SUPPLEMENT TO

OFFICIAL STATEMENT DATED MARCH 13, 2012

relating to

$5,315,000 CITY OF EAGLE PASS, TEXAS

(A Home Rule Municipal Corporation of the State of Texas located in Maverick County) TAX REFUNDING BONDS, SERIES 2012

PLEASE BE ADVISED that the above-referenced Official Statement has been revised to add the following information:

Page 7 The section encaptioned “BOND INSURANCE” is hereby deleted in its entirety and replaced with the following:

BOND INSURANCE

BOND INSURANCE POLICY Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. ("AGM") will issue its Municipal Bond Insurance Policy for the Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. ASSURED GUARANTY MUNICIPAL CORP. AGM is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary of Assured Guaranty Municipal Holdings Inc. ("Holdings"). Holdings is an indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO”. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. No shareholder of AGL, Holdings or AGM is liable for the obligations of AGM. AGM’s financial strength is rated “AA-” (stable outlook) by Standard and Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business (“S&P”) and “Aa3” (on review for possible downgrade) by Moody’s Investors Service, Inc. (“Moody’s”). An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn. Current Financial Strength Ratings On March 20, 2012, Moody’s issued a press release stating that it had placed AGM’s “Aa3” insurance financial strength rating on review for possible downgrade. AGM can give no assurance as to any further ratings action that Moody’s may take. Reference is made to the press release, a copy of which is available at www.moodys.com, for the complete text of Moody’s comments On November 30, 2011, S&P published a Research Update in which it downgraded AGM’s financial strength rating from “AA+” to “AA-“. At the same time, S&P removed the financial strength rating from CreditWatch negative and changed the outlook to stable. AGM can give no assurance as to any further ratings action that S&P may take. Reference is made to the Research Update, a copy of which is available at www.standardandpoors.com, for the complete text of S&P’s comments.

For more information regarding AGM’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Capitalization of AGM At December 31, 2011, AGM’s consolidated policyholders’ surplus and contingency reserves were approximately $3,107,919,136 and its total net unearned premium reserve was approximately $2,171,861,791, in each case, in accordance with statutory accounting principles. AGM’s statutory financial statements for the fiscal year ended December 31, 2011, which have been filed with the New York State Department of Financial Services and posted on AGL’s website at http://www.assuredguaranty.com, are incorporated by reference into this Official Statement and shall be deemed to be a part hereof. Incorporation of Certain Documents by Reference

Portions of the following document filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof:

(i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (filed by AGL with the SEC on February 29, 2012).

All information relating to AGM included in, or as exhibits to, documents filed by AGL pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Municipal Corp.: 31 West 52nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) 826-0100).

Any information regarding AGM included herein under the caption “BOND INSURANCE – Assured Guaranty Municipal Corp.” or included in a document incorporated by reference herein (collectively, the “AGM Information”) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded. Miscellaneous Matters AGM or one of its affiliates may purchase a portion of the Bonds or any uninsured bonds offered under this Official Statement and may hold such Bonds or uninsured bonds for investment or may sell or otherwise dispose of such Bonds or uninsured bonds at any time or from time to time.

AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “BOND INSURANCE”.

The date of this Supplement is March 26, 2012.

OFFICIAL STATEMENT DATED MARCH 13, 2012

NEW ISSUE - Book-Entry-Only RATINGS (ENHANCED / ENHANCED):

Moody's: “Aa3” (Negative Outlook) / A2” Fitch: NR / “A+”

(See “BOND INSURANCE” and “OTHER RELEVANT INFORMATION – Ratings” herein.)

In the opinion of Bond Counsel (named below), assuming continuing compliance by the City after the date of initial delivery of the Bonds, described herein, with certain covenants contained in the Ordinance authorizing the Bonds and subject to the matters described under "TAX MATTERS" herein, interest on the Bonds under existing statutes, regulations, published rulings, and court decisions will be excluded from the gross income of the owners thereof for federal income tax purposes under section 103 of the Internal Revenue Code of 1986, as amended to the date of initial delivery of the Bonds. (See "TAX MATTERS" herein).

THE CITY HAS DESIGNATED THE BONDS AS “QUALIFIED TAX-EXEMPT OBLIGATIONS”.

$5,315,000 CITY OF EAGLE PASS, TEXAS

(A Home Rule Municipal Corporation of the State of Texas located in Maverick County) TAX REFUNDING BONDS, SERIES 2012

Dated: March 1, 2012 Due: September 1, 2012 and March 1 thereafter, as shown on inside cover PAYMENT TERMS . . . Interest on the $5,315,000 City of Eagle Pass, Texas (the "City") Tax Refunding Bonds, Series 2012 (the “Bonds”) will accrue from the dated date as shown above (the “Dated Date”) and will be payable on September 1 and March 1 of each year, commencing September 1, 2012, and will be calculated on the basis of a 360-day year of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company, New York, New York ("DTC"), acting as a securities depository (the “Securities Depository”), pursuant to Book-Entry-Only System described herein. The City reserves the right to discontinue the use of the Securities Depository. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or any integral multiple 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 (identified below) 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 BONDS-Book-Entry-Only System" herein). The initial Paying Agent/Registrar is Wells Fargo Bank, N.A., Dallas, Texas (See "THE BONDS - Paying Agent/Registrar" herein). AUTHORITY FOR ISSUANCE . . . The Bonds are being issued pursuant to the general laws of the State of Texas, particularly, Chapter 1207, Texas Government Code, as amended (“Chapter 1207”), the City’s Home Rule Charter (the “City Charter”), and an ordinance adopted by the City Council of the City (the “City Council”) authorizing the issuance of the Bonds (the “Ordinance”) (see “THE BONDS – Authority for Issuance”). As authorized by Chapter 1207, the City has delegated to the Mayor of the City the authority to execute an Approval Certificate evidencing final sales terms of the Bonds. The Approval Certificate was executed by the Mayor of the City on March 1, 2012. PURPOSE . . . Proceeds from the sale of the Bonds will be used to provide funds to (i) refund certain outstanding obligations of the City as described in Schedule I hereto (the “Refunded Bonds”) and (ii) pay the costs of issuing the Bonds.

SECURITY AND SOURCE OF PAYMENT . . . The Bonds are direct obligations of the City, payable from an annual ad valorem tax levied on all taxable property located within the City within the limits prescribed by law. (see "THE BONDS – Security for the Bonds"). BOND INSURANCE . . . The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP. (See “BOND INSURANCE” herein).

See Stated Maturities, Principal Amounts, Interest Rates, Initial Yields, CUSIP Numbers, and Redemption Provisions on Inside Cover

LEGALITY . . . The Bonds are offered for delivery, when, as, and if issued and received by the initial purchaser (the “Underwriter”) and subject to the approving opinion of the Attorney General of the State of Texas and the approval of certain legal matters by Escamilla, Poneck, & Cruz, LLP, San Antonio, Texas, Bond Counsel (see Appendix C - "Form of Bond Counsel's Opinion"). Certain legal matters will be passed upon for the Underwriters by their counsel, Winstead PC, San Antonio, Texas. DELIVERY . . . It is expected that the Bonds will be available for initial delivery to the Underwriter through the services of DTC on or about April 12, 2012. SOUTHWEST SECURITIES STIFEL, NICOLAUS & COMPANY, INCORPORATED

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MATURITY SCHEDULE, INTEREST RATES, YIELDS, AND CUSIP NUMBERS

CUSIP(1)

PREFIX: 269731

$5,315,000 Serial Bonds

Principal Interest Initial CUSIP (1) Principal Interest Initial CUSIP (1)

Maturity Amount Rate Yield Suffix Maturity Amount Rate Yield Suffix

9/1/2012 55,000$ 2.000% 0.450% FU4 3/1/2019 415,000$ 3.000% 1.700% GB5

3/1/2013 25,000 2.000% 0.650% FV2 3/1/2020 425,000 3.000% 1.950% GC3

3/1/2014 365,000 2.000% 0.650% FW0 3/1/2021 440,000 3.000% 2.150% GD1

3/1/2015 375,000 2.000% 0.910% FX8 3/1/2022 620,000 4.000% 2.300% GE9

3/1/2016 385,000 2.000% 1.010% FY6 3/1/2023 695,000 4.000% 2.450% (2) GF6

3/1/2017 390,000 2.000% 1.150% FZ3 3/1/2024 725,000 4.000% 2.550% (2) GG4

3/1/2018 400,000 3.000% 1.450% GA7

(Accrued Interest from March 1, 2012 to be added)

OPTIONAL REDEMPTION. . . The City reserves the right to redeem the Bonds maturing on or after March 1, 2023, in whole or in part, in principal amounts of $5,000 or any integral multiple thereof, on March 1, 2022, or any date thereafter, at the redemption price of par plus accrued interest as further described herein. (See “THE BONDS – Redemption Provisions of the Bonds” herein). The Bonds may also be subject to mandatory sinking fund redemption in the event the Underwriters elect to aggregate two or more of the maturities as a term bond.

(1) CUSIP numbers are included solely for the convenience of owners of the Certificates. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the City, the Financial Advisor, nor the Underwriters is responsible for the selection or correctness of the CUSIP numbers set forth herein. (2) Yield calculated based on the assumption that the Bonds denoted and sold at a premium will be redeemed on March 1, 2022, the first optional call date for such Bonds, at a redemption price of par, plus accrued interest to the redemption date.

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This Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances will this Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of these Bonds in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. The information set forth herein has been obtained from the City and other sources believes 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 Financial Advisor. 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 Underwriter have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE BONDS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THESE BONDS HAVE BEEN REGISTERED, QUALIFIED, OR EXEMPT SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. 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. The prices and other forms respecting the offering and sale of the Bonds may be changed from time to time by the Underwriter 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 the dealers who may sell the Bonds into investment accounts. In connection with this offering, the Underwriters may overallot 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. Neither the City, the Financial Advisors, nor the Underwriters make any representation or warranty with respect to the information contained in this Official Statement regarding the Depository Trust Company or its Book-Entry-Only System or with regard to any potential bond insurer or its municipal bond guaranty policy. Assured Guaranty Municipal Corp. (“AGM”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “BOND INSURANCE” and “Appendix D - Specimen Municipal Bond Insurance Policy”.

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TABLE OF CONTENTS OFFICIAL STATEMENT Description of the Bonds ................................................. i CITY ADMINISTRATION Elected Officials ............................................................. v Selected Administrative Staff ......................................... v Consultants and Advisors ............................................... v INTRODUCTION .............................................................. 1 THE BONDS ....................................................................... 1 SOURCES AND USES ....................................................... 6 BOND INSURANCE .......................................................... 7 BOND INSURANCE RISK FACTORS .......................... 8 AD VALOREM TAX INFORMATION .......................... 9 AD VALOREM TAXATION Table 1 - Valuations, Exemptions and Tax Supported Debt Obligations ................................ 12 Table 2 - Taxable Assessed Valuations by Category ... 13 Table 3 - Valuation and Funded Debt History .............. 14 Table 4 - Tax Rate, Levy and Collection History ......... 14 Table 5 - Ten Largest Taxpayers .................................. 15 Table 6 - Estimated Overlapping Debt ......................... 16 DEBT INFORMATION Table 6A - Estimated Interest and Sinking Fund Budget Projection ....................................................... 16 Table 7 - Authorized But Unissued Debt ...................... 16 Table 8 - Other Obligations ........................................... 16 Table 9 - Debt Service Requirements .......................... 17 FINANCIAL INFORMATION Table 10 - General Fund Revenues Expenditures and History ............................................ 18 Table 11 - Municipal Sales Tax History …. ................. 19 Financial Policies ........................................................... 19 Investments .................................................................... 20 Table 12 - Current Investments ..................................... 22 TAX MATTERS ................................................................ 22

OTHER INFORMATION Ratings ............................................................................. 24 Litigation ......................................................................... 24 Registration and Qualification of Bonds for Sale ........... 24 Legal Investments and Eligibility to Secure Public Funds in Texas .................................................. 24 Legal Matters ................................................................... 25 Authenticity of Financial Data and Other Information .. 25 Continuing Disclosure of Information ............................ 26 Compliance with Prior Undertakings ............................. 27 Financial Advisor ............................................................ 27 Verification of Arithmetical Computation ...................... 28 Underwriting ................................................................... 28 Certification of the Official Statement ............................ 28

FORWARD LOOKING STATEMENTS ....................... 28

SCHEDULE I – SCHEDULE OF

REFUNDED BONDS ....................................................... 30 APPENDICES General Information Regarding the City ......................... A City of Eagle Pass Annual Financial and Compliance Report ......................... B Form of Bond Counsel's Opinion .................................... C Specimen Bond Insurance Policy… ………………….. D

