HomeMy WebLinkAboutRES 85-067 R E S O L U T I O N
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the Official Statement dated February 26, 1985, for issuance of
$12 Million in Water System and Sanitary Landfill Certificates of
Obligation, Series 1985, the Official Statement dated February 26,
1985, for the issuance of $20 Million in Street and Drainage
Improvement Bonds, Series 1985, and the Official Notice of sale for
both the $20 Million in Street and Drainage Improvement Bonds,
Series 1985, and $12 Million in Water System and Sanitary Landfill
Certificates of Obligation, Series 1985, in the form attached hereto
as Exhibits A, B and C, respectively , be, and the same are hereby,
approved for distribution on behalf of the City of Beaumont.
PASSED BY THE CITY COUNCIL of the City of Beaumont this
the d,�,z./�//�7j day of 1985.
all,
- Mayor -
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4 /•ter 2
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PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 26, 1985
a7
L
-° This Preliminary Official Statement is subject to completion and amendment and is
a intended solely for the solicitation of initial bids to purchase the Certificates.
Upon the sale of the Certificates, the Official Statement will be completed
3 and delivered to the Purchaser.
THE ISSUANCE OF THE CERTIFICATES IS SUBJECT TO THE OPINION OF BOND COUNSEL TO THE EFFECT
° THAT INTEREST ON THE CERTIFICATES IS EXEMPT FROM ALL PRESENT FEDERAL INCOME TAXATION
UNDER EXISTING STATUTES, REGULATIONS, PUBLISHED RULINGS AND COURT DECISIONS.
$12,000,000
3
a, THE CITY OF BEAUMONT
b
L (A home rule city of the State of Texas located within Jefferson County)
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WATER SYSTEM AND SANITARY LANDFILL CERTIFICATES OF OBLIGATION
SERIES 1985
y
2 Dated: March 1, 1985
In Principal and interest payable at the principal corporate trust office of the
L Texas, the paying agent/registrar (the "Registrar"
y Interest payable September 1, 1985, and each March 1 and September 1 thereafter until the
o earlier of payment or redemption. The Certificates are issued in fully registered form in
integral multiples of $5,000. Interest on the Certificates will be payable by check or
draft, dated as of the interest payment date, and mailed by the Registrar to registered
owners as shown on the records of the Re istrar on the 15th calendar date of the month
next preceding each interest payment date the "Record Date").
- o
a u MATURITY SCHEDULE
E:;, (Due September
Initial Initial
' Interest Reoffering Interest Reoffering
Amount Maturity Rate Yield (a) Amount Maturity Rate Yield a
s �
N
$250,000 1986 % % $740,000 1995 % %
° 275,000 1987 800,000 1996
300,000 1988 875,000 1997
325,000 1989 975,000 1998
350,000 1990 1,050,000 1999 (b)
.a 400,000 1991 1,160,000 2000 (b)
y ° 550,000 1992 1,270,000 2001 (b)
610,000 1993 1,400,000 2002 (b)
L a 670,000 1994
17 d
L ) The initial yields will be established by and are the sole responsibility of the
Purchaser, and may subsequently be changed.
(b) Certificates maturing September 1, 1999, through September 1, 2002, both inclusive,
are subject to redemption, at the option of the City, at the par value thereof plus
° o accrued interest, in whole or in part, on September 1, 1998, or on any interest
payment date thereafter. If less than all of the Certificates are redeemed within a
stated maturity at any time, the Certificates to be redeemed shall be selected by the
City in multiples of $5,000 within any maturity.
The above certificates (the "Certificates") constitute all of the certificates of
obligation authorized by the City Council on March 12, 1985. The Certificates, when
o issued, will constitute valid and binding obligations of The City of Beaumont (the "City")
o and will be payable from the proceeds of an annual ad valorem tax, levied within the
limits prescribed by law, against taxable property within the City and further payable
L from a junior and subordinate pledge of the net revenues of the City's water system.
PAYMENT RECORD: The City has never defaulted.
L p1
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= L- BOND COUNSEL: Vinson & Elkins, Houston, Texas.
DELIVERY: When issued - anticipated on or about April 15, 1985.
Exhibit "A"
TABLE OF CONTENTS
Pave
USE OF INFORMATION IN OFFICIAL STATEMENT. . . . .. . ..... . . . . . . 3
SALE AND DISTRIBUTION OF THE CERTIFICATES.. ... .......... ... .. .... .. .. . ... . . . 3
Sale of the Certificates. . . . .. 3
Marketability. . . . . . .. . .. .. ... . . . ... .. . .. . . . . .. . . . 3
Securities Laws..... . ........ . . ...... . . . . ..... . ... . . ...... .............. . . . 3
Ratings. .. . .. . ...... .. ... ............... . ... ... . . ...... 3
OFFICIAL STATEMENT SUMMARY 4
THE CERTIFICATES.. . . .. .. . ... ... ..... .. . .. .... ... .. ............... .. ..... ....... 5
Description of�the�Certificates..... . .. . .. .......... .. . .... ......... ..... ..... ..
Source of Payment. . ... ... ...... . .. .... .. ... . . . . . ... . . . . . .... .... ..... ..... .. 5
Authority for Issuance. . .. ..... ..... .. . ..... . .......... . .. . ... ... . ... ........ .. 5
Use of Certificate Proceeds. ... . ....... .. .......... .. ...... .. . . . . ............. ..
Future Borrowing. ........ ... . ...... ...... . ... ................... .............. .. 6
No Arbitrage. . . ... . ... ......... ........... . . .... ... ..... . .......... 6
Legal Investments�in�Texas... . .... .. . .. . .. ............ .. . ..... . ........... . . .. 6
Remedies in the Event of Default. ..... ..... . .. ........... 7
PRO-FORMA DEBT SERVICE SCHEDULE. ... ....... . .. . . .......... . .......... ......... . . ......
DEBT STATEMENT... . ........ ... .. . .. .. .. . .................. ..... . .. . .. . . ....... . . ...... 7
General. . .... .. . . ... .... ... ...... . ........... ....... ... ..... ... . ..... ..... .. . ... 7
Bonded Indebtedness. 8
Revenue Support of Ad�Valorem�Tax�Bonds�and�Certificates�of�Obligation 8
Estimated Overlapping Debt. .. .. .. ... ........ ... ... . .. .... .... 8
Debt Ratios 8
TAX DATA. . . . .. . .. . .. .. .. . .. . . . .. ... ...... . ... ... ... ... ......... . . .. .. ...... . ... .... 9
General. ... . . .. .. .. .. . .. . .... ..... .. . ...... ........ .. ... . .. . .... . .........� 9
Authority for�Ad�Valorem Taxation. . . . .. . . .. . . . . ... .. .. . . .. ..... .... . . .. 9
Historical Analysis of Ad Valorem Taxation. .. . .. . . ... ..... 10
Estimated Overlapping Taxes. .. .. .. ...... ... ... ..... . ... ... . .. ... .... . .. ... .. . .. . 12
�
Sales Tax. . ... ..... .. .... ... ... ...... .. ... 12
Industrial District Contracts. . . . .... .. . .. . . . . .. . .. . .. ........ . .. . 12
Tax Increment Reinvestment Zone... ..... . . .... . .. . ... . 13
SELECTED FINANCIAL DATA. .. . . . . . . . . ... . . . .. . ..... .. ... . . . . ... 14
Historical Operations of�the�City's�General�Fund... 14
General Fund and Debt Service Fund Balance for the Past Five�Fiscal �Years. . . . . . . 14
Financial Statements. . ..... ... .... . ............ .. ........ 14
ADMINISTRATION OF THE CITY. . .... .. . ... . . ..... ... . .. . . . ...•. .. � 15
Mayor and City Council .. .. .... .. .. ... . .. . ...... ... ... . .. .. . . .. ............... . .. 15
Administration. . . . . ... . . . . ...... . . ... ... .. ... . . . .. . . .. ..... ...... 15
Consultants... . .. ...... . ...... .. .. .. . .. ..... . . ... ....... .. . . . .... . .. . 16
LITIGATION. . . .. ....... . ... . .... .. ....... ......... .. . ..... ... .. . . . . .....
LEGISLATION�AND�REGULATION.... . . . . .. .... . .. . ......... .. . ....... ...... .... . . . . . 16. .. 16
Affecting the City' s Operations. . . . ... . .. . .. ... . ... .. . 16
Affecting the Tax Base... ........ ........ .. ..... .. . ... .. ... .... ....... ... ... . ...
SPECIAL CONSIDERATIONS.. . .. ........ .... ... .... . ................... . . .. .. ... ....... . . . 17
Capital Improvements.......... ...... ....... .................... .. .. ... ....... . . . 17
Collective Bargaining. . ... . .. . . .. . .............. .. ........ ... ................ 18
LocalEconomic Conditions. ........ .. ... ........ ..... . ..... .......... .. ... . . ..
LEGAL MATTERS: -: .... .. .... .. . ........ . .. ..... . . . .. . .. . . . . . . . .. ............ .. ... . . ...... . .. .. . ... ... . 18
LegalOpinion. . . .... .. . . ..... .... ..... . . .. . . . ... .. .. . .... .. . .. ....... .......... 18
No-Litigation Certificate. .. . . . .. .. . .. .... .. . . . 18
�
GENERAL CONSIDERATIONS., ;. .. . ... .. ... . .. .... ...... .. ... . .. .... ...... 19
Sources and Compilation ofInformation. . . ....... .. .. ..... 19
Certification as to Official Statement......... 19
Updating of Official Statement. . .. .. . ............. .. . ..... ... .... ... :..... ..... . 19
APPENDIX A - ECONOMIC AND DEMOGRAPHIC CHARACTERISTICS
APPENDIX B - FINANCIAL STATEMENTS OF THE CITY
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USE OF INFORMATION IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized to give any informa-
tion or to make any representation 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 City.
This Official Statement is not to be used in an offer to sell or the solicitation of
an offer to buy in any state in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
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 City or other matters described herein since the date hereof.
SALE AND DISTRIBUTION OF THE CERTIFICATES
Sale of the Certificates:
After requesting competitive bids for the Certificates, the City has accepted the bid
resulting in the lowest net interest cost, which bid was tendered by a syndicate composed
of
"Purchaser" to
purchase the Certificates bearing the interest rates shown under "MATURITY SCHEDULE" at a
price of the par value thereof, plus a cash premium of $ ' plus accrued
interest to the date of delivery. The net effective interest rate on the Certificates was
% as calculated pursuant to Article 717k-2 of Vernon's Annotated Texas Civil
Statutes.
Marketability:
The City has no understanding with the Purchaser regarding the reoffering yields or
prices of the Certificates and has no control over trading of the Certificates after their
initial sale by the City. Information concerning reoffering yields or prices is the
responsibility of the Purchaser. No assurance can be given that any trading market will
be developed for the Certificates after the initial sale by the City,
Securities Laws:
No registration statement relating to the Certificates has been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended, in
reliance upon the exemptions provided thereunder. The Certificates have not been
registered or qualified under the Securities Act of Texas in reliance upon various
exemptions contained therein; nor have the Certificates been registered or qualified under
the securities acts of any jurisdiction. The City assumes no responsibility for
registration or qualification of the Certificates under the securities laws of any
jurisdiction in which the Certificates may be offered, sold or otherwise transferred.
This disclaimer of responsibility for registration or qualification for sale or other
disposition of the Certificates shall not be construed as an interpretation of any kind
with regard to the availability of any exemption from securities registration or
qualification provisions.
Ratings :
In connection with the sale of the Certificates, the City made application to Moody' s
Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P" ) for a
municipal rating, and ratings of " " and " " respectively, have been assigned to the
Certificates. An explanation of such rat—in gs may be obtained from the companies
furnishing such ratings. The ratings reflect only the views of such companies and the
City makes no representation as to the appropriateness of the ratings.
There is no assurance that such ratings will continue for any given period of time or
that they will not be revised or withdrawn entirely by either or both of such rating
companies, if in the judgment of either or both companies, circumstances so warrant. Any
such revision or withdrawal of ratings may have an adverse effect on the market price of
the Certificates.
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OFFICIAL STATEMENT SUMMARY
The following material is qualified in its entirety by the detailed information and
financial statements appearing elsewhere in this Official Statement.
- General -
The Issuer ..... .... . ... ... .. . The City of Beaumont, a home rule city of the State of
Texas located within Jefferson County.
The Certificates. ..... ... . .... $12,000,000 Water System and Sanitary Landfill Certificates
of Obligation, Series 1985, dated March 1, 1985; various
amounts due September 1, 1986 through 2002.
Payment of Interest...... . .... September 1, 1985, and each March 1 and September 1
thereafter, until the earlier of payment or redemption.
Source of Payment. ... . .. ...... Principal of and interest on the Certificates are payable
from a continuing, direct annual ad valorem tax levied with
the limits prescribed by law and further payable from a
junior and subordinate pledge of the net revenues of the
city's water system.
Other Characteristics .. ...... The Certificates are issued in fully registered form in
integral multiples of $5,000. Certificates maturing
September 1, 1999 through 2002, both inclusive, are op-
tional for redemption, at par plus accrued interest, in
whole or in part on September 1, 1998, or any interest
payment date thereafter.
Use of Proceeds. ...... . .. . .. . Proceeds from the sale of the Certificates are to be used
for improvements to the water system, waste water
collection system and sanitary landfill . The proceeds will
also be used to pay costs incurred in the issuance of the
Certificates. See "Use of Proceeds".
Bond Ratings. .. ... .. . . .. . .. . . . Moody's Investors Service, Inc. . . .. . . .. ... .. . .. . . . ... "
Standard b Poor's "
Population.... .... ... . ...... .. 1984 Estimate - 118,111.
- Financial Highlights -
(Unaudited)
1984 Certified Assessed Valuation (100% of Estimated Market Value). ... . $2,588,372,712
Direct Debt
Outstanding Debt (as of January 31, 1985). . . . .. . .. . .. . ... .. ... . . . . . $ 60,485,000
The Certificates. ... . .. . . . . . . ...... .. ... .. .. . .. . ... .. $ 12,000,000
The Bonds. . .. . .. .... .. . .. . . . . . .... . .. .... .. . ....... . .... . ... . .. $ 20 000,000 (a)
Total Direct Debt. . .. . . . . ... . .. ... . ...... ......... . . .. . . .. 92,485,000
Less: Self-Supported Debt (b). .... ... . ... .. . .. . . . .. . .... .... ... . $ 15.140,000
Direct Ad Valorem Tax Supported Debt......... ............ .. ... ... . ... .. 77,345,000
Estimated Overlapping Debt.. . . $ 29,296,541
Total Direct and Estimated Overlapping Debt ..... .. .. . .... . . . . ... . . . ... 06,641,541
Interest and Sinking Fund (as of January 31, 1985). .. . . ... . . . . ... .. .... E 3,894,088
% of 1984 Per
Debt Ratios: Assessed Valuation Capita
Direct Debt. . .... . ..
Direct and Estimated�Overlapping�Debt..... .... ..... .... 4.12% $903
Annual Requirements:
Average (Fiscal Years 1985/2002).. . .. . .. ... . ...... ... $ 9,148,401
Maximum (1986). .. . . . .. . ......... ..... ... . . . . . . . .. ... . .. ... . ........ $12,466,347
Tax Collections:
Arithmetic Average, Tax Years (1979/1984) - Current Year. ...... .. .. . .. . .. . 97.05%
- Current and Prior Years. .. . ... 98.47%
a The Cit anticipates selling $20,000,000 Street and Drainage Improvement Bonds (the
Bondsll� concurrently with the Certificates.
(b) See "Debt Statement - Revenue Support of Ad Valorem Tax Debt.
xe-J 7
A
THEE CERTIFICATES
Description of the Certificates: -
The Certificates are dated March 1, 1985, bear interest from such date at the stated
interest rates indicated under "MATURITY SCHEDULE", which interest is payable September
1, 1985, and each March 1 and September 1 thereafter until the earlier of payment or
redemption. The Certificates are issued in fully registered form in denominations of
$5,000 each or any multiple thereof. Certificates maturing September 1, 1999, through
September 1, 2002, both inclusive, are subject to redemption, at the option of the City,
at the par value thereof plus accrued interest, in whole or in part, on September 1, 1998,
or on any interest payment date thereafter. If less than all of the Certificates are
redeemed within a stated maturity at any time, the Certificates to be redeemed shall be
selected by the City in multiples of $5,000 within any maturity. Principal of and
interest on the Certificates are payable at the principal corporate trust office of the
Texas. Interest on the Certificates
will a payable by c ec or draft, dated as of the interest payment date, and mailed by
the Registrar to registered owner as shown on the records of the Registrar.
The Certificates are transferable only on the certificate register kept by the
Registrar upon surrender and reissuance. The Certificates are exchangeable for an equal
principal amount of Certificates of the same maturity in any authorized denomination upon
surrender of the Certificates to be exchanged at the principal corporate trust office of
the Registrar. The City is not required (1) to issue, transfer, or exchange any Bond
during the period beginning at the opening of business 15 days before the date of the
first mailing of a notice of redemption of Certificates and ending at the close of
business on the day of such mailing or (2) to transfer any Certificates selected for
redemption if such redemption is to occur within thirty calendar days. No service charge
will be made for any transfer, but the City may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
The record date (the "Record Date") for the interest payable on any interest payment
date means the 15th calendar day of the month next preceding such interest payment date.
The Ordinance requires that all transfers be made within three business days after
request and presentation.
The City has agreed to replace mutilated, destroyed, lost or stolen Certificates upon
surrender of the mutilated Certificates, or receipt of satisfactory evidence of such
destruction, loss or theft, and receipt by the City and the Registrar of security or
indemnity to keep them harmless. The City may require payment of taxes, governmental
charges and other expenses in connection with any such replacement.
Source of Payment:
The erg tificates, together with other outstanding debt on a parity with the
Certificates (the "Outstanding Debt"), are payable as to principal and interest solely
from and secured by the proceeds of a continuing, direct annual ad valorem tax levied,
within the limits prescribed by law, against taxable property within the City. The
Certificates are also further payable from a junior and subordinate pledge of the net
revenues of the City's water system. The City reserves the right to issue additional
obligations payable from such revenues, which obligations may be senior to, on a parity
with or junior and subordinate to the payment of such revenues pledged to the Certifi-
cates. See, also "Remedies in the Event of Default." In the Ordinance, the City
covenants that while the Certificates are outstanding, it will levy, assess and undertake
to collect such tax.
Authority for Issuance:
The Certificates are being issued pursuant to the applicable provisions of the
Constitution and laws of the State of Texas and to the provisions of an ordinance (the
"Ordinance") which was passed and adopted by the Council on March 12, 1985, and which
specifically authorizes the sale and issuance of the Certificates. Further reference to
the Ordinance is hereby made.
Under Texas law, specifically Article 2368a.1 VTCS, as amended, no election is
required as a prerequisite to the sale and issuance of certificates of obligation, unless
a petition signed by 5% of the qualified electors of the City is filed with the City
Secretary protesting the issuance of such certificates prior to the issuance.
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Use of Certificate Proceeds:
The Certificates are being issued to provide funds for improvements to the water
system, waste water collection system and sanitary landfill. The proceeds will also be
used to pay the costs of issuance of the Certificates, including the fee of the Financial
Advisor, the Bond Counsel and the Securities Counsel all of which are contingent upon the
sale of the certificates, as well as other administrative costs incurred.
Future Borrowing:
Following the issuance of the Certificates and the Bonds, there will remain
$9,000,000 of authorized but unissued bonds. Proceeds from these issues may not be
sufficient to complete all originally contemplated street and drainage improvements. It
is currently anticipated that such remaining bonds will not be issued prior to 1986;
however, the City reserves the right to issue such debt as it deems necessary. The City
also has $260,000 transit system improvement bonds authorized but unissued from a 1974
authorization. Needs for capital improvements by the City are reviewed on a regular basis
by the City Council and administration. Those projects which cannot be accomplished out
of general revenues are financed by bonds and other debt obligations authorized by the
City Council. The City's present plans for capital improvements call for the issuance,
during 1986, of approximately $6,750,000 of certificates of obligation for the purchase of
an art museum and other indebtedness payable from ad valorem taxes. The City also has
plans for expansion of its existing Riverfront Park as a part of acquisition of the art
museum. The City also has agreed to lease on a stand-by basis office and parking space in
a downtown office building and retail shopping mall project. The lease will call for
payments of $675,960 annually on a stand-by basis for a period of 10 years, and provides
the City with an option to acquire the project if rental payments are ever required to be
made by the City. The City also anticipates that expenditures will have to be made for
periodic improvements to the water and sewer system pursuant to a master plan now being
developed. See "SPECIAL CONSIDERATIONS--Capital Improvements and Issuance of
Indebtedness". Because substantial amounts of the City' s annual ad valorem tax receipts
are generally collected during the last months of the calendar year, the City has in the
current fiscal year obtained a short-term loan for operating expenses in anticipation of
taxes to be received in later months of the same year. It is anticipated that the short-
term borrowings will be continued by the City so long as net interest costs remain
favorable. Such loans must be repaid before the end of the fiscal year in which they are
incurred, and the tax levied for payment of principal and interest on the bonds is not
legally available for that purpose.
No Arbitrage:
The City certifies that based upon all facts and estimates now known or reasonably
expected to be in existence on the date the Certificates are delivered and paid for, the
City reasonably expects that the proceeds of the Certificates will not be used in a manner
that would cause the Certificates, or any portion of the Certificates, to be "arbitrage
bonds" under Section 103(c)(2) of the Internal Revenue Code of 1954, as amended, and the
regulations prescribed thereunder. Furthermore, all officers, employees and agents of the
City are authorized and directed to provide certifications of facts and estimates that are
material to the reasonable expectations of the City as of the date the Certificates are
delivered and paid for. In particular, all or any officers of the City are authorized to
certify to the facts and circumstances and reasonable expectations of the City on the date
the Certificates are delivered and paid for regarding the amount and use of the proceeds
of the Certificates. Moreover, the City covenants that it shall make such use of the pro-
needs of the Certificates, regulate investments of proceeds of the Certificates and take
such other and further actions as may be required so that the Certificates shall not
become "arbitrage bonds" under Section 103(c)(2) of the Internal Revenue Code of 1954, as
amended, and the regulations prescribed from time to time thereunder.
Legal Investments in Texas :
Article - ernon' s Texas Civil Statutes, which applies to the Certificates,
provides in part:
"All bonds. . .are legal and authorized investments for banks, savings banks,
trust companies, building and loan associations, savings and loan
associations, insurance companies, fiduciaries and trustees, and for the
sinking fund of cities, towns, villages, school districts, and other
political subdivisions or public agencies of the State of Texas. Said
bonds also are eligible to secure deposits of any public funds of the state
or any political subdivision or public agency of the state, and are lawful
and sufficient security for the deposits to the extent of their market
value, when accompanied by any unmatured coupons attached to the bonds."
,06-�-S- 7
6
The City has .ode no investigation of any of laws, rules, regulations or
investment criteria that may affect the suitability of the certificates for any of the
above purposes or that may limit the a;ithori�y of a,ny of the above entities or persons to
purchase or _invest in the Certificates.
