comers are higher than is proposed for the southwest and southeast comers and will produce a very conservative (high) estimate of future traffic volumes generated by these developments. Traffic Engineering Study for Smithfield Market Development Page 4 I- I " I I I I I I Ie I I I I I I I .- I I Existing 500' / / I / (r ;' I I Day I Projected 500' j I Smithfield ftiork t Projected I ~ - / \ / J (I /1 il II Pro jected vs Smithfield Market Pro jected I Dual Left Turns 500' I Smithfield l+1orket with Dual Left Turns I - / ;' II // /; Dual Left Turns vs Smithfield Market with Dual L T Predicted Maximum Eastbound Through Queue Lengths (AM Peak) Figure 11 ~....",.:C U·'·~· I' , Ie I I I I I I 'e I , r e Evaluation The improvement that is predicted to provide the most benefit to the Mid-Cities Boulevard and Davis Boulevard intersection would be the addition of dual left turn lanes on each approach to the intersection. The need for the dual left turn lanes is not a result of traffic generated by the Smithfield Market, but the continuing growth of traffic at this high volume intersection and the combined effect of developments on each comer. The City should consider acquiring the required right-of-way for the dual left turn lanes as the parcels develop. The developer of the Smithfield Market has agreed to provide this right-of-way. The left turn lanes should be constructed when warranted by traffic volumes and intersection delays. Traffic Engineering Study for Smithfield Marlcet Development Page 33 !P- ;~, w,_ , .. .' .. . . . ..' .... ".. ... ".....:~.~ . ," - . ',- ."- , , , . , - ~. ¡, I " ,;'J'^ '.- ,. I I J J I Ie I I I I I I I I- I FINDINGS With two major arterial roadways (Mid-Cities Boulevard and Davis Boulevard) bordering this development, the site should have good accessibility from all directions under build-out conditions. In addition, the five driveway locations for the Smithfield Market should adequately accommodate traffic in to and out of the site. Roadways bordering the Smithfield Market currently have high traffic volwnes. As a result, the intersections have existing levels of service ranging from LOS C to LOS E. With or without the Smithfield Market, the intersections will operate at LOS D or worse in the future. Implementing proposed improvements sooner than anticipated as a result of the Smithfield Market development should benefit roadways adjacent to the site. Traffic Engineering Study for Smithfield Market Development Page 34 I ~ I I I , I Ie , , I I , , , tþ I \ RECOMMENDA TIONS Based on the results of this traffic study, the following are recommended improvements to the roadways adjacent to the Smithfield Market development: Improvements Implemented by Citv of North Richland Hills / TxDOT · Modify signal phasing to allow eastbound / westbound throughs to operate together · Additional lane of traffic in each direction on Davis Boulevard · Dual left turn lanes to accommodate future background traffic volwnes, when warranted by volwnes and congestion Improvements Implemented bv Smithfield Market Developer · Realign Smithfield Road at Davis Boulevard intersection to Bridge Street and provide a free eastbound right turn lane · Modify island in the southwest comer of the Mid-Cities Boulevard at Davis Boulevard intersection to allow a third eastbound through lane · Extend eastbound right turn lane at the Mid-Cities Boulevard and Davis Boulevard intersection · Provide right-of-way for dual left turn lanes at the Mid-Cities Boulevard and Davis Boulevard intersection Traffic Engineering Study for Smithfield Market Development Page 35 I " 1 I I I I I Ie I I I I I , 1 Ie CONCLUSIONS The major conclusions of this study are: · With two major arterial roadways (Mid-Cities Boulevard and Davis Boulevard) bordering the Smithfield Market development, good accessibility is provided to the site from all directions of the mid-cities area. · The planned and recommended improvements to the off-site roadway network should allow the heavy traffic volumes in the study area to operate at acceptable levels of servIce. · Eastbound queues during the AM peak period at the Mid-Cities Boulevard and Davis Boulevard intersection will not interfere with the proposed left turn from Mid-Cities Boulevard to driveway N 1 of the Smithfield Market. Traffic Engineering Study for Smithfield Market Development Page 36 (,1)00 S:;:""""" :::¡;;¡:¡2 zon ~:;¡;;~ "'-..,,0 °oz ;;0;;00 ?;:u"" ~6; :3~ z- s:;:- SiV' -4~ o .." II~ ~EB "''''!i'J ~~a ':~, ~.... c'm ðJ~~ f::~ ~~ ::; vo ç ~ I~ (,I) » s:;:n - -; -1c: z» :1r- ,....., ...- " °0 ;';t¡Z o~ »;';t¡ oc: " ::0 -4 ,....,- »0 ,z ë50 ~.." f""1 Z -¡ SMITHFIELD ROAD ~ t§ en i:: ~ :D m r- C ~ I! (,1)00 000 S:;:"""''''''' » "",...., - 0 < 0 -4;;0- -;;0- zo" (/Joþ; ::é!:;¡;;.:!:¡ ;;¡:¡:;¡;;-; ,...., - ? ......,6 "'-..,,0 °oz OZ 0 :;u;;oo ;;00 ......, ~M-r¡ M""'" -1 x"-J x"" ;:¡;; " . "C,N 3õ »"" ». 0 ZC,N ZC,N (/J - V) (') oV) 0" c: z. ZV) ;:0 ......, co O' 0"" (') ......, ......, . c: -! ---~--~-- 000 »...,.,,....., < 0 -:;0- (/Joþ; ;:o:;¡;;..... ?.."o OZ :;00 ,....,""'" X<s:> -0. » - z-...¡ V)U'1 0(,1) z. ...,., o' ......, i ä} NI~H .TY OF ~~~~~n~~;~:~ND HILLS Y ARD-OF- THE-MONTH May, 2001 AREA 1 Jim & Midae Seaver 6625 Briley Sherry Morgan, Judge AREA 2 Mark & Cindy Foster 6829 Briley Helen Moore, Judge AREA 3 Gayle & Charles Woods 6524 Riviera Cindy Hayes, Judge AREA 4 David & Bonnie Brown 5741 Acapulco Betty and Marshall Siemer, Judge . AREA 5 Abbie Williams 5001 Wvomina Portia Kidwell, Judge AREA 6 Jim & Christine Davis 7509 Steward Ln. Suzy Compton, Judge AREA 7 Bob Gammons, 8317 Thorncrest Ct. Tracy Andrews, Judge AREA 8 Ken & Jackie Clontz 7500 Ridaeway Ave. Scott Wood, Judge AREA 9 Gary & Leann Moore 8821 Trailsedae Dr. Theresa Hampton, Judge BUSINESS LANDSCAPE None Selected . 7200 C Dick Fisher Dr. South * North Rlchland Hills, Texas 76180-7901 USA (817) 427-6650,.. Fax (817) 427-6656 ", .. e e e MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 - MAY 8,2001 - 6:00 P.M. 1. CALL TO ORDER Mayor Scoma called the meeting to order May 8,2001 at 6:00 p.m. ROLL CALL Present: Charles Scoma Lyle E. Welch Russell Mitchell Frank Metts, Jr. JoAnn Johnson Don Phifer Joe Tolbert T. Oscar Trevino, Jr. Mayor Mayor Pro Tem Councilman Councilman Councilwoman Councilman Councilman Councilman Staff: Larry J. Cunningham Patricia Hutson Alicia Richardson Rex McEntire City Manager City Secretary Assistant City Secretary Attorney 2. INVOCA TION The invocation was given by Mayor Scoma. 3. PLEDGE OF ALLEGIANCE Councilman Phifer led the pledge of allegiance. 5. GN 2001-048 CANVASSING MAY 5, 2001 MUNICIPAL ELECTION - RESOLUTION NO. 2001-035 APPROVED Mayor Scoma presented the canvass of the May 5, 2001 Municipal Election. · . e e City Council Minutes May 8, 2001 Page 2 RESOLUTION NO. 2001-035 WHEREAS, a general city election was duly held in the City of North Richland Hills, Texas on May 5, 2001 to elect Council Places 1, 3, 5 and 7; and WHEREAS, a canvass of the votes cast at such election by the Mayor and City Council showed the following results: Candidate Office Votes Nancy Bielik Lyle E. Welch Place 1 632 896 Frank Metts, Jr. Place 3 1224 Tim Welch David Whitson Place 5 639 850 1. Oscar Trevino, Jr. Alan Brundrett Place 7 1161 408 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The above canvass be, and is hereby, in all things approved. 2. The City Council finds that the following candidates should be declared to have been elected to the office indicated, and it is so ORDERED Council, Place 1 Council, Place 3 Council, Place 5 Council, Place 7 Lyle E. Welch Frank Metts, Jr. David Whitson 1. Oscar Trevino, Jr. 3. The above officials have been elected to serve until May 2003 and until their e successors are duly elected and qualified. " . e e City Council Minutes May 8, 2001 Page 3 :Councilwoman Johnson moved, seconded by Councilman Mitchell, to approve Resolution No. 2001-035. Motion carried 7-0. 6. SPECIAL PRESENTATION TO DON PHIFER - RECOGNITION OF SERVICE Mayor Scoma presented to Don Phifer a plaque in recognition and appreciation of his service to the City of North Richland Hills as Council Member Place 5. 7. GN 2001-049 OATH OF OFFICE Dr. Tommy Teague, Pastor of North Richland Hills Baptist Church, administered the oath of office to David Whitson. City Attorney McEntire administered the oath of office to Lyle E. Welch, Frank Metts, Jr. and T. Oscar Trevino, Jr. 8. ADJOURNMENT Mayor Scoma adjourned the meeting at 6:21 p.m. Charles Scoma - Mayor ATTEST: Patricia Hutson - City Secretary -,. "... e Present: e Absent: ITEM CALL TO ORDER DISCUSS ITEMS FROM REGULAR MAY 14, 2001 CITY COUNCIL AGENDA . 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 - MAY 14,2001 - 6:00 P.M. Charles Scoma Lyle E. Welch Russell Mitchell Frank Metts, Jr. JoAnn Johnson David Whitson Joe D. Tolbert T. Oscar Trevino, Jr. Larry J. Cunningham Randy Shiflet Steve Norwood Greg Vick Alicia Richardson Rex McEntire Paulette Hartman Mike Curtis Jim Browne Larry Koonce John Pitstick Jenny Kratz Chris Swartz Patrick Hillis Mark Eder Pam Burney Donna Enos Angel Holbert Cathy Horton Mayor Councilman Councilman Councilman Councilwoman Councilman Councilman Councilman City Manager Deputy City Manager Assistant City Manager Managing Director Community Services Assistant City Secretary Attorney Assistant to the City Manager Public Works Director Parks & Recreation Director Finance Director Director of Development Communications Director Aquatic Manager Human Resources Director Information Services Environmental Services Director Purchasing Agent Utility Services Supervisor Zoning Administrator Patricia Hutson City Secretary DISCUSSION ASSIGNMENT Mayor Scoma called the meeting to order at 6:00 p.m. Item No.9; PS 2001-14 - Councilman Tolbert is concerned with a section of language in the detention pond maintenance agreement. Councilman Tolbert wants the word "property" to be defined as Lots 41-47. Mayor Scoma would like the amount of days of due process for a written demand to be the same amount of days as the city's current · . IR 2001-066 REVIEW PROPOSED BILL A VERAGINGI BUDGET BILLING SYSTEM FOR UTILITY BILLS Pre Council Minutes May 14, 2001 Page 2 ordinance. Currently city ordinance is a seven day notice for a written demand. Item No. 11; PS 2001-11 - Mr. Cunningham advised Council that staff had received a letter from Mr. Long requesting that Council extend his request until June 11, 2001. Staff is suggesting that Council use the following motion, "move to table and extend item to no later than June 11 2001." Mr. Koonce outlined the budget billing/bill averaging system. Mr. Koonce pointed out the following: · New service offered to customers · Smooth out the peaks and valleys · Predictable bills · Service offered only to residential customers · Customers will need a zero balance to qualify and have had service twelve (12) consecutive months · Accounts will be calculated in April of each year · Customers may request removal from system at any time · Terminated accounts - the full amount of the deferred balance is applied to the final bill. Council was advised that the new system was currently being tested and the goal is to go live in June. Staff answered questions from the Council concerning the estimated number of people who might use the service, procedures that would be in place to prevent excessive account balances, the billing procedures and who would be eligible for the service. Council was advised that accounts would not be allowed to exceed $150.00 and that only residential customers would be offered the service. · IR 2001-065 RIGHT-OF-WAY CONSTRUCTION PROGRAM - UPDATE IR 2001-068 UPDATE ON COUNCIL GOALS & OBJECTIVES IR 2001-067 DISCUSS LEGISLA TIVE PDA TE - 77TH LEGISLA TURE ADJOURNMENT _TTEST: Pre Council Minutes May 14, 2001 Page 3 Mr. Mike Curtis introduced Mr. Jack Thompson, Right-of-Way Construction Inspector. Mr. Curtis updated the Council on the right-of-way construction program. Since the program was implemented five months ago, the inspector has approved over 150 projects within the public right-of-way and is currently working on 64 projects. The City Manager briefly reviewed the status of the 2000 Council Goals. The Council was advised that some of the goals set in April 2000 were complete and some would not be completed until the last quarter of 2001. Mr. Vick updated the Council on the status of the following legislative bills: House Bill 1275, Senate Bill 243, Senate Bill 339, House Bill 2458, and House Bill 3182. Mayor Scoma discussed with Council the affect the proposed redistricting will have on the voting locations for the northeast section of the city. Council was advised that the House had passed the Redistricting Plan. Under the proposed Senate Redistricting Plan, Mike Moncrief will represent the City. Two plans are being considered on the Congressional side, One plan will have Dick Armey representing the City andunder the second plan, the City would be placed in Congresswoman Granger's eastern division. Mayor Scoma adjourned the Pre-Council Meeting at 6:48 p.m. Charles Scoma - Mayor Patricia Hutson - City Secretary .f ~ e e e MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN.THE CITY HALL, 7301 NORTHEAST LOOP 820 - MAY 14, 2001 -7:00 P.M. 1. CALL TO ORDER Mayor Scoma called the meeting to order May 14, 2001 at 7:00 p.m. ROLL CALL Present: Charles Scoma Lyle E. Welch Russell Mitchell Frank Metts, Jr. JoAnn Johnson David Whitson Joe D . Tolbert T. Oscar Trevino, Jr. Mayor Councilman Councilman Councilman Councilwoman Councilman Councilman Councilman Staff: Larry J. Cunningham Randy Shiflet Steve Norwood Greg Vick Alicia Richardson Rex McEntire City Manager Deputy City Manager Assistant City Manager Managing Director of Community Services Assistant City Secretary Attorney Absent: Patricia Hutson City Secretary 2. INVOCA TION Mr. Larry Smith, teacher; Julia Johnson and Harrison Smith, students, from Smithfield Middle School led the invocation. 3. PLEDGE OF ALLEGIANCE Harrison Smith of Smithfield Middle School led the pledge. 4. SPECIAL PRESENTATIONS NRH MUNICIPAL COURT - 200012001 TEEN COURT SCHOLARSHIP e e City Council Minutes May 14, 2001 Page 2 Mayor Scoma introduced Debbie Durko, Deputy Court Clerk and Ron Moore, Teen Court Advisory Chair. Mr. Moore presented the $1,000 scholarships to Tony Ortega and Vanessa Trevino. CERTIFICATE OF APPRECIATION Councilman Trevino presented Ms. Sandra Daily with a certificate of appreciation for her outstanding work to the community. Ms. Daily, a substitute teacher was commended for her accomplishments with the recycling program and environmental program at North Ridge Middle School. PROCLAMATION - NATIONAL PUBLIC WORKS WEEK Mayor Scoma presented a proclamation to the following Public Works personnel: Mike Curtis, Public Works Director; David Smyth, Utility Superintendent; Jimmy Cates, Street Superintendent; and Bob Nelson, Construction Superintendent. e 5. REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA None. 6. APPROVAL OF CONSENT AGENDA ITEMS APPROVED A. MINUTES OF THE PRE-COUNCIL MEETING APRIL 23, 2001 B. MINUTES OF THE COUNCIL MEETING APRIL 23, 2001 C. PU 2001-027 - AWARD BID FOR 2001 MISCELLANEOUS STREET SUBGRADE STABILIZATION PROJECT TO MCCLENDON CONSTRUCTION IN THE AMOUNT OF $47,197 D. PU 2001-028 - AWARD BID FOR ECO GAME SCANNERS TO SCAN TEXAS IN THE AMOUNT OF $26,483 Councilwoman Johnson moved, seconded by Councilman Welch to approve the consent agenda. Motion to approve carried 7-0. e City Council Minutes May 14, 2001 Page 3 7. GN 2001-050 - ELECTION OF MAYOR PRO TEM APPROVED Councilman Trevino moved to appoint Councilman Mitchell as Mayor Pro Tem. Councilman Welch seconded the motion. Motion to approve carried 7-0. 8. PZ 2000-45 - PUBLIC HEARING TO CONSIDER THE REQUEST OF RICHARD RUSSELL FOR A ZONING CHANGE FROM C1 COMMERCIAL TO R2 SINGLE FAMILY RESIDENTIAL ON 13.332 ACRES OF LAND IN THE JOHN M. VANDUSEN SURVEY, ABSTRACT #1588 IN THE 6400 BLOCK OF GLENVIEW DRIVE- ORDINANCE NO. 2538 (POSTPONED A T THE 1/22/01 CITY COUNICL MEETING) APPROVED e Mr. Mark Wood was present on behalf of the applicant. Mr. Wood was available to answer any questions from Council. Mr. John Pitstick, Director of Development, addressed the request as it relates to city codes and ordinances and summarized recommendations of staff and the Planning and Zoning Commission. Mayor Scoma opened the public hearing and asked for anyone wishing to speak to come forward. There being no one wishing to speak, Mayor Scoma closed the public hearing. Councilman Metts moved, seconded by Councilman Trevino to approve PZ 2000-45, Ordinance No. 2538. Motion to approve carried 7-0. 9. PS 2001-14 - CONSIDER THE FINAL PLAT OF LOTS 1-48, BLOCK 1, GLENWYCK ADDITION REQUESTED BY RICHARD W. RUSSELL ON 13.33 ACRES OF LAND LOCATED IN THE 6400 BLOCK OF GLENVIEW DRIVE APPROVED Mr. Mark Wood, representing applicant, was available to answer questions from e Council. Mr. Wood outlined applicant's final plat request. e City Council Minutes May 14, 2001 Page 4 Councilman Trevino asked why the applicant was asking for a variance from the masonry wall. Mr. Wood advised Council currently there are no existing masonry walls throughout the entire area. To the east of this property, Diamond Ridge Apartments have done a very nice job in setting back their fence approximately 30 feet from the curb using a masonry column and wrought iron fence. The Diamond Ridge Apartments have heavy landscaping creating an open greenbelt area. Mr. Wood advised Council Mr. Russell, applicant, is requesting to do the same thing. Mayor Scoma asked Mr. Wood if he plans to erect one or two fences. Mr. Wood advised Council applicant has requested a masonry column and wrought iron fence along the property line (20 feet back from the curb) on the south side of the detention facility. Sixty feet back from the curb at the backside of the residential lots, there would be a site-bearing fence with metal pole and wood fence with landscaping in front of the fence. Mr. Wood advised Council, a suggestion had been made by the Mayor and others that applicant consider moving the fence to the back lot line of the property owners' lots, rather than putting it out in front to further open up the greenbelt. e Mayor Scoma advised Council he had a concern with the possibility of a wood fence deteriorating. One would be able to see the deteriorating fence through the wrought iron fence. Mayor Scoma suggested the applicant make the attractive fence the one in which you see and make the other look like a park more so than putting it behind a fence. Mr. Wood advised Council the Planning and Zoning Commission discussed that option as well, and the applicant would not have a problem with either one. Councilman Tolbert asked Mr. Wood how far apart he was going to space the masonry columns and if it applied to Lot 1. Mr. Wood advised Council the columns designed right now are on 30-foot centers. The same fence design would be on Lot 1, which runs along the east side of the entrance. Lot 1 has a 20-foot back from the curb, and would have the same style of masonry column and wrought iron fence. Councilman Tolbert asked if the owner of Lot 1 would be able to put up a wooden fence. e Mr. Wood advised Council the owner of Lot 1 would not be able to construct a wooden fence. Mr. Wood further advised Council that the property owners along the wrought iron fence areas would be required to leave the space open. e City Council Minutes May 14, 2001 Page 5 Mayor Scoma asked Mr. Wood to talk briefly about the maintenance agreement. Mr. Wood advised Council that he and the staff have worked out a maintenance agreement, which would be tied to the Convenants, Conditions and Deed Restrictions. This will be a recorded document that covers the maintenance of the detention area, the entrance area, as well as the private drainage system extending down Glenview Drive to the west. This recorded document will be enforceable by the city should the homeowner association fail to comply with the term and conditions, including, but not limited to the maintenance, mowing, and landscaping of the greenbelt area. The intent is the city has the ability to take care of the problem, and assess the property owners for the cost. Mayor Scoma advised Mr. Wood that the Council discussed some wording changes during their Pre-Council meeting. Mayor Scoma recommends Item NO.3 change the amount of days from ten (10) to seven (7) where it stipulates developer has ten (10) days to reimburse the city or the city shall have a lien against property. This would be in conformance with the normal process of notification in the city. e Councilman Tolbert advised Mr. Wood his main concern is the detention pond maintenance agreement. The agreement calls for the city to have a lien against Lot 48 in case the homeowner association does not adequately maintain the detention pond. Councilman Tolbert would like to have the maintenance agreement apply to all 48 lots, and then the lien could apply to all 48 lots, instead of just lot 48. This would be the same and consistent with the Deed Restrictions. Mr. Tolbert would like to change Exhibit uB" to the Covenants and Restrictions (Declarations of Covenants and Conditions and Restrictions) changed to apply to all 48 lots instead of just Lot 48. Mr. Wood advised Council the purpose and intent of the maintenance agreement is to apply the lien against all 48 lots. Mr. John Pitstick, Director of Development, addressed the request as it relates to city codes and ordinances and summarized recommendations of staff and the Planning and Zoning Commission. The Planning and Zoning Commission approved PZ 2001-14 with the following stipulation: (1) a 5-foot fence maintenance easement be added to the south line of lot 1; (2) fencing within Lot 48 to be wrought iron with masonry columns as shown on the exhibit drawing; (3) add a street light; (4) the homeowner association agreement must be reviewed by staff prior to forwarding the plat to City Council; and (5) add language to the plat stating that the pond area will be maintained by the homeowners association established concurrently with this plat. e Councilman Tolbert inquired about the sidewalk and if the applicant would be acceptable to a straight sidewalk instead of the proposed sidewalk. e City Council Minutes May 14, 2001 Page 6 Councilwoman Johnson asked Mr. Wood if he had a preference where would he want to place the fence. Mr. Wood advised Council he would prefer the wrought iron fence be placed on the lot lines. Mr. Steve Norwood, Assistant City Manager, suggested that staff might want to include changes in the deed restrictions that will prevent homeowners from putting a stockade fence on their property. Mr. Wood advised Council the verbiage could be added into the deed restrictions. Mr. Wood said he would be sure that this addition is made to the five lots, including Lot 1 on the east side that touches the greenbelt area, would be required to be left open as a wrought iron fence. e Councilman Tolbert moved to approve PS 2001-14 subject to (1) approval of all engineering plans; (2) Declaration of Covenants, Conditions and Restrictions be filed with the Glenwyck Plat; (3) Five foot Fence Maintenance Agreement added to the south side of Lot 1; (4) Fencing along Glenview be changed to the following: - wrought iron fence with masonry columns spaced at a maximum of 30 feet; Lots 44-47 and Lot 1 have the wrought iron fence on their property lines closest to or touching Glenview or the greenbelt; and that those property owners of Lots 44-47 and Lot 1 not be allowed on the side of their property closest to or touching Glenview or the greenbelt have any other type of fence other than the wrought iron with column; (5) Plat should state detention pond will be maintained by Homeowners Association; (6) Declaration of covenants, conditions be amended to include language about fencing and also amended to ensure that Detention System Maintenance Agreement is binding on all lots in the subdivision; (7) Detention System Maintenance Agreement attached to Exhibit B of Declaration of Covenants be changed to define the property to which the lien applies for failure to reimburse for maintenance of detention system apply to all 48 lots; (8) Declaration of Covenants, Conditions and Restrictions be modified to state maintenance must comply with: a) any of the latest ordinances of the City of North Richland Hills; b) latest Weed Maintenance Ordinance; and c) Exhibit "C" - Maintenance Schedule; and (9) Detention System Maintenance Agreement - change to read that city agrees to execute a certificate within seven days (normal nuisance procedure) in Paragraph 3 of Exhibit B. Councilman Trevino seconded the motion. Motion to approve carried 7-0. - e e e City Council Minutes May 14, 2001 Page 7 10. PS 2001-13 - CONSIDER THE FINAL PLAT OF LOTS 22-24, BLOCK 6, GLENANN ADDITION REQUESTED BY THOMAS H. SMITH ON 1.91 ACRES OF LAND LOCA TED AT 6825 SIMMONS ROAD APPROVED Mr. Owen Douglas Long, 1615 Precinct Line Road, Suite 106, Hurst, representing applicant was available to answer questions. Mr. John Pitstick, Director of Development, addressed the request as it relates to city codes and ordinances and summarized recommendations of staff and the Planning and Zoning Commission. Mr. Pitstick advised Council the Planning and Zoning Commission approved the final plat with the requirement of a sidewalk. Councilman Trevino moved to approve PS 2001-13 as recommended by the Planning and Zoning Commission with the requirement for a sidewalk covenant. Councilman Metts secondeØ the motion. Motion to approve carried 7-0. 11. PS 2001-11 - CONSIDER THE FINAL PLAT OF FOREST GLENN EAST ADDITION PHASE 1 REQUESTED BY DOUG LONG ON 43.63 ACRES OF LAND LOCATED IN THE 8500 BLOCK OF NORTH TARRANT PARKWAY TABLED Mayor Scoma advised Council the applicant Mr. Doug Long has submitted a letter requesting an extension to be considered by Council. This extension would be no later than June 11, 2001. Councilwoman Johnson moved to table PS 2001-11 and extend item until June 11, 2001. Mayor Scoma suggested that Councilwoman Johnson amend her motion to say no later than June 11 2001. Councilwoman Johnson amended her motion to table and extend no later than June 11, 2001. Councilman Metts seconded the motion. Motion to table carried 7-0. e City Council Minutes May 14, 2001 Page 8 12. LRC 2001-01 - PUBLIC HEARING TO CONSIDER THE REQUEST OF SCOTT KUNKLE FOR A VARIANCE TO THE LANDSCAPING ORDINANCE NO. 2375, ON LOT 2, BLOCK 1, KUNKLE ADDITION. LOCATED AT THE 7700 BLOCK OF MID CITIES BOULEVARD APPROVED Mr. Scott Kunkle, 7812 Red Oak Street, was available to answer questions from Council. Mr. Kunkle is coming before Council requesting additional variances to a previously approved plan approved in July 1999. Councilman Trevino advised Mr. Kunkle that he had visited the property. Councilman Trevino did not see a lot of landscape that was dying. Councilman Trevino wanted to know why applicant varied from his approved plan. Mr. Kunkle advised Council this has been a three-year adventure. A year and a half ago, when he was working with Ms. Ratcliff he would have signed anything to get approval to move forward. Mr. Kunkle is worried that the trees that were mandated in his previously approved plan will cause future problems. Mr. Kunkle was ,advised that trees could not sufficiently grow in the less than 2 feet proposed between the sidewalk and parking drive. e Councilman Welch informed Mr. Kunkle that the Council had received a couple of letters from his neighbors. The neighbors said Mr. Kunkle cut down some trees and wanted to know which trees he cut. Mr. Kunkle believes that the trees the neighbors were referring to were removed during the excavation. The trees removed from the middle of the field were mesquite and hackberry. Mr. Kunkle informed Council that he did not cut any trees down once the building was constructed. The only change Mr. Kunkle has made is the three trees that were supposed to be in the two-foot wide section. Three years ago when he was getting approvals, originally behind the building there was supposed to be 1 O-foot wide greenbelt. Mr. Kunkle would have been able to accommodate by planting trees, but the City Engineers changed their mind, and he had to start over again. Mr. Kunkle had to allow for a 1 O-foot concrete flume. Due to the triangular shape of the land, he had to move the building away from the fence line. Councilman Welch does not see where Mr. Kunkle needs to change his landscape from his prior approved landscape. Mr. Kunkle advised Council his main concern is that Council not require him to plant Oak or Bradford Pear trees in the two-foot wide section in front of his office building. - e City Council Minutes May 14, 2001 Page 9 Councilman Tolbert advised Mr. Kunkle that he agreed that he has a tough lot to develop. Councilman Tolbert wanted Mr. Kunkle to know that the Council is not voting on this variance the same way they voted on his original variance in July 1999. The Council's hands are tied. Councilman Tolbert needs to hear that there is an additional hardship today that exists, that did not exist when they voted in July 1999. The space limitatións and items mentioned existed in 1999. Councilman Tolbert does not see any additional hardships. Mr. Kunkle believes his hardship is that his education is in accounting, and not in landscape design or engineering. The hardship he is being educated to see is that the two feet area is not wide enough to grow trees. Mr. Kunkle believes the additional hardship is he does not see how it is reasonable to expect trees to grow and thrive so close to the drive, sidewalk and road. e Councilwoman Johnson agreed that two feet is not enough to grow trees. The Council approved the landscape plan with two feet. The Council assumed at that time Mr. Kunkle could put a tree in a two-foot space. Councilwoman Johnson suggests that as Mr. Kunkle replaces the bushes they are replaced with crepe myrtles. Mayor Scoma advised Mr. Kunkle there are trees that grow within two foot of space. The Mid Cities Boulevard median has two to three feet of space and there are a number of trees. The issue related to the three trees was not an arbitrary decision; it was based upon the new tree ordinance. Ms. Ratcliff did not come up with a number of trees; it was part of the city ordinance. Mayor Scoma told Mr. Kunkle that the hardship is not on the trees, but the hardship has to be on you. Mr. John Pitstick, Director of Development, addressed the request as it relates to city codes and ordinances. Mr. Kunkle came before the Council in July 1999 with the following variances: - A variance to the required 10' landscape setback for a distance of 115' along Mid- Cities Boulevard which resulted in a loss of 3 trees and; - A variance to the required planting of 18 trees adjacent to the single family to the north and a variance to the required 10' landscaped buffer yard between the single family to the north and the driveway on the north side of the building; A variance to parking lot screening; - A variance to the masonry screening requirement adjacent to the single family, to the north, on a portion of the site. e The Landscape Review Committee added the following stipulations: e City Council Minutes May 14, 2001 Page 10 - Add one large tree and additional shrubs in the front grass area on the east side of the building; and Add 3 large trees and irrigation in the Mid-Cities Boulevard right-of-way. Mr. Kunkle has added significant shrubs and bushes, but is eliminating most of those trees. Mr. Kunkle is proposing the following plan: Removal of 3 shade trees from the Mid-Cities Boulevard frontage, replacing these trees with 2 shade trees, 2 ornamental trees and 55 Chinese hollies at other locations on the site. e Removal of 2 shade trees and 4 photinias from the eastern side of the property. Replacing these materials with 8 Burford hollies, one Japanese Ligustrum and a row of Chinese hollies. Removal of 15 photinias, 2 live oaks and 2 Bradford pear trees on the eastern portion of the property. Replacing 5 of these shrubs and requests that the natural treeline of hackberry, mesquite and oaks be approved in lieu of 15 photinias, 2 live oak trees and 2 Bradford pear trees. Councilman Trevino asked Mr. Kunkle for clarification on his request. Councilman Trevino wants to know if Mr. Kunkle is saying he can not put the two trees in the two foot stretch and can not put the one tree in the island in front of his building. Mr. Pitstick advised Council that is what Mr. Kunkle is saying. Councilman Trevino wanted to make sure the way Mr. Kunkle has his landscape is how he wants to leave his landscape. Mr. Kunkle does not want to plant the two plants by the sidewalk, and he does not want to plant the tree by his building. Councilman Trevino questioned what Mr. Kunkle wanted to plant in place of those items he did not want to plant. Mayor Scoma opened the public hearing and asked for anyone wishing to speak to come forward. There being no one wishing to speak, Mayor Scoma closed the public hearing. Councilman Trevino moved to approve the landscape in place, due to the hardship explained by Mr. Kunkle. Mayor Pro Tem Mitchell seconded the motion. Motion to approve carried 4-3; with Councilman Metts, Mayor Pro Tem Mitchell, Councilwoman Johnson, and Councilman Trevino voting for approval and Councilmen Welch, Whitson and Tolbert voting for denial. e e City Council Minutes May 14, 2001 Page 11 13. GN 2001-051 - PUBLIC HEARING TO CONSIDER THE UPDATE TO THE 1992 COMPREHENSIVE LAND USE PLAN AND CONSIDER APPROVAL OF ORDINANCE NO. 2553 APPROVED Mr. John Pitstick advised Council at the April 26th Planning and Zoning Commission meeting they voted to approve the Comprehensive Plan. Mr. Pitstick advised Council there are a couple of citizens present who have some changes for Council consideration. Mr. Pitstick advised Council the approval of the Comprehensive Land Use Plan will not make direct zoning changes, but is an 8 to 10 year plan. As a result of the changes, staff was able to develop strategic planning areas and will continue to develop other studies. Staff is also requesting an approval of the updated Master Thoroughfare Plan. It Mr. Pitstick presented Ms. Cathy Horton, Zoning Administrator, who will discuss the most recent changes to the Comprehensive Land Use Plan. Ms. Horton outlined the following changes: Adjust the office designation along Martin Drive, north of the Home Depot site; Replace the neighborhood service designation with single family at Bursey Drive and Smithfield Road; Çhange the institutional designation on the Jim Stephens property to neighborhood service; Change the Town Center designation on the Kent Davis site to retail; Change the office designation at the southwest intersection of Rumfield Drive and Precinct Line Road from office to retail; Change a portion of the Gary Wang site at Davis and Proposed Hightower from single family to retail; and Include the Food Lion site into the south Grapevine Highway Strategic Planning Area. - Ms. Horton further advised Council that the Planning and Zoning Commission only changed a portion of Mr. Wang's request. His request was to have his property zoned retail from Davis Boulevard back 500 feet as it was originally in the 1992 plan. The 1992 plan showed more retail than what the updated Comprehensive Plan proposed. The 1992 plan showed 500 feet off the road and the new plan shows the retail lining up e e e City Council Minutes May 14, 2001 Page 12 with the rest of the zoning up and down the street frontage, which is about 300 feet. Mr. Wang would prefer that his entire site be shown for retail development. Ms. Horton advised Council in a previous platting decision a street stub was provided to the west end of the site, and Ms. Horton presumes that is why the 1992 plan shows it for Single Family. Ms. Horton reminded Council of their decision to include Linda Spurlock Park and the Honey Lane Street frontage in the south Grapevine Highway Strategic Planning Area. Ms. Horton advised Council of the Commission discussed the potential for extending a north/south section of Shady Grove Road, south, to intersect with North Tarrant Parkway. The Commission decided not to include it in their recommendation due to a Traffic Impact Analysis. Staff will have the results of the Traffic Impact Analysis and both the Commission and Council could consider revising the plan. Ms. Horton advised Council staff may bring proposed changes to streets in the Home Town NRH. Since the Planning and Zoning Commission's recommendation, staff has received letters from Jack Pruitt, Robert Brooks, and Gary Wang. Mr. Pruitt is requesting Council consideration of changing the 4-acre tract south of Bursey and east of Rufe Snow to retail, in order to match the existing zoning of the property. Mr. Brooks requests that his property at 8709 Cardinal Lane be shown as Industrial on the plan instead of Town Center, under the 1992 plan his property was zoned L 1 . Staff recommendation is to approve Ordinance No. 2553 to adopt the Land Use element, Transportation Plan element, Comprehensive Plan Booklet as well as the strategic area maps. Councilman Trevino asked if Mr. Pruitt who has property zoned as C1-Commercial, and Council is considering the property as Office; can he build old C1 on that property. Ms. Horton advised Council before them tonight is planned designations, not to change the zoning. Councilman Trevino further clarified that the zoning remains the same and Mr. Pruitt can do what he wants as long as it falls under C1-Commercial zoning. Mr. Pruitt will not be able to come back and change it to Residential. Ms. Horton advised Council that Mr. Pruitt could request a zoning change, but according to the Comprehensive Land Use Plan the zoning shows service. e e e City Council Minutes May 14, 2001 Page 13 Ms. Horton said that Mr. Pruitt advised her that he felt more comfortable with the plan showing the red to match his existing zoning, than showing pink (office) which is less than what he has the right to do now. For clarification Councilman Trevino asked staff if the city still has Commercial zoning. Mayor Scoma advised Council there was still Commercial zoning. The zoning is a different type of Commercial. The C1 that Mr. Pruitt has now would be retail. Councilman Trevino inquired about the northwest corner of North Tarrant Parkway and Davis Boulevard that was zoned as retail. Councilman Trevino was under the impression that it was going to be zoned neighborhood services so as to provide a buffer between the Steeple Ridge and Caddo Court areas. Mr. Pitstick advised Council he does not recall a lot of discussion about changing the zoning to neighborhood services. Councilman Trevino asked Mayor Scoma if Council would be able to change zoning with a motion. Mayor Scoma advised Council that he would like Council to get a list of changes before a motion is on the floor. Councilman Trevino asked Mayor Scoma to include the following on the list of changes: Mr. Pruitt's property be designated as retail Property on the northwest corner of North Tarrant Parkway and Davis Boulevard designated as neighborhood services Mr. Wang's property designated as retail from Davis Boulevard 500-foot back and neighbor services for the rest of the property fronting along Hightower. Mayor Scoma asked for clarification from Councilman Trevino on his recommendation. Mayor Scoma asked Councilman Trevino if he would like to modify the plan in the area on Hightower to make that all neighborhood services that is currently showing as residential. Councilman Trevino would like to see it as neighborhood services because it is fronting on C4U which is Hightower. e City Council Minutes May 14, 2001 Page 14 Mayor Scoma voiced his concern that this particular area was not addressed at the public hearing. Other major commercial corridors were addressed at the public hearing. Hightower has never been intended to be a commercial corridor and Council may want to refer this back to the Planning and Zoning Commission to address at a public hearing. Councilman Trevino rationalized his recommendation by stating that the houses around this area face away from the property. Mayor Scoma recessed the meeting at 9:21 pm Mayor Scoma reconvened the meeting with same members present at 9:30 pm Mayor Scoma opened the public hearing and asked for anyone wishing to speak on the item to come forward. e Mr. Michael Makens, 8713 Cardinal Lane, spoke in opposition to the item. Mr. Makens owns approximately 2 acres of land on the southwest corner of Mid Cities Boulevard and Simmons Road. The property is currently zoned Light Industrial and has been for several years. He is opposed to the city changing his current designation of Light Industrial to Town Center District. Mr. Makens believes that TC zoning would only allow him to sell his property to his surrounding property owners (BISD, Blue Line Ice, and Church of Christ) and seriously downgrade his current zoning. He requests that Council not change his current zoning. Mr. Jack Pruitt, 17214 Meadow Tree Circle, Dallas is opposed to the proposed Comprehensive Land Use Plan. He was not advised of the city's intent to reclassify his property from C1 to Office zoning. He requests that Council not change his current zoning. Councilwoman Johnson wanted to make sure that citizen's are aware that the Council is not changing the zoning of their property. The Council is updating the Comprehensive Land Use Plan. Mr. Pruitt asked if Mr. Jim Makens could respond to Councilwoman Johnson comments. Mr. Jim Makens, 3200 Airport Freeway, Suite 230, Bedford, advised Council his concern is that the property has not been platted. If the property is not sold in the near future, the intent of the future Council may not be that of the current Council as it relates to the land use plan. He and Mr. Pruitt do believe it puts a foothold on the change of this property to a future use of Office. Mr. Kevin Miller, 1192 Bowling Ranch Road, Azle, is here tonight representing W.C. Jennings Company who currently owns the property that is immediately north of the - City Council Minutes May 14, 2001 Page 15 e Winn Dixie at Starnes and Davis. Approximately 9.5 acres of land is currently zoned C1. There is a significant area of wetlands. They are currently working with FEMA Corp of Engineers. The property is currently being developed, and they are currently under contract to do the flood study to revise the land; the filling has been done; the survey has been authorized; and work will begin on the study in the next week or so. It is his understanding that the property is also in the process of being sold for a strip development. Mr. Miller echoes the concern of Mr. Makens. If something does not happen tomorrow and they do not get the commercial built out in the six months or few years with the land plan being changed the way it is they have seen other cities come back after the fact and down zone property. A letter was written by Doug Jennings and submitted on April 20th to the Planning and Zoning Department. Mr. Gary Wang, 7237 Davis Boulevard, is opposed to the proposed Comprehensive Land Use Plan. Mr. Wang was never given notice that the city was considering an updated plan until the last meeting in April. He has 9.3 acres tract on Davis Boulevard. The frontage along Davis Boulevard is about 332 feet and the potential frontage along proposed Hightower is 1200 feet. He would like Council to consider his request of changing the plan to show his property as Commercial. There is a section of his property that is shown as neighborhood services from Davis Boulevard frontage back approximately 322 feet. e Mayor Scoma asked for anyone else wishing to speak on the item to come forward. There being no on else wishing to speak, Mayor Scoma closed the public hearing. Councilwoman Johnson asked Council to include the property owned by W.C. Jennings Company north of Winn Dixie as its existing zoning (Commercial). Councilman Trevino moved to approve Ordinance No. 2553 adopting the Update to the 1992 Comprehensive Plan, including the Update to the Land Use element, the Transportation Plan element, the strategic area maps, and the accompanying Comprehensive Plan Booklet as recommended by the Planning and Zoning Commission with the following exceptions: · Pruitt property located at Bursey and Rufe Snow go to retail · Property on the northwest corner of North Tarrant and Davis Boulevard go to neighborhood services · Property north of Winn Dixie go to retail · Property north of Hightower (Mr. Wang's property) go 500 foot back as neighborhood services - Councilman Tolbert seconded the motion. · City Council Minutes May 14, 2001 Page 16 Councilman Trevino confirmed Mr. Wang's concern was that he wanted to go back 500 feet and wanted to make sure he was correct. Mr. Wang said that he wanted his property to be retail and go back 500 feet. Councilman Trevino changed his motion from neighborhood services to retail for Mr. Wang's property. Councilman Tolbert withdrew his second. Mayor Pro Tem Mitchell seconded the motion. Councilman Trevino advised Council that he wants to be consistent with the rest of the property that is C4U. Councilman Trevino advised Council the property (south of Hightower) from Mr. Wang is C1. The property across from Mr. Wang has the ability to go retail or commercial whereas, Mr. Wang's property is currently zoned agricultural and would not have the option to go retail. e Councilman Tolbert requested that Councilman Trevino not contribute to having Davis looking like Rufe Snow. Councilman Tolbert asked Councilman Trevino to amend his motion to neighborhood services for Mr. Wang's property. Councilman Trevino accepted the amendment and Mayor Pro Tem Mitchell seconded the amendment. Motion to approve carried 7-0. 14. GN 2001-052 - APPOINTMENTS TO NAMING COMMITTEE APPROVED Mayor Scoma suggested Councilmen Metts, Tolbert and Trevino to the naming committee. Councilwoman Johnson moved to appoint Councilmen Metts, Tolbert and Trevino to the naming committee. It Motion to approve carried 7-0. e e - - City Council Minutes May 14, 2001 Page 17 15. GN 2001-053 APPROVING MEMBERSHIP IN A POLITICAL SUBDIVISION CORPORATION FOR ELECTRIC AGGREGATION - RESOLUTION NO. 2001-036 APPROVED Mr. Greg Vick summarized item for Council. Mayor Pro Tem Mitchell moved, seconded by Councilwoman Johnson to approve GN 2001-053, Resolution No. 2001-036. Motion to approve carried 7-0. 16. GN 2001-054 - APPOINTMENT TO PLACE 4 ON THE CRIME CONTROL AND PREVENTION DISTRICT APPROVED Mayor Scoma suggested the appointment of Councilwoman Johnson to place 4 on the Crime Control and Prevention District. Councilman Metts moved to appoint Councilwoman Johnson to place 4 on the Crime Control and Prevention District, term expiring September 1, 2001. Councilman Tolbert seconded the motion. Motion to approve carried 7-0. 17. PU 2001-029 - AWARD OF BID FOR NRH20 GENERAL LIABILITY INSURANCE APPROVED Mr. Patrick Hillis, Human Resources Director, summarized item for Council. Councilman Tolbert moved to award the contract for general liability insurance for the NRHzO waterpark to Key and Piskuran/Lexington Insurance in the total amount of $41,383 plus $5,000 for certification fee for the policy term of May 24, 2001 to May 24, 2002 as recommended by staff and authorize the City Manager to execute the policy agreement. Mayor Pro Tem Mitchell seconded the motion. Motion to approve carried 7-0. e e e City Council Minutes May 14, 2001 Page 18 18. A. CITIZENS PRESENTATION None. B. INFORMATION AND REPORTS · May 15 - Business Appreciation Luncheon held at BISD Fine Arts/Athletics Complex at 11 :30 am · May 19 - NRH20 opens · May 25 - "A Lotta Night Music Concert Series" held at Green Valley Park beginning at 7:00 pm · May 28 - City offices will be closed for the holiday · May 29 - Rescheduled City Council meeting beginning at 7:00 pm · BISD Historical Committee is asking the community who may have memorabilia to contact Ms. Joe Reynolds at 817-485-7738 19. ADJOURNMENT Mayor Scoma adjourned the meeting at 10:38 pm. Charles Scoma - Mayor ATTEST: Patricia Hutson - City Secretary CITY OF NORTH RICHLAND HILLS Department: Public Works Council Meeting Date: 5/29/01 Subject: Approve Interlocal AQreement with Tarrant County for the Maintenance of North Tarrant Parkway - Resolution No. 2001-037 Agenda Number: GN 2001-055 Tarrant County requires an annual interlocal agreement for all County owned roadways that are located within the city limits of a city. The annual agreement for North Tarrant Parkway is required in order to clearly define who will maintain, police, and sign the roadway. This agreement does not cover any issues dealing with expansion of the roadway. The key issues are summarized below: 1. Tarrant County agrees to provide all labor, equipment, and materials necessary to maintain and reconstruct existing sections of North Tarrant Parkway for maintenance purposes that are within the corporate city limits of North Richland Hills. 2. The City of North Richland Hills agrees to maintain the approaches to the roadway. 3. The City of North Richland Hills agrees to provide intersection channelization and all markings, signs and signals. 4. The City of North Richland Hills agrees to continue policing responsibilities related to the roadway. The City's responsibilities listed above are not new. The City has been responsible for these items in the past. The Attorney for the City has reviewed and approved the agreement. Recommendation: To approve Resolution No. 2001-037 Source of Funds: Bonds (GO/Rev.) Operating Budget Other Finance Review Account Number Sufficient Funds ÄvallaDle ~ Finance Director ltJ.:in ~,1;4' e rtrt1ent Hea ignature . . . RESOLUTION NO. 2001-037 WHEREAS, Tarrant County has proposed an interlocal agreement dealing with North Tarrant Parkway; and WHEREAS, Tarrant County and the City of North Richland Hills mutually benefit from the said interlocal agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The City Manager be, and is hereby authorized to execute the attached contract with Tarrant County as the act and deed of the City of North Richland Hills. PASSED AND APPROVED this the 29th day of May, 2001. APPROVED: Charles Scoma, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS~ ~~D LEGALITY: Rex cE ire, Attorney for the City APPROVED AS TO CONTENT: Jte4 :,4n(;~~ ike ÒUrtlS, .E., ublic Works Director . . ....... .' cov..···· ....·~m'·~' <·~f~.. ::J: ~'. ::1; ~ ~: :< I~'J >: ~Í"" ~ fJJ: . . I, ,: I, .. .. ,I ....:..~.:.... TARRANT COUNTY NORTHEAST SUB-COURTHOUSE 645 GRAPEVINE HIGHWAY. SUITE 6 HURST, TEXAS 76054 (817) 581-3600 FAX (817) 581-3603 B. GLEN WHITLEY COUNTY COMMISSIONER PRECINCT NO.3 DATE: May 7, 2001 TO: Mr. Mike Curtis, Director Public Works City of North Richland Hills FROM: Jane Sanford, ~ Precinct Administrator ¿;J ~ . SUBJECT: Interlocal AgreementlNotice to Proceed Enclosed are five copies of the interlocal agreement between Tarrant County and the City of North Rich1and Hills for any need roadway repair and maintenance of North Tarrant Parkway lying within the City of North Richland Hills. Also enclosed with the agreements is a "Notice to Proceed" (NTP), which is required by the District Attorney's Office. Please have these agreements and the NTP statement signed and return all the original agreements along with the NTP form to our office. We will place them on the Commissioners Court Agenda and send you an executed copy after Judge Vandergriff and Commissioner Whitley has signed them. If you have any questions, please do not hesitate to call me. Enclosures . . . . NOTICE TO PROCEED The City of North RicWand Hills hereby notifies the County that the County may proceed with this Project as specified in the attached Agreement, on or after (day/month/year) Court Order # Authorized City Official City of North Richland Hills . . . THE STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS COUNTY OF TARRANT CONTRACT This Agreement made and entered into this the _ day of , 2001, by and between the County of Tarrant, acting herein by and through its governing body the Commissioners Court, hereinafter referred to as TARRANT COUNTY, and the CITY OF NORTH RICHLAND HILLS acting herein by and through its governing body, hereinafter referred to as THE CITY, both of Tarrant County, State of Texas, ¥.itnesseth: WHEREAS, this Agreement is made under the authority granted by and pursuant to Chapter 791 of the Texas Government Code; and WHEREAS, the party or parties paying for the performance of governmental functions or services shall make payments therefore from current revenues available to the paying party; and, WHEREAS, the governing bodies of the two parties find that the project or undertaking is necessary for the benefit of the public and that each party has the legal authority to build or maintain the project or to provide such service. and the construction and improvement thereof is in the common interest of both parties hereto; and that the division of costs provided for constitutes adequate consideration to each party; said project being more particularly described as: Any needed roadway repair and maintenance of North Tarrant Parkway, a county thoroughfare connecting the county road system and lying within the City of North Richland Hills. Specifically, the section of North Tarrant Parkway lying within the City of North " . Richland Hills from Precinct Line Road to 2900 feet west of Smithfield Road (city limit line). The work will include maintenance of the right-of-way. WHEREAS, the parties hereto, in order to facilitate the financing and construction of the needed facility, and in order to share the costs of having said work to be done have agreed to share in the financing of said construction as hereinafter stated in detail. The CITY must notify the COUNTY within thirty days of the completion of this project of any complaint the CITY has with the project. For and in consideration of the mutual undertaking hereinafter set forth and for adequate . consideration given, the parties agree as follows: 1. TARRANT COUNTY agrees to repair and maintain all the sections of North Tarrant Parkway that lie within the corporate city limits of North Richland Hills. 