HomeMy WebLinkAboutRes 2026-02-1886 Approving a Preliminary Limited Offering Memorandum for the Sale of Bonds (Sherley Farms )EXHIBIT A
PRELIMINARY LIMITED OFFERING MEMORANDUM
Draft 01.20.2026
NEW ISSUE NOT RATED
PRELIMINARY LIMITED OFFERING MEMORANDUM DATED FEBRUARY 11, 2026
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 federal income tax purposes under statutes,
regulations, published rulings, and court decisions existing on the date hereof, subject to the matters described under “TAX MATTERS” herein,
including the alternative minimum tax on certain corporations.
$33,950,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026
(SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)
Sale Date: February 24, 2026
Interest to Accrue from Delivery Date (defined below) Due: September 15, as shown on the inside cover
The City of Anna, Texas, Special Assessment Revenue Bonds, Series 2026 (Sherley Farms Public Improvement District Improvement Area #1
Project) (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 September 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, an Alabama state banking corporation, 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”), and an
Indenture of Trust 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 for the purposes of (i) paying a portion of the costs of the Improvement Area #1 Improvements, (ii) paying a
portion of the interest on the Bonds during and after the period of acquisition and construction of the Improvement Area #1 Improvements, (iii) funding a
reserve fund for the payment of principal of and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and
(v) paying the costs of issuance of the Bonds. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS” and “APPENDIX B – Form of Indenture.”
The Bonds, when issued and delivered, will constitute valid and binding special, limited obligations of the City secured by a first lien on, security
interest in, and pledge of the Trust Estate, consisting primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1
Assessed Property in accordance with the Service and Assessment Plan, all to the extent and upon the conditions described in the Indenture. 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 and are not suitable for all investors. See “BONDHOLDERS’ RISKS.” 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, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM A FIRST LIEN ON, SECURITY
INTEREST IN, AND PLEDGE OF 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 TRUST ESTATE 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
ASSETS 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 ASSETS OF THE CITY OTHER THAN 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, Orrick, Herrington & Sutcliffe LLP, and for the Developer by its counsel, Greenberg Traurig, LLP. It is expected that the
Bonds will be delivered in book-entry form through the facilities of DTC on or about March 10, 2026 (the “Delivery Date”).
FMSbonds, Inc.
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* Preliminary, subject to change.
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIP NUMBERS
CUSIP Prefix: (a)
$33,950,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026
(SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)
$ % 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)
$ % 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.
* Preliminary, subject to change.
i
CITY OF ANNA, TEXAS
CITY COUNCIL
ame
Place
Term Expires
(Ma )
Pete Cain Ma o 2027
Kevin Toten Place 1, Ma or Pro Te 2027
athan Br an Place 2 2028
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 FINANCE DIRECTOR CITY SECRETARY
Marc Marchan Terri Dob Carrie Lan
ASSESSMENT CONSULTANT
P3Works, LLC
MUNICIPAL ADVISOR TO THE CITY
Hilltop Securities Inc.
BOND COUNSEL
McCall, Parkhurst & Horton L.L.P.
UNDERWRITER’S COUNSEL
Orrick, Herrington & Sutcliffe LLP
For additional information regarding the City, please contact:
Marc Marchan Jim Sabonis Andre A ala
Actin Cit Mana e Hilltop Securities Inc. Hilltop Securities Inc.
Cit of Anna, Texas 717 N. Harwood Street 717 N. Harwood Street
120 W. 7th Stree Suite 3400 Suite 3400
Anna, Texas 75409 Dallas, Texas 75201 Dallas, Texas 75201
(972) 924-3325 (214) 953-4000 (214) 953-4000
mmarchan annatexas.ov Jim.Sabonis hilltopsecurities.co Andre.A ala hilltopsecurities.co
ii
REGIONAL LOCATION MAP OF THE DISTRICT
iii
AREA LOCATION MAP OF THE DISTRICT
iv
MAP SHOWING BOUNDARIES OF THE DISTRICT, IMPROVEMENT AREAS (PHASES), AND SHERLEY RETAINED TRACT *
* The numbered areas shown above reflect the expected improvement areas on the Tellus Tract (defined herein). Areas shown as “Land Owned by Sherley Partners, Ltd.” reflect
the expected boundaries of the Sherley Retained Tract (defined herein). See “PLAN OF FINANCE – Overview.”
v
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CONCEPT PLAN *
* Areas shown above as “Land Owned by Sherley Partners, Ltd.” reflect the expected boundaries of the Sherley Retained Tract (defined herein). The balance of the outlined area
reflects the expected boundaries of the Tellus Tract (defined herein). See “PLAN OF FINANCE – Overview.”
vii
USE OF LIMITED OFFERING MEMORANDUM
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
viii
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 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 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.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
ix
TABLE OF CONTENTS
INTRODUCTION .................................................... 1
PLAN OF FINANCE ............................................... 2
Overview ........................................................... 2
Development Plan ............................................. 2
Lot Purchase and Sale Agreements ................... 4
The Bonds ......................................................... 4
LIMITATIONS APPLICABLE TO INITIAL
PURCHASERS ........................................................ 4
DESCRIPTION OF THE BONDS ........................... 5
General Description ........................................... 5
Redemption Provisions ...................................... 6
BOOK-ENTRY ONLY SYSTEM ........................... 8
SECURITY FOR THE BONDS ............................. 10
General ............................................................ 10
Pledged Revenues ............................................ 11
Collection and Deposit of Improvement
Area #1 Assessments ................................ 12
Amount of Assessments May be
Reduced by TIRZ No. 9 Annual
Credit Amount .......................................... 13
Unconditional Levy of Improvement
Area #1 Assessments ................................ 14
Perfected Security Interest ............................... 15
Pledged Revenue Fund .................................... 15
Bond Fund ....................................................... 16
Project Fund .................................................... 17
Reserve Fund (Reserve Account and
Delinquency and Prepayment
Reserve Account) ..................................... 18
Administrative Fund ........................................ 19
Defeasance....................................................... 19
Events of Default ............................................. 20
Remedies in Event of Default .......................... 21
Restriction on Owner’s Actions ...................... 21
Application of Revenues and Other
Moneys After Event of Default ................ 22
Investment or Deposit of Funds ....................... 23
Against Encumbrances .................................... 23
Other Obligations or Other Liens;
Refunding Bonds ...................................... 23
SOURCES AND USES OF FUNDS* .................... 24
DEBT SERVICE REQUIREMENTS* ................... 25
OVERLAPPING TAXES AND DEBT .................. 26
Overlapping Taxes ........................................ 26
Overlapping Debt .......................................... 27
Agricultural Use .............................................. 27
Homeowners’ Association Dues ..................... 27
ASSESSMENT PROCEDURES ............................ 28
General ............................................................ 28
Assessment Methodology ................................ 28
Collection and Enforcement of
Assessment Amounts ............................... 29
Assessment Amounts....................................... 31
Prepayment of Assessments ............................ 33
Priority of Lien ................................................ 34
Foreclosure Proceedings .................................. 34
THE CITY .............................................................. 35
Background ..................................................... 35
City Government ............................................. 35
Water and Wastewater ..................................... 35
THE DISTRICT ..................................................... 36
General ............................................................ 36
Powers and Authority ...................................... 36
THE IMPROVEMENT AREA #1
IMPROVEMENTS ................................................. 37
General ............................................................ 37
Ownership and Maintenance of
Improvement Area #1
Improvements ........................................... 38
THE IMPROVEMENT AREA #1 MAJOR
IMPROVEMENTS ................................................. 38
Ownership and Maintenance of
Improvement Area #1 Major
Improvements ........................................... 38
THE DEVELOPMENT .......................................... 39
Development Plan ........................................... 39
Payment of Costs of the Improvement
Area #1 Major Improvements .................. 39
Lot Purchase and Sale Agreements ................. 39
Expected Buildout, Absorption, and
Home Prices in the Tellus Tract ............... 43
Amenities and Private Improvements .............. 45
Future Improvement Area Bonds .................... 46
Development Agreement ................................. 46
CFA Agreement .............................................. 46
Zoning/Permitting ........................................... 47
Education ......................................................... 47
Environmental ................................................. 47
Existing Mineral Rights and Other
Third-Party Property Rights ..................... 47
Flood Zone ...................................................... 48
Utilities ............................................................ 48
THE DEVELOPER ................................................ 48
General ............................................................ 48
Description of the Developer ........................... 48
Description of Past and Current Projects
of the Developer ....................................... 49
Executive Biographies of Tellus Group .......... 49
History and Financing of the District .............. 53
THE ADMINISTRATOR ...................................... 53
APPRAISAL .......................................................... 54
BONDHOLDERS’ RISKS ..................................... 54
Deemed Representations and
Acknowledgment by Initial
Purchasers ................................................ 55
General Factors relating to Payment of
the Bonds .................................................. 55
Assessment Limitations ................................... 56
x
Direct and Overlapping Indebtedness,
Assessments, and Taxes ........................... 57
Depletion of Accounts of the Reserve
Fund; No Prefunding of
Delinquency and Prepayment
Reserve Account ...................................... 57
Lien Foreclosure and Bankruptcy .................... 57
Bondholders’ Remedies and
Bankruptcy ............................................... 57
Judicial Foreclosures ....................................... 59
No Acceleration ............................................... 59
Bankruptcy Limitation to Bondholders’
Rights ....................................................... 59
State Law Requiring Notice of
Assessment; Failure of Developer
and Homebuilders to Deliver
Required Notice Pursuant to Texas
Property Code ........................................... 60
Potential Future Changes in State Law
Regarding Public Improvement
Districts .................................................... 60
Limited Secondary Market for the
Bonds........................................................ 60
No Credit Rating ............................................. 60
Adverse Developments Affecting the
Financial Services Industry ...................... 61
General Risks of Real Estate Investment
and Development ...................................... 61
Risks Related to the Current Residential
Real Estate Market ................................... 62
Risks Related to Recent Increase in
Costs of Building Materials and
Labor Shortages ........................................ 62
Completion of Homes ...................................... 62
Absorption Rate ............................................... 63
Competition ..................................................... 63
Hazardous Substances ..................................... 63
Regulation ....................................................... 64
Availability of Utilities .................................... 64
Flood Plains ..................................................... 64
Risk from Weather Events ............................... 64
Exercise of Third-Party Rights ........................ 65
Tax-Exempt Status of the Bonds ..................... 65
Management and Ownership ........................... 65
Dependence Upon Developer .......................... 66
Use of Appraisal .............................................. 66
Agricultural Use Valuation and
Redemption Rights ................................... 66
TIRZ Annual Credit Amount and
Marketing of the Development ................. 67
TAX MATTERS .................................................... 67
Opinion ............................................................ 67
Federal Income Tax Accounting
Treatment of Original Issue
Discount ................................................... 68
Collateral Federal Income Tax
Consequences ........................................... 69
State, Local And Foreign Taxes ...................... 69
Information Reporting and Backup
Withholding .............................................. 70
Future and Proposed Legislation ..................... 70
LEGAL MATTERS ............................................... 70
Legal Proceedings ........................................... 70
Legal Opinions ................................................ 70
Litigation – The City ....................................... 71
Litigation – The Developer ............................. 71
ENFORCEABILITY OF REMEDIES ................... 71
NO RATING .......................................................... 72
CONTINUING DISCLOSURE .............................. 72
The City ........................................................... 72
The City’s Compliance with Prior
Undertakings ............................................ 72
The Developer ................................................. 72
The Developer’s Compliance with Prior
Undertakings ............................................ 73
UNDERWRITING ................................................. 73
REGISTRATION AND QUALIFICATION OF
BONDS FOR SALE ............................................... 73
LEGAL INVESTMENT AND ELIGIBILITY TO
SECURE PUBLIC FUNDS IN TEXAS ................. 73
INVESTMENTS .................................................... 73
INFORMATION RELATING TO THE TRUSTEE
................................................................................ 76
SOURCES OF INFORMATION ........................... 76
General ............................................................ 76
Source of Certain Information ......................... 77
Experts ............................................................. 77
Updating of Limited Offering
Memorandum ........................................... 77
FORWARD-LOOKING STATEMENTS .............. 77
AUTHORIZATION AND APPROVAL ................ 78
APPENDIX A General Information Regarding the
City and Surrounding Areas
APPENDIX B Form of Indenture
APPENDIX C Form of 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 Form of CFA Agreement
APPENDIX H Appraisal
THIS PAGE IS LEFT BLANK INTENTIONALLY.
1
PRELIMINARY LIMITED OFFERING MEMORANDUM
$33,950,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2026
(SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT
IMPROVEMENT AREA #1 PROJECT)
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 $33,950,000* aggregate principal amount of Special Assessment Revenue Bonds, Series 2026
(Sherley Farms Public Improvement District Improvement Area #1 Project) (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” AND “BONDHOLDERS’ RISKS.”
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”), between the City and Regions Bank, an Alabama state
banking corporation with offices in Houston, Texas, as trustee (the “Trustee”).
Reference is made to the Indenture for a full statement of the authority for, and the terms and provisions of,
the Bonds. 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 first lien on, security interest in, and pledge of the Trust Estate, consisting
primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1 Assessed
Property pursuant to the Assessment Ordinance, all to the extent and upon the conditions described in the Indenture.
Set forth herein are brief descriptions of the City, the District, Tellus Texas (defined herein), Sherley
Partners (defined herein), the Administrator, the Assessment Ordinance, the Bond Ordinance, the Service and
Assessment Plan, the Development Agreement (defined herein), the CFA Agreement, 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 form of 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.
* Preliminary, subject to change.
2
PLAN OF FINANCE
Overview
Following receipt of a petition from the Developer in accordance with the PID Act, the City created the
District on March 25, 2025. The District is composed of approximately 1,123.592 acres within the corporate
boundaries of the City. It is located approximately 5.5 miles east of U.S. Highway 75, generally between Houston
Street to the north and East White Street to the south. Maps of the District and the surrounding region are included
on pages iii – v.
Development Plan
The District is an approximately 1,123-acre master-planned community expected to be developed in part by
Tellus Texas III, LLC, a Texas limited liability company (“Tellus Texas” or the “Developer”), and in part by
Sherley Partners, Ltd., a Texas limited partnership (“Sherley Partners”). Tellus Texas, as assignee of Tellus
Acquisitions LLC, and Sherley Partners are parties to that certain Purchase and Sale Agreement Sherley Farms –
Collin County, Texas (the “Sherley PSA”), pursuant to which Tellus Texas has agreed to purchase approximately
978 acres of land within the District (the “Tellus Tract”) from Sherley Partners in phases as development progresses.
Sherley Partners expects to retain approximately 150 acres in the District (as shown in dark gray in the map on page
iv, the “Sherley Retained Tract”). In December 2024, Tellus Texas purchased approximately 200 of such acres,
which include approximately 135 acres constituting Improvement Area #1 of the District (as identified as on the
map on page iv) and approximately 65 acres constituting of The Farm (as identified as on the Concept Plan on page
v), for a purchase price of $10,733,053, using cash on hand. Tellus Texas expects to close on an additional 50 acres
pursuant to the Sherley PSA in or about March 2026, which takedown is expected to include approximately 3 acres
to be conveyed to the City for use as a fire station and water tower site or sites, 0.2 acres to be conveyed to the City
for a sewer pump station, and approximately 46.8 acres for phase 2 of the Development (defined below).
The Developer expects to develop the single-family residential portion of the Tellus Tract in six phases as
shown in the map on page iv (each, an “Improvement Area”) to include a total of approximately 2,578 single-family
residential lots, as well as the North Amenity Center (as identified in the Concept Plan on page v) with a swimming
pool, playground, and related facilities, the South Amenity Center (as identified in the Concept Plan on page v) with
a building or shaded structure, playground, and related facilities, and other amenities throughout the District
(collectively, the “Community Amenities”). The Developer will also develop The Farm as a working farm-style
amenity with operational farming facilities and an adjacent programmed site adjacent to the farm (together with the
Community Amenities, the “Amenities”). See “THE DEVELOPMENT – Amenities and Private Improvements”
and “– Development Agreement.”
It is expected that Sherley Partners will develop the Sherley Retained Tract as approximately 7 single-
family residential lots, 55 cottage home lots, 400 multifamily units, and 260,000 square feet of commercial space
based on the uses entitled for the Sherley Retained Tract in the PDD Ordinance (defined herein). The Tellus Tract
and the Sherley Retained Tract together constitute the “Development.” See the map and Concept Plan for the
District on pages iv-v and “THE DEVELOPMENT – Zoning/Permitting.”
Improvement Area #1 is the first area of the District to be developed. Improvement Area #1 is expected to
include 418 single-family residential lots, as follows:
Lot Size Improvement Area #1
45’ 76
50’ 166
60’ 143
70’ 33
Total 418
The Developer began development of Improvement Area #1 in November 2025 and expects it to be
completed in the fourth quarter of 2026. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE
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DEVELOPMENT – Expected Build-out, Absorption, and Home Prices in the Tellus Tract,” and “APPENDIX C –
Form of Service and Assessment Plan.”
A portion of the proceeds of the Bonds will be used to reimburse the Developer for the Actual Costs of the
Improvement Area #1 Improvements, consisting of public improvements that benefit only the Improvement Area #1
Assessed Property. The total cost of the Improvement Area #1 Improvements is expected to be approximately
$27,578,651*. Proceeds of the bonds in the approximate amount of $27,473,505* will be used to pay the Developer
for a portion of such costs. The remaining costs in the approximate amount of $105,146* will be paid by the
Developer, without reimbursement by the City. In addition to costs to construct the Improvement Area #1
Improvements, the Developer is responsible for paying, without reimbursement by the City, for the Private
Improvements (defined herein) in the approximate amount of $6,939,433, and the cost of the Amenities (defined
herein). The cost of the Amenities to be constructed concurrently with the Improvement Area #1 Improvements (as
further described herein, the “Improvement Area #1 Amenities”) is expected to be approximately $8,350,000. As of
December 31, 2025, the Developer has spent approximately $1,457,752 on costs of the construction of the
Improvement Area #1 Improvements, approximately $658,252 on costs of construction of the Private
Improvements, and approximately $ on costs of construction of the Improvement Area #1
Amenities, using cash on hand. See “THE DEVELOPMENT – Private Improvements and Amenities.” See
“SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE
DEVELOPMENT – Amenities and Private Improvements,” “THE DEVELOPER – History and Financing of the
District,” and “APPENDIX C – Form of Service and Assessment Plan.”
