City of San Antonio, Texas

288 Pages·2014·1.74 MB·English

OFFICIAL STATEMENT
Dated: December 11, 2014
NEW ISSUE – Book-Entry-Only RATINGS: See "RATINGS" herein
In the opinion of Co-Bond Counsel (hereinafter defined), assuming continuing compliance by the City (hereinafter defined) after the date of
initial delivery of the Bonds (hereinafter defined) with certain covenants contained in each Ordinance (hereinafter defined) authorizing the applicable
series of Bonds and subject to the matters set forth under "TAX MATTERS" herein, that interest on the Bonds for federal income tax purposes under
existing statutes, regulations, published rulings, and court decisions (1) would be excludable from the gross income of the owners thereof pursuant to
section 103 of the Internal Revenue Code of 1986, as amended to the date of initial delivery of the Bonds, and (2) would not be included in computing
the alternative minimum taxable income of individuals or, except as described herein, corporations. See "TAX MATTERS" herein. Additionally, see
"THE BONDS – Determination of Interest Rate; Rate Mode Changes" identifying circumstances when an opinion of nationally recognized bond counsel
is required as a condition for an interest rate mode conversion. Co-Bond Counsel expresses no opinion as to the effect on the excludability from gross
income for federal income tax purposes of any action requiring such an opinion.
CITY OF SAN ANTONIO, TEXAS ELECTRIC AND GAS SYSTEMS
VARIABLE RATE JUNIOR LIEN REVENUE REFUNDING BONDS
$125,000,000 $125,000,000
SERIES 2015A SERIES 2015B
(Jefferies, Senior Manager) (Morgan Stanley, Senior Manager)
Dated: January 1, 2015 (Interest accrues from Date of Delivery) Due: February 1, 2033
The Bonds. The City of San Antonio, Texas (the "City") is issuing its Electric and Gas Systems Variable Rate Junior Lien Revenue Refunding Bonds, Series 2015A
(the "Series A Bonds"), and its Electric and Gas Systems Variable Rate Junior Lien Revenue Refunding Bonds, Series 2015B (the "Series B Bonds" and, together
with the Series A Bonds, the "Bonds") pursuant to the general laws of the State of Texas, including particularly Chapters 1207 and 1371, as amended, Texas
Government Code (together, the "Act"), and Chapter 1502, as amended, Texas Government Code, the City's Home Rule Charter, and separate City ordinances,
each adopted by the City Council of the City (the "Council") on October 30, 2014 (individually, an "Ordinance" and, collectively, the "Ordinances"), for the purposes
of refinancing existing variable rate debt of the City and paying the costs of issuance of the Bonds. See "PLAN OF FINANCE – Purpose" and "THE BONDS – Bond
Provisions – Authority and Security for the Bonds". As permitted by the Act, the Council has, in each Ordinance, delegated to certain authorized City officials
the authority to establish final terms of sale of the Bonds, which final sales terms of the Bonds shall be evidenced in separate "Approval Certificates" relating to
the Bonds. These Approval Certificates were executed by a designated City official on December 11, 2014. While in the SIFMA Index Mode (defined herein),
the Bonds are issuable in fully-registered form only, without coupons, in denominations of $5,000 or any integral multiple thereof. See "THE BONDS – General"
herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will payable by U.S. Bank
National Association, Dallas, Texas, as paying agent/registrar, to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the
Bonds. See "THE BONDS – Bond Provisions – Book-Entry-Only System" herein.
Interest. The Bonds are multi-modal variable rate bonds, each initially issued in a SIFMA Index Mode effective January 7, 2015 and expiring on the ending date
applicable to a series of Bonds in such SIFMA Index Mode, as further described herein. Upon expiration of the initial SIFMA Index Mode period for a series of
Bonds, such series of Bonds will be remarketed into a successive SIFMA Index Mode interest period of a to-be-determined duration, unless changed to a different
Interest Mode (defined herein) as described herein. During such interest rate periods, the Bonds will bear interest at the applicable SIFMA Index Rate, being
