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<br /> ) 51:) Sic(
<br /> OFFICIAL STATEMENT
<br /> Relating to
<br /> $15,955,000
<br /> CITY OF SAN MARCOS, TEXAS
<br /> ELECTRIC UTILITY SYSTEM
<br /> REVENUE REFUNDING BONDS, SERIES 1993
<br /> INTRODUCTION
<br /> -- This Official Statement, which includes the cover page and the Appendices hereto, provides certain information regarding the
<br /> issuance by the City of San Marcos, Texas (the "City"), of $15,955,000 City of San Marcos, Texas Electric Utility System
<br /> Revenue Refunding Bonds, Series 1993 (the "Bonds"). Capitalized terms used in this Official Statement have the same meanings
<br /> - assigned to such terms in the ordinance authorizing the issuance of the Bonds (the "Ordinance"), except as otherwise indicated
<br /> herein.
<br /> The City is a political subdivision and municipal corporation of the State of Texas (the "State"), duly organized and existing
<br /> under the laws of the State, including the City's Home Rule Charter. The Bonds are issued pursuant to the Constitution and
<br /> general laws of the State, particularly Article 717k, Vernon's Annotated Texas Civil Statutes ("V ATCS"), the City's Home Rule
<br /> Charter and the Ordinance.
<br /> There follows in this Official Statement descriptions of the Plan of Financing, the Bonds and certain information about the City,
<br /> the City's Electric Utility System (the "System") and the City's finances. All descriptions of documents contained herein are
<br /> only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be
<br /> obtained from the City's Financial Advisor, First Southwest Company, Austin and Dallas, Texas.
<br /> PLAN OF FINANCING
<br /> Purpose
<br /> Proceeds from the sale of the Bonds in the principal amount of $15,955,000 will be used to refund a portion of the City's
<br /> outstanding Series 1986 Electric Utility System Revenue Bonds (the "Refunded Bonds"), aggregating $13,845,000 in principal
<br /> amount. Proceeds from the sale will also be used to pay the cost of issuance related to the Bonds. See "Schedule I - Schedule
<br /> of Refunded Bonds", herein for a detailed listing of the Bonds to be refunded.
<br /> Refunded Bonds
<br /> The Refunded Bonds, and interest due thereon, are to be paid on the scheduled interest payment dates and the maturity or
<br /> redemption dates of such bonds from funds to be deposited with the Escrow Agent pursuant to a certain Escrow Agreement
<br /> between the City and the Escrow Agent (the "Escrow Agreement"), by Ameritrust Texas National Association, Austin, Texas
<br /> (the "Escrow Agent"), in an escrow account (the "Escrow Fund") and used to purchase direct obligations of the United States
<br /> of America (the "Federal Securities").
<br /> Under the Escrow Agreement the Escrow Fund is irrevocably pledgo¡:d to the payment of the principal of and interest on the
<br /> Refunded Bonds.
<br /> KPMG Peak Marwick, a nationally recognized accounting firm, will verify at the time of delivery of the Bonds to the initial
<br /> Underwriters the mathematical accuracy of the Financial Advisor's schedules that demonstrate the Federal Securities will mature
<br /> and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay,
<br /> when due, the principal of and interest on the Refunded Bonds. Such maturing principal of and interest on the Federal Securities
<br /> will not be available to pay the Bonds.
<br /> By the deposit of the Federal Securities with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected
<br /> the defeasance of the Refunded Bonds. It is the opinion of Bond Counsel that, as a result of such defeasance and in reliance
<br /> on such accountant's report, the Refunded Bonds will no longer be payable from ad valorem taxes but will be payable solely
<br /> from the principal of and interest on the Federal Securities and cash held for such purpose by the Escrow Agent, and that the
<br /> Refunded Bonds will be defeased and are not to be included in or considered to be indebtedness of the City for the purpose of
<br /> a limitation of indebtedness or for any other purpose.
<br /> The City has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund of any additional amounts
<br /> required to pay the principal of and interest on the Refunded Bonds if, for any reason, the cash balances on deposit or scheduled
<br /> to be on deposit in the Escrow Fund are insufficient to make such payment.
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