-
OFFICIAL STATEMENT Dated March 11, 2010 Ratings:
Moody’s: “Aa1” S&P: “AA+”See “Other Information - Ratings”
herein
NEW ISSUE - Book-Entry-Only
In the opinion of Co-Bond Counsel, interest on the Tax-Exempt
Series 2010A Bonds will be excludable from gross income for federal
income tax purposes under existing law and the Tax-Exempt Series
2010A Bonds are not private activity bonds. See “Legal and Tax
Matters - Tax Exemption of Tax-Exempt Series 2010A Bonds and
Certificates” for a discussion of the opinion of Co-Bond Counsel,
including a description of alternative minimum tax consequences for
corporations. Interest on the Taxable Series 2010B Bonds is not
excludable from gross income for federal income tax purposes. See
“Legal and Tax Matters – Taxable Series 2010B Bonds” herein.
$281,995,000 CITY OF DALLAS, TEXAS
(Dallas, Denton, Collin and Rockwall Counties)
$196,615,000 GENERAL OBLIGATION REFUNDING AND IMPROVEMENT
BONDS,
SERIES 2010A
$85,380,000 GENERAL OBLIGATION BONDS
TAXABLE SERIES 2010B (DIRECT SUBSIDY BUILD AMERICA BONDS)
Dated Date: Date of Delivery Due: February 15, as shown on
inside cover
Interest on the $196,615,000 City of Dallas, Texas, General
Obligation Refunding and Improvement Bonds, Series 2010A (the
“Tax-Exempt Series 2010A Bonds”) and $85,380,000 City of Dallas,
Texas General Obligation Bonds, Taxable Series 2010B (Direct
Subsidy Build America Bonds) (the “Taxable Series 2010B Bonds,” and
collectively with the Tax-Exempt Series 2010A Bonds, the “Bonds”)
will accrue from the date of delivery and will be calculated on the
basis of a 360-day year consisting of twelve 30 day months and will
be payable February 15 and August 15 of each year commencing on
February 15, 2011. 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 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 Obligations - Book-Entry-Only System” herein. The initial
Paying Agent/Registrar is U.S. Bank National Association (see “The
Obligations - Paying Agent/Registrar”).
The Bonds are direct obligations of the City of Dallas, Texas
(the “City”), payable from an ad valorem tax levied, within the
limits prescribed by law, on all taxable property within the City.
The Bonds are being authorized pursuant to the general laws of the
State of Texas, particularly Chapters 1331 and 1371 and in the case
of the Tax-Exempt Series 2010A Bonds, Chapter 1207 of the Texas
Government Code, as amended, an ordinance (the “Bond Ordinance”)
passed by the City Council of the City, and the City Charter (see
“The Obligations - Authority for Issuance”). The American Recovery
and Reinvestment Act of 2009 (the “Recovery Act”) authorizes the
City to issue taxable obligations known as “Build America Bonds” to
finance capital expenditures that could be financed with the
issuance of tax-exempt bonds and to elect to receive a subsidy
payment from the federal government equal to 35% of the amount of
each interest payment on such taxable bonds. The City anticipates
and reserves the right to sell and issue all of the Taxable Series
2010B Bonds as obligations that are not obligations described in
section 103(a) of the Internal Revenue Code of 1986, as amended
(the “Code”) and the interest on which is not excludable from gross
income for federal income tax purposes. The available subsidy for
the Taxable Series 2010B Bonds would be paid to the City. No
holders of Taxable Series 2010B Bonds are entitled to such payment
or to receive a tax credit with respect to the Taxable Series 2010B
Bonds. See “The Obligations – Designation of the Taxable Series
2010B Bonds as Qualified Build America Bonds.”
Proceeds from the sale of the Bonds will be used to (i) fund
various permanent public improvements in the City, (ii) refund
certain other general obligation bonds (the “Refunded Bonds”), and
(iii) pay the costs of issuance of the Bonds.
CUSIP PREFIX: 235219
MATURITY SCHEDULE & 9 DIGIT CUSIPSee Schedule on Inside
Cover
BofA MERRILL LYNCH RAMIREZ & CO., INC.
CITI J.P. MORGAN MORGAN KEEGAN & COMPANY, INC. RICE
FINANCIAL PRODUCTS COMPANY
-
2
The Tax-Exempt Series 2010A Bonds are not subject to redemption
prior to maturity. The City reserves the right, at its option, to
redeem the Taxable Series 2010B Bonds in whole or in part on any
date, at the redemption price described herein. In addition, the
Taxable Series 2010B Bonds are subject to Extraordinary Redemption
at the option of the City at the Extraordinary Redemption Price
described herein.
The Bonds are offered for delivery when, as and if issued by the
City and received by the Underwriters and subject to the approving
opinion of the Attorney General of the State of Texas and the
approving opinions of Vinson & Elkins L.L.P., Dallas, Texas and
West & Associates L.L.P., Dallas, Texas, Co-Bond Counsel for
the City (see Appendix C, “Form of Co-Bond Counsel Opinions”).
Certain legal matters will be passed upon for the City by the
Dallas City Attorney, and for the Underwriters by their co-counsel,
Locke Lord Bissell & Liddell LLP, Dallas, Texas and Adorno Yoss
White & Wiggins, LLP, Dallas, Texas.
It is expected that the Bonds will be available for delivery
through DTC on or about March 30, 2010.
MATURITY SCHEDULE Cusip Prefix: 235219 (1)
$196,615,000 GENERAL OBLIGATION REFUNDING
AND IMPROVEMENT BONDSSERIES 2010A
(Interest to accrue from date of delivery)
$85,380,000 General Obligation Bonds
Taxable Series 2010B (Direct Subsidy Build America Bonds)
(Interest to accrue from date of delivery)
____________(1) CUSIP is a registered trademark of the American
Bankers Association. CUSIP data herein are provided by Standard and
Poor’s CUSIP Service Bureau, a Division of the McGraw-Hill
Companies, Inc. These data are not intended to create a database
and do not serve in any way as a substitute for the CUSIP
Services
Initial InitialMaturity Reoffering Cusip(1) Maturity Reoffering
Cusip(1)
Amount (February 15) Rate Yield Suffix Amount (February 15) Rate
Yield Suffix 5,640,000$ 2011 3.000% 0.330% AA0 8,555,000$ 2016
5.000% 2.060% AF95,855,000 2012 5.000% 0.620% AB8 17,380,000 2017
5.000% 2.400% AG77,765,000 2013 5.000% 0.890% AC6 48,415,000 2018
5.000% 2.680% AH57,995,000 2014 5.000% 1.220% AD4 51,365,000 2019
5.000% 2.860% AJ18,270,000 2015 5.000% 1.600% AE2 35,375,000 2020
5.000% 3.030% AK8
Initial Initial
Maturity Reoffering Cusip(1) Maturity Reoffering Cusip(1)
Amount (February 15) Rate Yield Suffix Amount (February 15) Rate
Yield Suffix 5,960,000$ 2019 4.389% 100% AY8 7,160,000$ 2025 5.039%
100% BE16,135,000 2020 4.489% 100% AZ5 7,395,000 2026 5.089% 100%
BG66,320,000 2021 4.589% 100% BA9 7,645,000 2027 5.139% 100%
BH46,510,000 2022 4.689% 100% BB7 7,910,000 2028 5.463% 100%
BJ06,715,000 2023 4.839% 100% BC5 8,200,000 2029 5.563% 100%
BK76,930,000 2024 4.939% 100% BD3 8,500,000 2030 5.613% 100%
BF8
-
OFFICIAL STATEMENT
Dated March 11, 2010 Ratings: Moody’s: “Aa1” S&P: “AA+” See
“Other Information - NEW ISSUE - Book-Entry-Only Ratings”
herein
In the opinion of Co-Bond Counsel, interest on the Certificates
will be excludable from gross income for federal income tax
purposesunder existing law and the Certificates are not private
activity bonds. See "Legal and Tax Matters – Tax Exemption of
Tax-Exempt Series 2010A Bonds and Certificates" for a discussion of
the opinion of Co-Bond Counsel, including a description of
alternative minimum tax consequences for corporations.
$21,575,000 CITY OF DALLAS, TEXAS
(Dallas, Denton, Collin and Rockwall Counties) Combination Tax
and Revenue Certificates of Obligation, Series 2010
Dated Date: Date of Delivery Due: August 15, as shown on page
4
Interest on the $21,575,000 City of Dallas, Texas, Combination
Tax and Revenue Certificates of Obligation, Series 2010 (the
"Certificates") will accrue from the date of delivery, will be
payable February 15 and August 15 of each year commencing August
15, 2010, and will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The definitive Certificates
will be initially registered and delivered only to Cede & Co.,
the nominee of The Depository Trust Company ("DTC") pursuant to the
Book-Entry-OnlySystem described herein. Beneficial ownership of the
Certificates may be acquired in denominations of $5,000 or integral
multiplesthereof. No physical delivery of the Certificates will be
made to the owners thereof. Principal of, premium, if any, and
interest on the Certificates will be payable by the Paying
Agent/Registrar to Cede & Co., which will make distribution of
the amounts so paid to the participating members of DTC for
subsequent payment to the beneficial owners of the Certificates.