2. TARRANT COUNTY agrees to provide all labor, equipment and materials necessary to accomplish the work. 3. The CITY agrees to maintain the approaches to the roadway. 4. The CITY agrees to provide intersection channelization and all markings, signs and signals. 5. The CITY agrees to continue policing responsibilities related to the roadway. By entering into this Agreement the parties do not create any obligations express or implied . other than those set forth herein and this Contract shall not create any rights in parties not signatories hereto. The parties to this Agreement do not intend by this Agreement that any specific third party . . . may obtain a right by virtue of the execution or performance of this Agreement. CITY agrees that the COUNTY will notify the CITY when the COUNTY is performing major reconstruction on this project, but this Agreement does not require the County to do this project within any particular time frame. This Agreement shall terminate automatically upon happening of any of the following events: 1. The completion of the improvement provided for herein or; 2. At the end of one (1) year from date herein, unless renewed by both parties in writing. CITY OF NORTH RICHLAND HILLS By: City Manager ATTEST: CITY City Secretary City TARRANT COUNTY: TOM VANDERGRIFF, County Judge ATTEST: COUNTY . . . B. GLEN WHITLEY COUNTY COMMISSIONER, PRECINCT 3 * APPROVED AS TO FORM District Attorney's Office * By law, the District Attorney's Office may only advise or approve contracts or legal documents on behalf of its clients. It may not advise or approve a contract or legal document on behalf of other parties. Our review of this document was conducted solely from the legal perspective of our client. Our approval of this document was offered solely for the benefit of our client. Other parties should not rely on this approval, and should seek review and approval by their own respective attomey(s). ~. .." "'.-'~.. .-..~ .~ ~ CITY OF NORTH RICHLAND HILLS Department: Public Works Council Meeting Date: 5/29/01 Subject: Approve Payment in the Amount of $498,160.91 to Agenda Number: PAY 2001-001 the Texas Department of Transportation for the Rufe Snow Drive/ Glenview Drive Intersection Project On January 22, 1996, Resolution No. 96-06, City Council approved the agreement with the Texas Department of Transportation (TxDOT) for the reconstruction of the Rufe Snow Drive/ Glenview Drive Intersection. Per the terms of the agreement, the City is responsible for one-half of the engineering, right-of-way, and construction. The project was let in March 2001 for a bid amount of $895,763.81. After TxDOT included all of their direct and indirect costs to the project, the City's portion is $498,160.91. TxDOT is now requesting the City pay it's portion. The construction costs are higher than originally estimated and exceeds the budget amounts shown in the 2000/2001 Capital Projects Budget. Staff anticipated the construction cost bidding more than originally estimated several months ago and requested additional funds for the cost overrun. The Regional Transportation Council (RTC) recently approved an additional $350,000 in funding for this project. Sufficient funds are available to pay TxDOT the $498,160.91. Recommendation: To approve payment in the amount of $498,160.91 to the Texas Department of Transportation for the Rufe Snow Drive/Glenview Drive intersection. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other Account Number 20-02-09-6000/02-64-18-6000/ Sufficient Funds Ävallable 1 ;1-1 ;1-tstHjUUU 'J1;1 J~ C, ~. o'epartment Head Signature Finance Director ~* · I Texas Department of Transportation P.O. BOX 6868. FORT WORTH, TEXAS 76115-0868. (817) 370-6500 April 20, 2001 CONTACT: DD-CM CMAQ CSJ: 0902-48-280 Project No. CM 95(114) Rufe Snow Dr. at Glenview Drive Tarrant County :~ <þ i ~ I --'''"7-- .~,.--'" ~._'~)\ .. J - ¡ ", ' i'; V ' : \ I \' '_', ~ ..J_,,_ NIT.LarryJ.Cunninghæn City Manager City of North Richland Hills 6720 N.E. Loop 820 North Richland Hills, Texas 76180-7901 ; ¡ /"',; ,) ~ ., ! II: 11 L_:_..::.-,':'" . .._2_ · Dear NIT. Cunninghæn: Attention: Mr. Mike Curtis, P .E. The above subject project was let in March 2001. In accordance with the agreement dated February 9, 1996, the City of North Richland Hills's share of this project is $498,160.91. A breakdown of the ænount for each project is as follows: Estimated Construction Cost Engineering and Contingencies(11 %) Estimated Cost of Project City's Share ofConstruction(50%) City's Share of Preliminary Engineering(50%) Subtotal of City's Share Less Escrow Funds Deposited Escrow Funds Due $895,763.81 +98,534.02 $994,297.83 497,148.91 +3,012.00 $500,160.91 2,000.00 $498,160.91 A check made payable to the Texas Department of Transportation in the ænount of $498,160.91 is to be forwarded to this office as soon as possible after the date of this notification. · An Equal Opportunity Employer . . . ~.LarryJ.Curuùnghmn April 20, 2001 Page 2 of2 If additional funding is required rrom the City, we will notify you in writing of the additional mnount. Upon completion of these projects, the State will perform an audit of the costs and any funds due the City will be promptly returned. If you have any questions concerning this matter, you may contact Mr. Joel Mallard at (817) 370-6591. Thank you for your prompt attention to this matter. Sincerely, ~~ /¿£.--=-9 f'Þ:" Charles L. Conrad, P.E. Director of Transportation Planning and Development JHM . * A,Texas . Department of Transportation ESCROW RECAPITULATION Highway Rufe Snow Drive County Tarrant Limits at Glenview Dr. Description Intersection Improvements Type of Agreement CMAQ Scheduled Letting Date March 2001 Agreement No. CSJ 0902-48-280 Project No. CM 95(114) Date of Execution Requested By Section Date Entity Name Entity Code Joel Mallard District Design April 20, 2001 City of North Richland Hills 30500 . Reason & Amount of Funds Requested Right of Way 0 $ 0.00 Preliminary Engineering 0 $ 0.00 Preletting 0 $ 0.00 Post Letting ~ $ 498,160.91 Construction Adjustment 0 $ 0.00 Total $ 498,160.91 To be Filled in by Outside Entity Amount Submitted Check # Date Submitted PLEASE RETURN TillS COMPLETED FORM WITH PAYMENT . To be Filled in by TxDOT After Receipt Amount Received Date Received Processed Deposit CITY OF NORTH RICHLAND HILLS Department: Finance Council Meeting Date: 5/29/2001 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 Tuesday, May 29, 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 been favorable for the Sales Tax Revenue Bond refunding. · On April 23, 2001 the City successfully negotiated a refunding of General Obligation bonds resulting in a $600,000 savings over ten years. 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. SWS successfully marketed the April 23 sale. Prior to the 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 Other '. Finance Director 11"'< . . . , , , CITY OF NORTH RICHLAND HILLS 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 May 29. This will be determined depending on conditions existing the day after Memorial Day. If the sale is not economically feasible, staff and First Southwest will continue to negotiate the sale. A special meeting would then need to be called on Thursday, May 31 at 6:00 p.m. This meeting has already been posted in case it is necessary. The results of the sale will be submitted to City Council on May 29 or the special meeting on May 31. 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 Tuesday, May 29 or Thursday May 31. This ordinance also authorizes all the other necessary actions such as paying agenUregistrar agreements. In addition to Council approval of the refunding sale, it will be necessary to have the Park and Recreation Facilities Development Corporation Board to also review the sale and approve. This is a legal requirement of the half-cent sales tax law. We have set a meeting of the Development Board for 6:45 p.m. on Tuesday, May 29. Mayor Scoma, Councilmembers Lyle Welch and Joe Tolbert and the three citizen members at large will need to attend. This of course will be prior to formal Council action on May 29. If a May 31 meeting is needed, then a joint meeting of the Park Development Board and Council is planned for 6:00 p.m. Thursday, May 31. 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 $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. CITY COUNCIL ACTION ITEM RESOLUTION NO. 2001-034 . A RESOLUTION by the City Council of the City of North Richland Hills, Texas, relating to the "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 "; approving the resolution of the North Richland Hills Park and Recreation Facilities Development Corporation authorizing the issuance of such Bonds; resolving other matters incident and related to the issuance of such Bonds; and providing an effective date. WHEREAS, North Richland Hills Park and Recreation Facilities Development Corporation (the "Issuer") was created by the City of North Richland Hills, Texas (the "City"), pursuant to the provisions of Section 4B of the Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended (the "Act"); and WHEREAS, the Issuer is empowered to issue bonds for the purpose of refunding outstanding bonds issued on account of a "project" defined as such by the Act; and WHEREAS, the Issuer has determined to refund the following described outstanding bonds of the Corporation (hereinafter collectively referred to as the "Refunded Obligations"), to wit: . (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 WHEREAS, Section 25(f) of the Act requires the City Council of the City approve the resolution of the Issuer providing for the issuance of the Bonds no more than sixty (60) days prior to the delivery of the Bonds; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS: SECTION 1: The Resolution authorizing the issuance of "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001", adopted by the Issuer (the "Issuer Resolution") on May 29, 2001 and submitted to the City Council this day, is hereby approved in all respects. The Bonds are being issued to refunding the Refunded Obligations (identified in the preamble hereof). . CITY RES.doc 1 . SECTION 2: The approvals herein given are in accordance with Section 25(f) of the Act and the Issuer's bylaws, and the Bonds shall never be construed an indebtedness or pledge of the City, or the State of Texas (the "State"), within the meaning of any constitutional or statutory provision, and the owner of the Bonds shall never be paid in whole or in part out of any funds raised or to be raised by taxation (other than sales tax proceeds as authorized pursuant to Section 4B of the Act) or any other revenues of the Issuer, the City, or the State, except those revenues assigned and pledged by the Issuer Resolution. SECTION 3: The City hereby agrees to promptly collect and remit to the Issuer the Gross Sales Tax Revenues (as defined in the Issuer Resolution) in accordance with the terms of the Issuer Resolution and the Act to provide for the prompt payment of the Bonds, and to assist and cooperate with the Issuer in the enforcement and collection of sales and use taxes imposed on behalf of the Issuer. SECTION 4: The City hereby acknowledges and recognizes that the Bonds are being issued as tax exempt obligations under and pursuant to section 103(a) of the Code (as defined below) and, in connection therewith, the City hereby makes the following representations and warranties to the Issuer: (a) meanings: Definitions. When used in this Section, the following terms have the following "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. CITY RES.doc 2 . "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: . (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 (including property financed with Gross Proceeds of the Refunded Obligations), 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 (including property financed with the Gross Proceeds of the Refunded Obligations), 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. CITY RES.doc 3 . (e) Not to Invest at Hioher 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 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 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 Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Payment of Rebatable Arbitraoe. 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 remit to the Issuer for payment to the United States the amount described in paragraph (3) above and the amount described in paragraph (4) below, at the times, in the manner and accompanied by such forms or other 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 paragraph (2), 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 the amount remitted to the Issuer for 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. . (h) Bonds Not Hedoe 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 CITY RES.doc 4 . . . 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 RefundinQ. 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 necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-1 O( 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 5: 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. CITY RES.doc 5 . . . SECTION 6: This Resolution shall be in force and effect from and after its passage on the date shown below. PASSED AND ADOPTED, this May 29, 2001. CITY OF NORTH RICH LAND HILLS, TEXAS Mayor ATTEST: City Secretary (City Seal) CITY RES.doc 6 ~-lJ ~ '= ,_ 'E: ~ ~ <> '" 0: ~ ]£ - - ~~ ,§ " -;;, -5 >. _ c "" '" :=.l:! .~ ~ ""~ " - '6.= ~2 ~ (/'J '" ... .l:! 8 ~;- J:.J:. .9 .9 ~ ,t é:~ c C >'''' ~ ~ g ~.9 ~ .; ; ,~ ~ :~ .2.- ~ -; J:.' J:. '" !S ~ 1.'" c : ë >. c 'J) E ~ ~ 'J: - .~ ¡; .~ '§ ~ '§ ~ ë ~ '" C '" The Bonds are payable solely from the moneys described in the Resolution and not from any otlrer revenues, properties or income of the Corporation. Neither the State, ~ ~ .$ Ta"ant County, the City nor any other political corporation, subdMsion, or agency of tire State shall be obligated to pay the Bonds or the interest thereon, and neither ¡:: ,ª ." the failh and credil nor the taxing power of the State, Ta"ant County, the City, or any political corporation, subdivision, or agency thereof, except as authorized by 0;: ¡¡¡ Section 4B of the Act, ispledgedto the payment of the principal of or interest on the Bonds (see "The Bonds - SecuriJy and Source ofpayment"), ~ 0 :3 E .: ,9 PURPOSE, , , Proceeds from the sale of the Bonds will be used to advance refund a portion of the Corporation's outstanding debt, consisting of $4,165,000· Sales Tax ~ ¡¡ B Revenue Bonds, Series 1992, $2,190,000· Sales Tax Revenue Bonds, Series 1994, and $525,000· Sales Tax Revenue Bonds, Series 1995 (the "Refunded Bonds"), to lower c 5:.; interest costs on such obligations, See "Schedule I - Schedule of Refunded Bonds" for a more detailed description of the Refunded Bonds, Proceeds from the sale of the ~ 9 "'ª Bonds will also be used to pay the costs associaled with the sale of the Bonds, c en c:r c"'; .... :;:.:... 0 ~ Ë 5 c..o '= § ~ g ::; ~.~ .9 ,E ~ _ E ... ,~~ ~ -§ ~ ,c :J"; ~ É. 2':- ~ - ,j .5] ~ 2 :r. !: % ~ § :;~.l:! " g § ~ ~ ~ 2 ~ ~ 'ü .2 .9 g ~ ~ ~ c .ê ~ g ,5::J '~ ~Ê] :; ..E ~ C - a: .::¡:g~ c .- ... ~ ,5 ~ ~] ~ en<>J:. ~~:Ee ~ "0 : ~.~ c o - ';;; >. C 0 ... ~ '= .5 ~ :.å c 5 '" E en '5 ~ _.~ 0....$ >. .~ Ë ; ¡:: 0.5 r I I ..- ; f ., I·' I PREUMI:'o;ARY OFFICIAL ST A TBIEST - Dated May 22, 2001 NEW ISSUE - Book-En try-Only) Ratings: Moody's: "Aaa" S&P: "AAA" (Financial Guaranty Insured, see "Municipal Bond Insurance" and "Other Information - Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters - Tax Exemption" herein, including the alternative minimum tax on corporations, THE BONDS WILL NOT BE DESIGNATED AS "OUALlFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS 57,225,000" NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION (Tarrant County) SALES TAX REVENUE REFUNDING BONDS, SERIES 2001 Dated Date: June 1,2001 Due: September I, as shown below PAYMENT TERMS '" Interest on the $7.225,000' North Richland Hills Park and Recreation Facilities Development Corporation, Sales Tax Revenue Refunding Bonds, Series 2001 (the "Bonds") will accrue from June 1,2001 (the "Dated Date"), and will be payable September 1 and March 1 of each year, cornmencing September 1,2001, and will be calculated on the basis of a 36O-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 10 the Book-Entry-Only System described herein, Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No ph~ical delivery of the Bonds will be made to the owners thereof. Principal of, premiwn, if any, and interest on the Bonds will be payable by the Paying AgentlRegistrar to Cede & Co,. which will make distribution of the amounts so paid to the participating members ofDTC for subsequent payment to the beneficial owners of the Bonds, See "The Bonds - Book-Entry-Only System" herein, The initial Paying Agent/Registrar is Bank One, NA, Fort Worth, Texas (see "The Bonds - Paying AgentIRegistrar"), AUTHORITY FOR ISSUANCE, , , The Bonds are being issued by North Richland Hills Park and Recreation Facilities Development Corporation (the "Corporation") pursuant to the Development Corporation Act of 1979, Article 5190,6, Tex, Rev. Civ, Stat.. as amended (the "Act"), including Section 4B of the Act and Vernon's Texas Codes Annotated ("V,T.C.A."), Texas Government Code, Chapter 1207, as amended, The Bonds and their terms are govemed by the provisions of a resolution (the "Resolution") adopted by the Board of Directors of the Corporation (see "The Bonds - Authority for Issuance"), The Bonds are special obligations of the Corporation, payable from and. together with certain outstanding Previously Issued Bonds, secured by a lien on and pledge of certain Pledged Revenues which include the proceeds of a Y, of I % sales and use tax levied within the City of North Richland Hills, Texas (the "City") for the benefit of the Corporation (see "Selected Provisions of the Bond Resolution"), ~. J:1DanciaI Guaranty In.unmce f.ompany PQt...--___.,_~'---~....-__......__l·...C___ 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 Financial Guaranty Insurance Company simultaneously with the delivery of the Bonds, MATURITY SCHEDULE" Amount Maturitv 2001 2002 2003 2004 2005 2006 2007 ~ Amount ....BiúL $ 45,000 50,000 50,000 55,000 475,000 715,000 750,000 $ 885,000 920,000 955,000 995,000 1,030,000 300,000 (Accrued Interest from June I, 21M)) to be added) Maturitv Rate ~ 2008 2009 2010 2011 2012 2013 OPTIONAL REDEMPTION, ' . The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 20 I I, in whole or in part in principal amounts of $5,000 or any integral multiple Ihereof, on March 1.2011. or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Optional Redemption"), LEGALITY, , , The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinion of the Attomey General of Texas and the opinion of Fulbright & Jaworski L.L.P" Dallas, Texas (see Appendix C, "Fonn of Bond Counsel's Opinion"). Certain legal matters will be passed upon for the Underwriters by McCall, Parkhurst, and Horton LLP, Dallas, Texas, Counsel for the Underwriters, SOUTHWEST SECURITIES DELIVERY, . . It is expected that the Bonds will be available for delivery through The Depository Trust Company on July 11.2001. DAIN RAUSCHER INCORPORATED · Preliminary, subject to change, ,. For purposes of compliance wÍlh Rule 15c2-12 of the Securities Exchange Commission, this document constÍlutes an Offlcial Statement of the Corporation wÍlh respect to the Bonds that has been deemed "final" by the Corporation as of Íls date except for the omission of no more than the information permÍlted by Rule 15c2-12. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. This Preliminary Offlcial Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer. solicitation or sale. No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other than those contained in this Preliminary Offlcial Statement. and, if given or made, such other information or representations must not be relied upon. Certain infonnation set forth herein has been provided by sources other than the Corporation that the Corporation believes is reliable, but the Corporation makes no representation as to the accuracy of such information. Any information and expressions of opinion herein contained are subject to change wÍlhout notice, and neither the delivery of the Offlcial Statement nor any sale made hereunder shall. under any circumstances, create any implication that there has been no change in the affairs of the Corporation or other matters described herein since the date hereof See "Other Information - Continuing Disclosure of Information" for a description of the Corporation's undertaking to provide certain information on a continuing basis. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH APPLICABLE SECURITIES LA W PROVISIONS OF THE JURISDICTION IN WHICH THESE SECURITIES HA VE BEEN REGISTERED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDA TION THEREOF. NEITHER THE CORPORATION 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. TABLE OF CONTENTS PRELIMINARY OFFICIAL STATEMENT SUMMARY ............................................................. 3 CORPORATION OFFICIALS, STAFF AND CONSULTANTS .................................................... 5 THE CORPORATIONS' BOARD OF DIRECTORS ................ 5 THE CORPORATIONS' OFFICERS ..................................... 5 CONSULTANTS AND ADVISORS...................................... 5 INTRODUCTION ..,.. .... '..... ,................... ......................... 7 PLAN OF FINANCING .................................................. 7 THE BONDS .................................................................... 8 BOND INSURANCE...................................................... 15 DEBT INFORMATION ................................................16 TABLE 1 - DEBT SERVICE REQUIREMENTS .................. 16 THE SALES TAX .......................................................... 17 TABLE 2 - HISTORICAL RECEIPTS OF 1/2% SALES TAX LEVIED FOR THE CORPORATION ........................ 19 TABLE 3 - CALCULATION OF COVERAGE FOR THE ISSUANCE OF ADDITIONAL BONDS .................... 20 TABLE 4 - SALES TAX BREAKDOWN ............................ 21 SELECTED PROVISIONS OF THE BOND RESOLUTION ...................................................... 21 INVESTMENTS............................................................. 27 TABLE 5 - CURRENT INVESTMENTS .............................28 TAX MA ITERS............................................................. 29 CONTINUING DISCLOSURE OF INFORMATION 30 OTHER INFORMATION .............................................31 RATINGS....." '........., ,.............................. ...................... 31 LITIGATION. ,........,.................. ...... ...........................",. 31 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE.........."........ ................................... ,.....,..... 32 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS.....................,.............. 32 LEGAL OPINIONS.............................,............................ 32 FINANCIAL ADVISOR ...................,...,.,...." ,................... 32 VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS ......,.....,............,....................... 33 UNDERWRITING.. ........,..., '.... '., ,............ ....................... 33 MISCELLANEOUS .......', ,........, ............. ............,."",.""" 33 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 OPINION ....................... 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 Preliminary Official Statement. 2 PRELIMINARY OFFICIAL STATEMENT SUMMARY e This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Preliminary Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Prelinùnary Official Statement. No person is authorized to detach this summary from this Preliminary Official Statement or to otherwise use it without the entire Preliminary Official Statement. THE CORPORATION..................... The Corporation is a non-profit industrial development corporation of the State, located in Tarrant County, Texas (see "Introduction - Description of Corporation"). THE BONDS ................................. The Bonds are issued as $7,225,000* Sales Tax Revenue Refunding Bonds, Series 2001. The Bonds are issued as serial bonds maturing September 1 in the years 2001 through 2013 (see "The Bonds -Description of the Bonds"). PAYMENT OF INTEREST .............. Interest on the Bonds accrues from June I, 2001, and is payable September 1, 2001, and each March 1 and September 1 thereafter until maturity or prior redemption (see "The Bonds - Description of the Bonds" and "The Bonds - Optional Redemption"). AUTHORITY FOR ISSUANCE ......... The Bonds are being issued by the Corporation pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Stat., as amended, including Section 4B of the Act and Texas Government Code, Chapter 1207, as amended. The Bonds and their terms are governed by the provisions of the Resolution adopted by the Corporation. SECURITY FOR THE BONDS.......... The Bonds are special obligations of the Corporation, and, together with certain outstanding Previously Issued Bonds, are payable solely from and equally and ratably secured only by a lien on and pledge of the Pledged Revenues which include the gross proceeds of a 1/2 of 1 % sales and use tax levied within the City of North Richland Hills, Texas for the benefit of the Corporation (see "The Bonds - Security and Source of Payment"). OPTIONAL REDEMPTION ............. The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September 1, 2011, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on March I, 2011, or any date thereafter, at the par value thereof plus accrued interest to the date ofredemption (see "The Bonds - Optional Redemption"). e TAX EXEMPTION ......................... In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under the caption "Tax Matters" herein, including the alternative minimum tax on corporations. USE OF PROCEEDS....................... Proceeds from the sale of the Bonds will be used to advance refund a portion of the Corporation's outstanding debt, consisting of $4,165,000* Sales Tax Revenue Bonds, Series 1992, $2,190,000* Sales Tax Revenue Bonds, Series 1994, and $525,000* Sales Tax Revenue Bonds, Series 1995 (the "Refunded Bonds"), in to lower interest costs of such obligations. See "Schedule I - Schedule of Refunded Bonds" for a more detailed description of the Refunded Bonds. Proceeds from the sale of the Bonds will also be used to pay the costs associated with the sale of the Bonds. RATINGS ..................................... The Bonds 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 Financial Guaranty Insurance Company The uninsured sales tax revenue debt of the City is rated "AI" by Moody's and "A+" by S&P. The Corporation also has issues outstanding which are rated "Aaa" by Moody's and "AAA" by S&P through insurance by various commercial insurance companies (see "Other Information - Ratings"). *Preliminary, subject to change. e 3 BOOK-ENTRY-ONL Y SySTEM...................................... The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium. if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds (see "The Bonds - Book-Entry-Only System"). PAYMENT REcORD...................... The Corporation has never defaulted in payment of its sales tax revenue debt. For additional information regarding the Corporation, please contact: Larry 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 4 .. CORPORATION OFFICIALS, STAFF AND CONSULTANTS _ THE CORPORATIONS' BOARD OF DIRECTORS Directors Don Phifer Lyle Welch Charles Scoma Joe Tolbert Dave Davis Mack Garvin Scott Turnage. Jr. THE CORPORATIONS' OFFICERS Officer Larry 1. Cunningham Randy Shiflet Patricia Hutson e Alicia Richardson Larry Koonce CONSULTANTS AND ADVISORS Length of Tenn Service Exnires 3 May-02 2 May-Ol 3 May-02 May-Ol 3 May-02 2 May-Ol 3 May-02 Office Year Aooointed President 1998 Vice President 1998 Secretary 1996 Assitant Secretary 1998 Treasurer 1996 Auditors .......... ..... ....... ...................... ..................... ........ ......... ............................................................... .... Deloitte and Touche, LLP Dallas, Texas Bond Counsel. ..... ...... ...... ..... ........... ....... ........ .... ......... ..................................... ............ ....... ............. ...... Fulbright & Jaworski L.L.P. Dallas. Texas Financial Advisor .......................................................... .................... ...................,............................... ...... First Southwest Company Fort Worth. Texas e 5 THIS PAGE LEFT BLANK INTENTIONALLY 6 e PRELIMINARY OFFICIAL STATEMENT RELATING TO $7,225,000* NORTH RICHLAND HILLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2001 INTRODUCTION This Preliminary Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of $7,225,000* North Richland Hills Park and Recreation Facilities Development Corporation, Sales Tax Revenue Refunding Bonds, Series 2001. Capitalized terms used in this Preliminary Official Statement have the same meanings assigned to such terms in the Resolution to be adopted on the date of sale of the Bonds, except as otherwise indicated herein. There follow in this Preliminary Official Statement, descriptions of the Bonds and certain information regarding the Corporation and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the Corporation's Financial Advisor, First Southwest Company, Dallas, Texas. DESCRIPTION OF THE CORPORATION. . . The Corporation is a non-profit corporation duly organized and operating under the laws of the State of Texas, particularly Section 4B of the Act. The Corporation was created following an election held by the City of North Richland Hills (the "City"), on the question of the levy of a 1/2 of 1 % local sales and use tax in the City for the benefit of the Corporation. The Corporation as currently organized is to promote and provide for the economic development within the City and the State of Texas to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the City by developing, implementing, providing, and financing projects under the Act and as defined in Section 4B of the Act. The City Council appoints the members of the Board of Directors of the Corporation and under the provisions of the Act is required to approve certain actions of the Corporation, including the issuance of the Bonds by the Corporation. e DESCRIPTION OF THE 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 form of government with a City Council comprised of the Mayor and seven Councilmembers. The term of office for the Mayor and the Council members is two years with the terms of the Mayor and three of the Councilmembers' terms 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 1990 Census population for the City was 45.895, with a 2000 Census population of 55,635. The City covers approximately 18.29 square miles. PLAN OF FINANCING PURPOSE. . . Proceeds from the sale of the Bonds will be used to advance refund a portion of the Corporation' s outstanding debt, consisting of $4,165,000* Sales Tax Revenue Bonds, Series 1992, $2,190,000* Sales Tax Revenue Bonds, Series 1994, and $525,000* Sales Tax Revenue Bonds, Series 1995 (the "Refunded Bonds"), to lower the interest costs on such obligations. See ·Schedule I - Schedule of Refunded Bonds" for a more detailed description of the Refunded Bonds. Proceeds from the sale of the Bonds will also be used to pay the costs associated with the sale of the Bonds. See Schedule I for a detailed listing of the Refunded Bonds and their respective call dates at par. 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, from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement") between the Corporation and Bank One. NA. Fort Worth, Texas (the "Escrow Agent"). The Resolution provides that from the proceeds of the sale of the Bonds received from the Underwriters, the Corporation will deposit with the Escrow Agent the amount necessary 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. _ * Preliminary. subject to change. 7 Grant Thornton, LLP, a nationally recognized accounting fIrm, 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 Information - VerifIcation of Arithmetical and Mathematical Computations"). By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, the Corporation will have effected the defeasance of all of the Refunded Bonds in accordance with applicable law. It is the opinion of Bond Counsel that as a result of such defeasance and in reliance upon the report of Grant Thornton, LLP, the Refunded Bonds will be outstanding only for the purpose of receiving payments from the Federal Securities and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be deemed as being outstanding obligations of the Corporation payable from and secured by a lien on and pledge of the Pledged Revenues or for any other purpose. The Corporation has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund, from lawfully available funds, of any additional amounts required to pay the principal of and interest on the Refunded Bonds, if for any reason, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund be insufficient to make such payment. SOURCES AND USES OF PROCEEDS . . . The proceeds from the sale of the Bonds, together with a contribution from the Corporation, will be applied approximately as follows: Sources: Par Amount of Bonds Accrued Interest Transfers from Prior Issue Debt Service Funds $ Uses: Deposit to Escrow Fund Deposit to Project Fund Deposit to Interest and Sinking Fund Costs of Issuance (1) Total Uses of Funds $ (1) Includes underwriter's discount and bond insurance premium. THE BONDS DESCRIPTION OF THE BONDS. . . The Bonds are dated June I, 2001, and mature, or are subject to redemption prior to maturity, on September 1 in each of the years and in the amounts shown on the cover page hereof. Interest will be computed on the basis of a 360-day year of twelve 30-day months, and will be payable on March 1 and September 1 of each year, commencing September I, 2001. The defInitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the benefIcial owners of the Bonds. See "Book-Entry-Only System" herein. AUTHORITY FOR ISSUANCE. . . The Bonds are being issued by the Corporation pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Stat. as amended ("the Act"), including Section 4B of the Act and V.T.CA, Texas Government Code, Chapter 1207, as amended. The Bonds and their tenns are governed by the provisions of a resolution (the "Resolution") adopted by the Corporation. SECURITY AND SOURCE OF PAYMENT . . . The Bonds are special obligations of the Corporation, and, together with certain outstanding bonds of the Corporation (the "Previously Issued Bonds"), are payable solely from and secured only by a lien on and pledge of the Pledged Revenues, which include the Gross Sales Tax revenues (as defIned in the Resolution) received from the Sales Tax levied within the City that was approved and authorized at an election held within the City on August 8, 1992 for the benefIt of the Corporation. After the refunding of the Refunded Bonds, there will be $3,460,000 of outstanding Previously Issued Bonds. The Bonds do not constitute a debt of the City, the State or any agency, political corporation or subdivision thereof. Neither the full faith and credit of the State, Tarrant County, the City or any agency, political corporation or subdivision thereof, has been pledged for the payment of the Bonds, except as described herein. 8 e Section 4B of the Act contains no provisions which would allow the voters of the Corporation to either reduce or repeal the Sales Tax. Should the Legislature ever enact such an amendment to Section 4B to allow for the reduction or repeal of the Sales Tax, the Texas Attorney General in Opinion No. DM-137 has opined that an amendment to such section of the Act which pernúts a "reduction in the sales tax rate, or a linùtation on the amount of time the tax may be collected, may not be applied to any bonds issued pòor to the date of the rollback election". In so ruling, the Attorney General noted any "subsequent legislation which purports to pernút the reduction or other linùtation of that tax is ineffective to do so, because such alteration would impair the obligation of the contract between the city and such bondholders", and in effect be a violation of Article 1. Section 10 of the United States Constitution and Article I, Section 16 of the Texas Constitution. Under current law, the pòncipal amount of bonds and other obligations payable in whole or in part from the Sales Tax, together with the amount of the costs of the projects, other than interest on the bonds and other obligations, for which payment is made in cash directly from the proceeds of the Sales Tax may not in the aggregate exceed $135,000,000. Additionally. the Sales Tax may not be collected after the last day of the first calendar quarter occurring after notification to the State Comptroller of Public Accounts by the Corporation that all bonds or other obligations of the Corporation that are payable in whole or in part from the proceeds of the Sales Tax, including any refunding bonds or other obligations, have been paid in full or the full amount of money necessary to defease such bonds and other obligations has been set aside in a trust account dedicated to their payment. PLEDGE UNDER RESOLUTION. . . The Corporation covenants and agrees that the Pledged Revenues, with the exception of those in excess of the amounts required for the payment and secuòty of the paòty Obligations, are pledged equally and ratably to the payment and secuòty of the Previously Issued Bonds, the Bonds and Additional Obligations (as defined below). if issued, including the establishment and maintenance of the special funds created and established in the Resolution and any Supplemental Resolution. The Resolution further provides that the Paòty Bonds (which consist of the Previously Issued Bonds, the Bonds and any Additional Obligations issued in the future) shall constitute a first lien on the Pledged Revenues in accordance with the terms of the 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. e POSSIBLE AVOIDANCE OF PLEDGED PAYMENT SOURCE IN BANKRUPTCY. . . Texas has adopted the 1998 revisions to Article 9 of the Uniform Commercial Code (the "UCC"), to become effective July 1. 2001. The revisions would for the first time provide means to perfect pledges by issuers of public secuòties, and, in addition, would make unperfected pledges subject to the interests of a bankruptcy trustee, whether or not the pledged collateral is exempt from judicial liens. Secuòty interests arising before July 1. 2001 that are not perfected by July 1, 2002 will be considered unperfected pledges. For a number of reasons, it will be impractical and perhaps impossible to perfect the Corporation's pledge of the Pledged Revenues under the revised Article 9. Accordingly, after July I, 2002, it is possible that the Corporation could avoid its pledge of Pledged Revenues made in the Resolution to secure payments of the Parity Bonds, unless the Texas UCC is further amended, or other statutes are enacted, to avoid this result. Since the pledge may be legally unenforceable in the circumstances in which it would be most valuable, no person should rely upon the pledge as providing asset security or a preference right in the event that the Corporation should become insolvent. Even under the 1998 UCC revisions, the òghts of holders with respect to the pledged payment sources under the Resolution, and other covenants of the Corporation made in the Resolution are valid and enforceable except in the event of bankruptcy. Thus, for example, outside of the occurrence of bankruptcy, bondholders may enforce the obligation of the Corporation to apply the Pledged Revenues to pay holders of the Bonds, as descòbed above (see "The Bonds B Secuòty and Source of Payment"). Moreover, the Corporation is aware that proposed legislation has been introduced for consideration by the Texas Legislature in the legislative session that begin January 9, 2001 to amend Texas law to avoid the results of the adoption of the 1998 UCC revisions mentioned above. No assurance can be given, however, that any such legislation will be adopted by the Texas Legislature. ADDITIONAL BONDS. . . In the Resolution, the Corporation reserves the òght to issue additional bonds, notes or other obligations (" Additional Obligations") payable from and equally and ratably secured by a paòty lien on and pledge of the Pledged Revenues subject to satisfying certain terms and conditions including obtaining a certificate or opinion from a certified public accountant to the effect that, according to the books and records of the Corporation, the Gross Sales Tax Revenues received by the Corporation for the last completed Fiscal Year or for any twelve consecutive months out of the eighteen months next preceding the adoption of the resolution authoòzing the issuance of the Additional Obligations were equal to not less the 1.5 times the Average Annual Debt Service for all Paòty Bonds then outstanding after giving effect to the issuance of the Additional Obligations then being issued. See "Selected Provisions of the Bond Resolution - Issuance of Additional paòty Obligations." THE PLEDGED REVENUE FUND. . . Under the terms of the Act and the Resolution, the Gross Sales Tax Revenues collected by the State Comptroller of Public Accounts are renùtted peòodically to the City for the benefit of the Corporation and upon receipt by the City the same are to be deposited to the credit of a fund or account ofthe Corporation known as the "Pledged Revenue Fund". e As explained below under "Flow of Funds", the Gross Sales Tax Revenues held in the Pledged Revenue Fund are first to be used to make payments to the Bond Fund in amounts equal to one hundred percent (100%) of the interest on and pòncipal of the Previously Issued Bonds and the Bonds then falling due and payable. 9 GENERAL COVENANT REGARDING THE SALES TAX. . . The Municipal Sales and Use Tax Act provides that the Sales Tax does not apply to the sale of a taxable item unless the item is also taxable under the Texas Limited Sales, Excise and Use Tax Act. The Sales Tax is therefore subject to a broadening and reduction in the base against which it is levied by action of the State Legislature without the consent of the City or the Corporation. In the Resolution, the Corporation covenants and agrees that, while any Bonds are outstanding, it will take all legal means and actions permissible to cause the Sales Tax, at its current rate (112 of 1 %) or at a higher rate if legally permitted, to be levied and collected continuously throughout the boundaries of the City, as such boundaries may be changed from time to time, in the manner and to the maximum extent legally permitted; and to cause no reduction, abatement or exemption in the Sales Tax until all the Bonds have been paid in full or until they are lawfully defeased in accordance with the Resolution. The Corporation also covenants and agrees that, if, subsequent to the issuance of the Bonds, the City is authorized by applicable law to impose and levy the Sales Tax on any items or transactions that are not subject to the Sales Tax on the date the Resolution was adopted, then the Corporation will use its best efforts to cause the City to take such action as may be required by applicable law to cause the use or sale of such items or transactions to be subject to Sales Tax. OPTIONAL REDEMPTION. . . The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September 1, 2011, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on March I, 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 are to be redeemed, the Corporation may select the maturities of Bonds to be redeemed. If less than all the Bonds of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Bonds are in Book-Entry-Only form) shall determine by lot the Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereoO shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. NOTICE OF REDEMPTION. . . Not less than 30 days prior to a redemption date for the Bonds, the Corporation shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, IRRESPECTIVE OF WHETHER ONE OR MORE REGISTERED OWNERS FAILED TO RECEIVE SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE. FLOW OF FUNDS ... The Resolution affirms the establishment and maintenance of the following funds and accounts for the application of the proceeds of the Bonds and for the Pledged Revenues with all revenues flowing first to the Gross Sales Tax Revenue Fund: PRIORI1Y First Priority PLEDGED REVENUE FUND FUND(l) Debt Service Fund for the payment of the Parity Bonds Second Priority Reserve Fund to provide and maintain the Required Reserve Third Priority Any other fund required by any resolution authorizing issuance of Additional Obligations Fourth Priority Any other fund created for the payment of obligations having a lien subordinate to the lien on the Parity Bonds. Fifth Priority Capital Improvement Fund for paying costs of authorized projects due for paying other lawful Corporation purposes. (1) All funds are held by the Corporation's Depository Bank. See "Selected Provisions of the Resolution" herein for additional information relating to the flow of funds. 10 e DEBT SERVICE REsERVE REQUIREMENT . . . The Corporation agrees and covenants to maintain a special fund or account known as the "ReseIVe Account" (the "ReseIVe Fund"), which 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 purpose are insufficient. and. in addition, may be used to the extent not required to maintain the "Required ReseIVe". 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 in the Resolution herein. In accordance with the provisions of the resolutions authorizing the issuance of the Previously Issued Bonds. there is currently on deposit to the credit of the ReseIVe Fund the sum of $1.190.000 (the "Current ReseIVe"), and by reason of the issuance of the Bonds. the total amount required to be accumulated and maintained in the ReseIVe Fund is hereby predetermined to be $1.163.896 (the "Required ReseIVe"), which amount is less than the Current ReseIVe. Upon the issuance of the Bonds. the Current ReseIVe shall be reduced to the Required ReseIVe. As and when Additional Bonds are delivered or incurred, the Required ReseIVe shall be increased. as required, to an amount equal to the Average Annual Debt SeIVice (calculated on a Fiscal Year basis) for all Parity Bonds then Outstanding (after giving effect to the issuance of the Additional Bonds). Any additional amount required to be maintained in the ReseIVe Fund shall be so accumulated by the deposit in the ReseIVe Fund of all or any part thereof in cash immediately after the delivery of the then proposed Additional Bonds. During such time as the ReseIVe Fund contains the total Required ReseIVe. the Corporation may, at its option. withdraw all surplus in the ReseIVe Fund in excess of the Required ReseIVe and deposit such surplus in the Pledged Revenue Fund. BOOK-ENTRy-ONLY SYSTEM. . . This section describes how ownership of the Bonds are to be transferred and how the principal of, premium. if any, and interest on the Bonds are to be paid to and credited by The Depository Trust Company ("DTC'7, New York. New York, while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Preliminary Offlcial Statement. The Corporation believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof, e The Corporation cannot and does not give any assurance that (J) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Preliminary Offlcial Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTG. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered certificate will be issued for each maturity of the Bonds in the aggregate principal amount of each such maturity and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law. a member of the Federal ReseIVe System. a "clearing Corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges. in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers. banks, trust companies, clearing Corporations. and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange. Inc.. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant. either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through DTC Participants. which will receive a credit for such purchases on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct or Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. but Beneficial Owners are expected to receive written confirmations providing details of the transaction. as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system described herein is discontinued. e 11 To facilitate subsequent transfers. all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited. which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants. by Direct Participants to Indirect Participants. and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them. subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures. DTC mails an Omnibus Proxy to the Corporation as soon as possible after the Record Date (hereinafter defined). The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC. the Paying Agent/Registrar or the Corporation. 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 Corporation. disbursement of such payments to Direct Participants shall be the responsibility of DTC. and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Corporation. Under such circumstances, in the event that a successor securities depository is not obtained. Bonds are required to be printed and delivered. The Corporation may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event. Bonds will be printed and delivered. Use of Certain Terms in Other Sections of this Preliminary Official Statement. In reading this Preliminary Official Statement it should be understood that while the Bonds are in the Book-Entry Only System. references in other sections of this Preliminary Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry Only System, and (ii) except as described above, notices that are to be given to registered owners under the Resolution will be given only to DTC. Information concerning DTC and the Book-Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by. and is not to be construed as a representation by. the Corporation or the Underwriters. PAYING AGENTIREGISTRAR. . . The initial Paying Agent/Registrar is Bank One. NA. Fort Worth, Texas. In the Resolution. the Corporation retains the right to replace the Paying Agent/Registrar. The Corporation covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the Corporation agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail. first class. postage prepaid. which notice shall also give the address of the new Paying Agent/Registrar. Interest on the Bonds 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. first class postage prepaid to the address of the registered owner recorded in the registration books of the Paying AgentlRegistrar 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 Bonds 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 Bonds 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. 12 e TRANSFER, EXCHANGE AND REGISTRATION. . . In the event the Book-Entry-Only System should be discontinued, printed Bonds will be delivered to the registered owners of the Bonds and thereafter the Bonds may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Bonds may be assigned by the execution of an assignment form on the respective Bonds or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bonds being transferred or exchanged. at the designated office of the Paying Agent/Registrar, or sent by United States mail. first class. postage prepaid, to the new registered owner or his designee. To the extent possible. new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be canceled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral multiple of $5.000 for anyone maturity and for a like aggregate principal amount as the Bonds surrendered for exchange or transfer. See "Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Bonds. Neither the Corporation nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond. RECORD DATE FOR INTEREST PAYMENT. . . The record date ("Record Date") for the interest payable on the Bonds on any interest payment date means the close of business on the 15th day of the preceding month. In the event of a non-payment of interest on a scheduled payment date. and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar. if and when funds for the payment of such interest have been received from the Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. e DEFEASANCE OF BONDS . . . The Bonds will be deemed paid within the meaning Resolution when (i) money. (ii) Government Securities or (iii) a combination of money and Government Securities shall have been irrevocably deposited in trust with an authorized escrow agent, and the deposit of such money and/or Government Securities, together with investment earnings on such Government Securities, have been certified by an independent accounting firm to be sufficient, without reinvestment, to pay in full the Bonds at their Stated Maturities. In the Resolution the Corporation shall covenant that no deposit of moneys or Government Securities will be made 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. The term "Government Securities" is defined as (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 District 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 acquisition or purchase by the District, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. Upon making such deposit in the manner described, such Bonds shall no longer be deemed outstanding obligations of the Corporation secured by the Resolution, but will be payable only from the funds and Government Securities deposited in escrow. AMENDMENTS. . . The Corporation may amend the Resolution without the consent of or notice to any registered owner in any manner not detrimental to the interests of the registered owners, including the curing of any ambiguity. inconsistency, or formal defector omission therein. In addition. the Corporation may with the written consent of the holder of a majority of aggregate principal amount of the Bonds then outstanding affected thereby, amend. add to. or rescind any of the provisions of the Resolution; except that, without the consent of the registered owners of the Bonds affected. no such amendment, addition or rescission may (i) 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. 