official statement dated march 11, 2010 ratings: moody’s ... · dated march 11, 2010 ratings:...

OFFICIAL STATEMENT Dated March 11, 2010 Ratings:

Moody’s: “Aa1” S&P: “AA+”See “Other Information - Ratings” herein

NEW ISSUE - Book-Entry-Only

In the opinion of Co-Bond Counsel, interest on the Tax-Exempt Series 2010A Bonds will be excludable from gross income for federal income tax purposes under existing law and the Tax-Exempt Series 2010A Bonds are not private activity bonds. See “Legal and Tax Matters - Tax Exemption of Tax-Exempt Series 2010A Bonds and Certificates” for a discussion of the opinion of Co-Bond Counsel, including a description of alternative minimum tax consequences for corporations. Interest on the Taxable Series 2010B Bonds is not excludable from gross income for federal income tax purposes. See “Legal and Tax Matters – Taxable Series 2010B Bonds” herein.

$281,995,000 CITY OF DALLAS, TEXAS

(Dallas, Denton, Collin and Rockwall Counties)

$196,615,000 GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS,

SERIES 2010A

$85,380,000 GENERAL OBLIGATION BONDS

TAXABLE SERIES 2010B (DIRECT SUBSIDY BUILD AMERICA BONDS)

Dated Date: Date of Delivery Due: February 15, as shown on inside cover

Interest on the $196,615,000 City of Dallas, Texas, General Obligation Refunding and Improvement Bonds, Series 2010A (the “Tax-Exempt Series 2010A Bonds”) and $85,380,000 City of Dallas, Texas General Obligation Bonds, Taxable Series 2010B (Direct Subsidy Build America Bonds) (the “Taxable Series 2010B Bonds,” and collectively with the Tax-Exempt Series 2010A Bonds, the “Bonds”) will accrue from the date of delivery and will be calculated on the basis of a 360-day year consisting of twelve 30 day months and will be payable February 15 and August 15 of each year commencing on February 15, 2011. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company (“DTC”) pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See “The Obligations - Book-Entry-Only System” herein. The initial Paying Agent/Registrar is U.S. Bank National Association (see “The Obligations - Paying Agent/Registrar”).

The Bonds are direct obligations of the City of Dallas, Texas (the “City”), payable from an ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City. The Bonds are being authorized pursuant to the general laws of the State of Texas, particularly Chapters 1331 and 1371 and in the case of the Tax-Exempt Series 2010A Bonds, Chapter 1207 of the Texas Government Code, as amended, an ordinance (the “Bond Ordinance”) passed by the City Council of the City, and the City Charter (see “The Obligations - Authority for Issuance”). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) authorizes the City to issue taxable obligations known as “Build America Bonds” to finance capital expenditures that could be financed with the issuance of tax-exempt bonds and to elect to receive a subsidy payment from the federal government equal to 35% of the amount of each interest payment on such taxable bonds. The City anticipates and reserves the right to sell and issue all of the Taxable Series 2010B Bonds as obligations that are not obligations described in section 103(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and the interest on which is not excludable from gross income for federal income tax purposes. The available subsidy for the Taxable Series 2010B Bonds would be paid to the City. No holders of Taxable Series 2010B Bonds are entitled to such payment or to receive a tax credit with respect to the Taxable Series 2010B Bonds. See “The Obligations – Designation of the Taxable Series 2010B Bonds as Qualified Build America Bonds.”

Proceeds from the sale of the Bonds will be used to (i) fund various permanent public improvements in the City, (ii) refund certain other general obligation bonds (the “Refunded Bonds”), and (iii) pay the costs of issuance of the Bonds.

CUSIP PREFIX: 235219

MATURITY SCHEDULE & 9 DIGIT CUSIPSee Schedule on Inside Cover

BofA MERRILL LYNCH RAMIREZ & CO., INC.

CITI J.P. MORGAN MORGAN KEEGAN & COMPANY, INC. RICE FINANCIAL PRODUCTS COMPANY

2

The Tax-Exempt Series 2010A Bonds are not subject to redemption prior to maturity. The City reserves the right, at its option, to redeem the Taxable Series 2010B Bonds in whole or in part on any date, at the redemption price described herein. In addition, the Taxable Series 2010B Bonds are subject to Extraordinary Redemption at the option of the City at the Extraordinary Redemption Price described herein.

The Bonds are offered for delivery when, as and if issued by the City and received by the Underwriters and subject to the approving opinion of the Attorney General of the State of Texas and the approving opinions of Vinson & Elkins L.L.P., Dallas, Texas and West & Associates L.L.P., Dallas, Texas, Co-Bond Counsel for the City (see Appendix C, “Form of Co-Bond Counsel Opinions”). Certain legal matters will be passed upon for the City by the Dallas City Attorney, and for the Underwriters by their co-counsel, Locke Lord Bissell & Liddell LLP, Dallas, Texas and Adorno Yoss White & Wiggins, LLP, Dallas, Texas.

It is expected that the Bonds will be available for delivery through DTC on or about March 30, 2010.

MATURITY SCHEDULE Cusip Prefix: 235219 (1)

$196,615,000 GENERAL OBLIGATION REFUNDING

AND IMPROVEMENT BONDSSERIES 2010A

(Interest to accrue from date of delivery)

$85,380,000 General Obligation Bonds

Taxable Series 2010B (Direct Subsidy Build America Bonds)

(Interest to accrue from date of delivery)

____________(1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by Standard and Poor’s CUSIP Service Bureau, a Division of the McGraw-Hill Companies, Inc. These data are not intended to create a database and do not serve in any way as a substitute for the CUSIP Services

Initial InitialMaturity Reoffering Cusip(1) Maturity Reoffering Cusip(1)

Amount (February 15) Rate Yield Suffix Amount (February 15) Rate Yield Suffix 5,640,000$ 2011 3.000% 0.330% AA0 8,555,000$ 2016 5.000% 2.060% AF95,855,000 2012 5.000% 0.620% AB8 17,380,000 2017 5.000% 2.400% AG77,765,000 2013 5.000% 0.890% AC6 48,415,000 2018 5.000% 2.680% AH57,995,000 2014 5.000% 1.220% AD4 51,365,000 2019 5.000% 2.860% AJ18,270,000 2015 5.000% 1.600% AE2 35,375,000 2020 5.000% 3.030% AK8

Initial Initial

Maturity Reoffering Cusip(1) Maturity Reoffering Cusip(1)

Amount (February 15) Rate Yield Suffix Amount (February 15) Rate Yield Suffix 5,960,000$ 2019 4.389% 100% AY8 7,160,000$ 2025 5.039% 100% BE16,135,000 2020 4.489% 100% AZ5 7,395,000 2026 5.089% 100% BG66,320,000 2021 4.589% 100% BA9 7,645,000 2027 5.139% 100% BH46,510,000 2022 4.689% 100% BB7 7,910,000 2028 5.463% 100% BJ06,715,000 2023 4.839% 100% BC5 8,200,000 2029 5.563% 100% BK76,930,000 2024 4.939% 100% BD3 8,500,000 2030 5.613% 100% BF8

OFFICIAL STATEMENT

Dated March 11, 2010 Ratings: Moody’s: “Aa1” S&P: “AA+” See “Other Information - NEW ISSUE - Book-Entry-Only Ratings” herein

In the opinion of Co-Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax purposesunder existing law and the Certificates are not private activity bonds. See "Legal and Tax Matters – Tax Exemption of Tax-Exempt Series 2010A Bonds and Certificates" for a discussion of the opinion of Co-Bond Counsel, including a description of alternative minimum tax consequences for corporations.

