94-55RESOLUTION NO. 94 -55
A RESOLUTION PROVIDING FOR THE SALE OF NOT TO EXCEED
$8,250,000 GAS SYSTEM REVENUE BONDS; FIXING REDEMPTION
PROVISIONS FOR THE 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 OFFICIAL NOTICE OF SALE AND
BID FORMS; APPROVING THE FORM OF A PRELIMINARY OFFICIAL
STATEMENT; AUTHORIZING THE SELECTION OF A REGISTRAR AND
PAYING AGENT; AUTHORIZING THE SELECTION OF A PROVIDER OF
MUNICIPAL BOND INSURANCE;. PROVIDING CERTAIN OTHER MATTERS
IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on August 15, 1991, the City Commission of the City
of Clearwater, Florida (the "City" or the "Issuer ") enacted
Ordinance No. 5118 -91 (the "Original ordinance") to provide for the
issuance of bonds payable from Net Revehues of the Gas System (as
defined therein); and
WHEREAS, on August 4, 1994, the Issuer enacted Ordinance No.
5564 -94 (together with the Original Ordinance, collectively the
"Bond Ordinance ") which authorized the issuance of not to exceed
$8,250,000 City of Clearwater, Florida, Gas System Revenue Bonds,
Series 1994A as Additional Bonds under the Original Ordinance; and
WHEREAS, the City wishes to designate such Bonds as "Gas
System Revenue Bonds, Series 1994A" (the "Series 1994A Bonds ") ; and
WHEREAS, it is in the best interest of the City to provide for
the public sale of not to exceed $8,250,000 of such Series 1994A
Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF CLEARWATER, FLORIDA, as follows:
SECTION 1. PUBLIC SALE. There are hereby authorized to be
sold pursuant to a public sale not to exceed $8,250,000 City of
Clearwater, Florida, Gas System Revenue Bonds, Series 1994A.
SECTION 2. PROVISIONS FOR REDEMPTION. The Series 1994A Bonds
are subject to redemption at the option of the City prior to
maturity on or after September 1, 2002, in whole at any time, or in
part from time to time, on any interest payment date in such manner
as shall be determined by the City at the redemption prices
expressed as a percentage of the principal amount of the Series
1994A Bonds to be redeemed as set forth below, together with
accrued interest to the date fixed for redemption.
Redemption Price
Period During Which Redeemed (Percentage of Par)
September 1, 2002 through August 31, 2003 102285
September 1, 2003 through August 31, 2004 101
September 1, 2004 and thereafter 100
SECTION 3. SALE OF SERIES 1994A BONDS. The Finance Director
is hereby directed to publish the Summary Notice of Sale of the
Series 1994A Bonds in the St. Petersburg Times 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) days prior to the
date of sale; and to publish such Notice in such other newspapers
on such dates as may be deemed appropriate by the Finance Director.
Proposals for purchase of the Series 1994A Bonds will be
received at the office of the Finance Director of the City, 112
South Osceola Avenue, Clearwater, Florida 34616, from the time that
the Notice of Bond Sale is published until 12:00 noon, on September
12, 1994.
SECTION 4. APPROVAL OF FORMS. The Notice of Bond Sale and
Summary Notice of Sale of the Series 1994A Bonds and the Official
Bid Form to be submitted for purchase of the Series 1994A Bonds
shall be in substantially the forms annexed hereto, as Exhibits A,
B and C, respectively, together with such changes as shall be
deemed necessary or desirable by the Finance Director, incorporated
herein by reference.
SECTION 5. PRELIMINARY OFFICIAL STATEMENT. The Mayor -
commissioner and Finance Director are authorized and directed to
cause a Preliminary Official Statement to be prepared in
substantially the form attached hereto as Exhibit D, with such
changes, insertions and omissions as shall be approved by the
Mayor - Commissioner and Finance Director, containing a copy of the
attached Notice of Bond Sale and Official Bid Form and to furnish
a copy of such Preliminary Official Statement to interested
bidders. The Mayor- Commissioner 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 1994A 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:.
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SECTION 6. REGISTRAR AND PAYING AGENT. First Union National
Bank of Florida, Jacksonville, Florida, is hereby appointed as j
Registrar and Paying Agent for the Series 1994A Bonds.
SECTION 7. MUNICIPAL BOND INSURANCE. The Mayor - Commissioner
and the Finance Director are hereby authorized to select a bond
insurer to provide insurance to insure the scheduled payment of
principal and interest on the Series 1994A Bonds on behalf of the
Issuer or, in the alternative, allow each bidder to select whether
the Series 1994A Bonds are to be insured.
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SECTION 8. AWARD OF BID. The Finance Director is hereby
authorized to accept the bids for the Series 1994A Bonds, and the
Issuer will award said Series 1994A Bonds on its determination of
the best bid submitted in accordance with the terms of the Notice
of Bond Sale provided for herein or may reject all bids. Such
award shall be final.
SECTION 9. EFFECTIVE DATE. This resolution shall take effect
immediately upon its adoption.
Passed and adopted by the City Commission of the City of
Clearwater, Florida, this 4th day of August , 1994.
Rita Garvey
Mayor- Commissioner
Attest:
Cyn hia E. Goudeau
Cit Clerk
Approved as o f m
an eg 1 u f ciency:
Adn Zi et
interim Cite Attorney
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OFFICIAL NOTICE OF BOND SALE
$8,180,000*
CITY OF CLEARWATER, FLORIDA
GAS SYSTEM REVENUE BONDS, SERIES 1994A
Sealed proposals will be received by the City of Clearwater, Florida (the "City") at the offices of the
Finance Director of the City, 112 South Osceola Avenue, Clearwater, Florida 34616 by 12:00 Noon (Eastern
Daylight Savings Time) on September 12, 1W4 for the purchase of the City of Clearwater, Florida, Gas System
Revenue Bonds, Series 1994A (the "Series 1994A Bonds "). Each proposal, together with the good faith deposit
described below, should be enclosed in a sealed envelope marked "Proposal for $8,180,000* City of Clearwater,
Florida, Gas System Revenue Bonds, Series IW4A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings
Time), September 12, 1994, or such similar legend which appropriately identifies the contents thereof.
