HomeMy WebLinkAbout05-1205 08-16-2005RESOLUTION NO. 05 -1205
RESOLUTION APPROVING A TRINITY RIVER
AUTHORITY (TRA) RESOLUTION AUTHORIZING THE
ISSUANCE, SALE, AND DELIVERY OF TRINITY RIVER
AUTHORITY OF TEXAS (TARRANT COUNTY WATER
PROJECT) IMPROVEMENT AND REFUNDING REVENUE
BONDS, AND APPROVING AND AUTHORIZING
INSTRUMENTS AND PROCEDURES RELATING
THERETO
WHEREAS, it is necessary and advisable that the City approve a resolution
proposed to be adopted by the Board of Directors of Trinity River Authority of Texas
authorizing the issuance, sale, and delivery of Trinity River Authority of Texas (Tarrant
County Water Project) Improvement and Refunding Revenue Bonds, and approving and
authorizing instruments and procedures relating thereto hereinafter described.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF EULESS, TEXAS:
SECTION 1
THAT a draft of a "RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND
DELIVERY OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTYWATER
PROJECT) IMPROVEMENT AND REFUNDING REVENUE BONDS, AND
APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO" (the "Bond Resolution ") proposed to be adopted by the Board of Directors
of Trinity River Authority of Texas (the "Authority ") on August 24, 2005, has been
submitted to the City in the form attached hereto, and made a part hereof for all
purposes. Said draft is hereby approved by the City as to form and substance, and the
bonds (the "Bonds ") described therein may be issued by the Authority in accordance
with the terms and provisions set forth therein and herein.
SECTION 2
THAT the principal amount and maturities of the Bonds, the interest rates for the
Bonds, the purchaser of the Bonds, and other details and provisions for the Bonds, and
the price to be paid for the Bonds, shall be determined by the General Manager of the
Authority in accordance with the procedures and parameters set forth in the Bond
Resolution in the manner determined by the Board of Directors of Authority pursuant to
a negotiated sale of the Bonds by the Authority in consultation with First Southwest
Company, its Financial Advisor; and all such matters and procedures are hereby
approved by the City.
SECTION 3
THAT it is acknowledged and agreed by the City that the Bonds authorized
pursuant to said Bond Resolution will be issued in strict conformance and compliance
with the water supply contract dated as of January 21, 1972, executed between the
Authority and the City, and amended as of January 22, 1975, and further amended as of
December 5, 1979 (the "Contract "), relating to the project as defined in said Contract and
described in said Bond Resolution, and that the City will be fully bound by the provisions
of said Bond Resolution insofar as they pertain to the City, and the City will be
unconditionally obligated to make the payments with respect to said Bonds as required
by the Contract and said Bond Resolution.
SECTION 4
THAT, in accordance with the Contract, and as a prerequisite to the issuance of
the Bonds, the City finds that a case of emergency exists which requires the City to
request the Authority to finance and construct the facilities for which the Bonds are to be
issued, and the City hereby formally requests the Authority to proceed with such
financing and construction.
SECTION 5
THAT all ordinances and resolutions of the City in conflict or inconsistent with
this Resolution are hereby repealed to the extent of such conflict or inconsistency.
APPROVED at a regular meeting of the Euless City Council on the 16th day of August,
2005, by a vote of 7 ayes, 0 nays, and 0 abstentions.
APPROVED:
Mary Lib Saleh)vlayor
ATTEST:
Susan Crim,
C, City Secretary
Resolution No. 05 -1205, Page 2 of 2
CERTIFICATE
FOR RESOLUTION NO. 05 -1205 APPROVING A TRINITY RIVER
AUTHORITY (TRA) RESOLUTION AUTHORIZING THE ISSUANCE,
SALE, AND DELIVERY OF TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT) IMPROVEMENT AND
REFUNDING REVENUE BONDS, AND APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING
THERETO
THE STATE OF TEXAS :
COUNTY OF TARRANT :
CITY OF EULESS :
We the undersigned officers of the City of Euless, Texas, hereby certify as
follows:
TH
16 DAY OF AUGUST, 2005, at the City Hall, and the roll was called of the duly
constituted officers and members of said City Council, to -wit:
1. The City Council of said City convened in REGULAR MEETING ON THE
Mayor Mary Lib Saleh, City Secretary Susan Crim, Mayor Pro -Tem Glenn Porterfield,
Council Member Linda Martin, Council Member Carl Tyson, Council Member Leon
Hogg, Council Member Charles Miller, and Council Member Veva Lou Massey
and all of said persons were present, except the following absentees:
NONE , thus constituting a quorum. Whereupon, among other
business, the following was transacted at said Meeting: a written RESOLUTION
APPROVING A TRINITY RIVER AUTHORITY (TRA) RESOLUTION AUTHORIZING
THE ISSUANCE, SALE, AND DELIVERY OF TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT) IMPROVEMENT AND REFUNDING
REVENUE BONDS, AND APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING THERETO was duly introduced for the consideration of
said City Council and duly read. It was then duly moved and seconded that said
Resolution be adopted; and, after due discussion, said motion, carrying with it the
adoption of said Resolution, prevailed and carried with all members present voting
"AYE" except the following:
NAY: None.
ABSTAIN: None.
2. That a true, full, and correct copy of the aforesaid Resolution adopted at
the Meeting described in the above and foregoing paragraph is attached to and follows
this Certificate; that said Resolution has been duly recorded in said City Council's
minutes of said Meeting; that the above and foregoing paragraph is a true, full, and
correct excerpt from said City Council's minutes of said Meeting pertaining to the
adoption of said Resolution; that the persons named in the above and foregoing
paragraph are the duly chosen, qualified, and acting officers and members of said City
Council as indicated therein; and that each of the officers and members of said City
Council was duly and sufficiently notified officially and personally, in advance, of the
time, place, and purpose of the aforesaid Meeting, and that said Resolution would be
introduced and considered for adoption at said Meeting; and that said Meeting was
open to the public, and public notice of the time, place, and purpose of said Meeting
was given, all as required by Chapter 551, Texas Government Code.
3. That the Mayor of said City has approved, and hereby approves, the
aforesaid Resolution; that the Mayor and the City Secretary of said City have duly
signed said Resolution; and that the Mayor and the City Secretary of said City hereby
declare that their signing of this Certificate shall constitute the signing of the attached
and following copy of said Resolution for all purposes.
SIGNED AND SEALED the 16th day of August, 2005.
(CITY SEAL)
L
i z
Mary Lib
leh, Mayor
I, the undersigned, City Attorney of the City of Euless, Texas, hereby certify that I
read and approved as to legality the attached and following Resolution, prior to its
adoption.
f)4,0
Trinity River Authority of Texas
Northern Region Office
7002.101.200
September 7, 2005
Mr. Chris Barker
Public Works Manager
City of Euless
201 North Ector Drive
Euless, Texas 76039
Re: Trinity River Authority of Texas
Tarrant County Water Supply Project
Improvement and Refunding Revenue Bonds, Series 2005
Dear Mr. Barker:
Enclosed please find four(4) copies of the Official Statement for the above referenced
Improvement and Refunding Revenue Bonds.
If you have any questions, please contact me.
Sincerely,
*/14.4%"%
WILLIAM S. DECKER
Manager, Water Resources Planning
Northern Region
WSD/vaw
Enclosures
P.O.Box 240
Arlington,Texas 76004-0240
(817)493-5100
to, Recycled Paper
OFFICIAL STATEMENT
Dated August 24,2005
Ratings:
Moody's: "Aaa"
Standard&Poor's:"AAA"
MBIA Insured/See"Other
NEW ISSUE-Book-Entry-Only Information Ratings"herein
In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under
statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax
Matters"herein,including the alternative minimum tax on corporations.
THE BONDS WILL NOT BE DESIGNATED AS"QUALIFIED TAX-EXEMPT OBLIGATIONS"
FOR FINANCIAL INSTITUTIONS
$96,930,000
TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT)
IMPROVEMENT AND REFUNDING REVENUE BONDS,SERIES 2005
Dated Date: August 15,2005 Due: February 1,as shown below
PAYMENT TERMS...Interest on the$96,930,000 Trinity River Authority of Texas(the"Authority"or`Issuer")(Tarrant County Water
Project)Improvement and Refunding Revenue Bonds,Series 2005(the"Bonds"),will accrue from August 15,2005(the"Dated Date")
and will be payable February 1 and August 1 of each year commencing February 1,2006,and will be calculated on the basis of a 360-
day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co.,the
nominee of The Depository Trust Company("DTC"),pursuant to the Book-Entry-Only System described herein. Beneficial ownership
of the Bonds may be acquired in denominations of$5.000 or integral multiples thereof. No physical delivery of the Bonds will be
made to the owners thereof. Principal of,premium,if any,and interest on the Bonds will be payable by the Paying Agent/Registrar to
Cede& Co.,which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the
beneficial owners of the Bonds. See"The Bonds-Book-Entry-Only System"herein. The initial Paying Agent/Registrar is The Bank of
New York Trust Company,N.A.,Dallas,Texas(see"The Bonds-Paying Agent/Registrar").
AUTHORITY FOR ISSUANCE ...The Bonds are issued pursuant to the provisions of Acts of the 54th Legislature of Texas, Regular
Session, 1955, Chapter 518 as amended, Chapters 1207 and 1371, Texas Government Code, as amended and other applicable laws.
Under the Constitution and the statutes of the State of Texas, the Authority has broad powers to effectuate flood control and the
conservation and use for all beneficial purposes of storm and flood waters in the Trinity River watershed,and as a necessary aid to these
purposes, the Authority has specific authority to construct, own and operate water and wastewater treatment, collection and
transportation systems,and to make contracts in reference thereto with municipalities and others.
PURPOSE ...Proceeds from the sale of the Bonds will be used (i) to refund certain redeemable Trinity River Authority of Texas
(Tarrant County Water Project)Improvement and Refunding Revenue Bonds,Series 1999 and Trinity River Authority of Texas(Tarrant
County Water Project)Improvement and Refunding Revenue Bonds,Series 2003 described in Schedule Ito this Official Statement(the
"Refunded Bonds"),(ii)for the purpose of funding approximately$33,883,000 of cost of the expansion and improvements to a surface
water treatment plant and distribution system (the"Project")of the Tarrant County Water Project, and(iii)to pay the costs associated
with the issuance of the Bonds.
MBAPayment of the principal of and interest on the Bonds when due will be insured by a municipal bond guaranty
insurance policy to be insured by MBIA Insurance Corporation simultaneously with the delivery of the Bonds.
See"Bond Insurance".
CUSIP PREFIX: 89657P
MATURITY SCHEDULE&9 DIGIT CUSIP
See Schedule on Page 2
LEGALITY...The Bonds are offered for delivery when,as and if issued and received by the Underwriters and subject to the approving
opinion of the Attorney General of Texas and the opinion of McCall,Parkhurst&Horton L.L.P.,Dallas,Texas(see Appendix D,"Form
of Bond Counsel's Opinion"). Certain legal matters will be passed upon for the Underwriters by Fulbright&Jaworski L.L.P., Dallas,
Texas,Counsel for the Underwriters.
DELIVERY...It is expected that the Bonds will be available for delivery through The Depository Trust Company on September 28,
2005.
MORGAN KEEGAN& COMPANY,INC.
A.G.EDWARDS&SONS,INC. ESTRADA HINOJOSA&COMPANY,INC.
JACKSON SECURITIES SOUTHWEST SECURITIES,INC.
MATURITY SCHEDULE CUSIP Prefix: 89657P(I)
Maturity CUSIP Maturity CUSIP •
Amount (February 1) Rate Yield Suffix(" Amount (February 1) Rate Yield Suffix"'
$ 115,000 2007 3.250% 2.990% CNI $ 5.930,000 2017 5.000% 3.950% CY7
100,000 2008 3.250% 3.090% CP6 6.230,000 2018 5.000% 4.010% CZ4
100,000 2009 3.500% 3.190% CQ4 6,550,000 2019 5.000% 4.040% DA8
1,935,000 2010 3.500% 3.310% CR2 6,885,000 2020 5.000% 4.060% DB6
2,005.000 2011 4.500% 3.450% CSO 7.235,000 2021 5.000% 4.090% DC4
2.105,000 2012 4.500% 3.550% CT8 7,610,000 2022 5.000% 4.120% DD2
2,205,000 2013 5.000% 3.660% CU5 9.175,000 2023 5.000% 4.160% DEO
5.100,000 2014 5.000% 3.710% CV3 9,650,000 2024 5.000% 4.190% DF7
5,360,000 2015 5.000% 3.810% CWI 13,000,000 2025 5.000% 4.200% DG5
5,640.000 2016 5.000% 3.890% CX9
(Interest accrues from the Dated Date)
(1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by Standard
and Poor's CUSIP Service Bureau,a division of The McGraw-Hill Companies,Inc. This data is not intended to create
a database and does not serve in any way as a substitute for the CUSIP Services.
•
OPTIONAL REDEMPTION OPTION. . .The Authority reserves the right,at its option,to redeem Bonds having stated maturities on E.
and after February 1, 2016, in whole or in part in principal amounts of$5,000 or any integral multiple thereof, on August 1,
2015,or any date thereafter,at the par value thereof plus accrued interest to the date of redemption(see "The Bonds -Optional •
Redemption"). •
r
•
2
li
No dealer,broker,salesman or other person has been authorized by the Authority or the Underwriters to give any information,or to
make any representations other than those contained in this Official Statement, and if given or made, such other information or
representations must not be relied upon as having been authorized by the Authority or the Underwriters. This Official Statement
does not constitute an offer to sell Bonds in any jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
Certain information set forth herein has been obtained from the Authority and other sources which are believed to be reliable but is
not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Financial Advisor or the
Underwriters. Any information and expressions of opinion herein contained are subject to change without notice, and neither the
. delivery of this Official Statement nor any sale made hereunder shall,under any circumstances,create any implication that there has
been no change in the affairs of the Authority or other matters described herein since the date hereof.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
TABLE OF CONTENTS
OFFICIAL STATEMENT SUMMARY 4 SCHEDULE OF REFUNDED
AUTHORITY OFFICIALS,STAFF AND BONDS SCHEDULE I
CONSULTANTS 6
APPENDICES
INTRODUCTION 7 BIOGRAPHICAL INFORMATION A
CERTAIN FINANCIAL AND OPERATING DATA OF
PLAN OF FINANCING 7
THE CONTRACTING PARTIES
BOND INSURANCE 9 CITY OF BEDFORD
THE BONDS CITY OF COLLEYVILLE
11 CITY OF EULESS
CITY OF GRAPEVINE
THE SYSTEM 15
DEBT INFORMATION CITY OF NORTH RICHLAND HILLS B
17 CERTAIN FINANCIAL AND OPERATING DATA OF
PROFORMA DEBT SERVICE REQUIREMENTS 17 TARRANT COUNTY WATER PROJECT ENTERPRISE
AUTHORIZED BUT UNISSUED REVENUE BONDS 17 FUND
C
SUMMARY OF CONTRACT PROVISIONS Ig FORM OF BOND COUNSEL'S OPINION D
ENGINEERING REPORT E
SELECTED PROVISIONS OF THE RESOLUTION 24 FORM OF SPECIMEN BOND INSURANCE F
THE AUTHORITY 40
THE AUTHORITY'S ACTIVITIES 40
• THE AUTHORITY'S REVENUE-BASED PROJECTS 40 The cover page hereof, this page, the appendices included
herein and any addenda, supplement or amendment hereto,
THE FUTURE ROLE OF THE AUTHORITY 42
are part of the Official Statement.
PENSION PLAN 42
OTHER OUTSTANDING INDEBTEDNESS OF THE
AUTHORITY 43
TAX MATTERS 44
CONTINUING DISCLOSURE OF INFORMATION 45
OTHER INFORMATION 47
RATINGS 47
LITIGATION 47
REGISTRATION AND QUALIFICATION OF BONDS FOR
SALE 47
VERIFICATION OF ARITHMETICAL AND MATHEMATICAL
COMPUTATIONS 47
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE
PUBLIC FUNDS IN TEXAS 47
LEGAL OPINIONS AND NO-LITIGATION CERTIFICATE48
FINANCIAL ADVISOR 48
UNDERWRITING 48
FORWARD-LOOKING STATEMENTS DISCLAIMER 48
MISCELLANEOUS 49
3
OFFICIAL STATEMENT SUMMARY
This summary is subject in all respects to the more complete information and definitions contained or incorporated in this
Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No
person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official
Statement.
THE AUTHORITY The Trinity River Authority of Texas(the"Authority"or"Issuer")is a governmental agency
of the State of Texas and a body politic and corporate, created as a conservation and
reclamation district under Article XVI, Section 59 of the Texas Constitution pursuant to
Chapter 518, Acts of the 54th Texas Legislature, Regular Session, 1955, as amended (the
"Authority Act"). The Authority is governed by a Board of 24 directors who are appointed by
the Governor for six-year terms.
THE BONDS The Bonds are being issued in the principal amount of$96,930,000 pursuant to the provisions
of the Authority Act, Chapters 1207 and 1371, Texas Government Code, as amended, and
other applicable laws and a Resolution approved by the Board of Directors of the Authority
(see"The Bonds—Authority for Issuance").
PAYMENT OF INTEREST Interest on the Bonds accrues from the Dated Date,and is payable February 1,2006,and each
February 1 and August 1 thereafter until maturity or prior redemption (see "The Bonds -
Description of the Bonds"and"The Bonds-Optional Redemption").
SECURITY FOR THE BONDS The Bonds constitute special obligations of the Authority, payable both as to principal and
interest,and secured by a first lien on a pledge of the Net Revenues of the Authority under the
Contracts entered into with the Cities of Bedford, Colleyville, Euless, Grapevine and North
Richland Hills (the "Cities"), subject to the lien thereof with respect to certain Prior Lien •
Bonds(see"The Bonds-Security and Source of Payment"). •
REDEMPTION The Authority reserves the right, at its option, to redeem Bonds having stated maturities on
and after February 1,2016,in whole or in part in principal amounts of$5,000 or any integral
multiple thereof, on August I, 2015, or any date thereafter, at the par value thereof plus
accrued interest to the date of redemption(see"The Bonds-Optional Redemption").
•
TAX EXEMPTION In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross
income for federal income tax purposes under statutes, regulations, published rulings and
court decisions existing on the date thereof,subject to the matters described under the caption
"Tax Matters"herein,including the alternative minimum tax on corporations.
USE OF PROCEEDS Proceeds from the sale of the Bonds will be used (i) to refund certain redeemable Trinity
•
River Authority of Texas (Tarrant County Water Project) Improvement and Refunding
Revenue Bonds, Series 1999 and Trinity River Authority of Texas (Tarrant County Water
Project)Improvement and Refunding Revenue Bonds,Series 2003 described in Schedule Ito
this Official Statement(the"Refunded Bonds"),(ii)for the purpose of funding approximately
$33,883,000 of cost of the expansion and improvements to a surface water treatment plant and
distribution system(the "Project") of the Tarrant County Water Project, and(iii) to pay the
costs associated with the issuance of the Bonds.
RATINGS Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. ("S&P") are expected to assign ratings of
"Aaa" and "AAA", respectively, to the Bonds based upon the financial guaranty policy of
MBIA Insurance Corporation to be issued simultaneously with the delivery of the Bonds. In
addition, the Bonds were assigned ratings of "A2" and "A" by Moody's and S&P,
respectively,without regard to credit enhancement. (see"Other Information-Ratings").
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BOOK-ENTRY-ONLY
SYSTEM The definitive Bonds will be initially registered and delivered only to Cede & Co., the
nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial
ownership of the Bonds may be acquired in denominations of$5,000 or integral multiples
thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof.
Principal of, premium, if any, and interest on the Bonds will be payable by the Paying
Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the
participating members of DTC for subsequent payment to the beneficial owners of the Bonds
(see"The Bonds-Book-Entry-Only System").
PAYMENT RECORD The Authority has never defaulted in payment of its bonds.
For additional information regarding the Authority,please contact:
Mr.Warren N.Brewer,Jr. Mr.W.Boyd London,Jr.
Trinity River Authority of Texas Ms.Mary Williams
Northern Region or First Southwest Company
P.O.Box 240 325 North St.Paul Street,Suite 800
Arlington,Texas 76004 Dallas,Texas 75201
(817)493-5100 (214)953-4000
ri
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AUTHORITY OFFICIALS,STAFF AND CONSULTANTS
Board Members Position Area Represented
John W.Jenkins President and Member,Executive Committee Chambers County
Hector Escamilla,Jr. Vice President and Member,Executive Committee Area at Large
Edd Hargett Chairman,Executive Committee Houston County
Nancy E.Lavinski Chairman,Admin.Comm.,Member,Executive Comm. Anderson County
Michael Cronin Chairman,Util.Serv.Comm.,Member,Exec.Comm. Kaufman County
Harold L.Barnard Chairman,Res.Devel.Comm.,Member,Exec.Comm. Ellis County
Louis E.Sturns Chairman,Legal Committee,Member,Exec.Comm. Tarrant County
Karl R.Butler Member,Administration Committee Dallas County
Patricia T.Clapp Member,Administration Committee Dallas County
Jerry F.House,D.Min. Member,Administration Committee Leon County
Russell B.Arnold Member,Utility Services Committee Trinity County
Les Browne Member,Utility Services Committee Tarrant County
Vincent Cruz,Jr. Member,Utility Services Committee Tarrant County
Andrew Martinez Member,Utility Services Committee Walker County
Linda D.Timmerman,Ed.d. Member,Utility Services Committee Freestone County
Benny L.Fogleman Member,Resources Development Committee Polk County
Katrina M.Keyes Member,Resources Development Committee Dallas County
Lynn H.Neely Member,Resources Development Committee Madison County
Kim C.Wyatt Member,Resources Development Committee Navarro County
Connie H.Arnold Member,Legal Committee Liberty County
Steve Cronin Member,Legal Committee San Jacinto County
Sylvia P.Greene Member,Legal Committee Area at Large
AnaLaura Saucedo Member,Legal Committee Dallas County
Vacant - Henderson County
Management Officers
Danny F.Vance General Manager
Warren N.Brewer,Jr. Regional Manager,Northern Region
Jimmie R.Sims. Regional Manager,Southern Region
Robert E.Moore Manager,Financial Services
Thomas D.Sanders Construction Services Manager
Don A.Tucker Manager,General Services
J.Sam Scott Executive Services Manager
James L.Murphy Secretary,Board of Directors and Staff Attorney
Consultants and Advisors
General Counsel Frank R.Booth Aransas Pass,Texas
Independent Auditors Deloitte&Touche,LLP Fort Worth,Texas
Consulting Engineer Malcolm Pirnie,Inc Dallas,Texas
Bond Counsel McCall,Parkhurst&Horton L.L.P Dallas,Texas
Financial Advisor First Southwest Company Dallas,Texas
6
OFFICIAL STATEMENT
RELATING TO
$96,930,000
TRINITY RIVER AUTHORITY OF TEXAS
(TARRANT COUNTY WATER PROJECT)
IMPROVEMENT AND REFUNDING REVENUE BONDS,SERIES 2005
INTRODUCTION
This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of$96,930,000
Trinity River Authority of Texas (Tarrant County Water Project) Improvement and Refunding Revenue Bonds, Series 2005.
Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Resolution authorizing the
issuance of the Bonds(the"Resolution"),except as otherwise indicated herein(see"Selected Provisions of the Resolution").
There follows in this Official Statement descriptions of the Bonds and certain information regarding the Authority and its finances.All
descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document.
Copies of such documents may be obtained from the Authority's Financial Advisor,First Southwest Company,Dallas,Texas.
DESCRIPTION OF THE AUTHORITY...The Authority is a governmental agency of the State of Texas and a body politic and corporate,
created as a conservation and reclamation district under Article XVI, Section 59 of the Texas Constitution pursuant to Chapter 518,
Acts of the 54th Legislature of Texas, Regular Session, 1955, as amended (the "Authority Act"). Under the Constitution and the
statutes of the State of Texas,the Authority has broad powers to effectuate flood control and the conservation and use,for all beneficial
purposes, of storm and flood waters and unappropriated flow waters in the Trinity River watershed, and as necessary aid to these
purposes, the Authority has specific authority to construct, own and operate water and wastewater treatment, collection and
transportation systems,and to make contracts in reference thereto with municipalities and others.
The Authority consists of all the territories in the Counties of Dallas, Tarrant, Ellis, Navarro and Chambers, and the principal
watershed portions of Anderson, Freestone, Henderson, Houston, Kaufman, Leon, Madison, Polk, San Jacinto, Trinity, Walker and
Liberty Counties. The Authority is governed by a Board of 24 directors who are appointed by the Governor with the advice and
consent of the Texas Senate. The first directors were appointed for staggered terms,and directors thereafter have had six-year terms.
Two of the directors are appointed from the area-at-large; three directors are from Tarrant County; four are from Dallas County; and
one director is from each of the other counties.
PLAN OF FINANCING
PURPOSE.. . Proceeds from the sale of the Bonds will be used (i) to refund certain redeemable Trinity River Authority of Texas
(Tarrant County Water Project) Improvement and Refunding Revenue Bonds, Series 1999 and Trinity River Authority of Texas
(Tarrant County Water Project) Improvement and Refunding Revenue Bonds, Series 2003 described in Schedule I to this Official
Statement (the "Refunded Bonds"), (ii) for the purpose of funding approximately $33,883,000 of cost of the expansion and
improvements to a surface water treatment plant and distribution system(the"Project")of the Tarrant County Water Project,and(iii)
to pay the costs associated with the issuance of the Bonds. See Schedule I for a detailed listing of the Refunded Bonds and their call date
at par.
REFUNDED BONDS...The principal and interest due on the Refunded Bonds are to be paid on the scheduled interest payment dates and the
respective redemption dates of such Refunded Bonds, from funds to be deposited pursuant to a certain Escrow Agreement(the "Escrow
Agreement") between the Authority and The Bank of New York Trust Company, N.A., Dallas, Texas (the "Escrow Agent"). The
Resolution provides that from the proceeds of the sale of the Bonds received from the Underwriters,the Authority will deposit with the
Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds on their respective redemption
dates. Such funds will be held by the Escrow Agent in a special escrow account (the "Escrow Fund") and used to purchase direct
obligations of the United States of America (the "Federal Securities"). Under the Escrow Agreement, the Escrow Fund is irrevocably
pledged to the payment of the principal of and interest on the Refunded Bonds.
Grant Thornton LLP,a nationally recognized accounting firm,will verify at the time of delivery of the Bonds to the Underwriters thereof
the mathematical accuracy of the schedules that demonstrate the Federal Securities will mature and pay interest in such amounts which,
together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the principal of and interest on the
Refunded Bonds. Such maturing principal of and interest on the Federal Securities will not be available to pay the Bonds(see"Other
Information-Verification of Arithmetical and Mathematical Computations").
By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement,the Authority
will have effected the defeasance of all of the Refunded Bonds in accordance with the law. It is the opinion of Bond Counsel that as a result
of such defeasance and in reliance upon the report of Grant Thornton LLP,the Refunded Bonds will be outstanding only for the purpose of
7
receiving payments from the Federal Securities and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not
be deemed as being outstanding obligations of the Authority payable from taxes nor for the purpose of applying any limitation on the
issuance of debt.
The Authority has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund,from lawfully available funds,of any
additional amounts required to pay the principal of and interest on the Refunded Bonds,if for any reason,the cash balances on deposit or
scheduled to be on deposit in the Escrow Fund be insufficient to make such payment.
USE OF PROCEEDS...The proceeds from the sale of the Bonds will be applied approximately as follows:
Deposit to Project Construction Fund $ 33,883,000.00
Deposit to Escrow Fund 64,230,222.88
Deposit to Debt Service Fund 572,337.46
Deposit to Debt Service Reserve Fund 2,072,614.24
Deposit to Capitalized Interest Fund 2,460,012.92
Underwriters'Discount 553,567.70
Gross Bond Insurance Premium 379,300.00
Costs of Issuance 760,865.01
Total Uses of Funds $ 104,911,920.21
[Remainder of this Page Intentionally Left Blank]
8
BOND INSURANCE
The MBIA Insurance Corporation Insurance Policy
The following information has been furnished by MBIA Insurance Corporation("MBIA")for use in this Official Statement. Reference
is made to Appendix F for a specimen of MBIA's policy(the"Policy").
MBIA does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure
contained herein,or omitted herefrom,other than with respect to the accuracy of the information regarding the Policy and MBIA set
forth under the heading("Bond Insurance"). Additionally, MBIA makes no representation regarding the Bonds or the advisability of
investing in the Bonds.
The MBIA Policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of
the Issuer to the Paying Agent or its successor of an amount equal to (i) the principal of(either at the stated maturity or by an
advancement of maturity pursuant to a mandatory sinking fund payment)and interest on, the Bonds as such payments shall become
due but shall not be so paid(except that in the event of any acceleration of the due date of such principal by reason of mandatory or
optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a
mandatory sinking fund payment,the payments guaranteed by the MBIA Policy shall be made in such amounts and at such times as
such payments of principal would have been due had there not been any such acceleration,unless MBIA elects in its sole discretion,to
pay in whole or in part any principal due by reason of such acceleration); and(ii) the reimbursement of any such payment which is
subsequently recovered from any Owner of the Bonds pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such Owner within the meaning of any applicable bankruptcy law(a"Preference").
MBIA's Policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Bonds.
MBIA's Policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than
mandatory sinking fund redemptions); (ii)any payments to be made on an accelerated basis; (iii)payments of the purchase price of
Bonds upon tender by an owner thereof;or(iv)any Preference relating to(i)through(iii)above. MBIA's Policy also does not insure
against nonpayment of principal of or interest on the Bonds resulting from the insolvency,negligence or any other act or omission of
the Paying Agent or any other paying agent for the Bonds.
Upon receipt of telephonic or telegraphic notice,such notice subsequently confirmed in writing by registered or certified mail,or upon
receipt of written notice by registered or certified mail,by MBIA from the Paying Agent or any owner of a Bond the payment of an
insured amount for which is then due,that such required payment has not been made,MBIA on the due date of such payment or within
one business day after receipt of notice of such nonpayment,whichever is later,will make a deposit of funds,in an account with U.S.
Bank Trust National Association, in New York, New York,or its successor, sufficient for the payment of any such insured amounts
which are then due. Upon presentment and surrender of such Bonds or presentment of such other proof of ownership of the Bonds,
together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Bonds as are
paid by MBIA, and appropriate instruments to effect the appointment of MBIA as agent for such owners of the Bonds in any legal
proceeding related to payment of insured amounts on the Bonds, such instruments being in a form satisfactory to U.S. Bank Trust
National Association,U.S.Bank Trust National Association shall disburse to such owners or the Paying Agent payment of the insured
amounts due on such Bonds,less any amount held by the Paying Agent for the payment of such insured amounts and legally available
therefor.
MBIA Insurance Corporation
MBIA Insurance Corporation("MBIA")is the principal operating subsidiary of MBIA Inc.,a New York Stock Exchange listed company(the
"Company"). The Company is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled in the State of New York and
licensed to do business in and subject to regulation under the laws of all 50 states,the District of Columbia,the Commonwealth of Puerto
Rico,the Commonwealth of the Northern Mariana Islands,the Virgin Islands of the United States and the Territory of Guam. MBIA has
three branches,one in the Republic of France,one in the Republic of Singapore and one in the Kingdom of Spain.
The principal executive offices of MBIA are located at 113 King Street,Armonk,New York 10504 and the main telephone number at
that address is(914)273-4545.
Regulation
As a financial guaranty insurance company licensed to do business in the State of New York, MBIA is subject to the New York Insurance
Law which,among other things,prescribes minimum capital requirements and contingency reserves against liabilities for MBIA,limits the
classes and concentrations of investments that are made by MBIA and requires the approval of policy rates and forms that are employed by
MBIA. State law also regulates the amount of both the aggregate and individual risks that may be insured by MBIA, the payment of
dividends by MBIA,changes in control with respect to MBIA and transactions among MBIA and its affiliates.
The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.
9
Financial Strength Ratings of MBIA
Moody's Investors Service,Inc.rates the financial strength of MBIA"Aaa."