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 required to be held by Holders for consent to any such amendment, addition. or rescission. e 13 BONDHOLDERS' REMEDIES. .. The Resolution does not establish specific events of default with respect to the Bonds. Although a registered owner of Bonds could obtain a judgment against the Corporation if a default occurred in the payment of principal of or interest on any such Bonds, the only property of the Corporation available to pay such judgement is the pledged revenues. The Resolution does not provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the Corporation to perfonn in accordance with the terms of the Resolution, or upon any other condition. Furthennore, the Corporation is eligible to seek relief from its creditors under the U.S. Bankruptcy Code and may be subject to involuntary bankruptcy under the U.S. Bankruptcy Code. The Bankruptcy Code includes an automatic stay provision that could prohibit, without Bankruptcy Court approval. the prosecution of any other legal action by creditors or bondholders of an entity that has become subject to the provisions of the Bankruptcy Code. See "Possible Avoidance of Pledged Payment Source in Bankruptcy" herein. Therefore, should the Corporation become subject to an action governed by the provisions of the Bankruptcy Code, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Resolution and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. ([he remainder of this page left blank intentionally.) 14 BOND INSURANCE _ Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial Guaranty") will issue its ., Municipal Bond New Issue Insurance Policy for the Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and interest is due or on the business day next following the day on which Financial Guaranty shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of such amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such owner's rights to payment of such principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any payment of principal or interest made to an owner of a Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final. nonappealable order of a court having competent jurisdiction. The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Bonds. The Policy covers failure to pay principal of the Bonds on their respective stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other date on which the Bonds may have been otherwise called for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated date for its payment. Generally, in connection with its insurance of an issue of municipal securities, Financial Guaranty requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holders may not exercise such rights without Financial Guaranty's consent, in each case so long as Financial Guaranty has not failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to Financial Guaranty's consent. The specific rights, if any, granted to Financial Guaranty in connection with its insurance of the Bonds are set forth in the description of the principal legal documents appearing elsewhere in this Official Statement. Reference should be made as well to such description for a discussion of the circumstances, if any, under which the Issuer is required to e provide additional or substitute credit enhancement, and related matters. This Official Statement contains a section regarding the ratings assigned to the Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Bonds. Reference should be made to the description of the City for a discussion of the ratings, if any, assigned to such entity's outstanding parity debt that is not secured by credit enhancement. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is a mono line financial guaranty insurer domiciled in the State of New York and subject to regulation by the State of New York Insurance Department. As of December 31, 2000, the total capital and surplus of Financial Guaranty was approximately $1.089 billion, Financial Guaranty prepares financial statements on the basis of both statutory accounting principles and generally accepted accounting principles. Copies of such financial statements may be obtained by writing to Financial Guaranty at 115 Broadway, New York, New York 10006, Attention: Communications Department (telephone number: 212-312-3000) or to the New York State Insurance Department at 25 Beaver Street, New York, New York 10004-2319, Attention: Financial Condition PropertylCasualty Bureau (telephone number: 212-480-5187). - 15 DEBT INFORMATION TABLE 1 - DEBT SERVICE REQUIREMENTS Fiscal Year Total %of Ended Outstandinl! Debt (I) The Bonds (2) Outstanding Principal ~ Principal Interest Total Princinal Interest (2) Total Debt Retired 2001 $ 610,000 $ 405,649 $ 1,015,649 $ 45,000 $ 119,587 $ 164,587 $ 1,180,236 2002 640,000 158,893 798,893 50,000 315,003 365,003 1,163,895 2003 670,000 121,845 791,845 50,000 313,278 363,278 1,155,123 2004 700,000 84,493 784.493 55,000 311,428 366,428 1,150,920 2005 315,000 45,255 360,255 475,000 309,310 784,310 1,144,565 33.79% 2006 105,000 27,878 132,878 715,000 290,548 1.005,548 1,138,425 2007 105,000 22,208 127,208 750,000 261,590 1.011,590 1,138,798 2008 16,538 16,538 885,000 230,090 1,115,090 1,131,628 2009 16,538 16,538 920,000 192,035 1,112,035 1,128,573 2010 16,538 16,538 955,000 151.555 1,106,555 1,123,093 75.29% 2011 16,538 16,538 995,000 108,580 1,103,580 1,120,118 2012 16,537 16,537 1.030,000 62,810 1,092,810 1,109,347 2013 105,000 16,538 121,538 300,000 14,400 314,400 435,938 2014 105,000 11,025 116,025 116,025 2015 105 000 5513 110513 110513 100.00% $ 3.460.000 $ 981.981 $ 4.441.981 $ 7.225.000 $ 2.680.212 $ 9.905.212 $ 14.347.194 (1) Excludes the Refunded Bonds. (2) Average life of the issue - 8.311 years. Interest on the Bonds has been calculated at the average rate of 4.46% for purposes of illustration. Preliminary, subject to change. ([he reminder of this page left blank intentionally.) 16 THE SALES TAX _ SOURCE AND AUTHORIZATION. . . The Sales Tax is a 1/2 of 1 % limited sales and use tax imposed on all taxable transactions within _ the City as approved at the Election. The Sales Tax is authorized to be levied and collected against the receipts from the sale at retail of taxable items within the City. The Sales Tax also is an excise tax on the use, storage or other consumption of taxable tangible personal property purchased, leased or rented from a retailer within the City. The City currently levies another sales and use taxes for City and Crime District (as described below) purposes which aggregate 1 1/2% in accordance with State law, which, together with the Sales Tax, is the maximum local sales and use taxes that may be levied under current State law. The imposition, computation, administration, governance, abolition and use of the Sales Tax is governed by the Texas Limited Sales, Excise, and Use Tax Act except to the extent that there is conflict with the Act, in which case the provisions of the Act control as to the Bonds, and by the Municipal Sales and Use Tax Act, and reference is made thereto for a more complete description of the Sales Tax. In general, as applied to the Sales Tax, a taxable item includes any tangible personal property and certain taxable services. "Taxable services" include certain amusement services, cable television services, motor vehicle parking and storage services, the repair, maintenance and restoration of most tangible personal property, certain telecommunication services, credit reporting services, debt collection services, insurance services, information services, real property services, data processing services, real property repair and remodeling and security services. Certain items are exempted by State law from sales and use taxes, including items purchased for resale, food products (except food products which are sold for immediate consumption, e.g. by restaurants, lunch counters, etc.), health care supplies (including medicines, corrective lens and various therapeutic appliances and devices), agricultural items (if the item is to be used exclusively on a fann or ranch or in the production of agricultural products), gas and electricity purchased for residential use (unless a city has taken steps to repeal the exemption), certain telecommunications services, newspapers and magazines. In addition, items which are taxed under other State laws are generally exempted from sales taxes. These items include certain natural resources, cement, motor vehicles and insurance premiums. Alcohol and tobacco products are taxed under both State alcohol and tobacco taxes as well as through the sales taxes. In addition, purchases made by various exempt organizations are not subject to the sales and use taxes. Such organizations include the federal and state governments, political subdivisions, Indian tribes, religious institutions and certain charitable organizations and non-profit corporations. Also, State law provides an exemption from sales taxes on items purchased under a contract in effect when the legislation authorizing such tax (or the increase in the rate thereof) is enacted, up to a maximum of three years. In general, a sale of a taxable item is deemed to occur within the municipality, county or special district in which the sale is consummated. The tax levied on the use, storage or consumption of tangible personal property is considered to be consummated at the location where the item is first stored, used or consumed. Thus, the use is considered to be consummated in a municipality, and e the tax is levied there if the item is shipped from outside the state to a point within the municipality. In addition to the local sales and use taxes levied, as described above, the State levies and collects a 6-1/4% sales and use tax against essentially the same taxable items and transactions as the Sales Tax is levied. Under current State law, the maximum aggregate sales and use tax which may be levied within a given area by an authorized political subdivision within such area, including the State, is 8 1/4 %. The current aggregate sales and use tax levied in the City is 8.25% of which 6.25% is levied by the State, 1% is levied by the City, 1/2 of 1 % is levied as the Sales Tax, and 1/2 of 1 % is levied by the North Richland Hills Crime Control and Prevention District (the "Crime District"). In accordance with State law, the Crime District sales tax will sunset after five years, unless it is renewed by a subsequent referendum. The City has called a referendum on May 5, 2001 to renew the Crime District sales tax for a ten year period. The Comptroller administers and enforces all sales tax laws and collects all sales and use taxes levied by the State, and levying counties, municipalities and other special districts having sales tax powers. Certain limited items are taxed for the benefit of the State under nonsales tax statutes, such as certain natural resources and other items described above, and are not subject to the sales tax base available to municipalities and counties, including the tax base against which the Sales Tax is levied. Municipalities may by local option determine to tax certain telecommunication services on the same basis as the State taxes such services (some aspects of telecommunication services, such as interstate telephone calls and broadcasts regulated by the FCC are not subject to either State or local taxation). The City has opted to repeal the local telecommunication services exemption. With respect to the taxation of the residential use of gas and electricity, the State is not authorized to collect a sales tax, while municipalities, on a local option basis, may tax such use. The City has opted to tax the residential use of gas and electricity. In recent years, several changes have occurred with respect to the State sales tax laws which have increased local sales tax revenues or reduced such revenues. Some changes have added additional goods and services to the list of taxable items. Other items that have been subject to the sales tax have been phase-out of the tax, including tangible personal property used in manufacturing, processing or fabrication operations with a useful life of at least six months that became totally exempt from the sales tax in 1995. Subject to the right of the governing body of the City to repeal the sales tax holiday, during a three day period in August of each year beginning with the first Friday, articles of clothing or footwear with a cost less than $100 are exempt from the sales tax. Effective October I, 1999, the first $25 ofa monthly charge for Internet access is exempt from sales tax, as is 20% of the value of information services and data processing services. Beginning April I, 2000, no sales tax will be due on over-the-counter drugs e and medicines labeled with a national FDA drug code. With certain exceptions, sales and use taxes in the State are collected at the point of sale and are remitted to the Comptroller by the "taxpayer" who is, generally speaking, the business that collects the tax resulting from a taxable transaction. Taxpayers owing $500 17 or more sales and use tax dollars in a calendar month submit their tax collections to the Comptroller on a monthly basis; taxpayers owing less than $500 sales and use tax dollars in a calendar month but $1,500 or more in a calendar quarter submit their tax collections quarterly; and taxpayers owing less than $1,500 in a calendar quarter submit their tax collections annually. Taxpayers are required to report and remit to the Comptroller by the 20th day of the month following the end of the reporting period. The reporting period for yearly filers ends each December 31; for quarterly filers. the reporting period ends at the end of each calendar quarter; and monthly filers report and remit by the 20th of each month for the previous month. The Comptroller is required by law to distribute funds to the receiving political subdivisions periodically and as promptly as feasible but not less frequently than twice during each fiscal year of the State. Historically, and at the present time, the Comptroller distributes the funds monthly with the largest payments being made quarterly in February, May, August and November. In 1989, the Comptroller initiated a direct deposit program using electronic funds transfers to expedite the distribution of monthly allocation checks. If a political subdivision desires to participate in the electronic funds transfers, it may make application to the Comptroller. The City participates in this program. Otherwise, the Comptroller mails the monthly allocation check, which is typically received by the middle of the month following the month in which the taxpayer reports and remits payment on the tax. The Comptroller is responsible for enforcing the collection of sales and use taxes in the State. Under State law, the Comptroller utilizes sales tax permits, sales tax bonds and audits to encourage timely payment of sales and use taxes. Each entity selling, renting, leasing or otherwise providing taxable goods or services is required to have a sales tax permit. Pennits are required for each individual location of a taxpayer and are valid for only one year, requiring an annual renewal. As a general rule, every person who applies for a sales tax permit for the first time, or who becomes delinquent in paying the sales or use tax, is required to post a bond in an amount sufficient to protect against the failure to pay taxes. The Comptroller's audit procedures include auditing the largest 2% of the sales and use tax taxpayers (who report about 65% of all sales and use tax in the State annually), each every three or four years. Other taxpayers are selected at random or upon some other basis for audits. The Comptroller also engages in taxpayer education programs and mails a report to each taxpayer before the last day of the month, quarter or year that it covers. Once a taxpayer becomes delinquent in the payment of a sales or use tax, the Comptroller may collect the delinquent tax by using one or more of the following methods; (i) collection by an automated collection center or local field office, (ii) estimating the taxpayers' liability based on the highest amount due in the previous 12 months and billing them for it, (iii) filing liens and requiring a new or increased payment bond, (iv) utilizing forced collection procedures such as seizing assets of the taxpayer (e.g., a checking account) or freezing assets of the taxpayer that are in the custody of third parties, (v) removing a taxpayer's sales and use tax permit, and (vi) certifying the account to the Attorney General's Office to file suit for collection. A municipality may not sue for delinquent taxes unless it joins the Attorney General as a plaintiff or unless it first receives the permission of the Attorney General and the Comptroller. The Comptroller retains 2% of the tax receipts for collection of the tax; additionally, under State law, a taxpayer may deduct and withhold 112% of the amount of taxes due on a timely return as reimbursement for the cost of collecting the sales and use taxes. In addition, a taxpayer who prepays its tax liability on the basis of a reasonable estimate of the tax liability for a month or quarter in which a prepayment is made, may deduct and withhold 1 114% of the amount of the prepayment in addition of the 112% allowed for the cost of collecting the sales and use tax. INVESTOR CONSIDERATIONS. . . The primary source of security for the Bonds will be certain receipts of the Sales Tax received by the City for the benefit of the Corporation. The amount of revenues from the Sales Tax is closely related to the amount of economic activity in the City. Sales and use tax receipts, unlike other taxes levied by municipalities, immediately reflect changes in the economic conditions of a municipality. Increases in Internet sales may result in a decrease in Sales Tax revenues to the Corporation. The emergence of Internet sales and services and issues related to taxation of such sales and services have been the subject of review and study at the state and national level. In October, 1998, the United States Congress enacted the Internet Tax Freedom Act which provided a three year moratorium on certain aspects of taxation of the Internet (existing taxes imposed by Texas were exempted from the moratorium). Legislative changes relating to the taxation of Internet sales and services, and any effect of such changes on the Sales Tax received by the Corporation, cannot be predicted at this time. Historically, the Comptroller has remitted sales and use tax allocation checks to municipalities on a monthly basis, but State law currently requires that such allocation be made at least twice annually and such procedures could change in the future. Additionally, the taxable items and services subject to State and local sales and use taxes are subject to legislative action, and have been changed in recent years by the State Legislature. State law provides that the Sales Tax can not be levied against any taxable item or service unless such item or service is also subject to the State sales and use tax. In recent years the State Legislature has enacted laws permitting the State, together with its political subdivisions, to levy sales and use taxes of up to 8 114%, which is among the highest sales tax rates in the nation (although the State has no personal or corporate income tax), and the current total sales and use tax rate within the City's boundaries is 8 114% (including State and City taxes as well as the Sales Tax). The rate of the sales and use taxes authorized in the State could be further increased by the State Legislature and the Corporation has no way of predicting any such increase or the effect that would have on the Sales Tax which secures the Bonds. State leaders have appointed committees to study methods of achieving greater tax equity within the State's tax system. Any changes which may be enacted by the State Legislature could effect the tax base against which the Sales Tax is levied; and the City (and hence the Corporation as the beneficiary of the City's action), except in certain limited instances described above, has no control over the components of the tax base. Neither the City nor the Corporation currently has statutory authority to increase or decrease the maximum authorized rate of the Sales Tax. 18 e Tax receipts received by the Corporation are expected to be subject to seasonal variations and to variations caused by the State laws and administrative practices governing the remittance of sales and use tax receipts which authorize different taxpayers to remit the tax receipts at different times throughout the year. The Sales Tax is collected by the Comptroller and remitted to the City along with other City sales and use tax receipts. The City allocates a portion of the receipts to the Corporation, which represents the 1/2% of 2% tax rate of the Sales Tax. Generally, sales and use taxes in the State are collected at the point of a taxable transaction and remitted by the taxpayer to the Comptroller. The Comptroller has the primary responsibility for enforcing sales and use tax laws and collecting delinquent taxes (see "The Sales Tax"). The collection efforts of the Comptroller are subject to applicable federal bankruptcy code provisions with respect to the protection of debtors. Changes in the tax base against wmch a sales and use tax is assessed, as well as changes in the rate of such taxes, make projections of future tax revenue collections very difficult. No independent projections have been made with respect to the revenues available to pay debt service on the Bonds. TABLE 2 - HISTORICAL RECEIPTS OF 1/2% SALES TAX LEVIED FOR THE CORPORATION Following is a listing of the Corporation's receipts of the 1h of 1 % limited sales and use tax: Month Year Year Year Year Year of Ending Ending Ending Ending Ending Receiot 9/30/00 9/30/99 9/30/98 9/30/97 9/30/96 October $ 257,095 $ 241,195 $ 237,342 $ 227,666 $ 241,243 November 428,879 416,072 375,767 399,264 356,729 December 309,338 263,655 234,472 206,920 209,252 January 278,849 260,973 239,018 211,244 220,150 February 540,505 539,822 510,511 486,649 457,018 March 302,602 258,047 231,097 227,539 207,917 e April 279,197 248,023 203,928 202,229 229,901 May 434,287 425,810 379,415 367,399 372,413 June 288,059 276,295 256,079 236,757 230,428 July 299,517 269,201 248,831 226,502 228,388 August 456,029 427,539 402,499 377,214 360,936 September 317,836 276,109 258,713 271,276 247.043 Annual Totals $ 4,192,193 $ 3,902,743 $ 3,577,673 $ 3,440,659 $ 3,361,415 ([he remainder of this page left blank intentionally.) e 19 TABLE 3 - CALCULATION OF COVERAGE FOR THE ISSUANCE OF ADDITIONAL BONDS Calendar Year 2000 Month of ReceiDt January Februay March April May June July August September October November December Monthly Collections $ 1.115,395 2.162,019 1,210,406 1.116,789 1,737.149 1.152,235 1.198,070 1,824,116 1,27l,345 1.189,001 1,746,597 1.387 342 $ 17.1 10.462 Collections of the 1/2 Cent Sales Tax for Purposes of Calculating Covera!!e(1) $ 278,849 540,505 302,602 279,197 434,287 288,059 299,517 456,029 317,836 297,250 436,649 346.836 $ 4.277,615 (1) As described under "The Bonds - Additional Bonds," the resolutions pursuant to which the Previously Issued Bonds were issued provides that the coverage calculation may be made on the basis of Sales Tax receipts during any twelve consecutive month period during the 18 months immediately preceding the issuance of the Additional Bonds. Table 2, above, shows Sales Tax collections on a fiscal year basis. Average Annual Principal and Interest Requirements, 2001 - 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 956,480 Coverage of Average Annual Requirements by Actual Annual Sales Tax Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . 4.47x Maximum Principal and Interest Requirements, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 1.180,236 Coverage of Maximum Requirements by Actual Annual Sales Tax Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.62x Interest and Sinking Fund, 3/1/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., $ 336,698 Reserve Fund Balance, 3/1/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 1.190,000 ([he remainder of this page left blank intentionally.) 20 TABLE 4 - SALES TAX BREAKDOWN e The table below provides data with respect to the composition of the sales and use tax base in the City. SALES TAX BREAKDOWN Division Agriculture, Forestry and Fishing Construction Manufacturing Transportation and Public Utilities Wholesale Trade Retail Trade Finance. Insurance and Real Estate Services % of 1999 Sales Tax 0.46% 2.37% 1.53% 1.16% 2.41% 85.03% 0.04% 7.00% % of 2000 Sales Tax 0.47% 2.39% 1.50% 1.18% 2.45% 84.05% 0.05% 7.97% BREAKDOWN- BY RETAIL CLASSIFICATION Retail Class e Building Materials and Garden Supplies General Merchandise Stores Food Stores Automotive Dealers and Service Stations Apparel and Accessory Stores Furniture and Home Furnishing Stores Eating and Drinking Places Miscellaneous Source: Texas Comptroller of Public Accounts SELECTED PROVISIONS OF THE BOND RESOLUTION % of 1999 Retail Trade 12.88% 22.96% 5.01% 4.47% 8.79% 16.96% 14.49% 14.44% % of 2000 Retail Trade 12.69% 23.21% 5.59% 4.64% 8.09% 17.10% 14.43% 14.25% The following are certain provisions of the Resolution. These provisions are not to be considered a full statement of the terms of the Resolution. Accordingly. these selected provisions are qualified in their entirety by reference to the Resolution and are subject to the full text thereof. Capitalized tenns used in these provisions have the respective meaning set forth in the definitions of terms contained elsewhere in the Preliminary Official Statement. 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 "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. 21 "Board" - The Board of Directors of the Corporation. "Bonds" - The "North Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001", dated June 1, 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" - Direct obligations of the United States of America, including obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States of America. "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 IS, 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 I, 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 provisionsmof Section 14 hereof. 22 e "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 I, 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 tenns and provisions of the Bonds or Additional Obligations, or supplementing or amending this Resolution for any other authorized purpose pennitted 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. 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 tenns 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. Pledged 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. e 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 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 pennitted by law. 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. 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. e 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 23 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 bè "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 $1,190,000 (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 predetermined to be $1,163,896 ("Required Reserve), which amount is less than the Current Reserve. As and when Additional Obligations are delivered or incurred, the Required Reserve shall be increased, if required, to an amount equal to the Average Annual Debt Service (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 1I36th 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. 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. 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. 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., Government 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. Ail interest and interest income derived 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. Ail 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. 24 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. (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. 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. 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 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. Confirmation and Levy 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. e 25 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: (I) 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 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. Representations as to Security 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 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. (t) 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. 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 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) Government 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 26 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 e 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. 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. INVESTMENTS The Corporation is a nonprofit corporation acting on behalf of the City and is subject to the provisions of the Public Funds Investment Act (V.T.C.A., Government Code, (Ch. 2256). The funds of the Corporation are invested by the City in investments authorized by Texas law and in accordance with investment policies approved by the Board of Directors of the Corporation. Both state law and the Corporation's investment policies are subject to change. e LEGAL INVESTMENTS. . . Under Texas law, the funds of the Corporation may be invested 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 firm not less than A or its equivalent, (6) certificates of deposit that are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations described in the preceding clauses or in any other manner and amount provided by law for Corporation 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 Corporation deposits, (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-lor P-l or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at least A-lor P-l or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no- load money market mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share. and (12) no-load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than MA or its equivalent (13) bond issued, assumed or guaranteed by the State of Israel and (14) guaranteed investment contracts secured by obligations by obligations of the United States of America or its agencies and instrumentalities, other than the prohibited obligations described below. e The funds may be invested in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than MA or AAAm or an equivalent by at least one nationally recognized rating service. The Corporation is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principäl stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) 27 collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. INVESTMENT POLICIES. . . Under Texas law, the Corporation is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for Corporation funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All Corporation funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, Corporation investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person' s own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the Corporation shall submit an investment report detailing: (1) the investment position of the Corporation, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest Corporation funds without express written authority from the Board of Directors. ADDITIONAL PROVISIONS. . . Under Texas law the Corporation is additionally required to: (1) annually review its adopted policies and strategies; (2) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the Board of Directors; (3) require the registered principal of firms seeking to sell securities to the Corporation to: (a) receive and review the Corporation' s investment policy (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) perform an annual audit of the management controls on investments and adherence to the Corporation's investment policy; (5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in mutual funds in the aggregate to no more than 80% of the Corporation's monthly average fund balance. excluding bond proceeds and reserves and other funds held for debt service and further restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; and (8) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements. TABLE 5 - CURRENT INVESTMENTS As of March 1,2001, the City's investable funds, including the funds of the Corporation, were invested in the following categories: Tyue of Investment Agency Notes US Treasury Notes TexPool Money Market LOGIC Money Market Maturity Date 4/17101-07/26/02 03/31/01-10/31/01 Maturitv Value $ 16,000,000 2,000,000 46,480,643 10 064110 $ 74.544.753 %of Portfolio 21.46% 2,68% 62.35% 1350% 100.00% TexPool is a local government investment pool under the control of the Texas Comptroller of Public Accounts. The Comptroller has engaged The Chase Manhattan Bank, 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 and the Corporation's Financial Advisor, provides customer service and marketing for the pool. TexPool currently maintains a 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. 28 TAX MATTERS e TAX EXEMPTION . . . The delivery of the Bonds is subject to the opinion of Bond Counsel to the effect that interest on the Bonds for federal income tax purposes (1) will be excludable from gross income. as defined in section 61 of the Internal Revenue Code of 1986. as amended to the date of such opinion (the "Code"), pursuant to section 103 of the Code and existing regulations, published rulings, and court decisions. and (2) will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals or, except as hereinafter described. corporations. A form of Bond Counsel's opinion is reproduced as Appendix C. The statute. regulations, rulings. and court decisions on which such opinion is based are subject to change. Interest on all tax-exempt obligations, including the Bonds, owned by a corporation will be included in such corporation's adjusted current earnings for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income of such corporation, other than an S corporation. a qualified mutual fund. a real estate investment trust, a real estate mortgage investment conduit, or a financial asset securitization investment trust (FASIT). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by Section 55 of the Code will be computed. In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the Corporation made in a certificate dated the date of delivery of the Bonds pertaining to the use, expenditure. and investment of the proceeds of the Bonds and will assume continuing compliance by the Corporation with the provisions of the Resolution subsequent to the issuance of the Bonds. The Resolution contains covenants by the Corporation with respect to, among other matters. the use of the proceeds of the Bonds and the facilities financed therewith by persons other than state or local governmental units, the manner in which the proceeds of the Bonds are to be invested, the periodic calculation and payment to the United States Treasury of arbitrage "profits" from the investment of the proceeds. and the reporting of certain information to the United States Treasury. Failure to comply with any of these covenants would cause interest on the Bonds to be includable in the gross income of the owners thereof from date of the issuance of the Bonds. e Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes. regulations, published rulings and court decisions and the representations and covenants of the Issuer described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax- exempt status of the interest on municipal obligations. If an audit of the Obligations is commenced. under current procedures the Service is likely to treat the City as the "taxpayer," and the Holders would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Obligations, the City may have different or conflicting interests from the register owners of the Obligations. Public awareness of any future audit of the Bonds or Certificates, as the case may be, could adversely affect the value and liquidity of the Obligations during the pendency of the audit, regardless of its ultimate outcome. Except as described above, Bond Counsel expresses no other opinion with respect to any other federal, state or local tax consequences under present law. or proposed legislation, resulting from the receipt or accrual of interest on. or the acquisition or disposition of. the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others. financial institutions. life insurance companies. property and casualty insurance companies. certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits. individual recipients of Social Security or Railroad Retirement benefits. individuals otherwise qualifying for the 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 carry, or who have paid or incurred certain expenses allocable to. tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances. TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN BONDS. . . The initial public offering price of certain Bonds (the "Discount Bonds") may be less than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will. upon the disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable from gross income. rather than as taxable gain. for federal income tax purposes, on the same terms and conditions as those for other interest on the Bonds described above under "Tax Exemption." Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest. at the yield to maturity on such Discount Bond and generally will be allocated to an original purchaser in a different amount from the amount of the payment denominated as interest actually received by the original purchaser during the tax year. e 29 However, such interest may be required to be taken into account in determining the alternative minimum taxable income of a corporation, for purposes of calculating a corporation's alternative minimum tax imposed by Section 55 of the Code, and the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, S corporations with "subchapter Coo 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 carry. or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover. in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that. under applicable provisions governing determination of state and local income taxes. accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there wiII not be a corresponding cash payment. The initial public offering price of certain Bonds (the "Premium Bonds") may be greater than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds 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 Bonds. The basis for federal income tax purposes of a Premium Bond 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 wiII 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 Bond. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. CONTINUING DISCLOSURE OF INFORMATION In the Resolution, the Corporation has made the following agreement for the benefit of the holders and beneficial owners of the Bonds. The Corporation is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement. the Corporation will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified material events, to certain information vendors. This information will be available to securities brokers and others who subscribe to receive the information from the vendors. ANNUAL REpORTS ... The Corporation will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the Corporation of the general type included in this Official Statement under Tables numbered 1 through 4 and in Appendix B. The Corporation will update and provide this information within six months after the end of each fiscal year ending in or after 2001. The Corporation wiII provide the updated information to each nationally recognized municipal securities information repository ("NRMSIR") and to any state information depository ("SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC"). The Corporation may provide updated information in full text or may incorporate by reference certain other publicly available documents. as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements, if the Corporation commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the Corporation wiII provide unaudited financial statements by the required time and audited financial statements when and if such audited financial statements become available. Any such financial statements wiII be prepared in accordance with the accounting principles described in Appendix B or such other accounting principles as the Corporation may be required to employ from time to time pursuant to state law or regulation. The Corporation's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each year. unless the Corporation changes its fiscal year. If the Corporation changes its fiscal year. it will notify each NRMSIR and the SID of the change. The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street. P. O. Box 2177, Austin. Texas 78768- 2177, and its telephone number is 512/476-6947. 30 e MATERIAL EVENT NOTICES. . . The Corporation will also provide timely notices of certain events to certain information vendors. The Corporation will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (1l) rating changes. (Neither the Bonds nor the Resolution make any provision for liquidity enhancement. In addition, the Corporation will provide timely notice of any failure by the Corporation to provide information, data, or financial statements in accordance with its agreement described above under "Annual Reports." The Corporation will provide each notice described in this paragraph to the SID and to either each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB"). AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID ... The Corporation has agreed to provide the foregoing information only to NRMSIRs and the SID. The information will be available to holders of Bonds only if the holders comply with the procedures and pay the charges established by such information vendors or obtain the information through securities brokers who do so. LIMITATIONS AND AMENDMENTS. . . The Corporation has agreed to update information and to provide notices of material events only as described above. The Corporation has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations. condition, or prospects or agreed to update any information that is provided. except as described above. The Corporation makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The Corporation disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the Corporation to comply with its agreement. It The Corporation may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Corporation, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the Corporation (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The Corporation may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the SEC Rule 15c2-12 or a court of final jurisdiction enters judgment that such provisions of the SEC Rule l5c2-12 are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the Corporation so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation. in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS. . . The Corporation has not previously made a continuing disclosure agreement in accordance with SEC Rule 15c2-12. OTHER INFORMA nON RATINGS The Bonds are rated "Aaa" by Moody's and "AM" by S&P through an insurance policy to be issued by Financial Guaranty Insurance Company, The uninsured sales tax revenue debt of the Corporation is rated "AI" by Moody's and "A+" by S&P. The Corporation also has issues outstanding which are rated "Aaa" by Moody's and "AM" by S&P through insurance by various commercial insurance companies. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the Corporation makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies. circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. LITIGATION e There is no pending litigation against the Corporation that would have a material adverse financial impact upon the Corporation or its operations. 31 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The Corporation assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 31 of the Act provides that "any bonds issued pursuant to this Act shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, trustees, and for the sinking funds of cities, towns, villages, counties, school districts, or other political corporations or subdivisions of the State of Texas." With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State of Texas, the Public Funds Investment Act. Chapter 2256, Texas Government Code, requires that the Bonds be assigned a rating of "A" or its equivalent as to investment quality by a national rating agency. See "Other Information - Ratings" herein. No review by the Corporation has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. LEGAL OPINIONS The Corporation will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect that the Bonds are valid and legally binding obligations of the Corporation, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. Bond Counsel was not requested to participate, and did not take part. in the preparation of the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information under captions "Plan of Financing", "The Bonds" (exclusive of sub captions "Book-Entry-Only System"), "Selected Provisions of the Bond Resolution", "Tax Matters" and "Continuing Disclosure ofInformation" and the sub captions "Legal Opinions" and "Legal Investments and Eligibility to Secure Public Funds in Texas" in the Official Statement and such firm is of the opinion that the information relating to the Bonds 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, such information conforms to the Resolution. The legal fee to be paid to Bond Counsel for services rendered in connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book-Entry-Only System. Certain legal matters will be passed 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. The legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues expressly 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 performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise from the transaction. FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the Corporation in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. The Financial Advisor to the Corporation 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 Corporation 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. 32 VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS _ The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the . Corporation relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and the restricted Federal Securities were verified by Grant Thornton, LLP, certified public accountants. Such computations were based solely on assumptions and infonnation supplied by First Southwest Company on behalf of the Corporation. Grant Thornton. LLP has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and. accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement. and in any other infonnation provided by the Corporation. that are not purely historical. are forward-looking statements, including statements regarding the Corporation' 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 Corporation on the date hereof, and the Corporation assumes no obligation to update any such forward-looking statements. The Corporation's actual results could differ materially from those discussed in such forward-looking statements. 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, industry. 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 Corporation. 