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Home My WebLink About2023-09-12 Work Session & Regular Meeting PacketAGENDA City Council Work Session Tuesday, September 12, 2023 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet in a Closed Session at 5:30 PM, on September 12, 2023, at the Anna Municipal Complex - Council Chambers, 120 W. 7th Street, to consider the following items. Welcome to the City Council meeting. Please sign the Sign-In-Sheet as a record of attendance. If you wish to speak on an open-session agenda item, please fill out the Opinion/Speaker Registration Form and turn it in to the City Secretary before the meeting starts. 1.Call to Order, Roll Call, and Establishment of Quorum. 2.Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a.Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Application of City authority and land-use regulations and related matters. b.Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c.Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d.Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). Boards and Commissions. Legal services review. The Council further reserves the right to enter into Executive Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 3.Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 4.Adjourn. This is to certify that I, Carrie L. Land, City Secretary, posted this Agenda on the City’s website (www.annatexas.gov ) and at a place readily accessible to the public at the Anna City Hall and on the City Hall bulletin board at or before 5:00 p.m. on 09/08/2023. Carrie L. Land, City Secretary AGENDA City Council Meeting Tuesday, September 12, 2023 at 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet on September 12, 2023 at 6:00 PM in the Anna Municipal Complex-Council Chambers, located at 120 W. 7th Street, to consider the following items. Welcome to the City Council meeting. If you wish to speak on an Open Session agenda item, please fill out the Opinion/Speaker Registration Form and turn it in to the City Secretary before the meeting starts. 1. Call to Order, Roll Call, and Establishment of Quorum. 2. Invocation and Pledge of Allegiance. 3. Neighbor Comments. At this time, any person may address the City Council regarding an item on this meeting Agenda that is not scheduled for public hearing. Also, at this time, any person may address the City Council regarding an item that is not on this meeting Agenda. Each person will be allowed up to three (3) minutes to speak. No discussion or action may be taken at this meeting on items not listed on this Agenda, other than to make statements of specific information in response to a citizen’s inquiry or to recite existing policy in response to the inquiry. 4. Reports. Receive reports from Staff or the City Council about items of community interest. Items of community interest include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen (but not including a change in status of a person's public office or public employment); a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; and announcements involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the Agenda. 5. Work Session. a. Utility Rate Discussion. (Interim City Manager Ryan Henderson) 6.Consent Items. These items consist of non-controversial or "housekeeping" items required by law. Items may be considered individually by any Council Member making such request prior to a motion and vote on the Consent Items. a.Approve City Council Meeting Minutes for August 22, 2023 and September 6, 2023. (City Secretary Carrie Land) b.Approve an Ordinance amending Article A3.000 Development Fees and Article A6.000 Utility Fees within Appendix A: Fee Schedule of The City of Anna Code of Ordinances. (Director of Development Services Ross Altobelli) c.Approve an Ordinance Amending the Code of Ordinances with Regard to Fees for Certain Emergency Services. (Interim City Manager Ryan Henderson) d.Approve a Resolution amending signatories to execute checks currently on file at Independent Financial. (Finance Director Alan Guard) e.Approve a Resolution amending the representatives authorized to transact business with the Texas Local Government Investment Pool (TexPool). (Finance Director Alan Guard) f.Approve an Ordinance Repealing the City Curfew for Minors. (Police Chief Dean Habel) g.Approve a Resolution adopting a minimum Value to Lien (VTL) ratio regarding the AnaCapri Development Agreement. (Director of Economic Development Joey Grisham) h.Approve an Ordinance authorizing the issuance of the "City of Anna, Texas, special assessment revenue bonds, series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 project)" in a principal amount not to exceed $7,419,000 payable from special assessments to fund public improvements in improvement area #1 of The Woods at Lindsey Place Public Improvement District; approving and authorizing an indenture of trust, a bond purchase agreement, a limited offering memorandum, a continuing disclosure agreement and other agreements and documents in connection therewith; making findings with respect to the issuance of such bonds; and providing an effective date. (Director of Economic Development Joey Grisham) i.Approve a Resolution approving a Preliminary Limited Offering Memorandum for the sale of “City of Anna, Texas Special Assessment Revenue Bonds, Series 2023 (AnaCapri Public Improvement District Improvement Area #1 Project." (Director of Economic Development Joey Grisham) j.Approve Resolution Authorizing Restoration of Historic Anna Fire Truck. (Interim Public Works Director Steven Smith) 7. Items For Individual Consideration. a. b. c. d. e. f. g. h. i. Consider/Discuss/Action approving an Ordinance adopting the FY2024 Budget. (Budget Manager Terri Doby) Consider/Discuss/Action regarding a Resolution ratifying the property tax revenue increase reflected in the City of Anna FY2024 Budget. (Budget Manager Terri Doby) Consider/Discuss/Action approving an Ordinance adopting the FY2024 Tax Rate. (Budget Manager Terri Doby) First Reading of a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) Second Reading of a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) Consider/Discuss/Action a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) Consider/Discuss/Action on a Resolution approving the Fiscal Year 2023-2024 Anna Economic Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) Consider/Discuss/Action on a Resolution authorizing the City Manager to execute a Park Fee Development Agreement by and between the City of Anna, Texas and Skorburg Lot Development, LLC; in a form approved by the City Attorney; and providing for an effective date. (Interim Assistant City Manager Greg Peters, P.E.) Conduct a Public Hearing/Consider/Discuss/Action on a Resolution approving a negotiated settlement between The Atmos Cities Steering Committee and Atmos Energy Corp., Mid-Tex Division regarding the company's 2023 rate review mechanism filing. (City Attorney Clark McCoy) 8. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. b. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Application of City authority and land-use regulations and related matters. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). Boards and Commission. Legal services review. The Council further reserves the right to enter into Executive Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 9. Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 10. Adjourn. This is to certify that I, Carrie L. Land, City Secretary, posted this Agenda on the City’s website (www.annatexas.gov) and at the Anna Municipal Complex bulletin board at or before 5:00 p.m. on 09/08/2023. ________________________________ Carrie L. Land, City Secretary Item No. 5.a. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: AGENDA ITEM: Approve City Council Meeting Minutes for August 22, 2023 and September 6, 2023. (City Secretary Carrie Land) SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: ATTACHMENTS: 1. CCmin2023-08-22 Work Session 2. CCmin2023-08-22 3. CCmin2023-09-05 Work Session 4. CCmin2023-09-05 City Council Work Session Meeting Minutes Tuesday, August 22, 2023 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met in a Closed Session at 5:30 PM, on August 22, 2023, at the Anna Municipal Complex - Council Chambers, 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Pro Tem Miller called the meeting to order at 5:32 PM. Members Present: Mayor Nate Pike Mayor Pro Tem Lee Miller Deputy Mayor Pro Tem Randy Atchley Council Member Kevin Toten Council Member Stan Carver Council Member Elden Baker Council Member Pete Cain Members Absent: None 2. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Secretary Annual Performance Review MOTION: Council Member Baker moved to enter closed session. Council Member Atchley seconded. Motion carried 5-0. Mayor Pro Tem Miller recessed the meeting at 5:35 PM. Mayor Pike reconvened the meeting at 6:03 PM. 3. Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 4. Adjourn. Mayor Pike adjourned the meeting at 6:03 PM. Approved on the 12th day of September 2023 ___________________________________ ATTEST: Mayor Nate Pike ________________________________ City Secretary Carrie L. Land Regular City Council Meeting Meeting Minutes Tuesday, August 22, 2023 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met on August 22, 2023 at 6:00 PM in the Anna Municipal Complex-Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Pike called the meeting to order at 6:03 PM. Members Present: Mayor Nate Pike Mayor Pro Tem Lee Miller Deputy Mayor Pro Tem Randy Atchley Council Member Kevin Toten Council Member Stan Carver Council Member Elden Baker Council Member Pete Cain Members Absent: None 2. Invocation and Pledge of Allegiance. Council Member Carver led the Invocation and Mayor Pike Pledge of Allegiance. 3. Neighbor Comments. No comments. 4. Reports. a. Recognize May, June, and July "We Notice!" Designees. (Code Compliance Officer Mike Wherland) Staff recognized May, June, and July's "We Notice!" Property of the Month Designees. May's winner is Alfredo Iturrino. June's winner is Kevin Brock. July's winner is Eliana Munoz. 5. Consent Items. MOTION: Council Member Toten moved to approve items 5.a.-bb. Council Member Cain seconded. Motion carried 7-0. a. Approve City Council Meeting Minutes for August 8, 2023. (City Secretary Carrie Land) b. Review Monthly Financial Report for the Month Ending July 31, 2023. (Budget Manager Terri Doby) c. Review Minutes of the July 20, 2023, Joint Community Development Corporation and Economic Development Corporation Board Meetings. (Director of Economic Development Joey Grisham) d. Review Minutes of the July 6, 2023 Planning & Zoning Commission Meeting. (Director of Development Services Ross Altobelli) e. Approve a Resolution regarding the Anna Crossing, Phase 9, Final Plat. (Director of Development Services Ross Altobelli) 191 Single-family dwelling, detached lots and 7 common area lots on 65.6± acres located on the north side Finley Boulevard, 205± east of Leonard Avenue. Zoned: Planned Development (Ord. No. 236-2005). The purpose of the Final Plat is to dedicate rights-of-way, lot and block boundaries, and easements necessary for the single-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A FINAL PLAT OF ANNA CROSSING, PHASE 9. f. Approve a Resolution regarding the Anna High School #1 Addition, Block 1, Lot 1R, Revised Site Plan. (Director of Development Services Ross Altobelli) Public school on 54.1± acres located at the southwest corner of Rosamond Parkway and West Crossing Boulevard. Zoned SF-E Single-Family Residential - Large Lot. The purpose of the Revised Site Plan is to show the existing and proposed site improvements for the proposed public school building addition. The Revised Site Plan is in conformance with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A REVISED SITE PLAN OF ANNA HIGH SCHOOL #1 ADDITION, BLOCK 1, LOT 1. g. Approve a Resolution regarding the Arden Park Phase 1, Final Plat. (Director of Development Services Ross Altobelli) 60 Single-family dwelling, detached lots, 27 single-family dwelling, attached lots, five common area lots, and two commercial lots on 20.5± acres located at the southwest corner of W. White Street and Slater Creek Road. Zoned: C-1 Restricted Commercial (C-1), SF-Z Single-Family Residence District – Zero Lot Line Homes (SF-Z), and Planned Development-SF-TH Townhome District (PD- SF-TH) (Ord. No. 961-2022 & Ord. No. 1009-2022). The purpose of the Final Plat is to dedicate rights-of-way, lot and block boundaries, and easements necessary for the single-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING ARDEN PARK PHASE 1, FINAL PLAT. h. Approve a Resolution regarding the Arden Park Phase 1, Site Plan. (Director of Development Services Ross Altobelli) 60 Single-family dwelling, detached lots, 27 single-family dwelling, attached lots, and five common area lots on 15.9± acres located at the southwest corner of W. White Street and Slater Creek Road. Zoned: SF-Z Single-Family Residence District – Zero Lot Line Homes (SF-Z), and Planned Development-SF-TH Townhome District (PD-SF-TH) (Ord. No. 961-2022 & Ord. No. 1009-2022). The purpose of the Site Plan is to show the proposed single-family residential development site improvements. The Site Plan is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING ARDEN PARK PHASE 1, SITE PLAN. i. Approve a Resolution regarding the Arden Park Phase 1, Block C, Lot 1X, Site Plan. (Director of Development Services Ross Altobelli) Amenity center on one lot on 0.5± acre located at the southeast and southwest corner of Hudson Way and West Crossing Boulevard, 445± feet south of W. White Street. Zoned: Planned Development (Ord. No. 961-2022 & Ord. No. 1009-2022). The purpose of the Site Plan is to show the proposed amenity center site improvements. The Site Plan is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING ARDEN PARK PHASE 1, BLOCK C, LOT 1X, SITE PLAN. j. Approve a Resolution regarding the Avery Pointe Commercial, Block A, Lot 4, Revised Site Plan. (Director of Development Services Ross Altobelli) Restaurant on one lot on 0.6± acre located on the north side of W. White Street, 300± feet east of S. Ferguson Parkway. Zoned: Planned Development (Ord. No. 955-2022, Ord. No. 709-2015, & Ord. No. 179-2005). The purpose of the Revised Site Plan is to show the existing and proposed site improvements for the proposed restaurant development. The Revised Site Plan is in conformance with the adopted Planned Development standards and the city's Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING AVERY POINTE COMMERCIAL, BLOCK A, LOT 4, REVISED SITE PLAN. k. Approve a Resolution regarding the Boston Addition, Block A, Lot 1, Development Plat. (Director of Development Services Ross Altobelli) One lot on 5.1± acres located at the northwest corner of County Road 479 and Brynlee James Lane. Located in the Extraterritorial Jurisdiction (ETJ). The Development Plat is in conformance with the city’s Subdivision Regulations. The Planning & Zoning Commission recommended approval. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A DEVELOPMENT PLAT OF BOSTON ADDITION, BLOCK A, LOT 1. l. Approve a Resolution regarding the Holt Subdivision, Block A, Lots 1-4, Final Plat. (Director of Development Services Ross Altobelli) Office – showroom/warehouse with equipment service and repair / leasing and retail sales on Lots 1 & 2, drainage and detention on Lot 3, and vacant lot on 82.0± acres located on the south side of E. Foster Crossing Boulevard, 195± feet east of S. Powell Parkway. Zoned: Planned Development (Ord. No. 743-2017 & Ord. No. 1029-2023-01). The purpose of the Final Plat is to dedicate right-of-way, lot and block boundaries, and easements necessary for the Office – showroom/warehouse with equipment service and repair / leasing and retail sales development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING HOLT SUBDIVISION, BLOCK A, LOTS 1-4, FINAL PLAT. m. Approve a Resolution regarding the Holt Subdivision, Block A, Lots 1-4, Site Plan. (Director of Development Services Ross Altobelli) Office – showroom/warehouse with equipment service and repair / leasing and retail sales on Lots 1 & 2, drainage and detention on Lot 3, and vacant lot on 82.0± acres located on the south side of E. Foster Crossing Boulevard, 195± feet east of S. Powell Parkway. Zoned: Planned Development (Ord. No. 743-2017 & Ord. No. 1029-2023-01). The purpose of the Site Plan is to show the proposed Office – showroom/warehouse with equipment service and repair / leasing and retail sales and drainage and detention site improvements. The Site Plan is in conformance with the adopted Planned Development standards and the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING HOLT SUBDIVISION, BLOCK A, LOTS 1-4, SITE PLAN. n. Approve a Resolution regarding the Jefferson at Anna Finley, Block A, Lot 1, Final Plat. (Director of Development Services Ross Altobelli) Multiple-family residences on one lot on 11.0± acres located at the northeast corner of Finley Boulevard and Sharp Street. Zoned: Planned Development (Ord. No. 980-2022, Ord. No. 691-2015, & Ord. No. 129-2004). The purpose for the Final Plat is to dedicate right-of-way, lot and block boundaries, and easements necessary for the multiple-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A FINAL PLAT OF JEFFERSON AT ANNA FINLEY, BLOCK A, LOT 1. o. Approve a Resolution regarding the Jefferson at Anna Finley, Block A, Lot 1, Site Plan. (Director of Development Services Ross Altobelli) Multiple-family residences on one lot on 11.0± acres located at the northeast corner of Finley Boulevard and Sharp Street. Zoned: Planned Development (Ord. No. 980-2022, Ord. No. 691-2015, & Ord. No. 129-2004). The purpose of the Site Plan is to show the site improvements for the proposed multifamily residence development. The Site Plan is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A SITE PLAN OF JEFFERSON AT ANNA FINLEY, BLOCK A, LOT 1. p. Approve a Resolution regarding the Leonard Trails, Phase 1, Final Plat. (Director of Development Services Ross Altobelli) 161 Single-family dwelling, detached lots and 15 common area lots on 42.7± acres located on the east and west sides of Leonard Avenue, 350± feet south of E. White Street. Zoned: Planned Development (Ord. No. 1027-2023-01). The purpose of the Final Plat is to dedicate rights-of-way, lot and block boundaries, and easements necessary for the single-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING LEONARD TRAILS, PHASE 1, FINAL PLAT. q. Approve a Resolution regarding the One Anna Two Addition, Block B, Lot 1R, Replat. (Director of Development Services Ross Altobelli) Vacant lot on 5.0± acres located at the southwest corner of U.S. Highway 75 and Suzie Lane. Zoned: Planned Development (Ord. No. 846-2020 & Ord. No. 911- 2021). The purpose for the Replat is to dedicate lot and block boundaries and easements necessary for future commercial development. The Replat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING ONE ANNA TWO ADDITION, BLOCK B, LOT 1R, REPLAT. r. Approve a Resolution regarding the One Anna Two Addition, Block B, Lot 1R, Site Plan. (Director of Development Services Ross Altobelli) Vacant lot on 5.0± acres located at the southwest corner of U.S. Highway 75 and Suzie Lane. Zoned: Planned Development (Ord. No. 846-2020 & Ord. No. 911- 2021). The purpose of the Site Plan is to show proposed site improvements for future commercial development. The Site Plan is in conformance with the adopted Planned Development standards and the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING ONE ANNA TWO ADDITION, BLOCK B, LOT 1R, SITE PLAN. s. Approve a Resolution regarding the Quail Creek Run Place, Block A, Lots 4R, 5 & 6, Preliminary Replat. (Director of Development Services Ross Altobelli) Three lots on 3.3± acres located on the west side of Quail Creek Run, 380± feet south of Taylor Boulevard. Located in the Extraterritorial Jurisdiction (ETJ). The purpose of the Replat is to dedicate lot and block boundaries and easements necessary for the subdivision of one lot. The Replat is in conformance with the city’s Subdivision Regulations. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A REPLAT OF QUAIL CREEK RUN PLACE, BLOCK A, LOTS 4R, 5 & 6. t. Approve a Resolution regarding the Riata 455, Block A, Lots 1 & 2, Preliminary Plat. (Director of Development Services Ross Altobelli) One lot on 43.9± acres located on the north side of F.M. 455, 250± feet west of County Road 287. Located in the Extraterritorial Jurisdiction (ETJ). The purpose of the Preliminary Plat is to propose right-of-way, lot and block boundaries and easements necessary for the future construction of the residential development. The Preliminary Plat is in conformance with the city’s Subdivision Regulations. The Planning & Zoning Commission recommended approval. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING RIATA 455 ADDITION, BLOCK A, LOTS 1 & 2, PRELIMINARY PLAT u. Approve a Resolution regarding the Skorburg Anna Ranch, Concept Plan. (Director of Development Services Ross Altobelli) 515 Single-family dwelling, detached lots, eight common area lots, and multiple- family residence lot on 170.4± acres located on the north and south side of E. Foster Crossing Road, 1,645± feet east of future Leonard Avenue. Zoned: Planned Development (Ord. No. 1054-2023-06). This concept plan is associated with the zoning case that was approved by City Council on May 23, 2023. The purpose of the Concept Plan is to show the related site improvements for the future single-family and multiple-family residence development. The Concept Plan is in conformance with the adopted Planned Development standards and the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A CONCEPT PLAN FOR SKORBURG ANNA RANCH. v. Approve a Resolution regarding the Skorburg Anna Ranch Addition, Preliminary Plat. (Director of Development Services Ross Altobelli) 515 Single-family dwelling, detached lots, 12 common area lots, and vacant lot on 170.4± acres located on the north and south side of E. Foster Crossing Road, 1,645± feet east of future Leonard Avenue. Zoned: Planned Development (Ord. No. 1054-2023- 06). The purpose of the Preliminary Plat is to propose right-of-way, lot and block boundaries and easements necessary for the future construction of the single- family dwelling, detached development. The Preliminary Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING SKORBURG ANNA RANCH ADDITION, PRELIMINARY PLAT w. Approve a Resolution regarding The Woods at Lindsey Place, Phase 2A, Final Plat. (Director of Development Services Ross Altobelli) 75 Single-family dwelling, detached lots, 7 common area lots, and one vacant commercial lot on 29.2± acres located at the southeast corner of Rosamond Parkway and future Buddy Hayes Boulevard. Zoned: Planned Development (Ord. No. 881-2020). The purpose of the Final Plat is to dedicate rights-of-way, lot and block boundaries, and easements necessary for the single-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A FINAL PLAT OF THE WOODS AT LINDSEY PLACE, PHASE 2A. x. Approve a Resolution regarding The Woods at Lindsey Place, Phase 2B, Final Plat. (Director of Development Services Ross Altobelli) 123 Single-family dwelling, detached lots and 4 common area lots on 27.5± acres located on the east side of future Buddy Hayes Boulevard, 2,755± feet north of W. Rosamond Parkway. Zoned: Planned Development (Ord. No. 881-2020). The purpose of the Final Plat is to dedicate rights-of-way, lot and block boundaries, and easements necessary for the single-family residential development. The Final Plat is in conformance with the adopted Planned Development standards and with the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A FINAL PLAT OF THE WOODS AT LINDSEY PLACE, PHASE 2B. y. Approve a Resolution regarding the Wal-Mart Anna Addition, Block A, Lot 4, Revised Site Plan. (Director of Development Services Ross Altobelli) Restaurant on one lot on 1.5± acres located on the east side of U.S. Highway 75, 285± feet north of W. White Street. Zoned Planned Development (Ord. No. 648- 2019 & Ord. No. 826-2019). The purpose of the Revised Site Plan is to show the existing and proposed site improvements for the drive-through alterations. The Revised Site Plan is in conformance with the adopted Planned Development standards and the city’s Subdivision Regulations and Zoning Ordinances. The Planning & Zoning Commission recommended approval subject to additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A REVISED SITE PLAN OF WAL-MART ANNA ADDITION, BLOCK A, LOT 4. z. Approve a Resolution making revisions to the Investment Policy. (Finance Director Alan Guard) The City of Anna, per the Investment Policy, is required to revisit, revise, and adopt the Investment Policy each year. The City Council recently approved a contract with Valley View Consulting for investment advising services, including assistance updating the policy each year. Revisions recommended to the policy primarily reflect clean-up items and reorganizing the information to be more concise and easier to read. The Texas Legislature did not make any substantive changes to the Public Funds Investment Act (PFIA) during the course of the last legislative session. Staff recommends that the City Council approve a resolution making revisions to the City's Investment Policy. A RESOLUTION REVIEWING AND AMENDING THE INVESTMENT POLICY OF THE CITY OF ANNA. aa. Approve a Resolution accepting a petition and setting a public hearing under Section 372.009 of the Texas Local Government Code on the advisability of the creation of a public improvement district and improvements within the City of Anna, Texas for the Meadow Vista development and authorizing issuance of notice by the City Secretary of Anna, Texas regarding the public hearing. (Director of Economic Development Joey Grisham) The City Council approved a Development Agreement with Bloomfield Homes on June 27, 2023, which stated that the city would use reasonable efforts to create a PID. Meadow Vista is a 763 SF lot development located along the future Hackberry Drive extension. The City will receive approximately $595,000 in PID fees, with the remaining amount being used as a credit to the developer for constructing the off-site Hackberry Drive extension. Per the Development Agreement, the City will move forward with the creation of the Meadow Vista Public Improvement District, having received the PID petition. The public hearing will be held on September 26, 2023. A RESOLUTION ACCEPTING A PETITION TO CREATE THE MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT; SETTING A PUBLIC HEARING UNDER SEC. 372.009 OF THE TEXAS LOCAL GOVERNMENT CODE ON THE ADVISABILITY OF THE CREATION OF THE MEADOW VISTA PUBLIC IMPROVEMENT DISTRICT WITHIN THE CITY OF ANNA, TEXAS; AND AUTHORIZING THE ISSUANCE OF NOTICE BY THE CITY SECRETARY OF ANNA, TEXAS REGARDING THE PUBLIC HEARING. bb. Approve a Resolution approving the form and authorizing the distribution of a Preliminary Limited Offering Memorandum for the City of Anna, Texas Special Assessment Revenue Bonds Series, 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1). (Director of Economic Development Joey Grisham) The City Council created The Woods at Lindsey Place Public Improvement District on February 14, 2023 for improvements not to exceed $55,000,000. The City will receive over $2,900,00 in PID fees--approximately $741,200 of that amount will be paid upon issuance of Area #1 bonds. The Preliminary Limited Offering Memorandum (PLOM) for the City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) is submitted in preparation for the sale of the bonds as contemplated in the development agreement and PID creation documents. RESOLUTION APPROVING A PRELIMINARY LIMITED OFFERING MEMORANDUM FOR THE SALE OF “CITY OF ANNA, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)” 6. Items For Individual Consideration. a. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance to amend an existing planned development (Ord. No. 648-2014) on 12.2± acres located on the south side of Hackberry Drive, 160± feet east of U.S. Highway 75 to allow for Building Materials, Hardware (Indoors) with modified development standards. (Planning Manager Lauren Mecke) The property’s current zoning, established in 2014 (Ord. No. 648-2014), is a Planned Development with the base zoning of C-2 General Commercial (C-2). The request is to amend standards established as part of the 2014 zoning and current C-2 development standards to accommodate the construction of the building materials, hardware (indoors) site improvements and allow additional accessory uses of auto leasing and rental, truck and bus leasing, and trailer rental. A Planned Development (PD) district is intended to provide for combining and mixing of uses allowed in various districts with appropriate regulations and to permit flexibility in the use and design of land and buildings in situations where modification of specific provisions of this article is not contrary to its intent and purpose or significantly inconsistent with the planning on which it is based and will not be harmful to the community. A PD district may be used to permit new and innovative concepts in land utilization. While great flexibility is given to provide special restrictions which will allow development not otherwise permitted, procedures are established herein to insure against misuse of the increased flexibility. A concept plan, Anna Town Center Addition, Block A, Lots 6R, 13-17 accompanies this request. The applicant’s justification letter associated with each of the requests accompanies this request. Proposed Planned Development Stipulations The language in the proposed PD district will modify existing PD standards and current development standards by: • Amending an existing PD stipulations pertaining to outdoor display areas (Garden Centers). - Increase the maximum size of an outdoor display area (garden centers) from 25% to 27%. - Amending the fencing requirements around the outdoor display area to remove the 4’ masonry wall requirement and establish masonry column standards. - Removing the landscaping around the outdoor display area. The original and existing tenant when the zoning district was written is not meeting this regulation and the potential Building Materials, hardware (indoors) tenant has requested to remove it. • Adding accessory uses to be permitted by right for a Building Materials, hardware (indoor) use. - Ord. No. 648-2014 provided additional accessory uses of tool rental shop and commercial greenhouse. However, the proposed tenant has additional services that they offer but those uses are not allowed by the zoning. - Staff recommends allowing the following accessory uses when associated with a Building Materials, hardware (indoor) use: - Auto Leasing and Rental, - Truck and Bus Leasing, and - Trailer Rental • Amend the parking space requirements for a building materials, hardware (indoor) use. - §9.04.037 (Parking space Regulations) and the Planned Development defines the parking space requirements for retailers/retail uses as 4 spaces per 1,000 square feet of gross floor area. - The request is to reduce the required parking to 3 spaces per 1,000 square feet of gross floor area and include the garden center but exclude the other display areas. - Parking spaces intended for auto leasing and rental, truck and bus leasing, tool rental, trailer rental, and seasonal sales area will not count towards the overall provided parking to meet the minimum required parking. • Increase the maximum wall sign sizes for a building materials, hardware (indoor) use as shown in the sign exhibit (Exhibit C). - §9.05.85 limits an individual major attached sign (“wall sign”) to a maximum of 200 square feet and total wall signs to 400 square feet. - In Exhibit C, the applicant illustrates the signage they are requesting. Mayor Pike opened the public hearing at 6:12 PM. No comments. Mayor Pike closed the public hearing at 6:12 PM. AN ORDINANCE OF THE CITY OF ANNA, TEXAS AMENDING THE CITY’S COMPREHENSIVE PLAN, ZONING MAP, AND ZONING ORDINANCE AND CHANGING THE ZONING OF CERTAIN PROPERTY AS DESCRIBED HEREIN; PROVIDING FOR SAVINGS, REPEALING AND SEVERABILITY CLAUSES; PROVIDING FOR AN EFFECTIVE DATE; PROVIDING FOR A PENALTY CLAUSE NOT TO EXCEED $2,000 OR THE HIGHEST PENALTY AMOUNT ALLOWED BY LAW, WHICHEVER IS LESS; AND, PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF. (Property zoned under this ordinance is generally located on the south side of Hackberry Drive, 160± feet east of U.S. Highway 75) MOTION: Mayor Pike moved to approve. Council Member Toten seconded. Motion carried 7-0. b. Consider/Discuss/Action on a Resolution regarding Anna Town Center Addition, Block A, Lot 15, Concept Plan. (Planning Manager Lauren Mecke) Building Materials, Hardware (Indoors) on one lot and five vacant commercial lots on 35.8± acres located on the south side of Hackberry Drive, 160± feet east of U.S. Highway 75. Zoned Planned Development (Ord. No. 648-2014). The purpose of the Concept Plan is to propose right-of-way, lot and block boundaries and easements necessary for the future construction of the commercial development. The Planning & Zoning Commission recommended approval at the August 7, 2023 Planning & Zoning Commission meeting subject to City Council approval of the zoning request. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A CONCEPT PLAN OF ANNA TOWN CENTER ADDITION, BLOCK A, LOTS 6R, 13 - 17. MOTION: Council Member Toten moved to approve. Mayor Pro Tem Miller seconded. Motion carried 7-0. c. Consider/Discuss/Action on a Resolution regarding Anna Town Center Addition, Block A, Lot 15, Preliminary Replat. (Planning Manager Lauren Mecke) Building Materials, Hardward (Indoors) on one lot and five vacant commercial lots on 35.8± acres located at the southeast corner of Hackberry Drive and S Central Expressway (U.S. Highway 75). Zoned Planned Development (Ord. No. 648- 2014). The purpose of the Preliminary Replat is to propose right-of-way, lot and block boundaries and easements necessary for the future construction of the building materials, hardware (indoors) development. The Planning & Zoning Commission recommended approval at the August 7, 2023 Planning & Zoning Commission meeting subject to City Council approval of the zoning request and additions and/or alterations to the engineering plans as required by the Public Works Department. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A PRELIMINARY REPLAT OF ANNA TOWN CENTER ADDITION, BLOCK A, LOTS 6R, 13 – 17. MOTION: Council Member Toten moved to approve. Council Member Cain seconded. Motion carried 7-0. d. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance to rezone 18.8± acres located at the northwest corner of N. Powell Parkway and Rosamond Parkway from Planned Development (Ord. No. 797-2018) to Planned Development to allow for a nonresidential and multiple-family residence development with modified development standards.(Director of Development Services Ross Altobelli) The applicant requested to withdraw the Zoning and Concept Plan applications from City Council agenda after the items were recommended for denial at the August 7, 2023 Planning & Zoning Commission meeting. Staff recommended that City Council approve the applicant's request to withdraw. MOTION: Mayor Pike moved to take no action. Council Member Toten seconded. Motion carried 7-0. e. Conduct a Public Hearing/Consider/Discuss/Action on amending Chapter 9 of the Anna Code of Ordinances by Repealing and Replacing Article 9.04 Zoning Ordinance and Repealing Article 9.06 Landscaping Regulations. (Director of Development Services Ross Altobelli) HISTORY: In March of 2022, the City Council approved a professional services agreement with Freese and Nichols, Inc. (F&N) to review and update the City of Anna Planning and Development Regulations. City staff has been working with F&N to implement the City’s comprehensive planning objectives and needs as identified by staff, Commissioners, Council members, developers, and neighbors. REMARKS: Reviewing the Anna 2050 Comprehensive Plan the following action items were addressed as part of the zoning ordinance rewrite. Future Lane Use Action 3.5. Code Overhaul. Rewrite the City’s development-related ordinances to align them with the vision expressed in this comprehensive plan and to accommodate the Future Land Use Plan. Economic Development Action 4.9. Standards and Regulations for Downtown . Adopt standards and regulations to ensure high-quality Downtown development. Housing Action 5.3. Development Flexibility. Revise the zoning ordinance and other related regulations to accommodate innovative and flexible land development techniques that permit a variety of lot sizes and housing types and promote context-sensitive development. Parks, Trails and Open Space Action 8.3. Open Space Standards. Incorporate standards, where appropriate, to evaluate new private development proposals on their efforts to provide outdoor open space with amenities and community gathering places. As mentioned during the June 27, 2023, Joint Work Session between the Planning and Zoning Commission and City Council, the F&N project team worked closely with city staff in reviewing and modernizing the zoning ordinance. Staff recommends special attention be given to the following improved areas: a. Division 2: NEW Zoning Districts i. Mixed-Density Residential District ii. Mixed-Use District iii. Downtown District b. Division 3: Uses i. Use Tables that include Parking Standards and hyperlinks to Use- Specific Standards. ii. Accessory Uses and Structures - Outdoor Display/Outdoor Storage regulations. iii. Use-Specific Standards for various land uses. c. Division 4: Development Standards i. Dimensional Regulations - Step back Regulations ii. Site Design Requirements - Multi-family Residential & Townhome Unit and Single or Duplex Unit Park Standards (Amenities) d. Division 5: Procedures i. Table 37 Authority Table ii. Flowchart Figures: Details approval process Following the Joint Work Session, F&N and Staff examined ways to address the concerns discussed. An updated draft Zoning Ordinance was given to the Planning & Zoning Commission in which they recommended approval. Following the publishing of the August 7, 2023 P&Z Agenda Packet, Staff identified four additional amendments to be considered. The Zoning Ordinance rewrite specifically addressed one of the highest priority Anna 2050 action items “Code Overhaul”. Additionally, the proposed amendments will improve staff efficiency, clarify the City’s development regulations, and simplify the development approval process. Option 1 considers the adoption of the zoning ordinance as the Planning & Zoning Commission recommended at their August 7, 2023 meeting . Option 2 considers four additional amendments that City Staff recommends for inclusion. Mayor Pike opened the public hearing at 6:17 PM. No comments. Mayor Pike closed the public hearing at 6:27 PM. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS AMENDING CHAPTER 9 OF THE ANNA CITY CODE OF ORDINANCES BY REPEALING AND REPLACING ARTICLE 9.04 ZONING ORDINANCE AND REPEALING ARTICLE 9.06 LANDSCAPE REGULATIONS MOTION: Council Member Baker moved to approve with Option 2. Council Member Carver seconded. Motion carried 7-0. f. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance to rezone two vacant lots 0.5± acre located at the southwest corner of W. Second Street and N. Riggins Street from SF-1 Single-Family Residential to Downtown (DT) District to allow for future development of a Health Club. (Planner II Salena Tittle) The applicant is requesting to rezone the property to the Downtown (DT) zoning district to allow for commercial development within the Core (CE) zone. The intent of the DT zoning district is to enhance the significance of the City’s authentic core to residents, tourists, and visitors and serve as a support and stimulus to business and industry and to create an attractive and functional downtown as envisioned in the Anna 2050 Downtown Master Plan. Surrounding Land Use and Zoning North Vacant lot, zone SF-1 Single-Family Residential East Dallas Area Rapid Transit ROW and railroad, zoned SF-1 Single-Family Residential South Single-family, detached dwelling, zoned SF-1 Single-Family Residential West Religious facility, zoned SF-1 Single-Family Residential Future Land Use Plan – The subject property is located within the Downtown Core zone as defined by the Anna 2050 Downtown Master Plan and identified as Adaptive Reuse/Infill. The Anna 2050 Downtown Master Plan suggests that future land use decisions for Adaptive Reuse/Infill development should accommodate the existing neighborhood fabric, while encouraging a transition to a more active environment and a more diverse building stock. The proposed zoning conforms with the Anna 2050 Future Land Use Plan. Mayor Pike opened the public hearing at 6:29 PM. No comments. Mayor Pike closed the public hearing at 6:29 PM. AN ORDINANCE OF THE CITY OF ANNA, TEXAS AMENDING THE CITY’S COMPREHENSIVE PLAN, ZONING MAP, AND ZONING ORDINANCE AND CHANGING THE ZONING OF CERTAIN PROPERTY AS DESCRIBED HEREIN; PROVIDING FOR SAVINGS, REPEALING AND SEVERABILITY CLAUSES; PROVIDING FOR AN EFFECTIVE DATE; PROVIDING FOR A PENALTY CLAUSE NOT TO EXCEED $2,000 OR THE HIGHEST PENALTY AMOUNT ALLOWED BY LAW, WHICHEVER IS LESS; AND, PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF. (Property rezoned under this ordinance is generally located at the southwest corner of W. Second Street and N. Riggins Street) MOTION: Mayor Pro Tem Miller moved to approve. Council Member Cain seconded. Motion carried 7-0. g. First Reading of a Resolution authorizing the Anna Community Development Corporation to enter into a loan agreement with Government Capital Corporation to finance land acquisition. (Director of Economic Development Joey Grisham) Two readings of the Resolution are required. The presiding officer read the following as the first reading: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS RATIFYING AND AUTHORIZING THE ANNA COMMUNITY DEVELOPMENT CORPORATION TO ENTER INTO A LOAN AGREEMENT WITH GOVERNMENT CAPITAL CORPORATION TO FINANCE LAND ACQUISITION. h. Second Reading of a Resolution authorizing the Anna Community Development Corporation to enter into a loan agreement with Government Capital Corporation to finance land acquisition. (Director of Economic Development Joey Grisham) Two readings of the Resolution are required. The presiding officer read the following as the second reading: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS RATIFYING AND AUTHORIZING THE ANNA COMMUNITY DEVELOPMENT CORPORATION TO ENTER INTO A LOAN AGREEMENT WITH GOVERNMENT CAPITAL CORPORATION TO FINANCE LAND ACQUISITION. i. Consider/Discuss/Action on a Resolution ratifying and authorizing the Anna Community Development Corporation to enter into a loan agreement with Government Capital Corporation to finance land acquisition. (Director of Economic Development Joey Grisham) In 2022, the City Council and CDC-EDC Board held a joint workshop, and identified property acquisition in downtown as a priority. To carry out that goal, the CDC has identified nine parcels (totaling approximately 2.8 acres) at the southeast corner of Powell Pkwy. and 7th Street to purchase. CDC staff began working with Government Capital, who has been involved with projects in Anna over the years as well as 500 + Texas communities. The Anna CDC Board held a Public Hearing on August 3, 2023 and approved a resolution authorizing a loan with Government Capital Corp. not to exceed $1,800,000. The item was also published in the newspaper on July 27, 2023. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS (“CITY”), APPROVING (I) THE RESOLUTION OF THE BOARD OF DIRECTORS OF ANNA COMMUNITY DEVELOPMENT CORPORATION (“CORPORATION”) REGARDING A LOAN IN THE AMOUNT NOT TO EXCEED $1,800,000; (II) A SALES TAX REMITTANCE AGREEMENT BETWEEN THE CITY AND THE CORPORATION (III) RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE LOAN; AND (IV) THE AUTHORITY OF THE MAYOR TO EXECUTE, ON BEHALF OF THE CITY, A GENERAL CERTIFICATE OF THE CITY AND THE SALES TAX REMITTANCE AGREEMENT. MOTION: Mayor Pro Tem Miller moved to approve. Council Member Toten seconded. Motion carried 7-0. j. Consider/Discuss/Action on a Resolution approving a minimum value to lien ratio with respect to First Amendment to The Woods at Lindsey Place Subdivision Improvement Agreement. (Director of Economic Development Joey Grisham) The City Council approved the First Amendment to The Woods at Lindsey Place Development on January 24, 2023 and created the PID on February 14, 2023. To facilitate the selling of the bonds, the minimum value to lien ratio needs to be adjusted per our financial advisors. MOTION: Mayor Pro Tem Miller moved to approve the Development Agreement, as amended, with a minimum value to lien ratio of 1.8. Council Member Cain seconded. Motion carried 7-0. k. Consider/Discuss/Action on a Resolution authorizing the City Manager to execute a Park Fee Development Agreement by and between the City of Anna, Texas and Skorburg Lot Development, LLC; in a form approved by the City Attorney; and providing for an effective date. (Interim Assistant City Manager Greg Peters, P.E.) Skorburg Lot Development, LLC is seeking to build a residential development known as Skorburg Anna Ranch, northeast of the intersection of East Foster Crossing and Leonard Avenue. The zoning for the project was approved at the June 27, 2023 City Council Meeting. The Concept Plan shows a 28-acre (+/-) common area which the developer has agreed to dedicate to the City for a public park. The developer is seeking to utilize the Park Development Fees collected from the development to construct improvements on the park property for the benefit of both the Skorburg Anna Ranch neighborhood and all neighbors in Anna. The developer has presented the overall park concept to the Park Board, who received the concept positively at the May Park Board Meeting. If this agreement is approved, the developer is prepared to return to the Park Board at their September, 2023 meeting to finalize the list of proposed amenities with input and feedback from the board, and begin the design process. MOTION: Council Member Toten moved to take no action. Mayor Pike seconded. Motion carried 4-3. Mayor Pro Tem Miller, Council Member Atchley, and Council Member Baker opposed. 7. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Secretary Annual Performance Review MOTION: Mayor Pike moved to enter closed session. Council Member Toten seconded. Motion carried 7-0. Mayor Pike recessed the meeting at 6:42 PM. Mayor Pike reconvened the meeting at 7:30 PM. 8. Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 9. Adjourn. Mayor Pike adjourned the meeting at 7:30 PM. Approved on the 12th day of September 2023 __________________________________ ATTEST: Mayor Nate Pike _________________________________ City Secretary Carrie L. Land City Council Work Session Meeting Minutes Tuesday, September 5, 2023 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met in a Closed Session at 5:30 PM, on September 5, 2023, at the Anna Municipal Complex - Council Chambers, 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Pro Tem Miller called the meeting to order at 5:33 PM. Members Present: Mayor Pro Tem Lee Miller Council Member Kevin Toten Council Member Elden Baker Council Member Pete Cain Members Absent: Mayor Nate Pike Deputy Mayor Pro Tem Randy Atchley Council Member Stan Carver 2. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). City Regulations. b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). MOTION: Council Member Toten moved to enter closed session. Council Member Cain seconded. Motion carried 4-0. Mayor Pro Tem Miller recessed the meeting at 5:35 PM. Mayor Pro Tem Miller reconvened the meeting at 6:14 PM. 3. Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 4. Adjourn. Mayor Pro Tem Miller adjourned the meeting at 6:14 PM. Approved on the 12th day of September 2023 ___________________________________ ATTEST: Mayor Pro Tem Miller _____________________________ City Secretary Carrie L. Land Regular City Council Meeting Meeting Minutes Tuesday, September 5, 2023 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met on September 5, 2023 at 6:00 PM in the Anna Municipal Complex-Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Pro Tem Miller called the meeting to order at 6:15 PM. Members Present: Mayor Pro Tem Lee Miller Council Member Kevin Toten Council Member Stan Carver Council Member Elden Baker Council Member Pete Cain Members Absent: Mayor Nate Pike Deputy Mayor Pro Tem Randy Atchley 2. Invocation and Pledge of Allegiance. Council Member Cain led the Invocation and Pledge of Allegiance. 3. Neighbor Comments. No comments. 4. Items For Individual Consideration. a. Conduct a Public Hearing on the Proposed FY2024 Budget. (Budget Manager Terri Doby) The Annual Budget is one of the most important financial responsibilities of a local government, and preparation of the budget typically takes 6 months to complete. The Annual Budget is developed through an extensive process of reviewing requests received from various City departments, then prioritizing those requests in a manner that utilizes resources effectively, within fiscal constraints, while working to achieve the City's strategic goals. The proposed budget was presented to the City Council on August 8th and can be found on our website at www.annatexas.gov/912/Budget The proposed budget is funded by a property tax rate of $0.510717, which is lower than the current tax rate. When compared with other cities in our area, the City of Anna continues to have one of the lowest per-capita property tax levies. According to the most recent population estimates, the City of Anna’s population is approximately 23,960. We anticipate a steady increase of 7 to 10 percent annual growth over the next few years. As Anna continues to grow, the City remains committed to its Strategic Success Statements. The FY2024 budget is designed to preserve and enhance the quality of existing services and respond appropriately to our city’s continuing growth and development. The Council will vote to adopt the FY2024 budget on September 12, 2023. Mayor Pro Tem Miller opened the public hearing at 6:19 PM. No comments. Mayor Pro Tem Miller closed the public hearing at 6:19 PM. b. Conduct a Public Hearing on the Proposed FY2024 Tax Rate. (Budget Manager Terri Doby) At the Tuesday, August 8th meeting, the City Council set the date, time and location of tonight’s public hearing on the FY2024 proposed tax rate as required by the Texas Tax Code. The Notice of Public Hearing was published in the Anna Melissa Tribune on August 17, 2023. After properties are appraised by the Collin County Appraisal District, the Collin County Tax Assessor-Collector calculates both the No-New-Revenue tax rate and the Voter Approval tax rate for the City of Anna as the designated officer to complete the tax rate calculation forms created by the Texas Comptroller and to certify the calculations as accurate. No-New-Revenue tax rate: The No-New-Revenue tax rate is a calculated rate that would provide the taxing unit with the same amount of maintenance and operations property taxes on existing property as the previous year after taking into account changes in appraised value. If property values rise, the No-New-Revenue tax rate will go down and vice versa. The No-New Revenue tax rate for FY2024 is $0.464353 per $100. Voter-Approval tax rate: The Voter-Approval tax rate provides the taxing unit with the same amount of maintenance and operations property taxes on existing property as the previous year plus a 3.5 percent increase for those operations, in addition to sufficient funds to pay debts in the coming year. If a taxing unit adopts a tax rate higher than the Voter-Approval tax rate, a tax rate approval election must be held on the November uniform election date. The Voter-Approval tax rate for FY2024 is $0.507024 per $100. De minimis rate: The De minimis rate is the rate equal to the sum of the taxing unit’s current debt rate, the no-new-revenue maintenance and operations rate, and the rate that when applied to a taxing unit’s current total value, will impose an amount of taxes equal to $500,000. The de minimis rate is an option for small cities with a population of 30,000 or less. The De Minimis rate for FY2024 is $0.510717 per $100. The proposed budget is supported by a tax rate of $0.510717. Under the Texas Property Tax Reform and Transparency Act of 2019, a city that adopts a rate exceeding the lower of the No-New-Revenue tax rate or the Voter-Approval tax rate must hold one public hearing. The following table is a comparison between the proposed tax rate, last year's rate, the No-New-Revenue rate, the De Minimis rate and Voter-Approval tax rate. The budget and tax rate are scheduled for adoption at the September 12th City Council meeting. Since the proposed tax rate is higher than the No-New-Revenue rate, section 26.05 of the Texas Tax Code requires a minimum of 60% of the Council members to vote in favor of that rate. That would require at least 5 Council members to vote in favor of the proposed tax rate. Mayor Pro Tem Miller opened the public hearing at 6:22 PM. No comments. Mayor Pro Tem Miller closed the public hearing at 6:22 PM. 5. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). City Regulations. b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). MOTION: Council Member Cain moved to enter closed session. Council Member Toten seconded. Motion carried 5-0. Mayor Pro Tem Miller recessed the meeting at 6:24 PM. Mayor Pro Tem Miller reconvened the meeting at 6:42 PM. 6. Consider/Discuss/Action on any items listed on any agenda - work session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 7. Adjourn. Mayor Pro Tem Miller adjourned the meeting at 6:42 PM. Approved on the 12th day of September 2023 ___________________________________ ATTEST: Mayor Pro Tem Miller ______________________________ City Secretary Carrie L. Land Item No. 5.b. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Ross Altobelli AGENDA ITEM: Approve an Ordinance amending Article A3.000 Development Fees and Article A6.000 Utility Fees within Appendix A: Fee Schedule of The City of Anna Code of Ordinances. (Director of Development Services Ross Altobelli) SUMMARY: Recommend City Council approve amendments to the fee schedule by creating new Development Fees (Article A3.00) for services required by the Planning and Development Regulations within the Code of Ordinance. The new fees are associated with the following plan/plat types. 1. Preliminary Site Plan 2. Conveyance Plat Pertaining to Utility Fees (Article A6.000), the city is proposing to add 3 inch water meter set and tap fees and an 8 inch sewer meter tap fee to meet the needs/requests of the development community. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The City is in the process of modifying the City of Anna Planning and Development Regulations. As part of that process, development fees need to be added to reflect actual costs of administration, plan review, and filed inspections account for new plan/plat submittal types. STRATEGIC CONNECTIONS: This item has no strategic connection. ATTACHMENTS: 1. Ordinance - Article A3.00 & Article A6.000 Fee Schedule Update 1 CITY OF ANNA, TEXAS ORDINANCE NO. ________________ AN ORDINANCE OF THE CITY OF ANNA, TEXAS AMENDING THE ANNA CITY CODE OF ORDINANCES BY AMENDING APPENDIX A (FEE SCHEDULE) PROVIDING FOR AN EFFECTIVE DATE; PROVIDING FOR A PENALTY CLAUSE NOT TO EXCEED $2,000 OR THE HIGHEST PENALTY AMOUNT ALLOWED BY LAW, WHICHEVER IS LESS; AND, PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF. WHEREAS, the City of Anna, Texas (“City”) has previously adopted ordinances, rules and regulations governing Schedule of Fees; and WHEREAS, the City Council of the City of Anna (“City Council”) has investigated and determined that is would be advantageous and beneficial to the City and its citizen to amend sections of Article A3.000 (Development Fees) and Article A6.000 (Utility Fees) within Appendix A (Fee Schedule) of The Anna City Code of Ordinances (“Anna Code”) by adjusting rates for permits and inspections to reflect actual costs of administration, plan review, and field inspections; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1.Recitals Incorporated The above recitals are incorporated herein by reference for all purposes. Section 2.Amendment In accordance with Article 1.01 of the Anna City Code of Ordinances, (“Anna Code”), the following amendments are made to Article A3.000 (Development Fees) and Article A6.000 (Utility Fees) of Appendix A (Fee Schedule) are hereby amended as follows. ARTICLE A3.000 DEVELOPMENT FEES [ … ] Sec. A3.004 Site plan review; miscellaneous development fees. [ … ] (i) Preliminary Site Plan: The fee for review of preliminary site plans shall be $50 an acre with a minimum fee of $250 to be paid at the time the preliminary site plan is filed with the Planning and Development department. Sec. A3.005 Plat fees. 2 [ … ] (11) Conveyance plat: $200.00, plus $10.00 per lot. [ … ] ARTICLE A3.009 Tree preservation. Application fee: $500.00. The fee for review of tree preservation plans shall be paid at the time the tree preservation plan is filed with the Planning and Development department. ARTICLE A6.000 UTILITY FEES [ … ] Sec. A6.002 Water meter set fees. Water Meter Size/Type Fee 3/4"$315.00 1"$410.00 1-1/2"$650.00 2"$850.00 3”$2,000.00 4"$3050.00 6"$5100.00 Over 6"Will be at list pricing provided by city approved vendor Sec. A6.003 Water and sewer tap fees. Water Meter Size/Type Fee 3/4" - 1"$750.00 per tap 1-1/2"$950.00 per tap 2"$1,000.00 per tap 2" compound $1,500.00 per tap 3”$2,250.00 per tap 4" and over $3,500.00 per tap Sewer Meter Size/Type Fee 4"$750.00 per tap 6"$1,000.00 per tap 3 8”$1,250.00 per tap Sec. A6.004 Water meter and fire hydrant meter deposits. Meter Size or Type Fee 3/4" meter $150.00 1" meter $200.00 1-1/2" meter $350.00 2" meter $500.00 3” meter $750.00 Fire hydrant meter $1,500.00 Section 3.Savings, Repealing and Severability Clauses It is hereby declared to be the intention of the City Council that the words, sentences, paragraphs, subdivisions, clauses, phrases, and provisions of this ordinance are severable and, if any phrase, sentence, paragraph, subdivision, clause, or provision of this ordinance shall be declared unconstitutional or otherwise invalid or inapplicable by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality, invalidity or inapplicability shall not affect any of the remaining words, sentences, paragraphs, subdivisions, clauses, phrases, or provisions of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such unconstitutional, invalid or inapplicable words, sentences, paragraphs, subdivisions, clauses, phrases, or provisions. Further, all ordinances or parts of ordinances in force when the provisions of this ordinance become effective that are consistent and do not conflict with the terms and provisions of this ordinance are hereby ratified to the extent of such consistency and lack of conflict, and all ordinances or parts of ordinances in force when the provisions of this ordinance become effective that are inconsistent or in conflict with the terms and provisions contained in this ordinance are hereby repealed only to the extent of any such conflict. Section 4.Penalty Any violation of any of the terms of this ordinance, whether denominated in this ordinance as unlawful or not, shall be deemed a misdemeanor. Any person convicted of any such violation shall be fined in an amount not to exceed the lesser of $2,000 or the highest amount allowed by applicable law for each incidence of violation. Each day a violation exists is considered a separate offense and will be punished separately. Section 5.Publication of the Caption and Effective Date This ordinance shall be effective upon its passage by the City Council and posting and/or publication, if required by law, of its caption. The City Secretary is hereby authorized and directed to implement such posting and/or publication. 4 PASSED by the City Council of the City of Anna, Texas this 12th day of September 2023. ATTESTED: APPROVED: ________________________________ _________________________ City Secretary, Carrie L. Land Mayor, Nate Pike Item No. 5.c. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Ryan Henderson AGENDA ITEM: Approve an Ordinance Amending the Code of Ordinances with Regard to Fees for Certain Emergency Services. (Interim City Manager Ryan Henderson) SUMMARY: The amending ordinance before the City Council allows the City Manager to enter into interlocal agreements or agreements with nonprofits to offer a reduced rate for emergency services as prescribed currently in our code of ordinances. FINANCIAL IMPACT: This item has no financial impact at the time of approval. A financial impact will be realized at the point of an approved interlocal agreement regarding emergency services. BACKGROUND: From time to time, the City of Anna will be providing emergency services to community partners such as the ISD, Chamber of Commerce, etc. for games or community events. As such, the City Manager is seeking the flexibility, through the amendment of this ordinance, to be able to enter into agreements that offer emergency services at a reduced rate as prescribed in the ordinance. This flexibility will be used to make sure that City of Anna public safety personnel are the choice provider for these community partners at a negotiated rate that works for the organization and the community. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Neighborly. ATTACHMENTS: 1. Fire Fees ILA Ordinance C03029D20230912CR1 CITY OF ANNA, TEXAS ORDINANCE NO. Page 1 of 2 CITY OF ANNA, TEXAS ORDINANCE NO AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS AMENDING THE ANNA CITY CODE OF ORDINANCES WITH REGARD TO FEES FOR CERTAIN EMERGENCY SERVICES WHEREAS, the City of Anna, Texas (the “City”) has determined that it would be beneficial to the City to amend the Anna City Code of Ordinances (the “Anna Code”) in order to delegate authority to the City Manager to negotiate with other governmental entities as relates to fees for certain emergency response fees as set forth in this ordinance; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1. Recitals Incorporated. The recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Amending Anna Code Article A9.000 “Fire Services Fees” of the Anna Code is amended to add a new subsection (o) “Interlocal Agreements” to read as follows: “(o) Interlocal Agreements. Notwithstanding any other provision of this Code, the City Manager is granted authority to enter into legally binding contracts with other governmental entities to modify the amount of fees for various emergency services provided as well as to specify the terms and conditions under which such services are provided under one or more Interlocal Agreements governed under Chapter 791 of the Texas Government Code. The City Manager’s authority to enter into such Interlocal Agreements on behalf of the City is limited to the authority as prescribed by applicable state law and the City’s internal purchasing and contracting policies and procedures. (p) Nonprofits Agreements. Notwithstanding any other provision of this Code, the City Manager is granted authority to enter into legally binding contracts with non-profit entities to which the City provides various emergency services to modify the amount of fees for various emergency services as well as to specify the terms and conditions under which such services are provided under one or more binding contracts. The City Manager’s authority to enter into such contracts on behalf of the City is limited to the authority as prescribed by applicable state law and the City’s internal purchasing and contracting policies and procedures.” CITY OF ANNA, TEXAS ORDINANCE NO. Page 2 of 2 Section 3. Savings, Severability and Repealing Clauses. All ordinances of the City in conflict with the provisions of this ordinance are repealed to the extent of that conflict. Cross-references in other parts, articles or sections of the Anna Code which make reference to previous enactments carrying the same designation as any section amended by this ordinance shall be construed as referencing whichever currently effective provision best preserves the original intent and effect of the cross-reference. If any provision of this ordinance shall be held to be invalid or unconstitutional, the remainder of such ordinance shall continue in full force and effect the same as if such invalid or unconstitutional provision had never been a part hereof. The City declares that it would have passed this ordinance, and each section, subsection, clause, or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, and phrases be declared unconstitutional or invalid. Section 4. Publication of the Caption Hereof and Effective Date. This ordinance shall be in full force and effective from and after its passage and upon the posting and/or publication of its caption as may be required by law, and the City Secretary is hereby directed to implement such posting and/or publication. PASSED by the City Council of the City of Anna, Texas, this 12th day of September 2023. ATTESTED: APPROVED: City Secretary, Carrie L. Land Mayor, Nate Pike Page 3I 22 Item No. 5.d. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Alan Guard AGENDA ITEM: Approve a Resolution amending signatories to execute checks currently on file at Independent Financial. (Finance Director Alan Guard) SUMMARY: Staff recommends that Council approve the resolution amending the authorized signatories to execute checks currently on file at Independent Bank. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: Alan Guard is currently authorized as a signatory on the bank accounts at Independent Financial. His term as Finance Director will formally end September 15, 2023 and Aimee Ferguson will serve as Interim Finance Director. It is recommended that Alan Guard's name be removed from and Aimee Ferguson's name be added to the list of authorized signatories on the City's accounts. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. Resolution approving bank signatories 092.2023 Final RES. PAGE 1 OF 1 CITY OF ANNA, TEXAS RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, AMENDING THE AUTHORIZED SIGNATORIES TO EXECUTE CHECKS CURRENTLY ON FILE AT INDEPENDENT FINANCIAL BY REMOVING ALAN GUARD FROM THE LIST OF AUTHORIZED SIGNATORIES; REMAINING WILL BE RYAN HENDERSON, CARRIE LAND, NATE PIKE, LEE MILLER, AND ADDING AIMEE FERGUSON TO THE NAMED AUTHORIZED SIGNATURES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the contract with Independent Financial provides that the City will identify individuals considered Authorized Representatives for the purpose of conducting banking business on behalf of the City; and WHEREAS, Alan Guard will be ending his term as the Finance Director as of September 15, 2023; and WHEREAS, Aimee Ferguson will be appointed the Interim Finance Director as of September 16, 2023. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The facts and recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Acknowledgement The City Council hereby designates Aimee Ferguson as the replacement for Alan Guard on the list of authorized signatories for Independent Financial. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 12th day of September, 2023. ATTESTED: _____________________________ Carrie L. Land, City Secretary APPROVED: ________________________________ Nate Pike, Mayor Item No. 5.e. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Alan Guard AGENDA ITEM: Approve a Resolution amending the representatives authorized to transact business with the Texas Local Government Investment Pool (TexPool). (Finance Director Alan Guard) SUMMARY: Staff recommends that Council approve the resolution amending the representatives authorized to transact business with TexPool. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The Texas Local Government Investment Pool (TexPool) is one of the City's primary investment vehicles. Authorized representatives who can conduct business for the City must be identified by resolution. The resolution amends the list of City representatives by substituting Interim Finance Director, Aimee Ferguson for Alan Guard. It is necessary to bring this update for Council approval. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. RESOLUTION AMENDING AUTHORIZED SIGNERS FOR TEXPOOL 09.12.2023 RES. PAGE 1 OF 2 CITY OF ANNA, TEXAS RESOLUTION NO. A RESOLUTION OF THE CITY OF ANNA, TEXAS AMENDING THE AUTHORIZED REPRESENTATIVES AUTHORIZED TO TRANSACT BUSINESS WITH THE TEXAS LOCAL GOVERNMENT INVESTMENT POOL, “TEXPOOL/TEXPOOL PRIME”, A PUBLIC FUNDS INVESTMENT POOL. WHEREAS, The City of Anna (“Participant”) is a local government of the State of Texas and is empowered to delegate to a public funds investment pool the authority to invest funds and to act as custodian of investments purchased with local investment funds; and WHEREAS, it is the best interest of the Participant to invest local funds in investments that provide for the preservation and safety of principal, liquidity, and yield consistent with the Public Funds Investment Act; and WHEREAS, the Texas Local Government Investment Pool (“TexPool/TexPool Prime”), a public funds investment pool, was created on behalf of entities whose investment objective in order of priority are preservation and safety of principal, liquidity, and yield consistent with the Public Funds Investment Act. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The above referenced recitals are incorporated as if set forth in full for all purposes. Section 2. That the individuals, whose signatures appear in the Resolution, are Authorized Representatives of the City of Anna and are each hereby authorized to transmit funds for investment in Texpool/Texpool Prime and are each further authorized to withdraw funds from time to time, to issue letters of instruction, and to take all other actions deemed necessary or appropriate for the investment of local government funds. Section 3. That an Authorized Representative of the Participant may be deleted by a written instrument signed by two remaining Authorized Representatives provided that the deleted Authorized Representative (1) is assigned job duties that no longer require access to the City of Anna’s TexPool account or (2) is no longer employed by the Participant. Section 4. That the Participant may by Amending Resolution signed by the Participant add an Authorized Representative provided the additional Authorized Representative is an officer, employee, or agent of the Participant. List of the Authorized Representatives of the Participant. Any new individuals will be issued identification numbers to transact business with TexPool Participant Services. RES. PAGE 2 OF 2 1. Name Taylor Lough Title: Assistant City Manager Phone/Fax/Email 972-924-3325 Fax 972-924-2620 tlough@annatexas.gov Signature 2. Name Aimee Ferguson Title: Interim Finance Director Phone/Fax/Email 214-831-5371 Fax 972-924-2760 aferguson@annatexas.gov Signature 3. Name Maria Harris Title: Accountant Phone/Fax/Email 214-831-5372 Fax 972-924-2760 mharris@annatexas.gov Signature List the names of the Authorized Representative listed above that will have primary responsibility for performing transactions and receiving confirmations and monthly statements under the Participation Agreement. Name: Aimee Ferguson, Interim Finance Director Phone 214-831-5371 Email: aferguson@annatexas.gov Fax 972-924-2760 Name: Maria Harris, Accountant Phone 214-831-5372 Email: mharris@annatexas.gov Fax 972-924-2760 In addition, and at the option of the Participant, one additional Authorized Representative can be designated to perform only inquiry of selected information. This limited representative cannot perform transactions. If the Participant desires to designate a representative with inquiry only, complete the following information. Name: Karlie Stewart, Sr. Accountant Phone 214-831-5331 Email: kstewart@anntexas.gov Fax 972-924-2760 Section 4. This Resolution and its authorization shall continue in full force and effect until amended by the Participant, and until TexPool Participant Services receives a copy of any such amendment or revocation. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 12th day of September, 2023. ATTEST: _____________________________ Carrie L. Land, City Secretary APPROVED: ________________________________ Nate Pike, Mayor Item No. 5.f. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Dean Habel AGENDA ITEM: Approve an Ordinance Repealing the City Curfew for Minors. (Police Chief Dean Habel) SUMMARY: Governor Greg Abbot has signed into law HB 1819, effective September 1, 2023, that creates a new Local Government Code § 370.007, that prohibits any political subdivision from adopting or enforcing ordinances which would impose curfews on the movements or actions of minors unless for emergency management purposes. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The City has previously adopted a curfew that restricts the movement and activities of persons under the age of 18 (“minors”), as an effort to mitigate the amount of juvenile violence, vandalism, illegal drug activity, and other crime committed within the City. STRATEGIC CONNECTIONS: This item has no strategic connection. ATTACHMENTS: 1. Juvenile Curfew repeal C03029D20230808DO2 copy CITY OF ANNA, TEXAS ORDINANCE NO. __________ AN ORDINANCE OF THE CITY OF ANNA, TEXAS, REPEALING ITS CURFEW FOR MINORS; PROVIDING A SAVINGS CLAUSE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Anna (“City”) has previously adopted a curfew that restricts the movement and activities of persons under the age of 18 (“minors”), as an effort to mitigate the amount of juvenile violence, vandalism, illegal drug activity, and other crime committed within the City; and WHEREAS, Governor Greg Abbot has signed into law HB 1819, effective September 1, 2023, that creates a new Local Government Code § 370.007, that prohibits any political subdivision from adopting or enforcing ordinances which would impose curfews on the movements or actions of minors unless for emergency management purposes (i.e., during a disaster); and WHEREAS, the City of Anna, Texas City Council (“the City Council”) has investigated and determined that although it believes its curfew for minors to be advantageous and beneficial to the City and its citizens, and in the interest of the public health, safety, and general welfare, it is necessary to repeal the City’s related ordinances to avoid a conflict with state law; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: Section 1. Recitals Incorporated. The above-referenced recitals are incorporated herein as the findings of the City Council as if set forth in full. Section 2. Ordinance adopted. 2.01 Repeal of curfew ordinances. Ordinance No. 208-2005, Ordinance No. 811-2019, and Ordinance 973-2022 are all repealed in their entirety. 2.02 Replacement Provisions for Chapter 8, Article 8.02, Division 2, Sections 8.02.031 through 8.02.038. This ordinance amends Chapter 8, Article 8.02, Division 2, Sections 8.02.031 through 8.02.038 of the Anna Code to replace the entirety of those sections with the language shown below: Article 8.02 MINORS [ . . . ] Division 2. Curfew Sec. 8.02.031 through 8.02.038 (Reserved) Section 3. Savings, Severability and Repealing Clauses. All ordinances of the City in conflict with the provisions of this ordinance are repealed to the extent of that conflict. If any provision of this ordinance shall be held to be invalid or unconstitutional, the remainder of such ordinance shall continue in full force and effect the same as if such invalid or unconstitutional provision had never been a part hereof. The City declares that it would have passed this ordinance, and each section, subsection, clause, or phrase thereof irrespective of the fact that any one or more section, subsection, sentence, clause, and phrase be declared unconstitutional or invalid. Section 4. Effective Date. This ordinance, once adopted, shall be in full force and effective from and after the approval of this ordinance. PASSED by the City Council of the City of Anna, Texas, this ______ day of _____________ 2023. ATTESTED: _________________________ City Secretary, Carrie Land APPROVED: _________________________ Mayor, Nate Pike Item No. 5.g. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Approve a Resolution adopting a minimum Value to Lien (VTL) ratio regarding the AnaCapri Development Agreement. (Director of Economic Development Joey Grisham) SUMMARY: Based on the latest appraisal, the updated value to lien ratio is 1.76:1. Previously, the City Council approved a minimum of 1.8:1. FINANCIAL IMPACT: N/A BACKGROUND: The City Council approved a Development Agreement with Megatel on October 12, 2021 for the AnaCapri Development that stated any reduction to the value to lien ratio must be approved by the City Council via Resolution. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Resolution - DA value to lien C03029D20230912CR2 CITY OF ANNA, TEXAS RESOLUTION NO. A RESOLUTION OF THE CITY OF ANNA, TEXAS APPROVING A LIEN TO VALUE RATIO WITH RESPECT TO THE ANACAPRI PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT WHEREAS, the City of Anna, Texas (the “City”) entered into that certain Anacapri Development Agreement with Anacapri Laguna Azure, LLC (the “Developer”) having an Effective Date of on or about October 18, 2021 (the “Development Agreement”); and WHEREAS, the Development Agreement allows for the City to issue PID Bonds and establishes a minimum value to lien ratio of 2:1 unless the Council approves a lower ratio; and WHEREAS, on August 23, 2022 the City Council adopted Resolution No. 2022-08-1238 reducing the minimum value to lien ratio to 1.8:1; and WHEREAS, based on additional financial information received by the City, the City Council desires to further reduce the ratio and establish a minimum value to lien ratio as set forth in this resolution; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Approval The City Council of the City of Anna, Texas, pursuant to Section 4.1(n) of the Development Agreement, as amended, hereby approves a ratio of estimated finished value per lot type to assessment of 1.76:1 as confirmed by an appraisal from a licensed MAI appraiser as referenced in Preliminary Limited Offering Memorandum for the AnaCapri Public Improvement District Improvement Area #1 Project, Special Assessment Revenue Bonds, Series 2023. PASSED and APPROVED by the City Council of the City of Anna, Texas, on this 12th day of September 2023. ATTESTED: APPROVED: ________________________________ _________________________ Carrie L. Land, City Secretary Nate Pike, Mayor Item No. 5.h. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Approve an Ordinance authorizing the issuance of the "City of Anna, Texas, special assessment revenue bonds, series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 project)" in a principal amount not to exceed $7,419,000 payable from special assessments to fund public improvements in improvement area #1 of The Woods at Lindsey Place Public Improvement District; approving and authorizing an indenture of trust, a bond purchase agreement, a limited offering memorandum, a continuing disclosure agreement and other agreements and documents in connection therewith; making findings with respect to the issuance of such bonds; and providing an effective date. (Director of Economic Development Joey Grisham) SUMMARY: The next step in the PID bond process for The Woods at Lindsey Place is approval of the indenture of trust, bond purchase agreement, limited offering memorandum, continuing disclosure agreement, and other documents in connection with the project. The bond closing is expected to take place on October 10, 2023. FINANCIAL IMPACT: N/A BACKGROUND: The City Council approved the Preliminary Limited Offering Memorandum (PLOM) at its August 22, 2023 meeting. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Lindsey Place PID 2023 (IA#1) Bond Ordinance v3 1 CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS COLLIN COUNTY CITY OF ANNA We, the undersigned officers of the City of Anna, Texas (the “City”), hereby certify as follows: 1. The City Council (the “Council”) of the City convened in a regular meeting on September 12, 2023, at the regular designated meeting place, and the roll was called of the duly constituted officers and members of the Council, to wit: Nate Pike, Mayor Stan Carver II, Council Member Lee Miller, Mayor Pro Tem Pete Cain, Council Member Randy Atchley, Deputy Mayor Pro-Tem Elden Baker, Council Member Kevin Toten, Council Member Ryan Henderson, Interim City Manager Carrie Land, City Secretary and all of said persons were present, except __________________________________________, thus constituting a quorum. Whereupon, among other business the following was transacted at said meeting: a written Ordinance entitled AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)" IN A PRINCIPAL AMOUNT NOT TO EXCEED $7,419,000 PAYABLE FROM SPECIAL ASSESSMENTS TO FUND PUBLIC IMPROVEMENTS IN IMPROVEMENT AREA #1 OF THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, A LIMITED OFFERING MEMORANDUM, A CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE was duly introduced for the consideration of the Council. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it the passage of said Ordinance, prevailed and carried, with all members of the Council shown present above voting “Aye,” except as noted below: NAYS: ABSTENTIONS: 2 2. A true, full, and correct copy of the aforesaid Ordinance passed at the meeting described in the above and foregoing paragraph is attached to and follows this Certificate; said Ordinance has been duly recorded in the Council's minutes of said meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of said meeting pertaining to the passage of said Ordinance; the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of the Council as indicated therein; that each of the officers and members of the Council was duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the aforesaid meeting, and that said Ordinance would be introduced and considered for passage at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; and that said meeting was open to the public, and public notice of the time, place, and purpose of said meeting was given all as required by the Texas Government Code, Chapter 551. 3. The Council has approved and hereby approves the Ordinance; and the Mayor (or Mayor Pro-Tem) and City Secretary hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Ordinance for all purposes. SIGNED AND SEALED ON SEPTEMBER 12, 2023 Carrie L. Land, City Secretary Nate Pike, Mayor (City Seal) 1 CITY OF ANNA ORDINANCE NO. ______-2023 AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE "CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)" IN A PRINCIPAL AMOUNT NOT TO EXCEED $7,419,000 PAYABLE FROM SPECIAL ASSESSMENTS LEVIED UPON IMPROVEMENT AREA #1 OF THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT TO FUND PUBLIC IMPROVEMENTS IN SAID DISTRICT; APPROVING AND AUTHORIZING AN INDENTURE OF TRUST, A BOND PURCHASE AGREEMENT, A LIMITED OFFERING MEMORANDUM, A CONTINUING DISCLOSURE AGREEMENT AND OTHER AGREEMENTS AND DOCUMENTS IN CONNECTION THEREWITH; MAKING FINDINGS WITH RESPECT TO THE ISSUANCE OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City of Anna, Texas (the "City"), pursuant to and in accordance with the terms, provisions and requirements of the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, has previously established the "The Woods at Lindsey Place Public Improvement District" (the "District"); and WHEREAS, pursuant to the PID Act, the City Council of the City (the "Council") published notice of the assessment hearing in a newspaper of general circulation in the City and the extraterritorial jurisdiction of the City, and opened a public hearing on March 14, 2023, regarding the levy of special assessments within the District, and the City Council convened the hearing on March 14, 2023; and WHEREAS, after all comments and evidence, both written and oral, were received by the City Council, the public hearing was closed on March 14, 2023 and, on such date, the Council adopted an ordinance levying such special assessments (the "Assessment Ordinance"); and WHEREAS, in the Assessment Ordinance, the Council approved and accepted the Service and Assessment Plan (as defined in the Assessment Ordinance) relating to the District and levied the Assessments (as defined in the Indenture (defined below)) against the Improvement Area #1 Assessed Property (as defined in the Service and Assessment Plan); and WHEREAS, the Council has found and determined that it is in the best interests of the City to issue its bonds to be designated "City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)" (the "Bonds"), such Bonds to be payable from and secured by the Pledged Revenues (as defined in the Indenture); and WHEREAS, the City is authorized by the PID Act to issue the Bonds for the purpose of (i) paying the Actual Costs (as defined in the Indenture), (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District and (iv) paying the costs of issuance of the Bonds; and WHEREAS, the Council has found and determined to approve (i) the issuance of the Bonds to finance the Improvement Area #1 Projects, (ii) the form, terms and provisions of the 2 Indenture securing the Bonds authorized hereby, (iii) the form, terms and provisions of a Bond Purchase Agreement (defined below) between the City and the Underwriter (defined below), (iv) a Limited Offering Memorandum (defined below), and (v) a Continuing Disclosure Agreement (defined below); and WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: Section 1. Findings. The findings and determinations set forth in the preamble hereof are hereby incorporated by reference for all purposes as if set forth in full herein. Section 2. Approval of Issuance of Bonds and Indenture of Trust. (a) The issuance of the Bonds in the principal amount of $7,419,000 for the purpose of (i) paying the Actual Costs, (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District, and (iv) paying the costs of issuance of the Bonds, is hereby authorized and approved. (b) The Bonds shall be issued and secured under that certain Indenture of Trust (the "Indenture"), dated as of September 15, 2023, between the City and Regions Bank, an Alabama state banking corporation with offices in Houston, Texas, as trustee (the "Trustee"), with such changes as may be necessary or desirable to carry out the intent of this Ordinance and as approved by the Mayor of the City, such approval to be evidenced by the execution and delivery of the Indenture, which Indenture is hereby approved in substantially final form attached hereto as Exhibit A and incorporated herein as a part hereof for all purposes. The Mayor or Mayor Pro-Tem of the City is hereby authorized and directed to execute the Indenture and the City Secretary is hereby authorized and directed to attest such signature of the Mayor or Mayor Pro-Tem. (c) The Bonds shall be dated, shall mature on the date or dates and in the principal amount or amounts, shall bear interest, shall be registered as to both principal and interest, shall be subject to redemption and shall have such other terms and provisions as set forth in the Indenture. The Bonds shall be in substantially the form set forth in the Indenture, with such insertions, omissions and modifications as may be required to conform the form of Bond to the actual terms of the Bonds. The Bonds shall be payable from and secured by the Pledged Revenues (as defined in the Indenture) and other assets of the Trust Estate (as defined in the Indenture) pledged to the Bonds, and shall never be payable from ad valorem taxes or any other funds or revenues of the City. Section 3. Sale of Bonds; Approval of Bond Purchase Agreement. The Bonds shall be sold to FMSbonds, Inc. (the "Underwriter") at the price and on the terms and provisions set forth in that certain Bond Purchase Agreement (the "Purchase Agreement"), dated the date hereof, between the City and the Underwriter, attached hereto as Exhibit B and incorporated herein as a part hereof for all purposes, which terms of sale are declared to be in the best interest of the City. The form, terms and provisions of the Purchase Agreement are hereby authorized 3 and approved and the Mayor or Mayor Pro-Tem of the City is hereby authorized and directed to execute and deliver the Purchase Agreement. The Mayor’s or Mayor Pro-Tem’s signature on the Purchase Agreement may be attested by the City Secretary. The Initial Bond shall be registered in the name of the Underwriter. Section 4. Limited Offering Memorandum. The form and substance of the Preliminary Limited Offering Memorandum and any addenda, supplement or amendment thereto and the final Limited Offering Memorandum for the Bonds and any addenda, supplement or amendment thereto (the "Limited Offering Memorandum") are hereby approved and adopted in all respects. The Limited Offering Memorandum, with such appropriate variations as shall be approved by the Mayor and Mayor Pro-Tem of the City and the Underwriter, may be used by the Underwriter in the offering and sale of the Bonds. The City Secretary is hereby authorized and directed to include and maintain a copy of the Preliminary Limited Offering Memorandum (as defined in the Purchase Agreement) and the Limited Offering Memorandum and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Limited Offering Memorandum in the offering of the Bonds is hereby ratified, approved and confirmed. The City deems the Preliminary Limited Offering Memorandum final, within the meaning of Rule 15c2-12 issued by the United States Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), as of its date, except for the omission of information specified in Section (b)(1) of the Rule, as permitted by Section (b)(1) of the Rule. Notwithstanding the approval and delivery of such Preliminary Limited Offering Memorandum and Limited Offering Memorandum by the Council, the Council is not responsible for and proclaims no specific knowledge of the information contained in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum pertaining to the Improvement Area #1 Projects, the Developer or its financial ability, any builders, any landowners or the appraisal of the property in the District. Section 5. Continuing Disclosure Agreement. The City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) Continuing Disclosure Agreement of the Issuer (the "Continuing Disclosure Agreement") between the City, P3Works, LLC and Regions Bank is hereby authorized and approved in substantially final form attached hereto as Exhibit C and incorporated herein as a part hereof for all purposes, and the Mayor or Mayor Pro-Tem of the City is hereby authorized and directed to execute and deliver such Continuing Disclosure Agreement with such changes as may be required to carry out the purpose of this Ordinance and approved by the Mayor or Mayor Pro-Tem, such approval to be evidenced by the execution thereof. Section 6. Additional Actions. The Mayor, Mayor Pro Tem, Deputy Mayor Pro- Tem, the City Manager, the Finance Director and the City Secretary are hereby authorized and directed to take any and all actions on behalf of the City necessary or desirable to carry out the intent and purposes of this Ordinance and to issue the Bonds in accordance with the terms of this Ordinance. The Mayor, Mayor Pro Tem, Deputy Mayor Pro-Tem, the City Manager, the Finance Director and the City Secretary are hereby authorized and directed to execute and deliver any and all certificates, agreements, notices, instruction letters, requisitions and other documents which may be necessary or advisable in connection with the sale, issuance and delivery of the Bonds and the carrying out of the purposes and intent of this Ordinance. 4 Section 7. Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 8. Effective Date. This Ordinance is passed on one reading as authorized by Texas Government Code, Section 1201.028, and shall be effective immediately upon its passage and adoption. ------------------------------- A-1 EXHIBIT A INDENTURE OF TRUST INDENTURE OF TRUST By and Between CITY OF ANNA, TEXAS and REGIONS BANK, as Trustee DATED AS OF SEPTEMBER 15, 2023 SECURING $__________ CITY OF ANNA, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) TABLE OF CONTENTS Page ARTICLE I – DEFINITIONS, FINDINGS AND INTERPRETATION ....................................... 4 Section 1.1. Definitions........................................................................................................... 4 Section 1.2. Findings............................................................................................................. 12 Section 1.3. Table of Contents, Titles and Headings. ........................................................... 12 Section 1.4. Interpretation. .................................................................................................... 12 ARTICLE II – THE BONDS ........................................................................................................ 13 Section 2.1. Security for the Bonds. ..................................................................................... 13 Section 2.2. Limited Obligations. ......................................................................................... 13 Section 2.3. Authorization for Indenture. ............................................................................. 13 Section 2.4. Contract with Owners and Trustee. .................................................................. 13 ARTICLE III – AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS ................................................................................................................................ 14 Section 3.1. Authorization. ................................................................................................... 14 Section 3.2. Date, Denomination, Maturities, Numbers and Interest. .................................. 14 Section 3.3. Conditions Precedent to Delivery of Bonds. ..................................................... 15 Section 3.4. Medium, Method and Place of Payment. .......................................................... 15 Section 3.5. Execution and Registration of Bonds. .............................................................. 16 Section 3.7. Ownership. ........................................................................................................ 17 Section 3.8. Registration, Transfer and Exchange. ............................................................... 18 Section 3.9. Cancellation. ..................................................................................................... 19 Section 3.10. Temporary Bonds. ............................................................................................. 19 Section 3.11. Replacement Bonds. ......................................................................................... 19 Section 3.12. Book-Entry-Only System.................................................................................. 20 Section 3.13. Successor Securities Depository: Transfer Outside Book-Entry-Only System. 21 Section 3.14. Payments to Cede & Co. ................................................................................... 21 ARTICLE IV – REDEMPTION OF BONDS BEFORE MATURITY ....................................... 22 Section 4.1. Limitation on Redemption. ............................................................................... 22 Section 4.2. Mandatory Sinking Fund Redemption. ............................................................. 22 Section 4.3. Optional Redemption. ....................................................................................... 23 Section 4.5. Partial Redemption............................................................................................ 24 Section 4.6. Notice of Redemption to Owners. .................................................................... 24 Section 4.7. Payment upon Redemption. .............................................................................. 25 Section 4.8. Effect of Redemption. ....................................................................................... 25 ARTICLE V – FORM OF THE BONDS ..................................................................................... 25 Section 5.1. Form Generally. ................................................................................................ 25 Section 5.2. Form of the Bonds. ........................................................................................... 26 Section 5.3. Cusip Registration. ............................................................................................ 34 Section 5.4. Legal Opinion. .................................................................................................. 34 ARTICLE VI – FUNDS AND ACCOUNTS ............................................................................... 34 ii Section 6.1. Establishment of Funds and Accounts. ............................................................. 34 Section 6.2. Initial Deposits to Funds and Accounts. ........................................................... 36 Section 6.3. Pledged Revenue Fund. .................................................................................... 36 Section 6.4. Bond Fund. ........................................................................................................ 37 Section 6.5. Project Fund. ..................................................................................................... 38 Section 6.6. Redemption Fund. ............................................................................................. 39 Section 6.7. Reserve Fund. ................................................................................................... 40 Section 6.8. Rebate Fund: Rebatable Arbitrage. ................................................................... 