Standard&Poor's,a division of The McGraw-Hill Companies,Inc.rates the financial strength of MBIA"AAA."
Fitch Ratings rates the financial strength of MBIA"AAA."
Each rating of MBIA should be evaluated independently. The ratings reflect the respective rating agency's current assessment of the
creditworthiness of MBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above
ratings may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy,sell or hold the Bonds,and such ratings may be subject to revision or withdrawal at any
time by the rating agencies. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market
price of the Bonds. MBIA does not guaranty the market price of the Bonds nor does it guaranty that the ratings on the Bonds will not be
revised or withdrawn.
MBIA Financial Information
As of December 31,2004,MBIA had admitted assets of$10.4 billion(unaudited),total liabilities of$7.0 billion(unaudited),and total
capital and surplus of$3.4 billion(unaudited)determined in accordance with statutory accounting practices prescribed or permitted by
insurance regulatory authorities. As of June 30,2005 MBIA had admitted assets of$10.7 billion(unaudited), total liabilities of$7.0
billion (unaudited), and total capital and surplus of$3.7 billion (unaudited) determined in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory authorities.
For further information concerning MBIA,see the consolidated financial statements of MBIA and its subsidiaries as of December 31,
2004 and December 31, 2003 and for each of the three years in the period ended December 31, 2004, prepared in accordance with
generally accepted accounting principles,included in the Annual Report on Form 10-K of the Company for the year ended December
31, 2004 and the consolidated financial statements of MBIA and its subsidiaries as of June 30, 2005 and for the six month periods
ended June 30,2005 and June 30,2004 included in the Quarterly Report on Form 10-Q of the Company for the period ended June 30,
2005,which are hereby incorporated by reference into this Official Statement and shall be deemed to be a part hereof.
Copies of the statutory financial statements filed by MBIA with the State of New York Insurance Department are available over the
Internet at the Company's web site at http://www.mbia.com and at no cost,upon request to MBIA at its principal executive offices.
Incorporation of Certain Documents by Reference
The following documents filed by the Company with the Securities and Exchange Commission (the "SEC") are incorporated by
reference into this Official Statement:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,2004;and
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,2005.
Any documents, including any financial statements of MBIA and its subsidiaries that are included therein or attached as exhibits
thereto,filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d)of the Exchange Act after the date of the Company's most
recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, and prior to the termination of the offering of the Bonds
offered hereby shall be deemed to be incorporated by reference in this Official Statement and to be a part hereof from the respective
dates of filing such documents.Any statement contained in a document incorporated or deemed to be incorporated by reference herein,
or contained in this Official Statement, shall be deemed to be modified or superseded for purposes of this Official Statement to the
extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed,except as
so modified or superseded,to constitute a part of this Official Statement.
The Company files annual,quarterly and special reports,information statements and other information with the SEC under File No. 1-
9583. Copies of the Company's SEC filings(including(1)the Company's Annual Report on Form 10-K for the year ended December
31, 2004, and (2) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005) are
available(i)over the Internet at the SEC's web site at htti,://www.sec.Qov;(ii)at the SEC's public reference room in Washington D.C.;
(iii) over the Internet at the Company's web site at http://www.mbia.com; and(iv)at no cost, upon request to MBIA at its principal
executive offices.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is unable to fulfill its contractual
obligation under this policy or contract or application or certificate or evidence of coverage,the policyholder or certificateholder is not
protected by an insurance guaranty fund or other solvency protection arrangement.
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THE BONDS
DESCRIPTION OF THE BONDS ...The Bonds are dated August 15, 2005, and mature, on February 1 in each of the years and in the
amounts shown on the inside cover page hereof. Interest will accrue from the Dated Date,will be computed on the basis of a 360-day
year of twelve 30-day months,and will be payable on February I and August 1,commencing February I,2006. The definitive Bonds
will be issued only in fully registered form in any integral multiple of$5,000 for any one maturity and will be initially registered and
delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System
described herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of,premium,if any,and interest
on the Bonds will be payable by the Paying Agent/Registrar to Cede&Co.,which will make distribution of the amounts so paid to the
participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Bonds - Book-Entry-Only
System"herein.
AUTHORITY FOR ISSUANCE...The Bonds are issued pursuant to the provisions of the Authority Act,Chapters 1207 and 1371,Texas
Government Code,as amended and other applicable laws. Under the Constitution and the statutes of the State of Texas,the Authority
has broad powers to effectuate flood control and the conservation and use for all beneficial purposes of storm and flood waters in the
Trinity River watershed,and as a necessary aid to these purposes, the Authority has specific authority to construct,own and operate
water and wastewater treatment,collection and transportation systems,and to make contracts in reference thereto with municipalities
and others.
SECURITY AND SOURCE OF PAYMENT ... The Authority has entered into contracts (collectively, the "Contracts") with the Cities of
Bedford, Euless, Colleyville, Grapevine and North Richland Hills, Texas (the "Contracting Parties"). The Contracting Parties have
agreed to pay the Authority its net cost of operation and maintenance and the debt service on the Parity Bonds and any Additional Bonds
that are required to complete the construction of the regional water supply system,any future expansions or to refund any such bonds(see
"The System"). The Bonds,and interest thereon,together with the other Parity Bonds hereafter issued are on a parity and of equal dignity
in all respects, and are payable solely from Net Revenues to be received by the Authority under the terms of the Contracts, and the
Authority has pledged these Net Revenues to the punctual payment of these obligations,when due.
The Authority has determined,and so covenanted in the Resolution,not to issue any further bonds payable from and secured by a first lien
on and pledge of the Net Revenues on a parity with the lien thereon and pledge thereof with respect to the unrefunded Trinity River
Authority of Texas(Tarrant County Water Project) Improvement and Refunding Revenue Bonds, Series 1999("Series 1999 Bonds")and
Trinity River Authority of Texas(Tarrant County Water Project)Improvement and Refunding Revenue Bonds,Series 2003("Series 2003
Bonds"). Prior to the final payment or defeasance of the Series 1999 Bonds and Series 2003 Bonds,the lien on and pledge of the Net
Revenues to the payment of the Bonds shall be subordinate to the lien on and pledge thereof to the payment of the Series 1999
Bonds and Series 2003 Bonds in all respects.
The expense of operating the Authority's Tarrant County Water Project,including administrative overhead and the amount necessary to pay
debt service on any outstanding bonds,is reduced to a cost in cents per 1,000 gallons of water delivered by the system. Each Contracting
Party is then billed monthly according to their projected annual flow with provisions for adjustment. The Fiscal Provisions of the Contracts
with the Authority are summarized in this Official Statement.
Actual net cost to the Contracting Parties of water treatment and transportation for 2003 was$1.69 per 1,000 gallons. Actual net cost of
water treatment and transportation to the Contracting Parties for fiscal year 2004 was$1.66 per 1,000 gallons. The projected net cost for
fiscal year 2005 is$1.86 per 1,000 gallons and the projected net cost for fiscal year 2006 is$1.85 per 1,000 gallons.
RESERVE FUND REQUIREMENT... The Resolution creates a Reserve Fund to be used to finally retire or to pay when due debt service on
each series of Parity Bonds and any Additional Bonds to the extent the amounts in the Interest and Sinking Fund are insufficient. The
Resolution provides that so long as the market value of the money and investments in the Reserve Fund are not less than a "Reserve
Required Amount"equal to the average annual principal and interest requirements of the Parity Bonds and Additional Bonds,no deposit to
the Reserve Fund is required. (See"Selected Provisions of the Resolution").
OPTIONAL REDEMPTION ...The Authority reserves the right, at its option, to redeem Bonds having stated maturities on and after
February I,2016, in whole or in part in principal amounts of$5,000 or any integral multiple thereof,on August 1,2015,or any date
thereafter,at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be redeemed,the
Authority may select the maturities of Bonds to be redeemed. If less than all the Bonds of any maturity are to be redeemed,the Paying
Agent/Registrar(or DTC while the Bonds are in Book-Entry-Only form)shall determine by lot the Bonds,or portions thereof,within
such maturity to be redeemed.If a Bond(or any portion of the principal sum thereot)shall have been called for redemption and notice
of such redemption shall have been given,such Bond(or the principal amount thereof to be redeemed)shall become due and payable
on such redemption date and interest thereon shall cease to accrue from and after the redemption date,provided funds for the payment
of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date.
NOTICE OF REDEMPTION ...Not less than 30 days prior to a redemption date for the Bonds, the Authority shall cause a notice of
redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in
whole or in part,at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of
II
business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE
CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN,WHETHER OR NOT THE REGISTERED OWNER RECEIVES
SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE
AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION
THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF SHALL
CEASE TO ACCRUE.
DEFEASANCE... The Resolution provides for the defeasance of the Bonds when the payment of the principal of and premium,if any,
on the Bonds,plus interest thereon to the due date thereof(whether such due date be by reason of maturity,redemption,or otherwise),
is provided by irrevocably depositing with a paying agent, in trust (I) money sufficient to make such payment or (2) Defeasance
Securities that mature as to principal and interest in such amounts and at such times to insure the availability,without reinvestment,of
sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of the paying agent for the
Bonds. The Resolution provides that "Defeasance Securities" means (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 are rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent,and(c)noncallable obligations of a state or an agency or a county,municipality,or other political subdivision
of a state that have been refunded and that are rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent. The Authority has additionally reserved the right, subject to satisfying the requirements of(1) or(2)
above, to substitute other Defeasance Securities for the Defeasance Securities originally deposited,to reinvest the uninvested moneys
on deposit for such defeasance and to withdraw for the benefit of the Authority moneys in excess of the amount required for such
defeasance.
Upon such deposit as described above, such Bonds shall no longer be regarded as outstanding or unpaid. Provided, however, the
Authority has reserved the option,to be exercised at the time of the defeasance of the Bonds,to call for redemption,at an earlier date,
those Bonds which have been defeased to their maturity date, if the Authority: (i)in the proceedings providing for the firm banking
and financial arrangements, expressly reserves the right to call the Bonds for redemption; (ii) gives notice of the reservation of that
right to the owners of the Bonds immediately following the making of the firm banking and financial arrangements; and(iii)directs
that notice of the reservation be included in any redemption notices that it authorizes. •
•
BOOK-ENTRY-ONLY SYSTEM... This section describes how ownership of the Bonds is to be transferred and how the principal of
premium, if any,and interest on the Bonds are to be paid to and credited by The Depository Trust Company("DTC"), New York,New
York, while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only
System has been provided by DTC for use in disclosure documents such as this Official Statement. The Authority believes the source of
such information to be reliable,but takes no responsibility for the accuracy or completeness thereof.
The Authority 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 Official Statement. The current rules applicable to DTC
are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC
Participants are on file with DTC.
The Depository Trust Company("DTC"),New York,NY,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 bond certificate will be issued for the Bonds, in the aggregate principal
amount of such issue,and will be deposited with DTC.
DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a"banking
organization"within the meaning of the New York Banking Law,a member of the Federal Reserve System,a"clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934.DTC holds and provides asset servicing for over 2 million issues of U.S.and non-
U.S.equity issues,corporate and municipal debt issues,and money market instruments from over 85 countries that DTC's participants
("Direct Participants")deposit with DTC. DTC also facilitates the post-trade settlement 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,in turn,is owned by a number of Direct
Participants of DTC and Members of the National Securities Clearing Corporation,Government Securities Clearing Corporation,MBS
Clearing Corporation,and Emerging Markets Clearing Corporation,(NSCC,GSCC,MBSCC,and EMCC,also subsidiaries of DTCC),
as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities
Dealers,Inc.Access to the DTC system is also available to others such as both U.S.and non-U.S.securities brokers and dealers,banks,
trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either
12
directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission.More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants,which will receive a credit for the Bonds
on DTC's records.The ownership interest of each actual purchaser of each Bond("Beneficial Owner")is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase.
Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds,
except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers,all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC.The deposit of Bonds with
DTC and their registration in the name of Cede&Co.or such other DTC nominee do not effect 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 shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such issue 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 Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority 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).
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 Authority or the Paying Agent/Registrar, on payable date in accordance with their respective holdings shown on DTC's records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,as is the case with
securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such
• Participant and not of DTC,the Paying Agent/Registrar,or the Authority,subject to any statutory or regulatory requirements as may be
in effect from time to time. Payments to Cede & Co.(or such other nominee as may be requested by an authorized representative of
DTC)are the responsibility of the Authority or the Paying Agent/Registrar,disbursement of such payments to Direct Participants will
be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the
Authority 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.
Use of Certain Terms in Other Sections of this Official Statement In reading this Official Statement it should be understood that
while the Bonds are in the Book-Entry Only System,references in other sections of this Offficial Statement 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 Resolution will be given only to DTC.
Information concerning DTC and the Book-Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or
completeness by,and is not to be construed as a representation by the Authority or the Purchasers.
Effect of Termination of Book-Entry Only System In the event that the Book-Entry Only System is discontinued by DTC or the
use of the Book-Entry Only System is discontinued by the Authority,printed Bonds will be issued to the holders and the Bonds will be
subject to transfer,exchange and registration provisions as set forth in the Resolution and summarized under"The Bonds-Transfer,
Exchange and Registration"below.
13
PAYING AGENT/REGISTRAR...The initial Paying Agent/Registrar is The Bank of New York Trust Company,N.A.,Dallas,Texas. In
the Resolution,the Authority retains the right to replace the Paying Agent/Registrar. The Authority covenants to maintain and provide
a Paying Agent/Registrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a legally
qualified bank or trust company, financial institution or other entity duly qualified and legally authorized to serve as and perform the
duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the
Authority agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail,first
class,postage prepaid,which notice shall also give the address of the new Paying Agent/Registrar.
TRANSFER,EXCHANGE AND REGISTRATION...In the event the Book-Entry-Only System should be discontinued,the Bonds may be
transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender to the Paying
Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner,except for any tax or
other governmental charges required to be paid with respect to such registration,exchange and transfer. Bonds may be assigned by the
execution of an assignment form on the respective Bonds or by other instrument of transfer and assignment acceptable to the Paying
Agent/Registrar. New Bonds will be delivered by the Paying Agent/Registrar,in lieu of the Bonds being transferred or exchanged,at
the designated office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid,to the new registered
owner or his designee.To the extent possible,new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered
owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be canceled,and the
written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral
multiple of$5,000 for any one maturity and for a like aggregate designated amount as the Bonds surrendered for exchange or transfer.
See "The Bonds- Book-Entry-Only System"herein for a description of the system to be utilized initially in regard to ownership and
transferability of the Bonds. Neither the Authority nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond
called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of
transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Bond.
RECORD DATE FOR INTEREST PAYMENT...The record date ("Record Date") for the interest payable on the Bonds on any interest
payment date means the close of business on the 15th calendar day of the preceding month.
In the event of a non-payment of interest on a scheduled payment date,and for 30 days thereafter,a new record date for such interest
payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the Authority. Notice of the Special Record Date and of the scheduled payment date of the past due
interest("Special Payment Date",which shall be 15 days after the Special Record Date)shall be sent at least five business days prior to
the Special Record Date by United States mail, first class postage prepaid,to the address of each Holder of a Bond appearing on the
registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of
such notice.
BONDHOLDERS'REMEDIES...The Resolution provides that,in the event of a default or a threatened default in the payment of principal of
or interest on the Parity Bonds, any court of competent jurisdiction may, upon petition of holders or owners of 25%of the outstanding
Parity Bonds, appoint a receiver with authority to collect and receive all income from the System, employ, and discharge agents, em-
ployees,and consultants of the Authority,take charge of pledged funds on hand and manage the proprietary affairs of the Authority without
consent or hindrance by the Board of the Authority. Such receiver may also be authorized to make contracts for providing water treatment
services or renew such contracts with the approval of the court appointing him. The Court may vest the receiver with such other powers
and duties as the court may find necessary for the protection of the holders or owners of the Parity Bonds. In no event will registered
owners have the right to have the maturity of the Bonds accelerated as a remedy. The enforcement of the remedy of mandamus is also
available,but may be difficult and time consuming. No assurance can be given that a mandamus or other legal action to enforce a default
under the Resolution would be successful. Furthermore,the Authority is eligible to seek relief from its creditors under Chapter 9 of the
U.S.Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source
of revenues, such provision is subject to judicial construction. Chapter 9 also includes an automatic stay provision that would prohibit,
without Bankruptcy Court approval,the prosecution of any other legal action by creditors or bondholders of an entity which has sought
protection under Chapter 9. Therefore, should the Authority avail itself of Chapter 9 protection from creditors,the ability to enforce any
remedies under the Resolution would be subject to the approval of the Bankruptcy Court(which could require that the action be heard in
Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a
Bankruptcy Court in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to
the enforceability of the Resolution and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. In
addition, while the Authority has covenanted, subject only to the requirements of the Prior Lien Bond Resolutions for the benefit of the
Prior Lien Bonds,to secure the Bonds by a first lien on the Net Revenues,Bond Counsel will opine only that a valid and enforceable lien
has been granted on the Net Revenues. Bond Counsel has not been requested to,and has not,rendered any opinion as to the priority status
of the pledge of the Net Revenues.
14
THE SYSTEM
THE SYSTEM...The Tarrant County Water Supply Project system(the"System")consists of a raw water intake and pump station located
on Lake Arlington, raw water transmission pipelines, raw water booster pump station, surface water treatment plant, and distribution
pumping,transmission and storage facilities. The surface water treatment plant is a conventional facility consisting of
• Disinfection application points.
• Rapid mix/coagulation facility for dispersing coagulants,fluoride(for tooth decay prevention),and lime for pH adjustment to
control corrosion.
• Flocculation/sedimentation structures for removing particulate and flocculated materials.
• Filters for removing fine particles and microbials.
• Clearwell structures for additional disinfectant contact and treated water storage.
• High service pumping for conveying water to customer cities and distribution system facilities.
Raw water is supplied to the System through a contract between the Authority and the Tarrant Regional Water District(the"District"). The
basic contract was approved by the District and the Authority's Board in December 1979 and was amended and superseded by an
amendatory contract by and among the District,the Authority and the Cities of Fort Worth,Arlington and Mansfield,effective as of March
1980(the"Water Supply Contract"). The Water Supply Contract is effective for the life of the bonds which were issued by the District to
provide water to the parties to the Water Supply Contract and thereafter for the life of the District's facilities serving the parties to the Water
Supply Contract.
Water is provided to the Project from the District's Cedar Creek Lake and Richland-Chambers Reservoir. The District agrees to use its best
efforts to furnish raw water,to the extent available from its system,in an amount sufficient to satisfy the reasonable demands of the parties
to the Water Supply Contract. Under the Water Supply Contract the District reserves the right to contract with additional parties so long as
it does not jeopardize its ability to supply the needs of the existing contracting parties. The Project is required to purchase all of its raw
water requirements from the District;provided that,upon agreement of the District,the Project may purchase raw water from other sources
if the District is unable to satisfy the Project's demands. Pursuant to the Water Supply Contract,the Project has a minimum take-or-pay
from the District of the greater of 5.5 million gallons per day or the average daily consumption for the previous five-year period.
The rate to be charged to the Project for raw water is based upon the District's cost of debt service,operation and maintenance expense and
any other miscellaneous expenses in connection with its water supply facilities allocated on a proportionate share based upon actual water
consumption of the Project in relation to the actual use by the other parties to the Water Supply Contract,after crediting amounts received
by the District from water sales to the City of Arlington and other customers. In order to provide adequate funds to cover the District's cost
of debt service the Water Supply Contract provides that upon a party's failure to make payments for 120 days or more the amount to be
paid by the other parties to the Water Supply Contract will be proportionately increased. The Authority's obligation to make payments
under the Water Supply Contract constitutes an"operating expense"of the Project which is payable prior to the debt service on the Parity
Bonds. In the opinion of the Authority the raw water supply to the Project is adequate for the ultimate development of the Contracting
Parties which are members of the Project.
For information with respect to the System's operating data, see Appendix C,"Certain Financial and Operating Data of Tarrant County
Water Project Enterprise Fund."
THE PROJECT...The"Project"consists of distribution system improvements associated with the plant expansion to 87 million gallon per
day and design for the expansion of the System from 87 million gallons per day to 102 million gallons per day with the addition and/or
modification of:
.
(a) Parallel Raw Water Pipeline;
(b) Raw Water Booster Pump Station;
(c) Flocculation/Sedimentation Basins and Piping;
(d) Ozone system;
(e) Filters;
(t) Filtered water piping,metering and chemical feed;
(g) Wash water basin;
(h) Distribution Pumping and piping at the plant;
(i) Parallel Transmission Service Main for plant to Murphy Pump Station;
(j) Distribution Pumping and piping at Murphy Pump Station;
(k) Addition to Murphy Pumping Station;
(I) Parallel Distribution Service Main from Murphy Pump Station to Cheek-Sparger Junction;and
(m) Delivery Point Pumping and Piping;
For additional information with respect to the plant expansion and the System's future needs,see Appendix E,"Engineering Report."
15
FUTURE DEBT PLANS... Additional expansions and improvements to system facilities are planned so as to coincide with the increasing
demands of the growing contracting parties. Improvements to increase the water treatment plant's nominal capacity above 87 MGD are
expected around 2007 according to the revised master plan,when the next scheduled expansion will increase the capacity to 102 MGD and
again around 2017,to 117 MGD. A parallel raw water pipeline will be needed in conjunction with the expansion to 102 MGD,and the
anticipated funding needs of that 2007 program are approximately$65 million in project cost,to be derived from issuing system revenue
bonds. The 2017 expansion to 117 MGD, if needed, will be funded by issuing system revenue bonds, but the amount has not been
determined at this time.
Euless, Bedford and Colleyville secure all of their treated water from the Authority's Tarrant County Water Supply Project. All of these
cities have some groundwater supplies which they may utilize on occasion. North Richland Hills purchases treated water from Fort Worth
for about 35%for their city and 65%from the System,and Grapevine owns and operates a water treatment plant which serves about 30%
of their present city and about 70%from the System presently.
None of the Authority's contracting parties have ever refused to pay their obligation,and this regional system is no exception;all five cities
have paid regularly.
[Remainder of this Page Intentionally Left Blank]
16
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17 d d
SUMMARY OF CONTRACT PROVISIONS
Following is a summary of the text of certain provisions contained in each of the contracts between the Authority and the Cities
of Bedford, Euless,Colleyville,Grapevine and North Richland Hills(the"Contracts").The Authority has a separate contract
with each City, and, as a consequence, certain provisions may differ slightly between Contracts in order to suit each City's
particular needs.
Reference is hereby made to the full and complete Contracts for further information, copies of which are available upon
request from the Financial Advisor.
There are two basic differences in the various Contracts.The first regards service area. All of the corporate limits of Bedford, Euless
and Colleyville are serviced by the Project. However, because North Richland Hills and Grapevine have other water supplies, the
Project serves defined service areas in such cities which encompass less than their entire corporate limits.
The Contracts with Bedford and Euless also provide that the Authority will notify each city at least one year in advance of the issuance
of any bonds,after bonds for the first phase of construction,in accordance with the Engineering Report,have been delivered,provided,
that such cities may request Authority to finance and construct a phase of the Project at any time and Authority may issue bonds
without giving one year's notice in cases of emergency. Any resolution authorizing any bonds shall be submitted to each city for
approval as to form and substance, except as to price, interest rate and purchaser. No such resolution shall be binding on either city
until approved by ordinance or resolution by such city.
Definition or Terms
Terms and expressions as used in each of the Contracts, unless the context clearly shows otherwise, shall have the meanings below.
Terms such as"this contract,""this agreement,""herein,""hereof,""hereby","hereunder"or"hereto"shall refer to each Contract in
its entirety and not to this summary.The term"City"refers to each of the cities of Bedford,Euless,Colleyville,Grapevine and North
Richland Hills.
A. "Additional Contracting Party" means any party not defined as a Contracting Party with whom Authority makes a contract for
supplying treated water through the Project.
B. "Adjusted Annual Payment" means the Annual Payment, as adjusted due to service to Additional Contracting Parties and/or as
required during or after each Fiscal Year.
C. "Annual Payment" means the amount of money to be paid to Authority by City as its proportionate share of the Annual
Requirement.
D."Annual Requirement"means the total amount of money required for Authority to pay all Operation and Maintenance Expense of
the Project, to pay the debt service on its Bonds and to pay any amounts required to be deposited in any special or reserve funds
required to be established and/or maintained by the provisions of the Bond Resolution.
E."Bond Resolutions"means the resolutions of Authority which authorize the Bonds.
F. "Bonds" means the revenue bonds heretofore and hereafter issued by Authority, whether one or more issues, and the interest
coupons appertaining thereto, in connection with the acquisition,construction,improvement,betterment,and extension of the Project,
and any bonds issued to refund any Bonds.
G."Contracting Parties"means the Cities of Bedford,Euless,Colleyville,Grapevine and North Richland Hills.
H."Fiscal Year"means the fiscal year of Authority which is December 1 through November 30.
I. "Operation and Maintenance Expense"means all costs of operation and maintenance of the Project including(for greater certainty
but without limiting the generality of the foregoing) repairs and replacements for which no special fund is created in the Bond
Resolutions, the costs of utilities supervision, engineering, accounting, auditing, legal services, and any other supplies, services,
administrative costs and equipment necessary for proper operation and maintenance of the Project,and payments made by Authority in
satisfaction of judgments resulting from claims not covered by Authority's insurance or not paid by a Contracting Party or Parties
arising in connection with the operation and maintenance of the Project.The term also includes the charges of the bank or banks where
the Bonds arc payable
J. "Project" means all water supply facilities described in the engineering report of Knowlton-Ratliff-English-Collins, consulting
engineers, certified Report on Proposed Bedford-Euless Water System to Trinity River Authority of Texas,dated July 1971 as such
report may be amended or supplemented in the future(the"Engineering Report").
18
Quantity,Quality,Points of Delivery,Measuring Equipment,
Unit of Measurement and Delivery Pressure
• A. Quantity. Authority agrees to sell and to deliver to City at the Delivery Point or Points hereinafter provided, and City agrees to
purchase and take at such Delivery Point or Points all treated water required by City during the period of this agreement for its own use
and for distribution to the customers served by City's distribution system,except to the extent otherwise provided herein.Authority will
use its best efforts to remain in position to furnish water sufficient for the reasonable demands of City, but its obligations shall be
limited to the amount of water available to it under its contract with District and by its commitments to other Contracting Parties and
Additional Contracting Parties. The Authority will not be obligated to furnish water to Additional Contracting Parties which will
jeopardize the Authority's ability to provide to Bedford and Euless the Average Demand during Peak Month.as projected by Figure 13
of the Engineering Report,unless such obligation has been agreed to by Council Resolution of the Cities of Bedford and Euless.
B. Quality. The water to be delivered by Authority and received by City shall be potable treated water meeting applicable purity
standards of the Texas Department of Public Health.City has satisfied itself that such water will be suitable for its needs.
C.Points of Delivery.The Point or Points of Delivery into City's distribution system shall be as designated in the Engineering Report.
D. Measuring Equipment. (a) Authority shall furnish, install, operate and maintain at its own expense the necessary metering
equipment of standard type for measuring properly the quantity of water delivered under this agreement. Such metering equipment
shall be located on Authority's supply main at a location to be designated by Authority.Such meter or meters and other equipment so
installed shall remain the property of Authority.City shall have access to such main metering equipment at all reasonable times,but the
reading, calibration and adjustment thereof shall be done only by the employees or agents of Authority. For the purpose of this
agreement,the original record or reading or the main meter shall be the journal or other record book of Authority in its office in which
the records of the employees or agents of Authority who take the reading are or may be transcribed. Upon written request of City,
Authority will give City a copy of such journal or record book, or permit City to have access to the same in the office of Authority
during reasonable business hours.
(b)Not more than once in each calendar year,on a date as near the end of such calendar year as practical,Authority shall calibrate its 1;,
main meter or meters, if requested in writing by City to do so,in the presence of a representative of City,and the parties shall jointly
observe any adjustments which are made to the meter in case any adjustments shall be necessary,and if the check meter hereinafter
provided for has been installed,the same shall also be calibrated by City in the presence of a representative of Authority and the parties
shall jointly observe any adjustment in case any adjustment is necessary. If City shall in writing request Authority to calibrate its ,''
meters and Authority shall give City written notice of the time when any such calibration is to be made and a representative of City is
not present at the time set,Authority may proceed with calibration and adjustment in the absence or any representative of City.
(c)If either party at any time observes a variation between a main delivery meter and the check meter,if any such checkmeter shall he
installed, such party will promptly notify the other party, and the parties hereto shall then cooperate to procure un immediate ,.
calibration test and joint observation of any adjustment and the main meter shall then be adjusted to accuracy.Each party shall give the
•
other party forty-eight(48)hours'notice of the time of any test of meter so that the other party may conveniently have a representative
present.
(d) If, upon any test, the percentage of inaccuracy of metering equipment is found to be in excess of two percent (2%) registration
thereof shall be corrected for a period extending back to the time when such inaccuracy began if such time is ascertainable,and if such
time is not ascertainable,then for a period extending back one-half(1/2)of the time elapsed since the last date of calibration,but in no
event farther back then a period of six(6)months.If,for any reason,the main meter is out of service or out of repair so that the amount
of water cannot be ascertained or computed from the reading thereof, the water delivered through the period such meter is out of
service or out of repair, shall be estimated and agreed upon by the parties thereto upon the basis of the best data available. For such
purpose, the best data available shall be deemed to be the registration of any checkmeter if the same has been installed and is
accurately registering. Otherwise,the best data available shall be deemed any other meters in the transmission line or treatment plant
which can be related to the main delivery meter. If no other meters in the system are operational which will allow deterillillation of
delivered quantity,then the amount of water delivered during such period may be estimated(i)by correcting the error if the percentage
of error is ascertainable by calibration tests or mathematical calculation, or(ii) by estimating the quantity of delivery by deliveries
during the preceding periods under similar conditions when the meter was registering accurately.
(e) City may,at its option and its own expense, install and operate a check meter to check the meter installed by Authority, but the
measurement of water for the purpose of this agreement shall be solely by the Authority's Meter, except in the case hereinabove
•
specifically provided to the contrary. Such check meter shall be of standard make and shall be subject at all reasonable times to
inspection and examination by any employee or agent of the Authority, but the reading,calibration and adjustment thereof shall be
made only by the City, except during any period when a check meter may be used under the provisions hereof for measuring the
amount of water delivered, in which case the reading, calibration and adjustment thereof shall be made by with like effect as if such
check meter had been furnished or installed by Authority.
*Reference to District means Tarrant Regional Water District.
19
E. Unit of Measurement. The unit of measurement for water delivered hereunder shall be 1,000 gallons of water, U.S.Standard Liquid
Measure.
F. Delivery Pressure. The water shall be delivered by Authority at the point of delivery at a pressure sufficient to transmit the water
into the City's distribution system.
Fiscal Provisions
A.Financing. Authority will pay for the cost of constructing and expanding the Project and will issue its Bonds in amounts necessary
which,together with other available funds,if any,will be sufficient to accomplish such construction or expansion.
B.Annual Requirement. It is acknowledged and agreed that payments to be made under this contract and similar contracts with other
Contracting Parties and Additional Contracting Parties will be the only source available to Authority to provide the Annual
Requirement; and that the Authority has a statutory duty to establish and from time to time to revise the charges for services to be
rendered and made available to City hereunder so that the Annual Requirement shall at all times be not less than an amount sufficient
to pay or provide for the payment of:
(a)All Operation and Maintenance Expense;
(b)The principal of and the interest on the Bonds,as such principal and interest become due,less interest to be paid out of Bond
proceeds as permitted by the Bond Resolution;
(c) During each Fiscal Year,the proportionate part of any special or reserve funds required to be established and/or maintained
by the provisions of the Bond Resolution;and
(d)An amount in addition thereto sufficient to restore any deficiency in any such funds or accounts required to be accumulated
and maintained by the provisions of the Bond Resolution.
C. Payments by City. (a)For services to be rendered to City by Authority hereunder,City agrees to pay,at the time and in the manner
herein provided, its proportionate share of the Annual Requirement, which shall be determined as follows and shall constitute City's
Annual Payment:
For each Fiscal Year during the term of this contract,City's proportionate share of the Annual Requirement shall be a percentage
obtained by dividing City's estimated treated water requirement for such year by the total estimated treated water requirement of
all Contracting Parties for such year.
