05-17
RESOLUTION NO. 05-17
A RESOLUTION AUTHORIZING THE SALE OF NOT TO EXCEED $8,000,000
STORMW A TER SYSTEM REVENUE REFUNDING BONDS, SERIES 2005; SETTING
FORTH THE FORM OF THE NOTICE OF BOND SALE AND SUMMARY NOTICE
OF BOND SALE RELATING TO THE SALE OF SUCH BONDS; DIRECTING
PUBLICATION OF THE SUMMARY NOTICE OF SALE RELATING TO SUCH
BONDS; PROVIDING FOR THE OPENING OF BIDS RELATING TO THE SALE OF
THE BONDS; SETTING FORTH THE OFFICIAL NOTICE OF SALE AND BID
FORMS; PROVIDING THAT SUCH BONDS SHALL BE ISSUED IN FULL BOOK
ENTRY FORM; APPROVING THE FORM OF AN ESCROW DEPOSIT
AGREEMENT; APPROVING THE FORM OF A PRELIMINARY OFFICIAL
STATEMENT; PROVIDING FOR COMPLIANCE WITH A CONTINUING
DISCLOSURE CERTIFICATE; DESIGNATING A REGISTRAR AND PAYING
AGENT; DESIGNATING AN ESCROW HOLDER; AUTHORIZING THE
PURCHASE OF A MUNICIPAL BOND INSURANCE POLICY; PROVIDING
CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, on July 18, 2002, the City Council of the City of Clearwater, Florida (the "City"
or the "Issuer") enacted Ordinance No. 6931-02, amending Ordinance No. 6378-99 (collectively, the
"Bond Ordinance") to provide for the issuance of City's Stormwater System Revenue Bonds, Series
[to be determined], in one or more series from time to time payable from Parity Pledged Revenues
(as defined therein).
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CLEARWATER, FLORIDA, as follows:
SECTION 1. AUTHORIZATION OF BONDS AND SERIES DESIGNATION;
AUTHORIZATION TO REFUND BONDS. That portion of the Stormwater System Revenue
Refunding Bonds, Series 2005 authorized by the Bond Ordinance being offered pursuant to this
resolution is hereby designated as the not to exceed $8,000,000 City of Clearwater, Florida,
Stormwater System Revenue Refunding Bonds, Series 2005 (the "Series 2005 Bonds"), which Series
2005 Bonds are hereby authorized to be issued. The proceeds of the Series 2005 Bonds shall be used
to (i) advance refund a portion of the City's Stormwater System Revenue Bonds, Series 1999, (ii) pay
the costs of issuing the Series 2005 Bonds, (iii) pay the premium on the bond insurance policy, and
(iv) to make a deposit to the Reserve Fund.
The City's Stormwater System Revenue Bonds, Series 1999 maturing on and after November
1,2009 (the "Refunded Bonds") are hereby authorized to be refunded with the proceeds of the Series
2005 Bonds and other funds legally available to the City with a redemption date of November 1,
2008. The Finance Director is hereby authorized and directed to determine the amounts necessary
to defease the Refunded Bonds and the dates on which the Refunded Bonds will be redeemed.
Resolution No. 05-17
1
SECTION 2. PUBLIC SALE. There is hereby authorized to be sold pursuant to a public
sale not to exceed $8,000,000 City of Clearwater, Florida, Stormwater System Revenue Refunding
Bonds, Series 2005.
SECTION 3. SALE OF SERIES 2005 BONDS; REDEMPTION AND MATURITY
PROVISIONS. The Finance Director is hereby directed to arrange for the sale of the Series 2005
Bonds utilizing the electronic bid process of PARITY through the publication of the Summary
Notice of Sale of the Bonds in The Bond Buyer, 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 2005 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 Bond Sale hereinafter approved.
Proposals for purchase of the Series 2005 Bonds will be received electronically viaP ARITY
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, Stormwater
System Revenue Refunding Bonds, Series 2005; 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. DISPOSITION OF PROCEEDS OF SERIES 2005 BONDS. The proceeds
from the sale of the Series 2005 Bonds shall be deposited as follows:
(a) An amount equal to the accrued interest on the Series 2005 Bonds shall be deposited
into the Interest Account in the Bond Service Fund;
(b) An amount determined by the Finance Director to be necessary to pay the costs of
issuing the Series 2005 Bonds, including the premium due to the Bond Insurer shall be used to pay
such costs;
(c) 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;
(d) An amount determined by the Finance Director to be necessary to deposit with the
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2
Escrow Holder for deposit to the Escrow Account under the Escrow Deposit Agreement to defease
the Refunded Bonds.
(e) The remaining proceeds of the Series 2005 Bonds shall be deposited into the Debt.
Service Fund under the Bond Ordinance.
SECTION 5. APPROVAL OF FORMS. The Notice of Bond Sale and Summary Notice of
Sale of the Bonds to be submitted for purchase of the Series 2005 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 6. BOOK ENTRY ONLY BONDS. It is in the best interest of the City and the
residents and inhabitants thereof that the Series 2005 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
2005 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 7. 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 2005
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
2005 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 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 8. 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 2005 Bonds, as it may be amended
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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 9. REGISTRAR AND PAYING AGENT. Wells Fargo Bank, N.A., through its
designated office in Jacksonville, Florida, is hereby appointed as Registrar and Paying Agent for the
Series 2005 Bonds.
SECTION 10. ESCROW HOLDER. Wells Fargo Bank, N.A., through its designated office
in Jacksonville, Florida, is hereby appointed as Escrow Holder for the Series 2005 Bonds under the
respective Escrow Deposit Agreement, the form of which is to be used in connection with the
defeasance and redemption of the Refunded Bonds and is attached hereto as Exhibit G and
incorporated herein by reference is hereby approved. The Mayor, 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 "G" 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 to be redeemed,
and the Finance Director is hereby authorized to select the firm with the lowest bid to serve in such
capacity.
SECTION 11. FINANCIAL GUARANTY INSURANCE POLICIES. Pursuant to the Bond
Ordinance, MBIA Insurance Corporation ("MBIA") has been selected to provide its Financial
Guaranty 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 2005 Bonds.
Selection of MBIA as the Bond Insurer (as defined in the Bond Ordinance) is hereby ratified and
confirmed and payment for such Bond Insurance Policy from proceeds of the Series 2005 Bonds is
hereby authorized. The Issuer hereby accepts the terms, conditions and agreements relating to the
Bond Insurance Policy in accordance with the MBIA 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 2005 Bonds for the benefit and information of the holders of the Series 2005
Bonds.
For so long as the Bond Insurance Policy is applicable to the Series 2005 Bonds, the
additional provisions set forth on Exhibit "F" attached hereto shall be applicable to the Series 2005
Bonds. In addition to the covenants and agreements of the Issuer previously contained in the Bond
Resolution regarding the rights of the Bond Insurer which are incorporated herein, the Issuer
hereby covenants and agrees for the benefit of the Bond Insurer and the holders of the Series 2005
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Bonds while the Bond Insurance Policy insuring the Series 2005 Bonds is in full force and effect, to
provide the Bond Insurer with copies of any notices to be given to any party pursuant to the Bond
Resolution or this Resolution, and to provide prior notice to the Bond Insurer of any amendments to
the Bond Resolution or this Resolution.
(a) Any notice that is required to be given to a holder of the Bonds or to the Paying
Agent pursuant to the Bond Ordinance shall also be provided to the Bond Insurer. All notices
required to be given to the Bond Insurer under the Resolution shall be in writing and shall be sent
by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,
New York 10504, Attention: Insured Portfolio Management.
(b) The Insurer shall receive notice of any amendments to the Bond Ordinance or this
Resolution prior to the adoption of such amendments by the City.
(c) The City shall provide copies of all amendments to the Bond Ordinance or this
Resolution which required the consent of the Bond Insurer to Standard and Poors.
SECTION 12. AWARD OF BIDS. The Finance Director is hereby authorized to accept the
bids for the Series 2005 Bonds. The City Manager and the Finance Director are hereby authorized to
award the sale of the Series 2005 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 2005 Bonds. The City Manager and the Finance
Director are hereby authorized to award the sale of the Series 2005 Bonds as set forth above or to
reject all bids for the Series 2005 Bonds. Such award shall be final.
SECTION 13. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution are
inconsistent with the provisions of prior resolutions regarding the Series 2005 Bonds, provisions of
this Resolution shall control and supercede the inconsistent provisions of such Resolutions.
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SECTION 14. EFFECTIVE DATE. This resolution shall take effect immediately upon
adoption.
PASSED AND ADOPTED this 7th day of April ,2005.
CITY OF CLEARWATER, FLORIDA
1.--e ~
Wk Hibbard I
Mayor-
Approved as to form:
Attest:
~
Pamela K. Akin
City Attorney
c.......-
---:. ~
-.
Resolution No. 05-17
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EXHIBIT A
FORM OF
OFFICIAL NOTICE OF BOND SALE
$6,925,000*
CITY OF CLEARWATER, FLORIDA
STORMW A TER SYSTEM REVENUE REFUNDING BONDS, SERIES 2005
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 ,2005.
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, RBC
Dain Rauscher Inc., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701 Attn: Kevin
M. Conitz, telephone (727) 895-8853, or Parity at 40 West 23rd Street, New York, NY 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 2005 Bonds
The Series 2005 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 the date of their
delivery. Principal of the Series 2005 Bonds shall be paid to the registered owners at the designated
corporate trust office of Wells Fargo Bank, N.A. (the "Paying Agent" and "Registrar"), upon
presentment and surrender of the Series 2005 Bonds. Interest on the Series 2005 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 May 1 and November 1, commencing November 1, 2005. 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 2005 Bonds, payments of principal of, redemption premium, if any,
and interest on the Series 2005 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 2005 Bonds is the
responsibility of the DTC participants.
Initially one bond will be issued for each maturity of the Series 2005 Bonds in the aggregate
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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 2005 Bonds.
Purchases of the Series 2005 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 2005 Bonds
to furnish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the Series
2005 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined).
Maturity Schedule
The Series 2005 Bonds will mature on November 1 of the following years in the following
principal amounts:
Series 2005 Bonds*
Principal Principal Principal
Maturity Amount Maturity Amount Maturity Amount
11/01/2005 $ 25,000 11/01/2013 $245,000 11/01/2021 $335,000
11/01/2006 45,000 11/01/2014 255,000 11/01/2022 350,000
11/01/2007 45,000 11/01/2015 260,000 11/01/2023 365,000
11/01/2008 45,000 11/01/2016 275,000 11/01/2024 380,000
11/01/2009 220,000 11/01/2017 290,000 11/01/2025 395,000
11/01/2010 220,000 11/01/2018 300,000 11/01/2026 415,000
11/01/2011 230,000 11/01/2019 305,000 11/01/2027 435,000
11/01/2012 235,000 11/01/2020 325,000 11/01/2028 455,000
11/01/2029 475,000
*Preliminary, subject to change
Mandatory Redemption Provisions
If the Successful Bidder designates any Series 2005 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 2005 Bonds maturing on November 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 the principal amount thereof on the redemption date, on
November 1, 20---, and each November 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
Amortization
Installment
Year
Amortization
Installment
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Optional Redemption Provisions
The Series 2005 Bonds maturing on or before November 1, 2014 are not callable prior to their
maturity dates. The Series 2005 Bonds maturing after November 1, 2014 are subject to optional
redemption by the City, on and after November 1, 2014 as a whole, or in part, at any time, 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
November 1, 2014 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 2005 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 2005 Bonds, no rebidding or recalculation
of the bid submitted with respect to such Series 2005 Bonds will be required or permitted. If
necessary, the total purchase price of the Series 2005 Bonds will be increased or decreased in direct
proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series
2005 Bonds specified herein; and the Series 2005 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
2005 Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 2005
Bonds, without taking into account any adjustment in the amount of Series 2005 Bonds set forth in
the Bid Maturity Schedule.
Designation of Term Bonds
Bidders may specify that the annual Principal Amounts of the Series 2005 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 2005 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 2005 Bonds. The purchase price
bid for the Series 2005 Bonds may include a discount (including underwriters' discount and original
issue discount) not to exceed three percent (3.0%) of the principal amount of the Series 2005 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 three percent (3.0%) of the principal amount of the Series 2005 Bonds and
shall specify how much of such purchase price is original issue premium. The Series 2005 Bonds
will be insured by MBIA Insurance Corporation and the City will pay the bond insurance premium
from Bond proceeds. The purchase price bid for the Series 2005 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 2005 Bonds, to reject any or all
bids and to waive any irregularity or informality in any bid.
The Series 2005 Bonds will be awarded to the bidder (herein referred to as the "Successful
Bidder" as to the Series 2005 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 2005 Bonds. True
interest cost for the Series 2005 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 2005 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 November 1,
2005. The true interest cost shall be calculated from the dated date of the Series 2005 Bonds which
will be the expected closing date of the Series 2005 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 2005 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 2005 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 2005 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-
twentieth (1/20) of one percent. No difference greater than 4% will be permitted between the
highest and lowest rates of coupon interest specified. 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 2005 Bonds bear the same rate of interest, provided
that all Series 2005 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.
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Paying Agent and Registrar
The Paying Agent and Registrar for the Series 2005 Bonds is Wells Fargo Bank, N.A.,
through its designated office in Jacksonville, Florida.
Security
Principal of and interest on the Series 2005 Bonds to be issued pursuant to Ordinance No.
6931-02, as supplemented, and all required sinking fund, reserve and other payments shall be
payable solely from the Net Revenues of the City's Stormwater System, 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 2005 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 2005 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 2005 Bonds are being issued to refund a portion of the
City's Stormwater System Revenue Bonds, Series 1999, the costs of issuing the Series 2005 Bonds, to
purchase a Financial Guaranty Insurance Policy and to make a deposit to the Debt Service Reserve
Fund in the form of a debt service reserve fund surety policy.
Issuance of Series 2005 Bonds
The Series 2005 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 2005 Bonds
are being issued pursuant to Ordinance No. 6378-99 enacted by the City on April 15, 1999, as
supplemented by Ordinance No. 6931-02, enacted by the City on July 18, 2002, as further amended
and supplemented by Resolution No. 05-17, enacted by the City on April 7, 2005, as further
supplemented (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.
Financial Guaranty Insurance Policy
A commitment to issue a Financial Guaranty Insurance Policy guaranteeing payment of
principal and interest on the Series 2005 Bonds has been obtained from MBIA Insurance
Corporation.
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Proposals
Proposals for the Series 2005 Bonds are desired on forms which will be furnished by
PARITY, on behalf of the City, and be submitted electronically via PARITY.
All bidders must submit a "Good Faith Deposit" in the amount of $50,000 (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
thanll: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 wire 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 2005 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 2005 Bonds. Any interest earned on the good faith deposit will be
retained by and inure to the benefit of the City. If the Series 2005 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 2005 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 2005 Bonds in book entry only form will be available for
delivery on 1,20--, 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 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 2005 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 2005 Bonds will be delivered to the Successful Bidder of the Series 2005 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
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delivery of the Series 2005 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 2005 Bonds; (b) the name and address
of any attorney or financial consultant who advised the City with respect to the Series 2005 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 2005 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 2005 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 2005 Bonds, to furnish the City
with such information concerning the initial prices at which a substantial amount of the Series 2005
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 2005 Bonds as part of their bid
in the following form:
"The City of Clearwater, Florida, is proposing to issue $[ ] original
aggregate principal amount of Stormwater System Revenue Refunding Bonds, Series
2005, for the purpose of (i) advance refunding a portion of the City's Stormwater
System Revenue Bonds, Series 1999, (ii) pay the costs of issuing the Series 2005
Bonds, (iii) pay the premium on the bond insurance policy, and (iv) to make a
deposit to the Reserve Fund, all as further described in Ordinance No. 6931-02. The
final maturity date of the Series 2005 Bonds is November 1, 2029, and the Series 2005
Bonds are expected to be repaid over a period of twenty-four (24) years. At a
forecasted average interest rate of _ % per annum, total interest paid over the life
of the Series 2005 Bonds will be $ . The source of repayment or security
for this proposal is the City's Stormwater System Net Revenues (as defined in the
Ordinance) and moneys and investments held in the funds created under the said
Ordinance. Authorizing the Series 2005 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 2005 Bonds."