See "The Obligations - Book-Entry-Only System" herein. The initial
Paying Agent/Registrar is U.S. Bank National Association (see "The
Obligations - Paying Agent/Registrar").
The Certificates are being issued pursuant to the general laws
of the State of Texas, particularly Subchapter C of Chapter 271,
Texas Local Government Code, as amended, and Chapter 1371, Texas
Government Code, as amended, and an ordinance (the "Certificate
Ordinance") passed by the City Council of the City of Dallas, Texas
(the "City"). The Certificates are direct obligations of the City,
payable from a combination of (i) the levy and collection of a
direct and continuing ad valorem tax, within the limits prescribed
by law, on all taxable property within the City, and (ii) a limited
pledge of surplus net revenues of the City's Municipal Drainage
Utility System in an amount not to exceed $1,000, as prescribed in
the Certificate Ordinance (see "The Obligations - Authority for
Issuance").
Proceeds from the sale of the Certificates will be used to (i)
fund the purchase of various types of capital equipment, (ii)
construct police facilities in the Bexar Street redevelopment
corridor, and (iii) pay the costs of issuance of the
Certificates.
CUSIP PREFIX: 235219
MATURITY SCHEDULE & 9 DIGIT CUSIPSee Schedule on Page 4
The Certificates are not subject to redemption prior to
maturity.
The Certificates are offered for delivery when, as and if issued
and received by the Underwriters and subject to the approving
opinions of the Attorney General of the State of Texas and the
approving opinions of Vinson & Elkins L.L.P., Dallas, Texas and
West & AssociatesL.L.P., Dallas, Texas, Co-Bond Counsel for the
City (see Appendix C, "Form of Co-Bond Counsel Opinions"). Certain
legal matters will be passed upon for the City by the Dallas City
Attorney, and for the Underwriters by their co-counsel, Locke Lord
Bissell &Liddell LLP, Dallas, Texas and Adorno Yoss White &
Wiggins, LLP, Dallas, Texas.
It is expected that the Certificates will be available for
delivery through DTC on or about March 30, 2010.
BofA MERRILL LYNCH RAMIREZ & CO., INC.
CITI J.P. MORGAN MORGAN KEEGAN & COMPANY, INC. RICE
FINANCIAL PRODUCTS COMPANY
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4
MATURITY SCHEDULE Cusip Prefix: 235219 (1)
(Interest to accrue from date of delivery) _____________ (1)
CUSIP is a registered trademark of the American Bankers
Association. CUSIP data herein are provided by Standard and Poor’s
CUSIP Service Bureau, a Division of the McGraw-Hill Companies, Inc.
These data are not intended to create a database and do not serve
in any way as a substitute for the CUSIP Services.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
Initial Initial
Maturity Reoffering Cusip(1) Maturity Reoffering Cusip(1)
Amount (August 15) Rate Yield Suffix Amount (August 15) Rate
Yield Suffix 815,000$ 2010 2.000% 0.350% AL6 3,915,000$ 2014 4.000%
1.270% AX0
4,930,000 2011 2.000% 0.350% AM4 215,000 2015 2.000% 1.650%
AR31,085,000 2012 2.000% 0.700% AN2 215,000 2016 2.250% 2.110%
AS13,835,000 2012 4.000% 0.700% AW2 215,000 2017 2.500% 2.430%
AT94,920,000 2013 4.000% 0.940% AP7 215,000 2018 2.750% 2.700%
AU61,000,000 2014 2.000% 1.270% AQ5 215,000 2019 3.000% 2.880%
AV4
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5
In connection with this offering, the Underwriters may
over-allot or effect transactions that stabilize or maintain the
market price of the Obligations offered hereby at levels above that
which might otherwise prevail in the open market. Any such
stabilizing, if commenced, may be discontinued at any time.
This Official Statement, which includes the cover pages and the
Appendices hereto, does not constitute an offer to sell or the
solicitation of an offer to buy in any jurisdiction to any person
to whom it is unlawful to make such offer, solicitation or
sale.
No dealer, broker, salesperson or other person has been
authorized to give information or to make any representation other
thanthose contained in this Official Statement, and, if given or
made, such other information or representations must not be
reliedupon.
The information set forth herein has been obtained from the City
and other sources believed to be reliable, but such information is
not guaranteed as to accuracy or completeness and is not to be
construed as the promise or guarantee of the Co-Financial Advisors.
This Official Statement contains, in part, estimates and matters of
opinion which are not intended as statements of fact, and no
representation is made as to the correctness of such estimates and
opinions, or that they will be realized.
The Underwriters have provided the following sentence for
inclusion in this Official Statement. The Underwriters have
reviewedthe information in this Official Statement in accordance
with, and as part of, their responsibilities to investors under the
FederalSecurities laws as applied to the facts and circumstances of
this transaction, but the Underwriters do not guarantee the
accuracyor completeness of such information.
The information and expressions of opinion contained herein are
subject to change without notice, and neither the delivery of this
Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change
in the affairs of the City or other matters described.
Neither the City nor the Underwriters make any representation
regarding the information contained in this Official Statement
regarding The Depository Trust Company or its Book-Entry-Only
system, as such information has been furnished by The Depository
Trust Company. CUSIP numbers have been assigned to this issue by
the CUSIP Service Bureau, and are included solely for the
convenience of the owners of the Obligations. Neither the City nor
the Underwriters shall be responsible for theselection or
correctness of the CUSIP numbers shown on pages 2 and 4.
This Official Statement contains “forward-looking” statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Such statements may involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance and achievements to be different from future
results, performance and achievements expressed orimplied by such
forward-looking statements. Investors are cautioned that the actual
results could differ materially from those set forth in the
forward-looking statements.
TABLE OF CONTENTS
CITY OFFICIALS, STAFF AND CONSULTANTS
............................................. 7�ELECTED OFFICIALS
.......................................... 7�SELECTED
ADMINISTRATIVE STAFF ................... 8�CONSULTANTS AND ADVISORS
.......................... 8�
SELECTED DATA FROM THE OFFICIAL STATEMENT
................................................. 9�TABLE 1 –
SELECTED ISSUER INDICES ............. 11�
THE OBLIGATIONS ...........................................
12�AUTHORITY FOR ISSUANCE ..............................
12�REFUNDED BONDS AND ESCROW ..................... 12�SECURITY FOR
OBLIGATIONS .......................... 12�BUILD AMERICA BONDS
.................................. 13�INTEREST SUBSIDY PAYMENT
.......................... 13�DESIGNATION OF THE TAXABLE SERIES
2010B
BONDS AS QUALIFIED BUILD
AMERICABONDS.....................................................
13�
NO REDEMPTION OF THE TAX-EXEMPT SERIES 2010A BONDS
......................................... 13�
MAKE-WHOLE REDEMPTION OF THE TAXABLE SERIES 2010B BONDS
............................. 13�
EXTRAORDINARY OPTIONAL REDEMPTION OF TAXABLE SERIES 2010B BONDS
.............. 14�
NO REDEMPTION OF THE CERTIFICATES........... 14�NOTICE OF
REDEMPTION .................................. 14�BOOK-ENTRY-ONLY
SYSTEM .......................... 15�PAYING AGENT/REGISTRAR
............................. 16�TRANSFER, EXCHANGE AND
REGISTRATION .... 17�LIMITATION ON TRANSFER OF BONDS CALLED
FOR REDEMPTION .................................... 17�RECORD
DATE FOR INTEREST PAYMENT .......... 17�OBLIGATION HOLDERS’
REMEDIES .................. 17�USE OF PROCEEDS
............................................ 18�DEFEASANCE
................................................... 18�SOURCES AND
USES OF FUNDS ......................... 19�
CITY AD VALOREM TAX INFORMATION ... 20�STATE OF TEXAS TAX CODE
............................ 20�FISCAL YEAR 2009 GENERAL FUND
BUDGETARY
HIGHLIGHTS ............................................