The following tabulation shall apply for the Fiscal Year 2005,City's Annual Payment for the Fiscal Year 2005 shall be calculated by
multiplying City's percentage from the tabulation below times the Annual Requirement.
Estimated Percentage
2005 of
Contracting Party Uses Total
Bedford 7.500 MGD 23.018
Colleyville 5.600 MGD 17.187
Euless 5.800 MGD I7.801
Grapevine 7.083 MGD 21.738
North Richland Hills 6.600 MGD 20.256
City's Annual Payment for each succeeding Fiscal Year shall be its proportionate share of the Annual Requirement,calculated in the
manner specified above.City's Annual Payment shall be made to Authority in twelve equal monthly installments.Such payments shall
be made in accordance with and at the times set forth in an annual Schedule of Payment which will be supplied to City. At the close of
each Fiscal Year,Authority shall determine City's percentage by dividing City's actual metered usage by the total actual metered usage
of the System by all Contracting Parties. City's Adjusted Annual Payment shall be calculated by multiplying City's redetermined
percentage times the Annual Requirement. The difference between the Adjusted Annual Payment and the Annual Payment, if any,
when determined,shall be applied as a credit or a debit to City's account with Authority and shall be credited or debited to City's next
subsequent monthly statement.
(b) If, during any Fiscal Year, Authority begins providing services to an Additional Contracting Party or Parties, City's Annual
Payment for each Fiscal Year shall be determined in the following manner:
(i) Such Additional Contracting Party or Parties estimated treated water requirement for such year, or portion thereof, shall be
20
determined by Authority;
(ii) City's proportionate share or the Annual Requirement shall be a percentage, redetermined by dividing City's estimated
treated water requirement by the total annual estimated treated water requirement by all Contracting Parties, including that
estimated for the Additional Contracting Party or Parties for the remaining portion of such Fiscal Year;,
(iii) Authority shall redetermine the Annual Requirement, taking into consideration any costs incurred on account of the t
Additional Contracting Party or Parties; `
(iv)City's Annual Payment shall be redetermined by Multiplying City's redetermined percentage times the redetermined Annual
Requirement;
(v)Following the first Fiscal Year or part thereof of service to an Additional Contracting Party,City's Annual Payment shall be
determined annually in the manner set forth above,incorporating the Additional Contracting Party in the calculations on the same
basis as all parties being served by the System.
(c)City's Annual Payment shall also be redetermined,in the manner set out above,at any time during any Fiscal Year if:
(i)Additions,enlargements or improvements to the Project are constructed by Authority to provide continuing service which in
turn requires a redetermination of the Annual Requirement;or
(ii) Unusual or extraordinary expenditures for maintenance and operation are required which are not provided for in the Annual
Budget or in the Bond Resolution.
(d)On or before November I of each year,Authority shall furnish City with a schedule of the monthly payments to be made by such
City to the Authority for the ensuing Fiscal Year.City hereby agrees that it will make such payments to the Authority on or before the
10th day of each month of such Fiscal Year. If the City at any time disputes the amount to be paid by it to Authority, City shall
nevertheless promptly make the payment or payments determined by Authority, and, if it is subsequently determined by agreement,
arbitration or court decision that such disputed payments made by City should have been less,or more,Authority shall promptly revise
and reallocate the charges among all parties then being served by Authority in such manner that City will recover its overpayment or
Authority will recover the amount due it.
(e) If City's Annual Payment is redetermined as is herein provided,Authority will promptly furnish City with an updated schedule of
monthly payments reflecting such redeterminations.
Special Provisions
(a)Authority will proceed to finance and construct the Project to the end that it will be able to deliver treated water to City beginning
on June 1, 1974 with respect to Bedford and Euless and on June I, 1981 with respect to the other Contracting Parties.
(b) Title to all water supplied hereunder shall remain in Authority through the Point(s) of Delivery, and upon passing through the
Point(s) of Delivery, such title to the water shall pass to City. Each of the parties hereto agrees to save and hold the other party
harmless from all claims,demands and causes of action which may be asserted by anyone on account of the transportation and delivery
of said water while title remains in such party.
(c)It is expressly understood and agreed that any obligations on the part of Authority to complete the Project and to provide water to
City shall be conditioned upon Authority's ability to obtain all necessary material. labor and equipment and upon the ability of
Authority to finance the cost of the Project through the actual sale of Authority's Bonds.
(d) Authority shall never have the right to demand payment by City of any obligations assumed by it or imposed on it under and by
virtue of this contract from funds raised or to be raised by taxes levied by City. City's obligations under this contract shall never be
construed to be a debt of the City of such kind as to require it under the law of this State to levy and collect a tax to discharge such
obligation, it being expressly understood by the parties hereto that all payments due by City hereunder are to be made from water and
sewer revenues received by City.
(e)City represents and covenants that all payments to be made hereunder by it shall constitute"Operating Expenses"of its waterworks
and sewer system as defined in Article 1113 of the Revised Civil Statutes of Texas,as amended [now codified as Section 1502.056,
Texas Government Code],and that all such payments will constitute operating expenses of City's waterworks and sewer system.
(f)City agrees to fix and collect such rates and charges for water and sewer services to be supplied by its waterworks and sewer system
as will produce revenues in an amount equal to at least the minimum payments due under this contract and to comply with provisions
of ordinances authorizing its outstanding revenue bonds.
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(g) It is agreed and understood by the parties to this agreement that the Authority will supply,and City shall take,all of the water to be
used during the term of this agreement. However, it is understood that the City may ultimately require supplemental well supply;and
therefore, City must maintain its existing wells in good operating condition at all times. The proper maintenance of these wells will
require periodic operation and such operation is considered acceptable.Also,at such times as peak demands on the City's water system
may exceed the capabilities of the Authority's facilities to deliver treated water or at such times as the Authority's facilities may be
totally or partially out of service,the City may furnish additional water needed by using other sources of water supply available to it
for such purposes.
(h)Authority shall not be liable to City for any damages occasioned by the inability of Authority to supply all water required by City if
such inability is caused by the inability of District to deliver all water required by Authority to meet its contractual obligations.
(i) In the event Authority is sued or is placed on notice of demand for payment of a claim or claims not covered by Authority's
insurance or claims not paid by either Euless or Bedford arising in connection with the operation and maintenance of the Project,then
in any of said events,Authority shall forthwith notify City in writing as to the nature of the claim or litigation which could result in an
increase in operation and maintenance expense. City shall have ten (10) days from receipt of such written notification in which to
advise and comment to Authority concerning any claim, suit or demand for payment and Authority shall duly consider City's advice
and comments in any final disposition of said claim or demand for payment.
Force Majeure
(a) If by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this
contract,other than the obligation of City to make the payments required under(b)of this section,then if such party shall give notice
and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause
relied on, the obligation of the party giving such notice, so far as it is affected by such force majeure, shall be suspended during the
continuance of the inability then claimed, but for no longer period, and any such party shall endeavor to remove or overcome such
inability with all reasonable dispatch.The term"Force Majeure"as employed herein shall mean acts of God,strikes,lockouts,or other
industrial disturbances,acts of public enemy,orders of any kind of the Government of the United States or the State of Texas or any
civil or military authority, insurrection,riots, epidemics, landslides, lightning,earthquake, fires, hurricanes, storms, floods, washouts,
droughts, arrests,restraint of government and people,civil disturbances,explosions,breakage or accidents to machinery,pipelines or
canals,partial or entire failure of water supply,and inability on part of Authority to deliver water hereunder for any reason,or the City
to receive water hereunder for any reason, or on account of any other causes not reasonably within the control of the party claiming
such inability.
• A smaller service area is described in the Grapevine and North Richland Hills Contracts.
■ The Grapevine and the North Richland Hills Contracts specify that in order for such cities to supply water to all of their respective
water customers,such cities will utilize other sources of water supply available to it for such purposes.
(b)Recognizing that the Authority will use payments received by City and others to pay,secure and finance the issuance of the Bonds,
it is hereby agreed that upon the issuance and sale of any Bonds by the Authority to provide funds for the Project, City shall be
unconditionally obligated to pay its proportionate share of the debt service on such Bonds,regardless of whether or not the Authority is
actually delivering water to City hereunder, or whether or not City actually takes water hereunder, whether due to Force Majeure or
otherwise.Under such circumstances,the amount due to Authority from City shall be a percentage of the debt service on the Bonds for
the period of any such failure of service hereunder. Such percentage shall be the last percentage used by Authority in determining
City's Annual Payment prior to any such failure of service.This covenant by City shall be for the holders of the Bonds.
Limitation of Authority Obligation
This contract is in all things subject to the heretofore described contract between Authority and District. By the execution of this
contract,City acknowledges that it has received and reviewed a true copy of such contract.City agrees that it will take no action which
would cause a violation of Authority's contract with District. In the event that the amount of water available to Authority under its
contract with District is insufficient to supply all requirements of City,City may utilize water from other sources to fulfill its need in
amounts which Authority is unable to supply.
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Term of Contract;Modification;Notices
A. Term of Contract. This contract shall be effective upon execution hereof and shall continue in force and effect for a period of
thirty-five(35)years from the date District is capable of delivering water to Authority and thereafter shall continue in effect until
all Bonds and refunding bonds issued in lieu of the Bonds have been paid.
B.Modification. No change or modification of this contract shall be made which will affect adversely the prompt payment when
due of all moneys required to be paid by City under the terms of this contract and no such change shall be effective which would
cause a violation of any provisions of any resolution of Authority authorizing the issuance of Bonds or any bonds issued to
refund any of the Bonds.
C. Notices. All notices or communications provided for herein shall be in writing and shall be either delivered to City or
Authority, or, if mailed, shall be sent by registered mail, postage prepaid, addressed to City or Authority at their respective
addresses.
D. Severability. The parties hereto agree that if any of the provisions of this contact should be or be held to be invalid or to
contravene the laws of this State, or the United States, such fact shall not invalidate the whole agreement, but it shall be
construed as though not containing that particular provision,and the rights and obligations of the parties shall be construed and
remain in force accordingly.
E. Continued Service. The parties hereto agree that upon the expiration of this contract that City shall have the right to continued
service for an additional period of fifty(50)years, or for such other time as may be agreed,upon execution of an appropriate
agreement between City and Authority.
[Remainder of this Page Intentionally Left Blank]
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SELECTED PROVISIONS OF THE RESOLUTION
Certain provisions of the Resolution authorizing the Bonds are substantially as set forth below. Reference is hereby made to the full
and complete Resolution.For additional information,copies of the Resolution are available upon request from the Financial Advisor.
Section 5. DEFINITIONS. In each place throughout this Resolution wherein the following terms,or any of them,are
used,the same,unless the text shall indicate another or different meaning or intent, shall be construed and are intended to have
meanings as follows:
(a) "Act" and"Authority Act" mean Chapter 518, Acts of the Fifty-Fourth Legislature of the State of Texas, Regular
Session, 1955,as amended.
(b) "Additional Bonds" means the additional parity revenue bonds as defined and permitted in Sections 37 and 38 of
this Resolution.
(c) "Authority"and"Issuer"mean Trinity River Authority of Texas and any other public body or agency at any time
succeeding to the property and principal rights,power and obligations of said Authority.
(d) "Board of Authority"and"Board"mean the Board of Directors of the Authority.
(e) "Bonds" means collectively the Bonds as described and defined herein, and all substitute bonds exchanged
therefor,as well as all other substitute and replacement bonds,issued as provided in this Resolution.
(f) "Certified Public Accountant" means any certified public accountant, licensed public accountant or firm of such
public accountants of suitable experience and qualifications not regularly in the employ of the Authority, selected by the
Authority.
(g) "Cities"means the Cities of Bedford,Euless,Colleyville,Grapevine,and North Richland Hills,Texas.
(h) "Contracts"means the contracts between the Authority and the Cities as described and defined in the preamble to
this Resolution.
(i) "Credit Facility"shall mean a policy of municipal bond insurance,a surety bond or a letter or line of credit,or any
other agreement,commitment or contract authorized by the Authority as a Credit Facility issued by a Credit Facility Provider in
support of any Parity Bonds.
(j) "Credit Facility Provider" shall mean (i) with respect to any Credit Facility consisting of a policy of municipal
bond insurance or a surety bond,an issuer of policies of insurance insuring the timely payment of debt service on governmental
obligations such as the Parity Bonds,provided that a Rating Agency having an outstanding rating on the Parity Bonds would rate
the Parity Bonds fully insured by a standard policy issued by the issuer in its highest generic rating category for such obligations;
and(ii)with respect to any other Credit Facility,any financial institution,provided that a Rating Agency having an outstanding
rating on the Parity Bonds would rate the Parity Bonds in its two highest generic rating categories for such obligations if the
Credit Facility proposed to be issued by such financial institution secured the timely payment of the entire principal amount of
the series of Parity Bonds and the interest thereon.
(k) "Depository"means the bank or banks which the Authority selects(whether one or more),in accordance with law,
as its depository.
(I) "Eligible Investments"shall mean those investments in which the Authority is authorized by law,including,but not
limited to,the Public Funds Investment Act of 1987(Chapter 2256,Texas Government Code),as amended,to purchase,sell and
invest its funds and funds under its control;and provided further that Eligible Investments shall specifically include,with respect
to the investment of proceeds of any Parity Bonds, guaranteed investment contracts fully collateralized by Government
Obligations.
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(m) "Engineering Report" means the Report dated July 1, 1971, and the supplements thereto with respect to the
Authority's Tarrant County Water Project,all as described and defined in the preamble to this Resolution,as such Engineering
Report may be further amended or supplemented prior to the execution of construction contracts and changed by change orders
entered after construction contracts have been executed,or as such report may be amended or supplemented to provide expanded
service in the future.
(n) "Fiscal Year" means the twelve month period beginning December I of each year, or such other twelve month
period as may in the future be designated as the Fiscal Year of Authority.
(o) "Government Obligations"shall mean direct obligations of the United States of America,including obligations the
principal of and interest on which are unconditionally guaranteed by the United States of America.
(p) "Independent Consulting Engineer" means the Engineer or engineering firm or corporation at the time employed
by the Authority under the provisions of Section 32 of this Resolution.
(q) "Prior Lien Bond Resolution" or "Prior Lien Bond Resolutions" shall mean, individually or collectively, as
appropriate,the Authority's resolutions,as amended,heretofore adopted,that authorized the issuance of the Prior Lien Bonds.
(r) "Prior Lien Bonds"means the unpaid and unrefunded Series 1999 Bonds and Series 2003 Bonds described in the
preamble to this Resolution which will be outstanding after the delivery of the Bonds and payable from Net Revenues from the
Contracts.
(s) "Parity Bonds"means collectively the Bonds and bonds hereafter issued on a parity with the Bonds.
(t) "Paying Agents"means collectively the banks where the principal of and interest on the Parity Bonds are payable.
(u) "Rating Agency"shall mean any nationally recognized securities rating agency which has assigned a rating to the
Parity Bonds.
(v) "Required Amount"shall mean the amount so designated in Section 10 of this Resolution.
(w) "Reserve Fund"shall mean the Fund so designated in Section 10 of this Resolution.
(x) "Reserve Fund Obligations"shall mean cash, Eligible Investments,any Credit Facility,or any combination of the
foregoing.
(y) "Resolution"means this Resolution authorizing the Bonds.
(z) "System" and "Authority's System" mean all of Authority's facilities constructed pursuant to the Engineering
Report,as supplemented or amended.
Section 6. BONDS AND SECURITY THEREFOR. Subject only to the requirements of the Prior Lien Bond
Resolutions for the benefit of the Prior Lien Bonds,the Parity Bonds are and shall be secured by and payable from a first lien on
and pledge of the Net Revenues, as hereinafter defined, and the funds and accounts hereinafter confirmed or created in this
Resolution(except as described Section 10 with respect to the Reserve Fund);and the Net Revenues are further pledged to the
establishment and maintenance of said funds and accounts as hereinafter provided. The Parity Bonds are and will be secured by
and payable only from the Net Revenues,and are not secured by or payable from a mortgage or deed of trust on any properties,
whether real,personal,or mixed,constituting the System.
Section 7. REVENUE FUND. All revenues of the System received by the Authority,including the net proceeds to the
Authority of the Contracts with the Cities shall be collected and paid over promptly upon collection to the Depository and the
Authority hereby covenants and agrees so to do. Such revenues shall be held by the Depository in a special fund to be known as
the "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds Revenue Fund" (hereinafter called the
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"Revenue Fund"), and shall be disbursed or applied for the purpose of paying Operation and Maintenance Expenses of the
System,and for the making of transfers hereinafter required and in the order listed.
Section 8. (a) OPERATION AND MAINTENANCE EXPENSES. The term"Operation and Maintenance Expenses"
shall mean all costs of operation and maintenance of the Authority's System including, but not limited to, repairs and
replacements for which no special fund is created in any bond resolution, the cost of utilities, supervision, engineering,
accounting, auditing, legal services, and any other supplies, services, administrative costs and equipment necessary for proper
operation and maintenance of the Authority's System, and payments made by Authority in satisfaction of judgments resulting
from claims not covered by Authority's insurance or not paid by one of the Cities arising in connection with the operation and
maintenance of the System. The term also includes the fees of the bank or banks where the Parity Bonds are payable. Depre-
ciation shall not be considered an item of Operation and Maintenance Expense.
(b) Except for other transfers herein required,the moneys in the Revenue Fund shall be subject to withdrawal by the
Authority for the payment of Operation and Maintenance Expenses only upon checks and vouchers, stating the purpose of the
payment(which shall be in accordance with the current Annual Budget of the Authority)signed by the President of the Authority
and countersigned by its Treasurer,or signed and countersigned by such officers or employees of the Authority as may from time
to time be designated by resolution of the Board of Authority. At the end of each Authority Fiscal Year any surplus funds
remaining in the Revenue Fund shall be transferred to the Interest and Sinking Fund.
Section 9. INTEREST AND SINKING FUND. (a) For the sole purpose of paying the principal of and interest on the
Prior Lien Bonds,the Parity Bonds,and any Additional Bonds,as the same come due, there has been created and established,
and there shall be maintained (subject to the requirements of the Prior Lien Bond Resolutions while Prior Lien Bonds are
outstanding) at a Depository, a separate fund entitled the "Trinity River Authority of Texas (Tarrant County Water Project)
Revenue Bonds Interest and Sinking Fund"(hereinafter called the"Interest and Sinking Fund").
(b) The Issuer shall,immediately after the delivery of the Bonds,deposit into the Interest and Sinking Fund,from the
proceeds of sale of the Bonds,all accrued interest received upon sale of the Bonds,plus an amount sufficient to pay the interest
coming due on the Bonds during construction. Said deposit shall be held and applied solely to pay interest on the Bonds as it
becomes due and payable.
(c)Subject to the requirements of the Prior Lien Bond Resolutions,it shall be the duty of the Authority to transfer from
Net Revenues in the Revenue Fund to the credit of the Interest and Sinking Fund the amounts and at times as follows:
(1) such amounts, in equal monthly installments,made on or before the 15th day of each month hereafter,as will be
sufficient, together with any other amounts on deposit therein and available for such purpose, to pay the interest scheduled to
come due on all Parity Bonds and any Additional Bonds on the next interest payment date;and
(2) such amounts, in equal monthly installments,made on or before the 15th day of each month hereafter,as will be
sufficient, together with any other amounts on deposit therein and available for such purpose, to pay the principal of all Parity
Bonds and any Additional Bonds coming due and maturing or required to be redeemed on the next interest payment date.
(d) The Authority (subject to the requirements of the Prior Lien Bond Resolutions while Prior Lien Bonds are
outstanding) shall make such arrangements as are necessary to insure that sufficient funds from the Interest and Sinking Fund
are available at each Paying Agent to pay the principal of and interest on all Parity Bonds and Additional Bonds when due.
Section 10. RESERVE FUND. (a)For the benefit of the Prior Lien Bonds,there has been created and established,and
there shall be maintained,at The Bank of New York Trust Company,N.A.,a separate fund entitled the"Trinity River Authority
of Texas(Tarrant County Water Project)Revenue Bonds Reserve Fund"(hereinafter called the"Prior Reserve Fund"). The Prior
Reserve Fund shall be used solely for the purpose of finally retiring the last of the Prior Lien Bonds,or for paying principal of
and interest on any Prior Lien Bonds,when and to the extent the amount in the Interest and Sinking Fund is insufficient for such
purpose. The Prior Reserve Fund shall be administered as described in the Prior Lien Bond Resolutions.
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(b)There is hereby created and established and there shall be maintained on the books of the Authority a special Fund
entitled the "Trinity River Authority of Texas Tarrant County Water Project New Reserve Fund"(the "Reserve Fund"), within
which there may be established separate accounts to be held for the benefit of specific issues of Parity Bonds and not for the
benefit of all Parity Bonds. There shall be deposited into the Reserve Fund any Reserve Fund Obligations so designated by the
Authority. Reserve Fund Obligations in the Reserve Fund shall be deposited and maintained in a Depository. Reserve Fund
Obligations in the Reserve Fund shall be used solely for the purpose of retiring the last of any Parity Bonds for which the
Reserve Fund, or an account within the Reserve Fund, is held as they become due or paying principal of and interest on any
Parity Bonds when and to the extent the amounts in the Interest and Sinking Fund are insufficient for such purpose. The Reserve
Fund, in the aggregate,shall be maintained in an amount equal to the average annual principal and interest requirements of any
outstanding Parity Bonds (the "Required Amount"). The Authority may, at its option, withdraw and transfer to the Revenue
Fund,all surplus in the Reserve Fund over the Required Amount.
(c) The Authority may replace or substitute a Credit Facility for cash or Eligible Investments on deposit in the Reserve
Fund or in substitution for or replacement of any existing Credit Facility. Upon such replacement or substitution, cash or
Eligible Investments on deposit in the Reserve Fund which,taken together with the face amount of any existing Credit Facilities,
are in excess of the Required Amount may be withdrawn by the Authority, at its option,and transferred to the Revenue Fund;
provided that the face amount of any Credit Facility may be reduced at the option of the Authority in lieu of such transfer.
:---i
(d) If the Authority is required to make a withdrawal from the Reserve Fund for any of the purposes described in
it subsection(b),the Authority shall promptly notify any applicable Credit Facility Provider of the necessity for a withdrawal from
the Reserve Fund for any such purposes, and shall make such withdrawal first from available moneys or Eligible Investments
then on deposit in the Reserve Fund,and next from a drawing under any Credit Facility to the extent of such deficiency.
(e) In the event of a deficiency in the Reserve Fund,or in the event that on the date of termination or expiration of any
Credit Facility there is not on deposit in the Reserve Fund sufficient Reserve Fund Obligations, all in an aggregate amount at
least equal to the Required Amount, then the Authority shall satisfy the Required Amount by depositing Reserve Fund
Obligations into the Reserve Fund in monthly installments of not less than 1/60 of the Required Amount made on or before the
15th day of each month following such termination or expiration.
(f) In the event of the redemption or defeasance of any Parity Bonds,any Reserve Fund Obligations on deposit in the
Reserve Fund in excess of the Required Amount may be withdrawn and transferred, at the option of the Authority, to the
Revenue Fund, as a result of(i) the redemption of any Parity Bonds or(ii) funds for the payment of any Parity Bonds having
been deposited irrevocably with the paying agent or place of payment therefor in the manner described in any resolution
authorizing the issuance of Parity Bonds, the result of such deposit being that such Parity Bonds no longer are deemed to be
Outstanding under the terms of any such resolution.
(g) In the event there is a draw upon the Credit Facility,the Authority shall reimburse the Credit Facility Provider for
such draw, in accordance with the terms of any agreement pursuant to which the Credit Facility is issued, from Net Revenues,
however,such reimbursement from Net Revenues shall be subordinate and junior in right of payment to the payment of principal
of and premium,if any,and interest on the Parity Bonds.
(h) Upon the issuance of Additional Bonds the monies in the Reserve Fund shall,to the extent necessary,be increased
to the newly-established Required Amount.
Section 11. CONSTRUCTION AND ACQUISITION FUND. There has been created and there shall be established
and maintained at the Depository a separate fund to be entitled the "Trinity River Authority of Texas (Tarrant County Water
Project)Revenue Bonds Construction and Acquisition Fund"(hereinafter called the"Construction and Acquisition Fund"). The
net proceeds (after paying costs of issuance, making the deposit required to refund the Refunded Bonds and making other
required deposits) from the sale of the Bonds and all other "Improvement Bonds" in the future shall be deposited in the
Construction and Acquisition Fund and such Fund shall be subject to and charged with a lien in favor of the holders of all such
"Improvement Bonds" until the money in said Fund has been paid out as herein provided. Interest earnings derived from
•
investment of the Construction and Acquisition Fund shall become part thereof for all purposes; provided, however, that any
such earnings required to be rebated to the United States shall not be considered as interest earnings for the purposes of this
27
Resolution. The Depository shall be required to secure the Construction and Acquisition Fund in its possession by pledging
obligations of or obligations unconditionally guaranteed by the United States;such obligations at all times shall be at least equal
in market value to the amount in the Construction and Acquisition Fund in its possession.
Section 12. DISBURSEMENTS FROM CONSTRUCTION AND ACQUISITION FUND. (a) Money in the
Construction and Acquisition Fund shall be subject to disbursement by the Authority for payment of Project Costs to be incurred
in the acquisition and construction of any project for which"Improvement Bonds"are issued. Such disbursements shall be made
only upon checks stating the purpose of the payment signed and countersigned by such officers of the Authority as may from
time to time be designated by the Authority by resolution,and duly certified to the Depository. Disbursements for payments to
construction contractors and disbursements for construction material, supplies,and equipment shall be approved by a registered
professional engineer.
(b) "Project Costs" as used herein includes all acquisition costs and construction costs as those terms are generally
understood in standard accounting practice as applied to projects of this nature, and without limiting the generality of the
foregoing,it shall include purchase of equipment,property,rights in property,capitalized interest,costs of land,easements,and
rights of way, including damages to land and property, engineering, financing, financial consultants, administrative, auditing,
and legal expenses incurred in connection with the performance of the Contracts. The costs for engineering, financial
consultants, administrative, and legal expense paid from bond proceeds incurred by the Authority shall be reasonable and at
usual and customary rates. Damages to land and property, whenever accruing, adjusted under Article I, Section 17 of the
Constitution of Texas shall constitute a part of Project Costs. After completion of any Project improvements, any residue
remaining in the Construction and Acquisition Fund shall be deposited in the Interest and Sinking Fund.
Section 13. TRUST FUNDS. The Interest and Sinking Fund and the Reserve Fund shall constitute trust funds and
shall be held in trust by a Depository(subject to the requirements of the Prior Lien Bond Resolutions while Prior Lien Bonds are
outstanding)for the benefit of the holders of the Parity Bonds and Additional Bonds permitted hereunder.
Section 14. SECURITY OF FUNDS. The Authority shall cause the Depository to secure and keep secured, in the
manner required by law, all funds on deposit with it, and will cause each paying agent to secure all funds deposited with it or
them as other trust funds are secured. The Authority covenants and agrees that no money will be allowed to be or remain
deposited with the Depository unless secured as above provided.
Section 15. PLEDGE. The Contracts provide for the payment by the Cities to the Authority(a)an amount equal to all
Operation and Maintenance Expenses, (b) the amount necessary to pay all the principal of and the interest coming due on
"Bonds" (as defined in the Contracts) on each principal and/or interest payment date, (c) during each Fiscal Year, the
proportionate part of any special or reserve funds required to be established and/or maintained by the provisions of any "Bond
Resolutions",and(d)an amount in addition thereto sufficient to restore any deficiency in any of such funds or accounts required
to be accumulated and maintained by the provisions of any "Bond Resolutions". The term "Net Revenues" as used in this
Resolution shall mean and be defined as all of the gross revenues or payments received by the Authority(i)from the Cities under
the Contracts and(ii) from the parties, if any, with whom the Authority may contract in the future for supplying treated water
from the System, after deducting therefrom the amounts paid to the Authority for the purpose of paying Operation and
Maintenance Expenses,with the result that the Net Revenues shall consist of the amounts necessary to pay all principal and/or
interest coming due on the Prior Lien Bonds, and the Parity Bonds on each principal and/or interest payment date, and any
amounts payable under(c)and(d)above. Subject to the lien of the Prior Lien Bonds,the Parity Bonds and the interest thereon
are and shall be payable from and secured by a first lien on and pledge of said Net Revenues,and said Net Revenues are hereby
pledged for such purpose and to the establishment and maintenance of the Interest and Sinking Fund and the Reserve Fund.
Section 16. INVESTMENT OF FUNDS. Subject to the requirements of the Prior Lien Bond Resolutions while Prior
Lien Bonds remain outstanding, the money in all Funds maintained hereunder shall be invested and reinvested in Eligible
Securities which mature in not more than fifteen(15)years from the date of their purchase. The foregoing notwithstanding,the
Reserve Fund may be invested as described in Section 10. All income and profits from the investment of all funds hereunder
shall be deposited in the Interest and Sinking Fund not later than the January 15 or July 15 next following the receipt thereof.
•
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Section 17. PREPARATION OF BUDGET. Not less than forty(40)days before the commencement of each Fiscal
Year while any of the Parity Bonds are outstanding and unpaid, the Authority will prepare and file with the Cities the annual
budget (herein called "Annual Budget") of Operation and Maintenance Expenses for the ensuing Fiscal Year, and, except as
otherwise provided, the total expenditures in any division thereof will not exceed the total expenditures in the corresponding
division in the Annual Budget. The Authority covenants that the current Operation and Maintenance Expenses incurred in any
Fiscal Year will not exceed the reasonable and necessary amount of such expenses, and that it will not expend any amount or
incur any obligation for maintenance, repair, and operation in excess of the amounts provided for current Operation and
Maintenance Expenses in the Annual Budget;provided,however,that if at any time the Board of Authority shall determine that
the amount of the appropriation for any item in the Annual Budget is in excess of the amount which will be required for such
term, the Board of Authority may reduce such appropriation and make appropriation for any item or items not covered by the
Annual Budget or increase the appropriation for any other item or items by an amount not exceeding the amount of such
reduction;and provided further, that the Board of Authority may at any time adopt an amended or supplemental budget for the
remainder of the then current Fiscal Year in case of an emergency caused by some extraordinary occurrence which shall be
clearly defined in such resolution. Any such supplemental budget shall be filed immediately with the Cities.
Section 18. ACCOUNTING AND REPORTING. The Authority covenants that proper books of record and account
will be kept in which true,full,and correct entries will be made of all income,expense,and transactions of and in relation to the
System,and each and every part thereof. Within three months after each full Fiscal Year,a statement certified as correct by a
Certified Public Accountant showing the Gross Revenues and the Operation and Maintenance Expenses for such Fiscal Year,
shall be furnished to the Cities, and to the original purchasers of the Bonds. Each such audit will be available during regular
office hours at the administration offices of the Authority for inspection by any holder of any of the Bonds.
Section 19. PUBLIC INSPECTION. The Authority further covenants and agrees that the System,and each and every
part thereof, and all books, records, accounts, documents, and vouchers relating to the construction, operation, maintenance,
repair,improvement,and extension thereof,will at all times be open to inspection by the Cities.
Section 20. PAYMENT OF PARITY BONDS AND INTEREST THEREON. The Authority covenants and agrees
that,out of the pledged Net Revenues,it will duly and punctually pay,or cause to be paid,the principal of every Parity Bond and
the interest thereon, on the date and at the place and in the manner specified in the Parity Bonds and in any interest coupons
thereto appertaining,and that it will faithfully do and perform and at all times fully observe any and all covenants,undertakings,
and provisions contained herein or in any Parity Bond.
Section 21. LEGAL ABILITY. The Authority represents that it is a conservation and reclamation district,a political
subdivision of the State of Texas, and a governmental agency and body politic and corporate, duly created, organized, and
existing under the Constitution and laws of the State of Texas and has proper authority from all other public bodies and
authorities,if any,having jurisdiction thereof to construct,acquire,operate,maintain,improve,extend,better,repair,renew,and
replace the System as herein described, and to levy and collect rates, tolls, rents, fees, and other charges, and to pledge its
revenues in the manner and form as herein done or intended,and that all corporate action on its part to that end has been duly
and validly taken. The Authority covenants and agrees that it will at all times maintain its corporate existence and maintain a
lawful Board of Directors,and at all times function and act in the best interest of the System and the owners and holders of the
Parity Bonds.