$21,575,000 CITY OF DALLAS, TEXAS

(Dallas, Denton, Collin and Rockwall Counties) Combination Tax and Revenue Certificates of Obligation, Series 2010

Dated Date: Date of Delivery Due: August 15, as shown on page 4

Interest on the $21,575,000 City of Dallas, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2010 (the "Certificates") will accrue from the date of delivery, will be payable February 15 and August 15 of each year commencing August 15, 2010, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Certificates will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-OnlySystem described herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiplesthereof. No physical delivery of the Certificates will be made to the owners thereof. Principal of, premium, if any, and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Obligations - Book-Entry-Only System" herein. The initial Paying Agent/Registrar is U.S. Bank National Association (see "The Obligations - Paying Agent/Registrar").

The Certificates are being issued pursuant to the general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Chapter 1371, Texas Government Code, as amended, and an ordinance (the "Certificate Ordinance") passed by the City Council of the City of Dallas, Texas (the "City"). The Certificates are direct obligations of the City, payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge of surplus net revenues of the City's Municipal Drainage Utility System in an amount not to exceed $1,000, as prescribed in the Certificate Ordinance (see "The Obligations - Authority for Issuance").

Proceeds from the sale of the Certificates will be used to (i) fund the purchase of various types of capital equipment, (ii) construct police facilities in the Bexar Street redevelopment corridor, and (iii) pay the costs of issuance of the Certificates.

CUSIP PREFIX: 235219

MATURITY SCHEDULE & 9 DIGIT CUSIPSee Schedule on Page 4

The Certificates are not subject to redemption prior to maturity.

The Certificates are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinions of the Attorney General of the State of Texas and the approving opinions of Vinson & Elkins L.L.P., Dallas, Texas and West & AssociatesL.L.P., Dallas, Texas, Co-Bond Counsel for the City (see Appendix C, "Form of Co-Bond Counsel Opinions"). Certain legal matters will be passed upon for the City by the Dallas City Attorney, and for the Underwriters by their co-counsel, Locke Lord Bissell &Liddell LLP, Dallas, Texas and Adorno Yoss White & Wiggins, LLP, Dallas, Texas.

It is expected that the Certificates will be available for delivery through DTC on or about March 30, 2010.

BofA MERRILL LYNCH RAMIREZ & CO., INC.

CITI J.P. MORGAN MORGAN KEEGAN & COMPANY, INC. RICE FINANCIAL PRODUCTS COMPANY

4

MATURITY SCHEDULE Cusip Prefix: 235219 (1)

(Interest to accrue from date of delivery) _____________ (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by Standard and Poor’s CUSIP Service Bureau, a Division of the McGraw-Hill Companies, Inc. These data are not intended to create a database and do not serve in any way as a substitute for the CUSIP Services.

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Initial Initial

Maturity Reoffering Cusip(1) Maturity Reoffering Cusip(1)

Amount (August 15) Rate Yield Suffix Amount (August 15) Rate Yield Suffix 815,000$ 2010 2.000% 0.350% AL6 3,915,000$ 2014 4.000% 1.270% AX0

4,930,000 2011 2.000% 0.350% AM4 215,000 2015 2.000% 1.650% AR31,085,000 2012 2.000% 0.700% AN2 215,000 2016 2.250% 2.110% AS13,835,000 2012 4.000% 0.700% AW2 215,000 2017 2.500% 2.430% AT94,920,000 2013 4.000% 0.940% AP7 215,000 2018 2.750% 2.700% AU61,000,000 2014 2.000% 1.270% AQ5 215,000 2019 3.000% 2.880% AV4

5

In connection with this offering, the Underwriters may over-allot or effect transactions that stabilize or maintain the market price of the Obligations offered hereby at levels above that which might otherwise prevail in the open market. Any such stabilizing, if commenced, may be discontinued at any time.

This Official Statement, which includes the cover pages and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.

No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other thanthose contained in this Official Statement, and, if given or made, such other information or representations must not be reliedupon.

The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the Co-Financial Advisors. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be realized.

The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewedthe information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the FederalSecurities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracyor completeness of such information.

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 City or other matters described.

Neither the City nor the Underwriters make any representation regarding the information contained in this Official Statement regarding The Depository Trust Company or its Book-Entry-Only system, as such information has been furnished by The Depository Trust Company. CUSIP numbers have been assigned to this issue by the CUSIP Service Bureau, and are included solely for the convenience of the owners of the Obligations. Neither the City nor the Underwriters shall be responsible for theselection or correctness of the CUSIP numbers shown on pages 2 and 4.

This Official Statement contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance and achievements to be different from future results, performance and achievements expressed orimplied by such forward-looking statements. Investors are cautioned that the actual results could differ materially from those set forth in the forward-looking statements.

TABLE OF CONTENTS

CITY OFFICIALS, STAFF AND CONSULTANTS ............................................. 7�ELECTED OFFICIALS .......................................... 7�SELECTED ADMINISTRATIVE STAFF ................... 8�CONSULTANTS AND ADVISORS .......................... 8�

SELECTED DATA FROM THE OFFICIAL STATEMENT ................................................. 9�TABLE 1 – SELECTED ISSUER INDICES ............. 11�

THE OBLIGATIONS ........................................... 12�AUTHORITY FOR ISSUANCE .............................. 12�REFUNDED BONDS AND ESCROW ..................... 12�SECURITY FOR OBLIGATIONS .......................... 12�BUILD AMERICA BONDS .................................. 13�INTEREST SUBSIDY PAYMENT .......................... 13�DESIGNATION OF THE TAXABLE SERIES 2010B

BONDS AS QUALIFIED BUILD AMERICABONDS..................................................... 13�

NO REDEMPTION OF THE TAX-EXEMPT SERIES 2010A BONDS ......................................... 13�

MAKE-WHOLE REDEMPTION OF THE TAXABLE SERIES 2010B BONDS ............................. 13�

EXTRAORDINARY OPTIONAL REDEMPTION OF TAXABLE SERIES 2010B BONDS .............. 14�

NO REDEMPTION OF THE CERTIFICATES........... 14�NOTICE OF REDEMPTION .................................. 14�BOOK-ENTRY-ONLY SYSTEM .......................... 15�PAYING AGENT/REGISTRAR ............................. 16�TRANSFER, EXCHANGE AND REGISTRATION .... 17�LIMITATION ON TRANSFER OF BONDS CALLED

FOR REDEMPTION .................................... 17�RECORD DATE FOR INTEREST PAYMENT .......... 17�OBLIGATION HOLDERS’ REMEDIES .................. 17�USE OF PROCEEDS ............................................ 18�DEFEASANCE ................................................... 18�SOURCES AND USES OF FUNDS ......................... 19�

CITY AD VALOREM TAX INFORMATION ... 20�STATE OF TEXAS TAX CODE ............................ 20�FISCAL YEAR 2009 GENERAL FUND BUDGETARY

HIGHLIGHTS ............................................ 23�FISCAL YEAR 2010 BUDGET ............................ 24�FISCAL YEAR 2010 REVENUES ......................... 24�AD VALOREM TAX DATA ................................ 25�

6

TABLE 2 – VALUATION, EXEMPTIONS ANDGENERAL OBLIGATION DEBT .................. 25�

TABLE 3 - TAXABLE ASSESSED VALUATION BY CATEGORY .............................................. 26�

TABLE 4 - VALUATION AND FUNDED DEBTHISTORY ................................................. 26�

TABLE 5 - TAX RATE, LEVY AND COLLECTION HISTORY ................................................. 27�

TABLE 6 - TEN LARGEST TAXPAYERS .............. 27�

CITY DEBT INFORMATION ............................. 28�TABLE 7 – GENERAL OBLIGATION DEBT SERVICE

REQUIREMENTS ....................................... 29�TABLE 8 -TAXABLE ASSESSED VALUATIONS,

TAX RATES, DIRECT AND OVERLAPPING FUNDED DEBT PAYABLE FROM ADVALOREM TAXES AND AUTHORIZED BUT UNISSUED BONDS OF OVERLAPPING TAXING JURISDICTIONS. .......................... 30�

TABLE 9 -�INTEREST AND SINKING FUND BUDGET PROJECTION .............................. 31�

TABLE 10 – AUTHORIZED GENERAL OBLIGATION BONDS ................................ 31�

CITY FINANCIAL INFORMATION ................. 32�TABLE 11 – GENERAL FUND REVENUES AND

EXPENDITURES HISTORY ......................... 33�TABLE 12 - MUNICIPAL SALES TAX HISTORY .. 34�TABLE 13 – FINANCIAL INDICATORS ............... 38�

LEGAL AND TAX MATTERS ........................... 38�LITIGATION ...................................................... 38�CLEAN AIR ACT AMENDMENTS OF 1990 ......... 40�REGISTRATION AND QUALIFICATION OF

OBLIGATIONS FOR SALE .......................... 41�TAX EXEMPTION OF TAX-EXEMPT SERIES

2010A BONDS AND CERTIFICATES .......... 41�ADDITIONAL FEDERAL INCOME TAX

CONSIDERATIONS RELATING TO THE TAX-EXEMPT SERIES 2010A BONDS AND THE CERTIFICATES ......................................... 42�

TAXABLE SERIES 2010B BONDS ...................... 42�LEGAL INVESTMENTS AND ELIGIBILITY TO

SECURE PUBLIC FUNDS IN TEXAS ........... 44�LEGAL OPINIONS AND NO-LITIGATION

CERTIFICATE ........................................... 44�

CONTINUING DISCLOSURE ............................ 44�CONTINUING DISCLOSURE OF INFORMATION ... 44�

OTHER INFORMATION .................................... 46�RATINGS .......................................................... 46�AUTHENTICITY OF FINANCIAL DATA AND OTHER

INFORMATION ......................................... 46�VERIFICATION OF ARITHMETICAL AND

MATHEMATICAL COMPUTATIONS ........... 46�UNDERWRITING ............................................... 46�CO-FINANCIAL ADVISORS ............................... 47�

FORWARD-LOOKING STATEMENTS .................. 47�

SCHEDULE I – SCHEDULE OF REFUNDED BONDS

APPENDICES General Information Regarding the City ................. A Excerpts from the FY 2008 Comprehensive

Annual Financial Report ................................... B Form of Co-Bond Counsel Opinions ...................... C

The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement.

7

CITY OFFICIALS, STAFF AND CONSULTANTS

ELECTED OFFICIALS

City Council Term Expires OccupationTom Leppert June, 2011 2 Years, 9 Months Construction Mayor - Place 15 (Former Chairman and CEO) (At Large)

Delia Jasso June, 2011 9 Months Small Business Owner Councilmember - Place 1

Pauline Medrano June, 2011 4 Years, 9 Months Civic Leader Councilmember - Place 2

Dave Neumann June, 2011 2 Years, 9 Months Small Business Owner Councilmember - Place 3

Dwaine Caraway June, 2011 2 Years, 9 Months Civic Leader Councilmember - Place 4

Vonciel Jones Hill June, 2011 2 Years, 9 Months Attorney Councilmember - Place 5

Steve Salazar June, 2011 6 Years, 9 Months Attorney Councilmember - Place 6

Carolyn Davis June, 2011 2 Years, 9 Months Civic Leader Councilmember - Place 7

Tennell Atkins June, 2011 2 Years, 9 Months Entrepreneur Councilmember - Place 8

Sheffield Kadane Jr. June, 2011 2 Years, 9 Months Investor and Real Estate Broker Councilmember - Place 9

Jerry Allen June, 2011 2 Years, 9 Months Banker Councilmember - Place 10

Linda Koop June, 2011 4 Years, 9 Months Civic Leader Councilmember - Place 11

Ron Natinsky June, 2011 4 Years, 9 Months Businessman and Entrepreneur Councilmember - Place 12

Ann Margolin June, 2011 9 Months Investor Councilmember - Place 13

Angela Hunt June, 2011 4 Years, 9 Months Attorney Councilmember - Place 14

Length of Serviceas of

March 1, 2010

8

SELECTED ADMINISTRATIVE STAFF

CONSULTANTS AND ADVISORS

Auditors ........................................................................................................................................................... Grant Thornton L.L.P. Dallas, Texas

Co-Bond Counsel ........................................................................................................................................... Vinson & Elkins L.L.P. Dallas, Texas

West & Associates L.L.P. Dallas, Texas

Co-Financial Advisors ............................................................................................................................... First Southwest Company Dallas, Texas

Estrada Hinojosa & Company, Inc. Dallas, Texas

For additional information regarding the City, please contact:

Ms. Jeanne Chipperfield City of Dallas 1500 Marilla Street, 4DN Dallas, Texas 75201 (214) 670-7804

or

Mr. Wayne Placide Mr. Steve Johnson First Southwest Company 325 N. St. Paul, Suite 800 Dallas, Texas 75201 (214) 953-4000

or

Mr. Noe Hinojosa, Jr. Mr. U.S. Williams Estrada Hinojosa & Company, Inc. 1717 Main Street, 47th Floor Dallas, Texas 75201 (214) 658-1670

Length of Time in Tenure with CityThis Position as of of Dallas as of

Name Position March 1, 2010 March 1, 2010

Mary K. Suhm City Manager 4 Years, 9 Months 31 Years, 10 MonthsRyan S. Evans First Assistant City Manager 3 Years, 5 Months 24 YearsA.C. Gonzalez(1) Assistant City Manager 3 Years, 4 Months 10 Years, 5 MonthsJill A Jordan Assistant City Manager 11 Years, 1 Month 18 Years, 5 MonthsForest Turner Assistant City Manager 7 Months 17 Years, 2 MonthsJeanne Chipperfield Chief Financial Officer Newly Appointed 15 Years, 9 MonthsThomas P. Perkins, Jr City Attorney 4 Years, 8 Months 10 Years, 8 MonthsDeborah A. Watkins City Secretary 3 Years, 11 Months 35 Years, 9 MonthsCraig Kinton City Auditor 3 Years, 5 Months 3 Years, 5 Months

(1) A.C. Gonzalez previously served as Assistant City Manager from September 1988 until August 1995

9

SELECTED DATA FROM THE OFFICIAL STATEMENT

This data page was prepared to present the purchasers of the Bonds and the Certificates (collectively, the “Obligations”) information concerning the Obligations, the ad valorem tax revenues pledged to pay the Obligations, the description of the revenue base and other pertinent data, all as more fully described herein, and is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Obligations to potentialinvestors is made only by means of this entire Official Statement. No person is authorized to detach this data page from this Official Statement or to otherwise use it without the entire Official Statement.

