02-30
RESOLUTION NO. 02-30
A RESOLUTION PROVIDING FOR THE SALE OF NOT TO EXCEED
$60,000,000 WATER AND SEWER REVENUE BONDS, SERIES 2002; 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 FORM OF
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; PROVIDING CERTAIN
OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City of Clearwater, Florida (the "Issuer") has by Ordinance No. 3674-84
enacted by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 5355-93,
enacted on April 15, 1993, as amended and supplemented in Ordinance 6311-98, enacted November
5, 1998 and as further amended and supplemented in Ordinance 6915-01, enacted November 15,
2001 (collectively, the "Bond Ordinance") authorized the issuance of City of Clearwater, Florida,
Water and Sewer Revenue Bonds, Series [to be determined] in one or more series from time to time;
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. The
Water and Sewer Revenue Bonds, Series 2001, authorized by the Bond Ordinance are hereby re-
designated the Water and Sewer Revenue Bonds, Series 2002 being offered pursuant to the Bond
Ordinance and this resolution is hereby designated as the not to exceed $60,000,000 City of
Clearwater, Florida, Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds"), which
Series 2002 Bonds are hereby authorized to be issued. The proceeds ofthe Series 2002 Bonds shall
be used to pay the costs of capital improvements to the System, the costs of issuing the 2002 Bonds,
including any municipal bond insurance, and to fund a debt service reserve fund.
SECTION 2. PUBLIC SALE. There is hereby authorized to be sold pursuant to a public
sale not to exceed $60,000,000 City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series
2002.
Resolution No. 02-30
I
SECTION 3. SALE OF SERIES 2002 BONDS; REDEMPTION AND MATURITY
PROVISIONS. The Finance Director is hereby directed to arrange for the sale of the Series 2002
Bonds utilizing the electronic bid process of PARITY through the publication of the Summary
Notice of Sale ofthe Bonds in a newspaper regularly distributed in the City of Clearwater and in The
Bond Buyer, such publications to be on such date as shall be deemed by the Finance Director to be in
the best interest ofthe 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 Finance Director.
The Series 2002 Bonds shall be subject to optional redemption and shall bear maturities and
sinking fund amortizations as shall be subsequently determined by the Financial Director, upon
advice of the City's financial advisor and based on market conditions existing at the time, prior to the
publication ofthe Summary Notice of Sale as hereinafter approved.
Proposals for purchase of the Series 2002 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., Clearwater, Florida time, on such date and time as may be established by the
Finance Director 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, Water and Sewer
Revenue Bonds, Series 2002; 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 three separate subaccounts,
namely, the Series 2002 Cost oflssuance Account, the Series 2002 Project Account and the Series
2002 Capitalized Interest Account. Moneys held in the Series 2002 Cost oflssuance Account shall
be used to pay the costs of issuing and delivering the Series 2002 Bonds. Moneys held in the Series
2002 Project Account shall be used by the City to pay the costs of the Series 2002 Project. Moneys
in the Series 2002 Capitalized Interest Account, to the extent funded, shall be used to pay all or a
portion of the interest on the Series 2002 Bonds through December 1, 2003.
SECTION 5. DISPOSITION OF PROCEEDS OF SERIES 2002 BONDS. The
proceeds from the sale of the Series 2002 Bonds shall be deposited as follows:
(a) An amount equal to the accrued interest on the Series 2002 Bonds shall be deposited into
the Interest Account in the Bond Service Funds;
(b) An amount determined by the Finance Director to be necessary to pay the costs of issuing
the Series 2002 Bonds, including the premium due to the Bond Insurer, shall be deposited into the
Cost of Issuance Account in the Construction Fund to pay such costs;
Resolution No. 02-30
( c) An amount, if any, determined by the Finance Director to be necessary to pay interest on
the Series 2002 Bonds through December 1, 2003 shall be deposited into the Series 2002 Capitalized
Interest Account in the Construction Funds;
(d) An amount determined by the Finance Director to be necessary to increase the amount in
the Reserve Fund so that the amount on deposit therein equals the Reserve Requirement; and
(e) The remaining proceeds ofthe Series 2002 Bonds shall be deposited into the Series 2002
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 2002 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 Finance Director depending on the bidding method selected in
accordance with Section 3 hereof, incorporated herein by reference. The form of the Official Bid
Form shall be provided by the internet auction website selected by the Finance Director, and shall be
reasonably satisfactory to the Finance Director.
SECTION 7. BOOK ENTRY ONLY BONDS. It is in the best interest ofthe City and the
residents and inhabitants thereof that the Series 2002 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
2002 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.
SECTION 8. PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL
STATEMENT. The City Manager and Finance Director 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 City Manager and Finance
Director, containing a copy of the attached Notice of Bond Sale and to furnish a copy of such
Preliminary Official Statement to interested bidders. The City Manager and Finance Director are
authorized to deem final the Preliminary Official Statement prepared pursuant to this Section for
purposes of Rule 15c2-12 (the "Rule") ofthe Securities and Exchange Commission. Upon the award
ofthe Series 2002 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 2002 Bonds, the City Manager and the Finance Director 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 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.
Resolution No. 02-30
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 2002 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
Section.
SECTION 10. REGISTRAR AND PAYING AGENT. Wells Fargo Bank, Minnesota,
NA, Minneapolis, Minnesota, is hereby appointed as Registrar and Paying Agent for the Series 2002
Bonds.
SECTION 11. MUNICIPAL BOND INSURANCE POLICIES. Pursuant to the Bond
Ordinance, Financial Guaranty Insurance Company ("FGIC") 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 2002
Bonds. Selection of Financial Guaranty Insurance Company, a New York stock insurance company
as the Bond Insurer (as defined in the Bond Ordinance) is hereby ratified and confirmed and payment
for such Bond Insurance Policy from proceeds ofthe Series 2002 Bonds is hereby authorized. The
Issuer hereby accepts the terms, conditions and agreements relating to the Bond Insurance Policy in
accordance with the Municipal Bond Insurance Commitment attached hereto as Exhibit E and
incorporated herein. A statement of insurance is hereby authorized to be printed on or attached to the
Series 2002 Bonds for the benefit and information of the holders of the Series 2002 Bonds.
In addition to the covenants and agreements of the City previously contained in the Bond
Ordinance regarding the rights of the Bond Insurer, which are hereby incorporated herein, the City
hereby makes the following additional covenants and agreements for the benefit of the Bond Insurer
and the Holders ofthe Series 2002 Bonds while the Bond Insurance Policy insuring the Series 2002
Bonds are in full force and effect:
1. Definitions
"Bond Insurance Policy" shall mean the municipal bond new issue insurance policy issued by
the Bond Insurer that guarantees payment of principal of and interest on the Series 2002 Bonds.
"Bond Insurer" shall mean Financial Guaranty Insurance Company, a New York stock
insurance company, or any successor thereto.
Resolution No. 02-30
II. Reserve Fund Requirements
Any credit instrument provided in lieu of a cash deposit into the Reserve Fund, other than
one provided by the Bond Insurer, shall conform to the following requirements:
The Issuer may satisfy its obligation to fund the Reserve Fund in the amount of the
Requirement applicable to the Series 2002 Bonds by the deposit of a surety bond, insurance policy or
letter of credit as set forth below. In the event the Reserve Requirement is fulfilled by a deposit of a
credit instrument (other than a credit instrument issued by FGIC) in lieu of cash:
(a) A surety bond or insurance policy issued to the entity serving as trustee or paying
agent (the "Fiduciary"), as agent of the bondholders, by a company licensed to issue an
insurance policy guaranteeing the timely payment of debt service on the Series 2002 Bonds
(a "municipal bond insurer") may be deposited in the Reserve Fund to meet the Reserve
Requirement if the claims paying ability of the issuer thereof shall be rated "AAA" or "Aaa"
by S&P or Moody's, respectively.
(b) A surety bond or insurance policy issued to the Fiduciary, as agent of the
bondholders, by an entity other than a municipal bond insurer may be deposited in the
Reserve Fund to meet the Reserve Requirement if the form and substance of such instrument
and the issuer thereof shall be approved by FGIC.
(c) An unconditional irrevocable letter of credit issued to the Fiduciary, as agent of the
bondholders, by a bank may be deposited in the Reserve Fund to meet the Reserve Fund
Requirement if the issuer thereof is rated at least "AA" by S&P. The letter of credit shall be
payable in one or more draws upon presentation by the beneficiary of a sight draft
accompanied by its certificate that it then holds insufficient funds to make a required
payment of principal or interest on the bonds. The draws shall be payable within two days of
presentation of the sight draft. The letter of credit shall be for a term of not less than three
years. The issuer of the letter of credit shall be required to notify the Issuer and the
Fiduciary, not later than 30 months prior to the stated expiration date of the letter of credit, as
to whether such expiration date shall be extended, and if so, shall indicate the new expiration
date.
(d) If such notice indicates that the expiration date shall not be extended, the Issuer shall
deposit in the Reserve Fund an amount sufficient to cause the cash or permitted investments
on deposit in the Reserve Fund together with any other qualifying credit instruments, to
equal the Reserve Requirement on all outstanding Series 2002 Bonds, such deposit to be paid
in equal installments on at least a semi-annual basis over the remaining term of the letter of
credit, unless the Reserve Fund credit instrument is replaced by a Reserve Fund credit
instrument meeting the requirements in any of (a) through (c) above. The letter of credit
shall permit a draw in full not less than two weeks prior to the expiration or termination of
such letter of credit if the letter of credit has not been replaced or renewed. The Fiduciary
shall be directed to draw upon the letter of credit prior to its expiration or termination unless
Resolution No. 02-30
an acceptable replacement is in place or the Reserve Fund is fully funded in its required
amount.
(e) The use of any Reserve Fund credit instrument pursuant to this Paragraph shall be
subject to receipt of an opinion of counsel acceptable to FGIC and in form and substance
satisfactory to FGIC as to the due authorization, execution, delivery and enforceability of
such instrument in accordance with its terms, subject to applicable laws affecting creditors'
rights generally, and, in the event the issuer of such credit instrument is not a domestic entity,
an opinion of foreign counsel in form and substance satisfactory to FGIC. In addition, the use
of an irrevocable letter of credit shall be subject to receipt of an opinion of counsel
acceptable to FGIC and in form and substance satisfactory to FGIC to the effect that
payments under such letter of credit would not constitute avoidable preferences under
Section 547 of the U.S. Bankruptcy Code or similar state laws with avoidable preference
provisions in the event of the filing of a petition for relief under the U.S. Bankruptcy Code or
similar state laws by or against the issuer of the bonds (or any other account party under the
letter of credit).
(f) The obligation to reimburse the issuer of a Reserve Fund credit instrument for any
fees, expenses, claims or draws upon such Reserve Fund credit instrument shall be
subordinate to the payment of debt service on the Series 2002 Bonds and any parity bonds
then outstanding. The right of the issuer of a Reserve Fund credit instrument to payment or
reimbursement of its fees and expenses shall be subordinated to cash replenishment of the
Reserve Fund, and, subject to the second succeeding sentence, its right to reimbursement for
claims or draws shall be on a parity with the cash replenishment of the Reserve Fund. The
Reserve Fund credit instrument shall provide for a revolving feature under which the amount
available thereunder will be reinstated to the extent of any reimbursement of draws or claims
paid. If the revolving feature is suspended or terminated for any reason, the right of the
issuer of the Reserve Fund credit instrument to reimbursement will be further subordinated to
cash replenishment ofthe Reserve Fund to an amount equal to the difference between the full
original amount available under the Reserve Fund credit instrument and the amount then
available for further draws or claims. If (i) the issuer of a Reserve Fund credit instrument
becomes insolvent or (ii) the issuer of a Reserve Fund credit instrument defaults in its
payment obligations thereunder or (iii) the claims-paying ability of the issuer of the
insurance policy or surety bond falls below a S&P "AAA" or a Moody's "Aaa" or (d) the
rating ofthe issuer of the letter of credit falls below a S&P "AA", the obligation to reimburse
the issuer of the Reserve Fund credit instrument shall be subordinate to the cash
replenishment of the Reserve Fund.
(g) If (i) the revolving reinstatement feature described in the preceding paragraph is
suspended or terminated or (ii) the rating of the claims paying ability of the issuer of the
surety bond or insurance policy falls below a S&P "AAA" or a Moody's "Aaa" or (iii) the
rating of the issuer of the letter of credit falls below a S&P "AA", the Issuer shall either (A)
deposit into the Reserve Fund an amount sufficient to cause the cash or permitted
investments on deposit in the Reserve Fund to equal the Reserve Fund Requirement on all
Resolution No. 02-30
outstanding Bonds, such amount to be paid over the ensuing five years in equal installments
deposited at least semi-annually or (B) replace such instrument with a surety bond, insurance
policy or letter of credit meeting the requirements in any of 1-3 above within six months of
such occurrence. In the event (i) the rating of the claims-paying ability of the issuer of the
surety bond or insurance policy falls below "A" or (ii) the rating of the issuer of the letter of
credit falls below "A" or (iii) the issuer of the Reserve Fund credit instrument defaults in its
payment obligations or (iv) the issuer of the Reserve Fund credit instrument becomes
insolvent, the Issuer shall either (A) deposit into the Reserve Fund an amount sufficient to
cause the cash or permitted investments on deposit in the Reserve Fund to equal to Reserve
Requirement on all outstanding Bonds, such amount to be paid over the ensuing year in
equal installments on at least a monthly basis or (B) replace such instrument with a surety
bond, insurance policy or letter of credit meeting the requirements in any of (a) through (c)
above within six months of such occurrence.
(h) Where applicable, the amount available for draws or claims under the Reserve Fund
credit instrument may be reduced by the amount of cash or permitted investments deposited
in the Reserve Fund pursuant to clause (i) of the preceding subparagraph f.
(i) If the Issuer chooses the above described alternatives to a cash-funded Reserve Fund,
any amounts owed by the Issuer to the issuer of such credit instrument as a result of a draw
thereon or a claim thereunder, as appropriate, shall be included in any calculation of debt
service requirements required to be made pursuant to the Bond Ordinance for any purpose,
e.g., rate covenant or additional bonds test.
G) The Fiduciary shall be required to ascertain the necessity for a claim or draw upon the
Reserve Fund credit instrument and to provide notice to the issuer of the Reserve Fund credit
instrument in accordance with its terms not later than three days (or such longer period as
may be necessary depending on the permitted time period for honoring a draw under the
Reserve Fund credit instrument) prior to each interest payment date.
(k) Cash on deposit in the Reserve Fund shall be used (or investments purchased with
such cash shall be liquidated and the proceeds applied as required) prior to any drawing on
any Reserve Fund credit instrument. If and to the extent that more than one Reserve Fund
credit instrument is deposited in the Reserve Fund, drawings thereunder and repayments of
costs associated therewith shall be made on a pro rata basis, calculated by reference to the
maximum amounts available thereunder.
III. Default-Related Provisions
(a) The Issuer shall, to the extent there are no other legally available funds held under the
Bond Ordinance allocable to the Series 2002 Bonds which may be used to pay debt service
on the Series 2002 Bonds, use any funds then on deposit in the Construction Fund which are
allocable to the Series 2002 Bonds to pay principal of or interest on the Series 2002 Bonds in
the event of a payment default.
Resolution No. 02-30
(b) In determining whether a payment default has occurred or whether a payment on the
Series 2002 Bonds has been made under the Bond Ordinance, no effect shall be given to
payments made under the Bond Insurance Policy.
(c) Any acceleration of the Series 2002 Bonds or any annulment thereof shall be subject
to the prior written consent of the Bond Insurer (if it has not failed to comply with its
payment obligations under the Bond Insurance Policy).
(d) The Bond Insurer shall receive immediate notice of any payment default and notice of
any other default known to the Paying Agent or the Issuer within 30 days of the Paying
Agent's or the Issuer's knowledge thereof.
( e) F or all purposes of the Bond Ordinance provisions governing events of default and
remedies, except the giving of notice of default to Bondholders, the Bond Insurer shall be
deemed to be the sole holder of the Series 2002 Bonds it has insured for so long as it has not
failed to comply with its payment obligations under the Bond Insurance Policy.
(f) The Bond Insurer shall be included as a party in interest and as a party entitled to (i)
notify the Issuer, the Paying Agent, if any, or any applicable receiver of the occurrence of an
event of default and (ii) request the Paying Agent or receiver to intervene in judicial
proceedings that affect the Series 2002 Bonds or the security therefor. The Paying Agent or
receiver shall be required to accept notice of default from the Bond Insurer.
IV. Amendments and Supplements
Any amendment or supplement to the Bond Ordinance or any other principal financing
documents shall be subject to the prior written consent of the Bond Insurer. Any rating agency
rating the Series 2002 Bonds must receive notice of each amendment and a copy thereof at least 15
days in advance of its execution or adoption. The Bond Insurer shall be provided with a full
transcript of all proceedings relating to the execution of any such amendment or supplement.
22. Successor Paying Agent and Registrar
No resignation or removal of the Paying Agent or Bond Registrar shall become effective until
a successor has been appointed and has accepted the duties of Paying Agent or Bond Registrar, as
applicable. The Bond Insurer shall be furnished with written notice of the resignation or removal of
the Paying Agent or Bond Registrar and the appointment of any successor thereto.
VI. Defeasance Provisions
Only cash, direct non-callable obligations of the United States of America and securities fully
and unconditionally guaranteed as to the timely payment of principal and interest by the United
States of America, to which direct obligation or guarantee the full faith and credit of the United
Resolution No. 02-30
States of America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or defeased
municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing) shall
be used to effect defeasance of the Series 2002 Bonds unless the Bond Insurer otherwise approves.
In the event of an advance refunding, the Issuer shall cause to be delivered a verification report of an
independent nationally recognized certified public accountant. If a forward supply contract is
employed in connection with the refunding, (i) such verification report shall expressly state that the
adequacy of the escrow to accomplish the refunding relies solely on the initial escrowed investments
and the maturing principal thereof and interest income thereon and does not assume performance
under or compliance with the forward supply contract and (ii) the applicable escrow agreement shall
provide that in the event of any discrepancy or difference between the terms of the forward supply
contract and the escrow agreement (or the authorizing document, if no separate escrow agreement is
utilized), the terms of the escrow agreement or authorizing document, if applicable, shall be
controlling.
VII. Variable Rate Indebtedness
(a) For all purposes, variable rate indebtedness shall be assumed to bear interest at the
highest of: (i) the actual rate on the date of calculation, or if the indebtedness is not yet outstanding,
the initial rate (if established and binding), (ii) if the indebtedness has been outstanding for a least
twelve months, the average rate over the twelve months immediately preceding the date of
calculation, and (iii) (A) if interest on the indebtedness is excludable from gross income under the
applicable provisions of the Internal Revenue Code, the most recently published Bond Buyer
"Revenue Bond Index" (or comparable index ifno longer published) plus 50 basis points, or (B) if
interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable
maturities plus 50 basis points; provided, however, that for purposes of any rate covenant measuring
actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear
interest at the actual rate per annum applicable during the test period.
(b) In the case of variable rate issues in which financial covenants are based on the
synthetic fixed rate under a swap, utilization ofthe synthetic fixed rate under a Swap for purposes of
performing any required calculations under the applicable legal documentation shall be permitted
only if such documentation and the applicable Swap satisfy following the requirements:
Any Swap entered into in connection with the issuance or incurrence by the Issuer ofvariable
rate indebtedness secured with the Bonds by a parity lien on the net revenues shall meet the
following guidelines and, for purposes of calculating Bond Service Requirement and establishing
compliance with financial covenants under the Bond Ordinance shall be treated as follows:
(A) Long - Dated Swaps - Term or Weighted Average Maturity ofTen Years or More.