Section 22. CONSTRUCTION AND OPERATION. The Authority further covenants that it will forthwith proceed to
acquire and construct the improvements,betterments,extensions,and replacements to the System for which the Bonds are being
issued as soon as practicable in accordance with plans and specifications which have been prepared by the Independent
Consulting Engineer, and thereafter each and every part of the System will be continuously operated by the Authority in an
efficient and economical manner and will be kept in thorough repair and maintained in a high state of operating efficiency and in
such manner that the interest of the Cities,the people of the State of Texas,the bondholders or owners,and the Authority will be
promoted.
Section 23. OPERATION OF THE SYSTEM. The Authority shall use its best efforts to see that the System is
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properly and efficiently operated.
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Section 24. CONTRACTORS. Authority shall require each person,firm,or corporation with whom(or which)it may
contract for construction in connection with the System to furnish a performance bond in the full amount of any contract and a
payment bond as required by law, and to carry such workmen's compensation or employers' liability insurance as may be
required by law and such public liability, property damage, and builders' risk insurance, if any, as may be appropriate and
necessary. The Authority further covenants and agrees that the proceeds of any such performance bond will forthwith, upon
receipt of such proceeds,be applied toward the completion of the contract in connection with which such performance bond shall
have been furnished.
Section 25. COVENANT TO MAINTAIN SUFFICIENT INCOME. To the end that Authority income will be
sufficient to pay the Parity Bonds and the interest thereon when due,the Authority will keep in effect and enforce the Contracts,
and will cause the System to be operated and maintained at an annual cost that will be within its income other than the income
required to pay the Parity Bonds and the interest thereon and the fees of each paying agent and Paying Agent/Registrar. The
Authority will not voluntarily consent to any amendment to the Contracts which would reduce the amounts payable thereunder
or extend the time of the payment of such amounts or which would in any manner impair or adversely affect the rights of the
holders or owners of the Parity Bonds from time to time. If any of the Cities fails to make payments as required by the Contracts
and if it shall appear that enforcement of the Contracts has become ineffective or will be ineffective to the extent that a default in
payment of principal of or interest on the Parity Bonds occurs or is threatened, the Authority will take all necessary action to
preserve and protect the rights of the holders or owners of the Parity Bonds and to assure payment of the principal thereof and
the interest thereon.
Section 26. NO OTHER LIENS. The Authority further covenants that there is not now outstanding,except as regards
the Prior Lien Bonds and any Parity Bonds,and that the Authority will not at any time while the Parity Bonds are outstanding,
create or allow to accrue or to exist any lien upon the System, or any rights owned, or the revenues pledged herein to the
payment of the principal of and interest on the Parity Bonds,at any time derived from the operation thereof,or any of its Funds,
except as authorized by Sections 37 and 38 of this Resolution in connection with Additional Bonds and other bonds; that the
security of the Parity Bonds will not be impaired in any way as a result of any action or any non-action on the part of the
Authority,its Board of Directors,or officers,or any thereof,and that the Authority has,and will,subject to the provisions hereof,
continuously preserve good and indefeasible title to the System and each and every part thereof. The Authority shall not issue
additional bonds on a parity with the Prior Lien Bonds.
Section 27. KEEP FRANCHISES AND PERMITS IN EFFECT. The Authority further covenants that no franchises,
permits, privileges,or easements will be allowed to lapse or be forfeited so long as the same shall be necessary for the proper
operation of the System.
Section 28. GOVERNMENTAL REQUIREMENTS; LIENS; CLAIMS. The Authority covenants that it will duly
observe and comply with all valid requirements of any governmental authority relative to the System or any part thereof,and that
it will pay or cause to be discharged,or will make adequate provision to satisfy and discharge,all lawful claims and demands for
labor,materials,supplies,or other objects which if unpaid,might by law become a lien upon such System or any part thereof or
the revenue therefrom;provided,however,that nothing in this Section contained shall require the Authority to pay or cause to be
discharged,or make provision for,any such lien or charge,so long as the validity thereof shall be contested in good faith and by
appropriate legal proceedings.
Section 29. FURTHER ASSURANCE. The Authority covenants that it will take such further action as may be
required to carry out the purposes of this Resolution and to assure its validity.
Section 30. SALE AND LEASE OF PROPERTY. (a) The Authority covenants that so long as any of the Parity
Bonds or interest payable thereon shall be outstanding,and except as in this Section otherwise permitted,it will not sell,lease,or
otherwise dispose of or encumber any part of the System except as provided herein.
(b) The Authority may from time to time dispose of any rights, machinery, fixtures, apparatus,tolls, instruments,or
other movable property and any materials used in connection therewith, if the Authority shall determine that such are no longer
needed or are no longer useful in connection with the operation and maintenance of the System. The Authority may from time to
time sell such real estate that is not needed or serves no useful purposes in connection with the maintenance and operation of the
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System. The proceeds of any sale of real or personal property acquired from the proceeds of the Parity Bonds shall be deposited
in the Revenue Fund.
•
(c) The Authority may lease any of its lands for any purpose, if such lease or the use of such lands will not be
detrimental to the operation and maintenance of the System. It may also lease any of its real property for oil,gas,and mineral
purposes. No lease shall be made which will result in any damage to or substantial diminution of the value of other property of
the Authority. The rental to be charged under all such leases shall be not less than the fair and reasonable rental in relation to the
character and value of the property leased. All rentals, revenues,receipts,and royalties derived by the Authority from any and
all leases so made,shall be deposited in the Revenue Fund.
•
(d) It is covenanted and agreed by Authority that no such property of any nature shall be sold or leased by Authority
unless, prior to any action taken by Authority concerning such sale or leasing, Authority shall procure the advice and recom-
mendation in writing of a registered professional engineer concerning such proposed sale or leasing.
Section 31. SUCCESSOR PAYING AGENTS FOR COUPON BONDS. If any of the paying agents for any Parity
Bonds which are coupon bonds payable to bearer,or their successors,become unable for any reason to act as a paying agent for
said bonds,the Authority covenants that it will appoint a bank in the same city as the paying agent initially appointed,where said
bonds and interest thereon shall be paid.
Section 32. INDEPENDENT ENGINEER. (a) The Authority covenants that,until the Parity Bonds and the interest
thereon shall have been paid or provision for such payment shall have been made, it will, for the purpose of performing and
carrying out the duties imposed on the Independent Consulting Engineer by this Resolution,employ an independent engineer or
engineering firm or corporation having a favorable repute for skill and experience in such work.
(b) The Authority covenants that it will at all appropriate times cause the Independent Consulting Engineer to submit
and give all necessary or desirable advice and recommendations concerning renewals,replacements,extensions,betterments,and
improvements for the System,to the end that the System shall be operated and maintained in the most efficient and satisfactory
manner. Further,Authority shall cause the Independent Consulting Engineer to make in writing a full survey,review,and report
on the physical condition of the System once every three years.
(c) Authority further covenants that it will cause the Independent Consulting Engineer to make an annual report to it
which shall set forth such Engineer's recommendations and advice as to(I)the proper maintenance,repair,and operation of the
System,including their findings as to whether or not the properties of the System have been maintained in good repair and sound
operating condition; (2) the extensions, improvements, renewals, and replacements which should be made during the ensuing
Fiscal Year; (3) the amounts and types of insurance which should be carried by the Authority on the properties; and (4) any
revisions or changes of rates,fees,and charges.
(d) The expense incurred under this Section 32 shall constitute Operation and Maintenance Expenses.
Section 33. PARITY BONDS AND INTEREST NOT PAYABLE FROM TAXES. The holders and owners of the
Parity Bonds and the interest payable thereon shall never have the right to demand payment thereof out of funds raised or to be
raised by taxation,or from any source other than the Net Revenues as defined and described herein.
Section 34. INSURANCE COVERAGE. The Authority covenants that it will at all times keep insured such of the
System's plants,structures,buildings,stations,machinery,equipment,apparatus,pipelines,and equipment as are usually insured
by corporations operating like properties, with a responsible insurance company or companies, against risks, accidents, or
casualties against which and to the extent insurance is usually carried by corporations operating like properties,and will also at
all times maintain workmen's compensation insurance and insurance against public liability and property damages, in a
reasonable amount with responsible insurance companies;provided, however, that at any time while any contractor engaged in
construction work shall be fully responsible therefor, the Authority shall not be required to carry such insurance. All such
policies shall be open to the inspection of the bondholders and their representatives at all reasonable times.
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•
Section 35. INSURANCE PROCEEDS. In the event of any loss of or damage to the System the Authority covenants
that it will reconstruct or repair the destroyed or damaged portion of the property and will apply the proceeds of the insurance
policies covering such loss or damage solely for that purpose. The Authority covenants that it will begin such work of recon-
struction or repair promptly after such loss or damage shall occur and will continue and properly complete the same as
expeditiously as possible and will pay or cause to be paid all costs and expenses in connection therewith so that the same shall be
so completed and the property be free and clear of all mechanics'and other liens and claims. The Authority agrees that it will
procure the advice and recommendation in writing of a registered professional engineer concerning such reconstruction before it
is undertaken.
Section 36. UNUSED INSURANCE PROCEEDS. Any insurance proceeds remaining after the completion of and
payment for any such reconstruction or repair shall be deposited in the Revenue Fund.
Section 37. ADDITIONAL BONDS. As used in this resolution,the following additional definitions shall apply:
(a) "Completion Bonds" means any bonds issued to complete construction of the System to enable the Authority to
provide water supply services to the Cities and to others, as the System is described in the Engineering Report defined in the
Contracts.
(b) "Improvement Bonds" means bonds issued for improvements, betterments, extensions, and replacements of the
System.
(c) "Special Project Bonds"means any bonds issued to finance construction and/or acquisition of facilities which will
not constitute a part of the System and which will not be paid out of revenues from the Contracts.
(d) "Refunding Bonds" means any bonds issued for the purpose of refunding all or a part of the Prior Lien Bonds,
Parity Bonds or Additional Bonds.
(e) "Additional Bonds"means and includes Completion Bonds,Improvement Bonds,and Refunding Bonds.
Section 38. COMPLETION BONDS AND IMPROVEMENT BONDS. The Authority reserves the right to issue
Completion Bonds and Improvement Bonds payable from and secured by a pledge of the Net Revenues,on a parity of lien with
the Parity Bonds,or junior to the Parity Bonds,or a portion of them may be such first lien bonds and a portion may such junior
lien bonds. The Completion Bonds and Improvement Bonds may be issued in one or more series or installments,and from time
to time as authorized by the Board of Authority, provided, however, that no installment or series of Completion Bonds or
Improvement Bonds,if it is on a parity with the lien of the Parity Bonds,shall be issued unless:
(a) A certificate is executed by the President and Secretary of the Board of Authority to the effect that no default exists
in connection with any of the covenants or requirements of the resolutions authorizing the issuance of all then outstanding bonds
which are secured by and payable from the Net Revenues;
(b) A certificate is executed by the President and the Secretary of the Board of Authority to the effect that the Interest
and Sinking Fund and the Reserve Fund contain the amounts then required to be on deposit therein;
(c) The then proposed Completion Bonds or Improvement Bonds are made to mature on August 1 and/or February I
of each of the years in which they are scheduled to mature.
Section 39. SPECIAL PROJECT BONDS. Special Project Bonds payable from and secured by revenues may be
issued by the Authority for the purpose of providing additional facilities to enable the Authority to render service to other users,
provided that such Special Project Bonds are not payable from or secured by a pledge of Net Revenues. Special Project Bonds
may be additionally secured by a mortgage or deed of trust lien upon only the physical properties of the project purchased or
constructed with the proceeds of such bonds.
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Section 40. INCREASE IN RESERVE FUND. If Completion Bonds or Improvement Bonds are issued,the maximum
amount required to be deposited and maintained in the Reserve Fund shall be increased so that the aggregate amount to be
accumulated in the Reserve Fund shall be no less than the average annual principal and interest requirements for all then out- '
standing Parity Bonds,Completion Bonds,or Improvement Bonds,and for the installment or series of bonds then proposed to be
issued. Such average annual requirements shall be calculated as of the date of any such Additional Bonds. Provided,as of the
date of any such Additional Bonds, it shall be sufficient if the aggregate amount in the Reserve Fund is equal to the average
annual requirement on the Parity Bonds and Additional Bonds outstanding and to be outstanding,and if the amount exceeds such
average annual requirement, any surplus in the Reserve Fund shall be transferred to the Interest and Sinking Fund, unless
otherwise required by any bond resolution.
Section 41. TAX BONDS. No provisions in this Resolution shall in any way affect the statutory right of the Authority
to issue bonds supported wholly by ad valorem taxes.
Section 42. REFUNDING BONDS. The Authority reserves the right to issue Refunding Bonds to refund any
outstanding bonds secured by a pledge of the Net Revenues from the Contracts and any amendments thereof.
Section 43. DEFAULT PROVISIONS AND REMEDIES. In the event of a default or a threatened default in the
payment of principal of or interest on the Parity Bonds, any court of competent jurisdiction may, upon petition of holders or
owners of twenty-five per cent of the outstanding Parity Bonds, appoint a receiver with authority to collect and receive all
income from the System, employ, and discharge agents, employees, and consultants of the Authority, take charge of pledged
funds on hand and manage the proprietary affairs of the Authority without consent or hindrance by the Board of Authority. Such
receiver may also be authorized to make contracts for providing water treatment services or renew such contracts with the
approval of the court appointing him. The Court may vest the receiver with such other powers and duties as the court may find
necessary for the protection of the holders or owners of the Parity Bonds.
Section 44. OTHER REMEDIES; REMEDIES NOT WAIVED. No remedy herein specified is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy available to the holders or owners of the said Parity Bonds,or now or hereafter existing at law or
in equity,or by statute. No delay or omission to exercise any right or power shall impair any such right or power or shall be con-
strued to be a waiver of any such default or acquiescence therein,and every such right and power may be exercised from time to
time and so often as may be deemed expedient.
Section 45. AMENDMENTS OF RESOLUTION BY AUTHORITY. Without any prior action by or notice to the
holders or owners of the Parity Bonds,Authority may,from time to time,and at any time,amend this Resolution:
(a) to add to the covenants and undertakings of the Authority contained in this Resolution such additional covenants
and undertakings as may be authorized or permitted by law;and
(b) to cure any ambiguous, defective, or inconsistent provisions of this Resolution and to accomplish any other
purposes not inconsistent with the provisions of this Resolution and which shall not impair the security afforded hereby.
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Aimik
Section 46. AMENDMENTS BY CONSENT. The holders and owners of Parity Bonds and Additional Bonds
aggregating in principal amount two-thirds of the aggregate principal amount of the Parity Bonds and Additional Bonds at the
time outstanding(but not including in any case any Parity Bonds or Additional Bonds which may then be held or owned by or
for the account of the Authority)shall have the right from time to time to approve an amendment of this Resolution which may
be deemed necessary or desirable by the Authority; provided, however, that no amendment, without the consent of the holders
and owners of all of the outstanding Parity Bonds and Additional Bonds,shall:
(a) Make any change in the maturity of the Parity Bonds
or Additional Bonds;
(b) Reduce the rate of interest borne by any of the
Parity Bonds or Additional Bonds;
(c) Reduce the amount of the principal payable on the
Parity Bonds or Additional Bonds;
(d) Modify the terms of payment of principal of or
interest on the Parity Bonds or Additional Bonds,or
any of them,or impose any conditions with respect to
such payment;
(e) Affect the rights of the holders or owners of less
than all of the Parity Bonds and Additional Bonds
then outstanding;
(f) Change the minimum percentage of the principal amount
of Parity Bonds and Additional Bonds necessary for
consent to such amendment.
Section 47. NOTICE REQUIRED. If at any time the Authority shall desire to amend this Resolution under Section
46,the Authority shall cause notice of the proposed amendment to be published in a financial newspaper or journal published in
the City of New York,New York,once during each calendar week for at least four successive calendar weeks. Such notice shall
briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file with each paying agent for the
Parity Bonds and Additional Bonds and with the Secretary of the Board of Authority for inspection by all holders or owners of
Parity Bonds and Additional Bonds. Such publication is not required,however, if notice in writing is given to each holder and
owner of Parity Bonds and Additional Bonds.
Section 48. ADOPTION OF AMENDMENT. Whenever at any time not less than thirty(30)days and within one year
from the date of the first publication of said notice or other service of written notice the Authority shall receive an instrument or
instruments executed by the holders and owners of at least two-thirds in aggregate principal amount of Parity Bonds and
Additional Bonds then outstanding, which instrument or instruments shall refer to the proposed amendment described in said
notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with
the paying agents and Authority,the Authority may adopt the amendatory resolution in substantially the same form.
Section 49. EFFECTIVE UPON ADOPTION. Upon the adoption of any amendatory resolution pursuant to the
provisions hereof, this Resolution shall be deemed to be amended in accordance with such amendatory resolution, and the
respective rights, duties, and obligations under this Resolution of the Authority and all the holders or owners of outstanding
Parity Bonds and Additional Bonds shall thereafter be determined,exercised,and enforced hereunder, subject in all respects to
such amendments.
Section 50. REVOCATION OF CONSENT. Any consent given by the holder or owner of a Parity Bond or
Additional Bond pursuant to the provisions hereof shall be irrevocable for a period of six months from the date of the first
publication of the notice provided for herein,and shall be conclusive and binding upon all future holders and owners of the same
Parity Bond or Additional Bond during such period. Such consent may be revoked at any time after six months from the date of
the first publication of such notice by the holder or owner who gave such consent, or by a successor in title, by filing notice
34
thereof with the paying agent and the Authority,but such revocation shall not be effective if the holders or owners of two-thirds
aggregate principal amount of the Parity Bonds and Additional Bonds outstanding as herein defined have,prior to the attempted
,:,,
revocation,consented to and approved the amendment.
Section 51. PROOF OF OWNERSHIP. The fact of the holding of Parity Bonds and Additional Bonds by any
.„,:._
Bondholder and the amount and numbers of such Parity Bonds and Additional Bonds,and the date of his holding same may be
proved by the affidavit of the person claiming to be such holder or owner, or by a certificate executed by any trust company,
bank,banker,or any other depository,wherever situated showing that on the date therein mentioned such person had on deposit
with such trust company,bank,banker,or other depository, the Parity Bonds or Additional Bonds described in such certificate.
The Authority may conclusively assume that such ownership continues until written notice to the contrary is served upon the
Authority. All matters relating to the ownership of fully registered Parity Bonds and Additional Bonds shall be ascertained from
the registration books therefor kept by the registrar.
Section 52. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be deemed to be paid, retired,
and no longer outstanding (a "Defeased Bond") within the meaning of this Resolution, except to the extent provided in
subsection(d)of this Section, when payment of the principal of such Bond,plus interest thereon to the due date(whether such
due date be by reason of maturity or otherwise)either(i) shall have been made or caused to be made in accordance with the
terms thereof,or(ii)shall have been provided for on or before such due date by irrevocably depositing with or making available
to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument(the"Future Escrow Agreement")for
such payment(1) lawful money of the United States of America sufficient to make such payment or(2) Defeasance Securities
that mature as to principal and interest in such amounts and at such times as will insure the availability,without reinvestment,of
sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying
::-:;:'
Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and payable. At such time as a
Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be
secured by,payable from,or entitled to the benefits of,the Net Revenues as provided in this Resolution,and such principal and
interest shall be payable solely from such money or Defeasance Securities. Notwithstanding any other provision of this
Resolution to the contrary, it is hereby provided that any determination not to redeem Defeased Bonds that is made in
conjunction with the payment arrangements specified in subsection 52(a)(i)or(ii)shall not be irrevocable,provided that:(I)in
the proceedings providing for such payment arrangements,the Issuer expressly reserves the right to call the Defeased Bonds for
redemption; (2) gives notice of the reservation of that right to the owners of the Defeased Bonds immediately following the
making of the payment arrangements;and(3)directs that notice of the reservation be included in any redemption notices that it
authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer also be
invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, and all income from such
Defeasance Securities received by the Paying Agent/Registrar that is not required for the payment of the Bonds and interest
thereon, with respect to which such money has been so deposited,shall be turned over to the Issuer,or deposited as directed in
writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the
payment of Defeased Bonds may contain provisions permitting the investment or reinvestment of such moneys in Defeasance
Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements specified in subsection
52(a)(i)or(ii). All income from such Defeasance Securities received by the Paying Agent/Registrar which is not required for the
payment of the Defeased Bonds, with respect to which such money has been so deposited, shall be remitted to the Issuer or
deposited as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States of America,
including obligations that are unconditionally guaranteed by the United States of America., (ii) 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 of the purchase thereof are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent,and(iii)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 Issuer adopts or approves the proceedings authorizing the financial arrangements are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent.
35
46.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall perform the
services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been defeased,and the Issuer shall make
proper arrangements to provide and pay for such services as required by this Resolution.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a maturity,the
Paying Agent/Registrar shall select,or cause to be selected,such amount of Bonds by such random method as it deems fair and
appropriate.
Section 53. DAMAGED, MUTILATED, LOST,STOLEN,OR DESTROYED BONDS. (a) Replacement Bonds. In
the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed,the Paying Agent/Registrar shall cause to be
printed,executed,and delivered,a new bond of the same principal amount,maturity,and interest rate,as the damaged,mutilated,
lost,stolen,or destroyed Bond,in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,mutilated,lost,stolen,or destroyed
Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss,theft,or destruction of
a Bond,the registered owner applying for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto.
Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss,theft,or destruction of such Bond,as the case may be. In every case of
damage or mutilation of a Bond,the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so
damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall
have matured,and no default has occurred which is then continuing in the payment of the principal of,redemption premium,if
any,or interest on the Bond,the Issuer may authorize the payment of the same(without surrender thereof except in the case of a
damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above
provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,the Paying Agent/Registrar
shall charge the registered owner of such Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost,stolen,or destroyed
shall constitute a contractual obligation of the Issuer whether or not the lost,stolen,or destroyed Bond shall be found at any time,
or be enforceable by anyone,and shall be entitled to all the benefits of this Resolution equally and proportionately with any and
all other Bonds duly issued under this Resolution.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter B, Chapter 1206,Texas Government
Code,this Section shall constitute authority for the issuance of any such replacement bond without necessity of further action by
the governing body of the Issuer or any other body or person,and the duty of the replacement of such bonds is hereby authorized
and imposed upon the Paying Agent/Registrar,and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the
form and manner and with the effect,as provided in Section 4 for Bonds issued in conversion and exchange for other Bonds.
Section 54. COVENANTS REGARDING TAX-EXEMPTION.The Issuer covenants to take any action necessary to
assure,or refrain from any action which would adversely affect, the treatment of the Bonds as obligations described in section
103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof,the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds(less amounts
deposited to a reserve fund,if any)are used for any"private business use,"as defined in section 141(6)(6)of the Code
or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the Issuer, with
respect to such private business use,do not,under the terms of this Resolution or any underlying arrangement,directly
or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bonds, in
contravention of section 141(b)(2)of the Code;
(b) to take any action to assure that in the event that the "private business use"described in subsection(a)
hereof exceeds 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any)then the
36
amount in excess of 5 percent is used for a"private business use"which is"related"and not"disproportionate,"within
the meaning of section I41(b)(3)of the Code,to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of$5,000,000,or 5 percent of
the proceeds of the Bonds(less amounts deposited into a reserve fund, if any)is directly or indirectly used to finance
loans to persons,other than state or local governmental units,in contravention of section 141(c)of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds being treated as "private
activity bonds"within the meaning of section 141(b)of the Code;
(e) to refrain from taking any action that would result in the Bonds being"federally guaranteed"within the
meaning of section 149(6)of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to
replace funds which were used,directly or indirectly,to acquire investment property(as defined in section 148(b)(2)of
the Code) which produces a materially higher yield over the term of the Bonds, other than investment property
acquired with--
(I) proceeds of the Bonds invested for a reasonable temporary period until such proceeds are
needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund,within the meaning of section 1.148-1(b)of
the Treasury Regulations,and
(3) amounts deposited in any reasonably required reserve or replacement fund to the extent such
amounts do not exceed 10 percent of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds,as
may be necessary,so that the Bonds do not otherwise contravene the requirements of section 148 of the Code(relating
to arbitrage)and,to the extent applicable,section 149(d)of the Code(relating to advance refundings);
(h) to pay to the United States of America at least once during each five-year period(beginning on the date
of delivery of the Bonds)an amount that is at least equal to 90 percent of the"Excess Earnings,"within the meaning of
section 148(f)of the Code and to pay to the United States of America,not later than 60 days after the Bonds have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f)of
the Code.
In order to facilitate compliance with the above covenant(h),a"Rebate Fund" is hereby established by the Issuer for
the sole benefit of the United States of America,and such Fund shall not be subject to the claim of any other person, including
without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of
the Code.
The Issuer understands that the term"proceeds"includes"disposition proceeds"as defined in the Treasury Regulations
and,in the case of refunding bonds,transferred proceeds(if any)and proceeds of the refunded bonds expended prior to the date
of issuance of the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto.
In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code,as applicable
to the Bonds,the Issuer will not be required to comply with any covenant contained herein to the extent that such modification or
expansion, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter
promulgated which impose additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the
additional requirements to the extent necessary,in the opinion of nationally recognized bond counsel,to preserve the exemption
from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention,the Issuer
hereby authorizes and directs the General Manager of the Issuer to execute any documents,certificates or reports required by the
37
Code and to make such elections,on behalf of the Issuer,which may be permitted by the Code as are consistent with the purpose
for the issuance of the Bonds.
Section 55. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. The Issuer
covenants to account for the expenditure of sale proceeds and investment earnings to be used for the purposes described in
Section 1 of this Resolution(the"Project")on its books and records in accordance with the requirements of the Internal Revenue
Code. The Issuer recognizes that in order for the proceeds to be considered used for the reimbursement of costs,the proceeds
must be allocated to expenditures within 18 months of the later of the date that(1)the expenditure is made,or(2)the Project is
completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing
notwithstanding, the Issuer recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale
proceeds or investment earnings must be expended no more than 60 days after the earlier of(1) the fifth anniversary of the
delivery of the Bonds,or(2)the date the Bonds are retired.The Issuer agrees to obtain the advice of nationally-recognized bond
counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-
exempt status of the Bonds. For purposes hereof,the issuer shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income
of the interest.
Section 56. DISPOSITION OF PROJECT.The Issuer covenants that neither the property constituting the Project to be
financed with the proceeds of the Bonds, nor the projects financed with the proceeds of the Refunded Bonds, will be sold or
otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation,unless the Issuer obtains
an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt
status of the Bonds. For purposes of the foregoing,the portion of the property comprising personal property and disposed in the
ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof,
the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not
adversely affect the excludability for federal income tax purposes from gross income of the interest.
Section 57. CUSTODY,APPROVAL,BOND COUNSEL'S OPINION,CUSIP NUMBERS AND INSURANCE. The
President of the Board of Directors and the General Manager of the Issuer are hereby authorized to have control of the Bonds
issued hereunder and all necessary records and proceedings pertaining to the Bonds pending their delivery and the approval of
the Bonds by the Attorney General of the State of Texas. The Comptroller of Public Accounts is requested to cause the Bonds to
be registered in accordance with law. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP
numbers may,at the option of the Issuer, be printed on the Bonds or on any Bonds issued and delivered in conversion of and
exchange or replacement of any Bond, but neither shall have any legal effect, and shall be solely for the convenience and
information of the registered owners of the Bonds. If insurance is obtained on any of the Bonds, the Bonds shall bear, as
appropriate and applicable,a legend concerning insurance as provided by the Insurer.
Section 58. FURTHER PROCEDURES.The President,Vice President and Secretary of the Board of Directors of the
Issuer,the General Manager(as the"Authorized Officer"of the Issuer)and all other officers,employees and agents of the Issuer,
and each of them,shall be and they are hereby expressly authorized,empowered and directed from time to time and at any time
to do and perform all such acts and things and to execute,acknowledge and deliver in the name and under the corporate seal and
on behalf of the Issuer a Letter of Representation with DTC regarding the Book-Entry Only System,the Paying Agent/Registrar
Agreement with the Paying Agent/Registrar and all other instruments,whether or not herein mentioned,as may be necessary or
desirable in order to carry out the terms and provisions of this Resolution,the Letter of Representation,the Bonds,the sale of the
Bonds and the Official Statement. Notwithstanding anything to the contrary contained herein, while the Bonds are subject to
DTC's Book-Entry Only System and to the extent permitted by law,the Letter of Representation is hereby incorporated herein
and its provisions shall prevail over any other provisions of this Resolution in the event of conflict. In case any officer whose
signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery.
Section 59. CONTINUING DISCLOSURE OF INFORMATION. (a) As used in this Section, the following terms
have the meanings ascribed to such terms below:
"MSRB"means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized
municipal securities information repository within the meaning of the Rule from time to time.
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"Rule"means SEC Rule 15c2-12,as amended from time to time.
"SEC'means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department, officer, or agency
thereof as,and determined by the SEC or its staff to be,a state information depository within the meaning of the Rule from time
to time.
(b)Pursuant to a Continuing Disclosure Agreement by and between the Issuer and the Cities, the Issuer and the Cities
have undertaken for the benefit of the beneficial owners of the Bonds, to the extent set forth therein, to provide continuing
disclosure of financial information and operating data with respect to the Cities in accordance with the Rule as promulgated by
the SEC.
•
(c) The Issuer shall,for the benefit of the beneficial owners of the Bonds,undertake to notify any SID and either each
NRMSIR or the MSRB, in a timely manner,of any of the following events with respect to the Bonds, if such event is material
within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
;
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit enhancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers,or their failure to perform;
F. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
G. Modifications to rights of holders of the Bonds;
H. Bond calls;
I. Defeasances;
J. Release,substitution,or sale of property securing repayment of the Bonds;and
K. Rating changes.
Section 60. SECURITY INTEREST. Chapter 1208,Government Code,applies to the issuance of the Bonds and the
pledge of the Net Revenues granted by the Issuer under Sections 6 and 15 of this Resolution,and is therefore valid,effective,and
perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the Net
Revenues granted by the Issuer under Sections 6 and 15 of this Resolution is to be subject to the filing requirements of Chapter 9,
Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security
interest in said pledge,the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to
comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
Section 61. EXPIRATION OF AUTHORIZATION. The authority of the General Manager,as Authorized Officer,to
execute a bond purchase agreement as described in Section 2(c)of this Resolution shall expire on the one-year anniversary date
of the adoption of this Resolution by the Board.
Section 62. REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and all parts of any resolutions which are
in conflict or inconsistent with this Resolution are hereby repealed and shall be of no further force or effect to the extent of such
conflict or inconsistency.
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THE AUTHORITY
THE AUTHORITY'S ACTIVITIES
1. Master Planning. After a series of public hearings,the Authority adopted the original master plan in April 1958. The purpose of
the Master Plan is to define and provide a course of action for the Authority to achieve water and soil conservation goals for which
purpose the Authority was established by the State of Texas Legislature. The Master Plan goals can generally be described as: to
improve the quality of water within the Trinity River Basin in order to provide supplies of good quality water for all beneficial
purposes,conserve water and soil resources,reduce flooding,promote water oriented recreation,preserve natural areas,promote the
diversity and productivity of aquatic life, and foster an understanding of the complex interrelationships among people, resources,
economy and the environment in the basin. The Authority's Board of Directors reviews the status of the master plan annually and
amends the master plan periodically when it is deemed necessary.
2. Federal Projects. By various resolutions,the Authority has agreed to serve as the local sponsor of the Navarro Mills Reservoir,
Bardwell Reservoir,Joe Pool Lake and the Wallisville Salt Water Barrier Project in cooperation with local municipalities or districts
that benefit from these projects.