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

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CITY ADMINISTRATION ELECTED OFFICIALS

City Council

Years of Service

Term Expires

Occupation

Ramsey English Cantu Mayor

5 Months May, 2013 Executive Administrative Assistant

Asalia Casares Mayor Pro-Tem

3 Years May, 2013 Teacher

Rudy Villiapando Councilmember

4 Months May, 2013 Program Director for EPISD

William W. Davis Councilwoman

4 Years

May, 2011 Business Owner

Luis Sifuentes Councilmember

3 Years May, 2013 Counselor

APPOINTED ADMINISTRATIVE OFFICIALS

Current PositionName Position Years

Daniel Valenzuela City Manager 3Gloria Barrinetos Asst. City Manager 1Fidencio Ortiz Finance Director 1Mary Velasquez City Secretary 7

CONSULTANTS AND ADVISORS Financial Advisor ................................................................................................................................. Estrada Hinojosa & Company, Inc. San Antonio, Texas Bond Counsel ............................................................................................................................................ Escamilla, Poneck & Cruz, LLP San Antonio, Texas Auditors .............................................................................................................................................. Martinez, Rosario & Company, LLP San Antonio, Texas City Attorney ........................................................................................................................................................... Langley & Banack, Inc. Eagle Pass, Texas For additional information regarding the City, please contact:

Mr. Fidencio Ortiz Robert A. TijerinaChief Financial Officer David GonzalezCity of Eagle Pass, Tx or Estrada Hinojosa & Company, Inc. 100 South Monroe St. 100 W. Houston Street Suite 1400 Eagle Pass, Texas 78852 San Antonio, Texas 78205 (830) 773-1111 - Telephone (210) 223-4888 - Telephone (830) 773-9170 - Fax (210) 223-4849 - Fax

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OFFICIAL STATEMENT

Relating to

$5,315,000 CITY OF EAGLE PASS, TEXAS

(A Home Rule Municipal Corporation of the State of Texas located in Maverick County) TAX REFUNDING BONDS, SERIES 2012

INTRODUCTION

This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance by the City of Eagle Pass, Texas (the “City”) of its Tax Refunding Bonds, Series 2012” (the “Bonds”). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the ordinance authorizing the issuance of the Bonds (the “Ordinance”), except as otherwise indicated herein. There follows in this Official Statement, descriptions of the Bonds and certain information regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, Estrada Hinojosa & Company, Inc., 100 W. Houston Street, Suite 1400, San Antonio, Texas 78205, upon payment of reasonable copying and delivery charges. This Official Statement speaks only as to its date, and the information contained herein is subject to change. Copies of the final Official Statement will be deposited with the Municipal Securities Rulemaking Board, through its Electronic Municipal Market Access (“EMMA”) system. See “CONTINUING DISCLOSURE OF INFORMATION” for a description of the City’s undertaking to provide certain information on a continuing basis. DESCRIPTION OF THE CITY . . . The City is a political subdivision of the State of Texas located in Maverick County operating as a home-rule city under the laws of the State of Texas and a home rule charter initially approved by voters in 1964 (the “City Charter”). The City operates under the Council/Manager form of government where the Mayor and City Council members are elected for staggered two-year terms. The Council formulates operating policy for the City while the City Manager is the chief administrative officer. Some of the services that the City provides are: public safety (police and fire protection), highways and streets, water and sanitary sewer utilities, health and social services, culture-recreation, public transportation, public improvements, planning and zoning, and general administrative services. The 2010 Census population for the City was 23,575. The City covers approximately 13.99 square miles.

THE BONDS DESCRIPTION OF THE BONDS . . . The Bonds are dated March 1, 2012 and mature on March 1 in each of the years and in amounts shown on the inside cover page hereof. Interest will accrue from March 1, 2012 (the “Dated Date”) and will be payable on September 1 and March 1 of each year, commencing September 1, 2012, and will be calculated on the basis of a 360-day year of twelve 30-day months. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially delivered only to Cede & Co., the nominee of The Depository Trust Company, New York, New York ("DTC"), acting as a securities depository (the “Securities Depository”), pursuant to Book-Entry-Only System described herein. The City reserves the right to discontinue the use of the Securities Depository. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or any integral multiple thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal 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 BONDS-Book-Entry-Only System" herein). AUTHORITY FOR ISSUANCE . . . The Bonds are being issued pursuant to the general laws of the State of Texas, particularly Chapter 1207, Texas Government Code, as amended, the City Charter, and the Ordinance. As authorized by Chapter 1207, the City delegated to the Mayor of the City the authority to execute an Approval Certificate evidencing final sales terms of the Bonds. The Approval Certificate was executed by the Mayor of the City on March 12, 2012. PURPOSE . . . Proceeds from the sale of the Bonds will be used to provide funds (i) refund certain outstanding obligations of the City, as described in Schedule I hereto (the “Refunded Bonds”) and (ii) pay the costs of issuing the Bonds.

REFUNDED BONDS . . . The Refunded Bonds, and interest due thereon, are to be paid on the scheduled interest payment dates and the redemption dates of such obligations from funds to be deposited with Wells Fargo Bank, N.A., Dallas, Texas, as escrow agent (the "Escrow Agent"), pursuant to an escrow agreement (the "Escrow Agreement") between the City and the Escrow Agent. The Ordinance provides that from the proceeds of the sale of the Bonds to the Underwriter, along with other lawfully available funds of the City, if any, the City will deposit with the Escrow Agent in an escrow fund (the "Escrow Fund") the amount necessary to

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accomplish the discharge and final payment of the Refunded Bonds. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds. Simultaneously with the issuance of the Bonds, the City will give irrevocable instructions to provide notice, if any, to the owners of the Refunded Bonds that the Refunded Bonds will be redeemed prior to stated maturity on which date money will be made available to redeem the Refunded Bonds from money held under the Escrow Agreement. Grant Thornton LLP, Minneapolis, Minnesota, will verify at the time of the delivery of the Bonds to the Underwriter the mathematical accuracy of the schedules provided by the Financial Advisor that demonstrate that the federal securities to be acquired and held in the Escrow Fund under the Escrow Agreement (the "Governmental Obligations") will mature and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund, will be sufficient to pay, when due, the principal of and interest on the Refunded Bonds. The Escrow Fund and the maturing principal of and interest on the Governmental Obligations will not be available to pay the Bonds. By the deposit of the Governmental Obligations and cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of the Refunded Bonds in accordance with law. In the opinion of Bond Counsel, in reliance upon the report of Grant Thornton LLP, firm banking and financial arrangements will have been made for the discharge and final payment of the Refunded Bonds pursuant to the Escrow Agreement, and, therefore, the Refunded Bonds will be deemed to be fully paid and no longer outstanding except for the purpose of being paid from the funds therefore provided in the Escrow Agreement (see "APPENDIX C – Form of Bond Counsel's Opinion"). The City has covenanted in the Escrow Agreement to make timely deposits to the Escrow Fund of any additional amounts required to pay the principal of and interest on the Refunded Bonds if, for any reason, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund are insufficient to make such payment.

REDEMPTION PROVISIONS OF THE BONDS . . . The City reserves the right to redeem Bonds stated to mature March 1, 2023, in whole or in part, in principal amounts of $5,000 or any integral multiple thereof (and, if within a stated maturity, selected at random and by lot by the Paying Agent/Registrar) on March 1, 2022, or any date thereafter, at the par value thereof plus accrued interest from the most recent interest payment date to the date fixed for redemption. If less than all of the Bonds within a stated maturity are to be redeemed, the particular Bonds to be redeemed shall be selected by lot or by other customary random method by the Paying Agent/Registrar. The Bonds may also be subject to mandatory sinking fund redemption in the event the Underwriters elect to aggregate two or more of the maturities as a term bond.

NOTICE OF REDEMPTION . . . At least 30 days prior to the date fixed for any redemption of any Bonds or portions thereof prior to stated maturity, the City shall cause notice of such redemption to be sent by United States mail, first-class postage prepaid, to the registered owner of each Bond or a portion thereof to be redeemed at its address as it appeared on the registration books of the Paying Agent/Registrar on the day such notice of redemption is mailed. By the date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or portions thereof which are to be so redeemed. If such notice of redemption is given and if due provision for such payment is made, all as provided above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price from the Paying Agent/Registrar out of the funds provided for such payment. Bonds of a denomination larger than $5,000 may be redeemed in part. Any Bonds to be partially redeemed must be surrendered in exchange for one or more new Bonds of the same stated maturity and interest rate for the unredeemed portion of the principal. The Paying Agent/Registrar and the City, so long as a Book-Entry-Only System is used for the Bonds, will send any notice of redemption, notice of proposed amendment to the Ordinance or other notices with respect to the Bonds only to DTC. Any failure by DTC to advise any DTC participant, or of any DTC participant or indirect participant to notify the beneficial owner, will not affect the validity of the redemption of the Bonds called for redemption or any other action premised on any such notice. Redemption of portions of the Bonds by the City will reduce the outstanding principal amount of such Bonds held by DTC. In such event, DTC may implement, through its Book-Entry-Only System, a redemption of such Bonds held for the account of DTC participants in accordance with its rules or other agreements with DTC participants and then DTC participants and indirect participants may implement a redemption of such Bonds from the beneficial owners. Any such selection of Bonds to be redeemed will not be governed by the Ordinance and will not be conducted by the City or the Paying Agent/Registrar. Neither the City nor the Paying Agent/Registrar will have any responsibility to DTC participants, indirect participants or the persons for whom DTC participants act as nominees, with respect to the payments on the Bonds or the providing of notice to DTC participants, indirect participants, or beneficial owners of the selection of portions of the Bonds for redemption. (See "THE BONDS-Book-Entry-Only-System" herein.)

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SECURITY FOR THE BONDS . . . The Bonds constitute direct obligations of the City payable as to principal and interest from an ad valorem tax levied, within the limits prescribed by law, against all taxable property in the City. TAX RATE LIMITATION . . . The City operates under a home-rule charter as authorized by Article XI, Section 5 of the Constitution of the State of Texas. The City Charter and applicable laws of the State of Texas restrict such tax levy to no more than $2.50 per $100 of assessed valuation for all municipal purposes including the payment of general obligation debt. The Texas Attorney General has adopted an administrative policy that generally prohibits the issuance of debt by a municipality, such as the City, if its issuance produces debt service requirements exceeding that which can be paid from $1.50 of the foregoing $2.50 maximum tax rate calculated at 90% collection. The issuance of the Bonds does not violate this constitutional provision or the Texas Attorney General’s administrative policy. PERFECTION OF SECURITY . . .Chapter 1208, as amended, Texas Government Code, applies to the issuance of the Bonds and the pledge of the ad valorem taxes thereto, and such pledge is, therefore, valid, effective, and perfected. Should Texas law be amended at any time while the Bonds are outstanding and unpaid, the result of such amendment being that the pledge of the ad valorem taxes is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to the registered owners of the Bonds a security interest in such pledge, the City agrees to take such measures as it determines are reasonable and necessary to enable a filing of a security interest in said pledge to occur. BOOK-ENTRY-ONLY SYSTEM . . . This section describes how ownership of the Bonds is to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and credited by DTC while the Bonds 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, the Financial Advisor, and the Underwriter believes the source of such information to be reliable, but take no responsibility for the accuracy or completeness thereof. The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds 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 certificate will be issued for the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world’s largest securities 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct 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 securities Bonds. 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 is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. 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 a Standard & Poor’s rating of: “AA+ (CreditWatch Negative)”. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Obligation (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC 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 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds 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 Bonds 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 Bonds; DTC’s records reflect only the

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identity of the Direct Participants to whose accounts such Bonds 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds 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 Paying Agent/Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds 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 City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest 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. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or Paying Agent/Registrar. Under such circumstances, in the event that a successor depository is not obtained, bonds are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City, the Financial Advisor, and the Underwriters believes to be reliable, but the City, the Financial Advisor, and the Underwriters take no responsibility for the accuracy thereof. USE OF CERTAIN TERMS IN OTHER SECTIONS OF THIS OFFICIAL STATEMENT . . . In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to "registered owners" should be read to include only DTC as the sole registered owner of the Bonds and, accordingly (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, (ii) all payments with respect to the Bonds will be made to DTC in its capacity as sole registered owner of the Bonds and (iii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC. PAYING AGENT/REGISTRAR . . . The initial Paying Agent/Registrar for the Bonds is Wells Fargo Bank, N.A., Dallas, Texas. 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 while the Bonds are outstanding and any successor Paying Agent/Registrar must be a commercial bank or trust company organized under the laws of the State or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the City will promptly cause a written notice thereof to be sent to each registered owner of the Bonds, by United States mail, first class, postage prepaid, which notice will also give the address of the new Paying Agent/Registrar. In the event the Book-Entry-Only System shall be discontinued, the interest on the Bonds shall be paid to the registered owners appearing on the registration books of the Paying Agent/Registrar at the close of business on the Record Date (hereinafter defined), and such interest shall be paid (i) by check sent United States mail, first class, postage prepaid to the address of the registered owner recorded in the registration books of the Paying Agent/Registrar or (ii) by such other method, acceptable to the Paying