(a) The Swap provider must be rated at least A-fA3 or better by Standard & Poor's
Ratings Services and Moody's Investors Service (the "Initial Rating Requirement").
(b) Assuming satisfaction of the Initial Rating Requirement, and thereafter as long as the
long term indebtedness of the Swap provider or the claims paying ability of the Swap provider does
Resolution No. 02-30
not fall below Baa2 or BBB by either Standard & Poor's or Moody's (the "Minimum Rating
Requirement"), all interest rate assumptions for purposes of establishing or demonstrating
compliance with a financial covenant (e.g., rate covenant, reserve requirement, additional bonds test,
asset transfer test, etc.) may be based upon the synthetic fixed interest rate under the Swap.
Failure to maintain a Swap provider holding the Minimum Rating Requirement or, if the
issuer elects, failure to replace any such Swap provider by another Swap provider which holds the
Initial Rating Requirement within ten business days, will have the following effects: (l) compliance
with any required rate covenant for the preceding Fiscal Year will be based on the actual interest
paid on the Variable Rate Indebtedness during such Fiscal Year without regard to the Swap; (2) in
the case of any required debt service reserve fund, the amount required to be on deposit therein will
be re-calculated based on the formula described in Section 11 (VII), calculated as of the date of
original issuance of the variable rate indebtedness and any resulting deficiency will be restored
within the same one year restoration period established in the bond documentation for curing
Reserve Fund deficiencies; and (3) any "forward-looking" financial covenant based upon Bond
Service Requirement or Maximum Bond Service will be based upon the formula described in
Section II (VII) calculated as of the date the required calculation is made.
(B) Short Dated Swaps Having Terms or Weighted Average Maturities ofTen Years or Less,
Whereupon Related Bonds Automatically Convert to a Pre-Set Fixed Rate.
The embedded Swap provider must meet the Initial Rating Requirement. With respect to
financial covenants, the synthetic fixed rate based on the Swap may be utilized for purposes of
demonstrating or establishing compliance with the applicable covenant. Failure to maintain a Swap
provider holding the Minimum Rating Requirement during the embedded Swap period will require
replacement of the Swap provider within ten business days. Failure to replace will require re-
calculation of the applicable financial covenants in the manner outlined in VII (A)(b) above.
VIII. Reporting Requirements
The Bond Insurer shall be provided with the following information:
(a) Notice of any drawing upon or deficiency due to market fluctuation in the amount, if
any, on deposit, in the debt service reserve fund;
(b) Notice of the redemption, other than mandatory sinking fund redemption, of any of
the Bonds, or of any advance refunding of the Bonds, including the rpincipal amount, maturities and
CUSIP numbers thereof;
(c) Notice of any material events pursuantto Rule 15c2-12 under the Securities Exchange
Act of 1934; and
time.
(d) Such additional information as the Bond Insurer may reasonably request from time to
Resolution No. 02-30
IX. Notice Addresses
The notice addresses for the Bond Insurer and the Fiscal Agent shall be as follows: Financial
Guaranty Insurance Company, 125 Park Avenue, New York, New York 10017, Attention: Risk
Management; and State Street Bank and Trust company, N. A., 61 Broadway, New York, New York
10006, Attention: Corporate Trust Department.
SECTION 12. A WARD OF BIDS. The Finance Director is hereby authorized to accept
the bids for the Series 2002 Bonds. The City Manager and the Finance Director are hereby
authorized to award the sale of the Series 2002 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 6.0% on the Series 2002 Bonds. The City Manager and the
Finance Director are hereby authorized to award the sale of the Series 2002 Bonds as set forth above
or to reject all bids for the Series 2002 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. 98-54, adopted by the City Commission of the
City on November 5, 1998, with respect to the Series 1998 Bonds and Resolution No. 93-26,
adopted by the City Commission of the City on April 15, 1993, with respect to the Series 1993
Bonds, provisions of this Resolution shall control and supercede the inconsistent provisions of such
Resolutions.
SECTION 14. EFFECTIVE DATE. This resolution shall take effect immediately upon
adoption.
Passed and adopted by the City Commission of the City of Clearwater, Florida, this20tliay
of June , 2002.
CITY OF CLEARWATER, FLORIDA
Approved as to form:
l!dj~.(in' City Attorney
Attest:
~~~'
ia E. Goudeau, City Clerk
Resolution No. 02-30
-
EXHIBIT A
FORM OF
OFFICIAL NOTICE OF BOND SALE
$ *
CITY OF CLEARWATER, FLORIDA
WATER AND SEWER REVENUE BONDS, SERIES 2002
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., Clearwater, Florida 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 2002 Bonds
The Series 2002 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 July 1,2002. Principal
of the Series 2002 Bonds shall be paid to the registered owners at the designated corporate trust
office of Wells Fargo Bank, Minnesota, NA (the "Paying Agent" and "Registrar"), upon presentment
and surrender of the Series 2002 Bonds. Interest on the Series 2002 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 July 1 and December I, commencing December I, 2002. Interest will be
calculated on the basis ofa 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 2002 Bonds, payments of principal of, redemption premium, if any,
and interest on the Series 2002 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 2002 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 ofthe Series 2002 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 2002 Bonds.
Purchases of the Series 2002 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 2002 Bonds
to furnish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the Series
2002 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined).
Maturity Schedule
The Series 2002 Bonds will mature on December 1 of the following years in the following
principal amounts:
Series 2002 Bonds
Principal
Maturity Amount *
Maturity
Principal
Amount *
Maturity
Principal
Amount*
Mandatory Redemption Provisions
If the Successful Bidder designates any Series 2002 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 2002 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 I thereafter, from amounts deposited in the Redemption
Account in the Bond Service 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 2002 Bonds maturing on or before December 1, 20_ are not callable prior to their
maturity dates. The Series 2002 Bonds maturing after December 1, 20_ are subject to optional
redemption by the City, on and after December 1, 20_ as a whole or in part at anytime, from the
maturities selected by the City, and by lot within a maturity if less than an entire maturity is
redeemed, at the redemption prices (expressed as percentages of principal amount) set forth below,
together with accrued interest to the date of redemption:
Redemption Period
Price
December 1,2012 through November 30,2013
December 1, 2013 and thereafter
101%
100%
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 2002 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 2002 Bonds, no rebidding or recalculation
of the bid submitted with respect to such Series 2002 Bonds will be required or permitted. If
necessary, the total purchase price of the Series 2002 Bonds will be increased or decreased in direct
proportion to the ratio that the adjustment bears to the aggregate principal amount ofthe Series 2002
Bonds specified herein; and the Series 2002 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 2002
Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 2002 Bonds,
without taking into account any adjustment in the amount of Series 2002 Bonds set forth in the Bid
Maturity Schedule.
Desi~nation of Term Bonds
Bidders may specify that the annual Principal Amounts of the Series 2002 Bonds coming due
in any two or more consecutive years may be combined to form one or more maturities of Series
2002 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 2002 Bonds to
be selected by lot and redeemed at a price of par plus accrued interest in accordance with the
Resolution.
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Basis of Award
Proposals must be unconditional and only for all the Series 2002 Bonds. The purchase price
bid for the Series 2002 Bonds may include a discount (including underwriters' discount and original
issue discount) not to exceed two percent (2%) ofthe principal amount of the Series 2002 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 2002 Bonds and shall specify how
much of such purchase price is original issue premium. The Series 2002 Bonds will be insured by
Financial Security Assurance Inc. and the City will pay the bond insurance premium from Bond
proceeds. The purchase price bid for the Series 2002 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 2002 Bonds, to reject any or all bids and to
waive any irregularity or informality in any bid.
The Series 2002 Bonds will be awarded to the bidder (herein referred to as the "Successful
Bidder" as to the Series 2002 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 2002 Bonds. True
interest cost for the Series 2002 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 2002 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 1,2002.
The true interest cost shall be calculated from July 25, 2002, the expected closing date of the Series
2002 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
2002 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 2002 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 2002 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-
twentieth (1120) of one percent. No coupon interest rate specified for any maturity of the Series 2002
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 2002 Bonds bear the same rate of interest, provided
that all Series 2002 Bonds maturing on the same date shall bear the same rate of interest. A rate of
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interest based upon the use of split or supplemental interest payments or a zero rate of interest will
not be considered.
Paying Agent and Registrar
The Paying Agent and Registrar for the Series 2002 Bonds is Wells Fargo Bank, Minnesota,
NA, through its designated office in Minneapolis, Minnesota.
Security
Principal of and interest on the Series 2002 Bonds to be issued pursuant to Ordinance No.
6915-01, as supplemented, and all required sinking fund, reserve and other payments shall be
payable solely from the Net Revenues of Water and Sewer System 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 2002 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 2002 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 2002 Bonds are being issued to the costs of the
Projects, the costs of issuing the Series 2002 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 2002 Bonds.
Issuance of Series 2002 Bonds
The Series 2002 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 2002
Bonds are being issued pursuant to Ordinance No. 6915-01 enacted November 15, 2001 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 2002 Bonds and a debt service reserve fund insurance policy for the Series
2002 Bonds in satisfaction of the Reserve Requirement has been obtained from Financial Guaranty
Assurance Company.
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Proposals
Proposals for the Series 2002 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 2002 Bonds must have arranged for a good faith deposit in the
amount of $ , 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 of the 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 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 2002 Bonds. Prior to the delivery of the Series 2002
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 2002 Bonds in book entry only form will be available for
delivery on July 25, 2002, 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 2002 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 2002 Bonds will be delivered to the Successful Bidder of the Series 2002 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 2002 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
A-6
of the managing underwriter, if any, connected with the Series 2002 Bonds; (b) the name and address
of any attorney or financial consultant who advised the City with respect to the Series 2002 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 2002 Bonds, including
any fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver
to the City at or prior to the time of delivery of the Series 2002 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 ofthe Series 2002 Bonds, to furnish the City
with such information concerning the initial prices at which a substantial amount ofthe Series 2002
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 2002 Bonds as part of their bid
in the following form:
"The City of Clearwater, Florida, is proposing to issue $ original
aggregate principal amount of Water and Sewer Revenue Bonds, Series 2002, for the
purpose of paying (i) the costs of the Projects, (ii) the costs of issuing the Series 2002
Bonds, (iii) the premium on the Bond Insurance Policy, if any 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. 6915-01. The final maturity date of the
Series 2002 Bonds is December 1, 2032, and the Series 2002 Bonds are expected to
be repaid over a period of thirty (30) years. At a forecasted average interest rate of
_ % per annum, total interest paid over the life of the Series 2002 Bonds will be
$ . The source of repayment or security for this proposal is the Net
Revenues (as defined in the Ordinance) and moneys and investments held in the
funds created under the said Ordinance. Authorizing the Series 2002 Bonds will
result in $ not being available to finance 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 2002 Bonds."
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Legal Opinion
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 2002
Bonds is not includable in the gross income of individuals, however, interest on the Series 2002
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 2002 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 of SEC Rule 15c2-12(b)(l) (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 2002 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.
It is not the intention or the expectation of the City to print the name(s) of the Successful
Bidder as to the Series 2002 Bonds on the cover of the Official Statement.
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 2002 Bonds,
but neither the failure to print such number on any Series 2002 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 2002 Bonds in accordance with its agreement to purchase the Series 2002 Bonds.
All expenses in relation to the printing ofCUSIP numbers on the Series 2002 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
A-8
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
Isl Brian J. Aungst
Mayor-Commissioner
A-9
EXHIBIT B
FORM OF
SUMMARY NOTICE OF SALE
CITY OF CLEARWATER, FLORIDA
Infrastructure Sales Tax Revenue Bonds
Series 2002
NOTICE IS HEREBY GIVEN, that bids will be received by the City Manager and the
Finance Director of the City of Clearwater, Florida, electronically through PARITY, subject to the
provisions of the Official Notice of Bond Sale.
Sale Date:
,2002
Time:
11 :00 a.m., E.D.S.T.
Bonds Dated: July 1, 2002
Maturities:
Payable December 1 in the years and amounts as follows:
Series 2002 Bonds
Principal
Maturity Amount*
Maturity
Principal
Amount*
Maturity
Principal
Amount *
Interest
Payment Dates:
Payable June 1 and December 1, commencing December 2002.
Legal Opinion:
Bryant, Miller and Olive, P.A.,
Tallahassee, Florida
For copies of the Official Notice of Bond Sale and the Preliminary Official Statement ofthe 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.
B-1
EXHIBIT C
FORM OF PRELIMINARY OFFICIAL STATEMENT
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NEW ISSUE - FULL BOOK-ENTRY
Ratings: Fitch:
Moody's:
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In the opinion 01 Bond Counsel, assuming continuing compliance by the City with vuriou~'
covenal/ts in the Ordinunce (herein defined), under existing statutes. regulations and judicia! decisiol/s,
fhe interest 01/ the Series 2002 BOl/ds lI'i/l he exduded (1'0/11 gross iI/come /;,1' (ederell il1,'ol1le lux I'UlpO.\,'.\
to Ihe owners thereof The Series ::(/(/2 BOl/dsure. under eXlsll1lg IUI\; UI/ti regulalions, ulso exempf 11'0111
il/langible taxes imposed pursual/tlo Chapler 199. FlOrida SWflIles See "Tax Exempfiol1" lIaelfl lor"
descriplion olalternalive minimum lUX Irealmenl and certain olher lax consequences 10 OIl'l/ers oFflle
Series 2002 Bonds.
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$58,000,000 ·
CITY OF CLEARW A TER, FLORIDA
\\'ater and S~"~r Rev~nue Bonds
Series 2002
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Dated: July I, 2002
Due: December I, as shown below
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The Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds") of the City of C1eaJWater, Florida
(the "City") are being issued in fully regIstered form and, when initially issued, will be registered to Cede & Co., as nominee
of The DeposItory Trust Company, New York, New York. Wells Fargo Bank, Minnesota, NA, Minneapolis. Minnesota,
IS acting as the Paying Agen! and Bond Registrar for the Sene:; 2002 Bonds. The Series 2002 Bonds will be purchased in
book-entry lOOn only, in the denomination of $5,000 or any inlegral multiple thereof There will be no physical delivery
of bond certificates to individual Bondholders. Interest on the Series 2002 Bonds will be payable semi-annually beginning
on December I. 2002 and on each June I and December I thereafter PrinCIpal of and premIum. If any. on the Senes 20()e
Bonds will be payable at malUrity or upon redemption pnor to maturity.
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The Series 2002 Bonds are subjec:tto redemption prior to maturity as described herein,
The Series 2002 Bonds are being issued for the purpose of (i) making fwxIs available with which to pay for the coslS
of expansions to the City's water and sewer system (the "System") (as further descnbed herein), (ii) funding a depOSIt to the
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b.:nelit of the Series 2002 Bonds and all Outstanding Panty Bonds. and (iii) paying .:erta," costs of Issuance of the Senes 2002
Bonds, including the mWlicipal bond insurance praruwn.
A commilmenl has been issued by Financial Guaranty Insurance Company. ("Financial Guaranty") FGIC to issue
a policy of mwlicipal bond Insurance which will insure the payment of the princIpal of and interest OIl the Series 2002 Bonds,
when due. Issuance of such policy will be at the option of the winning bidder (see enclosed Notice of Sale).. For a discussion
of the Iem1s and proVISIons of such policy, including the limitations thereof. see 'l-lJNICIPAL BOND INSURANCE" herein.
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MATURITY SCHEDULE
(See enclosed Notice of Sale)
(Accrued interest to be added)
ELECTRONIC BIDS FOR THE SERIES 2002 BO!'<DS WILL BE ACCEPTED
1\ .~CCORD.~'CE WITH THE OFFICl.~L ,"OTICE OF S.~LE
TheSeries 2002 Bonds are offered when, asand ifissued and accepted by the Underwriur subject 10 ,he approval oll~gality
by Bryant, Miller and Olive, P.A., Tallahas~'ee. Florida, Bond Counsel. Certain otller legal maners ,,'ill be passed upunjiJr ,lie
City by Palllela K. Akin, Esquire, City Anorney, and by Nabors, Giblin & :"ickerson, P.A.. Tampa. Florida. Di.~dosure C uun.~el
to tire City. Ball(' ufAmerica Securities LLe, Clearwater, Florida is serving as Financial Ad,'isor to the City. It is expected tllat
the Series 2002 Bonds, in definitive book-entry form, will be available for delivery through DTC in -,"/!II' York, New York on or
about July ,2002.
Julv 2002
. Pn:liminary. subject to ch.mgc.
CITY OF CLEARWATER, FLORIDA
ELECTED OFFICIALS
MAYOR - COMMISSIONER
Brian lungs!, Sr.
COMMISSIONERS
Frank Hibbard
Hoyt Hamilton
Whitney Gray
Bill Jonson
APPOINTED OFFICIALS
William B. Horne, II, City Manager
Pamela K.. Akin, Esq., City Anorney
Margaret L. Simmons, CPA, Financial Services Administrator
BOND COUNSEL
Bryant, Miller and Olive, P.A.
Tallahassee, Florida
FINANCIAL ADVISOR
Bane of America Securities LLC
CleaJWater, Florida
REGISTRAR AND PAYING AGENT
Wells Fargo Bank, Minnesota, NA
Minneapolis, Minnesota
No dealer, broker, salesman or other person has been authorized to give any information or to make
any representations, other than those contained in this Official Statement, in connection with the offering
of the Series 2002 Bonds described herein. and if given or made, such information or representations must
not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does
not constitute an offer to sell the Series 2002 Bonds or a solicitation of an offer to buy nor shall there be
any sale of the Series 2002 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 furnished by the City and
by other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness,
:lIld IS nnl 10 h\? cnnstrued as a representation or contract, by the Underwriter. The infonnation and
expressions of opinion herein are subject to change without notice and neither the dehery of the Official
Statement nor any sale made hereunder shall, under any circwnstances, create any implication that there
has been no change in the affairs of the City since the date hereof
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERMA YOVER-ALLOTOR
EFFECT TRANSACTIONS WHICH STABILIZE OR MA1NT AIN THE MARKET PRICE OF THE
SERIES 1998 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
The Series 2002 Bonds have not been registered with the Securities and Exchange
Commission under the Securities Act ofl933, as amended, nor has the Ordinance been qualified
under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in
such acts. The registration or qualification of the Series 2002 Bonds in accordance with
applicable provisions of the securities laws of the States, if any, in which the Series 2002 Bonds
have been registered or qualified and the exemption from registration or qualification in certain
other states cannot be regarded as a recommendation thereof. Neither these States nor any of
their agencies have passed upon the merits of the Series 2002 Bonds or the accuracy or
completeness of this Official Statement. Any representation to the contrary may be a criminal
offense.