No representation is made with respect to the laws of states other than Texas as to
whether the Certificates are legal investments for various institutions or purposes in
those states.
Remedies in then Event of Default:
The Ordinance obligates the City annually to assess and collect ad valorem taxes
sufficient to pay principal and interest when due on the Certificates and also pledges
certain revenues to the payment of the Certificates, but provides no other security for
the payment of the Certificates, provides no express remedies in the event of default,
makes no provision for acceleration of maturity of the Certificates in the event of de-
fault, and does not provide for a trustee to protect the rights of the certificate owner.
Although a Certificate owner could presumably obtain a judgment against the City in
the event there was a "default in the payment of principal or interest on the Certificates,
such judgment could not be satisfied by execution against any property of the City. A
certificate owner could, in the event of default, ask a court for a mandamus or court
order compelling the City to levy, assess and collect sufficient ad valorem taxes to pay
principal and interest as it falls due on the Certificates or to perform the City's other
obligations under the Certificate Ordinance. Such remedy might need to be enforced on a
periodic basis. The enforcement of a claim for payment of principal or interest on the
Certificates would be subject to the applicable provisions of the federal bankruptcy laws
and to any other similar laws affecting the rights of creditors of political subdivisions
generally.
PRO-FORMA DEBT SERVICE SCHEDULE
The following sets forth the principal and interest on the City's outstanding bonds,
certificates of obligation and the Bonds and the Certificates (assuming an average
interest rate of 9.50% on the Bonds and the Certificates) .
Self Supported
Fiscal Year Outstanding The Bonds The Certificates Total New Ad Valorem Tax
Ending Ad Valorem $20,000,000 $12,000,000 Ad Valorem Debt Included
9-30 Tax Debt Principal Interest Principal Interest Tax Debt In Total
1985 $ 9,324,154 $ 950,000 $ 570,000 $10,844,154 $ 1,259,444
1986 9,156,347 1,900,000 $ 250,000 1,140,000 12,446,347 1,878,133
1987 8,874,391 $100,000 1,900,000 275,000 1,116,250 12,265,641 1,876,852
1988 7,558,799 700,000 1,890,500 300,000 1,090,126 11,539,425 1,886,667
1989 7,363,535 200,000 1,824,000 325,000 1,061,626 10,774,161 1,880,728
1990 7,159,575 100,000 1,805,000 350,000 1,030,750 10,445,325 1,877,150
1991 7,229,345 -0- 1,795,500 400,000 997,500 10,422,345 1,886,522
1992 6,718,905 200,000 1,795,500 550,000 959,500 10,223,905 1,866,700
1993 6,393,620 200,000 1,776,500 610,000 907,250 9,887,370 1,872,150
1994 5,729,640 500,000 1,757,500 670,000 849,300 9,506,440 1,519,300
1995 5,515,240 400,000 1,710,000 740,000 785,650 9,150,890 1,525,650
1996 5,187,020 400,000 1,672,000 800,000 715,350 8,774,370 1,515,350
1997 3,992,080 1,000,000 1,634,000 875,000 639,350 8,140,430 1,514,350
1998 1,751,090 2,400,000 1,539,000 975,000 556,226 7,221,316 1,531,226
1999 3,600,000 1,311,000 1,050,000 463,600 6,424,600 1,513,600
2000 3,800,000 969,000 1,160,000 363,850 6,292,850 1,523,850
2001 3,800,000 608,000 1,270,000 253,650 5,931,650 1,523,650
2002 2,600,000 247 000 1,400,000 133,000 4 380,000 1,533,000
9 ,953,4 $20,000,000 $ ,0' 4,0 ,000,000 3,632,978 64,67 2219: $29,984,319
Average Annual Debt Service Requirements (1985/2002) .. .... .. . .. . .... $ 7,482,605 (a)
Average Annual Debt Service Requirements (1985/2002).... .. . ... ...... $ 9,148,401
Maximum Annual Debt Service Requirement (1986). .. . .. .. .. .. . .. . ... . . . $12,446,347
(a_) Less Self Supported Ad Valorem Tax Debt Service.
DEBT STATEMENT
General :
Tie following tables and calculations relate to the Bonds and Certificates and to all
other tax supported debt of the City. In addition to the Outstanding Bonds and
Certificates of Obligation, the City has also issued revenue bonds and has incurred
contractual and other indebtedness and liabilities which are not included below but which
are significant in amount. The City and various other political subdivisions of
government which overlap all or a portion of the City are empowered to incur debt to be
paid from revenues raised or be raised by ad valorem taxation against all or a portion of
property within the City.
7
Bonded Indebtedness:
1984 Certified Assessed Valuation
(100% Estimated Market Value).. . .... .. .. .. ..... . ....... .. $2,588,372,712
Direct Debt
Outstanding Debt (as of January 31, 1985)... . .. . .. ... . .. . $ 60,485,000
The Certificates..... ....... .. . . .. . .... . .... ...... . . ..... 12,000,000
The Bonds.. .. .. ..... . .. .. . . . .... . .. .... . . .. . .. ... . 20,000,000 (a)
Total Direct Debt.... . . . .. . .... .. . .. . .... .. .. ....
Less: Self Supported Debt (b). . ... ..... ....... ........ . . $ 15 140,000
Total Ad Valorem Tax Supported Debt... . ... ..... ...... ...... .. i77,i45,000
Interest & Sinking Fund Balance (as of January 31, 1985)... .. $ 32894,088
a The City anticipates selling $20,000,000 Street and Drainage Improvement Bonds
concurrently with the Certificates.
(b) See "Revenue Support at Ad Valorem Tax Debt."
Revenue Sueport of Ad Valorem Tax Bonds and Certificates of Obligation:
certain tax supported bonds and certificates of obligation are being paid from
revenues other than taxation. Including the Certificates, $15,140,000 of such bonds and
certificates of obligation are presently outstanding, and their debt service requirements
have traditionally been paid from funds transferred from the other funds into the Debt
Service Fund. The following is a listing of funds so transferred over the last five
years, which amounts represent the actual principal and interest requirements of such
bonds and certificates of obligation:
Fiscal Year Ended September 30
984 1983 1982 1981 1980
Transfer from other funds to
Debt Service Fund... .... .. ... . $897,375 $708,852 $546,328 $668,027 $703,031
The City has pursued a policy of making such debt service payments from the other
funds and intends to continue to do so in the future. However, nothing herein is to be
construed as a guarantee that it will be able to do so. Any change in such policy could
have the effect of increasing ad valorem tax requirements with resultant increases in the
rate of taxation.
Estimated Overlapping Debt:
The following table indicates the indebtedness, defined as outstanding bonds payable
from ad valorem taxes, of governmental entities overlapping the City and the estimated
percentages and amounts of such indebtedness attributable to property within the City.
This information is based upon data secured from the individual jurisdictions and or the
Texas Municipal Reports. Such figures do not indicate the tax burden levied by the
applicable taxing jurisdictions for operation and maintenance or for other purposes. The
City has not independently verified the accuracy or completeness of the information shown
below except for amounts related to the City.
Overlapping
Taxing Jurisdiction Debt as of 1-31-85 ercent mount
Beaumont I'rdependent School District 7,932,000 58.66 $ 4,651,791
Jefferson County 23,650,000 24.60 5,817,900
Jefferson County Drainage District No. 6 16,300,000 74.25 12,102,750
Port of Beaumont Navigation District 9,500,000 70.78 6,724,100
TOTAL ESTIMATED OVERLAPPING DEBT $ 29,296,541
The City 77,345,000
TOTAL DIRECT AND ESTIMATED OVERLAPPING DEBT $106,641,541
Debt Ratios: Direct and
Estimated
Overlapping
Direct Debt Debt
Per 1984 Certified Assessed Valuation ($2,588,372,712).. ... 2.99% — — .12%
Per Capita (118,111). ... . .. . . . .... ... . . . ...... .. . . .. .. . ... . $655 $903
8
I�
TAX DATA
General :
One of the City's sources of operational revenue and its principal source of funds
for ad valorem tax debt service payments is from the receipts from ad valorem taxation.
The following is a recapitulation of (1) the authority for taxation, including methodo-
logy, limitations, remedies and procedures; (2) historical analysis of collection and
trends of tax receipts and provisions for delinquencies; and (3) an analysis of (a) the
current tax base, (b) the principal taxpayers and (c) other ad valorem taxation that may
compete with the City's tax collections. Additionally, sales tax authority and collec-
tions are analyzed as well as payments received in lieu of taxes for Industrial District
Contracts. The inclusion of the following information is not intended to imply that any
revenues of the City, other than receipts of an ad valorem tax, are pledged to pay the
principal of or interest on the Bonds. Such information, and the other information
contained in this Official Statement relating to sources of revenues other than ad valorem
taxes, is for the purpose of providing information concerning the general operation of the
City.
Authority for Ad Valorem Taxation:
Following is a discussion of ad valorem taxation under Texas law. Recently effective
changes to the law, especially the State Property Tax Code (the "Tax Code"), will have
varying but significant effects upon the existing tax methodology and procedures discussed
below. The City is presently unable to assess the full impact of such changes upon the
City's ad valorem tax procedures, nor can the City predict the future possibility of
further amendments or revisions to the Tax Code.
- Tax Rate Limitations -
Article XI, Section 5 of the Texas Constitution, provides for an overall limitation
for Home Rule Cities of $2.50 per $100 assessed valuation. The Attorney General of Texas
follows a policy, with respect to Home Rule Cities which have such a $2.50 limitation, of
approving ad valorem tax bonds only to the extent that all of such city's ad valorem tax
debt can be serviced by a tax rate of $1.50 at 90% collection.
Property Subject to Taxation -
Except for certain exemptions provided by Texas law, all the property in the City,
real or personal , is subject to taxation by the City. Principal categories of exempt
property include property owned by the State of Texas or its political subdivisions if the
property is used for public purposes; property exempt from ad valorem taxation by federal
law; certain households goods, family supplies, and personal effects; farm products owned
by producers; certain property associated with charitable — organizations, use and
development associations, religious organizations, and qualified schools; designated
historic sites; solar and wind powered energy devices; most individually owned
automobiles; property of disabled veterans only to the extent of $3,000 of taxable
valuation; and residential homesteads of persons over 65 years, to the extent the
governing body of the political subdivision granting an exemption deems it advisable to
exempt such homestead. The Council presently exempts from taxation up to $17,500 assessed
valuation of residential homesteads to persons over 65 years of age. Such homestead and
disabled veterans exemptions from the 1984 tax roll approximate $133,858,653.
An eligible owner of agricultural and timberland may apply to have such properties
which meet certain requirements appraised on the basis of productivity value or market
value, whichever is less. However, eligible timberland may not be appraised at a value
lower than was assigned on the 1978 tax rolls. The total loss in value due to grants of
agricultural use and open-space land appraisal from the 1984 tax roll approximate
$14,518,578.
Voters of the State of Texas cast ballots on November 3, 1981, approving a state
constitutional amendment which permits local governments the option of granting homestead
exemptions of up to 40% of market value of the 1982-1984 tax years, up to 30% of market
value for the 1985-1987 tax years, and up to 20% of market value thereafter. The City
currently does not grant an additional homestead exemption.
- Collections -
Although the assessment procedure has changed, the City Tax Assessor-Collector will
continue to be responsible for the assessment and collection of ad valorem taxes levied by
the city. since 1982, the city has contracted with the Jefferson County Tax Assessor-
Collector to collect ad valorem taxes on behalf of the City at a rate of $0.22 per
taxpayer. Collections by the County Tax Assessor-Collector on behalf of the City are
approximately 2% below those collections in prior years, resulting in a reduction of
approximately $400,000 in current collections. The County Tax Assessor-Collector has
undertaken to increase its collection efforts.
a
The City has a 'ien granted by statute for unpaid `axes on real property which is
discharged upon payrr, Thereafter, no lien exists in vor of the City until it again
levies taxes. A tax iien may not be enforced on persona. property transferred to a bona
fide purchaser for value who does not have actual noiice of the existence of the lien. In,
the event a taxpayer fails to make timely payment of taxes owing to the City on real '
property, a penalty of 6% of the unpaid taxes is incurred in February and 1% is added
monthly until July 1 when the penalty becomes 12%. In addition, interest on delinquent
taxes accrues at the rate of 1% per month until paid. The City may file suit for the
collection of delinquent taxes and may foreclose such lien in a foreclosure proceeding.
The City may also impose an additional penalty to defray costs of collection by an
attorney, not to exceed 15% of the total amount due. The property subject to the City's
lien may be sold, in whole or in part, pursuant to a court order to collect the amounts
due. The ability of the City to collect delinquent taxes by foreclosure may be adversely
affected by the amount of taxes owned to other taxing units, adverse market conditions,
taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of the
taxpayer's debt.
Taxation Procedures -
As of January 1, 1982, the appraisal of property within the City is the
responsibility of the Jefferson County Appraisal District with county-wide jurisdiction
(the "Appraisal District"). Prior to January 1, 1982, appraisal of property within the
City was the responsibility of the City's Tax Assessor-Collector. The Appraisal District
operates under rules adopted by the State Property Tax Board (the "Tax Board"). The Tax
Board, appointed by the Governor, began operation on January 1, 1980. Appraisal Districts
within each county also began operation at that time. The majority of the directors of
the Appraisal District may be selected by taxing entities other than the City.
The Appraisal District is required to review all property within the City at least
every four years. The next reappraisal will be completed during the current fiscal
year. The Appraisal District is required to assess all property within the Appraisal
District on the basis of 100% of its appraised value and is prohibited from applying any
assessment ratios. By August 1, or as soon as possible thereafter, the City must adopt a
tax rate for the current year. Taxes are due October 1 and become delinquent after
January 31 of the following year. No discount for early payment is offered. Partial
payments may be accepted if requested by the taxpayer and approved by the City. If the
effective tax rate, excluding taxes for bonds and other contracted obligations, for the
current year, exceeds the rate for the previous year by more than 8%, the qualified voters
of the City may petition for an election to determine whether to limit the increase of the
tax rate to no more than 8% for the following year. The City is required to hold public
hearings to permit voter discussion should the effective tax rate be increased by more
than 3%.
Under Texas law, the Appraisal District is under an obligation to assess all property
for taxation which has not been rendered for taxation by the owner and to present his
assessments along with any objections to renditions to a nine-member Appraisal Review
Board, each of whom has resided within the Appraisal District for two years, and who have
been appointed by the Appraisal District's Board of Directors. The Appraisal Review Board
has the ultimate responsibility of equalizing the value of all comparable taxable property
within the Appraisal District; however, any owner who has rendered his property may appeal
the decision of the Appraisal Review Board by filing suit in district court in Jefferson
County, within 45 days from the date the tax roll is approved. In the event of such suit,
the value of the property is determined by the court, or by a jury if requested by the
owner, which value as so determined is binding on the City for the tax year in question
and the succeeding year, except for subsequent improvements.
A city, or other taxing unit, may challenge the appraisals -assigned categories of
property within its jurisdiction under certain limited circumstances. The City may also
sue the Appraisal District to compel it to comply with the Tax Code. It is not expected
that Appraisal District procedures will affect the ability of the City to adjust its tax
rate so that it may levy and collect taxes sufficient to meet its obligations.
Historical Analysis of Ad Valorem Taxation:
- Collection Ratios -
Tax Rate Per % Tax Collections
Tax Assessed $100 Assessed Adjusted Current Current b Fiscal Year
Year Valuation Valuation Tax Lev Year Prior Years Ending 9-30
�,_n
$ F7i5 —$1 S ,556,5 8 98.31— 99.3 979
1979 728,134,250 1.87 13,616,110 96.23 97.84 1980
1980 799,830,460 1.87 14,956,830 97.04 99.12 1981
1981 1,458,663,314 (a) 1.12 17,266,590 96.43 98.07 1982
1982 2,391,880,308 (b) .75 17,939,102 98.66 98.87 1983
1983 2,528,125,360 .76 19,213,753 95.81 97.73 1984
1984 2,588,372,712 .78 20,189,307 (In process of collection) 1985
a Increase in assessment ratio from 60% to 100%.
(b) Revaluation.
-49,
10
- Tax Rate Distri but'i on -
Tax Year
1984 1983 1982 9 8 1979 1-97-8-
General Fund $0.51 $0.51 $0.51 $0.79 $1. 33 $1. 33 $1. 33
Interest &
Sinking Fund 27 25 24 33 54 .54 .54
Total TT:7� 3 75' T T 3 $1.87
- Tax Base Distribution -
Type of Property 1984 Tax Roll % 1983 Tax Roll %
Residential $1,515,308,226 55.37 $1,470,637,165 55.01
Vacant Platted Lots/Tracts 104,072,705 3.80 103,623, 500 3.88
Minerals 28, 126,300 1.03 30, 226,710 1.13
Commercial b Industrial 561,960,990 20.53 513,083, 160 19.19
Banks 33,635,400 1.23 79, 525,810 2.97
Utilities 185,978,655 6.80 178,525,665 6.68
Business Personal 286,457,277 10.47 278, 233,814 10.41
Vehicles b Other Personal 21, 235,480 .78 19,382, 324 .73
Gross Value ,
Less: Exemption 148,402 321 144, 109,�78a8_
Net Value �$� ,
- Principal Taxpayers -
Assessed Valuation
Tax a Type of Property
t ax o ax o
i u State sties
Electric ctric Utility 9,99 ,62 ,600
Southwestern Bell Telephone Utility 73,887,970 82,197,470
Dresser Industries, Inc. Manufacturing 21,826,940 20, 503,830
Holidome, John Q. Hammonds Hotel-Motel 15,828,360 _x_
N. L. Petro Services Chemical Properties 15, 173, 510 15,173, 510
Parkdale Mall Shopping Center 14,398,410 13,309,410
Betz Laboratories Chemical Properties 10,754, 130 -x-
Entex, Inc. Gas Utility 7,987,870 7,939,720
J. C. Penney Company Department Store 7,432, 240 6, 661, 400
Joske' s Department Store 7,051, 120 6,680,400
First City National Bank Bank -x- 21, 503,830
Texas Commerce Bank Bank -x- 20,081, 220
Total Top Ten Taxpayers Assessed Valuation $255,800, 540 $266,988,550
% of Assessed Valuation to Respective Tax Roll 9.88% 10. 56%
- Tax Adequacy -
Average Annual Debt Service Requirements (1985/2002). .. ... ... . . . . . . . .... S 9,148,401
(assuming 9.. 501 interest on the Certificates)
Tax Rate of $0. 38 per $100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces. . . .. . . .. ... S 9,344,025
Average Annual Debt Service Requirements (1985/2002). . .. ... .... ......... S 7,482, 606 (a)
(assuming 9. 50% interest on the Certificates)
Tax Rate of $0. 31 per $100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces. ... ........ $ 7,622,758
Maximum Annual Debt Service Requirements (in the year 1986). . . . .. .. . ... . $12,446,347
(assuming 9.50% interest on the Certificates)
Tax Rate of $0.51 per 5100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces. ....... .... $12,540,666
a Less Self Supported Ad Valorem Tax Debt Service.
it
Estimated Overlapping Taxes:
Under Texas law, if ad valorem taxes levied by a taxing authority become delinquent,
a lien is created upon the property which has been taxed, which lien is on a parity with
any tax lien on such property in favor of the City. In addition to ad valorem taxes
required to retire the aforementioned direct and estimated overlapping debt, certain
taxing jurisdictions including those mentioned above are also authorized by Texas law to
assess, levy, and collect ad valorem taxes for operation, maintenance, administrative
and/or general revenue purposes.
Set forth below is an estimation of ad valorem taxes levied on a $75,000 single-
family residence by such jurisdictions, assuming the assessments are made at their claimed
basis of assessment (100%). Such residence is further assumed to be located within
Jefferson County, wherein substantially all of the residential property within the City is
located. No recognition is given to local assessments for civic association dues, fire
department contributions, or other charges made by other than political subdivisions.
1984 Tax Estimated
Taxing Jurisdiction Rate/5100 1984 Tax Bill
The City $0.7800 5 585.00
Beaumont Independent School District .9000 675.00
Jefferson County .2420 181.50
Jefferson County Drainage District No. 6 .2171 162.83
Port of Beaumont Navigation District .0570 42.75
Estimated Total 1984 Tax Bill $1,647.08
Sales Tax:
- Authority -
The City has adopted the provisions of Article 1066c, Vernon's Texas Civil Statutes,
as amended, which grants the City the power to impose and levy a 1% sales tax. The City
may not pledge the proceeds from the Sales Tax as security for the Certificates.
- Collection History -
The State Comptroller, after deduction of a 2% service fee, remits the City's portion
of sales tax collections monthly. The following is an analysis of the collection history
of the City's sales tax:
Ad Valorem Taxation Comparisons
Fiscal Year Sales Tax Equivalent Tax Rate of Actual
Ended 9-30 Receipts Tax Year Equivalent Tax Levy
1978 5,280,290 (1977) $0.894 47.83
1979 6,135,353 (1978) .914 48.86
1980 7,024,856 (1979) .965 51.59
1981 8,147,717 (1980) 1.019 54.47
1982 8,717,207 (1981) .561 50.49
1983 8,527,153 (1982) .361 48.09
1984 9,455,086 (1983) .374 49.22
1985 3,542,097 (a) (1984)
During the current fiscal year, sales tax revenues are approximately $225,000 below
those anticipated through 1-31-85. If such revenues remain below the budgeted level the
City anticipates a shortfall of up to $600,000 for the current fiscal year.
7—aT—T—oTTections through January 31, 1985.
Industrial District Contracts:
The City has create , within its extraterritorial jurisdiction, but outside of the
City limits, ten Industrial Districts and has entered into contracts with the industry
within such districts. The contracts specify payments to be made in lieu of ad valorem
taxes and thereby protect the industries from annexation by the City during the term of
the contract, seven years. The annual payments shown below increased 6% annually from
1982 through 1984 and will increase 12% in 1985 and 6% in 1986 and 1987 unless otherwise
indicated. Such revenues are not pledged to the payment of the Certificates.
12
The Industrial District, the industry within, their contract dates and current
payment are as follows:
Contract Annual Patent
Industrial District Expires 9� 84 —1985
Mobil Oil Corporation................................ 12-31-87 $3,013,000 $3,375,000
Texas Gulf Sulphur Co................................ 12-31-87 78,322 87,720
P. D. Glycol/Houston Chemical (was PPG Industries)... 12-31-87 258,200 289,200 (a)
Bethlehem Steel Corp................................. 12-31-87 88,570 99,200
E. I. duPont de Nemours b Co......................... 12-31-87 851,547 953,730
Gulf States Utilities Co............................. 12-31-87 177,493 216,840 (b)
Goodyear Tire b Rubber Co............................ 12-31-87 355,515 398,180
Olin Corp............................................. 12-31-87 46,239 51,790
Amoco Texas Refining................................. 12-31-87 123,644 138,480
Pennwalt Corp........................................ 12-31-87 121,515 136,100
TOTAL........................................... $S;IT4� $5,746,24G
a Fixed payments for remaining term of contract.
