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03-27-2007 (City Council) Agenda Packet _V( Wylie City Council CITY:F WYLIE NOTICE OF MEETING Regular Meeting Agenda Tuesday, March 27, 2007 — 6:00 pm Wylie Municipal Complex—Council Chambers 2000 Highway 78 North John Mondy Mayor Carter Porter Mayor Pro Tern Earl Newsom Place 1 M. G. "Red" Byboth Place 2 Eric Hogue Place 3 Merrill Young Place 4 Rick White Place 5 Mindy Manson City Manager Richard Abernathy City Attorney Carole Ehrlich City Secretary In accordance with Section 551.042 of the Texas Government Code, this agenda has been posted at the Wylie Municipal Complex, distributed to the appropriate news media, and posted on the City website: www.wvlietexas.gov within the required time frame. As a courtesy, the entire Agenda Packet has also been posted on the City of Wylie website: www.wylietexas.gov. The Mayor and City Council request that all cell phones and pagers be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to respond to a page or to conduct a phone conversation. The Wylie Municipal Complex is wheelchair accessible. Sign interpretation or other special assistance for disabled attendees must be requested 48 hours in advance by contacting the City Secretary's Office at 972.442.8100 or TD 972.442.8170. CALL TO ORDER Announce the presence of a Quorum. INVOCATION & PLEDGE OF ALLEGIANCE PRESENTATIONS • Student Government Day 2007 • Proclamation In Memoriam of O. W. Hampton. CITIZENS COMMENTS ON NON-AGENDA ITEMS Residents may address Council regarding an item that is not listed on the Agenda. Residents must provide their name and address. Council requests that comments be limited to three (3) minutes. In addition, Council is not allowed to converse, deliberate or take action on any matter presented during citizen participation. March 27,2007 Wylie City Council Regular Meeting Agenda Page 2 of 3 CONSENT AGENDA All matters listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by one motion. There will not be separate discussion of these items. If discussion is desired, that item will be removed from the Consent Agenda and will be considered separately. A. Consider, and act upon, approval of Minutes from the March 13, 2007 Regular City Council Meeting. (C. Ehrlich, City Secretary) B. Consider, and place on file, the Monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of February 28, 2007. (S. Satterwhite, Executive Director, WEDC) REGULAR AGENDA General Business Tabled from March 13, 2007 1. (MOTION TO REMOVE FROM TABLE) Consider, and act upon, a request to eliminate the distance requirement between a Beer and Wine Package Sales establishment and a public school. The property being located at 405 South Highway 78. (R. 011ie, Planning Director) Executive Summary The applicant is requesting a variance to the distance requirement in accordance with the Alcoholic Beverage Code Title 4 Regulatory And Penal Provisions, Chapter 109. Miscellaneous Regulatory Provisions, Section 109.33, Subsection (e). The requested variance is to grant a distance of zero feet as measured in a direct line from property line to property line. The property is located at 405 South Highway 78 and abuts the Hartman Elementary School (a public school). Per the Alcoholic Beverage Code Section 109.33 of Title 4, Subchapter C Local Regulation Of Alcoholic Beverages, the governing body of a municipality has the authority to prohibit the sale of alcoholic beverages by a dealer whose place of business is within 300 feet of a church,public or private school,or public hospital. 2. Consider, and act upon, acceptance of the Comprehensive Annual Financial Report (CAFR). (L. Williamson, Finance Director) Executive Summary The City Charter in Article VII,Municipal Finance,Section 13: Independent Audit,requires that at the end of the fiscal year an independent audit be made of all accounts of the City by a certified public accountant. In compliance with the City Charter, our outside auditor, Rutledge Crain& Company, PC, has performed an audit as of September 30,2006. 3. Consider, and act upon, all matters incident and related to the issuance and sale of "City of Wylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2007", including the adoption of Ordinance No. 2007-09 authorizing the issuance of such certificates of obligation. (L. Williamson, Finance Director) Executive Summary The City approved a 5 year Capital Improvement Plan (CIP) for water and sewer projects and identified certain projects as being funded with Certificates of Obligations. The debt service for these bonds was included in the City's Water Rate Study. This ordinance authorizes the sale of these bonds to the underwriters,with closing scheduled for early May 2007. March 27,2007 Wylie City Council Regular Meeting Agenda Page 3 of 3 4. Consider, and act upon, all matters incident and related to the issuance and sale of "City of Wylie, Texas, General Obligation Refunding Bonds, series 2007", including the adoption of Ordinance No. 2007-10 authorizing the issuance of such bonds and providing for the redemption of the obligations being refunded. (L. Williamson, Finance Director) Executive Summary First Southwest Company submitted a proposal to refund a portion of the City's General Obligations Bonds, series 1997, series 1999, and series 2000.The purpose of the refunding is to lower the debt service payments made by the City. This is accomplished by refinancing(refunding)the old debt with new debt at a lower interest rate. 5. Consider, and act upon, acceptance of the resignation of Gary Bartow and appoint a new Board Member to the Wylie Economic Development Corporation to fill the unexpired term of July 2006 to June 30, 2009. (C. Ehrlich, City Secretary) Executive Summary As per section 4.01 Board of Directors of the First Amended Bylaws of the Wylie Economic Development Corporation, the business and affairs of the Corporation and all corporate powers shall be exercised by or under the authority of the Board of Directors, appointed by the governing body of the City of Wylie. Section 4.02 Number and Qualifications requires that each Director shall meet at least one (1) of the following: (a)serve,or have served,as Chief Executive Officer or a company;or(b)serve,or have served, in a position of executive management of a company; or (c) serve, or have served, in a professional capacity. In addition to the above qualifications: (1) each Director must have lived in the City limits or operated a business in the City limits for a minimum of one(1)year;and (2)each Director must live in the City limits during the tenure in office. READING OF ORDINANCES Title and caption approved by Council as required by Wylie City Charter,Article III, Section 13-D. WORK SESSION • Presentation update and discussion related to construction of the new Library, Recreation Center and City Hall. (ARCHITEXAS, Architect/Holzman Moss Architecture/Thomas. S. Byrne, Ltd. Construction Manager) ADJOURNMENT CERTIFICATION I certify that this Notice of Meeting was posted�gti,�l1E iti'dgY of March, 2007 at 5:00 p.m. as required by law in accordance with Section 551.042 of the Kek �nitls 'C,ode and that the appropriate news media was contacted. As a courtesy, this agenda is a1�D� ctpd on the C" cdf Wylie website: www.wylietexas.gov. toIeEhh,citecrry ''.,___. -Thd.61-‘ • • — -. 1 .: : c'-v0 ---) \.-D-d (')--) ,•••.. ..••••7y %' j Date Notice Removed '''"",,4/E, TEXP'S``�� Wylie City Council CITY OF WYLIE Minutes Wylie City Council Tuesday, March 13, 2007 - 6:00 pm Wylie Municipal Complex - Council Chambers 2000 Highway 78 North CALL TO ORDER Announce the presence of a Quorum. Mayor Mondy called the meeting to order at 6:00 p.m. Council Members present were: Mayor Pro Tern Carter Porter, Councilman Red Byboth, Councilman Merrill Young, and Councilman Rick White. Council members Earl Newsom and Eric Hogue were absent. Staff present were: City Manager, Mindy Manson; Assistant City Manager, Jeff Butters; Finance Director, Larry Williamson; City Engineer, Chris Hoisted; Fire Chief, Randy Corbin; Planning Director, Renae' 011ie; Public Services Director; Mike Sferra; WEDC Executive Director, Sam Satterwhite; Public Library Director, Rachel Orozco; Public Information Officer, Mark Witter; City Secretary, Carole Ehrlich, and various support staff. INVOCATION & PLEDGE OF ALLEGIANCE Reverend Harold Hembree, pastor of the First Christian Church of Wylie gave the Invocation and Councilman Byboth led the Pledge of Allegiance. PRESENTATION • Presentation of Collin County GIS Services (B. Blythe, Captain, Fire Department and T. Nolan, Collin County GIS) A presentation of Collin County GIS services was conducted by T. Nolan of Collin County GIS and Captain Brandon Blythe of the Wylie Fire Department. A brief overview of the system was demonstrated showing the services provided to Wylie such as mapping overlays, hydrant locations within the City, siren coverage areas, block numbers and call boxes. Mr. Nolan explained that this system was implemented in 2005 by approval of the City Council and has been updated and enhanced each year since the initial implementation. It is utilized by the Wylie Police Department and the Wylie Fire Department. He explained that in the future the hope was to bring information that would be utilized by all departments within the City as well as interlocally. Minutes—March 13, 2007 Wylie City Council Page 1 CITIZENS COMMENTS ON NON-AGENDA ITEMS Residents may address Council regarding an item that is not listed on the Agenda. Residents must provide their name and address. Council requests that comments be limited to three (3) minutes. In addition, Council is not allowed to converse, deliberate or take action on any matter presented during citizen participation. There was no one present to address Council during Citizens Comments. CONSENT AGENDA All matters listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by one motion. There will not be separate discussion of these items. If discussion is desired, that item will be removed from the Consent Agenda and will be considered separately. A. Consider, and act upon, approval of Minutes from the February 27, 2007 Regular City Council Meeting. (C. Ehrlich, City Secretary) B. Consider, and act upon, approval of a Replat creating two (2) lots on 24.96 acres for future commercial/industrial development. The property is generally located southeast of SH 78 and Martinez Lane. (R. 011ie, Planning Director) C. Consider, and act upon, Ordinance 2007-07 establishing Speed Zones for Wooded Creek Avenue from Ryan Lane to Riverway Lane. (C. Holsted, City Engineer) D. Consider, and place on file, the Monthly Revenue and Expenditure Reports for the period of January and February 2007. (L. Williamson, Finance Director) Council Action A motion was made by Councilman Young, seconded by Mayor Pro Tern Porter to approve the Consent Agenda as presented. A vote was taken and passed 5-0 with Council members Hogue and Newsom absent. REGULAR AGENDA Public Hearing 1. Hold a Public Hearing and consider, and act upon, Ordinance No. 2007-08 adopting the Standards of Care for Youth Programs. (T. Hindman, Recreation Supervisor) Staff Comments Recreation Supervisor Hindman addressed Council stating that since the inception of the summer youth programs in 2000, the Standards of Care have been reviewed yearly and adopted as an ordinance in order to comply with the Texas Senate Bill 212, Human Resource Code, Section 42.041 (b)(14). Staff has made no significant changes to the current version of the ordinance. The ordinance and Standards of Care provides the necessary guidelines for the regulation of the summer youth program, the Wylie Wave, as legislated by Texas Senate Bill 212, Human Resource Code, Section 42.041 (b)(14). Minutes—March 13, 2007 Wylie City Council Page 2 Public Hearing Mayor Month/opened the Public Hearing at 6:28 p.m. for Ordinance No. 2007-08. No one was present to address Council during the Public Hearing. Mayor Mondv closed the Public Hearing at 6:28 p.m. Council Action A motion was made by Councilman Byboth, seconded by Councilman Young to approve Ordinance No. 2007-08 adopting the Standards of Care for Youth Programs for 2007. A vote was taken and passed 5-0 with Council members Hogue and Newsom absent. General Business 2. Consider, and act upon, a request to eliminate the distance requirement between a Beer and Wine Package Sales establishment and a public school. The property being located at 405 South Highway 78. (R. 011ie, Planning Director) Staff Comments Planning Director 011ie addressed Council stating that the applicant is requesting a variance to the distance requirement in accordance with the Alcoholic Beverage Code Title 4 Regulatory and Penal Provisions, Chapter 109. Miscellaneous Regulatory Provisions, Section 109.33, Subsection (e). The requested variance is to grant a distance of zero feet as measured in a direct line from property line to property line. The property is located at 405 South Highway 78 and abuts the Hartman Elementary School (a public school). Per the Alcoholic Beverage Code Section 109.33 of Title 4, Subchapter C Local Regulation of Alcoholic Beverages, the governing body of a municipality has the authority to prohibit the sale of alcoholic beverages by a dealer whose place of business is within 300 feet of a church, public or private school, or public hospital. Applicant Request Mr. Farhan Rajani, owner of the property located at 405 S. Highway 78, Wylie Texas requested that Item (#2) be tabled to the next City Council Meeting due to his attorney not being present . Council Action A motion was made by Mayor Pro Tern Porter, seconded by Councilman Byboth to table item #2; consideration of a request to eliminate the distance requirement between a Beer and Wine Package Sales establishment and a public school, (405 South Highway 78) to the March 27, 2007 Regular City Council meeting. A vote was taken and passed 5-0 with Council members Hogue and Newsom absent. 3. Consider, and act upon, award of a contract to Lacy Construction, in the amount of $882,758.60, for the construction of Alanis Drive from Twin Lakes Drive to FM 544. (C. Holsted, City Engineer) Minutes—March 13, 2007 Wylie City Council Page 3 Staff Comments City Engineer Hoisted addressed Council stating that the 2005 Bond Program included $2,600,000 for the extension of Alanis Drive from Twin Lakes Drive to FM 544. The extension provides another east-west thoroughfare in the southern portion of the City. The project includes approximately 16,000 square yards of 8-inch reinforced concrete pavement and related storm sewer improvements. Mr. Hoisted explained that this item should be the approval to issue a contract between Lacy Construction and the City of Wylie for the bid price of$882,758.60. Council Action A motion was made by Councilman Byboth, seconded by Mayor Pro Tern Porter to approve the issuance of a contract to Lacy Construction, in the amount of $882,758.60 for the construction of Alanis Drive from Twin Lakes Drive to FM 544. A vote was taken and passed 5-0 with Council members Hogue and Newsom absent. READING OF ORDINANCES Title and caption approved by Council as required by Wylie City Charter,Article III, Section 13-D. City Secretary Carole Ehrlich read the caption to Ordinances No.'s 2007-07 and 2007-08 into the official record. WORK SESSION • Discussion of provision of sewer services outside of Wylie city limits. City Manager Manson explained to Council that a restaurant owner located near S.H. 1378 and located within the City of St. Paul had requested a sewer tape for an existing restaurant. City Manager Manson reported that she had been in contact with the City of St. Paul regarding de- annexing the property and the City of St. Paul was bound by the Type A Municipality local government code which required a certain size lot before de-annexation was permitted. Ms. Manson explained that it had long been the policy of Council that only property located within the incorporated boundaries of Wylie would be provided City services. She explained that this particular situation was unusual as the restaurant owner could not operate the business without a city sewer system. She explained that the septic system currently being used by the property owner, no longer had the capacity to service the business. Direction from Council was to continue with the procedures in place regarding city services; to do otherwise would set precedence. • Discussion of growth and staff projections and associated funding costs. Finance Director Larry Williamson gave a presentation on the City's long range financial model. Mr. Williamson went over Historical revenues and expenditures and how they predict future revenues and expenditures in the population driven model. Mayor Mondy commented on the amount of ad valorum taxes that the city receives from the average household in Wylie vs. the amount of money spent by the city on city services. Numerous revenue enhancements were discussed including expanding the Alarm Monitoring Program and expanding our commercial tax base. Mr. Williamson finished the presentation with a review of tax rates generated by the model. Minutes—March 13, 2007 Wylie City Council Page 4 ADJOURNMENT With no further business before Council, Councilman Byboth made a motion to adjourn at 8:50 p.m.. Consensus of Council was to adjourn. John Mondy, Mayor ATTEST: Carole Ehrlich, City Secretary Minutes—March 13, 2007 Wylie City Council Page 5 7; Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: 03-27-07 Item Number: B Department: WEDC (City Secretary's Use Only) Prepared By: Sam Satterwhite Account Code: Date Prepared: 03-12-07 Budgeted Amount: Exhibits: 1 Subject Consider, and place on file, the Monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of February 28, 2007. Recommendation Accept, and place on file, the monthly Revenue and Expense Report for the Wylie Economic Development Corporation as of February 28, 2007. Discussion The Wylie Economic Development Corporation (WEDC) Board of Directors approved the attached financials on March 16, 2007. Approved By Initial Date Department Director 3-1 -D:? City Manager r V l 3 pal o-7 Page 1 of 1 3-13-2007 04:24 PM CITY OF WYLIE PAGE: 1 REVENUE AND EXPENSE REPORT - (UNAUDITED) AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP FINANCIAL SUMMARY CURRENT CURRENT PRIOR YEAR Y-T-D Y-T-D BUDGET t OF BUDGET PERIOD PO ADJUST. ACTUAL ENCUMBRANCE BALANCE BUDGET REVENUE SUMMARY TAXES 1,136,130.00 121,614.75 0.00 291,138.46 0.00 844,991.54 25.63 INTEREST INCOME 22,500.00 1,560.82 0.00 8,152,75 0.00 14,347.25 36.23 MISCELLANEOUS INCOME 63,640.00 7,732.15 0.00 33,146.75 0.00 30,693.25 51.92 TOTAL REVENUES 1,222,470.00 130,907.72 0.00 332,437.96 0.00 890,032.04 27.19 EXPENDITURE SUMMARY DEVELOPMENT CORP-WEDC 1,777,700.00 133,025.00 0.00 507,091.60 659.34 1,269,949.06 28.56 TOTAL EXPENDITURES 1,777,700.00 133,025.00 0.00 507,091.60 659.34 1,269,949.06 28.56 REVENUE OVER/(UNDER) EXPENDITURES ( 555,230.00) ( 2,117.28) 0.00 ( 174,653.64) ( 659.341 ( 379,917.02) 31.57 3-13-2007 04:24 PM CITY OF WYLIE PAGE: 2 REVENUE AND EXPENSE REPORT - (UNAUDITED) AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP REVENUES CURRENT CURRENT PRIOR YEAR Y-T-D Y-T-D BUDGET % OF BUDGET PERIOD PO ADJUST. ACTUAL ENCUMBRANCE BALANCE BUDGET TAXES 4000-40210 SALES TAX 1,136,130.00 121,614.75 0.00 291,138.46 0.00 844,991.54 25.63 TOTAL TAXES 1,136,130.00 121,614.75 0.00 291,138.46 0.00 844,991.54 25.63 INTEREST INCOME 4000-46050 CERTIFICATE OF DEPOSIT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4000-46110 ALLOCATED INTEREST EARNINGS 22,500.00 1,560.82 0.00 8,152.75 0.00 14,347.25 36.23 4000-46140 TEXPOOL INTEREST 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4000-46143 LOGIC INTEREST 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4000-46210 BANK MONEY MARKET INTEREST 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL INTEREST INCOME 22,500.00 1,560.82 0.00 8,152.75 0.00 14,347.25 36.23 MISCELLANEOUS INCOME 4000-48110 RENTAL INCOME 63,840.00 5,932.15 0.00 25,860.75 0.00 37,979.25 40.51 4000-48310 RECOVERY - PRIOR YEAR EXPEN 0.00 0.00 0.00 5,486.00 0.00 ( 5,486.00) 0.00 4000-48410 MISC INCOME 0.00 1,800.00 0.00 1,800.00 0.00 ( 1,800.00) 0.00 4000-48430 GAIN ON SALE OF PROPERTY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL MISCELLANEOUS INCOME 63,840.00 7,732.15 0.00 33,146.75 0.00 30,693.25 51.92 Tc .EVENUES 1,222,470.00 130,907.72 0.00 332,437.96 0.00 890,032.04 27.19 3-13-2007 04:24 PM CITY OF WYLIE PAGE: 3 REVENUE AND EXPENSE REPORT - (UNAUDITED) AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP DEVELOPMENT CORP-WEDC DEPARTMENTAL EXPENDITURES CURRENT CURRENT PRIOR YEAR Y-T-D Y-T-D BUDGET % OF BUDGET PERIOD PO ADJUST. ACTUAL ENCUMBRANCE BALANCE BUDGET PERSONNEL SERVICES 5611-51110 SALARIES 157,050.00 11,437.06 0.00 59,958.60 0.00 97,091.40 38.18 5611-51130 OVERTIME 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-51140 LONGEVITY PAY 570.00 0.00 0.00 580.00 0.00 ( 10.00) 101.75 5611-51145 SICK LEAVE BUYBACK 1,710.00 0.00 0.00 1,180.52 0.00 529.48 69.04 5611-51160 CERTIFICATION INCENTIVE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-51170 PARAMEDIC INCENTIVE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-51210 CAR ALLOWANCE 8,400.00 646.16 0.00 3,392.34 0.00 5,007.66 40.39 5611-51230 CLOTHING ALLOWANCE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-51310 TMRS 14,930.00 537.70 0.00 5,201.36 0.00 9,728.64 34.84 5611-51410 HOSPITAL & LIFE INSURANCE 14,340.00 1,379.90 0.00 6,855.93 0.00 7,484.07 47.81 5611-51420 LONG-TERM DISABILITY 880.00 41.42 0.00 214.92 0.00 665.08 24.42 5611-51440 FICA 10,400.00 724.22 0.00 2,066.95 0.00 8,333.05 19.87 5611-51450 MEDICARE 2,430.00 169.36 0.00 829.62 0.00 1,600.38 34.14 5611-51470 WORKERS COMP PREMIUM 850.00 0.00 0.00 ( 8.42) 0.00 858.42 0.99- 5611-51480 UNEMPLOYMENT COMP (TWC) 540.00 0.00 0.00 0.00 0.00 540.00 0.00 TOTAL PERSONNEL SERVICES 212,100.00 14,935.82 0.00 80,271.82 0.00 131,828.18 37.85 SUPPLIES 5611-52010 OFFICE SUPPLIES 7,000.00 92.45 0.00 1,671.64 0.00 5,328.36 23.88 5E" -2040 POSTAGE 1,720.00 27.01 0.00 247.39 0.00 1,472.61 14.38 5t 2130 TOOLS & EQUIPMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-52810 FOOD SUPPLIES 3,200.00 356.76 0.00 958.86 0.00 2,241.14 29.96 5611-52990 OTHER 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL SUPPLIES 11,920.00 476.22 0.00 2,877.89 0.00 9,042.11 24.14 MATERIALS FOR MAINTENANC 5611-54630 TOOLS & EQUIPMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5611-54810 COMPUTER HARD/SOFTWARE 3,000.00 209.91 0.00 1,519.91 0.00 1,480.09 50.66 5611-54990 OTHER 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL MATERIALS FOR MAINTENANC 3,000.00 209.91 0.00 1,519.91 0.00 1,480.09 50.66 CONTRACTUAL SERVICES 5611-56030 INCENTIVES 485,110.00 64,980.25 0.00 125,105.25 0.00 360,004.75 25.79 5611-56040 SPECIAL SERVICES 124,950.00 16,031.37 0.00 77,679.16 0.00 47,270.84 62.17 5611-56080 ADVERTISING 50,500.00 275.00 0.00 21,747.90 340.00 28,412.10 43.74 5611-56090 COMMUNITY DEVELOPMENT 51,500.00 766.69 0.00 20,851.77 0.00 30,648.23 40.49 5611-56110 COMMUNICATIONS 6,020.00 501.41 0.00 1,950.38 0.00 4,069.62 32.40 5611-56180 RENTAL 17,100.00 1,350.01 0.00 7,640.91 319.34 9,139.75 46.55 5611-56210 TRAVEL AND TRAINING 31,350.00 1,579.53 0.00 4,572.59 0.00 26,777.41 14.59 5611-56250 DUES & SUBSCRI?TIONS 6,380.00 1,000.00 0.00 3,220.00 0.00 3,160.00 50.47 5611-56310 INSURANCE 2,500.00 0.00 0.00 0.00 0.00 2,500.00 0.00 5611-56510 AUDIT AND LEGAL SERVICES 12,500.00 2,791.50 0.00 3,096.00 0.00 9,404.00 24.77 5611-56570 ENGINEERING - ARCHITECT SVC 67,930.00 7,237.37 0.00 37,584.95 0.00 30,365.05 55.31 5611-56610 UTILITIES - ELECTRIC 3,000.00 372.38 0.00 1,180.39 0.00 1,819.61 39.35 TOTAL CONTRACTUAL SERVICES 858,860.00 96,885.51 0.00 304,629.30 659.34 553,571.36 35.55 3-13-2007 04:24 PM CITY OF WYLIE PAGE: 4 REVENUE AND EXPENSE REPORT - (UNAUDITED) AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP DEVELOPMENT CORP-WEDC DEPARTMENTAL EXPENDITURES CURRENT CURRENT PRIOR YEAR Y-T-D Y-T-D BUDGET % OF BUDGET PERIOD PO ADJUST. ACTUAL ENCUMBRANCE BALANCE BUDGET DEBT SERVICE & CAP. REPL 5611-57110 DEBT SERVICE 294,250.00 20,517.54 0.00 108,675.22 0.00 185,574.78 36.93 TOTAL DEBT SERVICE & CAP. REPL 294,250.00 20,517.54 0.00 108,675.22 0.00 185,574.78 36.93 CAPITAL OUTLAY 5611-58110 LAND 205,000.00 0.00 0.00 0.00 0.00 205,000.00 0.00 5611-58120 DEVELOPMENT FEES 25,000.00 0.00 0.00 0.00 0.00 25,000.00 0.00 5611-58210 STREETS & ALLEYS 150,070.00 0.00 0.00 0.00 0.00 150,070.00 0.00 5611-58810 COMPUTER HARD/SOFTWARE 1,500.00 0.00 0.00 0.00 0.00 1,500.00 0.00 5611-58830 FURNITURE & FIXTURES 10,000.00 0.00 0.00 4,117.46 0.00 5,882.54 41.17 5611-58995 CONTRA CAPITAL OUTLAY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL CAPITAL OUTLAY 391,570.00 0.00 0.00 4,117.46 0.00 367,452.54 1.05 OTHER FINANCING (USES) 5611-59111 TRANSFER TO GENERAL FUND 6,000.00 0.00 0.00 5,000.00 0.00 1,000.00 83.33 5611-59990 PROJECT ACCOUNTING 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL OTHER FINANCING (USES) 6,000.00 0.00 0.00 5,000.00 0.00 1,000.00 83.33 TOTAL DEVELOPMENT CORP-WEDC 1,777,700.00 133,025.00 0.00 507,091.60 659.34 1,269,949.06 28.56 TG XPENDITURES 1,777,700.00 133,025.00 0.00 507,091.60 659.34 1,269,949.06 28.56 REVENUE OVER (UNDER) EXPENDITURES ( 555,230.00) ( 2,117.28) 0.00 ( 174,653.64)( 659.34) ( 379,917.02) 31.57 *** END OF REPORT *** FUND : 111-WYLIE ECONOMIC DEVEL CORP PERIOD TO USE: Feb-2007 THRU Feb-2007 DEPT : 611 DEVELOPMENT CORP-WEDC ACCOUNTS: 5611-52010 THRU 5611-58830 POST DATE TRAM # REFERENCE PACKET======DESCRIPTION=====_= VEND INV/JE # NOTE ----=AMOUNT==== ====BALANCE==== 5611-52010 OFFICE SUPPLIES BEGINNING BALANCE 1,579.19 2/07/07 2/07 A79537 CHK: 021079 08682 CARDSTOCK 000392 14765 0.75 1,579.94 2/07/07 2/07 A79537 CHK: 021079 08682 BOX OF FILE FOLDERS 000392 14765 12.95 1,592.89 2/07/07 2/07 A79537 CHK: 021079 08682 FILING LABELS 000392 14765 23.35 1,616.24 2/07/07 2/07 A79537 CHK: 021079 08682 COVER PAPER 000392 14765 0.90 1,617.14 2/07/07 2/07 A79537 CHIC: 021079 06682 REPLACEMENT SEAL, CORP. 000392 14765 22.50 1,639.64 2/14/07 2/14 A80237 CHK: 021182 08836 AMEX JAN07 CHARGES 000035 87002 JAN07 32.00 1,671.64 FEBRUARY ACTIVITY DB: 92.45 CR: 0.00 92.45 5611-52040 POSTAGE BEGINNING BALANCE 220.38 2/09/07 2/09 A80026 CHK: 021157 08756 020607 REIMBURSE POSTAGE 001899 020607 REIMBURS 3.72 224.10 2/09/07 2/09 A80026 CHIC: 021157 08756 020607 REIMBURSE POSTAGE 001899 020607 REIMBURS 18.65 242.75 2/09/07 2/09 A80026 CHK: 021157 08756 020607 REIMBURSE POSTAGE 001899 020607 REIMBURS 4.64 247.39 ____________= FEBRUARY ACTIVITY DB: 27.01 CR: 0.00 27.01 5611-52130 TOOLS & EQUIPMENT BEGINNING BALANCE 0.00 5611-52160 TOOLS/EQUIP- $100-$999.99 BEGINNING BALANCE 0.00 5611-52810 FOOD SUPPLIES BEGINNING B A LAN C E 602.10 2/01/07 2/02 A78952 CHK: 020960 08577 JANUARY 18, 2007 MTG. 001071 5331 156.50 758.60 2/01/07 2/02 A78953 CHK: 020960 08577 JANUARY 26, 2007 MTG. 001071 5339 64.00 822.60 2/09/07 2/09 A79881 CHK: 021125 08745 COFFEE SERVICE-FEB 002091 020107 FEB 20.00 842.60 2/09/07 2/09 A79882 CHK: 021125 08745 COFFEE SERVICE-MAR 002091 030107 MAR 20.00 862.60 2/09/07 2/09 A79883 CHK: 021125 08745 COFFEE SERVICE-APR 002091 040107 20.00 882.60 2/09/07 2/09 A79975 CNN: 021140 08753 LUNCH MEETING 001071 5363 33.95 916.55 2/13/07 2/14 A80115 CHK: 021175 08826 REIMBRS FOOD-BOARD MEETI 000317 011907 34.30 950.85 2/13/07 2/14 A80116 CHK: 021175 08826 REIMBURSMT CASH FOR FOO 000317 2345-30 REIMBURS 8.01 958.86 = FEBRUARY ACTIVITY DB: 356.76 CR: 0.00 356.76 FUND : 111-WYLIE ECONOMIC DEVEL CORP PERIOD TO USE: Feb-2007 THRU Feb-2007 DEPT : 611 DEVELOPMENT CORP-WEDC ACCOUNTS: 5611-52010 THRU 5611-58830 POST DATE TRAM # REFERENCE PACKET DESCRIPTION=====_= VEND INV/JE # NOTE =----AMOUNT==== ====BALANCE==== 5611-52990 OTHER BEGINNING BALANCE 0.00 5611-54630 TOOLS & EQUIPMENT BEGINNING BALANCE 0.00 5611-54810 COMPUTER HARD/SOFTWARE BEGINNING BALANCE 1,310.00 2/14/07 2/14 A80237 CHK: 021182 08836 AMEX JAN07 CHARGES 000035 87002 JAN07 209.91 1,519.91 ____________= FEBRUARY ACTIVITY DB: 209.91 CR: 0.00 209.91 5611-54990 OTHER BEGINNING BALANCE 0.00 5611-56030 INCENTIVES BEGINNING BALANCE 60,125.00 2/22/07 2/22 A81098 CHK: 021358 09011 22107 #1 002202 22107 #1 24,805.00 84,930.00 2/27/07 2/27 A81559 CHK: 021452 09087 22107 #4 OF 4 000757 22107 #4 40,175.25 125,105.25 _____________ FEBRUARY ACTIVITY DB: 64,980.25 CR: 0.00 64,980.25 5611-56040 SPECIAL SERVICES BEGINNING BALANCE 61,647.79 2/02/07 2/02 A79094 CHK: 021000 08591 706 COOPER WATER BILL 000101 126-0290-02 DEC06 12.15 61,659.94 2/09/07 2/09 A79884 CHK: 021138 08745 CLEANING SERV.-JAN 002093 020107 300.00 61,959.94 2/09/07 2/09 A79884 CHK: 021138 08745 CLEANING SERV.-FEB 002093 020107 200.00 62,159.94 2/14/07 2/14 A80288 CHK: 021198 08845 07-524 CONSULT FEE 002109 07-524 15,000.00 77,159.94 2/14/07 2/14 A80286 CHK: 021198 08845 07-524 REIMBURS EXPENSES 002109 07-524 362.07 77,522.01 2/16/07 2/16 A80558 CHK: 021264 08878 INVOICE # 104 002049 104 145.00 77,667.01 2/28/07 2/28 A81643 CHK: 021459 09100 WATER FOR 706 COOPER 000101 126-0290-02 J.4N07 12.15 77,679.16 ____= FEBRUARY ACTIVITY DB: 16,031.37 CR: 0.00 16,031.37 5611-56080 ADVERTISING BEGINNING BALANCE 21,472.90 2/13/07 2/14 A80134 CHK: 021177 08826 ADVERTISING - BASKETBALL 000391 1030 JAN31 275.00 21,747.90 ____________= FEBRUARY ACTIVITY DB: 275.00 CR: 0.00 275.00 FUND : 111-WYLIE ECONOMIC DEVEL CORP PERIOD TO USE: Feb-2007 THRU Feb-2007 DEPT : 611 DEVELOPMENT CORP-WEDC ACCOUNTS: 5611-52010 THRU 5611-58830 POST DATE TRAN # REFERENCE PACKET======DESCRIPTION=====_= VEND INV/JE # NOTE --AMOUNT-- ====BALANCE==== 5611-56090 COMMUNITY DEVELOPMENT BEGINNING BALANCE 20,085.08 2/14/07 2/14 A80237 CHK: 021182 08836 AMEX JAN07 CHARGES 000035 87002 JAN07 166.69 20,251.77 2/19/07 2/20 C09823 RC?T 00274368 04265 LAND TEX INC 200.00CR 20,051.77 2/20/07 2/20 A80852 CHK: 021319 08938 4800 P 1 021207 800.00 20,851.71 ____________= FEBRUARY ACTIVITY DB: 966.69 CR: 200.00CR 766.69 5611-56110 COMMUNICATIONS BEGINNING BALANCE 1,448.97 2/01/07 2/02 A78949 CHK: 020981 08577 OFFICE PHONE SERVICE 000468 105921 10166 DE/JA 187.82 1,636.79 2/09/07 2/09 A80026 CHK: 021157 08756 020607 REIMB PHONE EQUIP 001899 020607 REIMBURS 10.81 1,647.60 2/21/07 2/21 A80950 CHK: 021336 08982 ACCOUNT # 000199891 000298 199891JAN-FEB 207.78 1,855.38 2/21/07 2/21 A80959 CHK: 021340 08982 ACCOUNT #826013047019016 002052 130470190169 FE-MA 95.00 1,950.38 ____________= FEBRUARY ACTIVITY DB: 501.41 CR: 0.00 501.41 5611-56180 RENTAL BEGINNING BALANCE 6,290.90 2/02/07 2/02 A79194 CHK: 021021 08600 PRINTER LEASE 002075 6745039402 JAN13 319.34 6,610.24 2/20/07 2/20 A80801 CHK: 021302 08934 B/W COPIES 002051 098177 JAN12-FEB12 38.99 6,649.23 2/20/07 2/20 A80801 CHK: 021302 08934 COLOR COPIES 002051 098177 JAN12-FEB12 91.68 6,740.91 2/22/07 2/22 A81097 CHK: 021357 09011 RENT MARCH 07 002050 RENT MARCH07 900.00 7,640.91 ____ __= FEBRUARY ACTIVITY DB: 1,350.01 CR: 0.00 1,350.01 5611-56210 TRAVEL AND TRAINING BEGINNING BALAN C E 2,993.06 2/14/07 2/14 A80237 CHK: 021182 08836 AMEX JAN07 CHARGES 000035 87002 JAN07 1,579.53 4,572.59 ____________= FEBRUARY ACTIVITY DB: 1,579.53 CR: 0.00 1,579.53 5611-56220 PROFESSIONAL TRAINING BEGINNING BALAN C E 0.00 5611-56250 DUES & SUBSCRIPTIONS FUND : 111-WYLIE ECONOMIC DEVEL CORP PERIOD TO USE: Feb-2007 THRU Feb-2007 DEPT : 611 DEVELOPMENT CORP-WEDC ACCOUNTS: 5611-52010 THRU 5611-58830 POST DATE TRAN # REFERENCE PACKET======DESCRI?TION = VEND INV/JE # NOTE AMOUNT-- ==-=BALANCE==== B E G I N N I N G BALANCE 2,220.00 )7 2/21 A80909 CHK: 021324 08973 700NPEA 1 103059 22950 1,000.00 3,220.00 ____________= FEBRUARY ACTIVITY DB: 1,000.00 CR: 0.00 1,000.00 5611-56310 INSURANCE BEGINNING BALANCE 0.00 5611-56510 AUDIT AND LEGAL SERVICES BEGINNING BALANCE 304.50 2/14/07 2/14 A80309 CHK: 021200 08848 70102 AUDIT SERVICES FY 001062 70102 1,920.00 2,224.50 2/22/07 2/22 A81095 CHK: 021355 09011 2793-0001M 37 000023 2793-0001M 37 36.50 2,261.00 2/22/07 2/22 A81096 CHK: 021355 09011 2793-0026M 1 000023 2793-0026M 1 835.00 3,096.00 ____________= FEBRUARY ACTIVITY DB: 2,791.50 CR: 0.00 2,791.50 5611-56570 ENGINEERING - ARCHITECT SVCS BEGINNING BALAN C E 30,347.58 2/14/07 2/14 A80283 CHK: 021197 08845 A0619D ENG SERV MARTINEZ 000196 A0619D 7,237.37 37,584.95 ________-___= FEBRUARY ACTIVITY DB: 7,237.37 CR: 0.00 7,237.37 5611-56610 UTILITIES - ELECTRIC BEGINNING BALANCE 808.01 2/15/07 2/15 A80476 CHK: 021241 08873 WATER 002091 124-0020-00 DEC 9.21 817.22 2/15/07 2/15 A80477 CHK: 021241 08873 ELECTRIC 002091 301-1901-98-4 DEC 363.17 1,180.39 __ _____ ___= FEBRUARY ACTIVITY DB: 372.38 CR: 0.00 372.38 5611-57110 DEBT SERVICE BEGINNING BALAN C E 88,157.68 2/15/07 2/15 A80440 CHK: 021235 08870 PAY #7 FEB07 002048 PAY #7 FEB07 3,774.70 91,932.38 2/20/07 2/20 A80844 CHK: 021313 08938 PAY #36 MAR07 000891 36 MARCH07 5,741.48 97,673.86 2/21/07 2/21 A80906 CHK: 021325 08973 104015301 FEB26 PAY416 001792 104015301 FEB26 11,001.36 108,675.22 ______=====a= FEBRUARY ACTIVITY DB: 20,517.54 CR: 0.00 20,517.54 FUND : 111-WYLIE ECONOMIC DEVEL CORP PERIOD TO USE: Feb-2007 THRU Feb-2007 DEPT : 611 DEVELOPMENT CORP-WEDC ACCOUNTS: 5611-52010 THRU 5611-58830 POST DATE TRAN # REFERENCE PACKET======DESCRIPTION VEND INV/JE # NOTE ----AMOUNT-- ====BALANCE==== 5611-58110 LAND BEGINNING BALANCE 0.00 5611-58120 DEVELOPMENT FEES BEGINNING BALAN C E 0.00 5611-58210 STREETS & ALLEYS BEGINNING BALAN C E 0.00 5611-58810 COMPUTER HARD/SOFTWARE BEGINNING BALAN C E 0.00 5611-58830 FURNITURE & FIXTURES BEGINNING BALANCE 4,117.46 * * * * * * * * * * * * * 000 ERRORS IN THIS REPORT! * * * * * * * * * * * * * ** REPORT TOTALS ** --- DEBITS --- --- CREDITS --- BEGINNING BALANCES: 303,730.60 0.00 REPORTED ACTIVITY: 118,289.18 200.00CR ENDING BALANCES: 422,019.78 200.00CR 3-13-2007 04:51 PM CITY OF WYLIE PAGE: 1 BALANCE SHEET AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP ACCOUNT# TITLE ASs-.. CASH & CASH EQUIVALENTS 1000-10110 CLAIM ON CASH AND CASH EQUIV. 