IV
TABLE OF CONTENTS
Page
INTRODUCTORY STATEMENT. . . . . . .. I
THE SERIES 2002 PROJECTS .......... 3
DESCRIPTION OF THE SERIES 2002 BONDS
.................................... 4
General ............. . . . . . . . . . . . . . 4
Notice of Redemption ............... 6
Book-Entry Only System . . . . . . . . . . . .. 6
SECURITY FOR THE SERIES 2002 BONDS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
Series 2002 Bonds Not a Debt of the City
............................ II
Parity Bonds . . . . . . . . . .. 12
MUNICIPAL BOND INSURANCE 12
DEBT SERVICE REQUIREMENTS ..... 14
SOURCES AND USES OF FUNDS ..... 15
THE WATER AND SEWER SYSTEM .., 15
Water System .................... 15
Sewer System . . . . . . . . . . . . . . . . . . .. 18
Water and Sewer Capital Improvements
............................ 20
RATES, FEES AND CHARGES ........ 20
FINANCIAL STATEMENTS .......... 24
INVESTMENT POLICY OF THE CITY .. 25
LITIGATION .... . . . . . . . . . . . . . . . . . .. 25
RATINGS. . . . . . . . . . . . . . . . . . . . . . . . .. 26
TAX EXEMPTION .................. 26
Federal Income Tax Matters ......... 26
Tax Treatment of Original Issue DiscoWlt
. . . .. .. . . . . . . . . . . . . . . . .. .... 27
Florida Tax Matters. . . . . . . . . . . . . . .. 28
LEGAL OPINIONS . . . . . . . . . . . . . . . . .. 28
ENFORCEABILITY OF REMEDIES .... 29
FINANCIAL ADVISOR .............. 29
DISCLOSURE REQUIRED BY FLORIDA
BLUE SKY REGULATIONS. . . . . . . . . .. 29
ADVISORS AND CONSULTANTS . . . ., 30
CONTINUING DISCLOSURE ......... 30
CERTIFICATE CONCERNING OFFICIAL
STATEMENT. . . . . . . . . . . . . . . . . . . . . .. 31
MISCELLANEOUS . . . . . . . . . . . . . . . . .. 31
Appendices:
Appendix A General Description of the City and
Selected Statistics
Appendix B Excerpts from the City's
Comprehensive Annual Financial
Report for the F iscaJ Year Ended
September 30, 200 J
Appendix C Swnmary of Certain Provisions of
the Ordinance and Series 2002
Resolution
Appendix 0 Form of Continuing Disclosure
Agreement
Appendix E Form of Bond Counsel Opinion
Appendix F Form of Municipal Bond Insurance
Policy
v
OFFICIAL STATEMENT
$58,000,000*
CITY OF CLEAR\V A TEa, FLORIDA
WATER AND SEWER REVENUE BONDS, SERIES 2002
INTRODUCTORY STATEMENT
The purpose of this Official Statement, which includes the cover page, the Stunmary Statement and
the Appendices, is to provide informationconceming the City of Clearwater, Florida (the "City") and the
City's S58,000,000* Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds").
The Series 2002 Bonds are being issued for the purpose of (i) making capital improvements and
expansions to the City's water and sewer system (as fi.uther described herein, the "System"), and (ii) fimding
a deposit to the Debt Service Reserve Account for the benefit of the Series 2002 Bonds and all
Outstanding Parity Bonds, (iii) paying certain costs of issuance of the Series 2002 Bonds, including the
municipal bond insurance premium. The Series 2002 Bonds and the interest thereon are payable solely
from the Net Revenues derived from the operation of the System, as further described herein. The lien of
the Series 2002 Bonds on the Net Revenues is on a parity with the holders of the City's Outstanding Water
and Sewer Revenue Refimding Bonds, Series 1993 and the City's Outstanding Water and Sewer Revenue
Refunding Bonds, Series 1998 (the "Parity Bonds"), as further described herein. The scheduled payment
of principal of and interest on the Series 2002 Bonds will be insured by a municipal bond inswance policy
to be issued simultaneously with the delivery of the Bonds by Financial Guaranty as described herein. For
a discussion of the tenns and provisions of such policy. indudingthe limitations thereof, see "MUN1CIPAL
BOND INSURANCE" herein.
The Series 2002 Bonds will be issued pW'Sl..l3J1t to the authority of and in full compliance 'With (a)
the charter of the City, (b) the Constitution and the laws of the State of Florida, particularly Chapter 166,
Part II. Florida Statutes, and other applicable provisions oflaw, and (c) Ordinance No. 3674-84 enacted
by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 5355-93, enacted on April
15, 1993, as amended and supplemented in Ordinance 6311-98, enacted November 5, 1998 and as
further amended and supplemented in Ordinance 6915 -0 I , enacted November 15, 200 I (the "Ordinance")
and as further supplemented by Resolution 02-30, adopted by the City on JlUle 20, 2002 (the "Series 2002
Resolution" ).
Neither the Series 2002 Bonds nor the interest thereon constitute a general obligation or
indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation.
No ov.ller or owners of any Series 2002 Bonds shall ever have the right to compel the exercise of the ad
valorem taxing power of the City, or any other taxing power in any torm on any real or personal property
of the City, to pay the Series 2002 Bonds or the interest thereon. The City shall not be obligated to pay
the Series 2002 Bonds or any interest thereon except from the Net Revenues, in the manner provided in
the Ordinance.
A Reserve AccoWlt has been established for the benefit of the Series 2002 Bonds and the
outstanding Parity Bonds (as herein defmed). Upon issuance of the Series 2002 Bonds, the Reserve
AccoWlt will be fimded in an amoWlt equal to the Reserve Account Requirement for Series 2002 Bonds
and the Outstanding Parity Bonds.
The City covenants in the Ordinance to fix, establish and maintain such rates, and collect such fees,
rentals and other charges for the services and facilities of the System(as herein defmed) and revise the same
from time to time whenever necessary as will always provide Gross Revenues in each Fiscal Year sufficient
to pay (i) the Cost of Operation and Maintenance of the System in such Fiscal Year, (ii) 115% of the Bond
Service Requirement for such Fiscal Year on the Outstanding Series 2002 Bonds and on all Outstanding
Additional Bonds and Parity Bonds, plus (iii) 100% ofall reserve and other payments required to be made
pursuant to the Ordinance.
The City may issue Additional Bonds, payable on a parity from the Net Revenues with the Series
2002 Bonds and the Parity Bonds, for the purpose of refunding a part of the Outstanding Bonds, or
financing the cost of extensions, additions and improvements to the System and for the acquisition and
construction of, and extensions and improvements to, sewer and/or water systems which are to be
consolidated with the System and operated as a single combined utility, provided that, among other
requirements, certain earnings tests relating historical Net Revenues to the Maximum Bond Service
Requirement of all Bonds outstanding after the issuance of such Additional Bonds can be met. Such
historical Net Revenues may be adjusted by the Consulting Engineer as provided in the Ordinance.
Definitions of certain words and terms having initial capitals used herein and in the Ordinance are
contained in the "Swnma.ry of Certain Provisions of the Ordinance and the Series 2002 Resolution" in
Appendix C hereto.
The references, excerpts and summaries of all documents referred to herein do not pwport to be
complete statements of the provisions of such documents, and reference is directed to all such docwnents
for full and complete statements of all matters offact relating to the Series 2002 Bonds, the security for the
payment of the Series 2002 Bonds, and the rights and obligations of holders thereof. The infonnation
contained in this Official Statement involving matters of opinion or of estimates, whether or not so expressly
stated, are set forth as such and not as representations of fact, and no representation is made that any of
the estimates will be realized. Neither this Official Statement nor any statement which may have been made
verbally or in writing is to be construed as a contract with the holders of the Series 2002 Bonds.
2
THE SERIES 2002 PROJECTS
The Rate Study identified a need for approximately $158 million in capital projects for the System
for fiscal years 2001 through 2006 to be fimded with approximately $5.5 million of available operating
revenues after funding debt service, $22.4 million of Renewal and Replacement FlUld revenue and $130.1
million of revenue bond proceeds. (See also, "SECURITY FOR THE Series 2002 BONDS - Parity
Bonds". Following is the list of $53,776,000 in projects to be financed with the proceeds of the Series
2002 Bonds:
Project Component
Amount
Northeast Advanced Waste Water Treatment Carousel
Laboratory Building
Water Pollution Control Master Plan - Phase III
Pwnp Station Replacement
Reclaimed Water
Northeast Improvements
Water Treatment Plant
Sewer Interceptor Lines
Sewer Manholes & Gravity Lines
Water Disinfection Systems
Water Service Lines
Clearwater Harbor Sewer Line Relocation (JPA)
Clearwater Harbor Force Main (Bridge)
Clearwater Harbor Water Transmission Main Replacement
Water Supply & Treatment
Line Relocation - Capitalized
Meter/Backflow Prevention Device Repair/Change-out
WPC Master Plan Phase II
Sanitary Sewer Renewal & Replacement
A wr Facilities
Sanitary Sewer Relocation
Total
$ 315,600
2,198,960
1,700.040
4,560,000
7,253,920
7,079,020
6,250,000
1,781,000
500,000
1,400,000
1,000,000
550,000
1,440,560
1,848,480
1,951,000
1,709,200
275,000
1,200,000
8,218,000
545,220
2.000.000
$53,776,000
3
DESCRIPTION OF THE SERIES 2002 BONDS
General
The Series 2002 Bonds will be dated July I, 2002. The Series 2002 Bonds will bear interest at
the rates and mature on December I in the amoWlts and at the times set forth on the cover page of this
Official Statement. The Series 2002 Bonds are to be issued as fully registered bonds in denominations of
$5,000 or integral multiples thereof Interest on the Series 2002 Bonds will be payable on Decem~r I,
2002 and semiannually thereafter on JWle I and December I of each year, by check or draft mailed to the
registered owners, at their addresses as they appear on the registration books of the City maintained by
the Bond Registrar, as of the I 5th day (whether or not a business day) of the month preceding the interest
payment date (the "Record Date"). Owners ofS I ,000,000 or more in aggregate principal amoWlt of Series
2002 Bonds may receive interest by wire transfer, at the Owner's expense, to a bank account designated
in ",Titing by the Owner not later than the Record Date. Principal of, and premiwn if any, are payable at
maturity, or upon redemption prior to maturity, upon presentation and surrender thereof at the corporate
trust office of the Paying Agent. Wells Fargo Bank, Minnesota, NA, Minneapolis. Minnesota, is acting
as Paying Agent and Bond Registrar for the Series 2002 Bonds.
The Series 2002 Bonds will be initially issued in the form of a single fully registered Bond for each
maturity of the Series 2002 Bonds. Upon initial issuance, the ownership of each such Series 2002 Bonds
will be registered in the registration books kept by the Bond Registrar, in the name of Cede & Co., as
nomineeofThe Depository Trust Company. New York. New York ("DTC"). While held in book-entry
form, all payments of principal, interest and premium, if any, on the Series 2002 Bonds will be
made to DTC or the DTC Nominee as the sole registered owner of the Series 2002 Bonds and
payments to Beneficial Owners will be the responsibility of DTC and the DTC Participants as
described below. See "Book-EntIy Only System."
With respect to Series 2002 Bonds registered in the name of Cede & Co., as nominee of DTC,
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-EntIy 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 Ole Participant with respect to any ownership interest in the Series 2002 Bonds; (ii) the delivery to
any DIC 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 2002 Bonds, including any notice of
redemption; or (Iii) the payment to any DTC Participant or any other person, otherthana registered owner,
as shown in the registration books kept by the Bond Registrar, of any amount with respect to principal of,
premiwn, if any, or interest on the Series 2002 Bonds. The City, the Bond Registrar and the Paying Agent
may treat and consider the person in whose name each Series 2002 Bonds is registered in the registration
books kept by the Bond Registrar as the holder and absolute O\mer of such Bond for the purpose of
payment of principal of, premiwn, if any, and interest with respect to such Bond, for the pwpose 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, premiwn, if any, and interest on the Series 2002 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
4
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, premium,
if any, and interest on the Series 2002 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, premium, ifany, and interest
on the Series 2002 Bonds pursuant to the provisions of the Ordinance.
Mandatory Redemption Provisions
If the Successful Bidder designates any Series 2002 Bonds as tenn bonds as described under
"Designation ofTenn Bonds" in the Notice of Sa Ie, the following mandatory redemption provisions will
apply with respect to such designated tenn bonds:
The Series 2002 Bonds maturing on Delber I, 20_ will be subject to mandatory redemption
prior to maturity, selected by lot, or in suchmannerl's 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 Service FlU1d
established by the Ordinance, in the following years and amolU1ts as follows:
Year
AmOlU1t
Optional Redemption Provisions
The Series 2002 Bonds maturing on or before December I, 20_ are not callable prior to their
maturity dates. The Series 2002 Bonds maturing after December I, 20_ are subject to optional
redemption by the City, on and after December I, 20_ as a whole or in part at anytime, from the
maturities selected by the City, and by lot within a maturity ifless than an entire maturity is redeemed, at
the redemption prices (expressed as percentages of principal amOlmt) set forth below, together with
accrued interest to the date of redemption:
Redemption Period
Price
December 1, 20_ through November 30, 20_
December 1, 20_ through November 30, 20_
December I, 20_ and thereafter
As long as the book-entry-only system is used for detennining beneficial ownership of the Series
2002 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be responsible for
notifying the DTC Participants, who will in turn be responsible for notifying the Beneficial Owners (as such
terms are described below under the heading "Book-Entry Only System"). Any failure of Cede & Co. to
notify any DTC Participant, or of any DTC Participant to notify the Beneficial Owner of any such notice,
will not affect the validity of the redemption of the Series 2002 Bonds.
5
Notice of Redemption
Not more than 60 days and not less than 30 days prior to the expected redemption date, notice
of such redemption shall be filed with the Paying Agent and shall be mailed, postage prepaid to all
registered owners of the Series 2002 Bonds to be redeemed at their addresses as they appear on the
registration books. Failure to give such notice by mailing to any registered owner, or any defect therein,
shall not affect the validity of any proceeding for the redemption of other Series 2002 Bonds. Interest shall
cease to accrue on any Series 2002 Bonds duly called for prior redemption, after the redemption date, if
payment thereof has been duly provided.
Book-Entry Only System
The Series 2002 Bonds will be available in book-entry form only, in denominations of $5,000 or
any integral multiple thereof Purchasers of the Series 2002 Bonds will not receive certificates representing
their interests in the Series 2002 Bonds purchased. The Underwriter is to confirm original issuance
purchases with statements containing certain terms of the Series 2002 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 Depository Trust Company(IDTC"), New York, New York, will act as securities depository
forthe Series 2002 Bonds. The Series 2002 Bonds will be issued as fully-registered securities registered
in the name of Cede & Co. (DTC's partnership nominee) or such other name as maybe requested by an
authorized representative ofDTC. One fully-registered Series 2002 Bond will be issued for each matwity
of the Series 2002 Bonds, as set forth on the inside cover page hereof, and will be deposited with DTC
DTC, the world's largest depository, is a limited-pwpose trust company organized under the New
York Banking Law, a "bankingorganization"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 Unifonn
Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the
Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S.
and non-U. S. equity issues, corporate and municipal debt issues, and money market instruments from over
85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilities the post-
trade settlement among Direct Participants of sales and other securities transactions in deposited securities,
through electronic computerized book-entry transfers and pledges between Direct Participants' accounts.
This eliminates the need for physical movement of secwities certificates. Direct Participants include both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and
certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing
Corporation ("DTCC"). DTCC, in turn, is owned by a nwuber of Direct Participants of DTC and
Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation,
MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and
EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American
Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system
is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
6
companies. and clearing corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Panicipants"). DTC has Standard & Poor's highest rating:
AAA. The DTC Rules applicable to its Participants area on file with the Securities and Exchange
Commission. More infonnation about DTC can be found at www.dtcc.com.
So long as the book-entry only system is in effect, beneficial interests in the Series 2002 Bonds will
be available in book-entry fonn only, in the principal amount of $5,000 or any integral multiple thereof
Purchasers of beneficial interests in the Series 2002 Bonds will not receive certificates representing their
beneficial interests in the Series 2002 Bonds purchased. Each Underwriter is to confirm original issuance
pur~hases ofbeneficial interests with statements containing certain tenns of the Series 2002 Bonds in which
such beneficial interests are purchased.
Purchases of Series 2002 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Series 2002 Bonds on DTC's records. The ownership
interest of each actual purchaser of each Series 2002 Bonds ("Beneficial Owner") is in twn to be recorded
on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. Beneficial Owners are, however, expected to receive written confmnations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered into the transaction. Trnnsfers of
ownership interests in the Series 2002 Bonds are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Series 2002 Bonds, except in the event that use of the
book -entry system for the Series 2002 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2002 Bonds deposited by Direct Participants with DTC
are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative ofDTC. The deposit of Series 2002 Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2002 Bonds; DTC's
records reflect only the identity of the Direct Participants to whose accounts such Series 2002 Bonds are
credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain
respoIlSlble for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other collllmmications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
ThePaying Agent will make payments of principal of, premiwn, if any, and interest on the Series
2002 Bonds to DTC or such other nominee, as may be requested by an authorized representative or DTC,
as registered owner of the Series 2002 Bonds. DTC's practice is to credit Direct Participants' accounts
upon arcs receipt of funds and corresponding detail information from the City and the Paying Agent, on
payable date in accordance with their respective holdings shown on DTC's records. Payments by
Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts 0 f customers in bearer fonn or registered in "street name, " and
will be the responsibility of such Participant and not of DTC nor its nominee, the Paying Agent subject to
7
any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption
proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent,
disbursement of such payments to Direct Participants will be the responsibilityofDTC, and disbursement
of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
The City and the Paying Agent will send redemption notices to DTC. If less than all of the Series
2002 Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of
interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Series 2002 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under
its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights to those Direct Participants to whose
accounts Series 2002 Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
TIIE CITY AND TIffi PAYING AGENT WILL HAVE NO RESPONSIBILITY OR
OBLIGATION TO THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR TIffiPERSONS FOR
WHOM DTC PARTICIPANTS ACT AS NOMINEES WITH RESPECT TO THE SERIES 2002
BONDS FOR THE ACCURACY OF RECORDS OF DTC, CEDE & CO. OR ANY DTC
PARTICIPANT WITH RESPECT TO THE SERIES 2002 BONDS OR THE PROVIDING OF
NOTICEORPAYMENTOF PRINCIPAL, ORlNTEREST, OR ANY PREMIUM ON TIIESERIES
2002 BONDS, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR TIIE SELECTION OF
SERIES 2002 BONDS FOR REDEMPTION.
The City and the Paying Agent cannot give any assurances that DTC, DTC Participants or others
will distribute payments of principal of, premiwn, if any, and interest on the Series 2002 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.
For every transfer and exchange of beneficial interests in the Series 2002 Bonds, the Beneficial
Owner may be charged a sum sufficient to cover any tax, fee or other government charge that may be
imposed in relation thereto.
DTC may determine to discontinue providing its services with respect to the Series 2002 Bonds
at any time by giving notice to the City and the Paying Agent and discharging its responsibilities with respect
thereto WIder applicable law. Under such circumstances, in the event that a successor depository is not
obtained, Series 2002 Bonds are required to be printed and delivered. In addition, the City may determine
to discontinue the use of book-entry transfers through DTC (or any successor securities depository).
Under such circwnstances, certificated Series 2002 Bonds are required to be delivered as described
below.
In the event that the book-entry only system is discontinued., the following provisions will govern
the transfer and exchange of Series 2002 Bonds. The Series 2002 Bonds will be exchanged for an equal
aggregate principal amOWlt of corresponding bonds in other authorized denominations and of the same
8
series and maturity, upon surrender thereof at the principal corporate trust office of the Bond Registrar.
The transfer of any Series 2002 Bonds will be registered on the books maintained by the Bond Registrar
for such pwpose only upon the surrender thereof to the Bond Registrar with a duly executed written
instmment of transfer in fonn and with guaranty of signatures satisfactOl)' to the Bond Registrar, containing
written instructions as to the details of transfer of such Series 2002 Bonds, along with the social security
nwnber or federal employer identificationnwnber of such transferee. The City and the Bond Registrar may
charge the registered owners a swn sufficient to reimburse them for any expenses incurred in making any
exchange or transter after the first such exchange or transfer following the delivery of the Series 2002
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 swn sufliciem 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
2002 Bonds shall be delivered. Neither the City nor the Bond Registrar shall be required to register the
tmnsll:r or exchange 0 f any Series 2002 Bonds dwing the period commencing on the fifteenth da y (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 2002 Bonds, after such Series 2002
Bonds or any portion thereof has been selected for redemption.