Legal Opinion
The Successful Bidder will be furnished, without cost, with the approvingopinion 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 2005
Bonds is not includable in the gross income of individuals, however, interest on the Series 2005
Bonds will be included in the calculation of the alternative minimum tax liabilities of corporations.
A-7
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 2005 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 2005 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 2005 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.
The Preliminary Official Statement will be available electronically from i-Deal LLC at
www.i-dealprospectus.com. which may be contacted at (212) 404-8104 for assistance in resolving
downloading problems; however, the printed version of the Preliminary Official Statement is the
only official version.
CUSIP Number
It is anticipated that CUSIP identification numbers will be printed on the Series 2005 Bonds,
but neither the failure to print such number on any Series 2005 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 2005 Bonds in accordance with its agreement to purchase the Series 2005 Bonds.
All expenses in relation to the printing of CUSIP numbers on the Series 2005 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, RBC Dain Rauscher Inc., 100 Second Avenue South, Suite 800, St. Petersburg,
Florida 33701, Attn: Kevin M. Conitz, telephone (727) 895-8853.
A-8
A-9
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 Frank Hibbard
Mayor
A-10
EXHIBIT B
FORM OF
SUMMARY NOTICE OF SALE
$6,925,000*
CITY OF CLEARWATER, FLORIDA
Stormwater System Revenue Refunding Bonds
Series 2005
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:
,2005
Time:
11:00 a.m., Clearwater, Florida Time
Bonds Dated: Date of Issuance
Maturities: Payable November 1 in the years and amounts as follows:
Series 2005 Bonds*
Principal Principal Principal
Maturity Amount Maturity Amount Maturity Amount
11/01/2005 $ 25,000 11/01/2013 $245,000 11/01/2021 $335,000
11/01/2006 45,000 11/01/2014 255,000 11/01/2022 350,000
11/01/2007 45,000 11/01/2015 260,000 11/01/2023 365,000
11/01/2008 45,000 11/01/2016 275,000 11/01/2024 380,000
11/01/2009 220,000 11/01/2017 290,000 11/01/2025 395,000
11/01/2010 220,000 11/01/2018 300,000 11/01/2026 415,000
11/01/2011 230,000 11/01/2019 305,000 11/01/2027 435,000
11/01/2012 235,000 11/01/2020 325,000 11/01/2028 455,000
11/01/2029 475,000
*Preliminary, subject to change
B-1
Interest
Payment Dates:
Payable May 1 and November 1, commencing November 1, 2005.
Legal Opinion:
Bryant Miller & Olive P.A.,
Tallahassee, Florida
For copies of the Official Notice of Bond Sale and the Preliminary Official Statement of the City
of Clearwater, Florida, please contact the City's Financial Advisor, RBC Dain Rauscher Inc., 100
Second A venue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin M. Conitz, telephone
(727) 895-8853. The Proposed Form is to be provided by PARITY.
The Preliminary Official Statement will be available electronically from i-Deal LLC at
www.i-dealprospectus.com. which may be contacted at (212) 404-8104 for assistance in resolving
downloading problems; however, the printed version of the Preliminary Official Statement is the
only official version.
B-1
EXHIBIT C
FORM OF PRELIMINARY OFFICIAL STATEMENT
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Preliminary Official Statement Dated March , 2005
NEW ISSUE - FULL BOOK-ENTRY
Ratings: Moody's: "Aaa" (MBIA Insured)
"A3" (Underlying)
S&P: "AAA" MBIA (Insured)
"A" (Underlying)
Fitch: "AAA""(MBIA Insured)
"A" (Underlying)
(see "RATINGS" herein)
In the opinion of Bond Counsel, assuming continuing compliance by the City with various covenants in the Series 2005 Ordinance, under existing
statutes, regulations and judicial decisions, the interest on the Series 2005 Bonds will be excludedfrom gross income for federal income tax purposes to the
owners thereof The Series 2005 Bonds are, under existing laws and regulations, also exempt from intangible taxes imposed pursuant to Chapter 199,
Florida Statutes. See "Tax Exemption" herein for a description of alternative minimum tax treatment and certain other tax consequences to owners of the
Series 2005 Bonds.
$6,925,000*
CITY OF CLEARWATER, FLORIDA
Stormwater System Revenue Refunding Bonds
Series 2005
Dated:
Date of Delivery
Due: November 1, as shown on the inside cover page
The Stormwater System Revenue Refunding Bonds, Series 2005 (the "Series 2005 Bonds") of the City of Clearwater, 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, N.A., Jacksonville, Florida, is acting as the Paying Agent and Bond Registrar for the Series 2005 Bonds. The Series 2005 Bonds will be purchased in
book-entry form only, in the denomination of $5,000 or any integral multiple thereof. There will be no physical delivery of bond certificates to individual
Bondholders. Interest on the Series 2005 Bonds will be payable semi-annually beginning on November 1,2005 and on each May I and November I thereafter.
Principal of and premium, ifany, on the Series 2005 Bonds will be payable at maturity or upon redemption prior to maturity.
The Series 2005 Bonds are subject to redemption prior to maturity as described herein.
The Series 2005 Bonds are being issued pursuant to the authority of and in full compliance with the charter of the City. the Constitution and the laws ofthe
State of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions oflaw, and Ordinance No. 6378-99 enacted by the City on April 7,
1999, as amended and supplemented by Ordinance No. 6931-02, enacted by the City on July 18,2002, as further amended and supplemented (the "Ordinance") for the
purpose of (i) advance refunding and redeeming on November I, 2008, $6,285,000 of the $6,885,000 Outstanding principal amount of the City's Stormwater System
Revenue Bonds, Series 1999; and (ii) paying certain costs of issuance of the Series 2005 Bonds, including the financial guaranty insurance premium. The Series 2005
Bonds and the interest thereon are payable solely from the Pledged Revenues, which consist of Net Revenues derived from the operation of the System and with
respect to each Series of Bonds, the moneys on deposit in the various funds and accounts created pursuant to the Ordinance allocable to such Series of Bonds, with the
exception of the Rebate Fund. The Series 2005 Bonds are issued on a parity with certain Oustanding Bonds of the City, as more particularly described herein and the
Ordinance permits the issuance of Additional Parity Obligations payable from the Net Revenues upon the conditions described herein under the caption "SECURITY
FOR THE SERIES 2005 BONDS. Additional Parity Obligations."
MBIA Insurance Corporation ("MBlA") has made a commitment to issue a financial guaranty insurance policy (the "Financial Guaranty Insurance Policy")
relating to the Series 2004 Bonds effective as of the date of issuance of the Series 2005 Bonds. F or a discussion of the terms and provisions of such policy, including
the limitations thereof, see "MUNICIPAL BOND INSURANCE" herein.
A1BIA
MATURITY SCHEDULE
(See enclosed Notice of Sale)
(Accrued interest to be added)
ELECTRONIC BIDS FOR THE SERIES 2005 BONDS WILL BE ACCEPTED
IN ACCORDANCE WITH THE OFFICIAL NOTICE OF SALE.
The Series 2005 Bonds are offered when, as and if issued and accepted by the Underwriter subject to the approval of legality by Bryant Miller & Olive, P.A.,
Tallahassee, Florida, Bond Counsel. 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. RBC Dain Rauscher Inc., St. Petersburg, Florida, is serving as Financial Advisor to the City. It is
expected that the Series 2005 Bonds, in definitive book-entry form, will be available for delivery through DTC in New York, New York on or about May , 2005.
March , 2005
* Preliminary, subject to change
CITY OF CLEARWATER, FLORIDA
ELECTED OFFI CIALS
MAYOR
Frank Hibbard
VICE MAYOR
Bill Jonson
CITY COUNCIL
Hoyt Hamilton
Carlen A. Petersen
John Doran
APPOINTED OFFICIALS
William B. Horne, II, City Manager
Pamela K. Akin, Esq., City Attorney
Margaret L. Simmons, CPA, Finance Director
BOND COUNSEL
Bryant Miller & Olive P.A.
Tallahassee, Florida
FINANCIAL ADVISOR
RBC Dain Rauscher Inc.
St. Petersburg, Florida
REGISTRAR AND PAYING AGENT
Wells Fargo Bank, N.A.
Jacksonville, Florida
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 2005 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 2005 Bonds or a solicitation of an offer to buy
nor shall there be any sale of the Series 2005 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, and
is not to be construed as a representation or contract, by the Underwriter. The
information and expressions of opinion herein are subject to change without notice and
neither the delivery ofthe Official Statement nor any sale made hereunder shall, under
any circumstances, 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 UNDERWRITER MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIES 2005 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 2005 Bonds have not been registered with the Securities and
Exchange Commission under the Securities Act of 1933, 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 2005 Bonds in accordance with
applicable provisions of the securities laws of the States, if any, in which the
Series 2005 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 2005 Bonds or the accuracy or
completeness of this Official Statement. Any representation to the contrary
may be a criminal offense.
TABLE OF CONTENTS
Page
INTRODU CTORY STATEMENT................................................................................. 1
THE REFUNDING PROGRAM ......................................... ............................. ..............3
DESCRIPTION OF THE SERIES 2005 BONDS ......................................................... 4
General..................................................................................................................... 4
Optional Redemption............................................................................................... 5
Mandatory Redemption............................................................................................ 5
Notice of Redemption............................................................................................... 6
Book-Entry Only System ...................... .......... ................ ......................................... 7
SECURITY FOR THE SERIES 2005 BONDS ........................................................... 10
Series 2005 Bonds Not a Debt of the City............................................................. 13
Outstanding Parity Obligations.......... ............... ................................................... 13
MUNICIPAL BOND INSURANCE ............................................................................13
The MBIA Insurance Corporation Insurance Policy............................................ 13
Debt Service Reserve Fund Surety Bond .............................................................. 15
MBIA....................................................................................................................... 16
MBIA Information.................................................................................................. 16
Financial Strength of MBIA .................................................................................. 17
DEBT SERVICE REQUIREMENTS .......................................................................... 19
SOURCES AND USES OF FUNDS............................................................................ 20
THE STORMWATER MANAGEMENT SySTEM..................................................... 21
FINAN CIAL STATEMENTS...................................................................................... 24
INVESTMENT POLl CY OF THE CITY..................................................................... 24
LEGALITY FOR INVESTMENT ................................................................................25
TAX EXEMPTION....................................................................................................... 26
RATINGS..................................................................................................................... 27
LITI GA TI 0 N................................................................................................................ 28
VERIFICATION OF MATHEMATICAL COMPUTATIONS .................................... 29
ADVISORS AND CONSULTANTS ..................... ................ .......................................29
CONTINUING DISCLOSURE.................................................................................... 30
ENFORCEABILITY OF REMEDIES ............................................. ........... ................. 30
CERTAIN LEGAL MATTERS.................................................................................... 31
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS................ 31
FINANCIAL ADVISOR............................................................................................... 32
MISCELLANEOUS......................................... ............................................................ 32
Appendices:
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
General Description of the City and Selected Statistics
Excerpts from the City's Comprehensive Annual Financial Report
for the Fiscal Year Ended September 30, 2004
Conformed Copy of Amended Ordinance
Form of Continuing Disclosure Certificate
Form of Bond Counsel Opinion
Form of Municipal Bond Insurance Policy
3
OFFICIAL STATEMENT
$6,925,000*
CITY OF CLEARWATER, FLORIDA
STORMWATER SYSTEM REVENUE REFUNDING BONDS, SERIES 2005
INTRODUCTORY STATEMENT
The purpose of this Official Statement, which includes the cover page and the
Appendices, is to provide information concerning the City of Clearwater, Florida (the
"City") and the City's $6,925,000* Stormwater System Revenue Refunding Bonds,
Series 2005 (the "Series 2005 Bonds"). The Series 2005 Bonds are issued pursuant 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. 6378-99
enacted by the City on April 15, 1999 (the "Ordinance"), as amended by Ordinance No.
6931-02, enacted by the City on July 18, 2002, as supplemented.
The Series 2005 Bonds are being issued for the purpose of (i) providing sufficient
funds on November 1, 2008, to pay and redeem $6,285,000 of the City's $7,500,000
Stormwater System Revenue Refunding Bonds, Series, 1999 (the "Series 1999 Bonds"),
which are currently Outstanding in the aggregate principal amount of $6,885,000 (the
refunded portion hereinafter referred to as the "Refunded Bonds"); and (ii) paying
certain costs of issuance of the Series 2005 Bonds, including the financial guaranty
insurance premium. The Series 2005 Bonds and the interest thereon are payable
solely from the Pledged Revenues, which are comprised of Net Revenues derived from
the operation of the System and with respect to such Series of Bonds, the moneys on
deposit in the various funds and accounts created pursuant to the Ordinance allocable
to each Series of Bonds, with the exception of the Rebate Fund. The Series 2005 Bonds
are the fourth Series of Bonds issued which are payable from Net Revenues of the
System. The City has previously issued the Series 1999 Bonds, which, after giving
effect to the refunding undertaken with the proceeds of the Series 2005 Bonds, will be
Outstanding in the aggregate principal amount of $600,000.00, $24,685,000 of its
Stormwater System Revenue Refunding Bonds, Series 2002 (the "Series 2002 Bonds"),
which are currently Outstanding in the aggregate principal amount of $23,800,000,
and $14,430,000 City of Clearwater, Florida Stormwater System Revenue Bonds,
Series 2004, which are currently Outstanding in the original aggregate principal
amount, all of which rank on a parity with the Series 2005 Bonds as to the pledge of
the Net Revenues. The scheduled payment of principal of and interest on the Series
2005 Bonds will be insured by a financial guaranty insurance policy to be issued
1
simultaneously with the delivery of the Bonds by MBIA Insurance Corporation
("MBIA"), as described herein. For a discussion of the terms and provisions of such
policy, including the limitations thereof, see "MUNICIPAL BOND INSURANCE"
herein. MBIA has also previously issued its reserve fund surety policy with respect to
the Series 1999 Bonds which will remain on deposit into the Reserve Fund in
satisfaction of the Reserve Fund Requirement applicable to the Series 2005 Bonds. (see
"SECURITY FOR THE Series 2005 Bonds - Reserve Account").
Neither the Series 2005 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 owner or owners of any Series 2005
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 form on any real or personal property of
the City, to pay the Series 2005 Bonds or the interest thereon. The City shall not be
obligated to pay the Series 2005 Bonds or any interest thereon except from the Pledged
Revenues, in the manner provided in the Ordinance referred to herein.
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 defined) which will always provide Net Revenues in each year
sufficient to pay one hundred fifteen percent (115%) of the Bond Service Requirement
becoming due in such year on the Outstanding Bonds.
The City may issue Additional Parity Obligations, payable on a parity from the
Net Revenues with the Series 2005 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 stormwater management 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 Parity Obligations 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 (as defined below in "Authority For Issuance") are contained in the
"Conformed Copy of Amended Ordinance" in Appendix C hereto.
The references, excerpts and summaries of all documents referred to herein do
not purport to be complete statements of the provisions of such documents, and
reference is directed to all such documents for full and complete statements of all
matters of fact relating to the Series 2005 Bonds, the security for the payment of the
Series 2005 Bonds, and the rights and obligations of holders thereof. The information
2
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 ofthe 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 2005 Bonds.
THE REFUNDING PROGRAM
Proceeds of the Series 2005 Bonds will be deposited into an escrow account (the
"Escrow Account") established with Wells Fargo Bank, N.A., Jacksonville, Florida, as
escrow agent (the "Escrow Agent") and invested in cash and/or direct obligations ofthe
United States in order to provide sufficient funds on November 1, 2008, to pay and
redeem $6,285,000 of the Series 1999 Bonds (the "Refunded Bonds"), at the redemption
price of 101% of the principal amount thereof, together with accrued and unpaid
interest thereon. Series 1999 Bonds coming due prior to November 1, 2009 in the
aggregate principal amount of $600,000.00 are not callable and are not being refunded
as a part of the refunding program.
Upon issuance of the Series 2005 Bonds and based upon the deposit into the
Escrow Fund of the cash and/or direct obligations into the Escrow Fund as described
above and the verification of the mathematical accuracy of the sufficiency thereof to
pay and redeem the Refunded Bonds as described above by a firm of independent
certified public accountants, Bond Counsel will deliver and opinion to the effect that
the Refunded Bonds will no longer be outstanding for purposes of the resolution under
which they were issued and the pledge of and lien on the Pledged Funds created by or
pursuant to said Resolution with respect to such Refunded Bonds will cease, terminate
and be discharged.