428,530.40 1000-10115 CASH-WEDC-INWOOD 0.00 1000-10135 INWOOD BANK-ESCROW 0.00 TOTAL CASH & CASH EQUIVALENTS 428,530.40 INVESTMENTS 1000-10341 TEXPOOL 0.00 1000-10343 LOGIC 0.00 TOTAL INVESTMENTS 0.00 ACCOUNTS RECEIVABLE 1000-11517 ACCTS REC - SALES TAX 0.00 TOTAL ACCOUNTS RECEIVABLE 0.00 INTERGOVERNMENTAL RECEIV 1000-12996 LOAN REC - JACOBY 147,648.48 TOTAL INTERGOVERNMENTAL RECEIV 147,648.48 INVENTORIES 1000-14112 INVENTORIES - MATERIAL/SUPPLY 0.00 10' '4116 INVENTORY - LAND 1,934,160.48 1, 4118 INVENTORY - BAYCO - SANDEN BLV 0.00 TOTAL INVENTORIES 1,934,160.48 PREPAID ITEMS 1000-14310 PREPAID EXPENSES 59,956.56 1000-14410 DEFERRED CHARGE 0.00 TOTAL PREPAID ITEMS 59,956.56 2,570,295.92 TOTAL ASSETS 2,570,295.92 LIABILITIES PAYROLL DEDUCT. PAYABLE 2000-20110 FEDERAL INCOME TAX PAYABLE 832.92 2000-20111 MEDICARE PAYABLE 84.91 2000-20112 CHILD SUPPORT PAYABLE 0.00 2000-20113 CREDIT UNION PAYABLE 0.00 2000-20114 IRS LEVY PAYABLE 0.00 2000-20115 NATIONWIDE DEFERRED COMP 0.00 2000-20116 HEALTH INSUR PAY-EMPLOYEE 161.11) 2000-20117 TMRS PAYABLE 141.98 2000-20118 ROTH IRA PAYABLE 0.00 2000-20119 WORKERS COMP PAYABLE 0.00 2000-20120 FICA PAYABLE 363.09 2 0121 TEC PAYABLE 0.00 2t. 20122 STUDENT LOAN LEVY PAYABLE 0.00 2000-20123 ALIMONY PAYABLE 0.00 2000-20124 BANKRUPTCY PAYABLE 0.00 3-13-2007 04:51 PM CITY OF WYLIE PAGE: 2 BALANCE SHEET AS OF: FEBRUARY 28TH, 2007 111-WYLIE ECONOMIC DEVEL CORP ACCOUNT TITLE 20, _0125 VALIC DEFERRED COMP 0.00 2000-20126 ICMA PAYABLE 0.00 2000-20151 ACCRUED WAGES PAYABLE 0.00 2000-20180 ADDIT EMPLOYEE INSUR PAY ( 219.74) 2000-20199 MISC PAYROLL PAYABLE 0.00 TOTAL PAYROLL DEDUCT. PAYABLE 1,042.05 ACCOUNTS PAYABLE 2000-20201 AP PENDING 1,921.22 2000-20210 ACCOUNTS PAYABLE 0.00 TOTAL ACCOUNTS PAYABLE 1,921.22 CONTRACTS PAYABLE 2000-20540 NOTES PAYABLE 1,214,749.42 TOTAL CONTRACTS PAYABLE 1,214,749.42 DEFERRED REVENUE 2000-22270 DEFERRED REVENUE 147,648.48 TOTAL DEFERRED REVENUE 147,648.48 TOTAL LIABILITIES 1,365,361.17 FUND BALANCE/EQUITY FU1' 'BALANCE 3k 590 FUND BALANCE-UNRESERV/UNDESIG 1,379,588.39 TOTAL FUND BALANCE 1,379,588.39 TOTAL BEGINNING EQUITY 1,379,588.39 TOTAL REVENUE 332,437.96 TOTAL EXPENDITURES 507,091.60 TOTAL SURPLUS/(DEFICIT) ( 174,653.64) TOTAL EQUITY & SURPLUS/(DEFICIT) 1,204,934.75 TOTAL LIABILITIES, EQUITY & SURPLUS/DEFICIT 2,570,295.92 Wylie ,onomic Development Corporation Balance Sheet Sub ledger February 28, 2007 Notes Payable Payment Principal Interest Principal Balance January 31, 2007 $1,229,171.39 February Inwood(#16 of 120) $11,001.36 $7,319.77 $3,681.59 $761,255.67 Birmingham(#36 of 60) 5,741.48 4,964.48 777.00 128,236.30 Hughes(#7 of 120) 3,774.70 2,137.72 1,636.98 325,257.45 February 28, 2007 $1,214,749.42 Wylie Economic Development Corporation Balance Sheet Subledger February 28, 2007 Inventory- Land Address Acreage Improvements (sq.ft.) Cost Basis McMasters 709 Cooper 0.48 n/a $202,045 Martinez Martinez Lane 25.00 n/a 639,000 Hughes 211 -212 Industrial 0.74 10,000 425,000 R.O.W. 0.18 41,585 Ferrell 2806 F.M. 544 1.09 6,500 239,372 Heath 706 Cooper 0.46 3,625 186,934 Perry 707 Cooper 0.491 4,800 200,224 Total 28.43 $1,934,160 WYLIE ECONOMIC DEVELOPMENT CORPORATION SALES TAX REVENUE FOR THE MONTH OF MARCH 2007 MONTH WEDC WEDC WEDC DIFF % DIFF 2005 2006 2007 06 VS 07 06 VS 07 DECEMBER $58,817 $74,957 $82,910 $7,953 10.61% JANUARY 58,034 74,764 86,614 11,849 15.85% FEBRUARY 96,492 110,794 121,615 10,820 9.77% MARCH 55,710 88,544 83,172 -5,372 -6.07% APRIL 58,530 67,714 MAY 92,311 113,042 JUNE 69,185 86,454 JULY 69,448 89,148 AUGUST 98,067 122,188 SEPTEMBER 70,260 69,876 OCTOBER 53,819 78,861 NOVEMBER 104,937 122,383 Sub-Total $885,609 $1,098,726 $374,311 $25,251 7.23% AUDIT ADJ TOTAL $885,609 $1,098,726 $374,311 $25,251 7.23% WEDC SALES TAX ANALYSIS $140,000 :::::: r r1 V iyi $80,000 r I, I . s.. s i. 1:::::: "' milk NI 112007 $20,000 ■ ' ' I 1111.11 , : �tI II a ((a m a c', 1 3 1 1 n E c ° Q 2 -)i - E S E U alN ¢ N U N 0 � ,_ a, O O ( Z Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: March 27, 2007 Item Number: 1 Department: Planning (City Secretary's Use Only) Prepared By: Renae' 011ie Account Code: Date Prepared: March 2, 2007 Budgeted Amount: Exhibits: Four Subject Consider, and act upon, a request to eliminate the distance requirement between a Beer & Wine Package Sales establishment and a public school. The property being located at 405 South Highway 78. Recommendation Motion to deny a request to eliminate the distance requirement between a Beer & Wine Package Sales establishment and a public school. The property being located at 405 South Highway 78. Discussion The property is located at 405 South Highway 78 and abuts the Hartman Elementary School (a public school). Per the Alcoholic Beverage Code Section 109.33 of Title 4, Subchapter C Local Regulation Of Alcoholic Beverages, the governing body of a municipality has the authority to prohibit the sale of alcoholic beverages by a dealer whose place of business is within 300 feet of a church, public or private school, or public hospital. In addition, the TABC code allows that same governing body the authority to increase that distance requirement from 300 feet to 1,000 feet of a public school, if the governing body receives a request from the board of trustees of a school district under Section 38.007, Education Code. Subsection (e) of Section 109.33 allows the governing board of a city or town that has enacted a regulation under Subsection (a)of Section 109.33 to grant variances to the regulation if the governing body determines that: 1. Enforcement of the regulation in a particular instance is not in the best interest of the public, 2. Constitutes waste or inefficient use of land or other resources, 3. Creates an undue hardship on an applicant for a license or permit, 4. Does not serve its intended purpose, 5. Is not effective or necessary, or 6. For any other reason the governing board, after consideration of the health, safety, and welfare of the public and the equities of the situation, determines is in the best interest of the community. The applicant is requesting a variance to the distance requirement in accordance with the Alcoholic Beverage Code Title 4 Regulatory And Penal Provisions, Chapter 109. Miscellaneous Regulatory Provisions, Section 109.33, Subsection (e). The requested variance is to grant a distance of zero feet as measured in a direct line from property line to property line. Page 1 of 2 Page 2 of 2 The attached map Exhibit "B" indicates the location of the subject property and it's proximity to not only the school property line but the playground and ball fields on the school property. Because the ball field and playground area are directly adjacent and/or visible from the subject property, staff's opinion is that this request in no means meet the intent of the city Zoning Ordinance nor does it meet the intent of the law of the Alcoholic Beverage Code. State law does not require a notification and public hearing on this matter. Approved By Initial Date Department Director RO 3/02/07 City Manager al ,3j, /0 7 EXHIBIT "A" This is a family owned and operated business that must compete on an even field with adjacent competitors. A strict compliance with the ordinance will create an undue and drastic hardship on the family. A variance on the distance requirement will comply with the spirit and intent of the ordinance if agreeable stipulations are attached and made a condition of the variance being granted by this board after a full evidentiary hearing,which the applicant is requesting. EXHIBIT "B" Subject Property showing property boundary ...............T d b .1 : L 'r v. - 4 ,, -it , . iri . . II Ili. NM y '%.. ••" Hartman Elementary ,� Oh _ ,, School Property Line j (Chain Link fence) c '�� WI LLIAMS ST• +, r ei t , 4 r a ' ' Location of Baseball Field 'h;I back stop. Appx. 42 feet • pp A �' from property line. I 3 . ,.. • ift Playground ,4 Jambi , Iv/equipment ■ 0,fis..% 1.10 Iv- N • A ■ • EXHIBIT "C" TITLE 4. REGULATORY AND PENAL PROVISIONS CHAPTER 109. MISCELLANEOUS REGULATORY PROVISIONS SUBCHAPTER C. LOCAL REGULATION OF ALCOHOLIC BEVERAGES Sec. 109.33. SALES NEAR SCHOOL, CHURCH, OR HOSPITAL. (a) The commissioners court of a county may enact regulations applicable in areas in the county outside an incorporated city or town, and the governing board of an incorporated city or town may enact regulations applicable in the city or town, prohibiting the sale of alcoholic beverages by a dealer whose place of business is within: (1) 300 feet of a church, public or private school, or public hospital; (2) 1,000 feet of a public school, if the commissioners court or the governing body receives a request from the board of trustees of a school district under Section 38.007, Education Code; or NOTE: Section 38.007, Education Code. Alcohol free School Zones reads as follows: (a) The board of trustees of a school district shall prohibit the use of alcoholic beverages at a school-related or school-sanctioned activity on or off school property. (b) The board of trustees of a school district shall attempt to provide a safe alcohol free environment to students coming to or going from school. The board of trustees may cooperate with local law enforcement officials and the Texas Alcoholic Beverage Commission in attempting to provide this environment and in enforcing Sections 101.75, 109.33, and 109.59, Alcoholic Beverage Code. Additionally, the board, if a majority of the area of a district is located in a municipality of a population of 900,000 or more, may petition the commissioners court of the county in which the district is located or the governing board of an incorporated city or town in which the district is located to adopt a 1,000-foot zone under Section 109.33, Alcoholic Beverage Code. (3) 1,000 feet of a private school if the commissioners court or the governing body receives a request from the governing body of the private school. (b) The measurement of the distance between the place of business where alcoholic beverages are sold and the church or public hospital shall be along the property lines of the street fronts and from front door to front door, and in direct line across intersections. The measurement of the distance between the place of business where alcoholic beverages are sold and the public or private school shall be: (1) in a direct line from the property line of the public or private school to the property line of the place of business, and in a direct line across intersections; or (2) if the permit or license holder is located on or above the fifth story of a multistory building, in a direct line from the property line of the public or private school to the property line of the place of business, in a direct line across intersections, and vertically up the building at the property line to the base of the floor on which the permit or license holder is located. (c) Every applicant for an original alcoholic beverage license or permit for a location with a door by which the public may enter the place of business of the applicant that is within 1,000 feet of the nearest property line of a public or private school, measured along street lines and directly across intersections, must give written notice of the application to officials of the public or private school before filing the application with the commission. A copy of the notice must be submitted to the commission with the application. This subsection does not apply to a permit or license covering a premise where minors are prohibited from entering the premises under Section 109.53. (d) As to any dealer who held a license or permit on September 1, 1983, in a location where a regulation under this section was in effect on that date, for purposes of Subsection (a), but not Subsection (c), of this section, the measurement of the distance between the place of business of the dealer and a public or private school shall be along the property lines of the street fronts and from front door to front door, and in direct line across intersections. (e) The commissioners court of a county or the governing board of a city or town that has enacted a regulation under Subsection (a) of this section may also allow variances to the regulation if the commissioners court or governing body determines that enforcement of the regulation in a particular instance is not in the best interest of the public, constitutes waste or inefficient use of land or other resources, creates an undue hardship on an applicant for a license or permit, does not serve its intended purpose, is not effective or necessary, or for any other reason the court or governing board, after consideration of the health, safety, and welfare of the public and the equities of the situation, determines is in the best interest of the com- munity. (f) Subsections (a)(2) and (3) do not apply to the holder of: (1) a retail on-premises consumption permit or license if less than 50 percent of the gross receipts for the premises is from the sale or service of alcoholic beverages; (2) a retail off-premises consumption permit or license if less than 50 percent of the gross receipts for the premises, excluding the sale of items subject to the motor fuels tax, is from the sale or service of alcoholic beverages; or (3) a wholesaler's, distributor's, brewer's, distiller's and rectifier's, winery, wine bottler's or manufacturer's permit or license, or any other license or permit held by a wholesaler or manufacturer as those words are ordinarily used and understood in Chapter 102. (g) Subsection (a)(3) does not apply to the holder of: (1) a license or permit issued under Chapter 27, 31, or 72 who is operating on the premises of a private school; or (2) a license or permit covering a premise where minors are prohibited from entering under Section 109.53 and that is located within 1,000 feet of a private school. (h) Subsection (a)(1) does not apply to the holder of: (1) a license or permit who also holds a food and beverage certificate covering a premise that is located within 300 feet of a private school; or (2) a license or permit covering a premise where minors are prohibited from entering under Section 109.53 and that is located within 300 feet of a private school. (i) In this section, "private school" means a private school, including a parochial school, that: (1) offers a course of instruction for students in one or more grades from kindergarten through grade 12; and (2) has more than 100 students enrolled and attending courses at a single location. EXHIBIT "D" ILL2'` t it R i k�yir • i II • 1 , - - Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: March 27, 2007 Item Number: 2 Department: Finance (City Secretary's Use Only) Prepared By: Larry Williamson Account Code: N/A Date Prepared: March 16, 2007 Budgeted Amount: CAFR, Management Letter and Finance Department Exhibits: Comments Subject Consider, and act upon, acceptance of the Comprehensive Annual Financial Report of 2006 after presentation by the audit firm of Rutledge Crain and Company, PC. Recommendation Motion to accept the Comprehensive Annual Financial Report of 2006. Discussion The City Charter in Article VII, Municipal Finance, Section 13: Independent Audit, requires that at the end of the fiscal year an independent audit be made of all accounts of the City by a certified public accountant. In compliance with the City Charter, our outside auditor, Rutledge Crain & Company, PC, has performed an audit as of September 30, 2006. This is the forth year for the audit to be performed by Rutledge Crain & Company, PC. Mr. Lewis Crain will briefly present the CAFR, including the Independent Auditors' Report, and answer any questions that the City Council may have regarding the report. Approved By Initial Date Department Director LW f/(� 3/19/07 City Manager Y I ' Jlo . /ol Page 1 of 1 RUTLEDGE CRAIN & COMPANY, PC CERTIFIED PUBLIC ACCOUNTANTS 2401 Garden Park Court, Suite B Arlington, Texas 76013 January 12, 2007 To the Members of the City Council City of Wylie, Texas In planning and performing our audit of the basic financial statements of the City of Wylie, Texas for the year ended September 30, 2006, we considered its internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on internal control. However,we noted certain matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the City of Wylie's ability to record, process, summarize, and report financial data consistent with the assertions of management in the basic financial statements. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the basic financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of internal control would not necessarily disclose all matters in internal control that might be reportable conditions and,accordingly,would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we noted the following reportable conditions that we believe to be material weaknesses. 1. Maintenance of General Ledger The general ledger is the summary record of the City's financial transactions and is the starting point for preparing the City's financial statements. Maintenance of the general ledger has shown marked improvement from the previous year. However,we did note the following items: a. Numerous liability accounts had mispostings to the accounts resulting in debit balances; and some asset accounts had mispostings to the accounts resulting in credit balances. Members: Metro(817)265-9989 American Institute of Certified Public Accountants Fax(817)861-9623 Texas Society of Certified Public Accountants To the Members of the City Council January 12, 2007 Page 2 b. The capital assets had not been maintained for the year by adding additions and removing retirements of capital assets. We recommend that the director of finance review monthly general ledger accounts to insure that account balances make sense. 2. Related Party Transactions As disclosed in the footnotes to the financial statements, in the prior year,WEDC obtained a loan in the amount of $878,372 from a bank whose president is the chairman of the board of WEDC. At September 30, 2006, the unpaid balance of this loan was $797,855 . We recommend that the City and WEDC develop ajoint policy which prohibits related party transactions as a matter of public policy. 3. Accounting and Administration WEDC has an agreement with the City to maintain its general ledger. The numerous transactions entered into by WEDC are complicated, and require detailed coordination between WEDC and the finance department to insure that the transactions are recorded properly and contemporaneously. Coordination between WEDC and the finance department has improved, however, numerous adjustments were required to properly reflect the financial position of WEDC. These adjustments were made as a result of extensive research by the finance department on items which have been misreported in previous years. We encourage continued cooperation between the executive director of WEDC and the director of finance to insure improvement in financial reporting of WEDC. We also noted the following reportable conditions that are not believed to be material weaknesses. 4. Depreciation of Capital Assets One of the requirements of GASB 34 is that all depreciable capital assets be recorded and the depreciation be charged to the various departments in the government wide financial statements. The City installed a new general ledger system which includes a module for depreciation of capital assets. In prior years we recommended that the City implement use of the depreciation module for all depreciable capital assets. However, this recommendation has not been fully implemented. This issue requires inputting all capital assets into the incode software module. We recommend that the City immediately input the capital assets into the fixed asset module to improve accountability. To the Members of the City Council January 12, 2007 Page 3 Other Matters The following matters are not reportable conditions, but are items which should be considered because they affect internal financial statements which the City uses to accomplish its financial duties: 5. Municipal Court Operations In accordance with GASB 33, fines and fees should be recorded in the general ledger (fines receivable, allowance for uncollectible accounts, revenue and adjustments). The municipal court monthly operating cycle should be reviewed and documented. Monthly closing procedures should include tests of each stage of the cycle and reconcilement of detail account balances with the general ledger. These procedures would be made easier if the municipal court used the same software as the finance department. We recommend the director of finance and municipal court personnel record these operating procedures and determine the form and content of monthly activity documentation to assist with monthly closings. This comment is being repeated from the prior year. 6. Implementation of GASB 45 The Governmental Accounting Standards Board (GASB) has issued Governmental Accounting Standards Board Statement 45 which will take effect for the fiscal year ended September 30,2008. This new statement provides guidance on all aspects of other post employment benefits reporting by employers. 7. Implementation of GASB 47 The Governmental Accounting Standards Board (GASB) has issued Governmental Accounting Standards Board Statement 47 which will take effect for the fiscal year ended September 30, 2007. This new statement provides guidance on how employers should account for benefits associated with either voluntary or involuntary terminations of employees. ••• The City's finance department devoted long hours in preparing for the audit and in assisting us during the audit by performing analysis and researching the numerous questions which came up during the audit. We want to express our thanks to the Finance Director, his staff, and all other members of the City staff for their assistance. To the Members of the City Council January 12, 2007 Page 4 ••• The foregoing conditions were considered in determining the nature, timing and extent of audit tests to be applied in our examination of the financial statements,and this report of such condition does not modify our report dated January 12, 2007 on such financial statements. We would be pleased to discuss our recommendations in more detail and to assist in implementing them at your request. This report is intended solely for the information and use of the City Council, management, and others within the administration and is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which, upon acceptance is a matter of public record. Very truly yours, Finance Department Memorandum To: Lewis Crain, City Auditor From: Larry Williamson, Finance Director Date: March 14, 2007 Subject: Responses to Auditor's Management Letter CC: Mindy Manson, City Manager John Mondy, Mayor Eric Hogue, Mayor Pro Tern Earl Newsom, Councilmember Red Byboth, Councilmember Merrill Young, Councilmember Rick White, Councilmember The Finance Department has received a copy of your Management Letter to City Council. As is the practice, the Finance Department has reviewed your letter and puts forth in this memorandum our opinions regarding your findings and recommendations, as well as the steps that will be taken to address those areas of concern if necessary. This memo is in keeping with that practice. 1. Maintenance of General Ledger A) With the change in the Assistant Finance Director and the hiring of Melissa Beard, the Finance Department has implemented these changes starting last October 1, 2006. The finance staff is now reviewing general ledger accounts and more importantly reconciling major accounts on a monthly basis. This practice has already paid dividends by finding under charges and over charges in our payroll system and quite a lot of mis- postings. B) The capital assets had not been maintained properly during the year because the finance department needed to get a handle on what assets were on the books and whether these assets actually existed. There was very little backup to support these capital assets. The Finance Department has spent the better part of a year researching prior year capital assets and as a result of this work found assets that had not been recorded in prior years and capital assets that had been recorded in the wrong places in prior years. These findings were material enough to cause a restatement of the prior year financial statements. The Finance Department is still working on this project, but has made major strides in having a balance sheet that reflects the true nature of our assets and sub-ledgers that support these assets. It has been a very slow process because it required starting at ground zero and building these balance sheet accounts one asset at a time. Once this project is completed, maintaining our capital assets should be relatively easy. 2. Related Party Transaction The Finance Department's response was addressed in last years Comments to the Management Letter. This item will continue to be on the management letter as long as the loan is outstanding and Mr. Fuller is a member of the WEDC board. 3. Accounting and Administration We concur with the Auditors' findings. These items were found during research (see Item 1B of this memo) of prior year balance sheet transactions. The Finance Department and the WEDC worked together to clean up the balance sheet. It is our opinion that the incorrect booking of these assets in prior years was for the most part the fault of the Finance Department, because of its failure to understand the transactions before the transactions were booked. Asking the right questions is very important in understanding the complex business transactions initiated by the WEDC. 4. Depreciation of Capital Assets We agree with the Auditors' findings. This item is directly associated with Item 1B. It was a decision by the Finance Department not to put capital assets into Incode until we were able to identify the capital assets already on the books. Once the capital assets have been identified and the balances verified, the Finance Department will load them into the Incode Module. We are looking forward to using the Incode Module for calculating depreciation as it is much easier that using spreadsheets. 5. Municipal Courts Operation We concur with the Auditors' findings and endorse their recommendation. The Municipal Courts accounting system is separate from the financial system used by the majority of the City. Accounting for court revenue and all the different state fees is very complex. The finance department reconciled for the first time this year the accounts receivable generated by the Courts accounting system. Since the Finance Department does not work with this system on a day to day basis, this process was difficult. The Finance Department requested funding for Incode's court module in this year's budget, but it was cut by the previous City Manager. 6. Implementation of GASB 45 GASB 45 does not currently apply to the City of Wylie. The city has not made any commitments to retirees for future benefits other than what they will receive through TMRS. 7. Implementation of GASB 47 As recommended by the auditors, we will obtain a copy of GASB 47 and the publication by the GFOA so that we will be up to date when this pronouncement becomes effective. ,.. -... ,...„ \-\ i . . 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'- CITY OF WYLIE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2006 Prepared by Finance Department Larry Williamson, Finance Director Melissa Beard, Senior Accountant CITY OF WYLIE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Year Ended September 30, 2006 TABLE OF CONTENTS Page Exhibit/Table INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement 5 Organizational Chart 6 List of Principal Officials 7 FINANCIAL SECTION Independent Auditors' Report on Financial Statements 11 Management's Discussion and Analysis (Required Supplementary Information) 15 Basic Financial Statements Government-wide Financial Statements: 25 Exhibit A-1 Statement of Net Assets 25 Exhibit A-2 Statement of Activities Fund Financial Statements: 28 Exhibit A-3 Balance Sheet-Governmental Funds Reconciliation of the Governmental Funds 29 Exhibit A-4 Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in 30 Exhibit A-5 Fund Balances -Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 31 Exhibit A-6 Statement of Net Assets-Proprietary Funds 32 Exhibit A-7 Statement of Revenues, Expenses, and Changes in 33 Exhibit A-8 Fund Net Assets- Proprietary Funds Statement of Cash Flows-Proprietary Funds 34 Exhibit A-9 Notes to the Financial Statements 35 Required Supplementary Information: Budgetary Comparison Schedules: General Fund 60 Exhibit B-1 CITY OF WYLIE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Year Ended September 30, 2006 TABLE OF CONTENTS Page Exhibit/Table Combining Statements and Budgetary Comparison Schedules as Supplementary Information: Combining Balance Sheet-All Nonmajor Governmental Funds 64 Exhibit C-1 Combining Statement of Revenues, Expenditures and Changes in Fund Balances-All Nonmajor Governmental Funds 65 Exhibit C-2 Special Revenue Funds: Combining Balance Sheet- Nonmajor Special Revenue Funds 66 Exhibit C-3 Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Special Revenue Funds 68 Exhibit C-4 Budgetary Comparison Schedules: 4B Sales Tax Revenue Fund 70 Exhibit C-5 Park Acquisition and Improvement 71 Exhibit C-6 Emergency Communication Fund 72 Exhibit C-7 Fire Training Center 73 Exhibit C-8 Debt Service Funds: Combining Balance Sheet- Nonmajor Debt Service Funds 74 Exhibit C-9 Combining Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Debt Service Funds 75 Exhibit C-10 Budgetary Comparison Schedules: General Obligation Debt Service 76 Exhibit C-11 4B Debt Service 1996 77 Exhibit C-12 4B Debt Service 2005 78 Exhibit C-13 Capital Projects Funds: Combining Balance Sheet- Nonmajor Capital Projects Funds 79 Exhibit C-14 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Projects Funds 80 Exhibit C-15 CITY OF WYLIE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Year Ended September 30, 2006 TABLE OF CONTENTS Page Exhibit/Table STATISTICAL SECTION Net Assets by Component 84 Table D-1 Expenses, Program Revenues, and Net(Expense)/Revenue 85 Table D-2 General Revenues and Total Change in Net Assets 86 Table D-3 Program Revenues by Function/Program 87 Table D-4 Fund Balances of Governmental Funds 88 Table D-5 Changes in Fund Balances of Governmental Funds 89 Table D-6 Tax Revenues by Source, Governmental Funds 90 Table D-7 Assessed Value and Estimated Actual Value of Taxable Property 91 Table D-8 Direct and Overlapping Property Tax Rates 92 Table D-9 Principal Property Tax Payers 93 Table D-10 Property Tax Levies and Collections 94 Table D-11 Direct and Overlapping Sales Tax Rates 95 Table D-12 Sales Tax Revenue Payers by Industry 96 Table D-13 Ratios of Outstanding Debt by Type 97 Table D-14 Ratios of General Bonded Debt Outstanding 98 Table D-15 Direct and Overlapping Governmental Activities Debt 99 Table D-16 Legal Debt Margin Information 100 Table D-17 Pledged-Revenue Coverage 101 Table D-18 Demographic and Economic Statistics 102 Table D-19 Principal Employers 103 Table D-20 Full-Time-Equivalent Employees by Function/Program 104 Table D-21 Operating Indicators By Function/Program 105 Table D-22 Capital Asset Statistics by Function/Program 106 Table D-23 iii This page is left blank intentionally. iv Introductory Section v This page is left blank intentionally. vi CITY OF WYLIE Our Mission ...to be responsible stewards of the public trust, to strive for excellence in public service and to enhance the quality of life for all. January 31, 2007 The Honorable John Mondy, Mayor Members of the City Council And the Citizens City of Wylie,Texas Financial policies of the City of Wylie require that the City's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual Financial Report (CAFR) for the City of Wylie,Texas for the fiscal year ended September 30, 2006, is hereby issued. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making the representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City's assets from loss,theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute assurance, that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City's financial records have been audited by Rutledge Crain & Company, PC, Certified Public Accountants, as required by the City Charter. This CAFR has been prepared based upon those audited records. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2006, are free of material misstatement. This independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended September 30, 2006, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. 1 2000 Highway 78 North • Wylie,Texas 75098 • 972.442.8100 • www.wylietexas.gov GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditor. Profile of the City The City of Wylie is located in the south central portion of Collin County, approximately 23 miles northeast of downtown Dallas. Incorporated in 1887, the City adopted its Home Rule Charter on January 19, 1985, and operates under a council-manager form of government. The City Council is comprised of a Mayor and six council members. All members are elected at-large on a staggered and nonpartisan basis for three-year terms. They are responsible to enact local legislation, provide policy, and annually adopt the operating budget. They appoint the City Manager, City Attorney, Judge of the Municipal Court and members of various boards and commissions. The City Manager, under the oversight of the City Council, is responsible for the proper administration of the daily operations of the City. The City provides a full range of municipal services including general government, public safety, police, fire, emergency communications), streets, library, parks and recreation, planning and zoning, code enforcement, animal control, and water and sewer utilities. Sanitation services are provided by the City but are privately contracted. The Wylie Economic Development Corporation (WEDC) is included in the financial statements as a component unit is. Its purpose is to aid, promote and further the economic development within the City. The Wylie Park and Recreation Facilities Development Corporation (4B Corporation) is combined within the financial statements of the City. Both WEDC and the 4B Corporation are primarily funded with sales tax revenues. Both corporations are discussed more fully in the notes to the financial statements. The annual budget of the City serves as the foundation for its financial planning and control. The budget is proposed by the City Manager and adopted by the City Council in accordance with policies and procedures established by the City Charter, Council ordinances and state law. The budget process begins each year with departmental requests to the City Manager. After departmental review by the City Manager, a proposed budget is prepared for presentation to the City Council. The City Council reviews the budget in subsequent work sessions and a formal budget is prepared and made available to the public for review by August 5th each year. Prior to official adoption of the budget by council, a public hearing on the proposed budget is held to allow for public input. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Wylie operates. Local economy Fast paced growth is currently one of the identifying characteristics of the City. The 2006 population of the City has been estimated to be 33,000. This represents a 10.7% increase over the previous year. The trend of fast paced growth is continuing into fiscal year 2007. The tremendous growth in population has also brought about a large growth in residential construction. Residential construction permits increased by 10%from the previous year with 1,100 permits issued during fiscal year 2006. It is estimated that this new residential construction added$150 million to our local tax base. When both residential and commercial growth is considered our total tax base has grown by 12.3% over the previous year. Our tax value this year, as provided by the Collin County Appraisal District, has grown to $1,566.6 million. The end result of the growth is a favorable economic environment within the City of Wylie and recognition as one of the fastest growing areas in Collin County and the Dallas-Ft. Worth Metroplex. 2 Long-term financial planning In 2006, the City developed a long-term Capital Improvement Program for major infrastructure improvements. The plan included street and park improvements, a new city hall, library, fire station, recreation center and sidewalks. The voters of the City of Wylie authorized the City to issue $73,950,000 in General Obligation Bonds to fund this capital improvement program. The first series of bonds were sold in late March of 2006. Cash management The City currently utilizes American National Bank as the main depository. All City funds are deposited into the city depository on a daily basis. Bank deposits are secured by allowable securities and held as collateral at the Federal Reserve Bank. The market value of the pledged collateral must be equal to or greater than 102% of the principal and accrued interest for cash balances in excess of the FDIC insurance coverage. City officials, as allowed by the City Investment Policy and Texas statutes, invest cash balances during the year. The three overall objectives of the City's investment policy, in their order of importance, are the preservation and safety of principal, liquidity and yield. At September 30, 2006, the fair market value of the City's investment portfolio was$62,340,654. Risk management The City is exposed to various risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. During FY2006, the City purchased general liability, property, public official and police professional liability insurance from the Texas Municipal League Intergovernmental Risk Pool (the Pool). In addition, the City's worker compensation insurance is also with the Pool. United Healthcare provided employee group medical coverage for FY2006. Employees have the option of providing for any family coverage. The Texas Workforce Commission provides unemployment benefits to former eligible employees. Retirement system The City provides pension benefits to all full-time employees through a nontraditional, joint contributory defined benefit plan administered by the Texas Municipal Retirement System, an agent multiple- employer public retirement system. Pension expense for the calendar year ended December 31, 2006, (including prior service costs amortized over 25 years)was$800,020. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Wylie for its comprehensive annual financial report(CAFR)for the fiscal year ended September 30, 2005. The City has participated in the program for many years and has been awarded the Certificate numerous times. In order to be awarded a Certificate of Achievement, the government must publish an easily readable and efficiently organized CAFR. This report must satisfy both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report could not be accomplished without the dedicated services of the entire staff of the Finance Department. We would like to express our appreciation to all staff members who assisted and contributed to the preparation of this report. Acknowledgement is also given to representatives of Rutledge Crain & Company, PC, Certified Public Accountants for their dedicated assistance in producing this report. 