FQrm of Series 1994A Bonds
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The Series 1994A Bonds will be issued in fully registered form, without coupons, and in denominations
of $5,000 or any integral multiples thereof. Principal of and any redemption premium on the Series 1994A Bonds
shall be paid to the registered owners at the principal corporate trust office of First Union National Bank of
Florida, Jacksonville, Florida (the "Paying Agent" and "Registrar "), upon presentment and surrender of the Series
1994A Bonds. Interest oa the Series 1994A Bonds shall be paid to the registered owners as shown on the
registration books maintained by the Registrar, by check or draft mailed to each such owner's address as shown
on the registration books maintained by the Registrar as of the fifteenth (15th) day of the calendar month
preceding such interest payment date. Interest will be payable each March 1 and September 1, commencing
March 1, 1995. Interest will be calculated on the basis of a 360 -day year of twelve 30 -day months.
MaturiM Scheduig
The Series 1994A Bonds will mature on September 1 of the following years in the following principal
amounts: '
Principal Principal
Maturi Amount* Ma uri Amount °
2014 $535,000 M20 $ ?75,000
2015 565,000 2021 825,000
1016 605,000 2022 880,000
2017 645,000 2023 935,000
2018 655,000 2024 1,000,000
2019 730,000
Redemption PrgvUlong
The Series 1994A Bonds are subject to redemption at the option of the City prior to maturity on or after
September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such
manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal
amount of the Series 1994A Bonds to be redeemed, as set forth below, together with accrued interest to the date
fixed for redemption.
*Preliminary, subject to change.
Redemntion Period Redemntion Pri
September 1, 2002 through August 31, 2003 102%
September 1, 2003 through August 31, 2004 101
September 1, 2004 and thereafter 100
Aduustment 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 1994A Bonds (or any Amortization Installment
in the case of a Term Bond) shown on the schedule of Principal Amounts set forth above (the "Maturity
Schedule"), by an amount not to exceed five percent (59o) 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, no rebidding or recalculation of the bid submitted will be required
or permitted. If necessary, the total purchase price of the Series 1994A Bonds will be increased or decreased
in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 1994A
Bonds specified herein; and the Series 1994A 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 Series 1994A Bonds offered pursuant to the Bid Maturity Schedule, without
taking into account any adjustment in the amount of Series 1994A Bonds set forth in the Bid Matrity Schedule.
Designation of Term Bonds
Bidders may specify that the annual Principal Amounts of the Series 1994A Bonds coming due in any
two or more consecutive years may be combined to form one or more maturities of Term Bonds scheduled to
mature in the last of such years with the preceding annual Principal Amounts for such years constituting
mandatory Amortization Installments to be selected by lot and redeemed at a price of par plus accrued interest
in accordance with the Resolution.
Basis of Award
Proposals must be unconditional and only for all the Series 1994A Bonds. The purchase price bid for
the Series 1994A Bonds may include a discount (including underwriters' discount and original issue discount, but
excluding any municipal bond insurance premium) not to exceed two percent (2 %) of the principal amount of
the Series 1994A Bonds and shall specify how much of the discount is original issue discount. No more than
one (1) Proposal from any bidder will be considered. The City reserves the right to determine the Successful
Bidder (as defined below), to reject any or all bids and to waive any irregularity or informality in any bid.
The Series 1994A Bonds will be awarded to the bidder (herein referred to as the "Successful Bidder ")
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 1994A Bonds. True interest cost for the Series 1994A 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 1994A 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 March 1, 1995. The true
interest cost shall be calculated from the closing date of the Series 1994A Bonds (September 28, 1994) 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 each Proposal for the Series 1994A Bonds submitted in accordance with the Notice of Bond
Sale. In case of u tic, the City may select the Successful Bidder by lot. It is requested that each Proposal for
the Series 1994A 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 1994A Bonds shall bear interest expressed in multiples of one - eighth (1 /8) or one - twentieth
(1 /20) of one percent. No interest rate specified for any maturity may be lower than any interest rate specified
for an earlier maturity. There shalt not be a difference greater than fifty basis points (50 b.p) between the
lowest coupon and highest coupon. Should an interest rate be speed 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 1994A Bonds bear the same rate of interest, provided that all
Series 1994A Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based
upon the use of split or supplemental interest payments or a zero rate of interest will not be considered
Paying Agent and Registrar f
The Paying Agent and Registrar for the Series 1994A Bonds is First Union National Bank of Florida,
Jacksonville, Florida.
i
aecurity
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Principal of and interest on the Series 1994A Bonds to be issued pursuant to Ordinance No, 5118 -91,
as amended and supplemented by Ordinance No. 5564 -94 and all required sinking fund, reserve and other
payments shall be payable solely from the Net Revenues of the City's Gas System, together with the earnings
thereon derived from the investment thereof in the Funds and Accounts established in the Resolution and as
more fully described in the Preliminary Official Statement. The lien of the Series 1994A Bonds upon the Net
Revenues is on a parity with the City's outstanding $7,680,000 Gas System Revenue Bonds, Series 1991. j
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The Series 1994A 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 1994A 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 1994A Bonds are being issued to finance additions, extensions,
supplements or replacements to the City's Gas System, to make a deposit to the Reserve Fund for the Series
1994A Bonds, and to pay the cost of issuance of the Series 1994A Bonds.
issuance o[ Series 1994A Bond,
The Series 1994A 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 1994A Bonds are being
issued pursuant to Ordinance No, 5118 -91 enacted August 15, 1991, and Ordinance No. 5564 -94, enacted August
4, 1994 (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.
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Municipal Bond insurance Policy
A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest
on the Series 1994A Bonds has been obtained from Municipal Bond Investors Assurance Corporation. Bidders,
at their option, may elect to utilize this bond insurance commitment in their bid. Alternatively, bidders may rely
upon published ratings on the Series 1994A Bonds received from Moody's Investors Service and Standard &
Poor's of _ and , respectively. If bond insurance is used, the price bid for purchase of the Series 1994A
Bonds, as set forth on the Official Bid Form, will be reduced by the amount of the bond insurance policy
premium, for the purpose of calculating the true interest cost rate of the bid. Information regarding the bond
insurance commitment including the amount of the premium, may be obtained from David Thornton of
Raymond James & Associates, Inc., Financial Advisor to the Issuer (813) 573 -8282.
Proposals
Proposals are desired on forms which will be furnished by the City, and envelopes, containing Proposals
should have endorsed thereon "Proposal for $8,180,000' City of Clearwater, Florida, Gas System Revenue
Bonds, Series 1994A; Do Not Open Until 1200 Noon (Eastern Daylight Savings Time), September 12, 1994 ",
or words of equivalent import, and should be addressed to the City at the above address.