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. UNDERWRITING e The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the Corporation, at an underwriting discount of $ . The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered to the public may be offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds into investment trusts) at prices lower than the public offering prices of such Bonds, and such public offering prices may be changed. from time to time, by the Underwriters. MISCELLANEOUS The financial data and other information contained herein have been obtained from the Corporation's records. audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes. documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes. documents and resolutions. These sununaries 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. The Resolution authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Underwriters. /s/ LARRY 1. CUNNINGHAM President North Richland Hills Park and Recreation Facilities Development Corporation AITEST: /sf PATRICIA HUTSON Secretary North Richland Hills Park and Recreation e Facilities Development Corporation 33 SCHEDULE OF REFUNDED BONDS· Schedule I Sales Tax Revenue Bonds, Series 1992 Original Original Interest Maturity Dated Date Maturity Rate Amount 11/15/92 9/1/05 5.75% $ 420,000 9/1/06 5.75% 445,000 9/1/07 5.75% 475,000 9/1/08 5.75% 500,000 9/1/09 5.75% 530,000 911/10 5.75% 565,000 9/1/11 5.75% 600,000 9/1/12 5.75% 630,000 The 2005 - 2012 maturities will be redeemed prior to original maturity on September 1, 2002 at par. Sales Tax Revenue Bonds, Series 1994 Original Dated Date 7/1/94 Original Maturitv 9/1/06 9/1/07 9/1/08 9/1/09 9/1/10 9/1/11 9/1/12 9/1/13 Interest Rate 5.750% 5.900% 6.000% 6.000% 6.125% 6.125% 6.125% 6.125% Maturity Amount $ 220,000 235,000 250,000 265,000 280,000 295,000 315,000 330,000 The 2006- 2013 maturities will be redeemed prior to original maturity on September 1, 2004 at par. Sales Tax Revenue Bonds, Series 1995 Original Dated Date 4/1/95 Original Maturity 9/1/08 9/1/09 9/1/10 911/11 9/1/12 Interest Rate 5.50% 5.60% 5.70% 5.80% 5.80% Maturity Amount $ 105,000 105,000 105,000 105,000 105,000 The 2008- 2012 maturities will be redeemed prior to original maturity on September 1, 2005 at par. ·Preliminary, subject to change. e APPENDIX A GENERAL INFORMATION REGARDING THE CIlY e e LOCATION AND HISTORY. . . The City of North Richland Hills is located in northeast Tarrant County, encompassing approximately 18.29 square miles with 540 employees. The City is approximately 10 miles northeast of downtown Fort Worth and 25 miles northwest of downtown Dallas. It is a part of the mid-cities area of North Central Texas (the "Metroplex"), which includes the Cities of Dallas and Fort Worth with a total population exceeding 4 million. The City was incorporated in 1953 under the general laws of the State of Texas and the current charter was approved by the voters in 1964 and last amended in August of 1992. The City is a home rule city and operates under the CouncillManager fonn of government. The Council is composed of a mayor and seven councilmembers elected at large. All City residents vote for all seven places. The members are elected for two-year staggered terms and elections are held annually in May. Policy-making and oversight functions are the responsibility of, and are vested in, the City Council. The City Council is required by the charter to appoint a City Manager to serve as the chief administrative and executive officer of the City. The duties of the City Manager include the appointment of City department heads and the daily conduct of City affairs. POPULATION. . . The City has grown steadily since the mid-1950's when it was a small bedroom community. The population of the City has increased approximately 60% since 1982. Population history is as follows: Y~ar Population Source Year PODulation Source 1960 8,662 (1) 1995 50,650 (3) 1970 16,514 (1) 1996 52,584 (3) 1980 30,592 (1) 1997 52,757 (3) 1990 45,895 (1) 1998 52,800 (3) 1993 48,300 (2) 1999 54,850 (3) 1994 50,000 (3) 2000 56,250 (3) (1) U.S. Census Bureau. (2) North Central Texas Council of Governments. (3) City Staff Estimate. The City has established itself as an innovative leader among Texas municipalities. A steadily growing economy, complete municipal services and prime location deliver the high quality of living expected by the residential and business communities. With an estimated current population of 56,500, this more than triples the population of 1970. North Richland Hills is the third largest city in Tarrant County. The citizens of the City, with a median age of 32.5, enjoy the small town atmosphere while sharing the many amenities of the Fort WorthlDallas Metroplex. ECONOMICS. . . The City's location in the middle of the Fort WorthlDallas Metroplex provides access to approximately 4 million people - the sixth largest market in the United States. North Richland Hills' proximity to the DIFW International Airport allows local businesses to capitalize on trade opportunities gained through the North American Free Trade Agreement (NAFfA). The approximate economic base of the City at this time is manufacturing and distribution (8.1 %), wholesale and retail trade (32.7%), professional and related services (36.5%), and various other services (22.7%). The City's labor distribution by type includes individuals skilled in technical, sales and administrative functions (39%), management (26%), operators and fabricators (13%) and services (7%). Recent indicators illustrate the City's healthy economic environment: · In 1999, the General Fund, Park and Recreation Facilities Development Fund and the Crime Control District realized increases in sales tax revenues of more than 8% over prior year collections. Through the first four months of fiscal year 2000, sales tax revenues are up by over 8%. Property tax values increased by 9% from 1999 to 2000. · The City recorded permits for construction of new retail, restaurant, office, service, recreational and manufacturing space valued at a 1990's high of $29 million. Likewise, North Richland Hills realized the renovation and or expansion of commercial space valued at a decade high of $20.5 million. · The completion of the FM 3029/Precinct Line Road widening project has increased traffic counts - and attracted development interest at intersections with SH 26/Grapevine Highway and Mid-Cities Boulevard. Moreover, the previous year widening of FM 1938IDavis Boulevard is helping stimulate new developments at intersections with Mid- Cities Boulevard and North Tarrant Parkway. A-I e . Anticipated major developments scheduled for 2000 include: redevelopment of Richland Pointe Mall into a business center with 165,000 square feet of leasable space. Construction of a new Sam's Club with 128,925 square feet of space. and right next to Sam's Club there are eleven outparcels for retail. restaurant, and lodging establishments. $100 million revitalization of North Hills Mall to include a 3-acre lake surrounded by restaurants and retail development, a 200-foot laser-lighted fountain, ice-rink, 20-screen cinema and amphitheater. Redevelopment of Richland Plaza Mall into a 305,000 square foot business center with office space. retail, and restaurants. Construction of North Tarrant Parkway Plaza with a 62,322 square foot Albertson's grocery store and 40,500 square feet of in-line tenant space. Construction of plans for a 287 -acre master-planned Town Center with single and multi-family housing and office and retail space. The final plat for the first phase of the development that includes residential homes will be seen by the City Council in early spring. Values of properties in Phase I are estimated to be approximately $80 million. The entire project will add $400 to $600 million to the City's property tax base. Construction of the second-phase of The Crossing, a 285,000 square foot shopping center with anchors Kohl's Department Store and soon to be constructed Minyard's Grocery Store. . Other factors contributing to the City's wealth and prosperity include continued operation of existing employers such as: MEGA Life & Health Insurance Center (740 employees), KimberIy-ClarklTecnol (733), North Hills Hospital (630) - as well as the growth of H & M Food Systems (432), Wal-Mart (400), Walker Building Corporation (250), Sealy Mattress Manufacturing (156) and AvTel Matrix Telecom (122). And North Richland Hills has benefited from the success ofrecently new employers: Five Star Ford (196) and CTC Con-Way Transportation Services (100). North Richland Hill's status as a "triple Freeport" City (Le., one with the Freeport exemption available through Tarrant County. the City, and the Birdville Independent School District on qualified in-transit inventories) will benefit manufacturers such as Teenol and encourage their expansion. In addition, such an incentive enhances North Richland Hills' chances of landing new manufacturing and distribution facilities. With approximately 25% - 30% of the City remaining undeveloped, North Richland HiIIs offers numerous 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. e · Close proximity to new or expanding employers like Motorola's Global Paging Division (5 miles), 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'sffecnol Medical Products, H&M Food Systems. Sealy Mattress Manufacturing, Bates Container, and Arabesque Fragrance Manufacturing. Residential platting activity continues to be strong, especially in the northern areas of the City and near the Iron Horse Golf Course. One of two courses with adjacent residential lots, Iron Horse is achieving critical and financial success - having attracted more than 52,000 rounds of golf in 1999. MUNICIPAL SERVICES. . . With active involvement by the Mayor. a seven member City Council and 14 citizen boards, commissions and committees, the City is assured proper and effective representation. Low crime statistics are maintained by a police force consisting of 100 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. QUALITY OF LIFE. . . Amenities are plentiful in the City. 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 in excess of 115,000 volumes with a circulation of almost 385,000 annually. 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 all denominations. e A- 2 EDUCATION. . . Education for the dtizens of the City is provided 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. i.e. Pre-kindergarten-5. 6-8. 9-12. Physical facilities include: 3 high schools 1 alternative high school 7 junior high schools 20 elementary schools Coliseum Administration Building Stadium Transportation Complex Computer Service Center Annex/materials Center All of the school buildings owned by the District are air conditioned. Approximately 46.5% of the teachers in the District hold advanced degrees. The District employs approximately 2.552 total staff as follows: Teacher salaries in the District are as follows: Certified Professionals Others Degree Level Baccalaureate Masters Doctorate Minimum Salary $33,500 $35.000 $38.000 Selected historical enrollment figures in the District are as follows: Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 Source: Birdville Independent School District. Enrollment 15,182 15,478 15,490 15,588 16,059 17 .039 17.200 17.529 18.505 Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 1,589 963 Maximum Salary $47.490 $50.650 $53.650 Enrollment 19.100 19.358 18,929 19,039 20,098 20,454 20.882 21.108 20.972 Education beyond the high school level is readily available. The Northeast campus of Tarrant County College is located partially within the City limits. Additionally. within a radius of 40 miles. there are a number of colleges and universities including Southern Methodist University. Texas Christian University, the University of North Texas and the University of Texas in Arlington. TRANSPORTATION. . . The City has prime positioning for easy access to major local. regional and national markets. Beingjust 7.5 miles from the DallasIFort Worth International Airport and 9 miles from the newly constructed Alliance Airport. the City is located in the hub of business activity and is an integral part of the rapidly growing Northeast Tarrant County Area. The City is strategically positioned on or near five major Interstate Highways. Using Interstate Loop 820. easy access is gained to Interstate 35 (north to Oklahoma and south to Austin. San Antonio and Laredo). Interstate 45 (north to Tulsa and south to Houston). Interstate 20 (west to Midland and EI Paso and east to Tyler and Shreveport). and Interstate 30 (east to Texarkana, Little Rock and Memphis). The accessibility factor also includes five rail lines in the Fort Worth area. one of which - St. Louis Southwestern - is located in the City. AGE OF POPULATION (I) Median Income Per Household.... ............ ......... ......... ....... ....$50.990 Median Age of Population. ..................................................... 33.8 (1) Based on Bureau of Census. Department ofComrnerce. A- 3 MAJOR EMPLOYERS IN THE CITY e Rmnloyer Birdville Independent School District MEGA Life & Health Insurance Center Kimberly ClarklTecnol Division TCC - N.E. Campus* North Hills Hospital City of North Richland Hills H&M Food Systems. Inc. Wal-Mart Walker Building Corporation Bates Container Product School District Life/Health Insurance Medical Products Manufacturer Higher Education HospitallMedical Center Municipal Government Food Processing Retail Sales Building Contractor Box and Container Manufacturer * Split with Hurst. Source: North Central Texas Council of Governments. Local Media. City of North Richland Hills. BUILDING PERMIT INFORMATION Construction Commercial Residential Fiscal Number Number e ~ of Units Value of Units Value 1996 116 $ 29.200,801 346 $ 32.309,977 1997 133 25,986.136 302 25,573,591 1998 134 80,576.845 345 35.665.625 1999 21 29,047.456 299 47,601,097 2000 66 54.733,881 351 45,817,144 Source: City Records. e Estimated Number of Emnlovees 875 740 733 615 613 537 432 400 250 210 Total Total Units Value 462 $ 61.510,778 435 51.559,727 479 116.242,470 320 76.648,553 417 100,551.025 A-4 e APPENDIX B EXCERPTS FROM THE CITY OF NORTH RICHLAND HILLS, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30,2000 e The information 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. The records of the Corporation are audited with, and included in, the financial statements of the City, as, under applicable accounting procedures, the Corporation is a component unit of the City. As described in this Official Statement, the Corporation is solely responsible for the payment of the debt service on the Bonds, and no inference should be taken that the inclusion of the Corporation's financial statements with the audited financial statements of the City in any manner obligates the City or its assets with regard to the payment of the Bonds. The excerpts of the City's financial statements contained in Appendix B are not intended to be a complete statement of the financial condition of the Corporation, and reference is made to the complete Report for further information. - Deloltte & Touche LLP Suite 2950 301 Commerce Street . FortWorth,Texas 76102 Tel: (817) 347 3300 Fax: (817) 3362013 www.us.deloitte.com e Deloitte & Touche INDEPENDENT AUDITORS' REPORT The Honorable Members of City Council City of North Richland Hills, Texas: We have audited the accompanying general purpose financial statements of the City of North Richland HiIls, Texas (the "City"), as of and for the year ended September 30, 2000, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express in opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial ~tatement presentation. We believe that our audit provides a reasonable basis for our opinion. ~n our opinion, the general purpose financial statements referred to above present fairly, in all material .spects, the financial position of the City as of September 30,2000, and the results of its óperations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose offonning an opinion on the general purpose financial statements taken as a whole. The supplementary information as listed in the accompanying table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the City. This infonnation has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. The statistical section, which is marked unaudited has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, accordingly, we express no opinion thereon. ' - ' In accordance with Government Auditing Standards, we have also issued our report dated January 5, 200 I, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations. contracts and grants. 111at report is an integral part of an audit perfonned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. 'j)~ 4 1~ LL? January 5, 200 I _ Deloitte . Touche Tohmatsu - I - . --.-.----....----------- (THIS PAGE INTENTIONALLY LEFT BLANK) -2- ,-.-".---.---.---.." , e , GENERAL PURPOSE FINANC~ STATEMENTS e e -3- ----_..~---~_._~------'-_..._.... ... CJTYOF NORTH RICHLAND HILLS. TEXAS COMBINED BALANCE SHEET - ALL FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT SEPTEMBER 30, 2000 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999 Governmental Fund Types Proprietary Fund Types Special Debt Capital Internal General Revenue , Service Projects Enterprise Service ASS~TS AND OTHER DEBITS EJmd. ~ EillId.i EwuIs E.wI.d& ' fJuub. Deposits and investments (Note 2) $ 6,927,737 $ 4,496,154 $3,246,658 $19,826,348 $ 6,118,095 S 1,150,113 Receivables (net, where applicable, of allowances 'for estimated uncollectible amounts of$440,055): Accollnts 148,492 364,151 4,079,881 11,375 Property taxes (Note 3) 462,633 Other' Wçes 1,659,799 1,472,831 . . Accrued interest 66,751 33,565 21,511 200.990 164,440 54,093 Special1lSsessments (Note 4) 347,316 , Intergovernmental 74,202 Other 240,428 Prepaid expenses 14,109 Due from other funds (Note 14) 34,761 12,380. Note réceivable from component unit (Note 14) Inventories, at cost 8.848 7.858 472,464 62.210 Restricted assets: Deposits and investments (Note 2) . 3,863,669 14,731,109 6,812,624 Property, plant aµd equipment (net, where applicable ofaêcumulated depreciation) (Note 5) 71,686,735 3,530,061 Other assets (net where applicable, of accumulated ainortintion) , 121.842 69,600 Advan~ to other filn~ (Note 14) 505,758 , 431,8,65 , Other debits: . Amount available in debt servi~ fund Amount to be provided for retirement of gènera1 . long-term debt TOTAL ASSETS AND OT~ER DEBris S 9,906,715 $10,096,771 $3,268,169 $20,738,805 $97,832,920 S1l,V '76 , LlABILr:r~ES Accòunts. payable $ 368,632 $ , 116,332 $ 7,043 $ 48,659 S 2,167,425 S 228,910 Accrued liabilities (Not~ 1. 7 and 1l) 511,767 185,879 34,692 ' 450,774, 570,465 Deposits. and other liaþiJities 487,977 19.100 620.349 46,300 Due to other funds (Note 14) 47,141 Note paya~jJe to pñmary government Payab1 e from restricted aSsets: Accrued interest payable , 81,696 Current portion ofre,venue bonds, golf cou~e qbl igatió~ and ,contractual obligations payable 1,106,984 (Note 7) , Accounts payable ,1,328,147 'Customers' ,deposits 1.192,698 Developers' deposits 6,609 Golf co~rse obligations (note 7) , 3,620,000 Water and scwcr obligations (Note 7) 1,332,905 Aquatic parle obligations (Note 7) 2,114,248 DiscQunt on golf course obligations (64,564) General obligation bonds payable (Note 7) Sales tax revenue bonds (Note 7) Certificates of obligation (Note 7) 540,000 Note payablc (Notc 7), " Contractual obligation~ payable (Note 7) 2,565,240 Rcvenue bonds payablc (Note 7) Dis<;ollnt on \'Cvenue bonds payable 219,942 ,747,118 (~O,51S) Defcrred revenue (Notes 3 and 4) - Advances fro1ß othcr funds (Note 14) 291,264 646,359 Intergovernmental payable ;. Total liabilities 1,588,318 612,575 41,735 1,416,126 17.121,447 799,375 See accompanying notes ,to general purpose financial statcments. , - 4- EXHJBIT ] (Continued) -- Component ,Account Groups Total Primary Unit General General Government Tax Increment Totals Reporting Equity Fixed "Long- Tenn (Memorandum Financing (Memorandum Only) Aum 1&å! QnW District # 1 ~ l222 $ $ $ 41,765,105 $ $ 41,765,105 S 36,639,068 4,603,899 4,603,899 4,583,638 462,633 462.633 294,366 3,]32,630 3,132,630 3,200;578 541,350 541,350 644,722 347,316 347,316 354,632 74,202 74,202 ' 204,880 240.428 240,428 127.022 14,109 14,109 149,500 47.141 47,141 12,380 842,061 551,380 551,380 450,363 25,407,402 25,407,402 20,91j.984 $ 126.040,253 201,257,049 201,257.049 189,654,1 í2 191,442 191,442 134,541 937,623 937,623 768,659 $ 3,226,434 3,226,434 3,226,434 3,548,289 62,716,231 62,716,231 5764,600 63,480,831 '63,255.157 ~' 565,942:665 $345,516,374 5764,600 5346,280,974 5325,777,952 $ $ $ 2,937,001 $ $ 2,937~00l $ 2,098,561 '883,421 2,636,998 78,614 2,715,612 3,065,544 1,173,716 1,173,726 862,079 47,141 47,141 47,141 807,300 81,696 81,696 ' 46,748 ],IÒ6,984 1.106,984 375,160 1..328,147 1,328,147 ·(33) 1.192,698 1,192,698 1,110,710 6,609 6,609 II ,609 3,620.000 3,620,000 3,835;000 1,332,905 1,332,905 2,094,627 2,114,248 2.114,248 2,245,332 (64,564) (64,564) (64,564) 44,302,520 44,302,520 44,302,520 44,569,314 10,340,000 10,340,000 10,340,000 10,925,000 10,258,840 10,798.840 764.600 11,563,440 9,449.881 157,884 157.884 157,884 229,220 560,000, 2,565,240 2,565,240 3,188,096 (60;5 I 5) (60,515) (56,166) 967,060 967.060 2,1l2,219 937,623 ,937,623 768,659' 476 65,942,665 87,522,241 843.214 88,365,455 88.281,9 I3 e - 5- .-----, _.__.~----_. --.,..-------..-- '- --. ." .-- CITY OF NORlli RICHI-AND HILLS. TEXAS COMBINED BALANCE SHEET· ALL FUND TYPES, ACCOUNT GROUPS AND DISCRETELY PRESENTED COMPONENT UNIT SEPTEMBER 30, 2000 WITH COMPARA TIVE TOTALS FOR SEPTEMBER 30, 1999 Governmental Fund Types Proprietary Fund Types Special Debt Capital Internal General Revenue Service "rojects EntCJF.ise Service EOUITY AND OTHER CREDITS Ew1d EuiW f1I.nd¡ EmuIs EwJ¡ ¡ E»nd¡ Contributed capital (Note 10) $ S S $ $42,044,677 S 1,391,462 Investment in general fixed assets Retained earnings: Reserved, principally for revenue bond principal and interest , 2,000,217 Unreserved 36,666,579 9,499,239 Fund balMCCS: Reserved for encumbrances 365,841 ' J,035,890 5,086,299 Reserved' for inventory 8,848 7,858 , ' Reserved for debt service 3,226,434 Reserved for advances to other funds 505,758 Unreserved: De~ignated for capital improvements 3,61J,444 14,236,380 Designated fQr transition 3,137,975 Unreserved - unðesignated 7,437,950 1,69J,029 Total retah¡eq earnings! fund balances 8,318,397 9,484,196 3,226,434 J9,322,679 38,666,796 9,499,239 Total equity and other credits 8,31 ~,397 9,484,196 3,226,434 19,322,679 80,711,473 10,890,701 Commitments and Contingent liabilities ' (Notes 5,~; 7, 8, 9 and II) --. S3,268,169 $97,832,920 ., Total liabilities, ec¡uity and other credits , $9,906,715 S10,096,771 $20,738,805 SII,t. .76 " See accompanying notes, to general purpose financial statements. -6..; EXHIBIT I (Concluded) e Component Account Groups Total Primary Unit General General Government Tax Increment Totals Reporting Equity Fixed Long-Term (Memorandum Financing (Memorandum Only) ~ IkI!l Qnb1 District # 1 1QQ2 l222 S S S 43,436,139 $ $ 43,436,139 $ 40,805,110 126,040,253 126,040,253 126,040,253 119,791,890 2,000,217 2,000,217 1,963,234 46,165,818 46,165,818 40,299,430 6,488,030 6,488,030 9,877,986 16,706 16,706 12,613 3,226,434 3;226,434 3,548,289 505,758 505,758 ' 329,255 17,847,824 17,847,824 10,642,345 3,i37,975 3,137,975 2,319,726 9,128,979 ' (78,614) 9,050,365 7,906,161 88,517,741 (78;614) , 88,439,127 76,899,039 126,040,253 257,994,133 (78,614) 257,915,519 237,496,039 ~ $65,942,665 $345,516,374 $346,280,974, 5315,777,952 S764,6oo e -7- . -" -~ . .-..,--~._-._--..-~.._~--------"""'_._-.'-. CITY OF NORTH RICHLAND HrU..S TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES _ ALL GOVERNMENTAL FUND TYPES AND DISCRETELY PRESENTED COMPONENT UNIT , YEAR ENDED SEPTEMBER 30, 2000 WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999 Special Debt Capital General Revenue Service Projects , fJ.!ru! ~ f!mœ ~ Revenues: Taxes (notes 1 (0) and 3) $19,126,403 $8,558,889 $5,250,000 $ Licenses and permits ,1,391,263 Charges for services (note 1 (0» 4,559,674 Fil)cs 1,550,554 Contributions 103,756 Special assessments (note 4) 8,691 Interest income 486,044 540,563 140,489 ,1,229,361 intergovernmental 38,994 1,004,872 32,864 Drainage fees 765,153 Tennis center 231,065 Proceeds fio~ forfeiture of contraband 39,121 Miscellaneous 90,516 6],4(j0 15,719 Total revenues 27,243,448 '11,304,879 5,390,489 ],286,635 Expenditures: Current: General govem'ment 6,686,549 19,427 Public safety 12,988,270, 4,17~,797 Culture and reçreation 3,097,272 1,750;419 Public works 2,005,802 - Capital ~utJay (note I (0» 2,]85,758 3,680,]39 , Debt service: ' - \ ; Retirement óf general long-term debt (note 7) 4,365,834 Interest and fiscal agent, charges 3,752,752 Total expenditures 24,777,893 ,8,129,401 8,118,586 3,680,139 'Excess (~eficiency) of revenues over exp~nditures 2,465,555 3,175,478 (2,728,097) (2,393,504) Other financing sources (uses); Procee~ from bonds (note 7) 900,000 4,135,000 Operating transfers in 242,274 9,116 2,41>6,242 2,160,243 Operating transfers out (1,393,56]) (2,138,23]) (932,836) Operating transfers out to component unit Opera~ing transfers in from camponent unit . Operating transfers from primary government Operating transfers out to pr!mary government Total other financing sources (uses) - net (1,151,287) (1)29,1 IS) 2,406,242 5,362,407 Excess (deficiency) of revenues arid othersourèes over expenditures and other uses ],314,268 - ] ,946,363 (321,855) 2,968,903 Fund balances at beginning of year 7,004,]29 7,537,833 3,548,289 16,353,776 ,Fund balances (deficit) at end of year $ 8,318,397 $9,484,196 S3,226,434 SI9,322,679 See accompanying notes to general purpose financial statements. -8- --e EXHIBIT 2 Total Primary' , Government (Memorandum Qnb1 $3~,935,292 1,391,263 4,559,674 1,550,554 103,756 8,691 2,396,457 1,076,730 765,153 231,065 '39,121 167,695 45,225,45,1 Component Unit Tax Increment Financing Distr,ict # 1 Totals (Memorandum Only) 2QOO .1222 $ $32,935,292 1,391,263 4,559,674 1,550,554 . . ,103,756 8,691 2,443,710 1,076,730 765,153 231,065 39,121 167,695 $30,834,340 1,163,821 3,738,739 1,493,628 1,08,834 303,796 1,979,541 852,393 737,083 207,101 135,657 397,702 41,9~2,635 6,705,976 6,705,976. 6,022,845 17,162,067 17 ,162,067 14,892,523 4,847,691 4,847,691 4,548,879 2,005,802 2,005,302 1,960,966 5,865,897 235,987 6,101,884 9,975,727 '65,834 42,700 4,408,534 , ' 4,234,860 ,752,752 39,528 3,792,280 3,293;974 44,706,019 318,215 . ' 45,024,234 44,929,774 : 519,432 (270,962) 248,470 (2,977,139) 5,03~,OOO . -. 5,035,000 '5,470,000 4,817,875 4,817,875 4,986,216 (4,464,628) (4,464,628) (.4,231,516) (850,000) 91,649 85Q,ooO (91,649) 5,388,247 5,388,247 6,224,700 5,907,679 (270,962) 5,636,717 ' 3,247,561 34,444,027 ,192,348 34,636,375 31,388,814 .$40,351,706 $ (78,614) $40,273,092 $34,636,37S e 47,253 47,253 45,272,704 -9- C1TY OF NORTH RICHLAND HILLS. TEXAS COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES _ BUDGET AND ACTUAL - GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUND TYPES SEPTEMBER 30, 2000 . General Fund Variance- Favorable ~ .&lliW (Unfavorable) $ 18,955,329 $ 19,126,403 $ 171 ,074 1,024,7QO 1,391,263 366,563 3,851,624 4,559,674 708,050 1,600,865 1,550,554 (50,31 I) 483,920 486,044 2,124 , 97,000 38,994 (58,006) 148,476 90,516 (57,960) 26,161,914 27,243,448 1,081,534 Rev,enues: Taxes Licenses and pennits Charges for services Drainage fees Fines ContrÎbutions Interest income Intergovernmental Miscellaneous Total revenues Expenditures: Current: General government PubJic safety Culture and recreation Public works ' Deb~ service: Retirement of general long-term debt , . I~terest .and fi~al agent c~arges 6,763;376 13,021,739 3~93,492 2,136,278 6,686,549 12,988,270 3,097,272 2,005,802 76,827 33,469 , 196,220 130,476 Total e~penditures ExcesS (deficiency) of revenues over expenditures Other financing source~ (uses): ' " Operating transfers in Operatìl)g tnmsfers out Transfers in from component unit . 'Total, other financing sources (uses) - net Excess (deficiency) of revenues and other sources over expenditures and other uses ' 25,214,885 2Ù77,893 436,992 947,029 2,"6~,555 1,518,526, 237,000 ~42,274 5,274 (1,364,761) (1,393,561) (28,800) (1,127,761) (1,151,287) (23,526) $ (180,732) 1,314,268 $ 1,495,000 7,004,129 \ . $ 8,318,397 Fund balances at beginning of year Fund,bålanc~ at end of year See ~ccompanying notes to general purpose financial statements. - 10- EXHIBIT 3 --- Budgeted Special Revenue Funds Debt Service Funds Variance- Variancc- Favorable Favorable ~ &nml (unfavorabl~) ~ ~ (JJnfavorabl~) $ 4,385,375 $ 4,318,771 $ (66,604) $5,250,00.0 $5,250,000 $ ,. 684,000 765, I 53 81,153 134.750 103,756 (30,994) 235,500 254,477 18,977 . 120,000 140,489 20,489 15,270 15,270 2,917 27,903 24,986 5,442,542 5,485,330 42,788 $,370,000 5,390,489 20,489 4,927 (4,927) 3,719,501 3,559,299 16Ò,202 439,44~ 387,463 51,980 4,365.449 4,365,834 (385) 3,780,798 . 3,752,152 28,046 ~ ' 3,951,689 207,25S 8,146,247 8,1I8,586. 27,661 . , 83,598 1,533,641 ' 250,043 (2,776.247) , (2,728,097) 48,150 2,403,302 2,406,242 2,940 (739,S81) (739,572) 9 (739,581) (739,572) 9 2,403,302 2,406,242 '2,940 $ 544,017 794,069 $ 250,052 S (372,945)· (321,855) $ 51,090 4,082,381 3,548,289 S 4,876,450 $3,226,434 e ;.. 11 - CITY OF NORTH RICHI-AND HILLS TEXAS COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS - ALL PROPRIETARY FUND TYPES YEAR ENDED SEPTEMBER 30, 2000 WITH COMPARA TlVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 1999 EXHIBIT 4 Internal Total E\}terprise Service (M~morandum only ~ Elm.ds .2QQQ l222 Operating revenues: Water and sewer service $18,674,786 $ $18,674,786 $17,371,899 Water and sewer connections 602,556 60~556 453,252 Setvice charges 725,574 745,574 659,553 Inspection fees 93,350 93,350 70,803 Golf course fees and charges 2,880,085 2,880,085 2,743,379 Assessment revenue },846 1,846 1.427 , Insurance premiums (Notes 1 (0) and 11) 3,822.631 3,822,631 3,534.112· Maintenapce services (Note 1 (0» 3,005,959 3,005,959 2,730',865 Telephone services 286,920 286,920 265,921 Computer services 1,879,896 1,879,896 1,793,i54 Aquatic park admissions 2,428,493 2,428,493 2,233,129 Recrea.tion equipment rental 36,497 36,497 37,247 ,Food, beverage and gifts 561,533 . 561,533 585,717 Sponsorships 25,000 25,000 11,069 Other revenues 91,942 83,408 175,350 94,452 Total operating rèvenues 26,121;662 9,078,814 3'5,200,476 32,~85,979 Operating expenses: Contractual services (Note 9) , 9,945,973 598,282 10,544,255 8,831,765 Personal services 3.637,291 2,149,829 5,787,120 5,436,094 Cost of golf cou~se sales Ì1nd services 1,733,982 1,733,982 h367,201 Repairs and maintenance .1,614,840 , 434,583 ' 2,049,423 2,321,729 SupplieS, " . 598,835 . 482,965 1,081,800 1,049,984 Depreciation 2;509,950 463,672 ,2,973,622 2,665,291 Franchise fees (NQte 1 (0» 347,425 ' 347,42~ 328,205 Payments in lieu of taxes (Note 1 (0» 248,982 248,982 237,114 ;Administration fees (Note 1'(0) and 11) 1,347,666 24,000 1,~71,666 1,355,811 Claims (]':lote 11) 3,290,240 3,290,240 2,951,674 Total operating expenses 21,984,944 ' 7,443,571 29,428,515 26,544,868 ' Operating income '. 4,136,718 1,635,243 5,771,961 6,041,1 II Nonoperatíng revenues (expenseS): Intere~t income 1,052,689 321,205 1,373,894 1,109,204 Interest expense and fiscal agent charges (890,269) (890,269) (1,044,477) Other income (expense) (20,450) , (20,45,0) 37,595 Gain on 'disposal of fixed assets (13,433) ·34,915 ' 21,482 16,137 Total nonoperating revenues (expense~) 148,987 3;35,670 484,657 118,459 Income b'efore operating transfers 4,285,705 1,970,913 6,256,618 6,159,570 Operati!'1g trånsfers in ' 28,800 772,70S 80 I ,505 649,000 Operating transfers out (812,274) , (342,478) (1,154,752) (1,403,700) Total operating transfer - net (783,474) 430,227 (353,247) (754,7ÒO) Net income 3,502,231 2,401,140 5,903,371 5,404,870 Retained earnings at beginning of year 35,164,565 7,098,099 42,262,664 36,857,794 Retained earnings at end of year $38,666,796 S 9,499,239 $48,166,035 $42,262,664 See accompanying notes to general purpose financial statements. - 12,- CITY OF NORTH RJCHLAND H1LLS TEXAS EXHIBIT 5 COMBINED STA 1EMENT OF CASH FLOWS - ALL PROPRIETARY FUND 1YPES YEAR ENDED SEPTEMBER 30, 2000 WITH COMPARATIVE TOTALS FOR 1999' ~ " . Internal Total Enterprise Service (Memorandum Only) E1Iwh E1m.ds 2QQQ l222 Operating income: $ 4,136,718 $ 1,635,243 $ 5,771,961 $ 6,041,J 1 J Adjustments to reconcil,e operating income to net cash provided by operating activities: Depreciation 2,509,950 463,672 2,973,671 2,665,291 cnherincome(expense) (20,450), (20,450) 44,004 Loss on revenue bond refulJding and defeasance 109,121 Amortization 120,270 120,270 (17,674) Change in assets and liabilities: (Increase) decr<:ase in accounts receivable 100,781 1,155 101,936 (1,002,628) On crease) decrease in inventories (89,072) (7,852) (96,924) 217,611 (Increase) ~.crease in prepaid expenses 65,791 65,791 (60,573) (Increase) decrease in other assets 12,699 12,699 8,351 Increase (decrease) in accounts payable 2,011,065 56,736 ' 2,073,801 (1,378,641) Increase (decrease) in accrued liabilities 9,000 38,333 47,333 (291,246) , Increase (decr~ase) in other current liabilities 21,075 21,075 25,225 Increase in deposits 65,984 ' 65,984 26,640 (Decrease) in deferred revenue (250,000) (250,000) Total adjustments, 4,583,543 531,594 5,115,137 345,487 Net cash provided by, operating ac~ivities . 8,720,261 ,2,166,837 10,887,098 6,386,598 - Cash flows from noncapital financing activities: Changè in bank overdraft (142,508) Ope,~ting transfers from (to) òther funds (783,-:f74) 430,227 (353,247) . (754,700) p~ received (paid) on amounts due to ,and ces from other funds , (42,3.00) (42,300) 11,489 ReceIpts from collections of ¡¡mounts due from other funds and advances to other f!,!nds 7,539 7,539 39,636 Net cash provided by (used for) nOlicapital financing activities (818,235) , ,430,227 (388,008) (846,083) Cash flows from capital and related financing activi\ies: Acqui~ition and construction of capital assets (4,654,478) (1,056,730) (5,711,208) (3,602,985) Principal paid on revenue bonds, contractual obligations and note payable (1,143,457) (1.143,457) (1,171,881) Interest paid on revenue bonds, golf course obligations and note payable (870;927) (870,927) ( 1.038.277) Proceeds from sale of capíta1 assets , 35,521 35,521 69,011 Net cash used for capital and related financing activities (6,668,862) (1,021,209) (7,690,071 ) (5,744,132) Cash flows from investing ac.tivities - interest on investments 1,024,660 . 321,42,3 1,346,083 ],171,020 Net incr~e in ,cash andcåsh equivalents 2,257,824 1,897,278 4,155,102 ' 967,403 Cash and cash equivalents at beginning of year 18,591,380 6,065,459 24,656,839 23,689,436 Cash al)d cash equivalents at end of year $20,849,204 $ 7,962,737 $28,811,94] $24,656,839 Fiscal year 2000 noncash transactions and related financing activitieS: Developers contributed utility plant assets in the amount of$2,631,029. See accompanying notes to general purpose financial statements. e - 13 - (THIS PAGE INTENTIONALLY LEFT BLANK) " - 14- e Note 1 Note 2 Note 3 Note 4 Note 5 Npte 6 Note 7 Note 8 Note 9 Note 10 eN~t~ 11 Not~ 12 Note 13 Note 14 Note 15 e CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements September 30, 2000 Summary of Significant Accounting Policies Deposits and Investments Property Tax Special Assessments Fixed Assets Operating Leas~s Long-term Debt , .Employe~s' RC?tirement System Water and Sewer Contracts Contributed Capital Commitments and Contingenci~ Deferred Compensation Plan, Segment Information - Enterprise Funds Interfund Balances Operations of Component Uni~ - 15- .__._._.._._-_._~----~-_._--_._--_._- (THIS P AGE INTENTIONALLY LEFT. BLANK) , ' - 16- ...._..-...-~~_._-,-_.-.._..._-._-- --~-_.- ---. CITY OF NORTH RlCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS e YEAR ENDED SEPTEMBER 30, 2000 1. SUMMARY OF SIGNIFICANT ACCOUNTING POI,JCIES The City of North Richland Hills Home Rule Charter was adopted by the voters at an election held on November 3, 1964. The City operåtes under a Council-Manager form of government. The City provides a full range of services. These services include police and fire protection; the construction and maintenance of streets and' inftastructure; parks, library and recreational activities; the operation of a water and sewer system; the operation of a water park, a tennis center and a golf course. The accounting policies ofthe City of North Richland Hills, Texas conform to ~ccounting principles generally accepted in the the United States ör'America (GAAP) as applicable to governmental units. The Qovenimental Accounting Standards Board (GASB) is the accept~ standard setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant of such policies: , (a), Reporting Entity , e As required by GAAP, these general purpose financial statements present the primary government and its component units, entiti'es for which the government is considered to be financially acéountable. The blended component units, although legally separate entities, are~ in substance, , ,part òfthe primary government's operations and so data from these units is tombined with data of , th~primary g~vernment. Discretely presented component units are entities that are legally separate from the City; but for which the City is financially accountable or whose relationships with the -çity ate such that exch,lsioi1'vould be, misleading or incomplete. Discretely presented component units of the City are presented in a separate colunin in the combined financial statements to, emphasize they are'legally separate from the primary government. The component units have, September 30 year ends. ' Blend,ed Cc;>mponent Units - The Parks and Recreation Facilities Development Fund (PRO) is used to aCCOl,mt for the accumulation of resources to build and improve City parks and recreational facilities. The Crime Control and Prevention District Fund,(CCD) is used to account for the accumulation and use of half cent sa1es'tax proceeds dedicated for crime reduction programs. Jñe PRD and CCD are reported as special revenue funds. Tije Board of Directors of both component units is substantiv.ely the' same as the City CoUncil. Comp1ete financial statements for the . individuSlI cmnpo~ent units may be o~tained at the City's offices. Discretely Presented Component Unit - The Richland Plaza Tax Increment .Financing District No.1 (TIF #1) was created to furnish improvements. and sërvíces which provide enhancements for the citizens within the District. The TIF #1 is included as a component unit because of its original formation by the City aß(~ be~ause management belie..ves it would be roisleading to exclude it from . - the-C¡ty'siìnanclalstateuu;:;llts;"Sirrce-tl1is-component unit direttlyhenefits tire dtizèhS öftlle District, it has been presented as a discretely presented component unit. No separate'financial statemerits are,issued. , (b) Basis of Presentation - Fund Accounting The accounts of the City are' organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts which comprise its assets, liabilities, retained earnings/fund e - 17- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 balance, revenues and expenses/expenditures. The various funds are grouped by type in the general purpose financial statements. Account groups are financial reporting 'devices designed to provide accountability for cer,tain assets and liabilities that are not recorded in funds. The followi!lg fund types and account groups are used by the Çity: ' ' , Governmental'Fund Tyoes , . Governmental Funds are t~ose through which most governmental functions'ofthe City are financed. ßovernmental Fu~d types are presented using the flow of current financial resources measurement focus. 'fhe following are the City's gpvemmenta:J fund types: General Fund - The General Fund is, the general ope¡:ating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - The Special ReveilUe Funds are used to acèount for the proceeds óf specific revenue sources (other, than special assessments) that are legally rÿstricted to expenditures for specifièd ,purposes: ' , Debt Service Funds - The Debt Service,Funds are Used to account for the accumulation of resources for, and the payment of, generai 10ng-temi and sales taX revenuedebt'prinçipal" interest and related costs. ' Capita!' ProjectS Funds- The Càpital Projects'Funds ar~ us~d t9 ac~ount for flnaQcial resources t~ ' be used for'the acquisition or construction of major capital facilities (other than those financed 1: .the proprietary fund' typ~s). Finåncing is provided pri,marily by the s~le of general obligatio~ bonds. Certainprojects are partially financed by special assessments, operating funds and, certifjcates of obligation. ' , Proprietary Fund,Tvpes ,Pr,oprietaty Funds are used' t~ account fOT activities 'that are similar to those often fO,und in the' private sector. The Proprietary Funds are accounted for on· the flow of economic resources ' . measuremênt focl;1s.Tbi~measùr~ment fòcus. emph~sizes the det,ermination ofne! income. Under GASB Stat~ment No. 20, Accounting and Financ!al Reporting for Proprietary Fµnds and'Other Governmental Entities T~at Use Proprietary Fund Accounting, all proprietary funds follow 'Financial AccountIng Standards Board (FASB) standards issued on or before November 30,1989. Following are the Ci(y's proprietary fund types: Enterprise Funds-' the Enterprise Funds are used to account for operations (a) th,at a~e financed and'operated in a manner similår to private business enterprises - wherð the intent of the governing : body is that the costs (expen~es: including depreciation) ,of providing goods or services to the general public on a continuing basis be financed or recovered pnmarilythrough user charges; or ' (b) where the governing bçdy has decided that periodic determination of revenues earned, expenses , , . incurred and/or net income is appropriate for capital maintenance, public policy, management control, accou!,tab,iiity or other purposes. " Ìnternal Service Funds - The In~erna'l Service Funds are used to account for goods or sérvices provided by one department to otherdepa~ents ofth7 City on a èast reimb~rsement baSis. - 18- _ _ _ø __.n·-----..,__~·.,.__··_._~.___·_ CITY OF NORTH RICHLAND lliLLS. TEXAS e NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 . Fiduciarv Fund Tvpe Agencv funds - Fiduciary funds are used to account for a~sets held by the city in a trustee capacity or as an agent. Agency funds are custodial in nature and do not involve measurement of results of operations. This fund was closed out in fiscal year 2000. Account Grouos Account groups are used to establish accounting control and aècountability for the City's general fixed assets and generallong-ter:m de~t. The following are the City's account groups: Gene'ral Fixed Assets Account ,Group - This account group is established to account for all fixed Il$sets of the City, ,other than th,ose accounted for in propri~tary funds. General L~ng-terni Debt Account GrouD - This accolint group is established to account for all 10ng-tef!l1 debt of the City exc,ept that accounted for ,in proprietary funds. ' .' , . (c) Basis of Accounting , The modified accrual basis of accounting is followed by"govemniental funds. Under the modified a,ccrual basis of accounting, revenues are recorded when sùsceptible to accrual, ie., both measurable a~d available~o finance expenditures of the cÚITent fiscal period. "Measurable" means the' amount ofthe transaction can be deterÍt)ined and "ayailable", means collectible within the ~urrent period or soon enough tlÍereafter to be u'sed to pay liabÎlíties of the current period. RevenlJes not con,si~ered available are recorded as deferred revenµe. Expenditures are. recorded , when the related fund liability is incurred except for (1) interest on general long-term obligations, ", whiçhls recorded when due or when amounts have been accumulated in the Debt Service Funds for payments to be made early in the following year, and (2) a portion of accrued vacation leave (note I (I», which is recorded in the ten:n debt account group. , ' , .. ..' >'. e Property tax, sal~s tax. drainage fees and certain franchise tax reVenue~. are recognized under the $u$cept'ible to accrual concept. Other franchise taxes, licenses and permits, charges for services (excluding administration fees), fines, ,contributions, special assessments and miscellaneous revenues are recorded as revenues when received in cash because, they are generally not 'measurable untH ac~ually received. Interest incòme, intergovemmental revenue and administration fees are re~orded as earned since they are f!1easurable and available. ~he accrual basis ofa:CCounting is uti1iz~d by the proprietary funds. Under this method, revenues ar.e recorded when ~ed and ~xpensesare recorded at the time liabilities are incurred. (d), Budgetary'Data The City Cou~cil follows these procedures in establishing budgetary data reflected in the general purpose financial stat~ments: (1) Prior to September 1" the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and the means of financing them. e - 19- ~-,....-----------:--._._.,- CITY OF NORTH RJCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 (2) Public hearings are conducted to obtain taxpayer comments. (3) Prior to September 30, the budget is legally enacted through passage of an ordinance. (4) The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. , , (5) ,Formal budgetary integration is employed, as a management control device during the year for the General Fund, certain Special Revenue Funds (excludingthe Special Inv.estigåtion Fund, , Parks aodRecreation Facilities 'Development F':ß1d and the Grant Fund) and the Debt Service Funds. Budgetary control is maintained at the fund lev.el. ' «(j) LegaIJy adopted'bildgets, for.the, General Fund, Debt Se~ice Funds and certain Special Revenue FunØs,áre adopted on a basis consisteg.t with GAAP. Budgeted amqunts are as origiIially adopted and amended by ,the City ,Council Qr as, transferred between departments by the City Manager. During the year, several supplementary appropriati'ons of approximately $329,000 were necessary, due to addìtional appropriations to the Generål Fund, the Donatio,ns Fund, and the CCD Fund expënditure budget. ,Net revised r~venue estimates of ' . approximately $(485,000) were necessary. Appropri8;1ions lapse at year end. . I '. . , (7) No ann~~ budg~t was adopted for the' Special ,Investigation FU,nd, Parks and Recreation Facilitiès pevelopment Fund and tl1e Grant Fund (Special Revenue Funds) for the year ended September 30; 2000 as shown below: Special Revenue Funds J;xcess (deficiency) of revenues and other - so'ur~es over expenditures and other uses: 'Budgeted (unds (budgetary basis) ..Nonbudgeted funds ' " $ 794,069, 1,152,294 Total (GAAP b.,asis) $ 1,946,363 (8) Budgetary data for the Capital Projects Funds, the Special Investigation Fund, the Parks and ReCreation f:acjJjties Development Fund and the Grant Fund has not been presented in the acèompanying 'general purpose financial stat~ri1el1ts as such funds are ~ither budgeted over the life of the respective projects and not on an annual basis or an annual budget is prohibite4 , by regulatory agencies. Accordingly, formal budgetary integration of these funds is not employed and comparison of actual results of operatIons to budgetary data for 5u.ch funds are not presel)ted. . ' , Budgetary data for proprietary fu,nds has nòt been presented since the reporting on such budgets is not legally required. - 20- _~.. ~___.__.~____~___,~______o CITY OF NORTH RlCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 e (e) Encumbrances Encumbrance accounting, under which pur,?hase orders, contracts and other commitments for the expenditure offunds are recorded in order to reserve that portion of the applicable fund balànce, is employed in the governmental funds; Encumbrances are reported as reservations of fund balances because they do not constitute expenditures or liabilities. (f) Deposits and Investments Deposits consist of cash and cash equivalents. Investments consist of (1) investments in pµblic fund investment pools, (2) short-tenri investments which mature in 12 months or less from the time of purchase and (3) investments which mature in greater than 12 months from the time of purchase. Predominantly all of the City's ii1vestrrients havè original maturities of one year or less and, accòrdingly, 'the investments are carried at amortized cost in accordance with GASB No. 31, Accounting and Financial Reportingfor Certain Investments ' and for Extemal Investment Pools. . , For the purposes of presenting the statement of cash flows for Proprietary Funds, cash and cash equivalents are defined as demand deposits and pooled deposits, and investments (note 2). (g) Inventories Inventor~e's are valued. at co:;t u,sing the first-in, first-out method. The cost of governmental fund , typ,e inv~ntories is reçorded as a~ expenditure when' consumed rather. than when purchased. (h) Property, Plant and Equipment - Proprietary Funds Property, plant and equipment owned by proprietary funds are stated at cost or estimated fair market. value at the date contribut~d. Depreciation has been providec;l on a straight-fine basis over the estimated usefulliv.es of the assets.,1l1e estimated useful lives are as follows: ¡ ~uiJding 'and improvements Land improvements ' lltility plant in service ' Machinery and equipment 30 years 50 years 38-50 years , 3-10 years (i) General Fixed Assets General fixed assets are recorded as capital outlay expenditures in the General Fund, Capital Projects Funds or Special Revenue Funds, ançl,capitalized at cost in the General Fixed Assets Accoúnt Group. In the case of gifts or contributions, such àssets are recorded in the General Fixed Asse~ Account Group at est}mated fair market value at the time received. , General fixed assets contributed by developers or other contractors, , consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not 'been capitalized. Such assets normally e - 21 - ..' - .-.-.'. -~.- --.-.----------.--.--..... CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 are immovable and of value only to the City; therefore, the purpose of stewardship for these items is satisfied without recording these assets. Infrastructure constructed by the City has been capitalized at cost in the General Fixed Assets Account Group. , , No depreciation has been provided on general fixed assets, and no interest has b~en capitalized. (j) Other Assets - Enterprise Funds Other assets consist primarily of expenses incurred in connection with the issuance of certain ou~tanding revenue bonds and golf course obligations. Such, charges are amortized on a straight-lioe basis over the lives of the respective bonds or obligations. Amortization expense was $12,699 for the year ended September 30,2000. (k) Advances tQ Other Funds - General Jrund Noncurrent portions of Jong-tenn interfund loans receivable are reported as advances aJ:ld are equally offset by a fund balance reserve account in governmental fund types which indicates that they do not constitute expendable available financial resources and, therefore, are not available for appropriation. , (I) Vacation and Sick Páy , , City employees are granted vacation leave in varying amounts dependent upon len~ of servicè. Sick leave is also granted to employees after six months of service. In the event of tennination af , one or more years of service, ~ employee is paid for all accumulated unused vacation. No reimburse,-nent is made for ui1Used accumulat~d sick leave upon tennimition of employment, exéept upon retirement. Upon retirement, an employee may convert up tö six weeks of sick leave to vacation. Vacation pay is accrued as-vested and included i~ accrued liabilities in the accompanying combined balance she~. Si~k pay is re~orded when taken. Acçrµed vacation pay tl:tat is expected to 'be Iiquid3ted with expendable available financial resources is reported as an expenditure and a fund liability of the govemm~ntal fund that will pay : it. Amounts of accrued vacation pay that are 110t expected to be liquidated with expendable available financial resources are reported in the General Long-tenn Debt Account Group. No , expenditure is reported for these amounts. Accrued vacation pay of proprietary funds is recorded as an expense and liability of those funds as the benefits accrue to employees. ' Accrued vacation pay at September 30, 2000 consisted of the following: Governmental fund types Proprietary fund types Generallong-tenn debt account group $ 299,329 390,786 883,421 $1,573,536 - 22- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 e (m) Restricted Assets Certain proceeds af Enterprise Fund bands, as well as certain resDurces set aside fDr their repayment, are classified as restricted assets because their use is limited by applicable band cavenants. , Retained earnings have been reserved far the excess afrestricted assets aver related liabilities to. the extent such restricted assets were accum':llat~d fTam revenues (i.e., in some cases, restricted assets ~ere abtained in tata) or in part fram bond proceeds). Assets have also been restricted by managementfar the following: . The Cri,me Cantral and Prevention District (Special Revenue) Fund contains assets restricted for transitiòn. In the event that the half cent sales tax funding CCD activities is discantinued, the' restricted assets will be used to. fund those activities until an alternate funding source can be identified (Le., during the transitian peri ad). ' The Water and Sewer (Ente,iprise) Fund and th,e Aquatic Park (Entèrprise) Fund both cDntain assets restric~ed f9r futur~ constructian. The purpose is to. designate funds far future capital projects and to. reduce the am aunt of future band issues for capital'projects. e , , The Water and Sewer (E,nterprise) Fund also. cantains assets restricted far rate stabilizatian. The restriction is intended to. lessen the impact of increases in 'contractual services fram the Trinity River Authority and the City afFort Worth far wateT and sewer services. ' , The Aquatic Park (Enterprise) Fund and the Self-Insurance (Internal Service) Fund bath contain assets restricted far future insurance claims. Funds will be accumulated until needed to. cover the costs af excessive claims. The Information ~ervices (Internal Service) Fund contain assets restricted for future system improvements. The intenc;led purpase is to. fund major camputer systemsaftware and hardware replacemen~ and upgrades. ' , 'The Support Services ,(Internal Services) Funds cantains assets restricted for building and vehicle maintenance andreplacement. The buildirig restriction is used to. accumulate funds fatthe implementation of the multi-year plan. Equipm~nt restrictians are used to. accumulate funds for the replacement of vehicles and heavy equipm~nt. (n) Unbilled Charges Unbilled utility service charges afthe Water and Se~er (EntC?rprise) Fund and drainage utility fees of-the Drainage Utility (Special Revenue) Fund are estimated and recorded as receivables, net af estimated uncallectibles.· . ' (0) Tra~s~c::tions Between Funds Quasi-external transactians are accaunted for as revenues, expenditures or expenses. Transactians that constitute reimbursements to. a fund for expenditures/expenses initially made from it that are e - 23- -- ._..---_.~.--......--..--------- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and a$ reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external transactions and reimbursements, are reported as transfers. Nonrecurring or rlonroutine permanent transfers of equity are reported as residuaJ equity transfers. All other interfund transfers are reported as operating transfers and are included in the results o~ operations of both governmental and proprietary funds. , . , The General Fund charges the'Wat~r and Sewer (Enterprjse) Fund a franchise fee ($347,425 in 2000)' and a payment in lieu of tax (i.e., property taX) ($248,982 in' 2000). Such charges are recorded as tax revenues by the General Fund and operating expense~ by the Water and Sewer (Enterprise) Fund. . The.General Fund charges the Water·and Sewer (Enterprise) Fund, Aquati,: Park (Enterprise) Fund, Capital Projects Fund, the Crime Control and Prevention District (Spe~ial Revenue) FU!1d and the Parks and Recreation Facilities Devèlopment (Special Revenue) Fund an administration fee for ' certain'genefal and administrative services provided to such funds. Such charges are recorded as charges for services revenue by the General Fund ($2,657,784), operating expense in 2000 by the ,Water and Sewer Fund ($1,024,992), operating expense by the Aquatic Park Fund ($75',540), capitàl outiay expenditùre by the Capital Projects Fund ($210,000), public safetY expenditure in the Crime Control and Preventiqn District Fu,nd ($1, 144,644) and cul~ure and recreation expenditure by the Parks .and Recreation Facilit'ies Development Corporation :t:und ($202,608)., . :." . '. '. . . ' .. The Intem~1 Service Fun.d~ reco.r:d charges to other fun~ for services rendered as operating revenues (see note II). 1þe respective funds record the related charges a~ operating expenses or 'expenditures, as appropriate: (p) Fund Equity ReserVations of fund balance represent ampunts that are not available for appropriation or are legally segregated for specific purposes.'Reservations of .retained earnings are limited to outside third-party r~strictions. Designated fund balances represent t~litative management plans as determined by the City Council for the 'future uses of financial resources. ' " The Cri~~ Control and J>revention Di~trict (Special Revenue) Fund equity. êontains a designation for transition. Assets have been restricted in an amount equal to the reserve. In the event that the half c~nt sales tax. funding CCD activities is discontinued, appropriations from the designation and the aSsociated 'assets will be used to fund those activities until an alternate funding source can be identified (i.e., ciuringtlie transition period). (q) Comparative Data .. . . .. . . '. 