9
SECURITY FOR THE SERIES 2002 BONDS
Net Revenues. l1le principal of and premiwn. ifany, and interest on the Series 2002 Bonds are
payable solely from and secured by an irrevocable first lien upon and pledge of the Net Revenues (as
hereinafter defined) derived and collected by the City from the operation of the water and sewer system
of the City (the "System"), on a parity with the Parity Bonds. "Net Revenues" are defmed by the Ordinance
to include all income or eamings, including any income from the investment of funds, derived by the City
from the operation of the System after deduction of current expenses, either paid or accrued, for the
operation. maintenance and repair of the System, but not including reserves for renewals and replacements,
for extraordinary repairs or any allowance for depreciation.
The Series 2002 Bonds do not constitute a general indebtedness of the City within the meaning of
any constitutional, statutory or charter provision or limitation. The principal of and interest on the Series
2002 Bonds and all required reserve and other payments shall be made solely from the Net Revenues. The
City shall never be required to levy ad valorem taxes on any property therein to pay the principal of and
interest on the Series 2002 Bonds or to make any of the required debt service, reserve or other payments,
and any failure to pay the Series 2002 Bonds shall not give rise to a lien upon any property of or in the City,
except the Net Revenues.
Rate Covenant. In the Ordinance, the City has covenanted to fix, establish and maintain such
rates and collect such fees, rentals and other charges for the services and facilities of the System and revise
the same from time to time whenever necessary, as will always provide Gross Revenues in each Fiscal Year
sufficient to pay the Cost of Operation and Maintenance of the System in such Fiscal Year, one hoodred
fifteen per centum (115%) of the Bond Service Requirement becoming due in such Fiscal Year on the
Outstanding Parity Bonds, on the outstanding Bonds and on all outstanding Additional Bonds, plus one
hoodred per centum (l 00%) of all reserve and other payments required to be made pursuant to this
Ordinance and the Original Ordinance. Such rates, fees, rentals and other charges shall not be reduced
so as to be insufficient to provide Gross Revenues for such purposes.
Reserve Account. The Ordinance creates a Reserve Account in a sum equal to and sufficient
to pay the Maximwn Bond Service Requirement on all outstanding Bonds becoming due in any ensuing
Fiscal Year. The Reserve Account will be fully funded after the issuance of the Series 2002 Bonds. No
further payments will be required to be made into such Reserve AccoWlt as long as there shall remain on
deposit therein a swn equal to the Maximum Bond Service Requirement on all outstanding Bonds becoming
due in any ensuing Fiscal Year.
Moneys in the Reserve Account shall be used only for the purpose of payment of maturing principal
of or interest on the Bonds when the moneys in the Sinking FWld are insufficient therefor. Interest earnings
on funds held in the Reserve ACCOWlt will be transferred to the Revenue FWld. In lieu of or in substitution
for all or any part of the required deposits to the Reserve Account, the City may provide for the deposit
of a surety bond or insurance policy from a reputable insurer in accordance with the provisions of the
Ordinance.
10
Any withdrawals from the Reserve Account will be subsequently restored from the first moneys
available in the Revenue Fund after all required current payments into the Sinking Fund and into the
Reserve Account, including all deficiencies for prior payments, have been made in full.
Additional Bonds. Additional Bonds, payable on a parity from the Net Revenues with the Series
~OO~ Bonds and the Parity Bonds. may be issued for the pwposes of refunding a part of the outstanding
Bonds or financing the cost of extensions, additions and improvements to the System and for the acquisition
and construction of. and extensions, additions and improvements to. sewer and/or water systems which are
to be consolidated with the System and operated as a single combined utility. Additional Bonds, other than
for refunding purposes, will be issued only upon compliance with all of the conditions set forth in the
Ordinance, including the following:
(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 System have been audited by qualified and
recognized firmofindependent certified public accountants; (b) based on such audited financial statement,
that the amount of the adjusted Net Revenues derived for the Fiscal Year preceding the date of issuance
of the proposed Additional Bonds or for any twelve (12) consecutive months during the eighteen (18)
months immediatelY.preceding the date of issuance of the Additional Bonds with respect to which such
certificate is made, as may be adjusted in accordance with the next succeeding paragraph; and (c) based
on such audited financial statement, that the aggregate amount of such Net Revenues, as adjusted, for the
period for which such Net Revenues are being certified is equal to not less than 120% of the Maximwn
Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Parity Bonds and the
Bonds issued under the Ordinance, if any, then Outstanding, and (il) on the Additional Bonds with respect
to which such certificate is made.
(2) Upon recommendation of the Consulting Engineers, the Net Revenues certified pursuant to (b)
in the previous paragraph may be adjusted by including: (a) 100% of the additional Net Revenues which
in the opinion of the Consulting Engineer would have been derived by the City from rate increases adopted
before the Additional Bonds are issued, if such rate increases had been implemented before the
commencement of the period for which such Net Revenues are being certified, and (b) 100% of the
additional Net Revenues estimated by the Consulting Engineer to be derived during the first full twelve
month period after the facilities of the System are extended, enlarged, improved or added to with the
proceeds of the Additional Bonds with respect to which such certificate is made. The adjustments
described in (b) of this paragraphmayonIy be made if the Net Revenues as adjusted under (a) of the prior
paragraph for the period for which such Net Revenues are being certified equals at least 1.00 times the
Maximwn Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds then
outstanding; and (ii) on the Additional Bonds with respect to which such certificate is made.
See Appendix C, "SlUlUIlaI)'ofCertain Provisions of the Ordinance and the Series 2002 Resolution
- Covenants of the Issuer - Issuance of Additional Bonds." See also "Parity Bonds" below under this
principal caption.
Series 2002 Bonds Not a Debt of the City
The Series 2002 Bonds shall not constitute a general obligation or indebtedness of the
Cit)' within the meaning of any constitutional, statutory or charter provision or limitation, and no
11
Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of
the City or taxation in any form of real or personal property therein for the payment of the
principal of and interest on the Series 2002 Bonds orto compel the City to pay such principal and
interest from any otherfunds of the City except the Net Revenues. The Series 2002 Bonds shall
not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Net
Revenues all in the manner provided in the Ordinance.
Parity Bonds
The City has issued its Water and Sewer Revenue Bonds, Series 1993 (the "1993 Bonds") in the
aggregate face arnOW'lt of$53,445,000, of which $19,435,000 will remain outstanding after July 1,2002.
The City has also issued its Water and Sewer Revenue Bonds, Series 1998 (the "1998 Bonds") in the
aggregate face arnOW'lt of$43,642,689.75,ofwhich$52,716,731 CompoW'ld Accreted Value will remain
outstanding as of December I, 2002. The 1993 Bonds and the 1998 Bonds rank on a parity with the
Series 2002 Bonds as to the lien and pledge of the Net Revenues and hereinafter referred to collectively
as the "Parity Bonds").
It is also anticipated that in order to complete the capital spending program recommended in the
Rate Study, the City will issue approximately $36,646,000 of Parity Bonds in 2003-/2004 and
approximately $41,771,000 of Parity Bonds in 2006.
t
MUNICIPAL BOND INSURANCE
The following information has been furnished by Financial Guaranty Insurance Company
("Financial Guaranty" orthe "Insurer") for use in this Official Statement. Reference is made
to Appendix F herein for a specimen of the Policy.
ConcWTently with the issuance of the Bonds, Financial Guaranty will issue its Municipal Bond New
Issue Insurance Policy (the "Policy") for the Bonds described in the Policy (as used under the heading, the
"Bonds"). The Policy unconditionally guarantees the payment of that portion of the principal or accreted
value (if applicable) of and interest on the Bonds which has become due for payment, but shall be W'lpaid
by reason ofoonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such
payments to State Street Bank and Trust Company, N .A., or its successor as its agent (the "Fiscal Agent"),
on the later of the date on which such principal or accreted value (if applicable) and interest is due or on
the business day next following the day on which Financial Guaranty shall have received telephonic or
telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from
an owner of Bonds or the Paying Agent of the nonpayment of such arnoW'lt by the Issuer. The Fiscal Agent
will disburse such arnOW'lt due on any Bond to its owner upon receipt by the Fiscal Agent of evidence
satisfactory to the Fiscal Agent of the owner's right to receive payment of the principal, accreted value or
interest (as applicable) due for payment and evidence, including any appropriate instnunentsofassignment,
that all of such owner's rights to payment of such principal, accreted value or interest (as applicable) shall
be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any payment of
principal, accreted value or interest (as applicable) made to an owner of a Bond which has been recovered
from such owner plU'Suant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance
with a final, nonappealable order of a court having competent jurisdiction.
12
The Policy is non-cancellable and the premiwn will be fully paid at the time of delivery of the Bonds.
The Policy covers failure to pay principal or accreted value (if applicable) of the Bonds on their respective
stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fuOO
redemption, and not on any other date on which the Bonds may have been otherwise called for redemption,
accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated
date for its payment.
Generally, in connection with its insurance of an issue of mW1icipal securities, Financial Guaranty
requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders
of such securities upon the occurrence of an event of default without the consent of such holders. and that
such holders may not exercise such rights without Financial Guaranty's consent, in each case so long as
Financial Guaranty has not failed to comply with its payment obligations under its insurance policy; and (ii)
that any amendment or supplement to or other modification of the principal legal docwnents be subject to
Financial Guaranty's consent. The specific rights, if any, granted to Financial Guaranty in connection with
its insurance of the Bonds are set forth in the description of the principal legal docwnents appearing
elsewhere in this Official Statement. Reference should be made as well to such description for a discussion
of the circumstances, if any, under which the Issuer is required to provide additional or substitute credit
enhancement, and related matters.
This Official Statement contains a section regarding the ratings assigned to the Bonds and reference
should be made to such section for a discussion of such ratings and the basis for their assignment to the
Bonds. Reference should be made to the description of the City for a discussion of the ratings, if any,
assigned to such entity's outstanding parity debt that is not secured by credit enhancement.
The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article
76 of the New York Insurance Law.
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a
Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE
Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against
Financial Guaranty. Financial Guaranty is a monoline financial guaranty insurer domiciled in the State of
New York and subject to regulation by the State of New York Insurance Department. As of December
31, 2001, the total capital and surplus of Financial Guaranty was approximately $1.002 billion. Financial
Guaranty prepares financial statements on the basis of both statutory accounting principles and generally
accepted accounting principles. Copies of such financial statements may be obtained by writing to Financial
Guaranty at 125 Park A venue, New York, New York 100 17, Attention: Communications Department
(telephone nwnber: 212-312-3000) or to the New York State Insurance Department at 25 Beaver Street,
New York, New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau (telephone
number: 212-480-5187).
13
Fiscal Year
Ending
September 30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Totals
DEBT SERVICE REQUIREMENTS
Parity Bonds
Series 2002 Bonds
Principal Interest Total
14
Parity and
Series 2002
Bonds Total
Debt Service
Requirements
SOURCES AND USES OF FUNDS
SOURCES
Principal Amount of Series 2002 Bonds
Accrued Interest
$58,000,000*
Total Sources
USES
Deposit to Construction Fund
Deposit to Reserve Account
Deposit to Interest Account
Costs of Issuance including Underwriter's
Discount and Bond Insurance Premiwn
Total Uses
*
Preliminary, subject to change.
THE WATER AND SEWER SYSTEM
Water System
Water Supply. Water supply for the area served by the System is currently derived from existing
City wellfields and by the purchase of water from Pinellas County. The City has a bulk water purchase
agreement with Pinellas County that supplies up to 80 percent of the service area's water needs on an as
needed basis. The City currently has fifteen (15) production wells scattered throughout the service area,
each equipped with automatic control systems. The City water system and the Pinellas County water
system are interconnected at seven (7) locations.
Under the City's contract with Pinellas County, Pinellas County agrees to supply the City with
sufficient water for the designated service area, based on a formula set forth therein, and the City agrees
to purchase a minimum of 1 ,460,000,000 gallons of water from Pinellas County within each calendar year.
The cwrent contract rate is approximately $1.79 per thousand gallons. The rate is set by the Board of
County Commissioners and is based on a prorated share of revenue cost requirements of the Pinellas
COWlty water system including production and transmission costs required for the supply of water to the
Pine lias County water users. Pinellas County obtains approximately 70 million gallons per day or 100%
of its water supply from Tampa Bay Water, a Regional Water Supply Authority (liT ampa Bay Water") (the
successor to West Coast Regional Water Supply Authority). It is entitled under contract to obtain 100%
of its water needs per day from Tampa Bay Water. The City currently acquires approximately 10.5 to
11.0 million gallons per day from Pinellas COWlty.
15
The City's water distribution system consists of approximately 515 miles of water mains ranging
up to 20 inches in diameter. The distribution system contains nwnerDUS interconnections between piping,
making larger size mains wmecessary forexisting flow conditions. City water storage within the distribution
system consists of a series of ground-level water storage pwnping systems and elevated tank water storage.
The City CWTently has four 5-million gallon ground-level water storage reservoirs and three I-million gallon
elevated water storage tanks. The City's elevated storage tanks are all steel vessels designed to ride on
the distribution system. They provide immediate response to pressure and flow demands in the local areas.
Raw water within the City of Clearwater has historically been of adequate quality to meet minimum
regulatory requirements and has received treattnent only in the form of disinfection via cWorination with a
limited amOlmt of aeration for sulfide control. Additional treatment has been added in the form of corrosion
control (polyphosphate). This type of treatment to date has been compatible with the quality of bulk water
purchased from the County. Continual use of the City's wells has led to increasing mineralization of the City
supply, but there has been no danger to public health.
The following chart shows the average daily water flow on an annualized basis over the past six
years:
Source and Volume of Water Pumped
(in million gallons per day, averaged over tbe Fiscal Year)
FY
1996
1997
1998
1999
2000
2001
City Wells
3.528
3.448
3.140
3.070
3.047
3.067
County
10.90 I
10.412
11.540
12.094
11.528
11.260
Total
14.429
13.860
14.680
15.164
14.575
14.327
,
,
16
The table below illustrates the growth in number of customers over the past ten years.
Historical Growth in Number of Water Customers
(all figures are as of September of tbe year indicated)
Year Water Customers
1992 37,852
1993 37,996
1994 38,173
1995 38,278
1996 38,546
1997 38,294
1998 38,440
1999 39,931
2000 39,562
2001 40,167
17
The ten largest water customers and their 200 I water use including water revenues received are
sho\\ n in the table below:
Ten Largest Water Customers
Fiscal Year Ending September 30,2001
Name of User
1, Church of Scientology
2. Morton Plant Hospital
3. Clearwater Housing Authority
4. AGH Leasing LIP
5. Sheraton Sand Key
6. Pinellas County Schools
7. Lewis Real Estate, Inc.
8. 880 Mandalay Ave, Inc.
9. Lane Clearwater UP
10. Countryside Mall
Total
Source: City of Clearwater
Sewer System
Water Used
(in 1.000 Gallons)
831
528
443
355
341
270
237
229
218
200
3,652
Revenues
Produced
$285,250
215,039
144,467
105,436
105,861
124,879
75,809
79,101
71,321
85.447
$1,292,610
The City's sanitary sewage collection system ~ composed of slightly more than 321 miles of
connector mains, utilizing 79 lift stations. Three treabnent plants with a combined design capacity of28.5
mgd (million gallons per day) are on line and operational. These three plants are the Marshall Street
Facility, the Northeast Facility and the East Facility.
The wastewater pollution control plants, Marshall Street, constructed in the 1950's, East,
constructed in the 1960's and Northeast, constructed in the 1970's, have been expanded several times to
their current design capacities of ten millioo, five million and thirteen and one-half million gallons per day
respectively. All three plants utilize Advanced Wastewater Treatment processes. Their current systems
include nitrogen and phosphorous removal, anaerobic digestion, sludge thickening and provide highly
treated reclaimed water for private, commercial and mwricipal use. The Marshall Street and Northeast
plants also provide for sludge dewatering.
The Northeast Biosolids Management Facility was constructed in 1994. It is designed to process
thirty-three dry tons per day of sludge that meets EP A and Florida Department ofEnvironmentalProtection
sludge criteria.
18
years:
TIle follo\\ing chart shows the average daily sewage flow on an annualized basis over the last ten
Fiscal Year
A verage Sewage Flow
Annual Avg. Daily Flow
In MGD
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
15.8
15.2
14.7
16.1
15.8
14.9
17.9
16.5
15.4
14.4
The follo\\ing table illustrates the growth in nwnber of customers over the past five years.
Historical Growth in Nlher of Sewer Customers'
I
Sewer
Year Customers
1997 33,017
1998 33,174
1999 33,383
2000 33,075
2001 32,933
· All figures are as of 5.:ptember 30 of the year indicated.
19
The ten largest sewer customers and their 200 I water use including sewer revenues received are
shown in the table below:
Ten Largest Sewer Customers
Fiscal Year Ending September 30,2001
Sewer Used
Name of User
1. Church of Scientology
2. Morton Plant Hospital
3. Clearwater Housing Authority
4. AGH Leasing LIP
5. Sheraton Sand Key
6. Pinellas County Schools
7. Lewis Real Estate, Inc.
8. Lane Clearwater LIP
9. Bay Aristocrat Village
10. Lake Starcrest Apartments Ltd.
(in 1.000 Gallons)
664
506
440
351
291
270
237
198
189
177
Total
3,323
Source: City of Clearwater
Water and Sewer Capital Improvements
Revenues
Produced
$ 243,955
243,889
156,320
122,937
102,215
143,804
83,000
69,421
66,058
61. 766
$1,293,365
For the next five years the primary objectives of the capital improvement program are expansion
of the reclaimed water program, continued renewal and replacement as needed of the water, wastewater
collection and water pollution control systems and upgrading the water pollution control system to meet
regulatory requirements. The budgeted funding for fiscal years 200 1 through 2006 to meet the capital
improvement program objectives over that period is $157,610,000.
20
RATES, FEES AND CHARGES
Current Rates, Fees and Charges
The City uses a three-tiered rate structure for water and sewer usage. The base rate includes a
minimum usage for residential and nonresidential water rates. Any usage over the minimum is billed at one
rate per 1,000 gallons up to a designated level and at a second rate for usage over that level. For inigation.
there is a base rate, with no miniml.lI11, and a charge per 1,000 gallons of water usage up to a designated
level and a higher charge for usage over that amOlUlt. The sewer base rate includes a minimum usage and
a fixed charge per 1,000 gallons of water usage over the basic allowance. The minimum usage and second
tier usage level vary with the size of the meters. For Fiscal Year 200 I there were no changes to the three-
tiered rate structure for water or sewer usage. Effective October 1. 2000 the basis for billing was
converted from cubic feet to gallons. The following rates reflect an increase of 7% effective April I, 2002
for water and sewer services.
21
Residential and October I, October I, October I, October I April I
Nonresidential Water Rates (I) 1998(2) 1999 (2) 2000 (3) 2001 ill 2002(31
Size of Meter
Under I inch 7.08 7.08 7.53 8.07 8.64
I Inch 15.93 15.93 17.57 18.83 20.16
1.5 inch 237.39 237.39 251.00 269.00 28800
2 inch 550.47 550.47 584.83 626.77 67104
3 or 2 Inch manifold 849.60 849.60 901.09 965.71 1.032 92
4 inch 1.635.48 1,635.48 1,734.41 1,858.79 1,990.08.
6 inch 4.200.21 4,200.21 4,455.25 4,774.75 5,112.00
8 inch 7.080.00 7,080.00 7530.00 8,070.00 8.64000
(I) Rates in table are minImum monthly charges per meter size as of the date indicated
(2) Cubic Feet
(3) Gallons
Any usage over the minirrnnn is billed at one rate per 1,000 gallons up to a designated level and
at a second rate for usage over that level.
