HomeMy WebLinkAboutRes 2024-06-1641 Preliminary Limited Offering Memorandum for Special Assessment Revenue Bonds Series 2024 (Meadow Vista PID Area 1 Project)Draft 06.18.2024
NEW ISSUE NOT RATED
PRELIMINARY LIMITED OFFERING MEMORANDUM DATED JUNE 26, 2024
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.
$12,387,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA 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 2024 (Meadow Vista 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, 2025, until maturity or earlier redemption. The Bonds will be registered in the name of
Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. No physical delivery of the Bonds will be made to the
beneficial owners thereof. For so long as the book-entry only system is maintained, the principal of and interest on the Bonds will be paid from the
sources described herein by Regions Bank, an Alabama state banking corporation, as trustee (the “Trustee”), to DTC as the registered owner thereof. See
“BOOK-ENTRY ONLY SYSTEM.”
The Bonds are being issued by the City pursuant to the Public Improvement District Assessment Act, Subchapter A of Chapter 372, Texas Local
Government Code, as amended (the “PID Act”), an ordinance expected to be adopted by the City Council of the City (the “City Council”), and an
Indenture of Trust between the City and the Trustee (the “Indenture”). Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
Proceeds of the Bonds will be used to provide funds for (i) paying a portion of the Improvement Area #1 Project Costs, (ii) paying a portion of the
interest on the Bonds during and after the period of acquisition and construction of the Improvement Area #1 Projects, (iii) funding a reserve fund for the
payment of principal of and interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and (v) paying the costs
of issuance of the Bonds. See “THE IMPROVEMENT AREA #1 PROJECTS” and “APPENDIX B – Form of Indenture.”
The Bonds, when issued and delivered, will constitute valid and binding special, limited obligations of the City secured by a first lien on, security
interest in, and pledge of the Trust Estate, consisting primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1
Assessed Property in Improvement Area #1 of the District in accordance with the Service and Assessment Plan, and other assets comprising the Trust
Estate, all to the extent and upon the conditions described in the Indenture. The Bonds are not payable from funds raised or to be raised from taxation.
See “SECURITY FOR THE BONDS.”
The Bonds are subject to redemption at the times, in the amounts, and at the redemption prices more fully described under the subcaption
“DESCRIPTION OF THE BONDS – Redemption Provisions.”
The Bonds involve a significant degree of risk, are speculative in nature, and are not suitable for all investors. See “BONDHOLDERS’
RISKS” and “SUITABILITY FOR INVESTMENT.” The Underwriter is limiting this offering to Qualified Institutional Buyers and Accredited
Investors. The limitation of the initial offering to Qualified Institutional Buyers and Accredited Investors does not denote restrictions on
transfers in any secondary market for the Bonds. Prospective purchasers should carefully evaluate the risks and merits of an investment in the
Bonds, should consult with their legal and financial advisors before considering a purchase of the Bonds, and should be willing to bear the risks
of loss of their investment in the Bonds. The Bonds are not credit enhanced or rated and no application has been made for a rating on the
Bonds.
THE BONDS ARE SPECIAL AND LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM PLEDGED REVENUES AND
OTHER ASSETS COMPRISING THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. THE BONDS DO NOT
GIVE RISE TO A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWER OF THE CITY AND ARE PAYABLE SOLELY FROM
THE SOURCES IDENTIFIED IN THE INDENTURE. THE OWNERS OF THE BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND
PAYMENT THEREOF OUT OF MONEY RAISED OR TO BE RAISED BY TAXATION, OR OUT OF ANY FUNDS OF THE CITY OTHER THAN
THE TRUST ESTATE, AS AND TO THE EXTENT PROVIDED IN THE INDENTURE. NO OWNER OF THE BONDS SHALL HAVE THE
RIGHT TO DEMAND ANY EXERCISE OF THE CITY’S TAXING POWER TO PAY THE PRINCIPAL OF THE BONDS OR THE INTEREST OR
REDEMPTION PREMIUM, IF ANY, THEREON. THE CITY SHALL HAVE NO LEGAL OR MORAL OBLIGATION TO PAY THE BONDS OUT
OF ANY FUNDS OF THE CITY OTHER THAN THE PLEDGED REVENUES AND OTHER ASSETS COMPRISING THE TRUST ESTATE. SEE
“SECURITY FOR THE BONDS.”
This cover page contains certain information for quick reference only. It is not a summary of the Bonds. Investors must read this entire Limited
Offering Memorandum to obtain information essential to the making of an informed investment decision.
The Bonds are offered for delivery when, as, and if issued by the City and accepted by FMSbonds, Inc. (the “Underwriter”), subject to, among
other things, the approval of the Bonds by the Attorney General of Texas and the receipt of the opinion of McCall, Parkhurst & Horton L.L.P., Bond
Counsel, as to the validity of the Bonds and the excludability of interest thereon from gross income for federal income tax purposes. See “APPENDIX D
– Form of Opinion of Bond Counsel.” Certain legal matters will be passed upon for the City by its counsel, Wolfe, Tidwell & McCoy, LLP, for the
Underwriter by its counsel, Orrick, Herrington & Sutcliffe LLP, and for the Developer by its counsel, Locke Lord LLP. It is expected that the Bonds will
be delivered in book-entry form through the facilities of DTC on or about July 31, 2024 (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.
EXHIBIT A
i
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS, AND CUSIP NUMBERS
CUSIP Prefix: (a)
$12,387,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA 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)
Pete Cain Mayor 2027
Kevin Toten Place 1 2027
Jody Bills Place 2 2025
Stan Carver II Place 3, Mayor Pro Tem 2026
Kelly Herndon Place 4 2025
Elden Baker Place 5, Deputy Mayor Pro Tem 2026
Lee Miller Place 6 2025
CITY MANAGER FINANCE DIRECTOR CITY SECRETARY
Ryan Henderson Aimee Rae Ferguson Carrie Land
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
City Manager Hilltop Securities Inc. Hilltop Securities Inc.
City of Anna, Texas 717 N. Harwood Street 717 N. Harwood Street
120 W. 7th Street Suite 3400 Suite 3400
Anna, Texas 75409 Dallas, Texas 75201 Dallas, Texas 75201
(972) 924-3325 (214) 953-4000 (214) 953-4000
rhenderson@annatexas.gov Jim.Sabonis@hilltopsecurities.com Andre.Ayala@hilltopsecurities.com
iii
REGIONAL LOCATION MAP OF THE DISTRICT
iv
AREA LOCATION MAP OF THE DISTRICT
v
MAP SHOWING BOUNDARIES OF THE DISTRICT,
IMPROVEMENT AREA #1, AND THE REMAINDER AREA
vi
CONCEPT PLAN
vii
USE OF LIMITED OFFERING MEMORANDUM
FOR PURPOSES OF COMPLIANCE WITH RULE 15C2-12 OF THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION AS AMENDED AND IN EFFECT ON THE DATE OF THIS PRELIMINARY LIMITED
OFFERING MEMORANDUM (THE “RULE” OR “RULE 15C2-12”), THIS DOCUMENT CONSTITUTES AN
“OFFICIAL STATEMENT” OF THE CITY WITH RESPECT TO THE BONDS THAT HAS BEEN “DEEMED
FINAL” BY THE CITY AS OF ITS DATE EXCEPT FOR THE OMISSION OF NO MORE THAN THE
INFORMATION PERMITTED BY RULE 15C2-12.
NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR
THE UNDERWRITER TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER
THAN THOSE CONTAINED IN THIS LIMITED OFFERING MEMORANDUM, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY EITHER OF THE FOREGOING. THIS LIMITED OFFERING MEMORANDUM
DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY AND
THERE SHALL BE NO OFFER, SOLICITATION OR SALE OF THE BONDS BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER,
SOLICITATION OR SALE.
THE INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO THIS
LIMITED OFFERING MEMORANDUM ARE BEING OFFERED AND SOLD ONLY TO “ACCREDITED
INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF 1933”), AND “QUALIFIED INSTITUTIONAL
BUYERS” AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT OF 1933. SEE
“LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.” EACH PROSPECTIVE INITIAL PURCHASER
IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN INVESTMENT IN THE BONDS,
MUST BE ABLE TO BEAR THE ECONOMIC AND FINANCIAL RISK OF SUCH INVESTMENT IN THE
BONDS, AND MUST BE ABLE TO AFFORD A COMPLETE LOSS OF SUCH INVESTMENT. CERTAIN
RISKS ASSOCIATED WITH THE PURCHASE OF THE BONDS ARE SET FORTH UNDER
“BONDHOLDERS’ RISKS.” EACH INITIAL PURCHASER, BY ACCEPTING THE BONDS, AGREES THAT
IT WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND REPRESENTATIONS
DESCRIBED UNDER THE HEADING “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS.”
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS LIMITED OFFERING
MEMORANDUM IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS
UNDER THE UNITED STATES FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND
CIRCUMSTANCES OF THIS TRANSACTION. THE INFORMATION SET FORTH HEREIN HAS BEEN
FURNISHED BY THE CITY AND OBTAINED FROM SOURCES, INCLUDING THE DEVELOPER, WHICH
ARE BELIEVED BY THE CITY AND THE UNDERWRITER TO BE RELIABLE, BUT IT IS NOT
GUARANTEED AS TO ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A
REPRESENTATION OF THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION
HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS
LIMITED OFFERING MEMORANDUM, NOR ANY SALE MADE HEREUNDER, SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CITY OR THE DEVELOPER SINCE THE DATE HEREOF.
NEITHER THE CITY NOR THE UNDERWRITER MAKE ANY REPRESENTATION AS TO THE
ACCURACY, COMPLETENESS, OR ADEQUACY OF THE INFORMATION SUPPLIED BY THE
DEPOSITORY TRUST COMPANY FOR USE IN THIS LIMITED OFFERING MEMORANDUM.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR HAS THE
INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON
EXEMPTIONS CONTAINED IN SUCH LAWS. THE REGISTRATION OR QUALIFICATION OF THE
BONDS UNDER THE SECURITIES LAWS OF ANY JURISDICTION IN WHICH THEY MAY HAVE BEEN
REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDED AS A RECOMMENDATION
THEREOF. NONE OF SUCH JURISDICTIONS, OR ANY OF THEIR AGENCIES, HAVE PASSED UPON THE
viii
MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS LIMITED OFFERING
MEMORANDUM.
CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN THIS LIMITED
OFFERING MEMORANDUM CONSTITUTE “FORWARD-LOOKING STATEMENTS” WITHIN THE
MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,
SECTION 21E OF THE UNITED STATES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 27A
OF THE SECURITIES ACT OF 1933. SUCH STATEMENTS ARE GENERALLY IDENTIFIABLE BY THE
TERMINOLOGY USED, SUCH AS “PLAN,” “EXPECT,” “ESTIMATE,” “PROJECT,” “ANTICIPATE,”
“BUDGET” OR OTHER SIMILAR WORDS. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER
EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. NEITHER THE CITY NOR THE DEVELOPER PLAN TO ISSUE
ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF
THEIR EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH
STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING
DISCLOSURE – THE CITY” AND “– THE DEVELOPER,” RESPECTIVELY.
THE TRUSTEE HAS NOT PARTICIPATED IN THE PREPARATION OF THIS LIMITED OFFERING
MEMORANDUM AND ASSUMES NO RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF
ANY INFORMATION CONTAINED IN THIS LIMITED OFFERING MEMORANDUM OR THE RELATED
TRANSACTIONS AND DOCUMENTS OR FOR ANY FAILURE BY ANY PARTY TO DISCLOSE EVENTS
THAT MAY HAVE OCCURRED AND MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH
INFORMATION.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
REFERENCES TO WEBSITE ADDRESSES PRESENTED HEREIN ARE FOR INFORMATIONAL PURPOSES
ONLY AND MAY BE IN THE FORM OF A HYPERLINK SOLELY FOR THE READER’S CONVENIENCE.
UNLESS SPECIFIED OTHERWISE, SUCH WEBSITES AND THE INFORMATION OR LINKS CONTAINED
THEREIN ARE NOT INCORPORATED INTO, AND ARE NOT PART OF, THIS LIMITED OFFERING
MEMORANDUM FOR PURPOSES OF, AND AS THAT TERM IS DEFINED IN, THE RULE.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
ix
TABLE OF CONTENTS
INTRODUCTION .................................................... 2
PLAN OF FINANCE ............................................... 3
Overview ........................................................... 3
Development Plan ............................................. 3
Lot Purchase Contract; Developer as
Homebuilder ............................................... 3
The Bonds.......................................................... 4
LIMITATIONS APPLICABLE TO INITIAL
PURCHASERS ........................................................ 4
DESCRIPTION OF THE BONDS ........................... 5
General Description ........................................... 5
Redemption Provisions ...................................... 6
BOOK-ENTRY ONLY SYSTEM ........................... 8
SECURITY FOR THE BONDS ............................. 10
General ............................................................ 10
Pledged Revenues ............................................ 11
Collection and Deposit of Improvement
Area #1 Assessments ................................ 13
Unconditional Levy of Improvement
Area #1 Assessments ................................ 13
Perfected Security Interest ............................... 14
Pledged Revenue Fund .................................... 14
Bond Fund ....................................................... 15
Project Fund .................................................... 16
Reserve Fund (Reserve Account and
Delinquency and Prepayment
Reserve Account) ..................................... 17
Administrative Fund ........................................ 18
Defeasance....................................................... 19
Events of Default ............................................. 19
Remedies in Event of Default .......................... 20
Restriction on Owner’s Actions ...................... 21
Application of Revenues and Other
Moneys After Event of Default ................ 21
Investment or Deposit of Funds ....................... 22
Against Encumbrances .................................... 22
Other Obligations or Other Liens;
Refunding Bonds ...................................... 22
SOURCES AND USES OF FUNDS* .................... 24
DEBT SERVICE REQUIREMENTS* ................... 25
OVERLAPPING TAXES AND DEBT .................. 26
Homeowners’ Association Dues ..................... 27
ASSESSMENT PROCEDURES ............................ 28
General ............................................................ 28
Improvement Area #1 Assessment
Methodology ............................................ 28
Collection and Enforcement of
Improvement Area #1 Assessment
Amounts ................................................... 29
Improvement Area #1 Assessment
Amounts ................................................... 31
Prepayment of Improvement Area #1
Assessments ............................................. 33
Priority of Lien ................................................ 33
Foreclosure Proceedings .................................. 33
THE CITY .............................................................. 34
Background ..................................................... 34
City Government ............................................. 34
Water and Wastewater ..................................... 35
THE DISTRICT ..................................................... 36
General ............................................................ 36
Powers and Authority ...................................... 36
THE IMPROVEMENT AREA #1 PROJECTS ..... 36
General ............................................................ 36
Ownership and Maintenance of
Improvement Area #1 Projects ................. 37
THE DEVELOPMENT .......................................... 37
Development Plan ........................................... 37
Lot Purchase Contract; Developer as
Homebuilder ............................................. 38
Expected Lot Completion and Home
Prices in the Development ........................ 39
Amenities and Private Improvements .............. 40
Future Improvement Area Bonds .................... 40
Development Agreement ................................. 40
CFA Agreement .............................................. 41
Photographs of Improvement Area #1 ............. 42
Zoning/Permitting ........................................... 44
Education ......................................................... 44
Environmental ................................................. 45
Existing Mineral and Groundwater
Rights, Easements and Other
Third-Party Property Rights ..................... 45
Flood Zone ...................................................... 45
Utilities ............................................................ 45
THE DEVELOPER ................................................ 46
General ............................................................ 46
Description of the Developer ........................... 46
Biographies of Key Developer Parties ............ 47
History and Financing of the District .............. 47
THE ADMINISTRATOR ...................................... 48
APPRAISAL .......................................................... 49
BONDHOLDERS’ RISKS ..................................... 49
General ............................................................ 49
Deemed Representations and
Acknowledgment by Investors ................. 50
Infectious Disease Outbreak ............................ 50
Failure or Inability to Complete
Proposed Development............................. 51
Completion of the Improvement Area
#1 Projects ................................................ 51
Completion of Homes...................................... 51
Absorption Rates ............................................. 51
Assessment Limitations ................................... 52
Bankruptcy ...................................................... 53
Direct and Overlapping Indebtedness,
Assessments and Taxes ............................ 53
x
Depletion of Reserve Fund; No
Prefunding of Delinquency and
Prepayment Reserve Account................... 53
Hazardous Substances ..................................... 54
Regulation ....................................................... 54
Recent Changes in State Law Regarding
Public Improvement Districts ................... 54
Potential Future Changes in State Law
Regarding Public Improvement
Districts .................................................... 55
Flood Plain and Severe Weather Events .......... 55
Exercise of Third-Party Property Rights ......... 55
Bondholders’ Remedies and
Bankruptcy ............................................... 55
Judicial Foreclosures ....................................... 57
No Acceleration ............................................... 57
Limited Secondary Market for the
Bonds........................................................ 57
No Credit Rating ............................................. 57
Use of Appraisal .............................................. 58
Bankruptcy Limitation to Bondholders’
Rights ....................................................... 58
Management and Ownership ........................... 58
Tax-Exempt Status of the Bonds ..................... 58
General Risks of Real Estate Investment
and Development ...................................... 59
Risks Related to the Current Residential
Real Estate Market ................................... 60
Risks Related to Recent Increase in
Costs of Building Materials ...................... 60
Adverse Developments Affecting the
Financial Services Industry ...................... 60
Competition ..................................................... 61
Availability of Utilities .................................... 61
Dependence Upon Developer .......................... 61
TAX MATTERS .................................................... 62
Opinion ............................................................ 62
Federal Income Tax Accounting
Treatment of Original Issue
Discount ................................................... 62
Collateral Federal Income Tax
Consequences ........................................... 63
State, Local And Foreign Taxes ...................... 64
Information Reporting and Backup
Withholding .............................................. 64
Future and Proposed Legislation ..................... 64
LEGAL MATTERS ............................................... 64
Legal Proceedings ........................................... 64
Legal Opinions ................................................ 64
Litigation – The City ....................................... 65
Litigation – The Developer.............................. 65
SUITABILITY FOR INVESTMENT .................... 66
ENFORCEABILITY OF REMEDIES ................... 66
NO RATING .......................................................... 66
CONTINUING DISCLOSURE .............................. 66
The City ........................................................... 66
The City’s Compliance with Prior
Undertakings ............................................ 67
The Developer ................................................. 67
The Developer’s Compliance with Prior
Undertakings ............................................ 67
UNDERWRITING ................................................. 67
REGISTRATION AND QUALIFICATION OF
BONDS FOR SALE ............................................... 67
LEGAL INVESTMENT AND ELIGIBILITY TO
SECURE PUBLIC FUNDS IN TEXAS ................. 68
INVESTMENTS .................................................... 68
INFORMATION RELATING TO THE TRUSTEE
................................................................................ 70
SOURCES OF INFORMATION ........................... 71
General ............................................................ 71
Source of Certain Information ......................... 71
Experts ............................................................. 71
Updating of Limited Offering
Memorandum ........................................... 71
FORWARD-LOOKING STATEMENTS .............. 72
AUTHORIZATION AND APPROVAL ................ 72
APPENDIX A General Information Regarding the
City and Surrounding Areas
APPENDIX B Form of Indenture
APPENDIX C Form of Service and Assessment
Plan
APPENDIX D Form of Opinion of Bond Counsel
APPENDIX E-1 Form of Disclosure Agreement of
Issuer
APPENDIX E-2 Form of Disclosure Agreement of
Developer
APPENDIX F Development Agreement
APPENDIX G Form of CFA Agreement
APPENDIX H Appraisal
THIS PAGE IS LEFT BLANK INTENTIONALLY.