Each proposal must be accompanied by the sum of $81,800 in the form of either (i) a Cashier's or
Certified Check drawn upon an incorporated bank or trust company, payable to the City of Clearwater, Florida,
as evidence of good faith, or (a), a Financial Surety Bond from any insurance company licensed to issue such
a surety bond in the State of Florida and approved by the City (as of the date hereof only Capital Guaranty
Insurance Company has been so approved) and submitted to the City prior to the opening of the bids, identifying
each bidder whose deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the
part of the bidder. If a check is delivered the check of the successful bidder may be cashed by the City and the
proceeds will be held as security for performance of the bid. If a Financial Surety Bond is provided by the
successful bidder the good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m. on the next
business day. If the Successful Bidder shall fail to comply promptly with the terms of its Proposal, the amount
of such check will be forfeited to said payee as liquidated damages. The checks of unsuccessful bidders will be
returned to such bidders by registered mail at the addresses stated in their Proposals, or delivered to a
representative of such bidder immediately after the award of the Series 1994A Bonds to the Successful Bidder.
The proceeds of the good faith check of the Successful Bidder will be applied to the payment of the purchase
price of the Series 1994A Bonds. Prior to the delivery of the Series 1994A Bonds, the City may cash and invest
the proceeds from the good faith check. No interest will be paid to any bidder upon any good faith check.
Delivery and Payment
It is anticipated that the Series 1994A Bonds in fully registered form will be available for delivery on
September 28, 1994 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.
CMsine i➢ocnments
The City will furnish to the Successful Bidder upon delivery of the Series 1994A Bonds the following
closing documents in a form satisfactory to Bond Counsel: (1) signature and no- litigation certificate; (2) federal
tax certificate; (3) certificate regarding information in the Official Statement; and (4) seller's receipt as to
'Preliminary, subject to change.
payment. A copy of the transcript of the proceedings authorizing the Series 1994A Bonds will be delivered to
the Successful Bidder of the Series 1994A Bonds upon request. Copies of the form of such closing papers and
certificates may be obtained from the City.
Information Statement
Section 218.38(i)(b)1, Florida Statutes requires that the City file, within 120 days after delivery of the
Series 1994A 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 1994A Bonds; (b) the name and address of any attorney or financial consultant who
advised the City with respect to the Series 1994A 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 1994A 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 1994A Bonds, a statement signed by an authorized
officer containing the same in formation mentioned in (a) and (c) above. The Successful Bidder shall also be
required, at or prior to the delivery of the Series 1994A Bonds, to furnish the City with such information
concerning the initial prices at which a substantial amount of the Series 1994A 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 the Successful Bidder at closing substantially in the following form:
"The City of Clearwater, Florida is proposing to issue $8,180,000' original aggregate principal
amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital
projects for the City's Gas System, (u) funding a reserve fund, and (iii) paying the costs of
issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final
maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are
expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate
of �% per annum, total interest paid over the life of the Series 1994A Bonds will be
$ . The source of repayment or security for this proposal is the
City"s Pledged Funds, including the Net Revenues of its Gas System and moneys and
investments held in the funds created under the said Ordinance. Authorizing the Series 1994A
Bonds will result in $ not being available to finance the other gas
services of the City. This truth -in- bonding statement prepared pursuant to Section 218385(2)
and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not
affect or control the actual terms and conditions of the Series 1994A Bonds."
Ina] Opinion
The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant, Miller and
Olive, P.A., Tallahassee, Florida, to the effect that based on existing law, and assuming compliance by the City
with certain covenants and requirements of the Internal Revenue Code of 1986, as amended (the "Code "),
regarding use, expenditures, investment of proceeds and the timely payment of certain investment earnings to
the United States Treasury, the interest on the Series 1994A Bonds is not includable in the gross income of
individuals, however, interest on the Series 1994A Bonds will be included in the calculation of the alternative
minimum tax and environmental tax liabilities of corporations. The Code contains other provisions that could
*Preliminary, subject to change.
=a
result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series
1994A Bonds or the inclusion in certain computations (including, without limitation, those related to the
corporate alternative minimum tax and environmental tax) of interest that is excluded from gross income.
iricial 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 1994A 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.
!QUIP Number
It is anticipated that CUSIP identification numbers will be printed on the Series 1994A Bonds, but
neither the failure to print such number on any Series 1994A 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 1994A
Bonds in accordance with its agreement to purchase the Series 1994A Bonds. All expenses in relation to the
printing of CUSIP numbers on the Series 1994A 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.
Conies of H3 nj,
Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form
and further information which may be desired, may be obtained from the City's Financial Advisor, Raymond
James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida 33716, telephone (813) 573 -8282.
Amendment and �Notices
Amendments hereto and notices, if any, pertaining to this offering shall be made by the Munifacts News
Service.
CITY OF CLEARWATER, FLORIDA
Is/ Rita 1. Garvey
Mayor - Commissioner
-11,
EXHIBIT B
FORM OF SUMMARY NOTICE OF SALE
-�
I -- \
SUMMARY NOTICE OF SALE
$81180'000*
CITY OF CLEARWATER, FLORIDA
Gas system Revenue Bonds
Series 1994A
Sealed bids will be received by the Finance Director of the
City of Clearwater, Florida, at the office of the Finance Director,
112 South Osceola Avenue, Clearwater, Florida 34616, subject to the
provisions of the Official Notice of Bond Sale.
Sale Date: September 12, 1994
Time: 12:00 noon, E.D.S.T.
Bonds Dated: September 1, 1994
Maturities: Payable September 1 in the years and amounts
as follows:
Due
Principal
Due
Principal
(September _n
Amount*
(September 11
Amount*
2014
$ 535,000
2020
$ 775,000
2015
565,000
2021
825,000
2016
605,000
2022
880,000
2017
645,000
2023
935,000
2018
685,000
2024
1,000,000
2019
730,000
interest
Payment Dates: Payable March 1 and September 1, commencing
March 1, 1995.
Legal Opinion: Bryant, Miller and Olive, P.A.,
Tallahassee, Florida
For copies of the Official Notice of Bond Sale, the
Preliminary Official Statement of the City of Clearwater, Florida,
and official Proposal Form, please contact the Financial Advisor,
Raymond .Tames & Associates, Inc., 880 Carillon Parkway, St.
