Loading...
03-36 RESOLUTION NO. 03-36 A RESOLUTION PROVIDING FOR THE AUTHORIZATION OF NOT TO EXCEED $10,000,000 GAS SYSTEM REVENUE REFUNDING BONDS, SERIES 2004; PROVIDING FOR THE PUBLIC SALE OF SAID BONDS; 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; PROVIDING FOR AN ESCROW DEPOSIT AGREEMENT AND APPOINTING AN ESCROW 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. 5118-91, enacted by the Issuer on August 15, 1991, as amended and supplemented, and by Ordinance No. 7191-03, enacted by the Issuer on October 2,2003 (collectively, the "Bond Ordinance") authorized the issuance of City of Clearwater, Florida, Gas System Revenue Refunding Bonds, Series [to be determined]; 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 Gas System Revenue Refunding Bonds, Series 2004 being offered pursuant to the Bond Ordinance and this resolution are hereby designated as the not to exceed $10,000,000 City of Clearwater, Florida, Gas System Revenue Bonds, Series 2004 (the "Series 2004 Bonds"), which Series 2004 Bonds are hereby authorized to be issued. The proceeds of the Series 2004 Bonds shall be used to refund the Issuer's outstanding Gas System Revenue Bonds, Series 1996A maturing on and after September 1, 2004 (the "Refunded Bonds"), pay the cost of issuing the Series 2004 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 $10,000,000 City of Clearwater, Florida, Gas System Revenue Refunding Bonds, Series 2004. Resolution No. 03-36 1 SECTION 3. SALE OF SERIES 2004 BONDS; REDEMPTION AND MATURITY PROVISIONS. The Finance Director is hereby directed to arrange for the sale of the Series 2004 Bonds utilizing the electronic bid process of PARITY through the publication of the Summary Notice of Sale of the Bonds in The Bond Buver, such publications to be on such date as shall be deemed by the Finance Director to be in the best interest of the Issuer and such publications to be not less than ten (10) calendar days prior to the date of sale as required by Section 218.385(1), Florida Statutes; and to publish such Notice in such other newspapers on such dates as may be deemed appropriate by the Finance Director. The Series 2004 Bonds shall be subject to optional redemption and shall bear maturities and sinking fund amortizations as shall be subsequently determined by the Finance Director, upon advice of the City's financial advisor and based on market conditions existing at the time, prior to the publication of the Summary Notice of Sale as hereinafter approved. In addition, the Finance Director is authorized to change the series designation of the Series 2004 Bonds to reflect the actual year in which the Series 2004 Bonds are issued. Proposals for purchase of the Series 2004 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, Gas System Revenue Bonds, Series 2004; 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 REVENUE FUND AND USE OF FUNDS. There is hereby created with the Revenue Fund a separate subaccount, namely, the Series 2004 Cost of Issuance Account. Moneys held in the Series 2004 Cost of Issuance Account shall be used to pay the costs of issuing and delivering the Series 2004 Bonds. SECTION 5. DISPOSITION OF PROCEEDS OF SERIES 2004 BONDS. The proceeds from the sale of the Series 2004 Bonds shall be deposited as follows: (a) An amount equal to the accrued interest on the Series 2004 Bonds shall be deposited into the Interest Account in the Sinking Fund; (b) An amount determined by the Finance Director to be necessary to pay the costs of issuing the Series 2004 Bonds, including the premium due to the Bond Insurer, shall be Resolution No. 03-36 2 deposited into the Series 2004 Cost of Issuance Account in the Revenue Fund to pay such costs; (c) An amount determined by the Finance Director in consultation with the City's Financial Advisor to be deposited under the Escrow Deposit Agreement (hereinafter approved), which together with certain funds currently held by the Issuer in the Sinking Fund for the Refunded Bonds, will provide sufficient funds to defease the Refunded Bonds; (d) An amount determined by the Finance Director to be necessary to increase the amount in the Reserve Account in the Sinking Fund so that the amount on deposit therein equals the Reserve Requirement; and (e) The remaining proceeds of the Series 2004 Bonds representing a rounding amount shall be deposited into the Sinking Fund for the Series 2004 Bonds. 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 2004 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 2004 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 2004 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. ESCROW DEPOSIT AGREEMENT The form of Escrow Deposit Agreement to be used in connection with the defeasance and redemption of the Refunded Bonds attached hereto as Exhibit "F" and incorporated herein by reference is hereby approved. The Mayor-Commissioner, or in his absence the Vice Mayor, the City Manager and the City Clerk are hereby authorized to execute such Escrow Deposit Agreement in substantially the form attached as Exhibit "F" upon the approval of the City Attorney as to form and legal sufficiency, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. The Finance Director is hereby authorized to solicit offers from financial institutions to serve as Escrow Agent under the Escrow Deposit Agreement for the Refunded Bonds, Resolution No. 03-36 3 and the Finance Director is hereby authorized to select the firm with the lowest bid to serve in such capacity. SECTION 9. 