3
DESCRIPTION OF THE SERIES 2005 BONDS
General
The Series 2005 Bonds will be dated the date of initial issuance and delivery.
The Series 2005 Bonds will bear interest at the rates and mature on November 1 in the
amounts and at the times set forth on the cover page of this Official Statement. The
Series 2005 Bonds are to be issued as fully registered bonds in denominations of$5,000
or integral multiples thereof. Interest on the Series 2005 Bonds will be payable
semiannually on May 1 and November 1 of each year, commencing November 1, 2005,
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 15th day
(whether or not a business day) ofthe month preceding the interest payment date (the
"Record Date"). Owners of $1,000,000 or more in aggregate principal amount of Series
2005 Bonds may receive interest by wire transfer, at the Owner's expense, to a bank
account designated in writing by the Owner not later than the Record Date. Principal
of, and premium 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, N.A., Jacksonville, Florida, is acting as Paying Agent and
Bond Registrar for the Series 2005 Bonds.
The Series 2005 Bonds will be initially issued in the form of a single fully
registered Bond for each maturity ofthe Series 2005 Bonds. Upon initial issuance, the
ownership of each such Series 2005 Bonds will be registered in the registration books
kept by the Bond Registrar, in the name of Cede & Co., as nominee of The Depository
Trust Company, New York, New York ("DTC"). While held in book-entry form, all
payments of principal, interest and premium, if any, on the Series 2005 Bonds
will be made to DTC or the DTC Nominee as the sole registered owner of the
Series 2005 Bonds and payments to Beneficial Owners will be the
responsibility of DTC and the DTC Participants as described below. See
"Book-Entry Only System."
With respect to Series 2005 Bonds registered in the name of Cede & Co., as
nominee ofDTC, neither the City, nor the Paying Agent will have any responsibility or
obligation to any DTC Participant or to any indirect DTC Participant. See "Book-Entry
Only System" for the definition of "DTC Participant." Without limiting the
immediately preceding sentence, neither the City nor the Bond Registrar and the
Paying Agent will have any responsibility or obligation with respect to: (i) the accuracy
of the records of DTC or any DTC Participant with respect to any ownership interest in
4
the Series 2005 Bonds; (ii) the delivery to any DTC Participant or any other person
other than a registered owner, as shown in the registration books kept by the Bond
Registrar, of any notice with respect to the Series 2005 Bonds, including any notice of
redemption; or (iii) the payment to any DTC Participant or any other person, other
than a registered owner, as shown in the registration books kept by the Bond
Registrar, of any amount with respect to principal of, premium, if any, or interest on
the Series 2005 Bonds. The City, the Bond Registrar and the Paying Agent may treat
and consider the person in whose name each Series 2005 Bonds is registered in the
registration books kept by the Bond Registrar as the holder and absolute owner of such
Bond for the purpose of payment of principal of, premium, if any, and interest with
respect to such Bond, for the purpose of giving notices of redemption and other matters
with respect to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Paying Agent will pay all principal
of, premium, if any, and interest on the Series 2005 Bonds only to or upon the order of
the respective registered owners, as shown in the registration books kept by the Bond
Registrar, or their respective attorneys duly authorized in writing, as providedin 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 2005 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 ofthe City to make
payments of principal of, premium, if any, and interest on the Series 2005 Bonds
pursuant to the provisions of the Ordinance.
Optional Redemption
The Series 2005 Bonds maturing on or before November 1, 2014 are not
callable prior to their maturity dates. The Series 2005 Bonds maturing after
November 1, 2014 are subject to optional redemption by the City, on and after
November 1, 2014, as a whole or in part at any time thereafter, from the maturities
selected by the City, and by lot within a maturity if less than an entire maturity is
redeemed, at the redemption price of the par amount thereof, together with accrued
interest to the date of redemption.
Mandatory Redemption
If the Successful Bidder designates any Series 2005 Bonds as term bonds as
described under "Designation of Term Bonds" in the Notice of Sale, the following
mandatory redemption provisions will apply with respect to such designated term
bonds:
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The Series 2005 Bonds maturing on November 1, will be subject to mandatory
redemption prior to maturity, by lot, in such manner as the Registrar may deem
appropriate, at a redemption price equal to the principal amount thereof plus interest
accrued to the redemption date, on November 1, , and on each November 1
thereafter, in the following principal amounts in the years specified:
Year
Amortization
Installment
Year
Amortization
Installment
As long as the book-entry-only system is used for determining beneficial ownership
ofthe Series 2005 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 2005 Bonds.
Notice of Redemption
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 ofthe Series 2005 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 2005 Bonds. Interest shall cease to accrue on any
Series 2005 Bonds duly called for prior redemption, after the redemption date, if
payment thereof has been duly provided.
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Book-Entry Only System
The Series 2005 Bonds will be available in book-entry form only, in denominations
of $5,000 or any integral multiple thereof. Purchasers of the Series 2005 Bonds will
not receive certificates representing their interests in the Series 2005 Bonds
purchased. The Underwriter is to confirm original issuance purchases with statements
containing certain terms of the Series 2005 Bonds purchased.
The following information regarding The Depository Trust Company, New York,
New York ("DTC") and the book-entry only system of registration has been obtained by
the City from DTC. No representation is made by the City as to its accuracy or
correctness.
The Series 2005 Bonds will be held by DTC as securities depository. The
ownership of one fully registered Series 2005 Bonds for each maturity, as set forth on
the cover page hereof, will be registered in the name of Cede & Co., as nominee for
DTC. DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered pursuant
to the provisions of Section 17 A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of its participants ("DTC Participants") and to
facilitate the settlement of securities transactions among DTC Participants in such
securities through electronic computerized book-entry changes in accounts ofthe DTC
Participants, thereby eliminating the need for physical movement of securities
certificates. Direct Participants include securities brokers and dealers, banks, trust
cornpanies, clearing corporations, and certain other organizations, some of which own
DTC either directly or through their representatives. Access to the DTC system is also
available to other entities such as security brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant.
Purchases of the Series 2005 Bonds may be made by or through brokers and
dealers who are, or act through, DTC Participants. Such DTC Participants and the
persons for whom they acquire interests in the Series 2005 Bonds as nominees will not
receive certificated bonds, but each DTC Participant will receive a credit balance in the
records of DTC in the amount of such DTC Participant's interest in the Series 2005
Bonds, which will be confirmed in accordance with DTC's standard procedures. The
ownership interest of the actual purchaser of each Bond (the "Beneficial Owner") will
be recorded in the records of the DTC Participant. DTC Participants are required to
provide Beneficial Owners with a written confirmation of their purchase containing
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details of the acquired Series 2005 Bonds. Transfers of ownership interests in the
Series 2005 Bonds will be accomplished by book entry made by DTC and by the DTC
Participants who act on behalf of the Beneficial Owners.
The Paying Agent will make payments of principal of, redemption premium, if any,
and interest on the Series 2005 Bonds to DTC or its nominee, Cede & Co., as registered
owner of the Series 2005 Bonds. The current practice ofDTC is to credit the accounts
of the DTC Participants immediately upon receipt of moneys in accordance with their
respective holdings as shown on the records ofDTC. Payments by DTC Participants to
Beneficial Owners will be in accordance with standing instructions and customary
practices such as those which are now in effect for municipal securities held by DTC
Participants in bearer form or registered in "street name" for the accounts of
customers, and will be the responsibility ofDTC Participants and not the responsibility
of DTC, the Paying Agent or the City subject to any statutory or regulatory
requirements as may be in effect from time to time.
The Bond Registrar, the Paying Agent and the City will send any notice of
redemption or other notice only to DTC. Any failure of DTC to advise any DTC
Participant, or of any DTC Participant to notify the Beneficial Owner, of any such
notice and its content or effect will not affect the validity of the redemption of the
Series 2005 Bonds called for redemption or of any other action premised on such notice.
Redemption of portions of any maturity of the Series 2005 Bonds will reduce the
outstanding principal amount of such maturity held by DTC. In such event, DTC may
implement, through its book-entry system, a redemption of Series 2005 Bonds held for
the account of DTC Participants in accordance with its own rules or other agreements
with DTC Participants, and then DTC Participants may implement a redemption of
Series 2005 Bonds for the Beneficial Owners.
NEITHER THE CITY NOR THE BOND REGISTRAR OR THE PAYING
AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC
PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS ACT
AS NOMINEES WITH RESPECT TO THE SERIES 2005 BONDS OR THE
PROVIDING OF NOTICE OR PAYMENT TO DTC PARTICIPANTS OR
BENEFICIAL OWNERS OR THE SELECTION OF SERIES 2005 BONDS FOR
REDEMPTION.
In the event of an insolvency of DTC, if DTC has insufficient securities in the
fungible bulk of securities in its custody (e.g., due to theft or loss) to satisfy the claims
ofDTC Participants with respect to deposited securities and is unable by application of
(i) cash deposits and securities pledged to DTC to protect DTC against losses and
liabilities; (ii) the proceeds of insurance maintained by DTC and/or DTC Participants;
or (iii) other resources, to obtain securities necessary to eliminate the insufficiency,
DTC Participants may not be able to obtain all of their deposited securities.
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The City, the Bond Registrar and the Paying Agent cannot give any assurances
that DTC, DTC Participants or others will distribute payments of principal of,
premium, if any, and interest on the Series 2005 Bonds paid to DTC or its nominee, or
any redemption or other notices to the Beneficial Owners or that they will do so on a
timely basis or that DTC will serve or act in a manner described in this Official
Statement.
DTC may determine to discontinue providing its services with respect to the Series
2005 Bonds at any time by giving notice to the City and discharging its responsibilities
with respect thereto under applicable law. In addition, the City may determine to
discontinue the use of book-entry transfers through DTC (or any successor securities
depository). Under such circumstances, the City and the Bond Registrar will
authenticate and deliver certificated Series 2005 Bonds.
In the event that the book-entry only system is discontinued, the following
provisions will govern the transfer and exchange of Series 2005 Bonds. The Series
2005 Bonds will be exchanged for an equal aggregate principal amount of
corresponding bonds in other authorized denominations and of the same series and
maturity, upon surrender thereof at the principal corporate trust office of the Bond
Registrar. The transfer of any Series 2005 Bonds will be registered on the books
maintained by the Bond Registrar for such purpose only upon the surrender thereof to
the Bond Registrar with a duly executed written instrument of transfer in form and
with guaranty of signatures satisfactory to the Bond Registrar, containing written
instructions as to the details of transfer of such Series 2005 Bonds, along with the
social security number or federal employer identification number of such transferee.
The City and the Bond Registrar may charge the registered owners a sum sufficient to
reimburse them for any expenses incurred in making any exchange or transfer after
the first such exchange or transfer following the delivery ofthe Series 2005 Bonds. The
Bond Registrar or the City may also require payment from the registered owners or
their transferees, as the case may be, of a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in relation thereto. Such charges and
expenses shall be paid before any such new Series 2005 Bonds shall be delivered.
Neither the City nor the Bond Registrar shall be required to register the transfer or
exchange of any Series 2005 Bonds during the period commencing on the fifteenth day
(w hether 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 2005 Bonds, after such Series 2005 Bonds or any portion thereof has been
selected for redemption.
9
SECURITY FOR THE SERIES 2005 BONDS
Net Revenues. The principal of and premium, if any, and interest on the Series
2005 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 stormwater management system of the City (the "System").
"Net Revenues" are defined by the Ordinance to include all income or earnings,
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 2005 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 2005 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 2005 Bonds or to make any ofthe required debt service, reserve
or other payments, and any failure to pay the Series 2005 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,
revise from time to time whenever necessary, maintain and collect always such fees,
rates, rentals and other charges for the use of the products, services and facilities of
the System which will always provide Net Revenues in each year sufficient to pay one
hundred fifteen percent (115%) of the Bond Service Requirement coming due in such
year on the Outstanding Bonds. Such rates, fees, rentals or other charges may not be
reduced so as to render them insufficient to provide revenues for the purposes provided
therefor by the Ordinance.
Reserve Fund. The Ordinance creates a separate account in the Reserve
Fund to be funded, or into which there has been deposited a reserve fund surety policy
providing coverage, in an amount equal to the Reserve Requirement applicable to the
respective series of Bonds issued under the Ordinance. The City will satisfy the
Reserve Requirement" applicable to the Series 2005 Bonds with the retention in the
Reserve Fund of the Reserve Fund Surety deposited in connection with the issuance of
the Series 1999 Bonds.
Additional Parity Obligations. Additional Parity Obligations, payable on a
parity from the Net Revenues with the Series 2005 Bonds, may be issued for the
purpose of refunding a part of the outstanding Bonds or financing the cost of
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extensions, additions and improvements to the System and for the acquisition and
construction of, and extensions, additions and improvements to stormwater
management systems which are to be consolidated with the System and operated as a
single combined utility. Additional Parity Obligations, 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 and the Net Revenues have been reviewed by an independent
certified public accountant; and (b) the amount of the Net Revenues derived for any
consecutive twelve (12) months out ofthe preceding twenty-four (24) months preceding
the date of issuance ofthe proposed Additional Parity Obligations as adjusted pursuant
to paragraphs 2,3,4 and/or 5 below, is equal to not less than 120% of the Maximum
Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds
issued under the Ordinance, if any, then Outstanding, and (ii) on the Additional Parity
Obligations with respect to which such certificate is made.
(2) Upon recommendation of the Consulting Engineers, the Net
Revenues certified pursuant to paragraph 1(b) above may be adjusted by including: (a)
100% ofthe additional Net Revenues which in the opinion ofthe Consulting Engineer
would have been derived by the City from rate increases adopted before the Additional
Parity Obligations are issued, if such rate increases had been implemented during the
test period described in paragraph 1(b) above, 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 ofthe System are extended, enlarged, improved
or added to with the proceeds of the Additional Parity Obligations with respect to
which such certificate is made.
(3) Upon recommendation of the Consulting Engineers if the
Additional Parity Obligations are to be issued for the purpose of acquiring an existing
stormwater system and/or any other utility system, the Net Revenues certified
pursuant to paragraph l(b) above may be adjusted by including: 80% ofthe additional
estimated Net Revenues which in the written opinion of the Consulting Engineers will
be derived from the acquired facility during the first full 12-month period after the
issuance of such Additional Parity Obligations (the Consulting Engineers' report shall
be based on the actual operating revenues ofthe acquired utility for a recent 12-month
period adjusted to reflect the City's ownership and the City's rate structure in effect
with respect to the System at the time of the issuance of the Additional Parity
Obligations).
(4) Upon recommendation ofthe Consulting Engineer, ifthe City shall
have entered into a contract, which contract shall be for a duration of not less than the
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final maturity of the proposed Additional Parity Obligations, with any public body,
whereby the City shall have agreed to furnish any services creating Gross Revenues,
then the Net Revenues certified pursuant to paragraph 1(b) above may be increased (to
the extent such amounts were not otherwise reflected in such Net Revenues) by the
minimum amount which the public body shall guarantee to pay in anyone year for the
furnishing of services by the City, after deducting from such payment the estimated
Cost of Operation and Maintenance attributable in such year to such services.
(5) Upon recommendations ofthe Consulting Engineers, ifthere is an
estimated increase in Net Revenues to be received by the City as a result of additions,
extensions or improvements to the System during the period of three (3) years
following the completion of such additions, extensions or improvements financed with
the proceeds of Bonds or Additional Parity Obligations, then the Net Revenues certified
pursuant to paragraph 1(b) above shall be increased by fifty percent (50%) of the
average annual additional Net Revenues calculated for such three year period.
(6) The City need not comply with the provisions of paragraph 1 above
if and to the extent the Bonds to be issued are refunding bonds, and if the City shall
cause to be delivered a certificate ofthe Finance Director setting forth the Bond Service
Requirements (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be
immediately Outstanding thereafter and stating that the Bond Service Requirements
in any particular year pursuant to (ii) above is not greater than the Bond Service
Requirements in the corresponding year set forth pursuant to (i) above.