2
PRELIMINARY LIMITED OFFERING MEMORANDUM
$12,387,000*
CITY OF ANNA, TEXAS,
(a municipal corporation of the State of Texas located in Collin County)
SPECIAL ASSESSMENT REVENUE BONDS, SERIES 2024
(MEADOW VISTA 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 $12,387,000* aggregate principal amount of Special Assessment Revenue Bonds, Series 2024
(Meadow Vista Public Improvement District Improvement Area #1 Project) (the “Bonds”).
INITIAL PURCHASERS ARE ADVISED THAT THE BONDS BEING OFFERED PURSUANT TO
THIS LIMITED OFFERING MEMORANDUM ARE BEING OFFERED INITIALLY TO AND ARE BEING
SOLD ONLY TO “ACCREDITED INVESTORS” AS DEFINED IN RULE 501 OF REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT OF
1933”) AND “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A PROMULGATED
UNDER THE SECURITIES ACT OF 1933. THE LIMITATION OF THE INITIAL OFFERING TO QUALIFIED
INSTITUTIONAL BUYERS AND ACCREDITED INVESTORS DOES NOT DENOTE RESTRICTIONS ON
TRANSFERS IN ANY SECONDARY MARKET FOR THE BONDS. PROSPECTIVE INVESTORS SHOULD
BE AWARE OF CERTAIN RISK FACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT
DEGREE, COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND/OR
INTEREST ON THE BONDS. THE BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS.
SEE “LIMITATIONS APPLICABLE TO INITIAL PURCHASERS,” “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 first lien on, security interest in, and pledge of the Trust Estate, consisting
primarily of revenue from Improvement Area #1 Assessments levied against Improvement Area #1 Assessed
Property located within Improvement Area #1 of the District pursuant to 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), the CFA Agreement, and the Appraisal (defined herein), together with summaries of terms of the
Bonds and the Indenture and certain provisions of the PID Act. All references herein to such documents and the
PID Act are qualified in their entirety by reference to such documents or such PID Act and all references to the
Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in
the Indenture. Copies of these documents may be obtained during the period of the offering of the Bonds from the
Underwriter, FMSbonds, Inc., 5 Cowboys Way, Suite 300-25, Frisco, Texas, 75034, Phone: (214) 302-2246. The
Form of Indenture appears in APPENDIX B and the Form of Service and Assessment Plan appears in APPENDIX
C. The information provided under this caption “INTRODUCTION” is intended to provide a brief overview of the
information provided in the other captions herein and is not intended, and should not be considered, fully
representative or complete as to the subjects discussed hereunder.
* Preliminary, subject to change.
3
PLAN OF FINANCE
Overview
Following receipt of a petition from the Developer in accordance with the PID Act, the City created the
District on September 26, 2023. The District is composed of approximately 223.154 acres within the corporate
boundaries of the City. It is located east of Highway 75 north and north of Hackberry Drive. Maps of the District
and the surrounding region are included on pages iii – vi.
Development Plan
The District is an approximately 223.154-acre master-planned community expected to be constructed in
three phases (each, an “Improvement Area”) and to include approximately 764 single-family detached residential
lots, two acres of land designated as mixed use (which is expected to be developed for commercial use), and the
amenities described in “THE DEVELOPMENT – Amenities” (collectively, the “Development”). See the map and
concept plans for the District on pages v-vi.
The land within the District is currently owned by Bloomfield Homes, L.P. (the “Developer”).
Improvement Area #1 is the first area of the District to be developed by the Developer. Improvement Area #1
consists of approximately 71.042 acres and is expected to include 275 single-family detached residential lots,
consisting of 190 50’ lots and 85 60’ lots. The Developer began development of Improvement Area #1 in Q4 2023
and expects it to be completed in Q2 2025. See “THE IMPROVEMENT AREA #1 PROJECTS,” “THE
DEVELOPMENT – Expected Build-Out and Home Prices in the Development,” and “APPENDIX C – Form of
Service and Assessment Plan.”
A portion of the proceeds of the Bonds will be used to reimburse the Developer for the Actual Costs of the
Improvement Area #1 Projects, consisting of public improvements that benefit only the Improvement Area #1
Assessed Property in Improvement Area #1. The total cost of the Improvement Area #1 Projects is expected to be
approximately $10,876,627. The City will reimburse the Developer for a portion of such costs in the approximate
amount of $9,440,000* from proceeds of the Bonds. The balance of such costs in the approximate amount of
$1,436,627* have been funded by the Developer from proceeds of the Revolving Credit Agreement (defined herein)
and will not be reimbursed by the City. In addition, the Developer is responsible for paying, without reimbursement
by the City, for certain costs allocable to Non-Assessed Property (consisting of excavation, retaining walls, and soft
costs) in the approximate amount of $6,841,178* (the “Private Improvements”). As of May 29, 2024, the Developer
has spent approximately $1,964,618.63 on construction of the Improvement Area #1 Projects and $1,035,336.51 on
construction of the Private Improvements. See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT
AREA #1 PROJECTS,” “THE DEVELOPER – History and Financing of the District,” and “APPENDIX C – Form
of Service and Assessment Plan.”
The City and the Developer expect to enter into the CFA Agreement, which provides, in part, for the
deposit of proceeds from the issuance and sale of the Bonds and the payment of costs of the Improvement Area #1
Projects within the District, including payment to the Developer for funds expended by the Developer and used to
pay costs of Improvement Area #1 Projects. See “APPENDIX G – Form of CFA Agreement.”
The Developer expects to request the City to issue in the future one or more series of bonds (collectively,
the “Future Improvement Area Bonds”) to finance the costs of the public improvements benefitting future
improvement areas (identified as the “Remainder Area” in the map on page v). The estimated costs of the public
improvements benefitting such improvement areas will be determined as development progresses, and the Service
and Assessment Plan will be updated accordingly. Such Future Improvement Area Bonds will be secured by
separate assessments levied pursuant to the PID Act on assessable property within the portion of the Remainder
Area benefitted thereby. The Developer anticipates that Future Improvement Area Bonds will be issued over a five-
year period. See “THE DEVELOPMENT – Future Improvement Area Bonds.”
Lot Purchase Contract; Developer as Homebuilder
4
Improvement Area #1 is expected to include 275 single-family detached residential lots, comprised of 190
50’ lots and 85 60’ lots. The Developer has entered into a contract for purchase and sale (the “Lot Purchase
Contract”) with DFH Coventry, LLC, a Florida limited liability company (the “Homebuilder”), for the purchase of
72 of the 50’ lots within Improvement Area #1. The Developer intends to construct homes on the remaining 203
lots in Improvement Area #1, consisting of 118 50’ lots and all 85 60’ lots. See “THE DEVELOPMENT – Lot
Purchase Contract; Developer as Homebuilder.”
The Bonds
Proceeds of the Bonds will be used to provide funds for (i) paying a portion of the Improvement Area #1
Project Costs, (ii) paying a portion of the interest on the Bonds during and after the period of acquisition and
construction of the Improvement Area #1 Projects, (iii) funding a reserve fund for the payment of principal of and
interest on the Bonds, (iv) paying a portion of the costs incidental to the organization of the District, and (v) paying
the costs of issuance of the Bonds. 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
“SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 PROJECTS,” and “APPENDIX B –
Form of Indenture.”
Payment of the Bonds is secured by a first lien on, security interest in, and pledge of the Trust Estate,
consisting primarily of Pledged Revenues derived from Improvement Area #1 Assessments to be levied against the
Improvement Area #1 Assessed Property within Improvement 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, 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. The limitation of the initial offering to qualified institutional buyers
and accredited investors does not denote restrictions on transfers in any secondary market for the Bonds. Each
initial purchaser of the Bonds (each, an “Investor”) will be deemed to have acknowledged, represented, and
warranted to the City as follows:
1. The Investor has authority and is duly authorized to purchase the Bonds and to execute any
instruments and documents required to be executed by the Investor in connection with the purchase of the Bonds.
2. The Investor is an “accredited investor” under Rule 501 of Regulation D of the Securities Act of
1933 or a “qualified institutional buyer” under Rule 144A of the Securities Act of 1933, and therefore has sufficient
knowledge and experience in financial and business matters, including purchase and ownership of municipal and
other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the Bonds.
3. The Bonds are being acquired by the Investor for investment and not with a view to, or for resale
in connection with, any distribution of the Bonds, and the Investor intends to hold the Bonds solely for its own
account for investment purposes for an indefinite period of time and does not intend at this time to dispose of all or
5
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 Projects, the Bonds, the security therefor, and such other information as the Investor has deemed necessary or
desirable in connection with its decision to purchase the Bonds (collectively, the “Investor Information”). The
Investor has received a copy of this Limited Offering Memorandum relating to the Bonds. The Investor
acknowledges that it has assumed responsibility for its review of the Investor Information, and it has not relied upon
any advice, counsel, representation, or information from the City in connection with the Investor’s purchase of the
Bonds. The Investor agrees that none of the City, its councilmembers, officers, or employees shall have any liability
to the Investor whatsoever for or in connection with the Investor’s decision to purchase the Bonds except for gross
negligence, fraud, or willful misconduct. For the avoidance of doubt, it is acknowledged that the Underwriter is not
deemed an officer or employee of the City.
6. The Investor acknowledges that the obligations of the City under the Indenture are special, limited
obligations payable solely from amounts paid by the City to the Trustee pursuant to the terms of the Indenture and
the City shall not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of
the City for amounts due under the Indenture. The Investor understands that the Bonds are not secured by any
pledge of any moneys received or to be received from taxation by the City, the State, or any political subdivision or
taxing district thereof; that the Bonds will never represent or constitute a general obligation or a pledge of the full
faith and credit of the City, the State, or any political subdivision thereof; that no right will exist to have taxes levied
by the City, the State, or any political subdivision thereof for the payment of principal of and interest on the Bonds;
and that the liability of the City and the State with respect to the Bonds is subject to further limitations as set forth in
the Bonds and the Indenture.
7. The Investor has made its own inquiry and analysis with respect to the Bonds and the security
therefor. The Investor is aware that the development of the District involves certain economic and regulatory
variables and risks that could adversely affect the security for the Bonds.
8. The Investor acknowledges that the sale of the Bonds to the Investor is made in reliance upon the
certifications, representations, and warranties described in items 1-7 above.
DESCRIPTION OF THE BONDS
General Description
The Bonds will mature on the dates and on 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, 2025 (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”). The
City prohibits any Bond to be issued in a denomination of less than $100,000 and further prohibits the assignment of
a CUSIP number to any Bond with a denomination of less than $100,000, and any attempt to accomplish either of
the foregoing shall be void and of no effect. Upon initial issuance, the ownership of the Bonds will be registered in
the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), and
6
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 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 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
Improvement Area #1 Assessments” for the definition and description of Prepayments and “APPENDIX B – Form
of Indenture.”
Mandatory Sinking Fund Redemption. The Bonds maturing on September 15 in the years 20 , 20 , and
20_ (the “Term Bonds”) are subject to mandatory sinking fund redemption prior to their respective maturities and
will be redeemed by the City in part at the Redemption Price from moneys available for such purpose in the
Principal and Interest Account of the Bond Fund pursuant to the Indenture, on the dates and in the respective
Sinking Fund Installments as set forth in the following schedules:
$ Term Bonds Maturing September 15, 20
Redemption Date Sinking Fund Installment Amount
September 15, 20__ $
September 15, 20__
September 15, 20 __
September 15, 20__
September 15, 20__†
$ Term Bonds Maturing September 15, 20
Redemption Date Sinking Fund Installment Amount
September 15, 20__ $
September 15, 20__
September 15, 20____
September 15, 20__
September 15, 20__
September 15, 20 __
September 15, 20__
September 15, 20__
September 15, 20 †
__________________________
† Stated maturity.
At least thirty (30) days prior to each mandatory sinking fund redemption date, and subject to any prior
reduction authorized by the Indenture, the Trustee will select by lot, or any by any other customary method that
results in random selection, a principal amount of Bonds of such maturity equal to the Sinking Fund Installment
amount of such Bonds to be redeemed, shall call such Bonds for redemption on such scheduled mandatory sinking
7
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.
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.
8
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.
BOOK-ENTRY ONLY SYSTEM
This section describes how ownership of the Bonds is to be transferred and how the principal of, premium,
if any, and interest on the Bonds are to be paid to and credited by DTC while the Bonds are registered in its
nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided
by DTC for use in disclosure documents such as this Limited Offering Memorandum. The information in this
section concerning DTC and DTC’s book-entry-only system has been obtained from sources that the City believes to
be reliable, but none of the City, the City’s 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
9
ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is
discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts
such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of
significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the
Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the
Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
Redemption notices for the Bonds shall be sent to DTC. If less than all Bonds of the same maturity are
being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant of such
maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds
unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures,
DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal, interest, and all other payments on the Bonds will be made to Cede & Co., or such other nominee
as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’
accounts upon DTC’s receipt of funds and corresponding detail information from the City or Paying
Agent/Registrar, on the payable date in accordance with their respective holdings shown on DTC’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and
will be the responsibility of such Participant and not of DTC nor its nominee, the Trustee, the Paying
Agent/Registrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to
time. Payment of principal, interest, and all other payments to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the responsibility of the Trustee, the Paying Agent/Registrar or
the City, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
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.
10
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
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. SEE “APPENDIX B –
FORM OF INDENTURE.”
The principal of, premium, if any, and interest on the Bonds are secured by a first lien on, security interest
in, and pledge of the Trust Estate, consisting primarily of Assessment Revenues levied against Improvement Area
#1 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 Improvement Area #1 Assessments), and expected to
adopt a final Service and Assessment Plan in connection with the authorization of the issuance of the Bonds. The
Service and Assessment Plan describes the special benefit received by the property within the District, including
11
Improvement Area #1, provides the basis and justification for the determination of special benefit on such property,
establishes the methodology for the levy of Improvement Area #1 Assessments, and provides for the allocation of
Pledged Revenues for payment of principal of, premium, if any, and interest on the Bonds. The Service and
Assessment Plan is reviewed and updated annually for the purpose of determining the annual budget for
improvements and the Improvement Area #1 Annual Installments of Improvement Area #1 Assessments due in a
given year. The determination by the City of the assessment methodology set forth in the Service and Assessment
Plan is the result of the discretionary exercise by the City Council of its legislative authority and governmental
powers and is conclusive and binding on all current and future landowners within the District, including
Improvement Area #1. See “APPENDIX C – Form of Service and Assessment Plan.”
Pledged Revenues
The City is authorized by the PID Act, the Assessment Ordinance, and other provisions of law to finance
the Improvement Area #1 Projects by levying Improvement Area #1 Assessments upon properties in Improvement
Area #1 of the District benefitted thereby. For a description of the assessment methodology and the amounts of
Improvement Area #1 Assessments levied in Improvement Area #1 of the District, see “ASSESSMENT
PROCEDURES” and “APPENDIX C – Form of Service and Assessment Plan.”
Pursuant to the Indenture:
“Additional Interest” means the amount collected by the application of the Additional Interest Rate.
“Additional Interest Rate” means the 0.50% additional interest charged on the Improvement Area #1
Assessments pursuant to Section 372.018 of the PID Act.
“Annual Collection Costs” mean the actual or budgeted costs and expenses related to the creation and
operation of the District, the issuance and sale of the Bonds, and the construction, operation, and maintenance of
including the Improvement Area #1 Projects, 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 Improvement Area #1
Assessments and Improvement Area #1 Annual Installments, including the costs of foreclosure; (4) preparing and
maintaining records with respect to Improvement Area #1 Assessment Roll and Annual Service Plan Updates; (5)
issuing, paying, and redeeming the Bonds; (6) investing or depositing Improvement Area #1 Assessments and
Improvement Area #1 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 Service Plan Update” means an update to the Service and Assessment Plan prepared no less
frequently than annually by the Administrator and approved by the City Council.
“Assessment Revenues” means the revenues received by the City from the collection of Improvement Area
#1 Assessments, including Prepayments, Improvement Area #1 Annual Installments, and Foreclosure Proceeds.
“Delinquent Collection Costs” means costs related to the foreclosure on Improvement Area #1 Assessed
Property and the costs of collection of delinquent Improvement Area #1 Assessments, delinquent Improvement Area
#1 Annual Installments, or any other delinquent amounts due under the Service and Assessment Plan, including
penalties and reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty
interest.
“Foreclosure Proceeds” means the proceeds, including interest and penalty interest, received by the City
from the enforcement of the Improvement Area #1 Assessments against any Improvement Area #1 Assessed
Property, whether by foreclosure of lien or otherwise, but excluding and net of all Delinquent Collection Costs.
12
“Improvement Area #1 Annual Installment” means, with respect to each Parcel of Improvement Area #1
Assessed Property, each annual payment of (i) the principal of and interest on the Improvement Area #1
Assessments as shown on the Improvement Area #1 Assessment Roll or in an Annual Service Plan Update, as
shown in Exhibit F-2 to the Service and Assessment Plan, and calculated as provided in Section VI of the Service
and Assessment Plan, (ii) Annual Collection Costs, and (iii) the Additional Interest.
“Improvement Area #1 Assessed Property” means the property located in Improvement Area #1 that
benefits from the Improvement Area #1 Projects.
“Improvement Area #1 Assessment Roll” means the “Improvement Area #1 Assessment Roll” attached to
the Service and Assessment Plan as Exhibit F-1, as updated, modified, or amended from time to time.
“Improvement Area #1 Assessments” means an assessment levied against Improvement Area #1 Assessed
Property based on the special benefit conferred on such Improvement Area #1 Assessed Property by the
Improvement Area #1 Projects.
“Pledged Funds” means, collectively, the Pledged Revenue Fund, the Bond Fund, the Project Fund, the
Reserve Fund, and the Redemption Fund.
“Pledged Revenues” mean, collectively, the (i) Assessment Revenues (excluding the portion of the
Improvement Area #1 Assessments and Improvement Area #1 Annual Installments collected for the payment of
Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan), (ii) the
moneys held in any of the Pledged Funds, and (iii) any additional revenues that the City may pledge to the payment
of the Bonds.
