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See “RATING! NEW ISSUE BOOK-ENTRY ONLY In the opinion of Co-Bond Counsel, interest on the Bonds i excludable ftom gross income for federal income tax purposes under ‘existing law and the Bonds are not private activity bonds. See "TAX EXEMPTION” fora discussion ofthe opinion of Co-Bond Counsel, {including a description of the alemative minimum tax consequences for corporations $48,240,000 Coastal Water Authority Contract Revenue Refunding Bonds, Series 1999 (City of Houston Projects) December 15, as shown ‘on the Inside Cover Page Dated: February 15, 1999 D Interest on the Coastal Water Authority Contract Revenue Refunding Bonds, Series 1999 (City of Houston Projects) (the “"Bonds"”) accrues from February 15, 1999, and is payable on June 15, 1999, and on each December 15 and June 15 thereafter until maturity or prior Fedemption, Principal ofthe Bonds willbe paid at maturity cr redemption ony upon presentation and surender of the Bonds a the principal Compornte trust office ofthe Paying AgenU Registra, initially Chase Bank of Texas, National Association. Proceeds ofthe Bonds willbe to refund all ofthe Coastal Water Authority Contact Revenue Bonds, Series 1995 (City of Houston Projects) (the "Refunded Bonds”), Which were issued to implement the Projects Conract (as described below), and to pay the costs of issuing the Bonds and refunding the Refunded Bonds ‘The Bonds are issued in fully registered form in the denomination of $5,000 principal amount or any integral mulple thereof and will ‘be registered in te name of Cede & Co, as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as secures depository for the Bonds until DTC resigns or is discharged. The Bonds willbe availble to purchasers only in book-enty form, Foras long as Cede & Cos the exclusive registered owner ofthe Bonds, the principal of and interest on the Bonds wil be payable by the Paying AgenURegistar 0 DTC, which will be responsible for making such payments to DTC Participants for subsequent remitance to owners of beneficial interest in the Bonds, Purchasers of the Bonds will ot receive certificates evidencing ther beneficial ownership therein, See “THE BONDS AND THE RESOLUTION — Book-Eniry Regisiation System." ‘The Bonds are special obligations of the Coastal Water Authority (ihe “ Authority") which, together with any addtional bonds and any Party Obligations (as described herein), are payable solely both a to principal and interest fom certain Pledged Revenues, which consist of the fllowing: (1) Debt Servic Payments to be made by the City of Houston, Texas (the “City” tothe Authority under a Projects Contact (the “Projects Contact") between the City and the Authority: (2) Bond Reserve Fund Payments to be made by the City into the Bond Reserve Fund to establish and maintain the Bond Reserve Fund Requirement in sch fund: and (3) any interest income earned on funds in ‘the Bond Fund or the Bond Reserve Fund (but specifically excluding interest income attributable to capitalized interest on the Bonds and lnterest income earned on funds inthe Rebate Fund). The Resolution (defined herein) pursuant o which the Bonds are issued provides that the Bond Reserve Fund Requirement may be satisfied in whole or in part with one or more Bond Reserve Fund Surety Policies (as defined in the Resolution). AC the time of te issuance ofthe Bonds, the Authority intends to acquire a Bond Reserve Fund Surety Policy issued by Financial Security Assurance, Inc. to satisfy the Bond Reserve Fund Requsement. Under the Projects Contract, the Authority is obligated to provide forthe Benefit of the City the financing and constuction of certain City Projects, and the City is unconditionally obligated to pay to the Paying AgenvRepistar, as an operations and maintenance expense fom the gross revenues ofthe City's water and wastewater sytem (as further defined herein the *"System), amounts necessary to pay the principal of and interest onthe Bonds. Such payments by the City tare on a party with the payment ofall olber operations and maintenance expenses of the System. See “SOURCE OF PAYMENT AND SECURITY FOR THE BONDS” and “THE CONTRACTS.” Holders of the Bonds shall never have the right to demand payment of the Bonds or Interest thereon out of any funds ralsed or to be raised by taxation or to have any clalm against any property or revenues ofthe City or the Authority except forthe specific revenues and funds herein described. ‘The Bonds are subject to redemption prior to maturity as described herein. See “THE BONDS AND THE RESOLUTION — Redemption Provisions." “The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to' Be issued concurently with the delivery of the Bonds by FINANCIAL SECURITY ASSURANCE, INC, MATURITY AND PRICING SCHEDULE — See Inside Cover Page The Bonds are offered by the Underwriters named below, when, as and if issued by the Authority and accepted by the Underwriters, subject tothe approving opinion ofthe Atorney General ofthe State of Texas andthe opinion of Vinson & Elkins LLLP., Houston, Texas