a per annum interest rate, determined weekly, equal to the lesser of the Highest Rate (defined herein) and the sum of the SIFMA Index (defined herein) then in
effect and the Applicable Spread (defined herein) related to the particular series of Bonds. During a SIFMA Index Mode, interest on the Bonds will be calculated
on a 365/366 basis and actual number of days elapsed and will be payable on the first Business Day of each month (commencing February 2, 2015). See tables
appearing on page ii of this Official Statement for a description of the Applicable Spread, ending date, mandatory tender date, Stepped Rate (defined herein), and
CUSIP Number applicable to each series of Bonds in its initial SIFMA Index Mode.
Repurchase; Redemption. During their initial Interest Period, the Bonds (i) are not subject to optional tender by the owners of the Bonds but (ii) are subject to
mandatory tender and optional redemption, at the direction of the City, prior to the expiration of the applicable initial Interest Period as further described herein.
In addition, and on the Rate Adjustment Date (defined herein) applicable to a series of Bonds, which is an Interest Payment Date (defined herein), Bonds of such
series are subject to mandatory tender, without right of retention, and are subject to redemption at the option of the City, as well as on any date thereafter when
bearing interest at the Stepped Rate. See "THE BONDS – Conversion of Interest Modes; Mandatory Tender; Purchase of Tendered Bonds" and "THE BONDS –
Redemption of Bonds" herein.
No Initial Liquidity Support. During their initial Interest Period, the Bonds are not benefited by a liquidity facility provided by a third party. Accordingly, a
failure by the applicable Remarketing Agent (defined herein) to remarket the Bonds subject to mandatory tender on the applicable Rate Adjustment Date will
result in the rescission of the notice of mandatory tender with respect thereto and the City not having any obligation to purchase such Bonds at that time. The
occurrence of the foregoing will not result in an event of default under the applicable Ordinance or the Bonds. Until such time as the City redeems or remarkets
such Bonds that have not been successfully remarketed as described above, those Bonds shall bear interest at the applicable Stepped Rate, also calculated on a
365/366 basis and actual number of days elapsed. See "THE BONDS – Conversion of Interest Modes; Mandatory Tender; Purchase of Tendered Bonds" herein.
Tender; Remarketing. All tenders of Bonds must be made to U.S. Bank National Association, Dallas, Texas, as tender agent for the Bonds (the "Tender Agent").
The initial Remarketing Agent (defined herein) for the Series A Bonds is Jefferies LLC; the initial Remarketing Agent for the Series B Bonds is Morgan Stanley &
Co. LLC. Bonds tendered for purchase will be bought from the proceeds derived from the remarketing of such Bonds, if any; provided, however, that should
the date for tender of the Bonds occur on an Interest Payment Date, the accrued interest portion of the Purchase Price (defined herein) is to be paid by the City.
Security. The Bonds are special obligations of the City payable solely from and equally and ratably secured, together with the currently outstanding Junior Lien
Obligations and any Additional Junior Lien Obligations hereafter issued by the City, by a junior lien on and pledge of the Net Revenues of the City's Electric and
Gas Systems (as further described herein, the "Systems"), subject and subordinate to liens and pledges securing the outstanding Senior Lien Obligations and any
Additional Senior Lien Obligations hereafter issued, and superior to the pledge and lien securing the currently outstanding Commercial Paper Obligations and
Inferior Lien Obligations, all as fully set forth in the Ordinances. The City has reserved the right to grant equal and ratable liens on and pledges of Net Revenues
to secure payment of Additional Junior Lien Obligations hereafter issued in accordance with the Ordinances. See "THE BONDS – Bond Provisions – Additional
Bonds".