The City and the Developer expect to enter into the CFA Agreement, which provides, in part, for the use of
proceeds from the issuance and sale of the Bonds and the payment of costs of the Improvement Area #1
Improvements within the District, including payment to the Developer for funds expended by the Developer and
used to pay costs of Improvement Area #1 Improvements. See “APPENDIX G – Form of CFA Agreement.”
The Developer is expected to construct certain road, water, and sanitary sewer improvements that will
benefit the entire District (the “Major Improvements”). The Developer will construct a portion of the major
Improvements (such portion, the “Improvement Area #1 Major Improvements”) concurrently with the development
of the Improvement Area #1 Improvements. The costs of the Improvement Area #1 Major Improvements are
expected to be approximately $11,396,968. The costs of the Improvement Area #1 Major Improvements are
expected to be reimbursed to the Developer pursuant to a grant (the “Eligible Infrastructure Grant”) funded from
impact fees collected in Improvement Area #1 of the District. As of December 31, 2025, the Developer has spent
approximately $262,732 on costs of construction of the Improvement Area #1 Major Improvements using cash on
hand. See “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” “THE DEVELOPMENT – Payment
of Costs of the Improvement Area #1 Major Improvements,” and “– Development Agreement.”
On December 9, 2025, pursuant to the Tax Increment Financing Act, Chapter 311, Texas Tax Code, as
amended (the “TIRZ Act”), the City adopted the TIRZ No. 9 Ordinance creating TIRZ No. 9 (both defined in the
Service and Assessment Plan) with boundaries coterminous with those of the District and authorizing the use of ad
valorem tax increment attributable to the new development within TIRZ No. 9/the District for project costs as
defined in the TIRZ Act, including the Improvement Area #1 Improvements, as provided for in the Reinvestment
Zone Number Nine, City of Anna, Texas, Final Project and Financing Plan expected to be approved on the date of
adoption of the Bond Ordinance (including amendments or supplements thereto, the “TIRZ No. 9 Project Plan”) and
the Development Agreement, as described in more detail under “SECURITY FOR THE BONDS – Amount of
Assessments May be Reduced by TIRZ No. 9 Annual Credit Amount.” See also “THE DEVELOPMENT –
Development Plan,” “– Development Agreement,” “BONDHOLDERS’ RISKS – TIRZ No. 9 Annual Credit
Amount and Marketing of the Development,” and “APPENDIX C – Form of Service and Assessment Plan.”
The Developer expects to request the City to issue in the future one or more series of bonds (collectively,
the “Future Improvement Area Bonds”) to finance the costs of the public improvements benefitting future
improvement areas within the Tellus Tract, excluding Improvement Area #1 (the “Future Improvement Area”). The
estimated costs of the public improvements benefitting the Future Improvement Area will be determined as
development progresses, and the Service and Assessment Plan will be updated accordingly. Such Future
Improvement Area Bonds will be secured by separate assessments levied pursuant to the PID Act on assessable
property within the portion of the Future Improvement Area benefitted thereby. The Developer anticipates that
* Preliminary, subject to change.
4
Future Improvement Area Bonds will be issued over a six-year period. See “THE DEVELOPMENT – Future
Improvement Area Bonds.”
Lot Purchase and Sale Agreements
The Developer has 417 of the 418 lots in Improvement Area #1 under contract with homebuilders, with one
50’ lot uncontracted. The Developer expects home construction in Improvement Area #1 to begin in the fourth
quarter of 2026. Homebuilders in Improvement Area #1 include Scott Felder Homes, LLC, dba Olivia Clark
Homes, Perry Homes, LLC, Bloomfield Homes, Highland Homes – Dallas, LLC, Brightland Homes, Ltd.,
Homebound Technologies, Inc., and Drees Custom Homes, L.P. (collectively, the “Homebuilders”). The
Homebuilders have deposited a combined total of $14,963,385 in earnest money (the “Earnest Money Deposits”)
with the Developer. See “THE DEVELOPMENT – Lot Purchase and Sale Agreements.”
The Bonds
Proceeds of the Bonds will be used for the purposes of (i) paying a portion of the costs of the Improvement
Area #1 Improvements, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition
and construction of the Improvement Area #1 Improvements, (iii) funding a reserve fund for the payment of
principal of and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District,
and (v) paying the costs of issuance of the Bonds. See “SOURCES AND USES OF FUNDS,” “THE
IMPROVEMENT AREA #1 IMPROVEMENTS,” and “APPENDIX B – Form of Indenture.”
Payment of the Bonds is secured by a first lien on, security interest in, and pledge of the Trust Estate,
consisting primarily of revenues from Improvement Area #1 Assessments to be levied against the Improvement
Area #1 Assessed Property, 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, any Refunding Bonds, and any Future Improvement Area 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 a first lien on, security
interest in, and pledge of 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. Neither any Refunding Bonds nor any Future Improvement Area Bonds to be issued by the City
are offered pursuant to this Limited Offering Memorandum.
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. 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. Each
initial purchaser of the Bonds (each, an “Investor”) will be deemed to have acknowledged, represented, and
warranted to the City as follows:
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
5
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 Area
#1 Improvements, 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.
DESCRIPTION OF THE BONDS
General Description
The Bonds will mature on the dates and in the amounts set forth on the inside cover page of this Limited
Offering Memorandum. Interest on the Bonds will accrue from the Delivery Date 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 September 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. The City prohibits any Bond to be
issued in a denomination of less than $100,000 and further prohibits the assignment of a CUSIP number to any Bond
with a denomination of less than $100,000, and any attempt to accomplish either of the foregoing shall be void and
of no effect. Upon initial issuance, the ownership of the Bonds will be registered in the name of Cede & Co., as
6
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.”
Redemption Provisions
Optional Redemption. The City reserves the right and option to redeem the Bonds before their scheduled
maturity date, 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.
Extraordinary Optional Redemption. The City reserves the right and option to redeem Bonds before their
respective scheduled maturity dates, in whole or in part, at the Redemption Price, from amounts on deposit in the
Redemption Fund as a result of Prepayments (including related transfers to the Redemption Fund from the Reserve
Account of the Reserve Fund made pursuant to the Indenture) under the terms of the Indenture. The City will
provide the Trustee a City Certificate directing the Bonds to be redeemed pursuant to the Indenture. No redemption
shall be made which results in a Bond remaining outstanding in a principal amount less than an Authorized
Denomination. See “ASSESSMENT PROCEDURES – Prepayment of Improvement Area #1 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
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 will select by lot, or any by any other customary method that
results in 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.
7
The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date
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 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 and not previously credited to a
mandatory sinking fund redemption.
Notice of Redemption. Upon written notification by the City to the Trustee of the exercise of any
redemption, 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. Any such notice shall be conclusively
presumed to have been duly given, whether or not the Owner receives such notice.
Notice of redemption having been given as provided in the Indenture, the Bonds or portions thereof called
for redemption shall become due and payable on the date fixed for redemption provided that funds for the payment
of the Redemption Price of such Bonds to the date fixed for redemption are on deposit with the Trustee; thereafter,
such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or
not such Bonds are presented and surrendered for payment on such date.
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 are not satisfied 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 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.
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 will be treated as
representing the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000. No
redemption will 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 will
rely on directions provided in a City Certificate in selecting the Bonds to be redeemed.
If less than all of the Bonds are called for extraordinary optional redemption pursuant to the Indenture, the
Bonds or portion of a Bond to be redeemed will be allocated on a pro rata basis (as nearly as practicable) among all
Outstanding Bonds.
8
Upon surrender of any Bond for redemption in part, the Trustee in accordance with the Indenture, will
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 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.
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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.
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
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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 A
FIRST LIEN ON, SECURITY INTEREST IN, AND PLEDGE OF 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 ASSETS 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 ASSETS OF THE CITY OTHER THAN THE
TRUST ESTATE. SEE “APPENDIX B – FORM OF INDENTURE.”
The principal of, premium, if any, and interest on the Bonds are secured by a first lien on, security interest
in, and pledge of the Trust Estate, consisting primarily of Assessment Revenues expected to be levied against
Improvement Area #1 Assessed Property, 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 in connection with the levy of assessments in the District (including
the Improvement Area #1 Assessments) and expects to adopt a final Service and Assessment Plan in connection
with the authorization of the issuance of the Bonds. The Service and Assessment Plan describes the special benefit
received by the property within the District, including Improvement Area #1, provides the basis and justification for
the determination of special benefit on such property, establishes the methodology for the levy of Improvement Area
#1 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 Improvement Area #1 Annual Installments of
Improvement Area #1 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
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landowners within the District, including Improvement Area #1. See “APPENDIX C – Form of Service and
Assessment Plan.”
Pledged Revenues
The City is authorized by the PID Act, the Assessment Ordinance, and other provisions of law to finance
the Improvement Area #1 Improvements by levying Improvement Area #1 Assessments upon properties in
Improvement Area #1 of the District benefitted thereby. For a description of the assessment methodology and the
amounts of Improvement Area #1 Assessments expected to be levied on the Improvement Area #1 Assessed
Property, see “ASSESSMENT PROCEDURES” and “APPENDIX C – Form of Service and Assessment Plan.”
Pursuant to the Indenture:
“Additional Interest” means the amount collected by the application of the Additional Interest Rate.
“Additional Interest Rate” means the up to 0.50% additional interest charged on the Improvement Area #1
Assessments 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 Improvement Area #1 Assessments and Improvement Area #1 Annual
Installments; (5) preparing and maintaining records with respect to the Improvement Area #1 Assessment Roll and
Annual Service Plan Updates; (6) paying and redeeming Bonds; (7) investing or depositing Improvement Area #1
Assessments and Improvement Area #1 Annual Installments; (8) complying with the Service and Assessment Plan,
the PID Act, and the Indenture, with respect to the Bonds, including the City’s continuing disclosure requirements;
and (9) the paying agent/registrar and Trustee in connection with the 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 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 revenues received by the City from the collection of Improvement Area
#1 Assessments, including Prepayments, Improvement Area #1 Annual Installments, and Foreclosure Proceeds.
“Delinquent Collection Costs” means costs related to the foreclosure on Improvement Area #1 Assessed
Property and the costs of collection of delinquent Improvement Area #1 Assessments, delinquent Improvement Area
#1 Annual Installments, or any other delinquent amounts due under the Service and Assessment Plan, including
penalties and reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty
interest.
“Foreclosure Proceeds” means the proceeds, including interest and penalty interest, received by the City
from the enforcement of the Improvement Area #1 Assessments against any Improvement Area #1 Assessed
Property, whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs.
“Improvement Area #1 Annual Installments” means, with respect to each Parcel of Improvement Area #1
Assessed Property, each annual payment of (i) the principal of and interest on the Improvement Area #1
Assessments as shown on the Improvement Area #1 Assessment Roll or in an Annual Service Plan Update, as
shown in Exhibit F-2 to the Service and Assessment Plan, and calculated as provided in Section VI of the Service
and Assessment Plan, (ii) Annual Collection Costs, and (iii) the Additional Interest.
“Improvement Area #1 Assessed Property” means the property located in Improvement Area #1 that
benefits from the Improvement Area #1 Improvements.
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“Improvement Area #1 Assessment Roll” means the “Improvement Area #1 Assessment Roll,” which
document is attached to the Service and Assessment Plan as Exhibit F-1, as updated, modified, or amended from
time to time.
“Improvement Area #1 Assessments” means an assessment levied against Improvement Area #1 Assessed
Property based on the special benefit conferred on such Improvement Area #1 Assessed Property by the
Improvement Area #1 Improvements.
“Pledged Funds” means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund, the
Reserve Fund, and the Redemption Fund.
“Pledged Revenues” mean, collectively, the (i) Assessment Revenues (excluding the portion of the
Improvement Area #1 Assessments and Improvement Area #1 Annual Installments 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 Improvement Area #1 Assessment before the due
date thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or
penalties on a delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment
but rather are to be treated as the payment of the regularly scheduled Improvement Area #1 Annual Installment.
“Trust Estate” means the Trust Estate described in the granting clauses of the Indenture, and the Trust
Estate shall only include Pledged Revenues related to the Improvement Area #1 Assessments levied on the
Improvement Area #1 Assessed Property, unless the City pledges additional revenues to the payment of the Bonds,
which additional pledge may only be created in a Supplemental Indenture.
The City covenants in the Indenture that it will take and pursue all actions permissible under Applicable
Laws to cause the Improvement Area #1 Assessments to be collected and the liens thereof to be enforced
continuously. See “SECURITY FOR THE BONDS – Pledged Revenue Fund,” “APPENDIX B – Form of
Indenture,” and “APPENDIX C – Form of Service and Assessment Plan.”
The PID Act provides that the Improvement Area #1 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 Improvement Area #1 Assessed Property, 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 Lien is effective from the date of adoption of the Assessment Ordinance until the Improvement Area
#1 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 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 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 Improvement Area #1 Assessments
The Improvement Area #1 Assessments shown on the Improvement Area #1 Assessment Roll, 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 Improvement Area #1 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 Improvement Area #1 Assessments assessed to pay debt service on the Bonds, together with interest
thereon, are payable in Improvement Area #1 Annual Installments established by the Assessment Ordinance and the
Service and Assessment Plan to correspond, as nearly as practicable, to the debt service requirements for the Bonds.
An Improvement Area #1 Annual Installment of an Improvement Area #1 Assessment has been made payable in the
Assessment Ordinance in each fiscal year of the City preceding the date of final maturity of the Bonds which, if
collected, will be sufficient to pay debt service requirements attributable to Improvement Area #1 Assessments in
the Service and Assessment Plan. Each Improvement Area #1 Annual Installment is payable as provided in the
Service and Assessment Plan and the Assessment Ordinance.
A record of the Improvement Area #1 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 Improvement Area #1 Assessment Roll. Sums received from
the collection of the Improvement Area #1 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 Accounts within the Reserve Fund made with respect to the particular Improvement Area #1
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 Improvement Area #1 Annual Installments of Improvement Area #1 Assessments
collected to pay Annual Collection Costs and Delinquent Collection Costs shall be deposited in the Administrative
Fund and shall not constitute Pledged Revenues.
Amount of Assessments May be Reduced by TIRZ No. 9 Annual Credit Amount
The City adopted the TIRZ No. 9 Ordinance authorizing the use of a portion of ad valorem tax increment
attributable to the new development within TIRZ No. 9 (the “TIRZ Increment”) for Project Costs, as provided for
and defined in the TIRZ No. 9 Project Plan, including costs of the Improvement Area #1 Improvements.
Pursuant to the Development Agreement and the TIRZ No. 9 Project Plan, the City will agree to contribute
a portion of the TIRZ Increment attributable to development within the District (such portion, the “TIRZ No. 9
Annual Credit Amount”) into a tax increment fund created by the City (the “TIRZ Fund”) to pay Project Costs
within TIRZ No. 9, including the costs of the Improvement Area #1 Improvements and financing costs related
thereto. The TIRZ No. 9 Annual Credit Amount for each lot for each year will equal fifty percent (50%) of the ad
valorem taxes collected and received by the City on the Captured Taxable Value (defined below) of each lot in
Improvement Area #1 of the District, less administration costs; provided, however, that the TIRZ No. 9 Annual
Credit Amount for each Lot Type (defined in the Service and Assessment Plan) in any year shall not exceed an
amount that results in an equivalent tax rate equal to $1.35 per $100 of assessed value for such Lot Type, taking into
consideration the equivalent tax rate of the applicable Improvement Area #1 Annual Installment, based on the
Estimated Buildout Value (defined in the Service and Assessment Plan) of such Lot Type at the time of adoption of
the Assessment Ordinance (such amount, the “TIRZ No. 9 Maximum Annual Credit Amount”). See
“ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ No. 9 Annual Credit Amount.”
With respect to Improvement Area #1 of the District, the “Captured Taxable Value” for each year means
that year’s taxable assessed value of each lot of taxable real property within Improvement Area #1 less the Tax
Increment Base for each such lot. The “Tax Increment Base” for each lot within Improvement Area #1 of the
District is the taxable value of such lot as of January 1, 2025. The Tax Increment Base for all lots of taxable real
property located within Improvement Area #1 of the District is expected to equal to $300,971. See “APPENDIX C
– Form of Service and Assessment Plan.”
In the Development Agreement, the City has agreed to use the TIRZ No. 9 Annual Credit Amount to offset
a portion of the principal and interest portion of such lot’s Improvement Area #1 Annual Installment of
Improvement Area #1 Assessments due the following year, as calculated by the Administrator in collaboration with
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the City, in accordance with the Service and Assessment Plan. The Improvement Area #1 Annual Installment will be
calculated by taking into consideration any TIRZ No. 9 Annual Credit Amount applicable to such lot.
Pursuant to the TIRZ No. 9 Ordinance and TIRZ No. 9 Project Plan, the TIRZ No. 9 Annual Credit
Amount generated by each lot in any given year shall be used to calculate such lot’s TIRZ No. 9 Annual Credit
Amount in the following year (e.g., the TIRZ No. 9 Annual Credit Amount collected in 2026 shall be used to
calculate the TIRZ No. 9 Annual Credit Amount applicable to Annual Installments to be collected in 2027). The
TIRZ No. 9 Annual Credit Amount may be generated only from ad valorem taxes levied and collected by the City
on the Captured Taxable Value on the applicable lot in any year. Consequently, the TIRZ No. 9 Annual Credit
Amount will be generated only if the appraised value of such lot in any year is greater than the Tax Increment Base
for such lot. Any delay or failure of the Developer or the Homebuilders to develop Improvement Area #1 may result
in a reduced amount of the TIRZ No. 9 Annual Credit Amount being available to credit the Improvement Area #1
Annual Installments. See “ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ No. 9 Annual Credit
Amount” and “APPENDIX C – Form of Service and Assessment Plan.”
TIRZ No. 9 will terminate, unless the City elects to extend the term, upon the earlier to occur of (i)
December 31, 2065, or (ii) the date that all Project Costs have been paid (whether through the District or TIRZ No.