(b) Fixed annually based on the City's annexation policy and Company's plant retirement.
Revenue from these contracts is summarized and compared to ad valorem taxation in the
table below:
Receipts from
Industrial Ad Valorem Taxation Comparisons
Fiscal Year District qu,va ent Tax Rate of ctua
Ended 9-30 Contracts _ Tax Year Equivalent Tax Lev
1978 $3,045,025 977 0.453 27.58
1979 3,031,231 (1978) .416 24.14
1980 3,059,879 (1979) .383 22.47
1981 4,278,225 (1980) .293 28.60
1982 4,591,139 (1981) .192 26.59
1983 4,837,783 (1982) .191 26.97
1984 5,114,045 (1983) .202 26.62
1985 5,746,240 (1984) .222 28.46
Tax Increment Reinvestment Zone:
In 1982, the City established a tax increment reinvestment zone in the downtown area
in order to assist in its revitalization. As a result of creation of the zone, ad valorem
taxes currently collected in excess of collections during a base year are to be used to
finance public improvements to be located within the zone. These excess ad valorem tax
collections will not be available for debt service on ad valorem tax supported bonds
(including the Bonds). Tax increments set aside for public improvements in the City's
zone will be approximately $125,000 during 1985.
SELECTED FINANCIAL DATA
Historical Operations of the City's General Fund:
We—fol lowing is a condensed statement -o-revenues and expenses of the City's General
Fund for the past five fiscal years. The inclusion of the following table is not intended
to imply that any revenues of the City, other than receipts from ad valorem taxes as
provided in the Ordinance, are pledged to pay principal and interest on the Certificates.
Fiscal Year Ended September 30
REVENUES 1984 1983 1982 1981 198U
Property Taxes.................... $12,601,094 $11,750,575 $11,774,351 $10,543,631 $ 8,320,422
Other Taxes (a)................... 13,346,337 12,534,239 11,628,728 10,104,997 8,568,612
Industrial District Contract
Payments........................ 5,114,045 4,837,783 4,591,139 4,278,225 3,059,879
Licenses and Permits.............. 640,219 447,647 340,734 406,102 372,996
Charges for Services.............. 485,421 310,687 250,681 222,959 334,145
Intergovernmental Revenues........ 2,480,653 2,409,810 1,514,305 1,665,513 1,810,663
Fines and Forfeits................ 1,766,324 1,527,058 1,383,333 1,205,711 1,101,357
Cultural and Recreational......... 642,270 561,670 -0- -0- -0-
Interest.......................... 789,526 870,644 1,321,876 905,437 987,017
Miscellaneous..................... 422,760 331,499 394 273 280,249 99,340
Total Revenues................. -%38,282,649 $29,612,824
EXPENDITURES
General Government................ $ 3,361,945 $ 1,523,084 $ 1,306,712 $ 1,159,985 $ 1,081,028
Finance........................... 1,664,990 768,275 1,048,093 1,295,035 1,088,499
Police............................ 9,217,131 9,043,113 8,212,074 7,264,769 6,253,356
Fire.............................. 8,151,746 7,431,694 6,608,043 5,954,185 5,506,029
Traffic and Transportation........ 1,994,752 2,070,704 2,272,732 2,025,882 1,599,651
Public Works.......... 5,168,419 5,147,725 4,666,453 4,379,153 3,652,971
Code Enforcement.................. 1,985,993 1,235,571 1,231,452 1,095,944 900,792
Parks and Recreation.............. 2,024,076 1,798,378 1,604,182 1,427,863 1,264,215
Community Services................ 2,521,038 2,100,023 1,712,853 1,421,907 1,159,426
Community Facilities.............. 965,982 930,158 (b) (b) (b)
General Service................... -0- (d) 1,350,406 1,327,481 1,436,570 1,855,345
Building Maintenance.............. -0- (d) 1,525,930 1,325,870 1,280,290 (c)
Capital Improvements.............. -0- -0- -0- -0- 3,906,000
Non-Departmental.................. 500,000 662,176 1,057,601 347,456 599,968
Total Expenditures............. _Mbbb,010
a Inclu es Sales and Use Taxes, Street Rentals and penalties and interest on delinquent
taxes.
(b) Does not include income and expenditures from solid waste disposal and community
facilities accounted for in separate funds from 1980 through 1982, inclusive.
(c) Building Maintenance included in General Services prior to 1981.
(d) Included in General Government and Finance in 1984.
General Fund and Debt Service Fund Balance for the Past Five Fiscal Years:
Fiscal Year Ended September 30
1984 1983 1982 1981 80
General Fund........................ $3,538,763 $1,907,798 ($ 184,823) $ 759,649 $1,523,898
Debt Service Fund................... $2,407,460 $4,063,258 $6,028,639 $5,213,486 $3,776,540
Financial Statements:
A copy o the City's Financial Statements for the fiscal year ended September 30,
1984, is attached hereto in the APPENDIX B. Copies of such statements for preceding years
are available, for a fee, upon request.
14
ADMINISTRATION OF THE CITY
Mayor and City Council :
Policy-making and legislative functions are the responsibility of and are vested in
the Mayor and Council under provisions of the "Charter of the City of Beaumont" (the
"Charter") approved by the electorate December 6, 1947, and amended in 1972 and 1983. In
an election held on August 13, 1983, the voters of the City approved amendments to the
City Charter effective January 1, 1984, providing for a city council composed of seven
members, including the Mayor, four of whom, including the Mayor, are to be elected at-
large in even-numbered years. All members will serve two-year terms. The Mayor is
entitled to vote on all matters before the Council , but has no power to veto Council
action. Members of the Council are described below:
Council Members Position Term Expires Occupation
William E. Neild Mayor April , 1986 Building Contractor
Joseph 0. Deshotel Mayor Pro Tem April, 1986 Attorney
Nell Pruitt Weisbach Councilman Ward 1 April , 1985 Housewife
Mike Brumley Councilman Ward 2 April, 1985 Prehearing Examiner/Texas
Industrial Accident Board
Audwin Samuel Councilman Ward 3 April, 1985 Salesman/Savin Corp.
David W. Moore Councilman Ward 4 April , 1985 Salesman/Xerox Corp.
G. Wayne Turner Councilman-At-Large April , 1986 Supervisor/Sunoco Marine
Terminal , Inc.
Administration:
Under provisions of the Charter, the Council enacts local legislation, adopts
budgets, determines policies and appoints the City Manager, who is charged with the duties
of executing the laws and administering the government of the City. As the chief
executive officer and head of the administrative branch of the City government, the City
Manager is given the power and duties to:
(1) Appoint and remove all department heads and all other employees in the
administrative service of the City and may authorize the head of a department to
appoint and remove subordinates in his respective department;
(2) Prepare the budget annually, submit it to Council, and be responsible for its
administration;
(3) Prepare and submit to Council a complete report on the finances and
administrative activities of the City;
(4) Keep Council advised of the financial condition and future needs of the City and
make appropriate recommendations; and
(5) Perform such other necessary duties as prescribed by the Charter or required by
Council.
Members of the administrative staff are described below:
Citr Mana er - Karl Nollenberger - Mr. Nollenberger is a graduate of the University
of Iowa B.B.A. 1969) and the University of Colorado (M.P.A. 1977). He has fifteen years
experience in municipal government and financial management in Texas, Minnesota, Iowa and
Colorado. He became City Manager of Beaumont in June, 1983, and is a member of the
International City Management Association and other professional organizations.
Assistant Cit Manager - Hugh H. Earnest - Mr. Earnest is a graduate of Arkansas A &
M University 96 and received a Master's Degree in Public Administration from the
University of Arkansas (1971). Mr. Earnest has twelve years' experience in municipal
management and became Assistant City Manager of Beaumont in January, 1982. He is a member
of the Texas City Management Association and the International City Management
Association.
Finance Officer - Robert J. Nachlinger - Mr. Nachlinger is a graduate of East Texas
State University B.B.A. 1970, M.B.A. 1978). He has fifteen years experience in municipal
finance and became Finance Officer of the City in March, 1979. He is a member of the
Governmental Finance Officers Association, the American Institute of Certified Public
Accountants, and the Texas Society of Certified Public Accountants.
15
City Attorney - Lane Nichols is' a graduate of Lamar University (1964) and the
University of Texas School of Law (1967). He has been City Attorney of Beaumont since
March of 1984. Prior to that he was First Assistant City Attorney for the City. He is a
member of the Texas and American Bar Associations and admitted to practice in the U.S.
District Court for the Eastern District of Texas and the United States Supreme Court. He
is a member of- the National Assaciation of Municipal Law Officers and a member of the
Board of Directors of the Texas City Attorneys Association.
City Clerk - Myrtle Corgey - Mrs. Corgey has been employed by the City since 1958 and
has been ,ty Clerk since 1972. She is a member of the Institute of Municipal Clerks and
the Texas Election Officials Association.
Consultants:
The City has retained several consultants to perform professional services in
connection with the independent auditing of its books and records and other City
activities. Several of these consultants are identified below:
Financial Advisor.............. ..................... Underwood, Neuhaus & Co. Incorporated
Houston, Texas
Auditors. ... ..• ... •. Touche Ross & Co.
(Certified Public Accountants) Houston, Texas
Bond Counsel. ..... ........... ....... .... ... ... ........... . ... . .... Messrs. Vinson & Elkins
Houston, Texas
Securities Counsel to the City...... ..... ...... ... .... .. .... Messrs. Orgain, Bell & Tucker
LITIGATION Beaumont, Texas
In 1983, the United Stated Supreme Court held in American Bank & Trust Co. v. Dallas
County that Texas taxing entities, including the City, may not include the value o United
t5 ates obligations in the computation of the value of bank capital stock which is subject
to ad valorem taxation under Texas law. Local banks in the area have filed suit against
the City seeking recovery of ad valorem taxes assessed against their bank capital stock.
The City has established a reserve of $2,000,000 which is sufficient to repay all ad
valorem taxes paid by the local banks under protest.
The City is defending a number of lawsuits in which personal injuries, property
damages, wrongful deaths, and violations of civil rights law are alleged. The City is
also aware of claims based upon alleged personal injuries, property damages, wrongful
deaths and violations of civil rights laws which have not been asserted in litigation.
The City considers that none of these lawsuits and claims, either individually or in the
aggregate, would, if adversely decided, have a material adverse affect on the ability of
the City to pay principal of and interest on the Bonds.
LEGISLATION AND REGULATION
Affecting the City's Operations:
In July of 1984, the City was notified by the United States Environmental Protection
Agency (the "EPA" ) that the City may have to construct additional water treatment
facilities to meet final effluent limitations which are presently scheduled to take effect
in 1988. The EPA is not requiring that the City furnish additional information concerning
its water treatment facilities until the spring of 1985. Therefore, it is not know
whether any amounts will have to be expended by the City in order to comply with the EPA' s
final effluent limitations.
At the present time, President Reagan has proposed the introduction of legislation
which, if enacted, would among other things reduce Federal revenue sharing programs,
eliminate grants by the Urban Mass Transit Administration, and reduce the Community
Development Block Grant Program. During the fiscal year ended 9-30-84, the City received
$1,781,377 in Federal revenue sharing funds which the City used for capital
improvements. If legislation in the form proposed is enacted, the City will have to use
ad valorem tax revenues for such projects or limit further capital expenditures. During
the fiscal year ended 9-30-84, the City received $508,259 in funds from the Urban Mass
Transit Administration which the City used to finance capital improvements and expenses of
operation of the City's transit system. If the proposed legislation is passed in the
current form, the City may have to abandon or curtail services of the transit system or
use ad valorem tax revenues, increase system charges, or use revenue from other sources to
offset the loss of federal funding. During the fiscal year ended 9-30-84, the City
received $2,564,937 in Community Development Block Grant Program funds which were used for
improvements in low and moderate income areas. If such funds are not received in the
future, the City will have to restrict or curtail these advances or use ad valorem tax
receipts or revenue from other sources in order to provid the necessary funds.
,e.-mss
'The .69th Session of the Texas Legislature is presently in session until May 31,
1985. It is not possible to predict what affect, if any, legislation enacted by the Texas
Legislature may have on the City, its ad valorem taxes, or its operations in general .
Affecting the Tax Base:
Air quality, control measures of the EPA and the Texas Air Control Board may curtail
new industrial, commercial and residential development in the City and the surrounding
areas. Existing ambient ozone concentrations exceed EPA standards, and sulfur dioxide
emissions are increasing. Because of these factors, federal regulations are particularly
stringent with regard to construction or modification of certain facilities which emit
pollutants. The regulations require, among other things, that new or increased
hydrocarbon emissions must be offset by reductions of existing sources in the area. New
and more stringent limitations on development in the Beaumont area may result if
reasonable further progress is not made toward attaining the EPA's ambient air quality
standard for ozone. Such limitations could include (1) more stringent offset regulations,
(2) outright bans on new large facilities, and (3) increased transportation controls. The
City may be required to enforce such limitations which would have an adverse effect on
assessed valuations in the City and the surrounding area.
Under the provisions of the Flood Disaster Protection Act of 1973 and accompanying
regulations, the Federal Insurance Administration identified property lying within the
100-year flood plain (areas which a probability of flooding of 1% or greater each year)
and subjected those areas to regulations which constricted construction. These
regulations are being implemented in phases, as increasingly detailed data becomes
available. The City and Jefferson County have already passed ordinances implementing
building restrictions in flood plain areas. Approximately 6% of the surface area in the
County and approximately 12% of the surface area of the City are considered flood hazard
areas, which may have an adverse effect on the market valuation of the property within the
areas and all of which may adversely affect assessed valuations.
SPECIAL CONSIDERATIONS
Capital Improvements:
After issuance of the Bonds and Certificates, the City will have $1,000,000 of
authorized but unissued bonds available for street improvements and $8,000,000 of
authorized but unissued bonds for drainage improvements. It is contemplated that the
remaining bonds will be issued during 1987.
The City anticipates that additional expenditures may have to be made for
improvements to its water and sewer system in order to extend facilities into undeveloped
areas and to upgrade obsolete facilities and equipment in developed areas. A master plan
is now being developed by outside consultants for review by the City during the summer of
1985.
The City may have to make certain improvements to its water treatment facilities to
comply with the EPA' s final effluent limitations. The timing and cost of these
improvements cannot be predicted at this time. See "LEGISLATION AND REGULATIONS --
Affecting the City' s Operations".
The City contemplates that it will acquire an art museum in 1986 and lease the museum
to a local tax-exempt organization. To finance acquisition, the City plans to issue
approximately $6,750,000 of certificates of obligation.
As a part of the art museum project, the City also nas plans to expand its existing
River front Park. It is currently projected that the expansion will begin in 1987 at an
estimated costs of $1,000,000.
17
"17
Pension Fund:
All permanent employees of the City other than firemen are covered by a state-wide:
retirement plan administered by the Board of Trustees of the Texas Municipal Retirement
System. The City's contribution rate to the System, including supplemental disability
ene its for calendar year 1984, was set at 6.05% of each participant's salary as
determined by System's actuary in accordance with the .Texas Municipal Retirement System
Act. The City's total contributions for the fiscal year ended September 30, 1984, in
accordance with these requirements, were $1,091,066. The unfunded accrued liability for
prior service benefits (both vested and nonvested) at the date of latest actuarial
determination on 12-31-83, was $6,680,636.
Firemen are covered by a Firemen' Relief and Retirement Fund maintained for members
of the City of Beaumont Fire Department under the provisions of-applicable laws of the
State of Texas. All persons who are not more than 35 years of age upon entering service
as a fireman become members of the plan. While the City has no direct fiduciary
responsibility for the fund, the Director of Finance serves as a member of its Board of
Trustees. As determined by the latest actuarial valuation on 2-28-82, required contri-
butions made to the fund were 10% of salary by each member and matched by 10% from the
City, amounting to a contribution by the City in the aggregate amount of $550,529 for the
year ended September 30, 1984. Under Texas Law, expenditure of monies from the Firemens'
Relief and Retirement Fund for an actuarial valuation can be made only once every three
years. The latest valuation prepared as of October 1, 1982, reflected that there were
unfunded liabilities of $5,950,725 which were being amortized over 22 years.
Collective Bar ai�ninQ:
Police o if,cers and firemen employed by the City have collective bargaining rights
under the Texas Fire and Police Employees Relations Act. The contract between the City
and the union representing the policemen expires September 30, 1986. The contract between
the City and the union representing the firemen expires September 30, 1985, and the
parties are in the process of renegotiation. Neither the police officers nor the firemen
have the right to strike, but under a local ordinance the firemen may submit any issues
not resolved by negotiation to binding arbitration.
Local Economic Conditions:
The City and the surrounding area are currently experiencing the effects of a severe
economic recession, caused in large part by a decline in the petroleum and related
chemical industries. The recession has, and until abatement will continue to, adversely
affect property valuations, governmental revenues and receipts, income levels, entry of
new businesses and success of existing enterprises, and other economic conditions
generally within the City and the surrounding area.
LEGAL MATTERS
Legal Opinion:
The City will furnish the Purchaser a transcript of certain certified proceedings had
incident to the authorization and issuance the Certificates, including a certified copy of
the unqualified approving opinion of the Attorney General of Texas, as recorded in the
Certificate Register of the Comptroller of Public Accounts of the State of Texas, to the
effect that the Certificates are valid and binding obligations of the City under the
Constitution and laws of the State of Texas. The City will also furnish the approving
legal opinion of Vinson & Elkins, Bond Counsel , to the effect that, based upon an
examination of such transcript, the Certificates are valid and binding obligations of the
City under the Constitution and laws of the State of Texas and to the effect that the
interest on the Certificates is exempt from all present federal income taxes under
existing statutes, regulations, published rulings and court decisions. The opinion of
Bond Counsel is expected to be reported on the back panel of the Certificates over a
certification by the City, attesting that the legal opinion was dated as of the date of
delivery of and payment for the Certificates and the copy is a true and correct copy of
the original opinion. The failure to print such legal opinion on any Certificate shall
not constitute cause for a failure or refusal by the Purchaser to accept delivery of and
pay for the Certificates.
Vinson & Elkins did not take part in the preparation of the Preliminary Official
Statement nor has such firm undertaken to independently verify any of the information
contained therein, except that, in their capacity as Bond Counsel , such firm has reviewed
the information describing the Certificates in the Official Statement to verify that such
description conforms to the provisions of the Certificate Ordinance.
No-Litigation Certificate:
he ,ty wi urnish the Purchaser a certificate, dated as of the date of delivery
of the Certificates, executed by both the Mayor and City Secretary, to the effect that no
litigation of any nature is then pending or threatened, either in state or federal courts,
contesting or attacking the Certificates; restraining or enjoining the issuance,
execution, or delivery of the Certificates; affecting the provisions made for the payment
of or security for the Certificates; in any manner questioning the authority or
proceedings for the issuance, execution or delivery of the Certificates; or affecting the
validity of the Certificates.
18
d GENERAL CONSIDERATIONS
Sources and Compilation of Information:
e information containe in t is Official Statement has been obtained primarily from
the City and from other sources believed to be reliable: No representation is made as to
the accuracy or completeness of the information derived from sources other than the
City. The summaries of the statutes, resolutions, and other related documents are
included herein subject to all of the provisions of such documents. These summaries do
not purport to be complete statements of such provisions and reference is made to such
documents for further information.
Underwood, Neuhaus & Co. Incorporated was employed as Financial Advisor to perform
certain professional services for the City, including compiling of this Official
Statement, for a fee to be computed on each separate issuance of certificates, contingent
upon such certificates actually being issued, sold and delivered.
The information contained in this Official Statement in the section entitled "APPEN-
DIX B - Financial Statements of the City" has been provided by Touche Ross & Co. ,
Certified Public Accountants, and have been included herein in reliance upon their
authority as experts in the fields of auditing and accounting.
Certification as to Official Statement:
At the time of payment f or an delivery of the Certificates, the Purchaser will be
furnished a certificate executed by an appropriate official of the City, acting in his
official capacity, to the effect that to the best of his knowledge and belief: (a) the
descriptions and statements pertaining to the City contained in its Preliminary and final
Official Statements, on the respective dates of such statements, on the date of sale of
the Certificates and the acceptance of the bid therefor, and on the date of delivery of
the Certificates, did not and do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; and (b) as of the date of delivery of the Certificates, there have been no
material adverse changes in the City' s financial condition and affairs since the date of
the Preliminary and final Official Statements. Such certificate shall not cover any
information contained in APPENDIX A to the Preliminary and final Official Statements or
relating to taxing jurisdictions other than the City, or stated to have been obtained from
sources other than City records or to information supplied to the City by the Purchaser
for inclusion into the Preliminary and final Official Statements. In rendering such
certificate, the person executing the certificate may state that he has relied in part on
his examination of the records of the City relating to matters within his own area of
responsibility, and his discussions with, or certificates or correspondence signed by,
certain other officials, employees, consultants and representatives of the City as to
matters not within his area of responsibility.
Updating of Official Statement:
The City will keep the Official Statement current by amendment or sticker to reflect
material changes in the affairs of the City and, to the extent that information comes to
its attention, to the other matters described in the Official Statement, until the
delivery of the Certificates to the Purchaser. All changes in the affairs of the City and
other matters described in the Official Statement subsequent to the delivery of the
Certificates to the Purchaser and all information with respect to the resale of the
Certificates shall be the responsibility of the Purchaser.
This Official Statement was duly authorized and approved by the City Council of the
City of Beaumont as of the date specified on the first page hereof.
/s/ William E. Neild
Mayor
City of Beaumont, Texas
ATTEST:
/s/ Myrtle Coraey
City Secretary
City of Beaumont, Texas
19
1e-1_S 4,-7
APPENDIX A
Economic and Demographic Characteristics
The following information has been derived from various sources, including the Texas
Almanac, Texas Municipal Reports, Beaumont Chamber of Commerce, 01984 Sales & Marketing
Management's Survey of Buying Power", and municipal officials. While such sources are
believed to be reliable, no representation is made as to the accuracy thereof.
General
The City of Beaumont, the county seat of Jefferson County, is located ninety miles
east of Houston and thirty-five miles from the Gulf of Mexico on the banks of the Neches
River. The City is the center of one of the State's largest refining and petrochemical
complexes, ranks second among Texas ports in total ship tonnage and is the industrial and
commercial center for more than a quarter of a million people with 2,288 business
establishments rated by Dun & Bradstreet.
Located within the City are a total of ten banks: Allied Bank-Beaumont, Beaumont
Bank, N.A., First City Bank Central (formerly called First Security Central Bank), First
City Bank-Gateway, N.A. (formerly called Gateway National Bank), First City National Bank
of Beaumont (formerly called First Security Bank of Beaumont, N.A.), InterFirst Bank
Beaumont, Lamar State Bank, Parkdale Bank, Texas Bank of Beaumont, and Texas Commerce
Bank-Beaumont with total combined deposits of $1,056,479,305 as of December 31, 1983, up
from $973,561,818 of a year earlier.