'èomparative dam' fOT the pTi~r year have been p;esented in the accompanying generaJ purpose financial statements in order to provide an understanding of changes in the Çity's financiaJ position and operations. However; complete comp~rative data (i.e., presentation of prior year totals by fund type in each of the statements) have not been presented since their inclusion would make the statements unduly complex and difficult to read. -.24 - e 'e, e CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 Certain amounts presented in the prior year have been reclassified to confonn to the 2000 presentation. (r) Total Columns Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in confonnity with GAAP. Néither is súch data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 2. DEPOSITS AND INVESTMENTS , , Siibstalltia,lly åll operating deposits and investments are maintained in pooled deposits and investment accounts. Interest income relating to pooled deposits and investments is alloèated to the individual funds monthly based on each fun~'s pro-rata share of total pooled deposits and investments. Legal provisions g'enerally penn it the City to invest in certificates of deposit, repurchase agreements, publi~ funds investment pools, direct obligations of the, United States of America or its subdivisions and state and local government securities. During the year ended September 30, 2000, the City did not own any types of securities other than those permitted by statute. ' At Septembet 30, 2000; 'the carrying amount of the City's cash was $525,331, ~d the- bank balance waS S30S,S98.The bank balance was entirely coveréd by Federal depository insuratice or by collateral held by the City;s'agent pledged in the qïty's name which is considered category one under provisions of GASB Nc;>. 3, Deposits with Financial Institution'S. Investments (includirzg Repurchase Agreements) and Rever:se Repur.c~se Agreements; All investment securities managed by the City (which excludes'S43,497,482 in TexPool and $1,522,392 in LOGIÇ) are insured, registered or held by the City or the City's agent in the City's nam.e.whìch is classified as c~tegory one, in acco¡-danc~ with GASB Statement No., 3. TexPool, a privately managed pUQlic funds investment pool created by the Treasurer of the State of TeXas acting by and through the Texas Treasury Safekeeping Trust Company, is empowered to invest funds and act as custodian of investments purchased with local Investment funds. Authorized investments ofTexPòol include obligations of the United States of America or its agencies, direct obligations of the State of TeXas or ,its agencies, certificates of deposit and repurchase agreements. TexPool investments are not categorized because they are not evidenced by securities that exist in physical or book entry fonn. The fair value of the 'posi~ion in the pool is the same as the value of the pool shares. LOGIC, the Te~as Local Gover~ment Investment Cooperative, is a privately-managed public funds ,invest;ment pool created ':Inder Texas statute pursuant to the Interlocal Cooperation Act and the statutes authorizing Local Government Investment Pools. LOGIC is owned by its participants and is administered by its contracted General Manager. LOGIC offers the Liquid Asset Portfolio, which maintains a stable Sl net asset valu~ and has a I 8 ~-day (or less) weighted average maturity. The portfolio contains only government securities. LOGIC investments are not categórized because they are - 25 - CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 not ~videnced by securities that exist in physical or book entry form. The fair value of the position in the pool is the same as the value of the pool shares. At year end, the City's pooled deposits and investments were as follows: u.S. Government agencies' notes Treasury notes $ 20,9] 4,269 ] ,990,000 '. $ 22,904,269 3. PROPERTY TAX The City's property tax is levied each October I on the assessed value listed as of the priorJanuaiy 1 for .all real property and certainpersonâl property located in the City. Tax liens attach as of February 1. The ' assessed value, net of exempti?ns, upon which the fiscàl2090'levy Was based was $2,136,094,682. . . Property taxes are limi,ted by the, Texas Constitution to $250 per $ 100 of assessed valuation and by City Chart~r to $1.50 per' $100 assessed vaiuation. The combined tax ráte tq finance general governmental !¡erVi~e anc;l deb~ service ~~r tIle year ended September 30. 2000 was $.57 per'$,~ 00 cif assessed,valuation. . , . . Tåxes are due on receipt ofth'e tax 'bill. Current ~x coll~ctions for the year ended September 30,2000 were.98.09% of the tax leyy. Property taxes rece~v~ble a~ September 30, 2000 ,were $462,633. . . Property taxes levi~d for 2000 have be-en ,recorded as receivables, n~t. pf estimateQ,. uricoll.ectiQles. The net receivables collected during 2,000 ~dthose çOnsidered "avå.ilable" at September 30,2000 (i.e., property uPcès collected withIn 60 days of year end) hay-'e beenrecognì~ed as revenues in 2000. Prior ' year levies were recorded using these same principles. The remaini"g receiyables have been reflected as defetred,revenue ($219,94i at September 30,2000). . . . . . . , , The åppraisal of proPerty within the City is the'responsibility of a county-wide Appraisal Distri~t as required by legislation passed by thë Texas Legislature: The Appraisal District is required under such. legislation tQ âssess all property within the Appraisal DistrlGt on the ba~is of I OQ(ó ,of its appraised value and js prohibited from applying any assessment ratios. The value of property within the Appraisal, District must be reviey¡ed every three y~ars; however, the Çity may, at its own expensè, require annual review~ ofapprais~d values. The City inay chaIJenge appraised values estaþlished by the Appraisal ' District t:hrough various appeals and, if necessary; legal action: ' ,4. SPECIAL ASSESSMENTS , Certain street and drainage construction projects are financed partially by special assessments. Such , projects are recorded in the General Ç;apital Projects Fund because they benefit the entire community and are finanéed primarily by general obligation, bond proceeds. Special assessmentS are levied against , properties deemed to be specifically benefited byth~ improvements. Costs 'of the pròjects are estimated, and property Owners are charged a propprtionate ~~are. ' .', - 26- e e, e CITY OF NORTH RICHLAND HILLS, TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,2000 Special assessments are recorded on the levy date and recognized as revenue when coHected. Assessments which are not "available" at September 30, 2000 of $384,575 have been reflected as defeITed revenue in the Genera] Capital Projects Fund. 5. ~D AS&ETS A summary of changes in genera] fixed assets foJlows: Balance October 1, .l.22.2 Land Buildings and improvements Improvements other than , buildings Machinery and equipment , Constructipn in progress $ 6,517,936 , 21,662,945 64,837,557 10,977,734 15,795,718 $119,79.1,890 Additions $ 6,715 978,470 5,325,211 $6,310,396 Transfers! Retirements $ 400 305,007 4,,820,933 1,627,911 (6,816,284) Balance September 30, 2000 ,$ 6,518,336 21,974,667 69,658,490 13,584,115 14,304,645 $ (62,033) $ 126,040,253 . ,'Con~ction,inprogress at September'30, 20ÕO" is composed of the foHowing: Streets, drai~age, public safety and park i~provements Project Authorization $19,738,364 Expended to September 30, . 2QQQ Committed $14,304,645 ,$5,4~3,719 The "project authorization" and "committed" figures åbove are bas~ on open contracts at September 30, 2000. No additional future financing is anticipated to complete the above projects. - 27- -.-......_' '.-.--.-----.,.< .... -..'- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 A summary of proprietary fund property, plant and equipment at September 30, 2000, follows: Land Land improvements Buildings and improvements Other improvements Utility plant in service Machinery and equipment , Construction in progress Enterprise ~ $ 2,853,234 2,829,556 4,570,238 10,064,125 61,283,229 3,443,574 7,775,642 92,819,598 (21,132,863) $ 71,686,735 Less accumulated depreciation Internal Service ~ $ 1,033,397 80,968 5,214,359 6,328,724 (2,798,663) $3,530,061 , " At September 30,2000, the City w.as cöm"mitted under utility construction contracts for approximately $509,000: '. ' 6. OPERA l"ING LEASES The City is committed under ,a lease for golf course equipment. This lease is considered for accounting purposes to be an operat\ng lease. Lease ~pense for the year ended S~ptember 30,2000 amounted to appr6?c.imately $63,652. Futu~ minimum lease payments for this lease are $59,691 and $24,871 for fiscal 'years 2001 and 2002, respectively. - 28- e CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 7. LONG-TERM DEBT The following is a summary oflong-tenn debt transactions of the City for the year ended September 30, 2000 (in thousands of dollars): Generallong-tenn debt account group: 'General obligation bonds Sale, taX revenue bon4s Certificates of obligl!tion Accrued vacation pay General obligation note payable: General long-term debt total e Enterprise Funds: Revenue bonds Less deferred amount on refunding Revenue bonds, net of deferred amount on refunding GOlf course o~ligations Water and sewer obligations Golf course certificates of obligation Aquatic Park obligations Enterprise funds total e Amortizatiòn orOiscount on 'Capital Appreciation September 30, Additions ~ Retirements 2.0.0.0 October 1, l222 $ 44,569 $ 2,720 $ 468 10,925 9,450 2,315 823 60· 229 -, - $ 65,996 $ 5,095 $ 468 ===- -====- -- $ 3,935 (747) $ $ - 3,188 4,065 2,095 580 2,370 $ 12,298 - $, - $ -==- -=-===- - 29- $ (3,455) $ 44,302 , (585) 10,340 (1,506) I 0,259 883 --º.!) , 158 $ (5;617), S 65,942 --=m ~ $ (375) S" 3,560 125 (622) (250) 2,938 (230) 3,835 (387) 1,708' (20) 560 ~ 2,244 $ (1,013) $ 11 ,285 - ===-- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,2000 Long-term debt at September 30, 200Q, consisted of the following: General Obli~ation Bonds: $3,720,000 Series 1985 Refunding and Improvement Capital Appreciation Bç>nds, discounted at 8.90% to 9.25%, due in annual installments of $620,000 through February 15,20'05; net of unamortized discount of $584,505 $ 2,515,495 $2,735,900 Se!"ies 1991 Serial Bonds due in annual installments of $125,000 through February 15,2002; interest at 6.3% ,to 9.0% 250,000 $17,450,000 Series 1992 Refunding Serial Bonds due in annuå1 installments of$l,395,OOO to $1,800,000 through February 15,2005; interest at 5.55%to 6.30% 8,459,387 $5,440,000' Series 1992 Refu~ding Capït:al ' , , ,Apprecíation Bonds discounted at 6.80% to 6.90%~ ,èiúe in annual ~nstallments of $465,000 to , $i,865,000 beginning February 15,2006 through February 15, 2009; ~et of unalJlOrtized discount of$I,912,965 3,012,647 $4,400.000 Series B 1992-A Serial Bonds due in annual installments of$190,OOO to $21,5.000 through February 15. 2003; int~rest at 5.65% to 6.20%, 610,000 $3,865,000 Series 199.3 Serial Bonds due-in, annual installments of$160.000 to $305,000 through .February 15,2013; interest at 4.25% to 7.25% 2,940,000 $6,000,000 Series 1995 Serial Bonds due in annual installments of $300,000 to $360,000 through February 15, 2015; interest at 5.0% ~o 7.0% 5,100,000 , ,$6,015,000 Series 1996 Serial Bonds due in annual installments of $300,000 to $360,000 through February 15,2016; interest at 4.20% to 5.60% 5,400,000 $4,100,000 Series 1997 Serial Bonds due in annual installments of $205,000 through February IS, 2017; interest at 5.10% to 7.0% 3,485,000 -30 - . -.----..--.....----.-- ---- e CITY OF NORTH RlCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,2000 $5,455,000 Series 1997 Refunding Serial Bonds due in annual installments of $55,000 to $670,000 through February 15,,2012; interest at 4.25% to 5.13% 5,395,000 $2,9] 0,000 Series] 998 Serial.Bonds due in annual installments of$145,OOO through February 15,2018; interest at 4.75% to 5.50% '2,610,000, , $1,919,000 Series 1999 Serial Bonds due in annual installments of$100,OOO to $105,000 through February IS, 2018; interest ~t 4.25% to 5.75% '$2,720,00,0 Series 2000 Serial Bonds due in ann~1 installments 0£$135,OOO to $140,000 beginning February IS, 2001 through February IS, 2020; interest at 5.50% to 6.50% . 1,805,000 2,72Q,OOO $ 44,302,529 , S~les Tax Revenue Bonds: e .. , , , $7,500,000 Series 1992 Sales Tax Revenue Bonds , due in annual i~stallments of$340,OOO td$63.0,ØPO , 'through September I, 2012; interest af ~.75% to' 8.60% ',$ 5,645,000 $3,895,000 Series 1994 Sales Tax. Revenue Bonds -due in ' annual installments of $165,000 to $330,000 through September t, 2013; interest at 5.30% to 8.30% 3,] 20,000 $2,000,000 Series 1995 Sales Tax Revenue Bonds due in annual, installments of $1 05,000 through September 1, 2015; interest at 5.25% to 7.25% 1,575,000, $ 10,340,000 e - 31 - ..~_. .-._-~~_._-- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 Certificates of Obligation: $900,000 Series 1992 Revenue Çertificat~s of Obligation due in annual installments of $40,000 to $45,000 through February 15,2003; interest at 5.65% to 6.20% , , $1,] 50,000 Series 1996 Revenue Certificates óf Obligation due in annual installments of $40,000 to $95,000 ,through February 15,2016; interest' at 5.25% to 7.25% $ 125,000 1,040,000 $2,] 55,000 Series 1997 Revenue Certificates of Obligation due in annual install~ents of $50,000 to $350,000 through February 15, l"017; iilter<:?st at 5.0% to 7.0%' , $3,203,000 Series 1998 Revenue Certificates 'of Obligation due in annual installments of$300,000 to $690,000 through Feb!11ary 15,2018; interest at 4.75% to 5.13% $3,560,000 Series '1999 Revenue Certificates ofObligati~Ìl ' due in annual installments of $175,000 to $180,000 ~rough , February 15,2019; interest a~ 4.375% tò 5.375~ $2,315~000 Series 2000 Revent,le Certificates of Obligation' , due in ,annual instaIJments of$115,0~O,to $120,000 beginning Febru,ary ]5, 200]th,rough February 15,2020; interest' at 5.50% to 6.50%, 1,315,000 2,083,840 3,380,000 2,315,000 $ 'I 0,25,8,840 ' General Obligation Note Payable: ,'$615,000 note payable, secured by future ad valorem . tax revenues, due in monthly installments of $7,043, including interest at 6.69%, through' September 2002 $ 157,884 Revenue Bonds: $5,135,000 Series 1996 Waterwork~ and Sewer System R~venue Refunding Bonds due in annual installments of $390,000 to $505,QOO through February 15, 2008; interest at 4.125 % to 5. 10%, net of deferred amount ftom refunding of $622,285 (see note 13) $ 3,560,000 - 32- ...----.------.--'^" ·___..__"u_"._. ___ ~ CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000. e Golf Course Obligations: .$4,870,000 Series 1991 Tax and Golf Course Revenue Refunding Bonds due in annuaJ in'stallments of $245,000 to $470,000 through September 1,2011; interest at 6.0% to 7.0% $3,835,000 $600,000 Series 1997 Certificates of Obligation due in annual , , 'installments of $20,000 to $50,000 through February IS, 2017; interest at 5.0% to 7.0% $ 560,000 Water and Sewer Obligations: $2,4~2,OOO Series 1998 Revenue Certificates of Obligation due in annual installments of $36,020 to $386,620 through February 15,20]8; interest at 4.75% to 5.13% $ ],706,760 . 'Aquatic Park Obligations: . $2,495,000 Series 1998 Revenue Certificates of Obligation due in , annual installments of$123,109 to $125,.160 through February 15~. 2018; interest at 4..75% to 5.13% $ 2,244,679 e - 33- ~_........-------- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 The fut!Jre annual requirements to amortize all debt outstanding as of September 30, 2000, follow: General Sales Tax Certificates . Obligation , Fiscal General Revenue' , of Note Year Obligation ßm!g Obligation Payable 2001 $ 5,775,124 $ 1,2~6,373 $ 1,407,975 $ 84,514 2002 5,700,305 1,200,340 1,344,461 ,84,5 14 2003 5,643,865 1,193,2-93, 1,020,110 2004 5,611,329 1,185,940 949,061 2005 5,5'54,025 1,181,703 923,900 2006-2010 20,304,446 5,848,398 4,058,160 2011-2015 10,122,482 3,003,664 3,301,711 2016-2020 2,369,214 1,921,275 61,080,789 14,829,709 14,926,653 169,028 , Less applicable interest (16,778,260) (4,489,709) (4,667,813) (11,144) Total $ 44,302,:529. ' $ 10,340,000 . $ 10,258,840 $ 157,884 - 34- - _..~,.,_.._-.--~._._._------_. .- CITY OF NORm RlCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 e Water and Aquatic Golf Course Sewer ?~k Revenue Certificates of Golf Course Obligations Obligation ~ Oblieation Obligations Thml $ 463,510 $ 234,688 $ 557,910 $ 49,583 $ 506,570 $ 10,2915,246 443,696 ' 228,273 560,750 48,383 510,890 10,121,612 423,881 221,859 557,300 52,258 508,665 9,62'1,231 " 63,036 215,444 557,750 51,008 510,185 9,143,753 61 ;159 209,030 532,28Ò 49,158 , 510,085, 9,011,939' 277,909 , 94~,840 1 ;596,875 252,326 2,545,840 35,833,793 23~,240 .793,751 255,275 502,900 ' 18,212,023, 116,164 397,025 1 00,360 4,904,037 . 2,081,594 3,249,910 4,362,865 858,951 5,595,135 lO7,154,634 (37~,834) (1,005,231) (802,865) (298,951 ) (1,760,135) (30,188,942) $1,706,760 ,$ 2,244,l?79 $ 3,560,000 $ 560,000 $ 3,83~,OOO $ 76,965,692 . .' e - 35- , CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 The Sales Tax Revenue Bonds' are special obligations of the PRD (see Note 1 (a)) and are secured by a lien on and pledge of the gross sales tax revenues received from a II2 of 1% local sales and use tax levied within the, City, which sales and use'tax was approved and authorized at an election held within the City on August 8, 1992 for the benefit ofthe PRD. The Golf CC?urse, Aquatic and Water and Sewer Obligations are direct obligations of the City, and are payable both as to princípal and intex:est from an ad valorem tax levied against all taxable propertY within the limits prescribed by law and a pledge of the net revenues recèived by eaèþ fund. It is the , ,intent of management to repay these obligations from the net revenues of the pròprietary funds. Therefore, the debt is. reflected as ~ fUnd ob]jga~ion in each individ~al fund. , , The ordinances aµthorizing the issuance of Waterworks and ,Sewer System Revenue Bonds created the Interest and Sinking Fund and Reserve Fund. The gros~ revenues of the waterworks and sewer system, after deduction of reasonable expenses of operations and maintenance, are pledged to such fulids in amounts equal to the total annual principal and interest requirements of the bonds and amounts required to maintain the Reserve Fund. At September 30, 2000, the City w!l5 in compliance with these requirements. In the current year, the City issued $2,315,000 of Series 2000 revenue certificates of obligation to be repaid beginning February 2001 through Febru¡¡ry 2020. In addition, the City issued $2,720,000 of ' Series 2000'Genèral Obligation Bonds to be repàid beginning February 15~ 2001 through februt;lry 15, :Z020. .", , , , . , : " In 'p~ior years, the City defeased certai":l general obligatiò~ bonds, revenUe bonds and 'gölf cours~ obligations by placing the proceeds of the new bonds in an irrevocable, trust to provide for all future dl., service payments on the old bonds. Accordingly, the trust account assets ,and the liability for the defeaseçl bonds are not included in the CÎty's financial sta,tements. At September 30,2000, $6,865,000 of bonds and obligations outstanding are con~idered defeased. 8. EMPLOYEES' RETIREMENT SYSTEM' (a) Plan Description The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory, defined benefit plan in the state-wide Texas Municipal Retirem~nt System (TMRS), one of731 administered by TMRS, an agent multiple-employer public employee retirement system. TMRS issues a publicly-available annual financial report that may be obtained by writing to TMRS, P.O. Box 149153, Austin, Texas 78714-9153.' ' , Benefits depend upon the sum of the employee's contributions to thèplan, with interest, and the Òty-financed monetary cr~dits, with interest. At the date the plan began, the Ciry' granted monetary credits for service rendered before the plan began of a theoret~cal amount equal to two times what would have been contril:!uted by the employee, with ,interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (iOO%, 150% and 200%) of the employee'!) accumulated contributions. In addition, the City can grant as often as annually another type of 1J10netary credit referred to as an updated service credit which is a theoreticá1 amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions - 36 - ' ---...-,--..--- e ~ CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 accumulated with interest if the current employee contribution rate and City matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as ifthe sum of the employee's accumulated contributions with interest and the employer-fi.nanced monetary credits with interest were used to purchase an annuity. Members can retire at ages 60 and above with 10 or more years of service or with 25 years of service regardless of age. The plan also provides death and disability benefits. A member is vested , after 10 years. The plan provisions are adopted by the City Council, within the options available in the state statutes governing TMRS and within the actuarial constra,ints also in the statutes. (b) Contribution ' e The contributi()n rate for employees is 7%, and the City's matching percent is currently 2 to 1, both as adopted by the City Council. Under the state law governing TMRS, the actuary annuaUy cietermines the City contribution rate. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent Qfpayroll from yeM to year. The nonnal cost contribution rate finances the currently accr.uing monetaìy credits due to the City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal èOst contribution rate'is the actuarially determined percent öf payroll necessary to satisfy the obligation of the City to-each employee at the time his retirement becomèséffectiye. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-'year amortization period. When the City periodically adopts updatèd servièe credits' and increases in annuities in effect, the Increased unflinded actuarial liability is to be amortized over a new 25-year period. Currently, the unfunded actuårialliability is being amortized over the 25-year open period which began Jaimary 1997. The unit credit actuarial cost method is used for determining the City , contribution rate. Contributions are made monthly by both employees and the City. Since the City needs to know itS contribution rate in advance to budget fór it, there is a one-year delay between the actuari;,¡.l valuation that is the basis for tl1e rate. and the calendar year when the rate goes into effect.' " , . The City's contributions to the plan were $2,422,? 19,$2,340,475 and $2,154,791 for the years . ended September 30, 2000, 1999 and 1998, respectively, in accordance with actuarially determined requirements. Contributions by the City were 12.55% for the months in calendar year 2000 and 13. 19%for the months in calendar year 1999. The total covered payroll in the current fiscal year was $19,086,058. ' e - 37- CITY OF NORTH RlCHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 The annual actuarial valuation is performed to determine the adequacy of current contribution rates, to describe the current financial condition of the Plan and to analyze changes in the Plan's condition. Significant assumptions used in preparation of that valuation are as follows: Valuation date Actuarial cost method Amortization method . Remaining amórtization period Assét valuation method Actuarial assumptions: Investment rate ofreturn* , Project salary increases December 31,1999 Unit Credit Level Percent of Payroll 25 years - open period Amortized Cost December 31, 1998 Unit Credit Level Percent of Payroll 25 years - amortized cost Amortized Cost 8% None 8% None * includes inflation and cost of living adjustments at 0%. Annual pension cost and percentage of pension cost contributed are ~ follows: Annual Pension Cost Percentage Contributed NPO at Year End Year Ended , September 30, 1999 September 30, 1998 , September 30, i 997 $2,422,7 i 9 2,340,475 2,154,791 100% '100% 100% 9. WATER AND SEWER CQNTIµCTS 'The City has severaf individual cOf!tra,cts with the City of Fort Worth (Fort Worth) a~Q the Trinity River. ' Authority of Texas (TRA) for the purchase Ç>ftreated water and foJ' the transportation, treatment and 'disposal of sanitary sewage and 'other waste. The initial terms of the contract$ range from twenty-one to forty-eight years and expire at various dates from 1999 through 2,Ö23. While the provisions of e.ach of the contracts vary, each contract basically requires the City to pay varying amounts baSed on the costs associatèd 'with water purchased and sewage transported, treated and disposed of. The cost includes the City's proportionate share of Fort Worth's and TRA's operating and maintenance expenses, related debt service costs plus certain other miscellaneous charges. None of~ese debt service costs are included in the general debt service fund expenditur,es. Purchases of treated water and cþarges for the tran,sportation, treatment and disposal of sew~ge and other wast~~ <Juring 2000 and 1999 amounted to appro~imately $7,671,103 and $6,372,815, respectively. - 38- ~ .. e e CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 10. CONTRIBUTED CAPITAL The following is a summary of changes in contributed capital for the City's enterprise funds. The internal service funds' contributed capital had no changes during the year: Water and ~ Balance at beginn.ing of year $28,675,581 Contributions from developers 2,631,029 Balance at end of year $ 3] ,306,610 11.' COMMITMENTS AND CONrINGENCIES Total 'Enterprise Course Go]f Aquatic Park Funds $ ],882,372 $ 8,855,695 $39,413,648 2,631,029 $1,882,372 $ 8,855,695 $ 42,044,677 The City has participated in a number of State and Federally assisted grant programs. These programs ar¢ subject to financial and compliance audits by the grantors or their representatives, the purpose of which is to ensure compliance 'WItb conditions precedent to the granting of funds. City management :beJieves that any liability'for reimbursement which may arise as the result of these audits would Dot IÌ1~teriany affect the City's finanCial pos~tion. The, City is a defendant in several lawsuits, primarily for general liability claims. City management believes that ultimate liability on these suits, if any, will not materially affect the City's financial position. ' "In 1995, the U.S. Environmental Protection Agency (BPA) issued an Ad¡;ninistTative Order requiring improvements to the City's wastewater col1ection system to avòid wastewater,overflows. The City spent approximately $650,000 through fiscal year 1998 on a study to determine necessary corrective action. The study's findings and proposed corrective à-ctiòIiwere presented to and approved by the EPA in February 1998. The recommended improvements of an estiffiated$3,228,200 will be paid oVer a five-year period on a pay-as-you-go bask In April' 1998, the City approved a contract wi~ Cårter & Burgess, Inc. for engineering serv~ces in the amourit of $300,00,0 for thè wastewater rehabilitation , project The Priority I phase of the construction project was cömpleted by November 30, 2000,and the Priority 2 phase mustbe'completedby'April 1,2003. ' The City is exposed to various risks of loss' telated to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The City has historicaJly retained these risks except for fire coverage on buildings and contents, general liability insurance on the water park and life insurance coverMe. The amount of insurance claim settlements did not exceed the City's insurance coverage for the past three fiscal years. Additionally, there has been no reducti,on in insurance coverage from, coverages in the prior year. Under its current stop loss policy, the City. pays medical claims up to $ I 50,000 per individual peT year and/or approximàtely $3,124,608 per year in the aggregate. The Self-Insurance (Internal Service) Fund covers medical expenses, workers' compensation, automobile liability and general liability claims. The Self-Insurance Fund charges the other funds premiums to cover such claims (note 1(0». The Self-Insurance Fund's accrued liabilities at September 30,2000 include an estimate of the eventual loss on claims arising prior to year end. Liabilities are reported ,:"hen it is e - 39- CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,2000 probable that a loss has occurred and the amount of the loss can be reasonably estimated. This determination is based on reported pending claims, estimates of daims incurred but not yet reported, actuarial reports and historical analysis. Changes in the balances of claims liabilities during the past two years are as follows: 2000 1999 Unpaid claims, beginning of year Incurred claims (including IBNR) C,laim expense $ 447,320 2,148,552 , (2,862,257) $ 666,710 2,573,920, (2,793,310) Unpaid claims, end of year '$ (266,385) $, 447,320 The City has a contract with a management company for operations of the city-owned public golf co~rse. 'The contract expired Oct~ber 2000. In addition to monthly mart~gement fees, a contingent management f~e is owèd if the golf course rev~nUès exceed a certain amount that varies from year to year. Contingent management fees incurred for 2000 were approximately $80,800. Total management fee~ for operations were approx¡matel~ $86,950 for,the year ended Sèptember 30,2000. -. . . . . ' In Octo~er 2000, the' CitY extended the contr~ct for five years. Under the new agreement, a contingent ' fe.e will be based on the level of customer service and Ç>ther p~rforma.l1ce measures' developed With the, City's Vision Statement and Goals in mind. The City may terminate this contract anytime after Deèembe~ I, 2003. 1~. . DEFERRED COMPENSATION PLAN The CiJY offers'its employees a deferred compensation plan (the Plan) c~eated in accordance with Internal Revenue Code Section 457. The Plan is administered by Public Employees Benefit Services : Corporation. In 1998, the City implemented the.requirements ofGASB No. 32~ Accounting and , R;eportingfor Intern(liRevenu.e Code Section 457 Deferred Compénsation Plans. In åccordance with , this ~tatement ançl recen~ tax law changes~ the qity h~ amended its trust agreef!lents which estabJish that all assets and income of the trust are for the exclusive benefit of eligible employees and t~1eir beneficiaries. Due to the implementation ~fthese changes, the City does not have any fiduciary responsibility or administrative duties relating to the deferre(icompensation plan other than remitting employees' contributiol1s to the trustees. Accordingly, the City has not'presented the assets and Jiabilities of the Plan fn these general purpose financial statements. .. - 40- .. CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 e 13. SEGMENT INFORMATION· ENTERPRISE FUNDS The City maintains'three enterprise funds which are intended to be self-supporting through user fees charged for services rendered. The Water and Sewer Fund accounts for the operation of the City's water and sewer system that provides services to residents of the City. The Golf Course Fund acc9unts for the operations of the City's public golf course. The Aquatic Park Fllnd accounts for the operatiòns of the City's water park. Financial segment infonnation as of and for the year ended September 30,2000 is as follows: . Water Golf Aquatic and Sewer ' CQurse &!:k Thm! Operating revenues , $ 20, 182,644 $2,914,768 $ 3,058,933 $ 26, 156;345 Depreciatiçm expense 1 ,844,~59 288,319 377,072 2,509,950 Operating income 3,049,881 645~333 ' 476,187 4,171,401 , Operating transfers, in 28,800 28,800 Operatihg transfers out (812,274) (34,683) , (846,957) Ne.t income 2,681,360 386,786 438,715 3,506,861 Capital contributions 2,63 1,029 2,631,029 , Property, plant and equipmerit , ~dditions . 4,411,452 243,026 4,654,478 Net wor~ing capital 3,406,124 975,029 563,349 4,944,502 e Total assets 76,587,635 8,176,395 ' 13,Ö68,890 97,832,920 Bonds/obligations payable 4,S84,4~4 4,325,806 2;239,408 ' 1'I!149,668 Retained earnin'gs ' 35,899,353 928,580 . 1,843,493 ' 38,671,426 To~J equity ,67,205,962 2,810,95'2 10,699,188 80,716,102 14. INTERFUND BALANCES At September 30, 2000, interfund balances consisted of.the· followin~: Advances Due From Due to Advances to From Other Other Funds Other Funds Other Funds Funds Water and Sewer Fund $ 12,380 $ $ 431,865 $ Golf Course Fund 47,141 646,359 General Fund 34,761 505,758 Special Investigation Fund 291,264 $47,141 $ 47,141 $ 937,623 $ 937,623 Due to and due from other funds are the short-tennportion of the advances to and advances from other funds. ' e - 41 - CITY OF NORTH RICHLAND HILLS. TEXAS NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2000 15. OPERATIONS OF COMPONENT UNiTs During the priòr fiscal year, the City created the Richl8;Dd Plaza Tax Increment Financing District (TIF #1). The foHowing schedule reþresents the portion of the Series 1998 Revenue Certificates of Obligation alloCated to TIP # 1. The original issue for the amount allocated to TIF # 1 was $850,000. During the cum:nt fiscal year, the City, along.with Tammt COUIity, Tarrant County College and Tarrant County Hospital pjstrict created the Town Center Tax Increment Reinvestment Zone (TIF #2). There was no activity during the fiscal year for this TIF. The repayment term~ of the 1998 certi,ficates of obligation are as follows: , Principal Interest 2001 2002 2003 2004 ,2005 2006 and thereafter $ 42,640 42,640 47,64Q 42,640 42,640 551,400 $ 37,314 .35,129 ~2,943' , 30, 7~8 28,573 177,746 ~ 764,600 $ 342,463 Thml $ 79,954 77,769 75,583 73,398 71,213 729,146 $ 1) 07,063' , , , Th~se 111;'"'s °mee,t the'criteria for Þeing classified as discrete component units as the ,City appoints a voting majority of the organizations' governing bodies, is able to impose its'will on the organizations. and because the organizations are fiscally dependent,on th~ prirriary government. ' ****** -,42 - _._-~_.-----. , . e APPENDIX C FORM OF BOND COUNSEL'S OPINIONS e e FULBRIGHT & JAWORSKI L.L.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE, SUITE 2800 DALLAS, TEXAS 75201-2784 HOUSTON WASHINGTON, D.C AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES MINNEAPOLIS LONDON HONG KONG TELEPHONE: 214/855-8000 FACSIMILE: 214/855-8200 IN REGARD to the authorization and issuance of the "City of North Richland Hills Park And Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001" (the "Bonds") in the aggregate principal amount of $ , dated June 1, 2001, we have reviewed the legality and validity of the issuance thereof by the City of North Richland Hills Park And Recreation Facilities Development Corporation(the "Corporation"). The Bonds are issuable in fully registered form and have stated maturities of September 1 in each of the years 2001 through 2013, unless redeemed prior to maturity in accordance with applicable redemption provisions stated in the resolution authorizing the issuance of the Bonds (the "Resolution"). Interest on the Bonds accrues from their date at the rates per annum stated in the Resolution, and such accrued interest is payable on September 1 and March 1 in each year, commencing September 1, 2001, to the registered owners appearing on the registration books of the Paying Agent/Registrar on the Record Date (stated on the face of the Bonds). WE HAVE SERVED AS BOND COUNSEL for the Corporation solely to pass upon the legality and validity of the issuance of the Bonds under the laws of the State of Texas, the defeasance and discharge of the Corporation's outstanding obligations being refunded and the exclusion of the interest on the Bonds from gross income of the owners thereof for federal income tax purposes and for no other purpose. We have not been requested to investigate or verify, and have not independently investigated or verified, any records, data, or other material relating to the financial condition or capabilities of the Corporation. We have not assume any responsibility with respect to the financial condition or capabilities of the Corporation or the disclosure thereof in connection with the sale of the Bonds. We express no opinion and make no comment with respect to the sufficiency of the security for or the marketability of the Bonds. Our role in connection with the Corporation's Official Statement prepared for use in connection with the sale of the Bonds has been limited as described therein. WE HAVE EXAMINED the applicable and pertinent laws of the State of Texas and the United States of America. In rendering the opinions herein we rely upon (i) original or certified copies of the proceedings of the Corporation in connection with the issuance of the Bonds, including the Resolution, (ii) original or certified copies of the Special Escrow Agreement (the "Escrow Agreement") between the Corporation and Bank One, NA, Fort Worth, Texas (the "Escrow Agent"), and a special report of Grant Thornton LLP, Certified Public Accountants (the "Accountants"), (iii) certifications and opinions of officers of the Corporation relating to the expected use and investment of proceeds of the sale of the Bonds and certain other funds of the Corporation and to certain other facts within the knowledge and control of the Corporation, and (iv) such other documentation, including an examination of the Bond executed and delivered initially by the Corporation (which we found to be in due form and properly executed), and such matters of law as we deem relevant to the matters discussed below. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original copies of all documents submitted to us as certified copies and the accuracy of the statements and information contained in such certificates. · '¡" ... Page 2 of Legal Opinion of Fulbright & Jaworski LLP ,., Re: "City of North Richland Hills Park And Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001", dated June 1, 2001 BASED ON OUR EXAMINATION, we are of the opinion that, under applicable law of the United States of America and the State of Texas in force and effect on the date hereof: 1. The Bonds have been duly authorized by the Corporation in compliance with the Constitution and laws of the State of Texas now in force, and the Bonds issued in compliance with the provisions of the Resolution are valid and legally binding special obligations of the Corporation, in accordance with the terms thereof, and, together with the outstanding Previously Issued Bonds (identified and defined in the Resolution), are payable solely from and 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 local sales and use tax levied for the benefit of the Corporation in the City; except to the extent that the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the exercise of judicial discretion in accordance with general principles of equity. The Resolution provides certain conditions under which the Corporation may issue additional obligations payable from the same source and secured in the same manner as the Bonds. e 2. The Escrow Agreement has been duly authorized, executed and delivered and is a binding and enforceable agreement in accordance with its terms and the outstanding obligations refunded, discharged, paid and retired with the proceeds of the Bonds have been defeased and are regarded as being outstanding only for the purpose of receiving payment from the funds held in trust with the Escrow Agent, pursuant to the Escrow Agreement and in accordance with the provisions of V.T.C.A., Government Code, Chapter 1207. In rendering this opinion, we have relied upon the verification by the Accountants of the sufficiency of cash and investments deposited with the Escrow Agent pursuant to the Escrow Agreement for the purposes of paying the outstanding obligations refunded and to be retired with the proceeds of the Bonds and the interest thereon. 3. Pursuant to section 103 of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), and existing regulations, published rulings, and court decisions thereunder, and assuming continuing compliance after the date hereof by the Corporation with the provisions of the Resolution relating to sections 141 through 150 of the Code, interest on the Bonds will be excludable from the gross income, as defined in section 61 of the Code, of the owners thereof for federal income tax purposes, and such interest will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals for federal income tax purposes. Interest on all tax-exempt obligations, such as the Bonds, owned by a corporation (other than an "S" corporation or a qualified mutual fund, real estate mortgage investment conduit, real estate investment trust, or a financial asset securitization investment trust) will be included in e such corporation's adjusted current earnings for purposes of calculating the alternative minimum taxable income of such corporation. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code is computed. Page 3 of Legal Opinion of Fulbright & Jaworski LLP Re: "City of North Richland Hills Park And Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 ", dated June 1, 2001 WE EXPRESS NO OTHER OPINION with respect to any other federal, state, or local tax consequences under present law or any proposed legislation resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, "S" corporations with subchapter "C" earnings and profits, owners of interests in a financial asset securitization investment trust, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. EHE:dfc .. ') .1a e APPENDIX D SPECIMEN BOND INSURANCE POLICY e e 38 Exhibit /1 Financial Guaranty Insurance Company 115 Broadway New York, NY 10006 (212) 312-3000 (800) 352-0001 - .Ff;l( ~. A GE Capital Company Municipal Bond New Issue Insurance Policy Issuer: Policy Number: Bonds: 0010001 Financial Guaranty Insurance Company (~'Fin a& "), a New York stock insurance company, in consideration of the payment of the premiu 0 the terms of this Policy, hereby unconditionally and irrevocably agrees to pay to State Stre a Trust Company, N.A., or its successor, as its agent (the "Fiscal Agent"), for the benefit of BondS ' that portion of the principal and interest on the above-described debt obligations (the "Bonds") which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest becomes Due for Payment or on the Business Day next following the day on which Financial Guaranty shall have received Notice of Nonpayment, whichever is later. The Fiscal Agent will disburse to the Bondholder the face amount of principal and interest which is then Due for Payment but is unpaid by reason of Nonpayment by the Issuer but only upon receipt by the Fiscal Agent, in fonn reasonably satisfactory to it, of (i) evidence of the Bondholder's right to receive payment of the principal or interest Due for Payment and (ii) evidence, including any appropriate instruments of assignment, that all of the Bondholder's rights to payment of such principal or interest Due for Payment shall thereupon vest in Financial Guaranty. Upon such disbursement, Financial Guaranty shall become the owner of the Bond, appurtenant coupon or right to payment of principal or interest on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including the Bondholder's right to payment thereof. This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason, including the payment of the Bonds prior to their maturity. This Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bond. As used herein, the tenn "Bondholder" means, as to a particular Bond, the person other than the Issuer who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof. "Due for Payment" means, when referring to the principal of a Bond, the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption). acceleration or other advancement of maturity and means, when referring to interest on a Bond, the stated date FGIC is a registered service mark used by Financial Guaranty Insurance Company under license from its parent company. FGIC Corporation. Form 9000 (10/93) Page 1 of2 ... I,.;a. e Financial Guaranty Insurance Company 115 Broadway New York, NY 10006 (212) 312-3000 (800) 352-0001 - .Ff;l( :. A GE Capital Company e e Municipal Bond New Issue Insurance Policy for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer to have provided sufficient funds to the paying agent for payment in full of all PrinciP~l d interest Due for Payment on such Bond. "Notice" means telephonic or telegraphic notice, SUbSeqUeæ ed in writing. or written notice by registered or certified mail, from a Bondholder or a pa~' g or e Bonds to Financial Guaranty. "Business Day" means any day other than a Saturday. S~, 0 on which the Fiscal Agent is authorized by law to remain closed. r \ In Witness Whereof, Financial Guaranty hRG ~oliCY to be aftlxed with its corporate seal and to be signed by its duly authorized officer in ~~ 'Mecome effective and binding upon Financial Guaranty by virtue of the countersignature of its duly au:!!)! ed representative. &~~ "L /~;I ~ ~. '.J President Effective Date: Authorized Representative State Street Bank and Trust Company. NA, acknowledges that it has agreed to perfonn the duties of Fiscal Agent under this Policy. 4ry~ Authorized Officer FGIC is a registered service mark used by Financial Guaranty Insurance Company under license from its parent company. FGIC Corporation. Form 9000 (10/93) Page 2 of 2 Financial Guaranty Insurance Company 115 Broadway New York. NY 10006 (212) 312-3000 (800) 352-0001 - .Ff;l( :. A GE Capital Company Endorsement To Financial Guaranty Insurance Company Insurance Policy Policy Number: con,,:~r: 0010001 It is further understood that the term "Nonpayment" in r~~ ond includes any payment of principal or interest made to a Bondholder by or on behalf of th~~~ s ch Bond which has been recovered from such Bondholder pursuant to the United States BanI<'j)t~e by a trustee in bankruptcy in accordance with a fmal, nonappealable order of a court ha~ ~p~ jurisdiction. NOTHING HEREIN SHALL BE CONS1;)JED TO WAIVE, ALTER. REDUCE OR AMEND COVERAGE IN ANY OTHER SECTION OF THE POLICY. IF FOUND CONTRARY TO THE POLICY LANGUAGE, THE TERMS OF THIS ENDORSEMENT SUPERSEDE THE POLICY LANGUAGE. In Witness Whereof, Financial Guaranty has caused this Endorsement to be afl1xed with its corporate seal and to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial Guaranty by virtue of the countersignature of its duly authorized representative. u·¿~ ~~ /~-""I ~. ~J "" . J President Effective Date: Authorized Representative Acknowledged as of the Effective Date written above: ~~ Authorized Officer State Street Bank and Trust Company, N.A., as Fiscal Agent FGIC Is a registered service mark used by Financial Guaranty Insurance Company under license from lis parent company. FGIC Corporation. Form E-0002 (10/93) Page I of 1 . . . .. CITY COUNCIL SUGGESTED MOTION FOR BOND AUTHORIZATION: (Agenda Item No.7 - GN 2001-043) I move to adopt Resolution No. 2001-034 approving Resolution No. FDC2001-01 of the North Richland Hills Park and Recreation Facilities Development Corporation authorizing the issuance and sale of its "Sales Tax Revenue Refunding Bonds, Series 2001" in the aggregate principal amount of $7,305,000 at a true interest cost rate of 4.5473803%. CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Department Council Meeting Date: OS/29/01 Subject: Request from Lawrence Cates & Associates for Site Plan Agenda Number: PZ 2001-05 Approval of a proposed Walgreen's Pharmacy within 200 feet of residential property on Lot 3R, Block 1, Smithfield Corners Addition. The property is located at 6350 Davis Boulevard. CASE SUMMARY Lawrence Cates & Associates have submitted a request for Site Plan Approval of a Walgreens Pharmacy with drive through located within 200 feet of residentially zoned properties. The subject parcel is known as Lot 3R, Block 1, Smithfield Corners Addition and is located at 6350 Davis Boulevard (southeast corner of Davis and Mid-Cities Boulevards). The following elements characterize the site plan. . The subject tract is 1.99 acres in size and is zoned C1 Commercial. · The site plan shows ingress/egress points from both Davis and Mid-Cities Boulevards. The proposed access to/from Davis Boulevard is of a right-in/right- out design. · The proposed pharmacy building is single story (with the exception of a two- story entryway feature) and 14,490 square feet in size. A drive-through for the pharmacy is provided along the building's south side. Building construction is of 100 % masonry materials as required by ordinance. The roof is a flat design with parapet walls except for pitched standing seam roofing on the two-story entryway and drive-through portico. The building does meet the city's building articulation standards. · Parking regulations require a minimum of 73 spaces. The plan exceeds these requirements by providing a total of 80 spaces including 4 spaces required for handicapped. · Compactor and trash dumpster receptacles are provided along the rear of the building. Both enclosures are screened with brick walls and wooden gates per ordinance requirement Source of Funds: Bonds (GO/Rev.) Operating Budget Other Finance Review Account Number Sufficient Funds Available Finance Director J 0 V\V\ ~ìt~+1Gk.. @ Department Head Signature '~ L:\Cases\PZ Cases\Cover Sheet CC,doc Pace 1 of 1 "'~ ,"c.'- ._.,..... ....<...... .___~.;.; .~.;_ CITY OF NORTH RICHLAND HILLS · The plan proposes one 7' by 10' (50 sq. ft. message board area) monument sign. The sign will be located near the intersection of Davis and Mid-Cities Boulevards. · The site has residential adjacency along the southern-most boundary. A 15' irrigated landscape buffer (with one tree) and 6' masonry screen are required. The plan meets these standards. · Landscape regulations require a minimum of 15% of the site to be landscaped (13,089 sq. ft. in this situation). The site plan exceeds this requirement by providing 19,900 sq. ft or 22.8%. · Landscape setback requirements along Davis and Mid-Cities Boulevards are satisfied. . Proposed tree and shrub plantings satisfy ordinance requirements. Staff has the following comments concerning the proposed site plan. Public Works: 1. The right in-rightlright-out approach and sidewalk locations will be subject to staff approval. The current configuration does not match the latest plans submitted by Washington & Associates. Planning: 1. A minimum 8"of masonry materials are required on all sides of the monument sign message board. 2. A replat of the site is necessary and will need to be approved and filed with the county prior to permits being issued for this project. RECOMMENDA TION: The Planning and Zoning Commission met on May 10, 2001 and voted 6 to 0 to approve PZ 2001-05 subject to comments from the Public Works and Planning and Inspections Departments. CITY COUNCIL ACTION ITEM Document6 Page 2 of 2 16 TR.2C 13 14 17R I ,h "'.:'::: '; .' :..~:':';: ~ I {ß~§~§f. ,.., ..>.::':.:::: ,:.,..:.' .::':.. .<;.,,:...j-:;:::-:::::.~.::::: ¡ :1 ,.., I ,: ~'tSiE.~:;) ¡ :/ t:. -::> . I ;',' ---=:~~ ," ... ......'... ...'.....7".. ...,..,... ..... ~~ A(l\t.../ ¡ I í r\ ø·-;;;- 22 , ~ , ( -I \ 1 J \ J. --/ '\ ~ ""'. ,',,,, .1; 11 12 15 16 TR.4 5.443a I···....·..· '" f ~ t TR 5C3 ;: . 723 AC ~ TR 581 ~,--- ;: .---' ! .4B2 AC__- ~---- .._........_.._.._............~,.....- ......-...........-.....---.......".-..... . TR 5Cl 2.368 AC ---- - ----- -.~-- '.,'.'; . ;,";. . .. .'. .... .. . . . ....... . ;.....'--. ... .... ..... . ..:.... :..... '...;. ....... 'r ..... TR 58 1. 526 a -----------'\ -------) / / I I , , I I /' I TR 5 I .7,6 A / / TR 5C 1 . 134 a .------- ~--- -' -- -- ~.._._---- j < ~ - j i 1. TR 5A 3 AC / I I , I ,- I .,+'j :~ I / TA.5D 1.2 AC j ! i I TR. 4A3 ¡ 4A5C 4A 8 ....--- .::-q~~~~ , ¡ ~. TR04A38/ " 1 r, A ..............-- I / / I / I. / / . ':,,'j: / 1/ ,.:.,~ .'~ / .')',/ ',' ,,:/ / 1/ I I I / I I I I I / I I II / I I / I / / / / I I I ( / \~ ~ .,:C ''-,- 1.,1 . .~,;.'" ··~.A-:....,'-. / / H~~Æ~Æ~ :....,.::.:.:; ;'-";,"'-.,;'. . ::..' TR.6MA 2.081 PZ 2001-05 SITE PLAN WALGREENS MIDCITIES/DAVIS .:...'"..... ....,'(~ TR. 68 .39 AC TR.6D 4.45 AC 2 TR 6C2 3.2121 AC 4 ,-. .. ...., : .-: ..... : :' ...: f " : 13 TR.6M 9.67 AC ! i::':!":':j:"~, ........... ···n..,.",· TR 8A2 · · · Mr. Blue, seconded by Mr. Laubacher, motioned to approve PS 2001-06. The motion carried (6-0). 6. PZ 2001-05 CONSIDER A REQUEST FROM LAWRENCE CATES AND ASSOCIATES FOR SITE PLAN APPROVAL OF A WALGREEN'S PHARMACY LOCATED AT THE SE CORNER OF DAVIS AND MID-CITIES BOULEVARD. APPROVED Cathy Horton gave a brief summary of the case stating the property as being zoned C-1 Commercial. Lawrence Cates & Associates submitted a request for Site Plan Approval of a Walgreen's Pharmacy with drive through located within 200 feet of residentially zoned properties. Public Works has a concern about the right-in/right out approach and sidewalk locations in that the current configuration does not match the latest plans submitted by Washington & Associates. This will be subject to staff approval. Planning stated that à minimum 8" of masonry materials are required on all sides of the monument sign message board, and a re-plat of the site is necessary and will need to be approved and filed with the county prior to permits being issued for the project. Staff recommended approval subject to the comments from the Public Works and Planning Departments. Mr. Welch, seconded by Mr. Blue, motioned to approve PZ 2001-05 subject to the staff comments. The motion carried (6-0). Page 3 5/10/01 P & Z Minutes · CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Department Council Meeting Date: OS/29/01 Subject: Appeal Request for Public Hearing to Consider the Agenda Number: PZ 2001-06 Request of James M. Wilson for a Zoning Change from R2 Single Family Residential to PD Planned Development for the expansion of an adjacent automobile dealership. The Property is located at 4705 Susan Lee Lane and is known as Lot 20, Block 5, Richland Terrace Addition. Ordinance # 2554 CASE SUMMARY Mr. James M. Wilson has submitted an application for a planned development at 4705 Susan Lee Lane. The site will be utilized as an expanded display area for the adjacent Huggins Honda Dealership. The Texas Department of Highways is expected to improve NE Loop 820 in the near future and approximately 30' of right-of-way will be needed from the frontage of the existing dealership. The single-family residential structure currently on the site of this zoning request will be removed and the adjacent vehicle display area will be expanded in its place. Traffic and Access -The existing residential driveway will be removed and replaced with landscaping. All access to the proposed display area will be from the existing dealership. No access is proposed from Susan Lee Lane. Parking - The site will be utilized as expanded display area for new automobile sales. The plan notes that no vehicle display ramps will be permitted. Signage - No signs, flags, or banners will be permitted on the site. Landscaping - The zoning ordinance requires a 15' irrigated landscape buffer (including one large tree per 50 linear feet) along the northern property line where residential adjacency exists. Also, a 15' irrigated landscape setback (including one large tree per 50 linear feet) is required along the Susan Lee Lane frontage. The plan notes that no landscape buffer is proposed along the northern property line. A 5' landscape setback with one large tree and bermuda grass is proposed along the Susan Lee Lane frontage. The plan does not indicate if the setback is to be irrigated. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget Other Account Number Sufficient Funds Available Finance Director ,.-1(J~ ?ii··s+-1c.K Department Head Signature @) riM ..~ J aty Mana , gnatu,. L:\Cases\PZ Cases\Cover Sheet CC,doc Paoe1af1 ... CITY OF NORTH RICHLAND HILLS Screening - 6' masonry, screening wall is required by ordinance along the north property line. The plan proposes a 6' brick wall (constructed according to city standards) along this boundary. Lighting - The plan proposes three, 15', hooded, light standards. Two of the lights are located at the northeast and northwest corners of the lot, adjacent to residential zoning/uses. A third light is proposed near the southeast corner of the lot across the street from residential uses. The plan notes that all lights will be directed away from residential areas. Comprehensive Plan - The proposed 1992 Comprehensive Plan Update (recently recommended for approval by the Commission) recommends low-density residential uses for the site and surrounding areas along Susan Lee Lane. The proposed zoning/use is not consistent with this depiction. The Plan, however, also recognizes the subject tract and surrounding areas as being situated within a Strategic Planning Area identified as the Freeway Business District. In this area the Plan encourages both the retention and expansion of existing businesses. To facilitate this, the Plan suggests that the city investigate the potential long-term redevelopment for the Richland Terrace neighborhood. This includes assisting the neighborhood in achieving a buyout plan for redevelopment purposes. To that end, the Plan suggests that future transitions of land uses along the Freeway encompass a minimum of 25 acres of land in order to avoid or minimize curb cuts, provide for shared access and logical geographic development of the area while avoiding piecemeal development patterns. Requested Variances - Variances under this Planned Development site plan include: · No landscape buffer along the northern property line (rather than the 15' required). · 5' landscape setback along the Susan Lee Lane frontage (rather than the 15' required). · 5.5% of the lot to be landscaped (rather than the 15% required). RECOMMENDATION During the public hearing on May 10, 2001, there was considerable opposition from the adjacent neighbors on Susan Lee Drive. It was Staffs opinion that deliberation focused on piecemeal development and retail encroachment into the neighborhood as well as impacts on property values. The Planning and Zoning Commission voted 6 to 0 to recommend denial of PZ 2001-06. A number of letters and a petition of opposition to the request are attached. Staff has reviewed the letters of opposition and has determined that an override vote of the Council is not required. ,...TV ,..,... ...."" .A "T.,..... 'Tr=.. ~j' .&....., --......-- >- llR I I .- 17 ~ l8R i 87 19R 2rtJR ~ 33R ,.... ,. 2B 7.rtJ\1 AC li;.m lRB 1 . 38589 a ~ :t " 19 ..18 '........ ''''''- ) ! '-" / ~'- /;~ / " / ,¡,., ;' ........../ "" (" ,> \~ ..... ,........ ":s> ............. .....::. .....,"" ................. .. " .(°0,0 c9 -20 "- ',,- ..........." '-" '-...... PZ 2001-06 4705 SUSAN LEE LANE LOT 20, BLOCK 5 RICHLAND TERRACE ADDITION .: - -\ NOpír c, HILJ-.J 0GS VIL.L- ---.¡) (-;~1Ø}V ~-~ 1 5 35A ~ ~ ,.' 100 16R I 3 \U LoLl ...J ':2. ~ :;, (/) 2li'JR 21R 22R 23R 24R .. .n.............·.·· ;:v;,. 9R IbM ,.' -,..' 2R qR l7R ..... 8R ',' lR 7R 18R 6R 3R 2R 12 \ 15 JJ.I 14 13 2 -st: 13 14 ..J \l.U 12 1 - Lù '-' ....J 11 16 -Z Iii) 17 ¿Í t./'I 18 ::J 9 V> 8 1', ì'~O Cr-\L-~ ¡Vo:¡Rx .~ ........... ................................. "', ...... .......... "', .......................... ........ 22R . . /:";: . ~.,. 'ßf1:. \::";, :;, .:;.":::',: ":, ~œr1';;/ j ~\ 18 \ No :~ ~l pIC # 0C( ~:.: :-: IRA 2Rl I,Q9331 D # 3#~~ ,...' ...... .j)./ /). ¿.-:;.- 4 2 C R '3 .,# 23R lR 24R 16 17 18 17 19 16 21 22 23 12 24 -, ------- 2 -----... -- TRACT 4R -~. '-=T' 411. IB1 ';;p 1// . . . 7. PZ 2001-06 PUBLIC HEARING TO CONSIDER A REQUEST BY JAMES M. WILSON FOR A ZONING CHANGE FROM R2 SINGLE FAMILY RESIDENTIAL TO PD PLANNED DEVELOPMENT FOR THE EXPANSION OF AN AUTOMOBILE DEALERSHIP DISPLAY AREA AT 4507 SUSAN LEE LANE. DENIED Cathy Horton gave a brief summary of the case stating Mr. James Wilson has submitted an application for a planned development at 4705 Susan Lee Lane. The site will be utilized as an expanded display area for the adjacent Huggins Honda Dealership which currently has 6 developed acres of property to the west. The single-family residential structure currently on the site will be removed and the adjacent vehicle display area will be expanded in its place. Variances under this Planned Development site plan include: 1.) No landscape buffer along the northern property line, 2.) Five foot landscape setback along Susan Lee Lane frontage, and 3.) Five and a half percent of the lot to be landscaped. Prior to the agenda being delivered to the commission, staff received several letters of opposition to this request. Among those speaking in favor was Ron Huggins of Huggins Honda. He has proposed to extend landscaping beyond what the plan reflects and asked that the request by Mr. Wilson be approved. James Wilson, owner of property located at 4507 Susan Lee, has moved from this address due to the encroachment of the commercial business and the expansion of NE Loop 820. He stated that the noise and lighting are intolerable. He asked that this request be approved so that he may sell to Mr. Huggins for the expansion. Those in opposition were: John Colby residing at 5001 Mockingbird in Colleyville, Texas, and owning rental property located a.t 4804 Susan Lee, stated that the commercial encroachment is causing a major decline in this and other neighborhoods. He suggested closing Susan Lee from NE Loop 820. Steve Hediger of 4825 Susan Lee asked the Commission to deny the request fearing the decline of the neighborhood. Starline Autry of 4800 Susan Lee asked that the commission deny the request. He is afraid that the neighborhood is going to be "pieced-out" and that the property values will go down. Eduxiges Tijenina, 4821 Susan Lee Maria and Gilberto Tijenina, 4817 Susan Lee Page 4 5/10/01 P & Z Minutes . . . - Merle Brake, 7308 Deaver Betty Trussell, 4808 Susan Lee Ann Hanes, 4812 Susan Lee Maria Burcie, 4825 Nancy Lane Jewel Garner, 4705 Nancy Lane Shirley Tiroff, 4709 Nancy Lane Lacey Wright, 4900 Nancy Lane Brandi Bosley, 4820 Nancy Lane Kim Thomas, 4824 Nancy Lane Johnny Brackett, 4800 Nancy Lane Elisa Hediger, 4825 Susan Lee Marci Foley, 4816 Susan Lee Linda Graham, 4805 Nancy Lane Chairman Bowen also recognized letters of opposition by: Billie Griffin, 4801 Susan Lee John Colby, 4804 Susan Lee Mary and Starline Autry, 4800 Susan Lee William Madsack, 4801 Nancy Lane Betty Trussell, 4808 Susan Lee Clyde Browning, 4813 Nancy Lane Mr. & Mrs. Ignacio Burcie, 4825 Nancy Lane Donna Bockman, 4804 Nancy Lane William Lee, 4821 Nancy Lane Mr. Nehring, seconded by Mr. Welch, motioned for denial of case PZ 2001-06. The motion carried (6-0). 8. ADJOURNMENT The Chairman adjourned the regular meeting at 7:53 p.m. Chairman Secretary Don Bowen Ted Nehring Page 5 5/10/01 P & Z Minutes .....-.- -- -.--..-.----- · NOTICE OF PUBLIC HEARING NORTH RICHLAND HILLS PLANNING AND ZONING COMMISSION CASE #: PZ 2001-06 4705 Susan Lee Lane Lot 20, Block 5, Richland Terrace Addition You are receiving this notice because you are a property owner of record within 200 feet of the above property. PurDose of Public Hearina: The public hearing is being held to consider a request from James Michael Wilson for a zoning change from R2 Single Family Residential to PO Planned Development for the expansion of an adjacent new automobile dealership. · Public Hearina Schedule: Public Hearing Dates: Location: PLANNING AND ZONING COMMISSION THURSDAY, May 10, 2001 CITY COUNCil TUESDA Y, MAY 29, 2001 7:00 P.M. CITY COUNCil CHAMBERS 7301 N. E. lOOP 820 NORTH RICHLAND HillS, TEXAS Time: If you have any questions or wish to submit a petition or letter concerning the above request, please contact: · Planning Department City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 Phone (817) 427-6300 Fax (817) 427-6303 L:\Property Owner NotificationlPZ\PZ 2001-06 PON.doc · CASE #: PZ 2001-06 ZONING CHANGE FROM R-2 TO PD 4705 SUSAN LEE LANE, LOT 20, BLOCK 5 RICHLAND TERRACE ADDITION The following property owners are listed in the 2000 Tarrant Appraisal District tax rolls. They fall with in 200 feet of the subject tract and have been notified. 4702 SUSAN LEE LANE RIVERCROWN INVESTMENT, LLC RICHLAND TERRACE ADDITION PO BOX 982002 BLOCK 4, LOT 5R1 NORTH RICHLAND HILLS, TEXAS 76182 NE LOOP 820 STATE OF TEXAS RICHLAND TERRACE ADDITION PO BOX 6868 BLOCK 4, LOT 5R2 FORT WORTH, TEXAS 76115 4704 SUSAN LEE LANE RIVERCROWN INVESTMENTS, LLC RICHLAND TERRACE ADDITION PO BOX 982002 BLOCK 4, LOT 6 NORTH RICHLAND HILLS, TEXAS 76182 4708 SUSAN LEE LANE WACASTER, PHILLIP ETUX GLORIA RICHLAND TERRACE ADDITION 4708 SUSAN LEE LANE BLOCK 4, LOT 7 FORT WORTH, TEXAS 76180 4712 SUSAN LEE LANE SOUDER, PEARLlE M, · RICHLAND TERRACE ADDITION 345 NORTH SHORE PLACE BLOCK 4, LOT 8 LEWISVILLE, TEXAS 75067 4800 SUSAN LEE LANE AUTREY, STARLlNE SAMPSON RICHLAND TERRACE ADDITION 4800 SUSAN LEE LANE BLOCK 4, LOT 9 FORT WORTH, TEXAS 76180 4804 SUSAN LEE LANE COLBY, JOHN RICHLAND TERRACE ADDITION 511 SOUTH MAIN STREET BLOCK 4, LOT 10 EULESS, TEXAS 76040 4801 NANCY LANE MADSACK, WILLIAM RICHLAND TERRACE ADDITION 4801 NANCY LANE BLOCK 4, LOT 22 FORT WORTH, TEXAS 76180 4721 NANCY LANE CHILDERS, RONALD KEITH RICHLAND TERRACE ADDITION 540 RS COUNTY ROAD 3446 BLOCK 4, LOT 23 EMORY, TEXAS 75440 4717 NANCY LANE RIVERCROWN INVESTMENTS, LLC RICHLAND TERRACE ADDITION PO BOX 982002 BLOCK 4, LOT 24 NORTH RICHLAND HILLS, TEXAS 76182 4709 NANCY LANE TIROFF, WILLIAM RICHLAND TERRACE ADDITION 4709 NANCY LANE BLOCK 4, LOT 25 FORT WORTH, TEXAS 76180 · . 4705 NANCY LANE GARNER, ANNIE JEWEL RICHLAND TERRACE ADDITION 4705 NANCY LANE BLOCK 4, LOT 26A FORT WORTH, TEXAS 76180 4701 NANCY LANE RIVERCROWN INVESTMENTS, LLC RICHLAND TERRACE ADDITION PO BOX 982002 BLOCK 4, LOT 27R1 NORTH RICHLAND HILLS, TEXAS 76182 NE LOOP 820 STATE OF TEXAS RICHLAND TERRACE ADDITION PO BOX 686 BLOCK 4, LOT 27R2 FORT WORTH, TEXAS 76115 4809 SUSAN LEE LANE MAUS, MARY ANN RICHLAND TERRACE ADDITION 4809 SUSAN LEE LANE BLOCK 5, LOT 16 FORT WORTH, TEXAS 76180 4805 SUSAN LEE LANE WORTHEY, SHEILA B. RICHLAND TERRACE ADDITION 4805 SUSAN LEE LANE BLOCK 5, LOT 17 FORT WORTH, TEXAS 76180 4801 SUSAN LEE LANE GRIFFIN, BILLIE R. RICH LAND TERRACE ADDITION 4801 SUSAN LEE LANE BLOCK 5, LOT 18 FORT WORTH, TEXAS 76180 4709 SUSAN LEE LANE WILBUR, ERNEST" ETUX LAMAI RICHLAND TERRACE ADDITION 1960 REYNOLDS DRIVE BLOCK 5, LOT 19 AZLE, TEXAS 76020 . 4705 SUSAN LEE LANE WILSON, JAMES M, RICHLAND TERRACE ADDITION PO BOX 137094 BLOCK 5, LOT 20 LAKE WORTH, TEXAS 76136 NE LOOP 820 HUGGINS, E G & M PEARSON ETAL RICHLAND TERRACE ADDITION PO BOX 18300 BLOCK 42CR, LOT 2R1 NORTH RICH LAND HILLS, TEXAS 76118 . . . . May 14,2001 MAY 1 4 2001 City of North Richland Hills Planning and Zoning Committee 7301 Northeast Loop 820 North Richland Hills, Texas 76180 RE: PZ2001-06 R2 Single Family Residential to PD Planned Development Dear Sirs, This letter is in regards to the recent Planning and Zoning Meeting on May 10, 2001. At that meeting, I requested that my residence at 4705 Susan Lee Lane be changed ftom a residential property to a commercial property. The property, ifrezoned, would be used to expand the parking area of Huggins Honda. It was the unanimous decision of the Planning and Zoning Committee to deny rezoning of the property at this time. I would therefore like to request that this decision be appealled to the City Council. I would like to request that this letter and all applicable documentation regarding the rezoning of this property be sent to the City Council for their review. If you have any questions or comments in regard to this request, please feel ftee to contact me at my home or through my pager. Thank you in advance for your cooperation in this matter. smcere~..-- -nt ?u ~ James M. Wilson (817) 281-2278 Home Number (817) 493-4635 Pager Number · 4i.~ I~ ~~~-~ ~~. ~~:L-~i: ~ !--_ - ____n___ ---- ~~ ~ .~.~ ¡J~ ~ ~----- . _ ~. ____4&-:.,. ,__;/' .~ ~-- -~~- .. <7~._ -' - -?l!E?;~~~ _ÆÆL~~L __ ~___u __ An ~ ~ /71ß-~__.~~_,A:Ifu uP ~.. ~~~_ ---l~;z~~ ~ · ~~=-_/~~ -- -------~. . ----- ------,----- -. · - ./,v~,,;r~ ~- ~~.~:dL9-- _ _____.n__,n._ ~._ .t¿:___ ._.L_.__n _..__~.~~_~ -_/"I./':~ j)2JÆn7 ~d.f.¿~-~_~_~~_n- ._ .__l/~Lt&:rf!:¿:J--_!...__.____._______________ _______________.____.___.__,. __._··n·_·._ --.-~fZ-~ ~~-~- ~~~:£1:-__f'b. ~~£J :- (., .>..--ß--------.----.--:y~--, ~-- .~~! ~~ ______._____..__u__._> 7 ~~~.~~~' t ~_. .-.. --------- _ ~ _ n _._ ~.. ~_ __ _..____ _.__ __ _.___._ _._ ___.__.._ _._____.._u_ ___._ ____ ___ ___...._ _..____' __ __ _____.... .__ - ---.--_..--.._-_._.-~-------- .-----.--.------ - -~.._... ----.-------------- --..-- __ ._______" __. __. _.. ..... _. ..__ ____ __ _...4__...._"___._ ~_'_"'____.""___'_ _.. _______._._~_ -..-.- -- _ --- - -_ _-.__- --'--_.--~-~ - --.-.----- ------.--- ..- . _ _.. _ __.__. ___.. - .__ _'_u _ _..___ ___ ___.__.....__ ____ _. ___ ____._ "___..__4___ _____ ____ _._.._.___......._____ .._ .___ .._____n .-._- -. --- · _ _. _. ____ _ _._ _. __ _._.__. _._.'_ __ _.4_ .______ __. ___._____ _... _.. .·_4_______·_ .._-- --- .--- - - - . - -. _ .___. _.. n __ _ ..__ _. _._ u ___. _._ _.. ____. ,.___.___. _ _______ ______ - -- -- .- _.- - - -- --.- -_.-.._-- --- -.-- -. - ---. _. __ __ . H _ ) . - - COLBY · STANLEY PROPERTIES ..~~~iW . ' . SII SOUTH MAIN STREET EULESS, TEXAS 76040 (METRO) 8171267-6122/817-S71-7763 FAX 81713S4-S619 24 HOUR INFORMATION UNE: (METRO) 8171267-1766 ! I't.MIfØNG ¡ 1~~rrrQNs: April 25, 2001 Planning Department City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 RE: Case# PZ 2001-06, 4705 Susan Lee Lane Ladies and Gentlemen: . We own the property at 4804 Susan Lee Lane and are opposed to any further encroachment of commercial into this residential area. The first block of Susan Lee north of Loop 820 already shows significant decline, and if the proposed project is approved, the decay will deepen and begin to spread further north on Susan Lee into adjacent blocks. We ask that you do not approve this request. t--------- ·m REALTOR G) -- OPPO_TU"ITY /- · · · May 9.2001 Planning and Zaning CammissiQn Narth Richland Hills. Texas Subject: Case # PZ 2001-06 Lot 20, Block 5, Richland Terrace Additian TO' the members Qf the Planning and Zoning Cammissian: As a property owner who lives within 200 feet of the property for re-zoning, we wish at this time to oppose the re-zoning of that property. FQur years agO'. this neighborhood was tQld that the Planning and Zoning Committee WQuld nat allow. Mr. Huggins ar anyone else. the Qpportunity to' "piece-aut" Qur property that is located in Richland Terrace. If you consider this request now from Mr. Wilson, who has sold his house to Mr. Huggins, isn't that what you will be doing? Since that meeting years agO', we naw all have learned the future plans fQr this area. We have learned that Richland Terrace nat only sits in the "820 Corridor" but that the city would like to develap this land intO' the "Business District." We, as a neighborhood are nat Qpposed to the idea that we would eventually need to' sell Qur hames. We recognize the grQwth that has occurred in Qur city and we also recagnize that it is nQt in the visiQn of Narth Richland Hills to have hames next to' the freeway. But, what we as property Qwners are opposed to, is that we will be driven Qut Qr taken advantage Qf. and nQt be able to replace what we have in today' s hausing market As a hQmeowner, in this same hQme fQr 28 years. we have seen this neighborhood change ftom a quiet beautiful place to raise your family, intO' what it is now a noisy, undesirable place to live. As YQU now drive down these streets yau see the decline af a neighborhood. What YQU can't see or know, is that we are all caring individuals whO' nQt Qnly pay city taxes but have been discouraged about investing in Qur hQmes. You ask how can that be? Why, would anYQne net keep up his er her hemes? That answers lies in the minds af the people in this neighborhood wham fer years have been unsure what will happen to them as homeowners. Rumers ef the expansion of the 820 Highway leng preceded the beginning construction in 1993. We have also been concerned that we cauld end up like some ether hemeowners in a nearby city, in which their land was also desired for re-development and some ef those hemeowners were pushed eut. Add to this, the fact that Mr. Huggins fer years has made attempts to' buy seme of heuses in this area. indicating to' us a his desire to' expand There is some feeling that we could have been pieced out ene at a time. New let's add to' these facters, eur frustration with our ewn city. We feel that the city has long forgotten us and no longer cares. The city wants us as homeowners to keep up eur property but has the city failed us in its responsibility to' keep up with its attempt to previde us with a well- maintained street? By not keeping up Susan Lee Lane er Nancy Lane the city has been a part in creating the appearance of a declining neighborhood. Susan Lee Lane is considered a minor collecter and is well used. as you knew. Why has this street been neglected fer years and years even theugh it appeared in a list ef streets to be re- surfaced in 1993? Don't yeu think that the city should carry some efthe responsibly in the decline efthis neighborhood? We do! This neighborhood has endured and tolerated so much in the past from everything that has occurred with the road construction involving the building of the new 820 Highway. We are the ones who have put up with the highway construction vehicles going up and down our street day and night carrying dirt and concrete to build what you now see. We are the ones, who listen to the road noises created by over 100,000, plus can who travel this highway each and everyday, seven days a week, 24 houn a · · · day. Unless yoo are one of the people who Hve in these hou~ there is no way you can undentand what we have been through! We have all played the board game of Monopoly and know how it is played out. The people on this committee will play a key role in determining who will win in the end. In the long run. all parties could benefit from the re-development of this area. The people, who sit on this committee injudgement, will hold the future of all the property owners in this area in their hands. We mge you to consider the long-term effects that this decision will have on our lives. We are hoping that you will make a fair and honest decision when considering this matter. May God give you the wisdom to do the right and just thing! Tbankyou, Mary and Starline Autrey · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am the property owner of record within 200 feet of this property and I OPPOSE THE REZONING! Property owner q/~~d {/~1r 1 (,~~ .h~Aqc t) Address ~I ~ / ~ACý!. "i/l ¿.. ( .JJR-f'chk"J J!,¡t. TX7rÇ/ßO ~(\~~{v) ~//Á c~ J.,Plfi:'/1 gu!. '1 L~/,;¡d.. · · · May 1,2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZONING OF THIS PROPERTY! Property owner ¡f. '~~LL4AdL 4-8'o1~.~~dt~ ./ Y:i {:;.k/A","d J/.d6}/X 7.:/4 Address · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am the property owner of record within 200 feet of this property and I OPPOSE THE REZONING! Property owner &~ Address ~~ ?'--lo IA,,~ ~ ~ ~~ fJ-c/~ ~ T/t 7 b jg 0 · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZONING OF THIS PROPERTY! Property owner {}ßi4 c ß.v~/~ j (/ h/b //"/C/' ¿/ Address ) j~C~/~d¿1/ d'~A'~- ff/, · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZONING OF TillS PROPERTY! Property owner ~A.c!- 'frJ~ ~d4L~ ':;. ¿iLL ~~, Address /.j g.-:;. ~ ~'/t-~--L r ';1/ a-~ tl n Æ! }J~ '7 4 J 9 ¿; ',/'. · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near Block 5, RichIand Terrace Addition and I OPPOSE THE RE-ZONING OF THIS PROPERTY! Property owner ¡¡/>?/(/$~~ fØV~~¿~ 4£'&,/4, ;/¿//þ / Address · · · May 1, 2001 Attention: Planning and Zoning Commission Subject: Case # PZ 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZONING OF THIS PROPERTY! Property owner W-ZPfl~W~~o~ \ Address 4P.2¡ '-Ii d/ft7 d4z- ' 11MZ2L- ~ ---¡jd¿ T)L · · · ORDINANCE NO. 2554 AN ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AMENDING THE ZONING ORDINANCE TO ESTABLISH A PLANNED DEVELOPMENT DISTRICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Planning and Zoning Commission has reviewed a rezoning request on a tract of land identified in Case Number PZ 2001-06; and WHEREAS, the developer has indicated an interest in establishing the proposed development as a planned development district under the guidelines of the North Richland Hills Zoning Regulations; and WHEREAS, the City Council has determined that the development conditions of this tract of land do not provide adequate opportunities for development under available existing zoning district regulations; and WHEREAS, after appropriate notice and public hearing, the City Council of the City of North Richland Hills has approved an amendment of the Zoning Ordinance by establishing a Planned Development District and by changing said Zoning Ordinance as set forth herein; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: 1. THA T, in Case Number PZ 2001-06, the following described property, attached as Exhibit A, Location Map, shall be rezoned from R2 Single Family Residential to establish a Planned Development District with specific development regulations on .15 acres of land 2. THAT, the purpose of this Planned Development District is to provide for an expansion of an existing automobile dealership. The permitted uses and development regulations for this planned development district shall be as follows: Ordinance 2521 Page I · · · 1. Permitted Uses: Display of new vehicles 2. Access: No access shall be allowed from the site to Susan Lee Lane 3. Signaqe: No sign, flags, or banners shall be permitted. 4. Drainaqe: All site drainage shall be toward Susan Lee Lane only 5. Display: No permanent display ramps shall be permitted. 6. Lightinq: All lighting shall be directed away from adjacent residential areas 3. THAT, the development regulations are hereby amended, and specifically, the C-2 Commercial Zoning District regulations which are not in conflict with the terms of this Planned Development District shall govern development on said property, except as follows. 1. No landscape buffer will be required along the common boundary of Lot 20 and Lot 19, Block 5, Richland Terrace Addition. 2. A 5' landscape setback shall be required along the Susan Lee Lane frontage of the site. 3. Percentage of landscaping shall be as approved on the attached plan. 4. THAT, all provisions of the Zoning Regulations of the City of North Richland Hills, as amended, which are not in conflict with the terms of this Planned Development shall remain applicable on said property, and the provisions of the C-2 Zoning District shall apply to this property to guide development, except where amended herein. 5. THAT, the Zoning Map of the City of North Richland Hills be amended to reflect this planned development district. 6. SEVERABILITY CLAUSE. That it is hereby declared to be the intention of the City Council that the section, paragraphs, sentences, clauses and phrases of this ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared invalid or unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such invalid or unconstitutional phrase, clause, sentence, paragraph or section. 7. Ordinance 2521 Page 2 · · · SAVINGS CLAUSE. That the Comprehensive Zoning Ordinance of the City of North Richland Hills, Texas, as amended, shall remain in full force and effect, save and except as amended by this ordinance. 8. EFFECTIVE DATE. This ordinance shall be in full force from and after its passage. PASSED AND APPROVED BY THE CITY COUNCIL THIS 29th DAY OF May, 2001. Mayor, City of North Richland Hills, Texas ATTEST: City Secretary City of North Richland Hills, Texas APPROVED AS TO CONTENT Department Head APPROVED AS TO FORM AND LEGALITY: Attorney for the City Ordinance 2521 Page 3 ~"",,-,?-q-£ ,. .K~'C~C~/. . 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Þv1ay 29, 2001 r-""ID,~©~D'¥~ ~ ~5' ~ ~ MAY M 2001 '.:!J e ;\ttention: City Counci1 Commission ~ ·l~ i el--t' L.JL UJ '-'-" Zoning change frolll R2 Single Fatniiy to PD Planned Deve!opment for 4705 Susan Lee Lane. e T an1 a neighbor or property o\vner \vho lives near Block 5, Richiand Terrace Addition and T OPPOSE THE Rh-ZONlNG Or THTS PROPERTY! Property Owner A1 ~~ rc!i.)j~~ ------ , '-f8'O~ Address ~ Nancv Lane , North Richland Hills, TX I W C1 y\ +- +0 . C1. +- C~+--~ M ¡;U¿ +'( "ð M"-<1 &- c¡ . ¡Iv1rs, fj f\Jdq Q~ ItCt ~ Spec;: \<- COJI\C~ f e . e May 29, 2001 Att"",n"" .. r;-h, C, In...;' C .." ;...."'" r; .. .1.'-'111.1011. ,-_,!Lv _,ÛlUI.....1I _,Omlllls...,I\.H, 9' S'lkJ"e'"""" L t. LI vI... Zoning change fron1 R2 Single Fanlily to PD Planned D""'.'''''' 't""n""len" ~O" ,1 "70 '= SlISa.... 1 ee 1 an"'" ..... v '-', )'1- II III. i' 1 '"T' _, L I., II Li Lie '-'. T am a neighbor or property o\vner \vho lives near Block 5, Kichland Terïace Addition and I OPPOSE THE RE-zONh~G 01' THIS PROPERTY! Property Owner / Adrlr""'L~'" ,18")0 N....f'\'...·' L....fle _ \..[ ........,..., .,. L-' J CI. 1'-' V U North Richland HiHs, Tx e . e May 29,2001 Attention: City Council Commission -' Subject: Zoning change froln R2 Single Fan1ily to PD Planned Development for 4705 Susan Lee Lane. T an1 a neighbor or property o\vner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZO"NlNG OF THIS PROPERTY! Property O\vner (c;;;¿'~1 ¡ý Ý Jý & /Jék € ¡-;-- / 0/ Address L¡~ó() ¡J()NCþ/ Í-PH{ N (( /-1 e . e ~1av 29. 2001 .,; " Attention: City Council Commission '" C"b:a,-..t" uu ~...A'" ZorïÎng change frOI1ì R2 Single Farniiy to PD Planned Deve100ment for 4705 Susan Lee Lane. J. T am a neighbor or property o\vner who lives near Block 5, Richland Terrace Addition and I OPPOSE THE RE-ZONïNG Or THTS PROPERTY! Property O\vner Address North Richland Hil1s. TX , e . e ~,1ay 29, 2001 Attention: City Council Commission ., Subject: Zoning change t:roln R2 Single Fanliiy to PD Planned Developrnent for 4705 Susan Lee Lane. T an1 a neighbor or property o\vner \vho Jives near Block 5, Richiand Terïace Additiûn and I OPPOSE THt RE-ZONlNG OF THTS PROPERTY! Property ~~ F Address 4800 Nancv Lane , North Richland Hills, TX - . e 1\1av 29. 2001 . " Attention: Citv Council Cornmission -' Subject: Zoning change fron1 R2 Single Family to PD Plalmed Development for 4705 Susan Lee Lane. T am a neighbor or property o\vner \vho lives near Block 5, Richiand Terrace Addition and I OPPOSE THE RE-ZO'NlNG OF THTS PROPERTY! Property Owner Mii ~L Address 4801 Nancv Lane . North Richland Hills. TX , e e e May 23, 2001 Attention: Members of City Council Subject: Concerning the Appeal of Case # 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near 4705 Susan Lee, Richland Terrace Addition, and wish to OPPOSE the re-zoning of this property! Property owner ~ \ a ~\ CJ¡ ~ ]Dh.e...5 Address L{ 3:1 ð .s 4 s~ '" L ~'-L L,;.J D, EL: e-k \a I-\. rC +f (Ls TK 7~ (<6D ) ~f1 ~ ¿if f!¿ /Inéf 5Þéflol . May 29,2001 Members of the City Council North RichIand Hills. Texas Subject: Case # PZ 2001-06 Lot 20, Block 5, RichIand Terrace Addition To All Members of the City Council: As a property owner who lives within 200 feet of the property that is being considered for re-zoning; we want it to be known at this time, that we strongly oppose this appeal As this request was brought before the Planning and Zoning Commission meeting on May 10, 2001, we as neighbors of the Richland Terrace Addition joined in opposition with other neighbors against this encroachment into our neighborhood. The majority of the neighborhood has spoken out on many occasions concerning other requests involving properties that would impact this neighborhood. The Planning and Zoning Committee favored us and denied this request. As a result of the expansion and widening of the 820 Hwy many individual and businesses will be affected as you well know. We understand that Huggins Honda Car Dealership adjacent to our neighborhood will be greatly effected with these changes and as a business is trying only to survive. But on the other hand, we as individual homeowners of Richland Terrace Addition are trying to survive, too. There must be a balance in good judgement when so many individual lives s are involved. . The members of this council must realize that this neighborhood is made up of many caring individuals, who for so long have been in fear that they will be forced to move because of the domino effects in the widening of 820 Hwy. We feel this fear could have been some what controlled, if only the City had put forth an effort to fore see what could have happened long before 1993 and construction began. As a result, fear of the unknown has swept across the very lives of the people in inhabit this neighborhood. We have retired and elderly people whom only live on fixed incomes. Where can they go to re-place their homes in today's market? We have young families who are trying to make it from one paycheck to the next. They chose these homes because they were affordable, and they can't move up! We have single mothers, who are struggling alone to provide a home for their children. Where will they go? They can barely afford to pay for these homes? There are still others who have invested into their homes and it has become their only asset and they would need to replace it. Our neighborhood is full of wonderful people, who are scared that they will be done wrong and who also feel that no one will hear their plea for help. As members of the City Council, it is your responciblily to stand in the gap and make the decisions that is not only fair to commercial businesses but that is fair to individual home owners! May we pled with you now, please consider your decisions carefully! This request is only the tip of the iceberg for now. There will be other requests from this commercial business that will put you in a most difficult situation. May you realize today, that you will be called upon again for other requests concerning this neighborhood? May you all call upon the wisdom that God gave to Solomon as you ponder how to balance your fairness to everyone concerned. We are tnlsting you now as our representatives, you alone have our future in your hands. Please be fair and not only rule with your minds but with your hearts for every action we take in this life has a consequence. Thank you, - \'Jn~ V :Yf¿¿'V¿~ a~J~ Mary and siarline Autrey .cJ e e e -j}¡t f¡¡/ ~ ce ~ \ .5bJ/OI May 23, 2001 Attention: Members of City Council Subject: Concerning the Appeal of Case # 2001-06 Zoning change from R2 Single Family to PD Planned Development for 4705 Susan Lee Lane I am a neighbor or property owner who lives near 4705 Susan Lee, Richland Terrace Addition, and wish to OPPOSE the re-zoning of this property! Property owner ~'a V\ 01 r --r- Jvn.e..5 Address Li '3~O S L( S4~ L ~~ L.-0 tJ, Q.: c,k 1a~ rD if ((5 n 7~ (<6D ) ", . . -' .'.... ~., . '. '~'.,- ,-,,-', . ·"·,~··f·.·'" CITY OF NORTH RICHLAND HILLS Department: Planning & Inspections Department Council Meeting Date: OS/29/01 Subject: Public Hearin to Consider Variances to the Si n Agenda Number SRC 2001-01 Regulations Ordinance No. 2374. Specifically to subsection 13. C.1.a and 13. C.1.e, regarding the permit period and size of new temporary development signs. Three proposed signs are requested to be located in the Home Town Development. Case Summary: A request to vary the Sign Regulations Ordinance has been submitted by Dan Quinto, representing the Home Town Richland Hills Development. The existing sign ordinance permits: . Two new development signs, with a maximum of 100 square feet in size, for one year or until 90% of the lots are developed, whichever occurs first. The ordinance requires yearly permitting. One on-premise and one-off premise sign is permitted. Mr. Quinto proposes to remove three existing billboards (off-site advertising signs) from the frontage of Grapevine Highway. Each of these signs is 288 square feet in size. He requests approval of three temporary development signs. Two variances are requested. Specifically a variance to the size and time limits on two signs and a variance to add one additional on premise development sign which meets all ordinance requirements. A description of these signs is as follows: Sign A: A 288 square foot, on-premise development sign for 3 years or when the residential lots are 90% developed. whichever occurs first. The sign will be located in the 6200 block of Davis Boulevard. Text will be limited to 100 square feet. Sign B: A 288 square foot, off-premise development sign for 5 years. The sign will be located in the 9100 block of Grapevine Highway. The sign will also be used for advertising the entire development with an emphasis on the retail tenants, which join the project over time in the commercial areas of the development. Sign C: A 100 square foot, on-premise development sign for a period of 1 year or when the residential lots are 90% developed, whichever occurs first. The sign will be located in the 8500 block of Mid-cities Boulevard. = ~ Finance Review Account Number Sufficient Funds AvallaDle Source of Funds: Bonds (GO/Rev.) Operating Budget Other " A ,.~cI!,^ I,J,t:t Department Head Signature Finance Director .~~ ~¡0 it anager Signature ,'."., ~.'" ;c.....' .~ '-." CITY OF NORTH RICHLAND HILLS The applicant has indicated that he will be bringing examples that will show the character as well as the building materials that will be used on the proposed signs. Recommendation: Due to the uniqueness and size of this mixed use planned development (residential, office, retail, and institutional) Staff recommends approval of the variances as requested. Mr. Quinto indicates that the existing non-conforming billboards will be removed from the site. This should occur before installing any of the requested new signage. ""'Y"V ,..", ,a,,..,, A ,..T,,,a, 'Tr:.. 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TR 2A 26.654 CI TR 1 .146 i I j l " TR 1.7 ¡ ~~~ r------- i~ / ",...:¡~ I I i i \ \ \ \ \ \ \ \ \ \ \ "- '", ,......'..........." ~ ~~- TR 12 2.72 '-........ -. .---.-.--.-.. · CASE #: SRC 2001-01 SIGN REVIEW FOR TOWN CENTER The following property owners are listed in the 2000 Tarrant Appraisal District tax rolls. They fall with in 200 feet of the subject tract and have been notified, SIGN A: 6200 BLOCK OF NORTH DAVID BLVD. Davis Blvd. Barlough, John H Survey Abstract 130 Tract 6B & 6D Woodbriar Management L TD 5125 Davis Blvd. Fort Worth, Texas 76180-6873 SIGN B: 9101 SH 26 (GRAPEVINE HIGHWAY) City of Hurst 1505 Precinct Line Road Hurst, Texas 76054 SIGN C: 8500 BLOCK OF MID-CITIES BLVD. · Mid-Cities Blvd Barlough, John H Survey Abstract 130 Tract 11 Tadlock, Larry p, 4913 Rufe Snow Drive, Suite 101 Fort Worth, Texas 76180-7856 · , , · · · . ,~ß ~f -0\ ARCADIA REALTY INC Phone: 8179492108 SUITE 280 1400 W NORTHWEST HIGHWA Y GRAPEVINE, TX 776051 Fax: 8179492111 Date: April 23. 2001 To: NRH City Council North Richland Hills. TX Re: Home Town NRH Zoning Variance Request 1. Applicant: Dan Quinto For Arcadia Holdings. Inc. Suite 280 1400 W. Northwest Highway Grapevine. TX 76051 2. Property Owner: RAMCO.Inc (formeriv E-Svstems Pool Trust. Inc.) , -. C/o Lend Lease Real Estate Investments. Inc. Suite 2400 700 North Pearl St. Dallas. TX 7520 I 3. Property: Block: L. Walker Survey A 1652, Tract (Lots) 4B _ Block: L. Walker Survey A 1652.62£ &c--1- Survey Attached: Revised Preliminary Plat dated -, ... --, "~ ( 4. Variance Request: Sign Ordinance: 13.C.l.e; maximum area 100 SF Requesting a maximum of 288 SF Sign Ordinance: 13.C.l.a: maximum time 1 year. Requesting 3 years for Davis sign and 5 years for Hwy 26 sign, or 90% sold whichever comes first. 5. Grounds for Request The two most salient features of the Home Town development are the quality and the magnitude of the project. Neither can be adequately conveyed in 100 square feet. The quality of the Home Town NRH development is particularly evident in the details of the buildings and landscaping, which would not be visible from the roadway. On a lOx 10 sign. subtracting the area required for the project name and contacts names leaves a very small area to show the. pictures which are so important to the identity of the development. , · We would li~ text messages to 100 square feet on each sign. However, on HighwaY-3.§..'we would like to be able to add the names of the business and retail tenants that join the project over time, and this may be in addition to the 100 SF but not over the 288 SF. , ' 6. Unique Circumstances On the subject property, there are 3 off-premise billboards that are leased to advertisers. Each billboard is 12 feet by 24 feet, or 288 SF totaling 864 SF for all three signs. We would like to upgrade the appearance of the site by removing these billboards and displaying only our project signs on Highway 26, Davis Boulevard and Mid-Cities. As a condition of the variance. we would remove the billboards from Highway 26. 7. Diagrams See attachments: Exhibit A Location map & Sign elevation Exhibit B Highway 26 location Exhibit C Davis Blvd. location Exhibit D Photos of existing billboards- Exhibit E Preliminary plat · · "" tr1 >< .,... - - t:ö - -1 > o m < m r- o -0 ~ m :z: ---1 U) C) :z: r ! C) r ~..) r ~"7 t m II '" i '" ~ ~ ~ a ~ ""ji :=~ ~ . 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"""',~ .:"::<'''''' . . · ,. .4. ~ Department: City Secretary CITY OF NORTH RICHLAND HILLS Council Meeting Date: 5/29/01 Subject: Appointment to Place 2 on the Park & Recreation Board Agenda Number: GN 2001-056 Place 2 on the Park and Recreation Board is currently vacant due to the resignation of Andrew Wolff. Mayor Pro Tem Mitchell is recommending Ms. Robin Eddins to fill this vacancy. The term will expire June 30, 2002. . Recommendation: To consider the appointment of Ms. Robin Eddins to Place 2 on the Park and Recreation Board, term expiring 6/30/2002. e Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other ø~~~~ Department Head Signature Account Number Sufficient Funds Available Finance Director ~~~ .. 05/10/2001 14:59 8172811550 BETHESDA: Apr-18-Dl 03:54pm From-City Of North Richland Hi I I¡-Admin, +8174ZT601 a PAGE 01 T-046 p,al¡01 F-SBZ - I'JRI-I BOARD/COMMISSION CANDIDATE APPLICATION ..... ".' /80 Name- - C (:) Y>"'\ A e Age ~:<f'IJI;1\1 ~·".Jr..~'':!'·I~ 'O'V:¡:", ~~~i!'¥.",~¡;¡¡O<td ..~__~:1~~.-:Sï·'''~'''·' ~~" Reslden State o ..., am intc~ted În serving on (oheck onQ Qr more) CJ B....u~(attlon Comml$5ion ¡:¡ CiJpital Improvc¡¡ml¡n; Ad-"iaory Committee l:J PlannIng ß. Zoning C:omm~lon t:J Board of AdjwtlT1ent !:J Civil Service Commission DTeel'l Court AdvJ5tJry Soard o Board gf AppealS o Ubrary Beard ~P1!Jric & R.ec:relltlon S04rd o Town H~II Commi~ --e 1:1 OIþl, T'!I-.vlston 8o~rd Memberships, organizations ,and prevíous experience on city commissions Why de you want to serve on a board/comm!sslon .,_...".~:,,:~.~.!~~~~t,.~-,_~~ C\\.. _~~ì~~ÙI\~.<2~~~¿. ~~ . ~~ (,l.~ a ~~~.~'ö~;'_.,..,..- ç¥~~_-:.N\~~ ~ßJ:Qr:d;ñ~~:'1~~'~~.~ a~: ApPI~tSI~ c.~ ~ R8~ completed form to: City Secretary's Office \ POBox 820609 c.. \ Q, North RIchJand Hills, TX 76182-0609 l..) .V\:: 817) 427-606 ~~ . 7) 427~a16 .. AppUcatlona win ...rrudn an tOa ~p all. 1'- lifter ute teeeiwed. Ra~aivad May-10-01 OZ;31pm From-B1iZB11560 To-City Of North Ri~hla Pa,a 01 CITY OF NORTH RICHLAND HILLS I. Department: City Secretary Council Meeting Date: 5/29/01 Subject: Appointment to Place 1 on the Park and Recreation Facilities Development Corporation GN 2001-057 Agenda Number: Place 1 on the Park and Recreation Facilities Development Corporation has been vacated by Mr. Don Phifer. The Corporation's Articles of Incorporation and Bylaws state that appointments to the Board of Directors are to be made by the City Council. Since the term of Place 1 will not expire until May 1, 2002, the Council should appoint a member of the Council to fill the unexpired term of office. Council Members currently serving on the Board of Directors are: Charles Scoma Place 3 Lyle E. Welch Place 2 Joe Tolbert Place 4 The other three places on the Board are designated for citizen members. Recommendation: To appoint a member of the City Council to Place 1 on the Park and Recreation Facilities e Development Corporation, term expiring May 1, 2002. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Oái7Jitti~ Department Head Signature Account Number Sufficient Funds Available Finance Director '~~~ CITY OF NORTH RICHLAND HILLS e- Department: Administration Council Meeting Date: OS/29/01 Subject: Approval of Fire Services Analvsis Agenda Number: GN 2001-058 On September 25, 2000 the City Council approved a Professional Services Contract with Bill G. Evans, CMT / Berkshire Advisors Inc., to perform an organizational analysis of the Fire Services in North Richland Hills. As was pointed out in the coversheet in September the City of North Richland Hills has conducted a number of analyses and evaluations of various city functions and operations through the use of outside independent contractors. Each and every year we have an independent audit of the city's financial services. In the early 1990's the city engaged a firm to conduct a department analysis of the Public Works operations and the Finance Department operations. In 1995 the City engaged a firm to perform an analysis of the computer operations and needs of the city. Then in 1996 prior to the Crime Control District election the city engaged a firm to conduct an analysis of the Police Department operations and needs. During the last two budget work sessions the Council discussed the interest of continuing to periodically do outside independent reviews and evaluations of departments' operations and functions. With that in mind it was decided to conduct the organizational analysis of the fire services during the fiscal year 2000 - 2001 . The overall purposes of the Fire Department analysis were to review the mission, organization and operations of the Fire Department to determine the extent to which it has been able to meet the expectations set forth and identify the factors which may limit its ability to do so. Particular .A attention was focused on the need for staffing, equipment and facilities, both quantitatively and .. qualitatively. The evaluation was to identify opportunities for improvement and development with specific recommendations for actions to seize opportunities that would be found to make such improvements. Mr. Evans has completed the evaluation and will be prepared to make a report to the City Council at the May 29 Council meeting. In preparing this analysis Mr. Evans met with 50 - 60% of the firefighters in the department. fire department management, and city management representatives. He made an effort to get as much input and understanding of issues and needs as possible so that he could review this information in making his analysis and forming conclusions and recommendations. It is anticipated that several if not all of the recommendations provided in the report will be considered during the budget process for 2001 - 2002. The Fire Chief, Deputy City Manager and City Manager have discussed the findings with the consultant and concur with the recommendations. Following the presentation of the report to Council, we plan to review this with all other Fire Department management as well as other members of the Fire Department. Recommendation: To accept the Fire Services Analysis Report and authorize city staff to proceed with implementation. Source of Funds: Bonds (GO/Rev.) iA Operating Budget ,~ Other Finance Review Account Number Sufficient Funds Available Finance Director Department Head Signature Page 1 of 1 ~ - Announcements and Information May 29, 2001 Announcements Sign up today for the Summer Reading Program beginning today at the NRH Library. Call 817-427-6800 for details. Summer Camp NRH Session 1 begins today at the Recreation Center. To learn more about our summer camps, call 817-427-6600. Information Mav 31 Special Called City Council Meeting/Park Corporation Board City Hall 6:00 p.m. June 8-9 City Council Goal Setting work session e June 8-10 NRH Junior Open Tennis Tournament Richland Tennis Center 817 -427 -6680 -e vi I I I I I I I I I I I I I I I I I I NI~H NORTH RICHLAND HILLS PARK AND RECREA TION FACILITIES DEVELOPMENT CORPORATION $7,305,000 SALES TAX REVENUE REFUNDING BONDS, SERIES 2001 Tuesday, May 29, 2001 The following ratings have been assigned: FGIC Insured Underlying Credit Ratin!! "AI" upgraded from A Moody's Investors Service, Inc. " Aaa" Standard & Poor's Rating Group A Division of McGraw-Hill, Inc. "AAA" "A+" upgraded from A PREPARED By: ~ FIRST SOUTHWFSf COMPANY I I I I I I I I I I I I I I I I I I I @lIoody's Investors Service .u GløblIl Credit RøNtch Municipal Credit Research New Issue Published 17 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 Sales Tax Revenue Refunding Bonds, Series 2001 Sale Amount $7,225,000 Expected Sale Date 04/23/01 Rating Description Sales Tax Revenue A1 MOODY'S ASSIGNS AN A1 RATING TO THE CITY OF NORTH RICHLAND HILL'S $7.2 MILLION SALES TAX REVENUE REFUNDING BONDS, SERIES 2001 AFFECTS $10.7 MILLION IN DEBT Opinion Moody's Investors Service has assigned an A 1 rating to the North Richland Hills Park and Recreation Facilities Development Corporation $7,225,000 Sales Tax Revenue and Refunding Bonds, Series 2001. The A 1 rating also applies to the $3.46 million in outstanding sales tax revenue debt. Proceeds from this issue will be used to advance refund a portion of the Corporation's outstanding Sales Tax Revenue Bonds, Series 1991, 1994, and 1995. The refunding will produce an estimated $451,000 savings for the Corporation. The A 1 rating is reflective of the ample coverage of debt service and the expected continued growth in the city's sales tax revenues. Also contributing to the rating are the city's well-maintained financial operations, and diverse sales tax base. The bonds being issued are payable from and secured by a % of 1 % sales tax dedicated solely for economic development of the city. The bonds are structured to be retired in 13 years. Adequate bondholder protection includes an additional bonds test of 1.5 times the maximum annual debt service. Fiscal 2000 collections of $3.2 million provide ample debt service coverage of 1.38 times maximum annual debt service, which is projected at $2.3 million in 2002. Fiscal 2000 collections provide 1.7 times debt service coverage of average annual debt service of $1.8 million. Sales tax revenues have increased an average of 7.4% annually over the last three years and Moody's expects continued increases in sales tax collections given the city's favorable location between Dallas and Fort Worth. The City's fiscal 2000 assessed valuation of a sizable $2.34 billion has grown at an average rate of 8.8% I I 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. These projects will add to the City's already diverse sales tax base and should increase total sales tax collections. For additional information on the City's General Fund, please refer to the Moody's Investors Service Report on the City of North Richland Hills dated April 17, 2001. 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) I I I I I I I © Copyright 2001 by Moody's Investors Service, 99 Church Street, New York, NY 10007. All rights reserved. I ALL INFORMATION CONTAINED HEREIN IS COPYRIGHTED IN THE NAME OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S"), AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCUP.ACY, TIMELINESS, COMPLETENESS, rJlERCHANTABIUTY OR FITNESS FOR ANY PARïiCULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling. Pursuant to Section 17(b) of the Securities Act of 1933, MOODrS hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment of any rating, agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,000 to $1,500,000. MADE IN U.S.A I I I I I I I I I I II~~ I I I I I I I I ,I I I I I I I I I I RATINaSDIRECT Research: Summary: North Richland Hills Pk & Recre Fac Dev Corp, TX; Tax Secured, Sales Tax Publication Date: 17 -Apr-2001 Analyst: Paul Jasin, Dallas (1) 214-871-1424; Alexander M Fraser, Dallas (1) 214-871-1406 Credit Profile $7.2 mil muni debt muni issue ser 2001 due 2013 Sale date: 23-APR-2001 A+ . Rationale The rating on North Richland Hills Park and Recreation Facilities Development Corp., Texas' sales tax revenue refunding bonds reflects the security by a first-lien pledge of proceeds from a one-half-cent sales tax levied in the city of North Richland Hills, as well as: · A diversified and expending retail tax base, · Strong annual debt service coverage of 3.2 times (x), and · Adequate legal provisions. Legal provisions include a fully funded debt service reserve and a historical1.5x additional bonds test based on average annual debt service of outstanding and proposed debt. Collection of the one-half-cent sales tax began in mid-fiscal 1993 and has increased 24% from fiscal 1997 to $3.2 million in fiscal 2000, providing coverage of 3.2x annual debt service with maximum annual debt service of 2.85x, which occurs in fiscal 2002. The growth in retail sales activity is supported by anticipated developments including a $628 million, 287-acre master-planned Town Center development featuring 650 custom homes, 800 multifamily dwellings, 160,000 square feet of retail space, and 650,000 square feet of office space. In 2000, the Crossings shopping center was completed and consists of 285,0000 square feet anchored by Kohl's department store and Minyard's grocery store. Also included is the county's first Home Depot Expo Design Center, which consists of 92,475 square feet, and one of the largest Sam's Club stores at 128,925 square feet. The city's second Wal-Mart Supercenter is in the planning stage with expected completion in October 2002. The composition of the sales tax collections is primarily retail-based at about 85%, with services and wholesale providing the rest. North Richland Hills serves as the retail shopping center for Tarrant County and, as a result, per capita retail sales in North Richland Hills are strong and represent 137% of the state and national averages. North Richland Hills, with a population of 56,500, is in the mid-cities area of Tarrant County ('AA+'/Stable) near the Dallas-Fort Worth International Airport. The city began as a bedroom community and has since developed a strong retail and commercial base. The city's ongoing development is largely attributed to its proximity to Fort Worth (8.5 miles away); Dallas (26.0 miles); and the 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), Kimberly ClarklTechnology 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. Median household effective buying income is 139% and 132% of the state's and nation's levels, respectively. Unemployment was 2.43% in 2000, comparing favorably to the state (4.30%) and nation (3.90%). . Outlook The stable outlook reflects expected stable growth in sales tax collection in the city supported by a diverse retail base. I I I I I I I I I I I I I I City of North Richland Hills, Texas Park & Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 DEBT SERVICE COMPARISON Date Total P+I Existing DIS Net New DIS Old Net DIS Savings 9130/2001 163,222.50 712,462.50 840,919.44 840,919.44 - 9/30/2002 364,065.00 798,892.50 1,162,957.50 1,200,340.00 37,382.50 9130/2003 361,590.00 791,845.00 1,153,435.00 1,193,292.50 39,857.50 9/30/2004 364,115.00 784,492.50 1,148,607.50 1 ,185,940.00 37,332.50 9/3012005 781,715.00 360,255.00 1,141,970.00 1,181,702.50 39,732.50 9/30/2006 1,003,475.00 132,877.50 1,136,352.50 1,175,175.00 38,822.50 9/3012007 1,009,675.00 127,207.50 1,136,882.50 1,176,267.50 39,385.00 9/3012008 1,114,475.00 16,537.50 1,131,012.50 1,169,420.00 38,407.50 9/3012009 1,107,762.50 16,537.50 1,124,300.00 1,164,895.00 40,595.00 913012010 1,108,662.50 16,537.50 1,125,200.00 1,162,640.00 37,440.00 913012011 1,101,662.50 16,537.50 1,118,200.00 1,157,017.50 38,817.50 9/30/2012 1,091,887.50 16,537.50 1,108,425.00 1 ,148,358.76 39,933.76 9/30/2013 314,250.00 121,537.50 435,787.50 471,750.00 35,962.50 9/30/2014 - 116,025.00 116,025.00 116,025.00 - 9130/2015 - 110,512.50 110,512.50 110,512.50 - Total 9,886,557.50 4,138,795.00 13,990,586.94 14,454,255.70 463,668.76 PRESENT VALUE ANALYSIS SUMMARY (NET -DSR) Net PV Cashflow Savings @ 4.747% (AIC)............................................................................... 389,013.61 Accrued Interest Credit to Debt Service Fund............................................................................ Transfers from Prior Issue Debt Service Fund........................................................................... Transfers from Prior Issue DSR Fund........................................................................................ Amount deposited into new DSR .Fund..................................................................................... NET PRESENT VALUE BENEFIT.............. ....... .............. ........... ........ ........... ...... ...................... 