9). The City expects to contribute the TIRZ No. 9 Annual Credit Amount for Improvement Area #1 for the last year
in calendar year 2065 and apply it to the TIRZ No. 9 Annual Credit Amount in 2066.
THE TIRZ NO. 9 REVENUES, IF AVAILABLE, WILL NOT BE PLEDGED TO THE PAYMENT OF
THE BONDS AND THERE IS NO GUARANTEE THAT THERE WILL EVER BE SUFFICIENT TIRZ NO. 9
REVENUES TO GENERATE THE TIRZ NO. 9 MAXIMUM ANNUAL CREDIT AMOUNT. THE TIRZ NO. 9
ANNUAL CREDIT AMOUNT WILL NOT BE APPLIED IN ANY MANNER THAT WOULD AFFECT THE
COLLECTION AND CONTINUOUS ENFORCEMENT OF THE IMPROVEMENT AREA #1 ASSESSMENTS
COLLECTED FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS AND ANNUAL COLLECTION
COSTS AND THE FUNDING OF THE DELINQUENCY AND PREPAYMENT RESERVE REQUIREMENT, IN
THE MANNER AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS. SUCH TIRZ
NO. 9 MAXIMUM ANNUAL CREDIT AMOUNT IS NOT EXPECTED TO BE AVAILABLE TO REDUCE THE
PRINCIPAL AND INTEREST PORTION OF THE ANNUAL INSTALLMENT FOR ANY ASSESSED PARCEL
UNTIL 2027, AND MAY BE LATER.
Unconditional Levy of Improvement Area #1 Assessments
The City will impose Improvement Area #1 Assessments on the Improvement Area #1 Assessed Property
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 Improvement Area
#1 Assessments are effective on the date of adoption of, and strictly in accordance with the terms of, the Assessment
Ordinance. Each Improvement Area #1 Assessment may be paid in full or in part at any time, or in periodic
Improvement Area #1 Annual Installments over a period of time equal to the term of the Bonds, which installments
shall include interest on the Improvement Area #1 Assessments. Pursuant to the Assessment Ordinance, interest on
the Improvement Area #1 Assessments for each lot within Improvement Area #1 of the District will begin to accrue
on the date specified in the Service and Assessment Plan will accrue at a rate specified in the Assessment Ordinance
but may not exceed the interest rate on the Bonds plus the Additional Interest. Such interest rates may be adjusted as
described in the Service and Assessment Plan. Each Improvement Area #1 Annual Installment, including the interest
on the unpaid amount of an Improvement Area #1 Assessment, shall be calculated annually and shall be due on
October 1 of each year. Each Improvement Area #1 Annual Installment together with interest thereon shall be
delinquent if not paid prior to February 1 of the following year. The initial Improvement Area #1 Annual
Installments of the Improvement Area #1 Assessments will be due on or about October 1, 2026, and will be
delinquent if not paid prior to February 1, 2027.
As authorized by Section 372.018(b) of the PID Act, the City will calculate and collect, each year while the
Bonds are Outstanding and unpaid, a portion of each Improvement Area #1 Annual Installment to pay the annual
costs incurred by the City in the administration and operation of the District. The portion of each Improvement Area
#1 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 after an annual review in any year pursuant to Section 372.013 of
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the PID Act. The amount collected to pay Annual Collection Costs shall be due in the manner set forth in the
Assessment Ordinance on October 1 of each year and shall be delinquent if not paid by February 1 of the following
year. Amounts collected to pay Annual Collection Costs do not secure repayment of the Bonds.
There is no discount for the early payment of Improvement Area #1 Assessments.
Improvement Area #1 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
Improvement Area #1 Assessed Property, 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 Improvement Area #1 Assessed Property regardless of whether the owners are named, and runs with
the land. The lien for Improvement Area #1 Assessments and penalties and interest will begin on the date of
adoption of the Assessment Ordinance and continue until the Improvement Area #1 Assessments are paid or until all
Bonds are finally paid.
Failure to pay an Improvement Area #1 Annual Installment when due will not accelerate the payment of the
remaining Improvement Area #1 Annual Installments of the Improvement Area #1 Assessments and such remaining
Improvement Area #1 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 and pledge of the Trust Estate to secure the Bonds 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 Texas Government Code, Chapter 1208, 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 Texas 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 Texas Business and Commerce Code, Chapter 9, as amended, 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 Texas law to comply with the applicable
provisions of Texas Business and Commerce Code, Chapter 9, as amended, and enable a filing to perfect the
security interest in said pledge to occur. See “APPENDIX B – Form of Indenture.”
Pledged Revenue Fund
Periodically upon receipt thereof, the City shall transfer or cause to be transferred, pursuant to a City
Certificate provided to the Trustee for deposit to the Pledged Revenue Fund the Improvement Area #1 Assessments
and Improvement Area #1 Annual Installments, other than the portion of the Improvement Area #1 Assessments and
Improvement Area #1 Annual Installments 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. Following
such deposit to the Pledged Revenue Fund, the City shall transfer or cause to be transferred pursuant to a City
Certificate provided to the Trustee 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 as described in this paragraph, 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 a City
Certificate to the Trustee to transfer to the Rebate Fund, prior to any other transfer described in this paragraph, the
full amount of Rebatable Arbitrage owed by the City, as further described in the Indenture. If any funds remain on
deposit in the Pledged Revenue Fund after the foregoing deposits are made, the City shall have the option, in its sole
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and absolute discretion, to use such excess funds for any one or more of the following purposes: (i) to pay costs of
the Improvement Area #1 Improvements, (ii) to pay other costs permitted by the PID Act, or (iii) to 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 and any expected transfers from the Capitalized Interest Account to the
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.
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 the preceding 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.
The Trustee shall transfer Prepayments to the Redemption Fund to be used to redeem Bonds pursuant the
Indenture 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 Improvement Area #1 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 to be used to redeem Bonds pursuant to the
Indenture.
After satisfaction of the requirement to provide for the 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
Certificate.
Bond Fund
On each Interest Payment Date, the Trustee shall withdraw from the Principal and Interest Account and
transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments) and interest then due
and payable on the Bonds, less any amount to be used to pay interest on the Bonds on such Interest Payment Date
from the Capitalized Interest Account as provided below.
If amounts in the Principal and Interest Account are insufficient for the purposes set forth above, the
Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency. Amounts so
withdrawn from the Reserve Fund shall be deposited in the Principal and Interest Account 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 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.
Moneys in the Capitalized Interest Account shall be used for the payment of interest on the Bonds on the
following date and in the following amount:
Date Amount
Septembe 15, 2026 $
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Any amounts on deposit in the Capitalized Interest Account after the payment of interest on the dates and
in the amounts listed above shall be transferred shall be transferred, at the direction of the City, to the Improvement
Area #1 Bond Improvement Account of the Project Fund, or to the Redemption Fund to be used to redeem Bonds,
and the Capitalized Interest Account shall be closed.
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 Certificates. Disbursements from the Improvement Area #1
Bond Improvement Account of the Project Fund to pay costs of the Improvement Area #1 Improvements shall be
made by the Trustee upon receipt by the Trustee of a properly executed and completed Certification for Payment.
The funds from the Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in
accordance with a Certification for Payment for Improvement Area #1 Improvements as described in the CFA
Agreement.
Except as provided in the succeeding paragraphs below, money on deposit in the Improvement Area #1
Bond Improvement Account of the Project Fund shall be used solely to pay costs of the Improvement Area #1
Improvements.
If the City Representative determines in his or her sole discretion that certain amounts then on deposit in
the Improvement Area #1 Bond Improvement Account are not expected to be expended for purposes of the Project
Fund due to the abandonment, or constructive abandonment, of one or more of the Improvement Area #1
Improvements such that, in the opinion of the City Representative, it is unlikely that the amounts in the
Improvement Area #1 Bond Improvement Account will ever be expended for the purposes of the Project Fund, the
City Representative shall file a City Certificate with the Trustee which identifies the amounts then on deposit in the
Improvement Area #1 Bond Improvement Account that are not expected to be used for purposes of the Project Fund.
If such City Certificate is so filed, the identified amounts on deposit in the Improvement Area #1 Bond Improvement
Account shall be transferred to the Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to
the Indenture as directed by the City Representative in a City Certificate filed with the Trustee. Upon such transfer,
the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed.
In making any determination regarding the Project Fund pursuant to the Indenture, the City Representative
may conclusively rely upon a certificate of an Independent Financial Consultant.
Upon the filing of a City Certificate stating that all Improvement Area #1 Improvements have been
completed and that all costs of the Improvement Area #1 Improvements have been paid, or that any Improvement
Area #1 Improvements are not required to be paid from the Project Fund pursuant to a Certification for Payment, the
Trustee shall transfer the amount, if any, remaining within the Improvement Area #1 Bond Improvement Account of
the Project Fund to the Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture
as directed by the City Representative in a City Certificate filed with the Trustee. Upon such transfer, the
Improvement Area #1 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 Improvement Area #1 Bond
Improvement Account of the Project Fund and used to pay the costs of Improvement Area #1 Improvements or to
the Principal and Interest Account and used to pay interest on the Bonds, as directed in a City Certificate filed with
the Trustee, and the Costs of Issuance Account shall be closed.
In the event the Developer has not completed the Improvement Area #1 Improvements by March 10, 2031,
then the City shall provide written direction to the Trustee to transfer all funds on deposit in the Improvement Area
#1 Bond Improvement Account to the Redemption Fund to redeem Bonds pursuant to the Indenture. Upon such
transfer, the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed.
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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 the Delivery Date, (ii) 125% of average Annual Debt Service on
the Bonds as of the Delivery Date, and (iii) 10% of the proceeds of the Bonds; provided, 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 Delivery Date, the Reserve Account Requirement is $ *, which is an amount
equal to the Maximum Annual Debt Service* on the Bonds as of the Delivery Date.
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 Bond
Pledged Revenue Account of the Pledged Revenue Fund to the Delinquency and Prepayment Reserve Account on
March 15 of each year, commencing March 15, 2027, an amount the City confirms to the Trustee is 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 reaccumulated in the Delinquency and Prepayment
Reserve Account. In transferring the amounts pursuant to the Indenture, the Trustee may conclusively rely on a City
Certificate (which shall be based on the Improvement Area #1 Annual Installments as shown on the Improvement
Area #1 Assessment Roll in the Service and Assessment Plan) unless and until it receives a City Certificate directing
that a different amount be used. Whenever a transfer is made from the Reserve Account 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. 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 5.0% of the principal
amount of the Outstanding Bonds to be funded from the Additional Interest deposited to the Pledged Revenue Fund
and transferred to the Delinquency and Prepayment Reserve Account.
In the event of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment pursuant
to the Indenture, the Trustee, pursuant to a City Certificate, 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 necessary to permit the 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 written 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 Certificate instructing the Trustee to apply such
* To be completed upon pricing of the Bonds.
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excess: (i) to pay amounts due to the U.S. Government in accordance with the Code, (ii) to the Administrative Fund
in an amount not more than the Annual Collection Costs for the Bonds, (iii) to the Improvement Area #1 Bond
Improvement Account of the Project Fund to pay costs of the Improvement Area #1 Improvements if such
application and the expenditure of funds is expected to occur within three years of the Delivery Date, or (iv) to the
Redemption Fund to be applied to the redemption of Bonds.
Whenever, on any Interest Payment Date, or on any other date at the written request of a 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 Certificate,
to the Administrative Fund for the payment of Annual Collection Costs or to the Redemption Fund to be used to
redeem Bonds pursuant to the Indenture. In the event that the Trustee does not receive a City Certificate 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 and applied to the payment
of the principal of the Bonds.
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
The City will create under the Indenture an Administrative Fund held by the Trustee. Periodically upon
receipt thereof, the City shall deposit or cause to be deposited to the Administrative Fund the portion of the
Improvement Area #1 Assessments and Improvement Area #1 Annual Installments 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 Certificate solely for the purposes set forth in the
Service and Assessment Plan, including payment of the Annual Collection Costs and Delinquent Collection Costs.
See “APPENDIX C – Form of 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
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date be by reason of maturity, redemption, or otherwise), either (i) shall have been made in accordance with the
terms thereof, or (ii) 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 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 and shall not be part of the Trust Estate. 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 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 the Improvement Area #1 Assessments,
including the prosecution of foreclosure proceedings, in accordance with the Indenture;
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 may give notice in its discretion
and which shall give such notice at the written request of the Owners of not less than 51% in
aggregate Outstanding principal amount of the Bonds; 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
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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; and
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
Upon the happening and continuance of any Event of Default, 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 aggregate
Outstanding principal amount of the Bonds 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 all Outstanding Bonds,
in the selection of Trust Estate assets to be used in the payment of Bonds due in an Event of Default, the City shall
determine, in its absolute discretion, and shall instruct the Trustee by City Certificate, 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 Certificate, 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 liquidation or sale. The Trustee shall have no liability for its selection
of Trust Estate assets to liquidate or sell.
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 the Trustee may deem
appropriate, 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, 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 thereunder, unless (i) a
default has occurred and is continuing of which the Trustee has been notified in writing or of which the Trustee is
deemed to have notice, (ii) such default has become an Event of Default and the Owners of not less than 51% in
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,
22
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 written direction
inconsistent with such written request has been given to the Trustee during such 60-day period by the Owners of a
majority of the aggregate principal amount of the Bonds then Outstanding, and (vi) notice of such action, suit, or
proceeding is given to the Trustee in writing; 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 in the Indenture shall, at
the option of the Trustee as advised by its counsel, 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 provisions of the Indenture with respect to certain liabilities of the City, 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
thereunder to the respective Owners thereof at the time and place, from the source, and in the manner expressed
therein and in the Bonds.
In case the Trustee or any Owners 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, then and in every such case the City, the Trustee, and the Owners shall be restored to
their former positions and rights thereunder, and all rights, remedies, and powers of the Trustee shall continue as if
no such proceedings had been taken.
Application of Revenues and Other Moneys After Event of Default
All moneys, securities, funds, Pledged Revenues, and other assets of the Trust Estate and the income
therefrom received by the Trustee pursuant to any right given or action taken under the provisions of the Indenture
with respect to Events of Default shall, after payment of the cost and expenses of the proceedings resulting in the
collection of such amounts, the expenses (including Trustee’s counsel fees, costs, and expenses), liabilities, and
advances incurred or made by the Trustee, and the fees of the Trustee in carrying out 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 or Redemption Price and to the Owners entitled thereto, without any discrimination or
preference.
The Trustee shall make payments to the Owners pursuant to the provisions above 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 above, 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.
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The restoration of the City to its prior position after any and all defaults have been cured, as provided
above, 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 established pursuant to the Indenture, other than the Reserve Fund, shall be
invested by the Trustee as directed by the City pursuant to a City Certificate filed with the Trustee in Investment
Securities; 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 Certificate 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.
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 as directed by the City in writing.
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 any Refunding Bonds issued to refund all or a portion of the
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.
Other Obligations or Other Liens; Refunding Bonds
The City reserves the right, subject to the provisions contained in the Indenture, to issue Other 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 the Trust Estate, or any portion thereof.
Other than Refunding Bonds, or subordinate lien obligations permitted under the Indenture, 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 thereof 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, 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 and subordinate lien obligations permitted
thereunder. 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 table that follows 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 #1 Bond Improvement Account of the Pro ect Fun
Deposit to Costs of Issuance Account of the Pro ect Fun
Deposit to Capitalized Interest Account of the Bond Fun
Deposit to Reserve Account of the Reserve Fun
Deposit to Administrative Fun
Underwriter’s Discount (1)
Total Uses
(1) Includes the fee of counsel to the Underwriter.
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* To be completed upon pricing of the Bonds.
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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 (1)
Total
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
2056
Total
(1) A portion of the proceeds of the Bonds will be used to pay interest due on the Bonds on September 15, 2026. See “SECURITY FOR THE
BONDS – Bond Fund” and “SOURCES AND USES OF FUNDS.”
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* To be completed upon pricing of the Bonds.
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OVERLAPPING TAXES AND DEBT
Overlapping Taxes
The District is located within the corporate boundaries of the City. The land within Improvement Area #1
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 Improvement Area #1 Assessments levied by
the City.
In addition to the City, Collin County, Texas, the Collin County Community College District, and the Anna
Independent School District (“Anna ISD”) may each levy ad valorem taxes upon land in Improvement Area #1 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 Area #1 of the District.
Taxin Entit
Without application of
TIRZ No. 9
Tax Year 2025
Annual Credit Amoun (1)
With application of
TIRZ No. 9
Tax Year 2025
Annual Credit Amoun (1)
The Cit $0.525073 $0.525073
Collin Count 0.149343 0.149343
Collin Count Communit Colle e District 0.081220 0.081220
Anna ISD 1.239900 1.239900
Total Current Tax Rate $1.995536 $1.995536
Estimated Average Improvement Area #1 Annual Installment of
Improvement Area #1 Assessment as an Equivalent Tax Rate (2)
$1.105792 $1.105792
TIRZ No. 9 Annual Credit Amount applicable to Estimated
Average Improvement Area #1 Annual Installment of
Improvement Area #1 Assessment as an Equivalent Tax Rate (3) $ ($0.262536) (3)
Estimated Net Average Improvement Area #1 Annual
Installments of Improvement Area #1 Assessments as an
Equivalent Tax Rate $ $0.843256 (3)
Estimated Total Tax Rate and Estimated Average
Improvement Area #1 Annual Installments of Improvement
Area # 1 Assessments as an Equivalent Tax Rate (2) $3.101328 $2.838792 (3)
________________________________
(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 – Form of
Service and Assessment Plan. Assumes completion of homes at values estimated by the Developer. See “THE DEVELOPMENT –
Expected Build-out, Absorption, and Home Prices in the Tellus Tract.”
(3) The City has agreed to contribute the TIRZ No. 9 Annual Credit Amount generated from each lot within Improvement Area #1, in an amount
equal to 50% of the City’s ad valorem tax collected on the Captured Taxable Value for such lot for such year, to offset a portion of such lot’s
Improvement Area #1 Annual Installment of Improvement Area #1 Assessments due the following year, subject to the TIRZ No. 9 Maximum
Annual Credit Amount. Derived from information in the Service and Assessment Plan. See “ASSESSMENT PROCEDURES – Assessment
Amounts – TIRZ No. 9 Annual Credit Amount.”