THE ISSUER ....................................... The City of Dallas, Texas, is a political subdivision located in Dallas, Denton, Collin and Rockwall Counties operating as a home-rule city under the laws of the State of Texas and a charter approved by the voters in 1907. The City operates under the City Council/Manager form of government where the Mayor is elected for a four-year term and fourteen City Councilmembers are each elected for two-year terms. The Mayor’s term is limited to two consecutive terms and the fourteen Councilmembers are limited to four consecutive terms. The City Council formulates operating policy for the City while the City Manager is the chief administrative and executive officer.

The City is among the three most populous cities in Texas and among the ten most populous cities in the U.S. The City is approximately 378 square miles in area (see Appendix A - “General Information Regarding the City”).

THE BONDS ....................................... The Tax-Exempt Series 2010A Bonds are being issued in the principal amount of $196,615,00 and the Taxable Series 2010B Bonds are being issued in the principal amount of $85,380,000 pursuant to the general laws of the State of Texas, particularly Chapters 1331 and 1371 and in the case of the Tax-Exempt Series 2010A Bonds, Chapter 1207 of the Texas Government Code, as amended, and the Bond Ordinance passed by the City Council of the City (see “The Obligations - Authority for Issuance”).

THE CERTIFICATES .......................... The Certificates are being issued in the principal amount of $21,575,000 pursuant to the general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Chapter 1371, Texas Government Code, as amended, and the Certificate Ordinance passed by the City Council of the City (see “The Obligations – Authority for Issuance”).

SECURITY FOR THE OBLIGATIONS ... The Obligations constitute direct obligations of the City, payable from a direct and continuing ad valorem tax, within the limits prescribed by the law, on all taxable property within the City in an amount sufficient to provide for payment of principal and interest on all ad valorem tax debt. Additionally, with respect to the Certificates, there is a limited pledge of surplus net revenues of the City’s Municipal Drainage Utility System in an amount not to exceed $1,000 (see “The Obligations – Security for Obligations”).

OPTIONAL REDEMPTION ................................... The Tax-Exempt Series 2010A Bonds are not subject to redemption prior to maturity.

At the option of the City, the Taxable Series 2010B Bonds are subject to make-whole redemption as described herein.


10

EXTRAORDINARY OPTIONALREDEMPTION OF 2010B BONDS ........ The City reserves the right, at its option, to redeem the Taxable Series 2010B Bonds prior

to their stated maturities, upon the occurrence of an “Extraordinary Event” from any source of available funds, as a whole or in part, by lot, at the “Extraordinary Redemption Price” all as set forth herein.

TAX EXEMPTION ............................... In the opinion of Co-Bond Counsel, the interest on the Tax-Exempt Series 2010A Bonds and the Certificates will be excludable from gross income for federal income tax purposes under existing law and the Tax-Exempt Series 2010A Bonds and the Certificates will not be private activity bonds. See “Legal and Tax Matters - Tax Exemption of Tax-Exempt Series 2010A Bonds and Certificates” for a discussion of the opinions of Co-Bond Counsel, including a description of alternative minimum tax consequences for corporations. (See Appendix C - “Form of Co-Bond Counsel Opinions”). Interest on the Taxable Series 2010B Bonds is not excludable from gross income for federal income tax purposes. See “Legal and Tax Matters – Taxable Series 2010B Bonds.”

USE OF PROCEEDS ............................ Proceeds from the sale of the Bonds will be used to (i) fund various permanent public improvements in the City, (ii) refund certain other general obligation bonds, and (iii) pay the costs of issuance of the Bonds.


PAYMENT RECORD ........................... The City has never defaulted in the payment of its debt.

BOOK-ENTRY-ONLY SYSTEM ........... The definitive Obligations will be initially registered and delivered only to Cede & Co., the nominee of DTC, pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Obligations may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations thereof (see “The Obligations - Book-Entry-Only System”).

PAYING AGENT/REGISTRAR ............. The initial Paying Agent/Registrar is U.S. Bank National Association.

EXPECTED DELIVERY DATE ............. Expected delivery date is on or about March 30, 2010.

11

TABLE 1 – SELECTED ISSUER INDICES

(1) Source: North Central Texas Council of Governments. (2) Source: Certified Tax Roll. (3) Represents general obligation debt, excluding accrued interest and tax increment financing district bonds, payable from ad valorem taxes. (4) Estimated. (5) Includes the Obligations and excludes the Refunded Bonds. (6) Estimate. Collection as of January 31, 2010.

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NetTaxable General

Fiscal Assessed Per Capita Obligation Net G.O. Ratio ofYear Estimated Valuation Taxable (G.O.) Tax Debt Net G.O. % of

Ended City (TAV)(2) Assessed Tax Debt (3) Per Tax Debt Total Tax9/30 Population(1) (000) Valuation (000) Capita to TAV Collections2005 1,232,100 67,579,878$ 54,849$ 1,327,253$ 1,077$ 1.96% 98.16%2006 1,260,950 70,843,802 56,183 1,423,817 1,129 2.01% 98.27%2007 1,280,500 76,124,191 59,449 1,668,943 1,303 2.19% 98.46%2008 1,300,350 84,526,934 65,003 1,898,228 1,460 (4) 2.25% 96.98%2009 1,306,350 90,477,932 69,260 2,000,870 1,532 2.21% 96.33% (4)

2010 N/A 87,264,095 N/A 2,107,730 (5) N/A 2.42% 76.21% (6)

12

THE OBLIGATIONS

AUTHORITY FOR ISSUANCE

The Bonds were authorized at elections held in the City on May 2, 1998 and November 7, 2006. The Bonds are being issued pursuant to the general laws of the State of Texas, particularly Chapters 1331 and 1371 and in the case of the Tax-Exempt Series2010A Bonds, Chapter 1207 of the Texas Government Code, as amended, the Bond Ordinance passed by the City Council, and the City Charter.

The Certificates are being issued pursuant to the general laws of the State of Texas, particularly Subchapter C of Chapter 271,Texas Local Government Code, as amended, and Chapter 1371, Texas Government Code, as amended, and the Certificate Ordinance passed by the City Council.

The Bond Ordinance and the Certificate Ordinance are collectively referred to herein as the “Ordinance”.

