HomeMy WebLinkAboutRes 2025-10-1844 Preliminary Limited Offering Memorandum for Special Assessment Revenue Bonds Series 2025 (The Woods of Lindsey Place PID #2-3)
707662354v3
NEW ISSUE NOT RATED
PRELIMINARY LIMITED OFFERING MEMORANDUM DATED [PLOM DATE], 2025
THE BONDS ARE INITIALLY OFFERED ONLY TO “ACCREDITED INVESTORS” (AS DEFINED IN RULE 501 OF REGULATION
D PROMULGATED UNDER THE SECURITIES ACT OF 1933) AND “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT OF 1933). SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.”
In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for purposes of federal income taxation under existing
law, subject to the matters described under “TAX MATTERS” herein, including the alternative minimum tax on certain corporations.
$23,977,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2025
(THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREAS #2-3 PROJECTS)
Dated Date: Closing Date (defined below)
Interest to Accrue from Closing Date Due: September 15, as shown on the inside cover
The City of Anna, Texas, Special Assessment Revenue Bonds, Series 2025 (The Woods at Lindsey Place Public Improvement District Improvement
Areas #2-3 Projects) (the “Bonds”), are being issued by the City of Anna, Texas (the “City”). The Bonds will be issued in fully registered form, without
coupons, in authorized denominations of $100,000 of principal amount and any integral multiple of $1,000 in excess thereof. The Bonds will bear interest
at the rates set forth on the inside cover page hereof, and such interest will be calculated on the basis of a 360-day year of twelve 30-day months, and will
be payable on each March 15 and September 15, commencing March 15, 2026, until maturity or earlier redemption. The Bonds will be registered in the
name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. No physical delivery of the Bonds will be made to
the beneficial owners thereof. For so long as the book-entry only system is maintained, the principal of and interest on the Bonds will be paid from the
sources described herein by Regions Bank, as trustee (the “Trustee”), to DTC as the registered owner thereof. See “BOOK-ENTRY ONLY SYSTEM.”
The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local
Government Code, as amended (the “PID Act”), an ordinance expected to be adopted by the City Council of the City (the “City Council”) on November
17, 2025, and an Indenture of Trust dated as of November 15, 2025 expected to be entered into between the City and the Trustee (the “Indenture”).
Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Indenture.
Proceeds of the Bonds will be used to provide funds for (i) paying a portion of the Actual Costs of the Improvement Areas #2-3 Projects, (ii) funding
a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District and (iv)
paying the costs of issuance of the Bonds. See “THE IMPROVEMENT AREAS #2-3 PROJECTS” and “APPENDIX B – Form of Indenture.”
The Bonds, when issued and delivered, will constitute valid and binding special obligations of the City secured by a pledge and lien upon the Trust
Estate, consisting primarily of revenue from separate Assessments levied against assessable properties in Improvement Area #2-A, Improvement Area #2-
B, and Improvement Area #3 of the District in accordance with a Service and Assessment Plan, and other assets comprising the Trust Estate, all to the
extent and upon the conditions described herein. The Bonds are not payable from funds raised or to be raised from taxation. See “SECURITY FOR THE
BONDS.”
The Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described under the subcaption
“DESCRIPTION OF THE BONDS – Redemption Provisions.”
The Bonds involve a significant degree of risk, are speculative in nature, and are not suitable for all investors. See “BONDHOLDERS’
RISKS” and “SUITABILITY FOR INVESTMENT.” The Underwriter is limiting this offering to Qualified Institutional Buyers and Accredited
Investors. The limitation of the initial offering to Qualified Institutional Buyers and Accredited Investors does not denote restrictions on transfers
in any secondary market for the Bonds. Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds,
should consult with their legal and financial advisors before considering a purchase of the Bonds, and should be willing to bear the risks of loss of
their investment in the Bonds. The Bonds are not credit enhanced or rated and no application has been made for a rating on the Bonds.
THE BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM PLEDGED REVENUES AND
OTHER ASSETS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT
GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE
SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT
THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE TRUST
ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND
ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION
PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS
OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE. SEE “SECURITY FOR
THE BONDS.”
This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Limited
Offering Memorandum to obtain information essential to the making of an informed investment decision.
The Bonds are offered for delivery when, as, and if issued by the City and accepted by FMSbonds, Inc. (the “Underwriter”), subject to, among other
things, the approval of the Bonds by the Attorney General of Texas and the receipt of the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel,
as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See “APPENDIX D – Form of
Opinion of Bond Counsel.” Certain legal matters will be passed upon for the City by its counsel, Wolfe, Tidwell & McCoy, LLP, for the Underwriter by
its counsel, Greenberg Traurig, LLP, and for the Developer by its counsel, Coats Rose PC. It is expected that the Bonds will be delivered in book-entry
form through the facilities of DTC on or about December 18, 2025 (the “Closing Date”).
FMSbonds, Inc.
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* Preliminary, subject to change.
i
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIP NUMBERS
CUSIP Prefix: (a)
$23,977,000
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2025
(THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREAS #2-3
PROJECTS)
$ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (c)
$ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c)
$ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c)
(a) CUSIP numbers are included solely for the convenience of owners of the Bonds. CUSIP is a registered trademark of the American
Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf
of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for
the CUSIP Services. CUSIP numbers are provided for convenience of reference only. None of the City, the City’s Municipal Advisor,
or the Underwriter takes any responsibility for the accuracy of such numbers.
(b) The Bonds maturing on or after September 15, 20__, are subject to redemption before their respective scheduled maturity dates, in whole
or in part, at the option of the City, on any date on or after September 15, 20__, at the redemption prices set forth herein under
“DESCRIPTION OF THE BONDS – Redemption Provisions.”
(c) The Bonds are also subject to mandatory sinking fund redemption and extraordinary optional redemption as described herein under
“DESCRIPTION OF THE BONDS – Redemption Provisions.”
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
ii
CITY OF ANNA, TEXAS
CITY COUNCIL
Name
Place
Term Expires
(May)
Pete Cain Ma o 2027
Kevin Toten Place 1, Ma or Pro Te 2027
athan Br an Place 2 2027
Stan Carver II Place 3, Deput Ma or Pro Tem 2026
Kell Patterson-Herndon Place 4 2028
Elden Bake Place 5 2026
Mann Sin h Place 6 2028
ACTING CITY
MANAGER
CITY SECRETARY FINANCE DIRECTOR
Marc Marchan Carrie Lan Terri Dob
ADMINISTRATOR
P3Works, LLC
MUNICIPAL ADVISOR TO THE CITY
Hilltop Securities Inc.
BOND COUNSEL
McCall, Parkhurst & Horton L.L.P.
UNDERWRITER’S COUNSEL
Greenberg Traurig, LLP
For additional information regarding the City, please contact:
Marc Marchand Jim Sabonis Andre A ala
Acting City Manager Hilltop Securities Inc. Hilltop Securities Inc.
City of Anna, Texas 717 N. Harwood Street 717 N. Harwood Street
120 W. 7th Street Suite 3400 Suite 3400
Anna, Texas 75409 Dallas, Texas 75201 Dallas, Texas 75201
(972) 924-3325 (214) 953-4000 (214) 953-4000
mmarchand annatexas.ov Jim.Sabonis hilltopsecurities.co Andre.A ala hilltopsecurities.co
iii
REGIONAL LOCATION MAP OF THE DISTRICT
DISTRICT
iv
AREA LOCATION MAP OF THE DISTRICT
DISTRICT
v
MAP SHOWING BOUNDARIES OF THE DISTRICT
AND IMPROVEMENT AREAS
Improvement Area #1
Improvement Area #2-B
Improvement Area #3
Note: The portions
planned for multi-family
residential units and
commercial property are
outside the boundaries of
the District.
Improvement Area #2-A
vi
FOR PURPOSES OF COMPLIANCE WITH RULE 15C2-12 OF THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION AS AMENDED AND IN EFFECT ON THE DATE OF THIS PRELIMINARY LIMITED
OFFERING MEMORANDUM (THE “RULE” OR “RULE 15C2-12”), THIS DOCUMENT CONSTITUTES AN
“OFFICIAL STATEMENT” OF THE CITY WITH RESPECT TO THE BONDS THAT HAS BEEN “DEEMED FINAL”
BY THE CITY AS OF ITS DATE EXCEPT FOR THE OMISSION OF NO MORE THAN THE INFORMATION
PERMITTED BY RULE 15C2-12.
NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR
THE UNDERWRITER TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER THAN
THOSE CONTAINED IN THIS LIMITED OFFERING MEMORANDUM, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY EITHER OF THE FOREGOING. THIS LIMITED OFFERING MEMORANDUM DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY AND THERE SHALL
BE NO OFFER, SOLICITATION OR SALE OF THE BONDS BY ANY PERSON IN ANY JURISDICTION IN
WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE.
THE INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS
LIMITED OFFERING MEMORANDUM ARE BEING OFFERED AND SOLD ONLY TO “ACCREDITED
INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”), AND “QUALIFIED INSTITUTIONAL
BUYERS” AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933. SEE
“LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” EACH PROSPECTIVE INITIAL PURCHASER
IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN INVESTMENT IN THE BONDS, MUST
BE ABLE TO BEAR THE ECONOMIC AND FINANCIAL RISK OF SUCH INVESTMENT IN THE BONDS,
AND MUST BE ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT. CERTAIN RISKS
ASSOCIATED WITH THE PURCHASE OF THE BONDS ARE SET FORTH UNDER “BONDHOLDERS’
RISKS.” EACH INITIAL PURCHASER, BY ACCEPTING THE BONDS, AGREES THAT IT WILL BE DEEMED
TO HAVE MADE THE ACKNOWLEDGMENTS AND REPRESENTATIONS DESCRIBED UNDER THE
HEADING “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.”
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS LIMITED OFFERING
MEMORANDUM IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS
UNDER THE UNITED STATES FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND
CIRCUMSTANCES OF THIS TRANSACTION. THE INFORMATION SET FORTH HEREIN HAS BEEN
FURNISHED BY THE CITY AND OBTAINED FROM SOURCES, INCLUDING THE DEVELOPER, WHICH
ARE BELIEVED BY THE CITY AND THE UNDERWRITER TO BE RELIABLE, BUT IT IS NOT
GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A
REPRESENTATION OF THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION
HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS
LIMITED OFFERING MEMORANDUM, 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 THE DEVELOPER SINCE THE DATE HEREOF.
NEITHER THE CITY NOR THE UNDERWRITER MAKE ANY REPRESENTATION AS TO THE ACCURACY,
COMPLETENESS, OR ADEQUACY OF THE INFORMATION SUPPLIED BY THE DEPOSITORY TRUST
COMPANY FOR USE IN THIS LIMITED OFFERING MEMORANDUM.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR HAS THE
INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON
EXEMPTIONS CONTAINED IN SUCH LAWS. THE REGISTRATION OR QUALIFICATION OF THE BONDS
UNDER THE SECURITIES LAWS OF ANY JURISDICTION IN WHICH THEY MAY HAVE BEEN
REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDED AS A RECOMMENDATION
THEREOF. NONE OF SUCH JURISDICTIONS, OR ANY OF THEIR AGENCIES, HAVE PASSED UPON THE
MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING
MEMORANDUM.
CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS LIMITED OFFERING
MEMORANDUM CONSTITUTE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, SECTION 21E OF THE
UNITED STATES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 27A OF THE SECURITIES ACT
vii
OF 1933. SUCH STATEMENTS ARE GENERALLY IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH
AS “PLAN,” “APPROXIMATE,” “EXPECT,” “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “BUDGET” OR
OTHER SIMILAR WORDS. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. NEITHER THE CITY NOR THE DEVELOPER PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF THEIR
EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE
BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE – THE CITY” AND
“– THE DEVELOPER,” RESPECTIVELY.”
THE TRUSTEE HAS NOT PARTICIPATED IN THE PREPARATION OF THIS LIMITED OFFERING
MEMORANDUM AND ASSUMES NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF
ANY INFORMATION CONTAINED IN THIS LIMITED OFFERING MEMORANDUM OR THE RELATED
TRANSACTIONS AND DOCUMENTS OR FOR ANY FAILURE BY ANY PARTY TO DISCLOSE EVENTS
THAT MAY HAVE OCCURRED AND MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH
INFORMATION.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
REFERENCES TO WEBSITE ADDRESSES PRESENTED HEREIN ARE FOR INFORMATIONAL PURPOSES
ONLY AND MAY BE IN THE FORM OF A HYPERLINK SOLELY FOR THE READER’S CONVENIENCE.
UNLESS SPECIFIED OTHERWISE, SUCH WEBSITES AND THE INFORMATION OR LINKS CONTAINED
THEREIN ARE NOT INCORPORATED INTO, AND ARE NOT PART OF, THIS LIMITED OFFERING
MEMORANDUM FOR PURPOSES OF, AND AS THAT TERM IS DEFINED IN, THE RULE.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK].
viii
TABLE OF CONTENTS
INTRODUCTION .................................................... 1
PLAN OF FINANCE ............................................... 2
Overview ........................................................... 2
Development Plan and Status of
Development .............................................. 2
Homebuilders in the District.............................. 4
The Bonds ......................................................... 4
Prior Bonds ........................................................ 4
LIMITATIONS APPLICABLE TO INITIAL
PURCHASERS ........................................................ 4
DESCRIPTION OF THE BONDS ........................... 6
General Description ........................................... 6
Redemption Provisions ...................................... 6
BOOK-ENTRY ONLY SYSTEM ........................... 8
SECURITY FOR THE BONDS ............................. 10
General ............................................................ 10
Pledged Revenues ............................................ 11
Collection and Deposit of Assessments ........... 12
Unconditional Levy of Assessments ............... 13
Perfected Security Interest ............................... 14
Pledged Revenue Fund .................................... 14
Bond Fund ....................................................... 15
Project Fund .................................................... 15
Reserve Fund (Reserve Account and
Delinquency and Prepayment
Reserve Account) ..................................... 16
Administrative Fund ........................................ 18
Defeasance....................................................... 18
Events of Default ............................................. 19
Remedies in Event of Default .......................... 19
Restriction on Owner’s Actions ...................... 20
Application of Revenues and Other
Moneys After Event of Default ................ 21
Investment or Deposit of Funds ....................... 21
Against Encumbrances .................................... 22
Additional Obligations .................................... 22
SOURCES AND USES OF FUNDS ...................... 23
DEBT SERVICE REQUIREMENTS .................... 24
OVERLAPPING TAXES AND DEBT .................. 25
Overlapping Taxes and Debt ........................... 25
Homeowners’ Association ............................... 27
ASSESSMENT PROCEDURES ............................ 27
General ............................................................ 27
Assessment Methodology ................................ 27
Collection and Enforcement of
Assessment Amounts ............................... 29
Assessment Amounts....................................... 30
Prepayment of Assessments ............................ 32
Priority of Lien ................................................ 32
Foreclosure Proceedings .................................. 32
Collection and Delinquency History in
Improvement Area #2 of the
District ...................................................... 34
THE CITY .............................................................. 35
Background ..................................................... 35
City Government ............................................. 35
Water and Wastewater ..................................... 35
THE DISTRICT ..................................................... 36
General ............................................................ 36
Powers and Authority ...................................... 36
THE IMPROVEMENT AREAS #2-3 PROJECTS 36
General ............................................................ 36
Ownership and Maintenance of
Improvement Areas #2-3 Projects ............ 42
THE DEVELOPMENT .......................................... 42
Overall Development Plan .............................. 42
Homebuilders in the District............................ 42
Photographs of Development in the
District ...................................................... 42
Update on Improvement Area #1 .................... 42
Development Plan and Status of
Development in Improvement
Areas #2-3 ................................................ 43
Expected Build-Out and Home Prices in
the Development ...................................... 43
Development Agreement ................................. 45
Reimbursement Agreement ............................. 46
Zoning/Permitting ........................................... 46
Private Improvements ...................................... 46
Education ......................................................... 47
Environmental ................................................. 47
Existing Mineral and Groundwater
Rights, Easements and Other
Third-Party Property Rights ..................... 47
Flood Zone ...................................................... 47
Utilities ............................................................ 47
THE DEVELOPER ................................................ 48
General ............................................................ 48
Description of the Developer ........................... 48
Biographies of Key Developer Parties ............ 48
History and Financing of the District .............. 49
THE ADMINISTRATOR ...................................... 49
APPRAISAL .......................................................... 50
BONDHOLDERS’ RISKS ..................................... 50
General ............................................................ 50
Deemed Representations and
Acknowledgment by Investors ................. 51
Assessment Limitations ................................... 51
Completion of the Improvement Areas
#2-3 Projects ............................................. 53
Failure or Inability to Complete
Proposed Development............................. 53
Completion of Homes ...................................... 53
Availability of Utilities .................................... 54
Absorption Rate ............................................... 55
State Law Regarding Notice of
Assessments ............................................. 55
ix
Potential Future Changes in State Law
Regarding Public Improvement
Districts .................................................... 55
Direct and Overlapping Indebtedness,
Assessments and Taxes ............................ 55
Depletion of Reserve Fund; No
Prefunding of Delinquency and
Prepayment Reserve Account .................. 56
Hazardous Substances ..................................... 56
Exercise of Third-Party Property Rights ......... 57
Regulation ....................................................... 57
Bankruptcy ...................................................... 57
Bondholders’ Remedies and
Bankruptcy ............................................... 57
Bankruptcy Limitation to Bondholders’
Rights ....................................................... 58
Judicial Foreclosures ....................................... 59
No Acceleration ............................................... 59
Loss of Tax Exemption ................................... 59
Tax-Exempt Status of the Bonds ..................... 59
Management and Ownership ........................... 60
Dependence Upon Developer .......................... 60
Use of Appraisal .............................................. 60
Flood Plain and Severe Weather Events .......... 61
Competition ..................................................... 61
Limited Secondary Market for the
Bonds........................................................ 62
No Credit Rating ............................................. 62
TAX MATTERS .................................................... 62
Opinion ............................................................ 62
Federal Income Tax Accounting
Treatment of Original Issue
Discount ................................................... 63
Collateral Federal Income Tax
Consequences ........................................... 64
State, Local And Foreign Taxes ...................... 64
Information Reporting and Backup
Withholding .............................................. 64
Future and Proposed Legislation ..................... 65
LEGAL MATTERS ............................................... 65
Legal Proceedings ........................................... 65
Legal Opinions ................................................ 65
Litigation – The City ....................................... 66
Litigation – The Developer ............................. 66
SUITABILITY FOR INVESTMENT .................... 66
ENFORCEABILITY OF REMEDIES ................... 66
NO RATING .......................................................... 67
CONTINUING DISCLOSURE .............................. 67
The City ........................................................... 67
The City’s Compliance with Prior
Undertakings ............................................ 67
The Developer ................................................. 67
The Developer’s Compliance with Prior
Undertakings ............................................ 68
UNDERWRITING ................................................. 68
REGISTRATION AND QUALIFICATION OF
BONDS FOR SALE ............................................... 68
LEGAL INVESTMENT AND ELIGIBILITY TO
SECURE PUBLIC FUNDS IN TEXAS ................. 68
INVESTMENTS .................................................... 68
INFORMATION RELATING TO THE TRUSTEE
................................................................................ 71
SOURCES OF INFORMATION ........................... 71
General ............................................................ 71
Source of Certain Information ......................... 71
Experts ............................................................. 72
Updating of Limited Offering
Memorandum ........................................... 72
FORWARD-LOOKING STATEMENTS .............. 72
AUTHORIZATION AND APPROVAL ................ 72
APPENDIX A General Information Regarding the
City and Surrounding Areas
APPENDIX B Form of Indenture
APPENDIX C Service and Assessment Plan
APPENDIX D Form of Opinion of Bond Counsel
APPENDIX E-1 Form of Disclosure Agreement of
Issuer
APPENDIX E-2 Form of Disclosure Agreement of
Developer
APPENDIX F Development Agreement
APPENDIX G Reimbursement Agreement
APPENDIX H Appraisal
APPENDIX I Photographs of Development in the
District
THIS PAGE IS LEFT BLANK INTENTIONALLY.
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LIMITED OFFERING MEMORANDUM
$23,977,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2025
(THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREAS #2-3 PROJECTS)
INTRODUCTION
The purpose of this Limited Offering Memorandum, including the cover page, inside cover, and appendices
hereto, is to provide certain information in connection with the issuance and sale by the City of Anna, Texas (the
“City”), of its $23,977,000* aggregate principal amount of Special Assessment Revenue Bonds, Series 2025 (The
Woods at Lindsey Place Public Improvement District Improvement Areas #2-3 Projects) (the “Bonds”).
INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS
LIMITED OFFERING MEMORANDUM ARE BEING OFFERED INITIALLY TO AND ARE BEING SOLD
ONLY TO “ACCREDITED INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”) AND
“QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A PROMULGATED UNDER THE
SECURITIES ACT OF 1933. THE LIMITATION OF THE INITIAL OFFERING TO QUALIFIED
INSTITUTIONAL BUYERS AND ACCREDITED INVESTORS DOES NOT DENOTE RESTRICTIONS ON
TRANSFERS IN ANY SECONDARY MARKET FOR THE BONDS. PROSPECTIVE INVESTORS SHOULD BE
AWARE OF CERTAIN RISK FACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE,
COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND/OR INTEREST ON
THE BONDS. THE BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS. SEE
“LIMITATIONS APPLICABLE TO INITIAL PURCHASERS,” “BONDHOLDERS’ RISKS,” AND
“SUITABILITY FOR INVESTMENT.”
The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act,
Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “PID Act”), an ordinance expected to
be adopted by the City Council of the City (the “City Council”) authorizing the issuance of the Bonds (the “Bond
Ordinance”), and an Indenture of Trust (the “Indenture”), expected to be entered into between the City and Regions
Bank, an Alabama state banking corporation with offices in Houston, Texas, as trustee (the “Trustee”). All capitalized
terms used in this Limited Offering Memorandum that are not otherwise defined herein shall have the meanings
set forth in the Indenture. See “APPENDIX B – Form of Indenture.”
The Bonds will be secured by a pledge of and lien upon the Trust Estate (defined herein), consisting primarily
of Assessment Revenues (defined herein) from special assessments (the “Improvement Area #2-A Assessments”)
levied against assessable parcels located within Improvement Area #2-A (the “Improvement Area #2-A Assessed
Property”), special assessments (the “Improvement Area #2-B Assessments” and together with the Improvement Area
#2-A Assessments, the “Improvement Area #2 Assessments”) levied against assessable parcels in Improvement Area
#2-B (the “Improvement Area #2-B Assessed Property”), and special assessments (the “Improvement Area #3
Assessments” and, together with the Improvement Area #2 Assessments, the “Assessments”) to be levied against the
assessable parcels located in Improvement Area #3 of The Woods at Lindsey Place Public Improvement District (the
“District”), all to the extent and upon the conditions described in the Indenture. Reference is made to the Indenture
for a full statement of the authority for, and the terms and provisions of, the Bonds.
The Improvement Area #2 Assessments were levied pursuant to an ordinance adopted by the City Council
on August 27, 2024 related to the Improvement Area #2 Assessments, as such ordinance was amended pursuant to a
separate ordinance adopted by the City Council on February 25, 2025 (collectively, the “Improvement Area #2
Assessment Ordinance”). The Improvement Area #3 Assessments are expected to be levied pursuant to a separate
ordinance expected to be adopted by the City Council on November 17, 2025 (the “Improvement Area #3 Assessment
Ordinance” and, together with the Improvement Area #2 Assessment Ordinance, the “Assessment Ordinances”).
* Preliminary, subject to change.
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Set forth herein are brief descriptions of the City, the District, D.R. Horton – Texas, Ltd. (the “Developer”)
P3Works, LLC (the “Administrator”), the Assessment Ordinances, the Bond Ordinance, the Service and Assessment
Plan, the Development Agreement (as defined herein), the Reimbursement Agreement (as defined herein), and the
Appraisal (defined herein), together with summaries of terms of the Bonds and the Indenture and certain provisions
of the PID Act. All references herein to such documents and the PID Act are qualified in their entirety by reference
to such documents or such PID Act and all references to the Bonds are qualified by reference to the definitive forms
thereof and the information with respect thereto contained in the Indenture. Copies of these documents may be
obtained during the period of the offering of the Bonds from the Underwriter, FMSbonds, Inc., 5 Cowboys Way, Suite
300-25, Frisco, Texas, 75034, Phone: (214) 302-2246. The form of Indenture appears in APPENDIX B and the
Service and Assessment Plan appears in APPENDIX C. The information provided under this caption
“INTRODUCTION” is intended to provide a brief overview of the information provided in the other captions herein
and is not intended, and should not be considered, fully representative or complete as to the subjects discussed
hereunder.
PLAN OF FINANCE
Overview
Following receipt of a petition from the Developer in accordance with the PID Act, the City created the
District on February 14, 2023. The District is composed of approximately 198.006 acres within the corporate
boundaries of the City. It is located east of US 75 on the north and south sides of Rosamond Parkway between Buddy
Hayes Boulevard (formerly Throckmorton Boulevard) and Ferguson Parkway. Maps of the District and the
surrounding region are included on pages iii – v.
Development Plan and Status of Development
The Developer purchased the property within the District and approximately 77 acres adjacent to the District
in February 2021 and is developing such property as a master-planned community to include approximately 858
single-family detached residential lots, 91 townhome lots, approximately 600 multi-family residential units,
approximately 3 acres of commercially zoned land (held for future sale), an amenity center with a swimming pool and
cabana, and hike and bike trails (collectively, the “Development”), with completion of all single-family lot
development expected to occur by November 2025. The multi-family residential units are planned for the acreage
adjacent to and outside the boundaries of the District. See “MAP SHOWING BOUNDARIES OF THE DISTRICT
AND IMPROVEMENT AREAS” on page v hereof and “THE DEVELOPMENT.”
The District is composed of approximately 198.006 acres. The District is expected to be developed in
different stages, designated “Improvement Areas.” The term (i) “Improvement Area #1” is used herein to describe
the approximately 57.444 acres of property; (iii) “Improvement Area #2-A” is used herein to describe the
approximately 29.229 acres of property; (iii) “Improvement Area #2-B” is used herein to describe the approximately
27.474 acres of property; (iv) “Improvement Area #3” is used herein to describe, collectively, “Phase 3” which
includes approximately 39.162 acres of property, and “Phase 4” which includes approximately 47.778 acres of
property, each as shown on the “MAP SHOWING BOUNDARIES OF THE DISTRICT AND IMPROVEMENT
AREAS” on page v hereof.
Set forth below is information on the status of development in the District. See also “THE DEVELOPMENT
– Update on Improvement Area #1”
Improvement Area #1. Development of the District began with Improvement Area #1. Improvement Area
#1 consists of approximately 57.444 acres and includes a total of 218 single-family residential lots in a mix of 188 50’
lots and 30 60’ lots. Lot development consisted of the construction of (i) certain local improvements (the
“Improvement Area #1 Improvements”) that benefitted only Improvement Area #1 of the District and (ii) certain
improvements consisting of excavation, sanitary sewer, storm sewer, water, and paving that will benefit the entire
District, and expended certain soft costs and contingency related thereto (the “Major Improvements”). The Major
Improvements have been completed and accepted by the City. Lot development in Improvement Area #1 was
completed in March 2023, and home construction began in March 2023. As of September 30, 2025, 204 homes have
been completed and sold to end users in Improvement Area #1 of the District. The average sale price of homes in
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Improvement Area #1 is $375,535 for homes on 50’ lots and $377,256 for homes on 60’ lots. See “THE
DEVELOPMENT – Update on Improvement Area #1.”
Improvement Area #2. Improvement Area #2 consists of approximately 56.703 acres comprised of
Improvement Area #2-A and Improvement Area #2-B, and which includes a total of 198 single-family residential lots.
Improvement Area #2-A consists of approximately 29.229 acres and includes a total of 75 60’ single family residential
lots. Improvement Area #2-B consists of approximately 27.474 acres and includes a total of 123 single-family
residential lots in a mix of 26 40’ lots and 97 50’ lots. The Developer completed the Improvement Area #2-A
Improvements and the Improvement Area #2-B Improvements in December 2024. The Improvement Area #2-A
Improvements and Improvement Area #2-B Improvements have been accepted by the City. See “THE
DEVELOPMENT – Development Plan and Status of Development in Improvement Areas #2-3.”
Home construction in Improvement Area #2 began in February 2025. As of September 30, 2025, 3 homes
are under construction and 104 homes have been completed and sold to end users in Improvement Area #2. The
average sale price of homes in Improvement Area #2 is $356,386 for homes on 50’ lots and $366,099 for homes on
60’ lots.
Improvement Area #3. Improvement Area #3 includes (i) Phase 3, which consists of approximately 39.162
acres and includes a total of 220 single-family residences in a mix of 118 40’ lots and 102 50’ lots and (ii) Phase 4,
which consists of approximately 47.778 acres and is expected to include a total of 91 townhomes and 222 40’ single-
family residential lots.
The Developer completed lot development in Phase 3 in July 2025. Home construction in Phase 3 began in
September 2025. The Developer expects to complete lot development in Phase 4 in November 2025. Home
construction in Phase 4 is expected to begin in May 2027.
The Improvement Areas #2-3 Projects. In connection with the development of Improvement Area #2, the
Developer constructed (i) certain improvements consisting of erosion control, excavation, sanitary sewer, storm sewer,
water, paving, and street lights benefitting only Improvement Area #2-A (the “Improvement Area #2-A
Improvements”), (ii) certain improvements consisting of erosion control, excavation, sanitary sewer, storm sewer,
water, paving, and street lights benefitting only Improvement Area #2-B (the “Improvement Area #2-B
Improvements”) and (iii) excavation, sanitary sewer, storm sewer, water, and paving benefitting only Improvement
Area #2 (the “Improvement Area #2 Improvements”). In connection with the development of Improvement Area #3,
the Developer expects to construct certain improvements consisting of excavation, sanitary sewer, storm sewer, water,
and paving benefitting only Improvement Area #3 (the “Improvement Area #3 Improvements”). The Developer
previously completed the Major Improvements, the costs of which have been or are being allocated to Improvement
Area #2-A, Improvement Area #2-B and Improvement Area #3.