3. Revenue-Based Projects. The Authority,without collecting any property taxes,has implemented service projects serving cities,
communities and other special districts throughout the Trinity River Basin. The majority of these funds for these projects have come
from the sale of tax-exempt contract service revenue bonds,service payments from customers,federal grants and long-term federal
loans. The Authority has responsibility for operating certain of these projects. Persons other than the Authority operate the
remainder of these projects(referred to below as"Non-Operating"). These projects and those served include:
THE AUTHORITY'S REVENUE-BASED PROJECTS
Project Name(Operating) Cities and Communities Serviced or to be Served
Central Regional Wastewater System Addison,Arlington,Bedford,Carrollton,Cedar Hill,
Colleyville,Coppell,Dallas,Dallas/Fort Worth
International Airport Board,Duncanville,Euless,
Farmers Branch,Fort Worth,Grand Prairie,Grapevine,
Hurst,Irving,Keller,Mansfield,North Richland Hills,
and Southlake
Ten Mile Creek Regional Wastewater System Cedar Hill,DeSoto,Duncanville,Ferris,and Lancaster
Denton Creek Regional Wastewater Treatment System Fort Worth,Haslet,Roanoke,Southlake,and Circle T
Municipal Utility District No. 1,City of Keller,Circle T
Municipal Utility District No.3,Marshall Creek,
Northlake,Westlake and Flower Mound.
Red Oak Creek Regional Wastewater Project Cedar Hill,DeSoto,Glenn Heights,Lancaster,Ovilla,and
Red Oak
Mountain Creek Regional Wastewater System Grand Prairie,Midlothian and Venus
Tarrant County Water Supply Project Bedford,Euless,Colleyville,Grapevine,and North
Richland Hills
Huntsville Regional Water Supply System Huntsville
Livingston Regional Water Supply System Livingston
Trinity County Regional Water Supply System Trinity,Groveton,Westwood Shores MUD,Trinity Rural
Water Supply Corp.,Glendale Water Supply Corp.,and
Riverside Water Supply Corp.
Lake Livingston Project Houston and 18 lakeside communities(and one industry)
Livingston Recreation Facilities Serving the General Public
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Project Name(Non-Operating) Cities and Entities Served
Walker-Calloway Branches Outfall Line Hurst and North Richland Hills
Northeast Lakeview Project Cedar Hill,Grand Prairie
Lakeview Regional Water Supply Project Cedar Hill,Duncanville,and Grand Prairie
Summit Regional Water Storage Project Cedar Hill and Duncanville
Navarro Mills Reservoir Coolidge,Corsicana,Dawson,and Hubbard(and one
industry)
Bardwell Reservoir Ennis and Waxahachie
Joe Pool Lake Project Cedar Hill,Duncanville,Grand Prairie,and Midlothian
Corsicana Water Project Corsicana
Ellis County Regional Water Supply Project Cities of Ferris,Maypearl,Midlothian,Palmer,Italy and
Red Oak;Ellis County WC&ID No. 1,Rockett Special
Utility District,Avalon Water and Sewer Service
Corporation,Boyce,Bristol,Nash-Forreston,and Buena
Vista-Bethel Water Supply Corporations.
Freestone Raw Water Supply Project Freestone Power Generation LP
Ennis Raw Water Supply Project Ennis
Midlothian Raw Water Supply Project Midlothian
Huntsville Wastewater Treatment Facilities Huntsville
Big Bear Creek Interceptor Project Fort Worth,Keller,Southlake,and North Richland Hills
Southlake Sewer Project Southlake
Lancaster Water and Sewer Project Lancaster
Red Oak Sewer Project Red Oak
Denton Creek Wastewater Interceptor System Fort Worth,Haslet,and Roanoke
Denton Creek Wastewater Pressure Interceptor Southlake
Cade Branch Interceptor Fort Worth,Keller
Denton Creek Wastewater Interceptor System(Fort Worth Project) Fort Worth
Fort Worth Sendera Ranch Project Fort Worth
White's Branch Sanitary Sewer Project Fort Worth
Pollution Control Facilities Texas Instruments,Texas Industries Inc.,General Motors
Corporation,Texas Utilities Electric Co.,and Community
Waste Disposal,Inc.
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THE FUTURE ROLE OF THE AUTHORITY
In recognition of the fact that the Authority does not exercise control over all facets of water resource management within the
Trinity River watershed,the goals of the Authority's Basin Master Plan are objectives for the Trinity River Basin,regardless of
the implementing agency.
1. Master Planning.
a. The Authority will carefully monitor the progress being made as to each master plan goal.
b. The Authority will support the accomplishments of all institutional and financial arrangements necessary to the
achievement of the goals.
c. The Authority will amend the master plan as needed.
d. The Authority will continue its leadership in water quality planning in the basin.
2. Revenue-based Services. When desired by others and when an adequate revenue base and other finances are available,the
Authority will exercise its powers to provide needed services in the areas of water supply, wastewater treatment, parks and
recreational facilities,pollution control facilities and solid waste disposal.
3. Tributary Lakes. The revised master plan calls for the construction,as needed,of thirteen lakes on mid-basin tributaries. Of
these thirteen, the Authority will serve as the planning and implementing agency for eleven: Upper Keechi, Big Elkhart,
Hurricane Bayou,Lower Keechi,Bedias,Nelson,Harmon,Gail,Mustang,Caney,and Long King.
4. Federal Projects. The Authority will continue to serve as local sponsor of the Navarro Mills Reservoir,Bardwell Reservoir,
the Wallisville Salt Water Barrier Project and Joe Pool Lake.
5. Public Information. The Authority will continue to encourage the public's understanding of the complex interrelationships
among the people,resources,economy and environment of the Trinity River Basin.
6. Tax-based Services. If there is public support,the Authority will seek to obtain some form of tax-based support for specific
programs which should be implemented for comprehensive management of the basin's soil and water resources:conservation of
the use of water,soil conservation,water-oriented recreation and adequate public access to the river and basin lakes,greenbelts,
preservation of natural areas,fish and wildlife mitigation,coordination of floodwater reservoir releases,and full dissemination of
flood plain information under the Flood Insurance Act throughout the Authority's territory. At this time the Authority has no
plans to pursue any form of tax-based support for these programs.
7. The Authority's Territory. In order to provide services on a truly basin-wide basis,the Authority will support legislation to
add to its territory those parts of the basin not presently within the Authority's defined territory if this is desired by any of the
involved counties.
8. Financing of Flood Control and Navigation Projects. Implementation of flood control (by whatever means) and navigation
projects should be through a combination of revenues, locally-provided taxes and federal funds. The Authority's support of any
navigation project is based on three conditions:public support,environmental soundness and economic feasibility.
PENSION PLAN
The Authority has a defined contribution pension plan for its employees. All full-time and permanent part-time employees are
eligible for participation after six months of service,provided that they work for the Authority at least 1,000 hours per year. The
Authority contributes an amount equivalent to 12%of the employee's salary annually to the plan with each employee having the
option to contribute up to 10% of annual salary. An employee becomes 20% vested in the plan after three years and 100%
vested in the plan after seven years, or at age 55. An employee is 100% vested in all personal contributions to the plan when
made.
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OTHER OUTSTANDING INDEBTEDNESS OF THE AUTHORITY
The Authority has other indebtedness outstanding which is listed below. The other outstanding indebtedness is not payable from
the Net Revenues which provide payment for the Bonds and are not Parity Bonds as defined in the Resolution.
Original Outstanding
Issue Amount 8/31/2005
Big Bear Creek Wastewater Interceptor Project $ 9,120,000 $ 4,930,000
Central Regional Wastewater System 501,420,000 408,330,000
City of Corsicana Water Project 3,065,000 745,000
Community Waste Disposal,Inc. 28,000,000 19,970,000
Denton Creek Regional Wastewater Treatment System 23,155,000 18,790,000
Denton Creek Wastewater Interceptor System 4,990,000 2,715,000
Denton Creek Wastewater Pressure Interceptor System 10,115,000 4,420,000
Denton Creek Wastewater Interceptor(Fort Worth Project) 1,930,000 1,930,000
Cade Branch Wastewater Interceptor 1,505,000 1,380,000
Ellis County(Cities of Ferris and Maypearl Water Supply Project) 95,000 20,000
Ellis County(Bristol and Buena Vista-Bethel Corps Water Supply Project) 82,000 41,000
City of Fort Worth Water&Wastewater Transmission Contract(Sendera Ranch Project) 10,560,000 9,645,000
General Motors Corp. 8,400,000 8,400,000
General Improvement 3,245,000 550,000
Huntsville Regional Water Supply System 27,335,000 13,305,000
Huntsville Wastewater Project 6,930,000 2,860,000
Lakeview Regional Water Supply Project 2,255,000 955,000
City of Lancaster Water and Sewer Project 1,885,000 1,170,000
Livingston Project Interim Water Revenue 18,000,000 5,000,000
Livingston Regional Water Supply Project 870,000 400,000
City of Red Oak Sewer Project 760,000 355,000
Red Oak Regional Wastewater System 15,925,000 13,510,000
City of Southlake Sewer System Project 1,250,000 590,000
Summit Regional Water Storage Project 4,730,000 1,400,000
Ten Mile Regional Wastewater System 50,220,000 35,225,000
Texas Industries Environmental Project 11,675,000 2,155,000
Texas Instruments 11,000,000 11,000,000
Texas Utilities Electric Company Pollution Control 51,075,000 51,075,000
Trinity County Regional Water Supply System Project 2,178,000 1,525,000
White's Branch Sanitary Sewer Force Main(City of Fort Worth Project) 6,895,000 5,155,000
TOTAL $ 818.665.000 $ 627.546.000
In addition to the preceding statement of indebtedness, the Authority has three outstanding contracts with the United States of
America for water rights or flood control.
Original
Amount Outstanding
Project (As Revised) 8/31/2005
Navarro Mills Reservoir $ 2,504,389 $ 321,111
Bardwell Reservoir 4,681,930 2,283,014
Joe Pool Lake 79,262,199 48,850,501
Wallisville Lake 10,580,707 10,077,550
$ 97,029.225 $ 61.532.176
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TAX MATTERS
OPINION...On the date of initial delivery of the Bonds, McCall, Parkhurst& Horton L.L.P., Dallas,Texas, Bond Counsel, 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 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 will rely upon (a) certain information and representations of the Issuer, including
information and representations contained in the Issuer's federal tax certificate, (b)covenants of the Issuer contained in the Bond
documents relating to certain matters,including arbitrage and the use of the proceeds of the Bonds and the Refunded Bonds and
the property financed or refinanced therewith and (c) the verification report prepared by Grant Thornton LLP. Failure by the
Issuer 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 is conditioned on compliance by the Issuer with
such requirements, and Bond Counsel has not been retained to monitor compliance with these requirements subsequent to the
issuance of the Bonds.
Bond Counsel's opinion represents its legal judgement 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 Issuer with respect to the Bonds or the property financed or
refinanced with proceeds of the Bonds or the Refunded 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 Issuer as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional
interest will be paid upon any determination of taxability.
FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT...The initial public offering price to be paid
for one or more maturities of the Bonds may be less than the principal amount thereof or one or more periods for the payment of
interest on the bonds may not be equal to the accrual period or be in excess of one year(the "Original Issue Discount Bonds").
In such event,the difference between(i)the"stated redemption price at maturity"of each Original Issue Discount Bond,and(ii)
the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The"stated
redemption price at maturity" means the sum of all payments to be made on the bonds less the amount of all periodic interest
payments. Periodic interest payments are payments which are made during equal accrual periods(or during any unequal period
if it is the initial or final period)and which are made during accrual periods which do not exceed one year.
Under existing law,any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to
exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue
Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a
discussion of certain collateral federal tax consequences,see discussion set forth below.
In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity,
however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such
owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue
Discount Bond was held by such initial owner)is includable in gross income.
Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity
thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual
anniversary dates of the date of the Bonds and ratably within each such six-month period)and the accrued amount is added to an
initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by
such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is
equal to(a)the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield
44
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 accumulated
earnings and profits and excess passive investment income, foreign corporations subject to the branch profits tax 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 will be includable as an adjustment for"adjusted current earnings"to calculate the alternative minimum tax
imposed on corporations by section 55 of the Code. Section 55 of the Code imposes a tax equal to 20 percent for corporations,
or 26 percent for noncorporate taxpayers (28 percent for taxable income exceeding $175,000), of the taxpayer's "alternative
minimum taxable income," if the amount of such alternative minimum tax is greater than the taxpayer's regular income tax for
the taxable year.
Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest
received or accrued during each taxable year on their returns of federal income taxation.
Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt
obligation,such as the Bonds,if such obligation was acquired at a"market discount"and if the fixed maturity of such obligation
is equal to,or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds"to the extent such
gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market
discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the
stated redemption price at maturity or,in the case of a bond issued at an original issue discount,the"revised issue price"(i.e.,the
issue price plus accrued original issue discount). The "accrued market discount"is the amount which bears the same ratio to the
market discount as the number of days during which the holder holds the obligation bears to the number of days between the
acquisition date and the final maturity date.
STATE, LOCAL AND FOREIGN TAXES...Investors should consult their own tax advisors concerning the tax implications of the
purchase,ownership or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their
own tax advisors regarding the tax consequences unique to investors who are not United States persons.
CONTINUING DISCLOSURE OF INFORMATION
In a Continuing Disclosure Agreement entered into between the Authority and the Cities made the following agreement for the
benefit of the holders and beneficial owners of the Bonds. The Cities and the Authority are required to observe the agreement
for so long as the Cities remains obligated to advance funds to pay the Bonds. Under the agreement,the Cities will be obligated
to provide certain updated financial information and operating data annually,and the Authority and the Cities will be obligated
to provide timely notice of specified material events, to certain information vendors. This information will be available to
securities brokers and others who subscribe to receive the information from the vendors.
ANNUAL REPORTS . . . The Cities will provide certain updated financial information and operating data to certain information
vendors annually. The information to be updated includes all quantitative financial information and operating data with respect
to the Cities of the general type included in Appendix B of this Official Statement. The Cities will update and provide this
45
information within six months after the end of each fiscal year. The Cities will provide the updated information to each
nationally recognized municipal securities information repository("NRMSIR")and to any state information depository("SID")
that is designated by the State of Texas and approved by the State of Texas and approved by the staff of the United States
Securities and Exchange Commission(the"SEC").
The Cities may provide updated information in full text or may incorporate by reference certain other publicly available
documents,as permitted by SEC Rule 15c2-12(the"Rule"). The updated information will include audited financial statements,
if the Cities commission an audit and it is completed by the required time. If audited financial statements of the Cities are not
available by the required time, the Cities will provide audited financial statements when and if the audit report becomes
available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B
or such other accounting principles as the Cities may be required to employ from time to time pursuant to state law or regulation.
The Cities's current fiscal year end is September 30. Accordingly,the Cities must provide updated information by March 31 in
each year,unless the Cities change their fiscal year. If the Cities change their fiscal year,they will notify each NRMSIR and any
SID of the change.
MATERIAL EVENT NOTICES. . .The Authority and the Cities will provide timely notices of certain events to certain information
vendors. The Authority will provide notice of any of the following events with respect to the Bonds,if such event is material to
a decision to purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3)
unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements
reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax
opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond
calls; (9)defeasances; (10)release, substitution,or sale of property securing repayment of the Bonds;and(I I) rating changes.
Neither the Bonds nor the Resolution make any provision for liquidity enhancement. In addition,the Cities will provide timely
notice of any failure by the Cities to provide information, data, or financial statements in accordance with their agreement
described above under"Annual Reports." The Authority or the Cities will provide each notice described in this paragraph to any
SID and to either each NRMSIR or the Municipal Securities Rulemaking Board("MSRB").
AVAILABILITY OF INFORMATION FROM NRMSIRs AND SID . . . The Authority and the Cities have agreed to provide the
foregoing information only to NRMSIRs and any SID. The information will be available to holders of Bonds only if the holders
comply with the procedures and pay the charges established by such information vendors or obtain the information through
securities brokers who do so.
The Municipal Advisory Council of Texas has been designated by the State of Texas and approved by the SEC staff as a
qualified SID. The address of the Municipal Advisory Council is 600 West 8th Street, P. 0. Box 2177, Austin,Texas 78768-
2177,and its telephone is 512/476-6947.
Any filing required as specified above may be made solely by transmitting such filing to the Texas Municipal Advisory Council
(the"MAC")as provided at http://www.disclosureusa.org unless the SEC has withdrawn the interpretive advice in its letter to the
MAC dated September 7,2004.
LIMITATIONS AND AMENDMENTS. . .The Authority and the Cities have agreed to update information and to provide notices of
material events only as described above. The Authority and the Cities have 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,except as described above. The Authority and the Cities make no representation or warranty
concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The
Authority and the Cities disclaim any contractual or tort liability for damages resulting in whole or in part from any breach of
their continuing disclosure agreement or from any statement made pursuant to their agreement,although holders of Bonds may
seek a writ of mandamus to compel the Authority or the Cities to comply with its agreement.
The Authority or the Cities may amend their continuing disclosure agreement from time to time to adapt to changed
circumstances that arise from a change in legal requirements,a change in law,or a change in the identity,nature,status,or type
of operations of the Cities, if(i)the agreement, as amended,would have permitted an underwriter to purchase or sell Bonds in
the offering described herein in compliance with the Rule,taking into account any amendments or interpretations of the Rule to
the date of such amendment, as well as such changed circumstances, and(ii)either(a) the holders of a majority in aggregate
principal amount of the outstanding Bonds consent to the amendment or(b) any person unaffiliated with the Authority or the
Cities(such as nationally recognized bond counsel)determines that the amendment will not materially impair the interests of the
holders and beneficial owners of the Bonds. If the Authority or the Cities so amend the agreement,the Cities have agreed to
include with the next financial information and operating data provided in accordance with their agreement described above
under"Annual Reports"an explanation,in narrative form,of the reasons for the amendment and of the impact of any change in
the type of financial information and operating data so provided.
46
COMPLIANCE WITH PRIOR UNDERTAKINGS . . . In its past continuing disclosure undertakings, the Authority assumed certain
responsibilities and other obligated parties assumed certain responsibilities. The Authority has been in substantial compliance in
meeting its past responsibilities; however,certain of the other obligated parties did not file all of the required information in a
timely manner and/or did not reference the bonds issued by the Authority when making other required filings. All of the
required information has since been filed. The Authority has taken corrective action to assure that the other obligated parties'
filing obligations will be met in the future, including filing the necessary notice and obtaining additional assurances from the
other obligated parties that the required financial information will be provided to the Authority in timely fashion.
OTHER INFORMATION
RATINGS
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P") are expected to assign ratings of"Aaa" and "AAA" , respectively, to the Bonds based upon the
financial guaranty policy of MBIA Insurance Corporation to be issued simultaneously with the delivery of the Bonds. In
addition, the Bonds were assigned ratings of"A2" and "A" by Moody's and S&P, respectively, without regard to credit
enhancement. An explanation of the significance of such rating may be obtained from the company furnishing the rating. The
rating reflects only the respective view of such organization and the Authority makes no representation as to the appropriateness
of the rating. There is no assurance that such rating will continue for any given period of time or that it will not be revised
downward or withdrawn entirely by such rating company, if in the judgment of such company,circumstances so warrant. Any
such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.
LITIGATION
It is the opinion of the Authority Attorney and Authority Staff that there is no pending litigation against the Authority that would
have a material adverse financial impact upon the Authority, its operations or the security for the Bonds..
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
jurisdiction. The Authority 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.
VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS
The arithmetical accuracy of certain computations included in the schedules provided by First Southwest Company on behalf of
the Authority relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities and the
forecasted payments of principal and interest to redeem the Refunded Bonds and(b)computation of the yields of the Bonds and
•
the restricted Federal Securities were verified by Grant Thornton, LLP, certified public accountants. Such computations were
based solely on assumptions and information supplied by First Southwest Company on behalf of the Authority. Grant Thornton,
LLP has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or
evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an
opinion on the data used,the reasonableness of the assumptions,or the achievability of the forecasted outcome.
LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS
Section 1201.041 of the Public Security Procedures Act(Chapter 1201, Texas Government Code)provides that the Bonds are
negotiable instruments governed by Chapter 8, Texas Business and Commerce Code,and are legal and authorized investments
for insurance companies, fiduciaries,and trustees, and for the sinking funds of municipalities or other political subdivisions or
public agencies of the State of Texas. With respect to investment in the Bonds by municipalities or other political subdivisions
or public agencies of the State of Texas,the Public Funds Investment Act,Chapter 2256,Texas Government Code,requires that
the Bonds be assigned a rating of"A" or its equivalent as to investment quality by a national rating agency. See "OTHER
INFORMATION-Ratings"herein. In addition,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 at capital of one million
dollars or more,and savings and loan associations.The Bonds are eligible to secure deposits of any public funds of the State, its
agencies,and its political subdivisions,and are legal security for those deposits to the extent of their market value. No review by
the Authority has been made of the laws in other states to determine whether the Bonds are legal investments for various
institutions in those states.
47
LEGAL OPINIONS AND NO-LITIGATION CERTIFICATE
The Authority will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds,
including the unqualified approving legal opinion of the Attorney General of Texas approving the initial Bonds and to the effect
that the Bonds are valid and legally binding special obligations of the Authority,and based upon examination of such transcript
of proceedings,the approving legal opinion of Bond Counsel,to like effect and to the effect that the 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
under "Tax Matters" herein, including the alternative minimum tax on corporations. In connection with the issuance of the
Bonds, Bond Counsel has been engaged by,and only represents,the Authority. Bond Counsel was not requested to participate,
and did not take part,in the preparation of the Official Statement,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 under captions "Plan of Financing", "The Bonds" (exclusive of subcaption
"Book-Entry-Only System"), "Summary of Contract Provisions," "Selected Provisions of the Resolution," "Tax Matters" and
"Continuing Disclosure of Information" (exclusive of subcaption "Compliance with Prior Undertakings") and the subcaptions
"Legal Opinions and No-Litigation Certificate"and"Legal Investments and Eligibility to Secure Public Funds in Texas" in the
Official Statement and such firm is of the opinion that the information relating to the Bonds and the legal issues contained under
such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and,with respect
to the Bonds, such information conforms to the Resolution. The legal fee to be paid to Bond Counsel for services rendered in
connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal opinion will accompany
the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book-Entry-Only
System. Certain legal matters will be passed upon for the Underwriters by Fulbright&Jaworski L.L.P.,Dallas,Texas,Counsel
to the Underwriters.
The 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.
FINANCIAL ADVISOR
First Southwest Company is employed as Financial Advisor to the Authority in connection with the issuance of the Bonds. The
Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of
the Bonds. First Southwest Company, in its capacity as Financial Advisor, does not assume any responsibility for the
information,covenants and representations contained in any of the legal documents with respect to the federal income tax status
of the Bonds,or the possible impact of any present,pending or future actions taken by any legislative or judicial bodies.
The Financial Advisor to the Authority has provided the following sentence for inclusion in this Official Statement. The
Financial Advisor has reviewed the information in this Official Statement in accordance with,and as part of,its responsibilities
to the Authority and,as applicable,to investors under the federal securities laws as applied to the facts and circumstances of this
transaction,but the Financial Advisor does not guarantee the accuracy or completeness of such information.
UNDERWRITING
The Underwriters have agreed,subject to certain conditions,to purchase the Bonds from the Authority,at an underwriting discount of
$553,567.70. The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds to be offered
to the public may be offered and sold to certain dealers (including the Underwriters and other dealers depositing Bonds into
investment trusts)at prices lower than the public offering prices of such Bonds,and such public offering prices may be changed,from
time to time,by the Underwriters.
FORWARD-LOOKING STATEMENTS DISCLAIMER
The statements contained in this Official Statement,and in any other information provided by the Authority,that are not purely
historical, are forward-looking statements, including statements regarding the Authority's expectations, hopes, intentions, or
strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking
statements included in this Official Statement are based on information available to the Authority on the date hereof, and the
Authority assumes no obligation to update any such forward-looking statements. The Authority's actual results could differ
materially from those discussed in such forward-looking statements.
The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently
subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying
assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and
regulatory circumstances and conditions and actions taken or omitted to be taken by third parties,including customers,suppliers,
business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions
48
related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market
conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Authority. Any of such assumptions could be inaccurate and,therefore,there can be no assurance that
the forward-looking statements included in this Official Statement will prove to be accurate.
MISCELLANEOUS
The financial data and other information contained herein have been obtained from the Authority's records, audited financial
statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates
contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official
Statement are made subject to all of the provisions of such statutes,documents and resolutions. These summaries do not purport to
be complete statements of such provisions and reference is made to such documents for further information. Reference is made to
original documents in all respects.
The Resolution authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any
addenda,supplement or amendment thereto,and authorize its further use in the reoffering of the Bonds by the Underwriters.
TRINITY RIVER AUTHORITY OF TEXAS
/s/ Danny F.Vance
General Manager
ti
49
SCHEDULE
SCHEDULE OF REFUNDED BONDS
Tarrant County Water Project
Improvement and Refunding Revenue Bonds,Series 1999
Original Interest
Original Dated Date Maturity Rates Amount
6/15/1999 2010 5.25% 1,540,000
2011 5.25% 1,620,000
2012 5.25% 1,705,000
2013 5.25% 1,795,000
2014 5.25% 1,890,000
2015 5.25% 1,995,000
2016 5.25% 2,100,000
2017 5.25% 2,220,000
2018 5.25% 2,340,000
2019 5.25% 2,470,000
2020 5.25% 2,605,000
$ 22,280,000
The 2010-2020 maturities will be redeemed prior to original maturity on February 1,2009 at par.
Tarrant County Water Project
Improvement and Refunding Revenue Bonds,Series 2003
Original Interest
Original Dated Date Maturity Rates Amount
1/1/2003 2014 5.50% 2,795,000
2015 5.50% 2,950,000
2016 5.50% 3,115,000
2017 5.50% 3,285,000
2018 5.50% 3,470,000
2019 5.50% 3,665,000
2020 5.50% 3,870,000
2021 5.50% 6,840,000
2022 5.50% 7,225,000
$ 37,215,000
The 2014-2022 maturities will be redeemed prior to original maturity on February 1,2013 at par.
APPENDIX A
BIOGRAPHICAL INFORMATION
Board of Directors
and
Management Officers
•
BOARD OF DIRECTORS
JOHN W. JENKINS, of Hankamer, Texas (President and Member, Executive Committee). Mr. Jenkins is a self-employed
partner in a major farming enterprise. Mr.Jenkins graduated from Southwest Texas State University in 1981 with a bachelors in
business administration. He is a member of the Devers Canal Rice Producers Association and the Anahuac Area Chamber of
Commerce. He serves on the boards of Anahuac National Bank,the Hometown Press,Texas Rice Council and American Plant
Food Corporation. Mr.Jenkins is also a committee chair for the Texas Gatorfest Committee. He is a former board member of
the Trinity Bay Conservation District, Devers Canal Rice Producers Association,Trinity Valley Exposition,Texas Rice Festival
and the Chambers County Farm Bureau. Mr.Jenkins was appointed as director for Trinity River Authority's Chambers County
area in 1997.
HECTOR ESCAMILLA, JR., of Carrollton, Texas (Vice President and Member, Executive Committee). Mr. Escamilla is a
Certified Public Accountant,real estate broker and founder of Escamilla Capital Group. He graduated Summa Cum Laude from
Southern Methodist University with a bachelors of business administration in 1977. Mr. Escamilla is a member of the •
Salesmanship Club of Dallas. Formerly, he has served on the boards of Greater Dallas Chamber of Commerce, YMCA of
Metropolitan Dallas, and the Dallas Museum of Art. He is also a former board member of the Community Council of Greater
Dallas, Concilio of Hispanic Service Organizations, Dallas Convention and Visitors Bureau, Dallas County MHMR Center,
Dallas Hispanic Chamber of Commerce Foundation, Dallas Together Forum, Greater Dallas Community of Churches, Greater
Dallas Hispanic Chamber of Commerce, Maple Avenue Community Development Corp., North Texas Commission, MAEDEC
Community Development Corporation and Teatro Dallas. He also served on the executive committee for the Central Dallas
Association. Mr.Escamilla was appointed as Director at large in 1997.
EDD HARGETT,of Crockett,Texas(Chairman, Executive Committee). Mr. Hargett is general manager for Houston County
Electric Cooperative. He is former regional director for the Federal Emergency Management Agency FEMA Region VI. Mr.
Hargett graduated Tau Beta Pi and Eta Kappa Nu from Texas A&M University with a bachelor of science in electrical
engineering in 1969. He received an Honorable Discharge from the Louisiana Army National Guard in 1973. Mr. Hargett is a
member and former chairman of the board of the Houston County Chamber of Commerce,and has served as commissioner of
the Texas Economic Development Commission. He is also a member of the Rotary Club of Crockett and member and deacon at
Crockett First Baptist Church. Mr. Hargett is a former director for the Cass County Tax Appraisal District and Denton Chamber
of Commerce. He is also a former chairman for the Cass County Coalition to Prevent Child Abuse and past president of the
Linden Lion's Club. Mr.Hargett was appointed as director for Trinity River Authority's Houston County area in 1997.
CONNIE H.ARNOLD of Liberty,Texas(Member,Legal Committee). Ms.Arnold is the Office Manager for the firm of David
W.Arnold,General Dentistry, Inc. Her professional memberships include the University of Texas Nurses Association. She is
Chairman of Daughters of the American Revolution Fundraising Committee,Chairman of American Cancer Society Area Fund-
Raising Committee, Director of Catholic Youth Organization and Teen Life Facilitator. Ms.Arnold is the Lay Representative
for the Houston Area Library System, and Area Recommendation Chair for the Atascocita Panahellenic Alumni Association.
She has been President of Liberty Parent Teacher Organization,President of Liberty Garden Club and Chairman of Liberty Civic
Beautification Committee. Ms. Arnold volunteers with the Tri-County Mental Health and Mental Retardation Center, the
Friends of the Library and Helping One Student to Succeed(HOSTS). Ms. Arnold received a Bachelor of Science from the
University of Texas at Austin and is a Registered Nurse. Ms.Arnold was appointed Director for the Authority's Liberty County
area in 2001.
RUSSELL B. ARNOLD of Trinity, Texas (Member, Utility Services Committee). Mr, Arnold is owner of a ranch in Trinity
County. He is retired from his cattle operation but continues to manage the land and timber production. Mr.Arnold is member
and past state director of the Texas Farm Bureau,a life member of the Houston Livestock Show and Rodeo and a member of the
Texas Forestry Association. Mr. Arnold holds a degree in mechanical engineering from the University of Houston. He was
appointed to serve as Director for the Authority's Trinity County area in 2000.
HAROLD L. BARNARD of Waxahachie, Texas (Member of Executive Committee and Chairman, Resources Development
Committee). Mr. Barnard is president and managing officer of Ellis County Abstract and Title Company, Inc. In addition to
being a member of the Texas Land Title Association and the Texas Association of Abstract and Title Agents,he is past president
of the Waxahachie Chamber of Commerce and current director and past president of the Ellis County Museum board of
directors. He is a member of the Board of Directors and president of the Waxahachie Foundation, Inc. Mr. Barnard earned a
bachelor's degree from the University of Texas at Arlington. He was appointed as director for Trinity River Authority's Ellis
County area in 2000.
LES C.BROWNE,of Arlington,Texas(Member,Utility Services Committee). Mr.Browne earned a bachelor's degree from the
University of Michigan. He is a charter member of the Grace United Methodist Church in Arlington and founder of the"Three
Point Play" Community Outreach Program. Mr. Browne is very active in the Arlington Independent School District. He is a
former board member of the McDonald YMCA of Fort Worth and the Sigma Pi Phi Fraternity, Delta Mu Chapter of Fort Worth
and Arlington. He was appointed as Director for the Authority's Tarrant County area in 1997.