3 Special acknowledgement is given to the City Manager, Mayor and the members of the City Council for their support for maintaining the highest standards of professionalism in the management of the City of Wylie finances. Respect i ly ubmi d, '" illi m n i a so F n ce Director 4 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Wylie Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2005 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and fmancial reporting. ''SNCE OPy� ��/ram SLUR �"NNAOA President unuw *14.,4490. Executive Director 5 City of Wylie Organizational Chart Mayor And City Council Wylie Econo t a-' Parks& �j Boards s `° City City Municipal-t; Development Recreation and Manager Attorney Judge olporation 1@rporation unmmissions Assistant City Manager Public Information Office _... _..._. �.z._. _.M.. n i -= I' „ 8 z Support ' P bfis Engineering Fire ' Police y Finance LibraryBuilding ing ` Services Services - Inspections Communications Animal Accounting! City — Human — Streets — Building Control Finance Secretary Resources Permits a .»s: .<a»x ,..r-...-s,rr,_44fTr" ,.i7'.,' ,. ac ^:.,; "'*'-, . v-;at.ci :rt .;K:.;,-P,'w'.. .. ffTt.. x't,r'nc.. ... e".f., 5",..s"rn+,°." -m:, ,wwri'-n"' ...... _ Utility Billing/ . Planning& — purchasing — Utilities _ Building Collections Zoning Water/Sewer Inspections r -Via': 'err';rsw.. .. .�.r4-#�5�... 'sze-:��- ^� .nr;,; — Information _ Fleet — Code Technology Maintenance Enforcement Ir :".tt:>"7*v,,,rt'r", >'..,._.,-,moc'S`.t ff `r 4et a r.m E.rsa, ,&�,e, aa- I Municipal — Parks/ Court Recreation _ Facilities Maintenance CITY OF WYLIE, TEXAS PRINCIPAL OFFICIALS September 30, 2006 City Council John Mondy, Mayor Carter Porter, Mayor Pro Tern Earl Newsom, Councilmember M. G. "Red" Byboth, Councilmember Eric Hogue, Councilmember Merrill Young, Councilmember Rick White, Councilmember City Staff Mindy Manson, City Manager Jeff Butters, Assistant City Manager/Police Chief Randy Corbin, Fire Chief Larry Williamson, Finance Director Carole Ehrlich, City Secretary Chris Hoisted, City Engineer Mike Sferra, Public Services Director Rachel Orozco, Library Director Johnny Bray, Building Director Renae' 011ie, Planning Director Sam Satterwhite, WEDC Director Other Appointed Officials Rutledge Crain & Company PC, Auditors Abernathy, Roeder, Robertson, City Attorney Fulbright & Jaworski, LLP, Bond Counsel First Southwest Company, Financial Advisors 7 This page is left blank intentionally. 8 Financial Section 9 This page is left blank intentionally. 10 RUTLEDGE CRAIN & COMPANY, PC CERTIFIED PUBLIC ACCOUNTANTS 2401 Garden Park Court, Suite B Arlington, Texas 76013 Independent Auditors' Report on Financial Statements To the City Council City of Wylie,Texas We have audited the accompanying financial statements of the governmental activities,the business-type activities,the aggregate discretely presented component unit,each major fund,and the aggregate remaining fund information of the City of Wylie, Texas as of and for the year ended September 30, 2006, which collectively comprise the City's basic financial statements as listed in the table of contents.These financial statements are the responsibility of the City of Wylie, Texas'management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion,the financial statements referred to above present fairly,in all material respects,the respective financial position of the governmental activities,the business-type activities,the aggregate discretely presented component unit, each major fund,and the aggregate remaining fund information of the City of Wylie,Texas as of September 30,2006, and the respective changes in financial position and cash flows,where applicable,thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. The Management's Discussion and Analysis and budgetary comparison schedules on pages 15-21 and pages 60-61, identified as Required Supplementary Information in the table of contents,are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplemental information. However,we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming opinions on the financial statements which collectively comprise the City of Wylie,Texas'basic financial statements. The introductory section,combining and individual nonmajor fund financial statements,schedules,and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion,are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and the statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly,we express no opinion on them. GLe0(4--- ic , PC January 12,2007 U 11 Members: Metro(817)265-9989 American Institute of Certified Public Accountants Fax(817)861-9623 Texas Society of Certified Public Accountants This page is left blank intentionally. 12 Management's Discussion and Analysis 13 This page is left blank intentionally. 24 EXHIBIT A-1 CITY OF WYLIE, TEXAS STATEMENT OF NET ASSETS SEPTEMBER 30, 2006 Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Cash and cash equivalents $ 3,593,515 $ 150,977 $ 3,744,492 $ 26,935 Investments 47,380,175 5,886,396 53,266,571 360,753 Receivables(net of allowances for uncollectibles) 2,173,511 1,537,797 3,711,308 348,892 Inventories 72,891 47,838 120,729 1,929,522 Prepaid items 129,288 18,579 147,867 76,178 Restricted assets: Cash and cash equivalents — 1,158,980 1,158,980 — Investments -- 8,713,330 8,713,330 — Receivables — 3,085,205 3,085,205 — Deferred charges 495,785 128,429 624,214 — Capital assets(net of accumulated depreciation) Land 25,057,852 59,141 25,116,993 -- Construction in progress 618,018 2,407,582 3,025,600 — Buildings 2,649,074 5,839 2,654,913 -- Improvements other than buildings 76,322,159 34,973,843 111,296,002 — Machinery and equipment 3,579,177 76,035 3,655,212 — Total Assets 162,071,445 58,249,971 220,321,416 2,742,280 LIABILITIES Accounts payable and other current liabilities 1,802,328 307,679 2,110,007 9,978 Unearned revenue -- — -- 147,648 Accrued interest payable 1,014,614 41,932 1,056,546 5,197 Due to other governments 138,874 — 138,874 — Liabilities payable from restricted assets -- 1,031,383 1,031,383 -- Noncurrent liabilities: Due within one year 1,752,168 705,091 2,457,259 188,832 Due in more than one year 60,564,374 7,215,670 67,780,044 1,120,656 Total Liabilities 65,272,358 9,301,755 74,574,113 1,472,311 NET ASSETS Invested in Capital Assets, Net of Related Debt 81,735,348 30,840,491 112,575,839 — Restricted For: Debt Service 1,245,844 343,849 1,589,693 — Capital Projects 39,960,133 11,582,283 51,542,416 — Unrestricted (26,142,238) 6,181,593 (19,960,645) 1,269,969 Total Net Assets $ 96,799,087 $ 48,948,216 $ 145,747,303 $ 1,269,969 The accompanying notes are an integral part of this statement. 25 CITY OF WYLIE, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2006 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses _ Services Contributions Contributions PRIMARY GOVERNMENT: Governmental Activities: General government $ 4,050,307 $ 1,862,104 $ — $ -- Public safety 8,003,798 946,408 — 72,402 Urban development 862,184 1,748,000 — — Streets 4,578,339 -- -- 8,025,212 Community service 2,651,744 221,299 37,731 314,290 Interest on long-term debt 1,751,355 — — — Total governmental activities 21,897,727 4,777,811 37,731 8,411,904 Business-type Activities: Utility 8,843,954 8,832,061 _ 5,148,706 Total Business-type Activities 8,843,954 8,832,061 — 5,148,706 Total Primary Government $ 30,741,681 $ 13,609,872 $ 37,731 $ 13,560,610 COMPONENT UNITS: Wylie Economic Development Corporation $ 1,562,484 $ 10,814 $ $ -- Total Component Units $ 1,562,484 $_ 10,814 $_ — $__ General Revenues: Ad valorem taxes Sales Taxes Franchise Taxes Unrestricted Investment Earnings Miscellaneous income Transfers Total General Revenues Change in Net Assets Net Assets-Beginning Net Assets-Ending The accompanying notes are an integral part of this statement. 26 EXHIBIT A-2 Net(Expense) Revenue and Changes in Net Assets _ Governmental Business-type Component Activities Activities Total Units $ (2,188,203) $ (2,188,203) (6,984,988) (6,984,988) 885,816 885,816 3,446,873 3,446,873 (2,078,424) (2,078,424) (1,751,355) (1,751,355) (8,670,281) (8,670,281) -- $ 5,136,813 5,136,813 — 5,136,813 5,136,813 (8,670,281) 5,136,813 (3,533,468) $ (1,551,670) (1,551,670) 11,232,673 — 11,232,673 -- 3,308,755 -- 3,308,755 1,098,726 1,941,805 -- 1,941,805 — 1,406,561 821,375 2,227,936 22,727 469,580 315,329 784,909 13,775 447,137 (447,137) — -- 18,806,511 689,567 19,496,078 1,135,228 10,136,230 5,826,380 15,962,610 (416,442) 86,662,857 43,121,836 129,784,693 _ 1,686,411 $ 96,799,087 $ 48,948,216 $ 145,747,303 $ 1,269,969 27 EXHIBIT A-3 CITY OF WYLIE, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30, 2006 2006 Other Total General General Governmental Governmental Fund Obligation _ Funds Funds ASSETS Cash and cash equivalents $ 457,663 $ 2,537,801 $ 490,353 $ 3,485,817 Investments 6,092,602 33,542,334 6,321,793 45,956,729 Receivables(net of allowances for uncollectibles): Taxes 232,430 -- 65,994 298,424 Accounts 190,124 -- - 190,124 Other 307,442 -- 39,101 346,543 Intergovernmental 410,537 -- 201,244 611,781 Due from other funds 13,247 -- 1,838 15,085 Inventories, at cost 72,891 - - 72,891 Prepaid items 120,900 - 8,388 129,288 Total Assets $ 7,897,836 $ 36,080,135 $ 7,128,711 $ 51,106,682 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,028,347 $ 45,767 $ 66,962 $ 1,141,076 Other payables and accruals 414,239 - 58,462 472,701 Retainage payable - - 188,551 188,551 Due to other funds - -- 15,085 15,085 Intergovernmental payable 138,874 - -- 138,874 Deferred revenue 198,606 -- 61,090 259,696 Total Liabilities 1,780,066 45,767 390,150 2,215,983 Fund balances: Reserved for: Inventory 72,891 -- -- 72,891 Prepaids 120,900 -- 8,388 129,288 Debt service -- - 1,184,754 1,184,754 Unreserved, reported in: General fund, undesignated 5,923,979 -- - 5,923,979 Special revenue funds - - 1,619,655 1,619,655 Capital projects funds -- 36,034,368 3,925,764 39,960,132 Total fund balances 6,117,770 36,034,368 6,738,561 48,890,699 Total Liabilities and Fund Balances $ 7,897,836 $ 36,080,135 $ 7,128,711 $ 51,106,682 The accompanying notes are an integral part of this statement. 28 EXHIBIT A-4 CITY OF WYLIE, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2006 Total fund balances-governmental funds balance sheet $ 48,890,699 Amounts reported for governmental activities in the statement of net assets ("SNA")are different because: Capital assets used in governmental activities are not reported in the funds. 106,000,474 Property taxes receivable unavailable to pay for current period expenditures are deferred in the funds. 232,844 The assets and liabilities of internal service funds are included in governmental activities in the SNA. 3,756,950 Payables for bond principal which are not due in the current period are not reported in the funds. (62,142,930) Payables for bond interest which are not due in the current period are not reported in the funds. (1,014,614) Payables for compensated absences which are not due in the current period are not reported in the funds. (173,612) Other long-term assets are not available to pay for current-period expenditures and are deferred in the funds. 495,786 Franchise taxes receivable unavailable to pay for current period expenditures are not accrued in the funds. 753,490 Net assets of governmental activities-statement of net assets $ 96,799,087 The accompanying notes are an integral part of this statement. 29 EXHIBIT A-5 CITY OF WYLIE, TEXAS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS - FOR THE YEAR ENDED SEPTEMBER 30, 2006 2006 Other Total General General Governmental Governmental Fund Obligation Funds Funds Revenues: Ad valorem taxes $ 9,067,559 $ - $ 2,140,194 $ 11,207,753 Sales taxes 2,210,030 - 1,098,725 3,308,755 Franchise fees 1,893,383 -- - 1,893,383 Licenses and permits 1,319,956 - - 1,319,956 Intergovernmental 443,124 - -- 443,124 Services fees 1,776,219 - 545,811 2,322,030 Court fees 617,288 - - 617,288 Interest income 325,587 755,136 325,839 1,406,562 Miscellaneous income 174,717 - 684,552 859,269 Total revenues 17,827,863 755,136 4,795,121 23,378,120 Expenditures: Current: General government 4,029,476 45,768 -- 4,075,244 Public Safety 7,715,837 -- 1,176,250 8,892,087 Urban development 859,697 - - 859,697 Streets 1,548,675 -- - 1,548,675 Community service 1,972,020 - 817,492 2,789,512 Capital outlay -- - 2,190,857 2,190,857 Debt service: Principal 122,303 -- 1,431,704 1,554,007 Interest and fiscal charges 17,122 300 1,091,835 1,109,257 Bond issuance costs -- 149,831 4,586 _ 154,417 Total expenditures 16,265,130 195,899 6,712,724 23,173,753 Excess(deficiency)of revenues over (under)expenditures 1,562,733 559,237 (1,917,603) 204,367 Other financing sources(uses): Transfers in 427,000 - 866,280 1,293,280 Transfers out (365,026) - (1,181,023) (1,546,049) Issuance of long-term debt - 35,274,434 954,566 36,229,000 Premium on bonds issued - 200,697 - 200,697 Total other financing sources(uses) 61,974 35,475,131 639,823 36,176,928 Net change in fund balances 1,624,707 36,034,368 (1,277,780) 36,381,295 Fund balances, October 1 4,493,063 - 8,016,341 12,509,404 Fund balances, September 30 $ 6,117,770 $ 36,034,368 $ 6,738,561 $ 48,890,699 The accompanying notes are an integral part of this statement. 30 EXHIBIT A-6 CITY OF WYLIE, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2006 Net change in fund balances-total governmental funds $ 36,381,295 Amounts reported for governmental activities in the statement of activities ("SOA")are different because: Capital outlays are not reported as expenses in the SOA. 3,943,594 The depreciation of capital assets used in governmental activities is not reported in the funds. (3,673,516) Donations of capital assets increase net assets in the SOA but not in the funds. 8,025,212 Certain property tax revenues are deferred in the funds.This is the change in these amounts this year. 24,919 Expenses not requiring the use of current financial resources are not reported as expenditures in the funds. (15,138) Repayment of bond principal is an expenditure in the funds but is not an expense in the SOA. 1,554,008 Repayment of capital lease principal is an expenditure in the funds but is not an expense in the SOA. 16,097 Bond issuance costs and similar items are amortized in the SOA but not in the funds (34,776) (Increase)decrease in accrued interest from beginning of period to end of period (642,098) The net revenue (expense)of internal service funds is reported with governmental activities. 846,495 Compensated absences are reported as the amount earned in the SOA but as the amount paid in the funds. (70,136) Certain fine revenues are deferred in the funds.This is the change in these amounts this year. 7,134 Revenues in the SOA for franchise taxes not providing current financial resources are not reported in the funds. 48,422 Proceeds of bonds do not provide revenue in the SOA,but are reported as current resources in the funds. (36,074,582) Bond premiums are reported in the funds but not in the SOA. (200,699) Change in net assets of governmental activities-statement of activities $ 10,136,230 The accompanying notes are an integral part of this statement. 31 EXHIBIT A-7 CITY OF WYLIE, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2006 Nonmajor Enterprise Internal Service Fund Fund Utility Fleet Fund Replacement ASSETS Current Assets: Cash and cash equivalents $ 150,977 $ 107,698 Investments 5,886,396 1,423,446 Accounts receivables(net of allowances for uncollectibles): 1,492,246 — Other receivables 45,551 — Inventories, at cost 47,838 — Prepaid items 18,579 — Restricted assets: Cash and cash equivalents 1,158,980 — Investments 8,713,330 -- Accounts receivable 3,085,205 Total current assets 20,599,102 1,531,1.44 Deferred charges 128,429 Capital assets: Land 59,141 — Buildings 27,888 — Waterworks system 21,763,816 -- Sewer system 24,729,793 — Machinery and equipment 509,557 3,778,280 Construction in progress 2,407,582 — Accumulated depreciation (11,975,337) _ (1,552,474) Total capital assets(net of accumlated depreciation) 37,522,440 2,225,806 Total noncurrent assets 37,650,869 2,225,806 Total Assets 58,249,971 3,756,950 LIABILITIES Current liabilities: Accounts payable 166,564 -- Other payables and accruals 141,115 -- Compensated absences payable 107,388 -- General obligation bonds payable-current 425,556 -- Combination bonds-tax and revenue-current 49,389 -- Revenue bonds payable -current 160,000 — Accrued interest payable 41,932 — Liabilities payable from restricted assets: Accounts payable 461,551 — Capital leases payable-current 185,000 — Customer deposits 384,832 -- Total current liabilities 2,123,327 -- Noncurrent liabilities: General obligation bonds payable 2,800,556 -- Combination bonds-tax and revenue 1,108,321 -- Revenue bonds payable 3,269,551 -- Total noncurrent liabilities 7,178,428 -- Total Liabilities 9,301,755 -- NET ASSETS Invested in capital assets, net of related debt 30,840,491 — Restricted for debt service 343,849 — Restricted for construction 11,582,283 Unrestricted 6,181,593 3,756,950 Total Net Assets $ 48,948,216 $ 3,756,950 The accompanying notes are an integral part of this statement. 32 EXHIBIT A-8 CITY OF WYLIE, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS-PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Nonmajor Enterprise Internal Service Fund Fund Utility Fleet Fund Replacement OPERATING REVENUES: Water $ 4,539,253 $ — Sewer 3,267,552 — Sewer pass through 658,084 — Penalties 113,562 — Water taps 159,814 — Sewer taps 29,150 — Reconnect fees 64,645 — Department user fees — 406,771 Total Operating Revenues 8,832,060 406,771 OPERATING EXPENSES: Water purchases 1,422,544 — Sewer treatment 2,025,670 -- Utility administration 619,312 — Water department 1,030,370 — Sewer department 815,579 — Utility billing 501,891 — Engineering 390,154 — Combined services 119,711 — Other -- 8,770 Depreciation and amortization 1,132,941 410,453 Total Operating Expenses 8,058,172 419,223 Operating Income(Loss) 773,888 (12,452) NON-OPERATING REVENUES(EXPENSES): Interest revenue 821,375 56,013 Miscellaneous income 315,330 74,040 Gain (loss)on disposal of capital assets — 28,988 Interest expense (785,782) — Total Non-operating Revenues(Expenses) 350,923 _ 159,041 Net Income(Loss)before Transfers and Contributions _ 1,124,811 146,589 TRANSFERS AND CAPITAL CONTRIBUTIONS: Capital contributions 5,148,706 — Transfers in — 699,906 Transfers out (447,137) -- Change in net assets 5,826,380 846,495 Net assets, October 1 43,121,836 2,910,455 Net assets, September 30 $__ 48,948,216 $ 3,756,950 The accompanying notes are an integral part of this statement. 33 EXHIBIT A-9 CITY OF WYLIE, TEXAS STATEMENT OF CASH FLOWS Governmental PROPRIETARY FUNDS Activities _- FOR THE YEAR ENDED SEPTEMBER 30, 2006 Enterprise Internal Service Fund _ Fund Utility Fleet _ Fund Replacement Cash Flows from Operating Activities: Cash Received from Customers $ 9,295,447 $ -- Cash Receipts(Payments)for lnterfund Services to Other Funds -- 480,811 Cash Payments to Employees for Services (1,876,282) — Cash Payments to Other Suppliers for Goods and Services (4,888,751) (8,770) Net Cash Provided(Used) by Operating Activities 2,530,414 472,041 Cash Flows from Non-capital Financing Activities: Transfers From Other Funds -- 699,906 Transfers To Other Funds (477,137) — Net Cash Provided(Used) by Non-capital Financing Activities (477,137) 699,906 Cash Flows from Capital and Related Financing Activities: Proceeds from capital debt 1,206,000 — Principal and interest paid (1,625,398) — Acquisition or Construction of Capital Assets (3,705,503) (1,042,053) Gain from Disposal of Capital Assets -- 28,988 Capital contributions 1,794,525 _Net Cash Provided(Used)for Capital&Related Financing Activities (2,330,376) (1,013,065) Cash Flows from Investing Activities: Interest and Dividends on Investments 821,375 56,013 Net Cash Provided(Used)for Investing Activities 821,375 56,013 Net Increase(Decrease) in Cash and Cash Equivalents 544,276 214,895 Cash and Cash Equivalents at Beginning of Year 15,365,407 1,316,249 Cash and Cash Equivalents at End of Year $__ 15,909,683 $ 1,531,144 Reconciliation to Balance Sheet: Cash $ 150,977 107,698 Cash Equivalents in Investments 5,886,396 1,423,446 Restricted Cash 1,158,980 -- Restricted Cash Equivalents in Restricted Investments 8,713,330 -- $ 15,909,683 $ 1,531,144 Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income(Loss) $ 773,888 $ (12,452) Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities Depreciation and amortization 1,132,941 410,453 Miscellaneous Income 315,330 74,040 Change in Assets and Liabilities: Decrease(Increase)in Receivables 22,271 -- Decrease(Increase)in Due from Other Governments 237,296 — Decrease(Increase)in Inventories (8,944) — Decrease(Increase)in Prepaids (18,579) — Decrease(Increase)in Restricted Receivables 103,644 — Increase(Decrease)in Accounts Payable 31,286 -- Increase(Decrease)in Other Payables and Accruals 41,877 -- Increase(Decrease)in Compensated Absences (1,475) -- Increase(Decrease)in Customer Deposits (215,154) -- Increase(Decrease)in Accounts Payable from Restricted Assets 116,033 — Total Adjustments 1,756,526 484,493 Net Cash Provided (Used)by Operating Activities $ 2,530,414 $ 472,041 Noncash Items: Developer Contributions of Capital Assets $ 3,354,181 $ The accompanying notes are an integral part of this statement. 34 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Wylie, Texas, was incorporated in 1887 and operates under the Council-Manager form of government as a duly incorporated home rule city as authorized under the Constitution of the State of Texas, and provides the following services: public safety(police and fire),streets,water,sewer and sanitation,public improvements, planning and zoning, cultural, and general administrative services. The accounting policies of the City of Wylie,Texas,conform to generally accepted accounting principals issued by the Governmental Accounting Standards Board which is the recognized financial accounting standard setting body for governmental entities.The notes to the financial statements are an integral part of the City's basic financial statements. The City of Wylie is a home rule municipality governed by an elected mayor and a six member City Council who appoint a City Manager. The City's (primary government)financial statements include its component units. The accompanying basic financial statements comply with the provisions of the GASB Statement No.14,"The Financial Reporting Entity,"in that the financial statements include all organizations, activities,functions and component units for which the City (the "primary government") is financially accountable. Financial accountability is defined as the appointment of a voting majority of a legally separate organization's governing body and either (1) the City's ability to impose its will over the organization, or (2) the potential that the organization will provide a financial benefit to or impose a financial burden on the City. Blended Component Unit The Wylie Park and Recreation Facilities Development Corporation (the 4B Corporation) is presented in the basicfinancial statements as a blended component unit. A voting majority of the 4B Corporation board is made up of City Council members. All members of the corporation other than the board are City employees. The City Manager is the chief executive operating officer of the 4B Corporation. The purpose of the 4B Corporation, which is financed with a voter approved half-cent sales tax,is to promote economic development within the City through the construction of park and recreation facilities. The 4B Corporation has a September 30 year end. The 4B Corporation's financial, budget,treasury,and personnel functions are totally integrated with the City. All of the 4B Corporation's financial information is presented in the basic and combining financial statements, along with the notes to these financial statements. The 4B Corporation does not issue separate financial statements. Discretely Presented Component Unit The Wylie Economic Development Corporation (WEDC) is a discretely presented component unit in the combined financial statements. The governing board of the WEDC is appointed by the City Council and the WEDC's operating budget is subject to approval of the City Council. The purpose of the WEDC, which is financed with a voter approved half-cent City sales tax, is to aid, promote and further the economic development within the City. The WEDC is presented as a government fund type and has a September 30 year end. Under a contract,the financial,budget,treasury,and personnel functions of the WEDC are integrated with the City. All of WEDC's financial information is presented in the combined and combining financial statements, along with the notes to these financial statements. WEDC does not issue separate financial statements. 35 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 B. Government-wide and Fund Financial Statements The government-wide financial statements(i.e.the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part,the effect of interfund activity has been removed from these statements. Governmental activities,which normally are supported by taxes and intergovernmental revenues,are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. Likewise,the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1)charges to customers or applicants who purchase,use,or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds,proprietary funds,and fiduciary funds,even though the latter are excluded from the government-wide financial statements. Major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting,as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose,the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments,are recorded only when payment is due. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Sales taxes collected and held by the State and merchants at year end on behalf of the City are also recognized as revenue. Franchise taxes, fines and permits,and miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The 2006 General Obligations Capital Projects Fund accounts for the construction of the new city hall, recreation center and library. This fund also accounts for the construction of some of the City's new streets,sidewalks,and parks. 36 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30, 2006 The City reports the following major proprietary fund: The Utility Fund operates the water distribution system and the wastewater treatment plants,wastewater pumping stations, and collection systems. Additionally,the City reports the following fund types: The Special Revenue Funds account for specific revenue sources that are legally restricted to expenditures for specified purposes(not including expendable trusts or major capital projects). The 4B Sales Tax Revenue Fund-accounts for sales tax monies specifically designated for promoting economic development within the City by developing,implementing, providing, and financing park and recreation projects. Parks Acquisition and Improvement Fund-accounts for the development and improvement of City parks. Emergency Communications Fund-accounts for the operations of the 911 dispatch services of the police and fire departments. Fire Training Center-accounts for First Responder fees specifically designated for the construction of the Fire Training Center. Debt Service Funds account for the accumulation of resources to be used for the payment of principal and interest. The General Obligation Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. 4B Debt Service 1996 Fund-accounts for the accumulation of resources to be used for the payment of principal and interest on the 4B Sales Tax Revenue Bonds-Series 1996. 4B Debt Service 2005 Fund-accounts for the accumulation of resources to be used for the payment of principal and interest on the 4B Sales Tax Revenue Bonds-Series 2005. Capital Projects Funds are used to account for acquisition and construction of major capital facilities(other than those accounted for within the City's proprietary fund). Capital projects are funded primarily by general obligation bonds. The Street Construction Capital Projects Fund accounts for the construction of streets and sidewalks. Street Perimeter -accounts for construction of perimeter streets, curbs and gutters that border new subdivisions. Fees collected from developers are the primary means of financing this fund. Parks Construction-accounts for the development and construction of parks. The 2005 Public Property Financial Contractual Obligations Capital Projects Fund accounts for the purchase of certain capital equipment, including radio read meters,a radio system,and a Quint fire truck. Internal Service Fund accounts for financial resources set aside annually to replace equipment as its useful life is consumed. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. 37 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds,subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the City's water and wastewater function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1)charges to customers or applicants for goods,services,or privileges provided,2)operating grants and contributions,and 3)capital grants and contributions,including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues.Likewise,general revenues include all taxes, miscellaneous revenue, and interest income. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Water and Sewer enterprise fund are charges to customers for sales and services. The enterprise utility fund also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for the enterprise fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Assets, liabilities,and net assets or equity 1. Deposits and investments The City's cash and cash equivalents are considered to be cash on hand,demand deposits,and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the City to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas or the United States; (4)obligations of states,agencies,counties,cities,and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent; (5)certificates of deposit by state and national banks domiciled in this state that are (A) guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or, (B) secured by obligations that are described by(1)-(4); or, (6)fully collateralized direct repurchase agreements having a defined termination date, secured by obligations described by(1),pledged with third party selected or approved by the City,and placed through a primary government securities dealer. Investments maturing within one year of date of purchase are stated at cost or amortized cost, all other investments are stated at fair value which is based on quoted market prices. 2. Receivables and payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either"due to/from other funds" (i.e.,the current portion of inter fund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as"due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as"internal balances." 38 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Advances between funds,as reported in the fund financial statements,are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade receivables are shown net of an allowance for uncollectibles. Trade accounts receivable in excess of 60 days comprise the trade accounts receivable allowance for uncollectibles. Property taxes are levied on October 1 by the City based on the January 1 property values as assessed by the Collin County Central Appraisal District. Taxes are due without penalty until January 31,of the next calendar year. After January 31 the City has an enforceable lien with respect to both real and personal property. Under state law, property taxes levied on real property constitute a perpetual lien on the real property which cannot be forgiven without specific approval of the State Legislature. Taxes applicable to personal property can be deemed uncollectible by the City. 3. Inventories and prepaid items All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 4. Restricted assets Certain proceeds of enterprise fund revenue bonds and resources set aside for their repayment and contractually obligated assets are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants or contractual agreements. 5. Capital assets Capital assets,which include property,plant,equipment,and infrastructure assets(e.g.,roads,bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial,individual cost of more than$5,000(amount not rounded)and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property,plant,and equipment of the primary government,as well as the component units,is depreciated using the straight line method over the following estimated useful lives: Buildings 20-30 years Improvements other than buildings 20-50 years Machinery and Equipment 3-10 years 6. Compensated absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. A percentage of accrued sick leave is payable on a longevity basis at the time of termination. All vacation and sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. 39 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30, 2006 A liability for these amounts is reported in governmental funds only if they have matured,for example,as a result of employee resignations and retirements. 7. Long-term obligations In the government-wide financial statements,and proprietary fund type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities,business-type activities,or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight line method which approximate the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements,governmental fund types recognize bond premiums and discounts,as well as bond issuance costs,during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 8. Fund equity In the fund financial statements,governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets: The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net assets-governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that"Other long-term assets are not available to pay for current-period expenditures and are deferred in the funds." The details of this$495,786 difference are as follows: Bonds issuance costs: City $495,786 B. Explanation of certain differences between the governmental fund statement of revenues, expenditures,and changes in fund balances and the government-wide statement of activities: The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances-total governmental funds and changes in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that"Revenues in the Statement of Activities not providing current financial resources are not reported as revenues in the funds." The details of this$15,138 difference are as follows: Contribution to internal service fund $10,855 Other 4,283 $15,138 40 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 III. DETAILED NOTES ON ALL FUNDS A. Deposits and investments Cash At year end,the carrying amount of the City's cash on hand and deposits was$4,903,472(including restricted cash of$1,158,980). All of the bank balance was covered by federal deposit insurance and collateralized by the pledging financial institution's trust department in the City's name. Under a contractual agreement with North Texas Municipal Water Department(NTMWD),depository accounts are maintained by NTMWD for interest sinking, debt and construction reserves totaling $206,000 which are separately insured or secured by collateral pledged by NTMWD's depository. This$206,000 is included in restricted cash on the statement of net assets. The carrying amount of deposits for WEDC, the discretely presented components unit, was $26,935. The component units' cash balances are covered by the City's depository contract and therefore, all of the bank balance in the City's depository was covered by federal deposit insurance and collateral pledged by the depository in the City's name and by the City's agent. Investments As of September 30, 2006,the City and discrete component unit had the following investments: Fair Years to Investment type Value Maturity Primary Government: Government sponsored investment pool (TexPool) $61,670,001 N/A Government sponsored investment pool (LOGIC) 309,900 N/A 61,979,901 Discrete Component Unit Government sponsored investment pool (TexPool) 358,949 N/A Government sponsored investment pool (LOGIC) 1,804 N/A 360,753 Total Fair Value $62,340,654 Interest Rate Risk. In accordance with its investment policy,the City manages its exposure to declines in fair value by limiting the weighted average maturity of its portfolio to less than three years. Credit Risk. State law limits investments as described previously in Note I D. Concentration of Credit Risk. The City's investment policy does not allow for an investment in any one issuer (other than investment pools) that is in excess of five percent of the fair value of the City's total investments. Custodial Credit Risk-Deposits. In the case of deposits,this is the risk that in the event of a bank failure,the City's deposits may not be returned to it. The City requires all deposits to be covered by Federal Depository Insurance Corporation (FDIC) insurance and/or collateralized by qualified securities pledged by the City's depository in the City's name and held by the depository's agent. 