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Agent/Registrar requested by, and at the risk and expense of, the registered owner. Principal of the Bonds will be paid to the registered owner at the stated maturity or earlier redemption upon presentation to the designated payment/transfer office of the Paying Agent/Registrar. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday or a day when banking institutions in the city where the designated payment/transfer office of the Paying Agent/Registrar is located are authorized to close, then the date for such payment shall be the next succeeding day which is not such a day, and payment on such date shall have the same force and effect as if made on the date payment was due. TRANSFER, EXCHANGE, AND REGISTRATION . . . In the event the Book-Entry-Only System shall be discontinued, the Bonds 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, 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. A Bond may be assigned by the execution of an assignment form on the Bond or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. A new Bond will be delivered by the Paying Agent/Registrar, in lieu of the Bond 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 Bond owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds 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 form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer will be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Bond(s) surrendered for exchange or transfer. The Paying Agent/Registrar is not required to make any such exchange, conversion or replacement of a Bond or portion thereof (i) during the period commencing with the close of business on any record date and ending with the opening of business on the next following principal or interest payment date and (ii) with respect to any Bond or portion thereof called for redemption prior to maturity within 45 days prior to its redemption date. 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 fifteenth day of the month preceding the interest payment date. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of past due interest ("Special Payment Date", which will be 15 days after the Special Record Date) must 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 registered owner of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. DEFAULT AND REMEDIES . . . The Ordinance does not establish specific events of default with respect to the Bonds. If the City defaults in the payment of the principal of or interest on the Bonds when due or the City defaults in the observance or performance of any of the covenants, conditions, or obligations of the City, the failure to perform which materially, adversely affects the rights of the owners, including but not limited to, their prospect or ability to be repaid in accordance with the Ordinance, any registered owner is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions. The issuance of a writ of mandamus may be sought if there is no other available remedy at law to compel performance of the Bonds or the Ordinance and the City's obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, so rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Ordinance does not provide for the appointment of a trustee to represent the interest of the Bondholders upon any failure of the City to perform in accordance with the terms of the Ordinance, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the registered owners. The Texas Supreme Court ruled in Tooke v. City of Mexia 49 Tex. Sup. Ct. J. 819 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the City’s sovereign immunity from a suit for money damages, Bondholders may not be able to bring such a suit against the City for breach of the Bonds or Ordinance covenants. Even if a judgment against the City could be obtained, it could not be enforced by direct levy and execution against the City's property. Further, the registered owners cannot themselves foreclose on property within the City or sell property within the City to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. 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 ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Bondholders 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

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in administering any proceeding brought before it. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. AMENDING THE ORDINANCE . . . The City may, without the consent of or notice to any registered owner, from time to time and at any time, amend the Ordinance in any manner not detrimental to the interests of the holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of registered owners holding a majority in aggregate principal amount of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions of the Ordinance; provided, however, that, without the consent of all registered owners of outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of and interest on the Bonds, reduce the principal amount thereof, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required for consent to any such amendment, addition, or rescission. DEFEASANCE . . .The Ordinance provides for the defeasance of the Bonds when the payment of the principal of and premium, if any, on the Bonds, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), is provided by irrevocably depositing with the Paying Agent/Registrar or other lawful entity, in trust (1) money sufficient to make such payment or (2) Defeasance Securities, certified by an independent public accounting firm of national reputation to mature as to principal and interest in such amounts and at such times to insure the availability, without, reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of the paying agent for the Bond. The Ordinance provides that “Defeasance Securities” means (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of any agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that 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 rating firm not less than “AAA” or its equivalent. The City has additionally reserved the right, subject to satisfying the requirements of (1) and (2) above, to substitute other Defeasance Securities for the Defeasance Securities originally deposited, to reinvest the uninvested moneys on deposit for such defeasance and to withdraw for the benefit of the City moneys in excess of the amount required for such defeasance. Upon such deposit as described above, such Bond shall no longer be regarded to be outstanding or unpaid. Provided, however, the City has reserved the option, to be exercised at the time of the defeasance of the Bond, to call for redemption, at an earlier date, those Bonds which have been defeased to their maturity date, if the City: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the Bond for redemption; (ii) gives notice of the reservation of the right to the owner of the Bond immediately following the making of the firm 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 BOND FUNDS . . . The proceeds of the Bonds will be applied as follows:

Sources of Funds: Par Amount 5,315,000.00$ Accrued Interest 18,666.39 Premium 462,076.95 Total Sources of Funds 5,795,743.34$

Uses of Funds: Deposit to Escrow Fund 5,585,079.26$ Cost of Issuance 110,786.94 Accrued Interest 18,666.39 Underwriter's Discount 37,630.20 Bond Insurance Premium 40,228.20 Additional Proceeds 3,352.35 Total Uses of Funds 5,795,743.34$

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BOND INSURANCE

BOND INSURANCE POLICY Concurrently with the issuance of the Bonds, Assured Guaranty Municipal Corp. ("AGM") will issue its Municipal Bond Insurance Policy for the Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. ASSURED GUARANTY MUNICIPAL CORP.

AGM is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary of Assured Guaranty Municipal Holdings Inc. ("Holdings"). Holdings is an indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO”. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure and structured finance markets. No shareholder of AGL, Holdings or AGM is liable for the obligations of AGM. AGM’s financial strength is rated “AA-” (stable outlook) by Standard and Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business (“S&P”) and “Aa3” (negative outlook) by Moody’s Investors Service, Inc. (“Moody’s”). An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGM in its sole discretion. In addition, the rating agencies may at any time change AGM’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGM. AGM only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn. Current Financial Strength Ratings On November 30, 2011, S&P published a Research Update in which it downgraded AGM’s financial strength rating from “AA+” to “AA-“. At the same time, S&P removed the financial strength rating from CreditWatch negative and changed the outlook to stable. AGM can give no assurance as to any further ratings action that S&P may take. Reference is made to the Research Update, a copy of which is available at www.standardandpoors.com, for the complete text of S&P’s comments. The most recent rating action by Moody’s on AGM took place on December 18, 2009, when Moody’s issued a press release stating that it had affirmed the “Aa3” insurance financial strength rating of AGM, with a negative outlook. Reference is made to the press release, a copy of which is available at www.moodys.com, for the complete text of Moody’s comments. Moody’s is in the process of reviewing AGL and its subsidiaries and there can be no assurance as to any ratings action that Moody’s may take with respect to AGM. For more information regarding AGM’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Capitalization of AGM At December 31, 2011, AGM’s consolidated policyholders’ surplus and contingency reserves were approximately $3,107,919,136 and its total net unearned premium reserve was approximately $2,171,861,791, in each case, in accordance with statutory accounting principles. AGM’s statutory financial statements for the fiscal year ended December 31, 2011, which have been filed with the New York State Department of Financial Services and posted on AGL’s website at http://www.assuredguaranty.com, are incorporated by reference into this Official Statement and shall be deemed to be a part hereof.

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Incorporation of Certain Documents by Reference Portions of the following document filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to AGM are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: (i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (filed by AGL with the SEC on February 29, 2012). All information relating to AGM included in, or as exhibits to, documents filed by AGL pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Assured Guaranty Municipal Corp.: 31 West 52nd Street, New York, New York 10019, Attention: Communications Department (telephone (212) 826-0100). Any information regarding AGM included herein under the caption “BOND INSURANCE – Assured Guaranty Municipal Corp.” or included in a document incorporated by reference herein (collectively, the “AGM Information”) shall be modified or superseded to the extent that any subsequently included AGM Information (either directly or through incorporation by reference) modifies or supersedes such previously included AGM Information. Any AGM Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded. Miscellaneous Matters AGM or one of its affiliates may purchase a portion of the Bonds or any uninsured bonds offered under this Official Statement and may hold such Bonds or uninsured bonds for investment or may sell or otherwise dispose of such Bonds or uninsured bonds at any time or from time to time. AGM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “BOND INSURANCE”.

BOND INSURANCE RISKS FACTORS

The following are risk factors relating to bond insurance. In the event of default of the payment of principal or interest with respect to the Bonds when all or some becomes due, any owner of the Bonds shall have a claim under the applicable bond insurance policy (the "Policy") issued by the bond insurance company (the "Bond Insurer") for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Policy will not insure against redemption premium, if any. The payment of principal and interest in connection with any mandatory or optional prepayment of the Bonds by the City which is recovered by the City from the bond owner as a voidable preference under applicable bankruptcy law is covered by the Policy, however, such payments will be made by the Bond Insurer at such time and in such amounts as would have been due absence such prepayment by the City unless the Bond Insurer chooses to pay such amounts at an earlier date. Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Bond Insurer without appropriate consent. The Bond Insurer may direct and must consent to any remedies and the Bond Insurer’s consent may be required in connection with amendments to any applicable Bond documents. In the event the Bond Insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Bonds will be payable solely from the moneys received pursuant to the applicable Bond documents. In the event the Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

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The long-term ratings on the Bonds are dependent in part on the financial strength of the Bond Insurer and its claims paying ability. The Bond Insurer’s financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Bond Insurer and of the ratings on the Bonds insured by the Bond Insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. The obligations of the Bond Insurer are general obligations of the Bond Insurer and in an event of default by the Bond Insurer, the remedies available may be limited by applicable bankruptcy law or other similar laws related to insolvency. Neither the City nor the Underwriters will make an independent investigation into the claims paying ability of any potential Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of any potential Bond Insurer is or will be given. Thus, when making an investment decision, potential investors should carefully consider the ability of the City to pay principal and interest on the Bonds and the claims paying ability of the Bond Insurer, particularly over the life of the investment.

AD VALOREM TAX INFORMATION

AD VALOREM TAX LAW . . . The appraisal of property within the City is the responsibility of the Maverick County Appraisal District (the “Appraisal District”). Excluding agricultural and open-space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under the Texas Tax Code to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. The value placed upon property within the Appraisal District is subject to review by three members appointed by the Board of Directors of the Appraisal District (the “Appraisal Review Board”). The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Texas Tax Code (the "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 taxation. Article VIII of the Texas Constitution ("Article VIII") and State law provides 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 Article VIII, Section 1-b and other State law, the governing body of a political subdivision, at its option, may grant: (1) an exemption of not less than $3,000 of the market value of residence homesteads 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 $5,000. Other State law and Article VIII, Section 2 allow for 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 amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000A disabled veteran who receives from the United States Department of Veterans Affairs or its successor 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 1-d) and open-space land (Section 1-d-1), 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 both Section 1-d and 1-d-1. Nonbusiness vehicles, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation. Article VIII, Section 1-j provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. The exemption became effective for the 1990-91 fiscal year and thereafter, unless action to tax such property has been taken prior to April 1, 1990. Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal.

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The City and the other taxing bodies within its territory may agree to jointly create tax increment financing zones, under which the tax values on property in the zone are "frozen" at the value of the property at the time of creation of 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 its 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 the agreement. The abatement agreement could last for a period of up to ten years. Under Article VIII of the Constitution and under State law, a county, a municipality or a junior college, at its option, may provide for a prohibition on increasing the total ad valorem tax, except for increases attributable to certain improvements, on the residence homestead of a disabled person or persons 65 years of age or older, above the amount of tax imposed in the year such residence qualified for such exemption. 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 tax limitation. Such freeze on ad valorem taxes is transferable to a different residence homestead and to a surviving spouse living in such homestead who is disabled or is at least 55 years of age. Once established, the tax rate limitation may not be repealed or rescinded. The City can make no representations or predictions concerning the impact such a tax limitation would have on the City’s tax rate, financial condition or ability to make debt service payments.