34,765.56 (72,266.81) (989,000.00) 944,423.31 $306,935.67 NET PV BENEFIT I $6,880,000 REFUNDED PRINCiPAL....................................................... 4.461% First Southwest Company Public Finance File = SALES TAX.SF-01 Rev Ref 052901*- SINGLE PURPOSE 5129/200111:42 AM I I I I I I I I City of North Richland Hills, Texas Park & Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 DEBT SERVICE SCHEDULE Date Princ:lpal Coupon Interest T olal P+I FISCAl TOTAl 7/1112001 - - - - - 910112001 85,000.00 4.500% 78,222.50 163,222.50 - 913012001 - - - - 163.222.50 310112002 - - 154,532.50 154,532.50 - 910112002 55,000.00 4.500% 154,532.50 209,532.50 - 9l3Ol2OO2 - - - - 364,065.00 310112003 - - 153,295.00 153,295.00 - 910112003 55,000.00 4.500% 153.295.00 208,295.00 - 913012003 - - - - 381,590.00 310112004 - - 152,057.50 152,057.50 - 910112004 60,000.00 4,000% 152,057.50 212,057,50 - 913012004 - - - - 384.115.00 310112005 - - 150,857,50 150,857.50 - 9101/2005 480,000,00 3.800% 150,857.50 630,857.50 - 913012005 - - - - 781.715.00 310112008 - - 141,737.50 141,737.50 - 910112008 720,000.00 4.000% 141,737,50 861,737.50 - 913012006 - - - - 1,003,475.00 310112007 - - 127,337,50 127,337.50 - 910112007 755,000.00 4.000% 127,337.50 882,337.50 - 913012007 - - - - 1,009,875.00 310112008 - - 112,237.50 112.237,50 - 910112006 890,000.00 4.125% 112,237,50 1,002.237.50 - 913012006 - - - - 1,114,475.00 310112009 - 93,881.25 93,881,25 - 910112009 920.000.00 4,250% 93,881.25 1,013,881.25 - 913012009 - - - - 1,107,782.50 310112010 - - 74.331.25 74,331.25 - 910112010 980,000,00 4.375% 74.331,25 1,034,331.25 - 913012010 - - - - 1,108,682.50 310112011 - - 53,331.25 53,331.25 - 910112011 995,000.00 4.500% 53,331.25 1,048,331,25 - 913012011 - - - - 1,101,882.50 310112012 - - 30,943.75 30,943.75 - 910112012 1,030,000.00 4.825% 30,943.75 1,060,943.75 - 913012012 - - - - 1,091,887.50 310112013 - 7,125.00 7,125.00 - 910112013 300,000,00 4,750% 7,125,00 307,125.00 - 913012013 - - - 314,250,00 Totel 7,305,000,00 - 2,581,557.50 9,886,557.50 I I I I I I I I I I I YIELD STATISTICS I Accrued Interest from 0610112001 to 07/1112001.......................................................... Bond Year Dollars................,..,.. ............., .......,'.... .............. ........................................... Averaga Life... ........................... ................................................,..................................... Average Coupon........ ............................... ..................................... ................................. 34,785.56 $59,331.25 8.122 Years 4.3510924% I Net Interest Cost (NIC)...........................,............,.,.......,..................................'............. True Interest Cost (TIC).................... ,............ ......... .................. ...' ....... ....... .................... Bond Yield for Arbitrage Purposes................................................................................ Alllndusive Cost (AlC)........,.............................................,............................................ 4,5197541% 4.5473803% 4,5023128% 4.7469142% I IRS FORM 8038 Net Interest Cost. '...... ,.............., ....................................... ...'... '.............,......... .... ,......... Weighted Average Maturity.......................... ................ ..............,.., ....,............ ,.............. 4.4735750% 7.999 Years First Southwest Company PubHc Finance File = SALES TAX.SF-01 Rev Ref 052901*- SINGLE PURPOSE 512912001 11:39 AM I I I I City of North Richland Hills, Texas Park & Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 2001 SUMMARY OF BONDS REFUNDED ISSUE Maturity Type of Bond Coupon Maturity Value Call Date Call Price 92 Rev 9/01/2005 Serial Coupon 5.750% 420,000 9/0112002 100.000% 92 Rev 9/0112006 Serial Coupon 5.750% 445,000 9/01/2002 100.000% 92 Rev 9/0112007 Serial Coupon 5.750% 475,000 9/0112002 100.000% 92 Rev 9/0112008 Serial Coupon 5.750% 500,000 9/0112002 100.000% 92 Rev 9/0112009 Serial Coupon 5.750% 530,000 9/0112002 100.000% 92 Rev 9/0112010 Serial Coupon 5.750% 565,000 9/0112002 100.000% 92 Rev 9/0112011 Serial Coupon 5.750% 600,000 9/0112002 100.000% 92 Rev 9/0112012 Serial Coupon 5.750% 630,000 9/0112002 100.000% Subtotal - - 4,165,000 - - - - - - - 94 Rev 9/0112006 Serial Coupon 5.750% 220,000 9/0112004 100.000% 94 Rev 9/01/2007 Serial Coupon 5.900% 235,000 9/01/2004 100.000% 94 Rev 9/0112008 Serial Coupon 6.000% 250,000 9/0112004 100.000% 94 Rev 9/01/2009 Serial Coupon 6.000% 265,000 9/0112004 100.000% 94 Rev 9/0112010 Serial Coupon 6.125% 280,000 9/01/2004 100.000% 94 Rev 9/0112011 Serial Coupon 6.125% 295,000 9/0112004 100.000% 94 Rev 9/0112012 Serial Coupon 6.125% 315,000 9/0112004 100.000% 94 Rev 9/01/2013 Serial Coupon 6.125% 330,000 9/0112004 100.000% Subtotal - - 2,190,000 - - - - - - - 95 Rev 9/01/2008 Serial Coupon 5.500% 105,000 9/01/2005 100.000% 95 Rev 9/0112009 Serial Coupon 5.600% 105,000 9/0112005 100.000% 95 Rev 9/0112010 Serial Coupon 5.700% 105,000 9/0112005 100.000% 95 Rev 9/01/2011 Serial Coupon 5.800% 105,000 9/0112005 100.000% 95 Rev 9/0112012 Serial Coupon 5.800% 105,000 9/01/2005 100.000% Subtotal - - 525,000 - - Total - - 6,880,000 - - I I I I I I I I I I I I First Southwest Company Public Finance File = SALES TAX SF-01 Rev Ref 052901*- SINGLE PURPOSE 5I29/200111:40AM I I I I I I I OFFICIAL STATEMENT Dated May 29, 2001 Ratings: Moody's: "Aaa" S&P: "AAA" (Financial Guaranty Insnred, see "Municipal Bond Insurance" and "Other Information - Ratinp" herein) I NEW ISSUE - Book-Entry..()nly In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax pwposes under existing law, subject to the matters descn"bed under "Tax Matters - Tax Exemption" herein, including the alternative minimum tax on corporations. I TIm BONDS WILL NOT BE DESIGNAlED AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITIITIONS I $7,305,000 NORTH RICHLAND IDLLS PARK. AND RECREATION FACILITIES DEVEWPMENT CORPORATION (Tarrant County) SALES TAX REVEN1Æ REFUNDING BONDS, SERIES 2001 Dated Date: June I, 2001 Due: September 1, as shown below I PAYMENT TERMs . . . Interest on the $7,305,000 North Richland Hills Pari< and Recreation Facilities Development Cotporation, Sales Tax Revenue Refunding Bonds, Series 2001 (the "Bonds") will accme from June I, 2001 (the "Dated Date"), and will be payable September I and March I of each year, commencing September I, 2001, and will be calculated on the basis of a 36O-day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and deUvered only to Cede & Co~ the nominee of The Depository Trust Company ("0Te") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the ownen thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds, See "The Bonds - Book-Entry-Ooly System" herein. The initial Paying Agent/Registrar is Bank One, NA, Fort Worth, Texas (see "The Bonds - Paying AgentlRegistrar"). AumoRITY FOR issuANCE. . . The Bonds are being issued by North Richland Hills Park and Recreation Facilities Development Corporatioo (the "Corporation") pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Slat., as amended (the "Act"), including Section 4B of the Act and Vemoo's Texas Codes Annotated ("V.T.CA"), Texas Govermnent Code, Chapter 1207, as amended. The Bonds and their tenDs are governed by the provisions of a resolution (the "Resolutioo") adopted by the Board of Directors of the Corporation (see "The Bonds - Authority for Issuance"). The Bonds are special obUgalÌons of the Corporation, payable from and, together with cer1ain outstanding Previously Issued Bonds, secured by a Uen on and pledge of certain Pledged Revenues which include the proceeds of a V. of 1% sales and use tax levied within the City of North Rich1and Hills, Texas (the "City") for the benefit of the Corpomtion (see "Selected Provisions of the Bond Resolution"). I I I I 17Ie &mds lire pøytl/JIe soIeI;y from the moneys ~ribetI ill the ResoIIItioll and IIOt from tIIIy other TeW!IfIIQ, propertiø or iIIcome of the CorpDrøtiøll. Neither the SúIte, TarrtIIII ColIIIIy, th~ City IIOt' tuIJ1 other po/iIicøl corportltioll, SlIbdivisioIf, or agem:y of the Støte slu1ll be oblJgøted tD pay the Boruls or the iIIœnst thøeolf, and 1Ieither the faith and credit 110' the tIIXûrg power of the SúIte, TarrtIIII CoIIIIIy, the City, 0' tIIIy political COrporatiDlI, SIIbtIMsiÐII, or agem:y thereof, aeepløs Ø1lthorized by Sectioll4B of the A~ is pledged tD the pay1lle1lt of the priIIciptIl of or iIIœnst 011 the BoNIs (see "17Ie BoNIs - Smuity and Source of PøymeIft"). PuRPosE. . . Proceeds &om the sale of the Bonds will be used to advance refund a portion of the Cmporation's outstanding debt, consisting of $4,165,000 Sales Tax Revenue Bonds, Series 1992, $2,190,000 Sales Tax Revenue Bonds, Series 1994, and $525,000 Sales Tax Revenue Bonds, Series 1995 (the "Refimded Bonds"), to lower interest costs on such obUgalÌons. See "Schedule I - Schedule of Reftmded Bonds" for a more detailed description of the Refunded Bonds. Proceeds from the sale of the Bonds will also be used to pay the costs associated with the sale of the Bonds. I I ml. FIDMdaJ Guonaty IDRD'IIIIœ r-.p-y 1tII:.................-......................~~.................~.....U&....._ 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 Financial Guaranty Insurance Company simultaneously with the deUvery of the Bonds. I MATURITY SCHEDULE Amount Maturity Rate Yield Amount Maturity Rate Yield - - S 85,000 2001 4.50% 2.900% S 890,000 2008 4.125% 4.27% 55,000 2002 4.50% 3.150% 920,000 2009 4.250% 4.40% 55,000 2003 4.50% 3.400% 960,000 2010 4.375% 4.50% 60,000 2004 4.00% 3.650% 995,000 2011 4.500% 4.60% 480,000 2005 3.80% 3.800% 1,030,000 2012 4.625% 4.75% 720,000 2006 4.00% 3.950% 300,000 2013 4.750% 4.88% 755,000 2007 4.00% 4.125% (Accrued Interest from June I, 2001 to be added) I I I OPTIONAL REDEMPTION. . . The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September 1,2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2011, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Optional Redemption"). 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 AUOIney General of Texas and the opinion of Fulbright & Jaworski L.L.P., Dallas, Texas (see Appendix C, "FolDI of Bond Counsel's Opinion"). Certain legal matters will be passed upon for the Underwriters by McCall, Parkhurst, and Horton LLP, Dallas, Texas, Counsel for the Underwriters. DELIVERY . . . It is expected that the Bonds will be available for delivery through The Depository Trust Company on July II, 200 I. I SOUTHWEST SECURITIES DAIN RAUSCHER INCORPORATED For purposes of compliance with Rule I5c2-I2 of the Securities Exchange Commission, this document constitutes an Official Statement of the Corporation with respect to the Bonds that has been deemed ''final'' by the Corporation as of its date exceptfor the omission of no more than the information permitted by Rule I5c2-I2. IN CONNECTION WlTH THIS OFFERING, THE UNDERWRITERS MAY OVER-AUOT OR EFFECT TRANSACTIONS WHICH STABILlZE THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZlNG, IF COMMENCED, MAY BE DISCONTINUED AT ANYTIME. This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawjùl to make such offer, solicitation or sale. No dealer, broker, salesperson or other person has been autharized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. Certain information set forth herein has been provided by sources other than the Corporation that the Corporation believes is reliable, but the Corporation makes no representation as to the accuracy of such i'!formation. Any information and expressions of opinion herein contained are subject to change withaut notice, and neither the delivery of the Official Statement nor any sale made hereunder shal~ under any circumstances, create any implication that there has been no change in the qffairs of the Corporation or other matters described herein since the date hereof See "Other Information - Continuing Disclosure of Information" for a description of the Corporation's undertaking to provide certain information on a continuing basis. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH THE REGISTRATION, QUAUFICATION. OR EXEMPTION OF THE BONDS IN ACCORDANCE WlTH APPUCABLE SECURITIES LAW PROVISIONS OF THE JURISDICTION IN WmCH THESE SECURITIES HAVE BEEN REGISTERED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THE CORPORATION 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. TABLE OF CONTENTS OFFICIAL STATEMENT SUMMARY......................... 3 CORPORATION OFFICIALS, STAFF AND CONSULTANTS..................................................... 5 THE CORPORATIONS' BOARD OF DIRECTORS .................5 THE CORPORATIONS' OFFICERS .....................................5 CONSULTANTS AND ADVISORS ......................................5 INTRODUCTION ............................................................ 7 PLAN OF FINANCING ................................................... 7 THE BONDS.............................................·......·······....··.... 8 BOND INSURANCE ......................................................15 DEBT INFORMATION................................................. 16 TABLE 1 - DEBT SERVICE REQUIREMENTS ..................16 THE SALES TAX........................................................... 17 TABLE 2 - HIsTORICAL RECEIPTS OF 1I2% SALES TAX LEVIED FOR TIlE CORPORATION .........................19 TABLE 3 - CALCULATION OF COVERAGE FOR TIlE ISSUANCE OF ADDmONAL BONDS .....................20 TABLE 4 - SALES TAX BREAKDOWN ............................21 SELECTED PROVISIONS OF THE BOND RESOLUTION ...................................................... 22 INVESTMENTS .............................................................28 TABLE 5 - CURRENT INVESTMENTS .............................29 TAX MATTERS ............................................................. 30 CONTINUING DISCLOSURE OF INFORMATION 31 OTHER INFORMATION ............................................. 32 RATINGS ...................................................................... 32 LmGATION ..................................................................32 REGIS1RATION AND QUALIFICATION OF BoNDS FOR SALE .................................................................. 33 LEGAL INVESlMENTS AND ELIGIBILITY TO SECURE PuBLIC FuNDs IN TExAs ................................... 33 LEGAL OPINIONS ......................................................... 33 FINANCIAL ADVISOR ................................................... 33 VERIFICATION OF A1UTHMETICAL AND MATHEMATICAL COMPUTATIONS ................................................. 34 UNDERWRITING ........................................................... 34 MIscELLANEOUS ......................................................... 34 SCHEDULE OF REFUNDED BONDS......SCHEDULE I APPENDICES GENERAL INFORMATION REGARDING THE CITY ........ A ExCERPTS FROM TIlE ANNuAL FINANCIAL REPoRT. B FORM OF BOND COUNSEL'S OPINION........................ 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. 2 I I OFFICIAL STATEMENT SUMMARY I This summary is subject in all respects to the more complete infonnation and definitions contained or incorporated in this Official Statement The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official Statement. I THE CORPORATION ..................... The Corporation is a non-profit industrial development corporation of the State, located in Tarrant County, Texas (see "Introduction - Description of Corporation"). I THE BONDs.................................. The Bonds are issued as $7,305,000 Sales Tax Revenue Refunding Bonds, Series 2001. The Bonds are issued as serial bonds maturing September I in the years 2001 through 2013 (see "The Bonds -Description of the Bonds"). I PAYMENT OF INTEREST .............. Interest on the Bonds accrues from June I, 2001, and is payable September 1,2001, and each March I and September I thereafter until maturity or prior redemption (see "The Bonds _ Description of the Bonds" and "The Bonds - Optional Redemption"). I AurnoRITY FOR ISSUANCE ......... The Bonds are being issued by the Corporation pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Stat, as amended, including Section 4B of the Act and Texas Government Code, Chapter 1207, as amended. The Bonds and their tenns are governed by the provisions of the Resolution adopted by the Corporation. I SECURITY FOR THE BoNDS .......... The Bonds are special obligations of the Corporation, and, together with certain outstanding Previously Issued Bonds, are payable solely ûom and equally and ratably secured only by a lien on and pledge of the Pledged Revenues which include the gross proceeds of a 1/2 of I % sales and use tax levied within the City of North Richland Hills, Texas for the benefit of the Corporation (see "The Bonds - Security and Source of Payment"). I I OPTIONAL REDEMPTION ............. The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 20 II, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Optional Redemption"). I TAX EXEMPTION ......................... In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under the caption "Tax Matters" herein, including the alternative minimum tax on corporations. I USE OF PROCEEDS ....................... Proceeds from the sale of the Bonds will be used to advance refund a portion of the Corporation's outstanding debt, consisting of $4,165,000 Sales Tax Revenue Bonds, Series 1992, $2,190,000 Sales Tax Revenue Bonds, Series 1994, and $525,000 Sales Tax Revenue Bonds, Series 1995 (the "Refunded Bonds"), in to lower interest costs of such obligations. See "Schedule I - Schedule of Refunded Bonds" for a more detailed description of the Refunded Bonds. Proceeds from the sale of the Bonds will also be used to pay the costs associated with the sale of the Bonds. I I I RATINGS ..................................... The Bonds are rated "Aaa" by Moody's Investors Service, Inc. ("Moody's") and "AM" by Standard & Poor's Ratings Services, A Division of the McGraw-Hill Companies, Inc. ("S&P") through an insurance policy to be issued by Financial Guaranty Insurance Company The uninsured sales tax revenue debt of the City is rated "AI" by Moody's and "A+" by S&P. The Corporation also has issues outstanding which are rated "Aaa" by Moody's and "AM" by S&P through insurance by various commercial insurance companies (see "Other Infonnation _ Ratings"). I I I I 3 BOOK-ENTRY-ONLY SYSTEM ...................................... The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying 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 Bonds (see "The Bonds - Book-Entry-Only System"). PAYMENT RECORD...................... The Corporation has never defaulted in payment of its sales tax revenue debt For additional information regarding the Corporation, please contact: Larry 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 4 I I CORPORATION OFFICIALS, STAFF AND CONSULTANTS THE CORPORATIONS' BOARD OF DIRECTORS I Length of Tenn Service Expires 3 May-02 2 May-O I 3 May-02 May-Ol 3 May-02 2 May-Ol 3 May-02 I Directors Don Phifer I Lyle Welch Charles Scoma Joe Tolbert I Dave Davis Mack Garvin I Scott Turnage, Jr. THE CORPORATIONS' OFFICERS I Officer Office Year Appointed President 1998 Vice President 1998 Secretary 1996 Assitant Secretary 1998 Treasurer 1996 I Larry J. Cunningham Randy Shiflet Patricia Hutson I Alicia Richardson Larry Koonce I CONSULTANTS AND ADVISORS I Auditors ... ... .... ............ ........ ................... ...... ................... ......... ........... ...... ..... ..... ....... .... .......... ................. Deloine and Touche, LLP Dallas, Texas I Bond Counsel........................................................................................................................................ Fulbright & Jaworski L.L.P. Dallas, Texas I Financial Advisor.... ........ ....... ..... ........ ........... ....... ............. ........................................ ....... .............. .......... First Southwest Company Fort Worth, Texas I I I I I 5 THIS PAGE LEFT BLANK INTENTIONALLY 6 I I OFFICIAL STATEMENT RELATING TO I $7,305,000 NORTH RICHLAND IDLLS PARK AND RECREATION FACILITIES DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2001 I INTRODUCTION I This Official Statement, which includes the Appendices hereto, provides certain infonnation regarding the issuance of $7,305,000 North Richland Hills Park and Recreation Facilities Development Corporation, Sales Tax Revenue Refunding Bonds, Series 2001. Capitalized tenns used in this Official Statement have the same meanings assigned to such terms in the Resolution to be adopted on the date of sale of the Bonds, except as otherwise indicated herein. I There follow in this Official Statement, descriptions of the Bonds and certain infonnation regarding the Corporation and its fmances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the Corporation's Financial Advisor, First Southwest Company, Dallas, Texas. I DESCRIYfION OF THE CORPORATION. . . The Corporation is a non-profit corporation duly organized and operating under the laws of the State of Texas, particularly Section 4B of the Act. The Corporation was created following an election held by the City of North Richland Hills (the "City"), on the question of the levy of a 1/2 of 1% local sales and use tax in the City for the benefit of the Corporation. The Corporation as currently organized is to promote and provide for the economic development within the City and the State of Texas to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the City by developing, implementing, providing, and financing projects under the Act and as defined in Section 4B of the Act. The City Council appoints the members of the Board of Directors of the Corporation and under the provisions of the Act is required to approve certain actions of the Corporation, including the issuance of the Bonds by the Corporation. I I I DESCRIPTION OF THE 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 Council/Manager fonn of government with a City Council comprised of the Mayor and seven Councilmembers. The term of office for the Mayor and the Councilmembers is two years with the terms of the Mayor and three of the Councilmembers' terms 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 1990 Census population for the City was 45,895, with a 2000 Census population of 55,635. The City covers approximately 18.29 square miles. I I I PLAN OF FINANCING I PuRPOSE. . . Proceeds from the sale of the Bonds will be used to advance refund a portion of the Corporation's outstanding debt, consisting of $4,165,000 Sales Tax Revenue Bonds, Series 1992, $2,190,000 Sales Tax Revenue Bonds, Series 1994, and $525,000 Sales Tax Revenue Bonds, Series 1995 (the "Refunded Bonds"), to lower the interest costs on such obligations. See "Schedule I - Schedule of Refunded Bonds" for a more detailed description of the Refunded Bonds. Proceeds from the sale of the Bonds will also be used to pay the costs associated with the sale of the Bonds. See Schedule I for a detailed listing of the Refunded Bonds and their respective call dates at par. I 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, from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement") between the Corporation and Bank One, NA, Fort Worth, Texas (the "Escrow Agent"). The Resolution provides that ITom the proceeds of the sale of the Bonds received from the Underwriters, the Corporation will deposit with the Escrow Agent the amount necessary 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 Ì1Tevocably pledged to the payment of the principal of and interest on the Refunded Bonds. I I I Grant Thornton, LLP, 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 I 7 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"). By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, the CotpOration will have effected the defeasance of all of the Refunded Bonds in accordance with applicable law. It is the opinion of Bond Counsel that as a result of such defeasance and in reliance upon the report of Grant Thornton, LLP, the Refunded Bonds will be outstanding only for the purpose of receiving payments from the Federal Securities and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be deemed as being outstanding obligations of the Corporation payable from and secured by a lien on and pledge of the Pledged Revenues or for any other purpose. The Corporation has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund, from lawfully available funds, of any additional amounts required to pay the principal of and interest on the Refunded Bonds, if for any reason, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund be insufficient to make such payment SOURCES AND USES OF PROCEEDS. . . The proceeds from the sale of the Bonds, together with a contribution from the Corporation, will be applied approximately as follows: Sources: Par Amount of Bonds Accrued Interest Transfers from Prior Issue Debt Service Funds $7,305,000.00 34,765.56 1,061,266.81 $8,401,032.37 Uses: Original Issue Discount Deposit to Escrow Fund Deposit to Debt Service Reserve Fund Deposit to Interest and Sinking Fund Costs ofIssuance (I) Total Uses of Funds $ 49,613.45 7,225,705.38 944,423.31 34,765.56 146,524.67 $8,401,032.37 (I) Includes underwriter's discount and bond insurance premium. THE BONDS DESCRIYfION OF THE BoNDS ... The Bonds are dated June I, 2001, and mature, or are subject to redemption prior to maturity, on September I in each of the years and in the amounts shown on the cover page hereof. Interest will be computed on the basis of a 360-day year of twelve 30-day months, and wiIl be payable on March I and September I of each year, commencing September I, 2001. The definitive Bonds will be issued only in fully registered fonn in any integral multiple of$5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying 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 Bonds. See "Book-Entry-Only System" herein. AUTHORITY FOR ISSUANCE . . . The Bonds are being issued by the Corporation pursuant to the Development Corporation Act of 1979, Article 5190.6, Tex. Rev. Civ. Stat. as amended ("the Act"), including Section 4B of the Act and V.T.CA, Texas Govemment Code, Chapter 1207, as amended. The Bonds and their tenns are governed by the provisions of a resolution (the "Resolution") adopted by the Corporation. SECURITY AND SOURCE OF PAYMENT . . . The Bonds are special obligations of the Corporation, and, together with certain outstanding bonds of the Corporation (the "Previously Issued Bonds"), are payable solely from and secured only by a lien on and pledge of the Pledged Revenues, which include the Gross Sales Tax revenues (as defined in the Resolution) received from the Sales Tax levied within the City that was approved and authorized at an election held within the City on August 8, 1992 for the benefit of the Corporation. After the refunding of the Refunded Bonds, there will be $3,460,000 of outstanding Previously Issued Bonds. The Bonds do not constitute a debt of the City, the State or any agency, political corporation or subdivision thereof. Neither the full faith and credit of the State, Tarrant County, the City or any agency, political corporation or subdivision thereof, has been pledged for the payment of the Bonds, except as described herein. 8 I I I Section 4B of the Act contains no provisions which would allow the voters of the Corpomtion to either reduce or repeal the Sales Tax. Should the Legislature ever enact such an amendment to Section 4B to allow for the reduction or repeal of the Sales Tax, the Texas Attorney General in Opinion No. DM-137 has opined that an amendment to such section of the Act which permits a "reduction in the sales tax rate, or a limitation on the amount of time the tax may be collected, may not be applied to any bonds issued prior to the date of the rollback election". In so ruling, the Attorney General noted any "subsequent legislation which purports to pennit the reduction or other limitation of that tax is ineffective to do so, because such alteration would impair the obligation of the contract between the city and such bondholders", and in effect be a violation of Article I, Section to of the United States Constitution and Article I, Section 16 of the Texas Constitution. I I Under current law, the principal amount of bonds and other obligations payable in whole or in part ftom the Sales Tax, together with the amount of the costs of the projects, other than interest on the bonds and other obligations, for which payment is made in cash directly ftom the proceeds of the Sales Tax may not in the aggregate exceed $135,000,000. Additionally, the Sales Tax may not be collected after the last day of the first calendar quarter occurring after notification to the State Comptroller of Public Accounts by the Corporation that all bonds or other obligations of the Corporation that are payable in whole or in part ftom the proceeds of the Sales Tax, including any refunding bonds or other obligations, have been paid in full or the full amount of money necessary to defease such bonds and other obligations has been set aside in a trust account dedicated to their payment I I PLEDGE UNDER RESOLUTION. . . The Corpomtion 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 Obligations, are pledged equally and ratably to the payment and security of the Previously Issued Bonds, the Bonds and Additional Obligations (as defined below), if issued, including the establishment and maintenance of the special funds created and established in the Resolution and any Supplemental Resolution. The Resolution further provides that the Parity Bonds (which consist of the Previously Issued Bonds, the Bonds and any Additional Obligations issued in the future) shall constitute a first lien on the Pledged Revenues in accordance with the tenns of the Resolution and any Supplemental Resolution, which lien shall be valid and binding without any further action by the Corpomtion and without any filing or recording with respect thereto except in the records of the Corporation. I I POSSIBLE AVOIDANCE OF PLEDGEO PAYMENT SOURCE IN BANKRUPTCY. . . Texas has adopted the 1998 revisions to Article 9 of the Unifonn Commercial Code (the "UCC"), to become effective July 1,2001. The revisions would for the first time provide means to perfect pledges by issuers of public securities, and, in addition, would make unperfected pledges subject to the interests of a bankruptcy trustee, whether or not the pledged collateral is exempt from judicial liens. Security interests arising before July I, 2001 that are not perfected by July I, 2002 will be considered unperfected pledges. For a number of reasons, it will be impractical and perhaps impossible to perfect the Corpomtion's pledge of the Pledged Revenues under the revised Article 9. Accordingly, after July I, 2002, it is possible that the Corporation could avoid its pledge of Pledged Revenues made in the Resolution to secure payments of the Parity Bonds, unless the Texas UCC is further amended, or other statutes are enacted, to avoid this result. Since the pledge may be legally unenforceable in the circumstances in which it would be most valuable, no person should rely upon the pledge as providing asset security or a preference right in the event that the Corpomtion should become insolvent. I I I Even under the 1998 UCC revisions, the rights of holders with respect to the pledged payment sources under the Resolution, and other covenants of the Corpomtion made in the Resolution are valid and enforceable except in the event of bankruptcy. Thus, for example, outside of the occurrence of bankruptcy, bondholders may enforce the obligation of the Corpomtion to apply the Pledged Revenues to pay holders of the Bonds, as described above (see "The Bonds B Security and Source of Payment"). Moreover, the Corpomtion is aware that proposed legislation has been introduced for consideration by the Texas Legislature in the legislative session that begin January 9, 2001 to amend Texas law to avoid the results of the adoption of the 1998 UCC revisions mentioned above. No assurance can be given, however, that any such legislation will be adopted by the Texas Legislature. I I I AoOmONAL BoNDS . . . In the Resolution, the Corpomtion reserves the right to issue additional bonds, notes or other obligations ("Additional Obligations") payable from and equally and ratably secured by a parity lien on and pledge of the Pledged Revenues subject to satisfYing certain tenns and conditions including obtaining a certificate or opinion ftom a certified public accountant to the effect that, according to the books and records of the Corporation, the Gross Sales Tax Revenues received by the Corporation for the last completed Fiscal Year or for any twelve consecutive months out of the eighteen months next preceding the adoption of the resolution authorizing the issuance of the Additional Obligations were equal to not less the 1.5 times the Average Annual Debt Service for all Parity Bonds then outstanding after giving effect to the issuance of the Additional Obligations then being issued. See "Selected Provisions of the Bond Resolution - Issuance of Additional Parity Obligations." I I THE PLEDGED REVENUE FuND . . . Under the tenns of the Act and the Resolution, the Gross Sales Tax Revenues collected by the State Comptroller of Public Accounts are remitted periodically to the City for the benefit of the Corporation and upon receipt by the City the same are to be deposited to the credit of a fund or account of the Corporation known as the "Pledged Revenue Fund". I As explained below under "Flow of Funds", the Gross Sales Tax Revenues held in the Pledged Revenue Fund are first to be used to make payments to the Bond Fund in amounts equal to one hundred percent (100010) of the interest on and principal of the Previously Issued Bonds and the Bonds then falling due and payable. I 9 GENERAL COVENANT REGARDING THE SALES TAX . . . The Municipal Sales and Use Tax Act provides that the Sales Tax does not apply to the sale of a taxable item unless the item is also taxable under the Texas Limited Sales, Excise and Use Tax Act. The Sales Tax is therefore subject to a broadening and reduction in the base against which it is levied by action of the State Legislature without the consent of the City or the Corporation. In the Resolution, the Corporation covenants and agrees that, while any Bonds are outstanding, it will take all legal means and actions pennissible to cause the Sales Tax, at its cum:nt rate (1/2 of 1%) or at a higher rate if legally permitted, to be levied and collected continuously throughout the boundaries of the City, as such boundaries may be changed ftom time to time, in the manner and to the maximum extent legally permitted; and to cause no reduction, abatement or exemption in the Sales Tax until all the Bonds have been paid in full or until they are lawfully defeased in accordance with the Resolution. The Corporation also covenants and agrees that, if, subsequent to the issuance of the Bonds, the City is authorized by applicable law to impose and levy the Sales Tax on any items or transactions that are not subject to the Sales Tax on the date the Resolution was adopted, then the Corporation will use its best efforts to cause the City to take such action as may be required by applicable law to cause the use or sale of such items or transactions to be subject to Sales Tax. OPTIONAL REDEMPTION. . . The Corporation reserves the right, at its option, to redeem Bonds having stated maturities on and after September 1,2012, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September 1, 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 are to be redeemed, the Corporation may select the maturities of Bonds to be redeemed. If less than all the Bonds of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Bonds are in Book-Entry-Only fonn) shall detennine by lot the Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. NOTICE OF REDEMPfION . . . Not less than 30 days prior to a redemption date for the Bonds, the Corporation shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying AgentlRegistrar 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, IRRESPECTIVE OF WHETHER ONE OR MORE REGISTERED OWNERS FAILED TO RECEIVE SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON TIIE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION TIIEREOF SHALL CEASE TO ACCRUE. FLow OF FuNDs .,. The Resolution affmns the establishment and maintenance of the following funds and accounts for the application of the proceeds of the Bonds and for the Pledged Revenues with all revenues flowing first to the Gross Sales Tax Revenue Fund: PRIORITY First Priority PLEDGED REVENUE FUND FUND (1) Debt Service Fund for the payment of the Parity Bonds Second Priority Reserve Fund to provide and maintain the Required Reserve Third Priority Any other fund required by any resolution authorizing issuance of Additional Obligations Fourth Priority Any other fund created for the payment of obligations having a lien subordinate to the lien on the Parity Bonds. Fifth Priority Capital Improvement Fund for paying costs of authorized projects due for paying other lawful Corporation purposes. (1) All funds are held by the Corporation's Depository Bank. See "Selected Provisions of the Resolution" herein for additional infonnation relating to the flow offunds. 10 I I I DEBT SERVICE RESERVE REQUlREMENf . . . The Corporation agrees and covenants to maintain a special fund or account known as the "Reserve Account" (the "Reserve Fund"), which 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 purpose 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 tenn is defined in the Resolution herein. I I In accordance with the provisions of the resolutions authorizing the issuance of the Previously Issued Bonds, there is currently on deposit to the credit of the Reserve Fund the sum of $1,190,000 (the "Current Reserve"), and by reason of the issuance of the Bonds, the total amount required to be accumulated and maintained in the Reserve Fund is hereby predetermined to be $1,163,896 (the "Required Reserve"), which amount is less than the Current Reserve. Upon the issuance of the Bonds, the Current Reserve shall be reduced to the Required Reserve. I As and when Additional Bonds are delivered or incurred, the Required Reserve shall be increased, as required, to an amount equal to the Average Annual Debt Service (calculated on a Fiscal Year basis) for all Parity Bonds then Outstanding (after giving effect to the issuance of the Additional Bonds). Any additional amount required to be maintained in the Reserve Fund shaH be so accumulated by the deposit in the Reserve Fund of all or any part thereof in cash immediately after the delivery of the then proposed Additional Bonds. I During such time as the Reserve Food contains the total Required Reserve, the Corporation may, at its option, withdraw all surplus in the Reserve Food in excess of the Required Reserve and deposit such surplus in the Pledged Revenue Food. I BOOK-ENI'RY-ONLY SYSTEM. . . This section describes how ownership of the Bonds are to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and credited by The Depository Trust Company ("DTC"), New York, New York, while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The Corporation believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof. I I The Corporation cannot and does not give any assurance that (1) DTC wiII distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they wiII do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be foHowed in dealing with DTC Participants are on file with DTC. I I DTC wiII act as securities depository for the Bonds. The Bonds wiII be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered certificate will be issued for each maturity of the Bonds in the aggregate principal amooot of each such maturity and wiII be deposited with DTC. I DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing Corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accooots, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing Corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. I I I Purchases of Bonds under the DTC system must be made by or through DTC Participants, which wiII receive a credit for such purchases on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct or Indirect Participants' records. Beneficial Owners wiII not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event tbat use of the book-entry system described herein is discontinued. I I I II To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Corporation as soon as possible after the Record Date (hereinafter dermed). The Omnibus Proxy assigns Cede & Coo's consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying AgentlRegistrar or the Corporation, 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 Corporation, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Corporation. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered. The Corporation may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry Only System, and (ii) except as described above, notices that are to be given to registered owners under the Resolution will be given only to DTC. Information concerning DTC and the Book-Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Corporation or the Underwriters. PAYING AGENT/REGISTRAR. . . The initial Paying AgentlRegistrar is Bank One, NA, Fort Worth, Texas. In the Resolution, the Corporation retains the right to replace the Paying AgentlRegistrar. The Corporation covenants to maintain and provide a Paying AgentlRegistrar at all times until the Bonds are duly paid and any successor Paying AgentlRegistrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying AgentlRegistrar for the Bonds. Upon any change in the Paying AgentlRegistrar for the Bonds, the Corporation agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying AgentlRegistrar. Interest on the Bonds shall be paid to the registered owners appearing on the registration books of the Paying AgentlRegistrar at the close of business on the Record Date (hereinafter defined), and such interest shall be paid (I) by check sent United States Mail, first class postage prepaid to the address of the registered owner recorded in the registration books of the Paying AgentlRegistrar or (ii) by such other method, acceptable to the Paying AgentlRegistrar requested by, and at the risk and expense of, the registered owner. Principal of the Bonds will be paid to the registered owner at their stated maturity or earlier redemption upon presentation to designated payment/transfer office of the Paying AgentlRegistrar. 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 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. 12 I I I TRANSFER, EXCHANGE AND REGISTRATION. . . In the event the Book-Entry-Only System should be discontinued, printed Bonds will be delivered to the registered owners of the Bonds and thereafter the Bonds may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Bonds may be assigned by the execution of an assignment fonn on the respective Bonds or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bonds being transferred or exchanged, at the designated office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be canceled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in fonn satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Bonds surrendered for exchange or transfer. See "Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Bonds. Neither the Corporation nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond. I I I I RECORD DATE FOR INTEREST PAYMENT. . . The record date ("Record Date") for the interest payable on the Bonds on any interest payment date means the close of business on the 15th day of the preceding month. 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 Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. I I DEFEASANCE OF BoNDS. . . The Bonds will be deemed paid within the meaning Resolution when (i) money, (ii) Government Securities or (iii) a combination of money and Government Securities shall have been irrevocably deposited in trust with an authorized escrow agent, and the deposit of such money and/or Government Securities, together with investment earnings on such Government Securities, have been certified by an independent accounting finn to be sufficient, without reinvestment, to pay in full the Bonds at their Stated Maturities. In the Resolution the Corporation shall covenant that no deposit of moneys or Government Securities will be made 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. The tenn "Government Securities" is defined as (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 District 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 acquisition or purchase by the District, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. Upon making such deposit in the manner described, such Bonds shall no longer be deemed outstanding obligations of the Corporation secured by the Resolution, but will be payable only from the funds and Government Securities deposited in escrow. I I I I AMENDMENTS. . . The Corporation may amend the Resolution without the consent of or notice to any registered owner in any manner not detrimental to the interests of the registered owners, including the curing of any ambiguity, inconsistency, or formal defector omission therein. In addition, the Corporation may with the written consent of the holder of a majority of aggregate principal amount of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions of the Resolution; except that, without the consent of the registered owners of the Bonds affected, no such amendment, addition or rescission may (i) 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, or the rate of interest thereon, or in any other way modify the tenns 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 required to be held by Holders for consent to any such amendment, addition, or rescission. I I I I I 13 BoNDHOLDERS' REMEDIES. .. The Resolution does not establish specific events of default with respect to the Bonds. Although a registered owner of Bonds could obtain a judgment against the Corporation if a default occurred in the payment of principal of or interest on any such Bonds, the only property of the Corporation available to pay such judgement is the pledged revenues. The Resolution does not provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the Corporation to perform in accordance with the terms of the Resolution, or upon any other condition. Furthermore, the Corporation is eligible to seek relief from its creditors under the U.S. Bankruptcy Code and may be subject to involuntary bankruptcy under the U.S. Bankruptcy Code. The Bankruptcy Code includes an automatic stay provision that could prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of an entity that has become subject to the provisions of the Bankruptcy Code. See "Possible Avoidance of Pledged Payment Source in Bankruptcy" herein. Therefore, should the Corporation become subject to an action governed by the provisions of the Bankruptcy Code, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Resolution and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. (The remainder of this page left blank intentionally.) 14 I I BOND INSURANCE I Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial Guaranty") will issue its Municipal Bond New Issue Insurance Policy for the Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and interest is due or on the business day next following the day on which Financial Guaranty shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of such amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such owner's rights to payment of such principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any payment of principal or interest made to an owner of a Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final. nonappealable order of a court having competent jurisdiction. I I I I The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Bonds. The Policy covers failure to pay principal of the Bonds on their respective stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other date on which the Bonds may have been otherwise called for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated date for its payment. I Generally, in connection with its insurance of an issue of municipal securities, Financial Guaranty requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holders may not exercise such rights without Financial Guaranty's consent, in each case so long as Financial Guaranty has not failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to Financial Guaranty's consent. The specific rights, if any, granted to Financial Guaranty in connection with its insurance of the Bonds are set forth in the description of the principal legal documents appearing elsewhere in this Official Statement. Reference should be made as well to such description for a discussion of the circumstances, if any, under which the Issuer is required to provide additional or substitute credit enhancement, and related matters. I I I This Official Statement contains a section regarding the ratings assigned to the Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Bonds. Reference should be made to the description of the City for a discussion of the ratings, if any, assigned to such entity's outstanding parity debt that is not secured by credit enhancement. I The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. I Financial Guaranty is a wholly-owned subsidiary ofFGIC Corporation (the "Corporation"), a Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by the State of New York Insurance Department. As of December 31, 2000, the total capital and surplus of Financial Guaranty was approximately $1.089 billion. Financial Guaranty prepares fmancial statements on the basis of both statutory accounting principles and generally accepted accounting principles. Copies of such financial statements may be obtained by writing to Financial Guaranty at 115 Broadway, New York, New York 10006, Attention: Communications Department (telephone number: 212-312-3000) or to the New York State Insurance Department at 25 Beaver Street, New York, New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau (telephone number: 212-480-5187). I I I I I I 15 TABLE 1 - DEBT SERVICE REQUIREMENTS DEBT INFORMATION Fiscal Year Ended 9/30 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Outstanding Debt (I) Principal Interest Total $ 610,000 $ 405,649 $ 1,015,649 640,000 158,893 798,893 670,000 121,845 791,845 700,000 84,493 784,493 315,000 45,255 360,255 105,000 27,878 132,878 105,000 22,208 127,208 16,538 16,538 16,538 16,538 16,538 16,538 16,538 16,538 16,537 16,537 16,538 121,538 11,025 116,025 5,513 110,513 105,000 105,000 105,000 Principal $ 85,000 55,000 55,000 60,000 480,000 720,000 755,000 890,000 920,000 960,000 995,000 1,030,000 300,000 The Bonds (2) Interest (2) $ 78,223 $ 309,065 306,590 304,115 301,715 283,475 254,675 224,475 187,763 148,663 106,663 61,888 14,250 Total 163,223 364,065 361,590 364,115 781,715 1,003,475 1,009,675 1,114,475 1,107,763 1,108,663 1,101,663 1,091,888 314,250 Total Outstanding Debt $ 1,178,871 1,162,958 1,153,435 1,148,608 1,141,970 1,136,353 1,136,883 1,131,013 1,124,300 1,125,200 1,118,200 1,108,425 435,788 116,025 110,513 $ 3,460,000 $ 981,981 $ 4,441,981 $ 7,305,000 $ 2,581,558 $ 9,886,558 $ 14,328,539 %of Principal Retired 34.09% 75.48% 100.00% (1) Excludes the Refunded Bonds. (2) Average life of the issue - 8.122 years. Interest on the Bonds have been calculated at the rates illustrated on the cover page hereof. (Fhe reminder of this page left blank intentionally.) 