41 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Custodial Credit Risk-Investments. For an investment, this is the risk that, in the event of the failure of the counterparty,the City or Discrete Component Unit will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Texas State Comptroller of Public Accounts exercises oversight responsibility over the Texas Local Government Investment Pool ("TexPool"). Oversight includes the ability to significantly influence operations, designation of management and accountability for fiscal matters. Additionally, the State Comptroller has established an advisory board composed both of participants in TexPool and of other persons who do not have a business relationship with TexPool. The advisory Board members review the investment policy and management fee structure. Finally,TexPool is rated AAA by Standard and Poors. TexPool operates in a manner consistent with the Security and Exchange Commission's Rule 2a-7 of the Investment Company Act of 1940. As such,TexPool uses amortized cost to report net assets and share prices since that amount approximates fair value. Local Government Investment Cooperative(LOGIC)operates in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940,to the extent such rule is applicable to its operations. Accordingly, LOGIC uses the amortized cost method permitted by SEC Rule 2a-7 to report net assets and share prices since that amount approximates fair value.The investment activities of LOGIC are administered by third party advisors. There is no regulatory oversight by the State of Texas over LOGIC. B. Receivables Receivables as of year-end for the governments individual major funds and nonmajor,and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts,are as follows: 2006 General Water and Nonmajor General Obligation Sewer and Other Total Taxes receivable $290,537 $ — $ — $82,492 $373,029 Allowance for uncollectibles (58,107) — — (16,498) (74,605) $232,430 $ — $ — $65,994 $298,424 Accounts receivable $269,738 $ -- $1,888,008 $ — $2,157,746 Allowance for uncollectibles (79,614) — (395,762) -- (475,376) Net accounts receivable $190,124 $ — $1,492,246 $ -- $1,682,370 Other receivables $519,555 $ — $ — $72,372 $591,927 Allowance for uncollectibles (212,113) -- — (33,271) (245,384) Net other receivables $307,442 $ — $ -- $39,101 $346,543 Intergovernmental $410,537 $ — $ — $201,244 $611,781 Revenues of the Water and Sewer Fund are reported net of uncollectible amounts. Total uncollectible amounts related to revenues of the current period were$78,465. Receivables in the discrete component unit consist of$201,244 sales tax receivable due from the state, and $147,648 in loans to private businesses. If certain contractual obligations are met by some of these private businesses at a future date, a portion and/or all of the amounts owed may be forgiven. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period.Governmental funds also defer revenue recognition 42 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 in connection with resources that have been received,but not yet earned.At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows: Unavailable Unearned Delinquent property taxes receivable (General Fund) $171,754 $ -- Court fines (General Fund) 26,852 -- Delinquent property taxes receivable (Debt Service Fund) 61,090 -- Total deferred/unearned revenue for governmental funds $259,696 $ -- The unearned revenue in the discrete component unit results from installment sales of land to local businesses, and is being recognized as the loans financing the sale are collected. C. Capital assets Capital asset activity for the year ended September 30,2006: Primary Government Balance Completed Balance 9/30/05 Additions Retirements Construction 9/30/06 GOVERNMENTAL ACTIVITIES: Capital assets,not being depreciated: Land $21,199,312 $1,782,859 $ — $2,075,681 $25,057,852 Construction in progress 9,371,981 568,407 — (9,322,370) 618,018 Total capital assets not being depreciated 30,571,293 2,351,266 — (7,246,689) 25,675,870 Capital assets,being depreciated: Buildings 4,426,402 — — — 4,426,402 Improvements other than buildings 86,613,656 8,863,904 — 7,246,689 102,724,249 Machinery and equipment 7,455,712 1,776,301 (193,861) -- 9,038,152 Total capital assets being depreciated 98,495,770 10,640,205 (193,861) — 116,188,803 Less accumulated depreciation for: Buildings (1,646,978) (130,350) -- -- (1,777,328) Improvements other than buildings (23,141,709) (3,260,381) — — (26,402,090) Machinery and equipment (4,904,946) (693,238) 139,209 — (5,458,975) Total accumulated depreciation (29,693,633) (4,083,969) 139,209 — (33,638,393) Total capital assets being depreciated,net 68,802,137 6,556,236 (54,652) -- 82,550,410 Governmental activities capital assets,net $99,373,430 $8,907,502 ($54,652) $ — $108,226,280 43 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Balance Completed Balance 9/30/05 Additions Retirements Construction 9/30/06 BUSINESS-TYPE ACTIVITIES: Capital assets,not being depreciated: . Land $59,141 $ - $ - $ -- $59,141 Construction in progress 602,130 1,805,452 - - 2,407,582 Total capital assets not being depreciated 661,271 1,805,452 - - 2,466,723 Capital assets,being depreciated: Buildings 27,888 - - -- 27,888 Water system 18,039,272 3,724,543 -- -- 21,763,815 Sewer system 23,219,018 1,510,775 -- -- 24,729,793 Machinery and equipment 490,644 18,913 -- -- 509,557 Total capital assets being depreciated 41,776,822 5,254,231 -- - 47,031,053 Less accumulated depreciation for: Buildings (21,529) (520) - - (22,049) Water system (4,707,024) (503,441) -- - (5,210,465) Sewer system (5,723,332) (585,968) - - (6,309,300) Machinery and equipment (398,360) (35,162) - - (433,522) Total accumulated depreciation (10,850,245) (1,125,091) -- -- (11,975,336) Capital assets being depreciated,net 30,926,577 4,129,140 -- - 35,055,717 Business type activities capital assets,net $31,587,848 $5,934,592 $ - $ - $37,522,440 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $525,557 Public safety 165,449 Urban development 13,828 Streets 3,050,522 Community service 328.613 Total depreciation expense-governmental activities $4,083,969 Business-type activities: Water and sewer $1,125,091 44 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30, 2006 Construction commitments The City has active construction projects as of September 30,2006. The projects include street construction, park improvements,and drainage improvements. Remaining Project Spent to Date Commitment Design of city hall, library, recreation center $45,767 $464,233 Creekside elevated tank storage 1,776,093 982,907 $1,821,860 $1,447,140 The design of the city hall, library, and recreation center are being financed by bond proceeds. The commitment for the elevated tank storage is being financed by impact fees and current revenues. Discretely presented component unit-Wylie Economic Development Corporation: Balance Completed Balance 9/30/05 Additions Retirements Construction 9/30/06 Capital assets,not being depreciated: Construction in progress 325,307 $ -- (325,307) $ - $ - Capital assets,being depreciated: Buildings - -- - - Improvements other than buildings -- -- -- Machinery and equipment - - - Total capital assets being depreciated - - - Less accumulated depreciation for: -- Improvements other than buildings - -- - Machinery and equipment - - - - Total accumulated depreciation - -- - Total capital assets being depreciated,net - - - $325,307 $ -- ($325,307) $ - $ - 45 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 D. Interfund receivables, payables, and transfers The composition of interfund balances as of September 30,2006, is as follows: Interfund Receivable/Payable Fund Receivable Payable Major Governmental Funds General Fund $13,247 $ -- Total Major Governmental Funds 13,247 -- Nonmajor Governmental Funds General Obligation Debt Service 1,838 -- 4B Sales Tax Revenue -- 13,247 4B Debt Service 2005 1,838 Total Nonmajor Governmental Funds 1,838 15,085 Totals $15,085 $15,085 Interfund receivables and payables arise from overdrafts in pooled cash and pooled investments. Interfund transfers: Fund Transfer In Transfer Out Major Governmental Funds General Fund $427,000 $365,026 Total Major Governmental Funds 427,000 365,026 Nonmajor Governmental Funds Emergency Communication 260,000 -- 4B Sales Tax Revenue -- 606,280 Fire Truck Training center -- 7,000 2005 Public Property Financial CO's -- 567,743 4B Debt Service 2005 606,280 -- Total Nonmajor governmental funds 866,280 1,181,023 Water Utility Fund -- 447,137 Internal Service Funds 699,906 -- Totals $1,993,186 $1,993,186 Interfund transfers provide funds for debt service,contributions for capital construction,cost allocations and other operational costs as determined by the annual budget. 46 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 E. Long-term debt The City of Wylie issues general obligation bonds,certificates of obligation bonds,contractual obligation bonds and notes to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and business-type activities. These issues are direct obligations and pledge the full faith and credit of the City. General Debt Currently Outstanding: Original Year of Final Interest Balance Purpose Amount Issue Maturity Rate 9/30/06 General Long-Term Debt Issues General Obligation Bonds: Improvements $2,700,000 1/1/97 8/15/17 4.90%-8.75% $1,063,889 Improvements 3,200,000 9/14/99 2/15/19 5.00%-6.50% 2,445,000 Improvements 2,000,000 8/22/00 2/15/20 5.00%-6.50% 1,615,000 Improvements 4,500,000 9/1/01 2/15/21 4.25%-5.00% 3,780,000 Improvements 2,500,000 9/15/02 2/15/22 3.625%-4.50% 2,170,000 Improvements 1,250,000 9/15/02 2/15/22 2.25%-3.25% 55,000 Improvements and refunding 7,525,000 1/01/05 2/15/25 3.00%-4.50% 7,160,000 Improvements 35,325,000 3/15/06 2/15/27 4.00%-4.50% 35,325,000 Total General Obligation Bonds 53,613,889 Comb.Tax/Revenue Bonds: Improvements 5,602,500 1/01/05 2/15/25 3.00%-5.00% 5,409,000 Improvements 622,500 1/01/05 2/15/25 3.00%-5.00% 601,000 Total Comb.Tax/Revenue Bonds 6,010,000 Contractual Obligations: Improvements 904,000 2/01/06 2/01/16 4.55% 841,659 Total General Long-Term Debt 60,465,548 47 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Original Year of Final Interest Balance Purpose Amount Issue Maturity Rate 9/30/06 Proprietary Debt Issues General Obligation Bonds: Improvements $1,200,000 1/01/97 8/15/17 4.90%-8.75% $851,111 Improvements and refunding 2,795,000 1/01/05 2/15/25 3.00%-4.50% 2,375,000 Total General Obligation Bonds 3,226,111 Contractual Obligations: Improvements 1,206,000 2/01/06 2/01/16 4.55% 1,157,710 Total Proprietary Debt 4,383,821 Total General Debt $64 849 369 Annual debt service requirements to maturity for general debt: Governmental Activities Business Type Activities Year Principal Interest Principal Interest Total 2007 $1,393,413 $3,349,573 $525,457 $162,438 $5,430,881 2008 1,814,903 2,615,784 544,499 144,099 5,119,285 2009 1,861,668 2,538,323 488,751 126,111 5,014,853 2010 1,418,007 1,067,439 506,004 109,021 3,100,471 2011 2,514,127 2,385,266 370,710 93,205 5,363,308 2012-2016 15,285,652 9,900,172 1,846,178 211,616 27,243,618 2017-2021 17,217,778 6,253,406 102,222 2,747 23,576,153 2022-2026 16,060,000 2,440,058 -- -- 18,500,058 2027 2,900,000 65,250 — — 2,965,250 Total $60,465,548 $30,615,271 $4,383,821 $849,237 $96,313,877 REVENUE BONDS.The City issues revenue bonds where the City pledges income derived from the acquired or constructed assets, or sales tax to pay the debt service. 48 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30, 2006 Revenue bonds outstanding at year end are as follows: Original Year Final Interest Balance Purpose Amount Issue Maturity Rate 9/30/06 Sales Tax Revenue Bonds Improvements $1,710,000 1/1/96 2/15/08 5.35%-5.55% $1,115,000 Improvements Water and Sewer Revenue Bonds Improvements 1,380,000 9/14/99 2/15/19 5.40%-6.50% 1,055,000 Improvements 1,720,000 8/22/00 2/15/20 5.13%-6.13% 1,410,000 Improvements 1,150,000 9/15/02 2/15/22 3.55%-5.00% 995,000 Total Water and Sewer Revenue Bonds 3,460,000 Total Revenue Bonds $4,575,000 Annual debt service requirements to maturity for revenue bonds: Governmental Activities Business Type Activities Year Principal Interest Principal Interest Total 2007 $80,000 $59,662 $160,000 $173,091 $472,753 2008 90,000 54,945 175,000 163,245 483,190 2009 95,000 4,981 185,000 153,097 438,078 2010 100,000 44,400 195,000 143,010 482,410 2011 105,000 3,871 205,000 132,891 446,762 2012-2016 645,000 93,657 1,225,000 496,421 2,460,078 2017-2021 - -- 1,225,000 152,712 1,377,712 2022-2025 -- -- 90,000 2,070 92,070 Total $1,115,000 $261,516 $3,460,000 $1,416,537 $6,253,053 Capitalized Lease Obligations Governmental-The City entered into a lease to acquire six tough book laptop computers. Business-type - The City has entered into a contract with the North Texas Municipal Water District), a conservation and reclamation district and political subdivision of the state of Texas, for construction and operation of sewer plants and to provide treated water to the City. The contractual obligations have been treated as capitalized leases. 49 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Capitalized lease obligations outstanding at year end are as follows: Original Year Final Interest Balance Purpose Amount Issue Maturity Rate 9/30/06 Governmental Computers $48,336 2005 2007 7.51% $16,097 Business-type Wastewater treatment plant 2,000,000 1988 2006 7.50% $185,000 Capital lease obligation debt service requirements to maturity are as follows: Year Governmental Business-type 2007 $17,883 $200,077 Less imputed interest (1,786) (15,077) Total Capital Lease Obligations $16,097 $185,000 CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended September 30,2006,was as follows: Balance Balance Due Within 9/30/05 Additions Retirements 9/30/06 One Year Governmental activities: General obligation bonds $19,325,556 $35,325,000 ($1,036,667) $53,613,889 $1,044,444 Combination tax revenue bonds 6,225,000 -- (215,000) 6,010,000 220,000 Certificates of obligation 65,000 -- (65,000) -- -- Contractual obligation -- 904,000 (62,341) 841,659 63,759 Sales tax revenue bond 1,190,000 -- (75,000) 1,115,000 80,000 Unamortized premium(discount) (74,279) 200,697 (1,208) 125,210 — Deferred loss (gain)on refunding 110,465 -- (17,257) 93,208 -- Total bonds payable 26,841,742 36,429,697 (1,472,473) 61,798,966 1,408,203 Loans payable 100,000 -- (100,000) -- -- Capital lease obligations 33,064 -- (16,097) 16,967 16,967 Compensated absences 430,474 398,511 (328,375) 500,610 326,998 Governmental activity Long-Term Liabilities $27,405,280 $36,828,208 ($1,916,945) $62,316,543 $1,752,168 50 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Balance Balance Due Within 9/30/05 Additions Retirements 9/30/06 One Year Business-type activities: General obligation bonds $3,699,444 $ -- ($473,333) $3,226,111 $425,556 Revenue bonds 3,615,000 -- (155,000) 3,460,000 160,000 Contractual obligations -- 1,206,000 (48,290) 1,157,710 49,389 Unamortized premium(discount) 6,115 -- (314) 5,801 -- Deferred loss(gain)on refunding (42,483) 6,233 (36,250) -- Total bonds payable 7,278,076 1,206,000 (670,704) 7,813,372 634,945 Capital lease obligations 355,000 -- (170,000) 185,000 185,000 Compensated absences 108,863 100,780 (102,255) 107,388 70,146 Business-type activities Long-Term Liabilities $7,741,939 $1,306,780 ($942,959) $8,105,760 $890,091 For the governmental activities,claims and judgements and compensated absences are generally liquidated by the general fund.The government-wide statement of activities includes$185,000 of capital leases due within one year for business-type activities in"liabilities payable from restricted assets" on that same statement. Discretely presented component unit-Wylie Economic Development Corporation: Loans Payable $878,372,payable to bank,made August 26,2005,payable in monthly installments of$7,320 through October 26,2015, including interest at 5.75% $797,855 $289,956, payable to bank, made March 1, 2004, payable in monthly installments of$5,741 through March 1,2009, including interest at 7.00%,with a final balloon payment 152,772 $340,000,payable to individual, made July 25,2006,payable in monthly installments of$3,775 through July 25,2016, including interest at 6.00% 335,840 Total loans payable $1,286,467 51 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Annual debt service requirements to maturity for discrete component unit debt is: Loan Payable to Bank Year Principal Interest Total 2007 $173,794 $71,796 $245,590 2008 179,733 60,807 240,540 2009 145,185 50,114 195,299 2010 118,770 42,770 161,540 2011 120,678 35,811 156,489 2012-2016 548,306 39,734 588,040 Total $1,286,466 $301,032 $1,587,498 CHANGES IN LONG-TERM LIABILITIES Long-term liability activity for the year ended September 30, 2006,was as follows: Balance Balance Due Within 9/30/05 Additions Retirements 9/30/06 One Year Discrete Component Unit: $ Loans payable $1,087,200 $340,000 ($140,733) $1,286,467 $173,794 Compensated absences 17,122 15,851 (12,149) 20,824 15,038 Long-Term Liabilities $1,104,322 $355,851 ($152,882) $1,307,291 $188,832 V. OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts,theft of,damage to,and destruction of assets;errors and omissions;injuries to employees;employee health benefits;and other claims of various natures. The City purchases commercial insurance to indemnify it in event of loss. For the past three years,settlements did not exceed coverage. B. North Texas Municipal Water District The District is a conservation and reclamation district and political subdivision of the State of Texas, created and functioning under Chapter 62,Acts of 1951,52nd Legislature, Regular Session, as amended, originally compiled as Vernon's Article 8270-141 (the"Act"),pursuant to Article 16,Section 59 of the Texas Constitution. The District comprises all of the territory of its member cities,viz.,Allen,Garland,Princeton, Plano, Mesquite, Wylie,Rockwall,Farmersville,McKinney,Richardson,Forney and Royse City(the"Member Cities").The District was created for the purpose of providing a source of water supply for municipal,domestic and industrial use and for the treatment processing and transportation of such water to its Member Cites and to its other customers located in North Central Texas,all within the Dallas Standard Metropolitan Statistical Area. Under the Act, including specifically Section 27 thereof,and under the Constitution and Statutes of the State of Texas,the District has broad powers to(1)impound,control,store,preserve,treat,transmit and use storm and flood water,the water of rivers and streams and underground water,for irrigation, power and all other useful purposes and to supply water for municipal, domestic, power, industrial and commercial uses and 52 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 purposes and all other beneficial uses and purposes;and(2)collect,transport,process,treat,dispose of,and control all municipal, domestic, industrial or commercial waste whether in fluid, solid or composite state, including specifically the control,abatement or reduction of all types of pollution.The City retains no ongoing financial interest equity investments and/or responsibilities for the District other than the contractual arrangements discussed more fully herein. The District has long-term contracts with the City to supply treated water and sewer treatment.The City's water contract with the District provides that the City pay a predetermined annual amount for treated water in twelve monthly installments. The amount of this annual payment is based upon an annually established rate per thousand gallons and the largest annual amount of water consumption of past years. The City owns one sewage treatment facility. In 1988 the City entered into an agreement with the District for improvements to the treatment facility. Under the terms of this agreement,the District issued contractually secured bonds in the amount of$2,000,000,bearing interest at rates of approximately 7.75%,with the final payment due in 2007,to construct and operate this sewage disposal plant for the City. Under terms of the contract which began when the facilities were first utilized,the City's payments are equal to the operating and maintenance expenses for the next ensuing fiscal year, as shown in the District's annual budget for the sewage treatment facility. The contract further provides the debt service payments will be equal to the principal and/or interest coming due on the bonds on the next succeeding interest payment date,plus the fees and charges of the paying agent and the registrar, and for the accumulation of funds for a debt service reserve. These contractual obligations have been included as capital lease obligations in amounts equal to the bonds outstanding under these agreements. Accordingly,the related sewage treatment facilities have been capitalized and are being depreciated over the estimated life of the facilities. Muddy Creek Regional Wastewater System In May 1999,the Cities of Wylie and Murphy in Collin County entered into a contract with the District to provide for the acquisition, construction, improvement, operation, and maintenance of the Regional Muddy Creek Wastewater System(System)for the purpose of providing facilities to adequately receive,transport,treat,and dispose of wastewater. The District will own the System with Wylie and Murphy as the initial participants. The District will issue approximately$20 million in bonds to construct this new facility. Budget calculations for operating cots and debt service for the System on the service commencement date is based on the following estimated flow ratio:City of Wylie-2/3 and Murphy-1/3. "Service Commencement Date"means the first date upon which the System is available to treat wastewater from the participants. Wylie's long-term commitment to the System's debt service component is approximately$13.3 million. The District will send each participant a letter detailing the annual requirement necessary to operate the System each year. The annual requirement budget will include an operation and maintenance component and a bond service component. The budgeting ratio described earlier is only valid for the first year of System operations. In subsequent years,budgets and year-end audits will be based on actual flow ratios. For example,if the flow measurements indicate that 60%of the flow is produced by Wylie and 40%by Murphy,then the next year's operating and debt service components would be allocated using a 60/40 split. If in the future, additional participants are added,then the flow ratios will be adjusted using the above method. The contract with the District has a clause for"Credit for Payments Relating to the System. This clause states: "Each participant shall be entitled to a credit in an amount equal to any funds advanced by such Participant with the approval of the District for land,engineering,construction or other costs related to the System and/or the financing thereof". All credits for advances made prior to the Service Commencement Date shall bear interest from the date of such advance at a rate equal to the net effective interest rate on the initial issue of the bonds hereunder. The City of Wylie has four such credits at this time. All credits for advances made prior to the Service Commencement Date shall be amortized over a period of twenty years,with such amortization to commence on October 1 of the Fiscal Year following the Service Commencement Date. At September 30, 2005,the City had recorded$3,188,849 as a restricted accounts receivable. This amount is being amortized over a twenty year period commencing with fiscal year 2006. The amortization was$103,644 for 2006. 53 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 D. Contingent Liabilities and Commitments Amounts received or receivable from grantor agencies are subject to audit and adjustment by such agencies. Any disallowed claims,including amounts already collected may constitute a liability of the applicable funds. The amounts,if any,of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any,to be immaterial. The City periodically is defendant in various lawsuits. At September 30,2006,after consultation with the City's attorney,the City is not aware of any pending litigation. As described in Note IV E above,the general revenues of the City are contingently liable for the$3,226,111 payable in General Obligation Bonds which are currently outstanding and recorded as obligations of the Enterprise Fund. The City contracts for garbage disposal with a third party. Under the terms of the agreement the city bills and collects the residential billing and remits that amount to the contracting party. The contractor bills the commercial customers and remits a franchise fee to the City based on total revenues received from the contract. The Wylie Economic Development Corporation provides monetary incentives to companies to relocate within the City of Wylie. At September 30,2006,these commitments totaled$150,000. E. Employee retirement systems and pension plans The City participates in the Texas Municipal Retirement System. Plan Description-The City provides pension benefits for all of its full-time employees through a nontraditional, joint contributory,hybrid defined benefit plan in the state-wide Texas Municipal Retirement System(TMRS),one of over 811 administered by TMRS,an agent multiple-employer public employee retirement system. Each of the 811 municipalities has an annual, individual actuarial valuation performed. All assumptions for the December 31,2005 valuations are contained in the 2005 TMRS Comprehensive Annual Financial Report which can be obtained by writing to P.O. Box 149153,Austin,Texas, 78714-9153. Benefits depend upon the sum of the employee's contributions to the plan,with interest,and the City-financed monetary credits, with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount equal to two times what would have been contributed by the employee,with interest,prior to establishment of the plan. Monetary credits for service since the plan began are a percent(100%)of the employee's accumulated contributions. In addition,the City can grant as often as annually another type of monetary credit referred to as an updated service credit which is a theoretical amount which,when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and City matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement,the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer-financed monetary credits with interest were used to purchase an annuity. 54 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 The plan provisions are adopted by the governing body of the City,within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Plan provisions for the City were as follows: Deposit rate:7% Matching Ratio (City to Employee):2-1 Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service regardless of age. A member is vested after 5 years. Contributions-Under the state law governing TMRS,the actuary annually determines the City contribution rate. The rate consists of the normal cost contribution rate and the prior service contribution rate,both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to the City matching percent,which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the actuarially determined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his/her retirement becomes effective. The prior service contribution rate amortizes the unfunded(overfunded)actuarial liability(asset)over the remainder of the plan's 25-year amortization period. The unit credit actuarial cost method is used for determining the City contribution rate. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes,there is a one-year delay between the actuarial valuation that is the basis for the rate and the calendar year when the rate goes into effect, i.e. December 31, 2005 valuation is effective for rates beginning January2007. Schedule of Actuarial Liabilities and Funding Progress Actuarial Valuation Date 12/31/05 12/31/04 12/31/03 Actuarial Value of Assets $9,134,898 $7,984,378 $6,827,365 Actuarial Accrued Liabilities 11,288,216 9,649,974 9,400,060 Percentage Funded 80.9% 82.7% 72.6% Unfunded (Over-funded)Actuarial Accrued Liability(UAAL) 2,153,318 1,665,596 2,572,695 Annual Covered Payroll 8,137,334 7,138,199 6,006,165 UAAL as a Percentage of Covered Payroll 26.5% 23.3% 42.8% Net Pension Obligation (NPO) at the Beginning of Period — -- -- Annual Pension Cost: Annual Required Contribution (ARC) 800,429 819,210 603,752 Interest on NPO -- Adjustment to the ARC -- - 800,429 819,210 603,752 Contributions Made (100%) 800,429 819,210 603,752 Increase in NPO -- NPO at the End of Period $ -- $ -- $ 55 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 Actuarial Assumptions Actuarial Cost Method Unit Credit Amortization Method Level Percent of Payroll Remaining Amortization 25 Years-Open Period Asset Valuation Method Amortized Cost Investment Rate of Return 7% Projected Salary Increases None Includes Inflation At None Cost of Living Adjustments None G. Related Party Transactions The chairman of the board of directors of the Wylie Economic Development Corporation (WEDC) is the president of a local bank. During the year ended September 30,2005,WEDC entered into a loan agreement with this bank for$878,372,payable over a ten year term,with interest rates of 5.75%for the first five years and 6.20%for the next five years. At September 30,2006,the unpaid balance of this loan was$797,855. H. Condensed Financial Information for Discrete Component Unit Following is selected condensed financial statement information for the fund basis financial statements of the Wylie Economic Development Corporation: Balance Sheet WEDC Assets Current assets $2,742,280 Total Assets $2,742,280 Liabilities Current liabilities $9,978 Deferred revenue 147,648 Total Liabilities 157,626 Fund Balance 2,584,654 Total Liabilities and Fund Balance $2,742,280 56 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30, 2006 Revenues and Expenditures WEDC Revenues $1.148.470 Current Expenditures 1,146,594 Debt service 205,430 Total expenditures 1,352,024 Deficiency of revenues under expenditures (203,554) Other financing sources 340,000 Net change in fund balances 136,446 Fund balance October 1 2,448,208 $2,584,654 Following are reconciliations between the government-wide financial statements and the fund basis financial statements for WEDC: Reconciliation of Balance Sheet WEDC Total fund balance $2,584,654 Capital assets not reported in the funds -- Accrued interest payable (5,197) Payable for loan principal not due currently (1,286,467) Payables for compensated absences (23,021) Net Assets-statement of net assets $1,269,969 Reconciliation of Statement of Revenues, Expenditures and Fund Balances WEDC Net change in fund balances $136,446 Proceeds of loan (340,000) Repayment of loan principal 143,160 Contribution to municipality (355,428) Other (2,427) Interest expense 4,004 Change in compensated absences (2,197) Change in net assets ($416,442) I. Land Acquisition The discrete component unit owns property with a carrying value of$1,929,522. This property is held as an incentive to attract businesses. 57 CITY OF WYLIE, TEXAS NOTES TO THE FINANCIAL STATEMENTS Year Ended September 30,2006 J. Restatement Prior year financial statements have been restated to reflect corrections to the accounts for the following: 1. Debt reserves held by agent were overstated. 2. Capital lease payable was understated 3. Amounts for costs associated with issuance of debt were misstated. 4. Certain capital assets were over stated. The effect on the financial statements for the year ended September 30,2005 follows: Utility Enterprise Fund: Assets Liabilities Net Assets As reported 9/30/05 $52,745,158 $8,861,063 $43,884,095 Restricted cash overstated (663,942) (663,942) Lease payable understated -- 168,110 (168,110) Bond issue cost understated 33,424 33,424 Bond premium understated -- 6,115 (6,115) Deferred loss understated -- (42,484) 42,484 As restated 9/30/05 52,114,640 8,992,804 43,121,836 Government Wide Governmental Type: Assets Liabilities Net Assets As reported-9/30/05 $116,388,676 $29,763,145 $86,625,531 Record streets not capitalized 73,512 -- 73,512 Bond premium understated -- (74,279) 74,279 Deferred loss understated -- 110,465 (110,465) As restated -9/30/05 $116,462,188 $29,799,331 $86,662,857 Discrete Component Unit: Assets Liabilities Net Assets As reported-9/30/05 $3,134,784 $1,519,653 $1,615,131 Defer expense on purchase of land 202,045 -- 202,045 Correct cost of construction in progress 30,120 -- 30,120 Remove commitment-deferred charge (150,000) (150,000) -- Remove street transferred to city (160,885) -- (160,885) $3,056,064 $1,369,653 $1,686,411 58 • Required Supplementary Information Required supplementary information includes financial information and disclosures required by the Governmental Accounting Standards Board but not considered a part of the basic financial statements. 59 CITY OF WYLIE, TEXAS EXHIBIT B-1 GENERAL FUND Page 1 of 2 BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Ad valorem taxes $ 8,951,520 $ 8,951,520 $ 9,067,559 $ 116,039 Non-property taxes 1,849,140 1,849,140 2,210,030 360,890 Franchise fees 1,479,850 1,479,850 1,893,383 413,533 Licenses and permits 1,114,000 1,114,000 1,319,956 205,956 Intergovernmental 305,250 477,720 443,124 (34,596) Services fees 1,553,200 1,567,200 1,776,219 209,019 Court fees 371,000 371,000 617,288 246,288 , Interest income 100,000 100,000 325,587 225,587 Miscellaneous income 85,500 89,540 174,717 85,177 Total revenues 15,809,460 15,999,970 17,827,863 1,827,893 Expenditures: Current: General government City Council 96,150 105,930 84,132 21,798 City Manager 321,880 423,410 374,758 48,652 City Secretary 184,210 202,380 194,054 8,326 City Attorney 117,000 117,000 129,628 (12,628) Municipal Court 237,520 236,890 218,553 18,337 Finance 528,450 527,500 514,724 12,776 Building and Fleet Maintenance 124,000 158,250 157,615 635 Support Services 144,660 144,750 143,178 1,572 Human Resources 158,410 157,770 149,027 8,743 Purchasing 96,870 96,960 95,288 1,672 Information Technology 111,590 117,980 116,897 1,083 Combined Services/General 1,750,220 1,836,420 1,851,622 (15,202) Total General Government 3,870,960 4,125,240 4,029,476 95,764 Public Safety Police 3,698,150 3,726,180 3,494,137 232,043 Fire 3,291,070 3,708,230 3,536,251 171,979 Animal Control 643,280 648,770 685,449 (36,679) Total Public Safety 7,632,500 8,083,180 7,715,837 367,343 Urban development Planning 254,740 258,010 183,683 74,327 Building Inspection 690,920 689,090 600,311 88,779 Code Enforcement 92,060 144,230 75,703 68,527 Total Urban development 1,037,720 1,091,330 859,697 231,633 Streets Streets 1,501,740 1,576,148 1,548,675 27,473 Total Streets 1,501,740 1,576,148 1,548,675 27,473 Community service Parks 1,147,420 1,205,230 1,131,321 73,909 Recreation 265,870 266,550 277,681 (11,131) Library 576,460 595,760 563,018 32,742 Total Community Service - 1,989,750 2,067,540 1,972,020 95,520 60 CITY OF WYLIE, TEXAS EXHIBIT B-1 GENERAL FUND Page 2 of 2 BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Debt service: Principal $ 180,000 $ 180,000 $ 122,303 $ 57,697 Interest and fiscal charges 4,450 4,450 17,122 (12,672) Total Debt Service 184,450 184,450 139,425 45,025 Total expenditures 16,217,120 _ 17,127,888 16,265,130 862,758 Excess(deficiency)of revenues over (under)expenditures (407,660) (1,127,918) 1,562,733 2,690,651 Other financing sources(uses): Transfers in 440,450 440,450 427,000 (13,450) Transfers out (260,000) _ (260,000) (365,026) (105,026) Total other financing sources(uses) 180,450 180,450 61,974 (118,476) Net change in fund balances (227,210) (947,468) 1,624,707 2,572,175 Fund balances, October 1 4,493,063 4,493,063 4,493,063 — Fund balances, September 30 $ 4,265,853 $ 3,545,595 $ 6,117,770 $ 2,572,175 61 CITY OF WYLIE, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION Year Ended September 30,2006 STEWARDSHIP,COMPLIANCE,AND ACCOUNTABILITY A. Budgetary information The City follows the following procedures in establishing the budgetary data reflected in the financial statements: 1. Public hearings are conducted to obtain taxpayer comments. 