A-1
a
KARL R. BUTLER of Dallas,Texas(Member, Administration Committee). Mr.Butler is founder and president of ICC Energy
Corporation. He is also a lieutenant commander in the U.S. Naval Reserve Medical Service Corps, has been awarded the
National Defense Medal, and was recently appointed by the Secretary of Energy to the National Petroleum Council. His
professional memberships include the American Gas Association, the American Association of Blacks in Energy, the Natural
Gas Society of North Texas, the Dallas Assembly, the Dallas Zoological Society, the Dallas Petroleum Club, the Dallas/Fort
Worth Minority Business Development Council and the National Association for Advancement of Colored People. He also
serves on the board of directors of the Dallas Black Chamber of Commerce and the U.S. Department of Energy — Minority
Business Development Advisory Board. In addition, Mr. Butler is a member of the board of directors of the Zale Lipshy
University Hospital, Jarvis Christian College, the Salvation Army, the United Way Metropolitan of Dallas, and Southern
Methodist University Willis M.Tate Lecture Series Advisory Board. He earned a bachelor's degree in business administration
from Jarvis Christian College. Mr.Butler was appointed as Director for the Authority's Dallas County area in 2000.
PATRICIA TAYLOR (Patti) CLAPP, of Dallas, Texas (Member, Administration Committee). Mrs. Clapp is Vice President
Workforce Development and Education for the Greater Dallas Chamber. She holds a Bachelor of Arts degree from the
University of Oklahoma and graduate work at the University of North Texas. Mrs. Clapp currently serves on the boards of the
Volunteer Center of Dallas, the Community Council of Greater Dallas, the Texas Center for Educational Research, the
Foundation Board of Tejas Girl Scout Council, and the Board of Visitors for the College of Arts and Sciences, University of
Oklahoma. She is president of the board of Headstart of Greater Dallas and past president of the Texas Association of School
Boards, the Richardson School Board, Tejas Girl Scout Council, Women's Council of Dallas County, and Lake Highlands
Republican Women's Club. She is a member of Charter 100, Executive Women of Dallas and the Dallas Summit. She also
serves as a Republican Precinct Chair and Election Judge. She was appointed as Director for the Authority's Dallas County area
in 1995 and has served as President of the Board and chair of the Executive Committee of the Board of the Authority.
MICHAEL CRONIN of Terrell,Texas(Member,Executive Committee and Chairman,Utility Services Committee). Mr.Cronin
is Vice Chairman of the board of directors of American National Bank of Texas. He is a member of the Independent Bankers
Association of Texas and the Texas Bankers Association. He has served as president of the Terrell Economic Development
Corporation since its inception in 1990. He is also president of the Terrell Industrial Foundation,a member and past chairman of
the Terrell Chamber of Commerce and a member of the Terrell Rotary Club. Mr. Cronin earned a bachelor's degree from the
University of North Texas. Mr.Cronin was appointed as Director for the Authority's Kaufman County area in 2000.
STEVE CRONIN, of Shepherd, Texas (Member, Legal Committee). Mr. Cronin is Director of Transportation at Coldspring
Independent School District and the owner of Triple B Goat Ranch. He is a member of the Vocational Agricultural Teachers
Association of Texas. He is a secretary/treasurer and past president of the County Farm Bureau. He serves as financial advisor
for the Coldspring FFA Booster Club and on a committee for the San Jacinto County Fair Association. He is a coach for the
Dixie Youth League and a leader with 4-H. Mr.Cronin served more than seven years as an Agriculture Field Representative for
the Texas Farm Bureau and more than six years as an Agriculture Extension Agent for the Texas A&M University System. He
received a bachelor's degree in agricultural education and master's degree in agriculture from Sam Houston State University.
Mr.Cronin was appointed Director of Trinity River Authority's San Jacinto County area in 2002.
VINCENT CRUZ,JR.of Fort Worth,Texas(Member,Utility Services Committee). Mr.Cruz is an attorney in private practice
and is board certified in the areas of civil trial law and personal injury trial law. He practices with the Fort Worth firm of
Brackett and Ellis, P.C. Mr. Cruz graduated from the University of Texas at Arlington with honors and earned a Doctor of
Jurisprudence from the University of Texas School of Law. Mr. Cruz was appointed to serve as Director for the Authority's
Tarrant County area in 2000.
BENNY L. FOGLEMAN, of Livingston, Texas (Member, Resources Development Committee). Mr. Fogleman has been a
representative of Farmers Insurance Group for the past twenty-one years. He is the owner and broker of East Texas Mortgage
Services with nine offices serving Southeast Texas. Mr. Fogleman is past president of the Livingston Rotary Club and is a
member of the Polk County Chamber of Commerce. For the past ten years he has served as the County Chairman for the
Republican Party and also founded the Polk County Republican Club. Mr. Fogleman has been an active supporter of Project
Graduation for Livingston High School,and participates in the annual Toys for Tots campaign. He was appointed as Director for
the Authority's Polk County area in 1997 and serves as president of the Trinity River Industrial Development Authority.
SYLVIA GREENE,of Arlington,Texas(Member, Legal Committee). Mrs.Greene holds a bachelor's degree in sociology from
Northeast Louisiana University. She was former president and founding director of the River Legacy Foundation. She currently
serves as director for the Foundation. Mrs. Greene is a former member of the Arlington Junior League Advisory Board and
Arlington's Johnson Creek Committee. She is the former chairperson for the North Central Texas Council of Governments West
Fork Trinity Trails Committee and for the Winning Foundations Project of Arlington Boys and Girls Club. Mrs.Greene was the
founding director of the Arlington Foundation for the Arts and Urban Strategies of Tarrant County. She is a former director of
Riverfest, Inc. (annual community festival), Tarrant County Citizens Crime Commission, Creative Arts Theatre and School,
Theatre Arlington and the Arlington Family Services Board. She served on the Board of Trustees of Columbia Medical Center
of Arlington, the Program Development Division of Tarrant County United Way and served as president for the Youth
Development Study Club. Mrs. Greene was very active in the PTA,at both state and local levels. She received the American
A-2
Business Women's Association Circle of Success Award, Arlington Star-Telegram's Woman of the Year, Arlington Women's
Shelter's Legacy of Women Volunteer Award, Arlington Downtown Rotary Paul Hams Fellow Award, Texas PTA Extended
Service Award,Arlington Boys'Club Citizen of the Year Award,Honorary National PTA Life Member,Friend of Youth Award
and Honorary Texas PTA Life Member Award. Mrs.Greene was appointed a director at-large for the Trinity River Authority in
1997.
JERRY F. HOUSE, D.MIN.of Leona,Texas(Member,Administration Committee). Dr. House is a Senior Minister at the First
United Methodist Church in Crockett,Texas and the owner of the Leona General Store in Leona,Texas. He holds a BBA from
the Southwestern University in Georgetown,a Masters of Theology from the Perkins School of Theology at Southern Methodist
University and a Doctorate of Ministry from the McCormick Theological Seminary at the University of Chicago. Dr. House
serves as Chairman of the Texas Annual Conference of the United Methodist Church Board of Trustees; Chairman of the
Committee on Stewardship, Palestine District of the United Methodist Church. He is a member of the S.HA.R.E (Ecumenical
Outreach ministry to the area) Board of Directors in Crockett, Texas,a member of Boys and Girls Club Board of Directors in
Crockett,Texas a member of Lions Club in Crockett Texas,a member of the Urban Forestry Council in the Beaumont area and a
member of the National Restaurant Association. He was a member of the Board of Directors of Flying"0"Timber Corporation
from 1992 to 2000. Dr. House received the"Outstanding Rural Minister of the Year"award given by the Texas Agricultural
Extension Services and A&M University in 1991. He has been a four-time winner of the"Copeland Award for Evangelism"
given by the Texas Annual Conference. Dr.House was appointed as Director for TRA's Leon County area in 2000.
KATRINA KEYES from Dallas, Texas(Member Resources Development Committee). Ms. Keyes is President of K Strategies
Group LLC. She holds a business degree from the University of Texas at Arlington, a master's degree in higher education
administration from Dallas Baptist University and is a doctoral candidate in public affairs at the University of Texas at Dallas.
Ms. Keyes has received numerous awards for her accomplishments in minority and women-owned business development. She
also served in the U.S. Army for 4 years. Ms. Keyes presently serves on the board of directors of the Black Contractors
Association and the Minority Business Enterprise(MBE)Institute for Public Policy,as well as the Advisory Council for the Fort
Worth Women's Business Center and the M/WBE Advisory Board for Texas Instruments. She is an active leader and member
of the Dallas Black Chamber of Commerce, Greater Dallas Hispanic Chamber of Commerce, Dallas/Fort Worth Minority
Business Council, Fort Worth Metropolitan Black Chamber of Commerce, Hispanic Contractors Association and the Arlington
African American Chamber of Commerce. Ms. Keyes was appointed as director for Trinity River Authority's Dallas County
area in 2004.
NANCY E. LAVINSKI of Palestine, Texas(Member, Executive Committee and Chairman, Administration Committee). Ms.
Lavinski is a Retired Educator with over sixteen years of classroom and departmental leadership experience in English and
Government. Currently she is Co-Managing Partner of the Royalty Valuation Services Group and an Advisory Board Member
of Propensity, Ltd., a Human Resource Advisory and Consultancy. Mrs. Lavinski is an active fund raiser for the American
Cancer Society and served as co-chairman of the 2004 Cattle Barons' Ball. She is a member of the Literary Review Society and
serves on the Staff-Parish Relations Committee at the First United Methodist Church. Mrs.Lavinski received a Bachelor of Arts
from the University of Texas at Austin. Mrs. Lavinski was appointed Director for the Authority's Anderson County area in
2001.
ANDREW MARTINEZ of Huntsville, Texas (Member, Utility Services Committee). Mr. Martinez is a retired construction
safety supervisor from the Texas Department of Criminal Justice. He attended Sam Houston State Teachers College in 1951-
1952. Mr. Martinez was ordained as a Baptist minister in 1978. He served as Interim pastor at Faith Memorial Baptist Church.
He is now a member of the Second Baptist Church. He has been active as a Prison Ministry Volunteer for 32 years including
serving as Facilitator for the Voyager program at the Huntsville Prison Unit. Mr. Martinez is a past elected member of the
Huntsville City Council,the Huntsville Independent School Board of Trustees and Chairman of the Republican Party of Walker
County. He is a member of the World Safety Organization, the 32 degree Scottish Rite, the Arabia Temple Shrine and the
Huntsville Lions Club. Mr.Martinez is a Charter member of the League of United Latin American Citizens and a member of the
city of Huntsville Cultural Planning Council. He served on the city of Huntsville Arts Commission and currently serves on the
Gulf Coast Trade Center Board of Trustees. Mr. Martinez was appointed as director for Trinity River Authority's Walker
County area in 2004.
LYNN HARDY NEELY of Madisonville, Texas (Member, Resources Development Committee). Ms. Neely retired from
teaching in 1998 with 20 years of service. She is a member of the Retired Teachers Association, a volunteer instructor at
Madisonville Consolidated Elementary School,a member of the Madison County Chamber of Commerce, the Madison County
Historical Commission and the Madisonville Sidewalk Cattlemen's Association. She serves as a member of the board of trustees
for the First United Methodist Church and as the First Vice Regent for the Daughters of American Revolution. Ms.Neely earned
an associate's degree from Stephen College in Missouri, a bachelor's degree from the University of Texas at Austin and a
master's from Sam Houston State University. She was appointed as Director for the Authority's Madison County area in 2000.
ANALAURA SAUCEDO of Dallas,Texas(Member, Legal Committee). Ms. Saucedo invests in residential property. She is a
former news reporter for KLIF and KRLD radio in Dallas. Ms.Saucedo worked for the Office of Minority Business Enterprise;
Dept. of Commerce and was instrumental in helping to develop the Texas Association of Mexican American Chambers of
A-3
Commerce and the U.S. Hispanic Chamber of Commerce. She spent twelve years volunteering in PTA and was awarded a Life
Member Honor by the Socorro Independent School District in El Paso,Texas. She was elected a Trustee of Socorro ISD. She is
currently the President of the Pike Park Preservation League. Ms.Saucedo coordinates cultural and historical activities at one of
the oldest parks in the City of Dallas. She was appointed to the Texas Commission on Human Right's. Ms. Saucedo was
appointed to the Trinity River Authority's Dallas County area in 2004.
LOUIS STURNS, of Fort Worth, Texas(Member, Executive Committee and Chairman, Legal Committee). Mr. Stums is an
attorney in private practice. He has served as judge for the Texas Court of Criminal Appeals and Tarrant County Criminal
District Court. He is a member of the State Bar of Texas, a member and former president of the Tarrant County Black Bar
Association,and a member and former president of the Tarrant County Bar Association. Mr.Sturns is a fellow of the Texas Bar
Foundation and a founding fellow of the Tarrant County Bar Association. He served on the Texas State Ethics Commission and
is a member of the Texas Wesleyan University Law School Advisory Board and the Governor's Juvenile Justice Advisory
Board. Mr.Sturns serves as a board member of the Fort Worth Metropolitan Black Chamber of Commerce and is vice president
of the Salvation Army of Tarrant County board of directors. Mr.Sturns served in the U.S.Army for three years and received the
Army Commendation. He is a Deacon at the Community Christian Church in Fort Worth. He received a bachelor's degree from
Wichita State University and a law degree from Kansas University Law School. Mr. Sturns was appointed Director of Trinity
River Authority's Tarrant County area in 2002.
LINDA TIMMERMAN, Ed.D. of Streetman,Texas(Member, Utility Services Committee). Dr. Timmerman is vice president
for institutional advancement at Navarro College and the executive director of the Navarro College Foundation. She is a member
of the Texas Association of Community College Teachers, the Corsicana Area Chamber of Commerce Board of Directors and
Rotary International. Dr. Timmerman is active with the American Cancer Society, serving as a Reach-to-Recovery volunteer.
She is past-president of the National Council of Instructional Administrators and past-president of the Texas Community College
Instructional Administrators. Dr.Timmerman is a member of Lakeside United Methodist Church. Dr.Timmerman received a
bachelor of science and a doctorate of education from Texas A&M University-Commerce. Dr. Timmerman was appointed
Director of Trinity River Authority's Freestone County area in 2002.
KIM C. WYATT of Corsicana,Texas(Member, Resources Development Committee). Mr.Wyatt is president of the Corsicana
National Bank and Trust. He holds a B.B.A. in finance from Texas A&M University and graduated from the Southwest
Graduate School of Banking. Mr.Wyatt is a former member of the Planning and Zoning Board of the city of Corsicana. He is a
member of the Board of Trustees of the First United Methodist Church,a member of the Corsicana Optimist Club and a member
of Independent Order of Odd Fellows. Mr.Wyatt is Treasurer of the Corsicana Livestock and Agricultural Center,a member of
Navarro County Extension Service Management Committee,a Board Member of Garitty Charity Association and a member of
the Board of Navarro Community Foundation. Mr. Wyatt is past President of Corsicana Area Chamber of Commerce, past
President of Navarro County United Way and past President of the Optimist Club. He is past Chairman for three terms of
Navarro County Youth Exposition. He is past Board member of Camp Fire Girls,Navarro County Agency for Retarded Citizens
and Corsicana YMCA. Mr. Wyatt is past President of Navarro College Booster Club and past Board member and Treasurer of
Navarro College Foundation. Mr.Wyatt was appointed as director for Trinity River Authority's Navarro County area in 2004.
Vacant—Henderson County
A-4
MANAGEMENT OFFICERS
DANNY F. VANCE, General Manager. Mr. Vance received an M.B.A. degree in management and marketing from Sam
Houston State University in 1968.After graduation but prior to joining TRA,he served with the United States Army in Europe.
He was employed by the Authority in 1970 as an Administrative Assistant to the Regional Manager of the Southern Region.
Since that time he has served as General Services Manager; Assistant Regional Manager, Northern Region; Administrative
Services Manager; and Regional Manager, Northern Region. Mr. Vance's other professional activities include participation in
the Association of Metropolitan Sewerage Agencies;membership in the Government Finance Officers Association;membership •
in the Executive Committee and the Board of Directors of the Texas Water Conservation Association for which he has served as
President. During 1983-85, Mr. Vance served on an advisory committee to Texas House Speaker Gib Lewis for the purpose of
developing legislation which was introduced and passed by the 69th Legislature of Texas to provide funding for the Texas Water
Plan. This effort resulted in the approval by Texas voters of four constitutional amendments to underwrite water planning and
conservation for Texas. Mr. Vance served as President of the Board of Directors of the Sam Houston State University Alumni
Association and served on the Association's Executive Council; served on the Board of Directors of the Sam Houston State
University Development Foundation;served on the Advisory Board for the College of Business Administration at the University;
and has been recognized as a Distinguished Alumnus of the College of Business Administration,Sam Houston State University.
He serves as a member of the Board of Directors of the River Legacy Foundation,served as the Foundation's Secretary,chaired
its Project Committee and currently serves on the Finance Committee. In 1995, he chaired the City/County/Special Districts
Division of the United Way of Metropolitan Tarrant County.
WARREN N. BREWER, Regional Manager, Northern Region. Mr. Brewer attended East Texas State University and the
University of Texas at Arlington majoring in engineering and business. He joined the Trinity River Authority in September
1977 as Operations Chief of the Central Regional Wastewater System, and was then reassigned to the Northern Region as
Manager of Administrative and Technical Services. He was promoted to Assistant Regional Manager, Northern Region,before
assuming his current responsibilities in 1979. Before joining TRA,Mr. Brewer was employed for eight years with a consulting
engineering firm, where he was principally involved in planning, design, and operational assistance for TRA projects. In
addition, he previously served as City Engineer and City Planner for the City of Farmers Branch,Texas,and as City Engineer
and Director of Public Works for the City of Sulphur Springs,Texas. Mr. Brewer is a former Jaycee and Kiwanian,and a past
President of the Cotton Belt Water and Sewer Association. He is currently active in the American Water Works Association and
the Association of Metropolitan Sewerage Agencies; is a past Chairman of the Texas Association of Metropolitan Sewerage
Agencies,and currently serves as a member of the Board of Directors of the Texas Water Conservation Association,Member of
the Board of Directors of the Texas Water Research Association and as Chairman of the North Central Texas Council of
Governments'Water Resources Council.
JIMMIE R. SIMS, Regional Manager, Southern Region. Mr.Sims received a Bachelor of Science Degree in Civil Engineering
Technology from Texas A&M University in 1973. He began working for TRA in May 1973 at the Devers Canal System and
became Project Manager for Lake Livingston Recreation Facilities in 1977. In October 1983 he became Project Manager for
Lake Livingston Utility Services Project and advanced to Division Manager of the Water Services Division in May 1985. He
was promoted to Assistant Regional Manager,Southern Region in December 1988 and advanced to his current position in March
1996. Sims serves as Vice Chairman of the City of Huntsville Planning & Zoning Commission. He has served as a board
member of the Huntsville Boys Baseball Association and has been an active supporter of Huntsville-area youth baseball
programs.
ROBERT E. MOORE, CPA, Financial Services Manager. Mr. Moore served four years in the United States Navy in the
Western Pacific from 1969 to 1973 during which time he received an air medal for flight operations in a combat zone and the
Navy Commendation Medal. He received a Bachelor of Business Administration in Accounting from the University of Texas at
Austin and has taken graduate classes in accounting,finance and computer science at the University of Texas at Arlington. Mr.
Moore is a member of the Beta Alpha Psi Accounting Honor Society and the Beta Gamma Sigma Business Honor Society. He
became a Certified Public Accountant in February of 1978. Prior to joining the Trinity River Authority, Mr. Moore was
employed by Arthur Young & Company and General Dynamics, and began working for the Authority in March, 1978 as the
Senior Manager of the Finance Division. He held various volunteer leadership positions with the Boy Scouts of America from
1986 to 1990. He has served on the Supervisory Committee of the Arlington Federal Credit Union. He is currently a member of
the Texas Society of Certified Public Accountants, the American Institute of Certified Public Accountants, the Government
Finance Officers Association of Texas and the Government Treasurer's Association of Texas.
THOMAS D.SANDERS,Construction Services Manager. Mr.Sanders received a B.S.degree in education from the University
of Texas at Austin in 1970. He earned a second B.S. degree in civil engineering from the University of Texas at Arlington in
1985. Mr. Sanders was employed by the Authority in May 1979 as Manager of Administrative and Technical Services for the
Northern Region. In November of the same year, he was promoted to Assistant Regional Manager, Northern Region. He was
promoted to his current position in May 1985. Mr. Sanders is a member of Tau Beta Pi and Chi Epsilon, engineering honor
fraternities. He is a board of trustee member for the Wm C. Martin United Methodist Church in Bedford. He is a past member
of the church's Administrative Board and Nominating Committee. He is a past member of the Airport Area YMCA Board of
Directors.
A-5
DON A.TUCKER,General Services Manager. Mr.Tucker received a BA degree from the University of Texas at Arlington and
has done extensive graduate work in the School of Urban Studies at UTA. He served in the infantry, United States Marine
Corps, in Vietnam. Prior to joining the Trinity River Authority, Mr. Tucker served as Supervisor for the Claims Cost Control
Unit for The Travelers Insurance Company and as a Senior Underwriter for Mortgage Guaranty Insurance Corporation. Mr.
Tucker was employed by the Authority in 1976 as Director of Administration and was promoted to Division Manager in 1978,
and advanced to his current position in 1997. Mr.Tucker has an Associates in Risk Management(ARM)through the Chartered
Property Casualty Underwriters(CCU)/American Insurance Institute. In 1996,he was selected as"Safety Manager of the Year"
by the Texas Safety Association and currently serves as a member of the Board of Directors for that organization. He is a
member of the Public Risk Insurance Management Association,and the American Society of Safety Engineers. He has served as
Campaign Chairman and/or Loaned Executive for the United Way for 20 years. He has also served as a member of the Board of
Directors of the Arlington North Little League and the American Cancer Society for many years.
J.SAM SCOTT,Executive Services Manager. Mr.Scott received a B.S.degree from East Texas State University. He joined the
Authority's staff in 1973 and his responsibilities now include managing the Aircraft Operation Division,the Public Information
Division,the Planning and Environmental Management Division,and he is responsible for Congressional and State Legislative
liaison activities. He also serves as the Authority's Chief Disbursing Officer. In addition,he is past Chairman of the Board of
Directors of the Arlington Federal Credit Union and is a member of the Arlington Downtown Rotary Club. Mr. Scott was an
Army Communications Specialist,and served in the White House Communication Agency which was responsible for providing
communications services to the president.
JAMES L. MURPHY, Secretary, Board of Directors and Staff Attorney. Mr. Murphy received his Bachelor of Arts and Doctor
of Jurisprudence degrees from Tulane University in New Orleans, Louisiana. He joined the Trinity River Authority in April
1992. Mr. Murphy previously served with the Texas Water Commission and was general counsel for the Texas Water Well
Drillers Board. He also held legal positions with both Chevron,and CNG Producing Company,oil and gas firms.Mr.Murphy is
a member of the State Bar of Texas,and the Dallas and Tarrant County Bar Associations,and serves on the Administrative Law
Advisory Commission of the Texas Board of Legal Specialization.
A-6
APPENDIX B
CERTAIN FINANCIAL AND OPERATING DATA
OF THE
City of Bedford
City of Colleyville
City of Euless
City of Grapevine
City of North Richland Hills
The information contained in this Appendix consists of information relating to the Cities for the Fiscal Year Ending September 30,
2004. The Cities have executed a Continuing Disclosure Agreement pursuant to which the Cities have undertaken to provide
annually the financial information and operating data specified herein. Any financial statements to be provided shall be provided to
each nationally recognized municipal securities information repository and to the state information depository. See "Other
Information-Continuing Disclosure of Information"herein.
CITY OF BEDFORD,TEXAS
TABLE 1-WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENTS OF OPERATION
Fiscal Year Ended September 30,
Revenues 2004 2003 2002 2001 2000
Water Sales $ 7,763,546 $ 8,272,334 $ 7,893,649 $ 8,225,346 $ 8,953,160
Charges for Sewer Services 3,671,813 3,165,016 3,079,773 3,148,901 3,197,008
Interest Income 53,328 84,876 153,683 372,902 471,034
Other 680,323 301,207 279,214 497,563 195,396
Total Revenue $ 12,169,010 $ 11,823,433 $ 11,406,319 $ 12,244,712 $ 12,816,598
Expenses
Water Supply and Distribution $ 5,799,624 $ 6,458,798 $ 6,175,025 S 5,914,178 $ 5,986,050
Wastewater Collection and Disposal 2,736,302 2,661,601 2,535,842 2,436,418 2,490,929
Billing and Collection 842,721 813,683 588,887 675,951 567,782
Public Services/Engineering 1,940,511 371,600 367,108
Administrative Overhead/Payment
in Lieu of Taxes 246,594 1,556,804 1,584,612 1,670,409 1,666,730
• Total Expense $ 11,565,752 $ 11,862,486 $ 11,251,474 $ 10,696,956 $ 10,711,491
Net Available for Debt Service $ 603,258 $ (39,053) $ 154,845 $ 1,547,756 $ 2,105,107
Water Customers 22,662 22,451 22,451 22,257 22,020
Sewer Customers 22,170 21,942 21,800 21,733 21,576
TABLE 2-COVERAGE AND FUND BALANCES
Average Annual Principal and Interest Requirements,2005-2027 $ 325,118
Coverage of Average Annual Requirements by 9/30/04 Net Income 1.86x
Maximum Principal and Interest Requirements,2005 5 667,633
Coverage of Maximum Requirements by 9/30/4 Net Income 0.90x
Water and Sewer System Revenue Bonds Outstanding, 1/31/05 $ 4,960,000
Interest and Sinking Fund,9/30/04 $ 560,098
Reserve Fund Balance,9/30/04 $ 390,335
Repair&Replacement Fund Balance,9/30/04 $ 74,697
TABLE 3-REVENUE BONDS AUTHORIZED BUT UNISSUED
As of September 30,2004,the City has no authorized but unissed revenue bonds.
B-I
TABLE 4-MONTHLY WATER RATES(EFFECTIVE OCTOBER 1,1999)
5/8 inch meter $ 10.20
5/8 inch meter(account holder 9.00
over 65 years of age)
1 inch meter 20.40
1 1/2 inch meter 40.80
2 inch meter 65.28
All meters in excess of 2 inches Charge to be determined by established method.
Inside City Limits
Minimum charge per month $ 10.20 for account holder under 65 years of age.
9.00 for account holder over 65 years of age.
All water used per month 2.07 per 1000 gallons.
Outside City Limits-Single-family and commercial,duplex and multi-family rates.
Charges shall be twice the amount as charged to the like resident of the City.
TABLE S-MONTHLY SEWER RATES(EFFECTIVE APRIL 1,2004)
All customers'I'
Flat Rate $7.50
Up to 12,000 Gallons(2) $1.06 per 1,000 gallons
(1) Based on average volume of water used during December,January and February.
(2) There is not gallon limit for non-residential customers.
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B-2
CITY OF COLLEYVILLE,TEXAS
TABLE 1-WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENTS OF OPERATION
Fiscal Year Ended September 30,
Revenues 2004 2003 2002 2001 2000
Metered Water Sales $ 5,732,211 $ 5,968,330 $ 5,778,866 $ 5,705,016 $ 6,570,638
Sewer Service Charges 2,007,678 1,921,099 1,855,462 1,772,235 1,983,964
Miscellaneous charges and fees 1,185,053 706,442 394,730 316,807 365,427
Interest Income 146,362 245.029 377,975 683,658 620,036
Total Revenues $ 9,071,304 $ 8,840,900 $ 8,407,033 $ 8,477,716 $ 9,540,065
Expenses
Personal Services $ 1.472.700 $ 1,289,058 $ 1.218,943 $ 1,145.539 $ 946,037
Maintenance and Contractual 4,496,368 5,022,940 4,540,557 4,570,038 4,581,437
Services
Materials and Supplies 148,210 132,484 150,348 77,789 . 171,220
Total Expenses $ 6,1 17,278 $ 6,444,482 $ 5,909,848 $ 5,793,366 $ 5,698,694
Net Available for Debt Service $ 2,954,026 $ 2,396,418 $ 2,497,185 $ 2,684,350 $ 3,841,371
Water Customers 8,067 7,781 7,643 7,490 7,282
Sewer Customers 7,294 7,112 6,972 6,741 6,492
TABLE 2-COVERAGE AND FUND BALANCES
Average Annual Principal and Interest Requirements,2005-2018 $ 813,228
Coverage of Average Requirements by 9-30-04 Net Available for Debt Service 3.81 Times
Maximum Annual Principal and Interest Requirements,2005 $ 1,142,560
Coverage of Maximum Requirements by 9-30-04 Net Available for Debt Service 2.72 Times
Waterworks and Sewer System Revenue Bonds Outstanding(as of 9-30-04) $ 11,385,191
Interest and Sinking Fund(as of 9-30-04) $ 671,635
Reserve Fund(as of 9-30-04) $ 858,895
TABLE 3-REVENUE BONDS AUTHORIZED BUT UNISSUED
As of September 30,2004,the City has no authorized but unissued revenue bonds.
TABLE 4-WATER USAGE
Fiscal Average
Year Day Total
End Usage Usage
2000 5,755,207 2,100,650,700
2001 5,173,734 1,888,412,900
2002 4,340,198 1,584,172,290
2003 5,321,354 1,942,294,311
2004 4,956,149 1,812,279,442
B-3
TABLE 5-MONTHLY WATER RATES
In-City Out-City
Customers Customers
First 2,000 Gallons(Minimum) $12.00 $16.00
All Over 2,000 Gallons $2.87/M Gallons $2.87/M Gallons
TABLE 6-MONTHLY SEWER RATES
First 2,000 Gallons(Minimum) $8.60(Minimum)
All Over 2,000 Gallons $1.76 Gallons
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B-4
CITY OF EULESS,TEXAS
TABLE 1-WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENTS OF OPERATION
Fiscal Year Ended September 30,
Revenues 2004 2003 2002 2001 2000
Water Service $ 7,711,174 $ 7,514,610 $ 6,814,958 $ 7,361,182 $ 7,657,132
Sewer Service 4,545,079 4,131,233 3,510,524 3,635,063 3,730,338
Service Fees&Miscellaneous 979,337 1,122,639 1,041,043 1,344,912 707,086
Interest Income 207,584 250,452 352,886 743,326 1,463,495
Total Revenues $ 13,443,174 $ 13,018,934 S 11,719,411 $ 13,084,483 513,558,051
Expenses
General and Administrative $ 548,040 $ 492,634 $ 412,639 $ 1,321,603 $ 650,148
Water Production 4,565,657 4,133,833 4,228,021 4,502,134 5,602,315
Water Distribution 519,178 621,162 478,796 521,269 485,540
Utility Engineering 429,824 437,664 419,260 377,846 337,400
Sewage Collection and Treatment 1,610,313 1,626,221 1,805,154 925,325 278,061
Nondepartmental 2,197,416 2,101,906 1,976,005 2,275,918 2,314,479
Geographic Information 253,898 247,989 239,884 273,029 210,125
Service Center 778,196 769,840 739,181 718,660 684,067 •
Total Expenses $ 10,902,522 $ 10,431,249 $ 10,298,940 $ 10,915,784 $10,562,135
Net Available for Debt Service $ 2,540,652 $ 2,587,685 $ 1,420,471 $ 2,168,699 $ 2,995,916
Water Customers 23,848 23,208 22,586 22,056 21,588
Sewer Customers 23,368 22,697 21,864 21,537 20,858
+ TABLE 2-COVERAGE AND FUND BALANCES
Net Available for Debt Service,9/30/04 $ 2,540,652
Average Annual Principal and Interest Requirements,2005-2024 $ 402,462
Coverage of Average Annual Requirements by 9/30/04 Net Available for Debt Service 6.31 x
Maximum Principal and Interest Requirements,2005 $ 580,524
Coverage of Maximum Annual Requirements by 9/30/04 Net Available for Debt Service 4.38x
Waterworks and Sewer System Revenue Bonds Outstanding,9/30/04 $ 5,220,000
Interest and Sinking Fund,9/30/04 $ 9,998
Reserve Fund,9/30/04 $ 366,170
TABLE 3-REVENUE BONDS AUTHORIZED BUT UNISSUED
Date Amount Issued
Authorized Purpose Authorized To Date Unissued
1/17/1970 Water $ 4,000,000 $ 3,500,000 $ 500,000
1/17/1970 Sewer Improvements 1,000,000 300,000 700,000
Total $ 5,000,000 $ 3,800,000 $ 1,200,000
*The City has no intent to issue these bonds.