(7) The City need not comply with the provisions of paragraph 1 above
if and to the extent the Bonds to be issued are for the purpose of providing any
necessary additional funds required for completion of any improvements to the System
("Completion Bonds") if originally financed with the proceeds of Bonds; provided that
such Completion Bonds for which the City need not comply with the provision of such
paragraph (1) above may not exceed 10% of the total principal amount of Bonds
estimated to be required for such improvements to the System at the time of issuance
of the initial Series of Bonds to finance such improvements.
(8) The City shall not be in default in the carrying out of any of the
obligations assumed under this Ordinance and no event of default shall have occurred
under this Ordinance and shall be continuing, and all payments required by this
Ordinance to be made into the funds and accounts established hereunder shall have
been made to the full extent required.
(9) The ordinance or resolution authorizing the issuance of the
Additional Parity Obligations shall recite that all of the covenants contained herein
will be applicable to such Additional Parity Obligations.
12
See Appendix C, "Conformed Copy of Amended Ordinance."
Series 2005 Bonds Not a Debt of the City
The Series 2005 Bonds shall not constitute a general obligation or 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 compel the exercise ofthe 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 2005 Bonds or to
compel the City to pay such principal and interest from any other funds of the City
except the Pledged Revenues. The Series 2005 Bonds shall not constitute a lien upon
any property of or in the City, but shall constitute a lien only on the Pledged Revenues
all in the manner provided in the Ordinance.
Outstanding Parity Obligations
The City has previously issued $7,500,000 of its Stormwater System Revenue
Refunding Bonds, Series, 1999 (the "Series 1999 Bonds"), which are currently
Outstanding in the aggregate principal amount of $6,885,000 of which $6,285,000 are
being advance refunded with the proceeds of the Series 2005 bonds, $24,685,000 of its
Stormwater System Revenue Refunding Bonds, Series 2002 (the "Series 2002 Bonds"),
which are currently Outstanding in the aggregate principal amount of $23,800,000,
and $14,430,000 City of Clearwater, Florida Stormwater System Revenue Bonds,
Series 2004, which are currently Outstanding in the original aggregate principal
amount, all of which rank on a parity with the Series 2005 Bonds as to the pledge of
the Net Revenues. It is anticipated that the City will issue Additional Parity
Obligations in 2006, 2008, 2010, 2012 and 2014 to fund additional capital
improvements to the stormwater system.
MUNICIPAL BOND INSURANCE
The MBIA Insurance Corporation Insurance Policy
The following information has been furnished by MBIA Insurance Corporation
("MBIA") for use in this Official Statement. Reference is made to Appendix F for a
specimen of MBIA's policy.
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The MBIA Policy unconditionally and irrevocably guarantees the full and
complete payment required to be made by or on behalf of the Company to the Paying
Agent or its successor of an amount equal to (i) the principal of (either at the stated
maturity or by an advancement of maturity pursuant to a mandatory sinking fund
payment) and interest on, the Series 2005 Bonds as such payments shall become due
but shall not be so paid (except that in the event of any acceleration ofthe due date of
such principal by reason of mandatory or optional redemption or acceleration resulting
from default or otherwise, other than any advancement of maturity pursuant to a
mandatory sinking fund payment, the payments guaranteed by the MBIA Policy shall
be made in such amounts and at such times as such payments of principal would have
been due had there not been any such acceleration, unless MBIA elects in its sole
discretion, to pay in whole or in part any principal due by reason of such acceleration);
and (ii) the reimbursement of any such payment which is subsequently recovered from
any Owner of the Series 2005 Bonds pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to such
Owner within the meaning of any applicable bankruptcy law (a "Preference").
MBIA's policy does not insure against loss of any prepayment premium which
may at any time be payable with respect to any Series 2005 Bond. MBIA's policy does
not, under any circumstance, insure against loss relating to: (i) optional or mandatory
redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be
made on an accelerated basis; (iii) payments ofthe purchase price of Series 2005 Bonds
upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii)
above. MBIA's policy also does not insure against nonpayment of principal of or
interest on the Series 2005 Bonds resulting from the insolvency, negligence or any
other act or omission of the Paying Agent or any other paying agent for the Series 2005
Bonds.
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of written notice by
registered or certified mail, by MBIA from the Paying Agent or any owner of a Series
2005 Bond the payment of an insured amount for which is then due, that such required
payment has not been made, MBIA 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 U.S. Bank Trust National Association, in New
York, New York, or its successor, sufficient for the payment of any such insured
amounts which are then due. Upon presentment and surrender of such Series 2005
Bonds or presentment of such other proof of ownership of the Series 2005 Bonds,
together with any appropriate instruments of assignment to evidence the assignment
of the insured amounts due on the Series 2005 Bonds as are paid by MBIA, and
appropriate instruments to effect the appointment ofMBIA as agent for such owners of
the Series 2005 Bonds in any legal proceeding related to payment of insured amounts
on the Series 2005 Bonds, such instruments being in a form satisfactory to U.S. Bank
14
Trust National Association, U.S. Bank Trust National Association shall disburse to
such owners or the Paying Agent payment of the insured amounts due on such Series
2005 Bonds, less any amount held by the Paying Agent for the payment of such insured
amounts and legally available therefor.
Debt Service Reserve Fund Surety Bond
MBIA has previously issued a surety bond (the "Debt Service Reserve Fund
Surety Bond") to satisfy the Reserve Account Requirement applicable to the 1999
Bonds and has issued a commitment to continue the Debt Service Reserve Fund Surety
Bond in full force and effect to satisfy the Reserve Fund Requirement applicable to the
Series 2005 Bonds. The Debt Service Reserve Fund Surety Bond provides that upon
notice from the Paying Agent to the MBIA to the effect that insufficient amounts are on
deposit in the Debt Service Fund to pay the principal of (at maturity or pursuant to
mandatory redemption requirements) and interest on the Series 2005 Bonds, the MBIA
will promptly deposit with the Paying Agent an amount sufficient to pay the principal
of and interest on the Series 2005 Bonds or the available amount of the Debt Service
Reserve Fund Surety Bond, whichever is less. Upon the later of: (i) three (3) days after
receipt by the MBIA of a Demand for Payment in the form attached to the Debt Service
Reserve Fund Surety Bond, duly executed by the Paying Agent; or (ii) the payment
date ofthe Series 2005 Bonds as specified in the Demand for Payment presented by the
Paying Agent to the MBIA, the MBIA will make a deposit of funds in an account with
U.S. Bank Trust National Association, in New York, New York, or its successor,
sufficient for the payment to the Paying Agent, of amounts which are then due to the
Paying Agent (as specified in the Demand for Payment) subject to the Surety Bond
Coverage.
The available amount of the Debt Service Reserve Fund Surety Bond is the
initial face amount of the Debt Service Reserve Fund Surety Bond less the amount of
any previous deposits by the MBIA with the Paying Agent which have not been
reimbursed by the City. The City and the MBIA have previously entered into a
Financial Guaranty Agreement (the "Agreement"). Pursuant to the Agreement, the
City is required to reimburse the MBIA, within one year of any deposit, the amount of
such deposit made by the MBIA with the Paying Agent under the Debt Service Reserve
Fund Surety Bond. Such reimbursement shall be made only after all required deposits
to the Debt Service Fund have been made.
Under the terms of the Agreement, the Paying Agent is required to reimburse
the MBIA, with interest, until the face amount of the Debt Service Reserve Fund
Surety Bond is reinstated before any deposit is made to the Revenue Fund. No
optional redemption of Series 2005 Bonds may be made until the MBIA's Debt Service
Reserve Fund Surety Bond is reinstated. The Debt Service Reserve Fund Surety Bond
15
will be held by the Paying Agent in the Debt Service Reserve Fund and is provided as
an alternative to the City depositing funds equal to the Debt Service Requirement for
outstanding Series 2005 Bonds. The Debt Service Reserve Fund Surety Bond will be
maintained in the face amount equal to the Reserve Fund Requirement applicable to
the Series 2005 Bonds and the premium therefor has been fully paid by the City.
MBIA
MBIA Insurance Corporation ("MBIA") is the principal operating subsidiary of
MBIA Inc., a New York Stock Exchange listed company (the "Company"). The
Company is not obligated to pay the debts of or claims against MBIA. MBIA is
domiciled in the State of New York and licensed to do business in and subject to
regulation under the laws of all 50 states, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth ofthe Northern Mariana Islands, the Virgin Islands
of the United States and the Territory of Guam. MBIA has three branches, one in the
Republic of France, one in the Republic of Singapore and one in the Kingdom of Spain.
New York has laws prescribing minimum capital requirements, limiting classes and
concentrations of investments and requiring the approval of policy rates and forms.
State laws also regulate the amount of both the aggregate and individual risks that
may be insured, the payment of dividends by MBIA, changes in control and
transactions among affiliates. Additionally, MBIA is required to maintain contingency
reserves on its liabilities in certain amounts and for certain periods of time.
MBIA does not accept any responsibility for the accuracy or completeness ofthis
Official Statement or any information or disclosure contained herein, or omitted
herefrom, other than with respect to the accuracy of the information regarding the
policy and MBIA set forth under the heading "MUNICIPAL BOND INSURANCE."
Additionally, MBIA makes no representation regarding the Series 2005 Bonds or the
advisability of investing in the Series 2005 Bonds.
MBIA Information
The following documents filed by the Company with the Securities and Exchange
Commission (the "SEC") are incorporated herein by reference:
(1) The Company's Annual Report on Form lO-K for the year ended
December 31,2003; and
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act of 1934, as amended, after the date of the Company's most
recent Quarterly Report on form 10-Q, and prior to the termination of the offering of
16
the Series 2005 Bonds offered hereby shall be deemed to be incorporated by reference
in this Official Statement and to be a part hereof. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein, or contained
in this Official Statement, shall be deemed to be modified or superseded for purposes of
this Official Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to constitute a
part of this Official Statement.
The Company files annual, quarterly and special reports, information
statements and other information with the SEC under File No. 1-9583. Copies ofthe
SEC filings (including (1) the Company's Annual Report on Form lO-K for the year
ended December 31,2003, and (2) the Company's Quarterly Reports on Form lO-Q for
the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004) are
available (i) over the Internet at the SEC's web site at http://www.sec.g-ov; (ii) at the
SEC's public reference room in Washington D.C.; (iii) over the Internet at the
Company's web site at http://www.mbia.com; and (iv) at no cost, upon request to MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504. The telephone
number ofMBIA is (914) 273-4545.
As of December 31, 2003, MBIA had admitted assets of $9.9 billion (audited),
total liabilities of $6.2 billion (audited), and total capital and surplus of $3.7 billion
(audited) determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities. As of September 30, 2004 MBIA had
admitted assets of $10.4 billion (unaudited), total liabilities of $6.7 billion (unaudited),
and total capital and surplus of $3.7 billion (unaudited) determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities.
Financial Strength of MBIA
Moody's Investors Service, Inc. rates the financial strength ofMBIA "Aaa."
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the
financial strength of MBIA "AAA."
Fitch Ratings rates the financial strength of MBIA "AAA."
Each rating ofMBIAshould be evaluated independently. The ratings reflect the
respective rating agency's current assessment ofthe creditworthiness ofMBIA and its
ability to pay claims on its policies of insurance. Any further explanation as to the
17
significance of the above ratings may be obtained only from the applicable rating
agency.
The above ratings are not recommendations to buy, sell or hold the Series 2005
Bonds, and such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of any ofthe above ratings may
have an adverse effect on the market price of the Series 2005 Bonds. MBIA does not
guaranty the market price of the Series 2005 Bonds nor does it guaranty that the
ratings on the Series 2005 Bonds will not be revised or withdrawn.
The insurance provided by this policy is not covered by the Florida Insurance
Guaranty Association created under chapter 631, Florida Statutes.
18
Fiscal
Year
Endine:
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
DEBT SERVICE REQUIREMENTS
Parity Bonds
Debt
Service
Series 2005
Bonds
Principal
19
Series 2005
Bonds
Interest
Series 2005
Bonds
Total
SOURCES AND USES OF FUNDS
SOURCES OF FUNDS
Par Amount of Bonds
Accrued Interest
Less: Net Original Issue Discount
Less: Underwriter's Discount
TOTAL SOURCES
USES OF FUNDS
Deposit to Debt Service Fund
Deposit to Escrow Fund
Costs of Issuance (1)
TOTAL USES
(1) Includes costs of issuance, municipal bond insurance premium. No premium
has been charged for the retention in the Reserve Fund of the reserve fund surety
deposited in connection with the issuance of the Series 1999 Bonds.
20
THE STORMWATER MANAGEMENT SYSTEM
Physical Description
The City of Clearwater was created in 1923 by Chapter 9710, Special Laws of
Florida, with all governmental, corporate and proprietary powers to enable it to
conduct municipal government, perform municipal functions and render municipal
services, and to exercise any power for municipal purposes except where expressly
prohibited by law. A major municipal function of the City of Clearwater is the efficient,
economic, and safe operation of the City stormwater infrastructure for the health,
safety, and general welfare of the public. The management of stormwater in the City
was established in 1991 as a city utility enterprise in accordance with Florida Statutes
and funded by a stormwater utility fee for stormwater management service, levied
against all developed property within the City to provide planning, design,
construction, operation, maintenance, regulation, surveying, and inspection of the
stormwater management facilities within the City. Those services provide system
management for approximately 120 miles of storm sewers, 9 square miles of open
water, and more than 14,400 structures (e.g. culverts, flumes, weirs, catch basins, etc.)
to manage drainage for the City, having a population of approximately 108,000
permanent residents and 20,000 winter residents.
Management
The City has a Council-Manager form of municipal government. The Mayor and
Council Members are elected by the City voters on an at-large basis. All have voting
power at Council meetings which are chaired by the Mayor. The City Council appoints
the City Manager and the City Manager is responsible for appointing all officers and
employees in the administrative service of the City, including the Public Works
Administrator.
Public Works Administration is administered by the Public Works Administrator
who reports to the City Manager through the Assistant City Manager. The stormwater
system is one of seven utilities (Water, Sewer, Reclaimed Water, Gas, Solid Waste,
Recycling, and Stormwater) billed on a consolidated basis by the Clearwater Utility
Customer Service Department.
Mahshid D. Arasteh, P.E. serves as the Public Works Administrator. She
received her Bachelor of Science Degree in Civil and Urban Engineering from the
University of Pennsylvania in 1980 and her Masters of Science Degree in Civil and
Urban Engineering, Mechanical Engineering and Applied Mechanics in 1982. She is a
21
member ofthe Florida Engineering Society and the Institute of Traffic Engineers, and
has been a registered Professional Engineer in the state of Florida since 1987.
Michael D. Quillen, P.E. serves as the Director ofthe Engineering Department
and reports to the Public Works Administrator. He received his Bachelor of Science
Degree in Civil Engineering from Purdue University in 1977. He is a member of the
Florida Engineering Society and has been a registered Professional Engineer in the
state of Florida since 1983.
Gary A. Johnson, C.G.C., serves as the Public Service Director. He received his
Bachelor of Building Construction degree in 1977 from the University of Florida and in
1979, obtained his General Contractor License from the State of Florida. He continues
to serve on the Pinellas County Public W or ks Academy Board of Trustees, a position he
has held since 1989.
Rates, Fees and Charges
The City uses a measurement of one equivalent residential unit or ERU as the
basis for the storm water management utility fee. The rate per ERU was unchanged
from the inception of the utility on January 1, 1991 until 1998 when annual increases
were adopted for five fiscal years beginning October 1, 1998. In November, 2001,
additional increases were adopted including a change to the increase previously
adopted to be effective on October 1, 2002. The monthly rates at inception and as
adopted in 1998, 2001 and 2004 and are:
22
Effective Date
Rate Per
ERU
January 1, 1991 $3.00
October 1, 1998 4.00
October 1, 1999 4.17
October 1, 2000 4.35
October 1, 2001 4.54
January 1, 2002 6.13
October 1, 2002 7.16
October 1, 2003 8.01
October 1, 2004 8.65
October 1, 2005 9.35
October 1, 2006 9.63
October 1, 2007 9.92
October 1, 2008 10.22
Single-family homes, multifamily units, condominium units, apartments and
mobile homes are rated as one ERU per dwelling unit. Nonresidential property is
charged at the rate of 1,830 square feet of impervious area per ERU.
