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10-25
RESOLUTION NO. 10-25 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO EXCEED $50,000,000 CITY OF CLEARWATER, FLORIDA, WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2010; AWARDING THE SALE THEREOF TO WELLS FARGO BANK, NATIONAL ASSOCIATION, ON BEHALF OF ITSELF AND THE CO-MANAGERS SELECTED BY THE CITY, SUBJECT TO THE TERMS AND CONDITIONS OF A PURCHASE CONTRACT; PROVIDING FOR THE ISSUANCE OF THE SERIES 2010 BONDS IN BOOK- ENTRY-ONLY FORM; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE DELIVERY OF THE BONDS; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE CERTIFICATE; APPOINTING A PAYING AGENT AND REGISTRAR; APPOINTING AN ESCROW AGENT; APPOINTING A VERIFICATION AGENT; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on August 2, 1984, the City Council of the City of Clearwater, Florida (the "City or the "Issuer") enacted Ordinance No. 3674-84 (the "Original Ordinance"), as amended and supplemented in Ordinance 6915-01 enacted November 15, 2001 (collectively with the Original Ordinance as amended and supplemented from time to time, the "Bond Ordinance") to provide for the issuance of bonds payable from Net Revenues of the Water and Sewer System (as defined therein); and WHEREAS on July 25, 2002, the City issued its $58,680,000 City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds"), as Additional Parity Obligations under the Bond Ordinance to provide additional funds for capital improvements (the "Series 2002 Projects") to the System (as defined in the Original Ordinance); and WHEREAS, it is in the best interest of the City to designate a portion of bonds authorized by the Bond Ordinance to refund the Series 2002 Bonds in whole or in part, and designate the Refunding Bonds as "Water and Sewer Revenue Refunding Bonds, Series 2010" to reflect the year of their issuance (the "Series 2010 Bonds"); and WHEREAS, it is in the best interest of the City to provide for the negotiated sale of not to exceed $50,000,000 of Series 2010 Bonds; and WHEREAS, the Issuer intends on negotiating a sale of the Series 2010 Bonds with Wells Fargo Bank, National Association, on behalf of itself and as representative of the co- managers RBC Capital Markets Corporation, Fifth Third Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, each as selected by the City's Finance Director following a RFP process (collectively, the "Underwriters") subject to the terms and conditions contained herein and set forth in a Purchase Contract, a copy of which is attached hereto as Exhibit "A" (the "Purchase Contract") and authorizing its Mayor, or in his absence the Vice Mayor, and City Manager to execute such Purchase Contract upon the approval of the terms thereof by the City Manager and City Finance Director; and Resolution No. 10-25 WHEREAS, the Issuer now desires to approve the issuance of its Series 2010 Bonds, to sell its Series 2010 Bonds pursuant to the Purchase Contract, to authorize the distribution of a Preliminary Official Statement and an Official Statement in connection with the issuance of the Series 2010 Bonds and to take certain other actions in connection with the issuance and sale of the Series 2010 Bonds; and WHEREAS, the Issuer will be provided all applicable disclosure information by the Underwriters as required by Section 218.385, Florida Statutes, prior to the execution of the Purchase Contract, a copy of which disclosure is to be attached to the Purchase Contract; and WHEREAS, this resolution shall constitute a supplemental resolution under the terms of the Bond Ordinance, and all capitalized undefined terms used herein shall have the meanings set forth in the Bond Ordinance; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. The not to exceed $50,000,000 of the Water and Sewer Revenue Refunding Bonds, Series [to be determined] authorized by the Bond Ordinance being offered pursuant to this resolution are hereby designated as Series 2010 Bonds (the "Series 2010 Bonds"), provided that in the event the Series 2010 Bonds are not issued until 2011 or a later year, the series designation shall reflect the year in which the Series 2010 Bonds are actually issued. The issuance of not to exceed $50,000,000 of the Series 2010 Bonds by the City is hereby approved upon the terms and conditions set forth in the Bond Ordinance and this Resolution. SECTION 2. It is in the best interest of the Issuer and the residents and inhabitants thereof that the Series 2010 Bonds be issued utilizing a pure book-entry system of registration. For so long as the Series 2010 Bonds remain in such book entry only system of registration, in the event of a conflict between the provisions of the Bond Ordinance and the provisions of the Blanket Letter of Representations between the City and Depository Trust Company as previously executed and delivered, the terms and provisions of the Blanket Letter of Representations shall prevail. SECTION 3. (a) Due to the willingness of the Underwriters to purchase not to exceed $50,000,000 in aggregate principal amount of the Series 2010 Bonds at favorable interest costs and the importance of timing in the marketing of such obligations in conjunction with funding and structuring the defeasance escrow for the Series 2002 Bonds, it is hereby determined that it is in the best interest of the public and the Issuer to sell the Series 2010 Bonds at a negotiated sale and such sale to the Underwriters pursuant to the terms and conditions contained in the Purchase Contract and herein is hereby authorized and approved, subject to the satisfaction of the conditions set forth in Section 3(b) below. (b) The Finance Director is hereby authorized to receive the offer to purchase the Series 2010 Bonds from the Underwriters in the form of an executed Purchase Contract in the form approved herein. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2010 Bonds on their determination that the offer submitted by the Underwriters for the purchase of all of the Series 2010 Bond are within the following parameters: (i) the refunding of that portion of the Series 2002 Bonds to be refunded by the Series 2010 Bonds shall provide the City with a net present value savings of not less than Resolution No. 10-25 4.00% of the par amount of such Series 2002 Bonds so refunded, (ii) the Underwriters' Discount shall not be in excess of 0.60% of the principal amount thereof, (iii) the final maturity shall not be later than December 1, 2032, and (iv) the principal amount shall not be in excess of the amount necessary to defease and redeem the Series 2002 Bonds to be refunded plus costs of issuing the Series 2010 Bonds. The Finance Director, in coordination with the City's financial advisor and the Underwriters, is hereby authorized and directed to determine what portions of the Series 2002 Bonds are in the best interest of the City to be refunded through the issuance of the Series 2010 Bonds. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2010 Bonds as set forth above or to reject the offer from the Underwriters for any or all series of Series 2010 Bonds or any portion thereof. Such award shall be final. The acceptance of the offer to purchase the Series 2010 Bonds, to the extent the proceeds thereof are used to refund the Series 2002 Bonds shall constitute a decision to refund the Series 2002 Bonds in accordance with the Bond Ordinance. SECTION 4. The Series 2010 Bonds shall be sold to the Underwriters, upon the terms and conditions set forth in the Purchase Contract attached hereto as Exhibit "A" and incorporated by reference, upon the satisfaction of the conditions set forth in Section 3(b) hereof. The Mayor, or in his absence the Vice Mayor, the City Manager and the City Clerk are hereby authorized to execute such Purchase Contract in substantially the form attached as Exhibit "A" 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. SECTION 5. The Series 2010 Bonds shall be dated, shall bear interest at a rate or rates not exceeding the maximum rate permitted by law, payable at the times, shall mature and shall be subject to redemption as provided in the Purchase Contract. The use of the proceeds of the Series 2010 Bonds, shall be as provided in the Official Statement relating to the Series 2010 Bonds. SECTION 6. The Series 2010 Bonds shall be issued under and secured by the Bond Ordinance and shall be executed and delivered by the Mayor, the City Manager and the City Clerk upon the approval of the City Attorney as to form and legal sufficiency, in substantially the form set forth in the Bond Ordinance, with such additional changes and insertions therein as conform to the provisions of the Purchase Contract and such execution and delivery shall be conclusive evidence of the approval thereof by such officers. SECTION 7. U.S. Bank National Association is hereby appointed Paying Agent and Registrar for the Series 2010 Bonds to serve pursuant to a Paying Agent Agreement substantially in the form customarily used by the Issuer with its Paying Agents. SECTION 8. U.S. Bank National Association is hereby appointed as the Escrow Agent under the Escrow Deposit Agreement for the Series 2002 Bonds, which Escrow Deposit Agreement shall be substantially in the form approved by the Original Ordinance. SECTION 9. Causey Demgen & Moore Inc. is hereby appointed as the Verification Agent for the defeasance of the Series 2002 Bonds. SECTION 10. On the date of issuance of the Series 2010 Bonds, the Issuer may transfer the funds on hand in the various funds and accounts established for the 2002 Resolution No. 10-25 Refunded Bonds in such manner as may be approved by a certificate of the Finance Director executed prior to or simultaneously with the issuance of the Series 2010 Bonds. SECTION 11. The distribution by the Underwriters of the Preliminary Official Statement is hereby approved, confirmed and ratified. The distribution of a final Official Statement of the Issuer relating to the issuance of the Series 2010 Bonds is hereby approved, such final Official Statement to be in substantially the form attached hereto as Exhibit "B", with such additional changes, insertions and omissions as may be made and approved by officers of the Issuer executing the same, such execution to be conclusive evidence of any such approval. The Mayor, or in his absence the Vice Mayor, and the City Manager are hereby authorized to execute such Official Statement in substantially the form attached hereto as Exhibit "B". The execution of such Official Statement by such officers is hereby approved with such additional changes, insertions and omissions as may be made and approved by such officers. For purposes of Rule 15c2-12 of the United States Securities and Exchange Commission (the "Rule"), the City Manager and the Finance Director are hereby authorized and directed to deem "final" the Preliminary Official Statement in substantially the form attached hereto as Exhibit "B". SECTION 12. 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 "C", to be executed by the City and dated the date of issuance and delivery of the Series 2010 Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate"). Notwithstanding any other provision of this Resolution, failure of the City to comply with such Continuing Disclosure Certificate shall not be considered an event of default; however, any holder of Series 2010 Bonds 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 and the Continuing Disclosure Certificate. The Mayor, or in his absence the Vice Mayor, the City Manager and the City Clerk are hereby authorized to execute such Continuing Disclosure Certificate upon the approval of the City Attorney as to form and legal sufficiency, in substantially the form attached as Exhibit "C", 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. SECTION 13. All prior resolutions of the Issuer inconsistent with the provisions of this resolution are hereby modified, supplemented and amended to conform with the provisions herein contained and except as otherwise modified, supplemented and amended hereby shall remain in full force and effect. SECTION 14. The Mayor, or in his absence the Vice Mayor, the City Manager, the Finance Director, the City Attorney and the City Clerk or any other appropriate officers of the Issuer are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Resolution, the Purchase Contract, the Escrow Deposit Agreement or any other document referred to above as a prerequisite or precondition to the issuance of the Series 2010 Bonds and any such representation made therein shall be deemed to be made on behalf of the Issuer, and the City Manager and the Finance Director are hereby authorized to take such actions as may be necessary or desired to effect the refunding of the Series 2002 Bonds, including, but not limited to, the selection of a verification agent and escrow investments. In the event both the Mayor and the Vice Mayor are unable to execute the Resolution No. 10-25 documents related to the Series 2010 Bonds, then any other member of the City Council shall be authorized to execute such documents with the full force and effect as if the Mayor, or the Vice Mayor had executed same. All action taken to date by the officers of the Issuer in further- ance of the issuance of the Series 2010 Bonds is hereby approved, confirmed and ratified. SECTION 15. This resolution shall become effective immediately upon its adoption. Passed and adopted by the City Council of the City of Clearwater, Florida, this 4th day of November, 2010. CITY OF CLEARWATER, FLORIDA By: - ?? Frank V. Hibbard Mayor Approved as to form: Attest: Pamela K. Akin City Attorney G Rosemarie Call, City Clerk OF ?//,r ?A o , o 5 Resolution No. 10-25 EXHIBIT A FORM OF BOND PURCHASE CONTRACT Resolution No. 10-25 EXHIBIT B FORM OF PRELIMINARY OFFICIAL STATEMENT Resolution No. 10-25 EXHIBIT C FORM OF CONTINUING DISCLOSURE CERTIFICATE Resolution No. 10-25 CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2010 November , 2010 BOND PURCHASE AGREEMENT Mayor and City Council Municipal Services Building, 3rd Floor 100 S. Myrtle Avenue Clearwater, FL 33756 Ladies and Gentlemen: Wells Fargo Bank, National Association (the "Representative"), as representative of itself, RBC Capital Markets Corporation, Fifth Third Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Underwriters"), offers to enter into this Bond Purchase Agreement with the City of Clearwater, Florida (the "City"). This offer is made subject to written acceptance hereof by the City at or before 12:00 midnight, New York City time, on the date hereof. If not so accepted, this offer will be subject to withdrawal by the Underwriters upon written notice delivered to the City at any time prior to the acceptance hereof by the City. 1. Purchase and Sale. Upon the terms and conditions and in reliance on the representations, warranties, covenants and agreements set forth herein, the Underwriters hereby agree to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters, all (but not less than all) of the $ aggregate principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2010 (the "Series 2010 Bonds"). The Series 2010 Bonds shall be dated their date of delivery and shall be payable in the years and principal amounts, bear such rates of interest and be subject to redemption prior to maturity, all as set forth in Exhibit A attached hereto. The purchase price for the Series 2010 Bonds shall be $ (representing the par amount of the Series 2010 Bonds, [less net original issue discount][plus net original issue premium] of $ and less Underwriters' discount of $ ). The purchase price shall be payable to the City in immediately available funds. The Series 2010 Bonds shall be as described in the hereinafter described Preliminary Official Statement ("Preliminary Official Statement"), and shall be issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, including Chapter 166, Florida Statutes, the Charter of the City, the Bond Ordinance (as defined in the hereinafter described Resolution) (the "Ordinance") and other applicable provisions of law (collectively, the "Act") and Resolution 10-_ of the City, adopted on November _, 2010 (the "Resolution"). Terms used in capitalized form and not defined herein shall have the meanings assigned to such terms in the Resolution and the Preliminary Official Statement. {JA569704;I} 2. Delivery of Official Statement and Other Documents. (a) Prior to the date hereof, the City provided to the Underwriters the Preliminary Official Statement dated November _, 2010 (the "Preliminary Official Statement"), that the City deemed final as of its date, except for certain permitted omissions (the "permitted omissions"), as contemplated by Rule 15c2-12 of the Securities and Exchange Commission ("Rule 15c2-12" or the "Rule") in connection with the pricing of the Series 2010 Bonds. The City hereby confirms that the Preliminary Official Statement was final as of its date, except for the permitted omissions, and ratifies and confirms the use and distribution thereof by the Underwriters prior to the date hereof in connection with the public offering of the Series 2010 Bonds. (b) The City shall deliver, or cause to be delivered, at its expense, to the Underwriters within seven (7) business days after the date hereof, sufficient copies of the final printed Official Statement dated the date hereof (the "Official Statement") in form and substance satisfactory to the Underwriters. In determining whether the number of copies to be delivered by the City is sufficient, the number shall be sufficient to enable the Underwriters to comply with the requirements of Rule 15c2-12, all applicable rules of the Municipal Securities Rulemaking Board ("MSRB") and to fulfill their duties and responsibilities under Florida and federal securities laws generally. The City authorizes the use and distribution of the Official Statement in connection with the public offering and sale of the Series 2010 Bonds. (c) From the date hereof to and including the date which is twenty-five days from the end of the underwriting period (as defined for purposes of Rule 15c2-12), if an event occurs which, in the reasonable opinion of the Underwriters or in the reasonable opinion of the City, requires a supplement or amendment to the Official Statement so that it will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriters and the City. The City will promptly notify the Representative of the occurrence of any event of which it has knowledge, which, in its opinion, is an event described in the preceding sentence. The amendments or supplements that may be authorized for use with respect to the Series 2010 Bonds are hereinafter included within the term "Official Statement." 3. Public Offering. The Underwriters agree to make a bona fide offering to the public of all of the Series 2010 Bonds at not in excess of the initial public offering price or prices (or below the yield or yields) set forth in Exhibit A hereto; provided, however, that the Underwriters may (i) offer and sell the Series 2010 Bonds at prices lower (or yields higher) than the public offering prices (or yields) set forth in Exhibit A hereto and (ii) change such initial offering prices (or yields) as the Underwriters may deem necessary in connection with the marketing of the Series 2010 Bonds. 4. Good Faith Check. The City hereby acknowledges receipt of a corporate check of the Representative payable to the City in an amount equal to $ (the "Good Faith Check") as security for the performance by the Underwriters of their obligation to accept and pay for the Series 2010 Bonds at the Closing in accordance with the provisions of this Bond Purchase Agreement. The City shall retain the Good Faith Check, uncashed, except under the circumstances hereinafter set forth. In the event the City fails to deliver the Series 2010 Bonds at {]A569704;11 2 the Closing, or if the City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement, or if such obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, the City shall be obligated to immediately return the uncashed Good Faith Check to the Representative. In the event the Underwriters accept and pay for the Series 2010 Bonds at Closing, the uncashed Good Faith Check shall be returned to the Representative at Closing. In the event the Underwriters fail (other than for a reason permitted under this Bond Purchase Agreement) to accept and pay for the Series 2010 Bonds at Closing, the Good Faith Check may be cashed and the proceeds thereof shall be retained by the City as and for full liquidated damages for such failure, and not as a penalty, and for any and all defaults hereunder on the part of the Underwriters, and thereupon, all claims and rights hereunder against the Underwriters shall be fully released and discharged, it being understood by the City and the Underwriters that actual damages in such circumstances may be difficult or impossible to compute. 5. City Representations, Warranties, Covenants and Agreements. The City represents and warrants to and covenants and agrees with the Underwriters that, as of the date hereof and as of the date of the Closing: (a) The Preliminary Official Statement was, as of the date thereof, and the Official Statement will be as of its date, and at all times subsequent thereto up to and including the date twenty-five days following the end of the underwriting period (as defined for purposes of Rule 15c2-12) will remain, true and correct in all material respects, and the Preliminary Official Statement did not, as of the date thereof, and the Official Statement will not at any time up to and including the date twenty-five days following the end of the underwriting period, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In addition, any amendments or supplements to the Official Statement prepared and furnished by the City pursuant hereto will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) The City is not, nor has it been, in default on any bond issue since December 31, 1975 that would be considered material by a reasonable investor, the City has not undertaken an independent review or investigation of securities for which it has served as conduit issuer, and the City does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2010 Bonds because the City is not obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the City have been pledged or used to pay such securities or the interest thereon. (c) The City has at all times complied with all of its prior continuing disclosure undertakings entered into pursuant to paragraph (b)(5) of Rule 15c2-12. (d) The City will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters as the Underwriters may reasonably request in order to (i) qualify the Series 2010 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate and (ii) determine the eligibility of the Series 2010 Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 2010 {JA569704;1} Bonds; provided that the City shall not be obligated to take any action that would subject it to general or special service of process in any state where it is not now so subject or qualify the City to do business in such other jurisdictions. (e) The City will advise the Underwriters promptly of any proposal to amend or supplement the Official Statement and will not effect any such amendment or supplement without such prior notice to the Underwriters. The City will advise the Underwriters promptly of the institution of any proceedings known to it prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Series 2010 Bonds. 6. The Closing. At or prior to noon, New York City time, on November _, 2010, or at such earlier or later time or date to which the City and the Underwriters may mutually agree, the City will, subject to the terms and conditions hereof, deliver the Series 2010 Bonds to the Underwriters in full book-entry form, duly executed, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the aggregate purchase price of the Series 2010 Bonds as set forth in Paragraph 1 hereof (such delivery of and payment for the Series 2010 Bonds is herein called the "Closing"). The Closing shall occur at the offices of the City, or such other place to which the City and the Underwriters shall have mutually agreed. The Series 2010 Bonds shall be prepared and delivered as fully registered bonds in authorized denominations and registered in full book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and shall be delivered to DTC through the "F.A.S.T." procedure. 7. Closing Conditions. The Underwriters have entered into this Bond Purchase Agreement in reliance upon the representations, warranties, covenants and agreements of the City contained herein and in reliance upon the representations, warranties, covenants and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Series 2010 Bonds shall be conditioned upon the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: (a) The representations, warranties, covenants and agreements of the City contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At or prior to the Closing, the Underwriters shall have received copies of each of the following documents: (1) An opinion of Bryant Miller Olive, P.A., Bond Counsel ("Bond Counsel"), dated the date of the Closing and addressed to the City, in substantially the form attached as an appendix to the Official Statement, accompanied by a letter authorizing the Underwriters to rely thereon as though such opinion was addressed to the Underwriters; (2) An opinion of Bond Counsel, dated the date of the Closing and addressed to the Underwriters, in form and substance acceptable to the Underwriters; (1A569704;1) 4 (3) An opinion of the City Attorney, dated the date of Closing and addressed to at least the City and the Underwriters, in form and substance acceptable to the Underwriters; (4) A certificate, dated the date of the Closing, signed by the City Manager of the City or other authorized officer of the City in substantially the form attached hereto as Exhibit C (but in lieu of or in conjunction with such certificate the Underwriters may, in their sole discretion, accept certificates or opinions of Bond Counsel, the City Attorney, or of other counsel acceptable to the Underwriters, that in the opinion of such counsel the issues raised in any pending or threatened litigation referred to in such certificate are without substance or that the contentions of all plaintiffs therein are without merit); (5) The opinion of Nabors, Giblin & Nickerson, P.A. ("Disclosure Counsel"), dated the date of the Closing and addressed to the City and the Underwriters, to the effect that, with said firm's participation in the preparation and review of the Official Statement and without having undertaken to determine independently the accuracy or completeness of the contents of the Official Statement, nothing has come to the attention of said firm that would cause it to believe that the Official Statement (except for the financial and statistical data contained therein and information relating to the book-entry only registration system as to which no opinion need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (6) Certified copies of the Ordinance and the Resolution; (8) A copy of the executed Continuing Disclosure Certificate, Escrow Deposit Agreement and Official Statement; (9) Evidence of ratings from Fitch Ratings ("Fitch"), Standard & Poor's Ratings Services ("S&P") and Moody's Investors Service ("Moody's") on the Series 2010 Bonds of AA-, AA- and Aa3, respectively; (10) The written consent of Burton and Associates, to the use of their report in Appendix F of the Preliminary and final Official Statement; and (15) Such additional legal opinions, certificates, instruments and other documents as the Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the representations, warranties, covenants and agreements of the City contained herein and the truth, accuracy and completeness of the statements and information contained in the Official Statement and the due performance or satisfaction by the City on or prior to the date of the Closing of all agreements then to be performed and conditions then to be satisfied by it. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriters, with such exceptions and modifications as shall be approved by the Underwriters and as shall not, in the reasonable opinion of the Underwriters, materially impair the investment quality of the Series 2010 Bonds. {JA569704;1} If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2010 Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 2010 Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriters nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriters set forth in Paragraph 9 hereof shall continue in full force and effect. 8. Termination. The Underwriters may terminate this Bond Purchase Agreement by written notice to the City in the event that between the date hereof and the Closing: (a) the marketability of the Series 2010 Bonds or the market price thereof, in the reasonable opinion of the Underwriters, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation (other than any actions taken by either House of Congress on or prior to the date hereof) (i) enacted or adopted by the United States, (ii) recommended to the Congress or otherwise endorsed for passage, by press release, other form of notice or otherwise, by the President of the United States, the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, the Treasury Department of the United States or the Internal Revenue Service, or (iii) favorably reported out of the appropriate Committee for passage to either House of the Congress by any full Committee of such House to which such legislation has been referred for consideration, or by any decision of any court of the United States or by any order, rule or regulation (final, temporary or proposed) on behalf of the Treasury Department of the United States, the Internal Revenue Service or any other authority or regulatory body of the United States, or by a release or announcement or communication issued or sent by the Treasury Department or the Internal Revenue Service of the United States, or any comparable legislative, judicial or administrative development affecting the federal tax status of the City, its property or income, obligations of the general character of the Series 2010 Bonds, as contemplated hereby, or the interest thereon; or (b) any legislation, rule, or regulations shall be introduced in, or be enacted or adopted in the State of Florida, or a decision by any court of competent jurisdiction within the State of Florida shall be rendered which, in the reasonable opinion of the Underwriters, materially adversely affects the market for the Series 2010 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 2010 Bonds to be purchased by them; or (c) any amendment to the Official Statement is proposed by the City or deemed necessary by Bond Counsel, or the Underwriters which, in the reasonable opinion of the Underwriters, materially adversely affects the market for the Series 2010 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 2010 Bonds to be purchased by them; or (d) there shall have occurred any outbreak or escalation of hostility, act of terrorism, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets is such as to make it, in the judgment of the Underwriters, impractical or inadvisable to proceed with the offering or delivery of the Series 2010 Bonds as contemplated by the Official Statement (exclusive of any amendment or supplement thereto), or (JA569704;1) 6 (e) legislation shall be enacted or adopted, or any action shall be taken by, or on behalf of, the Securities and Exchange Commission which, in the reasonable opinion of Bond Counsel, has the effect of requiring the contemplated distribution of the Series 2010 Bonds to be registered under the Securities Act of 1933, as amended, or the Resolution to be qualified under the Trust Indenture Act of 1939, as amended, or any laws analogous thereto relating to governmental bodies, and compliance therewith cannot be accomplished prior to the Closing; or (f) legislation shall be introduced by amendment or otherwise in or be enacted by, the House of Representatives or the Senate of the Congress of the United States, or a decision by a Court of the United States of America shall be rendered, or a stop order, ruling, release, regulation, official statement or no-action letter by or on behalf of the Securities and Exchange Commission or any other governmental authority having jurisdiction of the subject matter of the Series 2010 Bonds shall have been proposed, issued or made (which is beyond the control of the Underwriters or the City to prevent or avoid) to the effect that the issuance, offering or sale of the Series 2010 Bonds as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Series 2010 Bonds is or would be in violation of any of the federal securities laws at Closing, including the Securities Act of 1933, as amended and then in effect, the Securities Exchange Act of 1934, as amended and then in effect, or the Trust Indenture Act of 1939, as amended and then in effect, or with the purpose or effect of otherwise prohibiting the offering and sale of obligations of the general character of the Series 2010 Bonds, or the Series 2010 Bonds, as contemplated hereby; or (g) there shall have occurred, after the signing hereof, either a financial crisis or a default with respect to the debt obligations of the City or proceedings under the federal or State of Florida bankruptcy laws shall have been instituted by the City, in either case the effect of which, in the reasonable judgment of the Underwriters, is such as to materially and adversely affect (i) the market price or the marketability of the Series 2010 Bonds, or (ii) the ability of the Underwriters to enforce contracts for the sale of the Series 2010 Bonds; or (h) a general banking moratorium shall have been declared by the United States, New York, North Carolina or Florida authorities, which in the reasonable opinion of the Underwriters, materially adversely affects the market for the Series 2010 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 2010 Bonds to be purchased by them; or (i) any national securities exchange, or any governmental authority, shall impose, as to the Series 2010 Bonds or obligations of the general character of the Series 2010 Bonds any material restrictions not now in force, or increase materially those now in force, with respect to the establishment of material restrictions upon trading of securities, including limited or minimum prices, by any governmental authority or by any national securities exchange, which in the reasonable opinion of the Underwriters, materially adversely affects the market for the Series 2010 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 2010 Bonds to be purchased by them; or 0) legal action shall have been filed against the City wherein an adverse ruling would materially adversely affect the transactions contemplated hereby or by the Official Statement or the validity of the Series 2010 Bonds, the Ordinance, the Resolution, the Continuing Disclosure Certificate, the Escrow Deposit Agreement or this Bond Purchase Agreement; provided, however, that as to any such litigation, the City may request and the Underwriters may accept an opinion by the City Attorney, Bond Counsel, or of other counsel 7 {JA569704;1} acceptable to the Underwriters, that in such counsel's opinion the issues raised by any such litigation or proceeding are without substance or that the contentions of any plaintiffs therein are without merit; or (k) any information shall have become known which, in the Underwriters' reasonable opinion, makes untrue, incorrect or misleading in any material respect any statement or information contained in the Official Statement, as the information contained therein has been supplemented or amended by other information, or causes the Official Statement, as so supplemented or amended, to contain an untrue, incorrect or misleading statement of a material fact or to omit to state a material fact required or necessary to be stated therein in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and upon the receipt of notice of same by the City, the City fails to promptly amend or supplement the Official Statement; or (1) an event occurs as a result of which the Official Statement, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact which is required or necessary to be stated therein in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading which, in the reasonable opinion of the Underwriters, requires an amendment or supplement to the Official Statement and, in the reasonable opinion of the Underwriters, materially adversely affects the marketability of the Series 2010 Bonds or the contemplated offering prices thereof and upon the receipt of notice by the City, the City fails to promptly amend or supplement the Official Statement; or (m) trading in the City's outstanding securities shall have been suspended by the Securities and Exchange Commission or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange; or (n) there shall have occurred since September 30, 2009 any material adverse change in the affairs of the City from that reflected in the audited and unaudited financial statements of the City included in the Official Statement which has a material effect on the market for the Series 2010 Bonds or the sale, at the contemplated offering prices, by the Underwriters of the Series 2010 Bonds, other than as previously disclosed to the Underwriters in writing. 9. Expenses. The Underwriters shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the obligations of the City hereunder including, but not limited to: (a) the cost of preparation, printing or other reproduction of the Resolution; (b) the cost of preparation and printing of the Series 2010 Bonds; (c) the fees and disbursements of Bond Counsel, Disclosure Counsel and the City Attorney; (d) the fees and disbursements of any other experts, consultants or advisors retained by the City; (e) fees for bond ratings; (f) the fees and expenses of the Registrar, the Paying Agent and of their respective counsel; (g) the costs of preparing, printing and delivering the Preliminary Official Statement, the Official Statement and any supplements or amendments to either of them; and (h) expenses (including in the expense component of the Underwriters' Discount) incurred on behalf of the City's employees which are incidental to implementing this agreement, including, but not limited to meals and transportation of those City employees; however, the City shall have no obligation to pay any fees, costs or other amounts relating to any supplements or amendments to the Official Statement required as a result of incorrect information provided by the Underwriters or {JA569704;1} 8 to the extent such amendment or supplement is prepared after the period described in paragraph 2(c) hereof (provided that for purposes of this paragraph, the end of the underwriting period shall be deemed to be the date of the Closing). The Underwriters shall pay: (a) the cost of any related filing fees under state securities laws; (b) all advertising expenses incurred by them; and (c) all other expenses incurred by them or any of them in connection with the public offering of the Series 2010 Bonds, including the fees and disbursements of Counsel to the Underwriters. In the event that either party shall have paid obligations of the other as set forth in this Section 9, adjustment shall be made at the time of the Closing. 10. Notices. Any notice or other communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing at its address set forth above to the attention of the City Manager, and any notice or other communication to be given to the Underwriters may be given by delivering the same in writing to Wells Fargo Bank, National Association, 2363 Gulf-to-Bay Boulevard, Suite 200, Clearwater, FL 33765, Attention: David R. Thornton. 11. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriters (including the successors or assignees of the City or the Underwriters) and no other party or person shall acquire or have any right hereunder or by virtue hereof. All representations, warranties, covenants and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriters; (ii) the delivery of and payment for the Series 2010 Bonds pursuant to this Bond Purchase Agreement; or (iii) any termination of this Bond Purchase Agreement, but only to the extent provided by the last paragraph of Section 7 hereof. 12. No Advisory or Fiduciary Role. The City acknowledges and agrees that (i) the purchase and sale of the Series 2010 Bonds pursuant to this Purchase Contract is an arm's-length commercial transaction between the City and the Underwriters, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriters are and have been acting solely as principals and are not acting as the agents or fiduciaries of the City, (iii) the Underwriters have not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the City on other matters) and the Underwriters have no obligation to the City with respect to the offering contemplated hereby except the obligations expressly set forth in this Bond Purchase Agreement and (iv) the City has consulted its own legal, financial and other advisors to the extent it has deemed appropriate. 13. Waiver. Notwithstanding any provision herein to the contrary, the performance of any and all obligations of the City hereunder and the performance of any and all conditions contained herein for the benefit of the Underwriters may be waived by the Underwriters, in their sole discretion. 14. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance hereof by the Mayor or City Manager and shall be valid and enforceable at the time of such acceptance. {JA569704;1} 15. Counterparts. This Bond Purchase Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 16. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 17. Florida Law Governs. The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State of Florida. 18. Truth In Bonding Statement. Pursuant to the provisions of Section 218.385(2) and (3), Florida Statutes, as amended, the Underwriters provide the following truth-in-bonding statement: (a) The City is issuing $ aggregate principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2010 (the "Series 2010 Bonds") for the purposes of: (i) refinancing the Refunded Bonds, and (ii) paying costs and expenses incurred in connection with the issuance and sale of the Series 2010 Bonds. The Series 2010 Bonds are expected to be repaid over a period of approximately years. At a true interest cost of total interest paid over the life of the obligations will be $ (b) The sources of repayment for the Series 2010 Bonds are the Net Revenues. Authorizing the Series 2010 Bonds will result in an average of approximately $ of Net Revenues not being available to finance other services of the City every year for approximately years. 18. Entire Agreement. This Bond Purchase Agreement when accepted by you in writing as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the City and the Underwriters (including the successors or assigns of the City or the Underwriters). No other person shall acquire or have any right hereunder or by virtue hereof. WELLS FARGO BANK, NATIONAL ASSOCIATION RBC CAPITAL MARKETS CORPORATION FIFTH THIRD SECURITIES, INC. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: WELLS FARGO BANK, NATIONAL ASSOCIATION By: Name: David R. Thornton Title: Managing Director Accepted by: CITY OF CLEARWATER, FLORIDA By: {JA569704;1 } 10 Name: Frank Hibbard Title: Mayor By: Name: William B. Horne, II Title: City Manager {JA569704;1} EXHIBIT A TERMS OF BONDS Maturity Schedule Maturity Principal Amount Interest Rate Yield Redemption of Series 2010 Bonds Series 2010 Bonds Mandatory Sinking Fund Redemption The Series 2010 Bonds maturing on December 1, [ ] will be subject to mandatory redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on December 1, [ ], and each December 1 thereafter, from amounts deposited in the Redemption Account in the Bond Service Fund established by the Ordinance, in the following years and amounts as follows: Year Amount * Maturity The Series 2010 Bonds maturing on December 1, [ ] will be subject to mandatory redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on December 1, [ ], and each December 1 thereafter, from amounts deposited in the Redemption A-1 {JA569704;1 } Account in the Bond Service Fund established by the Ordinance, in the following years and amounts as follows: Year Amount * Maturity Series 2010 Bonds Optional Redemption Provisions The Series 2010 Bonds maturing on December 1, [ ] and thereafter will be subject to optional redemption prior to their respective maturity dates beginning on December 1, [ ] at 100% of the par value thereof. A-2 {Jns697oa;I EXHIBIT B CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS SERIES 2010 DISCLOSURE STATEMENT November , 2010 Mayor and City Council City of Clearwater, Florida Clearwater, Florida Ladies and Gentlemen: In connection with the proposed issuance by the City of Clearwater, Florida (the "City"), of the above-referenced Bonds (the "Series 2010 Bonds"), Wells Fargo Bank, National Association (the "Representative"), as representative of itself, RBC Capital Markets Corporation, Fifth Third Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Underwriters") have agreed to underwrite a public offering of the Series 2010 Bonds. Arrangements for underwriting the Series 2010 Bonds will include a Bond Purchase Agreement between the City and the Underwriters. The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385(6), Florida Statutes, as amended, certain information in respect to the arrangement contemplated for the underwriting of the Series 2010 Bonds as follows: (a) The nature and estimated amount of expenses to be incurred by the Underwriters and paid by the Underwriters in connection with the purchase and offering of the Series 2010 Bonds are set forth on Schedule I attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters, with the City for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Series 2010 Bonds. (c) The amount of underwriting spread, including the management fee, expected to be realized is as follows: Series 2010 Bonds: Average Takedown Underwriters' Expenses Total Underwriting Spread Dollars Per $1,000 Bond Dollar Amount B-1 {JA56970411 } (d) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Series 2010 Bonds to any person not regularly employed or retained by the Underwriters (including any "finder," as defined in Section 218.386(1)(a), Florida Statutes, as amended), except as specifically enumerated as expenses to be incurred and paid by the Underwriters, as set forth in Schedule I attached hereto. (e) The name and address of the Underwriters are set forth below: Wells Fargo Bank, National Association 2363 Gulf-to-Bay Boulevard, Suite 200 Clearwater, Florida 33765 Attention: David Thornton. RBC Capital Markets 1002 nd Avenue South, Suite 800 St. Petersburg, Florida 33701 Fifth Third Securities, Inc. 200 E. Robinson Street, 8t" Floor Orlando, Florida 32801 Bank of America Merrill Lynch 101 E. Kennedy Blvd., 2°d Floor Tampa, Florida 33602 We understand that you do not require any further disclosure from the Underwriters, pursuant to Section 218.385(6)(g), Florida Statutes, as amended. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION RBC CAPITAL MARKETS CORPORATION FIFTH THIRD SECURITIES, INC. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: WELLS FARGO BANK, NATIONAL ASSOCIATION By: Name: David R. Thornton Title: Managing Director B-2 {JA569704;I SCHEDULEI ESTIMATED UNDERWRITERS' EXPENSES Dollar Amount Underwriters' Counsel Fee and Expenses BMA Dalnet Dalnet Charges DTC CUSIP Day Loan Out of Pocket Expenses Total Expenses B-3 {Jn569704;1} EXHIBIT C CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS SERIES 2010 CERTIFICATE OF CITY The City of Clearwater, Florida (the "City"), certifies as follows: 1. The representations, warranties, covenants and agreements of the City contained in the Bond Purchase Agreement dated November _, 2010, among the City, Wells Fargo Bank, National Association and the other Underwriters named therein (the "Bond Purchase Agreement"), with respect to the sale by the City of the above-referenced bonds (the "Series 2010 Bonds"), are true and correct in all respects on and as of the date of the Closing as if made on the date hereof. 