Rates (or Irrigation (Lawn) Meters (1)
October I,
~12J
October I ,
1999 ill
October I,
2000 (3)
October I,
2001 (3)
April I,
2002 (31
Size of Meter
Under I inch
I inch
1.5 inch
2 inch
3 or 2 inch manifold
4 inch
6 inch
2.52 2.52 2.69 2.88 3.08
7.57 7.57 8.07 8.64 9.24
37.85 37.85 40.35 43.20 46.20
105.99 105.99 112.99 120.96 129.36
209.45 209.45 223.27 239.04 255.64
403.76 403.76 430.41 460.80 492.82
1.218.85 1,218.85 1,299.29 \,391.04 1.487.64
( 1) Rates in table are base rates with no minimum
(1 ) Cubic feet
(2) Gallons
Since there is no minimum associated with the base rate, there is a charge per 1,000 gallons up to a designated level which
starts inuoediately. There is a higher charge for usage above that amount.
22
Sewer Rates (I) October I, October I. October I. October I, April I.
~ .l.222..ill 2000 (3) 2QQl (3) 2!m..Lll
Size of Meter
Under I inch 9.44 9.72 10.38 11.10 11.10
1 inch 21.24 2 \.87 24.22 25.90 27.72
IS inch 316.24 32562 34600 370.00 396.00
2 Inch 73396 755.73 S06.18 86210 92268
3 or 2 inch manifold 1.13280 1,166.40 1.242.14 1.328.30 1.42164
4 inch 2,180.64 2,24532 2.23986 2.556 70 2.73636
6 inch 5,60028 5,76639 6.1415 6,567.50 7.029()(J
8 inch 9,440.00 9,720.00 10.380.00 11.1 00.00 11,88000
Per 1,000 gallons of
water used over that 236 2.43 3.46 3.70 3.96
----- --~'-"--,- ------ " allowed in minimum
(I) Rates in table are minimum monthly charge per meter size as of date indicated
(2) Cubic Feet
(3) Gallons
--COVerage At Projected Maximum Annual
Debt Service By Historical Net Revenues
Fiscal Years Ended September 30
1997 1998 1999 2000 ~
Net Revenues Available for Debt 12,398,834 11,702,739 II.04-UI4 11,523,950 12,149,447
Service (1)
Projected Maximum Annual Debt 10,230,402 10,230,402 10,230,402 10,230,402 10,230,402
Service(2)
Coverage \.21 1.14 \.08 1.13 1.19
( I) Revenues used in calculation mclude mterest eanungs and exclude extraordinary gain. Expenses used exclude depreciation (and
similar llOI\-cash expenses), amortization of bond discount and issue costs, bond interest, sinking fund and reserve requirements and
extraordinary loss.
(2) Projected Maximum Annual Debt Service for Series 2002 Bonds and all Outstanding Parity Bonds.
Source: City of Clearwater.
Rate Study and Rate Increases
Burton & Associates, Jacksonville, Florida developed a preliminary revenue sufficiency analysis
for the City during Fiscal Year 2001 and consisted of a revenue sufficiency analysis for the period F Y 200 I
through FY 2006 (the "Forecast Period") to determine the adequacy of then-current rates to fund the
System's projected costs during the Forecast Period and to provide alternative financial management plans
13
for consideration by the City (the "Initial Report"). As a result of the Initial Report, the City enacted
Ordinance No. 6695-01 on March 1,2001 (the "Rate Ordinance"), which increased water and sewer rates
by 7% on each of July 1,2001, April 1 ,2002, January 1,2003, October 1,2003 and October 1,2004.
Following the enactment of the Rate Ordinance the infonnation in the analysis contained in the Initial Study
was updated in a report dated July, 2001 (the Initial Study as so updated is herein referred to as the "Rate
Study"). The Rate Study concludes that:
"The analysis demonstrates that the 7% rate increases adopted by the City through FY
2005 are sufficient to provide fimding for all system requirements. In addition, an increase
of approximately 7.25% will be required at the beginning of FY 2006 to fund expected
costs during that year."
FINANCL-\L STATEMENTS
The combined fmancial statements and Water and Sewer enterprise fimd financial statements of
the City at September 30, 200 1 and for the Fiscal Year then ended, appended hereto as Appendix B, have
been excerpted from the financial statements contained in the City's Comprehensive Annual Financial
Reports for the Fiscal Year ending September 30, 200 1.
INVESTMENT POLICY OF THE CIlY
Pursuant to the requirements of Section 218.45, Florida Statutes, the City adopted a written
investment policy which applies to all fimds held by or for the benefit of the City Commission (except for
proceeds ofbond issues which are deposited in escrow and debt service fimds and governed by their bond
docWTIents) and fimds of Constitutional Officers and other component tmits 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.
24
To enhance safety, the investment policy requires the diversification of the portfolio to reduce the
risk ofloss resulting from over-concentration of assets in a specific class of secwity. The investment policy
also requires the preparation of periodic reports for the City Commission of all outstanding secwities by
class or type, book value, income earned and market value as of the report date.
Notwithstanding the foregoing, moneys held in the fimds and accounts established under the
Ordinance may be invested only in Authorized Investments, as described in the Ordinance.
LITIGATION
In the opinion of the City Attorney, no legal proceedings are pending or threatened that materially
affect the City's ability to perform its obligations to the holders of~e Series 2002 Bonds or that materially
affect the Pledged Revenues.
In the opinion of the City Attorney, there is no litigation or controversy of any nature now pending
or, to the City's knowledge, threatened to restrain or enjoin the issuance, sale, execution or delivery of the
Series 2002 Bonds or in any way contesting the validity of the Series 2002 Bonds or any proceedings of
the City taken with respect to the authorization, sale or issuance of the Series 2002 Bonds or the pledge
or application of any moneys provided for the payment of the Series 2002 Bonds.
RATINGS
Moody's Investors Service and FitchIBCA, Inc. have assigned ratings of "_," "_" and "_,"
respectively. to the Series 2002 Bonds. with the understanding that. upon delivery of the Series 2002
Bonds, the municipal bond insurance policy will be issued by Financial Guaranty. Such ratings reflect only
the views of such organizations and any desired explanation of the significance of such ratings should be
obtained from the respective rating agency. Generally, a rating agency bases its rating on the information
and materials furnished to it and on investigations, studies and asswnptions of its own. There is no
assurance 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 agencies, if in the judgment of such rating agencies,
circwnstances so warrant. Any such downward revision or withdrawal of such ratings may have an
adverse effect on the market price of the Series 2002 Bonds.
25
TAX EXEMPTION
Federal Income Tax Matters
The Internal Revenue Code of 1986, as arnended (the "Code") establishes certain requirements
which must be met subsequent to the issuance and delivery of the Series 2002 Bonds in order that interest
on the Series 2002 Bonds be and remain excluded from gross income for purposes of federal income
taxation. Non-compliance may cause interest on the Series 2002 Bonds to be included in federal gross
income retroactive to the date of issuance of the Series 2002 Bonds regardless of the date on which such
non-compliance occurs or is ascertained. These requirements include. rot are not limited to. provisions
which prescribe yield and other limits within which the proceeds of the Series 2002 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 2002 Bonds.
In the opinion of Bond Counsel, asswning compliance with the aforementioned covenants, under
existing laws, regulations, judicial decisions and rulings, interest on the Series 2002 Bonds is excluded from
gross income for purposes offederal income taxation Interest on the Series 2002 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 2002 Bonds may be subject to the alternative mininum tax when any Series
2002 Bond is held by a corporation. The alternative minimum taxable iImme 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 2002 Bonds.
Except as described above, Bond COWlSel will express no opinion regarding the federal income
tax consequences resulting from the ownership of, receipt or accrual ofin1erest on, or disposition of Series
2002 Bonds. Prospective purchasers of Series 2002 Bonds should be aware that the ownership of Series
2002 Bonds may result in collateral federal income tax consequences, inchding (i) the denial of a deduction
for interest on indebtedness incurred or continued to purchase or cany Series 2002 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 2002 Bonds, (iii) the inclusion of interest on the Series 2002 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 2002 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 inclusionofinterest on the Series 2002 Bonds in "modified adjusted gross income" by recipients
of certain Social Secwity and Railroad Retirernent benefits for purposes of determining whether such
benefits are included in gross income for federal income tax purposes.
26
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF TIIE Series 2002 BONDS AND
THE RECEIPTOR ACCRUAL OF TIIEINTERESTTHEREON MA YHA VE ADVERSE FEDERAL
TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE REGISTERED
OWNERS. PROSPECTIVE Series 2002 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 2002 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 2002 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 2002 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 2002
Bonds.
Tax Treatment of Original Issue Discount
Under the Code, the difference between the matwity amount of the Series 2002 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 Series 2002 Bonds of the same matwity
was sold ~ "original issue discount." Original issue discount will accrue over the term of such Series 2002
Bonds at a constant interest rate compounded periodically. A purchaser who acquires such Series 2002
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 fromgross income for federal income tax purposes equal to
the original issue discount accruing during the period he holds such Series 2002 Bonds, and will increase
his adjusted basis in such Series 2002 Bonds by the amount of such accruing discount for purposes of
determining taxable gain or loss on the sale or other disposition of such Series 2002 Bonds. The federal
income tax consequences of the purchase, ownership and redemption, sale or other disposition of the
Series 2002 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. Holders of such Series 2002 Bonds should
consult their own tax advisors with respect to the precise determination for federal income tax purposes
of interest accrued upon sale, redemption or other disposition of Series 2002 Bonds and with respect to
the state and local tax consequences of owning and disposing of such Series 2002 Bonds.
Tax Treatment of Bond Premium
It is anticipated that the Series 2002 Bonds maturing in years _ through _ will be offered
at prices in excess of the principal amount thereof to achieve a yield based upon the call date rather than
the IllaUity date (the "callable Premium Bonds"). Under the Code, the excess of the cost basis of a
Callable Premium Bond over the amount payable at the call date of the Callable Premium Bond that
27
minimizes the yield to a purchaser of a Callable 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 call date of a Callable Premium Bond. 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 Callable Premium Bond. The amount of the amortizable bond premium
attributable to each taxable year is detennined 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.
Holders of the Series 2002 Bonds maturing in years _ through _ should consult their own
tax advisors with respect to the precise detennination for federal incorne tax purposes of the treatment of
bond premium upon sale, redemption, or other disposition of such Series 2002 Bonds.
Florida Tax Matters
On the date of delivery of the Series 2002 Bonds, Bond COWlSel will issue an opinion to the effect
that under existing statutes, regulafuns and judicial decisions, the Series 2002 Bonds and the income
therefrom are exempt from taxation under the laws of the State of Florida, except as to Florida estate taxes
imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by
Chapter 220, Florida Statutes, as amended.
LEGAL OPINIONS
Legalrnaners incident to the authorization, issuance and sale of the Series 2002 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 2002 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 2002 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 rnay not be readily available or may be limited. The various legal opinions to be delivered
concurrently with the delivery of the Series 2002 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
28
Bondholders under the Ordinance do not include the power to accelerate the principal of the Series 2002
Bonds.
FINANCIAL ADVISOR
The Financial Advisor for the City is Bane of America Securities LLC. with offices located at 1640
Gulf-to-Bay Boulevard, Clearwater. Florida 33755.
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 i has served only as a
conduit ~er 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 defauh 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 ofindustrialrevenue 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 fimds 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. .
ADVISORS AND CONSULTANTS
The City has retained advisors and consultants in connection with the issuance of the Series 2002
Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Series
2002 Bonds, identified as "Costs ofIssuance" 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 Secwities LLC, Clearwater, Florida,
as financial advisor (the "Financial Advisor") in connection with the preparation of the City's plan of
financing and with respect to the authorization and issuance of the Series 2002 Bonds. The fees of the
29
Financial Advisor will be paid from proceeds of the Series 2002 Bonds and such payment is contingent
upon the issuance of the Series 2002 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 CoullSel. 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 2002
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 withthe State ofFloridaRepository, ifand when created. The notices ofrnaterial events
will be filed by the City with the NRMSIR and with the State of Aorida Repository, ifand 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 withS.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.
CERTIFICATE CONCERNING OFFICIAL STATEMENT
Concurrently with the delivery of the Series 2002 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 2002 Bonds, does not
contain any untrue statements of material fact and does not omit to state a rnaterial 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 of the circumstances under which they were made, not
misleading.
30
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 2002 Bonds, the security for and the
repayment of the Series 2002 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 2002 Bonds.
The execution and delivery of this Official Statement by the Mayor-Commissioner of the City has
been duly authorized by the City Commission.
CITY OF CLEARW A TE~ FLORIDA
Brian 1. Aungst, Sr., Mayor-Commissioner
William B. Horne. II, City Manager
31
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
APPENDIX A
GENERAL INFORMATION
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 26.66 square
miles of land 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 ahnost 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 "dear 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 formof govenunent. 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.
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The City has approximately 1,796 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
PineUas 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 PineUas 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.
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
1he 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 322 miles of sanitary sewer lines. The Department of Public
Works maintains 304 miles of paved streets, 10.5 miles of unpaved streets, approximately 123 miles of
storm sewer mains, and approximately 322 miles of sanitary sewer rnains.
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Electric power is provided by Florida Power Corporation and telephone service is provided by
Verizon of Florida, Inc. Time Warner and Verizon provide cable television service under franchises 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 6,917 seat baseball and softball stadium, golf
course, civic and recreational centers, 7.4 miles of recreational paths, boat ramps and a 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 74.1 million tourists came to Florida during the year 200 1. This was
a slight decrease of 6% below the 69.8 million visitor estimate for the year 2000. More than 4. 72 million
visitors vacationed inPinellas County in2000, and 4.71 in the year 200 1, registering only a slight decrease.
Towismis a $2.5 billion industry annually to the County. Pinellas County is ranked seventh of the top ten
destinations in Florida and totaled 14.8% 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 and serves more than 110,000 students. During the 2001-2002 school year, Pinellas County
Schools expects enrollment of more than 16,293 compared to 15,978 during the 2000-2001 school year
with students attending 80 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 two secondary vocational center. Private
schools and academies are also located within or near the City limits. In addition, St. Petersburg 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
A-3
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 Defense
Electronics Systems, Inc. Owing the 1999 fiscal year IMRglobal Corp. ("IMR") occupied its new world
headquarters in downtown Clearwater. 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 2001 were $4,255,485 to the Employees' Plan and $1,098,990
to the Fireman's Plan, and were in accordance with actuarially detennined fimding requirements.
In addition, supplemental pensions exist for certified Police Officers and Firefighters, fimded 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 fimds assets provided by the
defined contributions.
[Remainder of page intentionally left blank]
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Demographic Information
Last Ten Fiscal Years
(a) (b) (c) (d) (e)
Pennanent Per Capita Median School Unemployment
Year Population Income ~ Enrollment Rate (%)
1992 99,856 22,958 42.3 11 ,921 5.4
1993 100,768 24,4 70 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
2001 108,787 31,658 43.0 16,293 2.6
Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending
September 30, 2001.
(a) 1992-2000, University of Florida, Bureau of Economic and Business Research; 2001 Bureau of the
Census.
(b) Data is for Pinellas County, but should also approximate Clearwater levels. 1992-1994, Florida
Trend Magazine; 1995-2001, University of Florida, Bureau of Economic and Business Research,
Florida Statistical Abstract.
(c) Pinellas County data, but should also approximate Clearwater levels. 1992, U.S. Bureau of the
Census; 1993, St. Petersburg Times Research Bureau; 1994, Sales and Marketing Management,
Survey of Buying Power; 1995-2001, University of Florida, Bureau of Economic and Business
Research, Florida Statistical Abstract.
(d) Clearwater Planning Department population pro rata estimate of Pinellas County School Board
Cowlty level data for public schools; 1992-2000, Pinellas County School District.
(e) Data is for Tampa/St. Petersburg MSA. 1992-1999 source of data is the Florida Bureau of Labor
Market Information; 2000-2001. 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.
A-5
Property Values, Construction, and Bank Deposits
Last Ten Fiscal Years
Commercial Construction Residentia 1 Construction Miscellaneous Construction'>)
Fiscal Year Number of Number of Number of Total Assessed Bank Deposits(CI
Year Permits Value Permits Value Permits Value Prooertv Value(b) lin OOO's)
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,OH 1 3,885 29,296,168 6,799 20,113,175 5,505,360,476 13,853,289
1994 1,831 37,164.437 3,HH2 49,950,41J 6,063 17.922.023 5.572,H51,512 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 27,35 \,853 5,884,592,007 12,522,122
1998 1.455 54,732,371 4,97K 47,045,558 5,266 17,820,469 6.049,571,226 13,293,565
:>
I 1999 1,690 48,849,409 5,544 95,713,246 307 7,506,580 6,349,561,534 13,137.180
0\
2000 2,698 176,0 I 0,Q21 5,573 30,814,807 35 229,K70 6,555,350,175 13,296,319
2001 2,267 152,059,409 5,390 34,084,137 324 15,763,545 7,IOK,IIO,272 13,314,203
Source: City of Clearwater, Floridll Comprehensive Annual FinllncHlI Report for period ending September 30,2001.
(a) Includes institutions, churches, seawalls, pools and non-valued building permits.
(b) Pinellas County Property Appraiser, values listed arc for year of collections.
(e) Includes balances in commercial, savings, savi ngs and loan bank ing institutions forPinellas County. Data from the Florida Bankers Association Branch DepOSit Report
of Florida Bank and Thrift Institutions.
City of Clearwater. Florida
Assessed and Estimated Actual property Valuations
Last Ten Fiscal years
Assessed Valuations (a) Percentaees
Assessed
Values to
Collection Non-Exempt Personal Other Total Total Total Estimated Yearly Increases
Year Real Estate Property Property(b) Taxable Exempt( c ) -AlL Market Taxable I21i.!
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 1,3] 7,255,941 5,505.360,470 100.0 0.2 0.5
1994 3,789,902,836 390,1141.880 569,338 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
:> 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
I
-.J 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
2001 4,657.074,110 550,845.380 867,947 5,208,787,437 1,899,322,835 7,108.110,272 100.0 6.2 6.8
--------------------
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30,200 I.
(a) Pinellas County Property Appraiser
(b) Railroad and Telegraph Companies
(c) Includes governmental, educational, qualified religious, literary, scientific, and health carc properties and special exemptions for individual property owners. Qualified
property owners are entitled to a $25,000 Homcstcad Exemption based on residency requirement.
Property Tax Levies and Collections
Last Ten Fiscal Years
Percent Percent of
of Total Delinquent
Current Percent of Delinquent Collect ions Outstanding Taxes to
Fiscal Total Tax Levy Tax Total Tax To Current Delinquent Current
.Ylli. Tax Levv Colleetionsi a I Collected Collections Collections Levv Taxes Levv
1992 21.369,980 21,075,554 98.62 109,316 21,IIl4,870 99.13 1,387,456 6.49
1993 2\ ,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 2\,758,172 102.24 946,874 445
1995 21.458,160 21,3118,692 99.68 159.9111 21,548,6\0 100.42 1156,443 3.99
1996 2 \,761 ,730 21,675.311 99.60 73,731 21,749,042 99.94 868,209 3.99
:>
, 1997 22,4\0,\81 22,281,502 99.43 80,253 22,361,755 99.78 914,383 4.08
00
1998 23.008,2\4 22,856,951 99.34 129,690 22,986,640 99.91 935,957 407
1999 23,95\ ,878 23,854,396 99.59 226,812 24,081,208 100.54 806,626 3.37
2000 26,998,3\8 26,876,461 99.55 106,800 26,983,261 99.94 821,683 3.04
2001 28,664,112 28,567,429 99.66 77,716 28,645,145 99.93 840,651 2.93
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 200 I.