23
Historical Net Revenues
2000 2001 2002 2003 2004
(unaudited)
Gross Revenues $4,938,338 $5,323,293 $6,846,086 $8,660,373 $9,679,809
Expenses 3,183 260 3,608,281 3,957,577 4,727,187 5,922,765
Net Revenues Available
for Debt Service $1,755 078 $1,715,012 $2,888,509 $3,933,186 $3,757,044
Projected Maximum
Annual Debt Service (1) $2,900 000 $2,900,000 $2,900,000 $2,900,000 $2,900,000
(1) Estimated maximum debt service on the unrefunded Series 1999, the Series,
the Series 2003 Bonds, the 2004 Bonds and the Series 2005 Bonds and accrues each year
through 2030.
Note: The periods shown are periods during which Bonds have been Outstanding.
With little undeveloped property in the City and no rate increase from the Utility's
inception in 1991 until 1999, revenues remained flat while expenses such as personnel
services, professional fees, interfund charges and repairs and maintenance have
increased significantly. Rate increases of33.3% for 1999 and 4.3% for each subsequent
year through 2003 were approved in August, 1998. In November, 2001, to fund
significant increases in the stormwater system capital improvement program, rate
increases to $6.13 effective January 1, 2002, to $7.16, effective October 1, 2002, to $8.01,
effective October 1, 2003, to $8.65, effective October 1, 2004 and to $9.35, effective
October 1, 2005 were approved. To provide funding to continue the capital improvement
program and provide for increased maintenance and asset management, rates were
increased in August, 2004, by 3% per year to $9.63, effective October 1, 2006, $9.92,
effective October 1, 2007 and $10.22, effective October 1, 2008.
FINANCIAL STATEMENTS
The combined financial statements and Stormwater enterprise fund financial
statements of the City at September 30, 2004 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, 2004.
INVESTMENT POLICY OF THE CITY
Pursuant to the requirements of Section 218.45, Florida Statutes, the City
adopted a written investment policy which applies to all funds held by or for the benefit
of the City Council (except for proceeds of bond issues which are deposited in escrow
and debt service funds and governed by their bond documents) and funds of
Constitutional Officers and other component units of the City.
24
The objectives of the investment policy, listed in order in order of importance,
are:
1. Safety of principal
2. Provision of sufficient liquidity
3. Optimization of return within the constraints of safety and liquidity
The investment policy limits the securities eligible for inclusion in the City's
portfolio. The City will attempt to maintain a weighted average maturity of its
investments at or below three years; however, the average maturity of investments
may not exceed four years.
To enhance safety, the investment policy requires the diversification of the
portfolio to reduce the risk of loss resulting from over-concentration of assets in a
specific class of security. The investment policy also requires the preparation of
periodic reports for the City Council of all outstanding securities by class or type, book
value, income earned and market value as of the report date.
Notwithstanding the foregoing, moneys held in the funds and accounts
established under the Ordinance may be invested only in Permitted Investments, as
described in the Ordinance.
LEGALITY FOR INVESTMENT
The Series 2005 Bonds constitute legal investments in the State of Florida for
state, county, municipal and all other public funds and for banks, savings banks,
insurance companies, executors, administrators, trustees and all other fiduciaries, and
also constitute securities eligible as collateral security for all state, county, municipal
and other public funds.
25
TAX EXEMPTION
Federal Income Tax Matters
The Internal Revenue Code of 1986, as amended (the "Code") establishes certain
requirements which must be met subsequent to the issuance and delivery of the Bonds
in order that interest on the Bonds be and remain excluded from gross income for
purposes offederal income taxation. Non-compliance may cause interest on the Bonds
to be included in federal gross income retroactive to the date of issuance of the Bonds
regardless of the date on which such non-compliance occurs or is ascertained. These
requirements include, but are not limited to, provisions which prescribe yield and other
limits within which the proceeds of the 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 County has
covenanted in the Resolution to comply with such requirements in order to maintain
the exclusion from federal gross income of the interest on the Bonds.
In the opinion of Bond Counsel, assuming compliance with the aforementioned
covenants, under existing laws, regulations, judicial decisions and rulings, interest on
the Bonds is excluded from gross income of the holders thereof for purposes of federal
income taxation. Interest on the Bonds is not an item oftax preference for purposes of
the federal alternative minimum tax imposed on individuals or corporations; however,
interest on the Bonds may be subject to the alternative minimum tax when any Bond is
held by a corporation. The alternative minimum taxable income of a corporation must
be increased by 75% ofthe 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 Bonds.
Except as described above, Bond Counsel will express no opinion regarding the
federal income tax consequences resulting from the ownership of, receipt or accrual of
interest on, or disposition of Bonds. Prospective purchasers of Bonds should be aware
that the ownership of Bonds may result in collateral federal income tax consequences,
including (i) the denial of a deduction for interest on indebtedness incurred or
continued to purchase or carry Bonds, (ii) the reduction of the loss reserve deduction
for property and casualty insurance companies by 15% of certain items, including
interest on the Bonds, (iii) the inclusion of interest on the 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 Bonds in passive income subject to federal
income taxation of certain S corporations with Subchapter C earnings and profits at
the close ofthe taxable year, and (v) the inclusion of interest on the Bonds in "modified
adjusted gross income" by recipients of certain Social Security and Railroad Retirement
26
benefits for purposes of determining whether such benefits are included in gross
income for federal income tax purposes.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE BONDS AND
THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE
ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND
CORPORATE REGISTERED OWNERS. PROSPECTIVE 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 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 Bonds. From time to time, legislative proposals are pending
which could have an effect on both the federal tax consequences resulting from
ownership of 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 Bonds.
Florida Tax Matters
On the date of delivery of the Bonds, Bond Counsel will issue an opinion to the
effect that under existing statutes, regulations and judicial decisions, the 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.
RATINGS
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Fitch IBCA, Inc. ("Fitch") would be expected
to issue their ratings of "Aaa," "AAA" and "AAA," respectively, with respect to the
Series 2005 Bonds, based on the issuance of the Policy by MBIA. In addition, Moody's,
S&P and Fitch have assigned underlying ratings to the Series 2005 Bonds of"A3," "A"
and ",A:' respectively, without regard to the Policy. The ratings reflect the view of
Moody's, S&P and Fitch and any explanation ofthe significance of such ratings may be
obtained only from Moody's, S&P and Fitch. There is no assurance that such ratings
will remain in effect for any given period of time or that such ratings may not be
lowered or withdrawn entirely by the rating agencies, if in their opinion or judgment,
27
circumstances so warrant. Any downward revision or withdrawal of the ratings may
have an adverse effect on the market price and marketability ofthe Series 2005 Bonds.
LITIGATION
Except as described below, in the opinion of the City Attorney there is no
litigation now pending or threatened (i) to restrain or enjoin the issuance or sale ofthe
Series 2005 Bonds or (ii) questioning or affecting the validity of the Series 2005 Bonds,
the Ordinance or the pledge ofthe Net Revenues by the City or the proceedings for the
authorization, sale, execution or delivery of the Series 2005 Bonds.
The City is involved in certain litigation and disputes incidental to its
operations. Upon the basis of information presently available, the City Attorney
believes that there are substantial defenses to such litigation and disputes and that, in
any event, any ultimate liability, in excess of applicable insurance coverage, resulting
therefrom will not materially adversely affect the financial position or results of
operations of the City.
The Pinellas County School Board and St. Petersburg College, as the only public
educational institutions in the City, filed suit against the City in the Circuit Court of
Pinellas County seeking a declaration that, as public educational institutions, they are
statutorily exempted from payment ofthe storm water utility fees. The City settled the
litigation with St. Petersburg College by paying $100,000 and agreeing not to assess
the storm water fees against it until there is a final appellate court opinion or Florida
Supreme Court opinion determining that the fees are a utility user fee.
The City has not collected stormwater utility fees from the Pinellas County
School Board for over three years; however, the School Board has demanded refunds of
Stormwater utility fees paid prior to that time. The Circuit Court of Pinellas County
found in favor of the Pinellas County School Board and was awarded a judgment in the
amount of $343,663.49. The City intends to appeal the judgment. Any damages
ultimately awarded would be payable from Net Revenues and it is not possible at this
time to predict the exact amount of such potential damages; however, the City is of the
opinion that the payment of any such damages would not have a material adverse
effect on the operation ofthe System or the payment of Debt Service on the Series 2005
Bonds. The issues raised in the suit do not pose a general challenge to the validity of
the stormwater utility fees or the collection thereof, which issues were validated as
described below, but only challenge the applicability of such fees under certain
circumstances to plaintiffs as public educational institutions.
28
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The arithmetical accuracy of certain computations included in the schedules
provided by RBC Dain Rauscher Inc. on behalf of the City relating to (a) computation
of forecasted receipts of principal and interest on the Federal Securities and the
forecasted payments of principal and interest to redeem the Refunded Bonds, and (b)
computation of the yields on the Refunding Bonds and the Federal Securities was
examined by McGladrey & Pullen, LLP, Minneapolis, Minnesota. Such computations
were based solely upon assumptions and information supplied by RBC Dain Rauscher
Inc. on behalf of the City. McGladrey & Pullen, LLP has restricted its procedures to
examining the arithmetical accuracy of certain computations and has not made any
study or evaluation ofthe assumptions and information upon which the computations
are based and, accordingly, has not expressed an opinion on the data used, the
reasonableness of the assumptions, or the achievability of the forecasted outcome.
ADVISORS AND CONSULTANTS
The City has retained advisors and consultants in connection with the issuance
of the Series 2005 Bonds. These advisors and consultants are compensated from a
portion of the proceeds of the Series 2005 Bonds, identified as "Costs of Issuance"
under the heading "ESTIMATED SOURCES AND USES OF FUNDS" herein; and such
compensation, is, in some instances, contingent upon the issuance of the Bonds and the
receipt of the proceeds thereof.
Financial Advisor. The City has retained RBC Dain Rauscher Inc., St.
Petersburg, Florida (the "Financial Advisor"), as the City's financial advisor. The fees
of the Financial Advisor will be paid from proceeds of the Series 2005 Bonds and such
payment is contingent upon the issuance of the Series 2005 Bonds.
Bond Counsel. Bryant Miller & Olive P.A., Tallahassee, Florida represents the
City as Bond Counsel. The fees of Bond Counsel will be paid from proceeds of the
Series 2005 Bonds, and such payment is contingent upon the issuance of the Series
2005 Bonds.
Disclosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida
represents the City as Disclosure Counsel. The fees of Disclosure Counsel will be paid
from proceeds of the Series 2005 Bonds, and such payment is contingent upon the
issuance of the Series 2005 Bonds.
29
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the holders and beneficial owners of
the Series 2005 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, 2006
(the "Annual Report"), and to provide notices ofthe occurrence of certain enumerated
events, if deemed by the City to be material. The Annual Report will be filed by the
City with each Nationally Recognized Municipal Securities Information Repository
("NRMSIR"), and with the State of Florida Repository, if and when created. The
notices of material events will be filed by the City with the NRMSIR and with the State
of Florida Repository, if and when created. The form of Continuing Disclosure
Certificate containing the specific nature of the information to be contained in the
Annual Report or the notices of material events appears in "APPENDIX D - FORM OF
CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in
order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). The City
has never failed to comply in all material respects with any previous undertakings with
regard to said Rule to provide annual reports or notices of material events.
ENFORCEABILITY OF REMEDIES
The remedies available to the registered owners of the Series 2005 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, including specifically Title II of the United
States Code, the remedies specified by the federal bankruptcy code, the Ordinance and
the Series 2005 Bonds may not be readily available or may be limited. The various
legal opinions to be delivered concurrently with the delivery of the Series 2005 Bonds
(including Bond Counsel's approving opinion) will be qualified, as to the enforceability
ofthe 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.
30
CERTAIN LEGAL MATTERS
Certain legal matters in connection with the issuance of the Series 2005 Bonds
are subject to the approval of Bryant Miller & OliveP.A., Tallahassee, Florida, Bond
Counsel, whose approving opinion will be available at the time of delivery ofthe Series
2005 Bonds and will be printed on such Bonds. The proposed form of Bond Counsel
opinion is attached hereto as Appendix E and reference is made to such form of opinion
for the complete text thereof. Certain 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.
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Section 517.051, Florida Statutes, and the regulations promulgated thereunder
(the "Disclosure Act") require that the City make a full and fair disclosure of any bonds
or other debt obligations that it has issued or guaranteed and that are or have been in
default as to principal or interest at any time after December 31, 1975 (including bonds
or other debt obligations for which it has served only as a conduit issuer such as
industrial development or private activity bonds issued on behalf of private
businesses). The City is not, and has not since December 31, 1975, been in default as
to principal and interest on bonds or other debt obligations for which ad valorem or
non-ad valorem revenues of the City are pledged.
The City hereby makes the following disclosure regarding a default on an issue
of industrial development bonds not related to any direct indebtedness ofthe City, as it
is aware of a prior default in 1990 with respect to an issue of industrial revenue bonds
for which the City served only as a conduit issuer. The City was not liable to pay the
principal of or interest on such bonds except from payments made to it by the private
company on whose behalf such bonds were issued and no funds of the City were used to
pay such bonds or the interest thereon. Although the City is not aware of any other
defaults with respect to bonds or other debt obligations as to which it has served only
as a conduit issuer, it has not undertaken an independent review or investigation of
such bonds or other debt obligations.
31
FINANCIAL ADVISOR
The Financial Advisor for the City is RBC Dain Rauscher Inc., with offices
located at 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701-4386.
MISCELLANEOUS
The references, excerpts and summaries of all documents referred to herein do
not purport to be complete statements of the provisions of such documents, and
reference is directed to all such documents for full and complete statements of all
matters of fact relating to the Series 2005 Bonds, the security for the payment of the
Series 2005 Bonds, and the rights and obligations of holders thereof.
The information 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 offact, and no representation is made that any ofthe 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 ofthe
Series 2005 Bonds.
The execution and delivery of this Official Statement by its Mayor and its City
Manager has been duly authorized by the City Council.
CITY OF CLEARWATER, FLORIDA
Frank Hibbard, Mayor
William B. Horne, II, City Manager
32
APPENDIX A
GENERAL DESCRIPTION OF THE CITY AND SELECTED
STATISTICS
APPENDIX B
EXCERPTS FROM THE CITY'S COMPREHENSIVE ANNUAL FINANCIAL
REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
APPENDIX C
CONFORMED COPY OF AMENDED ORDINANCE
APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
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 $6,925,000* Stormwater System Revenue Refunding Bonds, Series 2005
(the "Series 2005 Bonds"). The Series 2005 Bonds are being issued pursuant to
Ordinance No. 6378-99, enacted by the City on April 15, 1999, as amended by
Ordinance No. 6931-02, enacted by the City on July 18, 2002, as supplemented (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 2005 Bondholders and in order to assist the original underwriters of the
Series 2005 Bonds in complying with Rule 15c2-12(b)(5) promulgated by the Securities
and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934
(the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION.
Except as otherwise provided herein, the Issuer shall provide to all of the nationally
recognized municipal securities information repositories described in Section 4 hereof
(the "NRMSIRs"), and to any state information depository that is established within
the State of Florida (the "SID"), on or before June 30 of each year, commencing June
30, 2006, the information set forth below in this Section 2. Notwithstanding the
immediately preceding sentence, to the extent any such information does not become
available to the Issuer before June 30 of any year, the Issuer shall provide such
information when it becomes available, but no later than one year following the end of
the Issuer's Fiscal Year.
(A) the Issuer's Comprehensive Annual Financial Report for the immediately
preceding Fiscal Year (the "CAFR"), which shall include the audited financial
statements of the Issuer for the immediately preceding Fiscal Year prepared in
accordance with Generally Accepted Accounting Principles, as modified by applicable
State of Florida requirements and the governmental accounting standards
promulgated by the Government Accounting Standards Board; provided, however, if
the audited financial statements of the Issuer are not completed prior to June 30 of any
year, the Issuer shall provide unaudited financial statements on such date and shall
provide the audited financial statements as soon as practicable following their
completion; and
(B) to the extent not set forth in the CAFR, additional financial information
and operating data of the type included with respect to the Issuer in the final official
statement prepared in connection with the sale and issuance ofthe Series 2005 Bonds
(as amended, the "Official Statement"), as set forth below:
37
1. Updates of the financial information set forth in the Official
Statement under the subcaptions "Rates, Fees and Charges" and "Historical Net
Revenues" under the principal captions "THE STORMW ATER MANAGEMENT
SYSTEM" ( in the case of the material under the caption "Historical Net
Revenues," for the then-immediately preceding five fiscal years).