42 Section 6.9. Administrative Fund. ........................................................................................ 42 Section 6.10. Investment of Funds. ......................................................................................... 42 ARTICLE VII – COVENANTS ................................................................................................... 44 Section 7.1. Confirmation of Assessments. .......................................................................... 44 Section 7.2. Collection and Enforcement of Assessments. ................................................... 44 Section 7.3. Against Encumbrances. ..................................................................................... 45 Section 7.4. Records, Accounts, Accounting Reports. ......................................................... 45 Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds. ............................ 45 ARTICLE VIII – LIABILITY OF CITY ...................................................................................... 48 Section 8.1. Liability of City................................................................................................. 48 ARTICLE IX – THE TRUSTEE .................................................................................................. 49 Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent. ......................... 49 Section 9.2. Trustee Entitled to Indemnity. .......................................................................... 50 Section 9.3. Responsibilities of the Trustee. ......................................................................... 50 Section 9.4. Property Held in Trust. ..................................................................................... 52 Section 9.5. Trustee Protected in Relying on Certain Documents. ....................................... 52 Section 9.6. Compensation. .................................................................................................. 52 Section 9.7. Permitted Acts. .................................................................................................. 53 Section 9.8. Resignation of Trustee. ..................................................................................... 53 Section 9.9. Removal of Trustee. .......................................................................................... 53 Section 9.10. Successor Trustee.............................................................................................. 54 Section 9.11. Transfer of Rights and Property to Successor Trustee. ..................................... 55 Section 9.12. Merger, Conversion or Consolidation of Trustee. ............................................ 55 Section 9.13. Trustee to File Continuation Statements. .......................................................... 55 Section 9.14. Accounts, Periodic Reports and Certificates. ................................................... 56 Section 9.15. Construction of Indenture. ................................................................................ 56 Section 9.16. Offering Documentation. .................................................................................. 56 ARTICLE X – MODIFICATION OR AMENDMENT OF THIS INDENTURE ....................... 56 Section 10.1. Amendments Permitted. .................................................................................... 56 Section 10.2. Owners’ Meetings. ............................................................................................ 57 Section 10.3. Procedure for Amendment with Written Consent of Owners. .......................... 57 Section 10.4. Procedure for Amendment not Requiring Owner Consent. .............................. 58 Section 10.5. Effect of Supplemental Indenture. .................................................................... 58 Section 10.6. Endorsement or Replacement of Bonds Issued after Amendments. ................. 59 Section 10.7. Amendatory Endorsement of Bonds. ............................................................... 59 iii Section 10.8. Waiver of Default. ............................................................................................ 59 Section 10.9. Execution of Supplemental Indenture. .............................................................. 59 ARTICLE XI – DEFAULT AND REMEDIES ............................................................................ 60 Section 11.1. Events of Default. ............................................................................................. 60 Section 11.2. Immediate Remedies for Default. ..................................................................... 60 Section 11.3. Restriction on Owner’s Action. ........................................................................ 61 Section 11.4. Application of Revenues and Other Moneys after Default. .............................. 62 Section 11.5. Effect of Waiver. ............................................................................................... 63 Section 11.6. Evidence of Ownership of Bonds. .................................................................... 63 Section 11.7. No Acceleration. ............................................................................................... 64 Section 11.8. Mailing of Notice. ............................................................................................. 64 Section 11.9. Exclusion of Bonds. .......................................................................................... 64 ARTICLE XII – GENERAL COVENANTS AND REPRESENTATIONS ............................... 64 Section 12.1. Representations as to Trust Estate. ................................................................... 64 Section 12.2. General. ............................................................................................................. 64 ARTICLE XIII – SPECIAL COVENANTS ................................................................................ 65 Section 13.1. Further Assurances; Due Performance. ............................................................ 65 Section 13.2. Other Obligations or Other Liens; Refunding Bonds. ...................................... 65 Section 13.3. Books of Record. .............................................................................................. 65 ARTICLE XIV – PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OF THE INDENTURE ................................................................................... 66 Section 14.1. Trust Irrevocable. .............................................................................................. 66 Section 14.2. Satisfaction of Indenture. .................................................................................. 66 Section 14.3. Bonds Deemed Paid. ......................................................................................... 66 ARTICLE XV - MISCELLANEOUS .......................................................................................... 67 Section 15.1. Benefits of Indenture Limited to Parties. .......................................................... 67 Section 15.2. Successor is Deemed Included in all References to Predecessor. .................... 67 Section 15.3. Execution of Documents and Proof of Ownership by Owners. ........................ 67 Section 15.4. No Waiver of Personal Liability. ...................................................................... 68 Section 15.5. Notices to and Demands on City and Trustee. .................................................. 68 Section 15.6. Partial Invalidity................................................................................................ 69 Section 15.7. Applicable Laws. .............................................................................................. 69 Section 15.8. Payment on Business Day. ................................................................................ 69 Section 15.9. Reimbursement Agreement Amendments and Supplements. ........................... 69 Section 15.10. Counterparts. ..................................................................................................... 69 Section 15.11. Texas Government Code Verifications. ............................................................ 69 INDENTURE OF TRUST THIS INDENTURE, dated as of September 15, 2023, is by and between the CITY OF ANNA, TEXAS (the "City"), and REGIONS BANK, an Alabama state banking corporation with offices in Houston, Texas, as trustee (together with its successors, the "Trustee"). Capitalized terms used in the preambles, recitals and granting clauses and not otherwise defined shall have the meanings assigned thereto in Article I. WHEREAS, on February 15, 2022, a petition (the "Petition") was submitted and filed with the City Secretary of the City (the "City Secretary") pursuant to the Public Improvement District Assessment Act, Chapter 372, Texas Local Government Code, as amended (the "Act" or "PID Act"), requesting the creation of a public improvement district located within the corporate limits of the City to be known as "The Woods at Lindsey Place Public Improvement District" (the "District"); and WHEREAS, the Petition contained the signatures of the owners of taxable real property representing more than fifty percent of the appraised value of taxable real property liable for assessment within the District, as determined by the then current ad valorem tax rolls of the Collin Central Appraisal District, and the signatures of record property owners who own taxable real property that constitutes more than fifty percent of the area of all taxable property that is liable for assessment by the District; and WHEREAS, on January 24, 2023, the City Council of the City (the "City Council") adopted Resolution No. 2023-01-1362 accepting the Petition and calling a public hearing on the creation of the District on February 14, 2023; and WHEREAS, on February 14, 2023, after due notice, the City Council held the public hearing in the manner required by law on the advisability of the improvement projects and services described in the Petition as required by Section 372.009 of the PID Act and, on February 14, 2023, the City Council made the findings required by Section 372.009(b) of the PID Act and, by Resolution No. 2023-02-1378 adopted by the City Council, authorized the District in accordance with its finding as to the advisability of the improvement projects and services; and WHEREAS, following the adoption of Resolution No. 2023-02-1378, the City recorded said Resolution No .2023-02-1378in the real property records of Collin County, Texas; and WHEREAS, no written protests of the District from any owners of record of property within the District were filed with the City Secretary within 20 days after the date of publication of such notice; and WHEREAS, the City, pursuant to Section 372.016(b) of the PID Act, published notice of a public hearing in a newspaper of general circulation in the City where the proposed improvements are to be undertaken to consider the proposed "Assessment Roll" and the "Service and Assessment Plan" and the levy of the "Assessments" on property in the District; and WHEREAS, on February 14, 2023, the City Council called for a public hearing to be held to consider the proposed Assessment Roll, the Service and Assessment Plan and the levy of the Assessments on the Assessed Property, and the City (i) published notice of such public hearing 2 in a newspaper of general circulation in the City and in the extraterritorial jurisdiction of the City where the proposed improvements are to be undertaken pursuant to Section 372.0l6(b) of the Act and (ii) mailed notice of such public hearing to the last known address of the owners of the property liable for the Assessments pursuant to Section 372.0l6(c) of the Act; and WHEREAS, the City Council convened the public hearing on March 14, 2023, at which all persons who appeared, or requested to appear, in person or by their attorney, were given the opportunity to contend for or contest the Service and Assessment Plan, the Assessment Roll and the Assessments, and to offer testimony pertinent to any issue presented on the amount of the Assessments, the allocation of Improvement Area #1 Project Costs, the purposes of the Assessments, the special benefits of the Assessments and the penalties and interest on annual installments and on delinquent annual installments of the Assessments; and WHEREAS, at the March 14, 2023 public hearing referenced above, there were no written objections or evidence submitted to the City Secretary in opposition to the Service and Assessment Plan, the allocation of Improvement Area #1 Project Costs, the Assessment Roll or the levy of the Assessments; and WHEREAS, the City Council closed the public hearing and, after considering all written and documentary evidence presented at the public hearing, including all written comments and statements filed with the City, at the meeting held on March 14, 2023, approved and accepted the Service and Assessment Plan in conformity with the requirements of the PID Act and adopted the Assessment Ordinance, which Assessment Ordinance approved the Assessment Roll and levied the Assessments; and WHEREAS, the City Council is authorized by the PID Act to issue revenue bonds payable from the Assessments for the purpose of (i) paying a portion of the Improvement Area #1 Project Costs, (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District and (iv) paying the costs of issuance of the Bonds; and WHEREAS, the City Council now desires to issue its revenue bonds, in accordance with the PID Act, such bonds to be entitled "City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)" (the "Bonds"), such Bonds being payable solely from the Trust Estate and for the purposes set forth in this preamble; and WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms set forth in this Indenture; NOW, THEREFORE, the City, in consideration of the foregoing premises and acceptance by the Trustee of the trusts herein created, of the purchase and acceptance of the Bonds by the Owners thereof, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN, and DELIVER to the Trustee for the benefit of the Owners, a security interest in all of the moneys, rights and properties described in the Granting Clauses hereof, as follows (collectively, the "Trust Estate"): 3 FIRST GRANTING CLAUSE The Pledged Revenues, as herein defined, including all moneys and investments held in the Pledged Funds, including any contract or any evidence of indebtedness related thereto or other rights of the City to receive any of such moneys or investments, whether now existing or hereafter coming into existence, and whether now or hereafter acquired; and SECOND GRANTING CLAUSE Any and all other property or money of every name and nature which is, from time to time hereafter by delivery or by writing of any kind, conveyed, pledged, assigned or transferred, to the Trustee as additional security hereunder by the City or by anyone on its behalf or with its written consent, and the Trustee is hereby authorized to receive any and all such property or money at any and all times and to hold and apply the same subject to the terms thereof; and THIRD GRANTING CLAUSE Any and all proceeds of the foregoing property and proceeds from the investment of the foregoing property; TO HAVE AND TO HOLD the Trust Estate, whether now owned or hereafter acquired, unto the Trustee and its successors or assigns; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the benefit of all present and future Owners of the Bonds from time to time issued under and secured by this Indenture, and for enforcement of the payment of the Bonds in accordance with their terms, and for the performance of and compliance with the obligations, covenants, and conditions of this Indenture; PROVIDED, HOWEVER, if the City or its assigns shall well and truly pay, or cause to be paid, the principal or Redemption Price of and the interest on the Bonds at the times and in the manner stated in the Bonds, according to the true intent and meaning thereof, then this Indenture and the rights hereby granted shall cease, terminate and be void; otherwise this Indenture is to be and remain in full force and effect; IN ADDITION, the Bonds are special, limited obligations of the City payable solely from the Trust Estate, as and to the extent provided in this Indenture. The Bonds do not give rise to a charge against the general credit or taxing powers of the City and are not payable except as provided in this Indenture. Notwithstanding anything to the contrary herein, the Owners of the Bonds shall never have the right to demand payment thereof out of any funds of the City other than the Trust Estate. The City shall have no legal or moral obligation to pay for the Bonds out of any funds of the City other than the Trust Estate. THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated, and delivered and the Trust Estate hereby created, assigned, and pledged is to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses, and purposes as hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective Owners from time to time of the Bonds as follows: 4 ARTICLE I DEFINITIONS, FINDINGS AND INTERPRETATION Section 1.1. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Indenture, the following terms shall have the meanings specified below: "Account", in the singular, means any of the accounts established pursuant to Section 6.1 of this Indenture, and "Accounts", in the plural, means, collectively, all of the accounts established pursuant to Section 6.1 of this Indenture. “Actual Costs” mean with respect to Authorized Improvements, the Developer’s demonstrated, reasonable, allocable, and allowable costs of constructing such Authorized Improvements, as specified in a payment request in a form that has been reviewed and approved by the City. Actual Costs may include: (1) the costs incurred by or on behalf of the Developer (either directly or through affiliates) for the design, planning, financing, administration/management, acquisition, installation, construction and/or implementation of such Authorized Improvements; (2) the fees paid for obtaining permits, licenses, or other governmental approvals for such Authorized Improvements; (3) construction management fees equal to 4% of costs; (4) the costs incurred by or on behalf of the Developer for external professional costs, such as engineering, geotechnical, surveying, land planning, architectural landscapers, appraisals, legal, accounting, and similar professional services; (5) all labor, bonds, and materials, including equipment and fixtures, by contractors, builders, and materialmen in connection with the acquisition, construction, or implementation of the Authorized Improvements; (6) all related permitting and public approval expenses, architectural, engineering, and consulting fees, taxes, and governmental fees and charges. “Additional Interest” means the amount collected by the application of the Additional Interest Rate. "Additional Interest Rate" means the 0.50% additional interest charged on the Assessments pursuant to Section 372.018 of the PID Act. "Administrative Fund" means that Fund established by Section 6.1 of this Indenture and administered pursuant to Section 6.9 of this Indenture. "Administrator" means an employee or designee of the City who shall have the responsibilities provided in the Service and Assessment Plan, this Indenture, or any other agreement or document approved by the City related to the duties and responsibilities of the administration of the District. “Annual Collection Costs” mean the actual or budgeted costs and expenses related to the creation and operation of the District, the issuance and sale of PID Bonds, and the construction, operation, and maintenance of the Authorized Improvements, including, but not limited to, costs and expenses for: (1) the Administrator and City staff; (2) legal counsel, engineers, accountants, 5 financial advisors, and other consultants engaged by the City; (3) calculating, collecting, and maintaining records with respect to Assessments and Annual Installments, including the costs of foreclosure; (4) preparing and maintaining records with respect to Assessment Roll and Annual Service Plan Updates; (5) issuing, paying, and redeeming PID Bonds; (6) investing or depositing Assessments and Annual Installments; (7) complying with the Service and Assessment Plan and the PID Act with respect to the issuance and sale of PID Bonds, including continuing disclosure requirements; and (8) the paying agent/registrar and Trustee in connection with PID 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 Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of Sinking Fund Installments), and (ii) the principal amount of the Outstanding Bonds due in such Bond Year (including any Sinking Fund Installments due in such Bond Year). "Annual Installment" means, with respect to each Parcel of Assessed Property, each annual payment of: (i) the principal of and interest on the Assessments as shown on the Assessment Roll or in an Annual Service Plan Update, and 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. "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. "Applicable Laws" means the PID Act, and all other laws or statutes, rules, or regulations, and any amendments thereto, of the State or of the United States of America, by which the City and its powers, securities, operations, and procedures are, or may be, governed or from which its powers may be derived. "Assessed Property" means the property located in Improvement Area #1 that benefits from the Improvement Area #1 Projects, and is defined as the "Improvement Area #1 Assessed Property" in the Service and Assessment Plan. "Assessment Ordinance" means the ordinance adopted by the City Council on March 14, 2023, as may be amended or supplemented, that levied the Assessments on the Assessed Property. "Assessment Revenues" means the revenues received by the City from the collection of Assessments, including Prepayments, Annual Installments and Foreclosure Proceeds. "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. 6 "Assessments" means an assessment levied against Assessed Property based on the special benefit conferred on such Assessed Property by the Improvement Area #1 Projects. "Attorney General" means the Attorney General of the State. "Authorized Denomination" means $100,000 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. "Authorized Improvements" shall have the meaning prescribed thereto in the Service and Assessment Plan. "Bond" means any of the Bonds. "Bond Counsel" means McCall, Parkhurst & Horton L.L.P. or any other attorney or firm of attorneys designated by the City that are nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities. "Bond Fund" means the Fund established pursuant to Section 6.1 and administered pursuant to Section 6.4 of this Indenture. "Bond Ordinance" means the ordinance adopted by the City Council on December 13, 2023 authorizing the issuance of the Bonds pursuant to this Indenture. "Bond Pledged Revenue Account" means the Account in the Pledged Revenue Fund established pursuant to Section 6.1 of this Indenture. "Bond Year" means the one-year period beginning on October 1 in each year and ending on September 30 in the following year. "Bonds" means the City’s bonds authorized to be issued by Section 3.1 of this Indenture entitled "City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)" and, in the event the City issues Refunding Bonds pursuant to Section 13.2 hereof, the term "Bonds" shall include such Refunding Bonds. "Business Day" means any day other than a Saturday, Sunday or legal holiday in the State observed as such by the City or the Trustee or any national holiday observed by the Trustee. "Certificate for Payment" means, with respect to payment or reimbursement of Improvement Area #1 Project Costs, a certificate substantially in the form of Exhibit A attached to the Reimbursement Agreement and executed by a Person approved by the City Representative that is delivered to the City Representative and the Trustee specifying the amount of work performed and the Improvement Area #1 Project Costs thereof, and requesting payment for such Improvement Area #1 Project Costs from money on deposit in the Improvement Area #1 Bond 7 Improvement Account of the Project Fund as further described in the Reimbursement Agreement and Section 6.5 of this Indenture. "City Certificate" means written instructions by the City, executed by a City Representative. "City Representative" means that official or agent of the City authorized by the City Council to undertake the action referenced herein. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions. "Comptroller" means the Comptroller of Public Accounts of the State. "Costs of Issuance Account" means the Account in the Project Fund established pursuant to Section 6.1 of this Indenture. "Defeasance Securities" means Investment Securities then authorized by applicable law for the investment of funds to defease public securities. "Delinquency and Prepayment Reserve Account" means the reserve account administered by the City and segregated from other funds of the City and established by Section 6.1 of this Indenture. "Delinquency and Prepayment Reserve Requirement" means an amount equal to 5.5% 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. "Delinquent Collection Costs" mean costs related to the foreclosure on Assessed Property and the costs of collection of delinquent Assessments, delinquent 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. "Delivery Date" means September 19, 2023, which is the date of delivery of the Bonds to the initial purchaser or purchasers thereof against payment therefor. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Indenture, the transfer/payment office designated by the Paying Agent/Registrar, which shall initially be located in Houston, Texas, and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "Developer" means D.R. Horton – Texas, Ltd., a Texas limited partnership, and any successor thereto. 8 "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. "Foreclosure Proceeds" means the proceeds, including interest and penalty interest, received by the City from the enforcement of the Assessments against any Assessed Property, whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs. "Fund", in the singular, means any of the funds established pursuant to Section 6.1 of this Indenture, and "Funds", in the plural, means, collectively, all of the funds established pursuant to Section 6.1 of this Indenture. "Improvement Area #1" means that portion of the District generally described in Section II of the Service and Assessment Plan and generally shown in Exhibit A-3 to the Service and Assessment Plan and as specifically described in Exhibit I-2 to the Service and Assessment Plan. "Improvement Area #1 Project Costs" means the Actual Costs, as defined in the Service and Assessment Plan (excluding Annual Collection Costs), of the Improvement Area #1 Projects. "Improvement Area #1 Projects" shall have the meaning assigned thereto in the Service and Assessment Plan. "Indenture" means this Indenture of Trust as originally executed or as it may be from time to time supplemented or amended by one or more indentures supplemental hereto and entered into pursuant to the applicable provisions hereof. "Independent Financial Consultant" means any consultant or firm of such consultants appointed by the City who, or each of whom: (i) is judged by the City, as the case may be, to have experience in matters relating to the issuance and/or administration of the Bonds; (ii) is in fact independent and not under the domination of the City; (iii) does not have any substantial interest, direct or indirect, with or in the City, or any owner of real property in the District, or any real property in the District; and (iv) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City. "Initial Bonds" means the Initial Bonds authorized by Section 5.2 of this Indenture. "Interest Payment Date" means the date or dates upon which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being on March 15 and September 15 of each year, commencing March 15, 2024. "Investment Securities" means those authorized investments described in the Public Funds Investment Act, Chapter 2256, Government Code, as amended, which investments are, at the time made, included in and authorized by the City’s official investment policy as approved 9 by the City Council from time to time. Such Investment Securities may include money market funds that are rated in either of the two highest categories by a rating agency, including funds for which the Trustee and/or its affiliates provide investment advisory or other management services; provided that such money market funds are authorized investments described in the Public Funds Investment Act, Chapter 2256, Government Code, as amended. "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. “Other Obligations” means any bonds, temporary notes, time warrants, or an obligation under an installment sale contract or reimbursement agreement secured in whole or in part by an assessment, other than the Assessments securing the Bonds, levied against property within Improvement Area #1 in accordance with the PID Act. "Outstanding" means, as of any particular date when used with reference to Bonds, all Bonds authenticated and delivered under this Indenture except (i) any Bond that has been canceled by the Trustee (or has been delivered to the Trustee for cancellation) at or before such date, (ii) any Bond for which the payment of the principal or Redemption Price of and interest on such Bond shall have been made as provided in Article IV, (iii) any Bond in lieu of or in substitution for which a new Bond shall have been authenticated and delivered pursuant to Section 3.10 of this Indenture and (iv) any Bond alleged to have been mutilated, destroyed, lost or stolen which have been paid as provided in this Indenture. "Owner" means the Person who is the registered owner of a Bond or Bonds, as shown in the Register, which shall be Cede & Co., as nominee for DTC, so long as the Bonds are in book- entry only form and held by DTC as securities depository in accordance with Section 3.11 of this Indenture. "Parcel" or "Parcels" means a parcel or parcels within the District identified by either a tax map identification number assigned by the Collin Central Appraisal District for real property tax purposes or by lot and block number in a final subdivision plat recorded in the real property records of Collin County. "Paying Agent/Registrar" means initially the Trustee, or any successor thereto as provided in this Indenture. "Person" or "Persons" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Pledged Funds" means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund, the Reserve Fund and the Redemption Fund. "Pledged Revenue Fund" means that fund established pursuant to Section 6.1 of this Indenture and administered pursuant to Section 6.3 of this Indenture. "Pledged Revenues" means, collectively, the (i) Assessment Revenues (excluding the portion of the Assessments and Annual Installments collected for the payment of Annual 10 Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan), (ii) the moneys held in any of the Pledged Funds and (iii) any additional revenues that the City may pledge to the payment of the Bonds. "Prepayment" means the payment of all or a portion of an Assessment before the due date thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be treated as the payment of the regularly scheduled Assessment. "Principal and Interest Account" means the Account in the Bond Fund established pursuant to Section 6.1 of this Indenture. "Project Fund" means that fund established pursuant to Section 6.1 and administered pursuant to Section 6.5. "Purchaser" means the initial purchaser of the Bonds. "Rebatable Arbitrage" means rebatable arbitrage as defined in Section 1.148-3 of the Treasury Regulations. "Rebate Fund" means that fund established pursuant to Section 6.1 of this Indenture and administered pursuant to Section 6.8 of this Indenture. "Record Date" means the close of business on the last Business Day of the month next preceding an Interest Payment Date. "Redemption Fund" means that fund established pursuant to Section 6.1 of this Indenture and administered pursuant to Section 6.6 of this Indenture. "Redemption Price" means, when used with respect to any Bond or portion thereof, the principal amount of such Bond or such portion thereof plus the applicable premium, if any, plus accrued and unpaid interest on such Bond to the date fixed for redemption payable upon redemption thereof pursuant to this Indenture. "Refunding Bonds" means bonds issued to refund all or any portion of the Outstanding Bonds and secured by a parity lien with the Outstanding Bonds on the Pledged Revenues, as more specifically described in the Supplemental Indenture authorizing such Refunding Bonds. "Register" means the register specified in Article III of this Indenture. "Reimbursement Agreement" means the Improvement Area #1 Funding and Reimbursement Agreement, The Woods at Lindsey Place Public Improvement District, by and between the City and the Developer, dated as of March 14, 2023, as may be amended and/or supplemented from time to time, which provides, in part, for the construction and maintenance of the Improvement Area #1 Projects, the issuance of the Bonds, the payment or reimbursement of costs of Improvement Area #1 Projects not paid from the Project Fund, and other matters related thereto. 11 "Reserve Account" means the Account in the Reserve Fund established pursuant to Section 6.1 of this Indenture. "Reserve Fund" means that fund established pursuant to Section 6.1 of this Indenture and administered pursuant to Section 6.7 of this Indenture. "Reserve Fund Obligations" means cash or Investment Securities. "Reserve Account Requirement" means the least of: (i) Maximum Annual Debt Service on the Bonds as of the date of issuance, (ii) 125% of average Annual Debt Service on the Bonds as of the date of issuance, and (iii) 10% of the proceeds of the Bonds; provided, however, that such amount shall be reduced by the amount of any transfers made pursuant to Section 6.7(c); and provided further that as a result of (1) an optional redemption pursuant to Section 4.3 or (2) an extraordinary optional redemption pursuant to Section 4.4, 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 Reserve Account Requirement defined above. "Service and Assessment Plan" means the document, including the Assessment Roll, which is attached as Exhibit A of the Assessment Ordinance, as may be updated, amended and supplemented from time to time. "Sinking Fund Installment" means the amount of money to redeem or pay at maturity the principal of a Stated Maturity of Bonds payable from such installments at the times and in the amounts provided in Section 4.2 of this Indenture. "Special Record Date" has the meaning set forth in in the form of Bond included in Section 5.2 hereof. "State" means the State of Texas. "Stated Maturity" means the date the Bonds, or any portion of the Bonds, as applicable, are scheduled to mature without regard to any redemption or Prepayment. "Supplemental Indenture" means an indenture which has been duly executed by the Trustee and a City Representative pursuant to an ordinance adopted by the City Council and which indenture amends or supplements this Indenture, but only if and to the extent that such indenture is specifically authorized hereunder. "Treasury Regulations" shall have the meaning assigned to such term in Section 7.5(c). "Trust Estate" means the Trust Estate described in the granting clauses of this Indenture, and the Trust Estate shall only include Pledged Revenues related to the Assessments levied on the Assessed Property within Improvement Area #1, unless the City pledges additional revenues to the payment of the Bonds, which additional pledge may only be created in a Supplemental Indenture. 12 "Trustee" means Regions Bank, Houston, Texas, an Alabama state banking corporation with offices in Houston, Texas and authorized to do business in the State, in its capacity as trustee hereunder, and its successors, and any other corporation or association that may at any time be substituted in its place, as provided in Article IX, such entity to serve as Trustee and Paying Agent/Registrar for the Bonds. "Value of Investment Securities" means the amortized value of any Investment Securities, provided, however, that all United States of America, United States Treasury Obligations – State and Local Government Series shall be valued at par and those obligations which are redeemable at the option of the holder shall be valued at the price at which such obligations are then redeemable. The computations shall include accrued interest on the investment securities paid as a part of the purchase price thereof and not collected. For the purposes of this definition "amortized value," when used with respect to a security purchased at par means the purchase price of such security and when used with respect to a security purchased at a premium above or discount below par, means as of any subsequent date of valuation, the value obtained by dividing the total premium or discount by the number of interest payment dates remaining to maturity on any such security after such purchase and by multiplying the amount as calculated by the number of interest payment dates having passed since the date of purchase and (i) in the case of a security purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of a security purchased at a discount, by adding the product thus obtained to the purchase price. Section 1.2. Findings. The declarations, determinations and findings declared, made and found in the preamble to this Indenture are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.3. Table of Contents, Titles and Headings. The table of contents, titles, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Indenture or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.4. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Words importing persons include any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or agency or political subdivision thereof. (c) Any reference to a particular Article or Section shall be to such Article or Section of this Indenture unless the context shall require otherwise. 13 (d) This Indenture and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Indenture. ARTICLE II THE BONDS Section 2.1. Security for the Bonds. (a) The Bonds, as to principal, interest and redemption premium, if any, are and shall be equally and ratably secured by and payable from a first lien on and pledge of the Trust Estate. (b) The lien on and pledge of the Trust Estate shall be valid and binding and fully perfected from and after the Delivery Date, without physical delivery or transfer of control of the Trust Estate, the filing of this Indenture or any other act; all as provided in Chapter 1208 of the Texas Government Code, as amended, which applies to the issuance of the Bonds and the pledge of the Trust Estate granted by the City under this Indenture, and such pledge is therefore valid, effective and perfected. If State law is amended at any time while the Bonds are Outstanding such that the pledge of the Trust Estate granted by the City under this Indenture is to be subject to the filing requirements of Chapter 9, Business and Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under State law to comply with the applicable provisions of Chapter 9, Business and Commerce Code and enable a filing to perfect the security interest in said pledge to occur. Section 2.2. Limited Obligations. The Bonds are special and limited obligations of the City, payable solely from and secured solely by the Trust Estate, including the Pledged Revenues; and the Bonds shall never be payable out of funds raised or to be raised by taxation or from any other revenues, properties or income of the City. Section 2.3. Authorization for Indenture. The terms and provisions of this Indenture and the execution and delivery hereof by the City to the Trustee have been duly authorized by official action of the City Council. The City has ascertained and it is hereby determined and declared that the execution and delivery of this Indenture is necessary to carry out and effectuate the purposes set forth in the preambles of this Indenture and that each and every covenant or agreement herein contained and made is necessary, useful and/or convenient in order to better secure the Bonds and is a contract or agreement necessary, useful and/or convenient to carry out and effectuate the purposes herein described. Section 2.4. Contract with Owners and Trustee. (a) The purposes of this Indenture are to establish a lien and the security for, and to prescribe the minimum standards for the authorization, issuance, execution and delivery of, the 14 Bonds and to prescribe the rights of the Owners, and the rights and duties of the City and the Trustee. (b) In consideration of the purchase and acceptance of any or all of the Bonds by those who shall purchase and hold the same from time to time, the provisions of this Indenture shall be a part of the contract of the City with the Owners, and shall be deemed to be and shall constitute a contract among the City, the Owners, and the Trustee. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.1. Authorization. The Bonds are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State, including particularly the PID Act. The Bonds shall be issued in the aggregate principal amount of $__________ for the purpose of (i) paying a portion of the Improvement Area #1 Project Costs, (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District and (iv) paying the costs of issuance of the Bonds. Section 3.2. Date, Denomination, Maturities, Numbers and Interest. (a) The Bonds shall be dated the Delivery Date and shall be issued in Authorized Denominations. The Bonds shall be in fully registered form, without coupons, and shall be numbered separately from R-1 upward, except the Initial Bond, which shall be numbered T-1. (b) Interest shall accrue and be paid on each Bond from the later of the Delivery Date or the most recent Interest Payment Date to which interest has been paid or provided for, at the rate per annum set forth below until the principal thereof has been paid on the maturity date specified below, or on a date of earlier redemption, or otherwise provided for. Such interest shall be payable semiannually on March 15 and September 15 of each year, commencing March 15, 2024, computed on the basis of a 360-day year of twelve 30-day months. (c) The Bonds shall mature on September 15 in the years and in the principal amounts and shall bear interest at the rates set forth below: Year Principal Amount Interest Rate 20__ 20__ 20__ (d) The Bonds shall be subject to mandatory sinking fund redemption, optional redemption, and extraordinary optional redemption prior to maturity as provided in Article IV, and shall otherwise have the terms, tenor, denominations, details, and specifications as set forth in the form of Bond set forth in Section 5.2. 15 Section 3.3. Conditions Precedent to Delivery of Bonds. The Bonds shall be executed by the City and delivered to the Trustee, whereupon the Trustee shall authenticate the Bonds and, upon payment of the purchase price of the Bonds, shall deliver the Bonds upon the order of the City, but only upon delivery to the Trustee of: (a) a certified copy of the Assessment Ordinance; (b) a certified copy of the Bond Ordinance; (c) a copy of the executed Reimbursement Agreement with all executed amendments thereto; (d) a copy of this Indenture executed by the Trustee and the City; (e) an executed City Certificate directing the authentication and delivery of the Bonds, describing the Bonds to be authenticated and delivered, designating the purchasers to whom the Bonds are to be delivered, stating the purchase price of the Bonds and stating that all items required by this Section are therewith delivered to the Trustee; (f) an executed Signature and No-Litigation Certificate; (g) an executed opinion of Bond Counsel; and (h) the approving opinion of the Attorney General of the State and the State Comptroller’s registration certificate. Section 3.4. Medium, Method and Place of Payment. (a) Principal of and interest on the Bonds shall be paid in lawful money of the United States of America, as provided in this Section. (b) Interest on the Bonds shall be payable to the Owners thereof as shown in the Register at the close of business on the relevant Record Date or Special Record Date, as applicable. (c) Interest on the Bonds shall be paid by check, dated as of the Interest Payment Date, and sent, first class United States mail, postage prepaid, by the Paying Agent/Registrar to each Owner at the address of each as such appears in the Register or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the Owner shall bear all risk and expense of such other banking arrangement. (d) The principal of each Bond shall be paid to the Owner of such Bond on the due date thereof, whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar. 16 (e) If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in Section 3.2 of this Indenture. (f) Unclaimed payments of amounts due hereunder shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Bonds to which such unclaimed payments pertain. Subject to any escheat, abandoned property, or similar law of the State, any such payments remaining unclaimed by the Owners entitled thereto for three (3) years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains after the retirement of all Outstanding Bonds, shall be paid to the City to be used for any lawful purpose. Thereafter, none of the City, the Paying Agent/Registrar, or any other Person shall be liable or responsible to any holders of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to any applicable escheat law or similar law of the State. Section 3.5. Execution and Registration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor (or in the Mayor’s absence, the Mayor Pro-Tem) and City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Indenture unless and until there appears thereon the Certificate of Trustee substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Trustee. It shall not be required that the same officer or authorized signatory of the Trustee sign the Certificate of Trustee on all of the Bonds. In lieu of the executed Certificate of Trustee described above, the Initial Bond delivered on the Delivery Date shall have attached thereto the Comptroller’s Registration Certificate substantially in the form provided herein, manually executed by the Comptroller, or by his duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General, is a valid and binding obligation of the City, and has been registered by the Comptroller. 17 (d) On the Delivery Date, one Initial Bond representing the entire principal amount of all Bonds, payable in stated installments to the Purchaser, or its designee, executed with the manual or facsimile signatures of the Mayor (or in the Mayor’s Absence, the Mayor Pro-Tem) and the City Secretary, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to the Purchaser or its designee. Upon payment for the Initial Bond, the Trustee shall cancel the Initial Bond and deliver to DTC on behalf of the Purchaser one registered definitive Bond for each year of maturity of the Bonds, in the aggregate principal amount of all Bonds for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.6 Refunding Bonds. (a) Except in accordance with the provisions of this Indenture, including Section 13.2, the City shall not issue additional bonds, notes or other obligations payable from any portion of the Trust Estate, other than Refunding Bonds. The City reserves the right to issue Refunding Bonds, the proceeds of which would be utilized to refund all or any portion of the Outstanding Bonds or Outstanding Refunding Bonds and to pay all costs incident to the Refunding Bonds, as authorized by the laws of the State of Texas. Except as limited by the terms of this Indenture, including Section 13.2, the City reserves the right to incur debt payable from sources other than the Trust Estate, including revenue derived from contracts with other entities, including private corporations, municipalities and political subdivisions issued particularly for the purchase, construction, improvement, extension, replacement, enlargement or repair of the facilities needed in performing any such contract. (b) The principal of all Refunding Bonds must be scheduled to be paid, be subject to mandatory sinking fund redemption or mature on September 15 of the years in which such principal is scheduled to be paid. All Refunding Bonds must bear interest at a fixed rate and any interest payment dates for Refunding Bonds must be March 15 and September 15. The date, rate or rates of interest on, interest payment dates, maturity dates, redemption and all other terms and provisions of Refunding Bonds shall be set forth in a Supplemental Indenture. (c) Upon their authorization by the City, the Refunding Bonds of a series issued under this Section 3.6 and in accordance with Article IV hereof shall be issued and shall be delivered to the purchasers or owners thereof, but before, or concurrently with, the delivery of said Refunding Bonds to such purchasers or owners there shall have been filed with the Trustee the items required by Section 3.3 above. Section 3.7. Ownership. (a) The City, the Trustee, the Paying Agent/Registrar and any other Person may treat the Person in whose name any Bond is registered as the absolute owner of such Bond for the purpose of making and receiving payment as provided herein (except interest shall be paid to the Person in whose name such Bond is registered on the Record Date or Special Record Date, as applicable) and for all other purposes, whether or not such Bond is overdue, and none of the City, the Trustee or the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. 18 (b) All payments made to the Owner of any Bond shall be valid and effectual and shall discharge the liability of the City, the Trustee and the Paying Agent/Registrar upon such Bond to the extent of the sums paid. Section 3.8. Registration, Transfer and Exchange. (a) So long as any Bond remains Outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a Register in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Indenture. The Paying Agent/Registrar represents and warrants that it will maintain a copy of the Register, and shall cause the Register to be current with all registration and transfer information as from time to time may be applicable. (b) A Bond shall be transferable only upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in any Authorized Denomination and in an aggregate principal amount equal to the unpaid principal amount of the Bond presented for exchange. The Trustee is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) The Trustee is hereby authorized to authenticate and deliver Bonds transferred or exchanged in accordance with this Section. A new Bond or Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bond being transferred or exchanged, at the Designated Payment/Transfer Office, or sent by United States mail, first class, postage prepaid, to the Owner or his designee. Each transferred Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such transferred Bond is delivered. (e) Each exchange Bond delivered in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such exchange Bond is delivered. (f) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, or exchange of a Bond. (g) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Bond or portion thereof called for redemption prior to maturity within 19 forty-five (45) days prior to the date fixed for redemption; provided, however, such limitation shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.9. Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Indenture, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Indenture, shall be cancelled, and proper records shall be made regarding such payment, redemption, exchange, or replacement. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall dispose of cancelled Bonds in accordance with its record retention policies. Section 3.10. Temporary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of definitive Bonds, the proper officers of the City may execute and, upon the City’s request, the Trustee shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Indenture. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Trustee the Bonds in definitive form; thereupon, upon the presentation and surrender of the Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and the Trustee shall authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive form, in the Authorized Denomination, and in the same aggregate principal amount, as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.11. Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the City shall issue and the Trustee shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the City shall issue and the Trustee, pursuant to the applicable laws of the State and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount bearing a number 20 not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar and the Trustee to save them and the City harmless; (iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Trustee and the Paying Agent/Registrar and any tax or other governmental charge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Trustee. (c) After the delivery of such replacement Bond, if a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the Person to whom it was delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the City, the Paying Agent/Registrar or the Trustee in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Indenture to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. Section 3.12. Book-Entry-Only System. (a) The Bonds shall initially be issued in book-entry-only form and shall be deposited with DTC, which is hereby appointed to act as the securities depository therefor, in accordance with the blanket issuer letter of representations from the City to DTC. On the Delivery Date, the definitive Bonds shall be issued in the form of a single typewritten certificate for each maturity thereof registered in the name of Cede & Co., as nominee for DTC. (b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any Person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in 21 the Bonds, (ii) the delivery to any DTC Participant or any other Person, other than an Owner, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other Person, other than an Owner, as shown in the Register of any amount with respect to principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Indenture to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the Person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners as shown in the Register, as provided in this Indenture, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Indenture. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Indenture with respect to interest checks or drafts being mailed to the registered owner at the close of business on the Record Date or Special Record Date, as applicable, the word "Cede & Co." in this Indenture shall refer to such new nominee of DTC. Section 3.13. Successor Securities Depository: Transfer Outside Book-Entry-Only System. In the event that the City determines that DTC is incapable of discharging its responsibilities described herein and in the blanket issuer letter of representations from the City to DTC, the City shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Indenture. Section 3.14. Payments to Cede & Co. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds shall be made and given, respectively, in the manner provided in the blanket letter of representations from the City to DTC. 22 ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY Section 4.1. Limitation on Redemption. The Bonds shall be subject to redemption before their scheduled maturity only as provided in this Article IV. Section 4.2. Mandatory Sinking Fund Redemption. (a) The Bonds maturing on September 15 in each of the years 20__, 20__ and 20__ (collectively, 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 Article VI, on the dates and in the respective Sinking Fund Installments as set forth in the following schedule: 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__ 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__ September 15, 20__* 23 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__ September 15, 20__* __________ * Stated Maturity. (b) At least thirty (30) days prior to each mandatory sinking fund redemption date, and subject to any prior reduction authorized by this Indenture, the Trustee shall select by lot, or by any other customary method that results in a random selection, a principal amount of Bonds of such maturity equal to the Sinking Fund Installment amount of such Bonds to be redeemed, shall call such Bonds for redemption on such scheduled mandatory sinking fund redemption date, and shall give notice of such mandatory sinking fund redemption, as provided in Section 4.6. (c) The principal amount of Bonds required to be redeemed on any mandatory sinking fund redemption date pursuant to subparagraph (a) of this Section 4.2 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. (d) The Sinking Fund Installments of Term Bonds required to be redeemed on any mandatory sinking fund redemption date pursuant to subparagraph (a) of this Section 4.2 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 Sections 4.3 and 4.4, respectively, hereof, and not previously credited to a mandatory sinking fund redemption. Section 4.3. Optional Redemption. The City reserves the right and option to redeem 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. Section 4.4. Extraordinary Optional Redemption. The City reserves the right and option to redeem Bonds before their respective scheduled maturity dates, in whole or in part, on any date, at the Redemption Price, from amounts on deposit in the Redemption Fund as a result of Prepayments (including related transfers to the 24 Redemption Fund as provided in Section 6.7(c)) or any other transfers to the Redemption Fund under the terms of this Indenture. Section 4.5. Partial Redemption. (a) If less than all of the Bonds are to be redeemed pursuant to either Sections 4.2, 4.3 or 4.4, Bonds may be redeemed in minimum principal amounts of $1,000 or any integral thereof. Each Bond shall be treated as representing the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000. No redemption shall result in a Bond in a denomination of less than an Authorized Denomination; provided, however, if the amount of Outstanding Bonds is less than an Authorized Denomination after giving effect to such partial redemption, a Bond in the principal amount equal to the unredeemed portion, but not less than $1,000, may be issued. (b) If less than all of the Bonds are called for optional redemption pursuant to Section 4.3 hereof, the Trustee shall rely on directions provided in a City Certificate in selecting the Bonds to be redeemed. (c) If less than all of the Bonds are called for extraordinary optional redemption pursuant to Section 4.4 hereof, the Bonds or portion of a Bond to be redeemed shall be allocated on a pro rata basis (as nearly as practicable) among all Outstanding Bonds. (d) Upon surrender of any Bond for redemption in part, the Trustee in accordance with Section 3.7 of this Indenture, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge. Section 4.6. Notice of Redemption to Owners. (a) Upon written direction from the City to the Trustee of the exercise of any redemption provision provided hereunder, 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. (b) The notice shall state the redemption date, the Redemption Price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds Outstanding are to be redeemed, and subject to Section 4.5, an identification of the Bonds or portions thereof to be redeemed, any conditions to such redemption and that on the redemption date, if all conditions, if any, to such redemption have been satisfied, such Bond shall become due and payable. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. (d) 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 25 of such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction of any other prerequisites set forth in the notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient funds are not received, the notice shall be of no force and effect, the City shall not redeem the Bonds and the Trustee shall give notice, in the manner in which the notice of redemption was given, that the Bonds have not been redeemed. (e) The City has the right to rescind any optional redemption or extraordinary optional redemption described in Section 4.3 or 4.4 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 this 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. Section 4.7. Payment Upon Redemption. (a) The Trustee shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust an amount from the Redemption Fund or otherwise received by the Trustee from the City and shall use such funds solely for the purpose of paying the Redemption Price on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the designated corporate trust office of the Trustee on or after the date fixed for redemption, the Trustee shall pay the Redemption Price on such Bond to the date of redemption from the moneys set aside for such purpose. Section 4.8. Effect of Redemption. Notice of redemption having been given as provided in Section 4.6 of this 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. ARTICLE V FORM OF THE BONDS Section 5.1. Form Generally. (a) The Bonds, including the Registration Certificate of the Comptroller, the Certificate of the Trustee, and the Assignment to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Indenture, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American 26 Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds shall be typewritten, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General may be typewritten and photocopied or otherwise reproduced. Section 5.2. Form of the Bonds. (a) Form of Bond. REGISTERED NO. ______ United States of America State of Texas CITY OF ANNA, TEXAS SPECIAL ASSESSMENT REVENUE BOND, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) REGISTERED $__________ INTEREST RATE MATURITY DATE DELIVERY DATE CUSIP NUMBER ______% September 15, 20__ October 10, 2023 __________ The City of Anna, Texas (the "City"), for value received, hereby promises to pay, solely from the Trust Estate, to or registered assigns, on the Maturity Date, as specified above, the sum of ______________________________ DOLLARS NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, THE CITY, OR ANY OTHER POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THIS BOND. ______________________________________ 27 unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provision for such payment shall have been made, and to pay interest on the unpaid principal amount hereof from the later of the Delivery Date, as specified above, or the most recent Interest Payment Date to which interest has been paid or provided for until such principal amount shall have been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on March 15 and September 15 of each year, commencing March 15, 2024. Capitalized terms appearing herein that are defined terms in the Indenture (defined below) have the meanings assigned to them in the Indenture. Reference is made to the Indenture for such definitions and for all other purposes. The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate trust office in Houston, Texas (the "Designated Payment/Transfer Office"), of Regions Bank, as trustee and paying agent/registrar (the "Trustee"), or, with respect to a successor trustee and paying agent/registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the Interest Payment Date, mailed by the Trustee to the registered owner at the address shown on the registration books kept by the Trustee or by such other customary banking arrangements acceptable to the Trustee, requested by, and at the risk and expense of, the Person to whom interest is to be paid. For the purpose of the payment of interest on this Bond, the registered owner shall be the Person in whose name this Bond is registered at the close of business on the "Record Date," which shall be the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Trustee, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Owner of a Bond appearing on the books of the Trustee at the close of business on the last Business Day preceding the date of mailing such notice. If a date for the payment of the principal of or interest on the Bonds is a Saturday, Sunday, legal holiday, or a day on which banking institutions in the city in which the Designated Payment/Transfer Office is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding Business Day, and payment on such date shall have the same force and effect as if made on the original date payment was due. This Bond is one of a duly authorized issue of assessment revenue bonds of the City having the designation specified in its title (herein referred to as the "Bonds"), dated as of the Delivery Date and issued in the aggregate principal amount of $__________ and issued, with the limitations described herein, pursuant to an Indenture of Trust, dated as of September 15, 2023 (the "Indenture"), by and between the City and the Trustee, to which Indenture reference is hereby made for a description of the amounts thereby pledged and assigned, the nature and extent of the lien and security, the respective rights thereunder to the holders of the Bonds, the 28 Trustee, and the City, and the terms upon which the Bonds are, and are to be, authenticated and delivered and by this reference to the terms of which each holder of this Bond hereby consents. All Bonds issued under the Indenture are equally and ratably secured by the amounts thereby pledged and assigned. The Bonds are being issued for the purpose of (i) paying a portion of the Improvement Area #1 Project Costs, (ii) funding a reserve fund for payment of principal and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District and (iv) paying the costs of issuance of the Bonds. The Bonds are special, limited obligations of the City payable solely from the Trust Estate. Reference is hereby made to the Indenture, copies of which are on file with and available upon request from the Trustee, for the provisions, among others, with respect to the nature and extent of the duties and obligations of the City, the Trustee and the Owners. The Owner of this Bond, by the acceptance hereof, is deemed to have agreed and consented to the terms, conditions and provisions of the Indenture. IN THE INDENTURE, THE CITY HAS RESERVED THE RIGHT to issue Refunding Bonds payable from and secured by a lien on and pledge of the sources described above on a parity with this Bond. Notwithstanding any provision hereof, the Indenture may be released and the obligation of the City to make money available to pay this Bond may be defeased by the deposit of money and/or certain direct or indirect Defeasance Securities sufficient for such purpose as described in the Indenture. The Bonds are issuable as fully registered bonds only in denominations of $100,000 and any multiple of $1,000 in excess thereof ("Authorized Denominations"). Except to the extent permitted by the Indenture, the City prohibits the breaking up or allocation of CUSIP numbers to any Bond or Bonds in denominations of less than $100,000, and any attempt to do so will be void and of no effect. The Bonds maturing on September 15 in the years 20__, 20__ and 20__ (collectively, "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 Article VI of the Indenture, on the dates and in the respective sinking fund installments as set forth in the following schedule: 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__ 29 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__ 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__ September 15, 20__* __________ * Stated Maturity. At least thirty (30) days prior to each mandatory sinking fund redemption date, and subject to any prior reduction authorized by the Indenture, the Trustee shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Bonds of such maturity equal to the Sinking Fund Installments 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 redemption, as provided in Section 4.6 of the Indenture. 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 sinking fund redemption date shall have been acquired by the City at a price not exceeding the principal amount of such Bonds plus accrued and 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 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 30 redemption provisions in the Indenture and not previously credited to a mandatory sinking fund redemption. The City reserves the right and option to redeem 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. The Bonds are subject to extraordinary optional redemption prior to maturity in whole or in part, on any date, at the Redemption Price from amounts on deposit in the Redemption Fund as a result of Prepayments or any other transfers to the Redemption Fund under the terms of the Indenture. If less than all of the Bonds are to be redeemed, Bonds may be redeemed in minimum principal amounts of $1,000 or any integral thereof. Each Bond shall be treated as representing the number of Bonds that is obtained by dividing the principal amount of such Bond by $1,000. No redemption shall result in a Bond in a denomination of less than an Authorized Denomination; provided, however, if the amount of Outstanding Bonds is less than an Authorized Denomination after giving effect to such partial redemption, a Bond in the principal amount equal to the unredeemed portion, but not less than $1,000, may be issued. If less than all of the Bonds are called for optional redemption, the Trustee shall 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, the Bonds to be redeemed shall be allocated on a pro rata basis (as nearly as practicable) among all Outstanding Bonds. Upon written direction from the City to the Trustee of the exercise of any redemption provision provided under the Indenture, the Trustee shall give notice of any redemption of Bonds by sending notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Bond (or portion thereof) to be redeemed, at the address shown on the Register. The notice shall state the redemption date, the Redemption Price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds Outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed, any conditions to such redemption and that on the redemption date, if all conditions, if any, to such redemption have been satisfied, such Bond shall become due and payable. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. With respect to any optional redemption of the Bonds, unless the Trustee has received funds sufficient to pay the Redemption Price of the Bonds to be redeemed before giving of a notice of redemption, the notice may state the City may condition redemption on the receipt of such funds by the Trustee on or before the date fixed for the redemption, or on the satisfaction of any other prerequisites set forth in the notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient funds are not received, the notice shall be of no force and effect, the City shall not redeem the Bonds and the Trustee shall give notice, in the manner in which the notice of redemption was given, that the Bonds have not been redeemed. 31 The City has the right to rescind any optional redemption or extraordinary optional redemption described in the Indenture by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. Upon written direction from the City, the Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the City and the rights of the holders of the Bonds under the Indenture at any time Outstanding affected by such modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Bonds at the time Outstanding, on behalf of the holders of all the Bonds, to waive compliance by the City with certain past defaults under the Bond Ordinance or the Indenture and their consequences. Any such consent or waiver by the holder of this Bond or any predecessor Bond evidencing the same debt shall be conclusive and binding upon such holder and upon all future holders thereof and of any Bond issued upon the transfer thereof or in exchange therefor or in lieu thereof, whether or not notation of such consent or waiver is made upon this Bond. As provided in the Indenture, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office, with such endorsement or other evidence of transfer as is acceptable to the Trustee, and upon delivery to the Trustee of such certifications and/or opinion of counsel as may be required under the Indenture for the transfer of this Bond. Upon satisfaction of such requirements, one or more new fully registered Bonds of the same Stated Maturity, of Authorized Denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. Neither the City nor the Trustee shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond. The City, the Trustee, and any other Person may treat the Person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the Person in whose name this Bond is registered on the Record Date or Special Record Date, as applicable) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Trustee shall be affected by notice to the contrary. NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY, COLLIN COUNTY, TEXAS, OR THE STATE OF TEXAS, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed 32 and have happened in regular and due time, form and manner, as required by law; and that the total indebtedness of the City, including the Bonds, does not exceed any Constitutional or statutory limitation. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be executed under the official seal of the City. ____________________________ City Secretary Mayor [CITY SEAL] (b) Form of Comptroller’s Registration Certificate. The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Bond: REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. ______________ THE STATE OF TEXAS § I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to the effect that the Attorney General of the State of Texas has approved this Bond, and that this Bond has been registered this day by me. WITNESS MY SIGNATURE AND SEAL OF OFFICE this __________________. _______________________________ Comptroller of Public Accounts of the State of Texas [SEAL] (c) Form of Certificate of Trustee. CERTIFICATE OF TRUSTEE It is hereby certified that this is one of the Bonds of the series of Bonds referred to in the within mentioned Indenture. 33 REGIONS BANK, as Trustee DATED: _________________ By: _____________________________ Authorized Signatory (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (print or typewrite name and address, including zip code, of Transferee.) _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ (Social Security or other identifying number: ____________________________) the within Bond and all rights hereunder, and hereby irrevocably constitutes and appoints ___________________________________________, attorney, to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: ___________________________ Signature Guaranteed by: ___________________________________ Authorized Signatory NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Trustee. 34 (e) The Initial Bond shall be in the form set forth in paragraphs (a) through (d) of this section, except for the following alterations: (i) immediately under the name of the Bond the heading "INTEREST RATE" and "MATURITY DATE" shall both be completed with the expression "As Shown Below," and the reference to the "CUSIP NUMBER" shall be deleted; (ii) in the first paragraph of the Bond, the words "on the Maturity Date, as specified above, the sum of ______________________________ DOLLARS" shall be deleted and the following will be inserted: "on September 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Year Principal Amount Interest Rate" (Information to be inserted from Section 3.2(c)); and (iii) the Initial Bond shall be numbered T-1. Section 5.3. CUSIP Registration. The City may secure identification numbers through CUSIP Global Services, managed by S&P Global Markets Intelligence on behalf of the American Bankers Association, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the legality thereof and none of the City, the attorneys approving said Bonds as to legality or the Trustee are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. Except as authorized under Section 4.5 hereof, 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. The Trustee may include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds have been assigned by an independent service and are included in such notice solely for the convenience of the Bondholders and that neither the City nor the Trustee shall be liable for any inaccuracies in such numbers. Section 5.4. Legal Opinion. The approving legal opinion of Bond Counsel may be printed on or attached to each Bond over the certification of the City Secretary of the City, which may be executed in facsimile. ARTICLE VI FUNDS AND ACCOUNTS Section 6.1. Establishment of Funds and Accounts. (a) Creation of Funds. The following Funds are hereby created and established under this Indenture: (i) Pledged Revenue Fund; 35 (ii) Bond Fund; (iii) Project Fund; (iv) Reserve Fund; (v) Redemption Fund; (vi) Rebate Fund; and (vii) Administrative Fund. (b) Creation of Accounts. (i) The following Account is hereby created and established under the Bond Fund: (A) Principal and Interest Account. (ii) The following Accounts are hereby created and established under the Reserve Fund: (A) Reserve Account; and (B) Delinquency and Prepayment Reserve Account. (iii) The following Accounts are hereby created and established under the Project Fund: (A) Improvement Area #1 Bond Improvement Account; and (B) Costs of Issuance Account. (iv) The following Account is hereby created and established under the Pledged Revenue Fund: (A) Bond Pledged Revenue Account. (c) Each Fund and each Account created within such Fund shall be maintained by the Trustee separate and apart from all other funds and accounts of the City. The Pledged Funds shall constitute trust funds which shall be held in trust by the Trustee as part of the Trust Estate solely for the benefit of the Owners of the Bonds. Amounts on deposit in the Funds and Accounts shall be used solely for the purposes set forth herein. (d) Interest earnings and profit on each respective Fund and Account established by this Indenture shall be applied or withdrawn for the purposes of such Fund or Account as specified below. 36 Section 6.2. Initial Deposits to Funds and Accounts. (a) The proceeds from the sale of the Bonds shall be paid to the Trustee and deposited or transferred by the Trustee as follows: (i) to the Reserve Account of the Reserve Fund: $__________, which is equal to the initial Reserve Account Requirement; (ii) to the Costs of Issuance Account of the Project Fund: $__________; (iii) to the Improvement Area #1 Bond Improvement Account of the Project Fund: $__________; and (iv) to the Administrative Fund: $__________. Section 6.3. Pledged Revenue Fund. (a) 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 Assessments and Annual Installments, other than the portion of the Assessments and 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 Section 6.9 hereof. 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 Section 6.7 hereof and, immediately following the initial deposit to the Pledged Revenue Fund, prior to any other transfers or deposits being made under this Section 6.3(a), 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 Section 6.8 hereof, the City shall provide a City Certificate to the Trustee to transfer to the Rebate Fund, prior to any other transfer under this Section 6.3(a), the full amount of Rebatable Arbitrage owed by the City, as further described in Section 6.10(f) hereof. 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 and absolute discretion, to use such excess funds for any one or more of the following purposes: (i) pay other costs of the Improvement Area #1 Projects, (ii) pay other costs permitted by the PID Act, or (iii) deposit such excess into the Redemption Fund to redeem Bonds as provided in Article IV. 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. 37 (b) From time to time as needed to pay the obligations relating to the Bonds, but no later than five (5) Business Days before each Interest Payment Date, the Trustee shall withdraw from the Pledged Revenue Fund and transfer to the Principal and Interest Account of the Bond Fund, an amount, taking into account any amounts then on deposit in such Principal and Interest Account, such that the amount on deposit in the Principal and Interest Account equals the principal (including any Sinking Fund Installments) and interest due on the Bonds on the next Interest Payment Date. (c) If, after the foregoing transfers and any transfer from the Reserve Fund as provided in Section 6.7, there are insufficient funds to make the payments provided in paragraph (b) 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. (d) The Trustee shall transfer Prepayments to the Redemption Fund to be used to redeem Bonds pursuant to Section 4.4 promptly after deposit of such amounts into the Pledged Revenue Fund. (e) Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Accounts within the Reserve Fund made with respect to the particular Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency and Prepayment Reserve Requirement), and second, to the Redemption Fund to be used to redeem Bonds pursuant to Section 4.4. (f) 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 Section 6.3(a) hereof, as directed by the City in a City Certificate. Section 6.4. Bond Fund. (a) 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. (b) If amounts in the Principal and Interest Account are insufficient for the purposes set forth in paragraph (a) above, the Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency pursuant to Section 6.7(f). Amounts so withdrawn from the Reserve Fund shall be deposited in the Principal and Interest Account and transferred to the Paying Agent/Registrar. (c) If, after the foregoing transfers and any transfer from the Reserve Fund as provided in Section 6.7, there are insufficient funds to make the payments provided in paragraph (a) 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. 38 Section 6.5. Project Fund. (a) Money on deposit in the Project Fund shall be used for the purposes specified in Section 3.1. (b) (1) 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. (2) Disbursements from the Improvement Area #1 Bond Improvement Account of the Project Fund to pay Improvement Area #1 Project Costs shall be made by the Trustee upon receipt by the Trustee of a properly executed and completed Certificate for Payment. The funds from the Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in accordance with a Certificate for Payment for Improvement Area #1 Project Costs as described in the Reimbursement Agreement. Each such Certificate for Payment shall include a list of the payees and the payments to be made to such payees as well as a statement that all payments shall be made by check or wire transfer in accordance with the payment instructions set forth in such Certificate for Payment or in the invoices submitted therewith and the Trustee may rely on such payment instructions with no duty to investigate or inquire as to the authenticity of or authorization for the invoice or the payment instructions contained therein. (c) Except as provided in Section 6.5(d), (f) and (h), money on deposit in the Improvement Area #1 Bond Improvement Account of the Project Fund shall be used solely to pay Improvement Area #1 Project Costs. (d) 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 Projects 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 Section 4.4 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. (e) In making any determination pursuant to this Section, the City Representative may conclusively rely upon a certificate of an Independent Financial Consultant. (f) Upon the filing of a City Certificate stating that all Improvement Area #1 Projects have been completed and that all Improvement Area #1 Project Costs have been paid, or that any Improvement Area #1 Projects are not required to be paid from the Project Fund pursuant to a Certificate 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 Section 4.4 as directed by the City 39 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. (g) 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 Improvement Area #1 Project Costs 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. (h) In the event the Developer has not completed the Improvement Area #1 Projects by October 10, 2028, 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 Section 4.4 hereof. Upon such transfers, the Improvement Area #1 Bond Improvement Account of the Project Fund shall be closed. (i) In providing any disbursement under this Section, the Trustee may conclusively rely as to the completeness and accuracy of all statements in such Certificate for Payment if such certificate is signed by a City Representative, and the Trustee shall not be required to make any independent investigation in connection therewith. The execution of any Certificate for Payment by a City Representative shall constitute, unto the Trustee, an irrevocable determination that all conditions precedent to the payments requested have been completed. Section 6.6. Redemption Fund. The Trustee, pursuant to a City Certificate, shall cause to be deposited to the Redemption Fund from the Pledged Revenue Fund an amount sufficient to redeem Bonds as provided in Sections 4.3 and 4.4 on the dates specified for redemption as provided in Sections 4.3 and 4.4. Amounts on deposit in the Redemption Fund shall be used and withdrawn by the Trustee to redeem Bonds as provided in Article IV. 40 Section 6.7. Reserve Fund. (a) 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 this 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, 2024, 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 accumulated in the Delinquency and Prepayment Reserve Account. In transferring the amounts pursuant to this Section, the Trustee may conclusively rely on a City Certificate (which shall be based on the Annual Installments as shown on the 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 this Section 6.7 until the Bonds are no longer Outstanding. (b) Whenever a transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Trustee shall provide written notice thereof to the City, specifying the amount withdrawn and the source of said funds. (c) In the event of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment pursuant to Section 4.4, 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. (d) 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 41 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 Section 6.4, unless within thirty days of such notice to the City Representative, the Trustee receives a City Certificate instructing the Trustee to apply such excess: (i) to pay amounts due under Section 6.8 hereof, (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 Improvement Area #1 Project Costs if such application and the expenditure of funds is expected to occur within three years of the date hereof, or (iv) to the Redemption Fund to be applied to the redemption of Bonds. (e) 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 Section 4.4. 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 Section 4.4 hereof 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 this Section. (f) 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. (g) 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. (h) 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. (i) 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. 42 Section 6.8. Rebate Fund: Rebatable Arbitrage. (a) The Rebate Fund is to be held by the Trustee in accordance with the terms and provisions of this Indenture. Amounts on deposit in the Rebate Fund shall be used solely for the purpose of paying amounts due the United States Government in accordance with the Code. The Rebate Fund shall not be part of the Trust Estate and shall not be security for the Bonds. (b) In order to assure that Rebatable Arbitrage is paid to the United States rather than to a third party, investments of funds on deposit in the Rebate Fund shall be made in accordance with the Code and the City’s federal tax certificate for the Bonds, as further set forth in written directions from the City to the Trustee. The Trustee may conclusively rely on such written instructions as set forth in this Section and shall not be responsible for any loss or liability resulting from the investment of funds under this Section, but only so long as the Trustee follows such written instructions in all respects. (c) The Trustee conclusively shall be deemed to have complied with the provisions of this Section and shall not be liable or responsible if it follows the written instructions of the City and shall not be required to take any action under this Section in the absence of instructions from the City. (d) If, on the date of each annual calculation, the amount on deposit in the Rebate Fund exceeds the amount of the Rebatable Arbitrage, the City may direct the Trustee, pursuant to a City Certificate, to transfer the amount in excess of the Rebatable Arbitrage to the Bond Fund. Section 6.9. Administrative Fund. (a) Periodically upon receipt thereof, the City shall deposit or cause to be deposited to the Administrative Fund the portion of the Assessments and Annual Installments allocated to the payment of Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan. (b) Moneys in the Administrative Fund shall be held by the Trustee separate and apart from the other Funds created and administered hereunder and used as directed by a City Certificate solely for the purposes set forth in the Service and Assessment Plan, including payment of Annual Collection Costs and Delinquent Collection Costs. The Administrative Fund shall not be part of the Trust Estate and shall not be security for the Bonds. Section 6.10. Investment of Funds. (a) Money in any Fund or Account, other than the Reserve Fund, shall be invested by the Trustee in Investment Securities as directed by the City pursuant to a City Certificate filed with the Trustee; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund or Account will be available at the proper time or times. Money in the Reserve Fund shall be invested in such Investment Securities as directed by the City pursuant to a City 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. Each such City Certificate shall be a certification, upon which the Trustee may conclusively rely without investigation or inquiry, that the investment directed therein constitutes 43 an Investment Security and that such investments meet the maturity and average weighted maturity requirements set forth in the preceding sentence. Such investments shall be valued each year in terms of the Value of Investment Securities as of September 30. For purposes of maximizing investment returns, to the extent permitted by law, money in the Funds and Accounts may be invested in common investments of the kind described above, or in a common pool of such investment which shall be kept and held at an official depository bank, which shall not be deemed to be or constitute a commingling of such money or funds provided that safekeeping receipts or certificates of participation clearly evidencing the investment or investment pool in which such money is invested and the share thereof purchased with such money or owned by such Fund or Account are held by or on behalf of each such Fund or Account. If necessary, such investments shall be promptly sold to prevent any default under this Indenture. To ensure that cash on hand is invested, if the City does not give the Trustee written or timely instructions with respect to investments of funds, the Trustee is hereby directed to invest and re-invest cash balances in Morgan Stanley, Fidelity or Federated family of funds, but only so long as such funds are authorized investments and permitted under the Public Funds Investment Act, Texas Government Code, Chapter 2256, as amended, or any successor law, and only so long as such investments constitute Investment Securities and the money required to be expended from any Fund will be available at the proper time or times. (b) 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 this Indenture for transfer of interest earnings and profits resulting from investment of amounts in Funds and Accounts. Whenever in this 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. (c) The Trustee and its affiliates may act as sponsor, advisor, depository, principal or agent in the acquisition or disposition of any investment. The Trustee shall not incur any liability for losses arising from any investments made pursuant to this Section. The Trustee shall not be required to determine the suitability or legality of any investments or whether investments comply with Section 6.10(a) above. The parties acknowledge that the Trustee is not providing investment supervision, recommendations, or advice. (d) Investments in any and all Funds and Accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular Funds or Accounts of amounts received or held by the Trustee hereunder, provided that the Trustee shall at all times account for such investments strictly in accordance with the Funds and Accounts to which they are credited and otherwise as provided in this Indenture. (e) The Trustee will furnish to the City, upon the City’s written request, periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City’s election, such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee 44 will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker. (f) In the event it is found, after an annual calculation has been done pursuant to Section 6.8 hereof, that the City owes Rebatable Arbitrage to the United States Government, the City shall direct the Trustee, pursuant to a City Certificate, to transfer to the Rebate Fund the investment earnings on funds on deposit in the Pledged Funds in an amount equal to the Rebatable Arbitrage owed by the City. The City Certificate shall specify the amount to the transferred and the Pledged Fund or Pledged Funds from which the investment earnings shall be transferred. Section 6.11. Security of Funds. All Funds heretofore created or reaffirmed, to the extent not invested as herein permitted, shall be secured in the manner and to the fullest extent required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Indenture. ARTICLE VII COVENANTS Section 7.1. Confirmation of Assessments. The City hereby confirms, covenants, and agrees that, in the Assessment Ordinance, it has levied the Assessments against the Assessed Property from which the Assessment Revenues will be collected and received. Section 7.2. Collection and Enforcement of Assessments. (a) For so long as any Bonds are Outstanding, the City covenants, agrees and warrants that it will take and pursue all reasonable actions permissib1e under Applicable Laws to cause the Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement or exemption in the Assessments. (b) To the extent permitted by law, notice of the Annual Installments shall be sent by, or on behalf of, the City to the affected property owners on the same statement or such other mechanism that is used by the City, so that such Annual Installments are collected simultaneously with ad valorem taxes and shall be subject to the same penalties, procedures, and foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City. (c) The City will determine or cause to be determined, no later than February 15 of each year, whether or not any Annual Installment is delinquent and, if such delinquencies exist, the City will order and cause to be commenced as soon as practicable any and all appropriate and legally permissible actions to obtain such Annual Installment, and any delinquent charges and interest thereon, including diligently prosecuting an action in district court to foreclose the currently delinquent Annual Installment. Notwithstanding the foregoing, the City shall not be 45 required under any circumstances to purchase or make payment for the purchase of the delinquent Assessments or the corresponding particular Assessed Property. (d) The City shall not be required under any circumstances to expend any funds for Delinquent Collection Costs or Annual Collection Costs in connection with its covenants and agreements under this Section or otherwise other than funds on deposit in the Administrative Fund. Section 7.3. Against Encumbrances. (a) Other than Refunding Bonds issued to refund all or a portion of the 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 this 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. (b) So long as Bonds are Outstanding hereunder, 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 this Indenture, other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds. Section 7.4. Records, Accounts, Accounting Reports. The City hereby covenants and agrees that so long as any Bonds are Outstanding, it will keep and maintain a proper and complete system of records and accounts pertaining to the Assessments. The Trustee and holder or holders of any Bonds or any duly authorized agent or agents of such holders shall have the right at all reasonable times to inspect all such records, accounts, and data relating thereto, upon written request to the City by the Trustee or duly authorized representative, as applicable. The City shall provide the Trustee or duly authorized representative, as applicable, an opportunity to inspect such books and records relating to the Bonds during the City’s regular business hours and on a mutually agreeable date not later than twenty days after the City receives such request. Section 7.5. Covenants Regarding Tax Exemption of Interest on Bonds. (a) The City covenants to take any action necessary to assure, or refrain from any action that would adversely affect, the treatment of the Bonds as an obligation described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by the City, with respect to such private business use, do not, under the terms of this Article or any underlying arrangement, directly or indirectly, secure or provide for 46 the payment of more than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (2) to take any action to assure that in the event that the "private business use" described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" that is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action that would otherwise result in the Bonds being treated as a "private activity bond" within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the Bonds, other than investment property acquired with – (A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less or, in the case of refunding bonds, for a period of 30 days or less until such proceeds are needed for the purpose for which the Bonds or refunding bonds are issued, (B) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds; (7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage); (8) to refrain from using the proceeds of the Bonds or proceeds of any prior bonds to pay debt service on another issue more than 90 days after the date of issue of the Bonds in contravention of the requirements of section 149(d) of the Code (relating to advance refundings); and 47 (9) to pay to the United States of America at least once during each five-year period (beginning on the Delivery Date) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. (b) In order to facilitate compliance with the above covenant (a)(9), the Rebate Fund is established by the City pursuant to Section 6.1 for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the registered Owner. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) The City understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto (the "Treasury Regulations"). In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bonds, the City will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements applicable to the Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the City Manager and Director of Finance to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the City, that may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) The City covenants to account for the expenditure of sale proceeds and investment earnings to be used for Improvement Area #1 Projects on its books and records in accordance with the requirements of the Code. The City recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Improvement Area #1 Projects are completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the City recognizes that in order for proceeds to be expended under the Code, the sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the Delivery Date, or (2) the date the Bonds are retired. The City agrees to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. 48 (e) The City covenants that the projects funded with the proceeds of the Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. ARTICLE VIII LIABILITY OF CITY Section 8.1. Liability of City. (a) Neither the full faith and credit nor the general taxing power of the City is pledged to the payment of the Bonds, and, except for the Trust Estate, no City taxes, fee or revenues from any source are pledged to the payment of, or available to pay any portion of, the Bonds or any other obligations relating to the District. The City shall never be liable for any obligations relating to the Bonds or other obligations relating to the District, other than as specifically provided for in this Indenture. (b) The City shall not incur any responsibility in respect of the Bonds or this Indenture other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own willful default or act of bad faith. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions covenants or agreements of the Trustee herein or of any of the documents executed by the Trustee in connection with the Bonds, or as to the existence of a default or event of default thereunder. (c) In the absence of bad faith, the City may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Indenture. The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. (d) No provision of this Indenture, the Bonds, the Assessment Ordinance, or any agreement, document, instrument, or certificate executed, delivered or approved in connection with the issuance, sale, delivery, or administration of the Bonds (collectively, the "Bond Documents"), shall require the City to expend or risk its own general funds or other funds or otherwise incur any financial liability (other than with respect to the Trust Estate and the Annual Collection Costs) in the performance of any of its obligations hereunder, or in the exercise of any of its rights or powers, if in the judgment of the City there are reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it. 49 (e) Neither the Owners nor any other Person shall have any claim against the City or any of its officers, officials, agents, or employees for damages suffered as a result of the City’s failure to perform in any respect any covenant, undertaking, or obligation under any Bond Documents or as a result of the incorrectness of any representation in, or omission from, any of the Bond Documents, except to the extent that any such claim relates to an obligation, undertaking, representation, or covenant of the City, in accordance with the Bond Documents and the PID Act. Any such claim shall be payable only from the Trust Estate or the amounts collected to pay Annual Collection Costs on deposit in the Administrative Fund. Nothing contained in any of the Bond Documents shall be construed to preclude any action or proceeding in any court or before any governmental body, agency, or instrumentality against the City or any of its officers, officials, agents, or employees to enforce the provisions of any of the Bond Documents or to enforce all rights of the Owners of the Bonds by mandamus or other proceeding at law or in equity. (f) The City may rely on and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Whenever in the administration of its duties under this Indenture the City shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be conclusively proved and established by a certificate of the Trustee, an Independent Financial Consultant, an independent inspector or City Manager or other person designated by the City Council to so act on behalf of the City, and such certificate shall be full warrant to the City for any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in its discretion the City may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. (g) In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations, and directions of such persons or entities. ARTICLE IX THE TRUSTEE Section 9.1. Acceptance of Trust; Trustee as Registrar and Paying Agent. (a) The Trustee accepts and agrees to execute the respective trusts imposed upon it by this Indenture, but only upon the express terms and conditions and subject to the provisions of this Indenture to all of which the parties hereto and the respective Owners of the Bonds agree. No implied covenants or obligations shall be read into this Indenture against the Trustee. 50 (b) The Trustee is hereby designated and agrees to act as Paying Agent/Registrar for and with respect to the Bonds. Section 9.2. Trustee Entitled to Indemnity. The Trustee shall be under no obligation to institute any suit, or to undertake any proceeding under this Indenture, or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall be indemnified, to the extent permitted by law, to its satisfaction against any and all costs and expenses, outlays, and counsel fees and other reasonable disbursements, and against all liability except as a consequence of its own negligence or willful misconduct; provided, however, that in no event shall the Trustee request or require indemnification as a condition to making any deposits, payments or transfers (provided such payment or transfer is prior to an Event of Default) when required hereunder, or to deliver any notice when required hereunder. To the extent permitted by law and during the occurrence of an Event of Default, the Trustee shall be entitled to indemnification as a condition to making any deposits, payments or transfers when required hereunder, or to delivering any notice when required hereunder. Nevertheless, the Trustee may begin suit, or appear in and defend suit, or exercise any such rights and powers as Trustee, and in such case the Trustee may make transfers from the Pledged Revenue Fund and Administrative Fund, and to the extent money in the Administrative Fund is insufficient, from the Pledged Revenue Fund, to pay all fees, costs and expenses, outlays, and counsel fees and other reasonable disbursements properly incurred in connection therewith and shall, to the extent permitted by law, be entitled to a preference therefor over any Bonds Outstanding hereunder. Section 9.3. Responsibilities of the Trustee. (a) The recitals contained in this Indenture and in the Bonds shall be taken as the statements of the City and the Trustee assumes no responsibility for and undertakes no duty to verify the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Bonds or with respect to the security afforded by this Indenture, and the Trustee shall incur no liability with respect thereto. Except as otherwise expressly provided in this Indenture, the Trustee shall have no responsibility or duty with respect to: (i) the issuance of Bonds for value; (ii) the application of the proceeds thereof, except to the extent that such proceeds are received by it in its capacity as Trustee; (iii) the application of any moneys paid to the City or others in accordance with this Indenture, except as to the application of any moneys paid to it in its capacity as Trustee; (iv) any calculation of arbitrage or rebate under the Code; (v) any loss suffered in connection with any investment of funds in accordance with this Indenture; or (vi) to undertake any other action unless specifically authorized pursuant to a written direction by the City or pursuant to this Indenture. (b) The duties and obligations of the Trustee shall be determined by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture. The Trustee will, prior to any Event of Default and after curing of any Event of Default, perform such duties and only such duties as are specifically set forth herein. The Trustee will, during the existence of an Event of Default, exercise such rights and powers vested in it by this Indenture and use the same degree 51 of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his/her own affairs. (c) The Trustee shall not be liable for any action taken or omitted by it in the performance of its duties under this Indenture, except for its own negligence or willful misconduct. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from this Indenture for the existence, furnishing or use of the Improvement Area #1 Projects. The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in principal amount of the Bonds then Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. (d) The Trustee shall not be liable for any error of judgment made in good faith by any one of its officers, unless it shall be established that the Trustee was negligent in ascertaining the pertinent facts. (e) The Trustee’s immunities and protections from liability and its right to indemnification in connection with the performance of its duties under this Indenture shall extend to the Trustee’s officers, directors, agents, attorneys and employees. Such immunities and protections and rights to indemnification, together with the Trustee’s right to compensation, shall survive the Trustee’s resignation or removal, the discharge of this Indenture. (f) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or through agents, attorneys, or receivers, and shall not be responsible for any misconduct or negligence on the part of any agent, attorney, or receiver appointed or chosen by it with due care, and the Trustee shall be entitled to rely and act upon the opinion or advice of counsel, who may be counsel to the City, concerning all matters of trust hereof and the duties hereunder, and may in all cases pay such reasonable compensation to all such agents, attorneys, and receivers as may reasonably be employed in connection with the trusts hereof. The Trustee shall not be responsible for any loss or damage resulting from any action or nonaction by it taken or omitted to be taken in good faith in reliance upon such opinion or advice of counsel. (g) The Trustee shall not be responsible for any recital herein (except with respect to the authentication certificate of the Trustee endorsed on the Bonds) or for the recording, filing, or refiling of this Indenture in connection therewith, or for the validity of the execution by the City of this Indenture or of any Supplemental Indentures or instruments of further assurance, or for the sufficiency or security of the Bonds. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Indenture. (h) The Trustee makes no representations as to the value or condition of the Trust Estate or any part thereof, or as to the validity or sufficiency of this Indenture or of the Bonds. The Trustee shall not be accountable for the use or application of any Bonds or the proceeds thereof or of any money paid to or upon the order of the City under any provision of this Indenture. 52 Section 9.4. Property Held in Trust. All moneys and securities held by the Trustee at any time pursuant to the terms of this Indenture shall be held by the Trustee in trust for the purposes and under the terms and conditions of this Indenture. Section 9.5. Trustee Protected in Relying on Certain Documents. (a) The Trustee may conclusively rely upon any order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond, or other document provided to the Trustee in accordance with the terms of this Indenture that it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or Person or to have been prepared and furnished pursuant to any of the provisions of this Indenture, or upon the written opinion of any counsel, architect, engineer, insurance consultant, management consultant, or accountant that the Trustee shall in good faith reasonably believe to be qualified in relation to the subject matter or is selected by the City in accordance with this Indenture, and the Trustee shall be under no duty to make any investigation or inquiry into, and shall not be deemed to have knowledge of, any statements contained or matters referred to in any such instrument. The Trustee may consult with counsel selected by the Trustee with due care that is nationally recognized in the field of municipal bond law, who may or may not be Bond Counsel, and any advice from such counsel with respect to compliance with the provisions of this Indenture shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder, reasonably and in good faith, in accordance with such advice. (b) Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Indenture, such matter may be deemed to be conclusively proved and established by a City Certificate, unless other evidence in respect thereof be hereby specifically prescribed. Such City Certificate shall be full warrant for any action taken or suffered in good faith under the provisions hereof, but the Trustee may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. Except as otherwise expressly provided herein, any request, order, notice, or other direction required or permitted to be furnished pursuant to any provision hereof by the City to the Trustee shall be sufficiently executed if executed in the name of the City by the City Representative. The Trustee shall be entitled to conclusively rely upon the foregoing as sufficient evidence of the facts set forth herein. The execution of any City Certificate shall constitute, unto the Trustee, an irrevocable determination that all conditions precedent thereto have occurred. (c) The Trustee shall not be under any obligation to see to the recording or filing of this Indenture, or otherwise to the giving to any Person of notice of the provisions hereof except as expressly required in Section 9.13. Section 9.6. Compensation. Unless otherwise provided by contract with the Trustee, the Trustee, at the written direction of the City, shall transfer from the Administrative Fund, the previously determined and 53 agreed upon, reasonable compensation for all services rendered by it hereunder, including its services as Paying Agent/Registrar and extraordinary services rendered, together with all its reasonable expenses, charges, and other disbursements and those of its counsel, agents and employees, incurred in and about the administration and execution of the trusts hereby created and the exercise of its powers and the performance of its duties hereunder, all pursuant to a City Certificate and subject to any limit on the amount of such compensation or recovery of expenses or other charges as shall be prescribed by such City Certificate, and the Trustee shall have a lien therefor on any and all funds at any time held by it hereunder prior to any Bonds Outstanding. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Trustee has reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it. If the City shall fail to make any payment required by this Section, the Trustee shall make such payment from lawfully available funds in the Administrative Fund, and to the extent moneys in the Administrative Fund are insufficient then from any moneys in its possession under the provision of this Indenture and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. The right of the Trustee to fees, expenses, and indemnification, to the extent permitted by law, shall survive the release, discharge, and satisfaction of the Indenture. Section 9.7. Permitted Acts. The Trustee and its directors, officers, employees, or agents may become the owner of or may in good faith buy, sell, own, hold and deal in Bonds and may join in any action that any Owner of Bonds may be entitled to take as fully and with the same rights as if it were not the Trustee. The Trustee may act as depository, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, the City or any committee formed to protect the rights of holders of Bonds or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Indenture, whether or not such committee shall represent the holders of a majority of the Bonds. The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be liable for any permissive actions taken except as a consequence of its own negligence or misconduct. Section 9.8. Resignation of Trustee. The Trustee may at any time resign and be discharged of its duties and obligations hereunder by giving not fewer than 60 days’ written notice, specifying the date when such resignation shall take effect, to the City and each Owner of any Outstanding Bond. Such resignation shall take effect upon the appointment of a successor as provided in Section 9.10 and the acceptance of such appointment by such successor. Notwithstanding the foregoing, if, after 60 days following receipt of the notice, the City has not appointed a successor Trustee, the Trustee may apply to a court of competent jurisdiction to appoint a successor Trustee, at no expense to the City, and such resignation shall take effect upon the court’s appointment of a successor Trustee. Section 9.9. Removal of Trustee. The Trustee may be removed at any time by (i) the Owners of at least a majority in aggregate Outstanding principal amount of the Bonds by an instrument or concurrent instruments in writing signed and acknowledged by such Owners or by their attorneys-in-fact, duly 54 authorized and delivered to the City, or (ii) so long as the City is not in default under this Indenture, the City. Copies of each such instrument shall be delivered by the City to the Trustee and any successor thereof. The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of this Indenture with respect to the duties and obligations of the Trustee by any court of competent jurisdiction upon the application of the City or the Owners of not less than 10% in aggregate Outstanding principal amount of the Bonds. Section 9.10. Successor Trustee. (a) If the Trustee shall resign, be removed, be dissolved, or become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Trustee or of its property shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs, the position of the Trustee hereunder shall thereupon become vacant. (b) If the position of Trustee shall become vacant for any of the foregoing reasons or for any other reason, a successor Trustee may be appointed within one year after any such vacancy shall have occurred by the Owners of at least 50% of the aggregate Outstanding principal amount of the Bonds by an instrument or concurrent instruments in writing signed and acknowledged by such Owners or their attorneys-in-fact, duly authorized and delivered to such successor Trustee, with notification thereof being given to the predecessor Trustee and the City. (c) Until such successor Trustee shall have been appointed by the Owners of the Bonds, the City shall forthwith (and in no event in excess of 30 days after such vacancy occurs) appoint a Trustee to act hereunder. Copies of any instrument of the City providing for any such appointment shall be delivered by the City to the Trustee so appointed. The City shall mail notice of any such appointment to each Owner of any Outstanding Bonds within 30 days after such appointment. Any appointment of a successor Trustee made by the City immediately and without further act shall be superseded and revoked by an appointment subsequently made by the Owners. (c) If in a proper case no appointment of a successor Trustee shall be made within 45 days after the giving by any Trustee of any notice of resignation in accordance with Section 9.8 or after the occurrence of any other event requiring or authorizing such appointment, the Trustee or any Owner of Bonds may apply to any court of competent jurisdiction for the appointment of such a successor, and the court may thereupon, after such notice, if any, as the court may deem proper, appoint such successor and the City shall be responsible for the costs of such appointment process. (e) Any successor Trustee appointed under the provisions of this Section shall be a commercial bank or trust company or national banking association (i) having a capital and surplus and undivided profits aggregating at least $50,000,000, if there be such a commercial bank or trust company or national banking association willing and able to accept the appointment on reasonable and customary terms, and (ii) authorized by law to perform all the duties of the Trustee required by this Indenture. 55 (f) Each successor Trustee shall mail, in accordance with the provisions of the Bonds, notice of its appointment as Trustee, any rating agency which, at the time of such appointment, is providing a rating on the Bonds and each of the Owners of the Bonds. Section 9.11. Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under the provisions of Section 9.10 shall execute, acknowledge, and deliver to its predecessor and the City an instrument in writing accepting such appointment, and thereupon such successor, without any further act, deed, or conveyance, shall become fully vested with all moneys, estates, properties, rights, immunities, powers, duties, obligations, and trusts of its predecessor hereunder, with like effect as if originally appointed as Trustee. However, the Trustee then ceasing to act shall nevertheless, on request of the City or of such successor, execute, acknowledge, and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor all the rights, immunities, powers, and trusts of such Trustee and all the right, title, and interest of such Trustee in and to the Trust Estate, and, upon the receipt of payment of its outstanding charges, shall pay over, assign, and deliver to such successor any moneys or other properties subject to the trusts and conditions herein set forth. Should any deed, conveyance, or instrument in writing from the City be required by such successor for more fully and certainly vesting in and confirming to it any such moneys, estates, properties, rights, powers, duties, or obligations, any and all such deeds, conveyances, and instruments in writing, on request and so far as may be authorized by law, shall be executed, acknowledged, and delivered by the City. Section 9.12. Merger, Conversion or Consolidation of Trustee. Any corporation or association into which the Trustee may be merged or with which it may be consolidated or any corporation or association resulting from any merger, conversion or consolidation to which it shall be a party or any corporation or association to which the Trustee may sell or transfer all or substantially all of its corporate trust business shall be the successor to such Trustee hereunder, without any further act, deed or conveyance, provided that such corporation or association shall be a commercial bank or trust company or national banking association qualified to be a successor to such Trustee under the provisions of Section 9.10, or a trust company that is a wholly-owned subsidiary of any of the foregoing. Section 9.13. Trustee To File Continuation Statements. Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the pledge of the Trust Estate provided herein, and such pledge is, under current law, valid, effective and perfected. If necessary, the Trustee shall file or cause to be filed, at the City’s expense, such continuation statements as may be delivered to the Trustee and which may be required by the Texas Uniform Commercial Code, as from time to time in effect (the "UCC"), in order to continue perfection of the security interest of the Trustee in such items of tangible or intangible personal property and any fixtures as may have been granted to the Trustee pursuant to this Indenture in the time, place and manner required by the UCC; provided unless the Trustee is otherwise notified by the City, the Trustee may conclusively rely upon the initial filing statements delivered to it in filing any continuation statements hereunder. The Trustee is not responsible for the initial filing of any financing statements. The City shall timely delivery a copy of such filed financing statement, if any, to the Trustee. 56 Section 9.14. Accounts, Periodic Reports and Certificates. The Trustee shall keep or cause to be kept proper books of record and account (separate from all other records and accounts) in which complete and correct entries shall be made of its transactions relating to the Funds and Accounts established by this Indenture and which shall at all times be subject to inspection by the City, and the Owner or Owners of not less than 10% in principal amount of the Bonds then Outstanding or their representatives duly authorized in writing. Section 9.15. Construction of Indenture. The Trustee may construe any of the provisions of this Indenture insofar as the same may appear to be ambiguous or inconsistent with any other provision hereof, and any construction of any such provisions hereof by the Trustee in good faith shall be binding upon the Owners of the Bonds. Section 9.16. Offering Documentation. The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum, or any other disclosure material prepared or distributed with respect to the Bonds and, except as otherwise provided in the Continuing Disclosure Agreement of the Issuer, shall have no responsibility for compliance with any State or federal securities laws in connection with the Bonds. ARTICLE X MODIFICATION OR AMENDMENT OF THIS INDENTURE Section 10.1. Amendments Permitted. (a) This Indenture and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Indenture, except as provided below, pursuant to the affirmative vote at a meeting of Owners of the Bonds, or with the written consent without a meeting, of the Owners of the Bonds of at least a majority of the aggregate principal amount of the Bonds then Outstanding and City approval of such modification or amendment. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the principal of or interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, (ii) permit the creation by the City of any pledge or lien upon the Trust Estate, or any portion thereof, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except for the issuance of Refunding Bonds or as otherwise permitted by Applicable Laws or this Indenture), or (iii) reduce the percentage of Owners of the Bonds required for the amendment hereof. Any such amendment shall not modify any of the rights or obligations of the Trustee without its written consent. (b) This Indenture and the rights and obligations of the City and of the Owners may also be modified or amended at any time by a Supplemental Indenture, without the consent of 57 any Owners, only to the extent permitted by law, and only for any one or more of the following purposes: (i) to add to the covenants and agreements of the City in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (ii) to make modifications not adversely affecting any Outstanding Bonds in any material respect; (iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in regard to questions arising under this Indenture, as the City and the Trustee may deem necessary or desirable and not inconsistent with this Indenture, and that shall not adversely affect the rights of the Owners of the Bonds; (iv) to set forth additional provisions, if deemed necessary or advisable, in connection with the issuance of Refunding Bonds permitted under the terms of this Indenture; and (v) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds. Section 10.2. Owners’ Meetings. The City may at any time call a meeting of the Owners of the Bonds. In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof, and to fix and adopt reasonable rules and regulations for the conduct of said meeting; provided, however, that the same may not conflict with the terms of this Indenture. Without limiting the generality of the immediately preceding sentence, such rules and regulations may not reduce the percentage of Owners of Bonds required for the amendment of this Indenture as provided herein. Section 10.3. Procedure for Amendment with Written Consent of Owners. (a) The City and the Trustee may at any time adopt a Supplemental Indenture amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is permitted by Section 10.1, to take effect when and as provided in this Section. A copy of such Supplemental Indenture, together with a request to Owners for their consent thereto, if such consent is required pursuant to Section 10.1, shall be mailed by first class mail, by the Trustee to each Owner of Bonds from whom consent is required under this Indenture, but failure to mail copies of such Supplemental Indenture and request shall not affect the validity of the Supplemental Indenture when assented to as in this Section provided. (b) Such Supplemental Indenture shall not become effective unless there shall be filed with the Trustee the written consents of the Owners as required by this Indenture and a notice shall have been mailed as hereinafter in this Section provided and the City has delivered to the Trustee an opinion of Bond Counsel to the effect that such amendment is permitted and will 58 not adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 11.6. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof), unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Trustee prior to the date when the notice hereinafter in this Section provided for has been mailed. (c) After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Indenture, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Indenture, stating in substance that the Supplemental Indenture has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Indenture or consents thereto). Proof of the mailing of such notice shall be filed with the Trustee. A record, consisting of the papers required by this Section 10.3 to be filed with the Trustee, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Indenture shall become effective upon the filing with the Trustee of the proof of mailing of such notice, and the Supplemental Indenture shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the City and the Owners of all Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. Section 10.4. Procedure for Amendment Not Requiring Owner Consent. (a) The City and the Trustee may at any time adopt a Supplemental Indenture amending the provisions of the Bonds or of this Indenture, to the extent that such amendment is permitted by Section 10.1, to take effect when and as provided in this Section. The City shall direct the Trustee to provide a copy of such Supplemental Indenture, together with a notice stating that the Supplemental Indenture does not require Owner consent, mailed by first class mail to each Owner of Bonds, but failure to mail copies of such Supplemental Indenture shall not affect the validity of the Supplemental Indenture. The Trustee shall retain the proof of its mailing of such notice. A record, consisting of the papers required by this Section 10.4, shall be proof of the matters therein stated until the contrary is proved. (b) The Supplemental Indenture shall become effective upon the execution and delivery of such Supplemental Indenture by the Trustee and the City, and the Supplemental Indenture shall be deemed conclusively binding upon the City, the Trustee and the Owners of all Bonds as of the date of such execution and delivery. Section 10.5. Effect of Supplemental Indenture. From and after the time any Supplemental Indenture becomes effective pursuant to this Article X, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties, and obligations under this Indenture of the City, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of 59 any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 10.6. Endorsement or Replacement of Bonds Issued After Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the designated office of the Trustee or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such Owners’ action, shall be prepared, executed, and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the designated office of the Trustee without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 10.7. Amendatory Endorsement of Bonds. The provisions of this Article X shall not prevent any Owner from accepting any amendment as to the particular Bonds held by such Owner, provided that due notation thereof is made on such Bonds. Section 10.8. Waiver of Default. With the written consent of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, the Owners may waive compliance by the City with certain past defaults under this Indenture and their consequences. Any such consent shall be conclusive and binding upon the Owners and upon all future Owners. Section 10.9. Execution of Supplemental Indenture. (a) In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall receive, and shall be fully protected in relying upon, an opinion of counsel addressed and delivered to the Trustee and the City stating that the execution of such Supplemental Indenture is permitted by and in compliance with this Indenture. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. (b) No such amendment shall modify any of the rights or obligations of the Trustee without its written consent. In executing or accepting any Supplemental Indenture, the Trustee shall be fully protected in relying upon an opinion of qualified counsel addressed and delivered to the Trustee stating that (i) the execution of such Supplemental Indenture is permitted by and in compliance with this Indenture, (ii) the execution and delivery of will not adversely affect the exclusion from federal gross income of the interest on the Bonds, and (iii) such Supplemental Indenture will, upon the execution and delivery thereof, to be a valid and binding obligation of the City. 60 ARTICLE XI DEFAULT AND REMEDIES Section 11.1. Events of Default. Each of the following occurrences or events shall be and is hereby declared to be an "Event of Default," to wit: (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 Assessments including the prosecution of foreclosure proceedings, in accordance with Section 7.2; (iii) Default in the performance or observance of any covenant, agreement or obligation of the City under this 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 such 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 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 this Indenture or any other agreement unless a responsible officer of the Trustee shall have actual knowledge thereof. Section 11.2. Immediate Remedies for Default. (a) Subject to Article VIII, upon the happening and continuance of any of the Events of Default described in Section 11.1, then and in every such case the Trustee may proceed, and upon the written request of the Owners of not less than 51% in aggregate Outstanding principal amount of the Bonds hereunder shall proceed, to protect and enforce the rights of the Owners under this 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 herein, or injunction; provided, however, that no action for money damages against the City may be sought or shall be permitted. 61 (b) PURSUANT TO SECTION 11.7, THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY CIRCUMSTANCES. (c) If the assets of the Trust Estate are sufficient to pay all amounts due with respect to Outstanding Bonds, in the selection of Trust Estate assets to be used in the payment of Bonds due under this Article, 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 selection, liquidation or sale. The Trustee shall have no liability for its selection of Trust Estate assets to liquidate or sell. (d) Whenever moneys are to be applied pursuant to this Article XI, irrespective of and whether other remedies authorized under this 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 as the Trustee may deem appropriate, and as may be required by law and apply the proceeds thereof in accordance with the provisions of this Section. Upon such sale, the Trustee may make and deliver to the purchaser or purchasers a good and sufficient assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the City, and all other Persons claiming such properties. No purchaser at any sale shall be bound to see to the application of the purchase money proceeds thereof or to inquire as to the authorization, necessity, expediency, or regularity of any such sale. Nevertheless, if so requested by the Trustee, the City shall ratify and confirm any sale or sales by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be necessary or, in the reasonable judgment of the Trustee, proper for the purpose which may be designated in such request. Section 11.3. Restriction on Owner’s Action. (a) No Owner shall have any right to institute any action, suit or proceeding at law or in equity for the enforcement of this Indenture or for the execution of any trust thereof or any other remedy hereunder, unless (i) a default has occurred and is continuing of which the Trustee has been notified in writing as provided in Section 11.1, or of which by such Section it is deemed to have notice, (ii) such default has become an Event of Default and the Owners of not less than 51% of the aggregate principal amount of the Bonds then Outstanding have made written request to the Trustee and offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, (iii) the Owners have furnished to the Trustee written evidence of indemnity as provided in Section 9.2, (iv) the Trustee has for 60 days after such notice failed or refused to exercise the powers hereinbefore granted, 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; 62 however, no one or more Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb, or prejudice this Indenture by its, his or their action or to enforce any right hereunder except in the manner provided herein, and that all proceedings at law or in equity shall be instituted and maintained in the manner provided herein and for the equal benefit of the Owners of all Bonds then Outstanding. The notification, request and furnishing of indemnity set forth above shall, at the option of the Trustee as advised by its counsel, be conditions precedent to the execution of the powers and trusts of this Indenture and to any action or cause of action for the enforcement of this Indenture or for any other remedy hereunder. (b) Subject to Article VIII, nothing in this 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 hereunder to the respective Owners thereof at the time and place, from the source and in the manner expressed herein and in the Bonds. (c) In case the Trustee or any Owners shall have proceeded to enforce any right under this 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 hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken. Section 11.4. Application of Revenues and Other Moneys After Default. (a) 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 this Article shall, after payment of the cost and expenses of the proceedings resulting in the collection of such amounts, the expenses (including its counsel fees, costs, and expenses), liabilities, and advances incurred or made by the Trustee and the fees of the Trustee in carrying out this Indenture, during the continuance of an Event of Default, notwithstanding Section 11.2, 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. 63 The Trustee shall make payments to the Owners pursuant to this Section 11.4 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. (b) In the event funds are not adequate to cure any of the Events of Default described in Section 11.1, 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 this Indenture. (c) The restoration of the City to its prior position after any and all defaults have been cured, as provided in Section 11.3, shall not extend to or affect any subsequent default under this Indenture or impair any right consequent thereon. Section 11.5. Effect of Waiver. No delay or omission of the Trustee, or any Owner, to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or the Owners, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 11.6. Evidence of Ownership of Bonds. (a) Any request, consent, revocation of consent or other instrument which this Indenture may require or permit to be signed and executed by the Owners may be in one or more instruments of similar tenor, and shall be signed or executed by such Owners in person or by their attorneys duly appointed in writing. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, or the holding by any Person of the Bonds shall be sufficient for any purpose of this Indenture (except as otherwise herein expressly provided) if made in the following manner: (i) The fact and date of the execution of such instruments by any Owner of Bonds or the duly appointed attorney authorized to act on behalf of such Owner may be provided by a guarantee of the signature thereon by a bank or trust company or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, that the Person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association or partnership, such signature guarantee, certificate, or affidavit shall also constitute sufficient proof of his authority. (ii) The ownership of Bonds and the amount, numbers and other identification and date of holding the same shall be proved by the Register. (b) Except as otherwise provided in this Indenture with respect to revocation of a consent, any request or consent by an Owner of any Bond shall bind all future Owners of the 64 same Bond in respect of anything done or suffered to be done by the City or the Trustee in accordance therewith. Section 11.7. No Acceleration. In the event of the occurrence of an Event of Default under Section 11.1, the right of acceleration of any Stated Maturity is not granted as a remedy hereunder and the right of acceleration under this Indenture is expressly denied. Section 11.8. Mailing of Notice. Any provision in this Article for the mailing of a notice or other document to Owners shall be fully complied with if it is mailed, first class postage prepaid, only to each Owner at the address appearing upon the Register. Section 11.9. Exclusion of Bonds. Bonds owned or held by or for the account of the City will not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Indenture, and the City shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Indenture. ARTICLE XII GENERAL COVENANTS AND REPRESENTATIONS Section 12.1. Representations as to Trust Estate. (a) The City represents and warrants that it is authorized by Applicable Laws to authorize and issue the Bonds, to execute and deliver this Indenture and to pledge the Trust Estate in the manner and to the extent provided in this Indenture, and that the Trust Estate is and will be and remain free and clear of any pledge, lien, charge, or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien created in or authorized by this Indenture except as expressly provided herein. (b) The City shall at all times, to the extent permitted by Applicable Laws, defend, preserve and protect the pledge of the Trust Estate and all the rights of the Owners and the Trustee, under this Indenture against all claims and demands of all Persons whomsoever. (c) Subject to Section 7.2(d), the City will take all steps reasonably necessary and appropriate, and will provide written direction to the Trustee to take all steps reasonably necessary and appropriate, to collect all delinquencies in the collection of the Assessments and any other amounts pledged to the payment of the Bonds to the fullest extent permitted by the PID Act and other Applicable Laws. Section 12.2. General. The City shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the City under the provisions of this Indenture. 65 ARTICLE XIII SPECIAL COVENANTS Section 13.1. Further Assurances; Due Performance. (a) At any and all times the City will duly execute, acknowledge and deliver, or will cause to be done, executed and delivered, all and every such further acts, conveyances, transfers, and assurances in a manner as the Trustee shall reasonably require for better conveying, transferring, pledging, and confirming unto the Trustee, all and singular, the revenues, Funds, Accounts and properties constituting the Pledged Revenues, and the Trust Estate hereby transferred and pledged, or intended so to be transferred and pledged. (b) The City will duly and punctually keep, observe and perform each and every term, covenant and condition on its part to be kept, observed and performed, contained in this Indenture. Section 13.2. Other Obligations or Other Liens; Refunding Bonds. (a) The City reserves the right, subject to the provisions contained in this Section 13.2, 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. (b) Other than Refunding Bonds issued to refund all or a portion of the Bonds, or subordinate lien obligations permitted hereunder, 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 this Indenture or the priority hereof might or could be lost or impaired. (c) Notwithstanding any contrary provision of this Indenture but subject to Section 7.3, the City shall not issue additional bonds, notes or other obligations under this Indenture, secured by any pledge of or other lien or charge on the Trust Estate or other property pledged under this Indenture, other than Refunding Bonds and subordinate lien obligations permitted hereunder. 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. Section 13.3. Books of Record. (a) The City shall cause to be kept full and proper books of record and accounts, in which full, true and proper entries will be made of all dealings, business and affairs of the City, which relate to the Trust Estate and the Bonds. (b) The Trustee shall have no responsibility with respect to the financial and other information received by it pursuant to this Section 13.3 except to receive and retain same, subject 66 to the Trustee’s document retention policies, and to distribute the same in accordance with the provisions of this Indenture. ARTICLE XIV PAYMENT AND CANCELLATION OF THE BONDS AND SATISFACTION OF THE INDENTURE Section 14.1. Trust Irrevocable. The trust created by the terms and provisions of this Indenture is irrevocable until the Bonds secured hereby are fully paid or provision is made for their payment as provided in this Article. Section 14.2. Satisfaction of Indenture. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Owners, principal of and interest on all of the Bonds, at the times and in the manner stipulated in this Indenture, and all amounts due and owing with respect to the Bonds have been paid or provided for, then the pledge of the Trust Estate and all covenants, agreements, and other obligations of the City to the Owners of such Bonds, shall thereupon cease, terminate, and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the City copies of all such documents as it may have evidencing that principal of and interest on all of the Bonds has been paid so that the City may determine if this Indenture is satisfied; if so, the Trustee shall pay over or deliver all moneys held by it in the Funds and Accounts held hereunder to the Person entitled to receive such amounts, or, if no Person is entitled to receive such amounts, then to the City. Section 14.3. Bonds Deemed Paid. (a) 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 this Indenture (a "Defeased Debt"), and particularly this Article XIV, when payment of the principal of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), either (1) shall have been made in accordance with the terms thereof, or (2) shall have been provided by irrevocably depositing with the Trustee, in trust, and irrevocably set aside exclusively for such payment, (A) money sufficient to make such payment or (B) Defeasance Securities that mature as to principal and interest in such amount and at such times as will insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of the Trustee pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee. Neither Defeasance Securities nor moneys deposited with the Trustee pursuant to this Section 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. 67 Any payment for Defeasance Securities purchased for the purpose of reinvesting cash as aforesaid shall be made only against delivery of such Defeasance Securities. (b) Any determination not to redeem Defeased Debt that is made in conjunction with the payment arrangements specified in Sections 14.3(a)(1) or 14.3(a)(2) shall not be irrevocable, provided that: (1) in the proceedings providing for such defeasance, the City expressly reserves the right to call the Defeased Debt for redemption; (2) the City gives notice of the reservation of that right to the Owners of the Defeased Debt immediately following the defeasance; (3) the City directs that notice of the reservation be included in any defeasance or redemption notices that it authorizes; and (4) at or prior to the time of the redemption, the City satisfies the conditions of clause (a) of this Section 14.3 with respect to such Defeased Debt as though it was being defeased at the time of the exercise of the option to redeem the Defeased Debt, after taking the redemption into account in determining the sufficiency of the provisions made for the payment of the Defeased Debt. (c) Until all Defeased Debt shall have become due and payable, the Trustee and the Paying Agent/Registrar each shall perform the services of Trustee and Paying Agent/Registrar for such Defeased Debt the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services as required by this Indenture. ARTICLE XV MISCELLANEOUS Section 15.1. Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any Person other than the City, the Trustee and the Owners, any right, remedy, or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Trustee. This Indenture and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersedes all prior agreements and understandings, oral or written. Section 15.2. Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the City or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 15.3. Execution of Documents and Proof of Ownership by Owners. (a) Any request, declaration, or other instrument which this Indenture may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys duly appointed in writing. (b) Except as otherwise expressly provided herein, the fact and date of the execution by any Owner or his attorney of such request, declaration, or other instrument, or of such writing 68 appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the Person signing such request, declaration, or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. (c) Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number, and date of holding the same shall be proved by the Register. (d) Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Trustee in good faith and in accordance therewith. Section 15.4. No Waiver of Personal Liability. No member, officer, agent, or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent, or employee from the performance of any official duty provided by law. Section 15.5. Notices to and Demands on City and Trustee. (a) Except as otherwise expressly provided herein, all notices or other instruments required or permitted under this Indenture shall be in writing and shall be faxed, delivered by hand, or mailed by first class mail, postage prepaid, and addressed as follows: If to the City City of Anna, Texas 120 W. 7th St. Anna, Texas 75409 Attn: Director of Finance Telephone: (972) 924-3325 If to the Trustee, initially also acting in the capacity of Paying Agent/Registrar Regions Bank 3773 Richmond Avenue, Suite 1100 Houston, Texas 77046 Attn: Corporate Trust Services Telephone: (713) 244-8042 (b) Any such notice, demand, or request may also be transmitted to the appropriate party by telegram or telephone and shall be deemed to be properly given or made at the time of such transmission if, and only if, such transmission of notice shall be confirmed in writing and sent as specified above. (c) Any of such addresses may be changed at any time upon written notice of such change given to the other party by the party effecting the change. Notices and consents given by mail in accordance with this Section shall be deemed to have been given five Business Days after 69 the date of dispatch; notices and consents given by any other means shall be deemed to have been given when received. (d) The Trustee shall mail to each Owner of a Bond notice of the redemption or defeasance of all Bonds Outstanding. Section 15.6. Partial Invalidity. If any Section, paragraph, sentence, clause, or phrase of this Indenture shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Indenture. The City hereby declares that it would have adopted this Indenture and each and every other Section, paragraph, sentence, clause, or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid, or unenforceable. Section 15.7. Applicable Laws. This Indenture shall be governed by and enforced in accordance with the laws of the State applicable to contracts made and performed in the State. Venue and exclusive jurisdiction for any action to enforce or construe this Indenture shall be a state court of competent jurisdiction in Collin County, Texas or any federal court with diversity jurisdiction. Section 15.8. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Indenture is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day that is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period from and after such date. Section 15.9. Reimbursement Agreement Amendments and Supplements. The City and the Developer may amend and supplement the Reimbursement Agreement from time to time without the consent or approval of the Owners or the Trustee. Section 15.10. Counterparts. This Indenture may be executed in counterparts, each of which shall be deemed an original. Section 15.11. Texas Government Code Verifications. (a) The Trustee represents that, neither the Trustee, nor any parent company, wholly- or majority-owned subsidiaries or affiliates of the same, if any, are companies identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on the following page of such officer's internet website: https://comptroller.texas.gov/purchasing/publications/divestment.php 70 The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable Federal law and excludes the Trustee and each parent company, wholly- or majority-owned subsidiaries, and other affiliates of the same, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. The Trustee understands "affiliate" to mean any entity that controls, is controlled by, or is under common control with the Trustee and exists to make a profit. (b) The Trustee hereby verify that the Trustee and any parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent this Indenture is a contract for goods or services, will not boycott Israel during the term of this Contract. The foregoing verification is made solely to comply with Section 2271.002, Texas Government Code, and to the extent such Section does not contravene applicable State or Federal law. As used in the foregoing verification, "boycott Israel" means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes. (c) The Trustee hereby verifies that it and any parent company, wholly- or majority- owned subsidiaries, and other affiliates, if any, do not boycott energy companies and, to the extent this Indenture is a contract for goods or services, will not boycott energy companies during the term of this Indenture. The foregoing verification is made solely to enable the City to comply with Section 2274.002, Texas Government Code, as added by Senate Bill 13 in the Regular Session of the 87th Legislature of Texas, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, “boycott energy company” means (without an ordinary business purpose) refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company either (i) engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable federal and state law or (ii) does business with such a company. (d) The Trustee hereby verifies that it and any parent company, wholly- or majority- owned subsidiaries, and other affiliates, if any, do not discriminate against a firearm entity or firearm trade association and, to the extent this Indenture is a contract for goods or services, will not discriminate against a firearm entity or firearm trade association during the term of this Indenture. The foregoing verification is made solely to enable the City to comply with Section 2274.002, Texas Government Code, and to the extent such Section does not contravene applicable Federal law. As used in the foregoing verification, (a) ‘discriminate against a firearm entity or firearm trade association’ means to refuse to engage in the trade of any goods or services, or to refrain from continuing or terminate an existing business relationship, with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association, but does not include any such action taken (i) to comply with federal, state, or local law, policy, or regulations or a directive by a regulatory agency or (ii) for a traditional business reason that is specific to the firearm entity or firearm trade association and not based solely on its status as a firearm entity or firearm trade association, (b) ‘firearm entity’ means a 71 manufacturer, distributor, wholesaler, supplier, or retailer of firearms, firearm accessories (i.e., devices specifically designed or adapted to enable an individual to wear, carry, store, or mount a firearm on the individual or on a conveyance and items used in conjunction with or mounted on a firearm that are not essential to the basic function of the firearm, including detachable firearm magazines), or ammunition (i.e., a loaded cartridge case, primer, bullet, or propellant powder with or without a projectile) or a sport shooting range (as defined by Section 250.001, Texas Local Government Code), and (c) ‘firearm trade association’ means a person, corporation, unincorporated association, federation, business league, or business organization that (i) is not organized or operated for profit (and none of the net earnings of which inures to the benefit of any private shareholder or individual), (ii) has two or more firearm entities as members, and (iii) is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization described by Section 501(c) of that code. As used in subsections (a) through (d) above, the Trustee understands “affiliate” to mean an entity that controls, is controlled by, or is under common control with the Trustee within the meaning of SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit. (e) The Trustee represents that it has, or will have prior to the date of delivery of the Bonds, on file with the Texas Attorney General a standing letter addressing the representations and verifications in subsections (a) through (d) above in a form acceptable to the Texas Attorney General. In addition, if the Trustee has received notice from the Texas Comptroller of Public Accounts that the Trustee or its affiliate may appear on the State of Texas’ list of financial companies that boycott energy companies, the Trustee agrees to provide to the City or Bond Counsel, two business days prior to the delivery date for the Bonds, written verification to the effect that the applicable standing letter remains in effect and may be relied upon by the City and the Texas Attorney General. The written verification will also confirm that the Trustee (or its affiliate which received the letter from the Comptroller) intends to timely respond to the Comptroller’s request. Such written verification may be in the form of an e-mail. [Remainder of page left blank intentionally] IN WITNESS WHEREOF, the City and the Trustee have caused this Indenture of Trust to be executed as of the date hereof. CITY OF ANNA, TEXAS By: ___________________________ Nate Pike, Mayor City of Anna, Texas Attest: _________________________ Carrie L. Land, City Secretary City of Anna, Texas (CITY SEAL) City Signature Page to Indenture of Trust REGIONS BANK, as Trustee By: ___________________________ Authorized Officer Trustee Signature Page to Indenture of Trust B-1 EXHIBIT B BOND PURCHASE AGREEMENT Draft 08.22.2023 4154-9297-3897.1 $7,419,000 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) BOND PURCHASE AGREEMENT September 12, 2023 City of Anna, Texas 120 W. 7th Street Anna, Texas 75409 Ladies and Gentlemen: The undersigned, FMSbonds, Inc. (the “Underwriter”), offers to enter into this Bond Purchase Agreement (this “Agreement”) with the City of Anna, Texas (the “City”), which will be binding upon the City and the Underwriter upon the acceptance of this Agreement by the City. This offer is made subject to its acceptance by the City by execution of this Agreement and its delivery to the Underwriter on or before 10:00 p.m., Central Time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriter upon written notice delivered to the City at any time prior to the acceptance hereof by the City. All capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Indenture (as defined herein) between the City and Regions Bank, as trustee (the “Trustee”), authorizing the issuance of the Bonds (as defined herein), and in the Limited Offering Memorandum (as defined herein). 1. Purchase and Sale of Bonds. Upon the terms and conditions and upon the basis of representations, warranties, and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of the $7,419,000 aggregate principal amount of the “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)” (the “Bonds”), at a purchase price of $_______ (representing the aggregate principal amount of the Bonds, less an Underwriter’s discount of $_______) and no accrued interest. Inasmuch as this purchase and sale represents a negotiated transaction, the City understands, and hereby confirms, that the Underwriter is not acting as a municipal advisor or fiduciary of the City (including, without limitation, a “municipal advisor” (as such term is defined in Section 975(e) of the Dodd Frank Wall Street Reform and Consumer Protection Act)), but rather is acting solely in its capacity as Underwriter for its own account. The City acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Agreement 2 4154-9297-3897.1 is an arm’s length commercial transaction between the City and the Underwriter, (ii) in connection with the discussions, undertakings, and procedures leading up to the consummation of this transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent, municipal advisor, financial advisor, or fiduciary of the City, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering described herein or the discussions, undertakings, and procedures leading thereto (regardless of whether the Underwriter has provided other services or is currently providing other services to the City on other matters) and the Underwriter has no obligation to the City with respect to the offering described herein except the obligations expressly set forth in this Agreement, (iv) the City has consulted its own legal, financial and other advisors to the extent it has deemed appropriate, (v) the Underwriter has financial and other interests that differ from those of the City, and (vi) the Underwriter has provided to the City prior disclosures under Rule G-17 of the Municipal Securities Rulemaking Board (“MSRB”), which have been received by the City. The City further acknowledges and agrees that following the issuance and delivery of the Bonds, the Underwriter has indicated that it may have periodic discussions with the City regarding the expenditure of Bond proceeds and the construction of the Improvement Area # Improvements financed with proceeds of the Bonds and, in connection with such discussions, the Underwriter shall be acting solely as a principal and will not be acting as the agent or fiduciary of, and will not be assuming an advisory or fiduciary responsibility in favor of, the City. The Bonds shall be dated the Closing Date (defined below) and shall have the maturities and redemption features, if any, and bear interest at the rates per annum shown on Schedule I hereto. Payment for and delivery of the Bonds, and the other actions described herein, shall take place on October 10, 2023 (or such other date as may be agreed to by the City and the Underwriter) (the “Closing Date”). 2. Authorization Instruments and Law. The Bonds were authorized by an ordinance enacted by the City Council of the City (the “City Council”) on September 12, 2023 (the “Bond Ordinance”) and shall be issued pursuant to the provisions of the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “Act”), and an Indenture of Trust dated as of September 15, 2023 (the “Indenture”) entered into by and between the City and the Trustee authorizing the issuance of the Bonds. The Bonds shall be substantially in the form described in, and shall be secured under the provisions of, the Indenture. The Bonds and interest thereon shall be secured by the Trust Estate, consisting primarily of Assessments levied on the Assessed Property within Improvement Area #1 of The Woods at Lindsey Place Public Improvement District (the “District”). The District was established by a resolution (the “Creation Resolution”), adopted by the City Council on February 14, 2023, in accordance with the Act. The Assessments were levied in accordance with a Service and Assessment Plan approved pursuant to an ordinance (the “Assessment Ordinance”) adopted March 14, 2023 (as such Service and Assessment Plan has been amended and updated, including to reflect the issuance of the Bonds, the “Service and Assessment Plan”). The Assessment Ordinance, the Creation Resolution, the Indenture, and the Bond Ordinance, are collectively referred to herein as the “Authorizing Documents.” The Bonds shall be further secured by certain applicable funds and accounts created pursuant to the Indenture. 3 4154-9297-3897.1 The Bonds shall be as described in Schedule I attached hereto, the Indenture, and the Limited Offering Memorandum. The proceeds of the Bonds shall be used to provide funds for (1) paying a portion of the costs of the Improvement Area #1 Projects, (2) funding a reserve fund for the payment of principal of and interest on the Bonds, (3) paying a portion of the costs incidental to the organization of the District, and (4) paying the costs of issuance of the Bonds. 3. Public Offering. The Underwriter agrees to make a bona fide limited public offering of all of the Bonds in accordance with Section 4 hereof to no more than thirty-five (35) persons that qualify as “Accredited Investors” (as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended and then in effect (the “Securities Act”) or “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act). On or before the third (3rd) business day prior to the Closing Date, the Underwriter shall execute and deliver to Bond Counsel (as defined herein) the Issue Price Certificate (as defined herein), in substantially the form attached hereto as Appendix B. 4. Establishment of Issue Price. (a) Definitions. For purposes of this Section 4, the following definitions apply: (i) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than a Tax Law Underwriter or a Related Party to a Tax Law Underwriter. (ii) “Related Party” means any two or more persons who are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profits interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (iii) “Sale Date” means the date of execution of this Purchase Agreement by all parties. (iv) “Tax Law Underwriter” means (A) any person that agrees pursuant to a written contract with the City to participate in the initial sale of the Bonds to the Public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public). 4 4154-9297-3897.1 (b) Issue Price Certificate. The Underwriter agrees to assist the City in establishing the issue price of the Bonds and to execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the Public of the Bonds (the “Issue Price Certificate”). All actions to be taken by the City under this Section to establish the issue price of the Bonds may be taken on behalf of the City by the Financial Advisor (defined in subsection 6(r) hereof) and any notice or report to be provided to the City may be provided to the Financial Advisor or Bond Counsel. (c) Public Offering. The Underwriter confirms that, on or before the Sale Date, the Underwriter offered the Bonds to the Public at the offering price or prices (each, an “Initial Offering Price”), or at the corresponding yield or yields, set forth in Schedule I attached hereto. (d) 10% Test. Except as otherwise set forth in the Issue Price Certificate, the City will determine the issue price of the Bonds based on the first price at which 10% of each maturity of the Bonds is sold to the Public (the “10% Test”). The Issue Price Certificate will set forth the maturities, if any, of the Bonds for which the issue price will be the applicable Initial Offering Price because the 10% Test was satisfied as of the Sale Date. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (e) Hold-The-Offering-Price Rule. The Issue Price Certificate will set forth the maturities, if any, of the Bonds for which the 10% Test was not satisfied as of the Sale Date and for which the City and the Underwriter agree that the restrictions in the next sentence will apply (each such maturity of the Bonds being referred to as a “Held Maturity”), which will allow the City, if it determines to do so on or before the Closing Date, to treat the Initial Offering Price to the Public of each such Held Maturity as the issue price of that Held Maturity (the “Hold-the-Offering-Price Rule”). For any maturity identified as a Held Maturity, the Underwriter will neither offer nor sell unsold Bonds of such Held Maturity to any person at a price that is higher than the applicable Initial Offering Price of such Held Maturity during the period starting on the Sale Date and ending on the earlier of the following: (i) the close of the fifth business day after the Sale Date; or (ii) the date on which the Tax Law Underwriters have sold at least 10% of such Held Maturity to the Public at a price that is no higher than the Initial Offering Price of such Held Maturity. The Underwriter will advise the City promptly after the close of the fifth business day after the Sale Date whether Tax Law Underwriters have sold 10% of each such Held 5 4154-9297-3897.1 Maturity to the Public at a price that is no higher than the applicable Initial Offering Price of such Held Maturity. On or after the sixth business day after the Sale Date, if requested by the City or Bond Counsel, the Underwriter also will promptly confirm that the Tax Law Underwriters have complied with the Hold-the-Offering-Price Rule. If at any time the Underwriter becomes aware of any noncompliance by a Tax Law Underwriter with respect to the Hold-the-Offering Price Rule, the Underwriter will promptly report such noncompliance to the City. The City acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (A) in the event a selling group has been created in connection with the initial sale of the Bonds to the Public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing the issue price of the Bonds, including its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (B) in the event that the Underwriter is a party to a third-party distribution agreement that was employed in connection with the initial sale of the Bonds of the Public, the agreement of each broker-dealer that is a party to such agreement to comply requirements for establishing the issue price of the Bonds, including its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that each Tax Law Underwriter will be solely liable for its failure to comply with its agreement regarding the Hold-the-Offering Price Rule and that no Tax Law Underwriter will be liable for the failure of any other Tax Law Underwriter to comply with its corresponding agreement requirements for establishing the issue price of the Bonds, including its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds. (f) Matters Relating to Certain Agreements. The Underwriter confirms that: (i) any selling group agreement and each third-party distribution agreement to which the Underwriter is a party relating to the initial sale of the Bonds to the Public, together with related pricing wires, contains or will contain language obligating the Underwriter, each dealer who is a member of any selling group, and each broker-dealer that is a party to any such third-party distribution agreement, as applicable, to: (A) comply with the Hold-the-Offering Price Rule, if applicable, for so long as directed by the Underwriter and as set forth in the related pricing wires; (B) promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a Related Party to a Tax Law Underwriter participating in the initial sale of the Bonds to the Public; and (C) acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter will assume that each order submitted by the dealer or broker-dealer is a sale to the Public; and 6 4154-9297-3897.1 (ii) any selling group agreement relating to the initial sale of the Bonds to the Public, together with related pricing wires, contains or will contain language obligating each dealer that is a party to any third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to comply with the Hold-the-Offering Price Rule, if applicable, in each case if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (g) Sale to Related Party not a Sale to the Public. The Underwriter acknowledges that sales of any Bonds to any person that is a Related Party to a Tax Law Underwriter do not constitute sales to the Public for purposes of this Section. 5. Limited Offering Memorandum. a. Delivery of Limited Offering Memorandum. The City previously has delivered, or caused to be delivered, to the Underwriter the Preliminary Limited Offering Memorandum for the Bonds dated August 29, 2023, (the “Preliminary Limited Offering Memorandum”), in a “designated electronic format,” as defined in the MSRB Rule G-32 (“Rule G-32”). The City will prepare, or cause to be prepared, a final Limited Offering Memorandum relating to the Bonds (as more particularly defined below, the “Limited Offering Memorandum”) which will be (i) dated the date of this Agreement, (ii) complete within the meaning of the United States Securities and Exchange Commission’s Rule 15c2-12, as amended (“Rule 15c2-12”), (iii) in a “designated electronic format,” and (iv) substantially in the form of the most recent version of the Preliminary Limited Offering Memorandum provided to the Underwriter before the execution hereof, except for the inclusion of the information permitted to be excluded from the Preliminary Limited Offering Memorandum by Section (b)(1) of Rule 15c2-12. The Limited Offering Memorandum, including the cover page thereto, all exhibits, schedules, appendices, maps, charts, pictures, diagrams, reports, and statements included or incorporated therein or attached thereto, and all amendments and supplements thereto that may be authorized for use with respect to the Bonds are collectively referred to herein as the “Limited Offering Memorandum.” Until the Limited Offering Memorandum has been prepared and is available for distribution, the City shall provide to the Underwriter, upon request, sufficient quantities (which may be in electronic format) of the Preliminary Limited Offering Memorandum as the Underwriter reasonably deems necessary to satisfy the obligation of the Underwriter under Rule 15c2-12 with respect to distribution to each potential customer. b. Preliminary Limited Offering Memorandum Deemed Final. The Preliminary Limited Offering Memorandum has been prepared for use by the Underwriter in connection with the public offering, sale, and distribution of the Bonds. The City hereby represents and warrants that the Preliminary Limited Offering Memorandum has been deemed final by the City as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12. 7 4154-9297-3897.1 c. Use of Limited Offering Memorandum in Offering and Sale. The City hereby authorizes the Limited Offering Memorandum and the information therein contained to be used by the Underwriter in connection with the public offering and the sale of the Bonds. The City consents to the use by the Underwriter prior to the date hereof of the Preliminary Limited Offering Memorandum in connection with the public offering of the Bonds. The City shall provide, or cause to be provided, to the Underwriter as soon as practicable after the date of the City’s acceptance of this Agreement (but, in any event, not later than the earlier of the Closing Date or seven (7) business days after the City’s acceptance of this Agreement) copies of the Limited Offering Memorandum which is complete as of the date of its delivery to the Underwriter. The City shall provide the Limited Offering Memorandum, or cause the Limited Offering Memorandum to be provided, (i) in a “designated electronic format” consistent with the requirements of Rule G-32, and (ii) in a printed format in such quantity as the Underwriter shall reasonably request in order for the Underwriter to comply with Section (b)(4) of Rule 15c2-12 and the rules of the MSRB. d. Updating of Limited Offering Memorandum. If, after the date of this Agreement, up to and including the date the Underwriter is no longer required to provide a Limited Offering Memorandum to potential customers who request the same pursuant to Rule 15c2-12 (the earlier of (i) ninety (90) days from the “end of the underwriting period” (as defined in Rule 15c2-12) and (ii) the time when the Limited Offering Memorandum is available to any person from the MSRB, but in no case less than the twenty-fifth (25th) day after the “end of the underwriting period” for the Bonds), the City becomes aware of any fact or event which might or would cause the Limited Offering Memorandum, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Limited Offering Memorandum to comply with law, the City will notify the Underwriter promptly (and for the purposes of this clause provide the Underwriter with such information as it may from time to time reasonably request), and if, in the reasonable judgment of the Underwriter, such fact or event requires preparation and publication of a supplement or amendment to the Limited Offering Memorandum, the City will forthwith prepare and furnish, at no expense to the Underwriter (in a form and manner approved by the Underwriter), either an amendment or a supplement to the Limited Offering Memorandum so that the statements therein as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or so that the Limited Offering Memorandum will comply with law; provided, however, that for all purposes of this Agreement and any certificate delivered by the City in accordance herewith, the City makes no representations with respect to the following information (collectively, the “Non-City Disclosures”) (i) the descriptions in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum of The Depository Trust Company, New York, New York (“DTC”), or its book-entry-only system, and (ii) the information in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum in any maps included therein or under the captions and subcaptions “PLAN OF FINANCE” (except for the subcaption “– 8 4154-9297-3897.1 The Bonds”), “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS,” “BOOK- ENTRY ONLY SYSTEM,” “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT,” “THE DEVELOPER,” “THE ADMINISTRATOR,” “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1 Projects, and the Development (as defined in the Limited Offering Memorandum)), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings,” “INFORMATION RELATING TO THE TRUSTEE,” and “APPENDIX E-2.” If such notification shall be subsequent to the Closing (as defined herein), the City, at no expense to the Underwriter, shall furnish such legal opinions, certificates, instruments, and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such supplement or amendment to the Limited Offering Memorandum. The City shall provide any such amendment or supplement, or cause any such amendment or supplement to be provided, (i) in a “designated electronic format” consistent with the requirements of Rule G-32 and (ii) in a printed format in such quantity as the Underwriter shall reasonably request in order for the Underwriter to comply with Section (b)(4) of Rule 15c2-12 and the rules of the MSRB. e. Filing with MSRB. The Underwriter hereby agrees to timely file the Limited Offering Memorandum with the MSRB through its Electronic Municipal Market Access (“EMMA”) system within one (1) business day after receipt but no later than the Closing Date. Unless otherwise notified in writing by the Underwriter, the City can assume that the “end of the underwriting period” for purposes of Rule 15c2-12 is the Closing Date. f. Limited Offering. The Underwriter hereby represents, warrants, and covenants that the Bonds were initially sold pursuant to a limited offering. The Bonds were sold to not more than thirty-five (35) persons that qualify as “Accredited Investors” (as defined in Rule 501 of Regulation D under the Securities Act) or “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act). 6. City Representations, Warranties and Covenants. The City represents, warrants, and covenants that: a. Due Organization, Existence and Authority. The City is a political subdivision of the State of Texas (the “State”), and has, and at the Closing Date will have, full legal right, power, and authority: (i) to enter into and perform its duties and obligations under: (1) this Agreement; (2) the Indenture; (3) the Improvement Area #1 Funding and Reimbursement Agreement The Woods at Lindsey Place Public Improvement District, effective as of March 14, 2023 (the “Reimbursement Agreement”), 9 4154-9297-3897.1 executed and delivered by the City and D.R. Horton – Texas, Ltd., a Texas limited partnership (the “Developer”); (4) the Development Agreement, effective as of November 10, 2020, executed and delivered by the City and the LHJH Properties, Ltd., as assigned to the Developer, and as amended by The Woods at Lindsey Place Subdivision Improvement Agreement, executed and delivered by the City and the Developer, effective January 12, 2021, and as further amended by the First Amendment to Development Agreement and to The Woods at Lindsey Place Subdivision and Improvement Agreement, executed and delivered by the City and the Developer, effective January 24, 2023 (collectively, the “Development Agreement”); and (5) the Continuing Disclosure Agreement of Issuer with respect to the Bonds, dated as of October 1, 2023 (the “Continuing Disclosure Agreement of Issuer”), executed and delivered by the City, P3Works, LLC (the “PID Administrator”), and Regions Bank, as dissemination agent (the “Dissemination Agent”); (ii) to issue, sell, and deliver the Bonds to the Underwriter as provided herein; and (iii) to carry out and consummate the transactions on its part described in (1) the Authorizing Documents, (2) this Agreement, (3) the Reimbursement Agreement, (4) the Development Agreement, (5) the Continuing Disclosure Agreement of Issuer, (6) the Limited Offering Memorandum, and (7) any other documents and certificates described in any of the foregoing (the documents described by subclauses (1) through (7) being referred to collectively herein as the “City Documents”). b. Due Authorization and Approval of City. By all necessary official action of the City, the City has duly authorized and approved the adoption or execution and delivery by the City of, and the performance by the City of the obligations on its part contained in, the City Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified, or rescinded, except as may have been approved by the Underwriter. When validly executed and delivered by the other parties thereto, the City Documents will constitute the legally valid and binding obligations of the City enforceable upon the City in accordance with their respective terms, except insofar as enforcement may be limited by principles of sovereign immunity, bankruptcy, insolvency, reorganization, moratorium, or similar laws or equitable principles relating to or affecting creditors’ rights generally. The City has complied, and will at the Closing be in compliance, in all material respects, with the obligations on its part to be performed on or prior to the Closing Date under the City Documents. c. Due Authorization for Issuance of the Bonds. The City has duly authorized the issuance and sale of the Bonds pursuant to the Bond Ordinance, the 10 4154-9297-3897.1 Indenture, and the Act. The City has, and at the Closing will have, full legal right, power and authority (i) to enter into, execute, deliver, and perform its obligations under this Agreement and the other City Documents, (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Indenture, the Bond Ordinance, the Act, and as provided herein, and (iii) to carry out, give effect to and consummate the transactions on the part of the City described by the Bond Ordinance and the other City Documents. d. No Breach or Default. As of the time of acceptance hereof, and to its knowledge, the City is not, and as of the Closing Date the City will not be, in breach of or in default in any material respect under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument related to the Bonds and to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach, default or event could have a material adverse effect on the City’s ability to perform its obligations under the Bonds or the City Documents; and, as of such times, the authorization, execution and delivery of the Bonds and the City Documents and compliance by the City with obligations on its part to be performed in each of such agreements or instruments does not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties are bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be permitted by the City Documents. e. No Litigation. At the time of acceptance hereof there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an “Action”) pending against the City with respect to which the City has been served with process, nor to the knowledge of the City is any Action threatened against the City, in which any such Action (i) in any way questions the existence of the City or the rights of the members of the City Council to hold their respective positions, (ii) in any way questions the formation or existence of the District, (iii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the City Documents or the consummation of the transactions on the part of the City described therein, or contests the exclusion of the interest on the Bonds from federal income taxation, or (iv) which may result in any material adverse change in the financial condition of the City; and, as of the time of acceptance hereof, to the City’s knowledge, there is no basis for any action, suit, 11 4154-9297-3897.1 proceeding, inquiry, or investigation of the nature described in clauses (i) through (iv) of this sentence. f. Bonds Issued Pursuant to Indenture. The City represents that the Bonds, when issued, executed, and delivered in accordance with the Indenture and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the City subject to the terms of the Indenture, entitled to the benefits of the Indenture and the security of the pledge of the proceeds of the levy of the Assessments received by the City, all to the extent provided for in the Indenture. The Indenture creates a valid pledge of certain revenues and the monies in certain funds and accounts established pursuant to the Indenture to the extent provided for in the Indenture, including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. g. Assessments. The Assessments constituting the security for the Bonds have been levied by the City in accordance with the Assessment Ordinance and the Act on those parcels of land identified in the Improvement Area #1 Assessment Roll (as defined in the Service and Assessment Plan). According to the Act, such Assessments constitute a valid and legally binding first and prior lien against the properties assessed, superior to all other liens and claims, except liens or claims for state, county, school district, or municipality ad valorem taxes. h. Consents and Approvals. All authorizations, approvals, licenses, permits, consents, elections, and orders of or filings with any governmental authority, legislative body, board, agency, or commission having jurisdiction in the matters which are required by the Closing Date for the due authorization of, which would constitute a condition precedent to or the absence of which would adversely affect the due performance by the City of, its obligations in connection with the City Documents have been duly obtained or made and are in full force and effect, except the approval of the Bonds by the Attorney General of the State, registration of the Bonds by the Comptroller of Public Accounts of the State, and the approvals, consents and orders as may be required under Blue Sky or securities laws of any jurisdiction. i. Public Debt. Prior to the Closing, the City will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the Assessments that secure the Bonds without the prior approval of the Underwriter. j. Preliminary Limited Offering Memorandum. The information contained in the Preliminary Limited Offering Memorandum is true and correct in all material respects, and such information does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the City makes no representations with respect to the Non-City Disclosures. 12 4154-9297-3897.1 k. Limited Offering Memorandum. At the time of the City’s acceptance hereof and (unless the Limited Offering Memorandum is amended or supplemented pursuant to paragraph (d) of Section 5 of this Agreement) at all times subsequent thereto during the period up to and including the twenty-fifth (25th) day subsequent to the “end of the underwriting period,” the information contained in the Limited Offering Memorandum does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the City makes no representations with respect to the Non-City Disclosures; and further provided, however, that if the City notifies the Underwriter of any fact or event as required by Section 5(d) hereof, and the Underwriter determines that such fact or event does not require preparation and publication of a supplement or amendment to the Limited Offering Memorandum, then the Limited Offering Memorandum in its then-current form shall be conclusively deemed to be complete and correct in all material respects. l. Supplements or Amendments to Limited Offering Memorandum. If the Limited Offering Memorandum is supplemented or amended pursuant to paragraph (d) of Section 5 of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the twenty-fifth (25th) day subsequent to the “end of the underwriting period,” the Limited Offering Memorandum as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that if the City notifies the Underwriter of any fact or event as required by Section 5(d) hereof, and the Underwriter determines that such fact or event does not require preparation and publication of a supplement or amendment to the Limited Offering Memorandum, then the Limited Offering Memorandum in its then- current form shall be conclusively deemed to be complete and correct in all material respects. m. Compliance with Rule 15c2-12. During the past five (5) years, the City has complied in all material respects with its previous continuing disclosure undertakings made by it in accordance with Rule 15c2-12, except as described in the Limited Offering Memorandum. n. Use of Bond Proceeds. The City will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Indenture and will not take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds. o. Blue Sky and Securities Laws and Regulations. The City will furnish such information and execute such instruments and take such action in cooperation with the Underwriter as the Underwriter may reasonably request, at no expense to the City, (i) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and 13 4154-9297-3897.1 regulations of such states and other jurisdictions in the United States as the Underwriter may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (ii) to continue such qualifications in effect so long as required for the initial distribution of the Bonds by the Underwriter (provided, however, that the City will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any jurisdiction) and will advise the Underwriter immediately of receipt by the City of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose. p. Certificates of the City. Any certificate signed by any official of the City authorized to do so in connection with the transactions described in this Agreement shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein and can be relied upon by the Underwriter as to the statements made therein. q. Intentional Actions Regarding Representations and Warranties. The City covenants that between the date hereof and the Closing it will not intentionally take actions which will cause the representations and warranties made in this Section to be untrue as of the Closing. r. Financial Advisor. The City has engaged Hilltop Securities Inc. as its financial advisor (the “Financial Advisor”) in connection with its offering and issuance of the Bonds. By delivering the Limited Offering Memorandum to the Underwriter, the City shall be deemed to have reaffirmed, with respect to the Limited Offering Memorandum, the representations, warranties, and covenants set forth above. 7. Developer Letter of Representations. At the signing of this Agreement, the City and Underwriter shall receive from the Developer an executed Developer Letter of Representations (the “Developer Letter of Representations”) in the form of Appendix A hereto, and, at the Closing, a certificate signed by the Developer as set forth in Section 10(e) hereof (the “Developer Closing Certificate”). 8. The Closing. At 10:00 a.m., Central time, on the Closing Date, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the City and the Underwriter, (i) the City will deliver or cause to be delivered to DTC through its “FAST” System, the Bonds in the form of one fully registered Bond for each maturity, registered in the name of Cede & Co., as nominee for DTC, duly executed by the City and authenticated by the Trustee as provided in the Indenture, and (ii) the City will deliver the closing documents hereinafter mentioned to McCall, Parkhurst & Horton L.L.P. (“Bond Counsel”), or a place to be mutually agreed upon by the City and the Underwriter. Settlement will be through the facilities of DTC. The Underwriter will accept delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in federal funds payable to the order of the City or its designee. These payments and deliveries, together with the delivery of the aforementioned documents, are herein called the “Closing.” The Bonds will be made available to the 14 4154-9297-3897.1 Underwriter or Underwriter’s Counsel (as defined herein) for inspection not less than twenty- four (24) hours prior to the Closing. 