01-16
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RESOLUTION NO. 01-16
A RESOLUTION PROVIDING FOR THE SALE OF NOT TO EXCEED
$50,000,000 INFRASTRUCTURE SALES TAX REVENUE BONDS, SERIES
2001; SETTING FORTH THE FORM OF THE NOTICE OF BOND SALE AND
SUMMARY NOTICE OF BOND SALE RELATING TO THE SALE OF SUCH
BONDS; DIRECTING PUBLICATION OF THE SUMMARY NOTICE OF SALE
RELATING TO SUCH BONDS; PROVIDING FOR THE OPENING OF BIDS
RELATING TO THE SALE OF THE BONDS; SETTING FORTH THE OFFICIAL
NOTICE OF SALE AND BID FORMS; PROVIDING THAT SUCH BONDS
SHALL BE ISSUED IN FULL BOOK ENTRY FORM; APPROVING THE FORM
OF A PRELIMINARY OFFICIAL STATEMENT; PROVIDING FOR
COMPLIANCE WITH A CONTINUING DISCLOSURE CERTIFICATE;
DESIGNATING A REGISTRAR AND PAYING AGENT; AUTHORIZING THE
PURCHASE OF MUNICIPAL BOND INSURANCE; AUTHORIZING THE
PURCHASE OF A DEBT SERVICE RESERVE FUND SURETY BOND;
PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on May 6, 1999, the City Commission of the City of Clearwater, Florida (the
"City" or the "Issuer") enacted Ordinance No. 6352-99 (the "Bond Ordinance") to provide for the
issuance of City's Infrastructure Sales Tax Revenue Bonds, Series [to be determined], in one or more
series from time to time payable from Sales Tax Revenues (as defined therein); and
WHEREAS, the City previously designated the initial project consisting of roadway
improvements to Clearwater Beach (the "Series 1999 Project"), to be financed with the first series
of bonds, the "Infrastructure Sales Tax Revenue Bonds, Series 1999" (the "Series 1999 Bonds"); and
the second project consisting of the construction of a new Memorial Causeway Bridge (the "Series
2000 Project"), the costs of which are to be financed, in part, with the proceeds of the "Infrastructure
Sales Tax Revenue Bonds, Series 2000," (the "Series 2000 Bonds"); and
WHEREAS, it is in the best interest of the City to designate a third project previously
identified by the City Commission of the City in Resolution No. 00-22, adopted on May 18,2000,
and as Agenda Item #29, approved by the City on September 21, 2000, consisting of a new main
library facility (the "Series 2001 Project"), the costs of which are to be financed, in part, with the
proceeds of the "Infrastructure Sales Tax Revenue Bonds, Series 2001," (the "Series 2001 Bonds");
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY
OF CLEARWATER, FLORIDA, as follows:
SECTION 1. AUTHORIZATION OF BONDS AND SERIES DESIGNATION. That
portion of the Infrastructure Sales Tax Revenue Bonds, Series [to be determined] authorized by the
Bond Ordinance being offered pursuant to this resolution is hereby designated as the not to exceed
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$50,000,000 City of Clearwater, Florida, Infrastructure Sales Tax Revenue Bonds, Series 2001 (the
"Series 2001 Bonds"), which Series 2001 Bonds are hereby authorized to be issued. The proceeds
of the Series 2001 Bonds shall be used to pay (i) a portion of the costs of the Series 1999 Project,
the Series 2000 Project and the Series 2001 Project (as hereinafter identified), (ii) the costs of issuing
the Series 2001 Bonds, (iii) the premium on the Bond Insurance Policy, if any and (iv) the premium
for the debt service reserve fund surety bond or to make a deposit to the Reserve Fund. The proceeds
ofthe Series 2001 Bonds not required to pay the amounts described in clauses (ii) through (iv) in
the immediately preceding sentence shall be deposited into the subaccount in the Construction Fund
(created by the Bond Ordinance) for the Series 1999 Project, the Series 2000 Project and the Series
2001 Project (collectively referred to as the "Projects").
SECTION 2. PUBLIC SALE. There is hereby authorized to be sold pursuant to a public
sale not to exceed $50,000,000 City of Clearwater, Florida, Infrastructure Sales Tax Revenue Bonds,
Series 2001.
SECTION 3. SALE OF SERIES 2001 BONDS; REDEMPTION AND MATURITY
PROVISIONS. The Financial Services Administrator is hereby directed to arrange for the sale of
the Series 2001 Bonds utilizing the electronic bid process of PARITY through the publication of the
Summary Notice of Sale of the Bonds in a newspaper regularly distributed in the City of Clearwater
and in The Bond Buver, such publications to be on such date as shall be deemed by the Financial
Services Administrator to be in the best interest of the Issuer and such publications to be not less
than ten (10) calendar days prior to the date of sale as required by Section 218.385(1), Florida
Statutes; and to publish such Notice in such other newspapers on such dates as may be deemed
appropriate by the Financial Services Administrator.
The Series 200 I Bonds shall not be subject to optional redemption and shall mature on the
dates as is set forth in the Notice of Bond Sale hereinafter approved.
Proposals for purchase of the Series 2001 Bonds will be received electronically via PARITY
as provided in the Official Notice of Sale, from the time that the Notice of Bond Sale is published
until 11 :00 a.m., Eastern Daylight Savings Time, on such date and time as may be established by the
Financial Services Administrator of the City or her designee, and if such date is subject to change,
communicated through Thompson Municipal Market Monitor (TM3) not less than twenty-four (24)
hours prior to the time bids are to be received for the purchase of the City of Clearwater, Florida,
Infrastructure Sales Tax Revenue Bonds, Series 2001; provided that if the internet is not working
on the designated bid date, the bid date shall be automatically changed to the next business day, and
the City will communicate a confirmation of this change in bid date through Thompson Municipal
Market Monitor (TM3), all as provided in the Notice of Sale (the "Bid Date").
SECTION 4. CREATION OF ACCOUNT IN THE CONSTRUCTION FUND AND
USE OF FUNDS. There is hereby created with the Construction Fund four separate subaccounts,
namely, the Cost of Issuance Account, the Series 1999 Project Account, the Series 2000 Project
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Account and the Series 2001 Project Account. Moneys held in the Cost of Issuance Account shall
be used to pay the costs of issuing and delivering the Series 2001 Bonds. Moneys held in the Series
1999 Project Account shall be used immediately upon the closing of the sale of the Series 2001
Bonds to reimburse the City for the costs of the Series 1999 Project previously paid by the City.
Moneys held in the Series 2000 Project Account shall be disbursed by the City to the State of Florida
Department of Transportation (the "DOT") in accordance with the requirements of the Joint
Participation Agreement dated as of June 27, 1997, between the City and the DOT, as amended and
supplemented from time to time. When any funds are returned or refunded to the City as
contemplated by the Joint Participation Agreement, such funds upon receipt shall be deposited into
the Series 2000 Project Account and thereafter used by the City to pay the costs of other capital
projects as shall be determined by the City after the issuance ofthe Series 2001 Bonds. Moneys held
in the Series 200 I Project Account shall be used by the City to pay the costs of the Series 2001
Project. Once all costs of the Projects have been paid or otherwise provided for, any funds then on
deposit in the Construction Fund may be used by the City to either (a) pay a portion of the then
outstanding principal amount of the Series 200 I Bonds, or (b) pay all or a portion of the costs of
other capital projects identified by the City in a subsequent resolution adopted after the issuance of
the Series 200 I Bonds.
SECTION 5. DISPOSITION OF PROCEEDS OF SERIES 2001 BONDS. The
proceeds from the sale of the Series 2001 Bonds shall be deposited as follows:
(a) An amount equal to the accrued interest on the Series 2001 Bonds shall be deposited into
the Interest Account in the Bond Service Funds;
(b) An amount determined by the Financial Services Administrator to be necessary to pay
the costs of issuing the Series 2001 Bonds, including the premium due to the Bond Insurer and the
premium for the reserve account surety bond, shall be deposited into the Cost of Issuance Account
in the Construction Fund to pay such costs;
( c) An amount equal to $10,000,000 shall be deposited into the Series 1999 Project Account
in the Construction Funds;
(d) An amount equal to $22,330,000 shall be deposited into the Series 2000 Project Account
in the Construction Fund; and
(e) An amount equal to $13,250,000 shall be deposited into the Series 2001 Project Account
in the Construction Funds.
SECTION 6. APPROVAL OF FORMS. The Notice of Bond Sale and Summary Notice
of Sale of the Bonds to be submitted for purchase of the Series 2001 Bonds shall be in substantially
the forms annexed hereto, as Exhibits A and B, respectively, together with such changes as shall be
deemed necessary or desirable by the Financial Services Administrator depending on the bidding
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method selected in accordance with Section 3 hereof, incorporated herein by reference. The form
ofthe Official Bid Form shall be provided by the internet auction website selected by the Financial
Services Administrator, and shall be reasonably satisfactory to the Financial Services Administrator.
SECTION 7. BOOK ENTRY ONLY BONDS. It is in the best interest of the City and the
residents and inhabitants thereof that the Series 2001 Bonds be issued utilizing a pure book-entry
system of registration. In furtherance thereof, the City has previously executed and delivered a
Blanket Letter of Representations with the Depository Trust Company. For so long as the Series
2001 Bonds remain in such book entry only system of registration, in the event of a conflict between
the provisions of the Bond Ordinance and of the Blanket Letter of Representations, the terms and
provisions of the Blanket Letter of Representations shall prevail.
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SECTION 8. PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL
STATEMENT. The Interim City Manager and Financial Services Administrator are authorized and
directed to cause a Preliminary Official Statement to be prepared in substantially the form attached
hereto as Exhibit C, with such changes, insertions and omissions as shall be approved by the Interim
City Manager and Financial Services Administrator, containing a copy of the attached Notice of
Bond Sale and to furnish a copy of such Preliminary Official Statement to interested bidders. The
Interim City Manager and Financial Services Administrator are authorized to deem final the
Preliminary Official Statement prepared pursuant to this Section for purposes of Rule 15c2-12 (the
"Rule") of the Securities and Exchange Commission. Upon the award of the Series 2001 Bonds to
the successful bidder, the City shall also make available a reasonable number of copies of the
Preliminary Official Statement to such bidder, who may mail such Preliminary Official Statements
to prospective purchasers at the bidder's expense. Following the award of the Series 2001 Bonds,
the Interim City Manager and the Financial Services Administrator shall cause to be prepared a final
Official Statement dated as of the Bid Date, reflecting such changes in the Preliminary Official
Statement as may be necessary to reflect the purchaser's bid. The Mayor-Commissioner and Interim
City Manager are hereby authorized to execute and delivery such final Official Statement, with such
changes, insertions and omissions as may be approved by such officers.
SECTION 9. CONTINUING DISCLOSURE. The City hereby covenants and agrees that,
in order to provide for compliance by the City with the secondary market disclosure requirements
of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing
Disclosure Certificate in substantially the form attached hereto as Exhibit D, to be executed by the
City and dated the date of issuance and delivery of the Series 2001 Bonds, as it may be amended
from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate").
Notwithstanding any other provision of this Resolution, failure of the City to comply with such
Continuing Disclosure Certificate shall not be considered an event of default; however, any
Bondholder may take such actions as may be necessary and appropriate, including seeking mandate
or specific performance by court order, to cause the City to comply with its obligations under this
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SECTION 10. REGISTRAR AND PAYING AGENT. The Bank of New York,
Jacksonville, Florida, is hereby appointed as Registrar and Paying Agent for the Series 2001 Bonds.
SECTION 11. MUNICIPAL BOND INSURANCE POLICIES AND RESERVE
ACCOUNT SURETY BONDS. Pursuant to the Bond Ordinance, Financial Security Assurance
Inc. ("FSA") has been selected to provide its Municipal Bond Insurance Policy (the "Policy") as the
Bond Insurance Policy (as defined in the Bond Ordinance) as additional security for payment of
principal and interest on the Series 2001 Bonds, and to provide its debt service reserve fund surety
bond or insurance policy (the "Reserve Policy") in the amount of the applicable Reserve
Requirement to fund the Reserve Fund for the benefit of the Series 2001 Bonds. Selection ofFSA
as the Bond Insurer (as defined in the Bond Ordinance) and FSA as the provider of the Reserve
Policy is hereby ratified and confirmed and payment for such Bond Insurance Policy and Reserve
Policy from proceeds of the Series 2001 Bonds is hereby authorized. The Issuer hereby accepts the
terms, conditions and agreements relating to the Bond Insurance Policy and the Reserve Policy in
accordance with the Municipal Bond Insurance Commitment and Municipal Bond Debt Service
Reserve Insurance Commitment, each as attached hereto as Exhibit E and incorporated herein. A
statement of insurance is hereby authorized to be printed on or attached to the Series 2001 Bonds
for the benefit and information of the holders of the Series 2001 Bonds.
In addition to the covenants and agreements of the City previously contained in the Bond
Ordinance regarding the rights of the Bond Insurer and the provider of the Reserve Policy, which
are hereby incorporated herein, the City hereby makes the following additional covenants and
agreements for the benefit ofthe Bond Insurer and the Holders of the Series 2001 Bonds while the
Bond Insurance Policy insuring the Series 2001 Bonds and the Reserve Policy are in full force and
effect:
(a)
"Bond Insurance Policy" shall mean the insurance policy issued by the Bond Insurer
guaranteeing the scheduled payment of principal of and interest on the Bonds when due.
(b)
"Bond Insurer" shall mean Financial Security Assurance Inc., a New York stock insurance
company, or any successor thereto or assignee thereof.
(c)
The Bond Insurer shall be deemed to be the sole holder of the Bonds insured by it for the
purpose of exercising any voting right or privilege or giving any consent or direction or
taking any other action that the holders of the Bonds insured by it are entitled to take
pursuant to the Bond Ordinance. The maturity of Bonds insured by the Bond Insurer shall
not be accelerated without the consent of the Bond Insurer.
(d)
No waiver, modification, amendment or supplement to the Bond Ordinance may become
effective except upon obtaining the prior written consent of the Bond Insurer.
(e)
Copies of any modification or amendment to the Bond Ordinance shall be sent to Standard
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(f)
(g)
& Poor's Credit Markets Services and Moody's Investors Service, Inc. at least 10 days prior
to the effective date thereof.
Amounts paid by the Bond Insurer under the Bond Insurance Policy shall not be deemed paid
for purposes of the Bond Ordinance and shall remain Outstanding and continue to be due and
owing until paid by the Issuer in accordance with the Bond Ordinance. The Bond Insurer
shall, to the extent it makes any payment of principal of or interest on the Bonds, become
subrogated to the rights of the recipients of such payments in accordance with the terms of
the Bond Insurance Policy. The Bond Ordinance shall not be discharged unless all amounts
due or to become due to the Bond Insurer have been paid in full or duly provided for.
Claims Upon the Bond Insurance Policy and Payments by and to the Bond Insurer.
If, on the business day prior to the related scheduled interest payment date or principal
payment date ("Payment Date") there is not on deposit with the Paying Agent, after making
all transfers and deposits required under the Bond Ordinance, moneys sufficient to pay the
principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall
make a claim under the Bond Insurance Policy and give notice to the Bond Insurer and to its
designated agent (if any) (the "Bond Insurer's Fiscal Agent") by telephone or telecopy of the
amount of such deficiency, and the allocation of such deficiency between the amount
required to pay interest on the Bonds and the amount required to pay principal of the Bonds,
confirmed in writing to the Bond Insurer and the Bond Insurer's Fiscal Agent by 12:00 noon,
New York City time, on such Business Day by filling in the form of Notice of Claim and
Certificate delivered with the Bond Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption installment,
upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected
Bondholders who surrender their Bonds a new Bond or Bonds in an aggregate principal
amount equal to the unredeemed portion of the Bond surrendered. The Paying Agent shall
designate any portion of payment of principal on Bonds paid by the Bond Insurer, whether
by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity,
on its books as a reduction in the principal amount of Bonds registered to the then current
Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond
to the Bond Insurer, registered in the name of Financial Security Assurance Inc., in a
principal amount equal to the amount of principal so paid (without regard to authorized
denominations); provided that the Paying Agent's failure to so designate any payment or
issue any replacement Bond shall have no effect on the amount of principal or interest
payable by the Issuer on any Bond or the subrogation rights ofthe Bond Insurer.
The Paying Agent shall keep a complete and accurate record of all funds deposited by the
Bond Insurer into the Policy Payments Account (as hereinafter identified) and the allocation
of such funds to payment of interest on and principal paid in respect of any Bond. The Bond
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(h)
(i)
(j)
(k)
Insurer shall have the right to inspect such records at reasonable times upon reasonable
notice to the Paying Agent.
Upon payment of a claim under the Bond Insurance Policy the Paying Agent shall establish
a separate special purpose trust account for the benefit of Bondholders referred to herein as
the "Policy Payments Account" and over which the Paying Agent shall have exclusive
control and sole right of withdrawal. The Paying Agent shall receive any amount paid under
the Bond Insurance Policy in trust on behalf of Bondholders and shall deposit any such
amount in the Policy Payments Account and distribute such amount only for purposes of
making the payments for which a claim was made. Such amounts shall be disbursed by the
Paying Agent to Bondholders in the same manner as principal and interest payments are to
be made with respect to the Bonds under the sections hereof regarding payment of Bonds.
It shall not be necessary for such payments to be made by checks or wire transfers separate
from the check or wire transfer used to pay debt service with other funds available to make
such payments.
Funds held in the Policy Payments Account shall not be invested by the Paying Agent and
may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent.
Any funds remaining in the Policy Payments Account following a Payment Date shall
promptly be remitted to the Bond Insurer.
The Bond Insurer shall be provided with all reports, notices and correspondence to be
delivered under the terms of the Bond Ordinance.
The notice address of the Bond Insurer is: Financial Security Assurance Inc., 350 Park
Avenue, New York, New York 10022-6022, Attention: Managing Director -- Surveillance;
Re: Policy No. Telephone: (212) 826-0100; Telecopier: (212) 339-3529.
In each case in which notice or other communication refers to an Event of Default, then a
copy of such notice or other communication shall also be sent to the attention of General
Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED."
The Bond Insurer shall be deemed to be a third party beneficiary to the Bond Ordinance.
The Issuer shall repay any draws under the Reserve Policy and pay all related reasonable
expenses incurred by FSA. Interest shall accrue and be payable on such draws and expenses
from the date of payment by FSA at the Late Payment Rate. Late Payment Rate" means the
lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time
to time by The Chase Manhattan Bank at its principal office in the City of New York, as its
prime or base lending rate ("Prime Rate) (any change in such Prime Rate to be effective on
the date such change is announced by The Chase Manhattan Bank) plus 3%, and (ii) the then
applicable highest rate of interest on the Bonds and (b) the maximum rate permissible under
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(1)
(m)
(n)
(0)
applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be
computed on the basis of the actual number of days elapsed over a year of 360 days. In the
event The Chase Manhattan Bank ceases to announce its Prime Rate publicly, Prime Rate
shall be the publicly announced prime or base lending rate of such national bank as FSA
shall specify.
Repayment of draws and payment of expenses and accrued interest thereon at the
Late Payment Rate (collectively, "Policy Costs") shall commence in the first month
following each draw, and each such montWy payment shall be in an amount at least equal
to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to FSA shall be credited first to interest due,
then to the expenses due and then to principal due. As and to the extent that payments are
made to FSA on account of principal due, the coverage under the Reserve Policy will be
increased by a like amount, subject to the terms of the Reserve Policy.
All cash and investments in the Reserve Fund established for the Bonds (the
"Reserve Fund) shall be transferred to the Bond Service Fund for payment of debt service
on Bonds before any drawing may be made on the Reserve Policy or any other credit facility
credited to the Reserve Fund in lieu of cash (the "Credit Facility"). Payment of any Policy
Costs shall be made prior to replenishment of any such cash amounts. Draws on all Credit
Facilities (including the Reserve Policy) on which there is available coverage shall be made
on a pro-rata basis (calculated by reference to the coverage then available thereunder) after
applying all available cash and investments in the Reserve Fund. Payment of Policy Costs
and reimbursement of amounts with respect to other Credit Facilities shall be made on a pro-
rata basis prior to replenishment of any cash drawn from the Reserve Fund.