Conversion. Each Ordinance provides that Bonds, at the conclusion of the then-effective interest rate mode (other than the Fixed Mode), are subject to
conversion to another interest rate mode. If the Bonds are converted, in whole or in part, to an interest rate mode other than a Term Mode, another SIFMA Index
Mode, or a Fixed Mode, the City anticipates entering into an agreement providing liquidity support for those Bonds at such time. No such agreement, however,
has been entered into at this time, nor is one expected to be entered into in the future.
The Bonds are offered when, as and if issued and received by the initial purchasers thereof, subject to the approval of legality by the Attorney General of
the State of Texas and the approval of certain legal matters by Fulbright & Jaworski LLP of San Antonio, Texas, a member of Norton Rose Fulbright and
Escamilla & Poneck, LLP, of San Antonio, Texas, Co-Bond Counsel. The senior-managing underwriter for a particular series of Bonds is identified in the
heading above. Certain legal matters will be passed upon for the underwriters by their counsel, McCall, Parkhurst & Horton L.L.P., San Antonio, Texas. The
Bonds are expected to be available for initial delivery through DTC on or about January 7, 2015 (the "Date of Delivery").
JEFFERIES MORGAN STANLEY
INITIAL SIFMA INDEX MODE INFORMATION
CITY OF SAN ANTONIO, TEXAS ELECTRIC AND GAS SYSTEMS
$125,000,000
Variable Rate Junior Lien Revenue Refunding Bonds, Series 2015A
Initial SIFMA Index Mode commences on date of initial delivery
First Optional
Initial Interest Initial Interest Redemption / Latest
Period Period Mandatory Mandatory Applicable Stepped Rate CUSIP
Commencement Expiration Tender Date Tender Date Spread (%) No.(1)
January 31, February 1,
January 7, 2015 2017 August 1, 2016 2017 0.28% 8.00 7962533P5
$125,000,000
Variable Rate Junior Lien Revenue Refunding Bonds, Series 2015B
Initial SIFMA Index Mode commences on date of initial delivery
First Optional
Initial Interest Initial Interest Redemption / Latest
Period Period Mandatory Mandatory Applicable Stepped Rate CUSIP
Commencement Expiration Tender Date Tender Date Spread (%) No.(1)
January 31, February 1,
January 7, 2015 2018 August 1, 2017 2018 0.38% 8.00 7962533Q3
Each series of Bonds has a stated maturity date of February 1, 2033. Each series of Bonds is subject to mandatory sinking fund
redemption in the amounts and at the times provided in the applicable Ordinance and as described herein. In addition, all or part
of the Bonds of a particular series may be subject to redemption prior to stated maturity, and prior to the expiration of a then-
current and applicable interest rate mode, if such redemption provisions are preserved at the time of conversion of such Bonds to
the then-applicable interest rate mode. During the initial SIFMA Index Mode Interest Period applicable to each series of Bonds,
the Bonds are subject to mandatory tender and optional redemption, at the City's option, on August 1 prior to the expiration of
the applicable initial SIFMA Index Mode Interest Period and on any day thereafter through the expiration of such applicable initial
SIFMA Index Mode Interest Period. In addition, each series of Bonds is subject to mandatory tender and optional redemption
immediately following the expiration of the applicable initial SIFMA Index Mode, in the manner described herein, or on any
date during such time the Bonds are bearing interest at the Stepped Rate. See "THE BONDS – Conversion of Interest Modes;
Mandatory Tender; Purchase of Tendered Bonds" and "THE BONDS – Redemption of Bonds" herein.
(1) CUSIP numbers have been assigned to the Bonds by Standard & Poor's CUSIP Service Bureau, a Standard & Poor's Financial Services LLC
business, and are included solely for the convenience of the owners and potential owners of the Bonds. No assurance can be given that the
CUSIP number for a particular series of Bonds will remain the same after the date of delivery of such series of Bonds. 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 Board, the Co-Financial
Advisors, nor the Underwriters shall be responsible for the selection, changes to, errors, or correctness of the CUSIP numbers set forth herein.
CONTACT INFORMATION