(a) Collections are reported at the gross amount before any discount allowances.
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
~ ~ ment(a) Board County District Services ~ Th!ill
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.] 663
1996 5.1158 1.000 9.3290 5.140 .6697 .752 1.6561 24.0366
1997 5.1158 1.000 9.1760 5.510 .697 .741 1.6561 23.8686
:>
I 1998 5.1158 1.000 9.1330 5.538 .6697 .713 1.6561 23.8256
\0
1999 5.1158 1.000 9.1100 5.538 .6501 .713 1.6561 23.7830
2000 5.5032 1.000 8.6660 5.854 .6501 .647 1.6572 23.9775
2001 5.5032 1.000 8.4330 6.0040 .6501 .747 1.6562(b) 23.9935
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 2001.
(a) A separate taxing district established by referendum which affects only downtown properties.
(b) Other includes Pinellas County Planning Council (.0225); Juvenile Welfare Board (.8117); SW Florida Water Management District (.4220);
Pinellas Anclote River Basin (.4000).
City of Clearwater, Florida
Principal Taxpayers*
Year Ended September 30,2001
Percentage
to Total
Assessed Assessed
Taxpayers Type of Business Value* Value
J 1.87%
Bellwether Prop. LP Ltd. Shopping Center $ 86,861.400
Grand Reserve at Park Apartment Complex 25,528,600 0.55
Excel Realty Trust, Inc. Shopping Center 24,834,100 0.53
Taylor, John S. III Landowner 24,352.900 0.52
Branch Sunset Association Shopping Center 23,147,800 0.50
Clearwater Land Co. Adult Congregate Facility 31,486,700 0.68
Sand Key Association Ltd. Hotel 21,774.500 0.47
Northwood Plaza Shopping Center 19,966,500 0.43
ZOM Bayside Arbors Ltd. Apartment Complex 19,032,900 0.41
Walmart Stores, Inc. Shopping Center 16.865.1 00 0.36
Subtotal 293,850,500 6.31
All Others 4.363.223.610 ~
Total $4.657.074.110 lQQJill%
* Based on non-exempt real property assessed taxable values.
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending
September 30, 200 1 ~ Pinellas County Property Appraiser, 2000 taxrolls for 200 1 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 Value Per Capita
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 0 .00 0.00
2001 108,787 5,208,787 0 .00 0.00
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending
September 30, 2001.
(1) Values listed are for year of collections.
[Remainder of page intentionally left blank]
A-II
City of Clearwater, Florida
Computation of Legal Debt Margin
September 30,2001
Assessed Valuation of Non-Exempt Real Estate(a)
Times: Twenty Percent Limitation per City Charter
Equals Legal Indebtedness Limitation
Debt Subject to Indebtedness Limitation:
Revenue Bonds:
1985 Public Service Tax and
Bridge Revenue Bonds
1998 Water and Sewer Revenue Bonds
1993 Water and Sewer Revenue Bonds
1995 Improvernent Revenue Bonds
1996A Gas System Revenue Bonds
1997 Gas System Revenue Bonds
1998 Gas System Revenue Bonds
1999 Stormwater System Revenue Bonds
2001 Infrastructure Sales Tax Revenue Bonds
Notes, Mortgages and Contracts
Totals
Legal Indebtedness Margin
Gross Debt
$ 415,000
49,900,001
24,600,000
9,770,000
8,445,000
12,865,000
7,930,000
7,395,000
46,445,000
14.095.211
$181.860.212
Less Sinking
Fund Assets
$ 171,947
4,439,422
9,037,666
126,667
7,083
40,833
2,917
95,455
o
o
$13.921.990
$4,657,074, II 0
x .20
$ 931.414.822
Net Debt
Subject to
Limitation
$ 243,053
45,460,579
15,562,334
9,643,333
8,437,917
12,824,167
7,927,083
7,299,545
46,445,000
14.095.211
$167.938.222
$763.476.600
Source:
City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending
September 30,2001.
(a) Valuation listed is from 2000 tax year for 2001 collections.
A-12
'"
~~
~
City of Clearwater, Florida
Computation of Direct and Overlapping Debt
September 30, 2001
Govenunental Unit
Net Debt
Outstanding
Percent
Amount
City of Clearwater
$
100%
$
Pinellas County School Board
$46,960,000
14%
$6,574,400
(a) Applicable Net Debt Percentage is based on ratio of City to County Taxable values for 200 I
collections ($4,657,074,110/$34,363,584,750).
A-13
APPENDIX 8
EXCERPTS FROM THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30. 2001
A-I
APPENDIX C
SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE AND THE SERIES
2002 RESOLUTION
A-2
APPENDIX D
FORM OF CONTINUING DISCLOSURE AGREEMENT
A-3
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 $58,000,000 Water and
Sewer System Revenue Bonds, Series 2002 (the "Series 2002 Bonds"). The Series 2002 Bonds are being
issued pursuant to Ordinance No. 3674-84 enacted by the City on August 2, 1984, as amended and
supplemented (the "Original Ordinance") and Ordinance No. [ ] enacted by the City on July,
2002, as amended and supplemented (the "Series 2002 Ordinance") (collectively the Original Ordinance
and the 2002 Ordinance are 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 2002 Bondholders
and in order to assist the original underwriters of the Series 2002 Bonds in complying with Rule 15c2-
12(b)(5) promulgated by the Secwities and Exchange Commission ("SEC") pursuant to the Securities
Exchange Act of 1934 (the "Rule"). ,
;.
SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise
provided herein, the Issuer shall provide to all of the nationally recognized municipal secwities informaJion
repositories described in Section 4 hereof (the ''NRMSIRs''), and to any state infonnation depository that
is established within the State of Florida (the "SID"), on or before June 30 of each year, commencing June
30, 1999, 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 infonmtion when it becomes available, but no later than one year
following the end of the Issuers Fiscal Year.
(A) the Issuers Comprehensive Annual Financial Report for the immediately preceding Fiscal
Year (the "CAFR"), which shall include the audited financial statements of the Issuer for the immedia1ely
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
(8) 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 2002 Bonds (as amended, the "Official Statement"), as set forth below:
1. Updates of the historical financial information set forth in the Official Statement
underthe principal captions "THE WATER AND SEWER SYSTEM" and liRA TES, FEES A. 'ID
CHARGES" for the then-immediately preceding five fiscal years.
D-l
2. Descriptionof any additional indebtedness payable in whole or in part from the Net
Re\'enues (as defined in the Ordinance).
3. Any other financial infonnation or operating data of the type included in the Official
Statement which would be material to a holder or prospective holders of the Series 2002 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" rreans 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 Secwities 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 2002 Bonds
or the Issuer's ability to satisfy its payment obligations with respect to the Series 2002 Bonds:
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(e) Unscheduled draws on the debt service reserve fund reflecting financial 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 2002 Bonds;
(G) Modifications to rights of Series 2002 Bondholders;
(H) Redemptions;
(I) Defeasances;
(1) Release, substitution, or sale of property securing repayment of the Series 2002 Bonds;
(K) Rating changes; and
(L) Notice of any failure on the part of the Issuer or any other Obligated Person (as defmed
herein) to meet the requirements of Section 2 hereof
0-2
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, i( in the judgment of the Issuer, such other
events are material with respect to the Series 2002 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 ifsuchevent would be material under applicable
federal secwities law to holders of Series 2002 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
informationdescribed in Sections 2 and 3 above, to the extent required, shall be the following organizations,
their successors and assigns:
(A)
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
Email: Munis@Bloornberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
Email: nrmsir@dpcdata.com
IT Interactive Data
Ann: NRMSIR
100 William Street
New York, New York 10038
Phone: (212) 771-6999
Fax: (212) 771-7390 (Secondary Market Information)
(212) 771-7391 (Primary Market Information)
Email: NRMSIR@FTID.com
0-3
Standard & Poor's 1. 1. Kenny Repository
55 Water Street
45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
Email: nnnsir_repository@sandp.com
State Information Depositories (SIDs)
Municipal Advisory Council of Texas
P.O. Box 2177
Austin, Texas 78768-2177
Phone: (512) 476-6947
Fax: (512) 476-6403
Municipal Advisory Council of Michigan
1445 First National Building
Detroit, Michigan 48226-3517
Phone: (313) 963-0420
Fax: (313) 963-0943
Ohio Mw1icipal Advisory Council
9321 Ravenna Road, Unit K
Twinsburg, OH 44087-2445
Phone: (330) 963-7444
Toll-free: (800) 969-0MAC (6622)
Fax: (330) 963-7553
(B) Any NRMSIRs that are established subsequently and approved by the SEe.
(C) 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.
SECfION 5. NOEVENTOFDEFAULT. Notwithstandinganyotherprovisioninthe
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 2002
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 2002 Bondholder" shall mean
D-4
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 2002 Bonds (including persons holding Series 2002 Bonds through nominees.
depositories or other intermediaries), or (B) is treated as the owner of any Series 2002 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, ifany, or the SEe. If the document incorporated by reference is a fmal 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 2002 Bonds, or (B) the termination of the continuing disclosure requirements of the Rule by
legislative, judicial or administrative action.
SECTION 9. AMENDMENTS. Notwithstanding any other provlSlon 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 aCCOl.U1t 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 inforrmtion 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 infonnation 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 infonnation or notice of occurrence of a significant event.
D-5
SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes
an Obligated Person (as defmed in the Rule) relating to the Series 2002 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 July , 2002
ATTEST:
CITY OF CLEARWATER, FLORIDA
By:
Mayor
City Clerk
D-6
APPENDIX E
FORM OF BOND COUNSEL OPINION
A-4
l
.
APPENDIX F
FORM OF MUNICIPAL BOND INSURANCE POLICY
A-5
Exhibit A
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-0001
-
FGIC.
A GE Capital Company
Municipal Bond
New Issue Insurance Policy
Issuer:
Policy Number:
Control Number: 0010001
Boods:
Financial Guaranty Insurance Company ("FinanciaE ,New York stock insurance company, in
consideration of the payment of the premium an~ect t terms of this Policy, hereby unconditionally and
irrevocably agrees to pay to State Stre~t B Company, N.A., or its successor, as its agent (the
"Fiscal Agent"), for the benefit of Bon , ortion of the principal and interest on the above-described
debt obligations (the "Bonds") which come Due for Payment but shall be unpaid by reason of
Nonpayment by the Issuer.
Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest becomes
Due for Payment or on the Business Day next following the day on which Financial Guaranty shall have
received Notice of Nonpayment, whichever is later. The Fiscal Agent wiII disburse to the Bondholder the face
amount of principal and interest which is then Due for Payment but is unpaid by reason of Nonpayment by the
Issuer but only upon receipt by the Fiscal Agent, in form reasonably satisfactory to it, of (i) evidence of the
Bondholder's right to receive payment of the principal or interest Due for Payment and (ii) evidence, including
any appropriate instruments of assignment, that all of the Bondholder's rights to payment of such principal or
interest Due for Payment shall thereupon vest in Financial Guaranty. Upon such disbursement, Financial
Guaranty shall become the owner of the Bond, appurtenant coupon or right to payment of principal or interest
on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including the
Bondholder's right to payment thereof.
This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason,
including the payment of the Bonds prior to their maturity. This Policy does not insure against loss of any
prepayment premium which may at any time be payable with respect to any Bond.
As used herein, the term "Bondholder" means, as to a particular Bond, the person other than the Issuer who, at
the time of Nonpayment, is entitled under the terms of such Bond to payment thereof. "Due for Payment"
means, when referring to the principal of a Bond, the stated maturity date thereof or the date on which the same
shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on
which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption),
acceleration or other advancement of maturity and means, when referring to interest on a Bond, the stated date
FOIC is a registered service mark used by Financial Guaranty Insurance Company W1der license from its parent company, FGIC CorpOfllliOll.
Fona 9000 (10/93) Page I on
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212)312-3000
(800) 352-0001
-
FGle.
A GE Capital Company
Municipal Bond
New Issue Insurance Policy
for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer to have provided
sufficient funds to the paying agent for payment in full of all principal and interest Due for Payment on such
Bond. "Notice" means telephonic or telegraphic notice, subsequently con tnned in writing, or written notice by
registered or certified mail, from a Bondholder or a paying age fo the Bonds to Financial Guaranty.
"Business Day" means any day other than a Saturday, Sunday or n ich the Fiscal Agent is authorized
by law to remain closed. ~ ~
In Witness Whereof, Financial Guaranty has cates. ~\;lto"be affixed with its corporate seal and 10 be
signed by its duly authorized officer in = ..~e effective and binding upon Financial Guaranty by
virtue of the countersignature of its duly '-::J' e resentative.
1J~ ~ Q~
President
Effective Date:
Authorized Representative
State Street Bank and Trust Company, N.A., acknowledges that it has agreed to perform the duties of Fiscal
Agent under this Policy.
~-
Authorized Officer
FGIC is a n:gislcred service mark used by FiIwlcial GIIIIranly Insurance Company under license from its parent company. FGIC Corporation.
Form 9000 (1M3) Page 2 of2
Financial Guaranty Insurance
Company
125 Park Avenue
New York. NY 10017
(212) 312-3000
(800) 352-0001
-
FGIC.
A GE Capital Company
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
Control Number: 0010001
It is further understood that the term "Nonpayment" in res~pct includes any payment of principal or
interest made to a Bondholder by or on behalf of the iSS~ s d which has been recovered from such
Bondholder pursuant to the United States Bankrupt~~ a trustee in bankruptcy in accordance with a
final, nonappealable order of a court having co~~ . tion.
NOTHING HEREIN SHALL BE CON~~D \t5w AIVE, ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE P . IF FOUND CONTRARY TO THE POLICY LANGUAGE,
THE TERMS OF THIS ENOORSEMEN UPERSEDE THE POLICY LANGUAGE.
In Wibless Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial Guaranty
by virtue of the countersignature of its duly authorized representative.
13~ ~ Q,e~
President
Effective Date:
Authorized Representative
AckDowledged as of the Effective Date written above:
~~--
Autlaorlzed Officer
State Street Bank and Trust Company, N.A., as Fiscal Agent
FGlC III a reglS1ercd SCf\'ice mark used by FinancIAl GuaranI)' Insurance Company under lICense from lIS parent compllf1Y. FGIC Corporation.
Fonn E-0002 ( I 0i93) Page I of I
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-000 I
-
FGIC.
A GE Capital QJmpany
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
Control Number: 0010001
The insurance provided by this Policy is not covered by the F
Insurance Code, Sec. 631.50 el seq.).
NOnlING HEREIN SHALL BE CONSTRUE~~A ~ , ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE PO~. ~ CONTRARY TO THE POLICY LANGUAGE,
THE TERMS OF THIS ENDORSEMaCIj~E DE THE POLICY LANGUAGE.
In Wibless Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial
Guaranty by virtue of the countersignature of its duly authorized representative.
f7~ ~ Q~
President
Effective Date:
Autborized Representative
Acknowledged as of the Effective Date written above:
COUNTERSIGNATURE:
~
Authorized Officer Liceosed Resident Agent
State Street Bank and Trust Company, N.A., as Fascal Agent
FGIC iJ a regiJlcred service mark used by Financial Guaranty Insurance Compuy under Jia:nsc from its parent company, FGIC Corporation.
Form E-0032 (10193) Page I of I
EXHIBIT D
CONTINUING DISCLOSURE CERTIFlCA TE
0-1
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 $58,000,000 Water and
Sewer System Revenue Bonds, Series 2002 (the "Series 2002 Bonds"). The Series 2002 Bonds are being
issued pursuant to Ordinaoce No. 3674-84 enacted by the City on August 2, 1984, as amended and
supplemented (the "Original Ordinance") and Ordinance No. [ ] enacted by the City on July,
2002, as amended and supplemented (the "Series 2002 Ordinance") (collectively the Original Ordinance
and the 2002 Ordinance are 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 2002 Bondholders
and in order to assist the original underwriters of the Series 2002 Bonds in complying with Rule 15c2-
12(b)(5) promulgated by the Secwities and Exchange Commission ("SEC") pursuant to the Secwities
Exchange Act of 1934 (the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise
provided herein, the Issuer shall provide to all of the nationally recognized municipal secwities 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, 1999, 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 infonmtion 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 Govenunent 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 fmancial
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 2002 Bonds (as amended, the "Official Statement"), as set forth below:
1. Updates of the historical financial information set forth in the Official Statement
underthe principal captions "THE W A TERAND SEWER SYSTEM" and "RATES, FEES AND
CHARGES" for the then-immediately preceding five fiscal years.
D-l
2. Descriptionofanyadditionalindebtednesspayable in whole or in part from the Net
Revenues (as defmed 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 prospecti\'e holders of the Series 2002 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" means the period conunencing on
October I and ending on September 30 of the next succeeding year, or such other period of time provided
by applicable law.
SECflON 3. REPORTING SIGNIFICANT EVENTS. The Issuer shall provide to
the NRMSIRs or the Municipal Secwities Rulemaking Board (the "MSRB") and to the SID, on a timely
basis, notice of any of the following events, if such event is rnaterial with respect to the Series 2002 Bonds
or the Issuer's ability to satisfy its payment obligations with respect to the Series 2002 Bonds:
(A) Principal and interest payment delinquencies;
(8) Non-payment related defaults;
(C) Unscheduled draws on the debt service reserve fimd reflecting fInancial difficulties;
(0) 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 2002 Bonds;
(G) Modifications to rights of Series 2002 Bondholders;
(H) Redemptions;
(I) Defeasances;
(1) Release, substitution, or sale of property securing repayment of the Series 2002 Bonds;
(K) Rating changes; and
(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
D-2
The Issuer rnay 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, it: in the judgment of the Issuer, such other
events are material with respect to the Series 2002 Bonds, but the Issuer does not specifically undertake
to commit to provide any such additional notice of the occurrence of any rnaterialevent 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 eyent would be material under applicable
federal secwities law to holders of Series 2002 Bonds, provided. that any event under clauses (0), (E),
(F), (K) or (L) above will always be deemed to be rnaterial.
SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall provide the
informationdescribed in Sections 2 and 3 above, to the extent required, shall be the following organizations,
their successors and assigns:
(A)
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
Email: Munis@Bloomberg.com
ope Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
Email: nrmsir@dpcdata.com
FT Interactive Data
Ann: NRMSIR
100 William Street
New York, New York 10038
Phone: (212) 771-6999
Fax: (212) 771-7390 (Secondary Market Information)
(212) 771-7391 (Primary Market Information)
Email: NRMSIR@FTID.com
0-3
Standard & Poor's],], Kenny Repository
55 Water Street
45th Floor
New York, NY 1004 I
Phone: (212) 438-4595
Fax: (212) 438-3975
Email: nrmsir_repository@sandp.com
State Information Depositories (Sills)
Municipal Advisory Council of Texas
P.O. Box 2177
Austin, Texas 78768-2177
Phone: (512) 476-6947
Fax: (512) 476-6403
Municipal Advisory Council of Michigan
1445 First National Building
Detroit, Michigan 48226-3517
Phone: (313) 963-0420
Fax: (313) 963-0943
Ohio Municipal Advisory Council
9321 Ravenna Road, Unit K
Twinsburg, OH 44087-2445
Phone: (330) 963-7444
Toll-free: (800) 969-0MAC (6622)
Fax: (330) 963-7553
(8) Any NRMSIRs that are established subsequently and approved by the SEe.
l
(C) A list of the names and addresses c! all designated NRMSIRs as ofany date may currently
be obtained by calling the SEC's Fax on ~ Service at 2021942-8088 and requesting document
nwnber 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 Wlder the Ordinance; provided, however, any Series 2002
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 hereWlder. For purposes of this Disclosure Certificate, "Series 2002 Bondholder" shall mean
0-4
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 2002 Bonds (including persons holding Series 2002 Bonds through nominees,
depositories or other intermediaries), or (B) is treated as the owner of any Series 2002 Bond for federal
income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of the information
required herein to be disclosed rnay 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 SEe. If the document incorporated by reference is a fmalofficial
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 canying 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 2002 Bonds, or (B) the termination of the continuing disclosure requirements of the Rule by
legislative, judicial or administrative action.