2. Description of any additional indebtedness payable in whole or in
part from the Net Revenues (as defined in the Ordinance).
3. Any other financial information or operating data of the type
included in the Official Statement which would be material to a holder or
prospective holders of the Series 2005 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" means the period
commencing on October 1 and ending on September 30 ofthe next succeeding year, or
such other period of time provided by applicable law.
SECTION 3. REPORTINGSIGNIFICANTEVENTS. The Issuer
shall provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the
"MSRB") and to the SID, on a timely basis, notice of any of the following events, if such
event is material with respect to the Series 2005 Bonds or the Issuer's ability to satisfy
its payment obligations with respect to the Series 2005 Bonds:
(A)
(B)
(C)
difficulties;
(D)
(E)
(F)
(G)
(H)
(I)
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on the debt service reserve fund reflecting financial
Unscheduled draws on credit enhancement reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the
Series 2005 Bonds;
Modifications to rights of Series 2005 Bondholders;
Redemptions;
Defeasances;
38
(J) Release, substitution, or sale of property securing repayment ofthe Series
2005 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.
The Issuer may from time to time, in its discretion, choose to provide notice of
the occurrence of certain other events, in addition to those listed in this Section 3, if, in
the judgment of the Issuer, such other events are material with respect to the Series
2005 Bonds, but the Issuer does not specifically undertake to commit to provide any
such additional notice ofthe occurrence of any material event except those events listed
above.
Whenever the Issuer obtains knowledge of the occurrence of a significant event
described in this Section 3, the Issuer shall as soon as possible determine if such event
would be material under applicable federal securities law to holders of Series 2005
Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always
be deemed to be material.
SECTION 4. NRMSIRs. In addition to any NRMSIRs that are
established subsequently and approved by the SEC, the NRMSIRs to which the County
shall provide the information described in Sections 2 and 3 above, to the extent
required, shall be the following organizations, their successors and assigns:
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
http://www.bloomberg.com/markets/muni_contactinfo.html
Email: Munis@Bloomberg.com
39
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
http://www.dpcdata.com
Email: .nrmsir@dpcdata.com
FT Interactive Data
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)
http://www.interactivedata.com
Email: NRMSIR@FTID.com
Standard & Poor's Securities Evaluations, Inc.
55 Water Street
45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
www.jjkenny.com/jjkenny/pser_descrip_data_rep .html
Email: nrmsir_repository@sandp.com
A list ofthe names and addresses of all designated NRMSIRs as of any date may
currently be obtained by calling the SECts Fax on Demand Service at 202/942-8088 and
requesting document number 0206 or by visiting the SEC's website at
www.sec.e'ov/info/municipal/nrmsir.
In lieu of filing with the NRMSIRs and SIDs, the Dissemination Agent may
provide the required information to:
Disclosure USA.org
P.O. Box 684667
Austin, Texas 78768-4667
http://www.disclosureusa.org
Fax: (512) 476-6403
or any other designated central post office hereafter approved by the SEC until
such time as the SEC has withdrawn such interpretive approval.
40
SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any
other provision in the Ordinance to the contrary, failure of the Issuer to comply with
the provisions ofthis Disclosure Certificate shall not be considered an event of default
under the Ordinance; provided, however, any Series 2005 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 2005 Bondholder" shall mean any person who (A) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series
2005 Bonds (including persons holding Series 2005 Bonds through nominees,
depositories or other intermediaries), or (B) is treated as the owner of any Series 2005
Bond for federal income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of
the information required herein to be disclosed may be incorporated by reference from
other documents, including official statements or debt issues of the Issuer of related
public entities, which have been submitted to each of the NRMSIRs and the SID, if
any, or the SEC. If the document incorporated by reference is a final official statement,
it must be available from the MSRB. The Issuer shall clearly identify each document
incorporated by reference.
SECTION 7. DISSEMINATION AGENTS. The Issuer may, from
time to time, appoint or engage a dissemination agent to assist it in carrying out its
obligations under this Disclosure Certificate, and may discharge any such agent, with
or without appointing a successor disseminating agent.
SECTION 8. TERMINATION. The Issuer's obligations under this
Disclosure Certificate shall terminate upon (A) the legal defeasance, prior redemption
or payment in full of all of the Series 2005 Bonds, or (B) the termination of the
continuing disclosure requirements ofthe Rule by legislative, judicial or administrative
action.
SECTION 9. AMENDMENTS. Notwithstanding any other
provision of this Disclosure Certificate, the Issuer may amend this Disclosure
Certificate, and any provision may be waived, if such amendment or waiver is
supported by an opinion of counsel that is nationally recognized in the area of federal
securities laws, to the effect that such amendment or waiver would not, in and of itself,
cause the undertakings herein to violate the Rule if such amendment or waiver had
been effective on the date hereof but taking into account any subsequent change in or
official interpretation of the Rule.
41
SECTION 10. ADDITIONAL INFORMATION. Nothing in this
Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any
other information, using the means of dissemination set forth in this Disclosure.
Certificate or any other means of communication, or including any other information in
its annual information described in Section 2 hereof or notice of occurrence of a
significant event described in Section 3 hereof, in addition to that which is required by
this Disclosure Certificate. If the Issuer chooses to include any information in its
annual information or notice of occurrence of a significant event in addition to that
which is specifically required by this Disclosure Certificate, the Issuer shall have no
obligation under this Disclosure Certificate to update such information or include it in
its future annual information or notice of occurrence of a significant event.
SECTION 11. OBLIGATED PERSONS. If any person, other than the
Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series
2005 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 [
], 2005
ATTEST:
CITY OF CLEARWATER, FLORIDA
City Clerk
By: Frank Hibbard
Mayor
42
APPENDIX E
FORM OF BOND COUNSEL OPINION
APPENDIX F
FORM OF MUNICIPAL BOND INSURANCE POLICY
EXHIBIT D
CONTINUING DISCLOSURE CERTIFICATE
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 $6,925,000* Stormwater System Revenue Refunding Bonds, Series 2005
(the "Series 2005 Bonds"). The Series 2005 Bonds are being issued pursuant to
Ordinance No. 6378-99, enacted by the City on April 15, 1999, as amended by
Ordinance No. 6931-02, enacted by the City on July 18, 2002, as supplemented (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 2005 Bondholders and in order to assist the original underwriters of the
Series 2005 Bonds in complying with Rule 15c2-12(b)(5) promulgated by the Securities
and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934
(the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION.
Except as otherwise provided herein, the Issuer shall provide to all of the nationally
recognized municipal securities information repositories described in Section 4 hereof
(the "NRMSIRs"), and to any state information depository that is established within
the State of Florida (the "SID"), on or before June 30 of each year, commencing June
30, 2006, the information set forth below in this Section 2. Notwithstanding the
immediately preceding sentence, to the extent any such information does not become
available to the Issuer before June 30 of any year, the Issuer shall provide such
information when it becomes available, but no later than one year following the end of
the Issuer's Fiscal Year.
(A) the Issuer's Comprehensive Annual Financial Report for the immediately
preceding Fiscal Year (the "CAFR"), which shall include the audited financial
statements of the Issuer for the immediately preceding Fiscal Year prepared in
accordance with Generally Accepted Accounting Principles, as modified by applicable
State of Florida requirements and the governmental accounting standards
promulgated by the Government Accounting Standards Board; provided, however, if
the audited financial statements of the Issuer are not completed prior to June 30 of any
year, the Issuer shall provide unaudited financial statements on such date and shall
provide the audited financial statements as soon as practicable following their
completion; and
(B) to the extent not set forth in the CAFR, additional financial information
and operating data of the type included with respect to the Issuer in the final official
statement prepared in connection with the sale and issuance of the Series 2005 Bonds
(as amended, the "Official Statement"), as set forth below:
37
1. Updates of the financial information set forth in the Official
Statement under the subcaptions "Rates, Fees and Charges" and "Historical Net
Revenues" under the principal captions "THE STORMW ATER MANAGEMENT
SYSTEM" ( in the case of the material under the caption "Historical Net
Revenues," for the then-immediately preceding five fiscal years).
2. Description of any additional indebtedness payable in whole or in
part from the Net Revenues (as defined in the Ordinance).
3. Any other financial information or operating data of the type
included in the Official Statement which would be material to a holder or
prospective holders of the Series 2005 Bonds.
For purposes of this Disclosure Certificate, "Fiscal Year" means the period
commencing on October 1 and ending on September 30 of the next succeeding year, or
such other period of time provided by applicable law.
SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer
shall provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the
"MSRB") and to the SID, on a timely basis, notice of any of the following events, if such
event is material with respect to the Series 2005 Bonds or the Issuer's ability to satisfy
its payment obligations with respect to the Series 2005 Bonds:
(A)
(B)
(C)
difficulties;
(D)
(E)
(F)
(G)
(H)
(I)
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on the debt service reserve fund reflecting financial
Unscheduled draws on credit enhancement reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the
Series 2005 Bonds;
Modifications to rights of Series 2005 Bondholders;
Redemptions;
Defeasances;
38
(J) Release, substitution, or sale of property securing repayment of the Series
2005 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.
The Issuer may from time to time, in its discretion, choose to provide notice of
the occurrence of certain other events, in addition to those listed in this Section 3, if, in
the judgment of the Issuer, such other events are material with respect to the Series
2005 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 know ledge of the occurrence of a significant event
described in this Section 3, the Issuer shall as soon as possible determine if such event
would be material under applicable federal securities law to holders of Series 2005
Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always
be deemed to be material.
SECTION 4. NRMSIRs. In addition to any NRMSIRs that are
established subsequently and approved by the SEC, the NRMSIRs to which the County
shall provide the information described in Sections 2 and 3 above, to the extent
required, shall be the following organizations, their successors and assigns:
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
http://www.bloomberg.com/markets/m uni_contactinfo.html
Email: Munis@Bloomberg.com
39
DPC Data Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
http://www.dpcdata.com
Email: nrmsir@dpcdata.com
FTlnteractive Data
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)
http://www.interactivedata.com
Email: NRMSIR@FTID.com
Standard & Poor's Securities Evaluations, Inc.
55 Water Street
45th Floor
New York, NY 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
www.jjkenny.com/jjkenny/pser_descrip_data_rep.html
Email: nrmsir_repository@sandp.com
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 or by visiting the SECts website at
www.sec.e'ov/info/municipal/nrmsir.
In lieu of filing with the NRMSIRs and SIDs, the Dissemination Agent may
provide the required information to:
Disclosure USA.org
P.O. Box 684667
Austin, Texas 78768-4667
http://www.disclosureusa.org
Fax: (512) 476-6403
or any other designated central post office hereafter approved by the SEC until
such time as the SEC has withdrawn such interpretive approval.
40
SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any
other provision in the Ordinance to the contrary, failure of the Issuer to comply with
the provisions ofthis Disclosure Certificate shall not be considered an event of default
under the Ordinance; provided, however, any Series 2005 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 2005 Bondholder" shall mean any person who (A) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series
2005 Bonds (including persons holding Series 2005 Bonds through nominees,
depositories or other intermediaries), or (B) is treated as the owner of any Series 2005
Bond for federal income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of
the information required herein to be disclosed may be incorporated by reference from
other documents, including official statements or debt issues of the Issuer of related
public entities, which have been submitted to each of the NRMSIRs and the SID, if
any, or the SEC. If the document incorporated by reference is a final official statement,
it must be available from the MSRB. The Issuer shall clearly identify each document
incorporated by reference.
SECTION 7. DISSEMINATION AGENTS. The Issuer may, from
time to time, appoint or engage a dissemination agent to assist it in carrying out its
obligations under this Disclosure Certificate, and may discharge any such agent, with
or without appointing a successor disseminating agent.
SECTION 8. TERMINATION. The Issuer's obligations under this
Disclosure Certificate shall terminate upon (A) the legal defeasance, prior redemption
or payment in full of all of the Series 2005 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
provision of this Disclosure Certificate, the Issuer may amend this Disclosure
Certificate, and any provision may be waived, if such amendment or waiver is
supported by an opinion of counsel that is nationally recognized in the area of federal
securities laws, to the effect that such amendment or waiver would not, in and of itself,
cause the undertakings herein to violate the Rule if such amendment or waiver had
been effective on the date hereof but taking into account any subsequent change in or
official interpretation of the Rule.
41
SECTION 10. ADDITIONAL INFORMATION. Nothing in this
Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any
other information, using the means of dissemination set forth in this Disclosure
Certificate or any other means of communication, or including any other information in
its annual information described in Section 2 hereof or notice of occurrence of a
significant event described in Section 3 hereof, in addition to that which is required by
this Disclosure Certificate. If the Issuer chooses to include any information in its
annual information or notice of occurrence of a significant event in addition to that
which is specifically required by this Disclosure Certificate, the Issuer shall have no
obligation under this Disclosure Certificate to update such information or include it in
its future annual information or notice of occurrence of a significant event.
SECTION 11. OBLIGATED PERSONS. If any person, other than the
Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series
2005 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 [
], 2005
ATTEST:
CITY OF CLEARWATER, FLORIDA
By: Frank Hibbard
Mayor
City Clerk
42
EXHIBIT E
COMMITMENTS FOR FINANCIAL GUARANTY INSURANCE POLICY
E-1
A1BIA
COMMITMENT TO ISSUE A
FINANCIAL GUARANTY INSURANCE POLICY
Application No.: 2005-001681-001
Sale Date: March, 2005(t)
Program Type: Competitive DP
Re: $7,145,000 (Est) City of Clearwater, Florida, Storm water System Revenue Refunding
Bonds, Series 2005
(the "Obligations")
This commitment to issue a financial guaranty insurance policy (the "Commitment") dated
March 2, 2005, constitutes an agreement between CITY OF CLEARWATER (the "Applicant")
and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under
the laws ofthe State of New York.
Based on an approved application dated February 28, 2005, the Insurer agrees, upon
satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date
or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance
policy (the "Policy") for the Obligations, insuring the payment of principal of and interest on the
Obligations when due. The issuance of the Policy shall be subject to the following terms and
conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of
delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
.3100% of Total Debt Service, premium rounded to the nearest thousand. The premium set out
in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to
this Commitment.
2. The Obligations shall have received the unqualified opinion of bond counsel with
respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations or the Resolution,
Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the
Obligations or in the final official statement or other similar document, including the financial
statements included therein.
4. There shall have been no material adverse change in any information submitted to the
Insurer as a part of the application or subsequently submitted to be a part of the application to the
Insurer.
5. No event shall have occurred which would allow any underwriter or any other
purchaser of the Obligations not to be required to purchase the Obligations at closing.
6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations.
7. Prior to the delivery of and payment for the Obligations, none of the information or
documents submitted as a part of the application to the Insurer shall be determined to contain any
untrue or misleading statement of a material fact or fail to state a material fact required to be
stated therein or necessary in order to make the statements contained therein not misleading.
8. No material adverse change affecting any security for the Obligations shall have
occurred prior to the delivery of and payment for the Obligations.
A1BIA
9. The Insurer's "Payments Under the Policy/Other Required Provisions" (see attached)
shall be included in the authorizing document.
10. The Applicant agrees not to use the Insurer's name in any public document including,
without limitation, a press release or presentation, announcement or forum without the Insurer's
prior consent; provided however, such prohibition on the use of the Insurer's name shall not
relate to the use ofthe Insurer's standard approved form of disclosure in public documents issued
in connection with the current Obligations to be issued in accordance with the terms of the
Commitment; and provided further such prohibition shall not apply to the use of the Insurer's
name in order to comply with public notice, public meeting or public reporting requirements.
11. This Commitment may be signed in counterpart by the parties hereto.
12. Compliance with the Insurer's Standard Conditions for Refundings (see attached).
13. Compliance with the Insurer's General Document Provisions (see attached).
14. Compliance with the Insurer's List of Permissible Investments for Indentured Funds
(see attached).
Dated this 2nd day of March, 2005.
MBIA In~urance Corporati9n,
(~"<" /" ;:,.-"--
By
Assistant Secretary
CITY OF CLEARWATER
By:
Title:
A1BIA
STANDARD CONDITIONS FOR REFUNDINGS
A. Receipt by the Insurer of the final debt service schedule on the issue within three business
days from the sale date.