If the Issuer shall fail to pay any Policy Costs in accordance with the requirements of
Paragraph 11 (k) hereof, FSA shall be entitled to exercise any and all legal and equitable
remedies available to it, including those provided under the Ordinance other than (i)
acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect
owners of the Bonds.
The Ordinance shall not be discharged until all Policy Costs owing to FSA shall have been
paid in full. The Issuers obligation to pay such amounts shall expressly survive payment in
full of the Bonds.
In order to secure the Issuer's payment obligations with respect to the Policy Costs there shall
be granted and perfected in favor ofFSA a security interest (subordinate only to that of the
owners of the Bonds) in all revenues and collateral pledged as security for the Bonds.
The Paying Agent shall ascertain the necessity for a claim upon the Reserve Policy and to
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provide notice to FSA in accordance with the terms of the Reserve Policy at least five
business days prior to each date upon which interest or principal is due on the Bonds. The
Paying Agent shall give notice to FSA of any failure of the Issuer to make timely payment
in full of any required deposits to the Bond Service Fund within two business days of the
date due.
SECTION 12. AWARD OF BIDS. The Financial Services Administrator is hereby
authorized to accept the bids for the Series 2001 Bonds. The Interim City Manager and the Financial
Services Administrator are hereby authorized to award the sale of the Series 2001 Bonds on their
determination of the best bid submitted in accordance with the terms of the Notice of Bond Sale
provided for herein so long as the true interest cost rate shall not exceed 5% on the Series 2001
Bonds. The Interim City Manager and the Financial Services Administrator are hereby authorized
to award the sale of the Series 2001 Bonds as set forth above or to reject all bids for the Series 2001
Bonds. Such award shall be final.
SECTION 13. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution
are inconsistent with the provisions of Resolution No. 99-01, adopted by the City Commission of
the City on May 6, 1999 with respect to the Series 1999 Project, Resolution No. 00-19, adopted by
the City Commission of the City on June 1, 2000 with respect to the Series 2000 Project, and
Agenda Item No. 29 approved by the City Commission of the City on September 21,2000 with
respect to the Series 2001 Project, provisions of this Resolution shall control and supercede the
inconsistent provisions of such Resolutions.
SECTION 14. BOND YEAR. The City hereby selects December I of each year as the last
day of the Bond Year applicable to the Series 2001 Bonds for purposes of determining Bond Service
Requirement under the Ordinance.
SECTION 15. EFFECTIVE DATE. This resolution shall take effect immediately upon
adoption.
Passed and adopted by the City Commission of the City of Clearwater, Florida, this 0Hay
of May, 2001.
Approved as to form:
!. K. Akin, City Attorney
Attest:
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EXHIBIT A
FORM OF
OFFICIAL NOTICE OF BOND SALE
$50,000,000*
CITY OF CLEARWATER, FLORIDA
INFRASTRUCTURE SALES TAX REVENUE BONDS, SERIES 2001
NOTICE IS HEREBY GIVEN that electronic (as explained below) proposals will be
received electronically via PARITY in the manner described below, until 11 :00 a.m., Eastern
Daylight Savings Time, on (date)
Bids must be submitted electronically via PARITY in accordance with this Notice of Bond
Sale, until 11 :00 a.m., Eastern Daylight Savings Time, but no bid will be received after the time for
receiving bids specified above. To the extent any instructions or directions set forth in PARITY
conflict with this Notice of Bond Sale, the terms of this Notice of Bond Sale shall control. For
further information about PARITY, potential bidders may contact the financial advisor to the City,
Banc of America Securities, LLC, 1640 Gulf-to-bay Boulevard, Clearwater, Florida 33755 Atten:
David Thornton, telephone (727) 462-5804, or Dalcomp at 395 Hudson Street, New York, NY
10014, telephone (212) 806-8304. In the event of a malfunction in the electronic bidding process,
the bid date will automatically change to the next business day as confirmed in a communication
through Thompson Municipal Market Monitor (TM3).
Form of Series 2001 Bonds
The Series 2001 Bonds will be issued in book entry only form, without coupons, in
denominations of$5,000 or any integral multiples thereof, and shall be dated June 1,2001. Principal
of the Series 200 I Bonds shall be paid to the registered owners at the designated corporate trust
office of The Bank of New York (the "Paying Agent" and "Registrar"), upon presentment and
surrender of the Series 2001 Bonds. Interest on the Series 2001 Bonds shall be paid to the registered
owners as shown on the registration books maintained by the Registrar, by check or draft mailed to
each such owner's address as shown on the registration books maintained by the Registrar as of the
fifteenth (15th) day of the calendar month preceding such interest payment date. Interest will be
payable each June 1 and December 1, commencing December I, 200 I. Interest will be calculated
on the basis of a 360-day year of twelve 30-day months. For so long as The Depository Trust
Company, New York, New York, or its nominee, Cede & Co. (collectively, "DTC") is the registered
owner of the Series 2001 Bonds, payments of principal of, redemption premium, if any, and interest
on the Series 2001 Bonds will be made directly to DTC. Disbursements of such payments to the
DTC participants is the responsibility of DTC and further disbursement of such payments from the
DTC participants to the beneficial owners of the Series 2001 Bonds is the responsibility of the DTC
participants.
* Preliminary, subject to change
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Initially one bond will be issued for each maturity of the Series 2001 Bonds in the aggregate
principal amount of each such maturity and registered in the name of DTC. DTC, an automated
clearing house for securities transactions, will act as securities depository for the Series 2001 Bonds.
Purchases of the Series 2001 Bonds will be made in book-entry-only form (without certification).
It shall be the responsibility of the Successful Bidder (as hereinafter defined) for the Series 2001
Bonds to furnish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the
Series 2001 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined).
Maturity Schedule
The Series 2001 Bonds will mature on December I of the following years in the following
principal amounts:
Series 2001 Bonds
Principal Principal Principal
Maturitv Amount* Maturitv Amount* Maturitv Amount*
2002 $5,100,000 2005 $5,660,000 2008 $6,355,000
2003 5,270,000 2006 5,875,000 2009 6,620,000
2004 5,460,000 2007 6,105,000
Mandatorv Redemption Provisions
If the Successful Bidder designates any Series 200 I Bonds as term bonds as described under
"Designation of Term Bonds," the following mandatory redemption provisions shall apply with
respect to such designated term bonds:
The Series 2001 Bonds maturing on December 1, 20_ will be subject to mandatory
redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem
appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on
December 1,20_, and each December 1 thereafter, from amounts deposited in the Redemption
Account in the Bond S{~rvice Fund established by the Ordinance, in the following years and amounts
as follows:
Year
Amount
* Preliminary, subject to change
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Optional Redemption Provisions
The Series 2001 Bonds are not subject to optional redemption prior to their maturity date.
Adjustment of Principal Amount
After final computation of the bids, to achieve desired debt service levels, the City reserves
the right either to increase or decrease any Principal Amount of the Series 200 I Bonds (or any
Amortization Installment in the case ofa Term Bond) shown on the schedule of Principal Amounts
set forth above (the "Maturity Schedule"), by an amount not to exceed five percent (5%) of the stated
amount of each such Principal Amount on the Maturity Schedule and correspondingly adjust the
issue size, all calculations to be rounded to the nearest $5,000.
In the event of any such adjustment in the Series 2001 Bonds, no rebidding or recalculation
of the bid submitted with respect to such Series 2001 Bonds will be required or permitted. If
necessary, the total purchase price of the Series 2001 Bonds will be increased or decreased in direct
proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 2001
Bonds specified herein; and the Series 2001 Bonds of each maturity, as adjusted, will bear interest
at the same rate and must have the same initial reoffering yields as specified in the bid of the
Successful Bidder. However, the award will be made to the bidder whose bid produces the lowest
true interest cost, calculated as specified below, solely on the basis of the bid for the Series 2001
Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 2001 Bonds,
without taking into account any adjustment in the amount of Series 200 I Bonds set forth in the Bid
Maturity Schedule.
Desi~nation of Term Bonds
Bidders may specify that the annual Principal Amounts of the Series 2001 Bonds coming due
in any two or more consecutive years may be combined to form one or more maturities of Series
2001 Term Bonds scheduled to mature in the last of such years with the preceding annual Principal
Amounts for such years constituting mandatory Amortization Installments of Series 2001 Bonds to
be selected by lot and redeemed at a price of par plus accrued interest in accordance with the
Resolution.
Basis of Award
Proposals must be unconditional and only for all the Series 2001 Bonds. The purchase price
bid for the Series 2001 Bonds may include a discount (including underwriters' discount and original
issue discount) not to exceed two percent (2%) of the principal amount of the Series 2001 Bonds and
shall specify how much of the discount is original issue discount. The purchase price bid may also
include an original issue premium (including underwriter's discount and original issue premium) not
to exceed two percent (2%) of the principal amount of the Series 2001 Bonds and shall specify how
much of such purchase price is original issue premium. The Series 2001 Bonds will be insured by
* Preliminary, subject to change
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Financial Security Assurance Inc. and the City will pay the bond insurance premium from Bond
proceeds. The purchase price bid for the Series 2001 Bonds will not deduct the insurance premium.
Only the final bid submitted by any bidder through Parity will be considered. The City reserves the
right to determine the Successful Bidder for the Series 2001 Bonds, to reject any or all bids and to
waive any irregularity or informality in any bid.
The Series 2001 Bonds will be awarded to the bidder (herein referred to as the "Successful
Bidder" as to the Series 2001 Bonds) offering such interest rate or rates and purchase price which
will produce the lowest true interest cost to the City over the life of the Series 200 I Bonds. True
interest cost for the Series 200 I Bonds (expressed as an annual interest rate) will be that annual
interest rate being twice that factor of discount rate, compounded semiannually, which when applied
against each semiannual debt service payment (interest, or principal and interest, as due) for the
Series 200 I Bonds will equate the sum of such discounted semiannual payments to the bid price
(inclusive of accrued interest). Such semiannual debt service payments begin on December 1,2001.
The true interest cost shall be calculated from June 21, 2001, the expected closing date of the Series
2001 Bonds (the "Closing Date") and shall be based upon the principal amounts of each serial
maturity set forth in this Notice of Bond Sale and the bid price set forth in the Proposal for the Series
2001 Bonds submitted in accordance with the Notice of Bond Sale. In case of a tie, the City may
select the Successful Bidder by lot. It is requested that each Proposal for the Series 2001 Bonds be
accompanied by a computation of such true interest cost to the City under the term of the Proposal
for Bonds, but such computation is not to be considered as part of the Proposal for Bonds.
Interest Rates Permitted
The Series 2001 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-
twentieth (1/20) of one percent. No coupon interest rate specified for any maturity of the Series 2001
Bonds may be less than three percent (3%) or more than five and one-fourth percent (5.25%).
Should an interest rate be specified which results in annual interest payments not being equally
divisible between the semiannual payments in cents the first semiannual payment will be reduced
to the next lower cent and the second semiannual payment will be raised to the next higher cent.
It shall not be necessary that all Series 2001 Bonds bear the same rate of interest, provided
that all Series 2001 Bonds maturing on the same date shall bear the same rate of interest. A rate of
interest based upon the use of split or supplemental interest payments or a zero rate of interest will
not be considered.
Payine: Ae:ent and Registrar
The Paying Agent and Registrar for the Series 2001 Bonds is The Bank of New York
through its designated office in Jacksonville, Florida.
Securitv
Principal of and interest on the Series 2001 Bonds to be issued pursuant to Ordinance No.
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6352-99, as supplemented, and all required sinking fund, reserve and other payments shall be
payable solely from the Infrastructure Sales Tax Revenues of the City, together with the earnings
thereon derived from the investment thereof in the Funds and Accounts established in the Ordinance
and as more fully described in the Preliminary Official Statement.
The Series 2001 Bonds do not constitute a general indebtedness of the City within the
meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall
ever have the right to require or compel the exercise of the ad valorem taxing power of the City or
taxation of any real or personal property therein for the payment of the principal of and interest on
the Series 200 I Bonds or the making of any debt service fund, reserve or other payments provided
for in the Resolution.
Purpose
Pursuant to the Ordinance, the Series 2001 Bonds are being issued to pay a portion of the
costs of the Projects, the costs of issuing the Series 2001 Bonds and to purchase a municipal bond
insurance policy and a reserve fund surety policy for deposit to the subaccount of the Debt Service
Reserve Fund for the benefit of the Series 2001 Bonds.
Issuance of Series 2001 Bonds
The Series 2001 Bonds will be issued and sold by the City of Clearwater, Florida, a
municipal corporation organized and existing under the laws of the State of Florida. The Series 2001
Bonds are being issued pursuant to Ordinance No. 6352-99 enacted May 6, 1999, as supplemented
by resolutions (collectively, the "Bond Ordinance") by the City of Clearwater, Florida (the "City")
and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of
law.
Municipal Bond Insurance Policy
A commitment to issue a municipal bond insurance policy guaranteeing payment of principal
and interest on the Series 2001 Bonds and a debt service reserve fund insurance policy for the Series
2001 Bonds in satisfaction of the Reserve Requirement has been obtained from Financial Security
Assurance Inc.
Proposals
Proposals for the Series 200 I Bonds are desired on forms which will be furnished by
PARITY, on behalf of the City, and be submitted electronically via PARITY.
Each bidder for the Series 2001 Bonds must have arranged for a good faith deposit in the
amount of $464,500, in the form of a Financial Surety Bond from any insurance company licensed
to issue such a Surety Bond in the State of Florida and approved by the City (as ofthe date hereof
only Financial Security Assurance Corporation has been so approved) prior to the bid deadline. The
Successful Bidder's good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m.
on the next business day. If the Successful Bidder shall fail to comply promptly with the terms of
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its Proposal, the amount of such wire will be forfeited to said payee as liquidated damages. The
proceeds of the good faith deposit of the Successful Bidder will be applied to the payment of the
purchase price of the Series 2001 Bonds. Prior to the delivery of the Series 2001 Bonds, the City
may invest the proceeds from the good faith deposit. No interest will be paid to any bidder upon any
good faith deposit.
Delivery and Payment
It is anticipated that the Series 200 I Bonds in book entry only form will be available for
delivery on June 21, 2001, in New York, New York, at The Depository Trust Company, or some
other date and place to be mutually agreed upon by the Successful Bidder and the City against the
payment of the purchase price therefor including accrued interest calculated on a 360-day year basis,
less the amount of the good faith check, in immediately available Federal Reserve funds without cost
to the City.
Closing Documents
The City will furnish to the Successful Bidder upon delivery of the Series 2001 Bonds the
following closing documents in a form satisfactory to Bond Counsel: (1) signature and no-litigation
certificate; (2) federal tax certificate; (3) certificate regarding information in the Official Statement;
and (4) seller's receipt as to payment. A copy of the transcript of the proceedings authorizing the
Series 2001 Bonds will be delivered to the Successful Bidder ofthe Series 2001 Bonds upon request.
Copies of the form of such closing papers and certificates may be obtained from the City.
Information Statement
Section 218.38(1)(b)1, Florida Statutes requires that the City file, within 120 days after
delivery of the Series 2001 Bonds, an information statement with the Division of Bond Finance of
the State of Florida (the "Division") containing the following information: (a) the name and address
of the managing underwriter, ifany, connected with the Series 2001 Bonds; (b) the name and address
of any attorney or financial consultant who advised the City with respect to the Series 2001 Bonds;
and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter or
financial consultant to any person not regularly employed or engaged by such underwriter or
consultant and (d) any other fee paid by the City with respect to the Series 2001 Bonds, including
any fee paid to attorneys or fmancial consultants. The Successful Bidder will be required to deliver
to the City at or prior to the time of delivery of the Series 2001 Bonds, a statement signed by an
authorized officer containing the same information mentioned in (a) and (c) above. The Successful
Bidder shall also be required, at or prior to the delivery of the Series 2001 Bonds, to furnish the City
with such information concerning the initial prices at which a substantial amount of the Series 2001
Bonds of each maturity were sold to the public as the City shall reasonably request.
Pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, a truth-in-
bonding statement will be required from each bidder as to the Series 200 I Bonds as part of their bid
in the following form:
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"The City of Clearwater, Florida, is proposing to issue $50,000,000 original
aggregate principal amount of Infrastructure Sales Tax Revenue Bonds, Series 2001,
for the purpose of paying (i) a portion of the costs of the Projects, (ii) the costs of
issuing the Series 2001 Bonds, (iii) the premium on the Bond Insurance Policy, ifany
and (iv) the premium for the debt service reserve fund insurance or to make a deposit
to the Reserve Fund, all as further described in Ordinance No. 6352-99. The final
maturity date of the Series 2001 Bonds is December 1,2009, and the Series 2001
Bonds are expected to be repaid over a period of eight and one-half (8 1/2) years. At
a forecasted average interest rate of _ % per annum, total interest paid over the life
of the Series 200 I Bonds will be $ . The source of repayment or
security for this proposal is the City's Sales Tax Revenues (as defined in the
Ordinance) and moneys and investments held in the funds created under the said
Ordinance. Authorizing the Series 2001 Bonds will result in $ not
being available to fmance the other capital projects of the City. This truth-in-bonding
statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as
amended, is for informational purposes only and shall not affect or control the actual
terms and conditions of the Series 2001 Bonds."
Legal ODin ion
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The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant,
Miller and Olive, P.A., Tallahassee, Florida, to the effect that based on existing law, and assuming
compliance by the City with certain covenants and requirements of the Internal Revenue Code of
1986, as amended (the "Code"), regarding use, expenditures, investment of proceeds and the timely
payment of certain investment earnings to the United States Treasury, the interest on the Series 2001
Bonds is not includable in the gross income of individuals, however, interest on the Series 2001
Bonds will be included in the calculation of the alternative minimum tax liabilities of corporations.
The Code contains other provisions that could result in tax consequences, upon which Bond Counsel
renders no opinion, as a result of ownership of the Series 2001 Bonds or the inclusion in certain
computations (including, without limitation, those related to the corporate alternative minimum tax
and environmental tax) of interest that is excluded from gross income.
Official Statement
The Preliminary Official Statement, copies of which may be obtained as described below,
is in a form "deemed final" by the City for purposes ofSEC Rule 15c2-12(b)(I) (except for certain
permitted omissions as described in such rule) but is subject to revision, amendment and completion
in a final Official Statement. Upon the sale of the Series 2001 Bonds, the City will publish a final
Official Statement in substantially the same form as the Preliminary Official Statement. Copies of
the final Official Statement will be provided, at the City's expense, on a timely basis in such
quantities as may be necessary for the Successful Bidder's regulatory compliance.
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It is not the intention or the expectation of the City to print the name(s) of the Successful
Bidder as to the Series 2001 Bonds on the cover of the Official Statement.
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Continuing Disclosure
The City has covenanted to provide ongoing disclosure in accordance with Rule 15c2-12 of
the Securities and Exchange Commission. See "Appendix D -- Form of Continuing Disclosure
Certificate" attached to the Preliminary Official Statement.
CUSIP Number
It is anticipated that CUSIP identification numbers will be printed on the Series 2001 Bonds,
but neither the failure to print such number on any Series 2001 Bonds nor any error with respect
thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and
pay for the Series 2001 Bonds in accordance with its agreement to purchase the Series 200 I Bonds.
All expenses in relation to the printing of CUSIP numbers on the Series 200 I Bonds shall be paid
for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said
number shall be the responsibility of and shall be paid for by the Successful Bidder.
Copies of Documents
Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the
Official Bid Form and further information which may be desired, may be obtained from the City's
Financial Advisor, Banc of America Securities, LLC, 1640 Gulf-to-Bay Boulevard, Clearwater,
Florida 33755, Attn: David Thornton, telephone (727) 462-5804.
Amendment and Notices
Amendments hereto and notices, if any, pertaining to this offering shall be made through
Thompson Municipal Market Monitor (TM3) or similar information distribution service.
CITY OF CLEARWATER, FLORIDA
/s/ Brian J. Aungst
Mayor-Commissioner
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EXHIBIT B
FORM OF
SUMMARY NOTICE OF SALE
CITY OF CLEARWATER, FLORIDA
Infrastructure Sales Tax Revenue Bonds
Series 2001
NOTICE IS HEREBY GIVEN, that bids will be received by the Interim City Manager and
the Financial Services Administrator of the City of Clearwater, Florida, electronically through
PARITY, subject to the provisions of the Official Notice of Bond Sale.