“Prepayment” means the payment of all or a portion of an Improvement Area #1 Assessment before the due
date thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or
penalties on a delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment,
but rather are to be treated as the payment of the regularly scheduled Improvement Area #1 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 Improvement Area #1 Assessments levied on the
Improvement Area #1 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 Improvement Area #1 Assessments to be collected and the liens thereof to be enforced
continuously. See “SECURITY FOR THE BONDS – Pledged Revenue Fund,” “APPENDIX B – Form of
Indenture,” and “APPENDIX C – Form of Service and Assessment Plan.”
The PID Act provides that the Improvement Area #1 Assessments (including any reassessment, with
interest, the expense of collection and reasonable attorney’s fees, if incurred) are a first and prior lien (the
“Assessment Lien”) against the Improvement Area #1 Assessed Property, superior to all other liens and claims,
except liens or claims for State, county, school district, or municipality ad valorem taxes and are a personal liability
of and charge against the owners of property, regardless of whether the owners are named. Pursuant to the PID Act,
the Assessment Lien is effective from the date of the Assessment Ordinance until the Improvement Area #1
Assessments are paid (or otherwise discharged), and is enforceable by the City Council in the same manner that an
ad valorem property tax levied against real property may be enforced by the City Council. See “ASSESSMENT
PROCEDURES.”
The Assessment Lien is superior to any homestead rights of a property owner that were properly claimed
after the adoption of the Assessment Ordinance. However, an Assessment Lien may not be foreclosed upon if any
homestead rights of a property owner were properly claimed prior to the adoption of the Assessment Ordinance
(“Pre-existing Homestead Rights”) for as long as such rights are maintained on the property. See
“BONDHOLDERS’ RISKS – Assessment Limitations.”
13
Collection and Deposit of Improvement Area #1 Assessments
The Improvement Area #1 Assessments shown on the Improvement Area #1 Assessment Roll, together
with the interest thereon, shall first be applied to the payment of the principal of and interest on the Bonds as and to
the extent provided in the Service and Assessment Plan and the Indenture. In the event the City owes Rebatable
Arbitrage to the United States Government, the Improvement Area #1 Assessments shall first be applied to pay the
full amount of Rebatable Arbitrage owed by the City, prior to any transfers to the Bond Fund.
The Improvement Area #1 Assessments assessed to pay debt service on the Bonds, together with interest
thereon, are payable in Improvement Area #1 Annual Installments established by the Assessment Ordinance and the
Service and Assessment Plan to correspond, as nearly as practicable, to the debt service requirements for the Bonds.
An Improvement Area #1 Annual Installment of an Improvement Area #1 Assessment has been made payable in the
Assessment Ordinance in each fiscal year of the City preceding the date of final maturity of the Bonds which, if
collected, will be sufficient to first pay debt service requirements attributable to Improvement Area #1 Assessments
in the Service and Assessment Plan. Each Improvement Area #1 Annual Installment is payable as provided in the
Service and Assessment Plan and the Assessment Ordinance.
A record of the Improvement Area #1 Assessments on each parcel, tract, or lot which are to be collected in
each year during the term of the Bonds is shown on the Improvement Area #1 Assessment Roll. Sums received from
the collection of the Improvement Area #1 Assessments to pay the debt service requirements (including delinquent
installments, Foreclosure Proceeds, and penalties) and of the interest thereon shall be deposited into the Bond
Pledged Revenue Account of the Pledged Revenue Fund. Promptly after the deposit of Foreclosure Proceeds into
the Pledged Revenue Fund, the Trustee shall transfer such Foreclosure Proceeds first, to the Reserve Fund to restore
any transfers from the Accounts within the Reserve Fund made with respect to the particular Improvement Area #1
Assessed Property to which the Foreclosure Proceeds relate (first, to replenish the Reserve Account Requirement
and second, to replenish the Delinquency and Prepayment Reserve Account Requirement), and second, to the
Redemption Fund. See “SECURITY FOR THE BONDS – Pledged Revenue Fund” and “APPENDIX B – Form of
Indenture.”
The portions of the Improvement Area #1 Annual Installments of Improvement Area #1 Assessments
collected to pay Annual Collection Costs and Delinquent Collection Costs shall be deposited in the Administrative
Fund and shall not constitute Pledged Revenues.
Unconditional Levy of Improvement Area #1 Assessments
The City will impose Improvement Area #1 Assessments on the Improvement Area #1 Assessed Property
to pay the principal of and interest on the Bonds scheduled for payment from Pledged Revenues as described in the
Indenture and in the Service and Assessment Plan and coming due during each Fiscal Year. The Improvement Area
#1 Assessments are effective on the date of, and strictly in accordance with the terms of, the Assessment Ordinance.
Each Improvement Area #1 Assessment may be paid in full or in part at any time, or in periodic Improvement Area
#1 Annual Installments over a period of time equal to the term of the Bonds, which installments shall include
interest on the Improvement Area #1 Assessments. Pursuant to the Assessment Ordinance, interest on the
Improvement Area #1 Assessments for each lot within Improvement Area #1 of the District will begin to accrue on
the date specified in the Service and Assessment Plan 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 Improvement Area #1
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 Improvement Area #1 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 Improvement Area #1 Annual
Installment, including the interest on the unpaid amount of an Improvement Area #1 Assessment, shall be calculated
annually and shall be due on October 1 of each year. Each Improvement Area #1 Annual Installment together with
interest thereon shall be delinquent if not paid prior to February 1 of the following year. The initial Improvement
Area #1 Annual Installments of the Improvement Area #1 Assessments will be due on or about October 1, 2025, and
will be delinquent if not paid prior to February 1, 2026.
14
As authorized by Section 372.018(b) of the PID Act, the City will calculate and collect, each year while the
Bonds are Outstanding and unpaid, a portion of each Improvement Area #1 Annual Installment to pay the annual
costs incurred by the City in the administration and operation of the District. The portion of each Improvement Area
#1 Annual Installment used to pay such annual costs shall remain in effect from year to year until all Bonds are
finally paid or until the City adjusts the amount after an annual review in any year pursuant to Section 372.013 of
the PID Act. The amount collected to pay Annual Collection Costs shall be due in the manner set forth in the
Assessment Ordinance on October 1 of each year and shall be delinquent if not paid by February 1 of the following
year. Amounts collected to pay Annual Collection Costs do not secure repayment of the Bonds.
There is no discount for the early payment of Improvement Area #1 Assessments.
Improvement Area #1 Assessments, together with interest, penalties, and expense of collection and
reasonable attorneys’ fees, as permitted by the Texas Tax Code, shall be a first and prior lien against the
Improvement Area #1 Assessed Property, superior to all other liens and claims, except liens or claims for State,
county, school district, or municipality ad valorem taxes and shall be a personal liability of and charge against the
owner of the Improvement Area #1 Assessed Property regardless of whether the owners are named, and runs with
the land. The lien for Improvement Area #1 Assessments and penalties and interest will begin on the effective date
of the Assessment Ordinance and continue until the Improvement Area #1 Assessments are paid or until all Bonds
are finally paid.
Failure to pay an Improvement Area #1 Annual Installment when due will not accelerate the payment of the
remaining Improvement Area #1 Annual Installments of the Improvement Area #1 Assessments and such remaining
Improvement Area #1 Annual Installments (including interest) shall continue to be due and payable at the same time
and in the same amount and manner as if such default had not occurred.
Perfected Security Interest
The lien on and pledge of the Trust Estate to secure the Bonds shall be valid and binding and fully
perfected from and after the Closing Date, without physical delivery or transfer of control of the Trust Estate, the
filing of the Indenture or any other act; all as provided in Texas Government Code, Chapter 1208, as amended,
which applies to the issuance of the Bonds and the pledge of the Trust Estate granted by the City under the
Indenture, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while
the Bonds are Outstanding such that the pledge of the Trust Estate granted by the City under the Indenture is to be
subject to the filing requirements of Texas Business and Commerce Code, Chapter 9, as amended, then in order to
preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the City agrees
to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Texas Business and Commerce Code, Chapter 9, as amended, and enable a filing to perfect the
security interest in said pledge to occur. See “APPENDIX B – Form of Indenture.”
Pledged Revenue Fund
Periodically upon receipt thereof, the City shall transfer or cause to be transferred, pursuant to a City
Certificate provided to the Trustee for deposit to the Pledged Revenue Fund the Improvement Area #1 Assessments
and Improvement Area #1 Annual Installments, other than the portion of the Improvement Area #1 Assessments and
Improvement Area #1 Annual Installments allocated to the payment of Annual Collection Costs and Delinquent
Collection Costs, which shall be deposited to the Administrative Fund in accordance with the Indenture. Following
such deposit to the Pledged Revenue Fund, the City shall transfer or cause to be transferred pursuant to a City
Certificate provided to the Trustee the following amounts from the Pledged Revenue Fund to the following
Accounts: (i) first, to the Bond Pledged Revenue Account of the Pledged Revenue Fund, an amount sufficient to pay
debt service on the Bonds next coming due, and (ii) second, if necessary, to the Reserve Account of the Reserve
Fund, an amount to cause the amount in the Reserve Account to equal the Reserve Account Requirement.
Notwithstanding the foregoing, the Additional Interest shall only be utilized for the purposes set forth in the
Indenture and, immediately following the initial deposit to the Pledged Revenue Fund, prior to any other transfers or
deposits being made as described in this paragraph, if the Delinquency and Prepayment Reserve Account of the
Reserve Fund does not contain the Delinquency and Prepayment Reserve Requirement and Additional Interest is
collected, then all such Additional Interest will be transferred into the Delinquency and Prepayment Reserve
15
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 Projects, (ii) to pay other costs permitted by the PID Act, or (iii) to deposit such excess
into the Redemption Fund to redeem Bonds as provided in the Indenture. Along with each transfer to the Trustee,
the City shall provide a certificate as to the funds, accounts, and payments into which the amounts are to be
deposited or paid.
From time to time as needed to pay the obligations relating to the Bonds, but no later than five (5) Business
Days before each Interest Payment Date, the Trustee shall withdraw from the Pledged Revenue Fund and transfer to
the Principal and Interest Account of the Bond Fund, an amount, taking into account any amounts then on deposit in
such Principal and Interest Account and any expected transfers from the Capitalized Interest Account to the
Principal and Interest Account, such that the amount on deposit in the Principal and Interest Account equals the
principal (including any Sinking Fund Installments) and interest due on the Bonds on the next Interest Payment
Date.
If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there
are insufficient funds to make the payments provided in the preceding paragraph above, the Trustee shall apply the
available funds in the Principal and Interest Account first to the payment of interest, then to the payment of principal
(including any Sinking Fund Installments) on the Bonds.
The Trustee shall transfer Prepayments to the Redemption Fund to be used to redeem Bonds pursuant the
Indenture promptly after deposit of such amounts into the Pledged Revenue Fund.
Promptly after the deposit of Foreclosure Proceeds into the Pledged Revenue Fund, the Trustee shall
transfer such Foreclosure Proceeds first to the Reserve Fund to restore any transfers from the Accounts within the
Reserve Fund made with respect to the particular Improvement Area #1 Assessed Property to which the Foreclosure
Proceeds relate (first, to replenish the Reserve Account Requirement and second, to replenish the Delinquency and
Prepayment Reserve Requirement), and second, to the Redemption Fund to be used to redeem Bonds pursuant to the
Indenture.
After satisfaction of the requirement to provide for the payment of the principal and interest on the Bonds
and to fund any deficiency that may exist in the Reserve Fund, the Trustee shall transfer any Pledged Revenues
remaining in the Pledged Revenue Fund for the purposes set forth in the Indenture as directed by the City in a City
Certificate.
Bond Fund
On each Interest Payment Date, the Trustee shall withdraw from the Principal and Interest Account and
transfer to the Paying Agent/Registrar the principal (including any Sinking Fund Installments) and interest then due
and payable on the Bonds, less any amount to be used to pay interest on the Bonds on such Interest Payment Date
from the Capitalized Interest Account as provided below.
If amounts in the Principal and Interest Account are insufficient for the purposes set forth above, the
Trustee shall withdraw from the Reserve Fund amounts to cover the amount of such insufficiency. Amounts so
withdrawn from the Reserve Fund shall be deposited in the Principal and Interest Account and transferred to the
Paying Agent/Registrar.
If, after the foregoing transfers and any transfer from the Reserve Fund as provided in the Indenture, there
are insufficient funds to make the payments provided above, the Trustee shall apply the available funds in the
Principal and Interest Account first to the payment of interest, then to the payment of principal (including any
Sinking Fund Installments) on the Bonds.
16
Moneys in the Capitalized Interest Account shall be used for the payment of interest on the Bonds on the
following dates and in the following amounts:
Date Amount
March 15, 2025 $
September 15, 2025
Any amounts on deposit in the Capitalized Interest Account after the payment of interest on the dates and
in the amounts listed above shall be transferred shall be transferred, at the direction of the City, to the Improvement
Area #1 Bond Improvement Account of the Project Fund, or to the Redemption Fund to be used to redeem Bonds,
and the Capitalized Interest Account shall be closed.
Project Fund
Money on deposit in the Project Fund shall be used for the purposes specified in the Indenture.
Disbursements from the Costs of Issuance Account of the Project Fund shall be made by the Trustee to pay costs of
issuance of the Bonds pursuant to one or more City Certificates. Disbursements from the Improvement Area #1
Bond Improvement Account of the Project Fund to pay Improvement Area #1 Project Costs shall be made by the
Trustee upon receipt by the Trustee of a properly executed and completed Certification for Payment. The funds
from the Improvement Area #1 Bond Improvement Account of the Project Fund shall be disbursed in accordance
with a Certification for Payment for Improvement Area #1 Projects as described in the CFA Agreement.
Except as provided in the succeeding paragraphs below, money on deposit in the Improvement Area #1
Bond Improvement Account of the Project Fund shall be used solely to pay Improvement Area #1 Project Costs.
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 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 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 Certification for Payment, the Trustee shall transfer the
amount, if any, remaining within the Improvement Area #1 Bond Improvement Account of the Project Fund to the
Bond Fund or to the Redemption Fund to be used to redeem Bonds pursuant to the Indenture as directed by the City
Representative in a City Certificate filed with the Trustee. Upon such transfer, the Improvement Area #1 Bond
Improvement Account of the Project Fund shall be closed.
Upon a determination by the City Representative that all costs of issuance of the Bonds have been paid, any
amounts remaining in the Costs of Issuance Account shall be transferred to the Improvement Area #1 Bond
Improvement Account of the Project Fund and used to pay the cost of 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.
In the event the Developer has not completed the Improvement Area #1 Projects by July 17, 2029, then the
City shall provide written direction to the Trustee to transfer all funds on deposit in the Improvement Area #1 Bond
17
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, 2025, an amount the City confirms to the Trustee is equal to the
Additional Interest until the Delinquency and Prepayment Reserve Requirement has been accumulated in the
Delinquency and Prepayment Reserve Account; provided, however, that at any time the amount on deposit in the
Delinquency and Prepayment Reserve Account is less than Delinquency and Prepayment Reserve Requirement, the
Trustee shall resume depositing the Additional Interest into the Delinquency and Prepayment Reserve Account until
the Delinquency and Prepayment Reserve Requirement has reaccumulated in the Delinquency and Prepayment
Reserve Account. In transferring the amounts pursuant to the Indenture, the Trustee may conclusively rely on a City
Certificate (which shall be based on the Improvement Area #1 Annual Installments as shown on the Improvement
Area #1 Assessment Roll in the Service and Assessment Plan) unless and until it receives a City Certificate directing
that a different amount be used. Whenever a transfer is made from the Reserve Account to the Bond Fund due to a
deficiency in the Bond Fund, the Trustee shall provide written notice thereof to the City, specifying the amount
withdrawn and the source of said funds. The Additional Interest shall continue to be collected and deposited
pursuant to the Indenture until the Bonds are no longer Outstanding.
“Delinquency and Prepayment Reserve Requirement” means an amount equal to 5.5% 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
* To be completed upon pricing of the Bonds.
18
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 Projects 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
the amount of such deficiency, but only to the extent that such amount is not required for the timely payment of
principal, interest, or Sinking Fund Installments.
If the amount held in the Reserve Fund together with the amount held in the Pledged Revenue Fund, the
Bond Fund, and Redemption Fund is sufficient to pay the principal amount and of all Outstanding Bonds on the next
date the Bonds may be optionally redeemed by the City at a redemption price of par, together with the unpaid
interest accrued on such Bonds as of such date, the moneys shall be transferred to the Redemption Fund and
thereafter used to redeem all Bonds on such date.
Administrative Fund
The City will create under the Indenture an Administrative Fund held by the Trustee. Periodically, upon
receipt thereof, the City shall deposit or cause to be deposited to the Administrative Fund the portion of the
Improvement Area #1 Assessments and Improvement Area #1 Annual Installments allocated to the payment of
Annual Collection Costs and Delinquent Collection Costs, as set forth in the Service and Assessment Plan. Moneys
in the Administrative Fund shall be held by the Trustee separate and apart from the other Funds created and
administered under the Indenture and used as directed by a City Certificate solely for the purposes set forth in the
Service and Assessment Plan, including payment of the Annual Collection Costs and Delinquent Collection Costs.
See “APPENDIX C – Form of Service and Assessment Plan.”
THE ADMINISTRATIVE FUND IS NOT PART OF THE TRUST ESTATE AND IS NOT
SECURITY FOR THE BONDS.
19
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 issuance of refunding bonds, are rated as to investment quality by a nationally
recognized investment rating firm not less than “AAA” or its equivalent; and (c) noncallable obligations of a state or
an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the
date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds,
are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its
equivalent.
There is no assurance that the current law will not be changed in a manner which would permit investments
other than those described above to be made with amounts deposited to defease the Bonds. Because the Indenture
does not contractually limit such investments, Owners may be deemed to have consented to defeasance with such
other investments, notwithstanding the fact that such investments may not be of the same investment quality as those
currently permitted under State law. There is no assurance that the ratings for U.S. Treasury securities used as
Defeasance Securities or that for any other Defeasance Security will be maintained at any particular rating category.
Events of Default
Each of the following occurrences or events constitutes an “Event of Default” under the Indenture:
i. The failure of the City to deposit the Pledged Revenues to the Pledged Revenue Fund;
ii. The failure of the City to enforce the collection of the Improvement Area #1 Assessments,
including the prosecution of foreclosure proceedings;
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
20
remedied shall have been given to the City by the Trustee, which may give notice in its discretion
and which shall give such notice at the written request of the Owners of not less than 51% in
aggregate Outstanding principal amount of the Bonds; provided, however, if the default stated in
the notice is capable of cure but cannot reasonably be cured within the applicable period, the City
shall be entitled to a further extension of time reasonably necessary to remedy such default so long
as corrective action is instituted by the City within the applicable period and is diligently pursued
until such failure is corrected, but in no event for a period of time of more than one hundred eighty
(180) days after such notice; and
iv. The failure to make payment of the principal of or interest on any of the Bonds when the same
becomes due and payable and such failure is not remedied within thirty (30) days thereafter.
The Trustee shall not be charged with knowledge of (a) any events or other information, or (b) any default
under the Indenture or any other agreement unless a responsible officer of the Trustee shall have actual knowledge
thereof.
