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Home My WebLink AboutCC 1996-12-16 Agendas CITY OF NORTH RICHLAND HILLS PRE-COUNCIL AGENDA DECEMBER 16, 1996 - 6:15 P.M. , For the Meeting conducted at the North Richland Hifls City Hall Pre-Council Chambers, 7301 Northeast Loop 820. '. . ,NUMBER ITEM ACTION TAKEN 1. GN 96-148 'Consideration of Action on all Matters Pertainmg to the Award and Sale of $5,135,000 Waterworks and Sewer System Revenue Bonds, Series 1996 - Ordinance No. 2166 and Adoption of Resolution No 96-76 Providing for the Redemption of Certain ¡ Outstanding Bonds of the City '- (Agenda Item No. 16) (5 Minutes) . ,,~-,,".. .. , ,2.'IR96-126 Loan Request from the City of Watauga , ¡ (5 Minutes) , . L,' ' : ..' '. s ,~l;;;.GN 96-150 NRH20 Infrastructure Improvements ..... ,,~ ;, (Agenda Item No. 18) .. GN 96-151 NRH20 1996 Season Review and 1997 Season Recommendations (Agenda Item #19) (10 Minutes) . . 4; IR96-136 Proposed Change in Public Safety Building Project (5 Minutes) " '", ". ",., .', ". .?..'"..... .. . ~ : \ :!' ;~~::t;fQN, 96-147 , ' Information for Citizens Network of Northeast '!:::'~ " Tarrant County - Resolution No. 96-75 (Agenda Item No. 15) (5 Minutes) ..."., .'.,.. ., ';;'~ ~~:;"GN 96-153 '. 1.,General Municipal Employee Compensation Plan i' :~~r~~;r~: :. ¡; Ma(ket Adjustment ., (Agenda Item No. 21) (5 Minutes) " ::. '- .. Page 2 . NUMBER ITEM ACTION TAKEN 7. GN 96-135 Consider Establishing Swimming Pool Lot Grading and Drainage Regulations - TABLED 11/25/96 (Agenda Item No. 13) (5 Minutes) 8. IR 96-130 Code I:nforcement Request from City Council (15 Minutes) 9. Other Items 10. Adjournment - 7:20 p.m. ·Closed due to subject matter as provided by the Open Meetings Law. If any action is . contemplated, it will be taken in open session. POS~E .J~Ú~ q __ ~Õ~,. ___~¿_1'-f41& --- .¡"';. , " Jl1"e Hy___ e , . For the Regular Meeting conducted at the North Richland Hills City Council Chambers, 7301 Northeast Loop 820, at 7:30 p.m. The below listed items are placed on the Agenda for discussion and/or action. CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA DECEMBER 16, 1996 1. Items marked with an * are on the consent agenda and 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 581-5502 two working days prior to the meeting so that appropriate arrangements can be made. . NUMBER ITEM ACTION TAKEN 1. Call to Order 2. Invocation 3. Pledge of Allegiance 4. Minutes of the Pre-Council Meeting November 25,1996 5. Minutes of the Regular Meeting November 25, 1996 e '\ Page 2 . NUMBER ITEM ACTION TAKEN 6. Presentations by Boards & Commissions a. Investment Committee Minutes b. Parks and Recreation Board Minutes 7. Removal of Item(s) from the Consent Agenda 8. Consent Agenda Item(s) Indicated by Asterisk (12,13,14,15,17,18,19, 21,22,23,24,25,26,27,28,29,30, 31,32,33,34,35,36,37,38,39,& 40) 9. IR 96-134 Special Presentation - Volunteer Award Recognizing James Douglas Davis Jr. 10. IR 96-135 Special Presentation - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report Ending September 30, 1996 11. PZ 96-32 Public Hearing to Consider the Request of Glen Thurman, Inc. for a Special Use Permit to Operate a Temporary Concrete Batching Plant on Tract 11 B, Thomas Peck Survey, Abstract 1210. (Located at 8616 Davis Blvd.) . e Page 3 . NUMBER ITEM ACTION TAKEN *12. PS 96-40 Request of M & J Construction Corp. for Amended Plat of Lots 1-23, Block 10 Crestwood Estates, Phase III (Located in the 7500 Block of Smithfield Road) *13. GN 96-135 Consider Establishing Swimming Pool Lot Grading and Drainage Regulations - TABLED 11/25/96 *14. GN 96-146 Signalization of the Intersection at Glenview Drive and Ruth Road *15. GN 96-147 Information for Citizens Network of Northeast Tarrant County- Resolution No. 96-75 16. GN 96-148 Consideration of Action on all Matters Pertaining to the Award and Sale of $5,135,000 Waterworks and Sewer System Revenue Bonds, Series 1996 - Ordinance No. 2166 and Adoption of Resolution No 96-76 Providing for the Redemption of Certain Outstanding Bonds of the City *17. GN 96-149 Authorizing Use of Alternate City Seals - Ordinance No. 2161 *18. GN 96-150 NRH20 Infrastructure Improvements . e . , Page 4 e NUMBER ITEM ACTION TAKEN *19. GN 96-151 NRH20 1996 Season Review and 1997 Season Recommendations 20. GN 96-152 Approval for the Development Plan for the City Park *21. GN 96-153 General Municipal Employee Compensation Plan Market Adjustment *22. PU 96-96 Award Bid for Office Furniture *23. PU 96-97 Award Annual Contract for Computer Hardware Maintenance *24. PU 96-98 Award Bid for Construction of a Metal Canopy *25. PU 96-99 City Hall Renovation Change Order *26. PU 96-100 Request from Classic Chevrolet to Withdraw Bid *27. PU 96-101 Award Bid for 1997 Vehicles *28. PU 96-102 Award Bid for City Hall Light Fixture Replacement . e I Page 5 . NUMBER ITEM ACTION TAKEN *29. PU 96-103 Award Bid for Closed Circuit TV System for Richland Tennis Center *30. PU 96-104 Award Bid for Ice Machines for Richland Tennis Center *31. PU 96-105 Engineering Services for HVAC Upgrade *32. PU 96-106 Authorize Purchase of Computer Equipment for NRH20 from the Department of Information Resources *33. PU 96-107 Sewer Truck Repair *34. PW 96-52 Approve City-Developer Agreement for CIP Water System Improvements with Sandlin-Barfield Joint Venture for the Thornbridge Estates III Addition *35. PW 96-53 Abandonment of a Portion of Ross Road Right-of Way - Ordinance No. 2165 *36. PAY 96-16 Authorize Payment to Motorola for Mobile Data Maintenance Agreement - Resolution No. 96-74 e e I . .' Page 6 . NUMBER ITEM ACTION TAKEN *37. PAY 96-17 Authorize Payment to Motorola for Radio Maintenance Agreement - Resolution No. 96-73 *38. PAY 96-18 Authorize Payment to University Microfilms International *39. PAY 96-19 Approve Final Pay Estimate NO.8 in the Amount of $32,045.75 to Circle "C" Construction Company for Interchange Water and Sanitary Sewer Adjustments, Phase II *40. PAY 96-20 Approve Final Pay Estimate No. 13 in the Amount of $103,984.545 to Larry Jackson Construction Co., Inc. For Rodger Line Drive, Phase "B" Paving, Drainage, and Bridge Improvements 41. Citizens Presentation 42. Adjournment . e POtTED 12/ /8/q~ I Date' ~~{ 7 -pm flMf. Cl!ysecr~¡ ,,¡¿J, B<! ~..jti. ~QØJ-U¡-- . - . ./ NOTICE OF MEETING NOTICE is hereby given that the City Council of the City of North Richland Hills, Texas, will meet at 7:30 o'clock P.M. on the 16th day of December, 1996, at the City Hall, 7301 N. E. Loop 820, North Richland Hills, Texas, and during such meeting will consider all matters incident and related to the issuance and sale of $5,135,000 "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996, including the receipt of bids therefor and the adoption of an ordinance authorizing the issuance of such bonds and the adoption of a resolution providing for the redemption of certain outstanding bonds of the City. (jJ~èÚ_~ Administrative Officer 0014130 . .. . . . ,. INFORMAL REPORTTO MAYOR AND CITY COUNCIL No. IR 96-131 1\ ~ V Date: December 16, 1996 Subject: GLENVIEW DRIVE TRAFFIC SIGNALS @ FLORY DRIVE The wood pole traffic signals at this intersection were installed many years ago to only operate during school zone hours. This was to help facilitate the pedestrians crossing Glenview Drive. The signals flash red on Flory Drive and yellow on Glenview Drive at all other times. This is confusinQ to some motorists. The signals are not warranted by the traffic volumes in accordance with the State criteria. Staff therefore proposes to remove the signals in the future when the Rufe Snow Drive/Glenview Drive Traffic Signal Improvements are installed under the ISTEA CMAQ project. When this project is completed, it will include pedestrian crossing signals. Any pedestrians including the children at Mullendore Elementary can cross Glenview Drive at Rufe Snow Drive in a much safer manner than at the Flory Drive intersection. Respectfully submitted, ''"', ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS .~ . NORTH CITY RICHLAND OF HILLS, TEXAS . TRAFFIC CONTROL WARRANTS; TRAFFIC SIGNAL LIGHT Date: November 21, 1996 Street Intersection: 6800 Glenview Drive @ Flory Street Warrant No. Warrant Item Warranted Data Yes No 1. Minimum vehicular volume (70%) 3360/840 4800/1200 6,875/ 480 x 2. Interruption of Continuous Traffic 7200/600 6,875/ 480 x 3. 4. 5. 6. . 7. 8. 9. 10. 11. 12. Minimum pedestrian control 400 peds/4 Hours 22 x School crossing Average usable gaps/5 minutes 1. 78 x Progressive movement N/A Accident experience 2 x Systems N/A Combination of warrants (80%) N/A Four hour volume N/A Peak hour delay N/A Peak hour volume N/A Warrant volumes for traffic-actuated signals N/A The above warrants are paraphrased from the Uniform Traffic Control Devices for streets apply to Traffic Signal Light Warrants. 1980 Texas Manual on and highways as they submitted, . Superintendent/Streets ?l~ ~/t!C¡?þ Date ACTION TO BE TAKEN: The Traffic Signal Light Warrants at this location are not met according to the Texas Manual On Uniform Traffic Control Devices. ... . . CITY OF N@RTH RICHLAND HILLS Public Works -J October 28, 1996 MEMO TO: Greg W. Dickens Public Works Director FROM: Jimmy Cates Public Works SuperintendenUStreets SUBJECT: GLENVIEW DRIVE @ FLORY DRIVE; Traffic Study Listed below are the results of the traffic study conducted at Glenview Drive and Flory Drive. October 21, 1996 TIME PEDESTRIAN CROSSING FLORY TRAFFIC . 7:15 - 8:15am 3: 1 0 - 3:45pm 3 Adults 5 Children o Adults 4 Children N/A 18 Vehicles October 22, 1996 TIME 7:15 - 8:15am PEDESTRIAN CROSSING FLORY TRAFFIC o Adults 0 Children 28 Vehicles October 24, 1996 TIME PEDESTRIAN CROSSING FLORY TRAFFIC 7:15 - 8:15am 3:00 - 3:50pm 1 Adult 2 Children 1 Adult 34 Children 33 Vehicles 29 Vehicles October 25, 1996 TIME PEDESTRIAN CROSSING FLORY TRAFFIC 7:15 - 8:15am 3:00 - 4:00pm o Adults 2 Children 3 Adults 21 Children. 24 Vehicles 35 Vehicles Attached are copies of the field work sheets. . 1 P.o. Box 820609 . North Richland Hills, Texas * 76182-0609 USA 7200-A Dick Fisher Dr. S. * 817-581-5671 * FAX 817-656-7552 . . . . INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. I R 96-133 \ * V Date: December 16, 1996 Subject: Girl's Fast Pitch Softball Complex Pavilion The City Council, at their October 14, 1996 meeting, directed staff to include an additional picnic pavilion at the Girl's Fast Pitch Softball Complex at Walkers Creek Park. Attached is the revised site plan including this pavilion. An alternate bid item has been included in the bid proposal for construction of the pavilion. The bids are scheduled to be opened on December 17,1996. City Council consideration of the bids for award of contract is tentatively scheduled for January 13, 1997. Respectfully Submitted, ~~ Jim Browne Director of Parks & Recreation Attachment ISSUED BYTHE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ., E~ SYXll 'S~ CJNY"O~ HUON )~Vd lWR1:lOS H:Jlld-1SV:I Sl~la , ~ I! ...~ ~~ í a >a: In J. ~'" ~:; ~ ~ . . ! /' " .i (/ I : : I ¡ I r- i( : ,: ¡It! I) I ,'I !.1 i i Ii ¡~1 I If , /,;/ I: i:~1 \~)). ~ \' ! I ltiJ ,~. - ,.,'~'" ,,\ i i I / _ ;;/ ,'\ ! / I -..11, I , '\ 3H(",J,! r ~ ~ - -tl " I ~ f- . " " \, !! ., ~; 1;'" / i j; I ' \ \ : , ~I -;¡t.:{ ,Q~ I \ \ \Ii lé'¡~fµ~--i L. _u " );'=~/~ ~m, ~--.- - nu ~ -~J, ',7:' i ' , '1¡1 ~ I!) ,~!f"'! li*¡~ I ~!:\. i ¡; /V/~ If \- 1/ . ~:, ~I ", ; I --\ II} r~, :'-~Ä'-_;~cIE::~ :(. :'Jt:;: :i~~:i . ~..~_ ------------- . ...... ~ .. -.. I", '-" ...--! 'STòì ~, " ~_~. _ . "'"\ .~/ ' . "-- i ~~-r--- '~"= , - -iW- ~ -...~~~~, I, \~- 11 _ ~~~~:\7", 'ell" "7,~;? ~ ~,"."" a\::> ~ ~'f" 01':' 1 V V . t¡j:'Þ~17b4'!1~?é'f<Ii!;:-~;;Z"~'~'P'~O: " 1, .I,! ; ..~ I, , .. i ~:~lgDlC21ggÇJ,q!~C?lgi~IGJ:[],D~!DjC2i~:C2i~ : " lUNa ,\-urIlJ,\- ID]~r;::,--, (In-rUn) (n-~m'n ~ (-ri--1r-,ì (u_~ -- --- --- ì r i I~-L,~~ ~ C:=:l'== ~ ='=~=== ==±=~~- !,'.I.- ¡ mm,¡ ~~::nH "- ~ ~"-...,'/ ~' o:0~~ ~" ';'/ (, -;'~ \", /~~ "-~ / -;;r--., '"c.."'i: \ ~.... -~-;:¡ ~ \ ,'T) "~ ~ -1..., ~; "[ ~ -.l nn . -------..- . ~ . INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 98-128 ~ Date: 'Y" Subject: December 2,1996 Loan Request from City of Watauga Attached is a request from the City of Watauga for North Richland Hills to assist them with a cash flow problem by loaning them money for four months. The outstanding accounts receivables as of September 30, 1996 and October 7,1996 utility billings are due to the City of North Richland Hills, and I allowed Watauga to pay these in two equal payments based on the "agingB of the accounts and the actual time the money would come in, which would be approximately 60 days. At that point, the receivables would have been converted into cash for us and that is why I allowed the two months for payment. Anything beyond that would be an excessive amount of time. e Watauga is now requesting that instead of the receivables being paid in two months that they be allowed to pay in four months. I do not believe that I have the authority to extend credit to another City, or anyone else. I am not sure whether the City Council has the authority to loan money to others, even if they wanted to. I have asked Rex McEntire to research this, and he indicated that it will take him a little time to get this completed. If Rex determines that we can extend credit legally, anë:t Council so chooses, I would strongly recommend that it be done so with an interest charge in order to pay us for our loss of investment revenue and to reimburse us for the actual use of our money. I plan to put this on the December 16 City Council Agenda for your discussion. Hopefully by that time Rex will have researched this matter to determine What the City can or cannot do regarding this request to extend credit. Respectfully submitted, cu. C.A. Sanford City Manager e ISSUED BY THE CITY MANAGER NORTH RICH LAND HillS, TEXAS · ~- - -- -~--------- ~~v-r--==-=-=- ~TAUGA ~- T E X AS'" November 22, 1996 City of North Richland Hills Mr. C.A. Sanford, City Manager P.O. Box 820609 NRH, TX 76182-0609 Dear Mr. Sanford: As the settlement agreement with the City of North Richland Hills did not specifically address outstanding receivables at September 30, 1996 and receivables fÌ'om the October 7 billing, this issue was addressed in the Letter Agreements which were prepared by the consultant for the City of North Richland Hills. This agreement stated that these receivables would be deducted in two equal installments. e The City of Watauga is requesting that the City of North Richland Hills consider extending the repayment period to four months which would reduce our monthly payment fÌ'om 5300,803.86 to 5150,401.93. The current payment plan results in a negative cash flow for the City ofWatauga until January, 1997. Your consideration to this matter would be greatly appreciated. Please feel fÌ'ee to call if further discussion on this matter is considered necessary. Sincerely, ~ -/J1~ Lee Maness, City Manager e City ofWatauga:7101 Whitley Road · Watauga, TX 76148 · (817) 281-8047 · Metro: (817) 498-3408 · Fax: (817) 281·1991 , , . e . INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. ~96-136 *- Date: T Subject: December 16, 1996 Proposed Change in Public Safety Building Project At the request of the City Manager, Assistant Manager Shiflet has been working with the Police Department, Fire Department, and Support Services Department to develop a plan for the combined Public Safety / Support Services Facility authorized In the 1994 Bond Package. As was discussed with the City Council during a work session last summer, this facility will house the Police property/evidence, crime scene. records storage and vehide impound offices. It will house the Fire mechanic and provide a two-bay repair facility and storage for fire equipment and supplies as well as providing office and storage space for the Support Services Department. After Council discussion at the work session, the decision was made to construct the facility on the northwest section of the Municipal Complex on Dick Fisher Drive and to leave the Vehide Impoundment Lot at its present location. This fall, the City Manager assisted in the selection of architectural finalist for the project and interviews were conducted in November. Prior to a decision being made and with estimated square footage and cost per square foot estimated by these finalist, the City Manager received a request for an alternate consideration from the Police Chief. This alternate proposes constructing the Police portion of the facility behind and adjacent to the auto impound building, within the fenced compound. This proposal was reviewed by the City Manager's Office and the Support Services Dept. and appears to address concerns expressed by the Police Department about separating the impound facility from the property/evidence facility. The alternate would allow for a larger two-story tilt-wall facility without the exterior brick veneer, since it would not be open to public view; The total budget for the separate Police facility would be $400,000.00, including contingency. This would increase square footage for the Police operations while leaving sufficient funding of about $700,000.00 for a smaller Fire and Support Services brick veneer faced building in the front location. The two building concept will permit us to increase the combined sizes by about 2,000 square foot the same expenditure. The Fire/Support Services building will be situated and designed to allow for a future addition if necessary for other functions or departments. City Staff is recommending that the two buildings be constructed separately and proposes to retain Mr. G. Phillip Mor1ey of Grapevine for Architectural Services on the Fire/Support Services building and to retain Callahan & Associates for Architectural Services on the Police property/evidence building. We will be available for questions and discussion during the pre-Council meeting. ÆC Randy Shiflet Assistant City Manager ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS 9 I J I ì I I ! '. I J , e D , I ) I I I t .1 I ~~ I ~~ I .. i .. I I I 0: I I .. 0: I J C . ì r I I t . 1&.1 -I C[ U (f) 0·0 ... If) . ... . I ~- ~ INFORMAL REPORT TO MAYOR AND CITY COUNCIL N IR 96-130 o. . ~ Date: T Subject: January 16, 1996 Code Enforcement Request from City Council At the November 25, 1996 pre-Council meeting the Council discussed a number of issues concerning a more proactive approach to Code Violations in the City. Council consensus was to direct City staff to study the issues and come up with recommendations for any necessary changes to existing ordinances and a strategy for improving compliance with existing ordinances. One areas of concern dealt with vehicles parked or stored on the roadway, in driveways over the right-of-way and sidewalks and parking or storage in the yards of residences. A second area was violations that would be considered "nuisances" within the guidelines of our existing ordinance. . Staff is presently researching all current City ordinances that address these issues and compiling a number of other cities' ordinances regulating these matters that will assist us in recommending any proposed changes to our existing ordinances. Any recommended changes to existing ordinances will be submitted to City Council at a later date. In the meantime we will focus our effòrts on enforcement of violations of existing ordinances. In an attempt to clarify a direction from the Council and better inform you of what is and is not in violation, staff has prepared a video presentation of a number of circumstances around the City that will be presented at the pre-Council meeting on December 16, 1996. This presentation provides examples of obvious violations and also provides examples of apparent violations that are presently are not prohibited by State Law or City Ordinance. This presentation will allow Council to further direct staff's efforts toward any ordinance revisions necessary and assist us in determining more specifically which violations Council desires a more proactive response on. The entire process of revising necessary ordinances and bring violations into compliance will take considerable time since many of these issues have been handled on a "complaint only" basis in the past. Thank you for your consideration and we will be available for questions and discussion at the meeting. Respectfully, ~C~ Randy Shiflet Assistant City Manager . ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS - - . . 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 - NOVEMBER 25,1996 - 6:00 P.M. Present: Tommy Brown Mayor Lyle E. Welch Councilman Mark Wood Councilman Jo Ann Johnson Councilwoman Don Phifer Councilman Byron Sibbet Councilman Linda Spurlock Sansoucie Councilwoman C.A. Sanford City Manager Randy Shiflet Assistant City Manager Larry Cunningham Assistant City Manager Patricia Hutson City Secretary Rex McEntire Attorney Terry Kinzie Information Services Director Greg Dickens Public Works Director Barry LeBaron Planning/Inspection Director Pam Burney Environmental Services Director e Richard Albin City Engineer Absent: Mack Garvin Mayor Pro Tern ITEM DISCUSSION ASSIGNMENT ACCESSORY Staff discussed with Council the increasing BARRY BUILDINGS IN number of variance requests being brought to EXCESS OF 200 the Zoning Board of Adjustment to allow SQUARE FEET accessory buildings in excess of 200 square feet without bricking the building. The consensus of the Council was for ZBA to enforce the code dealing with this issue as originally adopted by the Council. e e e e Pre-Council Minutes November 25, 1996 Page 2 ITEM DISCUSSION ASSIGNMENT ENFORCEMENT Mayor Brown advised he would like for City RANDY OF CODE Staff to enforce the ordinance dealing with VIOLATIONS trailers being parked in the street. Mr. Shiflet advised that Staff would enforce the Ordinance as directed by Council, but first a legal opinion was needed on the portion of the ordinance dealing with the interpretation of daily and/or regular storage. Mr. Shiflet also advised the 45 day waiting period was a problem. Mr. Shiflet suggested that Council consider reducing the waiting period. Mayor Brown requested that an item be placed on the agenda for the next Council meeting lowering the waiting period from 45 days to 5 days. Council discussed where a trailer was allowed to be parked under the present ordinance and whether a trailer should be allowed behind the building line, curb, or sidewalk. Council instructed Staff to find out what the other cities were doing and to bring a report back to the Council at the next meeting. REQUEST OF Mr. Sanford briefed the Council on the NAN BILL Y GRAHAM development background of Mr. Graham's FOR property. Mr. Sanford advised he had received DEVELOPMENT a letter from Mr. Graham requesting that he be HELP allowed to accept the offer from the City that he had previously declined. Mr. Sanford advised he would be answering Mr. Graham's letter and that he was going to inform him that the City would not pave his side of the creek. Council was in agreement and there were no questions. e e e Pre-Council Minutes November 25, 1996 Page 3 ITEM DISCUSSION ASSIGNMENT GROUP DAY- Mr. Sanford advised that there were six homes BARRY CARE HOMES located in the City that kept more than four Prepare cover sheet children. Mr. Sanford advised that the City's changing ordinance ordinance only allowed four children to be kept in a day care home. State law allows day care homes to have more than four children and requires that those homes be inspected by the Health Department and Fire Department. The City's policy would be not to inspect someone in violation of City Ordinance. Mr. Sanford advised Staff was recommending that the City's Ordinance parallel State law and be changed accordingly and that the six day-care homes currently operating in the City be allowed to continue operation. Council was in agreement with Mr. Sanford's recommendation. WOODCREST Mr. Sanford explained that the homeowners NAN ADDITION from the Woodcrest Addition felt that the City HOMEOWNERS Council had the power to influence the REQUEST Highway Department to speed up the design of the widening of Airport Freeway. Mr. Sanford stated he placed this on the Pre-Council Agenda so that Council would be aware that the Woodcrest Homeowners might be contacting them. LONE STAR GAS Attorney McEntire explained that in the past NAN COMPANY GATE North Richland Hills joined with Fort Worth, RATE CASE - Arlington and other cities to intervene in city RESOLUTION NO. gate rate cases filed by Lone Star. Mr. 96-71 McEntire stated the City's contribution in the past had been under $2,000. The consensus of the Council was for the Attorney to proceed. e e e Pre-Council Minutes November 25, 1996 Page 4 ITEM DISCUSSION ASSIGNMENT AUTHORIZE There were no questions from the Council. PURCHASE OF DISK DRIVES FROM THE CITY OF RICHARDSON OTHER ITEMS Mr. Sanford advised that the Park and JIMB. Recreation Board would like the opportunity to respond to the comments received at the Public Hearing held on the 100 Acre Park. Mr. Browne stated they would like to evaluate the comments and suggestions and determine the alternatives that could be brought to the Council for consideration. He stated this would give the Parks Board an opportunity respond to the citizens comments. The consensus of the Council was for the Parks Board to respond and forward options to the Council for consideration. Agenda Item No. 15 - GN 96-135 - BARRY/PAM Councilman Welch advised he did not feel the wording in the Pool Ordinance was sufficient. Mr. Dickens was asked by the Council to determine how much money it would cost the City and taxpayers if the water was allowed to go into the sewer. There was discussion by the Council concerning how to protect surrounding property owners who would not want water draining onto their yard. Council felt the ordinance should address where the water goes and the pool owner needed to be able to prove that it would not discharge into their neighbor's yard. Mr. Shiflet asked that Council remove the item from the Consent Agenda and postpone it so that Staff could resubmit a revised ordinance that would address Council's concerns. e e e Pre-Council Minutes November 25, 1996 Page 5 ITEM DISCUSSION ASSIGNMENT OTHER ITEMS Mr. Sanford reported on the organizational (continued) meeting of the Coalition for Community and Economic Development that he and the Mayor attended in Austin on November 22. Mr. Sanford advised that Mayor Brown was elected Vice Chairman of the Committee. Mayor Brown questioned the funding being NAN pulled on Little Bear Creek Hike and Bike Trail. Mr. Browne advised their understanding was the City had not lost any appropriation of funds, but the project was moved to another year. ADJOURNMENT Mayor Brown adjourned the Pre-Council Meeting at 6:45 p.m. to Executive Session for consultation with the Attorney under Government Code §551.071. Tommy Brown - Mayor ATTEST: Patricia Hutson - City Secretary 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 - NOVEMBER 25,1996 -7:30 P.M. 1. CALL TO ORDER Mayor Brown called the meeting to order November 25, 1996 at 7:30 p.m. ROLL CALL Present: Tommy Brown Lyle E. Welch Mark Wood JoAnn Johnson Don Phifer Byron Sibbet Linda Spurlock Sansoucie Staff: C.A. Sanford Randy Shiflet Larry Cunningham Patricia Hutson Rex McEntire Greg Dickens Absent: Mack Garvin Mayor Councilman Councilman Councilwoman Councilman Councilman Councilwoman City Manager Assistant City Manager Assistant City Manager City Secretary Attorney City Engineer Mayor Pro Tern 2. INVOCATION Councilwoman Johnson gave the invocation. 3. PLEDGE OF ALLEGIANCE e e e City Council Minutes November 25, 1996 Page 2 4. MINUTES OF THE PRE-COUNCIL MEETING NOVEMBER 11,1996 APPROVED Councilman Sibbet moved, seconded by Councilman Phifer, to approve the minutes of the November 11, 1996 Pre-Council Meeting. Motion carried 6-0. 5. MINUTES OF THE REGULAR MEETING NOVEMBER 11, 1996 APPROVED Councilman Wood moved, seconded by Councilman Phifer, to approve the minutes of the November 11, 1996 City Council Meeting. Motion carried 6-0. 6. PRESENTATIONS BY BOARDS & COMMISSIONS No action necessary. 7. REMOVAL OF ITEM{S) FROM THE CONSENT AGENDA Councilman Wood removed Item No. 15 and Councilman Sibbet removed Item No. 19 from the Consent Agenda. 8. CONSENT AGENDA ITEM{S) INDICATED BY ASTERISK {17, 18,20, 21,22,23,24,25,26,27,28,29,30,&31) APPROVED Councilwoman Johnson moved, seconded by Councilman Welch, to approve the Consent Agenda. Motion carried 6-0. e e e City Council Minutes November 25, 1996 Page 3 9. PZ 96-25 PUBLIC HEARING TO CONSIDER THE REQUEST OF NORTH PARK BAPTIST CHURCH TO REZONE LOT 1, BLOCK A, NORTH PARK CHURCH ADDITION, FROM R-3 SINGLE FAMILY RESIDENTIAL TO U INSTITUTIONAL (LOCATED AT 7025 MID CITIES BOULEVARD) - ORDINANCE NO. 2156 APPROVED Mayor Brown opened the Public Hearing and called for anyone wishing to speak in favor of the request to come forward. Mr. Gene Edwards, Pastor of North Park Baptist, appeared before the Council and spoke in favor of the request. Mayor Brown called for anyone wishing to speak in opposition to come forward. There being no one else wishing to speak, Mayor Brown closed the Public Hearing. Councilman Sibbet moved, seconded by Councilwoman Johnson, to approve Ordinance No. 2156. Motion carried 6-0. 10. PZ 96-26 PUBLIC HEARING TO CONSIDER THE REQUEST OF MARVIN D. SMITH TO REZONE TRACT CC. AND A PORTION OF TRACT 2, CONDRA SURVEY, ABSTRACT 311, FROM AG AGRICULTURE TO R-1 SINGLE FAMILY RESIDENTIAL (LOCATED IN THE 7600 BLOCK OF DOUGLAS LANE) - ORDINANCE NO. 2157 APPROVED Mayor Brown opened the Public Hearing and called for anyone wishing to speak in favor of the request to come forward. Mr. Marvin Smith, applicant, appeared before the Council and spoke in favor of the req uest. Mayor Brown called for anyone wishing to speak in opposition to the request to come forward. e e e City Council Minutes November 25,1996 Page 4 There being no one else wishing to speak, Mayor Brown closed the Public Hearing. Councilman Wood moved, seconded by Councilman Sibbet, to approve Ordinance No. 2157. Motion carried 6-0. 11. PZ 96-27 PUBLIC HEARING TO CONSIDER THE REQUEST OF DANIEL G. HAM TO REZONE TRACT 2C6, PECK SURVEY, ABSTRACT 1210; AND PORTION OF LOT 1, BLOCK 1, MCKEE ADDITION FROM AG AGRICULTURE TO R-1-S SPECIAL SINGLE FAMILY RESIDENTIAL (LOCATED AT 7612 SHADY GROVE ROAD) ORDINANCE NO. 2158 APPROVED Mayor Brown opened the Public Hearing and called for anyone wishing to speak in favor of the request to come forward. Ms. Daniel Ham, applicant, appeared before the Council, and spoke in favor of the req uest. Mayor Brown called for anyone wishing to speak in opposition to the request to come forward. There being no one else wishing to speak, Mayor Brown closed the Public Hearing. Councilman Wood moved, seconded by Councilwoman Johnson, to approve Ordinance No. 2158. Motion carried 6-0. 12. PZ 96-28 PUBLIC HEARING TO CONSIDER THE REQUEST OF SPAIN PROPERTIES TO REZONE BLOCK 11, SNOW HEIGHTS NORTH ADDITION, FROM R-7-MF MULTI FAMILY RESIDENTIAL TO A PLANNED DEVELOPMENT FOR MULTI FAMILY RESIDENTIAL (LOCA TED AT THE NORTHEAST CORNER OF LEWIS DRIVE AND KILMER DRIVE) ORDINANCE NO. 2159 DENIED e e e City Council Minutes November 25, 1996 Page 5 Mayor Brown opened the Public Hearing and called for anyone wishing to speak for or against the request to come forward. Mr. Rick Garza, architect and representative of the developer, appeared before the Council and spoke in favor of the request. Mr. Marvin Smith, 7609 Douglas Lane, appeared before the Council and spoke in favor of the req uest. Ms. Jennifer Leigh, 6923 Sierra Lane, spoke in opposition to the request. Ms. Leigh was concerned with the traffic and requested that Council maintain the requirement of 16 units per acre. Mr. Dean Ellridge, representing the joint venture proposing to build the project, spoke in favor of the project. Mr. Ellridge advised originally the property was acquired with the intention of developing a low income type property. He stated that a market survey found that the City could use an upscale development as opposed to the low income type property. Mr. Ellridge stated they needed to increase the density in order to make an upscale development feasible. Mr. Keith McCall, 5520 Meadow Oak, spoke in opposition to the request. Mr. McCall was concerned that the increased density would increase the traffic problems in the area. There being no one else wishing to speak, Mayor Brown closed the Public Hearing. Councilman Wood moved, seconded by Councilman Welch, to deny Ordinance No. 2159. Motion to deny carried 6-0. 13. PS 96-30 REQUEST OF DANIEL G. HAM FOR SHORT FORM FINAL PLAT OF LOT 1R1, BLOCK 1, MCKEE ADDITION (LOCATED AT 7612 SHADY GROVE ROAD) (DENIED AT THE OCTOBER 28,1996 CITY COUNCIL MEETING) APPROVED Councilwoman Johnson moved, seconded by Councilman Sibbet, to approve PS 96-30. Motion carried 6-0. e e e City Council Minutes November 25, 1996 Page 6 14. PS 96-31 REQUEST OF LINDA OWEN FOR REPLA T OF LOT 1 R, BLOCK 33, COLLEGE HILL ADDITION (LOCATED IN THE 6100 BLOCK OF DAVIS BLVD.) APPROVED Mr. Charles Owen, 6425 Martin Drive, appeared before the Council and answered questions from the Council concerning a drainage and grading plan, the previous abandonment of Ross Road and retaining Ross Road right-of-way as a public access easement. After discussion, Councilman Phifer moved, seconded by Councilwoman Sansoucie, to approve PS 96-31 . Motion carried 5-1; Councilwomen Johnson and Sansoucie and Councilmen Welch, Phifer and Sibbet voting for and Councilman Wood voting against. 15. GN 96-135 CONSIDER ESTABLISHING POOL WASTEWATER DISCHARGE AND LOT GRADING REGULATIONS FOR SWIMMING POOLS (TABLED AT THE NOVEMBER 11, 1996 CITY COUNCIL MEETING) - ORDINANCE NO. 2154 POSTPONED Councilman Wood moved, seconded by Councilwoman Johnson, to postpone GN 96-135 for further study. Motion carried 6-0. 16. GN 96-140 LOCAL LAW ENFORCEMENT BLOCK GRANT - PUBLIC HEARING Mayor Brown opened the Public Hearing and called for anyone wishing to speak to come forward. There being no one wishing to speak, Mayor Brown closed the Public Hearing. City Council Minutes November 25, 1996 Page 7 e *17. GN 96-141 CONSIDER BID AWARD FOR DEMOLITION OF STRUCTURE AT 3533 SHERI DON DRIVE APPROVED *18. GN 96-142 CANCELING THE DECEMBER REGULAR COUNCIL MEETINGS AND CALLING A SPECIAL DECEMBER COUNCIL MEETING APPROVED 19. GN 96-143 LONE STAR GAS COMPANY GATE RATE CASE- RESOLUTION NO. 96-71 APPROVED Councilman Sibbet moved, seconded by Councilwoman Johnson, to approve Resolution No. 96-71. e Motion carried 6-0. *20. GN 96-144 PARTICIPATION IN THE COALITION FOR COMMUNITY AND ECONOMIC DEVELOPMENT - RESOLUTION NO. 96-72 APPROVED *21. GN 96-145 APPOINTMENT OF RECORDS MANAGEMENT OFFICER - ORDINANCE NO. 2160 APPROVED *22. PU 96-89 AWARD CONTRACT FOR COLLECTION OF DELINQUENT EMS AND UTILITY SILLS APPROVED e *23. PU 96-90 AWARD BID FOR ANNUAL CONTRACT TO SUPPLY JANITORIAL PAPER PRODUCTS APPROVED City Council Minutes November 25,1996 Page 8 e *24. PU 96-91 AWARD BID FOR FIRE DEPARTMENT DUTY UNIFORMS APPROVED *25. PU 96-92 AUTHORIZE PURCHASE OF NOVELL NETWORK OPERATING SYSTEM FROM DIR APPROVED *26. PU 96-93 BEVERAGE VENDOR REQUEST FOR PROPOSAL - COCA-COLA BOTTLING COMPANY OF NORTH TEXAS APPROVED *27. PU 96-94 PURCHASE OF LOT 1 B, BLOCK 2, WALKER BRANCH ADDITION FOR GIRLS SOFTBALL COMPLEX APPROVED e *28. PU 96-95 AUTHORIZE PURCHASE OF DISK DRIVES FROM THE CITY OF RICHARDSON APPROVED *29. PAY 96-13 APPROVE FINAL PAY ESTIMATE NO. 21 IN THE AMOUNT OF $46,255.17 TO J. L. BERTRAM CONSTRUCTION & ENGINEERING, INC. FOR STRUMMER DRIVE PAVING AND DRAINAGE IMPROVEMENTS APPROVED *30. PAY 96-14 AUTHORIZE PAYMENT TO EBSCO FOR SUBSCRIPTION RENEWAL FOR THE LIBRARY APPROVED *31. PAY 96-15 AUTHORIZE PAYMENT TO INFORMATION ACCESS COMPANY APPROVED e 32. CITIZENS PRESENTATION City Council Minutes November 25, 1996 Page 9 . Mr. Tim Noonan, 5349 Lynda Court, appeared before the Council. Mr. Noonan advised that his dog had bitten a neighbor's child. Mr. Noonan briefed the Council on the events that took place with City Staff after the incident and he felt the City was not responding to his problem. Assistant City Manager Shiflet advised that the City was in consultation with the City Attorney and was required to respond as the City Atttorney advises. 33. ADJOURNMENT Mayor Brown adjourned the meeting. Tommy Brown - Mayor e ATTEST: Patricia Hutson - City Secretary . ~. . e CITY OF NORTH RICHLAND HillS MINUTES OF THE INVESTMENT COMMITTEE MEETING JULY 16,1996 Present: Pat Elfrink - Finance Director Jackie Theriot - Accounting Manager Debbie Durko - Budget Coordinator Victor Jones - Utility Services Manager Bret Starr - Accountant Absent: Larry J Cunningham, Assistant City Manager Item 1: Approve Minutes of Previous MeetinQ Discussion: The minutes were approved without objection. Action: No action required. Item 2: Summary of Investment Transactions for April- June, 1996 Discussion: Interest income for the period was $435,000. The portfolio balance as of June 30, 1996 was $ 39 million. The portfolio distribution on June 30, 1996 was as follows: Texpool46%, Agency Discount Notes 38%, Treasuries 10%, and LOGIC 6%. Since April 1, a total of $2.5 million has been received in sales tax collections. On June 18, proceeds in excess of $7 million were received from the issuance of the 1996 G.O. and C.O. bonds. These inaeases were partially offset by operating and capital expenditures for the quarter in excess of $3 million. Over the quarter, overnight interest rates have declined while 6 month and one year rates have increased. To take advantage of rising rates, excess funds were withdrawn from Texpool and invested in 6 month and one year securities for an increase in yield of between 30 and 50 basis points. On June 13, an investment trade failed, leaving $1,000,000 in NationsBank overnight. The trade was settled the following day, with the City receiving credit for the lost day of interest. These events are fairly common in trading, and should not be considered a problem with a particular broker unless a pattern of failures or other irregularities develops. Action: No action required. e e Item 3: Approval of Third Quarter Investment Report Discussion: The Third Quarter Investment Report was presented to the Investment Committee and discussed in detail. Mr. Elfrink questioned the current method of maintaining funds in NationsBank to cover expected check clearings. He mentioned the practice of establishing a ·sweep· account with the bank to move funds into an overnight interest earning investment, similar to a repurchase agreement or money market, but with the bank determining the amount of funds transferred each night and the funds being automatically returned to the consolidated account each morning. Mr. Elfrink also indicated that the fees charged for this service may exceed the interest earned on the funds. Action: The investment report was approved unanimously and directed to be presented to Council. Staff will investigate the merits of ·sweep· accounts and present any recommendations as time permits. Item 5: Discussion and Removal of BrokerlDealers Discussion: Since the last Investment Committee meeting, MGSI Securities, an approved broker/dealer, has gone out of business. Since the city has all investments in safekeeping with NationsBank, the closure of this broker will have no impact on the investments of the City. However, it is recommended that MGSI be removed from the list of approved broker/dealers. As reported in the last meeting of the Investment Committee, NationsBanc Capital Markets has merged its institutional operations with NationsBank. In order to maintain the highest safety of investments, as outlined by GASB Statement 3, staff requests that NationsBanc Capital Markets be removed from the list of approved broker/dealers. This will prevent the City from safekeeping its investments with the same entity the investments are purchased from. Action: A motion to remove MGSI was made by Pat Elfrink, seconded by Jackie Theriot, and passed unanimously. A motion to remove NationsBanc Capital Markets was made by Jackie Theriot, seconded by Pat Elfrink, and passed unanimously. - MINUTES OF THE PARKS AND RECREATION BOARD OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD AT THE NORTH RICH LAND HILLS, PRE-COUNCIL CHAMBERS LOCATED AT 7301 NORTHEAST LOOP 820 October 7, 1996 - 6:00 P.M. ATTENDANCE PRESENT: Board: Don Tipps Sharon Battles Bobbie Lambert Pam Jackson Ann Perchard Cheryl Lyman Chairman Vice Chairwoman Board Member Board Member Board Member Board Member Staff: . Jim Browne Sandra Miller Chris Swartz Patty Moos Monica Sue Walsh Director of Parks & Recreation Secretary, Parks and Recreation Aquatic Manager Park Planning and Construction Superintendent Assistant Director of Parks & Recreation ABSENT: Rick Work J. Douglass Davis Board Member Board Member ITEM 1. CALL TO ORDER Mr. Tipps called the meeting to order October 7, 1996 at 6:00 P.M. ITEM 2. APPROVAL OF THE MINUTES (Passed 6-0) Ms. Jackson made a motion, seconded by Ms. Perchard, to approve the minutes of the August 5, 1996 meeting. e 1 ITEM 3. INTRODUCTION OF NEW BOARD MEMBER Mr. Browne introduced and welcomed Cheryl Lyman as the new Parks and Recreation Board member. Ms. Lyman will be serving as the Alternate for the Board. ITEM 4. INTRODUCTION OF NEW STAFF MEMBER Mr. Browne introduced Ms. Charlotte Wylie as the new Tennis Center Manager for the Richland Tennis Center. Ms. Wylie comes to North Richland Hills from Topeka, Kansas. Ms. Wylie joined the department in August 1996. ITEMS. TEXAS PARKS AND WILDLIFE DEPARTMENT GRANT FUNDS AWARDED AND TEXAS DEPARTMENT OF TRANSPORTATION ISTEA GRANT FUNDS Mr. Browne informed the Board that the Parks and Recreation Department had been awarded grant funds from the Texas Parks and Wildlife Department in the amount of $500,000 for the new Girls Fast Pitch Softball Complex. Other funds received for the Parks and Recreation Department were from the Texas Department of Transportation Commission from the Intermodal Surface Transportation Efficiency Act (ISTEA) in the amount of $475,315. These funds are for the North Hills Multi-Use Trail and Landscaping project along Calloway Branch. He summarized that the department had received grants over the last few years totaling approximately $8,000,000. ITEM 6. COUNCIL ACTION ON PARK BOARD RECOMMENDATIONS FOR PARK AND FACILITY NAMES The Board was provided a City Council cover sheet regarding proposed names for five Parks and Recreation facilities. Mr. Tipps expressed disappointment and felt as though something had been lost regarding the name of the tennis center. ITEM 7. PLAN FOR THE GIRLS FAST PITCH SOFTBALL COMPLEX Mr. Jim Cooper, MESA Design, made a formal presentation to the Board with an architectural rendering of the concept plan for the Girls Fast Pitch Softball Complex. A handout was also provided to all in attendance. Mr. Browne said that the bid process would start soon. 2 Mr. Lambert inquired if there would be shade over the dugouts and stands. Mr. Cooper stated that this could be added later to the stands and had been designed to cover the dugouts. . Ms. Battles made a motion, seconded by Mr. Lambert, recommending approval of plans to City Council. Motion passed 5 - O. ITEM 8. CONCEPT PLAN FOR 100 ACRE PARK SITE Mr. Bob Stoffels, J.T. Dunkin and Associates, made a formal presentation to the Board with an architectural rendition of the concept plan for the 100 Acre Park site. Copies of the concept plan were passed out to Board members and others in attendance. Mr. Bob Roberts of 7624 Douglas Lane, raised questions on the number of parking spaces allocated for the site. Staff replied that there were 60 parking spaces allocated per ballfield. He also wanted to know what plans had been made to deter sound from the activities for the neighborhoods. Staff informed him that fields had been placed at a lower than grade elevation. The question was also raised regarding park hours. Mr. Roberts was told that the hours would be the same as our other facilities due to City ordinances mandating hours of operation. Mr. Roberts was in favor of the plan and felt that if the residents were informed there would be a more positive reaction from the start of the project. Mr. Roberts brought to the Board's attention that a North Richland Hills resident, Mr. Tywater, living in this was area was a descendent of Daniel Boone. He said that Mr. Tywater had lots of information . regarding Daniel Boone and wondered if the department could try to obtain information from this elderly gentleman. Mr. Browne said that an archeological/historical evaluation could be conducted of the area as part of the grant. Ms. Jackson made a motion, seconded by Ms. Battles that the concept plan be recommended to City Council for approval. Motion passed 5 - O. ITEM 9. TENNIS CENTER BUSINESS PLAN Ms. Monica Walsh discussed the Tennis Center Business Plan which included the facility goals, objectives and programs. Mr. Tipps inquired about the availability of courts for students. Ms. Walsh stated that there would be eight courts available for the students to use and that she was meeting with the coach on programming. Ms. Perchard made a motion, seconded by Ms. Lyman, for the plan to be recommended to City Council for approval. Motion passed 5 - O. . 3 ITEM 10. PARK OPERATIONS AND CAPITAL IMPROVEMENT PROGRAM STATUS REPORT Ms. Patty Moos provided a report of the status of the Parks Maintenance Department and Capital Improvement Projects. Discussion was held. Calloway Branch Trail - Proceeding with gathering base data and preparing on-site survey information. The Tennis Center and Practice Fields - Tennis Courts have been poured with the Masonry and wall framing completed on the pro shop building. The light poles and fencing are being installed. North Electric Trail - Design work has almost reached completion. TxDOT is in process of reviewing the preliminary design. Little Bear Creek Trail - On-site survey information and preliminary design work is in progress. Glenview Neighborhood Park - Playground construction is complete. The lake construction and site grading is scheduled to begin this fall. Phase I Bike Route Signage and Signs - Currently in process of gathering base data and preparing on- site survey information and preliminary map work. The ISTEA Grant Application for the North Hills Mall Multi-Use Trail project was awarded in August 1996. The department is proceeding with the consultant selection. Design work is complete for the Girls Fast Pitch Softball Complex. The project awarded a grant in the amount of $500,000 and plans have been sent to Texas Parks and Wildlife Department for review. Design work is still continuing for the City Park Site. Brinkley Sargent Architects have begun preliminary research planning for the NRH20 Master Plan update. Gary Kutilek of Landscape Alliance is in the process of preparing more detailed concepts for the various types of signage for our parks and trails. Richfield Park improvements have been placed on hold pending further discussions with Richfield Youth Association. Mid-Cities Boulevard Landscape and Irrigation project plans and specifications are being prepared for and are tentatively scheduled for bidding in Spring 1997. Dan Echols Parking Lot and Playground Improvement plans are being prepared for bid. 4 ITEM 11. RECREATION, ATHLETICS AND SENIOR ADULTS . Ms. Monica Walsh provided a report of activities in recreation, athletics, and senior adult services. Fall programs began the week of August 26th. Friday Night Out Teen Dance had over 800 teens that participated in the first dance of the school year. BURSEY ROAD CENTER Renovation and expansion of the Bursey Road Senior Center is currently in process with anticipation of returning by the end of the month. DAN ECHOLS CENTER Sara Hunsucker, Dan Echols Senior Center Supervisor, and Ruth Hamilton were nominated for the Northeast Star Telegram Volunteer of the Year Award. The Swingin' Seniors performed at Pioneer Days in Fort Worth for a 30 minute program. ATHLETICS . The 1996 Corporate Challenge consisted of thirteen companies participating from within the Metroplex. Adult softball registration reached an all time high with 103 teams registered. NYSCA training for football, basketball, cheerleading and soccer concluded with over 200 coaches certified. TENNIS CENTER The facility will be opening for programming in January 1997. Currently plans are being made for staffing, merchandising and promotion of the facility. ITEM 12. AQUATICS REPORTS Mr. Chris Swartz updated the Board regarding activities at NRH20. Guest Service scores climbed a full tenth of a point from 1995 to 1996 with a 4.72 out of 5. Contributing factors for the rise have been the new tube slide, allowing coolers in the park along with Professor Frogstein and the Elements of Fun. . Park attendance increased 20.28 percent from 1995 to 1996. In the 1996 season 222,986 visits were paid to the park which is an increase of 37,611 from last year. Season pass sales grew 53%. In 1995, 5,250 in comparison to 8,050 being sold in 1996. 5 Mr. Lambert inquired if staff was looking at new ideas for additions in the future. Mr. Swartz stated that staff was currently in the process of researching and looking at larger attractions. ITEM 13. DISCUSSION OF OTHER ITEMS NOT ON AGENDA Mr. Glenn Nerwin, Beautification Member and City Volunteer, was in attendance to introduce two Eagle Scouts, Nathan Gasser and Rusty Hicks. These two Eagle Scouts had completed work at the 100 Acre City Park to achieve completion of an Eagle Scout project. Mr. Nerwin informed the Board that this was the seventh or eighth Eagle project that had been completed. Nathan Gasser widened the trail behind Adventure World to the canopy forest and Rusty Hicks eliminated smilax from the eastern section of the property which has now created a fire break. Mr. Jim Streit, NRGSL Commissioner, gave an informal report of the association. He stated that from March _ October that the park was in use full time. For the fall season they currently had 560 girls comprising 43 teams in the league. ITEM 14. ADJOURNMENT Ms. Lyman made a motion, seconded by Mr. Lambert, to adjourn the meeting at 8:14 P.M. Motion carried 5-0. ATTEST: 6 . . . INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. I R 96-134 il ~~ Date: December 16, 1996 Subject: Volunteer Award Recognizing James Douglass Davis Jr. It is our privilege to announce that the Dallas/Fort Worth Metro Area Park & Recreation Director's Association has selected James Douglass Davis Jr. as recipient of their "Volunteer Award" for 1996. Mrs. Bevy Rae Davis will be present to receive this award on Mr. Davis' behalf. The following excerpts from the award nomination from the North Richland Hills Parks and Recreation Department explain our beliefs as to why Mr. Davis was worthy of this award and summarizes a little of the impact he had on our department and this community. James Douglass Davis Jr., Park and Recreation Board Member, passed away at the age of 79. Mr. Davis worked diligently "behind the scenes" epitomizing the concept of commitment. He demonstrated the perfect example of a dedicated board member and volunteer. Initially appointed to the Parks and Recreation Board in January of 1980, Mr. Davis maintained his exceptional level of commitment for nearly 17 years of volunteer service to his community. Mr. Davis' health began to fail him over the last couple of years, yet he would not allow that to keep him from his duties. When Mr. Davis was unable to drive or walk unassisted, his loving wife Bevy Rae Davis would bring him to every meeting he could possibly attend. Mr. Davis cared about his community and wanted only the best "quality of life" for the citizens of this city. Over the past 17 years, Mr. Davis developed a great deal of pride in North Richland Hills and its park system. James Douglass Davis Jr. was generous in his praise of the staff and volunteers who worked toward the development of the park system and its recreation programs. Quick with a smile and a laugh, he uplifted the spirits of those of us privileged enough to have known and worked with him. The legacy of James Douglass Davis Jr., and of his fellow volunteer board members, will be realized each and every time a little boy gets his first base hit, every time a senior adult makes a new friend at one of our senior centers, the first time a little girl successfully completes her gymnastics routine on the beam, and every time we walk by a natural stream and enjoy the tranquility of an undisturbed forest within our community. ... ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS . When James Douglass Davis Jr. joined the Parks and Recreation Board nearly 17 years ago, the city had only three developed parks totaling about 111 acres. During his tenure on the board, the city's park and recreation system has grown to include 546 acres of parkland. In addition, the city has opened a 39,000 square foot Recreation Center, two Senior Adult Centers, an award winning family water park, and a brand new 16 court Tennis Center which will open in January. Several important planning documents were completed during Mr. Davis' years of service. The city's Park and Recreation System Master Plan, Citywide Trail System Master Plan, and the Little Bear Creek Corridor Study provided direction and guidance for the development of the city's highly respected park and recreation system. In addition, Mr. Davis was a strong supporter of cooperation between the school district and the city and was particularly committed to providing the best possible environment for young people to participate in youth sports. Mr. Davis was a stalwart advocate of training and certification of volunteer youth sports coaches. He even went through the training programs personally, achieving the status of National Youth Sports Coaches Association Lifetime Certification. North Richland Hills is better place to live, work and play because of people like James Douglass Davis Jr. I am proud to have worked with such a great volunteer and to have had the privilege to know him. . Respectfully Submitted, ~5~ Jim Browne Director of Parks & Recreation ...r-- . · - -- .'1'- "'~:.~'~:>; J·~.:r~~\· :"'''':'',,, ,; '_ ", '1" ' <~,.J ,",' INFORMAL REPORTTO MAYOR AND CITY COUNCIL No. IR 96-135 ~ Date: V Subject: December 16, 1996 Special Presentation - Certificate of Achievement for Excellence in Financial Reporting for the Comprehensive Financial Report ending _September 30, 1995 The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Financial Report for the fiscal year ending September 30, 1995. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. The Certificate of Achievement is valid for a period of one year only. The City has received a Certificate of Achievement for the last 13 consecutive years. The Certificate of Achievement for Excellence in Financial Reporting Program was established by the Government Finance Officers Association (GFOA) in 1945. The GFOA instituted the program to encourage all government units to prepare and publish an easily readable and understandable comprehensive annual financial report (CAFR) covering all funds and financial transactions of the government during the fiscal year. The GFOA believes that governments have a special responsibility to provide the public with a fair presentation of their financial affairs. CAFR's go beyond the requirements of generally accepted accounting principles (GAAP) to provide the many users of government financial statements with a wide variety of information useful in evaluating the financial condition of a government. Eligible Comprehensive Annual Financial Reports must include general purpose financial statements presented in conformity with GAAP and applicable legal requirements. These reports are also required to have been audited in accordance with generally accepted auditing standards. In order to receive a Certificate of Achievement, a CAFR should give a clear and thorough view of the government's finances. Award-winning reports should enhance the reader's understanding of the information required by GAAP for fair presentation of financial statements, be efficiently organized, and adhere to certain generally accepted terminology and formatting. The Certificate Program provides participants with extensive technical reference materials to improve their financial reporting techniques. Suggestions and comments from reviewers also help staff to improve the document. An officer of the Texas GFOA will be at the Council meeting to present the Certificate of Achievement to the City. Although no action is needed by Council, we do commend Jackie Theriot, Acting Finance Director, and the Accounting staff for their professional efforts that have afforded the City to again receive this prestigious award. Respectfully submitted, ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS . . -- CITY OF NORTH RICHLAND HILLS MEMORANDUM TO: FROM: Mayor & City Council Barry LeBaron, Director, Planning & Inspections % ~ DATE: December 13,1996 RE: P & Z MEETING DECEMBER 12,1996 The Planning & Zoning Commission considered the following items at their meeting of December 12, 1996, which will be on the City Council agenda , Monday, December 16,1996: o PS 96-40 Request of M & J Construction for amended plat of lots 1-23, block 10, Crestwood Estates, Phase III. Approved as submitted. o PZ 96-32 Public Hearing to consider the request of Glenn Thurman, Inc., for a Special Use Permit to operate a temporary concrete batch plant on Tract 11 B, Thomas Peck Survey, Abstract 1210. Approved with termination date of July 31, 1997, and fencing on 3 sides of the property. /vb CITY OF NORTH RICHLAND HILLS Department: Planning and Inspections Council Meeting Date: 12/16/96 Subject: Public Hearing to Consider the Request of Glen Thurman, Agenda Number: PZ 96-32 Inc. for a Special Use Permit to Operate a Temporary Concrete Batching Plant on Tract 11 B, Thomas Peck Survey, Abstract 1210. (This property is located at 8616 Davis Blvd.) Ordinance Number 2162 Orval Hall Excavating Company is the owner of a 4.2 acre tract of land located on the east side of Davis Blvd. at the proposed northeast corner where Precinct Line Road is planned to intersect. The property is currently zoned AG - Agriculture. Glenn Thurman, Inc., located in Balch Springs, TX., is requesting a Special Use Permit to operate a Temporary Concrete Batching Plant at this location. The applicant has indicated a need to utilize the property for six months. The attached proposed ordinance has a June 30, 1997 expiration date and allows the parking and driving areas on the site to use gravel surfaces instead of the required concrete or asphalt. The Planning and Zoning Commission will consider this Amended Plat at its December 12, 1996, meeting. The recommendation will be sent to the City Council via FAX on Friday, December 13,1996. RECOMMENDATION: It is recommended that the City Council hold the required public hearing and consider the recommendation of the Planning and Zoning Commission. Source of Funds: Bonds (GO/Rev.) Operating Budget ther Finance Review Account Number Sufficient Funds Available ,Finance Director ~ artment Head Signature KC~ City ager CITY COUNCIL ACTION ITEM e e e ORDINANCE NO. 2162 AN ORDINANCE BY THE CITY OF NORTH RICHLAND HILLS, TEXAS AMENDING ZONING ORDINANCE NUMBER 1874, THE COMPREHENSIVE ZONING ORDINANCE, TO AUTHORIZE SPECIAL USE PERMIT NUMBER THIRTY-SIX FOR A TEMPORARY CONCRETE BA TCHING PLANT; PROVIDING A TERMINATION DATE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, after appropriate notice and public hearing, the following recommendation is submitted to the City Council of the City of North Richland Hills, Texas, by the Planning and Zoning Commission; and WHEREAS, the Planning and Zoning Commission of the City of North Richland Hills, Texas, has forwarded a recommendation to the City Council for amendment of Ordinance No. 1874 by authorizing Special Use Permit Number Thirty-Six, 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. THAT, Special Use Permit Number Thirty-Six (36) be hereby authorized for a Temporary Concrete Batching Plant as set forth in Case Number PZ 96-32 on the property described as follows: Portion of Tract 11 B, Thomas Peck Survey, Abstract 1210, Tarrant County, Texas, as shown on the attached site plan "Exhibit A". This property is generally located at 8616 Davis Blvd. 2. THA T, the development regulations contained in the C-2 Commercial Zoning District of Ordinance Number 1874, as amended, shall govern development on said property, except where amended below: A. Location: Per attached site plan labeled "Exhibit A". B. Parking and driving areas may be gravel surface. 3. That, all the regulations contained in the Zoning Ordinance Number 1874, as amended, which are not in conflict with the terms of this Special Use Permit, shall remain in full force and effect regarding this property. e e e 4. EXPIRATION DATE. This Special Use Permit Number Thirty-Six, for a Temporary Concrete Batching Plant, shall expire on June 30, 1997. All equipment and materials associated with this use shall be removed from the property by the expiration date. 5. 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. 6. EFFECTIVE DATE. This ordinance shall be in full force and effect from and after its passage. APPROVED BY THE PLANNING AND ZONING COMMISSION THIS 12th DAY OF DECEMBER 1996. Chairman, Planning and Zoning Commission Secretary, Planning and Zoning Commission PASSED AND APPROVED BY THE CITY COUNCIL THIS 16th DAY OF DECEMBER 1996. Mayor City of North Richland Hills, Texas ATTEST: City Secretary City of North Richland Hills, Texas APPROVED AS TO FORM AND LEGALITY: Attorney for the City 2 e " E)(h;~;t 37' fl4.n t ~; fc. ---- . , "...,- " r\"- ~ ¿ ..Â ..~ ~ ~(,;" ffO kJ a;" " " ~ ff..^t1 ~ R.....é. o J:....J __0 ill [f'" . . 1 . . - ~~ a...t..,u..... ~~ '5 / - --> --..: - e 1'\ A ., ., 1- 100' r' 'c' N-RH APPLICATION FOR A SPECIAL USE PERMIT City of North Richland Hills 7301 NE Loop 820 North Richland Hills, Texas 817-581-5500 (Please print or type all responses) PART 1. APPLICANT INFORMATION Name of applicant / agent: Glenn Thurman, Inc. FBO Orval Hall Excavating Co. Street address of applicant / agent: 3180 S. Beltline, Balch Springs, TX 75180 City / State / Zip Code of applicant / agent: P.O. Box 850842, Mesquite, TX 75185-0842 Telephone number of applicant / agent: (972) 286-6333 PART 2. PROPERTY OWNER INFORMATION Name of property owner: Orval Hall Excavating Co. Street address of property owner: 201 N. E. 29th St. City / State / Zip Code of property owner: Fort Worth, Texas 76106 Note: Attach letter or affidavit from property owner if different from applicant / agent: Telephone number of property owner: (817) 624-7207 PART 3. DESCRIPTION OF REQUEST Current zoning classification: Proposed use of the property: Site for location of temporary concrete batch plant. cribe the nature of the proposed activity and any particular characteristics related to the use of the property: Erection and operation of a temporary concrete batch plant to be utilized for the paving of FM 3029. Site plan attached which conforms with the requirements included in this packet: [2J Yes Affidavit attached from property owner if applicant is not owner: ONo c:=J Yes I No I hereby certify that I am, or represent, the legal owner of the property described above and do hereby submit this request for approval of a Special Use Permit to the Planning and Zoning Commission for consideration. Print Name: Mike Forni - Date: November 26, 1996 PART 4. FOR OFFICE USE ONLY Date of Planning & Zoning Commission Public Hearing: Taxes Paid? DYes o Case Number: No Date of City Council Public Hearing: Uens Paid? œ Yes o o Fee: No $300.00 Planned Development Approved: DYes DNo Conditions of Approval: Assessments Paid? DYes No This application will not be scheduled for public hearing until the application fee is received. SPECIAL USE PERMIT CD - 414 (2/96) e e e 11/26/96 TtŒ 10:~J ~~ 811 625 29~1 ORVAL HALL I4J 002 LOHE/ ORVAL HALL EXCAVATING CO. HIGHWAY AND HEAVY CONTRACTOR (817) 624-7207 · Metro 429-03B1 · FAX 625-2941 · 201 N. E. 29th Street. Fort Worth, Texas 76106 November 26, 1996 To Whom It Ma.y Concern: We have granted Glenn Thurman, Inc. pennission to uti1i1;e the property at: Location: 8616 Davis Blvd., Nonh Rich1and Hills, Texas 76180 Lee.) Deserlption: Thomas Peck Abstract 1209 Tract lIB Owner: Oml Ran Excavating Co. for the purpose operating a concrete batch plant for the construction of: FM 3029 - Project No. SIP 95(293)MM, Tarrant County Subject to the following conditions: L Property left in condition acceptable to Orval Hall Excavating Co. upon completion. 2. No contamination of above property. 3. All applicable perßÙts to be handled by Glenn Thurman. Inc. Sincerely, ORVAL HALL EXCAVATING CO. þ~ Leslie Foster Vice President tt:fi1e Glenn Thurman, Inc. e I j , ! r----- , ,. sc ¡¡'-.'---j'" J..' : 'lit JIll H' 'All. ¡ Tilt JL I ~ , I: I"" J...__ : I. IAI ¡ ! , I I ' :__J -" fR ,... I , ¡ I l I 'lit .,. ,. I.'C ,. ~ --.-.................-..- I. i 'AIC i ! I. ~ ", IC)'" ¡ i i -..-----.-.--.......- -= --.....---.--..--..---.--. ------ e -----...-....- rs ) ¡' '{ L.~MI S i " ~ 1~ ~ 13 -;7'Co, >\ .\,. < ., -::C-- c ;~.:J,t:... C ., :ï\J~'I~ ....:~- ~~~ .-.¡-. ~. I~ ._:..' ~ ::::: .) .....-...Ir¡ ---. ¡..~ ...~:.... '3¡ I ¡ I I i ! \ ~.. ,,,,°0.;) ¡ \ ! ¡ ..'.~." . i i \ ; ¡ I ! \ \-rf/¥> i ~ i ! I \ ~ i r. or, I i i I r. '.. ! ! II I I \ 11% ~ ¡ : ~ ~ i \ : : I I ¡ ~ I ¡ \ ! I ", IC" ~ ! r---t--....... j ,It ICI i ~ i r. IC2 f. ICJ ! (,0 , c:\' -:.\. -.;:~"". . ,~",,,þ, I ,..: \'Ì ~)\ ;\ ~."^ ¡ ';"~\.' \,,0- -. ,.. i ¡ 1 i f I I j ¡ I î"'.., ¡ ! ! i ! ¡ i~ ¡ I I j i :: ! ~ : Q I ª i w ¡ ! 4 I ,. II. . : - - ! V . :: : : _ . a * i KELLER ¡ Coo, +ÿ L ~"'" Tsl : ! I : ! ~ : : ! , ,. IC! ,. IC)' ,. 11el \ i ; - ! ---.-...-.......... r. "C ......... I I -·...-.....t· "7 {c/ ,. I"U. fI I.. r. 'I( AG ..\\ ~.. \.,.~\,,,,. ,-' 1 .I. - 1:'\ fIÞY; ;~; .J W Ò j ..; ~"(:' ... "6 It ~ I w A~ t-l ....._._...._..__.__...__...~ '''''~f ~ - r. 11CI ':. 11& T. I J) '0 ~................................_.... ! " . ·r. _....._..._....4.........._........._... fI . ':, ..-,I. ('. , ',' ....·..·1 ;···..·-r··-·-·········· I"~ 'I ' .r . '. AG ~t '..~ . /;. )v ...-...,......... ~. \ \ , , , I i ¡ I. jM ¡-"r \ \ \ ~' ï I \ T1 : ! ~ ~ r ,~ 'ì U ')"'- A\\\\' <\,tL . ORDINANCE NO. 2162 AN ORDINANCE BY THE CITY OF NORTH RICHLAND HILLS, TEXAS AMENDING ZONING ORDINANCE NUMBER 1874, THE COMPREHENSIVE ZONING ORDINANCE, TO AUTHORIZE SPECIAL USE PERMIT NUMBER THIRTY-SIX FOR A TEMPORARY CONCRETE BA TCHING PLANT; PROVIDING A TERMINATION DATE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, after appropriate notice and public hearing, the following recommendation is submitted to the City Council of the City of North Richland Hills, Texas, by the Planning and Zoning Commission; and WHEREAS, the Planning and Zoning Commission of the City of North Richland Hills, Texas, has forwarded a recommendation to the City Council for amendment of Ordinance No. 1874 by authorizing Special Use Permit Number Thirty-Six, by changing said Zoning Ordinance as set forth herein; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS, TEXAS: 1. . THAT, Special Use Permit Number Thirty-Six (36) be hereby authorized for a Temporary Concrete Batching Plant as set forth in Case Number PZ 96-32 on the property described as follows: Portion of Tract 11 B, Thomas Peck Survey, Abstract 1210, Tarrant County, Texas, as shown on the attached site plan "Exhibit A". This property is generally located at 8616 Davis Blvd. 2. THAT, the development regulations contained in the C-2 Commercial Zoning District of Ordinance Number 1874, as amended, shall govern development on said property, except where amended below: A. Location: Per attached site plan labeled "Exhibit A". 8. Parking and driving areas may be gravel surface. C. Fencing required on three sides. 3. That, all the regulations contained in the Zoning Ordinance Number 1874, as amended, which are not in conflict with the terms of this Special Use Permit, shall remain in full force and effect .. regarding this property. I . . .. 4. EXPIRATION DATE. This Special Use Permit Number Thirty-Six, for a Temporary Concrete Batching Plant, shall expire on July 31, 1997. All equipment and materials associated with this use shall be removed from the property by the expiration date. 5. 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. 6. EFFECTIVE DATE. This ordinance shall be in full force and effect from and after its passage. APPROVED BY THE PLANNING AND ZONING COMMISSION THIS 12th DAY OF DECEMBER 1996. """-Ð ~ -/ C~m1an, Planning and Zoning Commission Secretary, Planning and Zoning Commission PASSED AND APPROVED BY THE CITY COUNCIL THIS 16th DAY OF DECEMBER 1996. Mayor City of North Richland Hills, Texas ATTEST: City Secretary City of North Richland Hills, Texas APPROVED AS TO FORM AND LEGALITY: Attorney for the City 2 · · · TO: FROM: DATE: RE: CITY OF NORTH RICHLAND HILLS MEMORANDUM Mayor & City Council Barry LeBaron, Director, Planning & Inspections % ~ December 13,1996 P & Z MEETING DECEMBER 12,1996 The Planning & Zoning Commission considered the following items at their meeting of December 12, 1996, which will be on the City Council agenda . Monday, December 16,1996: /vb o PS 96-40 Request of M & J Construction for amended plat of lots 1-23, block 10, Crestwood Estates, Phase III. Approved as submitted. o PZ 96-32 Public Hearing to consider the request of Glenn Thurman, Inc., for a Special Use Permit to operate a temporary concrete batch plant on Tract 11 B, Thomas Peck Survey, Abstract 1210. Approved with termination date of July 31, 1997, and fencing on 3 sides of the property. CITY OF NORTH RICHLAND HILLS Department: Planning and Inspections Council Meeting Date: 12/16/96 Subject: Request of M & J Construction Corp. for Amended Plat of Lots 1-23, Block 10 Crestwood Estates, Phase III (Located in the 7500 block of Smithfield Road) Agenda Number: PS 96-40 M & J Construction Corp. is the owner of a 23 lot single family residential subdivision located on the east side of Smithfield Road in the 7500 block. The original plat was approved by the City Council on January 22, 1996. However, the plat is being amended to include two easements to better accommodate drainage and utilities in the subdivision. State statutes provide for amended plats to be approved in the same manner as the original plat once the original has been filed for record in the county deed and plat records. The Planning and Zoning Commission will consider this Amended Plat at its December 12, 1996, meeting. The recommendation will be sent to the City Council via FAX on Friday, December 13, 1996. RECOMMENDATION: It is recommended that the City Council approve the recommendation of the Planning and Zoning Commission. Source of Funds: Bonds (GO/Rev,) Operating Budget Other Finance Review Account Number Sufficient Funds Available ,Finance Director ¿C~ CITY COUNCIL ACTION ITEM CITY OF NORTH RICHLAND HILLS, TEXAS CITY OF NORTH RICHLAND HILLS Department: Planning and Inspections Council Meeting Date: 12/16/96 Subject: Consider Establishing Swimming Pool Lot Grading and Drainage Regulations Agenda Number: GN 96-135 Tabled 11/25/96 Ordinance Number 2154 Attached is Ordinance Number 2154, which requires pool contractors meet certain drainage and lot grading standards. The proposed ordinance establishes new drainage and lot grading requirements for pool contractors. The City Council adopted lot grading requirements for newly constructed houses in July 1995. However, there are no similar requirements for pool contractors. Many drainage problems occur when swimming pools are constructed close to a side or rear property line and drainage flows are changed when the backfill is sloped all the way to the property line. The proposed ordinance will (1) require pool contractors to submit a proposed drainage plan showing how the lot will drain as a prerequisite to obtaining a building permit, and (2) prevent pool contractors from filling any property within two feet of a side or rear property line. For special conditions, the regulations allow a drainage plan prepared by a registered professional engineer to deviate from the established criteria. If approved, staff will schedule a workshop for area pool contractors to explain the new regulations. RECOMMENDATION: It is recommended that the City Council approve Ordinance Number 2154. Source of Funds: Bonds (GO/Rev.) Operating Budge Other Finance Review Account Number Sufficient Funds Available ,Finance Director ~c~ CITY COUNCIL ACTION ITEM CITY OF NORTH RICHLAND HILLS, TEXAS e ORDINANCE NO. 2154 AN ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, ESTABLISHING LOT GRADING REQUIREMENTS FOR PUBLIC, SEMI- PUBLIC, AND PRIVATE SWIMMING POOLS; AND CONTAINING A SEVERANCE CLAUSE, A PENALTY CLAUSE FOR VIOLATION, AND AN EFFECTIVE DATE. WHEREAS, the City Council of the City of North Richland Hills, Texas, has determined that the regulation of lot grading for public, semi-public, and private swimming pools is necessary for the health, safety, and general welfare of the citizens of the City, now, therefore, Be it ordained by the City Council of North Richland Hills, Texas that: Section 1 DEFINITIONS A. Private Pool - any pool located on private, single-family residential property under the control of the homeowner or tenant, the use of which is limited to members of e the homeowner's or tenant's family or invited guests. B. Public Pool - any pool which is intended to be used by the general public for swimming, bathing or other related purposes and is operated by an owner, lessee, operator, licensee or concessionaire, regardless of whether a fee is charged for use. C. Swimming Pool or Pool - any structure, basin, chamber or tank containing an artificial body of water for swimming, diving or recreational bathing. D. Wading Pool - A constructed or prefabricated pool used for wading which is less than twenty-four (24) inches in depth. Section 2 APPLICABILITY These regulations shall apply to all public, semi-public, private pools over twenty-four (24) inches in depth or which contain more than two thousand (2,000) gallons of water and are permitted for construction after the effective date of this ordinance. e e Section 3 SWIMMING POOL GRADING AND DRAINAGE REQUIREMENTS No building permit shall be issued or final inspection approved unless the proposed swimming pool and pool deck are in compliance with the lot grading and drainage requirements established in these regulations. A. All building permit applications for swimming pools and pool decking shall include a plot plan drawn to scale showing the following: 1. the limits of the proposed pool and pool decking, 2. any proposed landscaping walls or retaining walls, and 3. the proposed drainage after completion of the proposed pool and pool decking and the existing drainage flows on all adjacent lots. B. No pool deck shall be located nearer than two (2) feet to a site boundary or within any drainage or utility easement. C. Lots shall be graded to comply with the following: e 1. All surface water to drain away from any pool or pool deck. 2. All grading plans to be consistent with the approved drainage plan for the subdivision. 3. The toe of any fill slope or top of any cut slope shall not be nearer to a side or rear property line than one half the height of the slope or cut. The minimum distance in this situation shall be two (2) feet. 4. No cut or fill shall be made within any drainage easement. 5. No cut or fill slope associated with a pool or pool deck shall exceed a 3: 1 ratio. 6. The Building Official may require a retaining wall to maintain compliance with these drainage requirements. D. The Building Official may approve alternate setbacks or drainage patterns when shown on a grading plan which has been prepared and sealed by a registered professional engineer. Section 4 SEVERANCE CLAUSE e That it is hereby declared that the sections, articles, subsections, paragraphs, sentences, clauses, and phrases of this ordinance are severable and if any phrase, clause, sentence, paragraph, subsection, article or section of this ordinance shall be declared void, ineffective, or unconstitutional by a valid judgment or final decree of a court of competent jurisdiction, such voidness, ineffectiveness or unconstitutionality shall not effect any of the remaining phrases, clauses, sentences, paragraphs, 2 e subsections, article or sections of this ordinance since the same would have been enacted by the City Council with the incorporation herein of any such void, ineffective or unconstitutional phrase, clause, sentence, paragraph subsection, article or section. Section 5 PENAL TV CLAUSE Any person, firm, association of persons, company, corporation or their agents, servants or employees violating or failing to comply with any of the provisions of any Health Article shall be fined upon conviction not less than one dollar ($1.00) nor more than two hundred dollars ($200.) And each day any violation of noncompliance continues shall constitute a separate and distinct offense. The penalty provided herein shall be cumulative of other remedies provided by state law and the power of injunction as provided in Vernon's Ann. Civ. St. Art. 1175(f), (1) to (8) and as may be amended may be exercised in enforcing this article whether or not there has been a complaint filed. Section 6 EFFECTIVE DATE e This ordinance shall be in full force and effect from the date of passage and approval and publication as required by law: Passed and approved this Day of ,19_. Tommy Brown, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: e Rex McEntire, Attorney for the City 3 CITY OF NORTH R/CHLAND H/LLS e Department: Subject: Administration Signalization of the Intersection at Glenview Drive and Ruth Road Council Meeting Date: 12/16/96 Agenda Number: GN ~R-14R We have been approached by the North Hills Mall and the City of Richland Hills to participate in a traffic signal at the intersection of Glenview Drive and Ruth Road. This would be very beneficial to North Hills Mall and the traffic that they generate. The attached letter from the City of Richland Hills shows the estimated cost as designed by Bartmon- Aschman & Associates. This is an engineering firm that we use and their work is very good. We would suggest that we participate on an equal basis with the City of Richland Hills and North Hills Mall. It is our suggestion that we approve this expenditure, not to exceed $20,000. Funds are available from the Unspecified Streets Account #13-00-00-0127. Recommendation: It is recommended that the City Council approve installation of a signal light at the intersection of Glenview Drive and Ruth Road, not to exceed $20,000.00 Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Acct. Number 13-23-30-6000 Sufficient Funds Av ilable FIn....ce DncIor Department Head Signature CITY COUNCIL ACTION "EM Page 1 of e CITY OF RICHlAND HillS, TEXAS POLICE DEPARTMENT 595-6612 · 6700 BAKER BLVD. . RICHLAND HILLS, TEXAS . 76118 December 3 t 1996 96-01-119 PDL C.A. Sanford City Manager City of North Richland Hills P.O. Box 820609 North Richland Hills, TX 76182-0609 Dear Mr. Sanford, e Pursuant to our previous conversations, the city of Richland Hills is prepared to initiate the signal installation project at Glenview Drive and Ruth Road. Once completedt traffic movement along Glenview Drive and to and from North Hills Mall, should be significantly enhanced. The engineering firm of Barton-Aschman Associates, Inc., has estimated the cost of this project at $60tOOO, excluding preemption devices (attachment 1). Funding would be shared equally by the cities of Richland Hills and North Richland Hills and North Hills Mall. Future maintenance costs would be assumed by Richland Hills, as would responsibility for the signal system upon initiation of the project. Your city can be as involved as you desiret and at a minimum, will be provided copies of all correspondence related to the installation. Project initialization is targeted for January 1997. Thank you for your consideration of this request. I look forward to your reply. ({Ul;;J cc: James W. Quin City Manager e n ttl Printed on Recycled Paper CITY OF NORTH RICHLAND HILLS Department: Library Council Meeting Date:12116196 Subject: Information for Citizens Network of Northeast Tarrant County - Agenda Number: GN 96-147 Resolution No. 96 - 75 Since last April, representatives of Northeast Tarrant County libraries, school districts, colleges, and non-profit hospitals have been meeting together to discuss the possibility of building electronic links to join these various educational institutions together in a learning and sharing network for the benefit of the citizens of the region. N~heast Tarrant County is an area characterized by many small, contiguous jurisdictions. Building a strong telecommunications infrastructure in such an area presents challenges in terms of building cooperation bet\Yeen the many library, health, and educational institutions. Each city and school district, ansvverable directly for only its own citizens' needs, tends to plan only for its immediate internal telecommunications needs. The result is numerous small networks, incurring great expense but not connected together in a way that permits effective sharing of information resources. Building a cooperative regional network instead of many small independent ones offers several benefits. It will permit competition bet\Yeen telecommunications providers offering their services to public institutions. It will facilitate the sharing of information resources bet\Yeen public institutions, and improve citizens' access to government services. And it will create new opportunities for schools, libraries, and hospitals to cooperatively purchase access to valuable electronic information resources to be shared over a regional network. The Information for Citizens Network of Northeast Tarrant County is being proposed to bring a cooperative vision to the challenge of building a network infrastructure that will serve all the citizens of the area well. By vvorking together, the member institutions can cooperatively plan and build a cost-effective regional telecommunications network, while each individual member also YJOrks to provide the resources that its own constituents need. By YJOrking together, these agencies can also reap the benefits intended by the Texas Legislature in 1995 when it created the Telecommunications Infrastructure Fund under HB 2128. The TIF fund was created from the contributions of telecommunications companies who choose to be deregulated under the provisions of HB 2128. The TIF fund is intended to provide up to $150,000,000 per year in grants to Texas schools, colleges, libraries, and non-profit hospitals for the purpose of building telecommunications infrastructure. Finance Review Source of Funds: Acct. Number Bonds (GO/Rev.) Sufficient Funds Available Operating Budget Othe( ~/ _ ~ ~¿& - '" Department Head Signature CITY COUNCIL ACT/ON ITEM . Finance Director Paoe 1 of ~_____ e e e The Information for Citizens Network of Northeast Tarrant County is proposed as a means of building a coalition capable of designing a cost effective regional telecommunications network for public institutions of the area, and of securing funding from the Telecommunications Infrastructure Fund to assist in doing this. Recommendation: It is recommended that Council adopt Resolution No. 96 - 75, allowing the City of North Richland Hills to participate in a consortium of area public institutions investigating the possible establishment of an interlocal agreement to foster creation of a shared information infrastructure for NE Tarrant County. e e e INFORMATION FOR CITIZENS NETWORK OF NORTHEAST TARRANT COUNTY Resolution No. 96-75 WHEREAS, the nation is moving from an industrial age into an information age, and WHEREAS, there is a need to provide equity in access to information to the citizens we represent and serve, and WHEREAS, to provide citizens access to information it will be necessary to develop high quality information infrastructure capability, and WHEREAS, there is a valid governmental purpose served by creating such an infrastructure to encourage a better informed citizenry, improve the quality and availability of information resources, provide increased learning opportunities and encourage creation of cost-effective resource sharing, and WHEREAS, an economy of scale is to be achieved by securing funds and building a single information infrastructure to serve many parties and by coordinating efforts among them, thereby eliminating duplicate expenses that each party would incur in meeting its infrastructure needs if constructed individually, and WHEREAS, there is a valid governmental need to work collaboratively with other parties to apply for and receive grants and other funding to construct a single information infrastructure, and WHEREAS, the state of Texas has legislatively provided access to funds through HB 2128 for infrastructure construction. Now, therefore be it resolved that the City of North Richland Hills agrees to enter negotiations with other interested public institutions of Northeast Tarrant County seeking to establish the basis of an interlocal agreement in order to foster the creation of a shared telecommunications infrastructure and information network, which shall be known as Information For Citizens Network of Northeast Tarrant County. Passed by the City Council on this day of ,1996. Tommy Brown, Mayor ATTEST: APPROVED AS TO CONTENT: Patricia Hutson, City Secretary Steven L. Brown, Library Director APPROVED AS TO FORM: Rex McEntire, Attorney for the City CITY OF NORTH RICHLAND HILLS :;,' Department: Finance Council Meeting Date: 12/16/96 ~ Subject: Consideration of Action on all Matters Pertaininç¡ to the Award Agenda Number: and Sale of $5,135,000 Waterworks and Sewer System Revenue Bonds, Series 1996 and Adoption of Resolution No. 96-76 Providing For the Redemption of Certain Outstanding Bonds of the City GN 96-148 On September 23, 1996 City Council authorized the staff to proceed with the defeasance and refunding of existing Water and Sewer Revenue Bonds. Accordingly, on December 16, 1996, the City will receive bids at competitive sale on $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996. Upon delivery of the Bonds on January 22,1997, the City will take the proceeds from the Bond issue and refund a portion of the City's Waterworks and Sewer System Revenue Bonds callable on March 1, 1996. In addition, on the anticipated date of delivery, the City will invest in a special escrow account, the $9.2 million received from the sale to the City of Watauga and defease all of the remaining debt not refunded by the proceeds from the sale of the Bonds. The average annual debt service on the Waterworks and Sewer System Revenue debt will decrease from $1,600,000 to approximately $553,000. Estimated debt service reduction from the combined defeasance and current refunding will be approximately $12.400,000. Representatives from First Southwest Company will be available at the Council Meeting to present this item and answer any questions regarding this issue. Recommendation: It is recommended that the City Council accept the best bid for the $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 as evaluated and recommended by First Southwest Company, adopt Ordinance No. 2166 authorizing the issuance of the bonds and approving Bank One, Texas, NA, Fort Worth as Paying Agent/Registrar and adopt Resolution No. 96-76 providing for the redemption of certain outstanding bonds of the City. Finance Review Source of Funds: Acct. Number Bonds (GO/Rev.) Sufficient Funds Available Operating Budget - ....¡ J ../ Other ~~ Çf6~a~~nature {/9v C4.~~~ CITY COUNCIL ACTION ITEM Finance Dtrectot Page 1 of QEC. 9.1996 4:24PM , f" f' ' FIRST SOUTHWEST CO. e fl~8.8.~~8.8.~~8.§~ U"I = C '"II U"I = "" .- ~ In ~, r..I . ~~S::.~..S.s..~:t~~Q... ""~~r-ot'oo~....I""'_~...,= S!¡ ~ 8!: ~ ~,~ ~ ~ ~ :;:: r;¡ :;¡ ~j~8.~~8.8.~~~8.§~. 