City Public Service Board: Tender Agent, Escrow Agent, Paying
Agent / Registrar and Calculation Agent:

CPS Energy U.S. Bank National Association
Ms. Linda R. Dzierzanowski Mr. Israel Lugo
Senior Director, Finance & Treasury 14241 Dallas Parkway, Suite 490
Mail Drop 100602 Dallas, TX 75254
P.O. Box 1771 [phone]
San Antonio, TX 78296-1771 [email protected]
[phone]
[email protected]

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CITY OF SAN ANTONIO, TEXAS

CITY COUNCIL

Ivy R. Taylor, Mayor1

Ron Nirenberg Roberto Treviño2 Rebecca Viagran
Rey Saldaña Shirley Gonzales Cris Medina
Mike Gallagher Ray Lopez Joe Krier
Alan Warrick II3

Sheryl Sculley – City Manager
Ben Gorzell, Jr. – Chief Financial Officer
Leticia M. Vacek – City Clerk
Martha G. Sepeda – Acting City Attorney4

CITY PUBLIC SERVICE BOARD OF SAN ANTONIO

Homer Guevara, Jr., Chairman Nora W. Chávez, Vice Chairman
Derrick Howard, Trustee Edward B. Kelley, Trustee Ivy R. Taylor, Mayor1

Doyle N. Beneby – President & CEO
Paula Y. Gold-Williams – Group EVP - Financial & Administrative Services, CFO & Treasurer
Carolyn E. Shellman, Esq. – Secretary, Executive Vice President and General Counsel

CONSULTANTS

Fulbright & Jaworski LLP of San Antonio, Texas, Public Financial Management, Inc.
a member of Norton Rose Fulbright Estrada Hinojosa & Company, Inc.
Escamilla & Poneck, LLP Co-Financial Advisors
Co-Bond Counsel

(1) Ivy R. Taylor, Mayor of San Antonio, was selected from the current members of City Council to fill the vacated position for the remainder of the unexpired term
(concluding on May 31, 2015) of former Mayor Julián Castro, who resigned from his position after his appointment as Secretary of the U.S. Department of Housing
and Urban Development.

(2) Roberto Treviño, District 1 City Councilman, was selected to finish the unexpired term of former Councilman Diego M. Bernal (concluding on May 31, 2015)
who resigned upon filing to run for Texas House District 123 representative.

(3) Defeated Keith Toney in a run-off election held on December 9, 2014 which was conducted to fill the District 2 vacancy created when Mayor Ivy R. Taylor was
voted to succeed former Mayor Julián Castro.

(4) Named Acting City Attorney following the resignation of Robert F. Greenblum, who accepted a Staff position with former Mayor Julián Castro at the U.S.
Department of Housing and Urban Development.
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USE OF INFORMATION

No dealer, broker, salesman, or other person has been authorized by the City to give any information or to make any representation
with respect to the Bonds, other than as contained in this Official Statement, and if given or made, such other information or
representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation, or sale. The information and expressions of opinions herein are subject to
change without notice, and neither the delivery of this Official Statement nor any sale made shall under any circumstances create
any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement.
See "CONTINUING DISCLOSURE OF INFORMATION" for a description of the undertaking of the City and the Board to provide
certain information on a continuing basis.

THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE UNITED STATES 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
EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION FOR THE PURCHASE THEREOF.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters 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 Co-Financial Advisors have provided the following sentence for inclusion in this Official Statement. The Co-Financial Advisors
have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to the Board and, as
applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Co-
Financial Advisors do not guarantee the accuracy or completeness of such information.

None of the City, the Board, the Co-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.

The agreements of the City and others related to the Bonds are contained solely in the contracts described herein. Neither
this Official Statement nor any other statement made in connection with the offer or sale of the Bonds is to be construed as
constituting an agreement with the purchasers of the Bonds.

THE COVER PAGE AND INSIDE COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE
ONLY AND IS NOT INTENDED AS A SUMMARY OF THIS OFFERING. INVESTORS SHOULD READ THE ENTIRE
OFFICIAL STATEMENT, INCLUDING ALL APPENDICES ATTACHED HERETO, TO OBTAIN INFORMATION
ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
v
TABLE OF CONTENTS