Article VIII, section 1-n of the Texas Constitution provides for the exemption from taxation of “goods-in-transit.” “Goods-in-transit” is defined by a provision of the Tax Code, which is effective for tax years 2008 and thereafter, as personal property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days of the date the property was acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products, aircraft and special inventory, including motor vehicle, vessel and out-board motor, heavy equipment and manufactured housing inventory. The Tax Code provision permits local governmental entities, on a local option basis, to take official action by January 1 of the year preceding a tax year, after holding a public hearing, to tax goods-in- transit during the following tax year. A taxpayer may receive only one of the freeport exemptions or the goods-in-transit exemptions for items of personal property.

The appraised value of a residence homestead for a tax year may not exceed the lesser of (1) the market value of the property or (2) the sum of (A) ten percent (10%) of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised; (B) the appraised value of the property for the last year in which the property was appraised; and (C) the market value of all new improvements to the property.

EFFECTIVE TAX RATE AND ROLLBACK TAX RATE . . . The City must annually calculate and publicize its “effective tax rate” and “rollback tax rate.” “Effective tax rate” means the rate that will produce the previous year’s total tax levy (adjusted) from this year’s total taxable values (adjusted). “Adjusted” means lost values are not included in the calculation of the previous year’s taxes and new values are not included in the current year’s taxable values. “Rollback tax rate” means the rate that will produce the previous year’s maintenance and operation tax levy (adjusted) from the current year’s values (adjusted) multiplied by 1.08 plus a rate that will produce the current year’s debt service from the current year’s values (unadjusted) divided by the anticipated tax collection rate. Section 26.05 of the Property Tax Code provides that the governing body of a taxing unit is required to adopt the annual tax rate for the unit before the later of September 30 or the 60th day after the date the certified appraisal role is received by the taxing unit, and failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit for the tax year to be the lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures and (2) a rate for debt service. The City may not adopt a tax rate that exceeds the lower of the effective tax rate or rollback tax rate until it has held two public hearings on the proposed rate following notice to the taxpayers and otherwise complied with the Property Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City, by petition, may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year. Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defined tax rates.

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PROPERTY ASSESSMENT AND TAX PAYMENT . . . Property within the City is assessed as of January 1 of each year. (Business inventory may, at the option of the taxpayer, be assessed as of September 1; oil and gas reserves are assessed on the basis of a valuation process which uses an average of the daily price of oil and gas for the prior year). Taxes become due October 1 of the same year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to pay taxes on homesteads in four installments with the first due on January 31 of each year and the final installment due on August 1. PENALTIES AND INTEREST . . . Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows: Month Penalty Interest Total February 6% 1% 7% March 7% 2% 9% April 8% 3% 11% May 9% 4% 13% June 10% 5% 15% July 12% 6% 18% After July, penalty remains at 12%, and interest increases at the rate of 1% each month. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% is added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. CITY APPLICATION OF TAX CODE . . . The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000; disabled veterans are granted an exemption of $5,000 to $12,000. The City has not granted an additional homestead exemption of the market value of residence homesteads; minimum exemption of $5,000. See “Table 1 – Valuation, Exemptions and Debt Obligations” for a listing of the amounts of the exemptions described above. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness personal property; and the City collects its own taxes. The City does not permit split payments, and discounts are not allowed. The City does not tax freeport property. The City does not collect the additional one-half cent sales tax for reduction of ad valorem taxes. The City has adopted a tax abatement policy. The City has not created a tax increment financing zone.

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TABLE 1 - VALUATION, EXEMPTIONS AND DEBT OBLIGATIONS

2011 Market Valuation Established by Maverick County Appraisal District (1) 1,317,513,756$

Less Exemptions/Reductions at 100% of Market Value: $15,000 Residential Homestead Exemptions (State Mandated) 115,106,708 Over 65 and Disabled 14,131,200 Disabled Veterans Exemptions 2,137,803 Productivity Loss 7,389,097 Freeport Exemption 79,790,430 Loss to 10% Residential Homestead Cap 1,096,646 219,651,884

2011 Net Taxable Asssessed Valuation 1,097,861,872$

City Funded Debt Payable From Ad Valorem Taxes (as of 09/01/11): Combination Tax and Revenue Certificates of Obligation, Series 1998 167,000$ Tax Refunding Bonds, Series 2002 235,000

Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2003 390,000 (2)

Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2005 3,150,000 Public Property Financial Contractual Obligation, Series 2008 1,245,000 Tax Refunding Bonds, Series 2010 6,410,000 Tax Refunding Bonds, Series 2011 4,815,000 Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2011 2,936,000

The Bonds 5,315,000

Total Funded Debt Payable From Ad Valorem Taxes 24,663,000$

Interest and Sinking Fund (as of 9/30/010) 395,196$

Ratio Funded Debt to Taxable Assessed Valuation 2.25%

2012 Estimated Population - 27,185 Per Capita Taxable Assessed Valuation - 40,385$

Per Capita Funded Debt - 907$ _______________ (1) Source: Texas Comptroller of Public Accounts, Property Tax Division. (2) Excludes the Refunded Bonds.

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TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY (1)

% of % of % ofCategory Amount Total Amount Total Amount Total

Real, Residential, Single-Family 559,124,911$ 42.44% 547,533,403$ 47.76% 538,104,838$ 47.41%Real, Residential, Multi-Family 40,936,760 3.11% 39,104,350 3.41% 34,917,950 3.08%Real, Vacant Lots/Tracts 56,900,531 4.32% 57,250,613 4.99% 60,630,430 5.34%Real, Acreage (Land Only) 21,572,540 1.64% 21,680,429 1.89% 21,298,693 1.88%Real, Farm and Ranch Improvements 671,880 0.05% 657,110 0.06% 657,110 0.06%Real, Commercial 309,650,294 23.50% 269,125,307 23.47% 261,227,888 23.02%Real, Industrial 18,261,680 1.39% 16,122,880 1.41% 15,131,870 1.33%Real and Tangible Personal, Utilities 18,033,490 1.37% 18,862,070 1.65% 15,936,230 1.40%Tangible Personal, Commercial 91,409,030 6.94% 91,187,310 7.95% 172,546,710 15.20%Tangible Personal, Industrial 83,135,270 6.31% 82,289,970 7.18% 10,828,160 0.95%Tangible Personal, Mobile Homes 467,130 0.04% 504,000 0.04% 552,200 0.05%Tangible Personal, Other - 0.00% - 0.00% - 0.00%Special Inventory 2,424,090 0.18% 2,128,490 0.19% 3,184,930 0.28%Total Exempt Property 114,926,150 8.72% - 0.00% - 0.00%Total Appraised Value Before Exemptions 1,317,513,756$ 100.00% 1,146,445,932$ 100.00% 1,135,017,009$ 100.00%Less: Total Exemptions/Reductions (219,651,884) (102,520,986) (57,262,300) Taxable Assessed Value 1,097,861,872$ 1,043,924,946$ 1,077,754,709$

2008% of % of

Category Amount Total Amount TotalReal, Residential, Single-Family 525,694,356$ 49.13% 484,913,214$ 50.03%Real, Residential, Multi-Family 34,528,300 3.23% 34,412,110 3.55%Real, Vacant Lots/Tracts 62,641,430 5.85% 57,320,757 5.91%Real, Acreage (Land Only) 21,732,802 2.03% 19,192,314 1.98%Real, Farm and Ranch Improvements 764,720 0.07% 764,720 0.08%Real, Commercial 247,092,845 23.09% 225,241,410 23.24%Real, Industrial 14,229,520 1.33% 13,262,800 1.37%Real and Tangible Personal, Utilities 15,274,800 1.43% 14,319,470 1.48%Tangible Personal, Commercial 132,644,910 12.40% 98,210,030 10.13%Tangible Personal, Industrial 10,853,620 1.01% 16,878,010 1.74%Tangible Personal, Mobile Homes 635,090 0.06% 726,810 0.07%Tangible Personal, Other - 0.00% - 0.00%Special Inventory 4,011,880 0.37% 4,033,830 0.42%Total Appraised Value Before Exemptions 1,070,104,273$ 100.00% 969,275,475$ 100.00%Less: Total Exemptions/Reductions (70,557,647) (45,322,551) Taxable Assessed Value 999,546,626$ 923,952,924$

Taxable Appraised Value For Fiscal Year Ended September 30,

2009Taxable Appraised Value For Fiscal Year Ended September 30,

201020112012

(1) Source: the Comptroller’s Office. The above figures reflect the taxable appraised values as stated at the beginning of each tax year to the State Property Tax Board. Any difference between these figures and taxable assessed valuations are due to adjustments and corrections to respective tax roles.

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TABLE 3 - VALUATION AND FUNDED DEBT HISTORY

Ratio FundedFiscal Taxable Funded Debt Debt toYear Taxable Assessed Outstanding Taxable Funded

Ended Estimated Assessed Valuation at End Assessed Debt

9/30 Population Valuation (1) Per Capita of Year Valuation Per Capita2003 22,765 619,237,109$ 27,201$ 4,601,000$ 0.74% 202$

2004 22,765 659,190,380 28,957 11,533,000 1.75% 507

2005 22,765 727,955,475 31,978 10,867,000 1.49% 477

2006 25,571 785,439,876 30,716 12,714,000 1.62% 497 2007 25,571 858,016,407 33,554 18,278,000 2.13% 715

2008 26,285 923,952,924 35,151 17,940,000 1.94% 683

2009 26,285 999,546,626 38,027 19,455,000 1.95% 740 2010 26,285 1,077,754,709 41,003 18,375,000 1.70% 699

2011 27,185 1,043,924,946 38,401 23,415,000 2.24% 861 2012 27,185 1,097,861,872 40,385 24,663,000 (2) 2.25% 907

___________________ (1) The valuations shown are the certified Taxable Assessed Valuations reported annually to the Maverick County Appraisal

District. The valuations are subject to change during the ensuing year due to settlement of contested valuations or other similar matters.

(2) Includes the Bonds and excludes the Refunded Bonds. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY

FiscalYear

Ended Tax General Interest and % Current % Total9/30 Rate Fund Sinking Fund Tax Levy Collections Collections

2003 0.21050 0.21050 - 1,212,792 89.49% 98.84%2004 0.28510 0.21680 0.06830 1,765,445 91.05% 98.02%

2005 0.29715 0.22540 0.07175 1,958,784 88.75% 98.33%2006 0.30910 0.22540 0.08370 2,250,110 90.00% 96.55%2007 0.31379 0.22540 0.08839 2,464,632 89.76% 99.55%2008 0.28560 0.22540 0.06020 2,450,495 91.19% 99.77%2009 0.29916 0.22540 0.07376 2,730,562 91.85% 100.53%2010 0.31000 0.22540 0.08460 3,098,595 90.69% 97.54%2011 0.40582 0.30367 0.10215 4,373,744 91.68% 98.03%2012 0.44803 0.32493 0.12310 (1) (1) (1)

Distribution

________ (1) In process of collection.

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TABLE 5 -TEN LARGEST TAXPAYERS

(1)

% of Total2011 Assessed Assessed

Name of Taxpayer Nature of Property Valuation ValuationFort Duncan Medical Center Medical 41,480,705$ 3.78%Enterprise Asset Management Inc. Shopping Mall 13,303,030 1.21%Wal-Mart Stores East, Inc. Retail/Grocery 11,512,220 1.05%Wal-Mart Stores East, Inc. Retail 9,174,850 0.84%AEP Texas Central Co. Utility 8,439,160 0.77%Lowe's Home Center Retail 6,862,450 0.63%H.E.B. Grocery Co. Grocery 6,352,270 0.58%Monsa Ltd. Development 5,948,508 0.54%Fort Duncan Medical Center Medical 5,180,740 0.47%BRE/LQ TX Properties LP Utility 4,686,630 0.43%

112,940,563$ 10.29%

______ (1) Source: Texas State Comptroller – Property Tax Division. DEBT AND TAX RATE LIMITATION No direct debt limitation is imposed on the City under current Texas law. In addition, Article XI, Section 5 of the State Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 assessed valuation for all City purposes. The City operates under a home rule charter that adopts this Constitutional provision. The Texas Attorney General has adopted an administrative policy that prohibits the issuance of debt by a municipality, such as the City, if its issuance produces debt service requirements exceeding that which can be paid from $1.50 of the foregoing $2.50 maximum tax rate calculated at 90% collection. The issuance of the Bonds will not exceed the above described limits or violate the Texas Attorney General’s administrative policy. The following obligations, among others, may be issued by the City: The following obligations, among others, may be issued by the City: Ad valorem tax-supported debt to finance capital improvements and to refund obligations previously issued for such

purpose. A majority vote of the qualified voters is ordinarily required to authorize the issuance of ad valorem tax-supported debt, other than refunding bonds, certificates of obligations, tax anticipation notes, and public property finance contractual obligations.