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J! ,J~ :I iJ~ ! · . r {' , e ORDINANCE NO. 2166 AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996"; prescribing the forms, terms, and provisions of said bonds; pledging the net revenues of the City's Waterworks and Sewer System to the payment of the principal of and interest on said bonds; enacting provisions incident and related to the issuance, payment, security, sale and delivery of said bonds, including the approval and execution of a Paying Agent/Registrar and a Special Escrow Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date. WHEREAS, the City of North Richland Hills, Texas (the "City") has duly issued and delivered, and there is currently outstanding the following described obligations, payable from and secured by a lien on and pledge of the net revenues of the City's combined Waterworks and Sewer System (the "System"), and totalling in original principal amount $11,308,614.60 and totalling in principal and maturity amount $17,285,000, to wit: e (1) City of North Richland Hills, Texas, Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989, dated March 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $3,995,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $4,070,000 and scheduled to mature on September 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of $8,065,000 (2) City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A, dated March 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $1,740,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $1,730,000 and scheduled to mature on September 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of $3,470,000 e 0374906 .. , ~ ' e (3) City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B, dated July 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $2,730,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $3,020,000 and scheduled to mature on september 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of $5,750,000 and all the current interest bonds described above, together with $355,000 in maturity amount of the capital appreciation bonds of the Series 1989-B Bonds scheduled to mature on September 1, 2002, totalling in principal and/or maturity amount of $8,820,000, are hereinafter collectively referred to as the "Defeased Bonds" and all of the capital appreciation bonds described above (except for the $355,000 in maturity amount of the capital appreciation bonds of the Series 1989-B Bonds scheduled to mature on September 1, 2002), totalling in maturity amount of $8,465,000, are hereinafter collectively referred to as the "Refunded Bonds"); and e AND WHEREAS, pursuant to the provisions of Article 717k, V.A.T.C.S., as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Defeased Bonds and the Refunded Bonds, and such deposit, when made in accordance with said statute, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; and WHEREAS, the City Council hereby finds and determines that refunding bonds should be issued at this time to refund the Refunded Obligations to restructure and reduce the costs of the City's revenue indebtedness in conjunction with the reduction of the customer base of the City's Waterworks and Sewer System resulting the sale of a portion of the System's assets notwithstanding the refunding will result in a gross dollar loss of approximately $ while providing present value savings of approximately $ ; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1: Authorization-Desiqnation-Principal Amount -Purpose. Revenue refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $5,135,000 to be designated and bear the title "CITY OF NORTH e 037490ð -2- f ~ e RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENJ]E REFUNDING BONDS, SERIES 1996" (hereinafter referred to as the "Bonds"), for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Bonds"), and paying costs of issuance, pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including Article 717k, V.A.T.C.S., as amended. SECTION 2: Fullv Reqistered Obliqations - Authorized Denominations - Stated Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons, shall be dated December 1, 1996 (the "Issue Date") and, other than the single fully registered Initial Bond referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), shall be numbered consecutively from One (1) upward and shall become due and payable on September 1 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the following schedule: Year of Principal Interest Stated Maturitv Amount Rate(s) 1997 $445,000 % e 1998 370,000 % 1999 385,000 % 2000 375,000 % 2001 390,000 % 2002 410,000 % 2003 425,000 % 2004 445,000 % 2005 440,000 % 2006 460,000 % 2007 485,000 % 2008 505,000 % The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the rate(s) per annum shown in the above schedule (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Bonds shall be payable on March 1 and September 1 in each year, commencing March 1, 1997. SECTION 3: Terms of PaYment - Paying Aqent/Reqistrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United e 0374906 -3- - e e states of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Bank One, Texas, N.A., Fort Worth, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, exchange and transfer of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are hereby authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or upon their earlier redemption, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Westerville, Ohio (the "Designated Payment/Transfer Office") Interest on the Bonds shall be paid to the Holders whose names appear in the Security Register at the close of business on the Record Date (the 15th day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. 037 490ð -4- e e e In the event of a non-payment of interest on one or more maturities on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment for such maturity or maturities (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the city. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by united States Mail, first class postage prepaid, to the address of each Holder of such maturity or maturities appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds maturing on and after September 1, 2005 shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on September 1,2004 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a date set for the redemption of Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of its decision to exercise the right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date set for the redemption thereof. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bond by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the city's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively 0374906 -5- e e e presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given or waived as herein provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Reaistration - Transfer - Exchanae of Bonds - Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each registered owner of the Bonds issued under and pursuant to the provisions of this Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of other authorized denominations upon the Security Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/ Registrar. Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in Section 8 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, one or more new Bonds shall be registered and issued to the assignee or transferee of the previous Holder; such Bonds to be in authorized denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 8 hereof) may be exchanged for other 037 490ð -6- e e e Bonds of authorized denominations and having the same stat-3d Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds, executed on behalf of, and furnished by, the City, to the Holder requesting the exchange. All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United states Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to Section 29 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the city nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6 : Book- Entrv Onl v Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in 0374~ -7- e e e accordance with the requirements and procedures identified in the Letter of Representation, by and between the City, the Paying Agent/Registrar and DTC (the "Depository Agreement") relating to the Bonds. Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the city covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Issue Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9D, manually executed by an authorized officer, employee or representative of the Paying 0374ØOð -8- e Agent/Registrar, and either such certificate upon any Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. e SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount noted in Section 1 with principal installments to become due and payable as provided in section 2 hereof and numbered T-1, or (ii) as twelve (12) fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser (s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration certificate of the Comptroller of Public Accounts of the State of Texas, the certificate of Registration, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends on insured Bonds and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Bonds as evidenced by their execution thereof. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved or typewritten, photocopied or otherwise e 037<4903 -9- e e e reproduced in any other similar manner, all as determined by the off icers executing such Bonds as evidenced by their execution thereof. B. Form of Definitive Bond. REGISTERED REGISTERED ~. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF NORTH RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND SERIES 1996 Issue Date: December 1, 1996 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues hereinafter identified, on the Stated Maturity date specified above, the Principal Amount stated above (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid Principal Amount hereof from the Issue Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on March 1 and September 1 of each year, commencing March 1, 1997. Principal of this Bond is payable at the Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/ Registrar at the close of business on the "Record Date", which is the 15th day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/ Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other 037490ð -10- e e e method, acceptable to the Paying Agent/Registrar, requested by, a,nd at the risk and expense of, the registered owner. All paymentsóf principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United states of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $5,135,000 (herein referred to as the "Bonds") for the purpose of refunding certain outstanding obligations, and paying costs of issuance, under and in strict conformity with the Constitution and laws of the state of Texas, including Article 717k, V.A.T.C.S., and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after September 1, 2005, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/ Registrar), on September 1, 2004, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount hereof redeemed. In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar and, there shall be issued to the registered owner hereof, without charge, a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided in the Ordinance for the then unredeemed balance of the 03741106 -11- e e e principal sum hereof. If this Bond is called for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this Bond to an assignee of the Holder within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance hereof in the event of its redemption in part. The Bonds are special obligations of the City payable solely from and equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sanitary Sewer System (the "System"). The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any property of the City or the System, except with respect to the Net Revenues. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. Subject to satisfying the terms and conditions prescribed therefor, the City has reserved the right to issue additional revenue obligations payable from and equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System, in the same manner and to the same extent as the Bonds. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the paying Agent/Registrar, and to all of the provisions of which the Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the Bonds; the properties constituting the System; the Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature and extent and manner of enforcement of the lien and pledge securing the payment of the Bonds; the terms and conditions for the issuance of additional revenue obligations; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented wi th or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the liens, pledges, charges and covenants made therein may be discharged at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no longer outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the same meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a wr i tten instrument of 0374903 -12- e e - transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, may treat the registered owner hereof whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of non-payment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and covenanted that the City is a duly organized and legally existing municipal corporation under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by a pledge of the Net Revenues of the System as aforestated. In case any provision in this Bond or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 0374900 -13- e e e IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Issue Date. CITY OF NORTH RICHLAND HILLS, TEXAS COUNTERSIGNED: Mayor City Secretary ( SEAL) C. *Form of Reqistration Certificate of Comptroller of Public Accounts to appear on Initial Bond(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS ( ( ( ( REGISTER NO. THE STATE OF TEXAS I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS signature of and office seal this my Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do Not Print on Definitive Bonds 0374906 -14- e e e D. Form of Certificate of Payinq Aqent/Reqistrar to ,~ appear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the state of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Westerville, Ohio, is the Designated Payment/Transfer Office for this Bond. BANK ONE, TEXAS, N.A., Fort Worth, Texas, as Paying Agent/Registrar Registration Date: By Authorized Signature E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned assigns, and transfers unto (Print or typewrite and zip code of transferee:) hereby sells, name, address, or other identifying number: within Bond and all rights thereunder, consti tutes and appoints (SocialSecurity ) the and hereby irrevocably attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. F. The Initial Bond(s) shall be in the form set forth in paraqraph B of this section. except that the form of a sinqle fully reqistered Initial Bond shall be modified as follows:: 0374906 -15- e e e ( i) immediately under the name of the bond the headings "Interest Rate " and "Stated Maturity " shall both be omitted;" (ii) Paragraph one shall read as follows: The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, state of Texas, for value received, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues hereinafter identified, on September 1 in each of the years and in principal amounts and bearing interest at per annum rates in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in section 2 hereof). (or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid principal amounts hereof from the Issue Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on March 1 and September 1 of each year, commencing March 1, 1997. Principal installments of this Bond are payable at its Stated Maturity or on a prepayment date to the registered owner hereof by Bank One, Texas, N.A., Fort Worth, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in westerville, Ohio (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/ Registrar at the close of business on the "Record Date", which is the 15th day of the month next preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar by check sent united States Mail, first class postage prepaid, to the address of registered owner recorded in the Security Register on the Record Date or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the united States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. For all purposes of this Ordinance and in particular for clarity with respect to the 0374906 -16- e issuance of the Bonds herein authorized and the pledge and appropriation of revenues to the payment of the Bonds, the following definitions are provided: "Additional Bonds" - The additional revenue bonds or obligations which the City reserves the right to issue on a parity with the Bonds in accordance with the terms and conditions set forth in Section 18 hereof. "Average Annual Debt Service" - That average amount which, at the time of computation, will be required to pay the Debt Service of obligations when due and derived by dividing the total of such Debt Service by the number of years then remaining before final maturity. Capitalized interest payments provided from proceeds of Bonds Similarly Secured shall be excluded in making the aforementioned computation. "Bonds" - The "City of North Richland Hills, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996, authorized by this Ordinance. e "Bonds Similarly Secured" - Collectively, the Bonds and any Additional Bonds, which shall be parity obligations being equally and ratably secured by and payable from a lien on and pledge of the Net Revenues of the System. "City" - The City of North Richland Hills, located in the County of Tarrant, 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 City 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 Bonds Similarly Secured without a fixed numerical rate, that such obligations bear, or would have borne, interest at the highest rate reached, or that would have applied to such obligations (using the index or method for computing interest applicable to such obligations) during the twenty-four (24) month period next preceding the date of computation; 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 e 037 4ØOð -17- e e e 037 490ð with the mandatory redemption provisions applicable thereto. "Fiscal Year" - The twelve month financial accounting period of the System ending September 30th of each year; provided, however, the City, by ordinance, may change the Fiscal Year to another period of not less than twelve calendar months. "Government Obligations" - Direct obligations of the united States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United states of America, and united states Treasury obligations such as its state and Local Government Series in book-entry form. "Gross Revenues" - All income, receipts and revenues of every nature derived or received from the operation and ownership (excluding refundable meter deposits, restricted gifts and grants in aid of construction, impact fees charged developers and special assessments against landowners) of the System, including earnings and income derived from the investment or deposi t of moneys in any special funds or accounts created and established for the payment and security of the Bonds Similarly Secured and other obligations payable solely from and secured only by a lien on and pledge of the Net Revenues. "Operating and Maintenance Expenses" - All current expenses of operating and maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair obligations payable from Net Revenues shall be deducted in determining Net Revenues. Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating and Maintenance Expenses shall include payments under contracts for the purchase of water supply, treatment of sewage or other materials, goods or services for the System to the extent authorized by law and the provisions of such contract. -18- e e e 0374900 "Net Earnings" - The meaning assigned to such term in Section 18 hereof. o::::v "Net Revenues" - Gross Revenues of the System, with respect to any period, after deducting the System's operating and Maintenance Expenses during such period. "outstanding" - When used in this Ordinance with respect to Bonds or Bonds Similarly Secured, as the case may be, means, as of the date of determination, all Bonds and Bonds Similarly Secured theretofore sold, issued and delivered by the City, except: (1) those Bonds or Bonds Similarly Secured cancelled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Secured paid accordance with hereof; and Bonds or Bonds Similarly or deemed to be paid in the provisions of section 28 (3) those Bonds or Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Required Reserve - The amount required to be deposited and maintained in the Reserve Fund under the provisions of Section 14 of this Ordinance. "System" - All properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment and transmission of treated potable water and the collection, treatment and disposal of water-carried wastes, together with all future extensions, improvements, replacements and additions thereto; provided, however, that notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the term "System" shall not mean to include facilities of any kind which are declared not to be a part of the System and which are acquired or constructed by or on behalf of the Ci ty wi th the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of the City which are not Bonds Similarly Secured but which are payable from and secured -19- e by other liens on and pledges of any revenues, sources or payments, not pledged to the payment of the Bonds Similarly Secured including, but not limited to, special contract revenues or payments received from any other legal entity in connection with such facilities. SECTION 11: Pledqe. The City hereby covenants and agrees that all of the Net Revenues of the System, with the exception of those in excess of the amounts required to establish and maintain the special Funds created for the payment and security of the Bonds Similarly Secured, are hereby irrevocably pledged, equally and ratably, to the payment of the Bonds and Additional Bonds, if issued, and the interest thereon, as hereinafter provided. It is hereby ordained that the Bonds Similarly Secured, and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the city. e SECTION 12: Water and Sewer System Fund. The City hereby covenants and agrees that the Gross Revenues of the System shall be deposited, as collected and received, into a separate account (previously created, established and to be maintained with a depository bank of the City) known as the Waterworks and Sewer System Fund (herein called the "System Fund") and that the Gross Revenues of the System shall be kept separate and apart from all other funds of the City. All Gross Revenues deposited into the System Fund shall be pledged and appropriated to the extent required for the following uses and in the order of priority shown: FIRST: To the payment of all necessary and reasonable Operating and Maintenance Expenses as defined herein or required by statute to be a first charge on and claim against the Gross Revenues of the System. SECOND: To the payment of the amounts required to be deposited into the Interest and Sinking Fund (hereinafter defined) created and established for the payment of the principal of and interest on each of the Bonds Similarly Secured as the same become due and payable. THIRD: To the payment of the amounts required to be deposited into the Reserve Fund (hereinafter defined) to establish and maintain the Required Reserve in accordance wi th the provisions of this Ordinance or any other ordinance relating to the issuance of Bonds Similarly Secured. Any Net Revenues rema1n1ng in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision e 037490ð -20- e for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. e SECTION 13: Interest and Sinkinq Fund. For purposes of providing funds to pay the principal of and interest on the Bonds Similarly Secured as the same become due and payable, the City agrees to maintain on the books and records of the City, a separate and special account or fund known as the "Waterworks and Sewer System Interest and Sinking Fund" (the "Interest and Sinking Fund") and moneys deposited to the credit of such account shall be kept in a special fund maintained at the depository of the city. The City covenants that there shall be deposited to the credit of the Interest and Sinking Fund prior to each principal and interest payment date from the available Net Revenues an amount equal to one hundred per centum (100%) of the amount required to fully pay the interest on and the principal of the Bonds then falling due and payable, such deposits to pay maturing principal and accrued interest on the Bonds to be made in substantially equal monthly installments on or before the fifteenth day of each month, beginning on or before the fifteenth day of the month next following the delivery of the Bonds to the initial purchaser(s). The required monthly deposits to the Interest and Sinking Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Interest and Sinking Fund and Reserve Fund is equal to the amount required to fully pay and discharge all Outstanding Obligations Bonds Secured (principal and interest) or, (ii) the Bonds are no longer Outstanding. Accrued interest and premium, if any, recei ved from the initial purchaser(s) of the Bonds, shall be taken into consideration and reduce the amount of the monthly deposits hereinabove required to be deposited into the Interest and Sinking Fund from the Net Revenues of the System. Additionally, any proceeds of the Bonds not required to complete the improvements and extensions to be made to the System shall be deposited into the Interest and Sinking Fund and may be taken into consideration and reduce the amount of monthly deposits required to be deposited into the Interest and Sinking Fund from the Net Revenues of the System. SECTION 14: Reserve Fund. For purposes of providing a reserve for the payment of the Bonds Similarly Secured, the City agrees and covenants to maintain a special fund or account known as the "Waterworks and Sewer System Reserve Fund" (the "Reserve Fund"), which Fund shall be kept and maintained at an official depository of City funds. All funds deposited to the credit of the Reserve Fund (excluding earnings and income derived or received from deposits or investments which may be transferred to the System Fund referenced in Section 13 of this Ordinance during such periods e 037490ð -21- e e e as there is on deposit in the Reserve Fund the full amount required to be accumulated and maintained therein) 'shall be used for the payment of (i) the principal of and interest on the Bonds Similarly Secured, when and, to the extent other funds available for such purposes are insufficient, and (ii) the final principal amount of a series of Bonds Similarly Secured provided following such payment (x) such series of Bonds Similarly Secured is no longer deemed to be "outstanding" as such term is defined herein and (y) the balance remaining on deposit to the credit of the Reserve Fund after making such payment is the total amount required to be accumulated and maintained in such Fund for the Bonds Similarly Secured to remain Outstanding. Additionally, in the event one or more surety bonds are used to provide all or part of the amount required to be maintained in the Reserve Fund as hereinafter authorized, amounts deposited to the credit of the Reserve Fund may also be used to restore or replenish the full amount of the surety bond coverage afforded by such surety bond. By reason of the issuance of the Bonds, the total amount required to be accumulated and maintained in the Reserve Fund shall be and is hereby determined to be $ (the "Required Reserve"), which amount equals at least the Average Annual Debt Service for the Bonds. Simultaneously with the delivery of the Bonds, the City shall cause to be deposited to the credit of the Reserve Fund an amount equal to the Required Reserve from funds on deposit in the reserve fund maintained for the payment and security of the Refunded Bonds and Defeased Bonds. As and when Additional Bonds are delivered or incurred, the Required Reserve shall be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt Service (calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding, as determined on the date each series of Additional Bonds are delivered or incurred, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be invested without restriction as to yield pursuant to subsection (d) of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional amount required to be maintained in the Reserve Fund shall be accumulated (i) by depositing cash to the credit of the Reserve Fund (immediately after the delivery of the then proposed Additional Bonds) in an amount to fully fund the Required Reserve, or, (ii) at the option of the City, by making monthly deposits, on or before the 15th day of each month following the month of delivery of the then proposed Additional Bonds, of not less than 1/60th of the additional amount to be maintained in said Fund by reason of the issuance of the Additional Bonds then being issued (or 1/60th of the balance of the additional amount not deposited immediately in cash). In lieu of depositing cash or making monthly deposits to the Reserve Fund to accumulate any increase in the 037 490ð -22- e e e Reserve Fund by reason of the issuance of Additional Bonds andc.xo the extent permitted by law, the City may provide for one or more surety bonds issued by a company or institution having a rating in the highest rating category by two nationally recognized rating agencies or services to be deposited to the credit of Reserve Fund. Such surety bonds shall provide surety bond coverage in an amount sufficient to provide for all or part of the total amount then required to be accumulated and maintained in the Reserve Fund for the benefit of the Bonds Similarly Secured. When and so long as the cash and investments and/or surety bond coverage in the Reserve Fund total not less than the Required Reserve, no deposits need be made to the credit of the Reserve Fundi but, if and when the Reserve Fund at any time contains less than the Required Reserve (other than as the result of the issuance of Additional Bonds as provided in the preceding paragraph and the City has elected to accumulate all or a portion of the Required Reserve with Net Revenues of the System) , the City covenants and agrees to cause monthly deposits to the Reserve Fund to be made on or before the 15th day of each month (beginning the month next following the month the deficiency in the Required Reserve occurred by reason of a draw on the Reserve Fund or as a result of a reduction in the market value of investments held for the account of the Reserve Fund) in an amount equal to 1/60th of the Required Reserve from the Net Revenues of the System until the Required Reserve has been fully restored. Should all or a portion of the Required Reserve be provided by a surety bond and should the City be obligated to repay or reimburse the issuer of the surety bond to replenish and restore the full amount of surety bond coverage, monthly deposits from the Net Revenues shall be made to the Reserve Fund in the amounts required to restore the full amount of the surety bond coverage in accordance with the terms of such surety bond or any agreement executed in connection therewith. The City further covenants and agrees that, subject only to the payments to be made to the Interest and Sinking Fund, the Net 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 Ordinance and any other ordinance pertaining to the issuance of Additional Bonds. SECTION 15: Deficiencies: Excess Net Revenues. (a) If on any occasion there shall not be sufficient Net Revenues of the System to make the required deposits into the Interest and Sinking Fund and the Reserve Fund, then such deficiency shall be cured as soon as possible from the next available Net Revenues of the System, or from any other sources available for such purpose. (b) Subject to making the required deposits to the Interest and Sinking Fund and the Reserve Fund when and as required by this Ordinance, or any ordinance authorizing the issuance of Additional 0374906 -23- e Bonds, the excess Net Revenues may be used by the City for any lawful purpose. e SECTION 16: Investments Security of Funds. (a) Money deposited to the credit of any Fund referenced in this Ordinance may, at the option of the City, be placed in time deposits or certificates of deposit secured (to the extent not insured by the Federal Deposit Insurance corporation) by obligations of the type hereinafter described, or be invested, including investments held in book-entry form, in direct obligations of the United States of America and obligations guaranteed or insured by the United states of America, which, in the opinion of the Attorney General of the united states, are backed by its full faith and credit or represent its general obligations; 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. Such investments (except state and Local Government Series investments held in book entry form, which shall at all times be valued at cost) 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 30 days of the date of passage of each ordinance authorizing the issuance of Additional Bonds. All interest and income derived from deposits and investments in the Interest and Sinking Fund immediately shall be credited to, and any losses debited to, the Interest and Sinking Fund. All interest and interest income derived from deposits in and investments of the Reserve Fund shall, subject to the limitations provided in section 14 hereof, be credited to and deposited in the System Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds. (b) That money deposited to the credit of any of the Funds referenced in this Ordinance, to the extent not invested, shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds. SECTION 17: Payment of Bonds. While any of the Bonds are Outstanding, the City's Director of Finance (or other designated financial officer of the City) shall cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Interest and Sinking 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 or comes due by reason of redemption prior to maturity; 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. e 037 490ð -24- e SECTION 18: Issuance of Additional Bonds. Subject to the provisions hereinafter appearing as to conditions precedent which must be satisfied, the City reserves the right to issue, from time to time as needed, Additional Bonds for any lawful purpose. Such Additional Bonds may be issued in such form and manner as now or hereafter authorized by the laws of the State of Texas for the issuance of evidences of indebtedness or other instruments, and should new methods or financing techniques be developed that differ from those now available and in normal use, the City reserves the right to employ the same in its financing arrangements provided only that the following conditions precedent for the authorization and issuance of the same are satisfied, to wit: e (a) The Director of Finance of the City (or other officer of the City then having the primary responsibility for the financial affairs of the City) shall have executed a certificate stating (a) that, to the best of his knowledge and belief, the City is not then in default as to any covenant, obligation or agreement contained in any ordinance or other proceeding relating to any obligations of the City payable from and secured by a lien on and pledge of the Net Revenues of the System that would materially affect the security or payment of such obligations and (b) either (i) payments into all special funds or accounts created and established for the payment and security of all outstanding obligations payable from and secured by a lien on and pledge of the Net Revenues of the System have been made and that the amounts on deposit in such special funds or accounts are the amounts then required to be on deposit therein or (ii) the application of the proceeds of sale of such obligations then being issued will cure any such deficiency. (b) The Additional Bonds shall be scheduled to mature or be payable as to principal on March 1 or September 1 (or both) in each year the same are to be outstanding or during the term thereof. (c) The City has secured a certificate or op~n~on of an independent certified Public Accountant to the effect that, according to the books and records of the City, the Net Earnings, for the preceding Fiscal Year or for 12 consecutive months out of the 15 months immediately preceding the month the ordinance authorizing the issuance of the Additional Bonds is adopted, are at least equal to 1.25 times the Average Annual Debt Service for all Bonds Similarly Secured then Outstanding after giving effect to the issuance of the Additional Bonds then being issued. In making a e 0374906 -25- e determination of the Net Earnings, the Accountant may take into consideration a change in the rates and charges for services and facilities afforded by the System that became effective at least sixty (60) days prior to the last day of the period for which Net Earnings are determined and, for purposes of satisfying the above Net Earnings test, make a pro forma determination of the Net Earnings of the System for the period of time covered by his certif ication or opinion based on such change in rates and charges being in effect for the entire period covered by the Accountant's certificate or opinion. e As used in this Section, the term "Net Earnings" shall mean the Gross Revenues of the System after deducting the Operating and Maintenance Expenses of the System, but not depreciation charges or expenditures which, under generally accepted accounting principles, should be charged to capital expenditures. SECTION 19: Refundinq Bonds. The City reserves the right to issue refunding bonds to refund all or any part of the Bonds Similarly Secured (pursuant to any law then available) upon such terms and conditions as the City Council of the City may deem to be in the best interest of the City and its inhabitants, and if less than all such Bonds Similarly Secured then outstanding are refunded, the conditions precedent prescribed (for the issuance of Additional Bonds) set forth in Section 18(c) of this Section shall be satisfied and the Accountant's certificate or opinion required in section 18 (c) shall give effect to the Debt Service of the proposed refunding bonds (and shall not give effect to the Debt Service of the Bonds Similarly Secured being refunded following their cancellation or provision being made for their payment). SECTION 20: Obliqations of Inferior Lien and Pledqe. The City hereby reserves the right to issue obligations payable from and secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Bonds Similarly Secured (including amounts to be repaid following a draw on a surety bond held for the Reserve Fund), as may be authorized by the laws of the State of Texas. SECTION 21: Rates and Charges. For the benef it of the Holders of the Bonds and in addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance, the City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to establish and maintain rates and charges for facilities and services afforded by the System that are reasonably expected, on the basis of available information and experience and with due allowance for contingencies, to produce Gross Revenues in each Fiscal Year sufficient: e 037 490ð -26- e (a) To pay Operating and Maintenance Expenses, depreciation charges and replacement and betterment costs, and ...:.v (b) To produce Net Revenues sufficient to pay the principal of and interest on the Bonds Similarly Secured and the amounts required to be deposited in any reserve or contingency fund created for the payment and security of the Bonds Similarly Secured, and any other obligations or evidences of indebtedness issued or incurred that are payable only from and secured solely by a lien on and pledge of the Net Revenues of the System. (c) To produce Net Revenues equal to at least 1.20 times the annual Debt Service for the then Outstanding Bonds Similarly Secured. (d) Any other legally incurred indebtedness payable from the revenues of the System and/or secured by a lien on the System. e SECTION 22: Maintenance of System - Insurance. The City shall maintain the System in good condition and operate the System in an efficient manner and at reasonable cost. While any Bonds are outstanding, the City agrees to maintain casualty and other insurance on the System of a kind and in an amount customarily carried by municipal corporations owning and operating similar properties. Nothing in this Ordinance shall be construed as requiring the City to expend any funds derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so. SECTION 23: Sale or Lease of Properties. The City, to the extent and in the manner authorized by law, may sell or exchange for consideration representing the fair value thereof, as determined by the City Council of the City, any property not necessary or required in the efficient operations of the System, or any equipment not necessary or useful in the operations thereof or which is obsolete, damaged or worn out or otherwise unsuitable for use in the operation of the system. The proceeds of any sale of properties of the System shall be deposited in the System Fund. SECTION 24: Records and Accounts. The City hereby covenants and agrees that so long as any of the Bonds are Outstanding, it will keep and maintain separate and complete records and accounts pertaining to the operations of the System in which complete and correct entries shall be made of all transactions relating thereto, as provided by Article 1113, V.A.T.C.S. or other applicable law. The Holders of any Bonds or any duly authorized agent or agents of such Holders shall have the right at all - 0374906 -27- e e e reasonable times to inspect such records, accounts and data relating thereto, and to inspect the System and all properties comprising same. The City further agrees that following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants. Each such audit, in addition to whatever other matters may be thought proper by the accountant, shall particularly include the following: (1) A statement of the income and expenses of the System for such Fiscal Year. (2) A balance sheet for the System as of the end of such Fiscal Year. (3) A statement describing the sources and application of funds of the System for such Fiscal Year. (4) The Accountant's comments regarding the manner in which the City has carried out the requirements of this Ordinance and any other ordinance authorizing the issuance of Additional Bonds and his recommendations for any changes or improvements in the operations, records and accounts of the System. Expenses incurred in making an annual audit of the operations of the System are to be regarded as Operating and Maintenance Expenses. Copies of each annual audit shall be furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and, upon request, to the initial purchasers of the Bonds and subsequent 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. SECTION 25: Special Covenants. The City further covenants and agrees by and through this Ordinance as follows: (1) It has the lawful power to pledge the Net Revenues of the System to the payment of the Bonds to the extent provided herein and has lawfully exercised said power under the Constitution and laws of the State of Texas, and that the Bonds issued hereunder, together with the Additional Bonds, shall be ratably secured in such manner that no one bond shall have preference over any other bond of said issues. (2) The Net Revenues of the System have not been in any manner pledged or encumbered to the payment of any debt or obligation of the City or the System, save and except for the Bonds. 0374903 -28- e e e (3) No free services of the System shall be allowed, and should the City or any of its agents or instrumentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. (4) To the extent that it legally may and so long as any of the Bonds are Outstanding, no franchise shall be granted for the installation or operation of any waterworks or sewer system other than those owned by the ci ty , and the operation of any such system by anyone other than this City is hereby prohibited. (5) The City will comply with all of the terms and conditions of any and all franchises, permits and authorizations applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City has or will obtain and keep in full force and effect all franchises, permits, authorizations and other requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation and maintenance of the System. SECTION 26: Remedv in Event of Default. In addition to all rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in payments to be made to the Interest and Sinking Fund or the Reserve Fund as required by this Ordinance or (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the City and its officers to observe-and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedy herein provided shall be cumulative of all other existing remedies and the specification of such remedy shall not be deemed to be exclusive. SECTION 27: Special Obliqations. The Bonds are special obligations of the City payable from the pledged Net Revenues of the System and the Holders thereof shall never have the right to 0374903 -29- e e e demand payment thereof out of funds raised or to be raised by taxation. SECTION 28: Satisfaction of Obliqation of City. If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the Net Revenues of the System under this Ordinance and all other obligations of the City to the Holders shall thereupon cease, terminate, and become void and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Obligations shall have been irrevocably deposited in trust with the Paying Agent/ Registrar, or an authorized escrow agent, which Government Obligations have been certif ied by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Obligations will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of 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 City, be remitted to the City 0374906 -30- e against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the state of Texas. e SECTION 29: Ordinance a Contract - Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent from the owners holding a majority in aggregate principal amount of the Bonds Similarly Secured then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the written consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal 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 Bonds Similarly Secured, as the case may be, required to be held for consent to any such amendment, addition, or rescission. SECTION 30: Mutilated - Destroved - Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a e 03749011 -31- e replacement of the prior obligation of the City, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Bonds. SECTION 31: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sUfficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder as it appears in the Security Register. e In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the city. SECTION 33: Covenants to Maintain Tax-ExemDt Status. (a) Definitions. When used in this Section, the following terms shall have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. e 0374900 -32- e e e "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. "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 0374903 -33- e 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 Pavrnents. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last stated Maturity of Bonds: e (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Bonds), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the united states or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Bonds), 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 e 0374906 -34- e arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Hiqher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the 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. e (g) Information ReDort. The City shall timely file the information required by section 149 (e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds ( including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript e 037490:) -35- e of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. e (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the united states out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e) (2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148 (f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148 (f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United states of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitraqe Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. e 0374906 -36- e (j) Elections. The City hereby directs and authorizes ~pe City Manager, Director of Finance and City Secretary, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (k) Bonds Not Hedge Bonds. At the time the original bonds refunded by the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and 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. e (l) Not An Advance Refunding. The Bonds are issued to refund the Refunded Bonds and the Refunded Bonds are to be paid and redeemed in full on March 1, 1997, which date is within 90 days of the Closing Date of the Bonds. SECTION 34: Sale of Bonds. Pursuant to a public sale for the Bonds, the bid submitted by (herein referred to as the "Purchasers") is declared to be the best bid received producing the lowest true interest cost rate to the City, and the sale of the Bonds to said Purchasers at the price of % of par and accrued interest to the date of delivery is hereby approved and confirmed. Delivery of the Bonds to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the terms of sale. SECTION 35: Off icial Statement. The Official Statement, together with all amendments and supplements thereto issued on behalf of the City, prepared in the initial offering and sale of the Bonds by the City is hereby approved as to form and content, and the City Council hereby finds that the information and data contained in said Official Statement pertaining to the City and its financial affairs is true and correct in all material respects and no material facts have been omitted therefrom which are necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The use of such Official Statement in the reoffering of the Bonds by the Purchasers is hereby approved and authorized. SECTION 36: SDecial Escrow Aareement ADDroval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and Bank One, Texas, N .A., Fort Worth, Texas (the "Escrow Agent"), attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content, and such Agreement in e 0374900 -37- e e - substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of the City and as the act and deed of this City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 1996 CITY OF NORTH RICHLAND HILLS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in Article 717k, V.A.T.C.S., as amended, this Ordinance and the Agreement. SECTION 37: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bonds pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, Mayor Pro Tern, City Secretary, City Manager, Assistant City Manager and Director of Finance, anyone or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Purchasers, and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 38: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale thereof (less certain costs of issuance and accrued interest received from the Purchasers of the Bonds) shall be deposited with the Escrow Agent for application and disbursement in accordance with the provisions of the Agreement. The proceeds of sale of the Bonds not so deposited with the Escrow Agent for the refunding of the Refunded Bonds shall be disbursed for payment of costs of issuance and deposited in the 037490ð -38- e Interest and Sinking Fund, all in accordance with written instructions to the Escrow Agent. e SECTION 39: Leaal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion or an executed counterpart thereof is hereby authorized to be either printed on definitive printed obligations or deposited with DTC along with the global certificates for the implementation and use of the Book Entry Only System used in the settlement and transfer of the Bonds. SECTION 40: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 41: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benef it of the City, the Paying Agent/Registrar and the Holders. SECTION 42: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent wi th any provision of this Ordinance are hereby repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 43: Governina Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the united States of America. e 0374906 -39- e SECTION 44: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and this governing body hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 45: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 46: Incorporation of Findinqs and Determinations. The findings and determinations of the City Council contained in the preamble hereof are hereby incorporated by reference and made a part of this Ordinance for all purposes as if the same were restated in full in this Section. SECTION 47: continuinq Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. e "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" authorized determined depository means any person designated by the State of Texas or an department, officer, or agency thereof as, and by the SEC or its staff to be, a state information within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1996) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by section 35 of this Ordinance, being the information described in Exhibit C hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the City e 0374906 -40- e e e commissions an audit of such statements and the audit is comple.tJ.;~d within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this section. The financial information and operating data to be provided pursuant to this section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax- exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 0374900 -41- e 8. Bond calls¡ 9. Defeasances¡ 10. Release, substitution, or sale of property securing repayment of the Bonds¡ and 11. Rating changes. The city shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." e The provisions of this section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. e 0370490:) -42- e e e No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the city (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this section may also be amended from time to time or repealed by the city if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 48: Public Meetinq. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. 0374903 -43- e e e SECTION 49: Effective Date. This Ordinance shall be in full force and effect from and after its passage on the date shown below and it is so ordained. PASSED AND ADOPTED, this December 16, 1996. CITY OF NORTH RICHLAND HILLS, TEXAS Mayor ATTEST: City Secretary APPROVED AS TO LEGALITY: (City Seal) City Attorney 0374900 -44- e ...~ PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of December 16, 1996 (this "Agreement"), by and between the City of North Richland Hills, Texas (the "Issuer"), and Bank One Texas, N.A., Fort Worth, Texas, a national association duly organized and existing under the laws of the united States of America, (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996" (the "Securities") in the aggregate principal amount of $5,135,000, which Securities are scheduled to be delivered to the initial purchasers on or about January 22, 1997; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and e WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1. 01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". e The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to 03S3891 e pay the Bank the fees and amounts set forth in Annex A attached hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: e "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the offices of the Bank located in Westerville, Ohio at the address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order, or ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, ending September 30th. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order" means a written request or order signed in the name of the Issuer by the Mayor, ci ty Manager, Assistant City Manager/Director of Finance, or City Secretary, anyone or more of said officials, and delivered to the Bank. e "Legal Holiday" means a day on which the Bank is required or authorized to be closed. 0383891 -2- e e e 0383891 "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution) . "Record Date" means the Record Date as defined in the Bond Resolution. "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Securities" means the securities defined in the recital paragraphs herein. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. -3- e e e section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT section 3.01. Duties of pavinq Aqent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following offices: Bank One, Texas, N.A. Attention: Securities Transfer 235 West Schrock Road Westerville, Ohio 43081-0393 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date (as defined in the Resolution). All payments of principal and/or interest on the Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in section 5.05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01. Security Reqister - Transfers and Exchanqes. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register") for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by 0383891 -4- e e e the Issuer and subj ect to such reasonable regulations as th~ Issuer and Bank may prescribe. The Bank represents and warrants its office in Fort Worth, Texas will at all times have immediate access to the Security Register by electronic or other means and will be capable at all times of producing a hard copy of the Security Register at its Fort Worth office for use by the Issuer. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or eAchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of Security Reqister. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. 0383891 -5- e The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. e Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of 1934, all Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. section 4.06. Mutilated. Destroved. Lost or Stolen Securi- ties. The Issuer hereby instructs the Bank, subj ect to the provisions of Section 30 of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. e In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. 0383891 -6- e e e section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE FIVE THE BANK section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. section 5.02. Reliance on Documents. Etc. may conclusively rely, as to the truth of the correctness of the opinions expressed therein, on opinions furnished to the Bank. (a) The Bank statements and certificates or (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No prov1s1ons of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counselor any opinion of counsel shall be full and complete authorization and protection with respect to any action 03&3891 -7- e e - taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. section 5.05. Moneys Held by Bank - Fiduciary Accountl Collateralization. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the united States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for four years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without 0383891 -8- e e e , , negligence or bad faith on its part, arising out of or ,in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where either the Bank Office or the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to determine the rights of any Person claiming any interest herein. Section 5.08. DTC Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", effective December 12, 1994, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assiqnment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on page 11. Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. 0383891 -9- e e e , . section 6.05. Successors and Assiqns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. section 6.06. Severability. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of Aqreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire Aqreement. This Agreement and the Bond Resolution constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. The resigning paying Agent/Registrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60) days after the giving of such notice of resignation. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. 0383891 -10- The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the 4IÞ termination of this Agreement. section 6.11. Governinq Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BANK ONE, TEXAS, N.A., Fort Worth, Texas BY Title: [SEAL] Attest: Title: Address: 500 Throckmorton suite 704-West Complex Fort Worth, Texas 76102 CITY OF NORTH RICHLAND HILLS, TEXAS e BY Mayor (CITY SEAL) Attest: Address: 7301 N.E. Loop 820 North Richland Hills, Texas 76182 City Secretary - 0383891 -11- e SPECIAL ESCROW AGREEMENT THE STATE OF TEXAS COUNTY OF TARRANT § § § THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of December 16, 1996 by and between the City of North Richland Hills, Texas, a duly incorporated municipal corporation in Tarrant County, Texas (the "City") acting by and through the Mayor and City Secretary, and Bank One, Texas, N.A., Fort Worth, Texas, a national banking association organized and existing under the laws of the United States of America, or its successors or assigns hereunder (the "Bank"), WIT N E SSE T H : WHEREAS, the City has duly issued certain obligations now outstanding in the aggregate original principal amount of $11,853,614.60 and in the aggregate principal and maturity amount of $17,285,000, and more particularly described as follows: e (1) City of North Richland Hills, Texas, Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989, dated March 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $3,995,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $4,070,000 and scheduled to mature on September 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of $8,065,000 (2) City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A, dated March 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $1,740,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $1,730,000 and scheduled to mature on september 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of $3,470,000 e 03&407:1 e e e (3) City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B, dated July 1, 1989, consisting of (i) current interest bonds in the aggregate principal amount of $2,730,000 and scheduled to mature on September 1 in each of the years 1997 through 2001 and (ii) capital appreciation bonds in the aggregate maturity amount of $3,020,000 and scheduled to mature on September 1 in each of the years 2002 through 2008, and totalling in principal amount and maturity amount of ~ $5,750,000 and all the current interest bonds described above, together with $355,000 in maturity amount of the capital appreciation bonds of the Series 1989-B Bonds scheduled to mature on September 1, 2002, totalling in principal and/or maturity amount of $8,820,000, are hereinafter collectively referred to as the "Defeased Bonds" and all of the capital appreciation bonds described above (except for the $355,000 in maturity amount of the capital appreciation bonds of the Series 1989-B Bonds scheduled to mature on September 1, 2002), totalling in maturity amount of $8,465,000, are hereinafter collectively referred to as the "Refunded Bonds"; and AND WHEREAS, in accordance with the provisions of Article 7l7k, V.A.T.C.S., as amended (the "Act"), the City is authorized to sell refunding bonds in an amount sufficient to provide for the payment of obligations to be refunded and defeased, deposit the proceeds of such refunding bonds with any place of payment for the obligations being refunded and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disbursement of such deposit, upon such terms and conditions as the parties may agree, provided such deposits may be invested only in direct obligations of the United States of America, including obligations the principal of and interest on are unconditionally guaranteed by the united States of America, (hereinafter called the "Federal Securities") that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of Defeased Bonds and the Refunded Bonds (sometimes hereinafter collectively referred to as the "Defeased Obligations"); and WHEREAS, the Refunded Bonds and the Defeased Bonds are scheduled to mature, or be called for redemption, and interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and 03&-407:1 -2- e WHEREAS, the City on the 16th day of December, 1996, pursuant to an ordinance (the "Bond Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds known as "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996" (the "Bonds"), and such Bonds are being issued to refund, discharge and make final payment of the principal of and interest on the Refunded Bonds; and WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other available funds of the City, are to be deposited with the Bank and used in part to purchase the Federal Securities listed and identified in Exhibit B attached hereto and incorporated by reference as a part of this Agreement for all purposes; and WHEREAS, the Federal Securities shall be held and deposited to the credit of the "Escrow Fund" and the respective accounts to be established and maintained by the Bank in accordance with this Agreement; and e WHEREAS, the Federal Securities, together with the beginning cash balance in the Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the existence of monies sufficient to pay the principal of the Refunded Bonds and the Defeased Bonds and the accrued interest thereon, as the same shall become due in accordance with the terms of the ordinances authorizing the issuance thereof and as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements for the purchase of the Federal Securities listed in Exhibit B and the deposit and credit of the Escrow Fund as provided herein; and WHEREAS, the Bank is a national banking association organized and existing under the laws of the United States of America, possessing trust powers and is fully qualified and empowered to enter into this Agreement; and WHEREAS, in Section 36 of the Bond Ordinance, the City Council duly approved and authorized the execution of this Agreement; and WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action necessary to call, pay, redeem and retire said Refunded Bonds and the Defeased Bonds in accordance with the provisions thereof, including, without limitation, all actions required by the ordinances authorizing the Defeased Obligations, the Act, the Bond Ordinance and this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to secure the payment of the principal of and e 033407~ -3- e the interest on the Defeased Obligations as the same shall become due, the City and the Bank hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the ordinances authorizing the issuance of the Defeased Obligations and the Bond Ordinance are hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of said documents shall be deemed an incorporation of such provision as a part hereof in the same manner and with the same effect as if it were fully set forth herein. SECTION 2: Escrow Fund creation/Funding. There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL 1996 CITY OF NORTH RICHLAND HILLS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow Fund") for the benefit of the holders of the Defeased Obligations, and within such Fund there shall be created, established and maintained two separate and distinct accounts for the payment of the Defeased obligations. Account Number 1 of the Escrow Fund shall be established and maintained solely for the payment of the Refunded Bonds and immediately following the delivery of the Bonds, the city agrees and covenants to cause to be deposited with the Bank from the proceeds of sale of the Bonds, the following: e $ for the purchase of Federal Securities identified in Exhibit B to be held for the Account Number 1 of the Escrow Fund $ for deposit in the Account Number 1 Escrow Fund as a beginning cash balance. Account Number 2 of the Escrow Fund shall be established and maintained solely for the payment of the Defeased Bonds and simultaneously with the delivery of the Bonds, the City agrees and covenants to cause to be deposi ted wi th the Bank from other available funds the following: $ for the purchase of Federal Securities identified in Exhibit B to be held for the Account Number 2 of the Escrow Fund $ for deposit in the Account Number 2 Escrow Fund as a beginning cash balance. The Bank hereby accepts the Escrow Fund and the respective accounts to be maintained and further agrees to receive said moneys, apply the same as set forth herein, and to hold the cash and Federal Securities deposited and credited to the Escrow Fund e 031-407~ -4- e e e . . for application and disbursement for the purposes and in the manner provided in this Agreement. SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the cash and Federal Securities, together with the interest to be earned thereon, deposited to the credit of the respective accounts of the Escrow Fund will be sufficient to pay the principal of and premium and interest on the Refunded Bonds and the Defeased Bonds as the same shall become due and payable, and such Defeased Bonds and Refunded Bonds, and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. FURTHERMORE, the Bank acknowledges receipt of a copy of the resolution providing for the redemption of (i) the capital appreciation bonds of each series of Defeased Obligations on March 1, 1997 at the redemption price equivalent to 104.5% of the accreted value of such bonds as of such redemption date and (ii) the current interest bonds of each series of Defeased Obligations maturing on and after September 1, 2000 on September 1, 1999 at the redemption price of par plus accrued interest thereon; all in accordance with the provisions of the respective notice requirements applicable to said Defeased Obligations and the notice requirements contained in the ordinances authorizing such Defeased Obligations. The Bank agrees to cause a notice of redemption pertaining to the Defeased Obligations to be sent to the registered owners thereof appearing on the registration books at least thirty (30) days prior to the respective redemption dates therefor. The Defeased obligations to be redeemed prior to maturity and the Accounts to be used to accomplish their redemption are further identified as follows: (a) From Account No.1, the redemption on March 1, 1997 at the redemption price equivalent to 104.5% of the accreted value of the capital appreciation bonds as of the redemption date of the (i) Series 1989 Bonds, dated March 1, 1989, maturing on September 1 in each of the years 2002 through 2008, in the aggregate maturity amount of $4,070,000, (ii) Series 1989-A Bonds, dated March 1, 1989, maturing on September 1 in each of the years 2002 through 2008, in the aggregate maturity amount of $1,730,000, and (iii) Series 1989-B Bonds, dated July 1, 1989, maturing on September 1 in each of the years 2003 through 2008 and $310,000 in maturity amount of the capital appreciation bonds maturing on September 1, 2002, in the aggregate maturity amount of $2,665,000; 038407:1 -5- e (b) From Account No.2, the redemption on March 1, 1997 at the redemption price equivalent to 104.5% of the accreted value of the capital appreciation bonds as of the redemption date of the Series 1989-B Bonds, dated July 1, 1989, maturing on September 1, 2002 in the aggregate maturity amount of $355,000; ~ (c) From Account No.2, the payment on September 1, 1997 through September 1, 1999, of (i) the Series 1989 Bonds, dated March 1, 1989, maturing on such dates in the aggregate principal amount of $2,225,000, (ii) the Series 1989-A Bonds, dated March 1, 1989, maturing on such dates in the aggregate principal amount of $970,000, (iii) the Series 1989-B Bonds, dated July 1, 1989, maturing on such dates in the aggregate principal amount of $1,530,000; and e (d) From Account No.2, the redemption on September 1, 1999, at the redemption price of par plus accrued interest to the date of redemption of (i) the Series 1989 Bonds, dated March 1, 1989, maturing on September 1, 2000 and 2001, in the aggregate principal amount of $1,770,000, (ii) the Series 1989-A Bonds, dated March 1, 1989, maturing on September 1 in each of the years 2001 and 2002, and aggregating in the principal amount of $770,000, (iii) the Series 1989-B Bonds, dated July 1, 1989, maturing on September 1 in each of the years 2000 and 2001, in the aggregate principal amount of $1,200,000; and SECTION 4: Pledqe of Escrow. The Bank agrees that all cash and Federal Securities, together with any income or interest earned thereon, held in the Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the Defeased Obligations which will mature and become due on and after the date of this Agreement, and such funds initially deposited and to be received from maturing principal and interest on the Federal Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this Agreement. SECTION 5: Escrow Insufficiencv - city Warranty to Cure. If, for any reason, the funds on hand in either Account of the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely deposits to the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be immediately given by the Bank to the City by the fastest means possible, but the Bank shall in no manner be responsible for the City's failure to make such deposits. e 038407:1 -6- e e e SECTION 6 : Escrow Fund Securities / Seqreqation. The Bank shall hold said Federal Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the Defeased Obligations, wholly segregated from other moneys and securities on deposit with the Bank; shall never commingle said Federal Securities and moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Federal Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as trustee; and a special account evidencing such facts shall at all times be maintained on the books of the Bank. SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time collect and receive the principal of and interest on the Federal Securities as they respectively mature and become due and credit the same to the Escrow Fund. On or before each principal and/or interest payment date or redemption date, as the case may be, for the Defeased Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including the City, shall cause to be withdrawn from the appropriate Account of the Escrow Fund the amount required to pay the accrued interest on the Defeased Obligations due and payable on said payment date and the principal of the Defeased Obligations due and payable on said payment date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and deposited with the paying agent for the Defeased Obligations to be paid with such amount. The paying agent for the Defeased Obligations is the Bank. If any Defeased Obligation thereon shall not be presented for payment when the principal thereof or interest thereon shall have become due, and if cash shall at such times be held by the Bank in trust for that purpose sufficient and available to pay the principal of such Defeased Obligation and interest thereon it shall be the duty of the Bank to hold said cash without liability to the holder of such Defeased Obligation for interest thereon after such maturity or redemption date, in trust for the benefit of the holder of such Defeased Obligation, who shall thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on or with respect to said Defeased Obligation, including for any claim for the payment thereof and interest thereon. All cash required by the provisions hereof to be set aside or held in trust for the payment of the Defeased Obligations, including interest thereon, shall be applied to and used solely for the payment of the Defeased Obligations and interest thereon with respect to which such cash has been so set aside in trust. 03M073 -7- e e e Subject to the provisions of the last sentence of section 25 hereof, cash held by the Bank in trust for the payment and discharge of any of the Defeased Obligations and interest thereon which remains unclaimed for a period of four (4) years after the stated maturity date or redemption date of such Defeased Obligations shall be returned to the city. Notwithstanding the above and foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable unclaimed property laws of the state of Texas. SECTION 8: Disposal of Defeased Obliqations. All Defeased Obligations cancelled on account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and an appropriate certificate of destruction furnished the city. SECTION 9: Escrow Fund Encumbrance. The escrows created hereby shall be irrevocable. The persons entitled to payment with respect to the Refunded Bonds shall have an express lien on all moneys and Federal Securities deposited to the credit of Account Number 1 of the Escrow Fund until paid out, used and applicable in accordance with this Agreement and the persons entitled to payment with respect to the Defeased Bonds shall have an express lien on all moneys and Federal Securities deposited to the credit of Account Number 2 of the Escrow Fund until paid out, used and applicable in accordance with this Agreement. Unless disbursed in payment of the Defeased Obligations, all funds and the Federal Securities received by the Bank for the account of the City hereunder shall be and remain the property of the Escrow Fund and the city and the owners of the Refunded Bonds in regard to Account Number 1 of the Escrow Fund and the owners of the Defeased Bonds in regard to Account Number 2 of the Escrow Fund shall be entitled to a preferred claim and shall have a first lien upon such funds and Federal Securities enjoyed by a trust benef ic iary . The funds and Federal Securities received by the Bank under this Agreement shall not be considered as a banking deposit by the City and the Bank and the city shall have no right or title with respect thereto, except as otherwise provided herein. Such funds and Federal Securities shall not be subject to checks or drafts drawn by the city. SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien whatsoever upon any of the moneys or Federal Securities in the Escrow Fund for payment of services rendered hereunder, services rendered as paying agent/registrar for the Defeased obligations, or for any costs or expenses incurred ,hereunder and reimbursable from the City. SECTION 11: Substitution of Investments/Reinvestments. (a) The Bank shall be authorized to accept initially and temporarily 03S4075 -8- e cash and/or substituted Federal Securities pending the delivery of the Federal Securities identified in the Exhibit B attached hereto, or shall be authorized to redeem the Federal Securities and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in noncallable direct obligations of the United States of America provided such early redemption and reinvestment of proceeds does not change the repayment schedule of the Defeased obligations appearing in Exhibit A and the Bank receives the following: e (1) an opinion by an independent certified public accountant to the effect that (i) the initial and/or temporary substitution of cash and/or securities for one or more of the Federal Securities identified in Exhibit B pending the receipt and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the Federal Securities and the reinvestment of such funds in one or more substituted securities (which shall be noncallable direct obligations of the United states of America), together with the interest thereon and other available moneys then held in the Escrow Fund, will, in either case, be sufficient, without reinvestment, to pay, as the same become due in accordance with Exhibit A, the principal of, and interest on, the Defeased obligations which have not previously been paid, and (2) with respect to an early redemption of Federal Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause interest on the Bonds or Defeased Obligations to be included in the gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such investment, or otherwise make the interest on the Bonds or the Defeased obligations subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the state of Texas and with all relevant documents relating to the issuance of the Defeased Obligations and the Bonds. (b) If on the date and in the amount shown in Exhibit C attached hereto there exists cash in the Escrow Fund, the Bank and the City agree at least fifteen (15) days prior to such date, to subscribe for the purchase of united states Treasury Securities - state and Local Government Series (SLGS) bearing zero interest (0%) and on such date, in the amount and scheduled to mature as provided in Exhibit C and subscription forms prepared therefor as may be then required by the United States Department of the Treasury; e 0334076 -9- e provided that the then existing rules and regulations and policy~f United states Department of the Treasury permit and authorize such investments. Should the policy, rules and regulations of the United states Department of Treasury not permit or authorize the purchase of such SLGS at such time or times, such cash balance or balances shall remain uninvested and held in trust for the benefit of the holders of the Defeased Bonds and used for the payment of the Defeased Bonds on the dates and in the amount such moneys would have been expended had such SLGS been acquired and matured. SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as provided in section 11 hereof, moneys in the Escrow Fund will be invested only in the Federal Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow Fund except as specifically provided by this Agreement. SECTION 13: Excess Funds. If at any time through redemption or cancellation of the Defeased Obligations there exists or will exist excesses of interest on or maturing principal of the Federal Securities in excess of the amounts necessary hereunder for the Defeased Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Bank the following: e (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the Escrow Fund, together with the interest thereon, and other available monies then held in the Escrow Fund, will be sufficient to pay, as the same become due and without reinvestment, in accordance with Exhibit A, the principal of, and interest on, the Defeased Obligations which have not previously been paid, and (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such transfer will not cause interest on the Bonds or the Defeased Obligations to be included in gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such transfer, or otherwise make the interest on the Bonds or the Defeased Obligations subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Defeased Obligations or the Bonds. SECTION 14: Collateralization. The Bank shall continuously secure the monies in the Escrow Fund not invested in Federal e 033407~ -10- e Securities by a pledge of direct obligations of the united States of America, in the par or face amount at least equal to the principal amount of said uninvested monies to the extent such money is not insured by the Federal Deposit Insurance Corporation. SECTION 15: Absence of Bank's Liabilitv for Investments. The Bank shall not be liable or responsible for any loss resulting from any investment made in the Federal Securities or substitute securities as provided in section 11 hereof. SECTION 16: Bank's Compensation - Escrow Administration/ Settlement of Paving Aqent's Charges. The City agrees to pay the Bank for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $ and, except for reimbursement of costs and expenses incurred by the Bank pursuant to sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete payment for the administration of this Agreement. e The City also agrees to deposit with the Bank on the effective date of this Agreement, the sum of $ and the Bank acknowledges and agrees that the above amount is and represents the total amount of compensation due the Bank for services rendered as paying agent for the Defeased Obligations. The Bank hereby agrees to pay, assume and be fully responsible for any additional charges that it may incur in the performance of its duties and responsibilities as paying agent for the Defeased Obligations. The City acknowledges and agrees that the above amount deposited with the Escrow Agent to cover paying agents' charges and expenses does not include amounts which shall become due and payable for services rendered as registrar and transfer agent for fully registered Defeased Obligations, and the City agrees to pay directly to each "registrar" for the Defeased Obligations all reasonable costs, expenses and charges incurred in connection with the maintenance of the registration books and records and the transfer of such fully registered obligations as and when such costs, expenses and charges are incurred and against written invoices, statements or bills submitted therefor. SECTION 17: Escrow Aqent's Duties / Responsibilities/ Liability. The Bank shall not be responsible for any recital herein, except with respect to its organization and its powers and authority. As to the existence or nonexistence of any fact relating to the City or as to the sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall be entitled to rely upon a certificate signed on behalf of the City by its City Manager or Mayor and/or City Secretary of the City as sufficient evidence of the facts therein contained. The e 03&40711 -11- e e e Bank may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution or other instrument in the form therein set forth has been adopted by the City Council of the City, as conclusive evidence that such resolution or other instrument has been duly adopted and is in full force and effect. The duties and obligations of the Bank shall be determined solely by the express provisions of this Agreement and the Bank shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Bank. In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement; but notwithstanding any provision of this Agreement to the contrary, in the case of any such certificate or opinion or any evidence which by any provision hereof is specifically required to be furnished to the Bank, the Bank shall be under a duty to examine the same to determine whether it conforms to the requirements of this Agreement. The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent in ascertaining or acting upon the pertinent facts. The Bank shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of all said Defeased Obligations at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bank not in conflict with the intent and purpose of this Agreement. For the purposes of determining whether the holders of the required principal amount of said Defeased Obligations have concurred in any such direction, Defeased Obligations owned by any obligor upon the Defeased Obligations, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such obligor, shall be disregarded, except that for the purposes of determining whether the Bank shall be protected in relying on any such direction only Defeased Obligations which the Bank knows are so owned shall be so disregarded. The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and include the Chairman of the Board of Directors, the President, any Vice President and any Second Vice President, the Secretary and any Assistant secretary, the 031407:) -12- e Treasurer and any Assistant Treasurer, and every other officer and assistant officer of the Bank customarily performing functions similar to those performed by the persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred, because of his knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in this Agreement, shall mean and include any of said officers or persons. e SECTION 18: Limitation Re: Bank's Duties/Responsibilities/ Liabilities to Third Parties. The Bank shall not be responsible or liable to any person in any manner whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to the City, or for the identity or authority of any person making or executing this Agreement for and on behalf of the City. The Bank is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to the City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City and the holders of the Defeased Obligations. Neither the City nor the Bank shall assign or attempt to assign or transfer any interest hereunder or any portion of any such interest. Any such assignment or attempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 19: Interpleader. In the event conflicting demands or notices are made upon the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to what action should be taken hereunder, the Bank shall have the right at its election to: (a) Withhold and stop all further proceedings in, and performance of, this Agreement with respect to the issue in question and of all instructions received hereunder in regard to such issue; and (b) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requiring all persons involved to interplead and litigate in such court their several claims and rights among themselves. In the event the Bank becomes involved in litigation in connection with this section, the City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result thereof. The obligations of the Bank under this Agreement shall be performable at the corporate office of the Bank in the city of Fort Worth, Texas. e 03M07:1 -13- e e e The Bank may advise with legal counsel in the event of any dispute or question regarding the construction of any of the provisions hereof or its duties hereunder, and in the absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting in accordance with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the field of law addressed in any such legal opinion or with respect to the instructions given. SECTION 20: Accountinq - Annual Report. Promptly after September 30th of each year, commencing with the year 1997, while the Escrow Fund is maintained under this Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or other designated official of the City, a statement in detail of the Federal Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from each Account of the Escrow Fund for the preceding 12 month period ending September 30th of each year. SECTION 21: Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF NORTH RICHLAND HILLS, TEXAS 7301 N. E. Loop 820 North Richland Hills, Texas 76182 Attention: Director of Finance BANK ONE, TEXAS, N.A. 500 Throckmorton, suite 704 Fort Worth, Texas 76102 Attention: Corporate Trust Department The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. 038407:) -14- e SECTION 22: Performance Date. Whenever under the terms of this Agreement the performance date of any provision hereof, including the date of maturity of interest on or principal of the Defeased Obligations, shall be a Sunday or a legal holiday or a day on which the Bank is authorized by law to close, then the performance thereof, including the payment of principal of and interest on the Defeased obligations, need not be made on such date but may be performed or paid, as the case may be, on the next succeeding business day of the Bank with the same force and effect as if made on the date of performance or payment and with respect to a payment, no interest shall accrue for the period after such date. e SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Aqreement. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Agreement, in any and every said Defeased Obligation as executed, authenticated and delivered and in all proceedings pertaining thereto as said Defeased Obligations shall have been modified as provided in this Agreement. The City covenants that it is duly authorized under the Constitution and laws of the State of Texas to execute and deliver this Agreement, that all actions on its part for the payment of said Defeased Obligations as provided herein and the execution and delivery of this Agreement have been duly and effectively taken and that said Defeased Obligations and coupons in the hands of the holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof as provided in this Agreement. SECTION 24: Severabilitv. If anyone or more of the covenants or agreements provided in this Agreement on the part of the parties to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. In the event any covenant or agreement contained in this Agreement is declared to be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service) which has rated the Defeased Obligations on the basis of this Agreement. SECTION 25: Termination. This Agreement shall terminate when the Defeased Obligations, including interest due thereon, have been paid and discharged in accordance with the provisions of this Agreement. If any Defeased obligations are not presented for payment when due and payable, the nonpayment thereof shall not e 0334076 -15- e e e prevent the termination of this Agreement. Funds for the payment of any nonpresented Defeased obligations and accrued interest thereon shall upon termination of this Agreement be held by the Bank for such purpose in accordance with Section 7 hereof. Any moneys or Federal Securities held in the Escrow Fund at termination and not needed for the payment of the principal of or interest on any of the Defeased Obligations shall be paid or transferred to the city. SECTION 26: Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Bank by this Agreement. SECTION 27: Successors/Assiqns. (a) Should the Bank not be able to legally serve or perform the duties and obligations under this Agreement, or should the Bank be declared to be insolvent or closed for any reason by federal or state regulatory authorities or a court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held hereunder, together with all books, records and accounts relating to the Escrow Fund and the Defeased Obligations, to such successor and (ii) assign all rights, duties and obligations under this Agreement to such successor. If the City should fail to appoint such a successor within ninety (90) days from the date the City discovers, or is notified of, the event or circumstance causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the Defeased Obligations, may apply to a court of competent jurisdiction to appoint a successor or assigns of the Bank and such court, upon determining the Bank is unable to continue to serve, shall appoint a successor to serve under this Agreement and the amount of compensation, if any, to be paid to such successor for the remainder of the term of this Agreement for services to be rendered both for administering the Escrow Fund and for paying agent duties and responsibilities for the Defeased Obligations. (b) Furthermore, the Bank may resign and be discharged from performing its duties and responsibilities under this Agreement upon notifying the City in writing of its intention to resign and requesting the City to appoint a successor. No such resignation shall take effect until a successor has been appointed by the City and such successor has accepted such appointment and agreed to perform all duties and obligations hereunder for a total compensation equal to the unearned proportional amount paid the Bank under section 16 hereof for the administration of this Agreement and the unearned proportional amount of the paying agents fees for the Defeased Obligations due the Bank. 03&4073 -16- e e e Any successor to the Bank shall be a bank, trust company or other financial institution that is duly qualified under applicable law (the Act or other appropriate statute) to serve as escrow agent hereunder and authorized and empowered to perform the duties and obligations contemplated by this Agreement and organized and doing business under the laws of the united states or the state of Texas, having its principal office and place of business in the state of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or state authority. Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder, and the Bank shall execute and deliver an instrument transferring to such successor, subject to the terms of this Agreement, all the rights, powers and trusts created and established and to be performed under this Agreement. Upon the request of any such successor Bank, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used herein shall be the Bank and its legal assigns and successor hereunder. SECTION 28: Escrow Aqreement - Amendment/Modification. This Agreement shall be binding upon the City and the Bank and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Defeased Obligations, the ci ty , the Bank and their respective successors and legal representatives. Furthermore, no alteration, amendment or modification of any provision of this Agreement shall (1) alter the firm financial arrangements made for the payment of the Defeased Obligations or (2) be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the holders of all Defeased Obligations outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the City and the Bank may, without the consent of the holders of the Defeased Obligations, amend or modify the terms and provisions of this Agreement to cure in a manner not adverse to the holders of the Defeased obligations any ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any amendment or modification to this Agreement, prior written notice of such amendment or proposed modification, together with the legal documents amending or modifying this Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation, Moody's Investors Service or Fitch Investors Service) which has rated the Defeased Obligations on the basis of this Agreement, prior to such amendment or modification being executed. 038407ð -17- e e e SECTION 29: Effect of Headinqs. The Section headings herei.,9 are for convenience only and shall not affect the construction hereof. SECTION 30: Executed CounterDarts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. This Agreement shall be governed by the laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds. IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF NORTH RICHLAND HILLS, TEXAS ATTEST: Mayor City Secretary (City Seal) BANK ONE, TEXAS, N.A., Fort Worth, Texas, as Escrow Agent ATTEST: Title: Authorized Signer (Bank Seal) 03&4073 -18- e e e Exhibit C to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 47 of this Ordinance. Annual Financial Statements and operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information under Tables 1 through 12. Accounting principles The accounting principles referred to in such Section are the generally accepted accounting principles as applicable to governmental units as prescribed by The Government Accounting Standards Board. 0374906 e e e RESOLUTION NO. 96-76 A RESOLUTION providing for the redemption of certain outstanding bonds of the City; and resolving other matters incident and related to the redemption of such bonds. WHEREAS, pursuant to ordinances passed and adopted by the City Council of the City of North Richland Hills, Texas, the following described obligations were duly authorized to be issued and are currently outstanding, to wit: (1) City of North Richland Hills, Texas, Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989, dated March 1, 1989, being (i) current interest bonds aggregating in principal amount $1,770,000 and maturing on September 1 in each of the years 2000 and 2001, and (ii) capital appreciation bonds aggregating in maturity amount of $4,070,000 and maturing on September 1 in each of the years 2002 through 2008; (2) City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A, dated March 1, 1989, being (i) current interest bonds aggregating in principal amount $770,000 and maturing on September 1 in each of the years 2000 and 2001, and (ii) capital appreciation bonds aggregating in maturity amount of $1,730,000 and maturing on September 1 in each of the years 2002 through 2008; and (3) ci ty of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B, dated July 1, 1989, being (i) current interest bonds aggregating in principal amount $1,200,000 and maturing on September 1 in each of the years 2000 and 2001, and (ii) capital appreciation bonds aggregating in maturity amount of $3,020,000 and maturing on September 1 in each of the years 2002 through 2008; 03S3894 e e e AND WHEREAS, the above identified obligations were authorized, issued, sold and delivered subject to the right and authority of the City to redeem the same prior to maturity, as provided in the respective authorizing ordinances and in said obligations; and WHEREAS, in connection with the refunding and/ or defeasance of the above described obligations, the Council hereby finds and determines that obligations of the respective series should be redeemed prior to their maturities on the dates and in the manner hereinafter provided and in accordance with the requirements prescribed therefor and notice of redemption of such obligations should be approved and authorized to be given at this time by the Council; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY Of NORTH RICHLAND HILLS, TEXAS: SECTION 1: The bonds of that series known as "City of North Richland Hills, Texas, Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 198911, dated March 1, 1989, (a) maturing in the years 2000 and 2001, and aggregating in principal amount $1,770,000, shall be redeemed and the same are hereby called for redemption on September 1, 1999, at the price of par and accrued interest to the date of redemption and (b) maturing in the years 2002 through 2008, and aggregating in maturity amount of $4,070,000, shall be redeemed and the same are hereby called for redemption on March 1, 1997 at the redemption price equivalent to 104.50% of the Accreted Value as of the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this resolution, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to Texas American Bank/Fort Worth, N .A.), in accordance wi th the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit A and incorporated herein by reference as a part of this resolution for all purposes. SECTION 2: The bonds of that series known as IICity of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-AII, dated March 1, 1989, (a) maturing in the years 2000 and 2001, and aggregating in principal amount $770,000, shall be redeemed and the same are hereby called for redemption on September 1, 1999, at the price of par and accrued interest to the date of redemption and (b) maturing in the years 2002 through 2008, and aggregating in maturity amount of $1,730,000, shall be redeemed and the same are hereby called for redemption on March 1, 1997 at the redemption price equivalent to 104.50% of the Accreted Value as of the date of redemption. The 0383a94 -2- e City Secretary is hereby authorized and directed to file a copy q~ this resolution, together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to Texas American Bank/Fort Worth, N .A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit B and incorporated herein by reference as a part of this resolution for all purposes. e SECTION 3: The bonds of that series known as "City of North Richland Hills, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B", dated July 1, 1989, (a) maturing in the years 2000 and 2001, and aggregating in principal amount $1,200,000, shall be redeemed and the same are hereby called for redemption on September 1, 1999, at the price of par and accrued interest to the date of redemption and (b) maturing in the years 2002 through 2008, and aggregating in maturity amount of $3,020,000, shall be redeemed and the same are hereby called for redemption on March 1, 1997 at the redemption price equivalent to 104.50% of the Accreted Value as of the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this resolution', together with a suggested form of notice of redemption to be sent to bondholders, with Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to Texas American Bank/Fort Worth, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit C and incorporated herein by reference as a part of this resolution for all purposes. SECTION 4: The redemption of the obligations described above being associated with the refunding and/or defeasance of such obligations, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996 and upon the accomplishment of the defeasance of certain outstanding bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such obligations of the City's decision to redeem such obligations on the dates and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the obligations. e 0383894 -3- e e e ATTEST: PASSED AND ADOPTED, this December 16, 1996. CITY OF NORTH RICHLAND HILLS, TEXAS Mayor City Secretary (City Seal) 0383894 -4- EXHIBIT A e NOTICE OF REDEMPTION CITY OF NORTH RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM IMPROVEMENT AND REFUNDING REVENUE BONDS SERIES 1989 DATED MARCH 1, 1989 NOTICE IS HEREBY GIVEN that (i) current interest bonds of the above series maturing on and after September 1, 2000 and aggregating in principal amount $1,770,000 have been called for redemption on September 1, 1999 at the redemption price of par and accrued interest to the date of redemption and (ii) capital appreciation bonds of the above series maturing on and after September 1, 2002 and aggregating in maturity amount $4,070,000 have been called for redemption on March 1, 1997 at the redemption price equivalent to 104.5% of the Accreted Value as of the date of redemption, such bonds being identified as follows: Bond Numbers Year of Maturitv Principal Amount/ Maturity Amount to be Redeemed Accreted Value of CABs as of March 1. 1997 e 2000 2001 2002 2003 2004 2005 2006 2007 2008 $855,000 915,000 985,000 985,000 520,000 395,000 395,000 395,000 395,000 $653,529.72 606,555.63 295,056.94 207,819.64 191,817.13 177,772.80 164,756.76 ALL SUCH CURRENT INTEREST BONDS shall become due and payable on September 1, 1999 and all such Capital Appreciation Bonds shall become due and payable on March 1, 1997, and interest on the current interest bonds shall cease to accrue, and the value of the capital appreciation bonds shall cease to accrete, from and after such redemption dates. Payment of the respective redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to the offices of Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to the Texas American Bank/Fort Worth, N.A.) located at 235 West Schrock Road, Westerville, Ohio 43081- 0393, Attention: Securities Transfer. e THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to a resolution by the City Council of the city of North Richland Hills, Texas. BANK ONE, TEXAS, N.A. 500 Throckmorton, suite 704 Fort Worth, Texas 76102, as Paying Agent/Registrar 0333923 e e e J EXHIBIT B NOTICE OF REDEMPTION CITY OF NORTH RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REFUNDING REVENUE BONDS SERIES 1989-A DATED MARCH 1, 1989 NOTICE IS HEREBY GIVEN that (i) current interest bonds of the above series maturing on and after September 1, 2000 and aggregating in principal amount $770,000 have been called for redemption on September 1, 1999 at the redemption price of par and accrued interest to the date of redemption and (ii) capital appreciation bonds of the above series maturing on and after September 1, 2002 and aggregating in maturity amount $1,730,000 have been called for redemption on March 1, 1997 at the redemption price equivalent to 104.5% of the Accreted Value as of the date of redemption, such bonds being identified as follows: Bond Numbers Principal Amount/ Maturity Amount to be Redeemed Accreted Value of CABs as of March 1. 1997 Year of Maturitv 2000 2001 2002 2003 2004 2005 2006 2007 2008 $370,000 400,000 425,000 425,000 220,000 165,000 165,000 165,000 165,000 $281,979.83 261,711.82 124,831.78 86,810.73 80,126.14 74,259.53 68,822.45 ALL SUCH CURRENT INTEREST BONDS sha II become due and payable on September 1, 1999 and all such Capital Appreciation Bonds shall become due and payable on March 1, 1997, and interest on the current interest bonds shall cease to accrue, and the value of the capital appreciation bonds shall cease to accrete, from and after such redemption dates. Payment of the respective redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to the offices of Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to the Texas American Bank/Fort Worth, N.A.) located at 235 West Schrock Road, Westerville, Ohio 43081- 0393, Attention: Securities Transfer. THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to a resolution by the City Council of the City of North Richland Hills, Texas. BANK ONE, TEXAS, N.A. 500 Throckmorton, Suite 704 Fort Worth, Texas 76102, as Paying Agent/Registrar 0383923 EXHIBIT C - NOTICE OF REDEMPTION ""'" CITY OF NORTH RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REFUNDING REVENUE BONDS SERIES 1989-B DATED JULY 1, 1989 NOTICE IS HEREBY GIVEN that (i) current interest bonds of the above series maturing on and after September 1, 2000 and aggregating in principal amount $1,200,000 have been called for redemption on September 1, 1999 at the redemption price of par and accrued interest to the date of redemption and (ii) capital appreciation bonds of the above series maturing on and after September 1, 2002 and aggregating in maturity amount $3,020,000 have been called for redemption on March 1, 1997 at the redemption price equivalent to 104.5% of the Accreted Value as of the date of redemption, such bonds being identified as follows: Bond Numbers Year of Maturitv Principal Amount/ Maturity Amount to be Redeemed Accreted Value of CABs as of March 1. 1997 e 2000 2001 2002 2003 2004 2005 2006 2007 2008 $580,000 620,000 665,000 665,000 400,000 370,000 380,000 270,000 270,000 $453,975.14 422,542.33 236,176.00 203,642.08 194,065.24 128,471.94 119,698.56 ALL SUCH CURRENT INTEREST BONDS shall become due and payable on September 1, 1999 and all such Capital Appreciation Bonds shall become due and payable on March 1, 1997, and interest on the current interest bonds shall cease to accrue, and the value of the capital appreciation bonds shall cease to accrete, from and after such redemption dates. Payment of the respective redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to the offices of Bank One, Texas, N.A., Fort Worth, Texas (successor paying agent/registrar to the Texas American Bank/Fort Worth, N.A.) located at 235 West Schrock Road, Westerville, Ohio 43081- 0393, Attention: Securities Transfer. THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to a resolution by the City Council of the City of North Richland Hills, Texas. . BANK ONE, TEXAS, N.A. 500 Throckmorton, suite 704 Fort Worth, Texas 76102, as Paying Agent/Registrar 0383923 .. CITY OF NORTH RICHLAND HILLS - Department: City Secretary Council Meeting Date: 12/16/96 Agenda Number: GN 96-149 Subject: Authorizing Use of Alternate City Seals - Ordinance No. 2161 Currently the official city seal is an embossed seal. Placing the embossed seal on some of the city's documents is often difficult, because of the city officials' signatures location. A rubber stamp city seal would be more practical to use on the mylars and other documents that we send to the County for recording. The attached ordinance would authorize the City Secretary to use either an embossed seal or a rubber stamp seal. Recommendation: It is recommended that City Council approve Ordinance No. 2161. e Finance Review Source of Funds: Acct. Number Bonds (GO/Rev.) Sufficient Funds Available _¡'ing Budge' = ~~~Signature /P 0~ CITY COUNCIL ACTION "EM Fin"".. DftcIor Page 1 of . . . . . ORDINANCE NO. 2161 AN ORDINANCE AUTHORIZING THE CITY SECRETARY TO USE ALTERNATE SEALS. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: 1. The City Secretary be, and is hereby, authorized to use as the CITY SEAL either an embossed seal or a rubber seal. The official seal of the City shall be either of the two seals shown in Section 2, below. 2. \\\\" 111111/1/" \\,\ ~~"" ,-,-'- I,/. ~~~,¡(~.............. {""'~ ~ ""..- .. /. s: .- n -. ~ § ~.... .... cfl:; È&! \. ~ ::: r :-i= ::>-: :m = ;~\ .al) /~ 2 ~v·,- n ....Gt:J~ ~..... .... ~ ~'- ...:¡"..... ~ i/;" ,,-'" ;/," \\\''\. :t"""", "U\\\\ (seal) PASSED and APPROVED this 16th day of December, 1996. APPROVED: ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex Mcentire, City Attorney ,-,' \1' CITY OF NORTH RICHLAND HILLS " Department: Parks and Recreation Department . 12/16/96 Council Meeting Date: Subject: NRHzO Infrastructure Improvements Agenda Number: GN 96-150 The NRH20 Family Water Park 1996 Season Review and 1997 Season Recommendations Report, presents facility enhancements targeted at maintaining the investment in NRHzO and its infrastructure. The majority of the facility enhancements were initially proposed and approved last year. For budgetary reasons they were deleted from the final scope of work. Finally, the report includes two capital purchases at NRHzO. The purchases are designed to improve security and enable better tracking and control of labor expenses. The first enhancement, a shaded picnic area, is proposed because this type of seating is at a premium within the park. We have identified an area that is able to be used as a natural shaded area. The use of natural shade allows us to utilize a larger area without the initial added expense of building shade structures. This area is located by the wave pool on the Mountasia side of our property. The Parks Department is grubbing and clearing the area for use. If enhancement plans are approved the fence will be extended to contain this new picnic area. Semi-permanent walkways will be added and picnic tables, located in clusters of varying sizes, will be distributed throughout the area. Future expansion in this area may entail small permanent shade structures and permanent walkways. Estimated cost is $14,500. The second infrastructure investment recommendation is site drainage. The poor weather and high attendance at NRHzO has caused site drainage to become a major concern. We lost approximately 2.5 days of operation due to the flooding of our pools, specifically the Endless River. Lost revenues were estimated at $50,000 due to the flooding. However, we still incurred a large labor expense because the park staff still had to clean the park and the pools instead of opening them for the public. We are proposing additional drainage in conjunction with grading adjustments to better manage rain water during major storms. Other site drainage, located at strategic locations, will minimize the swampy areas that occur along our walkways. These improvements are estimated at $50,500. It is recommended that the drainage and picnic enhancements be funded from the Aquatic Park Enterprise Fund 1996 Retained Earnings. These funds have been allocated for Capital Improvement Projects and Facility Infrastructure. The purpose of these retained earnings are to finance future improvements at NRHzO and are available to fund the project. Finance Review Source of Funds: Bonds (GO/Rev,) Operating Budget _ Other Acct. Number Sufficient Funds Available c ch~¡(~ ~~~- --- ~ {l:Il,JtlNA{&(~ Department Head Signature '/ City Manager CITY COUNCIL ACTION ITEM Finance Director Page 1 of 2- CITY OF NORTH RICHLAND HILLS It is recommended that the video surveillance system, as discussed in the report, be funded from the 1996/97 Aquatic Park Operating Budget. The cost estimate for the system is $12,000. It is recommended that the Scheduling/Labor Updating Tracking System, discussed in the report, be funded from the Information Services Fund. Information Services receives a portion of NRH20's budget for hardware and software upgrades to its computer system and maintenance of its infrastructure. The cost estimate for this system is $8,000 which can be provided in the 1996/97 Information Services Budget. RECOMMENDATION: It is recommended that Council: (1) Approve the facility enhancements, drainage and shaded picnic area expansion, and amend the 96/97 Capital Project Budget in the amount of $65,000 for these projects. Funding will be provided from the Aquatic Park Enterprise Fund - Reserve for Aquatic CIP. (2) Approve the recommended security and computer capital purchases and amend accordingly the 96/97 Aquatic Park and Information Services Budgets. Page 2. of 2. . AQUATIC PARK ENTERPRISE FUND CAPITAL IMPROVEMENTS Additional Site Work at NRH20 Family Water Park 21-10-01 eRQJECT DESCRIPTION This project provides for the design and construction of an additional sidewalk and concrete concession pads, site drainage improvements, and installation of chain link fence for park picnic expansion. PROJECT STATUS Ending Qate Beginning D-.ate Construction 3/97 2/97 . FINANCIAL DATA Proposed Total Funding Source Amount to 1996/1997 1997/1998 Remaining Project Date Bud et Bud et Bud et Cost Appropriation from Retained $0 $65,000 $0 $0 $65,000 Earnings $0 $65,000 $0 $0 $65,000 enditures Design/Construction $0 $65,000 $0 $0 $65,000 Total $0 $65,000 $0 $0 $65,000 . IMPACT ON OPERATING BUDGET It will decrease the maintenance on the facility with the improvements, such as reductions in cleaning decks and pools. 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 $0 $0 $0 $0 $0 CITY OF NORTH RICHLAND HILLS AQUATIC PARK FUND REVENUES AND EXPENSES , FISCAL YEAR 1996/1997 · \-FISCAL YEAR 1996/97 \ PROPOSED ADOPTED REVISED BUDGET BUDGET REVENUES - Residents $253,834 $253,834 - Non-Residents 931,923 931,923 Advanced Sales 465,388 465,388 Food and Beverage 327,220 327,220 Merchandise 60,210 60,210 Tube Rentals 136,984 136,984 Lockers 46,159 46,159 Interest Income 0 0 Donations 0 0 Aquatic Classes 0 0 Special Events 25,749 25,749 Miscellaneous 4,623 4,623 Appropriation from Reserves 0 65,000 Transfer From Park Fund Sales Tax-Start Up 0 0 TOTAL REVENUES $2,252,090 $2,317,090 · EXPENSES OPERATING EXPENSES Business Office $621,939 $621,939 Park Operations 476,420 476,420 Food & Beverage 388,896 388,896 TOTAL OPERATING EXPENSES $1,487,255 $1 ,487 ,255 OTHER EXP. & RESERVES Reserve for Aquatic CIP $325,000 $325,000 Transfer to Aquatic Park CIP 0 65,000 Reserve for Insurance 75,000 75,000 Contribution to Park CIP 292,200 292,200 Indirect Costs 72,635 72,635 Depreciation 0 0 TOTAL OTHER EXP. $764,835 $829,835 TOTAL OPERATING EXPENSES AND RESERVES $2,252,090 $2,317,090 NET BALANCE $0 $0 · CITY OF NORTH RICHLAND HILLS ~ I Department: Parks and Recreation Department 12/16/96 Council Meeting Date: Subject: NRHzO 1996 Season Review and 1997 Season RecommendationSAgenda Number: GN 96-151 The NRH20 Family Water Park 1996 Season Review and 1997 Season Recommendations Report, has been prepared by staff and attached for your review. This report summarizes and evaluates the effectiveness of our marketing efforts, the on-park revenue centers, guest satisfaction, guest surveys, financial performance and attendance for the 1996 season. This report also presents to Council the policy recommendations based on guest responses and staff analysis for the upcoming 1997 season. The policy recommendations reinforce the commitment to continuously develop NRH20 as a premiere facility. Guest needs are monitored on a continuous basis and as those needs develop, improvements in service are recommended as part of an ongoing mission of "exceeding expectations". RECOMMENDATION: It is recommended that Council: (1) Review the report and approve the recommended policies and pricing for the 1997 season. Attachments Finance Review Source of Funds: Acct. Number Bonds (GO/Rev,) Sufficient Funds Available Operating Budget _ Other _ -~~~~--~~ ~/ (?/l.5-~~~ Department Head Signature 0 / - ~I -- ~ity M~nager CITY COUNCIL ACTION ITEM Finance Director Page 1 of J UNAUDITED · REVISED CITY OF NORTH RICHLAND HILLS 12/06/96 NRH20 WATER PARK 08:52 AM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDING SEPTEMBER 30,1996 Increase/ 1996 1995 (Decrease) 21-00-00-4010 Admissions - Residents $134,999 $209,780 ($74,780) 21-00-00-411 0 Sales Season Pass Residents 146,744 103,830 42,914 21-00-00-4020 Admissions - Non-Residents 827.449 770,184 57,265 21-00-00-4120 Sales Season Pass Nonresidents 168,679 94,883 73,796 21-00-00-41 00 Group Sales - General 113,364 0 113,364 21-00-00-4130 Sales Group Packages 11 ,290 59,529 (48,239) 21-00-00-4131 Birthday Party Group Revenue 36,184 21 ,280 14,904 Admissions Revenue 1,438,709 1.259,484 179.225 21-00-00-4200 Tube Rental Income 102,664 113,210 (10,546) 21-00-00-4300 Locker Fees 32,159 38,148 (5,989) Rental Income 134,823 151.358 (16,535) 21-00-00-4150 Resident I 0 Cards 5 55 (50) 21-00-00-4160 River Walk Run Revenue 0 80 (80) 21-00-00-4170 Water Aerobic Class Revenue 390 498 (108) 21-00-00-4175 Swim Class Revenue 4,324 590 3,734 21-00-00-4180 Game Machine Revenue 0 6,057 (6,057) 21-00-00-4190 Season Pass Replacement Fees 629 303 326 · 21-00-00-4800 Other Income 4,285 3,822 464 21-00-00-4810 Other Income - Sales Tax Disc 179 481 (303) 21-00-00-4820 CPO Class Revenue 900 4,163 (3,263) 21-00-00-4950 Over/Short 1,726 0 1,726 21-00-00-5200 Discounts Taken 105 0 105 Miscellaneous Income 12,542 16,049 (3,507) 21-00-00-4005 Sponsorship Revenues 0 750 (750) 21-00-00-4811 Special Event Revenue 0 0 0 21-00-00-4812 Donations - Sunbelt 20,000 0 20,000 21-00-00-4813 Donations - Other 5,000 0 5,000 21-00-00-4815 Corporate Donations Dr Pepper 20,000 20,000 0 Sponsorships/Donations 45,000 20,750 24,250 21-00-00-4400 Beverage Sales 57,145 79,305 (22,160) 21-00-00-4500 Food Sales 177,548 191,125 (13,577) 21-00-00-4600 Merchandise Sales 79,136 49,760 29,376 Food, Beverage & Gift Shop Revs 313,829 320,190 (6,361) Total Operating Revenues 1,944,903 1,767,831 177,072 21-01-01-4005 Special Sponsorships Events 0 674 (674) 21-01-01-4010 Advertising 179,703 129.491 50,211 21-01-01-4100 In-Service Training 4.692 966 3,726 21-01-01-4500 General Liability Insurance 39,028 14,459 24,569 21-01-01-4650 Hiring Expense 1,291 216 1,075 21-01-01-4790 Indirect Cost 72,635 0 72,635 21-01-01-4800 Special Services 11,619 10,177 1,442 · 21-01-01-4804 Professional Services 6,834 0 6,834 21-01-01-4816 Donations 5,614 0 5,614 Page 1 NRH21DET.WK4 , UNAUDITED · REVISED CITY OF NORTH RICH LAND HILLS , 2/06/96 NRH20 WATER PARK 08:52 AM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDING SEPTEMBER 30,1996 Increase/ 1996 1995 (Decrease) 21-01-01-4810 Donation Expenses Dr Pepper 0 2,152 (2,152) 21-01-01-4811 Special Event Expenses 0 0 0 21-01-01-4812 Donation Expenses - Sunbelt 0 0 0 21-01-01-4813 Donation Expenses - Other 0 0 0 21-01-01-4815 Donation Expense - Dr Peppér 7,792 11,278 (3,486) 21-01-01-4850 Telephone Service 2,065 5,727 (3,662) 21-01-01-4880 Telephone Allocation 7,611 0 7,611 21-01-01-4890 Computer Allocation 68,595 0 68,595 21-01-01-4885 Credit Card Service Fees 6,428 3,287 3,141 21-02-01-4100 In-Service Training 2,719 5,545 (2,826) 21-02-01-4300 Electric Service 93,945 48,396 45,549 21-02-01-4500 General Liability Insurance 2,375 28,163 (25,788) 21-02-01-4650 Hiring Expense 0 11 ,509 (11,509) 21-02-01-4750 Rental Equipment 4,066 1,122 2,945 21-02-01-4820 CPO Class Expense 538 0 538 21-02-01-4850 Telephone Service 242 57 185 21-02-01-4910 Water Purchases 1,533 18,742 (17,209) 21-02-01-4920 Sewage Treatment 0 3,713 (3,713) 21-03-01-4010 Advertising 0 0 0 · 21-03-01-4100 In-Service Training 1,060 619 441 21-03-01-4300 Electric Service 0 0 0 21-03-01-4500 General Liability Insurance 0 6,277 (6,277) 21-03-01-4650 Hiring Expense 0 375 (375) 21-03-01-4750 Rental Equipment 641 0 641 21-03-01-4850 Telephone Service 75 21 55 21-03-01-4910 Water Purchases 0 0 0 21-03-01-4920 Sewage Treatment 0 0 0 21-10-01-6000 Master Plan/96 Park Expansion 0 0 0 21-10-02-6000 Tube Slide Attraction (1996) (0) 0 (0) Contractual Services 521,100 302,966 218,133 21-01-01-1020 Salaries/Div & Operations 0 0 0 21-01-01-1030 Salaries-Supervisory 0 42,830 (42,830) 21-01-01-1040 Salaries, Regular Full-Time 87,830 0 87,830 21-01-01-1070 Salaries Overtime 0 0 0 21-01-01-1080 Salaries, Part- TimelT emp 69,608 30,131 39,477 21-01-01-1150 FICA Expense 6,503 2,855 3,648 21-01-01-1160 TMRS Retirement 9,891 4,469 5,422 21-01-01-1170 Taxable Benefits 0 0 0 21-01-01-1180 Hospitalization Ins Transfer 12,570 9,120 3,450 21-01-01-1190 Worker's Comp Ins Transfer 4,800 4,200 600 21-02-01-1020 Salaries/Div & Operations 0 0 0 21-02-01-1030 Salaries-Supervisory 0 24,318 (24,318) 21-02-01-1040 Salaries, Regular Full-Time 56,005 0 56,005 21-02-01-1080 Salaries, Part- TimelT emp 216,849 184,634 32,215 21-02-01-1150 FICA Expense 17,394 14,381 3,013 21-02-01-1160 TMRS Retirement 6,749 2,789 3,960 21-02-01-1170 Taxable Benefits 0 0 0 · 21-02-01-1180 Hospitalization Ins Transfer 8,380 6,080 2,300 Page 2 NRH21DET.WK4 UNAUDITED · REVISED CITY OF NORTH RICHLAND HILLS 12/06/96 NRH20 WATER PARK 08:52 AM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDING SEPTEMBER 30,1996 Increase/ 1996 1995 (Decrease) 21-02-01-1190 Worker's Comp Ins Transfer 36,449 33,132 3,317 21-03-01-1020 Salaries/Div & Operations 0 0 0 21-03-01-1030 Salaries-Supervisory 0 46,903 (46,903) 21-03-01-1040 Salaries, Regular Full-Time 27,802 0 27,802 21-03-01-1080 Salaries, Part- TimefT emp 177,107 125,699 51,407 21-03-01-1150 FICA Expense 13,953 10,297 3,656 21-03-01-1160 TMRS Retirement 3,349 5,294 (1,945) 21-03-01-1170 Taxable Benefits 0 0 0 21-03-01-1180 Hospitalization Ins Transfer 4,190 3,040 1,150 21-03-01-1190 Worker's Comp Ins Transfer 24,042 18,899 5,143 Personal Services 783,470 569,070 214,400 21-01-01-3440 Office Equipment Maintenance 4,109 1,929 2,180 21-01-01-3460 Radio Maintenance 1,187 0 1,187 21-01-01-3560 Security Equipment Maintenance 579 156 423 21-02-01-3020 Building Maintenance 5,820 6,569 (749) 21-02-01-3040 Grounds Maintenance 1,518 159 1,359 21-02-01-3110 Water System Repair & Maint 25 0 25 21-02-01-3420 Small Equipment Maintenance 277 432 (155) · 21-02-01-3460 Radio Maintenance 0 922 (922) 21-02-01-3465 Equipment Maintenance 2,245 333 1,912 21-02-01-3480 Sign/Fence/Sidewalk Maintenance 3,253 2,401 853 21-02-01-3510 Plumbing Repair & Maint 317 878 (562) 21-02-01-3520 Electrical Repair & Maint 1,969 643 1,326 21-02-0,1-3560 Security Equipment Maintenance 0 120 (120 ) 21-02-01-3580 Overhead Door Maintenance 840 0 840 21-02-01-3600 Swimming Pool Maintenance 4,915 0 4,915 21-03-01-3420 Small Equipment Maintenance 1,026 453 573 21-03-01-3460 Radio Maintenance 0 0 0 21-03-01-3510 Plumbing Repair & Maint 0 0 0 21-03-01-3520 Electrical Repair & Maint 0 10 (10) 21-03-01-3560 Security Equipment Maintenance 0 0 0 21-00-00-6000 Prior Year Expenditure (Ene) 1,390 0 1,390 21-01-01-6400 Machinery And Equipment 0 0 0 Maintenance 29,471 15,005 14,465 21-01-01-2100 Chemical Supplies 0 0 0 21-01-01-2200 Clothing Supplies 1,935 315 1,620 21-01-01-2300 Data Processing Supplies 2,264 2,608 (344) 21-01-01-2450 Small Office Equipment 731 0 731 21-01-01-2500 Educational Supplies 139 461 (322) 21-01-01-2600 General Office Supplies 5,963 6,016 (53) 21-01-01-2850 Motor Vehicle Supplies 4,500 0 4,500 21-01-01-2900 Miscellaneous Supplies 831 2,186 (1,355) 21-02-01-2010 Botanical Supplies 2,747 0 2,747 21-02-01-2100 Chemical Supplies 42,013 25,664 16,349 21-02-01-2150 Medical/First Aid Supplies 3,960 637 3,323 21-02-01-2200 Clothing Supplies 4,272 4,738 (466) · 21-02-01-2500 Educational Supplies 8,836 2,037 6,799 Page 3 NRH21DET.WK4 UNAUDITED · REVISED CITY OF NORTH RICHLAND HILLS 12/06/96 NRH20 WATER PARK 08:52 AM STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEAR ENDING SEPTEMBER 30,1996 Increase/ 1996 1995 (Decrease) 21-02-01-2600 General Office Supplies 397 24 373 21-02-01-2700 Janitorial Supplies 7,971 3.617 4.354 21-02-01-2800 Minor Tools 750 0 750 21-02-01-2900 Miscellaneous Supplies 2.346 3,297 (951 ) 21-02-01-2910 Safety Equipment 1.268 1.624 (356) 21-02-01-2920 Pool Supplies 11,685 918 10,768 21-02-01-2930 Aquatic Park Supplies 2,220 10.644 (8,424) 21-03-01-2050 Food Supplies - Aquatic Park 100,169 82,726 17,443 21-03-01-2080 Merchandise - Aquatic Park 54,380 27.209 27,171 21-03-01-2100 Chemical Supplies 119 8 111 21-03-01-2150 Medical/First Aid Supplies 0 59 (59) 21-03-01-2200 Clothing Supplies 3.264 6,462 (3,197) 21-03-01-2510 Special Event Supplies 6.206 4.947 1,260 21-03-01-2600 General Office Supplies 160 42 117 21-03-01-2700 Janitorial Supplies 1,344 177 1.167 21-03-01-2900 Miscellaneous Supplies 12,228 3,478 8.750 21-03-01-2910 Safety Equipment 0 0 0 21-03-01-2950 Special Group Expenses 0 0 0 Supplies 282,697 189,892 92,805 · 21-02-01-7000 Depreciation Expense 275.989 134.199 141,790 Depreciation 275,989 134,199 141,790 Total Operating Expenses 1,892,727 1,211,134 681,593 Operating Income 52,176 556,698 (504,521) 21-00-00-4850 Interest Income ' 29.044 10.806 18,237 Interest Income 29,044 10,806 18,237 Total Non-operating Expense/(Revenue)) 29,044 10,806 18,237 Income before Transfers 81,220 567,504 (486,284) 21-00-00-3821 Transfer from Parks Dev Fund 0 67,700 (67.700) Operating Transfers In 0 67,700 (67,700) 21-00-00-3822 Transfer to Parks/Rec Dev Fund 0 0 0 Operating Transfers Out 0 0 0 Net Income 81 ,220 635,204 (553,984) 21-00-00-0596 Retained Earnings Reserve CIP 200,920 325.000 124.080 Reserved for Transfer to CIP 0 177,814 177,814 21-00-00-0598 Ins Reserved Retained Earnings 120,000 75,000 (45,000) 21-00-00-0599 Retained Earnings 314,284 (577,814) (892,098) Retained Earnings BOY 635,204 0 635,204 · Retained Earnings EOY $716.424 $635,204 $81 ,220 Page 4 NRH21DETWK4 UNAUDITED · REVISED CITY OF NORTH RICHLAND HILLS 12/06/96 NRH20 WATER PARK 09:01 AM BALANCE SHEET SEPTEMBER 30,1996 Increasel 1996 1995 (Decrease) 21-00-00-0100 Equity Cons - Aquatic Park $302,706 $223,626 $79,080 21-00-00-0101 Petty Cash - Office Mgr 400 400 0 21-00-00-0102 Petty Cash - Change Till 0 0 0 21-00-00-0103 Petty Cash-Cash Drawers 0 0 0 Cash & Investments 303,106 224,026 79,080 21-00-00-0110 Equity - Capital Projects 28,964 0 28,964 21-00-00-0115 Cash Reserve for Future CIP 200,920 325,000 (124,080) 21-00-00-0116 Cash Reserve for Insurance 120,000 75,000 45,000 Restricted Cash & Investments 349,884 400,000 (50,116) 21-00-00-0505 Miscellaneous Accts Receivable 16,554 37 16,517 21-00-00-4900 Returned Checks 1,089 321 767 AIR 17,642 358 17,284 21-00-00-0510 Interest Receivable 6,098 1,870 4,228 Interest Receivable 6,098 1,870 4,228 · 21-00-00-0301 Inventory - Merchandise 5,430 3,082 2,349 21-00-00-0302 Inventory - Food Supplies 1,248 3,313 (2,065) Inventory 6,678 6,395 284 Total Current Assets 683,409 796,881 (113,472) 21-00-00-0401 Land 745,771 745,771 0 land 745,771 745,771 0 21-00-00-0402 Building & Improvements 919,900 919,900 0 Building & Improvements 919,900 919,900 ° 21-00-00-0403 Improvements Other Than Bldgs 7,353,177 6,865,181 487,996 Other Improvements 7,353,177 6,865,181 487,996 21-00-00-0404 Machinery and Equipment 256,939 254,776 2,163 21-00-00-0405 Furniture and Fixtures 27,804 23,997 3,807 21-00-00-0407 Data Processing Equipment 62,771 57,133 5,638 21-00-00-0408 Construction In Progress 11,790 0 11,790 21-00-00-0411 Vehicles 0 0 0 Machinery & Equipment 359,304 335,906 23,398 Total PP&E Gross 9,378,152 8,866,758 511,394 21-00-00-0601 Accumulated Depreciation (410,188) (134,199) 275,989 Accumulated Depreciation (410,188) (134,199) 275,989 · Total PP&E Net 8,967,964 8,732,559 235,405 Page 1 NRH21 DET.WK4 , UNAUDITED · REVISED CITY OF NORTH RICHLAND HILLS 12/06/96 NRH20 WATER PARK 09:01 AM BALANCE SHEET SEPTEMBER 30,1996 Increasel 1996 1995 (Decrease) Total Assets $9,651,373 $9,529,440 $121,933 21-00-00-0650 Sales Tax Payable $831 $0 831 21-00-00-0811 Accounts Payable 46,591 14,605 31,987 21-00-00-0812 Prior Year Accounts Payable 0 0 0 AlP 47,423 14,605 32,818 21-00-00-0750 Accrued Liabilities 9,485 3,867 5,618 21-00-00-0751 Accrued Liabilites-G/L Claims 0 10,000 (10,000) 21-00-00-0755 Accruad Liabilities (Payroll) 21,123 7,791 13,332 Accrued liabilities 30,607 21,657 8,950 21-00-00-1620 FICA Payable (113) (92) (21 ) 21-00-00-1630 Employee TMRS Withheld 471 880 (409) 21-00-00-1631 Accrued Employers TMRS 822 1 ,442 (620) 21-00-00-1635 Withholding Taxes Payable (5) 0 (5) · 21-00-00-1640 Health Insurance Payable 49 49 0 21-00-00-1641 Life Insurance Payable 0 0 0 21-00-00-1642 Alliance Cancer Ins Payable 0 0 0 21-00-00-1643 Cancer Insurance Payable 0 0 0 21-00-00-1644 Car Allowance - FICA Taxable 0 0 0 21-00-00-1645 Employee Association Donation 0 0 0 21-00-00-1646 NFC Life Insurance Payable 0 0 0 21-00-00-1647 Direct Deposits 0 0 0 21-00-00-1650 Employees Benevolent Fund 0 0 0 21-00-00-1655 Billing for Pagers 0 0 0 21-00-00-1660 Credit Union Deductions R-Tec 0 0 0 21-00-00-1661 Credit Union Deductions EECU 0 0 0 21-00-00-1663 Savings Bond Deductions 0 0 0 21-00-00-1665 IRS Garnishment Accrual 0 0 0 21-00-00-1670 United Way Withheld 0 0 0 21-00-00-1675 Deferred Compensation Withheld 0 0 0 21-00-00-1685 Miscellaneous Deductions 0 0 0 Other Current liabilities 1.224 2,279 (1.056) Total Current liabilities 79,253 38,541 40.712 Total liabilities 79,253 38,541 40,712 · Page 2 NRH21 DET.WK4 r . . . UNAUDITED REVISED 12/06/96 09:01 AM CITY OF NORTH RICHLAND HILLS NRH20 WATER PARK BALANCE SHEET SEPTEMBER 30,1996 1996 21-00-00-0597 Contributed Capital (Water Pk) 8,855.695 Contributed Capital 8,855,695 21-00-00-0596 Retained Earnings Reserve CIP 200.920 Reserved for Transfer to CIP 0 21-00-00-0598 Ins Reserved Retained Earnings 120.000 21-00-00-0599 Retained Earnings 395,504 Retained Earnings 716,424 Total Fund Equity 9,572,119 Total Liabilities & Fund Equity $9.651.373 ULD 0 Page 3 Increase! 1995 (Decrease) 8,855.695 0 8,855,695 0 325,000 (124.080) 177,814 (177.814) 75,000 45.000 57,390 338.114 635,204 81,220 9,490,899 81,220 $9,529,440 $121.933 0 0 NRH21DET.WK4 1996 Season Report Attendance Park Attendance increased 20% from 1995 to 1996. In 1995, 185,375 visits were paid to NRH20 while in 1996,222,986 visits were paid. This is an increase of 37,611 total visits. Guest awareness, a longer operating schedule and an increase in season pass numbers (more frequent visits) contributed to the increase in attendance. 230,000 220,000 210,000 200,000 100,000 180,000 170,000 180,000 150,000 140,000 3 130,000 i 120,000 1 110,000 ¡¡ 100,000 90,000 80,000 70,000 80,000 50,000 40,000 30,000 20,000 10,000 o AtlJlndance 1995 to 1996 ,as 111M V..r . Season passes grew from 5,250 in 1995, to over 8,050 in 1996. This is an increase of over 53 percent. While this increase in season pass numbers indicates an increase in attendance, it should be noted that season pass holders (on average) do not spend as much in park as general admission visitors. Season Pa.. Sal..1995 to 1_ 8500 l1OOO 7500 7000 8500 l1OOO !: i 4500 I .. 14000 13500 ~3000 2500 2000 1500 1000 500 las v.., 1 Marketing, Advertising and Promotions NRH20's 1996 season was a season of records. The park had 27 days over the 3,000 attendance mark as compared to 6 days in the 1995 season. Four days had attendance over the 4,000 mark as compared to zero in the 1995 season. Guest services rating improved from a 4.62 to a 4.72, out of a possible five. Number of Days Over 3,000 and 4,000 for 199510 1996 28 10 28 24 22 20 18 . E 16 Õ 14 .! § 12 z 2 19115 19116 Year Although the park saw an increase in the numbers of rain days, NRH20 experienced a 20% attendance increase over the 1995 season, and a 10% increase over the 1996 season projection of 203,000. The increase in attendance can be partially attributed to increased awareness through radio, television, direct mail and newspaper advertisements, word-of-mouth, and an increase in the number of groups visiting the park. Season Pass Promotions The 1996 season began with a Christmas season pass sale. The sale began after Thanksgiving and ran until the end of December. The promotion campaign consisted of a direct mail piece to 1995 season pass holders and newspaper ads in the Fort Worth Star-Telegram's Class Acts. The park entered a co-promotion sponsorship with North Hills Mall. NRH20 agreed to help staff the booth for a couple of hours a day for two weeks and in return the mall would sell NRH20 nonresident season passes at the booth, and the park could sell both resident and nonresident season passes while the park's staff operated the booth. NRH20 had two other season pass specials prior to the May 18 opening of the park. The first of these two promotions was directed at North Richland Hills residents, with the offer being announced in the city's January water bill. The second was an offer to residents who did not live in North Richland Hills. This offer was distributed as a 2 ~ ~ · · 4 · ~ 4 ~ 4 t t t . 41 41 41 · ~ · · · · · · · · · · · · · · · .: .. .. .. - - coupon in the Southwestern Bell direct mail coupon pack. The offer was valid from mid- February to April 30, 1996. The three season pass specials resulted in the sale of 2,164 passes which accounted for 38% of the total season pass sales. Brochure The 1996 park brochure was more detailed and informative than the 1995 brochure. The park brochure was designed to "show" families having fun, introduce the park's new mascot, Professor Frogstein, list the dive-in movie schedule and provide the operation schedule. Radio and Television Radio and television advertisements were produced and aired throughout the summer. NRH20 increased the number of radio and television stations in which the park ran the advertisements. The radio stations included, KPLX 99.5, KL TV 94.1, KDMX 102.9 and KISS 106.1. The television stations included KTXA Channel 21, KTVT Channel 11, WFAA Channel 8, KXAS Channel 5 and Marcus Cable. Professor Froastein NRH20 wanted to establish a relationship with it's new park mascot, Professor Frogstein and children. An eight-week series introducing Professor Frogstein and how he came to be and how he created NRH20 was run in the Fort Worth Star-Telegram's Class Acts section. This section ran every Tuesday and was targeted to mothers and children, the perfect vehicle in relating the Professor Frogstein story. This campaign was very successful in establishing a history and a future for the Professor. Special Events NRH20 held several special events throughout the summer. The most popular of these events were the dive-in movies. The movies were sponsored by North Hills Mall and were shown every Friday night beginning June 28 and ending August 9. The movies for the 1996 season were Babe, Pochontas, Free Willy 2, Jaws, A Kid in King Arthur's Court, Casper and Operation Dumbo Drop. Surprisingly, Jaws was by far the most popular movie, even with young children. The Cartoon Network returned for a second year to promote their new cartoons. NRH20 was so popular with the network the first year, the park was chosen as the location to begin the tour for the second year. NRH20 was also only one of three sites the network chose to return to for the second season. The remaining NRH20 promotions were very community oriented. NRH20 sponsored several D.A.R.E. weekends to promote children steering away from the use of illegal drugs. The park also gave 15 complimentary one day passes to each elementary school in the Birdville, HEB, Grapevine, Keller and Southlake independent school districts, for children who have either improved in their studies, made all A's, had perfect attendance or excelled overall in the classroom. The teachers of each school chose which criteria they would use in the distribution of the passes. 3 A third community-sponsored program consisted of and HEB ISO and Birdville ISO weekends. HEB ISD weekend was September 7 and 8 and Birdville ISO weekend was September 14 and 15. The school districts received half of the gate revenue between the hours of 2:00 p.m. and 5:00 p.m. These hours were the lowest in front gate revenue and the dates were low in projected attendance. The school was responsible for the promotion of the events. Weather 1996 was a very rainy season at NRH20. Historical data regarding long term climatic trends for the Dallas/Fort Worth area indicates that there would normally be about 6 days from June through August in which we would have .01 inches of precipitation or more. We experienced a 70 percent increase in the number of rain days from 1995 and we suspended operations due to poor weather 183 percent more than we did in 1995. NRH20 will temporarily suspend operations when the weather conditions prevent the safe operation of the pools and attractions. In 1995 we had a total of 23 "rain days" and in 1996 we had a total of 39 "rain days". In 1995 we suspended operations 6 times due to poor weather and in 1996 we suspended operations due to poor weather 17 times. Included in the rain days from both years were the number of days NRH20 was closed due to the weather. Weather Comparison for 1995 and 1996 .( 35 30 25 20 15 10 Ins IllS The average temperature also played a role throughout the season. A 2 degree drop in the average temperature was recorded throughout the season. Length of stay was also affected by the poor weather. The 1996 season average length of stay was 4.8 hours. On poor weather days the average length of stay was 4.2 hours. This drop equates to less on park spending throughout the park. Food and beverage sales are not as high 4 4 4 4 4 ~ 4 t 4 4 4 4 . . t t t 41 41 41 41 · ~ · · · · · · · · · · · · · · · · .. · · · - on a cooler temperature day because a large variety of our food products offered are based on the premise of a hot, summer day. Group Sales For the 1996 season, birthday parties, groups, and catered events all increased from the 1995 season. The additions of consignment tickets and pavilion rentals helped increase revenue. Birthday Parties During the 1996 season there were 387 parties, 137 more than 1995. The $85 parties included full day admission for eight children and two adults, the party island for one hour, a birthday cake, cookie, or ice cream, unlimited drinks during the party, a visit from Professor Frogstein, party favors, a gift for the birthday person and invitations. This year invitations were added in response to the many requests from last year. The Elements of Fun hosted and coordinated the parties. Professor Frogstein attended all the parties and sang a special Happy Birthday song (created by the Elements of Fun) to the children. Total revenue for 1996 birthdays is $39,156.20 including food options. Number of Birthday Parties 1995 to 1996 400 350 300 250 ~ . ;: :. õ200 j § z 150 100 50 1!195 1l18li v.., The birthday surveys showed how much the parents liked the parties. Surveys showed 95.4% of the parties would consider having another birthday party at NRH20. 91.19% of the surveys answered showed this was their first party at NRH20. Therefore, we had an 8.81% return rate from 1995. The average party size was 14 people. 5 Another section of the survey let parents rank different aspects of the birthday party including overall service, check-in, party, price, food, attendant, appearance of the area, and entertainment. The scale was 1 to 5, with 5 being outstanding. From the Birthday Party surveys the averages follow: a. Overall Service 4.65% b. Check-in 4.23% c. Party 4.55% d. Price 4.39% e. Food 4.30% f. Attendant 4.80% g. Appearance of Area 4.75% h. Entertainment 4.35% The results were favorable with all categories above a 4.2. The attendants ranked the best which is encouraging for the Elements of Fun. Overall, the birthday parties were very successful. Groups For 1996, most of the groups made reservations and checked in with the Group Sales Representative. NRH20 averaged 3.1 group reservations per day. Typically 2-3 more groups showed up each day without a reservation. All day care groups, or groups with several children, signed consent forms agreeing to the 6: 1 child to adult ratio. There were 140 groups that signed the consent form in 1996. There were 5,539 group adults and 8,790 group children for a total of 14,329 group tickets sold. This was more than double the 1995 groups. Total revenue for group sales and options is $111,665.06. Of total revenue, $96,133.15 is in ticket sales and $15,531.91 is for group options. The increase in group events is a result of the group mailers and increased awareness. A group mailer went to the Fort Worth Chamber members, Arlington Chamber members, Northeast Tarrant County Chamber members, and area churches. Catered Events There were more catered events in 1996. There were 11 pavilion rentals and three rentals for half the pavilion. Unlimited drinks and group tubes were options available to groups in 1996. There were 679 unlimited drinks sold at $3 each, and 495 group tubes sold at $2 each. There were 30 caters and exclusives during 1996, almost 20 more than 1995. The revenue for these groups is $25,276.29. We distributed surveys to the group contact for catered events. Participants had a chance to rank different aspects of their event on a scale 1-5 with 5 being outstanding. The areas ranked were overall service, check-in, food, food service, price, registration, ~ 6 j ~ 4 4 ~ 4 4 4 4 · t · · · · 0- · · · · · · · · · · · · · · · · .. · · · ~ and printed materials. Most of the groups ranked all areas a 5, with a few 4s. All of the groups said they would consider another group event at NRH20. Consionment Ticket Prooram The Consignment Ticket Program was a new addition in 1996. In this program, tickets were distributed to several companies. The companies were responsible for the selling of the tickets and the collection of the revenue. The companies returned to NRH20 the unused tickets and payments for the tickets sold. The tickets were available to the companies at the group rate and allowed NRH20 tickets to be sold a more than one venue. The program got a good start. This will be an area to improve on for next year. Now that the computer system is in place and the forms and contracts are designed, the promotion of the program can strengthen. Most of the participants were office building concierges. There were 22 participants in 1996. 'During 1996, 1,920 adult tickets were issued and 1,980 child tickets were issued. Of the tickets issued, 938 adult tickets and 794 child tickets were redeemed. Nineteen of the twenty-two companies had tickets redeemed. The companies that redeemed the most adult tickets were: Rank ComDanv 1 City of Southlake 2 Burnett Plaza Assoc. 3 Faison Stone Inc. 4 Transwestern Amount 203 140 103 84 % of the Tickets Redeemed 22.21% 15.32% 11.27% 9.19% The companies that redeemed the most child tickets were: Rank 1 2 3 4 ComDanv City of Southlake Burnett Plaza Assoc. Faison Stone Inc. Bank One Amount 254 78 68 62 % of the Tickets Redeemed 31.99% 9.82% 8.56% 7.81% On-Park Profit Centers Food Service The NRH20 Food Service department consisted of the Concession Stand, the new Ice Cream Shop, two cart locations, and the catering function. The Food and Beverage department generated $234,693.23 in revenue for the park. The Concession Stand served a large variety of items including hamburgers, nachos, hot-dogs, pizza, corny dogs, chili cheese dogs, chicken sandwiches, and french fries. Guests also had a choice of several snacks such as Otis Spunkmeyer cookies and Texas Twist pretzels. Little Charlie's individual pizzas were the number one seller in the Concession Stand followed by cheese and jalapeno nachos, cheeseburger combo 7 meals, and french fries. The hamburger and corny dog fun meals were very popular with the kids. In order to offset the introduction of coolers this season, NRH20 built a full service Ice Cream Shop near the Front Gate to offer more snack items to our guests. The arcade was renovated with sponsorship money to be provided by Sunbelt Distributors, our source for all of our Ice Cream products. The Ice Cream Shop served Dreyers Grand hand dipped ice cream, Colombo frozen soft serve yogurt, ice cream shakes, Colliders, Fruit Smoothies, and Ice Cream Floats. The Ice Cream Shop also served other snack items such as nachos, Otis Spunkmeyer cookies, and Texas Twist pretzels. The new Ice Cream Shop had a very successful first season, generating over $60,000 in revenue which accounted for 25% of Food and Beverage sales. The Dreyers single dip ice cream cone was the number one seller in the Food & Beverage department. The Shop presented the guests with a choice of quality snacks items at reasonable prices. The cart locations provided cold Dr Pepper products, and novelty ice cream to our guests at a convenient location. The Lemon Chill cart sold Lemon Chills, Strawberry Chills, and Cherry Chills to cool off our guests. The Dr Pepper cart served cold drinks such as Dr Pepper, Lemonade, RC Cola, and 7 UP to our guests. The park offered a large Professor Frogstein Souvenir cup for $2.00 that allowed guests to buy refills for only $0.50 all summer long. The Food Service department also catered for large groups several times a week. The catering staff grilled hamburgers and hot dogs and also served baked beans, potato salad, chips, and drinks. For the more health conscious, we served fruit, vegetable, and sandwich platters that the Catering staff prepared from fresh ingredients. Once again, the guests were appreciative of our competitive pricing structure that was comparable to most fast food restaurants. The prices allowed guests to enjoy a hot meal and a variety of snacks while sticking to their budgets. All sales tax was also included into the food and beverage prices as a service to our guests. Gift Shop The Gift Shop provided NRH20 guests with a large assortment of useful products, toys, clothing, and candy. The guests protected themselves from the sun with Banana Boat suntan lotion, Regency sun glasses, colorful hats, and an assortment of fashionable coverups. Several new t-shirts bearing the NRH20 logo were introduced this season including adorable embroidered suns and lots of frogs. "Bob the Fish" was the Gift Shop's mascot this season as well as a popular clothing item. The Shop sold "Bob the Fish" hats, shirts, and shorts. A real live Bob even resided on the Gift Shop's back display counter. Charming Shark Jewelry, candy, and the various toys were very popular with the pre-teens and younger. The Gift Shop also carried colorful clothes for children 6 months to 3 years which included swimsuits, t-shirts, hats, sun dresses, and swim diapers. NRH20's Gift Shop generated $79,136.09 in revenue for the park, outperforming the projected sales. 8 ~ ~ · , ~ · · · · · · , · · · · · · · · · 0- · · · · · · · · · · · · · · · · .. .. · .. .o1IIIíõ:::. Gift Shop Sal..1995 to 1996 $82,500 $80,000 $77,500 $75,000 $72,500 $70,000 $87,500 $85,000 $82,500 $80,000 $57,500 $55,000 $52,500 $50,000 $047,500 ! $045,000 ~ $042,500 ~ $(0,000 ~ 137,500 $35,000 $32,500 $30,000 $27,500 $25,000 $22,500 $20,000 $17,500 515,000 512,500 510,000 57 ,500 $5,000 $2,500 $0 1995 1* V.a, The number one seller in the Gift Shop for the second year in a row was the Big Squirt. The park sold 5,711 Big Squirts at $4.99 a piece. The Big Squirt is a water toy that kids refill at the Big Squirt fill station and use to cool themselves and their friends off during the summer heat. The Big Squirt was also given as the party favor for the Birthday Boy or Girl at the birthday parties. The second best seller again this season was candy. The Gift Shop sold every kind of candy from Hersheys and M & Ms, to Super Rope and Lollipops. The branded candy was the most popular, but the younger guests still enjoyed all the novelty candy such as the Aquarium and Gummy Alligators. Inner Tube Rentals Forty-eight inch inner tubes were rented to our guests by the Tube Rentals team for $3.00 plus a $1.00 deposit. The tubes could be used in the Endless River, the Wave Pool, and the new Two Person Tube Slide for single riders. Tube rentals generated $102,664.11 for the park. To protect our guests from having their tube stolen, we utilized the wrist band system that is used by many water parks. A guest is given a wrist band when they rent the tube. Only the guests wearing the wrist bands were allowed to have the tubes in the park. If their tube was taken or misplaced, the guest with the wrist band could simply return to the Tube Building for another tube. This system gave the guest the freedom to leave their tube and not have to worry about losing it. 9 Locker Rentals NRH20's lockers were located next to the Ice Cream Shop. The guests rented the lockers from a window in the Gift Shop. The park rents keys to the lockers for $2.00 plus a $1.00 deposit. This system allows the guest to get into their locker as many times as they like during the day. The lockers are generally large enough to store an entire family's belongings. Locker Rentals generated $32,158.66 in revenue for the park. An attendant is posted in the locker area to keep it clean as well as protect the guest property. Team Performance and Benefits Our entire team received a 4.72 out of a possible 5 as a guest service score. Our seasonal team members, a vastly important section of our team, continues to be pivotal in the success of NRH20. Although there are several contributing factors to the success of the park, the most noteworthy is our seasonal team members. The 225 plus seasonal team members came into contact with many more guests than any supervisory personnel could hope to contact. This presents us with many opportunities to either exceed the guests' expectations or not reach that level. That is why our seasonal team is so important. Currently we provided our exceptional team members with discounts to area attractions, free admission to NRH20, a trade-out with Mountasia, a dive-in movie just for them and both softball and basketball athletic leagues throughout the summer. These incentive programs encourage team building and reward outstanding team member performers. Financial Performance NRH20 revenue's exceeded $1.9 million during Fiscal 95-96. Admission revenues increased by $179,225 and Gift Shop revenue increased by $29,376 from Fiscal 94-95. The admission increase correlates with the increase in attendance. The attendance in 1995 was 185,375 and in 1996 the attendance rose to 222,986. The increase in Gift Shop revenue correlates to increased product lines and a better display of the merchandi~~. The remainder of the on-park spending areas actually saw a decrease in revenue. With an increase in season pass sales and the poor weather experienced during the 1996 season, this is not totally unexpected. Our expenses including depreciation ($275,989), indirect costs transfer to the general fund ($72,635) and computer allocation expense transfer to general fund ($68,595) totaled $1.8 million. This has shown that even with a poor weather season, NRH20 will at the minimum, cover the operating expenses. Survey Results Survey results for the 1996 season were very positive. The surveys are not only a good tool to find out how the guest feels about the park, but also how long the guest stayed, how many people where in their party, where the guest was from and other helpful information. A total of 1,460 surveys were completed for the 1996 season, which is up by 460 surveys from the 1995 season. Below is the survey question followed by the average answers. The scale runs from 1.0 to 5.0, with 5.0 being the highest possible rating. 10 ~ ~ 4 4 4 · · , · · t · t t · · · · 0- · · · · · · · · · · · .. .. .. .. .. .. .. .. .. -- ::r- How many hours did yOU stay today? 4.80 The length of stay is up from 4.56 to 4.80. This is a good trend since the longer people are in the park, the more opportunity there is that the guest will spend more money. One of the reasons for the increase in the length of stay was allowing coolers in the park. How many people came with you? 5.10 This number is also up from the 1995 season from 4.04 to 5.10. This is also an excellent trend in that it too, creates more revenue opportunities with more guests in the park. How many times have yOU visited NRH20? 4.80 This question was added to the survey for the 1996 season so there is no previous data to compare the 1996 average. How would yOU rate NRH20's attractions and facilities? 4.43 This average is up from the 1995 season from 4.26 to 4.43. This increase can be attributed to the addition of the new two person inner tube slide and the increase in the amount of shade. Both of these additions were a results of guest comments from the 1995 season. How would yOU rate NRH20's guest service and courtesv? 4.72 This is an increase from 4.62 in 1995 to 4.72 in 1996. This is a positive reflection on the job NRH20 has done to make sure the guest has a great experience at the park. The addition of Professor Frogstein and the "Elements of Fun", allowing coolers in the park and the commitment of the park staff for being responsive to guest's needs were the factors in this increase. How would yOU rate NRH20's Quality of concessions? 4.39 This was one of the larger positive increases from the 1995 season which saw a jump from 3.67 to 4.39. This increase can be attributed to faster food lines and more proactive position by the revenue to staff to ensure guest satisfaction. What radio station do yOU listen to? For the second year in a row, KISS 106.1 FM was ranked number one by the park's guests. KL TY 94.1 FM finished second. How did yOU find out about NRH20? Word of mouth was the number õne answer for a second year. This reflects the positive responses in the question "How would you rank NRH20's guest service and courtesy?". Live nearby was second followed by TV, radio, newspaper, drive by and billboards. 11 How did vou find NRH20's concession pricinq? Expensive - 13.5% Inexpensive 5.6% Reasonable 49.6% Not Answered 31.3% How did YOU find NRH?O's admission pricinq? Expensive 8.8% Inexpensive 16.7% Reasonable 74.0% Not Answered 0.5% Who's idea was it to visit NRH20? Mom 27.5% Kids 26.4% Friends 14.3% Other 12.5% Family 10.6% Dad 8.7% For the second consecutive year, mother and children were the top two answers. However, for the 1996 season mother's finished ahead of children, albeit just barely. This reinforces the trend for the park to advertise primarily to mothers and children. Where are YOU from? North Richland Hills was the number one answer for the second season. However, the percentage of guests from North Richland Hills was down from 38.6% to 29.2%. One reason for the decrease is from the enforcement of the resident identification card. Last season, many non-North Richland Hills residents were being deceptive about their true residence in order to get a discounted rate. The resident identification card helped decrease this deception and preserve the integrity of our discount for residents of North Richland Hills. Will YOU recommend NRH20 to a friend? Yes 99.4% - No 00.6% Though it seemed after the 1995 season that it would be impossible to beat a "Yes" answer percentage of 97.1 %, 1996 proved that wrong with a "Yes" answer percentage of 99.4%! Will YOU revisit NRH~O? Yes 99.3% No do. 7% 12 · · · · t)I · · · · · · · · · · · · · · · · 0- · · · · · · · · · · · · · · · · ... · · · -- Again it seemed impossible to beat the 97% rating in 1995, but this season has proven that wrong as well with a 1996 rating of 99.3%. Many of the "No" responses were due to the fact the guest did not either live in the area or was moving from the Metroplex. 1997 Recommendations We have carefully evaluated guest comments and feedback as we examined improvements or changes in operation and facilities for the 1997 season. A new attraction was added for the 1996 season as well as additional shaded areas and the entertainment element of Professor Frogstein and the Elements of Fun. Our guests responded favorably to those. For the 1997 season, no major attractions are being suggested but refinements in capital projects and an alternative tube use policy are being recommended. The changes are consistent with guest feedback. Alternative Inner-Tube Use Policy In an effort to better meet our guests' needs, we have investigated offering free tubes to our guests every day. We would place tubes at the Endless River and the Wave Pool for our guests to use. The tubes would stay in their own designated area so we can safely control the number of tubes out at one time. This change would enable us to better reach our per capita spending goals, offering something new for 1997 and lower labor costs by reducing the staffing necessary to rent tubes. It would also meet the needs and requests of our guests by not requiring them to rent tubes once in the park. We received several survey cards indicating our guest's willingness to pay a higher admission charge in exchange for complimentary tubes. Implementing this program would net a positive revenue gain for the park. This can be accomplished by increasing all general admission prices $1.00 for the 1997 season and, in ~ 998 consider a corresponding season pass adjustment for this purpose based on the number of average visits made to NRH20 per season pass. Currently, season pass holders visit NRH20 an average of 8.3 times per season. Over 90% of our guests find our admission prices "inexpensive" or "reasonable" in their survey responses. As mentioned above, in 1997 we added a new attraction, the double inner-tube ride, without a price increase. Generally speaking, when a new attraction is added to our facility a corresponding price increase is expected. The "added value" for our guests is that for an additional dollar for admission, all guests get to use a $3.00 inner-tube for the price of general admission. Note: NRH20 can only afford this new policy if the prices on all daily admission tickets are raised $1.00 for the 1997 season. Giving away free tubes without raising the ticket prices will not allow us to reach our overall financial goals. 13 Capital Improvements - Maintenance/lnfrastructure The following facility enhancements are designed to maintain our current facilities and expand the guests' enjoyment experience. 1. Picnic Area Expansion Shaded picnic seating is at a premium within the park. With an increase in group sales, the pavilion is utilized more and more as a reserved area. A definite need exists for more shaded picnic areas. We have identified an area that is able to be used as a natural shaded area. The use of natural shade allows us to utilize a larger area without the initial added expense of building shade structures. This area is located by the wave pool on the Mountasia side of the property. The Parks Department Is grubbing and clearing the area for use and if enhancement plans are approved, the fence will be moved outside the picnic area. Semi-permanent walkways will be added and picnic tables, located in clusters of varying sizes, will be distributed throughout the area. Future expansion in this area may entail small permanent shade structures and permanent walkways. 2. Drainaqe Improvements With the poor weather and high attendance at NRH20, site drainage has become a major concern. We lost approximately 2.5 days of operation due to the flooding of our pools, specifically the Endless River. Lost revenues were estimated at $50,000 due to the flooding. We still incurred a large labor expense because the team had to clean the park and the pools instead of operating them. We are proposing additional drainage in conjunction with grading adjustments to better manage rainwater during major storms. Other site drainage, located at strategic locations, will minimize the swampy areas located along our walkways. Picnic area and drainage improvements are estimated at $65,000 and are suggested to be funded from reserve for infrastructure improvements. Capital Equipment - Purchases 1. Security System In an effort to improve cash procedures and safety, it is recommended that a security system be installed covering all cash handling areas at NRH20. The proposed system will consist of video surveillance cameras, both obvious and hidden, and will monitor the cash registers throughout NRH20. The camera signals will be sent to a central location where a videotaped record will be made. This system will provide additional safeguards to prevent employee theft. 14 - ~ ~ · · ". · · · · · · I} · I} · .. .. .. .. .. .. ~ .. .. .. .. .. .. .. .. .. .. .. .. · · · .. 0- · · · 2. SchedulinQ/Labor Updatinq TrackinQ System NRH20 has approximately 250 seasonal hourly team members. A need exists that is not supported by the current payroll system. Currently, park management received labor reports from Accounting/Finance on approximately the 15th of each month. These reports cover the previous month's expenses, including labor. Given our relatively short operating season, (approximately 92 days) the need for more timely labor reporting exists. It is recommended that a labor tracking and control system be purchased to interface with the existing or modified payroll system that will allow more timely access to information. The information will be utilized to exercise better controls over the outflow of labor dollars. Waterpark staff is currently monitoring the development of the City's progress towards the updating of the payroll system, and proposes to purchase a system that will integrate seamlessly. The two capital equipment purchases are estimated to cost $20,000 and be funded by the Aquatic Park Operating Budget and Information Services Fund. 15 CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Council Meeting Date: 12/16/96 Subject: Approval for the Development Plan for the City Park Agenda Number: GN 96-152 As requested by the City Council, the Parks and Recreation Board conducted a public meeting on November 21, 1996, to solicit citizen input for the proposed development of the City Park. At this meeting, the proposed Development Plan was presented and an opportunity was provided for the public to ask questions and offer suggestions to staff and the Parks and Recreation Board. After a thorough review and discussion of the input received during this public meeting, a revised Development Plan was prepared. This plan addresses our citizen's comments and suggestions in the following ways: · Reduces the total number of youth baseball fields from six to four, and appropriately allows for the construction of 280 spaces in this phase of development. (The additional parking spaces are not necessary until the future Recreation Center is constructed. ) · Incorporates community open play space as requested by adjacent homeowners. · Addition of large pavilion near Adventure World and additional covered picnic areas, as requested by City Council during initial review. · Relocates the playground from the center of the baseball fields and closer to the open play space, additional covered picnic areas, and hike and bike trail. · Relocates the future access drive on the east side of the proposed Recreation Center further to the west to preserve additional open space and provide additional buffer space to the existing residence. · Adds a self contained equestrian trail within the park with trail heads located at the north end of the parking lot, north property line west of the Londonderry subdivision, and at the south property line at the turn of Douglas Lane. This trail loops within the park and provides for connections to the north for possible future linkage to the equestrian trail being developed as a part of the Little Bear Creek ISTEA grant project. Finance Review Source of Funds: Acct. Number Bonds (GO/Rev,) Sufficient Funds Available Operating Budget _ Other _ - ~~;a~atJi ']v (':4 ¥'¿ ~ager CITY COUNCIL ACTION ITEM Finance Director Page 1 of 2.. ~ CITY OF NORTH RICHLAND HILLS A traffic engineering study is currently underway, as part of the ongoing development design process, to determine recommendations for appropriately improving Douglas Lane and suggesting the optimal entry points for parking. Upon completion of the study, Park Staff will coordinate with Public Works Staff to evaluate timing the proposed improvements to Douglas Lane concurrent with park development and provide funding recommendations for Council consideration. On December 9, the Parks and Recreation Board met to review proposed revision to the development plan. Several citizens representing various interests were in attendance. The Parks and Recreation Board recommends this revised Development Plan for the City Park site, showing sensitivity to the needs of all affected groups, and best serving the overall interests of the entire City of North Richland Hills. Should the City Council concur with this revised plan, staff will work quickly to complete the Texas Parks and Wildlife Grant Application for the January 31, 1997 submittal. RECOMMENDATIONS: It is recommended that City Council approve the development plan for the City Park. Attachments Page 2 of z.. « 8 ~ g, ~ ï: ..J ~ I- ~ ~ f \I) ~ "'- ~ h UJ «..J ù _ ~ ~~ « Q!!! z -0 ~1: 1: ~ \I) ~~ ~~ « ~~ ~~ ..Jo ..J..J -;i ~ù I ~ õ .... c \) O'IE C \) Ëti. La.. .8~ i UJ ~ ~ f Q !~ ~~ ~~ Q..J «0- III 6"1: h f ~ .,. _') +.. 'v\).t ; if¡ ~ ú) g' ti 1- .':- :-'II in Q' - _J.£ :t g ~ ~ ~~ ;0 9 III - II' Q (! \) Q' ( r \) l(i , 1:1, n~ .R c 0')l.ø ILlto L «IL ~ \) I- -a.s ~ \1))-.0 01-= 1: -:t: \)1} o Wit 6 :) - ..I: -a.s \) ~ \)«~ \) ,,:5 C V L °OQ \) -"2. t3 ~ ~ 1-, ~ In ~h ¡j - t.J! ~ ~I ~ i i ih 11 - Thursday, December 12, 1996 (hr. (hi 1/ -í"horl\t.o...., Mr. Jim Brown NRH Parks & Recreation The Londonderry Homeowner's Association was very pleased with the revised park plans presented on Monday evening. The removal of the two "future" baseball fields, located on the north side of the complex, relieved a number of our members. We appreciate that you took our concerns seriously. . The addition of the equestrian trails also greatly pleased many of our neighbors to the north. Additional picnic areas will be appreciated, especially near Adventure World, and thefamilies in Londonderry were pleased to hear that you are addressing these needs. Thank you very much for listening, e 12/11/96 WED 11:46 FAX 8179635~31 SDT CPI ~002 7121 Dou¡las Lane N. Richland Hills. TX 76180 - December II, 1996 City Council City of North Rich/and Hills RE: J 00 Acre Park DesignlEquestrian Interest 1 am glad to live in a city that has the vision to plan for future park development. The land which was purchased in 1992 is an e~cellent location with unique environmental and habitat characteristics which will make for a wonderful park for our community. There is a large group of avid equestrians that live in our city and the majority happen to live in the neighborhood sUlTounding this parle site. It would have been quite an oversight to c1tc1ude eq~trian trails from the park design. After reviewing the new proposed conceptua) park design at the Park Board workshop held OD 1219/96, it was apparent that: the equC$trÏan interest.. had been met. It was Dice to see how the public system can worle when a session is held for community input and then tbat information is reviewed. analyzed and acted upon. The Park Board members and staff of the Parks and Recreation Department have certainly responded to the equestrian interests presented at the review session. We are glad to see the inclusion of equestrian trails around the perimeter of the park site, /:IS well as the promise to further plll1'ue access to Little Bear Creek where additional trails would be available for riding intetests. I believe the new proposed equestrian trail design in the 100 acre park site provides over 60 minutes of riding activity, good safety measures with the other user activities and helps prevent horse and traffic congestion on city streets. We appreciate the opportunity to be included in the design stages of this park. I plan to keep in COt'ltact with our group so we will stay involved in the park activities, including maintenance and developl'l1ent needs fOf the equestrian interest. Many of us have enjoyed the natural beauty of this site for yean and are glad we will have the opportUnity to work together with the other interest groups to make this site a truly unique and recreational enjoyment for our city. Sincerely. ~:I?Y /. ~ Peggy L. Smith cc: NRH Park Board NRH Parks and Recreaiion O¢partment . . . De.c.e.mbe.'L 11, 1996 ].-Lm B-'Lown Pa..'Lh.-6 (; Re.c.'Le.a.UO/1.. ßoa..'Ld No~~ R~c.~~a../1..d H~~, T~ ],Lm: RY A -L-6 e.x,;t~UU11e.~y p.{!..e.a.-6e.d wu~ :t.~e. ne.w pa..'Lh. c.onc.e.p:t. P-'Lopo-6e.d on Dou.gta.-6 D-'L. A-6 RYA g'LOW-6 we. wu~ be. nQ...e.d~ng mo-'Le. Ba.-6e.b~ a.nd Foo~b~ Fa..~~e.-6 a..nd we. a..'Le. ha..ppy :t.~ ~~e. C.uy .-L-6 h.e.e.p.-Lng I..U> -t.n m.-Lnd. RYA ~ooh.-6 ~o-'Lwa..'Ld ~o ha..v.-Lng ne.w ~.-L~d-6 ~o p~a..y on a.nd ~hÆ ~ ou.'L ne.w ~.-L~d-6 w-LU ~~p w.u~ ~~e. ove.'L cAowd.-Lng cz..;t R.-Lc.h-6.-L~d Pa..'Lh... Tha..nh.. You., /Y~ Ra..ndy Cu.pp p-'Le.-6.-Lde.n:t. RYA 1997 R YA. * :P.O. Box 820571 * Fort Worth, Texas 76118-0571 December 11, 1996 Jim Browne Director of Parks and Recreation City of North Richland Hills 6720 NE Loop 820 North Richland Hills, TX. 76180 Dear Jim, I, Glenn Nerwin, attended the Parks Board Workshop on Monday, December 9th to review the revised plan for the 100 acre site. I have shared copies of the revised plan with a few of the volunteer groups currently participating in this project. I am pleased to report that once again these groups approve of the revised concept plan and also offer their support and assistance in future projects and detailed management of this great natural resource. Respectfully, Native Prairies Association of Texas ~<w~ Native Plant Society of Texas, Ft. Worth C Society for Ecological Restoration ~M~ Ft. W,¡¡;:a:r . . . Dec, 11, 1996 Jim Browne NRH Parks And Recreation Dept. Jim, Just wanted to drop you a note in support of the revised plans for the 100 acre site across the street £Tom my house, I think that the reyisions will meet the needs of both the RY A folks and the horse people. In talking to some of my neighbors, they seem to agree that the plans have merit and will meet the needs of the largest amount of people in the city. We need to preserve some of what NRH was when I moved here a decade ago, While I am by no means an environmentalist, the site is a welcome change £Tom the normal It golf course without holes It type of park concept. With Adventure Wodd at the entrance, this looks like the kind of place people will want to spend the day at. Once again thanks for the good work and although I know it hasn't been easy, it will be worth it. I know that my family certainly feelSÖ~ am:~;- ~_ Rick and Kathryn Oestricher 7708 Aubrey Lane NRH, 76180 ~ . N®RTH RICHLAND H ILL S December 10, 1996 CJmmunlty Services Department Kathy Graves President Londonderry Homeowners Association 7305 Londonderry North Richland Hills, TX 76180 Dear Ms. Graves: Thank you for your comments, input and suggestions regarding the proposed development of the 100 Acre City Park. The plan has been modified based on feedback received during the public meeting, held November 21, and evaluation and reconsideration by the Park and Recreation Board at their workshop on December 9, 1996. . The City Council will be considering the revised plan, as approved by the Park and Recreation Board, next Monday. You are invited to attend the City Council meeting which will be held on Monday, December 16, at 7:30 p.m. in the Council Chambers. Should you need any additional ioformation, or if we can answer any further questions, please do not hesitate to call my office at 581-5761. Thank you for your support and involvement in this design process. Sincerely, ~~ Jim Browne Director Parks & Recreation Department JB/cal:al0597 .6720 N,E, Loop 820 North Richland HII:s, Texas 76130-7901 USA (817) 581-5761 FAX (817) 581.5722 N@RTH RICHLAND H ILL S Community Services Dep.:¡rtment 6720 NE, Loop 820 December 10, 1996 Randy Cupp President Richland Youth Association 1541 Lost Lake Drive Keller, TX 76248 Dear Mr. Cupp: Thank you for your comments, input and suggestions regarding the proposed development of the 100 Acre City Park. The plan has been modified based on feedback received during the public meeting, held November 21, and evaluation and reconsideration by the Park and Recreation Board at their workshop on December 9, 1996. The City Council will be considering the revised plan, as approved by the Park and Recreation Board, next Monday. You are invited to attend the City Council meeting which will be held on Monday, December 16, at 7:30 p.m. in the Council Chambers. Should you need any additional information, or if we can answer any further questions, please do not hesitate to call my office at 581-5761. Thank you for your support and involvement in this design process. Sincerely, ~~ Jim Browne Director Parks & Recreation Department JB/cal:aI0597 North Richland HiJ:s, Texas 76180-7901 USA (817) 581-5761 FAX (817) 531-5722 . N®RTH RICHLAND H ILL 5 December 10, 1996 C,)mmUr1lty Services Department Peggy Smith Equestrian Interest Representative 7121 Douglas Lane North Richland Hills, TX 76180 Dear Ms. Smith: Thank you for your comments, input and suggestions regarding the proposed development of the 100 Acre City Park. The plan has been modified based on feedback received during the public meeting, held November 21, and evaluation and reconsideration by the Park and Recreation Board at their workshop on December 9, 1996. . The City Council will be considering the revised plan, as approved by the Park and Recreation Board, next Monday. You are invited to attend the City Council meeting which will be held on Monday, December 16, at 7:30 p.m. in the Council Chambers. Should you need any additional information, or if we can answer any further questions, please do not hesitate to call my office at 581-5761. Thank you for your support and involvement in this design process. Sincerely, ~i::.~~ ~ Jim Browne Director Parks & Recreation Department JB/cal:aI0597 .6720 N,E, Loop 820 North Richland Hil:s, Texas 76180-7901 USA (817) 581-5761 FAX (817) 581-5722 N®RTH RICH lAND HIll S Community Services Department 6720 N,E, Loop 820 .. December 10, 1996 Glenn Nerwin Natural Area Preservation Representative 7724 Aubrey Lane North Richland Hills, TX 76180 Dear Mr. Nerwin: Thank you for your comments, input and suggestions regarding the proposed development of the 100 Acre City Park. The plan has been modified based on feedback received during the public meeting, held November 21 and evaluation and reconsideration by the Park and Recreation Board at their workshop on December 9, 1996. The City Council will be considering the revised plan, as approved by the' Park and Recreation Board, next Monday. You are invited to attend the City Council meeting which will be held on Monday, December 16, at 7:30 p.m. in the Council Chambers. Should you need any additional information, or if we can answer any further questions, please do not hesitate to call my office at 581-5761. Thank you for your support and involvement in this design process. Sincerely, ~~~ .-.- Jim Browne Director Parks & Recreation Department JB/ca/:a/0597 North Richland Hil:s, Texas 76180-7901 USA (817) 581-5761 FAX (817) 581-5722 CITY OF NORTH RICHLAND HILLS . Department: Administration Council Meeting Date: 12/16/96 Subject: General Municipal Employee Compensation t-'Ian MarKet AOJustment Agenda Number: GN 96-153 As a provision of the new Employee Compensation Plan approved by the City Council in conjunction with the 96/97 Operating Budget, staff was to conduct a market analysis of selected benchmark positions within the City. For the purposes of this analysis, eighteen (18) positions were selected as benchmark positions. Of these, twelve were General Municipal positions such as Secretary, Maintenance Worker, Dispatcher, Crewleader and Librarian and six were Appointed Staff positions such as Accountant, Street Superintendent and Parks Superintendent. The Employee Compensation Plan was established to provide employees fair compensation and remain competitive with other area cities as well as comparable private sector employment opportunities. The market analysis compared the selected positions pay ranges with like positions in other area cities. The analysis evaluated the percentage change between the 60th Percentile Range for 1995 and 1996. The average of this percentage change is 1.09%. The second factor in the market analysis was the percentage change in the Consumer Price Index (C.P.I.) for the D/FW area from October 1995 to October 1996. The C.P.I. for this period was 2.7%. ased on these two figures, we are proposing the following weighted formula for the recommended ~adjustment to the Employee Compensation Plan: Percentaae Cateaorv Multiolier Value 60% Market Change X 1.09 .654 40% C.P.I. X 2.7 1.08 Combined Value 1.734% The City Manager is recommending that this be rounded to 1.75%. This market evaluation did not indude sworn Police and Fire personnel due to the implementation of a separate Public Safety Compensation Plan that became effective October, 1996. Sufficient funds were approved in the 96/97 Operating Budget. Recommendation: It is recommended that the City Council approve a 1.75% market adjustment increase to the General Municipal Employee Compensation Plan. Finance Review Source of Funds: Bonds (GO/Rev.) __ Operating Budget _ Other _ ~~~ Departme ead Signature CnYCOUNC~ACnON"EM Acct. Number Sufficient Funds Available ~~ (?/I ~yf¡/'/Jh- v City Manager Finance Director Page 1 of I' . CITY OF NORTH RICHLAND HILLS Department: Finance / Police Department 12/16/96 Council Meeting Date: Subject: Award Bid for Office Furniture Agenda Number: PU 96-96 As part of the Crime Control District approved budget, Council appropriated funds for the purchase of office furniture. Formal bids were solicited and the results are outlined below. Texas Furniture Source '$.S:"":"',:'::~~a"',":2;:""I" ': . .,'"... ......:....:.t................~ BT Miller Office Products $6,115 $6,156 $6,948 Office Interiors America Royer & Schutts This furniture is needed for the additional employees hired as part of the Crime Control District plan. Texas Furniture Source met all the specifications and general conditions of the bid and can deliver the furniture within 30 days. Recommendation: It is recommended City Council award the bid for office furniture to Texas Furniture Source in the amount of $5,827. Source of Funds: Bonds (GO/Rev.) Operating Budget .-X Othe Finance Review Acct. Number 28-80-02-2450 Sufficient Funds Available ~/~ C4¥c(~ Department Head Signature i y Manager CITY COUNCIL ACTION ITEM FI.....ce D....ctor Page 1 of . t . ¡' CITY OF NORTH RICHLAND HILLS I . Department: Finance /Information Services Council Meeting Date: 12/16/96 Subject: Award Annual Contract for Computer Hardware Maintenance Agenda Number: PU 96-97 As part of the 1996/97 approved budget, Council appropriated funds for computer hardware maintenance. Request for Proposals were solicited for an annual contract for this service. Proposals were submitted by IBM, Decision One and The Fortel Group. The proposals were reviewed against the evaluation criteria specified in the RFP. The Fortel Group submitted the proposal that will best meet the needs of the City at this time, and they also had the lowest annual cost. The attached spreadsheet shows the amounts submitted by each vendor for this maintenance. Recommendation: It is recommended City Council award the annual computer hardware maintenance contract to The Fortel Group. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget -X.. Ot~ _ eQ~e ?fJv. . CITY COUNCIL ACTION EM Acct. Number 16-01-03-3446 Sufficient Funds Available Page 1 of . .. . Information Services Hardware Maintenance Bid Results November 22,1996 Vendor Monthly Price % Discount for Annual Payment Discounted Monthly Price Discounted Annual Price . Decision One $ 1,973.83 5 $1,875.14 $ 22, 501.56 IBM $ 3,119.48 2 $ 3,057.09 $ 36,685.09 . CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Council Meeting Date: 12/16/96 Subject: Award Bid for Construction of a Metal Canopy Agenda Number: PU 96-98 As part of the 1996/97 approved budget, Council appropriated funds for the construction of a metal canopy to be installed over the liquefied petroleum gas storage tanks located at the Equipment Services facility. Formal bids were solicited and the results are outlined below. Team Design ~z:¡~:~n ~:...::::t:~~;~(.~~~ KB. Alexander & Company $8,787 The canopy will provide weather protection for employees when fueling vehicles. Team Design met all the specifications and general conditions of the bid and can complete the project within 60 days. Recommendation: It is recommended City Council award the bid for the construction and installation of a metal canopy to Team Design in the amount of $7,179. Finance Review Source of Funds: Acct. Number 06-01-02-6200 Bonds (GO/Rev.) Sufficient Funds Available Operating Budget -X.. :J ~_ __ 1./ Other ~AU~ ?~ Department ~ignature Manager CITY COUNCIL ACTION "EM Finance Director Page 1 of CITY OF NORTH RICHLAND HILLS Support Services Department: ebJect: City Hall Renovation Change Order 12/16/96 Council Meeting Date: Agenda Number: PU 96-99 During the renovation of the Finance Department area of City Hall it was determined by City Staff that additional work was needed to improve the operation of the department and to make this area consistent with the remainder of City Hall. This work includes the replacement of deteriorated ceiling tiles to match the remainder of the building, additional electrical repairs and office modifications. A change order for $6,903 has been submitted by K B. Alexander & Company bringing the cost of the renovation to $42,503. The new cost of $42,503 is still within the 1996/97 approved budget for the project. Recommendation: It is recommended City Council approve the change order to K B. Alexander & Company in the amount of $6,903. - Finance Review Source of Funds: Bonds (GO/Rev.) ~p.ratlng Budgat ~ ~th.r ~ J) ;¿¡) Acct. Number œ-01-O?~?OO Sufficient Funds Available ~~~."_.._. Department Head Signature City ager CITY COUNCIL ACTION ITEM /'2~./ Pace 1 of .. ~ CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Council Meeting Date: 12/16/96 Subject: Request from Classic Chevrolet to Withdraw Bid Agenda Number: PU 96-100 In the 1996/97 approved budget Council appropriated funds for the purchase of 1997 vehicles. Formal bids were solicited for these replacement vehicles, and the bids were opened November 21, 1996. During the evaluation process Classic Chevrolet discovered an error in their bid for the tandem dump trucks. They have requested to be allowed to officially withdraw the bid for the dump trucks (see attached letter). Recommendation: It is recommended City Council approve the request from Classic Chevrolet to withdraw their bid for two tandem dump trucks. Finance Review Source of Funds: Bonds (GO/Rev.) Operating Budget _ Other Acct. Number Sufficient Funds Available ~~ _œOn_ ~C~ Ignature City Mager CITY COUNCIL ACTION ITEM Page 1 of 'Z)~LET~ 'I1Ie. . GEO . JEEP . EAGL.~ '909 HWY 377 GRANBURY, TEXAS ~6049 &fYJ ~¡,U af/' /II- : J)t7ì1/U ~ I /, ~ t-/9 b IJ~ ~t~~~~&i; éh'd~~1 j~~#'ft;;b7/- ~ Gi} t~~d/ ~'-'øvÞ . ~ NOV 22 '96 10:30 . . e M~ JJ~/~ (JL Granb~:57~881 · Fl Worth: 443-3700 · WattS: 800-299-3700 "'* TOTRL PAGE.001 >1<* PAGE.001 CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Council Meeting Date: 12/16/96 Subject: Award Bid for 1997 Vehicles Agenda Number: PU 96-101 As part of the 1996/97 approved budget, Council appropriated funds for the purchase of 1997 vehicles. Formal bids were solicited for various vehicles and the results are outlined on the attached spreadsheet. The bid submitted by Classic Chevrolet for the seven Police Tahoes, Item B, did not meet the minimum specifications. The bid submitted by Five Star Ford for one Tahoe, Item C, also did not meet the minimum specifications. Because of the request from Classic Chevrolet to withdraw their bid for the two tandem dump trucks, Graff Chevrolet is low bidder meeting specifications on Item G. Allen Samuels Dodge, Classic Chevrolet and Graff Chevrolet met the minimum specifications and general conditions of the bid for the items recommended below. Fundina Source: 28-80-03-6600 $ 54,150 279.284 $333,434 06-01-03-6600 Recommendation: It is recommended City Council award the bid for three Intrepids to Allen Samuels Dodge in the amount of $54,150; award the bid for two tandem dump trucks to Graff Chevrolet in the amount of $109,434; and award the bid for one Tahoe, four C1500 and three C2500 pickups, and one cab & chassis to Classic Chevrolet in the amount of $169,850 for a total amount of $333,434. It is also recommended City Council reject the bid for the seven Police Tahoes and authorize Staff to re-bid these vehicles. Finance Review Source of Funds: Acct. Number See Above Bonds (GO/Rev.) Sufficient Funds Available LUd9~ ~~ -: agepartme~~~re ~ CITY COUNCIL ACTION ITEM Finan.. Director Page 1 of . . . <D m - ...... ~ ...... ...... "'"" 0) CD I CD 0) :u: c ED tJ) W ..J 2 J: W > ,.... 0) 0) "'"" .... co --c en.... Q) 0 >LL ü: en Q) ::3Q) E CO-c eno c:O Q) « ~> ~Q) "<3 C) .... ::3 . .o~ .- .!: 'gu J: o . .- > ~Q) co.!: Uu z o ..... 0- c::: u en w o õ o o Lõ~~ M - en 0 o 2 z <D ::3 W co ..... :g m o z o o LO <D I'-- ~- L() w o o C\I CD CD ~ LO W « z ~ ::J ....J M « -c m o z :g m o z :g m o z o o o ,... L() C\I o C\I w : w o J: ~ W U ....J o 0- I'-- m o ..... 0 o 0 ~~o M .... 0 LO ~ m <D 0 Ö C\I - I'-- W ~w w o 0 o 0 -ccD_o _<D'-'~ en~J:1'-- o CD- 0 M- L() LO LO C\I ~w~w LL LL : :g m o z 000 000 N ~ ('t) ~C\I~C\I~ M-<DÖ<D~- I'--....J<D....JC\I w~w~w m m :g m o z o o <D CD m CD C\I W w o J: ~ ...... u :g m o z o o <D LO o LO- <D W ~ U ::J c::: ..... o o LO ...... U ~ o :g m o Z o o I'-- m CD I'-- L() W ~ U ::J c::: ..... o o LO C\I U M w :g m o 0 LOZ M I LL :g m o Z o o ex> M LO M C\I W o o ~ C\I CD M C\I W o o cD M LO C\I ,... ...... w c: ~ co .... -c .!: ~ ~ m en en en « J: u - m « u ~ U ::J c::: ..... 0- ~ ::J C C\I ...... LL ø o (:) ~ M ~ M M M * o e d 10 "'"" .,¡- 10 * o o ~ M ~ 0)- e "'"" * o e d 10 co or CD "'"" * ..J ~ o ..... en c: o ~ 1+= 'õ Q) Q. en - Q) Q) ~ - o Z :g o : CITY OF NORTH RICHLAND HILLS Department: Finance / Support Services Council Meeting Date: 12/16/96 Subject: Award Bid for City Hall Light Fixture Replacement Agenda Number: PU 96-102 Formal bids were solicited for the replacement of 161 fixtures and bulbs located throughout City Hall. The results are outlined below. Zachry Electrical Contractors §,,:;~ªªº Dickie Electric $13,090 $13,996 Team Design The present light fixtures are in constant need of repair, so replacement of these fixtures will provide a cost savings as well as a time savings for the Building Services Division. The light fixtures, ballast and bulbs to be installed are all rated energy efficient products. Zachry Electrical Contractors met all the specifications and general conditions of the bid and can complete the project within 21 days. Recommendation: It is recommended City Council award the bid for light fixture replacement to Zachry Electrical Contractors in the amount of $12,830. Finance Review Acet. Number 06-01-02-6200 Sufficient Funds Available Source of Funds: Bonds (GO/Rev.) Operating Budget -1L Other ?t::1:~ ~4.~~ ead Sign ture Manager CITY COUNCIL ACTION ITEM Flnenc:e Dlrectot Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Parks & Recreation Council Meeting Date: 12/16/96 Subject: Award Bid for Closed Circuit TV System for Richland Tennis Center Agenda Number: PU 96-103 As part of the approved move-in budget for the Richland Tennis Center, Council appropriated funds for the purchase and installation of a Closed Circuit TV (CCTV) System. Formal bids were solicited for installation of an eight camera system and the results are outlined below. EBM, Inc. ÎI~iªª Security Link $9,900 EBM, Inc. has done work for the City in the past. They completed the projects within the specified time frame and within the appropriated budget. EBM, Inc. met all the specifications and general conditions of the bid and can deliver and install the system in two weeks. Recommendation: It is recommended City Council award the bid for the Closed Circuit TV system to EBM, Inc. in the amount of $7,693. Finance Review Acct. Number 09-92-49-6000 Sufficient Funds Available Page 1 of CITY OF NORTH RICHLAND HILLS Department: Finance / Parks & Recreation Council Meeting Date: 12/16/96 Subject: Award Bid for Ice Machines for Rir.hl~nci Tennis Center Agenda Number: PU 96-104 As part of the approved move-in budget for the Richland Tennis Center, Council appropriated funds for the purchase ice machines. Formal bids were solicited for three ice machines and the results are outlined below. ISI Commercial Refrigeration i'~f'9.51 ~t:"",:""'"i:,,,: Stephens Equipment Company $7,165 181 Commercial Refrigeration met all the specifications and general conditions of the bid and can deliver and install the ice machines within two weeks. Recommendation: It is recommended City Council award the bid for three ice machines to 181 Commercial Refrigeration in the amount of $6,954. Source of Funds: Bonds (GO/Rev.) Operating Budget _ ther Finance Review Acct. Number 09-92-49-6000 Sufficient Funds Available ~~ (!'/l.~~ e Ci1'y Manager CITY COUNCIL ACTION "EM FlnMce Oireclor Page 1 of CITY OF NORTH RICHLAND HILLS ~partment: - Subject: 12/16/96 Council Meeting Date: Agenda Number: PU 96-105 Support Services Engineering Services for HVAC Upgrade As part of the 1996-97 budget, funding was appropriated for the upgrading of the heating and air conditioning system in the Records and Administration area of the Police Department. The finn of Romine, Romine, and Burgess, Inc. has been selected to prepare the specifications and design drawings for the project. Romine, Romine, and Burgess has successfully worked with the City on other HVAC projects and has agreed to provide all contract documents and construction administration for the fee of $5,500. Recommendation: It is recommended City Council award the contract for engineering services for the Police Department HVAC upgrade to Romine, Romine, and Burgess, Inc. or for the fee of $5,500. Finance Review Source of Funds: Acct. Number œ-01-02-4200 Bonds (GO/Rev.) Sufficient Funds Available Operating Budget ~ ~_ ,/ Other ~~æ :¿~ Department Head Signature Clt anager CITY COUNCIL ACTION ITEM . Finance Director Paoe 1 of CITY OF NORTH RICHLAND HILLS Departmentfinance /Information Services Council Meeting Date: 12/16/96 Subject: Authorize Purchase of Computer Equipment for NRH20 from the Department of Information Resources Agenda Number: PU 96-106 The NRH20 Water Park purchased a turn-key computer system utilizing the Novell network operating system from PacerCats in the spring of 1995. At this time it is necessary to replace the network architecture as PacerCats is no longer supporting the Novell based platform. Hardware and software upgrades will be required for each existing workstation located at the Water Park. These upgrades are available through the cooperative purchasing contract with the State Department of Information Resources. The total cost for these upgrades will be $25,181. The required training may be acquired locally for approximately $2,125. Recommendation: It is recommended City Council authorize the purchase of hardware and software for the computer system upgrade at NRH20 from the Department of Information Resources in the amount of $25,181 and training in the amount of $2,125 for a total amount of $27,306. Finance Review Source of Funds: Acct. Number 16-01-03-6460 Bonds (GO/Rev.) Sufficient Funds Available Operating Budget L ~ \.ß¡ De[~gnature Y-þ ~/I, ~~er CITY COUNCIL ACTION ITEM FlnMCO Director Page 1 of CITY OF NORTH RICHLAND HILLS ~epartment: ~Ubject: Support Services " 12/16/96 _ Council Meeting Date: PU 96-107 Agenda Number. Sewer Truck Repair The high pressure water pump on the Harben sewer cleaning truck used by the Utility Department must be replaced due to normal wear from daily usage. The parts for repairing the pump will cost approximately $6000 and would not have any warranty. Repairing the pump would also require extensive man hours and would increase the down time of the truck. A complete new pump assembly will cost $8340 and will have a two year warranty from the manufacturer. Installing the new pump will allow the sewer truck to be back into service within a week. Recommendation: It is recommended City Council approve the purchase of the new water pump for the amount of $8340. . Finance Review Source of Funds: Bonds (GO/Rev.) .operatl~ ~, Other 12. Z(}/J ø Department Head Signature CITY COUNCIL ACTION ITEM Acct. Number 06-01-03-2950 Sufficient Funds Available ~ S~ City Mana er ~ , Finance Director Page 1 of 1 CITY OF NORTH RICHLAND HILLS Department: Public Works Council Meeting Date: Approve City-Developer Agreement for CIP Water Subject: System Improvements with Sandlin-Barfield Joint Venture Agenda Number: for the Thornbridge Estates III Addition 12/16/96 PW 96-52 Sandlin-Barfield Joint Venture (Developer) is ready to install the water and sanitary sewer lines which will serve the Thornbridge Estates III Addition. The 10" water line (P8230) and the 10" sanitary sewer lines (L-10-2 and L-10-3) are included in the Water and Wastewater Impact Fee Study (Study) dated May 4, 1990 by Knowlton-English-Flowers, Inc. The improvements as outlined in the Study are eligible for reimbursement up to a maximum of $50,713.08. Upon Council's approval of this agreement and in accordance with the Impact Fee Ordinance No. 1679, the Developer will be reimbursed upon completion and acceptance of the improvements. The final reimbursement amount will not exceed $50,713.08. Funding Source: Sufficient funds are available in account #02-00-00-0104 Water and Sewer Impact Fees. Recommendation: Staff recommends Council approve the City-Developer Agreement with Sandlin-Barfield Joint Venture and authorize the Mayor to sign the agreement. Finance Review Acct. Number Sufficient Funds Available Fin.".. Direct... Page 1 of -........ . . . CITY OF NORTH RICHLAND HILLS, TEXAS CITY-DEVELOPER AGREEl\1ENT THE ST ATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS THE COUNTY OF TARRANT: That Sandlin-Barfield Joint Venture, John W. Barfield, Trustee, of the County of Tarrant, State of Texas, hereinafter called "Developer" and the City of North Richland Hills, Tarrant County, State of Texas, hereinafter called "City", enter into the following contract: In consideration of the mutual covenants herein contained and for the purpose of providing water and sewer system improvements as indicated in the construction documents titles "Thornbridge Estates ill" the Developer and the City hereto agree: 1. The developer has paid to the City all processing fees and has furnished the necessary permits, easements, and right-of-way as required for the construction of the above referenced facilities. In addition, the Developer has delivered construction plans, specifications and all other necessary contract documents prepared by a registered professional engineer, and will also furnish construction surveying, cut sheets and field adjustments. 2. The Developer has entered into a contract with the Contractor who will perform the work and who will be paid by the Developer as specified in the construction contract documents. Monthly pay estimates shall be subject to City's review. 3. The Developer agrees to provide, at no cost to the City, all testing necessary to insure that the construction is in accordance with the project specifications and the City standards. 4. The Developer understands and agrees that he has no authority to cancel, alter or amend the terms of the construction contract without specific written authority of the City, and that he shall be responsible for paying the costs of any cancellations, additions, alterations or amendments to the contract unless specifically provided otherwise by written authorization from the City. 5. The contractor has provided to the City on City forms, maintenance bonds in the amount of twenty (20 %) percent of the contract price. 6. The City agrees to participate in the cost of the facilities after construction is complete and accepted. The description and amount of participation is as follows: In accordance with Ordinance No. 1679, the Water and Wastewater Impact Fee Ordinance, the City will reimburse the Developer the eligible impact fee funds for the proposed improvements. The eligible amount for sanitary sewer reimbursement has Thombridge..gr Page J of J . been modified as detailed in the attached memo. The City shall only reimburse the Developer the amount agreed upon below, after the construction of the improvements is complete and acc~pted by the City. If the actual amount paid to the contractor is less than the bid amount, the City participation will be reduced accordingly. WATER AND WASTEWATER IMPACT FEE STUDY dated May 4, 1990; Table W. CIP - 2 Facilities: Eligible Eligible Bid Participation Amount Percent Amount WATER: Thornbird Dr. and east $30,926.00 44.34 % $51,764.46 $22,952.36 to Precinct Line Rd. (P8230) 10" Water Line, 2106 LF SEWER: Thornbird Dr. (L-1O-2) $16,180.06 22.82% $59,796.00 $13,647.02 lO"Sanitary Sewer, 1880 LF Thornbridge Offsite $18,476.88 27.22%* $51,843.00 $14,113.70 . (L-I0-3) 10 " Sanitary Sewer, 1530 LF Total $65,582.94 $163,403.46 $50,713.08 Total Max. Reimbursement $50,713.08 *Reduced due to alternate alignment. See PWL94290 (attached). 7. The City will provide the inspections as required and upon satisfactory completion of the work, the City will accept ownership and operation of the system subject to the terms of the maintenance bonds. 8. The Developer further covenants and agrees to, and by these presents does hereby, fully indemnify, hold harmless and defend the City, its officers, agents, and employees from all suites, actions or claims of any character, whether real or asserted, brought for or on account of any injuries or damages sustained by any persons (including death) or to any property, resulting from or in connection with the construction, design, performance or completion of any work to be performed by said developer, his contractors, subcontractors, officers, agents or employees, or in consequence of any failure to properly safeguard the work, or on account of any act, intentional or otherwise, neglect or misconduct of said developer, his contractors, subcontractors, officers, agents, or employees, whether or not such injuries, death or damages are . Thombrid¡c..¡r Pale 2 øJ J . . . caused, in whole or in part, by the alleged negligence of the City of North Richland Hills, its officers, agents, servants, employees, contractors or subcontractors. 9. Upon completion of the work, good and sufficient title to all facilities constructed warranted free of any liens or encumbrances is here by vested in the City of North Richland Hills. 10. Special provisions: None IN WITNESS WHEREOF, the parties to these presents have executed this Contract in ~~ur 'U'ï/:;:rrn' ~~~ Y6h shall be deemed an original on this the ~ ~ -;jay AND -BARFIE f) JOINT VENTURE (-- ,,/ , ¡/V~'" STATE OF TEXAS: COUNTY OF TARRANT: This instrument was aclaiowledged before me on yl'nJ' . Barfield, Trustee, Sandlin-Barfield Joint Venture. Commission Expires: ~5 , {qq~ by John W. C&A/~," ~ Public Signature (SEAL) CITY OF NORTH RICHLAND HILLS Mayor Tommy Brown A TIEST: Public Printed Name APPROVED AS TO FORM AND LEGALITY Patricia Hutson, City Secretary Attorney for City I Thombrid¡C..¡f Pille J oj J ../ " " , " ~I N®RTH RICH LAND ,. HILLS , .": ... Public Works January 11, 1995 Owen D. Long & Associates, Inc. 1615 Precinct Line Road, Suite 106 Hurst, Texas 76054 Attention: Mr. Doug Long, P.E. RE: PS94-58; THORNBRIDGE ADDmON, PHASES' 3, 4B & 5 ~ Two key questions were raised concerning City Participation for a section of the offsite sewer being proposed for the Thombridge Addition. The first, wås whether or not the City would participate in the off site 10 inch sewer main that deviates west of the natural drainage path. The second question brought up during the meeting was whether or not the City participation would include engineering cost. The Water and Wastewater Impact Fee Study indicates that the offsite sewer main for the Thombridge Addition will need to be a 10 inch main: This size is necessary to serve the area in the immediate proximity 'of the 10 inch main as well as the total area in the watershed. Since the 10 inch main is designed to carry the wastewater flows from the entire watershed, it is reasonable Ulat the City will participate in a portion of this main. However, because the proposed alignment will not allow the 10 inch main to serve the entire watershed, this main will not be eligible for the same amount as Line L-IQ-3 as shown in the Impact Fee Study. To determine the eligibility for the proposed 10 inch main, the City determined the percentage of the area for the total watershed that is being served by the new alignment. Using the watershed areas shown in the City's Master Drainage Plan it was determined that the total watershed area (KEF alignment) is 286.31 acres. Only 265.22 acres of the watershed is being served by the proposed 10 inch sewer main alignment. The new alignment will serve 83.5% of tJús water shed. Therefore, the City's participation in the proposed 10 inch sewer designated as L-IO-3 in the Impact Fee Study will be reduced to (83.5% x 32.6%) 27.2%. The total City participation for sewer lines L-1O-2 & L-1O-3 in this project is as follows: ~ . 7301 N.E. Loop 820 P.O. Box 820609 North Richland HUts, Texas 76182-0609 USA (817) 581-5521 FAX (817) 656-7503 . . . . . ...;;:':' ~, a. Line number L-10-2, 10 inch.sewer is eligible for 22.8% City participation not to exceed $24,095. b. :µne number L-1Q-3, 10 inch sewer with (KEF) alignment as shown in the Impact ··rœ Study is eligible for 32.6% City participation not to exceed $22,128. c. Line number L-10-3, 10 inch sewer with (fhornbridge) alignment is eligible for 27.2%. City participation not to exceed $18,461. , , The City will participate in the cost of engineering and construction surveying. The amount of the City's participation will be 10%_ of the construction cost times the percentage indicated in the Impact Fee Study. If you have any questions concerning the items discussed in this letter give me a call. f1J.;iq ClAr R. Michael Curtis, P .E. ... RMC/jcclpwl94290 cc: Gregory W. Dickens, P.E., Public Works Director Kevin B. Miller, P.E., Assistant Public Works Director ~ Owen D Lon~&Assocja~.s 817 2814934 p.e4 . Q~EN n. lOnG t AssoctATES, tNC. IbIS rRECi~C~ ~I~E ROßD, SUIiE lOb r.uRSi! TEXAS 7ó054 (8:7I2al-8121 '111196 rROJECT: THOR~f.R(ü6£ £STAIES IIi OW~ER: SANDllM I BAß~IELD crT!: HCRr" KICkLA~D HIllS, itX~S REQúESIEù CIT! P~RïlCiPMTjQH IHF~CT fEE ior C.I.P. SEWE~ IftPROYE~ENrs l-!v- lu~O L.F. :===:...(=========;.~~.==:=:=====:.~~~~::=====::2CC::========:..W.C~=========~8~.~:~==========::~az~c&=~=:=====::~....a.: HE:; ÐUANilTIES UNIT DE5C~IPrIOH OF liEK U~IT PRICE TgTAL ~kICE ~~~..=======~..r.::==:=:=====~a2C:===:====Z2.a::======::;~acc===:====:~:a=:~:========~=;~.~:=:======:==~.a.=c=========== 3û loF. 1~· SEWER nAi~ C'-ò' üEPìH '20. \iO $611I1.\i~ r, 10 LF. 10· SiMEK ~~IN 0'-9' ~irT~ $21.00 m(I.~~ .. . b~5 L.f. 10· $EWE~ HAIR S'-I~: Dt?TH S~3.1i0 $I4,6i15.00 1 790 L.r. 10' SE.Ek "AI~ 10'-12' 6£~iH $2S.ùO 'U,7SIi.ðl) 5 65 L,f. (0' SEWER flAIN lZ'-l~' DEFTH 527. Q~ 11, m.W b 4 EA. SiG. 4.'" O~A. ~~jHOtE v'-å' ~ë:?TH nOQ.ûo $~,~CO.'¡O 7 17 'J.f. E:Tfi~ Dë:P!~ STD. 4.iI' OIA. r.~~~lE GVE~ 6' GErTH $9Q.cO $I,m.o~ 8 I EA. SiD. 4.~' n;~. T.k.~. ~~~H~LE Q'-å' DEPTH S2:QQ(',QU S2OOO.QÍI ~ 9.5 v.f. E;Trt~ 9EPTH sT3. 4.0: OIA. T.R.~. ftA~kOLE OVER å' DEPTH $1011.00 i'SiI.OO . 10 1 loS. CE~E~T STA~IllitD ~~xrtEL c?'QSSING tbùO.QO tIIOO.oil II lS~} t.F. ~KüV(DE ~D Et~it TKE~CH 5~F£iY SI.OQ Sl,~O.~Q =====:;2.=:::==:=7~aC~=::==::~3~C:========E~..:CC====::...:==:==:Z..=2=======:~~.2==:=======;22.=:=====:~a...:::===:::2'. SUB TDiAl SEW~ I"~aOvEñ£NTS U7,130.~ 101 EMS(~£tRING ~~û sur.v£Y(~6 s~,m.ùo ~=:=::~a..==:===;=.t.&2=~=~===....aa=====~~...2=::==='...:=:=::~w....=======~a.~~===:::===a..=:==:===.~.a=:==::==2...~:== TOTAL SERER iHPRO.EnE~TS $:)1.843.(1(1 . . . . Owen D Lon'&AssoGi~~.s 817 2814934 P.03 Ù.t" D. LDÄ6 , ~SQCIATES, INC. 1;15 ~~f~i~CT LI~f ~040, SUITE ~~~ ~S!! TEXAS 7~054 (8111281-8121 9/1119å P~OJECT: THORHBRID6E ESTArES III DWNE~: SANDLIN I ~ARflElD CliY: MOxTH RiC~LA~D HILLS, TEXAS ~fQUE3TED C¡¡Y ?A~TIC¡PAiIDH IHPACi FEe far C.I.P. SEVER !ri?~OYE~ÐNT5 L-:Q- 2eOo L,F. ===:=======:~~2~:~C..C...=:========:==========.;;..~......~...aA&:=:====================2=====:=~===~.2=..............a.. lTEit GUlUIfJ fItS ,urtlT OESCRIPiION CF ITEM l!~¡{T PRICE ¡ùTAl PRICE ===:=:==~:;2......2.C====::===:======:=::~..~...."Q~C=:=============:=;=.==2=.~2~a..;........a.=:.====================== I 10 l.F. 10' SE~ER "AI~ ~'-~' DEPTH S20.0\) '2UO.OQ 2 10 L,f, 1~' SE_ER ~AIH b'-B' ÐEfiri $21,öo S210.0û y 325 L.F. 10' SfwEA hA(N 8'-10' ûEPTH '2~.OO '7,475.00 oJ 4 1410 L.r, 1~' SE~ER ftAIH 10'-12' OEfih 525.00 t~6!7S(l.~O ~ b5 L.F. ¡O' SEVE~ r~Ir. 12'-14' otPTH '27,1>1) ¡¡,755.00 6 4 EA, sla. ..0' DIA. "ANHOlt O'_~' DffTn S90~, 011 s3,ó4\J.GG 7 2i 'I.F. EXTRA O€pr~ 5T~. 4.0' GiA. ftriNHOlE OYEi 6' &E~iH S90.0Ù U!8~0.6(' 8 1 LoS. CiHE~T STASILIlt~ C~A~~EL CROSSiN6 Sðf)(I,6é I&UO.OO 9 1880 l.F. PRúVID~ Af,~ E¡COiE TRE~CM 3~tTY 11.00 $!,&8c.i. ØO =======:aç...c:e:::=========%=::a..z...c======::====::~a=...c~:~======:====:=~~X....~.a...::::========::~..~...._....~.:= Su~ TOTAL 5EatP. inPROvE~TS 154,360.00 IO~ E~51~tERi~b ~ Su~vf'l~ ~S!4~b,ljù :=::::::==:,.~&~.::===:===::=;~~......=:==::::==:~:.....=:::=:====::.~~..a..a2=::~:==::=:=:=c......:::===:===~c....a... TOTAL Si~tR i"?R9V¿nER~S $S9,i9ð.OO . PROJECT THORHBRID5E PHASE III OMHER SANDLIN I BARFIELD CITY NORTH RICHLAHD HillS WATER IfIiIROVEHEHT :::.=as.2S=~ZCC3::=:.:#~~~.~S2~a=.=E~:.&2~::::==:::za:aaa..c.a2aca.....a.a...........~.....c...c.=~=.~:a.=a=:::=:=::=~ TOTAL PRICE Ow.n D Lon'&AsSOGi~~.s Oke~ D. LONS ~ AS60CIATE6.IHC. J&15 PRfCINCT LI~E ROAD, SUITE 106 H~ST, TErAS 76054 817 281-8121 REQUEaTED CITY PARTICIPATION I"PACT FEE fOR C.I.P. !O' O. 8230 - 18S0 L.F, lIE" QUANTITIES UNIT DESCRIPTION OF ITen 817 2814934 9/11196 UNIT PRICE P.02 =s.=:==::s.:~:..a...:.=.==::::~::.2.a2s=c2s:a:=::=:===:=:=.~:.a..z.....a..a..&..sa2......a~cc.c.=:a=:=:&:::::::=:::... 1 2 3 . 5 6 210b L.F. 7 EA. i EA. 1. 07 TON I EA. 2106 L.F. 10' WATER !lAIN IO'("JI ¡ATE VALVE 12·~10· TAPPIN6 SLEEVE AND GATE YALVE DUCTILE IRO~ fITTINGS CEnENT STABALIIED CHANNEL CROSSIN6 PftOVIØE AHD EJECUTE TA£NCH SAFETY t18.00 1600.00 t2,000.00 12,000.00 _&00.00 to.IO 137,908,00 1.,200.00 12,000.00 12,140.00 1600.00 1210.~0 &::=:::::::=:~=~Z:::::::::::2:.=2Z~&=:::::::~:=:::S&:~ss:=::::::;~~~&......=c~:::=:::::~asa&a~a.;E.a...2............ . SUI-TOTAl WATER InPROYEn£HTS 101 ENGINEERING AND SURVEYING a47,ose.60 $4\705.86 :~.=.2&::2=::%:2.~.=.2:~=:#:::'.~.:;a:aa::=:::::2:SC...a:::::::;:a:.....:a:::s::::::::=......................2...~..2a . TOTAL MATER IKPROYEnENTS PHASE III t51764.46 , -, ": ~ . ¡..-;;: . ..':.! - ~.. . ..... ,/ -:----. ~! -' , , , ,tort ,~ :~ ,... ; ".. J 'log ¡. _:..,.~=--=_.r.. ; , .. .. ~ :N. j --- _---.J ..I " " ' , . t " , ",N ....:::" ., .., ,'- ~::5 '-- ,. , .,.-.: /' ,.N . ~cc , . N E [R OKS" , ~ 6' . '0. ..~4-1-:- .J ' 1Wa.t- Ò~' , "" ~~o r:\,fb' ~ CO' ~"'r '. 7'."-~ - I, -'- .-- J . i -:- :...-' i ,~ .; : r . ....-! " . . ... - --- ¡-r---__- ... .~ - ' ,. í ,~ ..:.,..;..:' ,. '''6~ ___ ,6U fO~ ....... ...... I: I' I i I r -, , _... cc.o CC'O :t , Ll'\ lO,N ; ./ / ,I 6-' BB~2i " -, - ' ,/ --:,' . ,." ,<,: ø ..!.T:': ,--= ...- ~- ...- , .....;...-- ~- -=.:= ___ '''''-;_.'~' .._~ .. . ~ ' c. ~ -- ____ lO. " ---:'- r --~i---"'- :' " ,...' 0 _ ;. ,;- ,/.. "" _lO'" 0' " -~- _ ._, _ _ 0 .- - -. :/ ,: -,::- ~:: -~.- == = , a ~,.. :~ .~ .-= -, .. ~. .#. ~' : : , , , ::= : ,.!..J ¡, ." ,... ~ ,f=> ; ,.-- ~ ' J J '" - :, ... - , '. .., - .- .. -, -.. , - -f - .. - ., - - - " ~ I :/0 1c!J ,,/ ,-..../ ,::: __ ,1...00 ::~~:.I -- I"~ i&-/'-- I~ .../ ....... . : -. .... . a: co ... a o ~ N , Tr G L7-:-1b . ;'~. ..~100' 6N - . _:. - ~~~~ :; '.',., -6~ -: ' 6· L7- - . .,,'. 1 c ,- ._._..; _ :_.. _. .~~~~ 10· _ ,- 860·' ,. tD "'" N co . a. a: --,-- - ,-..- "-- N - · - 11:;'- :;;:rr- ----8 ::"pilii:¡'t;o"""" "",n,,, '''''''''''''''oA/ì' N ~ · ~I ~ - -~:/ 0.'_ 722~.f ::: ,. ---- .~." coP ~~#/ ~,f'" "" ,f"'- ~.: DAVIS BLVD. ,f/ ELEVAT D .../ TANK' 4" / / 24· .I ·-a· I 6' --' -.""; , - =.=: Lnlllf, -- -~ -:- ' N_ =:= co.. . ' III ,.~ .... 655 16: 6· 10"P.8243 "" 688 ---...fA. J'-.........~.....-- _ . -rO·-p.823~ , . .~~ 'N . _C"r - --,-..----- -~ -~ ' -~ ! ................................... 10"P.8230 ....--- . - - --- ... . . .-..-. - '.. . 6· - '" - _. ... -- --, .. =--..::- - - - l[j"'" - - -+p~ -- ·1,,-( ~ ,- ~.3'..>-'¡__0.t , '-'..... , ~~ . , . / ..........,,'-' ROAD _u" 640 ~ 1 O~ --........ ................-.: ðè3, 620 · 8231 \.1" ,-- .~ '13" Q..IJ ~3"1 a: ~ .'.J ~ ·~·6·~, "6~Põ824!1 ,~ '. = , . " 6· § ~ -, 6. , -: ff , : g! § .. ¡,...: N§ , - -, ., 6·' CO= . 6~ '.. .= ~§ ~ ': CO~ ' .. ., ...--.- 1 I 1 · 6" I i ' _ , "P R253 8u .,. 1 ..__ _, ~ IIIIIIIMI..d..... -, -, i '~ 8'''P~825~ , .: ' ~ 2, , 2·r , ~.----- I I - ---I · 'Z" 6" , '. ~ ~'-'- --. .. 8" 8"P.82Si gtlttlltltllllltlt~~'~~~'I~~~~ .- -." 2" -'- ,.,- , . , , , , , 339 411: _I ."-.':,'.:""- . 4'" , 11111111111 ',I., ,:,~":- -- ...' ?" '... "'" N CO . ~ .. .. 0' ....- ' 6'~i:~~ ~ =-=- I-I'~I' -$-1----1, ' '-'~I 6 ---:. ----"1 'I~I --I ' __" '12" ,I :1 ---1,-~ I-I œ-,-1 . --1- : -I 1-""" -J, ~.---š-~I, ' _~.:;r; ~__:J=::. " :3" , - "'" Lt\ . Q.;. II N -- .. Ln -. "'" Ll't . ~ &: N - . Ln Ln N CO '* CITY OF NORTH RICHLAND HILLS Department: Public Works Abandonment of a Portion of Ross Road Subject: Right-of-Way - Ordinance No 2165 Council Meeting Date: 12/16/96 Agenda Number: PW 96-53 Ross Road is located in the College Hill Addition. The portion to be abandoned is described in greater detail on the attached. A replat of College Hill Addition, Lot 1 R1, Block 33 was approved by City Council on November 25, 1996. The replat included sufficient easements to provide public access to the lot. The plat approval also allowed for the future vacation of this right-of- way. The vacation is accomplished by the attached ordinance. A separate drainage access and utility easement has been dedicated by plat for the public facilities which are to remain and the plat will be filed at the County after the vacation of this right-of-way is filed. Recommendation: It is recommended Council approve Ordinance No. 2165 vacating and abandoning the dedication of Ross Road which is immediately west of Davis Boulevard and is within the limits of Lot 1 R1 of College Hill Addition, Block 33. Finance Review Source of Funds: ()Þ Bonds (GO/Rev.) . Operating Budget _ Other ~ ~' ~ ¿~ '"'JI'"'De rt ent ead Signature Cit anager CITY COUNCIL ACTION ITEM Acct. Number Sufficient Funds Available Fin""... Director Page 1 of ~ . . . ORDINANCE NO. 2165 WHEREAS, that portion of Ross Road right-of-way in the City of North Richland Hills, Texas originally dedicated as part of Block 33, College Hill Addition, North Richland Hills, Tarrant County, Texas, and specifically that portion which is adjacent to Block 33, Lot 1 R; Block 32, Lot 1; Block 34, Lots 1 and 2; and WHEREAS, the City Council finds that the dedication of such portion of Ross Road right- of-way should be vacated; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. Dedication and use of that portion of the right-of-way described above and as indicated on the attached Exhibit "A" and Exhibit "B" is hereby vacated in favor of the legal owner of College Hill Addition, Lot 1 R, Block 33, North Richland Hills, Tarrant County, Texas. 2. The City Council finds that any right-of-user established by prescription in favor of the public has now been abandoned and that the ownership and use of the real estate in question should revert to the owner of College Hill Addition, Lot 1 R, Block 33 free and clear of any prescriptive claims or other rights in the public and it is so ordered. The City of North Richland Hills hereby retains any and all easements shown on plat of Lot 1 R1, Block 33, College Hill Addition approved by the City Council on November 25, 1996. 3. Exhibit "A" and Exhibit liB" attached hereto and made a part hereof describe and show that portion of the right-of-way affected by this ordinance. PASSED AND APPROVED this the 16th day of December, 1996. APPROVED: Tommy Brown, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: Rex McEntire, Attorney for the City " . EXHIBIT "An CITY OF NORTH RICHLAND HILLS, TEXAS Ross Road Abandonment FIELD NOTES BEING the Ross Road right-of-way in the J.H. Barlough Survey, Abstract Number 130, Tarrant County, Texas, and being adjacent to Lot 1-R, Block 33, COLLEGE HILL ADDITION as recorded in Volume 388-208, Page 41 (amended in Volume 388-208, Page 98) of the Plat Records of Tarrant County, Texas, said right-of-way being more particularly described by metes and bounds as follows: BEGINNING at the most southerly corner of said Lot 1-R, also being in the northwest right-of-way of said Ross Road; THENCE along the northwest right-of-way line of said Ross Road the following calls: · · . · · · · North 27° 41' 55" East, 76.52 feet to a point; North 42° 52' 55" East, 150.2 feet to a point; North 50° 50' 25" East, 175.31 feet to a point; North 61 ° 18' 25" East, 57.67 feet to a point; North 62° 59' 55" East, 37.51 feet to a point; North 64 ° 04' 40" East, 95.19 feet to a point for the southeast corner of Lot 2, Block 34, COLLEGE HILLS ADDITION and in the west right-of-way line of Davis Boulevard (FM Highway No. 1938); THENCE South 11 ° 48' 15" West, 137.36 feet along the Davis Boulevard west right-of-way to a point in the southeast right-of-way line of Ross Road; THENCE along the southeast right-of-way line of said Ross Road the following calls; · South 62° 25' 40" West, 32.53 feet to a point; · South 61 ° 34' 55" West, 109.3 feet to a point; · South 50° 36' 10" West, 165.83 feet to a point; · South 42° 59' 15" West, 139.05 feet to a point; · South 27° 44' 25" West, 69.72 feet to a point; THENCE North 62° 15' 35" West, 55.77 feet departing the southeast right-of- way line to the POINT OF BEGINNING. . . , ~ .,Ll ~ ~ .. , .. '. N , - ::: _LaJ : .. .~.. .... ~ ~~ = : ".::.~:"'! ª ~~l~ ,,' ,eto.o S IZ -s "¡\71' 'M. \7000 ...1.J T~7IJn ~ .- .~ 0 v!:': '·0.._ ..J -.of": ...p -.:.:...:. :.,.... u,'.:.'· ,°">0..". .....: :_::. ·o."a.:""" . .0°:) ..... ..~'" .. .....;. \..' ço .0':- u.. Úó- <ten NI<'I .,., CD"': -:on Ncn ,; .... -. ~: -" -IOl/let I;;::' D I_,n.o., ,......1 'M.!iO,££oON /9' !i\7\7 ,u/7IJn ,0/" '''",--- 1.,'ct,1 I,. lit J ï.õw. ~.: Î I ~" -:;e. ,"' I ~ '::.; ~II~ ~; =: I -~: '-" I I.. ~ '0 -..0(1 I I ~ ~ I,' Ofl ) I ... II~ L' :. ." ,,:::.. "I;'" ''', ...<:..6.._.... .- .' ':.... ··:"~'::I..;... .... ....::: v ..... - 0, D ....: .... .' .' 'a. 1'0. "...2" .. .. .. .~,/~. "'1,. I,O"IIt} I. ."'"S," " l\.1 tt:: .......1 l\.l "I 1--... tt::~ ......... l\.l ~ "I "I ~ ......... 1--... l'\.t)........ \.1 ~ ~ \.t)........~ ';0.. . f' l\.l t:\.. 'C ....;.9'" cP", .......1 ~ ·~....:O.ço.9/.......1 ~ -'. ~:~- ;t''''",.s- <:::'):::t:: . \.: <~, .....;-; '-.1 (i) ..... ," ",' :...". ::.t: :.";..... ":.:.:: o ,., o :::,.. ~ .::'.~. :::::: .....: '-':::.: L.i..! ... .:::~ 0 ,'¡'.. '<I' ...... Q: .:::) .... ¡::) : '<I' .. ;':":~; 0;:: ::)::! '::1::' :.:~:': ..':=; .... . "-4 fila ,..~ -, '.', : .. .... &,.; .~ ~ ..... .: ::.....!; , .. .. .. SSe ~ .6... ::.\"> .. ~ ~ :t ~ ~ ~ 1 ~~Ç\ J II G) -' ~ \J íE';G !J l B l T " II B A" ' CITY OF NORTH RICHLAND HILLS Department: Finance/Police Department Council Meeting Date: 12-16-96 Authorize Payment to Motorola for Mobile Subject: Data Maintenance Agreement - Resolution No, 96- 79 Agenda Number: PAY 96-16, The annual maintenance agreement for Motorola Mobile Data Terminal System, base site rental and related equipment is now due in the amount of $66,964.00. The Department is repaid a large portion of this amount from income from the Interlocal Agreements with other area cities. Funding Source: 03-90-00-3465 Recommendation: It is recommended the City Council approve Resolution No. 96-74 authorizing payment to Motorola Communications for annual maintenance charges in the amount of $66,964.00. Finance .Review Source of Funds: Bonds (GOmev.) Operating Budget _ Other Acct. Number Sufficient Funds Available ment Head Signature CITY COUNCIL ACTION ITEM Finance Director Page 1 of . . . ... RESOLUTION NO. 96-74 WHEREAS, the City has a continuing maintenance agreement with Motorola to provide service for all Mobile Data Terminal Systems, base site rental and related equipment; and WHEREAS, the City continues to receives a discount if this agreement is paid annually instead of monthly; and WHEREAS, the total annual amount for the period from October 1, 1996 through September 30, 1997 was billed by Motorola as $56,814.00 for Mobile Data Terminal Systems and $10,150.00 for the base site rental; and WHEREAS, the Police Department is repaid a large portion of this amount from income from the Interlocal Agreement with other area cities. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS THAT: The City Manager be, and is hereby, authorized to pay the annual charges by Motorola in the amount of $66,964.00 from the following account: 03-90-00-3465 PASSED AND APPROVED THIS 16th DAY OF DECEMBER, 1996. MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: ATTORNEY FOR THE CITY /> ~ CITY OF NORTH RICHLAND HILLS Department: Finance/Police Department Council Meeting Date: 12-16-96 Authorize Payment to Motorola for Radio Maintenance Subject: Agreement - Resolution No, 96-'73 Agenda Number: PAY 96,-:-lT The annual maintenance agreement for all Motorola radios and related equipment is now due in th amount of $151,604.54. The City receives a discount if this agreement is paid annually instead of monthly. The Department is repaid a large portion of this amount from income from the Interlocal Agreements with other area cities. Funding Source: 03-91-00-3460 $132,962.54 16-01-01-4460 $ 18,642.00 Recommendation: It is recommended the City Council approve Resolution No. 96-73 authorizing payment to Motorola Communications for annual maintenance charges in the amount of $151,604.54. Finance Review Source of Funds: Bonds (GO/Rev,) Operating Budget _ Other Acct. Number Sufficient Funds Available ead Signature CITY COUNCIL ACTION ITEM Finance Director tM--~ Page 1 of .. . RESOLUTION NO. 96-73 WHEREAS, the City has a continuing maintenance agreement with Motorola to provide service for all radios and related Motorola equipment; and WHEREAS, the City continues to receives a discount if this agreement is paid annually instead of monthly; and WHEREAS, the total annual amount for the period from October 1, 1996 through September 30, 1997 was billed by Motorola as $151,604.54 on October 24, 1996; and WHEREAS, the Police Department is repaid a large portion of this amount from income from the Interlocal Agreement with other area cities. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICH LAND HILLS THAT: The City Manager be, and is hereby, authorized to pay the annual charge by Motorola in the amount of $151 ,604.54 from the following accounts: 03-91-00-3460 $132,962.54 . 16-01-01-4460 $ 18,642.00 PASSED AND APPROVED THIS 16th DAY OF DECEMBER, 1996. MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: . ATTORNEY FOR THE CITY CITY OF NORTH RICHLAND HILLS Department: Finance / Library Council Meeting Date: 12/16/96 Subject: Authorize Payment to University Microfilms International Agenda Number: PAY 96-18 In the 1996/97 approved budget, Council appropriated funds for miscellaneous subscription renewals. The Library's Plan of Service calls for it to maintain a 10-year backfile of the periodicals to which it subscribes, so that information from the periodicals will continue to be available to the public. The back issues of these periodicals provide information needed by many library users, particularly students, for their coverage of current trends and events. The attached invoice from University Microfilms International (UMI) is an annual renewal of the library's subscriptions to the microfiche versions of 86 periodicals for which the library maintains chronological backfiles. The invoice total is $5,131.77. UMI is a sole-source provider for these products. The NRH Library has chosen microfiche for its periodical backfiles in preference to maintaining the paper copies for a number of years. Microfiche is a better and more permanent method of retaining fragile magazines and periodicals, and retaining the paper copy would require a large amount of storage space that is simply not available. Recommendation: It is recommended that Council authorize payment to University Microfilm International in the amount of $5,131.77 Finance RevIew Source of Funds: Acct. Number Bonds (GO/Rev.) Sufficient Funds Available Operating Budget ~~ Other ~~ ,'jS)V C - _¿~ Department Head Signature City Manager CITY COUNCIL ACTION ITEM . Finance Director - . . U-M-I UHIVERSITY MICROFILMS INTERNATIONAL INVOICE / RENEWAL NOTICE BIll TO: 7601341 RENEWAL NUMBER: 962392EU S646346 NORTH RICHLAND HILLS PUBLIC LIBRARY 6720 NE LOOP 820 RICHLAND HILLS TX 76180-7901 SHIP TO: 7601341 NORTH RICHLAND HILLS PUBLIC LIBRARY 6720 NE LOOP 820 RICHLAND HILLS TX 76180-7901 Enclosed is your periodical invoice/renewal from UMI. PLEASE READ THESE INSTRUCTIONS BEFORE YOU PROCESS. How to Renew 1. Verify all titles for accuracy of year, quantity, purchase order number, and format. 2. Turn to the Summary Page. On that page, you should: * MaKe any necessary corrections in your shipping/billing addresses. * MaKe additions, changes, or deletions in your title selections. * To receive all your microfiche titles quarterly, simply write "Quarterly Delivery" on the Summary page. Remember, quarterly delivery is only avai lable for MICROFICHE titles indicated by (*) to the left of the catalog number. * Sign in the space provided and include your telephone number. 3. Please enclose payment with this renewal. Send the amount shown under Total Order Value. You will be invoiced for any adjustments. TERMS: NET 30 DAYS. 4. Return the Summary Page, title additions, purchase order if required, and payment in the enclosed postage-paid envelope. INVOICE PLEASE PROCESS FOR PAYMENT w U ~ o z -I « ~ w CI: -...... w U o > z - . 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UJ 0: 4 o UJ I- VI .... ..J VI UJ U .... 0: Q. ..J ..J 4 Q i ~ ~ ~ ~ VlU ZI- OUJ .... I- . UUJ :JC!J O:Z 1-4 VlJ: ZU .... . o:ð :Jð 04 >~ UJ o:U UJZ :l:UJ OIX I-UJ VlLI.. :JUJ UO: :l:UJ ..JQ. ....> Ll..1- > I- .... I- Z 4 :J o ~ VI ~ IX 4 UJ > C!JO: OUJ ..JaJ 4:1: I-:J 4Z U UJ ..J I- .... I- UJ:I: ZUJ ....1- ..J.... . ' . CITY OF NORTH RICHLAND HILLS Agenda Number: 12/16/96 PAY 96-19 Department: Public Works Approve Final Pay Estimate NO.8 in the Amount Subject: of $32,045 75 to Circle "C" Construction Company for Interchange Water and Sanitary Sewer Adjustments, Phase II Council Meeting Date: This project was awarded by Council on September 25, 1995 for $1,579,354.50 to Circle "C" Construction Company. The total contract amount after change orders is $1,623,559.00. Final payment will make the total amount paid to the contractor less than the contract amount. The savings is due to various sections of welded steel casing being installed by an open trench instead of the more costly boring operations. The contractor's total earnings on the project will be $1,555,195.00, a savings of $68,364.00. The contractor substantially completed this project prior to the scheduled completion date. The projec~ is now complete with all final adjustments having been made. Funding Source: Sufficient,funds are available in account #02-93-18-6000 (I.H. 820 Utility Adjustments, Phase II). ~;. Recommendation: Staff recommends Council approve final payment to Circle "C" Construction Company in the amount of $32,045.75. Finance Review Acct. Number Sufficient Funds Available ~r· artment Head Signalu.e -~ CITY COUNCIL ACTION "EM FIIUIIIC8 DnClOl Page 1 of . . . ~IrE~11E~ NOV 2 1 199B . KNOWL TON-E NCLlSH-FLOWERS, INC. (} ('e:] CONSUL TlNG ENGINEERS I Fort Worth- Dallas November 19, 1996 Mr. Gregory W. Dickens, P.E. Public Works Director City of North Richland Hills 7301 N.E. Loop 820 North Richland Hills, Texas 76180 Re: 3-433B, CITY OF NORTH RICHLAND HILLS, I.H. 820 UTll..ITY ADJUSTMENTS, PHASE 2, CONTRACTOR'S ESTIMATE NO.8 (AND FINAL) For your review and appropriate action, we enclose a copy of the referenced document. The final quantities have been verified by your project representative, Mr. Fred Durko, as indicated on the original submittal. The following is a summary of the final project status: CATEGORY THIS ESTIMATE TOTAL CONTRACT EARNINGS AMOUNT Water -$54,347.88 $553,122.50 $619,602.50 Sewer 86,393.63 1,002,072.50 1,003,956..50 Totals $32,045.75 $1,555,195.00 $1,623,559.00 Please note that the final project construction costs were $68,364.00 less than the Contract amount, as amended by change order. The major cost savings were realized in the water system adjustments portion of the Contract; various sections of welded steel casing were installed by open trench, avoiding a more costly boring operation. The attached Project Status Report itemizes the individual bid item "as-built" quantity variations ITom the Contract quantities. 1901 CENTRAL DR., SUITE 550. BEDFORD, TEXAS 76021 .817/283-6211 . METRO 817/267-3367. FAX 817/354-4389 . . . November 19, 1996 I.H. 820 Utility Adjustments, Phase 2, Contractor's Estimate No.8 (And Final) Page 2 The project was substantially complete prior to the scheduled completion date~ the assessment of liquidated damages should not be considered. We recommend acceptance of the project and final payment in the amount of $32,045.75 to Circle "C" Construction, P.O. Box 40328, Fort Worth, Texas 76140. The commencement date of the two-year Maintenance Bond shall be the date of this letter, November 19, 1996. Please call if you have any questions in this regard. ~d/ Donald H. Canton, P .E. DHC/cones8 Enclosures xc: Mr. C.A. Sanford, City Manager (wI copy of enclosure) Mr. Randy Shiflet, Assistant City Manager (wi copy of enclosure) Mr. Larry Cunningham, Assistant City Manager (wI copy of enclosure) Ms. Jackie Theriot, Acting Director of Finance (w/ copy of enclosure) Mr. Mike Curtis, Capital Projects Coordinator (wI copy of enclosure) Mr. Fred Durko, Construction Inspector (wi copy of enclosure) Mr. Michael Hansen, TxDOT (wi copy of enclosure) Circle "C" Construction (wi copy of enclosure) CITY OF NORTH RICHLAND HILLS Department: Public Works Council Meeting Date: Approve Final Pay Estimate No. 13 in the Amount Subject: of $103,98454 to Larry Jackson Construction Co , Inc Agenda Number: for Rodger Line Drive, Phase "B" Paving, Drainage, and Bridge Improvements 12/16/96 PAY 96-20 This project was awarded by Council on August 28, 1995 (PW 95-57) for $1,180,969.80 to Larry Jackson Construction Co., Inc. The total contract amount after change orders is $1,404,521.65. Final payment will make the total amount paid to the contractor less than the contract amount. The savings is due to unused landscaping materials, paving repair work and emergency contingency funds. The contractor's total earnings on the project will be $1,359,234.51, a savings of $45,287.14. The contractor substantially completed this project prior to the scheduled completion date. The project is now complete with all final adjustments having been made. Funding Source: Sufficient funds were previously appropriated by Council action (PW 95-57,8/28/95). Recommendation: Staff recommends Council approve final payment to Larry Jackson Construction Co., Inc. in the amount of $103,984.54. Source of Funds: Bonds (GO/Rev.) Operating Budge Ot e Finance Review Acct. Number 20-01-05-6000 Sufficient Funds Available ~~ City nager CITY COUNCIL ACTION ITEM Finance Director Page 1 of . . KNOWL TON-E NGLlSH-FLOWERS, INC. CONSULTING ENGINEERS I Fort Worth- Dallas December 7, 1996 Mr. Gregory W. Dickens, P.E., Director of Public Works City of North Richland Hills 7301 N.E. Loop 820 North Richland Hills, Texas 76180 ""F' ·"H1'H) ".'[''''' .. p~ Q ~,~.,'1C: Ii! . . "I' .t H '.r. .1.' ..... \.j - ..... ... .,.r~ Re: 3-247, CITY OF NORTH RICHLAND HILLS, RODGER LINE DRIVE, PHASE "B", PAVING, DRAINAGE AND BRIDGE IMPROVEMENTS, PLUS AMUNDSON DRIVE IMPROVEMENTS, CONTRACTOR'S PARTIAL PAY ESTIMATE NO. 13 & FINAL Enclosed is one copy of Contractor's Partial Pay Estimate No. 13 & Final, dated December 5, 1996, made payable to Larry H. Jackson Construction Co., Inc., in the amount of $103,984.54, for materials furnished and work performed on the referenced project as of . September 23, 1996. The quantities and conditions of the project have been verified on-site by your representative, Mr. Ken Matheson, as indicated by his signature on the estimate dated December 4,1996, and we have checked the item extensions and additions. The following is a summary to the project status to date: . TOTAL CONTRACT PERCENT BREAKDOWN THIS MONTH EARNINGS AMOUNT COMPLETE IInel. Retainage) Rodger Line Paving $ 44,731.43 $254,684.65 $ 273,667.54 93.06 Rodger Line Drainage 24,100.04 401,488.80 414,064.92 96.96 Rodger Line Bridge 23,973.17 479,463.31 461,977.64 103.79 Rodger Line Sewer 167.00 3,340.00 8,706.00 38.36 Amundson Paving 7,044.45 140,888.75 165,001.55 85.39 Amundson Drainage 2,479.73 49,594.50 51,469.50 96.36 Amundson Water 455.55 9,111.00 8,971.00 101.56 Hewitt Street Paving 1,033.17 20,663.50 20,663.50 100.00 TOTALS $103,984.54 $1,359,234.51 $1,404,521.65 96.78 TIME (Calendar Days) 365.00 365 100.00 1901 CENTRAL DR., SUITE 550 . BEDFORD, TEXAS 76021 .817/283-6211 . METRO 817/267-3367 . FAX 817/354-4389 . Page 2, December 7, 1996 Rodger Line Dr., Ph. liB", and Amundson Dr. Contractor's Estimate No. 13 & Final The total contract amount, including change orders, is $1,404,521.65. Contractor earnings total $1,359,234.51, which is $45,287.14 under the contract amount. The following is a breakdown of the savings by construction category: CATEGORY Rodger Line Paving Rodger Line Drainage Rodger Line Bridge Rodger Line Sewer Amundson Paving Amundson Drainage Amundson Water Hewitt Drainage TOTAL COST SAVINGS COST SAVINGS $18,982.89 12,576.12 (17,485.67) 5,366.00 24,112.80 1,875.00 (140.00) 0.00 $45,287.14 The primary reasons for the cost savings are unused landscaping materials, paving repair . work, and contingency funds. The contract was completed within the 365 calendar day contract completion time, and therefore, no liquidated damages were incurred. The two year period of maintenance will begin on this date, and therefore, will tenninate on December 7, 1998. The maintenance obligation includes repair of concrete pavement cracking, and failure of any concrete structures constructed by the contractor, including repair of stonn drain pipe or inlet failures, and repair of sanitary sewer system malfunctions. After the Contractor has signed an affidavit verifying that all suppliers and subcontractors have been paid, and in the absence of any negative test reports concerning the condition of this project, we recommend that this final partial payment, in the amount of $103,984.54 be made to Larry H. Jackson Construction Co., Inc. at 5112 Sun Valley, Fort Worth, Texas, 76119. Please call if you have any questions concerning this project. ~.~ RICHARD W. ALBIN, P.E. . RW A/lld/Enclosures/FinaI.2471 $5,135,000 CITY OF NORTH RICHLAND fiLLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 Sealed Bids Due Monday, December 16, 1996, at 11:00 AM, CST The following ratings have been assigned: FSA Insured MOODY'S INVESTORS SERVICE~ INC. -- "Aaa" STANDARD & POOR'S RATING GROUP -- "AAA" A Division of The McGraw-Hill Companies, Inc. The following underlying ratings have been assigned: MOODY'S INVESTORS SERVICE~ INC. -- "A" STANDARD & POOR'S RATINGS SERVICES -- "A" A Division of The McGraw-Hill Companies, Inc. FIRST SOUTHWEST COMPA\JY I I I I I I I I I I I I I I I I I I I Prepared by; ~ FIRST SOIJ1HWf5r COMPANY TABULATION OF BIDS RECEIVED AT SALE OF $5,135,000 CITY OF NORTH RlCHLAND IDLLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 SELLING MONDAY, DECEMBER 16, 1996, AT 11:00 AM, CST TRUE INTEREST ACCOUNT MANAGER COST PaineWebber, Inc. 4.88502% First Southwest Company 4.925627% A.G. Edwards & Sons, Inc. 4.9449% Southwest Securities, Inc. 5.0129% I "Bond Buyer's" Index of 2S Revenue Bonds Basis Valuation of Par Bonds I The most important guide as to what the Municipal Revenue Bond Marlcet has done in one time period versus another is the "Bond Buyer's" 25 Revenue Bond Index, Published on Thursday of each week, it is the accepted guide of the Municipal Bond Industry to determine trends and movements of interest rates in the marlcet The Index is based on 30 year revenue bonds of 25 issuers rated from "Aaa" to "Baa 1" by Moody's Investors Service,lnc, and from "AAA" to "A" by Standard & Poor's Corporation, Bonds in the Index include Housing, Transportation, Hospital I and Pollution Control Credits, I Week ~ ~ ~ l.2R2.. 1990 ì22.L ..l22l. ~ 1994 1995 1996 January 1 8,72 7.19 8,28 7,73 7.36 7.32 6.68 6.44 5.56 6,94 5,63 2 8.51 7,01 8,31 7,66 7.35 7,40 6.53 6.41 5,54 6,87 5,79 I 3 8.54 7.04 8,()() 7,55 7.49 7.34 6,66 6.40 5.54 6,78 5,70 4 8,46 6,92 7,84 7.56 7.52 7.31 6.70 6.36 5.50 6.78 5,77 5 8.29 6,98 7.24 6.76 I February 1 8,24 6,98 7,84 7.58 7.52 7,08 6,79 6,29 5.49 6,63 5,69 2 8,09 7,09 7.76 7.63 7.50 7,07 6,85 6.22 5,58 6,44 5,67 3 7.95 7,05 7,90 7,82 7.49 7,23 6,85 6,06 5,64 6.40 5.67 4 7.66 7,01 7,83 7.83 7,55 7.31 6,82 5,89 5,88 6.34 5,76 5 5,86 I March 1 7.57 6,92 7,80 7,85 7.50 7,30 6.82 5.69 6,07 6.31 5,88 2 7,55 7,02 8,02 7,79 7.50 7,29 6,86 5,83 6,13 6.40 6,13 3 8.13 7,08 8.09 7.78 7.55 7.33 6,87 5.90 6,06 6,25 6.10 I 4 7.69 7.11 8.27 7.95 7.54 7.35 6,87 5.99 6.16 6.34 6.15 5 8,23 7.87 7,57 6.39 6,29 April 1 7.56 7,26 8.15 7,80 7.54 7,29 6,85 6.07 6.55 6,22 6,11 I 2 7,63 7.54 8.21 7,82 7.53 7,27 6,78 6,06 6.50 6.19 6,32 3 7.55 8.28 8.27 7,69 7,64 7.19 6,74 5,91 6.45 6,17 6.19 4 7,69 8.16 8,25 7,61 7,77 7,22 6,82 5,95 6.42 6,29 6.16 5 8.13 6,83 5,98 I May 1 7,79 8.20 8,27 7,62 7,79 7.14 6,77 5,88 6,43 6.30 6.32 2 7,76 8,20 8.26 7,64 7,66 7,09 6.70 5.90 6,60 6,18 6.32 3 7,91 8.68 8.34 7.38 7.51 7,14 6,69 5,97 6.41 6.15 6.17 4 8.09 8.33 8,32 7.38 7.49 7.16 6,74 5,94 6.41 6,02 6.10 I 5 8.07 7.50 7.13 6.17 June 1 8.36 8,29 8,21 7.43 7.49 7,24 6,73 5,91 6.38 6, ()() 6,20 2 8.51 8,16 8.15 7,28 7,46 7.36 6,69 5,92 6,20 5,94 6.34 3 8,27 7.96 8,10 7,27 7.53 7.31 6,62 5,86 6.34 6.10 6,27 I 4 8,05 8,10 8.10 7.42 7.48 7.30 6.58 5,79 6.43 6,05 6.20 5 8,12 7,34 6.56 6,28 July 1 7,90 8,16 8.14 7.32 7.43 7,24 6.55 5.75 6,52 6,21 6.15 I 2 7,91 8,05 8.15 7,27 7.40 7,19 6,36 5,76 6.47 6,05 6,24 3 7.91 8,03 8.16 7,26 7,40 7,17 6.33 5,74 6.46 6.30 6.10 4 8,08 8.08 8.13 7,26 7.38 7.13 6,22 5,87 6,47 6,27 6.10 5 7,96 8.14 6.12 5,87 I August 1 7,97 8,20 8.05 7.19 7.33 7.10 6,24 5,83 6.37 6.35 6,02 2 7,64 8,04 8.18 7.31 7.51 7,07 6.20 5,68 6.49 6,40 5.92 3 7.43 8.12 8.20 7.39 7.53 7,03 6,36 5,61 6.45 6,44 5,98 4 7.32 8,09 8.19 7.47 7,80 7.03 6.45 5.56 6,46 6.40 6, ()() 5 7,46 7,70 7,()() 6.26 6,09 I September 1 7.37 8.47 8.10 7.43 7.68 7,02 6.38 5.52 6.43 6.16 6.19 2 7,63 8,67 7,98 7,45 7,64 7, {)() 6.31 5,44 6.46 6,09 6.12 3 7.57 8,65 7,88 7.59 7.73 6,95 6.43 5.49 6.51 6.18 6.10 I 4 7.55 8,65 7.92 7.59 7,81 6,91 6.49 5.51 6,66 6,27 6,01 5 7,93 5.53 6.70 October 1 7.57 8.88 7,83 7.50 7,75 6.87 6,45 5.52 6,82 6.14 5,95 2 7.47 9,03 7,83 7,46 7,83 6.90 6.49 5,41 6,73 6,08 5,99 I 3 7.50 9.59 7,77 7.47 7.75 6,91 6.51 5,44 6,81 5,97 5,97 4 7.49 9,01 7,70 7.47 7,64 6,93 6,71 5.56 6,95 6,02 6,01 5 7.30 8,78 6.86 6,81 5,94 November 1 7.30 8,28 7,64 7.47 7,55 6.87 6.70 5.72 7.16 5,93 5,92 I 2 7,29 8.41 7,77 7,45 7.53 6.86 6.57 5,69 7.23 5,94 5,86 3 7.18 8,44 7,86 7.39 7.42 6,91 6.48 5,70 7.37 5,89 5,83 4 7.16 8.43 7,93 7.35 7,41 6,93 6.47 5.74 7.32 5,89 5,80 5 7.31 7,35 5,78 I December 1 7,15 '8,40 7,96 7.35 7,33 6,96 6.48 5,71 7.18 5.65 5,83 2 7,34 8,57 7,96 7,29 7,28 6,90 6,42 5,53 7,17 5.79 5.93 3 7,31 8.47 7.94 7,28 ,7.36 6,84 6,44 5,62 7,02 5,79 4 7,16 8,40 7,82 7.33 7.39 6,76 6,41 5.58 6,99 5,71 I 5 8,29 7,71 6,40 5.52 6,97 I I I I I I I I I I I I I I I I I I I City of North Richland Hills, Texas Defeasance and Refunding of Series 1989 and 1989-A Waterworks and Sewer System Revenue Debt Outstanding Series 1996 Date Revenue Debt Refunding (1) Savings 9/1/g¡ 2,073,282.50 587,359.89 1,485,922.61 911/93 2,079,207.50 585,660.00 911/c}) 2,076,805.00 585,397.50 1,491,407.50 911/00 2,075,125.00 559,035.00 1,516,090.00 911/01 2,074,761.25 557,910.00 1,516,851.25 9/1/02 2,075,000.00 560,750.00 1,514,250.00 9/1/ffi 2,075,000.00 557,300.00 1,517,700.00 9/1/04 1,140,000.00 557,750.00 582,250.00 9/1/05 930,000.00 532,280.00 397,720.00 911/()) 940,000.00 531,600.00 408,400.00 9/1/(JJ 830,000.00 534,520.00 295,480.00 911/Œ 830,000.00 530,755.00 Totals 19,199,181.25 6,680,317.39 12,518,863.86 (1) (1) $1,784,702.21 savings is from the refunding. $10,734,161.65 savings is from the investment of the $9,200,000 received from Watauga. The Council Cover Sheet estimated a savings of approximately $12,400,000. Present Value Savings as a % of Refunded Principal 7.279% Cash Available for Other Uses Received from Watauga ExistingRe~eFund Interest Earned on Settlement to Da1 Total Available Cash Used in Defeasance Cash Used in Refunding New Reserve Fund Requirement Total Cash Used Available for Other Uses 9,200,000.00 1,829,030.00 120,000.00 11,149,030.00 9,148,061.11 68,719.16 556,693.12 9,773,473.39 (2) (2) The original estimate was $1,183,269.18, a difference of $192,296.63 of Funds Available for Other Uses. I I I I I I I I I I I I I I I I I I I ~ ~ ~ ~ !a £'-Jc.:> ~ ~ ~ ~~~ r-- r-- ~ 0'1 0'1 ~~~ V) V) -< oò oò oô CI) (@- ~ ~~ 00 00 00 ~~~ t'-: r-- C"J r-- r..: f- IX:! E-< ~ ~ ~ ~~~ 00 00 ('t) ('f') ('t) \D 0 0 V) ~~8 V) V) -.:t 00 00 ..... 0 0 ('t) V) V) 0 r..: r..: r..: ~ 0'\ 0'\ 0'1 00 00 00 0 0 0 I N ~ N N ..... I I I ('t) ('t) \D CI) "0 "'0 "0 ª ª ª ~ ~ ~ ~ ~ii o = 0< o IX:! ~~ ~ I ~ I Z B 0) 0)0'\ 0)0'1 ....00 ....00 ~ ~ ã 1:':10'1 1:':10'\ ~:; ~:; ~ ~ .~ ~ .~ ~~ >< 0) >< 0) ~b/} ~ CI)~ ~v: ~ ~ .S vrii vrii ~"O ::::: = ::::: = ::::: = ..... ..e æ~ æ~ :I: 0) ~ "O~ "0 0) "'0 0) ~ ª"'O ª ã ª ã :is ª - 0) - 0) CI) u '5 > "8 > ~ ÄZi:: ÄZ~ 22~ ~ 'Ê ~ 'Ê.š 'Ê g§ ~ ~ ~] o ..... 0 z] E-< ..... I-< .......2 .......e æ ~.§ o 0) o 0) þ~ þ~ ..... S ..... S ..... S U 0) U 0) U 0) §....O'I §~ §~ ~oo >'0'1 ~ CI) ..... ~en ~CI) V) I-< ~ 8 [j on I-< N 0) Cl) ..... 0) o~ ~'O "l~ r--~ ~ 00 0) 0) ('f') 0) V) 0) ~ CI) en ~ CI) ~ en I I I I I I I I I I I I I I I I I I I Moody's Municipal Daily Rating Recap North Rich/and Hills, Texas Rating date: December 12, 1996 Moody's rating: A Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 Sale: $5,135,000 Date of Sale: December 16 Type: Competitive Sec urity: First lien on and pledge of the net revenues of the city's water and sewer system. Use of Proceeds: Proceeds will be used to purchase U.S. government obligations which will be deposited into an escrow and used to refund, on a current basis. the city's water and sewer system's outstanding Series 1989, 1989A and 1989B Capital Appreciation Bonds. All three series are due on 9/1/2002 to 9/1/2008 and all three will be called on 3/1/97. Note a portion of the Series 1989B CABs due 9/1/2002 will be paid from revenues. Last Rating change: Initial rating. Credit Comment: In conjunction with the City of North Richland Hills sale of Waterworks and Sewer System Revenue Refunding Bonds, Moody's has reviewed and assigned an A rating to the system's Reve- nue Bonds. Proceeds from this issue together with pro- ceeds from the sale of a portion of the system to the City of Watagua will be utilized to retire all outstanding debt of the system. Factors contributing to this rating include: Historically Operations Have Been maintained in a Satisfactory Manner Financial operations have historic111y been maintained in a satisfactory manner and are supported by consistent modest customer base growth and annual rate reviews. Also contributing to the system's stable financial posi- tion is its ability to pass through rate increases from contracts with the Trinity River Authority and the City of Fort Worth for water and sewer service. Modestly Growing Customer Base The city benefits fonn its location within the Dallas-Fort Worth corridor where residential development and rapid population growth occurred during the past decade. Recent trends indicate that residential growth is continu- ing, but at a more modest pace. This growth has resulted in continued expansion of the system's customer base. Officials anticipate growth will continue at this modest pace due to a stable and growing area economy. Resident wealth and income levels are above state and national averages. Manageable Debt Position Debt Service costs continue to be manageable as evi- denced by the satisfactory coverage of fiscal year 1995 debt service requirements by system net revenues. After this issue, retirement of principal will be extremely rapid with all debt retired in 12 year.¡. Officials report no additional borrowing plans at this time. In addition to its outstanding bonded debt, the system is also responsible for a portion of outstanding debt of the Trinity River Authority for projects which benefit the system. Payment of this debt is considered an operating and maintenance expense of the city's system. Refunding Undertaken Due to Sale of Assets In June of this year the city sold the portion of its water and sewer system which serves the City of Watagua to Watagua. Proceeds of $9.2 million from that sales together with proceeds fonn this current offering will be utilized to retire all outstanding debt of the system. The I 2 As of December 12, 1996 I North Richland Hills, Texas (continued) Moody's Municipal Daily Rating Recap I refunding results in modest net present value savings to the city. I analyst: Dennis E. Porcaro, Jr. (214) 220-4347 I I I I I I I I I I I e Copy~ht 1996 by Moody's Inveslors Service. Inc., 99 Church Street. New York. New York 10007, All rights reserved. ALL INFORMA110N CONTAINED HEREIN IS COPYRIGHTED IN THE NAME OF MOODY'S INVESTORS SERVICE, INe. ("MOODY'S"), AND NONE OF sum INFORMA110N MAY BE COPIED OR OTHERWISE REPRODUCED. REPACKAGED. FURTHER TRANSMITrED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY sum PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANs WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRlTI'EN CONSENT. All infonollion contained herein is obtlined by MOODY'S from sources believed by it to be Iccunte Ind relilble, aecouse of Ibe possibility of humon or mechlnicol error IS well IS other flctor.¡, however, such infonnotion is provided "IS is" wilbout wlrrlnty of Iny kind Ind MOODY'S. in parlicular. mokes no represenlltion or wlmnty, express or implied, IS to the lceuney. limeliness, completeness, merchlntlbility or fitness for Iny plrticullr pUtpose of Iny such informllion, Under no circumstlnces shill MOODY'S hove Iny lilbility to Iny person or entity for (I) Iny loss or dlmlge in whole or in plrt coused by. resulting froDl. or rellting to. Iny error (neglÎ¡\ent or otherwise) or other circum5/ance or contingeney within or outside the control of MOODY'S or Iny of its directors. officers. employees or Igents in connection wilb Ibe procurement. collection, compilltion, lnalysis, intetprelltion, communicolion, publication or delivel)' of Iny such informltion. or (b) Iny direcL indirecL specill consequentill. compeDSltory or incidentll dlmlges whotsoever (includill6 without limilltion, lost profils). even if MOODY'S is Idvised in Idvlnce of the possibility of such dlmlges. resulting from the use of or inability to use, Iny such informllion. The credit ntill6s, if Iny. constituting plrt of the infonoltion conrained herein Ire, Ind Dlust be construed solely IS. stalements of opinion Ind not 5/atements of fact or recommendalions to pun:hue. sell or hold Iny securilies. NO WARRANTY, EXPRESS OR IMPUED. AS TO TIlE ACCURACY. TIMELINESS, COMPLETENEss, MERmANTABlllTY OR FlI'NESS FOR ANY PAR11CULAR PURPOSE OF ANY SUCII RA11NG OR OTlIER OPINION OR INFORMA110N IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Elch nlill6 Or other opinion must be weighed solely IS one factor in Iny inveSbnent decision mlde by or on behllf of Iny user of Ibe informllion contained herein. Ind each such user mustlccordill61y mike its OWn study Ind evllullion of elch security Ind of elch iSSller Ind guonnlor of. Ind each provider of credit support for, elch security thot it mlY consider purchlsing. holding or selling, Pursulnt to Section 17(b) of Ibe Securilies Act of 1933. MOODY'S hereby discloses thot most issuers of debt securities (includill6 COIpOnIIe Ind municipll bonds. debentures. notes Ind commercill piper) Ind preferred stock !'lied by MOODY'S have. prior to Issignment of Iny nlill6. Igreed to PlY to MOODY'S for Ippnisolend nting services rendered by it fees !'III6ing from $1.000 to $350.000, I I I I I I I' I I I I I I I I I I I I I I I NOTICE OF SALE AND BIDDING INSTRUCTIONS ON $5,135,000 CITY OF NORm RICIILAND HILLS, TEXAS (Tarrant County) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIFS 1996 Sealed Bids Due Monday, December 16, 1996, at 11:00 AM, CST THE SALE BONDS OFFERED FOR SALE AT COMPETITIVE BIDDING. , , The City of North Richland Hills, Texas (the "City") is offering for sale its $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 (the "Bonds"), ADDRESS OF BIDs. . . Sealed bids, plainly m~ked "Bid for Bonds", should be addressed to "Mayor and City Council, City of North Richland Hills, Texas", and delivered to the Assistant City ManagerlDirector of Finance at City Hall, 7301 N. E. Loop 820, North Richland Hills, Texas, prior to 11:00 AM, CST, on the date of the bid opening. All bids must be submitted on the Official Bid Form, without alteration or interlineation. BIDS BY TELEPHONE OR FACSIMILE, . . Bidders must submit SIGNED Official Bid Forms to David Medanich, First Southwest Company, 1700 Pacific Avenue, Suite 500, Dallas, Texas 75201, and submit their bid by telephone or facsimile (fax) on the date of the sale, Telephone bids will be accepted at (214) 953-4054, between 10:00 AM, CST and 10:30 AM, CST, Fax bids must be received between 10:00 AM, CST and 10:30 AM, CST, on the date of the sale at (214) 953-4050, attention Rhonda Van Iderstine. First Southwest Company will not be responsible for submitting any bids received after the above deadlines. First Southwest Company assumes no responsibility or liability with respect to any irregularities associated with the submission of bids if telephone or fax options are exercised, PLACE AND TIME OF BID OPENING . . , The bids for the Bonds will be publicly opened and read in the office of the Assistant City Manager at the City Hall at 11:00 AM, CST, Monday, December 16,1996. AWARD OF THE BONDS. , , The City Council will take action to award the Bonds (or reject all bids) at a meeting scheduled to convene at 7:30 PM, CST, on the date of the bid opening, and adopt an ordinance authorizing the Bonds and approving the Official Statement (the "Ordinance"). THE BONDS DESCRIPTION. . , The Bonds will be dated December 1, 1996 (the "Bond Date"), Interest will accrue from the Bond Date and will be due on September 1, 1997, and each March 1 and September I thereafter until the earlier of maturity or prior redemption. The Bonds will be issued only in fully registered form in any integral multiple of $5,000 for anyone maturity. The Bonds will mature on September 1 in each year as follows: MATURITY SCHEDULE Principal Principal Principal Year Amount Year Amount Year Amount 1997 $ 445,000 2001 $ 390,000 2005 $ 440,000 1998 370,000 2002 410,000 2006 460,000 1999 385,000 2003 425,000 2007 485,000 2000 375,000 2004 445,000 2008 505,000 BOOK-ENTRV-ONLY SYSTEM. . . The City intends to utilize the Book-Entry-Only System of The Depository Trust Company ("DTC"), See "The Bonds - Book-Entry-Only System" in the Official Statement. REDEMPTION. . . The City reserves the right, at its I?ption, to redeem Bonds having stated maturities on and after September I, 2005, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2004, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. PAYING AGENTIREGISTRAR, . . The initial Paying AgentlRegistrar shall be Bank One, Texas, N.A., Fort Worth, Texas (see "The Bonds - Paying AgentlRegistrar" in the Official Statement). SOURCE OF PAYMENT. , . The Bonds are payable, both as to principal and interest, solely from and secured by a first lien on and a pledge of the Net Revenues of the System after payment of maintenance and operating expenses (see "The Bonds - Security and Source of Payment"). Further details regarding the Bonds are set forth in the Official Statement. CONDITIONS OF THE SALE TYPE OF BIDS AND INTEREST RATES. . . The Bonds will be sold in one block on an "Allor None" basis, and at a price of not less than 99% of their par value plus accrued interest from the date of the Bonds to the date of delivery of the Bonds. Bidders are invited to name the rate(s) of interest to be borne by the Bonds, provided thai each rate bid must be in a multiple of lI8 of 1 % or lI20 of 1 % and the net effective interest rate must not exceed 15%. The highest rate bid may not exceed the lowest rate bid by more than 1.5% in rate. Interest rates for maturities shall be structured in ascending order such that for each succeeding maturity, rates shall be equal to or greater than the interest rate for the maturity of the preceding year. No more than two consecutive maturities are permitted to have the same coupon. No limitation is imposed upon bidders as to the number of rates or changes which may be used, However, all Bonds of one maturity must bear one and the same rate. No bids involving supplemental interest rates will be considered, BASIS FOR AWARD . . . The sale of the Bonds will be awarded to the bidder making a bid that confonns to the specifications herein and which produces the lowest True Interest Cost rate to the City, The True Interest Cost rate is that rate which, when used to compute the total present value as of the Dated Date of all debt service payments on the Bonds on the basis of semi-annual compounding, produces an amount equal to the sum of the par value of the Bonds plus any premium bid (but not interest accrued from the Dated Date to the date of their delivery). In the event of a bidder's error in interest cost rate calculations, the interest rates, and premium, if any, set forth in the Official Bid Fonn will be considered as the official bid. GOOD FAITH DEPOSIT. . . A Good Faith Deposit, payable to the "City of North Richland Hills, Texas", in the amount of $102,700.00, is required, Such Good Faith Deposit shall be a bank cashier's check or certified check, which is to be retained uncashed by the City pending the Purchaser's compliance with the terms of the bid and the Notice of Sale and Bidding Instructions, The Good Faith Deposit may accompany the Official Bid Fonn or it may be submitted separately. If submitted separately, it shall be made available to the City prior to the opening of the bids, and shall be accompanied by instructions from the bank on which drawn which authorize its use as a Good Faith Deposit by the Purchaser who shall be named in such instructions. The Good Faith Deposit of the Purchaser will be returned to the Purchaser upon payment for the Bonds. No interest will be allowed on the Good Faith Deposit. In the event the Purchaser should fail or refuse to take up and pay for the Bonds in accordance with the bid, then said check shall be cashed and accepted by the City as full and complete liquidated damages. The checks accompanying bids other than the winning bid will be returned immediately after the bids are opened, and an award of the Bonds has been made. DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS CUSIP NUMBERS. . . It is anticipated that CUSIP identification numbers will appear on the Bonds, but neither the failure to print or type such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Purchaser to accept delivery of and pay for the Bonds in accordance with the terms of this Notice of Sale and Bidding Instructions and the terms of the Official Bid Fonn. All expenses in relation to the printing or typing of CUSIP numbers on the Bonds shall be paid by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of the numbers shall be the responsibility of and shall be paid for by the Purchaser. DELIVERY OF BONDS. . . Initial Delivery will be accomplished by the issuance of one Initial Bond (also called the "Bond" or "Bonds"), either in typed or printed fonn, in the aggregate principal amount of $5,135,000, payable in stated installments to the Purchaser, signed by the Mayor and City Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts. Upon delivery of the Initial Bond, it shall be immediately canceled and one definitive Bond for each maturity will be registered and delivered only to Cede & Co" and deposited with DTC in connection with DTC's Book-Entry-Only System. Delivery will be at the principal office of the Paying AgentlRegistrar. Payment for the Bonds must be made in immediately available funds for unconditional credit to the City, or as otherwise directed by the City, The Purchaser will be given six business days' notice of the time fixed for delivery of the Bonds. It is anticipated that delivery of the Bond(s) can be made on or about January 22 ,1997, and it is understood and agreed that the Purchaser will accept delivery and make payment for the Bonds by 10:00 AM, CST, on January 22 ,1997, or thereafter on the date the Bond is tendered for delivery, up to and including ii _._--~--~..- I I February 5, 1997. If for any reason the City is unable to make delivery on or before February 5, 1997, the City shall immediately contact the Purchaser and offer to allow the Purchaser to extend its offer for an additional thirty days. If the Purchaser does not elect to extend its offer within six days thereafter, then its Good Faith Deposit will be returned, and both the City and the Purchaser shall be relieved of any further obligation. In no event shall the City be liable for any damages by reason of its failure to deliver the Bonds, provided such failure is due to circumstances beyond the City's reasonable control. I I CONDITIONS TO DELIVERY . , . The obligation of the Purchaser to take up and pay for the Bonds is subject to the Purchaser's receipt of (a) the legal opinion of Fulbright & Jaworski, L.L.P" Dallas, Texas, Bond Counsel for the City ("Bond Counsel"), (b) the no-litigation certificate, and (c) the certification as to the Official Statement, all as further described in the Official Statement. 'I, In order to provide the City with information required to enable it to comply with certain conditions of the Internal Revenue Code of 1986 relating to the exemption of interest on the Bonds from the gross income of their owners, the Purchaser will be required to complete, execute, and deliver to the City (on or before the 6th business day prior to the delivery of the Bonds) a certification as to their "issue price" substantially in the form and to the effect attached hereto or accompanying this Notice of Sale and Bidding Instructions. In the event the successful bidder will not reoffer the Bonds for sale, such certificate may be modified in a manner approved by the City. In no event will the City fail to deliver the Bonds as a result of the Initial Purchaser's inability to sell a substantial amount of the Bonds at a particular price prior to delivery. Each bidder, by submitting its bid, agrees to complete, execute, and deliver such a certificate by the date of delivery of the Bonds, if its bid is accepted by the City. It will be the responsibility of the Purchaser to institute such !D'I1dicate reporting requirements to make such investigation, or otherwise to ascertain the facts necessary to enable it to make such certification with reasonable certainty. Any questions concerning such certification should be directed to Bond Counsel. I I I LEGAL OPINIONS. . . The Bonds are offered when, as and if issued, subject to the approval of the Attorney General of the State of Texas. Delivery of and payment for the Bonds is subject to the receipt by the Purchaser of opinions of Bond Counsel, to the effect that the Bonds are valid and binding obligations of the City and that the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. I I CERTIFICATION OF OFFICIAL STATEMENT. . . At the time of payment for and Initial Delivery of the Bonds, the City will execute and deliver to the Purchaser a certificate in the form set forth in the Official Statement. I CHANGE IN TAX EXEMPT STATUS. . . .At any time before the Bonds are tendered for delivery, the Purchaser may withdraw its bid if the interest received by private holders on obligations of the same type and character shall be declared to be includable in gross income under present federal income tax laws, either by ruling of the Internal Revenue Service or by a decision of any Federal court, or shall be declared taxable or be required to be taken into account in computing any federal income taxes, by the terms of any federal income tax law enacted subsequent to the date of this Notice of Sale and Bidding Instructions. I GENERAL I FINANCIAL ADVISOR , . . First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company may submit a bid for the Bonds, either independently or as a member of a syndicate organized to submit a bid for 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 BLUE SKY LAWS. . . By submission of its bid, the Purchaser represents that the sale of the Bonds in states other than Texas will be made only pursuant to exemptions from registration or, where necessary, the Purchaser will register the Bonds in accordance with the securities law of the states in which the Bonds are offered or sold. The City agrees to cooperate with the Purchaser, at the Purchaser's written request and expense, in registering the Bonds or obtaining an exemption from registration in any state where such action is necessary, provided, however, that the City shall not be obligated to execute a general or special consent to service of process in any such jurisdiction. I NOT AN OFFER TO SELL, . . This Notice of Sale and Bidding Instructions does not alone constitute an offer to sell the Bonds, but is merely notice of the sale of the Bonds. The offer to sell the Bonds is being made by means of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement. Prospective purchasers are urged to carefully examine the Official Statement to determine the investment quality of the Bonds. I I issUANCE OF ADDITIONAL DEBT, . . The City does not anticipate the issuance of additional water and sewer system revenue bonds within the next 12 months. iii RATINGS. . . The outstanding Waterworks and Sewer System Revenue Bonds are rated "Aaa" by Moody's Investors Service, Inc. ("Moody'slt) and "AAA" by Standard & Poor's Ratings Services, A Division of The McGraw-Hill Companies, Inc. ("S&P") on the basis of municipal bond insurance policies issued by AMBAC Indemnity Corporation, Applications for contract ratings on this issue ha\1: been made to both Moody's and S&P. The results of their determinations will be provided as soon as possible. MUNICIPAL BOND INSURANCE. . . In the event the Bonds are qualified for municipal bond insurance the Financial Advisor will advise prospective bidders for the Bonds of the selected insurance company. Any fees to said insurance company will be Daid bv the City. Any fees to be paid to the rating agencies as a result of said insurance will be Daid bv the City. It will be the responsibility of the Purchæer to disclose the existence of insurance, its terms and the effect thereof with respect to the reoffering of the Bonds. THE OFFICIAL STATEMENT AND COMPLIANCE WITII SEC RULE 15c2-12 . . The City has prepared the accompanying Official Statement and, for the limited purpose of complying with SEe Rule 15c2-12, deems such Official Statement to be final as of its date within the meaning of such Rule for the purpose of review prior to bidding. To the best knowledge and belief of the City, the Official Statement contains infonnation, including financial infonnation or operating data, concerning every entity, enterprise, fund, account, or person that is material to an evaluation of the offering of the Bonds. The City has not entered into any previous continuing disclosure undertaking in a written contract or agreement specified in SEC Rule 15c2-12(b)(5)(i) and, accordingly, has not failed to comply with any such undertaking. Representations made and to be made by the City concerning the absence of material misstatements and omissions in the Official Statement are addressed elsewhere in this Notice of Sale and Bidding Instructions and in the Official Statement. The City will furnish to the Purchaser, or Purchasers, acting through a designated senior representative, in accordance with instructions received from the Purchaser(s), within seven (7) business days from the sale date an aggregate of 150 copies of the Official Statement including a like number of copies of any Supplement(s) reflecting interest rates and other terms relating to the initial reoffering of the Bonds. The cost of a reprinted Official Statement, if the Purchaser(s) shall so elect, and the cost of any Official Statement in excess of the number specified shall be prepared and distributed at the cost of the Purchaser(s). The Purchaser(s) shall be responsible for providing in writing the initial reoffering prices and other terms, if any, to the Financial Advisor by the close of the next business day after the award. Except as noted above, the City assumes no responsibility or obligation for the distribution or delivery of any copies of the Official Statement in connection with the offering or reoffering of the subject securities. CONTINUING DISCLOSURE AGREEMENT. . . The City will agree in the Ordinance to provide certain periodic information and notices of material events in accordance with Securities and Exchange Commission Rule 15c2-12, as described in the Official Statement under "Continuing Disclosure of Information". The Purchaser(s') obligation to accept and pay for the Bonds is conditioned upon delivery to the Purchaser(s) or (their) agent of a certified copy of the Ordinance containing the agreement described under such heading. ÁDDmONAL COPIES OF NOTICE, BID FORM AND STATEMENT. . . A limited number of additional copies of this Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement, as available over and above the normal mailing, may be obtained at the offices of First Southwest Company, Investment Bankers, 1700 Pacific Avenue, Suite 500, Dallas, Texas 75201, Financial Advisor to the City. On the date of the sale, the City Council will, in the Ordinance authorizing the issuance of the Bonds, confirm its approval of the form and content of the Official Statement, and any addenda, supplement or amendment thereto, and authorize its use in the reoffering of the Bonds by the Purchaser. TOMMY BROWN Mayor City of North Richland Hills, Texas A TrEST: PAlRICIA HUTSON City Secretary November 25, 1996 iv _.,_.._---_.._._~ I' I I 'I , I I I I , I; I I I I I I I I I, I BOND YEARS Bonds Accumulated Bonds Maturing Amount Bond Years Bond Years Maturing 1997 $ 445,000 333,750 333.75 1997 1998 370,000 647.500 981.25 1998 1999 385,000 1,058.750 2,040.00 1999 2000 375,000 1,406.250 3,446.25 2000 2001 390,000 1,852,500 5,298.75 2001 2002 410,000 2,357.500 7,656.25 2002 2003 425,000 2,868.750 10,525.00 2003 2004 445,000 3,448,75,0 13,973.75 2004 2005 440,000 3,850.000 17,823.75 2005 2006 460,000 4,485.000 22,308.75 2006 2007 485,000 5,213.750 27,522.50 2007 2008 505,000 5,933,750 33,456,25 2008 Average Maturity. . , . . , , , . , , . , . .. . . . . . . . . . . . . . 6.515 Years I I OFFICIAL BID FORM I Honorable Mayor and City Council City of North Richland Hills, Texas December 16,1996 Members of the City Council: I Reference is made to your Official Statement and Notice of Sale and Bidding Instructions, dated November 25, 1996 of $5,135,000 CITY OF NORTH RICHLAND HIlLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996, both of which constitute a part hereof. II For your legally issued Bonds, as described in said Notice of Sale and Bidding Instructions and Official Statement, we will pay you % of par and accrued interest from date of issue to date of delivery to us, for Bonds maturing and bearing interest as follows: I Principal Interest Principal Interest Principal Interest Maturity Amount Rate Maturity Amount Rate Maturity Amount Rate 9/1/97 $ 445,000 % 9/1/01 $ 390,000 % 9/1/05 $ 440,000 % 9/1/98 370,000 % 9/1/02 410,000 % 9/1/06 460,000 % 9/1/99 385,000 % 9/1/03 425,000 % 9/1/07 485,000 % 9/1/00 375,000 % 9/1/04 , 445,000 % 9/1/08 505,000 % I I Our calculation (which is not a part of this bid) of the True Interest Cost from the above is: 1RUE INTEREST COST % I We are having the Bonds of the following maturities insured by at a premium of $ , said Dremium to be oaid bv the atv. Any fees to be paid to the rating agencies as a result of said insurance will be Daid bv the atv. I, The Initial Bonds shall be registered in the name of , which will, upon payment for the Bonds, be canceled by the Paying AgentlRegistrar, The Bonds will then be registered in the name of Cede & Co. (DTC's partnership nominee), under the Book-Entry-Only System. I A bank cashier's check or certified check of the Bank" in the amount of $102,700,00, which represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening of this bid), and is submitted in accordance with the terms as set forth in the Official Statement and Notice of Sale and Bidding Instructions. I We agree to accept delivery of the Bonds utilizing the Book-Entry-Only System through DTC and make payment for the Initial Bond in immediately available funds in the Corporate Trust Division, Texas Commerce Bank National Association, Dallas, Texas, not later than 10:00 AM, CST, on January 22,1997, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Notice of Sale and Bidding Instructions, It will be the obligation of the purchaser of the Bonds to complete the DTC Eligibility Questionnaire. I The undersigned agrees to complete, execute, and deliver to the City. at least six business days prior to delivery of the Bonds, a certificate relating to the "issue price" of the Bonds in the fonn and to the effect accompanying the Notice of Sale and Bidding Instructions, with such changes thereto as may be acceptable to the City, I We agree to provide in writing the initial reoffering prices and other terms, if any, to the F1nancial Advisor by the close of the next business day after the award. I Respectfully submitted, I By I, Authorized Representative ACCEPTANCE CLAUSE I The above and foregoing bid is hereby in all things accepted by the City of North Richland Hills. Texas, subject to and in accordance with the Notice of Sale and Bidding Instructions, this the 16th day of December. 1996, A nEST: Mayor City of North Richland Hills, Texas I, I I I I I I I I I I I I I I I I I ISSUE PRICE CERTIFICATE The undersigned hereby certifies with respect to the sale of CITY OF NORTH RICHLAND HILLS, 1EXAS WA1ERWORKS AND SEWER SYS1EM REVENUE REFUNDING BONDS, SERIES 1996 (the "Bonds"), issued in aggregate principal amount of $5,135,000, as follows: I, The undersigned is the underwriter or the manager of the syndicate of underwriters which has purchased the Bonds from the City of North Richland Hills, Texas (the "Issuer") at competitive sale. 2. The undersigned and/or one or more other members of the underwriting syndicate, if any, have made a bona fide offering to the public of the Bonds of each maturity at the respective prices set forth below. 3. The initial offering price (expressed as a percentage of principal amount or yield and exclusive of accrued interest) for the Bonds of each maturity at which a substantial amount of the Bonds of such maturity was sold to the public is as set forth below: Principal Offering Principal Offering Amount Year of Price Amount Year of Price Maturing Maturity (%/Yiekl) Maturing Maturity (%/Yield) $ 445,000 1997 % $ 425,000 2003 % 370,000 1998 % 445,000 2004 % 385,000 1999 % 440,000 2005 % 375,000 2000 % 460,000 2006 % 390,000 2001 % 485,000 2007 % 410,000 2002 % 505,000 2008 % 4, The tenn "public," as used herein, means persons other than bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers. 5. The offering prices described above reflect current market prices at the time of such sales. 6, The undersigned and/or one or more other members of the underwriting syndicate, as the case may be, (have)(have not) purchased bond insurance for the Bonds. The bond insurance, if any, has been purchased from (the "Insurer") for a premium cost of $ (net of any nonguarantee cost, e.g., rating agency fees). The amount of such cost is set forth in the Insurer's commitment and is separately stated from all other fees or charges payable to the Insurer. The premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as a guarantor). The present value of the debt service savings expected to be realized as a result of such insurance, discounted at a rate equal to the yield on the Bonds which results after recovery of the insurance premium, exceeds the present value of the bond insurance premium. 