SECTION 9. AMENDMENTS. Notwithstanding any other provlSlon of this
Disclosure Certificate, the Issuer rnayamend 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 secwities 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 infonmtion 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.
D-5
SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes
an Obligated Person (as defined in the Rule) relating to the Series 2002 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 July , 2002
ATTEST:
CITY OF CLEARWATER, FLORIDA
City Clerk
By:
Mayor
D-6
EXHIBIT E
COMMITMENT FOR MUNICIPAL BOND INSURANCE POLlCY
E-I
-.
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 3 I 2-3000
(800) 352-000 I
AGECtfjaQrrpqt
-
FGle.
,
MEMORANDUM
Re: City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series 2002
Enclosed please find one original and one copy of our commitment to provide municipal bond
insurance or other credit or liquidity support for the above-referenced bonds.
The commitment may include some or all of the following, as applicable:
. Specimen bond insurance policy or surety bond and applicable endorsements.
. Statement of insurance to be printed on the bonds.
. Official Statement disclosure language.
. Additional exhibits may be attached to the commitment letter, including conditions to
the issuance of the policy and provisions to be incorporated into the legal documents.
Commitment
Due Date: May 29, 2002
FGIC
Contact: Michael Rinaldi, Public Finance
Closing
Coordinator: Raquel Suarez (Phone 212-312-3223; Fax 212-312-3206)
Payment
Instructions: Wire transfer instructions are enclosed.
Please fax a copy of the signature page of the original commitment letter by the due date noted
above and return the original executed commitment letter to FGIC's Closing Coordinator. The
Closing Coordinator should also receive bond proofs and official statement drafts, as well as any
inquiries regarding commitment letter conditions or closing procedures. Bond documentation
should be sent directly to FGIC's Senior Counsel. Isabel Guerra. Please inform the Closing
Coordinator as soon as possible of the closing date/policy issuance date.
We look forward to working with you on this transaction. Thank you.
:hm
cc: Dale Robert Bicknell, Florida Resident Agent
1:\Public:Financc\PF ]ILOnMike Rinaldi\2002 Commit Apr-June\FL-Clearwater Wakr &. Sewer.doc
6005 I S4
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212)312-3000
(800) 352-0001
AGE 0fi1i Ca7pIJy
-
FGlC.
,
Commitment
F or Municipal Bond Insurance
Issuer: City of Clearwater, Florida
Date of Commitment: May 22, 2002
Expiration Date: July 22,2002*
Bonds Insured: Not to exceed $59,610,000 in
principal amount of Water and Sewer Revenue
Bonds, Series 2002
Premium: 0.22% of total debt service on the
Bonds Insured"
FINANCIAL GUARANTY INSURANCE COMPANY
("Financial Guaranty")
A Stock Insurance Company
hereby commits to issue a Municipal Bond New Issue Insurance Policy (the "Policy"), in the form
attached hereto as Exhibit A, relating to the above-described debt obligations (the "Bonds"),
subject to the tenns and conditions contained herein or added hereto.
To keep this Commitment in effect after the Expiration Date set forth above, a request for renewal
must be submitted to Financial Guaranty prior to such Expiration Date. Financial Guaranty
reserves the right to refuse wholly or in part to grant a renewaL
THE MUNICIPAL BOND NEW ISSUE INSURANCE POLICY SHALL BE ISSUED IF
THE FOLLOWING CONDmONS 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 infonnation 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.
.
Subject to written acceptance of this Commitment being furnished to Financial Guaranty
by the earlier of the date on which the disclosure document relating to the Bonds is
circulated and May 29, 2002.
**
The amount of Bond proceeds deposited with the Trustee or Paying Agent at closing for
the payment of accrued interest shall not be applied as a credit in calculating total debt
service on the Bonds Insured.
Page 1 of 4
Financial Guaranty Insurance
Company
2. No event shall occur which would permit any purchaser of the Bonds, otherwi~ 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
Guaranty .
4. The Bonds shall contain no reference to Financial Guaranty, the Policy or the municipal
bond insurance evidenced thereby except as may be approved by Financial Guaranty.
5. Financial Guaranty shall be provided with the following:
(a) (i) Executed copies of all financing documents, the official statement (or any
similar disclosure document), and all Bond documentation evidencing the Issuer's
ability and intent to comply with the Internal Revenue Code of 1986, as amended
(if in the opinion of bond counsel (described below) ongoing compliance would be
necessary to maintain the exemption from federal income taxation of interest on
the Bonds), which shall be in form and substance acceptable to Financial
Guaranty; (ii) the various legal opinions delivered in connection with the issuance
and sale of the Bonds, including, without limitation, the unqualified approving
opinion of bond counsel rendered by a law firm acceptable to Financial Guaranty
and addressed to (or with a reliance letter addressed to) Financial Guaranty, which
opinion shall include a statement to the effect that the interest on the Bonds is
excludable from gross income of the holders thereof for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (if the Bonds are
issued as tax-exempt obligations); and (Hi) opinion(s) of counsel, addressed to and
in form and substance satisfactory to Financial Guaranty, as to the due
authorization, validity and enforceability of all financing and bond documentation.
Copies of all drafts of such documents and legal opinions (blacklined as
appropriate) prepared subsequent to the date of this Commitment shall be
furnished to Financial Guaranty. Final drafts of such documents shall be provided
to Financial Guaranty at least five (5) business days prior to the issuance of the
Policy unless Financial Guaranty shall approve a shorter period and such
documents shall be satisfactory to Financial Guaranty in all respects.
(b) Evidence of wire transfer in federal funds in an amount equal to the insurance
premium, unless alternative arrangements for the payment of the premium
acceptable to Financial Guaranty have been made prior to the delivery date of the
Bonds.
6. All drafts of the preliminary official statement, official statement or any other disclosure
documents and the form of the Bonds should be directed to the attention ofRaquel Suarez
(212-312-3223) at Financial Guaranty for approval. All other documentation and any
inquiries concerning this Commitment should be directed to Michael Rinaldi
(212-312-3052), the Financial Guaranty analyst assigned to this transaction.
7. All authorizing documents shall be subject to Financial Guaranty's review and approval
and shall incorporate all of the terms and conditions set forth in the exhibit attached hereto
entitled "Legal Documentation Requirements," all of which provisions may, at bond
counsel's election, be incorporated into one article of, or as an exhibit to, the appropriate
Page 2 of 4
Financial Guaranty Insurance
Company
authorizing documents, or may be incorporated into the appropriate specific se~ions of the
appropriate authorizing documents.
8. If the subject transaction includes the issuance of refunding bonds, the following additional
conditions shall be met:
(a) The Escrow Agreement (the "Escrow Agreement") providing for the refunding of
the bonds to be refunded with the proceeds of the Bonds (the "Prior Bonds") shall
permit the deposit solely of cash, direct non-callable obligations of the United
States of America and securities fully and unconditionally guaranteed as to the
timely payment of principal and interest by the United States of America, to which
direct obligation or guarantee the full faith and credit of the United States of
America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or
defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any
combination thereof) ("Direct Obligations") and shall permit substitution of Direct
Obligations for other Direct Obligations solely upon the receipt by the escrow
agent of (i) a new verification of the sufficiency of the escrowed securities
(assuming such substitution has been made) to provide for the payment of the Prior
Bonds in accordance with the tenns of the escrow agreement and (ii) an opinion of
bond counsel to the effect that such substitution shall not affect the tax-exempt
status of interest on the Prior Bonds or the Bonds. Modification of the Escrow
Agreement shall not be pennitted unless the holders of all of the Prior Bonds
consent to such modification.
(b) At least five business days prior to the proposed date for delivery of the Policy,
Financial Guaranty shall receive for its review and approval (i) the verification by
independent certified public accountants satisfactory to Financial Guaranty of the
accuracy of the mathematical computation of the adequacy of the escrow
established to provide for the payment of the Prior Bonds in accordance with the
terms and provisions of the Escrow Agreement, (ii) as applicable, copies of the
subscription fonns for the purchase and issue of U.S. Treasury Securities - State
and Local Government Series which have been stamped as received by the Federal
Reserve Bank or copies of the confinnations of purchase of open market Direct
Obligations, and (iii) the fonn of an opinion of bond counsel addressed to
Financial Guaranty (or a reliance letter relating thereto) to the effect that, upon the
making of the required deposit to the escrow, the legal defeasance of the Prior
Bonds shall have occurred. An executed copy of such opinion shall be forwarded
to Financial Guaranty, together with the documentation requested by Condition 5
hereof.
(c) The Escrow Agreement may provide that cash received by the escrow agent not
required for purchase of the initial investments that. are referenced in the
verification report may be invested, in accordance with an opinion of bond counsel
as described in Condition (aXii) above, by the escrow agent, but only in
noncallable Direct Obligations that mature in an amount at least equal to the
purchase price of such Direct Obligations prior to the next scheduled interest
payment date for the Prior Bonds. The escrow agent shall be responsible for
determining compliance with this requirement.
(d) A forward supply contract relating to the provision of such investments which is
acceptable to Financial Guaranty may be entered into at closing if (i) the tenns
thereof are consistent with the foregoing requirements, (ii) the Escrow Agreement
provides that in the event of any discrepancy or difference between the terms of the
Page 3 of 4
Financial Guaranty Insurance
Company
forward supply contract and the Escrow Agreement, the terms of Jhe Escrow
Agreement shall be controlling, and (iii) the verification report shall expressly state
that the adequacy of the escrow to accomplish the refunding project relies solely
on the initial escrowed investments and the maturing principal thereof and interest
income thereon and does not assume performance under or compliance with the
forward supply contract.
9. The Bonds shall bear a Statement of Insurance in the form attached hereto as Exhibit B
(also available online on our web site at www.fJ!ic.com). BOND PROOFS SHALL BE
APPROVED BY FINANCIAL GUARANTY PRIOR TO PRINTING.
10. The preliminary official statement and the official statement shall (a) be satisfactory in
form and substance to Financial Guaranty and (b) shall contain the language attached
hereto as Exhibit C and only such other references to Financial Guaranty as we shall
supply or approve. Financial Guaranty's official statement language and cover logo are
also available online on our web site at www.fJ!ic.com..
II. Promptly after the closing of the Bonds, Financial Guaranty shall receive three completed
sets of executed documents (one original and two photocopies), copies of which we will
deliver to each agency rating the Bonds.
'-
~
Authorized Representative
To keep this commitment in effect to the Expiration Date set forth on the first page, Financial
Guaranty must receive a duplicate of this Commitment executed by an appropriate officer of the
Issuer by the earlier of the date on which the disclosure document relating to the Bonds is
circulated and May 29, 2002.
The undersigned agrees that if the Bonds are insured by a policy of municipal bond insurance, such
insurance shall be provided by Financial Guaranty in accordance with the terms of this
Commitment.
Accepted as of
by the City of Clearwater, Florida.
By:
Name:
Title:
6005 I 54
1:\PublicFinllllCX\PF _PILanMike RinaJdi\2002 Commit Apr-June\FL..clearwater Water & Sewer.doc
Page 4 of4
I:XnlDIt A
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-000 I
-
FGIC-
,
A GE Capital Company
Municipal Bond
New Issue Insurance Policy
Issuer:
Policy Number:
Control Number: 0010001
Bonds:
Financial Guaranty Insurance Company ("FinanciEa ,New York stock insurance company, in
consideration of the payment of the premium and~ t t terms of this Policy, hereby unconditionally and
irrevocably agrees to pay to State S~treet Company. N.A.. or its successor, as its agent (the
"Fiscal Agent"), for the benefit of Bon , rtion of the principal and interest on the above-described
debt obligations (the "Bonds") which come Due for Payment but shall be unpaid by reason of
Nonpayment by the Issuer.
Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest becomes
Due for Payment or on the Business Day next following the day on which Financial Guaranty shall have
received Notice of Nonpayment, whichever is later. The Fiscal Agent will disburse to the Bondholder the face
amount of principal and interest which is then Due for Payment but is unpaid by reason of Nonpayment by the
Issuer but only upon receipt by the Fiscal Agent, in fonn reasonably satisfactory to it, of (i) evidence of the
Bondholder's right to receive payment of the principal or interest Due for Payment and (ii) evidence, including
any appropriate instruments of assignment, that all of the Bondholder's rights to payment of such principal or
interest Due for Payment shall thereupon vest in Financial Guaranty. Upon such disbursement, Financial
Guaranty shall become the owner of the Bond, appurtenant coupon or right to payment of principal or interest
on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including the
Bondholder's right to payment thereof.
This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason.
including the payment of the Bonds prior to their maturity. This Policy does not insure against loss of any
prepayment premium which may at any time be payable with respect to any Bond.
As used herein, the tenn "Bondholder" means, as to a particular Bond. the person other than the Issuer who, at
the time of Nonpayment, is entitled under the tenns of such Bond to payment thereof. "Due for Payment"
means. when referring to the principal of a Bond. the stated maturity date thereof or the date on which the same
shalI have been duly calIed for mandatory sinking fund redemption and does not refer to any earlier date on
which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption).
acceleration or other advancement of maturity and means, when referring to interest on a Bond, the stated date
FGIC is a registered service mark used by Fi.-ciaJ Guaranty Insurance Company under license from its parent company. FGIC Cmporation.
Form 9000 (10193) Page 1 of2
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-000 1
-
FGlC.
,
A GE Capital Company
Municipal Bond
New Issue Insurance Policy
for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer to have provided
sufficient funds to the paying agent for payment in full of all principal and interest Due for Payment on such
Bonel. "Notice" means telephonic or telegraphic notice, subsequently con trmed in writing, or written notice by
registered or certified mail, from a Bondholder or a paying age fo the Bonds to Financial Guaranty.
"Business Day" means any day other than a Saturday, Sunday or n ich the Fiscal Agent is authorized
by law to remain closed. ~ ~
In Witness Whereof, Financial Guaranty has ca is ~\;'to~be affixed with its corporate seal and to be
signed by its duly authorized officer in facsi . e effective and binding upon Financial Guaranty by
virtue of the countersignature of its duly resentative.
8~ 9u Q~
President
Effective Date:
Authorized Representative
State Street Bank and Trust Company, N.A., acknowledges that it has agreed to perform the duties of Fiscal
Agent under this Policy.
~~
Autllorized Officer
FGlC in registered service mart used by rmancial Guaranty Inswance Company under licaIse from its parent company, FGlC Corporation.
Fonn 9000 (10/93) Page2of2
Financial Guaranty Insurance
Company
12S Park A venue
New York, NY 10017
(212) 312-3000
(800) 352-000 1
-
FGle.
,
A GE es"xal Company
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
Control Number: 001000 I
It is further understood that the term "Nonpayment" in resp~ct includes any payment of principal or
interest made to a Bondholder by or on behalf of the iSS~ d which has been recovered from such
Bondholder pursuant to the United States Bankrupt~~ a trustee in bankruptcy in accordance with a
tinal, nonappealable order of a court having co~~ ion.
NOTHING HEREIN SHALL BE CON~~ 'w5 WAIVE, ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE . IF FOUND CONTRARY TO THE POLICY LANGUAGE,
THE TERMS OF THIS ENOORSEMEN UPERSEDE THE POLICY LANGUAGE.
In Witness Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial Guaranty
by virtue of the countersignature of its duly authorized representative.
.El~ ~ Q~
Presideat
Effective Date:
Authorized Representative
Aclmowledged as of the Effective Date written above:
~
Autltorized Officer
State Street Bank and Trust Company, N.A., as Fiscal Agent
FGIC is a qistered service mark used by Financial Guaranty Insurance Company under license from its parent company, FGIC Corporation.
Form E-0002 (1M3) Page I of I
Financial Guaranty Insurance
Company
125 Park Avenue
New York, NY 10017
(212) 312-3000
(800) 352-0001
-
FGlC.
,
A GE Capital Company
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
Control Number: 0010001
The insurance provided by this Policy is not covered bY~e F
Insurance Code, Sec. 631.50 el seq.).
NOTHING HEREIN SHALL BE CONSTRUE~' ALTER. REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE PO~. CONTRARY TO THE POLICY LANGUAGE,
THE TERMS OF THIS ENDORSEMElCIj'vE DE THE POLICY LANGUAGE.
In Witness Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial
Guaranty by virtue of the countersignature of its duly authorized representative.
.El~ ~ Q~
President
Effedive Date:
Authorized Representative
Acknowledged as of the Effective Date written above:
COUNTERSIGNATURE:
~
AutllOrized OffICer Licensed Resident Agent
State Street Bank and Trust Company, N.A., as Fiscal Agent
FGlC is 8 registered service mart used by Financial Guaranty Insurance Company under license from its parent company, FGIC Corporation.
Form E-0032 (10193) Page I of I
EXHIBIT B
Page B-1
,
(To be printed on the Bonds)
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing the
following provisions with respect to the Bonds, such policy being on file at the principal office of
[Paying Agent], as paying agent (the "Paying Agent"):
Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the
Bondholders that portion of the principal or accreted value (if applicable) of and interest on the
Bonds which is then due for payment and which the issuer of the Bonds (the "Issuer") shall have
failed to provide. Due for payment means, with respect to principal or accreted value (if
applicable) the stated maturity date thereof, or the date on which the same shall have been duly
called for mandatory sinking fund redemption and does not refer to any earlier date on which the
payment of principal or accreted value (if applicable) of the Bonds is due by reason of call for
redemption (other than mandatory sinking fund redemption), acceleration or other advancement of
maturity, and with respect to interest, the stated date for payment of such interest.
Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written
notice by registered or certified mail, from a Bondholder or the Paying Agent to Financial
Guaranty that the required payment of principal, accreted value or interest (as applicable) has not
been made by the Issuer to the Paying Agent, Financial Guaranty on the due date of such payment
or within one business day after receipt of notice of such nonpayment, whichever is later, will
make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., or its
successor as its agent (the "Fiscal Agent"), sufficient to make the portion of such payment not paid
by the Issuer. Upon presentation to the Fiscal Agent of evidence satisfactory to it of the
Bondholder's right to receive such payment and any appropriate instruments of assignment
required to vest all of such Bondholder's right to such payment in Financial Guaranty, the Fiscal
Agent will disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person other than the Issuer or the borrower(s) of
bond proceeds who at the time of nonpayment of a Bond is entitled under the terms of such Bond
to payment thereo[
The policy is non-cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
EXHIBIT C
Page C-l
[Disclosure Language For Official Statement]
,
Bond Insurance
Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial
Guaranty") will issue its Municipal Bond New Issue Insurance Policy (the "Policy") for the Bonds
described in the Policy (as used under this heading, the "Bonds"). The Policy unconditionally
guarantees the payment of that portion of the principal or accreted value (if applicable) of and
interest on the Bonds which has become due for payment, but shall be unpaid by reason of
nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such
payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal
Agent"), on the later of the date on which such principal, accreted value or interest (as applicable)
is due or on the business day next following the day on which Financial Guaranty shall have
received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by
registered or certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of
such amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its
owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's
right to receive payment of the principal, accreted value or interest (as applicable) due for payment
and evidence, including any appropriate instruments of assignment, that all of such owner's rights
to payment of such principal, accreted value or interest (as applicable) shall be vested in Financial
Guaranty. The term "nonpayment" in respect of a Bond includes any payment of principal,
accreted value or interest (as applicable) made to an owner of a Bond which has been recovered
from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with a final, nonappealable order of a court having competent jurisdiction.