2. The Underwriters have complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the date hereof pursuant to the Bond Purchase Agreement. All capitalized terms used herein which are not otherwise defined shall have the same meanings as in the Bond Purchase Agreement. Dated: November , 2010 CITY OF CLEARWATER, FLORIDA Bv: Name: William B. Horne, II Title: City Manager C-1 (rn569704;1) 'm = c o ? U Co, ? = c ? .c y ? s o o o ? N y? V U N oz a o -o ° ti A c ;v v 0 0 y 0 0 H r y ? o 'O c o ?a 0 h o ? o _o v ry y ? E. ° ^' a d y 4 O y ? o y ` c o ? U ? y yr? 0 v ? U ? O i e c? o- i O ? d s ? ,o y ?c c 4 i U 5 p a O h C Q st ? O G d O ? y v O g c ?, r y a='%r • o o r1 ? ? O i 4, v m ".S h Preliminary Official Statement Dated November , 2010 NEW ISSUE - FULL BOOK-ENTRY Ratings: S&P: "AA-" Moody's: "AaV Fitch: "AA-" (See "RATINGS," herein) In the opinion of Bond Counsel, assuming continuous compliance with various covenants in the Ordinance (herein defined), under existing statutes, regulations and judicial decisions, the interest on the Series 2010 Bonds will be excluded from gross income for federal income taxpurposes to the owners thereof and is not an item of taxpreference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2010 Bonds will betaken into account to determine adjusted current earnings of corporations. See 'Tax Exemption" herein.. CITY OF CLEARWATER, FLORIDA $[Bond Amount]* Water and Sewer Revenue Refunding Bonds, Series 2010 Dated: Date of Delivery Due: December 1, as shown below The Water and Sewer Revenue Refunding Bonds, Series 2010 (the "Series 2010 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. [Paying Agent], Orlando, Florida, is acting as the Paying Agent and Bond Registrar for the Series 2010 Bonds. The Series 2010 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 2010 Bonds will be payable semi-annually beginning on June 1, 2011 and on each June 1 and December 1 thereafter. Principal of, and premium, if any, on the Series 2010 Bonds will be payable at maturity or upon redemption prior to maturity. The Series 2010 Bonds are subject to optional redemption and mandatory redemption prior to maturity as described herein. The Series 2010 Bonds are being issued for the purpose of advance refunding and redeeming on December 1, 2011, all, or a portion of, of the Outstanding principal amount of the City's Water and Sewer Revenue Bonds, Series 2002 and paying the cost of issuing the Series 2010 Bonds. The Series 2010 Bonds and the interest thereon are payable solely from the Net Revenues derived from the operation of the water, sewer and reclaimed water utility system of the City (the "System'), as further described herein. The lien of the Series 2010 Bonds on the Net Revenues is on a parity with the holders of the City's Outstanding City's Water and Sewer Revenue Bonds, Series 2002 which are not refunded with the proceeds of the Series 2010 Bonds, the City's Outstanding Water and Sewer Revenue Refunding Bonds, Series 2003, the City's Outstanding Water and Sewer Revenue Bonds, Series 2006, the City's Outstanding Water and Sewer Revenue Bonds, Series 2009A, and the City's Outstanding Water and Sewer Revenue Refunding Bonds, Series 2009B (the "Parity Bonds'), as further described herein. Neither the Series 2010 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 2010 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 2010 Bonds or the interest thereon. The City shall not be obligated to pay the Series 2010 Bonds or any interest thereon except from the Net Revenues, in the manner provided in the Ordinance. AMOUNTS, INTEREST RATES, MATURITIES, YIELDS AND CUSIPS (See Inside Cover Page) This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read this entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2010 Bonds are offered when, as and if issued and accepted by the Underwriters 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. Akerman Senterfitt, Jacksonville, Florida is serving as counsel to the underwriters. Raymond James & Associates, Inc., Orlando, Florida is serving as Financial Advisor to the City. It is expected that the Series 2010 Bonds, in definitive book-entry form, will be available for delivery through DTC in New York, New York on or about November , 2010. WELLS FARGO SECURITIES RBC Capital Markets Corporation, Fifth Third Securities, Inc. BofA Merrill Lynch November , 2010 * Preliminary, subject to change. SERIES 2010 BONDS PRINCIPAL AMOUNTS, INTEREST RATES, MATURITIES, YIELDS AND CUSIPS $ Serial Bonds Maturing Maturing December I Principal December 1 Principal of the Year Amount Coupon Yield CUSIP* of the Year Amount Coupon Yield CUSIP* 2011 2018 2012 2019 2013 2020 2014 2021 2015 2022 2016 2023 2017 2024 $ % Series 2010 Term Bonds, Due December 1, 20 Price: CUSIP*: $ % Series 2010 Term Bonds, Due December 1, 20 Price: CUSIP*: *The City is not responsible for the use of CUSIP numbers referenced herein nor is any representation made by the City as to their correctness. CUSIP numbers are included herein solely for the convenience of the readers of this Official Statement. CITY OF CLEARWATER, FLORIDA ELECTED OFFICIALS MAYOR Frank Hibbard CITY COUNCIL John Doran (Vice-Mayor) George N. Cretekos Bill Jonson Paul F. Gibson APPOINTED OFFICIALS William B. Horne, II, City Manager Pamela K. Akin, Esq., City Attorney Brian J. Ravins, CGFO, Finance Director BOND COUNSEL Bryant Miller Olive P.A. Tallahassee, Florida FINANCIAL ADVISOR Raymond James & Associates, Inc. Orlando, Florida DISCLOSURE COUNSEL Nabors, Giblin & Nickerson, P.A. Tampa, Florida REGISTRAR AND PAYING AGENT U.S. Bank, National Association Orlando, Florida RATE CONSULTANT Burton & Associates St. Augustine, 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 2010 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 Underwriters. This Official Statement does not constitute an offer to sell the Series 2010 Bonds or a solicitation of an offer to buy nor shall there be any sale of the Series 2010 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 Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of the 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. The Series 2010 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 2010 Bonds in accordance with applicable provisions of the securities laws of the States, if any, in which the Series 2010 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 2010 Bonds or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ................................................................................................ 1 REFUNDING OF THE SERIES 2002 BONDS ............................................................................. 3 DESCRIPTION OF THE SERIES 2010 BONDS .......................................................................... 3 General ...................................................................................................................................... 3 Redemption of Series 2010 Bonds ............................................................................................ 4 Book-Entry Only System .......................................................................................................... 5 SECURITY FOR THE SERIES 2010 BONDS .............................................................................. 7 Series 2010 Bonds Not a Debt of the City .............................................................................. 10 Parity Bonds ............................................................................................................................ 10 DEBT SERVICE REQUIREMENTS ........................................................................................... 11 SOURCES AND USES OF FUNDS ............................................................................................ 12 THE WATER AND SEWER SYSTEM ....................................................................................... 12 Water System .......................................................................................................................... 12 Sewer System .......................................................................................................................... 15 Reclaimed Water System ................................................................ 17 Future Water and Sewer Capital Improvements ..................................................................... 18 Regulation and Permitting ...................................................................................................... 18 RATES, FEES AND CHARGES ................................................................................................. 18 Establishment of Rates, Fees and Charges; Rate Study .......................................................... 18 FINANCIAL STATEMENTS ...................................................................................................... 19 INVESTMENT POLICY OF THE CITY .................................................................................... 19 LITIGATION ................................................................................................................................ 20 RATINGS ..................................................................................................................................... 20 TAX MATTERS ........................................................................................................................... 21 VERIFICATION OF MATHEMATICAL COMPUTATIONS ................................................... 23 LEGAL OPINIONS ...................................................................................................................... 24 ENFORCEABILITY OF REMEDIES ......................................................................................... 24 FINANCIAL ADVISOR .............................................................................................................. 24 UNDERWRITING ....................................................................................................................... 25 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ............................... 25 ADVISORS AND CONSULTANTS ........................................................................................... 26 CONTINUING DISCLOSURE .................................................................................................... 26 CERTIFICATE CONCERNING OFFICIAL STATEMENT ...................................................... 27 MISCELLANEOUS ..................................................................................................................... 27 Appendices Appendix A General Information Regarding the City Appendix B Audited Financial Statements of the City for the Fiscal Year Ended September 30, 2009 Appendix C Forms of Ordinance 6915-01 and the Resolution Appendix D Form of Continuing Disclosure Certificate Appendix E Form of Bond Counsel Opinion Appendix F Water and Wastewater Revenue Sufficiency Analysis (Rate Study) Appendix G Schedule of Rates, Fees and Charges ii OFFICIAL STATEMENT CITY OF CLEARWATER, FLORIDA $[Bond Amount]* Water and Sewer Revenue Refunding Bonds, Series 2010 INTRODUCTORY STATEMENT The purpose of this Official Statement, which includes the cover page, the Summary Statement and the Appendices, is to provide information concerning the City of Clearwater, Florida (the "City") and the City's $[Bond Amount]* Water and Sewer Revenue Refunding Bonds, Series 2010 (the "Series 2010 Bonds"). The Series 2010 Bonds are being issued for the purpose of advance refunding and redeeming on December 1, 2011 all, or a portion, of the Outstanding principal amount of the City's Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds") and paying the cost of issuing the Series 2010 Bonds. The Series 2010 Bonds are payable from and secured by a lien on the Net Revenues of the City's water, wastewater and reclaimed water system (the "System"), as further described herein. The lien of the Series 2010 Bonds on the Net Revenues is on a parity with the holders of the City's Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds") not refunded with the proceeds of the Series 2010 Bonds, $2,020,000 Outstanding principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), $26,430,000 Outstanding principal amount of the City's Water and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds"), $67,715,000 Outstanding principal amount of the City's Water and Sewer Revenue Bonds, Series 2009A (the "Series 2009A Bonds") and $38,460,000 Outstanding principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2009B (the "Series 2009B Bonds"), as further described herein. The Series 2010 Bonds will be 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 of law, and (c) Ordinance No. 3674-84 enacted by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 6915-01, enacted November 15, 2001 (collectively, the "Ordinance"), and, as further supplemented by Resolution No. 10-25, adopted by the City on November 4, 2010 (collectively, the "Resolution"). Neither the Series 2010 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 2010 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 2010 Bonds or the interest thereon. The City shall not be obligated to pay the Series 2010 Bonds or any interest thereon except from the Net Revenues, in the manner provided in the Ordinance. A Reserve Account has been established for the benefit of the Series 2010 Bonds and the outstanding Parity Bonds (as herein defined). Upon issuance of the Series 2010 Bonds, the Reserve Account will be funded in an amount equal to the Reserve Account Requirement for Series 2010 Bonds and the Outstanding Parity Bonds. The City covenants in the Ordinance to fix, establish and maintain such rates, and collect such fees, rentals and other charges for the services and facilities of the System (as herein defined) and revise the same from time to time whenever necessary as will always provide Gross Revenues in each Fiscal Year sufficient to pay (i) the Cost of Operation and Maintenance of the System in such Fiscal Year, (ii) 115% of the Bond Service Requirement for such Fiscal Year on the Outstanding Series 2010 Bonds and on all Outstanding Additional Bonds and Parity Bonds, plus (iii) 100% of all reserve and other payments required to be made pursuant to the Ordinance. The City may issue Additional Bonds, payable on a parity from the Net Revenues with the Series 2010 Bonds and the Parity Bonds, for the purpose of refunding all or a portion of the Outstanding Bonds, or financing the cost of extensions, additions and improvements to the System and for the acquisition and construction of, and extensions and improvements to, sewer and/or water systems which are to be consolidated with the System and operated as a single combined utility, provided that, among other requirements, certain earnings tests relating historical Net Revenues to the Maximum Bond Service Requirement of all Bonds outstanding after the issuance of such Additional Bonds can be met. Such historical Net Revenues may be adjusted by the Consulting Engineer as provided in the Ordinance. Definitions of certain words and terms having initial capitals used herein and in the Ordinance are contained in the "FORMS OF ORDINANCE 6915-01 AND THE RESOLUTION" 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 2010 Bonds, the security for the payment of the Series 2010 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 of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2010 Bonds. 2 REFUNDING OF THE SERIES 2002 BONDS A portion of the proceeds of the Series 2010 Bonds will be deposited into an escrow account (the "Escrow Account") established with [Paying Agent], Orlando, Florida, as escrow agent (the "Escrow Agent") and invested in cash and/or direct obligations of the United States in order to provide sufficient funds on December 1, 2011, to pay and redeem all, or a portion to be determined on the date of pricing, of the Series 2002 Bonds (the "Refunded Bonds"), at the redemption price of 101% of the principal amount thereof. Upon issuance of the Series 2010 Bonds and based upon the deposit into the Escrow Fund of the cash and/or direct obligations into the Escrow Fund as described above, Bond Counsel will deliver an 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 Net Revenues created by or pursuant to the Resolution with respect to such Refunded Bonds will cease, terminate and be discharged. DESCRIPTION OF THE SERIES 2010 BONDS General The Series 2010 Bonds will be dated the date of their initial issuance and delivery. The Series 2010 Bonds will bear interest at the rates and mature on December 1 in the amounts and at the times set forth on the cover page of this Official Statement. The Series 2010 Bonds are to be issued as fully registered bonds in denominations of $5,000 or integral multiples thereof. Interest on the Series 2010 Bonds will be calculated based upon a 360 day year comprised of twelve (12) thirty (30) day months and will be payable on June 1, 2011 and semiannually thereafter on June 1 and December 1 of each year, by check or draft mailed to the registered owners, at their addresses as they appear on the registration books of the City maintained by the Bond Registrar, as of the 15th day (whether or not a business day) of the month preceding the interest payment date (the "Record Date"). Owners of $1,000,000 or more in aggregate principal amount of Series 2010 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. [Paying Agent], Orlando, Florida, is acting as Paying Agent and Bond Registrar for the Series 2010 Bonds. No provision of the Ordinance or Resolution provides for an adjustment of the interest rate borne by the Series 2010 Bonds in the event the interest on the Series 2010 Bonds should become included in gross income for federal income tax purposes. The Series 2010 Bonds will be initially issued in the form of a single fully registered Bond for each maturity of the Series 2010 Bonds. Upon initial issuance, the ownership of each such Series 2010 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 3 York, New York ("DTC"). While held in book-entry form, all payments of principal, interest and premium, if any, on the Series 2010 Bonds will be made to DTC or the DTC Nominee as the sole registered owner of the Series 2010 Bonds and payments to Beneficial Owners will be the responsibility of DTC and the DTC Participants as described below. See "Book-Entry Only System." Redemption of Series 2010 Bonds Series 2010 Bonds Mandatory Sinking Fund Redemption The Series 2010 Bonds maturing on December 1, will be subject to mandatory redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on December 1, , and each December 1 thereafter, from amounts deposited in the Redemption Account in the Bond Service Fund established by the Ordinance, in the following years and amounts as follows: Year Amount * Maturity The Series 2010 Bonds maturing on December 1, will be subject to mandatory redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on December 1, , and each December 1 thereafter, from amounts deposited in the Redemption Account in the Bond Service Fund established by the Ordinance, in the following years and amounts as follows: Year Amount * Maturity Series 2010 Bonds Optional Redemption Provisions The Series 2010 Bonds maturing on December 1, and thereafter will be subject to optional redemption prior to their respective maturity dates beginning on December 1, at 100% of the par value thereof. 4 Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK- ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE ISSUER BELIEVES TO BE RELIABLE, BUT THE ISSUER TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. DTC will act as securities depository for the Series 2010 Bonds. The Series 2010 Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered bond certificate will be issued for each maturity of the Series 2010 Bonds and will be deposited with DTC DTC, the world's largest securities depository, 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 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants (the "Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, U.S. Bank, National Association Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). DTC has Standard and Poor's highest rating: AAA. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of the Series 2010 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 2010 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2010 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from 5 the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2010 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2010 Bonds, except in the event that use of the book-entry system for the Series 2010 Bonds is discontinued. To facilitate subsequent transfers, all Series 2010 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2010 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2010 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2010 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping an account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements made among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2010 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such bonds, as the case may be, to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2010 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2010 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Series 2010 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Registrar on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Registrar or the City, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and 6 dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City and/or the Paying Agent for the Series 2010 Bonds. Disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of the Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2010 Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2010 Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the book-entry transfers through DTC (or a successor securities depository). In that event, Series 2010 Bond certificates will be printed and delivered to DTC. In the event that the book-entry only system is discontinued, the following provisions will govern the transfer and exchange of Series 2010 Bonds. The Series 2010 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 2010 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 2010 Bonds, along with the social security number or federal employer identification number of such transferee. The City and the Bond Registrar may charge the registered owners a sum sufficient to reimburse them for any expenses incurred in making any exchange or transfer after the first such exchange or transfer following the delivery of the Series 2010 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 2010 Bonds shall be delivered. Neither the City nor the Bond Registrar shall be required to register the transfer or exchange of any Series 2010 Bonds during the period commencing on the fifteenth day (whether or not a business day) of the month next preceding an interest payment date and ending on such interest payment date or, in the case of any proposed redemption of a Series 2010 Bonds, after such Series 2010 Bonds or any portion thereof has been selected for redemption. SECURITY FOR THE SERIES 2010 BONDS Net Revenues. The principal of and premium, if any, and interest on the Series 2010 Bonds are payable solely from and secured by an irrevocable first lien upon and pledge of the Net Revenues (as hereinafter defined) derived and collected by the City from the operation of the water, sewer and reclaimed water system of the City (the "System"), on a parity with the Parity Bonds. "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 2010 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 2010 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 2010 Bonds or to make any of the required debt service, reserve or other payments, and any failure to pay the Series 2010 Bonds shall not give rise to a lien upon any property of or in the City, except the Net Revenues. Rate Covenant. In the Ordinance, the City has covenanted to fix, establish and maintain such rates and collect such fees, rentals and other charges for the services and facilities of the System and revise the same from time to time whenever necessary, as will always provide Gross Revenues in each Fiscal Year sufficient to pay the Cost of Operation and Maintenance of the System in such Fiscal Year, one hundred fifteen per centum (115%) of the Bond Service Requirement becoming due in such Fiscal Year on the Outstanding Parity Bonds, on the outstanding Bonds and on all outstanding Additional Bonds, plus one hundred per centum (100%) of all reserve and other payments required to be made pursuant to this Ordinance and the Original Ordinance. Such rates, fees, rentals and other charges shall not be reduced so as to be insufficient to provide Gross Revenues for such purposes. Reserve Account. The Ordinance creates a Reserve Account in a sum equal to and sufficient to pay the Maximum Bond Service Requirement on all outstanding Bonds becoming due in any ensuing Fiscal Year. The Reserve Account will be fully funded after the issuance of the Series 2010 Bonds. No further payments will be required to be made into such Reserve Account as long as there shall remain on deposit therein a sum equal to the Maximum Bond Service Requirement on all outstanding Bonds becoming due in any ensuing Fiscal Year. Moneys in the Reserve Account shall be used only for the purpose of payment of maturing principal of or interest on the Bonds when the moneys in the Sinking Fund are insufficient therefor. Interest earnings on funds held in the Reserve Account will be transferred to the Revenue Fund. In lieu of or in substitution for all or any part of the required deposits to the Reserve Account, the City may provide for the deposit of a surety bond or insurance policy from a reputable insurer in accordance with the provisions of the Ordinance. 8 Any withdrawals from the Reserve Account will be subsequently restored from the first moneys available in the Revenue Fund after all required current payments into the Sinking Fund and into the Reserve Account, including all deficiencies for prior payments, have been made in full. Additional Bonds. Additional Bonds, payable on a parity from the Net Revenues with the Series 2010 Bonds and the Parity Bonds, may be issued for the purposes of refunding all or a portion of the outstanding Bonds or financing the cost of extensions, additions and improvements to the System and for the acquisition and construction of, and extensions, additions and improvements to, sewer and/or water systems which are to be consolidated with the System and operated as a single combined utility. Additional Bonds, other than for refunding purposes, will be issued only upon compliance with all of the conditions set forth in the Ordinance, including the following: (1) There shall have been obtained and filed with the Clerk a certificate of the Finance Director stating: (a) that the books and records of the City relative to the System have been audited by a qualified and recognized firm of independent certified public accountants; (b) based on such audited financial statement, that the amount of the adjusted Net Revenues derived for the Fiscal Year preceding the date of issuance of the proposed Additional Bonds or for any twelve (12) consecutive months during the eighteen (18) months immediately preceding the date of issuance of the Additional Bonds with respect to which such certificate is made, adjusted as herein below provided; and (c) based on such audited financial statement, that the aggregate amount of such Net Revenues, as adjusted, for the period for which such Net Revenues are being certified is equal to not less than 120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Parity Bonds and the Bonds issued under the Ordinance, if any, then Outstanding, and (ii) on the Additional Bonds with respect to which such certificate is made. (2) Upon recommendation of the Consulting Engineers, the Net Revenues certified pursuant to (b) in the previous paragraph may be adjusted by including: (a) 100% of the additional Net Revenues which in the opinion of the Consulting Engineer would have been derived by the City from rate increases adopted before the Additional Bonds are issued, if such rate increases had been implemented before the commencement of the period for which such Net Revenues are being certified, and (b) 100% of the additional Net Revenues estimated by the Consulting Engineer to be derived during the first full twelve month period after the facilities of the System are extended, enlarged, improved or added to with the proceeds of the Additional Bonds with respect to which such certificate is made. The adjustments described in (b) of this paragraph may only be made if the Net Revenues as adjusted under (a) of the prior paragraph for the period for which such Net Revenues are being certified equals at least 1.00 times the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds then outstanding; and (ii) on the Additional Bonds with respect to which such certificate is made. 9 See Appendix C, "Forms of Ordinance 6915-01 and the Resolution." See also "Parity Bonds" below under this principal caption. Series 2010 Bonds Not a Debt of the City The Series 2010 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 of the ad valorem taxing power of the City or taxation in any form of real or personal property therein for the payment of the principal of and interest on the Series 2010 Bonds or to compel the City to pay such principal and interest from any other funds of the City except the Net Revenues. The Series 2010 Bonds shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Net Revenues all in the manner provided in the Ordinance. Parity Bonds At the time of pricing of the Series 2010 Bonds, there will be Outstanding under the Ordinance, $51,105,000 of the City's Water and Sewer Revenue Bonds, Series 2002 (the "Series 2002 Bonds"), $2,020,000 of the City's Water and Sewer Revenue Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), $26,430,000 of the City's Water and Sewer Revenue Bonds, Series 2006 (the "Series 2006 Bonds"), $67,715,000 of the City's Water and Sewer Revenue Bonds, Series 2009A (the "Series 2009A Bonds") and $38,460,000 of the City's Water and Sewer Revenue Refunding Bonds, Series 2009B (the "Series 2009B Bonds"). All, or a portion, of the Series 2002 Bonds will be refunded from a portion of the proceeds of the Series 2010 Bonds on December 1, 2011. The portion, if any, of the Series 2002 Bonds not refunded by the Series 2010 Bonds, and the Series 2003 Bonds, Series 2006 Bonds, Series 2009A Bonds and Series 2009B Bonds rank on a parity with the Series 2010 Bonds as to the lien and pledge of the Net Revenues and hereinafter referred to collectively as the "Parity Bonds"). It is anticipated that the City will continue to issue Parity Bonds from time to time to finance additions, expansions and improvements to the System and to refund Outstanding Bonds. 10 DEBT SERVICE REQUIREMENTS Fiscal Year Outstanding Endine Bonds* 2011 12,807,020.65 2012 11,655,370.02 2013 10,338,402.52 2014 10,312,740.02 2015 10,258,400.02 2016 10,259,285.02 2017 10,258,520.02 2018 10,260,270.02 2019 10,263,945.02 2020 6,509,532.52 2021 6,505,913.77 2022 6,504,116.89 2023 6,494,591.26 2024 6,495,409.39 2025 6,484,653.14 2026 6,482,278.14 2027 6,475,021.89 2028 6,467,771.89 2029 6,460,271.89 2030 6,447,425.01 2031 6,438,990.64 2032 6,433,018.77 2033 6,414,337.51 2034 10,203,006.25 2035 10,201,881.25 2036 10,204,625.00 2037 10,205,056.25 2038 10,202,125.00 2039 10,204,518.75 2040 10.200.925.00 Totals $258,449,423.52 Aggregate Series 2010 Bonds Debt Service *Outstanding Bonds are as of Preliminary Official Statement dated date. Outstanding Bonds exclude debt service on Series 2002 Bonds due on or after on December 1, 2012 which are anticipated to be refunded by the Series 2010 Bonds. 11 SOURCES AND USES OF FUNDS Series 2010 Bonds SOURCES Principal Amount of Series 2010 Bonds $[Bond Amount] Original Issue Discount/Premium Total Sources USES Deposit to Escrow Fund for the Series 2002 Bonds Costs of Issuance including Underwriters' Discount _ Total Uses $ * Preliminary, subject to change. THE WATER AND SEWER SYSTEM Water System The water supply for the area served by the System is currently derived from existing City wellfields and by the purchase of water from Pinellas County. The City has a bulk water purchase agreement with Pinellas County that supplies up to 15 million gallons per day of the service area's water needs on an as needed basis. Supply under the contract commenced on October 1, 2005 and will terminate on September 30, 2035. The average purchase over the past five (5) years has been 71.3% of the maximum amount. The City currently has nineteen (19) Floridan Aquifer wells throughout the service area permitted for 6.25 million gallons per day, each equipped with automatic control systems. The City water system and the Pinellas County water system are interconnected at seven (7) locations. Under the City's contract with Pinellas County, Pinellas County agrees to supply the City with sufficient water for the designated service area. The contract rate in Fiscal Year 2009 was $3.1844 per thousand gallons. The rate is set by the Board of County Commissioners and is based on a prorated share of revenue cost requirements of the 12 Pinellas County water system, including production and transmission costs required for the supply of water to the Pinellas County water users. Pinellas County obtains approximately 70 million gallons per day or 100% of its water supply from Tampa Bay Water, a Regional Water Supply Authority ("Tampa Bay Water") (the successor to the West Coast Regional Water Supply Authority). It is entitled under contract to obtain 100% of its water needs per day from Tampa Bay Water. The City currently acquires approximately 8.0 to 10 million gallons per day from Pinellas County. The City's water distribution system consists of approximately 575 miles of water mains ranging up to 20 inches in diameter. The distribution system contains numerous interconnections between piping, making larger size mains unnecessary for existing flow conditions. City water storage within the distribution system consists of a series of ground- level water storage pumping systems and elevated tank water storage. The City currently has four 5-million gallon ground-level water storage reservoirs and two 1-million gallon elevated water storage tanks. The City's elevated storage tanks are all steel vessels which provide immediate response to pressure and flow demands in the local areas. Raw water within the City of Clearwater has historically been of adequate quality to meet minimum regulatory requirements and has received treatment only in the form of disinfection via chlorination with a limited amount of aeration for sulfide control. Additional treatment has been added in the form of corrosion control (polyphosphate). This type of treatment to date has been compatible with the quality of bulk water purchased from the County to date. Continual use of the City's wells has led to increasing mineralization of the City supply, but these levels have been within the guidelines for public health and safety. The following chart shows the average daily water flow on an annualized basis over the past five years: Source and Volume of Water Pumped (in million gallons per day, averaged over the Fiscal Year) FY City Wells County Total 2005 3.550 10.630 14.180 2006 4.093 9.999 14.092 2007 3.570 9.090 12.660 2008 3.075 9.080 12.155 2009 3.710 7.781 11.491 The decline in water average daily flows is due to conservation and the reduction in potable water for irrigation by providing alternative water supply of reclaimed water for irrigation. The table below illustrates the number of water customers over the past five years. 13 Historical Numbers of Water Customers (all figures are as of September of the year indicated) Year Water Customers 2005 40,178 2006 40,467 2007 40,407 2008 40,131 2009 39,935 The ten largest water customers in 2009 based upon revenues produced are shown in the table below: Ten Largest Water Customers Fiscal Year Ended September 30, 2009* Revenues % of Total Name of User Produced Revenues 1. City of Clearwater $675,957 2.78325% 2. Church of Scientology FSO Inc. 549,364 2.26200% 3. Morton Plant Hospital 322,664 1.32857% 4. Pinellas County Schools 256,604 1.05656% 5. IMT-LB Central FL Portfolio LLC 214,498 0.88319% 6. Clearwater Housing Authority 204,673 0.84274% 7. Sandpearl Resort LLC 141,515 0.58269% 8. Pinnacle Management Corp. 138,644 0.57087% 9. Bre/Clearwater Owner LLC 127,048 0.52312% 10. Brenntag Mid-South Inc 125,989 0.51876% Tot al $2,756,956 11.35175% * For the Fiscal Year Ended 9/30/09 the Top Ten Customers were reviewed and revised, to combine accounts for affiliates of the same entity, ex: all City of Clearwater accounts, and, accordingly may have resulted in a significant change in ranking and annual usage/revenues from previous years. 14 Sewer System The City's sanitary sewage collection system is composed of approximately 368 miles of gravity mains and 77 miles of force mains, utilizing 79 lift stations. Three treatment plants with a combined design capacity of 28.5 mgd (million gallons per day) are on line and operational. These three plants are the Marshall Street Facility, the Northeast Facility and the East Facility. The Marshall Street Facility was constructed in the 1950's, the East Facility was constructed in the 1960's and the Northeast Facility was constructed in the 1970's. These plants have been expanded several times to their current design capacities of ten million, five million and thirteen and one-half million gallons per day respectively. All three plants utilize Advanced Wastewater Treatment processes. The current systems include nitrogen and phosphorous removal, anaerobic digestion and sludge thickening, and provide highly treated reclaimed water for private, commercial and municipal use. The Marshall Street and Northeast plants also provide for sludge dewatering. The Northeast Biosolids Management Facility was constructed in 1994. It is designed to process thirty-three dry tons per day of sludge that meets EPA and Florida Department of Environmental Protection sludge criteria. The City has entered into an Interlocal Agreement with the City of Safety Harbor to share operations and maintenance costs of the Northeast Wastewater Facility. Pursuant to the Agreement, the City bills Safety Harbor on the basis of usage calculated by (i) operating cost charge, which is for the total operations of the plant with all operating costs being combined then allocated based on a formula of average use; and (ii) capacity cost charge, which is a reimbursement incurred to replace the facility. The Interlocal Agreement expires and is renewable in 2018. The following chart shows the average daily sewage flow on an annualized basis over the past five years: Average Sewage Flow Annual Avg. Daily Flow Fiscal Year In MGD 2005 14.7 2006 13.8 2007 13.6 2008 14.0 2009 13.5 15 The table below illustrates the number of sewer customers over the past five years. Historical Number of Sewer Customers (All figures are as of September 30 of the year indicated) Sewer Year Customers 2005 33,305 2006 33,279 2007 33,255 2008 33,146 2009 33,084 The ten largest sewer customers in 2009 based upon sewer revenues produced are shown in the table below: Ten Largest Sewer Customers Fiscal Year Ended September 30, 2009* Revenues % of Total Name of User Produced Revenues 1. Church of Scientology $531,960 2.02726% 2. City of Clearwater 360,713 1.37466% 3. Morton Plant Hospital 358,990 1.36808% 4. Pinellas County Schools 331,332 1.26268% 5. IMT-LB Central FL Portfolio LLC 215,031 0.81947% 6. Clearwater Housing Authority 191,182 0.72858% 7. Bre/Clearwater Owner LLC 162,551 0.61947% 8. Pinnacle Management Corp. 159,370 0.60735% 9. Sandpearl Resort LLC 149,381 0.56928% 10. Publix 137,062 0.52233% Total $2,597,572 9.89916% * For the Fiscal Year Ended 9/30/09 the Top Ten Customers were reviewed and revised, to combine accounts for affiliates of the same entity, ex: all City of Clearwater accounts, and, accordingly may have resulted in a significant change in ranking and annual usage/revenues from previous years. 16 Reclaimed Water System The City began its reclaimed water system in 1988. It operates under a master reuse permit with allowable distribution of 14 MGD for beneficial use. The reclaimed water system uses treated effluent to produce high quality reclaimed water at all 3 wastewater treatment plants. The storage capacity is currently 10 MGD per day, with 5 MGD at each of the Northeast and Marshall Street Facilities. Additional planned storage capacity of 5 MGD will be attained upon acceptance of the Skycrest Reclaimed Water Projects, which were completed in September, 2010, but have not yet been accepted. The reclaimed water system has 30 miles of completed pipeline distribution, which supplies city customers with 4.4 MGD. In addition, pursuant to an Interlocal Agreement, the reclaimed water system supplies Pinellas County with a minimum of 3 MGD. The operation of the reclaimed water system has enabled the City to meet various permitting requirements relating to its wastewater treatment facilities, has reduced the number of separate water meters for irrigation and has significantly reduced the use of potable water for irrigation purposes. Set forth below is a table showing the average daily flows of the reclaimed water system for the Fiscal Years indicated: Fiscal Average Daily Year Flow (MGD) 2005 2.4 2006 2.9 2007 3.4 2008 3.5 2009 4.4* * Increase from 2008 to 2009 due to increased purchases from Pinellas County averaging 1 mgd. 17 Future Water and Sewer Capital Improvements The Rate Study (hereinafter defined and as more particularly described under the caption "RATES, FEES AND CHARGES - Establishment of Rates, Fees and Charges; Rate Study") forecasts a capital improvement program for the System over the ten year period from 2011 through 2020 in the amount of approximately $[ ]. Of this amount, it is anticipated that the City will incur long-term revenue bond financing of $[ ) from the future issuance of revenue bonds; however, none of the proceeds of the Series 2010 Bonds will be used for such capital improvements. The balance of the costs of the capital improvement program are expected to be paid from impact fees, grant funding, renewal and replacement and from unexpended amounts on deposit in the Revenue Fund after payment of debt service on Bonds. Regulation and Permitting The City's water and wastewater systems are regulated by the United States Environmental Protection Agency and by the State of Florida's Department of Environmental Protection ("FDEP"). The Water supply permitting is regulated under the Southwest Florida Water Management District, which grants 10-year water permits. The current water permit allows withdrawal of 6.25 MGD and expires in December, 2010. The expansion of the reverse osmosis plant will require that the City request an additional 1.5 MGD under the permit. Wastewater treatment plants operate under 5-year FDEP permits that expire in October, 2011 for the Marshall Street Facility and in March, 2012 at the East Facility and the Northeast Facility. The City has commenced the process of applying for renewal of the permit for the reverse osmosis plant. Renewals for both water and wastewater permits will be made in the normal course of business, and the City does not anticipate any difficulties or delays in the receipt of such permit renewals. RATES, FEES AND CHARGES Establishment of Rates, Fees and Charges; Rate Study The City establishes by ordinance rates, fees and charges for use of the System, which are adopted in response to periodic rate studies conducted by Burton and Associates, the City's utility rate consultant. The most recent "FY 2009 Water & Wastewater Revenue Sufficiency Analysis," dated June 5, 2009 (the "Rate Study") forms the basis for establishing future rates fees and charges for System services based upon a planning period of FY 2009 through FY 2019. The Rate Study recommended a 7% increase per year in FY 2010 and FY 2011 followed by 6% annual rate adjustments in FY 2012 and FY 2013 with 4.50% increases each year thereafter. The FY 2010 rate adjustment became effective on October 1, 2009. With rate increases approved in 2008 through FY 2013, additional increases were not requested as a result of this Study. A request for future increases is 18 planned at the conclusion of a 2011 rate study in anticipation of the issuance of additional revenue bonds in 2012. The Rate Study is included herein as Appendix F and a schedule of rates, fees and charges is attached hereto as Appendix G. Historical Debt Service Coverage By Historical Net Revenues Fiscal Years Ended September 30 2005 2006 2007 2008 2009 Net Revenues Available for Debt Service (1) $14,135,278 $14,650,540 $15,706,029 $15,689,703 $20,647,352 Annual Debt Service 9,801,569 9,730,888 10,702,542 10,896,558 10,967,983 Coverage 1.44 1.51 1.47 1.44 1.88 (1) Revenues used in calculation include interest earnings and exclude extraordinary gain and contributed revenues. Expenses used exclude depreciation (and similar non-cash expenses), amortization of bond discount and issue costs, bond interest, sinking fund and reserve requirements and extraordinary loss. For a "Forecast of Net Revenues and Debt Service Coverage" for the Fiscal Years 2010 though and including 2019, see "Appendix A - Schedule 8" of the Rate Study. FINANCIAL STATEMENTS The combined financial statements and Water and Sewer enterprise fund financial statements of the City at September 30, 2009 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, 2009. 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. The objectives of the investment policy, listed in order in order of importance, are: Safety of principal 2. Provision of sufficient liquidity 19 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 five 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 Authorized Investments, as described in the Ordinance. LITIGATION In the opinion of the City Attorney, no legal proceedings are pending or threatened that materially affect the City's ability to perform its obligations to the holders of the Series 2010 Bonds or that materially affect the Pledged Revenues. In the opinion of the City Attorney, there is no litigation or controversy of any nature now pending or, to the City's knowledge, threatened to restrain or enjoin the issuance, sale, execution or delivery of the Series 2010 Bonds or in any way contesting the validity of the Series 2010 Bonds or any proceedings of the City taken with respect to the authorization, sale or issuance of the Series 2010 Bonds or the pledge or application of any moneys provided for the payment of the Series 2010 Bonds. RATINGS Standard & Poor's, a division of The McGraw-Hill Companies ("S&P"), Moody's Investors Service ("Moody's") and Fitch Ratings ("Fitch") have assigned ratings of "AA-", "Aa3" and "AA-" respectively, to the Series 2010 Bonds. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the respective rating agency. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. 20 Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2010 Bonds. TAX MATTERS General The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2010 Bonds in order that interest on the Series 2010 Bonds will be and remain excluded from gross income for purposes of federal income taxation. Non-compliance may cause interest on the Series 2010 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 2010 Bonds, regardless of the date on which such non- compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2010 Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 2010 Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing statutes, regulations and judicial decisions, interest on the Series 2010 Bonds is excluded from gross income for purposes of federal income taxation, interest on the Series 2010 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2010 Bonds will be taken into account to determine adjusted current earnings of corporations such that interest on the Series 2010 Bonds may be subject to the alternative minimum tax when any 2010 Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted current earnings" will include interest on the Series 2010 Bonds. Except as described above, Bond Counsel expresses no opinion regarding other federal tax consequences resulting from ownership of, receipt or accrual of interest on, or disposition of the Series 2010 Bonds. Prospective purchasers of the Series 2010 Bonds should be aware that (i) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Series 2010 Bonds; (ii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest on the Series 2010 Bonds; (iii) interest on the Series 2010 Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (iv) passive investments income, 21 including interest on the Series 2010 Bonds, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporations is passive investment income; and (v) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Series 2010 Bonds. Other provisions of the Code may give rise to adverse federal income tax consequences to particular Bondholders. Holders of the Series 2010 Bonds should consult their own tax advisors with respect to the tax consequences to them of owning the Series 2010 Bonds. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2010 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 Series 2010 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alterations of federal tax consequences may have affected the market value of obligations similar to the Series 2010 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2010 Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2010 Bonds. Tax Treatment of Original Issue Discount Bond Counsel is further of the opinion that the difference between the principal amount of the Series 2010 Bonds maturing on December 1 in the years through and including (collectively the "Discount Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of Underwriters or wholesalers) at which price a substantial amount of such Discount Bonds of the same maturity was sold constitutes original issue discount which is excludable from gross income for federal income tax purposes to the same extent as interest on the Series 2010 Bonds. Further, such original issue discount accrues actuarially on a constant interest rate basis over the term of each Discount Bond and the basis of each Discount Bond acquired at such initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. The accrual of original issue discount may be taken into account as an increase in the amount of tax-exempt income for purposes of determining various other tax consequences of owning the Discount Bonds, 22 even though there will not be a corresponding cash payment. Owners of the Discount Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Discount Bonds. Tax Treatment of Bond Premium The difference between the principal amount of the Series 2010 Bonds maturing on December 1, in the years through and including (collectively, the "Premium Bonds") and the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of such Premium Bonds of the same maturity was sold constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of each Premium Bond which term ends on the earlier of the maturity or optional call date for such Premium Bond which results in the lowest yield on such Bond to the purchaser thereof. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by Wells Fargo Bank, U.S. Bank, National Association Association on behalf of the City relating to (a) computation of forecasted receipts of principal and interest on the Federal Securities, as defined in the Ordinance, 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 [Verification Agent] Such computations were based solely upon assumptions and information supplied by Wells Fargo Bank, U.S. Bank, National Association Association on behalf of the City. [Verification Agent] has restricted its procedures to examining the arithmetical accuracy of certain computations and has not made any study or evaluation of the 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. 23 LEGAL OPINIONS Legal matters incident to the authorization, issuance and sale of the Series 2010 Bonds are subject to the approval of Bryant Miller Olive P.A., Tallahassee, Florida, Bond Counsel, whose approving opinion will be printed on the Series 2010 Bonds and will be in substantially the form set forth in APPENDIX E. Certain other legal matters will be passed upon for the City by Pamela K. Akin, Esquire, City Attorney and by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Disclosure Counsel to the City. Akerman Senterfitt, Jacksonville, Florida is serving as counsel to the underwriters. ENFORCEABILITY OF REMEDIES The remedies available to the Holders of the Series 2010 Bonds upon an Event of Default under the Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the Ordinance may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2010 Bonds will be qualified, as to the enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. The remedies granted to the Bondholders under the Ordinance do not include the power to accelerate the principal of the Series 2010 Bonds. FINANCIAL ADVISOR Raymond James & Associates, Inc. has served as independent financial advisor to the City with respect to the issuance and sale of the Series 2010 Bonds. The Financial Advisor assisted in the preparation of this Official Statement and in other matters relating to the planning, structuring and issuance of the Series 2010 Bonds. Raymond James & Associates, Inc. will not engage in any underwriting activities with regard to the issuance and sale of the Series 2010 Bonds. Raymond James & Associates, Inc. is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement and is not obligated to review or ensure compliance with the undertaking by the City to provide continuing secondary market disclosure. Raymond James & Associates, Inc. may assist the City in bidding certain investments on behalf of the City, which may result in additional fees being paid to Raymond James & Associates, Inc. 24 UNDERWRITING The Series 2010 Bonds are being purchased by Wells Fargo Securities, on behalf of itself and as representative of the co-managers, RBC Capital Markets Corporation, Fifth Third Securities, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Underwriters"), from the City at an aggregate purchase price of $ (par less underwriter's discount of $ , plus accrued interest on the Series 2010 Bonds). The Underwriters are obligated to purchase all the Series 2010 Bonds if any are purchased. Following the initial public offering, the public offering prices may be changed from time to time by the Underwriters. Wells Fargo Securities is the trade name for certain capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, U.S. Bank, National Association Association. Wells Fargo Bank, U.S. Bank, National Association Association ("WFBNA"), the lead underwriter of the Series 2010 Bonds, has entered into an agreement (the "Distribution Agreement") with Wells Fargo Advisors, LLC ("WFA") for the retail distribution of certain municipal securities offerings, including the Series 2010 Bonds. Pursuant to the Distribution Agreement, WFBNA will share a portion of its underwriting compensation with respect to the Series 2010 Bonds with WFA. WFBNA and WFA are both subsidiaries of Wells Fargo & Company. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder require that the City make a full and fair disclosure of any bonds or other debt obligations of such entity that have been in default as to principal or interest at any time after December 31, 1975, as provided by rule of the Florida Department of Banking and Finance (the "Department"). Pursuant to Rule 69W-400.003, Florida Administrative Code, the Department has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City believes in good faith that such information would not be considered material by a reasonable investor. The City is not and has not been in default on any bond issued since December 31, 1975 which would be considered material by a reasonable investor. The City has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The City does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2010 Bonds because the City would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the City would have been pledged or used to pay such securities or the interest thereon. 25 ADVISORS AND CONSULTANTS The City has retained advisors and consultants in connection with the issuance of the Series 2010 Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Series 2010 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 Raymond James & Associates, Inc., Orlando, Florida, as Financial Advisor. The fees of the Financial Advisor will be paid from proceeds of the Series 2010 Bonds and such payment is contingent upon the issuance of the Series 2010 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 2010 Bonds, and such payment is contingent upon the issuance of the Series 2010 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 2010 Bonds, and such payment is contingent upon the issuance of the Series 2010 Bonds. CONTINUING DISCLOSURE The City has covenanted for the benefit of the holders and beneficial owners of the Series 2010 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, 2011 (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if deemed by the City to be material. The Annual Report will be filed by the City to the Municipal Securities Rulemaking Board ("MSRB") through its Electronic Municipal Market Access system ("EMMA"). The notices of material events will be filed by the City with the MSRB. 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. 26 CERTIFICATE CONCERNING OFFICIAL STATEMENT Concurrently with the delivery of the Series 2010 Bonds, the City will furnish its certificate, executed by the Mayor or Vice-Mayor of the City, to the effect that, to the best of his or her knowledge, this Official Statement, as of its date and as of the date of delivery of the Series 2010 Bonds, does not contain any untrue statements of material fact and does not omit to state a material fact,which should be included herein for the purpose for which this Official Statement is to be used, or which is necessary to make the statements contained herein, in the light of the circumstances under which they were made, not misleading. MISCELLANEOUS The references, excerpts and summaries of all documents, resolutions and/or ordinances referred to herein do not purport to be complete statements of the provisions of such documents, resolutions and/or ordinances and reference is directed to all such documents, resolutions and/or ordinances for full and complete statements of all matters of fact relating to the Series 2010 Bonds, the security for and the repayment of the Series 2010 Bonds and the rights and obligations of the Holders thereof. Copies of such documents, resolutions and ordinances may be obtained from the City Clerk's Office. So far as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither this Official Statement nor any statement which may have been orally or in writing is to be construed as a contract with the Holders of the Series 2010 Bonds. The execution and delivery of this Official Statement by the Mayor of the City has been duly authorized by the City Commission. CITY OF CLEARWATER, FLORIDA Frank Hibbard, Mayor William B. Horne, II, City Manager 27 APPENDIX A GENERAL INFORMATION REGARDING THE CITY GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA Location The City of Clearwater (the "City"), the county seat of Pinellas County (the fifth most populous county in Florida), is geographically located in the middle of the west coast of Florida on the Gulf of Mexico. It is situated approximately 20 miles west of Tampa and 20 miles north of St. Petersburg. Standing on the highest coastal elevation of the State, the City limits comprise approximately 25.5 square miles of land and 8.6 square miles of waterways and lakes. Clearwater Beach, a corporate part of the City, is a beach community connected to the mainland by Memorial Causeway, a four-lane, toll-free drive stretching almost two miles across the Intracoastal Waterway. Business on Clearwater Beach is mainly tourist oriented, with hotels, motels and gift shops. Many fine homes, apartments and condominiums offer pleasant, semi-tropical island accommodations to permanent residents and winter and summer visitors. History The area now known as Clearwater was first explored in 1528 by Panfile de Narvaez, a Spanish explorer who encountered a large tribe of Indians, which his army drove out. The Indians recaptured their territory and held it until the Seminole Wars of 1835-42. The Indians who inhabited this area are said to have called it "Pocotopaug," meaning "clear water," for the many springs of clear, fresh water that bubbled along the shore and even below the waterline at low tide. Settlers began moving into the area around the time of the Seminole Wars. After the wars ended, the territory was opened by the Federal government for homesteading under the Armed Occupation Act. The first land title was granted in 1842. The early settlement, named "Clear Water Harbor," was incorporated in 1897. "Clear Water" later became one word and "Harbor" was dropped in 1906 when Pinellas County was created by an act of the State Legislature. In May 1911, Clearwater became the County Seat and Clearwater was chartered as a municipality on May 27, 1915. Government and Administration Clearwater has a council-city manager form of government. Four council members and a mayor are elected at large to serve overlapping three-year terms. They appoint the city manager and the city attorney. All other administrative and professional positions are appointed by the city manager in accordance with the City's Civil Service System. A-1 The City has approximately 1,700 employees, covered by the City's Civil Service law relating to recruitment, promotion, evaluation and discipline based on merit principles. Four employee unions represent the City's civil labor force: two units of the Fraternal Order of Police; two of the International Association of Fire Fighters; and one from the Communications Workers of America. Transportation Pinellas County and Clearwater are served by three major causeways and bridges over Tampa Bay, by U.S. 19 and I-275 to the north and south, by I-4 and U.S. 60 to the east. State Roads 590 and 686 also afford access to the City. Tampa International Airport, located approximately seventeen miles from downtown Clearwater, provides air travel access with approximately 260 national and international flights daily. Limousine and taxi service to and from the airport is available from Clearwater and throughout Pinellas County. St. Petersburg/Clearwater International Airport, approximately ten miles from downtown Clearwater, offers regularly scheduled passenger service and charter and special group flights, on a more limited basis to both domestic and foreign destinations, particularly to Canada, Mexico, and Central and South America. The Executive Airpark, which is slightly over a mile from the downtown business section, provides service and maintenance for private plane owners. The airport has one 3,000 foot hard-surface runway and facilities for visiting and locally based planes. The Port of Tampa (22 miles to the east) is the closest deep water port. The port is serviced by a variety of steamship agents and operators. The United States Coast Guard maintains an air station at the St. Petersburg/Clearwater International Airport, and a search and sea rescue cutter station on Clearwater Harbor opposite Sand Key. Gulf Coast Motor Lines provides service daily between Clearwater, St. Petersburg and Tampa and makes connections with Greyhound and Trailways Bus Lines in Tampa. Scenic tours are available via Gray Line out of Clearwater and St. Petersburg, and both Gray Line and Gulf Coast have buses for charter. Pinellas Suncoast Transit System maintains 54 routes in 19 municipalities in Pinellas County. Utilities, Public Service and Community Facilities The City owns and operates its own water and wastewater collection systems. Water is obtained from 17 deep wells owned and operated by the City (approximately 20- 25%) and from wholesale purchases from the Pinellas County Water System (approximately 75-80%). Total daily average is approximately 13 million gallons per day. As of September 30, 2009, there were 39,935 water customers. The wastewater A-2 collection program provides for the transmission of wastewater through the City's underground sewer mains, collectors and interceptor lines and for the maintenance, repair and replacement of 363 miles of sanitary sewer lines. The Department of Public Works maintains 305.1 miles of paved streets, 10.4 miles of unpaved streets, 147 miles of stormwater mains, 567 miles of water mains and 753 miles of gas mains. Electric power is provided by Progress Energy and telephone service is provided by Verizon of Florida, Inc. Bright House Networks and Knology provide cable television service under franchises with the City. Local editions of the daily St. Petersburg Times and The Tampa Tribune, plus weekly newspapers from adjacent Dunedin, Largo, Seminole and Clearwater Beach are widely distributed. The Clearwater Public Library System consists of a main library and four branches which are spread evenly throughout the community for easy access. The City offers 42 acres of public beach front, 1,134 acres of parks, 32 playgrounds, numerous athletic courts and fields, seven swimming pools, an 8,500 seat baseball and softball stadium, three golf courses, seven recreational centers, 32 special recreation facilities, 7.4 miles of recreational paths, boat ramps and a 209 slip yacht basin and marina. The Philadelphia Phillies conduct spring training at the municipal baseball stadium and have a long-term contract for farm club training on Clearwater's specially constructed facilities during the Winter Instructional League Program. Clearwater is the home of the Clearwater Bombers, a national amateur fast pitch softball team. Tourism The State of Florida reported 80.9 million tourists came to Florida during the year 2009 compared to 84.2 million tourists in 2008. Domestic visitors to the State in 2008 are estimated to constitute 76.1% of total visitors, followed by 5.2% from overseas countries and 2.9% from Canada. According to information provided by the St. Petersburg/Clearwater Area Convention and Visitor's Bureau, the St. Petersburg/Clearwater area attracted 5,193,980 visitors in 2009 compared to 4,991,410 in 2008, a decrease of 3.9%. Tourism is the region's number one employer with Pinellas County residents earning a combined annual payroll of $2.9 billion annually. The total impact of tourism to Pinellas County is over $6.9 billion annually. Pinellas County is ranked seventh of the top ten destinations in Florida. Clearwater's Fun 'N Sun Festival each spring attracts thousands of visitors. Education The Pinellas County School District operates a total of 126 schools comprising elementary through high school, vocational schools (including Area Vocational Centers), alternative schools, Charter Schools and Department of Juvenile Justice Schools within A-3 the County. The Pinellas County School District is the 23rd largest in the nation and the seventh largest in the State with 14,346 full-time and part-time employees. During the 2009-2010 school year enrollment reached 103,860. Private schools and academies are also located within or near the City limits. Five four-year colleges and universities serve the County: Florida Institute of Technology, Eckerd College, the University of South Florida, with campuses in Tampa and St. Petersburg, St. Petersburg College and Stetson University College of Law. Junior/community colleges in the County include Remington College and Clearwater Christian College. Pinellas County Vo-Tech School and St. Petersburg Vo-Tech School provide the County's students with data processing, electronic technology, robotics/computer-aided technology and other vocational training. Industry, Commerce and Labor Light, clean industry is encouraged in Clearwater. In 1957, the City of Clearwater developed a 100 acre industrial park adjacent to the Clearwater Airpark (Executive Airport) and to the CSX Transportation Company. There is also a privately owned, 35 acre industrial park. Large industries located near Clearwater include Honeywell, General Electric, UNISYS, Concept and Hercules Defense Electronics Systems, Inc. During the 1999 fiscal year IMRglobal Corp. ("IMR") occupied its new world headquarters in downtown Clearwater. Pension Plan The Employees' Pension Plan is self-administered by the City. City contributions for fiscal year ending 2009 were $8,451,471 to the Employees' Plan in accordance with actuarially determined funding requirements. Effective with the fiscal year ended September 30, 2007, the Firefighter's Relief and Pension Plan, with no remaining active members (only retirees), was fully funded per the requirements of the governing Ordinance. The City may elect to contribute should future valuations show an actuarial need for such. In addition, supplemental pensions exist for certified Police Officers and Firefighters, funded solely from excise taxes on certain insurance premiums covering property in Clearwater, collected by the State and remitted to the City. Both plans require benefits to be adjusted to equal funds assets provided by the defined contributions. [Remainder of page intentionally left blank] A-4 Demographic Information Last Ten Fiscal Years (a) Year Population (b) Per Capita Personal Income (c) Median Age (d) School Enrollment (e) Unemployment Rate (%) 2000 108,787 $28,813 44.2 15,978 2.7% 2001 109,231 29,649 43.0 16,293 2.7 2002 109,719 31,784 43.0 17,047 3.9 2003 110,055 32,585 43.9 16,295 5.4 2004 110,325 33,361 44.0 16,323 4.7 2005 110,831 33,658 44.2 15,964 3.4 2006 110,602 36,055 44.2 15,696 2.9 2007 110,469 38,364 44.5 15,500 3.8 2008 110,251 40,654 44.5 15,482 5.5 2009 109,907 42,546 45.0 14,975 10.1 (a) Source is the University of Florida, Bureau of Economic and Business Research, April 1, 2009 estimate for current year and Florida Statistical Abstract for prior years. (b) Data is from per capital personal income for Pinellas County for two years prior. Source is the University of Florida, Bureau of Economic and Business Research, Florida Statistical Abstract. (c) Data is for Pinellas County for prior year. Source is the University of Florida, Bureau of Economic and Business Research, Florida Statistical Abstract. (d) Source of data is the Pinellas County School District. (e) Source for fiscal years 2000 through 2008 is the University of Florida, Bureau of Economic and Business Research, Florida Statistical Abstract, as of December 31 of the indicated fiscal year. Source for fiscal year 2009 is the US Department of Labor, Bureau of Labor Statistics, Tampa Metro Area, for year ended September 2009. Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending September 30, 2009. NOTE: Data is the latest published annual data available for an unspecified point in each year, not specifically September 30. A-5 Building Permit Activity Pinellas County, Florida 2001-2010 (Valuations in 000's) Calendar Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(2) Number of Units Single Family 2,006 1,627 1,669 2,247 2,775 1,812 620 418 107 179 Multi- Family 2,399 701 1,874 1,390 1,096 390 479 234 381 176 (1) Totals may not add due to rounding. (2) As of June 2010. Source: Florida Research and Economic Database. Total Valuations(i) 594,239 367,113 455,617 573,057 747,009 471,088 307,441 136,999 67,413 52,475 A-6 City of Clearwater, Florida Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Assessed Value(a) v Assessed Less: Value as a Government Homestead Less: Total Estimated Percentage and Assessment Tax Taxable Total Actual of Fiscal Residential Commercial Industrial Institutional Personal Other Cap Exempt Assessed Direct Taxable Actual Year Property Property Property Property Property Property Differential(b) Property Value Ratio(`) Value Value 2000 $3,704,386 $1,242,762 $88,827 $905,924 $660,193 $55,258 $ 142,958 $1,608,913 $4,903,479 5.5032 $ 5,768,799 85.0% 2001 4,038,672 1,319,861 94,341 942,290 662,240 50,706 247,856 1,651,467 5,208,787 5.5032 6,127,985 85.0 2002 4,612,494 1,397,947 99,579 995,983 699,503 53,481 435,066 1,735,495 5,688,426 5.5032 6,692,266 85.0 2003 5,290,897 1,450,805 109,852 1,018,670 629,591 56,319 722,765 1,728,291 6,105,078 5.7530 7,182,445 85.0 2004 6,043,611 1,537,612 116,822 1,083,186 616,883 63,746 966,830 1,801,765 6,693,265 5.7530 7,874,429 85.0 2005 6,923,863 1,714,684 131,518 1,201,463 604,747 62,339 1,246,779 1,923,108 7,468,727 5.7530 8.786,738 85.0 2006 8,325,134 1,902,627 153,035 1,329,219 605,102 70,665 1,690,208 2,045,343 8,650,231 5.7530 10,176,742 85.0 2007 10,967,910 2,294,492 178,987 1,499,434 637,308 67,478 2,767,035 2,222,329 10,656,245 5.2088 12,536,759 85.0 2008 11,359,752 2,385,943 1887,557 1,500,633 640,387 72,913 2,691,298 2,307,132 11,148,577 4.6777 13,116,182 85.0 2009 9,965,589 2,353,563 192,940 1,586,882 645,460 89,686 1,721,773 2,951,357 10,160,990 4.7254 11,954,106 85.0 (a) Properties are assessed at approximately 85% of market value to reflect cost of sales , personal property included in market value, etc. (b) Florida Statutes , 193.155, prov ides for an annual cap on as sessment inc reases for " Homestead properties" (properties qualifying for Homes tead exemption). The cap is the lower of 3% of the assessed value of the property or the percentage change in the Consumer Price Index for All Urban Consumers. (c) Rate is per $1,0 00 of assessed value. Property Tax Levies and Collections Last Ten Fiscal Years 00 Collected within the Fiscal Year of the Lev y Total Collections to Date Collections in Fiscal Taxes Levied for Percentage Subsequent Percentage Year the Fiscal Year Amount of Levy Years Amount of Levy 2000 $26,998,318 $26,876,461 99.55% $ 77,716 $26,954,177 99.84% 2001 28,664,112 28,567,429 99.66 130,632 28,698,061 100.12 2002 31,303,900 31,204,025 99.68 91,548 31,295,573 99.97 2003 35,153,114 35,038,555 99.67 94,574 35,133,129 99.94 2004 38,430,718 38,277,689 99.60 124,999 38,402,688 99.93 2005 43,001,524 42,905,336 99.78 118,601 43,023,937 100.05 2006 49,719,539 49,598,439 99.76 48,222 49,646,661 99.85 2007 55,514,622 55,423,836 99.84 131,471 55,555,307 100.07 2008 52,134,689 51,926,581 99.60 173,529 52,100,110 99.93 2009 48,093,238 47,964,265 99.73 - 47,964,265 99.73 Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending September 30, 2009. Note 1: Discounts are allowed for early payment: 4% for November, 3% for December, 2% for January, and 1% for February. No discount is allowed for payment in March. Penalties are assessed beginning in April. Note 2: The County Tax Collector does not allocate delinquent taxes collected by the original tax year levied. Consequently, all collections of delinquent taxes are applied to the immediately prior tax year and as a result, the total collections-to-date percentage of the tax levy-to-date may be g reater than 100% of the tax levy for a given year. a Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $1,000 of assessed value) County Fiscal Downtown School Transit Year City Development (a) Board County District Emergency Medical Services Other 2000 5.5032 1.0000 8.6660 5.8540 0.6501 0.6470 1.6572 2001 5.5032 1.0000 8.4330 6.0040 0.6501 0.7470 1.6562 2002 5.5032 1.0000 8.4870 6.1410 0.6501 0.6600 1.6562 2003 5.7530 1.0000 8.4490 6.1410 0.6319 0.6600 1.6562 2004 5.7530 1.0000 8.2430 6.1410 0.6319 0.6600 1.6562 2005 5.7530 1.0000 8.1220 6.1410 0.6377 0.6600 1.6557 2006 5.7530 1.0000 8.3900 6.1410 0.6377 0.6600 1.6555 2007 5.2088 1.0000 8.2100 5.4700 0.6074 0.6300 1.6378 2008 4.6777 0.9651 7.7310 4.8730 0.5601 0.5832 1.5121 2009 4.7254 0.9651 8.0610 4.8108 0.5601 0.5832 1.5551(6) (a) A separate taxing district established by referendum which affects only d owntown properties. (b) "Other" includes Pinellas County Planning Council (0.0170); Juvenile Welfare Board (0.7915 ); SW Florida Water Management District (0.3866); Pinellas Anclote River Basin (0.3600). Source: City of Clearwater, Florida, Co mprehensive Annual Financial Report for period ending September 30, 200 9; Pinellas County Prop erty Appraiser. City of Clearwater, Florida Principal Real Property Taxpayers* Current Year and Nine Years Ago axpayer REAL PROPERTY axable Assessed Value 2009 ank Percentage of Total City Taxable Assessed Value axable Assessed Value 2000 ank Percentage of Total City Taxable Assessed Value Bellweather Prop. LP Ltd. $127,897,800 1 1.32% $83,872,700 1 1.93% Centro NP Clearwater Mall 41,125,600 2 0.51 22,578,600 4 0.52% Taylor, John S., III 47,960,000 3 0.49 Sandpearl Resort LLC 42,196,200 4 0.43 Sand Key Association Ltd. 40,000,000 5 0.41 19,304,400 8 0.44 Grand Reserve Property Owner 40,000,000 6 0.41 25,002,300 3 0.57 W R I Countryside Centre LLC 33,750,000 7 0.35 Weingarten Nostat Inc. 32,965,000 8 0.34 ZOM Bayside Arbors Ltd. 29,421,800 9 0.30 19,499,100 7 0.45 Duff, Andrew R. - Trustee 27,250,000 10 0.28 Excel Realty Trust Inc. 0.00 29,223,200 2 0.67 Clearwater Land Co. 0.00 21,473,800 5 0.49 Walmart Stores, Inc. 0.00 17,635,600 10 0.41 Branch Sunset Assoc. LTD 0.00 20,742,300 6 0.48 Nortwood Plaza 0.00 18,245,200 9 0.42 Total $470,566,400 4.85% $277,577,200 6.38% Source: City of Clearwater, Fl orida, Compreh ensive Annual Financial Report for period ending September 30, 2009; Pinellas County Property Appraiser. A-10 City of Clearwater, Florida Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (amounts in thousands, except per capita) General Bonded Debt Outstanding Public Percentage Service of Actual General Tax Sales Tax Taxable Fiscal Obligation Revenue Revenue Value of Year Bonds Bonds Bonds Total Property Per Capita 2000 $ - $10,427 $ - $10,427 0.18% $ 96 2001 - 10,179 46,445 56,624 0.92 518 2002 - 11,360 46,445 57,805 0.86 527 2003 - 11,005 41,345 52,350 0.73 476 2004 - 10,645 36,075 46,720 0.59 423 2005 - 10,270 30,615 40,885 0.47 369 2006 - 9,885 24,955 34,840 0.34 315 2007 - 9,565 19,080 28,645 0.23 259 2008 - 13,000 12,975 25,975 0.20 236 2009 - 12,545 6,620 19,165 0.16 174 Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 2009 A-11 City of Clearwater, Florida Direct and Overlapping Government Activities Debt As of September 30, 2009 (amounts in thousands) Governmental Unit Debt repaid with property taxes Other debt Pinellas County Capital Improvement Revenue Bonds Pinellas County Capital Leases Pinellas County School District State Bonds (b) Pinellas County School District Capital Leases Subtotal, overlapping debt City direct debt Total direct and overlapping debt Estimated Estimated Share of Debt Percentage Overlapping Outstanding Applicable (a) Debt n/a $ 22,600 13.9% 3,141 96 13.9 13 32,360 13.9 4,497 20,351 13.9 2,828 10,479 40,135 $50,614 Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 2009 Note: Assessed value data used to estimate applicable percentages provided by Pinellas County Property Appraiser. Debt outstanding data is provided by each respective governmental unit. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Clearwater. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. (a) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value. (b) The School District State Bonds are secured by a pledge of the District's portion of the State- assessed motor vehicle license tax. The State's full faith and credit is also pledged for the bonds. A-12 City of Clearwater, Florida Legal Debt Margin Information Last Ten Fiscal Years (amounts in thousands) Total Net Debt Total Net Applicable to Debt Limit as Fiscal Debt Applicable Legal Percentage of Year Limit to Limit Debt Margin Debt Limit 2000 $ 870,699 $ 121,644 $ 749,055 13.97% 2001 931,415 167,938 763,477 18.03 2002 1,026,014 254,873 771,141 24.84 2003 1,116,032 243,518 872,514 21.82 2004 1,236,804 249,370 987,434 20.16 2005 1,395,730 236,154 1,159,576 16.92 2006 1,631,179 247,706 1,383,473 15.19 2007 2,028,832 230,639 1,798,193 11.37 2008 2,128,847 224,224 1,904,623 10.53 2009 1,942,045 271,594 1,670,451 13.98 Legal Debt Margin Calculation for Fiscal Year 2009: Assessed valuation of non-exempt real estate $9,710,226 Debt Limit (20% of assessed valuation per City Charter) 1,942,045 Debt applicable to limit: Revenue bonds $289,705 Capital leases 9,890 Less: Amount set aside for repayment of bonded debt (28,001) 271.594 Legal debt margin $1,670,451 Note: Per City Charter, the City's indebtedness, to include revenue, refunding, and improvement bonds, shall not exceed 20 percent of the current assessed valuation of all real property located in the City. Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for the period ending September 30, 2009. A-13 APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 APPENDIX C FORMS OF ORDINANCE 6915-01 AND THE RESOLUTION ORDINANCE NO. 6915-01 AN ORDINANCE PROVIDING FOR WATER AND SEWER REVENUEBONDS, SERIES [TO BEDETERMINED] OF THECITY OF CLEARWATER, FLORIDA, TO BEISSUED IN ONE OR MORE SERIES OVER ONE OR MORE YEARS; TO FINANCE OR REFINANCE THE COST OF DESIGN, ACQUISITION, CONSTRUCTION ORRECONSTRUCTION OF IMPROVEMENTS TO THE CITY'S WATER AND SEWER SYSTEM; PROVIDING FOR THE PAYMENT OF THE BONDS FROM THE NET REVENUES OF THE CITY'S WATERAND SEWER SYSTEM AND CERTAIN OTHERMONEYS PLEDGED THEREFOR; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; AMENDINGORDINANCENO.3674-84, ORDINANCENO.5355- 93 AND ORDINANCE NO. 6311-98 WHICH AUTHORIZED THE PARITY BONDS TO ALLOW DELIVERY OF ADDITIONAL BONDS PARITY CERTIFICATE BY FINANCIAL SERVICES ADMINISTRATOR; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PRO- VIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. AUTHORITY FOR THIS ORDINANCE. This Ordinance is enacted pursuant to Chapter 166, Part II, Florida Statutes, and other applicable provisions of law and pursuant to Section 16R of Ordinance No. 3674-84, as amended and supplemented (the "Original Ordinance") and is supplemental to the Original Ordinance. SECTION 2. DEFINITIONS. The following terms shall have the following meanings herein, unless the text otherwise expressly requires. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principalamount of such Capital Appreciation Bond (the princi- pal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Payment Date next preceding the date of computation or the date of computation if an Interest Payment Date, such interest to accrue at a rate not 1 exceeding the legal rate, compounded semi-annually, plus, with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an Interest Payment Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Payment Date and the Accreted Value as of the immediately succeeding Interest Payment Date, calculated based on the assumption that Accreted Value accrues during any semi-annual period in equal daily amounts on the basis of a 360 day year consisting of 12 months of 30 days each. "Act" shall mean Chapter 166, Part II, Florida Statutes, and other applicable provisions of law. "AdditionalBonds"shall meanBonds issued incompliance withthe terms, conditions and limitations contained herein and in Section 16R of the Original Ordinance, which (i) shall have a lien on the Pledged Revenues equal to that of the Bonds, (ii) shall be payable from the Pledged Revenues on a parity with the Bonds, and (iii) rank equally in all other respects with the Bonds. "Amortization Installments" with respect to any Term Bonds of a Series, shall mean an amount or amounts so designated which is or are established for the Term Bonds of such Series by subsequent resolution of the Issuer and established with respect to such Term Bonds, provided that (i) each such installment shall be deemed to be due on such interest or principal maturity date of each applicable year as is fixed by subsequent resolution of the Issuer and shall be a multiple of $5,000 principal amount (or $5,000 Maturity Amount, in the case of Capital Appreciation Term Bonds), and (ii) the aggregate of such installments for such series shall equal the aggregate principal amount (or Maturity Amount, in the case of Capital Appreciation Term Bonds) of Term Bonds of such Series authenticated and delivered on original issuance. "Authorized Investments" shall mean, with respect to a Series of Bonds, any of the following if and to the extent the same are at the time legal for investment of municipal funds: (1) Bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including any of the federal agencies and federally sponsored entities set forth in clause (3) hereinafter to the extent guaranteed by the United States of America.. In the event these securities are used for defeasance, they shall be non-callable and non-prepayable; (2) Obligations of any of the following federal agencies or federally sponsored entities which obligations represent the full faith and credit (guaranteed obligations) of the United States of America, in the event these securities are used for defeasance, they shall be non-callable and non-prepayable, (including but not limited to) the following: a. Export-Import Bank; b. Farm Credit System Financial Assistance Corporation; 2 C. Rural Economic Community Development Administration (formerly the Farmers Home Administration); d. General Services Administration; e. U.S. Maritime Administration; E Small Business Administration; g. Government National Mortgage Association (GNMA); h. U.S. Department of Housing & Urban Development (PHA's); i. Federal Housing Administration; and j. Federal Financing Bank (3) Direct obligations of any of the following federal agencies or federally sponsored entities which are not fully guaranteed by the full faith and credit ofthe United States ofAmerica, in the event these securities are used for defeasance, they shall be non-callable and non-prepayable: a. Federal National Mortgage Association (FNMA); b. Federal Home Loan Mortgage Corporation (FHLMC); C. Resolution Funding Corporation (REFCORP); d. Student Loan Marketing Association (SLMA); e. Federal Home Loan Bank Systems (FHLB); and f. Obligations of other Government Sponsored Agencies (approved by the Insurer). The following obligations may be used as Permitted Investments for all purposes other than defeasance investments in refunding escrow accounts. (4) Commercial paper which is rated at the time of purchase in the highest classification (without regard to qualifier), "A-1" by S&P and "P- I" by Moody's and which matures not more than 270 days after the date of purchase. (5) Investment agreements the provider of which is rated in one of the two highest rating categories, without regard to qualifiers, by two Rating Agencies under which the provider agrees to periodically deliver, on a delivery versus payment basis, such securities as are described in clauses (1-4) above. (6) Investment agreements the provider of which is rated in one of the two highest rating categories, without regard to qualifiers, by two Rating Agencies and which are continuously and fully secured by such securities as are described in clauses (1-3) above, which securities shall have a market value at all times at least equal to 102% of the principal amount invested under the investment agreement (marked to market at least weekly). 3 (7) The pooled investment program ofthe State of Florida administered by the State Board of Administration, known as the Local Government Surplus Funds Trust Fund, established pursuant to Chapter 218, Part IV, Florida Statutes, as amended. (8) Other forms of investments (including repurchase agreements) approved in writing by the Bond Insurer with notice to Standard & Pooes. With respect to any Series of Bonds issued hereunder, such additional investments as are approved by subsequent resolution of the Issuer adopted prior to the issuance of such Series of Bonds. "Bond Insurance Policy" shall mean the municipal bond new issue insurance policy issued by a Bond Insurer that guarantees payment of principal of and interest on the Bonds or any Additional Parity Bonds. "Bond Insurer" shall mean the provider of a Bond Insurance Policy for a Series of Bonds so designated in a supplemental resolution of the Issuer. "Bondholder" shall mean a registered owner of a Bond as shown on the registration books of the Registrar. "Bond Service Requirement" for any Fiscal Year, as applied to the Bonds of any series, shall mean the sum of: (1) the amount required to pay the interest becoming due on the Bonds of such series duringthe FiscalYear, except to the extent that such interest shall have been provided by payments into the Sinking Fund out of bond proceeds for a specific period of time or by payments of investment income into the Sinking Fund from the Bond Service Account or any subaccounts therein. Whenever such income is applied in calculating a Bond Service Requirement for any purpose, such income shall also be excluded in the computation of Gross Revenues for such purpose. (2) the amount required to pay the principal of Serial Bonds of such series maturing in such Fiscal Year. (3) the Amortization Installments for Term Bonds of such series for such Fiscal Year. (4) in the event the Issuer has purchased or entered into an agreement to purchase Federal Securities or Authorized Investments from moneys in the Bond Service Account, then the income received or to be received on such Federal Securities or Authorized Investments from the date of acquisition thereofto the date of maturity thereof, unless otherwise designated for other purposes, shall be taken into consideration in calculating the payments which will be required to be made into 4 the Sinking Fund and the Bond Service Account therein. Whenever such income is applied in calculating a Bond Service Requirement for any purpose, such income shall also be excluded in the computation of Gross Revenues for such purpose. "Bonds" shall mean the Parity Bonds, Series 2001 Bonds, and any Additional Bonds permitted to be issued hereunder from time to time in accordance with the provisions hereof. "Capital Appreciation Bonds" shall mean Bonds the interest on which is payable only at maturity or redemption, as determined by subsequent resolution. "Capital Appreciation Term Bonds" shall mean Capital Appreciation Bonds of a series all of which shall be stated to mature on one date, which shall be subject to retirement by operation of the Bond Amortization Account, and the interest on which is payable only at maturity or redemption. "City Manager" shall mean the City Manager of the Issuer. "Clerk" shall mean the City Clerk of the Issuer. "Consulting Engineers" shall mean such qualified and recognized consulting engineers, having a favorable repute for skill and experience in the construction and operation of such facilities as the System, at the time retained by the Issuer to perform the acts and carry out the duties as herein provided for Consulting Engineers. "Cost of Operation and Maintenance" of the System shall mean the current expenses, paid or accrued, of operation, maintenance and repair of the System as calculated in accordance with sound accounting practice, but shall not include any reserves for renewals and replacements, for extraordinary repairs or any allowance for depreciation or amortization. "County" shall mean Pinellas County, Florida, a political subdivision of the State. "Federal Securities" shall mean only direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America. "Finance Director" shall mean the Financial Services Administrator of the Issuer or her designee. "Fiscal Year" shall mean the period commencing on October I of each year and ending on the succeeding September 30, or such other period as is at the time prescribed by law. "Gross Revenues" shall mean all income or earnings, including any income from the investment of funds as herein provided, derived by the Issuer from the operation of the System. 5 "Increased Capacity Requirements" means any increased demand upon or usage of the capital facilities of the System resulting from additional connections thereto, or from substantial changes to or in the use of properties connected thereto. "Issuer" or the "City" shall mean the City of Clearwater, Florida. "Maturity Amount" means the amount payable upon the stated maturity of a Capital Appreciation Bond equal to the original principal amount thereof plus all accrued interest thereon from the date of issue to the date of maturity. "Maximum Bond Service Requirement" shall mean, as of any particular date of calculation, the greatest amount of aggregate Bond Service Requirement for the then current or any future Fiscal Year. "Mayor-Commissioner" shall mean the Mayor-Commissioner or the Vice Mayor of the City Commission of the Issuer, or such other person as may be duly authorized by the Mayor-Commissioner to act on his or her behalf. "Net Revenues" of the System shall mean the Gross Revenues after deduction of the Cost of Operation and Maintenance. "Original Ordinance" shall mean Ordinance No. 3674-84, as amended and supplemented, of the Issuer, authorizing the Parity Bonds. "Parity Bonds" shall mean the Issuer's outstanding Water and Sewer Refunding Revenue Bonds, Series 1993 and Water and Sewer Refunding Revenue Bonds, Series 1998. "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to a supplemental resolution and its successors or assigns, and any other Person which may at any time be substituted in its place pursuant to a supplemental resolution. "Payment Date" shall mean, with respect to payment to the Bondholders of principal or interest on the Bonds, or with respect to the mandatory amortization of Term Bonds, the date upon which payment of such principal, interest or Amortization Installment is required to be made to the Paying Agent. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Revenues" shall mean the Net Revenues. "Project Costs" shall mean all costs authorized to be paid from the Construction Fund pursuant to Section 17 hereof to the extent permitted under the laws of the State. It is intended that this definition be 6 broadly construed to encompass all costs, expenses and liabilities ofthe Issuer related to the Project which on the date of this Ordinance or in the future shall be permitted to be funded with the proceeds of any Series of Bonds pursuant to the laws of the State. "Projects" shall meanthe design, acquisition, constructionorreconstructionofcapitalimprovements to the System undertaken by the City from time to time, all as may be designated by subsequent resolution of the Issuer adopted with respect to any Series of Bonds. "Put Bonds" shall mean the Tenn Bonds so designated by resolution or ordinance of the Issuer at or prior to the time the Bonds of any series are sold. "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to supplemental resolution and its successors and assigns, and any other Person which may at any time be substituted in its place pursuant to supplemental resolution. 'Reserve Requirement" shall be such amount as determined by subsequent Resolution ofthe Issuer relating to a specific Series of Bonds adopted prior to the issuance of such Bonds, which may not exceed the lesser of (i) the Maximum Bond Service Requirement, (ii) 125% of the average annual Bond Service Requirement or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds from gross income for Federal income tax purposes. "Serial Bonds" shall mean any Bonds for the payment of the principal of which, at the maturity thereof, no Amortization Installments are required to be made prior to the stated date of maturity of such Serial Bonds. "Series" or "Series of Bonds" or "Bonds of a Series" shall mean all Bonds designated as being of the same Series issued and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter delivered in lieu thereof or in substitution therefor pursuant to this Ordinance. "System" shall mean the complete combined and consolidated water system and sanitary sewer system ofthe Issuer now owned by the Issuer, or hereafter constructed or acquired by the Issuer, together with all lands or interests therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible, now or hereafter owned or used in connection therewith, and including any undivided or partial ownership interests therein. "Term Bonds" shall mean the Bonds of a series all of which shall be stated to mature on one date and which shall be subject to retirement by operation of the Bond Amortization Account. "2001 Bonds" shall mean the Series of Bonds initially issued under this Ordinance and designated as Series 2001 Bonds. 7 "2001 Project" shall mean the Project or Projects authorized to be financed with the proceeds of the Series 2001 Bonds as identified by subsequent resolution of the Issuer adopted prior to the issuance of the Series 2001 Bonds, consisting of design, acquisition, construction or reconstruction of capital improvements to the System undertaken by the City from time to time, a portion of the cost of which are to be paid from the proceeds of the Series 2001 Bonds SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: A. The Issuer now owns, operates and maintains the System and is empowered to maintain, operate, improve and extend suchsystemand regulate and fixreasonable rates and charges for the services furnished thereby. B. The Issuer derives Gross Revenues from rates, fees and charges made and collected for the services and facilities of the System supplying water and sanitary sewerage services and the Gross Revenues are not pledged or encumbered in any manner, except for payment of the Parity Bonds. C. Any Series of Bonds and the project to be funded with the proceeds ofsuch Series ofBonds, shall be issued and such projects shall be undertaken upon approval by subsequent resolution ofthe Issuer as provided by law. The proceeds of any Series of Bonds shall be applied as provided in a supplemental ordinance or resolution. D. Section 16R of the Original Ordinance provides for the issuance of Additional Bonds under the terms, limitations and conditions provided therein. E. The Issuer has complied, or will comply prior to the delivery of the Bonds, with all the terns, conditions and restrictions contained in Section 16R of the Original Ordinance. The Issuer is therefore legally entitled to issue the Bonds as Additional Bonds within the authorization contained in the Original Ordinance and the covenants in the Original Ordinance shall apply to the Bonds. F. The Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Pledged Revenues and in all other respects, with the Parity Bonds. G. The estimated Pledged Revenues will be sufficient to pay all of the principal of and interest on the Bonds, as the same become due, and to make all required sinking fund, reserve and other payments required under this Ordinance and the Original Ordinance. H. The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be made solely from the Pledged Revenues as herein provided. The Issuer shall never be required to levy ad valorem taxes on any property therein to pay the principal of and interest on the Bonds or to make any of the required sinking fund, reserve or other payments, and any failure to pay the Bonds shall not give rise to a lien upon any property of or in the Issuer, except the Pledged Revenues. I. The total indebtedness ofthe Issuer, within the meaning ofthe Issuer's charter, does not exceed twenty per centum (20%) of the current assessed valuation of all real property located in the Issuer, and will not exceed such amount after issuance of the Bonds. SECTION 4. AUTHORIZATION OF SERIES 2001 BONDS. There is hereby authorized the issuance ofthe initial Series of Bonds hereunder to be designated the Series 2001 Bonds, in a principal amount of not to exceed $62,000,000, subject to such terms and conditions as set forth herein and in subsequent Resolutions of the Issuer adopted prior to the issuance of the 2001 Bonds. The proceeds of which shall be used to pay the costs ofcapital improvements to the System, the costs of issuing the 2001 Bonds, including any municipal bond insurance, and to fund a debt service reserve fund. SECTION 5. ORDINANCE TO CONSTITUTE CONTRACT. In consideration of the acceptance ofthe Bonds by the Bondholders from time to time, this Ordinance shall be deemed to be and shall constitute a contract betweenthe Issuer and such Bondholders. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal Bondholders of any and all of such Bonds, all of which shall be of equal rank and without preference, priority or distinction of any ofthe Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF BONDS. Subject and pursuant to the provisions hereof and as shall be described in subsequent resolutions ofthe Issuer to be adopted prior to the issuance of any Series of Bonds, obligations ofthe Issuer to be known as "Water and Sewer [Refunding] Revenue Bonds, Series [To Be Determined]" are authorized to be issued in one or more series (including Additional Bonds) from time to time. The aggregate principal amount of the Bonds which may be executed and delivered under this Ordinance is not limited except as is or may hereafter be provided in Section 17T hereof or as limited by the Act, by law or Section 16R of the Original Ordinance. SECTION 7. DESCRIPTION OF BONDS. The Bonds shall be issued in fully registered form; may be Capital Appreciation Bonds, Capital Appreciation Term Bonds, Variable Rate Bonds, Serial Bonds or Term Bonds; shall be dated; shall be numbered consecutively from one upward in order of maturity preceded by the letter 'R'; shall be in the denomination of $5,000 each, or integral multiples thereof for the Serial Bonds and in $5,000 Maturity Amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a supplemental resolution prior to the delivery of a Series of Bonds; shall have such Paying Agent and Registrar; shall bear interest at such rate or rates not exceeding the maximum rate allowed by State law, the actual rate or rates to be approved by the governing body of the Issuer prior to or upon the sale of the Bonds; such interest to be payable at such times as are fixed by supplemental resolution of the Issuer and shall mature annually on such date in such years and in such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of any series of Bonds; and may be issued with variable, adjustable, convertible or other rates with original issue discounts and/or original issue premium; all as the Issuer shall provide herein or hereafter by supplemental resolution. 9 Each Series of Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Series of Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value of such Bonds. The principal of and the interest redemption premium, if any, on the Bonds shall be payable in any coin or currency ofthe United States of America which on the respective dates ofpayment thereof is legal tender for the payment of public and private debts. The interest on any Bonds (other than Capital Appreciation Bonds) shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Holder thereof, by check or draft mailed to such registered Holder at his address as it appears on such registration books or by wire transfer to Holders of $1,000,000 or more in principal amount of the Bonds. Payment of the principal of all Bonds and the Accreted Value with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Bonds as the same shall become due and payable. Notwithstanding any other provisions ofthis section, the Issuer may, at its option, prior to the date of issuance ofany Series of Bonds, elect to use an immobilization system or pure book-entry system with respect to issuance of such Series of Bonds, provided adequate records will be kept with respect to the ownership of such Series of Bonds issued in book-entry form or the beneficial ownership of bonds issued in the name of a nominee. As long as any Bonds are outstanding in book-entry form the provisions of this Ordinance inconsistent with such system of book-entry registration shall not be applicable to such Bonds. The details of any alternative system of issuance, as described in this paragraph, shall be set forth in a resolution of the Issuer duly adopted at or prior to the sale of such Series of Bonds. SECTION 8. EXECUTION OF BONDS. The Bonds shall be executed in the name of the Issuer by the Mayor-Commissioner and City Manager and attested by the City Clerk, and approved as to form, sufficiency and correctness by the City Attorney, either manually or with his or her facsimile signature, and the official seal of the Issuer or a facsimile thereof shall be affixed thereto or reproduced thereon. The facsimile signature of such officers may be imprinted or reproduced on the Bonds. The Certificate of Authentication of the Bond Registrar shall appear on the Bonds, and no bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless such certificate shall have been duly executed on such Bond. The authorized signature for the Bond Registrar shall be either manual or facsimile; provided, however, that at least one of the signatures appearing on the Bonds shall at all times be a manual signature. In case any officer whose signature shall appear on any Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such 10 delivery. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time ofthe executionof such Bonds shall hold the proper office with the Issuer, although at the date of enactment of this Ordinance such person may not have held such office or may not have been so authorized. SECTION 9. AUTHENTICATION OF BONDS. Only such of the Bonds as shall have endorsed thereona certificate ofauthenticationsubstantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Ordinance. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. The Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Bonds that may be issued hereunder at any one time. SECTION 10. NEGOTIABILITY. Subject to the provisions hereofrespecting registrationand transfer, the Bonds shall be and shall have all the qualities and incidents of negotiable instruments under the laws of the State of Florida, and each successive holder, in accepting any of the Bonds, shall be conclusively deemed to have agreed that the Bonds shall be and have all of such qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities ofthe State of Florida. SECTION 11. REGISTRATION, EXCHANGE AND TRANSFER. There shall be a Bond Registrar for the Bonds which may be the Issuer or a designated bank or trust company located within or without the State of f lorida. The Bond Registrar shall maintain the registration books of the Issuer and be responsible for the transfer and exchange of the Bonds. The Issuer shall, prior to the proposed date of delivery ofthe Bonds, by resolution designate the Bond Registrar and Paying Agent. The Bond Registrar shall maintain the books for the registration of the transfer and exchange of the Bonds in compliance with the Florida Registered Public Obligations Act and the system of registration as established by the Issuer pursuant thereto. Bonds may be transferred uponthe registrationbooks, upondelivery to the Registrar, together with written instructions as to the details of the transfer of such Bonds, along with the social security number or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer identification numbers of the settlor and beneficiaries of the trust, the date of the trust and the name of the trustee. No transfer of any Bond shall be effective until entered on the registration books maintained by the Bond Registrar. Upon surrender for transfer or exchange of any Bond, the Issuer shall execute and the Bond Registrar shall authenticate and deliver in the name ofthe registered owner or the transferee or transferees, as the case may be, a new fully registered Bond or Bonds of authorized denominations ofthe same maturity and interest rate for the aggregate principal amount which the registered owner is entitled to receive at the earliest practicable time in accordance with the provisions of this Ordinance. The Issuer or the Bond II Registrar may charge the owner of such Bond for every such transfer or exchange an amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or other governmental charge required to be paid with respect to such transfer, and may require that such charge be paid before any such new Bond shall be delivered. All Bonds presented for transfer, exchange, redemption or payment (if so required by the Bond Registrar), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the registered holder or by his duly authorized attorney in fact or legal representative. All Bonds delivered upon transfer or exchange shall bear interest from the preceding interest payment date so that neither gain nor loss in interest shall result from the transfer or exchange. New Bonds delivered upon any transfer or exchange shall be valid obligations of the Issuer, evidencing the same debt as the Bond surrendered, shall be secured by this Ordinance and shall be entitled to all of the security and the benefits hereof to the same extent as the Bonds surrendered. The Issuer and the Bond Registrar may treat the registered owner of any Bond as the absolute owner thereof for all purposes, whether or not such Bonds shall be overdue, and shall not be bound by any notice to the contrary. Notwithstanding the foregoing provisions of this section, the Issuer reserves the right, on or prior to the delivery of the Bonds to amend or modify the foregoing provisions relating to the registration ofthe Bonds by resolution or ordinance in order to comply with all applicable laws, rules, and regulations of the United States and/or the State of Florida relating thereto. In addition, pursuant to a resolution adopted prior to the issuance of a Series of Bonds, the Issuer may establish a book-entry-only system of registration for such Series Bonds, the provisions of which shall be deemed to modify any inconsistent provisions of this Ordinance. SECTION 12. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion issue and deliver a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the holder furnishing the Issuer proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer may prescribe and paying such expenses as the Issuer may incur. All Bonds so surrendered shall be canceled by the Registrar for the Bonds. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bonds be at 12 any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on the source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder. SECTION 13. PROVISIONS FOR REDEMPTION. Each Series of Bonds shall be redeemable as provided by subsequent resolution of the Issuer applicable to each such Series of Bonds. Bonds in denominations greater than an authorized denomination (or authorized Maturity Amount in the case of Capital Appreciation Bonds) shall be deemed to be an equivalent number of Bonds in the denomination of an authorized denomination or Maturity Amount. If a Bond is of a denomination or Maturity Amount larger than an authorized denomination or MaturityAmount, a portion of such Bond may be redeemed, in the amount of an authorized denominationor MaturityAmount or integralmultiples thereof. Notice of such redemption, identifying the Bonds or portions thereof called for redemption (i) shall be filed with the paying agents and any Registrar; and (ii) shall be mailed by the Registrar, first-class mail, postage prepaid, to all registered owners ofthe Bonds to be redeemed not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to give such notice by mailing to any owner of Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds. Notice having been mailed and filed in the manner and under the conditions hereinabove provided, the Bonds or portions ofBonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption of such Bonds or portions of Bonds on such date. On the date so designated for redemption, notice having been mailed and filed and moneys for payment ofthe redemption price being held in separate accounts in trust for the holders of the Bonds or portions thereof to be redeemed, all as provided in this Ordinance, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Ordinance, and the holders or Registered Owners of such Bonds or portions ofBonds, shall have no rights in respect thereof, except the right to receive payment of the redemption price thereof. Upon surrender ofany Bond for redemption in part only, the Issuer shall issue and deliver to the registered owner thereof, the costs of which shall be paid by the registered owner, a new Bond or Bonds of authorized denominations or Maturity Amounts in aggregate principal amount equal to the unredeemed portion surrendered. In addition to the foregoing notice, further notice may be given by the Issuer as set out below (provided such additional notice is not required as a condition to redeeming Bonds), but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. 13 (1) Each further notice ofredemptiongivenhereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds as originally issued; (iii) the rate of interest borne by each Bond being redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Bonds being redeemed. (2) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities deposi- tories then in the business of holding substantial amounts of obligations of types similar to the type of which the Bonds consist (such depositories now being Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities Depository Trust Company of San Francisco, California, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminates notices of redemption of obligations such as the Bonds. (3) Each such further notice shall be published one time in the Bond Buver ofNew York, New York or, if such publication is impractical or unlikely to reach a substantial number of the Holders ofthe Bonds, in some other financial newspaper or journal which regularly carries notices of redemption of obligations similar to the Bonds, such publication to be made at least 30 days prior to the date fixed for redemption. SECTION 14. FORM OF BONDS. The text of the Bonds shall be in substantially the form attached hereto as Exhibit B, with such omissions, insertions and variations as may be necessary and desirable and authorized and permitted by this Ordinance or by any subsequent ordinance or resolution adopted prior to the issuance thereof, or as may be necessary if the Bonds or a potion thereof are issued as Capital Appreciation Bonds, Capital Appreciation Term Bonds, Variable Rate Bonds or as may be necessary to comply with applicable laws, rules and regulations of the United States and of the State in effect upon the issuance thereof. The text of any Series of Bonds, other than the Bonds shall be as determined by supplemental ordinance or resolution of the Issuer. SECTION 15. BONDS NOT DEBT OF ISSUER. The Bonds shall not be or constitute general indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitation, but shall be payable solely from and secured by a prior lien upon and pledge of the Pledged Revenues herein provided. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real property therein to pay the Bonds or the interest thereon or be entitled to payment of such principal and interest from any other funds of the Issuer except from the Pledged Revenues in the manner provided herein. SECTION 16. PLEDGED REVENUES. Until payment has been provided for as herein permitted, the payment ofthe principal of and interest on the Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Pledged Revenues prior and superior to all other liens or 14 encumbrances on such Pledged Revenues and the Issuer does hereby irrevocably pledge such Pledged Revenues to the payment of the principal of and interest on the Bonds, the reserves therefor, and for all other required payments. The Pledged Revenues shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. All funds and accounts created pursuant hereto shall be held by the Finance Director (or such other officer of the Issuer as shall be approved by the City Commission) as trust funds for payment of the Bonds. SECTION 17. COVENANTS OF THE ISSUER. Until all principal of and interest on the Bonds shall have been paid or provided for as herein permitted, the Issuer covenants with the Bondholders as follows: A. REVENUE FUND. The entire Gross Revenues shall upon receipt thereof be deposited in the Revenue Fund created and established by the Original Ordinance. Such Revenue Fund shall constitute a trust fund for the purposes herein provided and shall be kept separate and distinct from all other funds of the Issuer and used only for the purposes and in the manner herein provided. B. CONSTRUCTION FUND. The Construction Fund to be held by the Issuer and to the credit of which deposits shall be made as required by Section 17 hereof is hereby created. Within such fund there shall be maintained separate accounts for each Series of Bonds and furthermore be maintained separate accounts for capitalized interest funded from the proceeds of any Series of Bonds. C. DISBURSEMENTS FROM CONSTRUCTION FUND. Moneys on deposit from time to time in the Construction Fund shall be used to pay or reimburse the following Project Costs: (1) Costs incurred directly or indirectly for or in connection with a Project or a proposed or future Project including, but not limited to, those for preliminary planning and studies, archi- tectural, legal, financial, engineering and supervisory services, labor, services, materials, equipment, acquisitions, land, rights-of-way, improvements and installation; (2) Premiums attributable to all insurance required to be taken out and maintained during the period of construction with respect to a Project to be acquired or constructed, the premium on each surety bond, if any, required with respect to work on such facilities, and taxes, assessments and other charges hereof that may become payable during the period of construction with respect to such a Project; (3) Costs incurred directly or indirectly in seeking to enforce any remedy against a contractor or subcontractor in respect of any default under a contract relating to a Project or costs incurred directly or indirectly in defending any claim by a contractor or subcontractor with respect to a Project; 15 (4) Financial, legal, accounting, appraisals, title evidence and printing and engraving fees, charges and expenses, and all other such fees, charges and expenses incurred in connection with the authorization, sale, issuance and delivery of such Series of Bonds; (5) Interest funded fromBond proceeds, ifany, for a reasonable period oftime, which shall be deposited in the Construction Fund and shall be used as provided in a supplemental resolution of the Issuer; (6) Any other incidental and necessary costs including without limitationany expenses, fees and charges relating to the acquisition, construction or installation of a Project, and the making of extraordinary repairs, renewals and replacements, decommissioning or retirement of any portion of , including the cost of temporary employees of the Issuer retained to carry out duties in connection with the acquisition, construction or erection of a Project; (7) Costs incurred directly or indirectly in placing any Project in operation in order that completion of such Project may occur; (8) Any other costs authorized pursuant to a supplemental resolution of the Issuer and permitted under the laws of the State; and (9) Reimbursements to the Issuer for any of the above items theretofore paid by or on behalf of the Issuer. D. DISPOSITION OF REVENUES. All funds at any time remaining ondeposit inthe Revenue Fund shall be disposed of on or before the twentieth day of each month, commencing in the month immedi- ately following the delivery of the 2001 Bonds, for so long as any Bonds remain Outstanding, only in the following manner and in the following order of priority: (1) Funds shall first be used for deposit into the Operation and Maintenance Fund, which was established by the Original Ordinance, of such sums as are necessary for the Cost of Operation and Maintenance, for the next ensuing month. (2) A sum as shall be determined by supplemental resolution of the Issuer shall be deposited into the Construction Fund and used for the purpose of paying Project Costs. (3) From the moneys remaining in the Revenue Fund, the Issuer shall next deposit into the Sinking Fund created by the Original Ordinance, such sums as will be sufficient to pay (a) one-sixth (1 /6) of all interest becoming due on the Bonds on the next semi-annual interest payment date; (b) commencing in the first month which is twelve (12) months or six (6) months prior to the first annual or semi-annual maturity date, respectively, of any Serial Bonds, one-twelfth (1/12) or one-sixth (1/6), respectively, ofthe amount of Serial Bonds which will become due and payable on the next 16 annual or semiannual principal maturity date, respectively, and (c) one-twelfth (1/12) of the Amortization Installment required to be made on the next annual payment date or one-sixth (1/6) of the Amortization Installment required to be made on the next semi-annual payment date into a "Bond Amortization Account", created and established in the Sinking Fund by the Original Ordinance. Such payments shall be credited to a separate special account for each series of Term Bonds outstanding, and ifthere shall be more than one stated maturity for Term Bonds of a series, then into a separate special account in the Sinking Fund for each such separate maturity of Term Bonds. The funds and investments in each such separate account shall be pledged solely to the payment of principal of the Term Bonds of the series or maturity within a series for which it is established and shall not be available for payment, purchase or redemption of Term Bonds of any other series or within a series, or for transfer to the Sinking Fund to make up any deficiencies in required payments therein. The Amortization Installments may be due either annually or semiannually, but in any event, the required payments as set forth above shall be made monthly commencing in the first month which is six (6) months or twelve (12) months, as the case maybe, prior to the date on which the Amortization Installment is required to be made pursuant to (c) above. Upon the sale of any series of Term Bonds, the Issuer shall by resolution, establish the amounts and maturities of such Amortization Installments for each series, and if there shall be more than one maturity of Term Bonds within a series, the Amortization Installments for the Term Bonds of each maturity. In the event the moneys deposited for retirement of a maturity of Term Bonds are required to be invested, in the manner provided below, the Amortization Installments may be stated in terms of either the principal amount of the investments to be purchased on, or the cumulative amounts of the principal amount of investments required to have been purchased by, the payment date of such Amortization Installment. Moneys on deposit in each of the separate special accounts in the Bond Amortization Account shall be used for the open market purchase or the redemption of Term Bonds ofthe series or maturity of Term Bonds within a series for which such separate special account is established or may remain in said separate special account and be invested until the stated date of maturity of the Term Bonds. The resolution establishing the Amortization Installments for any series or maturity of Term Bonds may limit the use of moneys to any one or more of the uses set forth in the preceding sentence and may specify the type or types of investments permitted hereunder to be purchased. (4) Moneys remaining in the Revenue Fund shall next be applied by the Issuer to maintain a Reserve Account, which Reserve Account was created and established by the Original Ordinance, in a sum equal to the Reserve Requirement, all or a portion of which sum may be initially provided from the proceeds of the sale of the Bonds and/or other moneys of the Issuer. The Issuer shall thereafter deposit intosaid Reserve Account an amount equalto one-twelfth(1/12) of twenty per cent (20%) of the difference between the amount, if any, so deposited upon the deli- 17 very of the Bonds and the amount of the Reserve Requirement on all outstanding Bonds. No further payments shall be required to be made into such Reserve Account when there has been deposited therein and as long as there shall remain on deposit therein a sum equal to the Maximum Bond Service Requirement on all outstanding Bonds becoming due in any ensuing Fiscal Year. Any withdrawals from the Reserve Account shall be subsequently restored from the first moneys available inthe Revenue Fund after all required current payments into the Sinking Fund and into the Reserve Account, including all deficiencies for prior payments, have been made in full. Moneys in the Reserve Account shall be used only for the purpose of the payment of maturing principal (including Amortization Installments) of or interest on the Bonds when the moneys in the Sinking Fund are insufficient therefor, and for no other purpose. Upon the issuance by the Issuer of any Additional Bonds under the terms, limitations and conditions provided in this Ordinance and the Original Ordinance, the payments into the Reserve Account shall be increased so that the amount on deposit therein shall be equal to the Maximum Bond Service Requirement on all Bonds outstanding and to be outstanding. Whenever the amount on deposit in the Reserve Account exceeds the Reserve Requirement on all Bonds then outstanding, the excess may be withdrawn and deposited into the Sinking Fund. The Issuer shall not be required to make any further payments into the Sinking Fund or into the Reserve Account when the aggregate amount ofmoneys in the Sinking Fund and the Reserve Account are at least equal to the aggregate principal amount of Bonds then outstanding, plus the amount of interest then due or thereafter to become due on the Bonds then outstanding. Notwithstanding the foregoing provisions, in lieu of the required deposits ofRevenues into the Reserve Account, the Issuer may cause to be deposited into the Reserve Account a surety bond or an insurance policy issued by a reputable and recognized insurer for the benefit of the Bondholders in an amount equal to the difference between the Maximum Bond Service Requirement and the sums then on deposit in the Reserve Account, if any, which surety bond or insurance policy shall be payable (upon the giving ofnotice as required thereunder) on any interest payment date on which a deficiency exists which cannot be cured by funds in any other account held pursuant to this Ordinance and the Original Ordinance and available for such purpose. The insurer providing such surety bond or insurance policy shall be an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by Standard & Poor's Corporation or Moody's Investors Service, Inc., or their successors. If a disbursement is made from a surety bond or an insurance policy provided pursuant to this paragraph, the Issuer shall be obligated to either reinstate the maximum limits of such surety bond or insurance policy immediately following such disbursement or to deposit into the Reserve Account, as herein provided in this 18 paragraph for restoration of withdrawals from the Reserve Account, funds in the amount of the disbursement made under such policy, or a combination of such alternatives. (5) The Issuer shall next apply and deposit the moneys in the Revenue Fund into the Renewal and Replacement Fund created by the Original Ordinance. The Issuer shall deposit into such Renewal and Replacement Fund an amount equal to one-twelfth (1/12) of five per centum (51/o) of the Gross Revenues ofthe System for the previous Fiscal Year, or such other amount as is certified as necessary for the purposes ofthe Renewal and Replacement Fund by the Consulting Engineerand as approved by the City Commission. The moneys in said Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to or the replacement of capital assets of the System and emergency repairs thereto. Such moneys ondeposit in such Fund shall also be used to supplement the Reserve Account ifnecessary in order to prevent a default in the payment of the principal of and interest on the Bonds. (6) To the extent junior lien bonds are issued and outstanding (which subordinated bonds the Issuer reserves the right to issue), the Issuer shall next apply moneys in the Revenue Fund to the payment of principal of, redemption premium, if any, and interest on such subordinated debt of the Issuer. (7) The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may either be deposited into either the Renewal and Replacement Fund or the Sinking Fund, or may be used for the purchase or redemption of Bonds, or may be used by the Issuer for any lawful purpose of the Issuer. E. INVESTMENT OF FUNDS. The Operation and Maintenance Fund, the Sinking Fund, the Reserve Account, the Renewal and Replacement Fund, the Revenue Fund, the Construction Fund, and any other special funds herein and in the Original Ordinance established and created shall constitute trust funds for the purposes provided herein for such funds. All such funds shall be continuously secured in the same manner as state and municipal deposits are required to be secured by the laws of the State of Florida. Moneys on deposit in any of such funds and accounts may be invested and reinvested in Authorized Investments. Investments made with moneys in the Construction Fund, the Revenue Fund, the Operation and Maintenance Fund, and the Sinking Fund (except the Bond Amortization Account therein), must mature not later than the date that such moneys will be needed. Investments made with moneys in the accounts inthe Bond Amortization Account, in the Reserve Account and in the Renewal and Replacement Fund must mature, in the case of the accounts in the Bond Amortization Account not later than the stated date of maturity of each respective Amortizationlnstallment ofthe Term Bonds to be retired from the sub-accounts in the Bond Amortization Account from which the investment is made, in the case of the Reserve Account not later than the final maturity of any Bonds then outstanding, and in the case of the Renewal and Replacement Fund, not later than such date as shall be determined by the Issuer. Any and all income 19 received bythe Issuer from all such investments shall be deposited into the Revenue Fund, except however, that investment income earned in the Bond Amortization Account may be retained therein or deposited into the Sinking Fund and used to pay maturing principal of and interest on the Bonds, at the option of the Issuer. The cash required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single bank account, and funds allocated to the various accounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the cash on deposit therein and such investments for the various purposes of such funds and accounts as herein provided. The designation and establishment of the various funds in and by this Ordinance shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as herein provided. F. OPERATION AND MAINTENANCE. The Issuer will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. G. RATE ORDINANCE. The Issuer has enacted or will enact a rate ordinance and thereby will fix, establishand maintain such rates and will collect such fees, rentals and other charges for the services and facilities of the System and revise the same from time to time whenever necessary, as will always provide Gross Revenues in each Fiscal Year sufficient to pay the Cost of Operation and Maintenance of the System in such Fiscal Year, one hundred fifteenper centum (115%) ofthe Bond Service Requirement becoming due in such Fiscal Year on the outstanding Parity Bonds, on the outstanding Bonds and on all outstanding Additional Bonds, plus one hundred per centum (100%) of all reserve and other payments required to be made pursuant to this Ordinance and the Original Ordinance. Such rates, fees, rentals and other charges shall not be reduced so as to be insufficient to provide Gross Revenues for such purposes. H. BOOKS AND RECORDS. The Issuer shall keep books and records of the System, which books and records shall be kept separate and apart from all other books, records and accounts of the Issuer, and Bondholders shall have the right at all reasonable times to inspect all records, accounts and data of the Issuer relating thereto. 1. ANNUAL AUDIT. The Issuer shall also, at least once a year, cause the books, records and accounts relating to the System to be properly audited by a recognized independent firm of certified public accountants and shall make generally available the report of such audits to any Bondholder. 20 J. NO MORTGAGE OR SALE OF THE SYSTEM. The Issuer irrevocably covenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose of the System as a whole until all of the Bonds shall have been paid in full as to both principal and interest, or payment shall have been duly provided for under this Ordinance. The foregoing provision notwithstanding, the Issuer may sell or dispose of, for fair market value, any properties or parts ofthe Systemwhichthe Consulting Engineer shall certify in writing are not necessary for the continued operation of the System and that the sale or disposal of which will not adversely affect the Gross Revenues to be derived from the System to such an extent that the Issuer will fail to comply with the covenants contained herein, including Section 17(G) of this Ordinance and the Original Ordinance. The proceeds derived from any sale or disposal of any properties or parts of the System as provided for in the above paragraph shall, in the discretion of the Issuer, be (1) deposited in the Renewal and Replacement Fund and used exclusively for the purpose ofpaying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and for unusual or extraordinary repairs thereto, or for the construction or acquisition of additions, extensions and improvements to the System, or (2) for the purchase or retirement of the Bonds then outstanding. However, if the Consulting Engineer certifies that proceeds are necessary for the purposes stated in part (1) above, such proceeds shall remain in the Renewal and Replacement Fund until such certified requirements are satisfied, and the proceeds shall not be used for any other purpose allowed by this Ordinance or the Original Ordinance. K. INSURANCE. The Issuer will make adequate provision to maintain fire and windstorm insurance on all buildings and structures and properties of the System which are subject to loss through fire or windstorm, public liability insurance, and other insurance of such types and in such amounts as are normally carried in the operationofsimilarpublic and private utility systems within the State ofFlorida. Any such insurance shall be placed with nationally recognized and reputable insurors or under State approved and authorized self insurance programs or any combination of both and shall be carried for the benefit of the Bondholders. All monies received for losses under any such insurance, except public liability, are hereby pledged by the Issuer as security for the Bonds, until and unless such proceeds are used to remedy the loss or damage for which such proceeds are received, either by repairing the property damaged or replacing the property destroyed within ninety (90) days from the receipt of such proceeds. L. NO FREE SERVICE. The Issuer will not render or cause to be rendered any free services of any nature by its System, nor will any preferential rates be established for users of the same class. This covenant shall not prevent individual contracts with other governmental entities for the wholesale delivery of services of the System. The Issuer, including its departments, agencies and instrumentalities, shall avail itself of the facilities or services provided by the System or any part thereof, and the same rates, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged to the Issuer and any such department, agency or instrumentality. Such charges shall be paid as they accrue, and the Issuer shall transfer from its general funds sufficient sums to pay such charges. The reve- nues so received shall be deemed to be Gross Revenues derived from the operation of the System and shall 21 be deposited and accounted for in the same manner as other Gross Revenues derived from such operation of the System. M. MANDATORY CONNECTION. To the full extent permitted by law the Issuer will adopt and keep in force and effect an ordinance requiring that all improved premises with respect to which water or sewer services from the System are available shall connect such premises to the System and shall obtain available water and sewer services only from the System. N. ENFORCEMENT OF COLLECTIONS. The Issuer will diligently enforce and collect all fees, rentals or other charges for the services and facilities of the System and take all steps, actions and proceedings for the enforcement and collection of such fees, rentals or other charges which shall become delinquent to the full extent permitted or authorized by the Act and by the laws of the State of Florida. The Issuer will, under reasonable rules and regulations, shut off and discontinue the supplying of the water service and the sewer service ofthe System for the nonpayment of fees, rentals or other charges for said water service or said sewer service, or either of them, and will not restore said water service or sewer service, or either of them, until all delinquent charges for both water service and sewer service, together with interest and reasonable penalties, have been paid in full. 0. REMEDIES. Any Bondholder, or any trustee acting for the Bondholders may, either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the laws of the State ofFlorida, or granted and contained herein, and may enforce and compel the performance of all duties herein required or by any applicable statutes to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any Bondholders any lien on any real property of the Issuer. P. CONSULTING ENGINEERS. The Issuer will retain an independent consulting engineer or engineering firm having a favorable reputation for skill and experience for the design, construction and operation of systems of comparable size and character as the System, for the purpose of providing the Issuer competent engineering counsel in connection with the making of the capital improvements. The Issuer may, however, employ additional engineers at any time with relation to specific engineering and operation problems arising in connection with the System. Q. CITY MANAGER REPORTS. On an annual basis, within 45 days of the receipt of the annual audit ofthe System provided for above, the Issuer shall cause to be prepared by the City Manager a report or survey of the System with respect to the management of the properties thereof, the sufficiency of the rates and charges for services, the proper maintenance of the properties of the System and the necessity for capital improvements and recommendations therefor. Such a report or survey shall also show 22 any failure of the Issuer to perform or comply with the covenants herein contained, including those contained in subsection I above. In the event that such annual report reflects that the rates and charges for services are insufficient to protect the rights ofthe Bondholders, then the Issuer shall take such steps as are required by law to raise the rates and charges for services. In the event that the annual report indicated that the rates and charges for services should be increased substantially pro rata as to all classes of service, then, to the full extent permitted by law, the Issuer shall raise the rates and charges for services without the necessity for notice or public hearing. R. NO COMPETING SYSTEM. To the full extent permitted by law the Issuer will not grant or cause, consent to, or allow the granting of any franchise or permit to any person, firm, corporation or body or agency or instrumentality whatsoever for the furnishing of water or sanitary sewerage services to or within the service area of the System, if determined by the Consulting Engineers to be materially competitive with the System and adversely affecting the Gross Revenues derived from the operation thereof. S. ISSUANCE OF OTHER OBLIGATIONS. The Issuer shall issue no bonds or obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues if such obligations have priority over the Bonds with respect to payment or lien, nor shall the Issuer create or cause or permit to be created any debt, lien, pledge, assignment, encumbrance or other charge on a parity withthe lienofthe Bonds upon said Pledged Revenues. Notwithstanding any other provision in this Section, the Issuer may issue Additional Bonds under the conditions and in the manner provided herein. Any obligations of the Issuer, other than the Bonds, which are payable from the Pledged Revenues shall contain an express statement that such obligations are junior and subordinate in all respects to the Bonds as to lien on and source and security for payment from such Pledged Revenues. T. ISSUANCE OF ADDITIONAL BONDS. Additional Bonds, payable on a parity fromthe Pledged Revenues with the Parity Bonds and the Bonds, shall be issued only for the purposes of refunding a part of the outstanding Bonds or financing the cost of extensions, additions and improvements to the System and for the acquisition and construction of, and extensions, additions and improvements to, sewer and/or water systems which are to be consolidated with the System and operated as a single combined utility. Additional Bonds, other than for refunding purposes, shall be issued only upon compliance with all of the following conditions: (1) There shall have been obtained and filed with the Clerk a certificate ofthe Finance Director stating: (a) that the books and records of the Issuer relative to the System have been audited by qualified and recognized firm of independent certified public accountants; (b) based on such audited financial statement, that the amount of the adjusted Net Revenues derived for the Fiscal Year preceding the date of issuance of the proposed Additional Bonds or for any twelve (12) consecutive months during the eighteen (18) months immediately preceding the date of issuance ofthe Additional Bonds with respect 23 to which such certificate is made, adjusted as herein below provided; and (c) based on such audited financial statement, that the aggregate amount of such Net Revenues, as adjusted, for the period for which such Net Revenues are being certified is equal to not less than 120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Parity Bonds and the Bonds issued under this Ordinance, if any, then Outstanding, and (u) on the Additional Bonds with respect to which such certificate is made. (2) Upon recommendation of the Consulting Engineers, the Net Revenues certified pursuant to (b) in the previous paragraph may be adjusted for purposes of this Subsection by including: (a) 100% of the additionalNet Revenues which in the opinion of the Consulting Engineer would have been derived by the Issuer from rate increases adopted before the Additional Bonds are issued, if such rate increases had been implemented before the commencement of the period for which such Net Revenues are being certified, and (b) 100% of the additional Net Revenues estimated by the Consulting Engineer to be derived during the first full twelve month period after the facilities of the System are extended, enlarged, improved or added to with the proceeds of the Additional Bonds with respect to which such certificate is made. The adjustments described in Section 17(T)(2)(b) may only be made if the Net Revenues as adjusted under Section 17(T)(2)(a) for the period for which such Net Revenues are being certified equals at least 1.00 times the Maximum Bond Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds then outstanding; and (ii) on the Additional Bonds with respect to which such certificate is made. (3) Additional Bonds shall be deemed to have been issued pursuant to this Ordinance the same as the Outstanding Bonds, and all of the other covenants and other provisions of this Ordinance and the Original Ordinance (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holder ofall Bonds issued pursuant to this Ordinance and the Original Ordinance. Except as provided in Section 17(T) hereof, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Revenues and their sources and security for payment therefrom without preference of any Bonds over any other. (4) In the event that the total amount of Bonds herein authorized to be issued are not issued simultaneously, such Bonds which are subsequently issued shall be subject to the conditions of Section 17(T) hereof. (5) The Issuer need not comply with the provisions of paragraph 1 of this Section 17(T) if and to the extent the Additional Bonds to be issued are refunding bonds, and if the Issuer shall cause to be delivered a certificate of the Finance Director setting forth the annual debt service (i) for the Bonds thenOutstandingand (H) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Bond Service Requirement in any year pursuant to (ii) above is not greater than the Bond Service Requirement in the corresponding year set forth pursuant to (i) above. 24 (6) The Issuer shall not be in default in the carrying out of any of the obligations assumed under this Ordinance and no event of default shall have occurred under this Ordinance and shall be continuing, and all payments required by this Ordinance to be made into the funds and accounts established hereunder shall have been made to the full extent required. (7) The resolution authorizing the issuance of a Series ofAdditional Bonds shall recite that all of the covenants contained herein will be applicable to such Additional Bonds. U. MAINTENANCE OF SYSTEM. The Issuer willmaintainthe System in good condition and continuously operate the same in an efficient manner and at a reasonable cost. SECTION 18. TAX COMPLIANCE. A. In General. The Issuer at all times while the Bonds and the interest thereon are outstanding will comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code") and any valid and applicable rules and regulations promulgated thereunder (the "Regulations") in order to ensure that the interest on the Bonds will be excluded from gross income for federal income tax purposes. B. Rebate. (1) The Issuer shall either make or cause an independent firm of certified public accountants or tax compliance firm to make and promptly provide to the Issuer the rebate calculations required by the Code and Regulations, on which the Issuer may conclusively rely in taking action under this Section. The Issuer shall make deposits to and disbursements from separate accounts to the extent required by the Code and Regulations and shall otherwise maintain full and complete accounting records of receipts and disbursements of, and investment purchases and sales allocated to, the "gross proceeds" subject to the rebate requirements of the Code and Regulations. The requirements of this Subsection 18B may be superseded or amended by new calculations accompanied by an opinion of bond counsel addressed to the Issuer to the effect that the use ofthe new calculations are in compliance with the Code and Regulations and will not cause the interest on the Bonds to become included in gross income for Federal income tax purposes. (2) The Issuer shall either make or cause an independent firm of certified public accountants or tax compliance firm to annually make and promptly forward to the Issuer after the end of the Bond Year and within the time required by the Code and the Regulations the computation ofthe rebate deposit required by the Code, on whichthe Issuer may conclusively rely in taking action under this Subsection B. Records of the determinations required by this Subsection B and the Code and Regulations shall be retained by the Issuer until six (6) years after the Bonds are no longer outstanding. (3) Within the time required by the Code and Regulations following the end of the fifth Bond Year, as defined in the Code, and every five (5) years thereafter, the Issuer shall pay to the United States of America ninety percent (90%) of the rebate amounts calculated as of such 25 payment date, as shown by the computations of the Issuer or the certified public accountants or tax compliance firm, and one hundred percent (100%) ofthe earnings on such rebate amounts as of such payment date. Not later than sixty (60) days after the final retirement of each applicable series ofBonds, the Issuer shall pay to the United States of America one hundred percent (100%) of the balance remaining of the rebate amount and the earnings thereon. Each payment required to be paid to the United States of America pursuant to this Subsection B shall be filed with the Internal Revenue Service Center, Ogden, Utah 84201. Each payment shall be accompanied by a copy of the Form 8038 originally filed with respect to each applicable series of Bonds and a statement summarizing the determination ofthe amount to be paid to the United States ofAmerica. SECTION 19. DEFAULTS; EVENTS OF DEFAULT AND REMEDIES. Except as provided below, if any of the following events occur it is hereby defined as and declared to be and to constitute an "Event of Default": (A) Default in the due and punctual payment of any interest on the Bonds; (B) Default in the due and punctual payment of the principal of and premium, if any, or Accreted Value on any Bond, at the stated maturity thereof, or upon proceedings for redemption thereof; (C) Default in the performance or observance of any other of the covenants, agreements or conditions on the part of the Issuer contained in this Ordinance or in the Bonds and the continuance thereof for a period of thirty (30) days after written notice to the Issuer given by the Holders of not less than twenty-five percent (25%) of aggregate principal amount of Bonds then Outstanding (provided, however, that with respect to any obligation, covenant, agreement or conditionwhich requires performance by a date certain, if the Issuer performs such obligation, covenant, agreement or condition within thirty (30) days of written notice as provided above, the default shall be deemed to be cured); (D) Failure by the Issuer promptly to remove any execution, gamishment or attachment of such consequence as will materially impair its ability to carry out its obligations hereunder; (E) Any act ofbankruptcy or the rearrangement, adjustment or readjustment ofthe obligations of the Issuer under the provisions of any bankruptcy or moratorium laws or similar laws relating to or affecting creditors' rights. The term "default" shall mean default by the Issuer in the performance or observance of any of the covenants, agreements or conditions on its part contained in this Ordinance, any supplemental resolution or in the Bonds, exclusive of any period of grace required to constitute a default or an "Event of Default" as hereinabove provided. For purposes of Section 19(A) and (B) hereof, no effect shall be given to any payments made under any Bond Insurance Policy. 26 Any Holder of Bonds issued under the provisions hereof or any trustee acting for the Holders of such Bonds, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under State or federal law, or granted and contained herein, and may enforce and compel the performance of all duties required herein or by any applicable law to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any Holder of the Bonds any lien on any property of the Issuer, except the Pledged Revenues. The foregoing notwithstanding: (i) No remedy conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy, but each remedy shall be cumulative and shall be in addition to any other remedy given to the Bondholders hereunder. (ii) No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised as often as may be deemed expedient. (iii) No waiver of any default or Event of Default hereunder by the Bondholders shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. (iv) Acceleration of the payment of principal of and interest on the Bonds shall not be a remedy hereunder in the case of an Event of Default. Upon the occurrence ofan Event ofDefault, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights ofthe Bondholders underthis Ordinance, the Bondholders shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Project and the funds pending such proceedings, with such powers as the court making such appointment shall confer. Notwithstanding any provision of this Ordinance to the contrary, for all purposes of this Section 21, except the giving of notice of any Event of Default to the Holder of the Bonds, the Bond Insurer shall be deemed to be the Holder of the Bonds it has insured. On the occurrence of an Event of Default, to the extent such rights may then lawfully be waived, neither the Issuer nor anyone claiming through or under it, shall set up, claim or seek to take advantage of any stay, extension or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement ofthis Ordinance, and the Issuer, for itself and all who may claim through or under it, hereby 27 waives, to the extent it may lawfully do so, the benefit of all such laws and all right of redemption to which it may be entitled. Within 30 days of knowledge thereof, both the Issuer and the Paying Agent shall provide notice to the Bond Insurer of the occurrence of any Event of Default. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Issuer or any Paying Agent of the occurrence of an Event of Default and (ii) request the Issuer or any Paying Agent to intervene in judicial proceedings that affect the Bonds or the security therefor. The Issuer and any Paying Agent are required to accept notice of default from the Bond Insurer. Anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, the Bond Insurer, if any for a Series of Bonds shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders under this Ordinance for such Series of Bonds and the Bond Insurer shall also be entitled to approve all waivers of events of default. SECTION 20. AMENDING AND SUPPLEMENTING OF ORDINANCE WITHOUT CONSENT OF HOLDERS OF BONDS. The Issuer, from time to time and at any time and without the consent or concurrence of any Holder of any Bonds, may enact an ordinance amendatory hereof or supplemental hereto, if the provisions of such supplemental ordinance shall not adversely affect the rights of the Holders of the Bonds then Outstanding, for any one or more of the following purposes: (A) To make any changes or corrections in this Ordinance as to whichthe Issuer shall have been advised by counsel that are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provisions or omission or mistake or manifest error contained in this Ordinance, or to insert in this Ordinance such provisions clarifying matters or questions arising under this Ordinance as are necessary or desirable; (B) To add additionalcovenants and agreements ofthe Issuer for the purpose offurther securing the payments of the Bonds; (C) To surrender any right, power or privilege reserved to or conferred upon the Issuer by the terms of this Ordinance; (D) To confirm as further assurance any lien, pledge or charge or the subjection to any lien, pledge or charge, created or to be created by the'provisions of this Ordinance; (E) To grant to or confer upon the Holders any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (F) To assure compliance with federal "arbitrage" provisions in effect from time to time; 28 (G) To provide such changes as may be necessary in order to adjust the terms hereof so as to facilitate the issuance of Variable Rate Bonds or Option Bonds; and (H) To modify any of the provisions of this Ordinance in any other aspects provided that such modifications shall not be effective until after the Bonds Outstanding at the time such supplemental ordinance is adopted shall cease to be Outstanding, or unfit the holders thereof consent thereto pursuant to Section 21 hereof, and any Bonds issued subsequent to any such modification shall contain a specific reference to the modifications contained in such supplemental ordinance. Except for supplemental resolutions providing for the issuance of a Series of Bonds pursuant hereto, the Issuer shall not enact any supplemental ordinance authorized by the foregoing provisions of this Section unless in the opinion of Bond Counsel the enactment of such supplemental ordinance is permitted by the foregoing provisions of this section. SECTION 21. AMENDMENT OF ORDINANCE WITH CONSENT OF HOLDERS OF BONDS. Except as provided in Section 20 hereof, no material modification or amendment of this Ordinance or of any resolution supplemental hereto shall be made without the consent in writing of the Holders of fifty-one percent or more in the principal amount of the Bonds of each Series so affected and then Outstanding. For purposes of this Section, to the extent any Bonds are insured by a policy of municipal bond insurance or are secured by a letter of credit and such Bonds are then rated in as high a rating category as the rating category in which such Bonds were rated at the time of initial issuance and delivery thereof by either Standard & Poor's Corporation or Moody's Investors Service, or successors and assigns, then the consent of the issuer of such municipal bond insurance policy or the issuer of such letter of credit shall be deemed to constitute the consent ofthe Holder of such Bonds. No modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise ofthe Issuer to pay the principal of and interest on the Bonds as the same shall become due from the Pledged Revenues or reduce the percentage of the Holders of the Bonds required to consent to any material modification or amendment hereof without the consent of the Holder or Holders of all such obligations. For purposes of the immediately preceding sentence, the issuer of a municipal bond insurance policy or a letter of credit shall not consent on behalf ofthe Holders ofthe Bonds. No amendment or supplement pursuant to this Section 21 (but not including Section 20 hereof) shall be made without the consent of the Bond Insurer, if any. SECTION 22. DEFEASANCE. The covenants and obligations of the Issuer shall be defeased and discharged under terms of this Ordinance as follows: (A) If the Issuer shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of all Bonds the principal, redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, then the pledge of the Pledged Revenues and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. If the Issuer shall pay or cause to be paid, or there shall 29 otherwise be paid, to the Holders of any Outstanding Bonds the principal or redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated herein, such Bonds shall cease to be entitled to any lien, benefit or securityunder this Ordinance, and all covenants, agreements and obligations of the Issuer to the Holders of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. (B) The Bonds, redemption premium if any, and interest due or to become due for the payment or redemption of which moneys shall have been set aside and shall be held in trust (through deposit by the Issuer of funds for such payment or redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) of this Section 22. Subject to the provisions of paragraph (C) and (D) of this Section 22, any Outstanding Bonds shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in paragraph (A) ofthis Section if(i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Issuer shall have given to the escrow agent instructions accepted in writing by the escrow agent to notify Holders of Outstanding Bonds in the manner required herein of the redemption of such Bonds on said date and (n) there shall have been deposited with the escrow agent either moneys in an amount which shall be sufficient, or Federal Securities (including any Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States) the principal of and the interest on which when due will provide moneys which, together with the moneys, ifany, deposited with the escrow agent at the same time, shall be sufficient, to pay when due the principal of or premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof, as the case may be. (C) For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or Acquired Obligations and moneys, if any, in accordance with paragraph B of this Section 22, the interest to come due on such Variable Rate Bonds on or prior to the maturity date or redemption date thereof, as the case may be, shall be calculated at the maximum rate permitted by the terms thereof; provided, however, that ifon any date, as a result of such Variable Rate Bonds having borne interest at less than such maximum rate for any period, the total amount of moneys and Acquired Obligations on deposit with the escrow agent for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited with the escrow agent on such date in respect of such Variable Rate Bonds in order to satisfy the second sentence of paragraph (B) of this Section 22, the escrow agent shall, if requested by the Issuer, pay the amount of such excess to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Ordinance. (D) Option Bonds shall be deemed to have been paid in accordance with the second sentence of paragraph (B) of this Section 22 only if, in addition to satisfying the requirements of clauses (i) and (ii) of such sentence, there shall have been deposited with the escrow agent moneys in an amount which shall be sufficient to pay when due the maximum amount of principal of and redemption premium, if any, and interest on such Bonds which could become payable to the Holders of such Bonds upon the exercise of 30 any options provided to the Holders of such Bonds; provided, however, that ii; at the time a deposit is made with the escrow agent pursuant to paragraph (B) of this Section, the options originally exercisable by the Holder of an Option Bond are no longer exercisable, such Bond shall not be considered an Option Bond for purposes of this paragraph (D). If any portion of the moneys deposited with the escrow agent for the payment of the principal of and redemption premium, if any, and interest on Option Bonds is not required for suchpurpose, the escrow agent shall, ifrequested by the Issuer, pay the amount of such excess to the Issuer free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under the Resolution. SECTION 23. SALE OF THE BONDS. The Bonds shall be issued and sold at public or negotiated sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the requirements of this Ordinance and other applicable provisions of law as set forth in a supplemental resolution of the Issuer adopted before the issuance of any Series ofBonds. SECTION 24. CAPITAL APPRECIATION BONDS. For the purposes of (i) receiving payment ofthe redemptionprice ifa Capital Appreciation Bond is redeemed priorto maturity, (ii) receiving payment of a Capital Appreciation Bond if the principal of all Bonds is declared immediately due and payable under the provisions of the Ordinance, (iii) computing the amount ofthe Maximum Bond Service Requirement, and (iv) computing the percentage of Bonds held by the registered owner of a Capital Appreciation Bond in giving to the Issuer or the Trustee any notice, consent, request or demand pursuant to the Ordinance for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. SECTION 25. AMENDING PRIOR ORDINANCES. In accordance with Section 21 of Ordinance No. 3674-84, which permits amendments and modifications of such Ordinance which are not material modifications or amendments thereof, but with the consent of the respective Bond Insurer for the Parity Bonds, Section 16R of Ordinance No. 3674-84, Ordinance No. 5355-93 and Ordinance No. 6311-98 is hereby amended by deleting in its entirety paragraph (1) thereof and replacing such paragraph with the following new paragraph (1): (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 Issuer relative to the System have been audited by qualified and recognized firm of independent certified public accountants; (b) based on such audited financial statement, that the amount ofthe adjusted Net Revenues derived for the Fiscal Year preceding the date of issuance ofthe proposed Additional Bonds or for any twelve (12) consecutive months during the eighteen (18) months immediately preceding the date of issuance of the Additional Bonds with respect to which such certificate is made, adjusted as herein below provided; and (c) based on such audited financial statement, that the aggregate amount of such Net Revenues, as adjusted, for the period for which suchNet Revenues are being certified is equalto not less than 120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year 31 thereafter on (i) all Parity Bonds and the Bonds issued under this Ordinance, if any, then Outstanding, and (ii) on the Additional Bonds with respect to which such certificate is made SECTION 26. SEVERABILITY OF INVALID PROVISIONS. Ifany one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Bonds issued hereunder. SECTION 27. REPEALING CLAUSE. All ordinances or resolutions or parts thereof of the Issuer in conflict withthe provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. SECTION 28. EFFECTIVE DATE. This Ordinance shall take effect immediately upon its passage. SECTION 29. PUBLIC NOTICE. Notice of the proposed enactment of this Ordinance has been properly advertised in a newspaper of general circulation in accordance with Chapter 166.041, Florida Statutes. PASSED ON FIRST READING , 2001 PASSED ON SECOND READING AND FINAL READING AND ADOPTED AS AMENDED. , 2001 Mayor-Commissioner Attest: City Clerk Approved as to Form, Sufficiency and Correctness: City Attorney 32 RESOLUTION NO. 03-35 A RESOLUTION PROVIDING FOR THE AUTHORIZATION OF NOT TO EXCEED $9,500,000 WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2003; PROVIDING FOR THE PUBLIC SALE OF SAID BONDS; SETTING FORTH THE FORM OF THE NOTICE OF BOND SALE AND SUMMARY NOTICE OF BOND SALE RELATING TO THE SALE OF SUCH BONDS; DIRECTING PUBLICATION OF THE SUMMARY NOTICE OF SALE RELATING TO SUCH BONDS; PROVIDING FOR THE OPENING OF BIDS RELATING TO THE SALE OF THE BONDS; SETTING FORTH THE FORM OF OFFICIAL NOTICE OF SALE AND BID FORMS; PROVIDING THAT SUCH BONDS SHALL BE ISSUED IN FULL BOOK ENTRY FORM; APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE CERTIFICATE; DESIGNATING A REGISTRAR AND PAYING AGENT; PROVIDING FOR AN ESCROW DEPOSIT AGREEMENT AND APPOINTING AN ESCROW AGENT; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Clearwater, Florida (the "Issuer") has by Ordinance No. 3674- 84 enacted by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 5355-93, enacted on April 15, 1993, as amended and supplemented in Ordinance 6311-98, enacted November 5, 1998 and as further amended and supplemented in Ordinance 6915-01, enacted November 15, 2001 (collectively, the "Bond Ordinance") authorized the issuance of City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series [to be determined] in one or more series from time to time; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA, as follows: SECTION 1. AUTHORIZATION OF BONDS AND SERIES DESIGNATION. The Water and Sewer Revenue Refunding Bonds, Series 2003 being offered pursuant to the Bond Ordinance and this resolution are hereby designated as the not to exceed $9,500,000 City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 2003 Bonds are hereby authorized to be issued. The proceeds of the Series 2003 Bonds shall be used to refund the Issuer's outstanding Water and Sewer Refunding Revenue Bonds, Series 1993 maturing on and after December 1, 2004 (the 'Refunded Bonds'), pay the cost of issuing the 2003 Bonds, including any municipal bond insurance, and to fund a debt service reserve fund. SECTION 2. PUBLIC SALE. There is hereby authorized to be sold pursuant to a public sale not to exceed $9,500,000 City of Clearwater, Florida, Water and Sewer Revenue Refunding Bonds, Series 2003. Resolution No. 03-35 SECTION 3. SALE OF SERIES 2003 BONDS; REDEMPTION AND MATURITY PROVISIONS. The Finance Director is hereby directed to arrange for the sale of the Series 2003 Bonds utilizing the electronic bid process of PARITY through the publication of the Summary Notice of Sale of the Bonds in a newspaper regularly distributed in the City of Clearwater and in The Bond Buyer, such publications to be on such date as shall be deemed by the Finance Director to be in the best interest of the Issuer and such publications to be not less than ten (10) calendar days prior to the date of sale as required by Section 218.385(1), Florida Statutes; and to publish such Notice in such other newspapers on such dates as may be deemed appropriate by the Finance Director. The Series 2003 Bonds shall be subject to optional redemption and shall bear maturities and sinking fund amortizations as shall be subsequently determined by the Financial Director, upon advice of the City's financial advisor and based on market conditions existing at the time, prior to the publication of the Summary Notice of Sale as hereinafter approved. Proposals for purchase of the Series 2003 Bonds will be received electronically via PARITY as provided in the Official Notice of Sale, from the time that the Notice of Bond Sale is published until 11:00 a.m., Clearwater, Florida time, on such date and time as may be established by the Finance Director of the City or her designee, and if such date is subject to change, communicated through Thompson Municipal Market Monitor (TM3) not less than twenty-four (24) hours prior to the time bids are to be received for the purchase of the City of Clearwater, Florida, Water and Sewer Revenue Bonds, Series 2003; provided that if the intemet is not working on the designated bid date, the bid date shall be automatically changed to the next business day, and the City will communicate a confirmation of this change in bid date through Thompson Municipal Market Monitor (TM3), all as provided in the Notice of Sale (the "Bid Date"). SECTION 4. CREATION OF ACCOUNT IN THE CONSTRUCTION FUND AND USE OF FUNDS. There is hereby created with the Construction Fund separate subaccounts namely, the Series 2003 Cost of Issuance Account. Moneys held in the Series 2003 Cost of Issuance Account shall be used to pay the costs of issuing and delivering the Series 2003 Bonds. SECTION 5. DISPOSITION OF PROCEEDS OF SERIES 2003 BONDS. The proceeds from the sale of the Series 2003 Bonds shall be deposited as follows: (a) An amount equal to the accrued interest on the Series 2003 Bonds shall be deposited into the Interest Account in the Bond Service Funds; (b) An amount determined by the Finance Director to be necessary to pay the costs of issuing the Series 2003 Bonds, including the premium due to the Bond Insurer, shall be deposited into the Series 2003 Cost of Issuance Account in the Construction Fund to pay such costs; (c) An amount determined by the Finance Director in consultation with the City's Financial Advisor to be deposited under the Escrow Deposit Agreement (hereinafter approved), which together with certain Resolution No. 03-35 2 funds currently held by the Issuer in the Sinking Fund for the Refunded Bonds, will provide sufficient funds to defease the Refunded Bonds; (d) An amount determined by the Finance Director to be necessary to increase the amount in the Reserve Fund so that the amount on deposit therein equals the Reserve Requirement; and (e) The remaining proceeds of the Series 2003 Bonds representing a rounding amount shall be deposited into the Bond Service Fund for the Series 2003 Bonds. SECTION 6. APPROVAL OF FORMS. The Notice of Bond Sale and Summary Notice of Sale of the Bonds to be submitted for purchase of the Series 2003 Bonds shall be in substantially the forms annexed hereto, as Exhibits A and B, respectively, together with such changes as shall be deemed necessary or desirable by the Finance Director depending on the bidding method selected in accordance with Section 3 hereof, incorporated herein by reference. The form of the Official Bid Form shall be provided by the internet auction website selected by the Finance Director, and shall be reasonably satisfactory to the Finance Director. SECTION 7. BOOK ENTRY ONLY BONDS. It is in the best interest of the City and the residents and inhabitants thereof that the Series 2003 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 2003 Bonds remain in such book entry only system of registration, in the event of a conflict between the provisions of the Bond Ordinance and of the Blanket Letter of Representations, the terms and provisions of the Blanket Letter of Representations shall prevail. SECTION 8. ESCROW DEPOSIT AGREEMENT The form of Escrow Deposit Agreement to be used in connection with the defeasance and redemption of the Refunded Bonds attached hereto as Exhibit'F" and incorporated herein by reference is hereby approved. The Mayor-Commissioner, or in his absence the Vice Mayor, the City Manager and the City Clerk are hereby authorized to execute such Escrow Deposit Agreement in substantially the form attached as Exhibit "F" upon the approval of the City Attorney as to form and legal sufficiency, with such additional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. The Finance Director is hereby authorized to solicit offers from financial institutions to serve as Escrow Agent under the Escrow Deposit Agreement for the Refunded Bonds, and the Finance Director is hereby authorized to select the firm with the lowest bid to serve in such capacity. SECTION 9. PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL STATEMENT. The City Manager and Finance Director are authorized and directed to cause a Preliminary Official Statement to be prepared in substantially the form attached hereto as Exhibit C, with such changes, insertions and omissions as shall be approved by the City Manager and Finance Director, Resolution No. 03-35 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 2003 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 2003 Bonds, the City Manager and the Finance Director shall cause to be prepared a final Official Statement dated as of the Bid Date, reflecting such changes in the Preliminary Official Statement as may be necessary to reflect the purchaser's bid. The Mayor-Commissioner and City Manager are hereby authorized to execute and delivery such final Official Statement, with such changes, insertions and omissions as may be approved by such officers. SECTION 10. CONTINUING DISCLOSURE. The City hereby covenants and agrees that, in order to provide for compliance by the City with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate in substantially the form attached hereto as Exhibit D, to be executed by the City and dated the date of issuance and delivery of the Series 2003 Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate"). Notwithstanding any other provision of this Resolution, failure of the City to comply with such Continuing Disclosure Certificate shall not be considered an event of default; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. SECTION 11. REGISTRAR AND PAYING AGENT. Wells Fargo Bank, N.A., Minneapolis, Minnesota is hereby appointed as Registrar and Paying Agent for the Series 2003 Bonds. SECTION 12. MUNICIPAL BOND INSURANCE POLICIES. Pursuant to the Bond Ordinance, Financial Security Assurance Inc. ("FSA") has been selected to provide its Municipal Bond Insurance Policy (the "Policy") as the Bond Insurance Policy (as defined in the Bond Ordinance) as additional security for payment of principal and interest on the Series 2003 Bonds. Selection offinancial Security Assurance Inc., a New York domiciled insurance company as the Bond Insurer (as defined in the Bond Ordinance) is hereby ratified and confirmed and payment for such Bond Insurance Policy from proceeds of the Series 2003 Bonds is hereby authorized. The Issuer hereby accepts the terms, conditions and agreements relating to the Bond Insurance Policy in accordance with the Municipal Bond Insurance Commitment attached hereto as Exhibit E and incorporated herein. A statement of insurance is hereby authorized to be printed on or attached to the Series 2003 Bonds for the benefit and information of the holders of the Series 2003 Bonds. In addition to the covenants and agreements of the City previously contained in the Bond Ordinance regarding the rights of the Bond Insurer, which are hereby incorporated herein, the City hereby makes the additional covenants and agreements substantially in the form attached hereto as Exhibit "G" for the benefit Resolution No. 03-35 4 of the Bond Insurer and the Holders of the Series 2003 Bonds while the Bond Insurance Policy insuring the Series 2003 Bonds are in full force and effect: SECTION 13. AWARD OF BIDS. The Finance Director is hereby authorized to accept the bids for the Series 2003 Bonds. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2003 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 4.0% on the Series 2003 Bonds and a net present value savings on refunding the Refunded Bonds of not less than 2%. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 2003 Bonds as set forth above or to reject all bids for the Series 2003 Bonds. Such award shall be final. SECTION 14. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution are inconsistent with the provisions of Resolution No. 02-30, adopted by the City Commission of the City on June 20, 2002 with respect to the Series 2002 Bonds, Resolution No. 98-54, adopted by the City Commission of the City on November 5, 1998, with respect to the Series 1998 Bonds and Resolution No. 93-26, adopted by the City Commission of the City on April 15, 1993, with respect to the Series 1993 Bonds, provisions of this Resolution shall control and supercede the inconsistent provisions of such Resolutions. Resolution No. 03-35 5 SECTION 15. EFFECTIVE DATE. This resolution shall take effect immediately upon adoption. Passed and adopted by the City Commission of the City of Clearwater, Florida, this _ day of , 2003. Approved as to form: CITY OF CLEARWATER, FLORIDA Brian J. Aungst, Mayor-Commissioner Attest: Pamela K. Akin, City Attorney Cynthia E. Goudeau, City Clerk Resolution No. 03-35 6 EXHIBIT A FORM OF OFFICIAL NOTICE OF BOND SALE CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS, SERIES 2003 NOTICE IS HEREBY GIVEN that electronic (as explained below) proposals will be received electronically via PARITY in the manner described below, until 11:00 am., Eastern Daylight Savings Time, on October 1, 2003. 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 aboutPARITY, potential bidders may contact the financial advisor to the City, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853, or PARITY at 40 West 23`d Street, 5d' Floor, New York, New York 10010, telephone (212) 404-8102. In the event of a malfunction in the electronic bidding process, the bid date will automatically change to the next business day as confirmed in a communication through Thompson Municipal Market Monitor (TM3). Form of Series 2003 Bonds The Series 2003 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 October 1, 2003. Principal of the Series 2003 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 2003 Bonds. Interest on the Series 2003 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 (I 5th) day of the calendar month preceding such interest payment date. Interest will be payable each June 1 and December 1, commencing June 1, 2004. Interest will be calculated on the basis of a 360-day year of twelve 30-day months. For so long as The Depository Trust Company, New York, New York, or its nominee, Cede & Co. (collectively, "DTC") is the registered owner of the Series 2003 Bonds, payments of principal of, redemption premium, if any, and interest on the Series 2003 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 2003 Bonds is the responsibility of the DTC participants. * Preliminary, subject to change A I Initially one bond will be issued for each maturity of the Series 2003 Bonds in the aggregate principal amount of each such maturity and registered in the name of DTC. DTC, an automated clearing house for securities transactions, will act as securities depository for the Series 2003 Bonds. Purchases of the Series 2003 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 2003 Bonds to famish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the Series 2003 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined). Maturity Schedule The Series 2003 Bonds will mature on December 1 of the following years in the following principal amounts: Series 2003 Bonds Maturi 2004 2005 2006 2007 2008 2009 2010 Principal Amount* Maturi 2011 2012 2013 2014 2015 2016 2017 2018 Principal Amount* *PreUminary, subject to change The Series 2003 Bonds will be sold as serial bonds. Bidders will not be allowed to designate any maturities as one or more term bonds. 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 2003 Bonds shown on the schedule of Principal Amounts set forth above (the "Maturity Schedule"), by an amount not to exceed five percent (5%) of the stated amount of each such Principal Amount on the Maturity Schedule and correspondingly adjust the issue size, all calculations to be rounded to the nearest $5,000. In the event of any such adjustment in the Series 2003 Bonds, no rebidding or recalculation of the A-2 bid submitted with respect to such Series 2003 Bonds will be required or permitted. If necessary, the total purchase price of the Series 2003 Bonds will be increased or decreased in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 2003 Bonds specified herein; and the Series 2003 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 2003 Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 2003 Bonds, without taking into account any adjustment in the amount of Series 2003 Bonds set forth in the Bid Maturity Schedule. Basis of Award Proposals must be unconditional and only for all the Series 2003 Bonds. The purchase price bid for the Series 2003 Bonds may include a discount (including underwriters' discount and original issue discount) not to exceed two percent (2%) of the principal amount of the Series 2003 Bonds and shall specify how much of the discount is original issue discount. The purchase price bid may also include an original issue premium and shall specify how much of such purchase price is original issue premium. The Series 2003 Bonds will be insured by Financial Security Assurance. Inc. and the City will pay the bond insurance premium from Bond proceeds. The purchase price bid for the Series 2003 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 2003 Bonds, to reject any or all bids and to waive any irregularity or informality in any bid. The Series 2003 Bonds will be awarded to the bidder (herein referred to as the "Successful Bidder" as to the Series 2003 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 2003 Bonds. True interest cost for the Series 2003 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 2003 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 June 1, 2004. The true interest cost shall be calculated from October 15, 2003, the expected closing date of the Series 2003 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 2003 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 2003 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 2003 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one- twentieth (1/20) of one percent. No coupon interest rate specified for any maturity of the Series 2003 Bonds may be less than one percent (1.0%) or more than five percent (5.0%). Should an interest rate be A-3 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 2003 Bonds bear the same rate of interest, provided that all Series 2003 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. Paving Agent and Registrar The Paying Agent and Registrar for the Series 2003 Bonds is Wells Fargo Bank, N.A., through its designated office in Minneapolis, Minnesota- Security Principal of and interest on the Series 2003 Bonds to be issued pursuant to Ordinance No. 6915- 01, as supplemented, and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of Water and Sewer System of the City, together with the earnings thereon derived from the investment thereof in the Funds and Accounts established in the Ordinance and as more fully described in the Preliminary Official Statement The Series 2003 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 2003 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 2003 Bonds are being issued to finance the refunding of the City's Water and Sewer Refunding Revenue Bonds, Series 1993, and pay the costs of issuing the Series 2003 Bonds, including the premium for a municipal bond insurance policy and to fund the reserve fund. Issuance of Series 2003 Bonds The Series 2003 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 2003 Bonds are being issued pursuant to Ordinance No. 6915-01 enacted November 15, 2001 as supplemented by resolutions (collectively, the "Bond Ordinance") by the City of Clearwater, Florida (the "City") and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law. A-4 Municipal Bond Insurance Policy A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest on the Series 2003 Bonds has been obtained from Financial Security Assurance Inc. Proposals Proposals for the Series 2003 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 $100,000 (the "Deposit") in the form of a financial surety bond of Financial Security Assurance, Inc. (the "Financial Surety Bond"). Such Financial Surety Bond must be submitted to the City prior to the sale. The Financial Surety Bond must identify the Bidder whose Deposit is guaranteed by such Financial Surety Bond. The successful bidder is required to submit its good faith deposit by wire transfer not later than 2:00 p.m. eastern time, on the next business day following the award, as instructed by the City's Financial Advisor. If such deposit is not received by that time, the City shall make a claim under the Financial Surety Bond to satisfy the good faith deposit requirement. The check of the successful bidder or proceeds of a claim under the Financial Surety Bond, as applicable, will be deposited by the City in an interest-bearing account and be retained and applied towards the purchase price of the Series 2003 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 2003 Bonds. Any interest earned on the good faith deposit will be retained by and inure to the benefit of the City. If the Series 2003 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 2003 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 2003 Bonds in book entry only form will be available for delivery on October 15, 2003, in New York, New York, at The Depository Trust Company, or some other date and place to be mutually agreed upon by the Successful Bidder and the City against the payment of the purchase price therefor including accrued interest calculated on a 360-day year basis, less the amount of the good faith check, in immediately available Federal Reserve funds without cost to the City. Closing Documents The City will furnish to the Successful Bidder upon delivery of the Series 2003 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 infomnation in the Official Statement; and (4) seller's receipt as to payment. A copy of the transcript of the proceedings authorizing the Series 2003 Bonds will be A-5 delivered to the Successful Bidder of the Series 2003 Bonds upon request. Copies of the form of such closing papers and certificates may be obtained from the City. Information Statement Section 218.38(1)(b)1, Florida Statutes requires that the City file, within 120 days after delivery of the Series 2003 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 2003 Bonds; (b) the name and address of any attorney or financial consultant who advised the City with respect to the Series 2003 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 2003 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 2003 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 2003 Bonds, to fumish the City with such information concerning the initial prices at which a substantial amount of the Series 2003 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 2003 Bonds as part of their bid in the following form: "The City of Clearwater, Florida, is proposing to issue $ original aggregate principal amount of Water and Sewer Revenue Refunding Bonds, Series 2003, for the purpose of paying (i) the costs of refunding the City's Water and Sewer Refunding Revenue Bonds, Series 1993, (ii) the costs of issuing the Series 2003 Bonds, and (iii) the premium on the Bond Insurance Policy, all as further described in Ordinance No. 6915-01. The final maturity date of the Series 2003 Bonds is December 1, 2018, and the Series 2003 Bonds are expected to be repaid over a period of fifteen (15) years. At a forecasted average interest rate of % per annum, total interest paid over the life of the Series 2003 Bonds will be $ . The source of repayment or security for this proposal is the Net Revenues (as defined in the Ordinance) and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 2003 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 Fbrida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 2003 Bonds." A-6 Legal Opinion The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant NEkr& 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 2003 Bonds is not includable in the gross income of individuals, however, interest on the Series 2003 Bonds will be included in the calculation of the alternative minimum tax liabilities of corporations. The Code contains other provisions that could result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series 2003 Bonds cr 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 2003 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 2003 Bonds on the cover of the Official Statement. Continuing Disclosure The City has covenanted to provide ongoing disclosure in accordance with Rule 15c2-12 of the Securities and Exchange Commission. See "Appendix D -- Form of Continuing Disclosure Certificate" attached to the Preliminary Official Statement. CUSIP Number It is anticipated that CUSIP identification numbers will be printed on the Series 2003 Bonds, but neither the failure to print such number on any Series 2003 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 2003 Bonds in accordance with its agreement to purchase the Series 2003 Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 2003 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. A-7 Copies of Documents . Copies ofthe Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form and further information which may be desired, may be obtained from the City's Financial Advisor, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853. Amendment and Notices Amendments hereto and notices, if any, pertaining to this offering shall be made through Thompson Municipal Market Monitor (TM3) or similar information distribution service. CITY OF CLEARWATER, FLORIDA /s/ Brian J. Aungst Mayor-Commissioner A-8 EXHIBIT B FORM OF SUMMARY NOTICE OF SALE CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds Series 2003 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: October 1, 2003 Time: 11:00 a.m., E.D.S.T. Bonds Dated: October 1, 2003 Maturities: Payable December 1 in the years and amounts as follows: Series 2003 Bonds Maturity 2004 2005 2006 2007 2008 2009 2010 Principal Amount* Maturi 2011 2012 2013 2014 2015 2016 2017 2018 Principal Amount* *Preliminary, subject to change Interest Payment Dates: Payable June 1 and December 1, commencing June 1, 2004. 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, William R. Hough & Co., 100 Second Avenue South, Suite 800, St. Petersburg, Florida 33701, Attn: Kevin Conitz: (727) 895 8853. The Preliminary Official Statement may be obtained after September 22, 2003 electronically through Image B-1 Master Financial Publishing Inc. at www.munios.com. B-2 EXI-IIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT C-1 EXHIBIT D CONTINUING DISCLOSURE CERTIFICATE D-1 EXHIBIT E COMMITMENT FOR MUNICIPAL BOND INSURANCE POLICY E-1 EXHIBIT F ESCROW DEPOSIT AGREEMENT F-I EXHIBIT G ADDITIONAL COVENANTS WITH BOND INSURER (a) "Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as follows: "Financial Security Assurance Inc., a New York stock insurance company, or any successor thereto or assignee thereof". (b) For transactions with a debt service reserve fund, the prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Fund. Notwithstanding anything to the contrary set firth in the Resolution, amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt service on the Bonds. (c) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds insured by it are entitled to take pursuant to the section or the article of the Resolution pertaining to defaults and remedies. Remedies of the Bondholders to include mandamus. (d) If acceleration is permitted under the Resolution, the maturity of Bonds insured by the Insurer shall not be accelerated without the consent of the Insurer and in the event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued, on such principal to the date of acceleration (to the extent unpaid by the Issuer). Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer's obligations under the Insurance Policy with respect to such Bonds shall be fully discharged. (e) No grace period for a covenant default shall exceed 30 days, nor be extended for more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults. (f) The Insurer shall be included as a third party beneficiary to Resolution No. 03-35 and the Bond Ordinance with respect to the Series 2003 Bonds. (g) Upon the occurrence of an extraordinary optional or special or extraordinary mandatory redemption in part, the selection of Bonds to be redeemed shall be subject to the approval of the Insurer. The exercise of any provision of the Resolution which permits the purchase of Bonds in lieu of redemption shall require approval of the Insurer wherein any Bond so purchased is not extinguished. (h) No modification or amendment to Resolution 03-35 and the Bond Ordinance with respect to the Series 2003 Bonds or any other transaction document including any underlying security agreement G-I (each a "Related Document") may become effective except upon obtaining the prior written consent of the Insurer. Copies of any modification or amendment to such Resolution and Bond Ordinanceor any other Related Document shall be sent to Standard & Poor's Credit Market Services ("S&P") and Moody's Investors Service, Inc. ("Moody's") at least 10 days prior to the effective date thereof. (i) The rights granted to the Insurer under Resolution No 03-35 and the Bond Ordinance with respect to the Series 2003 Bonds or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the Bondholders nor does such action evidence any position of the Insurer, positive or negative, as to whether Bondholder consent is required in addition to consent of the Insurer. (j) Only (1) cash, (2) non-callable direct obligations of the United States of America ("Treasuries"), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) pre-refunded municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively or (5) securities eligible for "AAA" defeasance under then existing criteria of S & P or any combination thereof, shall be authorized to be used to effect defeasance of the Bonds unless the Insurer otherwise approves. To accomplish defeasance the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant as shall be acceptable to the Insurer ("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Insurer), and (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are no longer "Outstanding" under the Resolution; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer and the Insurer. The Insurer shall be provided with final drafts of the above-referenced documentation not less than five business days prior to the funding of the escrow. Bonds shall be deemed "Outstanding" under the Bond Ordinance unless and until they are in fact paid and retired or the above criteria are met. (k) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Resolution and shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Resolution. The Resolution shall not be discharged unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. (1) The Issuer to covenant and agree to take such action (including, as applicable, filing of UCC financing statements and continuations thereof) as is necessary from time to time otherwise preserve the priority of the pledge of Trust Estate under applicable law. (m) Claims Upon the Insurance Policy and Payments by and to the Insurer. G-2 If, on the third Business Day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required. under the Resolution, moneys sufficient to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall give notice to the Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. In the event the claim to be made is for a mandatory sinking fund redemption installment, upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected Bondholders who surrender their Bonds a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered. The Paying Agent shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal paid in respect of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy the Paying Agent shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the "Policy Payments Account! 'and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Bondholders in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything to the contrary otherwise set forth in the Resolution and to the extent permitted by law, in the event amounts paid under the Insurance Policy are applied to claims for payment of principal of or interest on the Bonds, interest on such principal of and interest on such Bonds shall accrue and be payable from the date of such payment at the G-3 greater of (i) the per annum rate of interest, publicly announced from time to time by JP Morgan Chase Bank or its successor at its principal office in the City of New York, as its prime or base lending rate plus 3%, and (ii) the then applicable rate of interest on the Bonds provided that in no event shall such rate exceed the maximum rate permissible under applicable usury or similar laws limiting interest rates. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer. (n) The Insurer shall, to the extent it makes any payment of principal of (or, in the case of Capital Appreciation Bonds, accreted value) or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy. The obligations to the Insurer shall survive discharge or termination of the Related Documents. (o) The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses which the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Resolution or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Resolution or any other Related Document whether or not executed or completed, (iv).the violation by the Issuer of any law, rule or regulation, or any judgment, order or decree applicable to it or (v) any litigation or other dispute in connection with the Resolution or any other Related Document or the transactions contemplated thereby, other than amounts resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Resolution or any other Related Document. (p) The application of funds realized upon default shall be applied to payment of expenses of the Issuer or rebate only after the payment of debt service due and past due on the Bonds, together with replenishment of the Debt Service Reserve Fund. (q) The Insurer shall be entitled to pay principal (or, in the case of Capital Appreciation Bonds, accreted value) or interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of acceleration of the maturity thereof in accordance with the Resolution, whether or not the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy. (r) The notice address of the Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York, New York 10022-6022, Attention: Managing Director-Surveillance, Re: Policy No. Telephone: (212) 826-0100; Telecopier: (212) 339-3556. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate "URGENT MATERIAL ENCLOSED." (s) The Insurer shall be provided with the following information: G-4 (i) Annual audited financial statements within 150 days after the end of the Issuer's fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Resolution), and the Issuer's annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time; (ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds; (iii) Notice of any default known to the Issuer within five Business Days after knowledge thereof, (iv) Prior notice of the advance refunding or redemption of any of the Bonds, including the principal amount, maturities and CUSIP numbers thereof; (v) Notice of the resignation or removal of the Paying Agent and Bond Registrar and the appointment of, and acceptance of duties by, any successor thereto; (vi) Notice of the commencement of any proceeding by or against the Issuer commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Bonds; (viii) A full original transcript of all proceedings relating to the execution of any amendment or supplement to the Related Documents; and (ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents. (t) Notwithstanding satisfaction of other conditions to the issuance of Additional Bonds contained in the Resolution, no such issuance may occur (1) should any Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) have occurred and be continuing unless such default shall be cured upon such issuance and (2) unless the Debt Service Reserve Fund is fully funded at its requirement (including the new issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer. (u) No contract shall be entered into nor any action taken by which the rights of the Insurer or security for or sources of payment of the Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer. (v) If the proceeds of the Bonds include a refunding there shall be delivered an opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating thereto) or a certificate of discharge of the trustee for the Refunded Bonds to the effect that, upon the making of the required deposit to the escrow, the legal defeasance of the Refunded Bonds shall have occurred. G-5 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 $ [Bond Amount] Water and Sewer Revenue Bonds, Series 2010 (the "Series 2010 Bonds. The Series 2010 Bonds are being issued pursuant to Ordinance No. 3674-84 enacted by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 6915-01, enacted November 15, 2001 (collectively, the "Ordinance") and as further supplemented by Resolution 10-25, adopted by the City on November 4, 2010, as supplemented (the "Series 2010 Resolution"). 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 2010 Bondholders and in order to assist the original underwriters of the Series 2010 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 City shall provide to the Municipal Securities Rulemaking Board (the "MSRB"), in the manner described in Section 5 hereof, to any state information depository that is established within the State of Florida and with which the City is legally required to file the information set forth herein (the "SID"), it being understood that no such SID is currently established in the State of Florida, on or before April 30 of each year, commencing April 30, 2011 with the report for the 2010 Fiscal Year, the information set forth below in this Section 3. Notwithstanding the immediately preceding sentence, to the extent any such information does not become available to the City before April 30 of any year, the City shall provide such information when it becomes available, but no later than one year following the end of the City's Fiscal Year. (A) the City's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR"), which shall include the audited financial statements of the City 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 City are not completed prior to April 30 of any 1 year, the City 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 2010 Bonds (as amended, the "Official Statement"), as set forth below: 1. Updates of the historical financial information set forth in the Official Statement under the principal captions "THE WATER AND SEWER SYSTEM" for the then-immediately preceding five fiscal years and " APPENDIX G - SCHEDULE OF RATES, FEES AND CHARGES." 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 2010 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 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 2010 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series 2010 Bonds: (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on the debt service reserve fund reflecting financial difficulties; (D) Unscheduled draws on credit enhancement reflecting financial difficulties; 2 (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the Series 2010 Bonds; (G) Modifications to rights of Series 2010 Bondholders; (H) Calls on the Series 2010 Bonds; (I) Defeasance of the Series 2010 Bonds; (J) Release, substitution, or sale of property securing repayment of the Series 2010 Bonds; (K) Rating changes; and (L) Notice of any failure on the part of the City or any other Obligated Person (as defined herein) to meet the requirements of Section 3 hereof. The City 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 4, if, in the judgment of the City, such other events are material with respect to the Series 2010 Bonds, but the City 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 City obtains knowledge of the occurrence of a significant event described in this Section 4, the City shall as soon as possible determine if such event would be material under applicable federal securities law to holders of Series 2010 Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. SUBMISSION OF INFORMATION TO THE MSRB. The information required to be disclosed pursuant to Sections 3 and 4 of this Disclosure Certificate shall be submitted to the MSRB through its Electronic Municipal Market Access system ("EMMA"). Subject to future changes in submission rules and regulations, such submissions shall be provided to the MSRB, through EMMA, in portable document format ("PDF") files configured to permit documents to be saved, viewed, printed and retransmitted by electronic 3 means. Such PDF files shall be word-searchable (allowing the user to search for specific terms used within the document through a search or find function available in a software package). Subject to future changes in submission rules and regulations, at the time that such information is submitted through EMMA, the City, or any dissemination agent engaged by the City pursuant to Section 7 hereof, shall also provide to the MSRB information necessary to accurately identify: (A) the category of information being provided; (B) the period covered by the CAFR and any additional financial information and operating data being provided; (C) the issues or specific securities to which such submission is related or otherwise material (including CUSIP number, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); (D) the name of any Obligated Person other than the City; (E) the name and date of the document being submitted; and (F) contact information for the submitter. SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision in the Ordinance to the contrary, failure of the Issuer to comply with the provisions of this Disclosure Certificate shall not be considered an event of default under the Ordinance; provided, however, any Series 2010 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 2010 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 2010 Bonds (including persons holding Series 2010 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2010 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 4 from other documents, including official statements or debt issues of the Issuer of related public entities, which have been submitted to the MSRB 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 2010 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. 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. 5 SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series 2010 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 this [ ] day of November, 2010 ATTEST: CITY OF CLEARWATER, FLORIDA By: City Clerk By: Mayor 6 APPENDIX E FORM OF BOND COUNSEL OPINION APPENDIX F FISCAL YEAR 2009 WATER AND WASTEWATER REVENUE SUFFICIENCY ANALYSIS (RATE STUDY) BURTON AssocIATES, Utility & Governmental Economics Consultants Clearwater 0CITY E LEARWATER C June 5, 2009 EJ BURTON & ASSOCIATES June 5, 2009 Ms. Tracy Mercer Public Utilities Director City of Clearwater 1650 N. Arturas Avenue Clearwater, Florida 33765 Re: FY 2009 Water & Wastewater Revenue Sufficiency Analysis - Final Report Dear Ms. Mercer: Burton & Associates is pleased to present this Final Report of the FY 2009 Revenue Sufficiency Analysis that we have performed for the City's Water and Wastewater Enterprise Fund. We appreciate the fine assistance provided by you, your staff and all of the members of City staff who participated in the analysis. If you have any questions, please do not hesitate to call me at (904) 247-0787. Very truly yours, Andrew J. Burnham Senior Vice President BURTON & Assocmws 200 Business Park Circle, Suite 101 • St. Augustine, Florida 32095 • Phone (904) 247-0787 • Fax (904) 241-7708 E-mail: aburnham@burtonandassociates.com FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS TABLE OF CONTENTS TABLE OF CONTENTS SECTION 1. INTRODUCTION ........................................................................................................... 1 1.1 OBJECTIVE AND SCOPE .............................................................................................................. 1 1.2 STUDY PROCEDURES ................................................................................................................. I SECTION 2. ANALYSIS ....................................................................................................................... 3 2.1 DESCRIPTION ............................................................................................................................. 3 2.2 ASSUMPTIONS ............................................................................................................................4 2.3 RESULTS .................................................................................................................................... 7 SECTION 3. CONCLUSIONS & RECOMMENDATIONS ............................................................ 10 3.1 CONCLUSIONS ..........................................................................................................................10 3.2 RECOMMENDATIONS ................................................................................................................10 APPENDIX ................................................................................................................................................. 12 BURTON & ASSOCIATES City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS INTRODUCTION SECTION 1. INTRODUCTION This report presents the results of the FY 2009 Revenue Sufficiency Analysis (RSA) Update which was conducted for the City's Water and Wastewater Utility System (Utility). This RSA was based upon a projection period of FY 2009 through FY 2019. This section presents the objective and scope of the RSA and the procedures employed in the conduct of the RSA, while Section 2 presents the results and supporting schedules, and Section 3 presents the conclusions and recommendations of the RSA. 1.1 OBJECTIVE AND SCOPE The objective of this RSA was to evaluate the sufficiency of the Utility's current plan of approved annual water and wastewater rate increases and identify subsequent future increases that would provide sufficient revenues to fund the Utility's cost requirements over the entire projection period, while recognizing the effects of price elasticity, increasing reclaimed water usage, reductions to potable water usage, and increasing purchased water costs. The current approved plan of annual water and wastewater rate increases is identified in the following table. It is important to note that the water rate increases are applied to irrigation rates as well as reclaimed water rates. Currently Approved Rate Adjustment Plan FY 2010 FY 2011 FY 2012 FY 2013 Water 7.00% 7.00% 6.00% 6.00% Wastewater 7.00% 7.00% 6.00% 6.00% 1.2 STUDY PROCEDURES During the conduct of this RSA, we evaluated the Utility's financial management plan by examining the impact of key parameters (such as price elasticity, increasing reclaimed water usage, increasing purchased water costs, additional operating expenses, etc.) upon important financial indicators by use of graphical representations projected on a large BURTON & ASSOCIATES 1 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS INTRODUCTION viewing screen from our computer rate models. In this way, we evaluated the adequacy of the Utility's current plan of annual rate increases to provide sufficient revenues to fund the Utility's cost requirements through FY 2013 and identified annual increases in the remaining years of the projection period that would meet the financial requirements, goals, and objectives of the Utility. In order to initiate the RSA, we obtained the Utility's historical and budgeted financial information regarding the operation of the Water and Wastewater Enterprise Fund. We also obtained the Utility's multi-year capital improvement program (CIP) and the Utility's current debt obligations and the covenants, or promises made to bond holders or other lenders, relative to net income coverage requirements, reserves, etc. We also counseled with City staff regarding other assumptions and policies that would affect the Water and Wastewater Enterprise Fund such as required levels of reserves, interest earnings rates, escalation rates for operating costs, increases to wholesale water costs, etc. All of this information was entered into our Financial Analysis and Management System (FAMS) interactive model. The FAMS model produces a multi-year projection of the sufficiency of the Utility's revenues to meet all of its current and projected financial requirements and determines the level of rate revenue increases necessary in each year to provide sufficient revenues to fund all of the Utility's requirements. FAMS also utilizes all available and unrestricted funds in each year of the projection period to pay for capital projects, in accordance with the cash application rules in the model as defined with City staff. This produces a detailed summary of the funding sources to be used for each project in the CIP. To the extent that current revenues and unrestricted reserves are not adequate to fund all capital projects in any year of the projection period, the FAMS model identifies a borrowing requirement to fund those projects or portions thereof that are determined to be eligible for borrowing. In this way the FAMS model is used to develop a borrowing program that includes the required borrowing amount by year and the resultant annual debt service obligations of the Utility for each year in the projection period. BURTON & ASSOCIATES 2 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS SECTION 2. ANALYSIS This section presents the results of the analysis and the financial management plan developed during the conduct of this RSA. The first sub-section presents a description of the RSA, while the second sub-section outlines the assumptions, funding strategies, and adjustments of the RSA. The third sub-section provides the results of the RSA, while the Appendix includes detailed financial analysis schedules supporting the financial management plan identified herein. 2.1 DESCRIPTION The RSA was performed using the Utility's historical and projected information. The Utility's Comparative Balance Sheet and Restricted Asset Statement for September 30, 2008 provided the historical financial information used to establish the beginning FY 2009 balances for each of the various funds. It is important to note that funds reserved or encumbered for specific capital projects were included in the beginning fund balances available for capital projects in FY 2009 and the associated capital project costs were included in the capital improvement plan in FY 2009. The revenues utilized in the RSA reflect a combination of estimated FY 2009 results and the FY 2009 Budget amounts. Revenues consist of water (including irrigation) and wastewater rate revenues and all other categories of revenue. Estimated FY 2009 water and wastewater rate revenue was based upon actual FY 2008 results adjusted to reflect a reduced number of accounts and usage due to current economic conditions (4.5%) and applicable rate increases (6% for each service). Each year thereafter, rate revenues are based upon additional revenue generated from assumed rate increases and customer growth. All other non-rate revenues were based upon the FY 2009 Budget and escalated annually based upon the escalation factors provided by staff FY 2009 (excluding reclaimed water revenues, which were calculated annually based upon the number of connections, assumed usage, and rates in each fiscal year). BURTON & ASSOCIATES 3 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS The projection of interest earnings on invested funds (including funds dedicated for CIP projects) was calculated in FAMS based upon a computation of average fund balances in each year of the analysis. The FY 2009 revenue requirements are based principally upon the FY 2009 Budget (reflecting mid-year amendments), which includes all operating & maintenance (O&M) expenses, other miscellaneous expenses, debt service requirements, and inter-fund transfers. In subsequent years of the analysis, expenses were escalated based upon the escalation factors for individual expense categories as provided by and discussed with City staff. Future O&M expense adjustments, not included in the FY 2009 Budget, were provided by staff. Annual CIP costs as provided by staff were included in the analysis and are presented on Schedule 3 of the Appendix. 2.2 ASSUMPTIONS During the conduct of the RSA, we communicated with City staff regarding various assumptions used in the development of the financial management plan presented herein. The assumptions, base data, and adjustments included in the RSA are as follows: Revenues and Expenses - Water and wastewater rate revenue projections are based upon FY 2009 estimated revenues (FY 2008 actual revenues, less 1.5% to reflect current economic conditions, and adjusted for the 6% rate increase implemented for FY 2009) adjusted annually by applicable rate increases and growth projections. Interest earnings were calculated based upon average annual fund balances, while all other revenues (excluding reclaimed water revenue) are based upon the Utility's FY 2009 Budget. O&M expense projections were based upon the FY 2009 Budget (reflecting mid-year amendments), escalated by the appropriate cost escalation factors as provided by and discussed with City staff (identified on Schedule 1 of the Appendix). O&M Cost Additions - In addition to the base budgeted amounts of O&M expenses, incremental operating costs have been included in the RSA, mainly relating to additional OPEB accruals and water supply and treatment expenses associated with planned facility BURTON & ASSOCIATES 4 City of Clearwater Utility& Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS expansions. The complete list of all additional/incremental O&M costs not included in the Utility's FY 2009 Budget that were included in the RSA are shown on Schedule 6. Payment in Lieu of Taxes Calculation - The annual calculation of the payment in lieu of taxes transfer is based upon 5.50% of the prior year's total operating revenues in each year of the projection period. Cost Escalation - Annual cost escalators for the various types of O&M expenses were provided by City staff and applied in each year of the projection period beginning in FY 2010. Furthermore, the specific additions to the O&M costs not included in the budget were escalated each year based upon the appropriate cost escalator. A summary of the specific cost escalation factors are displayed in Schedule 1 of the Appendix. Increases in Pinellas County Water Rates - For purposes of this analysis, it is assumed that Pinellas County wholesale water rates charged to the City will increase by 8% in FY 2010, 15% per year in FY 2011 and FY 2012, and then by 3% annually thereafter. Borrowing Assumptions - To the extent that the FAMS model determines that new debt is required in any year of the projection period, it would carry the following terms: Long-Term Debt: ? Term: 30 Years ? Interest Rate: 5.50% in each year of the projection period. Interim Financing: ? Term: 20 Years ? Interest Rate: 4.00% in each year of the projection period. Debt Service Payment Schedule - All future revenue bond issues, as calculated by FAMS, are assumed to be issued at the start of the fourth quarter of the fiscal year. As a result, only 3 months of interest payments are projected to occur in the fiscal years in which bonds are issued. All subsequent years reflect full annual principal and interest payments. BURTON & ASSOCIATES 5 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS Interim Financing - The analysis assumes the use of interim financing in FY 2010 and every other year thereafter; while, it assumes long-term borrowing (revenue bonds), are issued in FY 2009 and every other year thereafter. All interim financing issues are assumed at the beginning of the fiscal year and are refinanced in the subsequent year as part of the long-term borrowing. Until refinanced as part of the subsequent bond issue, the only carrying costs for the interim financing are interest-only payments (which would be for one full year plus three quarters of the year in which bonds are issued). Total Demand and Purchased Water Expenses - The total forecasted demand that is purchased by the City is assumed to be approximately 9 million gallons per day (MGD) in FY 2009. However, there are several projects in the CIP that seek to reduce the City's reliance on Pinellas County's Water Supply. These projects reduce demand throughout the projection period such that by FY 2014 the City plans to purchase about 3.5 MGD. The purchased amount is multiplied against the projected wholesale water rate of Pinellas County in order to determine the annual purchased water expense that is incorporated into the FAMS model. Price Elasticity - This adjustment is incorporated into the FAMS model to reflect that as rates increase, discretionary water usage will likely decline. Therefore, in order to generate sufficient revenue, projected rate increases will have to be adjusted to reflect a smaller revenue base to which they will be applied, thus causing the projected rate increases to be larger. The price elasticity adjustment reduces all usage revenues by the product of the annual rate increase and the annual assumed elasticity coefficient. In FY 2010 the coefficient is 0.30, and is reduced annually by 10% (down to 0.12 in FY 2019) to reflect a reduction in the amount of discretionary usage that will decline in response to increases in price. Reclaimed Water Use Revenue Impacts - This adjustment affects purchased water expense projections and revenue calculations. As reclaimed water usage increases, there will be a reduction in total demand on the system and a corresponding reduction in the amount of water that has to be purchased. However, there will also be a reduction in all water, wastewater, and lawn irrigation usage revenues as they are replaced by lower BURTON & ASSOCIATES 6 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS revenues from reclaimed water customers. The net effect of these reclaimed water impacts causes projected rate increases to be larger. Growth - Water and wastewater growth is assumed to be 0% in FY 2010 and then 0.4% in all remaining years of the projection period. Growth in lawn irrigation is negative due to the planned expansion of the reclaimed water program in the service area. The growth for lawn irrigation revenue is -7.92% in FY 2009, -11.02% in FY 2010, -7.77% in FY 2011, and slightly greater than 4% in FY 2012 and each year thereafter. The reduction in lawn irrigation accounts is based upon specific developments that are planned to be served with reclaimed water that currently have lawn irrigation meters. Minimum Working Capital - The plan assumes that the Utility will maintain a minimum Working Capital Reserve fund balance in an amount equal to three months of O&M and purchased water expenses. Capital Projects Funding - The CIP was provided by City staff through FY 2015. Beginning in FY 2016, unspecified future capital projects were projected based upon the average annual CIP spending for the preceding five years. Debt Service Coverage - There are two debt service coverage tests in the Utility's outstanding bond covenants as follows: • Rate Covenant -Net income must beat least 1.15 times annual debt service. • Parity Test - Net income must be at least 1.20 times maximum annual debt service (only in years when revenue bonds are issued). 2.3 RESULTS As previously stated, the objective of this RSA was to evaluate the sufficiency of the Utility's current plan of annual water and wastewater rate increases and identify subsequent future increases that would provide sufficient revenues to fund the Utility's cost requirements over the entire projection period, while meeting the financial performance goals and objectives of the Utility. BURTON & ASSOCIATES City of Clearwater Utility& Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS The current approved plan of annual water and wastewater rate increases is included in the table below. The water rate increases are also applied to irrigation rates and reclaimed water rates. Currently Approved Rate Adjustment Plan FY 2010 FY 2011 FY 2012 FY 2013 Water 7.00% 7.00% 6.00% 6.00% Wastewater 7.00% 7.00% 6.00% 6.00% It was determined that the current plan of annual water and wastewater rate increases identified in the table above would provide adequate revenue to meet the Utility's cost, debt service coverage, and reserve requirements' through FY 2013. Subsequent to the approved plan of rate increases, the Utility would then only require annual rate increases of 4.50% per year for the remainder of the projection period. 2.3.1 Financial Results of Operations and Sources and Uses of Funds The Appendix presents Schedules 1 through 13 that support the financial management plan identified in this report. The schedules presented in the Appendix reflect a projection period that extends through FY 2019. While the immediate five-year period is most important, our analysis extends beyond this time period so that any significant costs or revenue shortfalls just outside of the first five years may be identified and potentially addressed in the current RSA to avoid future financial harm and adverse rate impacts to customers. Schedules 1 through 6 present detailed schedules of the inputs and assumptions utilized in the RSA. Schedule 1 contains the assumptions of the analysis, while Schedule 2 contains the end of FY 2008 fund balances that serve as the FY 2009 beginning balances of our analysis. Schedule 3 provides a listing of the CIP that was utilized in this analysis. Schedules 4 and 5 contain a detailed list of all projected cash inflows and outflows respectively from FY 2009 through FY 2019. ' In FY 2012, FY 2013, and FY 2018 the operating reserves of the Utility fall slightly below the working capital reserve target. However, given the Utility's historical capital spending at levels less than the annual CIP budget as well as annual operational performance better than budgeted/forecasted, it is unlikely that operating reserves will actually be below the working capital reserve requirement. Nevertheless, the City will perform annual revenue sufficiency analysis updates and if at that time it appears that actual reserves will be less than the requirement, adjustments will be made in other areas of the financial plan. BURTON & ASSOCIATES $ City of Clearwater Witty & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS ANALYSIS Schedules 7 thru 13 identify the results of the financial management plan presented herein. Schedule 7 contains the FAMS Control Panel that presents a summary of the financial management plan, including annual rate increases, debt service coverage ratios, total CIP spending levels, customer impacts, and fund balances. Schedule 8 is the Pro Forma schedule that presents a projected income statement, debt service coverage analysis, and cash flow analysis. Schedule 9 shows the funding sources utilized to pay for CIP spending levels on Schedule 3. Schedule 10 contains the calculation of projected annual long-term borrowing, while Schedule 11 contains the calculation of projected interim financing amounts that are subsequently refinanced as part of future projected long-term borrowings. Schedule 12 contains the calculation of projected annual short- term borrowing, and Schedule 13 presents a fund-level cash flow reconciliation, providing the beginning balance in each year, the amount utilized for project funding or payment of debt service, interest calculations, and the end of year fund balance. BURTON & ASSOCIATES 9 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS CONCLUSIONS & RECOMMENDATIONS SECTION 3. CONCLUSIONS & RECOMMENDATIONS This section presents the conclusions and recommendations of the RSA: 3.1 CONCLUSIONS We have reached the following conclusions regarding the sufficiency of the City's water and wastewater rates over the projection period: • Based upon the assumptions and supporting data described in Section 2.2, the current plan of annual water and wastewater rate increases through FY 2013 should generate sufficient revenue to fund the Utility's system requirements during that time, including annual operating requirements and CIP expenditures, existing and new debt service, and adequate working capital reserves.z • In FY 2014 and thereafter, 4.5% annual water, irrigation, reclaimed water, and wastewater rate increases should generate sufficient revenue to fund the Utility's cost requirements for the remainder of the projection period, while meeting the financial performance goals and objectives of the Utility. 3.2 RECOMMENDATIONS Based upon the analysis presented herein and the conclusions presented in the prior subsection, we recommend the following: • The City should continue with its currently adopted plan of annual water and wastewater rate increases through FY 2013 and consider adopting annual water and wastewater increases of 4.5% per year each year thereafter. • We strongly recommend that the City continue to review the financial performance of the Utility on an annual basis and evaluate the adequacy of its 2 In FY 2012, FY 2013, and FY 2018 the operating reserves of the Utility fall slightly below the working capital reserve target. However, given the Utility's historical capital spending at levels less than the annual CIP budget as well as annual operational performance better than budgeted/forecasted, it is unlikely that operating reserves will actually be below the working capital reserve requirement. Nevertheless, the City will perform annual revenue sufficiency analysis updates and if at that time it appears that actual reserves will be less than the requirement, adjustments will be made in other areas of the financial plan. BURTON & ASSOCIATES 10 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS CONCLUSIONS & RECOMMENDATIONS revenues and current plan of rate increases. Doing so will allow for the recognition of updated revenue and expense information and changes in economic conditions so that any necessary adjustments can be to planned rate increases in order to allow the Utility to meet its requirements during the projection period and minimize rate impacts to customers from future events occurring differently than currently projected. BURTON & ASSOCIATES 11 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS APPENDIX Appendix Supporting Schedules for the Revenue Sufficiency Analysis BURTON & ASSOCIATES 12 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 1- Assumptions APPENDIX Description: FY 2009 FY 2010 FY 2011 FY 2012 - FY 2019 INTERNAL SERVICE CHARGE CODES Inflationary cost escalator for expenses N/A 3.00/0 o 3.00/0 0 3.00/o 0 510100 540300 542700 545100 552500 (unless other escalator is specified) 510500 540500 542800 546200 557100 Internal Service Charges cost escalator N/A 3.00% 3.00% 3.00% 520100 540600 542900 547100 557200 Salary cost escalator N/A 2.50% 2.50% 3.00% 520200 551500 543100 547200 557300 Health insurance cost escalator N/A 0.00% 0.00% 0.00% 520300 540900 543200 547300 564000 EMP Pension Plan (% of Salaries) NA, 13.00% 20.00% 30.00% 520400 541000 543400 547400 571300 PILOT (% of Current Year Operating Rev) N/A 5.50% 5.50% 5.50% 520600 541100 543500 548000 572300 Elec-Util Charges N/A 6.00% 6.00% 6.00% 520700 541500 543600 550100 Interest earning rates: 520900 541600 544100 550400 Revenue account 3.00% 3.00% 4.00% 4.00% 590800 541800 Renewal & Replacement Account 3.00% 3.00% 4.00% 4.00% 530100 542000 Usage/Flow Revenue Adjustments: Bond funds (new issues) 3.00% 3.00% 4.00% 4.00% 530300 542100 Annual Factors: Rate of expenditure from capital funds: 540100 542300 Price Elasticity 0.30 Water & Sewer - CIP and Bond funds 24.00% 24.00% 24.00% 24.00% 540200 542500 Reclaimed Water Use 0.10 New Debt (Calculated by FAMS) Costs: Debt service reserve surety N/A Debt service reserve fund 1 Year of DS Capitalized interest to bond sinking fund N/A Underwriters discount $0.00 per $1000 Total costs of issuance 2.50% Cost of bond insurance 0 x DS Term of issuance 30 years Annual interest rate 5.50% Debt service Level Rev. Growth: FY 2009 FY 2010 FY 2011 FY 2012 - FY 2019 Water Growth: Usage Growth -1.50% 0.00% 0.40% 0.40% Fixed Growth -1.50% 0.00% 0.40% 0.40% Lawn Irrigation Growth: Usage Growth -7.92% -11.02% -7.77% -1.05% Fixed Growth -7.92% -11.02% -7.77% -1.05% Sewer Growth: Usage Growth -1.50% 0.00% 0.40% 0.40% Fixed Growth -1.50% 0.00% 0.40% 0.40% Working Capital Reserve Target 3 Months of O&M O&M FY 2009 - FY 2019 100.00% Capital FY 2009 100.00% FY 2010 - FY 2019 100.00% Required Coverages: Pinellas County Rate increases I I Parity test 1.20 FY 2010 FY2011 FY2012 FY2013 - FY2019 Rate covenant 1.15 Assumed Rate Incr.: 8% 15% 15% 3% Note: Wraparound debt service schedules at an annual cost of borrowing of 6.00% for projected revenue bond issues in FY 2009, FY 2011, and FY 2013 have been provided by Raymond James & Associates. To the extent FAMS calculates additional debt borrowing, the model assumes levelized debt service schedules at an annual cost of borrowing of 5.50%. BURTON & ASSOCIATES 13 City of Clearwater Utility& Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 2 - Beginning Balances APPENDIX FUND TITLE I iairzwa I Water Impact Fees $1,712,503 Sewer Impact Fees $5,749,444 Reclaimed Grant Funding $0 Renewal & Replacement Fund $0 Revenue Fund $26,763,811 Restricted Reserves $10,768,664 Total Consolidated Fund Balance $ 44,994,422 REVENUE FUND DETAIL CURRENT UNRESTRICTED ASSETS EOY - FY 2008 Cash & Cash Equivalents $250 Equity in Pooled Cash & Investments $15,189,981 Accounts Receivable, Net $4,658,793 Due From Other Funds $0 Due From Other Governmental Agencies $267,427 Inventories $693,746 Prepaid items $4,400 Total Current Unrestricted Assets $ 20,814,597 Less: Accounts and Contracts Payable ($2,177,378) Less: Accrued Payroll ($323,772) Less: Compensated Absences ($41,057) Less: Accrued Interest Payable ($95,236) Less: Due to Other Governmental Entities ($4,804) Less: Current Portion of LT Liabilities ($1,349,811) Total Unrestricted Working Capital $ 16,822,539 Less: Inventories ($893,746) Plus: Restricted Reserves Available For CIP $10,700,911 Net Unrestricted Working Capital Available $ 26,829,704 Restricted Assets Revenue Bond Debt Service and Sinking Fund Requirements $18,255,201 Customer Deposits $2,475,512 Due From Other Governmental Entities $0 Deferred Charges $0 Net Pension Asset $0 Advances to Other Funds $0 Total Noncurrent Restricted Assets $ 20,730,713 Less: Accrued Interest Payable ($1,265,040) Less: Current Portion of Long Tenn Liabilities, Revenue Bonds ($5,995,833) Less: Construction Contracts Payable ($225,664) Less: Customer Deposits ($2,475,512) Net Restricted Balance $ 10,768,664 Reserves Available For Capital Funding Assets in Utility Renewal & Replacement Fund Equity in Pooled Cash and Investments $ 8,909,436 Due from Capital knprovements Fund $ - Assets in 02 Bond Construction Fund Pooled Cash and Investments $ - Assets in 06 Bond Construction Fund Equity in Pooled Cash and Investments $ 1,650,511 Other Receivables (Overpayment to Contract) $ 140,964 Assets in 08 Bond Construction Fund Equity in Pooled Cash and Investments $ - Assets in Capital Improvements Fund Unspent Sewer Tap Fees $ Unspent Water Impact Fees $ - Due From Other Governmental Entities $ Total Reserves Available For Capital Funding $10,700,911 BURTON & ASSOCIATES 14 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 3 - Capital Improvement Program APPENDIX Prolect Description Water Total Water - Non Expansion Total Water Expansion Projects Beach Walk Beach Walk Downtown Streetscape Downtown Streetscape A/C Replacement A/C Replacement Roof Rpicmnts Painting of Facilities Flooring - Facilities Citywide Connect Citywide Aerial Photography Publ Util Admin Bldg R&R Publ Util Admin Bldg R&R System R&R-Maint System R&R-Maint Recl Wtr Dist Syst-Grants Recl Wtr Dist Syst Recl Wtr Dist Syst Recl Wtr Dist Syst Recl Wtr Dist Syst-Future Bds Water Supp-Trtmnt Water Supp-Trtmnt Water Supp-Trtmnt Water Supp-Trtmnt Syst R&R-Capitlzd Syst R&R-Capitlzd Line Reloc-Capitlzd Line Reloc-Capitlzd Line Reloc-Capitlzd Line Reloc-Capitlzd Line Reloc-Capitlzd-Future Bds Mtr/Back Flow Prev Dev Change Mtr/Back Flow Prev Dev Change Mtr/Back Flow Prev Dev Change-Fut Bds System Expnsn Well Rehab Well Rehab Water Sec Lines Water Sec Lines Water Sec Lines BURTON & ASSOCIATES Utility & Governmental Economics FY 2009 FY 2010 - FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 $ - $ - $ - $ - $ - $ - $ - $ 13,203,960 $ 13,305,682 $ 12,425,836 $ 11,330,736 $ - $ - $ - $ - $ - $ - $ - $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 175,543 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 23,277 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 23,415 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 35,000 $ - $ - $ - $ - $ - $ 24,478 $ $ $ $ $ $ $ $ $ $ $ - $ - $ 39,000 $ - $ - $ - $ - $ - $ - $ - $ - $ 25.000 $ 10,130 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 65, 000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 26,756 $ - $ 2,000 $ - $ - $ 2,000 $ - $ - $ - $ - $ - $ 18,204 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 52,866 $ 26,000 $ 26,000 $ 26,000 $ 26,000 $ 26,000 $ 26,000 $ - $ - $ - $ - $ 191,392 $ - $ - $ - $ 25,000 $ 25,000 $ 25,000 $ - $ - $ - $ - $ 990 $ 25,000 $ 25,000 $ 25,000 $ - $ - $ - $ - $ - $ - $ - $ 9,643,697 $ - $ 985,670 $ - $ - $ - $ - $ - $ - $ - $ - $ 635,546 $ - $ - $ 368,980 $ 1,160, 610 $ - $ - $ - $ - $ - $ - $ 2,900,996 $ $ $ - $ - $ $ $ $ $ $ $ 413,581 $ $ $ - $ - $ $ $ $ $ $ $ - $ 2,921,470 $ 1,649,150 $ 81,020 $ 3,189,390 $ 6,000,000 $ 3,271,258 $ - $ - $ - $ - $ 520,002 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 100,000 $ 300,000 $ 325,000 $ 325,750 $ 376,530 $ 378,820 $ 378,820 $ - $ - $ - $ - $ 93,480 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 300,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 942,346 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 556,946 $ 850,000 $ 239,300 $ 250,000 $ 250,000 $ 850,000 $ 650,000 $ $ $ $ $ 494,491 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,764,924 $ 234,340 $ 954,570 $ 250,000 $ 250,000 $ 1,000,000 $ - $ - $ - $ - $ - $ 3,507 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,454,952 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 165,660 $ 1,145,430 $ - $ - $ - $ 800,000 $ - $ - $ - $ - $ 376,972 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ - $ - $ - $ - $ 530,718 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 142,712 $ - $ - $ - $ - $ 1,221,951 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ - $ - $ - $ - $ 499,159 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 0 $ $ $ $ $ $ $ $ $ $ $ 9,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 228,026 $ $ $ $ $ $ $ $ $ $ $ 1,000,000 $ $ $ $ $ $ $ $ $ $ 15 City of Clearwater Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 3 - Capital Improvement Program APPENDIX Protect Description FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Water Water Svc Lines-Future Bds $ - $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ - $ - $ - $ - Fluodde in Wtr Syst $ 6,184 $ - $ - $ - $ - $ 200,000 $ - $ - $ - $ - $ - Fluoride in Wtr Syst-Future Bds $ - $ - $ - $ - $ - $ 1,307,590 $ - $ - $ - $ - $ - Ele%a Wtr Tk Upgd $ 122,434 $ $ $ $ $ $ $ $ $ $ Eleva Wtr Tk Upgd $ 648,128 $ $ $ $ $ $ $ $ $ $ Telemetry for Wells $ 389,048 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ ' Telemetry for Wells $ 119,620 $ $ $ $ $ $ $ $ $ $ Telemetry for Wells $ 227,990 $ - $ - $ - $ - $ - $ - $ - $ $ - $ ' Telemetry for Wells $ 198,853 $ $ $ $ $ $ $ $ $ $ Wellfield Expnsn $ 673,819 $ - $ - $ - $ - $ - $ - $ - $ $ $ - Wellfield Expnsn $ 894 $ $ $ $ $ $ $ $ $ $ Wellfield Expnsn $ 283,631 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Welifield Expnsn $ 2,582,370 $ $ $ $ $ $ $ $ $ $ RO Plant Expsn R1 $ 348,490 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - RO Plant Expsn R1 $ 3,599 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ ' RO Plant Expsn R1 $ 444,160 $ - $ - $ - $ - $ - $ - $ - $ $ $ - RO Plant Expsn R1 $ 4,903,790 $ - $ - $ - $ - $ - $ - $ - $ $ - $ - RO Plant Expsn R1-Future Bas $ - $ 2,236,250 $ 4,987,000 $ - $ - $ - $ - $ - $ - $ - $ ' Water Quality Mon Devices $ - $ - $ $ $ $ $ $ $ $ $ Water Quality Mon Dawes $ 591,745 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ ' Rvrs Osmosis Resv#2 $ - $ - $ - $ - $ 3,571,770 $ - $ - $ - $ - $ - $ - Rvrs Osmosis Resv#2 $ 5,454,420 $ - $ - $ - $ - $ - $ - $ - $ - $ $ ' Rvrs Osmosis @2 Resv#2-Fut Bds $ - $ 1,516,830 $ 1,117,230 $ 15,178,160 $ 7,852,040 $ - $ - $ - $ - $ - $ - Rebate- Well, Lake Pond, Idg Abatemnt $ 146,160 $ - $ - $ - $ 50,000 $ 50,000 $ 50,000 $ - $ - $ - $ - Rebate- Well, Lake Pond, Idg Abatemnt $ - $ 50,000 $ 50,000 $ 50,000 $ - $ - $ - $ - $ - $ - $ - Water CIP Sub-Total $ 41,462,550 $ 9,735,680 $ 12,945,350 $ 17,964,910 $ 18,151,340 $ 11,274,410 $ 6,943,790 $ 13,453,960 $ 13,555,682 $ 12,675,836 $ 11,580,736 BURTON & ASSOCIATES 16 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 3 - Capital Improvement Program APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Sewer Total Sewer- Non Expansion $ - $ - $ - $ - $ - $ - $ - $ 12,485,541 $ 13,307,851 $ 13,687,746 $ 15,095,023 Total Sewer Expansion Projects $ - $ - $ - $ - $ - $ - $ - $ 200,000 $ 200,000 $ 200,000 $ 200,000 WWTP Screw Pump Replacement $ 846,910 $ 302,950 $ - $ 157,390 $ 255,900 $ - $ - $ - $ - $ - $ - Bio Solids Trtmnt $ 733,438 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bio Solids Trtmnt $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bio Solids Trtmnt $ 3,431,721 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Odor Control $ 84,308 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Odor Control $ - $ 72,520 $ 149,940 $ - $ - $ - $ - $ - $ - $ - $ - WWTP Generator Replacements $ 226,792 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTPGeneratorReplacements $ 11,176 $ $ $ $ $ $ $ $ $ $ WWTP Generator Replacements $ 2,599,393 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP Gen Rplcmnts-Futr Bds $ - $ 1,000,000 $ $ $ $ $ 200,000 $ $ $ $ WWTP Headworks $ 95,643 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP Headworks $ 32,820 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP Headworks $ 5,245,485 $ $ $ $ $ $ $ $ $ $ WWTP New Presses $ 162,004 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP New Presses $ 528 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP New Presses $ 1,560,000 $ - -$ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP Aeration Improvements $ 3,897,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Liquid Disinfection $ 825,279 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Sanitary Sewer Extension $ 3,793,998 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 Sanitary Util Reloc $ 595,185 $ - $ - $ - $ 28,630 $ - $ 200,000 $ - $ - $ - $ - Sanitary Util Reloc $ 266,680 $ 463,710 $ 750,000 $ 250,000 $ 221,370 $ 500,000 $ - $ - $ - $ - $ - Sanitary Util Reloc $ 914,549 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Sanitary Util Reloc-Futr Bds $ - $ - $ - $ - $ - $ - $ 442,742 $ - $ - $ - $ - Laboratory Upgrd $ 114,597 $ 57,960 $ 59,700 $ 61,000 $ - $ - $ - $ - $ - $ - $ - Laboratory Upgrd $ 56,270 $ - $ - $ - $ 62,800 $ 64,700 $ 61,232 $ - $ - $ - $ - Facilities Upgrd & Impr $ 468,830 $ - $ - $ - $ 24,070 $ 645,750 $ - $ - $ - $ - $ - Facilities Upgrd & Impr $ 55,222 $ - $ - $ 995,430 $ 475,930 $ 396,280 $ - $ - $ - $ - $ - Facilities Upgrd & Impr $ 570,486 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Facilities Upgrd & Impr- Future Bds $ - $ 622,000 $ 500,000 $ - $ - $ 31,720 $ 738,236 $ - $ - $ - $ - BURTON & ASSOCIATES 17 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 3 - Capital Improvement Program APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Sewer WPC R&R $ 564,311 $ $ - $ - $ - $ - $ - $ - $ - $ - $ - WPC R&R $ 10,041 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WPC R&R $ 2,523,236 $ $ $ $ $ $ $ $ $ $ WPC R&R $ 185,817 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WPC R&R-Fut Bds $ - $ 1,176,030 $ 1,113,230 $ 1,912,460 $ 857,310 $ 480,000 $ 1,107,806 $ - $ - $ - $ - Sanitary Swr R&R $ 9,245 $ - $ - $ - $ - $ - $ - $S - $ - $ - $ - Sanitary SwrR&R $ 2,190,566 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Sanitary Swr R&R $ 150,873 $ $ $ $ $ $ $ $ $ $ Sanitary Swr R&R $ 4,591,250 $ $ $ $ $ $ $ $ $ $ Sanitary Swr R&R-Future Bds $ - $ 2,868,600 $ 3,765,000 $ 5,429,800 $ 4,271,800 $ 3,663,700 $ 3,999,780 $ - $ - $ - $ WWTP East Bypass & NE Pump $ 462,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - WWTP E. Bypass & NE Pump - Fut Bds $ - $ 1,548,400 $ $ $ - $ 40,000 $ $ $ $ $ WPC - Poll Stor Tk $ 15,227 $ - $ - $ - $ 8,550 $ 8,810 $ - $ - $ - $ - $ - WPC - PollStorTk $ 25,169 $ 7,880 $ 8,120 $ 8,300 $ - $ - $ - $ - $ - $ - $ - Pump Stn Rpicmnt $ 2,342,685 $ - $ $ - $ $ $ $ $ $ $ Pump Stn Rplcmnt $ 3,442,791 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Pump Stn Rplcmnt $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Pump Stn Rplcmnt-Future Bds $ - $ 1,110,000 $ 2,228,000 $ 2,794,000 $ 645,000 $ 1,465,000 $ 1,648,400 $ - $ - $ - $ - NE Thermal Dryers-Future Bds $ - $ - $ - $ - $ - $ 2,157,370 $ 10,497,315 $ - $ - $ - $ - WWTP UV Disinfect-Fut Bds $ - $ - $ - $ - $ - $ 1,823,260 $ 6,221,875 $ - $ - $ - $ - Total Projects $ 84,564,075 $ 19,465,730 $ 22,019,340 $ 30,063,290 $ 25,502,700 $ 23,051,000 $ 32,561,176 $ 26,639,501 $ 27,563,533 $ 27,063,582 $ 27,375,759 %of Budgeted CIP Projected to be Executed 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Projected $ to be Spent $ 84,664,076 $ 19,465,730 $ 22,019,340 $ 30,063,290 $ 25,502,700 $ 23,051,000 $ 32,561,176 $ 26,639,501 $ 27,563,533 $ 27,063,582 $ 27,375,769 BURTON & ASSOCIATES 18 City of Clearwater Utility & Governmental Economics Final Report Schedule 4 - Projection of Cash Inflows FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS APPENDIX City of Cl earwater, F lorida W ater & Wa stewater System Fin ancial Man agement Program Cash Inflows Projections of Revenue & Other Sources of Funds Protection Assumptions FY2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2016 FY 2019 Water Sales - Usage -1.50% 0.00% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% Water Sales - Fixed -1.50% 0.00% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% Lawn Irngation - Usage -7.92% -11.02% -7.77% -1.05% -1.14% -1.15% -1.16% -1.18% -1.19% -1.21% -1.22% Lawn Intgation - Fixed -7.92% -11.02% -7.77% -1.05% -1.14% -1.15% -1.16% -1.18% -1.19% -1.21% -1.22% Wastewater Sales - Usage -1.50% 0.00% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% Wastewater Sales - Fixed -1.50% 0.00% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% Annual Water Rate Increase Assumed 6.00% 7.00% 7.00% 6.00% 6.00% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% Annual Lavin Irrigation Rate Increase Assumed 6.00% 7.00% 7.00% 6.00% 6.00% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% Annual Wastewater Rate Increase Assumed 6.00% 7.00% 7.00% 6.00% 6.00% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% Rate Revenue Subiect to Growth & Rate Increase Water Sales -Usage 6 Fixed $ 21,018,321 $ 22,201,458 $ 23,572,185 $ 24,856,907 $ 26,231,343 $ 27,361,348 $ 28,552,263 $ 29,806,386 $ 31,126,186 $ 32,514,301 $ 33,973,540 Lawn Inigation Sales - Usage $ Fixed $ 3,110,379 $ 2,961,339 $ 2.922.312 $ 3,065,188 $ 3,212,123 $ 3,318,028 $ 3,426,959 $ 3,538,976 $ 3,654,135 $ 3,772,491 $ 3,894,100 Wastewater Sales - Usage b. Fixed $ 26,216,595 $ 27,747,040 $ 29,513,682 $ 31,166,884 $ 32,933,884 $ 34,384,315 $ 35,911,721 $ 37,519,151 $ 39,209,864 $ 40,987,329 $ 42,855,231 Total Rate Revenue Subject to Growth & Rate Increase $ 50,345,295 $ 52,909,838 $ 56,006,178 $ 59,088,979 $ 62,377,349 $ 65,063,691 $ 67,890,943 $ 70,864,513 $ 73,990,185 $ 77,274,122 $ 80,722,871 Other Operatind Revenue 343312 Water Service Charges $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 343313 Retail Reclaimed Water Sales $ 1,257,055 $ 1,569,763 $ 1,841,417 $ 1,980,652 $ 2,121,104 $ 2,239,139 $ 2,363,503 $ 2,494,524 $ 2,632,552 $ 2,777,951 $ 2,931,104 Wholesale Reclaimed Water Rexenue $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 $ 109,500 343322 Material & Water SerNce $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ 45,000 343324 Fire Line Detect Instilln $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 343351 Other Water Rewnue $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 343523 Wpc Fee Safety Harbor $ 1,202,000 $ 1,238,060 $ 1,275,202 $ 1,313,458 $ 1,352,862 $ 1,393,447 $ 1,435,251 $ 1,478,308 $ 1,522,658 $ 1,568,337 $ 1,615,387 343551 Other Sewer Revenue $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000 354555 Grease Ordinance Revenue $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 354556 Industrial Pretreatment $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 343321 Water Taps - Impact Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 343525 Sewer Taps - Impact Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 354104 Late Payment Fee $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 $ 271,000 354109 Pretreatment Permit Violations $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 362101 Rents-Commercial Property $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 362102 Rent/Lease Lend-Future Use $ 6,000 $ 6,000 $ e,000 $ 6,000 $ 6,000 $ 8,000 $ 6,000 $ 8,000 $ 6,000 $ 6,000 $ 6,000 364523 Insurance Proceeds -Other $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 365101 Sale Of Scrap $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 369416 Cap Labor-Water/Sewer $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 $ 180,000 369905 Workers Comp Reimburse $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 Total Other Operating Revenue $ 3,480,555 $ 3,829,323 $ 4,138,119 $ 4,315,610 $ 4,495,466 $ 4,654,087 $ 4,820,254 $ 4,994,333 $ 5,176,710 $ 5,367,788 $ 5,567,992 BURTON & ASSOCIATES 19 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 4 - Projection of Cash Inflows APPENDIX Projections of Revenue & Other Pr0iection Assumptions FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Non-Operatin0 Revenue/Other Sources of Funds Interest Earned on Invested Funds Interest Earned on Invested Funds $ 975,426 $ 800,163 $ 1,098,917 $ 1,140,623 $ 1,188,797 $ 1,272,728 $ 1,357,532 $ 1,437,705 $ 1,524,591 $ 1,603,827 $ 1,690,723 Interest Earned on Construction Fund 8 482,015 E 881,509 $ 1,010,696 $ 794,971 $ 823,608 E 783,958 $ 877,475 $ 872,642 $ 878,359 $ 847,208 $ 851,929 Less: Interim Financing Interest payments E $ (438,276) $ (328,707) $ (968,711) $ (726,533) b (680,617) E (510,463) $ (861,372) 8 (646,029) $ (905,081) $ (678,811) Total Interest Earned on Invested Funds $ 1,457,441 $ 1,243,396 $ 1,780,907 8 966,884 $ 1,285,872 $ 1,376,069 E 1,724,545 8 1,448,975 $ 1,756,921 $ 1,545,954 $ 1,863,640 Water Expansion Fees $ 79,800 $ $ 79,968 $ 80,288 $ 80,609 $ 80,931 $ 81,255 8 81,580 E 81,907 $ 82,234 8 82,563 Sewer Expansion Fees $ 140,510 $ - E 140,940 E 141,504 $ 142,070 $ 142,638 $ 143,209 E 143,781 $ 144,357 $ 144,934 $ 145,514 Future Bond Proceeds - FY 2009 Revenue Bond Issue (n $ 60,133,842 $ - $ - a - $ - $ - $ - $ - $ - $ - $ - Future Bond Proceeds - FY 2011 Revenue Bond issue lhl $ - $ - $ 34,678,500 $ - $ - $ - $ - $ - $ - $ - $ - Future Bond Proceeds - FY 2013 Revenue Bond issue ni $ - $ - $ E - $ 46,143,733 $ - $ - $ - $ - $ - $ - Capitalized Interest on New Borrowing $ 8 $ $ - $ - $ $ $ $ - $ $ - Total Non-Operating Revenue/Other Sources of Funds $ 61,811,593 $ 1,243,396 $ 36,680,315 $ 1,188,675 $ 47,652,283 $ 1,599,639 $ 1,949,009 $ 1,674,337 $ 1,983,185 $ 1,773,122 $ 2,091,917 Total Revenue $ 115,837,443 $ 57,982,556 $ 96,826,613 $ 64,593,264 E 114,525,098 $ 71,317,417 E 74,660,206 $ 77,533,183 $ 81,150,079 E 84,415,033 $ 88,382,780 Note: For FY 2009, all revenues are based upon FY 2008 actual results argusted for growth and rate increases. Reclaimed water sales an forecasted based upon assumed growth and application of the water A sower rate increases beginning In FY 2010. Interest Earnings an calculated each year based upon pro/acted fund balances f1) Future Bond Proceeds for revenue bonds Issued in FY 2009. FY 2011, and FY 2013 are per the debt service schedu/as provided by Raymond James A Associates. BURTON & ASSOCIATES 20 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX W & W t t City o t S f Clearw Fi i ater, Flori l M da P t a a ter as ewa er em ys nanc Cash Ou anage a tflows men rogr m FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Administration Personal Services 510100 Full Time Salaries & Wages $ 367,580 $ 376,770 $ 386,189 $ 395,843 $ 407,719 $ 419,950 $ 432,549 $ 445,525 $ 458,891 $ 472,658 $ 486,838 510500 Overtime $ 2,740 $ 2,809 $ 2,879 $ 2,951 $ 3,039 $ 3,130 $ 3,224 $ 3,321 $ 3,421 $ 3,523 $ 3,629 520100 Life Ins $2500 Empl & Pens $ 60 $ 62 $ 64 $ 66 $ 68 $ 70 $ 72 $ 74 $ 76 $ 78 $ 81 520200 1 % Life Insurance-Employee $ 390 $ 402 $ 414 $ 426 $ 439 $ 452 $ 466 $ 480 $ 494 $ 509 $ 524 520300 Samp Life Insurance $ 640 $ 659 $ 679 $ 699 $ 720 $ 742 $ 764 $ 787 $ 811 $ 835 $ 860 520400 Major Medicallns-Emp $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 520600 Social Security-Employee $ 16,330 $ 16,820 $ 17,324 $ 17,844 $ 18,380 $ 18,931 $ 19,499 $ 20,084 $ 20,686 $ 21,307 $ 21,946 520700 Emp Pension Plan $ 23,250 $ 49,345 $ 77,813 $ 107,674 $ 123,227 $ 126,924 $ 130,732 $ 134,654 $ 138,694 $ 142,854 $ 147,140 Additional Opeb Accrual $ 7,952 $ 8,191 $ 8,437 $ 8,690 $ 8,950 $ 9,219 $ 9,496 $ 9,780 $ 10,074 $ 10,376 $ 10,687 520900 Workers Compensation $ 2,510 $ 2,585 $ 2,663 $ 2,743 $ 2,825 $ 2,910 $ 2,997 $ 3,087 $ 3,180 $ 3,275 $ 3,373 521000 Disability Insurance $ 1,300 $ 1,339 $ 1,379 $ 1,421 $ 1,463 $ 1,507 $ 1,552 $ 1,599 $ 1,647 $ 1,696 $ 1,747 Total Personal Services $ 459,952 $ 496,181 $ 535,041 $ 575,557 $ 604,030 $ 621,035 $ 638,560 $ $56,591 $ 675,173 $ $94,312 $ 714,025 O&M Expenses 530100 Professional SeNces $ 100,000 $ 103,000 $ 106,090 $ 109,273 $ 112,551 $ 115,927 $ 119,405 $ 122,987 $ 126,677 $ 130,477 $ 134,392 552500 $750.5000 Mach & Equip $ 1,500 $ 1,553 $ 1,607 $ 1,663 $ 1,721 $ 1,782 $ 1,844 $ 1,908 $ 1,975 $ 2,044 $ 2,116 540200 Doc Repro & Print Shop Sic $ 1,000 $ 1,035 $ 1,071 $ 1,109 $ 1,148 $ 1,188 $ 1,229 $ 1,272 $ 1,317 $ 1,363 $ 1,411 540300 Telephone Service Variable $ 1,210 $ 1,252 $ 1,296 $ 1,342 $ 1,389 $ 1,437 $ 1,487 $ 1,539 $ 1,593 $ 1,649 $ 1,707 540500 Radio SwFixed $ 480 $ 497 $ 514 $ 532 $ 551 $ 570 $ 590 $ 611 $ 632 $ 654 $ 677 540600 Telephone S%c Fixed $ 600 $ 621 $ 643 $ 665 $ 689 $ 713 $ 738 $ 763 $ 790 $ 818 $ 846 5407DO Postal Service $ 1,030 $ 1,066 $ 1,103 $ 1,142 $ 1,182 $ 1,223 $ 1,266 $ 1,310 $ 1,356 $ 1,404 $ 1,453 540900 Risk Mgmt Service $ 1,310 $ 1,356 $ 1,403 $ 1,452 $ 1,503 $ 1,556 $ 1,610 $ 1,667 $ 1,725 $ 1,785 $ 1,848 541000Info Technology Charge $ 13,140 $ 13,600 $ 14,076 $ 14,569 $ 15,078 $ 15,606 $ 16,152 $ 16,718 $ 17,303 $ 17,908 $ 18,535 5432DO Other Promotion Acti\ity $ 1,500 $ 1,553 $ 1,607 $ 1,663 $ 1,721 $ 1,782 $ 1,844 $ 1,908 $ 1,975 $ 2,044 $ 2,116 541600 Bldg & Maint-Variable $ 200 $ 207 $ 214 $ 222 $ 230 $ 238 $ 246 $ 254 $ 263 $ 273 $ 282 542000 Employee Benefits-Fixed $ 930 $ 963 $ 996 $ 1,031 $ 1,067 $ 1,105 $ 1,143 $ 1,183 $ 1,225 $ 1,267 $ 1,312 542500 Postage $ 60 $ 62 $ 64 $ 66 $ 68 $ 70 $ 72 $ 74 $ 76 $ 78 $ 81 5428001nterfdOther ServChgs $ 49,090 $ 50,808 $ 52,586 $ 54,427 $ 56,332 $ 58,304 $ 60,344 $ 62,456 $ 64,642 $ 66,905 $ 69,246 5429001nterldAdminServChgs $ 93,220 $ 96,483 $ 99,860 $ 103,355 $ 106,972 $ 110,716 $ 114,591 $ 118,602 $ 122,753 $ 127,049 $ 131,496 543100 Advertising $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 544100 Equipt Rental $ 900 $ 927 $ 955 $ 983 $ 1,013 $ 1,043 $ 1,075 $ 1,107 $ 1,140 $ 1,174 $ 1,210 545100 Insurance $ 1,610 $ 1,658 $ 1,706 $ 1,759 $ 1,812 $ 1,866 $ 1,922 $ 1,980 $ 2,039 $ 2,101 $ 2,164 546100 Ofc Equip Sic & Repair $ 520 $ 536 $ 552 $ 568 $ 585 $ 603 $ 621 $ 640 $ 659 $ 678 $ 699 547100 Uniforms-Employee $ 1,860 $ 1,916 - $ 1,973 $ 2,032 $ 2,093 $ 2,156 $ 2,221 $ 2,288 $ 2,356 $ 2,427 $ 2,500 547200 Travel Expense-Emp $ 9,450 $ 9,734 $ 10,026 $ 10,326 $ 10,636 $ 10,955 $ 11,284 $ 11,622 $ 11,971 $ 12,330 $ 12,700 547300 Mileage Reimbursement $ 5,550 $ 5,717 $ 5,888 $ 6,065 $ 6,247 $ 6,434 $ 6,627 $ 6,826 $ 7,031 $ 7,241 $ 7,459 547400 Meals-Employee $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 548000 OtherSeruces Or Charges $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 550100Office Supplies $ 3,700 $ 3,811 $ 3,925 $ 4,043 $ 4,164 $ 4,289 $ 4,418 $ 4,551 $ 4,687 $ 4,828 $ 4,972 550400 Operating Supplies & Matls $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,800 $ 3,914 $ 4,032 557100 Memberships/Subs/LicEmp $ 23,740 $ 24,452 $ 25,186 $ 25,941 $ 26,720 $ 27,521 $ 28,347 $ 29,197 $ 30,073 $ 30,975 $ 31,905 5572DO Officl Recognition-Emp $ 60 $ 62 $ 64 $ 66 $ 68 $ 70 $ 72 $ 74 $ 76 $ 78 $ 81 557300 Training & Ref Employee $ 8,550 $ 8,807 $ 9,071 $ 9,343 $ 9,623 $ 9,912 $ 10,209 $ 10,515 $ 10,831 $ 11,156 $ 11,490 Total O&M Expenses $ 325,510 $ 336,101 $ 347,039 $ 368,335 $ 370,001 $ 382,049 $ 394,492 $ 407,342 $ 420,613 $ 434,319 $ 448,475 TOTAL ADMINISTRATION DEPARTMENTAL EXPENSES 785,462 832,282 882,080 933,892 974,032 1,003,085 1,033,042 1,063,933 1,095,786 1,128,631 1,162,500 BURTON & ASSOCIATES 21 City of Clearwater Utility& Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Wastewater Collection Personal Services 510100 Full Time Salaries & Wages $ 1,008,900 $ 1,034,123 $ 1,059,976 $ 1,086,475 $ 1,119,069 $ 1,152,641 $ 1,187,221 $ 1,222,837 $ 1,259,522 $ 1,297,308 $ 1,336,227 510500 Overtime $ 60,000 $ 61,500 $ 63,038 $ 64,613 $ 66,552 $ 68,548 $ 70,605 $ 72,723 $ 74,905 $ 77,152 $ 79,466 520100 Life Ins $2500 Empl & Pens $ 250 $ 258 $ 265 $ 273 $ 281 $ 290 $ 299 $ 307 $ 317 $ 326 $ 336 520200 1% Life Insurance-Employee $ 2,890 $ 2,977 $ 3,066 $ 3,158 $ 3,253 $ 3,350 $ 3,451 $ 3,554 $ 3,661 $ 3,771 $ 3,884 520300 Samp Life Insurance $ 90 $ 93 $ 95 $ 98 $ 101 $ 104 $ 107 $ 111 $ 114 $ 117 $ 121 520400 Major Medical Ins-Emp $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 $ 155,000 520600 Social Security-Employee $ 18,570 $ 19,127 $ 19,701 $ 20,292 $ 20,901 $ 21,528 $ 22,174 $ 22,839 $ 23,524 $ 24,230 $ 24,957 520700 Emp Pension Plan $ 130,500 $ 142,431 $ 224,603 $ 310,794 $ 355,686 $ 366,357 $ 377,348 $ 388,668 $ 400,328 $ 412,338 $ 424,708 Additional Opeb Accrual $ 22,954 $ 23,643 $ 24,352 $ 25,082 $ 25,835 $ 26,610 $ 27,408 $ 28,230 $ 29,077 $ 29,950 $ 30,848 520900 Workmans Compensation $ 41,810 $ 43,064 $ 44,356 $ 45,687 $ 47,058 $ 48,469 $ 49,923 $ 51,421 $ 52,964 $ 54,553 $ 56,189 Total Personal Services $ 1,440,964 $ 1,482,214 $ 1,594,451 $ 1,711,473 $ 1,793,736 $ 1,842,898 $ 1,893,535 $ 1,945,691 $ 1,999,412 $ 2,054,744 $ 2,111,736 O&M Expenses 530100 Professional Services $ 40,000 $ 41,200 $ 42,436 $ 43,709 $ 45,020 $ 46,371 $ 47,762 $ 49,195 $ 50,671 $ 52,191 $ 53,757 530300 Other Contractual Serv $ 6,500 $ 6,695 $ 6,896 $ 7,103 $ 7,316 $ 7,535 $ 7,761 $ 7,994 $ 8,234 $ 8,481 $ 8,735 540100 Garage Services $ 300,420 $ 309,433 $ 318,716 $ 328,277 $ 338,125 $ 348,269 $ 358,717 $ 369,479 $ 380,563 $ 391,980 $ 403,739 540200 Doc Repro & Print Shop Svc $ 700 $ 721 $ 743 $ 765 $ 788 $ 811 $ 836 $ 861 $ 887 $ 913 $ 941 540300 Telephone Service Variable $ 3,240 $ 3,337 $ 3,437 $ 3,540 $ 3,647 $ 3,756 $ _ 3,869 $ 3,985 $ 4,104 $ 4,227 $ 4,354 540500 Radio Svc-Fixed $ 10,170 $ 10,475 $ 10,789 $ 11,113 $ 11,446 $ 11,790 $ 12,144 $ 12,508 $ 12,883 $ 13,270 $ 13,668 540600 Telephone Svc Fixed $ 3,010 $ 3,100 $ 3,193 $ 3,289 $ 3,388 $ 3,489 $ 3,594 $ 3,702 $ 3,813 $ 3,927 $ 4,045 551500 Medical Supplies $ 100 $ 103 $ 106 $ 1D9 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 540900 Risk Mgmt Service $ 7,630 $ 7,859 $ 8,095 $ 8,338 $ 8,588 $ 8,845 $ 9,111 $ 9,364 $ 9,665 $ 9,955 $ 10,254 541000 Info Technology Charge $ 64,900 $ 66,847 $ 68,852 $ 70,918 $ 73,046 $ 75,237 $ 77,494 $ 79,819 $ 82,213 $ 84,680 $ 87,220 541100 Bldg & Maint Dept Sr Fx $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541500 Garage Variable $ 6,400 $ 6,592 $ 6,790 $ 6,993 $ 7,203 $ 7,419 $ 7,642 $ 7,871 $ 8,107 $ 8,351 $ 8,601 541600 Bldg & Maint-Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541800 Administrative Charge $ 568,070 $ 585,112 $ 602,665 $ 620,745 $ 639,368 $ 658,549 $ 678,305 $ 698,654 $ 719,614 $ 741,203 $ 763,439 542000 Employee Benefits-Fixed $ 5,420 $ 5,583 $ 5,750 $ 5,923 $ 6,100 $ 6,283 $ 6,472 $ 6,666 $ 6,866 $ 7,072 $ 7,284 542100 Telephone-Util Chgs $ 3,610 $ 3,718 $ 3,830 $ 3,945 $ 4,063 $ 4,185 $ 4,311 $ 4,440 $ 4,573 $ 4,710 $ 4,852 542200 Elec-Util Charges $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 542300 Gas,Water & Sanitation UII $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 542500 Postage $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 5427001nterid Svc Chg-Other Fund $ 42,090 $ 43,353 $ 44,653 $ 45,993 $ 47,373 $ 48,794 $ 50,258 $ 51,765 $ 53,318 $ 54,918 $ 56,565 5428001nterfd Other Serv Chgs $ 348,630 $ 359,089 $ 369,862 $ 360,957 $ 392,386 $ 404,158 $ 416,282 $ 428,771 $ 441,634 $ 454,883 $ 468,530 5429W Interfd Admin Service Chg $ 388,430 $ 400,083 $ 412,085 $ 424,448 $ 437,181 $ 450,297 $ 463,806 $ 477,720 $ 492,052 $ 506,813 $ 522,017 543100 Advertising $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 543200 Other Promotion Activity, $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 543400 Printing & Binding $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 543500 Dump Fee $ 13,900 $ 14,317 $ 14,747 $ 15,189 $ 15,645 $ 16,114 $ 16,597 $ 17,095 $ 17,608 $ 18,136 $ 18,680 543600 Taxes $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 544100 Equipt Rental $ 7,210 $ 7,426 $ 7,649 $ 7,879 $ 8,115 $ 8,358 $ 8,609 $ 8,867 $ 9,133 $ 9,407 $ 9,690 545100 Insurance $ 282,100 $ 290,563 $ 299,280 $ 308,258 $ 317,506 $ 327,031 $ 336,842 $ 346,947 $ 357,356 $ 368,077 $ 379,119 546200 Other Equip Svc & Repair $ 11,330 $ 11,670 $ 12,020 $ 12,381 $ 12,752 $ 13,135 $ 13,529 $ 13,934 $ 14,353 $ 14,783 $ 15,227 547100 Uniforms-Employee $ 7,750 $ 7,983 $ 8,222 $ 8,469 $ 8,723 $ 8,984 $ 9,254 $ 9,532 $ 9,817 $ 10,112 $ 10,415 547200 Travel Expense-Emp $ 5,000 $ 5,150 $ 5,305 $ 5,464 $ 5,628 $ 5,796 $ 5,970 $ 6,149 $ 6,334 $ 6,524 $ 6,720 547300 Mileage Reimbursement $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 547400 Meals-Employee $ 400 $ 412 $ 424 $ 437 $ 450 $ 464 $ 478 $ 492 $ 507 $ 522 $ 538 548000 Other Services Or Charges $ 600 $ 618 $ 637 $ 656 $ 675 $ 696 $ 716 $ 738 $ 760 $ 783 $ 806 550100 Office Supplies $ 4,000 $ 4,120 $ 4,244 $ 4,371 $ 4,502 $ 4,637 $ 4,776 _$ 4,919 $ 5,067 $ 5,219 $ 5,376 550400 Operating Supplies & Malls $ 190,000 $ 195,700 $ 201,571 $ 207,618 $ 213,847 $ 220,262 $ 226,870 $ 233,676 $ 240,686 $ 247,907 $ 255,344 552500 $7565000 Mach & Equip $ 7,430 $ 7,653 $ 7,882 $ 8,119 $ 8,363 $ 8,613 $ 8,872 $ 9,138 $ 9,412 $ 9,694 $ 9,985 557100 Memberships/Subs/Lic Emp $ 2,300 $ 2,369 $ 2,440 $ 2,513 $ 2,589 $ 2,666 $ 2,746 $ 2,829 $ 2,914 $ 3,001 $ 3,091 557200 Oficl Recognition-Emp $ 250 $ 258 $ 265 $ 273 $ 281 $ 290 $ 299 $ 307 $ 317 $ 326 $ 336 557300 Training & Ref Employee $ 10,140 $ 10,444 $ 10,758 $ 11,080 $ 11,413 $ 11,755 $ 12,108 $ 12,471 $ 12,845 $ 13,230 $ 13,627 564000 >$5,000 Machinery & Equip $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total O&M Expenses $ 2,344,630 $ 2,414,969 $ 2,487,418 $ 2,562,041 $ 2,638,902 $ 2,718,069 $ 2,799,611 $ 2,883,599 $ 2,970,107 $ 3,059,210 $ 3,150,987 TOTAL WASTEWATER COLLECTION DEPARTMENTAL EXPENSES $ 3,785,594 $ 3,897,183 $ 4,081,869 $ 4,273,514 $ 4,432,638 $ 4,560,967 $ 4,693,146 $ 4,829,290 $ 4,969,519 $ 5,113,954 $ 5,262,723 BURTON & ASSOCIATES 22 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX W & W t City S of Clearw Fi ater, Flo M i l rida t P at er astewa er yste m nanc Cash O anagemen a utflows rogram Wastewater Maintenance FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2016 FY 2016 FY 2017 FY 2018 FY 2019 Personal Services 510100 Full Time Salaries & Wages $ 817,860 $ 838,307 $ 859,264 $ 880,746 $ 907,168 $ 934,383 $ 962,415 $ 991,287 $ 1,021,026 $ 1,051,657 $ 1,083,206 510500 Overtime $ 60,000 $ 61,500 $ 63,038 $ 64,613 $ 66,552 $ 68,548 $ 70,605 $ 72,723 $ 74,905 $ 77,152 $ 79,466 520100 Life Ins $2500 Empl & Pens $ 190 $ 196 $ 202 $ 208 $ 214 $ 220 $ 227 $ 234 $ 241 $ 248 $ 255 5202001 % Life Insurance-Employee $ 2,350 $ 2,421 $ 2,493 $ 2,568 $ 2,645 $ 2,724 $ 2,806 $ 2,890 $ 2,977 $ 3,066 $ 3,158 520300 Samp Life Insurance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 520400Major Medical lns-Emp $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 $ 111,600 520600 Social Security-Employee $ 12,910 $ 13,297 $ 13,696 $ 14,107 $ 14,530 $ 14,966 $ 15,415 $ 15,878 $ 16,354 $ 16,845 $ 17,350 520700 Emp Pension Plan $ 105,410 $ 116,975 $ 184,460 $ 255,247 $ 292,116 $ 300,879 $ 309,906 $ 319,203 $ 328,779 $ 338,642 $ 348,802 Additional OpebAccrued $ 18,851 $ 19,417 $ 20,000 $ 20,600 $ 21,218 $ 21,854 $ 22,510 $ 23,185 $ 23,881 $ 24,597 $ 25,335 Total Personal Services $ 1,129,171 $ 1,163,712 $ 1,264,762 $ 1,349,688 $ 1,416,043 $ 1,466,176 $ 1,496,483 $ 1,537,000 $ 1,579,762 $ 1,623,807 $ 1,669,173 O&M Expenses 530100 Professional Services $ 30,000 $ 30,900 $ 31,827 $ 32,782 $ 33,765 $ 34,778 $ 35,822 $ 36,896 $ 38,003 $ 39,143 $ 40,317 530300 Other Contractual Serv $ 6,000 $ 6,180 $ 6,365 $ 6,556 $ 6,753 $ 6,956 $ 7,164 $ 7,379 $ 7,601 $ 7,829 $ 8,063 542200 Elec-Util Charges $ 240,000 $ 254,400 $ 269,664 $ 285,844 $ 302,994 $ 321,174 $ 340,445 $ 360,871 $ 382,524 $ 405,475 $ 429,803 542300 Gas,Water & Sanitation Utl $ 8,500 $ 8,755 $ 9,018 $ 9,288 $ 9,567 $ 9,854 $ 10,149 $ 10,454 $ 10,768 $ 11,091 $ 11,423 542500 Postage $ 150 $ 155 $ 159 $ 164 $ 169 $ 174 $ 179 $ 184 $ 190 $ 196 $ 202 542800 lnterfd Other Serv Chgs $ 5,090 $ 5,243 $ 5,400 $ 5,562 $ 5,729 $ 5,901 $ 6,078 $ 6,260 $ 6,448 $ 6,641 $ 6,841 5429001nterld Admin Service Cling $ 295,200 $ 304,056 $ 313,178 $ 322,573 $ 332,250 $ 342,218 $ 352,484 $ 363,059 $ 373,951 $ 385,169 $ 396,724 543100 Advertising $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 544100 Equipt Rental $ 10,000 $ 10,300 $ 10,609 $ 10,927 $ 11,255 $ 11,593 $ 11,941 $ 12,299 $ 12,668 $ 13,048 $ 13,439 546200 Other Equip Sw & Repair $ 12,000 $ 12,360 $ 12,731 $ 13,113 $ 13,506 $ 13,911 $ 14,329 $ 14,758 $ 15,201 $ 15,657 $ 16,127 547100 Uniforms-Employee $ 5,890 $ 6,067 $ 6,249 $ 6,436 $ 6,629 $ 6,828 $ 7,033 $ 7,244 $ 7,461 $ 7,685 $ 7,916 547200 Trawl Expense-Emp $ 2,000 $ 2,060 $ 2,122 $ 2,185 $ 2,251 $ 2,319 $ 2,388 $ 2,460 $ 2,534 $ 2,610 $ 2,688 547300 Mileage Reimbursement $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 547400 Meals-Employee $ 400 $ 412 $ 424 $ 437 $ 450 $ 464 $ 476 $ 492 $ 507 $ 522 $ 538 548000 Other Services Or Charges $ 600 $ 618 $ 637 $ 656 $ 675 $ 696 $ 716 $ 738 $ 760 $ 783 $ 806 550100 Office Supplies $ 3,500 $ 3,605 $ 3,713 $ 3,825 $ 3,939 $ 4,057 $ 4,179 $ 4,305 $ 4,434 $ 4,567 $ 4,704 550400 Operating Supplies & Matls $ 148,000 $ 152,440 $ 157,013 $ 161,724 $ 166,575 $ 171,573 $ 176,720 $ 182,021 $ 187,482 $ 193,106 $ 198,900 551500 Medical Supplies $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 557100 Memberships/Subs/Uc Emp $ 720 $ 742 $ 764 $ 787 $ 810 $ 835 $ 860 $ 886 $ 912 $ 939 $ 968 557200 Oftcl Recognition-Emp $ 190 $ 196 $ 202 $ 208 $ 214 $ 220 $ 227 $ 234 $ 241 $ - 248 $ 255 557300 Training & Rat Employee $ 9,930 $ 10,228 $ 10,535 $ 10,851 $ 11,176 $ 11,512 $ 11,657 $ 12,213 $ 12,579 $ 12,956 $ 13,345 540100 Garage Services $ 96,700 $ 99,601 $ 102,589 $ 105,667 $ 108,837 $ 112,102 $ 115,465 $ 118,929 $ 122,497 $ 126,172 $ 129,957 540200 Doc Repro & Print Shop Svc $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 540300 Telephone Service Variable $ 2,590 $ 2,668 $ 2,748 $ 2,830 $ 2,915 $ 3,003 $ 3,093 $ 3,185 $ 3,281 $ 3,379 $ 3,481 540500 Radio Sw-Fixed $ 4,360 $ 4,491 $ 4,626 $ 4,764 $ 4,907 $ 5,054 $ 5,206 $ 5,362 $ 5,523 $ 5,689 $ 5,859 541000 Info Technology Charge $ 22,090 $ 22,753 $ 23,435 $ 24,138 $ 24,862 $ 25,608 $ 26,377 $ 27,168 $ 27,983 $ 28,822 $ 29,687 541100 Bldg & Maint Dept Svc Fx $ 310,660 $ 319,980 $ 329,579 $ 339,467 $ 349,651 $ 360,140 $ 370,944 $ 382,073 $ 393,535 $ 405,341 $ 417,501 541500 Garage Variable $ 3,200 $ 3,296 $ 3,395 $ 3,497 $ 3,602 $ 3,710 $ 3,821 $ 3,936 $ 4,054 $ 4,175 $ 4,301 564000>$5,000 Machinery & Equip $ 5,000 $ 5,150 $ 5,305 $ 5,464 $ 5,628 $ 5,796 $ 5,970 $ 6,149 $ 6,334 $ 6,524 $ 6,720 551000 Lab Chemical Supplies $ 32,000 $ 32,960 $ 33,949 $ 34,967 $ 36,016 $ 37,097 $ 38,210 $ 39,356 $ 40,537 $ 41,753 $ 43,005 Total O&M Expenses $ 1,265,570 $ 1,300,437 $ 1,347,082 $ 1,395,68S $ 1,446,027 $ 1,498,498 $ 1,563,088 $ 1,609,894 $ 1,669,017 $ 1,730,563 $ 1,794,646 TOTAL WASTEWATER MAINTENANCE DEPARTMENTAL 2,384,741 2,464,148 2,601,836 2,745,273 2,862,070 2,963,674 3,048,571 3,146,894 3,248,779 $ 3,364,370 3,463,817 BURTON & ASSOCIATES 23 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX Water Pollution Control Plant Operations FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Personal Services 510100 Full Time Salaries & Wages E 1,684,460 $ 1,726,572 $ 1,769,736 E 1,813,979 E 1,868,399 $ 1,924,451 $ 1,982,184 $ 2,041,650 $ 2,102,899 $ 2,165,986 $ 2,230,966 510500 Overtime E 175,000 $ 179,375 $ 183,859 $ 188,456 $ 194,110 $ 199,933 $ 205,931 $ 212,109 $ 218,472 $ 225,026 $ 231,777 520100 Life Ins $2500 Empi & Pens $ 410 $ 422 $ 435 $ 448 $ 461 $ 475 $ 490 $ 504 $ 519 $ 535 $ 551 5202001% Life lnsuronce-Employee $ 3,750 $ 3,863 $ 3,978 $ 4,098 $ 4,221 $ 4,347 $ 4,478 $ 4,612 $ 4,750 E 4,893 $ 5,040 520300 Samp Life Insurance $ 120 E 124 $ 127 $ 131 $ 135 $ 139 $ 143 $ 148 $ 152 S 157 $ 161 520400 Major Medical Ins-Emp $ 248,500 E 248,500 E 248,500 $ 248,500 $ 248,500 $ 248,500 $ 248.500 $ 248,500 E 248,500 $ 248,500 $ 248,500 520600 Social Security-Employes $ 33,820 $ 34,835 $ 35,880 $ 36,956 $ 38,065 E 39,207 $ 40,383 $ 41,594 $ 42,642 $ 44,127 $ 45,451 520700 Emp Pension Plan $ 238,500 $ 247,773 $ 390,719 $ 540,657 $ 616,752 $ 637,315 $ 656,434 $ 676,127 $ 696,411 $ 717,304 $ 738,823 Additional Opeb Accrual $ 39,931 $ 41,129 $ 42,363 $ 43,633 $ 44,942 $ 46,291 $ 47,679 $ 49,110 $ 50,583 $ 52,101 $ 53,664 520900 Workmans Compensation $ 100,000 E 103,000 $ 106,090 $ 109,273 $ 112,551 $ 115,927 $ 119,405 $ 122,987 $ 126,677 $ 130,477 $ 134,392 521000 Disability Insurance $ 580 E 597 $ 615 $ 634 E 653 $ 672 $ 693 $ 713 $ 735 E 757 $ 779 521500 Medical Examinations E E $ E $ E E E $ - $ - E Total Personal Services $ 2,525,071 $ 2,568,189 $ 2,782,302 $ 2,986,765 $ 3,130,788 $ 3,217,257 $ 3,306,320 S 3,398,054 $ 3,492,541 $ 3,589,862 $ 3,690,103 O&M Expenses 530100 Professional Semces $ 60,000 $ 61,800 $ 63,654 $ 65,564 $ 67,531 $ 69,556 $ 71,643 $ 73,792 $ 76,006 $ 78,286 $ 80,635 530300 Other Contractual Serv $ 700,000 $ 721,000 $ 742,630 $ 764,909 $ 787,856 $ 811492 $ 835,637 $ 860,912 $ 886,739 $ 913,341 $ 940,741 Adjustment To Biosolids $ - $ - $ $ - $ - $ - $ - $ - $ - $ - $ - 540100Garage Serices $ 120,080 E 123,682 $ 127,393 S 131,215 $ 135,151 $ 139,206 $ 143,382 $ 147,683 $ 152,114 $ 156,677 $ 161,377 540200 Doc Repro & Print Shop Svc $ 300 $ 309 E 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 540300 Telephone SeMce Variable $ 38,300 $ 39,449 $ 40,632 $ 41,851 $ 43,107 $ 44,400 $ 45,732 $ 47,104 $ 48,517 $ 49,973 $ 51,472 540400 Messenger SeMce $ 1,040 $ 1,071 $ 1,103 $ 1,136 $ 1,171 $ 1,206 $ 1,242 $ 1,279 $ 1,317 $ 1,357 $ 1,398 540500 Radio S-Flied $ 11,620 $ 11,969 $ 12,328 $ 12,697 $ 13,078 $ 13,471 $ 13,875 $ 14,291 $ 14,720 $ 15,161 $ 15,616 540600 Telephone Svc Fixed $ 4,520 $ 4,656 $ 4,795 $ 4,939 $ 5,087 $ 5,240 E 5,397 $ 5,559 $ 5,726 $ 5,898 $ 6,075 540700 Postal Service $ 410 $ 422 $ 435 $ 448 $ 461 $ 475 $ 490 S 504 $ 519 E 535 $ 551 540900 Risk Mgmt Se- $ 10,910 $ 11,237 $ 11,574 $ 11,922 $ 12,279 $ 12,648 $ 13,027 $ 13,418 $ 13,820 $ 14,235 $ 14,662 541000 info Technology Charge $ 94,330 $ 97,160 $ 100,075 $ 103,077 $ 106,169 $ 109,354 $ 112,635 E 116.014 $ 119,494 $ 123,079 S 126,772 541100 Bldg & Maint Dept S. F. $ 517,420 $ 532,943 $ 548,931 $ 565,399 E 582,361 $ 599,832 $ 617,827 $ 636,361 $ 655,452 E 675,116 $ 695,369 541200 Custodial Service $ 27,720 $ 28,552 $ 29,408 $ 30,290 $ 31,199 $ 32,135 $ 33,099 $ 34,092 $ 35,115 $ 36,168 $ 37,253 541500 Garage Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541600Bldg &Maim-Variable $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 541700 Radio Service-Variable $ - $ - E - $ - $ - $ - $ - $ - $ - $ - $ - 541800 Administrative Charge S - $ - $ - S - $ - E $ - $ $ - $ - $ - 542000Employee BenefnsFixed $ 7,750 $ 7,983 $ 8,222 $ 8,469 $ 8,723 $ 8,984 $ 9,254 $ 9,532 $ 9,817 $ 10,112 $ 10,415 542200 E1ec-Util Charges $ 2,000,000 $ 2,120,000 $ 2,247,200 $ 2,382,032 $ 2,524,954 $ 2,676,451 $ 2,837,038 $ 3,007,261 E 3,187,696 $ 3,378,958 $ 3,581,695 542300 Gas.Water B Sanitation Utl $ 173,030 $ 178,221 $ 183,568 $ 189,075 $ 194,747 $ 200.589 $ 206,607 $ 212,805 $ 219,189 $ 225,765 $ 232,538 542500 Postage $ 12,000 $ 12,360 $ 12,731 $ 13,113 $ 13,506 $ 13,911 $ 14,329 $ 14,758 E 15,201 $ 15,657 $ 16,127 5428001nterfd Other Serv Chgs $ 420,170 $ 432,775 $ 445,758 $ 459,131 $ 472,905 $ 487,092 $ 501,705 $ 516,756 $ 532,259 $ 548,227 $ 564,673 5429W ntedd Admin Semce Chg $ 637,020 $ 656,131 $ 675,815 $ 696,089 $ 716,972 $ 738,481 $ 760,635 $ 783,454 $ 806,958 $ 831,167 $ 856,102 543100 Advertising $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 543300 Freight $ 400 E 412 $ 424 $ 437 $ 450 $ 464 $ 478 $ 492 $ 507 $ 522 $ 538 543400 Priming & Binding $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 543500 Dump Fee $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 543600 Taxes $ 33,000 $ 33,990 $ 35,010 $ 36,060 $ 37,142 $ 38,256 $ 39,404 $ 40,586 $ 41,803 $ 43,058 $ 44,349 544100 Equipt Rental $ 25,000 $ 25,750 $ 26,523 $ 27,318 $ 28,138 $ 28,982 $ 29,851 $ 30,747 $ 31,669 $ 32,619 $ 33,598 5451001nsuronce E 287,500 $ 296,125 $ 305,009 $ 314,159 $ 323,584 $ 333,291 $ 343,290 $ 353,589 $ 364,196 $ 375,122 $ 386,376 546100 Ofc Equip Svc & Repair $ - $ - $ - $ - $ - $ - $ $ - $ $ - $ - 546200Other Equip SCBRepair $ 23,000 $ 23,690 $ 24,401 $ 25,133 $ 25,887 $ 26,663 $ 27,463 E 28,287 $ 29,136 $ 30,010 $ 30,910 546400 Bldg Repair Maim Svcs $ 3,430 $ 3,533 $ 3,639 $ 3,748 $ 3,860 $ 3,976 $ 4,096 $ 4,218 $ 4,345 $ 4,475 $ 4,610 547100 Uniforms-Employee $ 12,710 $ 13,091 $ 13,484 $ 13,889 $ 14,305 $ 14,734 $ 15,176 $ 15,632 $ 16,101 $ 16,584 $ 17,081 547200 Travel Expense-Emp $ 4,670 $ 4,810 $ 4,954 $ 5,103 $ 5,256 $ 5,414 $ 5,576 $ 5,744 $ 5,916 $ 6,093 $ 6,276 547300 Mileage Reimbursement $ 2,590 $ 2,668 $ 2,748 $ 2,830 $ 21915 $ 3,003 $ 3,093 $ 3,185 E 3,281 $ 3,379 $ 3,481 547400 Meals-Empioyee $ 6,000 $ 6,180 $ 6,365 $ 6,556 $ 6,753 $ 6,956 $ 7,164 $ 7,379 $ 7,601 $ 7,829 $ 8,063 548000 Other Services Or Charges $ 1,500 $ 1,545 $ 1,591 $ 1,639 $ 1,688 $ 1,739 $ 1,791 $ 1,845 $ 1,900 $ 1,957 $ 2,016 550,00 office Supplies $ 12,000 $ 12,360 $ 12,731 $ 13,113 $ 13,506 $ 13,911 $ 14,329 $ 14,758 $ 15,201 $ 15,657 $ 16,127 550400 Operating Supplies & Malls $ 244,000 $ 251,320 $ 258,860 $ 266,625 $ 274,624 $ 282,863 $ 291,349 $ 300,089 $ 309,092 $ 318,365 $ 327,916 551000 Lab Chem Supplies $ 1,200,000 $ 1,236,000 $ 1,273,080 S 1,311,272 $ 1,350,611 $ 1,391,129 E 1,432,863 $ 1475,849 $ 1,520,124 $ 1,565,728 $ 1,612,700 551500 Medical Supplies $ 1,650 $ 1,700 $ 1,750 $ 1,803 $ 1,857 $ 1,913 $ 1,970 E 2,029 $ 2,090 E 2,153 $ 2,217 552500$750-000 Mach &Equip $ 33,440 $ 34,443 $ 35,476 $ 36,541 E 37,637 $ 38,766 $ 39,929 $ 41,127 E 42,361 $ 43,632 $ 44,941 557100 Memberships/Subs/Li. Emp $ 1,470 $ 1,514 $ 1,560 $ 1,606 $ 1,654 $ 1,704 $ 1,755 E 1,808 $ 1,862 $ 1,918 $ 1,976 557200 Oltcl Recogniti-Emp $ 410 $ 422 $ 435 $ 448 $ 461 $ 475 $ 490 E 504 $ 519 $ 535 $ 551 557300 Training B RefEmployee $ 6,840 $ 7,045 $ 7,257 $ 7,474 $ 7,698 $ 7,929 $ 8,167 $ 8,412 $ 8,665 $ 8,925 $ 9,192 564000>$5,000 Machinery & Equip $ - E - E - $ - $ - $ - $ $ - E - $ - $ - 572200 Interest Other E $ $ E E E $ E $ E $ Total O&M Expenses $ 6,737,730 $ 6,999,862 S 7,273,458 $ 7,559,077 $ 7,857,311 $ 8,168,779 $ 8,494,136 $ 8,934,071 $ 9,189,311 $ 9,560,621 $ 9,948,808 TOTAL WATER POLLUTION CONTROL DEPARTMENTAL 9,262,801 9,588,051 10,055,780 10,545,843 10,988,099 11,386,036 11,800,455 12,232,125 12,681,852 13,150,483 13,838,912 BURTON & ASSOCIATES 24 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX WPC Laboratory Operations FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Personal Services - 510100 Full Time Salaries & Wages $ 366,360 $ 375,519 $ 384,907 $ 394,530 $ 406,366 $ 418,557 $ 431,113 $ 444,047 $ 457,368 $ 471,089 $ 485,222 510200 Part Time Salaries & Wages $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 510500 Overtime $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 520100 Life Ins $2500 Empl & Pens $ 90 $ 93 $ 95 $ 98 $ 101 $ 104 $ 107 $ 111 $ 114 $ 117 $ 121 520200 1% Life Insurance-Employee $ 1,130 $ 1,164 $ 1,199 $ 1,235 $ 1,272 $ 1,310 $ 1,349 $ 1,390 $ 1,431 $ 1,474 $ 1,519 520300 Samp Life Insurance $ 660 $ 680 $ 700 $ 721 $ 743 $ 765 $ 788 $ 812 $ 836 $ 861 $ 887 520400 Major Medical Ins-Emp $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 $ 49,600 520600 Social Security-Employee $ 8,880 $ 9,146 $ 9,421 $ 9,703 $ 9,995 $ 10,294 $ 10,603 $ 10,921 $ 11,249 $ 11,586 $ 11,934 520700 Emp Pension Plan E 39,410 $ 48,817 $ 76,981 $ 106,523 $ 121,910 $ 125,567 $ 129,334 $ 133,214 $ 137,210 $ 141,327 $ 145,567 Additional Opeb Accrual $ 7,867 $ 8,103 $ 8,346 $ 8,597 $ 8,855 $ 9,120 $ 9,394 $ 9,676 $ 9,966 $ 10,265 $ 10,573 520900 Workmans Compensation $ 3,970 $ 4,089 $ 4,212 $ 4,338 $ 4,468 $ 4,602 $ 4,740 $ 4,883 $ 5,029 $ 5,180 $ 5,335 521000 Disability Insurance $ 440 $ 453 $ 467 E 481 $ 495 $ 510 $ 525 $ 541 $ 557 $ 574 $ 591 521500 Medical Examinations $ E $ $ $ E $ $ $ $ $ Total Personal Services $ - 478,407 $ 497,665 $ 535,929 $ 575,826 $ 603,804 S 620,430 $ $37,555 $ 655,194 $ 673,361 $ $92,074 $ 711,348 O&M Expenses - 530100 Professional Services $ 20,000 $ 20,600 $ 21,218 $ 21,855 $ 22,510 $ 23,185 $ 23,881 $ 24,597 $ 25,335 $ 26,095 $ 26,878 530300 Other Contractual Serv $ 103,000 $ 106,090 $ 109,273 $ 112,551 $ 115,927 $ 119,405 $ 122,987 $ 126,677 $ 130,477 $ 134,392 $ 138,423 540100 Garage Services $ 4,550 $ 4,687 $ 4,827 $ 4,972 $ 5,121 $ 5,275 $ 5,433 $ 5,596 $ 5,764 $ 5,937 $ 6,115 540200 Doc Repro & Print Shop Sw $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 540300 Telephone Service Variable $ 330 $ 340 $ 350 $ 361 $ 371 $ 383 $ 394 $ 406 $ 418 $ 431 $ 443 540500 Radio Sw-Fixed $ 480 $ 494 $ 509 $ 525 $ 540 $ 556 $ 573 $ 590 $ 608 $ 626 $ 645 540700 Postal Service $ - E - $ - $ - $ - $ - $ - $ - $ - $ - $ - 540900 Risk Mgmt Service $ 1,960 $ 2,019 $ 2,079 $ 2,142 $ 2,206 $ 2,272 $ 2,340 $ 2,411 $ 2,483 $ 2,557 $ 2,634 541000 Into Technology Charge $ 26,790 $ 27,594 $ 28,422 $ 29,274 $ 30,152 $ 31,057 $ 31,989 $ 32,948 $ 33,937 $ 34,955 $ 36,004 541100 Bldg & Maint Dept Sw Fx $ 47,350 $ 48,771 $ 50,234 $ 51,741 $ 53,293 $ 54,892 $ 56,538 $ 58,235 $ 59,982 $ 61,781 $ 63,634 541200 Custodial Service $ 18,970 $ 19,539 $ 20,125 $ 20,729 $ 21,351 $ 21,991 $ 22,651 $ 23,331 $ 24,031 $ 24,752 $ 25,494 541300 Print Shop Sws $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541500 Garage Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541600 Bldg & Mainl-Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541700 Radio Service-Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 541800 Administrative Charge $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 542000 Employee Benefits-Fixed $ 1,390 $ 1,432 $ 1,475 $ 1,519 $ 1,564 $ 1,611 $ 1,660 $ 1,710 $ 1,761 $ 1,814 $ 1,868 542300 Gas,Water& Sanitation Utl $ 30,000 $ 30,900 $ 31,827 $ 32,782 $ 33,765 $ 34,778 $ 35,822 $ 36,896 $ 38,003 $ 39,143 $ 40,317 542500 Postage $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 542800 lnterfd Other Serv Chgs $ 76,050 $ 78,332 $ 80,681 $ 83,102 $ 85,595 $ 88,163 $ 90,808 $ 93,532 $ 96,338 $ 99,228 $ 102,205 542900 lnterid Admin Service Chg $ 139,830 $ 144,025 $ 148,346 $ 152,796 $ 157,380 $ 162,101 $ 166,964 $ 171,973 $ 177,132 $ 182,446 $ 187,920 543600 Taxes $ 4,500 $ 4,635 $ 4,774 $ 4,917 $ 5,065 $ 5,217 $ 5,373 $ 5,534 $ 5,700 $ 5,871 $ 6,048 544100 Equipt Rental $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,800 $ 3,914 $ 4,032 545100 Sundry Insurance $ 1,250 $ 1,288 $ 1,326 $ 1,366 $ 1,407 $ 1,449 $ 1,493 $ 1,537 $ 1,583 $ 1,631 $ 1,680 546100 Ofc Equip Sw & Repair $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - W200 Other Equip Sw & Repair $ 5,500 $ 5,665 $ 5,835 $ 6,010 $ 6,190 $ 6,376 $ 6,567 $ 6,764 $ 6,967 $ 7,176 $ 7,392 547100 Uniforms-Employee $ 2,790 $ 2,874 $ 2,960 $ 3,049 $ 3,140 $ 3,234 $ 3,331 $ 3,431 $ 3,534 $ 3,640 $ 3,750 547200 Travel Expense-Emp $ 4,500 $ 4,635 $ 4,774 $ 4,917 $ 5,065 $ 5,217 $ 5,373 $ 5,534 $ 5,700 $ 5,871 $ 6,048 547300 Mileage Reimbursement $ 900 $ 927 $ 955 $ 983 $ 1,013 $ 1,043 $ 1,075 $ 1,107 $ 1,140 $ 1,174 $ 1,210 547400 Meals-Employee $ 130 $ 134 $ 138 $ 142 $ 146 $ 151 $ 155 $ 160 $ 165 $ 170 $ 175 548000 Other Services Or Charges $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 550100 Office Supplies $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,800 $ 3,914 $ 4,032 550400 Operating Supplies & Malls $ 3,500 $ 3,605 $ 3,713 $ 3,825 $ 3,939 $ 4,057 $ 4,179 $ 4,305 $ 4,434 $ 4,567 $ 4,704 551000 Lab Chem Supplies $ $6,000 $ 88,580 $ 91,237 $ 93,975 $ 96,794 $ 99,698 $ 102,688 $ 105,769 $ 108,942 $ 112,210 $ 115,577 551500 Medical Supplies $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 552500 $750-5000 Mach & Equip $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 557100 Memberships/Subs/Lic Emp $ 450 $ 464 $ 477 $ 492 $ 506 $ 522 $ 537 $ 553 $ 570 $ 587 $ 605 557200 Oficl Recognition-Emp $ 90 $ 93 $ 95 $ 98 $ 101 $ 104 $ 107 $ 111 $ 114 $ 117 $ 121 557300 Training & Ref Employee $ 6,300 $ 6,489 $ 6,684 $ 6,884 $ 7,091 $ 7,303 $ 7,523 $ 7,748 $ 7,981 $ 8,220 $ 8,467 564000 45,000 Machinery & Equip E E $ $ $ $ $ $ E $ E Total O&M Expenses $ 593,210 $ 611,006 $ 629,336 $ 848,217 $ 667,663 $ 687,693 $ 708,324 $ 729,573 $ 751,461 $ 774,005 $ 797,225 TOTAL LABORATORY DEPARTMENTAL EXPENSES 1, 7 ,617 1,108,671 1,214-WT-3 1,271,467 1,308,123 1,345,878 111 1,384,767 1,424,822 1,466,079 1,608,573 BURTON & ASSOCIATES 25 City of Clearwater Utility & Governmental Economics Final Report Schedule 5 - Projection of Cash Outflows Industrial Pretreatment FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2016 FY 2016 FY 2017 FY 2018 FY 2019 Personal Services 510100 Full Time Salaries & Wages $ 277,760 $ 284,704 $ 291,822 $ 299,117 $ 308,091 $ 317,333 $ 326,853 $ 336,659 $ 346,759 $ 357,162 $ 367,876 5, 0500 Overtime $ 20,000 $ 20,500 $ 21,013 $ 21,538 $ 22,184 $ 22,849 $ 23,535 $ 24,241 $ 24,968 $ 25,717 $ 26,489 520100 Life Ins $2500 Empl & Pens $ 60 $ 62 $ 64 $ 66 $ 68 $ 70 $ 72 $ 74 $ 76 $ 78 $ 81 520200 1% Life Insurance-Employee $ 1,110 $ 1,143 $ 1,178 $ 1,213 $ 1,249 $ 1,287 $ 1,325 $ 1,365 $ 1,406 $ 1,448 $ 1,492 520300 Samp Life Insurance $ 110 $ 113 $ 117 $ 120 $ 124 $ 128 $ 131 $ 135 $ 139 $ 144 $ 148 520400 Major Medical Ins-Emp $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 $ 37,200 520600 Social Security-Employee $ 8,630 $ 8,889 $ 9,156 $ 9,430 $ 9,713 $ 10,005 $ 10,305 $ 10,614 $ 10,932 $ 11,260 $ 11,598 520700 Emp Pension Plan $ 29,520 $ 39,677 $ 62,567 $ 86,577 $ 99,082 $ 102,055 $ 105,116 $ 108,270 $ 111,518 $ 114,864 $ 118,310 Additional Opeb Accrual $ 6,394 $ 6,586 $ 6,784 $ 6,987 $ 7,197 $ 7,413 $ 7,635 $ 7,864 $ 8,100 $ 8,343 $ 8,593 520900 Workman Compensation $ 3,850 $ 3,966 $ 4,084 $ 4,207 $ 4,333 $ 4,463 $ 4,597 $ 4,735 $ 4,877 $ 5,023 $ 5,174 521000 Disability Insurance $ 380 $ 391 $ 403 $ 415 $ 428 $ 441 $ 454 $ 467 $ 481 $ 496 $ 511 521500 Medical Examinations $ $ $ $ $ $ $ $ - $ $ $ - Total Personal Services $ 385,014 $ 403,231 $ 434,386 $ 466,870 $ 489,668 $ 503,242 $ 617,224 $ 531,624 $ 546,457 $ 661,736 $ 577,471 O&M Expenses 530100 Professional Services $ 25,000 $ 25,750 $ 26,523 $ 27,318 $ 28,138 $ 28,982 $ 29,851 $ 30,747 $ 31,669 $ 32,619 $ 33,598 530300 Other Contractual Serv $ 35,300 $ 36,359 $ 37,450 $ 38,573 $ 39,730 $ 40,922 $ 42,150 $ 43,415 $ 44,717 $ 46,058 $ 47,440 540100 Garage Services $ 13,980 $ 14,399 $ 14,831 $ 15,276 $ 15,735 $ 16,207 $ 16,693 $ 17,194 $ 17,709 $ 18,241 $ 18,788 540200 Doc Repro & Print Shop Svc $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 540300 Telephone Svc Variable $ 1,980 $ 2,039 $ 2,101 $ 2,164 $ 2,229 $ 2,295 $ 2,364 $ 2,435 $ 2,508 $ 2,583 $ 2,661 540500 RadioS,c-Fixed $ 970 $ 999 $ 1,029 $ 1,060 $ 1,092 $ 1,124 $ 1,158 $ 1,193 $ 1,229 $ 1,266 $ 1,304 540700 Postal SeNce $ 460 $ 474 $ 488 $ 503 $ 518 $ 533 $ 549 $ 566 $ 583 $ 600 $ 618 5409W Risk Mgmt Service $ 1,310 $ 1,349 $ 1,390 $ 1,431 $ 1,474 $ 1,519 $ 1,564 $ 1,611 $ 1,659 $ 1,709 $ 1,761 541000 Info Technology Charge $ 12,250 $ 12,618 $ 12,996 $ 13,386 $ 13,787 $ 14,201 $ 14,627 $ 15,066 $ 15,518 $ 15,983 $ 16,463 541500 Garage Variable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 542000 Employee Benefits-Fixed $ 930 $ 958 $ 987 $ 1,016 $ 1,047 $ 1,078 $ 1,110 $ 1,144 $ 1,178 $ 1,213 $ 1,250 542500 Postage $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 5428001nterfdOther Serv Chgs $ 50,620 $ 52,139 $ 53,703 $ 55,314 $ 56,973 $ 58,682 $ 60,443 $ 62,256 $ 64,124 $ 66,048 $ 68,029 542900 lnterfd Admin Service Chg $ 93,220 $ 96,017 $ 98,897 $ 101,864 $ 104,920 $ 108,068 $ 111,310 $ 114,649 $ 118,088 $ 121,631 $ 125,280 543100 Advertising $ 400 $ 412 $ 424 $ 437 $ 450 $ 464 $ 478 $ 492 $ 507 $ 522 $ 538 543200 Other Promotion Activity $ 40,000 $ 41,200 $ 42,436 $ 43,709 $ 45,020 $ 46,371 $ 47,762 $ 49,195 $ 50,671 $ 52,191 $ 53,757 544100 Equipt Rental $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 545100 Insurance $ 1,010 $ 1,040 $ 1,072 $ 1,104 $ 1,137 $ 1,171 $ 1,206 $ 1,242 $ 1,279 $ 1,318 $ 1,357 5462DO Other Equip Svc & Repair $ 2,000 $ 2,060 $ 2,122 $ 2,185 $ 2,251 $ 2,319 $ 2,388 $ 2,460 $ 2,534 $ 2,610 $ 2,688 547100 Uniforms-Employee $ 1,860 $ 1,916 $ 1,973 $ 2,032 $ 2,093 $ 2,156 $ 2,221 $ 2,288 $ 2,356 $ 2,427 $ 2,500 547200 Travel Expense-Emp $ 3,450 $ 3,554 $ 3,660 $ 3,770 $ 3,883 $ 3,999 $ 4,119 $ 4,243 $ 4,370 $ 4,501 $ 4,637 547300 Mileage Reimbursement $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 547400 Meals-Employee $ 150 $ 155 $ 159 $ 164 $ 169 $ 174 $ 179 $ 184 $ 190 $ 196 $ 202 548000 Other Services Or Charges $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 550100Office Supplies $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,800 $ 3,914 $ 4,032 550400 Operating Supplies & Matta $ 11,000 $ 11,330 $ 11,670 $ 12,020 $ 12,381 $ 12,752 $ 13,135 $ 13,529 $ 13,934 $ 14,353 $ 14,783 551000 Lab Chem Supplies $ 2,000 $ 2,060 $ 2,122 $ 2,185 $ 2,251 $ 2,319 $ 2,388 $ 2,460 $ 2,534 $ 2,610 $ 2,688 552500 $7505000 Mach & Equip $ 3,300 $ 3,399 $ 3,501 $ 3,606 $ 3,714 $ 3,826 $ 3,940 $ 4,059 $ 4,180 $ 4,306 $ 4,435 557100 Memberships/Subs/Lic Emp $ 600 $ 618 $ 637 $ 656 $ 675 $ 696 $ 716 $ 738 $ 760 $ 783 $ 806 557200 Officl Recognition-Emp $ 60 $ 62 $ 64 $ 66 $ 68 $ 70 $ 72 $ 74 $ 76 $ 78 $ 81 557300 Training & Ref Employee $ 1,890 $ 1,947 $ 2,005 $ 2,065 $ 2,127 $ 2,191 $ 2,257 $ 2,324 $ 2,394 $ 2,466 $ 2,540 564000 Mach & Equip >$5000 $ $ $ $ - $ $ $ - $ $ $ - $ - Total O&M Expenses S 308,940 $ 318,208 $ 327,764 $ 337,687 $ 347,715 $ 358,146 $ 368,891 $ 379,957 $ 391,356 $ 403,097 $ 415,190 TOTAL INDUSTRIAL PRETREATMENT DEPARTMENTAL 111 693,954 721,439 762,140 804,457 $ 937,393 $ $61,389 111 686,114 $ 911,682 $ 937,813 $ 964,832 $ 992,660 BURTON & ASSOCIATES 26 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX FY 208 FY 2010 FY 2011 FY 2012 FY 2011 FY 2014 FY 2015 FY 2016 FY 2011 FY 2016 FY 2019 Water Distribution personal services $ 402 850 1 1 437 921 $ 1 1 473,869 $ 1,510,716 1 1,556,037 $ 1,602,719 6 1,650,800 $ 1,70,324 $ 1,751,334 1 1,803,874 1 1,857,990 51010 Full Time Salaries 6 Wages 1 , , 00 1 0 , , 61 500 1 , 63,038 1 64,613 $ 66,552 E 68,548 1 70,605 1 72,723 1 74,05 E 77,152 1 79,466 51050 O%ertime 52010 Life Ins $250 Empl 6 Pens $ , 370 1 , 381 $ 393 $ 404 1 416 $ 429 1 442 1 455 $ 469 1 483 1 497 520201% Life insurance-Employee $ 3,970 $ 4,089 $ 4,212 $ 4,338 $ 4,468 $ 4,602 $ 4,740 $ 4,883 $ 5,029 5 5,180 $ 5,335 520300 Samp Life Insurance $ 240 $ 247 $ 255 $ 282 $ 270 $ 278 $ 287 $ 295 $ 304 $ 313 1 323 520400 Major Medical Ins-Emp $ 220,10 $ 220,10 $ 220,100 $ 220,100 $ 220,10 $ 220,100 $ 220,10 $ 220,10 $ 220,10 6 220,10 $ 220,100 52000 Social Secumy-Employee $ 23,730 $ 24,442 $ 25,175 $ 25,930 $ 26,708 $ 27,510 $ 28,335 $ 29,185 $ 30,060 $ 30,982 $ 31,691 52070 Emp Pension Plan $ 175,490 $ 194,925 $ 307,381 $ 425,339 $ 486,777 $ 501,380 $ 516,422 $ 531,914 $ 547,872 $ 564,308 $ 581,237 Additional Opeb Accrual $ 31,414 $ 32,356 $ 33,327 S 34,327 $ 35,357 $ 36,417 $ 37,510 $ 38,635 $ 39,794 $ 40,988 1 42,218 52000 Workman Compensation $ 28,890 $ 27,697 $ 28,528 $ 29,383 $ 30,285 $ 31,173 $ 32,108 $ 33,071 $ 34,063 $ 35,085 $ 36,138 52100 Disability Insurance $ 3,50 $ 361 $ 371 $ 382 $ 394 $ 40 $ 418 $ 430 $ 443 $ 457 $ 470 521500 Medical Examinations - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 786 $ 2,632,016 $ 2,754,373 S 2,778,901 $ 2,855,666 561 493 862 $ 2 345 S 2 796 5 2 427 315 156 648 $ 2 019 2 Total Personal Services S 1,946,104 S 2,054, $ , , , , , , , , , , O&M Expenses 530100 Professional Senices $ 67,00 $ 69,010 $ 71,080 $ 73,213 $ 75,409 $ 77,671 $ 80,002 $ 82,402 $ 84,874 $ 87,420 $ 90,042 54010 Garage Services $ 240,170 $ 247,375 $ 254,796 $ 262,440 $ 270,313 $ 278,423 $ 286,776 $ 295,379 $ 304,240 $ 313,367 $ 322,788 54020 Doc Repro & Prim Shop Sic $ 3,00 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,80 $ 3,914 $ 4,032 54030 Telephone Service Variable $ 10,080 $ 10,382 $ 10,694 $ 11,015 $ 11,345 $ 11,685 $ 12,036 $ 12,397 $ 12,769 $ 13,152 $ 13,547 540400 Messenger Service $ 1,040 $ 1,071 $ 1,103 $ 1,136 $ 1,171 $ 1,20 $ 1,242 $ 1,279 $ 1,317 $ 1,357 $ 1,398 54050 Radio Svc-Fixed $ 19,430 $ 20,013 $ 20,613 $ 21,232 $ 21,869 $ 22,525 $ 23,200 $ 23,896 $ 24,613 $ 25,352 $ 26,112 54060 Telephone Svc Fined $ 4,570 $ 4,707 $ 4,848 $ 4,994 $ 5,144 $ 5,298 $ 5,457 $ 5,621 $ 5,789 $ 5,963 $ 6,142 54070 Postal Service $ 650 $ 670 $ 690 $ 710 $ 732 $ 754 $ 776 $ 799 $ 823 $ 848 $ 874 540900 Risk Mgmt Service $ 8,070 $ 8,312 $ 8,561 $ 8,818 $ 9,083 $ 9,355 $ 9,636 $ 9,925 $ 10,223 $ 10,530 $ 10,845 54100 Info Technology Charge $ 64,700 $ 68.641 $ 68,640 $ 7D,699 $ 72,820 $ 75,05 $ 77,255 $ 79,573 $ 81,960 $ 84,419 $ 86,951 54150 Garage Variable $ 19,30 $ 19,879 $ 20,475 $ 21,090 $ 21,722 $ 22,374 $ 23,045 $ 23,737 $ 24,449 $ 25,182 $ 25,938 54160 Bldg & Maim-Variable $ 1,20 $ 1,236 $ 1,273 $ 1,311 $ 1,351 $ 1,391 $ 1,433 $ 1,476 $ 1,520 $ 1,566 $ 1,613 541800 Administrative Charge $ 819,330 $ 843,910 $ 869,227 $ 895,304 $ 922,163 $ 949,828 $ 978,323 $ 1,007,673 $ 1,037,03 $ 1,069,040 $ 1,101,111 54200 Employee Benefits-Fixed $ 5,730 $ 5,02 $ 6,079 $ 6,281 $ 6,449 $ 6,643 $ 6,842 $ 7,047 $ 7,259 $ 7,476 $ 7,701 54210 TelephoneAMil Chgs $ 3,075 $ 3,167 $ 3,262 $ 3,360 $ 3,461 $ 3,565 $ 3,672 $ 3,782 $ 3,895 $ 4,012 $ 4,133 54220 Elec-ltil Charges $ 90 $ 954 $ 1,011 $ 1,072 $ 1,136 $ 1,204 $ 1,277 $ 1,353 $ 1,434 $ 1,521 $ 1,612 542500 Postage $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 9 391 $ 403 54270 Mend Svc Chg-Other Fund $ 104,430 $ 107,563 $ 110,790 $ 114,113 $ 117,537 $ 121,03 $ 124,695 $ 128,436 $ 132,289 $ 136,257 $ 140,345 542800 Intend Other Sew Chgs $ 394,270 $ 40,098 $ 418,281 $ 430,829 $ 443,754 $ 457,087 $ 470,779 $ 484,902 $ 499,449 $ 514,433 9 529,866 542900 lntedd Admin Service Chg $ 574,880 $ 592,126 $ 609,890 $ 628,187 $ 647,03 $ 886,443 $ 586,437 $ 707,030 $ 728,241 $ 750,088 $ 772,591 543100 Advertising $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 54320 Other Promotion Activity $ 80 $ 824 $ 849 $ 874 $ 90 $ 927 $ 955 $ 984 $ 1,013 $ 1,044 $ 1,075 543300 Freight 543400 Priming & Binding $ $ - $ 500 $ - $ 515 6 - $ 530 $ - $ 546 $ - $ 563 $ - $ 580 $ - $ 597 $ - $ 615 $ - $ 633 $ - $ 652 $ - 672 54350 Dump Fee $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 543600 Texas $ 350 $ 361 $ 371 $ 382 $ 394 $ 408 $ 418 $ 430 $ 443 S 457 $ 470 54410 Equipt Rental $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 545100 Sundry Insurance $ 135,960 $ 140,039 $ 144,240 $ 148,567 $ 153,024 $ 157,615 $ 162,343 $ 167,214 $ 172,230 $ 177,397 $ 182,719 546100 Ofo Equip Svc & Repair S $ - $ 10 00 $ - $ 10 300 $ - $ 609 $ 10 - $ 10,927 $ - $ 11,255 $ - $ 11,593 $ - $ 11,941 $ - $ 12,299 $ - $ 12,688 $ - $ 13,048 $ - 13,439 546200 Other Equip Sw & Repair 547100 Uniforms-Employee $ , 11,470 $ , 11,814 $ , 12,169 $ 12,534 $ 12,910 $ 13,297 $ 13,696 $ 14,107 $ 14,530 $ 14,966 $ 15,415 54720 Travel Expense-Emp $ 21,10 $ 21,733 $ 22,385 $ 23,057 $ 23,748 $ 24,461 $ 25,195 $ 25,950 $ 26,729 $ 27,531 $ 28,357 547300 Mileage Reimbursement $ 1,500 $ 1,545 $ 1,591 $ 1,639 $ 1,688 $ 1,739 $ 1,791 $ 1,845 $ 1,900 $ 1,957 $ 2,016 54740 Meals-Employee $ 1,200 $ 1,236 $ 1,273 $ 1,311 $ 1,351 $ 1,391 $ 1,433 $ 1,476 $ 1,520 $ 1,566 $ 1,613 548000 Other Senices Or Charges $ 1,20 $ 1,236 $ 1,273 $ 1,311 $ 1,351 $ 1,391 $ 1,433 $ 1,476 $ 1,520 $ 1,586 $ 1,613 550100 Office Supplies $ 6,500 $ 6,695 $ 6,896 $ 7,103 $ 7,316 $ 7,535 $ 7,761 $ 7,994 $ 8,234 $ 8,481 $ 8,735 550400 Operating Supplies & Mails $ 30,000 $ 309,00 $ 318,270 $ 327,818 $ 337,653 $ 347,782 $ 358,216 $ 368,962 $ 380,031 $ 391,432 $ 403,175 551500 Medical Supplies $ 2,500 $ 2,575 $ 2,652 $ 2,732 $ 2,814 $ 2,898 $ 2,985 $ 3,075 $ 3,167 $ 3,262 $ 3,380 552500 $750.500 Mach & Equip 55710 Memberships/Subs/Lic Emp $ $ - $ 2,230 $ - $ 2,297 $ - $ 2,366 $ - $ 2,437 $ - $ 2,510 $ - $ 2,585 $ - $ 2,863 $ - $ 2,743 $ - $ 2,825 $ - $ 2,910 $ - 2,997 55720 ORct Recognition-Emp $ 370 $ 381 $ 393 $ 404 $ 416 $ 429 $ 442 $ 455 $ 469 $ 483 $ 497 557300 Training & Ref Employee $ 23,670 $ 24,380 $ 25,112 $ 25,865 $ 26,641 $ 27,440 $ 28,263 $ 29,111 $ 29,984 $ 30,884 $ 31,811 564000 Mach & Equip 4500 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 775 $ 2,948,686 S 3,037,174 5 3,128,320 S 1,222,202 $ 3,318,902 $ 1,418,505 $ 1,521,099 S 1,626,772 $ 3,735,618 $ 3,547,732 862 $ 2 Tohl O&M Expenses TOTAL WATER DISTRIBUTION DEPARTMENTAL EXPENSES , , 4,803,179 4,952,704 5,193,822 6,"4,116 6,649,646 6,612,464 5,980,271 6,163,114 6,331,145 6,614,620 6,703,398 BURTON & ASSOCIATES 27 clay of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX Water Suooly FY 2009 FY 2010 FY 2011 YF 2012 FY 2013 FY 201A FY 201S FY 2018 FY 2017 FY 2015 FY 2019 Personal Services 510100 Full Time Saladee & Wages $ 495,630 $ 508,021 $ 520,721 $ 533,739 $ 649,751 $ 566,244 $ 583,231 a 600,728 $ 618,750 $ 637,313 $ 656,432 510500 Overtime $ 20,000 $ 20,500 $ 21,013 $ 21,538 $ 22,184 $ 22,849 $ 23,535 $ 24,241 $ 24,968 $ 25,717 $ 26,489 520100 Lde Ins $2500 Empl & Pens $ 110 $ 113 $ 117 $ 120 $ 124 $ 128 $ 131 $ 135 $ 139 $ 144 $ 148 520200 1% Life insurance-Employee $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 520300 Samp Ufe Insurance $ 110 $ 113 $ 117 $ 120 $ 124 $ 128 $ 131 $ 135 $ 139 $ 144 $ 148 520400 Major Medical Ins-Emp $ 68,200 $ 68,200 $ 68,200 $ 68,200 $ 68,200 a 68,200 $ 68,200 $ 68,200 $ 68,200 $ 68,200 $ 68,200 520600 Social Security-Employee $ 7,940 $ 8,178 $ 8,424 $ 8,676 $ 8,937 $ 9,205 $ 9,481 $ 9,765 $ 10,058 $ 10,360 $ 10,671 520700 Emp Pension Plan $ 64,270 $ 68,708 $ 108,347 $ 149,925 $ 171,581 $ 176,728 $ 182,030 $ 187,491 $ 193,116 $ 198,909 $ 204,876 Additional Opeb Accrual $ 11,073 $ 11,405 $ 11,747 $ 12,100 $ 12,463 $ 12,836 $ 13,222 $ 13,618 $ 14,027 $ 14,448 $ 14,881 520900 Workmans Compensation $ 4,790 E 4,934 $ 5,082 $ 5,234 $ 5,391 $ 5,553 $ 5,720 $ 5,891 $ 6,068 $ 6,250 $ 6,437 521500 Medical Examinations $ a $ E $ $ $ a a $ - $ - Total Personal Services $ 672,123 $ 690,172 $ 743,766 $ 799,652 $ $38,764 $ 861,871 $ 885,681 $ 910,205 $ 935,465 $ 961,483 $ 988,282 O&M Expenses 530100 Professional Services $ 80,000 $ 82,400 $ 84,872 $ 87,418 $ 90,041 $ 92,742 $ 95,524 $ 98,390 $ 101,342 $ 104,382 $ 107,513 5303DO Other Contractual Sew $ 87,500 $ 90,125 $ 92,829 $ 95,614 $ 98,482 $ 101,436 $ 104,480 $ 107,614 $ 110,842 $ 114,168 $ 117,593 540100 Garage Services $ 73,870 $ 76,086 $ 78,369 $ 80,720 $ 83,141 $ 85,636 $ 88,205 a 90,851 $ 93,576 $ 96,384 $ 99,275 540200 Doc Repro & Print Shop Svc $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 540300 Telephone Sevice Variable $ 19,350 $ 19,931 $ 20,528 $ 21,144 $ 21,779 $ 22,432 $ 23,105 $ 23,798 $ 24,512 $ 25,247 $ 26,005 540500 Radio Svc-Fixed $ 3,380 $ 3,481 $ 3,586 a 3,693 $ 3,804 $ 3,918 $ 4,036 $ 4,157 $ 4,282 $ 4,410 $ 4,542 540600 Telephone Svc Fixed $ 470 $ 494 $ 499 $ 514 $ 529 $ 545 $ 561 $ 578 $ 595 $ 613 $ 632 546100 Otc Equip Svc & Repair $ 200 $ 206 E 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 540900 Risk Mgmt Service $ 2,400 $ 2,472 $ 2,546 $ 2,623 $ 2,701 $ 2,782 $ 2,866 $ 2,952 $ 3,040 $ 3,131 $ 3,225 541000 Into Technology Charge $ 66,640 $ 68,639 $ 70,698 $ 72,819 $ 75,004 $ 77,254 $ 79,572 $ 81,959 $ 84,418 $ 86,950 $ 89,559 541100 Bldg & Maint Dept Svc Fx $ 131,990 $ 135,950 $ 140,028 $ 144,229 $ 148,556 $ 153,013 $ 157,603 $ 162,331 $ 167,201 $ 172,217 $ 177,384 541200 Custodial Senices $ 6,480 $ 6,674 $ 6,875 $ 7,081 $ 7,293 $ 7,512 $ 7,737 $ 7,970 $ 8,209 $ 8,455 $ 8,709 541500 Garage Vadable $ - $ - $ - $ - $ - $ - $ - $ - $ - a - $ - 541600 Bldg & Maint-Vadable $ 510 $ 525 $ 541 $ 557 $ 574 $ 591 $ 609 $ 627 $ 646 a 665 $ 685 541800 Administrative Charge $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 542000 Employee BeneMs-Fixed $ 1,700 $ 1,751 $ 1,804 $ 1,858 $ 1,913 $ 1,971 $ 2,030 $ 2,091 $ 2,154 $ 2,218 $ 2,285 542200 Elec-LRil Charges $ 576,780 $ 611,387 $ 648,070 $ 686,954 $ 728,171 $ 771,862 $ 818,173 $ 867,264 $ 919,300 $ 974,458 $ 1,032,925 542300 Gas,Water & Sanitation LAI $ 15,580 $ 16,047 $ 16,529 a 17,025 $ 17,535 $ 18,061 $ 18,603 $ 19,161 $ 19,736 $ 20,328 $ 20,938 542500 Postage $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 542700 Intend Svc ChgOther Fund $ 9,350 $ 9,631 $ 9,919 $ 10,217 $ 10,524 $ 10,839 $ 11,164 $ 11,499 $ 11,844 $ 12,200 $ 12,566 542800 Interfd Other ServChgs $ 92,950 $ 95,739 $ 98,611 $ 101,569 $ 104,616 $ 107,755 $ 110,987 $ 114,317 $ 117,746 $ 121,279 $ 124,917 542900 Intend Admin Service Chg $ 170,910 $ 176,037 $ 181,318 $ 186,758 $ 192,361 $ 198,132 $ 204,075 $ 210,196 $ 216,504 $ 222,999 $ 229,689 543100 Advertising $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 543400 Pdnting & Binding $ 750 $ 773 $ 796 $ 820 $ 844 $ 869 $ 896 $ 922 $ 950 $ 979 $ 1,008 543500 Dump Fee $ 5,000 $ 5,150 $ 5,305 $ 5,464 $ 5,628 $ 5,796 a 5,970 $ 6,149 $ 6,334 a 6,524 $ 6,720 543600 Taxes $ 600 $ 618 $ 637 $ 656 $ 675 $ 696 a 716 $ 738 $ 760 $ 783 $ 806 544100 Equipt Rental $ 500 $ 515 $ 530 $ 546 $ 563 $ 580 $ 597 $ 615 $ 633 $ 652 $ 672 545100 Sundry Insurance $ 62,900 $ 64,787 $ 66,731 $ 68,733 $ 70,795 $ 72,918 $ 75,106 $ 77,359 $ 79,680 $ 82,070 $ 84,532 546200 Other Equip Svc & Repair $ 5,000 $ 5,150 $ 5,305 $ 5,464 $ 5,628 $ 5,796 $ 5,970 $ 6,149 $ 6,334 $ 6,524 $ 6,720 546400 Bldg Repair Maintenance $ 4,000 $ 4,120 $ 4,244 $ 4,371 $ 4,502 $ 4,637 $ 4,776 $ 4,919 $ 5,067 $ 5,219 $ 5,376 547100 Uniforms-Employee $ 3,410 $ 3,512 $ 3,618 $ 3,726 $ 3,838 $ 3,953 $ 4,072 $ 4,194 $ 4,320 $ 4,449 $ 4,583 547200 Travel Expense-Emp $ 5,500 $ 5,665 $ 5,835 $ 6,010 $ 6,190 $ 6,376 $ 6,567 $ 6,764 $ 6,967 $ 7,176 $ 7,392 547300 Mileage Reimbursement $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 547400 Meals-Employee $ 200 $ 206 $ 212 $ 219 $ 225 $ 232 $ 239 $ 246 $ 253 $ 261 $ 269 548000 Other Services Or Charges $ 1,500 $ 1,545 $ 1,591 $ 1,639 $ 1,688 $ 1,739 $ 1,791 $ 1,845 $ 1,900 $ 1,957 $ 2,016 550100 Office Supplies $ 2,700 $ 2,781 $ 2,864 $ 2,950 $ 3,039 $ 3,130 $ 3,224 $ 3,321 $ 3,420 $ 3,523 $ 3,629 550400 Operating Supplies & Malls $ 185,000 $ 190,550 $ 196,267 $ 202,154 a 208,219 $ 214,466 $ 220,900 $ 227,527 $ 234,352 $ 241,383 $ 248,625 551000 Lab Chem Supplies $ 360,000 $ 370,800 $ 381,924 $ 393,382 $ 405,183 $ 417,339 $ 429,859 $ 442,755 $ 456,037 $ 469,718 $ 483,810 551500 Medical Supplies $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 552500 $750.5000 Mach & Equip $ 9,100 $ 9,373 $ 9,654 $ 9,944 $ 10,242 $ 10,549 $ 10,866 $ 11,192 $ 11,528 $ 11,873 $ 12,230 557100 Memberships/Subs/Lic Emp $ 875 $ 901 $ 928 $ 956 S 985 $ 1,014 $ 1,045 $ 1,076 $ 1,108 $ 1,142 $ 1,176 557200 Olficl Recognilior-Emp $ 110 $ 113 $ 117 $ 120 $ 124 $ 128 a 131 $ 135 $ 139 $ 144 $ 148 557300 Training & Ref Employee $ 12,240 $ 12,607 $ 12,985 $ 13,375 $ 13,776 $ 14,190 $ 14,615 $ 15,054 $ 15,505 $ 15,970 $ 16,450 564000 >$5,000 Machinery & Equip $ 36,000 a 37,080 $ 38,192 $ 39,338 $ 40,518 $ 41,734 $ 42,986 $ 44,275 $ 45,604 $ 46,972 $ 48,381 Total O&M Expenses $ 2,037,945 $ 2,116,387 $ 2,198,220 $ 2,283,609 $ 2,372,726 $ 2,465,752 $ 2,582,981 S 2,664,313 $ 2,770,260 $ 2,880,947 $ 2,996,609 TOTAL WATER SUPPLY DEPARTMENTAL EXPENSES 2,710,068 2,806,359 2,941,986 3,083,261 3,211,480 3,327,623 3,448,562 3,574,518 3,705,725 3,842,430 3,994,890 BURTON & ASSOCIATES 28 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Reclaimed Water Personal Services 510100 Full Time Salaries & Wages $ 609,970 $ 625,219 $ 640,850 $ 656,871 $ 676,577 $ 696,874 $ 717,781 $ 739,314 $ 761,493 $ 784,338 $ 807,868 510500 Overtime $ 21,630 $ 22,171 $ 22,725 $ 23,293 $ 23,992 $ 24,712 $ 25,453 $ 26,217 $ 27,003 $ 27,813 $ 26,648 520100 Life Ins $2500 Empl & Pens $ 150 $ 155 $ 159 $ 164 $ 169 $ 174 $ 179 $ 184 $ 190 $ 196 $ 202 5202001 % Life Insurance-Employee $ 890 $ 917 $ 944 $ 973 $ 1,002 $ 1,032 $ 1,063 $ 1,095 $ 1,127 $ 1,161 $ 1,196 520300 Samp Life Insurance $ 110 $ 113 $ 117 $ 120 $ 124 $ 126 $ 131 $ 135 $ 139 $ 144 $ 148 520400 Major Medical Ins-Emp $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 $ 93,000 520600 Social Security-Employee $ 8,270 $ 8,518 $ 8,774 $ 9,037 $ 9,308 $ 9,587 $ 9,875 $ 10,171 $ 10,476 $ 10,790 $ 11,114 520700 Emp Pension Plan $ 80,000 $ 84,161 $ 132,715 $ 168,548 $ 219,112 $ 284,846 $ 370,300 $ 481,390 $ 625,807 $ 813,549 $ 1,057,614 Additional Opeb Accrual $ 13,563 $ 13,970 $ 14,389 $ 14,821 $ 15,266 $ 15,723 $ 16,195 $ 16,681 $ 17,181 $ 17,697 $ 18,228 520900 Workers Compensation $ 10,020 $ 10,321 $ 10,630 $ 10,949 $ 11,278 $ 11,616 $ 11,964 $ 12,323 $ 12,693 $ 13,074 $ 13,466 Total Personal Services $ 837,603 $ 858,544 $ 924,303 $ 977,776 $ 1,049,827 $ 1,137,692 $ 1,245,941 $ 1,380,510 $ 1,549,111 $ 1,761,762 $ 2,031,483 O&M Expenses 543200 Other Promotion Actiwity $ 60,000 $ 61,800 $ 63,654 $ 65,564 $ 67,531 $ 69,556 $ 71,643 $ 73,792 $ 76,006 $ 78,286 $ 80,635 530100 Professional Services $ 35,000 $ 36,050 $ 37,132 $ 38,245 $ 39,393 $ 40,575 $ 41,792 $ 43,046 $ 44,337 $ 45,667 $ 47,037 540100 Garage Services $ 105,450 $ 108,614 $ 111,872 $ 115,228 $ 118,685 $ 122,245 $ 125,913 $ 129,690 $ 133,581 $ 137,588 $ 141,716 540200 Doc Repro & Print Shop Svc $ 7,000 $ 7,210 $ 7,426 $ 7,649 $ 7,879 $ 8,115 $ 8,358 $ 8,609 $ 8,867 $ 9,133 $ 9,407 540300 Telephone Service Variable $ 1,650 $ 1,700 $ 1,750 $ 1,803 $ 1,857 $ 1,913 $ 1,970 $ 2,029 $ 2,090 $ 2,153 $ 2,217 540500 Radio Svc-Fixed $ 4,830 $ 4,975 $ 5,124 $ 5,278 $ 5,436 $ 5,599 $ 5,767 $ 5,940 $ 6,118 $ 6,302 $ 6,491 540600 Telephone Svc Fixed $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 540900 Risk Mgmt Service $ 3,050 $ 3,142 $ 3,236 $ 3,333 $ 3,433 $ 3,536 $ 3,642 $ 3,751 $ 3,864 $ 3,980 $ 4,099 541000 Info Technology Charge $ 25,260 $ 26,018 $ 26,798 $ 27,602 $ 28,430 $ 29,283 $ 30,162 $ 31,067 $ 31,999 $ 32,959 $ 33,947 541500 Garage Variable $ 7,000 $ 7,210 $ 7,426 $ 7,649 $ 7,879 $ 8,115 $ 8,358 $ 8,609 $ 8,867 $ 9,133 $ 9,407 541800 Administrative Charge $ 204,830 $ 210,975 $ 217,304 $ 223,823 $ 230,538 $ 237,454 $ 244,578 $ 251,915 $ 259,473 $ 267,257 $ 275,274 542000 Employee Benefits-Fixed $ 2,170 $ 2,235 $ 2,302 $ 2,371 $ 2,442 $ 2,516 $ 2,591 $ 2,669 $ 2,749 $ 2,831 $ 2,916 542500 Postage $ 150 $ 155 $ 159 $ 164 $ 169 $ 174 $ 179 $ 184 $ 190 $ 196 $ 202 5428001nterfdOther ServChgs $ 143,120 $ 147,414 $ 151,836 $ 156,391 $ 161,083 $ 165,915 $ 170,893 $ 176,020 $ 181,300 $ 186,739 $ 192,341 542900 Intend Admin Service Chg $ 233,060 $ 240,052 $ 247,253 $ 254,671 $ 262,311 $ 270,180 $ 278,286 $ 286,634 $ 295,233 $ 304,090 $ 313,213 543400 Printing & Binding $ 400 $ 412 $ 424 $ 437 $ 450 $ 464 $ 478 $ 492 $ 507 $ 522 $ 538 543600 Taxes $ 210 $ 216 $ 223 $ 229 $ 236 $ 243 $ 251 $ 258 $ 266 $ 274 $ 282 545100Insurance $ 13,450 $ 13,854 $ 14,269 $ 14,697 $ 15,138 $ 15,592 $ 16,060 $ 16,542 $ 17,038 $ 17,549 $ 18,076 546200 Other Equip Svc & Repair $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 547100 Uniforms-Employee $ 4,650 $ 4,790 $ 4,933 $ 5,081 $ 5,234 $ 5,391 $ 5,552 $ 5,719 $ 5,890 $ 6,067 $ 6,249 547200 Travel Expense-Emp $ 1,850 $ 1,906 $ 1,963 $ 2,022 $ 2,082 $ 2,145 $ 2,209 $ 2,275 $ 2,344 $ 2,414 $ 2,466 547300 Mileage Reimbursement $ 300 $ 309 $ 318 $ 328 $ 338 $ 348 $ 358 $ 369 $ 380 $ 391 $ 403 547400 Meals-Employee $ 320 $ 330 $ 339 $ 350 $ 360 $ 371 $ 382 $ 394 $ 405 $ 418 $ 430 548000 Other SeNces Or Charges $ 100 $ 103 $ 106 $ 109 $ 113 $ 116 $ 119 $ 123 $ 127 $ 130 $ 134 550100Office Supplies $ 1,000 $ 1,030 $ 1,061 $ 1,093 $ 1,126 $ 1,159 $ 1,194 $ 1,230 $ 1,267 $ 1,305 $ 1,344 550400 Operating Supplies & Matls $ 35,000 $ 36,050 $ 37,132 $ 38,245 $ 39,393 $ 40,575 $ 41,792 $ 43,046 $ 44,337 $ 45,667 $ 47,037 552500 $750-5000 Mach & Equip $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 557100 Memberships/Subs/Lic Emp $ 260 $ 268 $ 276 $ 284 $ 293 $ 301 $ 310 $ 320 $ 329 $ 339 $ 349 557200 Officl Recognition-Emp $ 150 $ 155 $ 159 $ 164 $ 169 $ 174 $ 179 $ 184 $ 190 $ 196 $ 202 557300 Training & Ref Employee $ 5,040 $ 5,191 $ 5,347 $ 5,507 $ 5,673 $ 5,843 $ 6,018 $ 6,199 $ 6,385 $ 6,576 $ 6,773 Total O&M Expenses $ 895,600 $ 922,468 $ 950,142 $ 978,646 $ 1,008,006 $ 1,038,246 $ 1,069,393 $ 1,101,475 S 1,134,519 $ 1,168,556 $ 1,203,612 TOTAL RECLAIMED DEPARTMENTAL EXPENSES 1,73Y203 $ 1,781,012 111 1,8 4, 1,966,422 2,067,833 $ 2,1 ,938 2,315,3U $ 2,481,989 $ 2,683,630 $ ,930,317 3,235,095 Purchased Water Costa INV PURCHASE-RESALE $ 9,536,233 $ 9,388,521 $ 10,850,784 $ 10,941,261 $ 1 1,325,846 $ 5,957,990 $ 6,167,414 $ 6,384,198 $ 6,608,603 $ 6,840,895 $ 7,081,353 Total Purchased Water Costs S 9,536,233 $ 9,388,521 $ 10,860,784 $ 10,941,261 $ 11,325,846 $ 5,957,990 $ 6,167,414 $ 6,384,198 $ 6,608,603 $ 6,840,895 $ 7,081,353 BURTON & ASSOCIATES 29 City of Clearwater Utillty & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 5 - Projection of Cash Outflows APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Bond/Debt Service Cost Debt Service on Existing Re%enue Bonds $ 11,027,341 $ 10,420,545 $ 10,442,078 $ 10,460,703 $ 10,456,935 $ 10,440,670 $ 10,401,078 $ 10,451,619 $ 10,455,220 $ 10,455,968 $ 10,419,102 Series 2009 $ - $ 3,574,499 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 $ 3,535,219 Series 2011 $ - $ - $ - $ 2,274,000 $ 2,274,000 $ 2,274,000 $ 2,274,000 $ 2,274,000 $ 2,274,000 $ 2,274,000 $ 2,274,000 Series 2013 $ - $ - $ - $ - $ - $ 3,024,000 $ 3,024,000 $ 3,024,000 $ 3,024,000 $ 3,024,000 $ 3,024,000 New Calculated Payments for UP Projects $ 15,391 $ 34,701 $ 42,590 $ 42,590 $ 42,590 $ 36,275 $ 16,965 $ 24,909 $ 35,119 $ 43,008 $ 33,932 New Debt Service $ $ $ $ $ $ $ 648,955 $ 3,247,387 $ 3,913,809 $ 6,582,184 $ 7,268,187 Total Bond/Debt Service Cost $ 11,042,732 $ 14,029,745 $ 14,019,886 $ 16,312,611 $ 16,306,744 $ 19,310,164 $ 19,900,216 $ 22,557,134 $ 23,237,367 $ 25,914,378 $ 26,564,440 TransfersOut R&R Transfer Water Pollution Control $ 846,910 $ 842,417 $ 899,728 $ 935,240 $ 990,264 $ 1,032,908 $ 1,081,462 $ 1,123,190 $ 1,175,726 $ 1,223,149 $ 1,280,782 WW Collection $ 279,680 $ 278,196 $ 297,122 $ 308,850 $ 327,021 $ 341,103 $ 357,138 $ 370,918 $ 388,267 $ 403,928 $ 422,960 Water Distribution $ 1,788,000 $ 1,778,514 $ 1,899,510 $ 1,974,483 $ 2,090,650 $ 2,180,681 $ 2,283,187 $ 2,371,284 $ 2,482,198 $ 2,582,317 $ 2,703,993 PILOT Administration $ 87,268 $ 93,592 $ 98,656 $ 104,582 $ 110,248 $ 116,278 $ 121,225 $ 126,430 $ 131,903 $ 137,655 $ 143,697 WW Collection $ 367,680 $ 394,326 $ 415,669 $ 440,629 $ 464,499 $ 489,907 $ 510,749 $ 532,679 $ 555,739 $ 579,973 $ 605,431 WW Maintenance $ 292,497 $ 313,693 $ 330,672 $ 350,529 $ 369,518 $ 389,730 $ 406,310 $ 423,756 $ 442,100 $ 461,379 $ 481,631 WPC Operations $ 651,252 $ 698,448 $ 736,251 $ 780,462 $ 822,742 $ 867,746 $ 904,662 $ 943,505 $ 984,349 $ 1,027,275 $ 1,072,367 Laboratory $ 152,213 $ 163,244 $ 172,079 $ 182,413 $ 192,294 $ 202,813 $ 211,441 $ 220,520 $ 230,066 $ 240,099 $ 250,638 Industrial Pretreatment $ 102,598 $ 110,033 $ 115,989 $ 122,954 $ 129,615 $ 136,705 $ 142,520 $ 148,640 $ 155,074 $ 161,837 $ 168,941 Water Distribution $ 637,151 $ 683,324 $ 720,309 $ 763,563 $ 804,927 $ 848,957 $ 885,074 $ 923,076 $ 963,035 $ 1,005,031 $ 1,049,147 Water Supply $ 197,590 $ 211,909 $ 223,378 $ 236,792 $ 249,620 $ 263,274 $ 274,474 $ 286,259 $ 298,651 $ 311,675 $ 325,356 Reclaimed $ 272,131 $ 291,852 $ 307,649 $ 326,123 $ 343,790 $ 362,595 $ 378,021 $ 394,252 $ 411,319 $ 429,255 $ 448,097 Total Transfers Out $ 5,674,970 $ 5,859,550 $ 6,217,014 $ 6,526,620 $ 6,895,187 $ 7,232,897 $ 7,556,265 $ 7,864,507 $ 8,218,427 $ 8,563,572 $ 8,953,040 Capital Outlay Wastewater Collection Principal-Leased Equipment $ 9,610 $ 50,120 $ 24,880 $ - $ - $ - $ - $ - $ - $ - $ - Interest-Leased Equipt $ 230 $ 2,060 $ 400 $ - $ - $ - $ - $ - $ - $ - $ - Wastewater Maintenance Principal-Leased Equipment $ 40,510 $ 41,725 $ 42,977 $ 44,266 $ 45,594 $ 46,962 $ 48,371 $ 49,822 $ 51,317 $ 52,856 $ 54,442 Interest-Leased Equipt $ 1,830 $ 1,885 $ 1,941 $ 2,000 $ 2,060 $ 2,121 $ 2,185 $ 2,251 $ 2,318 $ 2,388 $ 2,459 WPC Laboratory Operations Principal-Leased Equipment $ 9,620 $ 10,056 $ 10,515 $ 8,200 $ - $ - $ - $ - $ - $ - $ - Interest-Leased Equipt $ 1,560 $ 1,122 $ 664 $ 184 $ - $ - $ - $ - $ - $ - $ - Water Distribution Principal-Leased Equipment $ 18,300 $ 15,004 $ 14,300 $ 9,187 $ - $ - $ - $ - $ - $ - $ - Interest-Leased Equipt $ 2,160 $ 1,473 $ 837 $ 216 $ - $ - $ - $ - $ - $ - $ - WaterConsemtion Deuces $ - $ - $ - $ - $ $ $ $ $ $ $ Water Supply Principal-Leased Equipment $ 63,440 $ 63,440 $ 40,090 $ - $ - $ 3,651 $ 7,524 $ 7,830 $ 8,148 $ 8,479 $ 4,368 Interest-Leased Equipt $ 3,010 $ 3,010 $ 670 $ - $ - $ 782 $ 1,342 $ 1,036 $ 719 $ 388 $ 66 Reclaimed Water Principal-Leased Equipment $ 17,990 $ 20,916 $ 25,134 $ 26,402 $ 35,886 $ 18,429 $ 10,760 $ 7,361 $ 3,789 $ - $ - Interest-Leased Equipt $ 2,720 $ 3,264 $ 6,112 $ 3,520 $ 2,444 $ 1,266 $ 664 $ 329 $ 56 $ $ - Total Capital Outlay $ 170,980 $ 214,075 $ 168,621 $ 93,975 $ 85,984 $ 73,212 $ 70,846 $ 68,629 $ 66,347 $ 84,111 $ 61,335 Total O&M, Debt Service, Transfers, & Capital Outlay 802,737 $ 63,660,536 $ 57,641,941 $ 60,816,407 $ 64,985,188 $66, 900,308 $ 66,863,381 $ 68,246,176 $ 72,662,676 $ 76,209,816 $ 79,848,573 $82, Note: Projected Senior Lien Debt Service for revenue bonds rued In FY 2009, FY 2011, and FY 2013 are per the debt service schedules provided by Raymond James & Associates. BURTON & ASSOCIATES 30 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 6 - Additional Incremental 0&M APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2017 FY 2015 FY 2019 s Incremental O & M Expenditure 96624 - Liquid Disinfection $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 966M- WPC W Disinfection $ - $ - $ - $ - $ - $ - $ - $ - $ 403,895 $ 424,090 $ 445,295 96739 - Reclaimed Water Distribution System $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 96757- Water Pick Up Trucks $ 9,370 $ 9,270 $ 9,270 $ 18,760 $ 18,760 $ 9,490 $ 9,490 $ 9,490 $ 9,490 $ 9,490 $ 9,490 96758-Rounds In Water System $ - $ - $ - $ - $ - $ - $ - $ 17,364 $ 18,233 $ 19,144 $ 20,101 96760 - Ele%ated Water Tanks Upgrade $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 96764- RO Plant Expansion Res. #1 $ - $ - $ - $ 498,400 $ 523,820 $ 550,536 $ 578,615 $ 608,126 $ 639,143 $ 671,741 $ 706,002 96767- RO Plant r@ Res. #2 $ - $ - $ - $ - $ - $ 2,299,870 $ 2,368,866 $ 2,439,932 $ 2,513,130 $ 2,588,524 $ 2,666,180 RO Plant Pick-Up Trucks $ - $ - $ - $ - $ - $ 12,691 $ 13,072 $ 13,464 $ 13,868 $ 14,284 $ 14,712 Additional Wells in FY 2010 $ - $ 66,150 $ 70,119 $ 74,326 $ 78,786 $ 83,513 $ 88,524 $ 93,835 $ 99,465 $ 105,433 $ 111,759 Thermal Dryers $ - $ - $ - $ - $ - $ - $ - $ - $ 426,615 $ 426,615 $ 447,946 Engineering SeNces Reallocation $ - $ 55,430 $ 57,093 $ 58,806 $ 60,570 $ 62,387 $ 64,259 $ 66,186 $ 68,172 $ 70,217 $ 72,324 Net Pension Adjustment $ 650,000 $ 650,000 $ $ - $ $ $ $ $ $ - $ Total Incremetal O 6 M Expenditures $ 659,370 $ 780,860 $ 136,482 $ 650,292 $ 681,935 $ 3,018,487 $ 3,122,825 $ 3,248,398 $ 4,192,011 $ 4,329,536 $ 4,493,608 BURTON & ASSOCIATES 31 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 7 - FAMSAL © Control Panel APPENDIX Cit V of Clearwater, FL - Water & Sewer System check $0 SAVE CALC Cumulati ve Ovenlde-> 0.00% 7. 0 0' 7.00% 6.00% . 0' , 4.50% 4.50% 4.50% 0' . EY2014 EY2M Water Rate Increases 0.00% 7.00% 7.00% 6.00% 6.00% 4.5016 4.50% 4.50% 4.50% 4.50% 4.50676 34.43% 67.52°/ Last Plan override-> N. ..' Irrigation Rate increases 0.00% 7.00% 7.00% 6.00% 6.000/6 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 34.43% 67.52°/ Last Plan override-> t tt' ?? tt', ij? tt' , ?r', t• t', t, Sewer Rate increases 0.00% 7.00% 7.00% 6.00% 6.00% 4.50% 4.50% 460% 4.60% 4.50% 4.50%/ 34.43% 67.52% Last Plan Water & Sewer Rate Plan 0.00% 7.00% 7.00% 6.00%/ 6.00% 4.60% 4.50% 4.50% 4.WY. 4.50% 4.50% 34.43% 67.52%/. Last Plan Current DS Coverage 1.62 1.44 1.55 1.40 1.51 1.53 1.56 1.45 1.45 1.37 1.41 Salary% Inc. 2.5% Courage Required: 1.1511.20 1.20 1.16 1.20 1.15 1.20 1.15 1.20 1.15 1.20 1.15 1.20 O&M FY 09 100% Last Plan O&M FY 10 -> 100% CIP EXECUTION % 100% 100°/ 100% 100% 100% 10-01/. 100% 100% 100% 100% 100% WraplLevel/NA Wrap Monthly Water Bill 24.69 26.42 28.27 29.96 31.76 33.19 34.68 36.25 37.88 39.58 41.36 Monthly Sever Bill 31.25 33.44 35.78 37.92 40.20 42.01 43.90 45.88 47.94 50.10 52.35 Weather Norm N/A Total Bill $55.94 $59.86 $64.05 $67.89 $71.96 $75.20 $78.58 $82.12 $85.82 $89.68 $93.71 PILOT An. Incr. 5.50% Last Total Blll 94 m,1' Kpo . ft-051j? W 09 3, 1 Inc. to 542800 3 Monthly Reclaimed Bill 1523.58 $25.23 $27.00 28,62 53033 1.70 $33.12 $34.02 536.17 7.80 $39,50 Pinellas CORI Plan2 Interim Financing N Y N Y N Y N Y N Y N Reserve Ta rget Revenue Bond Y N Y N Y N Y N Y N Y 3 Mos O&M ivl Pro'ects eren lclP ¦LaatPhn LOng-T@rffl BOrIOVIrIng R@f1Uir@d •ParA--t •Lap PI- M,Ierin Fnaminq RequRed ¦ParAmunt ¦Lam Plan 380 $80 $60 $80 Unrestricted Reserves 111111111111G.-t®L.e PYn -Ta19at Revenwand ExPeneea C.a Out -Caah In knpec[Fee Balances ?Warerlmpad Feea ?Sewerlmpatl Feea $30 $100 $20 1$90 $80 I si o $70 $60 so ss0 06 09 10 11 12 18 14 15 16 17 18 19 09 10 it 12 13 14 15 16 17 16 19 r BURTON & ASSOCIATES 32 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 8 - Pro Forma APPENDIX 1 Revenue 2 Revenue Subject to Rate Increases FY 2009 191 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 3 Water, Lawn Irrigation & Sewer Rate Revenue $ 50,612,913 $ 50,345,295 $ 52,909,836 $ 56,008,178 $ 59,088,979 $ 62,377,349 $ 65,063,691 $ 67,890,943 $ 70,864,513 $ 73,990,185 $ 77,274,122 4 Rate Revenue from Growth $ (267,618) $ (342,772) $ (30,412) $ 181,718 $ 189,212 $ 199,684 $ 208,342 $ 217,477 $ 227,106 $ 237,249 $ 247,927 5 Normalization & Elasticity Adjustments $ - $ (554,077) $ (535,332) $ (445,577) $ (431,635) $ (315,128) $ (304,624) $ (295,489) $ (287,614) $ (280,905) $ (275,282) 6 Proposed Rate Increase 0.00% 7.00% 7.00% 6.00% 6.00% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 7 Rate Revenue from Rate Increase $ $ 3,461,391 $ 3,664,086 $ 3,344,659 $ 3,530,793 $ 2,801,786 $ 2,923,533 $ 3,051,582 $ 3,186,180 $ 3,327,594 $ 3,476,105 8 Total Water, Lawn Irrigation & Sewer Rate Revenue $ 50,345,295 $ 52,909,836 $ 56,008,178 $ 59,088,979 $ 62,377,349 $ 65,063,691 $ 67,890,943 $ 70,864,513 $ 73,990,185 $ 77,274,122 $ 80,722,871 9 Other Operating Revenue 10 Other Operating Revenue (2) $ 3,480,555 $ 3,829,323 $ 4,138,119 $ 4,315,610 $ 4,495,466 $ 4,654,087 $ 4,820,254 $ 4,994,333 $ 5,176,710 $ 5,367,788 $ 5,567,992 11 Total Operating Revenue $ 53,825,850 $ 56,739,160 $ 60,146,298 $ 63,404,589 $ 66,872,815 $ 69,717,778 $ 72,711,197 $ 75,858,846 $ 79,166,895 $ 82,641,910 $ 86,290,863 12 Expenses 13 Purchased Water Expense $ 9,536,233 $ 9,388,521 $ 10,850,784 $ 10,941,261 $ 11,325,846 $ 5,957,990 $ 6,167,414 $ 6,384,198 $ 6,608,603 $ 6,840,895 $ 7,081,353 14 Operations and Maintenance Expense $ 27,894,990 $ 28,930,900 $ 29,695,685 $ 31,661,112 $ 32,966,483 $ 36,407,785 $ 37,674,200 $ 39,026,606 $ 41,271,082 $ 42,795,154 $ 44,446,377 15 Net Operating Income $ 16,394,626 $ 18,419,738 $ 19,599,829 $ 20,802,215 $ 22,580,486 $ 27,352,003 $ 28,869,583 $ 30,448,041 $ 31,287,210 $ 33,005,861 $ 34,763,133 16 Plus: Non Operating Income (Expense) 17 Non Operating Revenue $ - $ - $ - $ - $ - $ - $ - $ - $ $ $ ' 1s Interest on Revenue Fund Balances $ 1,457,441 $ 1,681,672 $ 2,109,614 $ 1,935,595 $ 2,012,405 $ 2,056,686 $ 2,235,008 $ 2,310,347 $ 2,402,950 $ 2,451,035 $ 2,542,651 19 Less: Interim Financing Interest Payments $ - $ (438,276) $ (328,707) $ (968,711) $ (726,533) $ (680,617) $ (510,463) $ (861,372) $ (646,029) $ (905,081) $ (678,811) 20 Water Expansion Fees $ 79,800 $ - $ 79,968 $ 80,288 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 21 Sewer Expansion Fees $ 140,510 $ - $ 140,940 $ 141,504 $ 142,070 $ 142,638 $ 143,209 $ 143,781 $ 144,357 $ 144,934 $ 145,514 22 Grant Funding Reimbursements $ - $ - $ - $ - $ - $ - $ - $ $ $ $ - 23 Projected Bond Proceeds from FY 2009 Revenue Bond Issue $ 60,133,842 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 24 Projected Bond Proceeds from FY 2011 Revenue Bond Issue $ - $ - $ 20,069,309 $ - $ - $ - $ - $ - $ - $ - $ - 25 Projected Bond Proceeds from FY 2013 Revenue Bond Issue $ - $ - $ - $ - $ 21,925,953 $ - $ - $ - $ - $ - $ - 26 Transfers In $ - $ $ $ $ $ - $ $ - $ $ $ - 27 Total Non Operating Income $ 61,811.593 $ 1,243,396 $ 22,071,124 $ 1,188,675 $ 23,434,504 $ 1,599,639 $ 1,949,009 $ 1,674,337 $ 1,983,185 $ 1,773,122 $ 2,091,917 2e Net Income $ 78,206,220 $ 19,663,135 $ 41,670,953 $ 21,990,890 $ 46,014,989 $ 28,951,642 $ 30,818,592 $ 32,122,378 $ 33,270,394 $ 34,778,983 $ 36,855,051 29 Less: Water & Sewer Expansion Fees $ (220,310) $ - $ (220,908) $ (221,792) $ (222,679) $ (223,570) $ (224,464) $ (225,362) $ (226,263) $ (227,168) $ (228,077) 30 Less: Grant Funding Reimbursements $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 31 Less: Projected Bond Proceeds $(60,133,842) $ - $(20,069,309) $ - $(21,925,953) $ - $ - $ - $ - $ - $ - 32 Less: Transfers In $ $ $ $ $ $ $ $ $ $ $ 33 Net Income Available for Debt Service $ 17,852,068 $. 19,663,135 $ 21,380,736 $ 21,769,099 $ 23,866,357 $ 28,728,073 $ 30,594,128 $ 31,897,016 $ 33,044,131 $ 34,551,815 $ 36,626,974 34 S enior Lien Debt Service Coverage 35 Existing Senior Lien Debt $ 11,027,341 $ 10,420,545 $ 10,442,078 $ 10,460,703 $ 10,456,935 $ 10,440,670 $ 10,401,078 $ 10,451,619 $ 10,455,220 $ 10,455,968 $ 10,419,102 36 Total Existing Senior Lien Debt $ 11,027,341 $ 10,420,545 $ 10,442,078 $ 10,460,703 $ 10,456,935 $ 10,440,670 $ 10,401,078 $ 10,451,619 $ 10,455,220 $ 10,455,968 $ 10,419,102 37 New Senior Lien Debt - Input $ - $ 3,574,499 $ 3,535,219 $ 5,809,219 $ 5,809,219 $ 8,833,219 $ 8,833,219 $ 8,833,219 $ 8,833,219 $ 8,833,219 $ 8,833,219 38 Cumulative New Senior Lien Debt for Additional Borrowings $ - $ $ $ $ $ - $ 648,955 $ 3,247,387 $ 3,913,809 $ 6,582,184 $ 7,268,187 39 Total Senior Lien Debt Service $ 11,027,341 $ 13,995,044 $ 13,977,296 $ 16,269,921 $ 16,266,154 $ 19,273,889 $ 19,1183,251 $ 22,532,225 $ 23,202,248 $ 25,871,370 $ 26,520,508 40 Senior Lien Debt Service Coverage 1.15 Req'd 1.62 1.41 1.53 1.34 1.47 1.49 1.54 1.42 1.42 1.34 1.38 41 Parity 1.2 Req'd 1.62 NA 1.55 NA 1.51 NA 1.56 NA 1.45 NA 1.41 BURTON & ASSOCIATES 33 City of Clearwater Utility & Governmental Economics Final Report Schedule 8 - Pro Forma FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS APPENDIX City of Clearwater, Florida t P Water & Managemen Wastewater System Financial rogram Forecast of Net Revenues and Debt Service .• FY 2008111 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2018 Revenue Net Income Available for Debt Service $ 17,852,068 $ 19,663,135 $ 21,380,736 $ 21,769,099 $ 23,866,357 $ 28,728,073 $ 30,594,128 $ 31,897,016 $ 33,044,131 $ 34,551,815 $ 36,626,974 Add: Transfers In $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Less: Total Senior Lien Debt Service $(11,027,341) $(13,995,044) $(13,977,296) $(16,269,921) $(16,266,154) $(19,273,889) $(19,883,251) $(22,532,225) $(23,202,248) $(25,871,370) $(26,520,508) State Rewhing Loans $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Payment of Debt Service With Water Impact Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Payment of Debt Service With Sewer Impact Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Transfer Out $ (2,760,380) $ (2,960,422) $ (3,120,654) $ (3,308,046) $ (3,487,252) $ (3,678,005) $ (3,834,478) $ (3,999,116) $ (4,172,237) $ (4,354,179) $ (4,545,305) Short-Term Debt Service $ (15,391) $ (34,701) $ (42,590) $ (42,590) $ (42,590) $ (36,275) $ (16,965) $ (24,909) $ (35,119) $ (43,008) $ (33,932) Capital Outlay $ (170,980) $ (214,075) $ (168,521) $ (93,975) $ (85,984) $ (73,212) $ (70,846) $ (68,629) $ (66,347) $ (64,111) $ (61,335) Renewal & Replacement $ (2,914,590) $ (2,899,128) $ (3,096,360) $ (3,218,574) $ (3,407,934) $ (3,554,692) $ (3,721,787) $ (3,865,391) $ (4,046,191) $ (4,209,393) $ (4,407,735) Net Cash Flow $ 963,385 $ (440,236) $ 975,315 $ (1,164,008) $ 576,443 $ 2,112,000 $ 3,066,801 $ 1,406,747 $ 1,521,989 $ 9,753 $ 1,058,159 Unrestricted Reserve Fund- Beginning of Year Balance $ 26,763,811 $ 11,227,502 $ 9,579,855 $ 10,555,171 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 Minimum Working Capital Reserve Target $ 9,357,806 $ 9,579,855 $ 10,136,617 $ 10,650,593 $ 11,073,082 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 12,409,012 $ 12,881,932 Reserve Fund Balance in Excess of Working Capital Target $ 17,406,005 $ 1,647,647 $ - $ - $ - $ - $ - $ - $ - $ - $ - Less: Reserve Fund Balance used for Cash Flow $ $ - $ $ $ - $ $ $ - $ - $ - $ - Reserve Fund Balance in Excess of Working Capital Target Net of Current Year Cash Flow $ 17,406,005 $ 1,207,411 $ - $ - $ - $ - $ - $ - $ - $ - $ - Net Cash Flow After Use of Reserve Funds $ 963,385 $ 0 $ 975,315 $ (1,164,008) $ 576,443 $ 2,112,000 $ 3,066,801 $ 1,406,747 $ 1,521,989 $ 9,753 $ 1,058,159 Less: CIP Projects Designated to be Paid with Cash $ $ $ $ $ - $ $ $ $ $ $ Net Cash Flow to Unrestricted Reserve Fund $ 963,385 $ 0 $ 975,315 $ (1,164,008) $ 576,443 $ 2,112,000 $ 3,066,801 $ 1,406,747 $ 1,521,989 $ 9,753 $ 1,058,159 Unrestricted Reserve Fund - Beginning of Year Balance $ 26,763,811 $ 11,227,502 $ 9,579,855 $ 10,555,171 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 Cash In(Out) from Rate Revenues $ 963,385 $ 0 $ 975,315 $ (1,164,008) $ 576,443 $ 2,112,000 $ 3,066,801 $ 1,406,747 $ 1,521,989 $ 9,753 $ 1,058,159 Less: Reserve Fund Balance used for Cash Flow $ - $ (440,236) $ - $ - $ - $ - $ - $ - $ - $ - $ - Plus, R&R Contribution $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Less: Projects Paid with Reserve Funds (Non Specified Funding) $(16,499,694) $ (1,207,411) $ $ - $ - $ (1,488,162) $ (2,697,842) $ (1,014,449) $ (904,769) $ - $ (155,901) Unrestricted Reserve Fund - End of Year Balance $ 11,227,502 $ 9,579,855 $ 10,555,171 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 $ 12,881,932 Min. Working Cap. Res. Target (O&M, PW) 3 # of Mos. $ 9,357,806 $ 9,579,855 $ 10,136,617 $ 10,650,593 $ 11,073,082 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 12,409,012 $ 12,881,932 Excess(Deficiency)of Worldng Capital Reserves to Target $ 1,869,696 $ - $ 418,554 $ (1,259,430) $ (1,105,476) $ - $ - $ - $ - $ (429,338) $ - (1) FY 2009 rate revenues reflect the 6% rate adjustment that was effective October 1, 2008. No additional rate increase was proposed for FY 2009. (2) Other operating revenues includes specific service charge revenues, reclaimed revenue, Safety Harbor payments, collection fee charges, rents/leases and other miscellaneous operating revenues. Note: Projected Bond Proceeds for revenue bonds issued in FY 2009, FY 2011, and FY 2013 are net of interim financing proceeds. BURTON & ASSOCIATES 34 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 9 - Projected CIP Funding Sources APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Sources Water Impact Fees $ 1,221,951 $ 250,000 $ 250,000 $ 230,608 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Sewer Impact Fees $ 3,793,998 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 306,316 $ 143,781 $ 144,357 $ 144,934 $ 145,514 Reclaimed Grant Funding $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ - Capital Improvements Fund (Bond Proceeds Fund) $ 60,133,842 $ - $ 20,069,309 $ - $21,925,953 $ - $ - $ - $ - $ - $ - Renewal & Replacement $ 2,914,590 $ 2,899,128 $ 1,200,031 $ 5,114,903 $ 2,996,138 $ 3,966,489 $ 3,721,787 $ 3,865,391 $ 4,046,191 $ 4,209,393 $ 4,407,735 Revenue Fund $ 16,499,694 $ 1,207,411 $ - $ - $ $ 1,488,162 $ 2,697,842 $ 1,014,449 $ 904,769 $ - $ 155,901 Interim Financing $ - $14,609,191 $ - $ 24,217,779 $ - $17,015,417 $ - $21,534,299 $ - $ 22,627,021 $ - Debt Proceeds $ - $ - $ - $ - $ - $ - $ 25,753,976 $ - $ 22,386,310 $ - $ 22,584,046 CIP Projects Designated to be Paid with Cash $ $ $ $ $ $ $ - $ $ $ - $ Total Projects Paid $ 84,564,075 $19,465,730 $ 22,019,340 $ 30,063,290 $25,502,700 $23,051,000 $ 32,561,176 $26,639,501 $ 27,563,533 $ 27,063,582 $ 27,375,759 Total CIP Input $ 84,564,075 $19,465,730 $ 22, 019, 340 $ 30, 063,290 $25,502,700 $23,051,000 $ 32, 561,176 $26,639,501 $ 27, 563, 533 $ 27, 063, 582 $ 27, 375, 759 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - BURTON & ASSOCIATES 35 City of Clearwater Utility& Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 10 - Long-Term Borrowing Projections APPENDIX Revenue Bond Borrowing Projections FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2016 FY 2016 FY 2017 FY 2016 FY 2019 Term If 30 30 Interest 1 5.50%1 5.50%I 5.50%I 5.50%1 5.50%I 5.50%I 5.50%I 5.50%I 5.50%I 5.50%I 5.50%I Sources of Funds Par Amount $ - $ - $ - $ - $ - $ - $ 47,196,697 $ - $ 48,467,083 $ - $ 49,891,123 Interest During Construction $ $ $ $ $ $ $ $ E $ E Total Sources $ - $ - $ - $ - $ - $ - $ 47,196,697 $ - $ 48,467,083 $ - $ 49,891,123 Uses of Funds Current Year Project Proceeds $ - $ - $ - $ - $ - $ - $ 25,753,976 $ - $ 22,386,310 $ - $ 22,584,046 Refinanced Interim Financing Pnncipal $ - $ - $ - $ $ $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 Cost of Issuance 2.50% of Par $ - $ - $ - $ - $ $ - $ 1,179,917 $ $ 1,211,677 $ - E 1,247,276 Underwriter's Discount $0.00 per$1,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - Bond Insurance 0 times total DS $ - $ - $ - $ $ $ - $ - $ - $ - $ - $ - Capitalized Interest 0 Years Interest $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ - Debt Service Reserve 1 Years Debt Sermce $ $ - $ - $ $ $ - $ 3,247,387 $ - $ 3,334,797 $ - $ 3,432,778 Accrued Interest on Interim Financing $ $ $ $ $ $ E $ $ $ $ Total Uses $ - $ - $ - $ - $ - $ - $ 47,196,697 $ - $ 48,467,083 $ - $ 49,891,123 1 Year Interest $ - $ - $ $ - $ - $ $ 2,595,818 $ - $ 2,665,690 $ - $ 2,744,012 Annual Debt Senlce $ $ $ $ $ $ $ 3,247,387 $ $ 3,334,797 $ $ 3,432,778 Total Debt Senlce $ - $ - $ - $ - $ - $ - $ 97,421,610 $ - $ 100,043,910 $ - $ 102,983,340 Interest During Construction Calculation Beginning Construction Fund Balance $ - $ - $ - $ $ - $ $ 47,196,697 $ - $ 48,467,083 $ - $ 49,891,123 Less: Use of Proceeds $ $ $ $ $ $ $ (47,196,697) $ $ (48,467,083) $ $ (49,891,123) Ending Fund Balance $ - $ - $ - $ - $ - $ $ - $ - $ - $ - $ - Average Balance $ $ $ $ $ $ $ 23,598,349 $ $ 24,233,542 $ $ 24,945,562 Interest Earnings Rate 3.00% 3.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Tenn of Average Balance 0 Months $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Proceeds Excluding Accrued Interest Interim Financing Refinanced Each Year w/ Accrued Int. Cumulative Interim Financing Re-financed Unfunded Project Amounts Interim Financing Proceeds Cumulative Interim Financing Cumulative Interim Financing Not Re-Financed to date Note: Does not S $ $ 14,609,191 $ $ 24,217,779 $ $ 42,769,393 $ $ 43,920,609 $ $ 45,211,067 $ - $ 15,801,301 $ $ 26,193,950 $ - $ 18,403,875 $ - $ 23,291,498 $ - $ 24,473,386 $ $ $ 14,609,191 $ 14,609,191 $ 38,826,970 $ 38,826,970 $ 55,842,387 $ 55,842,387 $ 77,376,686 $ 77,376,686 $ 100,003,707 $ $ $ E $ $ $ 25,753,976 $ $ 22,386,310 $ $ 22,584,046 $ - $ 14,609,191 $ - $ 24,217,779 $ $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - $ - $ 14,609,191 $ 14,609,191 $ 38,828,970 $ 38,826,970 $ 55,842,387 $ 55,842,387 $ 77,376,686 $ 77,376,686 $ 100,003,707 $ 100,003,707 $ $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - BURTON & ASSOCIATES 36 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 11 - Interim Financing Projections APPENDIX terim Financing Projections FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Tenn (Years) 1 1 1 1 1 1 1 1 1 1 1 Interest Rate 3.00% 3.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Sources of Funds Par Amount $ - $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - Interest During Construction $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Total Sources $ - $. 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - Uses of Funds Proceeds $ - $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - Cost of Issuance 0.00% of Par $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Undernritervs Discount $0.00 per $1,000 $ - $ - $ - a - $ - $ - $ - $ - $ - $ - $ - Bond Insurance 0 times total DS $ - $ - $ - $ - $ - $ - $ - $ - S - $ - $ - Capitalized Interest 0 Years Interest $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Debt Service Reserve 0 Years Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Other Costs $ $ $ $ $ $ $ $ $ - $ - $ - Total Uses $ - $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - 1 Year Interest $ $ 438,276 $ $ 968,711 $ $ 680,617 $ - $ 861,372 $ - $ 905,081 $ Annual Debt Service $ $ 438,276 $ $ 968,711 $ $ 680,617 $ $ 861,372 $ - $ 905,081 $ - Total Debt Service $ - $ 438,276 $ - $ 968,711 $ - $ 680,617 $ - $ 861,372 $ - $ 905,081 $ - Interest During Construction Calculation Beginning Construction Fund Balance $ - $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ - Less: Use of Proceeds $ $ (14,609,191) $ $ (24,217,779) $ $ (17,015,417) $ - $ (21,534,299) $ $ (22,627,021) $ Ending Fund Balance $ - $ - $ - $ - $ - $ - 3 - $ - $ - $ - $ - Average Balance $ - $ 7,304,596 $ - $ 12,108,690 $ - $ 8,507,709 $ - $ 10,767,150 $ - $ 11,313,511 $ - Interest Earnings Rate 3.00% 3.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Tenn of Average Balance 0 Months $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Proceeds $ - $ 14,609,191 $ - $ 24,217,779 $ - $ 17,015,417 $ - $ 21,534,299 $ - $ 22,627,021 $ BURTON & ASSOCIATES 37 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 12 - Short-Term Borrowing Projections APPENDIX hort-Term Note/Loan Borrowina Prolections FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2016 FY 2016 FY 2017 FY 2018 FY 2019 I I 1 I I I I I Interest 3.00% 3.00% 4.00% 4.00% 4.00% 4.. 4.00% 4.00% 4.00% 4.00% 4.00% Sources of Funds ParAmount $ 70,485 $ 88,434 $ 35,121 $ - $ - $ 40,404 $ - $ 70,485 $ 45,455 $ 35,121 $ - Interest During Construction $ $ - $ $ - $ - $ - $ - $ - $ - $ - $ - Total Sources $ 70,485 $ 88,434 $ 35,121 $ - $ - $ 40,404 $ - $ 70,485 $ 45,455 $ 35,121 $ - Uses of Funds Proceeds $ 69,780 $ 87,550 $ 34,770 $ - $ - $ 40,000 $ - $ 69,780 $ 45,000 $ 34,770 $ - Cost of Issuance 1.00% of par $ 705 $ 884 $ 351 $ - $ - $ 404 $ - $ 705 $ 455 $ 351 $ - Underwriters Discount $0.00 per $1,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bond Insurance 0 times total DS $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Capdalized Interest 0 Years Interest $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Debt Service Reserve 0 Years Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Other costs $ $ $ $ $ $ $ $ $ $ $ Total Uses $ 70,485 $ 88,434 $ 35,121 $ - $ - $ 40,404 $ - $ 70,485 $ 45,455 $ 35,121 $ - 1 Year Interest $ 2,115 $ 2,653 $ 1,405 $ - $ - $ 1,616 $ - $ 2,819 $ 1,818 $ 1,405 $ - Annual Debt Service $ 15,391 $ 19,310 $ 7,889 $ - $ - $ 9,076 $ - $ 15,833 $ 10,210 $ 7,889 $ - Total Debt Service $ 76,955 $ 96,550 $ 39,445 $ - $ - $ 45,380 $ - $ 79,165 $ 51,050 $ 39,445 $ - Interest During Construction Calculation Beginning Construction Fund Balance $ 70,485 $ 88,434 $ 35,121 $ - $ - $ 40,404 $ - $ 70,485 $ 45,455 $ 35,121 $ - Less :UseofProceeds $ (70,485) $ (88,434) $ (35,121) $ $ $ (40,404) $ $ (70,485) $ (45,455) $ (35,121) $ - Ending Fund Balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Averege Balance $ 35,243 $ 44,217 $ 17,561 $ - $ - $ 20,202 $ - $ 35,243 $ 22,728 $ 17,561 $ - Interest Earnings Rate 3.00% 3.00% 4.00% 4.00% 4,00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Term of Average Balance 0 Months $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bundle Bonds for 1 Year $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bundled Debt $ 69,780 $ 87,550 $ 34,770 $ - $ - $ 40,000 $ - $ 69,780 $ 45,000 $ 34,770 $ - Proceeds from Capital Funding $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Proiect Description FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 316192827 Global Pos System Surrey Equipment $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 316192828 PW Field Laptops $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 316-96610 Portable Generators $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Annual Lease Purchase Equipment $ 69,780 $ 45,000 $ 34,770 $ - $ - $ 40,000 $ - $ 69,780 $ 45,000 $ 34,770 $ - 316-96762 Water Generators $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Respirators -Safety Equipment b $ 42,550 $ - $ - $ - $ - $ - $ - $ - $ $ - Total $ 69,780 $ 87,550 $ 34,770 $ - $ - $ 40,000 $ - $ 69,780 $ - $ - $ - Total Annual Cost -'09 Proj. $ 15,391 $ 15,391 $ 15,391 $ 15,391 $ 15,391 $ - $ - $ - $ - $ - $ - Total Annual Cost -'10 Proj. $ - $ 19,310 $ 19,310 $ 19,310 $ 19,310 $ 19,310 $ - $ - $ - $ - $ - Total Annual Cost -'11 Proj. $ - $ - $ 7,889 $ 7,889 $ 7,889 $ 7,889 $ 7,889 $ - $ - $ - $ - Total Annual Cost -'12 Proj. $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Annual Cost -'13 Proj. $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Annual Cost -'14 Proj. $ - $ - $ - $ - $ - $ 9,076 $ 9,076 $ 9,076 $ 9,076 $ 9,076 $ - Total Annual Cost -15 Proj. $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Annual Cost -'16 Proj. $ - $ - $ - $ - $ - $ - $ - $ 15,833 $ 15,833 $ 15,833 $ 15,833 Total Annual Cost -17 Proj. $ - $ - $ - $ - $ - $ - $ - $ - $ 10,210 $ 10,210 $ 10,210 Total Annual Cost -'18 Proj. $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 7,889 $ 7,889 Total Annual Cost -19 Proj. $ $ $ - $ $ $ $ $ b $ $ - Total Annual ST Debt Service Expense $ 15,391 $ 34,701 $ 42,590 $ 42,590 $ 42,590 $ 36,275 $ 16,965 $ 24,909 It 35,119 $ 43,008 $ 33,932 BURTON & ASSOCIATES 38 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 13 - Funding Summary by Fund APPENDIX FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Water Impact Fees Beginning Balance $ 1,712,503 $ 570,352 $ 320,352 $ 150,320 $ - $ - $ - $ - $ - $ - $ - Additional Funds $ 79,800 $ - $ 79,968 $ 80,288 $ 60,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Less: Payment of Debt Service $ - $ $ - $ $ - $ - $ - $ - $ $ - $ - Net Additional Funds $ 79,800 $ $ 79,968 $ 80,288 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Subtotal $ 1,792,303 $ 570,352 $ 400,320 $ 230,608 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Restricted Amount $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - Amount Available for Projects $ 1,792,303 $ 570,352 $ 400,320 $ 230,608 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Amount Paid for Projects $ 1,221,951 $ 250,000 $ 250,000 $ 230,608 $ 80,609 $ 80,931 $ 81,255 $ 81,580 $ 81,907 $ 82,234 $ 82,563 Subtotal $ 570,352 $ 320,352 $ 150,320 $ - $ - $ - $ - $ - $ - $ - $ - Add Back Restricted Amount $ - $ - $ - $ - $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ 34,243 $ 13,361 $ 9,413 $ 3,006 $ $ $ $ $ $ $ Less Interest to Cash Flow $ (34,243) $ (13,361) $ (9,413) $ (3,006) $ $ $ $ $ $ $ Ending Balance $ 570,352 $ 320,352 $ 150,320 $ - $ $ $ $ $ $ $ Sewerlm_nact Fees Beginning Balance $ 5,749,444 $ 2,095,956 $ 1,595,956 $ 1,236,896 $ 878,400 $ 520,470 $ 163,108 $ $ $ $ Additional Funds $ 140,510 $ - $ 140,940 $ 141,504 $ 142,070 $ 142,638 $ 143,209 $ 143,781 $ 144,357 $ 144,934 $ 145,514 Less: Payment of Debt Service $ - $ $ - $ - $ - $ - $ - $ - $ - $ $ Net Additional Funds $ 140,510 $ - $ 140,940 $ 141,504 $ 142,070 $ 142,638 $ 143,209 $ 143,761 $ 144,357 $ 144,934 $ 145,514 Subtotal $ 5,889,954 $ 2,095,956 $ 1,736,896 $ 1,378,400 $ 1,020,470 $ 663,108 $ 306,316 $ 143,781 $ 144,357 $ 144,934 $ 145,514 Restricted Amount $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - Amount Available for Projects $ 5,889,954 $ 2,095,956 $ 1,736,896 $ 1,378,400 $ 1,020,470 $ 663,108 $ 306,316 $ 143,781 $ 144,357 $ 144,934 $ 145,514 Amount Paid for Projects $ 3,793,998 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ 306,316 $ 143,781 $ 144,357 $ 144,934 $ 145,514 Subtotal $ 2,095,956 $ 1,595,956 $ 1,236,896 $ 878,400 $ 520,470 $ 163,108 $ - $ - $ - $ - $ - Add Back Restricted Amount $ - $ - $ - $ - $ - $ - $ - $ $ $ $ ' Plus: Interest Earned During the Year $ 117,681 $ 55,379 $ 56,657 $ 42,306 $ 27,977 $ 13,672 $ 3,262 $ $ $ $ Less Interest to Cash Flow $ (117,681) $ (55,379) $ (56,657) $ (42,306) $ (27,977) $ (13,672) $ (3,262) $ $ $ $ Ending Balance $ 2,095,956 $ 1,595,956 $ 1,236,896 $ 878,400 $ 520,470 $ 163,108 $ $ $ $ $ Capitallmprovements Fund Beginning Balance $ - $ - $ - $ - $ - $ - $ $ $ $ $ Net Additional Funds $ 60,133,842 $ $ 20,069,309 $ $ 21,925,953 $ $ $ $ $ $ Subtotal $ 60,133,842 $ $ 20,069,309 $ $ 21,925,953 $ $ $ $ $ $ Restricted Amount $ - $ $ - $ $ - $ $ $ $ $ $ Amount Available for Projects $ 60,133,842 $ $ 20,069,309 $ $ 21,925,953 $ $ $ $ $ $ Amount Paid for Projects $ 60,133,842 $ $ 20,069,309 $ $ 21,925,953 $ $ $ $ $ $ Subtotal $ - $ $ - $ $ - $ $ $ $ $ $ Add Back Restricted Amount $ $ $ $ $ $ $ $ $ $ $ Plus: Interest Earned During the Year $ $ $ $ $ $ $ $ $ $ $ Less Interest to Cash Flow $ $ $ $ $ $ $ $ $ $ $ Ending Balance $ $ $ $ -- s $ $ $ $ $ $ BURTON & ASSOCIATES 39 City of Clearwater Utility & Governmental Economics Final Report FY 2009 WATER & WASTEWATER REVENUE SUFFICIENCY ANALYSIS Schedule 13 - Funding Summary by Fund APPENDIX W ater & Wa stewater City of System F Clearwate inancial r, Florida Managem Prog ent ram FY 2009 FY 2010 Funding FY 2011 Summar FY 2012 y bLEynd FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Renewal A Replacement Fund Beginning Balancef $ - $ - $ - $ 1,896,329 $ - $ 411,797 $ - $ - $ - $ - $ - Net Additional Funds $ 2,914,590 $ 2,899,128 $ 3,096,360 $ 3,218,574 $ 3,407,934 $ 3,554,692 $ 3,721,787 $ 3,865,391 $ 4,046,191 $ 4,209,393 $ 4,407,735 Subtotal $ 2,914,590 $ 2,899,128 $ 3,096,360 $ 5,114,903 $ 3,407,934 $ 3,966,489 $ 3,721,787 $ 3,865,391 $ 4,046,191 $ 4,209,393 $ 4,407,735 Restricted Amount $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Amount Available for Projects $ 2,914,590 $ 2,899,128 $ 3,096,360 $ 5,114,903 $ 3,407,934 $ 3,966,489 $ 3,721,787 $ 3,865,391 $ 4,046,191 $ 4,209,393 $ 4,407,735 Amount Paid for Projects $ 2,914,590 $ 2,899,128 $ 1,200,031 $ 5,114,903 $ 2,996,138 $ 3,966,489 $ 3,721,787 $ 3,865,391 $ 4,046,191 $ 4,209,393 $ 4,407,735 Subtotal $ - $ - $ 1,896,329 $ - $ 411,797 $ - $ - $ - $ - $ - $ - Add Back Restricted Amount $ $ $ - $ - $ - $ - $ $ $ $ $ Plus: Interest Earned During the Year $ $ $ 37,927 $ 37,927 $ 8,236 $ 8,236 $ $ $ $ $ Less Interest to Cash Flow . $ $ $ (37,927) $ (37,927) $ . (8,236) $ (8,236) $ $ $ $ $ Ending Balance $ $ $ 1,896,329 $ - $ 411,797 $ - $ $ $ $ $ Revenue Fund Beginning Balance $ 26,763,811 $ 11,227,502 $ 9,579,855 $ 10,555,171 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 Net Additional Funds $ 963,385 $ (440,236) $ 975,315 $ (1,164,008) $ 576,443 $ 2,112,000 $ 3,066,801 $ 1,406,747 $ 1,521,989 $ 9,753 $ 1,058,159 Subtotal $ 27, 727,196 $ 10, 787, 267 $ 10, 555,171 $ 9,391,163 $ 9,967,606 $ 12, 079,606 $ 13, 658, 245 $ 12, 367,151 $ 12, 874, 691 $ 11, 979, 675 $ 13,037, 833 Restricted Amount $ 9,357,806 $ 9,579,855 $ 10,136,617 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 $ 12,881,932 Amount Available for Projects $ 18,369,390 $ 1,207,411 $ 418,554 $ - $ - $ 1,488,162 $ 2,697,842 $ 1,014,449 $ 904,769 $ - $ 155,901 Amount Paid for Projects $ 16,499,694 $ 1,207,411 $ - $ - $ - $ 1,488,162 $ 2,697,842 $ 1,014,449 $ 904,769 $ - $ 155,901 Subtotal $ 1,869,696 $ - $ 418,554 $ $ $ - $ - $ - $ - $ $ - Add Back Restricted Amount $ 9,357,806 $ 9,579,855 $ 10,136,617 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 $ 12,881,932 Plus: Interest Earned During the Year $ 569,870 $ 312,110 $ 402,701 $ 398,927 $ 387,175 $ 411,181 $ 431,037 $ 446,262 $ 466,452 $ 478,992 $ 497,232 Less Interest to Cash Flow $ (569,870) $ (312,110) $ (402,701) $ (3913,927) $ (387,175) $ (411,181) $ (431,037) $ (446,262) $ (466,452) $ (478,992) $ (497,232) Ending Balance $ 11,227,502 $ 9,579,855 $ 10,555,171 $ 9,391,163 $ 9,967,606 $ 10,591,444 $ 10,960,403 $ 11,352,701 $ 11,969,921 $ 11,979,675 $ 12,881,932 Restricted Reserves Beginning Balance $ 10,768,664 $ 16,268,419 $ 16,268,419 $ 18,542,419 $ 18,542,419 $ 21,538,687 $ 21,538,687 $ 24,786,074 $ 24,786,074 $ 28,120,871 $ 28,120,871 Additional Funds: Debt Service Reserve on New Debt $ - $ - $ - $ - $ - $ - $ 3,247,387 $ - $ 3,334,797 $ - $ 3,432,778 Interest Earnings $ 405,556 $ 488,053 $ 696,217 $ 741,697 $ 801,622 $ 861,547 $ 926,495 $ 991,443 $ 1,058,139 $ 1,124,835 $ 1,193,490 Less: Interest Earnings Transferred to Revenue Fund $ (405,556) $ (488,053) $ (696,217) $ (741,697) $ (801,622) $ (861,547) $ (926,495) $ (991,443) $ (1,058,139) $ (1,124,835) $ (1,193,490) Ending Balance $ 16,268,419 $ 16,268,419 $ 18,542,419 $ 18,542,419 $ 21,538,687 $ 21,538,687 $ 24,786,074 $ 24,786,074 $ 28,120,871 $ 28,120,871 $ 31,553,649 BURTON & ASSOCIATES 40 City of Clearwater Utility & Governmental Economics Final Report APPENDIX G SCHEDULE OF RATES, FEES AND CHARGES 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 $ [Bond Amount] Water and Sewer Revenue Bonds, Series 2010 (the "Series 2010 Bonds. The Series 2010 Bonds are being issued pursuant to Ordinance No. 3674-84 enacted by the Issuer on August 2, 1984, as amended and supplemented in Ordinance 6915-01, enacted November 15, 2001 (collectively, the "Ordinance") and as further supplemented by Resolution 10-25, adopted by the City on November 4, 2010, as supplemented (the "Series 2010 Resolution"). 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 2010 Bondholders and in order to assist the original underwriters of the Series 2010 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 City shall provide to the Municipal Securities Rulemaking Board (the "MSRB"), in the manner described in Section 5 hereof, to any state information depository that is established within the State of Florida and with which the City is legally required to file the information set forth herein (the "SID"), it being understood that no such SID is currently established in the State of Florida, on or before April 30 of each year, commencing April 30, 2011 with the report for the 2010 Fiscal Year, the information set forth below in this Section 3. Notwithstanding the immediately preceding sentence, to the extent any such information does not become available to the City before April 30 of any year, the City shall provide such information when it becomes available, but no later than one year following the end of the City's Fiscal Year. (A) the City's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAFR"), which shall include the audited financial statements of the City 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 City are not completed prior to April 30 of any 1 year, the City 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 2010 Bonds (as amended, the "Official Statement"), as set forth below: 1. Updates of the historical financial information set forth in the Official Statement under the principal captions "THE WATER AND SEWER SYSTEM" for the then-immediately preceding five fiscal years and " APPENDIX G - SCHEDULE OF RATES, FEES AND CHARGES." 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 2010 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 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 2010 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series 2010 Bonds: (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on the debt service reserve fund reflecting financial difficulties; (D) Unscheduled draws on credit enhancement reflecting financial difficulties; 2 (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the Series 2010 Bonds; (G) Modifications to rights of Series 2010 Bondholders; (H) Calls on the Series 2010 Bonds; (I) Defeasance of the Series 2010 Bonds; (J) Release, substitution, or sale of property securing repayment of the Series 2010 Bonds; (K) Rating changes; and (L) Notice of any failure on the part of the City or any other Obligated Person (as defined herein) to meet the requirements of Section 3 hereof. The City 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 4, if, in the judgment of the City, such other events are material with respect to the Series 2010 Bonds, but the City 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 City obtains knowledge of the occurrence of a significant event described in this Section 4, the City shall as soon as possible determine if such event would be material under applicable federal securities law to holders of Series 2010 Bonds, provided, that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. SUBMISSION OF INFORMATION TO THE MSRB. The information required to be disclosed pursuant to Sections 3 and 4 of this Disclosure Certificate shall be submitted to the MSRB through its Electronic Municipal Market Access system ("EMMA"). Subject to future changes in submission rules and regulations, such submissions shall be provided to the MSRB, through EMMA, in portable document format ("PDF") files configured to permit documents to be saved, viewed, printed and retransmitted by electronic 3 means. Such PDF files shall be word-searchable (allowing the user to search for specific terms used within the document through a search or find function available in a software package). Subject to future changes in submission rules and regulations, at the time that such information is submitted through EMMA, the City, or any dissemination agent engaged by the City pursuant to Section 7 hereof, shall also provide to the MSRB information necessary to accurately identify: (A) the category of information being provided; (B) the period covered by the CAFR and any additional financial information and operating data being provided; (C) the issues or specific securities to which such submission is related or otherwise material (including CUSIP number, issuer name, state, issue description/securities name, dated date, maturity date, and/or coupon rate); (D) the name of any Obligated Person other than the City; (E) the name and date of the document being submitted; and (F) contact information for the submitter. SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision in the Ordinance to the contrary, failure of the Issuer to comply with the provisions of this Disclosure Certificate shall not be considered an event of default under the Ordinance; provided, however, any Series 2010 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 2010 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 2010 Bonds (including persons holding Series 2010 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2010 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 4 from other documents, including official statements or debt issues of the Issuer of related public entities, which have been submitted to the MSRB 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 2010 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. 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. 5 SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series 2010 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 this [ ] day of November, 2010 ATTEST: By: City Clerk CITY OF CLEARWATER, FLORIDA By: Mayor 6