23�FISCAL YEAR 2010 BUDGET ............................ 24�FISCAL
YEAR 2010 REVENUES ......................... 24�AD VALOREM TAX DATA
................................ 25�
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6
TABLE 2 – VALUATION, EXEMPTIONS ANDGENERAL OBLIGATION DEBT
.................. 25�
TABLE 3 - TAXABLE ASSESSED VALUATION BY CATEGORY
.............................................. 26�
TABLE 4 - VALUATION AND FUNDED DEBTHISTORY
................................................. 26�
TABLE 5 - TAX RATE, LEVY AND COLLECTION HISTORY
................................................. 27�
TABLE 6 - TEN LARGEST TAXPAYERS .............. 27�
CITY DEBT INFORMATION ............................. 28�TABLE 7 –
GENERAL OBLIGATION DEBT SERVICE
REQUIREMENTS ....................................... 29�TABLE 8
-TAXABLE ASSESSED VALUATIONS,
TAX RATES, DIRECT AND OVERLAPPING FUNDED DEBT PAYABLE FROM
ADVALOREM TAXES AND AUTHORIZED BUT UNISSUED BONDS OF OVERLAPPING
TAXING JURISDICTIONS. .......................... 30�
TABLE 9 -�INTEREST AND SINKING FUND BUDGET PROJECTION
.............................. 31�
TABLE 10 – AUTHORIZED GENERAL OBLIGATION BONDS
................................ 31�
CITY FINANCIAL INFORMATION ................. 32�TABLE 11 –
GENERAL FUND REVENUES AND
EXPENDITURES HISTORY ......................... 33�TABLE 12 -
MUNICIPAL SALES TAX HISTORY .. 34�TABLE 13 – FINANCIAL INDICATORS
............... 38�
LEGAL AND TAX MATTERS ........................... 38�LITIGATION
...................................................... 38�CLEAN AIR
ACT AMENDMENTS OF 1990 ......... 40�REGISTRATION AND QUALIFICATION
OF
OBLIGATIONS FOR SALE .......................... 41�TAX EXEMPTION
OF TAX-EXEMPT SERIES
2010A BONDS AND CERTIFICATES .......... 41�ADDITIONAL FEDERAL
INCOME TAX
CONSIDERATIONS RELATING TO THE TAX-EXEMPT SERIES 2010A BONDS AND
THE CERTIFICATES ......................................... 42�
TAXABLE SERIES 2010B BONDS ...................... 42�LEGAL
INVESTMENTS AND ELIGIBILITY TO
SECURE PUBLIC FUNDS IN TEXAS ........... 44�LEGAL OPINIONS AND
NO-LITIGATION
CERTIFICATE ........................................... 44�
CONTINUING DISCLOSURE ............................ 44�CONTINUING
DISCLOSURE OF INFORMATION ... 44�
OTHER INFORMATION ....................................
46�RATINGS
..........................................................
46�AUTHENTICITY OF FINANCIAL DATA AND OTHER
INFORMATION .........................................
46�VERIFICATION OF ARITHMETICAL AND
MATHEMATICAL COMPUTATIONS ........... 46�UNDERWRITING
............................................... 46�CO-FINANCIAL
ADVISORS ............................... 47�
FORWARD-LOOKING STATEMENTS .................. 47�
SCHEDULE I – SCHEDULE OF REFUNDED BONDS
APPENDICES General Information Regarding the City
................. A Excerpts from the FY 2008 Comprehensive
Annual Financial Report ................................... B
Form of Co-Bond Counsel Opinions ...................... C
The cover page hereof, this page, the appendices included herein
and any addenda, supplement or amendment hereto, are part of the
Official Statement.
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7
CITY OFFICIALS, STAFF AND CONSULTANTS
ELECTED OFFICIALS
City Council Term Expires OccupationTom Leppert June, 2011 2
Years, 9 Months Construction Mayor - Place 15 (Former Chairman and
CEO) (At Large)
Delia Jasso June, 2011 9 Months Small Business Owner
Councilmember - Place 1
Pauline Medrano June, 2011 4 Years, 9 Months Civic Leader
Councilmember - Place 2
Dave Neumann June, 2011 2 Years, 9 Months Small Business Owner
Councilmember - Place 3
Dwaine Caraway June, 2011 2 Years, 9 Months Civic Leader
Councilmember - Place 4
Vonciel Jones Hill June, 2011 2 Years, 9 Months Attorney
Councilmember - Place 5
Steve Salazar June, 2011 6 Years, 9 Months Attorney
Councilmember - Place 6
Carolyn Davis June, 2011 2 Years, 9 Months Civic Leader
Councilmember - Place 7
Tennell Atkins June, 2011 2 Years, 9 Months Entrepreneur
Councilmember - Place 8
Sheffield Kadane Jr. June, 2011 2 Years, 9 Months Investor and
Real Estate Broker Councilmember - Place 9
Jerry Allen June, 2011 2 Years, 9 Months Banker Councilmember -
Place 10
Linda Koop June, 2011 4 Years, 9 Months Civic Leader
Councilmember - Place 11
Ron Natinsky June, 2011 4 Years, 9 Months Businessman and
Entrepreneur Councilmember - Place 12
Ann Margolin June, 2011 9 Months Investor Councilmember - Place
13
Angela Hunt June, 2011 4 Years, 9 Months Attorney Councilmember
- Place 14
Length of Serviceas of
March 1, 2010
-
8
SELECTED ADMINISTRATIVE STAFF
CONSULTANTS AND ADVISORS
Auditors
...........................................................................................................................................................
Grant Thornton L.L.P. Dallas, Texas
Co-Bond Counsel
...........................................................................................................................................
Vinson & Elkins L.L.P. Dallas, Texas
West & Associates L.L.P. Dallas, Texas
Co-Financial Advisors
...............................................................................................................................
First Southwest Company Dallas, Texas
Estrada Hinojosa & Company, Inc. Dallas, Texas
For additional information regarding the City, please
contact:
Ms. Jeanne Chipperfield City of Dallas 1500 Marilla Street, 4DN
Dallas, Texas 75201 (214) 670-7804
or
Mr. Wayne Placide Mr. Steve Johnson First Southwest Company 325
N. St. Paul, Suite 800 Dallas, Texas 75201 (214) 953-4000
or
Mr. Noe Hinojosa, Jr. Mr. U.S. Williams Estrada Hinojosa &
Company, Inc. 1717 Main Street, 47th Floor Dallas, Texas 75201
(214) 658-1670
Length of Time in Tenure with CityThis Position as of of Dallas
as of
Name Position March 1, 2010 March 1, 2010
Mary K. Suhm City Manager 4 Years, 9 Months 31 Years, 10
MonthsRyan S. Evans First Assistant City Manager 3 Years, 5 Months
24 YearsA.C. Gonzalez(1) Assistant City Manager 3 Years, 4 Months
10 Years, 5 MonthsJill A Jordan Assistant City Manager 11 Years, 1
Month 18 Years, 5 MonthsForest Turner Assistant City Manager 7
Months 17 Years, 2 MonthsJeanne Chipperfield Chief Financial
Officer Newly Appointed 15 Years, 9 MonthsThomas P. Perkins, Jr
City Attorney 4 Years, 8 Months 10 Years, 8 MonthsDeborah A.
Watkins City Secretary 3 Years, 11 Months 35 Years, 9 MonthsCraig
Kinton City Auditor 3 Years, 5 Months 3 Years, 5 Months
(1) A.C. Gonzalez previously served as Assistant City Manager
from September 1988 until August 1995
-
9
SELECTED DATA FROM THE OFFICIAL STATEMENT
This data page was prepared to present the purchasers of the
Bonds and the Certificates (collectively, the “Obligations”)
information concerning the Obligations, the ad valorem tax revenues
pledged to pay the Obligations, the description of the revenue base
and other pertinent data, all as more fully described herein, and
is subject in all respects to the more complete information and
definitions contained or incorporated in this Official Statement.
The offering of the Obligations to potentialinvestors is made only
by means of this entire Official Statement. No person is authorized
to detach this data page from this Official Statement or to
otherwise use it without the entire Official Statement.
THE ISSUER ....................................... The City of
Dallas, Texas, is a political subdivision located in Dallas,
Denton, Collin and Rockwall Counties operating as a home-rule city
under the laws of the State of Texas and a charter approved by the
voters in 1907. The City operates under the City Council/Manager
form of government where the Mayor is elected for a four-year term
and fourteen City Councilmembers are each elected for two-year
terms. The Mayor’s term is limited to two consecutive terms and the
fourteen Councilmembers are limited to four consecutive terms. The
City Council formulates operating policy for the City while the
City Manager is the chief administrative and executive officer.
The City is among the three most populous cities in Texas and
among the ten most populous cities in the U.S. The City is
approximately 378 square miles in area (see Appendix A - “General
Information Regarding the City”).
THE BONDS ....................................... The Tax-Exempt
Series 2010A Bonds are being issued in the principal amount of
$196,615,00 and the Taxable Series 2010B Bonds are being issued in
the principal amount of $85,380,000 pursuant to the general laws of
the State of Texas, particularly Chapters 1331 and 1371 and in the
case of the Tax-Exempt Series 2010A Bonds, Chapter 1207 of the
Texas Government Code, as amended, and the Bond Ordinance passed by
the City Council of the City (see “The Obligations - Authority for
Issuance”).
THE CERTIFICATES .......................... The Certificates are
being issued in the principal amount of $21,575,000 pursuant to the
general laws of the State of Texas, particularly Subchapter C of
Chapter 271, Texas Local Government Code, as amended, and Chapter
1371, Texas Government Code, as amended, and the Certificate
Ordinance passed by the City Council of the City (see “The
Obligations – Authority for Issuance”).
SECURITY FOR THE OBLIGATIONS ... The Obligations constitute
direct obligations of the City, payable from a direct and
continuing ad valorem tax, within the limits prescribed by the law,
on all taxable property within the City in an amount sufficient to
provide for payment of principal and interest on all ad valorem tax
debt. Additionally, with respect to the Certificates, there is a
limited pledge of surplus net revenues of the City’s Municipal
Drainage Utility System in an amount not to exceed $1,000 (see “The
Obligations – Security for Obligations”).
