Page 86 - Burleson FY22 City Budget

ATTACHMENT E - SECURITIES LAW COMPLIANCE AND DISCLOSURE POLICY©

Issuers and Obligated Persons should apply the Materiality standard in Section 3.02(f) and the relevant facts and
circumstances in Section 5.02(c) of this Policy, in conjunction with the factors below for purposes of determining whether a lease
that operates a vehicle to borrow money is Material and subject to an Event Filing under Event 15.

Given the difference in size, sophistication, features and number of obligations executed by certain issuers and Obligated
Persons, factors used in determining the materiality of a lease that operates as a vehicle to borrow money may vary. The Disclosure
Officer may utilize factors relevant to the Issuer or Obligated Person which may include, but are not limited to, one or more the
following:

i. Whether the cost of the lease incurred and the payment obligations thereof exceeds a
specified percentage of the Issuer's or Obligated Person's fund balance (for purposes of this
and the following considerations, the Issuer must determine, given its circumstances, the
appropriate way to measure the impact of a lease, e.g., by the aggregate payments required,
by principal amount or by annual payment impact to the Issuer's debt portfolio);

ii. Whether the incurrence of the lease will increase the outstanding indebtedness of the Issuer
or Obligated Person by more than a specified ratio or percentage;

iii. Whether the incurrence of the lease and the payment obligations thereof exceeds a specified
percentage of the Issuer's unrestricted revenues;

iv. Whether the lease represents multiple counterparts of a single transaction that, if incurred at
once, would exceed the limits stated in (i), (ii) or (iii) above;

v. Whether the incurrence of the lease in conjunction with other outstanding Financial
Obligations would in the aggregate exceed the limits stated in (i), (ii) and (iii) above; or

vi. Whether the lease has acceleration provisions or is considered a security on parity or senior
to outstanding Financial Obligations.

When utilizing the above factors, the Disclosure Officer must be aware that although a lease may not be Material when compared
to the Issuer's or any Obligated Person's general revenues and fund balance, such lease may be material to Financial Obligations
pledged to be paid from the specifically pledged revenues and fund balances. Therefore, the Disclosure Officer must look at both
the general revenues and the specifically pledged revenues of the Issuer and any Obligated Person when determining the
materiality of a lease that operates as a vehicle to borrow money.

If after using the Materiality standard in Section 3.02(f), the relevant facts and circumstances in Section 5.02(c) of this
Policy and the factors described above, the Disclosure Officer determines that the lease operating as a vehicle to borrow money
is Material, a filing under Event 15 must be made within ten business days from the incurrence of such lease.

If a determination of Materiality is made under factor (v) above for a lease or any other Financial Obligation, additional
Financial Obligations incurred thereafter may likely carry a de facto Materiality designation. As such, factor (v) above works as a
magnitude test of the Issuer or Obligated Person as it becomes the Issuer or Obligated Person's Materiality threshold for all
outstanding Financial Obligations.

III. Communication Amongst Departments Once Leases are Incurred

The Disclosure Officer should become aware of the frequency in which the Issuer or Obligated Person incurs leases, as opposed
to other forms Financial Obligations, in the ordinary course of the Issuer or Obligated Person's business. To further communication
amongst multiple departments within the Issuer or Obligated Person, the Disclosure Officer should require that any member of the
Issuer or Obligated Peron's staff authorized to execute leases on behalf of the Issuer or Obligated Person report and provide
copies of all leases directly to the Disclosure Officer within two (2) business days prior to their execution. Upon receipt of any
lease, the Disclosure Officer shall immediately work with appropriate staff and accountants, municipal advisors, financial advisors
and other outside consultants of the Issuer, to the extent necessary, to determine whether the lease operates as a vehicle to borrow

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