Petersburg, Florida 33716, telephone (813) 573 -8282.
*Preliminary, subject to change,
EXHIBIT C
FORM OF BID PROPOSAL
2�
PROPOSAL FOR
$8,180,000*
CITY OF CLEARWATER, FLORIDA
GAS SYSTEM REVENUE BONDS, SERIES 1994A
Commission Chambers
City Hall
112 South Osceola Avenue
Clearwater, Florida 34616 j
Ladies and Gentlemen:
For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A
Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the
principal amount of $8,180,000% described in the Official Notice of Bond Sale, which is hereby made a part of
this Proposal, we will pay you in immediately available federal reserve funds
Dollars j
($ ) (not less than $8,016,400 *), plus accrued interest to the date of delivery of the
Series 1994A Bonds.
We do or do not wish to have the Series 1994A Bonds insured. We understand that the Series
1994A Bonds NO-Ube insured by Municipal Bond Investors Assurance Corporation if the election to purchase
insurance is made.
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Said Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields
specified below.
Principal Interest Price Principal Interest Price
M turi Amount* Rate or Yield Maturity Amount* Rate or Yield
2014 $535,000 2020 $ 775,000
2015 565,000 2021 825,000
2016 605,000 2022 880,000
2017 645,000 2023 935,000
2018 685,000 2024 1,000,000
2019 730,440
'Perm Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be
indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall
be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and
bearing interest as follows:
$� Term Bonds maturing on September 1, at % per annum to yield % per annum.
$ Term Bonds maturing on September 1, at % per annum to yield % per annum.
Term Bonds maturing on September 1, at % per annum to yield %per annum:
Term Bonds maturing on September 1, at %n per annum to yield % per annum,
$ Term Bonds maturing on September 1, at % per annum to yield % per annum.
Preliminary subject to chango as .stated in .Official Notice of Sale.
We will accept delivery of said Series 1994A Bonds through The Depository Trust Company, with the
closing occuring at the office of the Finance Director of the City of Clearwater, 112 South Osceola Avenue,
Clearwater, Florida 34616 on or about September 28, 1994, unless another date or place shall be mutually agreed
upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series
1994A Bonds, the opinion of Bryant, Miller and Olive, P.A., Bond Counsel, Tallahassee, Florida, approving the
validity thereof.
In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or
Certified Check for $81,800 payable to the order of the City of Clearwater, Florida, to be returned to the
undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided
for a ]Financial Surety Bond in accordance with the Official Notice of Sale. The check is to be cashed and the
amount of the check retained by the City until the delivery of said Series 1994A Bonds and payment therefor,
and is to be applied to the payment of the Series 1994A Bonds or retained as and for liquidated damages in case
of the failure of the undersigned to make payment as agreed.
This proposal is not subject to any conditions not expressly stated herein or in the annexed Official
Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is
hereby acknowledged The names of the underwriters or members of the account or joint bidding accounts, if
any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached
hereto
Name of Firm
By
Name:
Title:
Address
City State Zip
Telephone Number
The following is our computation made in accordance with the Official Notice of Bond Sale of the true
interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is
for informational purposes only and is subject to verification prior to award:
Par Amount $
less Original Issue Discount $
Less Underwriter's Discount $
Amount Bid Before Accrued Interest $
Less Bond Insurance Premium (if applicable) S _
Bid $
Accrued Interest $
True Interest Cost Rate (To September 28, 1994 and
Inclusive of Insurance Premium costs, if any) %
F4 S�
The City of Clearwater, Florida is proposing to issue $8,180,000' original aggregate principal amount
of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas
System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further
described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024,
and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a ,forecasted average
interest rate of �% per annum, total interest paid over the life of the Series 1994A Bonds will be
$ _ _ . The source of repayment or security for this proposal is the City"s Pledged
Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created
under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ not
being available to finance the other gas services of the City. This truth -in- bonding statement prepared pursuant
to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall
not affect or control the actual terms and conditions of the Series 1994A Bonds.
(No addition or alteration is to be made to this Official Bid Form, and it must be submitted with the
Official Notice, of Bond Sale.)
Receipt for the return of the good faith check is hereby acknowledged.
BY,
2relminary.,5,y}aj0tlo change
, _.:A
f-
PRELIMINARY OFFICIAL STATEMENT DATED , 1994
NEW ISSUE Ratings: (See "Ratings" herein)
In the opinion of Bond Counsel under existing laws, regulations and judicial
decisions interest on the Series 1994A Bonds is excluded from gross income for
purposes of federal income taxation and the series 1994A Bonds are exempt from
all present intangible personal property taxes imposed pursuant to Chapter 199,
Florida statutes. See, however "Tax Exemption" herein for a description of
certain federal minimum and other special taxes that may affect the tax treatment
of interest on the Series 1994A Bonds.
CITY OF CLEARWATER, FLORIDA
$8,250,000
Gas System Revenue Bonds
Series 1994A
Dated: September 1, 1994 Due: September 1, as shown below
The City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A
(the "Series 1994A Bonds ") will be issued as fully registered bonds in principal
denominations of $5,000 or any integral multiples thereof. Interest on the
Series 1994A Bonds is payable semi - annually, commencing March 1, 1995, and each
March 1 and September 1 thereafter by check or draft of First Union National Bank
of Florida, Jacksonville, Florida, as Paying Agent and Bond Registrar, mailed to
the Registered Owner thereof at the address shown on the Registration Books kept
by the Bond Registrar on the 15th day of the month next preceding each interest
payment date (the "Record Date "), provided, however, that at the written request
of any Registered Owner of at least $1,000,000 aggregate principal amount of the
Series 1994A Bonds, interest may be payable by wire transfer to the bank account
on file with the Paying Agent on the applicable Record Date. Principal of the
Series 1994A Bonds and redemption premium, if any, will be payable upon
presentation and surrender of the Series 1994A Bonds at the designated corporate
trust office of the Paying Agent.
The Series 1994A Bonds are subject to optional and mandatory sinking fund
redemption prior to their stated maturity under the terms and conditions
described herein.
The Series 1994A Bonds will be issued by the City of Clearwater, Florida
(the "City ") to (i) finance the costs of certain additions, extensions,
supplements or replacements of the existing gas system owned and operated by the
City (the "System ") within Pinellas County, Florida (the "1994A Project); (ii)
make a deposit to the Reserve Account in the Sinking Fund to satisfy the Reserve
Requirement (or to purchase a debt service reserve fund policy or surety, as
determined by resolution of the Issuer adopted prior to the issuance of any
series of Bonds); and (iii) pay the costs of issuance of the Series 1994A Bonds.
The Series 1994A Bonds are limited obligations of the City, payable solely
from the Net Revenues derived from the operation of the System, as provided in
Ordinance No. 5564 -94 of the City (the "Series 1994A Ordinance ") and in Ordinance
No. 5118 -91 of the Issuer (the "Original Ordinance "), as amended and
supplemented, on a parity with the City's Gas System Revenue Bonds, Series 1991,
as herein described. The Series 1994A Bonds and the interest thereon shall not
" Preliminary; subject to change.
be and shall not constitute an indebtedness of the City or of the State of
Florida or any political subdivision thereof within the meaning of any
Constitutional, statutory, charter or other limitation of indebtedness, and
neither the full faith and credit nor the taxing powers of the State of Florida
or the City are pledged as security for the payment of the principal of,
redemption premium, if any, or interest on the Series 1994A Bonds and no holder
or holders of any Bonds shall ever have the right to compel the exercise of the
ad valorem taxing powers of the City, or taxation in any form of any real
property therein to pay the Bonds or the interest thereon.
The Series 1994A Bonds shall be on a parity and rank equally, as to lien
on and source and security for payment from the Net Revenues and in all other
respects, with the City's Gas System Revenue Bonds, Series 1991.
[Payment of the principal of and interest on the Series 1994A Bonds is
guaranteed under a policy of to be issued simultaneously
with the delivery of the Series 1994A Bonds by:
For a discussion of the terms and provisions of such policy, including the
limitations, see "MUNICIPAL BOND INSURANCE" herein.]
This cover page contains certain information for quick reference only. It
is not a summary of the issue. Investors must read the entire Official Statement
to obtain information essential to making an informed investment decision.
MATURITIES AMOUNTS INTEREST RATES PRICES AND YIELD
$ Serial Bonds
Principal Interest
Maturity Amount Rate Price Yield
$ Term Bonds due 1, at $.
$ Term Bonds due 1, at 94.
Sealed bids for the Series 1994A Bonds will be received at 112 South
Osceola Avenue, Clearwater, Florida, until 12 noon (Clearwater, Florida, time)
on September 12, 1994. Please refer to the Official Notice of Sale dated
, 1994 which outlines the terms and conditions for the
submission of offers to purchase the Series 1994A Bonds.
The Series 1994A Bonds will be offered when, as and if issued and delivered
to the Underwriters, subject to approval of Bryant, Miller and Olive, P.A.,
Tallahassee, Florida, Bond Counsel to the City, and certain other conditions.
Certain legal matters will be passed on for the City by its Interim City
Attorney, Alan 2immet, Esquire. it is expected that the 1994A Bonds in
definitive form will be available for delivery in New York, New York, on or about
1994.
CITY OF CLEARWATER, FLORIDA
112 South Osceola Avenue
Clearwater, Florida 34616
CITY COMMISSION
Rita J. Garvey, Mayor - Commissioner
Sue Berfield, Commissioner
Arthur X. Deegan, Commissioner
Fred Thomas, Commissioner
Richard A. Fitzgerald, Commissioner
CITY OFFICIALS
Elizabeth Deptula, City Manager
Margaret Simmons, CPA, Finance Director
Cynthia E. Goudeau, City Clerk
Charles S. Warrington, Jr., Managing Director and
Executive Officer, Gas System
INTERIMS CITY ATTORNEY
Alan Zimmet, Esquire
BOND COUNSEL
Bryant, Miller and Olive, P.A.
Tallahassee, Florida
FINANCIAL ADVISOR
Raymond James & Associates, Inc,
St. Petersburg, Florida
'W -s-
No dealer, broker, salesperson or other person has been authorized by the
City or the Underwriters to give any information or to make any representations
other than as contained herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by any of the
foregoing. This Official Statement is not to be construed as a contract with the
purchasers of the Series 1994A Bonds. This Official Statement does not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of the Series 1994A Bonds by any person to make such offer,
solicitation or sale. The information set forth herein has been obtained from
the City, [Bond Insurer,] public documents, records and other sources which are
believed to be reliable but is not guaranteed as to accuracy or completeness by,
and is not to be construed as a representation of the City with respect to
information provided by or the Underwriters.
The information and expressions of opinion stated herein are subject to change
without notice, and neither the delivery of this Official Statement nor any sale
made hereunder shall create, under any circumstances, any implication that there
has been no change in the affairs of the City since the date hereof or the
earliest date as of which such information is given.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1994A
BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
All summaries herein of documents and agreements are qualified in their
entirety by reference to such documents and agreements, and all summaries herein
of the Series 1994A Bonds are qualified in their entirety by reference to the
form thereof included in the aforesaid documents and agreements.
NO REGISTRATION STATEMENT RELATING TO THE SERIES 1.994A BONDS HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION ") OR WITH ANY STATE
SECURITIES COMMISSION. THE SERIES 1994A BONDS HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE
A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PURPOSE OF SERIES 1994A BONDS . . . . . . . . . . . . . . . . . . . . . . 1
PROJECT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . 2
DESCRIPTION OF THE SERIES 1994A BONDS . . . . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . 3
Negotiability, Registration and Cancellation . . . . . . . . . . 3
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . 3
Redemption Provisions . . . . . . . . . . . . . . . . . . . . . . 4
Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 6
SOURCE OF PAYMENT AND SECURITY
FOR THE SERIES 1994A BONDS . . . . . . . . . 4 . . . . . . . . . . . . . 6
General . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reserve Account . . . . . . . . . . . . . . • . . . . . . . . . • 7
i
FLOW OF FUNDS . . . . . . . . . . .
. . . . . . . . 7
Establishment of Funds and Accounts . . . . . . . .
. . . . . . . . 7
Priority of Flow of Funds . . . . . . . . . . . . .
. . . . . . . . 8
COVENANTS . . . . . . . . . . . . . . . . . . .
. . . . . . . . 9
Rate Covenant . . .
9
Additional Parity Obligations
10
Operation and Maintenance . . , . . . . . . . . .
. . . . . . . . 11
Operating Budget . . . . . . . . . . . . . . . . .
. . . . . . . . 11
Annual Audit . . . . . . . . . . . .
�System
. . . . . . 11
No Mortgage or Sale of the . . . . . . . . . .