REFUNDED BONDS AND ESCROW

The principal and interest due on the Refunded Bonds are to be paid on the scheduled interest payment dates and the respective redemption dates of such Refunded Bonds, from funds to be deposited pursuant to a certain Escrow Agreement (the "Escrow Agreement") between the City and U.S. Bank National Association (the "Escrow Agent"). The Ordinance provides that from the proceeds of the sale of the Tax-Exempt Series 2010A Bonds received from the Underwriters, the City will deposit with the EscrowAgent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds on their respective redemption dates. Such funds will be held by the Escrow Agent in a special escrow account (the "Escrow Fund") and used to purchase obligations of some or all of the following types: (a) direct non-callable obligations of the United States of America, includingobligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (c) noncallable obligations of a state or an agency or a county, municipality or other political subdivision of a state that have been refunded and that are rated as to investment quality by a nationally recognized investment rating firm not less thanAAA or its equivalent (the "Government Obligations"). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds.

Grant Thornton LLP, a firm of independent public accountants, will deliver to the City, on or before the settlement date of theTax-Exempt Series 2010A Bonds, its verification report indicating that it has verified, in accordance with attestation standardsestablished by the American Institute of Certified Public Accountants, the mathematical accuracy of (a) the mathematical computations of the adequacy of the cash and the maturing principal of and interest on the Government Obligations, to pay, whendue, the maturing principal of, interest on and related call premium requirements of the Refunded Bonds and (b) the mathematicalcomputations of yield used by Bond Counsel to support its opinion that interest on the Tax-Exempt Series 2010A Bonds will be excluded from gross income for federal income tax purposes.

The verification performed by Grant Thornton LLP will be solely based upon data, information and documents provided to Grant Thornton LLP by the City and its representatives. Grant Thornton LLP has restricted its procedures to recalculating the computations provided by the City and its representatives and has not evaluated or examined the assumptions or information usedin the computations.

By the deposit of the Government Obligations and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of all of the Refunded Bonds in accordance with the law. It is the opinion of Bond Counsel that as a result of such defeasance and in reliance upon the report of Grant Thornton L.L.P., the Refunded Bonds will beoutstanding only for the purpose of receiving payments from the Government Obligations and any cash held for such purpose by the Escrow Agent and such Refunded Bonds will not be deemed as being outstanding obligations of the City payable from taxes nor for the purpose of applying any limitation on the issuance of debt.

SECURITY FOR OBLIGATIONS

All taxable property within the City is subject to a continuing direct annual ad valorem tax levied by the City sufficient to provide for the payment of principal and interest on the Obligations, which tax must be levied within the limits prescribed by law. TheCity operates under a home-rule charter as authorized by Article XI, Section 5 of the Constitution of the State of Texas. Pursuantto the Texas Constitution and the City’s home-rule charter, the City’s ad valorem tax rate may not exceed $2.50 per $100 TaxableAssessed Valuation for all purposes, including payment of debt service and general operating expenses.

The Bonds constitute direct obligations of the City payable from a direct and continuing ad valorem tax levied, within the limits prescribed by law, on all taxable property located within the City.

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The Certificates constitute direct obligations of the City, payable from a combination of (i) the levy and collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge of surplus net revenues of the City’s Municipal Drainage Utility System in an amount not to exceed $1,000.

BUILD AMERICA BONDS

In February 2009, as part of the Recovery Act, Congress added Sections 54AA and 6431 to the Internal Revenue Code (the “Tax Code”), which permit state and or local governments to obtain certain tax advantages when issuing taxable obligations that meetcertain requirements of the Tax Code and the related regulations promulgated by the U.S. Treasury (“Treasury Regulations”). Such obligations are referred to as Build America Bonds. A Build America Bond is a qualified bond under Section 54AA(g) of the Tax Code (a “Qualified Build America Bond”) if it meets certain requirements of the Tax Code and the related Treasury Regulations and the issuer has made an irrevocable election to have the special rule for qualified bonds apply. Interest on Qualified Build America Bonds is not excluded from gross income for federal income tax purposes, and owners of Qualified Build America Bonds will not receive any tax credits as a result of ownership of such Qualified Build America Bonds when an issuer has elected to receive the Direct Interest Subsidy Payment, as defined below.

INTEREST SUBSIDY PAYMENT

Under Section 6431 of the Tax Code, an issuer of a Qualified Build America Bond may apply to receive payments (the “Direct Interest Subsidy Payment”) directly from the Secretary of the U.S. Treasury (the “Secretary”). The amount of a Direct InterestSubsidy Payment is set in Section 6431 of the Tax Code at 35% of the corresponding interest payable on the related Qualified Build America Bond. To receive a Direct Interest Subsidy Payment, under currently existing procedures, the issuer will have tofile a tax form (now designated as Form 8038 CP) between 90 and 45 days prior to the corresponding bond interest payment date. Depending on the timing of the filing and other factors, the Direct Interest Subsidy Payment may be received before or after thecorresponding interest payment date.

DESIGNATION OF THE TAXABLE SERIES 2010B BONDS AS QUALIFIED BUILD AMERICA BONDS

Interest on the Taxable Series 2010B Bonds will be includable in gross income of the holders thereof for federal income tax purposes and the holders of the Taxable Series 2010B Bonds will not be entitled to any tax credits as a result of either ownershipof the Taxable Series 2010B Bonds or receipt of any interest payments on the Taxable Series 2010B Bonds. Holders of the Taxable Series 2010B Bonds should consult their tax advisors with respect to the inclusion of interest on the Taxable Series 2010B Bonds in gross income for federal income tax purposes. The City intends to apply for a Direct Interest Subsidy Payment from the Secretary under the “Build America Program” pursuant to Section 6431 of the Tax Code. No assurances are provided that the City will receive the Direct Interest Subsidy Payment regarding the Taxable Series 2010B Bonds. The amount of any Direct Interest Subsidy Payment is subject to legislative changes by Congress. Direct Interest Subsidy Payments will only be paid if the Taxable Series 2010B Bonds are Qualified Build America Bonds. For the Taxable Series 2010B Bonds to be and remain Qualified Build America Bonds, the City must comply with certain covenants and the City must establish facts and expectations with respect to the Taxable Series 2010B Bonds, the use and investment of proceeds thereof and the use of property financed thereby. There are currently no procedures for requesting a Direct Interest Payment after the 45th day prior to an interest payment date; therefore, if the City fails to file the necessary tax return in a timely fashion, it is possible that the City will never receive such Direct Interest Subsidy Payment. Also, Direct Interest Subsidy Payments are subject to offset against certain amounts thatmay, for unrelated reasons, be owed by the City to an agency of the United States of America.

NO REDEMPTION OF THE TAX-EXEMPT SERIES 2010A BONDS

The Tax-Exempt Series 2010A Bonds are not subject to redemption prior to maturity. MAKE-WHOLE REDEMPTION OF THE TAXABLE SERIES 2010B BONDS

The Taxable Series 2010B Bonds are subject to redemption prior to maturity by written direction of the City, in whole or in part, on any day in principal amounts equal to $5,000 or any integral multiple thereof, at the redemption price (the “Make-Whole Redemption Price”) equal to the greater of: (1) 100% of the principal amount of the Taxable Series 2010B Bonds to be redeemed; and (2) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of the Taxable Series 2010B Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of thedate on which the Taxable Series 2010B Bonds are to be redeemed, discounted to the date on which the Taxable Series 2010B Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve 30 day months, at the Treasury Rate, plus twenty (20) basis points; plus, in each case, accrued interest on the Taxable Series 2010B Bonds to be redeemed to theredemption date.