Remedies in Event of Default
Upon the happening and continuance of any Event of Default, then and in every such case the Trustee may
proceed, and upon the written request of the Owners of not less than fifty-one percent (51%) in aggregate
Outstanding principal amount of the Bonds under the Indenture shall proceed, to protect and enforce the rights of the
Owners under the Indenture by action seeking mandamus or by other suit, action, or special proceeding in equity or
at law in any court of competent jurisdiction for any relief to the extent permitted by Applicable Laws including, but
not limited to, the specific performance of any covenant or agreement contained in the Indenture, or injunction;
provided, however, that no action for money damages against the City may be sought or shall be permitted.
THE PRINCIPAL OF THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UNDER ANY
CIRCUMSTANCES.
If the assets of the Trust Estate are sufficient to pay all amounts due with respect to all Outstanding Bonds,
in the selection of Trust Estate assets to be used in the payment of Bonds due in an Event of Default, the City shall
determine, in its absolute discretion, and shall instruct the Trustee by City Certificate, which Trust Estate assets shall
be applied to such payment and shall not be liable to any Owner or other Person by reason of such selection and
application. In the event that the City shall fail to deliver to the Trustee such City Certificate, the Trustee shall select
and liquidate or sell Trust Estate assets as provided in the following paragraph, and shall not be liable to any Owner,
or other Person, or the City by reason of such liquidation or sale. The Trustee shall have no liability for its selection
of Trust Estate assets to liquidate or sell.
Whenever moneys are to be applied pursuant to the Indenture, irrespective of and whether other remedies
authorized under the Indenture shall have been pursued in whole or in part, the Trustee may cause any or all of the
assets of the Trust Estate, including Investment Securities, to be sold. The Trustee may so sell the assets of the Trust
Estate and all right, title, interest, claim, and demand thereto and the right of redemption thereof, in one or more
parts, at any such place or places, and at such time or times and upon such notice and terms the Trustee may deem
appropriate, and as may be required by law and apply the proceeds thereof in accordance with the provisions of the
Indenture. Upon such sale, the Trustee may make and deliver to the purchaser or purchasers a good and sufficient
assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the
City, and all other Persons claiming such properties. No purchaser at any sale shall be bound to see to the
application of the purchase money proceeds thereof or to inquire as to the authorization, necessity, expediency, or
regularity of any such sale. Nevertheless, if so requested by the Trustee, the City shall ratify and confirm any sale or
sales by executing and delivering to the Trustee or to such purchaser or purchasers all such instruments as may be
necessary or, or in the reasonable judgment of the Trustee, proper for the purpose which may be designated in such
request.
21
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.
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.
22
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.
So long as Bonds are Outstanding under the Indenture, the City shall not issue any bonds, notes, or other
evidences of indebtedness other than the Bonds and any Refunding Bonds issued to refund all or a portion of the
Bonds, secured by any pledge of or other lien or charge on the Trust Estate or other property pledged under the
Indenture, other than a lien or pledge subordinate to the lien and pledge of such property related to the Bonds.
Other Obligations or Other Liens; Refunding Bonds
The City reserves the right, subject to the provisions contained in the Indenture, to issue Other Obligations
under other indentures, assessment ordinances, or similar agreements or other obligations which do not constitute or
create a lien on the Trust Estate and are not payable from the Trust Estate, or any portion thereof.
Other than Refunding Bonds issued to refund all or a portion of the Bonds, or subordinate lien obligations
permitted under the Indenture, the City will not create or voluntarily permit to be created any debt, lien, or charge on
the Trust Estate, or any portion thereof, and will not do or omit to do or suffer to be done or omit to be done any
matter or things whatsoever whereby the lien of the Indenture or the priority thereof might or could be lost or
impaired.
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
23
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 Capitalized Interest Account of the Bond 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
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
2054
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
Improvement Area #1 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 shows the overlapping ad valorem tax rates currently levied on property located in
Improvement Area #1 of the District.
Taxing Entity
Tax Year 2023
Ad Valorem Tax Rate (1)
The City $0.510717
Collin County, Texas 0.149343
Collin County Community College District 0.081220
Anna Independent School District 1.257500
Total Existing Tax Rate $1.998780
Estimated Average Improvement Area #1 Annual Installment
of Improvement Area #1 Assessments in Improvement Area #1
as a tax rate equivalent (2)
$0.689670
Estimated Total Tax Rate and Average Improvement Area
#1 Annual Installment in Improvement Area #1 of the
District as a tax rate equivalent (2)
$2.688450
________________________________
(1) As reported by the taxing entities. Per $100 in taxable assessed value.
(2) Preliminary, subject to change. Derived from information presented in the Service and Assessment Plan. See “APPENDIX C – Form
of Service and Assessment Plan. Assumes completion of homes at values estimated by the Developer. See “THE DEVELOPMENT
– Expected Build-Out and Home Prices in the Development.”
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 June 15, 2024, and City debt secured by the
Improvement Area #1 Assessments:
Taxing or Assessing Entity
Gross
Outstanding Debt
as of June 15, 2024
Estimated
Percentage
Applicable (1)
Direct and
Estimated
Overlapping Debt (1)
The City (Improvement Area #1
Assessments – The Bonds)
$ 12,387,000*
100.000% $ 12,387,000*
The City (Ad Valorem Taxes) 160,695,000 0.759% 1,219,750
Collin County, Texas 658,360,000 0.011% 72,418
Collin County Community College District 480,350,000 0.012% 58,956
Anna Independent School District 318,687,991 0.735% 2,342,108
TOTAL $1,630,479,991 $16,080,232
* Preliminary; subject to change.
(1) Based on the prospective market value for Improvement Area #1 of the District and the Tax Year 2023 Net Taxable Assessed Valuations
for the taxing entities. See “APPRAISAL” and “APPENDIX H – Appraisal.”
Sources: Collin Central Appraisal District and Municipal Advisory Council of Texas
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.
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 five years in which the land received the lower agricultural valuation.
The rollback tax is the difference between taxes paid on land’s agricultural value and the taxes that the landowner
would have paid if the land had been taxed on a higher market value plus interest charged for each year from the
date on which taxes would have been due. If the land use changes to a non-agricultural use on only a portion of a
larger tract, the landowner can fence off the remaining land and maintain the agricultural valuation on the remaining
land. In this scenario, the landowner would only be responsible for rollback taxes on that portion of the land where
use changed and not the entire tract.
Beginning in 2024, Improvement Area #1 will no longer be subject to an agricultural valuation. The
Developer has received a change in use letter from Collin Central Appraisal District for rollback taxes due by
January 31, 2025, in the estimated amount of $207,670.59.
Homeowners’ Association Dues
In addition to the Improvement Area #1 Assessments described above, the Developer anticipates that each
property owner in Improvement Area #1 of the District will pay a property owner’s association fee to the Meadow
Vista Residential Community, Inc. (the “HOA”), in the approximate amount of $500 annually.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
28
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 Projects through Improvement Area #1 Assessments, it must adopt a resolution generally describing the
Improvement Area #1 Projects and the land within Improvement Area #1 of the District to be subject to
Improvement Area #1 Assessments to pay the cost therefor. The City has caused the Improvement Area #1
Assessment Roll to be prepared, which shows the land within Improvement Area #1 of the District to be assessed,
the amount of the benefit to and the Improvement Area #1 Assessment against each lot or parcel of land, and the
number of Improvement Area #1 Annual Installments in which the Improvement Area #1 Assessment is divided.
The Improvement Area #1 Assessment Roll will be filed with the City Secretary and made available for public
inspection. Statutory notice will be given to the owners of the property to be assessed and a public hearing will be
conducted to hear testimony from affected property owners as to the propriety and advisability of undertaking the
Improvement Area #1 Projects and funding a portion of the same with Improvement Area #1 Assessments. The City
expects to levy the Improvement Area #1 Assessments and adopt the Assessment Ordinance on July 9, 2024. After
adoption of the Assessment Ordinance, the Improvement Area #1 Assessments will become legal, valid, and binding
liens upon the property against which the Improvement Area #1 Assessments were made.
Under the PID Act, the Actual Costs of the Improvement Area #1 Projects may be assessed by the City
against the Improvement Area #1 Assessed Property in Improvement Area #1 of the District so long as the special
benefit conferred upon the Improvement Area #1 Assessed Property by the Improvement Area #1 Projects equals or
exceeds the Improvement Area #1 Assessments. The costs of the Improvement Area #1 Projects may be assessed
using any methodology that results in the imposition of equal shares of cost on Improvement Area #1 Assessed
Property similarly benefited. The allocation of benefits and assessments to the benefitted land within the District,
including land in Improvement Area #1, is set forth in the Service and Assessment Plan, which should be read in its
entirety. See “APPENDIX C – Form of Service and Assessment Plan.”
Improvement Area #1 Assessment Methodology
The Service and Assessment Plan describes the special benefit to be received by each parcel of
Improvement Area #1 Assessed Property as a result of the Improvement Area #1 Projects, provides the basis and
justification for the determination that such special benefit exceeds the Improvement Area #1 Assessments being
levied, and establishes the methodology by which the City allocates the special benefit of the Improvement Area #1
Projects to parcels of Improvement Area #1 Assessed Property in a manner that results in equal shares of costs being
apportioned to parcels of Improvement Area #1 Assessed Property similarly benefited. As described in the Service
and Assessment Plan, a portion of the costs of the Improvement Area #1 Projects are being funded with proceeds of
the Bonds, which are payable from Pledged Revenues, including Assessment Revenues, and other assets comprising
the Trust Estate. As set forth in the Service and Assessment Plan, the City Council has determined that the Actual
Costs of the Improvement Area #1 Projects will be allocated to the Improvement Area #1 Assessed Property by
spreading the entire Improvement Area #1 Assessment across all Improvement Area #1 Assessed Property within
Improvement Area #1 of the District based on the ratio of Estimated Buildout Value of each Lot Type in
Improvement Area #1 to the Estimated Buildout Value of all Improvement Area #1 Assessed Property within
Improvement Area #1. At the time the City adopts the Assessment Ordinance, the Improvement Area #1 Initial
Parcel will be the only Parcel within Improvement Area #1, and as such, the Improvement Area #1 Initial Parcel will
be allocated 100% of the Improvement Area #1 Authorized Improvements.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
29
The following table provides additional analysis with respect to assessment methodology, including the
value to Improvement Area #1 Assessment burden ratio per Lot Type, equivalent tax rate per Lot Type, and leverage
per Lot Type related to the Improvement Area #1 Assessments applicable to Improvement Area #1. The
information in the table was obtained from and calculated using information provided in the Service and Assessment
Plan. See “APPENDIX C – Form of Service and Assessment Plan.”
Lien to Value Analysis, Improvement Area #1 Assessment Allocation, Equivalent Tax Rate,
and Leverage per Lot Type in Improvement Area #1
Lot
Type
Planned
No. of
Lots
Estimated
Finished
Value per
Lot Type (1)
Projected
Average
Home Value
per Lot Type
(2)
Improvement
Area #1
Assessment per
Lot Type (3)
Average
Improvement
Area #1
Annual
Installment of
Improvement
Area #1
Assessment
per Lot Type
(3)
Tax Rate
Equivalent of
Average
Improvement
Area #1 Annual
Installment of
Improvement
Area #1
Assessment per
Lot Type (3)
Estimated
Ratio of
Estimated
Finished
Value per
Lot Type to
Improvemen
t Area #1
Assessment
(1), (3)
Estimated
Ratio of
Projected
Average
Home Value
per Lot Type
to
Improvement
Area #1
Assessment (2),
(3)
50’ 190 $100,000 $500,000 $42,421 $3,448 $0.689670 2.36 : 1 11.79 : 1
60’ 85 $120,000 $600,000 $50,905 $4,138 $0.689670 2.36 : 1 11.79 : 1
* Preliminary, subject to change.
(1) Developer estimates. Differ from the lot sale price in Lot Purchase Contract and the retail lot value in the Appraisal.
(2) Estimated Buildout Value from the Service and Assessment Plan. Provided by the Developer.
(3) Per $100 of home value.
Source: P3Works, LLC and information presented in the Service and Assessment Plan
For further explanation of the Improvement Area #1 Assessment methodology, see “APPENDIX C – Form
of Service and Assessment Plan.”
The City has determined that the foregoing method of allocation will result in the imposition of equal
shares of the Improvement Area #1 Assessments on parcels of Improvement Area #1 Assessed Property similarly
situated within Improvement Area #1 of the District. The Improvement Area #1 Assessments and interest thereon
are expected to be paid in Improvement Area #1 Annual Installments as described above. The determination by the
City of the assessment methodology set forth in the Service and Assessment Plan is the result of the discretionary
exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on
the Developer and all future owners and developers within Improvement Area #1 of the District. See “APPENDIX
C – Form of Service and Assessment Plan.”
Collection and Enforcement of Improvement Area #1 Assessment Amounts
Under the PID Act, the Improvement Area #1 Annual Installments may be collected in the same manner
and at the same time as ad valorem taxes of the City. The Improvement Area #1 Assessments may be enforced by
the City in the same manner that an ad valorem tax lien against real property is enforced. Delinquent installments of
the Improvement Area #1 Assessments incur interest, penalties, and attorney’s fees in the same manner as
delinquent ad valorem taxes. Under the PID Act, the Assessment Lien is a first and prior lien against the property
assessed, superior to all other liens and claims except liens or claims for State, county, school district, or
municipality ad valorem taxes. See “BONDHOLDERS’ RISKS – Assessment Limitations.”
In the Indenture, the City will covenant to collect, or cause to be collected, Improvement Area #1
Assessments as provided in the Assessment Ordinance. No less frequently than annually, City staff or a designee of
the City shall prepare, and the City Council shall approve, an Annual Service Plan Update to allow for the billing
and collection of Improvement Area #1 Annual Installments. Each Annual Service Plan Update shall include an
updated Improvement Area #1 Assessment Roll and a calculation of the Improvement Area #1 Annual Installment
30
for each Parcel. Annual Collection Costs shall be allocated among all Parcels in proportion to the amount of the
Improvement Area #1 Annual Installments for the Parcels.
In the Indenture, the City will covenant, agree, and warrant that, for so long as any Bonds are Outstanding
it will take and pursue all actions permissible under Applicable Laws to cause the Improvement Area #1
Assessments to be collected and the liens thereof enforced continuously, in the manner and to the maximum extent
permitted by Applicable Laws, and, to the extent permitted by Applicable Laws, to cause no reduction, abatement,
or exemption in the Improvement Area #1 Assessments.
To the extent permitted by law, notice of the Improvement Area #1 Annual Installments will be sent by, or
on behalf of the City, to the affected property owners on the same statement or such other mechanism that is used by
the City, so that such Improvement Area #1 Annual Installments are collected simultaneously with ad valorem taxes
and shall be subject to the same penalties, procedures, and foreclosure sale in case of delinquencies as are provided
for ad valorem taxes of the City.
The City will determine or cause to be determined, no later than February 15 of each year, whether or not
any Improvement Area #1 Annual Installment is delinquent and, if such delinquencies exist, the City will order and
cause to be commenced as soon as practicable any and all appropriate and legally permissible actions to obtain such
Improvement Area #1 Annual Installment, and any delinquent charges and interest thereon, including diligently
prosecuting an action in district court to foreclose the currently delinquent Improvement Area #1 Annual
Installment. Notwithstanding the foregoing, the City shall not be required under any circumstances to purchase or
make payment for the purchase of the delinquent Improvement Area #1 Assessment or the corresponding
Improvement Area #1 Assessed Property.
The City will implement the basic timeline and procedures for Improvement Area #1 Assessment
collections and pursuit of delinquencies set forth in Exhibit 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 Improvement
Area #1 Assessments.
The City shall not be required under any circumstances to expend any funds for Delinquent Collection
Costs in connection with its covenants and agreements under the Indenture or otherwise other than funds on deposit
in the Administrative Fund.
Improvement Area #1 Annual Installments will be paid to the City or its agent. Improvement Area #1
Annual Installments are due on October 1 of each year, and become delinquent on February 1 of the following year.
In the event Improvement Area #1 Assessments are not timely paid, there are penalties and interest as set forth
below:
Date Payment
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 Improvement Area #1 Assessments are paid as an administrative expense of the estate in
bankruptcy or by order of the bankruptcy court.
31
Improvement Area #1 Assessment Amounts
Improvement Area #1 Assessment Amounts. The maximum amounts of the Improvement Area #1
Assessments will be established by the methodology described in the Service and Assessment Plan. The
Improvement Area #1 Assessment Roll sets forth for each year the Improvement Area #1 Annual Installment for
each Improvement Area #1 Assessed Property consisting of the annual payment allocable to the Bonds and the
Improvement Area #1 Projects for each Improvement Area #1 Assessed Property, which amount includes (i) the
Additional Interest and (ii) the annual payment allocable to Annual Collection Costs. The Improvement Area #1
Annual Installments for the Improvement Area #1 Assessments may not exceed the amounts shown on the
Improvement Area #1 Assessment Roll. The Improvement Area #1 Assessments will be levied against the parcels
comprising the Improvement Area #1 Assessed Property as indicated on the Improvement Area #1 Assessment Roll.
See “APPENDIX C – Form of Service and Assessment Plan” and “APPENDIX G – Form of CFA Agreement.”
The Improvement Area #1 Annual Installments shown on the Improvement Area #1 Assessment Roll will
be reduced to equal the actual costs of repaying the Bonds (which amount will include Additional Interest) and
actual Annual Collection Costs (as provided for in the definition of such term), taking into consideration any other
available funds for these costs, such as interest income on account balances.
If the debt service on issued and Outstanding Bonds is reduced as the result of an economic refunding of
the Bonds, the Prepayment of the Improvement Area #1 Assessments, or the redemption of the Bonds, then there
would be a corresponding reduction in the Improvement Area #1 Assessments and the Improvement Area #1 Annual
Installments. See “APPENDIX C – Form of Service and Assessment Plan.” In such case, the reduced Improvement
Area #1 Assessment and Improvement Area #1 Annual Installment, as shown on the Improvement Area #1
Assessment Roll for Improvement Area #1, shall be reflected in the next Annual Service Plan Update and approved
by City Council.
Method of Apportionment of Improvement Area #1 Assessments. For purposes of the Service and
Assessment Plan, the City Council has determined that the Improvement Area #1 Assessments shall be initially
allocated to the Parcels consisting of the Improvement Area #1 Assessed Property based on the ratio of the
Estimated Buildout Value of each Parcel in Improvement Area #1 to the Estimated Buildout Value of all Parcels in
Improvement Area #1.