9. Underwriter’s Closing Conditions. The Underwriter has entered into this Agreement in reliance upon the representations and covenants herein and in the Developer Letter of Representations and the performance by the City of its obligations under this Agreement, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations under this Agreement to purchase, accept delivery of, and pay for the Bonds shall be conditioned upon the performance by the City of its obligations to be performed hereunder at or prior to Closing and shall also be subject to the following additional conditions: a. Bring-Down Representations of the City. The representations and covenants of the City contained in this Agreement shall be true and correct in all material respects as of the date hereof and at the time of the Closing, as if made on the Closing Date. b. Executed Agreements and Performance Thereunder. At the time of the Closing: (i) the City Documents shall be in full force and effect, and shall not have been amended, modified, or supplemented except with the written consent of the Underwriter; (ii) the Authorizing Documents shall be in full force and effect; (iii) there shall be in full force and effect such other resolutions or actions of the City as, in the opinion of Bond Counsel and Underwriter’s Counsel, shall be necessary, on or prior to the Closing Date, in connection with the transactions on the part of the City described in this Agreement and the City Documents; (iv) there shall be in full force and effect such other resolutions or actions of the Developer as, in the opinion of the Coats Rose, P.C. (“Developer’s Counsel”), shall be necessary, on or prior to the Closing Date, in connection with the transactions on the part of the Developer described in the Developer Letter of Representations, the Reimbursement Agreement, the Development Agreement, the Landowner Consent Certificate executed by the Developer as of , 2023 (the “Landowner Certificate”), and the Continuing Disclosure Agreement of Developer with respect to the Bonds, dated as of October 1, 2023, executed and delivered by the Developer, P3Works, LLC, as PID Administrator, and the Dissemination Agent, as dissemination agent (the “Continuing Disclosure Agreement of Developer” and, together with the Developer Letter of Representation, the Reimbursement Agreement, the Development Agreement, and the Landowner Certificate, the “Developer Documents”); and (v) the City shall perform or have performed its obligations required or specified in the City Documents to be performed at or prior to Closing. 15 4154-9297-3897.1 c. No Default. At the time of the Closing, no default shall have occurred or be existing and no circumstances or occurrences that, with the passage of time or giving of notice, shall constitute an event of default under this Agreement, the Indenture, the City Documents, the Developer Documents or other documents relating to the financing and construction of the Improvement Area #1 Projects and the Development (as defined in the Limited Offering Memorandum), and the Developer shall not be in default in the payment of principal of or interest on any of its indebtedness which default shall materially adversely impact the ability of the Developer to pay the Assessments when due. d. Closing Documents. At or prior to the Closing, the Underwriter shall have received each of the documents required under Section 10 below. e. Termination Events. The Underwriter shall have the right to cancel its obligation to purchase the Bonds and to terminate this Agreement without liability therefor by written notification to the City if, between the date of this Agreement and the Closing, in the Underwriter’s reasonable judgment, any of the following shall have occurred: (i) the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall be materially adversely affected by the occurrence of any of the following: (1) legislation shall have been introduced in or enacted by the Congress of the United States or adopted by either House thereof, or legislation pending in the Congress of the United States shall have been amended, or legislation shall have been recommended to the Congress of the United States or otherwise endorsed for passage (by press release, other form of notice, or otherwise) by the President of the United States, the Treasury Department of the United States, or the Internal Revenue Service or legislation shall have been proposed for consideration by either the U.S. Senate Committee on Finance or the U.S. House of Representatives Committee on Ways and Means or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision by a court of the United States or the Tax Court of the United States shall be rendered or a ruling, regulation, or official statement (final, temporary, or proposed) by or on behalf of the Treasury Department of the United States, the Internal Revenue Service, or other federal agency shall be made, which would result in federal taxation of revenues or other income of the general character expected to be derived by the City or upon interest on securities of the general character of the Bonds or which would have the effect of changing, directly or indirectly, the federal income tax consequences of receipt of interest on securities of the general character of the Bonds in the hands of the holders thereof, and which in either case, makes it, in the reasonable judgment of the Underwriter, impracticable or inadvisable to 16 4154-9297-3897.1 proceed with the offer, sale, or delivery of the Bonds on the terms and in the manner described in the Limited Offering Memorandum; or (2) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as described herein or by the Limited Offering Memorandum, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect (the “Trust Indenture Act”); or (3) a general suspension of trading in securities on the New York Stock Exchange, the establishment of minimum prices on such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; provided, however that such suspension in trading or any disruption in securities settlement, payment or clearance services is not in force on the date hereof; or (4) there shall have occurred (whether or not foreseeable) (i) any outbreak of hostilities (including, without limitation, an act of terrorism) including, but not limited to, an escalation of hostilities that existed prior to the date hereof, (ii) national or international calamity or crisis, including, but not limited to, an escalation in the scope or magnitude of any pandemic or natural disaster, or (iii) material financial crisis or adverse change in the financial or economic conditions affecting the United States government or the securities markets in the United States and the effect of any such event on the financial markets of the United States shall be such as would make it impracticable, in the reasonable judgment of the Underwriter, for it to sell the Bonds on the terms and in the manner described in the Limited Offering Memorandum; or (5) there shall have occurred since the date of this Agreement any materially adverse change in the affairs or financial condition of the City, except as disclosed or described in the Limited Offering Memorandum; or 17 4154-9297-3897.1 (6) any state blue sky or securities commission or other governmental agency or body in any state in which more than ten percent (10%) of the Bonds have been offered and sold shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating thereto, provided that such withholding or stop order is not due to the malfeasance, misfeasance, or nonfeasance of the Underwriter; or (7) any amendment to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), or the validity or enforceability of the Assessments pledged to pay principal of and interest on the Bonds; or (ii) the New York Stock Exchange or other national securities exchange or any governmental authority shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; or (iii) any event occurring, or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Limited Offering Memorandum, or has the effect that the Limited Offering Memorandum contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, which change shall occur subsequent to the date of this Agreement and shall not be due to the malfeasance, misfeasance or nonfeasance of the Underwriter; or (iv) any fact or event shall exist or have existed that, in the Underwriter’s reasonable judgment, requires or has required an amendment of or supplement to the Limited Offering Memorandum; or (v) a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and shall be in force; or (vi) a material disruption in securities settlement, payment or clearance services shall have occurred; or (vii) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as described in this Agreement or in the Limited Offering Memorandum, or any document relating 18 4154-9297-3897.1 to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws on the Closing Date, including the Securities Act, the Securities Exchange Act of 1934 and the Trust Indenture Act, as then in effect; or (viii) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission, which prohibition shall occur subsequent to the date hereof and shall not be due to the malfeasance, misfeasance, or nonfeasance of the Underwriter. With respect to the conditions described in subparagraphs (ii), (vii) and (viii) above, the Underwriter is not aware of any current, pending, or proposed law or government inquiry or investigation as of the date of execution of this Agreement which would permit the Underwriter to invoke its termination rights hereunder. 10. Closing Documents. At or prior to the Closing, the Underwriter (or Underwriter’s Counsel on behalf of the Underwriter) shall receive the following documents: a. Bond Opinion. The approving opinion of Bond Counsel, dated the Closing Date and substantially in the form included as Appendix D to the Limited Offering Memorandum, together with a reliance letter from Bond Counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, which may be included in the supplemental opinion required by Section 10(b) hereof, to the effect that the foregoing opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion were addressed to it. b. Supplemental Opinion. A supplemental opinion of Bond Counsel dated the Closing Date and addressed to the City and the Underwriter, in form and substance acceptable to Underwriter’s Counsel, to the following effect: (i) Except to the extent noted therein, Bond Counsel has not verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements and information contained in the Preliminary Limited Offering Memorandum and in the Limited Offering Memorandum but that Bond Counsel has reviewed the statements and information appearing in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum under the captions and subcaptions “PLAN OF FINANCE – The Bonds,” “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE BONDS,” “ASSESSMENT PROCEDURES” (except for the subcaptions “Assessment Methodology” and “Assessment Amounts”), “THE DISTRICT,” “TAX MATTERS,” “LEGAL MATTERS – Legal Proceedings” (first paragraph only) and “– Legal Opinions,” “SUITABILITY FOR INVESTMENT,” “CONTINUING DISCLOSURE – The City,” “REGISTRATION AND QUALIFICATION OF BONDS FOR SALE,” “LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS,” “INVESTMENTS” 19 4154-9297-3897.1 and “APPENDIX B,” and Bond Counsel is of the opinion that the information relating to the Bonds and legal issues contained under such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and, with respect to the Bonds, such information conforms to the Bond Ordinance, the Assessment Ordinance, and the Indenture; (ii) The Bonds are not subject to the registration requirements of the Securities Act, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act; (iii) The City has or at the time of the adoption thereof had full power and authority to adopt the Creation Resolution, the Assessment Ordinance, the Service and Assessment Plan, and the Bond Ordinance (collectively, the foregoing documents are referred to herein as the “City Actions”) and perform its obligations thereunder and the City Actions have been duly adopted, are in full force and effect and have not been modified, amended or rescinded; and (iv) The Indenture, the Reimbursement Agreement, the Development Agreement, the Continuing Disclosure Agreement of Issuer, and this Agreement have been duly authorized, executed and delivered by the City and, assuming the due authorization, execution and delivery of such instruments, documents, and agreements by the other parties thereto, constitute the legal, valid, and binding agreements of the City, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting enforcement of creditors’ rights, or by the application of equitable principles if equitable remedies are sought and to the application of Texas law relating to governmental immunity applicable to governmental entities. c. City Legal Opinion. An opinion of the City Attorney, dated the Closing Date and addressed to the Underwriter, the City and the Trustee, with respect to matters relating to the City, substantially in the form of Appendix C hereto or in form otherwise agreed upon by the Underwriter. d. Opinion of Developer’s Counsel. An opinion of Developer’s Counsel, substantially in the form of Appendix D hereto, dated the Closing Date and addressed to the City, Bond Counsel, the Underwriter, and the Trustee. e. Developer Closing Certificate. The Developer Closing Certificate dated as of the Closing Date, signed by authorized officers of the Developer in substantially the form of Appendix E hereto. f. City Closing Certificate. A certificate of the City, dated the Closing Date, signed by an appropriate City official, to the effect that: (i) the representations and warranties of the City contained herein and in the City Documents are true and correct in all material respects on and as of the Closing Date as if made on the date thereof; 20 4154-9297-3897.1 (ii) the Authorizing Documents and City Documents are in full force and effect and have not been amended, modified, or supplemented; (iii) except as disclosed in the Limited Offering Memorandum, no litigation or proceeding against the City is pending or, to the knowledge of such person, threatened in any court or administrative body nor is there a basis for litigation which would (a) contest the right of the members or officials of the City to hold and exercise their respective positions, (b) contest the due organization and valid existence of the City or the establishment of the District, (c) contest the validity, due authorization and execution of the Bonds or the City Documents, or (d) attempt to limit, enjoin or otherwise restrict or prevent the City from levying and collecting the Assessments pledged to pay the principal of and interest on the Bonds, or the pledge thereof; and (iv) the City has, to the best of such person’s knowledge, complied with all agreements and covenants and satisfied all conditions set forth in the City Documents, on its part to be complied with or satisfied hereunder at or prior to the Closing. g. Trustee’s Counsel Opinion. An opinion of counsel to the Trustee, dated the Closing Date and addressed to the Underwriter, the City and Bond Counsel, in form and substance acceptable to Underwriter’s Counsel, the City and Bond Counsel to the following effect: (i) The Trustee is duly organized, validly existing and in good standing as a national banking association organized under the laws of the United States of America, and is duly qualified to serve as Trustee in accordance with the qualifications set forth for the Trustee in the Indenture; (ii) The Trustee has full right, power, and authority to enter into the Indenture, to perform its obligations under, and to carry out and consummate all of the transactions involving the Trustee contemplated by, the Indenture; and (iii) The Indenture has been duly authorized, executed and delivered by the Trustee and is valid and enforceable against the Trustee in accordance with its terms. h. Trustee’s Certificate. A customary authorization and incumbency certificate dated prior to the Closing Date, signed by authorized officers of the Trustee in form and substance acceptable to the Underwriter, Underwriter’s Counsel and Bond Counsel. i. Underwriter Counsel’s Opinion. An opinion, dated the Closing Date and addressed to the Underwriter, of Orrick, Herrington & Sutcliffe LLP, (“Underwriter’s Counsel”), to the effect that: 21 4154-9297-3897.1 (i) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (ii) Such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness, or fairness of any of the statements contained in the Preliminary Limited Offering Memorandum or in the Limited Offering Memorandum and it has not independently verified the accuracy, completeness, or fairness of any such statements. In its capacity as counsel to the Underwriter, to assist the Underwriter in part of its responsibility with respect to the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, such counsel has participated in conferences with representatives of the Underwriter, representatives of the City, and its counsel, Bracewell LLP, as bond counsel, Hilltop Securities, as financial advisor, P3Works, LLC, as public improvement district administrator, the Developer, and its engineers and consultants and others, during which the contents of the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum and related matters were discussed. Based on such counsel’s participation in the above-mentioned conferences (which, with respect to the Preliminary Limited Offering Memorandum, did not extend beyond the date of this Agreement, and, with respect to the Limited Offering Memorandum, did not extend beyond its date), and in reliance thereon, on oral and written statements and representations of the City, the Developer and others and on the records, documents, certificates, opinions and matters herein mentioned, such counsel advises the Underwriter as a matter of fact and not opinion that, during the course of such counsel’s representation of the Underwriter on this matter, (a) no facts had come to the attention of the attorneys in such counsel’s firm rendering legal services to the Underwriter in connection with the Preliminary Limited Offering Memorandum which caused such counsel to believe, as of the date of the Preliminary Limited Offering Memorandum and as of the date of this Agreement, based on the documents, drafts and facts in existence and reviewed as of those dates, that the Preliminary Limited Offering Memorandum contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except any information marked as preliminary or subject to change, any information permitted to be omitted by Securities and Exchange Commission Rule 15c2-12 or otherwise left blank and any other differences with the information in the Limited Offering Memorandum), and (b) no facts had come to the attention of the attorneys in such counsel’s firm rendering legal service to the Underwriter in connection with the Limited Offering Memorandum which caused such counsel to believe that the Limited Offering Memorandum as of its date contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, such counsel expressly excludes from the scope of this paragraph and expresses no opinion or conclusion, with respect to both the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, about any CUSIP numbers, financial, accounting, statistical or 22 4154-9297-3897.1 economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any information about verification, feasibility, valuation, appraisals, absorption, real estate or environmental matters, relationship among the parties, Appendices, or any information about book-entry, DTC, Cede & Co., tax exemption, underwriters, or underwriting, included or referred to therein or omitted therefrom. No responsibility is undertaken or conclusion expressed with respect to any other disclosure document, materials or activity, or as to any information from another document or source referred to by or incorporated by reference in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum; and (iii) The Continuing Disclosure Agreement of Issuer satisfies the requirements contained in Securities and Exchange Commission Rule 15c2- 12(b)(5) for an undertaking by the City for the benefit of the holders of the Bonds to provide the information at the times and in the manner required by said Rule; provided that, for purposes of this opinion, such counsel is not expressing any view regarding the content of the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum that is not expressly stated in numbered paragraph ii, above. j. Limited Offering Memorandum. The Limited Offering Memorandum and each supplement or amendment, if any, thereto. k. Delivery of City Documents and Developer Documents. The City Documents and Developer Documents shall have been executed and delivered in form and content satisfactory to the Underwriter. l. Form 8038-G. Evidence that the federal tax information form 8038-G has been prepared by Bond Counsel for filing. m. Federal Tax Certificate. A certificate of the City in form and substance satisfactory to Bond Counsel and Underwriter’s Counsel setting forth the facts, estimates and circumstances in existence on the Closing Date, which establish that it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code. n. Attorney General Opinion and Comptroller Registration. The approving opinion of the Attorney General of the State regarding the Bonds and the Comptroller of the State’s Certificate of Registration for the Initial Bond. o. Continuing Disclosure Agreements. The Continuing Disclosure Agreement of Issuer and the Continuing Disclosure Agreement of Developer shall have been executed by the parties thereto in substantially the forms attached to the Limited Offering Memorandum as Appendix E-1 and Appendix E-2. 23 4154-9297-3897.1 p. Letter of Representation of the Appraiser. (i) Letter of Representation of the Appraiser, substantially in the form of Appendix G hereto, addressed to the City, Bond Counsel, the Underwriter, and the Trustee, or in form otherwise agreed upon by the Underwriter, and (ii) a copy of the real estate appraisal of the property in the District dated August 16, 2023. q. Letter of Representation of PID Administrator. Letter of Representation of PID Administrator, substantially in the form of Appendix F hereto, addressed to the City, Bond Counsel, the Underwriter, and the Trustee, or in form otherwise agreed upon by the Underwriter. r. Evidence of Filing of Creation Resolution and Assessment Ordinance. Evidence that (i) the Creation Resolution including a legal description of the District by metes and bounds and (ii) the Assessment Ordinance and Service and Assessment Plan, including the legal description of the property within the District and the assessment rolls, have been filed of record in the real property records of Collin County, Texas. s. Reserved. t. Developer Organizational Documents. The Developer shall have delivered to the Underwriter and the City, (i) fully executed copies of the Developer’s organizational documents, (ii) a Certificate of Status from the Texas Secretary of State and (iii) verification of franchise tax account status from the Texas Comptroller of Public Accounts for the Developer. u. Rule 15c2-12 Certification. A resolution, ordinance, or certificate whereby the City has deemed the Preliminary Limited Offering Memorandum final as of its date, except for permitted omissions, as contemplated by Rule 15c2-12 in connection with the offering of the Bonds, which certification may be included in the City Certificate required by subsection 10(f) hereof or the Bond Ordinance. v. Dissemination Agent. Evidence acceptable to the Underwriter in its sole reasonable discretion that the City and the Developer have engaged a dissemination agent acceptable to the Underwriter for the Bonds, with the execution of the Continuing Disclosure Agreement of Issuer and the Continuing Disclosure Agreement of Developer by other parties thereto being conclusive evidence of such acceptance by the Underwriter. w. Blanket Letter of Representation. A copy of the current Blanket Issuer Letter of Representation to DTC signed by the City. x. Additional Documents. Such additional legal opinions, certificates, instruments, and other documents as the Underwriter or Underwriter’s Counsel may reasonably deem necessary. 11. City’s Closing Conditions. The obligation of the City hereunder to deliver the Bonds shall be subject to receipt on or before the Closing Date of the purchase price set forth in Section 1 hereof, the Attorney General Opinion, the opinion of Bond Counsel described in Section 10(a) hereof and all documents required to be delivered by the Developer. 24 4154-9297-3897.1 12. Consequences of Termination. If the City shall be unable to satisfy the conditions contained in this Agreement or if the obligations of the Underwriter shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and the Underwriter and the City shall have no further obligation hereunder, except as further set forth in Sections 13, 15, and 20 hereof. 13. Costs and Expenses. a. The Underwriter shall be under no obligation to pay, and the City shall cause to be paid from proceeds of the Bonds the following expenses incident to the issuance of the Bonds and performance of the City’s obligations hereunder: (i) the costs of the preparation and printing of the Bonds; (ii) the cost of preparation, printing, and mailing of the Preliminary Limited Offering Memorandum, the final Limited Offering Memorandum and any supplements and amendments thereto; (iii) the fees and disbursements of the City’s Financial Advisor, the Trustee’s counsel, Bond Counsel, Developer’s Counsel, and the Trustee relating to the issuance of the Bonds; (iv) the Attorney General’s review fees; (v) the fees and disbursements of accountants, advisers and any other experts or consultants retained by the City or the Developer, including but not limited to the fees and expenses of any Appraiser and the PID Administrator; and (vi) the expenses incurred by or on behalf of City employees and representatives that are incidental to the issuance of the Bonds and the performance by the City of its obligations under this Agreement. b. The Underwriter shall pay the following expenses: (i) all advertising expenses in connection with the limited offering of the Bonds; (ii) fees of Underwriter’s Counsel; and (iii) all other expenses, including CUSIP fees (including out of pocket expenses and related regulatory expenses), incurred by it in connection with its public offering and distribution of the Bonds, except as noted in Subsection 13(a) above. c. The City acknowledges that the Underwriter will pay from the Underwriter’s expense allocation of the underwriting discount the applicable per bond assessment charged by the Municipal Advisory Council of Texas, a nonprofit corporation whose purpose is to collect, maintain and distribute information relating to issuing entities of municipal securities. 14. Notice. Any notice or other communication to be given to the City under this Agreement may be given by delivering the same in writing to: City of Anna, Texas, 120 W. 7th Street, Anna, Texas 75409, Attention: City Manager. Any notice or other communication to be given to the Underwriter under this Agreement may be given by delivering the same in writing to: FMSbonds, Inc., 5 Cowboys Way, Suite 300- 25, Frisco, Texas 75034, Attention: Tripp Davenport, Director. 15. Survival of Representations and Warranties. All representations and warranties of the parties made in, pursuant to or in connection with this Agreement shall survive the execution and delivery of this Agreement, notwithstanding any investigation by the parties. All statements contained in any certificate, instrument, or other writing delivered by a party to this Agreement 25 4154-9297-3897.1 or in connection with the transactions described in or by this Agreement constitute representations and warranties by such party under this Agreement to the extent such statement is set forth as a representation and warranty in the instrument in question. 16. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. The City and the Underwriter agree that electronic signatures to this Agreement may be regarded as original signatures. 17. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof. 18. State Law Governs. The validity, interpretation, and performance of this Agreement shall be governed by the laws of the State. 19. No Assignment. The rights and obligations created by this Agreement shall not be subject to assignment by the Underwriter or the City without the prior written consent of the other party hereto. 20. No Personal Liability. None of the members of the City Council, nor any officer, representative, agent, or employee of the City, shall be charged personally by the Underwriter with any liability, or be held liable to the Underwriter under any term or provision of this Agreement, or because of execution or attempted execution, or because of any breach or attempted or alleged breach of this Agreement. 21. Anti-Boycott Verification. To the extent this Agreement constitutes a contract for goods or services for which a written verification is required pursuant to Section 2271.002, Texas Government Code, the Underwriter hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and will not boycott Israel during the term of this Agreement. The foregoing verification is made solely to enable the City to comply with Section 2271.002, Texas Government Code, and to the extent such Section does not contravene applicable State or federal law. As used in the foregoing verification, “boycott Israel” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes. The Underwriter understands “affiliate” to mean an entity that controls, is controlled by, or is under common control with the Underwriter and exists to make a profit. 22. Iran, Sudan and Foreign Terrorist Organizations. The Underwriter represents that neither it nor any of its parent company, wholly- or majority-owned subsidiaries, and other affiliates is a company identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on any of the following pages of such officer’s internet website: 26 4154-9297-3897.1 https://comptroller.texas.gov/purchasing/docs/sudan-list.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is made solely to enable the City to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable State or federal law and excludes the Underwriter and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. The Underwriter understands “affiliate” to mean any entity that controls, is controlled by, or is under common control with the Underwriter and exists to make a profit. 23. No Discrimination Against Fossil-Fuel Companies. To the extent this Agreement constitutes a contract for goods or services for which a written verification is required under Section 2274.002 (as added by Senate Bill 13 in the 87th Texas Legislature, Regular Session), Texas Government Code, as amended, the Underwriter hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott energy companies and will not boycott energy companies during the term of this Agreement. The foregoing verification is made solely to enable the City to comply with such Section and to the extent such Section does not contravene applicable Federal or Texas law. As used in the foregoing verification, “boycott energy companies,” a term defined in Section 2274.001(1), Texas Government Code (as enacted by such Senate Bill) by reference to Section 809.001, Texas Government Code (also as enacted by such Senate Bill), shall mean, without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company (A) engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable Federal or Texas law; or (B) does business with a company described by (A) above. 24. No Discrimination Against Firearm Entities and Firearm Trade Associations. To the extent this Agreement constitutes a contract for goods or services for which a written verification is required under Section 2274.002 (as added by Senate Bill 19 in the 87th Texas Legislature, Regular Session), Texas Government Code, as amended, the Underwriter hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of this Agreement. The foregoing verification is made solely to enable the City to comply with such Section and to the extent such Section does not contravene applicable Federal or Texas law. As used in the foregoing verification and the following definitions, a. “discriminate against a firearm entity or firearm trade association,” a term defined in Section 2274.001(3), Texas Government Code (as enacted by such Senate Bill), (A) means, with respect to the firearm entity or firearm trade association, to (i) 27 4154-9297-3897.1 refuse to engage in the trade of any goods or services with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association, (ii) refrain from continuing an existing business relationship with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association, or (iii) terminate an existing business relationship with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association and (B) does not include (i) the established policies of a merchant, retail seller, or platform that restrict or prohibit the listing or selling of ammunition, firearms, or firearm accessories and (ii) a company’s refusal to engage in the trade of any goods or services, decision to refrain from continuing an existing business relationship, or decision to terminate an existing business relationship (aa) to comply with federal, state, or local law, policy, or regulations or a directive by a regulatory agency or (bb) for any traditional business reason that is specific to the customer or potential customer and not based solely on an entity’s or association’s status as a firearm entity or firearm trade association, b. “firearm entity,” a term defined in Section 2274.001(6), Texas Government Code (as enacted by such Senate Bill), means a manufacturer, distributor, wholesaler, supplier, or retailer of firearms (defined in Section 2274.001(4), Texas Government Code, as enacted by such Senate Bill, as weapons that expel projectiles by the action of explosive or expanding gases), firearm accessories (defined in Section 2274.001(5), Texas Government Code, as enacted by such Senate Bill, as devices specifically designed or adapted to enable an individual to wear, carry, store, or mount a firearm on the individual or on a conveyance and items used in conjunction with or mounted on a firearm that are not essential to the basic function of the firearm, including detachable firearm magazines), or ammunition (defined in Section 2274.001(1), Texas Government Code, as enacted by such Senate Bill, as a loaded cartridge case, primer, bullet, or propellant powder with or without a projectile) or a sport shooting range (defined in Section 250.001, Texas Local Government Code, as a business establishment, private club, or association that operates an area for the discharge or other use of firearms for silhouette, skeet, trap, black powder, target, self-defense, or similar recreational shooting), and c. “firearm trade association,” a term defined in Section 2274.001(7), Texas Government Code (as enacted by such Senate Bill), means any person, corporation, unincorporated association, federation, business league, or business organization that (i) is not organized or operated for profit (and none of the net earnings of which inures to the benefit of any private shareholder or individual), (ii) has two or more firearm entities as members, and (iii) is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization described by Section 501(c) of that code. 25. Affiliate. As used in Sections 21 through 24, the Underwriter understands “affiliate” to mean an entity that controls, is controlled by, or is under common control with the Underwriter within the meaning of SEC Rule 405, 17 C.F.R. § 230.450, and exists to make a profit. 28 4154-9297-3897.1 26. Attorney General Standing Letter. The Underwriter represents that it has on file with the Texas Attorney General a standing letter addressing the representations and verifications in Sections 21 through 24 of this Agreement in a form acceptable to the Texas Attorney General. 27. Form 1295. Submitted herewith is a completed Form 1295 in connection with the Underwriter’s participation in the execution of this Agreement generated by the Texas Ethics Commission’s (the “TEC”) electronic filing application in accordance with the provisions of Section 2252.908 of the Texas Government Code and the rules promulgated by the TEC (the “Form 1295”). The City hereby confirms receipt of the Form 1295 from the Underwriter, and the City agrees to acknowledge such form with the TEC through its electronic filing application not later than the thirtieth (30th) day after the receipt of such form. The Underwriter and the City understand and agree that, with the exception of information identifying the City and the contract identification number, neither the City nor its consultants are responsible for the information contained in the Form 1295; that the information contained in the Form 1295 has been provided solely by the Underwriter; and, neither the City nor its consultants have verified such information. 28. Entire Agreement. This Agreement is made solely for the benefit of the City and the Underwriter (including their respective successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. All of the City’s representations, warranties, and agreements contained in this Agreement shall remain operative and in full force and effect regardless of: (i) any investigations made by or on behalf of the Underwriter, provided the City shall have no liability with respect to any matter of which the Underwriter has actual knowledge prior to the purchase of the Bonds; or (ii) delivery of any payment for the Bonds pursuant to this Agreement. The agreements contained in this Section and in Sections 13 and 15 shall survive any termination of this Agreement. Signature pages follow. S-1 4154-9297-3897.1 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first set forth above. FMSbonds, Inc., as Underwriter By: Name: Theodore A. Swinarski Title: Senior Vice President – Trading S-2 4154-9297-3897.1 Accepted at _____ a.m./p.m. central time on the date first stated above. City of Anna, Texas By: Mayor Schedule I-1 4154-9297-3897.1 SCHEDULE I $7,419,000 CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) Interest Accrues From: Date of Delivery $______ _____% Term Bonds, Due September 15, 20__, Priced to Yield _____ (b)(d) $______ _____% Term Bonds, Due September 15, 20__, Priced to Yield _____ (a)(b)(c)(d) (a) The Bonds maturing on September 15, 20__, may be redeemed before their scheduled maturity date, in whole or from time to time in part, on any date on or after September 15, 20__, such redemption date or dates to be fixed by the City, at the redemption price of 100% of the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest to the date of redemption. (b) The Bonds are also subject to extraordinary optional redemption as described in the Limited Offering Memorandum under “DESCRIPTION OF THE BONDS – Redemption Provisions.” (c) The yield shown is the yield to the first optional call date, September 15, 20__. (d) The Bonds are also subject to mandatory sinking fund redemption on the dates and in the respective Sinking Fund Installment Amounts as set forth in the following schedule. $______ Bonds Maturing September 15, 20__ Mandatory Sinking Fund Redemption Date Sinking Fund Installment Mandatory Sinking Fund Redemption Date Sinking Fund Installment September 15, 20__ September 15, 20__ September 15, 20__ September 15, 20__ September 15, 20__ September 15, 20__† September 15, 20__ † Stated Maturity A-1 4154-9297-3897.1 APPENDIX A FORM OF DEVELOPER LETTER OF REPRESENTATIONS $7,419,000 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) DEVELOPER LETTER OF REPRESENTATIONS September 12, 2023 City of Anna, Texas 120 W. 7th Street Anna, Texas 75409 FMSbonds, Inc. 5 Cowboys Way, Suite 300-25 Frisco, Texas 75034 Ladies and Gentlemen: This letter is being delivered to the City of Anna, Texas (the “City”), and FMSbonds, Inc. (the “Underwriter”), in consideration for your entering into the Bond Purchase Agreement dated the date hereof (the “Bond Purchase Agreement”) for the sale and purchase of the $7,419,000 “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)” (the “Bonds”). Pursuant to the Bond Purchase Agreement, the Underwriter has agreed to purchase from the City, and the City has agreed to sell to the Underwriter the Bonds. In order to induce the City to enter into the Bond Purchase Agreement and as consideration for the execution, delivery, and sale of the Bonds by the City and the purchase of them by the Underwriter, the undersigned, D.R. Horton – Texas, Ltd., a Texas limited partnership (the “Developer”), makes the representations, warranties, and covenants contained in this Developer Letter of Representations. Unless the context clearly indicates otherwise, each capitalized term used in this Developer Letter of Representations will have the meaning set forth in the Bond Purchase Agreement. 1. Purchase and Sale of Bonds. Inasmuch as the purchase and sale of the Bonds represents a negotiated transaction, the Developer understands, and hereby confirms, that the Underwriter is not acting as a fiduciary of the Developer, but rather is acting solely in its capacity as Underwriter of the Bonds for its own account. 2. Updating of the Limited Offering Memorandum. If, after the date of this Developer Letter of Representations, up to and including the date the Underwriter is no longer A-2 4154-9297-3897.1 required to provide a Limited Offering Memorandum to potential customers who request the same pursuant to Rule 15c2-12 (the earlier of (i) ninety (90) days from the “end of the underwriting period” (as defined in Rule 15c2-12) and (ii) the time when the Limited Offering Memorandum is available to any person from the MSRB, but in no case less than twenty-five (25) days after the “end of the underwriting period” for the Bonds), the Developer becomes aware of any fact or event which might or would cause the Limited Offering Memorandum, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Limited Offering Memorandum to comply with law, the Developer will notify the Underwriter promptly (and for the purposes of this clause provide the Underwriter with such information as it may from time to time request); however, that for the purposes of this Developer Letter of Representations and any certificate delivered by the Developer in accordance with the Bond Purchase Agreement, the Developer makes no representations with respect to the information appearing in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum except for the information set forth in all of the maps included therein and under the captions and subcaptions “PLAN OF FINANCE” (except for the subcaption “– The Bonds”), “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT” and “THE DEVELOPER” and, to the Developer’s knowledge after due inquiry, under the captions “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1 Projects, and the Development (as defined in the Limited Offering Memorandum)), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings,” “SOURCES OF INFORMATION – Source of Certain Information,” “APPENDIX E-2,” “APPENDIX F,” and “APPENDIX G” (collectively, the “Developer Disclosures”) in accordance with subsection 4(f) herein. 3. Developer Documents. The Developer has executed and delivered each of the below listed documents (individually, a “Developer Document” and collectively, the “Developer Documents”) in the capacity provided for in each such Developer Document, and each such Developer Document constitutes a valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms: a. this Developer Letter of Representations; b. the Improvement Area #1 Funding and Reimbursement Agreement The Woods at Lindsey Place Public Improvement District, effective as of March 14, 2023 (the “Reimbursement Agreement”), executed and delivered by the City and the Developer; c. the Development Agreement, effective as of November 10, 2020, executed and delivered by the City and the LHJH Properties, Ltd., as assigned to the Developer, and as amended by The Woods at Lindsey Place Subdivision Improvement Agreement, executed and delivered by the City and the Developer, effective January 12, 2021, and as further amended by the First Amendment to Development Agreement and to The Woods at Lindsey Place Subdivision and Improvement Agreement, executed and delivered by the City and the Developer, effective January 24, 2023 (collectively, the “Development Agreement”); and A-3 4154-9297-3897.1 d. the Landowner Consent Certificate executed by the Developer, as of , 2023 (the “Landowner Certificate”); and e. the Continuing Disclosure Agreement of Developer with respect to the Bonds, dated as of October 1, 2023 (the “Continuing Disclosure Agreement of Developer”), executed and delivered by the Developer, P3Works, LLC, as PID Administrator, and Regions Bank, as dissemination agent. The Developer has complied in all material respects with all of the Developer’s agreements and covenants and satisfied all conditions required to be complied with or satisfied by the Developer under the Developer Documents on or prior to the date hereof. The representations and warranties of the Developer contained in the Developer Documents are true and correct in all material respects on and as of the date hereof. 4. Developer Representations, Warranties and Covenants. The Developer represents, warrants, and covenants to the City and the Underwriter that: a. Due Organization and Existence. The Developer is duly formed and validly existing as a limited partnership under the laws of the State of Texas. b. Organizational Documents. The copies of the organizational documents of the Developer provided by the Developer (the “Developer Organizational Documents”) to the City and the Underwriter are fully executed, true, correct, and complete copies of such documents and such documents have not been amended or supplemented since delivery to the City and the Underwriter and are in full force and effect as of the date hereof. c. No Breach. The execution and delivery of the Developer Documents by Developer does not violate any judgment, order, writ, injunction or decree binding on Developer or any indenture, agreement, or other instrument to which the Developer is a party. d. No Litigation. Other than as described in the Preliminary Limited Offering Memorandum and in the Limited Offering Memorandum, there are no proceedings pending or threatened in writing before any court or administrative agency against the Developer that are either not covered by insurance or which singularly or collectively would have a material, adverse effect on the ability of the Developer to perform its obligations under the Developer Documents in all material respects or that would reasonably be expected to prevent or prohibit the development of the District in accordance with the description thereof in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum. e. Information. The information prepared and submitted by the Developer to the City or the Underwriter in connection with the preparation of the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum was, and is, as of this date, true and correct in all material respects. A-4 4154-9297-3897.1 f. Preliminary Limited Offering Memorandum and Limited Offering Memorandum. The Developer represents and warrants that the information set forth in the Developer Disclosures in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Developer agrees to provide a certificate dated the Closing Date affirming, as of such date, the representations contained in this subsection (f) with respect to the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum. g. Events of Default. No “Event of Default” or “event of default” by the Developer under any of the Developer Documents, any documents to which the Developer is a party described in the Limited Offering Memorandum, or under any material documents relating to the financing and construction of the Improvement Area #1 Projects to which the Developer is a party, or event that, with the passage of time or the giving of notice or both, would constitute such “Event of Default” or “event of default” by the Developer, has occurred and is continuing. 5. Indemnification. a. The Developer will indemnify and hold harmless the City and the Underwriter and each of their officers, directors, employees and agents against any losses, claims, damages or liabilities to which any of them may become subject, under the Securities Act of 1933 or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in the Developer Disclosures in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, or any amendment or supplement to the Limited Offering Memorandum amending or supplementing the information contained under the aforementioned captions (as qualified above), or arise out of or are based upon the omission, untrue statement or alleged untrue statement or omission to state therein a material fact necessary to make the statements under the aforementioned captions (as qualified above) not misleading under the circumstances under which they were made and will reimburse any indemnified party for any reasonable legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred. b. Promptly after receipt by an indemnified party under subsection (a) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to the indemnified party otherwise than under such subsection, unless such indemnifying party was prejudiced by such delay or lack of notice. In case any such action shall be brought against an indemnified party, it shall promptly notify the indemnifying party of the commencement thereof, the indemnifying party shall be A-5 4154-9297-3897.1 entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. The indemnifying party shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the indemnifying party or if there is a final judgment for the plaintiff in any such action, the indemnifying party will indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. The indemnity herein shall survive delivery of the Bonds and shall survive any investigation made by or on behalf of the City, the Developer or the Underwriter. 6. Survival of Representations, Warranties and Covenants. All representations, warranties, and agreements in this Developer Letter of Representations will survive regardless of (a) any investigation or any statement in respect thereof made by or on behalf of the Underwriter, (b) delivery of any payment by the Underwriter for the Bonds hereunder, and (c) any termination of the Bond Purchase Agreement. 7. Binding on Successors and Assigns. This Developer Letter of Representations will be binding upon the Developer and its successors and assigns and inure solely to the benefit of the Underwriter and the City, and no other person or firm or entity will acquire or have any right under or by virtue of this Developer Letter of Representations. 8. Verifications. To the extent any of its contracts with the City is a contract for goods or services submitted with the record of public security proceedings, the undersigned company, for purposes of sections 2252.152, 2271.002, and 2274.002, Texas Government Code, as amended, hereby verifies that the company and any parent company, wholly owned subsidiary, majority-owned subsidiary, and affiliate: a. Do not boycott energy companies and are authorized to agree in such contracts not to boycott energy companies during the term of such contracts. “Boycott energy company” has the meaning provided in section 809.001 of the Texas Government Code. b. Do not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and are authorized to agree in such contracts not to discriminate against a firearm entity or firearm trade association during the term of such contracts. “Discriminate against a firearm entity or firearm trade association” has the meaning provided in section 2274.001(3) of the Texas Government Code. “Firearm entity” and “firearm trade association” have the meanings provided in section 2274.001(6) and (7) of the Texas Government Code. A-6 4154-9297-3897.1 c. Do not boycott Israel and are authorized to agree in such contracts not to boycott Israel during the term of such contracts. “Boycott Israel” has the meaning provided in section 808.001 of the Texas Government Code. d. Unless affirmatively declared by the United States government to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization, are not identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under section 2252.153 or section 2270.0201 of the Texas Government Code. Signature page follows. A-7 4154-9297-3897.1 D.R. Horton – Texas, Ltd. a Texas limited partnership By: D.R. Horton, Inc. a Delaware corporation Its Authorized Agent By: ___________________________ David L. Booth, Assistant Vice President B-1 4154-9297-3897.1 APPENDIX B ISSUE PRICE CERTIFICATE $7,419,000 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) I, the undersigned officer of FMSbonds, Inc., (“Purchaser”), make this certification in connection with the $7,419,000 City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) (the “Bonds”). Each capitalized term used but not defined herein has the meaning or is the amount, as the case may be, specified for such term in the Federal Tax Certificate prepared in connection with the Bonds (the “Federal Tax Certificate”). 1. I hereby certify as follows in good faith as of the Issue Date of the Bonds: (a) I am the duly chosen, qualified and acting officer of Purchaser for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of Purchaser. I am the officer of Purchaser charged, along with other officers of Purchaser, with responsibility for the Bonds. (b) [IF 10% OF MATURITY SOLD] For the Bonds maturing in [October 3__], the first price at which at least 10% of each maturity was sold to the Public is the price for each such maturity set forth in the final Limited Offering Memorandum prepared in connection with the Bonds (each, an “Actual Sales Price”). (c) [IF FEWER THAN 10% OF MATURITY SOLD ON SALE DATE] For the Bonds maturing in [____________] (each, a “Held Maturity”), Purchaser on or before the Sale Date offered for purchase each such maturity to the Public at the applicable initial offering price set forth in the final Limited Offering Memorandum prepared in connection with the Bonds (each, an “Initial Offering Price”). A copy of the pricing wire evidencing the Initial Offering Prices is attached hereto as Attachment I. In connection with the offering of the Bonds, Purchaser agreed in writing that (i) during the Hold Period, it would neither offer nor sell any Held Maturity to any person at a price higher than the applicable Initial Offering Price (the “Hold-the-Offering-Price Rule”) and (ii) any selling group agreement would contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement would contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, that, during the Hold Period, such party would comply with the Hold-the- Offering-Price Rule. In accordance with such agreements, no Underwriter offered or sold any of the Held Maturities at a price higher than the applicable Initial Offering Price for such Held Maturity during the Hold Period. B-2 4154-9297-3897.1 (d) The aggregate of the Actual Sales Prices and the Initial Offering Prices is $[___________]. [The Bonds were sold with pre-issuance accrued interest in the amount of $[__________]. The sum of these two amounts is $_____________.]] 2. For purposes of this Issue Price Certificate, the following definitions apply: (a) [“Hold Period” means, with respect to a Held Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date or (ii) the date on which the Underwriters have sold at least 10% of such Held Maturity to the Public at a price no higher than the applicable Initial Offering Price.] (b) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to an Underwriter. (c) “Related Party” means any two or more persons who are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interest or profits interest of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (d) [“Sale Date” means the first day on which there is a binding contract in writing for the sale or exchange of the Bonds. The Sale Date of the Bonds is [___________], 20[___].] (e) “Underwriter” means (i) any person that agrees pursuant to a written contract with the City to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this definition to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser’s interpretation of any laws, including specifically sections 103 and 148 of the Internal Revenue Code. The undersigned understands that the foregoing information will be relied upon by the City with respect to certain of the representations set forth in the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bracewell LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the City from time to time relating to the Bonds. [EXECUTION PAGE FOLLOWS] B-3 4154-9297-3897.1 EXECUTED as of this _______ day of _____________, 2023. FMSBONDS, INC., as Underwriter By: ________________________ Name: Theodore A. Swinarski Title: Senior Vice President – Trading B-4 4154-9297-3897.1 ATTACHMENT I TO ISSUE PRICE CERTIFICATE FINAL PRICING WIRE [See Attached] C-1 4154-9297-3897.1 APPENDIX C [LETTERHEAD OF WOLFE, TIDWELL & MCCOY LLP] October 10, 2023 FMSbonds, Inc. 5 Cowboys Way, Suite 300-25 Frisco, Texas 75034 City of Anna, Texas 120 W. 7th Street Anna, Texas 75409 Regions Bank 3773 Richmond Ave., Suite 1100 Houston, Texas 77046 $7,419,000 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) Ladies and Gentlemen: The undersigned serves as the City Attorney for the City of Anna, Texas (the “City”), and has, in that capacity, provided legal review in connection with the issuance and sale of $7,419,000 “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)” (the “Bonds”), by the City, a political subdivision of the State of Texas. The Bonds are authorized pursuant to an ordinance enacted by the City Council of the City (the “City Council”) on September 12, 2023 (the “Bond Ordinance”) and shall be issued pursuant to the provisions of the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “Act”), and the Indenture of Trust, dated as of September 15, 2023 (the “Indenture”), by and between the City and Regions Bank, as trustee (the “Trustee”). Capitalized terms not defined herein shall have the same meanings as in the Indenture, unless otherwise stated herein. In connection with rendering this opinion, we have reviewed: (a) The Resolution No. 2023-03-1378 (the “Creation Resolution”) enacted by the City Council on February 14, 2023; (b) The Ordinance No. 2023-__ accepted and approved by City Council on September 12, 2023 (the “Assessment Ordinance”), and the amended and restated service and assessment plan (the “Service and Assessment Plan”) attached as an exhibit thereto, as such Service and Assessment Plan was updated by the Bond Ordinance; (c) The Bond Ordinance; (d) The Indenture; C-2 4154-9297-3897.1 (e) the Improvement Area #1 Funding and Reimbursement Agreement The Woods at Lindsey Place Public Improvement District, effective as of March 14, 2023 (the “Reimbursement Agreement”), executed and delivered by the City and D.R. Horton – Texas, Ltd., a Texas limited partnership (the “Developer”); (f) the Development Agreement, effective as of November 10, 2020, executed and delivered by the City and the LHJH Properties, Ltd., as assigned to the Developer, and as amended by The Woods at Lindsey Place Subdivision Improvement Agreement, executed and delivered by the City and the Developer, effective January 12, 2021, and as further amended by the First Amendment to Development Agreement and to The Woods at Lindsey Place Subdivision and Improvement Agreement, executed and delivered by the City and the Developer, effective January 24, 2023 (collectively, the “Development Agreement”); and (g) the Continuing Disclosure Agreement of Issuer with respect to the Bonds, dated as of October 1, 2023 (the “Continuing Disclosure Agreement of Issuer”), executed and delivered by the City, P3Works, LLC, as PID Administrator, and Regions Bank, as Dissemination Agent. The Creation Resolution, the Assessment Ordinance, and Bond Ordinance shall hereinafter be referred to as the “Authorizing Documents” and the remaining documents shall hereinafter be collectively referred to as the “City Documents.” In all such examinations, we have assumed that all signatures on documents and instruments executed by the City are genuine and that all documents submitted to me as copies conform to the originals. In addition, for purposes of this opinion, we have assumed the due authorization, execution, and delivery of the City Documents by all parties other than the City. Based upon and subject to the foregoing and the additional qualifications and assumptions set forth herein, we are of the opinion that: 1. The City is a home rule municipal corporation of the State of Texas and has all necessary power and authority to enter into and perform its obligations under the Authorizing Documents and the City Documents. The City has taken or obtained all actions, approvals, consents, and authorizations required of it by applicable laws in connection with the execution of the Authorizing Documents and the City Documents and the performance of its obligations thereunder. 2. To the best of our knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, pending, or threatened against the City: (a) affecting the existence of the City or the titles of its officers to their respective offices; (b) in any way questioning the formation or existence of The Woods at Lindsey Place Public Improvement District (the “District”); (c) affecting, contesting or seeking to prohibit, restrain or enjoin the delivery of any of the Bonds, or the payment, collection or application of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, including the Assessments in the District pursuant to the provisions of the Assessment Ordinance and the Service and Assessment Plan referenced therein; (d) contesting or affecting the validity or enforceability or the City’s performance of the City Documents; (e) contesting the exclusion of the interest on the Bonds from federal income taxation; or (f) which may result in any material adverse change relating to the financial condition of the City. C-3 4154-9297-3897.1 3. The Authorizing Documents were duly enacted by the City and remain in full force and effect on the date hereof. 4. The City Documents have been duly authorized, executed and delivered by the City and remain legal, valid, and binding obligations of the City enforceable against the City in accordance with their terms. However, the enforceability of the obligations of the City under such City Documents may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally, (b) principles of equity, whether considered at law or in equity, and (c) the application of Texas law relating to action by future councils and relating to governmental immunity applicable to governmental entities. 5. The performance by the City of the obligations under the Authorizing Documents and the City Documents will not violate any provision of any Federal or Texas constitutional or statutory provision. 6. No further consent, approval, authorization, or order of any court or governmental agency or body or official is required to be obtained by the City as a condition precedent to the performance by the City of its obligations under the Authorizing Documents and the City Documents. 7. The City has duly authorized and delivered the Preliminary Limited Offering Memorandum. 8. Based upon our limited participation in the preparation of the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum (collectively, the “Limited Offering Memorandum”), the statements and information contained in the Limited Offering Memorandum with respect to the City under the captions and subcaptions “ASSESSMENT PROCEDURES – Assessment Methodology” and “– Assessment Amounts,” “THE CITY,” “THE DISTRICT,” “LEGAL MATTERS – Litigation – The City” and “APPENDIX A” are fair and accurate summaries of the law and the documents and facts summarized therein. 9. The adoption of the Authorizing Documents, the execution and delivery of the City Documents and the compliance with the provisions of the Authorizing Documents and the City Documents under the circumstances contemplated thereby, to the best of our knowledge: (a) do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement to which the City is a party or by which it is bound, and (b) do not and will not in any material respect conflict with or constitute on the part of the City a violation, breach of or default under any existing law, regulation, court order or consent decree to which the City is subject. This opinion may not be relied upon by any other person except those specifically addressed in this letter. D-1 4154-9297-3897.1 APPENDIX D C OATS R OSE A PROFESSIONAL CORPORATION October 10, 2023 City of Anna, Texas 401 Market Street Anna, Texas 77375 FMSbonds, Inc. 5 Cowboys Way, Suite 300-25 Frisco, Texas 75034 McCall, Parkhurst & Horton L.L.P. 717 North Harwood, Suite 900 Dallas, Texas 75201 Regions Bank 3773 Richmond Ave., Suite 1100 Houston, Texas 77046 $7,419,000 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) Ladies and Gentlemen: In our capacity as counsel to D.R. Horton – Texas, Ltd., a Texas limited partnership (the “Developer”), and for purposes of rendering the opinions set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (a) The following documents (collectively, the “Material Documents”): (1) The Developer Letter of Representations executed by the Developer dated September 12, 2023; (2) the Improvement Area #1 Funding and Reimbursement Agreement The Woods at Lindsey Place Public Improvement District, effective as of March 14, 2023 (the “Reimbursement Agreement”), executed and delivered by the City and the Developer; (3) the Development Agreement, effective as of November 10, 2020, executed and delivered by the City and the LHJH Properties, Ltd., as assigned to the Developer, and as amended by The Woods at Lindsey Place Subdivision Improvement Agreement, executed and delivered by the City and the Developer, effective January 12, 2021, and as further amended by the First D-2 4154-9297-3897.1 Amendment to Development Agreement and to The Woods at Lindsey Place Subdivision and Improvement Agreement, executed and delivered by the City and the Developer, effective January 24, 2023 (collectively, the “Development Agreement”) (4) Landowner Consent Certificate dated , 2023; (5) The Continuing Disclosure Agreement of Developer with respect to the Bonds, dated as of October 1, 2023 (the “Continuing Disclosure Agreement of Developer”), executed and delivered by the Developer, P3Works, LLC, as PID Administrator, and Regions Bank, as Dissemination Agent. (6) The Preliminary Limited Offering Memorandum, dated August 29, 2023, relating to the issuance of the Bonds (the “Preliminary Limited Offering Memorandum”); (7) The final Limited Offering Memorandum, dated September 12, 2023, relating to the issuance of the Bonds (together with the Preliminary Limited Offering Memorandum, the “Limited Offering Memorandum”); and (8) the General Certificate of the Developer and the Developer Closing Certificate, each dated as of the date hereof (together, the “Developer Certificate”). Opinions and Assurances Based solely upon the foregoing, and subject to the assumptions and limitations set forth herein, we are of the opinion that: 1. The Developer is qualified to transact business as limited partnership in the State of Texas. 2. The Developer has the power and authority to execute and deliver the Material Documents to which it is a party and to perform its obligations thereunder. 3. The execution and delivery by the Developer of the Material Documents to which it is a party, and the performance by the Developer of its obligations under such Material Documents, have been duly authorized by all necessary limited liability company action of the Developer. 4. The execution and delivery by the Developer of the Material Documents to which it is a party and the performance of the obligations of the Developer thereunder do not (i) violate any of the terms, conditions, or provisions of the Developer Organizational Documents; (ii) violate any applicable law; or (iii) conflict with or result in the breach of D-3 4154-9297-3897.1 any court decree or order of any governmental body identified in the Developer Certificate or otherwise actually known to the lawyers who have provided substantive attention to the representation reflected in this opinion binding upon or affecting the Developer, the conflict with which or breach of which would have a material, adverse effect on the ability of the Developer to perform its respective obligations under the Material Documents to which it is a party. 5. No governmental approval which has not been obtained or taken is required to be obtained or taken by the Developer on or before the date hereof as a condition to the performance by the Developer of its respective obligations under the Material Documents to which it is a party, except for governmental approvals that may be required to comply with certain covenants contained in the Material Documents (including, without limitation, covenants to comply with applicable laws). 6. There are no actions, suits or proceedings pending or, to our knowledge, threatened against the Developer identified in the Developer Certificate, or otherwise actually known to the lawyers who have provided substantive attention to the representation reflected in this opinion in any court of law or equity, or before or by any governmental instrumentality with respect to: (i) its organization or existence or qualification to do business in the State of Texas; (ii) its authority to execute or deliver the Material Documents to which it is a party; (iii) the titles of the parties executing the Material Documents; (iv) the execution, delivery, validity or enforceability of the Material Documents on behalf of the Developer; (v) the operations or financial condition of the Developer that would materially adversely affect those operations or the financial condition of the Developer; or (vi) the acquisition and construction of the property and improvements identified in the Limited Offering Memorandum the cost of which is to be funded or reimbursed, in whole or in part, by proceeds of the Bonds; or with respect to the validity or enforceability against it of such Material Documents or the transactions described therein. 7. The Developer has duly executed and delivered each of the Material Documents to which it is a party, and each of the Material Documents constitute the legal, valid, and binding obligations of the Developer, enforceable against the Developer in accordance with their respective terms, subject to the following qualifications: (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally, and (ii) the effect of the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity), and (iii) the effect that enforceability of the indemnification provisions therein may be limited, in whole or in part. The execution, delivery, and performance by the Developer of its respective obligations under the Material Documents do not violate any existing laws of the State of Texas applicable to the Developer. 8. The execution and delivery of the Material Documents do not, and the transactions described therein may be consummated and the terms and conditions thereof may be observed and performed in a manner that does not, conflict with or constitute a breach of or default under any loan agreement, indenture, bond note, resolution, agreement or other D-4 4154-9297-3897.1 instrument to which the Developer is a party or is otherwise subject and which have been identified in the Developer Certificate, which violation, breach or default would materially adversely affect the Developer or its performance of its respective obligations under the transactions described in the Material Documents; nor will any such execution, delivery, adoption, fulfillment, or compliance result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Developer, except as expressly described in the Material Documents (a) under applicable law or (b) under any such loan agreement, indenture, bond note, resolution, agreement, or other instrument. 9. The information set forth in the Limited Offering Memorandum in the maps on pages (ii), (iii), and (iv) and under the captions “PLAN OF FINANCE” (except for the subcaption “– The Bonds”), “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT,” “THE DEVELOPER,” “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1 Projects, and the Development (as defined in the Limited Offering Memorandum)),” “LEGAL MATTERS – Litigation – The Developer,” and “CONTINUING DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings” adequately and fairly describes the information summarized on such pages and under such captions and are correct as to matters of law. Subject to the below qualifications and based upon our participation in the preparation of the Limited Offering Memorandum and our participation at conferences with representatives of the Underwriter and its counsel, of the City and its counsel, and with representatives of the Developer at which the Limited Offering Memorandum and related matters were discussed, and although we have not independently verified the information in the Limited Offering Memorandum and are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Limited Offering Memorandum and any amendment or supplement thereto, no facts have come to our attention that lead us to believe that the information set forth under the captions referenced in the preceding paragraph as of the date of the Limited Offering Memorandum and the date hereof, contained or contains any untrue statement of a material fact, or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. E-1 4154-9297-3897.1 EXHIBIT E CLOSING CERTIFICATE OF DEVELOPER D.R. Horton – Texas, Ltd., a Texas limited partnership (the “Developer”), DOES HEREBY CERTIFY the following as of the date hereof. All capitalized terms not otherwise defined herein shall have the meaning given to such term in the Limited Offering Memorandum. 1. The Developer is a limited partnership organized, validly existing and in good standing under the laws of the State of Texas. 2. Representatives of the Developer have provided information to the City of Anna, Texas (the “City”) and FMSbonds, Inc. (the “Underwriter”) to be used in connection with the offering by the City of its $7,419,000 aggregate principal amount of Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) (the “Bonds”), pursuant to the Preliminary Limited Offering Memorandum, dated August 29, 2023 (the “Preliminary Limited Offering Memorandum”), and Limited Offering Memorandum dated September 12, 2023 (the “Limited Offering Memorandum”). 3. The Developer has delivered to the Underwriter and the City true, correct, complete and fully executed copies of the Developer’s organizational documents, and such documents have not been amended or supplemented since delivery to the Underwriter and the City and are in full force and effect as of the date hereof. 4. The Developer has delivered to the Underwriter and the City a (i) Certificate of Status from the Texas Secretary of State and (ii) verification of franchise tax account status from the Texas Comptroller of Public Accounts for the Developer. 5. The Developer has executed and delivered each of the below listed documents (individually, a “Developer Document” and collectively, the “Developer Documents”) in the capacity provided for in each such Developer Document, and each such Developer Document constitutes a valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms: (a) the Developer Letter of Representations dated September 12, 2023; (b) the Improvement Area #1 Funding and Reimbursement Agreement The Woods at Lindsey Place Public Improvement District, effective as of March 14, 2023 (the “Reimbursement Agreement”), executed and delivered by the City and the Developer; (c) the Development Agreement, effective as of November 10, 2020, executed and delivered by the City and the LHJH Properties, Ltd., as assigned to the Developer, and as amended by The Woods at Lindsey Place Subdivision Improvement Agreement, executed and delivered by the City and the Developer, effective January 12, 2021, and as further amended by the First Amendment to Development Agreement and to The Woods at Lindsey Place Subdivision and Improvement Agreement, executed and delivered by E-2 4154-9297-3897.1 the City and the Developer, effective January 24, 2023 (collectively, the “Development Agreement”) (d) the Landowner Consent Certificate executed by the Developer on , 2023 (the “Landowner Certificate”); and (e) the Continuing Disclosure Agreement of Developer with respect to the Bonds, dated as of October 1, 2023 (the “Continuing Disclosure Agreement of Developer”), executed and delivered by the Developer, P3Works, LLC, as PID Administrator, and Regions Bank, as dissemination agent. 6. The Developer or other development entities affiliated with the Developer owned all of the Improvement Area #1 Assessed Property (as defined in the Service and Assessment Plan) located in Improvement Area #1 of the District on the date that the Assessment Ordinance was adopted and such landowners are not entities that may claim a homestead right under Texas law. 7. The Developer has complied in all material respects with all of the Developer’s agreements and covenants and satisfied all conditions required to be complied with or satisfied by the Developer under the Developer Documents on or prior to the date hereof. 8. The representations and warranties of the Developer contained in the Developer Documents are true and correct in all material respects on and as of the date hereof. 9. The execution and delivery of the Developer Documents by the Developer does not violate any judgment, order, writ, injunction or decree binding on the Developer or any indenture, agreement, or other instrument to which the Developer is a party. There are no proceedings pending or threatened in writing before any court or administrative agency against the Developer that is either not covered by insurance or which singularly or collectively would have a material, adverse effect on the ability of the Developer to perform its obligations under the Developer Documents in all material respects or that would reasonably be expected to prevent or prohibit the development of the District in accordance with the description thereof in the Limited Offering Memorandum. 10. The Developer has reviewed and approved the information contained in the Preliminary Limited Offering Memorandum in all of the maps included therein and under the captions and subcaptions “PLAN OF FINANCE” (except for the subcaption “– The Bonds”), “THE IMPROVEMENT AREA #1 PROJECTS,” “THE DEVELOPMENT” and “THE DEVELOPER” and, to the Developer’s knowledge after due inquiry, under the captions “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Improvement Area #1 Projects, and the Development (as defined in the Limited Offering Memorandum)), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer” and “– The Developer’s Compliance with Prior Undertakings,” “SOURCES OF INFORMATION – Source of Certain Information,” “APPENDIX E-2,” “APPENDIX F,” and “APPENDIX G” (collectively, the “Developer Disclosures”) and certifies that the same does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are E-3 4154-9297-3897.1 made, not misleading, as of the date of the Preliminary Limited Offering Memorandum and as of the date of the Limited Offering Memorandum; provided, however, that the foregoing certification is not a certification as to the accuracy, completeness or fairness of any of the other statements contained in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum. 11. The Developer has reviewed and approved the information contained in the Developer Disclosures in the Limited Offering Memorandum and certifies that the same does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading, as of the date of the Limited Offering Memorandum and as of the date hereof; provided, however, that the foregoing certification is not a certification as to the accuracy, completeness or fairness of any of the other statements contained in the Limited Offering Memorandum. 12. To the Developer’s knowledge, the Developer is in compliance in all material respects with all provisions of applicable law relating to the Developer in connection with the Development. Except as otherwise described in the Limited Offering Memorandum: (a) to the Developer’s knowledge, there is no default of any zoning condition, land use permit or development agreement binding upon the Developer or any portion of the Development that would materially and adversely affect the Developer’s ability to complete or cause to be completed the development of the property within Improvement Area #1 of the District as described in the Limited Offering Memorandum; and (b) the Developer has no reason to believe that any additional permits, consents and licenses required to complete the development of the property within Improvement Area #1 of the District as and in the manner described in the Limited Offering Memorandum will not be reasonably obtainable in due course. 13. The Developer is not insolvent and has not made an assignment for the benefit of creditors, filed, or consented to a petition in bankruptcy, petitioned or applied (or consented to any third-party petition or application) to any tribunal for the appointment of a custodian, receiver or any trustee or commenced any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction. 14. The levy of the Assessments on property in Improvement Area #1 of the District owned by the Developer will not conflict with or constitute a breach of or default under any agreement, mortgage, deed of trust, indenture, or other instrument to which the Developer is a party or to which the Developer or any of its property or assets is subject. 15. The Developer is not in default under any mortgage, trust indenture, lease or other instrument to which it or any of its assets is subject, which default would have a material and adverse effect on the Bonds or the Developer’s ability to perform its obligations under the Developer Documents. 16. The Developer has no knowledge of any physical condition of the Development owned or to be developed by the Developer that currently requires, or currently is reasonably expected to require in the process of development investigation or remediation under any E-4 4154-9297-3897.1 applicable federal, state, or local governmental laws or regulations relating to the environment in any material and adverse respect. Signature page follows. E-5 4154-9297-3897.1 D.R. Horton – Texas, Ltd. a Texas limited partnership By: D.R. Horton, Inc. a Delaware corporation Its Authorized Agent By: ___________________________ David L. Booth, Assistant Vice President F-1 4154-9297-3897.1 APPENDIX F [LETTERHEAD OF P3WORKS, LLC] [___________], 2023 City of Anna, Texas 401 Market Street Anna, Texas 77375 FMSbonds, Inc. 5 Cowboys Way, Suite 300-25 Frisco, Texas 75034 McCall, Parkhurst & Horton L.L.P. 717 North Harwood, Suite 900 Dallas, Texas 75201 Regions Bank 3773 Richmond Ave., Suite 1100 Houston, Texas 77046 Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) (the “Bonds”) Ladies and Gentlemen: The undersigned, ____________, representative of P3Works, LLC (“P3Works”), consultant in connection with the creation by the City of Anna, Texas (the “City”), of The Woods at Lindsey Place Public Improvement District (the “District”), does hereby represent the following: 1. P3Works has supplied certain information contained in the Preliminary Limited Offering Memorandum for the Bonds, dated August 29, 2023, and the final Limited Offering Memorandum for the Bonds, dated September 12, 2023 (together, the “Limited Offering Memorandum”), relating to the issuance of the Bonds by the City, as described above. The information P3Works provided for the Limited Offering Memorandum is located (a) under the captions “ASSESSMENT PROCEDURES” and “THE ADMINISTRATOR” and (b) in the Service and Assessment Plan (the “SAP”) for the City located in APPENDIX C to the Limited Offering Memorandum. 2. At the request of the City, P3Works has prepared the SAP and acknowledges and agrees that the SAP will be included in the Limited Offering Memorandum for the Bonds. 3. To the best of my professional knowledge and belief, the portions of the Limited Offering Memorandum described in paragraph 1 above do not contain an untrue statement of a material fact as to the information and data set forth therein, and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 4. P3Works agrees to the inclusion of the SAP in the Limited Offering Memorandum and use of its name in the Limited Offering Memorandum for the Bonds. F-2 4154-9297-3897.1 5. P3Works agrees that, to the best of its ability, it will inform you immediately should it learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or about October 10, 2023) which would render any such information in the Limited Offering Memorandum untrue, incomplete, or incorrect, in a material fact or render any such information materially misleading. 6. The undersigned hereby represents that he or she has been duly authorized to execute this letter of representation. Sincerely yours, P3Works, LLC By: Its: G-1 4154-9297-3897.1 APPENDIX G [LETTERHEAD OF PEYCO SOUTHWEST REALTY, INC.] [___________], 2023 City of Anna, Texas 120 W. 7th Street Tomball, Texas 75409 FMSbonds, Inc. 5 Cowboys Way, Suite 300-25 Frisco, Texas 75034 McCall, Parkhurst & Horton L.L.P. 717 North Harwood, Suite 900 Dallas, Texas 75201 Regions Bank 3773 Richmond Ave., Suite 1100 Houston, Texas 77046 Re: City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) (the “Bonds”) Ladies and Gentlemen: The undersigned, ____________, representative of Peyco Southwest Realty, Inc. (the “Appraiser”), the appraiser of the undeveloped property contained in Improvement Area #1 of The Woods at Lindsey Place Public Improvement District (the “District”), does hereby represent the following: 1. The Appraiser has supplied certain information contained in the Preliminary Limited Offering Memorandum for the Bonds, dated August 29, 2023, and the Limited Offering Memorandum for the Bonds, dated September 12, 2023 (together, the “Limited Offering Memorandum”), relating to the issuance of the Bonds by the City of Anna, Texas, as described above. The information provided by the Appraiser for the Limited Offering Memorandum is the real estate appraisal of Improvement Area #1 of the District (the “Appraisal”), located in APPENDIX H to the Limited Offering Memorandum, and the description thereof, set forth under the caption “APPRAISAL.” 2. To the best of my professional knowledge and belief, as of the date of the Appraisal, the portion of the Limited Offering Memorandum described above does not contain an untrue statement of a material fact as to the information and data set forth therein, and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 3. The Appraiser agrees to the inclusion of the Appraisal in the Limited Offering Memorandum and the use of its name in the Limited Offering Memorandum for the Bonds. 4. The Appraiser agrees that, to the best of its ability, it will inform you immediately should it learn of any event(s) or information of which you are not aware subsequent to the date of this letter and prior to the actual time of delivery of the Bonds (anticipated to occur on or G-2 4154-9297-3897.1 about October 10, 2023) which would render any such information in the Limited Offering Memorandum untrue, incomplete, or incorrect, in a material fact or render any statement in the appraisal materially misleading. 5. The undersigned hereby represents that he or she has been duly authorized to execute this letter of representations. Sincerely yours, Peyco Southwest Realty, Inc. By: Its: C-1 EXHIBIT C CONTINUING DISCLOSURE AGREEMENT Draft 08.08.2023 4131-0566-6633.1 CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) CONTINUING DISCLOSURE AGREEMENT OF ISSUER This Continuing Disclosure Agreement of Issuer, dated as of October 1, 2023 (this “Disclosure Agreement”), is executed and delivered by and among the City of Anna, Texas (the “Issuer”), P3Works, LLC (the “Administrator”), and Regions Bank, acting solely in its capacity as dissemination agent (the “Dissemination Agent”), with respect to the Issuer’s “Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project)” (the “Bonds”). The Issuer, the Administrator, and the Dissemination Agent covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer, the Administrator, and the Dissemination Agent for the benefit of the Owners (defined below) and beneficial owners of the Bonds. Unless and until a different filing location is designated by the MSRB (defined below) or the SEC (defined below), all filings made by the Dissemination Agent pursuant to this Disclosure Agreement shall be filed with the MSRB through EMMA (defined below). SECTION 2. Definitions. In addition to the definitions set forth above and in the Indenture of Trust dated as of September 15, 2023, relating to the Bonds (the “Indenture”), which apply to any capitalized term used in this Disclosure Agreement, including the Exhibits hereto, the following capitalized terms shall have the following meanings: “Administrator” shall have the meaning assigned to such term in the Indenture. The initial Administrator is P3Works, LLC. “Annual Collection Costs” shall have the meaning assigned to such term in the Indenture. “Annual Collections Report” shall mean any Annual Collections Report provided by the Issuer pursuant to, and as described in, Section 5 of this Disclosure Agreement. “Annual Collections Report Filing Date” shall mean, for each Fiscal Year succeeding the reporting Fiscal Year, the date that is three (3) months after the Final Assessment Payment Date, which Annual Collections Report Filing Date is currently April 30. “Annual Financial Information” shall mean annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in subsection 4(a) of this Disclosure Agreement. “Annual Installment” shall have the meaning assigned to such term in the Indenture. “Annual Issuer Report” shall mean any Annual Issuer Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. 2 4131-0566-6633.1 “Annual Issuer Report Filing Date” shall mean, for each Fiscal Year, the date that is six (6) months after the end of the Issuer’s Fiscal Year, which Annual Issuer Report Filing Date is currently March 31. “Annual Service Plan Update” shall have the meaning assigned to such term in the Indenture. “Assessments” shall have the meaning assigned to such term in the Indenture. “Business Day” shall have the meaning assigned to such term in the Indenture. “Collections Reporting Date” shall mean, for each Tax Year, the date that is one (1) month after the Delinquency Date, which Collections Reporting Date is currently March 1. “Delinquency Date” shall mean February 1 of the year following the year in which the Assessments were billed or as may be otherwise defined in Section 31.02 of the Texas Tax Code, as amended. “Developer” shall mean D.R. Horton – Texas, Ltd., a Texas limited partnership. “Disclosure Agreement of Developer” shall mean the Continuing Disclosure Agreement of Developer related to the Bonds, dated as of October 1, 2023, executed and delivered by the Developer, the Administrator, and the Dissemination Agent. “Disclosure Representative” shall mean the Finance Director or City Manager of the Issuer or his or her designee or such other officer or employee as the Issuer may designate in writing to the Dissemination Agent from time to time. “Dissemination Agent” shall mean Regions Bank, acting solely in its capacity as dissemination agent, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Trustee a written acceptance of such designation. “District” shall mean The Woods at Lindsey Place Public Improvement District. “EMMA” shall mean the Electronic Municipal Market Access System currently available on the internet at http://emma.msrb.org. “Final Assessment Payment Date” shall mean the calendar day preceding the Delinquency Date. “Financial Obligation” shall mean a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that “financial obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. “Fiscal Year” shall mean the Issuer’s fiscal year, currently the twelve-month period from October 1 through September 30. 3 4131-0566-6633.1 “Improvement Area #1” shall have the meaning assigned to such term in the Indenture. “Listed Events” shall mean any of the events listed in subsection 6(a) of this Disclosure Agreement. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the SEC to receive continuing disclosure reports pursuant to the Rule. “Other Obligations” shall have the meaning assigned to such term in the Indenture. “Outstanding” shall have the meaning assigned to such term in the Indenture. “Owner” shall have the meaning assigned to such term in the Indenture. “Participating Underwriter” shall mean FMSbonds, Inc., and its successors and assigns. “PID Act” shall mean Chapter 372, Texas Local Government Code, as amended. “Prepayment” shall have the meaning assigned to such term in the Indenture. “Rule” shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time. “SAP Update” shall have the meaning assigned such term in subsection 4(a)(iii) of this Disclosure Agreement. “SEC” shall mean the United States Securities and Exchange Commission. “Service and Assessment Plan” shall have the meaning assigned to such term in the Indenture. “Tax Year” means the calendar year, or as may be otherwise defined in Section 1.04 of the Texas Tax Code, as amended. “Trustee” shall have the meaning assigned to such term in the Indenture. SECTION 3. Provision of Annual Issuer Reports. (a) For each Fiscal Year, commencing with the Fiscal Year ending September 30, 2023, the Issuer shall cause, pursuant to written direction, and hereby directs the Dissemination Agent to provide or cause to be provided to the MSRB, in the electronic or other format required by the MSRB, not later than the Annual Issuer Report Filing Date, an Annual Issuer Report provided to the Dissemination Agent which is consistent with the requirements of and within the time periods specified in Section 4 of this Disclosure Agreement. In each case, the Annual Issuer Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Agreement. If the Issuer’s Fiscal Year changes, it shall file notice of such change (including the date of the new Fiscal Year) with the MSRB prior to the next Annual Issuer Report Filing Date. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. 4 4131-0566-6633.1 Not later than ten (10) days prior to the Annual Issuer Report Filing Date, the Issuer shall provide the Annual Issuer Report to the Dissemination Agent together with written direction to file such Annual Issuer Report with the MSRB. The Dissemination Agent shall provide such Annual Issuer Report to the MSRB not later than ten (10) days from receipt of such Annual Issuer Report from the Issuer, but in no event later than the Annual Issuer Report Filing Date for such Fiscal Year. If by the fifth (5th) day before the Annual Issuer Report Filing Date the Dissemination Agent has not received a copy of the Annual Issuer Report, the Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the applicable Annual Issuer Report pursuant to this subsection (a). Upon such reminder, the Disclosure Representative shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Issuer Report no later than two (2) Business Days prior to the Annual Issuer Report Filing Date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to provide the Annual Issuer Report by the Annual Issuer Report Filing Date, state the date by which the Annual Issuer Report for such year will be provided, and instruct the Dissemination Agent to immediately send a notice to the MSRB in substantially the form attached as Exhibit A; provided, however, that in the event the Disclosure Representative is required to act under either (i) or (ii) described above, the Dissemination Agent still must file the Annual Issuer Report or the notice of failure to file, as applicable, to the MSRB no later than the Annual Issuer Report Filing Date; provided further, however, that in the event the Disclosure Representative fails to act under either (i) or (ii) described above, the Dissemination Agent shall file a notice of failure to file no later than the last Business Day prior to the Annual Issuer Report Filing Date. (b) The Issuer shall or shall cause the Dissemination Agent pursuant to written direction to: (i) determine the filing address or other filing location of the MSRB each year prior to filing the Annual Issuer Report; and (ii) file the Annual Issuer Report containing or incorporating by reference the information set forth in Section 4 hereof. (c) If the Issuer has provided the Dissemination Agent with the completed Annual Issuer Report and the Dissemination Agent has filed such Annual Issuer Report with the MSRB, then the Dissemination Agent shall file a report with the Issuer certifying that the Annual Issuer Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and that it was filed with the MSRB, which report shall include a filing receipt from the MSRB. SECTION 4. Content and Timing of Annual Issuer Reports. The Annual Issuer Report for the Bonds shall contain or incorporate by reference, and the Issuer agrees to provide or cause to be provided to the Dissemination Agent to file by the Annual Issuer Report Filing Date, the following: (a) Annual Financial Information. The following Annual Financial Information (any or all of which may be unaudited): (i) Tables setting forth the following information, as of the end of such Fiscal Year: 5 4131-0566-6633.1 (A) For the Bonds, the maturity date(s), the interest rate(s), the original aggregate principal amount(s), the principal amount(s) remaining Outstanding, and the total interest amount due on the aggregate principal amount Outstanding; (B) The amounts in the funds and accounts securing the Bonds and a description of the related investments; (C) The assets and liabilities of the Trust Estate. (ii) Financial information and operating data with respect to the Issuer of the general type and in substantially similar form to that shown in the tables provided under Sections 4(a)(ii) of Exhibit B attached hereto. Such information shall be provided as of the end of the reporting Fiscal Year; (iii) Any updates to the Service and Assessment Plan, including the Annual Service Plan Update (together, a “SAP Update”); (iv) A description of any amendment to this Disclosure Agreement and a copy of any restatements to the Issuer’s audited financial statements during such Fiscal Year. (b) Audited Financial Statements. The audited financial statements of the Issuer for the most recently ended Fiscal Year, prepared in accordance with generally accepted accounting principles applicable from time to time to the Issuer and that have been audited by an independent certified public accountant, but only if available by the Annual Issuer Report Filing Date. If the audited financial statements of the Issuer are not available within twelve months after the end of the Fiscal Year, the Issuer shall provide notice that the audited financial statements are not available, file unaudited financial statements within such twelve-month period, and file audited financial statements when prepared and available. (c) A form for submitting the information described in subsection 4(a) above is attached as Exhibit B hereto. Any or all of the items listed above may be included by specific reference to other documents, including disclosure documents of debt issues of the Issuer, which have been submitted to and are publicly accessible from the MSRB. If the document included by reference is a final offering document, it must be available from the MSRB. The Issuer shall clearly identify each such other document so included by reference. The Administrator, and if no Administrator is designated, Issuer’s staff, shall prepare the Annual Financial Information. In all cases, the Issuer shall have the sole responsibility for the content, design, and other elements comprising substantive contents of the Annual Issuer Reports under this Section 4. SECTION 5. Annual Collections Report. (a) For each Fiscal Year succeeding the reporting Fiscal Year, the Issuer shall cause, pursuant to written direction, and hereby directs the Dissemination Agent to provide or cause to be provided to the MSRB, in the electronic or other format required by the MSRB, not later than the Annual Collections Report Filing Date, an Annual Collections Report provided to the Dissemination Agent which complies with the requirements specified in this Section 5; provided that the Issuer may provide the Annual Collections Report as part of the Annual Issuer Report, if such Annual Collections Report is available 6 4131-0566-6633.1 when the Annual Issuer Report is provided to the MSRB. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. Not later than ten (10) days prior to the Annual Collections Report Filing Date, the Issuer shall provide the Annual Collections Report to the Dissemination Agent together with written direction to file such Annual Collections Report with the MSRB. The Dissemination Agent shall provide such Annual Collections Report to the MSRB not later than ten (10) days from receipt of such Annual Collections Report from the Issuer, but in no event later than the Annual Collections Report Filing Date. If by the fifth (5th) day before the Annual Collections Report Filing Date the Dissemination Agent has not received a copy of the Annual Collections Report, the Dissemination Agent shall contact the Disclosure Representative in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the applicable Annual Collections Report pursuant to this subsection (a). Upon such reminder, the Disclosure Representative shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Collections Report no later than two (2) Business Days prior to the Annual Collections Report Filing Date, or (ii) instruct the Dissemination Agent in writing that the Issuer will not be able to provide the Annual Collections Report by the Annual Collections Report Filing Date, state the date by which the Annual Collections Report for such year will be provided, and instruct the Dissemination Agent to immediately send a notice to the MSRB in substantially the form attached as Exhibit A hereto; provided, however, that in the event the Disclosure Representative is required to act under either (i) or (ii) described above, the Dissemination Agent still must file the Annual Collections Report or the notice of failure to file, as applicable, to the MSRB no later than the Annual Collections Report Filing Date; provided further, however, that in the event the Disclosure Representative fails to act under either (i) or (ii) described above, the Dissemination Agent shall file a notice of failure to file no later than the last Business Day prior to the Annual Collections Report Filing Date. (b) The Annual Collections Report for the Bonds shall contain, and the Issuer agrees to provide or cause to be provided to the Dissemination Agent to file by the Annual Collections Report Filing Date, certain financial information and operating data with respect to collection of the Assessments of the general type and in substantially similar form to that shown in the tables provided in Exhibit C attached hereto. Such information shall cover the period beginning the first (1st) day of the Fiscal Year succeeding the reporting Fiscal Year through the Collections Reporting Date. If the State Legislature amends the definition of Delinquency Date or Tax Year, the City shall file notice of such change or changes with the MSRB prior to the next Annual Collections Report Filing Date. The Administrator, and if no Administrator is designated, Issuer’s staff, shall prepare the Annual Collections Report. In all cases, the Issuer shall have the sole responsibility for the content, design, and other elements comprising substantive contents of the Annual Collections Report under this Section 5. SECTION 6. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 6, each of the following is a Listed Event with respect to the Bonds: 1. Principal and interest payment delinquencies. 2. Non-payment related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 7 4131-0566-6633.1 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds. 7. Modifications to rights of Owners, if material. 8. Bond calls, if material, and tender offers. 9. Defeasances. 10. Release, substitution, or sale of property securing repayment of the bonds, if material. 11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar event of the Issuer. 13. The consummation of a merger, consolidation, or acquisition of the Issuer, or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. 14. Appointment of a successor or additional trustee under the Indenture or the change of name of a trustee, if material. 15. Incurrence of a Financial Obligation of the Issuer, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect security holders, if material. 16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. Any sale by the Developer of real property within Improvement Area #1 in the ordinary course of the Developer’s business will not constitute a Listed Event for the purposes of paragraph (10) above. For these purposes, any event described in paragraph (12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or 8 4131-0566-6633.1 liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer. The Issuer intends the words used in paragraphs (15) and (16) above and the definition of Financial Obligation to have the same meanings as when they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018. For the avoidance of doubt, the incurrence of Other Obligations without the filing of a corresponding official statement with the MSRB will constitute the incurrence of a material Financial Obligation for which a notice of a Listed Event in accordance with this Section 6 must be filed with the MSRB. Upon the occurrence of a Listed Event, the Issuer shall promptly notify the Dissemination Agent in writing and the Issuer shall direct the Dissemination Agent to file a notice of such occurrence with the MSRB. The Dissemination Agent shall file such notice no later than the Business Day immediately following the day on which it receives written notice of such occurrence from the Issuer. Any such notice is required to be filed within ten (10) Business Days of the occurrence of such Listed Event. Any notice under the preceding paragraphs shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Dissemination Agent to disseminate such information as provided herein, and the date the Issuer desires for the Dissemination Agent to disseminate the information. In all cases, the Issuer shall have the sole responsibility for the content, design and other elements comprising substantive contents of all disclosures made under this Section 6. In addition, the Issuer shall have the sole responsibility to ensure that any notice required to be filed under this Section 6 is filed within ten (10) Business Days of the occurrence of the Listed Event. (b) The Dissemination Agent shall, promptly, and not more than five (5) Business Days of obtaining actual knowledge of the occurrence of any Listed Event with respect to the Bonds, notify the Disclosure Representative in writing of such Listed Event. The Dissemination Agent shall not be required to file a notice of the occurrence of such Listed Event with the MSRB unless and until it receives written instructions from the Disclosure Representative to do so. If the Dissemination Agent has been instructed in writing by the Disclosure Representative on behalf of the Issuer to report the occurrence of a Listed Event under this subsection (b), the Dissemination Agent shall file a notice of such occurrence with the MSRB no later than two (2) Business Days following the day on which it receives such written instructions. It is agreed and understood that the duty to make or cause to be made the disclosures herein is that of the Issuer and not that of the Dissemination Agent. It is agreed and understood that the Dissemination Agent has agreed to give the foregoing notice to the Issuer as an accommodation to assist it in monitoring the occurrence of such event, but is under no obligation to investigate whether any such event has occurred. As used above, “actual knowledge” means the actual fact or statement of knowing, without a duty to make any investigation with respect thereto. In no event shall the Dissemination Agent be liable in damages or in tort to the Issuer, the Participating Underwriter, the Trustee, or any Owner or beneficial owner of any interests in the Bonds as a result of its failure to give the foregoing notice or to give such notice in a timely fashion. (c) If in response to a notice from the Dissemination Agent under subsection (b), the Issuer determines that the Listed Event under number 2, 7, 8 (as to bond calls only), 10, 13, 14, or 15 of subparagraph (a) above is not material under applicable federal securities laws, the Issuer shall promptly, 9 4131-0566-6633.1 but in no case more than five (5) Business Days after the occurrence of the event, notify the Dissemination Agent and the Trustee (if the Dissemination Agent is not the Trustee) in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (b). SECTION 7. Termination of Reporting Obligations. The obligations of the Issuer, the Administrator, and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Dissemination Agent and the Administrator of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required. So long as any of the Bonds remain Outstanding, the Administrator and the Dissemination Agent may assume that the Issuer is an obligated person with respect to the Bonds until they receive written notice from the Disclosure Representative stating that the Issuer is no longer an obligated person with respect to the Bonds, and the Dissemination Agent and the Administrator may conclusively rely upon such written notice with no duty to make investigation or inquiry into any statements contained or matters referred to in such written notice. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event with respect to the Bonds under Section 6(a). SECTION 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent or successor Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge such Dissemination Agent, with or without appointing a successor Dissemination Agent. If the Issuer discharges the Dissemination Agent without appointing a successor Dissemination Agent, the Issuer shall use best efforts to appoint a successor Dissemination Agent within 30 days of such discharge. If at any time there is not any other designated Dissemination Agent, the Issuer shall be the Dissemination Agent. SECTION 9. Amendment; Waiver. Notwithstanding any other provisions of this Disclosure Agreement, the Issuer, the Administrator, and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall not unreasonably withhold its consent to any amendment so requested in writing by the Issuer or the Administrator), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5, or 6(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the delivery of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or beneficial owners of the Bonds. 10 4131-0566-6633.1 In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Issuer shall describe such amendment in the next related Annual Financial Information, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 6(a), and (ii) the Annual Financial Information for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. No amendment which adversely affects the Dissemination Agent may be made without its prior written consent (which consent will not be unreasonably withheld or delayed). SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Issuer Report, Annual Collections Report, or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Issuer Report, Annual Collections Report, or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Issuer Report, Annual Collections Report, or notice of occurrence of a Listed Event. SECTION 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Agreement, the Dissemination Agent or any Owner or beneficial owner of the Bonds may, and the Trustee (at the written request of any Participating Underwriter or the Owners of at least twenty-five percent (25%) aggregate principal amount of Outstanding Bonds and upon being indemnified to its satisfaction) shall, take such actions as may be necessary and appropriate to cause the Issuer to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture with respect to the Bonds, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with this Disclosure Agreement shall be an action for mandamus or specific performance. A default under this Disclosure Agreement shall not be deemed a default under the Disclosure Agreement of Developer and a default under the Disclosure Agreement of Developer shall not be deemed a default under this Disclosure Agreement. SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent and Administrator. (a) The Dissemination Agent shall not have any duty with respect to the content of any disclosures made pursuant to the terms hereof. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and no implied covenants shall be read into this Disclosure Agreement with respect to the Dissemination Agent. To the extent permitted by law, the Issuer agrees to indemnify and hold harmless the Dissemination Agent, its officers, directors, employees and agents, but only from Annual Collection Costs collected from the property owners in Improvement Area #1, against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ 11 4131-0566-6633.1 fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct; provided, however, that nothing herein shall be construed to require the Issuer to indemnify the Dissemination Agent for losses, expenses or liabilities arising from information provided to the Dissemination Agent by the Developer or the failure of the Developer to provide information to the Dissemination Agent as and when required under the Disclosure Agreement of Developer. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be construed to mean or to imply that the Dissemination Agent is an “obligated person” under the Rule. If the Issuer does not provide the Dissemination Agent with the Annual Issuer Report in accordance with subsection 3(a) or the Annual Collections Report in accordance with subsection 5(a), the Dissemination Agent shall not be responsible for the failure to submit an Annual Issuer Report or an Annual Collections Report, as applicable, to the MSRB. The Dissemination Agent is not acting in a fiduciary capacity in connection with the performance of its respective obligations hereunder. The Dissemination Agent may, from time to time, consult with legal counsel of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or their respective duties hereunder, and the Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. (b) The Administrator shall not have any duty with respect to the content of any disclosures made pursuant to the terms hereof. The Administrator shall have only such duties as are specifically set forth in this Disclosure Agreement, and no implied covenants shall be read into this Disclosure Agreement with respect to the Administrator. To the extent permitted by law, the Issuer agrees to hold harmless the Administrator, its officers, directors, employees and agents, but only from Annual Collection Costs collected from the property owners in Improvement Area #1, against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including reasonable attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Administrator’s negligence or willful misconduct; provided, however, that nothing herein shall be construed to require the Issuer to indemnify the Administrator for losses, expenses or liabilities arising from information provided to the Administrator by third parties, or the failure of any third party to provide information to the Administrator as and when required under this Disclosure Agreement, or the failure of the Developer to provide information to the Administrator as and when required under the Disclosure Agreement of Developer. The obligations of the Issuer under this Section shall survive resignation or removal of the Administrator and payment in full of the Bonds. Nothing in this Disclosure Agreement shall be construed to mean or to imply that the Administrator is an “obligated person” under the Rule. The Administrator is not acting in a fiduciary capacity in connection with the performance of its respective obligations hereunder. The Administrator shall not in any event incur any liability with respect to (i) any action taken or omitted to be taken in good faith upon advice of legal counsel given with respect to any question relating to duties and responsibilities of the Administrator hereunder, or (ii) any action taken or omitted to be taken in reliance upon any document delivered to the Administrator and believed to be genuine and to have been signed or presented by the proper party or parties. The Administrator may, from time to time, consult with legal counsel of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or their respective duties hereunder, and the Administrator shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. 12 4131-0566-6633.1 (c) UNDER NO CIRCUMSTANCES SHALL THE DISSEMINATION AGENT, THE ADMINISTRATOR, OR THE ISSUER BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY ANY PARTY TO THIS DISCLOSURE AGREEMENT, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS DISCLOSURE AGREEMENT, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. THE DISSEMINATION AGENT AND THE ADMINISTRATOR ARE UNDER NO OBLIGATION NOR ARE THEY REQUIRED TO BRING SUCH AN ACTION. SECTION 13. Assessment Timeline. The basic expected timeline for the collection of Assessments and the anticipated procedures for pursuing the collection of delinquent Assessments is set forth in Exhibit D which is intended to illustrate the general procedures expected to be followed in enforcing the payment of delinquent Assessments. Failure to adhere to such expected timeline shall not constitute a default by the Issuer under this Disclosure Agreement, the Indenture, the Bonds, or any other document related to the Bonds. SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement of the Issuer, the Administrator, or the Dissemination Agent contained in this Disclosure Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future council members, officer, agent or employee of the Issuer, the Administrator, or the Dissemination Agent in other than that person’s official capacity. SECTION 15. Severability. In case any section or provision of this Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the extent that such remainder or section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof is wholly dependent for its operation on the provision determined to be invalid), which shall be construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application thereof affect any legal and valid application thereof, and each such section, provision, covenant, stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. SECTION 16. Sovereign Immunity. The Dissemination Agent and the Administrator agree that nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s sovereign or governmental immunities regarding liability or suit. SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Administrator, the Dissemination Agent, the Participating Underwriter, and the Owners and the beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. Nothing in this Disclosure Agreement is intended or shall act to disclaim, waive or otherwise limit the duties of the Issuer under federal and state securities laws. 13 4131-0566-6633.1 SECTION 18. Dissemination Agent and Administrator Compensation. The fees and expenses incurred by the Dissemination Agent and the Administrator for their respective services rendered in accordance with this Disclosure Agreement constitute Annual Collection Costs and will be included in the Annual Installments as provided in the annual updates to the Service and Assessment Plan. The Issuer shall pay or reimburse the Dissemination Agent and the Administrator, but only with funds to be provided from the Annual Collection Costs component of the Annual Installments collected from the property owners in Improvement Area #1, for the fees and expenses for their respective services rendered in accordance with this Disclosure Agreement. SECTION 19. Anti-Boycott Verification. To the extent this Disclosure Agreement constitutes a contract for goods or services for which a written verification is required under Section 2271.002, Texas Government Code, the Dissemination Agent and Administrator each separately verify that it and any parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and will not boycott Israel during the term of this Disclosure Agreement. The foregoing verification is made solely to enable the Issuer to comply with such Section and to the extent such Section does not contravene applicable Federal or State law. As used in the foregoing verification, “boycott Israel” means refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory, but does not include an action made for ordinary business purposes. SECTION 20. Iran, Sudan and Foreign Terrorist Organizations. The Dissemination Agent and the Administrator each separately represent that neither it nor any parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, is a company identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on any of the following pages of such officer’s internet website: https://comptroller.texas.gov/purchasing/docs/sudan-list.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is made solely to enable the Issuer to comply with Section 2252.152, Texas Government Code, and to the extent such Section does not contravene applicable Federal or State law, and excludes the Dissemination Agent, the Administrator and each parent company, wholly- or majority- owned subsidiaries, and other affiliates of the Dissemination Agent or the Administrator, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. SECTION 21. No Discrimination Against Fossil-Fuel Companies. To the extent this Disclosure Agreement constitutes a contract for goods or services for which a written verification is required under Section 2274.002 (as added by Senate Bill 13 in the 87th Texas Legislature, Regular Session), Texas Government Code, as amended, the Dissemination Agent and the Administrator, each respectively, hereby verify that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott energy companies and will not boycott energy companies during the term of this Disclosure Agreement. The foregoing verification is made solely to enable the Issuer to comply with such Section and to the extent such Section does not contravene applicable Federal or State 14 4131-0566-6633.1 law. As used in the foregoing verification, “boycott energy companies” shall mean, without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company (A) engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable Federal or State law; or (B) does business with a company described by (A) above. SECTION 22. No Discrimination Against Firearm Entities and Firearm Trade Associations. To the extent this Disclosure Agreement constitutes a contract for goods or services for which a written verification is required under Section 2274.002 (as added by Senate Bill 19 in the 87th Texas Legislature, Regular Session), Texas Government Code, as amended, the Dissemination Agent and the Administrator, each respectively, hereby verifies that it and its parent company, wholly- or majority- owned subsidiaries, and other affiliates, if any, do not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of this Disclosure Agreement. The foregoing verification is made solely to enable the Issuer to comply with such Section and to the extent such Section does not contravene applicable Federal or State law. As used in the foregoing verification, “discriminate against a firearm entity or firearm trade association” (A) means, with respect to the firearm entity or firearm trade association, to (i) refuse to engage in the trade of any goods or services with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association, (ii) refrain from continuing an existing business relationship with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association, or (iii) terminate an existing business relationship with the firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association and (B) does not include (i) the established policies of a merchant, retail seller, or platform that restrict or prohibit the listing or selling of ammunition, firearms, or firearm accessories and (ii) a company’s refusal to engage in the trade of any goods or services, decision to refrain from continuing an existing business relationship, or decision to terminate an existing business relationship (aa) to comply with federal, state, or local law, policy, or regulations or a directive by a regulatory agency or (bb) for any traditional business reason that is specific to the customer or potential customer and not based solely on an entity’s or association’s status as a firearm entity or firearm trade association; “firearm entity” means a manufacturer, distributor, wholesaler, supplier, or retailer of firearms (i.e., weapons that expel projectiles by the action of explosive or expanding gases), firearm accessories (i.e., devices specifically designed or adapted to enable an individual to wear, carry, store, or mount a firearm on the individual or on a conveyance and items used in conjunction with or mounted on a firearm that are not essential to the basic function of the firearm, including detachable firearm magazines), or ammunition (i.e., a loaded cartridge case, primer, bullet, or propellant powder with or without a projectile) or a sport shooting range (as defined by Section 250.001, Texas Local Government Code); and “firearm trade association” means a person, corporation, unincorporated association, federation, business league, or business organization that (i) is not organized or operated for profit (and none of the net earnings of which inures to the benefit of any private shareholder or individual), (ii) 15 4131-0566-6633.1 has two or more firearm entities as members, and (iii) is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, as an organization described by Section 501(c) of that code. SECTION 23. Affiliate. As used in Sections 19 through 22, the Dissemination Agent and Administrator, each respectively, understands “affiliate” to mean an entity that controls, is controlled by, or is under common control with the Dissemination Agent or the Administrator within the meaning of SEC Rule 405, 17.C.F.R. § 230.405, and exists to make a profit. SECTION 24. Disclosure of Interested Parties. Pursuant to Section 2252.908(c)(4), Texas Government Code, as amended, the Dissemination Agent hereby certifies it is a publicly traded business entity and is not required to file a Certificate of Interested Parties Form 1295 related to this Disclosure Agreement. Submitted herewith is a completed Form 1295 in connection with the Administrator’s participation in the execution of this Disclosure Agreement generated by the Texas Ethics Commission’s (the “TEC”) electronic filing application in accordance with the provisions of Section 2252.908 of the Texas Government Code and the rules promulgated by the TEC (the “Form 1295”). The Issuer hereby confirms receipt of the Form 1295 from the Administrator, and the Issuer agrees to acknowledge such form with the TEC through its electronic filing application not later than the thirtieth (30th) day after the receipt of such form. The Administrator and the Issuer understand and agree that, with the exception of information identifying the Issuer and the contract identification number, neither the Issuer nor its consultants are responsible for the information contained in the Form 1295; that the information contained in the Form 1295 has been provided solely by the Administrator; and, neither the Issuer nor its consultants have verified such information. SECTION 25. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of Texas. SECTION 26. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The Issuer, the Administrator, and the Dissemination Agent agree that electronic signatures to this Disclosure Agreement may be regarded as original signatures. Signature pages follow. SIGNATURE PAGE OF CONTINUING DISCLOSURE AGREEMENT OF ISSUER 4131-0566-6633.1 CITY OF ANNA, TEXAS By: Interim City Manager SIGNATURE PAGE OF CONTINUING DISCLOSURE AGREEMENT OF ISSUER 4131-0566-6633.1 REGIONS BANK (as Dissemination Agent) By: Authorized Officer SIGNATURE PAGE OF CONTINUING DISCLOSURE AGREEMENT OF ISSUER 4131-0566-6633.1 P3Works, LLC (as Administrator) By: Authorized Officer A-1 4131-0566-6633.1 EXHIBIT A NOTICE TO MSRB OF FAILURE TO FILE [ANNUAL ISSUER REPORT][ANNUAL COLLECTIONS REPORT] [AUDITED/UNAUDITED FINANCIAL STATEMENTS] Name of Issuer: City of Anna, Texas Name of Bond Issue: Special Assessment Revenue Bonds, Series 2023 (The Woods at Lindsey Place Public Improvement District Improvement Area #1 Project) (the “Bonds”) CUSIP Nos. [insert CUSIP NOs.] Date of Delivery: ______________, 20__ NOTICE IS HEREBY GIVEN that the City of Anna, Texas (the “Issuer”), has not provided [an Annual Issuer Report][an Annual Collections Report][audited/unaudited financial statements] with respect to the Bonds as required by the Continuing Disclosure Agreement of Issuer dated as of October 1, 2023, by and among the Issuer, P3Works, LLC., as “Administrator,” and Regions Bank, as “Dissemination Agent.” The Issuer anticipates that [the Annual Issuer Report][the Annual Collections Report][audited/unaudited financial statements] will be filed by ________________. Dated: _________________ Regions Bank, on behalf of the City of Anna, Texas (as Dissemination Agent) By: Title: cc: City of Anna, Texas B-1 4131-0566-6633.1 EXHIBIT B CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) ANNUAL FINANCIAL INFORMATION* Delivery Date: __________, 20__ CUSIP Nos: [insert CUSIP Nos.] DISSEMINATION AGENT Name: Regions Bank Address: [_______________________________] City: [_] Telephone: (___) ___-____ Contact Person: Attn: ___________ Section 4(a)(i)(A) BONDS OUTSTANDING Maturity Date Interest Rate Original Principal Amount Outstanding Principal Amount Outstanding Interest Amount – – Total Section 4(a)(i)(B) INVESTMENTS Fund/ Account Name Investment Description Par Value(1) Book Value(1) Market Value(1) (1) As such information is provided by the Trustee. *Excluding audited financial statements of the Issuer B-2 4131-0566-6633.1 Section 4(a)(i)(C) ASSETS AND LIABILITIES OF TRUST ESTATE Cash Position of Trust Estate for statements dated September 30, 20[__] [List of Funds/Accounts Held Under Indenture] Amount In the Fund Total A Bond Principal Amount Outstanding B Outstanding Assessment Amount to be collected C Net Position of Trust Estate and Outstanding Bonds and Assessments A-B+C September 30, 20[__] Trust Statements: Audited Unaudited Accounting Type: Cash Accrual Modified Accrual Section 4(a)(ii) FINANCIAL INFORMATION AND OPERATING DATA WITH RESPECT TO THE ISSUER OF THE GENERAL TYPE AND IN SUBSTANTIALLY SIMILAR FORM PROVIDED IN THE FOLLOWING TABLES AS OF THE END OF THE FISCAL YEAR Debt Service Requirements on the Bonds Year Ending (September 30) Principal Interest Total Top [Five] Assessment Payers in Improvement Area #1 (1) Property Owner No. of Parcels/Lots Percentage of Parcels/Lots Outstanding Assessments Percentage of Total Assessments (1) Does not include those owing less than one percent (1%) of total Assessments. Assessed Value of Improvement Area #1 of the District The [YEAR] certified total assessed value for the Assessed Property in Improvement Area #1 of the District is approximately $[AMOUNT] according to the Collin Central Appraisal District. B-3 4131-0566-6633.1 Foreclosure History Related to the Assessments for the Past Five Fiscal Years Fiscal Year Ended (9/30) Delinquent Assessment Amount not in Foreclosure Proceedings Parcels in Foreclosure Proceedings Delinquent Assessment Amount in Foreclosure Proceedings Foreclosure Sales Foreclosure Proceeds Received 20__ $ $ $ 20__ 20__ 20__ 20__ [insert any necessary footnotes] Collection and Delinquency History of Annual Installments for the Past Five Fiscal Years Fiscal Year Ended (9/30) Total Annual Installment Billed Parcels Levied(1) Delinquent Amount as of 3/1 Delinquent % as of 3/1 Delinquent Amount as of [9/1] Delinquent % as of [9/1] Total Assessments Collected(2) 20__ $ $ % $ % $ 20__ 20__ 20__ 20__ (1) Pursuant to Section 31.031, Texas Tax Code, certain veterans, persons aged 65 or older, and the disabled, who qualify for an exemption under either Section 11.13(c), 11.32, or 11.22, Texas Tax Code, are eligible to pay property taxes in four equal installments (“Installment Payments”). Effective January 1, 2018, pursuant to Section 31.031(a-1), Texas Tax Code, the Installment Payments are each due before February 1, April 1, June 1, and August 1. Each unpaid Installment Payment is delinquent and incurs penalties and interest if not paid by the applicable date. (2) [Does/does not] include interest and penalties. Parcel Numbers for Delinquencies Equaling or Exceeding 10% of Annual Installments Due For the past five Fiscal Years, if the total amount of delinquencies as of September 1 equals or exceeds ten percent (10%) of the amount of Annual Installments due, a list of parcel numbers for which the Annual Installments are delinquent. Fiscal Year Ended (9/30) Delinquent % as of 9/1 Parcel Numbers 20__ % 20__ History of Prepayment of Assessments for the Past Five Fiscal Years Fiscal Year Ended (9/30) Number of Prepayments Amount of Prepayments Bond Call Date Amount of Bonds Redeemed 20__ $ $ 20__ 20__ 20__ 20__ [insert any necessary footnotes] ITEMS REQUIRED BY SECTION 4(a)(iii) - (iv) [Insert a line item for each applicable listing] C-1 4131-0566-6633.1 EXHIBIT C CITY OF ANNA, TEXAS, SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (THE WOODS AT LINDSEY PLACE PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) ANNUAL COLLECTIONS REPORT Delivery Date: __________, 20__ CUSIP Nos: [insert CUSIP Nos.] DISSEMINATION AGENT Name: Regions Bank Address: [__________________________] City: [_____, Texas _____] Telephone: (___) ___-____ Contact Person: Attn: ___________ SELECT FINANCIAL INFORMATION AND OPERATING DATA WITH RESPECT TO THE COLLECTION OF ASSESSMENTS COVERING THE PERIOD BEGINNING WITH THE FIRST DAY OF THE FISCAL YEAR SUCCEEDING THE REPORTING FISCAL YEAR THROUGH THE COLLECTIONS REPORTING DATE PROVIDED IN COMPLIANCE WITH SUBSECTION 5(A) OF THE ISSUER’S DISCLOSURE AGREEMENT Foreclosure History Related To The Annual Installments(1) Succeeding Fiscal Year Delinquent Annual Installment Amount not in Foreclosure Proceedings Parcels in Foreclosure Proceedings Delinquent Annual Installment Amount in Foreclosure Proceedings Foreclosure Sales Foreclosure Proceeds Received 20__ $ $ $ (i) Period covered includes October 1, 20__ through March 1, 20__. C-2 4131-0566-6633.1 Collection and Delinquency of Annual Installments (1) Succeeding Fiscal Year Total Annual Installments Levied Parcels Levied(2) Delinquent Amount as of 3/1 Delinquent % as of 3/1 Total Annual Installments Collected(3) 20__ $ $ % $ (1) Period covered includes October 1, 20__ through March 1, 20__. (2) Pursuant to Section 31.031, Texas Tax Code, certain veterans, persons aged 65 or older, and the disabled, who qualify for an exemption under either Section 11.13(c), 11.32, or 11.22, Texas Tax Code, are eligible to pay property taxes in four equal installments (“Installment Payments”). Effective January 1, 2018, pursuant to Section 31.031(a-1), Texas Tax Code, the Installment Payments are each due before February 1, April 1, June 1, and August 1. Each unpaid Installment Payment is delinquent and incurs penalties and interest if not paid by the applicable date. (3) [Does/does not] include interest and penalties. Prepayment of Assessments(1) Succeeding Fiscal Year Number of Prepayments Amount of Prepayments Bond Call Date Amount of Bonds Redeemed $ $ (1) Period covered includes October 1, 20__ through March 1, 20__. D-1 4131-0566-6633.1 EXHIBIT D BASIC EXPECTED TIMELINE FOR ASSESSMENT COLLECTIONS AND PURSUIT OF DELINQUENCIES1 Date Delinquency Clock (Days) Activity January 31 Assessments are due. February 1 1 Assessments delinquent if not received. Immediately upon receipt, but in no event later than February 15, Issuer forwards payment to Trustee for all collections received, along with detailed breakdown. Subsequent payments and relevant details will follow monthly thereafter. Issuer and/or Administrator should be aware of actual and specific delinquencies. Administrator should be aware if Reserve Fund needs to be utilized for debt service payments during the corresponding Fiscal Year. If there is to be a shortfall of any Annual Installments due to be paid that Fiscal Year, the Dissemination Agent should be immediately notified in writing. Administrator should determine if previously collected surplus funds, if any, plus actual Annual Installment collections will be fully adequate for debt service in the corresponding March and September. At this point, if there is adequate funding for March and September payments, no further action is anticipated for collection of Assessments except that the Issuer or Administrator, working with the Issuer’s counsel or an appropriate designee, will begin process to cure deficiency. For properties delinquent by more than one year or if the delinquency exceeds $10,000 the matter will be referred for commencement of 1 Illustrates anticipated dates and procedures for pursuing the collection of delinquent Annual Installments of Assessments, which dates and procedures shall be in accordance with Chapters 31, 32, 33, and 34, Texas Tax Code, as amended (the “Code”), and the Tax/Assessor Collector’s procedures, and are subject to adjustment by the Issuer. If the collection and delinquency procedures under the Code are subsequently modified, whether due to an executive order of the Governor of Texas, an amendment to the Code, or otherwise, such modifications shall control. D-2 4131-0566-6633.1 foreclosure, in accordance with the Tax/Assessor Collector’s procedures. If there is insufficient funding in the Pledged Revenue Fund for transfer to the Principal and Interest Account of the Bond Fund of such amounts as shall be required for the full March and September payments, the collection-foreclosure procedure will proceed against all delinquent properties, in accordance with the Tax/Assessor Collector’s procedures. March 15 43/44 Trustee pays bond interest payments to Owners. Reserve Fund payment to Bond Fund may be required if Assessments are below approximately 50% collection rate. Issuer, or the Trustee on behalf of the Issuer, to notify Dissemination Agent in writing of the occurrence of draw on the Reserve Fund and, following receipt of such notice, Dissemination Agent to notify MSRB of such draw or the Reserve Fund. July 1 152/153 Issuer, or the Administrator on behalf of the Issuer, determines whether or not any Annual Installments are delinquent and, if such delinquencies exist, the Issuer commences as soon as practicable appropriate and legally permissible actions to obtain such delinquent Annual Installments, in accordance with the Tax/Assessor Collector’s procedures. Preliminary Foreclosure activity commences and Issuer to notify Dissemination Agent in writing of the commencement of preliminary foreclosure activity. If Dissemination Agent has not received Foreclosure Schedule and Plan of Collections, Dissemination Agent to request same from the Issuer. If the Issuer has not provided the Dissemination Agent with Foreclosure Schedule and Plan of Collections, and if instructed by the Owners under Section 11.2 of the Indenture, Dissemination Agent requests that the Issuer commence foreclosure or provide plan for collection. D-3 4131-0566-6633.1 August 15 197/198 The designated lawyers or law firm will be preparing the formal foreclosure documents and will provide periodic updates to the Dissemination Agent for dissemination to those Owners who have requested to be notified of collections progress. The goal for the foreclosure actions is a filing by no later than August 15 (day 197/198). Foreclosure action to be filed with the court. Issuer notifies Trustee and Dissemination Agent of Foreclosure filing status in writing. Dissemination Agent notifies Owners. If Owners and Dissemination Agent have not been notified of a foreclosure action, Dissemination Agent will notify the Issuer that it is appropriate to file action. A committee of not less than twenty-five percent (25%) of the Owners may request a meeting with the Issuer to discuss the Issuer’s actions in pursuing the repayment of any delinquencies. This would also occur after day thirty (30) if it is apparent that a Reserve Fund draw is required. Further, if delinquencies exceed five percent (5%), Owners may also request a meeting with the Issuer at any time to discuss the Issuer’s plan and progress on collection and foreclosure activity. If the Issuer is not diligently proceeding with the foreclosure process, the Owners may seek an action for mandamus or specific performance to direct the Issuer to pursue the collections of delinquent Annual Installments of Assessments. Item No. 5.i. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Approve a Resolution approving a Preliminary Limited Offering Memorandum for the sale of “City of Anna, Texas Special Assessment Revenue Bonds, Series 2023 (AnaCapri Public Improvement District Improvement Area #1 Project." (Director of Economic Development Joey Grisham) SUMMARY: The next step for PID bonds related to the AnaCapri Improvement Area #1 is approval of the Preliminary Limited Offering Memorandum (PLOM). Bond closing is currently scheduled for October 24, 2023. FINANCIAL IMPACT: N/A BACKGROUND: The City Council previously approved a Development Agreement and Public Improvement District for AnaCapri. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Resolution Approving Preliminary PLOM v1 2. Anna AnaCapri 2023 IA#1 - PLOM 4136-8801-9782 4 CITY OF ANNA, TEXAS RESOLUTION NO. 2023-09-____ RESOLUTION APPROVING A PRELIMINARY LIMITED OFFERING MEMORANDUM FOR THE SALE OF “CITY OF ANNA, TEXAS SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (ANACAPRI PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT)” WHEREAS, the City of Anna, Texas (the “City”) intends to issue its City of Anna, Texas Special Assessment Revenue Bonds, Series 2023 (AnaCapri Public Improvement District Improvement Area #1 Project) (the “Bonds”) to finance certain public improvements within the City; WHEREAS, FMSbonds, Inc. (the “Underwriter”), with assistance from its counsel, City Staff, the City’s Bond Counsel, and City’s Financial Advisor, has prepared a Preliminary Limited Offering Memorandum for dissemination to potential purchasers of the Bonds prior to the availability of the final Limited Offering Memorandum for the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF CITY OF ANNA, TEXAS: 1. The Preliminary Limited Offering Memorandum for the Bonds, substantially in the form attached hereto as Exhibit A, is hereby approved with such changes, addenda, supplements or amendments as may be approved by the Finance Director in consultation with the City’s consultants retained by the City to assist in the issuance of the Bonds including Bond Counsel and the Financial Advisor, and the Underwriter is hereby authorized to distribute such document among potential purchasers of the Bonds and other interested persons in connection with the initial marketing and placement of the Bonds; provided that such Preliminary Limited Offering Memorandum shall not be released to the public without verification that the Acquisition and Development Loan (as defined in Exhibit A) has been closed and funded, which verification shall be made in consultation with the City’s consultants retained by the City to assist in the issuance of the Bonds, including Bond Counsel and the City Attorney. 2. Pursuant to Rule 15c2-12 of the United States Securities and Exchange Commission (17 C.F.R. § 240.15c2-12) (“Rule 15c2-12”), the City hereby deems the Preliminary Limited Offering Memorandum to be final as of its date, except for the omission of no more than the following information as permitted by Rule 15c2-12: the offering prices of the Bonds, interest rates for the Bonds, selling compensation of the Underwriter, the aggregate principal amount of the Bonds, the principal amount per maturity of the Bonds, the delivery date for the Bonds, ratings for the Bonds, and the identity of the ultimate purchasers. PASSED AND APPROVED THIS 12th DAY OF SEPTEMBER, 2023. ______________________________ Nate Pike, Mayor ATTEST: City of Anna, Texas ______________________________ (CITY SEAL) Carrie Land, City Secretary City of Anna, Texas EXHIBIT A PRELIMINARY LIMITED OFFERING MEMORANDUM Draft 09.01.2023 NEW ISSUE NOT RATED PRELIMINARY LIMITED OFFERING MEMORANDUM DATED SEPTEMBER 13, 2023 THE BONDS ARE INITIALLY OFFERED ONLY TO “ACCREDITED INVESTORS” (AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933) AND “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933). SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for purposes of federal income taxation under existing law, subject to the matters described under “TAX MATTERS” herein, including the alternative minimum tax on certain corporations. $20,343,000* CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (ANACAPRI PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) Interest to Accrue from Closing Date (defined below) Due: September 15, as shown on the inside cover The City of Anna, Texas, Special Assessment Revenue Bonds, Series 2023 (AnaCapri 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 March 15, 2024, until maturity or earlier redemption. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. No physical delivery of the Bonds will be made to the beneficial owners thereof. For so long as the book-entry only system is maintained, the principal of and interest on the Bonds will be paid from the sources described herein by Regions Bank, as trustee (the “Trustee”), to DTC as the registered owner thereof. See “BOOK-ENTRY ONLY SYSTEM.” The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “PID Act”), an ordinance 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 to provide funds for (i) paying a portion of the costs of the Improvement Area #1 Improvements, (ii) funding a reserve fund for the payment of principal of and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District, and (iv) paying the costs of issuance of the Bonds. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS” and “APPENDIX B – Form of Indenture.” The Bonds, when issued and delivered, will constitute valid and binding special obligations of the City secured by a pledge and lien upon the Trust Estate, consisting primarily of revenue from Assessments levied against assessable properties in Improvement Area #1 of the District in accordance with a Service and Assessment Plan, and other assets comprising the Trust Estate, all to the extent and upon the conditions described herein. The Bonds are not payable from funds raised or to be raised from taxation. See “SECURITY FOR THE BONDS.” The Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described under the subcaption “DESCRIPTION OF THE BONDS – Redemption Provisions.” The Bonds involve a significant degree of risk, are speculative in nature, and are not suitable for all investors. See “BONDHOLDERS’ RISKS” and “SUITABILITY FOR INVESTMENT.” Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds, should consult with their legal and financial advisors before considering a purchase of the Bonds, and should be willing to bear the risks of loss of their investment in the Bonds. The Bonds are not credit enhanced or rated and no application has been made for a rating on the Bonds. THE BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE. SEE “SECURITY FOR THE BONDS.” This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. The Bonds are offered for delivery when, as, and if issued by the City and accepted by FMSbonds, Inc. (the “Underwriter”), subject to, among other things, the approval of the Bonds by the Attorney General of Texas and the receipt of the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See “APPENDIX D – Form of Opinion of Bond Counsel.” Certain legal matters will be passed upon for the City by its counsel, Wolfe, Tidwell & McCoy, LLP, for the Underwriter by its counsel, Orrick, Herrington & Sutcliffe LLP, and for the Developer by its counsel, Coats Rose PC. It is expected that the Bonds will be delivered in book-entry form through the facilities of DTC on or about October 24, 2023 (the “Closing Date”). FMSbonds, Inc.This Preliminary Limited Offering Memorandum and the information contained herein are subject to completion and amendment without notice. Under no circumstances shall this Preliminary Limited Offering Memorandum constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.* Preliminary, subject to change. i MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIP NUMBERS CUSIP Prefix: (a) $20,343,000 CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (ANACAPRI PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 PROJECT) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (c) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c) $ % Term Bonds, Due September 15, 20__, Priced to Yield %; CUSIP Suffix: (a) (b) (c) (a)CUSIP numbers are included solely for the convenience of owners of the Bonds. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. None of the City, the City’s Financial 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. ii CITY OF ANNA, TEXAS CITY COUNCIL Name Place Term Expires (May) Nate Pike Mayor 2024 Kevin Toten Place 1 2024 Pete Cain Place 2 2025 Stan Carver II Place 3 2026 Randy Atchley Place 4, Deputy Mayor Pro Tem 2025 Elden Baker Place 5 2026 Lee Miller Place 6, Mayor Pro Tem 2025 INTERIM CITY MANAGER CITY SECRETARY FINANCE DIRECTOR Ryan Henderson Carrie Land Alan Guard ASSESSMENT CONSULTANT P3Works, LLC FINANCIAL 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: Ryan Henderson Jim Sabonis Andre Ayala Interim City Manager Hilltop Securities Inc. Hilltop Securities Inc. City of Anna, Texas 717 N. Harwood Street 717 N. Harwood Street 120 W. 7th Street Suite 3400 Suite 3400 Anna, Texas 75409 Dallas, Texas 75201 Dallas, Texas 75201 (972) 924-3325 (214) 953-4195 (214) 953-4000 rhenderson@annatexas.gov Jim.Sabonis@hilltopsecurities.com Andre.Ayala@hilltopsecurities.com iii REGIONAL LOCATION MAP OF THE DISTRICT DISTRICT iv AREA LOCATION MAP OF THE DISTRICT DISTRICT v MAP SHOWING BOUNDARIES OF THE DISTRICT, IMPROVEMENT AREA #1 (PHASES #1A, 1B, AND 1C), AND PHASES 2-4 Laguna, Multi-Family, and Commercial and Entertainment Site (not within District) District includes Ferguson Parkway right-of-way vi CONCEPT PLAN OF LAGUNA, MULTI-FAMILY, AND COMMERCIAL AND ENTERTAINMENT SITE 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 MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING MEMORANDUM. viii 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 Contract.........................................3 The Bonds...........................................................3 LIMITATIONS APPLICABLE TO INITIAL PURCHASERS..........................................................4 DESCRIPTION OF THE BONDS............................5 General Description............................................5 Redemption Provisions.......................................5 BOOK-ENTRY ONLY SYSTEM.............................8 SECURITY FOR THE BONDS..............................10 General..............................................................10 Pledged Revenues.............................................11 Collection and Deposit of Assessments............12 Amount of Assessments May be Reduced by TIRZ No. 4 Annual Credit Amount...........................................13 Unconditional Levy of Assessments ................14 Perfected Security Interest................................14 Pledged Revenue Fund.....................................15 Bond Fund ........................................................16 Project Fund......................................................16 Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account) ......................................17 Administrative Fund.........................................19 Defeasance........................................................19 Events of Default..............................................20 Remedies in Event of Default...........................20 Restriction on Owner’s Actions........................21 Application of Revenues and Other Moneys After Event of Default.................22 Investment or Deposit of Funds........................22 Against Encumbrances .....................................22 Additional Obligations......................................23 SOURCES AND USES OF FUNDS*......................24 DEBT SERVICE REQUIREMENTS*....................25 OVERLAPPING TAXES AND DEBT...................26 Homeowners’ Association Dues.......................27 ASSESSMENT PROCEDURES.............................27 General..............................................................27 Assessment Methodology.................................28 Collection and Enforcement of Assessment Amounts.................................29 Assessment Amounts........................................30 Prepayment of Assessments .............................32 Priority of Lien .................................................33 Foreclosure Proceedings...................................33 THE CITY ...............................................................34 Background.......................................................34 City Government ..............................................34 Water and Wastewater......................................34 THE DISTRICT.......................................................35 General..............................................................35 Powers and Authority of the City.....................35 THE IMPROVEMENT AREA #1 IMPROVEMENTS..................................................35 General..............................................................35 Ownership and Maintenance of Improvement Area #1 Improvements; Private Improvements............................................37 THE DEVELOPMENT...........................................37 Development Plan.............................................37 Expected Build-Out and Home Prices in the Development........................................38 Future Improvement Area Bonds .....................39 Development Agreement..................................39 Photographs of Improvement Area #1 and Laguna ................................................41 Zoning/Permitting.............................................42 Education..........................................................42 Environmental...................................................42 Traffic Impact Study.........................................43 Existing Mineral and Groundwater Rights, Easements and Other Third-Party Property Rights......................43 500-Year Flood Zone........................................43 Utilities .............................................................44 THE DEVELOPER AND THE HOMEBUILDER.44 General..............................................................44 Description of the Developer and the Homebuilder..............................................44 Executive Biographies......................................44 Past Performance of Megatel Affiliates............46 Other Laguna Communities..............................47 General Development Financing by Megatel......................................................47 History and Financing of the District ...............47 THE ADMINISTRATOR........................................49 APPRAISAL............................................................50 BONDHOLDERS’ RISKS......................................50 General..............................................................51 Deemed Representations and Acknowledgment by Investors..................51 TIRZ No. 4 Annual Credit Amount and Marketing of the Development..................52 Infectious Disease Outbreak.............................52 Failure or Inability to Complete Proposed Development..............................52 Completion of the Improvement Area #1 Improvements.......................................52 Completion of Homes.......................................53 Absorption Rate................................................53 Assessment Limitations....................................53 Bankruptcy........................................................54 x Direct and Overlapping Indebtedness, Assessments and Taxes .............................54 Depletion of Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account....................55 Hazardous Substances ......................................55 Regulation.........................................................56 Recent Changes in State Law Regarding Public Improvement Districts....................56 Potential Future Changes in State Law Regarding Public Improvement Districts......................................................56 500-Year Flood Plain and Severe Weather Events..........................................56 Exercise of Third-Party Property Rights ..........57 Bondholders’ Remedies and Bankruptcy ................................................57 Judicial Foreclosures ........................................58 No Acceleration................................................59 Limited Secondary Market for the Bonds.........................................................59 No Credit Rating...............................................59 Use of Appraisal...............................................59 Bankruptcy Limitation to Bondholders’ Rights.........................................................59 Management and Ownership............................60 Tax-Exempt Status of the Bonds......................60 General Risks of Real Estate Investment and Development.......................................61 Risks Related to the Current Residential Real Estate Market ....................................61 Risks Related to Current Increase in Costs of Building Materials.......................62 Adverse Developments Affecting the Financial Services Industry .......................62 Competition ......................................................63 Availability of Utilities.....................................63 Dependence Upon Developer and Homebuilder..............................................63 Affiliate Litigation............................................64 TAX MATTERS......................................................66 Opinion.............................................................66 Federal Income Tax Accounting Treatment of Original Issue Discount.....................................................67 Collateral Federal Income Tax Consequences............................................68 State, Local And Foreign Taxes .......................68 Information Reporting and Backup Withholding...............................................68 Future and Proposed Legislation......................69 LEGAL MATTERS.................................................69 Legal Proceedings.............................................69 Legal Opinions..................................................69 Litigation – The City ........................................70 Litigation – The Developer...............................70 SUITABILITY FOR INVESTMENT.....................70 ENFORCEABILITY OF REMEDIES....................70 NO RATING............................................................71 CONTINUING DISCLOSURE...............................71 The City............................................................71 The City’s Compliance with Prior Undertakings..............................................71 The Developer ..................................................71 The Developer’s Compliance with Prior Undertakings..............................................72 UNDERWRITING ..................................................72 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE................................................72 LEGAL INVESTMENT AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS..................72 INVESTMENTS......................................................73 INFORMATION RELATING TO THE TRUSTEE ..................................................................................75 SOURCES OF INFORMATION ............................75 General..............................................................75 Source of Certain Information..........................76 Experts..............................................................76 Updating of Limited Offering Memorandum ............................................76 FORWARD-LOOKING STATEMENTS...............76 AUTHORIZATION AND APPROVAL.................77 Historical Employment in Collin County .......................................................79 Major Employers..............................................79 APPENDIX A General Information Regarding the City and Surrounding Areas APPENDIX B Form of Indenture APPENDIX C Service and Assessment Plan APPENDIX D Form of Opinion of Bond Counsel APPENDIX E-1 Form of Disclosure Agreement of Issuer APPENDIX E-2 Form of Disclosure Agreement of Developer APPENDIX F Development Agreement APPENDIX G Appraisal THIS PAGE IS LEFT BLANK INTENTIONALLY. 1 LIMITED OFFERING MEMORANDUM $20,343,000* CITY OF ANNA, TEXAS, (a municipal corporation of the State of Texas located in Collin County) SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2023 (ANACAPRI 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 $20,343,000* aggregate principal amount of Special Assessment Revenue Bonds, Series 2023 (AnaCapri 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. PROSPECTIVE INVESTORS SHOULD BE AWARE OF CERTAIN RISK FACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE, COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND/OR INTEREST ON THE BONDS. THE BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS. SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS,” “BONDHOLDERS’ RISKS,” AND “SUITABILITY FOR INVESTMENT.” The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local Government Code, as amended (the “PID Act”), an ordinance expected to be adopted by the City Council of the City (the “City Council”) authorizing the issuance of the Bonds (the “Bond Ordinance”), and an Indenture of Trust (the “Indenture”) between the City and Regions Bank, an Alabama state banking corporation with offices in Houston, Texas, as trustee (the “Trustee”). All capitalized terms used in this Limited Offering Memorandum that are not otherwise defined herein shall have the meanings set forth in the Indenture. See “APPENDIX B – Form of Indenture.” The Bonds will be secured by a pledge of and lien upon the Trust Estate, consisting primarily of revenue from Assessments levied against assessable property located within Improvement Area #1 of the District pursuant to a separate ordinance adopted by the City Council on September 13, 2022 (the “Assessment Ordinance”), all to the extent and upon the conditions described in the Indenture. Reference is made to the Indenture for a full statement of the authority for, and the terms and provisions of, the Bonds. Set forth herein are brief descriptions of the City, the District, the Developer, the Administrator, the Assessment Ordinance, the Bond Ordinance, the Service and Assessment Plan, the Development Agreement (defined herein), and the Appraisal (defined herein), together with summaries of terms of the Bonds and the Indenture and certain provisions of the PID Act. All references herein to such documents and the PID Act are qualified in their entirety by reference to such documents or such PID Act and all references to the Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in the Indenture. Copies of these documents may be obtained during the period of the offering of the Bonds from the Underwriter, FMSbonds, Inc., 5 Cowboys Way, Suite 300-25, Frisco, Texas, 75034, Phone: (214) 302-2246. The Form of Indenture appears in APPENDIX B and the Service and Assessment Plan appears in APPENDIX C. The information provided under this caption “INTRODUCTION” is intended to provide a brief overview of the information provided in the other captions herein and is not intended, and should not be considered, fully representative or complete as to the subjects discussed hereunder. * Preliminary, subject to change. 2 PLAN OF FINANCE Overview In October 2021, the City entered into the AnaCapri Development Agreement with AnaCapri Laguna Azure, LLC, a Wyoming limited liability company (the “Developer”), regarding the development of approximately 341 acres of real property (the “Property”) within the corporate limits of the City (the “Development Agreement”). The Development Agreement provides, in part, for the creation by the City of a public improvement district and one or more tax reinvestment zones to include portions of the Property. Pursuant to the Development Agreement, on April 12, 2022, the City created the AnaCapri Public Improvement District (the “District”) to include approximately 284.952 acres of the Property. On December 14, 2021, the City adopted an ordinance (the “TIRZ No. 4 Ordinance”), creating Reinvestment Zone Number Four, City of Anna, Texas (“TIRZ No. 4”), pursuant to Chapter 311 of the Texas Tax Code (the “TIRZ Act”), including all of the real property in the District and certain real property adjacent to the District that is the intended site for the Laguna, the multi-family residential units, and the commercial and entertainment facilities described below. Development Plan The Developer owns all of the Property and intends to develop it in four phases over a period of approximately four years as a master-planned community to include approximately 1,233 single-family residential lots of 40’ and 50’ front footage, approximately 600 multi-family residential units, a minimum of 30,000 square feet of commercial and entertainment space, including a restaurant, catering services, a bowling alley, teen arcade, kids’ indoor playground, adult game area, yoga studio and fitness center (all of such space, the “Entertainment Commercial Complex”), and a laguna with a minimum of 2.3 acres of water surface, at least two sand beaches, rentable cabanas and paddleboards, a swim-up bar, flowrider, water slide, event venue and outdoor stage (collectively, the “Laguna”), and other similar attractions (collectively, the “Development”). See the maps and concept plan for the District and the Development on pages iv-vii. The single-family residential lots will be located within the District. The multi-family units, commercial and entertainment space, and the Laguna will be located on the Property east of Ferguson Parkway between Rosamond Parkway and Improvement Area #1. The boundaries of the District, Improvement Area #1 (Phases 1A, 1B, and 1C), and Phases 2-4 are shown on page v. A conceptual plan of the Laguna is shown on page vi. The Developer began with the construction of the Laguna and certain public improvements benefitting Improvement Area #1 (the “Improvement Area #1 Improvements”). Improvement Area #1 consists of approximately 97.716 acres and 457 single-family residential lots, consisting of 168 40’ lots and 289 50’ lots. Construction of the Improvement Area #1 Improvements began in October 2021. The Improvement Area #1 Improvements in the portion of Improvement Area #1 designated as “Phase 1A,” consisting of 190 lots, are complete. The Improvement Area #1 Improvements in the portion of Improvement Area #1 designated as “Phase 1B,” consisting of 205 lots, and “Phase 1C,” consisting of 62 lots, are expected to be complete in September 2023. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” The costs of the Improvement Area #1 Improvements are expected to total approximately $20,152,720*. As reflected in the Service and Assessment Plan, approximately $18,564,211* of such costs represent the portion of the Improvement Area #1 Improvements that benefit the Assessed Property. The remaining $1,588,509*, representing a portion of the Improvement Area #1 Improvements that benefit property outside of the District, will not be subject to assessment and will be paid by the Developer from proceeds of the Development Loan (defined herein), without reimbursement. As of June 30, 2023, the Developer had spent approximately $16,185,117.95 on costs of the Improvement Area #1 Improvements. See “THE DEVELOPMENT – Development Agreement,” “THE DEVELOPER – History and Financing of the District,” and “APPENDIX C –Service and Assessment Plan.” Costs of the Improvement Area #1 Improvements in the approximate amount of $16,449,502* will be reimbursed to the Developer from proceeds of the Bonds. The remaining costs in the approximate amount of $2,114,709* have been or will be paid by the Developer from proceeds of the Development Loan, without reimbursement. See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 * Preliminary, subject to change. 3 IMPROVEMENTS,” and “THE DEVELOPER AND THE HOMEBUILDER – History and Financing of the District.” The TIRZ No. 4 Ordinance authorizes the use of ad valorem tax increment attributable to the new development within TIRZ No. 4 for project costs under the TIRZ Act, including the Improvement Area #1 Improvements (“Project Costs”), as provided for in the Reinvestment Zone Number Four, City of Anna, Texas, Final Project and Financing Plan (including amendments or supplements thereto, the “TIRZ No. 4 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. 4 Annual Credit Amount.” See also “THE DEVELOPMENT – Development Plan,” “– Development Agreement,” and “BONDHOLDERS’ RISKS – TIRZ NO. 4 Annual Credit Amount and Marketing of the Development.” Following development of the Improvement Area #1 Improvements, the Developer intends to, over an approximately four-year period, undertake the development of public improvements necessary to serve Phases 2-4 of the Development. See “THE DEVELOPMENT – Development Plan.” The boundaries of the District, Improvement Area #1 (Phases 1A, 1B, and 1C), and Phases 2-4 are shown on page v. 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 each of Phases 2-4 of the Development. The estimated costs of the local improvements benefitting each such phase 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 each phase, as applicable. The Developer anticipates that Future Improvement Area Bonds will be issued over a four-year period. See “THE DEVELOPMENT – Future Improvement Area Bonds.” Lot Purchase Contract Improvement Area #1 has been subdivided into 458 lots for single-family residential development (each, a “Lot”). Pursuant to the Real Estate Purchase and Sale Agreement, effective as of August 23, 2022 (the “Lot Purchase Contract”), the Developer is under contract to sell all lots in the District, including all 458 Lots in Improvement Area #1, to Megatel AnaCapri, LLC, a Texas limited liability company (the “Homebuilder”), an affiliate of the Developer. Pursuant to the Lot Purchase Contract, within fifteen (15) days of substantial completion of the Improvement Area #1 Improvements the Homebuilder will be obligated purchase twenty (20) Lots and will be obligated to purchase an additional forty (40) Lots within each one hundred eighty (180) day period thereafter until all Lots are purchased. The Developer has received an earnest money deposit from the Homebuilder equal to $5,000. See “THE DEVELOPMENT – Lot Purchase Contract.” The Homebuilder began purchasing Lots upon substantial completion of the Phase 1A portion of Improvement Area #1. As of September 1, 2023, the Homebuilder had purchased 150 Lots. The Developer expects that the Homebuilder will continue to purchase Lots on an accelerated schedule from that required by the Lot Purchase Contract. The Bonds Proceeds of the Bonds will be used primarily to finance (i) a portion of the costs of the Improvement Area #1 Improvements, (ii) funding a reserve fund for the payment of principal of and interest on the Bonds, (iii) paying a portion of the costs incidental to the organization of the District, and (iv) paying the costs of issuance of the Bonds. To the extent that a portion of the proceeds of the Bonds is allocated for the payment of the costs of issuance of the Bonds and less than all of such amount is used to pay such costs, the excess amount may, at the option of the City, be transferred to the Improvement Area #1 Bond Improvement Account of the Project Fund or to the Principal and Interest Account of the Bond Fund to pay interest on the Bonds. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “APPENDIX B – Form of Indenture” and “SOURCES AND USES OF FUNDS.” Payment of the Bonds is secured by a pledge of and a lien upon the Trust Estate, consisting primarily of Pledged Revenues derived from Assessments to be levied against the assessable parcels or lots within Improvement 4 Area #1 of the District, all to the extent and upon the conditions described herein and in the Indenture. See “SECURITY FOR THE BONDS,” “ASSESSMENT PROCEDURES,” and “APPENDIX B – Form of Indenture.” The Bonds, any Refunding Bonds, and any Future Improvement Area Bonds shall never constitute an indebtedness or general obligation of the City, Collin County, the State of Texas (the “State”), or any other political subdivision of the State, within the meaning of any constitutional provision or statutory limitation whatsoever, but the Bonds are limited and special obligations of the City payable solely from the Trust Estate as provided in the Indenture. Neither the faith and credit nor the taxing power of the City, the State, or any other political subdivision of the State is pledged to the payment of the Bonds. 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. 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 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 5 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. 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 in the inside cover page of this Limited Offering Memorandum. Interest on the Bonds will accrue from their date of delivery to the Underwriter and will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the Bonds will be payable on each March 15 and September 15, commencing March 15, 2024 (each an “Interest Payment Date”), until maturity or prior redemption. Regions Bank is the initial Trustee, Paying Agent, and Registrar for the Bonds. The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $100,000 of principal and any integral multiple of $1,000 in excess thereof (“Authorized Denominations”). Upon initial issuance, the ownership of the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), and purchases of beneficial interests in the Bonds will be made in book-entry only form. See “BOOK-ENTRY ONLY SYSTEM” and “SUITABILITY FOR INVESTMENT.” Redemption Provisions Optional Redemption. The City reserves the right and option to redeem the Bonds, in whole or in part, maturing on or after September 15, 20 , before their respective scheduled maturity dates, in whole or in part, on any date on or after September 15, 20 , such redemption date or dates to be fixed by the City, at the redemption price of par plus accrued and unpaid interest to the date of redemption (the “Redemption Price”). Extraordinary Optional Redemption. The City reserves the right and option to redeem Bonds before their respective scheduled maturity dates, in whole or in part, 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) or any other transfers to the Redemption Fund 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 Assessments” for the definition and description of Prepayments and “APPENDIX B – Form of Indenture.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 6 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__ 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. 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. 7 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. 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. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 8 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 The Depository Trust Company (“DTC”), New York, New York, while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this 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 Financial 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. 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 9 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 Financial Advisor, or the Underwriter take any responsibility for the accuracy thereof. NONE OF THE CITY, THE TRUSTEE, THE PAYING AGENT/REGISTRAR, THE CITY’S FINANCIAL ADVISOR, OR THE UNDERWRITER WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEE WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE DTC DIRECT PARTICIPANTS, THE INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS OF THE BONDS. THE CITY CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, THE DIRECT PARTICIPANTS, THE INDIRECT 10 PARTICIPANTS, OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS PAID TO DTC OR ITS NOMINEE, AS THE REGISTERED OWNER, OR PROVIDE ANY NOTICES TO THE BENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS LIMITED OFFERING MEMORANDUM. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH DTC PARTICIPANTS ARE ON FILE WITH DTC. Use of Certain Terms in Other Sections of this Limited Offering Memorandum. In reading this Limited Offering Memorandum it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Limited Offering Memorandum to registered owners should be read to include the person for which the participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System and (ii) except as described above, notices that are to be given to registered owners under the Indenture will be given only to DTC. SECURITY FOR THE BONDS The following is a summary of certain provisions contained in the Indenture. Reference is made to the Indenture for a full statement of the terms and provisions of the Bonds. Investors must read the entire Indenture to obtain information essential to the making of an informed investment decision. See “APPENDIX B — Form of Indenture.” General THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE. The principal of, premium, if any, and interest on the Bonds are secured by a pledge of and a lien upon the Trust Estate, consisting primarily of Assessment Revenues levied against Assessed Property within Improvement Area #1 of the District and other assets comprising the Trust Estate, all to the extent and upon the conditions described herein and in the Indenture. See APPENDIX B – Form of Indenture. In accordance with the PID Act, the City has caused the preparation of a Service and Assessment Plan in connection with the levy of assessments in the District (including the Assessments), and expects to adopt a final Amended and Restated 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 Assessments, and provides for the allocation of Pledged Revenues for payment of principal of, premium, if any, and interest on the Bonds. The Service and Assessment Plan is reviewed and updated annually for the purpose of determining the annual budget for improvements and the Annual Installments of Assessments due in a given year. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on all current and future landowners within the District, including Improvement Area #1. See “APPENDIX C – Service and Assessment Plan.” 11 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 Assessments upon properties in Improvement Area #1 of the District benefitted thereby. For a description of the assessment methodology and the amounts of Assessments levied in Improvement Area #1 of the District, see “ASSESSMENT PROCEDURES” and “APPENDIX B – 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 0.50% additional interest charged on the Assessments pursuant to Section 372.018 of the PID Act. “Annual Collection Costs” mean the actual or budgeted costs and expenses related to the creation and operation of the District, the issuance and sale of Bonds, and the construction, operation, and maintenance of the Improvement Area #1 Improvements, including, but not limited to, costs and expenses for: (1) the Administrator and City staff; (2) legal counsel, engineers, accountants, financial advisors, and other consultants engaged by the City; (3) calculating, collecting, and maintaining records with respect to Assessments and Annual Installments, including the costs of foreclosure; (4) preparing and maintaining records with respect to Assessment Roll and Annual Service Plan Updates; (5) issuing, paying, and redeeming the Bonds; (6) investing or depositing Assessments and Annual Installments; (7) complying with the Service and Assessment Plan and the PID Act with respect to the issuance and sale of the Bonds, including continuing disclosure requirements; and (8) 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 Installment” means, with respect to each Parcel of Assessed Property, each annual payment of (i) the principal of and interest on the Assessments as shown on the Assessment Roll or in an Annual Service Plan Update, and as shown in Exhibit G-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. “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. “Assessed Property” means the property located in Improvement Area #1 that benefits from the Improvement Area #1 Improvements, and is defined as the “Improvement Area #1 Assessed Property” in the Service and Assessment Plan. “Assessment Revenues” means the revenues received by the City from the collection of Assessments, including Prepayments, Annual Installments, and Foreclosure Proceeds. “Assessment Roll” means the “Improvement Area #1 Assessment Roll,” which document is attached to the Service and Assessment Plan as Exhibit G-1, as updated, modified, or amended from time to time. “Assessments” means an assessment levied against Assessed Property based on the special benefit conferred on such Assessed Property by the Improvement Area #1 Improvements. “Delinquent Collection Costs” mean costs related to the foreclosure on Assessed Property and the costs of collection of delinquent Assessments, delinquent 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 Assessments against any Assessed Property, whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs. 12 “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 Assessments and 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 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 Assessment are not to be considered a Prepayment, but rather are to be treated as the payment of the regularly scheduled Assessment. “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 Assessments levied on the Assessed Property within Improvement Area #1, 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 will covenant in the Indenture that it will take and pursue all actions permissible under Applicable Laws to cause the Assessments to be collected and the liens thereof to be enforced continuously. See “SECURITY FOR THE BONDS – Pledged Revenue Fund.” See also “APPENDIX B – Form of Indenture” and “APPENDIX C – Service and Assessment Plan.” The PID Act provides that the Assessments (including any reassessment, with interest, the expense of collection and reasonable attorney’s fees, if incurred) are a first and prior lien (the “Assessment Lien”) against the property assessed, superior to all other liens and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes and are a personal liability of and charge against the owners of property, regardless of whether the owners are named. Pursuant to the PID Act, the Assessment Lien is effective from the date of the Assessment Ordinance until the Assessments are paid (or otherwise discharged), and is enforceable by the City Council in the same manner that an ad valorem property tax levied against real property may be enforced by the City Council. See “ASSESSMENT PROCEDURES.” The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed after the adoption of the 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 Assessments The Assessments shown on the 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 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. The Assessments assessed to pay debt service on the Bonds, together with interest thereon, are payable in 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 Annual Installment of an 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 first pay debt service requirements attributable to Assessments in the Service and Assessment Plan. Each Annual Installment is payable as provided in the Service and Assessment Plan and the Assessment Ordinance. A record of the Assessments on each parcel, tract, or lot which are to be collected in each year during the term of the Bonds is shown on the Assessment Roll. Sums received from the collection of the Assessments to pay 13 the debt service requirements (including delinquent installments, Foreclosure Proceeds, and penalties) and of the interest thereon shall be deposited into the Bond Pledged Revenue Account of the Pledged Revenue Fund. Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure Proceeds first, to the Reserve Fund to restore any transfers from the Reserve Fund made with respect to the particular assessed property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency and Prepayment Reserve Account Requirement), and second, to the Redemption Fund. See “SECURITY FOR THE BONDS – Pledged Revenue Fund” and “APPENDIX B – Form of Indenture.” The portions of the Annual Installments of Assessments collected to pay Annual Collection Costs and Delinquent Collection Costs shall be deposited in the Administrative Fund and shall not constitute Pledged Revenues. Amount of Assessments May be Reduced by TIRZ No. 4 Annual Credit Amount The TIRZ No. 4 Ordinance authorized the use of a portion of ad valorem tax increment attributable to the new development within TIRZ No. 4 (the “TIRZ Increment”) for Project Costs, as provided for and defined in the TIRZ No. 4 Project Plan, including costs of the Improvement Area #1 Improvements. Pursuant to the Development Agreement and the TIRZ No. 4 Project Plan, the City will agree to contribute a portion of the TIRZ Increment attributable to development within the District (such portion, the “Residential Increment”) into a tax increment fund created by the City (the “TIRZ Fund”) to pay Project Costs within TIRZ No. 4, including the costs of the Improvement Area #1 Improvements and financing costs related thereto. The Residential Increment for each year will equal fifty percent (50%) of the ad valorem taxes collected and received by the City on the Captured Taxable Value (as defined below) of real property in the District, less administration costs related to the portion of TIRZ No. 4 within the District. With respect to Improvement Area #1 of the District, the “Captured Taxable Value” for each year means that year’s taxable assessed value of all taxable real property within Improvement Area #1 of the District less the Tax Increment Base for all taxable real property within Improvement Area #1 of the District. The “Tax Increment Base” for Improvement Area #1 of the District is the total taxable value as of January 1, 2022, of all taxable real property located within Improvement Area #1 of the District, which is equal to $18,649. In the Development Agreement, the City has agreed to use the Residential Increment generated from each parcel or lot within Improvement Area #1 of the District (the “TIRZ No. 4 Annual Credit Amount”) and deposited to the TIRZ Fund to offset a portion of the principal and interest portion of such lot’s Annual Installment of Assessments due the following year, as calculated by the PID Administrator in collaboration with the City, in accordance with the Service and Assessment Plan. The Annual Installment will be calculated by taking into consideration any TIRZ No. 4 Annual Credit Amount applicable to such lot. Under the TIRZ Ordinance and TIRZ Project Plan, the Residential Increment generated by each lot in any given year shall be used to calculate such lot’s TIRZ No. 4 Annual Credit Amount in the following year (i.e., TIRZ Contribution collected in 2023 shall be used to calculate the TIRZ No. 4 Annual Credit Amount applicable to Annual Installments to be collected in 2024). The Residential Increment is 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 Residential Increment is generated only if the appraised value of real property on such lot in any year is greater than the Tax Increment Base for such lot. Any delay or failure of the Developer or the Homebuilder to develop Improvement Area #1 may result in a reduced amount of the Residential Increment being available to credit the Annual Installments. See “ASSESSMENT PROCEDURES – Assessment Amounts – TIRZ Annual Credit Amount” and “APPENDIX C – Service and Assessment Plan.” TIRZ No. 4 will terminate, unless the City elects to extend the term, upon the earlier to occur of (i) December 31, 2057, or (ii) the date that all Project Costs have been paid (whether through the District or TIRZ No. 4). The City expects to contribute the Residential Increment for Improvement Area #1 for the last year in calendar year 2052 and apply it to the TIRZ No. 4 Annual Credit Amount in 2053. 14 THE TIRZ CONTRIBUTION WILL NOT BE PLEDGED TO THE PAYMENT OF THE BONDS. THE TIRZ NO. 4 ANNUAL CREDIT AMOUNT WILL NOT BE APPLIED IN ANY MANNER THAT WOULD AFFECT THE COLLECTION AND CONTINUOUS ENFORCEMENT OF THE ASSESSMENTS COLLECTED FOR THE PAYMENT OF DEBT SERVICE ON THE BONDS AND ANNUAL COLLECTION COSTS AND THE FUNDING OF THE ADDITIONAL INTEREST RESERVE REQUIREMENT, IN THE MANNER AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS. SUCH TIRZ NO. 4 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 2024 AND MAY BE LATER. Unconditional Levy of Assessments The City will impose Assessments on the property within Improvement Area #1 of the District to pay the principal of and interest on the Bonds scheduled for payment from Pledged Revenues as described in the Indenture and in the Service and Assessment Plan and coming due during each Fiscal Year. The Assessments are effective on the date of, and strictly in accordance with the terms of, the Assessment Ordinance. Each Assessment may be paid in full or in part at any time, or in periodic Annual Installments over a period of time equal to the term of the Bonds, which installments shall include interest on the Assessments. Pursuant to the Assessment Ordinance, interest on the Assessments for each lot within Improvement Area #1 of the District began to accrue on the date specified in the Service and Assessment Plan and, prior to issuance of the Bonds, is calculated at a rate specified in the Assessment Ordinance. After issuance of the Bonds, interest on the Assessments for each lot within Improvement Area #1 of the District will accrue at a rate specified in the Assessment Ordinance, but may not exceed the interest rate on the Bonds plus the 0.50% additional interest charged on Assessments pursuant to Section 372.018 of the Act (“Additional Interest”). Such interest rates may be adjusted as described in the Service and Assessment Plan. Each Annual Installment, including the interest on the unpaid amount of an Assessment, shall be calculated annually and shall be due on October 1 of each year. Each Annual Installment together with interest thereon shall be delinquent if not paid prior to February 1 of the following year. As authorized by Section 372.018(b) of the PID Act, the City will levy, assess, and will continue to collect, each year while the Bonds are Outstanding and unpaid, a portion of each Annual Installment to pay the annual costs incurred by the City in the administration and operation of the District. The portion of each Annual Installment used to pay such annual costs shall remain in effect from year to year until all Bonds are finally paid or until the City adjusts the amount of the levy after an annual review in any year pursuant to Section 372.013 of the PID Act. The assessments to pay Annual Collection Costs shall be due in the manner set forth in the Assessment Ordinance on October 1 of each year and shall be delinquent if not paid by February 1 of the following year. Such amounts to pay Annual Collection Costs do not secure repayment of the Bonds. There is no discount for the early payment of Assessments. Assessments, together with interest, penalties, and expense of collection and reasonable attorneys’ fees, as permitted by the Texas Tax Code, shall be a first and prior lien against the property assessed, superior to all other liens and claims, except liens or claims for State, county, school district, or municipality ad valorem taxes and shall be a personal liability of and charge against the owner of the property regardless of whether the owners are named, and runs with the land. The lien for Assessments and penalties and interest began on the effective date of the Assessment Ordinance and continues until the Assessments are paid or until all Bonds are finally paid. Failure to pay an Annual Installment when due will not accelerate the payment of the remaining Annual Installments of the Assessments and such remaining Annual Installments (including interest) shall continue to be due and payable at the same time and in the same amount and manner as if such default had not occurred. Perfected Security Interest The lien on and pledge of the Pledged Revenues to secure the Bonds shall be valid and binding and fully perfected from and after the Closing Date, without physical delivery or transfer of control of the Pledged Revenues, 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 Pledged Revenues granted by the City under the 15 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 Pledged Revenues 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 Assessments and Annual Installments, other than the portion of the Assessments and 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 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, 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 Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency & Prepayment Reserve Requirement), and second, to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture. 16 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 of the Bond Fund and transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments) and interest then due and payable on the Bonds. If amounts in the Principal and Interest Account are insufficient for the purposes set forth 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. 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 Improvement Area #1 Improvements shall be made by the Trustee upon receipt by the Trustee of a properly executed and completed Certificate for Payment. The funds from the Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in accordance with a Certificate for Payment for Improvement Area #1 Improvements as described in the Reimbursement 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 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 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 Certificate 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. 