Sources: Collin Central Appraisal District, the City, and the Administrator.
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Overlapping Debt
As noted above, Improvement Area #1 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 the Improvement Area #1 Assessed Property, as of , 20__, and City debt secured by the
Improvement Area #1 Assessments:
Taxin or Assessin Entit
Gross
Outstanding Debt
as of
Estimated
Percentage
Applicable (1)
Direct and
Estimated
Overlappin Deb (1)
The City (The Bonds) $ 33,950,000* 100.000% $ 33,950,000*
The Cit (Ad Valorem Taxes)
Collin Count , Texas
Collin Count Communit Colle e Distric
Anna Independent School Distric
TOTAL
* Preliminary; subject to change.
(1) Based on the prospective market value for Improvement Area #1 of the District set forth in the Appraisal and the tax year 2025 net taxable
assessed valuations for the taxing entities. See “APPRAISAL” and “APPENDIX H – Appraisal.”
Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas
Agricultural Use
If land is devoted principally to agricultural use, a landowner can apply for an agricultural valuation on the
property and pay ad valorem taxes based on the land’s agricultural value. Agricultural use includes production of
crops or livestock. It also can include leaving the land idle for a government program or for normal crop or
livestock rotation. If land qualified for an agricultural valuation but the land use changes to a non-agricultural use,
“rollback taxes” are assessed for each of the previous three (3) years in which the land received the lower
agricultural valuation. The rollback tax is the difference between taxes paid on land’s agricultural value and the
taxes that the landowner would have paid if the land had been taxed on a higher market value plus interest charged
for each year from the date on which taxes would have been due. If the land use changes to a non-agricultural use
on only a portion of a larger tract, the landowner can fence off the remaining land and maintain the agricultural
valuation on the remaining land. In this scenario, the landowner would only be responsible for rollback taxes on that
portion of the land where use changed and not the entire tract.
Beginning in 2026, Improvement Area #1 will no longer be subject to an agricultural valuation. The
Developer expects rollback taxes in the approximate amount of $276,157 to be due by January 31, 2027.
Homeowners’ Association Dues
In addition to the Improvement Area #1 Assessments, the Developer anticipates that each property owner
in Improvement Area #1 of the District will pay a fee to a homeowners’ association (the “HOA”) in the approximate
amount of $150 per month.
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ASSESSMENT PROCEDURES
Capitalized terms used under this caption and not otherwise defined in the Indenture or this Limited
Offering Memorandum shall have the meanings given in the Service and Assessment Plan. See “APPENDIX C –
Form of 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
Area #1 Improvements through Improvement Area #1 Assessments, it must adopt a resolution generally describing
the Improvement Area #1 Improvements and the land within Improvement Area #1 of the District to be subject to
Improvement Area #1 Assessments to pay the cost therefor. The City has caused the Improvement Area #1
Assessment Roll to be prepared, which shows the land within Improvement Area #1 of the District to be assessed,
the amount of the benefit to and the Improvement Area #1 Assessment against each lot or parcel of land within
Improvement Area #1, and the number of Improvement Area #1 Annual Installments in which the Improvement
Area #1 Assessment is divided. The Improvement Area #1 Assessment Roll was or will be filed with the City
Secretary and made available for public inspection. Statutory notice was or will be given to the owners of the
Improvement Area #1 Assessed Property and a public hearing will be conducted to hear testimony from affected
property owners as to the propriety and advisability of undertaking the Improvement Area #1 Improvements and
funding a portion of the same with Improvement Area #1 Assessments. The City expects to adopt the Assessment
Ordinance and levy the Improvement Area #1 Assessments on February 24, 2026. After adoption of the Assessment
Ordinance, the Improvement Area #1 Assessments will become legal, valid, and binding liens upon the
Improvement Area #1 Assessed Property.
Pursuant to the PID Act, the Actual Costs of the Improvement Area #1 Improvements may be assessed by
the City against the Improvement Area #1 Assessed Property so long as the special benefit conferred upon the
Improvement Area #1 Assessed Property by the Improvement Area #1 Improvements equals or exceeds the amount
of the Improvement Area #1 Assessments. The costs of the Improvement Area #1 Improvements may be assessed
using any methodology that results in the imposition of equal shares of cost on Improvement Area #1 Assessed
Property similarly benefited. The allocation of benefits and assessments to the benefitted land within the District,
including land in Improvement Area #1, is set forth in the Service and Assessment Plan, which should be read in its
entirety. See “APPENDIX C – Form of Service and Assessment Plan.”
Assessment Methodology
The Service and Assessment Plan describes the special benefit to be received by each Parcel of
Improvement Area #1 Assessed Property as a result of the Improvement Area #1 Improvements, provides the basis
and justification for the determination that such special benefit exceeds the amount of the Improvement Area #1
Assessments being levied, and establishes the methodology by which the City allocates the special benefit of the
Improvement Area #1 Improvements to Parcels of Improvement Area #1 Assessed Property in a manner that results
in equal shares of costs being apportioned to Parcels of Improvement Area #1 Assessed Property similarly benefited.
As described in the Service and Assessment Plan, a portion of the costs of the Improvement Area #1 Improvements
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 of the Improvement Area #1 Improvements will be allocated to the
Improvement Area #1 Assessed Property by spreading the entire Improvement Area #1 Assessment across all
Improvement Area #1 Assessed Property within Improvement Area #1 of the District based on the ratio of Estimated
Buildout Value of each Lot Type in Improvement Area #1 to the Estimated Buildout Value of all Improvement Area
#1 Assessed Property. At the time the City adopts the Assessment Ordinance, the Improvement Area #1 Initial
Parcel will be the only Parcel within Improvement Area #1, and as such, the Improvement Area #1 Initial Parcel will
be allocated 100% of the costs of the Improvement Area #1 Improvements.
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The following table provides additional analysis with respect to assessment methodology, including the
value to Improvement Area #1 Assessment burden ratio per Lot Type, equivalent tax rate per Lot Type, and leverage
per Lot Type related to the Improvement Area #1 Assessments applicable to the Improvement Area #1 Assessed
Property. The information in the table was obtained from and calculated using information provided in the Service
and Assessment Plan. See “APPENDIX C – Form of Service and Assessment Plan.”
Lien to Value Analysis, Improvement Area #1 Assessment Allocation, Equivalent Tax Rate,
and Leverage per Lot Type in Improvement Area #1 *
Lot
Type
Planned
No. of
Lots
Estimated
Finished
Value per
Lot Type (1)
Estimated
Buildout
Value per Lot
Type (2)
Estimated
Improvement
Area #1
Assessment per
Lot Type
Average
Improvement
Area #1
Annual
Installment of
Improvement
Area #1
Assessment
per Lot Type
Tax Rate
Equivalent of
Average
Improvement
Area #1 Annual
Installment of
Improvement
Area #1
Assessment per
Lot Type (3)
Estimated
Ratio of
Estimated
Finished
Value per Lot
Type to
Improvement
Area #1
Assessment (1)
Estimated
Ratio of
Estimated
Buildout
Value per Lot
Type to
Improvement
Area #1
Assessment (2)
45’ 76 $120,876 $477,000 $ 67,570 $5,275 $1.105792 1:79 : 1 7.06 : 1
50’ 166 $132,302 $530,000 $ 75,077 $5,861 $1.105792 1:76 : 1 7.06 : 1
60’ 143 $155,755 $636,000 $ 90,093 $7,033 $1.105792 1:73 : 1 7.06 : 1
70’ 33 $180,312 $742,000 $105,108 $8,205 $1.105792 1:72 : 1 7.06 : 1
* Preliminary, subject to change.
(1) Developer estimates. May differ from the prices in the Lot Sale and Purchase Agreements and the retail lot value in the Appraisal. See “THE
DEVELOPMENT – Lot Purchase and Sale Agreements” and “APPRAISAL.”
(2) Estimated Buildout Value derived from the Service and Assessment Plan. Provided by the Developer.
(3) Per $100 of home value.
Source: Derived from information presented in the Service and Assessment Plan.
For further explanation of the Improvement Area #1 Assessment methodology, see “APPENDIX C – Form
of Service and Assessment Plan.”
The City has determined that the foregoing method of allocation will result in the imposition of equal
shares of the Improvement Area #1 Assessments on parcels of Improvement Area #1 Assessed Property similarly
situated within Improvement Area #1 of the District. The Improvement Area #1 Assessments and interest thereon
are expected to be paid in Improvement Area #1 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 Area #1 of the District. See “APPENDIX
C – Form of Service and Assessment Plan.”
Collection and Enforcement of Assessment Amounts
Pursuant to the PID Act, the Improvement Area #1 Annual Installments may be collected in the same
manner and at the same time as ad valorem taxes of the City. The Improvement Area #1 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 Improvement Area #1 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
Improvement Area #1 Assessed Property, 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.”
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In the Indenture, the City covenants to collect, or cause to be collected, Improvement Area #1 Assessments
as provided in the Assessment Ordinance. 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
Improvement Area #1 Annual Installments. Each Annual Service Plan Update shall include an updated
Improvement Area #1 Assessment Roll and a calculation of the Improvement Area #1 Annual Installment for each
Parcel. Annual Collection Costs shall be allocated among all Parcels of Improvement Area #1 Assessed Property in
proportion to the amount of the Improvement Area #1 Annual Installments for such 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 Improvement Area #1 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 Improvement Area #1 Assessments.
To the extent permitted by law, notice of the Improvement Area #1 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 Improvement Area #1 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 Improvement Area #1 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
Improvement Area #1 Annual Installment, and any delinquent charges and interest thereon, including diligently
prosecuting an action in district court to foreclose the currently delinquent Improvement Area #1 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 Improvement Area #1 Assessment, or the corresponding
Improvement Area #1 Assessed Property.
The City will implement the basic timeline and procedures for Improvement Area #1 Assessment
collections and pursuit of delinquencies set forth in Exhibit D 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 Improvement
Area #1 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.
Improvement Area #1 Annual Installments will be paid to the City or its agent. Improvement Area #1
Annual Installments are due on October 1 of each year and become delinquent on February 1 of the following year.
In the event Improvement Area #1 Assessments are not timely paid, there are penalties and interest as set forth
below:
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
31
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 Improvement Area #1 Assessments are paid as an administrative expense of the estate in
bankruptcy or by order of the bankruptcy court.
Assessment Amounts
Improvement Area #1 Assessment Amounts. The maximum amounts of the Improvement Area #1
Assessments will be established by the methodology described in the Service and Assessment Plan. The
Improvement Area #1 Assessment Roll sets forth for each year the Improvement Area #1 Annual Installment for
each Improvement Area #1 Assessed Property consisting of the annual payment allocable to the Bonds and the
Improvement Area #1 Improvements for each Improvement Area #1 Assessed Property, which amount includes (i)
the Additional Interest, and (ii) the annual payment allocable to Annual Collection Costs. The Improvement Area
#1 Annual Installments for the Improvement Area #1 Assessments may not exceed the amounts shown on the
Improvement Area #1 Assessment Roll. The Improvement Area #1 Assessments will be levied against the Parcels
comprising the Improvement Area #1 Assessed Property as indicated on the Improvement Area #1 Assessment Roll.
See “APPENDIX C – Form of Service and Assessment Plan” and “APPENDIX G – Form of CFA Agreement.”
The Improvement Area #1 Annual Installments shown on the Improvement Area #1 Assessment Roll 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 Improvement Area #1 Assessments, or the redemption of the Bonds, then there
would be a corresponding reduction in the Improvement Area #1 Assessments and the Improvement Area #1 Annual
Installments. See “APPENDIX C – Form of Service and Assessment Plan.” In such case, the reduced Improvement
Area #1 Assessment and Improvement Area #1 Annual Installment, as shown on the Improvement Area #1
Assessment Roll, shall be reflected in the next Annual Service Plan Update and approved by City Council.
Method of Apportionment of Improvement Area #1 Assessments. For purposes of the Service and
Assessment Plan, the City Council has determined that the Improvement Area #1 Assessments shall be initially
allocated to the Parcels consisting of the Improvement Area #1 Assessed Property based on the ratio of the
Estimated Buildout Value of each Parcel in Improvement Area #1 to the Estimated Buildout Value of all Parcels in
Improvement Area #1.
Division Prior to Recording of Subdivision Plat. Upon the division of any Improvement Area #1
Assessed Property prior to the recording of a subdivision plat, the Administrator shall reallocate the
Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to the
division among the newly divided Improvement Area #1 Assessed Properties according to the
following formula:
A = B x (C ÷ D)
Where the terms have the following meanings:
A = the Improvement Area #1 Assessment for the newly divided Improvement Area #1 Assessed
Property
B = the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior
to division
C = the Estimated Buildout Value of the newly divided Improvement Area #1 Assessed Property
32
D = the sum of the Estimated Buildout Value for all of the newly divided Improvement Area #1
Assessed Properties
The calculation of the Improvement Area #1 Assessment of an Improvement Area #1
Assessed Property shall be performed by the Administrator and shall be based on the Estimated
Buildout Value of that Improvement Area #1 Assessed Property, relying on information from
homebuilders, market studies, appraisals, official public records of the County, and any other relevant
information regarding the Improvement Area #1 Assessed Property. The calculation as confirmed by
the City Council shall be conclusive and binding.
The sum of the Improvement Area #1 Assessments for all newly divided Improvement Area
#1 Assessed Properties shall equal the Improvement Area #1 Assessment for the Improvement Area #1
Assessed Property prior to subdivision. The calculation shall be made separately for each newly
divided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1
Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may
not exceed the Improvement Area #1 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 Improvement Area #1
Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the
Improvement Area #1 Assessment for the Improvement Area #1 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 Improvement Area #1 Assessment for the newly subdivided Lot
B = the Improvement Area #1 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 Improvement Area #1
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 Improvement Area #1 Assessments for all newly subdivided Lots shall not
exceed the Improvement Area #1 Assessment for the portion of the Improvement Area #1 Assessed
Property subdivided prior to subdivision. The calculation shall be made separately for each newly
subdivided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1
Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may
not exceed the Improvement Area #1 Assessment prior to the reallocation. Any reallocation pursuant
33
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 Improvement Area #1 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 Improvement Area #1
Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot
Type and compliance may require a mandatory prepayment of Improvement Area #1 Assessments.
Maximum Assessment. Notwithstanding the foregoing, the Service and Assessment Plan establishes a
“Maximum Assessment” for each Lot Type in Improvement Area #1 of the District, which Maximum Assessment is
shown in Exhibit E of the Service and Assessment Plan. See “APPENDIX C – Form of 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 Improvement Area #1 Assessment per Lot for any Lot Type exceeding the Maximum Assessment. If the
Administrator determines that the resulting Improvement Area #1 Assessment per Lot for any Lot Type will exceed
the Maximum Assessment, then (i) the Improvement Area #1 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 Improvement Area #1 Assessment, to the City the amount the Improvement Area #1 Assessment
was reduced, plus Prepayment Costs and Delinquent Collection Costs, prior to the City approving the final plat.
In addition, if the Improvement Area #1 Assessed Property is transferred to a person or entity that is
exempt from payment of the Improvement Area #1 Assessment, the owner transferring the Improvement Area #1
Assessed Property shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment
Costs and Delinquent Collection Costs, prior to the transfer. If the owner of the Improvement Area #1 Assessed
Property causes the Improvement Area #1 Assessed Property to become Non-Benefited Property, the owner causing
the change in status shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment
Costs and Delinquent Collection Costs, prior to the change in status.
For further information about apportionment of the Improvement Area #1 Assessments, See “APPENDIX
C – Form of Service and Assessment Plan.”
TIRZ No. 9 Annual Credit Amount. Pursuant to the Service and Assessment Plan and the TIRZ No. 9
Ordinance, the City agreed to use the TIRZ No. 9 Annual Credit Amount generated from each Improvement Area #1
Assessed Property to offset a portion of such Parcel’s Improvement Area #1 Assessment related to the Improvement
Area #1 Improvements. The Improvement Area #1 Annual Installment of the Improvement Area #1 Assessments for
each Parcel within Improvement Area #1 will be calculated by taking into consideration any TIRZ No. 9 Annual
Credit Amount applicable to such Parcel, as described under “SECURITY FOR THE BONDS – Amount of
Assessments May be Reduced by TIRZ No. 9 Annual Credit Amount” and in “APPENDIX C – Form of Service and
Assessment Plan.” The TIRZ No. 9 Annual Credit Amount is generated only from ad valorem taxes levied and
collected by the City on the Captured Taxable Value on the applicable Parcel in any year. Consequently, the TIRZ
No. 9 Annual Credit Amount is generated only if the appraised value of such Parcel in any year is greater than the
TIRZ Base Value of such Parcel. See “APPENDIX C – Form of Service and Assessment Plan.”
TIRZ NO. 9 REVENUES ARE NOT PLEDGED AS SECURITY FOR THE BONDS.
Prepayment of Assessments
Pursuant to the PID Act and the Indenture, the owner of any Improvement Area #1 Assessed Property may
voluntarily prepay (a “Prepayment”), at any time, all or part of an Improvement Area #1 Assessment levied against
such owner’s Improvement Area #1 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
34
delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment, but rather are
to be treated as payment of regularly scheduled Improvement Area #1 Assessments.
Priority of Lien
The Improvement Area #1 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 date of the Assessment Ordinance until the Improvement Area #1 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 Improvement Area #1 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 Improvement Area #1 Annual Installment, except for
unpaid Improvement Area #1 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 Improvement Area #1 Annual Installment. In such
action the real property subject to the delinquent Improvement Area #1 Annual Installments may be sold at judicial
foreclosure sale for the amount of such delinquent Improvement Area #1 Annual Installments, plus penalties and
interest.
Any sale of property for nonpayment of an installment or installments of an Improvement Area #1
Assessment will be subject to the lien established for remaining unpaid installments of the Improvement Area #1
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 Improvement Area #1 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 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 Improvement Area #1 Assessment on the
corresponding Improvement Area #1 Assessed Property.
In the Indenture, the City will covenant to take and pursue all actions permissible under Applicable Laws to
cause the Improvement Area #1 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 Improvement Area #1 Assessments, provided that the City is not required to expend any funds for
collection and enforcement of Improvement Area #1 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 Improvement Area #1 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 – Form of Service
and Assessment Plan.”