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") of the Securities and Exchange Commission. Upon the award of the Series 2004 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 2004 Bonds, the City Manager and the Finance Director shall cause to be prepared a final Official Statement dated as.ofthe 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. SECTION 10. 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 2004 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 11. REGISTRAR AND PAYING AGENT. Wachovia Bank, N.A., Jacksonville, Florida is hereby appointed as Registrar and Paying Agent for the Series 2004 Bonds. Resolution No. 03-36 4 SECTION 12. MUNICIPAL BOND INSURANCE POLICIES. Pursuant to the Bond Ordinance, Ambac Assurance Corporation ("AMBAC") 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 2004 Bonds. Selection of AMBAC as the Bond Insurer is hereby ratified and confirmed and payment for such Bond Insurance Policy from proceeds of the Series 2004 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 2004 Bonds for the benefit and information of the holders of the Series 2004 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 additional covenants and agreements substantially in the form attached hereto as Exhibit "G" for the benefit of the Bond Insurer and the Holders of the Series 2004 Bonds while the Bond Insurance Policy insuring the Series 2004 Bonds are in full force and effect. The purchase of a debt service reserve fund surety policy (the "Reserve Surety") from AMBAC is in the best interest of the Issuer. The Issuer hereby accepts the terms, conditions and agreements relating to the Reserve Surety in accordance with the Commitment for Reserve Surety as attached hereto as Exhibit "H" and incorporated herein. The Mayor-Commissioner, or in his absence the Vice Mayor, the City Manager and the City Clerk are authorized to execute a financial guaranty agreement or similar agreement as required by the commitment set forth on Exhibit "H" hereto, with such changes, insertions and omissions as may be approved by such officers. In the event the Issuer is required to utilize any funds on deposit in the Reserve Account for the Bonds, the funds on deposit therein shall be used prior to making a draw under the Reserve Surety, and in the event the Issuer subsequently replaces the funds on deposit in the Reserve Account with another surety or similar policy, then such other surety or reserve policy shall be drawn upon prior to drawing upon the Reserve Surety. In the event the Reserve Surety is drawn upon, the Issuer shall use any available Pledged Funds to reimburse Ambac for the amount of draws thereunder, all in accordance with the financial guaranty agreement hereinabove approved. SECTION 13. AWARD OF BIDS. The Finance Director is hereby authorized to accept the bids for the Series 2004 Bonds. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2004 Bonds on their determination of the best bid submitted in accordance with the terms of the Notice of Bond Sale provided for herein so long as the true interest cost rate shall not exceed 5.5% on the Series 2004 Bonds and a net present value savings on refunding the Refunded Bonds of not less than 4.0%. The City Manager and the Finance Director are hereby authorized to award the sale Resolution No. 03-36 5 of the Series 2004 Bonds as set forth above or to reject all bids for the Series 2004 Bonds. Such award shall be final. SECTION 14. OTHER MATTERS. The Mayor-Commissioner or Vice-Mayor, or in their absence any member of the City Commission, the City Manager, or in his absence an Assistant City Manager, the City Attorney, the City Clerk and any other proper officials of the City are hereby authorized to do all acts and things required of them by this Resolution or that may otherwise be desirable or consistent with accomplishing the full, punctual and complete performance of all the terms, covenants and agreements contained in any ofthe foregoing and the City is hereby authorized and directed to execute and deliver any and all papers and instruments and to cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated thereby. SECTION 15. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution are inconsistent with the provisions of any prior Resolution, with respect to the issuance of the Series 2004 Bonds, provisions of this Resolution shall control and supercede the inconsistent provisions of such Resolutions. SECTION 16. EFFECTIVE DATE. This resolution shall take effect immediately upon adoption. Passed and adopted by the City Commission of the City of Clearwater, Florida, this 18thday of December , 2003. CITY OF CLEARWATER, FLORIDA APproved~ to form: JJ/~ Pamela K. Akin, City Attorney Attest: . . ~~if1/~&.L ~ Cynth; GOudea~,C;tyGlerk Resolution No. 03-36 6 EXHIBIT A FORM OF OFFICIAL NOTICE OF BOND SALE $ CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE REFUNDING BONDS, SERIES 2004 * 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., Clearwater, Florida time, on . 2004. 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, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853, or PARITY at 40 West 23rd Street, 5th Floor, New York, New York 10010, telephone (212) 404-8102. 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 2004 Bonds The Series 2004 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 1, 2004. Principal of the Series 2004 Bonds shall be paid to the registered owners at the designated corporate trust office of Wachovia Bank, N.A. (the "Paying Agent" and "Registrar"), upon presentment and surrender of the Series 2004 Bonds. Interest on the Series 2004 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 March 1 and September 1, commencing 1,2004. Interest will be calculated on the basis of a 360-day year of twelve 30-day months. For so long as The Depository Trust Company, New York, New York, or its nominee, Cede & Co. (collectively, "DTC") is the registered owner of the Series 2004 Bonds, payments of principal of, redemption premium, if any, and interest on the Series 2004 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 2004 Bonds is the responsibility of the DTC participants. A-I Initially one bond will be issued for each maturity of the Series 2004 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 2004 Bonds. Purchases of the Series 2004 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 2004 Bonds to furnish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the Series 2004 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined). Maturity Schedule The Series 2004 Bonds will mature on September 1 of the following years in the following principal amounts: Series 2004 Bonds Maturity 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Principal Amount* Maturity 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Principal Amount* *Preliminary, subject to change Mandatory Redemption Provisions If the Successful Bidder designates any Series 2004 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 2004 Bonds maturing on I, 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 A-2 1, 20----J and each 1 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 Optional Redemption Provisions The Series 2004 Bonds maturing on or before September 1, 2013 are not callable prior to their maturity dates. The Series 2004 Bonds maturing after September 1, 2012 are subject to optional redemption by the City, on and after September 1, 2013 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 September 1, 2013 and thereafter 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 2004 Bonds (or any Amortization Installment in the case of a Term Bond) shown on the schedule of Principal Amounts set forth above (the "Maturity Schedule"), by an amount not to exceed ten percent (10%) 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 2004 Bonds, no rebidding or recalculation of the bid submitted with respect to such Series 2004 Bonds will be required or permitted. If necessary, the total purchase price of the Series 2004 Bonds will be increased or decreased in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 2004 Bonds specified herein; and the Series 2004 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 2004 Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 2004 Bonds, without taking into account any adjustment in the amount of Series 2004 Bonds set forth in the Bid Maturity Schedule. A-3 Designation of Term Bonds Bidders may specify that the annual Principal Amounts of the Series 2004 Bonds coming due in any two or more consecutive years may be combined to form one or more maturities of Series 2004 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 2004 Bonds to be selected by lot and redeemed at a price of par plus accrued interest in accordance with the Resolution. Basis of Award Proposals must be unconditional and only for all the Series 2004 Bonds. The purchase price bid for the Series 2004 Bonds may include a discount (including underwriters' discount and original issue discount) not to exceed two percent (2%) of the principal amount of the Series 2004 Bonds and shall specify how much of the discount is original issue discount. The purchase price bid may also include an original issue premium and shall specify how much of such purchase price is original issue premium. The Series 2004 Bonds will be insured by Ambac Assurance Corporation and the City will pay the bond insurance premium from Bond proceeds. The purchase price bid for the Series 2004 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 2004 Bonds, to reject any or all bids and to waive any irregularity or informality in any bid. The Series 2004 Bonds will be awarded to the bidder (herein referred to as the "Successful Bidder" as to the Series 2004 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 2004 Bonds. True interest cost for the Series 2004 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 2004 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 September 1, 2004. The true interest cost shall be calculated from . 