7. The undersigned understands that the statements made herein will be relied upon by the Issuer in its effort to comply with the conditions imposed by the Internal Revenue Code of 1986, as amended, on the excludability of interest on the Bonds from the gross income of their owners, EXECUTED and DELIVERED this day of ,1996. (Name of Underwriter or Manager) By (Title) I I I I I I I I I I I I I I I, I I I I OFFICIAL STATEMENT Ratings: Moody's: "Applied For" S&P: "Applied For" See ("Other Information - Ratings" herein) Dated November 25, 1996 NEW ISSUE - Book-Entry-Only In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative núnimum tax on corporations, THE BONDS WILL NOT BE DESIGNATED AS "OUALIFIED TAX-EXEMPT OBUGA TIONS" FOR FINANCIAL INSTITUTIONS $5,135,000 CITY OF NORTH RICHLAND HILLS, TEXAS (Tarrant County) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 Dated Date: December 1, 1996 Due: September 1, as shown below PAYMENT TERMS, . ,Interest on the $5,135,000 City of North Richland Hills, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 (the "Bonds") will accrue from December I, 1996, (the "Dated Date") and will be payable September 1 and March 1 of each year commencing September I, 1997, and will be calculated on the basis of a 360-day year consisting of twelve 30- day months, The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein, Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying 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" herein, The initial Paying AgentlRegistrar is Bank One, Texas N,A" Fort Worth, Texas (see "The Bonds - Paying AgentlRegistrar"), AUTHORITY FOR IsSUANCE, . . The Bonds are issued pursuant to the general laws of the State of Texas, particularly Article717k, Vernon's Annotated Texas Civil Statutes ("V A TCS"), as amended, and an ordinance (the "Ordinance") passed by the City Council, and are special obligations of the City of North Richland Hills (the "City"), payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System (the "System") The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see "The Bonds - Authority for Issuance"). PURPOSE, . . The City's Waterworks and Sewer System has historically provided water and sewer services to the residents of the City and to the residents of the neighboring City of Watagua. The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within its boundaries to provide such services to its residents, and the proceeds of sale of such properties of the System, together with the proceeds from the sale of the Bonds. will be used to pay and discharge all outstanding revenue indebtedness of the City's System to restructure and reduce the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System, The outstanding revenue indebtedness to defeased and refunded is identified as follows: The outstanding revenue indebtedness to be defeased and refunded is identified as follows: $3,995,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1989. $1,740,000 Waterworks and Sewer System Revenue Bonds. Series 1989-A and $2,730,000 Waterworks and Sewer System Revenue Bonds, Series 1989-B (collectively, the "Refunded Bonds") in order to lower the overall debt service requirements of the City, and to pay the costs associated with the issuance of the Bonds, MATURITY SCHEDULE Amount Maturity Rate Yield Amount Maturity Rate Yield $ 445,000 1997 $ 425,000 2003 370,000 1998 445,000 2004 385,000 1999 440,000 2005 375,000 2000 460,000 2006 390,000 2001 485,000 2007 410,000 2002 505,000 2008 (Accrued Interest from December 1, 1996 to be added) REDEMPTION OPTION . , , The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2005, in whole or in part in principal amounts of $5,000 or any integral multiple thereof. on September 1,2004, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Redemption Provisions"), LEGALITY, , , The Bonds are offered for delivery when, as and if issued and received by the Underwriter and subject to the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L,L.P" Bond Counsel, Dallas, Texas (see Appendix C, "Form of Bond Counsel's Opinion"), DELIVERY, . . It is expected that the Bonds will be available for delivery through DTC on January 22 ,1997. No dealer, bro~r, salesman or other person has been authorized by the City or the Underwriter to give any information, or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having beèn authorized by the City or the Underwriter. This Official StaJement does not constitute an offer to sell Bonds in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction, Certain information set forth herein has been obtained from the City and other sources which are believed to he reliable but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriter, Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKEl' PRICES 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. TABLE OF CONTENTS OFFICIAL STATEMENT SUMMARy........................ 3 CITY OFFICIALS, STAFF AND CONSULTANTS...., 5 ELECfED OFFICIALS.,........................................,.."...., 5 SELECfED ADMINISTRATIVE STAfF ..................,........., 5 CONSULTANTS AND ADVISORS.................................... 5 INTRODUCTION .,.......,........,.,....,.....,...."...."....",.."",., 7 PLAN OF FINANCING.................................................., 7 THE BONDS........."..,.,..,.,...""...,...............,.,.,..."...."....,.8 THE SySTEM................................................................ 11 TABLE 1 - HISTORICAL WATER CONSUMPTION .........12 TABLE 2 - TEN LARGEST WATER CUSTOMERS .......... 12 TABLE 3 - MONTHLYWATERRATES........................,12 TABLE 4 - MONTHLY SEWER RATES ......................... 13 TABLE 5 - DEPOSITS ................................................, 13 DEBT INFORMATION ................................................ 15 TABLE 6 - PRo-FoRMA WATERWORKS AND SEWER SYSTEM REVENUE DEBT SERVICE REQUIREMENTS".,....,...".....,.....,......,.........",.. 15 FINANCIAL INFORMATION ..................................... 16 TABLE 8 - CONDENSED STATEMENT OF OPERATIONS. 16 TABLE 9 - COVERAGE AND FUND BALANCES ............ 16 TABLE 10 - V ALUE OF THE SYSTEM .......................... 17 TABLE 11 - CITY'S EQuITY IN SYSTEM .....................17 TABLE 12 - CURRENT INVESTMENTS..................,...... 19 SELECTED PROVISIONS OF THE BOND ORDINANCE ........,.....,..,.,..,.,...",.."..."..........,....,20 TAX MArI'ERS .",...,.,.,.,..."..."..."".""."",.."..."....,....,29 CONTINUING DISCLOSURE OF INFORMATION. 30 OTHER INFORMATION..............................................31 RATINGS...,...,.....",..........,..,.,..,.,....,..."".."...,."...,.., 31 LITIGATION"...,.........,.,....,....,....,...,.,..""..""."""",., 31 REGISTRATION AND QUALIACATION OF BONDS FOR SALE ............,........................,......,..............,..,31 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS .................................31 LEGAL OPINIONS...,."...,. ,...,'.,....,'.,...'..........,.., ....,.,.. 32 UNDERWRITING"...."...,.....,..,.,....,....,...,....,.,..,.".,.,.. 3 2 MISCELLANEOUS".""..",..",.."".".,..,.,..,.,....,..,.,..,.,.. 3 2 SCHEDULE OF DEFEASED BONDS ......SCHEDULE 1 SCHEDULE OF REFUNDED BONDS ... SCHEDULE II APPENDICES GENERAL INFORMATION REGARDING THE CITy".""., A EXCERPTS FROM THE ANNUAL FINANCIAL REPORT.. B FORM OF BOND COUNSEL'S OPINION........................ C The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement. 2 I I I I I I I I I I I I I I I I I I I OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official Statement, THE CITy.................................... The City of North Richland Hills, Texas is a political subdivision and municipal corporation of the State, located in Tarrant County, Texas. The City covers approximately 18.9 square miles (see "Introduction - Description of City"). THE BONDS.....,.................,.......... The Bonds are issued as $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996. The Bonds are issued as serial bonds maturing September 1, 1997 through September I, 2008 (see "The Bonds - Description of the Bonds"). PAYMENT OF INTEREST .............. Interest on the Bonds accrues from December I, 1996, and is payable September 1, 1997, 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"), AUTHORITY FOR isSUANCE ......... The Bonds are issued pursuant to the general laws of the State, including particularly Article 717k, VATCS, and an Ordinance passed by the City Council of the City (see "The Bonds- Authority for Issuance"), SECURITY FOR THE BONDS.......... The Bonds constitute special obligations of the City, payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System, The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see "The Bonds - Security and Source of Payment"). OPTIONAL REDEMPTION ............. The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2005 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2004 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Redemption Provisions"). 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 ....................... The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within the boundaries of Watagua to provide water and sewer services to its residents, and the proceeds from the sale of such properties of the System, together with the proceeds from the sale of the Bonds, will be used to pay and discharge all outstanding' revenue indebtedness of the City's System to restructure and the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System, RATINGS ..................................... The outstanding Waterworks and Sewer System Revenue 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") on the basis of municipal bond insurance policies issued by AMBAC Indemnity Corporation. Applications for contract ratings on the Bonds have been made to Moody's and S&P (see "Other Information - Ratings"). BOOK-ENTRy-ONLY SySTEM...................................... The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds (see "The Bonds - Book-Entry-Only System") . PAYMENT RECORD...................... The City has never defaulted in payment of its bonds. 3 SELECTED FINANCIAL INFORMATION Fiscal Water Usage (2) Net Average Year Estimated Average Available Annual Debt Coverage Ended City Day Peak Day Total For Service of 9/30 Population(l) Usage Usage Usage Debt ServIce Requirements Debt (2) 1992 48,142 7,435,682 13,906,000 2,721,877,000 $ 3,458,951 $ 2,078,133 1.66x 1993 48,300 9,599,984 22,170,000 3,503,994,000 3,638,132 2,076,013 1.75x 1994 50,000 6,820,134 13 ,451 ,000 2,487,349,000 4,077,659 2,074,073 1.97x 1995 50,376 8,384,008 13,487,000 3,060,163,000 3,137,454 2,080,506 l.51x 1996 50,650 10,033,529 14,614,000 3,662,238,000 3,462,765 1,772,899 1.95x (1) Source: City records. (2) Represents water usage and revenue coverage prior to the sale of a portion of the water system assets to the City of Watagua and the loss of customers served by the properties conveyed to Watagua, See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities to Watagua and its possible impact on the operations of the City's Water and Sewer System, For additional information ,regarding the City, please contact: Larry J. Cunningham Assistant City Manager City of North Richland Hills 7301 N.E. Loop 820 North Richland Hills, Texas 76182 (817) 581-5507 or David K. Medanich First Southwest Company 1700 Pacific Avenue Suite 500 Dallas, Texas 75201 (214) 953-4000 4 I I I I I I I I I I I I I I I I I I I ELECTED OFFICIALS Citv Council Tommy Brown Mayor Mark S. Wood Mayor Pro Tern-Place 3 Lyle E. Welch Councilmember-Place 1 Mack Garvin Councilmember-Place 2 Jo Ann Johnson Councilmember-Place 4 Don D. Phifer Councilmember -Place 5 Byron Sibbet Councilmember-Place 6 Linda Spurlock Sansoucie Counci1member-Place 7 SELECTED ADMINISTRATIVE STAFF Name C. A. Sanford Randy Shiflet Larry 1. Cunningham Larry Koonce Rex McEnûre Patricia Hutson Jim Browne Greg Dickens Barry leBaron CONSULTANTS AND ADVISORS CITY OFFICIALS, STAFF AND CONSULTANTS Year of Tenn Election Exoires Occuoaûon 1988 May, 1998 Real Estate Investments 1991 May, 1997 Real Estate Broker 1988 May, 1997 Reûred 1986 May, 1998 Reûred 1991 May, 1998 Homemaker 1996 May, 1997 Real Estate - Commercial 1988 May, 1998 Senior Analyst -- Lockheed 1987 May, 1997 V oûng Equipment Company Consultant Posiûon Year of Emolovrnent 1987 1973 1993 1996 1974 1980 1985 1987 1990 City Manager Assistant City Manager Assistant City Manager Director of Finance City Attorney City Secretary Parks and Recreaûon Director Director of Public Works Planning and Inspection Services Director Auditors .."....,....,.., .........,..,.."".,.....",..,.,...",...,.,....,.".."....,..............,....."....,....,.....",......................"........... KPMG Peat Marwick Fort Worth, Texas Consulting Engineers,........".,..".......,..,.....,................,.,..........."..."...,......"·"..,,,·..·· .....,.....,. .....,.., Knowlton- English-Flowers, Inc. Bedford, Texas Bond Counsel,........,........,.................,...,.".........."....,.........."...................".....,·...............,...... ...........", Fulbright & Jaworski L.L.P. Dallas, Texas Financial Advisor..........,.,...............,.........",.....,..."...................................,.,...·,.,..........,·...... .... ,.....,......... First Southwest Company Dallas, Texas 5 THIS PAGE LEFf INTENTIONALLY BLANK 6 I I I I I I I I I I I I I I I I I I I OFFICIAL STATEMENT RELATING TO $5,135,000 CITY OF NORTH RICHLAND HILLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 INTRODUCTION This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of $5,135,000 City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996, Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Ordinance to be adopted on the date of sale of the Bonds which will authorize the issuance of the Bonds, except as otherwise indicated herein (see "Selected Provisions of the Bond Ordinance"), There follows in this Official Statement descriptions of the Bonds and certain information regarding the City and its finances, All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Dallas, Texas. 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 CounciI/Manager form of government with a City Council comprised of the Mayor and seven Councilmembers, The term of office is two years with the terms of the Mayor and three of the Councilmembers' terms expiring in even-numbered years and the other terms of the four Council members 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 and social services, culture-recreation, public transportation, planning and zoning, and general administrative services, The 1990 Census population for the City was 45,895, while the estimated 1996 population is 50,650, The City covers approximately 18,29 square miles. PLAN OF FINANCING PURPOSE. . . The City's Waterworks and Sewer System has historically provided water and sewer services to the residents of the City and to the residents of the neighboring City of Watagua, The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within its boundaries to provide such services to its residents, and the proceeds of sale of such properties of the System, together with the proceeds from the sale of the Bonds, will be used to pay and discharge all outstanding revenue indebtedness of the City's System to restructure and reduce the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System, See "Sale of System Assets" for a more complete description of the sale of System properties to Watagua and its impact on the operations of the System, See Schedule I and Schedule II for a detailed listing of the Bonds that are to be defeased and refunded, along with their respective call dates, USE OF PROCEEDS. . . The proceeds from the sale of the Bonds will be applied approximately as follows: Deposit to Escrow Fund Deposit to Interest and Sinking Fund Underwriter's Discount Gross Bond Insurance Premium Costs of Issuance Total Uses of Funds $ 4,983,101.29 32,610,96 51,350,00 23,456.06 77.092.65 $ 5 167 610 96 7 THE BONDS DESCRIPTION OF THE BONDS , , , The Bonds are dated December I, 1996, and mature 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 will be payable on September I and March I, commencing September I, 1997. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for anyone maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Deposítory 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 pursuant to the Constitution and general laws of the State of Texas, particularly Article 717k, V A TCS, as amended, and by the Ordinance passed by the City CounciL SECURITY AND SOURCE OF PAYMENT. . . The Bonds are special obligations of the City payable, both as to principal and interest, solely from and, together with any additional parity bonds which may be issued in the future, secured by a first lien on and pledge of the Net Revenues of the System after the payment of maintenance and operating expenses, Maintenance and operating expenses include contractual payments which under Texas laws and their provisions are established as operating expenses. The Bonds are not a charge upon any other income or revenues of the City and shall never constitute an indebtedness or pledge of the general credit or taxing powers of the City, The Ordinance does not create a lien or mortgage on the System, except the Net Revenues, and any judgment against the City may not be enforced by levy and execution against any property owned by the City, As additional security for the payment of Bonds Similarly Secured, a Reserve Fund is required to be maintained in an amount at least equal to the average annual debt service requirements of the Bonds. Initially, the amount to be deposited to the credit of the Reserve Fund will be funded from the amount currently on deposit to the credit of the reserve fund maintained for the payment and security of the Refunded Bonds, As and when Additional Bonds are issued, any additional amount required to be maintained in the Reserve Fund will funded from the proceeds of sale of such Additional Bonds or accumulated with monthly deposits from the Net Revenues of the System over a period not to exceed 60 months from the date the Additional Bonds are delivered to the initial purchaser. In lieu of depositing cash or making monthly deposits to the Reserve Fund to accumulate any increase in the Reserve Fund by reason of the issuance of Additional Bonds and to the extent permitted by law, the City may provide for one or more surety bonds issued by a company or institution having a rating in the highest rating category by two nationally recognized rating agencies or services to be deposited to the credit of Reserve Fund. (See "Selected Provisions of the Bond Ordinance") PLEDGED REVENUES. . . All of the Net Revenues of the System with the exception of those in excess of the amounts required to establish and maintain the Reserve Fund and Interest and Sinking Fund are irrevocably pledged for the payment of the Bonds and interest thereon, The Bonds and any Additional Bonds hereafter issued on a parity therewith will be equally and ratably secured by a first lien upon the Net Revenues of the System. RATES. . . The City has covenanted in the Ordinance that it will at all times charge and collect rates for services rendered by the System sufficient to pay all operating, maintenance, replacement and improvement expenses, any other costs deductible in determining Net Revenues and to pay interest on and the principal of the Bonds and any additional parity bonds, and to establish and maintain the funds provided for in the Ordinance. The City has further covenanted that, if the System should become legally liable for any other indebtedness, it will fix and maintain rates and collect charges for the services of the System sufficient to discharge such indebtedness. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2005 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2004 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be redeemed, the City may select the maturities of Bonds to be redeemed, If less than all the Bonds of any maturity are to be redeemed, the Paying AgentlRegistrar (or DTC while the Bonds are in Book-Entry-Only form) shall determine by lot the Bonds, or portions thereof, within such maturity to be redeemed, If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying AgentlRegistrar on the redemption date, 8 I I I I I I I I I I I I I I I I I I I NOTICE OF REDEMPTION. . . Not less than 30 days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying AgentJRegistrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE, NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE. BOOK-ENTRy-ONLY SYSTEM. , , The Depository Trust Company ("DTC"), New York, New York, will act as secuntles 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 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' 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. 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 City as soon as possible after the Record Date (hereinafter defined). The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy), Principal and interest payments on the Bonds will be made to DTC, DTC's practice is to credit Direct Participants' accounts on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying AgentJRegistrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time, Payment of principal and interest to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants, DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City, Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered. 9 The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered, Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC. Infonnation concerning DTC and the Book-Entry System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City or the Underwriter(s), PAYING AGENTIREGISTRAR . , . The initial Paying Agent/Registrar is Bank One, Texas N,A., Fort Worth, Texas. In the Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perfonn the duties and services of Paying Agent/Registrar for the Bonds, Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. TRANSFER, EXCHANGE AND REGISTRATION. . . In the event the Book-Entry-Only System should be discontinued, the Bonds may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender thereof to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charg~s 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 principal office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be 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 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 City nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond. RECORD DATE FOR INTEREST PAYMENT, , , The record date ("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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. BONDHOLDERS' REMEDIES . . , Except for the remedy of mandamus to enforce the City's covenants and obligations under the Ordinance, the Ordinance does not establish other remedies or specifically enumerate the Events of Default with respect to the Bonds. The Ordinance does not provide for a trustee to enforce the covenants and obligations of the City, In no event will registered owners have the right to have the maturity of the Bonds accelerated as a remedy. The enforcement of the remedy of mandamus may be difficult and time consuming. No assurance can be given that a mandamus or other legal action to enforce a default under the Ordinance would be successful. Furthennore, the City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, such provision is subject to judicial construction. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce any remedies under the Ordinance would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Ordinance and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. In addition, while the City has covenanted to secure the Bonds by a first lien on the Net Revenues, Bond Counsel will opine only that a valid and enforceable lien has been granted on the Net Revenues. Bond Counsel has not been requested to, and has not, rendered any opinion as to the priority status of the pledge of the Net Revenues. IO I I I I I I I I I I I I I I I I I I I THE SYSTEM The City acquired an existing Waterworks and Sewer System from the Tarrant County Water Supply Corporation in September, 1971. The properties acquired consisted of complete water and sewer facilities located in the City and the Town of Watauga ("Watagua"), which adjoins the City to the west. Watagua granted a franchise to the City to operate a water and sewer system in Watagua for a period of 35 years, with the option to purchase that portion of the system within its boundaries at any time at a price (as certified by a registered Professional Engineer employed by the City, which is not less than the then appraised value of the portion being sold, See "Sale of System Assets" below. SALE OF SYSTEM AsSETS. .. On or about June 14, 1996, the City of North Richland Hills ("NRH") and the City ofWatagua, Texas ("Watagua") entered into a "Settlement and Purchase Agreement" (the "Agreement") providing for (i) the settlement of certain litigation between the two cities involving the right of Watagua to acquire certain water and wastewater properties of NRH located in Watagua and serving its residents and (ii) the sell and conveyance of such water and wastewater properties to Watagua, Under the tenn of such Agreement, Watagua has acquired certain water and wastewater transmission mains, distribution and collection lines, facilities and appurtenances used to provide water and wastewater service within the city limits of Watagua at an agreed purchase price of $9,200,000. The Agreement further provides a "Transition Period" of three years for the orderly transfer of the operations and maintenance of the properties purchased by Watagua, Pending Watagua assuming full responsibility for the operation and maintenance of its properties, NHR has agreed pursuant to a Facilities Operating Agreement to operate and maintain the facilities conveyed to Watagua for two years in return for cash payments of $1,500,000 per year to be paid in equal monthly installments of $125,000, The services to be rendered by NRH under the Facilities Operating Agreement include meter reading and billing for and on behalf ofWatagua but does not include the cost of water or charges for wastewater transportation and treatment to be paid the City of Fort Worth, After the two-year operation and maintenance period has concluded, NHR has agreed to read meters and bill accounts on behalf of Watagua for an additional year and Watagua has agreed to pay NHR the sum of $250,000 in equal monthly payments of $20,833.33 for such services, Watagua has the option to perfonn such meter and billing services and if such option is exercised, the amount to be paid NRH during the third year will be reduced to $140,000, The Agreement further addresses the joint use of certain properties conveyed to Watagua and retained by NRH, the cooperation of the parties to obtain for Watagua the necessary water and wastewater operating pennits from the State, the use of fire hydrants, the purchase of water from Fort Worth, the cooperation of the parties with respect to studies and investigations and other matters regarding the separation of properties from the NHR system to Watagua system. At the time of the conveyance of the water and wastewater properties to Watagua, approximately 7,269 customers will be transferred to the Watagua system and NRH will continue to provide water and wastewater collection services to approximately 15,594 customers, NRH estimates such sale and conveyance of water and wastewater properties will reduce its revenues by approximately $4,397,280 and reduce its overall operation and maintenance expenses by approximately $3,469,683, after complete separation of the systems occurs and Watagua assumes full responsibility for the operations and maintenance of its facilities. From the proceeds of sale of the properties, NRH will use approximately $9,200,000 to defease its outstanding revenue bond indebtedness, Following the issuance of the Bonds, the only outstanding revenue bond indebtedness of the NRH's System will be the Bonds. WATERWORKS AND SEWER SYSTEM, , , The City has contracted with the City of Fort Worth whereby the City of Fort Worth has committed to deliver 10,400,000 gallons of treated water daily through a connection on the western edge of the City and 10,300,000 gallons of treated water through a connection on the southern edge of the City at a cost of $1.45 per 1,000 gallons, Additionally, reserve capacity and peak hour demand is provided by 5 wells, 3 in the Paluxy sand and 2 deeper wells in the Trinity sand. On a non-continuous basis, these wells are capable of 1,300,000 gallons daily, Storage capacity is provided by five elevated storage tanks with a total capacity of 6,500,000 gallons and five ground storage tanks with a total capacity of 11,080,000 gallons, The City has a total daily delivery capacity of 20,700,000 gallons per day through the two connections to the Fort Worth system, and has approval from Fort Worth to take an additional 8,000,000 gallons daily through a delivery facility on the southwestern edge of the City, The City has entered into a long tenn contract with the Trinity River Authority of Texas ("'IRA"), whereby 1RA would provide treated water through a point of deli very on the eastern edge of the City, 1RA supplies water for the neighboring cities of Bedford and Euless and has now extended its system to provide water for the City, Colleyville and Grapevine. The City is supplied through a 16" tap on a 24" transmission main which will primarily serve the eastern and northern sections of the City, The tap will supply 5,000,000 gallons daily. The City is presently taking an average of 2,200,000 gallons per day from this 1RA connection, 1RA sold bonds in August, 1980, to finance the extension of the system. The City will pay monthly to 1RA an amount sufficient to defray its percentage of the debt service and other cost of operations from net revenues of the City's Waterworks and Sewer System, Such payments constitute operating and maintenance expenses of the City's Waterworks and Sewer System. The City also has 7 Paluxy Sand wells that are used exclusively for the golf course irrigation system. Management of the golf course is invoiced monthly for water usage based on the City's cost of water, wells and operating expense. 11 TABLE 1- HISTORICAL WATER CONSUMPTION (GALLONS) Fiscal Year 1991 1992 1993 1994 1995 1996 Peak Da~ Usage 18,911,OOO 13,906,000 22,170,000 13,451,000 13,487,000 14,614,000 Average Day Usage 7,682,460 7,435,682 9,599,984 6,820,134 8,384,008 10,033,529 TABLE - 2 TEN LARGEST WATER CUSTOMERS (BASED ON GALLONS CONSUMED) Customer H&M Food System N. Hills Medical Center 1MB Income Properties Birdville Independent School District Showdown Creek Apartments Waterford on the Green Town Oaks Apartment Philip W. Twente La Casta Mobile Home Central Pacific Housing Type of Property Food Processor Hospital and Professional Offices Shopping Mall School Apartments Apartments Apartments Apartments Mobile Home Park Apartments Total Usage 2,804,098,000 2,721,877,000 3,503,994,000 2,487,349,000 3,060,163,000 3,662,238,000 Estimated Fiscal 9-30-96 Water Usage 105,169,189 26,974,496 26,831,957 25,292,214 17,5]5,048 16,349,964 15,774,333 ]2,799,237 12,515,865 9,5]5,996 268,738,299 !MPACf FEEs. . . The City approved the collection of water and wastewater impact fees in June of 1990, Estimated % of Total Water Usage 2.87% 0,74% 0,73% 0,69% 0.48% 0.45% 0.43% 0.35% 0,34% 0,26% 7,34% The fees are charges imposed by the City for new development to generate funding, or recovering advances, for capital improvements or facility expansion costs by the City necessitated by or attributable to the new development. The fee structure is based on water service connection size, TABLE 3 . MONTHLY WATER RATES (EFFECTIVE SEPTEMBER 30, 1995) I, Billing policy where only one user or building is tied to the same meter: A. The monthly bill will be computed as follows. The minimum bill taken from Schedule A plus a volume charge of $2.45 per 100 cubic feet on monthly volume greater than the minimum volume from Schedule A. 2. Billing policy where more than one user or building is tied onto the same meter: It shall be the policy of the City to bill each home, homes, duplex, triplex, offices or any other building where more than one user is tied on the same meter at the rate of $9.00 per unit per month minimum for the first 267 cubic feet of water used, plus a volume charge calculated from Schedule A. 3. Billing for apartment complexes and trailer parks: A. $9.00 per month for each apartment or trailer for the first 267 cubic feet of water used plus a volume charge calculated from Schedule A. B. Apartment house or trailer park owner shall furnish a certified statement of occupancy prior to the 10th of each month. Failure to file occupancy statement will result in billing for 100% occupancy, Schedule A (Volume Used in Cubic Feet) Meter Size (inches) 3/4" ~ ~ ~ ----L- ~ 4" 6" and 8" Minimum Bill $ 9,00 $ 12,60 $ 17,11 $ 36.01 $ 46.82 $ 86.43 $ 144,06 $ 369,29 Volume Charge: $0,00 Minimum Bill for the first: 267 345 460 937 1,300 2,400 4,000 10,000 $2.45 for all above: 167 345 460 937 1,300 2,400 4,000 10,000 12 I I SEWER SYSTEM I The City has previously owned a complete sewage collection system within the corporate limits of the City and Watauga. The portion of the wastewater system outside the limits of Watauga was recently sold to Watauga. See "The System - Sale of System Assets" herein, The City has executed long-tenn contracts with the City of Fort Worth and the TRA to transport City's total effluent. Beginning in the year 1969, lRA issued bonds in the cumulative amount of $880,000 to construct, acquire or otherwise provide facilities necessary to transport and treat the effluent. Pursuant to contracts with the TRA, City is obligated to make annual payments to lRA in amounts sufficient to pay, when due, the total principal and interest on lRA's Bonds issued for these purposes, administrative and other operation and maintenance expenses chargeable to said bonds, All such annual payments have been declared operation and maintenance expenses of the Water and Sewer System, and are so accounted for in City's annual statements of income and expense, I I TABLE 4 - MONTHLY SEWER RATES (EFFECTIVE SEPTEMBER 30, 1995) 1. A monthly service charge shall be paid by all customers in the amount of $7.22. I 2, A monthly volume charge shall also be charged to all customers in the amount of $1.17 per 100 cubic feet of water used, or wastewater produced, as more specifically set forth hereinafter, I The monthly volume charge for residential customers will be based on the individual customer's average monthly water use during the previous winter quarter months of December, January and February; but in no event shall the volume used to compute this monthly charge exceed 2,500 cubic feet. The volumes used to compute these charges are based on the amount of water used by the residential customer as measured by a meter. Where no previous winter quarter average is available from the records, the volume to be used for this monthly volume charge shall be estimated, such estimated volume not to exceed 2,500 cubic feet per customer. I I 3, The monthly charges to commercial and industrial customers will be based on total water use for each month as measured by appropriate meters, with the provision that if a customer can show, to the satisfaction of the Director of Utilities, that a significant portion of the metered water usage does not enter the sanitary sewer system, the customer will be charged for only that volume entering the sewers, as determined by a method approved by the Director of Utilities. I 4. All Industrial Users: I To be served on system only by specific contract approved by Council for the particular Industrial Sewage or Waste involved. I 5. In the event a commercial customer is introducing sewage into the sewage system that creates unusual conditions or problems such as excessive oils, greases, or chemicals, the Director of Public Works shall advise the customer of his options, A. To correct at his own expense the conditions causing the excess, I B, To pay a monthly rate to be determined by the Director of Utilities to the City equal to the expense of maintained and/or treating the excessive waste, I 6, Billing policy where more than one user or building is tied onto the same water meter: I It shall be the policy of North Richland Hills to bill each home, homes, duplex, triplex, offices, or any other buildings where more than one user is tied onto the same water meter at $7.22 per month for each customer unit for sewer, plus a monthly volume charge of $1.17 per 100 cubic feet of water used by the building. The monthly volume charge to be calculated as noted in paragraph (2)B above with the exception that there shall be no volume limit as is the case for residential customers. I 7. Billing for apartment complexes and trailer parks: A. $10.00 per month service charge plus $7.22 per month per apartment or trailer plus a monthly volume charge of $1.17 per 100 cubic feet of water used by the apartment complex or park. I B. Apartment or trailer park owner shall furnish a certified statement of occupancy prior to the first of each month. Failure to file occupancy statement will result in billing for 100% occupancy, I I 13 TABLE 5 - DEPOSITS Calculation of the Deposit . . . The required deposit will be based on historical average consumption using not less than 12 consecutive months of data, computed using the current North Richland Hills water and wastewater rates. The required deposit will be 1.5 times the average bill. If no recent historical data is available the deposit win be taken from Schedule B. All residential customers will use Schedule B. Schedule B (Water and Sewer Deposits) (Effective July I, 1988) Customer TVDe Water Sewer Total Residential: All Sizes: $ 37.00 $ 18,00 $ 55,00 Commercial: 3/4" - 1/4" $ 55.00 $ 36.00 $ 91.00 112" - 4" 350.00 180.00 530.00 6" - 8" 4,300.00 2,710.00 7,010.00 Multi-family: All SizeslPer Unit $ 20.00 $ 19.00 $ 39.00 Rates established above for billings on or after February 3, 1994, include all current charges by the City's suppliers of purchased water and wastewater treatment. Any future changes in the City's cost of water purchased and wastewater treatment from the City's suppliers will be passed through to the City's customers. The changes will be maintained as a separate item by the Utility Billing Department and will be made available to utility customers upon request. Only changes in the cost of water purchases and sewer treatment will be passed through, 14 I I I I I I I I I I I I I I I I I I I DEBT INFORMATION TABLE 6 _ PRo-FoRMA WATERWORKS AND SEWER SYSTEM REVENUE DEBT SERVICE REQUIREMENTS Fiscal Year %of Ended This $5,135,000 Issue (I) (2) Principal 9130 Principal Interest Total Retired 1997 $ 445,000 $ 172,646 $ 617,646 1998 370,000 213,730 583,730 1999 385,000 198,930 583,930 2000 375,000 182,953 557,953 2001 390,000 167,015 557,015 38,27% 2002 410,000 150,050 560,050 2003 425,000 131,805 556,805 2004 445,000 112,467 557,467 2005 440,000 91,775 531,775 2006 460,000 71,095 531,095 80.72% 2007 485,000 49,015 534,015 2008 505,000 25,250 530,250 100.00% $ 5,135,000 $ 1,566,731 $ 6,701,731 (1) After the Refunding and Defeasance of the Outstanding Revenue Bonds there will be no outstanding waterworks and sewer system debt. (2) Average life of the issue - 6.515 years. Interest on the Bonds has been calculated at the average rate of 4.68% for purposes of illustration, AUTHORIZED BUT UNISSUED REVENUE BONDS, , , The City has no voted but unissued revenue bonds, and pursuant to State law is not required to approve its revenue bonds through election, ANTICIPATED ISSUANCE OF REVENUE BONDS, , , The City does not anticipate the issuance of additional revenue bonds within the next twelve months, PENSION FUND. , , The City provides pension benefits for all of its full-time employees through the Texas Municipal Retirement System ("TMRS"), a State-wide administered pension plan, The City makes annual contributions to the plan equal to the amounts accrued for pension expense, For more detailed information concerning the retirement plan, see Appendix B, "Excerpts from the City's Annual Financial Report". 15 FINANCIAL INFORMATION* TABLE 8 - CONDENSED STATEMENT OF OPERATIONS Fiscal Year Ended September 30, Operatini' Revenues 1996(1) 1995 1994 1993 1992 Water and Sewer Service Sales $ 18,768,310 $ 17,690,846 $ 17,214,168 $ 16,057,047 $ 14,047,924 Water and Sewer Connections 335,933 316,370 443,208 377,247 577,493 Sewer Transportation 8,026 15,881 13,931 14,443 Service Charges 486,300 485,120 281,635 321,824 318,7n Inspection Fees 45,306 33,675 43,910 29,709 43,592 Assessment Revenue 8,493 22,881 25,005 29,917 43,624 InvesttnentIncome 300,153 478,791 270,151 348,933 532,041 Total Revenues $ 19,944,495 $ 19,035,709 $ 18,293,958 $ 17,178,608 $ 15,577,829 Operatini Expenses Contractual Services $ 9,881,943 $ 9,066,359 $ 8,737,227 $ 8,359,887 $ 7,095,389 Personal Services 2,793,290 3,031,342 2,357,810 2,264,327 2,238,750 Repairs and Maintenance 1,277,898 939,192 816,149 663,289 538,842 Supplies 764,506 897,477 653,166 671,951 710,667 Franchise Fees 465,970 411,206 396,997 339,136 303,697 Payments in Lieu of Taxes 273,123 255,819 229,950 216,886 206,625 Administration Fees 1,025,000 1,296,860 1,025,000 1,025,000 1,025,000 Total Operating Expenses $ 16,481,730 $ 15,898,255 $ 14,216,299 $ 13,540,476 $ 12,118,970 Net Available for Debt Service $ 3,462,765 $ 3,137,454 $ 4,077,659 $ 3,638,132 $ 3,458,859 Water Connections City of North Richland Hills 17,066 16,962 16,858 16,540 16,152 City ofWatauga 7,337 7,332 7,328 7,256 7,156 Total 24,403 24,294 24,186 23,796 23,308 Sewer Connections City of North Richland Hills 15,765 15,709 15,653 15,597 15,085 City ofWatauga 7,137 6,659 6,180 6,090 6,114 Total 22,902 22,368 21,833 21,687 21,199 (I) Unaudited. TABLE 9 - COVERAGE AND FuND BALANCES (I) Average Annual Principal and Interest Requirements, 1997 - 2008.......,.............................,........................................,.......$ Coverage of Average Requirements by 9/30/96 Net Income..................................................,.........................,.................... 558,478 6.20 Times Maximum Principal and Interest Requirements, 1997 ........................................................................................................... $ 617,646 Coverage of Maximum Requirements by 9/30/96 Net Income...................................,...................,......,.......'.:................'.... 5.61 Times Interest and Sinking Fund, 9-30-96 .....'..'........................................................,...."......................,.,."".",........"..,............,.", $ 733,840 Reserve Fund, 9-30-96.....,.,............" ""..."..,.'..'..'..."" ,.".."....."..."""",.. ,.,. ,......." """""........ ,.."""""""" ",."" ..,..,."....."", $ 1.829,030 (I) Includes the Bonds being offered herein; excludes the Refunded and Defeased Bonds, * Represents water usage and revenue coverage prior to the sale of a portion of the water system assets to the City of Watagua and a reduction in the customer base served by the properties conveyed to Watagua. See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities and its possible impact and the operations of the City's Water and Sewer System, 16 I I I I I I I I I I I I I I I I I I I TABLE 10 - VALUE OF THE SYSTEM* Land and Improvements Buildings Utility Plant in Service Machinery & Equipment Construction in Progress 1995 $ 349,464 1,132,701 57,332,784 1,228,716 3,902,998 $ 63,946,663 Fiscal Year Ended September 30, 1994 1993 1992 $ 349,464 $ 349,464 $ 349,464 1,132,701 1,132,701 1,132,701 53,294,040 50,569,868 47,011,894 1,216,500 1,210,376 1,116,312 3,152,906 3,124,247 2,240,403 $ 59,145,611 $ 56,386,656 $ 51,850,774 1991 $ 349,464 951,288 45,831,236 1,075,433 989,977 $ 49,197,398 Less: Accumulated Depreciation 13,692,568 12,512,348 11,564,968 10,591,399 9,864,104 Value of System after Depreciation $ 50,254,095 $ 46,633,263 $ 44,821,688 $ 41,259,375 $ 39,333,294 * Represents water usage and revenue coverage prior to the sale of a portion of the water system assets to the City of Watagua and a reduction in the customer base served by the properties conveyed to Watagua, See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities and its impact on the operations of the City's Water and Sewer System, TABLE 11- CITY'S EQUITY IN SYSTEM** Fiscal Year Ended September 30, 1995 1994 1993 1992 1991 Net System Value $ 63,946,663 $ 59,145,611 $ 56,386,656 $ 51,850,774 $ 49,197,398 Less: Depreciation 13,692,568 12,512,348 11,564,968 10,591,399 9,864,104 $ 50,254,095 $ 46,633,263 $ 44,821,688 $ 41,259,375 $ 39,333,294 Add: Other Assets and Advances to Other Funds 639,675 663,170 669,588 680,584 644,729 Net Working Capital 952,016 1,996,244 2,231,759 3,128,373 2,538,993 Net Restricted Assets 3,863,654 3,724,832 4,535,037 5,736,327 6,685,819 Total $ 55,709,440 $ 53,017,509 $ 52,258,072 $ 50,804,659 $ 49,202,835 Obligations Revenue Debt and Other Liabilities $ 14,177,381 $ 15,127,031 $ 16,009,412 $ 16,837,913 $ 17,616,035 Less: I & S Fund & Reserve Fund 2,464,853 2,488,636 2,506,743 2,412,238 2,404,476 Net Revenue Debt $ 11,712,528 $ 12,638,395 $ 13,502,669 $ 14,425,675 $ 15,211,559 City's Equity in System $ 43,996,912 $ 40,379,114 $ 38,755,403 $ 36,378,984 $ 33,991,276 % of Equity in System 78,98% 76,16% 74.16% 71.61% 69,08% ** Includes properties recently sold to Watauga (see "Sale of System Assets" herein), FINANCIAL POLICIES Basis of Accountinf! , . ,The City's accounting records of the governmental fund revenues and expenditures are recognized on the modified accrual basis, Revenues are recognized in the accounting period in which they are available and measurable, Expenditures are recognized in the accounting period in which the fund liability occurred, if measurable, except for unmatured interest on general long-tenn debt and on special assessment indebtedness secured by interest-bearing special assessment levies, longevity and certain other employees' benefits are recognized when due. Proprietary Fund revenues and expenses are recognized on the accrual basis. Revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recognized in the accounting period incurred. Fiduciary Fund revenues and expenses or expenditures are recognized on the modified accrual basis. Transfers are recognized in the accounting period in which the interfund receivable and payable arise (see Appendix B - "Excerpts from The City of North Richland Hills, Texas Annual Financial Report for the Year Ended September 30,1995"), General Fund Balance, . . The City's policy is to maintain surplus and unencumbered funds equal to 12% to 15% of the next fiscal year's operating budget. 17 Debt Service Fund Balance. . . The City's policy is to maintain surplus funds equal to a minimum of three (3) months of debt service in the Debt Service Fund. City policy is to pay "first dollar" tax collections into the Debt Service Fund until the levy for debt service has been collected. The City budgets on a 97.5% collections ratio and the 2.5% non-collectible factor is accounted for in the General Fund, Use of Bond Proceeds. Grants. etc. . . . The City's policy is to use bond proceeds, grants, revenue sharing or other non-recurring revenues for capital expenditures only. Such revenues are never to be used to fund City operations, Budfletarv Procedures , . . Th~ City Charter establishes the fiscal year as the twelve-month period beginning October I, The departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the middle of March. The City Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August 15. The City Council shall hold a public hearing on the budget after giving at least 10 days notice of the hearing in the official newspaper of the City. The Council shall then make any changes in the budget as it deems advisable and shall adopt a budget prior to October 1, If the Council fails to adopt a budget then the budget proposed by the City Manager shall deem to have been adopted. During the fiscal year, strict budgetary control is maintained by various methods, including the review of departmental appropriation balances with purchase requisitions prior to their release to vendors, Departmental appropriations that have not been expended lapse at the end of the fiscal year, Therefore, funds that were budgeted and not used by the departments during the fiscal year are not available for their use unless appropriated in the ensuing fiscal year's budget. Fund Investments. . . The City's investment policy parallels state law which governs investment of public funds, The City currently utilizes the State of Texas Investment Pool for the bulk of its investments, The Pool investments are restricted to direct obligations of the U.S. Government and its agencies, INvEsTMENTS The City of North Richland Hills invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council of the City of North Richland Hills, Both state law and the City's investment policies are subject to change. LEGAL INvEsTMENTS. . . Under Texas law, the City is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities, (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality ofthe United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States, (4) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities, (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating finn not less than A or its equivalent, (6) certificates of deposit that are guaranteed or insured by the Federal Deposit Insurance Corporation or are secured as to principal by obligations described in the preceding clauses or in any other manner and amount provided by law for City deposits, (7) certificates of deposit and share certificates issued by a state or federal credit union domiciled in the State of Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in the clauses (1) through (5) or in any other manner and amount provided by law for City deposits, (8) fully collateralized repurchase agreements that have a defined tennination date, are fully secured by obligations described in clause (1), and are placed 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 P-1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at least A-lor P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S, or state bank, (II) 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. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service. The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is detennined by an index that adjusts opposite to the changes in a market index, 18 I I I I I I I I I I I I I I I I I I I INVESTMENT POLICIES, , , Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that include a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups, All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives conceming: (I) 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, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived," At least quarterly the investment officers of the City shall submit an investment report detailing: (I) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS, . , Under Texas law the City 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 City Council; (3) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in mutual funds in the aggregate to no more than 80% of the City's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and further restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; and (8) require local govemment investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements. TABLE 12 . CURRENT INVESTMENTS As of September 30, 1996, the City's investable funds were invested in the following categories: Description Percent Book Value Market Value Discount Notes 40.06% $ 13,914,075 $ 13,918,350 T-Bills 11.15% 3,871,336 3,876,786 Texpool 43.05% 14,951,015 14,950,268 Logic 5,75% 1,996,587 1,996,448 100.00% $ 34,733,013 $ 34,741,852 19 SELECTED PROVISIONS OF THE BOND ORDINANCE The City of North Richland Hills will adopt an ordinance (the "Ordinance") authorizing the Bonds, which will be in substantially the same form as the ordinances authorizing the outstanding bonds, selected provisions of which are shown below: SECTION 10: Definitions, For all purposes of this Ordinance 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: "Additional Bonds" - The additional revenue bonds or obligations which the City reserves the right to issue on a parity with the Bonds in accordance with the terms and conditions set forth in Section 18 hereof. "Average Annual Debt Service" - That average amount which, at the time of computation, will be required to pay the Debt Service of obligations when due and derived by dividing the total of such Debt Service by the number of years then remaining before final maturity. Capitalized interest payments provided from proceeds of Bonds Similarly Secured shall be excluded in making the aforementioned computation. "Bonds" - The "City of North Richland Hills, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996, authorized by this Ordinance. "Bonds Similarly Secured" - Collectively, the Bonds and any Additional Bonds, which shall be parity obligations being equally and ratably secured by and payable from a lien on and pledge of the Net Revenues of the System. "City" - The City of North Richland Hills, located in the County of Tarrant, 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 City 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 Bonds Similarly Secured without a fixed numerical rate, that such obligations bear, or would have borne, interest at the highest rate reached, or that would have applied to such obligations (using the index or method for computing interest applicable to such obligations) during the twenty-four (24) month period next preceding the date of computation; 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, "Fiscal Year" - The twelve month financial accounting period of the System ending September 30th of each year; provided, however, the City, by ordinance, may change the Fiscal Year to another period of not less than twelve calendar months, "Government Obligations" - Direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and United States Treasury obligations such as its State and Local Government Series in book-entry form. "Gross Revenues" - All income, receipts and revenues of every nature derived or received from the operation and ownership (excluding refundable meter deposits, restricted gifts and grants in aid of construction, impact fees charged developers and special assessments against landowners) of the System, including earnings and income derived from the investment or deposit of moneys in any special funds or accounts created and established for the payment and security of the Bonds Similarly Secured and other obligations payable solely from and secured only by a lien on and pledge of the Net Revenues. "Operating and Maintenance Expenses" - All current expenses of operating and maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair obligations payable from Net Revenues shall be deducted in determining Net Revenues. Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating and Maintenance Expenses shall include payments under contracts for the purchase of water supply, treatment of sewage or other materials, goods or services for the System to the extent authorized by law and the provisions of such contract. "Net Earnings" - The meaning assigned to such term in Section 18 hereof, "Net Revenues" - Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. "Outstanding" - When used in this Ordinance with respect to Bonds or Bonds Similarly Secured, as the case may be, means, as of the date of determination, all Bonds and Bonds Similarly Secured theretofore sold, issued and delivered by the City, except: 20 I I I I I I I I I I I I I I I I I I I (1) those Bonds or Bonds Similarly Secured cancelled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Bonds or Bonds Similarly Secured paid or deemed to be paid in accordance with the provisions of Section 28 hereof; and (3) those Bonds or Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Required Reserve - The amount required to be deposited and maintained in the Reserve Fund under the provisions of Section 14 of this Ordinance. "System" - All properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment and transmission of treated potable water and the collection, treatment and disposal of water-carried wastes, together with all future extensions, improvements, replacements and additions thereto; provided, however, that notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the tenn "System" shall not mean to include facilities of any kind which are declared not to be a part of the System and which are acquired or constructed by or on behalf of the City with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of the City which are not Bonds Similarly Secured but which are payable from and secured by other liens on and pledges of any revenues, sources or payments, not pledged to the payment of the Bonds Similarly Secured including, but not limited to, special contract revenues or payments received from any other legal entity in connection with such facilities, SECTION 11: Pledge, The City hereby covenants and agrees that all of the Net Revenues of the System, with the exception of those in excess of the amounts required to establish and maintain the special Funds created for the payment and security of the Bonds Similarly Secured, are hereby irrevocably pledged, equally and ratably, to the payment of the Bonds and Additional Bonds, if issued, and the interest thereon, as hereinafter provided. It is hereby ordained that the Bonds Similarly Secured, and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the City. SECTION 12: Water and Sewer Svstem Fund, The City hereby covenants and agrees that the Gross Revenues of the System shall be deposited, as collected and received, into a separate account (previously created, established and to be maintained with a depository bank of the City) known as the Waterworks and Sewer System Fund (herein called the "System Fund") and that the Gross Revenues of the System shall be kept separate and apart from all other funds of the City. All Gross Revenues deposited into the System Fund shall be pledged and appropriated to the extent required for the following uses and in the order of priority shown: FIRST: To the payment of all necessary and reasonable Operating and Maintenance Expenses as defined herein or required by statute to be a first charge on and claim against the Gross Revenues of the System, SECOND: To the payment of the amounts required to be deposited into the Interest and Sinking Fund (hereinafter defined) created and established for the payment of the principal of and interest on each of the Bonds Similarly Secured as the same become due and payable. THIRD: To the payment of the amounts required to be deposited into the Reserve Fund (hereinafter defined) to establish and maintain the Required Reserve in accordance with the provisions of this Ordinance or any other ordinance relating to the issuance of Bonds Similarly Secured, Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law, SECTION 13: Interest and Sinking Fund, For purposes of providing funds to pay the principal of and interest on the Bonds Similarly Secured as the same become due and payable, the City agrees to maintain on the books and records of the City, a separate and special account or fund known as the "Waterworks and Sewer System Interest and Sinking Fund" (the "Interest and Sinking Fund") and moneys deposited to the credit of such account shall be kept in a special fund maintained at the depository of the City. The City covenants that there shall be deposited to the credit of the Interest and Sinking Fund prior to each principal and interest payment date from the available Net Revenues an amount equal to one hundred per centum (100%) of the amount required to fully pay the interest on and the principal of the Bonds then falling due and payable, such deposits to pay maturing principal and accrued interest on the Bonds to be made in substantially equal monthly instailments on or before the fifteenth day of each month, beginning on or before the fifteenth day of the month next following the delivery of the Bonds to the initial purchaser(s). The required monthly deposits to the Interest and Sinking Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Interest and Sinking Fund and Reserve Fund is equal to the amount required to fully pay and discharge all Outstanding Obligations Bonds Secured (principal and interest) or, (ii) the Bonds are no longer Outstanding, 21 Accrued interest and premium, if any, received from the initial purchaser(s) of the Bonds, shall be taken into consideration and reduce the amount of the monthly deposits hereinabove required to be deposited into the Interest and Sinking Fund from the Net Revenues of the System. Additionally, any proceeds of the Bonds not required to complete the improvements and extensions to be made to the System shall be deposited into the Interest and Sinking Fund and may be taken into consideration and reduce the amount of monthly deposits required to be deposited into the Interest and Sinking Fund from the Net Revenues of the System. SECTION 14: Reserve Fund. For purposes of providing a reserve for the payment of the Bonds Similarly Secured, the City agrees and covenants to maintain a special fund or account known as the "Waterworks and Sewer System Reserve Fund" (the "Reserve Fund"), which Fund shall be kept and maintained at an official depository of City funds. AIl funds deposited to the credit of the Reserve Fund (excluding earnings and income derived or received from deposits or investments which may be transferred to the System Fund referenced in Section 13 of this Ordinance during such periods as there is on deposit in the Reserve Fund the full amount required to be accumulated and maintained therein) shall be used for the payment of (i) the principal of and interest on the Bonds Similarly Secured, when and to the extent other funds available for such purposes are insufficient, and (ii) the final principal amount of a series of Bonds Similarly Secured provided following such payment (x) such series of Bonds Similarly Secured is no longer deemed to be "Outstanding" as such term is defined herein and (y) the balance remaining on deposit to the credit of the Reserve Fund after making such payment is the total amount required to be accumulated and maintained in such Fund for the Bonds Similarly Secured to remain Outstanding. Additionally, in the event one or more surety bonds are used to provide all or part of the amount required to be maintained in the Reserve Fund as hereinafter authorized, amounts deposited to the credit of the Reserve Fund may also be used to restore or replenish the full amount of the surety bond coverage afforded by such surety bond. By reason of the issuance of the Bonds, the total amount required to be accumulated and maintained in the Reserve Fund shall be and is hereby determined to be $ (the "Required Reserve"), which amount equals at least the Average Annual Debt Service for the Bonds. Simultaneously with the delivery of the Bonds, the City shall cause to be deposited to the credit of the Reserve Fund an amount equal to the Required Reserve from funds on deposit in the reserve fund maintained for the payment and security of the Refunded Bonds and Defeased Bonds, As and when Additional Bonds are delivered or incurred, the Required Reserve shall be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt Service (calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding, as determined on the date each series of Additional Bonds are delivered or incurred, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be invested without restriction as to yield pursuant to subsection (d) of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional amount required to be maintained in the Reserve Fund shall be accumulated (i) by depositing cash to the credit of the Reserve Fund (immediately after the delivery of the then proposed Additional Bonds) in an amount to fully fund the Required Reserve, or, (ii) at the option of the City, by making monthly deposits, on or before the 15th day of each month following the month of delivery of the then proposed Additional Bonds, of not less than II60th of the additional amount to be maintained in said Fund by reason of the issuance of the Additional Bonds then being issued (or II60th of the balance of the additional amount not deposited immediately in cash), In lieu of depositing cash or making monthly deposits to the Reserve Fund to accumulate any increase in the Reserve Fund by reason of the issuance of Additional Bonds and to the extent permitted by law, the City may provide for one or more surety bonds issued by a company or institution having a rating in the highest rating category by two nationally recognized rating agencies or services to be deposited to the credit of Reserve Fund. Such surety bonds shall provide surety bond coverage in an amount sufficient to provide for all or part of the total amount then required to be accumulated and maintained in the Reserve Fund for the benefit of the Bonds Similarly Secured, When and so long as the cash and investments and/or surety bond coverage 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 (other than as the result of the issuance of Additional Bonds as provided in the preceding paragraph and the City has elected to accumulate all or a portion of the Required Reserve with Net Revenues of the System) , the City covenants and agrees to cause monthly deposits to the Reserve Fund to be made on or before the 15th day of each month (beginning the month next following the month the deficiency in the Required Reserve occurred by reason of a draw on the Reserve Fund or as a result of a reduction in the market value of investments held for the account of the Reserve Fund) in an amount equal to 1/60th of the Required Reserve from the Net Revenues of the System until the Required Reserve has been fully restored. Should all or a portion of the Required Reserve be provided by a surety bond and should the City be obligated to repay or reimburse the issuer of the surety bond to replenish and restore the full amount of surety bond coverage, monthly deposits from the Net Revenues shall be made to the Reserve Fund in the amounts required to restore the full amount of the surety bond coverage in accordance with the terms of such surety bond or any agreement executed in connection therewith. The City further covenants and agrees that, subject only to the payments to be made to the Interest and Sinking Fund, the Net 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 Ordinance and any other ordinance pertaining to the issuance of Additional Bonds. 22 I I I I I I I I I I I I I I I I I I I SECTION 15: Deficiencies: Excess Net Revenues. (a) If on any occasion there shall not be sufficient Net Revenues of the System to make the required deposits into the Interest and Sinking Fund and the Reserve Fund, then such deficiency shall be cured as soon as possible from the next available Net Revenues of the System, or from any other sources available for such purpose, (b) Subject to making the required deposits to the Interest and Sinking Fund and the Reserve Fund when and as required by this Ordinance, or any ordinance authorizing the issuance of Additional Bonds, the excess Net Revenues may be used by the City for any lawful purpose, SECTION 16: Investments - Securitvof Funds. (a) Money deposited to the credit of any Fund referenced in this Ordinance may, at the option of the City, be placed in time deposits or certificates of deposit secured (to the extent not insured by the Federal Deposit Insurance Corporation) by obligations of the type hereinafter described, or be invested, including investments held in book-entry fonn, in direct obligations of the United States of America and obligations guaranteed or insured by the United States of America, which, in the opinion of the Attorney General of the United States, are backed by its full faith and credit or represent its general obligations; 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, Such investments (except State and Local Government Series investments held in book entry fonn, which shall at all times be valued at cost) shall be valued in tenns 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 30 days of the date of passage of each ordinance authorizing the issuance of Additional Bonds, All interest and income derived from deposits and investments in the Interest and Sinking Fund immediately shall be credited to, and any losses debited to, the Interest and Sinking Fund, All interest and interest income derived from deposits in and investments of the Reserve Fund shall, subject to the limitations provided in Section 14 hereof, be credited to and deposited in the System Fund, All such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds, (b) That money deposited to the credit of any of the Funds referenced in this Ordinance, to the extent not invested, shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, SECTION 17: Payment of Bonds. While any of the Bonds are Outstanding, the City's Director of Finance (or other designated financial officer of the City) shall cause to be transferred to the Paying AgentlRegistrar, from funds on deposit in the Interest and Sinking 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 or comes due by reason of redemption prior to maturity; 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, SECTION 18: Issuance of Additional Bonds. Subject to the provisions hereinafter appearing as to conditions precedent which must be satisfied, the City reserves the right to issue, from time to time as needed, Additional Bonds for any lawful purpose. Such Additional Bonds may be issued in such fonn and manner as now or hereafter authorized by the laws of the State of Texas for the issuance of evidences of indebtedness or other instruments, and should new methods or financing techniques be developed that differ from those now available and in nonnal use, the City reserves the right to employ the same in its financing arrangements provided only that the following conditions precedent for the authorization and issuance of the same are satisfied, to wit: (a) The Director of Finance of the City (or other officer of the City then having the primary responsibility for the financial affairs of the City) shall have executed a certificate stating (a) that, to the best of his knowledge and belief, the City is not then in default as to any covenant, obligation or agreement contained in any ordinance or other proceeding relating to any obligations of the City payable from and secured by a lien on and pledge of the Net Revenues of the System that would materially atfect the security or payment of such obligations and (b) either (i) payments into all special funds or accounts created and established for the payment and security of all outstanding obligations payable from and secured by a lien on and pledge of the Net Revenues of the System have been made and that the amounts on deposit in such special funds or accounts are the amounts then required to be on deposit therein or (ii) the application of the proceeds of sale of such obligations then being issued will cure any such deficiency. (b) The Additional Bonds shall be scheduled to mature or be payable as to principal on March I or September 1 (or both) in each year the same are to be outstanding or during the tenn thereof, (c) The City has secured a certificate or opinion of an independent Certified Public Accountant to the effect that, according to the books and records of the City, the Net Earnings, for the preceding Fiscal Year or for 12 consecutive months out of the 15 months immediately preceding the month the ordinance authorizing the issuance of the Additional Bonds is adopted, are at least equal to 1,25 times the Average Annual Debt Service for all Bonds Similarly Secured then Outstanding after giving effect to the issuance of the Additional Bonds then being issued, In making a determination of the Net Earnings, the Accountant may take into consideration a change in the rates and charges for servièes and facilities afforded by the System that became effective at least sixty (60) days prior to the last day of the period for which Net Earnings are determined and, for purposes of satisfying the above Net Earnings test, make a pro fonna determination of the Net Earnings of the System for the period of time covered by his certification or opinion based on such change in rates and charges being in effect for the entire period covered by the Accountant's certificate or opinion, 23 As used in this Section, the tenn "Net Earnings" shall mean the Gross Revenues of the System after deducting the Operating and Maintenance Expenses of the System, but not depreciation charges or expenditures which, under generally accepted accounting principles, should be charged to capital expenditures. SECTION 19: Refunding Bonds. The City reservès the right to issue refunding bonds to refund all or any part of the Bonds Similarly Secured (pursuant to any law then available) upon such tenns and conditions as the City Council of the City may deem to be in the best interest of the City and its inhabitants, and if less than all such Bonds Similarly Secured then outstanding are refunded, the conditions precedent prescribed (for the issuance of Additional Bonds) set forth in Section 18(c) of this Section shall be satisfied and the Accountant's certificate or opinion required in Section 18(c) shall give effect to the Debt Service of the proposed refunding bonds (and shall not give effect to the Debt Service of the Bonds Similarly Secured being refunded following their cancellation or provision being made for their payment). SECTION 20: Obligations of Inferior Lien and Pledge. The City hereby reserves the right to issue obligations payable from and secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pledge securing the payment of the Bonds Similarly Secured, as may be authorized by the laws of the State of Texas, SECTION 21: Rates and Charges. For the benefit of the Holders of the Bonds and in addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance, the City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to establish and maintain rates and charges for facilities and services afforded by the System that are reasonably expected, on the basis of available infonnation and experience and with due allowance for contingencies, to produce Gross Revenues in each Fiscal Year sufficient: (a) To pay Operating and Maintenance Expenses, depreciation charges and replacement and bettennent costs, and (b) To produce Net Revenues sufficient to pay the principal of and interest on the Bonds Similarly Secured and the amounts required to be deposited in any reserve or contingency fund created for the payment and security of the Bonds Similarly Secured, and any other obligations or evidences of indebtedness issued or incurred that are payable only from and secured solely by a lien on and pledge of the Net Revenues of the System. (c) To produce Net Revenues equal to at least 1.20 times the annual Debt Service for the then Outstanding Bonds Similarly Secured, (d) Any other legally incurred indebtedness payable from the revenues of the System and/or secured by a lien on the System. SECTION 22: Maintenance of Svstem - Insurance. The City shall maintain the System in good condition and operate the System in an efficient manner and at reasonable cost. While any Bonds are Outstanding, the City agrees to maintain casualty and other insurance on the System of a kind and in an amount customarily carried by municipal corporations owning and operating similar properties. Nothing in this Ordinance shall be construed as requiring the City to expend any funds derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so, SECTION 23: Sale or Lease of Prooerties. The City, to the extent and in the manner authorized by law, may sell or exchange for consideration representing the fair value thereof, as detennined by the City Council of the City, any property not necessary or required in the efficient operations of the System, or any equipment not necessary or useful in the operations thereof or which is obsolete, damaged or worn out or otherwise unsuitable for use in the operation of the System, The proceeds of any sale of properties of the System shall be deposited in the System Fund, SECTION 24: Records and Accounts. The City hereby covenants and agrees that so long as any of the Bonds are Outstanding, it will keep and maintain separate and complete records and accounts pertaining to the operations of the System in which complete and correct entries shall be made of all transactions relating thereto, as provided by Article I I 13, V,A.T.C.S, or other applicable law. The Holders of any Bonds or any duly authorized agent or agents of such Holders shall have the right at all reasonable times to inspect such records, accounts and data relating thereto, and to inspect the System and all properties comprising same. The City further agrees that following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent finn 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 of the income and expenses of the System for such Fiscal Year. (2) A balance sheet for the System as of the end of such Fiscal Year. (3) A statement describing the sources and application of funds of the System for such Fiscal Year. 24 I I I I I I I I I I I I I I I I I I I (4) The Accountant's comments regarding the manner in which the City has carried out the requirements of this Ordinance and any other ordinance authorizing the issuance of Additional Bonds and his recommendations for any changes or improvements in the operations, records and accounts of the System. Expenses incurred in making an annual audit of the operations of the System are to be regarded as Operating and Maintenance Expenses, Copies of each annual audit shall be furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and, upon request, to the initial purchasers of the Bonds and subsequent 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. SECTION 25: Special Covenants, The City further covenants and agrees by and through this Ordinance as follows: (1) It has the lawful power to pledge the Net Revenues of the System to the payment of the Bonds to the extent provided herein and has lawfully exercised said power under the Constitution and laws of the State of Texas, and that the Bonds issued hereunder, together with the Additional Bonds, shall be ratably secured in such manner that no one bond shall have preference over any other bond of said issues. (2) The Net Revenues of the System have not been in any manner pledged or encumbered to the payment of any debt or obligation of the City or the System, save and except for the Bonds. (3) No free services of the System shall be allowed, and should the City or any of its agents or instrumentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. (4) To the extent that it legally may and so long as any of the Bonds are Outstanding, no franchise shall be granted for the installation or operation of any waterworks or sewer system other than those owned by the City, and the operation of any such system by anyone other than this City is hereby prohibited. (5) The City will comply with all of the tenns and conditions of any and all franchises, pennits and authorizations applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City has or will obtain and keep in full force and effect all franchises, pennits, authorizations and other requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation and maintenance of the System. SECTION 26: Remedv in Event of Default. In addition to all rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in payments to be made to the Interest and Sinking Fund or the Reserve Fund as required by this Ordinance or (b) defaults in the observance or perfonnance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the City and its officers to observe and perfonn any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedy herein provided shall be cumulative of all other existing remedies and the specification of such remedy shall not be deemed to be exclusive, SECTION 27: Special Obligations. The Bonds are special obligations of the City payable from the pledged Net Revenues of the System and the Holders thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation, SECTION 28: Satisfaction of Obligation of Citv, If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the Net Revenues of the System under this Ordinance and all other obligations of the City to the Holders shall thereupon cease, tenninate, and become void and be discharged and satisfied, Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Obligations shall have been irrevocably deposited in trust with the Paying Agentl Registrar, or an authorized escrow agent, which Government Obligations have been certified by an independent accounting finn to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof, The City covenants that no deposit of moneys or Government 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. 25 Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Govemment Obligations held in trust by the Paying Agent/Registrar or an authorized escrow agent, pursuant to this Section which is not required for the payment ofthe Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of 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 City, be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 29: Ordinance a Contract - Amendments, This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section, The City, may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent from the owners holding a majority in aggregate principal amount of the Bonds Similarly Secured then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the written consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal 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 Bonds Similarly Secured, as the case may be, required to be held for consent to any such amendment, addition, or rescission, SECTION 30: Mutilated - Destroved - Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar hannIess, All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits ofthis Ordinance equally and ratably with all other Outstanding Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or stolen Bonds. SECTION 31: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder as it appears in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice, Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar, All cancelled Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City. 26 I I I I I I I I I I I I I I I I I I I SECTION 46: Continuilll.! Disclosure Undertaking. (a) meanings ascribed to such terms below: Definitions. As used in this Section, the following, tenns have the "MSRB" means the Municipal Securities Rulemaking Board, "NRMSIR" means each person whom the SEC or its staff has detennined to be a nationally recognized municipal securities infonnation repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission, "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and detennined by the SEC or its staff to be, a state infonnation depository within the meaning ofthe Rule from time to time. (b) Annual Reports, The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1996) financial infonnation and operating data with respect to the City of the general type included in the final Official Statement approved by Section 34 of this Ordinance, being the infonnation described in Exhibit D hereto, Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit D hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial infonnation and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial infonnation and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial infonnation and operating data pursuant to this Section, The financial infonnation and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 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; 5. Substitution of credit or liquidity providers, or their failure to perfonn; 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. 27 The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section, (d) Limitations, Disclaimers, and AfTlendments, The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rul~, except that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein, The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date, UNDER NO CIRCUMSTANCES SHALL TIlE CITY BE LIABLE TO TIlE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY TIlE CITY, WHETIlER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN TIllS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMnED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or perfonning its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have pennitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) detennines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds, The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction detennines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering, If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided, 28 I I I I I I I I I I I I I I I I I I I TAX MA TIERS 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 Intemal 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 B. 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 (REIT), or a real estate mortgage investment conduit (REMIC). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by Section 55 of the Code and the environmental tax imposed by Section 59A of the Code will be computed, In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the City 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 City with the provisions of the Ordinance subsequent to the issuance of the Bonds. The Ordinance contains covenants by the City 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, 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, 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, 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, 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 and the environmental tax imposed by Sections 55 and 59 A, respectively, 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 C" earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for 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. 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. 29 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 mày be deemed to be received in the year of accrual even though there will 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 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. 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 Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of the Bonds. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Ùnder the agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified material events, to certain information vendors. This information will be available to securities brokers and others who subscribe to receive the infOlmation from the vendors. ANNUAL REpORTS. , . The City will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in this Official Statement under Tables numbered 1 through 12 and in Appendix B, The City will update and provide this information within 6 months after the end of each fiscal year ending in or after 1996, The City will provide the updated information to each nationally recognized municipal securities information repository ("NRMSIR") and to any state information depository ("SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC"), The City may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements, if the City commissions an audit and it is completed by the required time, If audited financial statements are not available by the required time, the City will provide audited financial statements when and if the audit report becomes available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation, The City's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and 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. MATERIAL EVENT NOTICES. , . The City will also provide timely !lotices of certain events to certain information vendors, The City will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes, (Neither the Bonds nor the Ordinance make any provision for debt service reserves, credit enhancement, or early redemption.) In addition, the City will provide timely notice of any failure by the City to provide information. data, or financial statements in accordance with its agreement described above under "Annual Reports." The City will provide each notice described in this paragraph to the SID and to either each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB"), AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID.., The City has agreed to provide the foregoing information only to NRMSIRs and the SID. The information will be available to holders of Bonds only if the holders comply with the procedures and pay the charges established by such information vendors or obtain the information through securities brokers who do so. 30 I I I I I I I I I I I I I I I I I I I LIMITATIONS AND AMENDMENTS, , , The City has agreed to update information and to provide notices of material events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above, The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the City to comply with its agreement. The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. If the City so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided, COMPLIANCE WITH PRIOR UNDERTAKINGS. . . The City has not previously failed to comply with its previous continuing disclosure agreements in accordance with Rule 15c2-12. OTHER INFORMATION RATINGS The outstanding revenue debt prior to this refunding has been rated "Aaa" by Moody's and "AAA" by S&P on the basis of the municipal bond insurance policy issued by AMBAC Indemnity Corporation with respect to the Bonds, Applications for contract ratings on this issue have been made to Moody's and S&P, An explanation of the significance of such ratings may be obtained from the company furnishing the rating, The ratings reflect only the respective view of such organization and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. LITIGATION It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material adverse financial impact upon the City or its operations. REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SEClIRE PuBLIC FUNDS IN TEXAS Section 9 of the Bond Procedures Act provides that the Bonds "shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas". The Bonds are eligible to secure deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the extent of their market value, For political subdivisions in Texas which have adopted investment policies and guidelines in accordance with the Public Funds Investment Act (V.T,C.A., Government Code, Chapter 2256), the Bonds may have to be assigned a rating of "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible investments for sinking funds and other public funds, No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states, 31 LEGAL OPINIONS The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect that the Bonds are valid and legally binding special obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. 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"), "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 Ordinance. 