2. Prior to October 1,the budget is legally enacted through passage of an ordinance. 3. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however,any revisions that alter the total expenditures of any fund must be approved by the City Council. Therefore the fund level is the legal level of control. 4. Budgeted amounts are as originally adopted or as amended by the City Council.During 2006,individual amendments were not material in relation to the original appropriations. Any budgeted amounts appropriated at fiscal year-end and not spent automatically lapse. 5. Capital Project funds were not budgeted.Since project length financial plans usually extend into two or more fiscal years,this makes comparisons confusing and misleading. 6. Formal budgetary integration is employed as a management control device during the year.The legally adopted budgets for the General Fund,Special Revenue Funds, and the Debt Service Funds are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the following funds: General Fund Special Revenue Funds 4B Sales Tax Revenue Fund Park Acquisition and Improvement Fund Emergency Communications Fund Fire Training Center Debt Service Funds General Obligation Debt Service 4B Debt Service 1996 4B Debt Service 2005 All annual appropriations lapse at fiscal year end. 62 Combining Statements and Budget Comparisons as Supplementary Information This supplementary information includes financial statements and schedules not required by the Governmental Accounting Standards Board,nor a part of the basic financial statements, but are presented for purposes of additional analysis. 63 EXHIBIT C-1 CITY OF WYLIE, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2006 Total Nonmajor Special Debt Capital Governmental Revenue Service Projects Funds (See Funds Funds Funds Exhibit A-3) ASSETS Cash and cash equivalents $ 106,165 $ 83,567 $ 300,621 $ 490,353 Investments 1,387,419 1,096,283 3,838,091 6,321,793 Receivables(net of allowances for uncollectibles): Taxes - 65,994 - 65,994 Other 39,101 -- -- 39,101 Intergovernmental 201,244 -- -- 201,244 Due from other funds -- 1,838 -- 1,838 Prepaid items 8,388 -- - 8,388 Total Assets $ 1,742,317 $ 1,247,682 $ 4,138,712 $ 7,128,711 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 42,565 $ -- $ 24,397 $ 66,962 Other payables and accruals 58,462 -- - 58,462 Retainage payable -- -- 188,551 188,551 Due to other funds 13,247 1,838 - 15,085 Liabilities payable from restricted assets: Deferred revenue -- 61,090 -- 61,090 Total Liabilities 114,274 62,928 212,948 390,150 Fund balances: Reserved for: Prepaids 8,388 -- -- 8,388 Debt service - 1,184,754 -- 1,184,754 Unreserved, reported in: Special revenue funds 1,619,655 -- -- 1,619,655 Capital projects funds - - 3,925,764 3,925,764 Total fund balances 1,628,043 1,184,754 3,925,764 6,738,561 Total Liabilities and Fund Balances $ 1,742,317 $ 1,247,682 $ 4,138,712 $ 7,128,711 64 EXHIBIT C-2 CITY OF WYLIE, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Total Nonmajor Special Debt Capital Governmental Revenue Service Projects Funds(See Funds Funds Funds Exhibit A-5) Revenues: Ad valorem taxes $ - $ 2,140,194 $ - $ 2,140,194 Sales taxes 1,098,725 - - 1,098,725 Services fees 545,811 -- - 545,811 Interest income 62,955 63,532 199,352 325,839 Miscellaneous income 321,525 - 363,027 684,552 Total revenues 2,029,016 2,203,726 562,379 4,795,121 Expenditures: Current: Public Safety 842,318 - 333,932 1,176,250 Community service 808,595 -- 8,897 817,492 Capital outlay - -- 2,190,857 2,190,857 Debt service: Principal 40,038 1,391,666 -- 1,431,704 Interest and fiscal charges 8,454 1,083,381 - 1,091,835 Bond issuance costs - -- 4,586 4,586 Total expenditures 1,699,405 2,475,047 2,538,272 6,712,724 Excess(deficiency)of revenues over (under)expenditures 329,611 (271,321) (1,975,893) (1,917,603) Other financing sources(uses): Transfers in 260,000 606,280 - 866,280 Transfers out (613,280) - (567,743) (1,181,023) Issuance of long-term debt -- 50,566 904,000 954,566 Total other financing sources(uses) (353,280) 656,846 336,257 639,823 Net change in fund balances (23,669) 385,525 (1,639,636) (1,277,780) Fund balances, October 1 _ 1,651,712 799,229 5,565,400 _ 8,016,341 Fund balances, September 30 $ 1,628,043 $ 1,184,754 $ 3,925,764 $ 6,738,561 65 CITY OF WYLIE, TEXAS COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS SEPTEMBER 30, 2006 4B Sales Park Acquisition Tax Revenue & Improvement ASSETS Cash and cash equivalents $ 34,641 $ 36,453 Investments 451,617 481,795 Receivables(net of allowances for uncollectibles): Other -- — Intergovernmental 201,244 — Prepaid items 3,191 -- Total Assets $ 690,693 $ 518,248 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 8,405 $ 11,500 Other payables and accruals 7,771 44,000 Due to other funds 13,247 Total Liabilities 29,423 55,500 Fund balances: Reserved for: Prepaids 3,191 — Unreserved 658,079 462,748 Total fund balances 661,270 462,748 Total Liabilities and Fund Balances $ 690,693 $ 518,248 66 EXHIBIT C-3 Total Nonmajor Special Fire Revenue Emergency Training Funds (See Communication Center Exhibit C-1) $ 29,093 $ 5,978 $ 106,165 374,997 79,010 1,387,419 19,133 19,968 39,101 -- — 201,244 5,197 -- 8,388 $ 428,420 $ 104,956 $ 1,742,317 $ 22,255 $ 405 $ 42,565 6,691 — 58,462 -- — 13,247 28,946 405 114,274 5,197 -- 8,388 394,277 104,551 1,619,655 399,474 104,551 1,628,043 $ 428,420 $ 104,956 $ 1,742,317 67 CITY OF WYLIE, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 4B Sales Park Acquisition Tax Revenue &Improvement Revenues: Sales taxes $ 1,098,725 $ — Services fees — -- Interest income 24,684 16,128 Miscellaneous income 7,900 313,400 Total revenues 1,131,309 329,528 Expenditures: Current: Public Safety — — Community service 598,807 209,788 Debt service: Principal -- — Interest and fiscal charges — Total expenditures 598,807 209,788 Excess(deficiency) of revenues over (under)expenditures 532,502 119,740 Other financing sources(uses): Transfers in — -- Transfers out (606,280) _ — Total other financing sources(uses) (606,280) — Net change in fund balances (73,778) 119,740 Fund balances, October 1 735,048 343,008 Fund balances, September 30 $ 661,270 $ 462,748 68 EXHIBIT C-4 Total Nonmajor Special Fire Revenue Emergency Training Funds(See Communication Center Exhibit C-2) $ — $ — $ 1,098,725 484,793 61,018 545,811 17,524 4,619 62,955 80 145 321,525 502,397 65,782 2,029,016 772,776 69,542 842,318 — — 808,595 40,038 — 40,038 8,454 — 8,454 821,268 69,542 1,699,405 (318,871) (3,760) 329,611 260,000 — 260,000 — (7,000) (613,280) 260,000 (7,000) (353,280) (58,871) (10,760) (23,669) 458,345 115,311 1,651,712 $ 399,474 $ 104,551 $ 1,628,043 69 CITY OF WYLIE, TEXAS EXHIBIT C-5 48 SALES TAX REVENUE FUND SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Non-property taxes $ 919,320 $ 919,320 $ 1,098,725 $ 179,405 Interest income 10,000 10,000 24,684 14,684 Miscellaneous income - - 7,900 7,900 Total revenues 929,320 929,320 1,131,309 201,989 Expenditures: Current: Community service 48 Parks 520,490 587,490 497,973 89,517 48 Recreation 109,320 109,650 100,834 8,816 Total Community Service 629,810 697,140 598,807 98,333 Total expenditures 629,810 697,140 598,807 98,333 Excess(deficiency)of revenues over (under)expenditures 299,510 232,180 532,502 300,322 Other financing sources(uses): Transfers out (606,280) (606,280) (606,280) -- Total other financing sources(uses) (606,280) (606,280) (606,280) - Net change in fund balances (306,770) (374,100) (73,778) 300,322 Fund balances, October 1 - - 735,048 735,048 Fund balances, September 30 $ (306,770) $ (374,100) $ 661,270 $ 1,035,370 70 CITY OF WYLIE, TEXAS EXHIBIT C-6 PARK ACQUISITION AND IMPROVEMENT SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 70,100 $ 70,100 $ -- $ (70,100) Interest income 5,000 5,000 16,128 11,128 Miscellaneous income 263,000 263,000 313,400 50,400 Total revenues 338,100 338,100 329,528 (8,572) Expenditures: Current: Community service Park Acquisition-West Zone - 24,277 13,074 11,203 Park Acquisition-Central Zone 79,000 279,000 _ 196,714 82,286 Total Community Service 79,000 303,277 209,788 93,489 Total expenditures 79,000 303,277 209,788 93,489 Net change in fund balances 259,100 34,823 119,740 84,917 Fund balances,October 1 343,008 343,008 343,008 -- Fund balances, September 30 $ 602,108 $ 377,831 $ 462,748 $ 84,917 71 CITY OF WYLIE, TEXAS EXHIBIT C-7 EMERGENCY COMMUNICATION FUND SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Services fees $ 423,000 $ 555,500 $ 484,793 $ (70,707) Interest income 4,000 4,000 17,524 13,524 Miscellaneous income - _ - 80 80 Total revenues 427,000 559,500 502,397 (57,103) Expenditures: Current: Public Safety Dispatch Services 812,480 1,004,270 772,776 231,494 Total Public Safety 812,480 1,004,270 772,776 231,494 Debt service: Principal 91,546 91,546 40,038 51,508 Interest and fiscal charges 8,454 8,454 8,454 - Total Debt Service 8,454 8,454 8,454 - Total expenditures 912,480 1,104,270 821,268 283,002 Excess(deficiency)of revenues over (under)expenditures (485,480) (544,770) (318,871) 225,899 Other financing sources(uses): Transfers in 260,000 260,000 260,000 -- Total other financing sources(uses) 260,000 260,000 260,000 - Net change in fund balances (225,480) (284,770) (58,871) 225,899 Fund balances, October 1 458,345 458,345 458,345 - Fund balances, September 30 $ 232,865 $ 173,575 $ 399,474 $ 225,899 72 CITY OF WYLIE, TEXAS EXHIBIT C-8 FIRE TRAINING CENTER SPECIAL REVENUE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Services fees $ 50,000 $ 50,000 $ 61,018 $ 11,018 Interest income 500 500 4,619 4,119 Miscellaneous income - -- 145 145 Total revenues 50,500 50,500 65,782 15,282 Expenditures: Current: Public Safe ty 157,600 157,600 69,542 88,058 Fire Traineing Center Total Public Safety 157,600 157,600 69,542 88,058 Total expenditures 157,600 157,600 69,542 88,058 Excess(deficiency)of revenues over (under)expenditures (107,100) (107,100) (3,760) 103,340 Other financing sources(uses): Transfers out (7,000) (7,000) (7,000) - Total other financing sources(uses) (7,000) (7,000) (7,000) - Net change in fund balances (114,100) (114,100) (10,760) 103,340 Fund balances, October 1 115,311 115,311 115,311 _ - Fund balances, September 30 $ 1,211 $ 1,211 $ 104,551 $ 103,340 73 EXHIBIT C-9 CITY OF WYLIE, TEXAS COMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS SEPTEMBER 30, 2006 Total Nonmajor Debt General Service Obligation 4B Debt 46 Debt Funds(See Debt Service Service 1996 Service 2005 Exhibit C-1) ASSETS Cash and cash equivalents $ 70,977 $ 2,962 $ 9,628 $ 83,567 Investments 938,111 30,915 127,257 1,096,283 Receivables(net of allowances for uncollectibles): Taxes 65,994 — -- 65,994 Due from other funds 1,838 -- -- 1,838 Total Assets $ 1,076,920 $ 33,877 $ 136,885 $ 1,247,682 LIABILITIES AND FUND BALANCES Liabilities: Due to other funds $ — $ -- $ 1,838 $ 1,838 Deferred revenue 61,090 — — 61,090 Total Liabilities 61,090 — 1,838 62,928 Fund balances: Reserved for: Debt service 1,015,830 33,877 135,047 1,184,754 Total fund balances 1,015,830 33,877 135,047 1,184,754 Total Liabilities and Fund Balances $ 1,076,920 $ 33,877 $ 136,885 $ 1,247,682 74 EXHIBIT C-10 CITY OF WYLIE, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR DEBT SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Total Nonmajor Debt General Service Obligation 4B Debt 4B Debt Funds(See Debt Service Service 1996 Service 2005 Exhibit C-2) Revenues: Ad valorem taxes $ 2,140,194 $ — $ -- $ 2,140,194 Interest income 55,293 6,163 2,076 63,532 Total revenues 2,195,487 6,163 2,076 2,203,726 Expenditures: Current: Debt service: Principal 1,101,666 75,000 215,000 1,391,666 Interest and fiscal charges 767,091 64,679 251,611 1,083,381 Total expenditures _ 1,868,757 _ 139,679 466,611 2,475,047 Excess(deficiency)of revenues over (under)expenditures 326,730 (133,516) (464,535) (271,321) Other financing sources(uses): Transfers in — — 606,280 606,280 Issuance of long-term debt 50,566 -- _ — _ 50,566 Total other financing sources(uses) 50,566 -- 606,280 656,846 Net change in fund balances 377,296 (133,516) 141,745 385,525 Fund balances, October 1 638,534 167,393 (6,698) 799,229 Fund balances, September 30 $ 1,015,830 $ 33,877 $ 135,047 $ 1,184,754 75 CITY OF WYLIE, TEXAS EXHIBIT C-11 GENERAL OBLIGATION DEBT SERVICE DEBT SERVICE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Ad valorem taxes $ 2,119,460 $ 2,119,460 $ 2,140,194 $ 20,734 Interest income 15,000 _ 15,000 55,293 40,293 Total revenues 2,134,460 2,134,460 2,195,487 61,027 Expenditures: Debt service: Principal 1,036,670 1,036,670 1,101,666 (64,996) Interest and fiscal charges 1,161,980 1,161,980 767,091 394,889 Total Debt Service 1,161,980 1,161,980 767,091 394,889 Total expenditures 2,198,650 2,198,650 1,868,757 329,893 Excess(deficiency)of revenues over (under)expenditures (64,190) (64,190) 326,730 390,920 Other financing sources(uses): Issuance of long-term debt — -- 50,566 50,566 Total other financing sources(uses) -- -- 50,566 50,566 Net change in fund balances (64,190) (64,190) 377,296 441,486 Fund balances, October 1 638,534 638,534 638,534 — Fund balances, September 30 $ 574,344 $ 574,344 $ 1,015,830 $ 441,486 76 CITY OF WYLIE, TEXAS EXHIBIT C-12 48 DEBT SERVICE 1996 DEBT SERVICE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: interest income $ 1,000 $ 1,000 $ 6,163 $ 5,163 Total revenues 1,000 1,000 6,163 5,163 Expenditures: Debt service: Principal 75,000 75,000 75,000 -- Interest and fiscal charges 63,960 63,960 64,679 (719) Total Debt Service 63,960 63,960 64,679 (719) Total expenditures 138,960 138,960 139,679 (719) Net change in fund balances (137,960) (137,960) (133,516) 4,444 Fund balances,October 1 167,393 167,393 167,393 — Fund balances, September 30 $ 29,433 $ 29,433 $ 33,877 $ 4,444 77 CITY OF WYLIE, TEXAS EXHIBIT C-13 4B DEBT SERVICE 2005 DEBT SERVICE FUND BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED SEPTEMBER 30, 2006 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Interest income $ 2,000 $ 2,000 $ 2,076 $ 76 Total revenues 2,000 2,000 2,076 76 Expenditures: . Debt service: Principal 215,000 215,000 215,000 — Interest and fiscal charges 252,320 252,320 251,611 709 Total Debt Service 252,320 252,320 251,611 709 Total expenditures 467,320 467,320 466,611 709 Excess(deficiency)of revenues over (under)expenditures (465,320) (465,320) (464,535) 785 Other financing sources(uses): Transfers in 606,280 606,280 606,280 -- Total other financing sources(uses) 606,280 606,280 606,280 — Net change in fund balances 140,960 140,960 141,745 785 Fund balances,October 1 (6,698) (6,698) (6,698) -- Fund balances, September 30 $ 134,262 $ 134,262 $ 135,047 $ 785 78 EXHIBIT C-14 CITY OF WYLIE, TEXAS COMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECTS FUNDS SEPTEMBER 30, 2006 Total Nonmajor Capital Projects Street Street Parks Funds(See Construction _ Perimeter Construction Exhibit C-1) ASSETS Cash and cash equivalents $ 255,694 $ 31,443 $ 13,484 $ 300,621 Investments 3,379,513 415,578 43,000 3,838,091 Total Assets $ 3,635,207 $ 447,021 $ 56,484 $ 4,138,712 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 24,397 $ — $ — $ 24,397 Retainage payable 188,551 — -- 188,551 Total Liabilities 212,948 — — 212,948 Fund balances: Unreserved _ 3,422,259 _ 447,021 56,484 3,925,764 Total fund balances 3,422,259 447,021 56,484 3,925,764 Total Liabilities and Fund Balances $ 3,635,207 $ 447,021 $ 56,484 $ 4,138,712 79 CITY OF WYLIE, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2006 Street Street Construction Perimeter Revenues: Interest income $ 174,708 $ 20,054 Miscellaneous income 363,027 — Total revenues 537,735 20,054 Expenditures: Current: Public Safety — _- Community service — — Capital outlay 2,190,857 — Debt service: Bond issuance costs — -- Total expenditures 2,190,857 — Excess(deficiency)of revenues over (under)expenditures (1,653,122) 20,054 Other financing sources(uses): Transfers out — — Issuance of long-term debt — -- Total other financing sources(uses) — — -- Net change in fund balances (1,653,122) 20,054 Fund balances, October 1 5,075,381 426,967 Fund balances, September 30 $ 3,422,259 $ 447,021 80 EXHIBIT C-15 Total Nonmajor Capital 2005 Public Projects Parks Property Financial Funds(See Construction Contractual Obligations Exhibit C-2) $ 2,329 $ 2,261 $ 199,352 — — 363,027 2,329 2,261 562,379 -- 333,932 333,932 8,897 — 8,897 — — 2,190,857 -- 4,586 4,586 8,897 338,518 2,538,272 (6,568) (336,257) (1,975,893) -- (567,743) (567,743) -- 904,000 904,000 — 336,257 336,257 (6,568) — (1,639,636) 63,052 — 5,565,400 $ 56,484 $ — $ 3,925,764 81 This page is left blank intentionally. R7 STATISTICAL SECTION This part of the City of Wylie, Texas'comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends 84 These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 90 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. Debt Capacity 97 These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information 102 These schedules offer demographic and economic indicators to help the reader understand how the City's financial activities take place and to help make comparisons over time and with other governments. Operating Information 104 These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 83 TABLE D-1 CITY OF WYLIE, TEXAS NET ASSETS BY COMPONENT LAST FOUR FISCAL YEARS (UNAUDITED) Fiscal Year 2003 2004 2005 2006 Governmental Activities Invested in Capital Assets, Net of Related Debt $ 55,109,795 62,317,301 $ 72,335,440 $ 81,735,348 Restricted 7,714,394 4,103,955 6,412,687 41,205,977 Unrestricted (962,448) 7,178,450 7,914,730 (26,142,238) Total Governmental Activities Net Assets $ 61,861,741 73,599,706 $ 86,662,857 $ 96,799,087 Business-type Activities Invested in Capital Assets, Net of Related Debt $ 18,425,639 20,801,795 $ 25,207,269 $ 30,840,491 Restricted 9,750,823 12,626,787 12,739,448 11,926,132 Unrestricted 3,300,191 _ 3,680,724 5,175,119 6,181,593 Total Business-type Activities Net Assets $ 31,476,653 37,109,306 $ 43,121,836 $ 48,948,216 Primary Government Invested in Capital Assets, Net of Related Debt $ 73,535,434 83,119,096 $ 97,542,709 $ 112,575,839 Restricted 17,465,217 16,730,742 19,152,135 53,132,109 Unrestricted 2,337,743 10,859,174 13,089,849 (19,960,645) Total Primary Government Net Assets $ 93,338,394 110,709,012 $ 129,784,693 $ 145,747,303 Note:The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.This information is presented using the accrual basis of accounting. 84 TABLE D-2 CITY OF WYLIE, TEXAS EXPENSES, PROGRAM REVENUES,AND NET(EXPENSE)/REVENUE LAST FOUR FISCAL YEARS (UNAUDITED) Fiscal Year 2003 2004 2005 2006 Expenses Governmental Activities: General Government $ 2,946,474 $ 3,360,719 $ 3,490,621 $ 4,050,307 Public safety 4,868,978 5,898,710 7,437,298 8,003,798 Urban development 723,553 839,258 958,368 862,184 Streets 2,888,760 3,507,891 4,012,471 4,578,339 Community service 1,866,710 2,118,200 2,348,580 2,651,744 Interest on Long-Term Debt 897,371 836,290 1,030,375 1,751,355 Total Governmental Activities Expenses 14,191,846 16,561,068 19,277,713 21,897,727 Business-type Activities Utility 5,294,510 5,155,675 7,926,463 8,843,954 Total Business-type Activities Expenses 5,294,510 5,155,675 7,926,463 8,843,954 Total Primary Government Expenses $ 19,486,356 $ 21,716,743 $_ 27,204,176 $ 30,741,681 Program Revenues Governmental Activities: Charges for Services: General Government $ 1,130,651 1,399,332 $ 1,522,104 $ 1,862,104 Public safety 592,041 779,785 1,071,140 946,408 Urban development 2,150,919 1,986,683 1,689,979 1,748,000 Streets -- — — — Community service 115,180 107,242 130,434 221,299 Operating Grants and Contributions 67,139 42,088 61,271 37,731 Capital Grants and Contributions 339,992 10,902,894 12,462,144 8,411,904 Total Governmental Activities Program Revenues 4,395,922 15,218,024 16,937,072 13,227,446 Business-type Activities: Charges for Services: Utlility 5,864,532 6,776,232 7,876,859 8,832,061 Operating Grants and Contributions — — — — Capital Grants and Contributions 3,763,980 3,863,745 5,945,267 5,148,706 Total Business-type Activities Program Revenues 9,628,512 10,639,977 13,822,126 13,980,767 Total Primary Government Program Revenues $ 14,024,434 $ 25,858,001 $ 30,759,198 $ 27,208,213 Net(Expense)/Revenue Governmental Activities $ (9,795,924) (1,343,044) $ (2,340,641) $ (8,670,281) Business-type Activities 4,334,002 5,484,302 5,895,663 5,136,813 Total Primary Government Net Expense $ (5,461,922) 4,141,258 $ 3,555,022 $ (3,533,468) Note: The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.This information is presented using the accrual basis of accounting. 85 TABLE D-3 CITY OF WYLIE, TEXAS GENERAL REVENUES AND TOTAL CHANGE IN NET ASSETS LAST FOUR FISCAL YEARS (UNAUDITED) Fiscal Year 2003 2004 2005 2006 Net(Expense)/Revenue Governmental Activities $ (9,795,924) $ (1,343,044) $ (2,340,641) $ (8,670,281) Business-type Activities 4,334,002 5,484,302 5,895,663 5,136,813 Total Primary Government Net Expense (5,461,922) 4,141,258 3,555,022 (3,533,468) General Revenues and Other Changes in Net Assets Governmental Activities: Taxes Ad valorem taxes 6,748,379 8,226,158 9,744,962 11,232,673 Sales taxes 1,513,254 2,130,573 2,668,983 3,308,755 Franchise taxes 1,363,395 1,712,695 1,454,975 1,941,805 Unrestricted ilnvestment earnings 188,379 146,679 439,481 1,406,561 Miscellaneous 35,914 25,698 558,401 469,580 Gain (loss)on disposal of capital assets 6,207 — — — Transfers 492,125 570,239 479,942 447,137 Total Governmental Activities 10,347,653 12,812,042 15,346,744 18,806,511 Business-type Activities: Investment Earnings 227,486 191,258 441,638 821,375 Miscellaneous 61,564 131,494 129,976 315,329 Gain (loss)on disposal of capital assets — 193,305 — Transfers (492,125) (570,239) (479,942) (447,137) Total Business-type Activities (203,075) (247,487) 284,977 689,567 Total Primary Government $ 10,144,578 12,564,555 $ 15,631,721 $ 19,496,078 Change in Net Assets Governmental Activities $ 551,729 11,468,998 $ 13,006,103 $ 10,136,230 Business-type Activities 4,130,927 5,236,815 6,180,640 5,826,380 Total Primary Government $ 4,682,656 16,705,813 $ 19,186,743 $ 15,962,610 Note:The city began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.This information is presented using the accrual basis of accounting. 86 TABLE D-4 CITY OF WYLIE, TEXAS PROGRAM REVENUES BY FUNCTION/PROGRAM LAST THREE FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Fiscal Year 2003 2004 2005 2006 Function/Program Governmental Activities: General Government $ 1,130,651 $ 1,399,332 $ 1,522,104 $ 1,862,104 Public Safety 638,967 883,428 1,263,444 1,018,810 Urban Development 2,150,919 1,986,683 1,689,979 1,748,000 Streets — 10,607,369 12,093,836 8,025,212 Community Service 475,385 341,212 367,709 573,320 Interest on Long-Term Debt — — — — Subtotal Governmental Activities 4,395,922 15,218,024 16,937,072 13,227,446 Business-type Activities: Utility 9,628,512 10,639,977 13,822,126 13,980,767 Subtotal Business-type Activities 9,628,512 10,639,977 13,822,126 13,980,767 Total Primary Government $ 14,024,434 $ 25,858,001 $ 30,759,198 $ 27,208,213 87 TABLE D-5 CITY OF WYLIE, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 General Fund Reserved $ 16,016 $ 10,644 $ 83,197 $ 123,443 $ 93,941 $ 281,746 $ 27,156 $ 27,156 $ 66,650 $ 193,791 Unreserved 1,082,139 1,527,494 1,013,713 1,029,509 2,074,503 2,427,547 3,358,463 3,358,463 4,426,413 5,923,979 Total General Fund $ 1,098,155 $ 1,538,138 $ 1,096,910 $ 1,152,952 $ 2,168,444$ 2,709,293 $ 3,385,619 $ 3,385,619 $ 4,493,063 $ 6,117,770 All Other Governmental Funds Reserved $ 323,111 $ 329,456 $ 351,616 $ 413,805 $ 447,709 $ 504,533 $ 652,595 $ 652,595 $ 799,229 $ 1,193,142 Unreserved,Reported In: Special Revenue Funds 178,960 272,859 510,538 648,818 656,310 553,365 923,291 923,291 1,651,712 1,619,655 Capital Projects Funds 2,119,719 1,767,523 3,559,741 3,977,960 7,134,694 8,485,096 7,124,117 7,124,117 5,565,400 (1) 39,960,132 Total All Other Governmental Funds $ 2,621,790 $ 2,369,838 $ 4,421,895 $ 5,040,583 $ 8,238,713$ 9,542,994 $ 8,700,003 $ 8,700,003 $ 8,016,341 $ 42,772,929 (1) The increase in fund balance was due to unspent bond proceeds from an issuance during the period for capital projects. 88 I' TABLE D-6 CITY OF WYLIE, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Revenues Ad valorem taxes $ 4,290,348 $ 4,515,583 $ 5,000,046 $ 5,717,572 $ 6,591,776 $ 5,549,904 $ 6,789,129 $ 8,173,918 $ 9,754,037 $ 11,207,753 Sales taxes - -- - -- -- 1,425,506 1,513,254 2,130,572 2,668,983 3,308,755 Franchise fees - - - - -- 958,066 1,062,766 1,382,731 1,407,351 1,893,383 Licenses and permits 130,574 201,454 313,225 380,124 739,570 1,131,544 1,708,903 1,522,039 1,260,963 1,319,956 Intergovernmental 75,235 349,658 183,860 305,156 263,330 365,316 360,135 532,857 773,875 443,124 Service fees 564,701 681,722 786,721 834,143 1,077,036 1,643,429 1,563,150 1,964,910 2,094,474 2,322,030 Court fees 220,683 264,195 305,766 520,297 492,549 484,920 426,637 419,272 427,892 617,288 Interest income 237,362 239,206 210,125 368,180 358,224 225,386 188,379 146,679 439,481 1,406,562 Miscellaneous income 70,101 123,028 255,687 109,817 292,778 162,866 353,940 143,896 840,676 859,269 Total Revenues 5,589,004 6,374,846 7,055,430 8,235,289 9,815,263 11,946,937 13,966,293 16,416,874 19,667,732 23,378,120 Expenditures General Government 1,840,800 1,840,230 2,877,573 2,243,847 2,553,293 2,946,905 3,067,478 3,380,349 3,767,483 4,075,244 Public safety 1,666,984 1,713,291 2,681,027 2,763,704 3,144,614 4,120,896 4,761,956 5,773,019 7,751,414 8,892,087 Urban developmetn 187,755 244,198 335,778 418,151 550,994 711,194 707,450 827,281 953,570 859,697 Streets 511,610 668,928 449,737 561,432 445,148 2,210,787 721,335 1,213,454 1,345,498 1,548,675 Community service 455,349 623,980 592,189 893,465 1,166,681 1,438,312 1,906,459 2,094,914 8,554,999 2,789,512 Capital Outlay 1,990,010 1,706,918 1,693,845 1,841,395 1,758,402 -- 1,479,178 3,865,797 4,178,917 2,190,857 Debt Service Principal 690,384 702,271 874,452 1,186,455 1,409,509 1,096,743 1,190,889 1,326,449 1,404,888 1,554,007 Interest and fiscal charges -- -- -- -- -- 746,970 875,384 850,877 769,876 1,109,257 Bond issuance costs -- - - -- -- -- -- 176,219 154,417 Total Expenditures 7,342,892 7,499,816 9,504,601 9,908,449 11,028,641 13,271,807 14,710,129 19,332,140 28,902,864 23,173,753 Excess of Revenues Over(Under)Expenditures (1,753,888) (1,124,970) (2,449,171) (1,673,160) (1,213,378) (1,324,870) (743,836) (2,915,266) (9,235,132) 204,367 Other Financing Sources(Uses) Transfers In 666,049 793,819 425,288 542,355 565,000 771,430 1,149,708 1,011,756 1,188,604 1,293,280 Transfers Out (273,389) (543,819) (175,288) (174,465) (138,000) (351,430) (909,784) (690,495) (943,847) (1,546,049) Issuance of long-term debt 1,500,000 1,060,000 4,220,000 2,000,000 5,000,000 2,750,000 -- -- 13,798,337 36,229,000 Premium on bonds issued -- -- -- - - -- - - 160,796 200,697 Discount on bonds issued - -- -- -- -- -- - -- (84,614) -- Payment to refunded bond escrow agent -- -- -- - -- - Sale of capital assets 827 3,001 -- -- -- -- 6,207 -- (1,866,358) -- Total Other Financing Sources(Uses) 1,893,487 1,313,001 4,470,000 2,367,890 5,427,000 3,170,000 246,131 321,261 12,252,918 36,176,928 Net Change in Fund Balances $ 139,599 $ 188,031 $ 2,020,829 $ 694,730 4,213,622 $ 1,845,130 $ (497,705)$ (2,594,005)$ 3,017,786 $ 36,381,295 Debt Service As A Percentage Of Noncapital Expenditures 12.9% 12.1% 11.2% 14.7% 15.2% 13.9% 15.6% 14.1% 9.5% 13.4% 89 TABLE D-7 CITY OF WYLIE, TEXAS TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Ad Valorem Sales Franchise Year Taxes Taxes Taxes Total 1997 $ 2,736,072 $ 944,620 $ 609,656 $ 4,290,348 1998 2,920,124 968,730 626,729 4,515,583 1999 3,146,326 1,143,102 710,618 5,000,046 2000 3,829,263 1,182,764 705,545 5,717,572 2001 4,509,741 1,265,091 816,944 6,591,776 2002 5,549,904 1,425,506 958,066 7,933,476 2003 6,789,129 1,513,254 1,062,766 9,365,149 2004 8,173,918 2,130,572 1,382,731 11,687,221 2005 9,754,037 2,668,983 1,407,351 13,830,371 2006 11,207,753 3,308,755 1,893,383 16,409,891 Percent Change 1997-2006 309.6% 250.3% 210.6% 282.5% 90 I TABLE D-8 CITY OF WYLIE, TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY(1) LAST TEN FISCAL YEARS (UNAUDITED) Total Estimated Taxable Assessed Less: Total Taxable Direct Actual Value as a Fiscal Residential Commercial Industrial Tax-Exempt Assessed Tax Taxable Percentage of Year Property Property Property(2) Property Value Rate Value Actual Taxable Value 1997 $ 374,667,961 $ 61,860,436 $ N/A $ 34,295,672 $ 402,232,725 $ 0.6750 $ 402,232,725 100.000% 1998 397,157,540 63,635,268 N/A 33,899,573 426,893,235 0.6750 426,893,235 100.000% 1999 439,259,135 67,143,855 N/A 38,543,512 467,859,478 0.7000 467,859,478 100.000% 2000 468,009,067 93,993,900 124,720,455 36,723,491 649,999,931 0.7250 649,999,931 100.000% 2001 560,941,176 119,452,227 152,385,135 38,197,185 794,581,353 0.7200 794,581,353 100.000% 2002 726,859,995 141,791,206 145,359,599 48,290,835 965,719,965 0.7150 965,719,965 100.000% 2003 908,488,917 238,191,077 71,440,440 61,618,003 1,156,502,431 0.7050 1,156,502,431 100.000% 2004 1,150,987,305 278,236,963 68,178,047 67,507,524 1,429,894,791 0.6950 1,429,894,791 100.000% 2005 1,337,824,710 318,619,349 60,064,348 76,422,118 1,640,086,289 0.6950 1,640,086,289 100.000% 2006 1,542,236,827 263,505,829 136,669,956 84,931,166 1,857,481,446 0.7068 1,857,481,446 100.000% 91 TABLE D-9 CITY OF WYLIE, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES(1) LAST TEN FISCAL YEARS (UNAUDITED) City Direct Rates Overlapping Rates General Wylie Community Collin County Total Obligation Total Independent Independent Community Direct& Fiscal Basic Debt Direct School School Collin College Overlapping Year Rate Service Rate District District County District Rates 1997 $ 0.5421 $ 0.1329 $ 0.6750 $ 1.5500 $ 1.4600 $ 0.2600 $ 0.0986 $ 4.0436 1998 0.5169 0.1581 0.6750 1.5500 1.4600 0.2600 0.0986 4.0436 1999 0.5035 0.1965 0.7000 1.6000 1.5000 0.2500 0.0986 4.1486 2000 0.5209 0.2041 0.7250 1.5700 1.2928 0.2500 0.0957 3.9335 2001 0.4891 0.2309 0.7200 1.5700 1.5000 0.2500 0.0941 4.1341 2002 0.5039 0.2111 0.7150 1.5609 1.4301 0.2500 0.0928 4.0488 2003 0.5340 0.1710 0.7050 1.6100 1.5375 0.2500 0.0920 4.1945 2004 0.5559 0.1391 0.6950 1.7200 1.6200 0.2500 0.0919 4.3769 2005 0.5619 0.1331 0.6950 1.8000 1.6700 0.2500 0.0906 4.5056 2006 0.5620 0.1448 0.7068 1.7250 1.5400 0.2400 0.0878 4.2996 (1) Source: Central appraisal District of Collin County web site(www.collin-cad.org). (2) Although the Community Independent School District is included in the above presentation, less than one per cent of the City of Wylie lies within this taxing jurisdiction. (3) Basis for property tax rate is per$100 of taxable valuation. 92 TABLE D-10 CITY OF WYLIE, TEXAS PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 2006 1997 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Sanden International $ 44,011,807 1 2.46% $ 50,355,654 1 12.52% Sanden International(USA) 16,400,000 2 0.92% 15,974,112 2 3.97% Atrium Companies, Inc. 15,038,278 3 0.84% — — — CMH Parks, Inc. 13,933,265 4 0.78% — — -- TXU Electric Delivery Company 12,755,879 5 0.71% — — — Wal-Mart Real Estate Business 12,565,276 6 0.70% -- — -- Cascades Apartments Ltd. 10,520,154 7 0.59% — -- — Holland Hitch of Texas Inc. 8,957,425 8 0.50% 8,870,276 3 — Windough(DE)LP 8,288,878 9 0.46% — -- — Centex Homes 8,200,856 10 0.46% — — — General Telephone — — — 6,527,082 4 1.62% Fujilease Corporation — — — 5,641,738 5 1.40% Clayton Homes — — -- 4,693,293 6 1.17% Texas Utilities Electric — — -- 3,829,730 7 0.95% Extruders Div.of Fojasek -- — — 3,812,902 8 0.95% Weatdale Rustic Oaks Ltd. — — -- 3,647,468 9 0.91% Brookshire Grocery Co. — — -- 2,279,306 10 0.57% Total $ 150,671,818 8.42% $ 105,631,561 24.06% (1) Source: Central appraisla district of Collin County. 93 TABLE D-11 CITY OF WYLIE, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Collected Within the Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Ended for the Percentage In Subsequent Percentage September 30 Fiscal Year Amount of Levy Years Amount of Levy 1997 $ 2,673,944 $ 2,636,405 98.60% $ 36,894 $ 2,673,299 99.98% 1998 2,882,071 2,836,280 98.41% 65,880 2,902,160 100.70% 1999 3,161,383 3,095,579 97.92% 42,583 3,138,162 99.27% 2000 3,799,949 3,739,402 98.41% 28,033 3,767,435 99.14% 2001 4,482,580 4,413,866 98.47% 44,588 4,458,454 99.46% 2002 5,551,269 5,413,295 97.51% 52,355 5,465,650 98.46% 2003 6,900,461 6,567,156 95.17% 82,696 6,649,852 96.37% 2004 8,229,415 8,029,289 97.57% 136,594 8,165,883 99.23% 2005 10,041,005 9,524,055 94.85% 74,574 9,598,629 95.59% 2006 11,161,901 10,989,996 98.46% -- 10,989,996 98.46% 94 TABLE D-12 CITY OF WYLIE, TEXAS DIRECT AND OVERLAPPING SALES TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) City Fiscal Direct Collin Year Rate County 1997 1.50% — 1998 1.50% — 1999 1.50% — 2000 1.50% — 2001 1.50% -- 2002 1.50% — 2003 1.50% — 2004 1.50% — 2005 1.50% — 2006 1.50% -- Note: The City sales tax rate includes the City sales tax rate of one percent and the blended component unit rate of one-half percent. 95 TABLE D-13 CITY OF WYLIE, TEXAS SALES TAX REVENUE PAYERS BY INDUSTRY CURRENT YEAR AND NINE YEARS AGO Fiscal Year 2006 Fiscal Year 1997 Number Percentage Tax Percentage Number Percentage Tax Percentage of Filers of Total Liability of Total of Filers of Total Liability of Total Retail Trade 737 39.26% $ 1,522,382 66.21% 649 47.86% $ 399,344 64.61% Services 559 29.78% 176,737 7.69% 329 24.26% 57,080 9.23% Manufacturing 146 7.78% 145,347 6.32% 112 8.26% 88,258 14.28% Wholesale Trade 54 2.88% 123,927 5.39% 42 3.10% 31,610 5.11% Government -- -- -- - Construction 214 11.40% 177,164 7.71% 137 10.10% 9,487 1.53% Finance, Insurance,and Real Estate — -- -- -- — — -- -- Transportation and Utilities 25 1.33% 5,562 0.24% 14 1.03% 10,322 1.67% Agriculture 142 7.57% 148,077 6.44% 73 5.38% 22,018 3.56% Mining -- -- — -- -- -- -- -- Farm Earnings -- -- — -- -- -- -- -- Total 1,877 100.00% $ 2,299,196 100.00% 1,356 100.00% $ 618,120 100.00% Note: Due to confidentiality issues,the names of the ten largest revenue payers are not available.The categories presented are intended to provide alternative information regarding the sources of revenue. The tax liability includes the City sales tax rate of one percent and the blended component unit rate of one-half percent. 