2004, the expected closing date of the Series 2004 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 2004 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 2004 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 A-4 The Series 2004 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one- twentieth (1/20) of one percent. No coupon interest rate specified for any maturity of the Series 2004 Bonds may be less than one percent (1.0%) or more than six percent (6.0%). 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 2004 Bonds bear the same rate of interest, provided that all Series 2004 Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based upon the use of split or supplemental interest payments or a zero rate of interest will not be considered. Paying Agent and Registrar The Paying Agent and Registrar for the Series 2004 Bonds is Wachovia Bank, N.A., through its designated office in Jacksonville, Florida. Security Principal of and interest on the Series 2004 Bonds to be issued pursuant to Ordinance No. 5118:..91, as supplemented by Ordinance No. 7191-03, as supplemented, and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of Gas 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 2004 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 2004 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 2004 Bonds are being issued to finance the refunding of the City's Gas System Revenue Bonds, Series 1996A, and pay the costs of issuing the Series 2004 Bonds and to purchase a municipal bond insurance policy. Issuance of Series 2004 Bonds The Series 2004 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 2004 Bonds A-5 are being issued pursuant to Ordinance No. 5118-91, enacted August 15, 1991, as amended and supplemented pursuant to Ordinance 7191-03, enacted October 2, 2003 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 Ambac Assurance Corporation ("Ambac Assurance") has issued a commitment for a financial guaranty insurance policy relating to the Bonds. All bids may be conditioned upon the issuance, effective as of the date on which the Bonds are issued, of a policy of insurance by Ambac Assurance, insuring the payment when due of principal of and interest on the Bonds. Each Bond will bear a legend referring to the insurance. The purchaser, holder or owner is not authorized to make any statements concerning the insurance beyond those set out here and in the Bond Legend without the approval of Ambac Assurance. Proposals Proposals for the Series 2004 Bonds are desired on forms which will be furnished by P ARlTY, on behalf of the City, and be submitted electronically via P ARlTY. All bidders must submit a "Good Faith Deposit" in the amount of $100,000 (the "Deposit") in the form of a financial surety bond of Financial Security Assurance, Inc. (the "Financial Surety Bond"). Such Financial Surety Bond must be submitted to the City prior to the sale. The Financial Surety Bond must identify the Bidder whose Deposit is guaranteed by such Financial Surety Bond. The successful bidder is required to submit its good faith deposit by wire transfer not later than11:00 a.m. eastern time, on the next business day following the award, as instructed by the City's Financial Advisor. If such deposit is not received by that time, the City shall make a claim under the Financial Surety Bond to satisfy the good faith deposit requirement. The check of the successful bidder or proceeds of a claim under the Financial Surety Bond, as applicable, will be deposited by the City in an interest-bearing account and be retained and applied towards the purchase price of the Series 2004 Bonds pending full performance by the successful bidder, or will be forfeited to the City and applied as full liquidated damages upon failure of the successful bidder to take up and pay for the Series 2004 Bonds. Any interest earned on the good faith deposit will be retained by and inure to the benefit of the City. If the Series 2004 Bonds are not delivered to the successful bidder within 30 calendar days from the date of sale, without fault upon the part of the successful bidder, such successful bidder shall not thereafter be obligated to take delivery of and pay for the Series 2004 Bonds and the good faith deposit amount will be promptly paid to the successful bidder or Financial Security Assurance, Inc., as applicable. Delivery and Payment It is anticipated that the Series 2004 Bonds in book entry only form will be available for delivery on , 2004, in New York, New York, at The Depository Trust Company, or A-6 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 deposit, 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 2004 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 2004 Bonds will be delivered to the Successful Bidder of the Series 2004 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)I, Florida Statutes requires that the City file, within 120 days after delivery of the Series 2004 Bonds, an information statement with the Division of Bond Finance of the State of Florida (the "Division") containing the following information: (a) the name and address of the managing underwriter, if any, connected with the Series 2004 Bonds; (b) the name and address of any attorney or financial consultant who advised the City with respect to the Series 2004 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 2004 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 2004 Bonds, a statement signed by an authorized officer containing the same information mentioned in (a) and (c) above. The Successful Bidder shall also be required, at or prior to the delivery of the Series 2004 Bonds, to furnish the City with such information concerning the initial prices at which a substantial amount of the Series 2004 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 2004 Bonds as part of their bid in the following form: "The City of Clearwater, Florida, is proposing to issue $ original aggregate principal amount of Gas System Revenue Refunding Bonds, Series 2004, for the purpose of paying (i) the costs of refunding the City's Gas System Revenue Bonds, Series 1996A, (ii) the costs of issuing the Series 2004 Bonds, and (iii) the premium on the Bond Insurance Policy, all as further described in Ordinance No. _-03. The final maturity date of the Series 2004 Bonds is September I, 2026, and the Series 2004 Bonds are expected to be repaid over a period of twenty three (23) years. At a forecasted average interest rate of _ % per annum, total interest paid A-7 over the life of the Series 2004 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 2004 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 2004 Bonds." Legal Opinion The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant Miller & 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 2004 Bonds is not includable in the gross income of individuals, however, interest on the Series 2004 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 2004 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)(1) (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 2004 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 2004 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 A-8 It is anticipated that CUSIP identification numbers will be printed on the Series 2004 Bonds, but neither the failure to print such number on any Series 2004 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 2004 Bonds in accordance with its agreement to purchase the Series 2004 Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 2004 Bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said number shall be the responsibility of and shall be paid for by the Successful Bidder. Copies of Documents Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form and further information which may be desired, may be obtained from the City's Financial Advisor, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853. Amendment and Notices Amendments hereto and notices, if any, pertaining to this offering shall be made through Thompson Municipal Market Monitor (TM3) or similar information distribution service. CITY OF CLEARWATER, FLORIDA /s/ Brian T. Aungst Mayor-Commissioner A-9 EXHIBIT B FORM OF SUMMARY NOTICE OF SALE CITY OF CLEARWATER, FLORIDA Gas System Revenue Refunding Bonds Series 2004 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 P ARlTY, subject to the provisions of the Official Notice of Bond Sale. Sale Date: Time: Bonds Dated: Maturities: Maturity 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ,2004 11:00 a.m., Clearwater, Florida .2004 Payable September 1 in the years and amounts as follows: Series 2004 Bonds Principal Amount* Principal Amount* Maturity 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 *Preliminary, subject to change Interest Payment Dates: Legal Opinion: Payable March 1 and September 1, commencing September 1, 2004. Bryant Miller & Olive P.A., B-1 Tallahassee, Florida For copies of the Official Notice of Bond Sale and the Preliminary Official Statement of the City of Clearwater, Florida, please contact the City's Financial Advisor, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853. The Preliminary Official Statement may be obtained after , 2004 electronically through Image Master Financial Publishing Inc. at www.munios.com. B-2 EXHIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT C-l EXHIBIT D CONTINUING DISCLOSURE CERTIFICATE D-I EXHIBIT E COMMITMENT FOR MUNICIPAL BOND INSURANCE POLICY E-I EXHIBIT F ESCROW DEPOSIT AGREEMENT F-I EXHIBIT G ADDITIONAL COVENANTS WITH BOND INSURER G-I EXHIBIT H COMMITMENT FOR SURETY BOND INSURANCE POLICY G-l