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. FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the City relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and the restricted Federal Securities were verified by KPMG Peat Marwick, certified public accountants. Such computations were based solely on assumptions and information supplied by First Southwest Company on behalf of the City. KPMG Peat Marwick has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the City will furnish a certificate, executed by proper officers, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendment thereto, on the date of such Official Statement, on the date of sale of said Bonds and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. The Ordinance authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Purchaser. TOMMY BROWN Mayor City of North Richland Hills, Texas A TrEST: PATRICIA HUfSON City Secretary 32 I I I I I I I I I I I I I I I I I I I SCHEDULE OF DEFEASED BONDS Schedule I Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989 Original Dated Date 3-1-1989 Original Maturitv 9-1-1997 9-1-1998 9-1-1999 9-1-2000 9-1-2001 Interest Rates 7,250% 7.250% 7,375% 7.375% 7.375% Maturity Amount $690,000 740,000 795,000 855,000 915,000 The maturities will be redeemed on September 1, 1999 at par, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A Original Interest Maturity Original Dated Date Maturitv Rates Amount 3-1-1989 9-1-1997 7.250% $300,000 9-1-1998 7,250% 325,000 9-1-1999 7.375% 345,000 9-1-2000 7.375% 370,000 9-1-2001 7.375% 400,000 The maturities will be redeemed on September 1, 1999 at par. Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B Original Dated Date 7 -1-1989 Original Maturitv 9-1-1997 9-1-1998 9-1-1999 9-1-2000 9-1-2001 9-1-2002 7-18-89* Interest Rates 6,800% 6.900% 6,900% 6,900% 6,900% 0.00% Maturity Amount $475,000 510,000 545,000 580,000 620,000 355,000 The maturities will be redeemed on September 1, 1999 at par, *This Capital Appreciation Bond will be redeemed on March 1, 1997. TIllS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I I I I I SCHEDULE OF REFUNDED BONDS Schedule n Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989 CAPITAL APPRECIATION BONDS Original Dated Date 4-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0,00% 0,00% 0,00% 0,00% 0.00% 0.00% 0,00% Maturity Amount $985,000 985,000 520,000 395,000 395,000 395,000 395,000 The maturities will be redeemed on March 1, 1997. Waterworks and Sewer System ReCunding Revenue Bonds, Series 1989-A CAPITAL APPRECIATION BONDS Original Dated Date 4-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0.00% 0.00% 0,00% 0,00% 0,00% 0.00% 0,00% Maturity Amount $425,000 425,000 220,000 165,000 165,000 165,000 165,000 The maturities will be redeemed on March I, 1997, Waterworks and Sewer System ReCunding Revenue Bonds, Series 1989-B CAPITAL APPRECIATION BONDS Original Dated Date 7-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0,00% 0,00% 0,00% 0,00% 0,00% 0.00% 0.00% Maturity Amount $310,000 665,000 400,000 370,000 380,000 270,000 270,000 The maturities will be redeemed on March I, 1997, TIllS 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 THE CI1Y . Amarillo NORTH RICHLAND HILLS ~ . Fort Worth Dallas * Austin . San Antonio TIllS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I I 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 460 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 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 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: Year 1953 1960 1970 1980 1981 1982 1983 1984 1985 1986 PODulation 500 8,662 16,514 30,592 31,250 31,850 33,100 35,550 36,500 40,650 Source (I) (2) (2) (2) (3) (3) (3) (3) (3) (3) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 (1) City Staff Estimate, (2) U.S, Census Bureau, (3) North Central Texas Council of Governments. (4) Revised U.S, Census Bureau total. PODulation 42,050 44,900 45,700 45,895 46,655 47,650 48,300 49,631 50,386 50,650 Source (3) (3) (3) (3) (4) (3) (3) (1) (1) (1) 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 50,650, more than triple the in excess population of 1970, North Richland Hills is the third largest city in Tarrant County. The citizens of the City, with a median age of 31,5, 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 DfFW 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: · The local unemployment rate has remained more than two points below state figures and almost two points below U.S, rates, since January 1993. Over the same period, North Richland Hills unemployment rate has stayed from between I and 1-1/2% points below figures for the entire Fort Worth/Arlington Metropolitan Statistical Area. · North Richland Hills' 1995/96 sales tax revenue exceeded prior year revenues by 4.21%, The City has enjoyed annual increases in sales tax revenue since the early 1980's. · The City recorded pennits for construction of new retail, office, service, medical, entertainment, warehouse, and institutional space valued at approximately $15.3 million in the first ten months of the 1996 calendar year, North Richland Hills also witnessed the absorption, expansion and/or renovation of existing commercial/institutional space with an estimated value of almost $10 million, A - I North Richland Hill's new 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 Tecnol and encourage their expansion. In addition, such an incentive enhances North Richland Hills' chances of landing new manufacturing and distribution facilities. With approximately 30% of the City remaining undeveloped, North Richland Hills 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, · 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 Tecnol 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 53,000 rounds of golf in 1996, 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 67 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. One privately owned and fully operational hospital is located within the City limits, while two nonprofit hospitals are located in nearby communities, These hospitals offer residents excellent health care. The City has a full service central library housing in excess of 93,000 volumes with a circulation of 362,000. With over 388 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. EDUCATION. .. Education for the citizens ofthe 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, Le, Pre-kindergarten-5, 6-8,9-12. Physical facilities include: 2 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 37% of the teachers in the District hold advanced degrees. The District employs approximately 2,355 total staff as follows: Certified Professionals Others 1,490 865 Teacher salaries in the District are as follows: Detzree Level Baccalaureate Masters Minimum Salary $24,560 $26,500 Maximum Salary $40,950 $43,750 A-2 I I Selected historical enrollment figures in the District are as follows: I Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 Enrollment 15,499 15,376 15,182 15,478 15,490 15,588 16,059 17,039 17,200 I I (1) As of October 30,1995. Source: Birdville Independent School District. I Year 1989 1990 1991 1992 1993 1994 1995 1996 Enrollment 17,529 18,505 19,100 19,358 18,929 19,039 20,098 20,454 (I) Education beyond the high school level is readily available, The Northeast campus of the Tarrant County Junior College District is located partially within the City limits. I 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, I 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 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. I 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. I AGE OF POPULATION (I) I Median Income Per Household,......,..,.,...,..,.................,...... ,$43,094 Median Age of Population".....,..,."........,........,..,........,.....,.." 3 1.5 I (I) Based on Bureau of Census, Department of Commerce. MAJOR EMPLOYERS IN THE CITY I Employer Tecnol Medical Products, Inc. Birdville Independent School District PLF Life Insurance Co. Columbia North Hills Hospital City of North Richland Hills Wal-Mart TCJC-N.E. Campus* H&M Food Systems, Inc. Bates Container Corporation Foley's Department Stores I I I I Product Disposable Medical and Hospital Supplies School District Insurance Medical Care Municipality Retail Sales Higher education Food Processor Corrugated Containers Department Store Estimated Number of Employees 1,129 875 875 615 460 400 340 250 220 200 I * Split with Hurst. Source: North Central Texas Council of Governments, Local Media, City of North Richland Hills. I A-3 BUILDING PERMIT INFoRMA'I1ION Fiscal Year 1992 1993 1994 1995 1996 Construction Commercial Number of Units 14 21 110 128 28 Source: City Records. Value $ 13,326,554 13,579,157 21,895,675 25,106,505 17,264,000 Residential Number of Units 281 420 434 268 269 it . A-4 Value $ 29,803,814 48,727,412 50,319,939 31,739,218 33,259,451 Total Units 295 441 544 396 297 Total Value $ 43,130,368 62,306,569 72,215,614 56,845,723 50,523,451 I I I I I APPENDIX B I EXCERPTS FROM 1èIE I CITY OF NORTH RICHLAND HILLS, 1EXAS ANNUAL FINANCIAL REPORT I For the Year Ended September 30, 1995 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 30,1995, and is not intended to be a complete statement of the City's financial condition, Reference is made to the complete Report for further infonnation. I I I I I I I I I I TIllS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I I I I I Certificate of Achievement for Excellence in Financial Reporting Presented to City of North Richland Hills, Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 1994 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. b-- J¿"Q .J President !#7-/~ Executive Director XXVI , , , KPMGipeat Marwick LLP 2500 City Center Tower II 301 Commerce Street Fort Worth. TX 76102 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 Hills, Texas, as of and for the year ended September 30, 1995, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City of North Richland Hills, Texas' management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. , We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of North Richland Hills, Texas, as of September 30, 1995, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in confonnity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated December 21, 1995 on our consideration of City of North Richland Hills, Texas' internal control structure and a report dated December 21, 1995 on its compliance with laws and regulations. Our audit was made for the purpose of fonning an opinion on the 1995 general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of North Richland Hills, Texas. Such infonnation has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. The supplemental infonnation as listed under the statistical section in the table of contents has been summarized from the City's records and was not subjected to the auditing procedures that were applied to the general purpose financial statements. Accordingly, we express no opinion on such infonnation. ¡(PMv fJAI 711~ /-L.¡J December 21, 1995 1 Member Firm of Klynveld Peat Marwiclc Goerdeler I I I I I I I I I I I I I I I I I I I (This page left blank intentionally) 2 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Balance Sheet - All Fund Types and Account Groups September 30, 1995 with comparative totals for September 30, 1994 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets and Other Debits Fund Funds Funds Funds Deposits and investments, at cost (note 2) $ 2,804,240 2,247,989 2,387,710 14,289,184 Investments, at market (notes 2 and 12) Receivables (net, where applicable, of allowances for estimated uncollectible amounts of $224,619): Accounts 135,303 184,330 Property taxes (note 3) 251,724 Other taxes 1,246,583 849,868 Accrued interest 34,293 2,849 139,073 Special assessments (note 4) 831,814 Intergovernmental Other 191,861 Prepaid expenses Due from other funds (note 14) 41 , 983 Inventories, at cost Restricted assets: Deposits and investments, at cost (note 2) Property, plant and equipment (net, where applicable, of accumulated depreciation) (note 5) Other assets (net where applicable, of accumulated amortization) Advances to other funds (note 14) 375,248 Amount available in debt service fund Amount to be provided for retirement of general long-term debt Total assets and other debits $ 4,911,639 3,267,453 2,390,559 15,444,401 3 I Exhibit 1 I I Fiduciary Proprietary Fund Types Fund Type Account Groups I Internal General General Totals Enterprise Service Agency Fixed Long-term (Memorandum Only) Funds Funds Fund Assets Debt ~ 1994 I 994,669 2,055,785 24,779,577 25,456,959 2,552,444 2,552,444 2, 143,721 ' I 2,652,898 17,116 2,989,647 3,035,205 I 251, 724 281,434 2,096,451 1, 686, 422 8,315 3,654 188,184 95,452 I 831,814 691,917 460,076 460,076 191,861 110, 849 25,319 31,800 57, 119 233,800 I 15,925 57,908 33,371 236,957 47,210 284, 167 338,773 I 8, 142, 156 8, 142, 156 7,968,609 I 65,092,633 1,593,643 84,280,723 150,966,999 133,513,783 I 228,961 228,961 276,424 I 480,679 855,927 893,043 2,328,884 2,328,884 2, 103, 386 I 51, 956, 101 51,956, 101 47,117,121 78,338,588 3,749,208 2,552,444 84,280,723 54,284,985 249,220,000 225,980,269 I I (Continued) I I I 4 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Balance Sheet - All Fund Types and Account Groups, Continued Governmental Fund Types Special Debt Capital General Revenue Service Projects Liabilities Fund Funds Funds Funds Bank overdraft $ 271,709 73, 174 Accounts payable 173,410 71,231 196,296 Accrued liabilities (notes 1 (1), 7 and 11) 725,578 27,493 61,675 93,774 Retainage payable 388,082 Deposits and other liabilities 114,958 10,912 Due to other funds (note 14) 18,744 Payable from restricted assets: Accrued interest payable Current portion of revenue bonds, golf course obligations and contractual obligation payable (note 7) Accounts payable Retainage payable Customers' deposits Developers' deposits Golf course obligations (note 7) Discount on golf course obligations General obligation bonds payable (note 7) Sales tax revenue bonds (note 7) Certificates of obligation (note 7) Note payable (note 7) Contractual obligation payable (note 7) Revenue bonds payable (note 7) Discount on revenue bonds payable Deferred revenue (notes 3 and 4) 277,210 735,674 Deferred compensation payable (note 12) Advances from other funds (note 14) Total liabilities 1,291,156 400,089 61,675 1 , 487 , 000 5 I Exhibit 1. Continued I I Fiduciary I Proprietary Fund Types Fund Type Account Groups Internal General General Totals Enterprise Service Agency Fixed Long-tenn (Memorandum Only) Funds Funds Fund Assets Debt ~ 1994 I 710,613 58,853 1, 114,349 370,380 1,462,790 73,429 1,977,156 2,587,172 I 424,863 654, 194 556,823 2,544,400 2,018,824 388,082 29,055 2,524 128,394 540,449 I 39, 164 57,908 33,371 85,596 85,596 101, 152 I 334, 167 334, 167 142,083 80,671 80,671 32,890 I 2,672 2,672 1,321,995 1,321,995 1,258,032 9,056 9,056 8,037 I 4,685,000 4,685,000 4,870,000 (73,788) (73,788) (78,400) 38,772,416 38,772,416 35,099,119 I 12,880,000 12,880,000 11,185,000 1,600,000 1,600,000 1,850,000 475,746 475,746 560,840 I 110,000 110,000 145,000 14,257,348 14,257,348 15,228,475 (194, 134) (194, 134) (208,527) I 1,012,884 1, 007, 456 2,552,444 2,552,444 2,143,721 855,927 855,927 893,043 I 24, 114,464 786,476 2,552,444 54.284,985 84.978,289 79,817,172 I (Continued) I I I I 6.: CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Revenues: Taxes (notes 1(0) and 3) Licenses and permits Charges for services (note 1(0» Fines Contributions Special assessments (note 4) Interest income Intergovernmental Drainage fees Proceeds from forfeiture of contraband Miscellaneous Total revenues Expenditures: Current: General government Public safety Culture and recreation Public works Capital outlay (note 1(0» Debt service: Retirement of general long-term debt (note 7) Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from bonds (note 7) Gain on sale of fixed assets Operating transfers in Operating transfers out Total other financing sources (uses) - net Excess (deficiency) of revenues and other sources over expenditures and other uses Fund balances at beginning of year Fund balances at end of year General Fund $ 14,395,000 724,870 2,077,013 747,463 241,393 171,533 18,357,272 4,413,618 9,160,080 1,986,904 1,928,183 17,488,785 868,487 291,540 (964,327) (672,787) 195,700 3,424,783 $ 3,620,483 See accompanying notes to general purpose financial statements. 9 Special Revenue Funds 3,543,044 146,557 416,823 838,360 656,993 121,007 200 5,722,984 523,609 793,387 9,411,753 10,728,749 (5,005,765) 2,000,000 2,512 (2,172,493) (169,981 ) (5, 175, 746) 8,043, 110 2,867,364 I Exhibit 2 I I Debt Capital Totals I Service Projects (Memorandum Only) Funds Funds ~ ~ 4,200,000 22, 138,044 20,008,305 I 724,870 887,968 2,077,013 2,428,672 747,463 775,510 I 146,557 145,835 655, 142 655, 142 249,976 65, 711 665,019 1,388,946 954,348 I 838,360 336,246 656,993 659,955 121,007 108,374 45,694 217,427 197,338 I 4,265,711 1,365,855 29,711,822 26,752,527 I 4,413,618 4,288,662 9,683,689 8,600,184 2,780,291 2,867,228 I 1,928,183 1,623,534 4,235,560 13,647,313 7,412,075 3,329,485 3,329,485 3,062,513 I 2,776,259 2,776,259 2,755,501 6,105,744 4,235,560 38,558,838 30,609,697 I (1,840,033) (2,869,705) (8,847,016) (3,857, 170) 6,000,000 8,000,000 3,895,000 I 29,397 29,397 2,065,531 1,397,604 3,757,187 4, 798, 317 (100,708) (3,237,528) (3,754,820) 2,065,531 7,326,293 8,549,056 4,938,497 I 225,498 4,456,588 (297,960) 1,081, 327 2, 103,386 9,500,813 23,072,092 21, 990, 765 I 2,328,884 13,957,401 22, 774, 132 23,072,092 I I I -. 10 I --...-. I Exhibit 4 I I I Totals (Memorandum Only) 1995 1m I 17,690,846 17,214,168 316,370 443,208 8,026 15,881 I 485,120 281,635 33,675 43,910 2,177,067 2,008,893 22,881 25,005 I 2,590,898 2,513,116 2,144,280 1,990,874 1,259,484 I 151,358 320, 190 20, 750 I 16,049 27,236,994 24,536,690 I 9,453,569 9,162,202 3,842,066 3,120,473 1,269,706 1,267,261 1, 096, 579 965,985 I 1, 221, 255 946,492 1,950,046 1,576,421 411,206 396,997 I 255,819 229,950 1,296,860 1,251,770 2,646,304 2,598,909 I 23,443,410 ' ß516,460 3,793,584 3,020,230 I 652,210 350,519 (1,495,696) (1,493,089) I (291,932) 20,942 (1, 135,418) (1,121,628) 2,658,166 1,898,602 I 282,590 (802,249) (1,243, 157) (519,659) (1,243,157) I 2, 138,507 655,445 19,925,408 19,269,963 22,063,915 19,925.408 I I 14 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Cash Flows - All Proprietary Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Internal Totals Enterprise Service (Memorandum Only) Funds Funds 1995 1994 Operating income $ 3,673,658 119,926 3,793,584 2,820,570 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,660, 197 289,849 1,950,046 1,576,421 Amortization 16,011 16,011 16,011 Gain on disposal of fixed assets (293,748) (293,748) Change in assets and liabilities: (Increase) decrease in accounts receivable (510,508) 12,607 ( 497, 901 ) (72,684) Decrease in inventories 54,419 187 54,606 21,180 (Increase) decrease in prepaid expenses 176,681 176,681 (49,303) (Increase) decrease in other assets 36,064 36,064 (16,802) Increase (decrease) in accounts payable (80) (2,740) (2,820) 149,822 Increase in accrued liabilities 173,371 107, 596 280,967 27,288 Increase (decrease) in other current liabilities (23,881) (23,881) 21,499 Increase in customers' deposits 63,963 63,963 65, 183 Total adjustments 1,352,489 407,499 1,759,988 1,738,615 Net cash provided by operating activities 5,026,147 527,425 5,553,572 4,559,185 Cash flows from noncapital financing activities: Increase (decrease) in bank overdraft 600,925 16,391 617,316 (734,919) Operating transfers (to) from other funds (584,549) 64,890 (519,659) (1,043,497) Net cash (used for) provided by noncapital financing activities 16,376 81, 281 97,657 (1, 778, 416) (Continued) 15 I Exhibit 5. Continued I CITY OF NORTH RICHLAND IDLLS, TEXAS Combined Statement of Cash Flows - I All Proprietary Fund Types, Continued Internal Totals I Enterprise Service (Memorandum Only) Funds Funds 1995 1994 I Cash flows from capital and related financing activities: Acquisition and construction I of capital assets $(3,680,900) (671,425) (4,352,325) (2,773,899) Capital grant received 1,176,131 1, 176, 131 Payments made refunding I of developers' deposits 1,019 1,019 (8,268) Principal paid on amounts due to and advances from other funds (31,323) (31,323) (33,371) 'I Principal paid on revenue obligations and note payable (1,320,000) (1,320,000) (1,205,970) Proceeds from contractual I obligations 180,000 Interest paid on revenue and golf course obligations and I note payable (1,175,902) (1,175,902) (1,255,247) Receipts from collections of amounts due from other funds and advances to other funds 7,930 7,930 11, 760 I Proceeds from sale of capital assets 12,815 12,815 91,409 Net cash used for I capital and related financing activities (5,023,045) (658,610) (5,681, 655) (4,993,586) Cash flows from investing I activities - interest on investments 514,506 125,735 640,241 350,519 I Net increase (decrease) in cash and cash equivalents 533,984 75,831 609,815 (1,862,298) Cash and cash equivalents at I beginning of year 8,602,841 1,979,954 10,582,795 12,445,093 Cash and cash equivalents at end of year $ 9, 136,825 2,055,785 11, 192,610 10,582,795 I (Continued) I I I 16 Exhibit 5. Continued CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Cash Flows - All Proprietary Fund Types, Continued Noncash capital and related financing activities: During 1995, bond discount amortization on revenue bonds totalled $335,350 ($320,957 imputed interest on zero coupon bonds and $14,393 amortization of discount on bonds). During 1995, developers contributed utility plant assets in the amount of $1,249,563. During 1995, the Parks and Recreation Facilities Development Fund contributed land, buildings, other improvements and equipment to the Aquatic Park Fund in the amount of $8,855,695. See accompanying notes to general purpose financial statements. 17 I I I I I I I I I I I I I I I I I I I Note (1) Note (2) Note, (3) Note (4) Note (5) Note (6) Note (7) Note (8) Note (9) Note (10) Note (11) Note (12) Note (13) Note (14) Note (15) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements September 30, 1995 Summary of Significant Accounting Policies Deposits and Investments Property Tax Special Assessments Fixed Assets Operating Leases Long-term Debt Employees' Retirement System Water and Sewer Contracts Contributed Capital Commitments and Contingencies Deferred Compensation Plan Segment Information - Enterprise Funds Interfund Balances Excess of Expenditures Over Appropriations 18 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (1) Summary of Significant Accounting Policies The City of North Richland Hills Home Rule Charter was adopted by the voters at an election held on November 3, 1964. The City operates 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 infrastructure; parks, library and recreational activities; the operation of a water and sewer system, and the operation of a water park and a golf course. The accounting policies of the City of North Richland Hills, Texas conform to generally accepted accounting principles as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted 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 As required by generally accepted accounting principles, these financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. The blended component unit, although a legally separate entity, is, in substance, part of the primary government's operations and so data from this unit is combined with data of the primary government. The blended component unit has a September 30 year end. Blended Component Unit - The Parks and Recreation Facilities Development Fund (PRD) serves all the citizens of the City and is used to account for the accumulation and use of resources to build and improve City parks. The PRD is reported as a special revenue fund. Complete financial statements for the individual component unit may be obtained at the City's offices. (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 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 certain assets and liabilities that are not recorded in funds. The following fund types and account groups are used by the City: GOVERNMENTAL FUND TYPES Governmental Funds are those through which most governmental functions of the City are financed. The acquisition, use, and balances of the City's expendable financial resources and the related liabilities (except those accounted for in the proprietary fund types) are accounted for through governmental funds. The measurement focus is based upon determination of changes in financial position, rather than upon net income determination. The following are the City's governmental fund types: (Continued) 19 I I I I I I I I I I I I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements General Fund - The General Fund is the general operating 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 - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments) that are legally restricted to expenditures for specified purposes. Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term and sales tax revenue debt principal, interest, and related costs. Capital Proiects Funds - The Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by the proprietary fund types). Financing is provided primarily by the sale of general obligation bonds. Certain projects are partially financed by special assessments. PROPRIETARY FUND TYPES Proprietary funds are used to account for activities that are similar to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. Under GASB Statement No. 20, "Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting", all proprietary funds will continue to follow Financial Accounting Standards Board (FASB) standards issued on or before November 30, 1989. However, from that date forward, proprietary funds will have the option of either 1) choosing not to apply future F ASB standards (including amendments of earlier pronouncements), or 2) continuing to follow new FASB pronouncements (unless they conflict with GASB guidance). The City has chosen not to apply future FASB standards. Following are the City's proprietary fund types: Entewrise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Internal Service Funds - Internal Service Funds are used to account for goods or services provided by one department to other departments of the City on a cost reimbursement basis. 20 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (8) Budgetary data for the Capital Projects Funds, the Special Investigation Fund and the Parks and Recreation Facilities Development Fund has not been presented in the accompanying general purpose financial statements as such funds are either budgeted over the life of the respective projects and not on an annual basis or an annual budget is prohibited by regulatory agencies. Accordingly, formal budgetary integration of these funds is not employed and comparison of actual results of operations to budgetary data for such funds are not presented. (9) Budgetary data for proprietary funds has not been presented since the reporting on such budgets is not legally required. (e) Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve' that portion of the applicable fund balance, is employed in the governmental funds. Encumbrances are reported as reservations of fund balances because they do not constitute expenditures or liabilities. (t) Deposits and Investments Deposits consist of cash, cash equivalents and a certificate of deposit. Investments consist of (1) investments in a public funds investment pool, (2) short- term investments with original maturities of three months or less from the date of acquisition and (3) Deferred Compensation Agency Fund investments in mutual funds. Investments are stated at cost, except for investments in the Deferred Compensation Agency Fund which are reported at market value. 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 Inventories of proprietary funds are valued at cost (first-in, first-out method). (h) Property. Plant and Equipment - Proprietary Funds Property, plant and equipment owned by proprietary funds is stated at cost or estimated fair market value at the date contributed. Depreciation has been provided on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives are as follows: Building and improvements Land improvements Utility plant in service Machinery and equipment 33 years 50 years 38-50 years 3-10 years (Continued) 23 I I I I I I I I I I I I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (i) General Fixed Assets General fixed assets are recorded as capital outlay expenditures in the General Fund, Capital Projects Funds, or Special Revenue Funds, and capitalized at cost in the General Fixed Assets Account Group. In the case of gifts or contributions, such assets are recorded in the General Fixed Assets Account Group at estimated 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 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 been capitalized. G) Other Assets - EnteqJrise Funds Other assets consist primarily of expenses incurred in connection with the issuance of certain outstanding revenue bonds and golf course obligations. Such charges are amortized on a straight-line basis over the lives of the respective bonds or obligations. (Ie) Advances to Other Funds - General Fund Noncurrent portions of long-term interfund loans receivable are reported as advances and 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. (1) Vacation and Sick Pay City employees are granted vacation and sick pay in varying amounts. In the event of termination, an employee is reimbursed for all accumulated unused vacation. No reimbursement is made for accumulated unused sick leave upon termination of employment. Vacation pay is accrued as vested and included in accrued liabilities in the accompanying combined balance sheet. Sick pay is recorded when taken. Accrued vacation pay that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that wiIl pay it. Amounts of accrued vacation pay that are not expected to be liquidated with expendable available financial resources are reported in the general long-term 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. 24 (Continued) · CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements Accrued vacation pay at September 30, 1995 consisted of the following: General Fund General Long-tenn Debt Account Group Water and Sewer (Enterprise) Fund Aquatic Park (Enterprise) Fund Support Services (Internal Service) Fund $ 117,856 556,823 117, 162 3,867 33,620 $ 829,328 (m) Restricted Assets Certain proceeds of Enterprise Fund bonds, as well as certain resources set aside for their repayment, are classified as restricted assets because their use is limited by applicable bond covenants. Retained earnings have been reserved for the excess of restricted assets over related liabilities to the extent such restricted assets were accumulated from revenues (i.e., in some cases, restricted assets were obtained in total or in part from bond proceeds). (n) Unbilled Charges Unbilled utility service charges of the Water and Sewer (Enterprise) Fund are estimated and recorded as receivables, net of estimated uncollectibles. (0) Transactions between Funds Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as 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 nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers and are included in the results of operations of both governmental and proprietary funds. The General Fund charges the Water and Sewer (Enterprise) Fund a franchise fee ($329,419 in 1995) and a payment in lieu of tax (i.e., property tax) ($187,302 in 1995). Such charges are recorded as tax revenues by the General Fund and operating expenses by the Water and Sewer (Enterprise) Fund. The General Fund charges the Water and Sewer (Enterprise) Fund, Capital Projects Fund, and the Parks and Recreation Facilities Development Fund (Special Revenue Fund) an administration fee for certain general and administrative services provided to such funds. Such charges are recorded as charges for services revenue by the General Fund ($1,399,526 in 1995), operating expense by the Water and Sewer (Enterprise) Fund ($1,025,000 in 1995), capital outlay expenditure by the Capital Projects Fund ($210,000 in 1995), and culture and recreation expenditure by the Parks and Recreation Facilities Development Corporation Fund ($164,526 in 1995). (Continued) 25 I I I I I I I I I I Ii I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The Internal Service Funds record charges to other funds for services rendered as operating revenues (see note 11). The respective funds record the related charges as operating expenses or expenditures, as appropriate. (p) Fund Equity Designated fund balances represent tentative plans for capital improvements as determined by the City Council for future use of financial resources. (q) Fund Deficit The Self-Insurance (Internal Service) Fund incurred an accumulated deficit of $69,686 at September 30, 1995 due to unexpected major medical claims. It is management's intent to cure this deficit through increased charges to the user funds. The accumulated deficit of $1,146,059 reported by the Golf Course (Enterprise) Fund is primarily a result of replanting expenses ($322,769 in 1990), loss on in-substance defeasance of golf course obligations ($217,646 in 1991) and interest expense in excess of operating income for 1990, 1991, 1992, 1994, and 1995. It is management's intent to cure this aecumulated deficit through increased operating income in future periods. Should the Golf Course Fund fail to accumulate the necessary resources to meet the current portion of the golf course obligations principal payments of approximately $185,000, management intends to utilize advances from the General Fund. (r) Comparative Data Comparative data for the prior year have been presented in the accompanying general purpose financial statements in order to provide an understanding of changes in the City's financial position and operations. However, complete comparative 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. Certain amounts presented in the prior year have been reclassified to conform to the 1995 presentation. (s) 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 conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 26 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (2) Deposits and Investments Substantially all operating deposits and investments are maintained in pooled deposits and investment accounts or are held by a third party administrator (i.e., deferred compensation plan - note 12). Interest income relating to pooled deposits and investments is allocated to the individual funds monthly based on each fund's pro-rata share of total pooled deposits and investments. Legal provisions generally permit the City to invest in certificates of deposit, repurchase agreements, public 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, 1995, the City did not own any types of securities other than those permitted by statute. At September 30, 1995, the carrying amount of the City's cash and certificate of deposit was $387,645 (exclusive of the bank overdraft of $1,114,349) and the bank balance was $485,632. The bank balance was entirely covered by Federal depository insurance or by collateral held by the City's agent pledged in the City's name. All investment securities managed by the City totaling $9,831,133 (excluding $22,702,955 in TexPool) are insured, registered, or held by the City or the City's agent in the City's name which is classified as a category one in accordance with GASB Statement No.3, "Deposits with Financial Institutions, Investments (including Repurchase Agreements) and Reverse Repurchase Agreements." TexPool, a public 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 of TexPool 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 form. At September 30, 1995, the market value of TexPool approximated its carrying value. At year-end the City's pooled deposits and investments were as follows: Total Carrying Value Market Value Cash and certificate of deposit U.S. Treasury Bill U.S. Government agencies' notes Public fund investment pool Total pooled deposits and investments $ 387,645 972,827 8,858,306 22,702,955 $ 32,921,733 387,645 981,391 8,919,494 22,702,955 32,991,485 (Continued) 27 I I I I, I I I I I I I I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements A reconciliation of the City's deposits and investments at September 30, 1995 follows: Canying Amount $ 6,301,769 Cash, cash equivalents and çertificate of deposit Investments: Public funds investment pool Short-tenn investments Investment in deferred compensation mutual fund (note 12) at market value Total investments 22,702,955 3,917,009 2,552,444 29,172,408 $ 35,474,177 $ 24,779,577 2,552,444 27,332,021 8, 142, 156 $ 35,474, 177 Unrestricted: Deposits and investments, at cost Investments, at market Total unrestricted Restricted deposits and investments, at cost (3) Property Tax The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real property and certain personal property located in the City. Tax liens attach as of February 1. The assessed value, net of exemptions, upon which the fiscal 1995 levy was based was $1,510,391,128. Property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed valuation and by City Charter to $1.50 per $100 valuation. The combined tax rate to finance general governmental service and debt service for the year ended September 30, 1995 was $.57 per $100 of assessed valuation. Taxes are due on receipt of the tax bill. Current tax collections for the year ended September 30, 1995 were 100.4% of the tax levy. Property taxes receivable at September 30, 1995 were $251,724. Property taxes levied for 1995 have been recorded as receivables, net of estimated uncollectibles. The net receivables collected during 1995 and those considered "available" at September 30, 1995 (i.e., property taxes collected within 60 days of year end) have been recognized as revenues in 1995. Prior year levies were recorded using these same principles. The remaining receivables have been reflected as deferred revenue ($98,057 at September 30, 1995). 28 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The appraisal of property within the City is the responsibility of a county-wide Appraisal District as required by legislation passed by the Texas Legislature. The Appraisal District is required under such legislation to assess all property within the Appraisal District on the basis of 100% of its appraised value and is prohibited from applying any assessment ratios. The value of property within the Appraisal District must be reviewed every three years; however, the City may, at its own expense, require annual reviews of appraised values. The City may challenge appraised values established by the Appraisal District through 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 Capital Projects Fund because they benefit the entire community and are financed primarily by general obligation bond proceeds. Special assessments are levied against properties deemed to be specifically benefited by the improvements. Costs of the projects are estimated and property owners are charged a proportionate share. Special assessments are recorded on the levy date and recognized as revenue when they become measurable and available (i.e., estimated to be collected within one year). Assessments which are not "available" at September 30, 1995 of $614,178 have been reflected as deferred revenue in the General Capital Projects Fund. (5) Fixed Assets A summary of changes in general fixed assets follows: Balance Balance September 30, Transfers! Completed September 30, 1994 Additions Retirements Construction 1995 Land $ 7,166,729 745,771 6,420,958 Buildings and improvements 11, 119,515 658,890 11,778,405 Improvements other than buildings 44,150,409 40, 645 3,769,406 47,879,170 Machinery and equipment 8,048,925 577,313 26,790 8,599,448 Construction in progress 8,838,467 13,307,484 8, 114,913 (4,428,296) 9,602,742 $ 79,324,045 13,884,797 8,928,119 84,280,723 Construction in progress at September 30, 1995 is composed of the following: Expended to September 30, 1995 Committed Project Authorization Street, drainage and park improvements ' $ 17, 487, 427 9,602,742 7,884,685 (Continued) 29 I I I I I I I I I I I I' I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General PurpQse Financial Statements The "project authorization" and "committed" figures above are based on open contracts at September 30, 1995. No future financing is anticipated to complete the above projects. A summary of proprietary fund property, plant and equipment at September 30, 1995 follows: Enterprise Funds Land Land improvements Building and improvements Other improvements Utility plant in service Machinery and equipment Construction in progress $ 2,853,235 2,845,853 4,169,218 6,865,181 57,332,784 2,171,066 3,902,998 80,140,335 (15,047,702) $ 65,092,633 Less accumulated depreciation Internal Service Funds 537,478 1,878,552 2,416,030 (822,387) 1,593,643 At September 30, 1995 the City was committed under utility construction contracts for approximately $337,000. (6) Operating Leases The City is committed under various l~ases for golf course equipment. These leases are considered for accounting purposes to be operating leases. Lease expense for the year ended September 30, 1995 amounted to approximately $73,000. Future minimum lease payments for these leases are as follows: 1996 1997 $ 51,903 48,972 $ 100,875 30 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (7) Lon~-tenn Debt The following is a summary of long-tenn debt transactions of the City for the year ended September 30, 1995 (in thousands of dollars): Amortization of discount on capital September 30, appreciation September 30, ~ Additions bonds Other Retirements 1995 General Long-tenn Debt Account Group: General Obligation $ 35,099 Bonds 6,000 338 2,665 38,772 Sales Tax Revenue Bonds 11, 185 2,000 305 12,880 Certificates of Obligation 1,850 250 1,600 Accrued Vacation Pay (note 1(1» 525 32 557 General Obligation ~ Note Payable - - - ~ ~ - - - General Long- $ 49,220 8,000 tenn Debt Total 338 32 3,305 54,285 - Enterprise Funds: $ 15,335 321 Revenue Bonds 1,285 14,371 Golf Course Obligations 4,870 4,870 Golf Course Contractual Obligation ~ - - - ~ ~ - - - Enterprise Funds $ 20,385 321 Total 1,320 19,386 - - Long-term debt at September 30, 1995 consisted of the following: General Obligation Bonds: $3,720,000 Series 1985 Refunding and Improvement Capital Appreciation Bonds discounted at 8.90% to 9.25%, due in annual installments of $620,000 beginning February 15,2000 through February 15, 2005; net of unamortized discount of $1,702,940 $6,000,000 Series 1986 Serial Bonds, $230,000 due February 15, 1996; interest at 7.5% $8,000,000 Series 1987 Serial Bonds due in annual installments of $305,000 to $330,000 through February 15, 1997; interest at 7.0% to 7.375% $ 2,017,060 230,000 635,000 (Continued) 31 I I I I I I I I I I I I I I I I· I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements $5,000,000 Series 1989 Serial Bonds due in annual installments of $180,000 to $230,000 through February 15, 1999; interest at 9.35% to 10.0% $2,735,000 Series 1991 Serial Bonds due in annual installments of $90,000 to $225,000 through February 15,2011; interest at 6.0% to 9.0% $17,450,000 Series 1992 Refunding Serial Bonds due in annual installments of $1,610,000 to $1,800,000 through February 15,2005; interest at 4.80% to 6.30% $5,440,000 Series 1992 Refunding Capital Appreciation Bonds discounted at 6.7% to 6.8%, due in annual installments of $465,000 to $1,865,000 beginning February 15,2006 through February 15, 2009; net of unamortized discount of $2,919,644 $4,400,000 Series B 1992-A Serial Bonds due in annual installments of $145,000 to $385,000 through February 15,2012; interest at 4.90% to 6.75% $3,865,000 Series 1993 Serial Bonds due in annual installments of $120,000 to $305,000 through February 15,2013; interest at 4.25% to 7.25% $6,000,000 Series 1995 Serial Bonds due in annual installments of $150,000 to $360,000 beginning February 15, 1997 through February 15,2015; interest at 5.0% to 7.0% Sales Tax Revenue Bonds: $7,500,000 Series 1992 Sales Tax Revenue Bonds due in annual installments of $245,000 to $630,000 through September 1,2012; interest at 5.75% to 8.60% $3,895,000 Series 1994 Sales Tax Revenue Bonds due in annual installments of $125,000 to $330,000 through September 1,2013; interest at 5.30% to 8.30% $2,000,000 series 1995 Sales Tax Revenue Bonds due in annual installments of $105,000 to $110,000 beginning September 1, 1997 through September 30, 2015; interest at 5.25% to 7.25% 32 $ 825,000 2,490,000 16,295,000 2,520,356 4,125,000 3,635,000 6,000,000 $ 38,772,416 $ 7,065,000 3,815,000 2,000,000 $ 12,880,000 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements Certificates of Obligation: $900,000 Series 1992 Revenue Certificates of Obligation due in annual installments of $30,000 to $80,000 through February 15,2012; interest at 4.9% to 6.75% $1,185,000 Series 1993 Revenue Certificates of Obligation due in annual installments of $235,000 to $265,000 through February 15, 1998; interest at 3.250 to 3.5% to 4.50% General Obligation Note Payable: $615,000 note payable, secured by future ad valorem tax revenues, due on monthly installments of $7,043, including interest at 6.69%, through October, 2002 Revenue Bonds: $8,025,000 Series 1989 Waterworks and Sewer System Improvement and Refunding Revenue Bonds due in annual installments of $645,000 to $915,000 through September 1,2001; interest at 7.25% to 7.375% $4,070,000 Series 1989 Waterworks and Sewer System Improvement and Refunding Capital Appreciation Bonds discounted at 7.60% to 7.75%, due in annual installments of $395,000 to $985,000 beginning September 1, 2002 through September 1, 2008; net of unamortized discount of $2,004,664 $3,500,000 Series 1989-A Waterworks and Sewer System Refunding Revenue Bonds due in annual installments of $280,000 to $400,000 through September 1,2001; interest at 7.25% to 7.375% $1,730,000 Series 1989-A Waterworks and Sewer System Refunding Capital Appreciation Bonds discounted at 7.60% to 7.75%, due in annual installments of $165,000 to $425,000 beginning September 1, 2002 through September 1, 2008; net of unamortized discount of $850,256 $5,715,000 Series 1989-B Waterworks and Sewer System Refunding Revenue Bonds due in annual installments of $445,000 to $620,000 through September 1,2001; interest at 6.80% to 6.90% 33 $ 850,000 750,000 $ 1,600,000 $ 475,746 $ 4,640,000 2,065,336 2,020,000 879,744 3,175,000 (Continued) " I I I I I I I I I I I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements $3,020,000 Series 1989-B Waterworks and Sewer System Refunding Capital Appreciation Bonds discounted at 7.10% to 7.20%, due in annual installments of $270,000, to $665,000 beginning September 1,2002 through September 1,2008; net of unamortized discount of $1,428,565 $ 1, 591, 435 $ 14,371,515 Golf Course Obligations: $4,870,000 Series 1991 Tax and Golf Course Revenue Refunding Bonds due in annual installments of $185,000 to $470,000 beginning September 1, 1996 through September 1, 2011; interest at 5.90% to 7.00% Golf Course Contractual Obligation: $180,000 Series 1994 Contractual Obligation due in annual installments of $35,000 to $40,000 beginning February 15, 1995 through February 15, 1999; interest at 4.75% to 6.70% $ 4,870,000 $ 145,000 The future annual requirements to amortize all debt outstanding as of September 30, 1995, follows: General Golf Year Sales Certificate Obligation Golf Course ending General Tax of Note Revenue Course Contractual September 30 OblilZation Revenue Obliiation ~ ~ Obli~ations Obliiation Thml 1996 $ 4,804.773 1,237,125 339,489 84,514 2,075,605 509.820 42,054 9,093,380 1997 4,768,764 1,285,545 344,780 84.514 2,073.283 508,905 39,722 9,105,513 1998 4,344,092 1,274,420 349,170 84,514 2.079,208 507,205 37,731 8,676,340 1999 4,042,041 ' 1,255.678 82,726 ' ,84,514 2,076,805 509,700 40,950 8,092,414 2000 4,037,111 1,239,800 80,723 84,514 2,075,126 506,060 8,023,334 200 1-2005 19,817,306 5,977,653 415,990 176,071 8,294,761 2,546,395 37,228,176 2006-2010 12,719,541 5,848,399 415,537 2,600,000 2,545,840 24,129,317 2011-2015 3.987.629 3.003.664 165.613 - 502.900 - 7.659.806 58,521,257 21,122,284 2,194,028 598,641 21,274,788 8,136,825 160,457 112,008,280 Less applicable interest 19.748.841 8.242.284 594.028 12l.W. 6.903.273 3.266.825 ~ 38.893.603 $ 38,772,416 12,880,000 .1..-.600,000 475,746 14,371,515 4,870,000 145,000 73,114,677 Authorized but unissued debt at September 30, 1995 consisted of general obligation bonds designated as follows: Street improvements Drainage $ 16,775,000 4,765,000 $ 21,540,000 34 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The Sales Tax Revenue Bonds are special obligations of the PRD (see note l(a» and are secured by a lien on and pledge of the gross sales tax revenues received from a 1/2 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 of the PRD. The Golf Course Obligations are direct obligations of the City, and are payable both as to principal and interest from an ad valorem tax levied against all taxable property within the limits prescribed by law and a pledge of the net revenues received from the City's golf course facilities. It is the intent of management to repay these obligations from the net revenues of the golf course. Therefore the debt is reflected as a fund obligation. The ordinances authorizing the issuance of Waterworks and Sewer System Revenue Bonds created the Interest and Sinking Fund and Reserve Fund. The gross revenues of the waterworks and sewer system, after deduction of reasonable expenses of operations and maintenance, are pledged to such funds in amounts equal to the total annual prìncipal and interest requirements of the bonds and amounts required to maintain the Reserve Fund. At September 30, 1995, the City was in compliance with these requirements. In prior years, the City defeased certain general obligation bonds, revenue bonds and golf course obligations by placing the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 1995, $31,890,000 of bonds and obligations outstanding are considered 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 contribution plan in the state-wide Texas Municipal Retirement System (TMRS), one of over 650 administered by TMRS, an agent multiple-employer public employee retirement system. It is the opinion of the TMRS management that plans in TMRS are substantially defined contribution plans, but they have elected to provide additional voluntary disclosure to help foster a better understanding of some of the nontraditional characteristics of the plan. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (200%) of the employee's accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit which is a theoretical 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 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 if the (Continued) 35 I I I I I I I: I I I I. I I: I II I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements sum of the employee's accumulated contri butions with interest and the employer- financed 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, but he must leave his accumulated contributions in the plan. If a member withdraws his own money, he is not entitled to the employer-financed monetary credits, even if he was vested. The plan provisions are adopted by the City Council, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. (b) Contributions The contribution rate for employees is 7%, and the City's matching percent is currently 200%, both as adopted by the City Council. Under the state law governing TMRS, the City contribution rate is annually determined by the actuary. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new 25-year period. Currently, the unfunded actuarial liability is being amortized over the 25-year period which began January 1995. 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 for it, there is a one-year lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. The City's total payroll in fiscal year 1995 was $13,257,775, and the City's contributions were based on a covered payroll of $11,863,073. Both the City and the covered employees made the required contributions, amounting to $1,456,739 (10.20% of covered payroll for the months in calendar year 1994, 8.34% normal cost plus 1.86% to amortize the unfunded actuarial liability and 11.30% for the months in calendar year 1995,9.01 % normal cost plus 2.29% to amortize the unfunded actuarial liability) for the City and $922,714 (7%) for the employees. The required contribution represents $1,172,674 of normal cost and $284,065 to amortize the unfunded actuarial liability . The City adopted changes in the plan since the previous actuarial valuation, which had the effect of increasing the City's contribution rate for 1995 by 0.44% of covered payroll. There were no related party transactions. (c) Funding Status and Progress Even though the substance of the City's plan is not to provide a defined benefit in some form, some additional voluntary disclosure is appropriate due to the nontraditional nature of the defined contribution plan which had an initial unfunded pension benefit obligation due to the monetary credits granted by the City for services rendered before the plan began and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No.5 of the Governmental Accounting Standards Board (GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee 36 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements pension plans, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee pension plans. The City's pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASB 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1994. Because of the money-purchase nature of the plan, the interest rate assumption, currently 8.5% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each city's plan, but the market value of assets for TMRS as a whole was 98.6% of book value as of December 31, 1994. Pension Benefit Obligation Annuitants currently receiving benefits Terminated employees Current employees: Accumulated employee contributions, including allocated invested earnings Employer-financed vested Employer-financed non vested Total pension benefit obligation $ 1,145,324 1,512,275 8,731,476 12,563, 103 3,412,102 27,364,280 Net Assets Available for Benefits. at Book Value 20,715,825 $ 6,648,455 Unfunded Pension Benefit Obligation The book value of assets is amortized cost for bonds and original cost for short-term securities and stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate are the same as those used to compute the pension benefit obligation. The numbers above reflect the adoption of changes in the plan since the previous actuarial valuation, which had the effect of increasing the pension benefit obligation by $1,034,695. (Continued) 37 I I I I I I I I I I' I, I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (d) Trend Infonnation Trend infonnation gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Additional trend infonnation relating to the City may be found in the required supplementary infonnation in the City's Comprehensive Annual Financial Report. Trend information for the City based upon actuarial computations for the years ended December 31, 1994, 1993 and 1992 is as follows: 1992 1993 1994 A vailable plan assets as a percentage of the pension benefit obligation 79% 72% 76% Unfunded pension benefit obligation as a percentage of annual covered payroll 36% 61% 56% Employer contribution as a percentage of annual covered payroll 11% 11% 12% (9) The City's contributions to the plan were in accordance with actuarially determined requirements for 1992 through 1994. Ten-year trend infonnation for TMRS as a whole may be found in the TMRS annual financial report. Water and Sewer Contracts The City has several individual contracts with the City of Fort Worth (Fort Worth) and the Trinity River Authority of Texas (TRA) for the purchase of treated water and for the transportation, treatment and disposal of sanitary sewage and other waste. The initial tenns of the contracts range from twenty-one to forty-eight years and expire at various dates from 1997 through 2023. While the provisions of each of the contracts vary, each contract basically requires the City to pay varying amounts based on the costs associated with water purchased and sewage transported and/or 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. Included in the general debt service fund expenditures is approximately $20,000 of these debt service costs. Purchases of treated water and charges for the transportation, treatment and disposal of sewage and other wastes during 1995 amounted to approximately $4,877,000 and $3,160,000, respectively. 38 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (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: Total Water and Golf Aquatic Enterprise Sewer Course Park Funds Balance at beginning of year $ 20,567,718 1,882,372 22,450,090 Contributions from developers 1,249,563 1,249,563 Contributions of fixed assets from other City departments 8,855,695 8,855,695 Contributions from capital grants 1.176.131 1.176.131 Balance at end of year $ 22,993,412 1 ,882,372 8,855,695 33,731,479 (11) Commitments and Contingencies The City has participated in a number of State and Federally assisted grant programs. These programs are subject to financial and compliance audits by the grantors or their representatives, the purpose of which is to insure compliance with conditions precedent to the granting of funds. City management believes that any liability for reimbursement which may arise as the result of these audits would not materially affect the City's financial position. The City is defendant in several lawsuits, primarily for worker's compensation and general liability claims. City management believes that any ultimate liability on these suits, if any, will not materially affect the City's financial position. The U.S. Environmental Protection Agency in 1995 issued an Administrative Order requiring improvements to the City's wastewater collection system, to avoid wastewater overflows. The City expects to spend approximately $650,000 through fiscal year 1998 on a study to determine necessary corrective action. Costs of compliance with the Administrative Order are not known at this time. The City is self-insured for substantially all claims except for fire coverage on buildings and contents, general liability insurance on the water park, and life insurance coverage. Under its current stop loss policy, the City pays medical claims up to $100,000 per individual per year and/or approximately $1,970,000 per year in the aggregate. The Self- Insurance (Internal Service) Fund covers medical expenses, worker's 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, 1995 include an estimate of the eventual loss on claims arising prior to year end, including claims incurred but not yet reported. Changes in the balances of claims liabilities during the past year are as follows: Year ended September 30 Unpaid claims, beginning of year Incurred claims (including IBNR) Claim expense Unpaid claims, end of year $ 495,567 2,726,304 (2,646,304) $ 575,567 (Continued) 39 I I I, I I I I I I I I I I I I I I I I CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The City has a contract with a management company for operations of the city-owned public golf course. The contract expires January 1998, however, the City has the option of canceling the contract anytime after January 1996. In addition to monthly management fees, a contingent managemen~ fee is owed if the golf course revenues exceed a certain amount that varies from year to year. Contingent management fees incurred for 1995 were approximately $77,000. Total management fees for operations were approximately $160,000 for the year ended September 30, 1995. (12) Deferred Compensation Plan The City offers its employees a deferred compensation plan which falls under Internal Revenue Code Section 457. Virtually all employees are eligible to participate in the plan. The deferred compensation plan allows the deferral of individual Federal income taxes until funds are withdrawn, Funds may be withdrawn at termination, retirement, death or unforeseeable emergency. Employees may contribute a maximum of 33.33% of salary or $7,500, whichever is less. All amounts deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are legally the property of the City (until paid or made available to the participants), subject only to the claims of the City's general creditors. Participant's rights under the plan are equal to those of the general creditor's of the City in an amount equal to the fair value of the deferred amount for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. Plan assets have been invested in a mutual fund (note 2}. (13) Segment Information - EnteI:prise 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 provides water and sewer services to residents of the City and certain nonresidents. The Golf Course Fund accounts for the operations of the City's public golf course. The Aquatic Park Fund accounts for the operations of the City's water park. Financial segment information as of and for the year ended September 30, 1995 is as follows: Water Golf Aquatic and Sewer Course Park Total Operating revenues $ 18,556,918 2,177,067 1,767,831 22,501,816 Depreciation expense 1,249,062 276,936 134, 199 1 , 660, 197 Operating income 2,758,395 358,565 556,698 3,673,658 Operating transfers in 67,700 67,700 Operating transfers out (652,249) (652,249) Net income 1, 170, 504 16,778 635,204 1,822,486 Capital contributions 2,425,694 8,855,695 1 1 , 281, 389 Property, plant and equipment additions, net 4,413,483 49,506 8,866,758 13,329,747 Working capital (deficit) (303,817) 43,849 758,340 498,372 Total assets 61,975, 179 6,833,969 9,529,440 78,338,588 40 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Not.. to OoruU'lil Purpo.o PlftAtuHtAl StAtOtftOftt" Water Golf Aquatic and Sewer Course Park Total Bonds/obligations payable $ 14,371,515 5,015,000 19,386,515 Retained earnings (accumulated deficit) 21,003,500 (1, 146,059) 635,204 20,492,645 Total fund equity 43,996,912 736, 313 9,490,899 54,224,124 14) Interfund Balances At September 30, 1995, interfund balances consisted of the following: Due from Due to Advances to Advances from other funds other funds other funds other funds Enterprise Funds: Water and Sewer Fund $ 15,925 480,679 Golf Course Fund 39,164 855,927 General Fund 41,983 375,248 Drainage Utility Fund 18.744 $ 57 ,908 57,908 855,927 855,927 Due to and due from other funds are the short term portion of the advances to and advances from other funds. Interest on interfund advances approximated $68,000 for 1995. Such interest is included in interest income and interest expense in the accompanying general purpose financial statements. Interest is charged on interfund advances at variable rates that approximate the City's yields on certificates of deposit and investments (4% in 1995). (15) Excess of Expenditures Over Appropriations For the year ended September 30, 1995, expenditures exceeded appropriations in the Promotional (Special Revenue) Fund and the Sales Tax Revenue Debt Service Fund by $11,488 and $15,626, respectively. 41 I I I I I I I I I I' I I I I I I I~ I I APPENDIX C FORM OF BOND COUNSEL'S OPINION TIllS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I, I I I I I FULBRIGHT & ..JAWORSKI l.l. P. TELEPHONE: 214/855-8000 FACSIMILE: 214/855-8200 A REGISTERED LIMITED LIABILITY PARTNERSHIP 2200 Ross AVENUE SUITE 2600 DALLAS, TEXAS 75201 HOUSTON WASHINGTON, D,C, AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON WRITER'S DIRECT DIAL NUMBER: 214/855- HONG KONG IN REGARD to the authorization and issuance of the "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", (the "Bonds"), dated December 1, 1996 (the "Issue Date"), in the aggregate original principal amount of $5,135,000, we have examined into the legality and validity of the issuance thereof by the City of North Richland Hills, Texas (the "City"), which Bonds are issuable in fully registered form only, in denominations of $5,000 or any integral multiple thereof (within a maturity), have stated maturities of September 1, 1997 through September 1, 2008, unless redeemed prior to maturity in accordance with the redemption provisions stated on the Bonds, and bear interest on the unpaid principal amount from the Issue Date at the rates per annum stated in the ordinance authorizing the issuance ofthe Bonds (the "Ordinance"), such interest being payable on March 1 and September 1 in each year, commencing September 1, 1997, 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 City solely to pass upon the legality and validity of the issuance of the Bonds under the Constitution and laws of the State of Texas, the defeasance and discharge of the City's outstanding obligations being refunded by the Bonds, and with respect to the exclusion of the interest on the Bonds from gross income for federal income tax purposes and none other. 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 City or the City's waterworks and sewer system and have not assumed any responsibility with respect thereto. Our examinations into the legality and validity of the Bonds included a review of the applicable and pertinent provisions of the Constitution and laws of the State of Texas, a transcript of certified proceedings of the City relating to the authorization and issuance of the Bonds, including the Ordinance, customary certifications and opinions of officials of the City and other pertinent showings, and an examination of the Bond executed and delivered initially by the City, which we found to be in due form and properly executed. BASED ON OUR EXAMINATIONS, IT IS OUR OPINION that, under applicable law of the United States of America and the State of Texas now in force and effect: 1. The Bonds have been duly authorized by the City and the Bonds issued in compliance with the provisions of the Ordinance are valid, legally binding and enforceable special obligations of the City, in accordance with the terms thereof, payable from and equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer System, 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 Ordinance provides certain conditions under which the City may issue additional 0375021 TIDS PAGE LEFT BLANK INTENTIONALLY I I I I I I I I I I I I I I I ,I I I I Page 2 of Legal Opinion of Fulbright & Jaworski L.L.P. Re: $5,135,000 "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1, 1996 obligations payable from the same source and secured in the same manner as the Bonds; and 2. Assuming continuing compliance after the date hereof by the City with the provisions of the Ordinance and in reliance upon representations and certifications of the City made in a certificate of even date herewith pertaining to the use, expenditure, and investment of the proceeds of the Bonds, 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 hereof, of the owners thereof pursuant to section 103 of such Code, existing regulations, published rulings, and court decisions thereunder, and (2) will not be included in computing the alternative minimum taxable income of individuals or, except as hereinafter described, corporations. Interest on all tax-exempt obligations, such as 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 corporations, other than an S corporation, a qualified mutual fund, a real estate mortgage investment conduit (REMIC), or a real estate investment trust (REIT). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code and the environmental tax imposed by section 59A of the Code will be computed. WE EXPRESS NO 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, property and casualty insurance companies, life 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 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 0375021 I Exhibit 3 I I Special Revenue Funds Debt Service Funds I Variance - Variance - Actual Favorable Favorable Budget (note Hd) (Unfavorable ) Budget Actual (Unfavorable ) I 213, 131 258, 166 45,035 4,200,000 4,200,000 I 642,000 656,993 14,993 182,439 146,557 (35,882) I 4,310 11 , 687 7,377 44, 000 65,711 21,711 I 1 , 041 , 880 1,073,403 31,523 4,244.000 4,265,711 21,711 I 398,613 320,439 78, 174 I 3,329,485 3,329,485 I 3,060.097 2.776.259 283,838 398,613 320,439 78. 174 6.389,582 6, 105. 744 283,838 I 643,267 752,964 109,697 (2,145,582) (1,840,033) 305,549 2, 114,395 2,065,531 (48,864) I (734,814) (771,522) (36.708) (734,814) (771, 522) (36.708) 2, 114.395 2,065,531 (48,864) I (91,547) (18,558) 72,989 (31,187) 225,498 256,685 I 412, 107 2, 103.386 393,549 2,328,884 I I I I 12 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Operating revenues: Water and sewer service Water and sewer connections Sewer transportation Service charges Inspection fees Golf course fees and charges Assessment revenue Insurance premiums (notes 1(0) and"ll) Maintenance services (note 1(0» Aquatic park admissions Recreation equipment rental Food, beverage and gifts Sponsorships Other income Total operating revenues Operating expenses: Contractual services (note 9) Personal services Cost of golf course sales and services Repairs and maintenance Supplies Depreciation Franchise fees (note 1(0» Payments in lieu of taxes (note' 1 (0» Administration fees (note 1 (0) and 11) Claims (note 11) Total operating expenses Enterprise Funds $ 17,690,846 316,370 8,026 485, 120 33,675 2,177,067 22,881 1,259,484 151,358 320, 190 20,750 16,049 22,501,816 9,066,359 3,031,342 1,269,706 939, 192 897,477 1,660,197 411 , 206 255,819 1, 296, 860 18,828,158 3,673,658 Operating income Nonoperating revenues (expenses): Interest income (note 14) Interest expense and fiscal agent charges (note 14) Gain (loss) on disposal of fixed assets Total non()perating revenues (expenses) - net Income before operating transfers Operating transfers in Operating transfers out Total operating transfers Net income Retained earnings at beginning of year Retained earnings at end of year 522,821 (1,495,696) (293,748) (1, 266, 623) 2,407,035 67,700 (652,249) (584,549) 1,822,486 18,670,159 $ 20,492,645 See accompanying notes to general purpose financial statements. 13 Internal Service Funds 2,590,898 2,144,280 4,735,178 387,210 810,724 157,387 323,778 289,849 2,646,304 4,615,252 119,926 129,389 1,816 131 , 205 251, 131 214,890 (150,000) 64,890 316,021 1,255,249 1 , 571 , 270 Financial Advisory Services Provided By FIRST SOUTHWEST COMPANY INVESTMENT BANKERS CITY OF NORTH RICHLAND HILLS, TEXAS (Tarrant County) $5,135,000 WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 Sealed Bids Due Monday, December 16, 1996, at 11:00 AM, CST NOTICE OF SALE AND BIDDING INSTRUcnONS ON $5,135,000 CITY OF NORm RICHLAND IßLLS, TEXAS (Tarrant County) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 Sealed Bids Due Monday, December 16, 1996, at 11:00 AM, CST THE SALE BONDS OFFERED FOR SALE AT COMPETITIVE BIDDING. . . The City of North Richland Hills, Texas (the "City") is offering for sale its $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 (the "Bonds"). ADDRESS OF BIDS, . . Sealed bids, plainly nuvked "Bid for Bonds", should be addressed to "Mayor and City Council, City of North Richland Hills, Texas", and delivered to the Assistant City Manager/Director of Finance at City Hall, 7301 N. E. Loop 820, North Richland Hills, Texas, prior to 11:00 AM, CST, on the date of the bid opening. All bids must be submitted on the Official Bid Form, without alteration or interlineation. BIDS BY TELEPHONE OR FACSIMILE. . . Bidders must submit SIGNED Official Bid Forms to David Medanich, First Southwest Company, 1700 Pacific Avenue, Suite 500, Dallas, Texas 75201, and submit their bid by telephone or facsimile (fax) on the date of the sale. Telephone bids will be accepted at (214) 953-4054, between 10:00 AM, CST and 10:30 AM, CST. Fax bids must be received between 10:00 AM, CST and 10:30 AM, CST, on the date of the sale at (214) 953-4050, attention Rhonda Van Iderstine, First Southwest Company wiD not be responsible for submitting any bids received after the above deadlines. First Southwest Company assumes no responsibility or liability with respect to any irregularities associated with the submission of bids if telephone or fax options are exercised. PLACE AND TIME OF BID OPENING . . . The bids for the Bonds will be publicly opened and read in the office of the Assistant City Manager at the City Hall at 11:00 AM, CST, Monday, December 16,1996. AWARD OF THE BONDS. , . The City Council will take action to award the Bonds (or reject all bids) at a meeting scheduled to convene at 7:30 PM, CST, on the date of the bid opening, and adopt an ordinance authorizing the Bonds and approving the Official Statement (the "Ordinance"). THE BONDS DESCRIPTION. . . The Bonds will be dated December I, 1996 (the "Bond Date"). Interest will accrue from the Bond Date and will be due on September I, 1997, and each March 1 and September 1 thereafter until the earlier of maturity or prior redemption. The Bonds will be issued only in fully registered form in any integral multiple of $5,000 for anyone maturity, The Bonds will mature on September 1 in each year as follows: MATURITY SCHEDULE Principal Principal Principal Year Amount Year Amount Year Amount 1997 $ 445,000 2001 $ 390,000 2005 $ 440,000 1998 370,000 2002 410,000 2006 460,000 1999 385,000 2003 425,000 2007 485,000 2000 375,000 2004 445,000 2008 505,000 -_..~---_.__._-_.- BOOK-ENTRY-ONLY SYSTEM. . . The City intends to utilize the Book-Entry-Only System of The Depository Trust Company ("DTC"). See "The Bonds - Book-Entry-Only System" in the Official Statement. REDEMPTION. . . The City reserves the right, at its 9ption, to redeem Bonds having stated maturities on and after September 1, 2005, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September 1, 2004, or any date thereafter, at the par value thereof plus accrued interest to the date fixed for redemption. PAYING AGENTIREGISTRAR. . . The initial Paying AgentlRegistrar shall be Bank One, Texas, N.A., Fort W0l1h, Texas (see "The Bonds - Paying AgentlRegistrar" in the Official Statement). SOURCE OF PAYMENT. . . The Bonds are payable, both as to principal and interest, solely from and secured by a first lien on and a pledge of the Net Revenues of the System after payment of maintenance and operating expenses (see "The Bonds - Security and Source of Payment"). Further details regarding the Bonds are set forth in the Official Statement. CONDmONSOFTHESALE TYPE OF BIDS AND INTEREST RATES. . . The Bonds will be sold in one block on an "Allor None" basis, and at a price of not less than 99% of their par value plus accrued interest from the date of the Bonds to the date of delivery of the Bonds, Bidders are invited to name the rate(s) of interest to be borne by the Bonds, provided that each rate bid must be in a multiple of 1/8 of 1 % or 1/20 of 1 % and the net effective interest rate must not exceed 15%, The highest rate bid may not exceed the lowest rate bid by more than 1.5% in rate. Interest rates for maturities shall be structured in ascending order such that for each succeeding maturity, rates shall be equal to or greater than the interest rate for the maturity of the preceding year. No more than two consecutive maturities are permitted to have the same coupon. No limitation is imposed upon bidders as to the number of rates or changes which may be used, However, all Bonds of one maturity must bear one and the same rate. No bids involving supplemental interest rates will be considered, BASIS FOR AWARD. . . The sale of the Bonds will be awarded to the bidder making a bid that conforms to the specifications herein and which produces the lowest True Interest Cost rate to the City. The True Interest Cost rate is that rate which, when used to compute the total present value as of the Dated Date of all debt service payments on the Bonds on the basis of semi-annual compounding, produces an amount equal to the sum of the par value of the Bonds plus any premium bid (but not interest accrued from the Dated Date to the date of their delivery). In the event of a bidder's error in interest cost rate calculations, the interest rates, and premium, if any, set forth in the Official Bid Form will be considered as the official bid. GOOD FAITH DEPOSIT. . . A Good Faith Deposit, payable to the "City of North Richland Hills, Texas", in the amount of $102,700.00, is required, Such Good Faith Deposit shall be a bank cashier's check or certified check, which is to be retained uncashed by the City pending the Purchaser's compliance with the terms of the bid and the Notice of Sale and Bidding Instructions, The Good Faith Deposit may accompany the Official Bid Form or it may be submitted separately, If submitted separately, it shall be made available to the City prior to the opening of the bids, and shall be accompanied by instructions from the bank on which drawn which authorize its use as a Good Faith Deposit by the Purchaser who shall be named in such instructions, The Good Faith Deposit of the Purchaser will be returned to the Purchaser upon payment for the Bonds. No interest will be allowed on the Good Faith Deposit. In the event the Purchaser should fail or refuse to take up and pay for the Bonds in accordance with the bid, then said check shall be cashed and accepted by the City as full and complete liquidated damages. The checks accompanying bids other than the winning bid will be returned immediately after the bids are opened, and an award of the Bonds has been made, DELIVERY OF THE BONDS AND ACCOMPANYING DOCUMENTS CUSIP NUMBERS. . . It is anticipated that CUSIP identification numbers will appear on the Bonds, but neither the failure to print or type such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Purchaser to accept delivery of and pay for the Bonds in accordance with the terms of this Notice of Sale and Bidding Instructions and the terms of the Official Bid Form, All expenses in relation to the printing or typing of CUSIP numbers on the Bonds shall be paid by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of the numbers shall be the responsibility of and shall be paid for by the Purchaser. DELIVERY OF BONDS. . . Initial Delivery will be accomplished by the issuance of one Initial Bond (also called the "Bond" or "Bonds"), either in typed or printed form, in the aggregate principal amount of $5,135,000, payable in stated installments to the Purchaser, signed by the Mayor and City Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts. Upon delivery of the Initial Bond, it shall be immediately canceled and one definitive Bond for each maturity will be registered and delivered only to Cede & Co., and deposited with DTC in connection with DTC's Book-Entry-Only System. Delivery will be at the principal office of the Paying AgentlRegistrar. Payment for the Bonds must be made in immediately available funds for unconditional credit to the City, or as otherwise directed by the City, The Purchaser will be given six business days' notice of the time fixed for delivery of the Bonds. It is anticipated that delivery of the Bond(s) can be made on or about January 22 ,1997, and it is understood and agreed that the Purchaser will accept delivery and make payment for the Bonds by 10:00 AM, CST, on January 22 ,1997, or thereafter on the date the Bond is tendered for delivery, up to and including ii ----~._---- February 5, 1997. If for any reason the City is unable to make delivery on or before February 5, 1997, the City shall immediately contact the Purchaser and offer to allow the Purchaser to extend its offer for an additional thirty days. If the Purchaser does not elect to extend its offer within six days thereafter, then its Good Faith Deposit will be returned, and both the City and the Purchaser shall be relieved of any further obligation. In no event shall the City be liable for any damages by reason of its failure to deliver the Bonds, provided such failure is due to circumstances beyond the City's reasonable control. "; CONDITIONS TO DELIVERY. . , The obligation of the Purchaser to take up and pay for the Bonds is subject to the Purchaser's receipt of (a) the legal opinion of Fulbright & Jaworski, L.L.P., Dallas, Texas, Bond Counsel for the City ("Bond Counsel"), (b) the no-litigation certificate, and (c) the certification as to the Official Statement, all as further described in the Official Statement. In order to provide the City with information required to enable it to comply with certain conditions of the Internal Revenue Code of 1986 relating to the exemption of interest on the Bonds from the gross income of their owners, the Purchaser will be required to complete, execute, and deliver to the City (on or before the 6th business day prior to the delivery of the Bonds) a certification as to their "issue price" substantially in the form and to the effect attached hereto or accompanying this Notice of Sale and Bidding Instructions. In the event the successful bidder will not reoffer the Bonds for sale, such certificate may be modified in a manner approved by the City, In no event will the City fail to deliver the Bonds as a result of the Initial Purchaser's inability to seD a substantial amount of the Bonds at a particular price prior to delivery. Each bidder, by submitting its bid, agrees to complete, execute, and deliver such a certificate by the date of delivery of the Bonds, if its bid is accepted by the City. It will be the responsibility of the Purchaser to institute such ~dicate reporting requirements to make such investigation, or otherwise to ascertain the facts necessary to enable it to make such certification with reasonable certainty, Any questions concerning such certification should be directed to Bond Counsel. LEGAL OPINIONS. . . The Bonds are offered when, as and if issued, subject to the approval of the Attorney General of the State of Texas. Delivery of and payment for the Bonds is subject to the receipt by the Purchaser of opinions of Bond Counsel, to the effect that the Bonds are valid and binding obligations of the City and that the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. CERTIFICATION OF OFFICIAL STATEMENT , , ,At the time of payment for and Initial Delivery of the Bonds, the City will execute and deliver to the Purchaser a certificate in the form set forth in the Official Statement. CHANGE IN TAX EXEMPT STATUS. . , .At any time before the Bonds are tendered for delivery, the Purchaser may withdraw its bid if the interest received by private holders on obligations of the same type and character shall be declared to be includable in gross income under present federal income ,tax laws, either by ruling of the Internal Revenue Service or by a decision of any Federal court, or shall be declared taxable or be required to be taken into account in computing any federal income taxes, by the terms of any federal income tax law enacted subsequent to the date of this Notice of Sale and Bidding Instructions. GENERAL FINANCIAL ADVISOR. , , First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds, The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company may submit a bid for the Bonds, either independently or as a member of a syndicate organized to submit a bid for 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, BLUE SKY LAWS. . . By submission of its bid, the Purchaser represents that the sale of the Bonds in states other than Texas will be made only pursuant to exemptions from registration or, where necessary, the Purchaser will register the Bonds in accordance with the securities law of the states in which the Bonds are offered or sold, The City agrees to cooperate with the Purchaser, at the Purchaser's written request and expense, in registering the Bonds or obtaining an exemption from registration in any state where such action is necessary, provided, however, that the City shall not be obligated to execute a general or special consent to service of process in any such jurisdiction. NOT AN OFFER TO SELL. , . This Notice of Sale and Bidding Instructions does not alone constitute an offer to sell the Bonds, but is merely notice of the sale of the Bonds. The offer to sell the Bonds is being made by means of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement. Prospective purchasers are urged to carefully examine the Official Statement to determine the investment quality of the Bonds. IssUANCE OF ADDITIONAL DEBT. . . The City does not anticipate the issuance of additional water and sewer system revenue bonds within the next 12 months. III RATINGS. . . The outstanding Waterworks and Sewer System Revenue 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-HilI Companies, Inc. ("S&P") on the basis of municipal bond insurance policies issued by AMBAC Indemnity Corporation. Applications for contract ratings on this issue have been made to both Moody's and S&P. The results of their determinations will be provided as soon as possible. MUNICIPAL BOND INSURANCE. . . In the event the Bonds are qualified for municipal bond insurance the Financial Advisor will advise prospective bidders for the Bonds of the selected insurance company, Any fees to said insurance company will be Daid bv the City. Any fees to be paid to the rating agencies as a result of said insurance will be Daid bv the City. It will be the responsibility of the Purchaser to disclose the existence of insurance, its tenns and the effect thereof with respect to the reoffering of the Bonds. THE OFFICIAL STATEMENT AND COMPLIANCE WITH SEC RULE 15c2-12 . . The City has prepared the accompanying Official Statement and, for the limited purpose of complying with SEC Rule ISc2-12, deems such Official Statement to be final as of its date within the meaning of such Rule for the purpose of review prior to bidding, To the best knowledge and belief of the City, the Official Statement contains information, including financial information or operating data, concerning every entity, enterprise, fund, account, or person that is material to an evaluation of the offering of the Bonds, The City has not entered into any previous continuing disclosure undertaking in a written contract or agreement specified in SEC Rule ISc2-12(b)(S)(i) and, accordingly, has not failed to comply with any such undertaking. Representations made and to be made by the City concerning the' absence of material misstatements and omissions in the Official Statement are addressed elsewhere in this Notice of Sale and Bidding Instructions and in the Official Statement. The City will furnish to the Purchaser, or Purchasers, acting through a designated senior representative, in accordance with instructions received from the Purchaser(s), within seven (7) business days from the sale date an aggregate of ISO copies of the Official Statement including a like number of copies of any Supplement(s) reflecting interest rates and other tenns relating to the initial reoffering of the Bonds. The cost of a reprinted Official Statement, if the Purchaser(s) shall so elect, and the cost of any Official Statement in excess of the number specified shall be prepared and distributed at the cost of the Purchaser(s). The Purchaser(s) shall be responsible for providing in writing the initial reoffering prices and other tenns, if any, to the Financial Advisor by the close of the next business day after the award. Except as noted above, the City assumes no responsibility or obligation for the distribution or delivery of any copies of the Official Statement in connection with the offering or reoffering of the subject securities. CONTINUING DISCLOSURE AGREEMENT. . . The City will agree in the Ordinance to provide certain periodic infonnation and notices of material events in accordance with Securities and Exchange Commission Rule ISc2-12, as described in the Official Statement under "Continuing Disclosure of Infonnation". The Purchaser(s') obligation to accept and pay for the Bonds is conditioned upon delivery to the Purchaser(s) or (their) agent of a certified copy of the Ordinance containing the agreement described under such heading. ADDITIONAL COPIES OF NOTICE, BID FORM AND STATEMENT. . . A limited number of additional copies of this Notice of Sale and Bidding Instructions, the Official Bid Fonn and the Official Statement, as available over and above the nonnal mailing, may be obtained at the offices of First Southwest Company, Investment Bankers, 1700 Pacific Avenue, Suite SOO, Dallas, Texas 75201, Financial Advisor to the City, On the date of the sale, the City Council will, in the Ordinance authorizing the issuance of the Bonds, confinn its approval of the fonn and content of the Official Statement, and any addenda, supplement or amendment thereto, and authorize its use in the reoffering of the Bonds by the Purchaser. A TrEST: TOMMY BROWN Mayor City of North Richland Hills, Texas PA1RICIA HUTSON City Secretary November 25, 1996 iv BOND YEARS Bonds Accumulated Bonds Maturing Amount Bond Years Bond Years Maturing 1997 $ 445,000 333.750 333.75 1997 1998 370,000 647.500 981.25 1998 1999 385,000 1,058.750 2,040.00 1999 2000 375,000 1,406.250 3,446.25 2000 2001 390,000 1,852.500 5,298.75 2001 2002 410,000 2,357.500 7,656.25 2002 2003 425,000 2,868.750 10,525.00 2003 2004 445,000 3,448.75,0 13,973.75 2004 2005 440,000 3,850.000 17,823.75 2005 2006 460,000 4,485,000 22,308.75 2006 2007 485,000 5,213.750 27,522.50 2007 2008 505,000 5,933.750 33,456.25 2008 Average Maturity. . . . . . . . . . , . . . . . , . . . . . . . . . . . . 6.515 Years OFFICIAL BID FORM Honorable Mayor and City Council City of North Richland Hills, Texas December 16, 1996 Members of the City Council: Reference is made to your Official Statement and Notice of Sale and Bidding Instructions, dated November 25, 1996 of $5,135,000 CITY OF NORTH RlCHLAND HILLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996, both of which constitute a part hereof. For your legally issued Bonds, as described in said Notice of Sale and Bidding Instructions and Official Statement, we will pay you % of par and accrued interest from date of issue to date of delivery to us, for Bonds maturing and bearing interest as follows: Principal Interest Principal Interest Principal Interest Maturity Amount Rate Maturity Amount Rate Maturity Amount Rate 9/1/97 $ 445,000 % 9/1/01 $ 390,000 % 9/1105 $ 440,000 % 9/1/98 370,000 % 9/1/02 410,000 % 9/1106 460,000 % 9/1/99 385,000 % 9/1/03 425,000 % 9/1/07 485,000 % 9/1/00 375,000 % 9/1/04 , 445,000 % 9/1/08 505,000 % Our calculation (which is not a part of this bid) of the True Interest Cost from the above is: TRUE IN1EREST COST % We are having the Bonds of the following maturities insured by at a premium of $ . said premium to be oaid bv the City. Any fees to be paid to the rating agencies as a result of said insurance will be paid bv the atv. The Initial Bonds shall be registered in the name of , which will, upon payment for the Bonds, be canceled by the Paying AgentlRegistrar. The Bonds will then be registered in the name of Cede & Co. (DTC's partnership nominee), under the Book-Entry-Only System. A bank cashier's check or certified check of the Bank" in the amount of $102,700.00, which represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening of this bid), and is submitted in accordance with the tenns as set forth in the Official Statement and Notice of Sale and Bidding Instructions, We agree to accept delivery of the Bonds utilizing the Book-Entry-Only System through DTC and make payment for the Initial Bond in immediately available funds in the Corporate Trust Division, Texas Commerce Bank National Association, Dallas, Texas, not later than 10:00 AM, CST, on January 22,1997, or thereafter on the date the Bonds are tendered for delivery, pursuant to the tenns set forth in the Notice of Sale and Bidding Instructions. It will be the obligation of the purchaser of the Bonds to complete the DTC Eligibility Questionnaire. The undersigned agrees to complete, execute, and deliver to the City, at least six business days prior to delivery of the Bonds, a certificate relating to the "issue price" of the Bonds in the fonn and to the effect accompanying the Notice of Sale and Bidding Instructions, with such changes thereto as may be acceptable to the City. We agree to provide in writing the initial reoffering prices and other terms, if any, to the Financial Advisor by the close of the next business day after the award. Respectfully submitted, By Authorized Representative ACCEPTANCE CLAUSE The above and foregoing bid is hereby in all things accepted by the City of North Richland Hills, Texas, subject to and in accordance with the Notice of Sale and Bidding Instructions, this the 16th day of December, 1996. A TrEST: Mayor City of North Richland Hills, Texas City Secretary ---- ISSUE PRICE CERTIFICATE The undersigned hereby certifies with respect to the sale of CITY OF NORTH RICHLAND HILLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 (the "Bonds"), issued in aggregate principal amount of $5,135,000, as follows: 1. The undersigned is the underwriter or the manager of the syndicate of underwriters which has purchased the Bonds from the City of North Richland Hills, Texas (the "Issuer") at competitive sale, 2. The undersigned and/or one or more other members of the underwriting syndicate, if any, have made a bona fide offering to the public of the Bonds of each maturity at the respective prices set forth below. 3. The initial offering price (expressed as a percentage of principal amount or yield and exclusive of accrued interest) for the Bonds of each maturity at which a substantial amount of the Bonds of such maturity was sold to the public is as set forth below: Principal Offering Principal Offering Amount Year of Price Amount Year of Price Maturing Maturity (%/Yiekl) Maturing Maturity (%/Yield) $ 445,000 1997 % $ 425,000 2003 % 370,000 1998 % 445,000 2004 % 385,000 1999 % 440,000 2005 % 375,000 2000 % 460,000 2006 % 390,000 2001 % 485,000 2007 % 410,000 2002 % 505,000 2008 % 4. The tenn "public," as used herein, means persons other than bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers, 5. The offering prices described above reflect current market prices at the time of such sales. 6, The undersigned and/or one or more other members of the underwriting syndicate, as the case may be, (have)(have not) purchased bond insurance for the Bonds. The bond insurance, if any, has been purchased from (the "Insurer") for a premium cost of $ (net of any nonguarantee cost, e,g., rating agency fees), The amount of such cost is set forth in the Insurer's commitment and is separately stated from all other fees or charges payable to the Insurer. The premium does not exceed a reasonable charge for the transfer of credit risk taking into account payments charged by guarantors in comparable transactions (including transactions in which a guarantor has no involvement other than as a guarantor), The present value of the debt service savings expected to be realized as a result of such insurance, discounted at a rate equal to the yield on the Bonds which results after recovery of the insurance premium, exceeds the present value of the bond insurance premium. 7. The undersigned understands that the statements made herein will be relied upon by the Issuer in its effort to comply with the conditions imposed by the Internal Revenue Code of 1986, as amended, on the excludability of interest on the Bonds from the gross income of their owners. EXECUTED and DELIVERED this day of ,1996. (Name of Underwriter or Manager) By (Title) ----------,-~--,._.._-- -- ------~.~_._--_._-,-'".- OFFICIAL STATEMENT Dated November 25, 1996 Ratings: Moody's: "Applied For" S&P: "Applied For" See ("Other Information - Ratings" herein) NEW ISSUE - Book-Entry-Only In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Exemption" herein, including the alternative minimum tax on corporations, THE BONDS WILL NOT BE DESIONA TED AS "OUALIFIED TAX-EXEMPT OBLIOA nONS" FOR FINANCIAL INSTITUTIONS $5,135,000 CITY OF NORTH RICHLAND Hll..LS, TEXAS (Tarrant County) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 Dated Date: December 1, 1996 Due: September 1, as shown below PAYMENT TERMS, , . Interest on the $5,135,000 City of North Richland Hills, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1996 (the "Bonds") will accrue from December I, 1996, (the "Dated Date") and will be payable September I and March I of each year commencing September I, 1997, and will be calculated on the basis of a 360-day year consisting of twelve 30- day months, The definitive Bonds will be initially registered and delivered only to Cede & Co" the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof, No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying 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" herein, The initial Paying AgentlRegistrar is Bank One, Texas N.A., Fort Worth, Texas (see "The Bonds - Paying Agent/Registrar"), AUTHORITY FOR ISSUANCE, . . The Bonds are issued pursuant to the general laws of the State of Texas, particularly Article717k, Vernon's Annotated Texas Civil Statutes ("V ATCS"), as amended, and an ordinance (the "Ordinance") passed by the City Council, and are special obligations of the City of North Richland Hills (the "City"), payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System (the "System") The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see "The Bonds - Authority for Issuance"), PuRPOSE , , , The City's Waterworks and Sewer System has historically provided water and sewer services to the residents of the City and to the residents of the neighboring City of Watagua. The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within its boundaries to provide such services to its residents, and the proceeds of sale of such properties of the System, together with the proceeds from the sale of the Bonds, will be used to pay and discharge all outstanding revenue indebtedness of the City's System to restructure and reduce the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System, The outstanding revenue indebtedness to defeased and refunded is identified as follows: The outstanding revenue indebtedness to be defeased and refunded is identified as follows: $3,995,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1989, $1,740,000 Waterworks and Sewer System Revenue Bonds, Series 1989-A and $2,730,000 Waterworks and Sewer System Revenue Bonds, Series 1989-B (collectively, the "Refunded Bonds") in order to lower the overall debt service requirements of the City, and to pay the costs associated with the issuance of the Bonds. MATURITY SCHEDULE Amount Maturity Rate Yield Amount Maturity Rate Yield $ 445,000 1997 $ 425,000 2003 370,000 1998 445,000 2004 385,000 1999 440,000 2005 375,000 2000 460,000 2006 390,000 2001 485,000 2007 410,000 2002 505,000 2008 (Accrued Interest from December 1, 1996 to be added) REDEMPTION OPTION. , , The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2005, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September 1,2004, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Redemption Provisions"). LEGALITY, , . The Bonds are offered for delivery when, as and if issued and received by the Underwriter and subject to the approving opinion of the Attorney General of Texas and the opinion of Fulbright & Jaworski L.L.P" Bond Counsel. Dallas, Texas (see Appendix C, "Form of Bond Counsel's Opinion"). DELIVERY. . , It is expected that the Bonds will be available for delivery through DTC on January 22 ,1997, No, dealer" braker, salesma":,ar ather persan has been autharized by the City ar the Underwriter to, give any infarmatian, ar to, make any representatians ather than those cantained in this Official Statement, and, if given ar made, such ather infarmatian ar representatians must no,t be relied upan as having beèn authorized by the City ar the Underwriter. This Official Statement does nat canstitute an affer to, sell Bands in any jurisdictian to, any persan to, wham it is unlawful to, make such affer in such jurisdictian. Certain infarmatian set farth herein has been abtained fram the City and ather saurces which are believed to, he reliable but is nat guaranteed as to, accuracy ar campleteness, and is nat to, be canstrued as a representatian by the Underwriter. Any infarmatian and expressians af apinian herein cantained are subject to, change withaut natice, and neither the delivery af this Official Statement nor any sale made hereunder shall, under any circumstances, create any implicatian that there has been no, change in the affairs af the City ar ather matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGlIT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS OFFICIAL STATEMENT SUMMARy......................., 3 CITY OFFICIALS, STAFF AND CONSULTANTS...., 5 ELECfED OFFICIALS.,.."..........,..",...........,...,......."...·. 5 SELECfED ADMINISTRATNE STAFF............................. 5 CONSULTANTS AND ADVISORS.........................,.......... 5 INTRODUCTION ......................."......,...".,.....",..,.,...,',., 7 PLAN OF FINANCING................................................... 7 THE BONDS...,..,..,...,........"..,.,...."..",....""..,."·..,,"....".. 8 THE SYSTEM ...................................,............................ 11 TABLE 1 - HISTORICAL WATER CONSUMPTION .........12 TABLE 2 - TEN LARGEST WATER CUSTOMERS .......... 12 TABLE 3 - MONTHLYWATERRATES,.......................,12 TABLE 4 - MONTHLY SEWER RATES .........................13 TABLE 5 - DEPOSITS ............................................,.... 13 DEBT INFORMATION ................................................15 TABLE 6 - PRo-FoRMA WATERWORKS AND SEWER SYSTEM REVENUE DEBT SERVICE REQUIREMENTS.,.....,...,..,...,.,.,....,.." ,....,...'",.. 15 FINANCIAL INFORMATION ..................................... 16 TABLE 8 - CONDENSED STATEMENT OF OPERATIONS. 16 TABLE 9 - COVERAGE AND FUND BALANCES ............16 TABLE 10 - V ALUEOFTHE SYSTEM .........................,17 TABLE 11 - CITY'S EQuITY IN SYSTEM ...............,.....17 TABLE 12 - CURRENT INVESTMENTS......................... 19 SELECTED PROVISIONS OF THE BOND ORDINANCE ........,........"...,......,..",.........,..,..,.,.,.20 TAX MA TIERS ...."...,."..,..."......,.....,..",..",....,..",...,...29 CONTINUING DISCLOSURE OF INFORMA TION.30 OTHER INFORMATION.....,........",...,.....,..,.,.."..."...,,31 RATINGS...,.........,.,........",..,........,."....,....,...",.,.,..,., 31 LITIGATION...",...,...,.."...,........"".,......,."",."".,.,..", 31 REGISTRATION AND QUALIACATlON OF BONDS FOR SALE .................................................,........,....31 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS .................................31 LEGAL OPINIONS,....."...,.........,....,.....,..".".,........,.... 32 UNDERWRITING ,.....,....,.............,...."........""."."..,...32 MISCELLANEOUS..,.,......,.,.,............, "..,.,......'""."..." 32 SCHEDULE OF DEFEASED BONDS ......SCHEDULE I SCHEDULE OF REFUNDED BONDS .., SCHEDULE II APPENDICES GENERAL INFORMATION REGARDING THE CITY, ,.", .', A EXCERPTS FROM THE ANNUAL FINANCIAL REPORT.. B FORM OF BOND COUNSEL'S OPINION........................ C The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement. 2 OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official Statement. THE CiTy.................................... The City of North Richland Hills, Texas is a political subdivision and municipal corporation of the State, located in Tarrant County, Texas. The City covers approximately 18.9 square miles (see "Introduction - Description of City"). THE BONDS.................................. The Bonds are issued as $5,135,000 Waterworks and Sewer System Revenue Refunding Bonds, Series 1996. The Bonds are issued as serial bonds maturing September 1, 1997 through September I, 2008 (see "The Bonds - Description of the Bonds"). PAYMENT OF INTEREST .............. Interest on the Bonds accrues from December 1,1996, and is payable September 1,1997, 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"). AUTHORITY FOR IssUANCE ......... The Bonds are issued pursuant to the general laws of the State, including particularly Article 717k, V A TCS, and an Ordinance passed by the City Council of the City (see "The Bonds - Authority for Issuance"), SECURITY FOR THE BONDS.......... The Bonds constitute special obligations of the City, payable, both as to principal and interest, solely from and secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sewer System, The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see "The Bonds - Security and Source of Payment"). OPTIONAL REDEMPTION ............. The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September I, 2005 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2004 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Bonds - Redemption Provisions"). 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 ....................... The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within the boundaries of Watagua to provide water and sewer services to its residents, and the proceeds from the sale of such properties of the System, together with the proceeds from the sale of the Bonds, will be used to pay and discharge all outstanding' revenue indebtedness of the City's System to restructure and the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System. RATINGS ..................................... The outstanding Waterworks and Sewer System Revenue 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") on the basis of municipal bond insurance policies issued by AMBAC Indemnity Corporation. Applications for contract ratings on the Bonds have been made to Moody's and S&P (see "Other Information - Ratings"), BOOK-ENTRY-ONLY SYSTEM .....................................' The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the PayinglAgent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds (see "The Bonds - Book-Entry-Only System") . PAYMENT RECORD...................... The City has never defaulted in payment of its bonds. 3 SELECl'ED FINANCIAL INFORMATION " . Fiscal Water Usage (2) Net Average Year Estimated Average Available Annual Debt Coverage Ended City Day Peak Day Total For Service of 9/30 Population(l) Usage Usage Usage Debt Service Requirements Debt (2) 1992 48,142 7,435,682 13,906,000 2,721,877,000 $ 3,458,951 $ 2,078,133 I.66x 1993 48,300 9,599;984 22,170,000 3,503 ,994,000 3,638,132 2,076,013 I.75x'" , 1994 50,000 6,820,134 13,451,000 2,487,349,000 4,077,659 2,074,073 I.97x 1995 50,376 8,384,008 13,487,000 3,060,163,000 3,137,454 2,080,506 I.5lx 1996 50,650 10,033,529 14,614,000 3,662,238,000 3,462,765 1,772,899 1,95x (1) Source: City records. (2) Represents water usage and rev«nue coverage prior to the sale of a portion of the water system assets to the City of Watagua and the loss of customers served by the properties conveyed to Watagua. See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities to Watagua and its possible impact on the operations of the City's Water and Sewer System, For additional information regarding the City, please contact: Larry J. Cunningham Assistant City Manager City of North Richland Hills ' 7301 N.E. Loop 820 North Richland Hills, Texas 76182 (817) 581-5507 or David K. Medanich First Southwest Company 1700 Pacific Avenue Suite 500 Dallas, Texas 75201 (214) 953-4000 4 ELECfED OFFICIALS City Council Tommy Brown Mayor Mark S. Wood Mayor Pro Tern-Place 3 Lyle E, Welch Councilmember-Place 1 Mack Garvin Councilmember-Place 2 Jo Ann Johnson Councilmember-Place 4 Don D. Phifer Councilmember-Place 5 Byron Sibbet Councilmember-Place 6 Linda Spurlock Sansoucie Councilmember-Place 7 SELECTED ADMINISTRATIVE STAFF Name C. A. Sanford Randy Shiflet Larry 1. Cunningham Larry Koonce Rex McEntire Patricia Hutson Jim Browne Greg Dickens Barry LeBaron CONSULTANTS AND ADVISORS CITY OFFICIALS, STAFF AND CONSULTANTS Year of Term Election Exoires Occuoation 1988 May, 1998 Real Estate Investments 1991 May, 1997 Real Estate Broker 1988 May, 1997 Retired 1986 May, 1998 Retired 1991 May, 1998 Homemaker 1996 May, 1997 Real Estate - Commercial 1988 May, 1998 Senior Analyst -- Lockheed 1987 May, 1997 Voting Equipment Company Consultant Position Year of Emo1ovrnent 1987 1973 1993 1996 1974 1980 1985 1987 1990 City Manager Assistant City Manager Assistant City Manager Director of Finance City Attorney City Secretary Parks and Recreation Director Director of Public Works Planning and Inspection Services Director Auditors ..,.."...",..,,'.......,......,...,'................,.....,..........,......,......,.....,....,.............,.......................................,.... KPMG Peat Marwick Fort Worth, Texas Consulting Engineers..,.........."..............,...,......................"......,....."..,..............,..........................., Know1ton-English-Flowers, Inc. Bedford, Texas Bond Counsel............................."...............".................,....................................................................... Fulbright & Jaworski L.L.P. Dallas, Texas Financial Advisor..........,..........,...............,..............,................................. ,.......... ..........'..........,........... ..... First Southwest Company Dallas, Texas 5 mIS PAGE LEFf INTENTIONALLY BLANK 6 t - OFFICIAL STATEMENT RELATING TO $5,135,000 CITY OF NORTH RICHLAND HILLS, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1996 INTRODUCTION This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of $5,135,000 City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996, Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Ordinance to be adopted on the date of sale of the Bonds which will authorize the issuance of the Bonds, except as otherwise indicated herein (see "Selected Provisions of the Bond Ordinance"). There follows in this Official Statement descriptions of the Bonds and certain information regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Dallas, Texas, 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 form of government with a City Council comprised of the Mayor and seven Councilmembers, The term of office is two years with the terms of the Mayor and three of the Councilmembers' terms expiring in even-numbered years and the other terms of the 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 and social services, culture-recreation, public transportation, planning and zoning, and general administrative services. The 1990 Census population for the City was 45,895, while the estimated 1996 population is 50,650. The City covers approximately 18.29 square miles, PLAN OF FINANCING PURPOSE. . . The City's Waterworks and Sewer System has historically provided water and sewer services to the residents of the City and to the residents of the neighboring City of Watagua, The City of Watagua recently purchased a portion of the properties of the City's Water and Sewer System located within its boundaries to provide such services to its residents, and the proceeds of sale of such properties of the System, together with the proceeds from the sale of the Bonds, will be used to pay and discharge all outstanding revenue indebtedness of the City's System to restructure and reduce the amount of indebtedness supported by the revenues of the City's smaller Waterworks and Sewer System, See "Sale of System Assets" for a more complete description of the sale of System properties to Watagua and its impact on the operations of the System. See Schedule I and Schedule II for a detailed listing of the Bonds that are to be defeased and refunded, along with their respective call dates. USE OF PRoCEEDS. . . The proceeds from the sale of the Bonds will be applied approximately as follows: Deposit to Escrow Fund Deposit to Interest and Sinking Fund Underwriter's Discount Gross Bond Insurance Premium Costs of Issuance Total Uses of Funds $ 4,983,101.29 32,610.96 51,350.00 23,456.06 77.092.65 $ 5.167610 96 7 I - THE BONDS DESCRIPTION OF THE BONDS . . , The Bonds are dated December 1, 1996, and mature 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 September 1 and March I, commencing September 1,1997. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for anyone maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds 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 pursuant to the Constitution and general laws of the State of Texas, particularly Article 717k, V ATCS, as amended, and by the Ordinance passed by the City CounciL SECURITY AND SOURCE OF PAYMENT. . , The Bonds are special obligations of the City payable, both as to principal and interest, solely from and, together with any additional parity bonds which may be issued in the future, secured by a first lien on and pledge of the Net Revenues of the System after the payment of maintenance and operating expenses. Maintenance and operating expenses include contractual payments which under Texas laws and their provisions are established as operating expenses. The Bonds are not a charge upon any other income or revenues of the City and shall never constitute an indebtedness or pledge of the general credit or taxing powers of the City. The Ordinance does not create a lien or mortgage on the System, except the Net Revenues, and any judgment against the City may not be enforced by levy and execution against any property owned by the City, As additional security for the payment of Bonds Similarly Secured, a Reserve Fund is required to be maintained in an amount at least equal to the average annual debt service requirements of the Bonds. Initially, the amount to be deposited to the credit of the Reserve Fund will be funded from the amount currently on deposit to the credit of the reserve fund maintained for the payment and security of the Refunded Bonds. As and when Additional Bonds are issued, any additional amount required to be maintained in the Reserve Fund will funded from the proceeds of sale of such Additional Bonds or accumulated with monthly deposits from the Net Revenues of the System over a period not to exceed 60 months from the date the Additional Bonds are delivered to the initial purchaser. In lieu of depositing cash or making monthly deposits to the Reserve Fund to accumulate any increase in the Reserve Fund by reason of the issuance of Additional Bonds and to the extent permitted by law, the City may provide for one or more surety bonds issued by a company or institution having a rating in the highest rating category by two nationally recognized rating agencies or services to be deposited to the credit of Reserve Fund. (See "Selected Provisions of the Bond Ordinance") PLEDGED REVENUES. . . All of the Net Revenues of the System with the exception of those in excess of the amounts required to establish and maintain the Reserve Fund and Interest and Sinking Fund are irrevocably pledged for the payment of the Bonds and interest thereon. The Bonds and any Additional Bonds hereafter issued on a parity therewith will be equally and ratably secured by a first lien upon the Net Revenues of the System. RATES . . . The City has covenanted in the Ordinance that it will at all times charge and collect rates for services rendered by the System sufficient to pay all operating, maintenance, replacement and improvement expenses, any other costs deductible in determining Net Revenues and to pay interest on and the principal of the Bonds and any additional parity bonds, and to establish and maintain the funds provided for in the Ordinance. The City has further covenanted that, if the System should become legally liable for any other indebtedness, it will fix and maintain rates and collect charges for the services of the System sufficient to discharge such indebtedness. OPTIONAL REDEMPTION. . . The City reserves the right, at its option, to redeem Bonds having stated maturities on and after September 1, 2005 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on September I, 2004 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be redeemed, the City may select the maturities of Bonds to be redeemed, If less than all the Bonds of any maturity are to be redeemed, the Paying AgentlRegistrar (or DTC while the Bonds are in Book-Entry-Only form) shall determine by lot the Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying AgentlRegistrar on the redemption date. 8 t ~ NOTICE OF REDEMPTION, . . Not less than 30 days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISlERED OWNER RECEIVES SUCH NOTICE, NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DAlE, 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, BOOK-ENTRY-ONLY SYSTEM. . . The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered certificate will be issued for each maturity of the Bonds in the aggregate principal amount of 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 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' 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. 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 City as soon as possible after the Record Date (hereinafter defined). The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy), Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on each payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered. 9 The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC. Information conceming DTC and the Book-Entry System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City or the Underwriter(s). PAYING AGENTIREGISTRAR , . . The initial Paying AgentlRegistrar is Bank One, Texas N.A., Fort Worth, Texas. In the Ordinance, the City retains the right to replace the Paying AgentlRegistrar. The City 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 City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying AgentlRegistrar. TRANSFER, EXCHANGE AND REGISTRATION, . . In the event the Book-Entry-Only System should be discontinued, the Bonds may be transferred and exchanged on the registration books of the Paying AgentlRegistrar only upon presentation and surrender thereof to the Paying AgentlRegistrar 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 AgentlRegistrar. New Bonds will be delivered by the Paying AgentlRegistrar, in lieu ofthe Bonds being transferred or exchanged, at the principal office ofthe Paying AgentlRegistrar, 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 AgentlRegistrar. 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 City nor the Paying AgentlRegistrar 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 AgentlRegistrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be IS 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 AgentlRegistrar at the close of business on the last business day next preceding the date of mailing of such notice, BONDHOLDERS' REMEDIES . . . Except for the remedy of mandamus to enforce the City's covenants and obligations under the Ordinance, the Ordinance does not establish other remedies or specifically enumerate the Events of Default with respect to the Bonds, The Ordinance does not provide for a trustee to enforce the covenants and obligations of the City, In no event will registered owners have the right to have the maturity of the Bonds accelerated as a remedy. The enforcement of the remedy of mandamus may be difficult and time consuming. No assurance can be given that a mandamus or other legal action to enforce a default under the Ordinance would be successful. Furthermore, the City is eligible to seek relief from its creditors under Chapter 9 of the U,S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, such provision is subject to judicial construction, Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce any remedies under the Ordinance would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Ordinance and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. In addition, while the City has covenanted to secure the Bonds by a first lien on the Net Revenues, Bond Counsel will opine only that a valid and enforceable lien has been granted on the Net Revenues, Bond Counsel has not been requested to, and has not, rendered any opinion as to the priority status of the pledge of the Net Revenues. 10 THE SYSTEM The City acquired an existing Waterworks and Sewer System from the Tarrant County Water Supply Corporation in September, 1971. The properties acquired consisted of complete water and sewer facilities located in the City and the Town of Watauga ("Watagua"), which adjoins the City to the west. Watagua granted a franchise to the City to operate a water and sewer system in Watagua for a period of 35 years, with the option to purchase that portion of the system within its boundaries at any time at a price (as certified by a registered Professional Engineer employed by the City, which is not less than the then appraised value of the portion being sold. See "Sale of System Assets" below. SALE OF SYSTEM ASSETS. . . On or about June 14, 1996, the City of North Richland Hills ("NRH") and the City of Watagua, Texas ("Watagua") entered into a "Settlement and Purchase Agreement" (the "Agreement") providing for (i) the settlement of certain litigation between the two cities involving the right of Watagua to acquire certain water and wastewater properties of NRH located in Watagua and serving its residents and (ii) the sell and conveyance of such water and wastewater properties to Watagua, Under the tenn of such Agreement, Watagua has acquired certain water and wastewater transmission mains, distribution and collection lines, facilities and appurtenances used to provide water and wastewater service within the city limits of Watagua at an agreed purchase price of $9,200,000. The Agreement further provides a "Transition Period" of three years for the orderly transfer of the operations and maintenance of the properties purchased by Watagua. Pending Watagua assuming full responsibility for the operation and maintenance of its properties, NHR has agreed pursuant to a Facilities Operating Agreement to operate and maintain the facilities conveyed to Watagua for two years in return for cash payments of $1,500,000 per year to be paid in equal monthly installments of $125,000, The services to be rendered by NRH under the Facilities Operating Agreement include meter reading and billing for and on behalf of Watagua but does not include the cost of water or charges for wastewater transportation and treatment to be paid the City of Fort Worth, After the two-year operation and maintenance period has concluded, NHR has agreed to read meters and bill accounts on behalf of Watagua for an additional year and Watagua has agreed to pay NHR the sum of $250,000 in equal monthly payments of $20,833,33 for such services. Watagua has the option to perfonn such meter and billing services and if such option is exercised, the amount to be paid NRH during the third year will be reduced to $140,000. The Agreement further addresses the joint use of certain properties conveyed to Watagua and retained by NRH, the cooperation of the parties to obtain for Watagua the necessary water and wastewater operating pennits from the State, the use of fire hydrants, the purchase of water from Fort Worth, the cooperation of the parties with respect to studies and investigations and other matters regarding the separation of properties from the NHR system to Watagua system, At the time of the conveyance of the water and wastewater properties to Watagua, approximately 7,269 customers will be transferred to the Watagua system and NRH will continue to provide water and wastewater collection services to approximately 15,594 customers, NRH estimates such sale añd conveyance of water and wastewater properties will reduce its revenues by approximately $4,397,280 and reduce its overall operation and maintenance expenses by approximately $3,469,683, after complete separation of the systems occurs and Watagua assumes full responsibility for the operations and maintenance of its facilities. From the proceeds of sale of the properties, NRH will use approximately $9,200,000 to defease its outstanding revenue bond indebtedness. Following the issuance of the Bonds, the only outstanding revenue bond indebtedness of the NRH's System will be the Bonds. WATERWORKS AND SEWER SYSTEM. . , The City has contracted with the City of Fort Worth whereby the City of Fort Worth has committed to deliver 10,400,000 gallons of treated water daily through a connection on the western edge of the City and 10,300,000 gallons of treated water through a connection on the southern edge of the City at a cost of $1,45 per 1,000 gallons, Additionally, reserve capacity and peak hour demand is provided by 5 wells, 3 in the Paluxy sand and 2 deeper wells in the Trinity sand, On a non-continuous basis, these wells are capable of 1,300,000 gallons daily, Storage capacity is provided by five elevated storage tanks with a total capacity of 6,500,000 gallons and five ground storage tanks with a total capacity of 11,080,000 gallons. The City has a total daily delivery capacity of 20,700,000 gallons per day through the two connections to the Fort Worth system, and has approval from Fort Worth to take an additional 8,000,000 gallons daily through a delivery facility on the southwestern edge of the City. The City has entered into a long tenn contract with the Trinity River Authority of Texas ("TRA"), whereby TRA would provide treated water through a point of delivery on the eastern edge of the City. TRA supplies water for the neighboring cities of Bedford and Euless and has now extended its system to provide water for the City, Colleyville and Grapevine, The City is supplied through a 16" tap on a 24" transmission main which will primarily serve the eastern and northern sections of the City, The tap will supply 5,000,000 gallons daily. The City is presently taking an average of 2,200,000 gallons per day from this TRA connection, TRA sold bonds in August, 1980, to finance the extension of the system. The City will pay monthly to TRA an amount sufficient to defray its percentage of the debt service and other cost of operations from net revenues of the City's Waterworks and Sewer System, Such payments constitute operating and maintenance expenses of the City's Waterworks and Sewer System, The City also has 7 Paluxy Sand wells that are used exclusively for the golf course irrigation system. Management of the golf course is invoiced monthly for water usage based on the City's cost of water, wells and operating expense. 11 TABLE 1- HISTORICAL WATER CONSUMPTION (GALLONS) Fiscal Year 1991 1992 1993 1994 1995 1996 Peak Da~ Usage 18,911,000 13,906,000 22,170,000 13,451,000 13,487,000 14,614,000 Average Day Usage 7,682,460 7,435,682 9,599,984 6,820,134 8,384,008 10,033,529 TABLE· 2 TEN LARGFST WATER CUSTOMERS (BASED ON GALLONS CONSUMED) Customer H&M Food System N. Hills Medical Center JMB Income Properties Birdville Independent School District Showdown Creek Apartments Waterford on the Green Town Oaks Apartment Philip W. Twente La Casta Mobile Home Central Pacific Housing Type of Property Food Processor Hospital and Professional Offices Shopping Mall School Apartments Apartments Apartments Apartments Mobile Home Park Apartments Total Usage 2,804,098,000 2,721,877,000 3,503,994,000 2,487,349,000 3,060,163,000 3,662,238,000 Estimated Fiscal 9-30-96 Water Usage 105,169,189 26,974,496 26,831,957 25,292,214 17,515,048 16,349,964 15,774,333 12,799,237 12,515,865 9,515,996 268,738,299 IMPACf FEFS. . . The City approved the collection of water and wastewater impact fees in June of 1990, Estimated % of Total Water Usage 2.87% 0.74% 0.73% 0,69% 0.48% 0.45% 0.43% 0.35% 0,34% 0,26% 7,34% The fees are charges imposed by the City for new development to generate funding, or recovering advances, for capital improvements or facility expansion costs by the City necessitated by or attributable to the new development. The fee structure is based on water service connection size, TABLE 3 - MONTHLY WATER RATES (EFFECTIVE SEPTEMBER 30, 1995) 1. Billing policy where only one user or building is tied to the same meter: A. The monthly bill will be computed as follows, The minimum bill taken from Schedule A plus a volume charge of $2.45 per 100 cubic feet on monthly volume greater than the minimum volume from Schedule A. 2. Billing policy where more than one user or building is tied onto the same meter: It shall be the policy of the City to bill each home, homes, duplex, triplex, offices or any other building where more than one user is tied on the same meter at the rate of $9,00 per unit per month minimum for the first 267 cubic feet of water used, plus a volume charge calculated from Schedule A. 3, Billing for apartment complexes and trailer parks: A. $9.00 per month for each apartment or trailer for the first 267 cubic feet of water used plus a volume charge calculated from Schedule A. B. Apartment house or trailer park owner shall furnish a certified statement of occupancy prior to the 10th of each month. Failure to file occupancy statement will result in billing for 100% occupancy. Schedule A (Volume Used in Cubic Feet) Meter Size (inches) --2L£... ~ ~ ~ ~ -L- 4" 6" and 8" Minimum Bill $ 9,00 $ 12.60 $ 17.11 $ 36.01 $ 46,82 $ 86.43 $ 144.06 $ 369,29 Volume Charge: $0.00 Minimum Bill for the first: 267 345 460 937 1,300 2,400 4,000 10,000 $2.45 for all above: 267 345 460 937 1,300 2,400 4,000 10,000 12 SEWER SYSTEM The City has previously owned a complete sewage collection system within the corporate limits of the City and Watauga. The portion of the wastewater system outside the limits of Watauga was recently sold to Watauga. See "The System - Sale of System Assets" herein. The City has executed long-term contracts with the City of Fort Worth and the 1RA to transport City's total effluent. Beginning in the year 1969, lRA issued bonds in the cumulative amount of $880,000 to construct, acquire or otherwise provide facilities necessary to transport and treat the effluent. Pursuant to contracts with the lRA, City is obligated to make annual payments to lRA in amounts sufficient to pay, when due, the total principal and interest on 1RA's Bonds issued for these purposes, administrative and other operation and maintenance expenses chargeable to said bonds, All such annual payments have been declared operation and maintenance expenses of the Water and Sewer System, and are so accounted for in City's annual statements of income and expense, TABLE 4 . MONTHLY SEWER RATES (EFFECTIVE SEPTEMBER 30, 1995) 1. A monthly service charge shall be paid by all customers in the amount of $7,22. 2. A monthly volume charge shall also be charged to all customers in the amount of $1,17 per 100 cubic feet of water used, or wastewater produced, as more specifically set forth hereinafter, The monthly volume charge for residential customers will be based on the individual customer's average monthly water use during the previous winter quarter months of December, January and February; but in no event shall the volume used to compute this monthly charge exceed 2,500 cubic feet. The volumes used to compute these charges are based on the amount of water used by the residential customer as measured by a meter. Where no previous winter quarter average is available from the records, the volume to be used for this monthly volume charge shall be estimated, such estimated volume not to exceed 2,500 cubic feet per customer, 3. The monthly charges to commercial and industrial customers will be based on total water use for each month as measured by appropriate meters, with the provision that if a customer can show, to the satisfaction of the Director of Utilities, that a significant portion of the metered water usage does not enter the sanitary sewer system, the customer will be charged for only that volume entering the sewers, as determined by a method approved by the Director of Utilities. 4, All Industrial Users: To be served on system only by specific contract approved by Council for the particular Industrial Sewage or Waste involved. 5, In the event a commercial customer is introducing sewage into the sewage system that creates unusual conditions or problems such as excessive oils, greases, or chemicals, the Director of Public Works shall advise the customer of his options, A. To correct at his own expense the conditions causing the excess, B, To pay a monthly rate to be determined by the Director of Utilities to the City equal to the expense of maintained and/or treating the excessive waste, 6. Billing policy where more than one user or building is tied onto the same water meter: It shall be the policy of North Richland Hills to bill each home, homes, duplex, triplex, offices, or any other buildings where more than one user is tied onto the same water meter at $7.22 per month for each customer unit for sewer, plus a monthly volume charge of $1.17 per 100 cubic feet of water used by the building. The monthly volume charge to be calculated as noted in paragraph (2)B above with the exception that there shall be no volume limit as is the case for residential customers. 7, Billing for apartment complexes and trailer parks: A. $10,00 per month service charge plus $7,22 per month per apartment or trailer plus a monthly volume charge of $1,17 per 100 cubic feet of water used by the apartment complex or park, B. Apartment or trailer park owner shall furnish a certified statement of occupancy prior to the first of each month. Failure to file occupancy statement will result in billing for 100% occupancy. 13 TABLE 5 - DEPOSITS Calculation of the Deposit . . . The, required deposit will be based on historical average consumption using not less than 12 consecutive months of data, computed using the current North Richland Hills water and wastewater rates. The required deposit will be 1.5 times the average bill. If no recent historical data is available the deposit will be taken from Schedule B. All residential customers will use Schedule B. Schedule B (Water and Sewer Deposits) (Effective July 1, 1988) Customer Tvve Water Sewer Total Residential: All Sizes: $ 37.00 $ 18,00 $ 55,00 Commercial: 3/4" - 1/4" $ 55.00 $ 36.00 $ 91.00 112" - 4" 350.00 180,00 530.00 6" - 8" 4,300.00 2,710.00 7,010.00 Multi-family: All SizeslPer Unit $ 20,00 $ 19,00 $ 39.00 Rates established above for billings on or after February 3, 1994, include all current charges by the City's suppliers of purchased water and wastewater treatment. Any future changes in the City's cost of water purchased and wastewater treatment from the City's suppliers will be passed through to the City's customers, The changes will be maintained as a separate item by the Utility Billing Department and will be made available to utility customers upon request. Only changes in the cost of water purchases and sewer treatment will be passed through. 14 TABLE 6 - PRo-FoRMA WATERWORKS AND SEWER SYSTEM REVENUE DEBT SERVICE REQUIREMENTS DEBT INFORMATION Fiscal Year Ended 9130 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 This $5,135,000 Issue (I) (2) Principal Interest Total $ 445,000 $ 172,646 $ 617,646 370,000 213,730 583,730 385,000 198,930 583,930 375,000 182,953 557,953 390,000 167,015 557,015 410,000 150,050 560,050 425,000 131,805 556,805 445,000 112,467 557,467 440,000 91,775 531,775 460,000 71,095 531,095 485,000 49,015 534,015 505,000 25,250 530,250 %of Principal Retired 38,27% 80.72% 100.00% $ 5,135,000 $ 1,566,731 $ 6,701,731 (1) After the Refunding and Defeasance of the Outstanding Revenue Bonds there will be no outstanding waterworks and sewer system debt. (2) Average life of the issue - 6,515 years. Interest on the Bonds has been calculated at the average rate of 4.68% for purposes of illustration, AUTHORIZED BUT UNISSUED REVENUE BONDS. , , The City has no voted but unissued revenue bonds, and pursuant to State law is not required to approve its revenue bonds through election, ANTICIPATED ISSUANCE OF REVENUE BONDS, , . The City does not anticipate the issuance of additional revenue bonds within the next twelve months. PENSION FUND. . . The City pro,:ides pension benefits for all of its full-time employees through the Texas Municipal Retirement System ("TMRS"), a State-wide administered pension plan, The City makes annual contributions to the plan equal to the amounts accrued for pension expense, For more detailed information concerning the retirement plan, see Appendix B, "Excerpts from the City's Annual Financial Report". 15 FINANCIAL INFORMATION· TABLE 8 - CONDENSED STA TEMENT OF OPERATIONS Fiscal Year Ended September 30, Operatini Revenues 1996(1) 1995 1994 1993 1992 Water and Sewer Service Sales $ 18,768,310 $ 17,690,846 $ 17,214,168 $ 16,057,047 $ 14,047,924 Water and Sewer Connections 335,933 316,370 443,208 377,247 577,493 Sewer Transportation 8,026 15,881 13,931 14,443 Service Charges 486,300 485,120 281,635 321,824 318,712 Inspection Fees 45,306 33,675 43,910 29.709 43,592 Assessment Revenue 8,493 22,881 25,005 29,917 43,624 Investtnentlncome 300,153 478,791 270,151 348,933 532,041 Total Revenues $ 19,944,495 $ 19,035,709 $ 18,293,958 $ 17,178,608 $ 15,577,829 Operatini Expenses Contractual Services $ 9,881,943 $ 9,066,359 $ 8,737,227 $ 8,359,887 $ 7,095,389 Personal Services 2,793,290 3,031,342 2,357,810 2,264,327 2,238,750 Repairs and Maintenance 1,277,898 939,192 816,149 663,289 538,842 Supplies 764,506 897,477 653,166 671,951 710,667 Franchise Fees 465,970 411,206 396,997 339,136 303,697 Payments in Lieu of Taxes 273,123 255,819 229,950 216,886 206,625 Administration Fees 1,025,000 1,296,860 1,025,000 1,025,000 1,025,000 Total Operating Expenses $ 16,481,730 $ 15,898,255 $ 14,216,299 $ 13,540,476 $ 12,118,970 Net Available for Debt Service $ 3,462,765 $ 3,137,454 $ 4,077,659 $ 3,638,132 $ 3,458,859 Water Connections City of North Richland Hills 17,066 16,962 16,858 16,540 16,152 City ofWatauga 7,337 7,332 7,328 7,256 7,156 Total 24,403 24,294 24,186 23,796 23,308 Sewer Connections City of North Richland Hills 15,765 15,709 15,653 15,597 15,085 City ofWatauga 7,137 6,659 6,180 6,090 6,114 Total 22,902 22,368 21,833 21,687 21,199 (I) Unaudited. TABLE 9 - COVERAGE AND FUND BALANCES (1) Average Annual Principal and Interest Requirements, 1997 - 2008..,........................................,.............,............,..............,$ Coverage of Average Requirements by 9130/96 Net ..Income............,.............................,......,............................................. 558,478 6.20 Times Maximum Principal and Interest Requirements, 1997 ..,........................................................................................................ $ 617,646 Coverage of Maximum Requirements by 9130/96 Net Income...............................................................,............,................. 5,61 Times Interest and Sinking Fund, 9-30-96 """.,...................,.,..."..",..,.."".............""..,...............,.,..,.,.""...'",....................,....,.."" $ 733,840 Reserve Fund, 9-30-96............,...... ................""", ....... .......................................,..,.,......."""", .............. ..........."" ........., ....." $ I ,829,030 (I) Includes the Bonds being offered herein; excludes the Refunded and Defeased Bonds, . Represents water usage and revenue coverage prior to the sale of a portion of the water system assets to the City of Watagua and a reduction in the customer base served by the properties conveyed to Watagua, See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities and its possible impact and the operations of the City's Water and Sewer System. 16 TABLE 10 - VALUE OF THE SYSTEM* Land and Improvements Buildings Utility Plant in Service Machinery & Equipment Construction in Progress 1995 $ 349,464 1,132,701 57,332,784 1,228,716 3,902,998 $ 63,946,663 Fiscal Year Ended September 30, 1994 1993 1992 $ 349,464 $ 349,464 $ 349,464 1,132,701 1,132,701 1,132,701 53,294,040 50,569,868 47,011,894 1,216,500 1,210,376 1,116,312 3,152,906 3,124,247 2,240,403 $ 59,145,611 $ 56,386,656 $ 51,850,774 1991 $ 349,464 951,288 45,831,236 1,075,433 989,977 $ 49,197,398 Less: Accumulated Depreciation 13,692,568 12,512,348 11,564,968 10,591,399 9,864,104 Value of System after Depreciation $ 50,254,095 $ 46,633,263 $ 44,821,688 $ 41,259,375 $ 39,333,294 * Represents water usage and revenue coverage prior to the sale of a portion of the water system assets to the City of Watagua and a reduction in the customer base served by the properties conveyed to Watagua, See "Sale of System Assets" herein for a description of the sale of certain water and wastewater facilities and its impact on the operations of the City's Water and Sewer System, TABLE 11- CITY'S EQUITY IN SYSTEM** Fiscal Year Ended September 30, 1995 1994 1993 1992 1991 Net System Value $ 63,946,663 $ 59,145,611 $ 56,386,656 $ 51,850,774 $ 49,197,398 Less: Depreciation 13,692,568 12,512,348 11,564,968 10,591,399 9,864,104 $ 50,254,095 $ 46,633,263 $ 44,821,688 $ 41,259,375 $ 39,333,294 Add: Other Assets and Advances to Other Funds 639,675 663,170 669,588 680,584 644,729 Net Working Capital 952,016 1,996,244 2,231,759 3,128,373 2,538,993 Net Restricted Assets 3,863,654 3,724,832 4,535,037 5,736,327 6,685,819 Total $ 55,709,440 $ 53,017,509 $ 52,258,072 $ 50,804,659 $ 49,202,835 Obligations Revenue Debt and Other Liabilities $ 14,177,381 $ 15,127,031 $ 16,009,412 $ 16,837,913 $ 17,616,035 Less: I & S Fund & Reserve Fund 2,464,853 2,488,636 2,506,743 2,412,238 2,404,476 Net Revenue Debt $ 11,712,528 $ 12,638,395 $ 13,502,669 $ 14,425,675 $ 15,211,559 City's Equity in System $ 43,996,912 $ 40,379,114 $ 38,755,403 $ 36,378,984 $ 33,991,276 % of Equity in System 78.98% 76.16% 74.16% 71.61% 69,08% ** Includes properties recently sold to Watauga (see "Sale of System Assets" herein). FINANCIAL POLICIES Basis of AccountinJ! . , ,The City's accounting records of the governmental fund revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they are available and measurable. Expenditures are recognized in the accounting period in which the fund liability occurred, if measurable, except for unmatured interest on general long-term debt and on special assessment indebtedness secured by interest-bearing special assessment levies, longevity and certain other employees' benefits are recognized when due. Proprietary Fund revenues and expenses are recognized on the accrual basis, Revenues are recognized in the accounting period in which they are earned and become measurable, Expenses are recognized in the accounting period incurred. Fiduciary Fund revenues and expenses or expenditures are recognized on the modified accrual basis, Transfers are recognized in the accounting period in which the interfund receivable and payable arise (see Appendix B - "Excerpts from The City of North Richland Hills, Texas Annual Financial Report for the Year Ended September 30, 1995"). General Fund Balance. . . The City's policy is to maintain surplus and unencumbered funds equal to 12% to 15% of the next fiscal year's operating budget. 17 Debt Service Fund Balance. , . The City's policy is to maintain surplus funds equal to a minimum of three (3) months of debt service in the Debt Service Fund. City policy is to pay "first dollar" tax collections into the Debt Service Fund until the levy for debt service has been collected. The City budgets on a 97.5% collections ratio and the 2.5% non-collectible factor is accounted for in the General Fund. Use of Bond Proceeds. Grants. etc. . . . The City's policy is to use bond proceeds, grants, revenue sharing or other non-recurring revenues for capital expenditures only. Such revenues are never to be used to fund City operations, Budlletarv Procedures , . , The City Charter establishes the fiscal year as the twelve-month period beginning October 1. The departments submit to the City Manager a budget of estimated expenditures for the ensuing fiscal year by the middle of March, The City Manager subsequently submits a budget of estimated expenditures and revenues to the City Council by August 15, The City Council shall hold a public hearing on the budget after giving at least 10 days notice of the hearing in the official newspaper of the City. The Council shall then make any changes in the budget as it deems advisable and shall adopt a budget prior to October 1, If the Council fails to adopt a budget then the budget proposed by the City Manager shall deem to have been adopted. During the fiscal year, strict budgetary control is maintained by various methods, including the review of departmental appropriation balances with purchase requisitions prior to their release to vendors. Departmental appropriations that have not been expended lapse at the end of the fiscal year. Therefore, funds that were budgeted and not used by the departments during the fiscal year are not available for their use unless appropriated in the ensuing fiscal year's budget. Fund Investments. . . The City's investment policy parallels state law which governs investment of public funds, The City currently utilizes the State of Texas Investment Pool for the bulk of its investments, The Pool investments are restricted to direct obligations of the U.S. Government and its agencies. INvEsTMENTS The City of North Richland Hills invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council of the City of North Richland Hills, Both state law and the City's investment policies are subject to change, LEGAL INVESTMENTS. . . Under Texas law, the City is authorized to invest in (I) 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 City deposits, (7) certificates of deposit and share certificates issued by a state or federal credit union domiciled in the State of Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in the clauses (I) through (5) or in any other manner and amount provided by law for City deposits, (8) fully collateralized repurchase agreements that have a defined tennination date, are fully secured by obligations described in clause (1), and are placed 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-I or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper that is rated at least A-lor P-I 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, (II) no-load money market mutual funds regulated by the Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange Commission that: have an average weighted maturity of less than two years; invests exclusively in obligations described in the preceding clauses; and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service, The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is detennined by an index that adjusts opposite to the changes in a market index. 18 INVESTMENT POLICIES, , , Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that include a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives conceming: (I) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification ofthe portfolio, and (6) yield, Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers ofthe City shall submit an investment report detailing: (I) the investment position ofthe City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS. . . Under Texas law the City 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 City Council; (3) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities, and (c) deliver a written statement attesting to these requirements; (4) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (5) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (6) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (7) restrict the investment in mutual funds in the aggregate to no more than 80% of the City's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and further restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; and (8) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements. TABLE 12 - CURRENT INVESTMENTS As of September 30, 1996, the City's investable funds were invested in the following categories: Description Percent Book Value Market Value Discount Notes 40.06% $ 13,914,075 $ 13,918,350 T-Bills 11.15% 3,871,336 3,876,786 Texpool 43.05% 14,951,015 14,950,268 Logic 5.75% 1,996,587 1,996,448 100,00% $ 34,733,013 $ 34,741,852 19 SELECTED PROVISIONS OF THE BOND ORDINANCE The City of North Richland Hills will adopt an ordinance (the "Ordinance") authorizing the Bonds, which will be in substantially the same fonn as the ordinances authorizing the outstanding bonds, selected provisions of which are shown below: SECflON 10: Definitions. For all purposes of this Ordinance 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: "Additional Bonds" - The additional revenue bonds or obligations which the City reserves the right to issue on a parity with the Bonds in accordance with the tenns and conditions set forth in Section 18 hereof, "Average Annual Debt Service" - That average amount which, at the time of computation, will be required to pay the Debt Service of obligations when due and derived by dividing the total of such Debt Service by the number of years then remaining before final maturity. Capitalized interest payments provided from proceeds of Bonds Similarly Secured shall be excluded in making the aforementioned computation. "Bonds" - The "City of North Richland Hills, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December I, 1996, authorized by this Ordinance, "Bonds Similarly Secured" - Collectively, the Bonds and any Additional Bonds, which shall be parity obligations being equally and ratably secured by and payable from a lien on and pledge of the Net Revenues of the System. "City" - The City of North Richland Hills, located in the County of Tarrant, 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 City 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 Bonds Similarly Secured without a fixed numerical rate, that such obligations bear, or would have borne, interest at the highest rate reached, or that would have applied to such obligations (using the index or method for computing interest applicable to such obligations) during the twenty-four (24) month period next preceding the date of computation; 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, "Fiscal Year" - The twelve month financial accounting period of the System ending September 30th of each year; provided, however, the City, by ordinance, may change the Fiscal Year to another period of not less than twelve calendar months. "Government Obligations" - Direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and United States Treasury obligations such as its State and Local Government Series in book-entry fonn, "Gross Revenues" - All income, receipts and revenues of every nature derived or received from the operation and ownership (excluding refundable meter deposits, restricted gifts and grants in aid of construction, impact fees charged developers and special assessments against landowners) of the System, including earnings and income derived from the investment or deposit of moneys in any special funds or accounts created and established for the payment and security of the Bonds Similarly Secured and other obligations payable solely from and secured only by a lien on and pledge of the Net Revenues. "Operating and Maintenance Expenses" - All current expenses of operating and maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair obligations payable from Net Revenues shall be deducted in determining Net Revenues, Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating and Maintenance Expenses shall include payments under contracts for the purchase of water supply, treatment of sewage or other materials, goods or services for the System to the extent authorized by law and the provisions of such contract. "Net Earnings" - The meaning assigned to such tenn in Section 18 hereof. "Net Revenues" - Gross Revenues of the System, with respect to any period, after deducting the System's Operating and Maintenance Expenses during such period. "Outstanding" - When used in this Ordinance with respect to Bonds or Bonds Similarly Secured, as the case may be, means, as of the date of determination, all Bonds and Bonds Similarly Secured theretofore sold, issued and delivered by the City, except: 20 (1) those Bonds or Bonds Similarly Secured cancelled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Bonds or Bonds Similarly Secured paid or deemed to be paid in accordance with the provisions of Section 28 hereof; and (3) those Bonds or Bonds Similarly Secured that have been mutilated, destroyed, lost, or stolen and replacement bonds have been registered and delivered in lieu thereof. "Required Reserve - The amount required to be deposited and maintained in the Reserve Fund under the provisions of Section 14 of this Ordinance. "System" - All properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment and transmission of treated potable water and the collection, treatment and disposal of water-carried wastes, together with all future extensions, improvements, replacements and additions thereto; provided, however, that notwithstanding the foregoing, and to the extent now or hereafter authorized or pennitted by law, the term "System" shall not mean to include facilities of any kind which are declared not to be a part of the System and which are acquired or constructed by or on behalf of the City with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of the City which are not Bonds Similarly Secured but which are payable from and secured by other liens on and pledges of any revenues, sources or payments, not pledged to the payment of the Bonds Similarly Secured including, but not limited to, special contract revenues or payments received from any other legal entity in connection with such facilities. SECTION 11: Pledge, The City hereby covenants and agrees that all of the Net Revenues of the System, with the exception of those in excess of the amounts required to establish and maintain the special Funds created for the payment and security of the Bonds Similarly Secured, are hereby irrevocably pledged, equally and ratably, to the payment of the Bonds and Additional Bonds, if issued, and the interest thereon, as hereinafter provided, It is hereby ordained that the Bonds Similarly Secured, and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the City, SECTION 12: Water and Sewer System Fund. The City hereby covenants and agrees that the Gross Revenues of the System shall be deposited, as collected and received, into a separate account (previously created, established and to be maintained with a depository bank of the City) known as the Waterworks and Sewer System Fund (herein called the "System Fund") and that the Gross Revenues of the System shall be kept separate and apart from all other funds of the City, All Gross Revenues deposited into the System Fund shall be pledged and appropriated to the extent required for the following uses and in the order of priority shown: FIRST: To the payment of all necessary and reasonable Operating and Maintenance Expenses as defined herein or required by statute to be a first charge on and claim against the Gross Revenues of the System. SECOND: To the payment of the amounts required to be deposited into the Interest and Sinking Fund (hereinafter defined) created and established for the payment of the principal of and interest on each of the Bonds Similarly Secured as the same become due and payable. THIRD: To the payment of the amounts required to be deposited into the Reserve Fund (hereinafter defined) to establish and maintain the Required Reserve in accordance with the provisions of this Ordinance or any other ordinance relating to the issuance of Bonds Similarly Secured, Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter pennitted by law. SECTION 13: Interest and Sinking Fund. For purposes of providing funds to pay the principal of and interest on the Bonds Similarly Secured as the same become due and payable, the City agrees to maintain on the books and records of the City, a separate and special account or fund known as the "Waterworks and Sewer System Interest and Sinking Fund" (the "Interest and Sinking Fund") and moneys deposited to the credit of such account shall be kept in a special fund maintained at the depository of the City, The City covenants that there shall be deposited to the credit of the Interest and Sinking Fund prior to each principal and interest payment date from the available Net Revenues an amount equal to one hundred per centum (100%) of the amount required to fully pay the interest on and the principal of the Bonds then falling due and payable, such deposits to pay maturing principal and accrued interest on the Bonds to be made in substantially equal monthly instaHments on or before the fifteenth day of each month, beginning on or before the fifteenth day of the month next following the delivery of the Bonds to the initial purchaser(s). The required monthly deposits to the Interest and Sinking Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Interest and Sinking Fund and Reserve Fund is equal to the amount required to fully pay and discharge all Outstanding Obligations Bonds Secured (principal and interest) or, (ii) the Bonds are no longer Outstanding, 21 Accrued interest and premium, if any, received from the initial purchaser(s) of the Bonds, shall be taken into considera the amount of the monthly deposits hereinabove required to be deposited into the Interest and Sinking Fund from th of the System, Additionally, any proceeds of the Bonds not required to complete the improvements and extensions tc System shall be deposited into the Interest and Sinking Fund and may be taken into consideration and reduce the ame deposits required to be deposited into the Interest and Sinking Fund from the Net Revenues of the System. SECTION 14: Reserve Fund, For purposes of providing a reserve for the payment of the Bonds Similarly Secured, and covenants to maintain a special fund or account known as the "Waterworks and Sewer System Reserve Fund Fund"), which Fund shall be kept and maintained at an official depository of City funds. All funds deposited to 1 Reserve Fund (excluding earnings and income derived or received from deposits or investments which may be tr System Fund referenced in Section 13 of this Ordinance during such periods as there is on deposit in the Resen amount required to be accumulated and maintained therein) shall be used for the payment of (i) the principal of ane Bonds Similarly Secured, when and to the extent other funds available for such purposes are insufficient, and (ii) th amount of a series of Bonds Similarly Secured provided following such payment (x) such series of Bonds Similar] longer deemed to be "Outstanding" as such term is defined herein and (y) the balance remaining on deposit to 1 Reserve Fund after making such payment is the total amount required to be accumulated and maintained in such FUI Similarly Secured to remain Outstanding. Additionally, in the event one or more surety bonds are used to provide: amount required to be maintained in the Reserve Fund as hereinafter authorized, amounts deposited to the credit of tl may also be used to restore or replenish the full amount of the surety bond coverage afforded by such surety bond, By reason of the issuance of the Bonds, the total amount required to be accumulated and maintained in the Reserve F is hereby determined to be $ (the "Required Reserve"), which amount equals at least the Average Annual the Bonds, Simultaneously with the delivery of the Bonds, the City shall cause to be deposited to the credit of the] amount equal to the Required Reserve from funds on deposit in the reserve fund maintained for the payment ani Refunded Bonds and Defeased Bonds. As and when Additional Bonds are delivered or incurred, the Required Reserve shall be increased, if required, to an the lesser of (i) the Average Annual Debt Service (calculated on a Fiscal Year basis) for all Bonds Similm Outstanding, as determined on the date each series of Additional Bonds are delivered or incurred, as the case m maximum amount in a reasonably required reserve fund that can be invested without restriction as to yield pursuant of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any a required to be maintained in the Reserve Fund shall be accumulated (i) by depositing cash to the credit of tl (immediately after the delivery of the then proposed Additional Bonds) in an amount to fully fund the Required Rese option of the City, by making monthly deposits, on or before the 15th day of each month following the month of de proposed Additional Bonds, of not less than 1I60th of the additional amount to be maintained in said Fund by reasc of the Additional Bonds then being issued (or 1I60th of the balance of the additional amount not deposited immedi lieu of depositing cash or making monthly deposits to the Reserve Fund to accumulate any increase in the Reserve I the issuance of Additional Bonds and to the extent permitted by law, the City may provide for one or more surety I company or institution having a rating in the highest rating category by two nationally recognized rating agencies deposited to the credit of Reserve Fund, Such surety bonds shall provide surety bond coverage in an amount suffici all or part of the total amount then required to be accumulated and maintained in the Reserve Fund for the ben Similarly Secured. When and so long as the cash and investments and/or surety bond coverage in the Reserve Fund total not less t Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and when the Reserve Fund at any time the Required Reserve (other than as the result of the issuance of Additional Bonds as provided in the preceding I City has elected to accumulate all or a portion of the Required Reserve with Net Revenues of the System) , the C agrees to cause monthly deposits to the Reserve Fund to be made on or before the 15th day of each month (beginnil following the month the deficiency in the Required Reserve occurred by reason of a draw on the Reserve Fund ' reduction in the market value of investments held for the account ofthe Reserve Fund) in an amount equal to 11601 Reserve from the Net Revenues of the System until the Required Reserve has been fully restored. Should all 0 Required Reserve be provided by a surety bond and should the City be obligated to repay or reimburse the issuer I to replenish and restore the full amount of surety bond coverage, monthly deposits from the Net Revenues sha Reserve Fund in the amounts required to restore the full amount of the surety bond coverage in accordance with surety bond or any agreement executed in connection therewith. The City further covenants and agrees that, s payments to be made to the Interest and Sinking Fund, the Net Revenues shall be applied and appropriated and USI maintain the Required Reserve and to cure any deficiency in such amounts as required by the terms of this Ordim ordinance pertaining to the issuance of Additional Bonds. 22 SECflON 15: Deficiencies: Excess Net Revenues. (a) If on any occasion there shall not be sufficient Net Revenues of the System to make the required deposits into the Interest and Sinking Fund and the Reserve Fund, then such deficiency shall be cured as soon as possible from the next available Net Revenues of the System, or from any other sources available for such purpose. (b) Subject to making the required deposits to the Interest and Sinking Fund and the Reserve Fund when and as required by this Ordinance, or any ordinance authorizing the issuance of Additional Bonds, the excess Net Revenues may be used by the City for any lawful purpose, SECTION 16: Investments - Securitvof Funds. (a) Money deposited to the credit of any Fund referenced in this Ordinance may, at the option of the City, be placed in time deposits or certificates of deposit secured (to the extent not insured by the Federal Deposit Insurance Corporation) by obligations of the type hereinafter described, or be invested, including investments held in book-entry fonn, in direct obligations of the United States of America and obligations guaranteed or insured by the United States of America, which, in the opinion of the Attorney General of the United States, are backed by its full faith and credit or represent its general obligations; 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. Such investments (except State and Local Government Series investments held in book entry fonn, which shall at all times be valued at cost) shall be valued in tenns 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 30 days of the date of passage of each ordinance authorizing the issuance of Additional Bonds. All interest and income derived from deposits and investments in the Interest and Sinking Fund immediately shall be credited to, and any losses debited to, the Interest and Sinking Fund, All interest and interest income derived from deposits in and investments of the Reserve Fund shall, subject to the limitations provided in Section 14 hereof, be credited to and deposited in the System Fund, All such investments shall be sold promptly when necessary to prevent any default in connection with the Bonds. (b) That money deposited to the credit of any of the Funds referenced in this Ordinance, to the extent not invested, shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds. SECflON 17: Payment of Bonds. While any of the Bonds are Outstanding, the City's Director of Finance (or other designated financial officer of the City) shall cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Interest and Sinking 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 or comes due by reason of redemption prior to maturity; 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, SECflON 18: Issuance of Additional Bonds. Subject to the provisions hereinafter appearing as to conditions precedent which must be satisfied, the City reserves the right to issue, from time to time as needed, Additional Bonds for any lawful purpose. Such Additional Bonds may be issued in such fonn and manner as now or hereafter authorized by the laws of the State of Texas for the issuance of evidences of indebtedness or other instruments, and should new methods or financing techniques be developed that differ from those now available and in nonnal use, the City reserves the right to employ the same in its financing arrangements provided only that the following conditions precedent for the authorization and issuance of the same are satisfied, to wit: (a) The Director of Finance of the City (or other officer of the City then having the primary responsibility for the financial affairs of the City) shall have executed a certificate stating (a) that, to the best of his knowledge and belief, the City is not then in default as to any covenant, obligation or agreement contained in any ordinance or other proceeding relating to any obligations of the City payable from and secured by a lien on and pledge of the Net Revenues of the System that would materially affect the security or payment of such obligations and (b) either (i) payments into all special funds or accounts created and established for the payment and security of all outstanding obligations payable from and secured by a lien on and pledge of the Net Revenues of the System have been made and that the amounts on deposit in such special funds or accounts are the amounts then required to be on deposit therein or (ii) the application of the proceeds of sale of such obligations then being issued will cure any such deficiency. (b) The Additional Bonds shall be scheduled to mature or be payable as to principal on March I or September I (or both) in each year the same are to be outstanding or during the tenn thereof. (c) The City has secured a certificate or opinion of an independent Certified Public Accountant to the effect that, according to the books and records of the City, the Net Earnings, for the preceding Fiscal Year or for 12 consecutive months out of the 15 months immediately preceding the month the ordinance authorizing the issuance of the Additional Bonds is adopted, are at least equal to 1.25 times the Average Annual Debt Service for all Bonds Similarly Secured then Outstanding after giving effect to the issuance of the Additional Bonds then being issued. In making a determination of the Net Earnings, the Accountant may take into consideration a change in the rates and charges for serviées and facilities afforded by the System that became effective at least sixty (60) days prior to the last day of the period for which Net Earnings are determined and, for purposes of satisfying the above Net Earnings test, make a pro forma determination of the Net Earnings of the System for the period of time covered by his certification or opinion based on such change in rates and charges being in effect for the entire period covered by the Accountant's certificate or opinion. 23 As used in this Section, the tenn "Net Earnings" shall mean the Gross Revenues of the System after deducting the Operating1 Maintenance Expenses of the System, but not depreciation charges or expenditures which, under generally accepted accou~ principles, should be charged to capital expenditures. SECTION 19: Refunding Bonds, The City reservès the right to issue refunding bonds to refund all or any part of the BiI Similarly Secured (pursuant to any law then available) upon such tenns and conditions as the City Council of the City may deei\ be in the best interest of the City and its inhabitants, and if less than all such Bonds Similarly Secured then outstanding are retun4 the conditions precedent prescribed (for the issuance of Additional Bonds) set forth in Section 18(c) of this Section shall be sati. and the Accountant's certificate or opinion required in Section l8(c) shall give effect to the Debt Service of the proposed refun4 bonds (and shall not give effect to the Debt Service of the Bonds Similarly Secured being refunded following their cancellati~ provision being made for their payment), SECTION 20: Obligations of Inferior Lien and Pledge. The City hereby reserves the right to issue obligations payable froml secured by a lien on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the lien and pl~ securing the payment of the Bonds Similarly Secured, as may be authorized by the laws ofthe State of Texas. SECTION 21: Rates and Charges. For the benefit of the Holders of the Bonds and in addition to all provisions and covenants inl laws of the State of Texas and in this Ordinance, the City hereby expressly stipulates and agrees, while any of the Bonœl Outstanding, to establish and maintain rates and charges for facilities and services afforded by the System that are reaso~ expected, on the basis of available information and experience and with due allowance for contingencies, to produce Gross Rev~ in each Fiscal Year sufficient: (a) To pay Operating and Maintenance Expenses, depreciation charges and replacement and bettennent costs, and (b) To produce Net Revenues sufficient to pay the principal of and interest on the Bonds Similarly Secured and the arnounts required to be deposited in any reserve or contingency fund created for the payment and security of the Bonds Similarly Secured, and any other obligations or evidences of indebtedness issued or incurred that are payable only from and secured solely by a lien on and pledge of the Net Revenues of the System. (c) To produce Net Revenues equal to at least 1.20 times the annual Debt Service for the then Outstanding Bonds Similarly Secured. (d) Any other legally incurred indebtedness payable from the revenues of the System and/or secured by a lien on the System. SECTION 22: Maintenance of System _ Insurance. The City shall maintain the System in good condition and operate the Systel\ an efficient manner and at reasonable cost. While any Bonds are Outstanding, the City agrees to maintain casualty and Ii insurance on the System of a kind and in an amount customarily carried by municipal corporations owning and operating silu properties. Nothing in this Ordinance shall be construed as requiring the City to expend any funds derived from sources other. the operation of the System, but nothing herein shall be construed as preventing the City from doing so. SECTION 23: Sale or Lease of Proverties. The City, to the extent and in the manner authorized by law, may sell or exchangel consideration representing the fair value thereof, as determined by the City Council of the City, any property not necessary. required in the efficient operations of the System, or any equipment not necessary or useful in the operations thereof or whili. obsolete, damaged or worn out or otherwise unsuitable for use in the operation of the System. The proceeds of any sale of proped ofthe System shall be deposited in the System Fund. SECTION 24: Records and Accounts. The City hereby covenants and agrees that so long as any of the Bonds are Outstandir¡ will keep and maintain separate and complete records and accounts pertaining to the operations of the System in which complete I correct entries shall be made of all transactions relating thereto, as provided by Article 1113, V.A.T,C.S. or other applicable b The Holders of any Bonds or any duly authorized agent or agents of such Holders shall have the right at all reasonable tima inspect such records, accounts and data relating thereto, and to inspect the System and all properties comprising same. The ( further agrees that following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made b independent finn of Certified Public Accountants. Each such audit, in addition to whatever other matters may be thought propð' the accountant, shall particularly include the following: (1) A statement of the income and expenses of the System for such Fiscal Year. (2) A balance sheet for the System as of the end of such Fiscal Year. (3) A statement describing the sources and application of funds of the System for such Fiscal Year. 24 (4) The Accountant's comments regarding the manner in which the City has carried out the requirements of this Ordinance and any other ordinance authorizing the issuance of Additional Bonds and his recommendations for any changes or improvements in the operations, records and accounts of the System. Expenses incurred in making an annual audit of the operations of the System are to be regarded as Operating and Maintenance Expenses. Copies of each annual audit shall be furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and, upon request, to the initial purchasers of the Bonds and subsequent 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, SECTION 25: Special Covenants, The City further covenants and agrees by and through this Ordinance as follows: (1) It has the lawful power to pledge the Net Revenues of the System to the payment of the Bonds to the extent provided herein and has lawfully exercised said power under the Constitution and laws of the State of Texas, and that the Bonds issued hereunder, together with the Additional Bonds, shall be ratably secured in such manner that no one bond shall have preference over any other bond of said issues. (2) The Net Revenues of the System have not been in any manner pledged or encumbered to the payment of any debt or obligation of the City or the System, save and except for the Bonds. (3) No free services of the System shall be allowed, and should the City or any of its agents or instrumentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System, (4) To the extent that it legally may and so long as any of the Bonds are Outstanding, no franchise shall be granted for the installation or operation of any waterworks or sewer system other than those owned by the City, and the operation of any such system by anyone other than this City is hereby prohibited, (5) The City will comply with all of the terms and conditions of any and all franchises, permits and authorizations applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City has or will obtain and keep in full force and effect all franchises, permits, authorizations and other requirements applicable to or necessary with respect to the acquisition, construction, equipment, operation and maintenance of the System, SECTION 26: Remedv in Event of Default. In addition to all rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in payments to be made to the Interest and Sinking Fund or the Reserve Fund as required by this Ordinance or (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the City and its officers to observe and perfonn any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedy herein provided shall be cumulative of all other existing remedies and the specification of such remedy shall not be deemed to be exclusive, SECTION 27: Special Obligations, The Bonds are special obligations of the City payable from the pledged Net Revenues of the System and the Holders thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. SECTION 28: Satisfaction of Obligation of Citv. If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the Net Revenues of the System under this Ordinance and all other obligations of the City to the Holders shall thereupon cease, terminate, and become void and be discharged and satisfied, Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying AgentlRegistrar, or an authorized escrow agent, or (ii) Government Obligations shall have been irrevocably deposited in trust with the Paying Agenú Registrar, or an authorized escrow agent, which Government Obligations have been certified by an independent accounting finn to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying AgentlRegistrar have been made) the redemption date thereof, The City 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, 25 Any moneys so deposited with the Paying AgentJ Registrar, or an authorized escrow agent, and all income from Gove Obligations held in trust by the Paying AgentlRegistrar or an authorized escrow agent, pursuant to this Section which is not fI for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have 1 deposited shall be remitted to the City or deposited as directed by the City, Furthennore, any money held by the AgentlRegistrar for the payment of the principal of and interest on the Bonds and remair.ing unclaimed for a period of four (/ after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pa upon the request of the City, be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoi remittance of funds from the Paying AgentlRegistrar to the City shall be subject to any applicable unclaimed property law State of Texas, SECTION 29: Ordinance a Contract _ Amendments. This Ordinance shall constitute a contract with the Holders from time be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding e: pennitted in this Section. The City, may, without the consent of or notice to any Holders, from time to time and at any time this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsist fonnal defect or omission herein. In addition, the City may, with the written consent from the owners holding a majority in a: principal amount of the Bonds Similarly Secured then Outstanding affected thereby, amend, add to, or rescind any of the pr of this Ordinance; provided that, without the written consent of all Holders of Outstanding Bonds, no such amendment, add rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, re principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other] (3) reduce the aggregate principal amount of Bonds or Bonds Similarly Secured, as the case may be, required to be held for CI any such amendment, addition, or rescission. SECTION 30: Mutilated _ Destroved - Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost ( the Paying AgentlRegistrar may execute and deliver a replacement Bond of like fonn and tenor, and in the same denomin¡ bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu ( substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Hold( with the Paying AgentJ Registrar of evidence satisfactory to the Paying AgentJ Registrar of the destruction, loss or theft of su and of the authenticity of the ownership thereof and (ii) the fumishing to the Paying AgentlRegistrar of indemnification in a satisfactory to hold the City and the Paying AgentlRegistrar harmless, All expenses and charges associated with such inder with the preparation, execution and delivery of a replacement Bond shall be bome by the Holder of the Bond mutilated, or e lost or stolen, Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a rei of the prior obligation of the City, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enfor anyone, and shall be entitled to all the benefits ofthis Ordinance equally and ratably with all other Outstanding Bonds, The provisions ofthis Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with res¡ replacement and payment of mutilated, destroyed, lost, or stolen Bonds, SECTION 31: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such noti( sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first cia! prepaid, to the address of each Holder as it appears in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds, Where this Ordinance pi notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either befe the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers oj Holders shall be filed with the Paying AgentlRegistrar, but such filing shall not be a condition precedent to the validity of taken in reliance upon such waiver. SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to AgentlRegistrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Ager and, if not already cancelled, shall be promptly cancelled by the Paying AgentlRegistrar. The City may at any time del Paying AgentlRegistrar for cancellation any Bonds previously certified or registered and delivered which the City may ha' in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying AgentlRegistrar. Al Bonds held by the Paying AgentlRegistrar shall be destroyed as directed by the City. 26 SECTION 46: Continuing Disclosure Undertaking. (a) meanings ascribed to such terms below: Definitions, As used in this Section, the following terms have the "MSRB" means the Municipal Securities Rulemaking Board, "NRMSIR" means each person whom the SEC or its staff has detennined to be a nationally recognized municipal securities infonnation repository within the meaning of the Rule from time to time, "Rule" means SEC Rule I5c2-I2, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and detennined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time, (b) Annual Reports, The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 1996) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 34 of this Ordinance, being the information described in Exhibit D hereto, Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit D hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial infonnation and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial infonnation and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1, Principal and interest payment delinquencies; 2, Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5, Substitution of credit or liquidity providers, or their failure to perfonn; 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, 27 F The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to p, financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section, I t (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the co~ specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds wi ,; meaning of the Rnle. exœpt that the City in ony event will give the nnti", required by ..b_nn (e) hereof of "'r".,. calls and defeasance that cause the City to be no longer such an "obligated person." . ~ The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this S, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person, TIIi undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly a~,."