OPTIONAL REDEMPTION ................................... The
Tax-Exempt Series 2010A Bonds are not subject to redemption prior
to maturity.
At the option of the City, the Taxable Series 2010B Bonds are
subject to make-whole redemption as described herein.
The Certificates are not subject to redemption prior to
maturity.
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10
EXTRAORDINARY OPTIONALREDEMPTION OF 2010B BONDS ........ The
City reserves the right, at its option, to redeem the Taxable
Series 2010B Bonds prior
to their stated maturities, upon the occurrence of an
“Extraordinary Event” from any source of available funds, as a
whole or in part, by lot, at the “Extraordinary Redemption Price”
all as set forth herein.
TAX EXEMPTION ............................... In the opinion of
Co-Bond Counsel, the interest on the Tax-Exempt Series 2010A Bonds
and the Certificates will be excludable from gross income for
federal income tax purposes under existing law and the Tax-Exempt
Series 2010A Bonds and the Certificates will not be private
activity bonds. See “Legal and Tax Matters - Tax Exemption of
Tax-Exempt Series 2010A Bonds and Certificates” for a discussion of
the opinions of Co-Bond Counsel, including a description of
alternative minimum tax consequences for corporations. (See
Appendix C - “Form of Co-Bond Counsel Opinions”). Interest on the
Taxable Series 2010B Bonds is not excludable from gross income for
federal income tax purposes. See “Legal and Tax Matters – Taxable
Series 2010B Bonds.”
USE OF PROCEEDS ............................ Proceeds from the
sale of the Bonds will be used to (i) fund various permanent public
improvements in the City, (ii) refund certain other general
obligation bonds, and (iii) pay the costs of issuance of the
Bonds.
Proceeds from the sale of the Certificates will be used to (i)
fund the purchase of various types of capital equipment, (ii)
construct police facilities in the Bexar Street redevelopment
corridor, and (iii) pay the costs of issuance of the
Certificates.
PAYMENT RECORD ........................... The City has never
defaulted in the payment of its debt.
BOOK-ENTRY-ONLY SYSTEM ........... The definitive Obligations
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 Obligations may be
acquired in denominations of $5,000 or integral multiples thereof.
No physical delivery of the Obligations will be made to the
beneficial owners thereof. Principal of and interest on the
Obligations will be payable by the Paying Agent/Registrar to Cede
& Co., which will make distribution of the amounts so paid to
the participating members of DTC for subsequent payment to the
beneficial owners of the Obligations thereof (see “The Obligations
- Book-Entry-Only System”).
PAYING AGENT/REGISTRAR ............. The initial Paying
Agent/Registrar is U.S. Bank National Association.
EXPECTED DELIVERY DATE ............. Expected delivery date is
on or about March 30, 2010.
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TABLE 1 – SELECTED ISSUER INDICES
(1) Source: North Central Texas Council of Governments. (2)
Source: Certified Tax Roll. (3) Represents general obligation debt,
excluding accrued interest and tax increment financing district
bonds, payable from ad valorem taxes. (4) Estimated. (5) Includes
the Obligations and excludes the Refunded Bonds. (6) Estimate.
Collection as of January 31, 2010.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
NetTaxable General
Fiscal Assessed Per Capita Obligation Net G.O. Ratio ofYear
Estimated Valuation Taxable (G.O.) Tax Debt Net G.O. % of
Ended City (TAV)(2) Assessed Tax Debt (3) Per Tax Debt Total
Tax9/30 Population(1) (000) Valuation (000) Capita to TAV
Collections2005 1,232,100 67,579,878$ 54,849$ 1,327,253$ 1,077$
1.96% 98.16%2006 1,260,950 70,843,802 56,183 1,423,817 1,129 2.01%
98.27%2007 1,280,500 76,124,191 59,449 1,668,943 1,303 2.19%
98.46%2008 1,300,350 84,526,934 65,003 1,898,228 1,460 (4) 2.25%
96.98%2009 1,306,350 90,477,932 69,260 2,000,870 1,532 2.21% 96.33%
(4)
2010 N/A 87,264,095 N/A 2,107,730 (5) N/A 2.42% 76.21% (6)
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THE OBLIGATIONS
AUTHORITY FOR ISSUANCE
The Bonds were authorized at elections held in the City on May
2, 1998 and November 7, 2006. The Bonds are being issued pursuant
to the general laws of the State of Texas, particularly Chapters
1331 and 1371 and in the case of the Tax-Exempt Series2010A Bonds,
Chapter 1207 of the Texas Government Code, as amended, the Bond
Ordinance passed by the City Council, and the City Charter.
The Certificates are being issued pursuant to the general laws
of the State of Texas, particularly Subchapter C of Chapter
271,Texas Local Government Code, as amended, and Chapter 1371,
Texas Government Code, as amended, and the Certificate Ordinance
passed by the City Council.
The Bond Ordinance and the Certificate Ordinance are
collectively referred to herein as the “Ordinance”.
REFUNDED BONDS AND ESCROW
The principal and interest due on the Refunded Bonds are to be
paid on the scheduled interest payment dates and the respective
redemption dates of such Refunded Bonds, from funds to be deposited
pursuant to a certain Escrow Agreement (the "Escrow Agreement")
between the City and U.S. Bank National Association (the "Escrow
Agent"). The Ordinance provides that from the proceeds of the sale
of the Tax-Exempt Series 2010A Bonds received from the
Underwriters, the City will deposit with the EscrowAgent the amount
necessary to accomplish the discharge and final payment of the
Refunded Bonds on their respective redemption dates. Such funds
will be held by the Escrow Agent in a special escrow account (the
"Escrow Fund") and used to purchase obligations of some or all of
the following types: (a) direct non-callable obligations of the
United States of America, includingobligations that are
unconditionally guaranteed by the United States of America, (b)
noncallable obligations of an agency or instrumentality of the
United States, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on
the date the governing body of the City adopts or approves the
proceedings authorizing the issuance of refunding bonds, are rated
as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (c) noncallable
obligations of a state or an agency or a county, municipality or
other political subdivision of a state that have been refunded and
that are rated as to investment quality by a nationally recognized
investment rating firm not less thanAAA or its equivalent (the
"Government Obligations"). Under the Escrow Agreement, the Escrow
Fund is irrevocably pledged to the payment of the principal of and
interest on the Refunded Bonds.
Grant Thornton LLP, a firm of independent public accountants,
will deliver to the City, on or before the settlement date of
theTax-Exempt Series 2010A Bonds, its verification report
indicating that it has verified, in accordance with attestation
standardsestablished by the American Institute of Certified Public
Accountants, the mathematical accuracy of (a) the mathematical
computations of the adequacy of the cash and the maturing principal
of and interest on the Government Obligations, to pay, whendue, the
maturing principal of, interest on and related call premium
requirements of the Refunded Bonds and (b) the
mathematicalcomputations of yield used by Bond Counsel to support
its opinion that interest on the Tax-Exempt Series 2010A Bonds will
be excluded from gross income for federal income tax purposes.
The verification performed by Grant Thornton LLP will be solely
based upon data, information and documents provided to Grant
Thornton LLP by the City and its representatives. Grant Thornton
LLP has restricted its procedures to recalculating the computations
provided by the City and its representatives and has not evaluated
or examined the assumptions or information usedin the
computations.
By the deposit of the Government Obligations and cash, if
necessary, with the Escrow Agent pursuant to the Escrow Agreement,
the City will have effected the defeasance of all of the Refunded
Bonds in accordance with the law. It is the opinion of Bond Counsel
that as a result of such defeasance and in reliance upon the report
of Grant Thornton L.L.P., the Refunded Bonds will beoutstanding
only for the purpose of receiving payments from the Government
Obligations and any cash held for such purpose by the Escrow Agent
and such Refunded Bonds will not be deemed as being outstanding
obligations of the City payable from taxes nor for the purpose of
applying any limitation on the issuance of debt.
SECURITY FOR OBLIGATIONS
All taxable property within the City is subject to a continuing
direct annual ad valorem tax levied by the City sufficient to
provide for the payment of principal and interest on the
Obligations, which tax must be levied within the limits prescribed
by law. TheCity operates under a home-rule charter as authorized by
Article XI, Section 5 of the Constitution of the State of Texas.
Pursuantto the Texas Constitution and the City’s home-rule charter,
the City’s ad valorem tax rate may not exceed $2.50 per $100
TaxableAssessed Valuation for all purposes, including payment of
debt service and general operating expenses.
The Bonds constitute direct obligations of the City payable from
a direct and continuing ad valorem tax levied, within the limits
prescribed by law, on all taxable property located within the
City.
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The Certificates constitute direct obligations of the City,
payable from a combination of (i) the levy and collection of a
direct and continuing ad valorem tax, within the limits prescribed
by law, on all taxable property within the City, and (ii) a limited
pledge of surplus net revenues of the City’s Municipal Drainage
Utility System in an amount not to exceed $1,000.