At the request of the Paying Agent/Registrar, the redemption price of the Taxable Series 2010B Bonds to be redeemed at the option of the City will be determined by an independent accounting firm, investment banking firm or financial advisor retained by the City at the City’s expense to calculate such redemption price. The Paying Agent/Registrar and the City may conclusively rely on the determination of such redemption price by such independent accounting firm, investment banking firm or financial advisorand will not be liable for such reliance.

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The “Treasury Rate” is, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519)that has become publicly available at least two (2) Business Days prior to the redemption date (excluding inflation-indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data), most nearly equal to the period from the redemption date to the maturity date of the Taxable Series 2010B Bonds to be redeemed; provided, however, that if the period from the redemption date to such maturity date is less than one (1) year, the weekly average yield onactually traded United States Treasury securities adjusted to a constant maturity of one (1) year will be used.

EXTRAORDINARY OPTIONAL REDEMPTION OF TAXABLE SERIES 2010B BONDS

The Taxable Series 2010B Bonds are subject to redemption prior to their maturity at the option of the City, in whole or in partupon the occurrence of an Extraordinary Event (as defined below), at the “Extraordinary Redemption Price” (defined below). TheExtraordinary Redemption Price is equal to the greater of: (1) 100% of the principal amount of the Taxable Series 2010B Bonds tobe redeemed; and (2) the sum of the present value of the remaining scheduled payments of principal and interest to the maturitydate of the Taxable Series 2010B Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the Taxable Series 2010B Bonds are to be redeemed, discounted to the date on which the Taxable Series 2010B Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve 30 day months, at the “Treasury Rate”, plus one hundred (100) basis points; plus, in each case, accrued interest on the Taxable Series 2010B Bondsto be redeemed to the redemption date. An “Extraordinary Event” will have occurred if the City determines that a material adverse change has occurred to section 54AA or section 6431 of the Code (as such sections were added by Section 1531 of the American Recovery and Reinvestment Act of 2009, pertaining to “Build America Bonds”) or there is any guidance published by the Internal Revenue Service or the Department of the Treasury with respect to such Sections or any other determination by the Internal Revenue Service or the Department of the Treasury, which determination is not the result of an act or omission by the City to satisfy the requirements to receive the Direct Interest Subsidy Payments, pursuant to which the Direct Interest SubsidyPayments applicable to such Taxable Series 2010B Bonds are reduced or eliminated.

At the request of the Paying Agent/Registrar, the redemption price of the Taxable Series 2010B Bonds to be redeemed at the option of the City will be determined by an independent accounting firm, investment banking firm or financial advisor retained by the City at the City’s expense to calculate such redemption price. The Paying Agent/Registrar and the City may conclusively rely on the determination of such redemption price by such independent accounting firm, investment banking firm or financial advisorand will not be liable for such reliance.

The “Treasury Rate” is, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519)that has become publicly available at least two (2) Business Days prior to the redemption date (excluding inflation-indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data), most nearly equal to the period from the redemption date to the maturity date of the Taxable Series 2010B Bonds to be redeemed; provided, however, that if the period from the redemption date to such maturity date is less than one (1) year, the weekly average yield onactually traded United States Treasury securities adjusted to a constant maturity of one (1) year will be used.

NO REDEMPTION OF THE CERTIFICATES


NOTICE OF REDEMPTION

Not less than 30 days prior to a redemption date for the Taxable Series 2010B Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Taxable Series 2010B Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE TAXABLE SERIES 2010B BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY TAXABLE SERIES 2010B BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH TAXABLE SERIES 2010B BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE. In the Bond Ordinance, the City reserves the right in the case of an optional redemption (including an extraordinary optional redemption) to give notice of its election or direction to redeem Taxable Series 2010B Bondsconditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying

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Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected owners. Any Taxable Series 2010B Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and/or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default.

The City may, without consent of or notice to any owners, from time to time and at any time, amend the Ordinances in any manner not detrimental to the interests of the owners, including the curing of any ambiguity, inconsistency, or formal defect oromission herein. In addition, the City may, with the written consent of the owners of the Obligations holding a majority in aggregate principal amount of the Obligations then outstanding, amend, add to, or rescind any of the provisions of the Ordinances; provided that, without the consent of all owners of outstanding Obligations, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of, premium, if any, and interest on the Obligations, reduce the principalamount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, or interest on the Obligations, (ii) give any preference to any Obligation over any other Obligation, or (iii) reduce the aggregate principal amount of Obligations required to be held by owners for consent to any such amendment, addition, or rescission.

BOOK-ENTRY-ONLY SYSTEM

This section describes how ownership of the Obligations are to be transferred and how the principal of, premium, if any, and interest on the Obligations are to be paid to and credited by The Depository Trust Company, New York, New York (“DTC”), while the Obligations are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The City believes the source ofsuch information to be reliable, but takes no responsibility for the accuracy or completeness thereof.

The City cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Obligations, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Obligations), or redemption or other notices, to the Beneficial Owners, or thatthey will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.

DTC will act as securities depository for the Obligations. The Obligations will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate for each maturity of the Obligations will be issued, in the aggregate principal amountof such maturity, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement amongDirect Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of Bonds certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with theSecurities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC’s records. The ownership interest of each actual purchaser of each Obligation (“Beneficial Owner”) is inturn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation fromDTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Obligations are to be accomplished by entries made onthe books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates

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representing their ownership interests in the Obligations, except in the event that use of the book-entry system for the Obligationsis discontinued.

To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may wish totake certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such asredemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Obligations unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the record date (identified in a listing attached to the OmnibusProxy).

Principal and interest payments on the Obligations will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Paying Agent/Registrar, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent/Registrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Obligations are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Obligations, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC.

Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City or the Underwriters.

Effect of Termination of Book-Entry-Only System. In the event that the Book-Entry-Only System is discontinued by DTC or the use of the Book-Entry-Only System is discontinued by the City, printed certificates will be issued to the holders and the Obligations will be subject to transfer, exchange and registration provisions as set forth in the Ordinance and summarized under“The Obligations - Transfer, Exchange and Registration” below.

PAYING AGENT/REGISTRAR

The initial Paying Agent/Registrar is U.S. Bank National Association. In the Ordinance, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Obligationsare duly paid, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Obligations.Upon any change in the Paying Agent/Registrar for the Obligations, the City agrees to promptly cause a written notice thereof tobe sent to each registered owner of the Obligations by United States mail, first class, postage prepaid, which notice shall also give the name and address of the new Paying Agent/Registrar.

In the event the Book-Entry-Only System should be discontinued, principal of the Obligations will be payable to the registered owner at maturity or prior redemption upon presentation at the Dallas, Texas corporate trust office of the Paying Agent/Registrar

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(the “Designated Trust Office”). Interest on the Obligations will be payable by check, dated as of the interest payment date, and mailed by the Paying Agent/Registrar to registered owners as shown on the records of the Paying Agent/Registrar on the Record Date (see “The Obligations - Record Date for Interest Payment” herein), 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 Obligations shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be thenext succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized toclose; and payment on such date shall have the same force and effect as if made on the original date payment was due.

