Cities in Texas are divided into three classes: general law cities, special law cities and home-rule cities.
If the Bank loans to a home-rule city, it must obtain a copy of the charter and review the charter to confirm that the city has the authority to borrow the amount and for the purpose stated in the council resolution. It should also obtain a copy of the resolution or ordinance of the city council signed by all council members which authorizes the execution of the loan documents and designates the council member(s) authorized to sign the documents.
If the Bank loans to a general or special law municipality, the Bank should obtain a legal opinion which states that the municipality is authorized by the Texas legislature to borrow money for the purpose stated in the city council resolution or ordinance and a copy of the resolution or ordinance signed by all council members which authorizes the execution of the loan documents and designates the council member(s) authorized to sign the loan documents. Approval by the attorney general may be required.