Sale Date:
, 2001
Time:
11 :00 a.m., E.D.S.T.
Bonds Dated: June 1, 200 I
Maturities:
Payable December 1 in the years and amounts as follows:
. Series 2001 Bonds
Principal Principal Principal
Maturitv Amount * Maturity Amount* Maturitv Amount *
2002 $5,100,000 2005 $5,660,000 2008 $6,355,000
2003 5,270,000 2006 5,875,000 2009 6,620,000
2004 5,460,000 2007 6,105,000
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Interest
Payment Dates:
Payable June 1 and December 1, commencing December 1, 2001.
Legal Opinion:
Bryant, Miller and Olive, P.A.,
Tallahassee, Florida
For copies of the Official Notice of Bond Sale and the Preliminary Official Statement of the City
of Clearwater, Florida, please contact the City's Financial Advisor, Banc of America Securities,
LLC, 1640 Gulf-to-Bay Boulevard, Clearwater, Florida 33755, Attn: David Thornton, telephone
(727) 462-5804. The Proposed Form is to be provided by PARITY.
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EXHIBIT C
FORM OF PRELIMINARY OFFICIAL STATEMENT
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EXHIBIT D
CONTINUING DISCLOSURE CER TIFICA TE
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."> 0: .2 '" The Series 1001 Bonds are offered when, as and ifissued and accepted by the Underwriler subject to the approval of legality by Bryan~ MiUer and Olive, P.A., Tallahassee,
,~ .:;: t; ~ Florida, Bond CounseL Certain other legal matters wiu be passed upon for the City by Pamela K. Akin, Esquire, City Attorney, and by Nabors, Giblin & Nickerson, P.A., Tampa,
& ~ i:;;; ';:: FlorUla, Disclasure Counsel to the City. Banc of America Securities LLC, Clearwater, Flarida is serving as Financial Advisor to the City. It is expected that the Series 1001 Bonds,
'" '; ~ {j in definitive book-entry form, wiu be avai/abUlfor delivery through DTC in New York, New York on or about June 11,1001.
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.1!.11 ~.. Preliminary. subject to change.
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Preliminary Official Statement Dated May ,2001
NEW ISSUE - Book Entry Onlv
Ratings: Moody's:
S&P:
(FSA Insured)
In the opinion of Bond Counsel, assuming continuing compliance by the City with certain covenants to comply with provisions of the Internal Revenue Code of1986, as amended,
interest on the Series 1001 Bonds is excludedfrom gross incomefor purposes offederal income taxation and is not an item of tax preferencefor purposes ofthefederal alternative
minimum tax imposed on individuals and corporations under existing stlllutes, regulations andjudicial decisions; although it should be noted that in the case of corporations (as
defined/or federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes o/such alternative minimum tax. Furthermore,
in the opinion of Bond Counsel, the Series 1001 Bonds and the income therefrom are exemptfrom all present intangible personal property taxes imposed by Chapter 199, Florida
Statutes and documentary stamp taxes imposed by Chapter 101, Florida Statutes, as amended See "TAX EXEMPTION" herein for further information.
$46,445,000*
CITY OF CLEARWATER, FLORIDA
Infrastructure Sales Tax Revenue Bonds, Series 2001
Dated: June 1, 2001
Due: December 1, as shown below
The $46,445,000' Infrastructure Sales Tax Revenue Bonds. Series 200 I (the "Series 200 I Bonds") are being issued by the City of Clearwater, Florida (the "City"); as fully registered bonds,
without coupons, and when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities
depository for the Series 2001 Bonds. Individual purchases of the Series 2001 Bonds will be made in book-entry form only, in the denominations of$5,ooO each and integral multiples thereof.
Interest on the Series 200 I Bonds (first payment due December 1,2001 and semiannually thereafter on each June 1 and December I) will be payable by check or draft of The Bank of New York,
New York, New York, as Registrar and Paying Agent, made payable and mailed to the person in whose name the Series 200 1 Bond is registered, as shown on the registration books kept by the
Registrar at the close of business on the fifteenth day of the calendar month (whether or not a business day) next preceding the Interest Payment Date, Payments of principal of and interest on
the Series 200 I Bonds are to be made to purchasers by DTC through the Participants. Purchasers will not receive physical delivery of the Series 200 1 Bonds. Principal of the Series 2001 Bonds
is payable to the registered owner upon presentation and surrender of the Series 2001 Bonds at the corporate trust office of the Paying Agent. See "DESCRlPTION OF THE SERIES 2001
BONDS" herein. All capitalized terms used on this cover page not otherwise defined are defined herein or in the Resolution.
The Series 2001 Bonds are not subject to optional redemption prior to tbe1r stated maturities. See "DESCRIPTION OF THE SERIES 2001 BONDS" bereln.
The Series 200 I Bonds are being issued to (i) finance, or reimburse the City for expenditures incurred for. the acquisition, construction or reconslruction of certain capital improvements to
the City, including, but not limited to, a portion of the costs of COnstJUCling various capital improvements relating to road and bridge projects and a new main public library, as more particularly
described herein under the caption "THE SERIES 200 1 PROJECTS," (ii) purchase a Surety Bond to satisfy the Reserve Account Requirement with respect to the Bonds, and (iii) pay expenses
relative to the issuance and sale of the Series 2001 Bonds, including the prerniwn for municipal bond insurance,
The Series 2001 Bonds and the interest thereon are payable solely from and secured by a lien upon the pledge of (i) the City's share ofthe revenues derived by Pinellas County, Florida from
the levy and collection of a one-cent discretionary infrnslructure sales surtax pursuant to Section 212.055(2), Florida Statutes. as amended, and (ii) until applied in accordance with the provisions
of the Resolution, all moneys, including investments thereof, in certain funds and accounts created pursuant to the Ordinance, other than the Rebate Fund (collectively, the "Pledged Revenues").
See "SECURITY FOR THE SERIES 200 I BONDS" herein.
The Series 2001 Bonds and tbe Interest tbereon do not constitute a general indebtedness oftbe City or a pledge ofits faitb and eredlt, but are payable solely from tbe Pledged
Revenues in the manner provided In the Resolution. No bolder of any Series 2001 Bond sball ever bave tbe rigbt to compel tbe exercise of tbe ad valorem taxing power oftbe City
to pay such Series 2001 Bond, Interest tbereon or be entitled to payment of sucb Series 2001 Bond, tbe Interest tbereon from any moneys of tbe City except tbe Pledged Revenues.
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
FINANCIAL SECURITY ASSURANCE INC. For a discussion of the terms and provisions of such policy, including the limitations thereof, see "MUMCIP ALBOND INSURANCE" herein.
[LOGO]
MATURITY SCHEDULE
(See enclosed Notice of Sale)
(Accrued interest to be added)
[SCALCD] ELECTRONIC BIDS FOR THE SERIES 2001 BONDS WILL BE ACCEPTED
IN ACCORDANCE WITH THE OFFICIAL NOTICE OF SALE.
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CITY OF CLEARWATER, FLORIDA
ELECTED OFFICIALS
MAYOR - COMMISSIONER
Brian J. Aungst, Sr.
COMMISSIONERS
Ed Hart
Hoyt Hamilton
Whitney Gray
Bill Jonson
APPOINTED OFFICIALS
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William B. Horne, II, Interim City Manager
Pamela K. Akin, Esq., City Attorney
Margaret L. Simmons, CPA, Financial Services Administrator
BOND COUNSEL
Bryant, Miller and Olive, P.A.
Tallahassee, Florida
FINANCIAL ADVISOR
Banc of America Securities LLC
Clearwater, Florida
REGISTRAR AND PAYING AGENT
The Bank of New York
New York, New York
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No dealer, broker, salesman or other person has been authorized by the City to give any information
or to make any representations in connection with the Series 2001 Bonds other than as contained in
this Official Statement, and, if given or made, such 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 the solicitation of an offer to buy, nor shall there be any sale of the Series 2001 Bonds by any
person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or
sale. The information set forth herein has been obtained from the City, the Bond Insurer and other
sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and
is not to be construed as a representation by the City with respect to any information provided by
others. The information and expressions of opinion stated herein are subject to change without
notice, and neither the delivery of this Official Statement nor any sale made hereunder shall create,
under any circumstances, any implication that there has been no change in the matters described
herein since the date hereof.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR
EFFECT TRANSACTIONS THA T STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SERIES 2001 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
All summaries herein of documents and agreements are qualified in their entirety by reference to
such documents and agreements, and all summaries herein of the Series 2001 Bonds are qualified in
their entirety by reference to the form thereof included in the aforesaid documents and agreements.
NO REGISTRATION STATEMENT RELATING TO THE SERIES 2001 BONDS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")
OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY
AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
THE SERIES 200 I BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION
TO THE CONTRARY MAYBE A CRIMINAL OFFENSE.
[Remainder of page intentionally left blank]
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TABLE OF CONTENTS
Contents
Paee
INTRODUCTION .......................................................... 1
PURPOSE OF THE SERIES 2001 BONDS ....................................... 2
DESCRIPTION OF THE SERIES 2001 BONDS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
General ............................................................. 2
Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
No Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECURITY FOR THE SERIES 2001 BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pledged Revenues ..................................................... 5
Discretionary Sales Surtax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Sales Tax Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Additional Parity Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Covenants of the City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Flow of Funds ....................................................... 11
THE SERIES 2001 PROJECTS ............................................... 13
ESTIMATED SOURCES AND USES OF FUNDS ................................14
DEBT SERVICE SCHEDULE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
HISTORICAL AND PROJECTED
DEBT SERVICE COVERAGE.......................................... 16
MUNICIPAL BOND INSURANCE ............................................ 16
THE SURETY BOND ...................................................... 16
TAX EXEMPTION ...,.................................................... 17
Federal Income Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Tax Treatment of Original Issue Discount .................................. 19
Tax Treatment of Bond Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Florida Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AUDITED GENERAL PURPOSE FINANCIAL STATEMENTS ..................... 20
INVESTMENT POLICY .................................................... 20
LITIGATION ............................................................. 20
11
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RATINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 21
LEGAL OPINIONS ........................................................ 21
ENFORCEABILITY OF REMEDIES................................ ...........21
FINANCIAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS .............. 22
ADVISORS AND CONSULTANTS........................................... 23
CONTINUING DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CERTIFICATE CONCERNING OFFICIAL STATEMENT.......................... 23
VALIDATION ............................................................ 24
MISCELLANEOUS ........................................................ 24
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
General Information Relating to the City of Clearwater, Florida
Interlocal Agreement
The Ordinance
Audited General Purpose Financial Statements of Clearwater, Florida
for the Fiscal Year Ended September 30, 2000
Form of Bond Counsel Opinion
Form of Continuing Disclosure Certificate
Specimen Bond Insurance Policy and Reserve Fund Surety
APPENDIX E
APPENDIX F
APPENDIX G
ill
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OFFICIAL STATEMENT
relating to
$46,445,000.
CITY OF CLEARWATER, FLORIDA
Infrastructure Sales Tax Revenue Bonds,
Series 2001
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and the appendices
attached hereto, is to furnish information with respect to the issuance by the City of Clearwater,
Florida (the "City") of its $46,445,000* aggregate principal amount of its Infrastructure Sales Tax
Revenue Bonds, Series 200 1 (the" Series 2001 Bonds") pursuant to Ordinance No. 6352-99, adopted
by the City Commission on May 6,1998, as supplemented by Resolution No. 00-19, adopted by the
City Commission on June I, 2000, as amended by Ordinance No. 6802-01, adopted by the City
Commission on May 17, 2001, as supplemented by Resolution No. 01-16, adopted by the City
Commission on May 17, 2001 (the Ordinance, as so amended and supplemented is hereinafter
referred to as the "Ordinance").
The Series 2001 Bonds are limited obligations of the City payable solely from and secured by
a lien upon and a pledge of (i) the City's share of the proceeds derived by Pinellas County, Florida
from the levy and collection of the one-cent discretionary infrastructure sales surtax pursuant to
Section 212.055(2), Florida Statutes, as amended (the "Sales Tax Revenues"), and (ii) until applied
in accordance with the provisions of the Ordinance, all moneys, including investments thereof, in the
funds and accounts established by the Ordinance, other than the Rebate Fund (collectively, the
"Pledged Revenues").
The Series 2001 Bonds are not subject to redemption prior to their stated maturities.
Payment of the principal of and interest on the Series 2001 Bonds when due will be insured
by a municipal bond insurance policy to be issued by FINANCIAL SECURITY ASSURANCE INC.
(the "Bond Insurer") simultaneously with the delivery of the Series 2001 Bonds as described herein.
For a discussion of the terms and provisions of such policy, including the limitations thereof, see
"MUNICIPAL BOND INSURANCE" herein.
Capitalized terms used but not defined herein have the same meaning ascribed thereto in the
Ordinance unless the context would clearly indicate otherwise. Complete descriptions of the terms
and conditions of the Series 200 I Bonds are set forth in the Ordinance, a copy of which is attached
as Appendix C to this Official Statement. The description of the Series 2001 Bonds, the documents
authorizing and securing the same, and the information from various reports and statements contained
herein are not comprehensive or definitive. All references herein to such documents, reports and
statements are qualified by the entire, actual content of such documents. Reports and statements
· Preliminary, subject to change.
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referred to herein that are not included in their entirety in this Official Statement may be obtained
from the City.
PURPOSE OF THE SERIES 2001 BONDS
The Series 200 I Bonds are being issued to finance, or reimburse the City for expenditures
incurred for, the acquisition, construction or reconstruction of certain capital improvements to the
City, including, but not limited to, various capital improvements relating to road and bridge projects
and main public library improvements, as more particularly described herein under the caption "THE
SERIES 2001 PROJECT," (ii) purchase a Surety Bond to satisfy the Reserve Account in an amount
equal to the Reserve Account Requirement with respect to the Bonds, and (iii) pay expenses related
to the issuance and sale of the Series 2001 Bonds, including the premium for municipal bond
Insurance.
DESCRIPTION OF THE SERIES 2001 BONDS
General
The Series 2001 Bonds are being issued in fully registered form, without coupons, in the
denominations of$5,000 each or integral multiples thereof, will be dated and will bear interest at the
rates and mature on December 1 of the years and in the amounts as shown on the cover page of this
Official Statement. Interest on the Series 200 I Bonds will be payable on each June 1 and December
I, commencing December 1, 2001.
The Series 200 I Bonds will be initially issued in the form of a single fully registered Bond for
each maturity of the Series 200 I Bonds. Upon initial issuance, the ownership of each such Series
200 I Bonds will be registered in the registration books kept by the Bond Registrar, The Bank ofN ew
York, New York,. New York, in the name of Cede & Co., as nominee of The Depository Trust
Company, New York, New York ("DTC"). While held in book-entry form, all payments of
principal and interest on the Series 2001 Bonds will be made to DTC or the DTC Nominee as
the sole registered owner ofthe Series 2001 Bonds and payments to Beneficial Owners will be
the responsibility ofDTC arid the DTC Participants as described below. See "Book-Entry Only
System. "
With respect to Series 2001 Bonds registered in the name of Cede & Co., as nominee ofDTC,
neither the City, nor the Paying Agent will have any responsibility or obligation to any DTC
Participant or to any indirect DTC Participant. See "Book-Entry Only System" for the definition of
"DTC Participant." Without limiting the immediately preceding sentence, neither the City nor the
Bond Registrar and the Paying Agent will have any responsibility or obligation with respect to: (i)
the accuracy of the records of DTC or any DTC Participant with respect to any ownership interest
in the Series 200 I Bonds; (ii) the delivery to any DTC Participant or any other person other than a
registered owner, as shown in the registration books kept by the Bond Registrar, of any notice with
respect to the Series 200 I Bonds, including any notice of redemption; or (iii) the payment to any
DTC Participant or any other person, other than a registered owner, as shown in the registration
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books kept by the Bond Registrar, of any amount with respect to principal of or interest on the Series
200 I Bonds. The City, the Bond Registrar and the Paying Agent may treat and consider the person
in whose name each Series 2001 Bonds is registered in the registration books kept by the Bond
Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal of
and interest with respect to such Bond, for the purpose of giving notices of redemption and other
matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond,
and for all other purposes whatsoever. The Paying Agent will pay all principal of and interest on the
Series 2001 Bonds only to or upon the order of the respective registered owners, as shown in the
registration books kept by the Bond Registrar, or their respective attorneys duly authorized in
writing, as provided in the Ordinance, and all such payments will be valid and effectual to satisfy and
discharge the City's obligations with respect to payment of principal of and interest on the Series 2001
Bonds to the extent of the sums so paid. No person other than a registered owner, as shown in the
registration books kept by the Bond Registrar, will receive a certificated Bond evidencing the
obligation of the City to make payments of principal of and interest on the Series 2001 Bonds
pursuant to the provisions of the Ordinance.
Book-Entry Only System
The Series 2001 Bonds will be available in book-entry form only, in denominations of$5,000
or any integral multiple thereof. Purchasers of the Series 2001 Bonds will not receive certificates
representing their interests in the Series 200 I Bonds purchased. The Underwriter is to confirm
original issuance purchases with statements containing certain terms of the Series 200 I Bonds
purchased.
The following information regarding The Depository Trust Company, New York, New York
("DTC") and the book-entry only system of registration has been obtained by the City from DTC.
No representation is made by the City as to its accuracy or correctness.
The Series 2001 Bonds will be held by DTC as securities depository. The ownership of one
fully registered Series 200 I Bonds for each maturity, as set forth on the cover page hereof, will be
registered in the name of Cede & Co., as nominee for DTC. DTC 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 17 A ofthe Securities Exchange Act of 1934, as amended. DTC
was created to hold securities of its participants ("DTC Participants") and to facilitate the settlement
of securities transactions among DTC Participants in such securities through electronic computerized
book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations, some of which own DTC
either directly or through their representatives. Access to the DTC system is also available to other
entities such as security brokers and dealers, banks and trust companies that clear through or maintain
a custodial relationship with a DTC Participant.
Purchases of the Series 2001 Bonds may be made by or through brokers and dealers who are,
or act through, DTC Participants. Such DTC Participants and the persons for whom they acquire
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interests in the Series 200 I Bonds as nominees will not receive certificated bonds, but each DTC
Participant will receive a credit balance in the records of DTC in the amount of such DTC
Participant's interest in the Series 2001 Bonds, which will be confirmed in accordance with DTC's
standard procedures. The ownership interest of the actual purchaser of each Bond (the "Beneficial
Owner") will be recorded in the records of the DTC Participant. DTC Participants are required to
provide Beneficial Owners with a written confirmation of their purchase containing details of the
acquired Series 200 I Bonds. Transfers of ownership interests in the Series 2001 Bonds will be
accomplished by book entry made by DTC and by the DTC Participants who act on behalf of the
Beneficial Owners.
The Paying Agent will make payments of principal of and interest on the Series 200 I Bonds
to DTC or its nominee, Cede & Co., as registered owner of the Series 2001 Bonds. The current
practice of DTC is to credit the accounts of the DTC Participants immediately upon receipt of
moneys in accordance with their respective holdings as shown on the records of DTC. Payments by
DTC Participants to Beneficial Owners will be in accordance with standing instructions and
customary practices such as those which are now in effect for municipal securities held by DTC
Participants in bearer form or registered in "street name" for the accounts of customers, and will be
the responsibility ofDTC Participants and not the responsibility ofDTC, the Paying Agent or the City
subject to any statutory or regulatory requirements as may be in effect from time to time.
The Bond Registrar, the Paying Agent and the City will send any notice of redemption or
other notice only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC
Participant to notify the Beneficial Owner, of any such notice and its content or effect will not affect
the validity of the redemption of the Series 2001 Bonds called for redemption or of any other action
premised on such notice. Redemption of portions of any maturity of the Series 2001 Bonds will
reduce the outstanding principal amount of such maturity held by DTC. In such event, DTC may
implement, through its book-entry system, a redemption of Series 2001 Bonds held for the account
ofDTC Participants in accordance with its own rules or other agreements with DTC Participants, and
then DTC Participants may implement a redemption of Series 200 I Bonds for the Beneficial Owners.