The pro rata portion of the Major Improvements allocable to Improvement Area #2-A, the pro rata portion
of the Improvement Area #2 Improvements allocable to Improvement Area #2-A, and the Improvement Area #2-A
Improvements are collectively referred to herein as the “Improvement Area #2-A Projects.” The pro rata portion of
the Major Improvements allocable to Improvement Area #2-B, the pro rata portion of the Improvement Area #2
Improvements allocable to Improvement Area #2-B, and the Improvement Area #2-B Improvements are collectively
referred to herein as the “Improvement Area #2-B Projects.” The pro rata portion of the Major Improvements allocable
to Improvement Area #3 and the Improvement Area #3 Improvements are collectively referred to herein as the
“Improvement Area #3 Projects.” The Improvement Area #2-A Projects, the Improvement Area #2-B Projects, and
the Improvement Area #3 Projects are collectively referred to herein as the “Improvement Areas #2-3 Projects.”
The costs of the Improvement Area #2-A Projects (exclusive of the costs of issuance of the Bonds) are
approximately $4,578,241. The costs of the Improvement Area #2-B Projects (exclusive of the costs of issuance of
the Bonds) are approximately $7,046,972. The Improvement Area #2-A Projects and the Improvement Area #2-B
Projects have been completed and were funded by the Developer with cash available to the Developer. The expected
cost of the Improvement Area #3 Projects is $18,683,291*. The Developer has completed and funded the Major
Improvements allocable to Improvement Area #3, the allocable cost of which was approximately $2,838,109 and was
funded with cash available to the Developer. As of September 30, 2025, the Developer has expended approximately
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$12,956,772 on constructing the Improvement Area #3 Improvements which was funded with cash available to the
Developer.
The City will pay a portion of the costs for the Improvement Areas #2-3 Projects from proceeds of the Bonds.
The Developer will submit payment requests on a monthly basis for costs actually incurred in developing and
constructing the Improvement Areas #2-3 Projects and be paid in accordance with the Indenture and the
Reimbursement Agreement. See “THE IMPROVEMENT AREAS #2-3 PROJECTS,” “THE DEVELOPMENT –
Reimbursement Agreement,” “APPENDIX B – Form of Indenture,” and “APPENDIX G – Reimbursement
Agreement.”
Homebuilders in the District
The Developer intends to construct homes on all of the 40’, 50’, and 60’ lots in the District and expects to
contract with a merchant homebuilder on the 91 townhome lots in the future. The Developer has not entered into a
contract for such sale of the townhome lots as of October 1, 2025.
The Bonds
Proceeds of the Bonds will be used to provide funds for (i) paying a portion of the Actual Costs of the
Improvement Areas #2-3 Projects, (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii)
paying a portion of the costs incidental to the organization of the District and (iv) paying the costs of issuance of the
Bonds. To the extent that a portion of the proceeds of the Bonds is allocated for the payment of the costs of issuance
of the Bonds and less than all of such amount is used to pay such costs, the excess shall be transferred to the Principal
and Interest Account of the Bond Fund to pay interest on the Bonds. See “SOURCES AND USES OF FUNDS,”
“THE IMPROVEMENT AREAS #2-3 PROJECTS,” and “APPENDIX B – Form of Indenture.”
Payment of the Bonds is secured by a pledge of and a lien upon the Trust Estate, consisting primarily of
Pledged Revenues derived from Assessments levied and to be levied against the Assessed Property within
Improvement Areas #2-3 of the District, all to the extent and upon the conditions described herein and in the Indenture.
See “SECURITY FOR THE BONDS,” “ASSESSMENT PROCEDURES,” and “APPENDIX B – Form of Indenture.”
The Bonds, the Improvement Area #1 Bonds (as defined herein), and any Refunding Bonds shall never
constitute an indebtedness or general obligation of the City, the State of Texas (the “State”), or any other
political subdivision of the State within the meaning of any constitutional provision or statutory limitation
whatsoever, but the Bonds are limited and special obligations of the City payable solely from the Trust Estate
as provided in the Indenture. Neither the faith and credit nor the taxing power of the City, the State, or any
other political subdivision of the State is pledged to the payment of the Bonds.
Prior Bonds
To finance a portion of the costs of the Improvement Area #1 Improvements and the costs of Improvement
Area #1’s allocable share of the Major Improvements (the “Improvement Area #1 Projects”), the City previously
issued its $7,419,000 City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods At Lindsey
Place Public Improvement District Improvement Area #1 Project) (the “Improvement Area #1 Bonds”). The
Improvement Area #1 Bonds are outstanding in the amount of $7,176,000. The Improvement Area #1 Bonds are
secured by a pledge of and a lien upon certain pledged revenues, consisting primarily of the assessments levied on
Improvement Area #1 of the District (the “Improvement Area #1 Assessments”). The Improvement Area #1
Assessments are not pledged to and do not secure the Bonds.
LIMITATIONS APPLICABLE TO INITIAL PURCHASERS
Each initial purchaser is advised that the Bonds being offered pursuant to this Limited Offering Memorandum
are being offered and sold only to “qualified institutional buyers” as defined in Rule 144A promulgated under the
Securities Act of 1933, and “accredited investors” as defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933. Each initial purchaser of the Bonds (each, an “Investor”) will be deemed to have
acknowledged, represented, and warranted to the City as follows:
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1. The Investor has authority and is duly authorized to purchase the Bonds and to execute any
instruments and documents required to be executed by the Investor in connection with the purchase of the Bonds.
2. The Investor is an “accredited investor” under Rule 501 of Regulation D of the Securities Act of
1933 or a “qualified institutional buyer” under Rule 144A of the Securities Act of 1933, and therefore has sufficient
knowledge and experience in financial and business matters, including purchase and ownership of municipal and other
tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the Bonds.
3. The Bonds are being acquired by the Investor for investment and not with a view to, or for resale in
connection with, any distribution of the Bonds, and the Investor intends to hold the Bonds solely for its own account
for investment purposes for an indefinite period of time and does not intend at this time to dispose of all or any part
of the Bonds. However, the Investor may sell the Bonds at any time the Investor deems appropriate. The Investor
understands that it may need to bear the risks of this investment for an indefinite time, since any sale prior to maturity
may not be possible.
4. The Investor understands that the Bonds are not registered under the Securities Act of 1933 and that
such registration is not legally required as of the date hereof; and further understands that the Bonds (a) are not being
registered or otherwise qualified for sale under the “Blue Sky” laws and regulations of any state, (b) will not be listed
in any stock or other securities exchange, and (c) will not carry a rating from any rating service.
5. The Investor acknowledges that it has either been supplied with or been given access to information,
including financial statements and other financial information, and the Investor has had the opportunity to ask
questions and receive answers from knowledgeable individuals concerning the City, the Improvement Areas #2-3
Projects, the Bonds, the security therefor, and such other information as the Investor has deemed necessary or desirable
in connection with its decision to purchase the Bonds (collectively, the “Investor Information”). The Investor has
received a copy of this Limited Offering Memorandum relating to the Bonds. The Investor acknowledges that it has
assumed responsibility for its review of the Investor Information, and it has not relied upon any advice, counsel,
representation, or information from the City in connection with the Investor’s purchase of the Bonds. The Investor
agrees that none of the City, its councilmembers, officers, or employees shall have any liability to the Investor
whatsoever for or in connection with the Investor’s decision to purchase the Bonds except for gross negligence, fraud,
or willful misconduct. For the avoidance of doubt, it is acknowledged that the Underwriter is not deemed an officer
or employee of the City.
6. The Investor acknowledges that the obligations of the City under the Indenture are special, limited
obligations payable solely from amounts paid by the City to the Trustee pursuant to the terms of the Indenture and the
City shall not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of the
City for amounts due under the Indenture. The Investor understands that the Bonds are not secured by any pledge of
any moneys received or to be received from taxation by the City, the State, or any political subdivision or taxing
district thereof; that the Bonds will never represent or constitute a general obligation or a pledge of the full faith and
credit of the City, the State, or any political subdivision thereof; that no right will exist to have taxes levied by the
City, the State, or any political subdivision thereof for the payment of principal of and interest on the Bonds; and that
the liability of the City and the State with respect to the Bonds is subject to further limitations as set forth in the Bonds
and the Indenture.
7. The Investor has made its own inquiry and analysis with respect to the Bonds and the security
therefor. The Investor is aware that the development of the District involves certain economic and regulatory variables
and risks that could adversely affect the security for the Bonds.
8. The Investor acknowledges that the sale of the Bonds to the Investor is made in reliance upon the
certifications, representations, and warranties described in items 1-7 above.
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DESCRIPTION OF THE BONDS
General Description
The Bonds will mature on the dates and in the amounts set forth in the inside cover page of this Limited
Offering Memorandum. Interest on the Bonds will accrue from their date of delivery to the Underwriter and will be
computed on the basis of a 360-day year of twelve 30-day months. Interest on the Bonds will be payable on each
March 15 and September 15, commencing March 15, 2026 (each an “Interest Payment Date”), until maturity or prior
redemption. Regions Bank is the initial Trustee, Paying Agent, and Registrar for the Bonds.
The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $100,000
of principal and any integral multiple of $1,000 in excess thereof (“Authorized Denominations”). Upon initial
issuance, the ownership of the Bonds will be registered in the name of Cede & Co., as nominee for The Depository
Trust Company, New York, New York (“DTC”), and purchases of beneficial interests in the Bonds will be made in
book-entry only form. See “BOOK-ENTRY ONLY SYSTEM” and “SUITABILITY FOR INVESTMENT.”
Redemption Provisions
Optional Redemption. The City reserves the right and option to redeem the Bonds, in whole or in part,
maturing on or after September 15, 20 , before their respective scheduled maturity dates, in whole or in part, on any
date on or after September 15, 20 , such redemption date or dates to be fixed by the City, at the redemption price of
par plus accrued and unpaid interest to the date of redemption (the “Redemption Price”).
Extraordinary Optional Redemption. The City reserves the right and option to redeem Bonds before their
respective scheduled maturity dates, in whole or in part, on any date, at the Redemption Price, from amounts on deposit
in the Redemption Fund as a result of Prepayments (including related transfers to the Redemption Fund as provided
in the Indenture or any other transfers to the Redemption Fund under the terms of the Indenture. See “ASSESSMENT
PROCEDURES – Prepayment of Assessments” for the definition and description of Prepayments and “APPENDIX
B – Form of Indenture.”
Mandatory Sinking Fund Redemption. The Bonds maturing on September 15 in the years 20 , 20 , and 20__
(the “Term Bonds”) are subject to mandatory sinking fund redemption prior to their respective maturities and will be
redeemed by the City in part at the Redemption Price from moneys available for such purpose in the Principal and
Interest Account of the Bond Fund pursuant to the Indenture, on the dates and in the respective Sinking Fund
Installments as set forth in the following schedules:
$ Term Bonds Maturing September 15, 20
Redemption Date Sinking Fund Installment Amount
September 15, 20 $
September 15, 20
September 15, 20
September 15, 20
September 15, 20 †
$ Term Bonds Maturing September 15, 20
Redemption Date Sinking Fund Installment Amount
September 15, 20 $
September 15, 20
September 15, 20
September 15, 20
September 15, 20
September 15, 20
September 15, 20
September 15, 20
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September 15, 20
September 15, 20
September 15, 20
September 15, 20
September 15, 20
September 15, 20 †
__________________________
† Stated maturity.
At least thirty (30) days prior to each mandatory sinking fund redemption date, and subject to any prior
reduction authorized by the Indenture, the Trustee shall select by lot, or by any other customary method that results in
a random selection, a principal amount of Bonds of such maturity equal to the Sinking Fund Installment amount of
such Bonds to be redeemed, shall call such Bonds for redemption on such scheduled mandatory sinking fund
redemption date, and shall give notice of such mandatory sinking fund redemption, as provided in the Indenture.
The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date
pursuant to the Indenture shall be reduced, at the option of the City, by the principal amount of any Bonds of such
maturity which, at least 30 days prior to the mandatory sinking fund redemption date shall have been acquired by the
City at a price not exceeding the principal amount of such Bonds plus accrued unpaid interest to the date of purchase
thereof, and delivered to the Trustee for cancellation.
The Sinking Fund Installments of Term Bonds required to be redeemed on any mandatory sinking fund
redemption date pursuant to the Indenture shall be reduced in integral multiples of $1,000 by any portion of such
Bonds, which, at least 30 days prior to the mandatory sinking fund redemption date, shall have been redeemed pursuant
to the optional redemption or extraordinary optional redemption provisions in the Indenture, respectively, and not
previously credited to a mandatory sinking fund redemption.
Notice of Redemption. Upon written direction from the City to the Trustee of the exercise of any redemption
provision provided under the Indenture, the Trustee shall give notice of any redemption of Bonds by sending notice
by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the
Owner of each Bond or portion thereof to be redeemed, at the address shown in the Register.
The notice shall state the redemption date, the Redemption Price, the place at which the Bonds are to be
surrendered for payment, and, if less than all the Bonds Outstanding are to be redeemed, and subject to the Indenture,
an identification of the Bonds or portions thereof to be redeemed, any conditions to such redemption and that on the
redemption date, if all conditions, if any, to such redemption have been satisfied, such Bond shall become due and
payable.
Any notice given as provided in the Indenture shall be conclusively presumed to have been duly given,
whether or not the Owner receives such notice.
With respect to any optional redemption of the Bonds, unless the Trustee has received funds sufficient to pay
the Redemption Price of the Bonds to be redeemed before giving of a notice of redemption, the notice may state the
City may condition redemption on the receipt of such funds by the Trustee on or before the date fixed for the
redemption, or on the satisfaction of any other prerequisites set forth in the notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the redemption and sufficient funds are not received, the notice
shall be of no force and effect, the City shall not redeem the Bonds and the Trustee shall give notice, in the manner in
which the notice of redemption was given, that the Bonds have not been redeemed.
The City has the right to rescind any optional redemption or extraordinary optional redemption described in
the Indenture by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption
shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the
payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default
under the Indenture. Upon written direction from the City, the Trustee shall mail notice of rescission of redemption
in the same manner notice of redemption was originally provided..
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Partial Redemption. If less than all of the Bonds are to be redeemed pursuant to the Indenture, Bonds may
be redeemed in minimum principal amounts of $1,000 or any integral thereof. Each Bond shall be treated as
representing the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000. No
redemption shall result in a Bond in a denomination of less than an Authorized Denomination; provided, however, if
the amount of Outstanding Bonds is less than an Authorized Denomination after giving effect to such partial
redemption, a Bond in the principal amount equal to the unredeemed portion, but not less than $1,000, may be issued.
If less than all of the Bonds are called for optional redemption pursuant to the Indenture, the Trustee shall
rely on directions provided in a City Order in selecting the Bonds to be redeemed.
If less than all of the Bonds are called for extraordinary optional redemption pursuant to the Indenture, Bonds
or portion of a Bond to be redeemed shall be allocated on a pro rata basis (as nearly as practicable) among all
Outstanding Bonds. If less than all Bonds within a Stated Maturity are called for extraordinary optional redemption
pursuant to the Indenture, the Trustee shall call randomly by lot the Bonds, or portions thereof, within such Stated
Maturity and in such principal amounts, for redemption.
Upon surrender of any Bond for redemption in part, the Trustee in accordance with the Indenture, shall
authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion
of the Bond so surrendered, such exchange being without charge.
BOOK-ENTRY ONLY SYSTEM
This section describes how ownership of the Bonds is to be transferred and how the principal of, premium,
if any, and interest on the Bonds are to be paid to and credited by DTC while the Bonds are registered in its nominee
name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC
for use in disclosure documents such as this Limited Offering Memorandum. The information in this section
concerning DTC and DTC’s book-entry-only system has been obtained from sources that the City believes to be
reliable, but none of the City, the City’s Municipal Advisor or the Underwriter takes any 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 Bonds, or redemption or other notices, to DTC participants, (2) DTC participants or others will distribute debt
service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices,
to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner
described in this Limited Offering Memorandum. The current rules applicable to DTC are on file with the United
States 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 Bonds. The Bonds 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 security certificate will be issued for each maturity of the
Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world’s largest securities 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct 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 securities
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, is the holding company for DTC, National Securities Clearing Corporation
and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
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of its registered subsidiaries. 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 a
Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and
Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond
(“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners
will not receive written confirmation from DTC of their purchase. 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 Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds
are credited, which may or may not be the Beneficial Owners. The 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 Bonds may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the
Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the
Bonds 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.
Redemption notices for the Bonds shall be sent to DTC. If less than all Bonds of the same maturity are being
redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant of such maturity
to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless
authorized by a Direct Participant in accordance with DTC’s MMI 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 Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal, interest, and all other payments on the Bonds 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 Paying Agent/Registrar, on the
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 Trustee, 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, interest, and all other
payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the Trustee, the Paying Agent/Registrar or the City, 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.
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DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by
giving reasonable notice to the City, the Trustee, or the Paying Agent/Registrar. Under such circumstances, in the
event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a
successor securities depository). In that event, Bond certificates will be printed and delivered. Thereafter, Bond
certificates may be transferred and exchanged as described in the Indenture.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from
sources that the City believes to be reliable, but none of the City, the City’s Municipal Advisor, or the Underwriter
take any responsibility for the accuracy thereof.
NONE OF THE CITY, THE TRUSTEE, THE PAYING AGENT/REGISTRAR, THE CITY’S MUNICIPAL
ADVISOR, OR THE UNDERWRITER WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC
PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEE WITH RESPECT TO THE
PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC DIRECT PARTICIPANTS, THE INDIRECT
PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE CITY CANNOT AND DOES NOT
GIVE ANY ASSURANCES THAT DTC, THE DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS, OR
OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC
OR ITS NOMINEE, AS THE REGISTERED OWNER, OR PROVIDE ANY NOTICES TO THE BENEFICIAL
OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER
DESCRIBED IN THIS LIMITED OFFERING MEMORANDUM. 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.
Use of Certain Terms in Other Sections of this Limited Offering Memorandum. In reading this Limited
Offering Memorandum it should be understood that while the Bonds are in the Book-Entry-Only System, references
in other sections of this Limited Offering Memorandum 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 Indenture will be given only to DTC.
SECURITY FOR THE BONDS
The following is a summary of certain provisions contained in the Indenture. Reference is made to the
Indenture for a full statement of the terms and provisions of the Bonds. Investors must read the entire Indenture to
obtain information essential to the making of an informed investment decision. See “APPENDIX B — Form of
Indenture.”
General
THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM
THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE, AS AND TO THE
EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE
GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE
SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE
RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION,
OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT
PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND
ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE
INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR
MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE
PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE.
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The principal of, premium, if any, and interest on the Bonds are secured by a pledge of and a lien upon the
Trust Estate, consisting primarily of Assessment Revenues levied or expected to be levied against Assessed Property
within Improvement Areas #2-3 of the District and other assets comprising the Trust Estate, all to the extent and upon
the conditions described herein and in the Indenture. See “APPENDIX B – Form of Indenture.” In accordance with
the PID Act, the City has caused the preparation of a Service and Assessment Plan (as amended, updated and
supplemented from time to time, the “Service and Assessment Plan”), which describes the special benefit received by
the property within the District, including Improvement Area #2-A, Improvement Area #2-B, and Improvement Area
#3, provides the basis and justification for the determination of special benefit on such property, establishes the
methodology for the levy of the Improvement Area #2-A Assessments, the Improvement Area #2-B Assessments and
the Improvement Area #3 Assessments, and provides for the allocation of Pledged Revenues for payment of principal
of, premium, if any, and interest on the Bonds. The Service and Assessment Plan is reviewed and updated annually
for the purpose of determining the annual budget for improvements and the Annual Installments of Assessments due
in a given year. The determination by the City of the assessment methodology set forth in the Service and Assessment
Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers
and is conclusive and binding on all current and future landowners within the District, including Improvement Areas
#2-3. See “APPENDIX C – Service and Assessment Plan.”
Pledged Revenues
The City is authorized by the PID Act, the Assessment Ordinances, and other provisions of law to finance
the Improvement Areas #2-3 Projects by levying Assessments upon properties in Improvement Areas #2-3 of the
District benefitted thereby. For a description of the assessment methodology and the amounts of Assessments levied
or expected to be levied in Improvement Areas #2-3 of the District, see “ASSESSMENT PROCEDURES” and
“APPENDIX C – Service and Assessment Plan.”
Pursuant to the Indenture:
“Additional Interest” means the 0.50% additional interest charged on the applicable Assessment pursuant to
Section 372.018 of the PID Act.
“Annual Collection Costs” mean the actual or budgeted costs and expenses related to the operation of the
District, including, but not limited to, costs and expenses for: (1) the Administrator; (2) City staff; (3) legal counsel,
engineers, accountants, financial advisors, and other consultants engaged by the City; (4) calculating, collecting, and
maintaining records with respect to each Assessment and Annual Installment; (5) preparing and maintaining records
with respect to Assessment Rolls and Annual Service Plan Updates; (6) paying and redeeming Bonds; (7) investing
or depositing each Assessment and Annual Installment; (8) complying with the Service and Assessment Plan, the PID
Act, and the Indenture, including the City’s continuing disclosure requirements; and (9) the paying agent/registrar and
Trustee in connection with Bonds, including their respective legal counsel. Annual Collection Costs collected but not
expended in any year shall be carried forward and applied to reduce Annual Collection Costs for subsequent years.
“Annual Installment” means the annual installment payment of an Assessment as calculated by the
Administrator and approved by the City Council, that includes: (1) the principal amount of any Assessment; (2) the
interest associated with any Assessment; (3) Additional Interest related to the PID Bonds, if applicable; and (4) Annual
Collection Costs, all as provided in the Service and Assessment Plan.
“Annual Service Plan Update” means an update to the Service and Assessment Plan prepared no less
frequently than annually by the Administrator and approved by the City Council.
“Assessment Revenues” means the applicable revenues received by the City from the collection of applicable
Assessment, including Prepayments, each Annual Installment and Foreclosure Proceeds.
“Delinquent Collection Costs” mean interest, penalties and expenses incurred or imposed with respect to any
delinquent Annual Installment of an Assessment in accordance with §372.018(b) of the PID Act and the costs related
to pursuing collection of a delinquent Assessment and foreclosing the lien against the Assessed Property, including
attorneys’ fees.
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“Foreclosure Proceeds” means the proceeds, including interest and penalty interest, received by the City from
the enforcement of an Assessment against any Assessed Property, whether by foreclosure of lien or otherwise, but
excluding and net of all Delinquent Collection Cost.
“Improvement Area #2-A Assessed Property” means any Parcel within Improvement Area #2-A against
which an Improvement Area #2-A Assessment is levied.
“Improvement Area #2-B Assessed Property” means any Parcel within Improvement Area #2-B against
which an Improvement Area #2-B Assessment is levied.
“Improvement Area #3 Assessed Property” means any Parcel within Improvement Area #3 against which
an Improvement Area #3 Assessment is levied.
“Pledged Funds” means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund, the
Reserve Fund and the Redemption Fund.
“Pledged Revenues” means, collectively, the (i) Assessment Revenues (excluding the portion of the
applicable Assessment and Annual Installment collected for the payment of Annual Collection Costs and Delinquent
Collection Costs, as set forth in the Service and Assessment Plan, ), (ii) the moneys held in any of the Pledged Funds
and (iii) any additional revenues that the City may pledge to the payment of the Bonds.
“Prepayment” means the payment of all or a portion of an Assessment before the due date of the final Annual
Installment thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest,
or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be
treated as the payment of the regularly scheduled Annual Installment.
“Trust Estate” means the Trust Estate described in the granting clauses of the Indenture.
The City will covenant in the Indenture that it will take and pursue all actions permissible under Applicable
Laws to cause the Assessments to be collected and the liens thereof to be enforced continuously. See “SECURITY
FOR THE BONDS – Pledged Revenue Fund.” See also “APPENDIX B – Form of Indenture” and “APPENDIX C –
Service and Assessment Plan.”
The PID Act provides that the Assessments (including any reassessment, with interest, the expense of
collection and reasonable attorney’s fees, if incurred) are a first and prior lien (the “Assessment Lien”) against the
property assessed, superior to all other liens and claims, except liens or claims for State, county, school district, or
municipality ad valorem taxes and are a personal liability of and charge against the owners of property, regardless of
whether the owners are named. Pursuant to the PID Act, the Assessment Liens are effective from the respective dates
of the Assessment Ordinances until the Assessments are paid (or otherwise discharged), and is enforceable by the City
Council in the same manner that an ad valorem property tax levied against real property may be enforced by the City
Council. See “ASSESSMENT PROCEDURES.”
The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed
after the adoption of the respective Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon
if any homestead rights of a property owner were properly claimed prior to the adoption of the respective Assessment
Ordinance (“Pre-existing Homestead Rights”) for as long as such rights are maintained on the property. See
“BONDHOLDERS’ RISKS – Assessment Limitations.”
Collection and Deposit of Assessments
The Assessments shown on the Assessment Rolls, together with the interest thereon, shall first be applied to
the payment of the principal of and interest on the Bonds as and to the extent provided in the Service and Assessment
Plan and the Indenture. In the event the City owes Rebatable Arbitrage to the United States Government, the
Assessments shall first be applied to pay the full amount of Rebatable Arbitrage owed by the City, prior to any transfers
to the Bond Fund.
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The Assessments assessed to pay debt service on the Bonds, together with interest thereon, are payable in
Annual Installments established by the Assessment Ordinances and the Service and Assessment Plan to correspond,
as nearly as practicable, to the debt service requirements for the Bonds. An Annual Installment of an Assessment has
been made payable in the Assessment Ordinances in each fiscal year of the City preceding the date of final maturity
of the Bonds which, if collected, will be sufficient to first pay debt service requirements attributable to Assessments
in the Service and Assessment Plan. Each Annual Installment is payable as provided in the Service and Assessment
Plan and the Assessment Ordinances.
A record of the Assessments on each parcel, tract, or lot which are to be collected in each year during the
term of the Bonds is shown on the Assessment Rolls. Sums received from the collection of the Assessments to pay
the debt service requirements (including delinquent installments, Foreclosure Proceeds, and penalties) and of the
interest thereon shall be deposited into the Bond Pledged Revenue Account of the Pledged Revenue Fund. Promptly
after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure
Proceeds first, to the Reserve Fund to restore any transfers from the Reserve Fund made with respect to the particular
assessed property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and
second, to replenish the Delinquency and Prepayment Reserve Account Requirement), and second, to the Redemption
Fund. See “SECURITY FOR THE BONDS – Pledged Revenue Fund” and “APPENDIX B – Form of Indenture.”
The portions of the Annual Installments of Assessments collected to pay Annual Collection Costs and
Delinquent Collection Costs shall be deposited in the Administrative Fund and shall not constitute Pledged Revenues.
Unconditional Levy of Assessments
The City has imposed the Improvement Area #2-A Assessments on the property within Improvement Area
#2-A of the District and the Improvement Area #2-B Assessments on the property within Improvement Area #2-B of
the District, and will impose the Improvement Area #3 Assessments on the property within Improvement Area #3 of
the District, each to pay the principal of and interest on the Bonds scheduled for payment from Pledged Revenues as
described in the Indenture and in the Service and Assessment Plan and coming due during each Fiscal Year. The
Assessments are effective on the date of, and strictly in accordance with the terms of, the respective Assessment
Ordinance. Each Assessment may be paid in full or in part at any time, or in periodic Annual Installments over a
period of time equal to the term of the Bonds, which installments shall include interest on the Assessments. Pursuant
to the Assessment Ordinances, interest on the Assessments for each lot within Improvement Areas #2-3 of the District
began to accrue on the date specified in the Service and Assessment Plan and, prior to issuance of the Bonds, is
calculated at a rate specified in the respective Assessment Ordinance. After issuance of the Bonds, interest on the
Assessments for each lot within Improvement Areas #2-3 of the District will accrue at a rate specified in the respective
Assessment Ordinance but may not exceed the interest rate on the Bonds plus the 0.50% Additional Interest charged
on Assessments pursuant to Section 372.018 of the Act. Such interest rates may be adjusted as described in the Service
and Assessment Plan. Each Annual Installment, including the interest on the unpaid amount of an Assessment, shall
be calculated annually and shall be due on October 1 of each year. Each Annual Installment together with interest
thereon shall be delinquent if not paid prior to February 1 of the following year.
As authorized by Section 372.018(b) of the PID Act, the City has will levy, assess, and will continue to
collect, each year while the Bonds are Outstanding and unpaid, a portion of each Annual Installment to pay the annual
costs incurred by the City in the administration and operation of the District. The portion of each Annual Installment
used to pay such annual costs shall remain in effect from year to year until all Bonds are finally paid or until the City
adjusts the amount of the levy after an annual review in any year pursuant to Section 372.013 of the PID Act. The
assessments to pay Annual Collection Costs shall be due in the manner set forth in the Assessment Ordinances on
October 1 of each year and shall be delinquent if not paid by February 1 of the following year. Such assessments to
pay Annual Collection Costs do not secure repayment of the Bonds.
There is no discount for the early payment of Assessments.
Assessments, together with interest, penalties, and expense of collection and reasonable attorneys’ fees, as
permitted by the Texas Tax Code, shall be a first and prior lien against the property assessed, superior to all other liens
and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes and shall be a
personal liability of and charge against the owner of the property regardless of whether the owners are named, and
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runs with the land. The lien for Assessments and penalties and interest began on the respective effective date of each
Assessment Ordinance and continues until the Assessments are paid or until all Bonds are finally paid.
Failure to pay an Annual Installment when due will not accelerate the payment of the remaining Annual
Installments of the Assessments and such remaining Annual Installments (including interest) shall continue to be due
and payable at the same time and in the same amount and manner as if such default had not occurred.