Division Prior to Recording of Subdivision Plat. Upon the division of any Improvement Area #1
Assessed Property prior to the recording of a subdivision plat, the Administrator shall reallocate the
Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to the
division among the newly divided Improvement Area #1 Assessed Properties according to the
following formula:
A = B x (C ÷ D)
Where the terms have the following meanings:
A = the Improvement Area #1 Assessment for the newly divided Improvement Area #1 Assessed
Property
B = the Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior
to division
C = the Estimated Buildout Value of the newly divided Improvement Area #1 Assessed Property
D = the sum of the Estimated Buildout Value for all of the newly divided Improvement Area #1
Assessed Properties
The calculation of the Improvement Area #1 Assessment of an Improvement Area #1
Assessed Property shall be performed by the Administrator and shall be based on the Estimated
Buildout Value of that Improvement Area #1 Assessed Property, as relying on information from
32
homebuilders, market studies, appraisals, official public records of the County, and any other relevant
information regarding the Improvement Area #1 Assessed Property. The calculation as confirmed by
the City Council shall be conclusive and binding.
The sum of the Improvement Area #1 Assessments for all newly divided Improvement Area
#1 Assessed Properties shall equal the Improvement Area #1 Assessment for the Improvement Area #1
Assessed Property prior to subdivision. The calculation shall be made separately for each newly
divided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1
Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may
not exceed the Improvement Area #1 Assessment prior to the reallocation. Any reallocation shall be
reflected in the next Annual Service Plan Update and approved by the City Council.
Upon Subdivision by a Recorded Subdivision Plat. Upon the subdivision of any Improvement Area #1
Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the
Improvement Area #1 Assessment for the Improvement Area #1 Assessed Property prior to the
subdivision among the new subdivided Lots based on Estimated Buildout Value according to the
following formula:
A = [B x (C ÷ D)]/E
Where the terms have the following meanings:
A = the Improvement Area #1 Assessment for the newly subdivided Lot
B = the Improvement Area #1 Assessment for the Parcel prior to subdivision
C = the sum of the Estimated Buildout Value of all newly subdivided Lots of the same Lot
Type
D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots excluding
Non-Benefitted Property
E= the number of newly subdivided Lots of the same Lot Type
Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated
Buildout Value for each Lot to be created after recording the subdivision plat as of the date the
subdivision plat is anticipated to be recorded. The calculation of the Improvement Area #1
Assessment for a Lot shall be performed by the Administrator and confirmed by the City Council
based on Estimated Buildout Value information provided by the Developer, homebuilders, third party
consultants, and/or the official public records of the County regarding the Lot. The calculation as
confirmed by the City Council shall be conclusive and binding.
The sum of the Improvement Area #1 Assessments for all newly subdivided Lots shall not
exceed the Improvement Area #1 Assessment for the portion of the Improvement Area #1 Assessed
Property subdivided prior to subdivision. The calculation shall be made separately for each newly
subdivided Improvement Area #1 Assessed Property. The reallocation of an Improvement Area #1
Assessment for an Improvement Area #1 Assessed Property that is a homestead under Texas law may
not exceed the Improvement Area #1 Assessment prior to the reallocation. Any reallocation pursuant
to this section shall be reflected in the next Annual Service Plan Update and approved by the City
Council.
Upon Consolidation. If two or more Lots or Parcels are consolidated into a single Parcel or Lot, the
Administrator shall allocate the Improvement Area #1 Assessments against the Lots or Parcels before
the consolidation to the consolidated Lot or Parcel, which allocation shall be reflected in the next
Annual Service Plan Update and approved by the City Council. The Improvement Area #1
33
Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot
Type and compliance may require a mandatory prepayment of Improvement Area #1 Assessments.
Maximum Assessment. Notwithstanding the foregoing, the Service and Assessment Plan establishes a
“Maximum Assessment” for each Lot Type in Improvement Area #1 of the District, which Maximum Assessment is
currently calculated at $42,421* for the 50’ lots, and $50,905* for the 60’ lots. See “APPENDIX C – Form of
Service and Assessment Plan.”
Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not
result in the Improvement Area #1 Assessment per Lot for any Lot Type exceeding the Maximum Assessment. If the
Administrator determines that the resulting Improvement Area #1 Assessment per Lot for any Lot Type will exceed
the Maximum Assessment, then (i) the Improvement Area #1 Assessment applicable to each Lot Type shall each be
reduced to the Maximum Assessment, and (ii) the person or entity filing the plat shall pay, as a mandatory
prepayment of the Improvement Area #1 Assessment, to the City the amount the Improvement Area #1 Assessment
was reduced, plus Prepayment Costs and Delinquent Collection Costs, prior to the City approving the final plat.
In addition, if the Improvement Area #1 Assessed Property is transferred to a person or entity that is
exempt from payment of the Improvement Area #1 Assessment, the owner transferring the Improvement Area #1
Assessed Property shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment
Costs and Delinquent Collection Costs, prior to the transfer. If the owner of the Improvement Area #1 Assessed
Property causes the Improvement Area #1 Assessed Property to become Non-Benefited Property, the owner causing
the change in status shall pay to the City the full amount of the Improvement Area #1 Assessment, plus Prepayment
Costs and Delinquent Collection Costs, prior to the change in status.
For further information about apportionment of the Improvement Area #1 Assessments, See “APPENDIX
C – Form of Service and Assessment Plan.”
Prepayment of Improvement Area #1 Assessments
Pursuant to the PID Act and the Indenture, the owner of any Improvement Area #1 Assessed Property may
voluntarily prepay (a “Prepayment”), at any time, all or part of an Improvement Area #1 Assessment levied against
such owner’s Improvement Area #1 Assessed Property, together with accrued interest to the date of payment. Upon
receipt of such Prepayment, such amounts will be applied towards the redemption or payment of the Bonds.
Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a
delinquent installment of an Improvement Area #1 Assessment are not to be considered a Prepayment, but rather are
to be treated as payment of regularly scheduled Improvement Area #1 Assessments.
Priority of Lien
The Improvement Area #1 Assessments or any reassessment, the expense of collection, and reasonable
attorney’s fees, if incurred, constitute a first and prior lien against the property assessed, superior to all other liens
and claims except liens or claims for the State, county, school district, or municipality ad valorem taxes, and are a
personal liability of and charge against the owners of the property regardless of whether the owners are named. The
lien is effective from the date of the Assessment Ordinance until the Improvement Area #1 Assessment is paid, and
may be enforced by the City in the same manner as an ad valorem tax levied against real property may be enforced
by the City. The owner of any property assessed may pay the entire Improvement Area #1 Assessment levied
against any lot or parcel, together with accrued interest to the date of payment, at any time.
Foreclosure Proceedings
In the event of delinquency in the payment of any Improvement Area #1 Annual Installment, except for
unpaid Improvement Area #1 Assessments on homestead property (unless the lien associated with the assessment
attached prior to the date the property became a homestead), the City is empowered to order institution of an action
in state district court to foreclose the lien of such delinquent Improvement Area #1 Annual Installment. In such
action the real property subject to the delinquent Improvement Area #1 Annual Installments may be sold at judicial
* Preliminary, subject to change.
34
foreclosure sale for the amount of such delinquent Improvement Area #1 Annual Installments, plus penalties and
interest.
Any sale of property for nonpayment of an installment or installments of an Improvement Area #1
Assessment will be subject to the lien established for remaining unpaid installments of the Improvement Area #1
Assessment against such property and such property may again be sold at a judicial foreclosure sale if the purchaser
thereof fails to make timely payment of the non-delinquent installments of the Improvement Area #1 Assessments
against such property as they become due and payable. Judicial foreclosure proceedings are not mandatory. In the
event a foreclosure is necessary, there could be a delay in payments to owners of the Bonds pending prosecution of
the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid
would be received at the foreclosure sale, and in such event there could be an additional delay in payment of the
principal of and interest on Bonds or such payment may not be made in full. The City is not required under any
circumstance to purchase the property or to pay the delinquent Improvement Area #1 Assessment on the
corresponding Improvement Area #1 Assessed Property.
In the Indenture, the City will covenant to take and pursue all actions permissible under Applicable Laws to
cause the Improvement Area #1 Assessments to be collected and the liens thereof enforced continuously, in the
manner and to the maximum extent permitted by Applicable Laws, and to cause no reduction, abatement, or
exemption in the Improvement Area #1 Assessments, provided that the City is not required to expend any funds for
collection and enforcement of Improvement Area #1 Assessments other than funds on deposit in the Administrative
Fund. Pursuant to the Indenture, Foreclosure Proceeds (excluding Delinquent Collection Costs) constitute Pledged
Revenues to be deposited into the Pledged Revenue Fund upon receipt by the City and distributed in accordance
with the Indenture. See “APPENDIX B – Form of Indenture.” See also “APPENDIX E-1 – Form of Disclosure
Agreement of Issuer” for a description of the expected timing of certain events with respect to collection of the
delinquent Improvement Area #1 Assessments.
In the Indenture, the City creates the Delinquency and Prepayment Reserve Account under the Reserve
Fund and will fund such account as provided in the Indenture. The City will not be obligated to fund foreclosure
proceedings out of any funds other than in the Administrative Fund. If funds in the Administrative Fund are
insufficient to pay foreclosure costs, the owners of the Bonds may be required to pay amounts necessary to continue
foreclosure proceedings. See “SECURITY FOR THE BONDS – Reserve Fund (Reserve Account and Delinquency
and Prepayment Reserve Account),” “APPENDIX B – Form of Indenture,” and “APPENDIX C – Form of Service
and Assessment Plan.”
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.
35
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’s existing water and
wastewater systems are sufficient to serve all of the property in Improvement Area #1 of the District.
The City is currently served by ground water through seven water wells located at five different sites.
These seven wells produce a total of 1,520 gallons per minute. The City 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.
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. The District is located east 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 various water districts 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 REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
36
THE DISTRICT
General
The PID Act authorizes municipalities, such as the City, to create public improvement districts within their
boundaries or extraterritorial jurisdiction, and to impose assessments within the public improvement district to pay
for certain improvements. The District was created by Resolution No. 2023-09-1558 of the City adopted on
September 26, 2023 (the “Creation Resolution”), for the purpose of undertaking and financing the cost of certain
public improvements within the District, including the Improvement Area #1 Projects, authorized by the PID Act
and approved by the City Council that confer a special benefit on the District property being developed. The
District is not a separate political subdivision of the State and is governed by the City Council. A map of the
property within the District is included on page v hereof.
Powers and Authority
Pursuant to the PID Act, the City may establish and create the District and undertake, or reimburse a
developer for the costs of, improvement projects that confer a special benefit on property located within the District,
whether located within the City limits or the City’s extraterritorial jurisdiction. The PID Act provides that the City
may levy and collect assessments on property in the District, or portions thereof, payable in periodic installments
based on the benefit conferred by an improvement project to pay all or part of its cost.
Pursuant to the PID Act and the Creation Resolution, the City has the power to undertake, or reimburse a
developer for the costs of, the financing, acquisition, construction, or improvement of the Improvement Area #1
Projects. See “THE IMPROVEMENT AREA #1 PROJECTS.” Pursuant to the authority granted by the PID Act
and the Creation Resolution, the City has determined to undertake the construction, acquisition, or purchase of
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 Projects and to finance a
portion of the costs thereof through the issuance of the Bonds. The City has further determined to provide for the
payment of debt service on the Bonds through Pledged Revenues and other assets comprising the Trust Estate. See
“ASSESSMENT PROCEDURES” and “APPENDIX C – Form of Service and Assessment Plan.”
THE IMPROVEMENT AREA #1 PROJECTS
General
The Improvement Area #1 Projects 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 Projects.
Pursuant to the CFA Agreement and the Indenture, the City will reimburse the Developer for a portion of
the Actual Costs of the Improvement Area #1 Projects from proceeds of the Bonds. See “THE DEVELOPMENT –
Development Plan.”
The Improvement Area #1 Projects, a portion of which are being financed with proceeds of the Bonds,
include sanitary sewer, storm sewer, and water distribution systems, paving, roads, and streets, and soft costs
benefitting only Improvement Area #1 Assessed Property in Improvement Area #1 of the District, as described
below.
Sanitary Sewer: Improvements including trench excavation and embedment, trench safety, PVC piping,
encasement, boring, manholes, sewer main connections, service connections, testing, related earthwork,
excavation, erosion control, platting, staking, and all necessary appurtenances required to provide sanitary
sewer service to all Lots within Improvement Area #1.
Storm Sewer: Improvements including earthen channels, swales, trench excavation and embedment, curb
and drop inlets, RCP and RCB piping and boxes, headwalls, manholes, rock rip rap, concrete outfalls,
storm drain connections, trench safety, and testing, related earthwork, excavation, erosion control, traffic
37
control, detention pond, encasement, platting, staking, and all necessary appurtenances required to provide
storm drainage for all Lots within Improvement Area #1.
Water Distribution: Improvements including trench excavation and embedment, trench safety, PVC
piping, water main connections, water meters, service connections, testing, related earthwork, excavation,
erosion control, fire hydrants, platting, staking, steel encasement, and all necessary appurtenances required
to provide water service to all Lots within Improvement Area #1.
Paving/Roads/Streets: Improvements including subgrade stabilization, reinforced concrete for roadways,
handicapped ramps, sidewalks, pavement connections, headers, barricades, CBU pads, signs, striping,
traffic control, platting, staking, streetlights, all related earthwork, excavation, clearing and grubbing, tree
removal, erosion control, intersections, signage, lighting, screening walls, and re-vegetation of all disturbed
areas within the right-of-way of Improvement Area #1. The road improvements will provide benefit to
each Lot within Improvement Area #1.
Soft Costs: Costs related to designing, constructing, and installing the Improvement Area #1 Projects,
including land planning and design, inspection fees, franchise fees, City fees, engineering, soil testing,
survey, construction management, contingency, legal costs, and consultants.
The total cost of the Improvement Area #1 Projects is expected to be approximately $10,876,627. The City
will reimburse the Developer for a portion of such costs in the approximate amount of $9,440,000* from proceeds of
the Bonds. The balance of such costs in the approximate amount of $1,436,627* has been funded by the Developer
from proceeds of the Revolving Credit Agreement and will not be reimbursed by the City. In addition, the
Developer is responsible for paying, without reimbursement by the City, for the cost of the Private Improvements in
the approximate amount of $6,841,178*. As of May 29, 2024, the Developer has spent approximately $1,964,618.63
on construction of the Improvement Area #1 Projects and $1,035,336.51 on construction of the Private
Improvements. See “SOURCES AND USES OF FUNDS,” “THE IMPROVEMENT AREA #1 PROJECTS,” and
“APPENDIX C – Form of Service and Assessment Plan.”
The following table reflects the estimated total costs of the Improvement Area #1 Projects.
Type of Improvement Area #1 Project Costs
Sanitary Sewer $1,358,015
Storm Sewer 1,999,353
Water Distribution 1,353,005
Street and Alley Paving 3,276,136
Soft Costs 2,890,119
Total $10,876,627
Ownership and Maintenance of Improvement Area #1 Projects
The Improvement Area #1 Projects 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 Projects constructed and conveyed, as outlined in the Service and
Assessment Plan.
THE DEVELOPMENT
The following information has been provided by the Developer. Certain of the following information is
beyond the direct knowledge of the City, the City’s 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 District is an approximately 223.154-acre master-planned community expected to be constructed in
three Improvement Areas and to include approximately 764 single-family detached residential lots, two acres of land
* Preliminary, subject to change.
38
zoned for mixed use (which is expected to be developed for commercial use), an amenity center, and a variety of
trails and public open space (collectively, the “Development”). See the map and concept plans for the District on
pages v-vi.
Improvement Area #1 is the first area of the District to be developed by the Developer. Improvement Area
#1 consists of approximately 71.042 acres and is expected to include 275 single-family detached residential lots,
consisting of 190 50’ lots and 85 60’ lots. The Developer began development of Improvement Area #1 in Q4 2023
and expects it to be completed in Q2 2025. See “THE IMPROVEMENT AREA #1 PROJECTS,” “– Expected
Build-Out and Home Prices in the Development,” and “APPENDIX C – Form of Service and Assessment Plan.”
The approximately two acres of expected commercial development in the District is located in the
Remainder Area. The Developer expects to sell such land at a future time and anticipates that it will be developed
during a later phase. The Developer has not entered into any contracts or letters of intent with respect to such land.
Lot Purchase Contract; Developer as Homebuilder
Improvement Area #1 is expected to be comprised of 190 50’ lots and 85 60’ lots. The Developer has
entered into a Lot Purchase Contract with the Homebuilder for the purchase of 72 of the 50’ lots within
Improvement Area #1 for a price of $98,750 per lot. The Developer intends to construct homes on the remaining
203 lots in Improvement Area #1, consisting of 118 50’ lots and all 85 60’ lots. The Developer has not entered into
any lot purchase contracts for lots in the Future Improvement Areas.
The Developer expects to complete construction of the Improvement Area #1 Projects and other
improvements necessary for delivery of lots in Improvement Area #1 in the second quarter of 2025. The terms of
the Lot Purchase Agreement provide that the Homebuilder will purchase 10 lots within 20 days of the date that
building permits are available for lots, and will purchase a minimum of eight lots during each 90-day period
thereafter. The Developer expects to complete sales of lots to the Homebuilder in the second quarter of 2027. The
Homebuilder has deposited $355,500 in earnest money (the “Earnest Money Deposit”). The Earnest Money Deposit
is unsecured and will be credited towards the purchase price at the lot closings. Additionally, there are circumstances
described in the Lot Purchase Contract the occurrence of which may result in the termination of such agreement.
The following table reflects the number of lots on which the Homebuilder and the Developer plan to
construct homes within Improvement Area #1 of the District.
Improvement Area #1 Lot Allocation
50’ Lot Size 60’ Lot Size Total
Homebuilder 72 – 72
Developer 118 85 203
Total 190 85 275
The expected schedule for sale of lots to the Homebuilder pursuant to the Lot Purchase Contract is shown
in the following table.
Expected Sale of Lots to Homebuilder in Improvement Area #1
Year End 50’ Lot Size
2025 26
2026 32
2027 14
Total 72
39
The Developers expectations regarding absorption of homes in Improvement Area #1 is shown in the
following table:
Expected Absorption of Homes in Improvement Area #1 of the District
Expected Sale Dates
to Homeowners
50’ Lot 60’ Lot Total Lots
2026 84 48 132
2027 106 37 143
Total 190 85 275
Expected Lot Completion and Home Prices in the Development
The Developer expects to complete lot development in the Development in three phases with final
development of lots expected in the fourth quarter of 2029. The following tables reflect the Developer’s expected
completion schedules for lots in the District.
Expected Lot Completion within the District
Improvement Area Expected Completion Date
#1 Q2 2025
#2 Q3 2027
#3 Q4 2029
The actual and expected single-family residential lot prices and expected average home prices in the
District are as follows:
Lot Prices and Expected Average Home Prices in the District
Lot Size Number of Lots Base Lot Price (1) Expected Average Home Price (2)
Improvement Area #1
50’ 190 $100,000 $500,000
60’ 85 $120,000 $600,000
Total 275
Improvement Area #2
50’ 237 $100,000 $500,000
60’ 51 $120,000 $600,000
Total 288
Improvement Area #3
50’ 94 $100,000 $500,000
60’ 107 $120,000 $600,000
201
(1) Developer estimates. Estimates differ from the lot sale price in the Lot Purchase Contract and the retail lot value
in the Appraisal.