NEITHER THE CITY NOR THE BOND REGISTRAR OR THE PAYING AGENT
WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS OR
THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH
RESPECT TO THE SERIES 2001 BONDS OR THE PROVIDING OF NOTICE OR
PAYMENT TO DTC PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION
OF SERIES 2001 BONDS FOR REDEMPTION.
In the event of an insolvency of DTC, if DTC has insufficient securities in the fungible bulk
of securities in its custody (e.g., due to theft or loss) to satisfy the claims ofDTC Participants with
respect to deposited securities and is unable by application of (i) cash deposits and securities pledged
to DTC to protect DTC against losses and liabilities; (ii) the proceeds of insurance maintained by
DTC and/or DTC Participants; or (iii) other resources, to obtain securities necessary to eliminate the
insufficiency, DTC Participants may not be able to obtain all of their deposited securities.
The City, the Bond Registrar and the Paying Agent cannot give any assurances that DTC,
DTC Participants or others will distribute payments of principal of and interest on the Series 2001
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Bonds paid to DTC or its nominee, or any redemption or other notices to the Beneficial Owners or
that they will do so on a timely basis or that DTC will serve or act in a manner described in this
Official Statement.
DTC may determine to discontinue providing its services with respect to the Series 2001
Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto
under applicable law. In addition, the City may determine to discontinue the use of book-entry
transfers through DTC (or any successor securities depository). Under such circumstances, the City
and the Bond Registrar will authenticate and deliver certificated Series 2001 Bonds.
In the event that the book-entry only system is discontinued, the following provisions will
govern the transfer and exchange of Series 2001 Bonds. The Series 2001 Bonds will be exchanged
for an equal aggregate principal amount of corresponding bonds in other authorized denominations
and of the same series and maturity, upon surrender thereof at the principal corporate trust office of
the Bond Registrar. The transfer of any Series 200 I Bonds will be registered on the books
maintained by the Bond Registrar for such purpose only upon the surrender thereof to the Bond
Registrar with a duly executed written instrument of transfer in form and with guaranty of signatures
satisfactory to the Bond Registrar, containing written instructions as to the details of transfer of such
Series 2001 Bonds, along with the social security number or federal employer identification number
of such transferee. The City and the Bond Registrar may charge the registered owners a sum
sufficient to reimburse them for any expenses incurred in making any exchange or transfer after the
first such exchange or transfer following the delivery of the Series 200 I Bonds. The Bond Registrar
or the City may also require payment from the registered owners or their transferees, as the case may
be, of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in
relation thereto. Such charges and expenses shall be paid before any such new Series 2001 Bonds
shall be delivered. Neither the City nor the Bond Registrar shall be required to register the transfer
or exchange of any Series 2001 Bonds during the period commencing on the fifteenth day (whether
or not a business day) of the month next preceding an interest payment date and ending on such
interest payment date or, in the case of any proposed redemption of a Series 200 I Bonds, after such
Series 200 I Bonds or any portion thereof has been selected for redemption.
No Optional Redemption
The Series 200 I Bonds are not subject to optional redemption prior to their stated maturities.
SECURITY FOR THE SERIES 2001 BONDS
Pledged Revenues
The Series 2001 Bonds are limited obligations of the City payable solely from and secured by
a lien upon and a pledge of (i) the City's share of the proceeds derived by Pinellas County, Florida
from the levy and collection of the one-cent discretionary infrastructure sales surtax pursuant to
Section 212.055(2), Florida Statutes, as amended (the "Sales Tax Revenues"), and (ii) until applied
in accordance with the provisions of the Ordinance, all moneys, including investments thereof, in the
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funds and accounts established by the Ordinance, other than the Rebate Fund (collectively, the
"Pledged Revenues").
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The Series 2001 Bonds and the interest thereon do not constitute a general indebtedness
of the City or a pledge of its faith and credit, but are payable solely from the Pledged Revenues
in the manner provided in the Ordinance. No Holder of any ofthe Series 2001 Bonds shall ever
have the right to compel the exercise of the ad valorem taxing power of the City to pay the
Series 2001 Bonds or interest thereon or be entitled to payment of the Series 2001 Bonds or
interest thereon from any moneys of the City except the Pledged Revenues.
Discretionary Sales Surtax
Chapter 212, Part I, Florida Statutes, as amended, imposes a 6% sales tax on the sales price
of tangible personal property sold at retail in the State of Florida (the "State") subject to certain
exemptions therefrom. A similar tax is imposed on the cost price of tangible personal property when
the property is not sold, but is used or stocked for use in the State. The largest single source of tax
receipts in the State is the sales and use tax.
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Section 212.055(2), Florida Statutes, as amended, authorizes local governments to impose
a discretionary sales surtax of an additional 0.5% or 1% to finance, plan and construct
"infrastructure" projects, among other purposes. However, local governments may not impose the
surtax on long-distance telephone service or on the portion of any sales amount which exceeds $5,000
on any item of tangible personal property. The levy of the surtax must be pursuant to an ordinance
of the county's governing board and must be approved by a referendum of the electors ofthe county.
Distribution of the surtax proceeds may be governed by an interlocal agreement by and among the
county and the municipalities within such county.
The Florida Department of Revenue ("FDOR") has the responsibility to administer, collect,
and enforce all such surtaxes. The proceeds of each county's discretionary sales surtax collections
are transferred to the Discretionary Sales Surtax Trust Fund. A separate account in the trust fund
is established for each county imposing such a surtax. FDOR is authorized to deduct 3% of the total
revenue generated for all counties levying a surtax for administrative costs. The amount deducted
for administrative costs is required to be used only for those costs solely and directly attributable to
the surtax. The total administrative costs are prorated among those counties levying the surtax on
the basis of the amount collected for a particular county to the total amount collected for all counties.
However, FDOR is currently not deducting any amount of revenue for administering these taxes, even
though the authorization currently exists to do so. FDOR is required to submit annually, no later than
March 1 st, a report detailing the expenses and amounts deducted for administrative costs to the
President ofthe State Senate, the Speaker of the State House of Representatives, and the governing
board of each county levying the surtax.
Pursuant to Section 212.15, Florida Statutes, as amended, vendors are required to remit sales
tax receipts (including proceeds of any discretionary sales surtax) by the twentieth (20th) day of the
month immediately following the month of collection. No statute prescribes a deadline for remitting
surtax proceeds from FDOR to the local governing bodies. However, according to the accounting
division ofFDOR, FDOR consistently remits the surtax proceeds to such local governing bodies by
the end of the month immediately following receipt by FDOR. According to the County, Sales Tax
. Revenues will in turn be distributed within sixty (60) days of such receipt.
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Pursuant to Section 212.055(2)(d), Florida Statutes, as amended, the proceeds of any
discretionary sales surtax and any interest accrued thereto may be expended to finance, plan and
construct infrastructure. Neither the proceeds nor any interest accrued thereto may be used for
operational expenses of any infrastructure. "Infrastructure" means, among other things, any fixed
capital expenditure or fixed capital outlay associated with the construction, reconstruction or
improvement of public facilities which have a life expectancy of 5 or more years and any land
acquisition, land improvement, design, and engineering costs related thereto.
Pursuant to Section 212.055(2)( e), Florida Statutes, as amended, counties and municipalities
receiving discretionary sales surtax proceeds may pledge such proceeds for the purpose of servicing
new bond indebtedness incurred pursuant to law. Pursuant to Section 212.055(2)(f), Florida
Statutes, as amended, the surtax proceeds may not be used to supplement or replace user fees or to
reduce ad valorem taxes existing prior to the levy of the surtax.
Sales Tax Revenues
Pursuant to Ordinance No. 89-42 and pursuant to an affirmative vote of the electors of the
County held on November 7, 1989, the County imposed a one cent discretionary sales surtax (the
"Surtax") for an original period of 10 years beginning February 1, 1990. Pursuant to Ordinance No.
97-11 and pursuant to an affirmative vote of the electors of the County held on March 25, 1997, the
County extended the Surtax for an additional period of 10 years, from February 1, 2000 until January
31, 20 I O. That portion of the Surtax which is distributed to the City (the "Sales Tax Revenues") is
pledged to the payment of the Series 2001 Bonds. In the Ordinance, the City has irrevocably pledged
the Sales Tax Revenues to the payment of debt service on the Series 2001 Bonds.
. The following table shows the amount of Surtax which was distributed to the City pursuant
to the Existing Interlocal Agreement (hereinafter defined):
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CITY OF CLEARWATER, FLORIDA
SALES TAX REVENUES
Fiscal
Year (1)
1991(3)
1992
1993
1994
1995
1996
1997
1998
1999
2000
Sales Tax
Revenues (2)
% Increase
$4,753,155
4,856,974
4,819,726
5,606,498
6,008,416
6,418,326
6,758,271
7,427,293
7,807,430
8 285 884
2%
-1%
16%
7%
7%
5%
10%
5%
6%
(I) The City's fiscal year begins on October 1 st and ends on the next succeeding September 30th.
Figures representing Sales Tax Revenues are audited figures.
(2) Commencing February 1,2000, equal to 7.8950% of the net proceeds of the Surtax. Prior
to February 1,2000, the percentage was 8.08478%.
(3) Sales Tax Revenues accrued for only nine of the twelve months during fiscal year 1990.
The County, the City and all of the other municipalities located within the County entered into
an Interlocal Agreement, dated August 6, 1998 (the "Interlocal Agreement"), which provides that
from February I, 2000 until January 31, 2010, the net proceeds of the Surtax will be dis~ributed
monthly to the County for distribution in accordance with the terms of the Interlocal Agreement, and
will be distributed between the County and the municipalities within the County within a reasonable
time after receipt, as follows:
(I) Criminal justice and related facilities will be funded, on a priority basis, in the total
amount of Eighty Million Dollars ($80,000,000) pro-rata over the ten (1 O)-year term
ofthe Interlocal Agreement. Before the County distributes the net proceeds received
by it for any month, it will apply to the funding of criminal justice and related facilities
so much of such net proceeds as shall equal the lesser of (i) the net proceeds received
by the County for such month, or (ii) an amount which, when added to all net
proceeds so applied previously, will result in an average monthly funding of
$666,666.67 for such month and all prior months for which the County has received
net proceeds.
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(2)
The remainder of the net proceeds of the Surtax will be distributed based on the
following percentages:
Pinellas County
Belleair
Belleair Beach
Belleair Bluffs
Belleair Shore
Clearwater
Dunedin
Gulfport
Indian Rocks Beach
Indian Shores
Kenneth City
Largo
Madeira Beach
52.7320% North Redington Beach
0.3164% Oldsmar
0.1653% Pinellas Park
0.1737% Redington Beach
0.0047% Redington Shores
7.8950% Safety Harbor
2.7354% St. Pete Beach
0.9275% St. Petersburg
0.3209% Seminole
0.1145% South Pasadena
0.3416% Tarpon Springs
5.2476% Treasure Island
0.3330%
0.0895%
0.6835%
3.4616%
0.1275%
0.1892%
1.2442%
0.7370%
18.9049%
0.7406%
0.4594%
1.4784%
0.5766%
Modification of Interlocal Agreement. The Interlocal Agreement may not be amended
without the consent of all of the parties thereto. The City has covenanted with the Holders pursuant
to the Ordinance not to amend the Interlocal Agreement in a manner which would adversely affect
the percentage of Surtax which the City receives.
Reserve Fund
The Ordinance provides for the Reserve Fund for the Bonds to be funded in an amount equal
to the Reserve Requirement, which is defined to mean the lesser of: (i) the Maximum Bond Service
Requirement; (ii) 125% of the Average Bond Service Requirement, or (iii) the largest amount as shall
not adversely affect the exclusion of interest on the Series 2001 Bonds from gross income for federal
income tax purposes.
As permitted by the Ordinance, in lieu of a cash deposit into the Reserve Fund, upon the
issuance of the Series 2001 Bonds, the City will cause to be deposited into the Reserve Fund a surety
bond of Financial Security Assurance Inc. (the "Surety Bond") for the benefit of the Holders. The
Surety Bond will be payable to the Paying Agent on any Interest Payment Date on which a deficiency
exists which cannot be cured by funds available in the Debt Service Fund and/or the Reserve Fund.
Following a draw upon the Surety Bond, principal and interest on the Surety Bond will be paid from
the first available Pledged Revenues, and then after all such amounts are paid in full, the next available
Pledged Revenues will be used to fund the Reserve Fund to the required level after taking into
account the amounts available under the Surety Bond. See "SURETY BOND" herein for more
information relating to the Surety Bond.
Amounts on deposit in the Reserve Fund will be used only for payment of principal of and
interest on the Bonds when other moneys in the Debt Service Fund are insufficient therefor. Any
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withdrawals from the Reserve Fund will be restored from the fIrst moneys available in the Revenue
Fund after all required payments to the Debt Service Fund (including all defIciencies in prior required
payments therefrom) have been made in full.
Additional Parity Obligations
The City may issue one or more Series of Parity Obligations ("Additional Parity Obligations")
for anyone or more of the following purposes: financing the Cost of an Additional Project, or the
completion thereof or of the Initial Project, or refunding any or all Outstanding Bonds or of any
Subordinated Indebtedness of the City.
No such Additional Parity Obligations shall be issued unless the following conditions are
complied with:
(1) There shall have been obtained and fIled with the Clerk a certifIcate of the
Finance Director stating: (a) that the books and records of the City relative to the Pledged Revenues
have been reviewed; (b) setting forth the amount of the adjusted Pledged Revenues derived for any
consecutive twelve (12) months out of the preceding twenty-four (24) months preceding the date of
issuance of the proposed Additional Parity Obligations adjusted as herein below provided; (c) that
the aggregate amount of such Pledged Revenues, as adjusted pursuant to paragraph 2 below, is equal
to not less than 125% of the Maximum Bond Service Requirement becoming due in any Bond Year
thereafter on (i) all obligations issued under the Ordinance, if any, then Outstanding, and (ii) on the
Additional Parity Obligations with respect to which such certifIcate is made.
(2) Upon recommendations of the Finance Director, if there is an estimated
increase in Infrastructure Sales Tax revenues to be received by the City as a result of projected
increase in collection or an amendment to the Interlocal Agreements, then the Infrastructure Sales
T as revenues certifIed pursuant to paragraph I (b) above shall be increased by fifty percent (50%) of
the average annual additional [luf~d5t1I1('~ ulc'] Infrastructure Sales Tax revenues calculated for such
twelve month period.
(3) Additional Parity Obligations shall be deemed to have been issued pursuant
to the Ordinance the same as the Outstanding Bonds, and all of the other covenants and other
provisions of this Resolution (except as to details of such Additional Parity Obligations inconsistent
therewith) shall be for the equal benefit, protection and security of the Holder of all Bonds issued
pursuant to the Ordinance. Except as otherwise provided in the Ordinance, all Bonds, regardless of
the time or times oftheir issuance, shall rank equally with respect to their lien on the Pledged Funds
and their sources and security for payment therefrom without preference of any Bonds over any other.
(4) In the event that the total amount of the initial Series of Bonds issued under
the Ordinance are not issued simultaneously, such Series Bonds which are subsequently issued shall
be subject to the conditions set forth above.
(5) The City need not comply with the provisions of paragraph 1 above if and to
the extent the Bonds to be issued are refunding bonds, and if the City shall cause to be delivered a
certifIcate of the Finance Director setting forth the annual debt service (i) for the Bonds then
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Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that
annual debt service in any particular year pursuant to (ii) above is not greater than annual debt service
in the corresponding year set forth pursuant to (i) above.
(6) The City shall not be in default in the carrying out of any of the obligations
assumed under this Ordinance and no event of default shall have occurred under this Ordinance and
shall be continuing, and all payments required by this Ordinance to be made into the funds and
accounts established hereunder shall have been made to the full extent required.
(7) The resolution authorizing the issuance of the Additional Parity Obligations
shall recite that all of the covenants contained herein will be applicable to such Additional Parity
Obligations.
Covenants of the City
The City covenants in the Ordinance to do all things necessary on its part to continue the levy
and collection of the Sales Tax Revenues at the maximum rate permitted by and in compliance with
Chapter 166, Part II, Florida Statutes, as amended, Chapter 212, Part I, Florida Statutes, as amended,
and other applicable provisions oflaw (the "Act"), and any successor provision of the law. The City
will proceed diligently to perform legally and effectively all steps required on its part in the levy and
collection of the Sales Tax Revenues and shall exercise all legally available remedies to enforce such
collections now or hereafter available under State law.
Flow of Funds
Pursuant to the Ordinance, the City shall deposit the Sales Tax Revenues into the Revenue
Fund promptly upon receipt thereof. The moneys in the Revenue Fund will be deposited or credited
on or before the 25th day of each month in the following manner and in the following order of
priority:
(1) The City shall fIrst deposit into the Bond Service Fund and credit to the
following accounts, in the following order (except that payments in the Principal Account and the
Redemption Account shall be on a parity with each other), the following identifIed sums:
(a) Interest Account: Such sum as will be suffIcient to pay one-sixth
(1/6th) of all interest coming due on all Outstanding Bonds on the next interest payment date,
together with any fees and charges of the Paying Agent and Registrar therefor; provided,
however, that monthly deposits of interest, or portions thereof, shall not be required to be
made to the extent that money on deposit within such Interest Account is suffIcient for such
purpose. In the event the City has issued Variable Rate Bonds pursuant to the provisions of
the Ordinance, Net Revenues shall be deposited at such other or additional times and amounts
as necessary to pay any interest coming due on such Variable Rate Bonds on the next interest
payment date, all in the manner provided in a supplemental resolution of the City. Any
monthly payment out of Net Revenues to be deposited as set forth above, for the purpose of
meeting interest payments for any Series of Bonds, shall be adjusted, as appropriate, to reflect
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the frequency of interest payment dates applicable to such Series. Moneys in the Interest
Account may be used only for the purposes described in this paragraph (a).
(b) Principal Account: Such sum as will be sufficient to pay one-twelfth
(1I12th) ofthe principal amount ofthe Outstanding Bonds which will mature and become due
on such annual maturity dates beginning the month which is twelve (12) months prior to the
first principal maturity date; provided, however, that monthly deposits for principal, or
portions thereof, shall not be required to be made to the extent that money on deposit within
such Principal Account is sufficient for such purpose. Any monthly payment out of Net
Revenues to be deposited as set forth above, for the purpose of meeting principal payments
for any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of principal
payment dates applicable to such Series. Moneys in the Principal Account may be used only
for the purposes described in this paragraph (b).
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(c) Redemption Account: Such sum as will be sufficient to pay
one-twelfth (l/12th) of any Amortization Installment established for the mandatory
redemption of Outstanding Bonds on such annual maturity date beginning the month which
is twelve (12) months prior to the first Amortization Installment date; provided, however, that
monthly deposits into the Redemption Account, or portions thereof, shall not be required to
be made to the extent that money on deposit in the Redemption Account is sufficient for such
purpose. Any monthly payment out of Net Revenues to be deposited as set forth above, for
the purpose of meeting Amortization Installments for any Series of Bonds, shall be adjusted,
as appropriate, to reflect the frequency of dates established for Amortization Installments
applicable to such Series. The moneys in the Redemption Account shall be used solely for
the purchase or redemption of the Term Bonds payable therefrom. The City may at any time
purchase any of said Term Bonds at prices not greater than the then redemption price of said
Term Bonds. If the Term Bonds are not then redeemable prior to maturity, the City may pur-
chase said Term Bonds at prices not greater than the redemption price of such Term Bonds
on the next ensuing redemption date. If Term Bonds are so purchased by the City, the City
shall credit the account of such purchased Term Bonds against any current Amortization
Installment to be paid by the City. If the City shall purchase or call for redemption in any year
Term Bonds in excess of the Amortization Installment requirement for such year, such excess
of Term Bonds so purchased or redeemed shall be credited in such manner and at such times
as the City shall determine. Moneys in the Redemption Account in the Debt Service Fund
may be used only for the purposes described in this paragraph (c).
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(2) The City shall next deposit from moneys remaining in the Revenue Fund an
amount required by the resolution of the City authorizing each Series of Bonds into the Reserve Fund.