Perfected Security Interest
The lien on, security interest in and pledge of the Trust Estate shall be valid and binding and fully perfected
from and after the Delivery Date without physical delivery or transfer of control of the Trust Estate, the filing of the
Indenture or any other act; all as provided in Chapter 1208 of the Texas Government Code, as amended, which applies
to the issuance of the Bonds and the pledge of the Trust Estate granted by the City under the Indenture, and such
pledge is therefore valid, effective and perfected. If State law is amended at any time while the Bonds are Outstanding
such that the pledge of the Trust Estate granted by the City under the Indenture is to be subject to the filing
requirements of Chapter 9, Business and Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are
reasonable and necessary under State law to comply with the applicable provisions of Chapter 9, Business and
Commerce Code and enable a filing to perfect the security interest in said pledge to occur. See “APPENDIX B –
Form of Indenture.”
Pledged Revenue Fund
Immediately upon receipt thereof, the City shall transfer to the Trustee for deposit to the Pledged Revenue
Fund each Assessment and Annual Installment, other than the portion of each Assessment and Annual Installment
allocated to the payment of Annual Collection Costs and Delinquent Collection Costs, which shall be deposited to the
Administrative Fund in accordance with the Indenture. Specifically, following the initial deposit to the Pledged
Revenue Fund, the City shall transfer or cause to be transferred the following amounts from the Pledged Revenue
Fund to the following Accounts: (i) first, to the Bond Pledged Revenue Account of the Pledged Revenue Fund, an
amount sufficient to pay debt service on the Bonds next coming due, and (ii) second, if necessary, to the Reserve
Account of the Reserve Fund, an amount to cause the amount in the Reserve Account to equal the Reserve Account
Requirement. Notwithstanding the foregoing, the Additional Interest shall only be utilized for the purposes set forth
in the Indenture and, immediately following the initial deposit to the Pledged Revenue Fund, prior to any other
transfers or deposits being made under the Indenture, if the Delinquency and Prepayment Reserve Account of the
Reserve Fund does not contain the Delinquency and Prepayment Reserve Requirement and Additional Interest is
collected, then all such Additional Interest will be transferred into the Delinquency and Prepayment Reserve Account
until the Delinquency and Prepayment Reserve Requirement is met. In addition, in the event the City owes Rebatable
Arbitrage to the United States Government pursuant to the Indenture, the City shall provide written direction to the
Trustee to transfer to the Rebate Fund, prior to any other transfer under the Indenture, the full amount of Rebatable
Arbitrage owed by the City, as provided in the Indenture. If any funds remain on deposit in the Pledged Revenue
Fund after the foregoing deposits and the deposits of Prepayments and Foreclosure Proceeds, as described below, are
made, the City shall have the option, in its sole and absolute discretion, to use such excess funds for any one or more
of the following purposes: (1) pay other costs of the Authorized Improvements, (2) pay other costs permitted by the
PID Act, or (3) deposit such excess into the Redemption Fund to redeem Bonds as provided in the Indenture. Along
with each transfer to the Trustee, the City shall provide a certificate as to the funds, accounts and payments into which
the amounts are to be deposited or paid.
From time to time as needed to pay the obligations relating to the Bonds, but no later than five (5) Business
Days before each Interest Payment Date, the Trustee shall withdraw from the Pledged Revenue Fund and transfer to
the Principal and Interest Account of the Bond Fund, an amount, taking into account any amounts then on deposit in
such Principal and Interest Account, such that the amount on deposit in the Principal and Interest Account equals the
principal (including any Sinking Fund Installments) and interest due on the Bonds on the next Interest Payment Date.
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If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there
are insufficient funds to make the payments provided for above, the Trustee shall apply the available funds in the
Principal and Interest Account first to the payment of interest, then to the payment of principal (including any Sinking
Fund Installments) on the Bonds.
The Trustee shall transfer Prepayments to the Redemption Fund promptly after deposit of such amounts into
the Pledged Revenue Fund.
Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer
such Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Accounts within the Reserve
Fund made with respect to the particular Assessed Property to which the Foreclosure Proceeds relate (first to replenish
the Reserve Account Requirement, and second to replenish the Delinquency and Prepayment Reserve Requirement),
and second, to the Redemption Fund.
After satisfaction of the requirement to provide for the final payment of the principal and interest on the
Bonds and to fund any deficiency that may exist in the Reserve Fund, the Trustee shall transfer any Pledged Revenues
remaining in the Pledged Revenue Fund for the purposes set forth in the Indenture, as directed by the City in a City
Order.
Bond Fund
On each Interest Payment Date, the Trustee shall withdraw from the Principal and Interest Account of the
Bond Fund and transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments) and
interest then due and payable on the Bonds.
If amounts in the Principal and Interest Account are insufficient for the purposes set forth in paragraph (a)
above, the Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency pursuant
to the Indenture. Amounts so withdrawn from the Reserve Fund shall be deposited in the Principal and Interest
Account of the Bond Fund and transferred to the Paying Agent/Registrar.
If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there
are insufficient funds to make the payments provided in first paragraph above, the Trustee shall apply the available
funds in the Principal and Interest Account first to the payment of interest, then to the payment of principal (including
any Sinking Fund Installments) on the Bonds.
Project Fund
Money on deposit in the Project Fund shall be used for the purposes specified in the Indenture.
Disbursements from the Costs of Issuance Account of the Project Fund shall be made by the Trustee to pay costs of
issuance of the Bonds pursuant to one or more City Orders.
Disbursements from the Bond Improvement Accounts of the Project Fund to pay Actual Costs shall be made
by the Trustee upon receipt by the Trustee of a properly executed and completed Certificate for Payment. The funds
from the respective Bond Improvement Account of the Project Fund shall be disbursed in accordance with a Certificate
for Payment as described in the Reimbursement Agreement. Each such Certificate for Payment shall include a list of
the payees and the payments to be made to such payees as well as a statement that all payments shall be made by
check or wire transfer in accordance with the payment instructions set forth in such Certificate for Payment or in the
invoices submitted therewith and the Trustee may rely on such payment instructions with no duty to investigate or
inquire as to the authenticity of or authorization for the invoice or the payment instructions contained therein.
Except as provided below, money on deposit in the Improvement Area #2-A Bond Improvement Account of
the Project Fund shall be used solely to pay Actual Costs of the Improvement Area #2-A Projects, money on deposit
in the Improvement Area #2-B Bond Improvement Account of the Project Fund shall be used solely to pay Actual
Costs of the Improvement Area #2-B Projects, and money on deposit in the Improvement Area #3 Bond Improvement
Account of the Project Fund shall be used solely to pay Actual Costs of the Improvement Area #3 Projects.
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If the City Representative determines in his or her sole discretion that amounts then on deposit in any Bond
Improvement Account of the Project Fund are not expected to be expended for purposes of such Bond Improvement
Account of the Project Fund due to the abandonment, or constructive abandonment, of one or more of the Improvement
Areas #2-3 Projects such that, in the opinion of the City Representative, it is unlikely that the amounts in such Bond
Improvement Account of the Project Fund will ever be expended for the purposes of the respective Bond Improvement
Account of the Project Fund, the City Representative shall file a City Order with the Trustee which identifies the
amounts then on deposit in the applicable Bond Improvement Account of the Project Fund that are not expected to be
used for purposes of such Bond Improvement Account of the Project Fund. If such City Order is so filed, the identified
amounts on deposit in such Bond Improvement Account of the Project Fund shall be transferred to the Bond Fund or
to the Redemption Fund as directed by the City Representative in a City Order filed with the Trustee. Upon such
transfers, the applicable Bond Improvement Account of the Project Fund shall be closed.
In making any determination pursuant to the Indenture, the City Representative may conclusively rely upon
a certificate of an Independent Financial Consultant.
Upon the filing of a City Order stating that all Improvement Area #2-A Projects, Improvement Area #2-B
Projects, or Improvement Area #3 Projects, as applicable in the relevant context, have been completed and that all
Actual Costs have been paid with respect thereto, or that any Actual Costs are not required to be paid from the
respective Bond Improvement Account of the Project Fund pursuant to a Certificate for Payment, the Trustee shall
transfer the amount, if any, remaining within the respective Bond Improvement Account of the Project Fund to the
Bond Fund or to the Redemption Fund as directed by the City Representative in a City Order filed with the Trustee.
Upon such transfer, the respective Bond Improvement Account of the Project Fund shall be closed.
Upon a determination by the City Representative that all costs of issuance of the Bonds have been paid, any
amounts remaining in the Costs of Issuance Account shall be transferred to the Principal and Interest Account and
used to pay interest on the Bonds, as directed in a City Order filed with the Trustee, and the Costs of Issuance Account
shall be closed.
In the event the Developer has not completed the Improvement Areas #2-3 Projects by December 18, 2030,
then the City may provide written direction to the Trustee to (i) transfer all funds on deposit in the Bond Improvement
Accounts of the Project Fund to the Redemption Fund to redeem Bonds pursuant to the Indenture. Upon such transfers,
the Bond Improvement Accounts of the Project Fund shall be closed.
Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account)
Pursuant to the Indenture, a Reserve Account will be created within the Reserve Fund, held by the Trustee
for the benefit of the Bonds, and initially funded with proceeds of the Bonds in the amount of the Reserve Account
Requirement. Pursuant to the Indenture, the “Reserve Account Requirement” for the Bonds shall be the least of (i)
Maximum Annual Debt Service on the Bonds as of their date of issuance, (ii) 125% of average Annual Debt Service
on the Bonds as of their date of issuance, and (iii) 10% of the proceeds of the Bonds, however, that such amount shall
be reduced by the amount of any transfers made to the Redemption Fund as a result of Prepayments; and provided
further that as a result of (1) an optional redemption or (2) an extraordinary optional redemption, the Reserve Account
Requirement shall be reduced by a percentage equal to the pro rata principal amount of Bonds redeemed by such
redemption divided by the total principal amount of the Outstanding Bonds prior to such redemption. As of the date
of issuance of the Bonds, the Reserve Account Requirement is $ .
The City agrees with the Owners of the Bonds to accumulate and, when accumulated, maintain in the Reserve
Account, an amount equal to not less than the Reserve Account Requirement. All amounts deposited in the Reserve
Account shall be used and withdrawn by the Trustee for the purpose of making transfers to the Principal and Interest
Account of the Bond Fund as provided in the Indenture. The Trustee will transfer from the Pledged Revenue Fund to
the Delinquency and Prepayment Reserve Account on March 15 of each year, commencing March 15, 2026, an
amount equal to the Additional Interest until the Delinquency and Prepayment Reserve Requirement has been
accumulated in the Delinquency and Prepayment Reserve Account; provided, however, that at any time the amount
on deposit in the Delinquency and Prepayment Reserve Account is less than Delinquency and Prepayment Reserve
Requirement, the Trustee shall resume depositing the Additional Interest into the Delinquency and Prepayment
Reserve Account until the Delinquency and Prepayment Reserve Requirement has accumulated in the Delinquency
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and Prepayment Reserve Account. In calculating the amounts to be transferred pursuant to the Indenture, the Trustee
may conclusively rely on the Annual Installment as shown on the applicable Assessment Roll in the Service and
Assessment Plan unless and until it receives a City Order directing that a different amount be used. The Additional
Interest shall continue to be collected and deposited pursuant to the Indenture until the Bonds are no longer
Outstanding.
“Delinquency and Prepayment Reserve Requirement” means an amount equal to 5.5% of the principal
amount of the then Outstanding Bonds to be funded from Additional Interest deposited to the Pledged Revenue Fund
and transferred to the Delinquency and Prepayment Reserve Account..
Whenever a transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund,
the Trustee shall provide written notice thereof to the City, specifying the amount withdrawn and the source of said
funds.
In the event of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment pursuant
to the Indenture, the Trustee, pursuant to prior written directions from the City, shall transfer from the Reserve Account
of the Reserve Fund to the Redemption Fund the amount specified in such directions, which shall be an amount equal
to the principal amount of Bonds to be redeemed multiplied by the lesser of: (i) the amount required to be in the
Reserve Account of the Reserve Fund divided by the principal amount of Outstanding Bonds prior to the redemption,
and (ii) the amount actually in the Reserve Account of the Reserve Fund divided by the principal amount of
Outstanding Bonds prior to the redemption. If after such transfer, and after applying investment earnings on the
Prepayment toward payment of accrued interest, there are insufficient funds to pay the principal amount plus accrued
and unpaid interest on such Bonds to the date fixed for redemption of the Bonds to be redeemed as a result of such
Prepayment, the Trustee shall transfer an amount equal to the shortfall or any additional amounts to permit the
redemption of Bonds to be redeemed in minimum principal amounts of $1,000 from the Delinquency and Prepayment
Reserve Account to the Redemption Fund to be applied to the redemption of the Bonds.
Whenever, on any Interest Payment Date, or on any other date at the request of a City Representative, the
value of cash and Value of Investment Securities on deposit in the Reserve Account exceeds the Reserve Account
Requirement, the Trustee shall provide written notice to the City Representative of the amount of the excess. Such
excess shall be transferred to the Principal and Interest Account to be used for the payment of interest on the Bonds
on the next Interest Payment Date in accordance with the Indenture, unless within thirty days of such notice to the
City Representative, the Trustee receives a City Order instructing the Trustee to apply such excess: (i) to pay amounts
due for Rebatable Arbitrage under the Indenture, (ii) to the Administrative Fund in an amount not more than the
Annual Collection Costs for the Bonds, (iii) to one or more Bond Improvement Accounts of the Project Fund to pay
Actual Costs if such application and the expenditure of funds is expected to occur within three years of the date of the
Indenture, or (iv) to the Redemption Fund to be applied to the redemption of the Bonds.
Whenever, on any Interest Payment Date, or on any other date at the written request of the City
Representative, the amounts on deposit in the Delinquency and Prepayment Reserve Account exceed the Delinquency
and Prepayment Reserve Requirement, the Trustee shall provide written notice to the City of the amount of the excess,
and such excess shall be transferred, at the direction of the City pursuant to a City Order, to the Administrative Fund
for the payment of Annual Collection Costs or to the Redemption Fund. In the event that the Trustee does not receive
a City Order directing the transfer of such excess to the Administrative Fund within 45 days of providing notice to the
City of such excess, the Trustee shall transfer such excess to the Redemption Fund to redeem Bonds pursuant to the
Indenture and provide the City with written notification of the transfer. The Trustee shall incur no liability for the
accuracy or validity of the transfer so long as the Trustee made such transfer in full compliance with the Indenture.
Whenever, on any Interest Payment Date, the amount on deposit in the Bond Fund is insufficient to pay the
debt service on the Bonds due on such date, the Trustee shall transfer first from the Delinquency and Prepayment
Reserve Account of the Reserve Fund and second from the Reserve Account of the Reserve Fund to the Bond Fund
the amounts necessary to cure such deficiency.
At the final maturity of the Bonds, the amount on deposit in the Reserve Account and the Delinquency and
Prepayment Reserve Account shall be transferred to the Principal and Interest Account of the Bond Fund and applied
to the payment of the principal of the Bonds.
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If, after a Reserve Account withdrawal, the amount on deposit in the Reserve Account is less than the Reserve
Account Requirement, the Trustee shall transfer from the Pledged Revenue Fund to the Reserve Account the amount
of such deficiency, but only to the extent that such amount is not required for the timely payment of principal, interest,
or Sinking Fund Installments.
If the amount held in the Reserve Fund together with the amount held in the Pledged Revenue Fund, the
Bond Fund and Redemption Fund is sufficient to pay the principal amount and of all Outstanding Bonds on the next
date the Bonds may be optionally redeemed by the City at a redemption price of par, together with the unpaid interest
accrued on such Bonds as of such date, the moneys shall be transferred to the Redemption Fund and thereafter used
to redeem all Bonds on such date.
Administrative Fund
Immediately upon receipt thereof, the City shall deposit or cause to be deposited to the Administrative Fund
the portion of each Assessment and Annual Installment allocated to the payment of Annual Collection Costs and
Delinquent Collection Costs, as set forth in the Service and Assessment Plan.
Moneys in the Administrative Fund shall be held by the Trustee separate and apart from the other Funds
created and administered under the Indenture and used as directed by a City Order solely for the purposes set forth in
the Service and Assessment Plan, including payment of Annual Collection Costs and Delinquent Collection Costs.
The Administrative Fund shall not be part of the Trust Estate and shall not be security for the Bonds. See “APPENDIX
C – Service and Assessment Plan.”
THE ADMINISTRATIVE FUND IS NOT PART OF THE TRUST ESTATE AND IS NOT
SECURITY FOR THE BONDS.
Defeasance
Any Outstanding Bonds shall, prior to the Stated Maturity or redemption date thereof, be deemed to have
been paid and no longer Outstanding within the meaning of the Indenture (a “Defeased Debt”), when payment of the
principal of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof (whether such due
date be by reason of maturity, redemption, or otherwise), either (1) shall have been made in accordance with the terms
thereof, or (2) shall have been provided by irrevocably depositing with the Trustee, in trust, and irrevocably set aside
exclusively for such payment, (A) money sufficient to make such payment or (B) Defeasance Securities that mature
as to principal and interest in such amount and at such times as will insure the availability, without reinvestment, of
sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of the Trustee
pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof
provided for to the satisfaction of the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee
pursuant to the Indenture nor principal or interest payments on any such Defeasance Securities shall be withdrawn or
used for any purpose other than, and shall be held in trust for, the payment of the principal of and interest on the
Bonds. Any cash received from such principal of and interest on such Defeasance Securities deposited with the
Trustee, if not then needed for such purpose, shall be reinvested in Defeasance Securities as directed by the City
maturing at times and in amounts sufficient to pay when due the principal of and interest on the Bonds on and prior
to such redemption date or maturity date thereof, as the case may be. Any payment for Defeasance Securities
purchased for the purpose of reinvesting cash as aforesaid shall be made only against delivery of such Defeasance
Securities.
“Defeasance Securities” means Investment Securities then authorized by applicable law for the investment
of funds to defease public securities. “Investment Securities” means those authorized investments described in the
Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, which investments are, at the time
made, included in and authorized by the City’s official investment policy as approved by the City Council from time
to time. Under current State law, Investment Securities that are authorized for the investment of funds to defease
public securities are (a) direct, noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America; (b) noncallable obligations of an agency or
instrumentality of the United States of America, 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
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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, 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.
There is no assurance that the current law will not be changed in a manner which would permit investments
other than those described above to be made with amounts deposited to defease the Bonds. Because the Indenture does
not contractually limit such investments, Owners may be deemed to have consented to defeasance with such other
investments, notwithstanding the fact that such investments may not be of the same investment quality as those
currently permitted under State law. There is no assurance that the ratings for U.S. Treasury securities used as
Defeasance Securities or that for any other Defeasance Security will be maintained at any particular rating category.
Events of Default
Each of the following occurrences or events constitutes an “Event of Default” under the Indenture:
i. The failure of the City to deposit the Pledged Revenues to the Pledged Revenue Fund;
ii. The failure of the City to enforce the collection of each Assessment including the prosecution of
foreclosure proceedings, in accordance with Section 7.2; and
iii. Default in the performance or observance of any covenant, agreement or obligation of the City under
the Indenture, other than a default under (iv) below, and the continuation thereof for a period of
ninety (90) days after written notice specifying such default and requiring same to be remedied shall
have been given to the City by the Trustee, which shall give such notice at the written request of the
Owners of not less than fifty-one percent (51%) in principal amount of the Bonds then Outstanding;
provided, however, if the default stated in the notice is capable of cure but cannot reasonably be
cured within the applicable period, the City shall be entitled to a further extension of time reasonably
necessary to remedy such default so long as corrective action is instituted by the City within the
applicable period and is diligently pursued until such failure is corrected, but in no event for a period
of time of more than one hundred eighty (180) days after such notice.
iv. The failure to make payment of the principal of or interest on any of the Bonds when the same
becomes due and payable and such failure is not remedied within thirty (30) days thereafter.
The Trustee shall not be charged with knowledge of (a) any events or other information, or (b) any default
under the Indenture or any other agreement unless a responsible officer of the Trustee shall have actual knowledge
thereof.
Remedies in Event of Default
Subject to the Indenture, upon the happening and continuance of any of the Events of Default described in
the Indenture, then and in every such case the Trustee may proceed, and upon the written request of the Owners of not
less than fifty-one percent (51%) in principal amount of the Bonds then Outstanding under the Indenture shall proceed,
to protect and enforce the rights of the Owners under the Indenture, by action seeking mandamus or by other suit,
action, or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief to the extent
permitted by Applicable Laws, including, but not limited to, the specific performance of any covenant or agreement
contained in the Indenture, or injunction; provided, however, that no action for money damages against the City may
be sought or shall be permitted.
THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY
CIRCUMSTANCES.
If the assets of the Trust Estate are sufficient to pay all amounts due with respect to Outstanding Bonds, in
the selection of Trust Estate assets to be used in the payment of Bonds due under the Indenture, the City shall
20
determine, in its absolute discretion, and shall instruct the Trustee by City Order, which Trust Estate assets shall be
applied to such payment and shall not be liable to any Owner or other Person by reason of such selection and
application. In the event that the City shall fail to deliver to the Trustee such City Order, the Trustee shall select and
liquidate or sell Trust Estate assets as provided in the following paragraph, and shall not be liable to any Owner, or
other Person, or the City by reason of such selection, liquidation or sale.
Whenever moneys are to be applied pursuant to the Indenture, irrespective of and whether other remedies
authorized under the Indenture shall have been pursued in whole or in part, the Trustee may cause any or all of the
assets of the Trust Estate, including Investment Securities, to be sold. The Trustee may so sell the assets of the Trust
Estate and all right, title, interest, claim and demand thereto and the right of redemption thereof, in one or more parts,
at any such place or places, and at such time or times and upon such notice and terms, specifically, in inverse order of
value pursuant to a certified appraisal of real or personal property or market value of investments as set forth in the
U.S. Stock Exchange, and as may be required by law and apply the proceeds thereof in accordance with the provisions
of the Indenture. Upon such sale, the Trustee may make and deliver to the purchaser or purchasers a good and sufficient
assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the City,
and all other Persons claiming such properties. No purchaser at any sale shall be bound to see to the application of the
purchase money proceeds thereof or to inquire as to the authorization, necessity, expediency, or regularity of any such
sale. Nevertheless, if so requested by the Trustee, the City shall ratify and confirm any sale or sales by executing and
delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or, in the
reasonable judgment of the Trustee, proper for the purpose which may be designated in such request.
Restriction on Owner’s Actions
No Owner shall have any right to institute any action, suit or proceeding at law or in equity for the
enforcement of the Indenture or for the execution of any trust thereof or any other remedy under the Indenture, unless
(i) a default has occurred and is continuing of which the Trustee has been notified in writing as provided in the
Indenture, or of which by the provisions of the Indenture it is deemed to have notice, (ii) such default has become an
Event of Default and the Owners of not less than fifty-one percent (51%) of the aggregate principal amount of the
Bonds then Outstanding have made written request to the Trustee and offered it reasonable opportunity either to
proceed to exercise the powers granted in the Indenture or to institute such action, suit or proceeding in its own name,
(iii) the Owners have furnished to the Trustee written evidence of indemnity as provided in the Indenture, (iv) the
Trustee has for 60 days after such notice failed or refused to exercise the powers granted in the Indenture, or to institute
such action, suit, or proceeding in its own name, (v) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Owners of not less than fifty-one percent (51%) of the aggregate
principal amount of the Bonds then Outstanding, and (vi) notice of such action, suit, or proceeding is given to the
Trustee; however, no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect,
disturb, or prejudice the Indenture by its, his or their action or to enforce any right under the Indenture except in the
manner provided in the Indenture, and that all proceedings at law or in equity shall be instituted and maintained in the
manner provided in the Indenture and for the equal benefit of the Owners of all Bonds then Outstanding. The
notification, request and furnishing of indemnity set forth above shall be conditions precedent to the execution of the
powers and trusts of the Indenture and to any action or cause of action for the enforcement of the Indenture or for any
other remedy under the Indenture.
Subject to the Indenture, nothing in the Indenture shall affect or impair the right of any Owner to enforce, by
action at law, payment of any Bond at and after the maturity thereof, or on the date fixed for redemption or the
obligation of the City to pay each Bond issued under the Indenture to the respective Owners thereof at the time and
place, from the source and in the manner expressed in the Indenture and in the Bonds.
In case the Trustee or any Owners of Bonds shall have proceeded to enforce any right under the Indenture
and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee or any Owners of Bonds, then and in every such case the City, the Trustee and the Owners of
Bonds shall be restored to their former positions and rights under the Indenture, and all rights, remedies and powers
of the Trustee shall continue as if no such proceedings had been taken.
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Application of Revenues and Other Moneys After Event of Default
All moneys, securities, funds and Pledged Revenues and the income therefrom received by the Trustee
pursuant to any right given or action taken under the provisions of the Indenture shall, after payment of the cost and
expenses of the proceedings resulting in the collection of such amounts, the expenses (including its counsel), liabilities,
and advances incurred or made by the Trustee and the fees of the Trustee in carrying out the Indenture, during the
continuance of an Event of Default, notwithstanding certain provisions set forth in the Indenture, be applied by the
Trustee, on behalf of the City, to the payment of interest and principal or Redemption Price then due on Bonds, as
follows:
FIRST: To the payment to the Owners entitled thereto all installments of interest then due in the direct
order of maturity of such installments, and, if the amount available shall not be sufficient to pay in full any
installment, then to the payment thereof ratably, according to the amounts due on such installment, to the
Owners entitled thereto, without any discrimination or preference; and
SECOND: To the payment to the Owners entitled thereto of the unpaid principal of Outstanding
Bonds, or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for
redemption, in the direct order of their due dates and, if the amounts available shall not be sufficient to pay in
full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal
due and to the Owners entitled thereto, without any discrimination or preference.
The Trustee shall make payments to the Owners of Bonds pursuant to the Indenture within thirty (30) days
of receipt of such good and available funds, and the record date shall be the date the Trustee receives such good and
available funds.
In the event funds are not adequate to cure any of the Events of Default described in the Indenture, the
available funds shall be allocated to the Bonds that are Outstanding in proportion to the quantity of Bonds that are
currently due and in default under the terms of the Indenture.
The restoration of the City to its prior position after any and all defaults have been cured, as provided in the
Indenture, shall not extend to or affect any subsequent default under the Indenture or impair any right consequent
thereon.
Investment or Deposit of Funds
Money in any Fund or Account, other than the Reserve Fund, shall be invested by the Trustee in Investment
Securities as directed by the City pursuant to a City Order filed with the Trustee; provided that all such deposits and
investments shall be made in such manner that the money required to be expended from any Fund or Account will be
available at the proper time or times. Money in the Reserve Fund shall be invested in such Investment Securities as
directed by the City pursuant to a City Order filed with the Trustee, provided that the final maturity of any individual
Investment Security shall not exceed 270 days and the average weighted maturity of any investment pool or no-load
money market mutual fund shall not exceed 90 days. Each such City Order shall be a certification, upon which the
Trustee may conclusively rely without investigation or inquiry, that the investment directed therein constitutes an
Investment Security and that such investments meet the maturity and average weighted maturity requirements set forth
in the preceding sentence. Such investments shall be valued each year in terms of the Value of Investment Securities
as of September 30. For purposes of maximizing investment returns, to the extent permitted by law, money in the
Funds and Accounts may be invested in common investments of the kind described above, or in a common pool of
such investment which shall be kept and held at an official depository bank, which shall not be deemed to be or
constitute a commingling of such money or funds provided that safekeeping receipts or certificates of participation
clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased
with such money or owned by such Fund or Account are held by or on behalf of each such Fund or Account. If
necessary, such investments shall be promptly sold to prevent any default under the Indenture. To ensure that cash
on hand is invested, if the City does not give the Trustee written or timely instructions with respect to investments of
funds, the Trustee is hereby directed to invest and re-invest cash balances in investments authorized and permitted
under the Public Funds Investment Act, Texas Government Code, Chapter 2256, as amended, or any successor law,
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and only so long as such investments constitute Investment Securities and the money required to be expended from
any Fund will be available at the proper time or times.
Obligations purchased as an investment of moneys in any Fund or Account shall be deemed to be part of
such Fund or Account, subject, however, to the requirements of the Indenture for transfer of interest earnings and
profits resulting from investment of amounts in Funds and Accounts. Whenever in the Indenture any moneys are
required to be transferred by the City to the Trustee, such transfer may be accomplished by transferring a like amount
of Investment Securities.
Against Encumbrances
Other than Refunding Bonds, the City shall not create and, to the extent Pledged Revenues are received, shall
not suffer to remain, any lien, encumbrance or charge upon the Trust Estate or upon any other property pledged under
the Indenture, except the pledge created for the security of the Bonds, and other than a lien or pledge subordinate to
the lien and pledge of such property related to the Bonds.
So long as Bonds are Outstanding under the Indenture, the City shall not issue any bonds, notes or other
evidences of indebtedness, other than the Bonds and Refunding Bonds, secured by any pledge of or other lien or
charge on the Trust Estate or other property pledged under the Indenture, other than a lien or pledge subordinate to
the lien and pledge of such property related to the Bonds.
Additional Obligations
The City reserves the right to issue obligations under other indentures, assessment ordinances, or similar
agreements or other obligations which do not constitute or create a lien on the Trust Estate and are not payable from
Trust Estate, or any portion thereof.
Other than Refunding Bonds, the City will not create or voluntarily permit to be created any debt, lien or
charge on the Trust Estate, or any portion thereof, and will not do or omit to do or suffer to be done or omit to be done
any matter or things whatsoever whereby the lien of the Indenture or the priority hereof might or could be lost or
impaired; provided, however, that the City has reserved the right to issue bonds or other obligations secured by and
payable from the Trust Estate so long as such pledge is subordinate to the pledge of the Trust Estate securing payment
of the Bonds.
Notwithstanding any contrary provision of the Indenture, but subject to certain provisions of the Indenture,
the City shall not issue additional bonds, notes or other obligations under the Indenture, secured by any pledge of or
other lien or charge on the Trust Estate or other property pledged under the Indenture, other than Refunding Bonds.
The City reserves the right to issue Refunding Bonds, the proceeds of which would be utilized to refund all or any
portion of the Outstanding Bonds or Outstanding Refunding Bonds and to pay all costs incident to the Refunding
Bonds, as authorized by the laws of the State.