and Willif & Hall, P.C, Houston, Texas, Co-Bond Couasel, as 10 the valdiy ofthe issuance ofthe Bonds under the Constitution and the laws of the State of Texas. Certain legal maiters willbe passed upon forthe Underwriters by Mayor. Day, Caldwell & Keeton, LLP. Houston, Texas and Law Ofices of Al Luna, Houston, Texas, Undererier's Co-Counsel. The Bonds, in book:entry form, are expected 10 be ‘available for delivery hrough DTC in New York, New York om oF about April 1, 1999 BEAR, STEARNS & Co. INC. JOHN NUVEEN & Co. INCORPORATED APEX Securities, Inc. Morgan Keegan & Company, Inc. ‘A Division of Rice Financial Products NationsBane Montgomery Securities, LLC Siebert Brandford Shank & Co., LLC February 24, 1999 Maturity Principal December 1) Amount 1999 $405,000 2000 420,000 2001 440,000 2002 455,000 2003 475,000 2004 490,000 2005 505,000 2006 1,025,000 2007 1,065,000 2008 1,110,000 2009 11,155,000 MATURITY AND PRICING SCHEDULE Principal Interest Bate or Price © December15) © Amount ‘Rate ‘$26,870,000 Serial Bonds Interest Yield Maturity 375% 3.00% 2010 375 320 201 375 340 2012 375 3.60 2013, 375 370 2014 400 3.80 Dos 400 3.90 2016 400 490 2017 410 410 2018 420 420 2019 430 430 440% 430 S125 5.125 5.00 Sus 475 5.00 5.00 5.00 21,370,000 5.00% Term Bonds due December 15, 2025 ~ Price 98.256 (plus accrued interest from February 15, 1999) 440% 430 400 470 430 438 495 5.00 5.04 507 COASTAL WATER AUTHORITY Board of Directors DionelE. Aviles... : ssn President Kurt F. Metyko sol Vioe President Baster E. French... 2" Vice President Dorothy M. L. Washington. on Seoretary-Treasurer Dei keg ve Diretor Gary R Nelson... _.Direstor E. Jeny Dietrich... Director Staff Ralph T Rundle... a sna Bxeoutive Director John 5 Baldwin Chief Financial Officer CITY OF HOUSTON, TEXAS Elected Officials Lee P. Brown, Mayor Sylvia R Garcia, City Controller City Coun Council Member, Council Member, District A. Bruce Tatro District Hoenn FOR Fraga Council Member, Council Member, District B Michael J. Yarroueh District John E, Castillo Council Member, Councit Member, At Large District C. Martha J. Wong Position 1 ‘Amnise D, Parker Council Member, Councit Member, At Large Distt De s-Jew Don Boney, 3 Postion? oe Council Member, q Comet ender At Lrse Distr En Rob Toda Position 3. Orlando Sanchez Council Member, : Count ender At Large District F.. Ray F. Driscoll pipet pre Council Member, : : Council Member, At Large ree ean Kelley Position 5 ..snenene CARO! G, Robinson Appointed Orica fee Albert E. Haines a "Anthony W. Hall, J. Dire, Deparment of Finance nd Adminisration —. ‘Jorge G. Cruz-Aedo Deputy City Controller Judy Gray Johnson City Secretary. ‘Ana Russel THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED ‘AS A RECOMMENDATION THEREOF, IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS QEFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL ‘The information set forth herein has been furnished by the Authority and the City and includes information ‘obtained from other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the Underwriters. The information and expressions of opinion. ‘contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale ‘made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the City or the other matters described herein since the date hereof. ‘This Official Statement includes descriptions and summaries of certain events, matters and documents, ‘Such descriptions and summaries do not purport to be complete and all such descriptions, summaries and references thereto are qualified in their entirety by reference to this Official Statement in its entirety and to each such document, copies of which may be obtained from the Authority or from the Financial Advisor to the Authority. Any statements made in this Official Statement or the appendices hereto involving matters of opinion or estimates, Whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation i ‘made that any of such opinions or estimates will be realized, ‘This Official Statement is delivered in connection with the sale of securities referred to herein and ‘may not be produced or used, in whole or in part, for any other purposes. ‘This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. No dealer, salesman or other person has been authorized by the Authority or the City to give any information or to make any representation other than those contained herein, and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority. or the City or any other person. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create the implication that there has been no change in the matters described herein since the date hereof. ‘The prices and other terms respecting the offering and sale of the Bonds may be changed from time to time by the Underwriters after the Bonds are released for sale, and the Bonds may be offered and sold at Prices other than the initial offering prices, including sales to dealers who may sell the Bonds into investment accounts. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE. BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.