17 The aggregate amount of funds that the Trustee may disburse from the Improvement Area #1 Bond Improvement Account shall not exceed $13,101,549.34* (the “Authorized Amount”) except and until a Release Condition (defined below) has been satisfied. The Trustee may make disbursements from the Improvement Area #1 Bond Improvement Account that exceed the Authorized Amount only when the Developer provides written certification to the Trustee and the City in a Certificate for Payment that a Release Condition has been satisfied. The first Certificate for Payment that requests funds in excess of the Authorized Amount from the Improvement Area #1 Bond Improvement Account after satisfaction of a Release Condition shall be submitted to the City, the City’s financial advisor, Bond Counsel, and the Administrator for review and confirmation, and upon confirmation that such Release Condition has been satisfied, such Certificate for Payment shall be forwarded to the Trustee by the Administrator. Money may be disbursed from the Improvement Area #1 Bond Improvement Account in excess of the Authorized Amount only if the City has issued a certificate of occupancy for at least 100 homes within the Improvement Area #1 (each a “Release Condition”). The City may not approve a Certificate for Payment for payment from the Improvement Area #1 Bond Improvement Account for any amounts that exceed the Authorized Amount until at least one of the Release Conditions have been satisfied. 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 cost 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 October 10, 2028, 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. Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account) Pursuant to the Indenture, a Reserve Account will be created within the Reserve Fund, held by the Trustee for the benefit of the Bonds, and initially funded with proceeds of the Bonds in the amount of the Reserve Account Requirement. Pursuant to the Indenture, the “Reserve Account Requirement” for the Bonds shall be the least of (i) Maximum Annual Debt Service on the Bonds as of their date of issuance, (ii) 125% of average Annual Debt Service on the Bonds as of their date of issuance, and (iii) 10% of the proceeds of the Bonds, however, that such amount shall be reduced by the amount of any transfers made to the Redemption Fund as a result of Prepayments; and provided further that as a result of (1) an optional redemption or (2) an extraordinary optional redemption, the Reserve Account Requirement shall be reduced by a percentage equal to the pro rata principal amount of Bonds redeemed by such redemption divided by the total principal amount of the Outstanding Bonds prior to such redemption. As of the date of issuance of the Bonds, the Reserve Account Requirement is $*, which is an amount equal to the [Maximum Annual Debt Service] on the Bonds as of their date of issuance. The City will agree 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, 2024, 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 Annual Installments as shown on the Assessment Roll in the Service and Assessment Plan) unless and until it receives a City Certificate directing that a different amount be used. Whenever * Preliminary, subject to change. 18 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 5.5% 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 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, 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 19 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 has created 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 Assessments and 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 – Service and Assessment Plan.” THE ADMINISTRATIVE FUND IS NOT PART OF THE TRUST ESTATE AND IS NOT SECURITY FOR THE BONDS. Defeasance Any Outstanding Bonds shall, prior to the Stated Maturity or redemption date thereof, be deemed to have been paid and no longer Outstanding within the meaning of the Indenture (a “Defeased Debt”), when payment of the principal of, premium, if any, on such Defeased Debt, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), either (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 defeasance, 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 20 body of the City adopts or approves the proceedings authorizing the defeasance, 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 will 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 Assessments, including the prosecution of foreclosure proceedings; 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 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 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 21 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, 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 sixty (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. 22 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. 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 issued to refund all or a portion of the 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. 23 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. Additional Obligations 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, or any portion thereof. Other than Refunding Bonds issued to refund all or a portion of the Bonds, the City will not create or voluntarily permit to be created any debt, lien, or charge on the Trust Estate, 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 this Indenture or the priority thereof might or could be lost or impaired. 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. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 24 SOURCES AND USES OF FUNDS* The table that follows summarizes the expected sources and uses of proceeds of the Bonds: Sources of Funds: Principal Amount Total Sources Uses of Funds: Deposit to Improvement Area #1 Bond Improvement Account of the Project Fund Deposit to Costs of Issuance Account of the Project Fund Deposit to Reserve Account of the Reserve Fund Deposit to Administrative Fund Underwriter’s Discount (1) Total Uses (1)Includes Underwriter’s Counsel’s fee. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * To be completed upon pricing of the Bonds. 25 DEBT SERVICE REQUIREMENTS* The following table sets forth the debt service requirements for the Bonds: Year Ending (September 30)Principal Interest Total 2024 2025 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 Total THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * To be completed upon pricing of the Bonds. 26 OVERLAPPING TAXES AND DEBT 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 Assessments. In addition to the City, Collin County, Texas, the Collin County Community College District, and the Anna Independent School District may each levy ad valorem taxes upon land in Improvement 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 compares the overlapping ad valorem tax rates currently levied on property located in Improvement Area #1 of the District with and without application of the TIRZ No. 4 2022 Annual Credit Amount. Taxing Entity Tax Year 2022 Ad Valorem Tax Rate (1) Tax Year 2022 Ad Valorem Tax Rate (1) The City $0.539750 $0.539750 Collin County, Texas 0.152443 0.152443 Collin County Community College District 0.081220 0.081220 Anna Independent School District 1.442900 1.442900 Total Existing Tax Rate $2.216313 $2.216313 Estimated Average Annual Installment of Assessments in Improvement Area #1 as a tax rate equivalent (2) $0.872491 $0.872491 TIRZ No. 4 Maximum Annual Credit Amount applicable to Annual Installment of Assessment as a tax rate equivalent ( –)($0.269875)(3) Estimated Net Average Annual Installments of Assessments in Improvement Area #1 as a tax rate equivalent $0.872591 $0.602616(3) Estimated Total Tax Rate and Average Annual Installment in Improvement Area #1 of the District as a tax rate equivalent (2) $3.088904 $2.818929(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 – Service and Assessment Plan. Assumes completion of homes at values estimated by the Developer. See “THE DEVELOPMENT – Expected Build-Out and Home Prices in the Development.” (3)The City has agreed to contribute the Residential Increment generated from each lot within Improvement Area #1, in an amount not to exceed 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 Annual Installment of Assessments due the following year. Derived from information in the Service and Assessment Plan. See “ASSESSMENT PROCEDURES – Improvement Area #1 Assessment Amounts – TIRZ No. 4 Annual Credit Amount.” Sources: Collin Central Appraisal District, the City, and the Administrator. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 27 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 property within Improvement Area #1 of the District, as of September 1, 2023, and City debt secured by the Assessments: Taxing or Assessing Entity Gross Outstanding Debt as of September 1, 2023 Estimated Percentage Applicable (1) Direct and Estimated Overlapping Debt (1) The City (Assessments - The Bonds) $20,343,000*100.000%$20,343,000* The City (Ad Valorem Taxes)163,557,000 1.090 1,790,515 Collin County, Texas 721,825,000 0.020 114,514 Collin County Community College District 480,350,000 0.020 85,029 Anna Independent School District 270,997,991 1.060 2,872,418 TOTAL $1,657,072,991 $25,205,479 * Preliminary, subject to change. (1)Based on the “As Complete” Appraisal for Improvement Area #1 of the District and the Tax Year 2023 Net Taxable Assessed Valuations for the taxing entities. See “APPRAISAL.” Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas 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. 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. Beginning in 2023, Improvement Area #1 will no longer be subject to an agricultural valuation. The Developer expects to receive a change in use letter from Collin Central Appraisal District in 2023 for rollback taxes due by January 31, 2024. Homeowners’ Association Dues In addition to the Assessments described above, the Developer anticipates that each Lot owner in Improvement Area #1 of the District will pay a property owner’s association fee to a homeowner’s association formed by the Developer (the “HOA”) in the approximate amount of $1,350 annually. ASSESSMENT PROCEDURES 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 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 Assessments to pay the cost therefor. The City has caused the 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 Assessment against each lot or parcel of land, and the number of Annual Installments in which the Assessment is divided. The Assessment Roll was filed with the City Secretary and made available for public inspection. Statutory notice was given to the owners of the property to be assessed and a public hearing was conducted 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 Assessments. The City levied the Assessments and adopted the Assessment Ordinance on September 13, 2022. After adoption of the Assessment Ordinance and recordation thereof in the real property records of Collin 28 County, the Assessments became legal, valid, and binding liens upon the property against which the Assessments were made. Under the PID Act, the Actual Costs of the Improvement Area #1 Improvements may be assessed by the City against the assessable property in Improvement Area #1 of the District so long as the special benefit conferred upon the Assessed Property by the Improvement Area #1 Improvements equals or exceeds the 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 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 – Service and Assessment Plan.” Assessment Methodology The Service and Assessment Plan describes the special benefit to be received by each parcel of assessable property as a result of the Improvement Area #1 Improvements, provides the basis and justification for the determination that such special benefit exceeds the Assessments being levied, and establishes the methodology by which the City allocates the special benefit of the Improvement Area #1 Improvements to parcels in a manner that results in equal shares of costs being apportioned to parcels similarly benefited. As described in the Service and Assessment Plan, a portion of the costs of the Improvement 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 associated with the Improvement Area #1 Improvements will be allocated to the Assessed Property by spreading the entire Assessment across all Assessed Property within Improvement Area #1 of the District based on the ratio of Estimated Buildout Value (as defined in the Service and Assessment Plan) of each Lot Type in Improvement Area #1 to the Estimated Buildout Value of all Assessed Property within Improvement Area #1. The following table provides additional analysis with respect to assessment methodology, including the value to Assessment burden ratio per Lot Type, equivalent tax rate per Lot Type, and leverage per Lot Type related to the Assessments applicable to Improvement Area #1. The information in the tables was obtained from and calculated using information provided in the Service and Assessment Plan. See “APPENDIX C – Service and Assessment Plan.” Lien to Value Analysis, Assessment Allocation, Equivalent Tax Rate, and Leverage per Lot Type in Improvement Area #1* Lot Type Planned No. of Lots Estimated Finished Value per Lot Type (1) Average Estimated Buildout Value per Lot Type (2) Assessment per Lot Type (3) Average Annual Installment of Assessment per Lot Type (3) Tax Rate Equivalent of Average Annual Installment of Assessment per Lot Type (3) Ratio of Estimated Finished Value per Lot Type to Assessment (1), (3) Ratio of Average Estimated Buildout Value per Lot Type to Assessment (3) 40’174 $78,000 $430,000 $41,465.16 $3,751.71 $0.872491 1.76 : 1 10.37 : 1 50’284 $92,500 $480,000 $46,286.69 $4,187.96 $0.872491 1.76 : 1 10.37 : 1 * Preliminary, subject to change. (1) Based on Appraisal. See “APPRAISAL.” (2) Provided by Developer. (3) Per $100 of home value. Source: P3Works, LLC and information presented in the Service and Assessment Plan For further explanation of the Assessment methodology, see “APPENDIX C – Service and Assessment Plan.” 29 The City has determined that the foregoing method of allocation will result in the imposition of equal shares of the Assessments on parcels similarly situated within Improvement Area #1 of the District. The Assessments and interest thereon are expected to be paid in Annual Installments as described above. The determination by the City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on the Developer and all future owners and developers within the District. See “APPENDIX C – Service and Assessment Plan.” Collection and Enforcement of Assessment Amounts Under the PID Act, the Annual Installments may be collected in the same manner and at the same time as ad valorem taxes of the City. The Assessments may be enforced by the City in the same manner that an ad valorem tax lien against real property is enforced. Delinquent installments of the Assessments incur interest, penalties, and attorney’s fees in the same manner as delinquent ad valorem taxes. Under the PID Act, the Assessment Lien is a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims for State, county, school district, or municipality ad valorem taxes. See “BONDHOLDERS’ RISKS – Assessment Limitations.” In the Indenture, the City covenants to collect, or cause to be collected, 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 Annual Installments. Each Annual Service Plan Update shall include an updated Assessment Roll and a calculation of the Annual Installment for each Parcel. Annual Collection Costs shall be allocated among all Parcels in proportion to the amount of the Annual Installments for the Parcels. In the Indenture, the City covenants, agrees, and warrants that, for so long as any Bonds are Outstanding it will take and pursue all actions permissible under Applicable Laws to cause the Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and, to the extent permitted by Applicable Laws, to cause no reduction, abatement, or exemption in the Assessments. To the extent permitted by law, notice of the Annual Installments will be sent by, or on behalf of the City, to the affected property owners on the same statement or such other mechanism that is used by the City, so that such Annual Installments are collected simultaneously with ad valorem taxes and shall be subject to the same penalties, procedures, and foreclosure sale in case of delinquencies as are provided for ad valorem taxes of the City. The City will determine or cause to be determined, no later than February 15 of each year, whether or not any Annual Installment is delinquent and, if such delinquencies exist, the City will order and cause to be commenced as soon as practicable any and all appropriate and legally permissible actions to obtain such Annual Installment, and any delinquent charges and interest thereon, including diligently prosecuting an action in district court to foreclose the currently delinquent Annual Installment. Notwithstanding the foregoing, the City shall not be required under any circumstances to purchase or make payment for the purchase of the delinquent Assessment or the corresponding Assessed Property. The City will implement the basic timeline and procedures for Assessment collections and pursuit of delinquencies set forth in Exhibit C to the Continuing Disclosure Agreement of Issuer set forth in APPENDIX E-1 and to comply therewith to the extent that the City reasonably determines that such compliance is the most appropriate timeline and procedures for enforcing the payment of delinquent Assessments. The City shall not be required under any circumstances to expend any funds for Delinquent Collection Costs in connection with its covenants and agreements under the Indenture or otherwise other than funds on deposit in the Administrative Fund. 30 Annual Installments will be paid to the City or its agent. Annual Installments are due on October 1 of each year, and become delinquent on February 1 of the following year. In the event Assessments are not timely paid, there are penalties and interest as set forth below: Date Payment Received Cumulative Penalty Cumulative Interest Total February 6%1%7% March 7%2%9% April 8%3%11% May 9%4%13% June 10%5%15% July 12%6%18% After July, the penalty remains at 12%, and interest accrues at the rate of 1% each month. In addition, if an account is delinquent in July, a 20% attorney’s collection fee may be added to the total penalty and interest charge. In general, property subject to lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. An automatic stay by creditors or other entities, including governmental units, could prevent governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In most cases, post-petition Assessments are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. Assessment Amounts Assessment Amounts. The maximum amounts of the Assessments will be established by the methodology described in the Service and Assessment Plan. The Assessment Roll sets forth for each year the Annual Installment for each Assessed Property consisting of the annual payment allocable to the Bonds and the Improvement Area #1 Improvements for each Assessed Property, which amount includes (i) the Additional Interest and (ii) the annual payment allocable to Annual Collection Costs. The Annual Installments for the Assessments may not exceed the amounts shown on the Assessment Roll. The Assessments will be levied against the parcels comprising the Assessed Property as indicated on the Assessment Roll. See “APPENDIX C – Service and Assessment Plan” and “APPENDIX G – Reimbursement Agreement.” The Annual Installments shown on the 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 a refunding of the Bonds, the Prepayment of the Assessments, or the redemption of the Bonds, then there would be a corresponding reduction in the Assessments and the Annual Installments. See “APPENDIX C – Service and Assessment Plan.” In such case, the reduced Assessment and Annual Installment, as shown on the Assessment Roll for Improvement Area #1, shall be reflected in the next Annual Service Plan Update and approved by City Council. Method of Apportionment of Assessments. For purposes of the Service and Assessment Plan, the City Council has determined that the Assessments shall be initially allocated to the Parcels consisting of the Assessed Property based on the ratio of the Estimated Buildout Value of each Parcel in Improvement 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 Assessed Property prior to the recording of a subdivision plat, the Administrator shall reallocate the Assessment for the Assessed Property prior to the division among the newly divided Assessed Properties according to the following formula: A = B x (C ÷ D) 31 Where the terms have the following meanings: A = the Assessment for the newly divided Assessed Property B = the Assessment for the Assessed Property prior to division C = the Estimated Buildout Value of the newly divided Assessed Property D = the sum of the Estimated Buildout Value for all of the newly divided Assessed Properties The calculation of the Assessment of an Assessed Property shall be performed by the Administrator and shall be based on the Estimated Buildout Value of that Assessed Property, as relying on information from homebuilders, market studies, appraisals, official public records of the County, and any other relevant information regarding the Assessed Property. The calculation as confirmed by the City Council shall be conclusive and binding. The sum of the Assessments for all newly divided Assessed Properties shall equal the Assessment for the Assessed Property prior to subdivision. The calculation shall be made separately for each newly divided Assessed Property. The reallocation of an Assessment for an Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation shall be reflected in the next Annual Service Plan Update and approved by the City Council. Upon Subdivision by a Recorded Subdivision Plat. Upon the subdivision of any Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the Assessment for the Assessed Property prior to the subdivision among the new subdivided Lots based on Estimated Buildout Value according to the following formula: A = [B x (C ÷ D)]/E Where the terms have the following meanings: A = the Assessment for the newly subdivided Lot B = the Assessment for the Parcel prior to subdivision C = the sum of the Estimated Buildout Value of all newly subdivided Lots of the same Lot Type D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots excluding Non-Benefitted Property E= the number of newly subdivided Lots of the same Lot Type Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated Buildout Value for each Lot to be created after recording the subdivision plat as of the date the subdivision plat is anticipated to be recorded. The calculation of the Assessment for a Lot shall be performed by the Administrator and confirmed by the City Council based on Estimated Buildout Value information provided by the Developer, homebuilders, third party consultants, and/or the official public records of the County regarding the Lot. The calculation as confirmed by the City Council shall be conclusive and binding. The sum of the Assessments for all newly subdivided Lots shall not exceed the Assessment for the portion of the Assessed Property subdivided prior to subdivision. The calculation shall be made separately for each newly subdivided Assessed Property. The reallocation of an Assessment for an 32 Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation pursuant to this section shall be reflected in the next Annual Service Plan Update and approved by the City Council. Upon Consolidation. If two or more Lots or Parcels are consolidated into a single Parcel or Lot, the Administrator shall allocate the Assessments against the Lots or Parcels before the consolidation to the consolidated Lot or Parcel, which allocation shall be reflected in the next Annual Service Plan Update and approved by the City Council. The Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot Type and compliance may require a mandatory prepayment of Assessments. 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 currently calculated at $41,465.16* for the 40’ lots, and $46,286.69* for the 50’ lots. See “APPENDIX C –Service and Assessment Plan.” Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not result in the Assessment per Lot for any Lot Type exceeding the Maximum Assessment. If the Administrator determines that the resulting Assessment per Lot for any Lot Type will exceed the Maximum Assessment, then (i) the Assessment applicable to each Lot Type shall each be reduced to the Maximum Assessment, and (ii) the person or entity filing the plat shall pay, as a mandatory prepayment of the Assessment, to the City the amount the Assessment was reduced, plus Prepayment Costs and Delinquent Collection Costs, prior to the City approving the final plat. In addition, if the Assessed Property is transferred to a person or entity that is exempt from payment of the Assessment, the owner transferring the Assessed Property shall pay to the City the full amount of the Assessment, plus Prepayment Costs and Delinquent Collection Costs, prior to the transfer. If the owner of the Assessed Property causes the Assessed Property to become Non-Benefited Property, the owner causing the change in status shall pay to the City the full amount of the Assessment, plus Prepayment Costs and Delinquent Collection Costs, prior to the change in status. For further information about apportionment of the Assessments, See “APPENDIX B – Form of Service and Assessment Plan.” TIRZ No. 4 Annual Credit Amount. Pursuant to the Service and Assessment Plan, and the TIRZ No. 4 Ordinance, the City agreed to use the Residential Increment generated from each Assessed Property to offset a portion of such Parcel’s Assessment related to the Improvement Area #1 Improvements. The Annual Installment of the Assessments for each Parcel within Improvement Area #1 will be calculated by taking into consideration any TIRZ No. 4 Annual Credit Amount applicable to such Parcel, as described under “SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 4 Annual Credit Amount” and in “APPENDIX C – Service and Assessment Plan.” The TIRZ Contribution 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 Contribution is generated only if the appraised value of real property on such Parcel in any year is greater than the TIRZ Base Value. See “APPENDIX C – Service and Assessment Plan.” TIRZ NO. 4 REVENUES ARE NOT PLEDGED AS SECURITY FOR THE BONDS. Prepayment of Assessments Pursuant to the PID Act and the Indenture, the owner of any Assessed Property may voluntarily prepay (a “Prepayment”), at any time, all or part of an Assessment levied against such owner’s Assessed Property, together with accrued interest to the date of payment. Upon receipt of such Prepayment, such amounts will be applied towards the redemption or payment of the Bonds. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be treated as payment of regularly scheduled Assessments. * Preliminary, subject to change. 33 Priority of Lien The Assessments or any reassessment, the expense of collection, and reasonable attorney’s fees, if incurred, constitute a first and prior lien against the property assessed, superior to all other liens and claims except liens or claims for the State, county, school district, or municipality ad valorem taxes, and are a personal liability of and charge against the owners of the property regardless of whether the owners are named. The lien is effective from the date of the Assessment Ordinance until the Assessment is paid, and may be enforced by the City in the same manner as an ad valorem tax levied against real property may be enforced by the City. The owner of any property assessed may pay the entire Assessment levied against any lot or parcel, together with accrued interest to the date of payment, at any time. Foreclosure Proceedings In the event of delinquency in the payment of any Annual Installment, except for unpaid Assessments on homestead property (unless the lien associated with the assessment attached prior to the date the property became a homestead), the City is empowered to order institution of an action in state district court to foreclose the lien of such delinquent Annual Installment. In such action the real property subject to the delinquent Annual Installments may be sold at judicial foreclosure sale for the amount of such delinquent Annual Installments, plus penalties and interest. Any sale of property for nonpayment of an installment or installments of an Assessment will be subject to the lien established for remaining unpaid installments of the Assessment against such property and such property may again be sold at a judicial foreclosure sale if the purchaser thereof fails to make timely payment of the non- delinquent installments of the Assessments against such property as they become due and payable. Judicial foreclosure proceedings are not mandatory. In the event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and in such event there could be an additional delay in payment of the principal of and interest on Bonds or such payment may not be made in full. The City is not required under any circumstance to purchase the property or to pay the delinquent Assessment on the corresponding Assessed Parcel. In the Indenture, the City covenants to take and pursue all actions permissible under Applicable Laws to cause the Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement, or exemption in the Assessments, provided that the City is not required to expend any funds for collection and enforcement of Assessments other than funds on deposit in the Administrative Fund. Pursuant to the Indenture, Foreclosure Proceeds (excluding Delinquent Collection Costs) constitute Pledged Revenues to be deposited into the Pledged Revenue Fund upon receipt by the City and distributed in accordance with the Indenture. See “APPENDIX B – Form of Indenture.” See also “APPENDIX E-1 – Form of Disclosure Agreement of Issuer” for a description of the expected timing of certain events with respect to collection of the delinquent Assessments. In the Indenture, the City creates the Delinquency and Prepayment Reserve Account under the Reserve Fund and will fund such account as provided in the Indenture. The City will not be obligated to fund foreclosure proceedings out of any funds other than in the Administrative Fund. If funds in the Administrative Fund are insufficient to pay foreclosure costs, the owners of the Bonds may be required to pay amounts necessary to continue foreclosure proceedings. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account),” “APPENDIX B – Form of Indenture” and “APPENDIX C – Service and Assessment Plan.” THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 34 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, while the current estimated population is 23,558. City Government The City is a political subdivision and municipal corporation of the State, duly organized and existing under the laws of the State, including the City’s Home Rule Charter. The City was incorporated in 1913, and first adopted its Home Rule Charter on May 7, 2005. The City operates under a Council/Manager form of government with a City Council comprised of the Mayor and six Councilmembers elected for staggered three-year terms. The City Manager is the Chief Administrative Officer for the City. The current members of the City Council and principal administrators of the City are listed on page ii hereof. For more information regarding the City and surrounding areas, see “APPENDIX A – General Information Regarding the City and Surrounding Areas.” Water and Wastewater The City will provide both water and wastewater service to the District. The City is currently served by ground water, through seven water wells located at five different sites. These seven wells produce a total of 1,520 gallons per minute. The City has recently completed the construction of two additional wells, which came online at the end of September 2022, thereby increasing the City’s total production to approximately 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. The City recently partnered with the Greater Texoma Utility Authority (“GTUA”) and three neighboring small cities to bring a large surface water transmission line through the City. The GTUA line provides a connection to the North Texas Municipal Water District’s (“NTMWD”) water distribution system, providing the City with access to treated surface water. This surface water line is part of the City’s long term water supply plan. Currently the City has a maximum allowable take of 5,040 gpm from the GTUA connection, providing the City with a maximum peak flow of treated water supply of 6,706 gpm. Both GTUA and the City are working on capital projects which will increase the maximum treated water supply and storage. The City’s sanitary sewer system consists of seven lift stations and one wastewater treatment facility at the John R. Geren (Slayter Creek) Wastewater Treatment Plant. 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 City’s currently wastewater treatment facility 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. 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 City’s wastewater treatment plant is currently near capacity. The transmission lines still have significant capacity remaining. 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. 35 In September 2022, the City issued approximately $65 million in general obligation debt, which together with approximately $17 million in impact fees will be used to fund construction of a new Hurricane Creek Regional Wastewater Treatment Plant. This new plant will significantly expand the City’s ability to collect and treat wastewater as required for new development west of US 75. Initially, the plant will have a capacity to treat 4 million gallons per day of wastewater, with plans to gradually expand the plant’s capacity up to 16 million gallons per day. The City will utilize the new plant to treat sewage for its own residents, as well as provide wholesale sewage treatment for the City of Van Alstyne, the City of Weston, and for various water districts located in the area. Additionally, the City is substantially complete with construction of a new Hurricane Creek sewer transmission main to transport wastewater throughout the new developments along the west side of US 75. 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. 2022-04-1140 of the City adopted on April 12, 2022 (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 of the City 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 certain road, water, sanitary sewer, storm sewer, and site fencing, retaining walls and landscape improvements benefitting Improvement Area #1 of the District comprising 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 – Service and Assessment Plan.” 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 Reimbursement Agreement and the Indenture, the City will pay or reimburse the Developer for a portion of the Actual Costs of the Improvement Area #1 Improvements from proceeds of the Bonds. The Developer will submit reimbursement requests on a monthly basis for costs actually incurred in developing and constructing the Improvement Area #1 Improvements and be reimbursed in accordance with the Reimbursement Agreement and the Indenture. See “THE DEVELOPMENT – Development Plan.” 36 Improvement Area #1 Improvements. The Improvement Area #1 Improvements, a portion of which are being financed with proceeds of the Bonds, include road, water, sanitary sewer, storm sewer, site fencing, retaining walls, landscape improvements, and soft costs benefitting only Improvement Area #1 of the District, as described below. Roadway improvements: Improvements including subgrade stabilization, concrete, and reinforcing steel for roadways, testing, and handicapped ramps. All related earthwork, excavation, erosion control, intersections, and re-vegetation of all disturbed areas within the right-of-way are included. The roadway improvements will provide benefit to each Lot within Improvement Area #1. Water systems: Improvements including trench excavation and embedment, trench safety, PVC piping, manholes, service connections, testing, related earthwork, excavation, erosion control, and all necessary appurtenances required to provide water service to all Lots within Improvement Area #1. Sanitary Sewer: Improvements including trench excavation and embedment, trench safety, PVC piping, ductile iron encasement, boring, manholes, service connections, testing, related earthwork, excavation, erosion control and all necessary appurtenances required to provide sanitary sewer service to all Lots within Improvement Area #1. Storm Sewer: Improvements including earthen channels, swales, curb and drop inlets, RCP piping and boxes, headwalls, concrete flumes, rock rip rap, concrete outfalls, and testing as well as all related earthwork, excavation, erosion control and all necessary appurtenances required to provide storm sewer drainage for all Lots within Improvement Area #1. Site Fencing, Retaining Walls, Landscape: Improvements include all related earthwork, excavation, erosion control, retaining walls, signage, utility infrastructure, drainage infrastructure, lighting, landscaping, irrigation, and re-vegetation of all disturbed areas. Soft Costs: Costs related to designing, constructing, and installing the Improvement Area #1 Improvements, including land planning and design, City fees, engineering, soil testing, survey, construction management, contingency, District formation costs, legal costs, and consultants. The costs of the Improvement Area #1 Improvements are expected to total approximately $20,152,720*. As reflected in the Service and Assessment Plan, approximately $18,564,211* of such costs represent the portion of the Improvement Area #1 Improvements that benefit the Assessed Property. The remaining $1,588,509*, representing a portion of the Improvement Area #1 Improvements that benefit the Non-Assessed Property, will not be subject to assessment and will be paid by the Developer from proceeds of the Development Loan, without reimbursement. As of June 30, 2023, the Developer had spent approximately $16,185,177.95 on costs of the Improvement Area #1 Improvements. See “THE DEVELOPMENT – Development Plan,” “THE DEVELOPER AND THE HOMEBUILDER – History and Financing of the District,” and “APPENDIX C – Service and Assessment Plan.” The following table reflects the total expected costs of the Improvement Area #1 Improvements. Type of Improvement Costs Roadway $6,040,788 Water 1,714,922 Sanitary Sewer 1,464,193 Storm Sewer 5,208,102 Site Fencing, Retaining Walls, Landscaping 1,120,855 Soft Costs 4,603,861 Total $20,152,720 Less Amount Allocable to Non-Assessed Property (1,588,509) Total Costs Assessed $18,564,211 * Preliminary, subject to change. 37 Ownership and Maintenance of Improvement Area #1 Improvements; Private Improvements 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. Private Improvements. In addition to the Improvement Area #1 Improvements, the Developer plans to construct over a period of approximately three and a half years the Entertainment Commercial Complex, the Laguna, and other similar attractions (collectively, the “Private Improvements”) at an approximate cost of $30,000,000. The costs of the Private Improvements and the HOA will be paid entirely by the Developer, without reimbursement by the City, from proceeds of the Development Loan. The Private Improvements will be owned, operated, and maintained by Laguna Azure LLC, a Wyoming limited liability company, an affiliate of the Developer and the Homebuilder. 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 Financial Advisor, and the Underwriter, and none of the City, the City’s Financial Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. Development Plan The Developer owns all of the Property and intends to develop it in four phases over a period of approximately five years as a master-planned community to include approximately 1,233 single-family residential lots of 40’ and 50’ front footage, approximately 600 multi-family residential units, the Entertainment Commercial Complex, the Laguna, and other similar attractions (collectively, the “Development”). See the maps and concept plan for the District and the Development on pages iv-vii. The single-family residential lots will be located within the District. The multi-family units, commercial and entertainment space, and the Laguna will be located on the Property east of Ferguson Parkway between Rosamond Parkway and Improvement Area #1. The boundaries of the District, Improvement Area #1 (Phases 1A, 1B, and 1C), and Phases 2-4 are shown on page v. A conceptual plan of the Laguna is shown on page vi. The Developer began with the construction of the Laguna and the Improvement Area #1 Improvements. Improvement Area #1 consists of approximately 97.716 acres and 457 single-family residential lots. Construction of the Improvement Area #1 Improvements began in October 2021. The Improvement Area #1 Improvements in the portion of Improvement Area #1 designated as “Phase 1A,” consisting of 190 lots, are complete. The Improvement Area #1 Improvements in the portion of Improvement Area #1 designated as “Phase 1B,” consisting of 205 lots, and “Phase 1C,” consisting of 62 lots, are expected to be complete in September 2023. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” Following development of the Improvement Area #1 Improvements, the Developer intends to, over an approximately four-year period, undertake the development of public improvements necessary to serve Phases 2-4 of the Development. See “THE DEVELOPMENT – Development Plan.” The boundaries of the District, Improvement Area #1 (Phases 1A, 1B, and 1C), and Phases 2-4 are shown on page v. 38 Expected Build-Out and Home Prices in the Development The Developer expects to complete the Development in four phases over a five-year period. The following tables reflect the Developer’s expected build-out and absorption schedules for lots in the District. EXPECTED BUILDOUT OF THE DISTRICT Improvement Area/Phase Number of Lots Improvement Actual/Expected Start Date Improvement Actual/Expected Completion Date Expected Final Lot Sale Date (1) 1 458 October 2021 August 2023 September 2023 2 237 September 2022 4Q 2023 January 2024 3 249 2Q 2024 2Q 2025 2Q 2025 4 291 3Q 2025 3Q 2026 3Q 2026 1,235 (1) These dates reflect the Homebuilder’s expected takedown schedule based upon home presales, which is an accelerated timeframe from that required by the Lot Purchase Contract. EXPECTED ABSORPTION OF HOMES IN IMPROVEMENT AREA #1 Lot Size Number of Lots Expected Date of First Sale to Homeowners Expected Date of Final Sale to Homeowners 40’174 August 2023 Q3 2024 50’284 August 2023 Q3 2024 458 ESTIMATED HOME PRICES Improvement Area Lot Size Number of Lots Base Lot Price (1) Average Base Home Price (2) 1 40’174 $78,000 $430,000 50’284 92,500 480,000 458 2 (2)40’91 $78,000 $430,000 50’146 92,500 480,000 237 3 (2)40’127 $78,000 $430,000 50’122 92,500 480,000 249 4 (2)40’146 $78,000 $430,000 50’145 92,500 480,000 291 Total 1,235 (1) Base lot prices based on Appraisal. See “APPRAISAL.” (2) Based on information in the Service and Assessment Plan. See “APPENDIX C – Service and Assessment Plan.” 39 Lot Purchase Contract Improvement Area #1 has been subdivided into 458 Lots for single-family residential development. Pursuant to the Lot Purchase Contract, the Developer is under contract to sell all 1,235 lots in the District, including all 458 lots in Improvement Area #1, to the Homebuilder, an affiliate of the Developer. Pursuant to the Lot Purchase Contract, within fifteen (15) days of substantial completion of the Improvement Area #1 Improvements, the Homebuilder will be obligated purchase twenty (20) Lots and will be obligated to purchase an additional forty (40) Lots within each one hundred eighty (180) day period thereafter until all Lots are purchased. The Developer has received an earnest money deposit from the Homebuilder equal to $5,000. The Homebuilder began purchasing Lots upon substantial completion of the Phase 1A portion of Improvement Area #1. As of September 1, 2023, the Homebuilder has purchased 150 Lots. The Developer expects that the Homebuilder will continue to purchase Lots on an accelerated schedule from that required by the Lot Purchase Contract. Status of Construction of Laguna Excavation and mass grading for the Laguna began in April 2023. Pre-pipe work is complete. The site civil engineering plans and the plat for the Laguna have been approved. The Developer is negotiating contracts with the pipe contractor and the civil engineer. The building permit package for the Laguna and the Entertainment Commercial Complex has been submitted to the City. 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 Phases 2-4 of the Development. The estimated costs of such improvements 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 Phases 2-4, as applicable. The Developer anticipates that Future Improvement Area Bonds will be issued over a five-year period. Development Agreement Pursuant to 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 the Assessments and/or the Bonds. The Development Agreement provides certain requirements to be met for the issuance of the Bonds and any additional bonds issued for the payment of additional Authorized Improvements (defined in the Development Agreement and the PID Act) (collectively, “PID Bonds”), including (i) the total amount of PID Bonds may not exceed $58,000,000, not including refunding bonds; (ii) the final maturity of each series of PID Bonds may not occur later than 30 years from the date of issuance of such PID Bonds; (iii) the maximum equivalent tax rate, including the PID Assessments associated with the PID Bonds and all overlapping taxing jurisdictions, cannot exceed $0.9348 per $100 taxable assessed valuation without prior written consent of the City; and (iv) the ratio of the appraised value of the property being financed to the par amount of the PID Bonds proposed to be issued with respect to such property must be at least 2:1, unless a lower ratio is approved by the City. In the Development Agreement, the City agreed to create the TIRZ No. 4 and dedicate the Residential Increment for a period of up to 30 years from the date of the creation of TIRZ No. 4 to reduce the amount of the Assessments levied on property within TIRZ No. 4 to pay the costs of public improvements allowable under the TIRZ Act. See “SECURITY FOR THE BONDS – Amount of Assessments May be Reduced by TIRZ No. 4 Annual Credit Amount.” In the Development Agreement, the City also agreed to dedicate TIRZ No. 4 Revenues generated on the commercial and multi-family portions of the Property (which are outside of the District) in an amount equal to 70% of the City’s tax rate levied and collected on the captured appraised value of such tracts in each year (the “Commercial Increment”). The City agreed to dedicate the Commercial Increment for a period of up to 30 years 40 from the date of the creation of TIRZ No. 4 to fund the costs of public infrastructure on such tracts and/or costs of the Private Improvements allowable under the TIRZ Act. In addition, the Development Agreement obligates the Developer to [Developer’s Counsel to summarize these bullets and/or other items, as applicable]: •Dedication of 9.4-acre tract to Anna ISD and corresponding credit for park dedication fees; •Fund and construct all water, sanitary sewer, and road improvements required to serve the District not funded by the City pursuant to the Development Agreement; •Construct 2 eastern lanes of Ferguson Parkway in phases from South border of District to Rosamond Parkway; •Enter into 380 Agreement regarding 65/35 split of 1.25% City sales and use tax proceeds on construction materials; •PID Fee of $3,400/residential lot. 50%/lot at closing of PID bonds. 50% total used as Laguna Completion Escrow •CO for Laguna by 4/12/25 (after 2 optional 6-month extensions) or lose Laguna Completion Escrow and TIRZ funding during delay until CO is issued. •Private Improvements, including Laguna, Entertainment Commercial Building, entertainment district, with Laguna + Restaurant + entertainment district to cost at least $25 million •$0.50 per public entry fee into Laguna payable to Anna EDC •Mandatory Prepayment by Developer or owner if within 18 months of levy aggregate buildout TAV or projected home price/Lot Type isn’t at least 93% of that included in SAP In addition, the Development Agreement obligates the City to: •Construct Rosamond Parkway from US 75 to high school by 10/18/22 •Fee credits THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 41 Photographs of Improvement Area #1 and Laguna Improvement Area #1 (Phase 1A) looking North from near the intersection of Ferguson Pkwy and Hackberry Dr View from Northeast corner of Improvement Area #1 (Phase 1B) looking South 42 Laguna site Zoning/Permitting The District is currently zoned as a planned development district pursuant to Ordinance No. 887-2020 adopted by the City Council on December 8, 2020 (the “PDD Ordinance”). The PDD Ordinance allows certain restricted commercial, single-family residential, and single-family residential zero lot line uses and establishes guidelines pertaining to purpose, height, area, setbacks, aesthetics, landscaping, and use. Because the District lies within the city limits of the City, the City’s zoning and subdivision regulations control the aspects of development not specifically set forth in the PDD Ordinance or the Development Agreement. Education Students in the District will attend schools in the Anna Independent School District (“AISD”). AISD serves the City and other portions of Collin County. AISD enrolls over 4,500 students in one high school, a middle school, four elementary schools, and a special programs center. Students in the District are expected to attend Bryant Elementary School (approximately 0.5 miles north of the District), Anna Middle School (approximately 1 mile east of the District), and Anna High School (adjacent to the District). GreatSchools.org currently rates Bryant Elementary School 8 out of 10, Anna Middle School 5 out of 10, and Anna High School 4 out of 10. According to the Texas Education Agency annual school report cards, Bryant Elementary School and Anna Middle School were rated “C”, and Anna High School was rated “B” for the 2021- 2022 school year. (The categories for public school districts and public schools are A, B, C, D or F). Environmental A Phase One Environmental Site Assessments (the “Phase One ESA”) of all 341 acres owned by the Developer, including all real property within the District, was completed on November 15, 2020, by Environmental Property Investigations, Inc. (“EPI”). Based on the information presented in the Phase One ESA, EPI concluded that no recognized environmental conditions existed at the site that would require additional investigation. 43 According to the website for the Texas Parks and Wildlife Department, the whooping crane is a federally recognized endangered species and the rufa red knot, piping plover, and black rail are federally recognized threatened species in Collin County. The Developer is not aware of any endangered or threatened species located on District property. Traffic Impact Study Kelly & Associates (the “Traffic Engineer”) prepared a Technical Memorandum, dated August 16, 2021, regarding its “Traffic Impact Analysis – Proposed AnaCapri Laguna Azure Residential Development in Anna, Texas” (the “Report”). The Report concluded that at buildout, assumed to occur in 2026: •In order to achieve appropriate levels of service at Ferguson Parkway and W. White Parkway, an additional second eastbound and northbound left-turn lane and an additional third eastbound and westbound thru lane would be needed on Ferguson Parkway with a potential mitigation cost to AnaCapri of 36% of the costs. Alternative, mitigation can be achieved if site traffic chooses to access US 75 via Rosamond Parkway; and The Developer is following the Traffic Engineer’s recommendation to verify traffic impact data as the Development progresses and nears buildout to determine where mitigation becomes necessary. Based on City requirements, the Developer [is constructing/will construct] a deceleration lane on Ferguson Parkway northbound at the approach to Rosamond Parkway. Existing Mineral and Groundwater Rights, Easements and Other Third-Party Property Rights Third parties hold title to certain rights applicable to real property within and around the District (the “Mineral Owners”), including reservations of mineral rights and royalty interests and easements (collectively, the “Third-Party Rights”) pursuant to various instruments in the chain of title for various tracts of land within and immediately adjacent to the District. Some of these reservations of mineral rights include a waiver by the Mineral Owners of their right to enter onto the surface of the property to explore, develop, drill, produce or extract minerals within the District. If the waiver is applicable, such Mineral Owners may only develop such mineral interests by means of wells drilled on land outside of the property of the District. The Developer is not aware of any ongoing mineral rights development or exploration on or adjacent to the property within the District. The Developer is not aware of any interest in real property (including mineral rights) owned by the Mineral Owners adjacent to the District. Certain rules and regulations of the Texas Railroad Commission may also 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 above-described Third-Party Rights, or the exercise of such rights or any other third-party 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 the District to pay Assessments, the Developer makes no guarantee as to such expectation. See “BONDHOLDERS’ RISKS – Exercise of Third- Party Property Rights.” 500-Year Flood Zone According to the Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM), Community Panel Number 48085C0155J, effective June 2, 2009, all of the property within Improvement Area #1 of the District lies outside of the 500-year flood plain, referred to as Zone X. See “BONDHOLDERS’ RISKS – 500 Year Flood Plain and Severe Weather Events.” 44 Utilities Water and Wastewater. The City will provide both water and wastewater service to the District. The City’s water distribution system and wastewater collection and treatment system currently have sufficient capacity to provide water and wastewater service to the District. See “THE CITY – Water and Wastewater.” Other Utilities. The Developer expects additional utilities to be provided by: (1) Phone/Data – Nextlink and Grayson County Electric Company (“GCEC”) Telecom; (2) Electric – (GCEC); (3) Cable – Nextlink and GCEC Telecom; and (4) Natural Gas - Atmos Energy. THE DEVELOPER AND THE HOMEBUILDER 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 Financial Advisor, and the Underwriter, and none of the City, the City’s Financial 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 and the Homebuilder The Developer (AnaCapri Laguna Azure LLC) and the Homebuilder (Megatel AnaCapri, LLC) are, directly or indirectly, under the common ownership of the ZI Revocable Trust and the AI Revocable Trust. The ZI Revocable Trust is for the benefit of, among others, Armin Afzalipour, also known as Zach Ipour. Zach Ipour is the trustee of the ZI Revocable Trust. The AI Revocable Trust is for the benefit of, among others, Arash Afzalipour, also known as Aaron Ipour. Aaron Ipour is the trustee of the AI Revocable Trust. Each trust owns, directly or indirectly, a fifty percent (50%) interest in the Developer and the Homebuilder. The Developer was created by the Afzalipour brothers, as trustees under the applicable trusts, for the primary purpose of managing and ultimately conveying property in the District to third parties, as described under the caption “THE DEVELOPMENT.” The Developer is a nominally capitalized limited liability company, the primary assets of which are unsold property within the District and two additional undeveloped tracts in Collin County. See “THE DEVELOPMENT – History and Financing of the District.” The Developer will have no source of additional funds with which to pay Assessments or taxes levied by the City or any other taxing entity other than funds resulting from the sale of property within the District or elsewhere or funds advanced to the Developer by an affiliated party. The Developer has access to additional loans through its affiliate MCI, as defined and described below. The Developer’s ability to make full and timely payments of Assessments or taxes will directly affect the City’s ability to meet its obligation to make payments on the Bonds. See “BONDHOLDERS’ RISKS – Dependence Upon Developer and Homebuilder.” Executive Biographies Armin Afzalipour (Zach Ipour). Zach Ipour is the co-founder of Megatel Homes, LLC (“Megatel”), a full- service developer and builder of single-family homes in Texas and Oklahoma. The company was started by Zach 45 and his brother Aaron in 2006 with the focus on remodeling single-family homes. Driven by their success in this venture, they began building and developing single-family homes and have since grown the company to be one of the largest homebuilders in the Dallas, Texas area. Zach oversees Megatel’s field operations, including the sales and construction divisions of the company. He also plays a vital role in the growth and operation of Megatel’s land acquisition and development division, as well as the expansion of the company’s home-building efforts into other states. Megatel continues to see expansive growth year after year. Since the company’s inception, Megatel has sold upwards of 3,000 homes and has completed over 100 developments. In addition to his role with Megatel, Zach has been co-president of MCI Mortgage, Inc., a residential mortgage company and an affiliate of Megatel since 2013. Arash Afzalipour (Aaron Ipour). Aaron Ipour is the co-founder of Megatel. Aaron is actively responsible for Megatel’s corporate operations, which includes maintaining the company’s production and institutional relationships, as well as managing all financial aspects of the company and its affiliates. Aaron was also instrumental in the development of Megatel’s luxury custom home brand, Oxbridge, which has been prominently featured in both the Dallas area “D” Magazine, and Luxe Interiors + Design Magazine. In addition to his role with Megatel, Aaron has been co-president of MCI Mortgage, Inc., since 2013. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 46 Past Performance of Megatel Affiliates A number of homebuilders in the Megatel family of companies, all of which homebuilder entities are owned 50/50 by the AI Revocable Trust and the ZI Revocable Trust, have been active in the North Texas area for a number of years. According to the Developer, these homebuilders, collectively, have started construction on homes, or had homes under construction, in the following amounts since 2019. Year Homes Started or Under Construction (minimum) 2019 726 2020 959 2021 634 2022 512 According to the Developer, the following table reflects the approximate number of homes started or under construction in the North Texas area by community for the period beginning January 1, 2023: Community City Homes Started or Under Construction (1) AnaCapri (Laguna)Anna 152 Bloomridge McKinney 11 Breezy Hill Rockwall 20 Central Park on Preston Plano 4 Creeks of Legacy Plano 3 Cyprus Villas Plano 1 Founders Park (Townhomes)Euless 16 Gables @ Ohio Frisco 30 Hardin Village McKinney 7 Huntington (Townhomes)Allen 27 Lakeshore Terrace (Townhomes)Flower Mound 1 Manors at Woodbridge Wylie 56 Mercer Crossing Farmers Branch 2 Mercer Windermere (Townhomes)Farmers Branch 14 Middleton (Townhomes)Plano 53 Mitchell Farms Mansfield 1 Normandy (Townhomes)Lewisville 48 Ownsby Farms Celina 15 Parkview Allen (Townhomes)Allen 29 Pleasant Run Estates Lancaster 39 Prairie Commons Plano 1 River Walk @ Central Park Villas Flower Mound 3 Soho Square Dallas 55 University Place Dallas 3 Venetian (Laguna)Weston 117 Wade Settlement Frisco 37 Woodbridge Wylie 43 TOTAL 788 (1) As of June 26, 2023. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 47 Other Laguna Communities Following is a list of other developments with a laguna feature that are being constructed in the greater Dallas area by an affiliate of the Developer and certain projected development/construction information; such information contains current projections and is subject to change. Project Name Location Projected Residential Lots Projected Commercial Square Feet Expected/Actual Completion of Initial Phase AnaCapri Anna, Texas 1,235 30,000 2Q 2023 Bellagio Forney, Texas 1,116 30,000 3Q 2023 Santorini Seagoville, Texas 2,438 55,000 4Q 2023 Soho Square Dallas, Texas 2,500 15,000 2Q 2024 Venetian Celina, Texas 1,500 30,000 3Q 2022 General Development Financing by Megatel As discussed below, the Developer’s source of funds for the purchase of the Property was a loan from MCI Preferred Income Fund II, LLC, a Delaware limited liability company (the “MCI PIF II Fund”). The Sole Member of the MCI PIF II Fund is MCI Holdings, LLC, a Delaware limited liability company (“MCI Holdings”). The MCI PIF II Fund is managed by Megatel Capital Investments, LLC, a Delaware limited liability company (“MCI”). Aaron Ipour and Zach Ipour are the Co-Presidents of MCI Holdings and the Members and Co-Presidents of MCI. See “– Description of the Developer and the Homebuilder.” MCI is the capital markets division of the Megatel group of companies. MCI primarily specializes in providing growth capital to Megatel through affiliated lending programs such as the MCI PIF II Fund. As capital becomes available, it is loaned to borrowers such as the Developer. History and Financing of the District Acquisition Financings. The Developer purchased 111.666 acres within the Development on March 29, 2021. Such purchase was made with proceeds of a loan in the amount of $26,700,000, dated March 29, 2021, from the MCI PIF II Fund (the “Acquisition Loan”). The Developer purchased an 84-acre tract and a 95.444-acre tract in the Development on August 17, 2021, with proceeds the Acquisition Loan. See “– General Development Financing by Megatel.” The Acquisition Loan was made pursuant to a Construction Loan Agreement, dated March 29, 2021, as modified, between the Developer and the MCI PIF II Fund in the principal amount of $26,700,000. The maximum principal amount was subsequently increased to $38,438,400. Payments of interest at the rate or rates provided in the Acquisition Loan are due monthly, and the principal is due at maturity. The Acquisition Loan matures on October 1, 2023, unless extended. As of August 1, 2023, the Acquisition Loan was outstanding in the principal amount of $28,107,918.34. The Acquisition Loan is secured by separate deeds of trust and security agreements on the acreage purchased with the proceeds of each, including the real property within Improvement Area #1. The Acquisition Loan is subordinate to the Development Loan described below. Development Financing. In connection with the development of the land within the District, the Developer obtained a revolving loan (the “Development Loan”) on March 25, 2022, in the principal amount of $33,397,446.00 from TREZ Capital (2015) Corporation, a British Columbia corporation (the “Development Lender”). The Development Loan was subsequently modified effective March 31, 2023, and June 28, 2023, to revise some repayment terms. Payments of interest on the Development Loan at the rate provided therein are due monthly with principal payments due as follows: (i) $19,600,000.00 on September 30, 2023; (ii) $3,600,000.00 on December 31, 2023; (iii) 48 if the Developer exercises a six-month extension, $3,600,000.00 on March 31, 2024, and $3,600,000 on June 30, 2024; (iv) if the Developer exercises a second six-month extension, $3,600,000.00 on September 30, 2024, and $3,600,000 on December 31, 2024; and (v) in any case, the balance due at maturity. The Development Loan matures on March 25, 2024, or, if the Developer exercises only the first six-month extension, September 25, 2024, or if the Developer exercises the first and the second six-month extensions, March 25, 2025. As of August 1, 2023, the Development Loan was outstanding in the principal amount of $27,093,784.48. The Development Loan is secured by a first lien deed of trust and security agreement on all property within District and approximately 50 acres constituting the site for the Laguna and associated commercial and entertainment enterprises and multi-family housing. The Development Loan is superior in right to the Acquisition Loan. The Development Loan is personally guaranteed by Zach Ipour and Aaron Ipour. The PID Act provides that the Assessment Lien is a first and prior lien against an Assessed Parcel within the District and is superior to all other liens and claims except liens or claims for state, county, school district, or municipality ad valorem taxes. Additionally, at or prior to delivery of the Bonds, the MCI PIF II Fund and the Development Lender shall consent to and acknowledge the creation of the District, the levy of the Assessments, and the subordination of the liens securing the Development Loan and the Acquisition Loans to the assessment liens on property within Improvement Area #1 of the District securing payment of the Assessments. As a result, the lien on the property within Improvement Area #1 of the District securing the Assessments will have priority over the lien on the property within Improvement Area #1 of the District securing the Development Loan and the Acquisition Loans. 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 $20,152,720*. The Developer’s financing sources include the Development Loan, the net proceeds of the Bonds in the approximate amount of $16,449,502*, and the earnest money deposit of $5,000. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. * Preliminary, subject to change. 49 Summary of At-Risk Entities and Investments in the District Subordinate to the Assessment Lien. In order to finance the acquisition and development Improvement Area #1, the Developer has extended promissory notes that are secured by liens on some or all of the real property within Improvement Area #1 that are subordinate to the lien associated with the Assessments. A list of the entities with at-risk capital whose position or lien is subordinate to that of the Assessments is listed in the following table. Summary of Entities with At-Risk Capital Subordinate to the Lien Securing the Bonds At Risk Entity Funding Type Funding Purpose Security Position to Assessment Lien Maximum Amount Outstanding Balance (1) TREZ Capital (2015) Corporation Development Loan Development Lien includes all real property in Improvement Area #1 Subordinate $33,397,446 $27,093,784.48 MCI Preferred Income Fund II, LLC Development Loan Land Purchase and Development Lien includes all real property in Improvement Area #1 Subordinate $26,700,000 $28,107,918.34 (1) As of August 1, 2023. 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 Financial Advisor, and the Underwriter, and none of the City, the City’s Financial Advisor, or the Underwriter have any way of guaranteeing the accuracy of such information. The Administrator has reviewed this Limited Offering Memorandum and warrants and represents that the information herein under the caption “THE ADMINISTRATOR” does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made herein, in the light of the circumstances under which they are made, not misleading. The City has selected P3Works, LLC, as the Administrator for the District. The City has entered into an agreement with the Administrator to provide specialized services related to the administration of the District needed to support the issuance of the Bonds. The Administrator will primarily be responsible for preparing the annual update to the Service and Assessment Plan. The Administrator is a consulting firm focused on providing district services relating to the formation and administration of public improvement districts, and is based in Austin, Houston, and North Richland Hills, Texas. The Administrator’s duties will include: • Preparation of the annual update to the Service and Assessment Plan • Preparation of assessment rolls for City billing and collection • Establishing and maintaining a database of all City parcel IDs within the District • Trust account analysis and reconciliation • Property owner inquires • Determination of Prepayment amounts • Preparation and review of disclosure notices with Dissemination Agent • Review of developer draw requests for reimbursement of authorized improvement costs. The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has been provided by P3Works and has been included in reliance upon the authority of such firm as an expert in the field formation and administration of public improvement districts. 50 APPRAISAL General. Integra Realty Resources – Dallas (the “Appraiser”), prepared an appraisal report for the City dated July 31, 2023, and effective as to Phase 1A as of July 25, 2023, and effective as to Phases 1B and 1C as of September 28, 2023, based upon a physical inspection of the District conducted on July 25, 2023 (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 G 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 G – Appraisal.” Value Estimates. The Appraiser estimated the “as-is” market value of the fee simple interests of the Assessed Parcels in Phase 1A of Improvement Area #1 of the District. The Appraiser estimated the “prospective market value as completed” of the fee simple interest in various tracts of land comprising Phases 1B and 1C of Improvement Area #1 of the District under the hypothetical condition that the Improvement Area #1 Improvements in Phases 1B and 1C are completed. See “THE IMPROVEMENT AREA #1 IMPROVEMENTS.” The Appraisal does not reflect the as-is condition of Phases 1B and 1C of Improvement Area #1 of the District as the Improvement Area #1 Improvements in Phases 1B and 1C had not been completed at the time of the report. Moreover, 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 Phases 1A, 1B, and 1C of Improvement Area #1 of the District. See “APPENDIX G – Appraisal.” The as is value estimate for the assessable property within Phase 1A of Improvement Area #1 of the District using the methodologies described in the Appraisal and subject to the limiting conditions and assumptions set forth in the Appraisal, as of July 25, 2023, is $15,600,000. The prospective value estimate for the assessable property within Phase 1B of Improvement Area #1 of the District using the methodologies described in the Appraisal and subject to the limiting conditions and assumptions set forth in the Appraisal, as of September 28, 2023, is $15,700,000. The value estimate for the assessable property within Phase 1C of Improvement Area #1 of the District using the methodologies described in the Appraisal and subject to the limiting conditions and assumptions set forth in the Appraisal, as of September 28, 2023, is $4,475,000. None of the City, the Developer, the Financial Advisor, or the Underwriter makes any representation as to the accuracy, completeness assumptions or information contained in the Appraisal. The assumptions and qualifications with respect to the Appraisal are contained therein. There can be no assurance that any such assumptions will be realized and the City, the Developer and the Underwriter make no representation as to the reasonableness of such assumptions. Prospective investors should read the complete Appraisal in order to make an informed decision regarding any contemplated purchase of the Bonds. The complete Appraisal is attached as APPENDIX G. 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. 51 General THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER ASSETS OF THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER FUNDS COMPRISING THE TRUST ESTATE. The ability of the City to pay debt service on the Bonds as due is subject to various factors that are beyond the City’s control. These factors include, among others, (a) the ability or willingness of property owners within Improvement Area #1 of the District to pay Assessments levied by the City, (b) cash flow delays associated with the institution of foreclosure and enforcement proceedings against property within Improvement Area #1 of the District, (c) general and local economic conditions which may impact real property values, the ability to liquidate real property holdings and the overall value of real property development projects, and (d) general economic conditions which may impact the general ability to market and sell the lots within Improvement Area #1 of the District, it being understood that poor economic conditions within the City, State, and region may slow the assumed pace of sales of such lots. The rate of development of the property in Improvement Area #1 of the District is directly related to the vitality of the residential housing industry. In the event that the sale of the lands within Improvement Area #1 of the District should proceed more slowly than expected and the Developer is unable to pay the Assessments, only the value of the lands, with improvements, will be available for payment of the debt service on the Bonds, and such value can only be realized through the foreclosure or expeditious liquidation of the lands within Improvement Area #1 of the District. There is no assurance that the value of such lands will be sufficient for that purpose and the expeditious liquidation of real property through foreclosure or similar means is generally considered to yield sales proceeds in a lesser sum than might otherwise be received through the orderly marketing of such real property. The Underwriter is not obligated to make a market in or repurchase any of the Bonds, and no representation is made by the Underwriter, the City, or the City’s Financial Advisor that a market for the Bonds will develop and be maintained in the future. If a market does develop, no assurance can be given regarding future price maintenance of the Bonds. The City has not applied for or received a rating on the Bonds. The absence of a rating could affect the future marketability of the Bonds. There is no assurance that a secondary market for the Bonds will develop or that holders who desire to sell their Bonds prior to the stated maturity will be able to do so. Deemed Representations and Acknowledgment by Investors Each Investor will be deemed to have acknowledged and represented to the City the matters set forth under the heading “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS” which include, among others, a representation and acknowledgment that the purchase of the Bonds involves investment risks, certain of which are set forth under this heading “BONDHOLDERS’ RISKS” and elsewhere herein, and such Investor, either alone or with its purchaser representative(s) (as defined in Rule 501(h) of Regulation D under the Securities Act of 1933), has sophisticated knowledge and experience in financial and business matters and the capacity to evaluate such risks in making an informed investment decision to purchase the Bonds, and the Investor can afford a complete loss of its investment in the Bonds. 52 TIRZ No. 4 Annual Credit Amount and Marketing of the Development With respect to the Bonds, the Residential Contribution will be generated only from ad valorem taxes levied and collected by the City on the Captured Taxable Value of real property in Improvement Area #1 in any year. Any delay or failure by the Developer to develop Improvement Area #1 may result in a reduced amount of the Residential Contribution being available to credit the Assessments. If the City contributes the Residential Contribution to the payment of the Improvement Area #1 Improvements, the City will deposit less tax revenue into its general fund for use on public services, such as police and fire protection. Application of the TIRZ No. 4 Annual Credit Amount may affect the City’s ability to provide for such basic services. It is uncertain what impact, if any, the TIRZ No. 4 Annual Credit Amount application to the Annual Installments will have on the underwriting of residential mortgages. If the underwriter of residential mortgages does not recognize the TIRZ No. 4 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. Infectious Disease Outbreak In March 2020, the World Health Organization and the President of the United States (the “President”) separately declared the outbreak of a respiratory disease caused by a novel coronavirus (“COVID-19”) to be a public health emergency (the “Pandemic”). On April 10, 2023, the President signed a resolution terminating the national emergency related to the Pandemic, and on May 5, 2023, the World Health organization declared COVID-19 no longer represented a global health emergency. There are currently no COVID-19 related operating limits imposed by executive order of the Governor of the State for any business or other establishment in the State. The Governor retains the right to impose additional restrictions on activities if needed in order to mitigate the effects of COVID- 19. The City has not experienced any decrease in property values or unusual tax delinquencies as a result of COVID-19. However, the City cannot predict the long-term economic effect of COVID-19 or a similar virus should there be a reversal of economic activity or re-imposition of restrictions. Failure or Inability to Complete Proposed Development Proposed development within Improvement Area #1 of the District may be affected by changes in general economic conditions, fluctuations in the real estate market and interest rates, changes in the income tax treatment of real property ownership, unexpected increases in development costs and other similar factors as well as availability of utilities and the development or existence of environmental concerns with such land. See “– Hazardous Substances” and “– Availability of Utilities” below. Land development within Improvement Area #1 of the District could also be affected adversely by changes in governmental policies, including, but not limited to, governmental policies to restrict or control development. Any approvals needed in the future for Improvement Area #1 of the District must come from the City. There can be no assurances that other similar projects will not be developed in the future or that existing projects will not be upgraded or otherwise able to compete with the Development. A slowdown of the development process and the related absorption rate within the Development because of any or all of the foregoing could affect adversely land values. In addition, as described in “THE DEVELOPMENT – Development Agreement,” the Development Agreement restricts the development of property outside of Improvement Area #1 until the Laguna is completed. Such limitations could adversely impact the completion of the Development as anticipated. THE TIMELY PAYMENT OF THE BONDS DEPENDS UPON THE WILLINGNESS AND ABILITY OF THE DEVELOPER AND ANY SUBSEQUENT OWNERS TO PAY THE ASSESSMENTS WHEN DUE. ANY OR ALL OF THE FOREGOING COULD REDUCE THE WILLINGNESS AND THE ABILITY OF SUCH OWNERS TO PAY THE ASSESSMENTS AND COULD GREATLY REDUCE THE VALUE OF PROPERTY WITHIN IMPROVEMENT AREA #1 OF THE DISTRICT IN THE EVENT SUCH PROPERTY HAS TO BE FORECLOSED. In that event, there could be a default in the payment of the Bonds. Completion of the Improvement Area #1 Improvements The construction of some of the Major Improvements that are necessary for the successful development of Improvement Area #1 of the District are expected to be completed in September 2023, but are not yet complete. See 53 “THE IMPROVEMENT AREA #1 IMPROVEMENTS – General.” The cost and time for completion of all of such improvements is uncertain and may be affected by changes in national, regional, and local and economic conditions; changes in long and short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing properties; changes in local, regional, and national market and economic conditions; unanticipated development costs, market preferences, and architectural trends; unforeseen environmental risks and controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of mortgage funds to buyers of the homes to be built in Improvement Area #1 of the District, which may render the sale of such homes difficult or unattractive; acts of war, terrorism, or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; force majeure (which may result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation; adverse weather conditions; subcontractor defaults; and other unknown contingencies and factors beyond the control of the Developer and the City. If cost overruns result in delay of construction, or if other delays are experienced, the Developer may be unable to complete timely the Major Improvements necessary for delivery of lots in Improvement Area #1 of the District. Completion of Homes The cost and time for completion of homes by the Homebuilder is uncertain and may be affected by changes in national, regional, and local market and economic conditions; changes in long and short term interest rates; changes in the climate for real estate purchases; changes in demand for or supply of competing properties; unanticipated development costs, market preferences and architectural trends; unforeseen environmental risks and controls; the adverse use of adjacent and neighboring real estate; changes in interest rates and the availability of mortgage funds to buyers of the homes yet to be built in the Development, which may render the sale of such homes difficult or unattractive; acts of war, terrorism or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; force majeure (which may result in uninsured losses); strikes; labor shortages; energy shortages; material shortages; inflation; adverse weather conditions; subcontractor defaults; and other unknown contingencies and factors beyond the control of the Developer and the Homebuilder. Absorption Rate There can be no assurance that the Developer or the Homebuilder will be able to achieve its anticipated absorption rates. Failure to achieve the absorption rate estimates will adversely affect the estimated value of Improvement Area #1 of the District, could impair the economic viability of Improvement Area #1 of the District, and could reduce the ability or desire of property owners to pay the Assessments. Assessment Limitations Annual Installments of Assessments are billed to property owners in Improvement Area #1 of the District. Annual Installments are due and payable, and bear the same penalties and interest for non-payment, as for ad valorem taxes as described under “ASSESSMENT PROCEDURES.” Additionally, Annual Installments established by the Service and Assessment Plan correspond in number and proportionate amount to the number of installments and principal amounts of Bonds maturing in each year and the Administrative Expenses for such year. See “ASSESSMENT PROCEDURES.” The unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Annual Installments of Assessment payments in the future. In order to pay debt service on the Bonds, it is necessary that Annual Installments are paid in a timely manner. Due to the lack of predictability in the collection of Annual Installments in Improvement Area #1 of the District, the City has established a Reserve Account in the Reserve Fund, to be funded from the proceeds of the Bonds, to cover delinquencies. The Annual Installments are secured by the Assessment Lien. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Account and delay in payments of debt service on the Bonds. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.” Upon an ad valorem tax lien foreclosure event of a property within Improvement Area #1 of the District, any lien securing an Assessment that is delinquent will be foreclosed upon in the same manner as the ad valorem tax lien (assuming all necessary conditions and procedures for foreclosure are duly satisfied). To the extent that a 54 foreclosure sale results in insufficient funds to pay in full both the delinquent ad valorem taxes and the delinquent Assessments, the liens securing such delinquent ad valorem taxes and delinquent Assessments would likely be extinguished. Any remaining unpaid balance of the delinquent Assessments would then be an unsecured personal liability of the original property owner. Based upon the language of Texas Local Government Code, §372.017(b), case law relating to other types of assessment liens and opinions of the Texas Attorney General, the Assessment Lien as it relates to installment payments that are not yet due should remain in effect following an ad valorem tax lien foreclosure, with future installment payments not being accelerated. Texas Local Government Code §372.018(d) supports this position, stating that an Assessment Lien runs with the land and the portion of an assessment payment that has not yet come due is not eliminated by foreclosure of an ad valorem tax lien. The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed after the adoption of the 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. It is unclear under Texas law whether or not Pre-existing Homestead Rights would prevent the Assessment Lien from attaching to such homestead property or instead cause the Assessment Lien to attach, but remain subject to, the Pre-existing Homestead Rights. Under Texas law, in order to establish homestead rights, the claimant must show a combination of both overt acts of homestead usage and intention on the part of the owner to claim the land as a homestead. Mere ownership of the property alone is insufficient and the intent to use the property as a homestead must be a present one, not an intention to make the property a homestead at some indefinite time in the future. As of the date of adoption of the 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 the Assessment Ordinance. Consequently, there are and can be no homestead rights on the Assessed Property superior to the Assessment Lien and, therefore, the Assessment Lien may be foreclosed upon by the City. Failure by owners of the parcels to pay Annual Installments when due, depletion of the Reserve Fund, delay in foreclosure proceedings, or inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Assessments levied against such parcels may result in the inability of the City to make full or punctual payments of debt service on the Bonds. THE ASSESSMENTS WILL CONSTITUTE A FIRST AND PRIOR LIEN AGAINST THE PROPERTY ASSESSED, SUPERIOR TO ALL OTHER LIENS AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE, COUNTY, SCHOOL DISTRICT, OR MUNICIPALITY AD VALOREM TAXES AND WILL BE PERSONAL OBLIGATIONS OF AND CHARGES AGAINST THE OWNERS OF PROPERTY LOCATED WITHIN IMPROVEMENT AREA #1 OF THE DISTRICT. Bankruptcy The payment of Assessments and the ability of the City to foreclose on the lien of a delinquent unpaid Assessment may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. Although bankruptcy proceedings would not cause the Assessments to become extinguished, bankruptcy of a property owner in all likelihood would result in a delay in prosecuting foreclosure proceedings. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds, and the possibility that delinquent Assessments might not be paid in full. Direct and Overlapping Indebtedness, Assessments and Taxes The ability of an owner of property within Improvement Area #1 of the District to pay the Assessments could be affected by the existence of other taxes and assessments imposed upon the property. Public entities whose boundaries overlap those of Improvement Area #1 of the District currently impose ad valorem taxes on the property within Improvement Area #1 of the District and will likely do so in the future. Such entities could also impose 55 assessment liens on the property within Improvement Area #1 of the District. The imposition of additional liens, whether from taxes, assessments, or private financing, may reduce the ability or willingness of the landowners to pay the Assessments. See “OVERLAPPING TAXES AND DEBT.” Depletion of Reserve Fund; No Prefunding of Delinquency and Prepayment Reserve Account Failure of the owners of property within Improvement Area #1 of the District to pay the Assessments when due could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of property upon a foreclosure or otherwise or delinquency redemptions after a foreclosure sale, if any. There could be a default in payments of the principal of and interest on the Bonds if sufficient amounts are not available in the Reserve Fund. The Delinquency and Prepayment Reserve Account of the Reserve Fund is not funded from proceeds of the Bonds. Instead, funding of the Delinquency and Prepayment Reserve Account is accumulated over time, by the mechanism described in “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account.” The Indenture provides that if after a withdrawal from the Reserve Account the amounts therein are less than the Reserve Account Requirement, the Trustee shall transfer an amount from the Pledged Revenue Fund to the Reserve Account sufficient to cure such deficiency. The Indenture also provides that if the amount on deposit in the Delinquency and Prepayment Reserve Account shall at any time be less than the Delinquency and Prepayment Reserve Requirement, the Trustee shall notify the City, in writing, of the amount of such shortfall and the City shall resume collecting the Additional Interest and shall file a City Certificate with the Trustee instructing the Trustee to resume depositing the Additional Interest from the Bond Pledged Revenue Account of the Pledged Revenue Fund into the Delinquency and Prepayment Reserve Account until the Delinquency and Prepayment Reserve Requirement has been accumulated in the Delinquency and Prepayment Reserve Account; provided, however, that the City shall not be required to replenish the Delinquency and Prepayment Reserve Account in the event funds are transferred from the Delinquency and Prepayment Reserve Account to the Redemption Fund as a result of an extraordinary optional redemption of Bonds from the proceeds of a Prepayment, as described under “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency and Prepayment Reserve Account ).” Hazardous Substances While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value that may be realized to the assessment is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws. It is likely that, should any of the parcels of land located in Improvement Area #1 of the District be affected by a hazardous substance, the marketability and value of such parcels would be reduced by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. The value of the land within Improvement Area #1 of the District does not take into account the possible liability of the owner (or operator) for the remediation of a hazardous substance condition on the property in Improvement Area #1 of the District. The City has not independently verified, and is not aware, that the owner (or operator) of any of the parcels within Improvement Area #1 of the District has such a current liability with respect to such parcel; however, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the land within Improvement 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. The actual occurrence of any of these possibilities could significantly negatively affect the value of a parcel that is realizable upon a foreclosure. 56 See “THE DEVELOPMENT – Environmental” for discussion of the Phase One ESA performed on property within the District. Regulation Development within Improvement Area #1 of the District may be subject to future federal, State, and local regulations. Approval may be required from various agencies from time to time in connection with the layout and design of development in Improvement Area #1 of the District, the nature and extent of Improvement Area #1 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 Improvement Area #1 of the District and property values. Recent Changes in State Law Regarding Public Improvement Districts The 87th Legislature passed HB 1543, which became effective September 1, 2021, and requires a person who proposes to sell or otherwise convey real property within a public improvement district to provide to the purchaser of the property, before the execution of a binding contract of purchase and sale, written notice of the obligation to pay public improvement district assessments, in accordance with Section 5.014, Texas Property Code, as amended. In the event a contract of purchase and sale is entered into without the seller providing the notice, the intended purchaser is entitled to terminate the contract of purchase and sale. If the Developer or the Homebuilder does not provide the required notice and prospective purchasers of property within Improvement Area #1 of the District terminate a purchase and sale contract, the anticipated absorption schedule may be affected. In addition to the right to terminate the purchase contract, a property owner who did not receive the required notice is entitled, after sale, to sue for damages for (i) all costs relative to the purchase, plus interest and reasonable attorney’s fees, or (ii) an amount not to exceed $5,000, plus reasonable attorney’s fees. In a suit filed pursuant to clause (i), any damages awarded must go first to pay any outstanding liens on the property. In such an event, the outstanding Assessments on such property may be paid. On payment of all damages respectively to the lienholders and purchaser pursuant to clause (i), the purchaser is required to reconvey the property to the seller. Further, if the Developer or the 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 as appendices to the Service and Assessment Plan. See “APPENDIX C – Service and Assessment Plan.” Potential Future Changes in State Law Regarding Public Improvement Districts During past 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. It is impossible to predict what bills may be introduced during upcoming legislative sessions and, if passed, the impact that any future legislation will or may have on the security for the Bonds. 