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SOURCES AND USES OF FUNDS
The following table summarizes the expected sources and uses of proceeds of the Bonds:
Sources of Funds:
Principal Amoun
Total Sources
Uses of Funds:
Deposit to Improvement Area #2-A Bond Improvemen Account of the Pro ect Fun
Deposit to Improvement Area #2-B Bond Improvemen Account of the Pro ect Fun
Deposit to Improvement Area #3 Bond Improvement Account of the Pro ect Fun
Deposit to Costs of Issuance Account of the Pro ect Fun
Deposit to Reserve Account of the Reserve Fun
Deposit to Administrative Fun
Underwriter’s Discount (1)
Total Uses
(1) Includes Underwriter’s Counsel’s fee.
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DEBT SERVICE REQUIREMENTS
The following table sets forth the debt service requirements for the Bonds:
Year Ending
(September 30)
Principal
Interest
Total
2026
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
Total
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OVERLAPPING TAXES AND DEBT
Overlapping Taxes and Debt
The land within Improvement Areas #2-3 of the District has been, and is expected to continue to be, subject
to taxes and assessments imposed by taxing entities other than the City. Such taxes are payable in addition to the
Assessments.
In addition to the City, Collin County, Texas, the Collin County Community College District, and the Anna
Independent School District may each levy ad valorem taxes upon land in Improvement Areas #2-3 of the District for
payment of debt incurred by such governmental entities and/or for payment of maintenance and operations expenses.
The City has no control over the level of ad valorem taxes or special assessments levied by such other taxing
authorities.
The following table shows the overlapping ad valorem tax rates currently levied on property located in
Improvement Areas #2-3 of the District.
Improvement
Area #2-A
Improvement
Area #2-B
Improvement
Area #3
Taxin Entit
Tax Year 2025
Ad Valorem Tax Rate (1)
Tax Year 2025
Ad Valorem Tax Rate (1)
Tax Year 2025
Ad Valorem Tax Rate (1)
The Cit $0.525073 $0.525073 $0.525073
Collin Count , Texas 0.149343 0.149343 0.149343
Collin County Community College
Distric
0.081220 0.081220 0.081220
Anna Independent School District 1.239900 1.239900 1.239900
Total Existing Tax Rate $1.995536 $1.995536 $1.995536
Estimated Average Annual
Installment of Assessments as a tax
rate equivalent (2) $0.4746704 $0.714905 $0.769815
Estimated Total Tax Rate and
Average Annual Installment as a
tax rate equivalent (2) $2.470206 $2.710441 $2.765351
________________________________
(1) As reported by the taxing entities. Per $100 in taxable assessed value.
(2) Preliminary, subject to change. Derived from information presented in the Service and Assessment Plan. See “APPENDIX C – Service
and Assessment Plan.” Assumes completion of homes at values estimated by the Developer. See “THE DEVELOPMENT – Expected
Build-Out and Home Prices in the Development.”
Sources: Collin Central Appraisal District, the City, and the Administrator.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
26
As noted above, Improvement Areas #2-3 of the District includes territory located in other governmental
entities that may issue or incur debt secured by the levy and collection of ad valorem taxes or assessments. Set forth
below is an overlapping debt table showing the outstanding indebtedness payable from ad valorem taxes with respect
to property within Improvement Areas #2-3 of the District, and City debt secured by the Assessments:
Improvement Area #2-A
Taxin or Assessin Entit
Gross
Outstanding Debt
as of 10/1/2025
Estimated
Percentage
Applicable (1)
Direct and
Estimated
Overlappin Deb (1)
The City (Assessments – The Bonds) $ 1,731,000 100.000% $1,731,000
The Cit (Ad Valorem Taxes) 261,831,000 0.203% 532,591
Collin Count , Texas 982,755,000 0.004% 37,102
Collin Count Communit Colle e Distric 438,250,000 0.004% 17,693
Anna Independent School Distric 444,228,846 0.223% 989,445
TOTAL $2,128,795,846 $3,307,831
(1) Based on an estimated market value of $9,000,000 for finished lots in Improvement Area #2-A of the District using the $2,000/front foot
value of lots shown for lots in Improvement Area #3 as set forth in Appraisal and the Tax Year 2025 Net Taxable Assessed Valuations for
the taxing entities. See “APPRAISAL.” It is noted that Improvement Area #2-A was not the subject of the Appraisal.
Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas
Improvement Area #2-B
Taxin or Assessin Entit
Gross
Outstanding Debt
as of 10/1/2025
Estimated
Percentage
Applicable (1)
Direct and
Estimated
Overlappin Debt (1)
The City (Assessments – The Bonds) $ 3,866,000 100.000% $3,866,000
The Cit (Ad Valorem Taxes) 261,831,000 0.266% 697,103
Collin Count , Texas 982,755,000 0.005% 48,562
Collin Count Communit Colle e Distric 438,250,000 0.005% 23,158
Anna Independent School Distric 444,228,846 0.292% 1,295,074
TOTAL $2,130,930,846 $5,929,897
(1) Based on an estimated market value of $11,780,000 for finished lots in Improvement Area #2-B of the District using the $2,000/front foot
value of lots shown for lots in Improvement Area #3 as set forth in Appraisal and the Tax Year 2025 Net Taxable Assessed Valuations for
the taxing entities. See “APPRAISAL.” It is noted that Improvement Area #2-B was not the subject of the Appraisal.
Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas
Improvement Area #3
Taxin or Assessin Entit
Gross
Outstanding Debt
as of 10/1/2025
Estimated
Percentage
Applicable (1)
Direct and
Estimated
Overlappin Debt (1)
The City (Assessments – The Bonds) $ 18,380,000 100.000% $18,380,000
The Cit (Ad Valorem Taxes) 261,831,000 0.940% 2,462,003
Collin Count , Texas 982,755,000 0.017% 171,510
Collin Count Communit Colle e Distric 438,250,000 0.019% 81,790
Anna Independent School Distric 444,228,846 1.030% 4,573,898
TOTAL $2,145,444,846 $25,669,201
(1) Based on the estimated market value for Improvement Areas #3 of the District as set forth in the Appraisal and the Tax Year 2025 Net Taxable
Assessed Valuations for the taxing entities. See “APPRAISAL.”
Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas
27
Homeowners’ Association
In addition to the Assessments described above, the Developer anticipates that each Lot owner in the District
will pay a property owner’s association fee to The Woods at Lindsey Place Residential Community, Inc., the
homeowner association for the District (the “HOA”), in the approximate amount of $480 annually.
ASSESSMENT PROCEDURES
Capitalized terms used under this caption and not otherwise defined in the Indenture or this Limited Offering
Memorandum have the meanings assigned to such terms in the Service and Assessment Plan.
General
As required by the PID Act, when the City determines to defray a portion of the costs of the Improvement
Areas #2-3 Projects through Assessments, it must adopt a resolution generally describing the Improvement Areas #2-
3 Projects and the land within Improvement Areas #2-3 of the District to be subject to Assessments to pay the cost
therefor. The City has caused the Improvement Area #2-A Assessment Roll and Improvement Area #2-B Assessment
Roll to be prepared, and will prepare the Improvement Area #3 Assessment Roll, which shows the land within each
Improvement Area to be assessed, the amount of the benefit to and the Assessment against each lot or parcel of land,
and the number of Annual Installments in which the Assessment is divided in each Improvement Area respectively.
The Assessment Rolls were filed with the City Secretary and made available for public inspection. Statutory notice
was given to the owners of the property to be assessed and a public hearing was conducted or will be conducted to
hear testimony from affected property owners as to the propriety and advisability of undertaking the Improvement
Areas #2-3 Projects and funding a portion of the same with Assessments. The City levied the Improvement Area #2
Assessments and adopted the Improvement Area #2 Assessment Ordinance on August 27, 2024. After adoption of
the Improvement Area #2 Assessment Ordinance, the Improvement Area #2 Assessments became legal, valid, and
binding liens upon the property against which the Improvement Area #2 Assessments were made. The City expects
to adopt the Improvement Area #3 Assessment Ordinance immediately prior to adopting the Bond Ordinance. After
the adoption of the Improvement Area #3 Assessment Ordinance, the Improvement Area #3 Assessments will become
legal, valid, and binding liens upon the property against which the Improvement Area #3 Assessments were made.
Under the PID Act, the Actual Costs of the Improvement Areas #2-3 Projects may be assessed by the City
against the assessable property in Improvement Areas #2-3 of the District so long as the special benefit conferred upon
the Assessed Property by the Improvement Areas #2-3 Projects equals or exceeds the Assessments. The costs of the
Improvement Areas #2-3 Projects may be assessed using any methodology that results in the imposition of equal
shares of cost on Assessed Property similarly benefited. The allocation of benefits and assessments to the benefitted
land within the District, including land in Improvement Areas #2-3, is set forth in the Service and Assessment Plan,
which should be read in its entirety. See “APPENDIX C – Service and Assessment Plan.”
Assessment Methodology
The Service and Assessment Plan describes the special benefit to be received by each parcel of assessable
property as a result of the Improvement Areas #2-3 Projects, provides the basis and justification for the determination
that such special benefit exceeds the Assessments levied or being levied, and establishes the methodology by which
the City allocates the special benefit of the Improvement Areas #2-3 Projects to parcels in a manner that results in
equal shares of costs being apportioned to parcels similarly benefited. As described in the Service and Assessment
Plan, a portion of the costs of the Improvement Areas #2-3 Projects are being funded with proceeds of the Bonds,
which are payable from Pledged Revenues, including Assessment Revenues, and other assets comprising the Trust
Estate. As set forth in the Service and Assessment Plan, the City Council has determined that the Actual Costs
associated with the Improvement Areas #2-3 Projects will be allocated to the Assessed Property by spreading the
respective Assessment across the respective Assessed Property within Improvement Areas #2-3 of the District based
on the ratio of Estimated Buildout Value of each Lot Type in the respective Improvement Area to the Estimated
Buildout Value of all Assessed Property within such Improvement Area.
The following table provides additional analysis with respect to assessment methodology, including the value
to Assessment burden ratio per Lot Type, equivalent tax rate per Lot Type, and leverage per Lot Type related to the
28
Assessments applicable to Improvement Areas #2-3. The information in the table was obtained from and calculated
using information provided in the Service and Assessment Plan. See “APPENDIX C – Service and Assessment Plan.”
LIEN TO VALUE ANALYSIS, ASSESSMENT ALLOCATION, EQUIVALENT TAX RATE,
AND LEVERAGE PER LOT TYPE IN IMPROVEMENT AREA #2-A
Lot
Type
Planned
No. of
Lots
Estimated
Finished
Value per
Lot(1)
Projected
Average
Home Value(2)
Assessment per
Lot
Average
Annual
Installment of
Assessment
Tax Rate
Equivalent of
Average Annual
Installment of
Assessment per
$100/Home Value
Estimated
Ratio of
Estimated
Finished
Value per
Lot to
Assessment
Estimated
Ratio of
Projected
Average
Home Value
to Assessment
60’ 75 $120,000 $385,000 $23,080.00 $1,827.48 $0.474670 5.20:1 16.68:1
* Preliminary, subject to change.
(1) Estimated value based on the $2,000/front foot value for lots shown in the Appraisal for lots in Improvement Area #3.
(2) Provided by Developer.
Source: P3Works, LLC and information presented in the Service and Assessment Plan
LIEN TO VALUE ANALYSIS, ASSESSMENT ALLOCATION, EQUIVALENT TAX RATE,
AND LEVERAGE PER LOT TYPE IN IMPROVEMENT AREA #2-B
Lot
Type
Planned
No. of
Lots
Estimated
Finished
Value per
Lot(1)
Projected
Average
Home Value(2)
Assessment per
Lot
Average
Annual
Installment of
Assessment
Tax Rate
Equivalent of
Average Annual
Installment of
Assessment per
$100/Home Value
Estimated
Ratio of
Estimated
Finished
Value per
Lot to
Assessment
Estimated
Ratio of
Projected
Average
Home Value
to Assessment
40’ 26 $80,000 $300,000 $28,106.14 $2,144.71 $0.714905 2.85:1 10.67:1
50’ 97 $100,000 $345,000 $32,322.06 $2,466.42 $0.714905 3.09:1 10.67:1
* Preliminary, subject to change.
(1) Estimated value based on the $2,000/front foot value for lots shown in the Appraisal for lots in Improvement Area #3.
(2) Provided by Developer.
Source: P3Works, LLC and information presented in the Service and Assessment Plan
LIEN TO VALUE ANALYSIS, ASSESSMENT ALLOCATION, EQUIVALENT TAX RATE,
AND LEVERAGE PER LOT TYPE IN IMPROVEMENT AREA #3
Lot
Type
Planned
No. of
Lots
Estimated
Finished
Value per
Lot(1)
Projected
Average
Home Value(2)
Assessment per
Lot
Average
Annual
Installment of
Assessment
Tax Rate
Equivalent of
Average Annual
Installment of
Assessment per
$100/Home Value
Estimated
Ratio of
Estimated
Finished
Value per
Lot to
Assessment
Estimated
Ratio of
Projected
Average
Home Value
to Assessment
TH 91 $46,200 $275,000 $27,730.08 $2,116.99 $0.769815 2.26:1 9.92:1
40’ 340 $80,000 $350,000 $35,292.83 $2,694.35 $0. 769815 2.26:1 9.92:1
50’ 102 $100,000 $375,000 $37,813.74 $2,886.80 $0. 769815 2.26:1 9.92:1
* Preliminary, subject to change.
(1) Based on the Appraisal.
(2) Provided by Developer.
Source: P3Works, LLC and information presented in the Service and Assessment Plan
29
For further explanation of the Assessment methodology, see “APPENDIX C – Service and Assessment Plan.”
The City has determined that the foregoing method of allocation will result in the imposition of equal shares
of the Assessments on parcels similarly situated within Improvement Areas #2-3 of the District. The Assessments
and interest thereon are expected to be paid in Annual Installments as described above. The determination by the City
of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise
by the City Council of its legislative authority and governmental powers and is conclusive and binding on the
Developer and all future owners and developers within Improvement Areas #2-3 of the District. See “APPENDIX C
– Service and Assessment Plan.”
Collection and Enforcement of Assessment Amounts
Under the PID Act, the Annual Installments may be collected in the same manner and at the same time as ad
valorem taxes of the City. The Assessments may be enforced by the City in the same manner that an ad valorem tax
lien against real property is enforced. Delinquent installments of the Assessments incur interest, penalties, and
attorney’s fees in the same manner as delinquent ad valorem taxes. Under the PID Act, the Assessment Lien is a first
and prior lien against the property assessed, superior to all other liens and claims except liens or claims for State,
county, school district, or municipality ad valorem taxes. See “BONDHOLDERS’ RISKS – Assessment Limitations.”
In the Indenture, the City will covenant to collect, or cause to be collected, Assessments as provided in the
Assessment Ordinances. No less frequently than annually, City staff or a designee of the City shall prepare, and the
City Council shall approve, an Annual Service Plan Update to allow for the billing and collection of Annual
Installments. Each Annual Service Plan Update shall include an updated Assessment Rolls and a calculation of the
Annual Installment for each Parcel. Annual Collection Costs shall be allocated among all Parcels in proportion to the
amount of the Annual Installments for the Parcels.
In the Indenture, the City covenants, agrees, and warrants that, for so long as any Bonds are Outstanding it
will take and pursue all actions permissible under Applicable Laws to cause the Assessments to be collected and the
liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and, to
the extent permitted by Applicable Laws, to cause no reduction, abatement, or exemption in the Assessments.
To the extent permitted by law, notice of the Annual Installments will be sent by, or on behalf of the City, to
the affected property owners on the same statement or such other mechanism that is used by the City, so that such
Annual Installments are collected simultaneously with ad valorem taxes and shall be subject to the same penalties,
procedures, and foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City.
The City will determine or cause to be determined, no later than February 15 of each year, whether or not
any Annual Installment is delinquent and, if such delinquencies exist, the City will order and cause to be commenced
as soon as practicable any and all appropriate and legally permissible actions to obtain such Annual Installment, and
any delinquent charges and interest thereon, including diligently prosecuting an action in district court to foreclose the
currently delinquent Annual Installment. Notwithstanding the foregoing, the City shall not be required under any
circumstances to purchase or make payment for the purchase of the delinquent Assessment or the corresponding
Assessed Property.
The City will implement the basic timeline and procedures for Assessment collections and pursuit of
delinquencies set forth in Exhibit C to the Continuing Disclosure Agreement of Issuer set forth in APPENDIX E-1
and to comply therewith to the extent that the City reasonably determines that such compliance is the most appropriate
timeline and procedures for enforcing the payment of delinquent Assessments.
The City shall not be required under any circumstances to expend any funds for Delinquent Collection Costs
in connection with its covenants and agreements under the Indenture or otherwise other than funds on deposit in the
Administrative Fund.
Annual Installments will be paid to the City or its agent. Annual Installments are due on October 1 of each
year, and become delinquent on February 1 of the following year. In the event Assessments are not timely paid, there
are penalties and interest as set forth below:
30
Date Payment
Receive
Cumulative
Penalt
Cumulative
Interes Total
Februar 6% 1% 7%
March 7% 2% 9%
April 8% 3% 11%
Ma 9% 4% 13%
June 10% 5% 15%
Jul 12% 6% 18%
After July, the penalty remains at 12%, and interest accrues at the rate of 1% each month. In addition, if an
account is delinquent in July, a 20% attorney’s collection fee may be added to the total penalty and interest charge.
In general, property subject to lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts
due. An automatic stay by creditors or other entities, including governmental units, could prevent governmental units
from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining
secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In most
cases, post-petition Assessments are paid as an administrative expense of the estate in bankruptcy or by order of the
bankruptcy court.
Assessment Amounts
Assessment Amounts. The maximum amounts of the Assessments will be established by the methodology
described in the Service and Assessment Plan. The Assessment Rolls sets forth for each year the Annual Installment
for each Assessed Property consisting of the annual payment allocable to the Bonds and the Improvement Area #2-A
Projects, Improvement Area #2-B Projects, and Improvement Area #3 Projects as applicable for each Assessed
Property, which amount includes (i) the Additional Interest and (ii) the annual payment allocable to Annual Collection
Costs. The Annual Installments for the applicable Assessments may not exceed the amounts shown on the Assessment
Rolls. The Assessments will be levied against the parcels comprising the Assessed Property as indicated on the
Assessment Rolls. See “APPENDIX C – Service and Assessment Plan.”
The Annual Installments shown on the Assessment Rolls will be reduced to equal the actual costs of repaying
the Bonds (which amount will include Additional Interest) and actual Annual Collection Costs (as provided for in the
definition of such term), taking into consideration any other available funds for these costs, such as interest income
on account balances.
If the debt service on issued and Outstanding Bonds is reduced as the result of an economic refunding of the
Bonds, the Prepayment of the Assessments, or the redemption of the Bonds, then there would be a corresponding
reduction in the Assessments and the Annual Installments. See “APPENDIX C – Service and Assessment Plan.” In
such case, the reduced Assessment and Annual Installment, as shown on the Assessment Rolls, shall be reflected in
the next Annual Service Plan Update and approved by City Council.
Method of Apportionment of Assessments. For purposes of the Service and Assessment Plan, the City Council
has determined that the Assessments shall be initially allocated to the Parcels consisting of the Assessed Property
based on the ratio of the Estimated Buildout Value of each Parcel in Improvement Areas #2-3 to the Estimated
Buildout Value of all Parcels in Improvement Areas #2-3.
Division Prior to Recording of Subdivision Plat. Upon the division of any Assessed Property prior to the
recording of a subdivision plat, the Administrator shall reallocate the Assessment for the Assessed
Property prior to the division among the newly divided Assessed Properties according to the following
formula:
A = B x (C ÷ D)
Where the terms have the following meanings:
A = the Assessment for the newly divided Assessed Property
B = the Assessment for the Assessed Property prior to division
31
C = the Estimated Buildout Value of the newly divided Assessed Property
D = the sum of the Estimated Buildout Value for all of the newly divided Assessed Properties
The calculation of the Assessment of an Assessed Property shall be performed by the
Administrator and shall be based on the Estimated Buildout Value of that Assessed Property, as relying
on information from homebuilders, market studies, appraisals, official public records of the County, and
any other relevant information regarding the Assessed Property. The calculation as confirmed by the
City Council shall be conclusive and binding.
The sum of the Assessments for all newly divided Assessed Properties shall equal the
Assessment for the Assessed Property prior to subdivision. The calculation shall be made separately for
each newly divided Assessed Property. The reallocation of an Assessment for an Assessed Property that
is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any
reallocation shall be reflected in the next Annual Service Plan Update and approved by the City Council.
Upon Subdivision by a Recorded Subdivision Plat. Upon the subdivision of any Assessed Property
based on a recorded subdivision plat, the Administrator shall reallocate the Assessment for the Assessed
Property prior to the subdivision among the new subdivided Lots based on Estimated Buildout Value
according to the following formula:
A = [B x (C ÷ D)]/E
Where the terms have the following meanings:
A = the Assessment for the newly subdivided Lot
B = the Assessment for the Parcel prior to subdivision
C = the sum of the Estimated Buildout Value of all newly subdivided Lots of the same
Lot Type
D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots
excluding Non-Benefitted Property
E= the number of newly subdivided Lots of the same Lot Type
Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated
Buildout Value for each Lot to be created after recording the subdivision plat as of the date the
subdivision plat is anticipated to be recorded. The calculation of the Assessment for a Lot shall be
performed by the Administrator and confirmed by the City Council based on Estimated Buildout Value
information provided by the Developer, homebuilders, third party consultants, and/or the official public
records of the County regarding the Lot. The calculation as confirmed by the City Council shall be
conclusive and binding.
The sum of the Assessments for all newly subdivided Lots shall not exceed the Assessment for
the portion of the Assessed Property subdivided prior to subdivision. The calculation shall be made
separately for each newly subdivided Assessed Property. The reallocation of an Assessment for an
Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the
reallocation. Any reallocation pursuant to this section shall be reflected in the next Annual Service Plan
Update and approved by the City Council.
Upon Consolidation. If two or more Lots or Parcels are consolidated into a single Parcel or Lot, the
Administrator shall allocate the Assessments against the Lots or Parcels before the consolidation to the
consolidated Lot or Parcel, which allocation shall be reflected in the next Annual Service Plan Update
and approved by the City Council. The Assessment for any resulting Lot may not exceed the Maximum
Assessment for the applicable Lot Type and compliance may require a mandatory prepayment of
Assessments.
32
Maximum Assessment. Notwithstanding the foregoing, the Service and Assessment Plan establishes a
“Maximum Assessment” for each Lot Type in Improvement Areas #2-3 of the District, which Maximum Assessment
is currently calculated for each lot type as shown under “ASSESSMENT PROCEDURES – Assessment
Methodology” above. See “APPENDIX C – Service and Assessment Plan.”
Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not result
in the Assessment per Lot for any Lot Type exceeding the Maximum Assessment. If the Administrator determines
that the resulting Assessment per Lot for any Lot Type will exceed the Maximum Assessment, then (i) the Assessment
applicable to each Lot Type shall each be reduced to the Maximum Assessment, and (ii) the person or entity filing the
plat shall pay, as a mandatory prepayment of the Assessment, to the City the amount the Assessment was reduced,
plus Prepayment Costs and Delinquent Collection Costs, prior to the City approving the final plat.
In addition, if the Assessed Property is transferred to a person or entity that is exempt from payment of the
Assessment, the owner transferring the Assessed Property shall pay to the City the full amount of the Assessment,
plus Prepayment Costs and Delinquent Collection Costs, prior to the transfer. If the owner of the Assessed Property
causes the Assessed Property to become Non-Benefited Property, the owner causing the change in status shall pay to
the City the full amount of the Assessment, plus Prepayment Costs and Delinquent Collection Costs, prior to the
change in status.
For further information about apportionment of the Assessments, See “APPENDIX C – Service and
Assessment Plan.”
Prepayment of Assessments
Pursuant to the PID Act and the Indenture, the owner of any Assessed Property may voluntarily prepay (a
“Prepayment”), at any time, all or part of an Assessment levied against such owner’s Assessed Property, together with
accrued interest to the date of payment. Upon receipt of such Prepayment, such amounts will be applied towards the
redemption or payment of the Bonds. Amounts received at the time of a Prepayment which represent a payment of
principal, interest, or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment,
but rather are to be treated as payment of regularly scheduled Assessments.
Priority of Lien
The Assessments or any reassessment, the expense of collection, and reasonable attorney’s fees, if incurred,
constitute a first and prior lien against the property assessed, superior to all other liens and claims except liens or
claims for the State, county, school district, or municipality ad valorem taxes, and are a personal liability of and charge
against the owners of the property regardless of whether the owners are named. The lien is effective from the
respective date of each Assessment Ordinance until the Assessment is paid, and may be enforced by the City in the
same manner as an ad valorem tax levied against real property may be enforced by the City. The owner of any property
assessed may pay the entire Assessment levied against any lot or parcel, together with accrued interest to the date of
payment, at any time.
Foreclosure Proceedings
In the event of delinquency in the payment of any Annual Installment, except for unpaid Assessments on
homestead property (unless the lien associated with the assessment attached prior to the date the property became a
homestead), the City is empowered to order institution of an action in state district court to foreclose the lien of such
delinquent Annual Installment. In such action the real property subject to the delinquent Annual Installments may be
sold at judicial foreclosure sale for the amount of such delinquent Annual Installments, plus penalties and interest.
Any sale of property for nonpayment of an installment or installments of an Assessment will be subject to
the lien established for remaining unpaid installments of the Assessment against such property and such property may
again be sold at a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the non-delinquent
installments of the Assessments against such property as they become due and payable. Judicial foreclosure
proceedings are not mandatory. In the event a foreclosure is necessary, there could be a delay in payments to owners
of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the
33
foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and in such event there could be
an additional delay in payment of the principal of and interest on Bonds or such payment may not be made in full.
The City is not required under any circumstance to purchase the property or to pay the delinquent Assessment on the
corresponding Assessed Parcel.
In the Indenture, the City covenants to take and pursue all actions permissible under Applicable Laws to
cause the Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum
extent permitted by Applicable Laws, and to cause no reduction, abatement, or exemption in the Assessments,
provided that the City is not required to expend any funds for collection and enforcement of Assessments other than
funds on deposit in the Administrative Fund. Pursuant to the Indenture, Foreclosure Proceeds (excluding Delinquent
Collection Costs) constitute Pledged Revenues to be deposited into the Pledged Revenue Fund upon receipt by the
City and distributed in accordance with the Indenture. See “APPENDIX B – Form of Indenture.” See also
“APPENDIX E-1 – Form of Disclosure Agreement of Issuer” for a description of the expected timing of certain events
with respect to collection of the delinquent Assessments.
In the Indenture, the City creates the Delinquency and Prepayment Reserve Account under the Reserve Fund
and will fund such account as provided in the Indenture. The City will not be obligated to fund foreclosure proceedings
out of any funds other than in the Administrative Fund. If funds in the Administrative Fund are insufficient to pay
foreclosure costs, the owners of the Bonds may be required to pay amounts necessary to continue foreclosure
proceedings. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and
Prepayment Reserve Account),” “APPENDIX B – Form of Indenture” and “APPENDIX C – Service and Assessment
Plan.”
ASSESSMENT AND COLLECTION DATA FOR THE DISTRICT
Collection and Delinquency History in Improvement Area #1 of the District
THE FOLLOWING SUBSECTIONS SET FORTH, FOR INFORMATIONAL PURPOSES ONLY,
INFORMATION REGARDING COLLECTION HISTORY FOR IMPROVEMENT AREA #1 OF THE
DISTRICT RELATING TO THE IMPROVEMENT AREA #1 ASSESSMENTS. THE IMPROVEMENT
AREA #1 ASSESSMENTS ARE NOT PLEDGED TO AND WILL NOT BE AVAILABLE FOR PAYMENT
OF THE BONDS. NO ASSURANCES CAN BE MADE THAT COLLECTION OF THE ASSESSMENTS
WILL REFLECT THE HISTORICAL COLLECTION OF THE IMPROVEMENT AREA #1
ASSESSMENTS.
The following table shows the collection and delinquency history of the Improvement Area #1 Assessments
in the District:
COLLECTION AND DELINQUENCY HISTORY OF IMPROVEMENT AREA #1 ASSESSMENTS
Fiscal
Year
Ending
9/30
Tax Year
Billed
Annual
Installment
Billed
Delinquent
Amount
as of 3/1
(following
year)
Delinquent
Percentage
as of 3/1
(following
year)
Delinquent
Amount
as of 9/1
(following
year)
Delinquent
Percentage
as of 9/1
(following
year)
Annual
Installments
Collected(1)
2024 2023 $0 $0 0% $0 0% $0
2025(2) 2024 $604,563.62 $10,363.23 1.71% $692.65 0.11% $604,563.62
(1) Does not include interest and penalties.
(2) Collection data as of October 1, 2025.
Delinquency and Foreclosure History of Improvement Area #1 Assessments
As of October 1, 2025, Annual Installment delinquencies of the Improvement Area #1 Assessments were as
follows: (i) delinquent for greater than six months: $0; (ii) delinquent for greater than one year: $0; (iii) delinquent for
greater than two years: $0.
34
As of October 1, 2025, there has been no foreclosure sales of the assessed property within Improvement Area
#1 of the District for non-payment of Improvement Area #1 Assessments.
Prepayment History of Improvement Area #1 Assessments
As of October 1, 2025, there have been 2 prepayments totaling $64,050.17 of the Improvement Area #1
Assessments.
Collection and Delinquency History in Improvement Area #2 of the District
THE FOLLOWING SUBSECTIONS SET FORTH, FOR INFORMATIONAL PURPOSES ONLY,
INFORMATION REGARDING COLLECTION HISTORY FOR IMPROVEMENT AREA #2 OF THE
DISTRICT RELATING TO THE IMPROVEMENT AREA #2 ASSESSMENTS. NO ASSURANCES CAN
BE MADE THAT FUTURE COLLECTION OF THE IMPROVEMENT AREA #2 ASSESSMENTS WILL
CONTINUE AT THE RATES SHOWN BELOW OR THAT COLLECTION OF THE ASSESSMENTS WILL
REFLECT THE HISTORICAL COLLECTION OF THE IMPROVEMENT AREA #2 ASSESSMENTS.
The following table shows the collection and delinquency history of the Improvement Area #2 Assessments
in the District:
COLLECTION AND DELINQUENCY HISTORY OF IMPROVEMENT AREA #2-A ASSESSMENTS
Fiscal
Year
Ending
9/30
Tax Year
Billed
Annual
Installment
Billed
Delinquent
Amount
as of 3/1
(following
year)
Delinquent
Percentage
as of 3/1
(following
year)
Delinquent
Amount
as of 9/1
(following
year)
Delinquent
Percentage
as of 9/1
(following
year)
Annual
Installments
Collected(1)
2025(2) 2024 $139,785.24 0.0% 0.0% 0.0% 0.0% $139,785.24
(1) Does not include interest and penalties.
(2) Collection data as of October 1, 2025.
COLLECTION AND DELINQUENCY HISTORY OF IMPROVEMENT AREA #2-B ASSESSMENTS
Fiscal
Year
Ending
9/30
Tax Year
Billed
Annual
Installment
Billed
Delinquent
Amount
as of 3/1
(following
year)
Delinquent
Percentage
as of 3/1
(following
year)
Delinquent
Amount
as of 9/1
(following
year)
Delinquent
Percentage
as of 9/1
(following
year)
Annual
Installments
Collected(1)
2025(2) 2024 $312,134.09 0.0% 0.0% 0.0% 0.0% $312,134.09
(1) Does not include interest and penalties.
(2) Collection data as of October 1, 2025.
Delinquency and Foreclosure History of Improvement Area #2 Assessments
As of October 1, 2025, annual installment delinquencies of the Improvement Area #2-A Assessments were
as follows: (i) delinquent for greater than six months: $0; (ii) delinquent for greater than one year: $0; (iii) delinquent
for greater than two years: $0. As of October 1, 2025, annual installment delinquencies of the Improvement Area #2-
B Assessments were as follows: (i) delinquent for greater than six months: $0; (ii) delinquent for greater than one
year: $0; (iii) delinquent for greater than two years: $0.
As of October 1, 2025, there has been no foreclosure sales of the assessed property within Improvement Area
#2-A of the District for non-payment of Improvement Area #2-A Assessments or the assessed property within
Improvement Area #2-B of the District for non-payment of Improvement Area #2-B Assessments.
35
Prepayment History of Improvement Area #2 Assessments
As of October 1, 2025, there have been no prepayments of the Improvement Area #2-A Assessments or
Improvement Area #2-B Assessments.
THE CITY
Background
The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the
City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road
455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety
(police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general administrative
services. The 2020 Census population for the City was 16,896, and the current estimated population is 32,000.
City Government
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 1913, and first adopted
its Home Rule Charter on May 7, 2005. The City operates under a Council/Manager form of government with a City
Council comprised of the Mayor and six Councilmembers elected for staggered three-year terms. The City Manager
is the Chief Administrative Officer for the City.
The current members of the City Council and principal administrators of the City are listed on page ii hereof.
For more information regarding the City and surrounding areas, see “APPENDIX A – General Information
Regarding the City and Surrounding Areas.”
Water and Wastewater
The City will provide both water and wastewater service to the District. The City is currently served by
ground water through nine water wells located at five different sites. These nine wells produce a total of 4.8 million
gallons per day. The City has a total elevated storage capacity of 1,500,000 gallons of water and five ground storage
tanks with total storage capacity of 2,500,000 gallons.
In partnership with the Cities of Melissa, Van Alstyne, and Howe, the City is connected to a large diameter
water transmission line managed by the Greater Texoma Utility Authority. The GTUA line provides a connection to
the North Texas Municipal Water District’s ("NTMWD") water distribution system, providing the City with access to
treated surface water. This surface water line is part of the City’s long term water supply plan. Currently the City has
a maximum allowable take of 5,040 gpm from the GTUA connection, providing the City with a maximum peak flow
of treated water supply at 6,706 gpm. Both GTUA and the City of Anna continue to work on capital projects which
will increase the maximum treated water supply and storage. GTUA expanded their Bloomdale Pump Station vault,
which increased the GTUA total maximum flow to over 9,000 gpm. The City of Anna has completed an expansion of
the Collin Pump Station site, which brought the existing 1-million-gallon ground storage tank and new pumps online
with adjacent wells to maximize storage and flow. The City is currently constructing a 4-million-gallon ground storage
tank at the Collin Pump Station site to further increase storage capacity. Additional water system expansion projects
are identified in the City of Anna’s Capital Improvement Plan (CIP), and in the GTUA/CGMA CIP, which are both
being updated this year.
The City’s sanitary sewer system consists of seven lift stations and two wastewater treatment facilities, being
the John R. Geren (Slayter Creek) Wastewater Treatment Plant on the east side of US 75 and the newly constructed
Hurricane Creek Regional Wastewater Treatment Plant on the west side of US 75. In addition, the City has two large
diameter sewer transmission lines that transport wastewater directly into the NTMWD’s wastewater system to the
South (Wilson Creek plant). The Slayter Creek Wastewater Treatment Plant is located on Slayter Creek, just north of
the confluence of Slayter Creek and Throckmorton Creek. The total treatment capacity of the Slayter Creek
Wastewater Treatment Plant is approximately 0.50 million gallons per day. A portion of the NTMWD regional sewer
36
is located along Throckmorton Creek, in the south-central part of the city and the other is located near Clemmons
Creek in the southeastern part of the City. The Slayter Creek Wastewater Treatment Plant is currently near capacity.
The transmission lines will soon be near capacity. The City recently completed the Slayter Creek Interceptor Sewer
project which now conveys wastewater flows in excess of the Slayter Creek Wastewater Treatment capacity to the
NTMWD regional wastewater system. Recently, the City completed the initial phase of a new Hurricane Creek
Regional Wastewater Treatment Plant, which will significantly expand the City’s ability to collect and treat
wastewater as required for new development west of US 75. The temporary treatment plant has been operational since
March 2025 and can treat up to 0.5 million gallons per day, while the remaining phases are finished. In July 2025, the
City issued certificates of obligation to fund the first full phase of this new Hurricane Creek Regional Wastewater
Treatment Plant, which is expected to have a capacity to treat 2 million gallons per day of wastewater, with plans to
gradually expand the plant’s capacity up to 16 million gallons per day. The City will utilize the new plant to treat
sewage for its own residents, as well as provide wholesale sewage treatment for the City of Van Alstyne, the City of
Weston, and for various water districts located in the area. A large diameter trunk sewer is complete and in place from
FM 455 to the Hurricane Creek Wastewater Treatment Plant, and the City expects to construct additional segments of
the trunk line further to the north, from FM 455 to the northern City limit. This will allow new developments in Anna,
including the Development, and Van Alstyne to flow sewer to the new treatment plant.
THE DISTRICT
General
The PID Act authorizes municipalities, such as the City, to create public improvement districts within their
boundaries or extraterritorial jurisdiction, and to impose assessments within the public improvement district to pay for
certain improvements. The District was created by Resolution No. 2023-03-1378 of the City adopted on February 14,
2023 (the “Creation Resolution”), for the purpose of undertaking and financing the cost of certain public improvements
within the District, including the Improvement Areas #2-3 Projects, authorized by the PID Act and approved by the
City Council that confer a special benefit on the District property being developed. The District is not a separate
political subdivision of the State and is governed by the City Council. A map of the property within the District is
included on page v hereof.
Powers and Authority
Pursuant to the PID Act, the City may establish and create the District and undertake, or reimburse a
developer for the costs of, improvement projects that confer a special benefit on property located within the District,
whether located within the City limits or the City’s extraterritorial jurisdiction. The PID Act provides that the City
may levy and collect assessments on property in the District, or portions thereof, payable in periodic installments
based on the benefit conferred by an improvement project to pay all or part of its cost.
Pursuant to the PID Act and the Creation Resolution, the City has the power to undertake, or reimburse a
developer for the costs of, the financing, acquisition, construction, or improvement of the Improvement Areas #2-3
Projects. See “THE IMPROVEMENT AREAS #2-3 PROJECTS.” Pursuant to the authority granted by the PID Act
and the Creation Resolution, the City has determined to undertake the construction, acquisition, or purchase of the
Improvement Areas #2-3 Projects and to finance a portion of the costs thereof through the issuance of the Bonds. The
City has further determined to provide for the payment of debt service on the Bonds through Pledged Revenues and
other assets comprising the Trust Estate. See “ASSESSMENT PROCEDURES” and “APPENDIX C – Service and
Assessment Plan.”
THE IMPROVEMENT AREAS #2-3 PROJECTS
General
The Developer is responsible for the completion of the construction, acquisition, or purchase of the
Improvement Areas #2-3 Projects. Pursuant to the Reimbursement Agreement and the Indenture, the City will
reimburse the Developer for a portion of the Actual Costs of the Improvement Areas #2-3 Projects from proceeds of
the Bonds. See “THE DEVELOPMENT – Reimbursement Agreement.”
37
The Improvement Areas #2-3 Projects include the Improvement Area #2-A Improvements, the Improvement
Area #2-B Improvements, the Improvement Area #2 Improvements, the Improvement Area #3 Improvements and
Improvement Area #2’s proportionate share of the Major Improvements, each of which are described below.
Improvement Area #2-A Improvements. The Improvement Area #2-A Improvements, a portion of which
are being financed with proceeds of the Bonds, include erosion control, excavation, sanitary sewer, storm sewer, water,
paving, and street light improvements and soft costs benefitting only Assessed Property in Improvement Area #2-A
of the District, as described below.
Erosion Control: Improvements including silt fences, inlet protection, rock check dams, drill seeding, soil
retention blankets, biodegradable erosion control logs, and construction exit/entrances necessary to provide
erosion control for all Lots within Improvement Area #2-A.
Excavation: Excavation improvements include related earthworks, excavation, intersections, and re-
vegetation of all disturbed areas within the right-of-way of Improvement Area #2-A.
Sanitary Sewer: Sanitary Sewer improvements include trench excavation and embedment, trench safety,
PVC piping, manholes, concrete easement, stub outs to future developments, testing, related earthwork,
erosion control, and all necessary appurtenances required to provide sanitary sewer service for all Lots within
Improvement Area #2-A.
Storm Sewer: Storm Sewer improvements include earthen channels, swales, RCP piping and boxes,
manholes, curb and drop inlets, headwalls, concrete flumes, rock rip rap, stub outs to future developments,
testing, related earthwork, erosion control, and all necessary appurtenances required to provide storm
drainage for all Lots within Improvement Area #2-A.
Water: Water improvements include trench excavation and embedment, trench safety, PVC piping, stub outs
to future developments, testing, related earthwork, erosion control, and all necessary appurtenances required
to provide water service for all Lots within Improvement Area #2-A.
Paving: Roadway improvements include subgrade stabilization, concrete and reinforcing steel for roadways,
testing, and handicapped ramps, related earthworks, intersections, and re-vegetation of all disturbed areas
within the right-of-way of Improvement Area #2-A.
Street Lights: Improvements including traffic signage, streetlights, and stop lights are included. These traffic
and lighting improvements will provide a benefit to all Lots within Improvement Area #2-A.
Soft Costs: Includes costs related to designing, constructing, and installing the Improvement Area #2-A
Improvements including land planning and design, City fees, engineering, soil testing, survey, construction
management, contingency, legal costs, consultants, and costs associated with financing the Improvement
Area #2-A Improvements.
Improvement Area #2-B Improvements. The Improvement Area #2-B Improvements, a portion of which
are being financed with proceeds of the Bonds, include erosion control, excavation, sanitary sewer, storm sewer, water,
paving, and street light improvements and soft costs benefitting only Assessed Property in Improvement Area #2-B
of the District, as described below.
Erosion Control: Improvements including silt fences, inlet protection, rock check dams, drill seeding, soil
retention blankets, biodegradable erosion control logs, and construction exit/entrances necessary to provide
erosion control for all Lots within Improvement Area #2-B.
Excavation: Excavation improvements include related earthworks, excavation, intersections, and re-
vegetation of all disturbed areas within the right-of-way of Improvement Area #2-B.
38
Sanitary Sewer: Sanitary Sewer improvements include trench excavation and embedment, trench safety,
PVC piping, manholes, concrete easement, stub outs to future developments, testing, related earthwork,
erosion control, and all necessary appurtenances required to provide sanitary sewer service for all Lots within
Improvement Area #2-B.
Storm Sewer: Storm Sewer improvements include earthen channels, swales, RCP piping and boxes,
manholes, curb and drop inlets, headwalls, concrete flumes, rock rip rap, stub outs to future developments,
testing, related earthwork, erosion control, and all necessary appurtenances required to provide storm
drainage for all Lots within Improvement Area #2-B.
Water: Water improvements include trench excavation and embedment, trench safety, PVC piping, stub outs
to future developments, testing, related earthwork, erosion control, and all necessary appurtenances required
to provide water service for all Lots within Improvement Area #2-B.
Paving: Roadway improvements include subgrade stabilization, concrete and reinforcing steel for roadways,
testing, and handicapped ramps, related earthworks, intersections, and re-vegetation of all disturbed areas
within the right-of-way of Improvement Area #2-B.
Street Lights: Improvements including traffic signage, streetlights, and stop lights are included. These traffic
and lighting improvements will provide a benefit to all Lots within Improvement Area #2-B.
Soft Costs: Includes costs related to designing, constructing, and installing the Improvement Area #2-B
Improvements including land planning and design, City fees, engineering, soil testing, survey, construction
management, contingency, legal costs, consultants, and costs associated with financing the Improvement
Area #2-B Improvements.
Improvement Area #2 Improvements. The Improvement Area #2 Improvements, a portion of which are
being financed with proceeds of the Bonds, include excavation, sanitary sewer, storm sewer, water, and paving
improvements and soft costs benefitting only Assessed Property in Improvement Area #2 of the District, as described
below.
Excavation: Excavation improvements include related earthworks, excavation, intersections, and re-
vegetation of all disturbed areas within the right-of-way of Improvement Area #2.
Sanitary Sewer: Sanitary Sewer improvements include trench excavation and embedment, trench safe-ty,
PVC piping, manholes, concrete easement, stub outs to future developments, testing, related earthwork,
erosion control, and all necessary appurtenances required to provide sanitary sewer service for all Lots within
Improvement Area #2.
Storm Sewer: Storm Sewer improvements include earthen channels, swales, RCP piping and boxes,
manholes, curb and drop inlets, headwalls, concrete flumes, rock rip rap, stub outs to future developments,
testing, related earthwork, erosion control, and all necessary appurtenances required to provide storm
drainage for all Lots within Improvement Area #2.
Water: Water improvements include trench excavation and embedment, trench safety, PVC piping, stub outs
to future developments, testing, related earthwork, erosion control, and all necessary appurtenances required
to provide water service for all Lots within Improvement Area #2.
Paving: Roadway improvements include subgrade stabilization, concrete and reinforcing steel for roadways,
testing, and handicapped ramps, related earthworks, intersections, and re-vegetation of all disturbed areas
within the right-of-way of Improvement Area #2.
Soft Costs: Includes costs related to designing, constructing, and installing the Improvement Area #2
Improvements including land planning and design, City fees, engineering, soil testing, survey, construction
management, contingency, legal costs, consultants, and costs associated with financing the Improvement
Area #2 Improvements.
39
Improvement Area #3 Improvements. The Improvement Area #3 Improvements, a portion of which are
being financed with proceeds of the Bonds, include excavation, sanitary sewer, storm sewer, water, and paving
improvements and soft costs benefitting only Assessed Property in Improvement Area #3 of the District, as described
below.
Excavation: Excavation improvements include related earthworks, excavation, intersections, and re-
vegetation of all disturbed areas within the right-of-way of Improvement Area #3.
Sanitary Sewer: Sanitary Sewer improvements include trench excavation and embedment, trench safety,
PVC piping, manholes, concrete easement, stub outs to future developments, testing, related earthwork,
erosion control, and all necessary appurtenances required to provide sanitary sewer service for all Lots within
Improvement Area #3.
Storm Sewer: Storm Sewer improvements include earthen channels, swales, RCP piping and boxes,
manholes, curb and drop inlets, headwalls, concrete flumes, rock rip rap, stub outs to future developments,
testing, related earthwork, erosion control, and all necessary appurtenances required to provide storm
drainage for all Lots within Improvement Area #3.
Water: Water improvements include trench excavation and embedment, trench safety, PVC piping, stub outs
to future developments, testing, related earthwork, erosion control, and all necessary appurtenances required
to provide water service for all Lots within Improvement Area #3.
Paving: Roadway improvements include subgrade stabilization, concrete and reinforcing steel for roadways,
testing, and handicapped ramps, related earthworks, intersections, and re-vegetation of all disturbed areas
within the right-of-way of Improvement Area #3.
Soft Costs: Includes costs related to designing, constructing, and installing the Improvement Area #3
Improvements including land planning and design, City fees, engineering, soil testing, survey, construction
management, contingency, legal costs, consultants, and costs associated with financing the Improvement
Area #3 Improvements.
Major Improvements. The Major Improvements, a portion of which are being financed with proceeds of the
Bonds, include excavation, sanitary sewer, storm sewer, water, and paving improvements and soft costs benefitting
all the Assessed Property within the District, as described below.
Excavation: Excavation improvements include excavation, intersections, and re-vegetation of all disturbed
areas within the right-of-way benefiting the entire District.
Sanitary Sewer: Sanitary Sewer improvements include trench excavation and embedment, trench safety,
PVC piping, manholes, concrete easement, stub outs to future developments, testing, related earthwork,
erosion control, and all necessary appurtenances required to provide sanitary sewer service to the entire
District.
Storm Sewer: Storm Sewer improvements include earthen channels, swales, RCP piping and boxes,
manholes, curb and drop inlets, headwalls, concrete flumes, rock rip rap, stub outs to future developments,
testing, related earthwork, erosion control, and all necessary appurtenances required to provide storm
drainage to the entire District.
Water: Water improvements include trench excavation and embedment, trench safety, PVC piping, stub outs
to future developments, testing, related earthwork, erosion control, and all necessary appurtenances required
to provide water service to the entire District.
Paving: Paving improvements include subgrade stabilization, concrete and reinforcing steel for roadways,
testing, and handicapped ramps, related earthworks, intersections, and re-vegetation of all disturbed areas
within the right-of-way of the District.
40
Soft Costs: Includes costs related to designing, constructing, and installing the Major Improvements
including land planning and design, City fees, engineering, soil testing, survey, construction management,
contingency, legal costs, consultants, District Formation Costs, and costs associated with financing the Major
Improvements.
The total costs of the Improvement Areas #2-3 Projects (excluding costs of issuance of the Bonds) are
expected to be approximately $34,260,201*. A portion of such costs is expected to be financed from proceeds of the
Bonds. The remainder of such costs has been and will be financed by the Developer. See “SOURCES AND USES
OF FUNDS,” “THE IMPROVEMENT AREAS #2-3 PROJECTS,” and “APPENDIX C – Service and Assessment
Plan.”
The following table reflects the estimated total costs of the Improvement Areas #2-3 Projects.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
________________________________
* Preliminary, subject to change.
41
% Cost % Cost % Cost % Cost
Major Improvements [c],[d],[i]
Excavation 612,616$ 93,824$ 15,418$ 503,374$ 25.89% 130,334$ 6.19% 31,143$ 13.22% 66,541$ 54.70% 275,355$
Sanitary Sewer 1,212,374 185,679 30,513 996,182 25.89% 257,932 6.19% 61,633 13.22% 131,685 54.70% 544,932
Storm Sewer 1,136,739 174,095 28,610 934,034 25.89% 241,841 6.19% 57,788 13.22% 123,470 54.70% 510,935
Water 758,402 116,152 19,088 623,163 25.89% 161,350 6.19% 38,555 13.22% 82,376 54.70% 340,883
Paving 1,450,080 222,084 36,496 1,191,500 25.89% 308,504 6.19% 73,717 13.22% 157,505 54.70% 651,774
Soft Costs[e]1,144,068 175,218 28,794 940,056 25.89% 243,400 6.19% 58,161 13.22% 124,266 54.70% 514,230
6,314,279$ 967,052$ 158,918$ 5,188,309$ 1,343,359$ 320,997$ 685,843$ 2,838,109$
Improvement Area #1 Improvements
Erosion Control 57,000$ ‐$ ‐$ 57,000$ 100% 57,000$ 0.00%‐$ 0.00%‐$ 0.00%‐$
Excavation 162,500 ‐ ‐ 162,500 100% 162,500 0.00%‐ 0.00%‐ 0.00%‐
Sanitary Sewer 1,053,228 ‐ ‐ 1,053,228 100% 1,053,228 0.00%‐ 0.00%‐ 0.00%‐
Storm Sewer 1,771,838 ‐ ‐ 1,771,838 100% 1,771,838 0.00%‐ 0.00%‐ 0.00%‐
Water 1,123,596 ‐ ‐ 1,123,596 100% 1,123,596 0.00%‐ 0.00%‐ 0.00%‐
Paving 1,772,441 ‐ ‐ 1,772,441 100% 1,772,441 0.00%‐ 0.00%‐ 0.00%‐
Street Lights 66,000 ‐ ‐ 66,000 100% 66,000 0.00%‐ 0.00%‐ 0.00%‐
Soft Costs[e]1,329,145 ‐ ‐ 1,329,145 100% 1,329,145 0.00%‐ 0.00%‐ 0.00%‐
7,335,748$ ‐$ ‐$ 7,335,748$ 7,335,748$ ‐$ ‐$ ‐$
Improvement Area #2 Improvements [f],[i]
Excavation 9,231$ ‐$ 945$ 8,286$ 0.00%‐$ 34.46% 2,855$ 65.54% 5,431$ 0.00%‐$
Sanitary Sewer 184,060 ‐ 18,841 165,219 0.00%‐ 34.46% 56,933 65.54% 108,287 0.00%‐
Storm Sewer 253,652 ‐ 25,964 227,688 0.00%‐ 34.46% 78,458 65.54% 149,230 0.00%‐
Water 321,541 ‐ 32,914 288,627 0.00%‐ 34.46% 99,457 65.54% 189,170 0.00%‐
Paving 847,434 ‐ 86,745 760,689 0.00%‐ 34.46% 262,124 65.54% 498,565 0.00%‐
Soft Costs[e]226,229 ‐ 23,157 203,071 0.00%‐ 34.46% 69,976 65.54% 133,096 0.00%‐
1,842,147$ ‐$ 188,566$ 1,653,581$ ‐$ 569,803$ 1,083,778$ ‐$
Improvement Area #2‐A Improvements
Erosion Control 37,944$ ‐$ ‐$ 37,944$ 0.00%‐$ 100% 37,944$ 0.00%‐$ 0.00%‐$
Excavation 69,000 ‐ ‐ 69,000 0.00%‐ 100% 69,000 0.00%‐ 0.00%‐
Sanitary Sewer 351,163 ‐ ‐ 351,163 0.00%‐ 100% 351,163 0.00%‐ 0.00%‐
Storm Sewer 772,368 ‐ ‐ 772,368 0.00%‐ 100% 772,368 0.00%‐ 0.00%‐
Water 324,005 ‐ ‐ 324,005 0.00%‐ 100% 324,005 0.00%‐ 0.00%‐
Paving 1,622,042 ‐ ‐ 1,622,042 0.00%‐ 100% 1,622,042 0.00%‐ 0.00%‐
Street Lights 24,000 ‐ ‐ 24,000 0.00%‐ 100% 24,000 0.00%‐ 0.00%‐
Soft Costs[e]486,919 ‐ ‐ 486,919 0.00%‐ 100% 486,919 0.00%‐ 0.00%‐
3,687,441$ ‐$ ‐$ 3,687,441$ ‐$ 3,687,441$ ‐$ ‐$
Improvement Area #2‐B Improvements
Erosion Control 36,500$ ‐$ ‐$ 36,500$ 0.00%‐$ 0.00%‐$ 100% 36,500$ 0.00%‐$
Excavation 96,015 ‐ ‐ 96,015 0.00%‐ 0.00%‐ 100% 96,015 0.00%‐
Sanitary Sewer 683,725 ‐ ‐ 683,725 0.00%‐ 0.00%‐ 100% 683,725 0.00%‐
Storm Sewer 926,260 ‐ ‐ 926,260 0.00%‐ 0.00%‐ 100% 926,260 0.00%‐
Water 513,707 ‐ ‐ 513,707 0.00%‐ 0.00%‐ 100% 513,707 0.00%‐
Paving 2,247,290 ‐ ‐ 2,247,290 0.00%‐ 0.00%‐ 100% 2,247,290 0.00%‐
Street Lights 42,000 ‐ ‐ 42,000 0.00%‐ 0.00%‐ 100% 42,000 0.00%‐
Soft Costs[e]731,854 ‐ ‐ 731,854 0.00%‐ 0.00%‐ 100% 731,854 0.00%‐
5,277,351$ ‐$ ‐$ 5,277,351$ ‐$ ‐$ 5,277,351$ ‐$
Improvement Area #3 Improvements
Erosion Control 330,000$ ‐$ ‐$ 330,000$ 0.00%‐$ 0.00%‐$ 0.00%‐$ 100% 330,000$
Excavation 928,408 ‐ ‐ 928,408 0.00%‐ 0.00%‐ 0.00%‐ 100% 928,408
Sanitary Sewer 2,616,969 ‐ ‐ 2,616,969 0.00%‐ 0.00%‐ 0.00%‐ 100% 2,616,969
Storm Sewer 3,185,765 ‐ ‐ 3,185,765 0.00%‐ 0.00%‐ 0.00%‐ 100% 3,185,765
Water 2,382,537 ‐ ‐ 2,382,537 0.00%‐ 0.00%‐ 0.00%‐ 100% 2,382,537
Paving 4,549,776 ‐ ‐ 4,549,776 0.00%‐ 0.00%‐ 0.00%‐ 100% 4,549,776
Soft Costs[e]1,851,727 ‐ ‐ 1,851,727 0.00%‐ 0.00%‐ 0.00%‐ 100% 1,851,727
15,845,182$ ‐$ ‐$ 15,845,182$ ‐$ ‐$ ‐$ 15,845,182$
Private Improvements [g]
Private Improvements 14,096,908$ ‐$ 14,096,908$ ‐$ $ ‐ $ ‐ $ ‐ $ ‐
14,096,908$ ‐$ 14,096,908$ ‐$ $ ‐ $ ‐ $ ‐ $ ‐
Bond Issuance Costs [h]
Debt Service Reserve Fund 2,262,544$ ‐$ ‐$ 2,262,544$ 527,258$ 125,278$ 279,794$ 1,330,214.72$
Underwriters Discount[j]941,880 ‐ ‐ 941,880 222,570 51,930 115,980 551,400
Cost of Issuance 1,844,840 ‐ ‐ 1,844,840 427,740 102,306 228,490 1,086,303
5,049,264$ ‐$ ‐$ 5,049,264$ 1,177,568$ 279,514$ 624,264$ 2,967,918.19$
Other Costs
Deposit to Administrative Fund 120,000$ ‐$ ‐$ 120,000$ $ 40,000 $ 16,467 $ 23,533 $ 40,000
120,000$ ‐$ ‐$ 120,000$ $ 40,000 $ 16,467 $ 23,533 $ 40,000
Total $ 59,568,320 $ 967,052 $14,444,392 $ 44,156,876 $ 9,896,676 $ 4,874,222 $ 7,694,769 $ 21,691,210
Footnotes:
[a] Major Improvements and Improvement Area #1 Improvements costs based on the Original Service and Assessment Plan. Improvement Area #2 Improvements, Improvement Area #2‐A Improvements, and Improvement Area #2‐B
Improvements costs based on the 2024 Amended and Restated Service and Assessment Plan. Improvement Area #3 Improvements costs based on the Engineer's Report dated 8/28/2025, attached hereto as Appendix A, and subject
to change. Authorized Improvement costs are estimates and will be updated with each Annual Service Plan Update, or Amended and Restated Service and Assessment Plan as appropriate. The Developer will be responsible for paying
in the event of increase in costs, and the Assessments will not be increased to cover these additional costs.
[b] The Developer has agreed to pay for the allocable share of the Actual Costs of these Authorized Improvements that benefit the Non‐Assessed Property and is shown as Developer Contribution ‐Non‐Assessed Property on Exhibit
D.
[c] The Non‐Assessed Property was allocated a portion of the Major Improvements pro rata based on acreage to the Non‐Assessed Property and the District total acreage at the time of the Original Service and Assessment Plan as
described therein.
[d] The Major Improvement costs allocated to the District were allocated to each Improvement Area pro rata based on Estimated Buildout Value at the time of the applicable Assessment Ordinance.
[e] Soft Costs includes engineering, surveying, testing, platting, inspection, construction management, and District Formation Costs.
[f] The Improvement Area #2 Improvements are allocated to Improvement Area #2‐A and Improvement Area #2‐B pro rata based on Estimated Buildout Value of all the Improvement Area #2 as described in Section V.A.
[g] Costs required to reach final Lot completion; non‐reimbursable to the Developer from Assessments or PID Bonds.
[h] Bond Issuance Costs associated with Improvement Area #1 Bonds have been updated to reflect the anticipated actual cost at the time of the Original Service and Assessment Plan. Bond Issuance Costs associated with the
Improvement Area #2‐3 Bonds are estimates only and will be determined at the time the Improvement Area #2‐3 Bonds are issued.
[i] Allocation of Authorized Improvement costs has been updated to reflect actual units platted in Improvement Area #2‐A. Increased costs allocated to Improvement Area #2‐A due to the increase in Lot count at the time of final plat
shall be paid for by the Developer Contribution and shall not be eligible for reimbursement through Assessments or PID Bonds.
[j] Includes the fee of counsel to the underwriter.
Total Costs[a]Non‐Assessed
Property[b]Private District Eligible Costs Improvement Area #1 Improvement Area #3Improvement Area #2‐A Improvement Area #2‐B
42
Ownership and Maintenance of Improvement Areas #2-3 Projects
The Improvement Areas #2-3 Projects will be dedicated to the City and will constitute a portion of the City’s
infrastructure improvements. The City will provide for the ongoing operation, maintenance, and repair of the
Improvement Areas #2-3 Projects constructed and conveyed, as outlined in the Service and Assessment Plan.
THE DEVELOPMENT
The following information has been provided by the Developer. Certain of the following information is
beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the
City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information.
Overall Development Plan
The District consists of approximately 198.006 acres within the corporate boundaries of the City. The
Developer is developing such property as a master-planned community to include approximately 858 single-family
detached residential lots, 91 townhome lots, approximately 600 multi-family residential units, approximately 3 acres
of commercially zoned land (held for future sale), an amenity center with a swimming pool and cabana, and hike and
bike trails (collectively, the “Development”), with completion of all single-family lot development expected to occur
by October 2025. The multi-family residential units are planned for the acreage adjacent to and outside the boundaries
of the District. See “MAP SHOWING BOUNDARIES OF THE DISTRICT AND IMPROVEMENT AREAS” on
page v.
Improvement Area #1 was the first area of the District to be developed. Development of the lots in
Improvement Area #1 was completed in March 2023. The Developer followed such development with development
of the public improvements to serve Improvement Area #2-A and Improvement Area #2-B, which was completed in
December 2024, and Phase 3, which is part of Improvement Area #3, which was completed in July 2025. The
Developer expects to complete the remaining phase of the development, Phase 4, which is part of Improvement Area
#3, in November 2025. See “– Development Plan and Status of Development in Improvement Areas #2-3” and “–
Expected Build-Out and Home Prices in the Development.”
Homebuilders in the District
The Developer intends to construct homes on all of the 40’, 50’, and 60’ lots in the District and expects to
contract with a merchant homebuilder on the 91 townhome lots in the future. The Developer has not entered into a
contract for such sale of the townhome lots as of October 1, 2025.
Photographs of Development in the District
Photographs of development within the District are included herein in Appendix I.
Update on Improvement Area #1
Improvement Area #1 consists of approximately 57.444 acres and includes 218 single-family residences and
an amenity center. The single-family residences in Improvement Area #1 consist of 188 50’ lots and 30 60’ lots. Lot
development in Improvement Area #1 and the Improvement Area #1 Improvements were completed in March 2023
and have been accepted by the City.
Set forth below is the status of lot ownership and home sales in Improvement Area #1 of the District as of
September 30, 2025.
43
Status of Homes in Improvement Area #1
Lot Type Qty. Completed
Lots
Average
Lot Price
Lots Owned
by
Developer
Homes Under
Construction
Completed
Homes
Homes
Closed
to End
Users
Average
Home
Price
50’ 188 188 $49,672 14 - 177 174 $375,535
60’ 30 30 $59,016 - - 30 30 $377,256
TOTAL 218 218 14 - 207 204
Development Plan and Status of Development in Improvement Areas #2-3
Improvement Area #2. Improvement Area #2 consists of approximately 56.703 acres comprised of
Improvement Area #2-A and Improvement Area #2-B, and which includes a total of 198 single-family residential lots.
Improvement Area #2-A consists of approximately 29.229 acres and includes a total of 75 60’ single family residential
lots. Improvement Area #2-B consists of approximately 27.474 acres and includes a total of 123 single-family
residential lots in a mix of 26 40’ lots and 97 50’ lots. The Developer completed the Improvement Area #2-A
Improvements and the Improvement Area #2-B Improvements and lot development in Improvement Area #2 in
December 2024. The Improvement Area #2-A Improvements and the Improvement Area #2-B Improvements have
been accepted by the City.
Home construction in Improvement Area #2 began in February 2025. Set forth below is the status of lot
ownership, home completion and home sales in Improvement Area #2 of the District as of September 30, 2025.
Status of Homes in Improvement Area #2
Lot Type Qty. Completed
Lots
Average
Lot Price
Lots Owned
by
Developer
Homes Under
Construction
Completed
Homes
Homes
Closed
to End
Users
Average
Home
Price
40’ 26 26 $60,000 26 - - - /A
50’ 97 97 $69,000 34 1 10 63 $356,386
60’ 75 75 $77,000 34 2 18 41 $366,099
TOTAL 198 198 94 3 28 104
Improvement Area #3. Improvement Area #3 includes (i) Phase 3, which consists of approximately 39.162
acres and includes a total of 220 single-family residences in a mix of 118 40’ lots and 102 50’ lots and (ii) Phase 4,
which consists of approximately 47.778 acres and is expected to include a total of 91 townhomes and 222 40’ single-
family residential lots.
The Developer completed lot development in Phase 3 in July 2025. Home construction in Phase 3 began in
September 2025. The Developer expects to complete lot development in Phase 4 in November 2025. Home
construction in Phase 4 is expected to begin in May 2027.
Costs of the Improvement Areas #2-3 Projects. The costs of the Improvement Area #2-A Projects (exclusive
of the costs of issuance of the Bonds) are approximately $4,578,241. The costs of the Improvement Area #2-B Projects
(exclusive of the costs of issuance of the Bonds) are approximately $7,046,972. The Improvement Area #2-A Projects
and the Improvement Area #2-B Projects have been completed and were funded by the Developer with cash available
to the Developer. The expected cost of the Improvement Area #3 Projects is $18,683,291*. The Developer has
completed and funded the Major Improvements allocable to Improvement Area #3, the allocable cost of which was
approximately $2,838,109 and was funded with cash available to the Developer. As of September 30, 2025, the
Developer has expended approximately $12,956,772 on constructing the Improvement Area #3 Improvements which
was funded with cash available to the Developer. See “THE DEVELOPER – History and Financing of the District.”
Expected Build-Out and Home Prices in the Development
The following tables reflect the Developer’s expected home prices, build-out and absorption schedules for
homes in the District.
44
EXPECTED BUILDOUT OF THE DISTRICT AND ABSORPTION OF HOMES
Improvement Area
and Lot Type
Number of Lots
Actual/Expected
Start Date
Actual/Expected
Completion Date
Actual/Expected Date
of First
Sale to Homeowners
Actual/Expected Date
of Final Sale to
Homeowners
Improvement Area #1
50’ 188 September 2021 March 2023 September 2023 October 2024
60’ 30 September 2021 March 2023 September 2023 October 2024
218
Improvement Area #2-A
60’ 75 June 2023 December 2024 March 2025 Februar 2026
75
Improvement Area #2-
40’ 26 June 2023 December 2024 March 2025 Februar 2026
50’ 97 June 2023 December 2024 March 2025 Februar 2026
123
Improvement Area #3
(Phase 3)
40’ 118 March 2024 Jul 2025 September 2025 April 2027
50’ 102 March 2024 Jul 2025 September 2025 April 2027
220
Improvement Area #3
(Phase 4)
Townhome 91 March 2024 ovember 2025 Januar 2026 June 2028
40’ 222 March 2024 ovember 2025 Ma 2027 ovember 2028
313
Total 949
ESTIMATED HOME PRICES
Improvement Area
and Lot Type
Number of Lots
Average Base
Home Price
Improvement Area #1
50’ 188 $360,000
60’ 30 $375,000
218
Improvement Area #2-
60’ 75 $385,000
75
Improvement Area #2-B
40’ 26 $300,000
50’ 97 $345,000
123
Improvement Area #3
(Phase 3)
40’ 118 $300,000
50’ 102 $350,000
220
Improvement Area #3
(Phase 4)
Townhome 91 $275,000
40’ 222 $300,000
313
Total 949
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Development Agreement
The City and LHJH Properties, Ltd. (the “Previous Owner”), entered into a Development Agreement, which
was assigned to DRHI, Inc., and subsequently assigned to the Developer, effective as of November 10, 2020 (the
“Original Development Agreement”). The City and the Developer also entered into The Woods at Lindsey Place
Subdivision Improvement Agreement, effective January 12, 2021, the First Amendment to Development Agreement,
The Woods at Lindsey Place Subdivision Improvement Agreement, effective January 24, 2023, the Second
Amendment to Development Agreement effective as of July 25, 2023, and the Third Amendment to Development
Agreement effective August 27, 2024 (such agreements, collectively, with the Original Development Agreement, the
“Development Agreement”).
Pursuant to the Development Agreement, the Developer has the right to construct public improvements for
the District, including the Improvement Areas #2-3 Projects, according to certain rules and regulations of the City,
and to be reimbursed for a portion of the costs of such construction through the proceeds of the Assessments and/or
the Bonds. The Development Agreement provides certain requirements to be met for the issuance of the Bonds and
any additional bonds issued for the payment of additional Authorized Improvements (defined in the Development
Agreement and the PID Act) (collectively, “PID Bonds”), including (i) the total amount of PID Bonds may not exceed
$55,000,000, not including refunding bonds; (ii) the final maturity of each series of PID Bonds may not occur later
than 30 years from the date of issuance of such PID Bonds; (iii) the final maturity of all PID Bonds may not exceed
January 24, 2068; (iv) the maximum equivalent tax rate, including the PID Assessments associated with the PID Bonds
and all overlapping taxing jurisdictions, may not exceed $0.78 per $100 taxable assessed valuation without prior
written consent of the City; and (v) the ratio of the appraised value of the property being financed to the par amount
of the PID Bonds proposed to be issued with respect to such property must be at least 3:1, unless a lower ratio is
approved by the City.
In addition, the Development Agreement obligates the Developer to:
Construct a two-lane segment of Buddy Hayes Boulevard (formerly Throckmorton Boulevard)
immediately adjacent to the District and extending approximately 350’ south from the intersection
of Rosamond Parkway to the north boundary of the District, such construction to be commenced
within 180 days of January 24, 2023, and completed within 730 days of January 24, 2023. The
Developer completed construction and the two-lane segment of Buddy Hayes Boulevard was
accepted by the City August 2024;
Construct two lanes of Rosamond Parkway from US 75 to Anna High School by January 1, 2023.
The Developer completed construction and the extension of Rosamond Parkway was accepted by
the City in March 2023;
Construct landscaping, screening, and entryways for each phase of the Development within 150
days of final acceptance by the City of the public improvements in such phase. The Developer has
completed construction such improvements in Improvement Area #1 and Improvement Area #2;
Construct Park Improvements, including but not limited to shelter/shade structures, playground
picnic areas, seating areas/seat walls, secluded seating areas, 8’ concrete trails, 6’ concrete paving
areas, dog parks, entry signs, trail heads, parking, underbrush, and undisturbed wooded areas, at a
minimum cost of $3,800,000, such improvements to be constructed concurrently with the
Improvement Area #1 Improvements and completed within 30 months of January 24, 2023. The
Developer completed the Park Improvements in July 2025.;
Only if, by the commencement of construction of certain public infrastructure the City has made
arrangements to finance oversizing of such infrastructure, the Developer shall construct oversized
public infrastructure; and
46
Pay the PID City Fee of $3,400 per residential lot in each phase prior to issuance of PID Bonds for
such phase.
In addition, the Development Agreement obligates the City to:
Provide credits to Impact Fees (“Impact Fee Credits”) to the Developer for costs of any of the public
improvements in the District are in the City’s Capital Improvement Plan (“CIP”), and such costs are
not fully refunded by the Bonds or the Improvement Area #1 Bonds in an amount equal to the lesser
of (i) $8,459,774.38 or (ii) the amount of Impact Fees actually collected by the City as contemplated
in the Development Agreement;
Provide plans and acquire easements and right-of-way for Rosamond Parkway;
Design and construct Ferguson Parkway along the easternmost boundary of the District; and
Design and commence construction of Throckmorton Sewer Extension from FM 455 to County
Road 370, unless the Developer elects to construct the extension for which the City shall reimburse
the Developer with Impact Fee Credits. The Developer elected to construct such extension. The
Developer completed construction of the extension and it was accepted by the City in March 2023.
Reimbursement Agreement
The City and the Developer entered into that certain “Remainder Area Funding and Reimbursement
Agreement” for the District, effective December 17, 2024 (the “Reimbursement Agreement”), relating to the
obligation of the City to reimburse the Developer for the Actual Costs to construct the Improvement Areas #2-3
Projects and costs of issuance of the Bonds from proceeds of the Bonds (the “Reimbursement Obligation”). Upon
delivery of the Bonds pursuant to the Indenture, the Reimbursement Obligation shall be satisfied and the
Reimbursement Agreement will terminate.
Pursuant to the Service and Assessment Plan, the Development Agreement, and the Reimbursement
Agreement, the Developer will be responsible for any Actual Costs of the Improvement Areas #2-3 Projects in excess
of the amounts funded with proceeds of the Bonds without reimbursement by the City. See “– Development
Agreement,” “APPENDIX F – Development Agreement,” and “APPENDIX G – Reimbursement Agreement.”
Zoning/Permitting
The District is currently zoned as a planned development district pursuant to Ordinance No. 881-2020
adopted by the City Council on November 10, 2020 (the “PDD Ordinance”). The PDD Ordinance allows certain
restricted commercial, single-family residential, and single-family residential zero lot line uses and establishes
guidelines pertaining to purpose, height, area, setbacks, aesthetics, landscaping, and use. Because the District lies
within the city limits of the City, the City’s zoning and subdivision regulations control the aspects of development not
specifically set forth in the PDD Ordinance or the Development Agreement.
Private Improvements
Amenities in the District are expected to include a 400 square foot amenity center with swimming pool and
cabana, hike and bike trails, and parks (collectively, the “Private Improvements”). The amenity center, swimming
pool, and cabana were completed in August 2024. The total cost to construct the amenity center was approximately
$1,963,790.50. The Developer completed the remainder of the amenities in Q3 2025. The total expected costs to
construct the Private Improvements is approximately $3,801,550.50, which will be paid entirely by the Developer,
without reimbursement by the City, from cash on hand.
The Private Improvements will be owned, operated, and maintained by the HOA. The HOA will provide for
the ongoing operation, maintenance, and repair of such private improvements through the administration of a property
47
owner’s association fee to be paid by each lot owner within the District. See “OVERLAPPING TAXES AND DEBT
– Homeowners’ Association.”
Education
Students in the District will attend schools in the Anna Independent School District (“AISD”). AISD serves
the City and other portions of Collin County. AISD enrolls over 6,000 students in one high school, two middle schools,
five elementary schools, and a special programs center. Students in the District are expected to attend Bryant
Elementary School (approximately 2,000’ from the District), Slayter Creek Middle School (approximately 3,500’
from the District), and Anna High School (approximately 1,400’ from the District).
The Texas Education Agency (“TEA”) school accountability ratings, AISD, Bryant Elementary School and
Slayter Creek Middle School was rated “C” were rated “C” for the 2024-2025 school year, and Anna High School
was rated “A” for the 2024-2025 school year. GreatSchools.org currently rates Bryant Elementary School a 5/10,
Slayter Creek Middle School a 3/10 (as Anna Middle School) and Anna High School a 6/10.
Environmental
A Phase One Environmental Site Assessment (the “Phase One ESA”) of the property within the District was
completed on July 20, 2020. Based on the information presented in the Phase One ESA, there was no evidence that
the Development was under environmental regulatory review or enforcement action. The site reconnaissance,
regulatory database review and historical source review revealed no evidence of recognized environmental conditions
involving the site.
According to the website for the Texas Parks and Wildlife Department, the whooping crane is a federally
recognized endangered species and the rufa red knot, piping plover, and black rail are federally recognized threatened
species in Collin County. The Developer is not aware of any endangered or threatened species located on District
property.
Existing Mineral and Groundwater Rights, Easements and Other Third-Party Property Rights
The Developer owns all mineral rights, royalty interests, and groundwater rights to property in the District.
The Developer is not aware of any ongoing mineral rights development or exploration on or adjacent to the property
within the District. The Developer is not aware of any interest in real property (including mineral rights) owned by
the owners adjacent to the District. Certain rules and regulations of the Texas Railroad Commission may restrict the
ability of the any mineral owners to explore or develop the property due to well density, acreage, or location issues.
Although the Developer does not expect adjacent property owners to rights in or around the District, to have
a material adverse effect on the Development, the property within the District, or the ability of landowners within the
District to pay Assessments, the Developer makes no guarantee as to such expectation. See “BONDHOLDERS’
RISKS – Exercise of Third-Party Property Rights.”
Flood Zone
According to the Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM),
Community Panel Number 48085C0155J, effective June 2, 2009, approximately 99% of the District lies outside of
the 500-year flood plain, referred to as Zone X, and approximately 1% lies within the 100-year flood plain, referred
to as Zone A. According to the Developer, all of the Improvement Areas #2-3 Projects will be developed entirely
within Zone X. See “BONDHOLDERS’ RISKS – Flood Plain and Severe Weather Events.”
Utilities
Water and Wastewater. The City will provide both water and wastewater service to the District. The City’s
water distribution system and wastewater collection and treatment system currently have sufficient capacity to provide
water and wastewater service to the District. See “THE CITY – Water and Wastewater.”
48
Other Utilities. The Developer expects additional utilities to be provided by: (1) Phone/Data - AT&T; (2)
Electric – Oncor; (3) Cable – AT&T; and (4) Natural Gas - Atmos Energy.
THE DEVELOPER
The following information has been provided by the Developer. Certain of the following information is
beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the
City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information.
General
In general, the activities of a developer in a development such as the District include purchasing the land,
designing the subdivision, including the utilities and streets to be installed and any community facilities to be built,
defining a marketing program and building schedule, securing necessary governmental approvals and permits for
development, arranging for the construction of roads and the installation of utilities (including, in some cases, water,
sewer, and drainage facilities, as well as telephone and electric service) and selling improved lots and commercial
reserves, if any, to builders, developers, or other third parties. The relative success or failure of a developer to perform
such activities within a development may have a material effect on the security of revenue bonds, such as the Bonds,
issued by a municipality for a public improvement district. A developer is generally under no obligation to a public
improvement district, such as the District, to develop the property which it owns in a development. Furthermore, there
is no restriction on the developer’s right to sell any or all of the land which the developer owns within a development.
In addition, a developer is ordinarily the major tax and assessment payer within a district during its development.
Description of the Developer
The Developer is a wholly owned subsidiary of D.R. Horton, Inc., a Delaware Corporation (“D.R. Horton”).
D.R. Horton is a public company subject to the information requirements of the Securities and Exchange Act of 1934,
as amended, and in accordance therewith files reports and other information with the Securities Exchange Commission
(“SEC”). Reports, proxy statements, and other information filed by D.R. Horton can be inspected at the office of the
SEC at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Office of
the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material can be obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W. Washington,
D.C. 20549, at prescribed rates. Copies of the above reports, proxy statements, and other information may also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. The
SEC maintains a website at http://www.sec.gov that contains reports, proxy information statements, and other
information regarding registrants that file electronically with the SEC.
In addition, D.R. Horton makes available on its web site http://www.drhorton.com its annual reports on Form
10-K, quarterly reports on Form 10-Q, and current reports from Form 8-K (and any amendments to those reports) filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as practicable after they have been
electronically filed with the SEC as well as other financial institutions. Unless otherwise specified, information
contained on D.R. Horton’s website, available by hyperlink from D.R. Horton’s website or on the SEC’s
website, is not incorporated into this Limited Offering Memorandum.
NEITHER THE BONDS NOR THE ASSESSMENTS CONSTITUTE INDEBTEDNESS OF, NOR
ARE THEY GUARANTEED BY, THE DEVELOPER OR D.R. HORTON.
Biographies of Key Developer Parties
David Booth, CPA (Land Manager – Head of Land Department). David Booth holds a BBA in Accounting
from Texas A&M University and is a Certified Public Accountant. He has over 29 years of experience in the
homebuilding industry, all at D.R. Horton, including five years in corporate accounting and 24 years in land acquisition
and development.
49
Damon Ainsworth (Land Development Project Manager – On-site Development Manager. Damon
Ainsworth holds a bachelor’s degree from East Texas State University. He has over 29 years of experience in the
homebuilding industry having worked for one private builder and one public builder.
History and Financing of the District
The Developer acquired the undeveloped property within the District in February 2021. No third-party
financing was used in the acquisition of such property. The Developer has funded, and expects to continue to fund,
the costs to construct the Improvement Areas #2-3 Projects with cash on hand. No liens are outstanding with respect
to such acquisition or construction.
In addition, pursuant to the Development Agreement, the City will provide Impact Fee Credits for costs of
any of the public improvements in the District that are within the City’s CIP in an amount equal to the lesser of (i)
$8,459,774.38 or (ii) the amount of Impact Fees actually collected by the City. In accordance with the Development
Agreement, the Developer has received approximately $3 million in Impact Fee Credits from the City in Improvement
Area #1. The Developer expects to receive approximately $3.9 million in Impact Fee Credits for Improvement Areas
#2-3.
THE ADMINISTRATOR
The following information has been provided by the Administrator. Certain of the following information is
beyond the direct knowledge of the City, the City’s Municipal Advisor, and the Underwriter, and none of the City, the
City’s Municipal Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. The
Administrator has reviewed this Limited Offering Memorandum and warrants and represents that the information
herein under the caption “THE ADMINISTRATOR” does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made herein, in the light of the circumstances
under which they are made, not misleading.
The City has selected P3Works, LLC, as the Administrator for the District. The City has entered into an
agreement with the Administrator to provide specialized services related to the administration of the District needed
to support the issuance of the Bonds. The Administrator will primarily be responsible for preparing the annual update
to the Service and Assessment Plan. The Administrator is a consulting firm focused on providing district services
relating to the formation and administration of public improvement districts, and is based in Austin, Houston, and
North Richland Hills, Texas.
The Administrator’s duties will include:
• Preparation of the annual update to the Service and Assessment Plan
• Preparation of assessment rolls for City billing and collection
• Establishing and maintaining a database of all City parcel IDs within the District
• Trust account analysis and reconciliation
• Property owner inquires
• Determination of Prepayment amounts
• Preparation and review of disclosure notices with Dissemination Agent
• Review of developer draw requests for reimbursement of authorized improvement costs.
The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has been
provided by P3Works and has been included in reliance upon the authority of such firm as an expert in the field
formation and administration of public improvement districts.
50
APPRAISAL
General. Integra Realty Resources — Dallas. (the “Appraiser”), prepared an appraisal report of Improvement
Area #3 for the City, and effective as to Phase 3 in Improvement Area #3 and Phase 4 in Improvement Area #3 as set
forth below, based upon a physical inspection of Improvement Areas #2-3 of the District conducted on September 18,
2025 (the “Appraisal”). The Appraisal was prepared at the request of the City and the Underwriter. The description
herein of the Appraisal is intended to be a brief summary only of the Appraisal as it relates to Improvement Area #3
of the District. The Appraisal is attached hereto as APPENDIX H and should be read in its entirety. The conclusions
reached in the Appraisal are subject to certain assumptions, hypothetical conditions, and qualifications, which are set
forth therein. See “APPENDIX H – Appraisal.”
Value Estimates. The Appraiser estimated the “As-Is” market value of the fee simple interests of the
Assessed Parcels in Phase 3 in Improvement Area #3 in the District and the prospective market value of Phase 4 in
Improvement Area #3 of District assuming that the Improvement Area #3 Projects allocable to Phase 4 are completed.
See “THE IMPROVEMENT AREAS #2-3 PROJECTS.”
The Appraisal does not reflect the value of Phase 3 in Improvement Area #3 of the District or Phase 4 in
Improvement Area #3 of the District as if sold to a single purchaser in a single transaction. The Appraisal provides
the fee simple estate values for Phase 3 in Improvement Area #3 of the District and Phase 4 in Improvement Area #3
of the District. See “APPENDIX H – Appraisal.”
The “As-Is” cumulative market value estimate for the assessable property within Phase 3 in Improvement
Area #3 of the District using the methodologies described in the Appraisal and subject to the limiting conditions and
assumptions set forth in the Appraisal, as of September 18, 2025, is $19,640,000.
The cumulative prospective market value estimate for the assessable property within Phase 4 in Improvement
Area #3 of the District using the methodologies described in the Appraisal and subject to the limiting conditions and
assumptions set forth in the Appraisal, as of November 30, 2025, is $21,964,200.
None of the City, the Developer, the Municipal Advisor, or the Underwriter makes any representation as to
the accuracy, completeness assumptions or information contained in the Appraisal. The assumptions and
qualifications with respect to the Appraisal are contained therein. There can be no assurance that any such assumptions
will be realized and the City, the Developer and the Underwriter make no representation as to the reasonableness of
such assumptions.
Prospective investors should read the complete Appraisal in order to make an informed decision
regarding any contemplated purchase of the Bonds. The complete Appraisal is attached as APPENDIX H.
No appraisal has been prepared for Improvement Area #2-A or Improvement Area #2-B of the
District.
BONDHOLDERS’ RISKS
Before purchasing any of the Bonds, prospective investors and their professional advisors should carefully
consider all of the risk factors described below which may create possibilities wherein interest may not be paid
when due or that the Bonds may not be paid at maturity or otherwise as scheduled, or, if paid, without premium, if
applicable. The following risk factors (which are not intended to be an exhaustive listing of all possible risks
associated with an investment in the Bonds) should be carefully considered prior to purchasing any of the Bonds.
Moreover, the order of presentation of the risks summarized below does not necessarily reflect the significance of
such investment risks.
General
THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY
FROM THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE, AS AND
TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE
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AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY
FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL
NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE
RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED
REVENUES AND OTHER ASSETS OF THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN
THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY
EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE
INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL
OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN
THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE.
The ability of the City to pay debt service on the Bonds as due is subject to various factors that are beyond
the City’s control. These factors include, among others, (a) the ability or willingness of property owners within
Improvement Areas #2-3 of the District to pay Assessments levied by the City, (b) cash flow delays associated with
the institution of foreclosure and enforcement proceedings against property within Improvement Areas #2-3 of the
District, (c) general and local economic conditions which may impact real property values, the ability to liquidate real
property holdings and the overall value of real property development projects, and (d) general economic conditions
which may impact the general ability to market and sell the lots within Improvement Areas #2-3 of the District, it
being understood that poor economic conditions within the City, State, and region may slow the assumed pace of sales
of such lots.
The rate of development of the property in Improvement Areas #2-3 of the District is directly related to the
vitality of the residential housing industry. In the event that the sale of the lands within Improvement Areas #2-3 of
the District should proceed more slowly than expected and the Developer is unable to pay the Assessments, only the
value of the lands, with improvements, will be available for payment of the debt service on the Bonds, and such value
can only be realized through the foreclosure or expeditious liquidation of the lands within Improvement Areas #2-3
of the District. There is no assurance that the value of such lands will be sufficient for that purpose and the expeditious
liquidation of real property through foreclosure or similar means is generally considered to yield sales proceeds in a
lesser sum than might otherwise be received through the orderly marketing of such real property.
The Underwriter is not obligated to make a market in or repurchase any of the Bonds, and no representation
is made by the Underwriter, the City, or the City’s Municipal Advisor that a market for the Bonds will develop and
be maintained in the future. If a market does develop, no assurance can be given regarding future price maintenance
of the Bonds.
The City has not applied for or received a rating on the Bonds. The absence of a rating could affect the future
marketability of the Bonds. There is no assurance that a secondary market for the Bonds will develop or that holders
who desire to sell their Bonds prior to the stated maturity will be able to do so.
Deemed Representations and Acknowledgment by Investors
Each Investor will be deemed to have acknowledged and represented to the City the matters set forth under
the heading “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS” which include, among others, a
representation and acknowledgment that the purchase of the Bonds involves investment risks, certain of which are set
forth under this heading “BONDHOLDERS’ RISKS” and elsewhere herein, and such Investor, either alone or with
its purchaser representative(s) (as defined in Rule 501(h) of Regulation D under the Securities Act of 1933), has
sophisticated knowledge and experience in financial and business matters and the capacity to evaluate such risks in
making an informed investment decision to purchase the Bonds, and the Investor can afford a complete loss of its
investment in the Bonds.
Assessment Limitations
Annual Installments of Assessments are billed to property owners in Improvement Areas #2-3 of the District.
Annual Installments are due and payable, and bear the same penalties and interest for non-payment, as for ad valorem
taxes as described under “ASSESSMENT PROCEDURES.” Additionally, Annual Installments established by the
Service and Assessment Plan correspond in number and proportionate amount to the number of installments and
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principal amounts of Bonds maturing in each year and the Administrative Expenses for such year. See
“ASSESSMENT PROCEDURES.” The unwillingness or inability of a property owner to pay regular property tax
bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular
property tax payments and Annual Installments of Assessment payments in the future.
In order to pay debt service on the Bonds, it is necessary that Annual Installments are paid in a timely manner.
Due to the lack of predictability in the collection of Annual Installments in Improvement Areas #2-3 of the District,
the City has established a Reserve Account in the Reserve Fund, to be funded from the proceeds of the Bonds, to cover
delinquencies. The Annual Installments are secured by the Assessment Lien. However, there can be no assurance
that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Account and delay
in payments of debt service on the Bonds. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and
Bankruptcy.”
Upon an ad valorem tax lien foreclosure event of a property within Improvement Areas #2-3 of the District,
any lien securing an Assessment that is delinquent will be foreclosed upon in the same manner as the ad valorem tax
lien (assuming all necessary conditions and procedures for foreclosure are duly satisfied). To the extent that a
foreclosure sale results in insufficient funds to pay in full both the delinquent ad valorem taxes and the delinquent
Assessments, the liens securing such delinquent ad valorem taxes and delinquent Assessments would likely be
extinguished. Any remaining unpaid balance of the delinquent Assessments would then be an unsecured personal
liability of the original property owner.
Based upon the language of Texas Local Government Code, §372.017(b), case law relating to other types of
assessment liens and opinions of the Texas Attorney General, the Assessment Lien as it relates to installment payments
that are not yet due should remain in effect following an ad valorem tax lien foreclosure, with future installment
payments not being accelerated. Texas Local Government Code §372.018(d) supports this position, stating that an
Assessment Lien runs with the land and the portion of an assessment payment that has not yet come due is not
eliminated by foreclosure of an ad valorem tax lien.
The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed
after the adoption of the respective Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon
if any homestead rights of a property owner were properly claimed prior to the adoption of the respective Assessment
Ordinance (“Pre-existing Homestead Rights”) for as long as such rights are maintained on the property. It is unclear
under Texas law whether or not Pre-existing Homestead Rights would prevent the Assessment Lien from attaching to
such homestead property or instead cause the Assessment Lien to attach, but remain subject to, the Pre-existing
Homestead Rights.
Under Texas law, in order to establish homestead rights, the claimant must show a combination of both overt
acts of homestead usage and intention on the part of the owner to claim the land as a homestead. Mere ownership of
the property alone is insufficient and the intent to use the property as a homestead must be a present one, not an
intention to make the property a homestead at some indefinite time in the future. As of the date of adoption of the
Improvement Area #2 Assessment Ordinance, no such homestead rights had been claimed in Improvement Area #2.
Furthermore, the Developer is not eligible to claim homestead rights and the Developer has represented that it owned
all property within Improvement Area #2-A and Improvement Area #2-B of the District as of the date of the
Improvement Area #2 Assessment Ordinance and it will own all property within Improvement Area #3 of the District
as of the date of the Improvement Area #3 Assessment Ordinance. Consequently, there are and can be no homestead
rights on the Assessed Property superior to the Assessment Lien and, therefore, the Assessment Lien may be foreclosed
upon by the City.
Failure by owners of the parcels to pay Annual Installments when due, depletion of the Reserve Fund, delay
in foreclosure proceedings, or inability of the City to sell parcels which have been subject to foreclosure proceedings
for amounts sufficient to cover the delinquent installments of Assessments levied against such parcels may result in
the inability of the City to make full or punctual payments of debt service on the Bonds.
THE ASSESSMENTS WILL CONSTITUTE A FIRST AND PRIOR LIEN AGAINST THE PROPERTY
ASSESSED, SUPERIOR TO ALL OTHER LIENS AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE,
COUNTY, SCHOOL DISTRICT, OR MUNICIPALITY AD VALOREM TAXES AND WILL BE PERSONAL
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OBLIGATIONS OF AND CHARGES AGAINST THE OWNERS OF PROPERTY LOCATED WITHIN
IMPROVEMENT AREAS #2-3 OF THE DISTRICT.
Completion of the Improvement Areas #2-3 Projects
The construction of some of the Improvement Areas #2-3 Projects is not yet complete. See “THE
IMPROVEMENT AREAS #2-3 PROJECTS – General.” The cost and time for completion of all of such
improvements is uncertain and may be affected by changes in national, regional, and local and economic conditions;
changes in long and short term interest rates; changes in the climate for real estate purchases; changes in demand for
or supply of competing properties; changes in local, regional, and national market and economic conditions;
unanticipated development costs, market preferences, and architectural trends; unforeseen environmental risks and
controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of
mortgage funds to buyers of the homes to be built in Improvement Areas #2-3 of the District, which may render the
sale of such homes difficult or unattractive; acts of war, terrorism, or other political instability; delays or inability to
obtain governmental approvals; changes in laws; moratorium; force majeure (which may result in uninsured losses);
strikes; labor shortages; energy shortages; material shortages; inflation; adverse weather conditions; subcontractor
defaults; and other unknown contingencies and factors beyond the control of the Developer and the City. If cost
overruns result in delay of construction, or if other delays are experienced, the Developer may be unable to complete
timely the Improvement Areas #-2 Improvements necessary for delivery of lots in Improvement Areas #2-3 of the
District.
Failure or Inability to Complete Proposed Development
Proposed development within Improvement Areas #2-3 of the District may be affected by changes in general
economic conditions, fluctuations in the real estate market and interest rates, changes in the income tax treatment of
real property ownership, unexpected increases in development costs and other similar factors as well as availability
of utilities and the development or existence of environmental concerns with such land. See “– Hazardous Substances”
and “– Availability of Utilities” below. Land development within Improvement Areas #2-3 of the District could also
be affected adversely by changes in governmental policies, including, but not limited to, governmental policies to
restrict or control development. Any approvals needed in the future for Improvement Areas #2-3 of the District must
come from the City. There can be no assurances that other similar projects will not be developed in the future or that
existing projects will not be upgraded or otherwise able to compete with the Development. A slowdown of the
development process and the related absorption rate within the Development because of any or all of the foregoing
could affect adversely land values. Such limitations could adversely impact the completion of the Development as
anticipated. THE TIMELY PAYMENT OF THE BONDS DEPENDS UPON THE WILLINGNESS AND ABILITY
OF THE DEVELOPER AND ANY SUBSEQUENT OWNERS TO PAY THE ASSESSMENTS WHEN DUE. ANY
OR ALL OF THE FOREGOING COULD REDUCE THE WILLINGNESS AND THE ABILITY OF SUCH
OWNERS TO PAY THE ASSESSMENTS AND COULD GREATLY REDUCE THE VALUE OF PROPERTY
WITHIN IMPROVEMENT AREAS #2-3 OF THE DISTRICT IN THE EVENT SUCH PROPERTY HAS TO BE
FORECLOSED. In that event, there could be a default in the payment of the Bonds.
Completion of Homes
The cost and time for completion of homes by the Developer is uncertain and may be affected by changes in
national, regional, and local market and economic conditions; changes in long and short term interest rates; changes
in the climate for real estate purchases; changes in demand for or supply of competing properties; unanticipated
development costs, market preferences and architectural trends; unforeseen environmental risks and controls; the
adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of mortgage funds to
buyers of the homes yet to be built in the Development, which may render the sale of such homes difficult or
unattractive; acts of war, terrorism or other political instability; delays or inability to obtain governmental approvals;
changes in laws; moratorium; force majeure (which may result in uninsured losses); strikes; labor shortages; energy
shortages; material shortages; inflation; adverse weather conditions; subcontractor defaults; and other unknown
contingencies and factors beyond the control of the Developer.
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Risks Related to the Current Residential Real Estate Market
The real estate market is currently experiencing a slowing of new home sales and new home closings due in
part to rising inflation and mortgage interest rates. It is difficult to determine what effects the on-again, off-again tariffs
imposed by the federal administration and retaliatory tariffs against the United States will have on inflation and
mortgage interest rates. Downturns in the real estate market, mortgage rates, and other factors beyond the control of
the Developer, including general economic conditions, may impact the timing of lot and home sales within the District.
No assurances can be given that projected home prices and buildout values presented in this Limited Offering
Memorandum will be realized.
Risks Related to Current Increase in Costs of Building Materials and Labor Shortages
As a result of low supply and high demand, shipping constraints, and the ongoing trade war (including tariffs
and retaliatory tariffs), there have been substantial increases in the cost of lumber and other materials, causing many
homebuilders and general contractors to experience budget overruns. Further, the federal administration’s on-again,
off-again tariffs, threatened impositions of tariffs, and the imposition or threatened imposition of retaliatory tariffs
against the United States will impact the ability of the homebuilders to estimate costs. If the cost of materials remains
elevated, it may impact the ability of the homebuilders to construct homes in Improvement Areas #2-3 of the District.
The federal administration’s immigration policies may impact the State’s workforce. Undocumented
construction workers make up a large percentage of construction workers in the State. Mass deportations or
immigration policies that make it challenging for foreign workers to work in the United States may result in labor
shortages, particularly in construction. Labor shortages will impact the homebuilders’ ability to construct homes
within Improvement Areas #2-3 of the District.
General Risks of Real Estate Investment and Development
Investments in undeveloped or developing real estate are generally considered to be speculative in nature and
to involve a high degree of risk. The Development will be subject to the risks generally incident to real estate
investments and development. Many factors that may affect the Development, including the schedule for and/or the
costs of the various improvements to be constructed within the District necessary to serve residents therein, as well as
the operating revenues of the Developer, including those derived from the Development, are not within the control of
the Developer. Such factors include changes in national, regional and local economic conditions; changes in long and
short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing
properties; changes in local, regional and national market and economic conditions; unanticipated development costs,
market preferences and architectural trends; unforeseen environmental risks and controls; the adverse use of adjacent
and neighboring real estate; changes in interest rates and the availability of mortgage funds to buyers of the homes to
be built in the Development, which may render the sale of such homes difficult or unattractive; acts of war, terrorism
or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; acts
of God (which may result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation;
adverse weather conditions; contractor or subcontractor defaults; and other unknown contingencies and factors beyond
the control of the Developer.
A slowdown of the development process and the related absorption rate within the Development because of
any or all of the foregoing could affect adversely land values. The timely payment of the Bonds depends on the
willingness and ability of the Developer and any subsequent owners to pay the Assessments when due. Any or all of
the foregoing could reduce the willingness and ability of such owners to pay the Assessments and could greatly reduce
the value of the property within the District in the event such property has to be foreclosed. If Annual Installments of
Assessments are not timely paid and there are insufficient funds in the accounts of the Reserve Fund, a nonpayment
could result in a payment default under the Indenture.
Availability of Utilities
The progress of development within Improvement Areas #2-3 of the District is also dependent upon the City
providing an adequate water and wastewater service to the Development. If the City fails to provide water and
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wastewater services to the property in the District, the Development cannot be substantially completed, and the
Developer will not be able to construct homes. See “THE CITY – Water and Wastewater.”
Absorption Rate
There can be no assurance that the Developer will be able to achieve its anticipated absorption rates. Failure
to achieve the absorption rate estimates will adversely affect the estimated value of Improvement Areas #2-3 of the
District, could impair the economic viability of Improvement Areas #2-3 of the District, and could reduce the ability
or desire of property owners to pay the Assessments.
State Law Regarding Notice of Assessments
The 87th Legislature passed HB 1543, which became effective September 1, 2021, and requires a person
who proposes to sell or otherwise convey real property within a public improvement district to provide to the purchaser
of the property, before the execution of a binding contract of purchase and sale, written notice of the obligation to pay
public improvement district assessments, in accordance with Section 5.014, Texas Property Code, as amended. In the
event a contract of purchase and sale is entered into without the seller providing the notice, the intended purchaser is
entitled to terminate the contract of purchase and sale. If the Developer does not provide the required notice and
prospective purchasers of property within Improvement Areas #2-3 of the District terminate a purchase and sale
contract, the anticipated absorption schedule may be affected. In addition to the right to terminate the purchase
contract, a property owner who did not receive the required notice is entitled, after sale, to sue for damages for (i) all
costs relative to the purchase, plus interest and reasonable attorney’s fees, or (ii) an amount not to exceed $5,000, plus
reasonable attorney’s fees. In a suit filed pursuant to clause (i), any damages awarded must go first to pay any
outstanding liens on the property. In such an event, the outstanding Assessments on such property may be paid. On
payment of all damages respectively to the lienholders and purchaser pursuant to clause (i), the purchaser is required
to reconvey the property to the seller. Further, if the Developer does not provide the required notice and becomes
liable for monetary damages, the anticipated buildout and absorption schedule may be affected. No assurances can
be given that the projected buildout and absorption schedules presented in this Limited Offering Memorandum will
be realized. The forms of notice to be provided to homebuyers are attached as appendices to the Service and
Assessment Plan. See “APPENDIX C – Service and Assessment Plan.”
Potential Future Changes in State Law Regarding Public Improvement Districts
During prior Texas legislative sessions and interim business of the Texas legislature, various proposals and
reports have been presented by committees of Texas Senate and Texas House of Representatives which suggest or
recommend changes to the PID Act relating to oversight of bonds secured by special assessments including adopting
requirements relating to levels of build out or adding State level oversight in connection with the issuance of bonds
secured by special assessments under the PID Act. The 89th Legislative Session of the State (the “89th Regular
Session”) concluded on June 2, 2025, without any legislation being passed by either chamber of the Texas legislature
recommending oversight of bonds secured by assessments. When the regular Legislature is not in session, the
Governor of Texas may call one or more special sessions, at the Governor’s direction, each lasting no more than 30
days, and for which the Governor sets the agenda. The Governor called two special sessions, the first of which began
on July 21, 2025 and ended on August 15, 2025 and the second of which began on August 15, 2025 and ended on
September 4, 2025. No legislation relating to special assessments was proposed for the special sessions. It is
impossible to predict what new proposals may be presented regarding the PID Act and the issuance of special
assessment bonds during any upcoming legislative sessions, whether such new proposals or any previous proposals
regarding the same will be adopted by the Texas Senate and House of Representatives and signed by the Governor,
and, if adopted, the form thereof. It is impossible to predict with certainty the impact that any such future legislation
will or may have on the security for the Bonds.
Direct and Overlapping Indebtedness, Assessments and Taxes
The ability of an owner of property within Improvement Areas #2-3 of the District to pay the Assessments
could be affected by the existence of other taxes and assessments imposed upon the property. Public entities whose
boundaries overlap those of Improvement Areas #2-3 of the District currently impose ad valorem taxes on the property
within Improvement Areas #2-3 of the District and will likely do so in the future. Such entities could also impose
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assessment liens on the property within Improvement Areas #2-3 of the District. The imposition of additional liens,
whether from taxes, assessments, or private financing, may reduce the ability or willingness of the landowners to pay
the Assessments. See “OVERLAPPING TAXES AND DEBT.”
Depletion of Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account
Failure of the owners of property within Improvement Areas #2-3 of the District to pay the Assessments
when due could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of
property upon a foreclosure or otherwise or delinquency redemptions after a foreclosure sale, if any. There could be
a default in payments of the principal of and interest on the Bonds if sufficient amounts are not available in the Reserve
Fund. The Delinquency and Prepayment Reserve Account of the Reserve Fund is not funded from proceeds of the
Bonds. Instead, funding of the Delinquency and Prepayment Reserve Account is accumulated over time, by the
mechanism described in “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and
Prepayment Reserve Account.” The Indenture provides that if after a withdrawal from the Reserve Account the
amounts therein are less than the Reserve Account Requirement, the Trustee shall transfer an amount from the Pledged
Revenue Fund to the Reserve Account sufficient to cure such deficiency. The Indenture also provides that if the
amount on deposit in the Delinquency and Prepayment Reserve Account shall at any time be less than the Delinquency
and Prepayment Reserve Requirement, the Trustee shall notify the City, in writing, of the amount of such shortfall
and the City shall resume collecting the Additional Interest and shall file a City Certificate with the Trustee instructing
the Trustee to resume depositing the Additional Interest from the Bond Pledged Revenue Account of the Pledged
Revenue Fund into the Delinquency and Prepayment Reserve Account until the Delinquency and Prepayment Reserve
Requirement has been accumulated in the Delinquency and Prepayment Reserve Account; provided, however, that
the City shall not be required to replenish the Delinquency and Prepayment Reserve Account in the event funds are
transferred from the Delinquency and Prepayment Reserve Account to the Redemption Fund as a result of an
extraordinary optional redemption of Bonds from the proceeds of a Prepayment, as described under “SECURITY
FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account ).”
Hazardous Substances
While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other
less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may
be realized to the assessment is a claim with regard to a hazardous substance. In general, the owners and operators of
a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous
substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980,
sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these
laws. It is likely that, should any of the parcels of land located in Improvement Areas #2-3 of the District be affected
by a hazardous substance, the marketability and value of such parcels would be reduced by the costs of remedying the
condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the
seller.
The value of the land within Improvement Areas #2-3 of the District does not take into account the possible
liability of the owner (or operator) for the remediation of a hazardous substance condition on the property in
Improvement Areas #2-3 of the District. The City has not independently verified, and is not aware, that the owner (or
operator) of any of the parcels within Improvement Areas #2-3 of the District has such a current liability with respect
to such parcel; however, it is possible that such liabilities do currently exist and that the City is not aware of them.
Further, it is possible that liabilities may arise in the future with respect to any of the land within Improvement
Areas #2-3 of the District resulting from the existence, currently, of a substance presently classified as hazardous but
which has not been released or the release of which is not presently threatened, or may arise in the future resulting
from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the
future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but
from the method of handling it. The actual occurrence of any of these possibilities could significantly negatively
affect the value of a parcel that is realizable upon a foreclosure.
See “THE DEVELOPMENT – Environmental” for discussion of the Phase One ESA performed on property
within the District.
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Exercise of Third-Party Property Rights
As described under “THE DEVELOPMENT – Existing Mineral and Groundwater Rights, Easements and
Other Third-Party Property Rights,” all of the mineral rights, royalty interests, and easement reservations located
within the District are owned by the Developer.
The Developer does not expect the existence or exercise of any third-party rights in or around the District to
have a material adverse effect on the Development, the property within Improvement Areas #2-3 of the District, or
the ability of landowners within Improvement Areas #2-3 of the District to pay Assessments. However, none of the
City, the Municipal Advisor, or the Underwriter provide any assurances as to such Developer expectations.
Regulation
Development within Improvement Areas #2-3 of the District may be subject to future federal, State, and local
regulations. Approval may be required from various agencies from time to time in connection with the layout and
design of development in Improvement Areas #2-3 of the District, the nature and extent of Improvement Areas #2-3
Projects, land use, zoning, and other matters. Failure to meet any such regulations or obtain any such approvals in a
timely manner could delay or adversely affect development in Improvement Areas #2-3 of the District and property
values.
Bankruptcy
The payment of Assessments and the ability of the City to foreclose on the lien of a delinquent unpaid
Assessment may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’ rights or by the
laws of the State relating to judicial foreclosure. Although bankruptcy proceedings would not cause the Assessments
to become extinguished, bankruptcy of a property owner in all likelihood would result in a delay in prosecuting
foreclosure proceedings. Such a delay would increase the likelihood of a delay or default in payment of the principal
of and interest on the Bonds, and the possibility that delinquent Assessments might not be paid in full.
Bondholders’ Remedies and Bankruptcy
In the event of default in the payment of principal of or interest on the Bonds or the occurrence of any other
Event of Default under the Indenture, the Trustee may, and at the written direction of the Owners of not less than 51%
in aggregate Outstanding principal amount of the Bonds and its receipt of indemnity satisfactory to it shall, proceed
against the City for the purpose of protecting and enforcing the rights of the Owners under the Indenture, by action
seeking mandamus or by other suit, action, or special proceeding in equity or at law, in any court of competent
jurisdiction, for any relief to the extent permitted by the Indenture or Applicable Laws, including, but not limited to,
the specific performance of any covenant or agreement contained therein, or injunction; provided, however, that no
action for money damages against the City may be sought or shall be permitted.
The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel
performance of the City’s obligations under the Bonds or the Indenture and such obligations are not uncertain or
disputed. The remedy of mandamus is controlled by equitable principles, so its use rests within the discretion of the
court but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and,
consequently, the remedy of mandamus may have to be relied upon from year to year. The owners of the Bonds cannot
themselves foreclose on or sell property within Improvement Areas #2-3 in order to pay the principal of and interest
on the Bonds. The enforceability of the rights and remedies of the owners of the Bonds further may be limited by laws
relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of
political subdivisions such as the City. In this regard, should the City file a petition for protection from creditors under
federal bankruptcy laws, the remedy of mandamus or the right of the City to seek judicial foreclosure of its Assessment
Lien would be automatically stayed and could not be pursued unless authorized by a federal bankruptcy judge. See
“BONDHOLDERS’ RISKS – Bankruptcy Limitation to Bondholders’ Rights.”
Any bankruptcy court with jurisdiction over bankruptcy proceedings initiated by or against a property owner
within Improvement Areas #2-3 of the District pursuant to the Federal Bankruptcy Code could, subject to its discretion,
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delay or limit any attempt by the City to collect delinquent Assessments, or delinquent ad valorem taxes, against such
property owner.
In addition, in 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 that statutory language such as “sue and be sued,” in and of itself, did not constitute a
clear and unambiguous waiver of sovereign immunity. 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 contracts entered into by
cities for providing goods or services to cities.
In Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (“Wasson”), the Texas Supreme
Court (the “Court”) addressed whether the distinction between governmental and proprietary acts (as found in tort-
based causes of action) applies to breach of contract claims against municipalities. The Court analyzed the rationale
behind the Proprietary-Governmental Dichotomy to determine that “a city’s proprietary functions are not done
pursuant to the ‘will of the people’” and protecting such municipalities “via the [S]tate’s immunity is not an efficient
way to ensure efficient allocation of [S]tate resources.” While the Court recognized that the distinction between
governmental and proprietary functions is not clear, the Wasson opinion held that the Proprietary-Governmental
Dichotomy applies in a contract-claims context. The Court reviewed Wasson for a second time and issued an opinion
on October 5, 2018, clarifying that to determine whether governmental immunity applies to a breach of contract claim,
the proper inquiry is whether the municipality was engaged in a governmental or proprietary function when it entered
into the contract, not at the time of the alleged breach. Therefore, in regard to municipal contract cases (as in tort
claims), it is incumbent on the courts to determine whether a function was proprietary or governmental based upon
the statutory and common law guidance at the time of inception of the contractual relationship. Texas jurisprudence
has generally held that proprietary functions are those conducted by a city in its private capacity, for the benefit only
of those within its corporate limits, and not as an arm of the government or under authority or for the benefit of the
State; these are usually activities that can be, and often are, provided by private persons, and therefore are not done as
a branch of the State, and do not implicate the state’s immunity since they are not performed under the authority, or
for the benefit, of the State as sovereign. Notwithstanding the foregoing new case law issued by the Court, such
sovereign immunity issues have not been adjudicated in relation to bond matters (specifically, in regard to the issuance
of municipal debt). Each situation will be prospectively evaluated based on the facts and circumstances surrounding
the contract in question to determine if a suit, and subsequently, a judgment, is justiciable against a municipality.
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 such act. Because it is unclear whether the Texas legislature has effectively waived the City’s sovereign
immunity from a suit for money damages in the absence of City action, the Trustee or the owners of the Bonds may
not be able to bring such a suit against the City for breach of the Bonds or the Indenture covenants. As noted above,
the Indenture provides that owners of the Bonds may exercise the remedy of mandamus to enforce the obligations of
the City under the Indenture. 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 interpreted by Texas courts. In general, Texas courts have held that a writ of mandamus may
be issued to require public officials to perform ministerial 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 moneys due under a contract).
Bankruptcy Limitation to Bondholders’ Rights
The enforceability of the rights and remedies of the owners of the Bonds may be limited by laws relating to
bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political
subdivisions such as the City. The City is authorized under State law to voluntarily proceed under Chapter 9 of the
Federal Bankruptcy Code, 11 U.S.C. 901-946. The City may proceed under Chapter 9 if it (1) is generally not paying
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its debts, or unable to meet its debts, as they become due, (2) desires to effect a plan to adjust such debts, and (3) has
either obtained the agreement of or negotiated in good faith with its creditors, is unable to negotiate with its creditors
because negotiation is impracticable, or reasonably believes that a creditor may attempt to obtain a preferential
transfer.
If the City decides in the future to proceed voluntarily under the Federal Bankruptcy Code, the City would
develop and file a plan for the adjustment of its debts, and the Bankruptcy Court would confirm the plan if (1) the plan
complies with the applicable provisions of the Federal Bankruptcy Code, (2) all payments to be made in connection
with the plan are fully disclosed and reasonable, (3) the City is not prohibited by law from taking any action necessary
to carry out the plan, (4) administrative expenses are paid in full, (5) all regulatory or electoral approvals required
under State law are obtained and (6) the plan is in the best interests of creditors and is feasible. The rights and remedies
of the owners of the Bonds would be adjusted in accordance with the confirmed plan of adjustment of the City’s debt.
Judicial Foreclosures
Judicial foreclosure proceedings are not mandatory; however, the City has covenanted to order and cause
such actions to be commenced. In the event a foreclosure is necessary, there could be a delay in payments to owners
of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the
foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and, in such event, there could be
an additional delay in payment of the principal of and interest on the Bonds or such payment may not be made in full.
Moreover, in filing a suit to foreclose, the City must join other taxing units that have claims for delinquent taxes
against all or part of the same property; the proceeds of any sale of property within Improvement Areas #2-3 of the
District available to pay debt service on the Bonds may be limited by the existence of other tax liens on the property.
See “OVERLAPPING TAXES AND DEBT.” Collection of delinquent taxes, assessments, and the Assessments may
be adversely affected by the effects of market conditions on the foreclose sale price, and by other factors, including
taxpayers’ right to redeem property within two years of foreclosure for residential and agricultural use property and
six months for other property, and by a time-consuming and expensive collection procedure.
No Acceleration
The Indenture expressly denies the right of acceleration in the event of a payment default or other default
under the terms of the Bonds or the Indenture.
Loss of Tax Exemption
The Indenture contains covenants by the City intended to preserve the exclusion from gross income of interest
on the Bonds for federal income tax purposes. As discussed under the caption “TAX MATTERS” herein, interest on
the Bonds could become includable in gross income for purposes of federal income taxation, retroactive to the date
the Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Indenture.
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or
state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could
affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions
and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted
cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the
foregoing matters.
Tax-Exempt Status of the Bonds
The Indenture contains covenants by the City intended to preserve the exclusion from gross income of interest
on the Bonds for federal income tax purposes. As discussed under the caption “TAX MATTERS,” interest on the
Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the
Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Indenture.
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the federal or
State level, may adversely affect the tax-exempt status of interest on the Bonds under federal or State law and could
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affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions
and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted
cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the
foregoing matters.
As further described in “TAX MATTERS” below, failure of the City to comply with the requirements of the
Internal Revenue Code of 1986 (the “Code”) and the related legal authorities, or changes in the federal tax law or its
application, could cause interest on the Bonds to be included in the gross income of owners of the Bonds for federal
income tax purposes, possibly from the date of original issuance of the Bonds. Further, the opinion of Bond Counsel
is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents
Bond Counsel’s judgment as to the proper treatment of interest on the Bonds for federal income tax purposes. It is
not binding on the Internal Revenue Service (“IRS”) or the courts. The IRS has an ongoing program of auditing
obligations that are issued and sold as bearing tax-exempt interest to determine whether, in the view of the IRS, interest
on such obligations is included in the gross income of the owners thereof for federal income tax purposes. It cannot
be predicted if this IRS focus could lead to an audit of the Bonds or what the result would be of any such audit. If an
audit of the Bonds is commenced, under current procedures parties other than the City would have little, if any, right
to participate in the audit process. Moreover, because achieving judicial review in connection with an audit of tax-
exempt obligations is difficult, obtaining an independent review of IRS positions with which the City legitimately
disagrees may not be practicable. Any action of the IRS, regardless of the outcome, including but not limited to
selection of the Bonds for audit, or the course or result of such audit, or an audit of obligations presenting similar tax
issues, may affect the market price for, or the marketability of, the Bonds. Finally, if the IRS ultimately determines
that the interest on the Bonds is not excluded from the gross income of Bondholders for federal income tax purposes,
the City may not have the resources to settle with the IRS, the Bonds are not required to be redeemed, and the interest
rate on the Bonds will not increase.
Management and Ownership
The management and ownership of the Developer and related or affiliated property owners could change in
the future. Purchasers of the Bonds should not rely on the management experience of such entities. There are no
assurances that such entities will not sell the subject property or that officers will not resign or be replaced. In such
circumstances, a new developer, homebuilder, or new officers in management positions may not have comparable
experience in projects comparable to the Development.
Dependence Upon Developer
The Developer currently owns all of the Assessed Property in Improvement Areas #2-3 of the District except
the 104 homes which have been sold in Improvement Area #2 of the District. As owner of most of the Assessed
Property, the Developer will have the obligation for payment of the majority of such Annual Installments. The ability
of the Developer to make full and timely payment of the Assessments will directly affect the ability of the City to
meet its debt service obligations with respect to the Bonds.
Use of Appraisal
Caution should be exercised in the evaluation and use of valuations included in the Appraisal. The Appraisal
is an estimate of market value as of a specified date based upon assumptions and limiting conditions and any
extraordinary assumptions specific to the relevant valuation and specified therein. The estimated market value
specified in the Appraisal is not a precise measure of value, but is based on a subjective comparison of related activity
taking place in the real estate market. The valuation set forth in the Appraisal is based on various assumptions of future
expectations and while the appraiser’s forecasts for properties in Improvement Areas #2-3 of the District is considered
to be reasonable at the current time, some of the assumptions may not materialize or may differ materially from actual
experience in the future. The Bonds will not necessarily trade at values determined solely by reference to the
underlying value of the properties in Improvement Areas #2-3 of the District.
In performing its analyses, an appraiser makes numerous assumptions with respect to general business,
economic and regulatory conditions, and other matters, many of which are beyond the Appraiser’s, Underwriter’s,
and City’s control, as well as to certain factual matters. Furthermore, the Appraiser’s analysis, opinions, and
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conclusions are necessarily based upon market, economic, financial, and other circumstances and conditions existing
prior to the valuation.
The intended use and user of the Appraisal are specifically identified in the Appraisal as agreed upon in the
contract for services and/or reliance language found in the Appraisal. The Appraiser has consented to the use of the
Appraisal in this Limited Offering Memorandum in connection with the issuance of the Bonds. No other use or user
of the Appraisal is permitted by any other party for any other purpose.
Flood Plain and Severe Weather Events
According to the Federal Emergency Management Agency (“FEMA”) Flood Insurance Rate Map,
Community Panel Number 48085C0155J, effective June 2, 2009, approximately 99% of the District lies outside of
the 500-year flood plain, referred to as Zone X, and approximately 1% lies within the 100-year flood plain, referred
to as Zone A. According to the Developer, all of the Improvement Areas #2-3 Projects will be developed entirely
within Zone X.
FEMA will from time to time revise its Flood Insurance Rate Maps. None of the City, the Underwriter, or
the Developer make any representation as to whether FEMA may revise its Flood Insurance Rate Maps, whether such
revisions may result in homes that are currently outside of the 500-year flood plain from being included in the 500-
year or 100-year flood plain in the future, or whether extreme flooding events may occur more often than assumed in
creating the rate maps.
All of the State, including the City, is subject to extreme weather events that can cause loss of life and damage
to property through strong winds, flooding, heavy rains, extreme heat and freezes, including events similar to the
severe winter storm that the continental United States experienced in February 2021, which resulted in disruptions in
the Electric Reliability Council of Texas power grid and prolonged blackouts throughout the State. It is impossible to
predict whether similar events will occur in the future and the impact they may have on the City, including land within
Improvement Areas #2-3 of the District.
Competition
The housing industry in the Dallas-Fort Worth area is very competitive, and none of the Developer, the City,
the City’s Municipal Advisor, or the Underwriter can give any assurance that the building programs which are planned
throughout the District will be completed in accordance with the Developer’s expectations. The successful
development of the land within the District, the success of the Development, and the sale of residential units therein,
once such homes are built, may be affected by unforeseen changes in general economic conditions, fluctuations in the
real estate market, and other factors beyond the control of the Developer. The competitive position of the Developer
in the sale of single-family residential units is affected by most of the factors discussed in this section, and such
competitive position is directly related to maintenance of market values in Improvement Areas #2-3 of the District.