Page Page

Introductory Statement ......................................................................... 1 Pension and Employment Benefits ..................................................... 31
Plan of Finance ..................................................................................... 2 Pension Plan ................................................................................. 32
Purpose ........................................................................................... 2 Employee Benefit Plans ............................................................... 32
The Refunded Bonds ...................................................................... 2 Pension and OPEB Liabilities ............................................................ 32
Sources and Uses of Funds ............................................................. 3 Actuarial Value of Plan Assets ..................................................... 32
The Bonds ............................................................................................. 3 Actuarial Accrued Liability .......................................................... 32
General ........................................................................................... 3 Use of Assumptions and Estimates .............................................. 32
Interest During Initial Period .......................................................... 4 Pension and Employee Benefit / OPEB Funding ......................... 33
General ...................................................................................... 4 Pension and Employee Benefit Plans ................................................. 33
Interest Rate; Payment of Interest .............................................. 4 Certain Factors Affecting the Electric Utility Industry ....................... 34
Determination of Applicable SIFMA Index Rates and The Electric Utility Industry Generally ........................................ 34
Calculation of Interest ............................................................. 4 Federal Energy Policy .................................................................. 35
Conversion of Interest Modes; Mandatory Tender; Purchase FERC Authority ........................................................................... 37
of Tendered Bonds ...................................................................... 5 The Public Utility Commission of Texas (PUCT) ........................ 37
Conversion of Interest Modes .................................................... 5 Texas Reliability Entity, Inc. (Texas RE) ..................................... 37
Remarketing Agent .................................................................... 5 ERCOT ........................................................................................ 38
Tender Provisions Generally ..................................................... 5 Electric Utility Restructuring in Texas ......................................... 38
Mandatory Tender ..................................................................... 5 Entities that have Opted-in to Competition .................................. 39
Tender Agent ............................................................................. 6 Additional Impacts of Senate Bill 7 Deregulation ........................ 40
Tender Procedures ..................................................................... 6 Wholesale Market Design Developments .................................... 41
Limitations on Payment of Purchase Price; Untendered Bonds . 6 Environmental Restrictions of Senate Bill 7 and Other
Record Date for Interest Payment ................................................... 6 Related Regulations ................................................................... 42
Redemption of Bonds ..................................................................... 7 Response to Competition .................................................................... 43
Mandatory Sinking Fund Redemption ....................................... 7 Strategic Planning Initiatives ....................................................... 44
Optional Redemption ................................................................. 7 Debt and Asset Management Program ......................................... 45
Redemption Procedures .................................................................. 7 Financial Responsibility and Disclosure Process ......................... 45
Bond Provisions ............................................................................. 8 Current Economic Developments ................................................ 45
Authority and Security for the Bonds ........................................ 8 Construction Program ......................................................................... 47
Perfection of Security for the Bonds .......................................... 8 Description of Physical Property ........................................................ 48
Flow of Funds ............................................................................ 8 Electric System ............................................................................ 48
Rate Covenant ........................................................................... 8 Generating Plants ............................................................... 48
Additional Bonds ....................................................................... 9 Generating Station Events .................................................. 50
Refundable Tax Credit Bonds .................................................... 9 Generating Capability ........................................................ 53
Amendments .............................................................................. 9 New Generation / Conservation ......................................... 54
Defeasance ................................................................................. 9 South Texas Project ........................................................... 54
Registered Owners' Remedies ................................................. 10 Five-Year South Texas Project Capacity Factor ................ 55
Book-Entry-Only System ........................................................ 10 Recent Operational Highlights and Outside Factors
Use of Certain Terms in Other Sections Impacting South Texas Project ....................................... 55
of this Official Statement ...................................................... 12 Used Nuclear Fuel Management ........................................ 57
Debt Service Requirements ................................................................. 13 Additional Nuclear Generation Opportunities ................... 58
Outstanding Senior Lien Obligations and Nuclear Cost Issue and CPS Energy Internal
Junior Lien Obligations .............................................................. 13 Investigation ................................................................... 62
Historical Net Revenues and Coverage ........................................ 14 Qualified Scheduling Entity ............................................... 64
Junior Lien Obligations ...................................................................... 15 Transmission System ......................................................... 64
Commercial Paper Program ................................................................ 15 Interconnected System ....................................................... 64
Flexible Rate Revolving Note Private Placement Program ................. 16 Distribution System ........................................................... 65
San Antonio Electric and Gas Systems ............................................... 17 Gas System .................................................................................. 65
History and Management.............................................................. 17 Transmission System ......................................................... 65
Citizens Advisory Committee....................................................... 17 Distribution System ........................................................... 65
Administration and Operating Personnel ...................................... 18 Rule Relating to Replacement of Gas
Service Area ................................................................................. 21 Distribution Facilities ..................................................... 66
Customer Base as of January 31, 2014 ......................................... 23 Other Electric and Gas Systems Statistics .................................... 66
Retail Service Rates ...................................................................... 23 General Properties ........................................................................ 66
Transmission Access and Rate Regulation ................................... 24 Operation Control System .................................................. 66
Customer Rates ................................................................................... 25 Support Facilities ............................................................... 67
Fuel and Gas Cost Adjustment ..................................................... 25 General Offices and Customer Service Centers ........................... 67
Governmentally Imposed Fees, Taxes or Payments ..................... 25 Construction Centers and Service Centers ................................... 67
Ten-Year Electric Customer Statistics ................................................ 26 Villita Assembly Building ............................................................ 68
Historical Record of City of San Antonio General Vehicles and Work Equipment ..................................................... 68
Fund Benefits from City's Electric and Gas Utility Systems ........ 26 Summary of Insurance Programs ........................................................ 68
Five-Year Electric and Gas Sales by Customer Category ................... 27 Environmental Matters ....................................................................... 68
Five-Year Statement of Net Revenues and Debt Service Coverage .... 28 Federal Clean Air Act .................................................................. 68
Forward-Looking Statements .............................................................. 29 Federal Clean Water Act .............................................................. 73
Management Discussion ..................................................................... 29 Water Resources Planning ........................................................... 74
Implementation of New Accounting Policies ..................................... 29 Water Conservation ...................................................................... 75
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TABLE OF CONTENTS (Continued)