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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. The City estimates the population as
of January 1, 2026, was .
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 i
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 following description was taken from the LOM for The Woods at Lindsey Place bonds issued in
December 2025, as revised by Bond Counsel and Developer’s Counsel. Please review and update as necessary with
respect to Sherley Farms.]
The City will provide both water and wastewater service to the District. The City’s existing water and
wastewater systems are sufficient to serve all of the property in Improvement Area #1 of 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, Texas, the City is connected to a large
diameter water transmission line managed by the Greater Texoma Utility Authority (“GTUA”). 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 gallons per minute (“gpm”) from the
GTUA connection, providing the City with a maximum peak flow of treated water supply of 6,706 gpm. Both
GTUA and the City are working on capital projects which will increase the maximum treated water supply and
storage.
GTUA expanded its Bloomdale Pump Station vault, which increased the GTUA total maximum flow to
over 9,000 gpm. The City has completed an expansion of its 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’s capital
improvement plan and the GTUA/CGMA capital improvement plan. The Development requires the dedication to
the City of a 1.5-3 acre site to be used as a site for a water tower and/or a fire station. The site will be dedicated to
the City in 2026 and, assuming its use for a water tower, will increase storage capacity by million gallons.
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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
City’s facility is approximately 0.50 million gallons per day (“gpd”). A portion of the NTMWD regional sewer 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. As part of the Development, a sewer lift station and force main will be
constructed to take flows west to Slayter Creek, which is planned to service phases 1-3 of the District. Planning and
engineering for service to phases 4-6 are underway.
The City recently 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 required for new
development west of US 75. The temporary treatment plan has been operational since March 2025 and can treat up
to 0.5 mgd, while the reaming phases are finished. In July 2025, the City issued certificates of obligation to fund the
first full phase of the new Hurricane Creek Regional Wastewater Treatment Plant, which is expected to have a
capacity to treat 2 mgd of wastewater, with plans to gradually expand the plant’s capacity to 16 mgd. The City will
use the new plant to treat wastewater for its own residents as well as provide wholesale treatment for the cities of
Van Alstyne and Weston and various water districts in the area.
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. 2025-03-1753 of the City adopted on March
25, 2025 (the “Creation Resolution”), for the purpose of undertaking and financing the cost of certain public
improvements within the District, including the Improvement Area #1 Improvements, 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 Area #1
Improvements. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” 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 Area #1 Improvements 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 – Form of Service and Assessment Plan.”
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THE IMPROVEMENT AREA #1 IMPROVEMENTS
General
The Improvement Area #1 Improvements will be dedicated to the City. Pursuant to the Development
Agreement, the Developer is responsible for the completion of the construction, acquisition, or purchase of the
Improvement Area #1 Improvements.
Pursuant to the CFA Agreement and the Indenture, the City will reimburse the Developer for a portion of
the Actual Costs of the Improvement Area #1 Improvements from proceeds of the Bonds. See “THE
DEVELOPMENT – Development Plan.”
The Improvement Area #1 Improvements, a portion of which are being financed with proceeds of the
Bonds, include street, water, sewer, storm drainage, right of way, and soft costs benefitting only Improvement Area
#1 Assessed Property, as described below.
Streets: Improvements including subgrade stabilization, concrete and reinforcing steel for roadways,
asphalt pavement for roadways, turn lanes, pavers, stamping and staining of concrete, sidewalks, testing,
handicap ramps, and streetlights. All related earthwork, excavation, erosion control, intersections, signage,
traffic control, maintenance bonds, lighting and re-vegetation/landscaping of all disturbed areas within the
right-of-way are included. The street improvements will provide benefit to each Lot within Improvement
Area #1.
Water: Improvements including trench excavation and embedment, trench safety, PVC piping, valves, fire
hydrants, service connections, meter boxes, testing, related earthwork, excavation, erosion control and all
necessary appurtenances required to provide water service to all Lots within Improvement Area #1.
Sewer: Improvements including trench excavation and embedment, trench safety, PVC piping, encasement
pipe, boring, manholes, service connections, testing, related earthwork, excavation, erosion control and all
necessary appurtenances required to provide wastewater service to all Lots within Improvement Area #1.
Storm Drainage: Improvements including earthen channels, swales, ponds curb and inlets, RCP piping
and boxes, headwalls, concrete flumes, manholes, junction boxes, rock rip rap, concrete outfalls, and
testing as well as all related earthwork, excavation, erosion control and all necessary appurtenances
required to provide storm drainage for all Lots within Improvement Area #1.
Right of Way: Improvements include right of way required to provide street improvements for all Lots
within Improvement Area #1.
Soft Costs: Costs related to designing, constructing, and installing the Improvement Area #1
Improvements, including land planning and design, City fees, engineering, soil testing, environmental
testing, survey, construction management, contingency, legal fees, and consultant fees.
The total cost of the Improvement Area #1 Improvements is expected to be approximately $27,578,651*.
Proceeds of the bonds in the approximate amount of $27,473,505* will be used to pay the Developer for a portion of
such costs. The remaining costs in the approximate amount of $105,146* will be paid by the Developer, without
reimbursement by the City. In addition to costs to construct the Improvement Area #1 Improvements, the Developer
is responsible for paying, without reimbursement by the City, for the cost of the Private Improvements in the
approximate amount of $6,939,433 and costs of the Improvement Area #1 Amenities in the approximate amount of
$8,350,000. As of December 31, 2025, the Developer has spent approximately $1,427,752 on construction of the
Improvement Area #1 Improvements, $658,252 on construction of the Private Improvements, and $8,350,000 on
construction of the Improvement Area#1 Amenities. See “SOURCES AND USES OF FUNDS,” “THE
IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE DEVELOPMENT – Amenities and Private
Improvements,” and “APPENDIX C – Form of Service and Assessment Plan.”
* Preliminary, subject to change.
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The following table reflects the estimated total costs of the Improvement Area #1 Improvements.
Type of Improvement Area #1 Improvement Costs
Streets $ 9,627,483
Wate 2,285,898
Sewe 2,797,636
Storm Draina e 3,583,566
Ri ht of Wa 3,696,000
Soft Costs 5,588,068
Total $27,578,651
Ownership and Maintenance of Improvement Area #1 Improvements
The Improvement Area #1 Improvements will be dedicated to and accepted by 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 Area #1 Improvements constructed and conveyed, as outlined in the Service and
Assessment Plan.
THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS
The Improvement Area #1 Major Improvements include the following public improvements, the costs of
which are expected to be reimbursed to the Developer from impact fees collected within the District pursuant to an
Eligible Infrastructure Grant. See THE DEVELOPMENT – Payment of Costs of the Improvement Area #1 Major
Improvements” and “APPENDIX F – Development Agreement.”
Water. Water improvements include on-site water lines ranging in size from 12” to 16”, as depicted on
Exhibit G to the Development Agreement.
Sewer. Sewer improvements include offsite trunk lines ranging in size from 10” to 24” and a 16” force
main along FM 455, as depicted on Exhibit F-1 to the Development Agreement.
Soft Costs. Costs related to designing, constructing, and installing the Improvement Area #1 Major
Improvements, including [land planning and design, City fees, engineering, soil testing, survey, construction
management, contingency, legal fees, and consultant fees].
The following table reflects the expected costs of the Improvement Area #1 Major Improvements.
EXPECTED COSTS OF THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS
Expected Cos
Wate $ 2,218,535
Sewe 6,100,420
Soft Costs 3,078,013
Total $11,396,968
Source: The Developer
Ownership and Maintenance of Improvement Area #1 Major Improvements
The Improvement Area #1 Major Improvements will be dedicated to and accepted by 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 Area #1 Major Improvements constructed and conveyed.
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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.
Development Plan
The District is an approximately 1,123-acre master-planned community expected to be developed in part by
Tellus Texas and in part by Sherley Partners. Tellus Texas has agreed to purchase approximately 978 acres of land
constituting the Tellus Tract from Sherley Partners in phases as development progresses. Sherley Partners expects
to retain approximately 150 acres in the District constituting the Sherley Retained Tract. In December 2024, Tellus
Texas purchased approximately 200 of such acres, including approximately 135 acres constituting Improvement
Area #1 of the District and approximately 65 acres constituting The Farm, for a purchase price of $10,733,053,
using cash on hand. Tellus Texas expects to close on an additional 50 acres pursuant to the Sherley PSA in or about
March 2026, which takedown is expected to include approximately 3 acres to be conveyed to the City for use as a
fire station and water tower site or sites, 0.2 acres to be conveyed to the City for a sewer pump station, and
approximately 46.8 acres for phase 2 of the Development.
The Developer expects to develop the single-family residential portion of the Tellus Tract in six phases to
include a total of approximately 2,578 single-family residential lots, as well as the North Amenity Center, the South
Amenity Center, and other amenities throughout the District. The Developer will also develop The Farm as a
working farm-style amenity center with operational farming facilities See “THE DEVELOPMENT – Amenities and
Private Improvements” and “– Development Agreement.”
The Developer expects Sherley Partners to develop the Sherley Retained Tract as approximately 7 single-
family residential lots, 55 cottage home lots, 400 multifamily units, and 260,000 square feet of commercial space.
The Tellus Tract and the Sherley Retained Tract together constitute the “Development.” See the map and Concept
Plan for the District on pages iv-v.
The Developer began development of Improvement Area #1 in November 2025 and expects it to be
completed in the fourth quarter of 2026. A portion of the proceeds of the Bonds is expected to be used to reimburse
the Developer for all* of the Actual Costs of the Improvement Area #1 Improvements. To the extent proceeds of the
Bonds are insufficient to pay all such costs, the balance will be paid by the Developer, without reimbursement by the
City. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “– Expected Build-out, Absorption, and Home
Prices in the Tellus Tract,” and “APPENDIX C – Form of Service and Assessment Plan.”
Payment of Costs of the Improvement Area #1 Major Improvements
The costs of the Improvement Area #1 Major Improvements are expected to be approximately $11,396,968.
The costs of the Improvement Area #1 Major Improvements are expected to be reimbursed to the Developer
pursuant to the Eligible Infrastructure Grant funded from impact fees collected in Improvement Area #1 of the
District. As of December 31, 2025, the Developer has spent approximately $1,457,752 on costs of construction of
the Improvement Area #1 Major Improvements using proceeds of the Revolving Credit Agreement. See “THE
IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS” and “– Development Agreement.”
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* Preliminary, subject to change.
40
Lot Purchase and Sale Agreements
Improvement Area #1 is expected to include 418 single-family residential lots, as follows:
Lot Size Improvement Area #1
45’ 76
50’ 166
60’ 143
70’ 33
Total 418
The Developer expects to complete construction of the Improvement Area #1 Improvements and other
improvements necessary for delivery of lots in Improvement Area #1 in the fourth quarter of 2026. The Developer
expects to complete sales of lots to the Homebuilders in the third quarter of 2027. It is expected that the
Homebuilders will commence construction of homes to begin in the fourth quarter of 2026. The Homebuilders have
made combined Earnest Money Deposits in the total amount of $14,963,385. The Earnest Money Deposits are
unsecured and will be credited towards the purchase prices at the lot closings. Additionally, there are circumstances
described in the lot purchase and sale agreements the occurrence of which may result in the termination of such
agreements.
The following table reflects the terms of the lot purchase and sale agreements with the Homebuilders.
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Builder Lot T e Lot Total Per Lot*** Takedown Schedule
Scott Felder 45’ rear entr 37* $119,250 19 lots 30 da s after substantial com letion “SC”; 19 lots 270 da s after SC
Perry 45’ front entr 39 $119,250 20 lots 30 da s after SC; 19 lots 270 da s after SC
Scott Felder 50’ 41 $132,500
1st closing: lesser of all Phase 1A lots and 21 lots;
2nd Closing: If Phase 1B achieves SC before Phase 1C, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 21 Lots;
If Phase 1B and Phase 1C achieve SC at the same time, within 30 days of Phase 1C SC,
Purchaser shall purchase the amount of Phase 1C Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 21 Lots;
3rd Closing: If Phase 1C achieves SC before Phase 1B: within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing,
Second Closing and Third Closing combined result in Purchaser’s acquisition of 21 Lots;
Final Closin : 20 lots 270 da s after 1st closin
Brightland 50’ 82 $132,500
1st closing: lesser of all Phase 1A lots and 41 lots;
2nd Closing: If Phase 1B achieves SC before Phase 1C, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 41 Lots;
If Phase 1B and Phase 1C achieve SC at the same time, within 30 days of Phase 1C SC,
Purchaser shall purchase the amount of Phase 1C Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 41 Lots;
3rd Closing: If Phase 1C achieves SC before Phase 1B: within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing,
Second Closing, and Third Closing combined result in Purchaser’s acquisition of 41 Lots;
4th Closing: 21 lots 270 days after SC
Final Closin : 20 lots 360 da s after 1st closin
Homebound 50’ 42 $132,500
1st closing: lesser of all Phase 1A lots and 21 lots;
2nd Closing: If Phase 1B achieves SC before Phase 1C, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 21 Lots;
If Phase 1B and Phase 1C achieve SC at the same time, within 30 days of Phase 1C SC,
Purchaser shall purchase the amount of Phase 1C Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 21 Lots;
3rd Closing: If Phase 1C achieves SC before Phase 1B, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing,
Second Closing, and Third Closing combined result in Purchaser’s acquisition of 21 Lots;
Final Closing: 21 lots 270 days after 1st closing
Bloomfield** 60’ 68 $96,000 All lots within any completed phase 30 days after SC
Highland 60’ 38 $159,000
1st closing: lesser of all Phase 1A lots and 19 lots;
2nd Closing: If Phase 1B achieves SC before Phase 1C, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 19 Lots;
If Phase 1B and Phase 1C achieve SC at the same time, within 30 days of Phase 1C SC,
42
Purchaser shall purchase the amount of Phase 1C Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 19 Lots;
3rd Closing: If Phase 1B and Phase 1C do not achieve SC simultaneously, within 30 days of
the later of Phase 1B SC and Phase 1C SC, Purchaser shall purchase the amount of Phase 1B
Lots needed such that the Initial Closing, Second Closing, and Third Closing combined result
in Purchaser’s acquisition of 19 Lots;
Final Closing: 19 lots 270 days after 1st closing
Perry 60’ 37 $159,000
1st closing: lesser of all Phase 1A lots and 19 lots;
2nd Closing: If Phase 1B achieves SC before Phase 1C, within 30 days of Phase 1B SC,
Purchaser shall purchase the amount of Phase 1B Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 19 Lots;
If Phase 1B and Phase 1C achieve SC at the same time, within 30 days of Phase 1C SC,
Purchaser shall purchase the amount of Phase 1C Lots needed such that the Initial Closing and
Second Closing combined result in Purchaser’s acquisition of 19 Lots;
3rd Closing: If Phase 1B and Phase 1C do not achieve SC simultaneously, within 30 days of
the later of Phase 1B SC and Phase 1C SC, Purchaser shall purchase the amount of Phase 1B
Lots needed such that the Initial Closing, Second Closing, and Third Closing combined result
in Purchaser’s acquisition of 19 Lots;
Final Closing: 18 lots 270 days after 1st closing
Drees 70’ 33 $185,500 17 lots 30 days after SC; 16 lots 270 days after SC
Total 417****
* The Developer expects to amend its contracts with Scott Felder to reduce the lot count for 45’ lots by one lot and increase the lot count for 50’ lots by one lot. Such
amendments will result in all 418 lots within Improvement Area #1 being under contract with Homebuilders.
** The reduced price and fees under the Bloomfield contract are due to Bloomfield’s partnership in the development.
*** Except for the Bloomfield contract, the contracts include a 6% annual escalator, marketing fee of $1,500, amenity fee of $4,500, and a farm amenity fee of $1,500.
The Bloomfield contract includes a 5% annual escalator, marketing fee of $1,500, and amenity fee of $1,500.
**** One 50’ lot is currentl uncontracted.
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The expected schedule for sale of lots to the Homebuilders pursuant to the Lot Purchase and Sale
Agreements are shown in the following table.
Expected Absorption of Lots to Homebuilders by Lot Type in Improvement Area #1
Expected Sale Date 45’ Lo 50’ Lo 60’ Lo 70’ Lo Total Lots
2026 39 83 106 17 245
2027 37 83 37 16 173
76 166 143 33 418
The Developer’s expectations regarding absorption of homes in Improvement Area #1 is shown in the
following table:
Expected Absorption of Lots to Homeowners by Lot Type in Improvement Area #1
Expected Sale Date 45’ Lo 50’ Lo 60’ Lo 70’ Lo Total Lots
2027 59 72 72 24 227
2028 17 72 71 9 169
2029 22 22
76 166 143 33 418
Expected Buildout, Absorption, and Home Prices in the Tellus Tract
The following tables reflect the Developer’s expectations with respect to lot buildout and absorption timing
and lot and home prices, respectively, in the Tellus Tract.