BUILD AMERICA BONDS
In February 2009, as part of the Recovery Act, Congress added
Sections 54AA and 6431 to the Internal Revenue Code (the “Tax
Code”), which permit state and or local governments to obtain
certain tax advantages when issuing taxable obligations that
meetcertain requirements of the Tax Code and the related
regulations promulgated by the U.S. Treasury (“Treasury
Regulations”). Such obligations are referred to as Build America
Bonds. A Build America Bond is a qualified bond under Section
54AA(g) of the Tax Code (a “Qualified Build America Bond”) if it
meets certain requirements of the Tax Code and the related Treasury
Regulations and the issuer has made an irrevocable election to have
the special rule for qualified bonds apply. Interest on Qualified
Build America Bonds is not excluded from gross income for federal
income tax purposes, and owners of Qualified Build America Bonds
will not receive any tax credits as a result of ownership of such
Qualified Build America Bonds when an issuer has elected to receive
the Direct Interest Subsidy Payment, as defined below.
INTEREST SUBSIDY PAYMENT
Under Section 6431 of the Tax Code, an issuer of a Qualified
Build America Bond may apply to receive payments (the “Direct
Interest Subsidy Payment”) directly from the Secretary of the U.S.
Treasury (the “Secretary”). The amount of a Direct InterestSubsidy
Payment is set in Section 6431 of the Tax Code at 35% of the
corresponding interest payable on the related Qualified Build
America Bond. To receive a Direct Interest Subsidy Payment, under
currently existing procedures, the issuer will have tofile a tax
form (now designated as Form 8038 CP) between 90 and 45 days prior
to the corresponding bond interest payment date. Depending on the
timing of the filing and other factors, the Direct Interest Subsidy
Payment may be received before or after thecorresponding interest
payment date.
DESIGNATION OF THE TAXABLE SERIES 2010B BONDS AS QUALIFIED BUILD
AMERICA BONDS
Interest on the Taxable Series 2010B Bonds will be includable in
gross income of the holders thereof for federal income tax purposes
and the holders of the Taxable Series 2010B Bonds will not be
entitled to any tax credits as a result of either ownershipof the
Taxable Series 2010B Bonds or receipt of any interest payments on
the Taxable Series 2010B Bonds. Holders of the Taxable Series 2010B
Bonds should consult their tax advisors with respect to the
inclusion of interest on the Taxable Series 2010B Bonds in gross
income for federal income tax purposes. The City intends to apply
for a Direct Interest Subsidy Payment from the Secretary under the
“Build America Program” pursuant to Section 6431 of the Tax Code.
No assurances are provided that the City will receive the Direct
Interest Subsidy Payment regarding the Taxable Series 2010B Bonds.
The amount of any Direct Interest Subsidy Payment is subject to
legislative changes by Congress. Direct Interest Subsidy Payments
will only be paid if the Taxable Series 2010B Bonds are Qualified
Build America Bonds. For the Taxable Series 2010B Bonds to be and
remain Qualified Build America Bonds, the City must comply with
certain covenants and the City must establish facts and
expectations with respect to the Taxable Series 2010B Bonds, the
use and investment of proceeds thereof and the use of property
financed thereby. There are currently no procedures for requesting
a Direct Interest Payment after the 45th day prior to an interest
payment date; therefore, if the City fails to file the necessary
tax return in a timely fashion, it is possible that the City will
never receive such Direct Interest Subsidy Payment. Also, Direct
Interest Subsidy Payments are subject to offset against certain
amounts thatmay, for unrelated reasons, be owed by the City to an
agency of the United States of America.
NO REDEMPTION OF THE TAX-EXEMPT SERIES 2010A BONDS
The Tax-Exempt Series 2010A Bonds are not subject to redemption
prior to maturity. MAKE-WHOLE REDEMPTION OF THE TAXABLE SERIES
2010B BONDS
The Taxable Series 2010B Bonds are subject to redemption prior
to maturity by written direction of the City, in whole or in part,
on any day in principal amounts equal to $5,000 or any integral
multiple thereof, at the redemption price (the “Make-Whole
Redemption Price”) equal to the greater of: (1) 100% of the
principal amount of the Taxable Series 2010B Bonds to be redeemed;
and (2) the sum of the present value of the remaining scheduled
payments of principal and interest to the maturity date of the
Taxable Series 2010B Bonds to be redeemed, not including any
portion of those payments of interest accrued and unpaid as of
thedate on which the Taxable Series 2010B Bonds are to be redeemed,
discounted to the date on which the Taxable Series 2010B Bonds are
to be redeemed on a semi-annual basis, assuming a 360-day year
consisting of twelve 30 day months, at the Treasury Rate, plus
twenty (20) basis points; plus, in each case, accrued interest on
the Taxable Series 2010B Bonds to be redeemed to theredemption
date.
At the request of the Paying Agent/Registrar, the redemption
price of the Taxable Series 2010B Bonds to be redeemed at the
option of the City will be determined by an independent accounting
firm, investment banking firm or financial advisor retained by the
City at the City’s expense to calculate such redemption price. The
Paying Agent/Registrar and the City may conclusively rely on the
determination of such redemption price by such independent
accounting firm, investment banking firm or financial advisorand
will not be liable for such reliance.
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The “Treasury Rate” is, as of any redemption date, the yield to
maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519)that
has become publicly available at least two (2) Business Days prior
to the redemption date (excluding inflation-indexed securities)
(or, if such Statistical Release is no longer published, any
publicly available source of similar market data), most nearly
equal to the period from the redemption date to the maturity date
of the Taxable Series 2010B Bonds to be redeemed; provided,
however, that if the period from the redemption date to such
maturity date is less than one (1) year, the weekly average yield
onactually traded United States Treasury securities adjusted to a
constant maturity of one (1) year will be used.
EXTRAORDINARY OPTIONAL REDEMPTION OF TAXABLE SERIES 2010B
BONDS
The Taxable Series 2010B Bonds are subject to redemption prior
to their maturity at the option of the City, in whole or in
partupon the occurrence of an Extraordinary Event (as defined
below), at the “Extraordinary Redemption Price” (defined below).
TheExtraordinary Redemption Price is equal to the greater of: (1)
100% of the principal amount of the Taxable Series 2010B Bonds tobe
redeemed; and (2) the sum of the present value of the remaining
scheduled payments of principal and interest to the maturitydate of
the Taxable Series 2010B Bonds to be redeemed, not including any
portion of those payments of interest accrued and unpaid as of the
date on which the Taxable Series 2010B Bonds are to be redeemed,
discounted to the date on which the Taxable Series 2010B Bonds are
to be redeemed on a semi-annual basis, assuming a 360-day year
consisting of twelve 30 day months, at the “Treasury Rate”, plus
one hundred (100) basis points; plus, in each case, accrued
interest on the Taxable Series 2010B Bondsto be redeemed to the
redemption date. An “Extraordinary Event” will have occurred if the
City determines that a material adverse change has occurred to
section 54AA or section 6431 of the Code (as such sections were
added by Section 1531 of the American Recovery and Reinvestment Act
of 2009, pertaining to “Build America Bonds”) or there is any
guidance published by the Internal Revenue Service or the
Department of the Treasury with respect to such Sections or any
other determination by the Internal Revenue Service or the
Department of the Treasury, which determination is not the result
of an act or omission by the City to satisfy the requirements to
receive the Direct Interest Subsidy Payments, pursuant to which the
Direct Interest SubsidyPayments applicable to such Taxable Series
2010B Bonds are reduced or eliminated.
At the request of the Paying Agent/Registrar, the redemption
price of the Taxable Series 2010B Bonds to be redeemed at the
option of the City will be determined by an independent accounting
firm, investment banking firm or financial advisor retained by the
City at the City’s expense to calculate such redemption price. The
Paying Agent/Registrar and the City may conclusively rely on the
determination of such redemption price by such independent
accounting firm, investment banking firm or financial advisorand
will not be liable for such reliance.
The “Treasury Rate” is, as of any redemption date, the yield to
maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519)that
has become publicly available at least two (2) Business Days prior
to the redemption date (excluding inflation-indexed securities)
(or, if such Statistical Release is no longer published, any
publicly available source of similar market data), most nearly
equal to the period from the redemption date to the maturity date
of the Taxable Series 2010B Bonds to be redeemed; provided,
however, that if the period from the redemption date to such
maturity date is less than one (1) year, the weekly average yield
onactually traded United States Treasury securities adjusted to a
constant maturity of one (1) year will be used.
NO REDEMPTION OF THE CERTIFICATES
The Certificates are not subject to redemption prior to
maturity.
NOTICE OF REDEMPTION
Not less than 30 days prior to a redemption date for the Taxable
Series 2010B 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 Taxable Series 2010B Bonds to be redeemed,
in whole or in part, at the address of the registered owner
appearing on the registration books of the Paying Agent/Registrar
at the close of business on the business day next preceding the
date of mailing such notice. ANY NOTICE SO MAILED SHALL BE
CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE
REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN,
THE TAXABLE SERIES 2010B BONDS CALLED FOR REDEMPTION SHALL BECOME
DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND
NOTWITHSTANDING THAT ANY TAXABLE SERIES 2010B BOND OR PORTION
THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH
TAXABLE SERIES 2010B BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE.