Page Page

Other Environmental Issues .......................................................... 75 Tax Accounting Treatment of Discount Bonds .................................. 96
OSHA Hazard Communication Standard ..................................... 76 Tax Accounting Treatment of Premium Bonds .................................. 96
Other Issues .................................................................................. 76 Legal Investments in Texas ................................................................ 97
Energy Conservation and Public Safety Programs .............................. 77 Securities Laws .................................................................................. 97
Energy Conservation .................................................................... 77 Ratings ............................................................................................... 97
Public Safety Programs ................................................................ 78 Co-Financial Advisors ........................................................................ 97
Fuel Supply ......................................................................................... 78 Independent Auditors ......................................................................... 98
Wholesale Power ................................................................................ 80 Use of Information in Official Statement ........................................... 98
Lease Transaction ............................................................................... 81 Miscellaneous ..................................................................................... 98
Potential Excise Tax Adversely Affecting the City and CPS Energy . 81 Appendix A – City of San Antonio, Texas-
Litigation ........................................................................................... 82 General Demographic and Economic Information ..................... A-1
The City of San Antonio ............................................................... 82 Appendix B – City Public Service - Audited Financial Statements
Systems Litigation and Claims ..................................................... 84 for the Fiscal Years Ended January 31, 2014 and 2013
Regulatory Compliance ...................................................................... 86 and Independent Auditors' Report .............................................. B-1
Enterprise Risk Management & Solutions .......................................... 86 Appendix C – Certain Provisions of the Ordinances ........................ C-1
Investments ......................................................................................... 87 Appendix D – Form of Opinions of Co-Bond Counsel .................. D-1
Operating Funds ........................................................................... 87 Appendix E – Table of Refunded Bonds .......................................... E-1
STP Decommissioning Funds ...................................................... 88
STP Decommissioning Trust ........................................................ 88
Master Trust (TCC Funded) ......................................................... 89

Investment Policies ....................................................................... 90

Additional Provisions ................................................................... 90
Continuing Disclosure of Information ................................................ 91
Annual Reports ............................................................................. 91
Notice of Certain Events .............................................................. 91
Availability of Information ........................................................... 92
Limitations and Amendments ....................................................... 92
Compliance with Prior Undertakings ........................................... 93
Receipt of Internal Revenue Service Audit ......................................... 93
Legal Matters ...................................................................................... 94
Underwriting ....................................................................................... 94
Tax Matters ......................................................................................... 95
Tax Exemption ............................................................................. 95
Tax Changes ................................................................................. 95
Ancillary Tax Consequences ........................................................ 96

The cover page, subsequent pages hereof, and Appendices attached hereto, are part of this Official Statement.

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OFFICIAL STATEMENT

Relating To

CITY OF SAN ANTONIO, TEXAS ELECTRIC AND GAS SYSTEMS
VARIABLE RATE JUNIOR LIEN REVENUE REFUNDING BONDS

$125,000,000 $125,000,000
SERIES 2015A SERIES 2015B

INTRODUCTORY STATEMENT

This Official Statement, including the cover page and the Appendices hereto, of the City of San Antonio, Texas ("City"), is provided
to furnish information with respect to the following series of City bonds: $125,000,000 Electric and Gas Systems Variable Rate
Junior Lien Revenue Refunding Bonds, Series 2015A (the "Series A Bonds") and $125,000,000 Electric and Gas Systems Variable
Rate Junior Lien Revenue Refunding Bonds, Series 2015B (the "Series B Bonds" and, together with the Series A Bonds, the "Bonds").
Certain terms not defined herein will have the meanings ascribed thereto in the Ordinances (hereinafter defined).