. . . . . . . 11
NoFree Service . . . . . . . . . . . . . .
. . . . . . . 12
Enforcement of Collections . . . . . . . . . . . . .
. . . . . . . 12
No Competing System . . . . . . . . . . . .
. . . . . . . 12
Unlawful Connection Prohibited . . . . . . . . . . .
. . . . . . . 13
Amendment of the ordinance . . . . . . . . . . . . .
. . . . . . . 13
THE SYSTEM . . . . . . . . . . . . . . . . . . . . . .
. . . 13
Physical Description . . . . . . . . . . . . . . . . . . . .
. . . 13
Management . . . . . . . . . . . . . . . . . . . . . . .
. . . 14
GasSupply . . . . . . . . . . . . . . . . . . . . .
. . . 15
Rates, Fees and Charges . . . . . . . . . . . . . . . . . . .
. . . 15
Service Area . . . . . . . . . . . . . . . . . . .
. . . 16
Clearwater Gas Strategic Plan . . . . . . . . . . . . . . . .
. . . 17
Gas System Revenue Bonds . . . . . . . . . . . . . . . . . .
. . . is
Pasco County Territorial Dispute . . . . . . . . . . . . . .
. . . is
Manufactured Gas Plant . . . . . . . . . . . . . . . . . . .
. . . is
ADDITIONAL PROJECT . . . . . . • . • , • . , , , , • • , . . . •
• • , 19
[MUNICIPAL BOND INSURANCE) . . . . . . . . . . . . . . . . . . . .
. . . 19
THECITY AND PINELLAS COUNTY . . . . . . . . . . . . . . . . . . .
. . . 19
COMBINED DEBT SERVICE REQUIREMENTS . . . . . . . . . . . . . .
. . . 20
HISTORICAL COVERAGE OF MAXIMUM DEBT SERVICE BY NET REVENUES . . . .
. . . 21
RATINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 21
LEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 21
TAX EXEMPTION . . . . . . . . . . . . . . . . . . • . . . • . .
• . . 21
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 23
ENFORCEABILITY OF REMEDIES . . . . . . . . . . . . . . . . . .
. . . 23
LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
GENERAL PURPOSE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . 23
FINANCIAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
AUTHORIZATION OF AND CERTIFICATION
CONCERNING OFFICIAL STATEMENT . . . . . . . . . . . . . . . . . . . . . . 24
ii
-1
Imo°' -a
APPENDIX A -- GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER,
FLORIDA
APPENDIX B -- EXCERPTS FROM THE CITY OF CLEARWATER, FLORIDA GENERAL PURPOSE
FINANCIAL STATEMENTS AND OTHER INFORMATION FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 1993
APPENDIX C -- SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE
APPENDIX D -- FORM OF BOND COUNSEL OPINION
APPENDIX E ^- [SPECIMEN BOND INSURANCE POLICY]
iii
OFFICIAL STATEMENT
$8,250,000"
The City of Clearwater, Florida
Gas System Revenue Bonds, Series 1994A
INTRODUCTION
The purpose of this Official Statement, which includes its cover page and
certain enclosed Appendices, is to furnish information with respect to the
issuance by the City of Clearwater, Florida (the "City ") of its Gas System
Revenue Bonds, Series 1994A (the "Series 1994A Bonds ") in the aggregate principal
amount of $8,250,000 *.
The Series 1994A Bonds are being issued under the authority of and in full
compliance with the Constitution and laws of the State of Florida, including
Chapter 166, Part II, Florida Statutes, as amended and supplemented, the City
Charter, as amended and supplemented, and other applicable provisions of law.
The Series 1994A Bonds are being issued more specifically pursuant to Ordinance
No. 5118 -91 enacted by the City Commission of the City (the "Commission ") on
August 15, 1991, which authorized the issuance of Gas System Revenue Bonds,
Series 1991 (the "Original Ordinance "), as supplemented by Ordinance No. 5564 -94,
authorizing the issuance of the Series 1994A Bonds duly enacted by the Commission
on August 4, (the "Series 1994A Ordinance ") and as further supplemented by an
award resolution adopted on August 4, 1994 (the "Award Resolution ") (the Original
Ordinance, the Award Resolution, and the Series 1994A Ordinance are collectively
referred to as the "Ordinance ").
The Series 1994A Bonds are special, limited obligations of the City payable
solely from the Net Revenues derived from the operation of the System, as
provided in the Ordinance on a parity with the City's Gas System Revenue Bonds,
Series 1991, of which $7,680,000 remains outstanding as of September 1, 1994 (the
"Series 1991 Bonds "), all as further described under the heading "Additional
Parity Obligations" herein.
Capitalized terms not otherwise defined in this official Statement shall
have the same meanings assigned to such terms in the Summary of the ordinance,
which is set forth in Appendix "C ". The description of the Series 1994A Bonds,
the Ordinance, and certain statutory provisions as well as the information from
various reports and statements contained in this Official Statement are not
comprehensive or definitive. All references to such documents, reports and
statements are qualified by the actual content of such documents, reports and
statements, copies of which may be obtained by contacting the Finance Director,
City of Clearwater, Florida, 112 South Osceola Avenue, Clearwater, FL 34616,
(813) 462 -6936 or during the offering period of the Series 1994A Bonds from
Raymond James & Associates, Inc., financial advisor to the City.
PURPOSE OF SERIES 1994A BONDS
The Series 1994A Bonds shall be issued by the City to (i) finance the costs
of certain additions, extensions, supplements or replacements of the existing gas
system owned and operated by the City (the "System ") within Pinellas County,
Florida (the 111994A project "); (ii) make a deposit to the Reserve Account in the
a Preliminary; subject to change.
F _. \
Sinking Fund to satisfy the Reserve Requirement (or to purchase a debt service
reserve fund policy or surety, as determined by resolution of the Issuer adopted
prior to the issuance of any series of Bonds) ; and (iii) pay the costs of
issuance of the Series 1994A Bonds.
PROJECT
A portion of the proceeds from the sale of the Series 1994A Bonds will be
utilized by the City for the additions, extensions, supplements or replacements
of the existing gas system (the "System ") within Pinellas County, Florida, for
areas currently serviced by the System (the 111994A Project ") . The estimated cost
of the 1994A Project is $7,010,000 which will be funded in part from Series 1994A
Bond proceeds.
The following chart shows the current components for the 1994A Project to
be funded by the Series 1994A Bond proceeds and certain investment earnings, and
the estimated costs of the components.