Expected Buildout and Absorption of Lots in the Tellus Tract
Lot Size
Number
of Lots
Expected
Infrastructure
Completion
Date
Expected Initial
Sale Date of
Single-Family
Lots to
Homebuilders
Expected Final Sale
Date of Single-Family
Lots to Homebuilders
Expected Initial Sale
Date of Single-
Family Homes to
Homeowners
Improvement Area #1
45’-70’ 418 Q4 2026 Q4 2026 Q3 2027 Q1 2027
Improvement Area #2
40’-100’ 355 Q4 2027 Q4 2027 Q1 2029 Q1 2028
Improvement Area #3
40’-100’ 422 Q1 2029 Q1 2029 Q2 2030 Q2 2029
Improvement Area #4
40’-100’ 431 Q2 2030 Q2 2030 Q2 2031 Q3 2029
Improvement Area #5
Townhome-
100’
500 Q3 2031 Q3 2031 Q1 2033 Q4 2031
Improvement Area #6
Townhome-
100’
452 Q4 2032 Q4 2032 Q2 2034 Q1 2033
2,578
44
Expected Lot and Home Prices in the Tellus Tract
Lot Type
Number
of Lots Expected Lot Prices
Expected Home
Prices
Improvement Area #1 45’ Rear Entr 37 $119,250 (1) $477,000
45’ Front Entr 39 $119,250 (1) $477,000
50’ 166 $132,500 (1) $530,000
60’ 143 $159,000 (1) $636,000
70’ 33 $185,500 (1) $742,000
418
Improvement Area #2 40’ 53 $106,000 $424,000
50’ 111 $132,500 $530,000
60’ 117 $159,000 $636,000
70’ 45 $185,500 $742,000
100’ 29 $240,000 $960,000
355
Improvement Area #3 40’ 83 $106,000 $424,000
50’ 145 $132,500 $530,000
60’ 123 $159,000 $636,000
70’ 43 $185,500 $742,000
100’ 28 $240,000 $960,000
422
Improvement Area #4 40’ 88 $106,000 $424,000
50’ 126 $132,500 $530,000
60’ 131 $159,000 $636,000
70’ 48 $185,500 $742,000
100’ 38 $240,000 $960,000
431
Improvement Area #5 Townhome 65 $ 80,000 $320,000
40’ 66 $106,000 $424,000
50’ 124 $132,500 $530,000
60’ 141 $159,000 $636,000
70’ 65 $185,500 $742,000
100’ 39 $240,000 $960,000
500
Improvement Area #6 Townhome 55 $ 80,000 $320,000
40’ 131 $106,000 $424,000
50’ 102 $132,500 $530,000
60’ 100 $159,000 $636,000
70’ 38 $185,500 $742,000
100’ 26 $240,000 $960,000
452
2,578
(1) Excludes contractual price escalations.
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Amenities and Private Improvements
In addition to the Improvement Area #1 Improvements, the Development Agreement obligates the
Developer to construct the Amenities, as follows:
The North Amenity Center, located in Improvement Area #1, on a minimum 2-acre site, to include
at least 4,000 square feet of an air-conditioned space in one or more buildings, a minimum of
3,500 square feet swimming pools (one or more), bathrooms, a playground and open recreation
area;
The South Amenity Center to include an amenity center building or shaded structure, bathrooms,
playground and open recreation area;
The Farm, to include operational farming facilities and a minimum 5-acre programmed site
adjacent to the farm, to include, at a minimum, a structure for agricultural education, a multi-use
field area for events, and a parking lot; and
Four of the following nine amenity options:
o 2-5-year-old playground;
o 5-8-year-old playground;
o Sand volleyball court, tennis court, or pickleball court;
o Basketball court;
o Trails and open space;
o Outdoor workout equipment along hike and bike trails;
o Three or more pocket parks, each at least 1 acre;
o Dog park; or
o Park benches, trash cans, and pet stations along the trail and in the dog park.
The Amenities will be owned, operated, and maintained by the HOA. The HOA will provide for the
ongoing operation, maintenance, and repair of the Amenities through the administration of a property owner’s
association fee to be paid by each lot owner within the District. See “OVERLAPPING TAXES AND DEBT –
Homeowners’ Association Dues.”
The Developer expects the cost of the North Amenity Center to be $11.5 million, the cost of the South
Amenity Center to be $8.5 million, and the total cost of the Farm to be $5 million. It is expected that the cost of the
portion of the Farm to be constructed with Improvement Area #1 will be approximately $750,000 and the cost of the
park, open space and trail improvements to be constructed within Improvement Area #1 (collectively with the
portion of the Farm to be constructed, the “Improvement Area #1 Amenities”) will be $7.6 million.
In addition, the Developer is responsible for paying, without reimbursement by the City, for costs of the
“Private Improvements,” consisting of approximately $3,237,511 of improvements necessary to deliver finished lots
and not constituting Improvement Area #1 Improvements, and approximately $3,701,922 for landscaping,
hardscaping, trails, and similar improvements. The Private Improvements will be owned, operated, and maintained
by the HOA.
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Future Improvement Area Bonds
The Developer expects to request the City to issue Future Improvement Area Bonds to finance the costs of
the public improvements benefitting the Future Improvement Area. The estimated costs of the public improvements
benefitting the Future Improvement Area will be determined as development progresses, and the Service and
Assessment Plan will be updated accordingly. Such Future Improvement Area Bonds will be secured by separate
assessments levied pursuant to the PID Act on assessable property within the Future Improvement Area. The
Developer anticipates that Future Improvement Area Bonds will be issued over a six-year period.
The Bonds and any Future Improvement Area Bonds issued by the City are separate and distinct issues of
securities. The City reserves the right to issue Future Improvement Area Bonds for any purpose permitted by the
PID Act, including those described above.
Development Agreement
Pursuant to the Sherley Farms Development Agreement by and among the City, Tellus Texas, and Sherley
Partners, effective as of December 17, 2024 (the “Development Agreement”), the Developer has the right to
construct public improvements for the District, including the Improvement Area #1 Improvements, 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 assessments and/or PID Bonds (defined below). 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 maximum equivalent tax rate, including the PID Assessments associated with the PID Bonds and
all overlapping taxing jurisdictions, may not exceed $1.35 per $100 taxable assessed valuation without prior written
consent of the City; and (ii) the ratio of the appraised value of the property being financed, as confirmed by an
independent appraisal, to the par amount of the PID Bonds proposed to be issued with respect to such property must
be at least 2:1, unless a lower ratio is approved by the City. See “APPENDIX F – Development Agreement.”
In addition to construction of the Improvement Area #1 Improvements, the Development Agreement
obligates the Developer to construct the Major Improvements, the Amenities, the Private Improvements, and hike
and bike trails. The Developer must also convey a site to Anna ISD for use as a school and convey to the City (i) up
to 1.5 acres for an elevated water storage tank, or (ii) 3 acres for a fire station, at the City’s option. See
“APPENDIX F – Development Agreement.”
In addition, the Development Agreement obligates the City to expand its Slayter Creek wastewater
treatment plant to 0.975 mgd capacity and construct approximately 26,000 linear feet of parallel sewer lines. See
“THE CITY – Water and Wastewater.”
In the Development Agreement, the City agreed to create TIRZ No. 9 and dedicate the TIRZ No. 9 Annual
Credit Amount on a lot for a period of up to 30 years from the date the Improvement Area #1 Assessments are
levied to reduce the amount of the Improvement Area #1 Assessments levied on property within TIRZ No. 9. See
“SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 9 Annual Credit
Amount.”
CFA Agreement
The City and the Developer expect to enter into the CFA Agreement, effective February 24, 2026, which
will provide, in part, for the deposit of a portion of the proceeds of the Bonds for payment of costs of the
Improvement Area #1 Improvements, and other matters related thereto. Pursuant to the CFA Agreement, the
Developer is responsible for overseeing the construction and development of the Improvement Area #1
Improvements in accordance with the Development Agreement and the CFA Agreement. The City’s obligation to
pay or reimburse the Developer for the costs of the Improvement Area #1 Improvements is limited to the lesser of
the Actual Costs or Budgeted Costs, and any Cost Overruns (as each of such terms are defined in the CFA
Agreement) are the Developer’s responsibility. See “APPENDIX G – Form of CFA Agreement.”
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Zoning/Permitting
The District is currently zoned as a planned development district pursuant to Ordinance No. 1137-2025-02
adopted by the City Council on February 25, 2025 (the “PDD Ordinance”). The PDD Ordinance allows certain
restricted commercial, multi-use, multifamily residential, 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.
Education
Students in the District will attend schools in Anna ISD. Anna ISD serves the City and other portions of
Collin County. Anna ISD 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 Rosamond-Sherley
Elementary School (approximately 1 mile from the District), Slayter Creek Middle School (approximately 2 miles
from the District), and Anna High School (approximately 2.5 miles from the District).
GreatSchools.org does not currently rate Rosamond-Sherley Elementary School. GreatSchools.org
currently rates Slayter Creek Middle School 3 out of 10, and Anna High School 6 out of 10. According to the Texas
Education Agency annual accountability ratings, Anna ISD was rated “C,” Rosamond-Shelly Elementary School
was rated “D,” Slayter Creek Middle School was rated “C,” and Anna High School was rated “A” for the 2024-25
school year. (The categories for public school districts and public schools are A, B, C, D, and F.)
It is noted that the ratings information provided for Slayter Creek Middle School is mistakenly shown on
the GreatSchools.org website as “Anna Middle School.”
Pursuant to the Development Agreement, the Developer will convey a site for an elementary school to
Anna ISD. However, the location of the site has not been determined.
Environmental
A Phase One Environmental Site Assessment (the “Phase One ESA”) of property including the District,
dated January 9, 2024, was completed by Reed Engineering Group (the “Report”). According to the Report, no
recognized environmental conditions, controlled recognized environmental conditions, or significant data gaps were
revealed in connection with such property. The Report noted various onsite containers and drums on the property
that were considered to be de minimis conditions and recommended removal of the containers and drums prior to
purchase of the property. The Developer is following such recommendations as it purchases portions of such
property.
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
property within the District.
Existing Mineral Rights and Other Third-Party Property Rights
There are certain mineral rights reservations of prior owners of real property within the Property (the
“Mineral Owners”) pursuant to one or more deeds in the chain of title for the Property. While there is currently no
drilling or exploration of minerals, the Developer cannot predict whether the Mineral Owners will take new action in
the future to explore or develop the above-described mineral rights. The Developer is not aware of any real property
(including mineral rights) owned by the Mineral Owners adjacent to the District. Certain rules and regulations of
the Texas Railroad Commission may restrict the ability of the Mineral Owners to explore or develop the property
due to well density, acreage, or location issues.
Although the Developer does not expect the rights of the Mineral Owners to have a material adverse effect
on the Development, the property within the District, or the ability of landowners within the District to pay
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Improvement Area #1 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 48085C0160J (June 2, 2009), the property in Improvement Area #1 of the
District lies outside the range of both the 100-year and 500-year floodplains.
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 Improvement Area #1 of the District. See “THE CITY – Water and
Wastewater.”
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 was created for the sole purpose of owning, managing, developing, and ultimately
conveying the Tellus Tract to third parties, as described under the caption “THE DEVELOPMENT.” The
Developer is a Texas limited liability company, the primary assets of which are the real property constituting
Improvement Area #1 of the District and The Farm. The Developer will have no source of funds with which to pay
Improvement Area #1 Assessments or taxes levied by the City or any other taxing entity other than funds resulting
from the sale of lots within Improvement Area #1, reimbursements from the City pursuant to the CFA Agreement,
contributions from its equity partners, and third-party banking sources. The Developer’s ability to make full and
timely payments of Improvement Area #1 Assessments will directly affect the City’s ability to meet its obligation to
make payments on the Bonds.
The sole member and manager of the Developer is Tellus–Anna, LLC, a Texas limited liability company.
The Developer was created to own and manage the District. Under the Developer’s company agreement, the
Developer has the duty and obligation to, among other things, develop, manage, operate, and maintain the property
within the District as it is purchased. Both the Developer and its member/manager are part of a larger group of
49
entities managed in part by Tellus Group Operations LLC, a Delaware limited liability company (“Tellus Group”), a
real estate investment firm located in North Dallas, Texas, focused on residential and mixed-use land development
with a primary focus in master-planned, amenity-rich lifestyle communities.
Description of Past and Current Projects of the Developer
The following is a brief sampling of past and current development projects of the executive team of the
Tellus Group:
Pro ect Name Location Acrea e No. of Units Descri tion
Meraki Forney, TX 1,000 2,700 Maste -lanned community SFA, mixe -use
Windsong Ranch Prosper, TX 2,100 3,175 Maste -lanned community SFA, mixe -use
Paloma Creek Aubrey, TX 1,200 5,500 Worked with Provident Realty Advisers on the
limited partner/equity side - involved Fresh Water
Su l District underwritin and bond issues
Woodforest Montgomery
County, TX
3,000 5,000 Worked with Johnson Development on the limited
partner/equity side - involved Municipal Utility
District underwritin and bond issues
Boot Ranch Fredericksburg,
TX
2,000 500 Master-planned private golf club community SFA
Various DFW Metroplex 1,200 4,100 Separate smaller projects of 100 to 300 lots around
the DFW Metroplex
Angel Fire Resort Angel Fire, NM 22,000 20,000 Master-planned resort community: SFR Condo,
Ski resort, Golf Course, Country Club, Property
management, Hotel, Timeshare, Utility compan
Ritz Carlton Golf Club
and Residences Dove
Mountain
Marana, AZ 950 500 Master-planned community SFA, mixed-use, golf
course
Silverwoo Hes eria, CA 9,500 15,000 Maste -lanned communit SFA, mixe -use
The Grove College Grove,
TN
1,120 770 Master-planned private golf club community SFA,
mixe -use
Rollin Hills Ranch Chula Vista, CA 606.8 2,400 Maste -lanned communit SFA, mixe -use
Summerly Lake Elsinore,
CA
706.7 1482 Master-planned community SFA, mixed-use
Village 7 - Village of
Vista Verde
Chula Vista, CA 288.5 444 Master-planned community SFA, mixed-use
Jupiter Country Club Jupiter, Florida 500 551 Master planned community with golf course (early
in development - circa 2007) (included County
Development District)
Landmark Golf Compan Indian Wells, CA Multiple Golf Development Compan
Mosaic Celina, TX 433.9 1,660 Maste -lanned communit SFA, mixed use
Executive Biographies of Tellus Group
D. Craig Martin, Partner. Craig Martin, CEO and Partner of Tellus Group, has worked in the real estate
industry over 43 years focusing on recapitalizing opportunistic, distressed and value add real estate assets. Craig has
experience purchasing assets from the FDIC, secured creditors and lenders, Federal Bankruptcy trustees, Joint
Provisional Liquidators, as well as public companies and private parties.
Prior to forming Tellus Group, Mr. Martin was the founder of Terra Verde Group and the managing partner
of several large land development partnerships, as well as golf and ski resort developments. Mr. Martin also spent
seven years as a senior member of Robert M. Bass Realty of Fort Worth, Texas. At RMB Realty, Mr. Martin was
active in the underwriting analysis, acquisition, and management of primarily large land development transactions
and directed a team of outside consultants. Other past professional experience includes serving as managing director
of the Landmark Golf Company of Indian Wells, California and managing general partner of the Angel Fire Ski and
Golf Resort in New Mexico.
Mr. Martin began his career as a real estate investment broker for the Staubach Company of Dallas while
studying real estate and finance at the Edwin L. Cox School of Business at Southern Methodist University. Mr.
50
Martin is an active full member of the Urban Land Institute and currently serves on the Community Development
Council (Blue Flight) and is an active member of the Dallas and National Home Builders Associations. Mr. Martin
is the past Chapter Chairman of the YPO Gold Dallas Chapter (2016-2017). Mr. Martin has also served for seven
years on the board of trustees of Liberty Christian School in Argyle, Texas.
David R. Blom, Partner. David Blom, President and Partner of Tellus Group, has experience that
encompasses both financial and development aspects of land development, with an emphasis on single-family
development. He began his career with Republic Bank in Texas in 1983, where he was active in real estate
foreclosures and asset turnaround activities, including the refurbishment and eventual sale of retail shopping centers
and office buildings with a total value exceeding $60 million.
Mr. Blom then joined a private development company in Dallas in 1990, where he served as V.P. – Finance
and then President, presiding over all aspects of the entitlement, development, and sale of over 4,000 single-family
lots across the Dallas-Fort Worth-Arlington Metroplex. Mr. Blom subsequently joined an institutional pension fund
advisor, managing and underwriting large scale projects with a wide range of developers and builders from
Washington D.C. to Florida, with financial commitments totaling over $300 million.
Mr. Blom joined Forest City Enterprises in 2007, establishing the Texas Land Division and underwriting
and acquiring a portfolio of twelve projects in three of the major markets in Texas, with a build-out value of over
$400 million. His responsibilities included underwriting analysis, loan sourcing and negotiation, municipal
entitlements, and builder relationships.
Mr. Blom joined Terra Verde Group in 2012 to manage all aspects of the development and sale of lots and
land in the 2,000-acre master-planned community Windsong Ranch, located in Prosper, Texas, which was acquired
from Forest City. In 2018 Mr. Blom became a partner in Tellus Group in the acquisition of Windsong Ranch from
Terra Verde Group in 2018. The Windsong Ranch executive team created by Terra Verde transitioned to Tellus
Group as part of the acquisition.
Mallorie Wise, Associate Director, Transactions. Mallorie Wise joined Tellus Group in 2025 as Associate
Director of Transactions, bringing a blend of real estate expertise, financial acumen, and project management skills
to the company’s real estate development endeavors. She plays a pivotal role in identifying and evaluating new land
acquisition opportunities, managing financial analysis, underwriting, and overseeing key phases of development
projects from due diligence through closing. Mallorie also supports capital markets activities, negotiates legal
documentation, and collaborates with design and development teams to deliver results for investors and
stakeholders.
Before joining Tellus Group, Mallorie gained extensive experience managing complex real estate projects.
At Provident Realty Advisors, she focused on the development of large-scale master-planned communities,
coordinating budgets, entitlements, marketing, and HOA management. Previously, at U.S. Federal Properties, she
oversaw a pipeline of retail assets nationally, guiding them from site acquisition to sale. Mallorie holds a Master of
Business Administration and Juris Doctor from Tulane University, where she specialized in Real Estate and
graduated with honors. She also earned a Bachelor of Arts in Journalism with distinction from Indiana University.
Her comprehensive background, entrepreneurial spirit, and dedication to delivering value position Mallorie as a key
leader in advancing Tellus Group’s portfolio of innovative and sustainable developments.
Kamille Grey, Vice President Finance & Accounting. Kamille Grey is an accomplished finance and
accounting professional with extensive experience in the commercial real estate industry. She serves as Vice
President of Finance and Accounting for Tellus Group. Previously, she served as VP Controller at Jackson-Shaw
Company in Dallas, Texas, overseeing finance and accounting for a diverse portfolio of commercial real estate
developments.