500-Year Flood Plain and Severe Weather Events According to the Federal Emergency Management Agency (“FEMA”) Flood Insurance Rate Map, Community Panel Number 48085C0155J, effective June 2, 2009, all of the property within Improvement Area #1 of the District lies outside of the 500-year flood plain, referred to as Zone X. FEMA will from time to time revise its Flood Insurance Rate Maps. None of the City, the Underwriter, or the Developer make any representation as to whether FEMA may revise its Flood Insurance Rate Maps, whether such revisions may result in homes that are currently outside of the 500-year flood plain from being included in the 500-year or 100-year flood plain in the future, or whether extreme flooding events may occur more often than assumed in creating the 500-year flood plain. All of the State, including the City, is subject to extreme weather events that can cause loss of life and damage to property through strong winds, flooding, heavy rains and freezes, including events similar to the severe 57 winter storm that the continental United States experienced in February 2021, which resulted in disruptions in the Electric Reliability Council of Texas power grid and prolonged blackouts throughout the State. It is impossible to predict whether similar events will occur in the future and the impact they may have on the City, including land within Improvement Area #1 of the District. Exercise of Third-Party Property Rights As described under “THE DEVELOPMENT – Existing Mineral and Groundwater Rights, Easements and Other Third-Party Property Rights,” there are certain mineral rights, royalty interests, and easement reservations located within Improvement Area #1 of the District and not owned by the Developer. There may also be additional mineral rights, royalty interests, easements, water 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 such third-party rights in or around Improvement Area #1 of the District to have a material adverse effect on the Development, the property within Improvement Area #1 of the District, or the ability of landowners within Improvement Area #1 of the District to pay Assessments. However, none of the City, the Financial Advisor, or the Underwriter provide any assurances as to such Developer expectations. Bondholders’ Remedies and Bankruptcy In the event of default in the payment of principal of or interest on the Bonds or the occurrence of any other Event of Default under the Indenture, the Trustee may, and at the written direction of the Owners of not less than 51% in aggregate Outstanding principal amount of the Bonds and its receipt of indemnity satisfactory to it shall, proceed against the City for the purpose of protecting and enforcing the rights of the Owners under the Indenture, by action seeking mandamus or by other suit, action, or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief to the extent permitted by the Indenture or Applicable Laws, including, but not limited to, the specific performance of any covenant or agreement contained therein, or injunction; provided, however, that no action for money damages against the City may be sought or shall be permitted. The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel performance of the City’s obligations under the Bonds or the Indenture and such obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, so its use rests within the discretion of the court but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The owners of the Bonds cannot themselves foreclose on or sell property within Improvement 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 58 certain circumstances.” The Local Government Immunity Waiver Act covers cities and relates to contracts entered into by cities for providing goods or services to cities. In Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (“Wasson”), the Texas Supreme Court (the “Court”) addressed whether the distinction between governmental and proprietary acts (as found in tort-based causes of action) applies to breach of contract claims against municipalities. The Court analyzed the rationale behind the Proprietary-Governmental Dichotomy to determine that “a city’s proprietary functions are not done pursuant to the ‘will of the people’” and protecting such municipalities “via the [S]tate’s immunity is not an efficient way to ensure efficient allocation of [S]tate resources.” While the Court recognized that the distinction between governmental and proprietary functions is not clear, the Wasson opinion held that the Proprietary- Governmental Dichotomy applies in a contract-claims context. The Court reviewed Wasson for a second time and issued an opinion on October 5, 2018, clarifying that to determine whether governmental immunity applies to a breach of contract claim, the proper inquiry is whether the municipality was engaged in a governmental or proprietary function when it entered into the contract, not at the time of the alleged breach. Therefore, in regard to municipal contract cases (as in tort claims), it is incumbent on the courts to determine whether a function was proprietary or governmental based upon the statutory and common law guidance at the time of inception of the contractual relationship. Texas jurisprudence has generally held that proprietary functions are those conducted by a city in its private capacity, for the benefit only of those within its corporate limits, and not as an arm of the government or under authority or for the benefit of the State; these are usually activities that can be, and often are, provided by private persons, and therefore are not done as a branch of the State, and do not implicate the state’s immunity since they are not performed under the authority, or for the benefit, of the State as sovereign. Notwithstanding the foregoing new case law issued by the Court, such sovereign immunity issues have not been adjudicated in relation to bond matters (specifically, in regard to the issuance of municipal debt). Each situation will be prospectively evaluated based on the facts and circumstances surrounding the contract in question to determine if a suit, and subsequently, a judgment, is justiciable against a municipality. The City is not aware of any Texas court construing the Local Government Immunity Waiver Act in the context of whether contractual undertakings of local governments that relate to their borrowing powers are contracts covered by such act. Because it is unclear whether the Texas legislature has effectively waived the City’s sovereign immunity from a suit for money damages in the absence of City action, the Trustee or the owners of the Bonds may not be able to bring such a suit against the City for breach of the Bonds or the Indenture covenants. As noted above, the Indenture provides that owners of the Bonds may exercise the remedy of mandamus to enforce the obligations of the City under the Indenture. Neither the remedy of mandamus nor any other type of injunctive relief was at issue in Tooke, and it is unclear whether Tooke will be construed to have any effect with respect to the exercise of mandamus, as such remedy has been interpreted by Texas courts. In general, Texas courts have held that a writ of mandamus may be issued to require public officials to perform ministerial acts that clearly pertain to their duties. Texas courts have held that a ministerial act is defined as a legal duty that is prescribed and defined with a precision and certainty that leaves nothing to the exercise of discretion or judgment, though mandamus is not available to enforce purely contractual duties. However, mandamus may be used to require a public officer to perform legally imposed ministerial duties necessary for the performance of a valid contract to which the State or a political subdivision of the State is a party (including the payment of moneys due under a contract). Judicial Foreclosures Judicial foreclosure proceedings are not mandatory; however, the City has covenanted to order and cause such actions to be commenced. In the event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid would be received at the foreclosure sale, and, in such event, there could be an additional delay in payment of the principal of and interest on the Bonds or such payment may not be made in full. Moreover, in filing a suit to foreclose, the City must join other taxing units that have claims for delinquent taxes against all or part of the same property; the proceeds of any sale of property within Improvement Area #1 of the District available to pay debt service on the Bonds may be limited by the existence of other tax liens on the property. See “OVERLAPPING TAXES AND DEBT.” Collection of delinquent taxes, assessments, and the Assessments may be adversely affected by the effects of market conditions on the foreclose sale price, and by other factors, including taxpayers’ right to redeem property within two years of foreclosure for residential and agricultural use property and six months for other property, and by a time-consuming and expensive collection procedure. 59 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. 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 of the District subject to the Assessments, existing real estate and financial market conditions, and other factors. No Credit Rating The City has not applied for or received a rating on the Bonds. Even if a credit rating had been sought for the Bonds, it is not anticipated that such a rating would have been investment grade. The absence of a rating could affect the future marketability of the Bonds. There is no assurance that a secondary market for the Bonds will develop or that holders who desire to sell their Bonds prior to the stated maturity will be able to do so. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary market trading in connection with a particular issue is suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then generally prevailing circumstances. Such prices could be substantially different from the original purchase price. 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 analyses, an appraiser makes numerous assumptions with respect to general business, economic and regulatory conditions, and other matters, many of which are beyond the Appraiser’s, Underwriter’s, and City’s control, as well as to certain factual matters. Furthermore, the Appraiser’s analysis, opinions, and conclusions are necessarily based upon market, economic, financial, and other circumstances and conditions existing prior to the valuation. The intended use and user of the Appraisal are specifically identified in the Appraisal as agreed upon in the contract for services and/or reliance language found in the Appraisal. The Appraiser has consented to the use of the Appraisal in this Limited Offering Memorandum in connection with the issuance of the Bonds. No other use or user of the Appraisal is permitted by any other party for any other purpose. Bankruptcy Limitation to Bondholders’ Rights The enforceability of the rights and remedies of the owners of the Bonds may be limited by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions such as the City. The City is authorized under State law to voluntarily proceed under Chapter 9 of the Federal Bankruptcy Code, 11 U.S.C. 901-946. The City may proceed under Chapter 9 if it (1) is generally not paying 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 60 creditors because negotiation is impracticable, or reasonably believes that a creditor may attempt to obtain a preferential transfer. If the City decides in the future to proceed voluntarily under the Federal Bankruptcy Code, the City would develop and file a plan for the adjustment of its debts, and the Bankruptcy Court would confirm the plan if (1) the plan complies with the applicable provisions of the Federal Bankruptcy Code, (2) all payments to be made in connection with the plan are fully disclosed and reasonable, (3) the City is not prohibited by law from taking any action necessary to carry out the plan, (4) administrative expenses are paid in full, (5) all regulatory or electoral approvals required under State law are obtained and (6) the plan is in the best interests of creditors and is feasible. The rights and remedies of the owners of the Bonds would be adjusted in accordance with the confirmed plan of adjustment of the City’s debt. Management and Ownership The management and ownership of the Developer, the Homebuilder, and related or affiliated property owners could change in the future. Purchasers of the Bonds should not rely on the management experience of such entities. There are no assurances that such entities will not sell the subject property or that officers will not resign or be replaced. In such circumstances, a new developer, homebuilder, or new officers in management positions may not have comparable experience in projects comparable to the Development. 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. It cannot be predicted if this IRS focus could lead to an audit of the Bonds or what the result would be of any such audit. If an audit of the Bonds is commenced, under current procedures parties other than the City would have little, if any, right to participate in the audit process. Moreover, because achieving judicial review in connection with an audit of tax-exempt obligations is difficult, obtaining an independent review of IRS positions with which the City legitimately disagrees may not be practicable. Any action of the IRS, regardless of the outcome, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of obligations presenting similar tax issues, may affect the market price for, or the marketability of, the Bonds. Finally, if the IRS ultimately determines that the interest on the Bonds is not excluded from the gross income of Bondholders for federal income tax purposes, the City may not have the resources to settle with the IRS, the Bonds are not required to be redeemed, and the interest rate on the Bonds will not increase. 61 General Risks of Real Estate Investment and Development The Developer has the right to modify or change its plan for development of the District, from time to time, including, without limitation, land use changes, changes in the overall land and phasing plans, and changes to the type, mix, size, and number of units to be developed. No defined “true-up” agreement has been entered into between the City and the Developer, nor is there a requirement that future developers or landowners enter into such an agreement. There can be no assurance, in the event the Developer or a subsequent developer modifies or changes its plan for development, that the necessary revisions to the Service and Assessment Plan will be made. Nor can there be an assurance that the eventual assessment burden on the property will be marketable. The ability of the Developer to develop lots and the Homebuilder to sell single-family residential homes within Improvement Area #1 of the District may be affected by unforeseen changes in the general economic conditions, fluctuations in the real estate market, and other factors beyond the control of the owner of the single- family residential lots. In the event that a large number of single-family projects are constructed outside of Improvement Area #1 of the District, and compete with the Development, the demand for residential housing within Improvement Area #1 of the District could be reduced, thereby adversely affecting the continued development of Improvement Area #1 of the District, or its attraction to businesses and residents. Investments in undeveloped or developing real estate are generally considered to be speculative in nature and to involve a high degree of risk. Improvement Area #1 of the District will be subject to the risks generally incident to real estate investments and development. Many factors that may affect Improvement Area #1 of the District, as well as the operating revenues of the Developer, including those derived from the Development, are not within the control of the Developer or the Homebuilder. 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 Improvement Area #1 of the District, which may render the sale of such homes difficult or unattractive; acts of war, terrorism or other political instability; delays or inability to obtain governmental approvals; changes in laws; moratorium; 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 and the Homebuilder. Improvement Area #1 of the District cannot be completed without the Developer or the Homebuilder obtaining a variety of governmental approvals and permits, some of which have already been obtained. Certain permits are necessary to initiate construction of the Improvement Area #1 Improvements 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 and the Homebuilder. A slowdown of the development process and the related absorption rate within Improvement Area #1 of the District because of any or all of the foregoing could affect adversely land values. The timely payment of the Bonds depends on the willingness and ability of the Developer and any subsequent owners to pay the Assessments when due. Any or all of the foregoing could reduce the willingness and ability of such owners to pay the Assessments and could greatly reduce the value of the property within Improvement Area #1 of the District in the event such property has to be foreclosed. If Annual Installments of Assessments are not timely paid and there are insufficient funds in the accounts of the Reserve Fund, a nonpayment could result in a payment default under the Indenture. 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. Downturns in the real estate market and other factors beyond the control of the Developer and the Homebuilder, including general economic conditions, may impact the timing of 62 parcel, lot, and home sales within Improvement Area #1 of the District. No assurances can be given that projected home prices and buildout values presented in this Limited Offering Memorandum will be realized. Risks Related to Current Increase in Costs of Building Materials As a result of the Pandemic, low supply and demand and the ongoing trade war, there have been substantial increases in the cost of lumber and other materials, causing many homebuilders and general contractors to experience budget overruns. The Developer is responsible for the construction of the Improvement Area #1 Improvements. The Developer expects to finance a portion of the costs of the Improvement Area #1 Improvements from proceeds of the Bonds. 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 Assessments when due. If the costs of material continue to increase, it may affect the ability of the Homebuilder to construct homes within Improvement Area #1 of the District. There is no way to predict whether such cost increases or low supply of building materials will continue or if such continuance will affect the development of the District. 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. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. In March of 2023, UBS agreed to acquire the troubled Credit Suisse, and troubled First Republic Bank received a $30 billion rescue package from 11 of the biggest U.S. banks in an effort to prevent its collapse; however, on May 1, 2023, the FDIC seized First Republic Bank and sold its assets to JPMorgan Chase & Co. Although a statement by the Department of the Treasury, the Federal Reserve, and the FDIC stated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit, and certain other financial instruments with SVB, Signature Bank, or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts. If the Developer is unable to access funds pursuant the Improvement Area #1 Development Loan with the Lender, the Developer’s ability to finance the costs of the Improvement Area #1 Improvements, or to enter into new commercial lending arrangements to complete the Development, 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 Developer’s and 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. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. 63 Competition The housing industry in the Dallas-Fort Worth area is very competitive, and none of the Developer, the Homebuilder, the City, the City’s Financial Advisor, or the Underwriter can give any assurance that the building programs which are planned throughout the District will be completed in accordance with the Developer’s and Homebuilder’s expectations. The successful development of the land within Improvement Area #1 of the District, the success of the Development, and the sale of residential units therein, once such homes are built, may be affected by unforeseen changes in general economic conditions, fluctuations in the real estate market, and other factors beyond the control of the Developer and the Homebuilder. The competitive position of the Developer and the Homebuilder in the sale of single-family residential units is affected by most of the factors discussed in this section, and such competitive position is directly related to maintenance of market values in Improvement Area #1 of the District. There can be no assurances that other similar projects will not be developed in the future or that existing projects will not be upgraded or otherwise become able to compete with the Development. Below is a list of competitive projects in the area as of August 1, 2023. Project Name Developer Proximity to District Number of Units Number of Units Remaining Prices Lot Sizes/Types Avery Pointe Lennar 0.3 miles 568 15 $373,999 - $484,999 50’ and 65’ West Crossing Bloomfield 0.9 miles 1,022 20 $364,990 - $575,990 50’ and 65’ Anna Ranch Gehan 3.6 miles 106 27 $359,990 - $599,990 55’ and 70’ Source: The Developer Availability of Utilities The progress of development within Improvement Area #1 of the District is also dependent upon the City providing an adequate water and wastewater service to the Development. If the City fails to provide water and wastewater services to the property in the District, the Development cannot be substantially completed, and the Developer will not be able to construct homes. See “THE CITY – Water and Wastewater.” Dependence Upon Developer and Homebuilder The Developer and/or the Homebuilder will own some or all of the Assessed Property in Improvement Area #1 of the District until all homes are sold to homebuyers, currently expected to be complete in the third quarter of 2024. As owner of most of the Assessed Property on the date the next annual installment of the Assessments become due on January 31, 2024, the Developer and the Homebuilder, together, will have the obligation for payment of most of such annual installments. The ability of the Developer and/or the Homebuilder to make full and timely payment of the Assessments will directly affect the ability of the City to meet its debt service obligations with respect to the Bonds. The only assets of the Developer are land within the District, related permits and development rights, two unrelated land parcels and undeveloped land parcels in Collin County, and minor operating accounts. The source of funding for future land development activities and infrastructure construction to develop the lots proposed for Improvement Area #1 of the District also consists of proceeds from the Bonds and proceeds of lot sales to the Homebuilder, as well as possible additional loans from the MCI PIF II Fund and the Development Lender. 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 Assessments if necessary, or as to whether the Developer will advance such funds. See “THE DEVELOPMENT – Expected Build-Out and Home Prices in the Development.” Moreover, the City will pay to the Developer or the Developer’s designee, from proceeds of the Bonds, for project costs actually incurred in developing and constructing the Improvement Area #1 Improvements, in accordance with the Reimbursement Agreement and the Indenture. See “THE IMPROVEMENT AREA #1 64 IMPROVEMENTS – General,” “THE DEVELOPMENT –Lot Purchase Contract,” and “– Reimbursement Agreement,” “APPENDIX B – Form of Indenture,” and “APPENDIX G – Reimbursement Agreement.” To the best of Megatel’s knowledge, it has been delinquent in the payment of assessments levied on random lots in various PIDs. In such instances, all of the delinquencies were paid promptly after discovery (in the case of oversight) or in conjunction with the sale of the homes (when homes sales were imminent). All penalties accruing on the assessments were paid without objection. In a separate instance, in 2023 AnaCapri Laguna Azure, LLC (“ACLA”), an affiliate of the Developer, did not timely pay the assessments levied by the City of Anna, Texas, on ACLA’s undeveloped land in the AnaCapri Public Improvement District. Such assessments were levied to reimburse ACLA for the costs of public improvements to be constructed by ACLA pursuant to a reimbursement agreement to be entered into between ACLA and the City of Anna. At the time such assessments were due (January 31, 2023), the City of Anna had not entered into a reimbursement agreement with ACLA. On advice of ACLA’s legal counsel, ACLA did not pay such assessments until ACLA was comfortable that the City of Anna was going to enter into the reimbursement agreement, which was after the due date. At that time, ACLA paid the assessments and all associated penalties without objection. Affiliate Litigation The following is a summary of certain recent and pending litigation filed by or against affiliates of the Developer, the Homebuilder, and the Ipour brothers: CADG Erwin Farms, LLC et al. v. Aaron Ipour; Zach Ipour; et al. (Civil Action No. 3:22–cv–02896-M – Northern District of Texas, Dallas Division). In December 2022, a group of eight real estate development companies, each affiliated with Mehrdad Moayedi (“Moayedi”), a Dallas-based real estate developer, filed a federal civil Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit against the Afzalipour brothers, MCI, and various funds created by MCI, including the MCI PIF II Fund. See “THE DEVELOPER AND THE HOMEBUILDER – General Development Financing by Megatel.” The Defendants filed a motion to dismiss on March 6, 2023. The Plaintiff’s response was filed on April 26, 2023. The Defendants filed a reply in support of the motion to dismiss on May 10, 2023. On July 20, 2023, the court issued an order staying discovery pending the court’s decision on the Defendant’s motion to dismiss and requiring Plaintiffs to file a RICO case statement by August 3, 2023. The Plaintiffs filed the RICO case statement on August 3, 2023, and on August 7, the Defendants filed a motion for leave to file a supplemental brief in support of the motion to dismiss and in response to Plaintiff’s RICO case statement. The court granted the Defendant’s motion on August 10, 2023, and the supplemental brief has been filed. The Afzalipour brothers believe that the foregoing suit was filed in retaliation for an ongoing federal civil RICO suit filed by Megatel against Moayedi and various affiliated entities in 2020. Trial in that suit is set for May 2024. Megatel Homes, LLC, et. Al v. Crystal Lagoons U.S. Corp. (Cause No. 3:22-cv-01715 – Northern District of Texas, Dallas Division). During the planning stages for the Laguna, Megatel had discussions with Crystal Lagoons U.S. Corp. (“Crystal Lagoons”) regarding design and construction of the Laguna. As part of those discussions, Megatel and Crystal Lagoons signed a Non-Disclosure Agreement (“NDA”). Megatel did not choose Crystal Lagoons to design and construct the Laguna. In 2021, Crystal Lagoons proceeded with pre-litigation discovery against Megatel, alleging that Megatel violated the NDA and misused Crystal Lagoons’ name and confidential information. In August 2022, Megatel filed suit against Crystal Lagoons in federal court seeking a declaratory judgment that (i) Megatel did not breach the NDA, and (ii) did not misuse Crystal Lagoons’ name or confidential information. Crystal Lagoons’ pre-litigation discovery action was non-suited without prejudice following the filing of the declaratory judgment action by Megatel. Crystal Lagoons filed an answer to the declaratory judgment action and asserted two counterclaims similar to those described above. Megatel filed a Motion to Dismiss the counterclaim for misappropriation. On August 10, 2023, the court dismissed without prejudice Crystal Lagoon’s misappropriation claim against Megatel. Crystal 65 Lagoons may file an amended complaint within 28 days defining an allegedly misappropriated product that is not a trademark. Mediation has been ordered on or before December 1, 2023. Trial is scheduled for April 17, 2024. CADG Erwin Farms, LLC et al. v. Megatel Homes III, LLC, Aaron Ipour, and Zach Ipour (Cause No. DC-22-02108 – Dallas County, Texas). On February 22, 2022, six land development companies filed a petition against Megatel Homes III, LLC (“Megatel III”), and its two co-founders, alleging that Megatel III violated Chapter 12 of the Texas Civil Practice and Remedies Code by fraudulently filing lis pendens notices against several properties. Plaintiffs and Megatel III had entered into several contracts pursuant to which Plaintiffs agreed to sell certain lots in six different properties to Megatel III, upon which Megatel III would build homes. Litigation ensued regarding those contracts and Megatel III filed lis pendens notices as to the lots at issue to protect their rights. In this lawsuit, Plaintiffs contend that the lis pendens notices were fraudulent. Plaintiffs seek to recover the greater of (1) Plaintiff’s actual damages or (2) $10,000 per violation for each of the 15 alleged violations. Plaintiffs are also seeking attorneys’ fees. The court granted Megatel III’s motion to sever the case into six different cases related to each of the six properties at issue. Megatel III is currently awaiting Plaintiffs’ refiling of five of those suits and expects such suits to be resolved in arbitration. The sixth suit continues with the original cause number. A hearing was held on Megatel III’s motion to abate on April 20, 2023. However, the records of the court indicate that the case is closed. MM CCM 13MC, LLC v. Megatel Homes, LLC (Cause No. 429-00579-2022 – Collin County, Texas). On January 31, 2022, MM CCM 13MC, LLC filed a petition against Megatel Homes, LLC, alleging claims for breach of contract, declaratory relief, and quiet title. Plaintiff’s claims stem from a dispute concerning the parties’ rights and obligations under a right of first refusal agreement. Plaintiff claims that Megatel failed to exercise its right of first refusal to purchase vacant lots in Plano, Texas, and is preventing Plaintiff from selling those lots to third parties. Plaintiff seeks declaratory relief, including a declaration that (1) Megatel waived its right of first refusal, and (2) Plaintiff owns the lots at issue free and clear of any claim by Megatel. Plaintiff is also seeking attorneys’ fees. Plaintiff is not seeking monetary damages. Megatel disputes these allegations and has sought discovery from Plaintiff which may be dispositive of the legal dispute. Plaintiff’s Motion for Summary Judgment is pending. Trial was originally scheduled for July 17, 2023. However, based on evidence presented by Megatel Homes, the court (i) denied Plaintiff’s motion for summary judgment, and (ii) continued the trial until February 2024 to allow Megatel Homes to add VM Fund I, LLC, successor in interest to Plaintiff with respect to the property, as an additional party. On July 21, 2023, Megatel filed its Original Counterclaim and Crossclaim and Application for Temporary and Permanent Injunction against 13MC, VM Fund, and MM CCM 48M, LLC (“48M”), an affiliate of 13MC and VM Fund, for breach of contract, declaratory relief, and temporary and permanent injunctions. Megatel Homes III, LLC v. MM Northlake Phase 2–3, LLC, et al. (Cause No. 21-8109-431 – Denton County, Texas). On September 17, 2021, Megatel III filed a petition against MM Northlake Phase 2-3, LLC. Megatel III later added Taylor Morrison of Texas, Inc. as a defendant. Megatel III alleges that MM Northlake breached a lot takedown contract and that defendants engaged in a fraudulent transfer of lots in violation of the Uniform Fraudulent Transfer Act. On November 18, 2021, Taylor Morrison of Texas filed a petition against Megatel III alleging that Megatel III filed fraudulent lis pendens notices violation of Chapter 12 of the Texas Civil Practice and Remedies Code regarding lots owned by Taylor Morrison. Taylor Morrison is seeking the following forms of relief: a declaration concerning the parties’ rights to the lots at issue, damages including $10,000 for each of Megatel III’s 20 alleged violations of Chapter 12, exemplary damages, and attorneys’ fees. The case was dismissed on January 13, 2023, for want of prosecution. CADG Mercer MM Holdings, LLC, et. al v. Megatel Homes III, LLC (Cause No. DC-19-18033 – Dallas County, Texas). This suit was originally filed by Megatel III in November 2019 as a breach of contract suit. In 66 April 2020, Defendants filed counterclaims for judgment on a promissory note and breach of contract. In April 2023, the remaining parties went to trial on the sole remaining claim for judgment of the promissory note. The jury returned a verdict in favor of Megatel III, finding that no damages had been sustained by the lender. On July 13, 2023, a hearing by submission was conducted regarding plaintiff’s motion for attorneys’ fees. At a hearing held on August 18, 2023, the court denied plaintiff’s motion for sanctions against Megatel III and its counsel. Rainier Medical Investors LLC & RMI River Walk Investors LP v. Centurion Riverwalk, LLC, et al. (Cause No. 19-0111-292 – Denton County, Texas). Plaintiff Rainier Medical Investors LLC and Plaintiff RMI River Walk Investors, LP (“Rainier Plaintiffs”) brought claims against Defendant Centurion Riverwalk, LLC (“Centurion”) and Defendant 2M Riverwalk, LLC (“2M,” together with Centurion, “Rainier Defendants”) and alleged various causes of action against other defendants, including Megatel Lakeshores TH, LLC (“Megatel TH”). Megatel TH asserted a cross-petition against Rainier Defendants and Third-Party Defendant Moayedi for statutory fraud, fraudulent inducement, and breach of contract (“Cross-Claims”). The case was dismissed for want of prosecution on September 30, 2022. Megatel Homes III, LLC v. Wilbow-Windhaven Development Corporation (Cause No. 18-4646-362 – Denton County, Texas). On May 25, 2018, Megatel III filed a petition against Wilbow-Windhaven Development Corporation, Centurion Acquisitions, L.P., and CADG Windhaven, L.P., asserting claims for breach of contract, fraud, indemnity, declaratory judgment, and attorneys’ fees. On June 25, 2018, Wilbow-Windhaven filed counterclaims against Megatel III for breach of contract, and a declaratory judgment regarding the parties’ rights and obligations under the contract at issue. The dispute relates to the parties’ performance under a lot takedown agreement pursuant to which Wilbow- Windhaven was obligated to develop certain real estate parcels in accordance with certain specified standards and to sell those lots to Megatel III. In addition to declaratory relief, Wilbow-Windhaven seeks an unspecified amount of damages in excess of $1 million, attorneys’ fees, and pre- and post-judgment interest. Due to a lack of activity in the case, the court will hold a dismissal hearing on September 15, 2023. No assurances can be given as to the result of the foregoing litigation or the impact, if any, of such result on one or more of the Developer, the Homebuilder, the MCI PIF II Fund, their principals and affiliates, and the Developer’s ability to continue funding the Development. TAX MATTERS Opinion On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the City, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”), (1) interest on the Bonds for federal income tax purposes will be excludable from the “gross income” of the holders thereof and (2) the Bonds will not be treated as “specified private activity bonds” the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the “Code”). Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state, or local tax consequences of the purchase, ownership or disposition of the Bonds. See “APPENDIX D – FORM OF OPINION OF BOND COUNSEL.” In rendering its opinion, Bond Counsel to the City will rely upon (a) certain information and representations of the City, including information and representations contained in the City’s federal tax certificate, and (b) covenants of the City contained in the Bond documents relating to certain matters, including arbitrage and the use of the proceeds of the Bonds and the property financed or refinanced therewith. Failure by the City to observe the aforementioned representations or covenants could cause the interest on the Bonds to become taxable retroactively to the date of issuance. 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 67 the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel to the City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City has not been retained to monitor compliance with these requirements subsequent to the issuance of the Bonds. Bond Counsel’s opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel’s opinion is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds. A ruling was not sought from the Internal Revenue Service by the City with respect to the Bonds or the property financed or refinanced with proceeds of the Bonds. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an Internal Revenue Service audit is commenced, under current procedures the Internal Revenue Service is likely to treat the City as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Federal Income Tax Accounting Treatment of Original Issue Discount The initial public offering price to be paid for one or more maturities of the Bonds may be less than the principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an initial owner’s basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount 68 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. 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 69 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. Winstead PC serves as Underwriter’s Counsel. The legal fees paid to Bond Counsel and Underwriter’s Counsel are contingent upon the sale and delivery of the Bonds. Legal Opinions The City will furnish the Underwriter a transcript of certain certified proceedings incident to the authorization and issuance of the Bonds. Such transcript will include a certified copy of the approving opinion of the Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State, to the effect that the Bonds are valid and binding special obligations of the City. The City will also furnish the legal opinion of Bond Counsel, to the effect that, based upon an examination of such transcript, the Bonds are valid and binding special obligations of the City under the Constitution and laws of the State. The legal opinion of Bond Counsel will further state that the Bonds, including principal thereof and interest thereon, are payable from and secured by a pledge of and lien on the Pledged Revenues. Bond Counsel will also provide a legal opinion to the effect that interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described above under the caption “TAX MATTERS,” including the alternative minimum tax consequences for corporations. A copy of the opinion of Bond Counsel is attached hereto as “APPENDIX D – FORM OF OPINION OF BOND COUNSEL.” Except as noted below, Bond Counsel did not take part in the preparation of the Limited Offering Memorandum, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Bonds in the Limited Offering Memorandum under the captions or subcaptions “PLAN OF FINANCE – The Bonds”, “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE BONDS” (except for the last paragraph under the subcaption “General”), “ASSESSMENT PROCEDURES” (except for the subcaptions “Assessment Methodology” and “Assessment Amounts”), “THE DISTRICT,” “TAX MATTERS,” “LEGAL MATTERS – Legal Proceedings,” “LEGAL MATTERS – Legal Opinions,” “SUITABILITY FOR INVESTMENT,” “CONTINUING DISCLOSURE” (except for the subcaption “The City’s Compliance with Prior Undertakings”), “REGISTRATION AND QUALIFICATION OF BONDS FOR SALE,” “LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS” and APPENDIX A 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. 70 The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Litigation – The City At the time of delivery and payment for the Bonds, the City will certify that, except as disclosed herein, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or overtly threatened against the City affecting the existence of the District, or seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof, in accordance with the Indenture, or the collection or application of Assessments securing the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Assessment 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 Placement 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”). Additionally, Mr. Mehrdad Moayedi and his affiliated entities have been and are parties to pending and 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. For a description of litigation and other matters related to affiliated entities of the Developer, see “BONDHOLDERS’ RISKS – Developer Principal Financial Relationships and Other Matters Relating to Developer Affiliates.” SUITABILITY FOR INVESTMENT Investment in the Bonds poses certain economic risks. See “BONDHOLDERS’ RISKS”. The Bonds are not rated by any nationally recognized municipal securities rating service. No dealer, broker, salesman or other person has been authorized by the City or the Underwriter to give any information or make any representations, other than those contained in this Limited Offering Memorandum, and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. Additional information will be made available to each prospective investor, including the benefit of a site visit to the City and the opportunity to ask questions of the Developer, as such prospective investor deems necessary in order to make an informed decision with respect to the purchase of the Bonds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Bonds upon an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.” Under existing constitutional and statutory law and judicial decisions, including the federal bankruptcy code, the remedies specified by the Indenture and the Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with 71 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. 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 and Regions Bank (in such capacity, the “Dissemination Agent”) have entered into a Continuing Disclosure Agreement (the “City Disclosure Agreement”) 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 City Disclosure Agreement, 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 D-1 – Form of City Disclosure Agreement.” Under certain circumstances, the failure of the City to comply with its obligations under the City Disclosure Agreement 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 City Disclosure Agreement 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 City Disclosure Agreement. 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 City Disclosure Agreement. 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 City Disclosure Agreement or from any statement made pursuant to the City Disclosure Agreement. The City’s Compliance with Prior Undertakings The City believes it has complied in all material respects with its continuing disclosure undertakings pursuant to the Rule during the past 5 years. The Developer The Developer, the Administrator, and the Dissemination Agent have entered into a Continuing Disclosure Agreement (the “Developer Disclosure Agreement”) 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 Developer Disclosure Agreement, 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 D-2 – Form of Developer Disclosure Agreement.” Under certain circumstances, the failure of the Developer or the Administrator to comply with its obligations under the Developer Disclosure Agreement 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 Developer Disclosure Agreement would allow the Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an action for specific performance. The Developer Disclosure Agreement 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 72 provided in the Developer Disclosure Agreement. The Developer has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided in this Limited Offering Memorandum, except as provided in the Developer Disclosure Agreement. 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 Developer Disclosure Agreement or from any statement made pursuant to the Developer Disclosure Agreement. The Developer’s Compliance with Prior Undertakings The Developer has not previously entered into a continuing disclosure agreement in accordance with the Rule. The owners of the Developer, in their capacity as owners of another developer entity, entered into their first continuing disclosure agreement in accordance with the Rule in July 2023. To the best of Megatel’s knowledge, Centurion American Development Group (“Centurion American”) has developed all of the PIDs wherein Megatel has purchased lots. In no such instance has Megatel ever entered into a “continuing disclosure agreement” relative to the issuance of PID Bonds. Further, Megatel has never directly entered into any agreement regarding a PID either (i) assigning to Megatel any continuing disclosure obligations, or (ii) contractually obligating Megatel to provide information regarding the velocity of home sales, the sales price of homes, or any similar information. Megatel is aware that its affiliates are now developing lots in several PIDs and each affiliate will be undertaking certain continuing disclosure obligations relative to the velocity of home sales, home sales prices, and related information. Megatel will be providing this information to its affiliates so that each affiliate can timely comply with its continuing disclosure obligations. 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 $ , which includes Underwriter’s Counsel’s fee 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, 73 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. 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 74 rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (13) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that comply with federal Securities and Exchange Commission Rule 2a-7, and (14) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, and have a duration of one year or more and are invested exclusively in obligations described in this paragraph or have a duration of less than one year and the investment portfolio is limited to investment grade securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than “AAA” or “AAA-m” or an equivalent by at least one nationally recognized rating service. The City may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to 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 75 the report, (3) the beginning market value, the ending market value and the fully accrued interest for the reporting period of each pooled fund group, (4) the book value and market value of each separately listed asset and fund type invested at the beginning and end of the reporting period by the type of asset and fund type invested, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution; (3) require any investment officers’ with personal business relationships or relatives with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City’s investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the City and the business organization that are not authorized by the City’s investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the City’s entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management 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 76 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. Source of Certain Information The information contained in this Limited Offering Memorandum relating to the description of the Improvement Area #1 Improvements generally and, in particular, the information included in the maps in the Limited Offering Memorandum and in the sections captioned “PLAN OF FINANCE” (except for “– The Bonds”), “THE IMPROVEMENT AREA #1 IMPROVEMENTS,” “THE DEVELOPMENT,” “THE DEVELOPER AND THE HOMEBUILDER,” and “BONDHOLDERS’ RISKS” (only as it pertains to the Developer, the Homebuilder, and their affiliates, the Improvement Area No. 1 Improvements, and the Development), “LEGAL MATTERS – Litigation – The Developer,” “CONTINUING DISCLOSURE – The Developer and “– The Developer’s Compliance with Prior Undertakings,” “APPENDIX E-2,” and “APPENDIX F.” 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. 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, 77 UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED HEREIN TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE” HEREIN. AUTHORIZATION AND APPROVAL The City Council has approved by resolution this Limited Offering Memorandum and the City Council has authorized this 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 approved the form and content of the final Limited Offering Memorandum. THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY. THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX A GENERAL INFORMATION REGARDING THE CITY AND SURROUNDING AREAS The following information has been derived from various sources, including the U.S. Census and the Municipal Advisory Council of Texas. While such sources are believed to be reliable, no representation is made as to the accuracy thereof. Location and Population The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road 455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety (police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general administrative services. The 2020 Census population for the City was 16,896, while the current estimated population is 23,960. Historical Employment in Collin County Average Annual 2023 (1)2022 2021 2020 2019 Civilian Labor Force 642,011 625,323 600,965 579,363 567,100 Total Employed 618,877 605,500 574,762 543,037 549,597 Total Unemployed 23,134 19,823 26,203 36,326 17,503 Unemployment Rate 3.6%3.2%4.4%6.3%3.1% _____________ (1) Data through May 2023. 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. Employer Product or Service Employees Anna Independent School District Education 713 Walmart Retail 412 Pate Rehab Medical 162 City of Anna Municipal Government 152 Brookshire’s Grocery Store 84 Bronco Manufacturing Machine Shop 33 Hurricane Creek Country Club Country Club 51 Love’s Travel Shop Retail 47 McDonald’s Restaurant 40 Tri-Country Vet Vet Clinic 12 Source: City’s Annual Comprehensive Financial Report for Fiscal Year Ended September 30, 2022 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 Mesquite (2021)City of Frisco (2020)City of Plano (2022) Approximately 14 miles from the City Approximately 28 miles from the City Approximately 27 miles from the City Employer Employees Employer Employees Employer Employees Mesquite ISD 5,487 Frisco ISD 7,442 JP Morgan Chase 8,108 Town East Mall 2,750 City of Frisco 1,628 Capital One Finance 7,273 United Parcel Service Inc.2,300 T-Mobile USA 1,000 Bank of America 4,500 Baker Triangle 1,900 Mario Sinacola & Sons Excavating 800 Toyota Motor North America 4,018 City of Mesquite 1,251 Conifer 615 Liberty Mutual Insurance 2,519 Eastfield College 950 Baylor Medical Center 460 AT&T Foundry 2,500 Dallas Regional Medical Center 900 Fiserv 460 Ericsson 2,457 Wal-Mart Supercenter 850 IKEA Frisco 423 Medical City Plano 2,332 Pepsi Beverages Co.800 UT Southwestern/Texas Health Hospital 415 USAA 2,092 Ashley Furniture 650 Baylor Scott White/Centennial Hospital 400 Samsung Electronics America 2,081 City of Grapevine (2022) Approximately 49 miles from the City Employer Employees Gaylord Texas Resort & Conv Ctr 2,000 Dallas/Ft. Worth Int’l Airport 1,980 Grapevine-Colleyville ISD 1,700 Paycom 900 City of Grapevine 700 Baylor Medical 660 Great Wolf Lodge 600 Hyatt Regency DFW 500 Texas Toyota Grapevine 350 American Warranty Service 340 City of Dallas (2022) Approximately 32 miles from the City Employer Employees Dallas ISD 23,271 City of Dallas 13,000 AT&T Inc.12,600 Medical City Dallas 10,864 Parkland Health & Hosp Sys 10,406 Texas Instruments Inc.9,800 Dallas County Comm Coll 8,230 Methodist Dallas Med Ctr 6,887 Dallas County 6,500 Children’s Health 6,276 THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX B FORM OF INDENTURE THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX C SERVICE AND ASSESSMENT PLAN THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX D FORM OF OPINION OF BOND COUNSEL THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX E-1 FORM OF DISCLOSURE AGREEMENT OF ISSUER THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX E-2 FORM OF DISCLOSURE AGREEMENT OF DEVELOPER THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX F DEVELOPMENT AGREEMENT THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX G FORM OF REIMBURSEMENT AGREEMENT THIS PAGE IS LEFT BLANK INTENTIONALLY. APPENDIX G APPRAISAL THIS PAGE IS LEFT BLANK INTENTIONALLY. Item No. 5.j. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Steven Smith AGENDA ITEM: Approve Resolution Authorizing Restoration of Historic Anna Fire Truck. (Interim Public Works Director Steven Smith) SUMMARY: In 2021 a landowner in Sweetwater, Texas contacted staff stating that he was in possession of a 1948 GMC fire truck which was previously in service in the City of Anna, Texas. Once verified, staff acquired the vehicle. Fleet personnel assessed the vehicle, and it was substantially intact. Staff made several attempts to contact restoration facilities that handle classic fire truck restoration and repair. Luckily, a facility was located in Pilot Point, Texas and it is the sole facility in the region able to complete this type of project. FINANCIAL IMPACT: Funding for the restoration of the fire truck is budgeted in the FY2024 Fire Department Capital Improvement Fund in the amount of $56,500. BACKGROUND: Staff recommends approval of the resolution as a consent agenda item. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Neighborly. ATTACHMENTS: 1. Resolution and Quote - Historic Fire Truck Restoration 2. Sole Source 3. Fire Truck Restoration Agreement CITY OF ANNA, TEXAS RESOLUTION NO. _______________ A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PURCHASE ORDER FOR THE RESTORATION OF A HISTORIC FIRE TRUCK BY FIRETRUCKS OF AMERICA IN THE AMOUNT NOT TO EXCEED FIFTY-SIX THOUSAND FIVE HUNDRED DOLLARS AND ZERO CENTS ($56,500.00); AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Anna is the owner of a 1948 GMC fire truck which was previously in service in the City of Anna, Texas; and, WHEREAS, the City is seeking to restore the historic vehicle to honor the history of the City of Anna Fire Department and the Anna community; and, WHEREAS, the City of Anna is seeking to contract with Firetrucks of America for the restoration project; and, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1.Recitals Incorporated The recitals above are incorporated herein as if set forth in full for all purposes. Section 2.Authorization of Payment and Funding. That the City Council of the City of Anna hereby authorizes the City Manager to execute a purchase order for Firetrucks of America in an amount not to exceed $56,500.00, including: That funding for the restoration shall come from existing fund balance in the City of Anna Fire Department Capital Improvement Fund. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this ___ day of September, 2023. ATTEST: APPROVED: __________________________ __________________________ City Secretary, Carrie Land Mayor, Nate Pike Exhibit A Restoration Agreement The City of Anna, Texas a home-rule municipality (the “City”) and Firetrucks of America LLC, a Texas limited liability company (“Vendor”) enter into this Restoration Agreement (this “Agreement restoration of a 1948 GMC Fire Truck owned solely by the City (the “Fire Truck”). 1.) Because of the comprehensive nature of the restoration process any changes or deviations from the scope of work shown in the quote attached as Exhibit A (the “Scope of Work”) will need to be submitted to the City within 30 days. No such changes and no additional work shall proceed without approval. 2.) The City will be providing a $25,000.00 deposit (the "Deposit") upon receipt of which Vendor shall commence work and diligently proceed to restore the Fire Truck according to the Scope of Work and in a good and workmanlike manner without undue delay until the work is fully completed. Except as otherwise specified in this Agreement, the balance due from Vendor shall be paid upon full completion of the Scope of Work and any changes agreed to by the City and Vendor. 3.) Monthly updates will be provided including photos and video recordings of the Fire Truck and work performed. The City may inspect the vehicle during normal business hours by providing at least 48 hours’ advanced notice. 4.) Quality, comprehensive restorations of antique vehicles take time. Once the project has commenced the agreed deadline for Vendor to fully perform the Scope of Work is 12 months from the date that Vendor receives the Deposit. 5.) Insurance on the vehicle while in possession of Fire Trucks of American is the responsibility of the City. 6.) The City may at any time remove the vehicle upon payment of all outstanding invoices for work actually performed. Vendor shall provide any such invoices to the City with 48 hours of the City request for same. 7.) All parts removed from the vehicle will either be restored or replaced, and all parts removed and replaced shall be returned to the City. 120 W. 7th St., Anna, TX 75409 Phone: 972-924-3325 www.annatexas.gov 8.) If at any time Vendor determines that it is not able to complete the Scope of Work on or before the deadline stated above they will need to notify the City within 3 business daysVendor will provide invoices of work completed to date and the City will be credited for any unfinished work. 9.) Vendor executes and will perform this Agreement as an independent contractor, not as an employee of the City and all services by Vendor under this Agreement shall be provided as an independent contractor. The City shall not be responsible for payment of payroll taxes and charges under federal and local law. At no time shall the City have any control over or charge of the Vendor’s services under this Agreement or related work or undertakings, nor the means, methods, techniques, sequences or procedures utilized for the performance, or any work or other activity(ies) related to same. This Agreement does not create a joint enterprise or venture between the City and Vendor. This section will survive the termination of this Agreement. 10.) INDEMNIFICATION and HOLD HARMLESS. VENDOR, INCLUDING ITS RESPECTIVE SUCCESSORS AND ASSIGNS, HEREBY COVENANT AND AGREE TO RELEASE, DEFEND, HOLD HARMLESS, AND INDEMNIFY THE CITY AND ITS OFFICERS, OFFICIALS, AGENTS, REPRESENTATIVES, SERVANTS AND EMPLOYEES (COLLECTIVELY, THE “RELEASED PARTIES”), FROM AND AGAINST ALL THIRD- PARTY CLAIMS, SUITS, JUDGMENTS, DAMAGES, AND DEMANDS (TOGETHER, “CLAIMS”) AGAINST THE CITY OR ANY OF THE RELEASED PARTIES, WHETHER REAL OR ASSERTED INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEY’S FEES AND RELATED EXPENSES, EXPERT WITNESS FEES, CONSULTANT FEES, AND OTHER COSTS, ARISING OUT OF THE NEGLIGENCE OR OTHER WRONGFUL CONDUCT OF VENDOR, INCLUDING THE NEGLIGENCE OF ITS RESPECTIVE EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, MATERIAL MEN, AND/OR AGENTS, IN CONNECTION WITH THE SCOPE OF WORK AND ANY OTHER OF ITS OBLIGATIONS UNDER THIS AGREEMENT. 11.) Vendor shall not assign this Agreement without the written consent of the City. 12. All notices required or permitted to be delivered to the parties shall be sent by certified mail, return receipt requested or by hand delivery with receipt at the following addresses: If to the City: City Manager City of Anna, Texas 120 W. 7th St. Anna, TX 75409 If to Vendor: Firetrucks of America 927 East McDonald Drive Pilot Point, Texas 76258 13.) This Agreement may be modified or amended only in writing, signed by all parties hereto and in accordance with the terms hereof. 14.) The exhibits to this Agreement are incorporated herein for all purposes. This Agreement constitutes the entire agreement with respect to the subject matter hereof. In the event of conflict between the exhibits and this Agreement, the terms of this Agreement shall prevail. Both Parties have participated in the drafting of this Agreement and accordingly no party shall be given credit therefor in the interpretation of this Agreement. There are no third-party beneficiaries to this Agreement. Vendor Firetrucks of America LLC, a Texas limited liability company Owner: Robert Longo By: _____________________________________ Shelly Hollingsworth, its managing member Date: ___________________________________ City of Anna Ryan Henderson Interim City Manager Signature: _______________________________ Date: ___________________________________ EXHIBIT A Item No. 6.a. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Terri Doby AGENDA ITEM: Consider/Discuss/Action approving an Ordinance adopting the FY2024 Budget. (Budget Manager Terri Doby) SUMMARY: The Annual Budget is developed through an extensive process of reviewing requests received from various City departments, then prioritizing those requests in a manner that utilizes resources effectively, within fiscal constraints, while working to achieve goals set forth by the City Council. The proposed budget was presented to the City Council on August 8th and was posted on the City’s website on August 9th. The public hearing on the proposed budget and tax rate were conducted on September 5th. The FY2024 budget is funded with a tax rate of $0.510717 per $100 in taxable value, which less than the tax rate adopted last year. While budgets are always a challenge, we have worked diligently to propose a budget that is both balanced and sufficient to meet the needs of the coming fiscal year while sustainable for years to come. We express our appreciation to the City Council for their diligent efforts throughout the year in providing guidance, direction and support for our efforts to serve the City of Anna. As Anna continues to grow, the city remains committed to its Strategic Success Statements. The FY2024 budget is designed to preserve and enhance the quality of existing services and respond appropriately to our City’s continuing growth and development. FINANCIAL IMPACT: Process to adopt the FY2023-2024 Budget. BACKGROUND: Texas Local Government Code 102.007 requires the adoption of the budget by the governing body of the municipality by a record vote. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. FY2024 Budget Adoption Ordinance 2. FY2024 Adopted Budget Exhibit A CITY OF ANNA, TEXAS ORDINANCE NO. Ordinance Adopting the Budget for the 2023 – 2024 Fiscal Year AN ORDINANCE MAKING APPROPRIATIONS FOR THE SUPPORT OF THE CITY OF ANNA FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2023 AND ENDING SEPTEMBER 30, 2024; APPROPRIATING MONEY TO AN INTEREST AND SINKING FUND TO PAY INTEREST AND PRINCIPAL ON THE CITY’S INDEBTEDNESS; AND ADOPTING THE ANNUAL BUDGET OF THE CITY OF ANNA FOR THE 2023 – 2024 FISCAL YEAR. WHEREAS, the budget, appended hereto as Exhibit A, for the fiscal year beginning October 1, 2023 and ending September 30, 2024, was duly presented to the City Council by the City Manager and a public hearing was ordered by the City Council and a public notice of said hearing was caused to be given by the City Council and said notice was published in the Anna- Melissa Tribune and said public hearing was held according to said notice; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA THAT: SECTION 1. The appropriations for the fiscal year beginning October 1, 2023 and ending September 30, 2024 for the support of the general government of the City of Anna, Texas, be fixed and determined for said terms in accordance with the expenditures shown in the City’s fiscal year 2023 – 2024 budget, a copy of which is appended hereto as Exhibit A and incorporated herein as if set forth in full; SECTION 2. The budget, as shown in words and figures in Exhibit A, is hereby approved in all respects and adopted as the City’s budget for the fiscal year beginning October 1, 2023 and ending September 30, 2024. SECTION 3. There is hereby appropriated the amount shown in said budget necessary to provide for an interest and sinking fund for the payment of principal and interest and the retirement of the bonded debt requirements of fiscal year 2023 – 2024 of the City of Anna. PASSED AND APPROVED by record roll call vote on this, the 12th day of September 2023. Ayes Nays Abstained ATTESTED: _________________________ City Secretary Carrie L. Land APPROVED: _________________________ Mayor Nate Pike Exhibit A FY2024 PROPOSED BUDGET General Debt Service Utility Stormwater Grant Special Revenue Public Finance BEGINNING BALANCES 9,784,054$ 79,294$ 6,963,206$ 248,150$ 13,299$ 155,624$ 377,050$ REVENUES: Property Taxes 11,191,000$ 4,665,234$ -$ -$ -$ -$ -$ Sales Tax 4,293,000 - - - - - - Franchise and Local Taxes 825,000 - - - - - - Charges for Services 730,000 - 21,492,570 345,000 - - - Fines 300,000 - - - - 7,500 - Permits, Licenses and Fees 4,330,000 - 1,286,000 5,000 - - - Intergovernmental 23,000 - - - - - - Investment Income 500,000 4,000 302,000 - 35,000 1,000 - Other Revenues 14,000 - 236,600 - - 30,500 - TOTAL 22,206,000$ 4,669,234$ 23,317,170$ 350,000$ 35,000$ 39,000$ -$ Transfers from other funds - - - - - - - TOTAL REVENUES 22,206,000$ 4,669,234$ 23,317,170$ 350,000$ 35,000$ 39,000$ -$ TOTAL AVAILABLE RESOURCES 31,990,054$ 4,748,528$ 30,280,376$ 598,150$ 48,299$ 194,624$ 377,050$ EXPENDITURES: Payroll 16,966,300$ -$ 2,894,454$ 115,040$ -$ 1,800$ -$ Supplies 1,098,921 - 255,008 9,000 - - - Maintenance 597,300 - 1,286,050 - - - - Services 3,537,175 5,500 11,062,238 32,500 - 9,325 - Debt Service - 4,665,234 6,050,185 - - - - Capital Outlay 6,000 - - - - - - Capital Improvement - - - - - - - TOTAL 22,205,696$ 4,670,734$ 21,547,935$ 156,540$ -$ 11,125$ -$ Transfers to other funds 2,300,000 - 975,000 - - - - TOTAL EXPENDITURES 24,505,696$ 4,670,734$ 22,522,935$ 156,540$ -$ 11,125$ -$ ENDING FUND BALANCES 7,484,358$ 77,794$ 7,757,441$ 441,610$ 48,299$ 183,499$ 377,050$ CITY OF ANNA CONSOLIDATED BUDGET SUMMARY OF REVENUE AND EXPENDITURES Major Governmental Enterprise Restricted Revenue ANNUAL BUDGET FOR FISCAL YEAR 2024 CIP Funds Park Develop. Fire Capital Seizure Community Develop. Economic Develop. Housing Finance Community Investment Budget FY2024 Estimated FY2023 Actual FY2022 4,413,090$ 318,538$ 15,212$ 7,691,277$ 5,219,689$ 550,517$ 135,015,490$ 170,844,490$ 75,556,381$ 64,040,303$ -$ -$ -$ -$ -$ -$ -$ 15,856,234$ 13,327,686$ 10,084,783$ - - - 2,460,000 - - - 6,753,000 6,753,100 6,156,657 - - - - - - - 825,000 825,000 888,723 1,300,000 15,000 - - 78,120 - - 23,960,690 18,825,333 18,955,624 - - - - - - - 307,500 392,000 249,928 - - - - - - - 5,621,000 5,986,300 8,799,585 - - - - - - - 23,000 72,000 72,913 155,000 2,000 - 15,000 25,000 - 3,390,000 4,429,000 4,999,500 471,249 75,000 - - - - - 33,934,800 34,290,900 107,986,100 26,618,677 1,530,000$ 17,000$ -$ 2,475,000$ 103,120$ -$ 37,324,800$ 92,066,324$ 159,167,019$ 72,298,139$ - - - - - - 3,275,000 3,275,000 3,175,000 13,607,093 1,530,000$ 17,000$ -$ 2,475,000$ 103,120$ -$ 40,599,800$ 95,341,324$ 162,342,019$ 85,905,232$ 5,943,090$ 335,538$ 15,212$ 10,166,277$ 5,322,809$ 550,517$ 175,615,290$ 266,185,814$ 237,898,400$ 149,945,535$ 135,793$ -$ -$ 462,634$ -$ -$ -$ 20,576,021$ 18,546,244$ 14,224,541$ 227,000 29,500 - 16,100 - - - 1,635,529 1,471,406 1,191,021 - - - - 50,000 - - 1,933,350 1,162,575 1,636,509 38,100 - - 4,289,665 484,550 - - 19,459,053 17,121,147 13,383,429 - - - 203,006 - - - 10,918,425 8,174,555 4,438,931 83,000 130,000 - 350,000 - - - 569,000 149,000 335,726 5,220,400 - - - - - 107,940,563 113,160,963 30,656,100 17,578,716 5,704,293$ 159,500$ -$ 5,321,405$ 534,550$ -$ 107,940,563$ 168,252,341$ 77,281,027$ 52,788,873$ - - - - - - - 3,275,000 3,175,000 13,607,092 5,704,293$ 159,500$ -$ 5,321,405$ 534,550$ -$ 107,940,563$ 171,527,341$ 80,456,027$ 66,395,965$ 238,797$ 176,038$ 15,212$ 4,844,872$ 4,788,259$ 550,517$ 67,674,727$ 94,658,473$ 157,442,373$ 83,549,570$ CITY OF ANNA CONSOLIDATED BUDGET SUMMARY OF REVENUE AND EXPENDITURES Total All FundsRestricted Revenue Component Units ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 64,040,303$ 44,392,385$ 75,556,381$ 170,844,490$ REVENUES: Property Taxes 10,084,783$ 12,876,950$ 13,327,686$ 15,856,234$ Sales Tax 6,156,657 6,753,100 6,753,100 6,753,000 Franchise and Local Taxes 888,723 825,000 825,000 825,000 Charges for Services 18,955,624 16,700,263 18,825,333 23,960,690 Fines 249,928 302,000 392,000 307,500 Permits, Licenses and Fees 8,799,585 4,772,000 5,986,300 5,621,000 Intergovernmental 72,913 - 72,000 23,000 Investment Income 471,249 218,500 4,999,500 4,429,000 Other Revenues 26,618,677 112,981,500 107,986,100 34,290,900 TOTAL 72,298,139$ 155,429,313$ 159,167,019$ 92,066,324$ Transfers from other funds 13,607,093 1,418,000 3,175,000 3,275,000 TOTAL REVENUE 85,905,232$ 156,847,313$ 162,342,019$ 95,341,324$ TOTAL AVAILABLE RESOURCES 149,945,535$ 201,239,698$ 237,898,400$ 266,185,814$ EXPENDITURES: Payroll 14,224,541$ 18,606,244$ 18,546,244$ 20,576,021$ Supplies 1,191,021 1,411,406 1,471,406 1,635,529 Maintenance 1,636,509 1,162,575 1,162,575 1,933,350 Services 13,383,429 14,246,147 17,121,147 19,459,053 Debt Service 4,438,931 5,770,981 8,174,555 10,918,425 Capital Outlay 335,726 204,000 149,000 569,000 Capital Improvement 17,578,716 95,329,863 30,656,100 113,160,963 TOTAL 52,788,873$ 136,731,216$ 77,281,027$ 168,252,341$ 13,607,092 1,418,000 3,175,000 3,275,000 TOTAL EXPENDITURES 66,395,965$ 138,149,216$ 80,456,027$ 171,527,341$ ENDING FUND BALANCES 83,549,570$ 63,090,482$ 157,442,373$ 94,658,473$ Transfers to other funds CITY OF ANNA COMBINED FUNDS SUMMARY OF REVENUE AND EXPENDITURES ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA Actual Estimated Budget Increase 2021-22 2022-23 2023-24 (Decrease) GENERAL FUND City Manager's Office City Manager 1.0 1.0 1.0 - Assistant City Manager 1.0 2.0 2.0 - Assistant to the City Manager 1.0 1.0 1.0 - Budget Manager 1.0 1.0 1.0 - Communications Manager 1.0 1.0 1.0 - 5.0 6.0 6.0 - City Secretary City Secretary 1.0 1.0 1.0 - Deputy City Secretary 1.0 1.0 1.0 - Admin. Assistant / Records Clerk 0.5 1.0 1.0 - 2.5 3.0 3.0 - Information Technology IT Director 1.0 1.0 1.0 - Systems Administrator 1.0 1.0 1.0 - IT Help Desk Support - 1.0 1.0 - 2.0 3.0 3.0 - Finance Director of Finance 1.0 1.0 1.0 - Assistant Director of Finance 1.0 1.0 1.0 - Senior Accountant 1.0 1.0 1.0 - Accountant 1.0 1.0 1.0 - Accounting Technician 1.0 1.0 1.0 - 5.0 5.0 5.0 - Human Resources Director of Human Resources 1.0 1.0 1.0 - Human Resources Manager 1.0 1.0 1.0 - Human Resources Coordinator 1.0 1.0 1.0 - 3.0 3.0 3.0 - Fleet and Facilities Mechanic 1.0 1.0 1.0 - Fleet Maintenance Technician - 1.0 1.0 - Facilities Specialist 1.0 1.0 1.0 - Custodian - 2.0 2.0 - 2.0 5.0 5.0 - Municipal Court Municipal Court Administrator 1.0 1.0 1.0 - Municipal Court Clerk - 1.0 1.0 - 1.0 2.0 2.0 - PERSONNEL SUMMARY ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA Actual Estimated Budget Increase 2021-22 2022-23 2023-24 (Decrease) PERSONNEL SUMMARY Development Services Director of Development Services 1.0 1.0 1.0 - Planning Manager 1.0 1.0 1.0 - Administrative Assistant 1.0 1.0 1.0 - Planner II 1.0 1.0 1.0 - Plans Examiner 1.0 1.0 1.0 - GIS Manager 1.0 - - - Senior Building Inspector 1.0 1.0 1.0 - Building Inspector 2.0 2.0 2.0 - Building Official 1.0 1.0 1.0 - Development Services Technician 1.0 1.0 1.0 - Planning Technician - 1.0 1.0 - 11.0 11.0 11.0 - Police Police Chief 1.0 1.0 1.0 - Assistant Police Chief 1.0 1.0 1.0 - Records Administrator 1.0 1.0 1.0 - Property and Evidence Tech - 1.0 1.0 - Lieutenant 1.0 2.0 2.0 - Sergeant 4.0 4.0 4.0 - Sergeant Detective 1.0 1.0 1.0 - Corporal 4.0 4.0 4.0 - Police Officer 16.0 18.0 21.0 3.0 Detective 4.0 4.0 4.0 - 33.0 37.0 40.0 3.0 Fire Fire Chief 1.0 1.0 1.0 - Assistant Fire Chief 1.0 1.0 1.0 - Division Chief 1.0 1.0 1.0 - Battalion Chief 3.0 3.0 3.0 - Fire Prevention Captain 1.0 1.0 1.0 - Fire Shift Captain 3.0 3.0 3.0 - Fire Inspector Investigator - 1.0 1.0 - Fire Driver / Engineer 3.0 3.0 3.0 - Fire Fighter 12.0 16.5 28.5 12.0 Fire Services Coordinator 1.0 1.0 1.0 - 26.0 31.5 43.5 12.0 Community Enhancement Director of Neighborhood Services 1.0 1.0 - (1.0) Neighborhood Services Coordinator 1.0 1.0 1.0 - Administrative Assistant 1.0 1.0 1.0 - Code Compliance Manager 1.0 1.0 1.0 - Code Compliance Officer 2.0 3.0 3.0 - 6.0 7.0 6.0 (1.0) ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA Actual Estimated Budget Increase 2021-22 2022-23 2023-24 (Decrease) PERSONNEL SUMMARY Parks Parks Superintendent 1.0 1.0 1.0 - Parks Crew Leader 2.0 2.0 2.0 - Maintenance Worker 5.0 6.0 6.0 - 8.0 9.0 9.0 - Recreation and Library Services Director of Neighborhood Services - - 1.0 1.0 Assistant Director - - 1.0 1.0 Recreation Coordinator - - 3.5 3.5 - - 5.5 5.5 Streets Street Superintendent 1.0 1.0 1.0 - Crew Leader 1.0 2.0 2.0 - Traffic Safety Technician 1.0 1.0 1.0 - Right-of-Way Inspector - 1.0 1.0 - Maintenance Worker 6.0 5.0 5.0 - 9.0 10.0 10.0 - GENERAL FUND TOTAL 113.5 132.5 152.0 19.5 UTILITY FUND Public Works Administration Director of Public Works 1.0 1.0 1.0 - Assistant Director of Public Works 1.0 1.0 1.0 - City Engineer 1.0 1.0 1.0 - CIP Manager 1.0 1.0 1.0 - Construction Inspector 3.0 3.0 3.0 - Construction Supervisor 1.0 1.0 1.0 - Fleet and Facilities Superintendent 1.0 1.0 1.0 - Custodian 1.0 - - - GIS Manager - 1.0 1.0 - Public Works Coordinator 1.0 1.0 1.0 - Receptionist - 1.0 1.0 - 11.0 12.0 12.0 - Water Utility Operations Supervisor 1.0 1.0 1.0 - Utility Maintenance Field Supervisor 1.0 1.0 1.0 - Maintenance Worker 2.0 4.0 4.0 - Water Operator 2.0 2.0 2.0 - Utility Crew Leader 2.0 2.0 2.0 - Meter Service Crew Leader 1.0 1.0 1.0 - 9.0 11.0 11.0 - Wastewater Senior Wastewater Plant Operator 1.0 1.0 1.0 - Maintenance Worker I 6.0 5.0 5.0 - 7.0 6.0 6.0 - ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA Actual Estimated Budget Increase 2021-22 2022-23 2023-24 (Decrease) PERSONNEL SUMMARY Utility Billing Utility Billing Supervisor 1.0 1.0 1.0 - Senior Utility Billing Clerk - 1.0 1.0 - Utility Billing Clerk 3.0 2.0 2.0 - Admin. Assistant / Records Clerk 0.5 - - - 4.5 4.0 4.0 - UTILITY FUND TOTAL 31.5 33.0 33.0 - STORMWATER FUND Maintenance Worker I - 2.0 2.0 - - 2.0 2.0 - STORMWATER TOTAL - 2.0 2.0 - PARK DEVELOPMENT FUND Recreation Manager 1.0 - - - Assistant Director - 1.0 - (1.0) Parks Planning Manager 1.0 1.0 1.0 - Recreation Coordinator 1.5 3.0 - (3.0) 3.5 5.0 1.0 (4.0) PARK DEVELOPMENT TOTAL 3.5 5.0 1.0 (4.0) COMMUNITY DEVELOPMENT CORPORATION Director of Economic Development 1.0 1.0 1.0 - Assistant Director of Economic Develop. 1.0 1.0 1.0 - Economic Development Coordinator 1.0 1.0 1.0 - 3.0 3.0 3.0 - COMMUNITY DEVELOP. TOTAL 3.0 3.0 3.0 - 151.5 175.5 191.0 15.5 TOTAL EMPLOYEES, ALL FUNDS ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 6,572,245$ 7,532,411$ 9,963,033$ 9,784,054$ REVENUES: Property Taxes 8,004,989$ 9,418,264$ 9,869,000$ 11,191,000$ Sales Tax 3,847,911 4,293,100 4,293,100 4,293,000 Franchise and Local Taxes 888,723 825,000 825,000 825,000 Charges for Services 166,821 273,000 800,000 730,000 Permits, Licenses and Fees 5,871,137 4,305,000 4,904,000 4,330,000 Fines 241,274 300,000 390,000 300,000 Intergovernmental 47,640 - 72,000 23,000 Investment Income 90,387 50,000 565,000 500,000 Other Revenues 154,514 16,300 16,300 14,000 TOTAL OPERATIONAL REVENUE 19,313,396$ 19,480,664$ 21,734,400$ 22,206,000$ Transfers from other funds - - 25,000 - TOTAL REVENUES 19,313,396$ 19,480,664$ 21,759,400$ 22,206,000$ TOTAL AVAILABLE RESOURCES 25,885,641$ 27,013,075$ 31,722,433$ 31,990,054$ EXPENDITURES: Payroll 11,270,087$ 14,742,349$ 14,682,349$ 16,966,300$ Supplies 830,290 998,723 1,058,723 1,098,921 Maintenance 547,781 516,900 516,900 597,300 Services 3,150,089 3,126,407 3,126,407 3,537,175 Debt Service - - - - Capital Outlay 124,361 54,000 54,000 6,000 Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 15,922,608$ 19,438,379$ 19,438,379$ 22,205,696$ - 768,000 2,500,000 2,300,000 TOTAL EXPENDITURES 15,922,608$ 20,206,379$ 21,938,379$ 24,505,696$ ENDING FUND BALANCES 9,963,033$ 6,806,696$ 9,784,054$ 7,484,358$ Fund Balance Percentage 63% 35% 50% 34% CITY OF ANNA Transfers to other funds GENERAL FUND BY CATEGORY ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 EXPENDITURES: General Government: Administration 672,237$ 492,009$ 492,009$ 602,374$ City Council 35,965 33,778 33,778 41,500 City Manager's Office 1,059,942 1,420,367 1,420,367 1,297,523 City Secretary 278,791 362,509 362,509 379,026 Information Technology 753,749 875,833 875,833 929,280 Finance 643,225 665,735 665,735 670,970 Human Resources 383,320 584,522 584,522 588,858 Municipal Court 178,635 258,957 258,957 259,652 4,005,864$ 4,693,710$ 4,693,710$ 4,769,183$ Development Services 1,065,003$ 1,200,399$ 1,200,399$ 1,201,235$ Public Safety: Police 4,139,818$ 5,059,584$ 5,059,584$ 5,660,698$ Fire 3,367,229 4,616,629 4,616,629 5,985,929 7,507,047$ 9,676,213$ 9,676,213$ 11,646,627$ Community Enhancement 732,626$ 865,223$ 865,223$ 681,795$ Neighborhood Services Recreation and Library Services -$ -$ -$ 584,888$ Park Operations 710,831 808,111 808,111 892,596 710,831$ 808,111$ 808,111$ 1,477,484$ Public Works Streets 859,909$ 1,050,193$ 1,050,193$ 1,039,452$ Fleet and Facilities 1,041,328 1,144,530 1,144,530 1,389,920 1,901,237$ 2,194,723$ 2,194,723$ 2,429,372$ TOTAL OPERATIONAL EXPENDITURES 15,922,608$ 19,438,379$ 19,438,379$ 22,205,696$ Transfers to other funds - 768,000 2,500,000 2,300,000 TOTAL EXPENDITURES 15,922,608$ 20,206,379$ 21,938,379$ 24,505,696$ CITY OF ANNA GENERAL FUND BY DEPARTMENT ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 REVENUES: Property Taxes Current Taxes 7,942,603$ 9,319,764$ 9,690,000$ 11,129,000$ Delinquent Taxes 36,754 70,500 161,000 37,000 Penalty & Interest 25,632 28,000 18,000 25,000 8,004,989$ 9,418,264$ 9,869,000$ 11,191,000$ Sales Taxes Sales Taxes - General 3,078,329$ 3,473,100$ 3,473,100$ 3,473,000$ Sales Taxes - Streets 769,582 820,000 820,000 820,000 3,847,911$ 4,293,100$ 4,293,100$ 4,293,000$ Franchise and Local Taxes Franchise Fees 863,099$ 800,000$ 800,000$ 800,000$ Mixed Beverage Tax 25,624 25,000 25,000 25,000 888,723$ 825,000$ 825,000$ 825,000$ Charges for Services Rental Registration 81,972$ 200,000$ 465,000$ 450,000$ Rentals 84,400 73,000 73,000 80,000 Ambulance Fees 449 - 262,000 200,000 166,821$ 273,000$ 800,000$ 730,000$ Fines 241,274$ 300,000$ 390,000$ 300,000$ Permits, Licenses and Fees Residential Building Permits 3,631,562$ 3,200,000$ 3,140,000$ 2,700,000$ Commerical Building Permits 1,688,202 700,000 1,310,000 1,200,000 Other Miscellaneous Permits 195,982 160,000 177,000 166,000 Alarm Permits 16,304 15,000 5,000 5,000 Zoning and Subdivision Fees 287,948 200,000 210,000 200,000 Other Fees 51,139 30,000 62,000 59,000 5,871,137$ 4,305,000$ 4,904,000$ 4,330,000$ Intergovernmental Revenue 47,640$ -$ 72,000$ 23,000$ Investment Income 90,387$ 50,000$ 565,000$ 500,000$ Other Revenues Miscellaneous 151,464$ 16,300$ 16,300$ 14,000$ Donations 3,050 - - - 154,514$ 16,300$ 16,300$ 14,000$ TOTAL OPERATIONAL REVENUE 19,313,396$ 19,480,664$ 21,734,400$ 22,206,000$ CITY OF ANNA GENERAL FUND REVENUE SUMMARY ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 70,105$ 108,605$ 82,294$ 79,294$ REVENUES: Property Taxes 2,079,794$ 3,458,686$ 3,458,686$ 4,665,234$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services - - - - Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 4,344 2,500 2,500 4,000 Other Revenues - - - - TOTAL OPERATIONAL REVENUE 2,084,138$ 3,461,186$ 3,461,186$ 4,669,234$ Transfers from other funds - - - - TOTAL REVENUES 2,084,138$ 3,461,186$ 3,461,186$ 4,669,234$ TOTAL AVAILABLE RESOURCES 2,154,243$ 3,569,791$ 3,543,480$ 4,748,528$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies - - - - Maintenance - - - - Services 5,906 5,500 5,500 5,500 Debt Service 2,066,043 3,458,686 3,458,686 4,665,234 Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 2,071,949$ 3,464,186$ 3,464,186$ 4,670,734$ Transfers to other funds - - - - TOTAL EXPENDITURES 2,071,949$ 3,464,186$ 3,464,186$ 4,670,734$ ENDING FUND BALANCES 82,294$ 105,605$ 79,294$ 77,794$ CITY OF ANNA GENERAL OBLIGATION DEBT SERVICE FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 449$ 449$ 13,299$ 13,299$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise Fees and Local Taxes - - - - Charges for Services - - - - Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental Revenue 25,273 - - - Investment Income 10,949 - - 35,000 Other Revenues - - - - TOTAL OPERATIONAL REVENUE 36,222$ -$ -$ 35,000$ Transfers from other funds - - - - TOTAL REVENUES 36,222$ -$ -$ 35,000$ TOTAL AVAILABLE RESOURCES 36,671$ 449$ 13,299$ 48,299$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies 19,703 - - - Maintenance - - - - Services 3,669 - - - Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 23,372$ -$ -$ -$ Transfers to other funds - - - - TOTAL EXPENDITURES 23,372$ -$ -$ -$ ENDING FUND BALANCES 13,299$ 449$ 13,299$ 48,299$ CITY OF ANNA GRANT FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 165,576$ 113,051$ 145,249$ 155,624$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise Fees and Local Taxes - - - - Charges for Services - - - - Fines Municipal Jury 164 - - - Local Truancy Prevention 8,490 2,000 2,000 7,500 Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 1,150 - - 1,000 Other Revenues - - - - PEG Fees 6,750 7,000 7,000 7,000 Court Technology 6,571 2,500 2,500 6,000 Building Security 8,033 2,000 2,000 7,500 Child Safety 14,371 8,000 8,000 10,000 Other 280 - - - TOTAL OPERATIONAL REVENUE 45,809$ 21,500$ 21,500$ 39,000$ Transfers from other funds - - - - TOTAL REVENUES 45,809$ 21,500$ 21,500$ 39,000$ TOTAL AVAILABLE RESOURCES 211,385$ 134,551$ 166,749$ 194,624$ EXPENDITURES: Payroll -$ 1,800$ 1,800$ 1,800$ Supplies - - - - Maintenance - - - - Services 3,172 9,325 9,325 9,325 Debt Service - - - - Capital Outlay 62,964 - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 66,136$ 11,125$ 11,125$ 11,125$ Transfers to other funds - - - - TOTAL EXPENDITURES 66,136$ 11,125$ 11,125$ 11,125$ ENDING FUND BALANCES 145,249$ 123,426$ 155,624$ 183,499$ CITY OF ANNA SPECIAL REVENUE FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES -$ -$ 377,050$ 377,050$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services 183,712 - - - Fines - - - - Permits, Licenses and Fees 199,685 - - - Intergovernmental - - - - Investment Income 1,342 - - - Other Revenues - - - - TOTAL OPERATIONAL REVENUE 384,739$ -$ -$ -$ Transfers from other funds - - - - TOTAL REVENUES 384,739$ -$ -$ -$ TOTAL AVAILABLE RESOURCES 384,739$ -$ 377,050$ 377,050$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies - - - - Maintenance - - - - Services 7,689 - - - Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 7,689$ -$ -$ -$ Transfers to other funds - - - - TOTAL EXPENDITURES 7,689$ -$ -$ -$ ENDING FUND BALANCES 377,050$ -$ 377,050$ 377,050$ CITY OF ANNA ANNA PUBLIC FACILITY CORPORATION ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 2,714,472$ 3,952,393$ 5,302,084$ 4,413,090$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services 2,835,400 1,500,000 1,114,500 1,300,000 Fines - - - - Permits, Licenses and Fees 638,245 - - - Intergovernmental - - - - Investment Income 24,535 9,000 120,000 155,000 Other Revenues 1,094 - 67,000 75,000 TOTAL OPERATIONAL REVENUE 3,499,274$ 1,509,000$ 1,301,500$ 1,530,000$ Transfers from other funds - - - - TOTAL REVENUES 3,499,274$ 1,509,000$ 1,301,500$ 1,530,000$ TOTAL AVAILABLE RESOURCES 6,213,746$ 5,461,393$ 6,603,584$ 5,943,090$ EXPENDITURES: Payroll 305,965$ 431,194$ 431,194$ 135,793$ Supplies 59,525 227,000 227,000 227,000 Maintenance 5,904 - - - Services 266,002 31,600 31,600 38,100 Debt Service - - - - Capital Outlay 79,133 150,000 95,000 83,000 Capital Improvement 195,133 3,312,984 1,380,700 5,220,400 TOTAL EXPENDITURES 911,662$ 4,152,778$ 2,165,494$ 5,704,293$ Transfers to other funds - - 25,000 - TOTAL EXPENDITURES 911,662$ 4,152,778$ 2,190,494$ 5,704,293$ ENDING FUND BALANCES 5,302,084$ 1,308,615$ 4,413,090$ 238,797$ CITY OF ANNA PARK DEVELOPMENT FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 186,334$ 116,133$ 268,538$ 318,538$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services 120,900 50,000 50,000 15,000 Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 1,395 - - 2,000 Other Revenues 120 - - - TOTAL OPERATIONAL REVENUE 122,415$ 50,000$ 50,000$ 17,000$ Transfers from other funds - - - - TOTAL REVENUES 122,415$ 50,000$ 50,000$ 17,000$ TOTAL AVAILABLE RESOURCES 308,749$ 166,133$ 318,538$ 335,538$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies 28,213 - - 29,500 Maintenance - - - - Services - - - - Debt Service - - - - Capital Outlay 11,998 - - 130,000 Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 40,211$ -$ -$ 159,500$ Transfers to other funds - - - - TOTAL EXPENDITURES 40,211$ -$ -$ 159,500$ ENDING FUND BALANCES 268,538$ 166,133$ 318,538$ 176,038$ CITY OF ANNA FIRE CAPITAL IMPROVEMENT FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 12,491$ 14,484$ 12,712$ 15,212$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services - - - - Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 75 - - - Other Revenues 146 2,500 2,500 - TOTAL OPERATIONAL REVENUE 221$ 2,500$ 2,500$ -$ Transfers from other funds - - - - TOTAL REVENUES 221$ 2,500$ 2,500$ -$ TOTAL AVAILABLE RESOURCES 12,712$ 16,984$ 15,212$ 15,212$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies - - - - Maintenance - - - - Services - - - - Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES -$ -$ -$ -$ Transfers to other funds - - - - TOTAL EXPENDITURES -$ -$ -$ -$ ENDING FUND BALANCES 12,712$ 16,984$ 15,212$ 15,212$ CITY OF ANNA PUBLIC SAFETY SEIZURE FUNDS ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 5,757,394$ 4,735,201$ 8,540,326$ 6,963,206$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise Fees and Local Taxes - - - - Charges for Services Water Sales 7,676,094 6,510,000 8,010,000 10,846,000 Sewer Charges 4,864,040 5,640,263 5,640,263 7,718,000 Solid Waste Charges 1,876,968 1,760,000 2,300,000 2,300,000 Other Charges 713,803 612,000 555,570 628,570 Fines - - - - Permits, Licenses and Fees 2,034,268 461,000 1,076,300 1,286,000 Intergovernmental - - - Investment Income 55,224 20,000 302,000 302,000 Other Revenues 287,948 197,200 242,800 236,600 TOTAL OPERATIONAL REVENUE 17,508,345$ 15,200,463$ 18,126,933$ 23,317,170$ Transfers from other funds - - - - TOTAL REVENUES 17,508,345$ 15,200,463$ 18,126,933$ 23,317,170$ TOTAL AVAILABLE RESOURCES 23,265,739$ 19,935,664$ 26,667,259$ 30,280,376$ EXPENDITURES: Payroll 2,255,422$ 2,901,362$ 2,901,362$ 2,894,454$ Supplies 240,897 163,583 163,583 255,008 Maintenance 1,081,779 642,675 642,675 1,286,050 Services Water Purchases 2,817,915 2,165,000 3,000,000 3,090,000 Sewer Treatment 2,750,996 2,800,000 4,300,000 4,300,000 Solid Waste 2,081,444 1,760,000 2,300,000 2,300,000 Other 1,323,639 1,224,429 1,224,429 1,372,238 Debt Service 2,116,051 2,118,430 4,522,004 6,050,185 Capital Outlay 57,270 - - - TOTAL OPERATIONAL EXPENDITURES 14,725,413$ 13,775,479$ 19,054,053$ 21,547,935$ Transfers to other funds - 650,000 650,000 975,000 TOTAL EXPENDITURES 14,725,413$ 14,425,479$ 19,704,053$ 22,522,935$ ENDING FUND BALANCES 8,540,326$ 5,510,185$ 6,963,206$ 7,757,441$ Fund Balance Percentage 58.0% 40.0% 36.5% 36.0% CITY OF ANNA UTILITY FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES -$ -$ -$ 248,150$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services - Stormwater - 345,000 345,000 345,000 Fines - - - - Permits, Licenses and Fees - 6,000 6,000 5,000 Intergovernmental - - - - Investment Income - - - - Other Revenues - - - - TOTAL OPERATIONAL REVENUE -$ 351,000$ 351,000$ 350,000$ Transfers from other funds - - - - TOTAL REVENUES -$ 351,000$ 351,000$ 350,000$ TOTAL AVAILABLE RESOURCES -$ 351,000$ 351,000$ 598,150$ EXPENDITURES: Payroll -$ 61,350$ 61,350$ 115,040$ Supplies - 9,000 9,000 9,000 Maintenance - - - - Services - 32,500 32,500 32,500 Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES -$ 102,850$ 102,850$ 156,540$ Transfers to other funds - - - - TOTAL EXPENDITURES -$ 102,850$ 102,850$ 156,540$ ENDING FUND BALANCES -$ 248,150$ 248,150$ 441,610$ CITY OF ANNA STORMWATER FUND ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 1,791,879$ 1,613,338$ 8,178,320$ 7,691,277$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax 2,308,746 2,460,000 2,460,000 2,460,000 Franchise and Local Taxes - - - - Charges for Services - - - - Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 14,953 5,000 15,000 15,000 Other Revenues 5,615,808 - - - TOTAL OPERATIONAL REVENUE 7,939,507$ 2,465,000$ 2,475,000$ 2,475,000$ Transfers from other funds - - - - TOTAL REVENUES 7,939,507$ 2,465,000$ 2,475,000$ 2,475,000$ TOTAL AVAILABLE RESOURCES 9,731,386$ 4,078,338$ 10,653,320$ 10,166,277$ EXPENDITURES: Payroll 393,067$ 468,189$ 468,189$ 462,634$ Supplies 12,393 13,100 13,100 16,100 Maintenance - - - - Services 890,769 2,286,889 2,286,889 4,289,665 Debt Service 256,837 193,865 193,865 203,006 Capital Outlay - - - 350,000 Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 1,553,066$ 2,962,043$ 2,962,043$ 5,321,405$ Transfers to other funds - - - - TOTAL EXPENDITURES 1,553,066$ 2,962,043$ 2,962,043$ 5,321,405$ ENDING FUND BALANCES 8,178,320$ 1,116,295$ 7,691,277$ 4,844,872$ Fund Balance Percentage 526.6% 37.7% 259.7% 91.0% CITY OF ANNA COMMUNITY DEVELOPMENT CORPORATION ANNUAL BUDGET FOR FISCAL YEAR 2024 ECONOMIC DEVELOPMENT CORPORATION Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES 408,227$ 351,708$ 5,992,186$ 5,219,689$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services 8,166 10,000 10,000 78,120 Fines - - - - Permits, Licenses and Fees - - - - Intergovernmental - - - - Investment Income 25,620 2,000 25,000 25,000 Other Revenues 5,615,652 - - - TOTAL OPERATIONAL REVENUE 5,649,438$ 12,000$ 35,000$ 103,120$ Transfers from other funds - - - - TOTAL REVENUES 5,649,438$ 12,000$ 35,000$ 103,120$ TOTAL AVAILABLE RESOURCES 6,057,665$ 363,708$ 6,027,186$ 5,322,809$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies - - - - Maintenance 1,045 3,000 3,000 50,000 Services 64,434 804,497 804,497 484,550 Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 65,479$ 807,497$ 807,497$ 534,550$ Transfers to other funds - - - - TOTAL EXPENDITURES 65,479$ 807,497$ 807,497$ 534,550$ ENDING FUND BALANCES 5,992,186$ (443,789)$ 5,219,689$ 4,788,259$ Fund Balance Percentage 9151.3% -55.0% 646.4% 895.8% CITY OF ANNA ANNUAL BUDGET FOR FISCAL YEAR 2024 Actual Budget Estimated Budget 2021-22 2022-23 2022-23 2023-24 BEGINNING BALANCES -$ -$ 550,517$ 550,517$ REVENUES: Property Taxes -$ -$ -$ -$ Sales Tax - - - - Franchise and Local Taxes - - - - Charges for Services 509,720 - - - Fines - - - - Permits, Licenses and Fees 56,250 - - - Intergovernmental - - - - Investment Income 2,252 - - - Other Revenues - - - - TOTAL OPERATIONAL REVENUE 568,222$ -$ -$ -$ Transfers from other funds - - - - TOTAL REVENUES 568,222$ -$ -$ -$ TOTAL AVAILABLE RESOURCES 568,222$ -$ 550,517$ 550,517$ EXPENDITURES: Payroll -$ -$ -$ -$ Supplies - - - - Maintenance - - - - Services 17,705 - - - Debt Service - - - - Capital Outlay - - - - Capital Improvement - - - - TOTAL OPERATIONAL EXPENDITURES 17,705$ -$ -$ -$ Transfers to other funds - - - - TOTAL EXPENDITURES 17,705$ -$ -$ -$ ENDING FUND BALANCES 550,517$ -$ 550,517$ 550,517$ CITY OF ANNA ANNA HOUSING FINANCE CORPORATION ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ALL FUNDS SUMMARY Actual Re-estimate Budget 2021-22 2022-23 2023-24 BEGINNING BALANCE 46,361,131$ 46,911,572$ 137,805,515$ REVENUES Bond Proceeds -$ 99,000,000$ 15,440,000$ Interest Revenue 239,023 3,970,000 3,390,000 PID Assessment - - 784,800 SLFRF Grant 1,844,454 1,858,000 - Road Improvement Fees 3,153,293 1,953,000 1,900,000 Water Improvement Fees 5,530,937 2,787,000 2,500,000 Wastewater Improvement Fees 4,352,356 2,040,000 13,310,000 Miscellaneous Revenue 26,350 - - Transfers In 13,607,093 3,150,000 3,275,000 TOTAL 28,753,506$ 114,758,000$ 40,599,800$ FUNDS Capital Bond Fund 7,337,148$ 7,277,000$ 30,141,905$ Infrastructure Investment Fund 4,946,246 2,465,400 3,328,558 PID Fees - - 4,660,000 Grant Fund - 330,000 3,372,454 Road Impact Fees - 1,617,000 4,257,000 Utility Bond Fund - 2,620,000 34,380,000 Utility Infrastructure Investment Fund 3,544,718 12,927,000 1,291,798 Water Impact Fee Fund 664,932 1,428,000 11,877,000 Wastewater Impact Fee Fund 890,539 611,000 14,631,848 TOTAL 17,383,583$ 29,275,400$ 107,940,563$ ENDING FUND BALANCE 57,731,054$ 132,394,172$ 70,464,752$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ALL FUNDS SUMMARY Budget Budget Budget 2024-25 2025-26 2026-27 66,290,459$ 32,902,548$ 27,543,459$ -$ -$ -$ 515,000 515,000 475,000 - - - - - - 1,150,000 1,150,000 1,150,000 8,000,000 2,500,000 2,500,000 3,800,000 2,000,000 2,000,000 - - - 100,000 100,000 100,000 13,565,000$ 6,265,000$ 6,225,000$ 6,054,000$ 11,422,000$ -$ - - - - - - - - - 1,140,000 1,000,000 3,000,000 28,000,000 - - 100,000 100,000 100,000 8,500,000 - - 3,900,000 - - 47,694,000$ 12,522,000$ 3,100,000$ 32,161,459$ 26,645,548$ 30,668,459$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM CAPITAL PROJECTS BOND FUND Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 13,857,492$ 6,530,718$ 34,353,718$ 20,651,813$ REVENUES Bond Proceeds -$ 34,000,000$ 15,440,000$ -$ Interest Revenue 10,375 1,100,000 1,000,000 60,000 TOTAL 10,375$ 35,100,000$ 16,440,000$ 60,000$ PROJECTS Facilities City Hall Municipal Complex 5,245,055$ 280,000$ -$ -$ Fire Station #2 11,645 2,226,000 4,102,355 - Community Library 322,450 781,000 20,896,550 - Community Recreation Center - 50,000 988,000 4,220,000 Parks Slayter Creek Skate Park 74,125 1,026,000 592,000 - Slayter Creek Park - Fitness Court - 163,000 - - Slayter Creek Park - Splash Pad - 2,504,000 - - Slayter Creek Park - Sports Court - 90,000 1,838,000 - Slayter Creek Park - Practice Field Lighting - - 700,000 - Slayter Creek Park - Parking - 126,000 524,000 - Slayter Creek Park - Restroom - - 200,000 - Trails - Pecan Grove Trail - - 101,000 1,284,000 Bryant Park Improvements - - 200,000 550,000 Equipment Ladder Truck (Quint / Aerial) 1,619,969 31,000 - - Roadway Rosamond Parkway 63,904 - - - TOTAL PROJECTS 7,337,148$ 7,277,000$ 30,141,905$ 6,054,000$ ENDING FUND BALANCE 6,530,718$ 34,353,718$ 20,651,813$ 14,657,813$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM CAPITAL PROJECTS BOND FUND Budget Budget Project 2025-26 2026-27 Total 14,657,813$ 3,295,813$ -$ -$ 60,000 20,000 60,000$ 20,000$ -$ -$ 31,386,002$ - - 6,340,000 - - 22,000,000 11,422,000 - 16,680,000 - - 1,692,125 - - 163,000 - - 2,504,000 - - 1,928,000 - - 700,000 - - 650,000 - - 200,000 - - 1,385,000 - - 750,000 - - 1,654,187 - - 63,904 11,422,000$ -$ 3,295,813$ 3,315,813$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM INFRASTRUCTURE INVESTMENT FUND Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 5,578,908$ 944,473$ 1,019,073$ 30,515$ REVENUES Transfers In 292,407$ 2,500,000$ 2,300,000$ -$ Interest Revenue 19,404 40,000 40,000 20,000 TOTAL 311,811$ 2,540,000$ 2,340,000$ 20,000$ PROJECTS Facilities City Hall Municipal Complex 1,039,253$ 532,000$ -$ -$ Municipal Complex Plaza - 74,000 226,000 - Central Station Ventilation Grills - - 120,000 - Roadways Downtown Infrastructure Improvements 13,546 257,000 1,998,000 - Street Maintenance Sales Tax Projects 701,363 282,000 - - Hackberry Drive 39,721 596,000 511,558 - Ferguson Parkway 35,418 523,000 - - Rosamond Parkway - 104,000 - - Foster Crossing 616,662 2,400 - - Taylor Boulevard 195,086 - - - Easements 200,000 - - - US 75 Relocation Collin Co. Reimbursement 1,435,645 - - - Equipment EMS Transport Ambulance #3 - 95,000 405,000 - Enterprise Resource Planning Software 45,195 - 68,000 - EMS Transport Ambulance #2 265,351 - - - Three Single Trailer Mount Generators 359,006 - - - TOTAL PROJECTS 4,946,246$ 2,465,400$ 3,328,558$ -$ ENDING FUND BALANCE 944,473$ 1,019,073$ 30,515$ 50,515$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM INFRASTRUCTURE INVESTMENT FUND Budget Budget Project 2025-26 2026-27 Total 50,515$ 70,515$ -$ -$ 20,000 20,000 20,000$ 20,000$ -$ -$ 1,860,492$ - - 300,000 - - 120,000 - - 2,268,546 - - 983,363 - - 1,147,279 - - 558,418 - - 104,000 - - 619,062 - - 195,086 - - 200,000 - - 1,435,645 - - 500,000 - - 227,553 - - 400,000 - - 359,006 -$ -$ 70,515$ 90,515$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM GRANT FUND Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE -$ 1,844,454$ 3,372,454$ -$ REVENUES Coronavirus State & Local Recovery 1,844,454$ 1,858,000$ -$ -$ Interest Revenue - - - - TOTAL 1,844,454$ 1,858,000$ -$ -$ PROJECTS Downtown Infrastructure Improvements -$ 330,000$ 3,372,454$ -$ TOTAL PROJECTS -$ 330,000$ 3,372,454$ -$ ENDING FUND BALANCE 1,844,454$ 3,372,454$ -$ -$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM GRANT FUND Budget Budget Project 2025-26 2026-27 Total -$ -$ -$ -$ - - -$ -$ -$ -$ 3,702,454 -$ -$ -$ -$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ROADWAY SVC AREA 1 IMPACT FEES Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 961,132$ 3,353,936$ 3,681,936$ 3,609,936$ Road Improvement Fees 2,457,453$ 1,860,000$ 1,800,000$ 1,000,000$ Interest Revenue 16,865 85,000 85,000 15,000 TOTAL REVENUE 2,474,318$ 1,945,000$ 1,885,000$ 1,015,000$ TOTAL AVAILABLE RESOURCES 3,435,450$ 5,298,936$ 5,566,936$ 4,624,936$ PROJECTS Ferguson Parkway -$ -$ 723,000$ 1,140,000$ Finley Boulevard - 32,000 - - Leonard Avenue - 335,000 - - Hackberry Drive - - 1,234,000 - Developer Incentive Payment - 1,250,000 - - Transfers Out 81,514 - - - TOTAL PROJECTS 81,514$ 1,617,000$ 1,957,000$ 1,140,000$ ENDING FUND BALANCE 3,353,936$ 3,681,936$ 3,609,936$ 3,484,936$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ROADWAY SVC AREA 1 IMPACT FEES Budget Budget Project 2025-26 2026-27 Total 3,484,936$ 3,499,936$ 1,000,000$ 1,000,000$ 15,000 15,000 1,015,000$ 1,015,000$ 4,499,936$ 4,514,936$ 1,000,000$ 3,000,000$ 5,863,000$ - - 32,000 - - 335,000 - - 1,234,000 - - 1,250,000 - - 81,514 1,000,000$ 3,000,000$ 3,499,936$ 1,514,936$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ROADWAY SVC AREA 2 IMPACT FEES Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 1,299,439$ 1,995,328$ 2,148,328$ 13,328$ Road Improvement Fees 695,840$ 93,000$ 100,000$ 150,000$ Interest Revenue 10,942 60,000 65,000 20,000 TOTAL REVENUE 706,782$ 153,000$ 165,000$ 170,000$ TOTAL AVAILABLE RESOURCES 2,006,221$ 2,148,328$ 2,313,328$ 183,328$ PROJECTS Leonard Avenue -$ -$ 1,310,000$ -$ Finley Boulevard - - 990,000 - Transfers Out 10,893 - - - TOTAL PROJECTS 10,893$ -$ 2,300,000$ -$ ENDING FUND BALANCE 1,995,328$ 2,148,328$ 13,328$ 183,328$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM ROADWAY SVC AREA 2 IMPACT FEES Budget Budget Project 2025-26 2026-27 Total 183,328$ 353,328$ 150,000$ 150,000$ 20,000 20,000 170,000$ 170,000$ 353,328$ 523,328$ -$ -$ 1,310,000 - - 990,000 - - -$ -$ 353,328$ 523,328$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM PID FEES FUND Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE -$ -$ 3,875,200$ -$ REVENUES PID Fees -$ -$ 784,800$ -$ Interest Revenue - - - - TOTAL -$ -$ 784,800$ -$ PROJECTS Fire Station #2 -$ -$ 4,660,000$ -$ TOTAL PROJECTS -$ -$ 4,660,000$ -$ ENDING FUND BALANCE -$ -$ -$ -$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM PID FEES FUND Budget Budget Project 2025-26 2026-27 Total -$ -$ -$ -$ - - -$ -$ -$ -$ 4,660,000 -$ -$ -$ -$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM UTILITY BOND FUND PROJECTS Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE -$ -$ 64,355,000$ 31,575,000$ REVENUES Bond Proceeds -$ 65,000,000$ -$ -$ Interest Revenue - 1,975,000 1,600,000 - TOTAL -$ 66,975,000$ 1,600,000$ -$ PROJECTS Hurricane Creek Wastewater Treatment Plant -$ 2,620,000$ 34,380,000$ 28,000,000$ TOTAL PROJECTS -$ 2,620,000$ 34,380,000$ 28,000,000$ ENDING FUND BALANCE -$ 64,355,000$ 31,575,000$ 3,575,000$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM UTILITY BOND FUND PROJECTS Budget Budget Project 2025-26 2026-27 Total 3,575,000$ 3,575,000$ -$ -$ - - -$ -$ -$ -$ 65,000,000$ -$ -$ 3,575,000$ 3,575,000$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM UTILITY INFRASTRUCTURE FUND PROJECTS Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 8,715,747$ 18,592,350$ 9,060,487$ 9,043,689$ REVENUES Transfer In 13,314,686$ 650,000$ 975,000$ 100,000$ Interest Revenue 80,286 320,000 300,000 100,000 Miscellaneous Revenue 26,350 - - - TOTAL 13,421,322$ 970,000$ 1,275,000$ 200,000$ PROJECTS Geren Treatment Plant Rehabilitation 78,202$ -$ 291,798$ -$ Risk & Resilience Infrastructure Improvements - - 200,000 100,000 SCADA Hardware and Programming - - 500,000 - Sherley Water Tower Lighting - - 300,000 - Sherley Storage Tank Rehabilitation 179,250 - - - US 75 Utility Relocations 37,533 38,000 - - State Hwy 5 Utility Relocation 130,010 491,000 - - Hurricane Creek Temporary Treatment 146,547 4,000 - - Hurricane Creek Line B Sanitary Sewer 162,887 4,810,000 - - Hurricane Creek Wastewater Treatment Plant 2,163,906 4,345,000 - - Hurricane Creek Sewer Interceptor Line North - 23,000 - - Throckmorton Creek Trunk Sewer Expansion 93,382 - - - Collin Pump Station - Pumps and Wells 539,275 2,690,000 - - Collin Pump Station - Ground Storage - 462,000 - - Project Designs 13,726 64,000 - - TOTAL PROJECTS 3,544,718$ 12,927,000$ 1,291,798$ 100,000$ ENDING FUND BALANCE 18,592,350$ 6,635,350$ 9,043,689$ 9,143,689$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM UTILITY INFRASTRUCTURE FUND PROJECTS Budget Budget Project 2025-26 2026-27 Total 9,143,689$ 9,243,689$ 100,000$ 100,000$ 100,000 100,000 - - 200,000$ 200,000$ -$ 370,000$ 100,000 100,000 500,000 - - 500,000 - - 300,000 - - 179,250 - - 75,533 - - 621,010 - - 150,547 - - 4,972,887 - - 6,508,906 - - 23,000 - - 93,382 - - 3,229,275 - - 462,000 - - 77,726 100,000$ 100,000$ 9,243,689$ 9,343,689$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM WATER IMPACT FEES Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 6,672,199$ 8,330,099$ 9,959,099$ 782,099$ Water Improvement Fees 5,530,937$ 2,787,000$ 2,500,000$ 8,000,000$ Interest Revenue 52,957 270,000 200,000 200,000 TOTAL REVENUE 5,583,894$ 3,057,000$ 2,700,000$ 8,200,000$ TOTAL AVAILABLE RESOURCES 12,256,093$ 11,387,099$ 12,659,099$ 8,982,099$ PROJECTS US 75 Utility Relocations -$ 1,428,000$ 162,000$ -$ Collin Pump Station - Pumps and Wells - - 2,200,000 - FM455 Water Line - - 800,000 3,000,000 Collin Pump Station - Ground Storage - - 6,000,000 5,000,000 SH 5 Utility Relocation - Project A - - 2,000,000 - SH 5 Utility Relocation - Project B - - 550,000 500,000 Sherley Elementary Utilities 664,932 - - - Hackberry Drive Utilities - - 165,000 - Developer Incentive Payment - - - - Transfers Out 3,261,063 - - - TOTAL PROJECTS 3,925,995$ 1,428,000$ 11,877,000$ 8,500,000$ ENDING FUND BALANCE 8,330,099$ 9,959,099$ 782,099$ 482,099$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM WATER IMPACT FEES Budget Budget Project 2025-26 2026-27 Total 482,099$ 3,182,099$ 2,500,000$ 2,500,000$ 200,000 200,000 2,700,000$ 2,700,000$ 3,182,099$ 5,882,099$ -$ -$ 1,590,000$ - - 2,200,000 - - 3,800,000 - - 11,000,000 - - 2,000,000 - - 1,050,000 - - 664,932 - - 165,000 - - - - - 3,261,063 -$ -$ 3,182,099$ 5,882,099$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM WASTEWATER IMPACT FEES Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 6,561,742$ 18,130$ 1,567,130$ 345,282$ Wastewater Improvement Fees 4,352,356$ 2,040,000$ 13,310,000$ 3,800,000$ Interest Revenue 48,194 120,000 100,000 100,000 TOTAL REVENUE 4,400,550$ 2,160,000$ 13,410,000$ 3,900,000$ TOTAL AVAILABLE RESOURCES 10,962,292$ 2,178,130$ 14,977,130$ 4,245,282$ PROJECTS Hurricane Creek Sewer Interceptor Line North -$ 600,000$ 8,250,000$ 3,700,000$ Hurricane Creek Sewer Line B - - 5,136,848 - SH 5 Utility Relocation - Project A - - 995,000 - SH 5 Utility Relocation - Project B - - 250,000 200,000 Sherley Elementary Utilities 664,932 - - - Developer Incentive Payment - 11,000 - - Engineering 225,607 - - - Transfers Out 10,053,622 - - - TOTAL PROJECTS 10,944,161$ 611,000$ 14,631,848$ 3,900,000$ ENDING FUND BALANCE 18,130$ 1,567,130$ 345,282$ 345,282$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM WASTEWATER IMPACT FEES Budget Budget Project 2025-26 2026-27 Total 345,282$ 2,445,282$ 2,000,000$ 2,000,000$ 100,000 100,000 2,100,000$ 2,100,000$ 2,445,282$ 4,545,282$ -$ -$ 12,550,000$ - - 5,136,848 - - 995,000 - - 450,000 - - 664,932 - - 11,000 - - 225,607 - - 10,053,622 -$ -$ 2,445,282$ 4,545,282$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM PARK DEVELOPMENT Actual Re-estimate Budget Budget 2021-22 2022-23 2023-24 2024-25 BEGINNING BALANCE 2,714,472$ 5,302,084$ 4,413,090$ 238,797$ REVENUES Park Development Fees 3,473,645$ 1,114,500$ 1,300,000$ 1,300,000$ Interest Revenue 24,535 120,000 155,000 100,000 Other Revenues 1,094 67,000 75,000 65,000 TOTAL 3,499,274$ 1,301,500$ 1,530,000$ 1,465,000$ OPERATIONS Recreation 593,015$ 714,794$ 400,893$ 408,911$ Park Operations 53,499 - - - Capital Equipment 70,015 95,000 83,000 150,000 PROJECTS Municipal Complex Plaza - - 1,500,000 - Slayter Creek Skate Park - 4,100 295,900 - Slayter Creek Park - Sports Court - - 363,500 - Slayter Creek Park - Plaza, Lighting, Electrical - 47,000 887,500 - Slayter Creek Park - Irrigation - - 500,000 - Slayter Creek Park - Parking - 42,000 - - Slayter Creek Park - Restroom - 50,000 - - Slayter Creek Park Splash Pad - 73,600 - - Natural Springs Park - Parking and Other - 71,000 385,000 - Natural Springs Park - Dog Park Irrigation - - 175,000 - Natural Springs Park - Playground - - 400,000 - Bryant Park 113,857 60,000 5,000 - Sherley Heritage Park Train & Improvements 200 456,000 203,000 - Yank Park - 84,000 405,500 - Anna Crossing Park - - 100,000 165,000 Johnson Park Improvements 7,242 325,000 - - Trails - Pecan Grove Trail - 57,000 - - Land Acquisition and Amenities 73,834 111,000 - - TOTAL PROJECTS 911,662$ 2,190,494$ 5,704,293$ 723,911$ ENDING FUND BALANCE 5,302,084$ 4,413,090$ 238,797$ 979,886$ Fund balance goal 161,629$ 178,699$ 100,223$ 102,228$ ANNUAL BUDGET FOR FISCAL YEAR 2024 CITY OF ANNA CAPITAL IMPROVEMENTS PROGRAM PARK DEVELOPMENT Budget Budget Project 2025-26 2026-27 Total 979,886$ 1,877,797$ 1,300,000$ 1,300,000$ 100,000 100,000 65,000 65,000 1,465,000$ 1,465,000$ 417,089$ 425,431$ - - 150,000 150,000 - - 1,500,000 - - 300,000 - - 363,500 - - 934,500 - - 500,000 - - 42,000 - - 50,000 - - 73,600 - - 456,000 - - 175,000 - - 400,000 - - 178,857 - - 659,200 - - 489,500 - - 265,000 - - 332,242 - - 57,000 - - 184,834 567,089$ 575,431$ 1,877,797$ 2,767,366$ 104,272$ 106,358$ ANNUAL BUDGET FOR FISCAL YEAR 2024 Item No. 6.b. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Terri Doby AGENDA ITEM: Consider/Discuss/Action regarding a Resolution ratifying the property tax revenue increase reflected in the City of Anna FY2024 Budget. (Budget Manager Terri Doby) SUMMARY: The budget is funded by a tax rate of $0.510717. While this rate is less than the tax rate adopted last year, a separate vote of the governing body to ratify the property tax increase reflected in the budget is required. The total amount of revenue generated from property taxes will increase by $3,057,846 which is a 23.6 percent increase from last year's budget. The property tax revenue to be raised from new property added to the tax roll this year is $1,934,510. FINANCIAL IMPACT: Process to adopt the FY2023-2024 Budget. BACKGROUND: Section 102.007 of the Local Government Code states that adoption of a budget that will require raising more revenue from property taxes than in the previous year requires a separate vote of the governing body to ratify the property tax increase reflected in the budget. A vote under this subsection is in addition to and separate from the vote to adopt the budget or a vote to set the tax rate required by Chapter 26, Tax Code. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. FY2024 Tax Rate Ratification Resolution CITY OF ANNA, TEXAS RESOLUTION NO. A RESOLUTION OF THE CITY OF ANNA, ACKNOWLEDGING AND RATIFYING THAT THE ADOPTION OF THE FISCAL YEAR 2023-2024 ANNUAL BUDGET WILL REQUIRE RAISING MORE REVENUE FROM PROPERTY TAXES THAN IN THE PREVIOUS FISCAL YEAR WHEREAS, The City Council (the “Council”) of the City of Anna wishes to comply with Section 102.007 of the Local Government Code; and WHEREAS, Section 102.007 of the Local Government Code requires a separate vote of the Council if the budget will require raising more revenue from property taxes than the previous fiscal year; and, WHEREAS, this resolution satisfies the aforementioned requirement; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated. The facts and recitals above are incorporated herein as if set forth in full for all purposes. Section 2. Acknowledgement and Ratification The Fiscal Year 2023-2024 annual budget will raise more revenue from property taxes than the previous fiscal year’s budget by $3,057,846 or 23.6%, and of that amount $1,934,510 is tax revenue to be raised from new property added to the tax roll this year. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 12th day of September, 2023. ATTESTED: _________________________ City Secretary Carrie L. Land APPROVED: _________________________ Mayor Nate Pike Item No. 6.c. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Terri Doby AGENDA ITEM: Consider/Discuss/Action approving an Ordinance adopting the FY2024 Tax Rate. (Budget Manager Terri Doby) SUMMARY: The FY2024 budget can be funded by adopting a tax rate of $0.510717 cents per $100 valuation. Of the total tax rate, $0.365930 cents are dedicated to the general fund maintenance and operations (M&O) and $0.144787 cents are dedicated for the payment of general fund debt obligations, or interest and sinking (I&S). State regulations require specific language to be included in the ordinance and motion adopting the tax rate. The language in the motion is meant to reflect the change in the total tax rate while the language in section 5 of the ordinance only reflects the change in the M&O portion of the rate. The M&O rate exceeds the M&O no-new-revenue rate by 4.6% but is lower than the FY2023 adopted M&O rate, resulting in a $30.60 decrease on a $100,000 home. As the proposed rate exceeds the no-new-revenue rate of $0.464353, the motion must be made in the following form: “I move that the property tax rate be increased by the adoption of a tax rate of $0.510717, which is effectively a 10.0% percent increase in the tax rate.” In addition to statutory requirements for the language of the motion to adopt the tax rate, Sec. 26.05(b) requires 60% of the Council to vote in favor of a tax rate that exceeds the no-new-revenue tax rate. This means that five members of the Council must vote in favor of the motion to pass the $0.510717 rate. FINANCIAL IMPACT: Process to adopt the FY2023-2024 Property Tax Rate. BACKGROUND: Section 26.05 of the Property Tax Code requires that the governing body of each taxing unit adopt a tax rate for the current year and shall notify the assessor for the taxing unit of the rate adopted. The governing body must adopt a tax rate before September 30th. The tax rate consists of two components, (operations and maintenance rate and debt service rate), each of which must be approved separately. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. FY2024 Tax Rate Adoption Ordinance CITY OF ANNA, TEXAS Ordinance No. Ordinance Setting the Tax Rate for the Next Fiscal Year AN ORDINANCE LEVYING PROPERTY TAXES FOR USE AND SUPPORT OF THE MUNICIPAL GOVERNMENT OF THE CITY OF ANNA FOR THE 2023-2024 FISCAL YEAR; PROVIDING FOR AN INTEREST AND SINKING FUND FOR ALL OUTSTANDING DEBT OF THE CITY OF ANNA; PROVIDING FOR APPORTIONING EACH LEVY FOR THE SPECIFIC PURPOSES; AND, PROVIDING WHEN TAXES SHALL BECOME DUE AND WHEN SAME SHALL BECOME DELINQUENT IF NOT PAID. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS. SECTION 1. That there is hereby levied and there shall be collected for the use and support of the municipal government of the City of Anna, and to provide an Interest and Sinking Fund for the 2023-2024 fiscal year; upon all property, real, personal and mixed, within the corporate limits of said City subject to taxation, a tax of $0.510717 on each $100.00 in valuation of property, said tax being so levied and apportioned to the specific purposes here set forth: a. For the maintenance and support of the general government (General Fund) $0.365930 on each $100 valuation of property. b. For the purposes of creating an Interest and Sinking Fund to pay the interest and principal maturities of all outstanding debt of the City of Anna, not otherwise provided for, a tax of $0.144787 on each $100 valuation of property. SECTION 2. That taxes levied under this ordinance shall be due October 1, 2023 and if not paid on or before January 31, 2024 shall immediately become delinquent. There shall be no discount for payment of taxes on or prior to January 31, 2024. A delinquent tax shall incur all penalty and interest authorized by law, Section 33.01 of the Texas Property Tax Code, as amended, to wit: a penalty of 6% of the amount of the tax for the first calendar month the tax is delinquent plus 1% for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent, or such other penalty as may be allowed by law. Provided, however, a tax delinquent on July 1, 2024 incurs a total penalty of 12% of the amount of the delinquent tax without regard to the number of months the tax had been delinquent. A delinquent tax shall also accrue interest at a rate of 1% for each month or portion of a month the tax remains unpaid. Taxes that remain delinquent on July 1, 2024 incur an additional penalty of 15% of the amount of taxes, penalty and interest due; such additional penalty is to defray the costs of collection due pursuant to the contract with the City’s attorney authorized by Section 6.30 of the Texas Property Tax Code, as amended. SECTION 3. All taxes shall become a lien upon the property against which assessed, and the city assessor and collector of the City of Anna is hereby authorized and empowered to enforce the collections of such taxes according to the Constitution and laws of the State of Texas and ordinances of the City of Anna shall, by virtue of the tax rolls, fix and establish a lien by levying upon such property, whether real or personal, for the payment of said taxes, penalty and interest; and, the interest and penalty collected from such delinquent taxes shall be apportioned to the general funds of the City of Anna. All delinquent taxes shall bear interest from date of delinquency at the rate as prescribed by state law. SECTION 4. THIS TAX RATE WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR’S TAX RATE. SECTION 5. THIS TAX RATE WILL EFFECTIVELY BE RAISED BY 4.6 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY -$30.60. SECTION 6. Taxes shall be payable in full at the office of the Tax Assessor/Collector, Kenneth Maun, 2300 Bloomdale Road, Suite 2366, McKinney, Texas 75071. The Town shall have available all rights and remedies provided by law for the enforcement of the collection of taxes levied under this ordinance. SECTION7. That this ordinance shall take effect and be in force from and after its passage. PASSED AND APPROVED by record roll call vote on this, the 12th day of September 2023. Ayes _____ Nays_____ Abstained_____ ATTESTED: _________________________ City Secretary Carrie L. Land APPROVED: _________________________ Mayor Nate Pike Item No. 6.d. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: First Reading of a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) SUMMARY: Two readings of the resolution are required prior to adopting the CDC Budget. The resolution is included in the proceeding item adopting the CDC Budget. The CDC Board approved the proposed FY 2023 budget on July 20, 2023. This is the first reading of the resolution. The presiding officer should read the following: A RESOLUTION OF THE CITY OF ANNA, TEXAS RATIFYING AND APPROVING THE FISCAL YEAR 2023-2024 BUDGET FOR THE ANNA COMMUNITY DEVELOPMENT CORPORATION; AND PROVIDING AN EFFECTIVE DATE. FINANCIAL IMPACT: N/A BACKGROUND: STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: Item No. 6.e. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Second Reading of a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) SUMMARY: Two readings of the resolution are required prior to adopting the CDC Budget. The resolution is included in the proceeding item adopting the CDC Budget. The CDC Board approved the proposed FY 2023 budget on July 20, 2023. This is the second reading of the resolution. The presiding officer should read the following: A RESOLUTION OF THE CITY OF ANNA, TEXAS RATIFYING AND APPROVING THE FISCAL YEAR 2023-2024 BUDGET FOR THE ANNA COMMUNITY DEVELOPMENT CORPORATION; AND PROVIDING AN EFFECTIVE DATE. FINANCIAL IMPACT: N/A BACKGROUND: STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: Item No. 6.f. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Consider/Discuss/Action a Resolution approving the Fiscal Year 2023-2024 Anna Community Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) SUMMARY: Staff proposed a $5,321,405 FY 2023 Budget, and it was approved by the CDC Board on July 20, 2023.. The FY 2024 Budget is focused heavily on the Downtown Master Plan implementation, including $2 million for the municipal plaza, and continuing to attract new businesses and developments to Anna. FINANCIAL IMPACT: The proposed FY 2024 CDC budget is $5,321,405. BACKGROUND: TBD STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Council CDC Budget Resolution 2023 2. CDC Budget-23 CITY OF ANNA, TEXAS RESOLUTION NO. _________ A RESOLUTION OF THE CITY OF ANNA, TEXAS RATIFYING AND APPROVING THE FISCAL YEAR 2023-2024 BUDGET FOR THE ANNA COMMUNITY DEVELOPMENT CORPORATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Anna, Texas is a home-rule municipality located in Collin County, created in accordance with the provisions of the Texas Local Government Code and operating pursuant to enabling legislation of the State of Texas, and WHEREAS, the Anna Community Development Corporation, hereinafter the “ACDC” is a Type B development corporation operating pursuant to the Development Corporation Act of 1979 now codified as Chapter 505 of the Texas Local Government Code; and WHEREAS, the ACDC Board of Directors approved the Fiscal Year 2023-2024 at a special-called meeting on July 20, 2023; and WHEREAS, the City of Anna desires to approve and ratify such said ACDC Budget. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: Section 1.Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2.Adoption of Fiscal Year 2023-2024 Budget The City Council of the City of Anna, Texas hereby approves the Anna Community Development Corporation 2023-2024 fiscal year budget as set forth in Exhibit A, attached hereto and incorporated herein for all purposes as if set forth in full. PASSED AND APPROVED by the City Council of the City of Anna, Texas this 12th day of September 2023. APPROVED: ______________________ Nate Pike, Mayor ATTEST: ___________________________ Carrie L. Land, City Secretary 7/17/2023 10:46:10 AM Page 1 of 3 Budget Listing ANNA, TX For Fiscal: 2023-2024 Period Ending: 10/31/2023 2023-2024 PB 2023-2024Account Number Account Name Fund: 890 - Community Development Corporation Department: 400 - AdministraƟon Transfers Out 0.00890-400-98100 Total Department: 400 - Administration: 0.00 Department: 825 - Community Development CorporaƟon Salaries 347,859.00890-825-61010 Miscellaneous Payroll 0.00890-825-61019 Payroll Taxes-City Part FICA 26,613.00890-825-61110 Health Insurance 36,729.00890-825-61210 TMRS Retirement 49,970.00890-825-61220 Unemployment 750.00890-825-61230 Worker's Compensation 713.00890-825-61240 Compensated Absences 0.00890-825-61910 Office Supplies 3,500.00890-825-62011 Budget Detail Description Units Price AmountBudget Code basic needs 1.00 3,500.00 3,500.00PB 2023-2024 Other Supplies - Misc. 5,500.00890-825-62012 Budget Detail Description Units Price AmountBudget Code meals, meetings supplies, or other administrative 1.00 5,500.00 5,500.00PB 2023-2024 Printing & Copying 0.00890-825-62013 Postage 100.00890-825-62210 Budget Detail Description Units Price AmountBudget Code mailing bills, etc 1.00 100.00 100.00PB 2023-2024 Clothing Supplies 2,500.00890-825-62310 Budget Detail Description Units Price AmountBudget Code new logo, new councilmembers, new board members 1.00 2,500.00 2,500.00PB 2023-2024 IT Supplies 4,500.00890-825-62910 Telecom 0.00890-825-66040 Contract Services 343,200.00890-825-67000 Budget Detail Description Units Price AmountBudget Code Cooksey Marketing Plan & Website Hosting 1.00 80,000.00 80,000.00PB 2023-2024 Costar 1.00 6,000.00 6,000.00PB 2023-2024 Downtown Plan Consulting 1.00 25,000.00 25,000.00PB 2023-2024 GISWebtech 1.00 6,000.00 6,000.00PB 2023-2024 Impact Data Source 1.00 6,500.00 6,500.00PB 2023-2024 Interurban Pedestrian Corridor Project 1.00 200,000.00 200,000.00PB 2023-2024 Residential Strategies 1.00 3,500.00 3,500.00PB 2023-2024 Resimplifi Real Estate Data 1.00 5,200.00 5,200.00PB 2023-2024 Small Business Software 1.00 6,000.00 6,000.00PB 2023-2024 Tax software 1.00 5,000.00 5,000.00PB 2023-2024 Promotion Expense 235,000.00890-825-67016 Budget Listing For Fiscal: 2023-2024 Period Ending: 10/31/2023 7/17/2023 10:46:10 AM Page 2 of 3 2023-2024 PB 2023-2024Account Number Account Name Budget Detail Description Units Price AmountBudget Code Chamber Event Sponsorship 1.00 7,500.00 7,500.00PB 2023-2024 Development Forum Event 1.00 2,500.00 2,500.00PB 2023-2024 Marketing Plan Implementation - digital, social, p 1.00 225,000.00 225,000.00PB 2023-2024 Legal Expense 25,000.00890-825-67019 Audit/Accounting Expense 7,500.00890-825-67020 Budget Detail Description Units Price AmountBudget Code CPA services - audit, 990, 1099s 1.00 7,500.00 7,500.00PB 2023-2024 Engineering/Design 0.00890-825-67022 Public Notices - Advertising 500.00890-825-67031 Budget Detail Description Units Price AmountBudget Code publish notices 1.00 500.00 500.00PB 2023-2024 Economic Development Grant Expense 3,629,990.00890-825-67053 Budget Detail Description Units Price AmountBudget Code CDC grant to EDC 1.00 60,000.00 60,000.00PB 2023-2024 CDC Municipal Plaza Project 1.00 2,000,000.0 2,000,000.00PB 2023-2024 Holiday Inn Express Incentive 1.00 209,990.00 209,990.00PB 2023-2024 Other Targeted Area Economic Development Grants 1.00 600,000.00 600,000.00PB 2023-2024 Sales Tax Reimbursement agreement with Chief Partn 1.00 610,000.00 610,000.00PB 2023-2024 TDA Downtown Revitalization Grant/CDF Match Grant 2.00 75,000.00 150,000.00PB 2023-2024 Insurance - Property & Liability 2,125.00890-825-67058 Dues, Publications & Licenses 10,350.00890-825-67061 Budget Detail Description Units Price AmountBudget Code Anna Chamber of Commerce Membership 1.00 3,000.00 3,000.00PB 2023-2024 Canva (Newsletter) 1.00 250.00 250.00PB 2023-2024 Dallas Morning News 1.00 200.00 200.00PB 2023-2024 DBJ 1.00 350.00 350.00PB 2023-2024 ICMA/TCMA KG 1.00 400.00 400.00PB 2023-2024 ICSC 10.00 200.00 2,000.00PB 2023-2024 IEDC 3.00 400.00 1,200.00PB 2023-2024 Mailchimp (Newsletter) 1.00 600.00 600.00PB 2023-2024 NTCAR 1.00 450.00 450.00PB 2023-2024 TEDC 3.00 550.00 1,650.00PB 2023-2024 Texas Downtown Association 1.00 250.00 250.00PB 2023-2024 Travel/Training Expense 36,000.00890-825-67200 Budget Detail Description Units Price AmountBudget Code Bisnow Event Registrations 1.00 1,000.00 1,000.00PB 2023-2024 DFW Marketing Team Trips 1.00 2,500.00 2,500.00PB 2023-2024 International Council of Shopping Centers Annual C 1.00 12,000.00 12,000.00PB 2023-2024 International Council Shopping Centers Texas 1.00 6,000.00 6,000.00PB 2023-2024 International Economic Development Council Annual 2.00 1,250.00 2,500.00PB 2023-2024 OU EDI Courses for AD/EDC 2.00 4,000.00 8,000.00PB 2023-2024 Texas Economic Development Council Annual Conferen 2.00 2,000.00 4,000.00PB 2023-2024 Interest Expense 88,006.00890-825-67790 Budget Detail Description Units Price AmountBudget Code Bond Debt Series 2012-B August payment 1.00 15,092.00 15,092.00PB 2023-2024 Bond Debt Series 2012-B February payment 1.00 16,709.00 16,709.00PB 2023-2024 Budget Listing For Fiscal: 2023-2024 Period Ending: 10/31/2023 7/17/2023 10:46:10 AM Page 3 of 3 2023-2024 PB 2023-2024Account Number Account Name Bond Debt Series 2016 (Business Park) Aug 1.00 28,000.00 28,000.00PB 2023-2024 Bond Debt Series 2016 (Business Park) Feb 1.00 28,205.00 28,205.00PB 2023-2024 Bad Debt Expense 0.00890-825-67850 Bond/Trustee Fees 0.00890-825-67950 Other Services - Misc.0.00890-825-67999 Construction in Progress 0.00890-825-69010 Machinery & Equipment 0.00890-825-69110 Land Acquisition 350,000.00890-825-69310 Budget Detail Description Units Price AmountBudget Code Downtown 1.00 350,000.00 350,000.00PB 2023-2024 Debt Service - Principal 115,000.00890-825-71090 Budget Detail Description Units Price AmountBudget Code Bond Debt Series 2012-B 1.00 105,000.00 105,000.00PB 2023-2024 Bond Debt Series 2016 1.00 10,000.00 10,000.00PB 2023-2024 Other Financing Use - Debt Refundings 0.00890-825-71490 Transfers Out 0.00890-825-98100 Total Department: 825 - Community Development Corporation:5,321,405.00 Total Fund: 890 - Community Development Corporation:5,321,405.00 Report Total:5,321,405.00 Item No. 6.g. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Joey Grisham AGENDA ITEM: Consider/Discuss/Action on a Resolution approving the Fiscal Year 2023-2024 Anna Economic Development Corporation Annual Budget. (Director of Economic Development Joey Grisham) SUMMARY: Staff proposed a $534,550 FY 2024 Budget, and it was approved by the CDC Board on July 20, 2023. The FY 2024 Budget is focused heavily on attracting primary jobs. FINANCIAL IMPACT: The proposed FY 24 EDC budget is $534,550. BACKGROUND: STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Council EDC Budget Resolution 2023 2. EDC Budget-23 CITY OF ANNA, TEXAS RESOLUTION NO. _________ A RESOLUTION OF THE CITY OF ANNA, TEXAS RATIFYING AND APPROVING THE FISCAL YEAR 2023-2024 BUDGET FOR THE ANNA ECONOMIC DEVELOPMENT CORPORATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Anna, Texas is a home-rule municipality located in Collin County, created in accordance with the provisions of the Texas Local Government Code and operating pursuant to enabling legislation of the State of Texas, and WHEREAS, the Anna Economic Development Corporation, hereinafter the “AEDC” is a Type A development corporation operating pursuant to the Development Corporation Act of 1979 now codified as Chapter 504 of the Texas Local Government Code; and WHEREAS, the AEDC Board of Directors approved the Fiscal Year 2023-2024 at a special-called meeting on July 20, 2023; and WHEREAS, the City of Anna desires to approve and ratify such said AEDC Budget. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, THAT: Section 1.Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2.Adoption of Fiscal Year 2023-2024 Budget The City Council of the City of Anna, Texas hereby approves the Anna Economic Development Corporation 2023-2024 fiscal year budget as set forth in Exhibit A, attached hereto and incorporated herein for all purposes as if set forth in full. PASSED AND APPROVED by the City Council of the City of Anna, Texas this 12th day of September 2023. APPROVED: ______________________ Nate Pike, Mayor ATTEST: ___________________________ Carrie L. Land, City Secretary 7/17/2023 10:48:04 AM Page 1 of 2 Budget Listing ANNA, TX For Fiscal: 2023-2024 Period Ending: 10/31/2023 2023-2024 PB 2023-2024Account Number Account Name Fund: 892 - Economic Development Corporation Department: 825 - Community Development CorporaƟon Other Supplies - Misc. 0.00892-825-62012 Postage 0.00892-825-62210 Maint. & Repair - Buildings 50,000.00892-825-63012 Budget Detail Description Units Price AmountBudget Code Maintenance/Repairs -312 N. Powell/101 S. Powell 1.00 50,000.00 50,000.00PB 2023-2024 Electricity 5,000.00892-825-66010 Budget Detail Description Units Price AmountBudget Code Based on three year history 1.00 5,000.00 5,000.00PB 2023-2024 Gas - Natural/Propane 1,500.00892-825-66020 Budget Detail Description Units Price AmountBudget Code Based on three year history 1.00 1,500.00 1,500.00PB 2023-2024 City Utilities Water/Sewer/Trash 0.00892-825-66030 Telecom 1,800.00892-825-66040 Contract Services 46,250.00892-825-67000 Budget Detail Description Units Price AmountBudget Code Janitorial 1.00 1,200.00 1,200.00PB 2023-2024 Mowing and Landscaping - 312 North Powell Pkwy 1.00 2,700.00 2,700.00PB 2023-2024 Pest Control 1.00 850.00 850.00PB 2023-2024 Printing 1.00 1,500.00 1,500.00PB 2023-2024 Professional Services (target industry analysis) 1.00 40,000.00 40,000.00PB 2023-2024 IT Support Services 0.00892-825-67008 Promotion Expense 0.00892-825-67016 Legal Expense 20,000.00892-825-67019 Budget Detail Description Units Price AmountBudget Code legal fees 1.00 20,000.00 20,000.00PB 2023-2024 Audit/Accounting Expense 5,000.00892-825-67020 Budget Detail Description Units Price AmountBudget Code CPA Services - Audit, 1099 form 990 1.00 5,000.00 5,000.00PB 2023-2024 Economic Development Grant Expense 400,000.00892-825-67053 Insurance - Property & Liability 5,000.00892-825-67058 Travel/Training Expense 0.00892-825-67200 Other Services - Misc. 0.00892-825-67999 Depreciation 0.00892-825-68910 Construction in Progress 0.00892-825-69010 Land Acquisition 0.00892-825-69310 Capital Expenditures 0.00892-825-69410 Budget Listing For Fiscal: 2023-2024 Period Ending: 10/31/2023 7/17/2023 10:48:04 AM Page 2 of 2 2023-2024 PB 2023-2024Account Number Account Name Transfers Out 0.00892-825-98100 Total Department: 825 - Community Development Corporation: 534,550.00 Total Fund: 892 - Economic Development Corporation: 534,550.00 Report Total: 534,550.00 Item No. 6.h. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: Gregory Peters AGENDA ITEM: Consider/Discuss/Action on a Resolution authorizing the City Manager to execute a Park Fee Development Agreement by and between the City of Anna, Texas and Skorburg Lot Development, LLC; in a form approved by the City Attorney; and providing for an effective date. (Interim Assistant City Manager Greg Peters, P.E.) SUMMARY: This item was discussed at the August 22, 2023 City Council Meeting where no action was taken. The developer met with the Park Board Liaison and backup Park Board Liaison and discussed the terms of the agreement in more detail. Following the meeting, the developer made the following changes to the agreement: • Modified language to be clear regarding the park being dedicated to the City at the time of final plat for the first phase of the proposed single family development. • Added language stating that any funds of the identified $1,972,500 not spent on the park by the developer would be paid to the City for use by the City in constructing park improvements. • Clarified that the Add Alternate Park Improvements may be constructed by the developer, or by the City, with scenarios. Staff feels that these changes adequately address the concerns raised at the August 22, 2023 City Council Meeting and recommend approval. Original item language: Skorburg Lot Development, LLC is seeking to build a residential development known as Skorburg Anna Ranch, northeast of the intersection of East Foster Crossing and Leonard Avenue. The zoning for the project was approved at the June 27, 2023 City Council Meeting. The zoning ordinance and the concept plan are attached for informational purposes as Exhibit A. The Concept Plan shows a 28-acre (+/-) common area which the developer has agreed to dedicate to the City for a public park. The developer is seeking to utilize the Park Development Fees collected from the development to construct improvements on the park property for the benefit of both the Skorburg Anna Ranch neighborhood and all neighbors in Anna. The developer has presented the overall park concept to the Park Board, who received the concept positively at the May Park Board Meeting. The park concept is attached as Exhibit B - Park Concept Plan. If this agreement is approved, the developer is prepared to return to the Park Board at their September, 2023 meeting to finalize the list of proposed amenities with input and feedback from the board, and begin the design process. The key developer deal points of the agreement are listed below: • The developer agrees to dedicate 28-acres (+/-) of park land in lieu of paying Park Land Dedication Fees. • The developer agrees to a total project budget of $1,972,500 for the design and construction of improvements to the park. Said funding shall be provided by the developer in lieu of paying Park Development Fees at the time of Final Plat. Should the developer spend less than $1,972,500, the remaining balance shall be paid to the City as Park Development Fees on a per lot basis ($1,500 for single family, $2,000 for multi-family) at the time of building permit until the total budget is met. • The developer agrees to provide the land surveying/engineering/landscaping design and construction plans for the park, including base items and alternate items. • The developer agrees to construct the following base park amenities: North Parking Lot, Restroom, Pavilion, Playground, Soccer Field, East-West Trail. • The developer agrees to construct the following add-alternate park amenities, if they can be constructed within the overall project budget of $1,972,500: South Parking Lot, Trails to/from South Parking Lot, Pickleball & Tennis Courts, Volleyball Courts (sand). The key City deal points of the agreement are provided below: • The City agrees to waive Park Land Dedication Fees and Park Development Fees for the Skorburg Anna Ranch Project as noted above. • The City may choose to provide additional funds to construct alternate amenities which do not fit within the project budget. • The City reserves the right to use the construction plans to construct any alternate amenities in the future at the City's cost. The agreement has specific timeline requirements, including: • The Developer must commence design within 120 days of the execution of the agreement. • The northern parking lot, restroom, and east-west trail must be completed prior to the 50th house being occupied. • The pavilion, playground, and one or more soccer fields must be completed before the 100th house is occupied. • All add-alternate improvements which fit in the project budget must be completed before the 200th house is occupied. Staff recommends approval of the agreement for the following reasons: • The proposed dedication meets the intent of the Park Master Plan and the Strategic Plan Success Statement: Active, "Diverse recreational venues." • The park land identified is of a size and topography which will provide important outdoor public space for all Anna neighbors to enjoy. • The Developer is seeking to work directly with the Park Board to design and construct park amenities based on community needs. FINANCIAL IMPACT: The development will generate approximately $1,972,500 in park development fees. The proposed agreement will allocate the entirety of these funds toward the construction of improvements to the 28-acre (+/-) park. BACKGROUND: The zoning for the development project was approved at the June 27, 2023 City Council Meeting. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Active. ATTACHMENTS: 1. Resolution and Agreement - Park Fee Development Agreement - Skorburg Aquisitions LLC CITY OF ANNA, TEXAS RESOLUTION NO. _______________ A RESOLUTION OF THE CITY OF ANNA, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PARK DEVELOPMENT FEE AGREEMENT WITH SKORBURG AQUISITIONS, LLC FOR THE DESIGN AND CONSTRUCTION OF A PUBLIC PARK, IN A FORM APPROVED BY THE CITY ATTORNEY; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, Developer desires to develop certain real property in Collin County, Texas, composed of approximately 170.392 acres of land located entirely within the corporate limits of the City; and, WHEREAS, the Developer desires to dedicate approximately 28-acres of real property to the City of Anna for use as a public park with approval of the City of Anna Park Board; and, WHEREAS, the Developer desires to utilize Park Development Fees generated by the proposed 170.392 acre development to design and construct park amenities on the 28 - acre dedication property for use by the public; and, WHEREAS, the City Council of the City of Anna finds that the proposed park land dedication and proposed park amenities meet the intent of the City of Anna Park Master Plan and the City of Anna Strategic Plan; and, WHEREAS, the Developer agrees to work with the City of Anna Park Board to finalize and prioritize the list of base park amenities and add -alternate park amenities during the design process; and, WHEREAS, the developer has agreed to meet certain timelines and deadlines for the design and construction of the park amenities as outlined in the agreement attached hereto as Exhibit “A;” and, WHEREAS, the City of Anna agrees to the Developer’s use of Park Development Fees generated by the development of the 170.392 acre tract for the design and construction of park amenities on the 28-acre dedication property for use by the public, in an amount not to exceed $1,972,500.00; and, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Recitals Incorporated The recitals above are incorporated herein as if set forth in full for all purposes. Authorization of Payment and Funding. That the City Council of the City of Anna hereby authorizes the City Manager to execute the Park Fee Development Agreement in a form approved by the City Attorney. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this ___ day of September, 2023. ATTEST: APPROVED: __________________________ __________________________ City Secretary, Carrie Land Mayor, Nate Pike Exhibit A (see Park Fee Development Agreement) Park Development Fee Waiver Agreement – Page 1 PARK FEE DEVELOPMENT AGREEMENT This Park Fee Development Agreement (this "Agreement") is entered into by and between the CITY OF ANNA, a home-rule municipality in Collin County, Texas (the "City") and SKORBURG ACQUISITIONS LLC, a Texas limited liability company (the "Developer"). WHEREAS, Developer and the City are sometimes collectively referenced in this Agreement as the "Parties," or, each individually, as "Party"; and WHEREAS, it is the Parties' mutual intent that this Agreement shall govern only the subject matter specifically set forth herein and that this Agreement shall supersede any previous agreement between the Parties regarding the subject matter hereof; and WHEREAS, Developer desires to develop certain real property in Collin County, Texas, composed of approximately 170.392 acres of land located entirely within the corporate limits of the City, more particularly described in Exhibit A attached hereto and incorporated herein for all purposes (the "Property"); and NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows: SECTION 1 RECITALS INCORPORATED The recitals set forth above are incorporated herein as if set forth in full to further describe the Parties' intent under this Agreement and said recitals constitute representations by the Parties. SECTION 2 DEFINITIONS Add-Alternate Park Improvements means park improvements identified in Section 4(a)(2)(ii) which the City may design and construct, as further detailed in Section 4(a) herein. Base Park Improvements means park improvements identified in Section 4(a)(2)(i) which the Developer shall design and include in the construction scope for the Park Improvements. These improvements are anticipated to be within the Maximum Project Cost and are required to be constructed as a part of the Park Improvements pursuant to the terms of this Agreement. City Code means the Anna City Code of Ordinances. City Manager means the current, acting, or interim City Manager of the City of Anna or a person designated to act on behalf of the City Manager with respect to this Agreement if the designation is in writing and signed by the current or acting City Manager. City Regulations mean City Code provisions, ordinances, design standards, and uniform codes, duly adopted by the City. Developer's Design and Construction Cost, with respect to the Park Improvements, means: the dollar amount actually paid by or on behalf of Developer for design and construction of the Park Park Fee Development Agreement - Page 2 Improvements, including but not limited to costs for engineering, design, land surveying, permitting, construction, materials, supplies, labor, landscaping, grading, testing, financing, and all costs related in any manner to design and construction of the Park Improvements excluding City inspection fees. Developer’s Design and Construction Cost shall include, but not be limited to, the items listed in the cost breakdown attached hereto as Exhibit C. City inspection fees shall not be included in Developer’s Design and Construction Cost. Effective Date has the meaning ascribed to that term in Section 5 herein. Force Majeure means and includes events or circumstances that are not within the reasonable control of the Party whose performance is suspended, including without limitation any delay due to any of the following acts or events: (a) wars, terrorism, civil disturbances, riots, insurrections, civil unrest, vandalism and sabotage; (b) transportation disasters, whether by sea, rail, air or land; (c) strikes, lockouts, work stoppage or slowdown or other labor disputes or material shortages; (d) actions or failures to act of a governmental authority, including any changes to the plans and specifications required as a condition to issuance of any permits or any changes in laws or codes not reasonably foreseeable on the Effective Date, and any delay in issuance of permits or certificates of occupancy by any governmental authority having jurisdiction, but excluding delays due to conditions that violate applicable codes and regulations; (e) adverse weather conditions, including rain of unusual duration or volume, hurricanes, lightning, tornadoes, earthquakes, floods or acts of God; (f) epidemics or pandemics or any governmental orders, actions, shut-downs, mandates, restrictions or quarantines, or any quasi-governmental orders, actions, shut-downs, mandates, restrictions or quarantines resulting from any epidemics or pandemics, and any public health emergencies, whether declared by local, state or federal governmental authorities or agencies; (g) labor shortages or moratoriums; (h) fire or other material casualty; (i) mechanical failure of equipment; (j) utility delays or interruptions; (k) any emergency event that threatens imminent harm to property or injury to persons; (l) any other causes of any kind whatsoever, whether similar to those enumerated or not, which are beyond the control of such Party in the performance of its obligations hereunder; provided, however, in all cases, only to the extent that the Party claiming force majeure (1) did not cause such force majeure condition, and (2) throughout the pendency of such force majeure condition, utilizes commercially reasonable efforts to minimize the impact and delays caused by such force majeure condition. Maximum Project Cost is $1,972,500.00. Park Dedication has the meaning ascribed to that term in Section 4(a)(1). Park Development Fee shall have the meaning ascribed to that term in Section 4(b)(1). Park Improvements means design, surveying, testing, site excavation, and construction of the Base Park Improvements, and any other improvements constructed by or on behalf of Developer in conjunction with such improvements on that land subject to the Park Dedication and in accordance with construction plan(s) approved by the City in accordance with the City Regulations. SECTION 3 GENERAL PROVISIONS (a) Documentation of Actual Amount Paid. Once Developer completes the Park Improvements or a portion thereof, Developer shall provide the City Manager with documentation reasonably Park Fee Development Agreement - Page 3 acceptable to the City Manager evidencing Developer's Design and Construction Cost, which may consist of actual receipts of Developer’s Design and Construction Cost or other evidence substantiating such actual costs (the “Evidence of Payments”). The City Manager shall review the Evidence of Payments and shall approve or deny Developer's Design and Construction Cost (or portion thereof as shown in the Evidence of Payments) within fifteen (15) calendar days of receipt thereof (which approvals shall not be unreasonably withheld). If the City Manager denies any of the costs, the City Manager shall provide a detailed explanation. If the City Manager takes no action within such fifteen (15) day period, the documentation and Developer's Design and Construction Cost set forth in such Evidence of Payments shall be deemed approved. Upon approval (or deemed approval) of Developer's Design and Construction Cost set forth in the Evidence of Payments, the City shall issue a written acceptance letter to Developer, which shall signify final acceptance by the City of the Park Improvements (or portion thereof, as applicable). Developer may complete the Park Improvements in phases and may submit separate Evidence of Payments for separate phases, in its discretion. If Developer elects to submit separate Evidence of Payments for separate phases, the City will approve such Evidence of Payments in phases and accept the Park Improvements in phases. (b) Approval of Plats/Plans. Approval by the City, the City's engineer or other City employee or representative of any plans, designs or specifications submitted by Developer pursuant to this Agreement or pursuant to City Regulations shall not constitute or be deemed to be a release of the responsibility and liability of Developer, its engineer, employees, officers or agents for the accuracy and competency of their design and specifications. Further, any such approvals shall not be deemed to be an assumption of such responsibility and liability by the City for any defect in the design and specifications prepared by Developer's engineer, its officers, agents, servants or employees, it being the intent of the Parties that approval by the City's engineer signifies the City's approval on only the general design concept of the improvements to be constructed and that the design plans and specifications meet the requirements of the City Regulations. (c) Insurance. Developer or its contractor(s) shall acquire and maintain, during the period of time when the Park Improvements are under design: (a) workers compensation insurance in the amount required by law; and (b) commercial general liability insurance including personal injury liability, premises operations liability, and contractual liability, covering, but not limited to, the liability assumed under any indemnification provisions of this Agreement, with limits of liability for bodily injury, death and property damage of not less than $1,000,000.00. Such insurance shall also cover any and all claims which might arise out of the design contracts for the Park Improvements, whether by Developer, a contractor, subcontractor, engineer, materialman, or otherwise. Coverage must be on a "per occurrence" basis. All such insurance shall: (i) be issued by a carrier which is rated "A-1" or better by A.M. Best's Key Rating Guide and licensed to do business in the State of Texas; (ii) name the City as an additional insured; and (iii) contain a waiver of subrogation endorsement in favor of the City. Upon the execution of design contracts, Developer shall provide to the City certificates of insurance evidencing such insurance coverage together with the declaration of such policies, along with the endorsement naming the City as an additional insured. Each such policy shall provide that, at least 30 days prior to the cancellation, non-renewal or modification of the same, the City shall receive written notice of such cancellation, non-renewal or modification. Park Fee Development Agreement - Page 4 (d) Indemnification and Hold Harmless. DEVELOPER COVENANTS AND AGREES TO INDEMNIFY AND DOES HEREBY INDEMNIFY, HOLD HARMLESS AND DEFEND THE CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY DAMAGE OR LOSS AND/OR PERSONAL INJURY, INCLUDING, WITHOUT LIMITATION, DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR ASSERTED (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND RELATED EXPENSES, EXPERT WITNESS FEES AND RELATED EXPENSES AND OTHER CONSULTANT FEES AND RELATED EXPENSES) ARISING OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THE NEGLIGENT OR OTHERWISE WRONGFUL ACTS OR OMISSIONS OF DEVELOPER, ITS AGENTS, SERVANTS, CONTRACTORS, SUBCONTRACTORS, MATERIAL MEN OR EMPLOYEES IN CONNECTION WITH THE DESIGN OF THE PARK IMPROVEMENTS, INCLUDING BUT NOT LIMITED TO INJURY OR DAMAGE TO CITY PROPERTY. SUCH INDEMNITY SHALL SURVIVE THE TERM OF THIS AGREEMENT FOR A PERIOD OF TWO YEARS FROM THE DATE OF THE CITY’S ACCEPTANCE OF THE PARK IMPROVEMENTS. IF THE PARK IMPROVEMENTS ARE CONSTRUCTED BY DEVELOPER AT NO TIME SHALL THE CITY HAVE ANY CONTROL OVER OR CHARGE OF THE DESIGN OF THE PARK IMPROVEMENTS BY DEVELOPER AND THE SUBJECT OF THIS AGREEMENT, NOR THE MEANS, METHODS, TECHNIQUES, SEQUENCES OR PROCEDURES UTILIZED FOR SAID DESIGN. THIS AGREEMENT DOES NOT CREATE A JOINT ENTERPRISE BETWEEN THE CITY AND DEVELOPER. DEVELOPER FURTHER COVENANTS AND AGREES TO INDEMNIFY, HOLD HARMLESS, AND DEFEND THE CITY AGAINST ANY AND ALL CLAIMS OR SUITS, BY ANY PERSON CLAIMING AN INTEREST IN THE PROPERTY WHO HAS NOT SIGNED THIS AGREEMENT AND WHICH CLAIMS: (1) ARISE IN ANY WAY FROM THE CITY'S RELIANCE UPON DEVELOPER'S REPRESENTATIONS IN THIS AGREEMENT; OR (2) RELATE IN ANY MANNER OR ARISE IN CONNECTION WITH THIS AGREEMENT OR IN CONNECTION WITH DEVELOPER'S OBLIGATIONS UNDER THIS AGREEMENT. NOTWITHSTANDING THIS PROVISION OR ANY OTHER PROVISION OF THIS AGREEMENT, DEVELOPER SHALL NOT BE OBLIGATED TO INDEMNIFY, DEFEND, OR HOLD THE CITY HARMLESS FOR THE CITY'S OR ITS AGENTS’, EMPLOYEES’, REPRESENTATIVES’, OFFICIALS’ OR CONTRACTORS’ OWN NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THIS INDEMNIFICATION AND HOLD HARMLESS PROVISION SHALL ONLY APPLY TO DEVELOPER IF DEVELOPER CONSTRUCTS THE PARK IMPROVEMENTS. SECTION 4 PARK DEDICATION, IMPROVEMENTS, AND REIMBURSEMENT (a) Developer Obligations; Construction of Park Improvements. (1) In full satisfaction of any owner or developer of the Property’s obligations under Section 9.02.135 of the City Code to dedicate land and/or make a payment of cash in lieu of land Park Fee Development Agreement - Page 5 dedication, Developer shall dedicate [+/- 28 acres] of land to the City in the general location along E. Foster Crossing Road labeled as “Park Dedication Area” on Exhibit B- 2 hereto to be used for a public park (“Park Dedication”). The Park Dedication shall be the only park land dedication required by the City for any development on the Property and shall fully satisfy Developer’s park land dedication requirements (or cash in lieu) under the City Code for the entirety of the Property. The Park Dedication shall be provided to the City as part of the final plat for the portion of the Property adjacent to the area subject to the Park Dedication. (2) As a condition to receipt of the Reimbursement set forth herein, Developer agrees to design and construct the Base Park Improvements as listed below and more particularly described in Exhibit B-1 attached hereto. For the avoidance of doubt, the design and layout of the Park Improvements as shown on Exhibit B-1 is conceptual in nature and Developer shall not be held to this exact design. Developer may make changes to the design of the Park Improvements from the design shown on Exhibit B-1 so long as Park Improvements contain the Base Park Improvements. If the Developer’s Design and Construction Cost for the Base Park Improvements is less than the Maximum Project Cost, then the Developer agrees to make a payment to the City in an amount equal to the Maximum Project Cost less the Developer’s Design and Construction Cost for the Base Park Improvements (the “Park Improvement Payment”). Notwithstanding any statement to the contrary herein, the Developer shall not be required to make any Park Improvement Payment if the Developer’s Design and Construction Cost for the Base Park Improvements equals or exceeds the Maximum Project Cost. The City will use the Park Improvement Payment to construct certain additional improvements to the area subject to the Park Dedication, referred to herein as the “Add-Alternate Park Improvements”. The Add-Alternate Park Improvements are listed and ranked from most to least desirable in subsection (ii) below – with (a) being the most desirable and (d) being the least desirable. The City may construct all or a portion of the Add-Alternate Park Improvements in order of the ranking in the list below. By way of example, if only one of the Add-Alternate Park Improvements fits within the amount of the Park Improvement Payment, then the City will construct the south parking lot with the funds from the Park Improvement Payment. Or, by way of a second example, if only two of the Add-Alternate Park Improvements fit within the amount of the Park Improvement Payment, then the City will construct the south parking lot and the trails to the south parking lot. The City may construct the Add-Alternate Park Improvements at such time as the City deems desirable. For the avoidance of doubt, the Developer shall not be required to construct any Add-Alternate Park Improvements. i. Base Park Improvements (a) Northern parking lot as generally shown on Exhibit B-1; (b) Restroom; (c) Pavilion; (d) Playground; Park Fee Development Agreement - Page 6 (e) One or more soccer field(s); (f) A trail going from east to west of the land subject to the Park Dedication; ii. Add-Alternate Park Improvements (a) South parking lot as generally shown on Exhibit B-1; (b) Trails connecting to the south parking lot; (c) One or more pickleball/tennis court(s); (d) One or more volleyball court(s) (3) Timing for design and construction of the Park Improvements. i. Developer agrees to commence design of the Park Improvements within 120 days of execution of this Agreement. For purposes of this Agreement, Developer shall be considered to “commence design” of the Park Improvements when Developer executes a contract with an engineer and/or architect for design of the Park Improvements and provides notice to such engineer and/or architect to commence design. ii. The northern parking lot as generally shown on Exhibit B-1, the restroom, and a trail from east to west through the land subject to the Park Dedication shall be completed prior to occupancy of the fiftieth (50th) single-family dwelling unit on the Property. iii. The pavilion, playground, and one or more soccer fields shall be completed prior to occupancy of the one-hundredth (100th) single- family dwelling unit on the Property. (4) For the avoidance of doubt, the City agrees that completion of the Park Improvements (or any portion thereof) shall not be a condition to any plat approval for the Property (or portion thereof), approval of construction plans, building permits, acceptance of on-site public improvements, or any other approval required for the Developer to begin construction on the Property and complete development of the Property (or portion thereof). (5) Notwithstanding any provision in this Agreement to the contrary, Developer has no obligation hereunder to construct all or any portion of the Park Improvements; however, construction of the Park Improvements in accordance with the terms hereof is a condition precedent to receipt of the Reimbursement (defined herein). (b) City Obligations. Park Fee Development Agreement - Page 7 (1) The City agrees to reimburse Developer from the park development fees (set forth in Section 9.02.135 of the City Code) (“Park Development Fee(s)”) already paid or to be paid for any development within the Property, as applicable, in an amount equal to the actual Developer’s Design and Construction Cost for the Park Improvements plus the amount of the Park Improvement Payment (if any), which amount shall not to exceed the actual Park Development Fees collected by the City for development within the Property (including all portions of the Property and all development types, e.g., single-family and multi-family) (the “Reimbursement”). In order to receive the Reimbursement, Developer shall comply with Section 3(a) herein. The City will provide the Reimbursement to Developer within the 30 days of receipt of any Evidence of Payments (so long as Park Development Fees have been collected for development within the Property). If sufficient Park Development Fees have not been collected to reimburse Developer for all of Developer’s Design and Construction Cost included in an Evidence of Payments and the amount of any Park Improvement Payment, then the City will provide any remaining Reimbursement due and owing to Developer immediately upon collection of any additional Park Development Fees for development within the Property. For the avoidance of doubt, the Reimbursement will be paid in phases if the Developer chooses (in its discretion) to submit the Evidence of Payments in phases as it constructs the Park Improvements. (2) Notwithstanding Section 4(b)(1) above, the Reimbursement authorized by this Agreement shall be null and void if the Developer fails to complete the design and construction of the Park Improvements by December 31, 2027, subject to Force Majeure. (c) Ownership and Acceptance. Upon dedication of the Park Dedication, the City will accept the Park Dedication and will own, maintain, and operate the land subject to the Park Dedication. Upon completion of any of the Park Improvements constructed by or on behalf of Developer, or portion thereof, the City will accept such Park Improvements. The Developer will provide the Park Improvement Payment to the City (if required pursuant to Section 4(a)(2) herein) upon the City’s acceptance of all of the Park Improvements constructed by or on behalf of Developer. For the avoidance of doubt, the Park Improvements may be completed and accepted in phases, in Developer’s discretion. All of the Park Improvements shall be owned by the City upon acceptance thereof by the City. Developer agrees to take any action reasonably required by the City to transfer, convey, or otherwise dedicate the Park Improvements. Upon completion of construction of any of the Park Improvements, the City shall maintain and operate the Park Improvements. Any future capital improvements for the Park Improvements or development of the land subject to the Park Dedication will be made at the City’s expense and discretion, and Developer shall not be required to pay for or provide any improvements other than the initial design and construction of the Park Improvements described herein. If the Park Dedication occurs prior to completion of construction of any of the Park Improvements, the City agrees to provide any easements needed by Developer to facilitate Developer’s ability to construct such remaining Park Improvements. SECTION 5 EFFECTIVE DATE The "Effective Date" of this Agreement is the date that the last of the Parties' signatures to this Agreement is fully and properly affixed to this Agreement and acknowledged by a public notary. Park Fee Development Agreement - Page 8 The City's duties and obligations hereunder shall not arise unless and until all Parties have duly executed this Agreement. SECTION 6 TERMINATION This Agreement and all obligations of the Parties hereto, shall terminate upon full performance of the terms of this Agreement. SECTION 7 SUCCESSORS AND ASSIGNS (a) All obligations and covenants under this Agreement shall bind Developer and its successors and assigns. (b) This Agreement shall be assignable, in whole or in part, to future owners of all or a portion of the Property, any affiliate or related entity of Developer, or any lien holder for all or a portion of the Property, without the prior written consent of the City but upon written notice to the City. Except as otherwise provided in this Section, this Agreement shall not be assigned by Developer without the prior written consent of the City Manager, which consent shall not be unreasonably withheld or delayed if the assignee demonstrates financial ability to perform. Any Reimbursement due to Developer pursuant to this Agreement may be assigned by Developer without the consent of, but upon written notice to the City pursuant to the terms hereof. An assignee shall be considered a “Party” for the purposes of this Agreement. Each assignment shall be in writing executed by Developer and the assignee and shall obligate the assignee to be bound by this Agreement to the extent this Agreement applies or relates to the obligations, rights, title, or interests being assigned. SECTION 8 MISCELLANEOUS PROVISIONS (a) Authority to execute contract. The undersigned officers and/or agents of the Parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the Parties hereto, and each Party hereby certifies to the other that any necessary resolutions or other act extending such authority have been duly passed and are now in full force and effect. (b) Events of Default. No Party shall be in default under this Agreement until notice of the alleged failure of such Party to perform has been given in writing (which notice shall set forth in reasonable detail the nature of the alleged failure) and until such Party has been given a reasonable time to cure the alleged failure (such reasonable time to be determined based on the nature of the alleged failure, but in no event less than thirty (30) days after written notice of the alleged failure has been given except as relates to a type of default for which a different time period is expressly set forth). The cure period for any monetary obligations shall be limited to 10 calendar days. Notwithstanding the foregoing, except for monetary obligations, no Party shall be in default under this Agreement if, within the applicable cure period, the Party to whom the notice was given begins performance and thereafter diligently and continuously pursues performance until the alleged failure has been cured. Park Fee Development Agreement - Page 9 (c) Remedies. Except as otherwise set forth in this Agreement, as compensation for the other Party’s default, an aggrieved Party is limited to seeking specific performance of the other Party’s obligations under this Agreement. (d) Notice. All notices, demands or other communications required or provided hereunder shall be in writing and shall be deemed to have been given on the earlier to occur of actual receipt or three (3) days after the same are given by hand delivery or deposited in the United States mail, certified or registered, postage prepaid, return receipt requested, addressed to the Parties at the addresses set forth below or at such other addresses as such Parties may designate by written notice to the other Parties in accordance with this notice provision. If to the City: City of Anna Attn: City Manager P.O. Box 776 111 N. Powell Parkway Anna, TX 75409 If to Developer: Skorburg Acquisitions LLC Attn: Adam Buczek and Adam Shiffer 8214 Westchester, Suite 900 Dallas, TX 75225 With a copy to: Winstead PC Attn: Laura Hoffmann 2728 N. Harwood St., Suite 500 Dallas, TX 75201 (e) Force Majeure. Each Party shall use good faith, due diligence and reasonable care in the performance of its respective obligations under this Agreement, and time shall be of the essence in such performance; however, in the event a Party is unable, due to Force Majeure, to perform its obligations under this Agreement, then the obligations affected by the Force Majeure shall be temporarily suspended. Within ten (10) business days after the occurrence of a Force Majeure, the Party claiming the right to temporarily suspend its performance, shall give notice to all the Parties in accordance with Section 8(d), including a detailed explanation of the Force Majeure and a description of the action that will be taken to remedy the Force Majeure and resume full performance at the earliest possible time. After giving notice under this paragraph, the Party claiming the right to temporarily suspend its performance shall provide the other Party a detailed explanation of the extent to which the Force Majeure condition continues to exist and a description of the actions currently being taken to remedy the Force Majeure and such additional explanations shall be provided in writing at least once every two weeks. (f) Estoppel Certificates. From time to time, upon written request of Developer or any future owner of all or a portion of the Property, and upon the payment to the City of a $500.00 fee plus all reasonable costs incurred by the City in providing the certificate described in this Park Fee Development Agreement - Page 10 section, including without limitation attorney’s fees and related costs, the City Manager, or his/her designee will, in his/her official capacity and to his/her reasonable knowledge and belief, execute a written estoppel certificate identifying any obligations of Developer under this Agreement that are outstanding or in default and confirming whether this Agreement is still in effect. (g) Complete Agreement. This Agreement embodies the entire Agreement between the Parties and cannot be varied or terminated except as set forth in this Agreement, or by written agreement of all Parties expressly amending the terms of this Agreement. (h) Applicable Law and Venue. This Agreement shall be performable and all compensation payable in Collin County, Texas. Venue and exclusive jurisdiction under this Agreement lies in a court of competent jurisdiction in Collin County, Texas. (i) Severability. If any clause, paragraph, section or portion of this Agreement shall be found to be illegal, unlawful, unconstitutional or void for any reason, the balance of the Agreement shall remain in full force and effect and the unlawful provision shall be replaced with a provision as similar in terms and effect to such unlawful provision as may be valid, legal and enforceable. (j) Representation. Each signatory representing this Agreement has been read by the party for which this Agreement is executed and that such Party has had an opportunity to confer with its counsel. (k) Consideration. This Agreement is executed by the Parties hereto without coercion or duress and for substantial consideration, the sufficiency of which is hereby acknowledged. (l) Waiver. Waiver by any Party or any breach of this Agreement, or the failure of any Party to enforce any of the provisions of this Agreement, at any time shall not in any way affect, limit or waive such Party's right thereafter to enforce and compel strict compl iance of the Agreement. (m) Miscellaneous Drafting Provisions. This Agreement was drafted equally by the Parties hereto. The language of all parts of this Agreement shall be construed as a whole according to its fair meaning, and any presumption or principle that the language herein is to be construed against any Party shall not apply. Headings in this Agreement are for the convenience of the Parties and are not intended to be used in construing this document. (n) No Other Beneficiaries. This Agreement is for the sole and exclusive benefit of the Parties hereto and is not intended to and shall not confer any rights or benefits on any third party not a signatory hereto. (o) Counterparts. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. (p) No Waiver. No waiver of any provision of this Agreement will be deemed to constitute a waiver of any other provision or any other agreement among the Parties. No waiver of any provision of this Agreement will be deemed to constitute a continuing waiver unless expressly Park Fee Development Agreement - Page 11 provided for by written amendment to this Agreement; nor will the waiver of any default under this Agreement be deemed a waiver of any subsequent defaults of the same type. Except as provided herein, nothing herein shall waive any obligations of Developer under applicable City Regulations. (q) Conflicts. When not in conflict with the terms and conditions of this Agreement, the development of the Property shall be subject to all applicable City Regulations, including but not limited to the City’s subdivision regulations and engineering design standards. In the event of any conflict between this Agreement and any other ordinance, rule, regulation, standard, policy, order, guideline, or other City adopted or City enforced requirement, whether existing on the Effective Date or hereinafter adopted, this Agreement, including its exhibits, as applicable, shall control. [SIGNATURE PAGES FOLLOW, REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] Park Fee Development Agreement – Signature Page DEVELOPER: SKORBURG ACQUISITIONS LLC, a Texas limited liability company By: Name: Title: STATE OF TEXAS § § COUNTY OF ________ § This instrument was acknowledged before me on the ___ day of ____________ 2023, by ________________, ______________ of Skorburg Acquisitions LLC, a Texas limited liability company, on behalf of said company. Notary Public in and for the State of Texas (SEAL) Park Fee Development Agreement – Signature Page CITY OF ANNA By: Ryan Henderson, Interim City Manager IN WITNESS WHEREOF: STATE OF TEXAS § § COUNTY OF COLLIN § Before me, the undersigned notary public, on the ______ day of ___________, 2023, personally appeared _____________, known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same in his capacity as Interim City Manager of the City of Anna, Texas. Notary Public, State of Texas (SEAL) Park Fee Development Agreement – Signature Page ATTACHMENTS Exhibit A – The Property (legal description) Exhibit B-1 – Park Improvements Exhibit B-2 – PD Concept Plan (Showing General Location of the Park Dedication) Exhibit C – Cost Estimate (including design and construction) Exhibit D – Park Development Fee Calculation Park Fee Development Agreement – Exhibit A EXHIBIT A The Property Park Fee Development Agreement – Exhibit A Park Fee Development Agreement – Exhibit B-1 EXHIBIT B-1 The Park Project (see attached) Park Fee Development Agreement – Exhibit B-1 Park Fee Development Agreement – Exhibit B-2 EXHIBIT B-2 PD Concept Plan (see attached) Park Fee Development Agreement – Exhibit B-2 Park Dedication Area Park Fee Development Agreement – Exhibit B-2 Park Fee Development Agreement – Exhibit C EXHIBIT C Breakdown of Costs (see attached) Park Fee Development Agreement – Exhibit C Park Fee Development Agreement – Exhibit D EXHIBIT D Park Development Fee Calculation Amount Available for Reimbursement from Approximate Acres Lots/Units/SF* Per Lot Reimbursement Item Amount Single Family Lots 515 $1,500 $772,500 Multi-Family South of Foster Crossing 36 600 - 792 $2,000 $1,200,000- $1,584,000.00 *Number of units/lots is an estimate. 4879-7174-2069v.5 19719-125 Item No. 6.i. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: AGENDA ITEM: Conduct a Public Hearing/Consider/Discuss/Action on a Resolution approving a negotiated settlement between The Atmos Cities Steering Committee and Atmoss Energy Corp., Mid-Tex Division regarding the company's 2023 rate review mechanism filing. (City Attorney Clark McCoy) SUMMARY: Application of the standards set forth in ACSC’s RRM Tariff reduces the Company’s request to $156.1 million, $113.8 million of which would be applicable to ACSC members. After reviewing the filing and conducting discovery, ACSC’s consultants concluded that the system-wide deficiency under the RRM regime should be $130.9 million instead of the claimed $156.1 million. FINANCIAL IMPACT: This item has no strategic connection. BACKGROUND: The City, along with 181 other Mid-Texas cities served by Atmos Energy Corporation, Mid-Tex Division (“Atmos Mid-Tex” or “Company”), is a member of the Atmos Cities Steering Committee (“ACSC”). In 2007, ACSC and Atmos Mid-Tex settled a rate application filed by the Company pursuant to Section 104.301 of the Texas Utilities Code for an interim rate adjustment commonly referred to as a GRIP filing (arising out of the Gas Reliability Infrastructure Program legislation). That settlement created a substitute rate review process, referred to as Rate Review Mechanism (“RRM”), as a substitute for future filings under the GRIP statute. Since 2007, there have been several modifications to the original RRM Tariff. The most recent iteration of an RRM Tariff was reflected in an ordinance adopted by ACSC members in 2018. On or about March 31, 2023, the Company filed a rate request pursuant to the RRM Tariff adopted by ACSC members. The Company claimed that its cost-of-service in a test year ending December 31, 2022, entitled it to additional system-wide revenues of $165.9 million. Application of the standards set forth in ACSC’s RRM Tariff reduces the Company’s request to $156.1 million, $113.8 million of which would be applicable to ACSC members. After reviewing the filing and conducting discovery, ACSC’s consultants concluded that the system-wide deficiency under the RRM regime should be $130.9 million instead of the claimed $156.1 million. After several settlement meetings, the parties have agreed to settle the case for $142 million. This is a reduction of $23.9 million to the Company’s initial request. This includes payment of ACSC’s expenses. The settlement also includes an additional $19.5 million for the securitization regulatory asset expenses related to Winter Storm Uri. This was previously approved by the Texas Legislature and Railroad Commission. The Effective Date for new rates is October 1, 2023. ACSC members should take action approving the Resolution/Ordinance before September 30, 2023. RATE TARIFFS Atmos generated rate tariffs attached to the Resolution/Ordinance will generate $142 million in additional revenues. Atmos also prepared a Proof of Revenues supporting the settlement figures. ACSC consultants have agreed that Atmos’ Proof of Revenues is accurate. BILL IMPACT The impact of the settlement on average residential rates is an increase of $6.47 on a monthly basis, or 7.31%. The increase for average commercial usage will be $24.72 or 5.19%. Atmos provided bill impact comparisons containing these figures. SUMMARY OF ACSC’S OBJECTION TO THE UTILITIES CODE SECTION 104.301 GRIP PROCESS ACSC strongly opposed the GRIP process because it constitutes piecemeal ratemaking by ignoring declining expenses and increasing revenues while rewarding the Company for increasing capital investment on an annual basis. The GRIP process does not allow any review of the reasonableness of capital investment and does not allow cities to participate in the Railroad Commission’s review of annual GRIP filings or allow recovery of Cities’ rate case expenses. The Railroad Commission undertakes a mere administrative review of GRIP filings (instead of a full hearing) and rate increases go into effect without any material adjustments. In ACSC’s view, the GRIP process unfairly raises customers’ rates without any regulatory oversight. In contrast, the RRM process has allowed for a more comprehensive rate review and annual evaluation of expenses and revenues, as well as capital investment. RRM SAVINGS OVER GRIP While residents outside municipal limits must pay rates governed by GRIP, there are some cities served by Atmos Mid-Tex that chose to remain under GRIP rather than adopt RRM. Additionally, the City of Dallas adopted a variation of RRM which is referred to as DARR. When new rates become effective on October 1, 2023, ACSC residents will maintain an economic monthly advantage over GRIP and DARR rates. Comparison to Other Mid-Tex Rates (Residential) Average Bill Compared to RRM Cities RRM Cities: $42.62 - DARR: $42.55 ($0.07) ATM Cities: $44.39 $1.77 Environs: $44.27 $1.65 Note: ATM Cities and Environs rates are as-filed. Also note that DARR uses a test year ending in September rather than December. EXPLANATION OF “BE IT RESOLVED” PARAGRAPHS: 1. This section approves all findings in the Resolution/Ordinance. 2. This section adopts the RRM rate tariffs and finds the adoption of the new rates to be just, reasonable, and in the public interest. 3. This section makes it clear that Cities may challenge future costs associated with gas leaks. 4. This section finds that existing rates are unreasonable. Such finding is a necessary predicate to establishment of new rates. The new tariffs will permit Atmos Mid-Tex to recover an additional $142 million on a system-wide basis. 5. This section approves an exhibit that establishes a benchmark for pensions and retiree medical benefits to be used in future rate cases or RRM filings. 6. This section requires the Company to reimburse the City for expenses associated with review of the RRM filing, settlement discussions, and adoption of the Resolution/Ordinance approving new rate tariffs. 7. This section repeals any resolution or ordinance that is inconsistent with the Resolution/Ordinance. 8. This section finds that the meeting was conducted in compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. 9. This section is a savings clause, which provides that if any section is later found to be unconstitutional or invalid, that finding shall not affect, impair, or invalidate the remaining provisions of this Resolution/Ordinance. This section further directs that the remaining provisions of the Resolution/Ordinance are to be interpreted as if the offending section or clause never existed. 10. This section provides for an effective date upon passage. 11. This section directs that a copy of the signed Resolution/Ordinance be sent to a representative of the Company and legal counsel for ACSC. CONCLUSION The Legislature’s GRIP process allowed gas utilities to receive annual rate increases associated with capital investments. The RRM process has proven to result in a more efficient and less costly (both from a consumer rate impact perspective and from a ratemaking perspective) than the GRIP process. Given Atmos Mid-Tex’s claim that its historic cost of service should entitle it to recover $165.9 million in additional system-wide revenues, the RRM settlement at $142 million for ACSC members reflects substantial savings to ACSC cities. Settlement at $142 million is fair and reasonable. The ACSC Executive Committee consisting of city employees of 18 ACSC members urges all ACSC members to pass the Resolution/Ordinance before September 30, 2023. New rates become effective October 1, 2023. STRATEGIC CONNECTIONS: This item has no strategic connection. ATTACHMENTS: 1. Atmos Mid-Tex 2023 RRM Settlement Resolution 2. CY22 MTX RRM - Tariffs 3. CY22 MTX RRM - Pension Benchmark 4. CY22 MTX RRM - Average Bill RESOLUTION NO. ___________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, APPROVING A NEGOTIATED SETTLEMENT BETWEEN THE ATMOS CITIES STEERING COMMITTEE (“ACSC”) AND ATMOS ENERGY CORP., MID-TEX DIVISION REGARDING THE COMPANY’S 2023 RATE REVIEW MECHANISM FILING; DECLARING EXISTING RATES TO BE UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT; FINDING THE RATES TO BE SET BY THE ATTACHED SETTLEMENT TARIFFS TO BE JUST AND REASONABLE AND IN THE PUBLIC INTEREST; APPROVING AN ATTACHMENT ESTABLISHING A BENCHMARK FOR PENSIONS AND RETIREE MEDICAL BENEFITS; REQUIRING THE COMPANY TO REIMBURSE ACSC’S REASONABLE RATEMAKING EXPENSES; DETERMINING THAT THIS RESOLUTION WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; ADOPTING A SAVINGS CLAUSE; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND THE ACSC’S LEGAL COUNSEL. WHEREAS, the City of Anna, Texas (“City”) is a gas utility customer of Atmos Energy Corp., Mid-Tex Division (“Atmos Mid-Tex” or “Company”), and a regulatory authority with an interest in the rates, charges, and services of Atmos Mid-Tex; and WHEREAS, the City is a member of the Atmos Cities Steering Committee (“ACSC”), a coalition of similarly-situated cities served by Atmos Mid-Tex (“ACSC Cities”) that have joined together to facilitate the review of, and response to, natural gas issues affecting rates charged in the Atmos Mid-Tex service area; and WHEREAS, ACSC and the Company worked collaboratively to develop a Rate Review Mechanism (“RRM”) tariff that allows for an expedited rate review process by ACSC Cities as a substitute to the Gas Reliability Infrastructure Program (“GRIP”) process instituted by the 2 Legislature, and that will establish rates for the ACSC Cities based on the system-wide cost of serving the Atmos Mid-Tex Division; and WHEREAS, the current RRM tariff was adopted by the City in a rate ordinance in 2018; and WHEREAS, on about March 1, 2023, Atmos Mid-Tex filed its 2023 RRM rate request with ACSC Cities based on a test year ending December 31, 2022; and WHEREAS, ACSC coordinated its review of the Atmos Mid-Tex 2023 RRM filing through its Executive Committee, assisted by ACSC’s attorneys and consultants, to resolve issues identified in the Company’s RRM filing; and WHEREAS, the Executive Committee, as well as ACSC’s counsel and consultants, recommend that ACSC Cities approve an increase in base rates for Atmos Mid-Tex of $142 million on a system-wide basis with an Effective Date of October 1, 2023; and WHEREAS, ACSC agrees that Atmos’ plant-in-service is reasonable; and WHEREAS, with the exception of approved plant-in-service, ACSC is not foreclosed from future reasonableness evaluation of costs associated with incidents related to gas leaks; and WHEREAS, the attached tariffs (Attachment 1) implementing new rates are consistent with the recommendation of the ACSC Executive Committee, are agreed to by the Company, and are just, reasonable, and in the public interest; and WHEREAS, the settlement agreement sets a new benchmark for pensions and retiree medical benefits (Attachment 2); and WHEREAS, the RRM Tariff contemplates reimbursement of ACSC’s reasonable expenses associated with RRM applications; and 3 WHEREAS, the RRM Tariff includes Securitization Interest Regulatory Asset amount of $19.5 million; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1. That the findings set forth in this Resolution are hereby in all things approved. Section 2. That, without prejudice to future litigation of any issue identified by ACSC, the City Council finds that the settled amount of an increase in revenues of $142 million on a system-wide basis represents a comprehensive settlement of gas utility rate issues affecting the rates, operations, and services offered by Atmos Mid-Tex within the municipal limits arising from Atmos Mid-Tex’s 2023 RRM filing, is in the public interest, and is consistent with the City’s authority under Section 103.001 of the Texas Utilities Code. Section 3. That despite finding Atmos Mid-Tex’s plant-in-service to be reasonable, ACSC is not foreclosed in future cases from evaluating the reasonableness of costs associated with incidents involving leaks of natural gas. Section 4. That the existing rates for natural gas service provided by Atmos Mid-Tex are unreasonable. The new tariffs attached hereto and incorporated herein as Attachment 1, are just and reasonable, and are designed to allow Atmos Mid-Tex to recover annually an additional $142 on a system-wide basis, over the amount allowed under currently approved rates. Such tariffs are hereby adopted. Section 5. That the ratemaking treatment for pensions and retiree medical benefits in Atmos Mid-Tex’s next RRM filing shall be as set forth on Attachment 2, attached hereto and incorporated herein. 4 Section 6. That Atmos Mid-Tex shall reimburse the reasonable ratemaking expenses of the ACSC in processing the Company’s 2023 RRM filing. Section 7. That to the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Resolution, it is hereby repealed. Section 8. That the meeting at which this Resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 9. That if any one or more sections or clauses of this Resolution is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair, or invalidate the remaining provisions of this Resolution, and the remaining provisions of the Resolution shall be interpreted as if the offending section or clause never existed. Section 10. That consistent with the City Ordinance that established the RRM process, this Resolution shall become effective from and after its passage with rates authorized by attached tariffs to be effective for bills rendered on or after September 30, 2023. Section 11. That a copy of this Resolution shall be sent to Atmos Mid-Tex, care of Chris Felan, Vice President of Rates and Regulatory Affairs Mid-Tex Division, Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1862, Dallas, Texas 75240, and to Thomas Brocato, General Counsel to ACSC, at Lloyd Gosselink Rochelle & Townsend, P.C., 816 Congress Avenue, Suite 1900, Austin, Texas 78701. 2557/36/8645038 5 DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS, BY A VOTE OF ____ TO ____, ON THIS THE DAY OF , 2023. Mayor Nate Pike ATTEST: City Secretary Carrie L. Land APPROVED AS TO FORM: ______________________________ City Attorney Clark McCoy MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: R – RESIDENTIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Application Applicable to Residential Customers for all natural gas provided at one Point of Delivery and measured through one meter. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $ 22.25 per month Rider CEE Surcharge $ 0.05 per month 1 Total Customer Charge $ 22.30 per month Commodity Charge – All Ccf $0.48567 per Ccf 2 Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated in accordance with Part (a) and Part (b), respectively, of Rider GCR. Weather Normalization Adjustment: Plus or Minus an amount for weather normalization calculated in accordance with Rider WNA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company’s Tariff for Gas Service. 1Reference Rider CEE - Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1, 2023. 2The commodity charge includes the base rate amount of $0.46724 per Ccf and Securitization Regulatory Asset amounts related to financing costs in the amount of $0.01843 per Ccf until recovered. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: C – COMMERCIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Application Applicable to Commercial Customers for all natural gas provided at one Point of Delivery and measured through one meter and to Industrial Customers with an average annual usage of less than 30,000 Ccf. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Ccf charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Bill $ 72.00 per month Rider CEE Surcharge ($ 0.02) per month 1 Total Customer Charge $ 71.98 per month Commodity Charge – All Ccf $ 0.18280 per Ccf 2 Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated in accordance with Part (a) and Part (b), respectively, of Rider GCR. Weather Normalization Adjustment: Plus or Minus an amount for weather normalization calculated in accordance with Rider WNA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company’s Tariff for Gas Service. Presumption of Plant Protection Level For service under this Rate Schedule, plant protection volumes are presumed to be 10% of normal, regular, historical usage as reasonably calculated by the Company in its sole discretion. If a customer believes it needs to be modeled at an alternative plant protection volume, it should contact the company at mdtx.plantprotection@atmosenergy.com. 1 Reference Rider CEE - Conservation and Energy Efficiency as approved in GUD 10170. Surcharge billing effective July 1, 2023. 2The commodity charge includes the base rate amount of $0.16437 per Ccf and Securitization Regulatory Asset amounts related to financing costs in the amount of $0.01843 per Ccf until recovered. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: I – INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Application Applicable to Industrial Customers with a maximum daily usage (MDU) of less than 200 MMBtu per day for all natural gas provided at one Point of Delivery and measured through one meter. Service for Industrial Customers with an MDU equal to or greater than 200 MMBtu per day will be provided at Company's sole option and will require special contract arrangements between Company and Customer. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and MMBtu charges to the amounts due under the riders listed below: Charge Amount Customer Charge per Meter $ 1,382.00 per month First 0 MMBtu to 1,500 MMBtu $ 0.7484 per MMBtu 1 Next 3,500 MMBtu $ 0.5963 per MMBtu1 All MMBtu over 5,000 MMBtu $ 0.2693 per MMBtu1 Gas Cost Recovery: Plus an amount for gas costs and upstream transportation costs calculated in accordance with Part (a) and Part (b), respectively, of Rider GCR. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer’s deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Company 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled “Daily Price Survey.” Replacement Index In the event the “midpoint” or “common” price for the Katy point listed in Platts Gas Daily in the table entitled “Daily Price Survey” is no longer published, Company will calculate the applicable imbalance fees 1 The tiered commodity charges include the base rate amounts of $0.5684, $0.4163, and $0.0893 per MMBtu, respectively, plus Securitization Regulatory Asset amounts related to financing costs in the amount of $0.1800 per MMBtu until recovered. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: I – INDUSTRIAL SALES APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company’s Tariff for Gas Service. Special Conditions In order to receive service under Rate I, Customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. Presumption of Plant Protection Level For service under this Rate Schedule, plant protection volumes are presumed to be 10% of normal, regular, historical usage as reasonably calculated by the Company in its sole discretion. If a customer believes it needs to be modeled at an alternative plant protection volume, it should contact the company at mdtx.plantprotection@atmosenergy.com. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: T – TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Application Applicable, in the event that Company has entered into a Transportation Agreement, to a customer directly connected to the Atmos Energy Corp., Mid-Tex Division Distribution System (Customer) for the transportation of all natural gas supplied by Customer or Customer’s agent at one Point of Delivery for use in Customer's facility. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's bill will be calculated by adding the following Customer and MMBtu charges to the amounts and quantities due under the riders listed below: Charge Amount Customer Charge per Meter $ 1,382.00 per month First 0 MMBtu to 1,500 MMBtu $ 0.5684 per MMBtu Next 3,500 MMBtu $ 0.4163 per MMBtu All MMBtu over 5,000 MMBtu $ 0.0893 per MMBtu Upstream Transportation Cost Recovery: Plus an amount for upstream transportation costs in accordance with Part (b) of Rider GCR. Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Rider FF is only applicable to customers inside the corporate limits of any incorporated municipality. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Imbalance Fees All fees charged to Customer under this Rate Schedule will be charged based on the quantities determined under the applicable Transportation Agreement and quantities will not be aggregated for any Customer with multiple Transportation Agreements for the purposes of such fees. Monthly Imbalance Fees Customer shall pay Company the greater of (i) $0.10 per MMBtu, or (ii) 150% of the difference per MMBtu between the highest and lowest “midpoint” price for the Katy point listed in Platts Gas Daily in the table entitled “Daily Price Survey” during such month, for the MMBtu of Customer’s monthly Cumulative Imbalance, as defined in the applicable Transportation Agreement, at the end of each month that exceeds 10% of Customer’s receipt quantities for the month. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RATE SCHEDULE: T – TRANSPORTATION APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer’s deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Company 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled “Daily Price Survey.” Replacement Index In the event the “midpoint” or “common” price for the Katy point listed in Platts Gas Daily in the table entitled “Daily Price Survey” is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement A transportation agreement is required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company’s Tariff for Gas Service. Special Conditions In order to receive service under Rate T, customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA – WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Provisions for Adjustment The Commodity Charge per Ccf (100 cubic feet) for gas service set forth in any Rate Schedules utilized by the cities of the Mid-Tex Division service area for determining normalized winter period revenues shall be adjusted by an amount hereinafter described, which amount is referred to as the "Weather Normalization Adjustment." The Weather Normalization Adjustment shall apply to all temperature sensitive residential and commercial bills based on meters read during the revenue months of November through April. The five regional weather stations are Abilene, Austin, Dallas, Waco, and Wichita Falls. Computation of Weather Normalization Adjustment The Weather Normalization Adjustment Factor shall be computed to the nearest one-hundredth cent per Ccf by the following formula: (HSFi x (NDD-ADD) ) WNAFi = Ri (BLi + (HSFi x ADD) ) Where i = any particular Rate Schedule or billing classification within any such particular Rate Schedule that contains more than one billing classification WNAFi = Weather Normalization Adjustment Factor for the ith rate schedule or classification expressed in cents per Ccf Ri = Commodity Charge rate of temperature sensitive sales for the ith schedule or classification. HSFi = heat sensitive factor for the ith schedule or classification divided by the average bill count in that class NDD = billing cycle normal heating degree days calculated as the simple ten-year average of actual heating degree days. ADD = billing cycle actual heating degree days. Bli = base load sales for the ith schedule or classification divided by the average bill count in that class The Weather Normalization Adjustment for the jth customer in ith rate schedule is computed as: WNA i = WNAF i x q ij Where q ij is the relevant sales quantity for the jth customer in ith rate schedule. Attachment 1 MID-TEX DIVISION ATMOS ENERGY CORPORATION RIDER: WNA – WEATHER NORMALIZATION ADJUSTMENT APPLICABLE TO: ALL CUSTOMERS IN THE MID-TEX DIVISION UNDER THE RRM TARIFF EFFECTIVE DATE: Bills Rendered on or after 10/01/2023 Base Use/Heat Use Factors Residential Commercial Base use Heat use Base use Heat use Weather Station Ccf Ccf/HDD Ccf Ccf/HDD Abilene 9.51 0.1415 88.91 0.7010 Austin 8.87 0.1213 213.30 0.7986 Dallas 12.54 0.2007 185.00 0.9984 Waco 8.81 0.1325 125.26 0.7313 Wichita Falls 10.36 0.1379 122.10 0.6083 Weather Normalization Adjustment (WNA) Report On or before June 1 of each year, the company posts on its website at atmosenergy.com/mtx-wna, in Excel format, a Weather Normalization Adjustment (WNA) Report to show how the company calculated its WNAs factor during the preceding winter season. Additionally, on or before June 1 of each year, the company files one hard copy and an Excel version of the WNA Report with the Railroad Commission of Texas' Gas Services Division, addressed to the Director of that Division. Attachment 1 Line No.Description Pension Account Plan Post- Employment Benefit Plan Pension Account Plan Post- Employment Benefit Plan Supplemental Executive Benefit Plan Adjustment Total (a)(b)(c)(d)(e)(f)(g) 1 Proposed Benefits Benchmark - Fiscal Year 2023 Willis Towers Watson Report as adjusted (1) (2) (3)1,434,339$ (518,336)$ 2,336,419$ (2,678,818)$ 267,917$ 2 Allocation Factor 44.92%44.92%78.74%78.74%100.00% 3 Proposed Benefits Benchmark Costs Allocated to Mid-Tex (Ln 1 x Ln 2)644,336$ (232,848)$ 1,839,667$ (2,109,267)$ 267,917$ 4 O&M and Capital Allocation Factor 100.00%100.00%100.00%100.00%100.00% 5 Proposed Benefits Benchmark Costs to Approve (Ln 3 x Ln 4)644,336$ (232,848)$ 1,839,667$ (2,109,267)$ 267,917$ 409,804$ 6 7 O&M Expense Factor (WP_F-2.3, Ln 2)78.60%78.60%39.63%39.63%11.00% 8 9 Summary of Costs to Approve (1): 10 Total Pension Account Plan 506,464$ 729,006$ 1,235,469$ 11 Total Post-Employment Benefit Plan (183,024)$ (835,840)$ (1,018,864) 12 Total Supplemental Executive Benefit Plan 29,471$ 29,471 13 Total (Ln 10 + Ln 11 + Ln 12)506,464$ (183,024)$ 729,006$ (835,840)$ 29,471$ 246,076$ ATMOS ENERGY CORP., MID-TEX DIVISION MID-TEX RATE REVIEW MECHANISM PENSIONS AND RETIREE MEDICAL BENEFITS FOR CITIES APPROVAL TEST YEAR ENDING DECEMBER 31, 2022 Shared Services Mid-Tex Direct Attachment 2 Line No.Current Proposed Amount Percent (b)(c)(d)(e) 1 Rate R @ 43.6 Ccf 2 Customer charge 21.55$ 3 Consumption charge 43.6 CCF X 0.36223$ =15.79 4 Rider GCR Part A 43.6 CCF X 0.63625$ =27.74 5 Rider GCR Part B 43.6 CCF X 0.41732$ =18.20 6 Subtotal 83.28$ 7 Rider FF & Rider TAX 83.28$ X 0.06237 =5.19 8 Total 88.47$ 9 10 Customer charge 22.25$ 11 Consumption charge 43.6 CCF X 0.48567$ =21.18 12 Rider GCR Part A 43.6 CCF X 0.63625$ =27.74 13 Rider GCR Part B 43.6 CCF X 0.41732$ =18.20 14 Subtotal 89.37$ 15 Rider FF & Rider TAX 89.37$ X 0.06237 =5.57 16 Total 94.94$ 6.47$ 7.31% 17 (a) ATMOS ENERGY CORP., MID-TEX DIVISION MID-TEX RATE REVIEW MECHANISM AVERAGE BILL COMPARISON - BASE RATES TEST YEAR ENDING DECEMBER 31, 2022 Change Description Line No.Current Proposed Amount Percent (b)(c)(d)(e)(a) ATMOS ENERGY CORP., MID-TEX DIVISION MID-TEX RATE REVIEW MECHANISM AVERAGE BILL COMPARISON - BASE RATES TEST YEAR ENDING DECEMBER 31, 2022 Change Description 18 Rate C @ 356.6 Ccf 19 Customer charge 63.50$ 20 Consumption charge 356.6 CCF X 0.14137$ =50.41 21 Rider GCR Part A 356.6 CCF X 0.63625$ =226.86 22 Rider GCR Part B 356.6 CCF X 0.30202$ =107.69 23 Subtotal 448.46$ 24 Rider FF & Rider TAX 448.46$ X 0.06237 =27.97 25 Total 476.43$ 26 27 Customer charge 72.00$ 28 Consumption charge 356.6 CCF X 0.18280$ =65.18 29 Rider GCR Part A 356.6 CCF X 0.63625$ =226.86 30 Rider GCR Part B 356.6 CCF X 0.30202$ =107.69 31 Subtotal 471.73$ 32 Rider FF & Rider TAX 471.73$ X 0.06237 =29.42 33 Total 501.15$ 24.72$ 5.19% 34 Line No.Current Proposed Amount Percent (b)(c)(d)(e)(a) ATMOS ENERGY CORP., MID-TEX DIVISION MID-TEX RATE REVIEW MECHANISM AVERAGE BILL COMPARISON - BASE RATES TEST YEAR ENDING DECEMBER 31, 2022 Change Description 35 Rate I @ 1720 MMBTU 36 Customer charge 1,204.50$ 37 Consumption charge 1,500 MMBTU X 0.4939$ =740.85 38 Consumption charge 220 MMBTU X 0.3617$ =79.64 39 Consumption charge 0 MMBTU X 0.0776$ =- 40 Rider GCR Part A 1,720 MMBTU X 6.2134$ =10,688.12 41 Rider GCR Part B 1,720 MMBTU X 0.6267$ =1,078.08 42 Subtotal 13,791.19$ 43 Rider FF & Rider TAX 13,791.19$ X 0.06237 =860.17 44 Total 14,651.36$ 45 46 Customer charge 1,382.00$ 47 Consumption charge 1,500 MMBTU X 0.7484$ =1,122.62 48 Consumption charge 220 MMBTU X 0.5963$ =131.30 49 Consumption charge 0 MMBTU X 0.2693$ =- 50 Rider GCR Part A 1,720 MMBTU X 6.2134$ =10,688.12 51 Rider GCR Part B 1,720 MMBTU X 0.6267$ =1,078.08 52 Subtotal 14,402.12$ 53 Rider FF & Rider TAX 14,402.12$ X 0.06237 =898.28 54 Total 15,300.40$ 649.04$ 4.43% 55 Line No.Current Proposed Amount Percent (b)(c)(d)(e)(a) ATMOS ENERGY CORP., MID-TEX DIVISION MID-TEX RATE REVIEW MECHANISM AVERAGE BILL COMPARISON - BASE RATES TEST YEAR ENDING DECEMBER 31, 2022 Change Description 56 Rate T @ 4720 MMBTU 57 Customer charge 1,204.50$ 58 Consumption charge 1,500 MMBTU X 0.4939$ =740.85 59 Consumption charge 3,220 MMBTU X 0.3617$ =1,164.50 60 Consumption charge 0 MMBTU X 0.0776$ =- 61 Rider GCR Part B 4,720 MMBTU X 0.6267$ =2,957.85 62 Subtotal 6,067.70$ 63 Rider FF & Rider TAX 6,067.70$ X 0.06237 =378.45 64 Total 6,446.15$ 65 66 Customer charge 1,382.00$ 67 Consumption charge 1,500 MMBTU X 0.5684$ =852.60 68 Consumption charge 3,220 MMBTU X 0.4163$ =1,340.29 69 Consumption charge 0 MMBTU X 0.0893$ =- 70 Rider GCR Part B 4,720 MMBTU X 0.6267$ =2,957.85 71 Subtotal 6,532.74$ 72 Rider FF & Rider TAX 6,532.74$ X 0.06237 =407.45 73 Total 6,940.19$ 494.04$ 7.66% Item No. 7.d. City Council Agenda Staff Report Meeting Date: 9/12/2023 Staff Contact: AGENDA ITEM: Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). Boards and Commission. Legal services review. SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: ATTACHMENTS: