HomeMy WebLinkAboutRES 85-400 R E S O L U T I O N
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the preliminary official statement for the issuance of $6 .7
Million in Refunding Bonds, Series 1985, attached as Exhibit "A" ,
be, and the same is hereby, approved.
PASSED BY THE CITY COUNCIL of the City of Beaumont this
the /l day of 1985.
- Mayor -
a.
$6,700,000
COM" 'ATION TAX ANU REVE'.ilJ_ REFUNDING B')S
SERIES 1965-A
'THE SALE
Bonds Offered for Sale at Competitive Bid:
The City Counci the -Council") 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 $6,700,000 Combination Tax and Revenue Refunding Bonds, Series 1985-A (the
"Bonds").
Bid Opening:
The Council will open and publicly read sealed bids for the purchase of the Bonds at
the City Hail , 801 Main Street, Beaumont, Texas, at 5:30 P. M., Central Standard Time, on
Tuesday, December 3, 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 will 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 BOND'S
Description of Certain Terms of the Bonds:
The Bonds will be dated December 1, 1985, and interest will be paid on March 1, 1986,
and (in each September 1 and March 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 Texas Commerce Bank National Association, Houston, Texas, the paying
agent/registrar (the "Registrar") . Principal of tie Bonds will be paya�,le to the
registered owner at maturity or redemption upon presentation and surrender 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 $ 60,000 1997 $375,000
1988 70,000 1998 400,000
1989 80,000 1999 450,000
1990 90,000 2000 475,000
1991 100,000 2001 525,000
1992 240,000 2002 580,000
1993 250,000 2003 630,000
1994 275,000 2004 700,000
1995 300,000 2005 750,000
1996 350,000 1 r
The Bonds 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 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:
The 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 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 Bonds.
CONDITIONS OF SAFE
Types of Bids and Interest es :
The Bonds will be sold one block on an "all or none" ba_ 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 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
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 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.
Municipal Bond Insurance:
AN APPLICATION HAS BEEN APPROVED BY THE FINANCIAL GUARANTY INSURANCE COMPANY
("FINANCIAL GUARANTY") TO ISSUE A POLICY OF MUNICIPAL BOND NEW ISSUE INSURANCE AS
DESCRIBED IN THE PRELIMINARY OFFICIAL STATEMENT FOR A SINGLE PREMIUM, PAYABLE AT
CLOSING. THE PURCHASER MUST AGREE TO PURCHASE SUCH INSURANCE AT ITS 3WN EXPENSE AS A
CONDITION OF PURCHASING THE BONDS. THE AMOUNT OF THE FINANCIAL GUARANTY PREMIUM MAY BE
OBTAINED FROM FINANCIAL GUARANTY TELEPHONE 212/608=2400.
Good Faith Deposit:
Each bid must be accompanied by a bank cashier's creek payable to the order of "City
of Beaumont", in the amount of $134,000. 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 th,t
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
Delivery of Initial Bonds :
Delivery will be accomplished by the issuance of one Bond for each maturity (the
"Initial Bonds"), either in typed or printed form, in the aggregate principal amount of
$6,700,000, payable to the Purchaser, signed by the Mayor and City Clerk 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 'ts anticipated that Initial Delivery can be made on or
about December 30, 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. Houston Time on or about
December 30, 1985, or thereafter on the date the Bonds are tendered for delivery, up to
and including January 30, 1986. If for any reason the City is unable to make delivery on
or before January 30, 1986, 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.
Exchange .of Initial Bonds:
If the Purchaser furni s to the Registrar, at least fiv 'ays prior to the Initial
Delivery, written instruct ..,ns designating the names in wh ._n 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 registered, exchange 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 nu(�,bers 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. A11
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 Deliver-y-:
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.
Leal 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 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 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 verif,; 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 Bond:
The City will furnish to the Purchaser a certificate, dated as of the date of
delivery of the Bonds, executed by both the Mayor and City Attorney, 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.
No Material Adverse Change:
The o igati on of the P—chaser to take up and pay for the Bonds, and of the City- to
deliver the Bonds, is sub, L to the condition that, at th ime of delivery of and
receipt of payment for the Bonds, there shall have been no mate, lal 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 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.
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, so long as the City is not thereby subjected to any unduly burdensome
regulatory or reporting requirements.
Record gate:
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 Gate 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 & Co. Incorporated,
724 Travis, Houston, Texas 77002.
William E. Neild
Mayor, City of Beaumont
Beaumont, Texas
November 12, 1985
PRELIMINA OFFICIAL STATEMENT DATED NOVEMBEP ?, 1985
Ratings:
Moody's: Aaa (Financial Guaranty Insurance Company)
o Standard & Poor's: AAA (Financial Guaranty Insurance Company)
o This Preliminary Official Statements is subject to completion and amendment and is
CL 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.
� 6,700,000 V
3 THE CITY OF BEAUMONT
b (A home rule city of the State of Texas located within Jefferson County)
o COMBINATION TAX AND REVENUE REFUNDING
c SERIES 1985-A
0
=_ Dated: December 1, 1981
V
o Principal and interest payable at the principal corporate trust office of the Texas
Commerce Bank National Association, Houston, Texas, the paying agent/registrar (the
L "Registrar") . Interest payable March 1, 1986, and each September 1 and March 1 thereafter
a, 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,
o 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
s - preceding each interest payment date (the "Record Date").
MATURITY SCHEDULE
Due September
c U
V
= Initial
Initial
,o Interest Reoffering Interest Reoffering
o Amount Maturity Rate Yield (a) Amount Maturity Rate Yield a
N b $ 60,000 1987 % % $375,000 1997 X
70,000 1988 400,000 1998
v 80,000 1989 450,000 1999 (b)
90,000 1990 475,000 2000 (b)
j 100,000 1991 525,000 2001 (b)
c v 240,000 1992 580,000 2002 (b)
�+ 250,000 1993 630,000 2003 (b)
a v 275,000 1994 700,000 2004 (b)
300,000 1995 750,000 2005 (b)
L V 350,000 1996
U"-
vyi a '�
.a
v
raj—The initial yields will be established by and are the sole responsibility of the
- Purchaser, and may subsequently be changed.
i
(b) The Bonds 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
b date thereafter. If less than all of the Bonds are redeemed at any time, the Bonds
N o to be redeemed shall be selected by the City in multiples of $5,000.
v The above bonds (the "Bonds") will be applied to refund $6,650,000 Waterworks and
> Sewer System Certificates of Obligation, Series 1985 (See "THE BONDS" - Use of
y Proceeds). The Bonds, when issued, will constitute valid and binding obligations of The
W a City of Beaumont (the "City") and will be payable from the proceeds of an annual ad
L valorem tax, levied within the limits prescribed by law, against taxable property within
o the City and further payable from a junior and subordinate pledge of the net revenues of
the City's Waterworks and sewer System.
s o
L PAYMENT RECORD: The City has never defaulted.
O L-
N BOND COUNSEL: Vinson & Elkins, Houston, Texas.
DELIVERY: When issued - anticipated on or about December 30, 1985.
SEALED BIDS TO BE OPENED: Tuesday, December 3, 1985, e M. , Central Standard.
Y
USE r INFORMATION' IN OFFICIAL STATEMENT
No dealer, broker, salesman or other person has been authorized by the City to give
any information 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 BONDS
Sale of the Bonds:
After requesting compe itive bids for the B ds, the City has X the bid
resulti in the lowest net i terest cost, which bid as tendered by a comp sed of First ity National Bank of ouston; Allied Bank o Texas; Lovett,
Garri on and Webb d Trust Company Ban as Jt. Managers in s0ciation witManhat an Capital Mark s Corporation and Fi t National Bank of Chi
go as Jt. Maurchase )to purchase t Bonds bearing the terest rates shown u er "MATURIE" at price of the pa value thereof, plus trued interest
to the date of dThe net effective interest to on the Bonds was .258399% as calculate ursuanicl 717k-
2 of Vernon's Annotat Texas Civil Statute
Marketability:
The City has no understanding with the nurchaser 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
tran--ferred. 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.
Municipal Bond Ratings:
The City has made application to Financial Guaranty Insurance Company to issue a
commitment for a policy of municipal bond guaranty insurance as described below for a
single premium, payable at closing, and the Purchaser must agree to purchase such
insurance at its own expense as a condition of purchasing the Bonds.
It has been the policy of Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's Corporation ("Standard & Poor's") to rate all new issues of municipal bonds insured
by Financial Guaranty Insurance Company "Aaa" and "AAA" respectively. It is presently
anticipated that such ratings will be issued to the Bonds on or about the delivery of the
Bonds. An explanation of the significance 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 or the ratings may have an adverse effect on the market price of the Bands.
3
Bond Insurance:
The following is disclosure language from Financial Guaranty Insurance Company:
Concurrently with the issuance of the Bonds, Financial Guaranty Insurance
Company ("Financial Guaranty") will issue its Municipal Bond New Issue Insurance
Policy for the Bonds (the "Policy"). The Policy unconditionally guarantees the
payment of that portion of the principal and interest on the Bonds which has
become due for payment, but sha11 be unpaid by reason of nonpayment by the
Issuer. Financial Guaranty will make such payments to Citibank, N.A., or its
successor as its agent (the "Fiscal Agent"), on the later of the date on which
such principal and interest is due or on the business day next following the day
on which Financial Guaranty shall have received telephonic or telegraphic
notice, subsequently confirmed in writing, or written notice by registered or
certified mail, from an owner of Bonds or the Registrar of the nonpayment of
such amount by the Issuer. The Fiscal Agent will disburse such amount due on
any Bond to its owner upon receipt by the Fiscal Agent of evidence satisfactory
to the Fiscal Agent of the owner's right to receive payment of the principal and
interest due for payment and evidence, including any appropriate instruments of
assignment, that all of such owner's rights to payment of such principal and
interest sha11 be vested in Financial Guaranty. The term "nonpayment" in
respect of a Bond includes any payment of principal or interest made to an owner
of a Bond which has been recovered from such owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with a final ,
nonappealable order of a court having competent jurisdiction.
The Policy is non-cancellable and the premium will be fully paid at the
time of delivery of the Bonds. The Policy covers failure to pay principal on
the Bonds on their respective stated maturity dates, and not on any other date
on which the Bonds may have been accelerated, and covers the failure to pay an
installment of interest on the stated date for its payment.
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation, a
Delaware holding company. FGIC Corporation is owned by the following investors
or affiliates thereof: General Electric Credit Corporation, General Re
Corporation, Lumbermens Mutual Casualty Company (affiliated with the Kemper
Group), Shearson Lehman Brothers Inc., Merrill Lynch & Co., Inc., J.P. Morgan &
Co. Incorporated and Gerald L. Friedman. The investors of FGIC Corporation are
not obligated to pay the debts of or the claims against Financial Guaranty.
Financial Guaranty is domiciled in the State of New York and is subject to
regulation by the State of New York Insurance Department. As of March 31, 1985,
the total capital and surplus of Financial Guaranty was approximately
$116,700,000, as reported to the State of New York Insurance Department.
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
T-axas located within Jefferson County.
The Bonds . . . . . . . . . . . . . . . . .. .. ,700,000 Combination Tax and Revenue Refunding Bonds,
reries 1985-A, dated December 1, 1985; various amounts due
September 1, 1987 through 2005.
Payment of Interest. . . . . . . .. . . March 1, 1986, and each September 1 and March 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 within the
limits prescribed by law and further payable from a junior
and subordinate pledge of thenet revenues of the City' s
Waterworks and Sewer System.
Other Characteristics . .. . . . . . The Bonds are issued in fully registered form in integral
multiples of $5,000. The Bonds are optional for
redemption, at par plus accrued interest in whole or in
part on September 1, 1998, or any date thereafter.
Use of Proceeds. . . . . .. . . . . . . Proceeds from the sale of the Bonds are to be used to
refund certain outstanding certificates of obligation of
the City. The proceeds will also be used to pay costs
incurred in the issuance of the Bonds. See "THE BONDS Use
of Proceeds".
Bond Ratings. . . . . . . . . . . . . . . . . . Moody's Investors Service, Inc. (Financial Guaranty). . "Aaa"
Standard & Poor's. (Financial Guaranty). . . . . . . . . . . . . . . "AAA"
Population. . . . . . . . . . . . . . . . . . . . 1985 Estimate - 11.8,111.
- Financial Highlights -
(Unaudited)
1985 Certified Assessed Valuation (100% of Estimated Market Value) . . '861,002,595
1984 Certified Assessed Valuation (100% of Estimated Market Value). . . . . $2,588,372,712
Direct Ad Valorem Tax Debt
Outstanding Debt (as of November 1, 1985) . . . . . . . . . . . . . . . .. . . . . . . . . . S 72,755,000 (a)
TheBonds. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61700,000
Total Direct Ad ValoremTaxDebt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . T--79,455,000
Less: Self-Supported Debt.. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . $ 13 958,650 (b)
Direct Ad Valorem Tax Debt. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 65,496,350
Estimated Overlapping Debt. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. $ 27 198,957
Total Direct and Estimated Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,695,307 Ik
Interest and Sinking Fund (as of November 1, 1985). . . . . . . . . . . . . . .. . . . .. $ 720 500
% of 1985 Certified % of 198", Per
Debt Ratios: Assessed Valuation Assessed Valuation Capita
Direct Debt...................................... 2.281% 2.53% $5 55
Direct and Estimated Overlapping Debt............ 3.23% 3.58% $785
Annual Requirements:
Average (Fiscal Years 1986/2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 8,779,341`/
Maximum (1989). . . .. . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,524,533 ✓
Tax Collections:
Arithmetic Average, Tax Years (1980/1984) - Current Year. . . . . . . . . . .. . . . . . . 96.92%
- Current and Prior Years. . . . . . . 98.68%
a Exclusive of bonds being refunded.
(b) See "Debt Statement - Revenue Support of Ad Valorem Tax Debt.
SPECIAL CONSIDERATIONS
Loss of Cit Funds and Cura ? Actions by the City:
On March 4, 1985, the Uity learned that E.S.M. Government „�!curities, Inc. ("E.S.M. ") had
been put in receivership by the United States Securities and Exchange Commission in a
proceeding in the United States District Court for the Southern District of Florida. The City
determined that it had confirmations reflecting the purchase by it from E.S.M. of 520,000,000
worth of government securities which were subject to repurchase agreements with E.S.M. that
were outstanding. This represented approximately two thirds of the City's net cash balance as
of such date. The City purchased such securities from E.S.M. through E.S.M. 's broker in New
York, First Money Managers, Inc. Pursuant to instructions from First Money Managers, Inc. , the
City had wired its funds to the Bradford Trust Company in New York City. The City received no
safekeeping receipts from Bradford or any other party. Neither the funds so lost nor the
earnings therefrom are available to the City for application to their various budgeted
purposes. The City is pursuing several legal actions to attempt to recover its loss. There
can be no assurance that the funds so lost will be recovered.
The City was granted leave to intervene in the SEC receivership suit in the United States
District Court for the Southern District of Florida. The City has filed a claim for its loss
with the receiver for E.S.M. The receiver of E.S.M. was granted permission to place E.S.M. in
a bankruptcy liqudation under Chapter 7 of the Bankruptcy Code. The City has filed a motion to
have E.S.M. liquidated pursuant to the stockbroker liquidation provisions of Subchapter III of
Chapter 7 of the Bankruptcy Code. The City believes that it and most of the other municipal
creditors will recover a larger amount of their claims if E.S.M. is liquidated as a stockbroker
rather than as an ordinary debtor under Chapter 7 of the Bankruptcy Code. The City's motion
was opposed by several of the other claimants, including American Savings and Loan Association
of Florida. On June 20, 1985, an order was entered by the District Court granting the City's
motion. American Savings and Loan Association of Florida has filed a notice of appeal of this
order.
The City filed suit in the United States District Court for the Southern District of
Florida against E.S.M. 's auditors, Alexander Grant & Co. , and against Bradford Trust Co.
The City filed a lawsuit against Touche Ross & Co. , based upon its audit of the City's
September 30, 1984 financial statements. Touche Ross & Co. has resigned as auditor for the
City but has not withdrawn the Audit Letter. Legal action by the City against other third
parties is also under review.'
As a result of the E.S.M. investments, losses of $7,344,533, $6,156,732, and $6,498,735
were reallocated by resolution of the City Council to the General Fund, the Water Utility Fund
and the Transportation Improvement Fund, producing deficits of approximately $2,300,000 and
$1,500,000, respectively, in the General Fund and the Transportation Improvement Fund. The
City Council allocated such losses in this manner since these three funds were the only funds
which had investments with E.S.M. In making the allocation, the City Council elected to
allocate the losses in the Water Fund and Transportation Improvement Fund to their cash
balances at that time and apply the remaining loss to the General Fund.
In response to these losses, the City has imposed a ge;.eral' hiring freeze, cancelled all
equipment purchases, deferred all capital improvement .programs for which fund balances were not
available, applied reserves in certain of the funds to reduce losses, reappropriated revenue
sharing and general improvement funds, curtailed or reduced certain services provided by the
City, instituted strict budgetary controls to decrease City spending generally, and promulgated
procedures and guidelines for investment of City funds. Additionally, in May of 1985 the City
sold $6,650,000 of certificates of obligation to the Texas Water Development Board in order to
provide funds for on-going water and sewer projects.
By the 'end of �(Vr-rem fiscal year i-f September -of 1985, t-he City estimates that the
deficit i 3aansport an__Lmprovement—Fund--wi-H—be--e+1-mi7rated-assum!rrg~-the—Bands—are--i-sued--
isiS.e�tem er �, nd_.-that__ he General Fund will l l re-fleet a---def+c+t- of approximately $ .r,"►a0
Howe ver;°therecan°beno—assurance—that- -such--deficits--wi 1-1—be—e-"minated--o-,^—reduced--p-r-for—to
tha-t--time_ Moreover, the City expects to continue indefinitely the restrictive fiscal
policies, limitations and controls previously implemented. If the City is unable to eliminate
the deficits resulting from the E.S.M. losses or to obtain the necessary funds for previously
deferred or cancelled improvement programs or purchases or curtailed or reduced services,
either through continuation of such policies, limitations and controls or as a result of
recoveries in the pending litigation, then further limitations and controls may have to be
imposed and the City may have to use ad valorem tax receipts or revenues from other sources for
these purposes. Since the City's- revenues from other sources (inq�uOing sales tax receipts)
are approximately AA- percent below those ,,budgeted during the eAi-rren-t fiscal year, it is
possible that any such ad valorem,' tax receipts would have to be provided through increases in
the ad valorem tax rate.
6
THE BONDS
Description of the Bonds:
The Bonds are dated December 1, 1985, bear interest from such date at the stated interest
rates indicated under "MATURITY SCHEDULE", which interest is payable March 1, 1986, and each
September 1 and March 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. The
Bonds 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 date thereafter.
Principal of and interest on the Bonds are payable at the principal corporate trust office of
the Texas Commerce Bank National Association, Houston, Texas. 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 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. 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 precediAg such interest payment date.
It will be required 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 Payment:
The Bonds, together with other outstanding debt on a parity with the Bonds (the
"Outstanding Debt") , are payable as to principal and interest 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 and further payable from
ajunior and subordinate pledge of the net revenues of the City's Waterworks and Sewer
System. 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:
COPY TO COME
7
Use of Bond Proceeds:
The Bonds are being issued to provide funds to refund $6,650,000 Waterworks and Sewer
System Certificates of Obligation, Series 1985. 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 Borrowing:Fo 1ow1 ing the issuance of the Bonds, there will remain $13,30 0400 of authorized but
unissued bonds. Proceeds from these bonds may not be sufficient to complete all
originally contemplated street and drainage improvements. It is currently anticipated
that such remaining bonds will be issued in 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 , ire-C-i-tyI s--
Qr�s,ent--�rl-arcs-_.f.ot._..�a�-lta.1._i.mpr-ovemeats—ca-1-l--fflr--the--'rssuarr�e;--cfurirtg-i4Sb;o#—apprvx-r-
maiel,y i6-,-750;1104--cer-�--if-i•cetes--of-.abl-i-gat-lor�fo�.-coast-+�trctron--af-°°am�°art-�►useum�---The-£-ity-
a.lso has.-_.p.-lans--f-o►,-expans°Yon-of--+ts-ex-i-sti-ng-Riverfroot-Par"- The City also anticipates
that expenditures will have to be made for periodic improvements to the water and sewage
system pursuant to a master plan now being developed and that amounts may have to be
expended for the City's wastewater treatment facilities. See "OTHER CONSIDERATIONS--
Capital Improvements". 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 in subsequent fiscal years 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.
The City's ability to issue bonds and to incur borrowings for the foregoing purposes
may be adv?r�Ply affected by the recent loss of City funds. See "SPECIAL CONSIDERATIONS"
- "Loss of City Funds and Curative Actions by the City".
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, alt 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
require6 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.
Le al Investments in Texas:
Article 717k-6, Vernon's Annotated 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.
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 Def- It:
The Bon Ordinance obl ces the City annually to assess a collect ad valorem taxes
sufficient to pay principal and interest when due on the Bonus, 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.
DEBT SERVICE SCHEDULE
The following sets forth the principal and interest on the City's outstanding bonds,
certificates of obligation, and the Bonds (assuming an average interest rate of 9.50% on
the Bonds.
Self-Supported
Fiscal Year Outstanding Total New Ad Valorem Tax
Ending Ad Valorem Less: Debt Service The Bonds $6,700,000 Ad Valorem Debt Included
9-30 Tax Debt a on Refunded Bonds Principal Interest Tax Debt In Total
9386 $ 8,700,816 S 787,159 $ 77-95- $ 8,T9-r,5 2 S 1,403,/'�8(-
1987 8,728,049 621,441 $ 60,000 63 8,803,108 1,865,472
1988 12,219,412 4,121 70,000 30 80 8,798,771 1,876,312
1989 12,264,574 4 191 80;000 6 9,524,533 / 1,877,090
1990 7,984,583 90,000 616,550 8,691,133 1,872,835
1991 7,948,258 100,000 608,000 8,656,258 1,856,780
1992 7,817,645 240,000 598,500 8,656,145 1,858,400
1993 7,831,071 250,000 575,700 8,656,771 1,842,713
1994 7,292,171 275,000 551,950 8,119,121 1,330,063
1995 7,294,871 300,000 525,826 8,120,697 1,321,639
1996 8,291,183 350,000 497,326 9,138,509 1,338,889
1997 8,303,813 375,000 464,076 9,142,889 1,335,089
1998 8,028,388 400,000 428,450 8,856,838 1,048,862
1999 8,023,195 450,000 390,450 8,863,645 1,055,800
2000 8,028,730 475,000 347,700 8,851,430 1,042,250
2001 8,030,620 525,000 302,576 8,858,196 1,049,976
2002 8,030,000 580,000 252,700 8,862,700 1,056,600
2003 8,034,513 630,000 197,600 8,862,113 1,053,713
2004 8,037,863 700,000 137,750 8,875,613 1,069,913
2005 8,036,063 750 000 71 250 8 857 313 1,052,913
MI6-$ $18 , T� 6� W9 86 9 '1
Average Annual Debt Service Requirements (1986/2005) . . . . . . . . . . . . .$ 7,368,886 (b)-
Average Annual Debt Service Requirements (1986/2005). . . . . . . . . . . . . . . .$ 8,779,341
Maximum Annual Debt Service Requirement (1989),, , , , , , , , , , , , ,, , , , , , , ,$ 9,524,533,f
a Inclusive of Self-Supported Ad Valorem Tax Debt Service.
(b) Self-Supported Ad Valorem Tax Debt Service.
DEBT STATEMENT
General :
The following tables and calculations relate to the Bonds 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 oelow 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.
9
'4�5-�w)
Bonded Indebtedness:
1985 Certified Assessed Valuation
(100% Estimated Market Value) . . . . . . . . . . . . . . . . . . . . . . . . ... . $2,867,002,595 (a)
1984 Certified Assessed Valuation
(100% Estimated Market Value). . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,588,372,712
Direct Ad Valorem Tax Debt
Outstanding Debt (as of November 10, 1985). . . . . . . . . . . . . . . S 72,755,000 (a)
The Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,700 000
Total Direct Ad�Valorem Tax�Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,455,000
Less: Self Supported Debt. . . . . . . . . . . .. . . . . . . . . . . . . .. . . . . $ 13 9 958 650 (b)�
Total Ad Valorem Tax Debt. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . .
Interest & Sinking Fund Balance (as of November 1, 985). . . . .
a Exclusive of bonds being refunded.
(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 o igation are being paid from
revenues other than ad valorem taxes. Including the Bonds, $13,958,650 of such bonds and
certificates of obligation are presently outstanding, and their debt service requirements
have traditionally been paid with amounts 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:
I-"-__ Fiscal Year Ended September 30
L 994 1983 1982 1981. 9
Transfer from other funds to / ! '
Debt S€�rvice Fund............. 911,�, $89',375 i70is,852 $559,700 $668,0=7 $7113,031
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 th? 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.
Net Debt Overlapping
Taxing Jurisdiction as of 11-1-85 Percent Amount
Beaumont Independent School District 6,295,O 58.66 $ ,692,64
Jefferson County 22,300,000 24.60 5,485,800
Jefferson County Drainage District No. 6 15,500,000 74.25 11,508,750
Port of Beaumont Navigation District 9,200,000 70.78 6,511,760
TOTAL ESTIMATED OVERLAPPING DEBT $ 27,198,957
The City 65,496,350
TOTAL DIRECT AND ESTIMATED OVERLAPPING DEBT $ 9216951307 '
Debt Ratios: Direct and
Estimated
Overlapping,
Direct Debt j Debt
Per 1985 Certified Assessed Valuation ($2,867,002,595).. . . . �v 3.23%Per 1984 Certified Assessed Valuation ($2,588,372,712).. . . . 2.53% � 3.58%
Per Capita (118,111). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $555 ✓ $785
10
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 -
Since 1982, the City has contracted with the Jefferson County Tax Assessor-Collector
7 �
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.
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 time':y 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 owed to other taxing units, adverse market conditions,
taxpayer redemption rights, or bankruptcy proceedings which restrain the collection of the
taxpayer's debt.
- Taxation Procedures -
Since 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 City 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 reappraisal was completed for the 1985 tax roll . The Appraisal
City is required to assess all property within the City 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 current 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.
� S—V" 12
Historical Analysis of Ad Valorem Taxation :
- Collection Ratios -
Tax Rate Per % Tax Collections
Tax Assessed $100 Assessed Adjusted Current Current & Fiscal Year
Year Valuation Valuation Tax Lev Year Prior Years Ending 9-30
T9 8 $ bT�d T4 5 �� $� 1 9 9 - 7 9
1979 728,134,250 1.87 13,616,110 96.23 97.84 1980
1980 799,830,460 1.87 14,956,830 97.04 99.12 1981
1981 1,553,040,314 (a) 1.12 17,266,590 96.43 98.07 1982
1982 2,391,880,308 (b) .75 17,939,102 98.66 98.87 1983
1983 2,529,125,360 .76 19,213,753 95.81 97.73 1984
1984 2,588,372,712 .78 20,182,617 96.67 99.67 1985(c)
1985 2,867,002,595 .69 19,782,347 x x 1986
a Increase in assessment ratio from 60% to 100%.
(b) Revaluation.
(c) Unaudited figures.
- Tax Rate Distribution -
Tax Year
985 984 98 198 98 98 1979
X97$
General Fund •J/4 41 $0.51 $0.51 $0.51 $0.79 $1.33 $1.33 $1.33
Interest &
Sinvirg Fund �xs 27 25 24 33 54 54 54
Total (oq I TF7r .
Tax Base Distribution -
Type of Property 1984 Tax Roll % 1985 Tax Roll %
Residential $1,515,308,226 55.37 $1,687,348,260 55.82
Vacant Platted Lots/Tracts 104,072,705 3.80 109,474,830 3.62
Minerals 28,126,300 1.03 17,892,550 0.60
Commercial & Industrial 561,960,990 20.53 636,296,840 21.05
Banks 33,635,400 1.23 -0- -0-
Utilities 185,978,655 6.80 202,802,440 6.71
Business Personal 286,457,277 10.47 342,749,685 11.34
Vehicles & Other Personal 21,235.480 77 26 106 380 0.86
Gross Value 5,03 ?`� tom. ,9 a' Tff.00
Less: Exemptions 148.402,321 155,668,390
Net Value 22,712 $2 67
Principal Taxpayers -
Assessed Valuation
Taxpayer Type of Property 9 Tax Roll 985 Tax Roll
ulf State Utilities y Electric Utility $8i, 59,99* $95,528,16
Southwestern Bell Telephone Utility 73,887,970 76,337,600
Dresser Industries, Inc. Manufacturing 21,826,940 19,750,290
Beaumont Medical &
Surgical Hospital Hospital 18,272,340
Betz Laboratories Chemical Properties 10,754,130 14,531,080
Parkdale Mall Shopping Center 14,398,410 14,431,300
Holidome, John Q. Hammonds Hotel-Motel 15,828,360 14,302,390
InterFirst Bank Bank 13,939,860
N. L. Shaffer 13,528,050
DuPont 13,157,058
N. L. Petro Services Chemical Properties 15,173,510 -x-
Entex, Inc. Gas Utility 7,987,870 _X_
J. C. Penney Company Department Store 7,432,240 -x-
Joske's Department Store 7,051,120 -x-
Total Top Ten Taxpayers Assessed Valuation $255,800,540 $293,778,148
% of Assessed Valuation to Respective Tax Roll 9.88% 10.25% I{
It tI
Tax Adequacy - ✓
Average Annual Debt Service Requirements (1986/2005). . . . . . . . . . . . . . . . . . . . $ 8,779,341
(assuming 9.50% interest on the Bonds)
Tax Rate of $0.325 per $100 assessed valuation against
the 1985 Assessed Valuation, at 95% collection, produces.. . . . . . . . . . $ 8,851,871
Average Annual Debt Service Requirements (1986/2005) . . . . . . . . . . . . . . . . . . . . $ 7,368,886 (a)
(assuming 9.50% interest on the Bonds)
Tax Rate of $0.275 per $100 assessed valuation against
the 1985 Assessed Valuation, at 95% collection, produces. . . . . . . . . . . S 7,490,044
Maximum Annual Debt Service Requirements (in the year 1989) . . . . . . . . . . . . . $ 9,524,533
(assuming 9.50% interest on the Bonds)
Tax Rate of $0.350 per $100 assessed valuation against
the 1985 Assessed Valuation, at 95% collection, produces. . . . . . . . . . . $ 9,532,784
a Less Self Supported Ad Valorem Tax Debt Service.
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.
1985 Tax Estimated
Taxing Jurisdiction Rate/$100 1985 Tax Bill_
The City $0.6900 $ 517.50
Beaumont Independent School District .9000 675.00
Jefferson County .225 168.50
Jefferson County Drainage District No. 6 .19539 146.54
Port of Beaumont Navigation District .0570 42.75 .,"
Estimated Total 1985 Tax Bill $1550.54
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, currently remits the
City's portion of sales tax collections monthly. By statute the Comptroller is required
to remit at least twice annually. 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 % o Act
Ended 9-30 Receipts Tax Year Equivalent Tax Lev
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 i 50.49
1983 8,627,153 (1982) .361 r 48.09
1984 9,456,086 (1983) .374 49.22
1985 ) 1984) -
During the current fiscal year, sales tax revenues are approximately below
those anticipated through 9-30-85.
a Unaudited collections through September 30, 1985.
-- �a
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 Bonds.
The Industrial District, the industry within, their contract dates and current
payment are as follows:
Contract Annual Payment T985
Industrial District Expires 1948
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 & Co......................... 12-31-87 851,547 953,730
Gulf States utilities Co............................. 12-31-87 177,493 205,793 (b)
Goodyear Tire & Rubber Co............................ 12-31-87 355,515 398,180
Olin Corp.... .................................. 12-31-87 46,239 51,790
12-31-87 123,644 138,480
Amoco Texas Refining.................................
31-87 121 515 136 100
Pennwalt Corp........................................ 12-
TOTAL........................................... 1 X14
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 Equivalent Tax Rate x of Act-ual
Ended 9-30 Contracts Tax Year E +': Tax 58e% x
978 $3,045,025 .416 24.14
1979 3,031,231 (1978) .383 22.47
1980 3,059,879 (1979)
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 5,735,193 (1984) .222 28,42
Tax Increment Reinvestment Zone:
In 1962, 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 debt (including the
Bonds). Tax increments set aside for public improvements in the City's zone will be
approximately $125,000 during 1985. The zone was set up with a life of 21 years. The
taxable assessed valuation of property within the District was approximately $40,311,890 �----
or 1.69% of the taxable assessed valuation of the City at the time of determination.
SELECTED FINANCIAL DATA
i
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
985 a 1984 1983 98 9 980
RE''i'ENUES
Property Taxes............ 11 r3 3 4 3 $12,601,094 $11,750,575 $11,774,351 $10,543,631 $ 9,320,422
Other Taxes (b)................-1 1� -L 13,340,337 12,534,239 11,628,728 10,104,997 8,568,612
Industrial District Contract
Payments..................... +'� 7 5a 5,114,045 4,837,783 4,591,139 4,275,225 3,059,879
Licenses and Permits........... 640,219 447,647 340,734 406,102 372,996
Charges for Services........... 8 , / _485,421 310,687 250,681 222,959 334,145
Intergovernmental Revenues..... 3, ! O-_2,480,653 2,409,810 1,514,305 1,665,513 1,810,663
Fines and Forfeits.............. jt-8 5: �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..............-- �7 - 8, 8 X649 �,
EX?ENDITURES O q O ►
General Government....... .... J. . , $ 3,361,945 $ 1,519,755 $ 1,306,712 $ 1,1595985 $ 1,081,028
Finance........................ � 1,664,990 768,275 1,048,093 1,295,035 1,088,499
Police..................... ...-lop t8 i__ 9,211,131 9,041,379 8,212,074 7,264,769 6,253,356
Fire....................... 71901111 451 8,151,746 7,429,268 6,608,043 5,954,185 5,506,029
Traffic. and Transportation..... -;qty W1, 2,070,704 2,272}732 2,0?5,882 1,599,651
Public Works................... 5,168,419 5,138,992 4,666,453 4,319,153 3,652,971
Code Enforcement............. 1/3j 7 1,985,993 1,230,775 1,231,452 1,095,944 900,792
Parks and Recreation........... d,40 q,Sq 2,024,076 1,796,315 1,604,182 1,427,863 1,264,215
Community Services.............- '� sl t? 2,521,036 2,090,202 1,712,853 1,421,907 1,159,426
Community Facilities....... 0� ---965,982 927, (c)
436 (c) (c)
General Service.................---_------0- (e) 1,346,251 1,327,481 1,143,657 1,855,345
Building Maintenance.......... ---------0- (e) 1,525,930 1,325,870 1,280,290 (d)
Capital Improvements........ — - -0- -0- -0- -0- 3,906,000
Nun-Departmental............. - 500 000 723,942 1 057,601 347,456 599 968
Total Expenditures.......,..; 707. 5�609
,373,5 6 895,�6 8,8 7,28
ESm CDSS4 ,53_
71)Unaudited amounts. `�
(1,D) Includes Sales and Use Taxes, Street Rentals and penalties and interest on delin quent
taxes.
Does not include income and expenditures from solid waste disposal and community
facilities accounted for in separate funds from 1980 through 1982, inclusive.
( :I) Building Maintenance included in General Services prior to 1981.
(rt) Included in General Government and Finance in 1984.
Gcaneral Fund and Debt Service Fund Balance for the Past Five Fiscal Years:
Fiscal Year Ended September 30
1IL5 Lai 1984 98 9 2 1981 1980
General Fund....................:.. $3,538,763 (b) $1,907,798 ($ 184,823) $ 759,649 $1,945,797
Debt Service Fund...............4. $2,407,460 $4,063,258 $6,028,639 $5,213,486 $3,776,540
Iii Unaudited amounts.
(h) See - "SPECIAL CONSIDERATIONS - Loss of City Funds and Curative Actions by the City" .
_Financial Statements:
A copy of the City's Financial Statements for the fiscal year ended September 30,
11984, is attached hereto in the APPENDIX B. Copies of such statements for preceding years
are available, for a fee, upon request.
16
SELECTED FINANCIAL DATA
Historical 0 erations of the Cit 's General Fund:
The following 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 Bonds.
Fiscal Year Ended September 30
98 a) 1984 1983 98 980
REVENUES
Property Taxes................. $12,601,094 $11,750,575 $11,774,351 $10,543,631 $ 9,320,42.2
Other Taxes (b)................ 13,34-0,337 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 2880022449 9999,340
Total Revenues.............. �?, y8, 89 $3�,3$7M ,
EXPENDITURES
General Government............. $ 3,361,945 $ 1,519,755 $ 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 9,041,379 8,212,074 7,264,769 6,253,356
Fire........................... 8,151,746 7,429,268 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 5,138,992 4,666,453 4,379,153 3,652,971
Code Enforcement............... 1,985,993 1,230,775 1,231,452 1,095,944 900,792
Parks and Recreation........... 2,024,076 1,796,315 1,604,182 1,427,863 1,264,215
Community Services............. 2,521,036 2,090,202 1,712,853 1,421,907 1,159,426
Community Facilities........... 965,982 927,436 (c) (c) (c)
General Service................ -0- (e) 1,346,251 1,327,481 1,143,657 1,855,345
Building Maintenance........... -0- (e) 1,525,930 1,325,870 1,280,290 (d)
Capital Improvements........... -0- -0- -0- -0- 3,906,000
Non-Departmental............... 500 CCO 723.94 1 057 601 347,456 599 968
Total Expenditures........ `�0,�'") �� 0 5, 9, $� 8, 96,-I $ $,8b7,28
(a) Unaudi ted amounts.
(b) Includes Sales and Use Taxes, Street Rentals and penalties and interest on delinquent
taxes.
(c) Does not include income and expenditures from solid waste disposal and community
facilities accounted for in separate funds from 1980 through 1982, inclusive.
(d) Building Maintenance included in General Services prior to 1981.
(e) 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
9 a) 1984 1983 9 98 980
General Fund.................... $3,538,763 (b) $1,907,798 ($ 184,823) $ 759,649 $1,945,797
Debt Service Fund...............Y t,o $2,40 7,460 $4,063,258 $6,028,639 $5,213,486 $3,776,540
i �
a Unaudited amounts.
(b) See - "SPECIAL CONSIDERATIONS - Loss of City Funds and Curative Actions by the City".
Financial Statements:
A 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.
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 g
an election held on August 13, 1983, the voters of the City approved amendments to the _L( £j
City Charter effective January 1, 1984, providing for a city council composed of seven � Lt°
members, including the Mayor, three 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(a) Building Contractor
Joseph D. Deshotel Mayor Pro Tem April, 1986 Attorney
Nell Pruitt Weisbach Councilman 'Ward 1 April , 1987 Housewife
Mike Brumley Councilman Ward 2 April , 1987 Prehearing Examiner/Texas
Industrial Accident Board
Audwin Samuel Councilman Ward 3 April , 1987 Salesman/Savin Corp.
David W. Moore Councilman Ward 4 April, 1987 Salesman/Xerox Corp.
G. Wayne Turner Councilman-At-Large April, 1986 Supervisor/Sunoco Marine
Terminal, Inc.
(a) See "OTHER CONSIDERATIONS - City Elections."
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:
City Manager - Karl Nollenberger - Mr. Nollenberger resigned as City Manager
effective October 1, 1985. He has been retained as a consultant by the City through
December 31, 1985. Mr. Nollenberger became city manager in June 1983.
Interim C�iit�y Manager - C. A. Shelton - Mr. Shelton was appointed Interim City Manager
on August 61 1985. He will remain in that position until the City retains a full-time
City Manager. Mr. Shelton has been with the City for 35 years and is currently employed
as Fire Chief.
Assistant CitX 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 - Betty J. Dunkerley - Ms. Dunkerley is a graduate of Southern
Methodist University (B.A. 1958). Ms. Dunkerley is a certified public accountant with
nine years experience in government accounting and finance. She is a member of the Texas
Society of Certified Public Accountants.
City Attorney - Lane Nichols is a graduate of Lamar „niversity (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 City Clerk since 1972. She is a member of the Institute of Municipal Clerks and
the Texas Election Officials Association.
Consultants :
-TFieCity has retained several consultants to perform professional services in
connection with the independent auditing of its books and records and other City
activities. The City Council accepted a proposal from Peat, Marwick, Mitchell & Co. to
audit the City's financial statements for the current fiscal year. Several of these
consultants are identified below:
Financial Advisor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Underwood, Neuhaus & Co. Incorporated
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 States Supreme Court held in American Bank & Trust Co. v. Dallas
County that Texas taxing entities, including the City, may not include the va ue of United
tates obligations in the computation of the value of bank capital stock which is subject
to ad -valorem taxation under Texas law. ThQ City has re,antly settled a sui, slating to
the value of bank stock for ad valorem tax purposes. The settlement will allow the City
to retain approximately $1,500,000 of the $2,000,000 reserved for the suit.
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 Certificates.
For a description of the litigation resulting from the E.S.M. losses, See "SPECIAL
CONSIDERATIONS - Loss of City Funds and Curative Actions by the City".
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 wastewater 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 wastewater treatment facilities until the completion of a hearing process which is
currently underway. Therefore, it is not known 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 propc-;_d 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 expenditures for these improvements or
use ad valorem tax receipts or revenue from other sources in order to provide the
necessary funds.
lA
The 69th session of the Texas Legislature has just adjourned. The City does not
presently know of no legislation which will have a significant impact on the City's
operations or its ad valorem taxes.
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
?00-year flood plain (areas with 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 66% 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 aversely affect assessed valuations.
OTHER CONSIUERATIONS
Capital Improvements:
After issuance of the Bonds, the City will have $2,000,000 of authorized but unissued
bonds available for street improvements and $11,300,000 of authorized but unissued bonds
for drainage improvements. It is contemplated that the remaining bonds will be issued in
September, 1986. See "THE BOND - Future Borrowing".
The City anticipates that additional expenditures may have to be made for
improvements to its water and sewage 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 ry the City during the late
summer and fall of 1985.
The City may have to make certain improvements to its wastewater treatment facilities
to complj 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".
As a part of the art museum project, the City also has plans to expand its existing
Riverfront Park. It is currently projected that the expansion will begin in 1987 at an
estimated cost of $1,000,000.
Pension Fund:
A T1 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
e�nefits for calendar year 1984, was set at 5.18% of each participant's salary as
determined by the 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 prier 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 un er 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.
19
Collective Bargaining:
Police officers and firemen employed by the City have collective bargaining r}g s
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 an the surrounding area are currently experiencing the effects o a
economic recession, caused in larga part by a decline in the petroleum and related
chemical industries. The recession has, and until abatement will continue to, adversely
affect governmental revenues and receipts, income levels, property valuations, entry of
new businesses and success of existing enterprises, and other economic conditions
generally within the City and the surrounding area.
tcertified etition seeking the recall of Mayor William E. Nield has been presented and
by the City Clerk. The Mayor will face a recall election on November 5, 1985
e resigns prior to that date.
_. LEGAL _--
Lts -al 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
in the
the unqualified approving opinion of the Attorney General of Texas, as re oor the effect
Bond Register of the Comptroller of Public Accounts of the State of Texas,
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 taxation under existing statutes,
regulations, published rulings and court decisions. The opinion of Bond Counsel is
ting that the legal opinion to be reproduced on the back panel of the Certificates over a certification by
the City, atteion 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
nln� failure print opinion Bond shall not constitute cause
t delivery of and pay for the
forafailure orrefusalby the Purchaser
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 Ordinance.
No-Liti ation Certificate:
The City Will Turnish the Purchaser a certificate, dated as of the date of delivery
of the Certificates, executed by both the Mayor and City Attorney, 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.
GENERAL CONSIDERATIONS
Sources and Com ilation of Information:
The in ormation 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.
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 indebtedness, contingent
upon such Certificates actually being issued, sold and delivered.
Certification as to Official Statement:
At the time of payment for and ivery 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:
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 Bonds to the Underwriters. 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 he 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 Coney
City Clerk
City of Beaumont, Texas
�� 21
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 —T9-8-lf— � M5
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 & Co......................... 12-31-87 851,547 953,730
Gulf States Utilities Co............................. 12-31-87 177,493 205,793 (b)
Goodyear Tire & 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
PE,nnwa?t Core<,,d:....:. : ............................ 12-31-87 1 6 1
121 515 D
TOTAL..'
OTAL........................................... 1 �
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 Equivalent Tax Rate of Actual
Ended 9-30 Contracts Tax Year �Equivalent TaxLev-
978 $3,045,025 - (1977) $0.45
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 5,735,193 (1984) .222 28.42
Tax Increment Reinvestment Zone:
In 982, 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 debt (including the
Bonds). Tax increments set aside for public improvements in the City's zone will be
approximately during 1985. The zone was set up with a life of 21 years. The
taxable assessed valuation of property within the District was approximately $40,-311,890
or 1.69% of the taxable assessed valuation of the City at the time of determination.3?--.-'-
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:
The City wi 1 keep the Official Statement current by amendment or sticker to reflect
material changes in the affairs of the City anti, 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 Underwriters. A11 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
Mavor -
City of Beaumont, Texas
ATTEST:
/s/ Myrtle Corgey
City Clerk
City of Beaumont, Texas
21