(2) Developer estimates.
40
Amenities and Private Improvements
In addition to the Improvement Area #1 Projects, the Development Agreement obligates the Developer to
construct an amenity center, which will include a playground, pool, and pavilion, additional playground areas, and a
variety of trails and public open space that will include benches and pet waste stations (collectively, the
“Amenities”). The costs of the Amenities, expected to equal approximately $2,828,000, will be paid entirely by the
Developer, without reimbursement by the City, from proceeds of the Revolving Credit Agreement.
The Amenities will be owned, operated, and maintained by the HOA. The HOA will provide for the
ongoing operation, maintenance, and repair of the Amenities through the administration of a property owner’s
association fee to be paid by each lot owner within the District. See “OVERLAPPING TAXES AND DEBT –
Homeowners’ Association Dues.”
In addition, the Developer is responsible for paying, without reimbursement by the City, for costs of the
Private Improvements (consisting of excavation, retaining walls, and soft costs) in the approximate amount of
$3,471,913*. The Private Improvements will be owned, operated, and maintained by the HOA.
Future Improvement Area Bonds
The Developer expects to request the City to issue Future Improvement Area Bonds to finance the costs of
the public improvements benefitting the Future Improvement Areas. The estimated costs of the public
improvements benefitting the Future Improvement Areas will be determined as development progresses, and the
Service and Assessment Plan will be updated accordingly. Such Future Improvement Area Bonds will be secured by
separate assessments levied pursuant to the PID Act on assessable property within the Future Improvement Areas.
The Developer anticipates that Future Improvement Area Bonds will be issued over a five-year period.
The Bonds and any Future Improvement Area Bonds issued by the City are separate and distinct issues of
securities. The City reserves the right to issue Future Improvement Area Bonds for any purpose permitted by the
PID Act, including those described above.
Development Agreement
Pursuant to the Meadow Vista Development Agreement by and between the City and the Developer,
effective as of June 27, 2023 (the “Development Agreement”), the Developer has the right to construct public
improvements for the District, including the Improvement Area #1 Projects, according to certain rules and
regulations of the City, and to be reimbursed for a portion of the costs of such construction through the proceeds of
assessments and/or PID Bonds (defined below). The Development Agreement provides certain requirements to be
met for the issuance of the Bonds and any additional bonds issued for the payment of additional Authorized
Improvements (defined in the Development Agreement and the PID Act) (collectively, “PID Bonds”), including (i)
the maximum equivalent tax rate, including the PID Assessments associated with the PID Bonds and all overlapping
taxing jurisdictions, may not exceed $0.69 per $100 taxable assessed valuation without prior written consent of the
City; and (ii) the ratio of the appraised value of the property being financed, as confirmed by an independent
appraisal, to the par amount of the PID Bonds proposed to be issued with respect to such property must be at least
2:1, unless a lower ratio is approved by the City. See “APPENDIX F – Development Agreement.”
In addition to construction of the Improvement Area #1 Projects, the Development Agreement obligates the
Developer to:
• Construct a four-lane segment of Hackberry Drive adjacent to the Property and necessary to
connect the Property to Buddy Hayes Boulevard (formerly Throckmorton Boulevard), including
associated culvert improvements, the costs of which, to the extent not included in the costs of
Authorized Improvements, shall be reimbursed to the Developer through credits of the City PID
Fee and, if necessary, credits of Impact Fees;
41
• Construct seven of the following 12 amenities, the swimming pool, aquatic play feature, and pool
house with restrooms to be constructed concurrently with construction of homes in Improvement
Area #1:
o Approximately 4,000 square foot swimming pool;
o Mechanical aquatic play feature;
o Pool house with restrooms;
o Playground appropriate for children ages 2-5;
o Sand volleyball court;
o Basketball court;
o Approximately 1,000 square foot putting green;
o Outdoor workout equipment along hike and bike trails;
o 20’ radius pavilion;
o Dog park; and
o Park benches, trash cans, and pet stations along the trails and in the dog park;
• Construct certain hike and bike trails to be dedicated to the City as part of the City’s park system;
and
• Create a mandatory Homeowners Association.
CFA Agreement
The City and the Developer expect to enter into the CFA Agreement, effective July 9, 2024, which will
provide, in part, for the deposit of proceeds of the Bonds and the payment of a portion of the costs of the
Improvement Area #1 Projects, and other matters related thereto. Pursuant to the CFA Agreement, the Developer is
responsible for overseeing the construction and development of the Improvement Area #1 Projects in accordance
with the Development Agreement and the CFA Agreement. The City’s obligation to pay or reimburse the Developer
for the Improvement Area #1 Project Costs is limited to the lesser of the Actual Costs or Budgeted Costs, and any
Cost Overruns (as each of such terms are defined in the CFA Agreement) are the Developer’s responsibility. See
“APPENDIX G – Form of CFA Agreement.”
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
42
Photographs of Improvement Area #1
43
44
Zoning/Permitting
The District is currently zoned as a planned development district pursuant to Ordinance No. 839-2019
adopted by the City Council on December 10, 2019 (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 3.7 miles from the District), Slayter Creek Middle School (approximately 2
miles from the District), and Anna High School (approximately 1 mile from the District).
GreatSchools.org currently rates Bryant Elementary School 5 out of 10, Slayter Creek Middle School 4 out
of 10, and Anna High School 6 out of 10. According to the Texas Education Agency (“TEA”) annual school report
cards, Bryant Elementary School and Slayter Creek Middle School were rated “C” and Anna High School was rated
“B” for the 2021-2022 school year. The categories for public schools are A, B, C, or Not Rated (used for grades of
less than 70).
It is noted that the ratings information provided for Slayter Creek Middle School is shown on the
GreatSchools.org and TEA websites as “Anna Middle School.” However, there is no school by that name in AISD
and Slayter Creek Middle School is the only middle school in AISD.
45
Environmental
A Phase One Environmental Site Assessment (the “Phase One ESA”) of the Property was completed in the
first quarter of 2024 by UES, the report of which is dated March 21, 2024 (the “Report”). According to the Report,
the Phase One ESA revealed no evidence of recognized environmental conditions in condition with the Property and
UES was of the opinion that additional environmental assessment activities at the subject property were not
warranted.
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
the Property.
Existing Mineral and Groundwater Rights, Easements and Other Third-Party Property Rights
The Developer owns all mineral rights, royalty interests, and groundwater rights to property in the District.
The Developer is not aware of any ongoing mineral rights development or exploration on or adjacent to the property
within the District. The Developer is not aware of any interest in real property (including mineral rights) owned by
the owners adjacent to the District. Certain rules and regulations of the Texas Railroad Commission may restrict the
ability of the any mineral owners to explore or develop the property due to well density, acreage, or location issues.
Although the Developer does not expect adjacent property owners to rights in or around the District, to
have a material adverse effect on the Development, the property within the District, or the ability of landowners
within the District to pay Improvement Area #1 Assessments, the Developer makes no guarantee as to such
expectation. See “BONDHOLDERS’ RISKS – Exercise of Third-Party Property Rights.”
Flood Zone
According to the Federal Emergency Management Agency (“FEMA”) Flood Insurance Rate Map
(“FIRM”), Community Panel Number 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. Approximately 16.51 acres in
the Remainder Area is currently within the 100-year flood plain.
The Developer has applied to Collin County and FEMA for a Conditional Letter of Map Revision/Letter of
Map Revision, the effect of which would be that an additional 4.27 acres in the Remainder Area will be added to the
flood plain to facilitate additional capacity for stormwater runoff. See “BONDHOLDERS’ RISKS – Flood Plain
and Severe Weather Events.”
Utilities
Water and Wastewater. The City will provide both water and wastewater service to the District. The
City’s water distribution system and wastewater collection and treatment system currently have sufficient capacity
to provide water and wastewater service to the District. See “THE CITY – Water and Wastewater.”
Other Utilities. The Developer expects additional utilities to be provided by: (1) Phone/Data - AT&T; (2)
Electric – Oncor; (3) Cable – AT&T; and (4) Natural Gas - Atmos Energy.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
46
THE DEVELOPER
The following information has been provided by the Developer. Certain of the following information is
beyond the direct knowledge of the City, the City’s 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
The Developer owns the property in the District, including Improvement Area #1. Bloomfield Properties,
Inc., is the Developer’s general partner (Bloomfield Properties, Inc. and Developer are, together, “Bloomfield”).
Bloomfield was formed in September 2004 with Don Dykstra as President. In July 2013, Sumitomo Forestry
America, Inc. (“Sumitomo”) purchased 50% of Bloomfield, and in May 2017, Sumitomo purchased an additional
15% of Bloomfield and Bloomfield became a consolidated subsidiary of Sumitomo. The remaining 35% of
Bloomfield is owned by entities controlled by Mr. Dykstra and Tim Stewart. Sumitomo was founded in 1691 and is
a publicly traded company listed on the Tokyo Stock Exchange.
Bloomfield develops the majority of the lots that it builds homes on in approximately sixty locations
throughout the Dallas – Fort Worth – Arlington Metroplex. Since its founding, Bloomfield has developed
approximately 8,000 lots and constructed approximately 12,000 homes. Bloomfield has experience developing in
neighborhoods with various types of district financing, including Paloma Creek in Little Elm, Texas; Cross Oak
Ranch in Oak Point, Texas; Woodcreek in Fate, Texas; and Grand Heritage in Lavon, Texas; and has built homes in
neighborhoods with public improvement districts, including Mira Lagos in Grand Prairie, Texas.
Bloomfield focuses on the price range between $250,000 and $600,000 and, per Residential Strategies Inc.
(“RSI”) (4th quarter 2023 report) has the fifth largest market share in the Dallas – Fort Worth – Arlington market.
For 2023, Bloomfield was ranked as the 40th largest builder in the United States per Builder Magazine Top 100
Builders. Bloomfield was also named 2021 Homebuilder of the Year by the Greater Fort Worth Builder Association
By combining development with homebuilding expertise, Bloomfield has been able to design and develop
neighborhoods directly responding to the needs of targeted buyer profiles. This strategy has translated into a
vertically integrated operation with great efficiencies and high sales volume.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
47
Examples of projects undertaken by Bloomfield include:
Name City
Number of
Lots Remaining
Total Number
of Lots
Average Home
Prices
West Crossing Anna 68 733 $543,000
Kreymer Estates Wylie 80 446 $647,000
Country Lakes Denton 170 573 $541,000
Arrowbrooke Aubrey 173 702 $590,000
Paloma Creek Little Elm 1 531 $558,000
Timberbrook Justin 1,656 1,960 $535,000
Biographies of Key Developer Parties
Don Dykstra. Don Dykstra has been President of Bloomfield Properties, Inc., since its founding in 2004
and is primarily focused on land acquisition, entitlement, and development. From 1987 through 2003, Don worked
for Pulte Home Corporation in a variety of management positions, including President of the Dallas – Fort Worth
Division. From 1981 to 1987, he worked as a certified public accountant with EY & Company with a specialty in
real estate. Don received his Bachelor of Science degree in Accounting from California Polytechnic University –
Pomona, California, in 1981.
Tim Stewart. Tim Stewart joined Bloomfield Homes in 2010 and is Vice President of Bloomfield
Properties, Inc., and President of the Developer. Tim is responsible for the homebuilding operation. From 1993 to
2010, Tim was with Pulte Home Corporation in a variety of management positions including Division President for
San Antonio and Senior Vice President for Asset Management. From 1990 to 1993 Tim was a certified public
accountant with Price Waterhouse & Co. Tim received his Bachelor of Science degree in Accounting from
Michigan State University in 1990.
Steve Corradi. Steve Corradi has been Vice President of Finance with the Developer since 2016. Prior to
joining Bloomfield, Steve held financial management positions with a number of firms in the homebuilding,
contracting, and telecommunications industries. Steve also was a certified public accountant with EY & Company
from 1981 to 1987. Steve received his Bachelor of Science in Accounting from the Wharton school of Business –
University of Pennsylvania in 1981.
Clint Vincent. Clint Vincent has been Vice President of Land with Bloomfield since 2020 and oversees all
land development activities. Clint has worked in land development for public and private companies in the Dallas –
Fort Worth market since 2000. Clint received a Bachelor of Science in Civil Engineering from Texas Tech
University in 1999.
History and Financing of the District
Property Acquisition. The Developer acquired from QJR Partnership, Ltd., approximately 160.197 acres in
January 2020 and approximately 61.905 acres in December 2021 for a combined purchase price of approximately
$8,240,000 using funds from the Revolving Credit Agreement described below.
Acquisition and Development Financing. The Developer has entered into a Fifth Amended and Restated
Credit Agreement, dated as of April 30, 2024 (the “Revolving Credit Agreement”), with a group of lenders led by
Fifth Third Bank, National Association (collectively, the “Lenders”) providing for loans in a combined maximum
amount of $440,000,000 outstanding at any time. The Revolving Credit Agreement is unsecured and matures on
April 30, 2028. As of May 29, 2024, the Developer had loans outstanding in the amount of $359,260,000, leaving
$80,740,000 available pursuant to the Revolving Credit Agreement. The Developer may repay the outstanding
portion of the Revolving Credit Agreement from any available resources, including revenue generated from sales of
the lots developed and homes constructed in the District.
The Revolving Credit Agreement imposes a number of conditions upon the Developer’s right to obtain
loans. If the Developer were unable to satisfy such conditions, release of funds from the Revolving Credit
48
Agreement and the construction of the Improvement Area #1 Projects could be delayed or prevented entirely, which
would adversely affect the security for the Bonds.
There are no liens against property within the District. The PID Act provides that the Assessment Lien is a
first and prior lien against the assessed property within Improvement Area #1 of 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.
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 Projects in the approximate
amount of $10,876,627, the costs of the Private Improvements in the approximate amount of $6,841,178, and the
expected costs of the Amenities in the approximate amount of $2,828,000. The Developer’s financing sources
include the Revolving Credit Agreement, the Earnest Money Deposit, the net proceeds of the Bonds in the
approximate amount of $9,440,000, and Developer equity. See “THE DEVELOPMENT – Amenities and Private
Improvements.”
THE ADMINISTRATOR
The following information has been provided by the Administrator. Certain of the following information is
beyond the direct knowledge of the City, the City’s 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.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
49
APPRAISAL
General. Peyco Southwest Realty, Inc. (the “Appraiser”), prepared an appraisal report for the City dated
June 10, 2024, and effective as of April 1, 2025, based upon a physical inspection of Improvement Area #1 of the
District conducted on March 21, 2024 (the “Appraisal”). The Appraisal was prepared at the request of the City and
the Underwriter. The description herein of the Appraisal is intended to be a brief summary only of the Appraisal as
it relates to Improvement Area #1 of the District. The Appraisal is attached hereto as APPENDIX H and should be
read in its entirety. The conclusions reached in the Appraisal are subject to certain assumptions, hypothetical
conditions, and qualifications, which are set forth therein. See “APPENDIX H – Appraisal.”
Value Estimates. The Appraiser estimated the prospective market value of the fee simple interests of the
Improvement Area #1 Assessed Property. See “THE IMPROVEMENT AREA #1 PROJECTS.”
The Appraisal does not reflect the value of Improvement Area #1 of the District as if sold to a single
purchaser in a single transaction. The Appraisal provides the fee simple estate values for Improvement Area #1 of
the District. See “APPENDIX H – Appraisal.”
The prospective market value estimate for the assessable property within 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 April 1, 2025, is $24,805,000 ($90,200/lot).
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. See “BONDHOLDERS’ RISKS – Use of Appraisal.”
Prospective investors should read the complete Appraisal in order to make an informed decision
regarding any contemplated purchase of the Bonds. The complete Appraisal is attached as APPENDIX H.
BONDHOLDERS’ RISKS
Before purchasing any of the Bonds, prospective investors and their professional advisors should
carefully consider all of the risk factors described below which may create possibilities wherein interest may not
be paid when due or that the Bonds may not be paid at maturity or otherwise as scheduled, or, if paid, without
premium, if applicable. The following risk factors (which are not intended to be an exhaustive listing of all
possible risks associated with an investment in the Bonds) should be carefully considered prior to purchasing any
of the Bonds. Moreover, the order of presentation of the risks summarized below does not necessarily reflect the
significance of such investment risks.
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 ASSETS 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 ASSETS
COMPRISING THE TRUST ESTATE.
50
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 Improvement Area #1 Assessments levied by the City, (b) cash flow
delays associated with the institution of foreclosure and enforcement proceedings against property within
Improvement Area #1 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 lots within Improvement Area #1 of the
District should proceed more slowly than expected and the Developer is unable to pay the Improvement Area #1
Assessments, only the value of the Improvement Area #1 Assessed Property, with improvements, will be available
for payment of the debt service on the Bonds, and such value can only be realized through the foreclosure or
expeditious liquidation of the lands within Improvement Area #1 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.
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.
51
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. 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
IMPROVEMENT AREA #1 ASSESSMENTS WHEN DUE. ANY OR ALL OF THE FOREGOING COULD
REDUCE THE WILLINGNESS AND THE ABILITY OF SUCH OWNERS TO PAY THE IMPROVEMENT
AREA #1 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 Projects
The Improvement Area #1 Projects are not complete. The cost and time for completion of the Improvement
Area #1 Projects 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 Improvement Area #1 Projects.
Completion of Homes
The cost and time for completion of homes by the Developer and 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 Rates
There can be no assurance that the Developer will be able to achieve its anticipated lot absorption rates.
Failure to achieve the estimated lot absorption rates may 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 Improvement Area #1 Assessments.
52
The Developer expects to construct homes on approximately 74% of the lots in Improvement Area #1 of
the District. Consequently, the Developer will not be able to affect or control the absorption rates of approximately
26% of the homes in Improvement Area #1 of the District.
Assessment Limitations
Improvement Area #1 Annual Installments of Improvement Area #1 Assessments are billed to property
owners in Improvement Area #1 of the District. Improvement Area #1 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, Improvement Area #1 Annual Installments established by the
Service and Assessment Plan correspond in number and proportionate amount to the number of installments and
principal amounts of Bonds maturing in each year, interest on such principal, and the Annual Collection Costs for
such year. See “ASSESSMENT PROCEDURES.” The unwillingness or inability of a property owner to pay
regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability
to make regular property tax payments and Improvement Area #1 Annual Installments of Improvement Area #1
Assessment payments in the future.
In order to pay debt service on the Bonds, it is necessary that Improvement Area #1 Annual Installments
are paid in a timely manner. Due to the lack of predictability in the collection of Improvement Area #1 Annual
Installments 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 Improvement Area #1 Annual
Installments are secured by the Assessment Lien. However, there can be no assurance that foreclosure proceedings
will occur in a timely manner so as to avoid depletion of the Reserve Account and delay in payments of debt service
on the Bonds. See “BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.”