Any withdrawals from the Reserve Fund shall be subsequently restored from the first moneys
available in the Revenue Fund, after all required current applications and allocations to the Bond
Service Fund, including all deficiencies for prior payments have been made in full. Notwithstanding
the foregoing, in case of withdrawal from the Reserve Fund, in no event shall the City be required to
deposit into the Reserve Fund an amount greater than that amount necessary to ensure that the
difference between the Reserve Requirement and the amounts on deposit in the Reserve Fund on the
date of calculation shall be restored not later than sixty (60) months after the date of such deficiency
(assuming equal monthly payments into the Reserve Fund for such sixty (60) month period). The
City may provide that the difference between the amounts on deposit in the Reserve Fund and the
Reserve Requirement shall be an amount covered by obtaining bond insurance issued by a reputable
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and recognized municipal bond insurer, by a letter of credit rated in one of the two highest categories
by one of two nationally recognized rating agencies, by a surety bond acceptable to any company
issuing a policy of municipal bond insurance guaranteeing the payment of principal and interest on
such Series of Bonds, or any combination thereof. Moneys in the Reserve Fund shall be used only
for the purpose of the payment of Amortization Installments, principal of, or interest on the
Outstanding Bonds when the other moneys allocated to the Bond Service Fund are insufficient
therefor, and for no other purpose.
Securities in the Reserve Fund shall be valued annually at market rate. Deficiencies
in the amounts on deposit in the Reserve Fund resulting from a decline in market value shall be
restored no later than the succeeding interest payment date. In the event of the refunding of any
Series of Bonds, the City may withdraw from the Reserve Fund, all or any portion of the amounts
accumulated therein with respect to the Bonds being refunded and deposit such amounts as required
by the resolution authorizing the refunding of such Series of Bonds; provided that such withdrawal
shall not be made unless ( a) immediately thereafter the Bonds being refunded shall be deemed to have
been paid pursuant to the provisions hereof and (b) the amount remaining in the Reserve Fund after
giving effect to the issuance of such refunding obligations and the disposition of the proceeds thereof
shall not be less than the Reserve Requirement for any Bonds then Outstanding.
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(3) From the moneys remaining in the Revenue Fund, the City shall next deposit
into the Subordinated Debt Service Fund, if any, an amount required to be paid as provided in the
resolution of the City authorizing such Subordinated Indebtedness for principal, interest, mandatory
redemption payments, if any, and debt service reserve payments, if any, on Subordinated
Indebtedness, but for no other purposes.
(4) The balance of any moneys remaining in the Revenue Fund after the above
required payments have been made may be used for any lawful purpose; provided, however, that none
of said money shall be used for any purposes other than those described above unless all current
payments, including any deficiencies for prior payments, have been made in full and unless the City
shall have complied fully with all the covenants and provisions of the Ordinance.
THE SERIES 2001 PROJECTS
The Series 2001 Bond net proceeds will be used to finance the design, acquisition,
construction or reconstruction of certain capital improvements to the City, including but not limited
to: (i) acquisition by the City on behalf of, or acquisition directly by the State of Florida Department
of Transportation of right of ways and other related interests in land, and the planning, construction
and demolition associated with the resiting and rebuilding of the Memorial Causeway Bridge (the
"Memorial Causeway Bridge Improvements"); (ii) reimbursement of the costs of certain capital
improvements known as the "Gateway to the Beach" project, consisting of realigning of the roads
to the entrance to Clearwater Beach and replacement of the intersections with a round-about and
fountain (the "Clearwater Beach Entryway"); and (iii) payment of a portion of the costs of
constructing a new main public library (the "Main Library Project").
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Proiect DescriDtion
Estimated Cost
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Memorial Causeway Bridge Improvements
Clearwater Beach Entryway
Main Library Project
$22,330,000.00
10,000,000.00
13.250.000.00
Total
$45,580,000.00
Although the City presently intends to expend net proceeds of the Series 2001 Bonds as listed
above, the City is not required to do so as long as net proceeds are expended to design, acquire,
construct or reconstruct capital improvements of the City pursuant to the terms of the Ordinance and
the Act.
ESTIMATED SOURCES AND USES OF FUNDS
Sources of Funds:
Principal Amount of Series 2001 Bonds
Accrued Interest
Less: Original Issue Discount
Total Sources
Uses of Funds:
Deposit to Construction Fund
Deposit to Interest Account
Costs of Issuance (I)
Total Uses
(1) Includes underwriting discount, premiums for municipal bond insurance and the Surety Bond
and other expenses relating to the issuance of the Series 2001 Bonds.
[Remainder of page intentionally left blank]
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DEBT SERVICE SCHEDULE
Total
Date Princinal Interest Debt Service
2002
2003
2004
2005
2006
2007
2008
2009
2010
(1) Inclusive of accrued interest on the Series 200 I Bonds.
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. HISTORICAL AND PROJECTED
DEBT SERVICE COVERAGE
Fiscal Years Ending September 30,
Historical
1996 1997 1998 1999 2000
( audited) (audited) (audited) (audited) ( audited)
Sales Tax Revenues $6,418,326 $6,758,271 $7,427,293 $7,807,430 $8,285,884
Annual Debt Service 6,901,662 6,901,662 6,901,662 6,901,662 6,901,662
Debt Service Coverage .93 .979 1.076 1.131 1.201
Proiected
2001 2002 2003 2004 2005
Estimated Sales Tax Revenue $8,598,000 $9,059,000 $9,544,000 $10,053,000 $10,587,000
Estimated Annual Debt Service 6,901,662 6,901,662 6,901,662 6,901,662 6,901,662
Estimated Debt Service Coverage 1.246 1.313 1.383 1.457 1.534
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MUNICIPAL BOND INSURANCE
Concurrently with the issuance of the Bonds, Financial Security Assurance Inc. ("Financial
Security") 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 "APPENDIX G."
The Policy is not covered by any insurance security or guaranty fund established under New
York, California, Connecticut or Florida insurance law.
Financial Security Assurance Inc.
Financial Security is a New York domiciled insurance company and a wholly owned
subsidiary of Financial Security Assurance Holdings Ltd. ("Holdings"). Holdings is an indirect
subsidiary of Dexia, S.A., a publicly held Belgian corporation. Dexia, S.A., through its bank
subsidiaries, is primarily engaged in the business of public [mance in France, Belgium and other
European countries. No shareholder of Holdings or Financial Security is liable for the obligations of
Financial Security.
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At December 31, 2000, Financial Security's total policyholders' surplus and contingency
reserves were approximately $1,436,681,000 and its total unearned premium reserve was
approximately $707,587,000 in accordance with statutory accounting principles. At December 31,
2000, Financial Security's total shareholder's equity was approximately $1,488,866,000 and its total
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net unearned premium reserve was approximately $582,709,000 in accordance with generally
accepted accounting principles.
The [mancial statements included as exhibits to the annual and quarterly reports filed by
Holdings with the Securities and Exchange Commission are hereby incorporated herein by reference.
Also incorporated herein by reference are any such financial statements so filed from the date of this
Official Statement until the termination of the offering of the Bonds. Copies of materials incorporated
by reference will be provided upon request to Financial Security Assurance Inc.: 350 Park Avenue,
New York, New Yark 10022, Attention: Communications Department (telephone (212) 826-0100).
The Policy does not protect investors against changes in market value of the Bonds, which
market value may be impaired as a result of changes in prevailing interest rates, changes in applicable
ratings or other causes. Financial Security makes no representation regarding the Bonds or the
advisability of investing in the Bonds. Financial Security makes no representation regarding the
Official Statement, nor has it participated in the preparation thereof, except that Financial Security
has provided to the Issuer the information presented under this caption for inclusion in the Official
Statement.
THE SURETY BOND
The Ordinance requires the establishment of the Reserve Fund in an amount equal to the
Reserve Requirement. The Ordinance authorizes the City to obtain a surety bond in place of fully
funding the Reserve Fund. Accordingly, application has been made to Financial Security Assurance
Inc. (the "Surety Provider") for the issuance of the Surety Bond for the purpose of funding a portion
of the Reserve Fund. The Series 2001 Bonds will only be delivered upon the issuance of the Surety
Bond. The premium on the Surety Bond is to be fully paid at or prior to the issuance and delivery
of the Series 200 I Bonds. The Surety Bond provides that upon the later of (i) one (1) day after
receipt by the Surety Provider of a demand for payment executed by the Paying Agent certifying that
provision for the payment of principal of or interest on the Series 2001 Bonds when due has not been
made or (ii) the interest payment date specified in the Demand for Payment submitted to the Surety
Provider, the Surety Provider will promptly deposit funds with the Paying Agent sufficient to enable
the Paying Agent to make such payments due on the Series 2001 Bonds, but in no event exceeding
the Surety Bond Coverage, as defined in the Surety Bond.
Pursuant to the terms ofthe Surety Bond, the Surety Bond Coverage is automatically reduced
to the extent of each payment made by the Surety Provider under the terms of the Surety Bond and
the City is required to reimburse the Surety Provider for any draws under the Surety Bond with
interest at a market rate. Upon such reimbursement, the Surety Bond is reinstated to the extent of
each principal reimbursement up to but not exceeding the Surety Bond Coverage. The
reimbursement obligation ofthe City is subordinate to the City's obligations with respect to the Series
2001 Bonds.
In the event the amount on deposit, or credited to the Reserve Fund, exceeds the amount of
the Surety Bond, any draw on the Surety Bond shall be made only after all the funds in the Reserve
Fund have been expended. In the event that the amount on deposit in, or credit to, the Reserve Fund,
in addition to the amount available under the Surety Bond, includes amounts available under a letter
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of credit, insurance policy, surety bond or other such funding instrument (the "Additional Funding
Instrument"), draws on the Surety Bond and the Additional Funding Instrument shall be made on a
pro rata basis to fund the insufficiency. The Ordinance provides that the Reserve Fund shall be
replenished in the following priority: (i) principal and interest on the Surety Bond shall be paid from
first available Pledged Revenues; (ii) after all such amounts are paid in full, amounts necessary to fund
the Reserve Fund to the required level, after taking into account the amounts available under the
Surety Bond shall be deposited from next available Pledged Revenues.
The Surety Bond does not insure against nonpayment caused by the insolvency or negligence
of the Paying Agent.
T AX EXEMPTION
Federal Income Tax Matters
The Internal Revenue Code of 1986, as amended (the "Code") establishes certain
requirements which must be met subsequent to the issuance and delivery of the Series 2001 Bonds
in order that interest on the Series 200 I Bonds be and remain excluded from gross income for
purposes of federal income taxation. Non-compliance may cause interest on the Series 2001 Bonds
to be included in federal gross income retroactive to the date of issuance of the Series 2001 Bonds
regardless of the date on which such non-compliance occurs or is ascertained. These requirements
include, but are not limited to, provisions which prescribe yield and other limits within which the
proceeds of the Series 2001 Bonds and the other amounts are to be invested and require that certain
investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department
of the United States. The City has covenanted in the Ordinance to comply with such requirements
in order to maintain the exclusion from federal gross income of the interest on the Series 200 I Bonds.
In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants,
under existing laws, regulations, judicial decisions and rulings, interest on the Series 200 I Bonds is
excluded from gross income for purposes of federal income taxation. Interest on the Series 2001
Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed
on individuals or corporations; however, interest on the Series 2001 Bonds may be subject to the
alternative minimum tax when any Series 200 I Bond is held by a corporation. The alternative
minimum taxable income of a corporation must be increased by 75% of the excess of such
corporation's adjusted current earnings over its alternative minimum taxable income (before this
adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will
include interest on the Series 2001 Bonds.
Except as described above, Bond Counsel will express no opinion regarding the federal
income tax consequences resulting from the ownership of, receipt or accrual of interest on, or
disposition of Series 2001 Bonds. Prospective purchasers of Series 2001 Bonds should be aware that
the ownership of Series 2001 Bonds may result in collateral federal income tax consequences,
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including (i) the denial ofa deduction for interest on indebtedness incurred or continued to purchase
or carry Series 2001 Bonds, (ii) the reduction of the loss reserve deduction for property and casualty
insurance companies by 15% of certain items, including interest on the Series 2001 Bonds, (iii) the
inclusion of interest on the Series 200 I Bonds in earnings of certain foreign corporations doing
business in the United States for purposes of a branch profits tax, (iv) the inclusion of interest on
Series 2001 Bonds in passive income subject to federal income taxation of certain S corporations with
Subchapter C earnings and profits at the close of the taxable year, and (v) the inclusion of interest on
the Series 2001 Bonds in "modified adjusted gross income" by recipients of certain Social Security
and Railroad Retirement benefits for purposes of determining whether such benefits are included in
gross income for federal income tax purposes.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2001 BONDS
AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HA VE ADVERSE
FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE
REGISTERED OWNERS. PROSPECTIVE SERIES 2001 REGISTERED OWNERS SHOULD
CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.
During recent years legislative proposals have been introduced in Congress, and in some cases
enacted that altered certain federal tax consequences resulting from the ownership of obligations that
are similar to the Series 200 I Bonds. In some cases these proposals have contained provisions that
altered these consequences on a retroactive basis. Such alteration of federal tax consequences may
have affected the market value of obligations similar to the Series 200 I Bonds. From time to time,
legislative proposals are pending which could have an effect on both the federal tax consequences
resulting from ownership of Series 2001 Bonds and their market value. No assurance can be given
that legislative proposals will not be introduced or enacted that would or might apply to, or have an
adverse effect upon, the Series 2001 Bonds.
Tax Treatment of Original Issue Discount
Under the Code, the difference between the maturity amount of the Discount Bonds maturing
in the years through (the "Discount Bonds") and the initial offering price
to the public, excluding bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters. or wholesalers, at which price a substantial amount of Discount Bonds of
the same maturity was sold is "original issue discount." Original issue discount will accrue over the
term of such Discount Bonds at a constant interest rate compounded periodically. A purchaser who
acquires such Discount Bonds in the initial offering at a price equal to the initial offering price thereof
to the public will be treated as receiving an amount of interest excludable from gross income for
federal income tax purposes equal to the original issue discount accruing during the period he holds
such Discount Bonds, and will increase his adjusted basis in such Discount Bonds by the amount of
such accruing discount for purposes of determining taxable gain or loss on the sale or other
disposition of such Discount Bonds. The federal income tax consequences of the purchase,
ownership and redemption, sale or other disposition of the Discount Bonds which are not purchased
in the initial offering at the initial offering price may be determined according to rules which differ
from those above. Owners of such Discount Bonds should consult their own tax advisors with
respect to the precise determination for federal income tax purposes of interest accrued upon sale,
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. redemption or other disposition of Discount Bonds and with respect to the state and local tax
consequences of owning and disposing of such Discount Bonds.
Tax Treatment of Bond Premium
It is anticipated that the Series 2001 Bonds maturing in years _ through _ will be
offered at prices in excess of the principal amount thereofto achieve a yield based upon the call date
rather than the maturity date (the "[Callabk] Premium Bonds"). Under the Code, the excess of the
cost basis ofa [Callabk] Premium Bond over the amount payable at the fcaHt maturity date of the
[Callabk] Premium Bond that minimizes the yield to a purchaser of a [Callabk] Premium Bond (other
than for a bondholder who holds a bond as inventory, stock in trade, or for sale to customers in the
ordinary course of business) is generally characterized as "bond premium." For federal income tax
purposes, bond premium is amortized over the period to the feaHt maturity date of a [Callabk]
Premium Bond that is not subject to early redemption. A bondholder will therefore be required
to decrease his basis in the [Callable.] Premium Bond by the amount of the amortizable bond premium
attributable to each taxable year he holds such [Callabk] Premium Bond. The amount of the
amortizable bond premium attributable to each taxable year is determined on an actuarial basis at a
constant interest rate compounded on each interest payment date. The amortizable bond premium
attributable to a taxable year is not deductible for federal income tax purposes.
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Holders of the Series 2001 Bonds maturing in years _ through _ should consult their
own tax advisors with respect to the precise determination for federal income tax purposes of the
treatment of bond premium upon sale, redemption, or other disposition of such [Callabk] Premium
Bonds.
Florida Tax Matters
On the date of delivery of the Series 2001 Bonds, Bond Counsel will issue an opinion to the
effect that under existing statutes, regulations and judicial decisions, the Series 2001 Bonds and the
income therefrom are exempt from all present intangible personal property taxes imposed by Chapter
199, Florida Statutes and documentary stamp taxes imposed by Chapter 201, Florida Statutes, as
amended.
AUDITED GENERAL PURPOSE FINANCIAL STATEMENTS
The Audited General Purpose Financial Statements of the City for the fiscal year ended
September 30,2000 and report thereon of the Independent Certified Public Accountants is attached
hereto as APPENDIX D. Such financial statements are presented for general informational purposes
only.
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INVESTMENT POLICY
Pursuant to the requirements of Section 218.45, Florida Statutes, the City adopted a written
investment policy which applies to all funds held by or for the benefit of the City Commission (except
for proceeds of bond issues which are deposited in escrow and debt service funds and governed by
their bond documents) and funds of Constitutional Officers and other component units of the City.
The objectives of the investment policy, listed in order in order of importance, are:
1. Safety of principal
2. Provision of sufficient liquidity
3. Optimization of return within the constraints of safety and liquidity
The investment policy limits the securities eligible for inclusion in the City's portfolio. The
City will attempt to maintain a weighted average maturity of its investments at or below three years;
however, the average maturity of investments may not exceed four years.
To enhance safety, the investment policy requires the diversification of the portfolio to reduce
the risk of loss resulting from over-concentration of assets in a specific class of security. The
investment policy also requires the preparation of periodic reports for the City Commission of all
outstanding securities by class or type, book value, income earned and market value as of the report
date.
Notwithstanding the foregoing, moneys held in the funds and accounts established under the
Ordinance may be invested only in Permitted Investments, as described in the Ordinance.
LITIGATION
There is no pending or threatened litigation restraining or enjoining the issuance or delivery
of the Series 2001 Bonds or the pledge of the Pledged Revenues or questioning or affecting the
validity of the Series 2001 Bonds or the pledge of the Pledged Revenues or the proceedings and
authority under which the Series 2001 Bonds are issued and the Pledged Revenues are pledged.
Neither the creation, organization or existence, nor the title of the present members of the City
Commission of the City or other officers of the City to their respective offices is being contested.
The City experiences routine litigation and claims incidental to the conduct of its affairs.
Counsel to the City is of the opinion that no case either pending or threatened against the City will
materially adversely affect the ability of the City to meet its obligations to pay the Series 2001 Bonds
or will materially adversely affect the operations or financial condition of the City.
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RATINGS
Moody's Investors Service ("Moody's") and Standard & Poor's Ratings Services ("S&P")
have assigned municipal bond ratings of" " and " ," respectively, to the Series 2001 Bonds with
the understanding that, upon delivery of the Series 2001 Bonds, a policy insuring the payment when
due of the principal of and interest on the Series 2001 Bonds will be issued by the Bond Insurer.
Such ratings reflect the views of the respective rating agencies and an explanation of the
significance of such ratings may be obtained only from the rating agencies at the following addresses:
Moody's Investors Service, 99 Church Street, New York, New York 10007, and Standard & Poor's
Rating Service, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its
rating on the information and materials furnished to it and on investigations, studies and assumptions
of its own. There is no assurance that such ratings will continue for any given period of time or that
such ratings will not be revised downward or withdrawn entirely by the rating agency concerned, if,
in the judgment of such agency, circumstances so warrant. Any such downward revision or
withdrawal of such ratings may have an adverse effect upon the market price of the Series 2001
Bonds.
LEGAL OPINIONS
Legal matters incident to the authorization, issuance and sale of the Series 2001 Bonds are
subject to the approval of Bryant, Miller and Olive, P.A., Tallahassee, Florida, Bond Counsel, whose
approving opinion will be printed on the Series 2001 Bonds and will be in substantially the form set
forth in APPENDIX E. Certain other legal matters will be passed upon for the City by Pamela K.
Akin, Esquire, City Attorney and by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Disclosure
Counsel to the City.
ENFORCEABILITY OF REMEDIES
The remedies available to the Holders of the Series 2001 Bonds upon an Event of Default
under the Ordinance are in many respects dependent upon judicial actions which are often subject to
discretion and delay. Under existing constitutional and statutory law and judicial decisions, the
remedies specified by the Ordinance may not be readily available or may be limited. The various legal
opinions to be delivered concurrently with the delivery of the Series 2001 Bonds will be qualified, as
to the enforceability of the various legal instruments, by limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or
after such delivery. The remedies granted to the Bondholders under the Ordinance do not include
the power to accelerate the principal of the Series 200 I Bonds.