In the Bond Ordinance, the City reserves the right in the case of
an optional redemption (including an extraordinary optional
redemption) to give notice of its election or direction to redeem
Taxable Series 2010B Bondsconditioned upon the occurrence of
subsequent events. Such notice may state (i) that the redemption is
conditioned upon the deposit of moneys and/or authorized
securities, in an amount equal to the amount necessary to effect
the redemption, with the Paying Agent/Registrar, or such other
entity as may be authorized by law, no later than the redemption
date or (ii) the City retains the right to rescind such notice at
any time prior to the scheduled redemption date if the City
delivers a certificate of the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption
notice, and such notice and redemption shall be of no effect if
such moneys and/or authorized securities are not so deposited or if
the notice is rescinded. The Paying
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Agent/Registrar shall give prompt notice of any such rescission
of a conditional notice of redemption to the affected owners. Any
Taxable Series 2010B Bonds subject to conditional redemption where
redemption has been rescinded shall remain Outstanding, and the
rescission shall not constitute an event of default. Further, in
the case of a conditional redemption, the failure of the City to
make moneys and/or authorized securities available in part or in
whole on or before the redemption date shall not constitute an
event of default.
The City may, without consent of or notice to any owners, from
time to time and at any time, amend the Ordinances in any manner
not detrimental to the interests of the owners, including the
curing of any ambiguity, inconsistency, or formal defect oromission
herein. In addition, the City may, with the written consent of the
owners of the Obligations holding a majority in aggregate principal
amount of the Obligations then outstanding, amend, add to, or
rescind any of the provisions of the Ordinances; provided that,
without the consent of all owners of outstanding Obligations, no
such amendment, addition, or rescission shall (i) extend the time
or times of payment of the principal of, premium, if any, and
interest on the Obligations, reduce the principalamount thereof,
the redemption price, or the rate of interest thereon, or in any
other way modify the terms of payment of the principal of, or
interest on the Obligations, (ii) give any preference to any
Obligation over any other Obligation, or (iii) reduce the aggregate
principal amount of Obligations required to be held by owners for
consent to any such amendment, addition, or rescission.
BOOK-ENTRY-ONLY SYSTEM
This section describes how ownership of the Obligations are to
be transferred and how the principal of, premium, if any, and
interest on the Obligations are to be paid to and credited by The
Depository Trust Company, New York, New York (“DTC”), while the
Obligations are registered in its nominee name. The information in
this section concerning DTC and the Book-Entry-Only System has been
provided by DTC for use in disclosure documents such as this
Official Statement. The City believes the source ofsuch information
to be reliable, but takes no responsibility for the accuracy or
completeness thereof.
The City cannot and does not give any assurance that (1) DTC
will distribute payments of debt service on the Obligations, or
redemption or other notices, to DTC Participants, (2) DTC
Participants or others will distribute debt service payments paid
to DTC or its nominee (as the registered owner of the Obligations),
or redemption or other notices, to the Beneficial Owners, or
thatthey will do so on a timely basis, or (3) DTC will serve and
act in the manner described in this Official Statement. The current
rules applicable to DTC are on file with the Securities and
Exchange Commission, and the current procedures of DTC to be
followed in dealing with DTC Participants are on file with DTC.
DTC will act as securities depository for the Obligations. The
Obligations will be issued as fully-registered securities
registered in the name of Cede & Co. (DTC’s partnership
nominee) or such other name as may be requested by an authorized
representative of DTC. One fully-registered Bond certificate for
each maturity of the Obligations will be issued, in the aggregate
principal amountof such maturity, and will be deposited with
DTC.
DTC, the world’s largest depository, is a limited-purpose trust
company organized under the New York Banking Law, a “banking
organization” within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a “clearing corporation”
within the meaning of the New York Uniform Commercial Code, and a
“clearing agency” registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC holds and provides
asset servicing for over 2 million issues of U.S. and non-U.S.
equity issues, corporate and municipal debt issues, and money
market instruments from over 85 countries that DTC’s participants
(“Direct Participants”) deposit with DTC. DTC also facilitates the
post-trade settlement amongDirect Participants of sales and other
securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between Direct
Participants’ accounts. This eliminates the need for physical
movement of Bonds certificates. Direct Participants include both
U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations.
DTC is a wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number
of Direct Participants of DTC and Members of the National
Securities Clearing Corporation, Government Securities Clearing
Corporation, MBS Clearing Corporation, and Emerging Markets
Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of
DTCC), as well as by the New York Stock Exchange, Inc., the
American Stock Exchange LLC, and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available
to others such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, and clearing corporations that
clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (“Indirect
Participants”). DTC has Standard & Poor’s highest rating: AAA.
The DTC Rules applicable to its Participants are on file with
theSecurities and Exchange Commission. More information about DTC
can be found at www.dtcc.com.
Purchases of Obligations under the DTC system must be made by or
through Direct Participants, which will receive a credit for the
Obligations on DTC’s records. The ownership interest of each actual
purchaser of each Obligation (“Beneficial Owner”) is inturn to be
recorded on the Direct and Indirect Participants’ records.
Beneficial Owners will not receive written confirmation fromDTC of
their purchase. Beneficial Owners are, however, 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 interests in the
Obligations are to be accomplished by entries made onthe books of
Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates
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representing their ownership interests in the Obligations,
except in the event that use of the book-entry system for the
Obligationsis discontinued.
To facilitate subsequent transfers, all Obligations deposited by
Direct Participants with DTC are registered in the name of DTC’s
partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of
Obligations with DTC and their registration in the name of Cede
& Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Obligations; DTC’s records reflect only the identity
of the Direct Participants to whose accounts such Obligations are
credited, which may or may not be the Beneficial Owners. The Direct
and Indirect 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. Beneficial Owners of Obligations may wish totake certain
steps to augment the transmission to them of notices of significant
events with respect to the Obligations, such asredemptions,
tenders, defaults, and proposed amendments to the Obligation
documents. For example, Beneficial Owners of Obligations may wish
to ascertain that the nominee holding the Obligations for their
benefit has agreed to obtain and transmit notices to Beneficial
Owners. In the alternative, Beneficial Owners may wish to provide
their names and addresses to the registrar and request that copies
of notices be provided directly to them.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will
consent or vote with respect to Obligations unless authorized by a
Direct Participant in accordance with DTC’s Procedures. Under its
usual procedures, DTC mails an Omnibus Proxy to the City as soon as
possible after the record date. The Omnibus Proxy assigns Cede
& Co.’s consenting or voting rights to those Direct
Participants to whose accounts the Obligations are credited on the
record date (identified in a listing attached to the
OmnibusProxy).
Principal and interest payments on the Obligations will be made
to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC’s practice is to credit
Direct Participants’ accounts upon DTC’s receipt of funds and
corresponding detail information from the City or the Paying
Agent/Registrar, on payable date in accordance with their
respective holdings shown on DTC’s records. 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 nor its nominee, 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 redemption proceeds, distributions, and dividend
payments to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the
responsibility of the City or the Paying Agent/Registrar,
disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
Use of Certain Terms in Other Sections of this Official
Statement. In reading this Official Statement it should be
understood that while the Obligations are in the Book-Entry-Only
System, references in other sections of this Official Statement to
registered owners should be read to include the person for which
the Participant acquires an interest in the Obligations, 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 concerning DTC and the Book-Entry-Only System has
been obtained from DTC and is not guaranteed as to accuracy or
completeness by, and is not to be construed as a representation by
the City or the Underwriters.
Effect of Termination of Book-Entry-Only System. In the event
that the Book-Entry-Only System is discontinued by DTC or the use
of the Book-Entry-Only System is discontinued by the City, printed
certificates will be issued to the holders and the Obligations will
be subject to transfer, exchange and registration provisions as set
forth in the Ordinance and summarized under“The Obligations -
Transfer, Exchange and Registration” below.
PAYING AGENT/REGISTRAR
The initial Paying Agent/Registrar is U.S. Bank National
Association. In the Ordinance, the City retains the right to
replace the Paying Agent/Registrar. The City covenants to maintain
and provide a Paying Agent/Registrar at all times until the
Obligationsare duly paid, and any successor Paying Agent/Registrar
shall be a bank, trust company, financial institution or other
entity duly qualified and legally authorized to serve as and
perform the duties and services of Paying Agent/Registrar for the
Obligations.Upon any change in the Paying Agent/Registrar for the
Obligations, the City agrees to promptly cause a written notice
thereof tobe sent to each registered owner of the Obligations by
United States mail, first class, postage prepaid, which notice
shall also give the name and address of the new Paying
Agent/Registrar.
In the event the Book-Entry-Only System should be discontinued,
principal of the Obligations will be payable to the registered
owner at maturity or prior redemption upon presentation at the
Dallas, Texas corporate trust office of the Paying
Agent/Registrar
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(the “Designated Trust Office”). Interest on the Obligations
will be payable by check, dated as of the interest payment date,
and mailed by the Paying Agent/Registrar to registered owners as
shown on the records of the Paying Agent/Registrar on the Record
Date (see “The Obligations - Record Date for Interest Payment”
herein), or by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. If the date for the payment of the principal of
or interest on the Obligations shall be a Saturday, Sunday, legal
holiday, or day on which banking institutions in the city where the
Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be
thenext succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized
toclose; and payment on such date shall have the same force and
effect as if made on the original date payment was due.
TRANSFER, EXCHANGE AND REGISTRATION
In the event the Book-Entry-Only System should be discontinued,
the Obligations 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
andsuch 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. The Obligations may be
assigned by the execution of an assignment form on the respective
Obligations or by other instrument of transfer and
assignmentacceptable to the Paying Agent/Registrar. New Obligations
will be delivered by the Paying Agent/Registrar, in lieu of the
Obligations 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 Obligations issued in
anexchange or transfer of Obligations will be delivered to the
registered owner or assignee of the registered owner in not more
thanthree business days after the receipt of the Obligations 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 a form satisfactory to the Paying
Agent/Registrar.New Obligations registered and delivered in an
exchange or transfer shall be in any integral multiple of $5,000
for any one maturity and series for a like aggregate principal
amount and series as the Obligations surrendered for exchange or
transfer. See “The Obligations - Book-Entry-Only System” herein for
a description of the system to be utilized initially in regard to
ownership and transferability of the Obligations.
LIMITATION ON TRANSFER OF BONDS CALLED FOR REDEMPTION
Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Taxable Series 2010B 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 Taxable Series 2010B Bond.
RECORD DATE FOR INTEREST PAYMENT
The record date (“Record Date”) for the interest payable on any
interest payment date means the close of business on the last
business day of the preceding month.
In the event of a non-payment of interest on the Obligations on
a scheduled payment date, and for 30 days thereafter, a new record
date for such interest payment (a “Special Record Date”) for the
Bonds or the Certificates, as the case may be, 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 owner of an Obligation
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.
OBLIGATION HOLDERS’ REMEDIES
Under State law, there is no right to the acceleration of
maturity of the Obligations upon the failure of the City to observe
any covenant under the Ordinance. Although a registered owner could
presumably obtain a judgment against the City if a default occurred
in any payment of the principal of, or interest on, any such
Obligations, such judgment could not be satisfied by execution
against any property of the City. Such registered owner's only
practical remedy, if a default occurs, is a mandamus or mandatory
injunction proceeding to compel the City to assess and collect an
annual ad valorem tax sufficient to pay principal of,and interest
on, the Obligations as they become due. The enforcement of any such
remedy may be difficult and time consuming and a registered owner
could be required to enforce such remedy on a periodic basis.
On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City
of Mexia, 197 S.W.3d 325 (Tex. 2006) (“Tooke”) that a waiver of
sovereign immunity must be provided for by statute in “clear and
unambiguous” language. In so ruling, the Court declared
thatstatutory language such as “sue and be sued”, in and of itself,
did not constitute a clear and unambiguous waiver of sovereign
immunity. Because it is not clear that the Texas Legislature has
effectively waived the City’s immunity from suit for money damages,
a registered owner may not be able to bring such a suit against the
City for breach of the Obligations or the Ordinance. In Tooke, the
Court noted the enactment in 2005 of sections 271.151-.160, Texas
Local Government Code (the “Local Government Immunity Waiver Act”),
which, according to the Court, waives “immunity from suit for
contract claims against most local governmental entities in certain
circumstances.” The Local Government Immunity Waiver Act covers
cities and relates to
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contracts entered into by cities for providing goods or services
to cities. The City is not aware of any Texas court construing the
Local Government Immunity Waiver Act in the context of whether
contractual undertakings of local governments that relate to their
borrowing powers are contracts covered by the Local Government
Immunity Waiver Act. As noted above, the Ordinance provides that
holders of Obligations may exercise the remedy of mandamus to
enforce the obligations of the City under the Ordinance. Neither
the remedy of mandamus nor any other type of injunctive relief was
at issue in Tooke, and it is unclear whether Tooke will be
construed to have any effect with respect to the exercise of
mandamus, as such remedy has been interpretedby Texas courts. In
general, Texas courts have held that a writ of mandamus may be
issued to require public officials to performministerial acts that
clearly pertain to their duties. Texas courts have held that a
ministerial act is defined as a legal duty that is prescribed and
defined with a precision and certainty that leaves nothing to the
exercise of discretion or judgment, though mandamus is not
available to enforce purely contractual duties. However, mandamus
may be used to require a public officer to perform legally-imposed
ministerial duties necessary for the performance of a valid
contract to which the State or a political subdivision of the State
is a party (including the payment of monies due under a
contract).
Chapter 1371, Texas Government Code (“Chapter 1371”), which
pertains to the issuance of public securities by issuers such as
theCity, permits the City to waive sovereign immunity in the
proceedings authorizing its bonds, but in connection with the
issuanceof the Obligations, the City has not waived sovereign
immunity in the manner provided by Chapter 1371.
The Ordinance does not provide for the appointment of a trustee
to represent the interest of the holders of Obligations upon
anyfailure of the City to perform in accordance with the terms of
the Ordinance, or upon any other condition. Furthermore, the City
is eligible to seek relief from its creditors under Chapter 9 of
the U.S. Bankruptcy Code (“Chapter 9”). Although Chapter 9 provides
for the recognition of a security interest represented by a
specifically pledged source of revenues, the pledge of taxes in
support of a general obligation of a bankrupt entity is not
specifically recognized as a security interest under Chapter 9.
Chapter 9 alsoincludes an automatic stay provision that would
prohibit, without Bankruptcy Court approval, the prosecution of any
other legalaction by creditors or holders of obligations of an
entity which has sought protection under Chapter 9. Therefore,
should the City avail itself of Chapter 9 protection from
creditors, the ability to enforce would be subject to the approval
of the Bankruptcy Court(which could require that the action be
heard in Bankruptcy Court instead of other federal or state court);
and the Bankruptcy Code provides for broad discretionary powers of
a Bankruptcy Court in administering any proceeding brought before
it. The opinions of Co-Bond Counsel will note that all opinions
relative to the enforceability of the Ordinance and the Obligations
are qualifiedwith respect to the customary rights of debtors
relative to their creditors.
USE OF PROCEEDS
Proceeds from the sale of the Bonds will be used to (i) fund
various permanent public improvements in the City, (ii) refund
certain other general obligation bonds (the “Refunded Bonds”), and
(iii) pay the costs of issuance of the Bonds.
Proceeds from the sale of the Certificates will be used to (i)
fund the purchase of various types of capital equipment, (ii)
construct police facilities in the Bexar Street redevelopment
corridor, and (iii) pay the costs of issuance of the
Certificates.
DEFEASANCE
The Ordinance provides that the City may discharge its
obligations to the registered owners of any or all of the
Obligations to pay principal, interest and maturity or redemption
price, as applicable, thereon in any manner permitted by law. Under
current Texas law, such discharge may be accomplished either (i) by
depositing a sum of money equal to the principal of, premium, if
any, andall interest to accrue on the Obligations to maturity or
redemption or (ii) by depositing with the Paying Agent/Registrar or
other lawfully authorized entity, amounts sufficient to provide for
the payment and/or redemption of the Obligations; provided that
suchdeposits may be invested and reinvested only in (a) direct
non-callable obligations of the United States of America, including
obligations that are unconditionally guaranteed by the United
States of America, (b) non-callable obligations of an agency or
instrumentality of the United States, including obligations that
are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date the governing body of the
City adopts or approves the proceedings authorizing the issuance of
refunding bonds, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its
equivalent and (c) non-callable obligations of a state or an agency
or a county, municipality or other political subdivision of a state
that have been refunded and that are rated as to investment quality
by a nationally recognized investment rating firm not less thanAAA
or its equivalent. The foregoing obligations may be in book-entry
form, and shall mature and/or bear interest payable at such times
and in such amounts as will be sufficient to provide for the
scheduled payment and/or redemption of the Obligations.If any
Taxable Series 2010B Bonds are to be redeemed prior to their
respective dates of maturity, provision must have been madefor
giving notice of redemption as provided in the Bond Ordinance.
Under current state law, after such deposit as described above,
such Obligations shall no longer be regarded to be outstanding or
unpaid. After firm banking and financial arrangements for the
discharge and final payment or redemption of the Obligations
havebeen made as described above, all rights of the City to
initiate proceedings to call the Taxable Series 2010B Bonds for
redemption or take any other action amending the terms of the
Obligations are extinguished; provided, however, that the right to
call the Taxable Series 2010B Bonds for redemption is not
extinguished if the City: (i) in the proceedings providing for the
firm bankingand financial arrangements, expressly reserves the
right to call the Taxable Series 2010B Bonds for redemption; (ii)
gives notice of the reservation of that right to the owners of the
Taxable Series 2010B Bonds immediately following the making of the
firm
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banking and financial arrangements; and (iii) directs that
notice of the reservation be included in any redemption notices
that it authorizes.