Upon an ad valorem tax lien foreclosure event of a property within Improvement Area #1 of the District,
any Improvement Area #1 Assessment that is delinquent will be foreclosed upon in the same manner as the ad
valorem tax lien (assuming all necessary conditions and procedures for foreclosure are duly satisfied). To the extent
that a foreclosure sale results in insufficient funds to pay in full both the delinquent ad valorem taxes and the
delinquent Improvement Area #1 Assessments, the liens securing such delinquent ad valorem taxes and delinquent
Improvement Area #1 Assessments would likely be extinguished. Any remaining unpaid balance of the delinquent
Improvement Area #1 Assessments would then be an unsecured personal liability of the original property owner.
Based upon the language of Texas Local Government Code, §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
State law whether or not Pre-existing Homestead Rights would prevent the Assessment Lien from attaching to such
homestead property or instead cause the Assessment Lien to attach, but remain subject to, the Pre-existing
Homestead Rights.
Under State law, in order to establish homestead rights, the claimant must show a combination of both
overt acts of homestead usage and intention on the part of the owner to claim the land as a homestead. Mere
ownership of the property alone is insufficient and the intent to use the property as a homestead must be a present
one, not an intention to make the property a homestead at some indefinite time in the future. As of the date of
adoption of the Assessment Ordinance, no such homestead rights will have been claimed. Furthermore, the
Developer will own 100% of the property within Improvement Area #1 of the District at the time the Improvement
Area #1 Assessments are levied and is not eligible to claim homestead rights. Consequently, there are and can be no
53
homestead rights on the Improvement Area #1 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 Improvement Area #1 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 Improvement Area #1
Assessments levied against such parcels may result in the inability of the City to make full or punctual payments of
debt service on the Bonds.
THE IMPROVEMENT AREA #1 ASSESSMENTS WILL CONSTITUTE A FIRST AND PRIOR LIEN
AGAINST THE IMPROVEMENT AREA #1 ASSESSED PROPERTY, SUPERIOR TO ALL OTHER LIENS
AND CLAIMS EXCEPT LIENS AND CLAIMS FOR STATE, COUNTY, SCHOOL DISTRICT, OR
MUNICIPALITY AD VALOREM TAXES AND WILL BE PERSONAL OBLIGATIONS OF AND CHARGES
AGAINST THE OWNERS OF PROPERTY LOCATED WITHIN IMPROVEMENT AREA #1 OF THE
DISTRICT.
Bankruptcy
The payment of Improvement Area #1 Assessments and the ability of the City to foreclose on the lien of a
delinquent unpaid Improvement Area #1 Assessment may be limited by bankruptcy, insolvency, or other laws
generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. Although bankruptcy
proceedings would not cause the Improvement Area #1 Assessments to become extinguished, bankruptcy of a
property owner in all likelihood would result in a delay in prosecuting foreclosure proceedings. Such a delay would
increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds, and the
possibility that delinquent Improvement Area #1 Assessments might not be paid in full.
Direct and Overlapping Indebtedness, Assessments and Taxes
The ability of an owner of property within Improvement Area #1 of the District to pay the Improvement
Area #1 Assessments could be affected by the existence of other taxes and assessments imposed upon the property.
Public entities whose boundaries overlap those of Improvement Area #1 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 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 Improvement Area #1 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 Improvement Area
#1 Assessments when due could result in the rapid, total depletion of the accounts in 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
54
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
any 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 a parcel of a substance not presently classified as hazardous but
which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a
hazardous substance but from the method of handling it. The actual occurrence of any of these possibilities could
significantly negatively affect the value of a parcel that is realizable upon a foreclosure.
See “THE DEVELOPMENT – Environmental” for discussion of the Phase One ESA performed on
property within the District.
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 the public improvements,
land use, zoning, and other matters. Failure to meet any such regulations or obtain any such approvals in a timely
manner could delay or adversely affect development in 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
55
Improvement Area #1 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 – Form of 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.
Flood Plain and Severe Weather Events
According to the FEMA 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.
Approximately 16.51 acres in the Remainder Area is currently within the 100-year flood plain. The Developer has
applied to Collin County and FEMA for a Conditional Letter of Map Revision/Letter of Map Revision, the effect of
which would be that an additional 4.27 acres in the Remainder Area will be added to the flood plain to facilitate
additional capacity for stormwater runoff.
FEMA will from time to time revise its FIRMs. None of the City, the Underwriter, or the Developer make
any representation as to whether FEMA may revise its FIRMs, whether such revisions may result in homes that are
currently outside of the 500-year flood plain from being included in the 500-year or 100-year flood plain in the
future, or whether extreme flooding events may occur more often than assumed in creating the rate maps.
All of the State, including the City, is subject to extreme weather events that can cause loss of life and
damage to property through strong winds, flooding, heavy rains and freezes, including events similar to the severe
winter storm that the continental United States experienced in February 2021, which resulted in disruptions in the
Electric Reliability Council of Texas power grid and prolonged blackouts throughout the State. It is impossible to
predict whether similar events will occur in the future and the impact they may have on the City, including land
within Improvement 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,” all of the mineral rights, royalty interests, and easement reservations located
within the District are owned by the Developer.
The Developer does not expect the existence or exercise of any third-party rights in or around the District
to have a material adverse effect on the Development, the property within Improvement Area #1 of the District, or
the ability of landowners within Improvement Area #1 of the District to pay Improvement Area #1 Assessments.
However, none of the City, the 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,
56
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 Improvement Area #1 Assessments, or
delinquent ad valorem taxes, against such property owner.
In addition, in 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex.
2006) (“Tooke”) that a waiver of sovereign immunity must be provided for by statute in “clear and unambiguous”
language. In so ruling, the Court declared that statutory language such as “sue and be sued,” in and of itself, did not
constitute a clear and unambiguous waiver of sovereign immunity. In Tooke, the Court noted the enactment in 2005
of sections 271.151-.160, Texas Local Government Code (the “Local Government Immunity Waiver Act”), which,
according to the Court, waives “immunity from suit for contract claims against most local governmental entities in
certain circumstances.” The Local Government Immunity Waiver Act covers cities and relates to contracts entered
into by cities for providing goods or services to cities.
In Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (“Wasson”), the Texas
Supreme Court (the “Court”) addressed whether the distinction between governmental and proprietary acts (as found
in tort-based causes of action) applies to breach of contract claims against municipalities. The Court analyzed the
rationale behind the Proprietary-Governmental Dichotomy to determine that “a city’s proprietary functions are not
done pursuant to the ‘will of the people’” and protecting such municipalities “via the [S]tate’s immunity is not an
efficient way to ensure efficient allocation of [S]tate resources.” While the Court recognized that the distinction
between governmental and proprietary functions is not clear, the Wasson opinion held that the Proprietary-
Governmental Dichotomy applies in a contract-claims context. The Court reviewed Wasson for a second time and
issued an opinion on October 5, 2018, clarifying that to determine whether governmental immunity applies to a
breach of contract claim, the proper inquiry is whether the municipality was engaged in a governmental or
proprietary function when it entered into the contract, not at the time of the alleged breach. Therefore, in regard to
municipal contract cases (as in tort claims), it is incumbent on the courts to determine whether a function was
proprietary or governmental based upon the statutory and common law guidance at the time of inception of the
contractual relationship. Texas jurisprudence has generally held that proprietary functions are those conducted by a
city in its private capacity, for the benefit only of those within its corporate limits, and not as an arm of the
government or under authority or for the benefit of the State; these are usually activities that can be, and often are,
provided by private persons, and therefore are not done as a branch of the State, and do not implicate the state’s
immunity since they are not performed under the authority, or for the benefit, of the State as sovereign.
Notwithstanding the foregoing new case law issued by the Court, such sovereign immunity issues have not been
adjudicated in relation to bond matters (specifically, in regard to the issuance of municipal debt). Each situation will
be prospectively evaluated based on the facts and circumstances surrounding the contract in question to determine if
a suit, and subsequently, a judgment, is justiciable against a municipality.
57
The City is not aware of any State court construing the Local Government Immunity Waiver Act in the
context of whether contractual undertakings of local governments that relate to their borrowing powers are contracts
covered by such act. Because it is unclear whether the Texas legislature has effectively waived the City’s sovereign
immunity from a suit for money damages in the absence of City action, the Trustee or the owners of the Bonds may
not be able to bring such a suit against the City for breach of the Bonds or the Indenture covenants. As noted above,
the Indenture provides that owners of the Bonds may exercise the remedy of mandamus to enforce the obligations of
the City under the Indenture. Neither the remedy of mandamus nor any other type of injunctive relief was at issue in
Tooke, and it is unclear whether Tooke will be construed to have any effect with respect to the exercise of
mandamus, as such remedy has been interpreted by State courts. In general, State courts have held that a writ of
mandamus may be issued to require public officials to perform ministerial acts that clearly pertain to their duties.
State courts have held that a ministerial act is defined as a legal duty that is prescribed and defined with a precision
and certainty that leaves nothing to the exercise of discretion or judgment, though mandamus is not available to
enforce purely contractual duties. However, mandamus may be used to require a public officer to perform legally
imposed ministerial duties necessary for the performance of a valid contract to which the State or a political
subdivision of the State is a party (including the payment of moneys due under a contract).
Judicial Foreclosures
Judicial foreclosure proceedings are not mandatory; however, the City has covenanted 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 Improvement
Area #1 Assessments may be adversely affected by the effects of market conditions on the foreclosure sale price,
and by other factors, including taxpayers’ right to redeem property within two years of foreclosure for residential
and agricultural use property and six months for other property, and by a time-consuming and expensive collection
procedure.
No Acceleration
The Indenture expressly denies the right of acceleration in the event of a payment default or other default
under the terms of the Bonds or the Indenture.
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 Improvement Area #1 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.
58
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 and date of the Appraisal.
The intended use and user of the Appraisal are specifically identified in the Appraisal as agreed upon in the
contract for services and/or reliance language found in the Appraisal. The Appraiser has consented to the use of the
Appraisal in this Limited Offering Memorandum in connection with the issuance of the Bonds. No other use or user
of the Appraisal is permitted by any other party for any other purpose.
Bankruptcy Limitation to Bondholders’ Rights
The enforceability of the rights and remedies of the owners of the Bonds may be limited by laws relating to
bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political
subdivisions such as the City. The City is authorized under State law to voluntarily proceed under Chapter 9 of the
Federal Bankruptcy Code, 11 U.S.C. 901-946 (“Chapter 9”). The City may proceed under Chapter 9 if it (1) is
generally not paying its debts, or unable to meet its debts, as they become due, (2) desires to effect a plan to adjust
such debts, and (3) has either obtained the agreement of or negotiated in good faith with its creditors, is unable to
negotiate with its creditors because negotiation is impracticable, or reasonably believes that a creditor may attempt
to obtain a preferential transfer.
If the City decides in the future to proceed voluntarily under Chapter 9, the City would develop and file a
plan for the adjustment of its debts, and the Bankruptcy Court would confirm the plan if (1) the plan complies with
the applicable provisions of Chapter 9, (2) all payments to be made in connection with the plan are fully disclosed
and reasonable, (3) the City is not prohibited by law from taking any action necessary to carry out the plan, (4)
administrative expenses are paid in full, (5) all regulatory or electoral approvals required under State law are
obtained and (6) the plan is in the best interests of creditors and is feasible. The rights and remedies of the owners
of the Bonds would be adjusted in accordance with the confirmed plan of adjustment of the City’s debt.
Management and Ownership
The management and ownership of the Developer and related or affiliated property owners could change in
the future. Purchasers of the Bonds should not rely on the management experience of such entities. There are no
assurances that such entities will not sell the subject property or that officers will not resign or be replaced. In such
circumstances, a new developer, homebuilder, or new officers in management positions may not have comparable
experience in projects comparable to the Development.
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
59
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.
General Risks of Real Estate Investment and Development
The Developer may, in certain limited circumstances, have the right to modify or change its plan for
development of the District, 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 Developer and the Homebuilder to sell single-family
residential homes within Improvement Area #1 of the District may be affected by unforeseen changes in 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 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. 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
60
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.
Improvement Area #1 of the District cannot be completed without the Developer obtaining a variety of
governmental approvals and permits, some of which have already been obtained. Certain permits are necessary to
initiate construction of the Improvement Area #1 Projects and to allow the occupancy of residences and to satisfy
conditions included in the approvals and permits. There can be no assurance that all of these permits and approvals
can be obtained or that the conditions to the approvals and permits can be fulfilled. The failure to obtain any of the
required approvals or fulfill any one of the conditions could cause materially adverse financial results for the
Developer.
A slowdown of the development process and the related absorption rate within 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, the Homebuilder, and any subsequent owners to pay the
Improvement Area #1 Assessments when due. Any or all of the foregoing could reduce the willingness and ability
of such owners to pay the Improvement Area #1 Assessments and could greatly reduce the value of the property
within Improvement Area #1 of the District in the event such property has to be foreclosed. If Improvement Area #1
Annual Installments of Improvement Area #1 Assessments are not timely paid and there are insufficient funds in the
accounts of the Reserve Fund, a nonpayment could result in a payment default under the Indenture.
Risks Related to the Current Residential Real Estate Market
The real estate market is currently experiencing a slowing of new home sales and new home closings due in
part to rising inflation and mortgage interest rates. Downturns in the real estate market and other factors beyond the
control of the Developer, including general economic conditions, may impact the timing of 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 Recent Increase in Costs of Building Materials
As a result of the Pandemic, low supply and high 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
Projects. The Developer expects to finance a portion of the costs of the Improvement Area #1 Projects from
proceeds of the Bonds. If the Actual Costs of the Improvement Area #1 Projects 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 Projects or pay the Improvement Area #1 Assessments when
due. If the costs of material continue to increase, it may affect the ability of the Developer and 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
61
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 any financial institution that is placed into receivership by the FDIC may be unable to access
undrawn amounts.
Competition
The housing industry in the Dallas-Fort Worth area is very competitive, and none of the Developer, 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 expectations. The successful
development of the land within the District, the success of the Development, and the sale of residential units therein,
once such homes are built, may be affected by unforeseen changes in general economic conditions, fluctuations in
the real estate market, and other factors beyond the control of the Developer. The competitive position of the
Developer in the sale of developed lots or of any 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 March 2024.
Project Name Developer
Approximate
distance
from
District
Year
Started
Number of
Single-Family
Units
Approximate
Number of Units
Remaining
Home
Prices
Villages of
Hurricane Creek
Centurion
American 1.5 miles 2020 1,794 1,200 $379,950+
Anna Towne
Square Windsor/Pulte 3 miles 2015 1,915 600 $367,990+
Anna Ranch Brightland 3 miles 2023 556 500 $384,990+
AnaCapri Megatel < 1 mile 2022 1,239 1,000 $389,000+
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 supply of 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
The Developer will own all of the Improvement Area #1 Assessed Property in Improvement Area #1 of the
District until homes begin to be sold to the Homebuilder or homebuyers. As owner all of the Improvement Area #1
Assessed Property on the date the first Improvement Area #1 Annual Installments become due on January 31, 2025,
and most of the Improvement Area #1 Assessed Property on the date the second Improvement Area #1 Annual
Installments become due on January 31, 2026, the Developer will have the obligation for payment of the majority of
such Improvement Area #1 Annual Installments. The ability of the Developer to make full and timely payment of
62
the Improvement Area #1 Assessments will directly affect the ability of the City to meet its debt service obligations
with respect to the Bonds.
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
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.
63
Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public
offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with
respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount
allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set
forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior
to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue
Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to
the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross
income.
Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the
stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date
before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and
the accrued amount is added to an initial owner’s basis for such Original Issue Discount Bond for purposes of
determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition
thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the
amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on
the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual
period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount
Bond.
The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of
Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be
determined according to rules which differ from those described above. All owners of Original Issue Discount
Bonds 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.
64
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the
disposition of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a “market discount”
and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment
applies to “market discount bonds” to the extent such gain does not exceed the accrued market discount of such
bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount bond” is
one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or,
in the case of a bond issued at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued
original issue discount). The “accrued market discount” is the amount which bears the same ratio to the market
discount as the number of days during which the holder holds the obligation bears to the number of days between
the acquisition date and the final maturity date.
State, Local And Foreign Taxes
Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership
or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax
advisors regarding the tax consequences unique to investors who are not United States persons.
Information Reporting and Backup Withholding
Subject to certain exceptions, information reports describing interest income, including original issue
discount, with respect to the Bonds will be sent to each registered holder and to the Internal Revenue Service.
Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a
recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer
identification number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the
backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient’s federal
income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of
foreign investors, certifications as to foreign status and other matters may be required to be provided by partners and
beneficiaries thereof.
Future and Proposed Legislation
Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or
state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could
affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions
and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted
cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the
foregoing matters.
LEGAL MATTERS
Legal Proceedings
Delivery of the Bonds will be accompanied by (i) the unqualified approving legal opinion of the Attorney
General to the effect that the Bonds are valid and legally binding obligations of the City under the Constitution and
laws of the State, payable from the Trust Estate and, (ii) based upon their examination of a transcript of certified
proceedings relating to the issuance and sale of the Bonds, the legal opinion of Bond Counsel, to a like effect.
McCall, Parkhurst & Horton L.L.P., serves as Bond Counsel to the City. Orrick, Herrington and Sutcliffe
LLP serves as Underwriter’s Counsel. The legal fees paid to Bond Counsel and Underwriter’s Counsel are
contingent upon the sale and delivery of the Bonds.
Legal Opinions
The City will furnish the Underwriter a transcript of certain certified proceedings incident to the
authorization and issuance of the Bonds. Such transcript will include a certified copy of the approving opinion of the
Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State, to
65
the effect that the Bonds are valid and binding special obligations of the City. The City will also furnish the legal
opinion of Bond Counsel, to the effect that, based upon an examination of such transcript, the Bonds are valid and
binding special obligations of the City under the Constitution and laws of the State. The legal opinion of Bond
Counsel will further state that the Bonds, including principal thereof and interest thereon, are payable from and
secured by a first lien on, security interest in, and pledge of the Trust Estate. Bond Counsel will also provide a legal
opinion to the effect that interest on the Bonds will be excludable from gross income for federal income tax purposes
under Section 103(a) of the Code, subject to the matters described above under the caption “TAX MATTERS,”
including the alternative minimum tax consequences for corporations. A copy of the opinion of Bond Counsel is
attached hereto as “APPENDIX D – FORM OF OPINION OF BOND COUNSEL.”
Except as noted below, Bond Counsel did not take part in the preparation of the Limited Offering
Memorandum, and such firm has not assumed any responsibility with respect thereto or undertaken independently to
verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed
the information describing the Bonds in the Limited Offering Memorandum under the captions or subcaptions
“PLAN OF FINANCE – The Bonds,” “DESCRIPTION OF THE BONDS,” “SECURITY FOR THE BONDS”
(except for the last paragraph under the subcaption “General”), “ASSESSMENT PROCEDURES” (except for the
subcaptions “Improvement Area #1 Assessment Methodology” and “Improvement Area #1 Assessment Amounts”),
“THE DISTRICT,” “TAX MATTERS,” “LEGAL MATTERS – Legal Proceedings” (first paragraph only),
“LEGAL MATTERS – Legal Opinions,” “SUITABILITY FOR INVESTMENT,” “CONTINUING DISCLOSURE
– The City,” “REGISTRATION AND QUALIFICATION OF BONDS FOR SALE,” “LEGAL INVESTMENTS
AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS” and APPENDIX B and such firm is of the
opinion that the information relating to the Bonds, the Bond Ordinance, the Assessment Ordinance, and the
Indenture contained therein fairly and accurately describes the laws and legal issues addressed therein and, with
respect to the Bonds, such information conforms to the Bond Ordinance, the Assessment Ordinance and the
Indenture.
