OFFICIAL STATEMENT Dated: June 16, 2010 NEW ISSUE - BOOK-ENTRY-ONLY RATINGS: Moody's: “Aa1” S&P: “AAA” (See “OTHER INFORMATION – Ratings”) In the opinion of McCall, Parkhurst & Horton L.L.P. and Escamilla, Poneck & Cruz, LLP (“Co-Bond Counsel”), interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under “TAX MATTERS” herein, including the alternative minimum tax on corporations. $295,850,000 CITY OF DALLAS, TEXAS (Dallas, Denton, Collin and Rockwall Counties) WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2010 Dated Date: June 15, 2010 Due: October 1, as shown on the inside cover PAYMENT TERMS . Interest on the $295,850,000 City of Dallas, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 2010 (the “Bonds”) will accrue from the Dated Date shown above and will be payable on October 1, 2010, and on each April 1 and October 1 thereafter until maturity or prior redemption. Interest on the Bonds will be calculated on the basis of a 360-day year consisting 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”), pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See “THE BONDS - Book-Entry-Only System” herein. The initial Paying Agent/Registrar for the Bonds is Wells Fargo Bank N.A. (see “THE BONDS - Paying Agent/Registrar”). AUTHORITY FOR ISSUANCE . The Bonds are issued pursuant to the general laws of the State of Texas, particularly Chapter 1207, Texas Government Code, and an ordinance (the “Ordinance”) passed by the city council (the “City Council”) of the City of Dallas, Texas (the “City”) on June 9, 2010, and are special obligations of the City, payable, both as to principal and interest, solely from and together with certain outstanding parity bonds secured by a first lien on and pledge of the Pledged Revenues (defined herein) of the City's Waterworks and Sewer System (the “System”), which include the Net Revenues of the System remaining after deduction of current expenses of operation and maintenance. The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see “THE BONDS – Security and Source of Payment”). In the Ordinance, the City Council authorized the City Manager to execute a bond purchase agreement to effect the sale of the Bonds. PURPOSE . Proceeds from the sale of the Bonds, together with other available System funds, will be used to refund (1) $235,486,000 in principal amount of the City’s outstanding Commercial Paper Notes (as defined herein) and (2) the Refunded Bonds (see SCHEDULE I – Schedule of Refunded Bonds). MATURITY SCHEDULE Cusip Prefix: 235416 See Inside Cover LEGALITY. The Bonds are offered for delivery when, as and if issued and received by the Underwriters listed below and subject to the approving opinion of the Attorney General of the State of Texas, and the delivery on the date of delivery of the Bonds of the approving legal opinion of McCall, Parkhurst & Horton L.L.P., and Escamilla, Poneck & Cruz, LLP, Dallas, Texas, Co-Bond Counsel (see Appendix D - “Form of Co-Bond Counsel's Opinion”). Certain legal matters will be passed upon for the Underwriters by their co- counsel, Winstead PC and Adorno Yoss White & Wiggins, LLP, Dallas, Texas. DELIVERY. It is expected that the Bonds will be available for delivery through DTC on or about July 14, 2010. SIEBERT BRANDFORD SHANK & CO., LLC J.P. MORGAN SECURITIES INC. BofA Merrill Lynch Cabrera Capital Markets, LLC Morgan Stanley M.R. Beal & Company Raymond James & Associates, Inc. RBC Capital Markets Southwest Securities MATURITY SCHEDULE CUSIP Prefix: 235416(1) Maturity Cusip (1) Maturity Cusip (1) (October 1) Amount Rate Yield Suffix (October 1) Amount Rate Yield Suffix 2011$ 9,105,000 3.000% 0.350% X41 2019$ 4,125,000 4.250% 3.150% Y40 2012 6,560,000 3.000% 0.760% X58 2019 4,000,000 5.000% 3.150% 2H6 2012 6,000,000 4.000% 0.760% 2A1 2020 1,250,000 4.500% 3.320% Y57 2013 2,535,000 3.000% 1.170% X66 2020 7,275,000 5.000% 3.320% 2J2 2013 7,910,000 4.000% 1.170% 2B9 2021 8,955,000 5.000% 3.470% Y65 2014 3,795,000 2.000% 1.540% X74 2022 9,400,000 5.000% 3.590% Y73 2014 3,500,000 3.000% 1.540% 2C7 2023 9,880,000 5.000% 3.680% Y81 2015 3,360,000 4.000% 1.900% X82 2024 10,380,000 5.000% 3.760% Y99 2015 3,200,000 5.000% 1.900% 2D5 2025 10,915,000 5.000% 3.830% Z23 2016 3,425,000 4.000% 2.330% X90 2026 11,465,000 5.000% 3.900% Z31 2016 3,330,000 5.000% 2.330% 2E3 2027 12,045,000 5.000% 3.970% Z49 2017 4,050,000 3.000% 2.670% Y24 2028 12,665,000 5.000% 4.040% Z56 2017 3,000,000 5.000% 2.670% 2F0 2029 13,300,000 5.000% 4.090% Z64 2018 3,105,000 4.000% 2.930% Y32 2030 8,905,000 5.000% 4.140% Z72 2018 4,655,000 5.000% 2.930% 2G8 $51,855,000 5.000% Term Bond Maturing October 1, 2035 Priced at 4.380%, CUSIP 235416Z98 $51,905,000 5.000% Term Bond Maturing October 1, 2039 Priced at 4.410%, CUSIP 235416Z80 (plus accrued interest from the Dated Date) (1) 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 services provided by services provided by CUSIP Global Services. The Underwriters, the City, and the Co-Financial Advisors are not responsible for the selection or correctness of the CUSIP numbers set forth herein. 2 This Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor any offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Official Statement constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with this offering, the Underwriters may over-allot or effect transactions that stabilize or maintain the market price of the Bonds offered hereby at levels above that which might otherwise prevail in the open market. Any such stabilizing, if commenced, may be discontinued at any time. This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. No dealer, broker, salesperson or other person has been authorized to give information or to make any representation other 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 believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the promise or guarantee of the City's Co- Financial Advisors. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be realized. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have 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 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. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE THE MARKET PRICE OF THE ISSUE AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET, SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE AGREEMENTS OF THE CITY AND OTHERS RELATED TO THE BONDS ARE CONTAINED SOLELY IN THE CONTRACTS DESCRIBED HEREIN.