Pinellas County Gas Main & Service Extensions
$5,670,000
- Commercial and Residential Main and
Service Line Extensions
3,640,000
- Main Relocation due to Highway Improvements
and Other Public Works.Projects
890,000
- Indian Rocks Loop
500,000
- Pinellas Vehicles (8) and Computers (7)
150,000
- Engineering Design Services
200,000
- Gas Meter Changeout Program
200,000
- Propane Tanks and Installation
90,000
Develop New Gas Markets
1,340,000
- Natural Gas Vehicle Stations /Conversions
and Gas Air Conditioning
1,300,000
- Marketing Vehicles (2) and Computers (3)
40,000
Total Net Capital Requirements
for 1994A Project
$7,010,000
ESTIMATED SOURCES AND USES
OF FUNDS
The proceeds to be received from the sale
of the Series 1994A Bonds are
expected to be applied; as follows:
Sources of Funds
Principal Amount of Series 1994A Bonds
$
Less Original Issue Discount
( )
Accrued Interest
Total Sources of Funds
$
Uses of Funds
Deposit to the Construction Fund
$
Deposit to Interest Account (1)
Deposit to the Reserve Account
Underwriter's Discount
(�)
Costs of Issuance (2)
Total Uses of Funds
$
(1) Accrued interest,
(2) includes the premium for the Municipal Bond Insurance Policy.
DESCRIPTION OF THE SERIES 1994A BONDS
General
The Series 1994A Bonds shall be issued in fully registered form in
denominations of $5,000 and integral multiples thereof and shall be dated, shall
bear interest (payable semi - annually on March 1 and September 1 of each year
commencing March 1, 1995) at the rates per annum and shall mature on the dates
and in the amounts, all as set forth on the cover page of this Official
Statement.
Interest on the Series 1994A Bonds will be payable by First Union National
Bank of Florida having its primary corporate trust office in Jacksonville,
Florida, as Paying Agent, by check or draft mailed to the registered owner at the
address shown on the registration books of the City maintained by the Paying
Agent, also acting as Registrar, on the fifteenth (15th) day of the month prior
to each Interest Payment Date whether or not such day is a business day ( "Record
Date "), provided that, at the request of any registered owner of at least
$1,000,000 in aggregate principal amount of Series 1994A Bonds, interest may be
payable by wire transfer to the bank account number on file with the Paying Agent
as of the applicable Record Date. The principal of and premium, if any, on the
Series 1994A Bonds are payable at maturity or earlier redemption to the
registered owner upon presentation and surrender at the designated corporate
trust office of the Paying Agent.
Negotiability, Registration and Cancellation
At the option of any registered owner of one or more Series 1994A Bonds and
upon surrender at the principal corporate trust office of the Bond Registrar with
a written instrument of transfer satisfactory to the Registrar duly executed by
the registered owner or his or her duly authorized attorney, the Series 1994A
Bonds may be exchanged for Series 1994A Bonds of the same maturity of any other
authorized denominations.
The Registrar shall keep books for the registration of the Series 1994A
Bonds and for the registration of transfers of the Series 1994A Bonds as provided
in the Ordinance. The Series 1994A Bonds shall be transferable by the registered
owner thereof in person or by his attorney duly authorized in writing only upon
the registration books of the City kept by the Registrar and only upon surrender
thereof together with a written instrument of transfer satisfactory to the
Registrar duly executed by the registered owner or his or her duly authorized
attorney. Upon the transfer of any such Series 1994A Bonds, the City shall issue
in the name of the transferee a new Series 1994A Bond or Series 1994A Bonds.
The City, the Paying Agent and the Registrar shall deem and treat the
person whose name any Series 1994A Bond shall be registered upon the books kept
by the Registrar as the absolute owner of such Series 1994A Bond, whether such
Series 1994A Bond shall be overdue or not, for the purpose of receiving payment
of, or on account of, the principal of and interest on such Series 1994A Bond as
the same becomes due and for all other purposes. All such payments so made to
any such registered owner or upon his order shall be valid and effectual to
satisfy and discharge the liability upon such Series 1994A Bond to the extent of
the sum or sums so paid, and neither the City, the Paying Agent, nor the
Registrar shall be affected by any notice to the contrary.
Transfer and Exchange
In all. cases in which the privilege of exchanging Series 1994A Bonds or
transferring Series 1994A Bonds is exercised, the City shall execute and the
Registrar shall authenticate and deliver Series 1994A Bonds in accordance with
the provision of the Ordinance, All Series 1994A Bonds surrendered in any such
exchanges or transfers shall forthwith be delivered to the Registrar and canceled
by the Registrar in the manner provided by the ordinance. There shall be no
charge for any such exchange or transfer of Series 1994A Bonds, but the City or
the Registrar may require payment of a sum sufficient to pay any tax, fee or
other governmental charge required to be paid with respect to such exchange or
transfer. Neither the City not the Registrar shall be required (a) to transfer
or exchange series 1994A Bonds for a period from the Record Date to the next
ensuing payment date on such Series 1994A Bonds or 15 days next preceding any
selection of Series 1994A Bonds to be redeemed or thereafter until after the
mailing of any notice of redemption; or (b) to transfer or exchange any Series
1994A Bonds called for redemption.