B. Receipt, satisfactory review and subsequent oral approval by the Insurer at least ten days in
advance of closing of draft copies of:
1. a verification by an independent CPA firm of the sufficiency of the escrow to timely
retire the refunded bonds;
2. the escrow securities purchase contracts of SLG subscription forms or open market
confirmations; and,
3. the escrow agreement
Final and signed copies of all the above documents to be sent via overnight mail from closing.
An independent CPA firm is defined as a licensed CPA firm acting at arms length of the
transaction on behalf of the bondholders. It may not be the underwriter, bond counselor
financial adviser for the refunding issue. The firm must carry errors and omissions insurance.
The Insurer reserves the right to review the provider of the verification on a deal by deal
basis.
C. Receipt by the Insurer at least five business days prior to closing of a draft opinion from Bond
Counsel (or Special Tax Counsel) to the effect that the refunding bonds are being issued in
compliance with state law and that the interest on the refunding bonds is tax-exempt.
D. Receipt by the Insurer at least five business days prior to closing of a draft opinion from Bond
Counsel stating that the refunded bonds have been legally defeased. (This condition is only
applicable in those situations where the refunding issue is legally defeasing the refunded
issue.) Final executed copies of items C and D to be sent via overnight mail.
E. If the escrow agreement allows for the substitution of securities in the escrow account, then it
should be provided in the escrow agreement that no such substitution may occur unless there
has first been delivered to the escrow agent/trustee, (1) a CPA verification that the escrow
investments, as substituted, are sufficient to pay debt service, as it becomes due, on the refunded
bonds and (2) an opinion of nationally recognized bond counsel to the effect that the
substitution is permitted under the documents and the substitution has no adverse effect on the
tax-exempt nature of the refunding bonds. See 2 above for the definition of an independent
CPA.
F. Escrow investments must be limited to:
I. Cash
2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government
Series -- "SLGS").
3. Direct obligations of the Treasury which have been stripped by the Treasury itself,
CA TS, TIGRS and similar securities.
4. Resolution Funding Corp. (REF CORP) Only the interest component of REF CORP strips
which have been stripped by request to the Federal Reserve Bank of New York in book
entry form are acceptable.
A1BIA
5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however,
the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded
bonds must have been pre-refunded with cash, direct U.S. or u.s. guaranteed obligations,
or AAA rated pre-refunded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith and credit
ofthe U.S.:
a. U.S; Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
f. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing
notes and bonds
G. If a forward supply contract is being executed in conjunction with the refunding (or
subsequent to the closing of the refunding transaction), the following conditions must also be
met:
I. The Insurer must review and approve the forward supply contract at least five business
days prior to closing (or after closing, at least five business days prior to execution if not
contemplated at the time of closing).
2. The forward supply contract must provide by its terms that the securities delivered under
the forward supply are sufficient (when taken with other funds remaining in the escrow)
as to amount and timeliness to retire the refunded bonds.
3. The Insurer requires an opinion from a nationally recognized bankruptcy counsel that the
securities in escrow and payments to owners of refunded bonds will not constitute assets of the
forward supply contract supplier and will not be subject to automatic stay in the event of bankruptcy
and/or insolvency of the supplier.
4. The supplier of the securities delivered under the forward supply contract must affirm in
the contract that it has no rights to or interest in the monies or securities held in the
escrow.
5. The escrow agent must be acceptable to the Insurer. The Insurer reserves the right to
replace the escrow agent for cause.
6. See 6 above for investments permitted under the forward supply contract. Investments
must be non-callable.
A1BIA
7. The supplier should have no right to substitute the original escrow securities. The
supplier may substitute securities previously delivered by the supplier under the forward
supply contract only if:
a. The substituted securities mature on a date that is later than the previously delivered
securities would have matured; and
b. The substituted securities mature prior to the date needed to pay principal and/or
interest on the bonds.
8. Two days before each delivery date for the forward supply securities, the escrow agent
must notify the Insurer in writing of the securities to be delivered, the maturity amount of
the securities and the maturity date.
9. The forward supply contract cannot be amended or modified without the Insurer's written
consent.
5/6/93
A1BIA
GENERAL DOCUMENT PROVISIONS
A. Notice to the Insurer The basic legal documents must provide that any notices required to be
given by any party should also be given to the Insurer, Attn: Insured Portfolio Management.
B. Amendments. In the basic legal document, there are usually two methods of amendment. The
first, which typically does not require the consent of the bondholders, is for amendments which
will cure ambiguities, correct formal defects or add to the security of the financing. The
second, in which bondholder consent is a prerequisite, covers the more substantive types of
amendments. For all financings, the Insurer must be given notice of any amendments that are
of the first type and the Insurer's consent must be required for all amendments of the second
type. All documents must contain a provision which requires copies of any amendments to
such documents which are consented to by the Insurer to be sent to Standard & Poor's.
C. Supplemental Legal Document. If the basic legal document provides for a supplemental legal
document to be issued for reasons other than (l) a refunding to obtain savings; or (2) the
issuance of additional bonds pursuant to an additional bonds test, there must be a requirement
that the Insurer's consent also be obtained prior to the issuance of any additional bonds and/or
execution of such supplemental legal document.
D. Events of Default and Remedies. All documents normally contain provisions which define the
events of default and which prescribe the remedies that may be exercised upon the occurrence
of an event of default. At a minimum, events of default will be defined as follows:
I. the issuer/obligor fails to pay principal when due;
2. the issuer/obligor fails to pay interest when due;
3. the issuer/obligor fails to observe any other covenant or condition of the document and
such failure continues for 30 days and
4. the issuer/obligor declares bankruptcy.
The Insurer, acting alone, shall have the right to direct all remedies in the event of a default. The
Insurer shall be recognized as the registered owner of each bond which it insures for the purposes of
exercising all rights and privileges available to bondholders. For bonds which it insures, the Insurer
shall have the right to institute any suit, action, or proceeding at law or in equity under the same terms
as a bondholder in accordance with applicable provisions of the governing documents. Other than the
usual redemption provisions, any acceleration of principal payments must be subject to the Insurer's
prior written consent.
E. Defeasance requires the deposit of:
I. Cash
2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government
Series -- " SLGs")
3. Direct obligations of the Treasury which have been stripped by the Treasury itself,
CA TS, TIGRS and similar securities
4. Resolution Funding Corp. (REF CORP) Only the interest component of REF CORP strips
which have been stripped by request to the Federal Reserve Bank of New York in book
entry form are acceptable.
5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however,
the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded
A1BIA
bonds must have been pre-refunded with cash, direct u.s. or U.s. guaranteed obligations,
or AAA rated pre-refunded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith and credit
of the U.S.
a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
f. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing
notes and bonds
The Insurer shall be provided with an opinion of counsel acceptable to the Insurer that the Obligations
have been legally defeased and that the escrow agreement establishing such defeasance operates to
legally defease the Obligations within the meaning of the Indenture and the Supplemental Indenture
relating to the Obligations. In addition, the Insurer will be entitled to receive (i) 15 business days
notice of any advance refunding of the Obligations and (ii) an accountant's report with respect to the
sufficiency of the amounts deposited in escrow to defease the Obligations.
F. Agents:
1. In transactions where there is an agent/enhancer (other than the Insurer), the trustee,
tender agent (if any), and paying agent (if any) must be commercial banks with trust
powers.
2. The remarketing agent must have trust powers if they are responsible for holding moneys
or receiving bonds. As an alternative, the documents may provide that if the remarketing
agent is removed, resigns or is unable to perform its duties, the trustee must assume the
responsibilities of remarketing agent until a substitute acceptable to the Insurer is
appointed.
EXHIBIT F
FINANCIAL GUARANTY POLICY ADDITIONAL PROVISIONS
LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS
A. Direct obligations of the United States of America (including obligations issued or held in hook-entry
form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the
principal of and interest on which are unconditionally guaranteed by the United States of America.
B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following
federal agencies and provided such obligations are backed by the full faith and credit of the United
States of America (stripped securities are only permitted if they have been stripped by the agency itself):
1. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
2. Farmers Home Administration (FmHA) Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures (FHA)
5. General Services Administration Participation certificates
6. Government National Mortgage Association (GNMA or "Ginnie Mae')
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations
(not acceptable for certain cash-flow sensitive issues.)
7. U.S. Maritime Administration Guaranteed Title XI financing
8. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures -U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and
bonds
C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following
non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have
been stripped by the agency itself):
1. Federal Home Loan Bank System Senior debt obligations
2. Federal Home Loan Mortgage Comoration (FHLMC or "Freddie Mac") Participation Certificates
Senior debt obligations
3. Federal National Mortgage Association (FNMA or "Fannie Mae") Mortgage-backed securities and
senior debt obligations
F-1
4. Student Loan Marketing Association (SLMA or "Sallie Mae") Senior debt obligations
5. Resolution Funding Corp. (REFCORP) obligations
6. Farm Credit System
Consolidated systemwide bonds and notes
D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are
registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAA-m; or
AA-m and if rated by Moody's rated Aaa, Aal or Aa2.
B. Certificates of deposit secured at all times by collateral described in (A) and/or (B) above. Such certificates
must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral
must be held by a third party and the bondholders must have a perfected first security interest in the
collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured
by EDIC, including BIT and SAW.
G. Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put Agreements
acceptable to MBIA (Investment Agreement criteria is available upon request).
H. Commercial paper rated, at the time of purchase, "Prime -1" by Moody's and "A-I" or better by S&P.
I. Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two
highest rating categories assigned by such agencies.
J. Federal funds or bankers acceptances with a maximum term of one year of any bank which has an
unsecured, uninsured and unguaranteed obligation rating of "Prime -1" or "A3" or better by Moody's and
"A-I" or "A" or better by S&P.
K. Repurchase Agreements for 30 days or less must follow the following criteria. Repurchase Agreements
which exceed 30 days must be acceptable to MBIA (criteria available upon request)
Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm
(seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the
dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash
plus a yield to the municipal entity in exchange for the securities at a specified date.
1. Repos must be between the municipal entity and a dealer bank or securities firm
a. Primarv dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard
& Poor's Corporation and Moody's Investor Services, or
b. Banks rated "A" or above by Standard & Poor's Corporation and Moody's Investor Services.
2. The written repo contract must include the following:
a. Securities which are acceptable for transfer are:
(1) Direct U.S. govemments, or
(2) Federal agencies backed by the full faith and credit of the U.S. government (and
FNMA & FHLMC)
b. The term of the repo may be UP to 30 days
c. The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the
collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral)
before/simultaneous with payment (perfection by possession of certificated securities).
F-2
d. Valuation of Collateral
(I) The securities must be valued weekly marked-to-market at current market price plus accrued
interest
(a) The value of collateral must be equal to 104% of the amount of cash transferred by the
municipal entity to the dealer bank or security fIrm under the repo plus accrued interest. If
the value of securities held as collateral slips below 104% of the value of the cash
transferred by municipality, then additional cash and/or acceptable securities must be
transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the
value of collateral must equal] 05%.
3. Legal opinion which must be delivered to the municipal entity:
a. Repo meets guidelines under state law for legal investment of public funds.
Additional Notes
(i) There is no list of permitted investments for non-indentured funds. Your own credit judgment
and the relevant circumstances (e.g., amount of investment and timing of investment) should
dictate what is permissible.
(ii) Any state administered pool investment fund in which the issuer is statutorily permitted or
required to invest will be deemed a permitted investment.
(iii) DSRF investments should be valued at fair market value and marked to market at least once
per year. DSRF investments may not have maturities extending beyond 5 years, except for
Investment Agreements approved by the Insurer.
PAYMENTS UNDER THE POLICY/OTHER REQUIRED PROVISIONS
A. In the event that on the second Business Day, and again on the Business Day, prior to the payment date on
the Obligations, the Paying Agent/Trustee has not received sufficient moneys to pay all principal of and interest on the
Obligations due on the second following or following, as the case may he, Business Day, the Paying Agent/Trustee shall
immediately notify the Insurer or its designee on the same Business Day by telephone or telegraph, confIrmed in writing
by registered or certifIed mail, of the amount of the defIciency.
B. If the defIciency is made up in whole or in part prior to or on the payment date, the Paying
Agent/Trustee shall so notify the Insurer or its designee.
C. In addition, if the Paying Agent/Trustee has notice that any Bondholder has been required to disgorge
payments of principal or interest on the Obligations to a trustee in bankruptcy or creditors or others pursuant to a fmal
judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such Bondholder
within the meaning of any applicable bankruptcy laws, then the Paying Agent/Trustee shall notify the Insurer or its
designee of such fact by telephone or telegraphic notice, confIrmed in writing by registered or certifIed mail.
D. The Paying Agent/Trustee is hereby irrevocably designated, appointed, directed and authorized to act as
attorney-in-fact for Holders of the Obligations as follows:
1. If and to the extent there is a deficiency in amounts required to pay interest on the Obligations,
the Paying Agent/Trustee shall (a) execute and deliver to u.s. Bank Trust National Association, or its successors
under the Policy (the "Insurance Paying Agent/Trustee"), in form satisfactory to the Insurance Paying
Agent/Trustee, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to
the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency
relates and which are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying
Agent/Trustee) in accordance with the tenor of the Policy payment from the Insurance Paying Agent/Trustee
with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and
2. If and to the extent of a defIciency in amounts required to pay principal of the Obligations, the
Paying Agent/Trustee shall (a) execute and deliver to the Insurance Paying Agent/Trustee in fonn satisfactory to
the Insurance Paying Agent/Trustee an instrument appointing the Insurer as agent for such Holder in any legal
proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Obligation
surrendered to the Insurance Paying Agent/Trustee of so much of the principal amount thereof as has not
previously been paid or for which moneys are not held by the Paying Agent/Trustee and available for such
payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent/Trustee is
F-3
received), (b) receive as designee of the respective Holders (and not as Paying Agent/Trustee) in accordance
with the tenor of the Policy payment therefor from the Insurance Paying Agent/Trustee, and (c) disburse the
same to such Holders.
E. Payments with respect to claims for interest on and principal of Obligations disbursed by the Paying
Agent/Trustee from proceeds of the Policy shall not be consideredto discharge the obligation of the Issuer with respect to
such Obligations, and the Insurer shall become the owner of such unpaid Obligation and claims for the. interest in
accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying
Agent/Trustee hereby agree for the benefit of the Insurer that:
1. They recognize that to the extent the Insurer makes payments, directly or indirectly (as by
paying through the Paying Agent/Trustee), on account of principal of or interest on the Obligations, the Insurer
will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the
Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations;
and
2. They will accordingly pay to the Insurer the amount of such principal and interest (including
principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and
interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Indenture
and the Obligation, but only from the sources and in the manner provided herein for the payment of principal of
and interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the
amount of such principal and interest
G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the Insurer a copy
of the disclosure document; if any, circulated with respect to such additional Obligations.
H. Copies of any amendments made to the documents executed in connection with the issuance of the
Obligations which are consented to by the Insurer shall be sent to Standard & Poor's Corporation.
1. The Insurer shall receive notice of the resignation or removal of the Paying Agent/Trustee and the
appointment of a successor thereto.
1. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an
annual basis, copies of the Issuer's audited [mancial statements and Annual Budget
Notices: Any notice that is required to be given to a holder of the Obligation or to the Paying Agent/Trustee
pursuant to the Indenture shall also be provided to the Insurer. All notices required to be given to the Insurer under the
Indenture shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation,
113 King Street; Armonk, New York 10504 Attention: Surveillance.
K. The Issuer/Obligor agrees to reimburse the Insurer immediately and unconditionally upon demand, to
the extent permitted by law, for all reasonable expenses, including attorneys' fees and expenses, incuned by the Insurer in
connection with (i) the enforcement by the Insurer of the Issuer's /Obligor' s obligations, or the preservation or defense of
any rights of the Insurer, under this Resolution/Indenture and any other document executed in connection with the
issuance of the Obligations, and (ii) any consent; amendment; waiver or other action with respect to the
Resolution/Indenture or any related document; whether or not granted or approved, together with interest on all such
expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum
interest rate pennitted by law, whichever is less. In addition, the Insurer reserves the right to charge a fee in connection
with its review of any such consent; amendment or waiver, whether or not granted or approved.