SOURCES AND USES OF FUNDS
The following is an estimated list of sources and uses of
funds:
*Includes underwriters discount
Sources
Principal Amount of the Bonds 281,995,000Principal Amount of the
Certificates 21,575,000Net Reoffering Premium 32,031,632Transfers
from Prior Issue Debt Service Funds 4,143,628Interest Earnings
742,790Total Sources of Funds 340,488,050$
Uses
Bond ProceedsTrinity River Corridor Project 5,700,000$ Flood
Protection & Strom Drainage Improvements 42,723,000 Park and
Recreation Facilities 52,967,000 Library Facilities 2,900,000
Cultural Arts Facilities 1,400,000 City Hall, City Service and City
Maintenance Facilities 899,000 Economic Development in the Southern
Area of the City and in other 13,965,000
areas of the City in connection with transit-oriented
developmentLand Acquisition in the Cadillac Heights area for future
location of city facilities 1,573,000 Court Facilities 6,753,000
Escrow Fund 186,324,836 315,204,836$
Certificates of Obligation ProceedsCapital Equipment and Police
Facilities 22,937,221$
Deposit to Interest and S inking Fund 2,722 Estimated Costs of
Issuance* 2,343,271 Total Uses of Funds 340,488,050$
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CITY AD VALOREM TAX INFORMATION
STATE OF TEXAS TAX CODE
TAXABLE PROPERTY AND EXEMPTIONS . . . Reference is made to the
Tax Code, Title I, Vernon’s Texas Codes Annotated (the “Property
Tax Code”), for identification of property subject to taxation;
property exempt or which may be exempted from taxation, if claimed;
the appraisal of property for ad valorem taxation purposes; and,
the procedures and limitations applicable to the levy and
collection of ad valorem taxes. Excluding agricultural and
open-space land which may be taxed on the basis of productive
capacity, the Tax Code requires property to be appraised at 100% of
market value and prohibits application of any assessment
ratios.
The value of property is assessed for purposes of taxation as of
January 1 of each year (except for business inventory which maybe,
at the option of the taxpayer, assessed as of September 1). The
appraisal of taxable property within the City is the responsibility
of the central appraisal districts of Dallas, Collin, Denton, and
Rockwall counties with respect to City propertylocated within such
counties, county-wide agencies created under the Property Tax Code
for that purpose. Each central appraisaldistrict is required to
review the value of property within the appraisal district at least
every three years; however, the City may require annual review at
its own expense. In practice, each appraisal district reappraises
property within its jurisdiction on arotating basis such that all
property is reappraised once every three years. The value placed
upon property within the each central appraisal district is subject
to review by an Appraisal Review Board consisting of members
appointed by the Board of Directors ofthe appraisal district. The
City is entitled to challenge the determination of appraised value
of any category of property within the City by petition filed with
the applicable Appraisal Review Board. Taxpayers may submit
individual properties to the AppraisalReview Board for valuation
review and equalization; taxpayers may appeal the Appraisal Review
Board’s decisions to a state district court.
The appraised value of a residence homestead for a tax year may
not exceed the lesser of (1) the most recent market value of
theresidence homestead as determined by the appraisal entity or (2)
110 percent of the appraised value of the residence homestead for
the preceding tax year plus the market value of all new
improvements.
Article VIII of the State Constitution (“Article VIII”) and
State law provide for certain exemptions from property taxes, the
valuation of agricultural and open-space lands at productivity
value, and the exemption of certain personal property from ad
valorem taxation.
Under Section 1-b, Article VIII, and State law, the governing
body of a political subdivision, at its option, may grant: (1)
anexemption of not less than $3,000 of the market value of the
residence homestead of persons 65 years of age or older and the
disabled from all ad valorem taxes thereafter levied by the
political subdivision; (2) an exemption of up to 20% of the market
value of residence homesteads; minimum exemption is $5,000. In the
case of residence homestead exemptions granted under Section 1-b,
Article VIII, ad valorem taxes may continue to be levied against
the value of homesteads exempted where ad valoremtaxes have
previously been pledged for the payment of debt if cessation of the
levy would impair the obligation of the contract by which the debt
was created. Homeowners who turn 65 during a tax year qualify
immediately for the over-65 homestead exemption.
State law and Section 2, Article VIII, mandate an additional
property tax exemption for disabled veterans or the surviving
spouse or children of a deceased veteran who died while on active
duty in the armed forces; the exemption applies to either real or
personal property with the maximum amount of assessed valuation
exempted ranging from $5,000 to $12,000 provided, however, that
beginning in the 2009 tax year, a disabled veteran who receives
from the Unites States Department of Veterans Affairs or
itssuccessor 100% disability compensation due to a
service-connected disability and a rating of 100% disabled or of
individual unemployability is entitled to an exemption from
taxation of the total appraised value of the veteran’s residence
homestead.
Article VIII provides that eligible owners of both agricultural
land (Section l-d) and open-space land (Section l-d-l), including
open-space land devoted to farm or ranch purposes or open-space
land devoted to timber production, may elect to have such property
appraised for property taxation on the basis of its productive
capacity. The same land may not be qualified under bothSection 1-d
and l-d-l.
Section 1-j, Article VIII, provides for “freeport property” to
be exempted from ad valorem taxation unless the governing body of a
taxing entity took action prior to January 1, 1990, to tax such
property. Freeport property is defined as goods detained in Texas
for 175 days or less for the purpose of assembly, storage,
manufacturing, processing or fabrication. Decisions to exempt
freeportproperty are not subject to reversal. In addition, under
Section 11.253 of the Texas Tax Code, “Goods-in-transit” are exempt
fromtaxation unless a taxing unit opts out of the exemption.
Goods-in-transit are defined as tangible personal property that:
(i) isacquired in or imported into the state to be forwarded to
another location in the state or outside the state; (ii) is
detained at a location in the state in which the owner of the
property does not have a direct or indirect ownership interest for
assembling, storing, manufacturing, processing, or fabricating
purposes by the person who acquired or imported the property; (iii)
is transported to another location in the state or outside the
state not later than 175 days after the date the person acquired
theproperty in or imported the property into the state; and (iv)
does not include oil, natural gas, petroleum products, aircraft,
dealer's motor vehicle inventory, dealer's vessel and outboard
motor inventory, dealer's heavy equipment inventory, or retail
manufacturedhousing inventory. On November 12, 2007, the City
Council held a public hearing to receive comments regarding whether
goods-
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in-transit in warehouses within the City limits should remain
subject to taxation by the City. On November 28, 2007, the City
Council approved an ordinance establishing that goods-in-transit
within the City limits would remain subject to taxation.
All real property and certain personal property is taxable
property unless exempt by law. With the exception of
transportation,insurance and savings and loan intangibles,
intangible personal property is not taxable property. Nonbusiness
personal property,such as automobiles or light trucks, is exempt
from ad valorem taxation unless the governing body of a political
subdivision elects to tax this property. State law additionally
provides for one motor vehicle owned by an individual and used in
the course of the owner's occupation or profession and also for
personal activities of the owner to be exempted from ad valorem
taxation.
Article VIII, Section l-1, provides for the exemption from ad
valorem taxation of certain property used to control the pollution
of air, water or land. A person is entitled to an exemption from
taxation of all or part of real and personal property that the
personowns and that is used wholly or partly as a facility, device
or method for the control of air, water or land pollution.
Under Section 11.24 of the Property Tax Code, the governing body
of a taxing unit may exempt from taxation part or all of the
assessed value of a structure or archeological site and the land
necessary for access to and use of the structure or archeological
site, if the structure or archeological site is: (1) designated as
a Recorded Texas Historic Landmark under Chapter 442, Texas
Government Code, or a state archeological landmark under Chapter
191, Texas Natural Resources Code, by the Texas Historical
Commission; or (2) designated as a historically or archeologically
significant site in need of tax relief to encourage its
preservation pursuant to an ordinance or other law adopted by the
governing body of the unit.
The City and the other taxing units within its territory may
agree to jointly create Tax Increment Financing Zones, under which
all or a portion of the taxes on increased property values (as
determined by the participating taxing units) in the Zone are
dedicated to financing public improvements within the Zone. The
City also may enter into tax abatement agreements to encourage
economic development. Under the agreements, a property owner agrees
to construct certain improvements on their property. The City in
turn agrees not to levy a tax on all or part of the increased value
attributable to the improvements until the expiration of
theagreement. The abatement agreement could last for a period of up
to 10 years.
ADDITIONAL HOMESTEAD EXEMPTION FOR ELDERLY AND DISABLED . . .
Under Section 1-b, Article VIII of the Texas Constitution, a
county, city, town or junior college district may establish an ad
valorem tax freeze on residence homesteads of the disabled and of
the elderly and their spouses. If the City Council does not take
action to establish the tax limitation, City voters may submit a
petition requiring the City Council to call an election to
determine by majority vote whether to establish the
taxlimitation.
If the tax limitation is established, the total amount of ad
valorem taxes imposed by the City on a homestead that receives
theexemption may not be increased while it remains the residence
homestead of that person or that person’s spouse who is disabled or
sixty-five years of age or older, except to the extent the value
o