With expertise in treasury responsibilities, Kamille plays a pivotal role in managing banking relationships,
approving daily activities, and preparing comprehensive financial forecasts. She ensures that all financial
transactions are properly accounted for, oversees annual audits, and manages partner reporting, including capital
calls and distribution schedules. Kamille’s previous experience includes serving as an Accounting Manager at
Provident Realty Advisors, where she successfully managed a software conversion that added efficiency to the team
51
and oversaw the accounting for multiple real estate developments. Her commitment to accuracy and efficiency was
evident through her oversight of financial report packages sent to lenders and partners, as well as her involvement in
annual audits. Her additional professional experience includes a significant role as Accounting Manager at
Brookfield Properties Retail, overseeing accounting for 12 retail mall properties and enhancing financial reporting
processes. Kamille’s strong analytical skills and comprehensive understanding of financial principles make her a
vital team member in navigating the complexities of the real estate industry.
Kristin Sherrill, Director of Operations. Kristin Sherrill joined Tellus Group in early 2022 as the
company’s Architectural & Marketing Manager. Her responsibilities include building and managing effective
relationships with key stakeholders such as builders, realtors, and community lifestyle management groups and
helping coordinate the efforts of the Tellus development and land acquisition teams with onsite contractors, outside
legal associates, and marketing agencies. She contributes to the company’s short and long-term planning and
assessment of goals and financial expenditures. Her extensive residential development operations and marketing
background make her uniquely qualified for the Director of Operations position. She has experience with and will
continue to oversee all architectural review processes for the company’s numerous residential projects, and oversee
the coordination, planning, and implementation of all marketing outreach.
Kristin began her career on the marketing side as a digital marketing specialist for a major regional
newspaper. Later she served as marketing director for Texas Health Harris Methodist Hospital. During her tenure,
Kristin represented the hospital with area business leaders, the community, and the media. She also focused on
maintaining and enhancing the hospital’s internal and external communications. In July 2019, Kristin took her
expertise in communications to work for Republic Property Group, where she was a Field Marketing Specialist. Her
duties included relationship development with stakeholders in the builder and realtor communities, hosting sales
meetings with key associates, serving as a company delegate with civic groups, and providing brand and marketing
support. Kristin later moved to Community Operations for RPG, where she collaborated with builder teams on daily
operations, including inspections, oversaw architectural reviews, submissions, approvals, and the builder inventory
portal. She also led community relationships with the HOA’s various community groups, managed developer
communications with municipal departments and key employees, and helped coordinate marketing efforts.
Kristin earned her degree in Strategic Communications from Texas Christian University. Additionally, she
possesses many technical certifications and skills in real estate management, mapping, and development software,
outbound marketing website software, and financial and graphics programs.
Tina Sauseda, Vice President – Operations. As Vice President of Operations Tellus Group LLC, Ms.
Sauseda is part of the development team at Windsong Ranch. She oversees various aspects of the business including
contracts administration working with Windsong Ranch homebuilders and their title companies managing lot
purchase agreements and lot sales. She also coordinates contracts with on-site contractors, including draws for
specific projects. Her responsibilities also include working closely with outside legal associates and human
resources management for the Tellus staff. In addition, Ms. Sauseda works with the management teams of both the
Windsong Ranch Community Association and the Mosaic Community Association and serves on the board of each.
Ms. Sauseda began her career in Houston in 1976 working in the real estate appraisal industry. She
transitioned into the oil and gas industry working with companies such as Exxon & Phillips Petroleum. She then
joined The Stanford Group which specialized in residential and commercial real estate development, management
and interior design. Her background includes numerous years in advertising and PR with The Bloom Companies and
Gleason/Calise Associates. Most recently she worked on the homebuilder side with Darling Homes/Taylor Morrison
until transitioning to the developer side working with the Tellus Group.
Andre Ferrari, Chief Operating Officer. Andre Ferrari joined the Tellus Group in 2022. Mr. Ferrari is
responsible for identifying and evaluating real estate acquisition opportunities as they relate to the company’s
overall expansion goals. He also works alongside the rest of the team planning new communities, collaborating with
municipalities, interfacing with existing and potential future homebuilder partners, capitalizing developments,
structuring joint ventures, managing current developments and coordinating investor communications.
Prior to joining Tellus Group, Mr. Ferrari advised real estate owners and operators on capitalization of their
real estate assets and projects at JLL Capital Markets (formerly HFF). Mr. Ferrari’s clients included pension funds,
52
developers, investment managers, family offices, and a variety of real estate investment vehicles. He primarily
focused on joint venture equity and construction financing for residential developments. During his time at JLL, Mr.
Ferrari was involved in over $2.5 billion of closed transactions across more than 20 states.
Prior to his time at JLL, Mr. Ferrari was an associate attorney at the international law firm Haynes and
Boone, where he advised clients on their real estate and merger and acquisition transactions. During his time at
Haynes and Boone, Mr. Ferrari advised clients on over $3.5 billion in closed transactions.
Mr. Ferrari received his undergraduate degree in finance from the University of Central Florida and his
Juris Doctor from the University of Virginia School of Law. He is a licensed attorney in the State of Texas. He is
also an active member of The Real Estate Council (TREC) and formerly served on its Young Guns Board. Mr.
Ferrari’s interest in residential development originated prior to obtaining his J.D. during his time with Hicks Trans
American Partners, where he worked on master-planned community developments in the Patagonia region of
Argentina. Mr. Ferrari is originally from Bogota, Colombia, and is bilingual.
Justin Craig, Vice President – Planning/Entitlement. Currently, Justin Craig serves as Vice President –
Planning/Entitlement for Tellus Group. His position encompasses the management of on-site development activities
and navigating jurisdictional permitting. He also leads the coordination and establishment of entitlements for Meraki
through Kaufman County and Forney and for future acquisitions. Mr. Craig was hired in 2016 by Terra Verde
Group as Development Manager prior to the transition to Tellus Group.
Mr. Craig’s background includes 21 years of experience in the real estate development industry spanning
project development, management, acquisition, and disposition with an emphasis in real estate entitlements. He
began his career in Southern California working for a large master plan developer as a project coordinator working
his way up through the financial downturn to the position of Vice President focused on forward planning,
entitlement, project design management, and managing lot sales with revenues upwards of $200 million dollars.
He then transitioned to a consultancy role working with an investment fund and multiple developers,
including his previous employer, focusing on entitlement, project due diligence, underwriting evaluation, creating
cost to complete budgets, managing various entitlement related efforts, and navigating jurisdictional permit
compliance issues. This eventually led to a role with a multi-family apartment developer managing the underwriting
and entitling of two redevelopment multi-family apartment projects, one $96 million-dollar project located in the
City of San Diego and another $78 million-dollar project in the City of Santa Clarita, the former requiring
significant community outreach and governmental regulatory navigation.
Mr. Craig earned his Bachelor of Business Administration degree from the University of San Diego.
Kris Wilson, Vice President – Development. Kris Wilson began his career in Dallas working for a
landscape architecture and planning firm, concentrating on the planning and designing of master-planned
communities in the Dallas-Fort Worth area. Later, he transitioned to the construction industry focusing on aquatic
amenity construction then structural steel and ornamental metals when he worked as a project manager with a team
that worked on the Dallas-Fort Worth Terminal Rehabilitation Project. In 2013 Mr. Wilson joined the Tellus Group
to work with the Windsong Ranch team.
As Vice President – Development, Mr. Wilson oversees all aspects of construction, from underground
utilities to lot completion. His responsibilities include creating and managing construction schedules, managing
subcontractors, and performing quality control on all aspects of development. In addition to lot development, his
focus has been on the construction and delivery of amenities such as a Mountain Bike Course, Disc Golf Course,
Community Garden, Basketball Court, Dog Park, The Lagoon at Windsong Ranch (a five-acre, freshwater, clear
tropical lagoon), and the lazy river planned for the District. Mr. Wilson oversees the implementation and
management of onsite wildlife management plans, works with the onsite farming and ranching operations, and
coordinates with homeowner associations regarding amenity repairs and maintenance.
Mr. Wilson graduated from Louisiana State University with a Bachelor’s degree in landscape architecture.
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History and Financing of the District
Property Acquisition. In December 2024, the Developer purchased approximately 200 acres from Sherley
Partners, including approximately 135 acres consisting of Improvement Area #1 of the District and approximately
65 acres consisting of The Farm for a purchase price of $10,733,053, using cash on hand.
Development Financing. The Developer has entered into a Loan and Security Agreement, dated as of
December 18, 2025 (the “Revolving Credit Agreement”), with Third Coast Bank, a Texas state bank, providing for
loans in a combined maximum amount of equal to the lesser of (i) $26,000,000, and (ii) 65% of the value of the
improvements to The Farm (currently equal to approximately $ ). The Revolving Credit Agreement is
secured by a deed of trust on land constituting The Farm and matures on July 1, 2028. As of December 31, 2025,
the Developer had loans outstanding in the amount of [$364,688.13]. The Developer may repay the outstanding
portion of the Revolving Credit Agreement from any available resources, including revenue generated from sales of
developed lots in the District.
The Revolving Credit Agreement imposes a number of conditions upon the Developer’s right to obtain
loans. If the Developer were unable to satisfy such conditions, release of funds from the Revolving Credit
Agreement and the construction of the Improvement Area #1 Improvements could be delayed or prevented entirely,
which would adversely affect the security for the Bonds.
There are no liens against property within Improvement Area #1 of the District. The PID Act provides that
the Assessment Lien is a first and prior lien against the Improvement Area #1 Assessed Property and is superior to
all other liens and claims except liens or claims for state, county, school district, or municipality ad valorem taxes.
Sufficiency of Developer’s Financing. According to the Developer, the Developer’s available financing
sources are sufficient to fund the total budgeted costs of the Improvement Area #1 Improvements in the approximate
amount of $27,578,651, the costs of the Improvement Area #1 Major Improvements in the approximate amount of
$11,396,968, the costs of the Improvement Area #1 Amenities in the approximate amount of $8,350,000, and the
costs of the Private Improvements in the approximate amount of $6,939,433. The Developer’s financing sources
include the Revolving Credit Agreement, the Earnest Money Deposits, the net proceeds of the Bonds in the
approximate amount of $27,473,505*, and Developer equity. See “THE IMPROVEMENT AREA #1
IMPROVEMENTS,” “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” “THE DEVELOPMENT –
Amenities and Private Improvements.”
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
* Preliminary, subject to change.
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• 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.
APPRAISAL
General. Peyco Southwest Realty, Inc. (the “Appraiser”), prepared an appraisal report for the City dated
, 2026, and effective as of December 1, 2026 , based upon a physical inspection of Improvement Area #1 of
the District conducted on October 13, 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 #1 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 prospective market value of the fee simple interests of the
Improvement Area #1 Assessed Property. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.”
The Appraisal does not reflect the value of Improvement Area #1 of the District as if sold to a single
purchaser in a single transaction. The Appraisal provides the fee simple estate values for Improvement Area #1 of
the District. See “APPENDIX H – Appraisal.”
The prospective market value estimate for the Improvement Area #1 Assessed Property using the
methodologies described in the Appraisal and subject to the limiting conditions and assumptions set forth in the
Appraisal, as of December 1, 2026, is $59,372,000 ($142,000/lot).
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. See “BONDHOLDERS’ RISKS – Use of Appraisal.”
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.
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.
THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY
FROM A FIRST LIEN ON, SECURITY INTEREST IN, AND PLEDGE OF THE TRUST ESTATE, AS
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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 TRUST ESTATE 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 ASSETS 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 ASSETS OF THE CITY OTHER THAN THE TRUST
ESTATE.
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. See “– Limited Secondary Market for 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. See “–
No Credit Rating.”
Deemed Representations and Acknowledgment by Initial Purchasers
Each Initial Purchaser 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 each Initial
Purchaser, 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 Initial
Purchaser can afford a complete loss of its investment in the Bonds.
General Factors relating to Payment of the Bonds
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 Area #1 to pay Improvement Area #1 Assessments levied by the City, (b) cash flow delays associated
with the institution of foreclosure and enforcement proceedings against property within Improvement Area #1, (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 property within the District, including Improvement Area #1, it
being understood that poor economic conditions within the City, State, and region may slow the assumed pace of
sales of such property.
The rate of development of the property in the District, including Improvement Area #1, is directly related
to the vitality of the residential housing industry. In the event that the sale of the land within Improvement Area #1
should proceed more slowly than expected and the Developer is unable to pay the Improvement Area #1
Assessments, only the value of the Improvement Area #1 Assessed Property, 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 Area #1. 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.
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Assessment Limitations
Improvement Area #1 Annual Installments of Improvement Area #1 Assessments are billed to owners of
Improvement Area #1 Assessed Property. Improvement Area #1 Annual Installments are due and payable, and bear
the same penalties and interest for non-payment, as ad valorem taxes as described under “ASSESSMENT
PROCEDURES.” Additionally, Improvement Area #1 Annual Installments established by the Service and
Assessment Plan correspond in number and proportionate amount to the number of installments and principal
amounts of the Bonds maturing in each year, interest, and the Annual Collection Costs 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 Improvement Area #1 Annual Installments of Improvement Area #1 Assessments in the
future.
In order to pay debt service on the Bonds, it is necessary that Improvement Area #1 Annual Installments
are paid in a timely manner. Due to the lack of predictability in the collection of Improvement Area #1 Annual
Installments, the City has established a Reserve Account in the Reserve Fund, to be funded from the proceeds of the
Bonds, to cover delinquencies. The Improvement Area #1 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 Area #1, any
Improvement Area #1 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
Improvement Area #1 Assessments, the liens securing such delinquent ad valorem taxes and delinquent
Improvement Area #1 Assessments would likely be extinguished. Any remaining unpaid balance of the delinquent
Improvement Area #1 Assessments would then be an unsecured personal liability of the original property owner.
Based upon the language of Texas Local Government Code, Section 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
Improvement Area #1 Annual Installments 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 Section
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 Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon if any
Pre-existing Homestead Rights were properly claimed prior to the adoption of the Assessment Ordinance for as long
as such rights are maintained on the property. It is unclear under State 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 State 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 Assessment Ordinance, no such homestead rights will have been claimed. Furthermore, the
Developer is not eligible to claim homestead rights and the Developer has represented that it will own all property
within Improvement Area #1 of the District as of the date of adoption of the Assessment Ordinance. Consequently,
there are and can be no Pre-existing Homestead Rights on the Improvement Area #1 Assessed Property superior to
the Assessment Lien and, therefore, the Assessment Liens may be foreclosed upon by the City.
Failure by owners of the Improvement Area #1 Assessed Property to pay Improvement Area #1 Annual
Installments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or the inability of the City
to sell parcels of Improvement Area #1 Assessed Property which have been subject to foreclosure proceedings for
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amounts sufficient to cover the delinquent installments of Improvement Area #1 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 IMPROVEMENT AREA #1 ASSESSMENTS CONSTITUTE A FIRST AND PRIOR LIEN
AGAINST THE IMPROVEMENT AREA #1 ASSESSED PROPERTY, SUPERIOR TO ALL OTHER LIENS
AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE, COUNTY, SCHOOL DISTRICT, OR
MUNICIPALITY AD VALOREM TAXES AND ARE A PERSONAL OBLIGATION OF AND CHARGE
AGAINST THE OWNERS OF IMPROVEMENT AREA #1 ASSESSED PROPERTY.
Direct and Overlapping Indebtedness, Assessments, and Taxes
The ability of an owner of Improvement Area #1 Assessed Property to pay Improvement Area #1
Assessments could be affected by the existence of other taxes and assessments imposed upon the property. Public
entities whose boundaries overlap those of Improvement Area #1 currently impose ad valorem taxes on the property
within Improvement Area #1 and will likely do so in the future. Such entities could also impose assessment liens on
the property within Improvement Area #1. The imposition of additional liens, whether from taxes, assessments, or
private financing, may reduce the ability or willingness of the landowners to pay the Improvement Area #1
Assessments. See “OVERLAPPING TAXES AND DEBT.”
Depletion of Accounts of the Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account
Failure of the owners of Improvement Area #1 Assessed Property to pay the Improvement Area #1
Assessments when due could result in the rapid, total depletion of the Reserve Account and the Additional Interest
Account 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 Reserve Account of the
Reserve Fund will be fully funded from the proceeds of the Bonds; however, 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 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. 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 resume depositing the Additional Interest into the Delinquency and Prepayment Reserve Account
until the Delinquency and Prepayment Reserve Requirement has been accumulated in the Delinquency and
Prepayment Reserve Account. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and
Delinquency and Prepayment Reserve Account).”
Lien Foreclosure and Bankruptcy
The payment of Improvement Area #1 Assessments and the ability of the City to foreclose on the lien of a
delinquent unpaid Improvement Area #1 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 Improvement Area #1 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 Improvement Area #1 Assessments might not be paid in full. See “OVERLAPPING
TAXES AND DEBT.”
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 shall, proceed against the City for the purpose of
protecting and enforcing the rights of the Owners under the Indenture, to protect and enforce the rights of the
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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 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 property within Improvement Area #1 or sell property within Improvement Area #1
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 Area #1 of the District pursuant to the Federal Bankruptcy Code could, subject to its
discretion, 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.
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The City is not aware of any State 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 State courts. In general, State 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.
State 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).
Judicial Foreclosures
Judicial foreclosure proceedings are not mandatory; however, the City has covenanted (subject to
provisions set forth in the Indenture) 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 Area #1 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 Improvement Area #1 Assessments may be adversely affected by the
effects of market conditions on the foreclosure 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.
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 (“Chapter 9”). The City may proceed under Chapter 9 if it (1) is
generally not paying 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 Chapter 9, 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 Chapter 9, (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. The City
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cannot predict a Bankruptcy Court’s treatment of the Owners’ creditor claim and whether an Owner would be repaid
in full.
State Law Requiring Notice of Assessment; Failure of Developer and Homebuilders to Deliver Required
Notice Pursuant to Texas Property Code
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 for the purchase of such real property, 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 purchase contract is entered into without the seller providing the notice,
the intended purchaser is entitled to terminate the purchase contract. If the Developer or the Homebuilders within
Improvement Area #1 do not provide the required notice and prospective purchasers of Improvement Area #1
Assessed Property within Improvement Area #1 terminate a purchase 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 Improvement Area #1
Assessed Property. In such an event, the outstanding Improvement Area #1 Assessments on such Improvement
Area #1 Assessed Property should be prepaid. In the event of such prepayment, a partial redemption of the Bonds
could occur. See “DESCRIPTION OF THE BONDS – Redemption Provisions.” 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 or a Homebuilder 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 to the Service and Assessment Plan and
will be included in each Annual Service Plan Update. See “APPENDIX C – Form of Service and Assessment Plan.”