TRANSFER, EXCHANGE AND REGISTRATION

In the event the Book-Entry-Only System should be discontinued, the Obligations may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender thereof to the Paying Agent/Registrar andsuch transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. The Obligations may be assigned by the execution of an assignment form on the respective Obligations or by other instrument of transfer and assignmentacceptable to the Paying Agent/Registrar. New Obligations will be delivered by the Paying Agent/Registrar, in lieu of the Obligations being transferred or exchanged, at the principal office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Obligations issued in anexchange or transfer of Obligations will be delivered to the registered owner or assignee of the registered owner in not more thanthree business days after the receipt of the Obligations to be canceled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in a form satisfactory to the Paying Agent/Registrar.New Obligations registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and series for a like aggregate principal amount and series as the Obligations surrendered for exchange or transfer. See “The Obligations - Book-Entry-Only System” herein for a description of the system to be utilized initially in regard to ownership and transferability of the Obligations.

LIMITATION ON TRANSFER OF BONDS CALLED FOR REDEMPTION

Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Taxable Series 2010B Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of the uncalled balance of a Taxable Series 2010B Bond.

RECORD DATE FOR INTEREST PAYMENT

The record date (“Record Date”) for the interest payable on any interest payment date means the close of business on the last business day of the preceding month.

In the event of a non-payment of interest on the Obligations on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a “Special Record Date”) for the Bonds or the Certificates, as the case may be, 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 (“Special Payment Date”, which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each owner of an Obligation appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice.

OBLIGATION HOLDERS’ REMEDIES

Under State law, there is no right to the acceleration of maturity of the Obligations upon the failure of the City to observe any covenant under the Ordinance. Although a registered owner could presumably obtain a judgment against the City if a default occurred in any payment of the principal of, or interest on, any such Obligations, such judgment could not be satisfied by execution against any property of the City. Such registered owner's only practical remedy, if a default occurs, is a mandamus or mandatory injunction proceeding to compel the City to assess and collect an annual ad valorem tax sufficient to pay principal of,and interest on, the Obligations as they become due. The enforcement of any such remedy may be difficult and time consuming and a registered owner could be required to enforce such remedy on a periodic basis.

On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (“Tooke”) that a waiver of sovereign immunity must be provided for by statute in “clear and unambiguous” language. In so ruling, the Court declared thatstatutory language such as “sue and be sued”, in and of itself, did not constitute a clear and unambiguous waiver of sovereign immunity. Because it is not clear that the Texas Legislature has effectively waived the City’s immunity from suit for money damages, a registered owner may not be able to bring such a suit against the City for breach of the Obligations or the Ordinance. In Tooke, the Court noted the enactment in 2005 of sections 271.151-.160, Texas Local Government Code (the “Local Government Immunity Waiver Act”), which, according to the Court, waives “immunity from suit for contract claims against most local governmental entities in certain circumstances.” The Local Government Immunity Waiver Act covers cities and relates to

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contracts entered into by cities for providing goods or services to cities. The City is not aware of any Texas court construing the Local Government Immunity Waiver Act in the context of whether contractual undertakings of local governments that relate to their borrowing powers are contracts covered by the Local Government Immunity Waiver Act. As noted above, the Ordinance provides that holders of Obligations may exercise the remedy of mandamus to enforce the obligations of the City under the Ordinance. Neither the remedy of mandamus nor any other type of injunctive relief was at issue in Tooke, and it is unclear whether Tooke will be construed to have any effect with respect to the exercise of mandamus, as such remedy has been interpretedby Texas courts. In general, Texas courts have held that a writ of mandamus may be issued to require public officials to performministerial acts that clearly pertain to their duties. Texas courts have held that a ministerial act is defined as a legal duty that is prescribed and defined with a precision and certainty that leaves nothing to the exercise of discretion or judgment, though mandamus is not available to enforce purely contractual duties. However, mandamus may be used to require a public officer to perform legally-imposed ministerial duties necessary for the performance of a valid contract to which the State or a political subdivision of the State is a party (including the payment of monies due under a contract).

Chapter 1371, Texas Government Code (“Chapter 1371”), which pertains to the issuance of public securities by issuers such as theCity, permits the City to waive sovereign immunity in the proceedings authorizing its bonds, but in connection with the issuanceof the Obligations, the City has not waived sovereign immunity in the manner provided by Chapter 1371.

The Ordinance does not provide for the appointment of a trustee to represent the interest of the holders of Obligations upon anyfailure of the City to perform in accordance with the terms of the Ordinance, or upon any other condition. Furthermore, the City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code (“Chapter 9”). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 alsoincludes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legalaction by creditors or holders of obligations of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court(which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinions of Co-Bond Counsel will note that all opinions relative to the enforceability of the Ordinance and the Obligations are qualifiedwith respect to the customary rights of debtors relative to their creditors.

USE OF PROCEEDS

Proceeds from the sale of the Bonds will be used to (i) fund various permanent public improvements in the City, (ii) refund certain other general obligation bonds (the “Refunded Bonds”), and (iii) pay the costs of issuance of the Bonds.


DEFEASANCE

The Ordinance provides that the City may discharge its obligations to the registered owners of any or all of the Obligations to pay principal, interest and maturity or redemption price, as applicable, thereon in any manner permitted by law. Under current Texas law, such discharge may be accomplished either (i) by depositing a sum of money equal to the principal of, premium, if any, andall interest to accrue on the Obligations to maturity or redemption or (ii) by depositing with the Paying Agent/Registrar or other lawfully authorized entity, amounts sufficient to provide for the payment and/or redemption of the Obligations; provided that suchdeposits may be invested and reinvested only in (a) direct non-callable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) non-callable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (c) non-callable obligations of a state or an agency or a county, municipality or other political subdivision of a state that have been refunded and that are rated as to investment quality by a nationally recognized investment rating firm not less thanAAA or its equivalent. The foregoing obligations may be in book-entry form, and shall mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment and/or redemption of the Obligations.If any Taxable Series 2010B Bonds are to be redeemed prior to their respective dates of maturity, provision must have been madefor giving notice of redemption as provided in the Bond Ordinance.

Under current state law, after such deposit as described above, such Obligations shall no longer be regarded to be outstanding or unpaid. After firm banking and financial arrangements for the discharge and final payment or redemption of the Obligations havebeen made as described above, all rights of the City to initiate proceedings to call the Taxable Series 2010B Bonds for redemption or take any other action amending the terms of the Obligations are extinguished; provided, however, that the right to call the Taxable Series 2010B Bonds for redemption is not extinguished if the City: (i) in the proceedings providing for the firm bankingand financial arrangements, expressly reserves the right to call the Taxable Series 2010B Bonds for redemption; (ii) gives notice of the reservation of that right to the owners of the Taxable Series 2010B Bonds immediately following the making of the firm

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banking and financial arrangements; and (iii) directs that notice of the reservation be included in any redemption notices that it authorizes.