FINANCIAL ADVISOR
The Financial Advisor for the City is Banc of America Securities LLC, with offices located
at 1640 Gulf-to-Bay Boulevard, Clearwater, Florida 33755, telephone number (727) 462-5804.
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DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Section 517.051, Florida Statutes, as amended, and the regulations promulgated thereunder
(the "Disclosure Act") require that the City make a full and fair disclosure of any bonds or other debt
obligations that it has issued or guaranteed and that are or have been in default as to principal or
interest at any time after December 31, 1975 (including bonds or other debt obligations for which it
has served only as a conduit issuer such as industrial development or private activity bonds issued on
behalf of private businesses). The City is not and has not since December 31,1975 been in default
as to principal and interest on its bonds or other debt obligations (see, however, disclosure which is
being made in the next paragraph related to conduit indebtedness).
The City hereby makes the following disclosure regarding a default on an issue of industrial
development bonds not related to any direct indebtedness of the City, as it is aware of a prior default
in 1990 with respect to an issue of industrial revenue bonds for which the City served only as a
conduit issuer. The City was not liable to pay the principal of or interest on such bonds except from
payments made to it by the private company on whose behalf such bonds were issued and no funds
of the City were used to pay such bonds or the interest thereon. Although the City is not aware of
any other defaults with respect to bonds or other debt obligations as to which it has served only as
a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other
debt obligations.
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ADVISORS AND CONSULTANTS
The City has retained advisors and consultants in connection with the issuance of the Series
2001 Bonds. These advisors and consultants are compensated from a portion of the proceeds of the
Series 200 I Bonds, identified as "Costs of Issuance" under the heading "ESTIMATED SOURCES
AND USES OF FUNDS" herein; and such compensation, is, in some instances, contingent upon the
issuance of the Bonds and the receipt of the proceeds thereof.
Financial Advisor. The City has retained Banc of America Securities LLC, Clearwater,
Florida, as financial advisor (the "Financial Advisor") in connection with the preparation of the City's
plan of fmancing and with respect to the authorization and issuance of the Series 2001 Bonds. The
fees of the Financial Advisor will be paid from proceeds of the Series 200 I Bonds and such payment
is contingent upon the issuance of the Series 2001 Bonds.
Bond Counsel. Bryant, Miller and Olive, P.A., Tallahassee, Florida represents the City as
Bond Counsel. The fees of Bond Counsel will be paid from proceeds of the Bonds, and such
payment is contingent upon the issuance of the Bonds.
Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida represents the City
as Disclosure Counsel. The fees of Disclosure Counsel will be paid from proceeds of the Bonds, and
such payment is contingent upon the issuance of the Bonds.
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the holders and beneficial owners of the Series
200 I Bonds to provide certain financial information and operating data relating to the City by not
later than June 30 in each year commencing June 30, 2002 (the "Annual Report"), and to provide
notices of the occurrence of certain enumerated events, if deemed by the City to be material. The
Annual Report will be filed by the City with each Nationally Recognized Municipal Securities
Information Repository ("NRMSIR"), and with the State of Florida Repository, ifand when created.
The notices of material events will be filed by the City with the NRMSIR and with the State of
Florida Repository, if and when created. The form of Continuing Disclosure Certificate containing
the specific nature of the information to be contained in the Annual Report or the notices of material
events appears in "APPENDIX F - FORM OF CONTINUING DISCLOSURE CERTIFICATE."
These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule
15c2-12(b)(5). The City has never failed to comply in all material respects with any previous
undertakings with regard to said Rule to provide annual reports or notices of material events.
24
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CERTIFICATE CONCERNING OFFICIAL STATEMENT
Concurrently with the delivery of the Series 200 I Bonds, the City will furnish its certificate,
executed by the Mayor or Vice-Mayor of the City, to the effect that, to the best of his or her
knowledge, this Official Statement, as of its date and as of the date of delivery of the Series 2001
Bonds, does not contain any untrue statements of material fact and does not omit to state a material
fact which should be included herein for the purpose for which this Official Statement is to be used,
or which is necessary to make the statements contained herein, in the light ofthe circumstances under
which they were made, not misleading.
VALIDATION AND REFERENDUM
The portion of the Series 2001 Bonds financing the Clearwater Beach Entryway was validated
by final judgment of the Supreme Court of Florida, rendered on January 18,2001. The portion of
the Series 2001 Bonds financing the Memorial Causeway Bridge Improvements was validated by fmal
judgment ofthe Supreme Court of the State of Florida, rendered on April 12, 2001. The portion of
the Series 2001 Bonds financing the Main Library Project was approved by voter referendum
conducted on July 11, 2000.
MISCELLANEOUS
The references, excerpts and summaries of all documents, resolutions and/or ordinances
referred to herein do not purport to be complete statements of the provisions of such documents,
resolutions and/or ordinances and reference is directed to all such documents, resolutions and/or
ordinances for full and complete statements of all matters of fact relating to the Series 2001 Bonds,
the security for and the repayment of the Series 2001 Bonds and the rights and obligations of the
Holders thereof. Copies of such documents, resolutions and ordinances may be obtained from the
City Clerk's Office.
So far as any statements made in this Official Statement involve matters of opinion or of
estimates, whether or not expressly stated, they are set forth as such and not as representations of
fact. No representation is made that any of such statements will be realized. Neither this Official
Statement nor any statement which may have been orally or in writing is to be construed as a contract
with the Holders of the Series 2001 Bonds.
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The execution and delivery of this Official Statement by the Mayor-Commissioner ofthe City
has been duly authorized by the City Commission.
CITY OF CLEARWATER, FLORIDA
Brian 1. Aungst, Sr., Mayor-Commissioner
William B. Horne, II, Interim City Manager
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APPENDIX A
GENERALINFO~ATION
RELATING TO THE CITY OF CLEARWATER, FLORIDA
Location
The City of Clearwater (the "City"), the county seat of Pinellas County (the fifth most
populous county in Florida), is geographically located in the middle of the west coast of Florida on
the Gulf of Mexico. It is situated approximately 22 miles west of Tampa and 16 miles north of St.
Petersburg. Standing on the highest coastal elevation of the State, the City limits comprise
approximately 26.5 square miles ofland and 8.61 square miles of waterways and lakes.
Clearwater Beach, a corporate part of the City, is a beach community connected to the
mainland by Memorial Causeway, a four-lane, toll-free drive stretching almost two miles across the
Intracoastal Waterway. Business on Clearwater Beach is mainly tourist oriented, with hotels, motels
and gift shops. Many fine homes, apartments and condominiums offer pleasant, semi-tropical island
accommodations to permanent residents and winter and summer visitors.
History
The area now known as Clearwater was first explored in 1528 by Panfile de Narvaez, a
Spanish explorer who encountered a large tribe of Indians, which his army drove out. The Indians
recaptured their territory and held it until the Seminole Wars of 1835-42. The Indians who inhabited
this area are said to have called it "Pocotopaug," meaning "clear water," for the many springs of clear,
fresh water that bubbled along the shore and even below the waterline at low tide.
Settlers began moving into the area around the time of the Seminole Wars. After the wars
ended, the territory was opened by the Federal government for homesteading under the Armed
Occupation Act. The first land title was granted in 1842. The early settlement, named "Clear Water
Harbor," was incorporated in 1897. "Clear Water" later became one word and "Harbor" was dropped
in 1906 when Pinellas County was created by an act of the State Legislature. In May 1911,
Clearwater became the County Seat and Clearwater was chartered as a municipality on May 27,
1915.
Government and Administration
Clearwater has a commission-city manager form of government. Four commissioners and a
mayor-commissioner are elected at large to serve overlapping three-year terms. They appoint the city
manager and the city attorney. All other administrative and professional positions are appointed by
the city manager in accordance with the City's Civil Service System.
A-I
. The City has approximately 1,736 employees, covered by the City's Civil Service law relating
to recruitment, promotion, evaluation and discipline based on merit principles. Four employee unions
represent the City's civil labor force: two units of the Fraternal Order of Police; one of the
International Association of Fire Fighters; and one from the Communications Workers of America.
Transportation
Pinellas County and Clearwater are served by three major causeways and bridges over Tampa
Bay, by U.S. 19 and 1-275 to the north and south, by 1-4 and U.S. 60 to the east. State Roads 590
and 686 also afford access to the City.
Tampa International Airport, located approximately twenty miles from downtown Clearwater,
provides air travel access with approximately 260 national and international flights daily. Limousine
and taxi service to and from the airport is available from Clearwater and throughout Pinellas County.
St. Petersburg/Clearwater International Airport, five miles from downtown Clearwater, offers
regularly scheduled passenger service and charter and special group flights, on a more limited basis
to both domestic and foreign destinations, particularly to Canada, Mexico, and Central and South
America. The Executive Airpark, which is slightly over a mile from the downtown business section,
provides service and maintenance for private plane owners. The airport has one 3,000 foot
hard-surface runway and facilities for visiting and locally based planes.
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The Port of Tampa (22 miles to the east) is the closest deep water port. The port is serviced
by a variety of steamship agents and operators. The United States Coast Guard maintains an air
station at the St. Petersburg/Clearwater International Airport, and a search and sea rescue cutter
station on Clearwater Harbor opposite Sand Key.
Gulf Coast Motor Lines provides service daily between Clearwater, St. Petersburg and Tampa
and makes connections with Greyhound and Trailways Bus Lines in Tampa. Scenic tours are
available via Gray Line out of Clearwater and St. Petersburg, and both Gray Line and Gulf Coast
have buses for charter. Pinellas Suncoast Transit System maintains 54 routes in 19 municipalities in
Pinellas County.
Utilities, Public Service and Community Facilities
The City owns and operates its own water and wastewater collection systems. Water is
obtained from 17 deep wells owned and operated by the City (approximately 20-25%) and from
wholesale purchases from the Pinellas County Water System (approximately 75-80%). Total daily
average is approximately 29 million gallons per day. The wastewater collection program provides
for the transmission of wastewater through the City's underground sewer mains, collectors and
interceptor lines and for the maintenance, repair and replacement of fi 323 miles of sanitary sewer
lines. The Department of Public Works maintains 304 miles of paved streets, 11 miles of unpaved
streets, approximately 123 miles of storm sewer mains, and approximately fi 323 miles of sanitary
sewer mams.
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Electric power is provided by Florida Power Corporation and telephone service is provided
by Verizon of Florida, Inc. Time Wamer provides cable television service under a franchise with the
City. Local editions of the daily St. Petersburg Times and The Tampa Tribune, plus weekly
newspapers from adjacent Dunedin, Largo, Seminole and Clearwater Beach are widely distributed.
The Clearwater Public Library System consists of a main library and four branches which are
spread evenly throughout the community for easy access. The City offers over 42 acres of public
beach front, parks, playgrounds, athletic courts and fields, pools, a fAt 6.917 seat baseball and softball
stadium, golf course, civic and recreational centers, fAt 7.4 miles of recreational paths, boat ramps
and a fAt 209 slip yacht basin and marina. The Philadelphia Phillies conduct spring training at the
municipal baseball stadium and have a long-term contract for farm club training on Clearwater's
specially constructed facilities during the Winter Instructional League Program. Clearwater is the
home of the Clearwater Bombers, a national amateur fastpitch softball team.
Tourism
The State of Florida reported 58.9 million tourists came to Florida during 1999, an increase
of 20.9% over the 48.7 million reported in 1998. More than 4.5 million visitors vacationed in
Pinellas County in 1999, and 4.7 in the year 2000, a 3.5% increase. Tourism is a $2.5 billion industry
annually to the County. Pinellas County is ranked eighth of the top ten destinations in Florida and
totaled 3.9% of Florida's domestic tourism. Clearwater's Fun 'N Sun Festival each spring attracts
thousands of visitors.
Education
The Pinellas County School District is the seventh-largest in the State and operates a total of
142 schools comprising elementary through high school, exceptional, alternative and vocational
schools within the County. During the fAt 2000-2001 school year, Pinellas County Schools expects
enrollment of more than fAt 15.978 comDared to 14.551 durine: the 1999-2000 school year with
students fAt attendine 82 elementary, 23 middle and 16 high schools along with five exceptional
education centers and two discipline centers. The district also operates three community schools,
three adult education/learning centers, two technical education centers and one secondary vocational
center. Private schools and academies are also located within or near the City limits. In addition, St.
Petersburg Junior College has a Clearwater campus. Eckerd College in St. Petersburg, Beacon
College in Largo, Stetson University College of Law in Gulfport, the University of South Florida and
the University of Tampa in Tampa offer nearby college and post-graduate education.
Industry, Commerce and Labor
Light, clean industry is encouraged in Clearwater. In 1957, the City of Clearwater developed
a 100 acre industrial park adjacent to the Clearwater Airpark (Executive Airport) and to the CSX
Transportation Company. There is also a privately owned, 35 acre industrial park. Large industries
located near Clearwater include Honeywell, General Electric, UNISYS, Concept and Hercules
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Defense Electronics Systems, Inc. During the 1999 fiscal year IMRglobal Corp. ("IMR") occupied
its new world headquarters in downtown Clearwater with a projected employment of 700. IMR
represents an important step in revitalizing downtown Clearwater and attracting technology
companies to the area.
Pension Plan
The Employees' Pension Plan and the Fireman's Pension Plan are self-administered by the City.
City contributions for fiscal year ending 1999 were $3,904,950 to the Employees' Plan and
$1,003,758 to the Fireman's Plan, and were in accordance with actuarially determined funding
requirements.
In addition, supplemental pensions exist for certified Police Officers and Firefighters, funded
solely from excise taxes on certain insurance premiums covering property in Clearwater, collected
by the State and remitted to the City. Both plans require benefits to be adjusted to equal funds assets
provided by the defined contributions.
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A-4
. Demographic Information
Last Ten Fiscal Years
(a) (b) (c) (d) (e)
Permanent Per Capita Median School Unemployment
Year PODulation Income Age Enrollment Rate (%)
fi
1991 99,612 22,059 42.1 11,572 6.1
1992 99,856 22,958 42.3 11,921 5.4
1993 100,768 24,470 42.3 11,584 6.1
1994 100,604 Not avail. 42.9 10,043 5.5
1995 101,162 22,789 42.2 10,284 4.8
1996 101,867 24,696 42.1 11,906 4.2
1997 102,472 26,050 43.3 15,264 3.7
1998 102,874 27,311 43.6 13,714 2.9
1999 104,281 28,367 43.9 14,551 3.0
2000 104.454 30.633 44.2 15.978 2.7
Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending
September 30, fi 2000.
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(a) fi 1991-1999, University of Florida, Bureau of Economic and Business Research: 2000 City
of Clearwater. Florida Comnrehensive Annual Financial Renort for neriod endin~
September 30. 2000.
(b) Data is for Pinellas County, but should also approximate Clearwater levels. fi 1991-1994,
Florida Trend Magazine; 1995-fi 2000, University of Florida, Bureau of Economic and
Business Research, Florida Statistical Abstract.
(c) Pinellas County data, but should also approximate Clearwater levels. 1991-1992, U.S. Bureau
of the Census; 1993, St. Petersburg Times Research Bureau; 1994, Sales and Marketing
Management, Survey of Buying Power; 1995-fi 2000. University of Florida, Bureau of
Economic and Business Research, Florida Statistical Abstract.
(d) fi Clearwater Planning Department population pro rata estimate of Pinellas County School
Board County level data for public schools; 1991-1999, Pinellas County School Board. 2000.
Pinellas County School District enrollment for schools located in Clearwater City limits..
(e) Data is for TampalSt. Petersburg MSA. fi 1991-1999 source of data is the Florida Bureau of
Labor Market Information: 2000. University of Florida. Bureau of Economic and Business
Research. Florida Statistical Abstract.
NOTE: Data is for an unspecified point in each year, not specifically September 30.
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A-5
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Property Values, Construction, and Bank Deposits
Last Ten Fiscal Years
Commercial Construc1ion Residential Construction Miscellaneous Construction(a)
Fiscal Year Number of Number of Number of Total Assessed Bank Deposits(C)
Year Permits Value Permits Value Permits Value Prooertv Value(b) (in OOO's)
f'i
1991 626 ~24,250,916 1,260 ~34,937,357 5,906 f'i $17.452.664 $5.356.661.219 $15,285,415
1992 557 32,765,807 1,137 25,956,314 5,940 18,020,294 5,475,721,772 14,360,597
1993 1,693 42,051,081 3,885 29,296,168 6,799 20,113,175 5,505,360,476 13,853,289
1994 1,831 37,164,437 3,882 49,950,413 6,063 17,922,023 5,572,851,512 13,274,660
1995 1,775 77,486,099 3,747 53,614,754 6,827 28,843,480 5,641,202,905 13,362,164
1996 1,898 42,360,262 4,224 26,854,040 6,825 24,898,425 5,733,193,387 12,786,549
1997 1,702 49,385,937 4,172 75,997,890 6,739 27,351,853 5,884,592,007 12,522,122
> 1998 1,455 54,732,371 4,978 47,045,558 5,266 17,820,469 6,049,571,226 13,293,565
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1999 1,690 48,849,409 5,544 95,713,246 307 7,506,580 6,349,561,534 13,137.180
2000 2.698 176.010.021 5.573 30.814.807 35 229.870 6.555.350.175 13.296.319
Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending September 30,1999.
(a) Includes institutions, churches, seawalls, pools and non-valued building permits.
(b) Pine lias County Property Appraiser, values listed are for years of collections.
(c) Includes balances in commercial, savings, savings and loan, and building and loan banking institutions for Pinellas County. Data from the Florida Bankers
Association Branch Deposit Report of Florida Bank and Thrift Institutions.
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City of Clearwater, Florida
Assessed and Estimated Actual property Valuations
Last Ten Fiscal years
Assessed Valuations (a) Percentages
Assessed
Values to
Collection Non-Exempt Personal Other Total Total Total Estimated Yearlv Increases
Year Real Estate Property Propertv(b ) Taxable Exempt( c) -AlL Market Taxable Total
fAt 1991 $3.745.222.768 $378.841.070 $500.188 $4.124.564.026 $1.232.097.193 15,356,661,219 100,0 6.9 t"i% 6.1%
1992 3,799,734,064 379,338,740 509,202 4,179,582,006 1,296,139,766 5,475,721,772 100.0 1.3 2.2
1993 3,800,740,889 386,831,160 532,486 4,188,104,535 1,317,255,941 5,505,360,4 76 100.0 0.2 0,5
1994 3,789,902,836 390,841,880 569,338 4,181,314,054 1,391,537,458 5,572,851,512 100,0 (0.2) 1.2
1995 3,782,134,930 403,392,150 580.,731 4,186,107,811 1,455,095,094 5,641,202,905 100,0 0,1 1.2
1996 3,820,217,710 431,622,230 592,909 4,252,432,849 1,480,760,538 5,733,193,387 100,0 1.6 1.6
> 1997 3,918,747,480 457,182,870 628,698 4,376,559,048 1,508,032,959 5,884,592,007 100,0 2,9 2,6
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1998 3,999,483,300 493,824,770 1,026,819 4,494,262,759 1,555,308,467 6,049,571,226 100.0 2.7 2.8
1999 4,153,719,690 537,808,800 870,404 4,692,398,894 1,657,162,640 6,349,561,534 100,0 4.4 5,0
2000 4.353.493.520 549.051.160 934.183 4.903.478.863 1.751.871.312 6.655.350.175 100.0 4.5 4.8
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30,1999.
(a) Pinellas County Property Appraiser
(b) Railroad and Telegraph Companies
(c) Includes governmental, educational, qualified religious, literary, scientific, and health care properties and special exemptions for individual property owners. Qualified
property owners are entitled to a $25,000 Homestead Exemption based on residency requirement.