Certificates of obligation may be issued for the purpose of paying contractual obligations incurred in the construction of

public works or the purchase of land, materials, and other supplies or services for the City’s needs and for professional services without an election except under certain circumstances. The certificates of obligation may be refunded by ad valorem tax-supported bonds without an election. In addition, the City may issue certificates of obligation with a pledge of both tax and revenues derived from the operation of the facility to be acquired, or from any other lawful source, provided that the City otherwise has the right to pledge the revenues involved. Authority for the issuance of certificates of obligation is subject to notice by publication and right of referendum by the voters.

Contractual obligations, generally to finance personal property, and tax anticipation notes payable from ad valorem taxes

may be issued for capital improvements. The contractual obligations and tax anticipation notes may be refunded by ad valorem tax-supported bonds without an election. The issuance of contractual obligations and tax anticipation notes does not require publication of notice or voter approval. Tax anticipation notes are limited to seven years amortization or less.

Revenue bonds may be issued for certain purposes, which include the financing of the water, municipal drainage and

sanitary sewer systems, electric and gas systems, convention centers, airports, and parking systems. The revenue bond indebtedness is not considered in determining the legal debt margin on ad valorem tax-supported obligations. Revenue bond indebtedness, in certain cases, can be refunded by ad valorem tax-supported bonds without an election.

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TABLE 6 – ESTIMATED OVERLAPPING DEBT

City's2011/2012 Overlapping Authorized

Taxable 2011/2012 Total Estimated Funded Debt But UnissuedAssessed Tax Funded % As Of Debt As Of

Taxing Jurisdiction Valuation Rate Debt Applicable 09/01/11 09/01/11

City of Eagle Pass 1,097,861,872$ 0.40582$ 24,663,000$ (1) 100.00% 24,663,000$ (1) -$

Eagle Pass ISD 1,716,802,679 1.17137 68,495,000 59.71% 40,898,365 - Maverick County 1,727,695,666 0.40190 31,930,000 60.42% 19,292,106 -

Total Direct and Overlapping G.O. Tax Debt 84,853,471$

Ratio of Direct and Overlapping G.O. Tax Debt to Taxable Assessed Valuation 7.73%

Per Capita Overlapping G.O. Tax Debt 3,121$

_______ (1) Includes the Bonds and excludes the Refunded Bonds.

TABLE 6A - ESTIMATED INTEREST AND SINKING FUND BUDGET PROJECTION

Estimated General Purpose Debt Service Requirements, Fiscal Year Ending 9-30-12 2,583,863$

Interest and Sinking Fund, 9-30-11 395,196$ 2011 Interest and Sinking Fund Tax Levy @ 90% Collection 1,042,969 Budgeted Transfers 5,890,622 Estimated Investment Income 45,880 7,374,667

Estimated Balance, 9-30-2012 4,790,804$

TABLE 7 - AUTHORIZED BUT UNISSUED DEBT

Currently, the City does not have any authorized but unissued tax bonds. TABLE 8 - OTHER OBLIGATIONS The following is a schedule of lease payments under capital lease agreements as of September 30, 2010:

As of September 30, 2010, the City held the following Cash:

Cash on hand in finacial institutions $ 11,959,273 Certificates of Deposits 12,925,182 Cash held by others -

Total $ 24,884,455

Source: The City of Eagle Pass, Texas CAFR 9/30/2010 PENSION FUND

The City provides pension benefits for all of its full-time employees through the Texas Municipal Retirement System ("TMRS"), a State-wide administered pension plan. The City makes annual contributions to the plan equal to the amounts accrued for pension expense. (For more detailed information concerning the retirement plan, see Appendix B, "Excerpts from the City's Comprehensive Annual Financial Report" - Note #7.)

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DEBT INFORMATION TABLE 9 –DEBT SERVICE REQUIREMENTS

FiscalYear Total % of

Ended Existing Debt Service (1) Debt Service Principal9/30 Principal Interest Total Principal Interest Total Requirements Retired

2012 1,792,000$ 821,461$ 2,613,461$ 55,000$ 81,950$ 136,950$ 2,750,411$ 2013 1,578,000 644,871 2,222,871 25,000 162,550 187,550 2,410,421 2014 1,307,000 588,848 1,895,848 365,000 158,650 523,650 2,419,498 2015 1,344,000 537,010 1,881,010 375,000 151,250 526,250 2,407,260 2016 957,000 494,305 1,451,305 385,000 143,650 528,650 1,979,955 32.68%2017 952,000 461,309 1,413,309 390,000 135,900 525,900 1,939,209 2018 996,000 425,685 1,421,685 400,000 126,000 526,000 1,947,685 2019 1,030,000 386,783 1,416,783 415,000 113,775 528,775 1,945,558 2020 1,050,000 347,100 1,397,100 425,000 101,175 526,175 1,923,275 2021 1,077,000 306,782 1,383,782 440,000 88,200 528,200 1,911,982 61.34%2022 797,000 270,770 1,067,770 620,000 69,200 689,200 1,756,970 2023 765,000 240,243 1,005,243 695,000 42,900 737,900 1,743,143 2024 814,000 209,407 1,023,407 725,000 14,500 739,500 1,762,907 2025 2,117,000 155,134 2,272,134 - 2,272,134 2026 870,000 100,102 970,102 - 970,102 90.91%2027 913,000 65,981 978,981 - 978,981 2028 405,000 41,245 446,245 - 446,245 2029 428,000 26,293 454,293 - 454,293 2030 456,000 10,418 466,418 - 466,418 2031 74,000 1,114 75,114 - 75,114 100.00%2032 - - - -

19,722,000$ 6,134,861$ 25,856,861$ 5,315,000$ 1,389,700$ 6,704,700$ 32,561,561$

The Bonds

(1) Less Refunded Bonds.

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FINANCIAL INFORMATION

TABLE 10 - GENERAL FUND REVENUES AND EXPENDITURE HISTORY (1)

Revenues 2011 2010 2009 2008 2007Taxes 8,455,770$ 7,794,331$ 7,350,010$ 7,383,042$ 6,797,691$ Licenses and Permits 303,656 275,355 294,927 361,758 347,901 Intergovernmental Revenue 483,332 365,201 151,170 258,580 132,254 Charges for Services 1,425,264 1,622,066 1,497,316 1,196,594 1,330,149 Use of City Monies and Property - - - - - Fines and Forfeitures 415,109 502,509 496,322 630,864 681,308 Miscellaneous 254,206 186,885 497,144 298,894 461,502 Total Revenues 11,337,337$ 10,746,347$ 10,286,889$ 10,129,732$ 9,750,805$

ExpendituresGeneral Government 3,348,296$ 3,002,933$ 2,959,765$ 3,232,237$ 2,922,933$ Public Safety 8,108,078 7,658,487 7,507,414 7,718,049 7,483,423 Sanitation 263,431 246,439 277,124 294,178 298,254 Culture and Recreation 1,848,995 1,725,413 1,876,285 1,762,799 1,790,671 Highways and Streets 1,923,972 1,749,248 1,242,303 1,362,549 1,791,384 Debt Service - - - - - Capital Outlays 760,277 419,502 33,309 919,528 370,837 Total Expenditures 16,253,049$ 14,802,022$ 13,896,200$ 15,289,340$ 14,657,502$

Excess (Deficiency) of Revenues Over Expenditures (4,915,712)$ (4,055,675)$ (3,609,311)$ (5,159,608)$ (4,906,697)$

Budgeted Transfers In 5,890,622 5,455,587 5,251,030 6,195,509 5,906,430 Other Resources 78,704 14,108 Budgeted Transfers Out (392,488) - 266,418 22,087 Transfers to component units - (575,625) (706,508) (1,602,036) (956,767) Capital-Related debt issued - - - - - Proceeds from Capital Leases - - - 547,970 - Total Transfers 5,576,838$ 4,894,070$ 4,810,940$ 5,163,530$ 4,949,663$

Revenues & Other Sources and 838,395$ 838,395$ 1,201,629$ 3,922$ 42,966$ (Uses) Over (Under) Expenditures)

Change in Fund Balance 661,126 Beginning Fund Balance 4,689,712 3,851,317 2,649,684 2,645,762 2,889,622 Prior Period Adjustment 37,069 - - - (286,826)

Ending Fund Balance 5,387,907$ (2) 4,689,712$ 3,851,317$ 2,649,684$ 2,645,762$

For Fiscal Year Ended September 30

_______________________ (1) Source: The City of Eagle Pass, Tx Comprehensive Annual Financial Report. (2) Unaudited Comprehensive Annual Financial Report 9/30/11.

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TABLE 11 - MUNICIPAL SALES TAX HISTORY The City has adopted the Municipal Sales and Use Tax Act, Texas Tax Code, Chapter 321, which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Bonds. Collections and enforcement are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. Revenue from this source, for the years shown, has been:

% of Equivalent ofCalendar Total Ad Valorem Ad Valorem Per

Year Collected Tax Levy Tax Rate Capita 2002 2,582,235 157.20% 0.4482 113 2003 2,600,187 147.28% 0.4199 114 2004 2,829,251 143.31% 0.4292 124 2005 3,096,943 135.31% 0.4254 136 2006 3,521,955 142.59% 0.4484 138 2007 3,664,223 140.16% 0.4271 143 2008 3,935,806 129.73% 0.4260 150 2009 3,648,451 105.71% 0.3650 139 2010 3,856,026 102.25% 0.3694 142

______________ (1) Based on estimated population for all years with the exception of 2010 U.S. Census.

FINANCIAL POLICIES Basis of Accounting . . . The governmental funds utilize the modified accrual basis of accounting. Under this method revenues are recognized in the accounting period in which they become both available and measurable to finance expenditures of the current period. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except expenditures for debt service, prepaid expenses, and other long-term obligations which are recognized when paid. All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. Accounts receivable for services are recorded when billed. General Fund Balance . . . The City's policy is to achieve and maintain a General Fund balance equivalent to at least three months operating cost of the general operating budget. This should be sufficient to provide financing for necessary projects and meet unanticipated contingencies or fiscal emergencies. Debt Service Fund Balance . . . A proposed budget is filed with the City Secretary and presented to the City Council at least 30 days prior to the beginning of the next fiscal year. Management has, in the past, tried to present the proposed budget in early August of each year in order for the City Council and the public to have ample time to review it. Because public participation is an essential element of the budget process, public hearings are conducted throughout the month of July. The budget is adopted by the City Council by ordinance no later than the twenty-fifth day of the last month of that fiscal year. Use of Bond Proceeds, Grants, etc. . . . Bond proceeds are utilized to fund capital improvement projects. Grant proceeds are generally utilized for capital improvement projects unless otherwise specifically required under the terms of grant. Budgetary Procedures . . . The City adheres to the following procedures in establishing the operating budgets reflected in the general purpose financial statements: (1) Sixty (60) days prior to the beginning of each fiscal year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning October 1. (2) Public hearings are conducted at which all interested persons may comment concerning the proposed budget. (3) Council adopts the budget on or before the last day of the month of the fiscal year currently ending through passage of an appropriation ordinance and tax levying ordinance. If the City Council fails to adopt the budget at that time, the budget of the previous year is deemed to be adopted.