SOURCES AND USES OF FUNDS

The following is an estimated list of sources and uses of funds:

*Includes underwriters discount

Sources

Principal Amount of the Bonds 281,995,000Principal Amount of the Certificates 21,575,000Net Reoffering Premium 32,031,632Transfers from Prior Issue Debt Service Funds 4,143,628Interest Earnings 742,790Total Sources of Funds 340,488,050$

Uses

Bond ProceedsTrinity River Corridor Project 5,700,000$ Flood Protection & Strom Drainage Improvements 42,723,000 Park and Recreation Facilities 52,967,000 Library Facilities 2,900,000 Cultural Arts Facilities 1,400,000 City Hall, City Service and City Maintenance Facilities 899,000 Economic Development in the Southern Area of the City and in other 13,965,000

areas of the City in connection with transit-oriented developmentLand Acquisition in the Cadillac Heights area for future location of city facilities 1,573,000 Court Facilities 6,753,000 Escrow Fund 186,324,836 315,204,836$

Certificates of Obligation ProceedsCapital Equipment and Police Facilities 22,937,221$

Deposit to Interest and S inking Fund 2,722 Estimated Costs of Issuance* 2,343,271 Total Uses of Funds 340,488,050$

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CITY AD VALOREM TAX INFORMATION

STATE OF TEXAS TAX CODE

TAXABLE PROPERTY AND EXEMPTIONS . . . Reference is made to the Tax Code, Title I, Vernon’s Texas Codes Annotated (the “Property Tax Code”), for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and, the procedures and limitations applicable to the levy and collection of ad valorem taxes. Excluding agricultural and open-space land which may be taxed on the basis of productive capacity, the Tax Code requires property to be appraised at 100% of market value and prohibits application of any assessment ratios.

The value of property is assessed for purposes of taxation as of January 1 of each year (except for business inventory which maybe, at the option of the taxpayer, assessed as of September 1). The appraisal of taxable property within the City is the responsibility of the central appraisal districts of Dallas, Collin, Denton, and Rockwall counties with respect to City propertylocated within such counties, county-wide agencies created under the Property Tax Code for that purpose. Each central appraisaldistrict is required to review the value of property within the appraisal district at least every three years; however, the City may require annual review at its own expense. In practice, each appraisal district reappraises property within its jurisdiction on arotating basis such that all property is reappraised once every three years. The value placed upon property within the each central appraisal district is subject to review by an Appraisal Review Board consisting of members appointed by the Board of Directors ofthe appraisal district. The City is entitled to challenge the determination of appraised value of any category of property within the City by petition filed with the applicable Appraisal Review Board. Taxpayers may submit individual properties to the AppraisalReview Board for valuation review and equalization; taxpayers may appeal the Appraisal Review Board’s decisions to a state district court.

The appraised value of a residence homestead for a tax year may not exceed the lesser of (1) the most recent market value of theresidence homestead as determined by the appraisal entity or (2) 110 percent of the appraised value of the residence homestead for the preceding tax year plus the market value of all new improvements.

Article VIII of the State Constitution (“Article VIII”) and State law provide for certain exemptions from property taxes, the valuation of agricultural and open-space lands at productivity value, and the exemption of certain personal property from ad valorem taxation.

Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant: (1) anexemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the political subdivision; (2) an exemption of up to 20% of the market value of residence homesteads; minimum exemption is $5,000. In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valoremtaxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. Homeowners who turn 65 during a tax year qualify immediately for the over-65 homestead exemption.

State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal property with the maximum amount of assessed valuation exempted ranging from $5,000 to $12,000 provided, however, that beginning in the 2009 tax year, a disabled veteran who receives from the Unites States Department of Veterans Affairs or itssuccessor 100% disability compensation due to a service-connected disability and a rating of 100% disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran’s residence homestead.

Article VIII provides that eligible owners of both agricultural land (Section l-d) and open-space land (Section l-d-l), including open-space land devoted to farm or ranch purposes or open-space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under bothSection 1-d and l-d-l.

Section 1-j, Article VIII, provides for “freeport property” to be exempted from ad valorem taxation unless the governing body of a taxing entity took action prior to January 1, 1990, to tax such property. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Decisions to exempt freeportproperty are not subject to reversal. In addition, under Section 11.253 of the Texas Tax Code, “Goods-in-transit” are exempt fromtaxation unless a taxing unit opts out of the exemption. Goods-in-transit are defined as tangible personal property that: (i) isacquired in or imported into the state to be forwarded to another location in the state or outside the state; (ii) is detained at a location in the state in which the owner of the property does not have a direct or indirect ownership interest for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or imported the property; (iii) is transported to another location in the state or outside the state not later than 175 days after the date the person acquired theproperty in or imported the property into the state; and (iv) does not include oil, natural gas, petroleum products, aircraft, dealer's motor vehicle inventory, dealer's vessel and outboard motor inventory, dealer's heavy equipment inventory, or retail manufacturedhousing inventory. On November 12, 2007, the City Council held a public hearing to receive comments regarding whether goods-

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in-transit in warehouses within the City limits should remain subject to taxation by the City. On November 28, 2007, the City Council approved an ordinance establishing that goods-in-transit within the City limits would remain subject to taxation.

All real property and certain personal property is taxable property unless exempt by law. With the exception of transportation,insurance and savings and loan intangibles, intangible personal property is not taxable property. Nonbusiness personal property,such as automobiles or light trucks, is exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. State law additionally provides for one motor vehicle owned by an individual and used in the course of the owner's occupation or profession and also for personal activities of the owner to be exempted from ad valorem taxation.

Article VIII, Section l-1, provides for the exemption from ad valorem taxation of certain property used to control the pollution of air, water or land. A person is entitled to an exemption from taxation of all or part of real and personal property that the personowns and that is used wholly or partly as a facility, device or method for the control of air, water or land pollution.

Under Section 11.24 of the Property Tax Code, the governing body of a taxing unit may exempt from taxation part or all of the assessed value of a structure or archeological site and the land necessary for access to and use of the structure or archeological site, if the structure or archeological site is: (1) designated as a Recorded Texas Historic Landmark under Chapter 442, Texas Government Code, or a state archeological landmark under Chapter 191, Texas Natural Resources Code, by the Texas Historical Commission; or (2) designated as a historically or archeologically significant site in need of tax relief to encourage its preservation pursuant to an ordinance or other law adopted by the governing body of the unit.

The City and the other taxing units within its territory may agree to jointly create Tax Increment Financing Zones, under which all or a portion of the taxes on increased property values (as determined by the participating taxing units) in the Zone are dedicated to financing public improvements within the Zone. The City also may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on their property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of theagreement. The abatement agreement could last for a period of up to 10 years.

ADDITIONAL HOMESTEAD EXEMPTION FOR ELDERLY AND DISABLED . . . Under Section 1-b, Article VIII of the Texas Constitution, a county, city, town or junior college district may establish an ad valorem tax freeze on residence homesteads of the disabled and of the elderly and their spouses. If the City Council does not take action to establish the tax limitation, City voters may submit a petition requiring the City Council to call an election to determine by majority vote whether to establish the taxlimitation.

If the tax limitation is established, the total amount of ad valorem taxes imposed by the City on a homestead that receives theexemption may not be increased while it remains the residence homestead of that person or that person’s spouse who is disabled or sixty-five years of age or older, except to the extent the value o

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