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Property Tax Levies and Collections
Last Ten Fiscal Years
Percent Percent of
of Total Delinquent
Current Percent of Delinquent Collections Outstanding Taxes to
Fiscal Total Tax Levy Tax Total Tax To Current Delinquent Current
Year Tax Levy Collections( a) Collected Collections Collections Levy Taxes Levy
f't 1991 $21.336.807 $21.145.636 99.10% $ 95.735 $21.241.371 99.55% $1.280.545 6.00%
1992 21,369,980 21,075,554 98,62 109,316 21,184,870 99.13 1,387,456 6.49
1993 21,408,489 20,947,194 97.85 199,638 21,146,832 98.78 1,438,116 6,72
1994 21,281,744 21,154,946 99.40 603,226 21,758,172 102.24 946,874 4.45
1995 21,458,160 21,388,692 99.68 159,918 21,548,610 100.42 856,443 3.99
)0- 1996 21,761,730 21,675,311 99,60 73,731 21,749,042 99,94 868,209 3.99
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1997 22,410,181 22,281,502 99.43 80,253 22,361,755 99,78 914,383 4,08
1998 23,008,214 22,856,951 99.34 129,690 22,986,640 99.91 935,957 4,07
1999 23,951,878 23,854,396 99.59 226,812 24,081,208 100,54 806,626 3.37
2000 26.998.318 26.876.461 99.55 106.800 26.983.261 99.94 821.683 3.04
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, f't 2000.
(a) Collections are reported at the gross amount before any discount allowances.
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Property Tax Rates - All Direct and Overlapping Governments
(Per $1,000 of Assessed Value)
Last Ten Fiscal Years
Downtown County Emergency
Fiscal Develop- School Transit Medical
Year City menta) Board County District Services Other Total
f'i
1991 5.2037 1.000 8.7660 5.234 .5743 .700 1.0964 22.5744
1992 5.1158 1.000 8.6260 5.495 .5893 .700 1.1560 22.6821
1993 5.1158 1.000 9.0000 5.417 .5893 .850 1.1820 23.1541
1994 5.1158 1.000 9.0820 5.429 .6697 .872 1.4221 23.5906
1995 5.1158 1.000 9.3590 5.585 .6697 .806 1.6308 24.1663
;I> 1996 5.1158 1.000 9.3290 5.140 .6697 .752 1.6561 24.0366
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\0 1997 5.1158 1.000 9.1760 5.510 .697 .741 1.6561 23.8686
1998 5.1158 1.000 9.1330 5.538 .6697 .713 1.6561 23.8256
1999 5.1158 1.000 9.11 00 5.538 .6501 .713 1.6561f'i 23.7830
2000 5.5032 1.000 8.6660 5.854 .6501 .647 1.6572(b) 23.9775
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, f'i 2000.
(a) A separate taxing district established by referendum which affects only downtown properties.
(b) Other includes Pinellas County Planning Council fi(.0225); Juvenile Welfare Board (.8117); SW Florida Water Management District
(.4220); Pinellas Anclote River Basin (.4010).
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City of Clearwater, Florida
Principal Taxpayers*
Year Ended September 30, fAt 2000
Percentage
to Total
Assessed Assessed
Taxoavers Tvoe of Business Value* Value
Bellwether Prop. LP Ltd. Shopping Center $ t4 83.872.700 1.93%
Excel Realty Trust. Inc. Shopping Center t4 29.223.200 0.67
t4 Grand Reserve at Park Apartment Comolex 25.002.300 0.57
Taylor, John S. III Landowner t4 22.578.600 0.52
Clearwater Land Co. Adult Con2reeate Facilitv 21.473.800 0.49
Branch Sunset Association Shoooin2 Center 20.742.300 0.48
ZOM Bayside Arbors Ltd. Aoartment Comolex 19.499.100 0.45
Sand Key Association Ltd. Hotel t4 19.304.400 0.44
t4 Northwood Plaza ShoDDin2 Center 18.245.200 0.42
. Walmart t4 Stores, Inc. Shopping Center 17 .635.600 0.41 t4
Subtotal t4 277.577.200 6.38
All Others Pi 4.075.916.320 93.62
t4 Total $4.353.493.520 100.00%
* Based on non-exempt real property assessed taxable values.
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending
September 30, t4 2000; Pinellas County Property Appraiser, t4 1999 tax rolls for t4
2000 collections.
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City of Clearwater, Florida
Ratio of Net General Bonded Debt to Taxable Assessed Value
and Net Bonded Debt Per Capita
Last Ten Fiscal Years
Ratio of Net Net
Taxable Net General General
Assessed General Bonded Debt Bonded
Fiscal Value Bonded To Assessed Debt
Year Population (000)(1 ) Debt(2) Value Per Capita
A
1991 99,612 A $4.124.564 1567,950 .01 15.70
1992 99,856 4,179,582 452,779 .01 4.53
1993 100,768 4,188,105 348,478 .01 3.46
1994 100,604 4,181,314 242,700 .01 2.39
1995 101,162 4,186,108 133,597 .00 1.30
1996 101,867 4,252,433 21,598 .00 0.21
1997 102,472 4,376,559 165,000 .00 1.61
1998 102,874 4,494,262 33,750 .00 0.33
1999 104,281 4,692,398 0 .00 0.00
2000 104.454 4.903.478 !! .00 0.00
. Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending
September 30, A 2000.
(1) Values listed are for year of collections.
(2) Gross general bonded debt less amounts on deposit in sinking funds or debt service funds.
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City of Clearwater, Florida
Computation of Legal Debt Margin
September 30, f6t 2000
Assessed Valuation of Non-Exempt Real Estate(a)
Times: Twenty Percent Limitation per City Charter
Equals Legal Indebtedness Limitation
fAt $4.353.493.520
x .20
$ fAt 870.698.704
Debt Subject to Indebtedness Limitation:
Gross Debt
Revenue Bonds:
1985 Public Service Tax and
Bridge Revenue Bonds fAt $ 485.000
fAt 1998 Water and Sewer Revenue Bonds fAt 47.608.954
1993 Water and Sewer Revenue Bonds fAt 29.520.000
1995 Improvement Revenue Bonds fAt 9.950.000
1996A Gas System Revenue Bonds fAt 8.525.000
1997 Gas System Revenue Bonds fAt 13.335.000
1998 Gas System Revenue Bonds fAt 7.960.000
1999 Stormwater Svstem Revenue Bonds 7.500.000
Notes, Mortgages and Contracts fAt 10.284.654
fAt Totals $135.168.608
Legal Indebtedness Margin
Less Sinking
Fund Assets
Net Debt
Subject to
Limitation
$ 169.396 $ 315.604
4.436.709 43.172.245
8,654,333 fAt 20.865.667
120.000 9.830.000
6,667 fAt 8.518.333
39.167 13.295.833
2.500 7.957.500
95.455 7.404.545
10.284.654
$13.524.227 $121.644.381
fAt $749.054.323
Source:
City of Clearwater, Florida, Comprehensive Annual Financial Report for period
ending September 30, fAt 2000.
(a) Valuation listed is from fAt 1999 tax year for fAt 2000 collections.
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Governmental Unit
City of Clearwater
City of Clearwater, Florida
Computation of Direct and Overlapping Debt
September 30, t'i 2000
Net Debt
Outstanding
Amount
Percent
$
100%
$
Pinellas County School Board
$45.643.454
14%
$6.390.084
(a) Applicable Net Debt Percenta~e is based on ratio of City to County Taxable values for 1999
collections ($4.353.493.520/$32.049.129.680) fi.
A-13
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APPENDIX B
INTERLOCAL AGREEMENT
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APPENDIX C
THE ORDINANCE
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APPENDIX D
AUDITED GENERAL PURPOSE FINANCIAL STATEMENTS
OF CLEARWATER, FLORIDA
FISCAL YEAR ENDED SEPTEMBER 30, 2000
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APPENDIX E
FORM OF OPINION OF BOND COUNSEL
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APPENDIX F
FORM OF
CONTINUING DISCLOSURE CERTIFICATE
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered
by the City of Clearwater, Florida (the "Issuer") in connection with the issuance of its $46,445,000
Infrastructure Sales Tax Revenue Bonds, Series 2001 (the "Series 2001 Bonds"). The Series 2001
Bonds are being issued pursuant to Ordinance No. 6352-99, adopted by the City Commission on May
6, 1998, as supplemented by Resolution No. 00-19, adopted by the City Commission on June 1,2000,
as amended by Ordinance No. 6802-01, adopted by the City Commission on May 17, 2001, as
supplemented by Resolution No. 01-16, adopted by the City Commission on May 17,2001 (the
Ordinance, as so amended and supplemented is hereinafter referred to as the "Ordinance"). The
Issuer covenants and agrees as follows:
SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure
Certificate is being executed and delivered by the Issuer for the benefit of the Series 2001
Bondholders and in order to assist the original underwriters of the Series 2001 Bonds in complying
with Rule 15c2-12(b)( 5) promulgated by the Securities and Exchange Commission ("SEC") pursuant
to the Securities Exchange Act of 1934 (the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION. Exceptas otherwise
provided herein, the Issuer shall provide to all of the nationally recognized municipal securities
information repositories described in Section 4 hereof(the "NRMSIRs"), and to any state information
depository that is established within the State of Florida (the "SID"), on or before June 30 of each
year, commencing June 30, 2002, the information set forth below in this Section 2. Notwithstanding
the immediately preceding sentence, to the extent any such information does not become available
to the Issuer before June 30 of any year, the Issuer shall provide such information when it becomes
available, but no later than one year following the end of the Issuer's Fiscal Year.
(A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding
Fiscal Year (the "CAFR"), which shall include the audited financial statements of the Issuer for the
immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting
Principles, as modified by applicable State of Florida requirements and the governmental accounting
standards promulgated by the Government Accounting Standards Board; provided, however, ifthe
audited financial statements of the Issuer are not completed prior to April 30 of any year, the Issuer
shall provide unaudited financial statements on such date and shall provide the audited financial
statements as soon as practicable following their completion; and
(B) to the extent not set forth in the CAFR, additional financial information and operating
data of the type included with respect to the Issuer in the final official statement prepared in
connection with the sale and issuance of the Series 2001 Bonds (as amended, the "Official
Statement"), as set forth below:
1. Updates of the financial information set forth in the Official Statement in the
Table labeled "SALES TAX REVENUES - CITY OF CLEARWATER, FLORIDA" under
the caption "SECURITY FOR THE SERIES 2001 BONDS - Sales Tax Revenues and under
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the caption "HISTORICAL AND PROJECTED DEBT SERVICE COVERAGE" (but only
to the extent of historical, not projected, data).
2. Description of any additional indebtedness payable in whole or in part from
the Pledged Revenues (as defmed in the Ordinance).
3. Any other fmancial information or operating data of the type included in the
Official Statement which would be material to a holder or prospective holders of the Series
2001 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" means the period commencing on
October 1 and ending on September 30 of the next succeeding year, or such other period of time
provided by applicable law.
SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer shall provide
to the NRMSIRs or the Municipal Securities Rulemaking Board (the "MSRB") and to the SID, on
a timely basis, notice of any of the following events, if such event is material with respect to the Series
2001 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series 200 I
Bonds:
(A) Principal and interest payment delinquencies;
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(B) Non-payment related defaults;
(C) Unscheduled draws on the debt service reserve fund reflecting fmancial difficulties;
(D) Unscheduled draws on credit enhancement reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the Series 2001
Bonds;
(G) Modifications to rights of Series 2001 Bondholders;
(H) Redemptions;
(I) Defeasances;
(1) Release, substitution, or sale of property securing repayment of the Series 2001
Bonds;
(K) Rating changes; and
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(L) Notice of any failure on the part of the Issuer or any other Obligated Person (as
defined herein) to meet the requirements of Section 2 hereof.
The Issuer may from time to time, in its discretion, choose to provide notice of the
occurrence of certain other events, in addition to those listed in this Section 3, if, in the judgment of
the Issuer, such other events are material with respect to the Series 200 I Bonds, but the Issuer does
not specifically undertake to commit to provide any such additional notice of the occurrence of any
material event except those events listed above.
Whenever the Issuer obtains knowledge of the occurrence of a significant event described in
this Section 3, the Issuer shall as soon as possible determine if such event would be material under
applicable federal securities law to holders of Series 200 I Bonds, orovided, that any event under
clauses (D), (E), (F), (K) or (L) above will always be deemed to be material.
SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall provide the
information described in Sections 2 and 3 above, to the extent required, shall be the following
organizations, their successors and assigns:
Bloomberg Municipal Repositories
P.O. Box 840
Princeton, N.J. 08542-0840
Phone: (609) 279-3225
Fax: (609) 279-5962
Email: Munis@B1oomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
Email: nrmsir@dpcdata.com
Interactive Data
Attn: Repository
100 Williams Street
New York, NY 10038
Phone: (212) 771-6899
Fax: (212) 771-7390
Email: NRMSIR@interactivedata.com
3
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Standard & Poor's J. J. Kenny Repository
55 Water Street
45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
Email: nrmsicrepository@sandp.com
(F)
Any NRMSIRs that are established subsequently and approved by the SEC.
(G) A list of the names and addresses of all designated NRMSIRs as of any date may
currently be obtained by calling the SEC's Fax on Demand Service at 202/942-8088 and requesting
document number 0206.
SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision
in the Ordinance to the contrary, failure of the Issuer to comply with the provisions ofthis Disclosure
Certificate shall not be considered an event of default under the Ordinance; provided, however, any
Series 2001 Bondholder may take such actions as may be necessary and appropriate, including
pursuing an action for mandamus or specific performance, as applicable, by court order, to cause the
Issuer to comply with its obligations hereunder. For purposes ofthis Disclosure Certificate, "Series
2001 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Series 2001 Bonds (including persons
holding Series 2001 Bonds through nominees, depositories or other intermediaries), or (B) is treated
as the owner of any Series 2001 Bond for federal income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of the
information required herein to be disclosed may be incorporated by reference from other documents,
including official statements or debt issues of the Issuer of related public entities, which have been
submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document incorporated
by reference is a final official statement, it must be available from the MSRB. The Issuer shall clearly
identify each document incorporated by reference.
SECTION 7. DISSEMINATION AGENTS. The Issuer may, from time to time,
appoint or engage a dissemination agent to assist it in carrying out its obligations under this
Disclosure Certificate, and may discharge any such agent, with or without appointing a successor
disseminating agent.
SECTION 8. TERMINATION. The Issuer's obligations under this Disclosure
Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all
of the Series 2001 Bonds, or (B) the termination of the continuing disclosure requirements of the
Rule by legislative, judicial or administrative action.
4
. SECTION 9. AMENDMENTS. Notwithstanding any other provision of this
Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be
waived, if such amendment or waiver is supported by an opinion of counsel that is nationally
recognized in the area of federal securities laws, to the effect that such amendment or waiver would
not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver
had been effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule.
SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure
Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the
means of dissemination set forth in this Disclosure Certificate or any other means of communication,
or including any other information in its annual information described in Section 2 hereof or notice
of occurrence of a significant event described in Section 3 hereof, in addition to that which is required
by this Disclosure Certificate. If the Issuer chooses to include any information in its annual
information or notice of occurrence of a significant event in addition to that which is specifically
required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure
Certificate to update such information or include it in its future annual information or notice of
occurrence of a significant event.
.
SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer,
becomes an Obligated Person (as defined in the Rule) relating to the Series 2001 Bonds, the Issuer
shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule
applicable to such Obligated Person.
Dated as of June , 2001
ATTEST:
CITY OF CLEARWATER, FLORIDA
City Clerk
By:
Mayor-Commissioner
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5
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APPENDIX G
SPECIMEN BOND INSURANCE POLICY
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H-1
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EXHIBIT D
CONTINUING DISCLOSURE CERTIFICATE
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D-l
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered
by the City of Clearwater, Florida (the "Issuer") in connection with the issuance of its $46,445,000
Infrastructure Sales Tax Revenue Bonds, Series 2001 (the "Series 2001 Bonds"). The Series 2001
Bonds are being issued pursuant to Ordinance No. 6352-99, adopted by the City Commission on May
6, 1998, as supplemented by Resolution No. 00-19, adopted by the City Commission on June 1,2000,
as amended by Ordinance No. 6802-01, adopted by the City Commission on May 17, 2001, as
supplemented by Resolution No. 01-16, adopted by the City Commission on May 17,2001 (the
Ordinance, as so amended and supplemented is hereinafter referred to as the "Ordinance"). The
Issuer covenants and agrees as follows:
SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure
Certificate is being executed and delivered by the Issuer for the benefit of the Series 2001
Bondholders and in order to assist the original underwriters of the Series 2001 Bonds in complying
with Rule 15c2-12(b)( 5) promulgated by the Securities and Exchange Commission (" SEC") pursuant
to the Securities Exchange Act of 1934 (the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION. Exceptas otherwise
provided herein, the Issuer shall provide to all of the nationally recognized municipal securities
information repositories described in Section 4 hereof (the "NRMSIRs"), and to any state information
depository that is established within the State of Florida (the "SID"), on or before June 30 of each
year, commencing June 30, 2002, the information set forth below in this Section 2. Notwithstanding
the immediately preceding sentence, to the extent any such information does not become available
to the Issuer before June 30 of any year, the Issuer shall provide such information when it becomes
available, but no later than one year following the end of the Issuer's Fiscal Year.
(A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding
Fiscal Year (the "CAFR"), which shall include the audited financial statements of the Issuer for the
immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting
Principles, as modified by applicable State of Florida requirements and the governmental accounting
standards promulgated by the Government Accounting Standards Board; provided, however, if the
audited financial statements of the Issuer are not completed prior to April 30 of any year, the Issuer
shall provide unaudited financial statements on such date and shall provide the audited financial
statements as soon as practicable following their completion; and
(B) to the extent not set forth in the CAFR, additional financial information and operating
data of the type included with respect to the Issuer in the final official statement prepared in
connection with the sale and issuance of the Series 2001 Bonds (as amended, the "Official
Statement"), as set forth below:
1. Updates of the financial information set forth in the Official Statement in the
Table labeled "SALES TAX REVENUES - CITY OF CLEARWATER, FLORIDA" under
the caption "SECURITY FOR THE SERIES 2001 BONDS - Sales Tax Revenues and under
.
the caption "HISTORICAL AND PROJECTED DEBT SERVICE COVERAGE" (but only
to the extent of historical, not projected, data).
2. Description of any additional indebtedness payable in whole or in part from
the Pledged Revenues (as defined in the Ordinance).
3. Any other financial information or operating data of the type included in the
Official Statement which would be material to a holder or prospective holders of the Series
2001 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" means the period commencing on
October 1 and ending on September 30 of the next succeeding year, or such other period of time
provided by applicable law.
SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer shall provide
to the NRMSIRs or the Municipal Securities Rulemaking Board (the "MSRB") and to the SID, on
a timely basis, notice of any of the following events, if such event is material with respect to the Series
2001 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series 2001
Bonds:
(A) Principal and interest payment delinquencies;
.
(B) Non-payment related defaults;
(C) Unscheduled draws on the debt service reserve fund reflecting fmancial difficulties;
(D) Unscheduled draws on credit enhancement reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax -exempt status of the Series 2001
Bonds;
(G) Modifications to rights of Series 2001 Bondholders;
(H) Redemptions;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the Series 200 I
Bonds;
(K) Rating changes; and
. 2
. (L) Notice of any failure on the part of the Issuer or any other Obligated Person (as
defined herein) to meet the requirements of Section 2 hereof.
The Issuer may from time to time, in its discretion, choose to provide notice of the
occurrence of certain other events, in addition to those listed in this Section 3, if, in the judgment of
the Issuer, such other events are material with respect to the Series 2001 Bonds, but the Issuer does
not specifically undertake to commit to provide any such additional notice of the occurrence of any
material event except those events listed above.
Whenever the Issuer obtains knowledge of the occurrence of a significant event described in
this Section 3, the Issuer shall as soon as possible determine if such event would be material under
applicable federal securities law to holders of Series 2001 Bonds, provided, that any event under
clauses (D), (E), (F), (K) or (L) above will always be deemed to be material.
SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall provide the
information described in Sections 2 and 3 above, to the extent required, shall be the following
organizations, their successors and assigns:
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Bloomberg Municipal Repositories
P.O. Box 840
Princeton, N.J. 08542-0840
Phone: (609) 279-3225
Fax: (609) 279-5962
Email: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (20 I) 346-0701
Fax: (201) 947-0107
Email: nrmsir@dpcdata.com
Interactive Data
Attn: Repository
100 Williams Street
New York, NY 10038
Phone: (212) 771-6899
Fax: (212) 771-7390
Email: NRMSIR@interactivedata.com
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3
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Standard & Poor's J. J. Kenny Repository
55 Water Street
45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
Email: nrmsicrepository@sandp.com
(F)
Any NRMSIRs that are established subsequently and approved by the SEe.