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INVESTMENTS

Available investable funds of the City are invested as authorized and required by the Texas Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended (the “Act”) and in accordance with an Investment Policy approved by the City Council of the City. The Act requires that the City established an investment policy to ensure that City funds are invested only in accordance with State law. The City has established a written investment policy adopted on March 13, 1999. The City’s investments are managed by its Finance Director, who, in accordance with the Investment Policy, reports investment activity to the City Council. Under Texas law, the City is authorized to invest in (1) obligations, including letters of credit, of the United States or its agencies and instrumentalities; (2) direct obligations of the State or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State or the United States or their respective agencies and instrumentalities; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than "A" or its equivalent; (6)(a) certificates of deposit and share certificates issued by a depository institution that has its main office or branch office in the State of Texas, that are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund or their respective successors, or are secured as to principal by obligations described in clauses (1) through (5) and clause (13) or in any other manner and amount provided by law for City deposits, and in addition (b) the City is authorized, subject to certain conditions, to invest in certificates of deposit with a depository institution that has its main office or branch office in the State of Texas and that participates in the Certificate of Deposit Account Registry Service® network (CDARS®) and as further provided by Texas law; (7) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), requires the securities being purchased by the City to be pledged to the City, held in the City's name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City, and are placed through a primary government securities dealer or a financial institution doing business in the State; (8) bankers' acceptances with the remaining term of 270 days or less, which will be liquidated in full at maturity, is eligible for collateral for borrowing from a Federal Reserve Bank, if the short-term obligations of the accepting bank or its parent are rated at least "A-1" or "P-1" or the equivalent by at least one nationally recognized credit rating agency; (9) commercial paper with a stated maturity of 270 days or less and is rated at least "A-1" or "P-1" or the equivalent by either (i) two nationally recognized credit rating agencies or (ii) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank; (10) no-load money market mutual funds registered with and regulated by the United States Securities and Exchange Commission that have a dollar weighted average portfolio maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and provide the City with a prospectus and other information required by the Securities and Exchange Act of 1934 or the Investment Act of 1940; (11) no-load mutual funds registered with the United States Securities and Exchange Commission that have an average weighted maturity of less than two years; invests exclusively in obligations described in the preceding clauses; are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than "AAA" or its equivalent; and conforms to the requirements for eligible investment pools; (12) public funds investment pools that have an advisory board which includes participants in the pool and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than "AAA" or "AAA-m" or its equivalent or no lower than investment grade with a weighted average maturity no greater than 90 days; (13) bonds issued, assumed, or guaranteed by the State of Israel; and (14) guaranteed investment contracts secured by obligations of the United States of America or its agencies and instrumentalities, other than prohibited obligations described in the next succeeding paragraph, with a defined termination date, and pledged to the City and deposited with the City or a third party selected and approved by the City. Entities such as the City may enter into securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (5) and clause (13) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than "A" or its equivalent or (c) cash invested in obligations described in clauses (1) through (5) and clause (13) above, clause (9) above and clauses (10) and (11) above, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the City or a third party selected and approved by the City; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pool is rated no lower than "AAA" or "AAA-m" or an equivalent by at least one nationally recognized rating service. The City may also contract with an investment management firm registered under the Investment Advisors Act of 1940 (15 U.S.C. Section 80b-1, et seq.) or with the State Securities Board to provide for the investment and management of its public

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funds or other funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City is specifically prohibited from investing in (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.

INVESTMENT POLICIES . . . Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups, and the methods to monitor the market price of investments acquired with public funds and the requirement for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus payment basis. All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived". At least quarterly the investment officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value, the fully accrued interest, and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS . . . Under Texas law, the City is additionally required to (1) annually review its adopted policies and strategies; (2) adopt an order or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the said order or resolution; (3) require any investment officers with personal business relationships or relative with firms seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to (a) receive and review the City's investment policy; (b) acknowledge that reasonable controls and procedures have been implemented to preclude imprudent investment activities; and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (6) provide specific investment training for the Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the investments of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (8) restrict the investment in mutual funds in the aggregate to more than 80% of the City s monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service and further restrict the investment in non-money market mutual funds of any portion of bond proceeds, reserves and funds held for debt service and to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; and (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements;, and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in the investment transactions with the City.

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TABLE 12 - CURRENT INVESTMENTS The City has its own written investment policy. No funds of the City are invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index, or commodity. As of September 30, 2010, the City's investments were as follows:

As of September 30, 2010, the City held the following Cash:

Cash on hand in finacial institutions $ 11,959,273 Certificates of Deposits 12,925,182 Cash held by others -

Total $ 24,884,455

Source: The City of Eagle Pass, Texas CAFR 9/30/2010

TAX MATTERS

TAX EXEMPTION . . . The delivery of the Bonds is subject to the opinion of Escamilla, Poneck & Cruz, LLP, San Antonio, Texas to the effect that interest on the Bonds for federal income tax purposes (1) will be excludable from the gross income, as defined in section 61 of the Internal Revenue Code of 1986, as amended to the date of such opinion (the "Code"), pursuant to section 103 of the Code and existing regulations, published rulings, and court decisions, and (2) will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals or, except as hereinafter described, corporations. A form of Bond Counsel's opinion is reproduced as Appendix C. The statutes, regulations, rulings, and court decisions on which such opinion is based are subject to change. Interest on all tax-exempt obligations, including the Bonds, owned by a corporation will be included in such corporation's adjusted current earnings for tax years beginning after 1989, for purposes of calculating the alternative minimum taxable income of such corporation, other than an S corporation, a qualified mutual fund, a financial asset securitization investment trust, a real estate investment trust (“REIT”), or a real estate mortgage investment conduit (“REMIC”). A corporation's alternative minimum tax base is the basis on which the alternative minimum tax imposed by section 55 of the Code will be computed. In rendering the foregoing opinions, Bond Counsel will rely upon the representations and certifications of the City made in a certificate dated the date of delivery of the Bonds pertaining to the use, expenditure, and investment of the proceeds of the Bonds will assume continuing compliance with the provisions of the Ordinance subsequent to the issuance of the Bonds and will rely on the verification report prepared by Grant Thorton LLP, Certified Public Accountant. The Ordinance contains covenants by the City with respect to, among other matters, the use of the proceeds of the Bonds, the manner in which the proceeds of the Bonds are to be invested, the reporting of certain information to the United States Treasury, and rebating any arbitrage profits to the U.S. Treasury. Failure to comply with any of these covenants would cause interest on the Bonds to be includable in the gross income of the owners thereof from date of the issuance of the Bonds. Except as described above, Bond Counsel will express no other opinion with respect to any other federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, owners of an interest in a financial asset securitization investment trust, individuals otherwise qualifying for the earned income credit, and taxpayers who maybe deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances. Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the Issuer described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Bonds is commenced, under current procedures the Service is likely to treat the Issuer as the "taxpayer," and the Owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Bonds, the Issuer may have different or

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conflicting interests from the Owners. Public awareness of any future audit of the Bonds could adversely affect the value and liquidity of the Bonds during the pendency of the audit, regardless of its ultimate outcome. TAX ACCOUNTING TREATMENT OF DISCOUNT AND PREMIUM ON CERTAIN BONDS . . . The initial public offering price of certain Bonds (the "Discount Bonds") may be less than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will, upon the disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the Bonds described above under "Tax Exemption". Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an original purchaser in a different amount from the amount of the payment denominated as interest actually received by the original purchaser during the tax year. However, such interest may be required to be taken into account in determining the alternative minimum taxable income of a corporation, for purposes of calculating a corporation's alternative minimum tax imposed by section 55 of the Code, and the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, S corporations with "subchapter C" earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, owners of an interest in a financial asset securitization investment trust, individuals otherwise qualifying for earned income credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for federal income tax purposes of and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds (the "Premium Bonds") may be greater than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes premium to the initial purchaser of such Premium Bonds. The basis for federal income tax purposes of a Premium Bond in the hands of such initial purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser's yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. QUALIFIED TAX-EXEMPT OBLIGATIONS FOR FINANCIAL INSTITUTIONS...Section 265(a) of the Code provides, in pertinent part, that interest paid or incurred by a taxpayer, including a "financial institution," on indebtedness incurred or continued to purchase or carry tax-exempt obligations is not deductible in determining the taxpayer's taxable income. Section 265(b) of the Code provides an exception to the disallowance of such deduction for any interest expense paid or incurred on indebtedness of a taxpayer that is a "financial institution" allocable to tax-exempt obligations, other than " private activity bonds," that are designated by a "qualified small issuer" as "qualified tax-exempt obligations." A "qualified small issuer" is any governmental issuer (together with any "on-behalf of" and "subordinate" issuers) who issues no more than $10,000,000 of tax-exempt obligations during the calendar year, except that such amount will be $30,000,000 for taxable years beginning after December 31, 2008 and ending prior to January 1, 2011. Section 265(b)(5) of the Code defines the term "financial institution" as any"bank" described in Section 585(a)(2) of the Code, or any person accepting deposits from the public in the ordinary course of such person's trade or business that is subject to federal or state supervision as a financial institution. Notwithstanding the exception to the disallowance of the deduction of interest on indebtedness related to "qualified tax-exempt obligations" provided by Section

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265(b) of the Code, Section 291 of the Code provides that the allowable deduction to a "bank," as defined in Section 585(a)(2) of the Code, for interest on indebtedness incurred or continued to purchase "qualified tax-exempt obligations" shall be reduced by twenty-percent (20%) as a "financial institution preference item." The City expects to designate the Bonds as "qualified tax-exempt obligations" within the meaning of section 265(b) of the Code. In furtherance of that designation, the City will covenant to take such action that would assure, or to refrain from such action that would adversely affect, the treatment of the Bonds as "qualified tax-exempt obligations." Potential purchasers should be aware that if the issue price to the public exceeds $10,000,000 ($30,000,000 for taxable years beginning after December 31, 2008 and ending prior to January 1, 2011), there is a reasonable basis to conclude that the payment of a de minimis amount of premium in excess of $10,000,000 ($30,000,000 for taxable years beginning after December 31, 2008 and ending prior to January 1, 2011) is disregarded,; however, the Internal Revenue Service could take a contrary view. If the Internal Revenue Service takes the position that the amount of such premium is not disregarded, then such obligations might fail to satisfy the $10,000,000 aforementioned dollar limitation and the Bonds would not be "qualified tax-exempt obligations."

OTHER RELEVANT INFORMATION RATINGS The Bonds have received a rating of “Aa3” by Moody’s Investor’s Service, Inc. (“Moody’s”), by virtue of an insurance policy to be issued by AGM. The presently outstanding unenhanced tax supported debt of the City has an underlying rating of “A2” by Moody’s and “A+” by Fitch Ratings (“Fitch”), which represents a recent upgrade from “A” to “A+”. An explanation of the significance of such ratings may be obtained from the company furnishing the ratings. The ratings reflect only the views of such organizations, and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating companies, if, in the judgment of such rating companies, circumstances so warrant. Any such downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. LITIGATION In the opinion of various officials of the City, there is no litigation or other proceeding pending against or, to their knowledge, threatened against the City in any court, agency, or administrative body (either state or federal) wherein an adverse decision would materially adversely affect the financial condition or operations of the City. REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code, as amended,) provides that the Bonds are negotiable instruments governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State. With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State, the Public Funds Investment Act, (Chapter 2256, Texas Government Code, as amended,) requires that the Bonds be assigned a rating of “A” or its equivalent as to investment quality by a national rating agency (see “Ratings” above). In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks, savings banks, trust companies with at least $1 million of capital, and savings and loan associations. The Bonds are eligible to secure deposits of any public funds of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their market value.

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The City has made no investigation of other laws, rules, regulations or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Bonds for such purposes. The City has made no review of laws in other states to determine whether the Bonds are legal investments for various institutions in those states. LEGAL MATTERS The City will furnish the Underwriters with a complete transcript of proceedings incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of the State of Texas to the effect that the Bonds are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approval of certain legal matters by Bond Counsel, to the effect that the Bonds, issued in compliance with the provisions of the Ordinance, are valid and legally binding obligations of the City and, subject to the qualifications set forth herein under “TAX MATTERS”, the interest on the Bonds is exempt from federal income taxation under existing statutes, published rulings, regulations, and court decisions. The customary closing papers, including a Certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds, or which would affect the provision made for their payment or security, or in any manner questioning the validity of the Bonds will also be furnished. In their capacity as Bond Counsel, Escamilla, Poneck, & Cruz LLP, San Antonio, Texas has reviewed the information appearing in the Official Statement under the captions “THE BONDS,” (except for the information under the caption “Defaults and Remedies”, and Book-Entry-Only System as to which no opinion is expressed) “TAX MATTERS,” “OTHER RELEVANT INFORMATION – Registration and Qualification of Bonds for Sale,” “Legal Investments and Eligibility to Secure Public Funds in Texas,” and “Legal Matters,” and “CONTINUING DISCLOSURE OF INFORMATION” (except under the caption “Compliance with Prior Undertakings” as to which no opinion is expressed) “APPENDIX C – Form of Bond Counsel’s Opinion” to determine whether such information accurately and fairly describes and summarizes the information, material and documents and legal issues referred to therein and is correct as to matters of law and such firms is of the opinion that the information relating to the Bonds, the Ordinance and the legal issues contained under such captions and subcaptions is an accurate and fair description of the laws and the legal issues addressed therein and, with respect to the Bonds, such information conforms to the Ordinance. Bond Counsel has not, however, independently verified any of the factual information contained in this Official Statement nor has it conducted an investigation of the affairs of the City for the purpose of passing upon the accuracy and completeness of this Official Statement. No person is entitled to rely upon Bond Counsel’s limited participation as an assumption of responsibility for, or an expression of opinions of any kind with regard to the accuracy or completeness of any of the information contained herein. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are contingent on the issuance and delivery of the Bonds. The legal opinions of Bond Counsel will accompany the obligations deposited with DTC or will be printed on the definitive obligations in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Bond Counsel was not requested to participate, and did not take part, in the preparation of this Official Statement and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Bonds in the Official Statement to verify that such description conforms to the provisions of the Ordinance. The customary closing papers, including a Certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and the delivery of the Bonds or which would affect the provision made for their payment or security, or in any manner questioning the validity of the Certificate will also be furnished. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are contingent on the sale and delivery of the Bonds. AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained herein have been obtained from the City's records, audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and the Ordinance contained in this Official Statement are made subject to all of the provisions of such statues, documents and the Ordinance. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects.