The Bonds are being issued to (i) refinance existing variable rate debt (hereinafter defined and referred to as the "Refunded Bonds")
to permit the City to maintain variable interest rate exposure (over term rate periods having durations of, generally, one to five years)
without the requirement to also maintain third party bank liquidity, and (ii) pay costs and expenses relating to the issuance of each
series of the Bonds. See "PLAN OF FINANCE - Purpose" herein.

The Bonds are issued pursuant to separate ordinances, each relating to a particular series of Bonds (individually, the "Series A
Ordinance" and the "Series B Ordinance" and each a "Ordinance"; together, the "Ordinances") and adopted by the City Council of the
City ("City Council") on October 30, 2014, as Additional Junior Lien Obligations (as hereinafter defined), pursuant to the provisions
of the City ordinances authorizing the currently outstanding City's Electric and Gas Systems Junior Lien Revenue Bonds, Series 2003,
the City's Electric and Gas Systems Junior Lien Revenue Bonds, Taxable Series 2010A (Direct Subsidy – Build America Bonds), the
City's Electric and Gas Systems Junior Lien Revenue Refunding Bonds, Taxable Series 2010B (Direct Subsidy – Build America
Bonds), the City's Electric and Gas Systems Variable Rate Junior Lien Revenue Refunding Bonds, Series 2012A, Electric and Gas
Systems Variable Rate Junior Lien Revenue Refunding Bonds, Series 2012B, and the City's Electric and Gas Systems Variable Rate
Junior Lien Revenue Refunding Bonds, Series 2012C, the City's Electric and Gas Systems Junior Lien Revenue Bonds, Series 2013,
the City's Electric and Gas Systems Junior Lien Revenue Bonds, Series 2014, and the City's Electric and Gas Systems Junior Lien
Revenue Refunding Bonds, Series 2014 (collectively, along with the Bonds, the "Junior Lien Obligations"). After giving effect to the
issuance of the Bonds and the refunding of the Refunded Bonds, the City will have outstanding $1,730,140,000 of Junior Lien
Obligations.

The Junior Lien Obligations are secured by a lien on and pledge of the Net Revenues of the City's electric and gas systems (the
"Systems") junior and inferior to the lien thereon and pledge thereof securing the payment of the Senior Lien Obligations (defined in
the herein-after defined Bond Ordinances to mean, generally, those City obligations payable from a first lien on and pledge of the Net
Revenues of the Systems), currently outstanding in an aggregate principal amount of $3,568,655,000. In addition to additional Senior
Lien Obligations, the City ordinances authorizing the issuance of the Junior Lien Obligations (collectively, the "Bond Ordinances")
permit the issuance of additional obligations of the City payable from a lien on and pledge of the Net Revenues on parity with the lien
thereon and pledge thereof securing the then-outstanding Junior Lien Obligations (such additional obligations, the "Additional Junior
Lien Obligations"), if certain historical earnings tests and other conditions are satisfied. See "THE BONDS – Bond Provisions" and
"JUNIOR LIEN OBLIGATIONS" herein. The Bond Ordinances also permit the City to issue obligations payable from a lien on and
pledge of the Net Revenues that is subordinate and inferior to the lien thereon and pledge thereof securing the payment of the Junior
Lien Obligations (such subordinate lien obligations are identified in the Bond Ordinances as the Commercial Paper Obligations and
the Inferior Lien Obligations, as such terms are hereinafter defined). The Bond Ordinances also provide that, other than the Senior
Lien Obligations, no obligations of the City shall be issued that are payable from a lien on and pledge of the Net Revenues of the
Systems that is senior and superior to the lien thereon and pledge thereof securing the payment of the currently outstanding Junior
Lien Obligations and any Additional Junior Lien Obligations hereafter issued.

1
The City also has outstanding certain short-term obligations for the Systems under a commercial paper program ("Commercial Paper
Program"), the issuance of which the City authorized by an amended and restated ordinance adopted on October 11, 2012 (the
"Commercial Paper Ordinance") in an authorized amount not to exceed $600,000,000 (obligations issued or incurred under the
Commercial Paper Programs are referred to herein as "Notes" or "Commercial Paper Obligations"). The Commercial Paper Ordinance
defines (i) "New Series Bonds" to mean the Senior Lien Obligations, being City obligations payable from and secured by a first and
prior lien on and pledge of the Net Revenues of the Systems and (ii) "Prior Lien Bonds" to mean the Junior Lien Obligations, any
Additional Junior Lien Obligations, and any other City obligations payable from a lien on and pledge of the Net Revenues of the
Systems that is subordinate and inferior to the lien thereon and pledge thereof securing the Senior Lien Obligations, but senior and
superior to the lien thereon and pledge thereof securing the Commercial Paper Obligations. As of the date hereof, the City has an
aggregate principal amount of $360,000,000 of Notes outstanding under the Commercial Paper Program. The City effectuated
amendments to two of its three revolving credit agreements on June 26, 2013 that increased aggregate liquidity support for the Notes
from $450,000,000 to $600,000,000 (the maximum permitted under the Commercial Paper Ordinance). See "COMMERCIAL
PAPER PROGRAM" herein.