There can be no assurances that other similar projects will not be developed in the future or that existing
projects will not be upgraded or otherwise become able to compete with the Development. Below is a list of
competitive projects in the area.
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Project Name Developer Proximity
to District
Number of
Units Prices Lot
Sizes/Types
Villages of
Hurricane Creek
Centurion
American
3,500’ 1,851 $400,000+ Townhome,
40’, 50’, 60’,
and 70’
West Crossing Bloomfield Adjacent 1,114 $450,000+ 55’
AnaCapri Megatel Adjacent 1,235 $300,000+ 40’, 50’, multi-
famil
Meadow Vista Coventry
Homes
Adjacent 601 $400,000+ 50’
Source: The Developer
Limited Secondary Market for the Bonds
The Bonds may not constitute a liquid investment, and there is no assurance that a liquid secondary market
will exist for the Bonds in the event an Owner thereof determines to solicit purchasers for the Bonds. Even if a liquid
secondary market exists, there can be no assurance as to the price for which the Bonds may be sold. Such price may
be lower than that paid by the current Owners of the Bonds, depending on the progress of development of Improvement
Areas #2-3 of the District subject to the Assessments, existing real estate and financial market conditions, and other
factors.
No Credit Rating
The City has not applied for or received a rating on the Bonds. Even if a credit rating had been sought for
the Bonds, it is not anticipated that such a rating would have been investment grade. The absence of a rating could
affect the future marketability of the Bonds. There is no assurance that a secondary market for the Bonds will develop
or that holders who desire to sell their Bonds prior to the stated maturity will be able to do so. Occasionally, because
of general market conditions or because of adverse history or economic prospects connected with a particular issue,
secondary market trading in connection with a particular issue is suspended or terminated. Additionally, prices of
issues for which a market is being made will depend upon then generally prevailing circumstances. Such prices could
be substantially different from the original purchase price.
TAX MATTERS
Opinion
On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel
to the City, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions
existing on the date thereof (“Existing Law”), (1) interest on the Bonds for federal income tax purposes will be
excludable from the “gross income” of the holders thereof and (2) the Bonds will not be treated as “specified private
activity bonds” the interest on which would be included as an alternative minimum tax preference item under section
57(a)(5) of the Internal Revenue Code of 1986 (the “Code”). Except as stated above, Bond Counsel to the City will
express no opinion as to any other federal, state, or local tax consequences of the purchase, ownership, or disposition
of the Bonds. See “APPENDIX D – Form of Opinion of Bond Counsel.”
In rendering its opinion, Bond Counsel to the City will rely upon (a) certain information and representations
of the City, including information and representations contained in the City’s federal tax certificate, and (b) covenants
of the City contained in the Bond documents relating to certain matters, including arbitrage and the use of the proceeds
of the Bonds and the property financed or refinanced therewith. Failure by the City to observe the aforementioned
representations or covenants could cause the interest on the Bonds to become taxable retroactively to the date of
issuance.
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The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied
subsequent to the issuance of the Bonds in order for interest on the Bonds to be, and to remain, excludable from gross
income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Bonds
to be included in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel to the
City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City has not been
retained to monitor compliance with these requirements subsequent to the issuance of the Bonds.
Bond Counsel’s opinion represents its legal judgment based upon its review of Existing Law and the reliance
on the aforementioned information, representations and covenants. Bond Counsel’s opinion is not a guarantee of a
result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation
by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation
thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or
disposition of the Bonds.
A ruling was not sought from the Internal Revenue Service by the City with respect to the Bonds or the
property financed or refinanced with proceeds of the Bonds. No assurances can be given as to whether the Internal
Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree
with the opinion of Bond Counsel. If an Internal Revenue Service audit is commenced, under current procedures the
Internal Revenue Service is likely to treat the City as the taxpayer and the Bondholders may have no right to participate
in such procedure. No additional interest will be paid upon any determination of taxability.
Federal Income Tax Accounting Treatment of Original Issue Discount
The initial public offering price to be paid for one or more maturities of the Bonds may be less than the
principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the
accrual period or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between
(i) the “stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to
the public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price
at maturity” means the sum of all payments to be made on the bonds less the amount of all periodic interest payments.
Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period
if it is the initial or final period) and which are made during accrual periods which do not exceed one year.
Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public
offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with
respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount
allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth
below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior
to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue 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 Original Issue Discount Bond was held by such initial owner) is includable in gross income.
Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the
stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before
the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the
accrued amount is added to an initial owner’s basis for such Original Issue Discount Bond for purposes of determining
the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The
amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original
issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b)
the amounts payable as current interest during such accrual period on such Original Issue Discount Bond.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of
Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be
determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds
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should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes
of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds
and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale
or other disposition of such Original Issue Discount Bonds.
Collateral Federal Income Tax Consequences
The following discussion is a summary of certain collateral federal income tax consequences resulting from
the purchase, ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations,
published rulings and court decisions, all of which are subject to change or modification, retroactively.
The following discussion is applicable to investors, other than those who are subject to special provisions of
the Code, such as financial institutions, property and casualty insurance companies, life insurance companies,
individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit,
certain S corporations with Subchapter C earnings and profits, foreign corporations subject to the branch profits tax,
taxpayers qualifying for the health insurance premium assistance credit and taxpayers who may be deemed to have
incurred or continued indebtedness to purchase tax-exempt obligations.
THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING
THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN
TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE
PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING
WHETHER TO PURCHASE THE BONDS.
Interest on the Bonds may be includable in certain corporation’s “adjusted financial statement income”
determined under section 56A of the Code to calculate the alternative minimum tax imposed by section 55 of the
Code.
Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to
disclose interest received or accrued during each taxable year on their returns of federal income taxation.
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition
of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a “market discount” and if the fixed
maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to “market
discount bonds” to the extent such gain does not exceed the accrued market discount of such bonds; although for this
purpose, a de minimis amount of market discount is ignored. A “market discount bond” is one which is acquired by
the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued
at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued original issue discount). The
“accrued market discount” is the amount which bears the same ratio to the market discount as the number of days
during which the holder holds the obligation bears to the number of days between the acquisition date and the final
maturity date.
State, Local And Foreign Taxes
Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership
or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax
advisors regarding the tax consequences unique to investors who are not United States persons.
Information Reporting and Backup Withholding
Subject to certain exceptions, information reports describing interest income, including original issue
discount, with respect to the Bonds will be sent to each registered holder and to the Internal Revenue Service.
Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a recipient
of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification
number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding
tax. Any amounts so withheld would be allowed as a credit against the recipient’s federal income tax. Special rules
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apply to partnerships, estates and trusts, and in certain circumstances, and in respect of foreign investors, certifications
as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof.
Future and Proposed Legislation
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or
state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could
affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions
and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted
cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing
matters.
LEGAL MATTERS
Legal Proceedings
Delivery of the Bonds will be accompanied by (i) the unqualified approving legal opinion of the Attorney
General to the effect that the Bonds are valid and legally binding obligations of the City under the Constitution and
laws of the State, payable from the Trust Estate and, (ii) based upon their examination of a transcript of certified
proceedings relating to the issuance and sale of the Bonds, the legal opinion of Bond Counsel, to a like effect.
McCall, Parkhurst & Horton L.L.P. serves as Bond Counsel to the City. Greenberg Traurig, LLP serves as
Underwriter’s Counsel. The legal fees paid to Bond Counsel and Underwriter’s Counsel are contingent upon the sale
and delivery of the Bonds.
Legal Opinions
The City will furnish the Underwriter a transcript of certain certified proceedings incident to the authorization
and issuance of the Bonds. Such transcript will include a certified copy of the approving opinion of the Attorney
General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State, to the effect
that the Bonds are valid and binding special obligations of the City. The City will also furnish the legal opinion of
Bond Counsel, to the effect that, based upon an examination of such transcript, the Bonds are valid and binding special
obligations of the City under the Constitution and laws of the State. The legal opinion of Bond Counsel will further
state that the Bonds, including principal thereof and interest thereon, are payable from and secured by a pledge of and
lien on the Pledged Revenues. Bond Counsel will also provide a legal opinion to the effect that 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 above under the caption “TAX MATTERS,” including the alternative minimum tax
consequences for certain corporations. A copy of the opinion of Bond Counsel is attached hereto as “APPENDIX D
– FORM OF OPINION OF BOND COUNSEL.”
Except as noted below, Bond Counsel did not take part in the preparation of the Limited Offering
Memorandum, 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 describing the Bonds in the Limited Offering Memorandum under the captions or subcaptions “PLAN
OF FINANCE – The Bonds,” “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE BONDS” (except for the
last paragraph under the subcaption “General”), “ASSESSMENT PROCEDURES” (except for the subcaptions
“Assessment Methodology” and “Assessment Amounts”), “THE DISTRICT,” “TAX MATTERS,” “LEGAL
MATTERS – Legal Proceedings” (first paragraph only), “LEGAL MATTERS – Legal Opinions,” “SUITABILITY
FOR INVESTMENT,” “CONTINUING DISCLOSURE – The City,” “REGISTRATION AND QUALIFICATION
OF BONDS FOR SALE,” “LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN
TEXAS” and APPENDIX B and such firm is of the opinion that the information relating to the Bonds, the Bond
Ordinance, the Assessment Ordinances, and the Indenture contained therein fairly and accurately describes the laws
and legal issues addressed therein and, with respect to the Bonds, such information conforms to the Bond Ordinance,
the Assessment Ordinances and the Indenture.
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The various legal opinions to be delivered concurrently with the delivery of the Bonds express the
professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In
rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional
judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the
rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.
Litigation – The City
At the time of delivery and payment for the Bonds, the City will certify that, except as disclosed herein, there
is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency,
public board or body, pending or overtly threatened against the City affecting the existence of the District, or seeking
to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof, in accordance with
the Indenture, or the collection or application of Assessments securing the Bonds, or in any way contesting or affecting
the validity or enforceability of the Bonds, the Assessment Ordinances, the Indenture, any action of the City
contemplated by any of the said documents, or the collection or application of the Pledged Revenues, or in any way
contesting the completeness or accuracy of this Limited Offering Memorandum or any amendment or supplement
thereto, or contesting the powers of the City or its authority with respect to the Bonds or any action of the City
contemplated by any documents relating to the Bonds.
Litigation – The Developer
At the time of delivery and payment for the Bonds, the Developer will certify that, except as disclosed herein,
there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory
body, public board or body pending, or, to the best knowledge of the Developer, threatened against or affecting the
Developer wherein an unfavorable decision, ruling or finding would have a material adverse effect on the financial
condition or operations of the Developer or its officers or would adversely affect (1) the transactions contemplated by,
or the validity or enforceability of, the Bonds, the Indenture, the Bond Ordinance, the Service and Assessment Plan,
the Development Agreement, or the Bond Purchase Agreement, or otherwise described in this Limited Offering
Memorandum, or (2) the tax-exempt status of interest on the Bonds (individually or in the aggregate, a “Material
Adverse Effect”). Principals of the Developer and their affiliated entities may in the future be parties to pending
and/or threatened litigation related to their commercial and real estate development activities. Such litigation occurs
in the ordinary course of business and is not expected to have a Material Adverse Effect.
SUITABILITY FOR INVESTMENT
Investment in the Bonds poses certain economic risks. See “BONDHOLDERS’ RISKS”. The Bonds are
not rated by any nationally recognized municipal securities rating service. No dealer, broker, salesman or other person
has been authorized by the City or the Underwriter to give any information or make any representations, other than
those contained in this Limited Offering Memorandum, and, if given or made, such other information or
representations must not be relied upon as having been authorized by either of the foregoing. Additional information
will be made available to each prospective investor, including the benefit of a site visit to the City and the opportunity
to ask questions of the Developer, as such prospective investor deems necessary in order to make an informed decision
with respect to the purchase of the Bonds.
ENFORCEABILITY OF REMEDIES
The remedies available to the owners of the Bonds upon an event of default under the Indenture are in many
respects dependent upon judicial actions, which are often subject to discretion and delay. See “BONDHOLDERS’
RISKS – Bondholders’ Remedies and Bankruptcy.” Under existing constitutional and statutory law and judicial
decisions, including the federal bankruptcy code, the remedies specified by the Indenture and the Bonds may not be
readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the
Bonds will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by
limitations imposed by governmental immunity, bankruptcy, reorganization, insolvency or other similar laws affecting
the rights of creditors and enacted before or after such delivery.
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NO RATING
No application for a rating on the Bonds has been made to any rating agency, nor is there any reason to
believe that the City would have been successful in obtaining an investment grade rating for the Bonds had application
been made.
CONTINUING DISCLOSURE
The City
Pursuant to Rule 15c2-12 of the United States Securities and Exchange Commission (the “Rule”), the City,
the Administrator, and Regions Bank (in such capacity, the “Dissemination Agent”) will enter into a Continuing
Disclosure Agreement of Issuer (the “Disclosure Agreement of Issuer”) for the benefit of the Owners of the Bonds
(including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure
Agreement of Issuer, certain financial information and operating data relating to the City (collectively, the “City
Reports”). The specific nature of the information to be contained in the City Reports is set forth in “APPENDIX E-1
– Form of Disclosure Agreement of Issuer.” Under certain circumstances, the failure of the City to comply with its
obligations under the Disclosure Agreement of Issuer constitutes an event of default thereunder. Such a default will
not constitute an event of default under the Indenture, but such event of default under the Disclosure Agreement of
Issuer would allow the Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an action
for specific performance.
The City has agreed to update information and to provide notices of certain specified events only as provided
in the Disclosure Agreement of Issuer. 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 in this Limited Offering Memorandum, except as provided in the Disclosure
Agreement of Issuer. The City makes no representation or warranty concerning such information or concerning its
usefulness to a decision to invest in or sell the 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 the Disclosure Agreement of Issuer or from any
statement made pursuant to the Disclosure Agreement of Issuer.
The City’s Compliance with Prior Undertakings
The City believes it has substantially complied in all material respects with its continuing disclosure
undertakings pursuant to the Rule during the last 5 years.
The Developer
The Developer, the Administrator, and the Dissemination Agent have entered into a Continuing Disclosure
Agreement of Developer (the “Disclosure Agreement of Developer”) for the benefit of the Owners of the Bonds
(including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure
Agreement of Developer, certain information regarding the Development and the Improvement Areas #2-3 Projects
(collectively, the “Developer Reports”). The specific nature of the information to be contained in the Developer
Reports is set forth in “APPENDIX E-2 – Form of Disclosure Agreement of Developer.” Under certain circumstances,
the failure of the Developer or the Administrator to comply with its obligations under the Disclosure Agreement of
Developer constitutes an event of default thereunder. Such a default will not constitute an event of default under the
Indenture, but such event of default under the Disclosure Agreement of Developer would allow the Owners of the
Bonds (including owners of beneficial interests in the Bonds) to bring an action for specific performance. The
Disclosure Agreement of Developer is a voluntary agreement made for the benefit of the holders of the Bonds and is
not entered into pursuant to the Rule.
The Developer has agreed to provide (i) certain updated information to the Administrator, which consultant
will prepare and provide such updated information in report form and (ii) notices of certain specified events, only as
provided in the Disclosure Agreement of Developer. The Developer 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 in this Limited Offering Memorandum, except as provided in the
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Disclosure Agreement of Developer. The Developer makes no representation or warranty concerning such
information or concerning its usefulness to a decision to invest in or sell the Bonds at any future date. The Developer
disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of the Disclosure
Agreement of Developer or from any statement made pursuant to the Disclosure Agreement of Developer.
The Developer’s Compliance with Prior Undertakings
During the last five years, the Developer has complied in all material respects with the continuing disclosure
agreement made by it in accordance with the Rule.
UNDERWRITING
FMSbonds, Inc. (the “Underwriter”) has agreed to purchase the Bonds from the City at a purchase price of $
(the par amount of the Bonds, less an original issue discount of $_______ and less an underwriting discount
of $ ). The Underwriter’s obligations are subject to certain conditions precedent and if obligated to purchase any
of the Bonds the Underwriter will be obligated to purchase all of the Bonds. The Bonds may be offered and sold by
the Underwriter at prices lower than the initial offering prices stated on the inside cover page hereof, and such initial
offering prices may be changed from time to time by the Underwriter.
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 other 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 INVESTMENT AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
The PID Act and Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government
Code, as amended) provide that the Bonds are negotiable instruments and investment securities governed by Chapter
8, Texas Business and Commerce Code, as amended, and are legal and authorized investments for insurance
companies, fiduciaries, trustees, or for the sinking funds of municipalities or other political subdivisions or public
agencies of the State. With respect to investment in the Bonds by municipalities or other political subdivisions or
public agencies of the State, the PFIA requires that the Bonds be assigned a rating of at least “A” or its equivalent as
to investment quality by a national rating agency. See “NO RATING” above. In addition, the PID Act and various
provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal
investments for state banks, savings banks, trust companies with capital of one million dollars or more, and savings
and loan associations. The Bonds are eligible to secure deposits to the extent of their market value. 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. No representation is made that the Bonds will be acceptable to public entities to secure
their deposits or acceptable to such institutions for investment purposes.
The City made no investigation of other laws, rules, regulations or investment criteria which might apply to
such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit
the authority of such institutions or entities to purchase or invest in the Bonds for such purposes.
INVESTMENTS
The City invests its funds in investments authorized by Texas law in accordance with investment policies
approved by the City Council. Both Texas law and the City’s investment policies are subject to change.
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Under Texas law, the City is authorized to invest in (1) obligations of the United States or its agencies and
instrumentalities, including letters of credit; (2) direct obligations of the State 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 and interest of which are unconditionally guaranteed or insured by or backed by the full faith and credit
of, the State or the United States or their respective agencies and instrumentalities, including obligations that are fully
guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United
States; (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) bonds issued,
assumed or guaranteed by the State of Israel; (7) interest-bearing banking deposits that are guaranteed or insured by
the Federal Deposit Insurance Corporation or its successor or the National Credit Union Share Insurance Fund or its
successor, (8) certificates of deposit and share certificates (i) issued by or through an institution that either has its main
office or a branch office in the State, and are guaranteed or insured by the Federal Deposit Insurance Corporation or
the National Credit Union Insurance Fund, or are secured as to principal by obligations described in the clauses (1)
through (6) or in any other manner and amount provided by law for City deposits, or (ii) where (a) the funds are
invested by the City through (I) a broker that has its main office or a branch office in the State and is selected from a
list adopted by the City as required by law or (II) a depository institution that has its main office or a branch office in
the State that is selected by the City; (b) the broker or the depository institution selected by the City arranges for the
deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located,
for the account of the City; (c) the full amount of the principal and accrued interest of each of the certificates of deposit
is insured by the United States or an instrumentality of the United States, and (d) the City appoints the depository
institution selected under (a) above, a custodian as described by Section 2257.041(d) of the Texas Government Code,
or a clearing broker-dealer registered with the Securities and Exchange Commission and operating pursuant to
Securities and Exchange Commission Rule 15c3-3 (17 C.F.R. Section 240.15c3-3) as custodian for the City with
respect to the certificates of deposit; (9) fully collateralized repurchase agreements that have a defined termination
date, are fully secured by a combination of cash and obligations described in clause (1) which are pledged to the City,
held in the City’s name, and deposited at the time the investment is made with the City or with a third party selected
and approved by the City and are placed through a primary government securities dealer, as defined by the Federal
Reserve, or a financial institution doing business in the State; (10) securities lending programs if (i) the securities
loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time
and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6)
above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally
recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in
clauses (1) through (6) above, clauses (12) through (14) below, or an authorized investment pool; (ii) securities held
as collateral under a loan are pledged to the City, held in the City’s name and deposited at the time the investment is
made with the City or a third party designated by the City; (iii) a loan made under the program is placed through either
a primary government securities dealer or a financial institution doing business in the State; and (iv) the agreement to
lend securities has a term of one year or less, (11) certain bankers’ acceptances with the remaining term of 270 days
or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent
by at least one nationally recognized credit rating agency, (12) commercial paper with a stated maturity of 270 days
or less that is rated at least A-1 or 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, (13) no-load money market mutual funds registered with and regulated by the Securities
and Exchange Commission that comply with federal Securities and Exchange Commission Rule 2a-7, and (14) no-
load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity
of less than two years, and have a duration of one year or more and are invested exclusively in obligations described
in this paragraph or have a duration of less than one year and the investment portfolio is limited to investment grade
securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment
contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United
States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under
such contract, other than the prohibited obligations described in the next succeeding paragraph.
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 “AAA-m” or an equivalent by at least
one nationally recognized rating service. The City may also contract with an investment management firm registered
under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to
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provide for the investment and management of its public funds or other funds under its control for a term up to two
years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract,
the City must do so by order, ordinance, or resolution. 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 determined by an index that adjusts opposite to the changes in a market index.
Political subdivisions such as the City are authorized to implement securities lending programs if (i) the
securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at
any time and a loan made under the program is either secured by (a) obligations that are described in clauses
(1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national
bank that is continuously rated by a nationally recognized investment rating firm not less than “A” or its equivalent,
or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first
paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are
pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment
is made with the City or a third party designated by the City; (iii) a loan made under the program is placed through
either a primary government securities dealer or a financial institution doing business in the State; and (iv) the
agreement to lend securities has a term of one year or less.
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 includes a list of authorized investments for City funds, the
maximum allowable stated maturity of any individual investment, the maximum average dollar-weighted maturity
allowed for pooled fund groups, methods to monitor the market price of investments acquired with public funds, a
requirement for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus
payment basis, and procedures to monitor rating changes in investments acquired with public funds and the liquidation
of such investments consistent with the PFIA. All City funds must be invested consistent with a formally adopted
“Investment Strategy Statement” that specifically addresses each fund’s investment. Each Investment Strategy
Statement will describe its objectives concerning (1) suitability of investment type, (2) preservation and safety of
principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.
Under Texas law, 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: (1) the
investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning
market value, the ending market value and the fully accrued interest for the reporting period of each pooled fund
group, (4) the book value and market value of each separately listed asset and fund type invested at the beginning and
end of the reporting period by the type of asset and fund type invested, (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.
Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies;
(2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment
strategies and records any changes made to either its investment policy or investment strategy in the respective rule,
order, ordinance or resolution; (3) require any investment officers’ with personal business relationships or relatives
with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics
Commission and the City Council; (4) 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 investment transactions conducted between the City and the business organization that
are not authorized by the City’s investment policy (except to the extent that this authorization is dependent on an
analysis of the makeup of the City’s entire portfolio or requires an interpretation of subjective investment standards),
and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management
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controls on investments and adherence to the City’s investment policy; (6) provide specific investment training for
the officers of the City; (7) 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; (8) restrict the
investment in no-load mutual funds in the aggregate 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; (9) require local government investment
pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements;
and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in
investment transactions with the City.
INFORMATION RELATING TO THE TRUSTEE
The City has appointed Regions Bank, an Alabama state banking corporation, to serve as Trustee. The Trustee
is to carry out those duties assignable to it under the Indenture. Except for the contents of this section, the Trustee has
not reviewed or participated in the preparation of this Limited Offering Memorandum and assumes no responsibility
for the contents, accuracy, fairness, or completeness of the information set forth in this Limited Offering Memorandum
or for the recitals contained in the Indenture or the Bonds, or for the validity, sufficiency, or legal effect of any of such
documents.
Furthermore, the Trustee has no oversight responsibility, and is not accountable, for the use or application by
the City of any of the Bonds authenticated or delivered pursuant to the Indenture or for the use or application of the
proceeds of such Bonds by the City. The Trustee has not evaluated the risks, benefits, or propriety of any investment
in the Bonds and makes no representation, and has reached no conclusions, regarding the value or condition of any
assets or revenues pledged or assigned as security for the Bonds, the technical or financial feasibility of the project,
or the investment quality of the Bonds, about all of which the Trustee expresses no opinion and expressly disclaims
the expertise to evaluate.
Additional information about the Trustee may be found at its website at www.regions.com. Neither the
information on the Trustee’s website, nor any links from that website, is a part of this Limited Offering Memorandum,
nor should any such information be relied upon to make investment decisions regarding the Bonds.
SOURCES OF INFORMATION
General
The information contained in this Limited Offering Memorandum has been obtained primarily from the
City’s records, the Developer and its representatives and other sources believed to be reliable. In accordance with its
responsibilities under the federal securities law, the Underwriter has reviewed the information in this Limited Offering
Memorandum in accordance with, and as part of, its responsibilities to investors under the federal securities laws as
applied to the facts and circumstances of the transaction, but the Underwriter does not guarantee the accuracy or
completeness of such information. The information and expressions of opinion herein are subject to change without
notice, and neither the delivery of this Limited Offering Memorandum or any sale hereunder will create any
implication that there has been no change in the financial condition or operations of the City or the Developer described
herein since the date hereof. This Limited Offering Memorandum contains, in part, estimates and matters of opinion
that are not intended as statements of fact, and no representation or warranty is made as to the correctness of such
estimates and opinions or that they will be realized. The summaries of the statutes, resolutions, ordinances, indentures
and appraisals and other related reports set forth herein are included subject to all of the provisions of such documents.
These summaries do not purport to be complete statements of such provisions and reference is made to such documents
for further information.
Source of Certain Information
The information contained in this Limited Offering Memorandum relating to the description of the
Improvement Areas #2-3 Projects, the Development, and the Developer generally and, in particular, the maps included
herein, ant the information included in the sections captioned “PLAN OF FINANCE – Overview,” “– Development
Plan and Status of Development,” and “– Developer as Homebuilder,” “THE IMPROVEMENT AREAS #2-3
PROJECTS,” “THE DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to
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the Developer, the Improvement Areas #2-3 Projects, and the Development), “LEGAL MATTERS – Litigation – The
Developer,” “SOURCES OF INFORMATION – The Developer,” APPENDIX F, APPENDIX G, and APPENDIX I
have been provided by the Developer.
Experts
The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has been
provided by P3Works, LLC and has been included in reliance upon the authority of such firm as experts in the field
of development planning and finance.
The information regarding the Appraisal in this Limited Offering Memorandum has been provided by the
Appraiser, and has been included in reliance upon the authority of such firm as experts in the field of the appraisal of
real property.
Updating of Limited Offering Memorandum
If, subsequent to the date of the Limited Offering Memorandum, the City learns, through the ordinary course
of business and without undertaking any investigation or examination for such purposes, or is notified by the
Underwriter, of any adverse event which causes the Limited Offering Memorandum to be materially misleading, and
unless the Underwriter elects to terminate its obligation to purchase the Bonds, the City will promptly prepare and
supply to the Underwriter an appropriate amendment or supplement to the Limited Offering Memorandum satisfactory
to the Underwriter; provided, however, that the obligation of the City to so amend or supplement the Limited Offering
Memorandum will terminate when the City delivers the Bonds to the Underwriter, unless the Underwriter notifies the
City on or before such date that less than all of the Bonds have been sold to ultimate customers; in which case the
City’s obligations hereunder will extend for an additional period of time (but not more than 90 days after the date the
City delivers the Bonds) until all of the Bonds have been sold to ultimate customers.
FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference in this Limited Offering Memorandum constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of
1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933. Such statements are generally identifiable by the terminology used such as “plan,” “expect,”
“estimate,” “project,” “anticipate,” “budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
DESCRIBED HEREIN TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE
OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE
CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING
STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR
CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED
UNDER “CONTINUING DISCLOSURE” HEREIN.
AUTHORIZATION AND APPROVAL
The City Council has approved by resolution this Preliminary Limited Offering Memorandum and the City
Council has authorized this Preliminary Limited Offering Memorandum to be used by the Underwriter in connection
with the marketing and sale of the Bonds. In the Bond Ordinance, the City Council will approve the form and content
of the final Limited Offering Memorandum.
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APPENDIX A
GENERAL INFORMATION REGARDING THE CITY AND SURROUNDING AREAS
The following information has been derived from various sources, including the U.S. Census and the
Municipal Advisory Council of Texas. While such sources are believed to be reliable, no representation is made as to
the accuracy thereof.
Location and Population
The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the
City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road
455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety
(police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general administrative
services. The 2020 Census population for the City was 16,896, while the current estimated population is 23,558.
Major Employers
The major employers in the City are set forth in the table below.
Emplo e Product or Service Emplo ees
Anna ISD Education 856
Walmar Retail 457
Cit of Anna Governmen 191
Pate Rehab Medical 168
Brookshire’s Grocer Store 97
Loves Travel Shop Retail 56
McDonalds Restauran 49
Hurricane Creek Countr Club Countr Club 48
Bronco Manufacturin Machine Shop 37
Tri-Count Ve Veterinar Clinic 12
Source: City of Anna 2024 Comprehensive Annual Financial Report
Historical Employment in Collin County
Average Annual
2025(1) 2024 2023 2022 2021
Civilian Labor Force 690,212 680,301 644,705 625,800 600,186
Total Emplo e 660,197 654,384 622,134 605,672 574,037
Total Unemplo e 30,015 25,917 22,571 20,128 26,149
Unemplo ment Rate 4.3% 3.5% 3.5% 3.2% 4.4%
_____________
Source: Texas Workforce Commission.
(1) Data through August 2025.
Surrounding Economic Activity
The major employers of municipalities surrounding the City are set forth in the table below.
Source: Municpal Advisory Council of Texas
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APPENDIX B
FORM OF INDENTURE
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APPENDIX C
SERVICE AND ASSESSMENT PLAN
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APPENDIX D
FORM OF OPINION OF BOND COUNSEL
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APPENDIX E-1
FORM OF DISCLOSURE AGREEMENT OF ISSUER
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APPENDIX E-2
FORM OF DISCLOSURE AGREEMENT OF DEVELOPER
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APPENDIX F
DEVELOPMENT AGREEMENT
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APPENDIX G
REIMBURSEMENT AGREEMENT
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APPENDIX H
APPRAISAL
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APPENDIX I
PHOTOGRAPHS OF DEVELOPMENT IN THE DISTRICT
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