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CONTINUING DISCLOSURE OF INFORMATION

The City in the Ordinance has made the following agreement for the benefit of the holders and beneficial owners of the Bonds. The City is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the City will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified material events, to the Municipal Securities Rulemaking Board ("MSRB"). This information will be available to the public at no charge via the MSRB's Electronic Municipal Market Access ("EMMA") system atwww.emma.msrb.org as described below under "Availability of Information from MSRB." The City will provide certain updated financial information and operating data to certain information vendors annually. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in Tables 1 through 5 and 7 through 12 in this Official Statement and in Appendix B to this Official Statement. The City will update and provide this information within six months after the end of each fiscal year ending in or after 2012. The City will provide the updated information to the MSRB. The City may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements for the City, if the City commissions an audit and it is completed by the required time. If audited financial statements are not provided by that time, the City will provide unaudited financial statements for the applicable fiscal year to the MSRB, with the financial information and operating data and will file the annual audit report when and if the same becomes available. Any such financial statements will be prepared in accordance with the accounting principles described in the City's annual financial statements or such other accounting principles as the City may be required to employ from time to time pursuant to state law or regulation. The City's current fiscal year end is September 30. Accordingly, it must provide updated information by the end of February in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change. NOTICE OF OCCURRENCE OF CERTAIN EVENTS, WHETHER OR NOT MATERIAL . . . The City will notify the MSRB through EMMA (in an electronic format as prescribed by the MSRB) within ten business days following the occurrence of any of the following events with respect to the Bonds, without regard to whether such event is material within the meaning of the federal securities laws: (1) principal and interest payment delinquencies; (2) unscheduled draws on debt service reserves reflecting financial difficulties; (3) unscheduled draws on credit enhancements reflecting financial difficulties; (4) substitution of credit or liquidity providers, or their failure to perform; (5) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other events affecting the tax-exempt status of the Bonds;(6) tender offers; (7) defeasances; (8) rating changes; and (9) bankruptcy, insolvency, receivership or similar event of an obligated person. (Neither the Bonds nor the Ordinance make any provisions for credit enhancement, or a debt service reserve with respect to the Bonds.) NOTICE OF OCCURRENCE OF CERTAIN EVENTS, IF MATERIAL . . . The City also will notify the MSRB through EMMA (in an electronic format as prescribed by the MSRB) within ten business days following the occurrence of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: (1) non-payment related defaults; (2) modifications to rights of Bondholders; (3) Bond calls; (4) release, substitution, or sale of property securing repayment of the Bonds; (5) the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; and (6) appointment of a successor or additional trustee or the change of name of a trustee. NOTICE OF FAILURE TO TIMELY FILE . . . The City also will notify the MSRB through EMMA, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with the provisions described above. AVAILABILITY OF INFORMATION FROM MSRB . . . Effective July 1, 2009 (the "EMMA Effective Date"), the SEC implemented amendments to the Rule which approved the establishment by the MSRB of EMMA, which is now the sole successor to the national municipal securities information repositories with respect to filings made in connection with undertakings made under the Rule after the EMMA Effective Date. Commencing with the EMMA Effective Date, all information and documentation filing required to be made by the City in accordance with its undertaking made for the Bonds will be made with the MSRB in electronic format in accordance with MSRB guidelines. Access to such filings will be provided, without charge to the general public, by the MSRB.

27

With respect to debt of the City issued prior to the EMMA Effective Date, the City remains obligated to make annual required filings, as well as notices of material events, under its continuing disclosure obligations relating to those debt obligations (which includes a continuing obligation to make such filings with the Texas state information repository (the "SID")). Prior to the EMMA Effective Date, the Municipal Advisory Council of Texas (the "MAC") had been designated by the State and approved by the SEC staff as a qualified SID. Subsequent to the EMMA Effective Date, the MAC has entered into a Subscription Agreement with the MSRB pursuant to which the MSRB makes available to the MAC, in electronic format, all Texas-issuer continuing disclosure documents and related information posted to EMMA's website simultaneously with such posting. Until the City receives notice of a change in this contractual agreement between the MAC and EMMA or of a failure of either party to perform as specified thereunder, the City has determined, in reliance on guidance from the MAC, that making its continuing disclosure filings solely with the MSRB will satisfy its obligations to make filings with the SID pursuant to its continuing disclosure agreements entered into prior to the EMMA Effective Date. LIMITATIONS AND AMENDMENTS . . . The City has agreed to update information and to provide notices of material events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders or beneficial owners of Bonds may seek a writ of mandamus to compel the City to comply with its agreement. The City may amend its continuing disclosure agreement to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if the agreement, as amended, would have permitted Underwriters to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and either the holders of a majority in aggregate principal amount of the outstanding Bonds consent or any person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the beneficial owners of the Bonds. The City may also repeal or amend these provisions if the SEC amends or repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that such provisions of the Rule are invalid, and the City also may amend the applicable provisions of the Ordinance in its discretion in any other manner or circumstance, but in either case only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds giving effect to (a) such provisions as so amended and (b) any amendments or interpretations of the Rule. If the City amends its agreement, it must include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of information and data provided. COMPLIANCE WITH PRIOR UNDERTAKINGS Within the last 5 years, the City did not file its annual audit for the fiscal years ending in 2006, 2007 and 2009 and filed its annual audit for the fiscal year ending in 2008 six months late. Also within the last 5 years, the City did not file its required annual financial operating data for the fiscal years ending in 2007 and 2008 and filed incomplete information for fiscal year ending in 2009. On October 6, 2010, the City made a material event notice filing regarding these matters and also filed all required annual audits and annual financial information for the past five years with the SID and with EMMA. The City will engaged its Financial Advisor to complete its future continuing disclosure filings. Furthermore, the City Council of the City will adopt an official continuing disclosure compliance policy instituting procedures for future compliance and designating its Finance Director as its continuing disclosure compliance officer. FINANCIAL ADVISOR Estrada Hinojosa & Company, Inc. is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. Estrada Hinojosa & Company, Inc., in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies.

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VERIFICATION OF ARITHMETICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by Estrada Hinojosa & Company, Inc. on behalf of the City was verified by Grant Thornton LLP, Minneapolis, Minnesota, certified public accountants (the “Accountants”). Such computations were based solely on assumptions and information supplied by Estrada Hinojosa & Company, Inc. on behalf of the City. The Accountants have restricted their procedures to verifying the arithmetical accuracy of certain computations and have not made any study or evaluation of the assumptions and information on which the computations are based, and accordingly, have not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. The Accountants will verify from the information provided to them the mathematical accuracy as of the date of the closing on the Bonds of (i) the computations contained in the provided schedules to determine that the anticipated receipts from the Governmental Obligations and cash deposits listed in the schedules provided by Estrada Hinojosa & Company, Inc., to be held in the Escrow Fund, will be sufficient to pay, when due, the principal and interest requirements of the Refunded Bonds, and (ii) the computations of yield on both the Federal Securities and the Bonds contained in the provided schedules used by Bond Counsel in its determination that the interest on the Bonds is excludable from the gross income of the holders thereof and the effective defeasance of the Refunded Bonds. UNDERWRITING The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the City at an underwriting discount of $37,630.20. The Underwriters’ obligation is subject to certain conditions precedent. The Underwriters will be obligated to purchase all of the Bonds if any Bonds are purchased. The Bonds may be offered and sold to certain dealers and others at prices lower than such offering prices, and such public prices may be changed, from time to time, by the Underwriter. The Underwriters have provided the following sentence for inclusion in the Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. CERTIFICATION OF OFFICIAL STATEMENT . . .At the time of payment for and delivery of the Bonds, the Underwriter will be furnished a Bonds, executed by proper officers of the City, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendments thereto, for the Bonds, on the date of such Official Statement, on the date of the sale of said Bonds and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or (c) insofar as the descriptions and statements including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City, since the date of the last financial statements of the City appearing in the Official Statement. The Official Statement will be approved as to form and content and the use thereof in the offering of the Bonds will be authorized, ratified and approved by the City Council on the date of sale, and the Underwriter will be furnished, upon request, at the time of payment for and the delivery of the Bonds, a certified copy of such approval, duly executed by the proper officials of the City.

FORWARD LOOKING STATEMENTS The statements contained in this Official Statement, and in any other information provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City’s expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City’s actual results could differ materially from those discussed in such forward-looking statements.

The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherent subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions of future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control

29

of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. AUTHORIZATION OF THE OFFICIAL STATEMENT . . . The Official Statement will be approved as to form and content and the use thereof in the offering of the Bonds will be authorized, ratified and approved by the City Council on the date of sale, and the Underwriter will be furnished, upon request, at the time of payment for and the delivery of the Bonds, a certified copy of such approval, duly executed by the proper officials of the City. The Ordinance will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto issued on behalf of the City, and authorize its further use in the reoffering of the Bonds by the Underwriter. This Official Statement has been approved by the City Council of the City for distribution in accordance with the provisions of the Securities and Exchange Commission's rule codified at 17 C.F.R. Section 240.15c2-12.

CITY OF EAGLE PASS, TEXAS /s/ Ramsey Cantu Mayor

ATTEST:

/s/ Mary Velasquez City Secretary

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SCHEDULE I

SCHEDULE OF REFUNDED BONDS

Series

Maturity

Date

Existing

Coupon Par Amount

Call

Date

Call

Price

Comb. Tax & Ltd. Pledge Rev CO's, Series 2003

Serials 3/1/2014 3.750% 345,000$             3/1/2013 100%

3/1/2015 3.875% 360,000              

3/1/2016 4.000% 375,000              

3/1/2017 4.100% 390,000              

3/1/2018 4.200% 405,000              

3/1/2019 4.300% 425,000              

3/1/2020 4.400% 440,000              

3/1/2021 4.500% 465,000              

3/1/2022 4.600% 650,000              

Term 3/1/2023 5.000% 730,000              

3/1/2024 5.000% 770,000              

5,355,000$       

APPENDIX A

GENERAL INFORMATION REGARDING THE CITY

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A - 1

THE CITY LOCATION/HISTORY The City of Eagle Pass, Texas (the “City” or “Eagle Pass”) was founded in 1849 with the establishment of Fort Duncan following the war between the United States and Mexico, and was incorporated in 1910. The City Charter was originally adopted on January 30, 1964, and most recently revised in 2010 pursuant to a city charter election held in the City. The City operates as a home rule city with the City Council/City Manager form of government. Policy making responsibility, with the exception of the Waterworks and Sewer System, rests with the elected officials who exercise supervisory authority over appointed officials and city employees. The City provides basic municipal services to its citizens, including fire and police protection, sanitary sewer, water, garbage, library, parks and recreational facilities. The City is approximately 140 miles southwest of San Antonio, Texas and serves as a port of entry into Mexico through the City of Piedras Negras, Choahuila. Eagle Pass is the county seat and principal commercial center of Maverick County and is located at the intersection of U.S. Highway 277 and U.S. Highway 57. Boundaries of the City encompass approximately 5.35 square miles. POPULATION

1960 Census

1970 Census

1980 Census

1990 Census

2000 Census

2009 Census

12,094 15,374 21,407 20,651 22,413 26,285 ECONOMY Principal manufacturers produce such goods as processed meats, concrete batching equipment, and petroleum. The Eagle Pass trade territory includes not only an area with approximately 45,000 people on the Texas side of the Rio Grande, but also some 400,000 people located in northern Mexico, i.e., from the Rio Grande southward to Monclova. Piedras Negras, Coahuila, which is immediately across the Rio Grande River from Eagle Pass, has an estimated population of 330,000. Trade and commerce with Mexico is facilitated by U.S. Highway 277 and 57 and the Mexican Highway network as well as rail carriers. Freight traffic across the international bridge at Eagle Pass includes petroleum products, fruits and vegetables, cattle, and metal products and scrap. Mexico's border industrialization ("Maquiladora") program has affected development on both sides of the Rio Grande River. Under this program, the Mexican Government allows import duty exemptions and other inducements to foreign-owned companies located in Mexico. American equipment may be imported duty-free and American citizens may cross the border to work in the plants; however, the products of these operations must be sold in the United States. The program has produced the "Twin Plant Concept" of manufacturing, whereby the assembly function of the production work is done in facilities located in Piedras Negras,Coahuila, where abundant semi-skilled labor is available, and the finishing operations are conducted in Eagle Pass. The twin plants operating in the area produce pants and jeans, medical supplies (bandages, etc.), shotguns and sausage casings. The "twin plant" program was formally initiated by the Mexican Secretary of Industry and Commerce in 1965 and began operations in the following year. Two provisions of the U.S. Tariff Schedules permit a wide variety of U.S. products to be assembled abroad (in this case Mexico) and then returned to the United States, with duties assessed only on the value added abroad. Corona Brewing company has began construction of the world’s largest bottling and brewing plant in Piedras Negras, Coahuila. THE INTERNATIONAL BRIDGES The original International Bridge (the "Bridge") was constructed in the early part of the twentieth century by the Eagle Pass/Piedras Negras Bridge Company, a private corporation. In 1947, the City issued $320,000 of its bridge system revenue bonds to purchase the portion of the Bridge that is located in the United States, all of which bonds have been repaid. In 1954, a hurricane took a course up the Rio Grande River bringing torrential rains to areas in Texas and Mexico upstream from Eagle Pass, and a span of the Bridge was washed out during the upstream floods. The City then issued $75,000 of bridge system revenue bonds to rebuild the Bridge. It is believed that certain records of the early history of the Bridge were lost in the flood. The completion in 1969 of the Amistad Dam on the Rio Grande River upstream from Eagle Pass has significantly reduced the danger of serious flooding that might destroy the Bridge. The City of Eagle Pass, Texas second International Bridge System is 1,312 feet in length and 84 feet wide, with six traffic lanes (three in each direction), and a pedestrian walkway on either side.