16 I I THE SALES TAX I SOURCE AND A1.TI1IORIZATION . . . The Sales Tax is a 112 of 1 % limited sales and use tax imposed on all taxable transactions within the City as approved at the Election. The Sales Tax is authorized to be levied and collected against the receipts from the sale at retail of taxable items within the City. The Sales Tax also is an excise tax on the use, storage or other consumption of taxable tangible personal property purchased, leased or rented from a retailer within the City. The City currently levies another sales and use taxes for City and Crime District (as described below) purposes which aggregate 1 112% in accordance with State law, which, together with the Sales Tax, is the maximum local sales and use taxes that may be levied under current State law. The imposition, computation, administration, governance, abolition and use of the Sales Tax is govemed by the Texas Limited Sales, Excise, and Use Tax Act except to the extent that there is conflict with the Act, in which case the provisions of the Act control as to the Bonds, and by the Municipal Sales and Use Tax Act, and reference is made thereto for a more complete description of the Sales Tax. I I In general, as applied to the Sales Tax, a taxable item includes any tangible personal property and certain taxable services. "Taxable services" include certain amusement services, cable television services, motor vehicle parking and storage services, the repair, maintenance and restoration of most tangible personal property, certain telecommunication services, credit reporting services, debt collection services, insurance services, infonnation services, real property services, data processing services, real property repair and remodeling and security services. Certain items are exempted by State law from sales and use taxes, including items purchased for resale, food products (except food products which are sold for immediate consumption, e.g. by restaurants, lunch counters, etc.), health care supplies (including medicines, corrective lens and various therapeutic appliances and devices), agricultural items (if the item is to be used exclusively on a farm or ranch or in the production of agricultural products), gas and electricity purchased for residential use (unless a city has taken steps to repeal the exemption), certain telecommunications services, newspapers and magazines. In addition, items which are taxed under other State laws are generally exempted from sales taxes. These items include certain natural resources, cement, motor vehicles and insurance premiums. Alcohol and tobacco products are taxed under both State alcohol and tobacco taxes as well as through the sales taxes. In addition, purchases made by various exempt organizations are not subject to the sales and use taxes. Such organizations include the federal and state governments, political subdivisions, Indian tribes, religious institutions and certain charitable organizations and non-profit corporations. Also, State law provides an exemption from sales taxes on items purchased under a contract in effect when the legislation authorizing such tax (or the increase in the rate thereof) is enacted, up to a maximum of three years. I I I I I In general, a sale of a taxable item is deemed to occur within the municipality, county or special district in which the sale is consummated. The tax levied on the use, storage or consumption of tangible personal property is considered to be consummated at the location where the item is first stored, used or consumed. Thus, the use is considered to be consummated in a municipality, and the tax is levied there if the item is shipped from outside the state to a point within the municipality. I In addition to the local sales and use taxes levied, as described above, the State levies and collects a 6-114% sales and use tax against essentially the same taxable items and transactions as the Sales Tax is levied. Under current State law, the maximum aggregate sales and use tax which may be levied within a given area by an authorized political subdivision within such area, including the State, is 8 y. %. The current aggregate sales and use tax levied in the City is 8.25% of which 6.25% is levied by the State, 1% is levied by the City, 112 of 1% is levied as the Sales Tax, and 112 of 1% is levied by the North Ricbland Hills Crime Control and Prevention District (the "Crime District"). In accordance with State law, the Crime District sales tax will sunset after five years, unless it is renewed by a subsequent referendum. The City has called a referendum on May 5, 2001 to renew the Crime District sales tax for a ten year period. I I The Comptroller administers and enforces all sales tax laws and collects all sales and use taxes levied by the State, and levying counties, municipalities and other special districts having sales tax powers. Certain limited items are taxed for the benefit of the State under nonsales tax statutes, such as certain natural resources and other items described above, and are not subject to the sales tax base available to municipalities and counties, including the tax base against which the Sales Tax is levied. Municipalities may by local option detennine to tax certain telecommunication services on the same basis as the State taxes such services (some aspects of telecommunication services, such as interstate telephone calls and broadcasts regulated by the FCC are not subject to either State or local taxation). The City has opted to repeal the local telecommunication services exemption. With respect to the taxation of the residential use of gas and electricity, the State is not authorized to collect a sales tax, while municipalities, on a local option basis, may tax such use. The City has opted to tax the residential use of gas and electricity. I I I In recent years, several changes have occurred with respect to the State sales tax laws which have increased local sales tax revenues or reduced such revenues. Some changes have added additional goods and services to the list of taxable items. Other items that have been subject to the sales tax have been phase-out of the tax, including tangible personal property used in manufacturing, processing or fabrication operations with a useful life of at least six months that became totally exempt from the sales tax in 1995. Subject to the right of the governing body of the City to repeal the sales tax holiday, during a three day period in August of each year beginning with the first Friday, articles of clothing or footwear with a cost less than $100 are exempt from the sales tax. I I Effective October 1, 1999, the first $25 of a monthly charge for Internet access is exempt from sales tax, as is 20% of the value of infonnation services and data processing services. Beginning April I, 2000, no sales tax will be due on over-the-counter drugs and medicines labeled with a national FDA drug code. I 17 With certain exceptions, sales and use taxes in the State are collected at the point of sale and are remitted to the Comptroller by the "taxpayer" who is, generally speaking, the business that collects the tax resulting wm a taxable transaction. Taxpayers owing $500 or more sales and use tax dollars in a calendar month submit their tax collections to the Comptroller on a monthly basis; taxpayers owing less than $500 sales and use tax dollars in a calendar month but $1,500 or more in a calendar quarter submit their tax collections quarterly; and taxpayers owing less than $1,500 in a calendar quarter submit their tax collections annually. Taxpayers are required to report and remit to the Comptroller by the 20th day of the month following the end of the reporting period. The reporting period for yearly filers ends each December 31; for quarterly filers, the reporting period ends at the end of each calendar quarter; and monthly filers report and remit by the 20th of each month for the previous month. The Comptroller is required by law to distribute funds to the receiving political subdivisions periodically and as promptly as feasible but not less frequently than twice during each fiscal year of the State. Historically, and at the present time, the Comptroller distributes the funds monthly with the largest payments being made quarterly in February, May, August and November. In 1989, the Comptroller initiated a direct deposit program using electronic funds transfers to expedite the distribution of monthly allocation checks. If a political subdivision desires to participate in the electronic funds transfers, it may make application to the Comptroller. The City participates in this program. Otherwise, the Comptroller mails the monthly allocation check, which is typically received by the middle of the month following the month in which the taxpayer reports and remits payment on the tax. The Comptroller is responsible for enforcing the collection of sales and use taxes in the State. Under State law, the Comptroller utilizes sales tax pennits, sales tax bonds and audits to encourage timely payment of sales and use taxes. Each entity selling, renting, leasing or otherwise providing taxable goods or services is required to have a sales tax permit Pennits are required for each individual location of a taxpayer and are valid for only one year, requiring an annual renewal. As a general rule, every person who applies for a sales tax pennit for the first time, or who becomes delinquent in paying the sales or use tax, is required to post a bond in an amount sufficient to protect against the failure to pay taxes. The Comptroller's audit procedures include auditing the largest 2% of the sales and use tax taxpayers (who report about 65% of all sales and use tax in the State annually), each every three or four years. Other taxpayers are selected at random or upon some other basis for audits. The Comptroller also engages in taxpayer education programs and mails a report to each taxpayer before the last day of the month, quarter or year that it covers. Once a taxpayer becomes delinquent in the payment of a sales or use tax, the Comptroller may collect the delinquent tax by using one or more of the following methods; (i) collection by an automated collection center or local field office, (ii) estimating the taxpayers' liability based on the highest amount due in the previous 12 months and billing them for it, (iii) filing liens and requiring a new or increased payment bond, (iv) utilizing forced collection procedures such as seizing assets of the taxpayer (e.g., a checking account) or freezing assets of the taxpayer that are in the custody of third parties, (v) removing a taxpayer's sales and use tax permit, and (vi) certifYing the account to the Attorney General's Office to file suit for collection. A municipality may not sue for delinquent taxes unless it joins the Attorney General as a plaintiff or unless it first receives the permission of the Attorney General and the Comptroller. The Comptroller retains 2% of the tax receipts for collection of the tax; additionally, under State law, a taxpayer may deduct and withhold 112% of the amount of taxes due on a timely return as reimbursement for the cost of collecting the sales and use taxes. In addition, a taxpayer who prepays its tax liability on the basis of a reasonable estimate of the tax liability for a month or quarter in which a prepayment is made, may deduct and withhold 1 1/4% of the amount of the prepayment in addition of the 112% allowed for the cost of collecting the sales and use tax. INVEsTOR CONSIDERATIONS. . . The primary source of security for the Bonds will be certain receipts of the Sales Tax received by the City for the benefit of the Corporation. The amount of revenues ftom the Sales Tax is closely related to the amount of economic activity in the City. Sales and use tax receipts, unlike other taxes levied by municipalities, immediately reflect changes in the economic conditions of a municipality. Increases in Internet sales may result in a decrease in Sales Tax revenues to the Corporation. The emergence of Internet sales and services and issues related to taxation of such sales and services have been the subject of review and study at the state and nationa11evel. In October, 1998, the United States Congress enacted the Internet Tax Freedom Act which provided a three year moratorium on certain aspects of taxation of the Internet (existing taxes imposed by Texas were exempted from the moratorium). Legislative changes relating to the taxation of Internet sales and services, and any effect of such changes on the Sales Tax received by the Corporation, cannot be predicted at this time. Historically, the Comptroller has remitted sales and use tax allocation checks to municipalities on a monthly basis, but State law currently requires that such allocation be made at least twice annually and such procedures could change in the future. Additionally, the taxable items and services subject to State and local sales and use taxes are subject to legislative action, and have been changed in recent years by the State Legislature. State law provides that the Sales Tax can not be levied against any taxable item or service unless such item or service is also subject to the State sales and use tax. In recent years the State Legislature has enacted laws pennitting the State, together with its political subdivisions, to levy sales and use taxes of up to 8 1/40/0, which is among the highest sales tax rates in the nation (although the State has no personal or corporate income tax), and the current total sales and use tax rate within the City's boundaries is 8 1/4% (including State and City taxes as well as the Sales Tax). The rate of the sales and use taxes authorized in the State could be further increased by the State Legislature and the Corporation has no way of predicting any such increase or the effect that would have on the Sales Tax which secures the Bonds. State leaders have appointed committees to study methods of achieving greater tax equity within the State's tax system. Any changes which may be enacted by the State Legislature could effect the tax base against which the Sales Tax is levied; and the City (and 18 I I I hence the Corporation as the beneficiary of the City's action), except in certain limited instances described above, has no control over the components of the tax base. Neither the City nor the Corporation currently has statutory authority to increase or decrease the maximum authorized rate of the Sales Tax. Tax receipts received by the Corporation are expected to be subject to seasonal variations and to variations caused by the State laws and administrative practices governing the remittance of sales and use tax receipts which authorize different taxpayers to remit the tax receipts at different times throughout the year. I I The Sales Tax is collected by the Comptroller and remitted to the City along with other City sales and use tax receipts. The City allocates a portion of the receipts to the Corporation, which represents the 1/2% of 2% tax rate of the Sales Tax. Generally, sales and use taxes in the State are collected at the point of a taxable transaction and remitted by the taxpayer to the Comptroller. The Comptroller has the primary responsibility for enforcing sales and use tax laws and collecting delinquent taxes (see "The Sales Tax"). The collection efforts of the Comptroller are subject to applicable federal bankruptcy code provisions with respect to the protection of debtors. I Changes in the tax base against which a sales and use tax is assessed, as well as changes in the rate of such taxes, make projections of future tax revenue collections very difficult. No independent projections have been made with respect to the revenues available to pay debt service on the Bonds. I I TABLE 2 - HISTORICAL RECEIPfS OF 1/2% SALES TAX LEVIED FOR mE CORPORATION Following is a listing of the Corporation's receipts of the 112 of 1% limited sales and use tax: I Month Year Year Year Year Year of Ending Ending Ending Ending Ending Receipt 9/30/00 9/30/99 9130198 9/30/97 9/30/96 October $ 257,095 $ 241,195 $ 237,342 $ 227,666 $ 241,243 November 428,879 416,072 375,767 399,264 356,729 December 309,338 263,655 234,472 206,920 209,252 January 278,849 260,973 239,018 211 ,244 220,150 February 540,505 539,822 510,511 486,649 457,018 March 302,602 258,047 231,097 227,539 207,917 April 279,197 248,023 203,928 202,229 229,901 May 434,287 425,810 379,415 367,399 372,413 June 288,059 276,295 256,079 236,757 230,428 July 299,517 269,201 248,831 226,502 228,388 August 456,029 427,539 402,499 377,214 360,936 September 317,836 276,109 258,713 271,276 247,043 Annual Totals $4,192,193 $3,902,743 $ 3,577,673 $ 3,440,659 $ 3,361,415 I I I I I I I I I I (The remainder o/this page left blank intentionally.) 19 TABLE 3 - CALCULATION OF COVERAGE FOR THE issUANCE OF ADDmONAL BoNDS Calendar Year 2000 Month of Receipt January Febmay March April May June July August September October November December Monthly Collections $ 1,115,395 2,162,019 1,210,406 1,116,789 1,737,149 1,152,235 1,198,070 1,824,116 1,271,345 1,189,001 1,746,597 1,387,342 $17,110,462 Collections of the 112 Cent Sales Tax for Purposes of Calculating Coverage<l) $ 278,849 540,505 302,602 279,197 434,287 288,059 299,517 456,029 317,836 297,250 436,649 346,836 $ 4,277,615 (1) As described under "The Bonds - Additional Bonds," the resolutions pursuant to which the Previously Issued Bonds were issued provides that the coverage calculation may be made on the basis of Sales Tax receipts during any twelve consecutive month period during the 18 months immediately preceding the issuance of the Additional Bonds. Table 2, above, shows Sales Tax collections on a fiscal year basis. Average Annual Principal and Interest Requirements, 2001 - 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 955,236 Coverage of Average Annual Requirements by Actual Annual Sales Tax Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . 4.48x Maximum Principal and Interest Requirements, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,178,871 Covemge of Maximum Requirements by Actual Annual Sales Tax Receipts. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 3.63x Interest and Sinking Fund, 3/1101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 336,698 Reserve Fund Balance, 3/1101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,190,000 (The remainder of this page left blank intentionally.) 20 I I I TABLE 4 - SALES TAX BREAKDOWN The table below provides data with respect to the composition of the sales and use tax base in the City. SALES TAX BREAKDOWN I Division Agriculture, Forestry and Fishing Construction Manufacturing Transportation and Public Utilities Wholesale Trade Retail Trade Finance, Insurance and Real Estate Services I I I % of 1999 Sales Tax 0.46% 2.37% 1.53% 1.16% 2.41% 85.03% 0.04% 7.00% % of 2000 Sales Tax 0.47% 2.39% 1.50% 1.18% 2.45% 84.05% 0.05% 7.97% BREAKDOWN- BY RETAIL CLASSIFICATION I Retail Class Building Materials and Garden Supplies General Merchandise Stores Food Stores Automotive Dealers and Service Stations Apparel and Accessory Stores Furniture and Home Furnishing Stores Eating and Drinking Places Miscellaneous I I I I Source: Texas Comptroller of Public Accounts I I I I I I I % of 1999 Retail Trade 12.88% 22.96% 5.01% 4.47% 8.79«'10 16.96% 14.49«'10 14.44% 21 % of 2000 Retail Trade 12.69«'10 23.21% 5.59% 4.64% 8.09% 17.10% 14.43% 14.25% SELECTED PROVISIONS OF THE BOND RESOLUTION The following are certain provisions of the Resolution. These provisions are not to be considered a full statement of the terms of the Resolution. Accordingly, these selected provisions are qualified in their entirety by reference to the Resolution and are subject to the full text thereof. Capitalized terms used in these provisions have the respective meaning set forth in the defmitions of terms contained elsewhere in the Official Statement. 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. "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 Richland Hills Park and Recreation Facilities Development Corporation Sales Tax Revenue Refunding Bonds, Series 200 1", dated June I, 200 I, 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 fmancial institution eligible and qualified to serve as the custodian of the Corporation's monetary accounts and funds. "Fiscal Year" - The twelve month fmancial 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" - Direct obligations of the United States of America, including obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States of America. "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: 22 I I (I) 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; I (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. I (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. I I "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. I "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 I, 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 I, 1995, and issued in the original aggregate principal amount of $2,000,000. I "Required Reserve" - The amount required to be accumulated and maintained in the Reserve Fund under the provisions of Section 14 hereof. I "Sales Tax" - The local sales and use tax authorized under Section 48 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 I, 1993, together with any increases in the rate of such Sales Tax authorized and provided by law. I I "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. I 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. I I I Pledged 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: I I 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. I 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. I 23 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 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. 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. 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. 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 $1,190,000 (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 predetermined to be $1,163,896 ("Required Reserve), which amount is less than the Current Reserve. As and when Additional Obligations are delivered or incurred, the Required Reserve shall be increased, if required, to an amount equal to the Average Annual Debt Service (calculated on a Fiscal Year basis) for all Parity Bonds then Outstanding (after giving effect to the issuance of the Additional Obligations), as detennined 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 1I36th 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. 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. 24 I I I 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 AgentlRegistrar, 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 AgentlRegistrar for the Bonds at the close of the business day next preceding the date of payment for the Bonds. I 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.CA, Government 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 trom 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 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. I I I I 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. I 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, trom 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: I (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. I I (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. I I I (3) The Required Reserve to be accumulated and maintained in the Reserve Fund is increased to the extent required. I 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. I 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 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. I I 25 Confirmation and Levy 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 pennitted 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. Records and Accounts. While any of the Bonds are Outstanding, the Corporation agrees to keep and maintain complete fmancial 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 flnn 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 fonn of a report and be accompanied by an opinion of the accountant to the effect that such 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. Representations as to Security 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 legally enforceable obligations of the Corporation in accordance with their tenns 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. 26 I I (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 pennitted by the Act. I (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. I (t) 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. I 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 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. I I 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) Government 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. I I I Any moneys so deposited with the Paying AgentJ 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. Furthennore, 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. I I I 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 (I) 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. I I I I I I 27 INVESTMENTS The Corporation is a nonprofit corporation acting on behalf of the City and is subject to the provisions of the Public Funds Investment Act (V.T.CA, Government Code, (Ch. 2256). The funds of the Corporation are invested by the City in investments authorized by Texas law and in accordance with investment policies approved by the Board of Directors of the Corporation. Both state law and the Corporation's investment policies are subject to change. LEGAL INvESTMENTS. .. Under Texas law, the funds of the Corporation may be invested 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 ot: 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 fmn 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 Corporation 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 Corporation deposits, (8) fully collateralized repurchase agreements that have a defined tennination date, are fully secured by obligations described in clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) bankers' acceptances with the remaining tenn of 270 days or less, if the short-tenn obligations of the accepting bank or its parent are rated at least A-lor pol or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at least A-lor P-l or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no- load money market mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at least one nationally recognized investment rating finn of not less than AAA or its equivalent (13) bond issued, assumed or guaranteed by the State of Israel and (14) guaranteed investment contracts secured by obligations by obligations of the United States of America or its agencies and instrumentalities, other than the prohibited obligations described below. The funds may be invested in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service. The Corporation is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is detennined by an index that adjusts opposite to the changes in a market index. INvESTMENT POLICIES. . . Under Texas law, the Corporation is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for Corporation funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All Corporation funds must be invested consistent with a fonnally adopted "Investment Strategy Statement" that specifically addresses each funds' investment Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, Corporation investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the Corporation shall submit an investment report detailing: (1) the investment position of the Corporation, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest Corporation funds without express written authority from the Board of Directors. 28 I I I ADDmONAL PROVISIONS. .. Under Texas law the Corporation is additionally required to: (I) annually review its adopted policies and strategies; (2) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the Board of Directors; (3) require the registered principal of firms seeking to sell securities to the Corporation to: (a) receive and review the Corporation's investment policy (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) perfonn an annual audit of the management controls on investments and adherence to the Corporation's investment policy; (5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the tenn of the reverse repurchase agreement; (7) restrict the investment in mutual funds in the aggregate to no more than 80010 of the Corporation's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and further restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; and (8) require local government investment pools to confonn to the new disclosure. rating, net asset value. yield calculation, and advisory board requirements. I I I TABLE 5 - CURRENT INvESTMENTS I As of March 1,2001, the City's investable funds, including the funds of the Corporation, were invested in the following categories: I Type of Investment Agency Notes US Treasury Notes TexPool Money Market LOGIC Money Market Maturity Date 4/17/01-07/26/02 03131/01-10131/01 Maturity Value $ 16,000,000 2,000,000 46,480,643 10,064,110 $ 74,544,753 %of Portfolio 21.46% 2.68% 62.35% 13.50% 100.00% I I TexPool is a local government investment pool under the control of the Texas Comptroller of Public Accounts. The Comptroller has engaged The Chase Manhattan Bank, 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 and the Corporation's Financial Advisor, provides customer service and marketing for the pool. TexPool currently maintains a 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 I I I I I I 29 TAX MA TIERS TAXExEMPTION . . . The delivery of the Bonds is subject to the opinion of Bond Counsel to the effect that interest on the Bonds for federal income tax purposes (1) will be excludable from gross income, as defmed in section 61 of the Internal Revenue Code of 1986, as amended to the date of such opinion (the "Code"), pursuant to section 103 of the Code and existing regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals or, except as hereinafter described, corporations. A form of Bond Counsel's opinion is reproduced as Appendix C. The statute, regulations, rulings, and court decisions on which such opinion is based are subject to change. Interest on all tax-exempt obligations, including the Bonds, owned by a corporation will be included in such corporation's adjusted current earnings for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income of such corporation, other than an S corporation, a qualified mutual fund, a real estate investment trust, a real estate mortgage investment conduit, or a financial asset securitization investment trust (F ASIT). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by Section 55 of the Code will be computed. In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the Corporation made in a certificate dated the date of delivery of the Bonds pertaining to the use, expenditure, and investment of the proceeds of the Bonds and will assume continuing compliance by the Corporation with the provisions of the Resolution subsequent to the issuance of the Bonds. The Resolution contains covenants by the Corporation with respect to, among other matters, the use of the proceeds of the Bonds and the facilities financed therewith by persons other than state or local governmental units, the manner in which the proceeds of the Bonds are to be invested, the periodic calculation and payment to the United States Treasury of arbitrage "profits" from the investment of the proceeds, and the reporting of certain information to the United States Treasury. Failure to comply with any of these covenants would cause interest on the Bonds to be includable in the gross income of the owners thereof nom date of the issuance of the Bonds. Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the Issuer described above. No ruling has been sought nom the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Obligations is commenced, under current procedures the Service is likely to treat the City as the "taxpayer," and the Holders would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Obligations, the City may have different or conflicting interests nom the register owners of the Obligations. Public awareness of any future audit of the Bonds or Certificates, as the case may be, could adversely affect the value and liquidity of the Obligations during the pendency of the audit, regardless of its ultimate outcome. Except as described above, Bond Counsel expresses no other opinion with respect to any other federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, fmancial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the eamed income tax credit, owners of an interest in a F ASIT, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances. TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN BONDs. . . The initial public offering price of certain Bonds (the "Discount Bonds") may be less than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will, upon the disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable nom gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Bonds described above under "Tax Exemption." Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an original purchaser in a different amount nom the amount of the payment denominated as interest actually received by the original purchaser during the tax year. 30 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 SS 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 carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. I I Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. I I The initial public offering price of certain Bonds (the "Premium Bonds") may be greater than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds 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 Bonds. The basis for federal income tax purposes of a Premium Bond 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 Bond. 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 Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. I CONTINUING DISCLOSURE OF INFORMA nON I I In the Resolution, the Corporation has made the following agreement for the benefit of the holders and beneficial owners of the Bonds. The Corporation is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the Corporation will be obligated to provide certain updated fmancial information and operating data annually, and timely notice of specified material events, to certain information vendors. This information will be available to securities brokers and others who subscribe to receive the information from the vendors. I ANNUAL REPORTS ... The Corporation will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the Corporation of the general type included in this Official Statement under Tables numbered I through 4 and in Appendix B. The Corporation will update and provide this information within six months after the end of each fiscal year ending in or after 200 I. The Corporation will provide the updated information to each nationally recognized municipal securities information repository ("NRMSIR") and to any state information depository ("SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC"). I I I I The Corporation may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements, if the Corporation commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the Corporation will provide unaudited financial statements by the required time and audited financial statements when and if such audited financial 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 Corporation may be required to employ from time to time pursuant to state law or regulation. The Corporation's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each year, unless the Corporation changes its fiscal year. If the Corporation changes its fiscal year, it will notify each NRMSIR and the SID of the change. I The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P. O. Box 2177, Austin, Texas 78768- 2177, and its telephone number is 5121476-6947. I 31 MATERIAL EVENT NOTICES. . . The Corporation will also provide timely notices of certain events to certain information vendors. The Corporation will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell Bonds: (I) 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; (S) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. (Neither the Bonds nor the Resolution make any provision for liquidity enhancement In addition, the Corporation will provide timely notice of any failure by the Corporation to provide information, data, or financial statements in accordance with its agreement described above under "Annual Reports." The Corporation will provide each notice described in this paragraph to the SID and to either each NRMSlR or the Municipal Securities Rulemaking Board ("MSRB"). AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID ... The Corporation has agreed to provide the foregoing infonnation only to NRMSIRs and the SID. The information will be available to holders of Bonds only if the holders comply with the procedures and pay the charges established by such information vendors or obtain the information through securities brokers who do so. LIMITATIONS AND AMENDMENTS. . . The Corporation has agreed to update information and to provide notices of material events only as described above. The Corporation has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The Corporation makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The Corporation disclaims any contractual or tort liability for damages resulting in whole or in part ftom any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the Corporation to comply with its agreement The Corporation may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Corporation, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the Corporation (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. The Corporation may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the SEC Rule 15c2-12 or a court of fmal jurisdiction enters judgment that such provisions of the SEC Rule 15c2-12 are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the Corporation so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS. . . The Corporation has not previously made a continuing disclosure agreement in accordance with SEC Rule 15c2-12. OTHER INFORMATION RATINGS The Bonds are rated "Aaa" by Moody's and "AM" by S&P through an insurance policy to be issued by Financial Guaranty Insurance Company. The uninsured sales tax revenue debt of the Corporation is rated "AI" by Moody's and "A+" by S&P. The Corporation also has issues outstanding which are rated "Aaa" by Moody's and "AM" by S&P through insurance by various commercial insurance companies. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the Corporation makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. LITIGATION There is no pending litigation against the Corporation that would have a material adverse fmancial impact upon the Corporation or its operations. 32 I I REGISTRATION AND QUALIFICATION OF BONDS FOR SALE I The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(aX2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The Corporation assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption fÌ'om securities registration provisions. I LEGAL INvEsTMENTS AND ELIGIBILITY TO SECURE PUBLIC FuNDS IN TEXAS I Section 31 of the Act provides that "any bonds issued pursuant to this Act shall be and are hereby declared to be legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations. insurance companies, fiduciaries, trustees, and for the sinking funds of cities, towns, villages. counties, school districts, or other political corporations or subdivisions of the State of Texas." With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State of Texas, the Public Funds Investment Act, Chapter 2256, Texas Government Code, requires that the Bonds be assigned a rating of" A" or its equivalent as to investment quality by a national rating agency. See "Other Information - Ratings" herein. No review by the Corporation has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. I I LEGAL OPINIONS I The Corporation will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect that the Bonds are valid and legally binding obligations of the Corporation, and based upon examination of such transcript of proceedings. the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information under captions "Plan of Financing", "The Bonds" (exclusive of subcaptions "Book-Entry-Only System"), "Selected Provisions of the Bond Resolution", "Tax Matters" and "Continuing Disclosure of Information" and the subcaptions "Legal Opinions" and "Legal Investments and Eligibility to Secure Public Funds in Texas" in the Official Statement and such firm is of the opinion that the information relating to the Bonds 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, such information conforms to the Resolution. The legal fee to be paid to Bond Counsel for services rendered in connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book-Entry-Only System. Certain legal matters will be passed 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. I I I I I' The legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues expressly 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 performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise from the transaction. I I FINANCIAL ADVISOR I First Southwest Company is employed as Financial Advisor to the Corporation in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. I I The Financial Advisor to the Corporation 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 Corporation 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. I 33 VERIFICATION OF ARITHMETICAL AND MAmEMATICAL COMPUTATIONS The aritbmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the Corporation relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and the restricted Federal Securities were verified by Grant Thornton, LLP, certified public accountants. Such computations were based solely on assumptions and infonnation supplied by First Southwest Company on behalf of the Corporation. Grant Thornton, LLP has restricted its procedures to verifying the aritbmetical 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. FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement, and in any other information provided by the Corporation, that are not purely historical, are forward-looking statements, including statements regarding the Corporation' 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 information available to the Corporation on the date hereof, and the Corporation assumes no obligation to update any such forward-looking statements. The Corporation's actual results could differ materially from those discussed in such forward-looking statements. 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, industry, 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 Corporation. 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. UNDERWRITING The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the Corporation, at an underwriting discount of $50,455.64. The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered to the public may be offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds into investment trusts) at prices lower than the public offering prices of such Bonds, and such public offering prices may be changed, from time to time, by the Underwriters. MIscELLANEOUS The financial data and other infonnation contained herein have been obtained from the Corporation's records, audited fmancial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. The Resolution authorizing the issuance of the Bonds will also approve the fonn and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Underwriters. Is! LARRY 1. CUNNINGHAM President North Richland Hills Park and Recreation Facilities Development Corporation ATIEST: Is! PATRICIA HUTSON Secretary North Richland Hills Park and Recreation Facilities Development Corporation 34 I I I SCHEDULE OF REFUNDED BONDS Schedule I I I I I I Original Dated Date 11115/92 Sales Tax Revenue Bonds, Series 1992 Original Maturity 911105 911106 911107 911108 911109 911110 911111 911112 Interest Rate 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% Maturity Amount $ 420,000 445,000 475,000 500,000 530,000 565,000 600,000 630,000 The 2005 - 2012 maturities will be redeemed prior to original maturity on September 1,2002 at par. I Original Dated Date 7/1194 I I I Sales Tax Revenue Bonds, Series 1994 Original Maturity 911106 911107 911108 911109 911110 911111 911112 911113 Interest Rate 5.750% 5.900% 6.000% 6.000% 6.125% 6.125% 6.125% 6.125% Maturity Amount $ 220,000 235,000 250,000 265,000 280,000 295,000 315,000 330,000 The 2006- 2013 maturities will be redeemed prior to original maturity on September 1, 2004 at par. I Original Dated Date 411195 I I I I I I Sales Tax Revenue Bonds, Series 1995 Original Maturity 9/1108 911109 911110 911111 911112 Interest Rate 5.50% 5.60% 5.70010 5.80% 5.80% Maturity Amount $ 105,000 105,000 105,000 105,000 105,000 The 2008- 2012 maturities will be redeemed prior to original maturity on September 1, 2005 at par. TIDS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I I I I I APPENDIX A GENERAL INFORMATION REGARDING TIlE CITY TIDS PAGE LEFf BLANK INTENTIONALLY I I I LocATION AND HISTORY. . . The City of North Richland Hills is located in northeast Tarrant County, encompassing approximately 18.29 square miles with 540 employees. The City is approximately 10 miles northeast of downtown Fort Worth and 25 miles northwest of downtown Dallas. It is a part of the mid-cities area of North Central Texas (the "Metroplex"), which includes the Cities of Dallas and Fort Worth with a total population exceeding 4 million. I I The City was incorporated in 1953 under the general laws of the State of Texas and the current charter was approved by the voters in 1964 and last amended in August of 1992. The City is a home rule city and operates under the Council/Manager form of government The Council is composed of a mayor and seven councilmembers elected at large. All City residents vote for all seven places. The members are elected for two-year staggered tenns and elections are held annually in May. Policy-making and oversight functions are the responsibility of; and are vested in, the City Council. The City Council is required by the charter to appoint a City Manager to serve as the chief administrative and executive officer of the City. The duties of the City Manager include the appointment of City deparbnent heads and the daily conduct of City affairs. Ii I POPULATION. . . The City has grown steadily since the mid-1950's when it was a small bedroom community. The population of the City has increased approximately 84% since 1980. Population history is as follows: I Year 1960 1970 1980 1990 1993 1994 Population 8,662 '16,514 30,592 45,895 48,300 50,000 Source (I) (I) (1) (1) (2) (3) Year 1995 1996 1997 1998 1999 2000 Population 50,650 52,584 52,757 52,800 54,850 55,635 Source (3) (3) (3) (3) (3) (I) I I (I) U.S. Census Bureau. (2) North Central Texas Council of Governments. (3) City Staff Estimate. I I The City has established itselfas an innovative leader among Texas municipalities. A steadily growing economy, complete municipal services and prime location deliver the high quality of living expected by the residential and business communities. With an estimated current population of 56,500, this more than triples the population of 1970. North Richland Hills is the third largest city in Tarrant County. The citizens of the City, with a median age of 32.5, enjoy the small town atmosphere while sharing the many amenities of the Fort WorthlDallas Metroplex. I EcONOMICS. . . The City's location in the middle of the Fort WorthlDallas Metroplex provides access to approximately 4 million people - the sixth largest market in the United States. North Richland Hills' proximity to the DIFW International Airport allows local businesses to capitalize on trade opportunities gained through the North American Free Trade Agreement (NAFfA). I I The approximate economic base of the City at this time is manufacturing and distribution (8.1%), wholesale and retail trade (32.7%), professional and related services (36.5%), and various other services (22.T'1o). The City's labor distribution by type includes individuals skilled in technical, sales and administrative functions (39%), management (26%), operators and fabricators (13%) and services (7%). Recent indicators illustrate the City's healthy economic environment: I I I I · Last year, the City's net taxable values exceeded the $2 billion dollar mark for the first time. Net taxable value growth is equally impressive. The new values are 10% greater than last year and include $117.2 million in new construction. · In fiscal year 2000, the City recorded permits for construction of new retail, restaurant, office, service, recreational, and manufacturing space valued at a high of $35 million. At the same time, the City saw significant renovation and expansion of commercial space valued at $19.5 million. The City also issued 283 single-family new home permits with a construction value of $44.7 million. · Major street construction and reconstruction continues. The Loop 820, Highway 26 and FM 1938 interchange is near completion. Development has been attracted to this area and to areas further north in the City. The Rufe Snow widening project is scheduled to begin early this fall. Rufe Snow is a major collector street that is being widened from five to seven lanes. Upon completion, the Rufe Snow widening project should ease congestion, increase traffic counts, and stimulate business activity in the area. A-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-200 I. 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; Tammt Parkway Plaza shopping center with 102,000 square feet anchored by an Albertson's grocery store; Tammt 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 WaI-Mart at 220,000 square feet; the City's second Home Depot at 159,000 square feet; and Fury Sports fIrst-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 Clark/fecnol, 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 Clarklfecnol (713), MEGA Life & Health Insurance Center (600), North Hills Hospital (767) - as well as the growth ofH & M Food Systems (432), and WaI-Mart (550). The City has also benefIted from the success of new employers: Five Star Ford (264) and Sam's Club (275). North Richland Hill's status as a "triple Freeport" City (i.e., one with the Freeport exemption available through Tammt County, the City, and the Birdville Independent School District on qualifIed in-transit inventories) is intended to attract manufacturers such as Tecnol and encourage their expansion. With approximately 20010 - 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. · 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'sffecnol Medical Products, H&M Food Systems, Sealy Mattress Manufacturing, Bates Container, and Arabesque Fragrance Manufacturing. 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. 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 ernergencies, the City utilizes its own mobile intensive care ambulance system, staffed with highly trained paramedics. 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. 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. 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 stnJcture, i.e. Pre-kindergarten-5, 6-8, 9-12. A-2 I I I Physical facilities include: 3 high schools 1 alternative high school 7 middle schools 20 elementmy schools Coliseum Administration Building Stadium (2) Transportation Complex Computer Service Center Annex/materials Center All of the school buildings owned by the District are air conditioned. Approximately 46.5% of the teachers in the District hold advanced degrees. The District employs approximately 2,621 total staff as follows: I I Teacher salaries in the District are as follows: I I I Certified Professionals Others Degree Level Baccalaureate Masters Doctorate Minimum SallU}' $35,000 $36,500 $39,500 Selected historical enrollment figures in the District are as follows: Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 I I I I I I I Source: Birdville Independent School District. Enrollment 15,182 15,478 15,490 15,588 16,059 17,039 17,200 17,529 18,505 19,100 Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 1,640 981 Maximwn SallU}' $49,525 $52.250 $55,750 Enrollment 19,358 18,929 19,039 20,098 20,454 20,882 21,108 20,972 21,314 Education beyond the high school level is readily available. The Northeast campus of Tarrant County College is located partially within the City limits. Additionally, within a radius of 40 miles, there are a number of colleges and universities including Southern Methodist University, Texas Christian University, the University of North Texas, the University of Dallas, The University of Texas at Dallas and the University ofTexas in Arlington. TRANSPORTATION. . . The City has prime positioning for easy access to major local, regional and national markets. Being just 7.5 miles from the Dallas/Fort Worth International Airport and 9 miles from Alliance Airport, the City is located in the hub of business activity and is an integral part of the Northeast Tarrant County Area. The City is positioned on or near five major Interstate Highways. Using Interstate Loop 820, easy access is gained to Interstate 35 (north to Oklahoma and south to Austin, San Antonio and Laredo), Interstate 45 (north to Tulsa and south to Houston), Interstate 20 (west to Midland and EI Paso and east to Tyler and Shreveport), and Interstate 30 (east to Texarkana, Little Rock and Memphis). The accessibility factor also includes five rail lines in the Fort Worth area, one of which - St. Louis Southwestern - is located in the City. I I I I AGE OF POPULATION (I) Median Income Per Household.......................................... ...$50,990 Median Age of Population... ... ...... ...... ...... ... ......... ...... ..... ....... 33.8 (I) Based on Bureau of Census, Department of Commerce. A-3 MAJoR EMPLOYERS IN THE CITY Employer Birdville Independent School District North Hills Hospital Kimberly Clarkffecnol Division TCC - 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 Product School District HospitallMedical Center Medical Products Manufacturer Higher Education LifelHealth Insurance Municipal Government Retail Sales Food Processing Retail Sales Automobile Dealership · Split with Hurst. Source: North Central Texas Council of Govemments, Local Media, City of North Richland Hills. BUDDING 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 I EXCERPTS FROM THE CITY OF NORTH RICHLAND HILLS, TEXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2000 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. The records of the Corporation are audited with, and included in, the financial statements of the City, as, under applicable accounting procedures, the Corporation is a component unit of the City. As described in this Official Statement, the Corporation is solely responsible for the payment of the debt service on the Bonds, and no inference should be taken that the inclusion of the Corporation's financial statements with the audited fmancial statements of the City in any manner obligates the City or its assets with regard to the payment of the Bonds. The excerpts of the City's financial statements contained in Appendix B are not intended to be a complete statement of the fmancial condition of the Corporation, and reference is made to the complete Report for further infonnation. I' I I I I I Î I I I THIS PAGE LEFI' BLANK INTENTIONALLY I I I; I I I I I 1\ I I I I I I I I I I APPENDIX C FORM OF BOND COUNSEL'S OPINIONS TIDS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I I· I I I APPENDIX D SPECIMEN BOND INSURANCE POLICY Tms PAGE LEFf BLANK INTENTIONALLY TO SEE SITE PLAN TO ORDINANCE: PLEASE CONTACT CITY SECRETARY'S OFFICE/ MUNICIPAL RECORDS