96 I` TABLE D-14 CITY OF WYLIE, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) General Bonded Debt Other Governmental Activities Debt General Combination Tax Fiscal Obligation Tax/Revenue Certificates of Revenue Contractual Loans and Capital Year Bonds Bonds Obligation Bonds Obligations Obligation Leases 1997 $ 5,537,652 $ -- $ — $ 1,710,000 $ -- $ — $ -- 1998 5,346,814 -- — 1,665,000 -- -- -- 1999 5,267,238 -- -- 1,620,000 — -- -- 2000 8,092,579 -- -- 1,570,000 -- -- -- 2001 11,064,179 -- — 1,515,000 — -- -- 2002 15,294,286 1,509,130 365,000 1,400,000 — 370,000 — 2003 14,490,946 1,281,580 270,000 1,335,000 -- 285,000 -- 2004 13,656,341 1,049,736 170,000 1,265,000 -- 195,000 — 2005 19,325,556 6,225,000 65,000 1,190,000 -- 100,000 33,064 2006 53,613,889 6,010,000 -- 1,115,000 841,659 — 16,097 Business-type Activities General Water Total Percentage Fiscal Obligation Revenue Contractual Capital Primary of Personal Per Year Bonds Bonds Obligations Leases Government Income Capita(2) 1997 $ 7,667,347 $ -- $ -- $ -- $ 14,914,999 6.96% $ 1,394 1998 7,318,185 -- -- -- 14,329,999 5.77% 1,241 1999 6,954,984 — -- -- 13,842,222 4.54% 1,116 2000 6,522,421 1,380,000 — — 17,565,000 4.98% 1,332 2001 6,100,821 3,060,000 -- -- 21,740,000 4.59% 1,301 2002 3,235,735 6,040,870 -- 672,813 28,887,834 5.60% 1,574 2003 3,074,072 5,603,420 — 522,578 26,862,596 4.50% 1,258 2004 2,903,677 5,155,264 -- 360,724 24,755,742 3.30% 947 2005 3,699,444 3,615,000 -- 356,890 34,609,954 3.91% 1,161 2006 3,226,111 3,460,000 1,157,710 185,000 69,625,466 6.70% 2,110 (1) Details regarding the City's outstanding debt cn be found in the notes to the financial statements. (2) See the Schedule of Demographic and Economis Statistics on page 102 for population data. 97 TABLE D-15 CITY OF WYLIE, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (UNAUDITED) General Bonded Debt Outstanding Percentage General Actual Taxable Fiscal Obligation Certificates of Value of Per Year Bonds Obligation Total Property Capita 1997 $ 12,786,702 $ -- $ 12,786,702 3.18% $ 1,195 1998 13,232,033 — 13,232,033 3.10% 1,146 1999 15,973,030 — 15,973,030 3.41% 1,288 2000 16,921,504 — 16,921,504 3.12% 1,283 2001 20,782,305 — 20,782,305 3.37% 1,244 2002 15,294,286 365,000 15,659,286 2.98% 853 2003 14,490,946 270,000 14,760,946 1.70% 691 2004 13,656,341 170,000 13,826,341 1.28% 529 2005 19,325,556 65,000 19,390,556 1.80% 650 2006 53,613,889 — 53,613,889 3.51% 1,625 (1) Details regarding the City's outstanding debt can be found in the notes to the financial statements. (2) See the schedule of Assessed Value and Estimated Actual Value of Taxable Property on page 91 for property value data. (3) See the Schedule of Demographic and Economis Statistics on page 102 for population data. 98 TABLE D-16 CITY OF WYLIE, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) Estimated Share of Estimated Direct and Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt Debt Repaid With Property Taxes Wylie Independent School District $ 229,400,804 (1) 56.470% $ 129,542,634 Community Independent School District 13,046,888 (1) 0.420% 54,797 Collin County 333,285,000 (1) 2.670% 8,898,710 Collin County 54,315,000 (1) 2.670% 1,450,211 Subtotal, Overlapping Debt 139,946,351 City Direct Debt (2) 53,613,899 Total Direct and Overlapping Debt $ 193,560,250 Ratio of Direct and Overlapping Bonded Debt to Taxable Assessed Valuation 10.92% Per Capita Direct and Overlapping Debt $ 5,865 (1) Source: First Southwest Company (2) Excludes self supported debt (3)Overlapping governments are those that coincide, at least in part,with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of wylie,Texas. This process recognizes that,when considering the government's ability to issue and repay long-term debt,the entire debt burden borne by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a resident,and therfore responsible for repaying the debt,of each overlapping government. (4) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the various governments taxable assessed value that is within the government's boundaries and dividing it by the total taxable assessed value. 99 TABLE D-17 CITY OF WYLIE, TEXAS LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) 1 Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Debt Limit $ 73,101,228 $ 77,160,814 $ 86,151,952 $ 98,316,670 $ 113,213,283 $ 135,497,032 $ 155,220,182 $ 184,161,840 $ 234,374,571 $ 790,054,078 Total Net Debt Applicable to Limit 12,786,702 13,232,033 15,973,030 16,921,504 20,782,305 22,427,338 15,833,191 14,515,653 25,077,022 53,613,889 Legal Debt Margin 60,314,526 63,928,781 70,178,922 81,395,166 92,430,978 113,069,694 139,386,991 169,646,187 209,297,549 736,440,189 Total Net Debt Applicable to the Limit Asa Percentage of Debt Limit 17.49% 17.15% 18.54% 17.21% 18.36% 16.55% 10.20% 7.88% 10.70% 6.79% Legal Debt Margin Calculation for the Current Fiscal Year Assessed Value $ 1,785,589,736 Debt Limit(10%of Assessed Value) 178,558,974 Debt Applicable to Limit: General Obligation Bonds 53,613,889 Less:Amount Set Aside for Repayment of General Obligation Debt (1,245,844) Total Net Debt applicable to Limit 52,368,045 Legal Debt Margin $ 126,190,929 (1) Under state law,the City of Wylie,Texas'outstanding general obligation debt should not exceed 10 percent of total assessed property value. By law,the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. 100 TABLE D-18 CITY OF WYLIE, TEXAS PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) Water Revenue Bonds Utility Less: Net Fiscal Service Operating Available Debt Service Year Charges(1) Expenses Revenue Principal Interest Total Coverage 1997 $ 2,994,778 $ 1,600,516 $ 1,394,262 $ — $ -- $ -- — 1998 3,412,649 1,719,850 1,692,799 -- — -- — 1999 3,594,192 1,809,362 1,784,830 -- -- — — 2000 3,958,753 2,124,943 1,833,810 40,000 73,644 113,644 16.14 2001 4,313,606 2,259,333 2,054,273 85,000 168,929 253,929 8.09 2002 4,789,856 2,636,705 2,153,151 90,000 163,411 253,411 8.50 2003 5,864,531 3,833,370 2,031,161 135,000 203,808 338,808 6.00 2004 6,776,234 3,674,258 3,101,976 140,000 198,981 338,981 9.15 2005 7,876,858 6,411,920 1,464,938 145,000 190,322 335,322 4.37 2006 8,832,060 6,925,231 1,906,829 155,000 181,339 336,339 5.67 (1) Includes total operating revenue of the Utility Enterprise Fund. (2) Includes operating expenses of the Utility Enterprise Fund, less depreciation expense. (3) Debt service requirements includes principal and interest payments on revenue bonds. i 1 101 i TABLE D-19 CITY OF WYLIE, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS (UNAUDITED) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Population(1) 10,700 11,550 12,400 13,190 16,711 18,350 21,350 26,150 29,800 33,000 Personal Income $ 52,407 $ 52,202 $ 50,801 $ 59,400 $ 50,000 $ 58,607 $ 67,215 $ 70,049 $ 72,570 $ 75,781 Per Capita Personal Income $ 20,035 $ 21,496 $ 24,596 $ 26,749 $ 28,333 $ 28,132 $ 27,951 $ 28,716 $ 29,738 $ 31,511 Median Age 32.4 36.3 34.1 32.9 32.9 32.7 32.8 32.8 33.0 33.6 Education Level in Years of Schooling(2) Less than high school graduate MA NW NW 14.2% 14.2% 14.2% 14.2% 14.2% 14.2% 14.2% High school graduate(or equivalent) MA MA NW 26.6% 26.6% 26.6% 26.6% 26.6% 26.6% 26.6% Some college/associate's degree MA NW NW 37.4% 37.4% 37.4% 37.4% 37.4% 37.4% 37.4% Bachelor's degree NW NW MA 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% Masters,professional, or doctorate MA NW MA 4.8% 4.8% 4.8% 4.8% 4.8% 4.8% 4.8% School Enrollment 3,871 3,996 3,984 4,608 4,975 5,718 6,256 7,903 8,948 9,800 Unemployment 2.4% 2.6% 2.5% 2.6% 5.8% 7.7% 6.9% 5.2% 4.3% 4.5% (1) Population estimate from North Central Texas council of Governments, as modified by City staff estimates. (2) Education per the 2000 U.S.Census. (3) Unemployment rates from the Texas Workforce Commission website(www.twc.state.tx.us). 102 1_ TABLE D-20 CITY OF WYLIE, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 2006 1997(1) Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Sanden International 769 1 3.94% — — — Public Education 700 2 3.58% — — — Extruders 447 3 2.29% — — — NTMWD 353 4 1.81% — — — Holland Hitch company 172 5 0.88% — — — City of Wylie 168 6 0.86% — -- — Lone Star Circuits 150 7 0.77% — — — Carlisle Coatings&Waterproffing 100 8 0.51% — — — Moulding Associates, Inc. 100 9 0.51% — -- — SunRise Care and Rehabilitation 88 10 0.45% — — — Total 3,047 15.59% — — (1) Information for 1997 is not available. 103 TABLE D-21 CITY OF WYLIE, TEXAS FULL-TIME-EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Full-Time-Equivalent Employees as of Year End 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Function/Program General Government Management Services 4 5 5 5 6 7 7 8 8 10 Finance 6 6 6 6 6 6 6 6 6 5 Development Services 5 6 8 9 — — -- -- — — Planning — 3 3 3 3 3 3 Building — — -- — 5 7 7 8 9 9 Other 3 2 3 3 4 4 3 3 4 4 Police Officers 18 18 21 22 28 23 26 28 35 38 Civilians 2 3 3 3 3 3 4 5 5 5 Fire Firefighters and Officers 11 11 13 17 18 26 27 29 30 30 Civilians 1 1 1 1 1 1 1 1 2 2 Animal Control 1 1 1 1 1 2 2 3 3 4 Dispatch 5 4 4 5 -- 7 7 8 10 10 Streets 5 5 5 5 6 6 8 8 11 11 Other Public Works Engineering -- — — -- 3 3 3 3 4 4 Other 7 7 8 11 9 11 11 11 13 13 Parks and Recreation 5 7 7 10 14 14 18 20 23 23 Library 5 5 5 6 6 6 6 6 7 8 Water 8 8 8 8 8 9 11 10 11 11 Wastewater — -- — — -- — -- 4 5 5 EDC 2 2 2 2 2 2 1 1 1 1 Total 88 91 100 114 123 140 151 165 190 196 104 1 CITY OF WYLIE, TEXAS TABLE D-22 OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Function/Program General Government Building Permits Issued 176 287 332 409 634 974 1,430 1,282 1,203 1100 Building Permits Value 17,004,307 31,784,817 36,253,037 48,971,298 83,528,866 149,261,595 189,835,081 173,349,315 145,747,742 170,732,405 Police Violation Issued 3,639 3,283 3,421 5,690 4,928 5,200 4,301 3,966 3,044 6068 Warrants Issued 131 937 768 898 740 715 230 378 1,664 1062 Arrests 626 585 824 793 851 732 720 741 706 923 Fire Emergency Responses 771 781 972 1,332 1,303 1,312 1,658 1,698 1,935 2,107 Fires Extinguished 70 95 124 119 115 108 138 164 209 172 Inspections 399 438 438 392 443 329 445 596 527 549 Other Public Works Street Resurfacing(miles) 4 1 2 4 0 1 4 5 0 4.93 Potholes Repaired 0 0 0 0 0 0 0 0 216 240 Parks and Recreation Athletic Field Permits Issued 0 0 0 0 0 0 0 25 34 18 Community Center Admissic 0 0 0 0 0 0 14,280 19,044 20,349 14173 Baseball/Softball Fields 6 6 8 8 8 8 8 8 9 9 Soccer/Football Fields 7 7 14 14 14 14 14 14 16 16 Library Volumes in Collection 35,695 40,494 41,209 38,247 42,997 44,000 46,166 47,251 49393 50,393 Water New Connections 176 287 332 409 634 974 1,430 1,282 1,020 1100 Water Main Breaks 12 11 18 10 17 21 26 17 16 24 Average Daily Consumption (gallons) 2610000 1540000 2040000 2570000 2485838 2382036 3,049,411 3487193 4076730 3991080 105 0 6 TABLE D-23 CITY OF WYLIE, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 1997 1998 1999 2000 2001 2092 2003 2004 2005 2006 Function/Program Police Stations 1 1 1 1 1 1 1 1 1 1 Fire Stations 2 2 2 2 2 2 2 2 2 2 Other Public Works Streets(miles) 41 41 54 70 76 76 114 114 127 127 Alleys(miles) -- -- -- 6 6 12 12 Traffic Signals 3 3 3 3 3 3 10 10 10 10 Parks and Recreation Acreage 103 103 170 170 175 213 224 239 279 541 Playgrounds 4 4 4 4 5 8 8 9 11 11 Community Centers 1 1 1 1 1 1 1 1 1 1 Water Water Mains(miles) 54 5 70 90 100 100 8 108 110 110 Fire Hydrants 456 456 682 800 800 800 1,084 1,242 1,242 1,242 Number of service connections 3,847 4,105 4,528 4,528 5,221 6,591 7,901 8,841 9,645 9,645 Wastewater Sanitary Sewers(miles) 60 60 85 100 108 108 114 114 123 130 Education Wylie ISD Campuses in Wylie 6 6 7 7 7 8 9 11 12 13 106 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: March 27, 2007 Item Number: 3 Department: Finance (City Secretary's Use Only) Prepared By: Larry Williamson Account Code: Date Prepared: March 19, 2007 Budgeted Amount: Ordinance, List of Projects, Exhibits: Timetable and Number Runs Subject Consider, and act upon, all matters incident and related to the issuance and sale of "City of Wylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2007", including the adoption of Ordinance No. 2007-09 authorizing the issuance of such certificates of obligation. Recommendation Motion to approve all matters incident and related to the issuance and sale of "City of Wylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2007", including the adoption of Ordinance No. 2007-09 authorizing the issuance of such certificates of obligation. Discussion The City approved a 5 year Capital Improvement Plan (CIP) for water and sewer projects and identified certain projects as being funded with Certificates of Obligations. The debt service for these bonds was included in the City's Water Rate Study. This ordinance authorizes the sale of these bonds to the underwriters, with closing scheduled for early May 2007. A list of projects being funded with the bond proceeds is attached for your review as well as a timetable and ordinance. Approved By Initial Date Department Director LW 3/19/07 City Manager i// i ,3 / a, (07 Page 1 of 1 ORDINANCE NO. 2007-09 AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF WYLIE, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2007"; SPECIFYING THE TERMS AND FEATURES OF SAID CERTIFICATES; PROVIDING FOR THE PAYMENT OF SAID CERTIFICATES OF OBLIGATION BY THE LEVY OF AN AD VALOREM TAX UPON ALL TAXABLE PROPERTY WITHIN THE CITY AND A LIMITED PLEDGE OF THE NET REVENUES FROM THE OPERATION OF THE CITY'S WATERWORKS AND SEWER SYSTEM; AND RESOLVING OTHER MATTERS INCIDENT AND RELATING TO THE ISSUANCE, PAYMENT, SECURITY, SALE AND DELIVERY OF SAID CERTIFICATES, INCLUDING THE APPROVAL AND EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT AND A PURCHASE CONTRACT AND THE APPROVAL AND DISTRIBUTION OF AN OFFICIAL STATEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of$7,750,000 for the purpose of paying contractual obligations to be incurred for the construction of public works, to wit: improvements and extensions to the City's combined Waterworks and Sewer System, and to pay contractual obligations for professional services rendered in relation to such projects and the financing thereof; has been duly published in The Wylie News on , 2007 and , 2007, the date the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the adoption of the ordinance authorizing the issuance of such certificates; and WHEREAS, no petition protesting the issuance of the certificates of obligation and bearing valid petition signatures of at least 5% of the qualified electors of the City, has been presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to the date of the passage of this ordinance; and WHEREAS, the Council hereby finds and determines that the certificates of obligation described in the aforesaid notice should be issued and sold at this time in the amount and manner as hereinafter provided. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE,TEXAS: SECTION 1: Authorization, Designation, Principal Amount, Purpose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $7,675,000, to be designated and bear the title "CITY OF WYLIE, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2007" (hereinafter referred to as the "Certificates"), for the purpose of paying contractual obligations to be incurred for the construction of public works, to wit: improvements and extensions to the City's combined Waterworks and Sewer System, and to pay contractual obligations for professional services rendered in relation to such projects and the financing thereof; pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended. SECTION 2: Fully Registered Obligations - Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated March 15, 2007 (the "Certificate Date") and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the per annum rate(s) in accordance with the following schedule: Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation 45889344.1 /10613025 Year of Principal Interest Stated Maturity Amount Rate(s) 2008 $100,000 2009 255,000 2010 265,000 2011 280,000 2012 290,000 2013 305,000 2014 320,000 2015 335,000 2016 350,000 2017 370,000 2018 385,000 2019 405,000 2020 425,000 2021 445,000 2022 465,000 2023 490,000 2024 510,000 2025 535,000 2026 560,000 2027 585,000 The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months), and such interest shall be payable on February 15 and August 15 of each year, commencing February 15, 2008. SECTION 3: Terms of Payment-Paving Agent/Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the"Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of The Bank of New York Trust Company, N.A., Dallas, Texas, to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each 45889344.1/10613025 2 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Certificates shall be payable at the Stated Maturities or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest on the Certificates shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Certificates maturing on and after February 15, 2018 shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of$5,000 or any integral multiple thereof(and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2017, or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Certificates as representing the number of Certificates Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates to be redeemed within such Stated Maturity by lot. 45889344.1/10613025 3 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii) identify the Certificates to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, provided moneys sufficient for the payment of such Certificate (or the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar and (v) specify that payment of the redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender of the Certificates. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption has been duly given as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor. SECTION 5: Registration - Transfer - Exchange of Certificates-Predecessor Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in Section 8 hereof) may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. 45889344.1/10613025 4 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 19 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Certificates, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants"). While the Certificates are held by DTC under the Depository Agreement, the Holder of the Certificates on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and provide for the Certificate certificates to be issued and delivered to DTC Participants and Beneficial 45889344.1/10613025 5 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201, as amended. No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 9(c), manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9(d), manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount stated in Section 1 hereof with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or(ii) as multiple fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Certificates)") and, in either case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Certificate(s) shall be the Certificates submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. (a) Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Certificates, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the 45889344.1/10613025 6 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the certificate. The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Certificates as evidenced by their execution. (b) Form of Certificates. REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF WYLIE, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, SERIES 2007 Certificate Date: Interest Rate: Stated Maturity: CUSIP NO: March 15, 2007 % February 15, Registered Owner: Principal Amount: DOLLARS The City of Wylie (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the interest payment date next preceding the "Registration Date" of this Certificate appearing below (unless this Certificate bears a "Registration Date" as of an interest payment date, in which case it shall bear interest from such date, or unless the "Registration Date" of this Certificate is prior to the initial interest payment date in which case it shall bear interest from the Certificate Date) at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 in each year, commencing February 15, 2008. Principal of this Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor; provided, however, while this Certificate is registered to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Certificate. Interest is payable to the registered owner of this Certificate(or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the"Record Date", which 45889344.1/10613025 7 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $7,675,000 (herein referred to as the "Certificates") for the purpose of paying contractual obligations to be incurred for the construction of public works, to wit: improvements and extensions to the City's combined Waterworks and Sewer System, and to pay contractual obligations for professional services rendered in relation to such projects and the financing thereof; under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Certificates maturing on and after February 15, 2018, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2017, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Certificate to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date such Certificate (or the portion of its principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of the redemption price and the interest accrued on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption date on the principal amount redeemed. In the event a portion of the principal amount of a Certificate is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Certificate is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such 45889344.1/10613025 8 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Certificate to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part. The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City and from a limited pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sanitary Sewer System (the "System"), such pledge of the Net Revenues for the payment of the Certificates being limited to an amount of$1,000 and, together with a parity pledge securing the payment of the Previously Issued Certificates, being junior and subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien Obligations" (as defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations without limitation as to principal amount but subject to any applicable terms, conditions or restrictions under law or otherwise. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the Net Revenues pledged to the payment of the principal of and interest on the Certificates; the nature and extent and manner of enforcement of the pledge; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and the pledges, charges and covenants made therein may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States 45889344.1/10613025 9 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. CITY OF WYLIE, TEXAS Mayor COUNTERSIGNED: City Secretary (Seal) 45889344.1/10613025 10 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (c) Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Certificate(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER ) OF PUBLIC ACCOUNTS ) REGISTER NO. THE STATE OF TEXAS ) I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this . Comptroller of Public Accounts of the State of Texas (SEAL) (d) Form of Certificate of Paying Agent/Registrar to appear on Definitive Certificates only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated office of the Paying Agent/Registrar located in Dallas, Texas, is the "Designated Payment/Transfer Office"for this Certificate. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas, as Paying Agent/Registrar Registration Date: By Authorized Signature 45889344.1/10613025 11 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (e) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this assignment must correspond with the name of the registered owner as it Signature guaranteed: appears on the face of the within Certificate in every particular. (f) The Initial Certificate(s) shall be in the form set forth in paragraph (b) of this Section, except that the form of a single fully registered Initial Certificate shall be modified as follows: REGISTERED REGISTERED NO. T-1 $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF WYLIE, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, SERIES 2007 Certificate Date: March 15, 2007 Registered Owner: Principal Amount: DOLLARS The City of Wylie (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: 45889344.1/10613025 12 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation PRINCIPAL INTEREST YEAR INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof). (or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 of each year, commencing February 15, 2008. Principal installments of this Certificate are payable at its Stated Maturity or on a prepayment date to the registered owner hereof by The Bank of New York Trust Company, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect to the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appears herein without qualifying language, are defined to mean as follows: (a) The term "Certificates" shall mean the "CITY OF WYLIE, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2007" authorized by this Ordinance. (b) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 11 of this Ordinance. (c) The term "Collection Date" shall mean, when reference is being made to the levy and collection of annual ad valorem taxes, the date annual ad valorem taxes levied each year by the City become delinquent. 45889344.1/10613025 13 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (d) The term "Fiscal Year' shall mean the twelve month accounting period used by the City in connection with the operation of the System which may be any twelve consecutive month period established by the City. (e) The term "Government Securities" shall mean (i)direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (f) The term "Gross Revenues" shall mean all income, receipts and revenues of every nature derived or received from the operation and ownership (excluding refundable meter deposits, restricted gifts and grants in aid of construction) of the System, including earnings and income derived from the investment or deposit of moneys in any special funds or accounts created and established for the payment and security of the Prior Lien Obligations and other obligations payable solely from and secured only by a lien on and pledge of the Net Revenues. (g) The term "Maintenance and Operating Expenses" shall mean all current expenses of operating and maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair obligations payable from Net Revenues shall be deducted in determining "Net Revenues". Depreciation charges shall not be considered Maintenance and Operating Expenses. Maintenance and Operating Expenses shall include payments under contracts for the purchase of water supply, treatment of sewage or other materials, goods or services for the System to the extent authorized by law and the provisions of such contract. (h) The term "Net Revenues" shall mean Gross Revenues of the System, with respect to any period, after deducting the System's Maintenance and Operating Expenses during such period. (i) The term "Outstanding" when used in this Ordinance with respect to Certificates means, as of the date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: (1) those Certificates cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Certificates deemed to be duly paid by the City in accordance with the provisions of Section 20 hereof; and (3) those mutilated, destroyed, lost, or stolen Certificates which have been replaced with Certificates registered and delivered in lieu thereof as provided in Section 19 hereof. 45889344.1/10613025 14 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (j) The term "Previously Issued Certificates" shall mean the outstanding "City of Wylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2005", dated January 1, 2005. (k) The term "Prior Lien Obligations" shall mean (i) the outstanding and unpaid (1) "City of Wylie, Texas Waterworks and Sewer System Revenue Bonds, Series 1999", dated September 1, 1999, and originally issued in the aggregate principal amount of $1,380,000, (2) "City of Wylie, Texas, Waterworks and Sewer System Revenue Bonds, Series 2000", dated August 15, 2000, and originally issued in the aggregate principal amount of$1,720,000, and (3) "City of Wylie, Texas, Waterworks and Sewer System Revenue Bonds, Series 2002", dated September 15, 2002, and originally issued in the aggregate principal amount of$1,150,000 and (ii) obligations hereafter issued which by the terms of the authorizing ordinance are made payable from and secured by a lien on and pledge of the Net Revenues of the System ranking prior and superior to the lien and pledge securing the payment of the Previously Issued Certificates and the Certificates. (I) The term "System" shall mean all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment, transmission and distribution of treated potable water and the collection, treatment and disposal of water carried wastes, together with all future extensions, improvements, replacements and additions thereto; provided, however, that notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the term "System" shall not mean to include facilities of any kind which are declared not to be a part of the System and which are acquired or constructed by or on behalf of the City with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of the City which are not bonds but which are payable from and secured by other liens on and pledges of any revenues, sources or payments, not pledged to the payment of the bonds including, but not limited to, special contract revenues or payments received from any other legal entity in connection with such facilities. SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and is hereby created a special account or fund on the books and records of the City known as the "SPECIAL SERIES 2007 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and all moneys deposited to the credit of such Fund shall be shall be kept and maintained in a special banking account at the City's depository bank. The Mayor, Mayor Pro Tern, City Manager, Finance Director, and City Secretary of the City, individually or collectively, are hereby authorized and directed to make withdrawals from said Fund sufficient to pay the principal of and interest on the Certificates as the same become due and payable, and, shall cause to be transferred to the Paying Agent/Registrar from moneys on deposit in the Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar on or before the last business day next preceding each interest and principal payment date for the Certificates. Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter 2256) relating to the investment of"bond proceeds"; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses debited to, the said 45889344.1/10613025 15 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levy. To provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied for the current year and each succeeding year thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one hundred dollars' valuation of taxable property in said City, within the limitations prescribed by law, adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on the Certificates shall be determined and accomplished in the following manner: (a) Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the City Council shall determine: (1) The amount on deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the amount of the Net Revenues of the System appropriated and allocated to pay such Debt Service Requirements prior to the Collection Date for the ad valorem taxes to be levied. (2) The amount of Net Revenues of the System, and any other lawfully available revenues which are appropriated and to be set aside for the payment of the Debt Service Requirements on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (3) The amount of Debt Service Requirements to become due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (b) The amount of taxes to be levied annually each year to pay the Debt Service Requirements on the Certificates shall be the amount established in paragraph (3) above less the sum total of the amounts established in paragraphs (1) and (2), after taking into consideration delinquencies and costs of collecting such annual taxes. Accrued interest received from the purchasers of the Certificates shall be deposited to the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts 45889344.1/10613025 16 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation so deposited shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes. SECTION 13: Limited Pledge of Revenues. The City hereby covenants and agrees that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment and security of Prior Lien Obligations, the Net Revenues of the System in an aggregate amount not to exceed $1,000 are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates, and the limited pledge of$1,000 of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and shall be on an parity in all respects with the lien on the Net Revenues securing the payment of the Previously Issued Certificates until such time as the City shall pay all of such $1,000 after which time the pledge shall cease hereof. Furthermore, such lien on and pledge of the Net Revenues securing the payment of the Certificates shall be valid and binding and fully perfected from and after the date of adoption of this Ordinance without physical delivery or transfer or transfer of control of the Net Revenues, the filing of this Ordinance or any other act; all as provided in Chapter 1208 of the Texas Government Code. Section 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge of the Net Revenues of the System granted by the City under this Section 13, and such pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the Certificates are Outstanding such that the pledge of the Net Revenues of the System granted by the City under this Section 13 is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the Certificates the perfection of the security interest in said pledge, the City agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. SECTION 14: System Fund. The City hereby covenants and agrees that all Gross Revenues (excluding earnings from the investment of money held in any special funds or accounts created for the payment and security of Prior Lien Obligations) shall be deposited as collected into a fund maintained at an official depository of the City and known on the books of the City as the "Water and Sewer System Fund" (hereinafter called the "System Fund"). All moneys deposited to the credit of the System Fund shall be allocated, appropriated and budgeted to the extent required for the following purposes and in the order of priority shown, to wit: FIRST: To the payment of all necessary and reasonable Maintenance and Operating Expenses as defined herein or required by statute to be a first charge on and claim against the Gross Revenues thereof. SECOND: To the payment of all amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations. THIRD: Equally and ratably, to the payment of the limited amounts pledged to the payment of the Previously Issued Certificates and the Certificates. 45889344.1/10613025 17 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 16: Special Covenants. The City hereby further covenants as follows: (a) It has the lawful power to pledge the Net Revenues of the System to the payment of the Certificates in the manner herein contemplated and has lawfully exercised such power under the Constitution and laws of the State of Texas, including said power existing under V.T.C.A, Government Code, Sections 1502.56 and 1502.58 and V.T.C.A., Local Government Code, Sections 271.041, et seq. (b) Other than for the payment of the outstanding Prior Lien Obligations, the Previously Issued Certificates and the Certificates, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. SECTION 17: Issuance of Prior Lien Obligations and Additional Parity Obligations. The City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise, and such Prior Lien Obligations hereafter issued may be payable, in whole or in part, from the Net Revenues (without impairment of the obligation of contract with the Holders of the Certificates) upon such terms and secured in such manner as the City Council may determine. Additionally, the City reserves the right without any limitations or restrictions to issue additional obligations payable (in whole or in part) from and secured by lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien on and pledge of such Net Revenues securing the payment of the Previously Issued Certificates and the Certificates. SECTION 18: Application of Prior Lien Obligations Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System, and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in the ordinances authorizing the issuance of the Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders of the Prior Lien Obligations. Notwithstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract with respect to the pledge of revenues herein made for the payment and security of the Certificates. SECTION 19: Mutilated - Destroyed - Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may 45889344.1/10613025 18 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Certificates. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Certificates. SECTION 20: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and the Net Revenues of the System (to the extent such pledge of Net Revenues shall not have been discharged or terminated by prior payment of principal of or interest on the Certificates) and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Certificates or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certificates or the principal amount(s)thereof at maturity or the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which 45889344.1/10613025 19 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Certificates such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 21: Ordinance a Contract-Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City while any Certificates remain Outstanding except as permitted in this Section and in Section 36 hereof. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Certificates then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2)give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 22: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section, the following terms have the following meanings: "Closing Date" means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date"has the meaning set forth in Section 1.148-1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Certificates. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purposes of the Certificates. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations. 45889344.1/10613025 20 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Certificate to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Certificate, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Certificates: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Certificates, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Certificates or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or 45889344.1/10613025 21 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Certificates. (f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning of Section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in Section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Certificate is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in Section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Certificates until six years after the final Computation Date. (3) As additional consideration for the purchase of the Certificates by the Underwriters and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States from the construction fund, other appropriate fund, or if permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the Certificate Fund, the amount that when added to the future value of previous rebate payments made for the Certificates equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, 45889344.1/10613025 22 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs(2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter(and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Certificates not been relevant to either party. (j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem, City Manager, Finance Director and City Secretary, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. SECTION 23: Sale of Certificates - Official Statement Approval. The sale of the Certificates authorized by this Ordinance to Citigroup Global Markets, Inc. and Morgan Keegan & Company, Inc. (herein referred to as the "Underwriters") in accordance with the Purchase Contract, dated March 27, 2007, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor or Mayor Pro Tern is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and in regard to the approval and execution of the Purchase Contract,the Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Purchase Contract are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Official Statement by the Underwriters in connection with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale (together with such changes approved by the Mayor, Mayor Pro Tern, City Manager, Finance Director, or City Secretary, individually or collectively), shall be and is hereby in all respects approved, and the Underwriters are hereby authorized to use and distribute said final Official Statement, dated March 27, 2007, in the reoffering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Underwriters, and such final Official Statement in the form and content manually executed by 45889344.1/10613025 23 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Underwriters. SECTION 24: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest and premium, if any, received from the Underwriters, and the amount, if any, to be used to pay the costs of issuing the Certificates, shall be deposited in a fund maintained at a depository bank of the City. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in any authorized investments in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, as amended, including guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies and guidelines, and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. Accrued interest received from the Underwriters as well as any investment earnings remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. Any premium received from the Underwriters shall be deposited and applied in accordance with the applicable provisions of V.T.C.A., Government Code, Chapter 1201, as amended. Any surplus proceeds of sale may be deposited to the Certificate Fund. SECTION 25: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending the sale of the Certificates, the investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Certificates, and shall take and have charge and control of the Initial Certificate(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Underwriters. Furthermore, the Mayor, Mayor Pro Tern, City Secretary, Finance Director and City Manager, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General and their registration by the Comptroller of Public Accounts. In addition, such officials, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed to make the necessary arrangements for the delivery of the Initial Certificate(s) to the Underwriters and the initial exchange thereof for definitive Certificates. SECTION 26: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 45889344.1/10613025 24 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation SECTION 27: Cancellation. All Certificates surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 28: Bond Counsel's Opinion. The Underwriters' obligation to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Certificates. An executed counterpart of said opinion shall accompany the global certificates deposited with The Depository Trust Company or a reproduction thereof shall be printed on the definitive Certificates in the event the book entry only system shall be discontinued. SECTION 29: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 30: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is intended to be and shall be for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 31: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 32: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 33: Effect of Headings. The Section headings herein are for convenience of reference only and shall not affect the construction hereof. SECTION 34: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 35: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. 45889344.1/10613025 25 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation SECTION 36: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2007) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 23 of this Ordinance, being the information described in Exhibit C hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report, when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB)that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults. 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates; 45889344.1/10613025 26 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation 7. Modifications to rights of holders of the Certificates; 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Certificates; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Certificate calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. Notwithstanding anything herein to the contrary, the provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted underwriters to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount 45889344.1/10613025 27 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Certificates consent to such amendment or(b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Certificates. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 37: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 38: Effective Date. This Ordinance shall take effect and be in full force from and after its adoption on the date shown below in accordance with V.T.C.A., Government Code, Section 1201.028. [remainder of page left blank intentionally] 45889344.1/10613025 28 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation PASSED AND ADOPTED, this March 27, 2007. CITY OF WYLIE, TEXAS Mayor ATTEST: City Secretary (City Seal) Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation 45889344.1/10613025 S-1 EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation 45889344.1/10613025 A-1 EXHIBIT B PURCHASE CONTRACT Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation 45889344.1/10613025 B-1 Exhibit C DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA The following information is referred to in Section 36 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B for the most recently concluded fiscal year. 2. The information in the Official Statement contained in Tables 1 through 6 and 8 through 15. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above 45889344.1 /10613025 C-1 Ordinance No.2007-09 Combination Tax and Revenue Certifications of Obligation ;IV:ENe General Obligation Refunding Bonds,Series 2007 Combination Tax and Revenue Certificates of Obligation,Series 2007 Feb-07 Mar-07 Apr-07 May-07 SMTWTFS SMTWTFS SMTWTFS SMTWTFS 1 1 2 3 1 2 3 1 2 3 4 5 6 1 7 1 1 2 3 4 i 5 4 5 6 7 8 9 10 4 ! 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 19 10 111 12 i II 12 13 14 15 16 17 111 12 13114 15 16 17 15 16 17 18 19 20f 21 13 14 151 16 17 181 19 18 19 20 21 22 23 24 18' 19 201 21 22 23 24 22 23 24 25 26 27i 28 20 21 221 23 24 251 26 25 26 27 28 1 25 26 27 28 29 30 31 29 30 27 28 29 1 30 31 1 I Complete By Day Event 14-Feb-07 Wednesday Begin preparation of Official Statemen 21-Feb-07 Wednesday Initial Draft of Official Statement distributed to City and t Bond Counsel for reviev 27-Feb-07 Tuesday Council passes resolution authorizing Notice of Intent Publication for Certificates of Obligation 7-Mar-07 Wednesday Receive Official Statement information from City TBD First Publication of Notice of Intent to Issue Certificate no later than March 10,2007 8-Mar-07 Thursday Provide draft of Preliminary Official Statement to credit rating agencies and insurance companies for review TBD Second Publication of Notice of Intent to Issue Certificates (same day of the week following 1st publication) 16-Mar-07 Friday Finalize Preliminary Official Statement Distribute Preliminary Official Statement electronically through i-Deal Prospectus to Underwriters 21-Mar-07 Wednesday Receive credit ratings and insurance bids 26-Mar-07 Monday Pricing and verbal award to Underwriters 27-Mar-07 Tuesday City Adopts Ordinances and Awards Bonds and Certificates to Underwriters 2-Apr-07 Monday Prepare and distribute Final Official Statement 9-May-07 Wednesday Closing and delivery of funds First Southwest Company Preliminary $7,680,000 City of Wylie, Texas Combination Tax&Revenue Certificates of Obligation, Series 2007 Sources & Uses Dated 03/15/2007 l Delivered 05/01/2007 Sources Of Funds Par Amount of Bonds $7,680,000.00 Reoffering Premium 27,397.10 Accrued Interest from 03/15/2007 to05/01/2007 41,129.11 Total Sources $7,748,526.21 Uses Of Funds Original Issue Discount(OID) 31,132.15 Total Underwriter's Discount(0.750%) 57,600.00 Costs of Issuance 75,000.00 Gross Bond Insurance Premium(35.0 bp) 40,603 04 Deposit to Debt Service Fund 41,129.11 Deposit to Project Construction Fund 7,500,000.00 Rounding Amount 3,061.91 Total Uses $7,748,526.21 Pricing Files-2007 I CO 2007$7.5Million proce I 3/19/2007 I 3:48 PM First Southwest Company Public Finance Department Page 1 Preliminary $7,680,000 City of Wylie, Texas Combination Tax& Revenue Certificates of Obligation, Series 2007 Debt Service Schedule Part 1 of 2 Date Principal Coupon Interest Total P+I Fiscal Total 05/01/2007 - - - - - 02/15/2008 125,000.00 4.000% 295,056.67 420,056.67 - 08/15/2008 - - 158,440.00 158,440.00 - 09/30/2008 - - - - 578,496.67 02/15/2009 270,000.00 4.000% 158,440.00 428,440.00 - 08/15/2009 - - 153,040.00 153,040.00 - 09/30/2009 - - - - 581,480.00 02/15/2010 280,000.00 4.000% 153,040.00 433,040.00 - 08/15/2010 - - 147,440.00 147,440.00 - 09/30/2010 - - - - 580,480.00 02/15/2011 290,000.00 4.000% 147,440.00 437,440.00 - 08/15/2011 - - 141,640.00 141,640.00 - 09/30/2011 - - - - 579,080.00 02/15/2012 305,000.00 4.000% 141,640.00 446,640.00 - 08/15/2012 - - 135,540.00 135,540.00 - 09/30/2012 - - - 582,180.00 02/15/2013 315,000.00 4.000% 135,540.00 450,540.00 - 08/15/2013 - - 129,240.00 129,240.00 - 09/30/2013 - - - - 579,780.00 02/15/2014 330,000.00 4.000% 129,240.00 459,240.00 - 08/15/2014 - - 122,640.00 122,640.00 - 09/30/2014 - • - - 581,880.00 02/15/2015 340,000.00 4.000% 122,640.00 462,640.00 - 08/15/2015 - - 115,840.00 115,840.00 - 09/30/2015 - - - - 578,480.00 02/15/2016 355,000.00 4.000% 115,840.00 470,840.00 - 08/15/2016 - - 108,740.00 108,740.00 - 09/30/2016 - - - - 579,580.00 02/15/2017 370,000.00 4.000% 108,740.00 478,740.00 - 08/15/2017 - - 101,340.00 101,340.00 - 09/30/2017 - 580,080.00 02/15/2018 385,000.00 4.100% 101,340.00 486,340.00 - 08/15/2018 - - 93,447.50 93,447.50 - 09/30/2018 - - - - 579,787.50 02/15/2019 400,000.00 4.150% 93,447.50 493,447.50 - 08/15/2019 85,147.50 85,147.50 - 09/30/2019 - - - - 578,595.00 02/15/2020 420,000.00 4.250% 85,147.50 505,147.50 - 08/15/2020 - - 76,222.50 76,222.50 - 09/30/2020 - - - - 581,370.00 02/15/2021 435,000.00 4.250% 76,222.50 511,222.50 - 08/15/2021 - - 66,978.75 66,978.75 - 09/30/2021 - - - - 578,201.25 Pricing Files-2007 I CO 2007$7.5Million prose 1 3/19/2007 I 3:48 PM First Southwest Company Public Finance Department Page 2 Preliminary $7,680,000 City of Wylie,Texas Combination Tax& Revenue Certificates of Obligation, Series 2007 Debt Service Schedule Part 2 of 2 Date Principal Coupon Interest Total P+I Fiscal Total 02/15/2022 455,000.00 4.250% 66,978.75 521,978.75 - 08/15/2022 - - 57,310.00 57,310.00 - 09/30/2022 - - 579,288.75 02/15/2023 475,000.00 4.400% 57,310.00 532,310.00 - 08/15/2023 - - 46,860.00 46,860.00 - 09/30/2023 - - - - 579,170.00 02/15/2024 495,000.00 4.400% 46,860.00 541,860.00 - 08/15/2024 - - 35,970.00 35 970.00 - 09/30/2024 - - - - 577,830.00 02/15/2025 520,000.00 4.400% 35,970.00 555,970.00 - 08/15/2025 - - 24,530.00 24,530.00 - 09/30/2025 - - - - 580,500.00 02/15/2026 545,000.00 4.400% 24,530.00 569,530.00 - 08/15/2026 - - 12,540.00 12,540.00 - 09/30/2026 - - - - 582,070.00 02/15/2027 570,000.00 4.400% 12,540.00 582,540.00 - 09/30/2027 - - - - 582,540.00 Total $7,680,000.00 - $3,920,869.17 $11,600$69.17 - Yield Statistics Accrued Interest from 03/15/2007 to05/01/2007 41,129.11 Bond Year Dollars $91,905.00 Average Life 11.967 Years Average Coupon 4.2662197% Net Interest Cost(NIC) 4.3329571% True Interest Cost(TIC) 4.3392366% Bond Yield for Arbitrage Purposes 4.2173789% All Inclusive Cost(AIC) 4.5141159% IRS Form 8038 Net Interest Cost 4.2426412% Weighted Average Maturity 11.924 Years Pricing Files-2007 I CO 2007$7.5MilUon proce I 3/19/2007 I 3:48 PM First Southwest Company Public Finance Department Page 3 BIRKHOFF, HENDRICKS & CONWAY, L.L.P. CONSULTING ENGINEERS 7502 Greenville Ave.,#220 Dallas,Texas 75231 Fax(214)361-0204 Phone(214)361-7900 MEMORANDUM To: Chris Hoisted,P.E. From: Joe R. Carter,P.E. Sent via Email Date: Revised February 22,2007 Subject: Water Distribution System 5-Year Capital Improvement Plan At your request, we reviewed the Water Distribution System 5-Year Capital Improvement Plan as outlined by the City of Wylie Agenda Report dated November 14, 2006. We met with you and Mike Sferra yesterday to discuss the 5-Year Capital Improvements Plan and how funds should be allocated. The budget costs listed in the Agenda Report were based on information contained in the Impact Fee Report. Since the time of that report we have begun detailed design on several elements in the Water Distribution System Capital Improvement Plan and we have better information for more precise opinions of construction cost. Based on the results of our meeting we recommend the following projects to be included in the Water Distribution System 5-Year Capital Improvements Plan: 730 Service Area(High Pressure Service Area) Project Budget Cost Newport Harbor 2.0 MG Ground Storage Tank $1,700,000 Newport Harbor Pump Station Improvements(1 pump) $ 160,000 Newport Harbor(FM 1378)Water Distribution Line No. 1 $1,400,000 McCreary Road Water Distribution Line $ 990,000 Total High Pressure Service Area $4,250,000 679 Service Area (Low Pressure Service Area) Project Budget Cost Nortex 1.5 MG Ground Storage Tank $1,275,000 Nortex Pump Station Improvements(1 pump) $ 150,000 SH 78 Distribution Line No. 1 (NTMWD to Eubanks) $ 540,000 Brown Street Distribution Line $ 300,000 *NTMWD Pump Station Improvements $ 985,000 Total Low Pressure Service Area $3,250,000 j:klwicdbryliel.4090 mural ur\l04.ntmwd pump nu water modeNettenWyrip-memo(2).doc Page 1 of 2 City of Wylie 2/22/2007 Water Distribution System 5-Year Capital Improvement Plan Page 2 of 2 *Important Note The "NTMWD Pump Station Improvements" budget amount of $985,000 is the approximate construction cost for the originally planned first phase of improvements to the NTMWD Pump Station. Increasing the pumping capacity at NTMWD or building a new pumping facility is essential to be able to serve any heavy industrial type of demand along State Highway 78 over the next five years. The improvements included in the stated budget amounts will allow for some light industrial or commercial development along State Highway 78 over the next five years without completing the NTMWD Pump Station Improvements. During our second meeting with the NTMWD regarding the proposed pump station improvements they informed us that an air gap must be provided. That requirement more than doubles the probable cost of the pump station improvements(adding $1.2M to $1.3M). The NTMWD has indicated that it is unlikely they will pay for construction of the additional pump station and related facilities necessary to provide an air gap but this is not known for certain until a formal request is made. The remainder of the SH 78 Distribution Line is also required to provide sufficient water for Heavy 1 Industrial demands along State Highway 78 and the approximate construction cost of the portion of that project not included in the 5-Year CIP is $1,320,000. If the NTMWD will not participate in the cost of improvements at the current NTMWD Pump Station site and the Brown Street Pump Station option is selected the approximate construction cost of the first phase of improvements is $3,900,000 requiring $2,915,000 more than is included in this bond proposal. cc: Mike Sferra Mindy Manson Larry Williamson j:kJaicaAwylie\I-4090 savic 04-ntmwd pun,na water modeNaterAla5 mip-mana(2).doc Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: March 27, 2007 Item Number: 4 Department: Finance (City Secretary's Use Only) Prepared By: Larry Williamson Account Code: Date Prepared: March 19, 2007 Budgeted Amount: Ordinance, Timetable , Exhibits: Number Runs Subject Consider, and act upon, all matters incident and related to the issuance and sale of "City of Wylie, Texas, General Obligation Refunding Bonds, series 2007", including the adoption of Ordinance No. 2007-10 authorizing the issuance of such bonds and providing for the redemption of the obligations being refunded. Recommendation Motion to approve all matters incident and related to the issuance and sale of"City of Wylie, Texas, General Obligation Refunding Bonds, series 2007", including the adoption of Ordinance no. 2007-10 authorizing the issuance of such bonds and providing for the redemption of the obligations being refunded. Discussion First Southwest Company submitted a proposal to refund a portion of the City's General Obligations Bonds, series 1997, series 1999, and series 2000. The purpose of the refunding is to lower the debt service payments made by the City. This is accomplished by refinancing(refunding)the old debt with new debt at a lower interest rate. Preliminary numbers project the savings at 3.704% net present value benefit or $175,758.34 in today's dollars. Approved By Initial Date Department Director LW 3/19/07 City Manager lf�rn Page 1 of 1 ORDINANCE NO. 2007-10 AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF WYLIE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007"; SPECIFYING THE TERMS AND FEATURES OF SAID BONDS; LEVYING A CONTINUING DIRECT ANNUAL AD VALOREM TAX FOR THE PAYMENT OF SAID BONDS; PROVIDING FOR THE REDEMPTION OF CERTAIN OUTSTANDING OBLIGATIONS OF THE CITY; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE ISSUANCE, SALE, PAYMENT AND DELIVERY OF SAID BONDS, INCLUDING THE APPROVAL AND EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT, A PURCHASE CONTRACT AND A SPECIAL ESCROW AGREEMENT AND THE APPROVAL AND DISTRIBUTION OF AN OFFICIAL STATEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Wylie, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding obligations totaling in original principal amount $4,745,000 of the following issues or series (hereinafter collectively called the "Refunded Obligations"), to wit: (1) City of Wylie, Texas, General Obligation Bonds, Series 1997, dated January 1, 2007, scheduled to mature on February 15 in each of the years 2008 through 2014 and 2017, and aggregating in principal amount of$1,790,000 (the "Series 1997 Refunded Bonds"); (2) City of Wylie, Texas, General Obligation Bonds, Series 1999, dated September 1, 1999, scheduled to mature on February 15 in each of the years 2011 through 2019, and aggregati ng in principal amount of$1,870,000 (the "Series 1999 Refunded Bonds"); and (3) City of Wylie, Texas, General Obligation Bonds, Series 2000, dated August 15, 2000, scheduled to mature on February 15 in each of the years 2013 through 2018 and 2020, and aggregating in principal amount of$1,085,000 (the"Series 2000 Refunded B onds"); and, WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Refunded Obligations, or other authorized depository, and such deposit, when made in accordance with said statute, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; and WHEREAS, the City Council hereby finds and determines that the Refunded Obligations should be refunded at this time, and such refunding will result in the City saving approximately $ in debt service payments on such indebtedness and further provide present value savings of approximately $ . NOW,THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: SECTION 1: Authorization— Designation - Principal Amount - Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $ to be designated and bear the title "CITY OF WYLIE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2007" (hereinafter referred to 45889459.1 /10613025 Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 as the "Bonds"), for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, in accordance with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1207. SECTION 2: Fully Reaistered Obligations- Bond Date -Authorized Denominations-Stated Maturities-Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated March 15, 2007 (the "Bond Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable semiannually on February 15 in each of the years and in principal amounts (the "Stated Maturities") in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate(s) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s) per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Bonds shall be payable on February 15 and August 15 in each year, commencing August 15, 2007. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of The Bank of New York Trust Company, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent/ Registrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 2 Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a commercial bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/ Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities on and after February 15, 2018, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2017 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 3 shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption, and has been called for redemption, and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration - Transfer - Exchange of Bonds-Predecessor Bonds. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond (other than the Initial Bond(s) referenced in Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds(other than the Initial Bond(s) referenced in Section 8 hereof) may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 4 surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered, and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system provided by The Depository Trust Company (DTC), a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository Agreement"). Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the`Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Bonds, the City covenants and agrees with the Holders of Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 5 the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9(c), manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9(d), manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered, and delivered. SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the aggregate principal amount of the Bonds with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or(ii)as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. (a) Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 6 Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. (b) Form of Definitive Bond. REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF WYLIE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2007 Bond Date: Interest Rate: Stated Maturity CUSIP NO: March 15, 2007 Registered Owner: Principal Amount: The City of Wylie (hereinafter referred to as the "City"), a body corporate and political subdivision in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the interest payment date next preceding the "Registration Date" of this Bond appearing below (unless this Bond bears a "Registration Date"as of an interest payment date, in which case it shall bear interest from such date, or unless the "Registration Date" of this Bond is prior to the initial interest payment date in which case it shall bear interest from the Bond Date) at the per annum rate of interest specified above computed on the basis of a 360 day year of twelve 30 day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 2007. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 7 or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $ (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on and after February 15, 2018, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2017, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 8 The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 9 or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF WYLIE, TEXAS Mayor COUNTERSIGNED: City Secretary (SEAL) (c) Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bond(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER ) OF PUBLIC ACCOUNTS ) REGISTER NO. THE STATE OF TEXAS ) I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this . Comptroller of Public Accounts of the State of Texas (SEAL) Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 10 (d) Form of Certificate of Paving Agent/Registrar to appear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Dallas, Texas is the"Designated Payment/Transfer Office"for this Bond. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas, as Paying Agent/Registrar Registration date: By Authorized Signature (e) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee): (Social Security or other identifying number ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this assignment must correspond with the Signature guaranteed: name of the registered owner as it appears on the face of the within Bond in every particular. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 11 (f) The Initial Bond(s) shall be in the form set forth in paragraph (b) of this Section, except that the form of the single fully registered Initial Bond shall be modified as follows: REGISTERED REGISTERED NO. T-1 $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF WYLIE, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2007 Bond Date: March 15, 2007 Registered Owner: Principal Amount: The City of Wylie (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: STATED PRINCIPAL INTEREST MATURITY INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof). (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid principal installments hereof from the interest payment date next preceding the "Registration Date" of this Bond appearing below (unless this Bond bears a "Registration Date"as of an interest payment date, in which case it shall bear interest from such date, or unless the "Registration Date" of this Bond is prior to the initial interest payment date in which case it shall bear interest from the Bond Date) at the per annum rates of interest specified above computed on the basis of a 360 day year of twelve 30 day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 2007. Principal installments of this Bond are payable on the Stated Maturity dates or on a prepayment date to the registered owner hereof by The Bank of New York Trust Company, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon its presentation and surrender, at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 12 close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their payment at maturity or redemption or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2007 Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. The Mayor, Mayor Pro Tern, City Manager, Finance Director and City Secretary of the City, individually or jointly, are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. PROVIDED, however, in regard to the payments to become due on the Bonds on August 15, 2007, sufficient current funds will be available and are hereby appropriated to make such payments; and proper officials of the City are hereby authorized and directed to transfer and deposit in the Interest and Sinking Fund such current funds which, together with the accrued interest received from the initial purchasers, will be sufficient to pay the payments on the Bonds on August 15, 2007. SECTION 11: Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 13 execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 14 The term "Government Securities" shall mean (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. SECTION 13: Ordinance a Contract- Amendments - Outstanding Bonds. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section and in Section 29 hereof. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1)extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding"when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section 14, the following terms have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 15 "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of(1) any Investment has the meaning set forth in Section 1.148- 5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Obligations), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 16 than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations), other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 17 to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States out of the Interest and Sinking Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs(2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter(and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148 3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. 0) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem City Manager, Finance Director and City Secretary, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 18 (k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (I) Current Refunding of Series 1997 Refunded Bonds. The Bonds are a current refunding of the Series 1997 Refunded Bonds in that the Bonds will be issued less than 90 days before the redemption of the Series 1997 Refunded Bonds. (m) Qualified Advance Refunding of Series 1999 and Series 2000 Refunded Bonds. With respect to the Series 1999 Refunded Bonds and the Series 2000 Refunded Bonds (the "Advance Refunded Obligations"), the Bonds will be issued more than 90 days before the redemption of the such Advance Refunded Obligations. The City represents as follows: (1) The Bonds are the first advance refunding of the Advance Refunded Obligations, within the meaning of section 149(d)(3) of the Code. (2) The Advance Refunded Obligations are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. (3) The initial temporary period under section 148(c) of the Code will end: (i)with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds; and (ii) with respect to proceeds of the Advance Refunded Obligations on the Closing Date if not ended prior thereto. (4) On and after the date of issue of the Bonds, no proceeds of the Advance Refunded Obligations will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such respective series of refunded obligations. (5) The Bonds are being issued for the purposes stated in the preamble of this Ordinance. There is a present value savings associated with the refunding. In the issuance of the Bonds the City has neither: (i) overburdened the tax-exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device"within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material financial advantage based on arbitrage, within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. SECTION 15: Sale of Bonds - Official Statement Approval. The Bonds authorized by this Ordinance are hereby sold by the City to Citigroup Global Markets, Inc. and Morgan Keegan & Company, Inc. (herein referred to as the "Underwriters") in accordance with the Bond Purchase Agreement, dated March 27, 2007, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Bond Purchase Agreement for and on behalf of the City and as the act and deed of this City Council, and in regard to the approval and execution of the Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 19 Bond Purchase Agreement, the City Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Bond Purchase Agreement are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Preliminary Official Statement by the Underwriters in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale (together with such changes approved by the Mayor, City Secretary, City Manager, and Finance Director, one or more of said officials), shall be and is hereby in all respects approved and the Underwriters are hereby authorized to use and distribute said final Official Statement, dated March 27, 2007, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Underwriters, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Underwriters. SECTION 16: Special Escrow Agreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and The Bank of New York Trust Company, N.A., Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content, and such Agreement in substantially the form and substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of the City and as the act and deed of this City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the escrowed securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Underwriters for deposit to the credit of the "SPECIAL 2007 CITY OF WYLIE, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1207, as amended, this Ordinance and the Agreement. SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Underwriters. Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager, and Finance Director, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure, and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Underwriters, and, together with the City's Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 20 financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Underwriters and the initial exchange thereof for definitive Bonds. SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale in the sum of (i) $ shall be deposited to the credit of the Escrow Fund and (ii) $ shall be deposited to the credit of the Interest and Sinking Fund. The balance of the proceeds of sale of the Bonds shall be expended to pay costs of issuance and municipal bond insurance premium and any excess amount budgeted for such purpose shall be deposited to the credit of the Interest and Sinking Fund. Additionally, on or immediately prior to the date of the delivery of the Bonds to the Purchasers, the Finance Director shall cause to be transferred in immediately available funds to the Escrow Agent from moneys on deposit in the interest and sinking funds maintained for the payment of the Refunded Obligations the sum of$ to accomplish the refunding. SECTION 19: Redemption of Refunded Obligations. (a) The bonds of that series known as "City of Wylie, Texas, General Obligation Bonds, Series 1997", dated January 1, 1997, maturing in the years 2008 through 2014 and 2017, and aggregating in principal amount $1,790,000, shall be redeemed and the same are hereby called for redemption on June 1, 2007, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Texas Commerce Bank, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this Ordinance for all purposes. (b) The bonds of that series known as "City of Wylie, Texas, General Obligation Bonds, Series 1999", dated September 1, 1999, maturing in the years 2011 through 2019, and aggregating in principal amount$1,870,000, shall be redeemed and the same are hereby called for redemption on February 15, 2009, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of this Ordinance for all purposes. (c) The bonds of that series known as "City of Wylie, Texas, General Obligation Bonds, Series 2000", dated August 15, 2000, maturing in the years 2013 through 2018 and 2020, and aggregating in principal amount $1,085,000, shall be redeemed and the same are hereby called for redemption on February 15, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to The Chase Manhattan Bank), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 21 attached hereto as Exhibit F and incorporated herein by reference as a part of this Ordinance for all purposes. The redemption of the obligations described above being associated with the advance refunding of such obligations, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such obligations of the City's decision to redeem such obligations on the dates and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the obligations and this Ordinance. SECTION 20: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 21: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 22: Legal Opinion. The obligation of the Underwriters to accept delivery of the Bonds is subject to being furnished a final legal opinion of Fulbright & Jaworski L.L.P. approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart thereof shall accompany the global Bonds deposited with the Depository Trust Company. SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 22 SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 26: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 27: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 28: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 29: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2007) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 15 of this Ordinance, being the information described in Exhibit G hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit G hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 23 available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the audited financial statements, when and if audited financial statements become available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB)that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.. (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 24 UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. Notwithstanding anything to the contrary in this Ordinance, the provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 30: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 31: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 25 SECTION 32: Effective Date. This Ordinance shall take effect and be in full force from and after its adoption on the date shown below in accordance with V.T.C.A., Government Code, Section 1201.028. [remainder of page left blank intentionally] Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 26 PASSED AND ADOPTED, this March 27, 2007. CITY OF WYLIE, TEXAS Mayor ATTEST: City Secretary (City Seal) Ordinance No.g 2007-10 Ge 94591%cation a nding Bonds,Series 2007 S-1 EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 A l EXHIBIT B BOND PURCHASE AGREEMENT Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 B_ EXHIBIT C SPECIAL ESCROW AGREEMENT Ordinance No.2007-10 Gen General b1/1atioRefunding Re unding Bonds,Series 2007 C_ EXHIBIT D NOTICE OF REDEMPTION CITY OF WYLIE, TEXAS GENERAL OBLIGATION BONDS SERIES 1997 DATED JANUARY 1, 1997 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after February 15, 2008, and aggregating in principal amount $1,790,000 have been called for redemption on June 1, 2007 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2008 $135,000 2012 $170,000 2009 $145,000 2013 $180,000 2010 $150,000 2014 $195,000 2011 $160,000 2017 $655,000 ALL SUCH BONDS shall become due and payable on June 1, 2007, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Texas Commerce Bank, National Association) at its designated offices at the following addresses: First Class/ Registered/Certified Express Delivery/Courier By Hand Only JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. Institutional Trust Services Institutional Trust Services Room 234-North Building P. O. Box 2320 2001 Bryan Street, Institutional Trust Dallas, Texas 75221-2320 9th Floor Securities Window Dallas, Texas 75201 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Wylie, Texas. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 D-1 EXHIBIT E NOTICE OF REDEMPTION CITY OF WYLIE, TEXAS GENERAL OBLIGATION BONDS SERIES 1999 DATED SEPTEMBER 1, 1999 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after February 15, 2011, and aggregating in principal amount $1,870,000 have been called for redemption on February 15, 2009 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2011 $165,000 2016 $215,000 2012 $175,000 2017 $230,000 2013 $185,000 2018 $245,000 2014 $195,000 2019 $255,000 2015 $205,000 ALL SUCH BONDS shall become due and payable on February 15, 2009, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, N.A.) at its designated offices at the following addresses: First Class/ Registered/Certified Express Delivery/Courier By Hand Only JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. Institutional Trust Services Institutional Trust Services Room 234-North Building P. O. Box 2320 2001 Bryan Street, Institutional Trust Dallas, Texas 75221-2320 9th Floor Securities Window Dallas, Texas 75201 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Wylie, Texas. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 E-1 EXHIBIT F NOTICE OF REDEMPTION CITY OF WYLIE, TEXAS GENERAL OBLIGATION BONDS SERIES 2000 DATED AUGUST 15, 2000 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after February 15, 2013, and aggregating in principal amount $1,085,000 have been called for redemption on February 15, 2010 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2013 $110,000 2017 $140,000 2014 $115,000 2018 $145,000 2015 $125,000 2016 $130,000 2020 $320,000 ALL SUCH BONDS shall become due and payable on February 15, 2010, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender thereof to The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to The Chase Manhattan Bank) at its designated offices at the following addresses: First Class/ Registered/Certified Express Delivery/Courier By Hand Only JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. JPMorgan Chase Bank N.A. Institutional Trust Services Institutional Trust Services Room 234-North Building P. O. Box 2320 2001 Bryan Street, Institutional Trust Dallas, Texas 75221-2320 9th Floor Securities Window Dallas, Texas 75201 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of Wylie, Texas. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 F-1 Exhibit G to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 29 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B for the most recently concluded fiscal year. 2. The information contained in Tables 1 through 6 and 8 through 15 in the Official Statement. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above Ordinance No.2007-10 General Obligation Refunding Bonds,Series 2007 45889459.1/10613025 G-1 City of'Nylie General Obligation Refunding Bonds,Series 2007 Combination Tax and Revenue Certificates of Obligation,Series 2007 Feb-07 Mar-07 Apr-07 May-07 SMTWTFS SMTWTFS SMTWTFS SMTWTFS 1 2 3 2 j l 3 I 1 2 3 4 i 5 61 7 1 1 1 2 3 4 1 5 4 5 6 7 8 9 10 41 51 6 71 8 9 10 8 9 10 11 12 13114 6 7 8 9 10 11 12 t 11 12 13 14 15 16 17 11'12 13114 15 16 17 15 16 17 18119 20i21 13114 15,16 17 18119 18 19 20 211 22 23 24 18 19 20 21 j 22 23 24 22 23 24 251 26 271 28 20 21 221 23 24 251 26 25 26 27 281 25 26 27 28129 30 31 29 30 1 27 28 291 30 31 i I i Complete By Day Event 14-Feb-07 Wednesday Begin preparation of Official Statemen 21-Feb-07 Wednesday Initial Draft of Official Statement distributed to City and t, Bond Counsel for review 27-Feb-07 Tuesday Council passes resolution authorizing Notice of Intent Publication for Certificates of Obligation 7-Mar-07 Wednesday Receive Official Statement information from City TBD First Publication of Notice of Intent to Issue Certificate no later than March 10,2007 8-Mar-07 Thursday Provide draft of Preliminary Official Statement to credit rating agencies and insurance companies for review TBD Second Publication of Notice of Intent to Issue Certificates (same day of the week following 1st publication) 16-Mar-07 Friday Finalize Preliminary Official Statement Distribute Preliminary Official Statement electronically through i-Deal Prospectus to Underwriters 21-Mar-07 Wednesday Receive credit ratings and insurance bids 26-Mar-07 Monday Pricing and verbal award to Underwriters 27-Mar-07 Tuesday City Adopts Ordinances and Awards Bonds and Certificates to Underwriters 2-Apr-07 Monday Prepare and distribute Final Official Statement 9-May-07 Wednesday Closing and delivery of funds rm First Southwest Company Preliminary $4,890,000 City of Wylie,Texas General Obligation Refunding Bonds Series 2007 Debt Service Comparison Date Total P+I Existing D/S Net New D/S Old Net D/S Savings 09/30/2007 82,06354 23,830.00 80,727.39 80,727.39 (0.00) 09/30/2008 358,65250 260,830.00 619,482.50 642,432.51 22,950.01 09/30/2009 361,85250 263,125.00 624,977.50 647,603.14 22,625.64 09/30/2010 359,75250 261,125.00 620,877.50 643,043.77 22,166.27 09/30/2011 524,05250 102,625.00 626,677.50 647,292.52 20,615.02 09/30/2012 519,65250 107,625.00 627,277.50 654,938.14 27,660.64 09/30/2013 632,45250 - 632,452.50 656,026.26 23,573.76 09/30/2014 637,15250 - 637,152.50 660,458.76 23,306.26 09/30/2015 640,85250 - 640,852.50 663,028.13 22,175.63 09/30/2016 638,65250 - 638,652.50 663,823.75 25,171.25 09/30/2017 645,45250 - 645,452.50 667,823.75 22,371.25 09/30/2018 415,660A0 - 415,660.00 431,406.25 15,746.25 09/30/2019 409,57125 - 409,571.25 430,031.25 20,460.00 09/30/2020 153,18750 - 153,187.50 169,537.50 16,350.00 Total $6,379,007.29 $1,019,160.00 $7,373,001.14 $7,658,173.12 $285,17198 PV Analysis Summary(Net to Net) Gross PV Debt Service Savings 256,83951 Net PV Cashflow Savings® 4.353%(AIC) 256,83951 Accrued Interest Credit to Debt Service Fund 25,166.15 Transfers from Prior Issue Debt Service Fund (68,10824) Net Present Value Benefit $213,897.42 Net PV Benefit/ $4,745,000 Refunded Principal 4.508% Refunding Bond Information Refunding Dated Date 3/152007 Refunding Delivery Date 5/012007 Pricing Files-2007 I GO Refunding I 3/19/2007 I 3:47 PM First Southwest Company Public Finance Department Page 1 Preliminary $4,890,000 City of Wylie,Texas General Obligation Refunding Bonds Series 2007 Sources & Uses Dated 03/15/2007 I Delivered 05/01/2007 Sources Of Funds Par Amount of Bonds $4,890,000.00 Reoffering Premium 36,96620 Accrued Interest from 03/15/2007 to05/01/2007 25,166.15 Transfers from Prior Issue Debt Service Funds 68,10824 Total Sources $5,020,240.59 Uses Of Funds Or final Issue Discount(OID) 1,273.85 Total Underwriter's Discount (0.750%) 36,675.00 Costs of Issuance 70,000.00 Gross Bond Insurance Premium(35.0 bp) 22,32653 Deposit to Debt Service Fund 25 166.15 Depsit to Net Cash Escrow Fund 4,863579.39- Roundin Amount 1,219.67 Total Uses $5,020,240.59 Pricing Files-2007 I GO Refunding I 3/19/2007 I 3:47 PM First Southwest Company Public Finance Department Page 2 Preliminary $4,890,000 City of Wylie, Texas General Obligation Refunding Bonds Series 2007 Debt Service Schedule Part 1 of 2 Date Principal Coupon Interest Total P+I Fiscal Total 05/01/2007 - - - - - 08/15/2007 - - 82,06354 82,063.54 - 09/30/2007 - - - - 82,06354 02/15/2008 165,000.00 4.000% 98,47625 263,476.25 - 08/15/2008 - - 95,17625 95,176.25 - 09/30/2008 358,65250 02/15/2009 175,000.00 4.000% 95,17625 270,176.25 - 08/15/2009 - - 91,67625 91,676.25 - 09/30/2009 - - - - 361,85250 02/15/2010 180,000.00 4.000% 91,67625 271,676.25 - 08/15/2010 88,07625 88,076.25 - 09/30/2010 - - - - 359,75250 02/15/2011 355,000.00 4.000% 88,07625 443,076.25 - 08/15/2011 - - 80,97625 80,976.25 - 09/30/2011 - - - - 524,05250 02/15/2012 365,000.00 4.000% 80,97625 445,976.25 - 08/15/2012 - - 73,67625 73,676.25 - 09/30/2012 - - - - 519,65250 02/15/2013 495,000.00 4.000% 73,67625 568,676.25 - 08/15/2013 - - 63,77625 63,776.25 - 09/30/2013 - 632,45250 02/15/2014 520,000.00 4.000% 63,77625 583,776.25 - 08/15/2014 - - 53,37625 53,376.25 - 09/30/2014 - - - - 637,15250 02/15/2015 545,000.00 4.000% 53,37625 598,376.25 - 08/15/2015 42,47625 42,476.25 - 09/30/2015 - - - - 640,85250 02/15/2016 565,000.00 4.000% 42,47625 607,476.25 - 08/15/2016 - - 31,17625 31,176.25 - 09/30/2016 - - - - 638,65250 02/15/2017 595,000.00 4.000% 31,17625 626,176.25 - 08/15/2017 - - 19,27625 19,276.25 - 09/30/2017 - - - - 645,45250 02/15/2018 385,000.00 4.100% 19,27625 404,276.25 - 08/15/2018 - - 11,383.75 11,383.75 - 09/30/2018 - 415,66000 02/15/2019 395,000.00 4.150% 11,383.75 406,383.75 - 08/15/2019 - - 3,187.50 3,187.50 - 09/30/2019 - - - - 409,57125 02/15/2020 150,000.00 4.250% 3,18750 153,187.50 - 09/30/2020 - - - - 153,18750 Total $4,890,000.00 - $1,489,007.29 $6,379,007.29 - Pricing Files-2007 I GO Refunding I 3/19/2007 1 3:47 PM First Southwest Company Public Finance Department Page 3 Preliminary $4,890,000 City of Wylie, Texas General Obligation Refunding Bonds Series 2007 Debt Service Schedule Part 2 of 2 Yield Statistics Accrued Interest from 03/15/2007 to05/01/2007 25,166.15 Bond Year Dollars $36,197.67 Average Life 7.402 Years Average Coon 4.1135450% Net Interest Cost(NIC.) 4.1162596% True Interest Cost(TIC) 4.0447966% Bond Yield for Arbitrage Puip ses 4.2173789% All Inclusive Cost(AIC) 4.3527543% IRS Form 8038 Net Interest Cost 3.9215366% --------------- Weighted Average Maturity 7.393 Years Pricing Files-2007 I GO Refunding I 3/19/2007 1 3:47 PM First Southwest Company Public Finance Department Page 4 Preliminary $4,890,000 City of Wylie,Texas General Obligation Refunding Bonds Series 2007 Summary Of Bonds Refunded of Maturity Issue Maturity Type Bond Coupon Value Call Date Call Price Dated 8/15/1998 I Delivered 8/15/1998 gobds97 02/15/2008 Serial Coupon 5.050% 135,000 06/01/2007 100.000% gobds97 02/15/2009 Serial Coupon 5.125% 145,000 06/01/2007 100.000% gobds97 02/15/2010 Serial Coupon 5.125% 150,000 06/01/2007 100.000% gobds97 02/15/2011 Serial Coupon 5.250% 160,000 06/01/2007 100.000% pbds97 02/15/2012 Serial Cc. on 5.250% 170,000 06/01/2007 100.000% gobds97 02/15/2013 Serial Coupon 5.250% 180,000 06/01/2007 100.000% gobds97 02/15/2014 Serial Coupon 5.250% 195,000 06/01/2007 100.000% gobds97 02/15/2015 Serial Coupon 5.375% 205,000 06/01/2007 100.000% gobds97 02/15/2016 Serial Coupon 5.375% 220,000 06/01/2007 100.000% gobds97 02/15/2017 Serial Coupon 5.375% 230,000 06/01/2007 100.000% Subtotal - - $1,790,000 - - Dated 8/15/1998 I Delivered 8/15/1998 gobds99 02/15/2011 Serial Coupon 5.100% 165,000 02/15/2009 100.000% gobds99 02/15/2012 Serial Coupon 5.125% 175,000 02/15/2009 100.000% gobds99 02/15/2013 Serial Coupon 5.200% 185,000 02/15/2009 100.000% igobds99 02/15/2014 Serial Coupon 5.250% 195,000 02/15/2009 100.000% gobds99 02/15/2015 Serial Coupon 5.250% 205,000 02/15/2009 100.000% gobds99 02/15/2016 Serial Coupon 5.250% 215,000 02/15/2009 100.000% gobds99 02/15/2017 Serial Coupon 5.250% 230,000 02/15/2009 100.000% gobds99 02/15/2018 Serial Coupon 5.250% 245,000 02/15/2009 100.000% gobds99 02/15/2019 Serial Coupon 5.250% 255,000 02/15/2009 100.000% Subtotal - - $1,870,000 - - Dated 8/15/2000 I Delivered 9/26/2000 GO Bonds Series 2000 02/15/2013 Serial Coupon 5.100% 110,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2014 Serial Coupon 5.200% 115,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2015 Serial Coupon 5.300% 125,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2016 Serial Coupon 5.300% 130,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2017 Serial Coupon 5.400% 140,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2018 Serial Coupon 5.500% 145,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2019 Term 1 Coupon 5.500% 155,000 02/15/2010 100.000% GO Bonds Series 2000 02/15/2020 Term 1 Coupon 5.500% 165,000 02/15/2010 100.000% Subtotal - - $1,085,000 - - Total - - $4,745,000 - - Pricing Files-2007 I GO Refunding I 3/19/2007 I 3:47PM First Southwest Company Public Finance Department Page 5 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: March 27, 2007 Item Number: 5 Department: WEDC (City Secretary's Use Only) Prepared By: Sam Satterwhite Account Code: Date Prepared: March 13, 2007 Budgeted Amount: Exhibits: 2 Subject Consider, and act upon, acceptance of the resignation of Gary Bartow and appoint a new Board Member to the Wylie Economic Development Corporation to fill the unexpired term of July 2006 to June 30, 2009. Recommendation Motion to accept the resignation of Gary Bartow and appoint to the Wylie Economic Development Corporation Board of Directors to fill the unexpired term of July 2006 to June 30, 2009. Discussion As per section 4.01 Board of Directors of the First Amended Bylaws of the Wylie Economic Development Corporation, the business and affairs of the Corporation and all corporate powers shall be exercised by or under the authority of the Board of Directors, appointed by the governing body of the City of Wylie. Section 4.02 Number and Qualifications requires that each Director shall meet at least one (1) of the following: (a) serve, or have served, as Chief Executive Officer or a company; or (b) serve, or have served, in a position of executive management of a company; or (c) serve, or have served, in a professional capacity. In addition to the above qualifications: (1) each Director must have lived in the City limits or operated a business in the City limits for a minimum of one(1) year; and (2) each Director must live in the City limits during the tenure in office. Mr. Gary Bartow was appointed to a three (3) year term on the Wylie Economic Development Corporation in July 2006 with the term ending June 30, 2009. Mr. Bartow is moving out of the city limits and has resigned from the Board effective March 19, 2007. Being that there are several sensitive projects being considered by the WEDC, the Board would prefer to not face issues surrounding a split vote or lack of a quorum. Therefore, the Board respectfully requests that the Wylie City Council consider nominating a qualified individual to the WEDC Board of Directors at this time. Those that have completed board applications for consideration of appointment on the WEDC Board have been contacted and are willing to serve. Approved By Initial Date Department Director 3/13/07 City Manager V f l 3 13 (07 Page 1 of 1 Wylie Economic Development CORPORATION March 12, 2007 Mayor John Mondy City of Wylie 2000 Highway 78 North Wylie, Texas 75098 Dear Mayor: Effective March 19, 2007, Gary Bartow is resigning his position on the Board of Directors of the Wylie Economic Development Corporation (WEDC). While I am aware that the Wylie City Council will soon begin the process of interviewing citizens for placement on various Board and Commissions and swear-in those citizens in July, I am requesting special consideration to be made to expedite the nomination of a new Board member for the WEDC. Being that there are several sensitive projects currently being considered by the WEDC, I would prefer to not face issues surrounding a split vote or lack of a quorum. Therefore, I respectfully request that the Wylie City Council consider nominating a qualified individual to the WEDC Board of Directors at your March 27th or April 10th Council Meeting. Thank you for your consideration of this matter. If you have questions or comments, please contact me 214/908-5515. Regards, /3-frutitt.„. Marvin Fuller President cc: Mindy Manson, City Manager 108C W. Marble • Wylie, Texas 75098 Office: (972)442-7901 •Fax(972)429-0139 Serving The City of Wylie • Wylie Independent School District • Wylie Chamber of Commerce Wylie Economic Development CORPORATION March 6, 2007 Mr. Marvin Fuller President Wylie Economic Development Corporation 108-C West Marble Wylie, Texas 75098 Dear Marvin: It is with great regret that I must resign my position as Board Member of the Wylie Economic Development Corporation effective March 19, 2007. Due to personal circumstances and a new employment opportunity, I will be relocating to Michigan in the next several weeks. I am extremely proud of what we have accomplished as a team over the last three years and hope that I played a small role in that success. I am confident that with the Board's initiative and continued support of the City Council, the WEDC will reach new heights in its effort to bring new investment to Wylie. It has been a pleasure to serve with the WEDC Board of Directors as well as staff and wish you all the best in the future. Sincerely, Gary Bartow cc: Mitch Herzog John Yeager Merrill Young John Mandy Mindy Manson 108C W. Marble•Wylie,Texas 75098 Office: (972)442-7901 •Fax(972)429-0139 Serving The City of Wylie•Wylie Independent School District• Wylie Chamber of Commerce Board & Commission Application Spring 2006 Please return your completed application to the City Secretary's Office at 2000 Highway 78 North,Wylie,Texas 75098. Name: ( Ai5 S-e/ Please indicate your first, second and third preference below. Construction Code Board Planning&Zoning Board Library Board / Wylie Economic Development Corporation Board Parks&Recreation Board Zoning Board of Adjustments Animal Shelter Advisory Board Public Arts Advisory Board Yes, I would be interested in serving on subcommittees that may be formed. Personal Information Occupational Information Home Address: /1-//5-00411, AA s Oct LIE Business Owner? ❑Yes J No Telephone 51,7.6656 /_Fax: ��7 a)Z -Cs 9.? Business Name: Adams cX9 inee eh rrrec� E-mail: ri 5 �@ a,Ams-Enj r`aeeri't5.� Occupation: 1 V!1 ENC i k, •1 I have been a Wylie Resident for ,>� years Business Address: 705 Id,AVM. &£ Aa7 wed/0 Registered voter? , Yes ❑No Telephone: q7Z•ZOS•OSoc Fax: f7Z•zo 5-'0 5-So Have you ever or do you currently serve on any city boards? tiYes ❑ No If so, what board/city and dates? 174 q H� vises►- C.emi f/ec- Are you involved in any community activities? (Civic or Hobbies) No ❑ No Fig-6/Svwsr Cthitc i AArvn? S Please indicate briefly why you would like to be appointed to a Board or Commission: ffiqv .uvb0 iv 17t a�� ,414,f , S"yearS A,up /M ,ZUgt Try at it Gll/ie e- fi5 i& '. r Gdaer iv 4t) /,Ql /(T THAT is D/2 y ge/_A- > T 7 OAK of Tr4 DG ANo C4.v BF A E rr Ass--r ,tom '( n btgcricr-) T , DEu iAeLes A,Jz I am aware of the meeting dates and times of the board/commission I have applied and if appointed,I agree to serve on the Board/Commission which I have applied,or would consider an alternate appointment to a second or third service preference. 3 90 Signatu Date FOR OFFICE USE ONLY Date Application Received New Applicant?❑Yes❑No If no,applicant previously served on Board Via: ❑website Omail Din person❑referral❑newspaper Attended Applicant's Reception?❑Yes❑No (dates) Applicant Interview Scheduled: Appointment made to Term Expires ❑Statement&Oath Completed ONo appointment made at this time,retain application for one year. J Sly SPir)r) -he v= L . Gayle Walton From: Eric LeJeune [eric_lejeune@comcast.net] Sent: Sunday, July 16, 2006 9:04 PM r� To: City of Wylie Subject: Board Volunteer Form Information Follows: NAME - Eric LeJeune DATE OF APPLICATION - 7-16-06 FIRST_CHOICE - Public Arts Advisory Board SECOND CHOICE - Library Board THIRD_CHOICE - Wyle Economic Develoment Corp. Board SUBCOMMITTEE - Yes HOME_ADDRESS - 335 Crosscreek Dr HOME PHONE - 469-733-3539 HOME FAX - HOME_EMAIL - eric_lejeune@comcast.net RESIDENT_YEARS - 6 CONTACT_METHOD - Home Email REGISTERED_VOTER - Yes BUSINESS_OWNER - No BUSINESS_NAME - OCCUPATION - BUSINESS_ADDRESS - BUSINESS_PHONE - BUSINESS_FAX - BUSINESS EMAIL - WHY INTERESTED - I want to be more of a voice in my community. I have a 4 year old and I want Wylie to be a great place to grow up. I am very well diversed from business world(accounting and finance) to my new career-an elementary school teacher. I strongly believe in the arts and library services and I want to do my part. I have held many leadership roles and I am a great leader as well as a team player. My philosophy has always been that two heads are better than one. Thank you for your time and consideration for the Public Arts Advisory Board. Eric LeJeune Submit - Submit End of form information 1 Gayle Walton /6, From: Lymari Ames [scottlyri@verizon.net] Sent: Tuesday, May 16, 2006 9:16 PM To: City of Wylie Subject: Board Volunteer Form Information Follows: NAME - Lymari Ames DATE_OF APPLICATION - May 16, 2006 FIRST_CHOICE - Parks and Recreation Board SECOND_CHOICE - Wyle Economic Develoment Corp. Board THIRD_CHOICE - Library Board SUBCOMMITTEE - Yes HOME_ADDRESS - 1900 Three Fountains Dr. HOME_PHONE - 972-442-0858 HOME_FAX - HOME EMAIL - scottlyri@verizon.net RESIDENT_YEARS - 8 CONTACT_METHOD - Home Phone REGISTERED_VOTER - Yes BUSINESS_OWNER - No BUSINESS NAME - OCCUPATION - Program Manager BUSINESS_ADDRESS - 2240 Campbell Creek Boulevard Suite 110 BUSINESS PHONE - 972-852-4219 BUSINESS_FAX - BUSINESS_EMAIL - lames@naivini.com WHY_INTERESTED - Wylie' s small town character has grown over the last couple of years. I have experienced this growth during my 8 years living here. Throughout its growth, Wylie has maintained its charm through quality residential living with a healthy business atmosphere. With the recent approval of the bond package, Wylie has to opportunity to grow reserving what makes Wylie a great place to live, its people and appealing communities. It is for these reasons, it would be an honor to service on the Wylie Board. Submit - Submit End of form information 1 Gayle Walton From: Robert A. Wieneke [bobw.tx@verizon.net] ATTACHED IS A LETTER AND Sent: Tuesday, February 07, 2006 12:00 PM BIOGRAPHY FROM THE APPLICANT To: City of Wylie Subject: Board Volunteer Form Information Follows: NAME - Robert A. Wieneke DATE_OF_APPLICATION - 07 FEB 2006 FIRST_CHOICE - Wyle Economic Develoment Corp. Board SECOND_CHOICE - Wyle Economic Develoment Corp. Board THIRD_CHOICE - Wyle Economic Develoment Corp. Board SUBCOMMITTEE - Yes HOME ADDRESS - 204 Douglas Drive HOME PHONE - 972-429-0020 HOME_FAX - HOME EMAIL - bobw.tx@verizon.net RESIDENT_YEARS - 10 CONTACT_METHOD - Home Phone REGISTERED__VOTER - Yes BUSINESS_OWNER - No BUSINESS NAME - OCCUPATION Semi-retired and currently teaching (sub) in Wylie ISD BUSINESS ADDRESS - BUSINESS_PHONE - 214-236-4922 BUSINESS_FAX - BUSINESS EMAIL - WHY_INTERESTED - I have more than 30 years of business experience in high-tech, retail, small business, corporate and non-profit sectors; the most recent 20 years of that in the DFW Metroplex. Most of my career has focused on business development, but I 've also been involved in a few economic development projects as well. My background, contacts, and desire to serve my community should translate to solid performance as a member of the WEDC, and results for our city. I look forward to interviewing, and to this opportunity to serve the Wylie Economic Development Commission. Submit - Submit End of form information 1 Please attach this letter and biography to my application for Boards and Commissions, filed recently via the city's website, specifically for the Wylie EDC. March 1, 2006 TO: The members of the Wylie City Council,the board selection committee, EDC Executive Director Sam Satterwhite, and others who may have an interest in these proceedings: RE: Wylie Economic Development Commission, Application for Service I am pleased to present this letter, biography and application for appointment to the Wylie Economic Development Commission. Having lived in this city since 1995, I've watched, with pleasure,the accomplishments and well-planned growth fostered by your leadership. Now, I'd like to offer my services to support your continued efforts. My background is varied, as you will see in the attached biography, and I believe that could be a benefit to this organization. I have worked in, or helped build businesses in, a wide variety of geographic locations and in segments from retail to wholesale/distribution, from equipment manufacturing to the services industry, and from high-techs to non-profits. Such experience provides a unique perspective on business, and the process of attracting and growing companies. I have a strong background in marketing, public relations & sales that may be useful to you in the attraction phase, and a bent for creative solutions that bring people together and business deals to mutually satisfactory conclusions. Plus, 20 years living and working in the DFW Metroplex and another 15 in cities across the nation,translate to a fair number of contacts that might be useful in the quest to expand our business base. I look forward to discussing my service with you, at your convenience, and would be happy to provide a full resume, references, or other materials for your consideration. Thank you for this opportunity! Sin rely, `' tom` � _ Robert A. Wieneke 204 Douglas Drive Wylie, Texas 75098 H./O. : 972-429-0020 Cell : 214-236.4922 Email: bobw.tx@verizon.net Robert Wieneke Robert Wieneke is currently a substitute teacher in the Wylie ISD,managing an investment portfolio and helping a friend with a new business venture. Prior to 2005, as president of the Rockwall County Chamber of Commerce, he was responsible for all operations plus community&government affairs. He also led a major renovation of the Chamber's services and benefits, prompting double-digit growth, and tackled several projects supporting the attraction, growth and success of Rockwall County businesses. Prior to that,Bob was Vice President of Corporate Relations for Clearwire, a company using proprietary wireless technology,originally developed for the military,to deliver Broadband Internet service in areas where DSL and cable were unavailable. The company received $100 million in Wall Street funding to install systems across the U.S.,but the high-tech/telecom `meltdown' of 2001 brought those plans to a halt. (Remnants of the company were purchased in May 2004 by media mogul Craig McCaw.) Before Clearwire, Bob served seven years as development director of the Texas Council of the American Electronics Association,the nation's largest trade group for the high-tech industry. He previously held a marketing management position with American Airlines and served as Senior Vice President for Community Credit Union,with responsibility for marketing, IT,and human resources. Bob also held sales,marketing and product-management positions with Control Data Corp., a Fortune 100 computer manufacturer and data services provider. While there,he helped create and introduce two new IT systems, and was twice recognized as a"top 1 percent"performer among the company's 55,000 employees worldwide. Bob holds a degree in Journalism&Public Relations from the University of North Dakota,with a minor in German,plus a postgraduate minor in Russian from Syracuse University a certificate in Human Resources Management from Notre Dame. He served overseas as a linguist with the U.S. Air Force, and continues his service today as a Mission Pilot for Civil Air Patrol (CAP),the USAF Auxiliary. CAP performs search& rescue and disaster relief missions, and sponsors a Cadet Program for youth(12-21) to teach life skills and leadership. He was the commander of the Lakeshore Squadron from 1998-2004,during which four of his cadets were chosen for the prestigious International Air Cadet Exchange(LACE)and one received an appointment to the U.S.Naval Academy; both were `firsts' for the group. Bob and his wife,Margot,have lived in Wylie,Texas since 1995. She is a branch manager for Community Credit Union(now Viewpoint Bank),where she has served for 20 years. Ga le Walton •From: y Lee Han [jlhanks2OO5@verizon. et] Sent: Monday, May 01, 2006 11:31 AfV] To: City of Wylie :04 Subject: Board Volunteer '��II Yb Form Information Follows: NAME - Jimmy Lee Hanks DATE OF APPLICATION - May 1, 2005 FIRST_CHOICE - Wyle Economic Develoment Corp. Board SECOND CHOICE - Planning and Zoning Commission THIRD CHOICE - Construction Code Board SUBCOMMITTEE - Yes HOME ADDRESS - 902 Carlton Road HOME_PHONE - 972-429-5877 HOME_FAX - HOME_EMAIL - jlhanks2005@verizon.net RESIDENT_YEARS - 2 CONTACT METHOD - Home Phone REGISTERED_VOTER - Yes BUSINESS_OWNER - Yes BUSINESS NAME - Advocare OCCUPATION - Self employeed/student BUSINESS_ADDRESS 902 R CarltonRoad BUSINESS PHONE - 972-571-7714 BUSINESS_FAX - BUSINESS_EMAIL - jlhanks2005 @verizon.net WHY INTERESTED - I want to see Wylie grow in a postive way. I want to see our tax dollars spent on the right things and I want to help make the WEDC what is was meant to be. Submit - Submit End of form information 1 ..„ „TB oard & Commission Application Spring 2006 (41 Please return your completed application to the City Secretary's Office at 2000 Highway 78 North,Wylie,Texas 75098. Name: '.3-0+M-eS R‘ l. ,, Q A Please indicate your first, second and third preference below. Construction Code Board lanning&Zoning Board G b Library Board / Wylie Economic Development Corporation Board 1 Parks&Recreation Board Zoning Board of Adjustments 1 Animal Shelter Advisory Board Public Arts Advisory Board pYes, I would be interested in serving on subcommittees that may be formed. Personal Information Occupational Information Home Address: 3()/ Wa tz,v(,,, S 2 Business Owner? ❑Yes No Telephone: A tt 1—ri Fax: Business Name: E-mail: )cr ,0"u., /9ye E Yam` O' Gt14 Occupation: /I have been a Wylie Resident for , C years Business Address: Registered voter? BYes ❑No Telephone: Fax: Have you ever or do you currently serve on any city boards? 0 Yes ❑ No C If so, what board/city and dates? I IA?,py.,,;,,' , ocrn-;: ) I c cow,wt�4.c'(i wc) 0 Are you involved in any community activities? (Civic or Hobbies) 0 Yes ❑ No CkoLA,4tPtv oc CU leetA lekt e / C v" tot,vlA;,A ti A�4uLs:..sk. Please indicate jbriefly why you would like to be appointed to a Board or Commission: r W ou(1 t ((lie_ lie.. c lo`a -N-Vw1'1 k c.C u-e, tO 4 c-{2... -o t t C: \nn v ,aan1. 4 I am aware of the meeting dates and times of the board/commission I have applied and if appointed,I agree to serve on the Board/Commission which I have applied, would cons' er an alt mate appointment to a second or third service preference. gnature Date FOR OFFICE USE ONLY Date Application Received New Applicant?❑Yes❑No If no,applicant previously served on Board Via:❑website❑mail Din person❑referral❑newspaper Attended Applicant's Reception?❑Yes❑No (dates) Applicant Interview Scheduled: Appointment made to Term Expires ❑Statement&Oath Completed ❑No appointment made at this time,retain application for one year. WORK SESSION ATTACHMENT