L The Issuer/Obligor agrees not to use the Insurer's name in any public document including, without limitation, a
press release or presentation, announcement or forum without the Insurer's prior consent; provided however, such
prohibition on the use of the Insurer's name shall not relate to the use of the Insurer's standard approved form of
disclosure in public documents issued in connection with the current Obligations to be issued in accordance with the
tenns of the Commitment; and provided further such prohibition shall not apply to the use of the Insurer's name in order
to comply with public notice, public meeting or public reporting requirements.
M. The Issuer /Obligor shall not enter into any agreement nor shall it consent to or participate in any
arrangement pursuant to which Bonds are tendered or purchased for any purpose other than the redemption and
cancellation or legal defeasance of such Bonds without the prior written consent of MBIA.
Revised 4/04
F-4
EXHIBIT G
FORM OF
ESCROW DEPOSIT AGREEMENT
This ESCROW DEPOSIT AGREEMENT, dated as of 1,2005, by and between
the CITY OF CLEARWATER, FLORIDA, a municipal corporation of the State of Florida (the
"Issuer"), and Wells Fargo Bank, N.A., a national banking association organized under the laws
of the United States of America, as Escrow Holder (the "Escrow Holder");
WITNESSETH
WHEREAS, the Issuer has previously authorized and issued obligations of the Issuer as
hereinafter set forth defined as the "Refunded Bonds", as to which the Aggregate Debt Service
(as hereinafter defined) is set forth on Schedule A; and
WHEREAS, the Issuer has determined to provide for payment of the Aggregate Debt
Service of the Refunded Bonds by depositing with the Escrow Holder pursuant to the
provisions hereof, cash and Federal Securities (as defined herein), the principal of and interest
on which will be at least equal to the Aggregate Debt Service; and
WHEREAS, in order to obtain the funds needed for such purpose, the Issuer has
authorized and is, concurrently with the delivery of this Agreement, issuing the Series 2004
Bonds more fully described herein; and
WHEREAS, the Issuer has determined that the amount to be on deposit from time to
time in the Escrow Account, as defined herein, will be sufficient to pay the Aggregate Debt
Service;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Issuer and the Escrow Holder agree as follows (provided however that the
Escrow Holder in agreeing to the foregoing shall not be held or deemed responsible in any
manner whatsoever for the recitals made herein or in the Ordinance, or the adequacy or
sufficiency of the Escrow Requirement):
Section 1.
Definitions. As used herein, the following terms mean:
1
(a) "Aggregate Debt Service" means, as of any date, the sum of all present and future
Annual Debt Service payments then remaining unpaid with respect to the respective Series of
the Refunded Bonds.
(b) "Agreement" means this Escrow Deposit Agreement.
(c) "Annual Debt Service" means, with respect to the redemption date for the
Refunded Bonds, the principal of, premium, and interest on the respective Series of the
Refunded Bonds coming due on the redemption date as shown on Schedule A attached hereto.
(d) "Bonds" or "Series 2005 Bonds" means the Stormwater System Revenue
Refunding Bonds, Series 2005 of the Issuer, authorized by the Ordinance, as herein defined.
(e) "Call Date" shall have the meaning set forth in the Issuer's Irrevocable Instruction
and Authorization to Redeem Bonds.
(f) "Escrow Account" means the account established and held by the Escrow Holder
pursuant to this Agreement, in which cash and investments will be held for payment of the
Refunded Bonds.
(g) "Escrow Holder" means Wells Fargo Bank, N.A., Jacksonville, Florida, a national
banking association organized under the laws of the United States of America.
(h) "Escrow Requirement" means, as of any date of calculation, the sum of an
amount in cash and principal amount of Federal Securities in the Escrow Account which,
together with the interest due on the Federal Securities, will be sufficient to pay, as the
installments thereof become due, the Aggregate Debt Service.
(i) "Federal Securities" means direct obligations of the United States of America and
obligations the principal of or interest on which are fully guaranteed by the United States of
America, none of which permit redemption prior to maturity at the option of the obligor.
(j) "Irrevocable Instruction and Authorization to Redeem Bonds" means a certificate
executed by the Issuer which provides for redemption of certain of the Refunded Bonds on the
Call Date, irrevocably instructs the Escrow Holder to give notice of such redemption and directs
the paying agent for the Refunded Bonds to pay the Refunded Bonds and the interest thereon
upon surrender thereof at maturity or on their Call Date, whichever is earlier.
(k) "Issuer" means the City of Clearwater, Florida.
2
(1) "Ordinance" means Ordinance No. 6378-99 enacted by the Issuer on April 15,
1999, as amended and supplemented by 6391-02 enacted by the Issuer on July 18, 2002, as
amended and supplemented.
(m) "Paying Agent" shall mean the Paying Agent for the Refunded Bonds.
(n) "Refunded Bonds" shall mean the Series 1999 Bonds maturing on and after
November 1, 2009.
(0) "Series 1999 Bonds" shall mean the Issuer's Stormwater System Revenue Bonds,
Series 1999, dated November 15, 1999.
Section 2. Deposit of Funds. The Issuer hereby deposits $ with the
Escrow Holder in immediately available funds, to be held in irrevocable escrow by the Escrow
Holder and applied solely as provided in this Agreement. The Issuer represents that:
(a) Such funds are all derived as follows:
(1)
$
from the net proceeds of the Bonds; and
(2) $
the Refunded Bonds.
transferred from the Sinking Fund held for the payment of
(b) Such funds, when applied pursuant to Section 3 below, will at least equal the
Escrow Requirement as of the date hereof.
Section 3. Use and Investment of Funds. The Escrow Holder acknowledges receipt
of $ and agrees:
(a) to hold the funds in irrevocable escrow during the term of this Agreement,
(b) to deposit the sum of $ , representing the $ of funds
from the Sinking Fund for the Refunded Bonds and $ from the proceeds of the
Bonds, in cash from the amount received by the Issuer in the Escrow Account, and, hold such
funds in cash until the November I, 20_ redemption date of the outstanding Series 1999
Bonds,
(c) to immediately invest $ of such funds derived from the
proceeds of the Bonds by the purchase of the Federal Securities set forth on Schedule B-1
attached hereto, and to immediately invest $ of such funds by the purchase of the
Federal Securities set forth on Schedule B-2,
3
(d)
to hold $
as uninvested cash, and
(e) to deposit in the Escrow Account, as received, the receipts of maturing principal
of and interest on the Federal Securities in the Escrow Account.
Section 4.
Payment of Refunded Bonds.
(a) Refunded Bonds. On the redemption date for each respective series of Refunded
Bonds, the Escrow Holder shall pay to the Paying Agent for the Refunded Bonds, from the cash
on hand in the Escrow Account, a sum sufficient to pay the Annual Debt Service for the
respective series of Refunded Bonds coming due on such date, as shown on Schedule A and as
demonstrated on Exhibit C hereto.
(b) Surplus. On the last redemption date for the Refunded Bonds, after making the
payments from the Escrow Account described in Subsection 4(a), the Escrow Holder shall pay
to the Issuer any remaining cash in the Escrow Account in excess of the Escrow Requirement, to
be used for any lawful purpose of the Issuer.
(c) Priority of Payments. The holders of the Refunded Bonds shall have an express
first lien on the funds and Federal Securities in the Escrow Account until such funds and
Federal Securities are used and applied as provided in this Agreement. If the cash on hand in
the Escrow Account is ever insufficient to make the payments required under Subsection 4(a),
all of the payments required under Subsection 4(a) shall be made when due before any
payments shall be made under Subsections 4(b).
(d) Fees and Expenses of Escrow Holder. On the date hereof, the Escrow Holder
acknowledges receipt of its fees to serve as Escrow Holder in the amount of [$500], and agrees
to invoice the Issuer for reimbursement of any out of pocket expenses incurred by the Escrow
Holder in performing its services hereunder, and further acknowledges that the Escrow Holder
does not have a lien on or claim against any funds held hereunder for reimbursement of such
expenses.
Section 5.
Reinvestment.
(a) Except as provided in Section 3 hereof, and in this Section, the Escrow Holder
shall have no power or duty to invest any funds held under this Agreement or to sell, transfer
or otherwise dispose of or make substitutions of the Federal Securities held hereunder.
(b) At the written request of the Issuer and upon compliance with the conditions
hereinafter stated, the Escrow Holder shall sell, transfer, otherwise dispose of or request the
4
redemption of any of the Federal Securities acquired hereunder and shall either apply the
proceeds thereof to the full discharge and satisfaction of the Refunded Bonds or substitute other
Federal Securities for such Federal Securities. The Issuer will not request the Escrow Holder to
exercise any of the powers described in the preceding sentence in any manner which would
cause any Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code of
1986, as amended, and the Regulations thereunder. The transactions may be effected only if (i)
an independent certified public accountant shall certify to the Escrow Holder that the cash and
principal amount of Federal Securities remaining on hand after the transactions are completed,
together with the interest due thereon, will be not less than the Escrow Requirement, and (ii) the
Escrow Holder shall receive an unqualified opinion from a nationally recognized bond counsel
or tax counsel to the effect that the transactions will not cause such Bonds to be "arbitrage
bonds" within the meaning of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder in effect on the date of the transactions and applicable to transactions
undertaken on such date.
Section 6. No Redemption or Acceleration of Maturity. Except as provided in the
Irrevocable Instruction and Authorization to Redeem Bonds, the Issuer will not accelerate the
maturity or due date of the Refunded Bonds.
Section 7. Responsibilities of Escrow Holder. The Escrow Holder and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever,
in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement,
the establishment of the Escrow Account, the acceptance of the funds deposited therein, the
purchase of the Federal Securities, the retention of the Federal Securities or the proceeds thereof
or any payment, transfer or other application of money or securities by the Escrow Holder in
any non-negligent act, non-negligent omission or non-negligent error of the Escrow Holder
made in good faith in the conduct of its duties. The Escrow Holder shall, however, be liable to
the Issuer for its negligent or willful acts, omissions or errors which violate or fail to comply
with the terms of this Agreement. The duties and obligations of the Escrow Holder shall be
determined by the express provisions of this Agreement. The Escrow Holder may consult with
counsel, who mayor may not be counsel to the Issuer, and in reliance upon the opinion of such
counsel shall have full and complete authorization and protection in respect of any action taken,
suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Holder
shall deem it necessary or desirable that a matter be proved or established prior to taking,
suffering or omitting any action under this Agreement, such matter may be deemed to be
conclusively established by a certificate signed by an authorized officer of the Issuer.
The Escrow Holder has no duty to determine or inquire into the happening or
occurrence of any event or contingency where the performance or the failure of performance of
the Issuer with respect to arrangements or contracts with others, the Escrow Holder's sole duty
5
and responsibility hereunder being to safeguard the Escrow Account and dispose of and deliver
the same strictly in accordance with this Agreement.
Section 8. Resignation of Escrow Holder. The Escrow Holder may resign and
thereby become discharged from the duties and obligations hereby created, by notice in writing
given to the Issuer and published once in a newspaper of general circulation published in the
territorial limits of the Issuer, and in a daily newspaper of general circulation or a financial
journal published or circulated in the Borough of Manhattan, City and State of New York, not
less than sixty (60) days before such resignation shall take effect. Such resignation shall take
effect immediately upon the appointment of a successor Escrow Holder hereunder and
payments of all amounts due the resigning Escrow Holder.
Section 9.
Removal of Escrow Holder.
(a) The Escrow Holder may be removed at any time by an instrument or concurrent
instruments in writing, executed by the holders of not less than fifty-one per centum (51%) in
aggregate principal amount of each series of Refunded Bonds then outstanding, such
instruments to be filed with the Issuer, and notice in writing given by such holders to all of the
registered holders of each series of the Refunded Bonds and published once in a newspaper of
general circulation published in the territorial limits of the Issuer, and in a daily newspaper of
general circulation or a financial journal published or circulated in the Borough of Manhattan,
City and State of New York, not less than sixty (60) days before such removal is to take effect as
stated in such instrument or instruments. A photographic copy of any instrument filed with the
Issuer under the provisions of this paragraph shall be delivered by the Issuer to the Escrow
Holder.
(b) The Escrow Holder may also be removed at any time for any breach of trust or
for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any
provisions of this Agreement with respect to the duties and obligations of the Escrow Holder,
by the Issuer or by the holders of not less than twenty-five per centum (25%) in aggregate
principal amount of each series of the Refunded Bonds then outstanding.
(c) No such removal shall take effect until a successor Escrow Holder shall be appointed
hereunder.
Section 10.
Successor Escrow Holder.
(a) If at any time hereafter the Escrow Holder shall resign, be removed, be dissolved
or otherwise become incapable of acting, or shall be taken over by any governmental official,
agency, department or board, the position of Escrow Holder shall thereupon become vacant. If
the position of Escrow Holder shall become vacant for any of the foregoing reasons or for any
6
other reason, the Issuer shall appoint a successor Escrow Holder to fulfill the duties of Escrow
Holder hereunder. The Issuer shall publish notice of any such appointment once in each week
for four (4) successive weeks in a newspaper of general circulation published in the territorial
limits of the Issuer and in a daily newspaper of general circulation or a financial journal
published or circulated in the Borough of Manhattan, City and State of New York, and, before
the second publication of such notice shall mail a copy thereof to the original purchaser or
purchasers of the Refunded Bonds.
(b) At any time within one year after such vacancy shall have occurred, the holders
of a majority in principal amount of each series of Refunded Bonds then outstanding, by an
instrument or concurrent instruments in writing, executed by all such bondholders and filed
with the governing body of the Issuer, may appoint a successor Escrow Holder, which shall
supersede any Escrow Holder theretofore appointed by the Issuer. Photographic copies of each
such instrument shall be delivered promptly by the Issuer, to the predecessor Escrow Holder
and to the Escrow Holder so appointed by the bondholders.
(c) If no appointment of a successor Escrow Holder shall be made pursuant to the
foregoing provisions of this section, the holder of any Refunded Bonds then outstanding, or any
retiring Escrow Holder may apply to any court of competent jurisdiction to appoint a successor
Escrow Holder. Such court may thereupon, after such notice, if any, as such court may deem
proper and prescribe, appoint a successor Escrow Holder.
Section 11. Term. This Agreement shall commence upon its execution and delivery
and shall terminate when the Refunded Bonds have been paid and discharged in accordance
herewith, and all amounts held by the Escrow Holder hereunder have been applied in
accordance herewith.
Section 12. Severability. If anyone or more of the covenants or agreements provided
in this Agreement on the part of the Issuer or the Escrow Holder to be performed should be
determined by a court of competent jurisdiction to be contrary to law, such covenant or
agreements herein contained shall be null and void and shall be severed from the remaining
covenants and agreements and shall in no way affect the validity of the remaining provisions of
this Agreement.
Section 13. Counterparts. This Agreement may be executed in several counterparts,
all or any of which shall be regarded for all purposes as duplicate originals and shall constitute
and be but one and the same instrument.
Section 14.
State of Florida.
Governing Law. This Agreement shall be construed under the laws of the
7
Section 15. Security for Accounts and Funds. All accounts and funds maintained or
held pursuant to this Agreement shall be continuously secured in the same manner as other
deposits of municipal funds are required to be secured by the laws of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers and their official seals to be hereunto affixed as of the date first
above written.
THE CITY OF CLEARWATER, FLORIDA
(SEAL)
Mayor
ATTEST:
City Clerk
City Manager
Approved as to Form,
Sufficiency and Correctness:
City Attorney
WELLS FARGO BANK, N.A. as Escrow
Holder
(SEAL)
By:
Its:
8
Schedule A
(Aggregate Debt Service; Semi-Annual Debt Service;
Annual Debt Service; Description of Refunded Bonds)
Series 1999 Bonds
Payment Date Principal Premium Interest Total Debt Service
May I, 20_ $ $
November I, 20 $ $ $ $
Schedule B-1
(Restricted Federal Securities for Investment)
Maturity Bond Type Principal Coupon Yield Purchase
Price
May 1, 20_ SLGS-C1 $ $
Novernber 1, 20_ SLGS-Cl % %
Schedule B-2
(Unrestricted Federal Securities for Investment)
Maturity Bond Type Principal Coupon Yield Purchase
Price
May I, 20_ SLGS-Cl $ $
Schedule C
Escrow Cash Flow
Date Principal Rate Interest Transfer Receipts Disbursements Cash
Balance
$ $ $
$ $
% $