A
B-5
TABLE 4-HISTORICAL WATER USE
Fiscal Trinity
Year Total Usage Water River
Ended Daily Average Peak Day (000'S) Revenue Wells Authority
2000 7.50 MGD 15.76 MGD 2,736,800 $ 6,311,357 438 2298.8
2001 6.79 MGD 14.09 MGD 2,476,603 7,361,182 341.8 2134.8
2002 6.34 MGD 12.00 MGD 2,314,400 6,814,958 474.9 1839.5
2003 6.71 MGD 15.39 MGD 2,450,100 7,514,610 555.0 1895.1
2004 6.93 MGD 15.39 MGD 2,571,761 7,711,174 425.1 2146.7
TABLE 5-MONTHLY WATER RATES(EFFECTIVE JANUARY 1,2005)
New Rates(Effective January 1,2005)
Inside City Outside City
$7.25 minimum $10.00 minimum
+$2.80 per 1,000 gallons +$2.80 per 1,000 gallons
Old Rates(Effective March I.2003)
Inside City Outside City
$7.25 minimum $10.00 minimum
+$2.60 per 1,000 gallons +$2.60 per 1,000 gallons
TABLE 6-MONTHLY SEWER RATES(EFFECTIVE MARCH 1,2003)
New Rates(Effective March 1,2003)
Inside City Outside City
$5.50+$1.93 per 1,000 $10.00+$1.93 per 1,000
gallons of 90%of metered gallons of 90%of metered
water water
Old Rates
Inside City Outside City
$5.20+$1.39 per 1,000 $10.00+$1.39 per 1,000
gallons of metered water gallons of metered water
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ie
B-6
CITY OF GRAPEVINE,TEXAS
TABLE 1-WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENTS OF OPERATION
Fiscal Year Ended September 30,
Revenues: 2004 2003 2002 2001 2000
Charges for services $ 16,595,242 $ 16,307,775 $ 16,146,745 $ 15,805,663 $ 14,899,978
Operating Expenses:1 1
Water Fund $ - $ - $ 8,497,403 $ 7,906,159 $ 7,401,225
Wastewater Fund - - 2,304,427 2,741,160 2,538,568
Salaries and benefits 2,188,023 2,008,406 - _ -
Maintenance,repairs and supplies 5,640,399 6,410,333 - - -
General and administrative 3,026,049 2,852,380 _
Total Operating Expenses $ 10,854,471 $ 11,271,119 $ 10,801,830 $ 10,647,319 $ 9,939,793
Net Revenue from Operations $ 5,740,771 $ 5,036,656 $ 5,344,915 $ 5,158,344 $ 4,960,185
Investment Income 392,280 512,733 596,093 1,277,173 1,360,288
Impact Fee 2,891,992 2,491,613 2,178,915 2,262,486 980,501
Other Net 598,392 92,098 (185,975) 127,387 (8,178)
Net Available for Debt Service $ 9,623,435 $ 8,133,100 $ 7,933,948 $ 8,825,390 $ 7,292,796
Average Annual Debt $ 2,261,399 $ 2,371,297 $ 2,473,392 $ 2,564,738 $ 2,379,978
•
Average Annual Debt Coverage 4.26x 3.43x 3.21 x 3.44x 3.06x
Average Annual Debt Coverage
without Impact Fees 2.98x 2.38x 2.33x 2.56x 2.66x
Water Customers 13,676 13,467 13,242 12,951 12,744
Wastewater Customers 12,461 12,198 12,185 11,924 12,501
(1) Excludes depreciation and amortization.
TABLE 2-COVERAGE AND FUND BALANCES
Average Annual Principal and Interest Requirements,2005-2021 $ 2,261,399
Coverage of Average Requirements by 9/30/04 Net Available 4.26
Maximum Principal and Interest Requirements,2005 $ 4,234,703
Coverage of Maximum Requirements by 9/30/04 Net Available 2.27
Waterworks and Sewer System Revenue Bonds Outstanding as of 2/1/05 $ 26,299,660
Interest and Sinking Fund,9/30/04 $ 353,572
Reserve Fund,9/30/04 $ 2,265,756
B-7
TABLE 3-WATER USAGE
Peak Average
Fiscal Day Day Total
Year Usage Usage Usage(I)
2000 20,300,000 9,749,000 3,558,482,000
2001 19,591,000 9,249,000 3,060,023,000
2002 17,528,000 8,737,000 3,189,163,000
2003 21,087,000 8,793,000 3,209,367,000
2004 16,624,000 8,585,000 3,142,132,000
(I) Water consumption pumped or treated.
TABLE 4-MONTHLY WATER RATES(EFFECTIVE OCTOBER 1,2002)
General Water Consumption
First 2,000 gallons $9.75(Minimum)
Over 2,000 gallons $2.74/M gallons
TABLE 5-MONTHLY SEWER RATES(EFFECTIVE OCTOBER 1,2002)
Residential Service Commercial Service
First 2,000 gallons $7.80(Minimum) First 2,000 gallons $11.52(Minimum)
Next 13,000 gallons $3.26/M gallons Over 2,000 gallons $ 3.26/M gallons
TABLE 6-APPLICATION AND COST DEPOSIT FOR WATER,WASTEWATER AND REFUSE SERVICE
Single-family residential,minimum $ 50.00
Multi-family(apartments),minimum per 2"tap* 40.00
Commercial,minimum 40.00
Industrial,minimum 230.00
3/4"Construction Meter 125.00
2"Construction Meter 750.00
Master deposit account 250.00
*Per dwelling unit
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B-8
•
CITY OF NORTH RICHLAND HILLS,TEXAS
TABLE 1-WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENTS OF OPERATION
Fiscal Year Ended September 30,
Operating Revenues 2004 2003 2002 2001 2000
Water and Sewer Service Sales $ 19,571,781 $ 19,465,910 $ 18,173,883 $ 18,191,456 $ 18,674,786
Water and Sewer Connections 402,062 522,198 390,606 573,554 602,556
Service Charges 791,090 751,200 778,502 752,502 725,574
Inspection Fees 50,725 62,838 48,375 36,976 93,350
Assessment Revenue - 5,736 1,090 158 1,846
Other Intergovernmental 320,896 44,054 47,071 66,770 38,926
Other Revenues 45,604 - - 27,591 45,606
Other lncome(Expense) - - - (1,137) -
Investment Income - 137,626 515,995 892,327 889,165
Total Revenues $ 21,182,158 $ 20,989,562 $ 19,955,522 $ 20,540,197 $ 21,071,809
Operating Expenses(1)
Contractual Services $ 11,498,554 $ 10,951,364 $ 10,268,566 $ 9,886,338 $ 9,280,277
Personal Services 3,721,169 3,342,748 3,117,517 2,862,818 2,713,889
Repairs and Maintenance 1,929,219 1,757,994 1,713,380 1,707,683 1,549,190
Supplies 128,152 228,511 143,710 117,416 123,449
Franchise Fees 558,976 547,421 525,038 353,600 347,425
Payments in Lieu of Taxes 318,856 307,791 297,439 282,744 248,982
Administration Fees 1,222,164 1,163,964 1,108,524 1,055,750 1,024,992
Total Operating Expenses $ 19,377,090 $ 18,299,793 $ 17,174,174 $ 16,266,349 $ 15,288,204
Net Available for Debt Service $ 1,805,068 $ 2,689,769 $ 2,781,348 $ 4,273,848 $ 5,783,605
Water Connections 18,977 18,611 18,329 18,091 18,048
Sewer Connections 17,898 17,588 17,020 16,654 17,158
(I) Excludes Depreciation.
TABLE 2-COVERAGE AND FUND BALANCES
As of September 30,2004,the City has no remaining revenue debt.
TABLE 3-REVENUE BONDS AUTHORIZED BUT UNISSUED
As of September 30,2004,the City has no authorized but unissed revenue bonds.
TABLE 4-WATER USAGE
Peak Average
Fiscal Day Day Total
Year Usage Usage Usage
2000 26,599,000 12,149,463 4,434,554,111
2001 25,594,000 11,421,478 4,168,839,800
2002 19,272,000 8,720,888 3,183,124,000
2003 22,260,000 8,904,670 3,250,204,500
2004 17,957,000 8,458,652 3,087,407,843
B-9
TABLE 5-MONTHLY WATER RATES(EFFECTIVE JANUARY 1,2003)
I. Billing policy where only one user or building is tied to the same meter:
The monthly bill will be computed as follows. The minimum bill taken from Schedule A plus a volume charge of
$2.45 per 100 cubic feet on monthly volume greater than the minimum volume from Schedule A.
2. Billing policy where more than one user or building is tied onto the same meter:
It shall be the policy of the City to bill each home,homes, duplex,triplex,offices or any other building where more
than one user is tied on the same meter at the rate of$9.00 per unit per month minimum for the first 267 cubic feet of
water used,plus a volume charge calculated from Schedule A.
3. Billing for apartment complexes and trailer parks:
A. $9.00 per month for each apartment or trailer for the first 267 cubic feet of water used plus a volume charge calculated
from Schedule A.
B. Apartment house or trailer park owner shall furnish a certified statement of occupancy prior to the 10th of each month.
Failure to file occupancy statement will result in billing for 100%occupancy.
Schedule A
(Volume Used in Cubic Feet)
Meter Size(inches) 3/4" 1" 1 1/4" 1 1/2" 2" 3" 4" 6"and 8"
Minimum Bill $9.00 $ 12.60 $ 17.11 $36.01 $ 46.82 $ 86.43 $ 144.06 $ 369.29
Volume Charge:
Minimum Bill for the first: 267 345 460 937 1,300 2,400 4,000 10,000
$2.45 for all above: 267 345 460 937 1,300 2,400 4,000 10,000
Water Pass Through Charge: Plus$0.3281 per 100 cubic feet
TABLE 6-MONTHLY SEWER RATES(EFFECTIVE JANUARY 1,2003)
I. A monthly service charge shall be paid by all customers in the amount of$7.22.
2. A monthly volume charge shall also be charged to all customers in the amount of$1.17 per 100 cubic feet of water used,or
wastewater produced,as more specifically set forth hereinafter.
The monthly volume charge for residential customers will be based on the individual customer's average monthly water use
during the previous winter quarter months of December, January and February; but in no event shall the volume used to
compute this monthly charge exceed 2,500 cubic feet.The volumes used to compute these charges are based on the amount
of water used by the residential customer as measured by a meter. Where no previous winter quarter average is available
from the records, the volume to be used for this monthly volume charge shall be estimated, such estimated volume not to
exceed 2,500 cubic feet per customer.
3. The monthly charges to commercial and industrial customers will be based on total water use for each month as measured by
appropriate meters, with the provision that if a customer can show, to the satisfaction of the Director of Utilities, that a
significant portion of the metered water usage does not enter the sanitary sewer system,the customer will be charged for only
that volume entering the sewers,as determined by a method approved by the Director of Utilities.
4. All Industrial Users:
To be served on system only by specific contract approved by Council for the particular Industrial Sewage or Water
involved.
5. In the event a commercial customer is introducing sewage into the sewage system that creates unusual conditions or problems
such as excessive oils,greases,or chemicals,the Director of Utilities shall advise the customer of his options.
A. To correct at his own expense,the conditions causing the excess.
B. To pay a monthly rate to be determined by the Director of Utilities to the City equal to the expense of maintaining
and/or treating the excessive waste.
B-10
6. Billing policy where more than one user or building is tied onto the same water meter:
It shall be the policy of North Richland Hills to bill each home,homes,duplex,triplex,offices,or any other buildings where
more than one user is tied onto the same water meter at $7.22 per month for each customer unit for sewer,plus a monthly
volume charge of$1.17 per 100 cubic feet of water used by the building. The monthly volume charge to be calculated as
noted in paragraph B(2)above with the exception that there shall be no volume limit as is the case for residential customers.
7. Billing for apartment complexes and trailer parks:
A. $10.00 per month service charge plus$7.22 per month per apartment or trailer plus a monthly volume charge of
$1.17 per 100 cubic feet of water used by the apartment complex or park.
C. Apartment or trailer park owner shall furnish a certified statement of occupancy prior to the 10th of each month.
Failure to file occupancy statement will result in billing for 100%occupancy.
8. A Sewer pass through rate of$0.4345 per 100 cubic feet will also be applied.
Service Charge
$ 7.22 Flat Rate
$ 0.5129 per 100 cubic feet Pass Through Rate
Volume Charge
Residential
$1.17/100 CF based on average monthly water use during the previous winter quarter months of
December,January,and February,not to exceed 2,500 CF.
Commercial and Industrial
$1.17/100 CF based on total water use for each month as measured by appropriate meters,with the
provision that if a customer can show,to the satisfaction of the Director of Utilities,that a significant
portion of the metered water usage does not enter the sanitary sewer system,the customer will
be charged for only that volume entering the sewer,as determined by a method approved by the Director of Utilities.
TABLE 7-DEPOSITS
Schedule B
(Water and Sewer Deposits)
(Effective February 1994)
Customer Type Water Sewer Total
Residential: $ 37.00 $ 18.00 $ 55.00
All sizes:
Commercial:
3/4"- 1 1/4" $ 55.00 $ 36.00 $ 91.00
1 1/2"-4" 350.00 180.00 530.00
4,300.00 2,710.00 7,010.00
Multi-family:
All Sizes/Per Unit $ 20.00 $ 19.00 $ 39.00
(Remainder of page intentionally left blank)
B-II
i:-
•
APPENDIX C
CERTAIN FINANCIAL AND OPERATING DATA
OF
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
TARRANT COUNTY
WATER PROJECT
ENTERPRISE FUND
c-
•
TRINITY RIVER AUTHORITY OF TEXAS
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
STATEMENT OF NET ASSETS
NOVEMBER 30,2004
ASSETS
CURRENT ASSETS:
Cash (Note 1) $ " •100
Equity in Pooled Cash and Investments 3,907,527
Accounts Receivable-Contracting Parties 264,362
Other Assets 626,243
Due from Reserve Fund 1,326
Due to Interest and Sinking Funds (273,886)
Due to Construction Funds (2,328,225)
Total Current Assets 2,197,447
RESTRICTED ASSETS(Note 1):
Interest and Sinking Funds:
Equity in Pooled Cash and Investments $ 6,589,853
Accrued Investment Income 38,257
Due from Current Assets 273,886 $ 6,901,996
Reserve Fund:
Equity in Pooled Cash and Investments 78,006
United States Government and Agency
Obligations-At Fair Value 8,230,320
Due to Current'Assets (1,326) 8,307,000 •
Construction Funds:-
Equity in Pooled Cash and Investments 27,733,711
Due from Current Assets Z328,225 30,061,936
Total Restricted Assets 45,270,932
CAPITAL ASSETS(Note 3):
Land and Easements 1,790,000
Water Transportation and Treatment Facilities 86,938,808
Accumulated Depreciation (26,278,190) 60,660,618
Machinery and Equipment 763,351 •
Accumulated Depreciation (379,305) 384,046
Construction-in-Progress 19,699,055
Total Capital Assets-Net 82,533,719
DEFERRED CHARGES-
Unamortized Bond Premium and Expense,etc. (1,440,407)
TOTAL ASSETS 0 128,561,691
C-2
EXHIBIT 13-1
LIABILITIES
CURRENT UABILITIES:
Payable from Current Assets:
Accounts Payable and Accrued Expenses $ 162,958
Accounts Payable-Contracting Parties 473,071
Due to Other Authority Funds 3,381 $ 639,410
Payable from Restricted Assets:
Accounts and Retainage Payable 1,919,820
Revenue Bonds-Current Maturities(Note 4) 5,945,000
Accrued Interest on Bonds Payable 1,559,792 9,424,612
Total Current Liabilities 10,064,022
LONG-TERM DEBT:
Revenue Bonds,Less Current Maturities(Note 4) 91,135,000
Deferred Amount from Refunding(Note 4) (456,554)
Accounts Payable and Accrued Expenses(Note 4) 24,029
Total Long-Term Debt-Net 90,702,475
TOTAL LIABILITIES 100,766,497.
NET ASSETS
Invested in Capital Assets,Net of Related Debt 12,614,232
Restricted for -Debt Service 13,649,204
Unrestricted 1,531,758
TOTAL NET ASSETS $ 27,795,194
•
•
The accompanying notes are an integral part of the financial statements.
C-3
TRINITY RIVER AUTHORITY OF TEXAS EXHIBIT 13-2
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30,2004
OPERATING REVENUE(Note 2):
Water Sales Contract Charges (Note 2):
Euless $ 3,548,050
Bedford 4,573,513
Colleyville 3,134,110
Grapevine 2,768,152
North Richland Hills 3,681,013
Total Operating Revenue 17;704,838
OPERATING EXPENSES.EXCLUSIVE OF DEPRECIATION 9,653,315
OPERATING INCOME BEFORE DEPRECIATION 8,051,523
DEPRECIATION 2,260,558
OPERATING INCOME 5,790,965
NON-OPERATING REVENUE(EXPENSES):
Investment Income $ 730,938
Interest Expense (2,707,616)
Amortization of Bond Sale Expense (99,664)
Paying Agent Fees (803) "
SEC Debt Disclosure Fees (3,500)
Other Financing Costs (2,250)
Other 23,350
Total Non-Operating Revenue(Expense)-Net (2,059,545)
NET INCOME BEFORE TRANSFERS 3,731,420
TRANSFERS IN 44,000
TRANSFERS OUT (19,420)
CHANGE IN NET ASSETS 3,756,000
NET ASSETS-DECEMBER 1, 2003 24,039,194
NET ASSETS-NOVEMBER 30, 2004 $ 27,795,194
The accompanying notes are an integral part of the financial statements.
C-4
a
TRINITY RIVER AUTHORITY OF TEXAS •
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
STATEMENT OF CASH FLOWS
YEAR ENDED NOVEMBER 30,2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 17,499,976
Cash Payments to Suppliers for Goods and Services (9,043,103)
Cash Payments to Employees for Services (1,047,662)
Cash Payments to Other Funds for Services (289,139)
Net Cash Provided by Operating Activities $ 7,120,072
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Transfer from Other Authority Funds 44,000
Transfer to Other Authority Funds (19,420)
Other Cash Receipts 23,350
Net Cash Provided by Non-Capital Financing Activities 47,930 •
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Acquisition and Construction of Capital Assets (10,509,023)
Principal Paid on Revenue Bond Maturities (5,720,000)
Interest Paid on Revenue Bonds (4,776,003)
Paying Agent Fees (803)
SEC Debt Disclosure Fees (3,500)
Net Cash Used for Capital and Related Financing Activities (21,009,329)
CASH FLOWS FROM INVESTING ACTIVITIES: •
Investment,Net of Reinvestment (3,890,820)
Investment income 709,891
•
Net Cash Used for Investing Activities (3,180,929)
NET DECREASE IN CASH AND CASH EQUIVALENTS (17,022,256)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 55,331,453
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 38,309,197
C-6
EXHIBIT 13-3
•
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Operating Income $ 5,790,965
Adjustments to Reconcile Operating Income to Net
Cash Provided by Operating Activities:
Depreciation $ 2,260,558
Change in Assets and Liabilities:
Increase in Accounts Receivable-Contracting Parties (144,625)
Increase in Other Assets (626,243)
Decrease in Accounts Payable-Contracting Parties (60,237)
Decrease in Accounts Payable (73,987)
Decrease in Due to Other Authority Funds (26,359)
Total Adjustments 1,329,107
Net Cash Provided by Operating Activities $ 7,120,072
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Amortization of Bond Sale Expense $ 99,584
Amortization of Bond Premium/Discount (196,135)
Amortization of Deferred Loss on Refunding 73,048
Capitalization of Arbitrage Liability to Capital Assets 10,000
•
The accompanying notes are an integral part of the financial statements.
C-7
TRINITY RIVER AUTHORITY OF TEXAS
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
1. See Exhibit 1-6, Note 1 for summary of significant accounting and reporting policies.
2. The Authority entered into contracts with the Cities of Euless, Bedford, Colleyville,Grapevine
and North Richland Hills,Texas("Cities")whereby the Authority agrees to sell and deliver
treated water to the Cities and the Cities agree to pay the Authority for water supplied. The
Cities have agreed, among other things,to pay the Authority amounts sufficient to meet the
debt service obligations of the bonds and operating expenses. In addition,the Authority has
contracted with the Tarrant County Water Control and Improvement District Number One and
the City of Fort Worth for the purchase of water that will be delivered to Lake Arlington by the
District. In prior years,in connection with the expansion of the water treatment and
transmission facilities,the Authority has received contributions from Tarrant County in the
amount of$444,500 and contributions of$586,189 from various other parties that have been
used to make improvements to the system.
•
3. Capital asset activity and the related changes in accumulated depreciation for the year ended
November 30,2004 are as follows:
Balance Balance
Series December 1.2003 Additions Deletions November 30,2004
Land and Easements $ 1,790,000 $ 1,790,000
Water Transportation and
Treatment Facilities 86,669,033 $ 269,775 86,938,808
Accumulated
Depreciation (24,111,819) (2,166,371) (26,278,190)
Machinery and Equipment 833,493 39,246 $(109,388) 763,351
Accumulated
Depreciation (394,506) (94,187) 109,388 (379,305)
Construction-in-Progress 6,378,997 13,589,833 (269,775) 19,699,055
Total $ 71,165,198 $ 11,638,296 $(269;775) $ 82,533,719�
4. The outstanding bonds of the Tarrant County Water Project Enterprise Fund as of
November 30,2004 are as follows:
Outstanding
Series Principal Amount Interest Rates
1999 $28,945,000 5.000%-5.250%
2003 68,135,000 3.000%-5.500%
Total $ 97,080,000
C-8
EXHIBIT 13-4
Changes in the long-term debt during the year ended November 30,2004 were as follows:
Balance Balance Current
Series December 1,2003 Additions Deletions November 30,2004 Portion
1999 $ 30,100,000 $ 1,155,000 $ 28,945,000 $ 1,210,000
2003 72,700,000 4,565,000 68,135,000 4,735,000
102,800,000 NIL 5,720,000 97,080,000 5,945,000
Compensated
Absences 63,549 $43,166 42,958 63,757 39,728
Total Long-
Term Debt $ 102,863,549 $43,166 $ 5,762,958 $ 97,143,757 $ 5,99884,728
Compensated absences are reported with accounts payable and accrued expenses on the
Statement of Net Assets.
Annual debt service requirements to maturity,including interest,for each series are set forth
in Exhibit 52 and are summarized as follows:
Year Ending
November 30 Interest Principal
2005 $ 4,578,100 $ 5,945,000
2006 4,371,475 6,180,000
2007 4,173,887 4,960,000
2008 3,965,344 5,145,000
2009 3,733,281 5,330,000
2010-2014 15,751,813 21,370,000
2015-2019 9,503,432 27,610,000
2020-2022 1,732,545 20,540,000
$ 47,809,877 $97,080,000
In prior years,the Authority issued bonds to fully refund the Series 1993 and Series 1993-A
Revenue Bonds. The net proceeds were deposited in an irrevocable trust with an escrow
agent to provide for all future debt service payments on the old bonds. Accordingly,the trust
accounts and the defeased bonds are not included in the Tarrant County Water project
financial statements.
At November 30,2004,the following outstanding bonds are considered to be defeased:
Series 1993 $22,705,000
Series 1993-A 4,495,000
5. The Tarrant County Water Project construction program includes various projects to construct
and improve transportation and treatment activities. At November 30,2004,the Authority was •
committed under construction contracts for$30,793,734,of which$11,883,120 had been
incurred.
C-9
6. The Authority capitalized interest in 2004 in connection with construction in the Tarrant
County Water Project. The net interest capitalized for the year in connection with this project
was$1,880,882.
•
•
C-10
TRINITY RIVER AUTHORITY OF TEXAS
TARRANT COUNTY WATER PROJECT ENTERPRISE FUND
SCHEDULE OF EXPENSES-BUDGETED AND ACTUAL •
YEAR ENDED NOVEMBER 30,2004
ORIGINAL FINAL
BUDGET BUDGET ACTUAL
WATER TRANSPORTATION: •
Personal Services:
Salaries $ 836,620 $ 836,620 $ 769,912
Payroll Taxes-FICA 64,000 64,000 57,234
Employee Benefit-Health/Life Insurance 107,970 107,970 108,693
Employee Benefit-Pension 90,820 90,820 84,071
Unemployment Compensation 4,000 4,000
Employee Recognition Program 2,420 2,420 1,927
Employee Benefit-Education 900 900 324
Total 1,106,730 1,106,730 1,022,161
Supplies:
Office Supplies 2,900 2,900 2,094
Dues and Subscriptions 1,800 6,100 5,661
Fees Other Than Dues and Subscriptions 1,450 1,450 1,025
Maintenance and Operating Supplies 27,300 27,300 18,707
Laboratory Supplies 7,100 8,600 7,880
Process Chemicals and Supplies 886,270 886,270 838,524
Fuel,Oil and Lubricants 10,950 11,950 11,186
Computer Software, Lic. &Instr.Supplies 24,420 25,920 6,335
Total 962,190 970,490 891,412
Other Services and Charges:
Auditing 12,000 12,000 12,000
Engineering 42,500 42,500 26,851
Legal 2,000 2,000
Outside Services 77,870 77,870 35,810
Other Professional Services 3,610 3,610 2,660
Telephone and Telemetering 15,540 15,540 14,898
Postage 500 500 388
Printing and Binding 1,300 1,300 1,292
Insurance 70,690 70,690 68,192
Travel 4,500 4,500 1,557
Laundry, Uniforms and Ind.Equipment 5,620 6,420 6,160
Training 10,000 10,000 3,748
Utilities 5,690 5,690 583
Water 7,270,360 7,172,760 5,640,832
Power 1,492,940 1,552,940 1,550,667
Repairs and Maintenance-Distribution
System 50,500 50,500 44,693
Repairs and Maintenance-Equipment 7,300 11,300 11,158
Repairs and Maintenance-Plant&Bldgs. 52,400 52,400 35,814
Total Forward 9,125,320 9,092,520 7,457,303
C-12
EXHIBIT 13-5
ORIGINAL FINAL
BUDGET BUDGET ACTUAL
Total Forward $ 9,125,320 $ 9,092,520 $ 7,457,303
Repairs and Maintenance-Vehicles 2,200 4,200 3,398
Repairs and Maintenance-Electrical/
Electronics 17,800 17,800 6,268
Rent-Machinery and Equipment 6,700 10,200 9,993
Interfund Services and Charges 25,000 25,000 13,271
Operating Overhead 28,080 28,080 20,629
Administrative Overhead 228,880 228,880 228,880
Total 9,433,980 9,406,680 7,739,742
TOTAL OPERATING EXPENSES EXCLUSIVE
OF DEPRECIATION 11,502,900 11,483,900 9,653,315
CAPITAL OUTLAYS-
Machinery and Equipment* 20,300 39,300 39,246
DEBT SERVICE:
Bond Principal Payments 5,720,000 5,720,000 5,720,000
Interest on Long-Term Debt'* 2,383,360 2,383,360 2,383,360
Paying Agent Fees 2,000 2,000 803
SEC Disclosure Fees 3,500 3,500 3,500
TOTAL DEBT SERVICE 8,108,860 8,108,860 8,107,663
TOTAL $ 19,632,060 $ 19,632,060 $ 17,800,224
* Capital outlays for construction and certain other financing costs are excluded.
Those budgets are adopted on a project basis.
**Amount excludes amortization of bond premiums and discounts and deferred
amounts on refundings. Amount also excludes certain current year interest
payments which were paid from funds escrowed from prior year bond proceeds.
•
C-13
APPENDIX D
FORM OF BOND COUNSEL OPINION
Proposed Form of Opinion of Bond Counsel
An opinion in substantially the following form will be delivered by McCall, Parkhurst& Horton
L.L.P.,Bond Counsel, upon the delivery of the Bonds,assuming no material changes in facts or law.
LAW OFFICES
McCALL, PARKHURST & HORTON L.L.P.
600 CONGRESS AVENUE 717 NORTH HARWOOD 700 N.ST.MARY'S STREET
1250 ONE AMERICAN CENTER NINTH FLOOR 1525 ONE RIVERWALK PLACE
AUSTIN,TEXAS 78701-3248 DALLAS,TEXAS 75201-6587 SAN ANTONIO,TEXAS 78205-3503
Telephone:512 478-3805 Telephone:214 754-9200 Telephone:210 225-2800
Facsimile:512 472-0871 Facsimile:214 754-9250 Facsimile:210 225-2984
TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER
PROJECT) IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES
2005, DATED AUGUST 15, 2005, IN THE PRINCIPAL AMOUNT OF
$96,930,000
AS BOND COUNSEL FOR THE ISSUER (the "Issuer") of the Bonds described above
(the "Bonds"), we have examined into the legality and validity of the Bonds, which bear interest
from the dates specified in the text of the Bonds, until maturity or redemption, at the rates and
payable on the dates as stated in the text of the Bonds, and maturing on February 1 in each of the
years 2007 through 2025, inclusive, with the Bonds being subject to redemption prior to
maturity, all as provided in the resolution of the Issuer authorizing the issuance of the Bonds
(the "Bond Resolution").
WE HAVE EXAMINED the Constitution and laws of the State of Texas, certified copies
of the proceedings of the Issuer and other documents authorizing and relating to the issuance of
said Bonds, including one of the executed Bonds (Bond Number R-1).
BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been
duly authorized, issued and delivered, all in accordance with law; and that, except as may be
limited by laws relating to bankruptcy, reorganization, and other similar matters affecting
creditors' rights, (i) the covenants and agreements in the Bond Resolution constitute valid and
binding obligations of the Issuer, and the Bonds constitute valid and legally binding special
obligations of the Issuer which, together with other parity bonds, are, subject only to all
payments required to be made by the Issuer pursuant to the "Prior Lien Bond Resolutions" (as
such term is defined and applied in the Bond Resolution), secured by and payable from a first
lien on and pledge of(a) the Issuer's Net Revenues from its water supply contracts, each dated as
of January 21, 1972, and amended as of January 22, 1975, and as of December 5, 1979 (with
respect to the City of Euless, Texas) and December 11, 1979 (with respect to the City of
Bedford, Texas), and its water supply contracts, each dated as of April 25, 1979, and amended as
of December 5, 1979, and as of April 23, 1980, with the Cities of Colleyville, Grapevine, and
North Richland Hills, Texas (collectively the "Contracts"), all relating to the Issuer's Tarrant
County Water Project described in the Contracts, all as more fully described in the Contracts and
in the Bond Resolution, to each of which reference is hereby made for all purposes, and (b) the
Net Revenues the Issuer may receive from other parties, if any, with whom the Issuer may
D-1
contract in the future for supplying treated water from the Issuer's Tarrant County Water Project,
and (ii) each of the aforesaid Contracts is authorized by law, has been duly executed, is valid,
and is legally binding upon and enforceable by the parties thereto in accordance with their
respective terms and provisions.
THE ISSUER has reserved the right, subject to the restrictions stated in the Bond
Resolution, to issue additional parity revenue bonds which also may be secured by and made
payable from a first lien on and pledge of the aforesaid Net Revenues on a parity with the Bonds.
THE ISSUER also has reserved the right, subject to the restrictions stated in the Bond
Resolution, to amend the Bond Resolution with the approval of the owners of two-thirds of the
aggregate principal amount of all outstanding parity bonds which are secured by and payable
from a first lien on and pledge of the aforesaid Net Revenues.
THE REGISTERED OWNERS of the Bonds shall never have the right to demand
payment of the principal thereof or interest thereon from any source whatsoever other than
specified in the Bond Resolution.
IT IS FURTHER OUR OPINION, except as discussed below, that the interest on the
Bonds is excludable from the gross income of the owners thereof for federal income tax purposes
under the statutes, regulations, published rulings and court decisions existing on the date of this
opinion. We are further of the opinion that the Bonds are not "specified private activity bonds"
and that, accordingly, interest on the Bonds will not be included as an individual or corporate
alternative minimum tax preference item under Section 57(a)(5) of the Internal Revenue Code of
1986 (the "Code"). In expressing the aforementioned opinions, we have relied on the report of
Grant Thornton LLP, and assume compliance by the Issuer with, certain covenants regarding the
use and investment of the proceeds of the Bonds and the use of the property financed therewith.