Port of Beaumont
(Source: Port of Beaumont Navigation District)
The Port of Beaumont's public wharves are operated by the Port of Beaumont Navigation
District. The District operates ten ship berthing positions along a total of 5,900 feet
of dockage on the west bank of the Neches River just east of Beaumont's central business
district. The Port of Beaumont Navigation District reported the 1984 calendar year total
tonnage at the Port amounted to 3,694,991, with 3,304,393 tons being moved through the
grain elevator and 390,598 tons being moved over the wharves and docks. The U.S. Army
Corps of Engineers reported the total tonnage, including tonnages moving through the Gulf
Intracoastal Waterway, in both public and private wharves and docks amounted to 33,286,791
in tons in 1982. Besides its bulk and liquid cargo, the Port also features a 3.5 million
bushel capacity grain elevator, a two million gallon bulk liquid tank terminal , a 500-ton
floating crane, a 60-ton gantry crane and a 220-ton truck crane.
Lamar University
(Source: Beaumont Chamber of Commerce)
Lamar University is a state supported institution founded in 1923. This four-year
university has an annual enrollment of more than 14,500 students and a fulltime faculty of
more than 400. Lamar offers bachelor degrees in 60 fields, master degrees in 22, and a
doctorate of engineering. The main campus in the southern part of Beaumont comprises
approximately 300 acres with 74 permanent buildings.
Building Permits -
(Source: Beaumont Chamber of Commerce)
Year Number of Permits Value
1984 6,082 $118,390,929
1983 5,639 166,745,039
1982 4,529 135,523,688
1981 4,208 97,381,921
1980 4,489 134,529,794
1979 4,235 87,180,947
1978 3,973 104,551,375
1977 3,773 82,041,729
1976 3,954 52,482,355
1975 3,985 46,409,957
1974 3,209 35,911,286
1973 3,703 40,010,289
1972 3,749 32,477,965
1971 3,133 23,399,896
1970 2,760 13,848,332
�s-67
f �F Major Employers -
The following is . listing of some of the companies sated in the City or in one of
the City's industrial districts. Employment range and relevant products have been obtained
from the Beaumont Chamber of Commerce and the J 984 D�vrectory of Texas Manufacturers.
Approximate
Name Product Range
American Valve & Hydrant
Manufacturing Co. - --Iron gate;,°swing check valves, fire hydrants 250-499
Babin Machine Works Automatic indexing bolt circle drilling machines 50-99
Beaumont Coca-Cola Bottling Co. Soft drinks 100-249
Beaumont Enterprise-Journal Newspapers 250-499
Beaumont Rice Mills Inc. Rice milling 50-99
Beaumont Steel Inc. Structural steel fabrication 50-99
Beaumont Well Works Forgings 100-249
Bethlehem Steel Corp. Ship repair, barge construction, offshore drilling
equipment - 1,000-4,999
Big Three Industries Inc. Nitrogen, oxygen, argon 25-49
Borden Inc. Milk processing 50-99
Carlin Mfg. & Distributing Inc. Wire seat springs, sheet metal & wooden parts
for antique cars 25-49
Consolidated Switchgear & Electrical switch gear; electronic industrial
Electrical Systems Inc. controls 25-49
John Dollinger Jr. Inca Fabricators of structural and plate steel 100-249
Dresser Industries Inc. Oilfield drilling equipment and supplies 500-999
E.I. DuPont deNemours b Co. Inc. Feed supplement, synthetic rubber, hydrocarbon
rubber, ammonia, methanol 500-999
Entex Natural gas distribution 108
North Star Steel Corp. Carbon rods, metal materials 500-999
Goodyear Tire & Rubber Co. Synthetic rubber & adhesives 500-999
Gulf Coast Machine & Supply Industrial forgings 250-499
Gulf States Utilities Co. Electric utility 3,250 (1)
Helena Laboratories Medical laboratory inorganic reagents, electro-
medical equipment 100-249
International Galvanizers Inc. Hot-dip galvanizing 25-49
J & J Mfg. Co. Loader-stackers; automatic packaging machines 25-49
Keown Supply Co. Hot & cold asphalt mix 50-99
Mabry Foundry & Supply Ductile, iron & steel castings iron pipe,
valves & fittings 50-99
Marine & Industrial Electrical
Service Company Switchboard panels for ships, electric motors 100-249
Metalforms Inc. Pressure vessels, heat exchangers & steam drums 50-99
Mobil Chemical Co, Paints & enamels 50-99
Mobil Oil Corporation Petroleum refining 1,000-4,999
Mobil Chemical Company Ethylene, butadiene, propylene benzane, totuene,
urea 100-249
Modern Inc. Post hole diggers, agricultural machinery 100-249
National Concrete Products Concrete pipe & septic tanks 25-49
OCB Metal Inc. Forgings, castings & machine work, heat treating
welding 100-249
Ohmstede Machine Works Inc. Heat exchangers, pressure vessels 100-249
Olin Corporation Chemical Division Sulphuric acid, ammonium sulfate 50-99
Pennwalt Corporation Ethyl, methyl mercaptan 25-49
Pepsi-Cola Bottling Co. Soft drinks 25-49
PPG Industries, Inc Tetraethyl, ethylene, glycol, ethylene oxide 250-499
Pyramind Concrete Pipe Co. Concrete pipe & box culverts 25-49
Rainbo Baking Co. of Beaumont Bread & bakery products 100-249
Rogers Enterprises Inc. Prescription eyeglasses & contact lenses 250-499
Rosenthal's Inc. Upholstered furniture 25-49
Seal Mfg. & Supply Co. Wooden office cabinets; store & bank fixtures 25-49
Smith Bros. Machine Works Precision machining 25-49
Smith Material Corp. of Beaumont Ready-mixed concrete 25-49
Southern Avionics Co. Inc. Radio beacon transmitters & mast-type antennas 25-49
Southern States Steel Co. Steel reinforcing bars 25-49
Texas Metal Works Inc. Steel flanges, forgings 100-249
Threaded Steel Products Steel bolts & fasteners 50-99
Velsicol Chemical Corp. Banvel herbicide 100-249
Zummo Meat Co. Inc. Slaughtering, processed meat, sausages 25-49
1 Total employment in the Beaumont-Port Arthur-Orange SMSA.
Statistical Data
- City and County SMSA Statistics
The following are various statistical analyses of the City, Jefferson County, and the
Beaumont - Port Arthur Standard Metropolitan Statistical Area extracted from "Sales &
Marketing Management - 1984 Survey of Buy"ing Power; Copyright -'1984 Sales & Marketing
Management Survey of Buying Power: further reproduction is forbidden.
Beaumont-
Port Arthur
The City Jefferson County SMSA
Population (12-31-83) 125,400 259,500 397,900
Median Age (years) 30.6 31.2 30.8
% 18-24 13.5 13.0 12.4
% 25-34 17.6 16.4 16.3
% 35-49 16.1 16.7 17.6
% 50 & over 26.1 27.1 25.5
Number of Households 46,200 94,400 141,200
Retail Sales (1983) ($1,000's)
Food $212,484 $399,940 $557,279
Eating, Drinking 132,234 185,147 214,751
General Merchandise 214,796 245,747 284,028
Furniture, Furnishings,
Appliances 73,461 94,254 114,752
Automotive 221,454 341,257 475,703
Drugs 16,136 50,836
Total Retail Sales 1,165,921 1,800,250 2,413,961
Effective Buying Income (1983)
Total Effective Buying
Income ("EBI") ($1,000's) $1,312,159 $2,737,280 $4,075,460
Median Household EBI S 24,509 $ 26,347 S 26,953
% Households EBI
$10,000 - $19,999 20.7 19.3 18.6
$20,000 - $34,999 26.9 28.6 30.1
$35,000 - $49,999 19.0 20.6 21.4
$50,000 & Over 12.4 12.0 11.5
- Growth Indicators -
(Source: Beaumont Chamber of Commerce)
1950 1960 1970 1980
Bank Deposits $103,200,072 $158,309,066 $301,705,224 $932,814,787
Savings & Loan Deposits S 5,446,690 S 51,398,527 $128,527,595 $561,229,967
Electric Meters 28,312 399285 42,835 44,859
Gas Meters 23,078 34,509 35,295 36,391
Water Meters (a) 20,$83 32,357 36,975 41,423
Telephones 24,118 56.,155 74,463 103,045
Population 94,024 119,175 117,548 118,031
a rove e y the City's Waterworks Department.
This Official Notice of Sale does not alone constitute an offer
to sell but is merely notice of sale of the bonds described herein.
The offer to sell such bonds is being made by means of this Official
Notice of Sale, the Official Bid Form and the Preliminary Official Statement.
OFFICIAL NOTICE OF SALE
THE CITY OF BEAUMONT
(A home rule city of the State of Texas located within Jefferson County)
$20,000,000
STREET AND DRAINAGE IMPROVEMENT BONDS
Series 1985
And
$12,000,000
WATER SYSTEM AND SANITARY
LANDFILL CERTIFICATES OF OBLIGATION
Series 1985
Sealed Bids Will Be Received
Tuesday, March 12, 1985, until 1:00 P.M.
Central Standard Time
EXHIBIT "C"
OFFICIAL NOTICE OF SALE
$20,000,000
STREET AND DRAINAGE,'IMPROVEMENT BONDS
SERIES 1985
THE SALE
Bonds Offered for Sale at Competitive Bid:
rfi—e-7—i y C ounce a ounce of the City of Beaumont (the "City" ), a home rule
city of the State of Texas located within Jefferson County, is offering for sale at
competitive bid $20,000,000 Street and Drainage Improvement Bonds, Series 1985 (the
"Bonds" ).
Bid Opening:
TFie__C__o_uncil will open and publicly read sealed bids for the purchase of the Bonds at
the City Hall, 801 Main Street, Beaumont, Texas, at 1:00 P. M., Central Standard Time, on
Tuesday, March 12, 1985. Sealed bids, which must be submitted on the Official Bid Form
and plainly marked "Bid for Bonds," should be addressed to "Mayor and City Council, City
of Beaumont, Texas," and should be delivered to the above address prior to the above
scheduled time for bid opening. Any bid received after such scheduled time for bid
opening will not be accepted and will be returned unopened.
Award of the Bonds:
The City wi 1 take action to adopt an ordinance (the "Bond Ordinance" ) authorizing the
issuance and awarding sale of the Bonds promptly after the opening of bids. The City
reserves the right to reject any and all bids and to waive any irregularities, except time
of filing.
THE BONDS
Description of Certain Terms of the Bonds:
The Bonds will a dated March 1, 1985, and interest will be paid on September 1, 1985,
and on each March 1 and September 1 thereafter until the earlier of payment or redemp-
tion. The principal and semi-annual interest will be payable at the principal corporate
trust office of the , Houston, Texas,
the paying agent/registrar (the "Registrar" ). Principal of e on s will be payable to
the registered owner at maturity or redemption upon presentation to the Registrar.
Interest on the Bonds will be payable by check or draft, dated as of the interest payment
date, and mailed by the Registrar to the registered owner as shown on the records of the
Registrar on the 15th calendar date of the month next preceding each interest payment date
(the "Record Date" ). The Bonds will mature on September 1, in each year as follows:
Principal Principal
Year Amount Year Amount
1987 100,000 1995 400,000
1988 700,000 1996 400,000
1989 200,000 1997 1,000,000
1990 100,000 1998 2,400,000
1991 -0- 1999 3,600,000
1992 200,000 2000 3,800,000
1993 200,000 2001 3,800,000
1994 500,000 2002 2,600, 000
The Bonds maturing on or after September 1, 1999 re subject to redemption, at the
option of the City, in whole or in part, on September 1, 1998, ar on any interest payment
date thereafter, at the par value thereof, plus acr_rued interest to the date fixed for
redemption. If less than all the Bonds are redeemed within a stated maturity at any time,
the Bonds or portions thereof to be redeemed shall be selected by the City in multiples of
$5,000 within any one maturity. The registered owner of any Bond, all or a portion of
which has been called for redemption, shall be required to present same to the Registrar
for payment of the redemption price on the portion of the Bond so called for redemption
and issuance of a new Bond in the principal amount equal to the portion of the Bond not
redeemed.
Security for Payment:
e Bonds when issued shall constitute valid and binding obligations of the City
payable both as to principal and interest from the proceeds of a continuing, direct annual
ad valorem tax, levied within the limits prescribed by the law, against taxable property
located within the City.
CONDITIONS OF SALE
Types of Bids and Interest Rates:
The Bonds wi I I be sol d in one block on an "all or none" basis, at a price of not less
than -the pare-value thereof plus accrued interest to the date of delivery. Bidders are
invited to name the rates of interest to be borne by the Bonds, provided that each rate
bid must be in a multiple of 1/8th of 1% or 1/20th of 1%, and further provided that the
highest stated interest rate bid must not exceed the lowest stated interest rate bid by
more than 2% in stated interest rate. No limitation will be imposed upon bidders as to
the number of rates or stated interest changes which may be used; however, all bonds of
one maturity must bear one and the same rate. No bids involving supplemental interest
rates will be considered. Each bidder shall state in his bid the net and total interest
cost in dollars and the effective interest rate determined thereby, which shall be
considered informative only and not as a part -of the bid.
Basis of Award:
For the purpose of awarding the Bonds, the interest cost of each bid will be computed
by determining, at the rates specified therein, the total dollar value of all interest on
the Bonds from the date thereof to their respective maturities, and subtracting therefrom
the premium, if any. Subject to the City's right to reject any or all bids, the Bonds
will be awarded to the bidder (the "Purchaser" ) whose bid, under the above computation,
produces the lowest net interest cost to the City. In the event of mathematical
discrepancies between the stated interest rates bid and the interest cost determined
therefrom, as both appear on the Official Bid Form, the bid will be governed solely by the
stated interest rates named.
Good Faith Deposit:
Each bid must be accompanied by a bank cashier' s check payable to the order of "City
of Beaumont", in the amount of $400,000. This check will be considered as a Good Faith
Deposit, and the check of the Purchaser will be retained uncashed by the City pending the
Purchaser's compliance with the terms of his Official Bid Form and the Official Notice of
Sale. In the event the Purchaser should fail or refuse to take up and pay for the Bonds
in accordance with his bid, then the check shall be cashed and accepted by the City as
full and complete liquidated damages. The above mentioned cashier' s check may accompany
the Official Bid Form or it may be submitted separately; if submitted separately, it shall
be made available to the City prior to the opening of the bids and shall be accompanied by
instructions by the bank on which it is drawn which authorize its use as a Good Faith
Deposit by the Purchaser, who shall be named in such instructions. Unless otherwise
stipulated, the Good Faith Deposit will be cashed and applied to the purchase price of the
Bonds on the date of the delivery of the Bonds. No interest will be allowed on the Good
Faith Deposit. The checks accompanying bids other than the Purchaser's bid will be
returned immediately after the bids are opened and an award of the Bonds has been made.
Financial Advisor' s Right to Bid:
The City hereby authorizes Underwood, Neuhaus & Co. Incorporated, the Financial
Advisor, to bid on the Bonds.
DELIVERY AND ACCOMPANYING DOCUMENTS
Del i�ver_x of Initial Bonds:
Delivery will be ;accomplished by the issuance of one Bord for each maturity (the
"Initial Bonds" ), either in typed or printed form, in the aggregate principal amount of
$20,000,000, payable to the Purchaser, signed by the Mayor and City Secretary of the City
with their manual or facsimile signatures, approved by the Attorney General, and
registered by the Comptroller of Public Accounts. Initial Delivery will be at the
corporate trust office of the Registrar. Payment for the Initial Bonds must be made in
immediately available funds for unconditional credit to the City, or as otherwise directed
by the City. The Purchaser will be given six business days' notice of the time fixed for
delivery of the Initial Bonds. It is anticipated that Initial Delivery can be made on or
about April 15, 1985, and it is understood and agreed that the Purchaser will accept
delivery and make payment for the Initial Bonds by 10:00 A.M. Central Standard Time on or
about April 15, 1985, or thereafter on the date the Bonds are tendered for delivery, up to
and including May 15, 1985. If for any reason the City is unable to make delivery on or
before May 15, 1985, then the City shall immediately contact the Purchaser and offer to
allow the Purchaser to extend his offer for an additional thirty days. If the Purchaser
does not elect to extend his offer within six days thereafter, then his Good Faith Deposit
will be returned, and both the City and the Purchaser shall be relieved of any further
obligation.
Ratings :
The City has made application for a municipal Bond rating to both Moody's Investors
Service, Inc. and Standard & Poor's Corporation.
ii
Exchange of Initial Bends:
I f the Purchaser furnishes to the Regi st,rar, at, least five days prior to the I ni ti al,
Delivery, written instructions designvating , the names in which the Bonds are to be
registered, the addresses of the registered owners, the maturities, interest rates and
denominations of such Bonds, the Registrar shall, on the date of initial delivery,
authenticate and deliver in exchange for the Initial Bonds, Bonds registered in accordance
with such instructions in an aggregate principal amount equal to the principal amount of
-the Initial ,Bonds. ,
If, at the time set for closing, the Purchaser has provided the Registrar the
required five days', notice of its registration instructions, the Purchaser shall not be
required to pay for the Initial Bonds until the Registrar is able to deliver to the
Purchaser, definitive, registered Bonds conforming to the Purchaser's bid and registration
instructions.
Registration:
The Bonds. -are . transferable only on the Bond register kept by the Registrar upon
surrender and reissuance. The Bonds are exchangeable for an equal principal amount of
Bonds of the same maturity in any authorized denomination upon surrender of the Bonds to
be exchanged at the principal corporate trust office of the Registrar. The City is not
required (1) to issue, transfer, or exchange any Bond during the period beginning at the
opening of business 15 days before the date of the first mailing of a notice of redemption
of Bonds and ending at the close of business on the day of such mailing or (2) to transfer
any Bonds selected for redemption, if such redemption is to occur within thirty calendar
days. No service charge will be made for any transfer or exchange, but the City may
require payment of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
CUSIP Numbers:
It is anticipated that CUSIP identification numbers will be printed on the Bonds, but
neither the failure to print such number on any Bond nor any error with respect thereto
shall constitute cause for failure or refusal by the Purchaser to accept delivery of and
pay for the Bonds in accordance with the terms of the Official Notice of Sale. All
expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the
City; however, the CUSIP Service Bureau charge for the assignment of the numbers shall be
the responsibility of and shall be paid by the Purchaser.
Conditions to Delivery:
The Purchaser' s obligation to take up and pay for the Bonds is subject to receiving
the approving legal opinions, the no-litigation certificate and the nonoccurrence of the
events indicated under "No Material Adverse Change" as described below.
Legal Opinion:
The City will furnish to the Purchaser a transcript of certain certified proceedings
held incident to the authorization and issuance of the Bonds, including a certified copy
of the approving opinion of the Attorney General of Texas, as recorded in the Bond
Register of the Comptroller of Public Accounts of the State of Texas, to the effect that
the Bonds are valid and binding obligations of the City under the Constitution and laws of
the State of Texas. The City will furnish the approving legal opinion of Vinson & Elkins,
Bond counsel for the City ("Bond Counsel" ), to the effect that, based upon an examination
of such transcript, the Bonds are valid and binding obligations of the City under the
Constitution and laws of the State of Texas and to the effect that the interest on the
Bonds is exempt from all present federal income taxation under existing statutes, .
regulations, published rulings and court decisions. The legal opinion of Bond Counsel
will further state that the Bonds are payable both as to principal and interest, from the
levy of ad valorem taxes, levied within the limits prescribed by law, against taxable
property within the City. The opinion of Bond Counsel is expected to be reproduced on the
back panel of the Bonds over a certificate, attesting that the legal opinion was dated as
of the date of delivery and payment for the Bonds and that the copy is a true and correct
copy of the original opinion. The failure to print such legal opinion on any Bond shall
not constitute cause for failure or refusal by the Purchaser to accept delivery of and pay
for the Bonds.
Vinson & Elkins did not take part in the preparation of the Preliminary Official
Statement nor has such firm undertaken to independently verify any of the information
contained therein, except that, in their capacity as Bond Counsel, such firm has reviewed
the information concerning the description of the Bonds appearing therein to verify that
such description conforms to the provisions of the Bond Ordinance.
No-Litigation Certificate:
The City wi urnish to the Purchaser a certificate, dated as of the date of
delivery of the Bonds, executed by both the Mayor and City Secretary, to the effect that
no litigation of any nature is then pending or threatened, either in state or federal
courts, contesting or attacking the Bonds; restraining or enjoining the issuance,
execution or delivery of the Bonds; affecting the provisions made for the payment of or
security for the Bonds; in any manner questioning the authority or proceedings for the
issuance, execution, or delivery of the Bonds; or affecting the validity of the Bonds.
iii
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No Material Adverse Change:
The obligation of the Purchaser to take; up and, pay for the Bonds, and of the City to
deliver the Bonds, is subject to the condition that, at the time of delivery of and
receipt of payment for the Bonds, there shall have been no material adverse change in the
condition (financial or otherwise) of the City from that set forth or contemplated in the
Preliminary Official Statement, as it may have been supplemented or amended through the
date of sale.
GENERAL CONSIDERATIONS
Certification as to Official Statement:
At the time of payment for an elivery of the Bonds, the Purchaser will be furnished
a certificate executed by an appropriate official of the City, acting in his official
capacity, to the effect that to the best of his knowledge and belief: (a) the
descriptions and statements pertaining to the City contained in its Preliminary and final
-Official- Statements, on the respective dates of such statements, on the date of sale of
the Bonds and the acceptance of the bid therefor, and on the date of delivery of the
Bonds, did not and do not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and (b) as
of the date of delivery of the Bonds, there have been no material adverse changes in the
City' s financial condition and affairs since the date of the Preliminary and final
Official Statements. Such certificate shall not cover any information contained in
APPENDIX A to the Preliminary and final Official Statements or relating to taxing
jurisdictions other than the City, or stated to have been obtained from sources other than
City records or to information supplied to the City by the Purchaser for inclusion into
the Preliminary and final Official Statements. In rendering such certificate, the person
executing the certificate may state that he has relied in part on his examination of the
records of the City relating to matters within his own area of responsibility, and his
discussions with, or certificates or correspondence signed by, certain other officials,
employees, consultants and representatives of the City as to matters not within his area
of responsibility.
Securities Laws:
For the purposes of the securities laws of certain jurisdictions, the City is
restricting its solicitation of bids in Nebraska to registered Nebraska dealers and in New
York, North Dakota, Ohio, Rhode Island and Vermont to the registered dealers, banks,
savings institutions, trust companies, insurance companies and institutional buyers in
those states. The City has made no investigation, and the above should not be construed
as creating any implication, regarding the eligibility to purchase or participate in the
underwriting of the Bonds under any applicable legal investment, insurance, banking or
other laws which might govern the ability of such institutions to underwrite or invest in
the Bonds.
By submission of its bid, the Purchaser represents that it is not a party described
in the preceding paragraph from whom bids are not solicited and that the sale of the Bonds
in states other than Texas will be made only pursuant to exemptions from registration or,
wherever necessary, the Purchaser will register the Bonds in accordance with the
securities laws of the state in which the Bonds are offered or sold. The City agrees to
cooperate with the Purchaser, at the Purchaser's written request and expense, in
registering the Bonds or obtaining an exemption from registration in any state where such
action is necessary.
Record Date:
The record date (the "Record Date" ) for the interest payable on any interest payment
date means the 15th calendar day of the month next preceding such interest payment date.
Official Statement:
Upon the sale of the Bonds, the Preliminary Official Statement will be amended to
conform to the terms of the Purchaser's bid and, if necessary, to make certain other
changes. In connection therewith, the Purchaser will be required to furnish information
concerning the initial resale offering prices and yields of the Bonds as well as the names
of the managing members of the syndicate. The Purchaser will be furnished with up to
fifty copies of the Official Statement within ten (10) business days from the date of
award of the sale of the Bonds or at such later date as may be mutually satisfactory, but
in no event later than the date of delivery of the Bonds. Additional copies will be made
available at the Purchaser' s request and expense. The City assumes no responsibility or
obligation for the distribution or delivery of any copies of the Official Statement to
anyone other than the Purchaser.
Additional Copies:
Additional copies of this Official Notice of Sale, the Official Bid Form and the
Preliminary Official Statement may be obtained from Underwood, Neuhaus b Co. Incorporated,
724 Travis, Houston, Texas 77002.
William E. Neild
Mayor, City of Beaumont
February 26, 1985 Beaumont, Texas
JOOC-6�--z
OFFICIAL BID FORM
Mayor and City Council
City of Beaumont
City Hall
801 Main Street
Beaumont, Texas
Gentlemen:
We have read in detail the Official Notice of Sale and accompanying Preliminary
Official Statement of The City of Beaumont (the "City" ), relating to its $20,000,000
Street and Drainage Improvement Bonds, Series 1985 (the "Bonds" ). We hereby offer to
purchase the Bonds, described in your Official Notice of Sale and Preliminary Official
Statement, upon the terms and conditions set forth in such Official Notice of Sale, which
terms and conditions are incorporated herein by reference for all purposes, for a price of
par value thereof, plus accrued interest, to the date the Bonds are delivered to us, plus
a cash premium of $ provided such Bonds bear interest at the following rates:
Maturity Interest Rate Maturity Interest Rate
9-1-1987 % 9-1-1995 %
9-1-1988 % 9-1-1996 %
9-1-1989 % 9-1-1997 %
9-1-1990 % 9-1-1998 %
9-1-1991 % 9-1-1999 %
9-1-1992 % 9-1-2000 %
9-1-1993 % 9-1-2001 %
9-1-1994 % 9-1-2002 X
Our calculation (which is not a part of this bid) of the interest cost from the above is:
Total Interest Cost From March 1, 1985. ... . .. . .. . .. . .. . .... . .. .... . $
Less: Cash Premium. . . . . . . .. . ... . . . .. . .... . .. . . . .... .. . ........ . ... $
NetInterest Cost. . . .. .. . . .. ... ... . .... ... . . . .. . . ... ... . . . .... . . . . . $
Net Effective Interest Rate.. .. . .. ..... ... .. . . .. ..... . . .. . . . .... . .. %
The Initial Bonds shall be registered in the name of
(syndicate manager). We will advise
Texas, Corporate Trust Division, the paying
agent/registrar The "Registrar7: of our registration instructions at least five business
days prior to the date set for Initial Delivery.
We agree to accept delivery of and make payment for the Bonds '.n immediately
available funds at the Corporate Trust Office, ,
Houston, Texas, not later than 10:00 A.M., Centra Standard Time, on or about April ,
1985, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms
set forth in the Notice of Sale and Bidding Instructions.
Cashier' s Check No. issued by ,
Bank, , Texas, an payable to your order in the amount o $400,000'
(is attached hereto as been made available to you prior to the opening of this Bid) or
a Good Faith Deposit for disposition in accordance with the terms and conditions set forth
herein and in the Official Notice of Sale. Should we fail or refuse to make payment for
the Bonds in accordance with such terms and conditions, this check shall be cashed and the
proceeds retained as complete liquidated damages against us. We hereby represent that
sale of the Bonds in states other than Texas will be made only pursuant to exemptions from
registration or qualification and where necessary, we will register or qualify the Bonds
in accordance with the securities laws of the states in which the Bonds are offered or
sold.
Respectfully submitted,
By
Authorized epresentative
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby in all things accepted by the City of Beaumont
this 12th day of March 1985.
ATTEST:
City Secretary, City of Beaumont Mayor, City of Beaumont
Return of $400,000 Good Faith Deposit is hereby acknowledged:
BOND YEARS
Dated: March 1, 1985 Due: September 1, Annually
Accumulated
Year Amount Bond Years Bond Years
1987 100,000 250.000 250.000
1988 700,000 2,450.000 2,700.000
1989 200,000 900.000 3,600.000
1990 100,000 550.000 4,150.000
1991 -0- -0- 4,150.000
1992 200,000 1,500.000 5,650.000
1993 200,000 1,700.000 7,350.000
1994 500,000 4,750.000 12,100.000
1995 400,000 4,200.000 16,300.000
1996 400,000 4,600.000 20,900.000
1997 1,000,000 12,500.000 33,400.000
1998 2,400,000 32,400.000 65,800.000
1999 3,600,000 52,200.000 118,000.000
2000 3,800,000 58,900.000 176,900.000
2001 3,800,000 62,700.000 239,600.000
2002 2,600,000 45,500.000 285,100.000
Total Bond Years: 285,100.OUO
Average Maturity: 14.255 years
OFFICIAL .NOTICE OF SALE
$12,000,000
WATER SYSTEM .AND SANITARY
LANDFILL CERTIFICATES OF OBLIGATION
SERIES 1985
THE SALE
Certificates Offered for Sale at Com etitive Bid:
e City Council (the ounce of e City of Beaumont (the "City"), a home rule
city of the State of Texas located within Jefferson County, is offering for sale at
competitive bid $12,000,000 Water System and Sanitary Landfill Certificates of Obligation,
Series 1985 (the "Certificates").
Bid 0 eni�ng_
-council will open and publicly read sealed bids for the purchase of the
Certificates at the -City Hall, 801 Main Street, Beaumont, Texas, at 1:00 P. M., Central
Standard Time, on Tuesday, March 12, 1985. Sealed bids, which must be submitted on the
Official Bid Form and plainly marked "Bid for Certificates," should be addressed to "Mayor
and City Council , City of Beaumont, Texas," and should be delivered to the above address
prior to the above scheduled time for bid opening. Any bid received after such scheduled
time for bid opening will not be accepted and will be returned unopened.
Award of the Certificates:
The City will take action to adopt an ordinance (the "Certificate Ordinance" )
authorizing the issuance and awarding sale of the Certificates promptly after the opening
of bids. The City reserves the right to reject any and all bids and to waive any
irregularities, except time of filing.
THE CERTIFICATES
Description of Certain Terms of the Certificates:
The Certificates w!TT__beated March 5, and interest will be paid on September
1, 1985, and on each March 1 and September 1 thereafter until the earlier of payment or
redemption. The principal and semi-annual interest will be payable at the principal
corporate trust office of the ,
Houston, Texas, the paying agent registrar the "Registrar" Principal of the
Certificates will be payable to the registered owner at maturity or redemption upon
presentation to the Registrar. Interest on the Certificates will be payable by check or
draft, dated as of the interest payment date, and mailed by the Registrar to the
registered owner as shown on the records of the Registrar on the 15th calendar date of the
month next preceding each interest payment date (the "Record Date" ). The Certificates
will mature on September 1, in each year as follows:
Principal Principal
Year Amount Year Amount
1986 $250,000 1995 $ 740,000
1987 275,000 1996 800,000
1988 300,000 1997 875,000
1989 325,000 1998 975,000
1990 350,000 1999 1,050,000
1991 400,000 2000 1,160,000
1992 550,000 2001 1,270,000
1993 610,000 2002 1,400,000
1994 670,000
The Certificates maturing on or after September 1, 1999 are subject to redemption, at
the option of the City, in whole or in part, on September 1, 1998, or on any interest
payment date thereafter, at the par value thereof, plus accrued interest to the date fixed
for redemption. If less than all the Certificates are redeemed within a stated maturity
at any time, the Certificates or portions thereof to be redeemed shall be selected by the
City in multiples of $5,000 within any one maturity. The registered owner of any
Certificate, all or a portion of which has been called for redemption, shall be required
to present same to the Registrar for payment of the redemption price on the portion of the
Certificate so called for redemption and issuance of a new Certificate in the principal
amount equal to the portion of the Certificate not redeemed.
Security for Payment:
The Certificates when issued shall constitute valid and binding obligations of the
City payable both as to principal and interest from the proceeds of a continuing, direct
annual ad valorem tax, levied within the limits prescribed by the law, against taxable
property located within the City and further payable from a junior and subordinate pledge
of the net revenues of the City's water system. The City reserves the right to issue
additional obligations payable from such revenues, which obligations may be senior to, on
a parity with or junior and subordinate to the payment of such revenues pledged to the
Certificates.
CONDITIONS OF SALE
T e ,of Bids and Interest Rates: ,.
The Certificates wi I 1 be sold in "one block on an "all or none" basis, at a price of
not less than the par value thereof plus accrued interest to the date of delivery.
Bidders are invited to name the rates of interest to be borne by the Certificates,
provided that each rate bid must be in a multiple of 1/8th of 1% or 1/20th of 1%, and
further provided that the highest stated interest rate bid must not exceed the lowest
stated interest rate bid by more than 2% in stated interest rate. No limitation will be
imposed upon_bidders__as to the number of rates or stated interest changes which may be
used; however, all certificates of one maturity must bear one and the same rate. No bids
involving supplemental interest rates will be considered. Each bidder shall state in his
bid the net and total interest cost in dollars and the effective interest rate determined
thereby, which shall be considered informative only and not as a part of the bid.
Basis of Award:
For the purpose of awarding the Certificates, the interest cost of each bid will be
computed by determining, at the rates specified therein, the total dollar value of all
interest on the Certificates from the date thereof to their respective maturities, and
subtracting therefrom the premium, if any. Subject to the City's right to reject any or
all bids, the Certificates will be awarded to the bidder (the "Purchaser" ) whose bid,
under the above computation, produces the lowest net interest cost to the City. In the
event of mathematical discrepancies between the stated interest rates bid and the interest
cost determined therefrom, as both appear on the Official Bid Form, the bid will be
governed solely by the stated interest rates named.
Good Faith Deposit:
Each bid must be accompanied by a bank cashier's check payable to the order of "City
of Beaumont", in the amount of $240,000. This check will be considered as a Good Faith
Deposit, and the check of the Purchaser will be retained uncashed by the City pending the
Purchaser's compliance with the terms of his Official Bid Form and the Official Notice of
Sale. In the event the Purchaser should fail or refuse to take up and pay for the
Certificates in accordance with his bid, then the check shall be cashed and accepted by
the City as full and complete liquidated damages. The above mentioned cashier' s check may
accompany the Official Bid Form or it may be submitted separately; if submitted
separately, it shall be made available to the City prior to the opening of the bids and
shall be accompanied by instructions by the bank on which it is drawn which authorize its
use as a Good Faith Deposit by the Purchaser, who shall be named in such instructions.
Unless otherwise stipulated, the Good Faith Deposit will be cashed and applied to the
purchase price of the Certificates on the date of the delivery of the Certificates. No
interest will be allowed on the Good Faith Deposit. The checks accompanying bids other
than the Purchaser' s bid will be returned immediately after the bids are opened and an
award of the Certificates has been made.
Financial Advisor' s Right to Bid:
The City hereby authorizes Underwood, Neuhaus & Co. Incorporated, the Financial
Advisor, to bid on the Certificates.
DELIVERY AND ACCOMPANYING DOCUMENTS
Deliverx of Initial Certificates:
Delivery will a accomp is ed by the issuance of one Certificate for each maturity
(the "Initial Certificates"), either in typed or printed form, in the aggregate principal
amount of $12,000,000, payable to the Purchaser, signed by the Mayor and City Secretary of
the City with their manual or facsimile signatures, approved by the Attorney General, and
registered by the Comptroller of Public Accounts. Initial Delivery will be at the
corporate trust office of the Registrar. Payment for the Initial Certificates must be
made in immediately available funds for unconditional credit to the City, or as otherwise
directed by the City. The Purchaser will be given six business days' notice of the time
fixed for delivery of the Initial Certificates. it is anticipated that Initial Delivery
can be made on or about April 15, 1985, and it is understood and agreed that the Purchaser
will accept delivery and make payment for the Initial Certificates by 10:00 A.M. Central
Standard Time on or about April 15, 1985, or thereafter on the date the Certificates are
tendered for delivery, up to and including May 15, 1985. If for any reason the City is
unable to make delivery on or before May 15, 1985, then the City shall immediately contact
the Purchaser and offer to allow the Purchaser to extend his offer for an additional
thirty days. If the Purchaser does not elect to extend his offer within six days
thereafter, then his Good Faith Deposit will be returned, and both the City and the
Purchaser shall be relieved of any further obligation.
ThRatin s:
e City has made application for a municipal Certificate rating to both Moody' s
Investors Service, Inc. and Standard & Poor' s Corporation.
Exchange of Initial Certificates:
If the Purchaser furnishes to the Registrar, at least five days prior to the Initial
Delivery, written instructions designating the names in which the Certificates are to be
registered, the addresses of the registered owners, the maturities, interest rates and
ii
denominations of su, Certificates, the Registrar shall . ,n the date of initial delivery,
authenticate and deliver in exchange for the Initial Certificates, Certificates registered
in accordance with such instructions. in iA aggYegate principal amount equal to tNe
principal amount of the Initial Certificates.
If, at the time set for closing, the Purchaser has provided the Registrar the
required five days' notice of its registration instructions, the Purchaser shall not be
required to pay for the Initial Certificates until the Registrar is able to deliver to the
Purchaser, definitive, registered Certificates conforming to the Purchaser's bid and
registration instructions.
Registration:
The Certificates are transferable only on the Certificate register kept by the
Registrar upon surrender and reissuance. The Certificates are exchangeable for an equal
principal amount of Certificates of the same maturity in any authorized denomination upon
surrender of the Certificates to be exchanged at the principal corporate trust office of
the Registrar. The City is not required (1) to issue, transfer, or exchange any
Certificate during the period beginning at the opening of business 15 days before the date
of the first mailing of a notice of redemption of Certificates and ending at the close of
business on the day of such mailing or (2) to transfer any Certificates selected for
redemption, if such redemption is to occur within thirty calendar days. No service charge
will be made for any transfer or exchange, but the City may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection therewith.
CUSIP Numbers:
It is anticipated that CUSIP identification numbers will be printed on the
Certificates, but neither the failure to print such number on any Certificate nor any
error with respect thereto shall constitute cause for failure or refusal by the Purchaser
to accept delivery of and pay for the Certificates in accordance with the terms of the
Official Notice of Sale. All expenses in relation to the printing of CUSIP numbers on the
Certificates shall be paid by the City; however, the CUSIP Service Bureau charge for the
assignment of the numbers shall be the responsibility of and shall be paid by the
Purchaser.
Conditions to Delivery:
The Purchaser' s obligation to take up and pay for the Certificates is subject to
receiving the approving legal opinions, the no-litigation certificate and the
nonoccurrence of the events indicated under "No Material Adverse Change" as described
below.
Legal Opinion:
The GitT will furnish to the Purchaser a transcript of certain certified proceedings
held incident to the authorization and issuance of the Certificates, including a certified
copy of the approving opinion of the Attorney General of Texas, as recorded in the
Certificate Register of the Comptroller of Public Accounts of the State of Texas, to the
effect that the Certificates are valid and binding obligations of the City under the
Constitution and laws of the State of Texas. The City will furnish the approving legal
opinion of Vinson & Elkins, bond counsel for the City ("Bond Counsel" ), to the effect
that, based upon an examination of such transcript, the Certificates are valid and binding
obligations of the City under the Constitution and laws of the State of Texas and to the
effect that the interest on the Certificates is exempt from all present federal income
taxation under existing statutes, regulations, published rulings and court decisions. The
legal opinion of Bond Counsel will further state that the Certificates are payable both as
to principal and interest, from the levy of ad valorem taxes, levied within the limits
prescribed by law, against taxable property within the City and further payable from a
junior and subordinate pledge of the net revenues of the City's water system. The opinion
of Bond Counsel is expected to be reproduced on the back panel of the Certificates over a
certificate, attesting that the legal opinion was dated as of the date of delivery and
payment for the Certificates and that the copy is a true and correct copy of the original
opinion. The failure to print such legal opinion on any Certificate shall not constitute
cause for failure or refusal by the Purchaser to accept delivery of and pay for the
Certificates.
Vinson & Elkins did not take part in the preparation of the Preliminary Official
Statement nor has such firm undertaken to independently verify any of the information
contained therein, except that, in their capacity as Bond Counsel, such firm has reviewed
the information concerning the description of the Certificates appearing therein to verify
that such description conforms to the provisions of the Certificate Ordinance.
NO-Litigation Certificate:
The City will urnish to the Purchaser a certificate, dated as of the date of
delivery of the Certificates, executed by both the Mayor and City Secretary, to the effect
that no litigation of any nature is then pending or threatened, either in state or federal
courts, contesting or attacking the Certificates; restraining or enjoining the issuance,
execution or delivery of the Certificates; affecting the provisions made for the payment
of or security for the Certificates; in any manner questioning the authority or
proceedings for the issuance, execution, or delivery of the Certificates; or affecting the
validity of the Certificates.
iii
No Material Adverse iian _e_:
The obli-gction of Purchaser to take«up arad pay for the Certificates, and of thg
Cityh to deliver the Certificates, is' subject to the condition that, at the time of
delivery of and receipt of payment for the Certificates, there shall have been no material
adverse change in the condition (financial or otherwise) of the City from that set forth
or contemplated in the Preliminary Official Statement, as it may have been supplemented or
amended through the date of sale.
GENERAL CONSIDERATIONS
Certification as to Official Statement:
At the time of payment for an delivery of the Certificates, the Purchaser will be
furnished a certificate executed by an appropriate official of the City, acting in his
official capacity, to the effect that to the best of his knowledge and belief: (a) the
descriptions and statements pertaining to the City contained in its Preliminary and final
Official Statements, on the respective dates of such statements, on the date of sale of
the Certificates and the acceptance of the bid therefor, and on the date of delivery of
the Certificates, did not and do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; and (b) as of the date of delivery of the Certificates, there have been no
material adverse changes in the City's financial condition and affairs since the date of
the Preliminary and final Official Statements. Such certificate shall not cover any
information contained in APPENDIX A to the Preliminary and final Official Statements or
relating to taxing jurisdictions other than the City, or stated to have been obtained from
sources other than City records or to information supplied to the City by the Purchaser
for inclusion into the Preliminary and final Official Statements. In rendering such
certificate, the person executing the certificate may state that he has relied in part on
his examination of the records of the City relating to matters within his own area of
responsibility, and his discussions with, or certificates or correspondence signed by,
certain other officials, employees, consultants and representatives of the City as to
matters not within his area of responsibility.
Securities Laws:
For the purposes of the securities laws of certain jurisdictions, the City is
restricting its solicitation of bids in Nebraska to registered Nebraska dealers and in New
York, North Dakota, Ohio, Rhode Island and Vermont to the registered dealers, banks,
savings institutions, trust companies, insurance companies and institutional buyers in
those states. The City has made no investigation, and the above should not be construed
as creating any implication, regarding the eligibility to purchase or participate in the
underwriting of the Certificates under any applicable legal investment, insurance, banking
or other laws which might govern the ability of such institutions to underwrite or invest
in the Certificates.
By submission of its bid, the Purchaser represents that it is not a party described
in the preceding paragraph from whom bids are not solicited and that the sale of the
Certificates in states other than Texas will be made only pursuant to exemptions from
registration or, wherever necessary, the Purchaser will register the Certificates in
accordance with the securities laws of the state in which the Certificates are offered or
sold. The City agrees to cooperate with the Purchaser, at the Purchaser's written request
and expense, in registering the Certificates or obtaining an exemption from registration
in any state where such action is necessary.
Record Date:
The record date (the "Record Date") for the interest payable on any interest payment
date means the 15th calendar day of the month next preceding such interest payment date,
Official Statement:
Upon the sale of the Certificates, the Preliminary Official Statement will be amended
to conform to the terms of the Purchaser's bid and, if necessary, to make certain other
changes. In connection therewith, the Purchaser will be required to furnish information
concerning the initial resale offering prices and yields of the Certificates as well as
the names of the managing members of the syndicate. The Purchaser will be furnished with
up to fifty copies of the Official Statement within ten (10) business days from the date
of award of the sale of the Certificates or at such later date as may be mutually
satisfactory, but in no event later than the date of delivery of the Certificates.
Additional copies will be made available at the Purchaser's request and expense. The City
assumes no responsibility or obligation for the distribution or delivery of any copies of
the Official Statement to anyone other than the Purchaser.
Additional Copies:
Additional copies of this Official Notice of Sale, the Official Bid Form and the
Preliminary Official Statement may be obtained from Underwood, Neuhaus & Co. Incorporated,
724 Travis, Houston, Texas 77002.
William E. Neild
Mayor, City of Beaumont
February 26, 1985 Beaumont, Texas
,e--�,-��
iv
a 9
OFFICIAL BID FORM
Mayor and City Council
City of Beaumont
City Hall
801 Main Street
Beaumont, Texas
Gentlemen:
We have read in detail the Official Notice of Sale and accompanying Preliminary
Official Statement of The City of Beaumont (the "City" ), relating to its $12,000,000 Water
and Sanitary Landfill Certificates of Obligation, Series 1985 (the "Certificates" ). We
hereby offer to purchase the Certificates, described in your Official Notice of Sale and
Preliminary Official Statement, upon the terms and conditions set forth in such Official
Notice of Sale, which terms and conditions are incorporated herein by reference for all
purposes, for a price of par value thereof, plus accrued interest, to the date the
Certificates are delivered to us, plus a cash premium of $ provided such
Certificates bear interest at the following rates:
Maturity Interest Rate Maturity Interest Rate
9-1-1986 % 9-1-1995 %
9-1-1987 % 9-1-1996 %
9-1-1988 % 9-1-1997 %
9-1-1989 % 9-1-1998 %
9-1-1990 % 9-1-1999 %
9-1-1991 % 9-1-2000 %
9-1-1992 % 9-1-2001 %
9-1-1993 % 9-1-2002 %
9-1-1994 %
Our calculation (which is not a part of this bid) of the interest cost from the above is:
Total Interest Cost From March 1, 1985. . .... ... . .. . .. . . . .. . . .. . . . .. $
Less: Cash Premium. . .. . . . . . . . .. . . . . . . . .. .. .. . . . .. . ... . . . . .. ..... .. $
NetInterest Cost. .. ... ..... . . .. ... . ... ... ... .. . ... .. . .. . ... ....... E
Net Effective Interest Rate. .. .. . . . . .. . .. . .. .... . .. .. . .. . ... .... . .. %
The Initial Certificates shall be -registered in the name of
(syndicate manager). We will advise __
Texas, Corporate Trust division, the payin
agen registrar a egistrar o our registration instructions at least five business
days prior to the date set for Initial Delivery.
We agree to accept delivery of and make payment for the Certificates in immediately
available funds at the Corporate Trust Office, ,
Houston, Texas, not later than 10:00 A.M., Central Standard Time, on or about Apra 5,
1985, or thereafter on the date the Certificates are tendered for delivery, pursuant to
the terms set forth in the Notice of Sale and Bidding Instructions.
Cashier's Check No. issued by ,
Bank, , Texas, an payable o your or er in a amount o 0
(is attached hereto) as been made available to you prior to the opening of this Bid) or
a Good Faith Deposit for disposition in accordance with the terms and conditions set forth
herein and in the Official Notice of Sale. Should we fail or refuse to make payment for
the Certificates in accordance with such terms and conditions, this check shall be cashed
and the proceeds retained as complete liquidated damages against us. We hereby represent
that sale of the Certificates in states other than Texas will be made only pursuant to
exemptions from registration or qualification and where necessary, we will register or
qualify the Certificates in accordance with the securities laws of the states in which the
Certificates are offered or sold.
N w .+ A Pp ApMM n
A
Respectfully submitted,
By
Authorized epresentative
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby in all things accepted by the City of Beaumont
this 12th day of March 1985.
ATTEST:
City Secretary, City of eaumon Mayor, City of eaumont
Return of $240,000 Good Faith Deposit is hereby acknowledged:
CERTIFICATE YEARS
Dated: March 1, 1985 Due: September 1, Annually
Accumulated
Year Amount Certificate Years Certificate Years
1986 $250,000 375.000 375.000.
1987 275,000 687.500 1,062.500
1988 300,000 1,050.000 2, 112.500
1989 325,000 1,462. 500 3,575.000
1990 350,000 1,925.000 5,500.000
1991 400,000 2,600.000 8,100.000
1992 550,000 4,125.000 12,225.000
1993 610,000 5,185.000 17,410.000
1994 670,000 6, 365.000 23,775.000
1995 740,000 7,770.000 31,545.000
1996 800,000 9,200.000 40,745.000
1997 875,000 10,937. 500 51,682.500
1998 975,000 13, 162.500 64,845.000
1999 1,050,000 15,225.000 80,070.000
2000 1, 160,000 17,980.000 98,050.000
2001 1,270,000 20,955.000 119,005.000
2002 1,400,000 24,500.000 143,505.000
Total Certificate Years: 143, 505.000
Average Maturity: 11.959 years
%
PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 26 1985
This Preliminary Official Statement is subject to completion and amendment and is
intended solely for the solicitation of initial bids to purchase the Bonds.
Upon the sale of the Bonds, the Official Statement will be completed
and delivered to the Purchaser.
THE ISSUANCE OF THE BONDS IS SUBJECT TO THE OPINION OF BOND COUNSEL TO THE EFFECT THAT
INTEREST ON THE BONDS IS EXEMPT FROM ALL PRESENT FEDERAL INCOME TAXATION UNDER EXISTING
STATUTES, REGULATIONS, PUBLISHED RULINGS AND COURT DECISIONS.
$20,000,000
THE CITY OF BEAUMONT
(A home rule city of the State of Texas located within Jefferson County)
STREET AND DRAINAGE IMPROVEMENT BONDS
SERIES 1985
Dated: March 1, 1985
Principal and interest payable at the principal corporate trust office of the
Texas, the paying agent/registrar (the "Registrar").
Interest payable September 1, 1965, and each March 1 and September 1 thereafter until the
earlier of payment or redemption. The Bonds are issued in fully registered form in
integral multiples of $5,000. Interest on the Bonds will be payable by check or draft,
dated as of the interest payment date, and mailed by the Registrar to registered owners as
shown on the records of the Registrar on the 15th calendar date of the month next
preceding each interest payment date (the "Record Date").
c
° MATURITY SCHEDULE
Due September
L Initial Initial
Interest Reoffering Interest Reofferin
s
Amount Maturity Rate Yield (a) Amount Maturity Rate Yield a
U
S100,ODO 1987 400,000 1995 % %
w 700,000 1988 400,000 1996
° 200,000 1989 1,000,000 1997
100,000 1990 2,400,000 1998
-0- 1991 3,600,000 1999 (b)
a, 200,000 1992 3,800,000 2000 (b)
•s 200,000 1993 3,800,000 2001 (b)
500,000 1994 2,600,000 2002 (b)
n
7-37 ha initial yields will be establi0wey` by and are the sole responsibility of the
Purchaser, and may subsequently be charged.
L (b) Bonds maturing September 1, 1999, through September 1, 2002, both inclusive, are
subject to redemption, at the option of the City, at the par value thereof plus
accrued interest, in whole or in part, on September 1, 1998, or on any interest
payment date thereafter. If less than all of the Bonds are redeemed within a stated
° maturity at any time, the Bonds to be redeemed shall be selected by the City in
.o
multiples of $5,000 within any maturity.
u
w The above bonds (the "Bonds") constitute the second installment of $33,000,000 Street
Improvement bonds and the first installment of $16,000,000 Drainage Improvement bonds
Cr authorized at seperate elections held for that purpose on April 5, 1980 and March 22,
1983, respectively. The Bonds, when issued, will constitute valid and binding obligations
0 of The City of Beaumont (the "City") and will be payable solely from the proceeds of an
c annual ad valorem tax, levied within the limits prescribed by law, against taxable
Property within the City.
q
PAYMENT RECORD: The City has never defaulted.
N
a BOND COUNSEL: Vinson & Elkins, Houston, Texas.
DELIVERY: When issued - anticipated on or about April 15, 1985.
Exhibit "B"
TABLE OF CONTENTS
Page
USE OF INFORMATION IN OFFICIAL STATEMENT... ....... . . . ..... .. ...... .. . ..... ..... .. .... 3
SALE AND DISTRIBUTION OF THE BONDS.. ... .. . ..... ... .. .. ...... .. . . . ..... . ... .. .... .... . 3
Sale of the Bonds..... ........ ......... ..... ............... ......... ..... .... . .. 3
Marketability.... .. ..... . .. .... ....... . ...... .. .. .. .. .. .... .. .... ...... .. . .. .. 3
Securities Laws.. ........ .................... . ... ......... .. . ... .... ... ... ...... 3
Ratings. . .... ... .... .. ........ ... ....... ..... . .. ................ .. 3
OFFICIAL STATEMENT SUMMARY. . ............. .... ...... ........... . .. ............. 4
THE CERTIFICATES.. . . .. .. .. ....... ...... .. . ... .. ........ .......... . . . 5
Description oftheCertificates............................. ..... ..... . ..... .. .. 5
Source of Payment. .. ... .. .. .... ......... .. .. ... 5
Authorization of the Bonds....... ... .......... ... . .......... ..... ..... ... . .... .. 5
Use of Bond Proceeds......... . .. ......... . .... .. .. .. .. .. ........ ...... .. .... .. .. 6
Future Borrowing... ........ . ... ... ............................ .......... ........ 6
NoArbitrage. . . . . ...................... ..... ................. . ... .... .. .. 6
LegalInvestments inTexas... .............. ........ . ... ....... .......... ..... ... 6
Remedies in the Event of Default.............. .. ...... .. .. .... .. ....... . ... . .... 7
PRO-FORMA DEBT SERVICE SCHEDULE................. ..... ............ .. ....... ......... .. 7
DEBT STATEMENT...... ... ... . ...... ................ .... .. .............. .. .... .... .. . ... 7
General . . ........ ....... . ............ . ........ .. . .. ...... ............ . .. 7
Bonded Indebtedness. ... .. . . .. .. ... ... . 8
... ... . ... ... . .. ..... . .. . . . . . . .. ..... . ..
Revenue Support of Ad Valorem Tax Bonds and Certificates of Obligation.. .. . . . ... 8
Estimated Overlapping Debt. .. ............... ........ .. .. .. ........ .. .... ...... . . 8
DebtRatios. .. .. .......................... . .. .. . ....... ........ ........... ... 8
TAXDATA. . . ... ... ........................ ... ....:...... .. ...... .. ...... .. .. .. ... . . 9
General. ... . .. .... . ..... .. ....... . . .......... .. . .... .. .. ... 9
Authority�for�Ad�Valorem�Taxation. ... ... .. .. ... . . ... . . .. .... . ..... . . .. .. .. . . .. . . 9
Historical Analysis of Ad Valorem Taxation.. . ....... ... . ............ . .... ..... .. it
Estimated Overlapping Taxes. ... ......... .. .. .. .... .. .. .... .. .. . . . . .... .. .. . . .. . . 12
SalesTax.. . ........ ....... . ...... . . .. ...... ..... .. . .. ... . .. . .. 12
Industrial District Contracts... .... . .. .. .. ....... .. .. .. . . ...... .. .. .. .. . .. .... . 13
Tax Increment Reinvestment Zone. .......... ....... . .......... . ..... .. ... ... ...... 13
SELECTED FINANCIAL DATA. ... .. . ... .. .. .. .. .. .... .. .. .. .. .. .. .. 14.
Historical Operations of�the�City's�General �Fund. . .. . ......... 14
... .... . . . . . . ...
General Fund and Debt Service Fund Balance for the Past Five Fiscal Years.... . .. 14
Financial Statements. ............. ..... ....... .. ... ... ... ... .. ... .... ... .. 14
ADMINISTRATION OF THE CITY........... . ........ ..... .. . ..... .. ......... ..... ..... 15
Mayor and City Council..... ............. .. . ....... . . ... . .. .... ... .. ........ ... .. 15
Administration. . .. . .. . ....... ........ .. .... .. ... ...... ... .... .......... .... .. ... 15
Consultants. .... .. . ..... ..... .... .. .... . . .... . .. ... . ..... ... .... . .. ... .. . .... ... 16
LITIGATION. . ..... .. ...... .... .. .. ..... ..... . .. .. .. . ....... ... . ... . . 16
LEGISLATION AND�REGULATION. . .. ...... .......... . ....... ....... a... ... ... .. ... ... .. 16
Affecting the City's Operations.... ......... .. .. ....... ... ...... .. .. .. .. .... .. .. 16
Affecting the Tax Base. . ............. . .... ......... ... ....... .......... . ..... .. . 17
SPECIAL CONSIDERATIONS. . ........... . ... .... ...... .............. .. .. .......... ... . . 17
Capital Improvements.... ..... ...... ............... . ........... .. . ...... ..... .. 17
Collective Bargaining... .. . .............. . .... .... .. ...... .. .... .. .. .. .. .... .. .. 18
Local Economic Conditions. .......................... ...... ................ .. . 18
LEGALMATTERS.. . . ........ .............. ............. ..... . ... . .... .. ..... .. .. 18
Legal Opinion. .. ..... ........... ......... .. ... .... ..... ......... .. . ..... .. 18
Nb-Litigation Certificate.... . ... ..... . .... . ......... . ......... .. ........ . . . .... 3.8 ..
GENERAL CONSIDERATIONS.. ..... . . ... .... ....................... ............. ... .. 19
Sources and Compilation of Information.. . .......... ..... ........ ... .... .. .. .. .. . 19
Certification as to Official Statement.............. .. ......... ..... ..... .. . 19
Updating of Official Statement. .... ........... ..... .. .... ...... .. .... ......... .. 19
APPENDIX A - ECONOMIC AND DEMOGRAPHIC CHARACTERISTICS
APPENDIX B - FINANCIAL STATEMENTS OF THE CITY
2
USE OF INFORMATION IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized to give any informa-
tion or to make any representation 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 City.
This Official Statement is not to be used in an offer to sell or the solicitation of
an offer to buy in any state in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
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 shalt, under any circumstances, create any implication that there has been no
change in the affairs of the City or other matters described herein since the date hereof.
SALE AND DISTRIBUTION OF THE BONDS
Sale of the Bonds:
After requesting competitive bids for the Bonds, the City has accepted the bid
resulting in the lowest net interest cost, which bid was tendered by a syndicate composed
of
("Purchaser")
to purchase the Bonds bearing the interest rates shown under URITY SCHEDULE" at a
price of the par value thereof, plus a cash premium of S , plus accrued interest to
the date of delivery. The net effective interest rate on the was % as
calculated pursuant to Article 717k-2 of Vernon's Annotated Texas Civil Statutes.
Marketability:
The City has no understanding with the Purchaser regarding the reoffering yields or
prices of the Bonds and has no control over trading of the Bonds after their initial sale
by the City. Information concerning reoffering yields or prices is the responsibility of
the Purchaser. No assurance can be given that any trading market will be developed for
the Bonds after the initial sale by the City.
Securities Laws:
No registration statement relating to the Bonds has been filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, in reliance upon the
exemptions provided thereunder. The Bonds have not been registered or qualified under the
Securities Act of Texas in reliance upon various exemptions contained therein; nor have
the Bonds been registered or qualified under the securities acts of any jurisdiction. The
City assumes no responsibility for registration or qualification of the Bonds under the
securities laws of any jurisdiction in which the Bonds may be offered, sold or otherwise
transferred. This disclaimer of responsibility for registration or 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 or
qualification provisions.
Rat�ingss:
In connection with the sale of the Bonds, the City made application to Moody's
Investors Service, Inc. ("Moody's") and Standard Poor's Corporation ("W") for a
municipal bond rating, and ratings of " " and " respectively; have been assigned to
the Bonds and the outstanding City bons on a par t�y with the Bonds. An explanation of
such ratings may be obtained from the companies furnishing such ratings. The ratings
reflect only the views of such companies and the City makes no representation as to the
appropriateness of the ratings.
There is no assurance that such ratings will continue for any given period of time or
that they will not be revised or withdrawn entirely by either or both of such rating
companies, if in the judgment of either or both companies, circumstances so warrant. Any
such revision or withdrawal of ratings may have an adverse effect on the market price of
the Bonds.
3
OFFICIAL STATEMENT SUMMARY
The following material is qualified in its entirety by the detailed information and
financial statements appearing elsewhere in this Official Statement.
General -
The Issuer .. ...... ........... The City of Beaumont, a home rule city of the State of
Texas located within Jefferson County.
The Bonds ... ... .. ............ $20,000,000 Street and Drainage Improvement Bonds, Series
1985, dated March 1, 1985; various amounts due September 1,
1987 through 2002.
Payment of Interest... .. ...... September 1, 1985, and each March 1 and September 1
thereafter, until the earlier of payment or redemption.
Source of Payment. ......... ... Principal of and interest on the Bonds are payable from a
continuing, direct annual ad valorem tax levied with the
limits prescribed by law.
Other Characteristics .... .... The Bonds are issued in fully registered form in integral
multiples of $5,000. Bonds maturing September 1, 1999
through 2002, both inclusive, are optional for redemption,
at par plus accrued interest, in whole or in part on
September 1, 1998, or any interest payment date thereafter.
Use of Proceeds.. .... .. ...... Proceeds from the sale of the Bonds are to be used for
street and drainage improvements. The proceeds will also
be used to pay costs incurred in the issuance of the
Bonds. See "Use of Proceeds".
Bond Ratings..... ... . .. .... .. . Moody's Investors Service, Inc.. ........ ...... .. ... .. "
Standard b Poor's. ... . ....... . .... . .... . . ...... ... . ...
Population. . ..... .. ....... .. .. 1984 Estimate - 118,111.
- Financial Highlights -
(Unaudited)
1984 Certified Assessed Valuation (100% of Estimated Market Value)... .. $2,588,372,712
Direct Debt
Outstanding Debt (as of January 31, 1985)......... .. . ... . ..... ... .. S 60,485,000
TheBonds... .. .. ......... . .. ......... .... .... ..... ... . .... . ........ S 20,000,000
The Certificates................ ... .. . .... .... .. ....... ..... . ..... . $ 12,000,000 (a)
Total Direct Debt. . .. . . .. .......... .......... ............ .. $ 92485000
Lss: Self-Supported Debt (b). .. ... .. ............. . .... .. ......... S 15,140,000
Direct Ad Valorem Tax Supported Debt... ...................... .... . ..... S 77,345,000
Estimated Overlapping Debt. $ 29 296 541
Total Direct and Estimated Overlapping Debt ...... . .................... ,541
Interest and Sinking Fund (as of January 31, 1985)........... . ......... S 3,894,088
% of 1984 Per
Debt Ratios: Assessed Valuation Capita
Direct Debt .x..... .......�� .99 655
Direct and Estimated�Overlapping�Debt.................. 4.12% $903
Annual Requirements:
Average (Fiscal Years 1985/2002)........ . .......... ..... ...... ..... $ 9,148,401
Maximum (1986)....... . .. .... ............. .. ......... ........ .. . . ... $12,446,347
Tax Collections:
Arithmetic Average, Tax Years (1979/1984) - Current Year..... .... ... ..... . 97.05%
- Current and Prior Years. ...... 98.47%
a The City anticipates selling 512,000,000 Water System and Sanitary Landfill
Certificates of Obligation Series 1985 (the "Certificates") concurrently with the
Bonds.
(b) See "Debt Statement - Revenue Support of Ad Valorem Tax Debt.
4
Y A r
THE BONDS
Description of the Bonds:
The Bonds are dated March 1, 1985, bear interest from such date at the stated
interest rates indicated under "MATURITY SCHEDULE", which interest is payable September
1, 1985, and each March 1 and September 1 thereafter until the earlier of payment or
redemption. The Bonds are issued in fully registered form in denominations of $5,000 each
or any multiple thereof. Bonds maturing September 1, 1999, through September 1, 2002,
both inclusive, are subject to redemption, at the option of the City, at the par value
thereof plus accrued interest, in whole or in part, on September 1, 1998, or on any
interest payment date thereafter. If less than all of the Bonds are redeemed within a
stated maturity at any time, the Bonds to be redeemed shall be selected by the City in
multiples of $5,000 within any maturity. Principal of and interest on the Bonds are
payable at the principal corporate trust office of the
, Texas. Interest on the Bonds will be payable by check or ra t,
dated as o t he interest payment date, and mailed by the Registrar to registered owner as
shown on the records of the Registrar.
The Bonds are transferable only on the bond register kept by the Registrar upon
surrender and reissuance. The Bonds are exchangeable for an equal principal amount of
Bonds of the same maturity in any authorized denomination upon surrender of the Bonds to
be exchanged at the principal corporate trust office of the Registrar. The City is not
required (1) to issue, transfer, or exchange any Bond during the period beginning at the
opening of business 15 days before the date of the first mailing of a notice of redemption
of Bonds and ending at the close of business on the day of such mailing or (2) to transfer
any Bonds selected for redemption if such redemption is to occur within thirty calendar
days. No service charge will be made for any transfer, but the City may require payment
of a sum sufficient to cover any tax or governmental charge payable in connection
therewith.
The record date (the "Record Date") for the interest payable on any interest payment
date means the 15th calendar day of the month next preceding such interest payment date.
The Bond Ordinance requires that all transfers be made within three business days .
after request and presentation.
The City has agreed to replace mutilated, destroyed, lost or stolen Bonds upon
surrender of the mutilated Bonds, or receipt of satisfactory evidence of such destruction,
loss or theft, and receipt by the City and the Registrar of security or indemnity to keep
them harmless. The City may require payment of taxes, governmental charges and other
expenses in connection with any such replacement.
Source of Pa ent:
The Bonds, together with other outstanding debt on a parity with the Bonds (the
"Outstanding Debt" ), are payable as to principal and interest solely from and secured by
the proceeds of a continuing, direct annual ad valorem tax levied, within the limits
prescribed by law, against taxable property within the City. See, "TAX DATA - Tax Rate
Limitation." The Bonds are issued pursuant to an ordinance (the "Bond Ordinance") adopted
by the City Council of the City on the date of award of sale of the bonds, to which Bond
Ordinance reference is hereby made. See, also, "Remedies in the Event of Default". In
the Ordinance, the City covenants that while the Bonds are outstanding, it will levy,
assess and undertake to collect such tax.
Authorization of the Bonds:
The are issued pursuant to the Constitution and laws of the State of Texas. The
Bonds constitute the second installment of $33,000,000 street improvement bonds and the
first installment of $16,000,000 drainage improvement bonds authorized by the voters
within the City, at separate elections held for that purpose on April 5, 1980 and March
22, 1983, respectively.
The following table indicates the purpose and amount of the bonds voted and the
number of votes cast for and against each proposition:
Bond Propositions Votes Cast The Remaining
Amount Purpose For gainst Bonds Authorized
$33,000,000 Street Improvement 9,189 2,742 $12,000,000 $1,000,000
16,000,000 Drainage Improvement 5,315 2,110 8,000,000 8 000 000
9,000,000 0,01 000 9,000,000
5
Use of Bond Proceeds:
The Bonds are being issued to provide funds for street and drainage improvements.
The proceeds will also be used to pay the costs of issuance of the Bonds, including the
fees of the Financial Advisor, Bond Counsel and the Securities Counsel, all of which are
contingent upon the sale of the bonds, as well as other administrative costs incurred.
Future Borrowin,gg�
Following tFie issuance of the Bonds, there will remain $9,000,000 of authorized but
unissued bonds. Proceeds from these issues may not be sufficient to complete all
originally contemplated street and drainage improvements. It is currently anticipated
that such remaining bonds will not be issued prior to 1987; however, the City reserves the
right to issue such debt as it deems necessary. The City also has $260,000 transit system
improvement bonds :authorized but unissued from a 1974 authorization. Needs for capital
improvements by the City are reviewed on a regular basis by the City Council and
administration. Those projects which cannot be accomplished out of general revenues are
financed by bonds and other debt obligations authorized by the City Council. The City' s
present plans for capital improvements call for the issuance, during 1986, of
approximately $6,750,000 of certificates of obligation for construction of an art museum
and other indebtedness payable from ad valorem taxes. The City also has plans for
expansion of its existing Riverfront Park as a part of acquisition of the art museum. The
City also has agreed to lease on a stand-by basis office and parking space in a downtown
office building and retail shopping mall project. The lease will call for payments of
$675,960 annually on a stand-by basis for a period of 10 years, and provides the City with
an option to acquire the project if rental payments are ever required to be made by the
City. The City also anticipates that expenditures will have to be made for periodic
improvements to the water and sewer system pursuant to a master plan now being
developed. See "SPECIAL CONSIDERATIONS--Capital Improvements and Issuance of
Indebtedness'. Because substantial amounts of the City's annual ad valorem tax receipts
are generally collected during the last months of the calendar year, the City has in the
current fiscal year obtained a short-term loan for operating expenses in anticipation of
taxes to be received in later months of the same year. It is anticipated that the short-
term borrowings will be continued by the City so long as net interest costs remain
favorable. Such loans must be repaid before the end of the fiscal year in which they are
incurred, and the tax levied for payment of principal and interest on the bonds is not
legally available for that purpose.
No Arbitrage:
The City certifies that based upon all facts and estimates now known or reasonably
expected to be in existence on the date the Bonds are delivered and paid for, the City
reasonably expects that the proceeds of the Bonds will not be used in a manner that would
cause the Bonds, or any portion of the Bonds, to be "arbitrage bonds" under Section
103(c)(2) of the Internal Revenue Code of 1954, as amended, and the regulations prescribed
thereunder. Furthermore, all officers, employees and agents of the City are authorized
and directed to provide certifications of facts and estimates that are material to the
reasonable expectations of the City as of the date the Bonds are delivered and paid for.
In particular, all or any officers of the City are authorized to certify to the facts and
circumstances and reasonable expectations of the City on the date the Bonds are delivered
and paid for regarding the amount and use of the proceeds of the Bonds. Moreover, the
City covenants that it shall make such use of the proceeds of the Bonds, regulate
investments of proceeds of the Bonds and take such other and further actions as may be
required so that the Bonds shall not become "arbitrage bonds" under Section 103(c)(2) of
the Internal Revenue Code of 1954, as amended, and the regulations prescribed from time to
time thereunder.
Legal Investments in Texas:
Article -6, Vernon's Texas Civil Statutes, which applies to the Bonds, provides
in part:
'All bonds. ..are legal and authorized investments for banks, savings banks,
trust companies, building and loan associations, savings and loan
associations, insurance companies, fiduciaries and trustees, and for the
sinking fund of cities, towns, villages, school districts, and other
Political subdivisions or public agencies of the State of Texas. Said
bonds also are eligible to secure deposits of any public funds of the state
or any political subdivision or public agency of the state, and are lawful
and sufficient security for the deposits to the extent of their market
value, when accompanied by any unmatured coupons attached to the bonds.'
The City has made no investigation of any other laws, rules, regulations or
investment criteria that may affect the suitability of the bonds for any of the above
purposes or that may limit the authority of any of the above entities or persons to
purchase or invest in the Bonds. No representation is made with respect to the laws of
states other than Texas as to whether the Bonds are legal investments for various
institutions or purposes in those states.
Remedies in the Event of Default:
The Bond Ordinance obligates the City annually to assess and collect ad valorem taxes
sufficient to pay principal and interest when due on the Bonds, but provides no other
security- for the payment of the -Bonds, provides no express remedies in the event of de-
fault, makes no provision for acceleration of maturity of the Bonds in the event of de-
fault, and does not provide for a trustee to protect the rights of the bond owner.
Although a bond owner could presumably obtain a judgment against the City in the
event there was a default in the payment of principal or interest on the Bonds, such
judgment could not be satisfied by execution against any property of the City. A bond
owner could, in the event of default, ask a court for a mandamus or court order compelling
the City to. levy, assess and collect sufficient ad valorem taxes to pay principal and
.-interest-as -it falls due on the Bonds or to perform the City's other obligations under the
Bond Ordinance. Such remedy might need to be enforced on a periodic basis. The
enforcement of a claim for payment of principal or interest on the Bonds would be subject
to the applicable provisions of the federal bankruptcy laws and to any other similar laws
affecting the rights of creditors of political subdivisions generally.
PRO-FORMA DEBT SERVICE SCHEDULE
The following sets forth the principal and interest on the City's outstanding bonds,
certificates of obligation and the Bonds and the Certificates (assuming an average
interest rate of 9.50% on the Bonds and the Certificates).
Self Supported
Fiscal Year Outstanding The Bonds The Certificates Total New Ad Valorem Tax
Ending Ad Valorem $20,000,000 $12,000,000 Ad Valorem Debt Included
9-30 Tax Debt Principal Interest Principal Interest Tax Debt In Total
1985 S 9,324,154 $ 950,000 $ 570,000 $10,844,154 $ 1,259,444
1986 9,156,347 1,900,000 $ 250,000 1,140,000 12,446,347 1,878,133
1987 8,874,391 $100,000 1,900,000 275,000 1,116,250 12,265,641 1,876,852
1988 7,558,799 700,000 1,890,500 300,000 1,090,126 11,539,425 1,886,667
1989 7,363,535 200,000 1,824,000 325,000 1,061,626 10,774,161 1,880,728
1990 7,159,575 100,000 1,805,000 350,000 1,030,750 10,445,325 1,877,150
1991 7,229,345 -0- 1,795,500 400,000 997,500 10,422,345 1,886,522
1992 6,718,905 200,000 1,795,500 550,000 959,500 10,223,905 1,866,700
1993 6,393,620 200,000 1,776,500 610,000 907,250 9,887,370 1,872,150
1994 5,729,640 500,000 1,757,500 670,000 849,300 9,506,440 1,519,300
1995 5,515,240 400,000 1,710,000 740,000 785,650 9,150,890 1,525,650
1996 5,187,020 400,000 1,672,000 800,000 715,350 8,774,370 1,515,350
1997 3,992,080 1,000,000 1,634,000 875,000 639,350 8,140,430 1,514,350
1998 1,751,090 2,400,000 1,539,000 975,000 556,226 7,221,316 1,531,226
1999 3,600,000 1,311,000 1,050,000 463,600 6,424,600 1,513,600
2000 3,800,000 969,000 1,160,000 363,850 6,292,850 1,523,850
2001 3,800,000 608,000 1,270,000 253,650 5,931,650 1,523,650
2002 2 600 '2� 1�Obb�6 � 42380 00� 1
3�6,66a,
Average Annual Debt Service Requirements (1985/2002).. ....... .... ... $ 7,482,605 (a)
Average Annual Debt Service Requirements (1985/2002)........ . ....... S 9,148,401
Maximum Annual Debt Service Requirement (1986).. .. . ... ....... ... .... $12,446,347
a Less Telf Supported Ad Valorem Tax Debt Service.
General : DEBT STATEMENT
The following tables and calculations relate to the Bonds and Certificates and to all
other tax supported debt of the City. In addition to the Outstanding Bonds and
Certificates of Obligation, the City has also issued revenue bonds and has incurred
contractual and other indebtedness and liabilities which are not included below but which
are significant in amount. The City and various other political subdivisions of
government which overlap all or a portion of the City are empowered to incur debt to be
paid from revenues raised or be raised by ad valorem taxation against all or a portion of
property within the City.
4�
Bonded Indebtedness:
1984 Certified Assessed Valuation
(100% Estimated Market Value). .... . .. ....... $2,588,372,712
Direct Debt
Outstanding Debt (as of January 31, 1985).. . . ........ .... S 60,485,000
The Bonds. ... ........................................ 20,000,000
The Certificates......... .. .... .......... .... .... .... . ... 12.000,000 (a)
Total Direct Debt.. . . ........ ......... ... .. 92,485,000
Less: Self Supported.Debt ................ .... ...... . S 15,1 000
Total Ad Valorem Tax Supported Debt. .... ... . ....... .... .. 7,345,000
Interest & Sinking Fund Balance (as of January 31, 1985) ..... S 3,894,088
a he City anticipates selling $12,000,000 Certificates of Obligation concurrently with
the Bonds.
(b) See "Revenue Support at Ad Valorem Tax Debt."
Revenue Support of Ad Valorem Tax Bonds and Certificates of Obligation:
Certain tax supported bonds and certificates of obligation are being paid from
revenues other than taxation. Including the Certificates, $15,140,000 of such bonds and
certificates of obligation are presently outstanding, and their debt service requirements
have traditionally been paid from funds transferred from the other funds into the Debt
Service Fund. The following is a listing of funds so transferred over the last five
years, which amounts represent the actual principal and interest requirements of such
bonds and certificates of obligation:
Fiscal Year Ended September 30
1984 1983 982 1981 1980-
Transfer from other funds to
Debt Service Fund.... ..... .... $897,375 $708,852 $546,328 $668,027 $703,031
The City has pursued a policy of making such debt service payments from the other
funds and intends to continue to do so in the future. However, nothing herein is to be
construed as a guarantee that it will be able to do so. Any change in such policy could
have the effect of increasing ad valorem tax requirements with resultant increases in the
rate of taxation.
Estimated Overlapping Debt:
The following to a indicates the indebtedness, defined as outstanding bonds payable
from ad valorem taxes, of governmental entities overlapping the City and the estimated
percentages and amounts of such indebtedness attributable to property within the City.
This information is based upon data secured from the individual jurisdictions and or the
Texas Municipal Reports. Such figures do not indicate the tax burden levied by the
applicable taxing jurisdictions for operation and maintenance or for other purposes. The
City has not independently verified the accuracy or completeness of the information shown
below except for amounts related to the City.
Overlapping
Tax�in Jurisdiction Debt as of 1-31-85 Percent Amount
Beaumont Independent School District '5$.66— S TIMM'79T_
Jefferson County 23,650,000 24.60 5,817,900
Jefferson County Drainage District No. 6 16,300,000 74.25 12,102,750
Port of Beaumont Navigation District 9,500,000 70.78 6,724,100
TOTAL ESTIMATED OVERLAPPING DEBT S 29,296,541
The City 77,345,000
TOTAL DIRECT AND ESTIMATED OVERLAPPING DEBT $106,641,541
Debt Ratios: Direct and
Estimated
Overlapping
Direct Debt Debt
Per 1984 Estimated Assessed Valuation (52,588,372,712). . . ..
Per Capita (118,111).. ... ............. ........... ........ .. $655 $903
8
TAX DATA
General :
One of the City's sources of operational revenue and its principal source of funds
for ad valorem tax debt service payments is from the receipts from ad valorem taxation.
The following is a recapitulation of (1) the authority for taxation, including methodo-
logy, limitations, remedies and procedures; (2) historical analysis of collection and
trends of tax receipts and provisions for delinquencies; and (3) an analysis of (a) the
current tax base, (b) the principal taxpayers and (c) other ad valorem taxation that may
compete with the City's tax collections. Additionally, sales tax authority and collec-
tions are analyzed as well as payments received in lieu of taxes for Industrial District
Contracts. The inclusion of the following information is not intended to imply that any
revenues of the City, other than receipts of an ad valorem tax, are pledged to pay the
principal of or interest on the Bonds. Such information, and the other information
contained in this Official Statement relating to sources of revenues other than ad valorem
taxes, is for the purpose of providing information concerning the general operation of the
City.
Authority for Ad Valorem Taxation:
Following is a discussion of ad valorem taxation under Texas law. Recently effective
changes to the law, especially the State Property Tax Code (the "Tax Code"), will have
varying but significant effects upon the existing tax methodology and procedures discussed
below. The City is presently unable to assess the full impact of such changes upon the
City's ad valorem tax procedures, nor can the City predict the future possibility of
further amendments or revisions to the Tax Code.
- Tax Rate limitations -
Article XI, Section 5 of the Texas Constitution, provides for an overall limitation
for Home Rule Cities of $2.50 per $100 assessed valuation. The Attorney General of Texas
follows a policy, with respect to Home Rule Cities which have such a $2.50 limitation, of
approving ad valorem tax bonds only to the extent that all of such city's ad valorem tax
debt can be serviced by a tax rate of $1.50 at 90% collection.
- Property Subject to Taxation -
Except for certain exemptions provided by Texas law, all the property in the City,
real or personal , is subject to taxation by the City. Principal categories of exempt
property include property owned by the State of Texas or its political subdivisions if the
property is used for public purposes; property exempt from ad valorem taxation by federal
law; certain households goods, family supplies, and personal effects; farm products owned
by producers; certain property associated with charitable organizations, use and
development associations, religious organizations, and qualified schools; designated
historic sites; solar and wind powered energy devices; most individually owned
automobiles; property of disabled veterans only to the extent of $3,000 of taxable
valuation; and residential homesteads of persons over 65 years, to the extent the
governing body of the political subdivision granting an exemption deems it advisable to
exempt such homestead. The Council presently exempts from taxation up to $17,500 assessed
valuation of residential homesteads to persons over 65 years of age. Such homestead and
disabled veterans exemptions from the 1984 tax roll approximate $133,858,653.
An eligible owner of agricultural and timberland may apply to have such properties
which meet certain requirements appraised on the basis of productivity value or market
value, whichever is less. However, eligible timberland may not be appraised at a value
lower than was assigned an the 1978 tax rolls. The total loss in value due to grants of
agricultural use and open-space land appraisal from the 1984 tax roll approximate
$14,518,578.
Voters of the State of Texas cast ballots on November 3, 1981, approving a state
constitutional amendment which permits local governments the option of granting homestead
exemptions of up to 40% of market value of the 1982-1984 tax years, up to 30% of market
value for the 1985-1987 tax years, and up to 20% of market value thereafter. The City
currently does not grant an additional homestead exemption.
- Collections -
Although the assessment procedure has changed, the City Tax Assessor-Collector will
continue to be responsible for the assessment and collection of ad valorem taxes levied by
the city. since 1982, the city has contracted with the Jefferson County Tax Assessor-
Collector to collect ad valorem taxes on behalf of the City at a rate of $0.22 per
taxpayer. Collections by the County Tax Assessor-Collector on behalf of the City are
approximately 2% below those collections in prior years, resulting in a reduction of
approximately $400,000 in current collections. The County Tax Assessor-Collector has
undertaken to increase its collection efforts.
9
The City has a lien granted by statute for unpaid taxes on real property which is
discharged upon payment. Thereafter, no lien exists in favor of the City until it again
levies taxes. A tax lien may not be enforced on personal property transferred to a bona
fide purchaser for value who does not have actual notice of the existence of the lien. In
the event a taxpayer fails to make timely payment of taxes owing to the City on real
property, a penalty of 6% of the unpaid taxes is incurred in February and 1% is added
monthly until July 1 when the penalty becomes 12%. In addition, interest on delinquent
taxes accrues at the rate of 1% per month until paid. The City may file suit for the
collection of delinquent taxes and may foreclose such lien in a foreclosure proceeding.
The City may also impose an additional penalty to defray costs of collection by an
attorney, not to exceed 15% of the total amount due. The property subject to the City's
lien may be sold, . in whole or in part, pursuant to a court order to collect the amounts
due. The ability of the City to collect delinquent taxes by foreclosure may be adversely
affected by the amount of taxes owned to other taxing units, adverse market conditions,
taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of the
taxpayer's debt.
- Taxation Procedures -
As of January 1, 1982, the appraisal of property within the City is the
responsibility of the Jefferson County Appraisal District with county-wide jurisdiction
(the "Appraisal District"). Prior to January 1, 1982, appraisal of property within the
City was the responsibility of the City's Tax Assessor-Collector. The Appraisal District
operates under rules adopted by the State Property-Tax Board (the "Tax Board"). The Tax
Board, appointed by the Governor, began operation on January 1, 1980. Appraisal Districts
within each county also began operation at that time. The majority of the directors of
the Appraisal District may be selected by taxing entities other than the City.
The Appraisal District is required to review all property within the City at least
every four years. The next reappraisal will be completed during the current fiscal
year. The Appraisal District is required to assess all property within the Appraisal
District on the basis of 100% of its appraised value and is prohibited from applying any
assessment ratios. By August 1, or as soon as possible thereafter, the City must adopt a
tax rate for the current year. Taxes are due October 1 and become delinquent after
January 31 of the following year. No discount for early payment is offered. Partial
payments may be accepted if requested by the taxpayer and approved by the City. If the
effective tax rate, excluding taxes for bonds and other contracted obligations, for the
current year, exceeds the rate for the previous year by more than 8%, the qualified voters
of the City may petition for an election to determine whether to limit the increase of the
tax rate to no more than 8% for the following year. The City is required to hold public
hearings to permit voter discussion should the effective tax rate be increased by more
than 3%.
Under Texas law, the Appraisal District is under an obligation to assess all property
for taxation which has not been rendered for taxation by the owner and to present his
assessments along with any objections to renditions to a nine-member Appraisal Review
Board, each of whom has resided within the Appraisal District for two years, and who have
been appointed by the Appraisal District's Board of Directors. The Appraisal Review Board
has the ultimate responsibility of equalizing the value of all comparable taxable property
within the Appraisal District; however, any owner who has rendered his property may appeal
the decision of the Appraisal Review Board by filing suit in district count in Jefferson
County, within 45 days from the date the tax roll is approved. In the event of such suit,
the value of the property is determined by the court, or by a jury if requested by the
owner, which value as so determined is binding on the City for the tax year in question
and the succeeding year, except for subsequent improvements.
A city, or other taxing unit, may challenge the appraisals assigned categories of
property within its jurisdiction under certain limited circumstances. The City may also
sue the Appraisal District to compel it to comply with the Tax Code. It is not expected
that Appraisal District procedures will affect the ability of the City to adjust its tax
rate so that it may levy and collect taxes sufficient to meet its obligations.
Historical Analysis of Ad Valorem Taxation:
- Collection Ratios -
Tax Rate Per % Tax Collections
Tax Asses's'ed $100 Assessed Adjusted Current Current & Fiscal Year
Year Valuation _Valuation Tax�Lev y Year Prior Years Ending 9-30
978 $ 74,245 $1.87 $12,556,568 98.31 99.32 1979
1979 728,134,250 1.87 13,616,110 96.23 97.84 1980
1980 799,830,460 1.87 14,956,830 97.04 99.12 1981
1981 1,458,663,314 (a) 1.12 17,266,590 96.43 98.07 1982
1982 2,391,880,308 (b) .75 17,939,102 98.66 98.87 1983
1983 2,528,125,360 .76 19,213,753 95.81 97.73 1984
1984 2,588,372,712 .78 20,189,307 (In process of collection) 1985
a Increase in assessment ratio from 60% to 100%.
(b) Revaluation.
- Tax Rate Distribution -
Tax Year
1984 1983 1982 1981 1980 1979 1978
General Fund $0.51 $0.51 $0.51 $0.79 $1.33 $1.33 $1.33
Interest &
Sinking Fund 27 25 24 33 54 54 54
Total .78 TU-.T6- TUT75 TF7.12 .87 T1.87 $1.87
- Tax Base Distribution -
Type of Property 1984 Tax Roll % 1983 Tax Roll %
Residential $1,515,308,226 55.37 $1,470,637,165 55.01
Vacant Platted Lots/Tracts 104,072,705 3.80 103,623,500 3.88
Minerals 28,126,300 1.03 30,226,710 1.13
Commercial & Industrial 561,960,990 20.53 513,083,160 19.19
Banks 33,635,400 1.23 79,525,810 2.97
Utilities 185,978,655 6.80 178,525,665 6.68
Business Personal 286,457,277 10.47 278,233,814 10.41
Vehicles & Other Personal 21,235,480 .78 19 382 324 .73
Gross Value s1;T3S77TU3'3 �5T3;�;148
Less: Exemption 148,402 321 144,109 788
Net Value $2,588,372,712 2,529,125,360
Principal Taxpayers -
Assessed Valuation
Taxpayer Type of Property 1984 Tax Roll 19977-a-77-o-TT
Gu i f�State Utilities Electric Utility 81,459,990 72,627,60Q
Southwestern Bell Telephone Utility 73,887,970 82,197,470
Dresser Industries, Inc. Manufacturing 21,826,940 20,503,830
Holidome, John Q. Hammonds Hotel-Motel 15,828,36C _x_
N. L. Petro Services Chemical Properties 15,173,510 15,173,510
Parkdale Mall Shopping Center 14,398,410 13,309,410
Betz Laboratories Chemical Properties 10,754,130 -x-
Entex, Inc. Gas Utility 7,987,870 7,939,720
J. C. Penney Company Department Store 7,432,240 6,661,400
Joske's Department Store 7,051,120 6,680,400
First City National Bank Bank -x- 21,503,830
Texas Commerce Bank Bank -x- 20,081,220
Total Top Ten Taxpayers Assessed Valuation $255,800,540 $266,988,550
% of Assessed Valuation to Respective Tax Roll 9.88% 10.56%
Tax Adequacy -
Avera a Annual Debt Service Requirements (1985/2002).. . . .. . . . ... . . . .. . .. $ 9,148,401
assuming 9.50% interest on the Bands) "
Tax Rate of $0.38 per $100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces. ... . . ... .. S 9,344,025
Average Annual Debt Service Requirements (1985/2002).... . . . .. .... . .. .... S 7,482,606 (a)
(assuming 9.50% interest on the Bonds)
Tax Rate of $0.31 per $100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces. ...... ... . S 7,622,758
Maximum Annual Debt Service Requirements (in the year 1986)... . .. ... . ... $12,4469347
(assuming 9.50% interest on the Bonds)
Tax Rate of $0.51 per $100 assessed valuation against
the 1984 Assessed Valuation, at 95% collection, produces.... ....... $12,540,666
a Less Self Supported Ad Valorem Tax Debt Service.
Estimated Overlapeing Taxes:
Under Texas law, it ad valorem taxes levied by a taxing authority become delinquent,
a lien is created upon the property which has been taxed, which lien is on a parity with
any tax lien on such property in favor of the City. In addition to ad valorem taxes
required to retire the aforementioned direct and estimated overlapping debt, certain
taxing jurisdictions including those mentioned above are also authorized by Texas law to
assess, levy, and collect ad valorem taxes for operation, maintenance, administrative
and/or general revenue purposes.
Set forth below is an estimation of ad valorem taxes levied on a $75,000 single-
family residence by such jurisdictions, assuming the assessments are made at their claimed
basis of assessment (100%). Such residence is further assumed to be located within
Jefferson County, wherein substantially all of the residential property within the City is
located. No recognition is given to local assessments for civic association dues, fire
department contributions, or other charges made by other than political subdivisions.
1984 Tax Estimated
Taxing Jurisdiction Rate/$100 1984 Tax Bill
The City $0.7800 S 585.00
Beaumont Independent School District .9000 675.00
Jefferson County .2420 181.50
Jefferson County Drainage District No. 6 .2171 162.83
Port of Beaumont Navigation District .0570 42.75
Estimated Total 1984 Tax Bill 51,647.08
Sales Tax:
- Authority -
The City has adopted the provisions of Article 1066c, Vernon's Texas Civil Statutes,
as amended, which grants the City the power to impose and levy a 1% sales tax. The City
may not pledge the proceeds from the Sales Tax as security for the Bonds.
- Collection History
The State Comptroller, after deduction of a 2% service fee,. remits the City's portion
of sales tax collections monthly. The following is an analysis of the ,col.lecti,on history
of the City's sales tax:
Ad Valorem Taxation Comparisons
Fiscal Year Sales Tax Equivalent iax Rate of ctua
Ended 9-30 Receipts Tax Year Equivalent Tax Levy
1978 5,280,290 (1977) $0.894 47.83
1979 6,135,353 1978) .914 48.86
1980 7,024,856 1979) .965 51.59
1981 8,147,717 (1980) 1.019 54.47
1982 8,717,207 (1981) .561 50.49
1983 8,627,153 (1982) .361 48.09
1984 9,456,086 1983) .374 49.22
1985 3,542,097 (a) 1984)
During the current fiscal year, sales tax revenues are approximately $225,000 below
those anticipated through 1-31-85. If such revenues remain below the budgeted level the
City anticipates a shortfall of up to $600,000 for the current fiscal year.
T-aT-7—OTTections through January 31, 1985.
12
r
Industrial District Contracts:
The City has created, within its extraterritorial jurisdiction, but outside of the
City limits, ten Industrial Districts and has entered into contracts with the industry
within such districts. The contracts specify payments to be made in lieu of ad valorem
taxes and thereby protect the industries from annexation by the City during the term of
the contract, seven years. The annual payments shown below increased 6% annually from
1982 through 1984 and will increase 12% in 1985 and 6% in 1986 and 1987 unless otherwise
indicated. Such revenues are not pledged to the payment of the Bonds.
The Industrial District, the industry within, their contract dates and current
payment are as follows:
Contract Annual Payment
Industrial District Expires 1984 1 9N5
Mobil Oil Corporation................................ 12-31-87 $3,013,000 $3,375,000
Texas Gulf Sulphur Co................................ 12-31-87 78,322 87,720
P. D. Glycol/Houston Chemical (was PPG Industries)... 12-31-87 258,200 289,200 (a)
Bethlehem Steel Corp................................. 12-31-87 88,570 99,200
E. I. duPont de Nemours b Co......................... 12-31-87 851,547 953,730
Gulf States Utilities Co............................. 12-31-87 177,493 216,840 (b)
Goodyear Tire b Rubber Co............................ 12-31-87 355,515 398,180
Olin Corp............................................ 12-31-87 46,239 51,790
Amoco Texas Refining................................. 12-31-87 123,644 138,480
Pennwalt Corp........................................ 12-31-87 121 515 136 100
TOTAL........................................... T;I13
a Fixed payments for remaining term of contract.
(b) Fixed annually based on the City's annexation policy and Company's plant retirement.
Revenue from these contracts is summarized and compared to ad valorem taxation in the
table below:
Receipts from
Industrial Ad Valorem Taxation Comparisons
Fiscal Year District Equiva ent Tax Rate of Actual
Ended 9-_30 Contracts Tax 977) Equivalent Tax Lev
1979 3,031,231 (1978) .416 24.14
1980 3,059,879 (1979) .383 22.47
1981 4,278,225 1980) .293 28.60
1982 4,591,139 1981) .192 26.59
1983 4,837,783 (1982) .191 26.97
1984 5,114,045 1983) .202 26.62
1985 5,746,240 1984) .222 28.46
Tax Increment Reinvestment Zone:
In 1982, the City-es t' Tshed a tax incr-ement reinvestment zone in the downtown area
in order to assist in its revitalization. As a result of creation of the zone, ad valorem
taxes currently collected in excess of collections during a base year are to be used to
finance public improvements to be located within the zone. These excess ad valorem tax
collections will not be available for debt service on ad valorem tax supported bonds
(including the Bonds). Tax increments set aside for public improvements in the City's
zone will be approximately $125,000 during 1985.
13
SELECTED FINANCIAL DATA
Historical Operations of the City's General Fund:
The following is a condensed statement of revenues and expenses of the City's General
Fund for the past five fiscal years. The inclusion of the following table is not intended
to imply that any revenues of the City, other than receipts from ad valorem taxes as
provided in the Ordinance, are pledged to pay principal and interest on the Bonds.
Fiscal Year Ended September 30
984 1983 1982 1981 980
REVENUES
Property Taxes.................... $12,601,094 $11,750,575 $11,774,351 $10,543,631 S 8,320,422
Other Taxes (a)................... 13,346,337 12,534,239 11,628,728 10,104,997 8,568,612
Industrial District Contract
Payments........................ 5,114,045 4;837,783 4,591,139 4,278,225 3,059,879
Licenses and Permits.............. 640,219 447,647 340,734 406,102 372,996
Charges for Services.............. 485,421 310,687 250,681 222,959 334,145
Intergovernmental Revenues........ 2,480,653 2,409,810 1,514,305 1,665,513 1,810,663
Fines and Forfeits................ 1,766,324 1,527,058 1,383,333 1,205,711 1,101,357
Cultural and Recreational......... 642,270 561,670 -0- -0- -0
Interest.......................... 789,526 870,644 1,321,876 905,437 987,017
Miscellaneous..................... 422,760 331,499 394 273 280,249 99,340
Total Revenues................. ,28 ,649 3 ,58 2 3 , 99,420 $Z9,612,824, $25,645,431
EXPENDITURES
General Government................ $ 3,361,945 $ 1,523,084 S 1,306,712 S 1,159,985 $ 1,081,028
Finance........................... 1,664,990 768,275 1,048,093 1,295,035 1,088,499
Police............................ 9,217,131 9,043,113 8,212,074 7,264,769 6,253,356
Fire.............................. 8,151,746 7,431,694 6,608,043 5,954,185 5,506,029
Traffic and Transportation........ 1,994,752 2,070,704 2,272,732 2,025,882 1,599,651
Public Works...................... 5,168,419 5,147,725 4,666,453 4,379,153 3,652,971
Code Enforcement.................. 1,985,993 1,235,571 1,231,452 1,095,944 900,792
Parks and Recreation.............. 2,024,076 1,798,378 1,604,182 1,427,863 1,264,215
Community Services................ 2,521,038 2,100,023 1,712,853 1,421,907 1,159,426
Community Facilities.............. 965,982 930,158 (b) (b) (b)
General Service................... -0- (d) 1,350,406 1,327,481 1,436,570 1,855,345
Building Maintenance.............. -0- (d) 1,525,930 1,325,870 1,280,290 (c)
Capital Improvements.............. -0- -0- -0- -0- 3,906,000
Non-Departmental.................. 500,000 662 176 1 057 601 347,456 599,968
Total Expenditures............. 33T,35G�Tb T,,-587;�3T �� 0
Ta Inc udes Sales and Use Taxes, Street Rentals and penalties and interest on delinquent
taxes.
(b) Does not include income and expenditures from solid waste disposal and community
facilities accounted for in separate funds from 1980 through 1982, inclusive.
(c) Building Maintenance included in General Services prior to 1981.
(d) Included in General Government and Finance in 1984.
General Fund and Debt Service Fund Balance for the Past Five Fiscal Years:
Fiscal Year Ended September 30
1984 TnT_ 1982 1981 980
General Fund........................ $3,538,763 $1,907,798 (S 184,823) S 759,649 $1,523,898
Debt Service Fund................... $2,407,460 $4,063,258 $6,028,639 $5,213,486 $3,776,540
Financial Statements:
copy of the City's Financial Statements for the fiscal year ended September 30,
1984, is attached hereto in the APPENDIX B. Copies of such statements for preceding years
are available, for a fee, upon request.
ZAP '-s"^��
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X11
F
ADMINISTRATION OF THE CITY
Mayor and City Council : -
Policy-making and legislative functions are the responsibility of and are vested in
the Mayor and Council under provisions of the "Charter of the City of Beaumont" (the
"Charter") approved by the electorate December 6, 1947, and amended in 1972 and 1983. In
an election held on August 13, 1983, the voters of the City approved amendments to the
City Charter effective January 1, 1984, providing for a city council composed of seven
members, including the Mayor, four of whom, including the Mayor, are to be elected at-
large in even-numbered years. All members will serve two-year terms. The Mayor is
entitled to vote on all matters before the Council , but has no power to veto Council
action. Members of the Council are described below:
Council Members Position Term Expires Occupation
William E. Neild Mayor April , 1986 Building Contractor
Joseph D. Deshotel Mayor Pro Tem April, 1986 Attorney
Well Pruitt Weisbach Councilman Ward 1 April, 1985 Housewife
Mike Brumley Councilman Ward 2 April, 1985 Prehearing Examiner/Texas
Industrial Accident Board
Audwin Samuel Councilman Ward 3 April, 1985 Salesman/Savin Corp.
David W. Moore Councilman Ward 4 April , 1985 Salesman/Xerox Corp.
G. Wayne Turner Councilman-At-Large April, 1986 Supervisor/Sunoco Marine
Terminal , Inc.
Administration:
Under provisions of the Charter, the Council enacts local legislation, adopts
budgets, determines policies and appoints the City Manager, who is charged with the duties
of executing the laws and administering the government of the City. As the chief
executive officer and head of the administrative branch of the City government, the City
Manager is given the power and duties to:
(1) Appoint and remove all department heads and all other employees in the
administrative service of the City and may authorize the head of a department to
appoint and remove subordinates in his respective department;
(2) Prepare the budget annually, submit it to Council, and be responsible for its
administration;
(3) Prepare and submit to Council a complete report on the finances and
administrative activities of the City;
(4) Keep Council advised of the financial condition and future needs of the City and
make appropriate recommendations; and
(5) Perform such other necessary duties as prescribed by the Charter or -e7uired by
Council.
Members of the administrative staff are described below:
CitX Manager - Karl Nollenberger - Mr. Nollenberger is a graduate of the University
Of Iowa B.B.A.1969) and the University of Colorado (M.P.A. 1977). He has fifteen years
experience in municipal government and financial management in Texas, Minnesota, Iowa and
Colorado. He became City Manager of Beaumont in June, 1983, and is a member of the
International City Management Association and other professional organizations.
Assistant Cit Manager - Hugh H. Earnest - Mr. Earnest is a graduate of Arkansas A &
M University and received a Master's Degree in Public Administration from the
University of Arkansas (1971). Mr. Earnest has twelve years' experience in municipal
management and became Assistant City Manager of Beaumont in January, 1982. He is a member
of the Texas City Management Association and the International City Management
Association.
Finance Officer - Robert J. Nachlinger - Mr. Nachlinger is a graduate of East Texas
State University B.B.A. 1970, M.B.A. 1978). He has fifteen years experience in municipal
finance and became Finance Officer of the City in March, 1979. He is a member of the
Governmental Finance Officers Association, the American Institute of Certified Public
Accountants, and the Texas Society of Certified Public Accountants.
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City Attorney - Lane Nichols is a graduate' of Lamar University (1964) and the'
University of Texas School of Law (1967). He has been City Attorney of Beaumont since
March of 1984. Prior to that he was First Assistant City Attorney for the City. He is a
member of the Texas and American Bar Associations and admitted to practice in the U.S.
District Court for the Eastern District of Texas and the United States Supreme Court. He
is a member of the National Association of Municipal Law Officers and a member of the
Board of Directors of the Texas City Attorneys Association.
City Clerk - Myrtle Corgey - Mrs. Corgey has been employed by the City since 1958 and
has been Clerk since 1972. She is a member of the Institute of Municipal Clerks and
the Texas Election Officials Association.
Consultants:
—die Lity has retained several consultants to perform professional services in
connection with the independent auditing of its books and records and other City
activities. Several of these consultants are identified below:
Financial Advisor........... ........................ Underwood, Neuhaus & Co. Incorporated
Houston, Texas
Auditors.. . . ... ...... ... ............. ...... ...... .. .... Touche Ross & Co.
(Certified PublicAccountants) Houston, Texas
Bond Counsel................ ....... ... ............................ Messrs. Vinson & Elkins
Houston, Texas
Securities Counsel to the City. .............. ..... .......... Messrs. Orgain, Bell & Tucker
Beaumont, Texas
LITIGATION
In 1983, the United Stated Supreme Court held in American Bank & Trust Co, v. Dallas
County that Texas taxing entities, including the City, may not include the value of United
tates obligations in the computation of the value of bank capital stock which is subject
to ad valorem taxation under Texas law. Local banks in the area have filed suit against
the City seeking recovery of ad valorem taxes assessed against their bank capital stock.
The City has established a reserve of $2,000,000 which is sufficient to repay all ad
valorem taxes paid by the local banks under protest.
The City is defending a number of lawsuits in which personal injuries, property
damages, wrongful deaths, and violations of civil rights law are alleged. The City is
also aware of claims based upon alleged personal injuries, property damages, wrongful
deaths and violations of civil rights laws which have not been asserted in litigation.
The City considers that none of these lawsuits and claims, either individually or in the
aggregate, would, if adversely decided, have a material adverse affect on the ability of
the City to pay principal of and interest on the Bonds.
LEGISLATION AND REGULATION
Affecting the City's Operations:
In July of 1984, the City was notified by the United States Environmental Protection
Agency (the "EPA" ) that the City may have to construct additional water treatment
facilities to meet final effluent limitations which are presently scheduled to take effect
in 1988. The EPA is not requiring that the City furnish additional information concerning
its water treatment facilities until the spring of 1985. Therefore, it is not know
whether any amounts will have to be expended by the City in order to comply with the EPA's
final etfluent limitations.
At the present time, President Reagan has proposed the introduction of legislation
which, if enacted, would among other things reduce Federal revenue sharing programs,
eliminate grants by the Urban Mass Transit Administration, and reduce the Community
Development Block Grant Program. During the fiscal year ended 9-30-84, the City received
$1,781,377 in Federal revenue sharing funds which the City used for capital
improvements. If legislation in the form proposed is enacted, the City will have to use
ad valorem tax revenues for such projects or limit further capital expenditures. During
the fiscal year ended 9-30-84, the City received $508,259 in funds from the Urban Mass
Transit Administration which the City used to finance capital improvements and expenses of
operation of the City's transit system. If the proposed legislation is passed in the
current form, the City may have to abandon or curtail services of the transit system or
use ad valorem tax revenues, increase system charges, or use revenue from other sources to
offset the loss of federal funding. During the fiscal year ended 9-30-84, the City
received $2,564,937 in Community Development Block Grant Program funds which were used for
improvements in low and moderate income areas. If such funds are not received in the
future, the City will have to restrict or curtail these advances or use ad valorem tax
receipts or revenue from other sources in order to pprovid the necessary funds.
The 69th Session of the Texas Legislature is presently in session until May 31; '
1985. It is not possible to predict what affect, if any, legislation enacted by the Texas
Legislature may have on the City, its ad valorem taxes, or its operations in general .
Affecting the Tax Base:
Air quality control measures of the EPA and the Texas Air Control Board may curtail
new industrial, commercial and residential development in the City and the surrounding
areas. Existing ambient ozone concentrations exceed EPA standards, and sulfur dioxide
emissions are increasing. Because of these factors, federal regulations are particularly
stringent with regard to construction or modification of certain facilities which emit
pollutants. The regulations require, among other things, that new or increased
hydrocarbon emissions must be offset by reductions of existing sources in the area. New
and more stringent limitations on development in the Beaumont area may result if
reasonable further progress is not made toward attaining the EPA's ambient air quality
standard for ozone. Such limitations could include (1) more stringent offset regulations,
(2) outright bans on new large facilities, and (3) increased transportation controls. The
City may be required to enforce such limitations which would have an adverse effect on
assessed valuations in the City and the surrounding area.
Under the provisions of the Flood Disaster Protection Act of 1973 and accompanying
regulations, the Federal Insurance Administration identified property lying within the
100-year flood plain (areas which a probability of flooding of 1% or greater each year)
and subjected those areas to regulations which constricted construction. These
regulations are being implemented in phases, as increasingly detailed data becomes
available. The City and Jefferson County have already passed ordinances implementing
building restrictions in flood plain areas. Approximately 6% of the surface area in the
County and approximately 12% of the surface area of, the City are considered flood hazard
areas, which may have an adverse effect on the market valuation of the property within the
areas and all of which may adversely affect assessed valuations.
SPECIAL CONSIDERATIONS
Capital Improvements:
After issuance of the Bonds and Certificates, the City will have $1,000,000 of
authorized but unissued bonds available for street improvements and $8,000,000 of
authorized but unissued bonds for drainage improvements. It is contemplated that the
remaining bonds will be issued during 1987.
The City anticipates that additional expenditures may have to be made for
improvements to its water and sewer system in order to extend facilities into undeveloped
areas and to upgrade obsolete facilities and equipment in developed areas. A master plan
is now being developed by outside consultants for review by the City during the summer of
1985.
The City may have to make certain improvements to its water treatment facilities to
comply with the EPA's final effluent limitations. The timing and cost of these
improvements cannot be predicted at this time. See "LEGISLATION AND REGULATIONS --
Affecting the City' s Operations".
The City contemplates that it will acquire an art museum in 1986 and lease the museum
to a local tax-exempt organization. To finance acquisition, the City plans to issue
approximately $6,750,000 of certificates of obligation.
As a part of the art museum project, the City also has plans to expand its existing
River front Park. It is currently projected that the expansion will begin in 1987 at an
estimated costs of $1,000,000.
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Pension Fund:
All permanent employees of the City other than firemen are covered by a state-wide
retirement plan administered by the Board of Trustees of the Texas Municipal Retirement
System. . The City_'s contribution rate. to the system. including supplemental isa i ity
ene T its for calendar year 1984, was set at 6.05% of each participant's salary as
determined by System's actuary in accordance with the Texas Municipal Retirement System
Act. The City's total contributions for the fiscal year ended September 30, 1984, in
accordance with these requirements, were $1,091,066. The unfunded accrued liability for
prior service benefits (both vested and nonvested) at the date of latest actuarial
determination on 12-31-83, was $6,680,636.
Firemen are covered by a Firemen' Relief and Retirement Fund maintained for members
of the City of Beaumont Fire Department under the _provisions of applicable laws of the
State of Texas. All persons who are not more than 35 years of age upon entering service
as a fireman become members of the plan. While the City has no direct fiduciary
responsibility for the fund, the Director of Finance serves as a member of its Board of
Trustees. As determined by the latest actuarial valuation on 2-28-82, required contri-
butions made to the fund were 10% of salary by each member and matched by 10% from the
City, amounting to a contribution by the City in the aggregate amount of $550,529 for the
year ended September 30, 1984. Under Texas Law, expenditure of monies from the Firemens'
Relief and Retirement Fund for an actuarial valuation can be made only once every three
years. The latest valuation prepared as of October 1, 1982, reflected that there were
unfunded liabilities of $5,950,725 which were being amortized over 22 years.
Collective Bar ainin :
Police o icers and firemen employed by the City have collective bargaining rights
under the Texas Fire and Police Employees Relations Act. The contract between the City
and the union representing the policemen expires September 30, 1986. The contract between
the City and the union representing the firemen expires September 30, 1985, and the
parties are in the process of renegotiation. Neither the police officers nor the firemen
have the right to strike, but under a local ordinance the firemen may submit any issues
not resolved by negotiation to binding arbitration.
Local Economic Conditions:
The City and the surrounding area are currently experiencing the effects of a severe
economic recession, caused in large part by a decline in the petroleum and related
chemical industries. The recession has, and until abatement will continue to, adversely
affect property valuations, governmental revenues and receipts, income levels, entry of
new businesses and success of existing enterprises, and other economic conditions
generally within the City and the surrounding area.
LEGAL MATTERS
Legal Opinion:
The City will furnish the Purchaser a transcript of certain certified proceedings had
incident to the authorization and issuance the Bonds, including a certified copy of the
unqualified approving opinion of the Attorney General of Texas, as recorded in the Bond
Register of the Comptroller of Public Accounts of the State of Texas, to the effect that
the Bonds are valid and binding obligations of the City under the Constitution and laws of
the State of Texas. The City will also furnish the approving legal opinion of Vinson &
Elkins, Bond Counsel , to the effect that, based upon an examination of such trAnscrip v
the Bonds are valid and binding obligations of the City under the Constitution ind laws of
the State of Texas and to the effect that the interest on the Bonds is exempt from all
present federal income taxes under existing statutes, regulations, published rulings and
court decisions. The opinion of Bond Counsel is expected to be reproduced on the back
panel of the Bonds over a certification by the City, attesting that the legal opinion was
dated as of the date of delivery of and payment for the Bonds and the copy is a true and
correct copy of the original opinion. The failure to print such legal opinion on any Bond
shall not constitute cause for a failure or refusal by the Purchaser to accept delivery of
and pay for the Bonds.
Vinson & Elkins did not take part in the preparation of the Preliminary Official
Statement nor has such firm undertaken to independently verify any of the information
contained therein, except that, in their capacity as Bond Counsel , such firm has reviewed
the information describing the Bonds in the Official Statement to verify that such
description conforms to the provisions of the Bond Ordinance.
No-Litigation Certificate:
The City will furnish the Purchaser a certificate, dated as of the date of delivery
of the Bonds, executed by both the Mayor and City Secretary, to the effect that no
litigation of any nature is then pending or threatened, either in state or federal courts,
contesting or attacking the Bonds; restraining or enjoining the issuance, execution, or
delivery of the Bonds; affecting the provisions made for the payment of or security for
the Bonds; in any manner questioning the authority or proceedings for the issuance, execu-
tion or delivery of the Bonds; or affecting the validity of the Bonds.
ti
p,
GENERAL CONSIDERATIONS
Sources and Compilation of Information:
The information contained in this Official Statement has been obtained primarily from
the City and from other sources believed to be reliable. No representation is made as to
the accuracy or completeness of the information derived from sources other than the
City. The summaries of the statutes, resolutions, and other related documents are
included herein subject to all of the provisions of such documents. These summaries do
not purport to be complete statements of such provisions and reference is made to such
documents for further information.
certain Underwood, Neuhaus b Co. Incorporated was employed as Financial Advisor to perform
professional serviceStatement, for a fee t be computed por "the ' City;- including compiling of this Official
on each separate issuance of indebtedness, contingent
upon such bonds actually being issued, sold and delivered.
The information contained in this Official Statement in the section entitled "APPEN-
DIX B - Financial Statements of the City" has been provided by Touche Ross b Co.,
Certified Public Accountants, and have been included herein in reliance upon their
authority as experts in the fields of auditing and accounting.
Certification as to Official Statement:
At the time of payment for and delivery of the Bonds, the Purchaser will be furnished
a certificate executed by an appropriate official of the City, acting in his official
capacity, to the effect that to the best of his knowledge and belief: (a) the
descriptions and statements pertaining to the City contained in its Preliminary and final
Official Statements, on the respective dates of such statements, on the date of sale of
the Bonds and the acceptance of the bid therefor, and on the date of delivery of the
Bonds, did not and do not contain an untrue statement of a material fact or omit to state
a material fact required to .be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; and (b) as
of the date of delivery of the Bonds, there have been no material adverse changes in the
City's financial condition and affairs since the date of the Preliminary and final
Official Statements. Such certificate shall not cover any information contained in
APPENDIX A to the Preliminary and final Official Statements or relating to taxing
jurisdictions other than the City, or stated to have been obtained from sources other than
City records or to information supplied to the City by the Purchaser for inclusion into
the Preliminary and final Official Statements. In rendering such certificate the person
executing the certificate may state that he has relied in part on his examination of the
records of the City relating to matters within his own area of responsibility, and his
discussions with, or certificates or correspondence signed by, certain other officials,
employees, consultants and representatives of the City as to matters not within his area
of responsibility.
Updating of Official Statement:
e LitY will eep a ficial Statement current by amendment or sticker to reflect
material changes in the affairs of the City and, to the extent that information comes to
its attention, to the other matters described in the Official Statement, until the
delivery of the Bonds to the Purchaser. All changes in the affairs of the City and other
matters described in the Official Statement subsequent to the delivery of the Bonds to the
Purchaser and all information with respect to the resale of the Bonds shall be the
responsibility of the Purchaser.
This Official Statement was duly authorized and approved by the City Council of the
City of Beaumont as of the date specified on the first page hereof.
/s/ William E. Neild
ayor
City of Beaumont, Texas
ATTEST:
/s/ Myrtle Corne
City Seretary
City of Beaumont, Texas
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