A - 2

DESCRIPTION The original Bridge is of reinforced concrete construction, and is a narrow two-lane bridge with pedestrian walkways on either side. The City's facilities at the Bridge include two toll collection booths used to collect tolls from passing vehicles and one collection booth which is leased to a private vendor. The toll booths are located next to scales which are used to monitor the number and types of vehicles passing through the Bridge into Mexico. The Bridge connects the central business districts of Eagle Pass and Piedras Negras, Mexico. All vehicles and pedestrians crossing the Bridge in the northbound direction, from Mexico into the United States, must stop at the customs and immigration facilities on the U.S. side of the Bridge. There are five inspection check booths that accommodate vehicles for primary inspection and one booth for pedestrians. There is also limited space for secondary vehicle inspections and a booth operated by the State of Texas for taxing patrons bringing liquor into the United States. WATERWORKS SYSTEM The City owns and operates a complete water system. The City's water treatment plant has a design capacity of 10 to 12 MGD. The water distribution system consists of over 140 miles of water distribution mains of various sizes and capacities. The City's treated water storage facilities consist of four ground storage tanks with a combined capacity of 4,300,000 gallons and four elevated storage tanks with a combined capacity of 800,000 gallons. The City's total treated water storage capacity is 5,100,000 gallons. The City owns a raw water reservoir that holds an estimated 28,000,000 gallons of raw water. All of the City's water is obtained from the Rio Grande River, and present sources of 7,100 acreage feet of municipal use water are expected to provide sufficient water supply for the foreseeable future. Additionally, the City projects completing the proposed two storage tanks by the second quarter of 1999. The City has adopted a water conservation policy, but City staff does not expect that the policy will, in and of itself, adversely impact the revenues of the System, in the event of drought. LARGEST EMPLOYERS

Estimated NumberName Business of Employees Eagle Pass Independent School District Education 2,684Wal-Mart Retail Sale 450HEB Grocery Company Food Store 328Fort Duncan Medical Center Health Care 350United Medical Center Health Care 175Kickapoo Lucky Eagle Casino Gambling Facility 635Maverick Arms Firearm Manufacturing 220United Medical Center Health Care 160Price Construction Company Construction 110McDonalds Fast Food Restaurant 100

_____ Source: City's Annual Financial Report. TRANSPORTATION AND UTILITIES Eagle Pass is served by Union Pacific Railroad and Burlington, Northern, Santa Fe Railroad, six motor freight carriers, and four bus lines. Charter air service is available to the County's municipal airport. U.S. Highway 277 and U.S. Highway 57 intersect within the City. Electricity is supplied by Central Power and Light Company, natural gas by Southern Union Gas Corporation, and telephone service by Southwestern Bell Telephone Company. FINANCIAL INSTITUTIONS Financial institutions of Eagle Pass include the IBC Commerce Bank, which merged with NBC Bank of Eagle Pass in January 2002, the South Texas National Bank, which merged with International Banking Center of Del Rio National Bank in December 2001, and the Sterling Bank. In the past 3 years Falcon Bank and Compass have opened branches within the City.

A - 3

CHURCHES AND CIVIC GROUPS The City contains some 41 churches representing 13 denominations, and several active civic, social and cultural clubs including most nationally organized civic and service clubs. EDUCATION AND HEALTH CARE The City is located entirely within the Eagle Pass Independent School District (the "District"). District facilities include two high schools, two junior high schools, 14 elementary schools, and one alternative school. Two parochial schools are located within the City. In addition, higher education campuses in the City include Sul Ross State University, Southwest Texas Junior College, and Colegio Biblico. The City is located in the Maverick County Hospital District, which operates the Fort Duncan Medical Center, a 77-bed hospital with intensive and critical care units, an outpatient clinic, and a pediatric clinic. RECREATIONAL FACILITIES Recreational facilities in the City include a nine-hole golf course, tennis courts, parks, baseball fields, a county lake, Lucky Eagle Casino and area hunting and fishing. EMPLOYMENT STATISTICS

(1)

January January January January January January2012 2011 2010 2012 2011 2010

Civilian Labor Force 13,696 13,814 13,936 12,518,738 12,390,781 12,045,259 Total Employment 11,451 11,212 11,386 11,606,603 11,385,326 11,058,224 Total Unemployment 2,245 2,602 2,550 912,135 1,005,455 987,035 Percentage Unemployment 16.4% 18.8% 18.3% 7.3% 8.1% 8.2%

City of Eagle Pass State of Texas

_______ (1) Source: Texas Workforce Commission.

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APPENDIX B

EXCERPTS FROM THE CITY OF EAGLE PASS, TEXAS

COMPREHENSIVE ANNUAL FINANCIAL REPORT

(For the Year Ended September 30, 2010) The information contained in this Appendix consists of excerpts from the City of Eagle Pass, Texas

Comprehensive Annual Financial Report for the Year Ended September 30, 2010, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information.

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APPENDIX C

FORM OF BOND COUNSEL'S OPINION

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$5,315,000.00 CITY OF EAGLE PASS, TEXAS

(A political subdivision of the State of Texas located in Maverick County, Texas) TAX REFUNDING BONDS, SERIES 2012

WE HAVE ACTED as Bond Counsel for the CITY OF EAGLE PASS, TEXAS (the "City") in connection with issuance of the captioned bonds (the "Bonds") for the purpose of rendering an opinion with respect to the legality and validity of the Bonds under the Constitution and laws of the State of Texas and for no other purpose. In rendering the opinion herein, we have relied upon a transcript of certain certified proceedings pertaining to the issuance of the Bonds including the Escrow Agreement dated as of February 7, 2012, between the City and Wells Fargo Bank, N.A., Dallas, Texas as Escrow Agent (the "Escrow Agreement"), the report and mathematical verifications by Grant Thornton LLP, Minneapolis, Minnesota, Certified Public Accountants, with respect to the adequacy of certain escrow funds to accomplish the refunding purposes of the Bonds (the "Verification Report") all as described in the City's ordinance authorizing the Bonds (the "Ordinance"). The transcript contains certified copies of certain proceedings of the City and certain certifications and representations, other material facts within the knowledge and control of the City, an opinion of the Attorney General of Texas to the effect that the initial Bonds are valid and binding obligations of the City, upon which we rely; and certain other customary documents and instruments authorizing and relating to the issuance of the Bonds.

THE BONDS are being issued to provide funds to be used (i) to refund those certain outstanding obligations of the City (the “Refunded Bonds”), and (ii) to pay for costs of issuance of the Bonds.

BASED ON SUCH EXAMINATION, our opinion is as follows:

The Refunded Bonds being refunded, discharged, paid, and retired with certain of the proceeds of the Bonds have been defeased and are regarded as being outstanding only for the purpose of receiving payment in accordance with the provisions of Chapter 1207, Texas Government Code, as amended. In rendering this opinion, we have relied upon the Certificate of Financial Advisor Concerning Sufficiency of Funds as to the sufficiency of the cash for the purposes of paying the principal of and interest on the Refunded Bonds.

The transcript of certified proceedings evidences complete legal authority for the issuance of the Bonds in full compliance with the Constitution and laws of the State of Texas presently in effect; and constitute valid and legally binding obligations of the City in accordance with the terms and conditions thereof, except to the extent that the rights and remedies of the

City of Eagle Pass, Texas Tax Refunding Bonds, Series 2012 Page 2

Eagle Pass/bond counsel leg opn

owners of the Bonds may be limited by laws heretofore or hereafter enacted relating to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors of political subdivisions and the exercise of judicial discretion in appropriate cases.

The Bonds are payable, both as to principal and interest, from the receipts of an annual ad valorem tax levied, within the legal limits as to rate or amount, as provided by law, upon taxable property located within the City, which taxes have been pledged irrevocably to pay the principal of and the interest on the Bonds.

Pursuant to section 103 of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), and existing regulations, published rulings, and court decisions thereunder, in assuming continuing compliance after the date hereof by the City with the provisions of the Ordinance relating to sections 141 through 150 of the Code, interest on the Bonds will be excludable from the gross income, as defined in section 61 of the Code, of the owners thereof for federal income tax purposes, and such interest will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals for federal income tax purposes.

WE CALL TO YOUR ATTENTION THAT interest on all tax-exempt obligations, such as the Bonds, owned by a corporation [other than an "S" corporation or a qualified mutual fund, a financial asset securitization investment trust, a real estate mortgage investment conduit (REMIC), or a real estate investment trust (REIT)] will be included in such corporation's adjusted current earnings for purposes of calculating the alternative minimum taxable income of such corporations. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code is computed.

WE EXPRESS NO FURTHER OPINION with respect to any federal, state, or local tax consequences under present law or any proposed legislation resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the Bonds. Ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, "S" corporations with subchapter "C" earnings and profits, owners of an interest in a financial asset securitization investment trust, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earning income credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or have paid or incurred certain expenses allocable to, tax-exempt obligations.

WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified, any original proceedings, records, data or other material, but have relied upon the transcript of certified proceedings. We have not assumed any responsibility with respect to the financial condition or capabilities of the City or the disclosure thereof in connection with the

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Eagle Pass/bond counsel leg opn

sale of the Bonds. Our role in connection with the City's Official Statement prepared for use in connection with the sale of the Bonds has been limited as described therein.

OUR OPINION IS BASED on existing law, which is subject to change. Such opinion is further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinion to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinion is not a guarantee of result and is not binding on the Internal Revenue Service; rather, such opinion represents our legal judgment based upon our review of existing law that we deem relevant to such opinion and in reliance upon the representations and covenants referenced above.

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APPENDIX D

BOND INSURANCE SPECIMEN POLICY

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MUNICIPAL BOND INSURANCE POLICY

ISSUER: BONDS: $ in aggregate principal amount of

Policy No: -N

Effective Date:

Premium: $ ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of AGM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which AGM shall have received Notice of Nonpayment, AGM will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by AGM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in AGM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by AGM is incomplete, it shall be deemed not to have been received by AGM for purposes of the preceding sentence and AGM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, AGM shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by AGM hereunder. Payment by AGM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of AGM under this Policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless AGM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the

Page 2 of 2 Policy No. -N United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. AGM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to AGM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to AGM and shall not be deemed received until received by both and (b) all payments required to be made by AGM under this Policy may be made directly by AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Insurer's Fiscal Agent is the agent of AGM only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of AGM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, AGM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to AGM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy sets forth in full the undertaking of AGM, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. In witness whereof, ASSURED GUARANTY MUNICIPAL CORP. has caused this Policy to be executed on its behalf by its Authorized Officer. ASSURED GUARANTY MUNICIPAL CORP.

By

Authorized Officer Form 500NY (5/90)

Financial Advisory ServicesProvided By

ESTRADA HINOJOSAI N V E S T M E N T B A N K E R S