The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the
Bonds. The Policy covers failure to pay principal or accreted value (if applicable) of the Bonds on
their respective stated maturity dates or dates on which the same shall have been duly called for
mandatory sinking fund redemption, and not on any other date on which the Bonds may have been
otherwise called for redemption, accelerated or advao:ed in maturity, and covers the failure to pay
an installment of interest on the stated date for its payment.
Generally, in connection with its insurance of an issue of municipal securities, Financial Guaranty
requires, among other things, (i) that it be granted the power to exercise any rights granted to the
holders of such securities upon the occurrence of an event of default, without the consent of such
holders, and that such holders may not exercise such rights without Financial Guaranty's consent,
in each case so long as Financial Guaranty has not failed to comply with its payment obligations
under its insurance policy; and (ii) that any amendment or supplement to or other modification of
the principal legal documents be subject to Financial Guaranty's consent. The specific rights, if
any, granted to Financial Guaranty in connection with its insurance of the Bonds are set forth in the
description of the principal legal documents appearing elsewhere in this Official Statement.
Refermce should be made as well to such description for a discussion of the circumstances, if any,
under which the Issuer is required to provide additional or substitute credit enhancement, and
related matters.
This Official Statement contains a section regarding the ratings assigned to the Bonds and
refermce should be made to such section for a discussion of such ratings and the basis for their
assigmtent to the Bonds. Reference should be made to the description of the {ISSUER]
{CONDUIT BORROWER] for a discussion of the ratings, if any. assigned to such entity's
outstanding parity debt that is not secured by credit enhancement.
The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76
of the New York Insurance Law or by the Florida Insurance Guaranty Association (Florida
Inswalce Code, ~~ 631.50 et seq.).
EXHIBIT C
Page C-2
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corp~ration"), a
Delaware holding company. The Corporation is a subsidiary of General Electric Capital
Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts
of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial guaranty
insurer domiciled in the State of New York and subject to regulation by the State of New York
Insurance Department As of December 3 I, 2001, the total capital and surplus of Financial
Guaranty was approximately S1.002 billion. Financial Guaranty prepares finarcial statements on
the basis of both statutory accounting principles and generally accepted accounting principles.
Copies of such financial statements may be obtained by writing to Financial Guaranty at 125 Park
Avenue, New York, New York 10017, Attention: Communications Department (telephone number:
212-312-3000) or to the New York State Insurance Department at 25 Beaver Street, New York,
New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau (telephone
number: 212-480-5187).
LEGAL DOCUMENTATION REQUIREMENTS
[To be incorporated into Authorizing Document]
,
1. Definitions
(a) A definition of "Bond Insurance Policy" shall be included, to read as follows: "the
municipal bond new issue insurance policy issued by the Bond Insurer that guarantees
payment of principal of and interest on the Bonds.."
(b) A definition of "Bond Insurer" shall be included, to read as follows: "Financial Guaranty
Insurance Company, a New York stock insurance company, or any successor thereto."
2. Reserve Fund Requirements
Any credit instrument provided in lieu of a cash deposit into the debt service reserve fund, other
than one provided by the Bond Insurer, shall conform to the requirements set forth in the exhibit
attached hereto entitled "Reserve Fund Surety Guidelines."
3. Default-Related Provisions
(a) The Trustee shall, to the extent there are no other available funds held under the
authorizing document, use the remaining funds in the construction fund to pay principal
of or interest on the Bonds in the event of a payment default.
(b) The applicable authorizing document provisions describing events of default shall
specify that in determining whether a payment default has occurred or whether a payment
on the Bonds has been made under the authorizing document(s), no effect shall be given
to payments made under the Bond Insurance Policy.
(c) Any acceleration of the Bonds or any annulment thereof shall be subject to the prior
written consent of the Bond Insurer (if it has not failed to comply with its payment
obligations under the Bond Insurance Policy).
(d) The Bond Insurer shall receive immediate notice of any payment default and notice of
any other default known to the Trustee or the Issuer within 30 days of the Trustee's or
the Issuer's knowledge thereof.
(e) For all purposes of the authorizing document provisions governing events of default and
remedies, except the giving of notice of default to Bondholders, the Bond Insurer shall be
deemed to be the sole holder of the Bonds it has insured for so long as it has not failed to
comply with its payment obligations under the Bond Insurance Policy.
(I) The Bond Insurer shall be included as a party in interest and as a party entitled to (i)
notify the Issuer, the Trustee, if any, or any applicable receiver of the occurrence of an
event of default and (ii) request the Trustee or receiver to intervene in judicial
proceedings that affect the Bonds or the security therefor. The Trustee or receiver shall
be required to accept notice of default from the Bond Insurer.
.
As used in this exhibit, "Bonds" means the Series of Bonds referred to in the Commitment Letter.
Page lof3
4. Amendments and Supplements
Any amendment or supplement to the authorizing document or any other prinr,ipal financing
documents shall be subject to the prior written consent of the Bond Insurer. Any rating agency
rating the Bonds must receive notice of each amendment and a copy thereof at least 15 days in
advance of its execution or adoption. The Bond Insurer shall be provided with a full transcript of
all proceedings relating to the execution of any such amendment or supplement.
5. Successor Trustees, Etc.
No resignation or removal of the Trustee, Paying Agent or Bond Registrar shall become effective
until a successor has been appointed and has accepted the duties of Trustee, Paying Agent or
Bond Registrar, as applicable. The Bond Insurer shall be furnished with written notice of the
resignation or removal of the Trustee, Paying Agent or Bond Registrar and the appointment of
any successor thereto.
6. Defeasance Provisions
Only cash, direct non-callable obligations of the United States of America and securities fully and
unconditionally guaranteed as to the timely payment of principal and interest by the United States
of America, to which direct obligation or guarantee the full faith and credit of the United States of
America has been pledged. Refcorp interest strips, CATS, TIGRS, STRPS, or defeased municipal
bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing) shall be
used to effect defeasance of the Bonds unless the Bond Insurer otherwise approves. In the event
of an advance refuO!iin~ the Issuer . shall cause to be delivered a verification report of an
iI1~-nlltionally recognized certified public accountant. If a forward supply contract is
employed in connection with the refunding, (i) such verification report shall expressly state that
the adequacy of the escrow to accomplish the refunding relies solely on the initial escrowed
investments and the maturing principal thereof and interest income thereon and does not assume
performance under or compliance with the forward supply contract, and (ii) the applicable escrow
agreement shall provide that in the event of any discrepancy or difference between the terms of
the forward supply contract and the escrow agreement (or the authorizing document, if no
separate escrow agreement is utilized), the terms of the escrow agreement or authorizing
document, if applicable, shall be controlling.
7. Variable Rate Indebtedness
(a) For all purposes, variable rate indebtedness shall be assumed to bear interest at the
highest of: (i) the actual rate on the date of calculation, or if the indebtedness in not yet
outstanding, the initial rate (if established and binding), (ii) if the indebtedness has been
outstanding for at least twelve months, the average rate over the twelve months
immediately preceding the date of calculation, or if no debt is outstanding for the twelve
prior months under the authorizing document, the average rate borne by reference to an
index comparable to that to be utilized in determining the interest rate for the debt to be
issued and (iii) (A) if interest on the indebtedness is excludable from gross income under
the applicable provisions of the Internal Revenue Code, the most recently published
Bond Buyer "Revenue Bond Index" (or comparable index ifno longer published), or (B)
if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with
comparable maturities; provided, however, that for purposes of any rate covenant
Page 2 of3
measuring actual debt service coverage during a test period, variable rate indebtedness
shall be deemed to bear interest at the actual rate per annum applicable during the test
~riod. '
(b) In the case of variable rate issues in which financial covenants are based on the synthetic
fixed rate under a swap, utilization of the synthetic fixed rate under a Swap for purposes
of perfonning any required calculations under the applicable legal documentation shall
be pennitted only if such documentation and the applicable Swap satisfy the
requirements of the exhibit attached hereto entitled "Swap Provider Guidelines."
8. Ret>Ortin~ Requirements
The Bond Insurer shall be provided with the following infonnation:
(a) Notice of any drawing upon or deficiency due to market fluctuation in the amount, if any,
on deposit, in the debt service reserve fund;
. (b) Notice. of the redemption, other than mandatory sinking fund redemption, of any of the
Bonds, or of any advance refunding of the Bonds, including the principal amount,
maturities and CUSIP numbers thereof;
(c) Notice of any material events pursuant to Rule 15c2-12 under the Securities Exchange
Act of 1934; and
(d) Such additional information as the Bond Insurer may reasonably request from time to
time.
9. Notice Addres~.
The notice addresses for the Bond Insurer and the Fiscal Agent shall be included in the
authorizing document as follows: Financial Guaranty Insurance Company, 125 Park Avenue,
New York, New York 10017, Attention: Risk Management; and State Street Bank and Trust
Company, N.A., 61 Broadway, New York, New York 10006, Attention: Corporate Trust
Department
1:\PublicFmance\PF ]ILOnMike RiDaldi\2002 Commit Apr-June\FL-Clearwater W&S LR.doc
Page 3 of3
RESERVE FUND SURETY GUIDELINES
,
The Issuer may satisfy the requirement (the "Reserve Fund Requirement") to deposit a specified amount
in the debt service reserve fund (the "Reserve Fund") by the deposit of a surety bond, insurance policy or
letter of credit as set forth below. The following requirements shall be incorporated in the authorizing
document for the Bonds (the "Authorizing Document") in the event the Reserve Fund Requirement is
fulfilled by a deposit of a credit instrument (other than a credit instrument issued by Financial Guaranty)
in lieu of cash:
1. A surety bond or insurance policy issued to the entity serving as trustee or paying agent (the
"Fiduciary"), as agent of the bondholders, by a company licensed to issue an insurance policy
guaranteeing the timely payment of debt service on the Bonds (a "municipal bond insurer") may
be deposited in the Reserve Fund to meet the Reserve Fund Requirement if the claims paying
ability of the issuer thereof shall be rated "AAA" or "Aaa" by S&P or Moody's, respectively.
2. A surety bond or insurance policy issued to the Fiduciary, as agent of the bondholders, by an
-------~------~-entity oTh~r-tnafi-a municipal bond insurer may be deposited in the Reserve Fund to meet the
Reserve Fund Requirement if the fonn and substance of such instrument and the issuer thereof
shall be approved by Financial Guaranty.
3.
An unconditional irrevocable letter of credit issued to the Fiduciary, as agent of the bondholders,
by a bank may be deposited in the Reserve Fund to meet the Reserve Fund Requirement if the
issuer thereof is rated at least "AA" by S&.P. The letter of credit shall be payable in one or more
draws upon presentation by the beneficiary gfll-Sight drift accompanied by its certificate that it
then holds insufficient funds to ma~~Jl-required payment of principal or interest on the bonds.
The draws shalt bepay~!?lewithirrtWo days of presentation of the sight draft. The letter of credit
shall be ~ of not less than three years. The issuer of the letter of credit shall be required
--kNtotifY the Issuer and the Fiduciary, not later than 30 months prior to the stated expiration date
of the letter of credit, as to whether such expiration date shall be extended, and if so, shall
indicate the new expiration date.
4.
If such notice indicates that the expiration date shall not be extended, the Issuer shall deposit in
the Reserve Fund an amount sufficient to cause the cash or pennitted investments on deposit in
the Reserve Fund together with any other qualifying credit instruments, to equal the Reserve
Fund Requirement on all outstanding Bonds, such deposit to be paid in equal installments on at
least a semi-annual basis over the remaining tenn of the letter of credit, unless the Reserve Fund
credit instrument is replaced by a Reserve Fund credit instrument meeting the requirements in
any of 1-3 above. The letter of credit shall pennit a draw in full not less than two weeks prior to
the expiration or termination of such letter of credit if the letter of credit has not been replaced or
renewed. The Authorizing Document shall, in turn, direct the Fiduciary to draw upon the letter of
credit prior to its expiration or tennination unless an acceptable replacement is in place or the
Reserve Fund is fully funded in its required amount
5.
The use of any Reserve Fund credit instrument pursuant to this Paragraph shall be subject to
receipt of an opinion of counsel acceptable to Financial Guaranty and in fonn and substance
satisfactory to Financial Guaranty as to the due authorization, execution, delivery and
enforceability of such instrument in accordance with its tenns, subject to applicable laws
affecting creditors' rights generally, and, in the event the issuer of such credit instrument is not a
domestic entity, an opinion of foreign counsel in fonn and substance satisfactory to Financial
Guaranty. In addition, the use of an irrevocable letter of credit shall be subject to receipt of an
opinion of counsel acceptable to Financial Guaranty and in fonn and substance satisfactory to
Financial Guaranty to the effect that payments under such letter of credit would not constitute
avoidable preferences under Section 547 of the U.S. Bankruptcy Code or similar state laws with
Page 1 of3
avoidable preference provisions in the event of the filing of a petition for relief under the U.S.
Bankruptcy Code or similar state laws by or against the issuer of the bonds (or any other account
party under the letter of credit). ,
6. The obligation to reimburse the issuer of a Reserve Fund credit instrument for any fees, expenses,
claims or draws upon such Reserve Fund credit instrument shall be subordinate to the payment of
debt service on the bonds. The right of the issuer of a Reserve Fund credit instrument to payment
or reimbursement of its fees and expenses shall be subordinated to cash replenishment of the
Reserve Fund, and, subject to the second succeeding sentence, its right to reimbursement for
claims or draws shall be on a parity with the cash replenishment of the Reserve Fund. The
Reserve Fund credit instrument shall provide for a revolving feature under which the amount
available thereunder will be reinstated to the extent of any reimbursement of draws or claims
paid. If the revolving feature is suspended or tenninated for any reason, the right of the issuer of
the Reserve Fund credit instrument to reimbursement will be further subordinated to cash
replenishment of the Reserve Fund to an amount equal to the difference between the full original
amount available under the Reserve Fund credit instrument and the amount then available for
further draws or claims. If (a) the issuer of a Reserve Fund credit instrument becomes insolvent
or (b) the issuer of a Reserve Fund credit instrument defaults in its payment obligations
thereunder or (c) the claims-paying ability of the issuer of the insurance policy or surety bond
falls below a S&P "AAA" or a Moody's "Aaa" or (d) the rating of the issuer of the letter of credit
falls below a S&P "AA", the obligation to reimburse the issuer of the Reserve Fund credit
instrument shall be subordinate to the cash replenishment of the Reserve Fund.
7. If (a) the revolving reinstatement feature described in the preceding paragraph is suspended or
tenninated or (b) the rating of the claims paying ability of the issuer of the surety bond or
insurance policy falls below a S&P "AAA" or a Moody's "Aaa" or (c) the rating of the issuer of
the letter of credit falls below a S&P "AA", the Issuer shall either (i) deposit into the Reserve
Fund an amount sufficient to cause the cash or pennitted investments on deposit in the Reserve
Fund to equal the Reserve Fund Requirement on all outstanding Bonds, such amount to be paid
over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace
such instrument with a surety bond, insurance policy or letter of credit meeting the requirements
in any of 1-3 above within six months of such occurrence. In the event (a) the rating of the
claims-paying ability of the issuer of the surety bond or insurance policy falls below "A" or (b)
the rating of the issuer of the letter of credit falls below "A" or (c) the issuer of the Reserve Fund
credit instrument defaults in its payment obligations or (d) the issuer of the Reserve Fund credit
instrument becomes insolvent, the Issuer shall either (i) deposit into the Reserve Fund an amount
sufficient to cause the cash or pennitted investments on deposit in the Reserve Fund to equal to
Reserve Fund Requirement on all outstanding Bonds, such amount to be paid over the ensuing
year in equal installments on at least a monthly basis or (ii) replace such instrument with a surety
bond, insurance policy or letter of credit meeting the requirements in any of 1-3 above within six
months of such occurrence.
8. Where applicable, the amount available for draws or claims under the Reserve Fund credit
instrument may be reduced by the amount of cash or pennitted investments deposited in the
Reserve Fund pursuant to clause (i) of the preceding subparagraph 6.
9. If the Issuer chooses the above described alternatives to a cash-funded Reserve Fund, any
amounts owed by the Issuer to the issuer of such credit instrument as a result of a draw thereon or
a claim thereunder, as appropriate, shall be included in any calculation of debt service
requirements required to be made pursuant to the Authorizing Document for any purpose, e.g.,
rate covenant or additional bonds test.
10. The Authorizing Document shall require the Fiduciary to ascertain the necessity for a claim or
draw upon the Reserve Fund credit instrument and to provide notice to the issuer of the Reserve
Page 2 of3
c .
Fund credit instrument in accordance with its tenns not later than three days (or such longer
period as may be necessary depending on the pennitted time period for honoring a draw under
the Reserve Fund credit instrument) prior to each interest payment date. ,
11. Cash on deposit in the Reserve Fund shall be used (or investments purchased with such cash shall
be liquidated and the proceeds applied as required) prior to any drawing on any Reserve Fund
credit instrument. If and to the extent that more than one Reserve Fund credit instrument is
deposited in the Reserve Fund, drawings thereunder and repayments of costs associated therewith
shall be made on a pro rata basis, calculated by reference to the maximum amounts available
thereunder.
Page 3 of3
.-
r
FINANCIAL GUARANTY INSURANCE COMPANY
PROCEDURESFORPAYMENTOFPREMITUM
,
Financial Guaranty's issuance of its Municipal Bond New Issue Insurance Policy (or Debt Service
Reserve Fund Policy, if appropriate) at closing is contingent upon its receipt of the premium. NO
POLICY WILL BE RELEASED UNTIL ORAL CONFIRMATION OF THE FEDERAL
RESERVE WIRE REFERENCE NUMBER HAS BEEN RECEIVED. Set forth below are the
procedures to be followed for confirming the amount of the premium to be paid and for paying
such amount:
_//Confirmation of
Amount to be Paid:
Upon determination of the final debt service schedule, provide
such schedule to Financial Guaranty, to the attention of the FGIC
Closing Coordinator, whose name and telephone number are
. referenced in commitment letter, and subsequently confirm the
amountoftbe premium with the Closing Coordinator.
Payment:
Premium Due Date
Method of Payment:
Wire Transfer of Federa' Funds
BANKERS TRUST NEW YORK
ABANu.mber-621:601 -033
16 Wall Street, New York, New York
For Credit to Financial Guaranty Insurance Company
Account # 50-256-127
FGIC Policy #
Wire Transfer
InstnKtioDs:
FGIC Contact:
FGIC Closing Coordinator- see commitment letter
Any questions concerning these procedures or any premium payment method other than outlined
above should be directed to the attention of the FGIC Closing Coordinator at least two banking
days prior to the scheduled payment date.
CONFIRMATION OF RECEIPT OF PREMIUM
FilllllCial Guaranty will accept as confirmation of the premium payment a wire transfer number
and lite name of the sending bank, to be communicated on the closing date to the FGIC Closing
Coordinator.
Upma confirmation of the premium payment and satisfaction of the other conditions set forth in the
com.itment letter, Financial Guaranty will release the Policy.
REQUESTS FOR FURTHER INFORMATION OR
ALTERNA~PAYMENTARRANGEMENTS
R~sts for additional information regarding the procedures described above or as to the
acceptability of alternate payment procedures should be directed to the FGIC Closing Coordinator
at least two business days prior to the closing date.