(G) A list of the names and addresses of all designated NRMSIRs as of any date may
currently be obtained by calling the SEC's Fax on Demand Service at 202/942-8088 and requesting
document number 0206.
SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision
in the Ordinance to the contrary, failure of the Issuer to comply with the provisions of this Disclosure
Certificate shall not be considered an event of default under the Ordinance; provided, however, any
Series 200 I Bondholder may take such actions as may be necessary and appropriate, including
pursuing an action for mandamus or specific performance, as applicable, by court order, to cause the
Issuer to comply with its obligations hereunder. For purposes of this Disclosure Certificate, "Series
2001 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Series 2001 Bonds (including persons
holding Series 200 I Bonds through nominees, depositories or other intermediaries), or (B) is treated
as the owner of any Series 2001 Bond for federal income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of the
information required herein to be disclosed may be incorporated by reference from other documents,
including official statements or debt issues of the Issuer of related public entities, which have been
submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document incorporated
by reference is a final official statement, it must be available from the MSRB. The Issuer shall clearly
identify each document incorporated by reference.
SECTION 7. DISSEMINATION AGENTS. The Issuer may, from time to time,
appoint or engage a dissemination agent to assist it in carrying out its obligations under this
Disclosure Certificate, and may discharge any such agent, with or without appointing a successor
disseminating agent.
SECTION 8. TERMINATION. The Issuer's obligations under this Disclosure
Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all
of the Series 2001 Bonds, or (B) the termination of the continuing disclosure requirements of the
Rule by legislative, judicial or administrative action.
4
. SECTION 9. AMENDMENTS. Notwithstanding any other provision of this
Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be
waived, if such amendment or waiver is supported by an opinion of counsel that is nationally
recognized in the area of federal securities laws, to the effect that such amendment or waiver would
not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver
had been effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule.
SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure
Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the
means of dissemination set forth in this Disclosure Certificate or any other means of communication,
or including any other information in its annual information described in Section 2 hereof or notice
of occurrence of a significant event described in Section 3 hereof, in addition to that which is required
by this Disclosure Certificate. If the Issuer chooses to include any information in its annual
information or notice of occurrence of a significant event in addition to that which is specifically
required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure
Certificate to update such information or include it in its future annual information or notice of
occurrence of a significant event.
SECTION 11. OBLIGA TED PERSONS. If any person, other than the Issuer,
becomes an Obligated Person (as defined in the Rule) relating to the Series 2001 Bonds, the Issuer
shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule
. applicable to such Obligated Person.
Dated as of June , 2001
ATTEST:
CITY OF CLEARWATER, FLORIDA
City Clerk
By:
Mayor-Commissioner
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5
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EXHIBIT E
COMMITMENTS FOR MUNICIPAL BOND INSURANCE POLICY AND
DEBT SERVICE RESERVE SURETY BOND
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E-l
,~ FSA
MUNICIPAL BOND INSURANCE COMMITMENT
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FINANCIAL SECURITY ASSURANCE INC. ("Financial Security. or "FSA") hereby commits to issue its Municipal Bond
Insurance Policy (the "Policy") relating to whole maturities of the debt obligations described in Exhibit A attached hereto
(the "Bonds"), subject to the terms and conditions set forth in this Commitment, of which Commitment Exhibit A is an
integrated part, or added hereto (the "Commitment"). To keep this Commitment in effect after the Expiration Date set forth
in Exhibit A attached hereto, a request for renewal must be submitted to Financial Security prior to such Expiration Date.
Financial Security reserves the right to refuse wholly or in part to grant a renewal.
THE MUNICIPAL BOND INSURANCE POLICY SHALL BE ISSUED IF THE FOllOWING CONDITIONS ARE SATISFIED:
1. The documents to be executed and delivered in connection with the issuance and sale of the Bonds shall not
contain any untrue or misleading statement of a material fact and shall not fail to state a material fact necessary in order
to make the information contained therein not misleading.
2. No event shall occur which would permit any underwriter or purchaser of the Bonds, otherwise required, not to be
required to underwrite or purchase the Bonds on the date scheduled for the issuance and delivery thereof ("Closing
Date").
3. There shall be no material change in or affecting the Bonds (including, without limitation, the security for the Bonds)
or the financing documents or the Official Statement (or any similar disclosure documents) to be executed and delivered
in connection with the issuance and sale of the Bonds from the descriptions or forms thereof approved by Financial
Security.
4. The Bonds shall contain no reference to Financial Security, the Policy or the insurance evidenced thereby except as
may be approved by Financial Security. BOND PROOFS SHAll HAVE BEEN APPROVED BY FINANCIAL SECURITY
PRIOR TO PRINTING. The Bonds shall bear a Statement of Insurance in the form provided by Financial Security.
. 5. Financial Security shall be provided with:
(a) Executed copies of all financing documents, any disclosure document (the "Official Statement") and the
various legal opinions delivered in connection with the issuance and sale of the Bonds (which shall be dated the Closing
Date and which, except for the opinions of counsel relating to the adequacy of disclosure, shall be addressed to Financial
Security or accompanied by a letter of such counsel permitting Financial Security to rely on such opinion as if such
opinion were addressed to Financial Security), including, without limitation, the approving opinion of bond counsel. Each
of the foregoing shall be in form and substance acceptable to Financial Security. Copies of all drafts of such documents
prepared subsequent to the date of the Commitment Cblacklined to reflect all revisions from Dreviouslv reviewed drafts)
shall be furnished to Financial Security for review and approval. Final drafts of such documents shall be provided to
Financial Security at least three (3) business days prior to the issuance of the Policy, unless Financial Security shall agree
to some shorter period.
(b) Evidence of wire transfer in federal funds of an amount equal to the insurance premium, unless alternative
arrangements for the payment of such amount acceptable to Financial Security have been made prior to the delivery date
of the Bonds.
(c) Standard & Poor's Ratings Group, Moody's Investors Service Inc. and Fitch (BCA, Inc. will separately present
bills for their respective fees relating to the Bonds. Payment of such bills should be made directly to such rating agency.
Payment of the rating fee is not a condition to release of the Policy by Financial Security.
6. Promptly after the closing of the Bonds, Financial Security shall receive three completed sets of executed
documents (one original and either (i) two photocopies (each unbound) or (ii) three compact discs).
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7. The Official Statement shall contain the language provided by Financial Security and only such other references to
Financial Security or otherwise as Financial Security shall supply or approve. FINANCIAL SECURITY SHAll BE
PROVIDED WITH SIX PRINTED COPIES OF THE OFFICIAL STATEMENT.
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EXHIBIT A
MUNICIPAL BOND INSURANCE COMMITMENT
TERM SHEET
Issuer:
City Of Clearwater, Florida
Principal Amount of Bonds Insured:
Not to Exceed $47,000,000
Name of Bonds Insured:
Infrastructure Sales Tax Revenue Bonds, Series 2001
Date of Commitment:
Expiration Date: Friday, July 6, 2001"
May 2, 2001
Premium:
.17% of total debt service on the Bonds Insured
Additional Conditions:
1. The amortization schedule for, and final maturity date of, the Bonds shall be acceptable to Financial
Security.
2. See attached Exhibits B-C.
Terms used in this Commitment and not otherwise defined shall have the meanings ascribed to them in the document
authorizing the issuance of and setting forth the terms for the Bonds described above (the "Ordinance").
FINANCIAL SECURITY ASSURANCE INC.
:&~r
"To keep the Commitment in effect to the Expiration Date set forth above, Financial Security must receive a duplicate
of this Exhibit A executed by an appropriate officer by the earlier of the date on which the Official Statement
containing disclosure language about Financial Security is circulated and ten days from the date of this Commitment.
The undersigned agrees that if the Bonds are insured by a policy of municipal bond insurance, such insurance shall
be provided by Financial Security in accordance with the terms of the Commitment.
CITY OF CLEARWATER, FLORIDA
Authorized Officer
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EXHIBIT B
Page 1 of 1
STANDARD OPINION REQUIREMENTS
1. Each of the Ordinance and any other transaction documents (the "Related Documents.) is a legal, valid and
binding obligation of the parties thereto, has been duly authorized, executed and delivered and is enforceable
in accordance with its terms.
2. There does not exist any action, suit, proceeding or investigation pending, or to the best of such counsel's
knowledge, threatened which if adversely determined, could (i) materially adversely affect (a) the financial
position of the Issuer, (b) the ability of the Issuer to perform its obligations under the Related Documents, (c)
the security for the Bonds, or (d) the transactions contemplated by the Related Documents or (ii) impair the
ability of the Issuer to collect or receive the tax revenues pledged to the Bonds.
3. Nothing has come to the attention of disclosure counsel which would cause them to believe that the final
Official Statement (excluding information provided by Financial Security), as of its date and the date of
issuance of the Policy, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
L:\LEGAL\MUNIS\ST A TES\FL\43531_G.doc
EXHIBIT C
Page 1 of 2
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ORDINANCE REQUIREMENTS
The Ordinance shall incorporate the following requirements in one section or article entitled "Provisions Relating to
Bond Insurance" (or the like), the provisions of which section or article shall be stated In the Ordinance to
govern. notwithstanding anything to the contrary set forth In the Ordinance:
(a) "Insurance Policy' shall be defined as follows: "the insurance policy issued by the Bond Insurer guaranteeing
the scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as
follows: "Financial Security Assurance Inc., a New York stock insurance company, or any successor thereto or
assignee thereof".
(b) The Insurer shall be deemed to be the sole holder of the Bonds insured by it for the purpose of exercising any
voting right or privilege or giving any consent or direction or taking any other action that the holders of the
Bonds insured by it are entitled to take pursuant to the Ordinance. The maturity of Bonds insured by the
Insurer shall not be accelerated without the consent of the Insurer.
(c) No waiver, modification, amendment or supplement to the Ordinance may become effective except upon
obtaining the prior written consent of the Insurer.
(d) Copies of any modification or amendment to the Ordinance shall be sent to Standard & Poor's Credit Markets
Services and Moody's Investors Service, Inc. at least 10 days prior to the effective date thereof.
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(e) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the
Ordinance and shall remain Outstanding and continue to be due and owing until paid by the Issuer in
accordance with the Ordinance. The Insurer shall, to the extent it makes any payment of principal of or
interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with
the terms of the Insurance Policy. The Ordinance shall not be discharged unless all amounts due or to
become due to the Insurer have been paid in full or duly provided for.
(f)
Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the business day prior to the related scheduled interest payment date or principal payment date
("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits
required under the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such
Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer
and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of
such deficiency, and the allocation of such deficiency between the amount required to pay interest on the
Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the
Insurer's Fiscal Agent by 12:00 noon, New York City time, on such Business Day by filling in the form of Notice
of Claim and Certificate delivered with the Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption installment, upon receipt of the
moneys due, the Paying Agent shall authenticate and deliver to affected Bondholders who surrender their
Bonds a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond
surrendered. The Paying Agent shall designate any portion of payment of principal on Bonds paid by the
Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity,
on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder,
whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the
name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal so paid
(without regard to authorized denominations); provided that the Paying Agent's failure to so designate any
payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by
the Issuer on any Bond or the subrogation rights of the Insurer.
The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the
Policy Payments Account and the allocation of such funds to payment of interest on and principal paid in
respect of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon
reasonable notice to the Paying Agent.
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Upon payment of a claim under the Insurance Policy the Paying Agent shall establish a separate special
purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and
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EXHIBIT C
Page 2 of 2
over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall
receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any
such amount in the Policy Payments Account and distribute such amount only for purposes of making the
payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders
in the same manner as principal and interest payments are to be made with respect to the Bonds under the
sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by
checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds
available to make such payments.
Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied
to satisfy any costs, expenses or liabilities of the Paying Agent.
Any funds remaining in the Policy Payments Account following a Payment Date shall promptly be remitted to
the Insurer.
(g) The Insurer shall be provided with all reports, notices and correspondence to be delivered under the terms of
the Ordinance.
(h) The notice address of the Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York, New
York 10022-6022, Attention: Managing Director -- Surveillance; Re: Policy No. Telephone: (212)
826-0100; Telecopier: (212) 339-3529. In each case in which notice or other communication refers to an
Event of Default, then a copy of such notice or other communication shall also be sent to the attention of
General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED."
(i) The Insurer shall be deemed to be a third party beneficiary to the Ordinance.
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EXHIBIT F
FORM OF GUARANTY AGREEMENT
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MUNICIPAL BOND DEBT SERVICE RESERVE
INSURANCE COMMITMENT
Issuer:
Date of Commitment: May 2,2001
City of Clearwater, Florida
Bonds Insured:
Infrastructure Sales Tax Revenue Bonds, Series 2001
Premium:
Expiration Date:
Friday, July 6, 2001
1.85% of Policy Limit
Policy Limit: A dollar amount equal to the Debt Service Reserve Requirement, as specified under the Ordinance
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), a stock insurance company. hereby commits to
issue its Municipal Bond Debt Service Reserve Insurance Policy (the "Reserve Policy"), in the form attached hereto
as Exhibit A, relating to the above-described debt obligations (the "Bonds"). subject to the terms and conditions
contained herein or added hereto. All terms used herein and not otherwise defined shall have the meanings ascribed
to them in the document setting forth the security for and authorizing the issuance of the Bonds (the "Ordinance").
To keep this Commitment in effect after the Expiration Date set forth above, a request for renewal must be submitted
to Financial Security prior to such expiration date. Financial Security reserves the right to refuse wholly or in part to
grant a renewal. To keep the Commitment in effect to the Expiration Date set forth above, Financial Security must
receive a duplicate of this Commitment executed by an appropriate officer of the Issuer by the date which is ten days
from the date of this Commitment.
THE RESERVE POLICY SHALL BE ISSUED UPON SATISFACTION OF THE FOLLOWING CONDITIONS:
1.
The documents to be executed and delivered in connection with the issuance and sale of the Bonds shall not
contain any untrue or misleading statement of a material fact and shall not fail to state a material fact
necessary in order to make the information contained therein not misleading.
2. No event shall occur which would permit any purchaser of the Bonds, otherwise required, not to be required to
purchase the Bonds on the date scheduled for the issuance and delivery thereof.
3. There shall be no material change in or affecting the Bonds (including, without limitation, the security for the
Bonds) or the financing documents or the Official Statement (or any similar disclosure documents) to be
executed and delivered in connection with the issuance and sale of the Bonds from the descriptions or forms
thereof approved by Financial Security.
4. Financial Security shall be provided with:
(a) A letter from Bryant, Miller and Olive, P.A. ("Bond Counsel") addressed to Financial Security to the
effect that Financial Security may rely on the approving opinion(s) of Bond Counsel as if such opinion(s) were
addressed to Financial Security.
(b) An opinion(s) of Bond Counsel, addressed to and in form and substance satisfactory to Financial
Security, as to the (i) due authorization, validity and enforceability of the authorizing document, which shall
incorporate the requirements set forth in Paragraph 5 hereof and (ii) the perfection of the security interests, if
any, created thereunder.
(c) Evidence of wire transfer in federal funds in an amount equal to the insurance premium, unless
alternative arrangements for the payment of such amount acceptable to Financial Security have been made
prior to the delivery date of the Reserve parlCy.
Page 1 of 3
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5.
The Ordinance shall include the following terms and conditions and shall be in fORn and substance acceptable
to Financial Security:
(a) The Issuer shall repay any draws under the Reserve Policy and pay all related reasonable expenses
incurred by Financial Security. Interest shall accrue and be payable on such draws and expenses from the
date of payment by Financial Security at the Late Payment Rate. "Late Payment Rate" means the lesser of (a)
the greater of (i) the per annum rate of interest, publicly announced from time to time by The Chase Manhattan
Bank at its principal office in the City of New York, as its prime or base lending rate ("Prime Rate") (any
change in such Prime Rate to be effective on the date such change is announced by The Chase Manhattan
Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Bonds and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be
computed on the basis of the actual number of days elapsed over a year of 360 days. In the event The Chase
Manhattan Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced
prime or base lending rate of such national bank as Financial Security shall specify.
Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate
(collectively, "Policy Costs") shall commence in the first month following each draw, and each such monthly
payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to Financial Security shall be cre<ited first to interest due, then
to the expenses due and then to principal due. As and to the extent that payments are made to Financial
Security on account of principal due, the coverage under the Reserve Policy will be increased by a like
amount, subject to the teRnS of the Reserve Policy.
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All cash and investments in the debt service reserve fund established for the Bonds (the "Reserve
Fund") shall be transferred to the debt service fund for payment of debt service on Bonds before any drawing
may be made on the Reserve Policy or any other credit facility credited to the Reserve Fund in lieu of cash
("Credit Facility"). Payment of any Policy Costs shall be made prior to replenishment of any such cash
amounts. Draws on all Credit Facilities (including the Reserve Policy) on which there is available coverage
shall be made on a pro-rata basis (calculated by reference to the coverage then available thereunder) after
applying all available cash and investments in the Reserve Fund. Payment of Policy Costs and
reimbursement of amounts with respect to other Credit Facilities shall be made on a pro-rata basis prior to
replenishment of any cash drawn from the Reserve Fund.
(b) If the Issuer shall fail to pay any Policy Costs in accordance with the requirements of Paragraph 5(a)
hereof, Financial Security shall be entitled to exercise any and all legal and equitable remedies available to it,
including those provided under the Ordinance other than (i) acceleration of the maturity of the Bonds or (ii)
remedies which would adversely affect owners of the Bonds.
(c) The Ordinance shall not be discharged until all Policy Costs owing to Financial Security shall have been
paid in full. The Issuer's obligation to pay such amounts shall expressly survive payment in full of the Bonds.
(d) In order to secure the Issuer's payment obligations with respect to the Policy Costs there shall be
granted and perfected in favor of Financial Security a security interest (subordinate only to that of the owners
of the Bonds) in all revenues and collateral pledged as security for the Bonds.
(e) The additional bonds test in the Ordinance shall expressly provide for at least one times coverage of the
Policy Costs then due and owing.
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(f) The Ordinance shall require the Trustee to ascertain the necessity for a claim upon the Reserve Policy
and to provide notice to Financial Security in accordance with the terms of the Reserve Policy at least five
business days prior to each date upon which interest or principal is due on the Bonds. Where deposits are
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required to be made by the Issuer with the Trustee to the debt service fund for the Bonds more often than
semi-annually, the Trustee shall be instructed to give notice to Financial Security of any failure of the Issuer to
make timely payment in full of such deposits within two business days of the date due.
6.
The Reserve Policy shall expire on the earlier of the date the Bonds are no longer outstanding and the final
maturity date of the Bonds.
7.
Any official statement or similar disclosure document relating to the Bonds shall contain only such references
to the Reserve Policy and Financial Security as we shall supply or approve.
8.
Financial Security shall insure the Bonds pursuant to its Commitment Letter dated May 2, 2001.
9.
Promptly after the issuance of the Reserve Policy, Financial Security shall receive a complete set of executed
documents implementing the requirements of this Commitment.
FINANCIAL SECURITY ASSURANCE INC.
!ltIk
To keep this commitment in effect to the Expiration Date set forth on the first page, Financial Security must receive by
the date which is ten days from the date of this Commitment a duplicate of this Commitment executed by an
appropriate officer of the Issuer.
The undersigned agrees that if the debt service reserve fund requirement for the Bonds is met .in whole or in part by
credit instrument, such credit instrument shall be a Reserve Policy provided by Financial Security in accordance with
the terms of this Commitment. The undersigned further acknowledges and agrees that execution of the Ordinance
constitutes an express instruction by the undersigned to legal counsel to deliver to Financial Security the opinions
required by paragraph 4 hereof (such instruction and opinion delivery requirements being a condition precedent to
issuance of the Reserve Policy hereunder).
Accepted as of
, 2001 by City of Clearwater, Florida.
BY:
Title:
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EXHIBIT E
COMMITMENTS FOR MUNICIPAL BOND INSURANCE POLICY AND
RESERVE POLICY
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