Potential Future Changes in State Law Regarding Public Improvement Districts
During 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 Representative 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, including two special
sessions, ended on September 4, 2025. 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. 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.
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 Area #1, 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
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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.
Adverse Developments Affecting the Financial Services Industry
Actual events involving limited liquidity, defaults, non-performance, or other adverse developments that
affect financial institutions, transactional counterparties, or other companies in the financial services industry or the
financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks,
have in the past and may in the future lead to market-wide liquidity problems. In the recent past troubled financial
institutions have been closed and/or swept into receivership by the Federal Deposit Insurance Corporation (“FDIC”)
or acquired by or received cash rescue packages from more solvent financial institutions. Borrowers under credit
agreements, letters of credit, and certain other financial instruments with any financial institution that is placed into
receivership by the FDIC may be unable to access undrawn amounts for an unspecified period.
The Developer expects to finance the costs of the Improvement Area #1 Improvements not paid from bond
proceeds with the Revolving Credit Agreement. If the Developer is unable to access funds under the Revolving
Credit Agreement, the Developer’s ability to complete the Improvement Area #1 Improvements could be adversely
affected. If a Homebuilder uses a line of credit or other financial instrument to finance home construction and is
unable to access funds under such line of credit or other financial instrument, the Homebuilder’s ability to take down
lots and complete homes could be adversely affected. Additionally, confidence in the safety and soundness of
regional banks specifically, or the banking system generally, could impact where customers choose to maintain
deposits, which could materially adversely impact the homebuilder’s liquidity and access loan funding capacity, and
results in an impact to operations. Similar impacts to the development industry have occurred in the past.
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.
Furthermore, the operating revenues of the Developer may be materially adversely affected if specific
conditions in the lot purchase contracts are not met. Contracts that the Developer may have with individual
homebuilders are subject to a myriad of contractual conditions and contingencies, all or some of which if not
complied with, could precipitate a termination or winding up of such contractual arrangement for the sale of lots,
causing the Developer to possibly need to execute a different strategy for the development and sale of lots and
residential units within the Development. As described herein, the Improvement Area #1 Assessments are an
imposition against the land only. Neither the Developer nor any other subsequent landowner is a guarantor of the
Improvement Area #1 Assessments and the recourse for the failure of the Developer or any other landowner to pay
the Improvement Area #1 Assessments is limited to the collection proceedings against the land as described herein.
Failure to meet any lot purchase contract’s conditions may allow the applicable lot purchaser to terminate its
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obligation to purchase lots from the Developer and obtain its Earnest Money Deposit. See “THE DEVELOPMENT
– Expected Build-out, Absorption, and Home Prices in the Tellus Tract.”
The Development cannot be completed without the Developer obtaining a variety of governmental
approvals and permits, some of which have already been obtained. Certain permits are necessary to initiate
construction of each phase of the Development and to allow the occupancy of residences and to satisfy conditions
included in the approvals and permits. There can be no assurance that all of these permits and approvals can be
obtained or that the conditions to the approvals and permits can be fulfilled. The failure to obtain any of the
required approvals or fulfill any one of the conditions could cause materially adverse financial results for 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 Improvement Area #1 Assessments
when due. Any or all of the foregoing could reduce the willingness and ability of such owners to pay the
Improvement Area #1 Assessments and could greatly reduce the value of the property within Improvement Area #1
the District in the event such property has to be foreclosed. If Improvement Area #1 Annual Installments of
Improvement Area #1 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.
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 Improvement Area #1. No assurances can be given that projected home prices and buildout values presented
in this Limited Offering Memorandum will be realized.
Risks Related to Recent 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 Developer to estimate costs. If the Actual Costs of the
Improvement Area #1 Improvements are substantially greater than the estimated costs or if the Developer is unable
to access building materials in a timely manner, it may affect the ability of the Developer to complete the
Improvement Area #1 Improvements or pay the Improvement Area #1 Assessments when due. See “THE
DEVELOPER – History and Financing of the District.” If the cost of materials remains high or increases, it may
affect the ability of the Homebuilders to construct homes within Improvement Area #1 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 Developer’s ability to estimate costs and to
complete the Improvement Area #1 Improvements and the Homebuilders’ ability to construct homes within
Improvement Area #1 of the District.
Completion of Homes
The cost and time for completion of homes by the Homebuilders is uncertain and may be affected by
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 conditions; unanticipated development costs, market preferences, and architectural
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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.
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 may adversely affect the estimated value of property within
Improvement Area #1 of the District, could impair the economic viability of the District and the Development, and
could reduce the ability or desire of property owners in Improvement Area #1 of the District to pay the Improvement
Area #1 Assessments.
Competition
The housing industry in the Dallas-Fort Worth-Arlington 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 of the single-family residential development within the District which are planned will be completed in
accordance with the Developer’s expectations. The competitive position of the Developer in the sale of developed
lots or any Homebuilder in the construction and 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
the District and the Development.
Competitive projects in the area include, but are not limited to the following:
Project Name
No. of
Units
Proximity to
Development Developer Date Started Prices
The Villages of Hurricane Creek 984 Approx. 3.7
miles
Centurion
American 2021 $340K - $670K
Liberty Hills 1,831 Approx. 3.4
miles
Perry Homes
and Veritas
Communities
2026 $500K +
Anna Town Square 1,938 Approx. 2
miles Skorburg 2014 $392K - $589K
Co ote Meadows 700 2,000 ft. Ashton Woods 2024 $268K - $356K
AnaCapri 1,800 Approx. 2
miles Megatel 2024 $400K +
Mantua 4,116 Approx. 5
miles
Risland US
Holdin s 2019 $300K - $700K
There can be no assurances that other similar single-family residential projects will not be developed in the
future or that existing projects will not be upgraded or otherwise able to compete with the Development.
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 “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 the District be affected by a hazardous
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substance, the marketability and value of 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 Area #1 of the District does not consider the possible liability of
the owner (or operator) for the remedy of a hazardous substance condition of the parcel. The City has not
independently verified, and is not aware, that the owner (or operator) of any of the parcels within 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 Area #1 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. These possibilities could significantly 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 the
property within the District.
Regulation
Development within the District and the Development 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 the District and the Development, the nature and extent of public improvements, 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 the District and the Development and property values.
Availability of Utilities
The progress of development within the District is also dependent upon the City providing an adequate
supply of water and sufficient capacity for the collection and treatment of wastewater, as applicable. If the City fails
to supply water and wastewater services to the property in the District, the development of the land in the District
could be adversely affected. See “THE DEVELOPMENT – Utilities.”
Flood Plains
According to the FEMA FIRM Community Panel number 48085C0160J (June 2, 2009), the property in
Improvement Area #1 of the District lies outside the range of both the 100-year and 500-year floodplains.
FEMA will from time to time revise its FIRMs. None of the City, the Underwriter, or the Developer makes
any representation as to whether FEMA may revise its FIRMs, whether such revisions may result in homes that are
currently outside of the 500-year or 100-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.
Risk from Weather Events
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, wildfires, hurricanes, tropical storms, flooding, heavy rains 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 the District.
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Exercise of Third-Party Rights
As described herein under “THE DEVELOPMENT– Mineral Rights and Other Third-Party Property
Rights” there are certain mineral rights reservations located within Improvement Area #1 of the District not owned
by the Developer. There may also be additional mineral rights and related real property rights reflected in the chain
of title for the real property within Improvement Area #1 of the District recorded in the real property records of
Collin County.
The Developer does not expect the existence or exercise of any mineral rights or related real property 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 Improvement Area #1 of the District to pay Improvement Area #1 Assessments.
However, none of the City, the Municipal Advisor, or the Underwriter provide any assurances as to such
expectations.
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
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. In the past, the IRS announced audit efforts focused in part on “developer-driven bond transactions,”
including certain tax increment financings and certain assessment bond transactions. 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 Owners 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 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
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circumstances, a new developer or new officers in management positions may not have comparable experience in
projects comparable to the Development.
Dependence Upon Developer
Upon adoption of the Assessment Ordinance, the Developer will have the obligation for payment of 100%
of the Improvement Area #1 Assessments. The ability of the Developer to make full and timely payment of the
Improvement Area #1 Assessments will directly affect the ability of the City to meet its debt service obligations
with respect to the Bonds. The only assets of the Developer are land within the District, related permits and
development rights, and minor operating accounts. There can be no assurances given as to the financial ability of
the Developer to advance any funds to the City to supplement revenues from the Improvement Area #1 Assessments
if necessary, or as to whether the Developer will advance such funds. See “THE DEVELOPER – Description of the
Developer.”
None of the Developer or the homebuilders will guarantee or otherwise be obligated to pay debt service on
the Bonds. Payment of the Assessments on the Assessed Property will initially be the responsibility of the
Developer and/or the Homebuilders, as the case may be, as the owners of such Assessed Property prior to purchase
by homeowners.
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 Area #1 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 Area #1 of the District.
In performing its analysis, the 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 certain factual matters. Furthermore, the Appraiser’s analysis, opinions and
conclusions are necessarily based upon market, economic, financial and other circumstances and conditions existing
prior to the valuation and date of the Appraisal.
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.
Agricultural Use Valuation and Redemption Rights
The property in Improvement Area #1 is currently entitled to valuation for ad valorem tax purposes based
upon its agricultural use. The Developer expects that property within Improvement Area #1 will be removed from
agricultural valuation in the 2026 tax year. Under State law, an owner of land that is entitled to an agricultural
valuation has the right to redeem such property after a tax sale for a period of two years after the tax sale by paying
to the tax sale purchaser a 25% premium, if redeemed during the first year, or a 50% premium, if redeemed during
the second year, over the purchase price paid at the tax sale and certain qualifying costs incurred by the purchaser.
Although the Improvement Area #1 Assessments are not considered a tax under State law, the PID Act provides that
the lien for the Improvement Area #1 Assessments may be enforced in the same manner as a lien for ad valorem
taxes. This shared enforcement mechanism raises a possibility that the right to redeem agricultural valuation
property may be available following a foreclosure of a lien for the Improvement Area #1 Assessments, though there
is no indication in State law that such redemption rights would be available in such a case.
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TIRZ Annual Credit Amount and Marketing of the Development
The TIRZ No. 9 Revenues are generated only from ad valorem taxes levied and collected by the City on the
captured appraisal value in TIRZ No. 9 in any year. Any delay or failure by the Developer to develop Improvement
Area #9 may result in a reduced amount of the TIRZ No. 9 Revenues being available to credit against the
Improvement Area #1 Assessments. TIRZ No. 9 Revenues generated from the Captured Appraised Value for each
parcel in Improvement Area #1 during the development of such parcel will not result in a TIRZ No. 9 Annual Credit
Amount which is sufficient to equal the TIRZ No. 9 Maximum Annual Credit Amount. The ability of the TIRZ No.
9 Annual Credit Amount to equal the TIRZ No. 9 Maximum Annual Credit Amount for parcels within Improvement
Area #1 is dependent on the actual buildout values in Improvement Area #1 meeting the projections for the
estimated buildout value described in the Service and Assessment Plan. If the buildout values in Improvement Area
#1 do not reach the expected values, the TIRZ No. 9 Revenues will not be sufficient to produce the TIRZ No. 9
Maximum Annual Credit Amount. See “OVERLAPPING TAXES AND DEBT” and “APPENDIX C – Form of
Service and Assessment Plan.”
The City’s contribution of the TIRZ No. 9 Revenues as a credit against Improvement Area #1 Annual
Installments of the Improvement Area #1 Assessments results in less tax revenue being deposited into its general
fund for use on public services, such as police and fire protection. Application of the TIRZ No. 9 Annual Credit
Amount may affect the City’s ability to provide for such basic services.
The TIRZ No. 9 Revenues constitute revenues collected by the City from a portion of its ad valorem tax
rate levied on parcels within the Improvement Area #1 of the District. Effective September 1, 2025, if the Attorney
General of the State determines that a municipality has not had its records and accounts audited, has not had an
annual financial statement prepared based on such audit, and has not filed such financial statement and auditor’s
opinion on such statement in the office of the municipal secretary or clerk before the 180th day of such
municipality’s fiscal year end, as required by Section 103.003, Texas Local Government Code, as amended, the
municipality may not adopt an ad valorem tax rate that exceeds its no-new-revenue tax rate for the tax year that
begins on or after the date of the Attorney General’s determination and any subsequent tax year that begins before
such statement and opinion are filed. The adoption of a no-new-revenue tax rate could result in a reduction of the
TIRZ No. 9 Annual Credit Amount for such year. For the five most recently completed fiscal years for which the
filing has come due pursuant to Section 103.003 (fiscal years ending 2019-2024), the City has made its filing
beyond the 180-day deadline four times.
It is uncertain what impact, if any, the TIRZ No. 9 Annual Credit Amount application to the Improvement
Area #1 Annual Installments will have on the underwriting of residential mortgages. If the underwriter of residential
mortgages does not recognize the TIRZ No. 9 Annual Credit Amount, it may make it more difficult for a borrower
to qualify for a home mortgage which could have a negative impact on home sales and projected absorption.
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
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observe the aforementioned representations or covenants could cause the interest on the Bonds to become taxable
retroactively to the date of issuance.
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
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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 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.
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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 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. Orrick, Herrington and Sutcliffe
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 first lien on, security interest in, and pledge of the Trust Estate. 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 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,”
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“LEGAL MATTERS – Legal Proceedings” (first paragraph only), “LEGAL MATTERS – Legal Opinions” (except
for the final paragraph hereof), “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 Ordinance, 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 Ordinance and the Indenture.
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 Improvement Area #1 Assessments securing the
Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Assessment Ordinance,
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.
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 Area #1
Improvements (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
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provided in the 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
The Developer has not made any previous continuing disclosure agreements 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 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
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registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities
Board to 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
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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 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 engineering 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.
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Source of Certain Information
The information contained in this Limited Offering Memorandum relating to the description of the
Improvement Area #1 Improvements, the Improvement Area #1 Major Improvements, the Amenities, the Private
Improvements, the Development, and the Developer generally and, in particular, the information included in the
sections captioned “PLAN OF FINANCE” (except the subcaption “– The Bonds”), “THE IMPROVEMENT AREA
#1 IMPROVEMENTS,” “THE IMPROVEMENT AREA #1 MAJOR IMPROVEMENTS,” “THE
DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the
Improvement Area #1 Improvements, the Improvement Area #1 Major Improvements, and the Development),
“LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer” and “– The
Developer’s Compliance with Prior Undertakings,” APPENDIX F, and APPENDIX G 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.
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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 – Page 1
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. The City estimates the population as
of January 1, 2026, was .
Historical Employment in Collin County
Average Annual
2025 (1) 2024 2023 2022 2021
Civilian Labor Force 695,010 680,301 664,539 635,039 597,989
Total Emplo e 667,373 654,384 640,361 614,007 571,326
Total Unemplo e 27,637 25,917 24,178 21,032 26,663
Unemplo ment Rate 4.0% 3.8% 3.6% 3.3% 4.5%
_____________
(1) Data through November 2025.
Source: Texas Workforce Commission, Department of Economic Research and Analysis.
Major Employers
The major employers in the City are set forth in the table below.
Emplo e Product or Service Emplo ees
Anna Independent School District Education 856
Walmar Retail 457
Pate Rehab Medical 168
Cit of Anna Municipal Governmen 191
Brookshire’s Grocer Store 97
Bronco Manufacturin Machine Shop 37
Hurricane Creek Countr Club Countr Club 48
Love’s Travel Shop Retail 56
McDonald’s Restauran 49
Tri-Countr Ve Vet Clinic 12
Source: City’s Annual Comprehensive Financial Report for Fiscal Year Ended September 30, 2024
APPENDIX A – Page 2
Surrounding Economic Activity
The major employers of certain municipalities in the Dallas–Fort Worth–Arlington metropolitan area are
set forth in the table below.
Source: Municpal Advisory Council of Texas
City of McKinney (2024) City of Frisco (2024) City of Plano (2024)
Approximately 14 miles from the City Approximately 28 miles from the City Approximately 27 miles from the City
Employer Employees Employer Employees Employer Employees
Raytheon Space & Airborne
Systems 4,200 Frisco ISD 8,850 JP Morgan Chase 10,530
McKinney ISD 2,920 Dallas Cowboys 2,000 Bank of America 6,318
Collin County 2,000 City of Frisco 1,813 Capital One Finance 5,578
Globe Life 1,700 HCL Technologies Ltd. 1,500 Toyota Motor North America,
Inc. 4,960
Encore Wire Corp. 1,653 ICS 1,300 PepsiCo 3,759
City of McKinney 1,565 Keurig Dr Pepper Inc. 1,213 Ericsson 3,346
Medical City McKinney 1,434 merisource Bergen Specialty
Group 749 AT&T Foundry 2,500
Baylor Scott & White Medical
Center 1,171 Baylor Scott White/Centennial
Hosp. 567 Medical City Plano 2,332
Collin College 794 Mario Sinacola & Sons
Excavating 500 Liberty Mutual Insurance
Company 2,184
Simpson Strong-Tie 650 Goodman Networks Inc. 463 USAA 2,092
City of Grapevine (2023)
Approximately 49 miles from the City
Employe Employees
Gaylord Texas Resort & Conv Ctr 2,000
Dallas/Ft. Worth Int’l Airport 1,970
Grapevine-Colleyville ISD 1,870
Paycom 990
Baylor Medical 660
Great Wolf Lodge 600
City of Grapevine 590
Boeing Distribution 500
Hyatt Regency DFW 500
Kubota 450
City of Dallas (2024)
Approximately 32 miles from the City
Employer Employees
UT Southwestern Medical Ctr. 25,641
Dallas ISD 22,857
Southwest Airlines Co. 19,190
City of Dallas 13,798
Parkland Health & Hosp Sys 13,103
AT&T Inc. 10,690
Dallas County Comm College 8,230
Texas Instruments Inc. 7,704
Methodist Dallas Medical
Center 6,689
Dallas County 6,500
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APPENDIX B
FORM OF INDENTURE
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APPENDIX C
FORM OF 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
FORM OF CFA AGREEMENT
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APPENDIX H
APPRAISAL
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