We call your attention to the fact that if such representations are determined to be inaccurate or
upon failure by the Issuer to comply with such covenants, interest on the Bonds may become
includable in gross income retroactively to the date of issuance of the Bonds.
EXCEPT AS STATED ABOVE, we express no opinion as to any other federal, state or
local tax consequences of acquiring, carrying, owning or disposing of the Bonds.
WE CALL YOUR ATTENTION TO THE FACT that the interest on tax-exempt obliga-
tions, such as the Bonds is included in a corporation's alternative minimum taxable income for
purposes of determining the alternative minimum tax imposed on corporations by Section 55 of
the Code.
WE EXPRESS NO OPINION as to any insurance policies issued with respect to the
payments due for the principal of and interest on the Bonds, nor as to any such insurance policies
issued in the future.
OUR SOLE ENGAGEMENT in connection with the issuance of the Bonds is as Bond
Counsel for the Issuer, and, in that capacity, we have been engaged by the Issuer for the sole
purpose of rendering an opinion with respect to the legality and validity of the Bonds under the
Constitution and laws of the State of Texas, and with respect to the exclusion from gross income
of the interest on the Bonds for federal income tax purposes, and for no other reason or purpose.
D-2
The foregoing opinions represent our legal judgment based upon a review of existing legal
authorities that we deem relevant to render such opinions and are not a guarantee of a result. We
have not been requested to investigate or verify, and have not investigated or verified, any
records, data, or other material relating to the financial condition or capabilities of the Issuer or
the Cities, or the adequacy of the pledged Net Revenues to be derived from the Contracts, and
have not assumed any responsibility with respect thereto. We express no opinion and make no
comment with respect to the marketability of the Bonds and have relied solely on certificates
executed by officials of the Issuer as to the current outstanding indebtedness of, and sufficiency
of the Net Revenues. Our role in connection with the Issuer's offering document prepared for
use in connection with the sale of the Bonds has been limited as described therein.
OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change.
Such opinions are further based on our knowledge of facts as of the date hereof. We assume
no duty to update or supplement our opinions to reflect any facts or circumstances that may
thereafter come to our attention or to reflect any changes in any law that may thereafter occur
or become effective. Moreover, our opinions are not a guarantee of a result and are not
binding on the Internal Revenue Service (the "Service"). Rather, such opinions represent our
legal judgment based upon our review of existing law and in reliance upon the representations
and covenants referenced above that we deem relevant to such opinions. The Service has an
ongoing audit program to determine compliance with rules that relate to whether interest on
state or local obligations is includable in gross income for federal income tax purposes. No
assurance can be given whether or not the Service will commence an audit of the Bonds. If an
audit is commenced, in accordance with its current published procedures the Service is likely
to treat the Issuer as the taxpayer. We observe that the Issuer has covenanted not to take any
action, or omit to take any action within its control, that if taken or omitted, respectively, may
result in the treatment of interest on the Bonds as includable in gross income for federal
income tax purposes.
Respectfully,
D-3
Y..
I
APPENDIX E
ENGINEERING REPORT
1
Trim itiirerAuthoritlf
Tarrant Country Water Supply Project
Master Plan of 2005
Executive Summary
OF
coy
(:,d, 3
OOOOMI W.�DM+NlOOM4+i.MO
R BERT G. McCOLLUM
aOSNOw1s�.w.MN.wOw�4..•J
� '�S .res=`dI
INDEPENDENT ENVIRONMENTAL144314.4
'� "�4sp ,�, Sik
i..,•ty1
NGINEERS,SCIENTISTS % %�i�j:Si�53
AND CONSULTANTS �s'��
JULY2005
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-1
1.0 Introduction
The Tarrant County Water Supply Project (TCWSP) system, consisting of the Water Treatment
Plant(WTP) and delivery system, is expected to grow in response to increasing customer water
demands. Tne TCWSP WTP has expanded in multiple phases beginning at 6 MGD in 1973 to
its present capacity of 72 MGD in 2000. Based on the Malcolm Pimie report"Pilot Scale Study
and Preliminary Engineering Report" (PER) dated March 2002, the TCWSP WTP requires
three-15 MGD expansion phases to meet the projected ultimate build-out capacity of 117 MGD.
In addition to the expansion of the treatment capacity of the WTP, the "TCWSP Water Delivery
System Assessment (WDSA) Technical Memorandum" dated January 2004 evaluated the
capacity, reliability, and performance of the conveyance pump stations, storage, and
transmission piping (raw and treated water) to meet the Customer Cities projected water
demands and pressure requirements up to ultimate build-out.The ability of the TCWSP delivery
system to reliably operate through to the ultimate development of the system is critical to
meeting the TCWSP production objectives.
The purpose of the Master Plan is to present a comprehensive planning report of the TCWSP
water treatment and delivery system improvements based on the results and recommendations
of the PER; the WDSA; and the WTP Expansion to 87 MGD—Technical Design Memorandum
dated February 2004. In addition,this Master Plan discusses the following key topics:
• Updates to the water delivery system modifications as a result of on-going water delivery
•
system improvements work.
• Updates to the recommended schedule and cost of delivery system improvements.
• Summary of the delivery system improvements for the City of Grapevine based on
Freese and Nichols, Inc. (F&N) Study dated December 2002 and the Advisory
Committee meeting held on July 20, 2005.
• Findings and recommendations resulting from the Malcolm Pimie Chloramine
Disinfection Residual Evaluation Study dated July 2005 for the City of Grapevine.
• Decision by customer city representatives during the July 20, 2005 TCWSP Customer
City Advisory Meeting to implement new ground storage tank and pump station for the
City of Grapevine.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-2
1.1 Project Objectives
The major objectives of the Master Plan report were to:
• Select and provide a delivery system hydraulic model to the Authority that will be a
hydraulic and operational tool for decision-making processes by plant personnel.
• Develop a physical hydraulic model based on collected data of the existing delivery
system including pumps, storage tanks, transmission pipelines and valves. I'
• Produce a calibrated model of the delivery system based on SCADA and field
measured data. 1
• Review, analyze, and evaluate the existing capacity, performance, and operating r
characteristics of delivery system facilities using the calibrated model based on I::'
hydraulic requirements of planned expansion.
• Identify delivery system limitations of the treated and raw water conveyance P.
facilities based on projected water demands and customer pressure requirements [
• Present improvement alternatives for the water delivery system based on qualitative ',-
and quantitative analysis. k<
• incorporate updated findings and recommendations of the TCWSP and City of ti
Grapevine delivery system improvements.
• Incorporate the Grapevine system improvements measures that were discussed at
the July 20, 2005 TCWSP Customer City Advisory Meeting €
• Prepare a Capital Improvements Program that delineates the estimated cost and
implementation schedule to meet system performance requirements.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNiE,INC.
EXECUTIVE SUMMARY E-3
2.0 Description of Existing Delivery System
The TCWSP raw water delivery system consists of the following facilities:
❑ Two raw water intake conduits
❑ Intake structure/wet well
o Raw water lake pump station (consisting of 6 pumps)
o 9 miles of parallel transmission pipelines to the WTP
o In-line raw water booster pumping station (consisting of 3 pumps)
The TCWSP potable water delivery system as shown in Figure 2-1 consists of the following
facilities.
o 12 miles of treated water pipelines
o 27 MG of ground storage
o 1 high service and 2 transfer pumping stations at WTP
o 1 delivery pump station at Murphy Drive
o 3 in-line booster pumping stations
o 11 flow metering stations
Detailed characteristics of each facility are presented in Chapter 2 of theMaster Plan.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-4
•
CA) ____ _ . _____
i I
r 't _ — I L J : *
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71
_._4 7' ` i i i 1.
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- I l_.. J 1 j�i i " i - -•i PI�ELUIE
20
' �•I ( I �� !I ''r MINI SERVICER L Tii_i, _ '.,, p�t
., - I i }..I-..I ! 5 PUMP STATION -1.i_PUNp�IIrSTATI I _.__�,_=__.�� `
�, '^'- —L _- I ^ TCSISP �i.�.--
.•. ; — I - I
MTI
Figure 2-1: Existing TCWSP Delivery System
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-5
3.0 Amended Population and Water Demand Projections
The population and water demand projections contained in the PER were re-evaluated using
updated information furnished by the customer cities. As shown in Figure 3-1 below, the water
demand projections using the simultaneous peak day and average of the top quarter of peak
day data yielded virtually identical projections as the PER. Due to this finding, the hydraulic
model and delivery system assessment were based on the original projections contained in the
PER.
Figure 3-1: Population and Water Demand Projections
I
130.00 ,
Matches Simultaneous Expand plant by:
Peak Day from 2002 l
Master Flan • 87 MGD: Now
_ • 102 MGD:2007"
• 117 MGD:2017
' ,� �
110.00 ---� -----;._�..__ _
s\\. ,. .
Expansion Timeline a • • "'"
Matches Probable Peak
100.00 c Day from 2002 Master
O Flan
-a i
COao.o0 — _! 3-- -_._.— _
o
°'• 80.00 I —� -
S4
s
m
_'�----'--___----
-Peak Max Day
50.00 - :-- Average Max Day
•
®Avg of Top Qtr
50.00 I.
— - 2002 Master Plan
40.00 I
1995 2000 2005 2010 2015 2020 2025
Year
*The 102 MGD WTP Expansion has been moved to 2008 by TRA although 2007 is presently in the projections.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-6
14
4.0 Development of Delivery System Hydraulic Model
WaterCAD® by Haestad Methods, Inc. was selected among four other hydraulic software
candidate programs for conducting the computer simulations of existing water delivery
infrastructure capabilities and proposed improvements. The physical model of the delivery
system was developed using model links to represent the major transmission pipeline segments
and model nodes to represent tanks,junctions, pumps, and valves. A schematic of the existing
delivery system model from the pump stations at the TCWSP WTP to the metering stations for
each customer city is found in Section 4 of the Master Plan report.
5.0 Delivery System Field Investigations and Model Calibration
The purpose of the model calibration was to achieve proper characterization of the operating
conditions of the delivery system components included in the physical model. The model
calibration procedure involved collecting system operations data from field calibration exercises
to verify the simulation of actual system operation in the hydraulic model. The data collection
process involved simultaneous collection of storage tank levels, static pressures, pump and
valve operation status, flow rates, and pipeline and pump stress flow testing. SCADA data was
augmented with temporary pressure gages to track system operations. Ten portable pressure
data loggers were installed at selected locations throughout the delivery system. The model
calibration results show that at most pressure reading points the modeled results and field data
are within the 1%accuracy specified for the pressure data loggers.
6.0 Evaluation of Existing Delivery System
6.1 Potable Water System
As a first step after calibration,the model was used to evaluate the capabilities and limitations of
the existing facilities for meeting the three different demand conditions that correspond to the
planned WTP expansions of 87, 102, and 117 MGD. Table 6-1 and Table 6-2 illustrate the
performance criteria and system hydraulic requirements that were used as the basis to assess
the capability and limitations of the delivery system under the three water demand conditions.
Table 6-1: Evaluation Criteria to Identify System Limitation
Component Demand Condition Criteria
Pipelines Peak Day 8 ft/s max velocity
Pump Stations Peak Day Peak Day firm capacity 2
Clearwell/Storage Peak Day 6 hours detention time
1. Limits for protecting pipe lining,reducing surge potential and energy consumption.
2. Pumping capacity to customers is designed to meet peak day flows and pressure requirements.
3. Minimum suggested volume for operating flexibility and occasional peaking. Fire flow and reserve storage is usually
through the customer system.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-7
Table 6-2: Delivery Point Hydraulic Grade Requirements
Customer System High Water Hydraulic Grade
City Delivery Point Level(ft amsl) Required(ft amsi)t
Bedford
Bedford North 755
I
775
Bedford South 755 775
Coileyville
Colleyville East 790 827
Coileyville High Plane(Future) - 752
Colleyville South 790 810
Colleyville West 790 813
° Euless
IEuless North 760 780
Euless South 760 780
Euless South Pipeline 760 780
Grapevine
I Grapevine East 770 810'
I Grapevine West 770 8104
i North Richland Hills
North Richland Hills 830 I 844
f
1. Pressure gradient necessary to deliver water to customer tanks.
2. HGL for future Coffeyville West is based on discussions with GSW W,Inc.on May 13,2005.
3. HGL for Grapevine is based on the highest of the 3 possible TRA delivery HGLs analyzed for Grapevine delivery system ,
improvements in the F&N December 2002 Study.
Figures 6-1 through 6-3 depicts the results of the hydraulic analysis of the existing system
(assuming no infrastructure additions or improvements) that coincides with the three plant
expansion flows of 87, 102 and 117 MGD. Using the criteria indicated in Table 6-1,the analysis
was used to identify those pipelines and pump stations that require improvement, replacement
or paralleling to meet pressure and flows for the expansions.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-8
Figure 6-1: 87 MGD Peak Day Model Results
, A •
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t,Nsan,fres is.:1
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nw+aAu,snNrre non .MnSsa/-moan er.es5 TRINITII RIVER AUTHORITY
SS ANam• NZ•2 OIS'TRIBUTIONSYSTE2IASSESSMENT FIGURE 6-1
*boom;
..e .. 87 MGD PEAK DAY MODEL RESULTS
NE-12
A/a 12
NOVEMBER 0001
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-9
Figure 6-2: 102 MGD Peak Day Model Results
1 maze am,(14.4 111001-1
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nO IT NOLs Tai n
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DISTRIBUTION SYSTEM ASSESSMENT FIGURE 6-2
S cm+uo N2�e
NM1"•"1111 /x•112 102-MGD PEAK DAY MODEL RESULTS
AI>12 NOVEMBER 2003
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-10
Figure 6-3: 117 MGD Peak Day Model Results
1 nJt0 awls1,.MOI - - —
01•41,-.a PT 0.100 ani/t,)Neel
w#1i or
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$"01010 .f0.2 DISTRIBUTION SYSTEM ASSESSMENT FIGURE 6-3
S Minae Al 2.
U now manors
/VS-12 117-MGD PEAK DAY MODEL RESULTS
Al>12 NOYEYOER 2003
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-11
•
Table 6-3 below summarizes those potable water pipelines that will require replacement or
paralleling between the TCWSP WTP and the customer city delivery points and the time period
when the enhancement will need to be on line.
Table 6-3:Transmission Pipeline Velocity Assessment
Service Length Size FlowVelocity Flow
Pipeline Area (ft) (in.) (gpm) I (ft/s) Period
• WTP Transfer Service Main Transfer I 21,700 48 50,642 9.0 87 MGD
Transfer BST Interconnect to
Transfer Service Main Transfer 700 48 49,165 8.7 87 MGD
Murphy Dr BST Main to
Cheek-Sparger Low Plane 1,600 30 17,787 8.1 87 MGD
Bedford North Delivery Main Low Plane 40 20 10,964 11.2 87 MGD
Colleyville West Delivery Main Low Plane 110 14 4,703 9.8 87 MGD
Euless North Delivery Main High Plane 40 14 4,567 9.5 87 MGD
North Richland Hills Delivery
Main Low Plane 20 14 9,034 18.8 87 MGD -
Filter/Ops Bldg BST
Interconnect to Transfer
Service Main Transfer 800 20 9,426 9.6 87 MGD
Colleyville East Delivery Main Low Plane 190 16 5,091 8.1 102 MGD
West Transmission Main —
North Richland Hills Leg Low Plane 1,400 24 11,064 7.9 102 MGD
Grapevine West Delivery Main High Plane 100 24 11,826 8.4 117 MGD
Grapevine East Delivery Main High Plane 230 20 8,431 8.6 117 MGD
East Transmission Main High Plane 9,800 27 14,264 8.0 117 MGD
Central Transmission Main High Plane 9,200 30 17,611 8.0 117 MGD
West Transmission Main —
Cheek-Sparger to Colleyville
South Low Plane 2,100 36 24,528 7.7 117 MGD
Table 6-4 presents the results of the pump station evaluation based on the ability of the existing
pumps to supply projected demands at the hydraulic grade required at the customer delivery
points.
Table 6-4: Pump Station Capacity Assessment
Pump Station Flow Condition when
Capacity Exceeded
WTP Transfer Service PS 87 MGD
WTP High Service PS 87 MGD
Colleyville West In-line BPS 87 MGD
Colleyville East In-line BPS 87 MGD
North Richland Hills In-line BPS 87 MGD
Murphy Drive Low Plane PS 87 MGD
Murphy Drive High Plane PS 102 MGD
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-12
6,2 Raw Water System
Table 6-5 shows the results of the raw water pipeline evaluation. The evaluation identifies the
pipeline segments that require upsizing to deliver planned expansion flows at an acceptable
system pressure and velocity (Table 6-1).
Table 6-5: Raw Water Pipeline Velocity Assessment
Pipeline Segment Length(ft) Size(in.) Velocity(ft/s) Flow Period
A 400 42 9.5 102 MGD
B 4,257 60 8.0 102 MGD
C 33,227 54 8.1 102 MGD
D 400 48 10.2 102 MGD
E 5,123 54 8.1 102 MGD i
F 4,697 48 10.2 102 MGD 3
Table 6-6 presents the results of the pump station evaluation based on the ability of the existing
pumps to supply projected demands at the hydraulic grade required at the customer delivery
points.
Table 6-6: Pump Station Capacity Assessment
Pump Station Flow Condition when
Capacity Exceeded
Raw Water Pump Station(included in current plant design) 87 MGD
In-Line Booster Pump Station 102 MGD1
1. A 41h booster pump,which matches the capacity of the existing pumps,is required to serve as standby unit at 102 MGO
expansion.
7.0 Development of Alternative System Improvements
Capacity and hydraulic evaluation of the existing delivery system shows that significant
improvements are required to meet the performance criteria and hydraulic requirements through
system build-out. It is important to note that the hydraulic analysis, confirmed by discussions
with system staff, indicate that the existing system is essentially at its capability and was not
intended to provide more than 72 MGD capacity to the customers.
The improvements alternatives that were evaluated for the TCWSP delivery system
improvements are as follows:
• Alternative 1 — Continue to utilize two-zone pumping from Murphy Drive PS with in-line
boosters at delivery points to increase pressure to customer city requirements. This
approach is presently utilized within the TCWSP delivery system.
• Alternative 2— Install ground storage reservoirs at select customer delivery points and
install associated pump station to deliver water at the requisite pressure and quantity.
The Murphy high plane pressure would be lowered to deliver to the tanks as opposed to
delivering at distribution pressures.
• Alternative 3— Permanently combine the two Murphy Pump Station pressure planes into
one plane. The remainder would be similar to Alternative 1.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE.INC.
EXECUTIVE SUMMARY E-13
• Alternative 4— Similar to Alternative 1 except that the delivery pressure is increased at
the Murphy Drive PS to eliminate the number of new in-line booster pump stations.
7.1 Model Results for Proposed Alternatives
Figures 7-1 through 7-4 indicates the improvements for the respective alternative and the
timeframe when the improvement would need to be placed into service.
7.2 Qualitative and Quantitative Analysis
Opinions of capital, operations and maintenance and present worth costs were developed for
each proposed alternative, as shown in Table 7.1. The selection of the recommended
alternative for the TCWSP delivery system is based on economic and non-economic factors
including system reliability, system flexibility, operational control, and ease of implementation.
Table 7-2 shows the ratings for each proposed alternative. Alternative No. 4 received the
highest weighted score with respect to the five quantitative and qualitative categories and No. 3
was a close second.
Table 7-1: Economical Analysis of Proposed Improvement Alternatives
Cost
Annual O&M
Present Worth Present Worth
Alternative No. Capital Annual Costs Total Costs
1 $51,076,320 $150,331 $1,921,731 $52,998,051
2 $65,705,920 $250,427 $3,201,294 $68,907,214
3 $47,962,320 $125,982 $1,610,467 $49,572,787
4 $46,691,520 $106,483 $1,361,207 $48,052,727
Table 7-2: Overall Comparison of Alternatives
System System Operational Ease of
Casts Reliability Flexibility Control Implementation
Alternative (40%) (20%) (20%) (�0%) (�opo} Total
1 3 1.2 2 0.4 4 0.8 3 0.3 4 0.4 3.1
2 2 0.8 4 0.8 3 0.6 5 0.5 2 0.2 2.9
3 3.5 1.4 2 0.4 4 0.8 3 0.3 4 0.4 3.3
4 4 1.6 2 0.4 4 0.8 3 0.3 5 0.5 3.6
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-14
Figure 7-1: Alternative No.1 117 MGD Peak Day Model Results
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TM FIGURE 7-1
u Ivo,'YMA' l i ALTERNATIVE NO.1 117-MGD PEAK DAY MODEL RESULTS
wl
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REVERSER 2000
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE.INC.
EXECUTIVE SUMMARY E-15
Figure 7-2: Alternative No.2117 MGD Peak Day Model Results
A
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NP(2 1WYEtJBER 2130¢
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-16
Figure 7-3: Alternative No.3 117 MGD Peak Day Model Results
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NOYEJBER 2003
TCWSP MASTER PLAN OF 2005 MAL COLM PIRNIE,INC.
.)
EXECUTIVE SUMMARY E-17
Figure 7-4: Alternative No.4 117 MGD Peak Day Model Results
A
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Mw.""'"' /V[•I2 ALTERNATIVE NO.4 117-MGD PEAK DAY MODEL RESULTS
Tu AmRAYLr CRAVE Als 12
NOYENSEX 2003
3.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-18
7.3 2005 Updates to the Water Delivery System Modifications
The previous sections presented a comparative analysis of the delivery system improvement
alternatives for the TCWSP system. The results of the analysis showed that Alternative No. 4
was the recommended overall strategy for meeting the ultimate demand of the Customer Cities.
This section describes the updates to the water delivery system modifications under this
strategy based on additional detailed design information and contract packaging as a result of
on-going TCWSP system improvement work. Figure 7-4A shows the update to the results of
the hydraulic evaluation for the build-out condition for Alternative No.4.
The key updates presented in Figure 7-4A are as follows:
• North Richland Hills — new line item "Construct new in-line booster station" under 87-
MGD.
• Murphy Dr Pump Station — replace description under 87-MGD with "Replace existing
vertical turbine pumps and upgrade PS suction piping". Replace description under 102-
MGD with"Add new pumps at pump station for capacity upgrade".
• High Service Area — Replace description under 87-MGD with "replace four centrifugal
pumps".
• Transfer Service Pump Station — Delete "parallel existing 20" pipeline from
filter/operations bldg"under 87-MGD description
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-19
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al ......0"a x3.;2 UPDATED 117-MGD PEAK DAY MODEL RESULTS FOR ALTERNATIVE NO.4
N..a[AuasorAaa N>12 July 2005
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-2O
7.4 Evaluation of Grapevine System Improvements
The 2004 WDSA showed that the Murphy Drive Pump Station would be upgraded to supply water
at sufficient pressures to meet the City of Grapevine peak demands. This strategy was based on
the supply of Grapevine's water at the two current TRA wholesale delivery points. The following
factors have necessitated an alternative approach for delivery of water to Grapevine's distribution
system.
• Expansion of the TCWSP service area within Grapevine—extension of the service area
farther northwest requires the TRA delivery system to meet two pressure planes in
Grapevine distribution system.
• The TCWSP delivery system pipeline between the Murphy Drive Pump Station and
Grapevine delivery points is limited in its ability to operate at the higher pressure
gradients.
• Delivery of the ultimate peak demand of 29 MGD into the Grapevine's system at the
higher pressures will adversely affect the distribution pipelines in the low pressure zones
of the City (south and southwest portions of the City).
A summary of the system characteristics, capital and O&M costs associated with the high plane
delivery system improvement alternatives that are necessary to meet Grapevine's current and
future demands is shown in Table 7-3.
Table 7-3: City of Grapevine System Improvement Alternatives
Costs
Alternative Description Capital Annual O&M
($mil) ($1,000)
G-1 In-line Boosters for Grapevine East/West 11.1 110
G-1A Pump Station(no tank) in Grapevine System 9.7 120
G-1B Pump Station and 3 MG Tank in Grapevine System 12 149
G-4 Murphy Drive PS High Plane Upgrade(no boosters) 6.7 66
G-4A Murphy Drive PS High Plane Upgrade and Pump 10.5 128
Station (no tank) in Grapevine System
G-4B Murphy Drive PS High Plane Upgrade and Pump 12.8 157
f
Station &3 MG Tank in Grapevine System
An assessment of Grapevine system improvements and economic analysis revealed the
following:
• From a high plane system improvement cost standpoint, Alternative G-4 (original
Alternative No. 4) is still the most cost-effective.
• Because of the pressure plane characteristics of the Grapevine distribution system, it
appears that Alternative G-4B would be most effective in meeting their specific
requirements. The interior pump station would enable the TRA delivery system to
operate at slightly lower pressure gradients and the addition of an interior ground
storage tank would improve flexibility to TRA and Grapevine
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-21
8.0 Summary of Findings and Recommendations
The significant findings from the 2005 Master Plan report are summarized below.
Storage Facilities
• The total storage capacity of 27 MG presently available in the TCWSP system is
sufficient for the ultimate build-out condition. Customers would need to provide
system storage to meet their specific distribution system requirements for peak hour,
fire and reserve flows. :f
• TCWSP pumps are operated to replenish customer city tanks. No storage capacity 1;
is available at customer city delivery points to balance the individual customer needs lt4
with the overall system requirements
Pumps
• The existing pumps No.1, No.2, and No.5 at the Raw Water Pump Station at Lake
Arlington will need replacement to improve efficiency/performance for the 87 MGD
plant.
• The High Service Pump Station at WTP requires immediate improvements to meet :Yt
pressure requirements at the South Bedford and Euless delivery points.
• The Transfer Pump Station at the WTP requires an additional pump for each planned
plant expansion.
• Capacity of the Murphy Drive Pump Station needs to be expanded for the 102 MGD
and 117 MGD plant expansions. Suction piping requires immediate modifications to
improve hydraulic constrictions.
• The Colleyville West and East Booster Stations require modifications and expansion
to meet the system pressure and demands associated with the 87 MGD system,
•
• The Murphy Drive Pump Station should be replaced at the same time the facility
needs to be expanded in order(1) to utilize the full volume of the ground tanks, (2) to
minimize pump cavitation, and (3) to comply with current Hydraulic Institute
Standards.
• The Euless North delivery location requires additional pressure and flow to meet .
system requirements for the 102 MGD system.
...,,. .,..... . ., • _, ;.. :.:'-Q,,.w '-ax..... :r_.,.. -.ie: d:'-- L.1:.:,.. ..:- : r -, .�... .A..>.. .,_ ... ,,.r-r.-,ti«. ,.,. .,..'.ice ..-_..
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-22
Pipelines
• The existing raw water transmission pipeline will reach capacity at the 87MGD stage
and exceed velocity limits of 8 feet per second in several sections. Thus, it will need
to be paralleled to obtain additional capacity for the 102 MGD expansion.
• Several treated water transmission pipelines will reach their capacity limits and
require upgrading to deliver project flows at adequate system pressure to each
customer delivery point.
.37
Water Treatment Plant
The facility modifications needed for future expansions of the water treatment plant is summarized
in Table 8-1 below:
Table 8-1: Facility Modifications for Water Treatment Plant Expansions
J
Process Expansion Capacity(MGD)
87 102 Intermediate 117 ,
Raw Water Intake and Pumps ✓ ✓ ✓
Raw Water Booster Pump Station ✓ ✓
Plant Raw Water Metering ✓
Raw Water Piping at Plant ✓
Rapid Mix(with Piping) ✓ I ✓ ✓
Floc/Sed Basins(with Piping) ✓ ✓ ✓ 1
Ozone System ✓ ✓ V
Settled Water Metering ✓
Settled Water Piping ✓ ✓ ✓
Fillers ✓ ✓
Filtered Water Piping ✓
Filtered Water Metering ✓
Nashwater Basin ✓
Ultraviolet(UV)System ✓ ✓
Downstream Chemical Metering ✓
Finished Water Pumping ✓ I ✓
Sludge Balancing Basin ✓
Chemical Storage and Feed ✓ ✓ ✓
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-23
City of Grapevine
The recommended improvements to the City of Grapevine's distribution system are to be
constructed in two phases. The improvements under Phase I consist of the following:
• 16 MGD Pump Station - a pump station within the Grapevine distribution system would
more effectively deliver water throughout the service area as opposed to higher pressure
at the two TRA delivery points.
• 2 MG storage Tank- construction of a storage tank in conjunction with the pump station
will allow the TRA delivery system to operate at slightly lower pressure and be subjected
to less flow variations.
Phase II includes the following improvements:
• 4 MGD additional pumping capacity.
• Additional 2 MG ground storage tank in the 2010 time period.
The project cost of these improvements will be funded on a 50% cost share between TCWSP
and the City of Grapevine. Grapevine will be solely responsible for operation and maintenance
cost of the proposed facilities. This concept was approved at the July 20, 2005 TCWSP
Customer City Advisory meeting.
TCWSP Water Treatment and Delivery System Recommendations
Table 8-2 in the following page presents the long range Capital Improvements Program which
summarizes the recommendations, timing, and cost for facility improvements and modifications
to the TCWSP water treatment plant and delivery system over the next 15 year period and
includes the selection of Alternative No. 4 (with Grapevine modifications) in the overall strategy.
Table 8-3 summarizes the funding needs to be obtained by the Series 2005 Bonds.
TCWSP MASTER PLAN OF 2005 MALCOLM PIRNIE,INC.
EXECUTIVE SUMMARY E-24
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APPENDIX F
FORM OF SPECIMEN BOND INSURANCE
FINANCIAL GUARANTY INSURANCE POLICY
MBIA Insurance Corporation
Armonk,New York 10504
Policy No.[NUMBER]
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of the premium and subject to the terms of this policy, hereby
unconditionally and irrevocably guarantees to any owner,as hereinafter defined,of the following described obligations,the full and complete payment
required to be made by or on behalf of the Issuer to[PAYING AGENT/TRUSTEE]or its successor(the"Paying Agent")of an amount equal to(i)the
principal of(either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on,the
Obligations(as that term is defined below)as such payments shall become due but shall not be so paid(except that in the event of any acceleration of
the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise,other than any
advancement of maturity pursuant to a mandatory sinking fund payment,the payments guaranteed hereby shall be made in such amounts and at such
times as such payments of principal would have been due had there not been any such acceleration,unless the Insurer elects in its sole discretion,to pay
in whole or in part any principal due by reason of such acceleration); and(ii)the reimbursement of any such payment which is subsequently recovered
from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner
within the meaning of any applicable bankruptcy law. The amounts referred to in clauses(i)and(ii)of the preceding sentence shall be referred to herein
collectively as the"Insured Amounts." "Obligations"shall mean:
[PAR]
[LEGAL NAME OF ISSUE] •
Upon receipt of telephonic or telegraphic notice,such notice subsequently confirmed in writing by registered or certified mail,or upon receipt of written
notice by registered or certified mail,by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which
is then due,that such required payment has not been made,the Insurer on the due date of such payment or within one business day after receipt of notice
of such nonpayment,whichever is later,will make a deposit of funds,in an account with U.S.Bank Trust National Association,in New York,New
York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such
Obligations or presentment of such other proof of ownership of the Obligations,together with any appropriate instruments of assignment to evidence
the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer,and appropriate instruments to effect the appointment of the
Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations,such instruments
being in a form satisfactory to U.S.Bank Trust National Association,U.S.Bank Trust National Association shall disburse to such owners,or the Paying
Agent payment of the Insured Amounts due on such Obligations,less any amount held by the Paying Agent for the payment of such Insured Amounts
and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to
any Obligation.
As used herein,the term"owner"shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent,the
Issuer,or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer
constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street,Armonk,New York 10504 and such service
of process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of
the Obligations.
IN WITNESS WHEREOF,the Insurer has caused this policy to be executed in facsimile on its behalf by its duly authorized officers,this[DAY]day of
[MONTH,YEAR].
MBIA Insurance Corporation. \I.
I
041 uov
•
Pre en r
Attest:
Assistant Secretary
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION: In the event the Insurer is unable to fulfill its contractual
obligation under this policy or contract or application or certificate or evidence of coverage, the policyholder or certificateholder is
not protected by an insurance guaranty fund or other solvency protection arrangement.
S I'D-TX-7
01/05