The various legal opinions to be delivered concurrently with the delivery of the Bonds express the
professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In
rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional
judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the
rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction.
Litigation – The City
At the time of delivery and payment for the Bonds, the City will certify that, except as disclosed herein,
there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory
agency, public board or body, pending or overtly threatened against the City affecting the existence of the District,
or seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof, in
accordance with the Indenture, or the collection or application of Improvement Area #1 Assessments securing the
Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Assessment Ordinance,
the Indenture, any action of the City contemplated by any of the said documents, or the collection or application of
the Pledged Revenues, or in any way contesting the completeness or accuracy of this Limited Offering
Memorandum or any amendment or supplement thereto, or contesting the powers of the City or its authority with
respect to the Bonds or any action of the City contemplated by any documents relating to the Bonds.
Litigation – The Developer
At the time of delivery and payment for the Bonds, the Developer will certify that, except as disclosed
herein, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
regulatory body, public board or body pending, or, to the best knowledge of the Developer, threatened against or
affecting the Developer wherein an unfavorable decision, ruling or finding would have a material adverse effect on
the financial condition or operations of the Developer or its officers or would adversely affect (1) the transactions
contemplated by, or the validity or enforceability of, the Bonds, the Indenture, the Bond Ordinance, the Service and
Assessment Plan, the Development Agreement, or the Bond Purchase Agreement, or otherwise described in this
Limited Offering Memorandum, or (2) the tax-exempt status of interest on the Bonds (individually or in the
aggregate, a “Material Adverse Effect”). Principals of the Developer and their affiliated entities may in the future be
66
parties to pending and/or threatened litigation related to their commercial and real estate development activities.
Such litigation occurs in the ordinary course of business and is not expected to have a Material Adverse Effect.
SUITABILITY FOR INVESTMENT
Investment in the Bonds poses certain economic risks. See “BONDHOLDERS’ RISKS”. The Bonds are
not rated by any nationally recognized municipal securities rating service. No dealer, broker, salesman or other
person has been authorized by the City or the Underwriter to give any information or make any representations,
other than those contained in this Limited Offering Memorandum, and, if given or made, such other information or
representations must not be relied upon as having been authorized by either of the foregoing. Additional
information will be made available to each prospective investor, including the benefit of a site visit to the City and
the opportunity to ask questions of the Developer, as such prospective investor deems necessary in order to make an
informed decision with respect to the purchase of the Bonds.
ENFORCEABILITY OF REMEDIES
The remedies available to the owners of the Bonds upon an event of default under the Indenture are in
many respects dependent upon judicial actions, which are often subject to discretion and delay. See
“BONDHOLDERS’ RISKS – Bondholders’ Remedies and Bankruptcy.” Under existing constitutional and statutory
law and judicial decisions, including the federal bankruptcy code, the remedies specified by the Indenture and the
Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with
the delivery of the Bonds will be qualified, as to the enforceability of the remedies provided in the various legal
instruments, by limitations imposed by governmental immunity, bankruptcy, reorganization, insolvency or other
similar laws affecting the rights of creditors and enacted before or after such delivery.
NO RATING
No application for a rating on the Bonds has been made to any rating agency, nor is there any reason to
believe that the City would have been successful in obtaining an investment grade rating for the Bonds had
application been made.
CONTINUING DISCLOSURE
The City
Pursuant to Rule 15c2-12 of the United States Securities and Exchange Commission (the “Rule”), the City,
the Administrator, and Regions Bank (in such capacity, the “Dissemination Agent”) will enter into a Continuing
Disclosure Agreement of Issuer (the “Disclosure Agreement of Issuer”) for the benefit of the Owners of the Bonds
(including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure
Agreement of Issuer, certain financial information and operating data relating to the City (collectively, the “City
Reports”). The specific nature of the information to be contained in the City Reports is set forth in “APPENDIX E-
1 – Form of Disclosure Agreement of Issuer.” Under certain circumstances, the failure of the City to comply with
its obligations under the Disclosure Agreement of Issuer constitutes an event of default thereunder. Such a default
will not constitute an event of default under the Indenture, but such event of default under the Disclosure Agreement
of Issuer would allow the Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an
action for specific performance.
The City has agreed to update information and to provide notices of certain specified events only as
provided in the Disclosure Agreement of Issuer. The City has not agreed to provide other information that may be
relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed
to update any information that is provided in this Limited Offering Memorandum, except as provided in the
Disclosure Agreement of Issuer. The City makes no representation or warranty concerning such information or
concerning its usefulness to a decision to invest in or sell the Bonds at any future date. The City disclaims any
contractual or tort liability for damages resulting in whole or in part from any breach of the Disclosure Agreement of
Issuer or from any statement made pursuant to the Disclosure Agreement of Issuer.
67
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 last 5 years.
The Developer
The Developer, the Administrator, and the Dissemination Agent have entered into a Continuing Disclosure
Agreement of Developer (the “Disclosure Agreement of Developer”) for the benefit of the Owners of the Bonds
(including owners of beneficial interests in the Bonds), to provide, by certain dates prescribed in the Disclosure
Agreement of Developer, certain information regarding the Development and the Improvement Area #1 Projects
(collectively, the “Developer Reports”). The specific nature of the information to be contained in the Developer
Reports is set forth in “APPENDIX E-2 – Form of Disclosure Agreement of Developer.” Under certain
circumstances, the failure of the Developer or the Administrator to comply with its obligations under the Disclosure
Agreement of Developer constitutes an event of default thereunder. Such a default will not constitute an event of
default under the Indenture, but such event of default under the Disclosure Agreement of Developer would allow the
Owners of the Bonds (including owners of beneficial interests in the Bonds) to bring an action for specific
performance. The Disclosure Agreement of Developer is a voluntary agreement made for the benefit of the holders
of the Bonds and is not entered into pursuant to the Rule.
The Developer has agreed to provide (i) certain updated information to the Administrator, which consultant
will prepare and provide such updated information in report form and (ii) notices of certain specified events, only as
provided in the Disclosure Agreement of Developer. The Developer has not agreed to provide other information
that may be relevant or material to a complete presentation of its financial results of operations, condition, or
prospects or agreed to update any information that is provided in this Limited Offering Memorandum, except as
provided in the Disclosure Agreement of Developer. The Developer makes no representation or warranty
concerning such information or concerning its usefulness to a decision to invest in or sell the Bonds at any future
date. The Developer disclaims any contractual or tort liability for damages resulting in whole or in part from any
breach of the Disclosure Agreement of Developer or from any statement made pursuant to the Disclosure
Agreement of Developer.
The Developer’s Compliance with Prior Undertakings
During the last five years, the Developer has complied in all material respects with the continuing
disclosure agreement made by it in accordance with the Rule.
UNDERWRITING
FMSbonds, Inc. (the “Underwriter”) has agreed to purchase the Bonds from the City at a purchase price of
$ (the par amount of the Bonds, less an underwriting discount of $ ). The Underwriter’s obligations
are subject to certain conditions precedent and if obligated to purchase any of the Bonds the Underwriter will be
obligated to purchase all of the Bonds. The Bonds may be offered and sold by the Underwriter at prices lower than
the initial offering prices stated on the inside cover page hereof, and such initial offering prices may be changed
from time to time by the Underwriter.
REGISTRATION AND QUALIFICATION OF BONDS FOR SALE
The sale of the Bonds has not been registered under the federal Securities Act of 1933, as amended, in
reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under
the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been
qualified under the securities acts of any other jurisdiction. The City assumes no responsibility for qualification of
the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged,
hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other
disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any
exemption from securities registration provisions.
68
LEGAL INVESTMENT AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
The PID Act and Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas
Government Code, as amended) provide that the Bonds are negotiable instruments and investment securities
governed by Chapter 8, Texas Business and Commerce Code, as amended, and are legal and authorized investments
for insurance companies, fiduciaries, trustees, or for the sinking funds of municipalities or other political
subdivisions or public agencies of the State. With respect to investment in the Bonds by municipalities or other
political subdivisions or public agencies of the State, the PFIA requires that the Bonds be assigned a rating of at least
“A” or its equivalent as to investment quality by a national rating agency. See “NO RATING” above. In addition,
the PID Act and various provisions of the Texas Finance Code provide that, subject to a prudent investor standard,
the Bonds are legal investments for state banks, savings banks, trust companies with capital of one million dollars or
more, and savings and loan associations. The Bonds are eligible to secure deposits to the extent of their market
value. No review by the City has been made of the laws in other states to determine whether the Bonds are legal
investments for various institutions in those states. No representation is made that the Bonds will be acceptable to
public entities to secure their deposits or acceptable to such institutions for investment purposes.
The City made no investigation of other laws, rules, regulations or investment criteria which might apply to
such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or
limit the authority of such institutions or entities to purchase or invest in the Bonds for such purposes.
INVESTMENTS
The City invests its funds in investments authorized by Texas law in accordance with investment policies
approved by the City Council. Both Texas law and the City’s investment policies are subject to change.
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
69
is either secured by (a) obligations that are described in clauses (1) through (6) above, (b) irrevocable letters of
credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm
at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (6) above,
clauses (12) through (14) below, or an authorized investment pool; (ii) securities held as collateral under a loan are
pledged to the City, held in the City’s name and deposited at the time the investment is made with the City or a third
party designated by the City; (iii) a loan made under the program is placed through either a primary government
securities dealer or a financial institution doing business in the State; and (iv) the agreement to lend securities has a
term of one year or less, (11) certain bankers’ acceptances with the remaining term of 270 days or less, if the short-
term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least one
nationally recognized credit rating agency, (12) commercial paper with a stated maturity of 270 days or less that is
rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one
nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a
U.S. or state bank, (13) no-load money market mutual funds registered with and regulated by the Securities and
Exchange Commission that comply with federal Securities and Exchange Commission Rule 2a-7, and (14) no-load
mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of
less than two years, and have a duration of one year or more and are invested exclusively in obligations described in
this paragraph or have a duration of less than one year and the investment portfolio is limited to investment grade
securities, excluding asset-backed securities. In addition, bond proceeds may be invested in guaranteed investment
contracts that have a defined termination date and are secured by obligations, including letters of credit, of the
United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds
invested under such contract, other than the prohibited obligations described in the next succeeding paragraph.
The City may invest in such obligations directly or through government investment pools that invest solely
in such obligations provided that the pools are rated no lower than “AAA” or “AAA-m” or an equivalent by at least
one nationally recognized rating service. The City may also contract with an investment management firm
registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities
Board to 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
70
formally adopted “Investment Strategy Statement” that specifically addresses each fund’s investment. Each
Investment Strategy Statement will describe its objectives concerning (1) suitability of investment type,
(2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the
portfolio, and (6) yield.
Under Texas law, City investments must be made “with judgment and care, under prevailing
circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the
person’s own affairs, not for speculation, but for investment, considering the probable safety of capital and the
probable income to be derived.” At least quarterly the investment officers of the City shall submit an investment
report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed
the report, (3) the beginning market value, the ending market value and the fully accrued interest for the reporting
period of each pooled fund group, (4) the book value and market value of each separately listed asset and fund type
invested at the beginning and end of the reporting period by the type of asset and fund type invested, (5) the maturity
date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual
investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment
strategy statements and (b) state law. No person may invest City funds without express written authority from the
City Council.
Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies;
(2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment
strategies and records any changes made to either its investment policy or investment strategy in the respective rule,
order, ordinance or resolution; (3) require any investment officers’ with personal business relationships or relatives
with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics
Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City
to: (a) receive and review the City’s investment policy, (b) acknowledge that reasonable controls and procedures
have been implemented to preclude investment transactions conducted between the City and the business
organization that are not authorized by the City’s investment policy (except to the extent that this authorization is
dependent on an analysis of the makeup of the City’s entire portfolio or requires an interpretation of subjective
investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual
audit of the management 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.
71
Additional information about the Trustee may be found at its website at www.regions.com. Neither the
information on the Trustee’s website, nor any links from that website, is a part of this Limited Offering
Memorandum, nor should any such information be relied upon to make investment decisions regarding the Bonds.
SOURCES OF INFORMATION
General
The information contained in this Limited Offering Memorandum has been obtained primarily from the
City’s records, the Developer and its representatives and other sources believed to be reliable. In accordance with
its responsibilities under the federal securities law, the Underwriter has reviewed the information in this Limited
Offering Memorandum in accordance with, and as part of, its responsibilities to investors under the federal securities
laws as applied to the facts and circumstances of the transaction, but the Underwriter does not guarantee the
accuracy or completeness of such information. The information and expressions of opinion herein are subject to
change without notice, and neither the delivery of this Limited Offering Memorandum or any sale hereunder will
create any implication that there has been no change in the financial condition or operations of the City or the
Developer described herein since the date hereof. This Limited Offering Memorandum contains, in part, estimates
and matters of opinion that are not intended as statements of fact, and no representation or warranty is made as to the
correctness of such estimates and opinions or that they will be realized. The summaries of the statutes, resolutions,
ordinances, indentures and engineering and other related reports set forth herein are included subject to all of the
provisions of such documents. These summaries do not purport to be complete statements of such provisions and
reference is made to such documents for further information.
Source of Certain Information
The information contained in this Limited Offering Memorandum relating to the description of the
Improvement Area #1 Projects, the Development, and the Developer generally and, in particular, the information
included in the sections captioned “PLAN OF FINANCE – Overview,” “– Development Plan,” and “– Developer as
Homebuilder,” “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), “LEGAL MATTERS – Litigation – The Developer,” APPENDIX F, and APPENDIX G have been
provided by the Developer.
Experts
The information regarding the Service and Assessment Plan in this Limited Offering Memorandum has
been provided by P3Works, LLC and has been included in reliance upon the authority of such firm as experts in the
field of development planning and finance.
The information regarding the Appraisal in this Limited Offering Memorandum has been provided by the
Appraiser, and has been included in reliance upon the authority of such firm as experts in the field of the appraisal of
real property.
Updating of Limited Offering Memorandum
If, subsequent to the date of the Limited Offering Memorandum, the City learns, through the ordinary
course of business and without undertaking any investigation or examination for such purposes, or is notified by the
Underwriter, of any adverse event which causes the Limited Offering Memorandum to be materially misleading, and
unless the Underwriter elects to terminate its obligation to purchase the Bonds, the City will promptly prepare and
supply to the Underwriter an appropriate amendment or supplement to the Limited Offering Memorandum
satisfactory to the Underwriter; provided, however, that the obligation of the City to so amend or supplement the
Limited Offering Memorandum will terminate when the City delivers the Bonds to the Underwriter, unless the
Underwriter notifies the City on or before such date that less than all of the Bonds have been sold to ultimate
customers; in which case the City’s obligations hereunder will extend for an additional period of time (but not more
than 90 days after the date the City delivers the Bonds) until all of the Bonds have been sold to ultimate customers.
72
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,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS DESCRIBED HEREIN TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-
LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO
THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS, OR EVENTS,
CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER
THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE” HEREIN.
AUTHORIZATION AND APPROVAL
The City Council has approved by resolution this Preliminary Limited Offering Memorandum and the City
Council has authorized this Preliminary Limited Offering Memorandum to be used by the Underwriter in connection
with the marketing and sale of the Bonds. In the Bond Ordinance, the City Council will approve the form and
content of the final Limited Offering Memorandum.
THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
APPENDIX A – Page 1
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY AND SURROUNDING AREAS
The following information has been derived from various sources, including the U.S. Census and the
Municipal Advisory Council of Texas. While such sources are believed to be reliable, no representation is made as
to the accuracy thereof.
Location and Population
The City is located in north central Collin County, 40 miles north of Dallas and 12 miles northwest of the
City of McKinney. Access to the City is provided by State Highway 121, State Highway 5, US-75, and Farm Road
455. The City covers approximately 15 square miles. Some of the services that the City provides are public safety
(police and fire protection), streets, water and sanitary sewer utilities, planning and zoning, and general
administrative services. The 2020 Census population for the City was 16,896, while the current estimated population
is 23,558.
Historical Employment in Collin County
Average Annual
2024 (1) 2023 2022 2021 2020
Civilian Labor Force 654,007 644,705 625,800 600,186 578,797
Total Employed 632,478 622,134 605,672 574,037 542,541
Total Unemployed 21,529 22,571 20,128 26,149 36,256
Unemployment Rate 3.3% 3.5% 3.2% 4.4% 6.3%
_____________
(1) Data through April 2024.
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
APPENDIX A – Page 2
Surrounding Economic Activity
The major employers of certain municipalities in the Dallas–Fort Worth–Arlington metropolitan area are
set forth in the table below.
Source: Municpal Advisory Council of Texas
City of Mesquite (2022) City of Frisco (2022) City of Plano (2023)
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 8,088 JP Morgan Chase 9,500
Town East Mall 2,750 T-Mobile USA 1,800 Capital One Finance 7,542
United Parcel Service Inc. 2,300 City of Frisco 1,688 Toyota Motor North America, Inc. 4,573
Baker Triangle 1,900 Keurig Dr. Pepper Inc. 1,100 Bank of America 4,500
City of Mesquite 1,251 Mario Sinacola & Sons
Excavating 935 At&T Foundry 2,500
Eastfield College 950 Conifer 903 Ericsson 2,406
Dallas Regional Medical Center 900 Baylor Medical Center 663 Liberty Mutual Insurance Co. 2,385
Wal-Mart Supercenter 850 Baylor Scott White/Centennial
Hosp. 466 Medical City Plano 2,332
Pepsi Beverages Co. 800 IKEA Frisco 423 USAA 2,092
Ashley Furniture 785 UT Southwestern/Texas Health
Hosp. 300 Fannie Mae 2,000
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 (2023)
Approximately 32 miles from the City
Employer Employees
UT Southwestern Medical Ctr. 23,817
Dallas ISD 23,271
City of Dallas 16,000
Southwest Airlines Co. 14,618
Parkland Health & Hosp Sys 13,000
Medical City Dallas 10,974
Dallas County Comm College 8,230
Texas Instruments Inc. 7,722
Dallas County 6,500
Methodist Dallas Medical
Center 6,452
THIS PAGE IS LEFT BLANK INTENTIONALLY.
APPENDIX B
FORM OF INDENTURE
THIS PAGE IS LEFT BLANK INTENTIONALLY.
APPENDIX C
FORM OF 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 CFA AGREEMENT
THIS PAGE IS LEFT BLANK INTENTIONALLY.
APPENDIX H
APPRAISAL
THIS PAGE IS LEFT BLANK INTENTIONALLY.