..,'..,....,' provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or mate' .. complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information p :. in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any represen ': warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date, ! t' ¡ UNDER NO CIRCUMSTANCES SHALL TIlE CITY BE LIABLE TO TIlE HOLDER OR BENEFICIAL OWNER OFt, BOND OR ANY OTIlER PERSON, IN CONlRACf OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN. FROM ANY BREACH BY THE CITY, WHETIlER NEGLIGENT OR WITIlOUT FAULT ON ITS PART, OFf COVENANT SPECIFIED IN TIllS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSOI(¡ CONTRACf OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMI1ED TO AN ACTIONf MANDAMUS OR SPECIFIC PERFORMANCE, ~ (: tl o No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default u~ Ordinance for purposes of any other provision of this Ordinance, Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal J securities laws, ' The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting' change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but, (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the ~ offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the& such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal aI (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Ou~ Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond ~ determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bond1Ì provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the am provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the ex~ reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from læ purchasing or selling Bonds in such offering, If the City so amends the provisions of this Section, it shall include with any ~ financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an expl~ narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or opl data so provided. 28 TAX MATTERS TAX EXEMPTION . . . The deli very 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 B. 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 (REIT), or a real estate mortgage investment conduit (REMIC). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by Section 55 of the Code and the environmental tax imposed by Section 59 A of the Code will be computed. In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the City 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 City with the provisions of the Ordinance subsequent to the issuance of the Bonds, The Ordinance contains covenants by the City 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, 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, 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, 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, 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 and the environmental tax imposed by Sections 55 and 59A, respectively, 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 C" earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for 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. 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, 29 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 mày be deemed to be received in the year of accrual even though there will 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 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. 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 Ordinance, the City has made the following agreement for the benefit of the holders and beneficial owners of the Bonds, The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds, Ùnder the agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified material events, to certain information vendors. This information will be available to securities brokers and others who subscribe to receive the inf01mation from the vendors, ANNUAL REpORTS . . . The City will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in this Official Statement under Tables numbered 1 through 12 and in Appendix B, The City will update and provide this information within 6 months after the end of each fiscal year ending in or after 1996. The City will provide the updated information to each nationally recognized municipal securities information repository ("NRMSIR") and to any state information depository ("SID") that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States Securities and Exchange Commission (the "SEC"), The City may provide updated information in full text or may incorporate by reference certain other publicly availablf documents, as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements, if the Ci~ commissions an audit and it is completed by the required time. If audited financial statements are not available by the requir~ time, the City will provide audited financial statements when and if the audit report becomes available. Any such financii statements will be prepared in accordance with the accounting pñnciples described in Appendix B or such other accountin¡ principles as the City may be required to employ from time to time pursuant to state law or regulation. The City's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each yem unless the City changes its fiscal year. If the City changes its fiscal year, it will notify each NRMSIR and the SID of the change, The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street. p, O. Box 2177. Austin, Texas 78761 2177, and its telephone numberis 512/476-6947. MATERIAL EVENT NOTICES. . . The City will also provide timely notices of certain events to certain information vendors, 11 City will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision, purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unschedull draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting finane difficulties; (5) substitution of credit or liquidity providers. or their failure to perform; (6) adverse tax opinions or ever affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasanel (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes, (Neither the Bondsn the Ordinance make any provision for debt service reserves, credit enhancement, or early redemption.) In addition, the City~ provide timely notice of any failure by the City to provide information, data, or financial statements in accordance with agreement described above under "Annual Reports." The City will provide each notice described in this paragraph to the~' and to either each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB"). AVAILABILITY OF INFORM A TION FROM NRMSIRs AND SID , , , The City has agreed to provide the foregoing information ij to NRMSIRs and the SID, The information will be available to holders of Bonds only if the holders comply with the procedu and pay the charges established by such information vendors or obtain the information through securities brokers who do so, 30 LIMITATIONS AND AMENDMENTS. , . The City has agreed to update information and to provide notices of material events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above, The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date, The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the City to comply with its agreement. The City may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. If the City so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS, . . The City has not previously failed to comply with its previous continuing disclosure agreements in accordance with Rule 15c2-12. OTHER INFORMATION RATINGS The outstanding revenue debt prior to this refunding has been rated "Aaa" by Moody's and "AAA" by S&P on the basis of the municipal bond insurance policy issued by AMBAC Indemnity Corporation with respect to the Bonds, Applications for contract ratings on this issue have been made to Moody's and S&P. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective view of such organization and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. LITIGATION It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material adverse financial impact upon the City or its operations, REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities ACt of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred, This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SEClIRE PuBLIC FuNDS IN TEXAS Section 9 of the Bond Procedures Act provides that the Bonds "shall constitute negotiable instruments, and are investment securities governed by Chapter 8, Texas Uniform Commercial Code, notwithstanding any provisions of law or court decision to the contrary, and are legal and authorized investments for banks, savings banks, trust companies, building and loan associations, savings and loan associations, insurance companies, fiduciaries, and trustees, and for the sinking fund of cities, towns, villages, school districts, and other political subdivisions or public agencies of the State of Texas", The Bonds are eligible to secure deposits of any public funds of the state, its agencies and political subdivisions, and are legal security for those deposits to the extent of their market value, For political subdivisions in Texas which have adopted investment policies and guidelines in accordance with the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), the Bonds may have to be assigned a rating of "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible investments for sinking funds and other public funds. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. 31 I LEGAL OPINIONS The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect that the Bonds are valid and legally binding special obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. 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"), "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 Ordinance. 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, FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. VERIFICATION OF ARI1'HMETICAL AND MATHEMATICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of the City relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the forecasted payments of principal and interest to redeem the Refunded Bonds and (b) computation of the yields of the Refunding Bonds and the restricted Federal Securities were verified by KPMG Peat Marwick, certified public accountants. Such computations were based solely on assumptions and information supplied by First Southwest Company on behalf of the City. KPMG Peat Marwick has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the City will furnish a certificate, executed by proper officers, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendment thereto, on the date of such Official Statement, on the date of sale of said Bonds and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the lasl audited financial statements of the City. The Ordinance authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and an~ addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Purchaser. TOMMY BROWN Mayor City of North Richland Hills, Texa ATfEST: PATRICIA HlITSON City Secretary 32 SCHEDULE OF DEFEASED BONDS Schedule I Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989 Original Dated Date 3-1-1989 Original Maturitv 9-1-1997 9-1-1998 9-1-1999 9-1-2000 9-1-2001 Interest Rates 7,250% 7.250% 7.375% 7.375% 7.375% Maturity Amount $690,000 740,000 795,000 855,000 915,000 The maturities will be redeemed on September I, 1999 at par. Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A Original Dated Date 3-1-1989 Original Maturitv 9-1-1997 9-1-1998 9-1-1999 9-1-2000 9-1-2001 Interest Rates 7.250% 7.250% 7.375% 7,375% 7.375% Maturity Amount $300,000 325,000 345,000 370,000 400,000 The maturities will be redeemed on September I, 1999 at par, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B Original Dated Date 7-1-1989 7-18-89* Original Maturitv 9-1-1997 9-1-1998 9-1-1999 9-1-2000 9-1-2001 9-1-2002 Interest Rates 6,800% 6.900% 6.900% 6,900% 6,900% 0.00% Maturity Amount $475,000 510,000 545,000 580,000 620,000 355,000 The maturities will be redeemed on September I, 1999 at par, *This Capital Appreciation Bond will be redeemed on March I, 1997. TIllS PAGE LEFT BLANK INTENTIONALLY SCHEDULE OF REFUNDED BONDS Schedule n Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989 CAPITAL APPRECIATION BONDS Original Dated Date 4-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0,00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Maturity Amount $985,000 985,000 520,000 395,000 395,000 395,000 395,000 The maturities will be redeemed on March 1, 1997. Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-A CAPITAL APPRECIATION BONDS Original Dated Date 4-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0.00% 0.00% 0.00% 0,00% 0.00% 0.00% 0,00% Maturity Amount $425,000 425,000 220,000 165,000 165,000 165,000 165,000 The maturities will be redeemed on March 1, 1997, Waterworks and Sewer System ReCunding Revenue Bonds, Series 1989-B CAPITAL APPRECIATION BONDS Original Dated Date 7-18-89 Original Maturitv 9-1-2002 9-1-2003 9-1-2004 9-1-2005 9-1-2006 9-1-2007 9-1-2008 Interest Rates 0,00% 0,00% 0,00% 0.00% O.QO% 0.00% 0.00% Maturity Amount $310,000 665,000 400,000 370,000 380,000 270,000 270,000 The maturities will be redeemed on March 1, 1997. TIllS PAGE LEFT BLANK INTENTIONALLY APPENDIX A GENERAL INFORMATION REGARDING THE CITY . Amarillo NORTH RICHLAND HILLS rI . Fort Worth Dallas * Austin . San Antonio THIS PAGE LEFT BLANK INTENTIONALLY LoCATION AND HISTORY, . . The City of North Richland Hills is located in northeast Tarrant County, encompassing approximately 18.29 square miles with 460 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: Year 1953 1960 1970 1980 1981 1982 1983 1984 1985 1986 PODulation 500 8,662 16,514 30,592 31,250 31,850 33,100 35,550 36,500 40,650 Source (1) (2) (2) (2) (3) (3) (3) (3) (3) (3) Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 (1) City Staff Estimate. (2) U.S. Census Bureau. (3) North Central Texas Council of Governments. (4) Revised U.S, Census Bureau total. PODulation 42,050 44,900 45,700 45,895 46,655 47,650 48,300 49,631 50,386 50,650 Source (3) (3) (3) (3) (4) (3) (3) (1) (1) (1) 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 50,650, more than triple the in excess population of 1970. North Richland Hills is the third largest city in Tarrant County. The citizens of the City, with a median age of 31.5, enjoy the small town atmosphere while sharing the many amenities of the Fort W orth/Dallas Metroplex. ECONOMICS, , . The City's location in the middle of the Fort Worth/Dallas Metroplex provides access to approximately 4 million people - the sixth largest market in the United States. North Richland Hills' proximity to the D/FW 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: · The local unemployment rate has remained more than two points below state figures and almost two points below U.S. rates, since January 1993. Over the same period, North Richland Hills unemployment rate has stayed from between I and 1-1/2% points below figures for the entire Fort Worth/Arlington Metropolitan Statistical Area. · North Richland Hills' 1995/96 sales tax revenue exceeded prior year revenues by 4,21 %. The City has enjoyed annual increases in sales tax. revenue since the early 1980's, · The City recorded permits for construction of new retail, office, service, medical, entertainment, warehouse, and institutional space valued at approximately $15.3 million in the first ten months of the 1996 calendar year. North Richland Hills also witnessed the absorption, expansion and/or renovation of existing commercial/institutional space with an estimated value of almost $10 million. A-I North Richland Hill's new status as a "triple Freeport" City (i.e" one with the Freeport exemption available through Tarrant County, the City, and the Birdville Independent School District on qualified in-transit inventories) will benefit manufacturers such as Tecnol and encourage their expansion. In addition, such an incentive enhances North Richland Hills' chances of landing new manufacturing and distribution facilities. With approximately 30% of the City remaining undeveloped, North Richland Hills 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. · 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 Tecnol 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 53,000 rounds of golf in 1996. 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 67 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. One privately owned and fully operational hospital is located within the City limits, while two nonprofit hospitals are located in nearby communities. These hospitals offer residents excellent health care, The City has a full service central library housing in excess of 93,000 volumes with a circulation of 362,000, With over 388 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. EDUCATION... Education for the citizens 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: 2 high schools I 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 37% of the teachers in the District hold advanced degrees. The District employs approximately 2,355 total staff as follows: Certified Professionals Others 1,490 865 Teacher salaries in the District are as follows: DeIU'ee Level Baccalaureate Masters Minimum SalarY $24,560 $26,500 Maximum SalarY $40,950 $43,750 A- 2 Selected historical enrollment figures in the District are as follows: Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 (1) As of October 30, 1995, Source: Birdville Independent School District. Enrollment 15,499 15,376 15,182 15,478 15,490 15,588 16,059 17,039 17,200 Year 1989 1990 1991 1992 1993 1994 1995 1996 Enrollment 17,529 18,505 19,100 19,358 18,929 19,039 20,098 20,454 (I) Education beyond the high school level is readily available. The Northeast campus of the Tarrant County Junior College District 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. Being just 7.5 miles from the Dallas/Fort 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 El Paso and east to Tyler and Shreveport), and Interstate 30 (east to Texarkana, Uttle 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 (1) Median Income Per Household,.........................,.."......,..,.., .$43,094 Median Age of Population,. "" "..,.., "......... ,......... ......... .,..,."" 31.5 (1) Based on Bureau of Census, Department of Commerce, MAJOR EMPLOYERS IN THE CITY Employer Tecnol Medical Products, Inc. Birdville Independent School District PLF Ufe Insurance Co. Columbia North Hills Hospital City of North Richland Hills Wal-Mart TCJC-N.E. Campus· H&M Food Systems. Inc. Bates Container Corporation Foley's Department Stores Product Disposable Medical and Hospital Supplies School District Insurance Medical Care Municipality Retail Sales Higher education Food Processor Corrugated Containers Department Store Estimated Number of Employees 1,129 875 875 615 460 400 340 250 220 200 · Split with Hurst. Source: North Central Texas Council of Governments, Local Media, City of North Richland Hills. A-3 BUILDING PERMIT INFORMATION Fiscal Year 1992 1993 1994 1995 1996 Source: City Records. Construction Commercial Number of Units 14 21 110 128 28 Value $ 13,326,554 13,579,157 21,895,675 25,106,505 17,264,000 Residential Number of Units 281 420 434 268 269 A-4 Value $ 29,803,814 48,727,412 50,319,939 31,739,218 33,259,451 Total Units 295 441 544 396 297 Total Value $ 43,130,368 62,306,569 72,215,614 56,845,723 50,523,451 ¡", "'< APPENDIX B EXCERPTS FROM THE CITY OF NORTH RICHLAND HILLS, 1EXAS ANNUAL FINANCIAL REPORT For the Year Ended September 30, 1995 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 30,1995, and is not intended to be a complete statement of the City's financial condition, Reference is made to the complete Report for further infonnation. -, TIllS PAGE LEFT BLANK INTENTIONALLY Certificate of Achievement for Excellence in Financial Reporting Presented to City of North Richland Hills, Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 1994 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. b- ~---Q j President jJfh-/~ Executive Director XXVI -, KPMGiPeat Marwick LLP 2500 City Center Tower II 301 Commerce Street Fort Worth. TX 76102 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 Hills, Texas, as of and for the year ended September 30, 1995, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City of North Richland Hills, Texas' management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accprdance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance aboul whether the general purpose financial statements are free of material misstatement. An audil 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 principle! used and significant estimates made by management, as well as evaluating the overall genera: purpose financial statement presentation. We believe that our audit provides a reasonable basi! for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in al material respects, the financial position of the City of North Richland Hills, Texas, as 01 September 30, 1995, and the results of its operations and the cash flows of its proprietary fune types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report date( December 21, 1995 on our consideration of City of North Richland Hills, Texas' internal contro structure and a report dated December 21, 1995 on its compliance with laws and regulations. Our audit was made for the purpose of forming an opinion on the 1995 general purpose financia statements taken as a whole. The combining and individual fund and account group finanCÌa statements and schedules listed in the table of contents are presented for purposes of additiona analysis and are not a required part of the general purpose financial statements of the City 0 North Richland Hills, Texas. Such information has been subjected to the auditing procedure applied in the audit of the general purpose financial statements and, in our opinion, is fairl: presented in all material respects in relation to the general purpose financial statements taken as whole. The supplemental information as listed under the statistical section in the table of contents ha been summarized from the City's records and was not subjected to the auditing procedures tha were applied to the general purpose financial statements. Accordingly, we express no opinion 01 such information. KPMv fµJ 711~ J,L.fJ December 21, 1995 1 Member Firm of Klynvetd Peat Marwick Goerdeler \ I (This page left blank intentionally) 2 ~ CITY OF NORTH RICHLAND HILLS, TEXAS Combined Balance Sheet - All Fund Types and Account Groups September 30, 1995 with comparative totals for September 30, 1994 Governmental Fund Types Special Debt Capital General Revenue Service Projects Assets and Other Debits Fund Funds Funds Funds Deposits and investments, at cost (note 2) $ 2,804,240 2,247,989 2,387,710 14,289, 184 Investments, at market (notes 2 and 12) Receivables (net, where applicable, of allowances for estimated uncollectible amounts of $224,619): Accounts 135,303 184,330 Property taxes (note 3) 251,724 Other taxes 1, 246, 583 849,868 Accrued interest 34,293 2,849 139,073 Special assessments (note 4) 831,814' Intergovernmental Other 191,861 Prepaid expenses Due from other funds (note 14) 41 , 983 Inventories, at cost Restricted assets: Deposits and investments, at cost (note 2) Property, plant and equipment (net, where applicable, of accumulated depreciation) (note 5) Other assets (net where applicable, of accumulated amortization) Advances to other funds (note 14) 375,248 Amount available in debt service fund Amount to be provided for retirement of general long-term debt Total assets and other debits $ 4,911,639 3,267,453 2,390,559 15,444,401 3 Exhibit 1 Fiduciary Proprietary Fund Types Fund Type IntemaJ Enterprise Service Agency Funds Funds Fund Account Groups GeneraJ GeneraJ Fixed Long-tenn Assets I>ebt TotaJs (Memorandum Only) ~ ~ 24,779,577 25,456,959 2,552,444 2, 143, 721 ' 994,669 2,055,785 2,552,444 2,652,898 17,116 2,989,647 3,035,205 251,724 281,434 2,096,451 1, 686, 422 8,315 3,654 188,184 95,452 831,814 691,917 460,076 460,076 191,861 110, 849 25,319 31,800 57, 119 233,800 15,925 57,908 33,371 236,957 47,210 284, 167 338,773 8, 142, 156 8,142,156 7,968,609 65,092,633 1,593,643 84,280,723 150,966,999 133,513,783 228,961 228,961 276,424 480,679 855,927 893,043 2,328,884 2,328,884 2, 103,386 51,956,101 51, 956, 101 47,117, 121 78,338,588 3,749,208 2,552,444 84,280,723 54,284,985 249,220,000 225,980,269 (Continued) 4 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Balance Sheet - All Fund Types and Account Groups, Continued Governmental Fund Types Special Debt Capita! General Revenue Service Project: Liabilities Fund Funds Funds Funds Bank overdraft $ 271,709 73,1' Accounts payable 173,410 71 , 231 196,21 Accrued liabilities (notes 1(1),7 and 11) 725,578 27,493 61,675 93,7 Retainage payable 388,0 Deposits and other liabilities 114,958 10,912 Due to other funds (note 14) 18,744 Payable from restricted assets: Accrued interest payable Current portion of revenue bonds, golf course obligations and contractual obligation payable (note 7) Accounts payable Retainage payable Customers'deposits Developers' deposits Golf course obligations (note 7) Discount on golf course obligations General obligation bonds payable (note 7) Sales tax revenue bonds (note 7) Certificates of obligation (note 7) Note payable (note 7) Contractual obligation payable (note 7) Revenue bonds payable (note 7) Discount on t:evenue bonds payable Deferred revenue (notes 3 and 4) 277,210 735, Deferred compensation payable (note 12) Advances from other funds (note 14) Total liabilities 1, 291, 156 400,089 61, 675 1,487 5 Exhibit 1. Continued Fiduciary Proprietary Fund Types Fund Type Account Groups Internal General General Totals Enterprise Service Agency Fixed Long-term (Memorandum Only) Funds Funds Fund Assets I&b! .l.225. 1994 710,613 58,853 1, 114,349 370,380 1,462, 790 73,429 1,977,156 2,587,172 424,863 654, 194 556,823 2,544,400 2,018,824 388,082 29,055 2,524 128,394 540,449 39, 164 57,908 33,371 85,596 85,596 101, 152 334, 167 334, 167 142,083 80,671 80,671 32,890 2,672 2,672 1,321,995 1,321,995 1,258,032 9,056 9,056 8,037 4,685,000 4,685,000 4,870,000 (73,788) (73,788) (78,400) 38,772,416 38,772,416 35,099,119 12,880,000 12,880,000 11,185,000 1, 600, 000 1,600,000 1,850,000 475,746 475,746 560,840 110,000 110,000 145,000 14,257,348 14,257,348 15,228,475 (194, 134) (194, 134) (208,527) 1,012,884 1 , 007, 456 2,552,444 2,552,444 2,143,721 855,927 855.927 893,043 24,114.464 786.476 2.552.444 54.284.985 84.978,289 79,817.172 (Continued) 6 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Balance Sheet - All Fund Types and Account Groups, Continued Governmental Fund Types Special Debt Capita General Revenue Service Project Equity and Other Credits Fund Funds Funds Funds Contributed capital (note 10) $ Investment in general fixed assets Retained earnings: Reserved, principally for revenue bond principal and interest Unreserved Fund balances: Reserved for encumbrances 88,998 577, 137 7,169, Reserved for debt service 2,328,884 Reserved for advances to other funds 375,248 Unreserved: Designated for capital improvements 1, 696, 897 6,787, Unreserved ~ undesignated 3,156,237 593,330 Total retained earnings/ fund balances 3,620,483 2,867,364 2,328,884 13,957, Total equity and other credits 3,620,483 2,867,364 2,328,884 13,957, Commitments and contingent liabilities (notes 5, 6, 7,8,9, and 11) Total liabilities, equity and other credits $ 4,911,639 3,267,453 2,390,559 15,444, See accompanying notes to general purpose financial statements. " 7 Exhibit 1. Continued Fiduciary Propriety Fund Types Fund Type Account Groups Internal General General Totals Enterprise Service Agency Fixed Long-term (Memorandum Only) Funds Funds Fund Assets Debt 1995 1994 33,731,479 1 , 391 , 462 35,122,941 23,841,552 84,280,723 84,280,723 79,324,045 2,464,853 2,464,853 2, 510, 236 18,027,792 1 , 571 , 270 19,599,062 17,415,172 7,835,892 9,064,995 2,328,884 2, 103,386 375,248 400,268 8,484,541 8,062,522 3,749,567 3,440,921 20,492,645 1 , 571 , 270 44,838,047 42,997,500 54,224,124 2,962,732 84,280,723 164,241,711 146,163,097 78,338,588 3,749,208 2,552,444 84,280,723 54,284,985 249,220,000 225,980,269 8 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Revenues: Taxes (notes 1(0) and 3) Licenses and permits Charges for services (note 1(0» Fines Contributions Special assessments (note 4) Interest income Intergovernmental Drainage fees Proceeds from forfeiture of contraband Miscellaneous Total revenues Expenditures: Current: General government Public safety Culture and recreation Public works Capital outlay (note 1(0» Debt service: Retirement of general long-term debt (note 7) Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Proceeds from bonds (note 7) Gain on sale of fixed assets Operating transfers in Operating transfers out Total other financing sources (uses) - net Excess (deficiency) of revenues and other sources over expenditures and other uses Fund balances at beginning of year Fund balances at end of year General Fund $ 14,395,000 724,870 2,077,013 747,463 241,393 171, 533 18,357,272 4,413,618 9,160,080 1,986,904 1,928, 183 17,488,785 868,487 291,540 (964,327) (672,787) 195,700 3,424,783 $ 3,620,483 See accompanying notes to general purpose financial statements. 9 Special Revenue Funds 3,543,044 146,557 416,823 838,360 656,993 121,007 200 5,722,984 523,609 793,387 9,411,753 10,728,749 (5,005,765) 2,000,000 2,512 (2,172,493) (169,981) (5, 175,746) 8,043, 110 2,867,364 Exhibit 2 Debt Capital Totals Service Projects (Memorandum Only) Funds Funds 1m ~ 4,200,000 22, 138,044 20,008,305 724,870 887,968 2,077,013 2,428,672 747,463 775,510 146,557 145,835 655, 142 655, 142 249,976 65, 711 665,019 1,388,946 954,348 838,360 336,246 656,993 659,955 121,007 108,374 45,694 217,427 197,338 4,265,711 1,365,855 29,711,822 26,752,527 4,413,618 4,288,662 9,683,689 8,600,184 2,780,291 2,867,228 1,928, 183 1,623,534 4,235,560 13,647,313 7,412,075 3,329,485 3,329,485 3,062,513 2,776,259 2,776,259 2,755,501 6,105.744 4,235.560 38,558.838 30,609,697 (1.840.033 ) (2,869.705) (8,847,016) (3,857,170) 6,000,000 8,000,000 3,895,000 29,397 29,397 2,065,531 1,397,604 3,757,187 4,798,317 (100, 708) (3,237,528) (3.754,820) 2,065,531 7,326.293 8.549.056 4.938,497 225.498 4.456,588 (297.960) 1,081,327 2. 103.386 9.500.813 23.072.092 21,990,765 2,328,884 13.957,401 22,774,132 23.072,092 10 CITY 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 Year ended September 30, 1995 Revenues: Taxes Licenses and permits Charges for services Drainage fees Fines Contributions Interest income Intergovernmental Miscellaneous Total revenues Expenditures: Current: General government Public safety Culture and recreation Public works Debt service: Retirement of general long-term debt Interest and fiscal agent charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating'transfers in Operating transfers out Total other financing sources (uses) - net Excess (deficiency) of revenues and other sources over expenditures and other uses Budget $ 14,034, 187 764,287 2,025,794 808,890 190,000 161. 279 17,984,437 4,464,515 9,329,834 2,051,594 2,050,637 17,896,580 87,857 270,000 (942,857) (672,857) $ (585,000) Fund balances at beginning of year Fund balances at end of year See accompanying notes to general purpose financial statements. 11 General Fund Actual 14,395,000 724,870 2,077,013 747,463 241,393 171. 533 18,357,272 4,413,618 9,160,080 1,986,904 1,928,183 17.488,785 868,487 291,540 (964,327) (672,787) 195,700 3.424,783 $ 3,620,483 Variance - Favorable {Unfavorabl( 360,813 (39,417: 51,219 (61,427 51,393 10,254 372.835 50, 89~ 169,75' 64,69( 122,45, 407,79 780,63 21, 5~ (21,4~ 780,71 Exhibit 3 Special Revenue Funds Debt Service Funds Variance - Variance - Actual Favorable Favorable Budf:et (note Hd)) (Unfavorable ) Budf:et Actual (Unfavorable ) 213,131 258, 166 45,035 4,200,000 4,200,000 642, 000 656,993 14,993 182,439 146,557 (35,882) 4,310 11 , 687 7,377 44, 000 65,711 21,711 1,041,880 1,073,403 31, 523 4,244,000 4,265,711 21, 711 398,613 320,439 78, 174 3,329,485 3,329,485 3.060.097 2,776.259 283.838 398.613 320.439 78,174 6,389,582 6. 105. 744 283.838 643,267 752,964 109,697 (2,145,582) (1,840,033) 305,549 2,114,395 2,065,531 (48,864) (734.814) (771, 522) (36.708) (734.814) (771,522) (36.708) 2. 114,395 2,065.531 (48.864) (91,547) (18,558) 72,989 (31, 187) 225,498 256,685 412. 107 2, 103.386 393.549 2,328.884 12 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Enterprise Funds Operating revenues: Water and sewer service Water and sewer connections Sewer transportation Service charges Inspection fees Golf course fees and charges Assessment revenue Insurance premiums (notes 1 (0) and 11) Maintenance services (note 1(0)) Aquatic park admissions Recreation equipment rental Food, beverage and gifts Sponsorships Other income Total operating revenues Operating expenses: Contractual services (note 9) Personal services Cost of golf course sales and services Repairs and maintenance Supplies Depreciation Franchise fees (note 1(0)) Payments in lieu oftaxes (note 1(0)) Administration fees (note 1(0) and 11) Claims (note 11) Total operating expenses $ 17,690,846 316,370 8,026 485, 120 33,675 2, 177,067 22,881 1,259,484 151,358 320, 190 20,750 16,049 22,501,816 9,066,359 3,031,342 1,269,706 939, 192 897,477 1,660,197 411 , 206 255,819 1,296,860 18,828,158 3,673,658 Operating income Nonoperating revenues (expenses): Interest income (note 14) Interest expense and fiscal agent charges (note 14) Gain (loss) on disposal of fixed assets Total nonoperating revenues (expenses) - net Income before operating transfers Operating transfers in Operating transfers out Total operating transfers Net income Retained earnings at beginning of year Retained earnings at end of year 522,821 (1,495,696) (293,748) (1,266,623 ) 2,407,035 67,700 (652,249) (584,549) 1,822,486 18,670,159 $ 20,492,645 See accompanying notes to general purpose financial statements. 13 Intema Servic~ Funds 2,590,8 2,144,2 4,735,1 387,2 810,7 157,3 323,7 289,8 2,646,3 4,615,2 119,9 129,3 1,8 131,21 251, 1 214,8' (150,0 64,8' 316,0 1,255,2· 1 , 571, 2' Totals (Memorandum Only) 1995 ~ 17,690,846 316,370 8,026 485,120 33,675 2,177,067 22,881 2,590,898 2,144,280 1,259,484 151 , 358 320,190 20,750 16,049 27,236,994 9,453,569 3,842,066 1,269,706 1, 096, 579 1,221,255 1,950,046 411,206 255,819 1, 296, 860 2,646,304 23,443,410 3,793,584 652,210 (1,495,696) (291,932) (1, 135,418) 2,658,166 282,590 (802,249) (519,659) 2, 138,507 19,925,408 22,063,915 17,214,168 443,208 15,881 281,635 43,910 2,008,893 25,005 2,513,116 1, 990, 874 24,536,690 9,162,202 3,120,473 1,267,261 965,985 946,492 1,576,421 396,997 229,950 1,251,770 2,598,909 , 21,516,460 3,020,230 350,519 (1,493,089) 20,942 (1, 121, 628) 1,898,602 (1,243,157) (1,243,157) 655,445 19,269,963 19,925,408 Exhibit 4 14 CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Cash Flows - All Proprietary Fund Types Year ended September 30, 1995 with comparative totals for year ended September 30, 1994 Internal Totals Enterprise Service (Memorandum Only) Funds Funds 1995 1994 Operating income $ 3,673,658 119,926 3,793,584 2,820,570 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,660, 197 289,849 1,950,046 1,576,421 Amortization 16,011 16,011 16,011 Gain on disposal of fixed assets (293,748) (293,748) Change in assets and liabilities: (Increase) decrease in accounts receivable (510,508) 12,607 ( 497, 901 ) (72,684 ) Decrease in inventories 54,419 187 54,606 21 180 (Increase) decrease in prepaid expenses 176,681 176,681 (49,303) (Increase) decrease in other assets 36,064 36,064 (16,802) Increase (decrease) in accounts payable (80) (2,740) (2,820) 149,822 Increase in accrued liabilities 173,371 107,596 280,967 27,288 Increase (decrease) in other current liabilities (23,881) (23,881) 21,499 Increase in customers' deposits 63,963 63,963 65, 183 Total adjustments 1,352,489 407,499 1,759,988 1,738,615 Net cash provided by operating activities 5,026,147 527,425 5,553,572 4,559,185 Cash flows from noncapital financing activities: Increase (decrease) in bank overdraft 600,925 16,391 617,316 (734,919) Operating transfers (to) from other funds (584,549) 64,890 (519,659) (1,043,497) Net cash (used for) provided by noncapital financing activities 16,376 81,281 97,657 (1,778,416) (Continued) 15 Exhibit 5. Continued CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Cash Flows - All Proprietary Fund Types, Continued Internal Totals Enterprise Service (Memorandum Only) Funds Funds 1995 1994 Cash flows from capital and related financing activities: Acquisition and construction of capital assets $(3,680,900) (671,425) (4,352,325) (2,773,899) Capital grant received 1,176,131 1,176,131 Payments made refunding of developers' deposits 1,019 1,019 (8,268) Principal paid on amounts due to and advances from other funds (31,323) (31,323) (33,371 ) Principal paid on revenue obligations and note payable (1,320,000) (1,320,000) (1,205,970) Proceeds from contractual obligations 180,000 Interest paid on revenue and golf course obligations and note payable (1, 175,902) (1,175,902) (1,255,247) Receipts from collections of amounts due from other funds and advances to other funds 7,930 7,930 11, 760 Proceeds from sale of capital assets 12,815 12,815 91,409 Net cash used for capital and related financing activities (5,023,045) (658,610) (5,681,655) (4,993,586) Cash flows from investing activities - interest on investments 514,506 125,735 640,241 350,519 Net increase (decrease) in cash and cash equivalents 533,984 75,831 609,815 (1, 862, 298) Cash and cash equivalents at beginning of year 8,602,841 1,979,954 10,582,795 12,445,093 Cash and cash equivalents at end of year $ 9, 136,825 2,055,785 11, 192,610 10,582,795 (Continued) 16 Exhibit 5. Continue< CITY OF NORTH RICHLAND HILLS, TEXAS Combined Statement of Cash Flows - All Proprietary Fund Types, Continued Noncash capital and related financing activities: During 1995, bond discount amortization on revenue bonds totalled $335,350 ($320,957 imputel interest on zero coupon bonds and $14,393 amortization of discount on bonds). During 1995, developers contributed utility plant assets in the amount of $1,249,563. During 1995, the Parks and Recreation Facilities Development Fund contributed land, building~ other improvements and equipment to the Aquatic Park Fund in the amount of $8,855,695. See accompanying notes to general purpose financial statements. 17 Note (1) Note (2) Note, (3) Note (4) Note (5) Note (6) Note (7) Note (8) Note (9) Note (10) Note (11) Note (12) Note (13) Note (14) Note (15) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements September 30, 1995 Summary of Significant Accounting Policies Deposits and Investments Property Tax Special Assessments Fixed Assets Operating Leases Long-tenn Debt Employees' Retirement System Water and Sewer Contracts Contributed Capital Commitments and Contingencies Deferred Compensation Plan Segment Infonnation - Enterprise Funds Interfund Balances Excess of Expenditures Over Appropriations 18 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (1) Summary of Significant Accounting Policies The City of North Richland Hills Home Rule Charter was adopted by the voters at é election held on November 3, 1964. The City operates under a Council-Manager form, government. The City provides a full range of services. These services include police aI fire protection; the construction and maintenance of streets and infrastructure; parks, libra and recreational activities; the operation of a water and sewer system, and the operation a water park and a golf course. The accounting policies of the City of North Richland Hills, Texas conform to general accepted accounting principles as applicable to governmental units. The Government Accounting Standards Board (GASB) is the accepted standard setting body for establishil governmental accounting and financial reporting principles. The following is a summa of the more significant of such policies: (a) Reporting Entity As required by generally accepted accounting principles, these financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. The blended component unit, although a legally separate entity, is, in substance, part of the primary government's operations and so data from this unit is combined with data of the primary government. The blended component unit has a September 30 year end. Blended Component Unit - The Parks and Recreation Facilities Development Fund (PRD) serves all the citizens of the City and is used to account for the accumulation and use of resources to build and improve City parks. The PRD is reported as a special revenue fund. Complete financial statements for the individual component unit may be obtained at the City's offices. (b) Basis of Presentation - Fund Accounting The accounts of the City are organized on the basis of funds or account groups, ea of which is considered to be a separate accounting entity. The operations of ea fund are accounted for with a separate set of self-balancing accounts which compri its assets, liabilities, retained earnings/fund balance, revenues a expenses/expenditures. The various funds are grouped by type in the general purpc financial statements. Account groups are financial reporting devices designed provide accountability for certain assets and liabilities that are not recorded in fUŒ The following fund types and account groups are used by the City: GOVERNMENTAL FUND TYPES Governmental Funds are those through which most governmental functions of t City are financed. The acquisition, use, and balances of the City's expendal financial resources and the related liabilities (except those accounted for in t proprietary fund types) are accounted for through governmental funds. T measurement focus is based upon determination of changes in financial positi< rather than upon net income determination. The following are th~ Cit: governmental fund types: (Continu~ 19 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements General Fund - The General Fund is the general operating 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 - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments) that are legally restricted to expenditures for specified purposes. Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term and sales tax revenue debt principal, interest, and related costs. Capital Protects Funds - The Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by the proprietary fund types). Financing is provided primarily by the sale of general obligation bonds. Certain projects are partially financed by special assessments. PROPRIETARY FUND TYPES Proprietary funds are used to account for activities that are similar to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. Under GASB Statement No. 20, "Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting", all proprietary funds will continue to follow Financial Accounting Standards Board (FASB) standards issued on or before November 30, 1989. However, from that date forward, proprietary funds will have the option of either 1) choosing not to apply future F ASB standards (including amendments of earlier pronouncements), or 2) continuing to follow new FASB pronouncements (unless they conflict with GASB guidance). The City has chosen not to apply future F ASB standards. Following are the City's proprietary fund types: EnteqJrise Funds - Enterprise Funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Internal Service Funds - Internal Service Funds are used to account for goods or services provided by one department to other departments of the City on a cost reimbursement basis. 20 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements FIDUCIARY FUND TYPE Agency Fund - Fiduciary funds are used to account for assets 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. ACCOUNT GROUPS Account groups are used to establish accounting control and accountability for the City's general fixed assets and general long-term debt. The following are the City's account groups: General Fixed Assets Account Group - This account group is established to account for all fixed assets of the City, other than those accounted for in proprietary funds. General Long-Term Debt Account Group - This account group is established to account for all long-term debt of the City except that accounted for in proprietary funds. (c) Basis of Accounting The modified accrual basis of accounting is followed by governmental funds and the agency fund. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available to finance expenditures of the fiscal period. "Measurable" means the amount of the transactior can be determined and "available" means collectible within the current period or soor enough thereafter to be used to pay liabilities of the current period. Revenues no' considered available are recorded as deferred revenue. Expenditures are recorde( when the related fund liability is incurred except for (1) interest on generallong-tem obligations, which is recorded when due or when amounts have been accumulated ir the Debt Service Funds for payments to be made early in the following year, and (2) j portion of accrued vacation leave (note 1(1», which is recorded in the general long term debt account group. Property tax, sales tax, drainage fees, certain franchise taxes, and special assessmen revenues are recognized under the susceptible to accrual concept. Other franchisl taxes, licenses and permits, charges for services (excluding administration fees), fines contributions, and miscellaneous revenues are recorded as revenues when received il cash because they are generally not measurable until actually received. Interes income, intergovernmental revenue and administration fees are recorded as earne, since they are measurable and available. The accrual basis of accounting is utilized by the proprietary funds. Under thi method, revenues are recorded when earned and expenses are recorded at the tim liabilities are incurred. (Continuec 21 .. CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (d) Budgetary Data The City Council follows these procedures in establishing budgetary data reflected in the general purpose financial statements: (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. (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 (excluding the Special Investigation and Parks and Recreation Facilities Development Funds) and Debt Service Funds. Budgetary control is maintained at the fund level. (6) Legally adopted budgets for the General, certain Special Revenue, and Debt Service Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Budgeted amounts are as originally adopted and amended by the City Council or as transferred between departments by the City Manager. During the year, several supplementary appropriations of approximately $466,000 and revised revenue estimates of approximately $181,000 were necessary. Appropriations lapse at year end. (7) No annual budget was adopted for the Special Investigation and Parks and Recreation Facilities Development Funds (Special Revenue Funds) for the year ended September 30, 1995 as shown below: Special Revenue (Actual) Excess (deficiency) of revenues and other sources over expenditures and other uses: Budgeted funds (budgetary basis) Nonbudgeted funds Total (GAAP basis) $ (18,558) (5,157,188) $(5,175,746) 22 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (8) Budgetary data for the Capital Projects Funds, the Special Investigation Fund and the Parks and Recreation Facilities Development Fund has not been presented in the accompanying general purpose financial statements as such funds are either budgeted over the life of the respective projects and not on an annual basis or an annual budget is prohibited by regulatory agencies. Accordingly, formal budgetary integration of these funds is not employed and comparison of actual results of operations to budgetary data for such funds are not presented. (9) Budgetary data for proprietary funds has not been presented since the reporting on such budgets is not legally required. (e) Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve' that portion of the applicable fund balance, is employed in the governmental funds. Encumbrances are reported as reservations of fund balances because they do not constitute expenditures or liabilities. (t) Deposits and Investments Deposits consist of cash, cash equivalents and a certificate of deposit. Investments consist of (1) investments in a public funds investment pool, (2) short, term investments with original maturities of three months or less from the date 01 acquisition and (3) Deferred Compensation Agency Fund investments in mutual funds. Investments are stated at cost, except for investments in the Deferred Compensatior Agency Fund which are reported at market value. For the purposes of presenting the statement of cash flows for Proprietary Funds, cast and cash equivalents are defined as demand deposits and pooled deposits anc investments (note 2). (g) Inventories Inventories of proprietary funds are valued at cost (first-in, first-out method). (h) Property. Plant and Equipment - Proprietary Funds Property, plant and equipment owned by proprietary funds is stated at cost 0 estimated fair market value at the date contributed. Depreciation has been provide( on a straight-line basis over the estimated useful lives of the assets. The estimate( useful lives are as follows: Building and improvements Land improvements Utility plant in service Machinery and equipment 33 years 50 years 38-50 years 3-10 years (Continued 23 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (i) General Fixed Assets General fixed assets are recorded as capital outlay expenditures in the General Fund, Capital Projects Funds, ~r Special Revenue Funds, and capitalized at cost in the General Fixed Assets Account Group. In the case of gifts or contributions, such assets are recorded in the General Fixed Assets Account Group at estimated 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 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 been capitalized. (j) Other Assets - Enteq>rise Funds Other assets consist primarily of expenses incurred in connection with the issuance of certain outstanding revenue bonds and golf course obligations. Such charges are amortized on a straight-line basis over the lives of the respective bonds or obligations. (Ie) Advances to Other Funds - General Fund Noncurrent portions of long-term interfund loans receivable are reported as advances and 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 Pay City employees are granted vacation and sick pay in varying amounts. In the event of termination, an employee is reimbursed for all accumulated unused vacation. No reimbursement is made for accumulated unused sick leave upon termination of employment. Vacation pay is accrued as vested and included in accrued liabilities in the accompanying combined balance sheet. Sick pay is recorded when taken. Accrued vacation pay that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. Amounts of accrued vacation pay that are not expected to be liquidated with expendable available financial resources are reported in the general long-term 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. 24 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements Accrued vacation pay at September 30, 1995 consisted of the following: General Fund General Long-term Debt Account Group Water and Sewer (Enterprise) Fund Aquatic Park (Enterprise) Fund Support Services (Internal Service) Fund $ 117,856 556,823 117, 162 3,867 33,620 $ 829,328 (m) Restricted Assets Certain proceeds of Enterprise Fund bonds, as well as certain resources set aside for their repayment, are classified as restricted assets because their use is limited by applicable bond covenants. Retained earnings have been reserved for the excess of restricted assets over related liabilities to the extent such restricted assets were accumulated from revenues (i.e., in some cases, restricted assets were obtained in total or in part from bond proceeds). (n) Unbilled Char&es Unbilled utility service charges of the Water and Sewer (Enterprise) Fund are estimated and recorded as receivables, net of estimated uncollectibles. (0) Transactions between Funds Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as 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 nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers and are included in the results of operations of both governmental and proprietary funds. The General Fund charges the Water and Sewer (Enterprise) Fund a franchise fee ($329,419 in 1995) and a payment in lieu of tax (i.e., property tax) ($187,302 in 1995). Such charges are recorded as tax revenues by the General Fund and operating expenses by the Water and Sewer (Enterprise) Fund. The General Fund charges the Water and Sew~r (Enterprise) Fund, Capital Projects Fund, and the Parks and Recreation Facilities Development Fund (Special Revenue Fund) an administration fee for certain general and administrative services provided to such funds. Such charges are recorded as charges for services revenue by the General Fund ($1,399,526 in 1995), operating expense by the Water and Sewer (Enterprise) Fund ($1,025,000 in 1995), capital outlay expenditure by the Capital Projects Fund ($210,000 in 1995), and culture and recreation expenditure by the Parks and Recreation Facilities Development Corporation Fund ($164,526 in 1995). (Continued) 25 l CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The Internal Service Funds record charges to other funds for services rendered as operating revenues (see note 11). The respective funds record the related charges as operating expenses or exp~nditures, as appropriate. (p) Fund Equity Designated fund balances represent tentative plans for capital improvements as determined by the City Council for future use of financial resources. (q) Fund Deficit The Self-Insurance (Internal Service) Fund incurred an accumulated deficit of $69,686 at September 30, 1995 due to unexpected major medical claims. It is management's intent to cure this deficit through increased charges to the user funds. The accumulated deficit of $1,146,059 reported by the Golf Course (Enterprise) Fund is primarily a result of replanting expenses ($322,769 in 1990), loss on in-substance defeasance of golf course obligations ($217,646 in 1991) and interest expense in excess of operating income for 1990, 1991, 1992, 1994, and 1995. It is management's intent to cure this accumulated deficit through increased operating income in future periods. Should the Golf Course Fund fail to accumulate the necessary resources to meet the current portion of the golf course obligations principal payments of approximately $185,000, management intends to utilize advances from the General Fund. (r) Comparative Data Comparative data for the prior year have been presented in the accompanying general purpose financial statements in order to provide an understanding of changes in the City's financial position and operations. However, complete comparative 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. Certain amounts presented in the prior year have been reclassified to conform to the 1995 presentation. (s) 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 conformity with generally accepted accounting principles. Neither is such data compa.rable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. (Continued) 26 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (2) Deposits and Investments Substantially all operating deposits and investments are maintained in pooled deposits and investment accounts or are held by a third party administrator (i.e., deferred compensation plan - note 12). Interest income relating to pooled deposits and investments is allocated to the individual funds monthly based on each fund's pro-rata share of total pooled deposits and investments. Legal provisions generally permit the City to invest in certificates of deposit, repurchase agreements, public 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, 1995, the City did not own any types of securities other than those permitted by statute. At September 30, 1995, the carrying amount of the City's cash and certificate of deposit was $387,645 (exclusive of the bank overdraft of $1,114,349) and the bank balance was $485,632. The bank balance was entirely covered by Federal depository insurance or by collateral held by the City's agent pledged in the City's name. All investment securities managed by the City totaling $9,831,133 (excluding $22,702,955 in TexPool) are insured, registered, or held by the City or the City's agent in the City's name which is classified as a category one in accordance with GASB Statement No.3, "Deposits with Financial Institutions, Investments (including Repurchase Agreements) and Reverse Repurchase Agreements." TexPool, a public 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 of TexPool 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 form. At September 30, 1995, the market value of TexPool approximated its carrying value. At year-end the City's pooled deposits and investments were as follows: Total Carrying Value Market Value Total pooled deposits and investments $ 387,645 972,827 8,858,306 22,702,955 $ 32,921,733 387,645 981,391 8,919,494 22,702,955 32,991,485 Cash and certificate of deposit U.S. Treasury Bill U.S. Government agencies' notes Public fund investment pool (Continued) 27 --. CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements A reconciliation of the City's deposits and investments at September 30, 1995 follows: Carrying Amount $ 6,301,769 Cash, cash equivalents and certificate of deposit Investments: Public funds investment pool Short-term investments Investment in deferred compensation mutual fund (note 12) at market value Total investments 22,702,955 3,917,009 2,552,444 29,172,408 $ 35,474,177 $ 24,779,577 2,552,444 27,332,021 8, 142, 156 $ 35,474,177 Unrestricted: Deposits and investments, at cost Investments, at market Total unrestricted Restricted deposits and investments, at cost (3) Property Tax The City's property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real property and certain personal property located in the City. Tax liens attach as of February 1. The assessed value, net of exemptions, upon which the fiscal 1995 levy was based was $1,510,391,128. Property taxes are limited by the Texas Constitution to $2.50 per $100 of assessed valuation and by City Charter to $1.50 per $100 valuation. The combined tax rate to finance general governmental service and debt service for the year ended September 30, 1995 was $.57 per $100 of assessed valuation. Taxes are due on receipt of the tax bill. Current tax collections for the year ended September 30, 1995 were 100.4% of the tax levy. Property taxes receivable at September 30, 1995 were $251,724. Property taxes levied for 1995 have been recorded as receivables, net of estimated uncollectibles. The net receivables collected during 1995 and those considered "available" at September 30, 1995 (i.e., property taxes collected within 60 days of year end) have been recognized as revenues in 1995. Prior year levies were recorded using these same principles. The remaining receivables have been reflected as deferred revenue ($98,057 at September 30, 1995). 28 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements The appraisal of property within the City is the responsibility of a county-wide Appraisal District as required by legislation passed by the Texas Legislature. The Appraisal District is required under such legislation to assess all property within the Appraisal District on the basis of 100% of its appraised value and is prohibited from applying any assessment ratios. The value of property within the Appraisal District must be reviewed every three years; however, the City may, at its own expense, require annual reviews of appraised values. The City may challenge appraised values established by the Appraisal District through 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 Capital Projects Fund because they benefit the entire community and are financed primarily by general obligation bond proceeds. Special assessments are levied against properties deemed to be specifically benefited by the improvements. Costs of the projects are estimated and property owners are charged a proportionate share. Special assessments are recorded on the levy date and recognized as revenue when they become measurable and available (i.e., estimated to be collected within one year). Assessments which are not "available" at September 30, 1995 of $614,178 have been reflected as deferred revenue in the General Capital Projects Fund. (5) Fixed Assets A summary of changes in general fixed assets follows: Balance Balance September 30, Transfersl Completed September 31 1994 Additions Retirements Construction 1995 Land $ 7,166,729 745,771 6,420,95 Buildings and improvements 11, 119,515 658,890 11,778,40 Improvements other than buildings 44,150,409 40, 645 3,769,406 47,879,17 Machinery and equipment 8,048,925 577,313 26,790 8,599,44 Construction in progress 8.838,467 13.307,484 8. 114,913 (4,428.296) 9,602,74 $ 79,324,045 13,884,797 8,928,119 84,280, 72 Construction in progress at September 30, 1995 is composed of the following: Expended to September 30, 1995 Committed Project Authorization Street, drainage and park improvements ' $ 17, 487, 427 9,602.742 7,884,685 (Continued) 29 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements ---.. The "project authorization" and "committed" figures above are based on open contracts at September 30, 1995. No future financing is anticipated to complete the above projects. A summary of proprietary fund property, plant and equipment at September 30, 1995 follows: Enterprise Funds Land Land improvements Building and improvements Other improvements Utility plant in service Machinery and equipment Construction in progress $ 2,853,235 2,845,853 4,169,218 6,865,181 57,332,784 2, 171,066 3,902,998 80,140,335 (15,047,702) $ 65,092,633 Less accumulated depreciation Internal Service Funds 537,478 1,878,552 2,416,030 (822,387) 1,593,643 At September 30, 1995 the City was committed under utility construction contracts for approximately $337,000. (6) Operating Leases The City is committed under various leases for golf course equipment. These leases are considered for accounting purposes to 'be operating leases. Lease expense for the year ended September 30, 1995 amounted to approximately $73,000. Future minimum lease payments for these leases are as follows: 1996 1997 $ 51,903 48,972 $ 100,875 30 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (7) Long-term Debt The following is a summary of long-term debt transactions of the City for the year ended September 30, 1995 (in thousands of dollars): Amortization of discount on capital September 30, appreciation September 30, ~ Additions hilllih ~ Retirements 1995 General Long-tenn Debt Account Group: General Obligation $ 35,099 6,000 338 2,665 38,772 Bonds Sales Tax Revenue Bonds 11, 185 2,000 305 12,880 Certificates of Obligation 1,850 250 1,600 Accrued Vacation Pay (note 1(1)) 525 32 557 General Obligation ~ ~ --.lli Note Payable - - - - - - General Long- $ 49,220 8,000 338 3,305 54,285 tenn Debt Total 32 - - Enterprise Funds: $ 15,335 321 1,285 14,371 Revenue Bonds Golf Course Obligations 4,870 4,870 Golf Course Contractual Obligation ~ - - - ~ ~ - - - Enterprise Funds $ 20, 385 321 1,320 19,386 Total - - - Long-term debt at September 30, 1995 consisted of the following: General Obligation Bonds: $3,720,000 Series 1985 Refunding and Improvement Capital Appreciation Bonds discounted at 8.90% to 9.25%, due in annual installments of $620,000 beginning February 15,2000 through February 15, 2005; net of unamortized discount of $1,702,940 $6,000,000 Series 1986 Serial Bonds, $230,000 due February 15, 1996; interest at 7.5% $8,000,000 Series 1987 Serial Bonds due in annual installments of $305,000 to $330,000 through February 15, 1997; interest at 7.0% to 7.375% $ 2,017,060 230,000 635,000 31 (Continued) CITY OF NORTH RICIILAND HILLS,TEXAS Notes to General Purpose Financial Statements $5,000,000 Series 1989 Serial Bonds due in annual installments of $180,000 to $230,000 through February 15, 1999; interest at 9.35% to 10.0% $2,735,000 Series 1991 Serial Bonds due in annual installments of $90,000 to $225,000 through February 15,2011; interest at 6.0% to 9.0% $17,450,000 Series 1992 Refunding Serial Bonds due in annual installments of $1,610,000 to $1,800,000 through February 15,2005; interest at 4.80% to 6.30% $5,440,000 Series 1992 Refunding Capital Appreciation Bonds discounted at 6.7% to 6.8%, due in annual installments of $465,000 to $1,865,000 beginning February 15,2006 through February 15,2009; net of unamortized discount of $2,919,644 $4,400,000 Series B 1992-A Serial Bonds due in annual installments of $145,000 to $385,000 through February 15, 2012; interest at 4.90% to 6.75% $3,865,000 Series 1993 Serial Bonds due in annual installments of $120,000 to $305,000 through February 15,2013; interest at 4.25% to 7.25% $6,000,000 Series 1995 Serial Bonds due in annual installments of $150,000 to $360,000 beginning February 15, 1997 through February 15,2015; interest at 5.0% to 7.0% Sales Tax Revenue Bonds: $7,500,000 Series 1992 Sales Tax Revenue Bonds due in annual installments of $245,000 to $630,000 through September 1,2012; interest at 5.75% to 8.60% $3,895,000 Series 1994 Sales Tax Revenue Bonds due in annual installments of $125,000 to $330,000 through September 1,2013; interest at 5.30% to 8.30% $2,000,000 series 1995 Sales Tax Revenue Bonds due in annual installments of $105,000 to $110,000 beginning September 1, 1997 through September 30, 2015; interest at 5.25% to 7.25% 32 $ 825,000 2,490,000 16,295,000 2,520,356 4,125,000 3,635,000 6.000,000 $ 38,772,416 $ 7,065,000 3,815,000 2,000,000 $ 12,880,000 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements Certificates of Obligation: $900,000 Series 1992 Revenue Certificates of Obligation due in annual installments of $30,000 to $80,000 through February 15,2012; interest at 4.9% to 6.75% $1,185,000 Series 1993 Revenue Certificates of Obligation due in annual installments of $235,000 to $265,000 through February 15, 1998; interest at 3.250 to 3.5% to 4.50% General Obligation Note Payable: $615,000 note payable, secured by future ad valorem tax revenues, due on monthly installments of $7,043, including interest at 6.69%, through October, 2002 Revenue Bonds: $8,025,000 Series 1989 Waterworks and Sewer System Improvement and Refunding Revenue Bonds due in annual installments of $645,000 to $915,000 through September 1,2001; interest at 7.25% to 7.375% $4,070,000 Series 1989 Waterworks and Sewer System Improvement and Refunding Capital Appreciation Bonds discounted at 7.60% to 7.75%, due in annual installments of $395,000 to $985,000 beginning September 1, 2002 through September 1, 2008; net of unamortized discount of $2,004,664 $3,500,000 Series 1989-A Waterworks and Sewer System Refunding Revenue Bonds due in annual installments of $280,000 to $400,000 through September 1,2001; interest at 7.25% to 7.375% $1,730,000 Series 1989-A Waterworks and Sewer System Refunding Capital Appreciation Bonds discounted at 7.60% to 7.75%, due in annual installments of $165,000 to $425,000 beginning September 1, 2002 through September 1, 2008; net of unamortized discount of $850,256 $5,715,000 Series 1989-B Waterworks and Sewer System Refunding Revenue Bonds due in annual installments of $445,000 to $620,000 through September 1,2001; interest at 6.80% to 6.90% 33 -, $ 850,000 750,000 $ 1,600,000 $ 475,746 $ 4,640,000 2,065,336 2,020,000 879,744 3,175,000 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements $3,020,000 Series 1989-B Waterworks and Sewer System Refunding Capital Appreciation Bonds discounted at 7.10% to 7.20%, due in annual installments of $270,ooo,to $665,000 beginning September 1, 2002 through September 1, 2008; net of unamortized discount of $1,428,565 $ 1,591,435 $ 14,371, 515 Golf Course Obligations: $4,870,000 Series 1991 Tax and Golf Course Revenue Refunding Bonds due in annual installments of $185,000 to $470,000 beginning September 1, 1996 through September 1, 2011; interest at 5.90% to 7.00% Golf Course Contractual Obligation: $180,000 Series 1994 Contractual Obligation due in annual installments of $35,000 to $40,000 beginning February 15, 1995 through February 15, 1999; interest at 4.75% to 6.70% $ 4,870,000 $ 145,000 The future annual requirements to amortize all debt outstanding as of September 30, 1995, follows: General Golf Year Sales Certificate Obligation Golf Course ending General Tax of Note Revenue Course Contractual September 30 Obli2ation Revenue Obli~ation ~ Bmm Obli~ations Obli2ation DlliIl 1996 $ 4,804,773 1,237,125 339,489 84,514 2,075,605 509,820 42,054 9,093,380 1997 4,768,764 1,285,545 344,780 84,514 2,073,283 508,905 39,722 9,105,513 1998 4,344,092 1,274,420 349,170 84,514 2,079,208 507,205 37,731 8,676,340 1999 4,042,041 ' 1,255,678 82,726 ' ,84,514 2,076,805 509,700 40,950 8,092,414 2000 4,037,111 1,239,800 80,723 84,514 2,075,126 506,060 8,023,334 2001-2005 19,817,306 5,977,653 415,990 176,071 8,294,761 2,546,395 37,228,176 2006-2010 12,719,541 5,848,399 415,537 2,600,000 2,545,840 24,129,317 2011-2015 3.987.629 3.003.664 165.613 - 502.900 - 7.659.806 58,521,257 21,122,284 2,194,028 598,641 21,274,788 8,136,825 160,457 112,008,280 Less applicable interest 19.748.841 8.242.284 594.028 m.m 6.903.273 3.266.825 -1.5..ill 38.893.603 $ 38,772,416 12,880,000 1,600,000 475,746 14,371,515 4,870,000 145,000 73,114,677 Authorized but unissued debt at September 30, 1995 consisted of general obligation bonds designated as follows: Street improvements Drainage $ 16,775,000 4,765,000 $ 21,540,000 (Continued) 34 CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements 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 1/2 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 of the PRD. The Golf Course Obligations are direct obligations of the City, and are payable both as to principal and interest from an ad valorem tax levied against all taxable property within the limits prescribed by law and a pledge of the net revenues received from the City's golf course facilities. It is the intent of management to repay these obligations from the net revenues of the golf course. Therefore the debt is reflected as a fund obligation. The ordinances authorizing the issuance of Waterworks and Sewer System Revenue Bonds created the Interest and Sinking Fund and Reserve Fund. The gross revenues of the waterworks and sewer system, after deduction of reasonable expenses of operations and maintenance, are pledged to such funds 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, 1995, the City was in compliance with these requirements. In prior years, the City defeased certain general obligation bonds, revenue bonds and golf course obligations by placing the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 1995, $31,890,000 of bonds and obligations outstanding are considered 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 contribution plan in the state-wide Texas Municipal Retirement System (TMRS), one of over 650 administered by TMRS, an agent multiple-employer public employee retirement system. It is the opinion of the TMRS management that plans in TMRS are substantially defined contribution plans, but they have elected to provide additional voluntary disclosure to help foster a better understanding of some of the nontraditional characteristics of the plan. Benefits depend upon the sum of the employee's contributions to the plan, with interest, and the City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (200%) of the employee's accumulated contributions. In addition, the City can grant as often as annually another type of monetary credit referred to as an updated service credit which is a theoretical 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 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 if the 35 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements sum of the employee's accumulated contributions with interest and the employer- financed 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, but he must leave his accumulated contributions in the plan. If a member withdraws his own money, he is not entitled to the employer-financed monetary credits, even if he was vested. The plan provisions are adopted by the City Council, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. (b) Contributions The contribution rate for employees is 7%, and the City's matching percent is currently 200%, both as adopted by the City Council. Under the state law governing TMRS, the City contribution rate is annually determined by the actuary. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new 25-year period. Currently, the unfunded actuarial liability is being amortized over the 25-year period which began January 1995. 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 for it, there is a one-year lag between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect. The City's total payroll in fiscal year 1995 was $13,257,775, and the City's contributions were based on a covered payroll of $11,863,073. Both the City and the covered employees made the rèquired contributions, amounting to $1,456,739 (10.20% of covered payroll for the months in calendar year 1994, 8.34% normal cost plus 1.86% to amortize the unfunded actuarial liability and 11.30% for the months in calendar year 1995,9.01 % normal cost plus 2.29% to amortize the unfunded actuarial liability) for the City and $922,714 (7%) for the employees. The required contribution represents $1,172,674 of normal cost and $284,065 to amortize the unfunded actuarial liability . The City adopted changes in the plan since the previous actuarial valuation, which had the effect of increasing the City's contribution rate for 1995 by 0.44% of covered payroll. There were no related party transactions. (c) Funding Status and Progress Even though the substance of the City's plan is not to provide a defined benefit in some form, some additional voluntary disclosure is appropriate due to the nontraditional nature of the defined contribution plan which had an initial unfunded pension benefit obligation due to the monetary credits granted by the City for services rendered before the plan began and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No.5 of the Governmental Accounting Standards Board (GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee 36 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements pension plans, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee pension plans. The City's pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASB 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1994. Because of the money-purchase nature of the plan, the interest rate assumption, currently 8.5% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each city's plan, but the market value of assets for TMRS as a whole was 98.6% of book value as of December 31, 1994. Pension Benefit Obligation Annuitants currently receiving benefits Terminated employees Current employees: Accumulated employee contributions, including allocated invested earnings Employer-financed vested Employer-financed nonvested Total pension benefit obligation Net Assets Available for Benefits. at Book Value $ 1,145,324 1,512,275 8,731,476 12,563, 103 3,412, 102 27,364,280 Unfunded Pension Benefit Obligation 20,715,825 $ 6,648,455 The book value of assets is amortized cost for bonds and original cost for short-term securities and stocks. The actuarial assumptions used to compute the actuarially determined City contribution rate are the same as those used to compute the pension benefit obligation. The numbers above reflect the adoption of changes in the plan since the previous actuarial valuation, which had the effect of increasing the pension benefit obligation by $1,034,695. 37 (Continued) CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (d) Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Additional trend information relating to the City may be found in the required supplementary information in the City's Comprehensive Annual Financial Report. Trend information for the City based upon actuarial computations for the years ended December 31, 1994, 1993 and 1992 is as follows: 1992 1993 1994 A vailable plan assets as a percentage of the pension benefit obligation Unfunded pension benefit obligation as a percentage of annual covered payroll 79% 72% 76% 36% 61% 56% Employer contribution as a percentage of annual covered payroll 11% 11% 12% - The City's contributions to the plan were in accordance with actuarially determined requirements for 1992 through 1994. Ten-year trend information for TMRS as a whole may be found in the TMRS annual financial report. (9) Water and Sewer Contracts The City has several individual contracts with the City of Fort Worth (Fort Worth) and the Trinity River Authority of Texas (TRA) for the purchase of treated water and for the transportation, treatment and disposal of sanitary sewage and other waste. The initial terms of the contracts range from twenty-one to forty-eight years and expire at various dates from 1997 through 2023. While the provisions of each of the contracts vary, each contract basically requires the City to pay varying amounts based on the costs associated with water purchased and sewage transported and/or 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. Included in the general debt service fund expenditures is approximately $20,000 of these debt service costs. Purchases of treated water and charges for the transportation, treatment and disposal of sewage and other wastes during 1995 amounted to approximately $4,877,000 and $3,160,000, respectively. (Continued) 38 - CITY OF NORTH RICHLAND HILLS, TEXAS Notes to General Purpose Financial Statements (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: Total Water and Golf Aquatic Enterprise Sewer Course Park Funds Balance at beginning of year $ 20,567,718 1,882,372 22,450,090 Contributions from developers 1,249,563 1,249,563 Contributions of fixed assets from other City departments 8,855,695 8,855,695 Contributions from capital grants 1.176.131 1.176.131 Balance at end of year $ 22,993,412 1 ,882,372 8,855,695 33,731,479 (11) Commitments and Contingencies The City has participated in a number of State and Federally assisted grant programs. These programs are subject to financial and compliance audits by the grantors or their representatives, the purpose of which is to insure compliance with conditions precedent to the granting of funds. City management believes that any liability for reimbursement which may arise as the result of these audits would not materially affect the City's financial position. The City is defendant in several lawsuits, primarily for worker's compensation and general liability claims. City management believes that any ultimate liability on these suits, if any, will not materially affect the City's financial position. The U.S. Environmental Protection Agency in 1995 issued an Administrative Order requiring improvements to the City's wastewater collection system, to avoid wastewater overflows. The City expects to spend approximately $650,000 through fiscal year 1998 on a study to determine necessary corrective action. Costs of compliance with the Administrative Order are not known at this time. The City is self-insured for substantially all claims except for fire coverage on buildings and contents, general liability insurance on the water park, and life insurance coverage. Under its current stop loss policy, the City pays medical claims up to $100,000 per individual per year and/or approximately $1,970,000 per year in the aggregate. The Self- Insurance (Internal Service) Fund covers medical expenses, worker's 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, 1995 include an estimate of the eventual loss on claims arising prior to year end, including claims incurred but not yet reported. Changes in the balances of claims liabilities during the past year are as follows: Year ended September 30 Unpaid claims, beginning of year Incurred claims (including IBNR) Claim expense Unpaid claims, end of year $ 495,567 2,726,304 (2,646,304) $ 575,567 39 (Continued) CITY OF NORTH RICHLAND mLLS, TEXAS Notes to General Purpose Financial Statements The City has a contract with a management company for operations of the city-owned public golf course. The contract expires January 1998. however. the City has the option of canceling the contract anytime after January 1996. In addition to monthly management fees. a contingent managemen~ fee is owed if the golf course revenues exceed a certain amount that varies from year to year. Contingent management fees incurred for 1995 were approximately $77.000. Total management fees for operations were approximately $160,000 for the year ended September 30. 1995. (12) Deferred Compensation Plan The City offers its employees a deferred compensation plan which falls under Internal Revenue Code Section 457. Virtually all employees are eligible to participate in the plan. The deferred compensation plan allows the deferral of individual Federal income taxes until funds are withdrawn. Funds may be withdrawn at termination. retirement. death or unforeseeable emergency. Employees may contribute a maximum of 33.33% of salary or $7,500, whichever is less. All amounts deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are legally the property of the City (until paid or made available to the participants), subject only to the claims of the City's general creditors. Participant's rights under the plan are equal to those of the general creditor's of the City in an amount equal to the fair value of the deferred amount for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. Plan assets have been invested in a mutual fund (note 2). (13) Segment Information - Enteq>rise 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 provides water and sewer services to residents of the City and certain nonresidents. The Golf Course Fund accounts for the operations of the City's public golf course. The Aquatic Park Fund accounts for the operations of the City's water park. Financial segment information as of and for the year ended September 30, 1995 is as follows: ' Water Golf Aquatic and Sewer Course Park Total Operating revenues $ 18,556,918 2, 177,067 1,767,831 22,501, 816 Depreciation expense 1,249,062 276,936 134, 199 1,660, 197 Operating income 2,758,395 358,565 556,698 3,673,658 Operating transfers in 67,700 67,700 Operating transfers out (652,249) (652,249) Net income 1,170,504 16,778 635,204 1,822,486 Capital contributions 2,425,694 8,855,695 11,281,389 Property, plant and equipment additions, net 4,413,483 49,506 8,866,758 13,329,747 Working capital (deficit) (303,817) 43,849 758,340 498,372 Total assets 61,975, 179 6,833,969 9,529,440 78,338,588 (Continued) 40 CITY OF NORTH RICHLAND HILLS, TEXAS Noto. tø Ooncmd Purpø.o PittAtiCiA! StAtGtnontá Water Golf Aquatic and Sewer Course Park Total Bonds/obligations payable $ 14,371,515 5,015,000 19,386,515 Retained earnings (accumulated deficit) 21,003,500 (1, 146,059) 635,204 20,492,645 Total fund equity 43,996,912 736, 313 9,490,899 54,224,124 14) Interfund Balances At September 30, 1995, interfund balances consisted of the following: Due from Due to Advances to Advances from other funds other funds other funds other funds Enterprise Funds: WmerandSewerFund $ 15,925 480,679 Golf Course Fund 39,164 855,927 General Fund 41,983 375,248 Drainage Utility Fund 18.744 $ 57 ,908 57 ,908 855,927 855,927 Due to and due from other funds are the short term portion of the advances to and advances from other funds. Interest on interfund advances approximated $68,000 for 1995. Such interest is included in interest income and interest expense in the accompanying general purpose financial statements. Interest is charged on interfund advances at variable rates that approximate the City's yields on certificates of deposit and investments (4% in 1995). (15) Excess of Expenditures Over Appropriations For the year ended September 30, 1995, expenditures exceeded appropriations in the Promotional (Special Revenue) Fund and the Sales Tax Revenue Debt Service Fund by $11,488 and $15,626, respectively. 41 APPENDIX C FORM OF BOND COUNSEL'S OPINION --- TIllS PAGE LEFT BLANK INTENTIONALLY FULBRIGHT & .JAWORSKI L. L. P. TELEPHONE: 214/855-8000 FACSIMilE: 214/855-8200 A REGISTERED LIMITED LIABiliTY PARTNERSHIP 2200 Ross AVENUE SUITE 2800 DALLAS. TEXAS 75201 HOUSTON WASHINGTON, D,C, AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES lONDON WRITER'S DIRECT DIAL NUMBER: 214/855- HONG KONG IN REGARD to the authorization and issuance of the "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", (the "Bonds"), dated December 1, 1996 (the "Issue Date"), in the aggregate original principal amount of $5,135,000, we have examined into the legality and validity of the issuance thereof by the City of North Richland Hills, Texas (the "City"), which Bonds are issuable in fully registered form only, in denominations of $5,000 or any integral multiple thereof (within a maturity), have stated maturities of September 1, 1997 through September 1, 2008, unless redeemed prior to maturity in accordance with the redemption provisions stated on the Bonds, and bear interest on the unpaid principal amount from the Issue Date at the rates per annum stated in the ordinance authorizing the issuance of the Bonds (the "Ordinance"), such interest being payable on March 1 and September 1 in each year, commencing September 1, 1997, 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 City solely to pass upon the legality and validity of the issuance of the Bonds under the Constitution and laws of the State of Texas, the defeasance and discharge of the City's outstanding obligations being refunded by the Bonds, and with respect to the exclusion of the interest on the Bonds from gross income for federal income tax purposes and none other. 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 City or the City's waterworks and sewer system and have not assumed any responsibility with respect thereto. Our examinations into the legality and validity of the Bonds included a review of the applicable and pertinent provisions ofthe Constitution and laws of the State of Texas, a transcript of certified proceedings of the City relating to the authorization and issuance of the Bonds, including the Ordinance, customary certifications and opinions of officials of the City and other pertinent showings, and an examination of the Bond executed and delivered initially by the City, which we found to be in due form and properly executed. BASED ON OUR EXAMINATIONS, IT IS OUR OPINION that, under applicable law of the United States of America and the State of Texas now in force and effect: 1. The Bonds have been duly authorized by the City and the Bonds issued in compliance with the provisions of the Ordinance are valid, legally binding and enforceable special obligations of the City, in accordance with the terms thereof, payable from and equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer System, 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 \vith general principles of equity. The Ordinance provides certain conditions under which the City may issue additional 0370021 ,/ THIS PAGE LEFT BLANK INTENTIONALLY Page 2 of Legal Opinion of Fulbright & Jaworski L.L.P. Re: $5,135,000 "City of North Richland Hills, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1996", dated December 1,1996 obligations payable from the same source and secured in the same manner as the Bonds; and 2. Assuming continuing compliance after the date hereof by the City with the provisions of the Ordinance and in reliance upon representations and certifications of the City made in a certificate of even date herewith pertaining to the use, expenditure, and investment of the proceeds of the Bonds, 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 hereof, of the owners thereof pursuant to section 103 of such Code, existing regulations, published rulings, and court decisions thereunder, and (2) will not be included in computing the alternative minimum taxable income of individuals or, except as hereinafter described, corporations. Interest on all tax-exempt obligations, such as 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 corporations, other than an S corporation, a qualified mutual fund, a real estate mortgage investment conduit (REMIC), or a real estate investment trust (REIT). A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code and the environmental tax imposed by section 59A of the Code will be computed. WE EXPRESS NO 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, property and casualty insurance companies, life 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 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 0370021 / INVESTMENT BANKERS Financial Advisory Services Provided By FIRST SOUTHWEST COMPANY