The City has also established a revolving finance program for the purpose of providing an interim financing mechanism for operating,
maintaining, and improving the Systems. Under this program, the City is authorized to issue taxable or tax-exempt notes, bearing
interest at fixed or variable rates, in an aggregate principal amount at any one time outstanding not to exceed $100,000,000. These
notes are Inferior Lien Obligations under the ordinance establishing the program, as well as the Bond Ordinances. As of the date of
this Official Statement, $25,200,000 of taxable notes under this program are currently outstanding. See "FLEXIBLE RATE
REVOLVING NOTE PRIVATE PLACEMENT PROGRAM" herein.

There follows in this Official Statement a description of the City, the City Public Service Board of San Antonio, Texas ("Board",
"CPS", or "CPS Energy"), and the Systems; certain information relating to the City and the State of Texas ("State"); certain
information relating to the sources of payment for the Bonds, together with summaries of certain provisions of the Ordinances and
the Bonds; and a discussion of factors affecting the electric and gas industries generally. All references herein to agreements and
documents are qualified in their entirety by reference to the definitive forms thereof, and all references to the Bonds are further
qualified by reference to the information with respect thereto contained in the Ordinances. Copies of such documents may be obtained
from the City or the Co-Financial Advisors upon request by electronic mail or upon payment of reasonable copying, handling and delivery
charges.

This Official Statement speaks only as to its date and the information contained herein is subject to change. A copy of the Final Official
Statement relating to the Bonds will be available from the Municipal Securities Rulemaking Board ("MSRB"), through its Electronic
Municipal Market Access ("EMMA") system. See "CONTINUING DISCLOSURE OF INFORMATION" herein for a description of the
City's and the Board's undertaking to provide certain information on a continuing basis.

PLAN OF FINANCE

Purpose

As previously stated, the Bonds are being issued to (i) refinance the outstanding variable rate Junior Lien Obligations identified in
Appendix E hereto (the "Refunded Bonds") to permit the City to maintain variable interest rate exposure (over term rate periods
having durations of, generally, one to five years) without the requirement to also maintain third party bank liquidity, and (ii) pay costs
and expenses relating to the issuance of the Bonds.

The Refunded Bonds

The Refunded Bonds, and interest due thereon, are to be paid on the scheduled redemption date therefor from funds, derived from
Bond proceeds and other lawfully available City funds, to be deposited with U.S. Bank National Association, Dallas, Texas (the
"Refunded Bonds Paying Agent"), as the paying agent / registrar for the Refunded Bonds pursuant to the terms of a paying
agent/registrar agreement between the City and the Refunded Bonds Paying Agent.

The Ordinances provide that the City will deposit certain proceeds of the sale of the Bonds, along with other lawfully available funds
of the Board, with the Refunded Bonds Paying Agent in the amount necessary to accomplish the discharge and final payment of the
Refunded Bonds. Such funds will be held uninvested by the Refunded Bonds Paying Agent in the interest and sinking fund heretofore
established and now maintained for the payment of principal of and interest on the Refunded Bonds. Public Financial Management,
Inc. and Estrada Hinojosa & Company, Inc., in their capacity as Co-Financial Advisors to CPS Energy, will certify as to the sufficiency
(the "Sufficiency Certificate") of the amounts initially deposited to such interest and sinking fund, without regard to investment, to
pay the principal of and interest on the Refunded Bonds when due at their scheduled date of redemption. The cash held in such interest
and sinking fund will not be available to pay the debt service requirements on the Bonds. Prior to or simultaneously with the issuance
of the Bonds, the City will give irrevocable instructions to provide notice to the owners of the Refunded Bonds that the Refunded
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