Redemption Provisions
optional Redemption. The Series 1994A Bonds maturing on or after September
1, 2002 and thereafter, may, at the option of the City, from any funds legally
available for such purpose, be redeemed in whole on any date on or after
September 1, 2002, or in part on any interest payment date thereafter, in any
manner as shall be determined by the city at the redemption prices (expressed as
percentages of the principal amount of such Series 19948 Bonds to be redeemed)
as set forth below if redeemed in the following redemption periods, plus accrued
interest to the redemption date;
Redemption Periods (Both Dates Inclusive) Redemption Price
September 1, 2002 through August 31, 2003 102%
September 1, 2003 through August 31, 2004 101
September 1, 2004 and thereafter 100
Mandatory Sinking Fund Redemption of the Series 1994A Bonds. The Series
1994A Bonds maturing on September 1, are subject to mandatory sinking fund
redemption by funds deposited in the Bond Amortization Account in the Sinking
Fund prior to maturity in part, by lot at a redemption price equal to their
principal amount and the accrued interest on each September 1 in the years and
amounts set forth below at a redemption price equal to 100% of the unpaid
principal amount of such Series 1994A Bonds being redeemed plus accrued interest
thereon to the date fixed for redemption, without premium:,
Principal
Year Amount
*
* Final Maturity
Mandatory Sinking Fund Redemption of the Series 1994A Bonds. The Series
1994A Bonds maturing on September 1, are subject to mandatory sinking fund
redemption by funds deposited in the Band Amortization Account in the Sinking
Fund prior to maturity in part, by lot at a redemption price equal to their
principal amount and the accrued interest on each September 1 in the years and
amounts set forth below at a redemption price equal to 100% of the unpaid
principal amount of such Series 1994A Bonds being redeemed plus accrued interest
thereon to the date fixed for redemption, without premium:
Principal
Year Amount
* Final Maturity
Money held for the credit of the Bond Amortization Account is required to
be applied to the retirement of term obligations as follows:
(1) Subject to the provisions of paragraph (3) below, the City may
purchase Term Bonds then outstanding at the most advantageous price obtainable
with reasonable diligence, such price not to exceed the principal of such Term
Bonds plus the accrued interest to the date of delivery thereof. The City is
required to pay the interest accrued on such Term Bonds to the date of delivery
thereof from the Interest Account and the purchase price from the Bond
Amortization Account, but no such purchase may be made by the City within the
period of 45 days immediately preceding any interest payment date on which Term
Bonds are subject to call for redemption, except from money in excess of the
amounts set aside or deposited for the redemption of Term Bonds.
(2) Subject to the provisions of paragraph (3) below, whenever sufficient
money is on deposit in the Bond Amortization Account to redeem $5,000 or more
principal amount of Term Bonds, the City may call for redemption from money in
the Bond Amortization Account such amount of Term Bonds then subject to
redemption as, with the redemption premium, if any, will exhaust the money then
held in the Bond Amortization Account as nearly as may be practicable. Prior to
calling Term Bonds for redemption, the City is required to withdraw from the
Interest Account and from the Bond Amortization Account and set aside in separate
accounts or deposit with the paying agents the respective amounts required for
paying the interest on and the principal of and redemption premium applicable to
the Term Bonds so called for redemption.
(3) Money in the Bond Amortization Account is required to be applied by
the City in each fiscal year to the retirement of Term Bonds then outstanding in
the following order:
(a) The Term Bonds of each series of Bonds, to the extent of the
Amortization Installment, if any, for such Fiscal Year for the Term Bonds
of each such series then outstanding, plus the applicable premium, if any,
and, if the amount available in such Fiscal Year shall not be sufficient
therefor, then in proportion to the Amortization Installment, if any, for
such Fiscal Year for the Term Bonds of each such series then outstanding,
plus the applicable premium, if any; provided, however, that if the Term
bonds of any such series are not then subject tp redemption from money in
the Bond Amortization Account and if the City•is at any time unable to
exhaust the money applicable to the Term Bonds of such series under the
provisions of this clause or in the purchase of such Term Bonds under the
provisions of paragraph (1) above, such money or the balance of such
money, as the case may be, must be retained in the Bond Amortization
Account and, as soon as it is feasible, applied to the Term Bonds of such
aeries; and
(b) Any balance then remaining, other than money retained under
the first clause of this paragraph (3), is required to be applied to the
retirement of such Term Bonds as the city in its sole discretion
determines, but only, in the case of the redemption of Term Bonds of any
series, in such amounts and on such terms as may be provided in the
resolution or ordinance authorizing the issuance of the obligations of
such series,
The City is required to pay from the Sinking Fund all expenses in
connection with any such purchase or redemption.
Notice of Redemption
Notice of call for redemption of the Series 1994A Bonds shall be mailed by
first class mail, postage prepaid, by the Registrar at least fifteen (15) days
and not more than thirty (30) days, before the date fixed for redemption to all
registered owners of the Series 1994A Bonds (or any portions thereof) to be
redeemed, to their addresses as they appear on the registration books for the
Series 1994A Bonds or to such other address as shall be furnished to the
Registrar by such Bondholder. Failure of any registered owner of Series 1994A
Bonds that are to be redeemed to receive such notice of redemption, or any defect
in such notice, shall not affect the validity of the proceedings for such
redemption of any other Series 1994A Bonds.
When notice of redemption is given, the Series 1994A Bonds called for
redemption will become due and payable on the redemption date at the redemption
price stated in the notice. Interest on any Series 1994A Bonds duly called for
redemption will cease to accrue after the date fixed for redemption if funds
sufficient for payment of the redemption price has been deposited with the Paying
Agent.
SOURCE OF PAYMENT AND SECURITY
FOR THE SERIES 1994A BONDS
General
The principal of, redemption premium, if any, and interest on the Series
1994A Bonds are payable from the Net Revenues equally and ratably with each other
and the Series 1991 Bonds. The Series 1994A Bonds and the Series 1991 Bonds are
secured by a first and prior lien on the Net Revenues derived from the operation
of the System deposited in the Sinking Fund created and established under the
Ordinance and from monies and investments deposited in certain funds and accounts
established by the ordinance and earnings thereon.
The Series 1994A Bonds shall not be and shall not constitute an
indebtedness of the City or the State of Florida or any political subdivision
thereof within the meaning of any Constitutional, statutory, charter or other
limitation of indebtedness, and neither the full faith and credit nor the taxing
power of the City, the State of Florida, or any political subdivision thereof,
are pledged or obligated as security for the payment of the principal of or
interest on any Series 1994A Bonds. The holders of the Series 1994A Bonds shall
have no right to compel the exercise of the ad valorem taxing power of the City
or taxation in any form of real property therein to pay the Series 1994A Bonds
or the interest thereon.
The proceeds of the sale of the Series 1994A Bonds shall be and constitute
trust funds for the purposes provided in the ordinance and there is a lien upon
such money, until so applied, in favor of the Holders of the Series 1994A Bonds.
"Net Revenues" is defined in the Ordinance to mean Gross Revenues less the
Cost of Operation and Maintenance. "Gross Revenues" means all monies received
from rates, fees, rentals or other charges or income derived from the investment
of funds, unless otherwise provided in the ordinance, by the city or accruing to
it in the operation of the System, all calculated in accordance with sound
accounting practice. "Cost of Operation and Maintenance" of the System means all
current expenses, paid or accrued, for the operation, maintenance and repair of
all facilities of the System, as calculated in accordance with sound accounting
practice and includes, without limiting the generality of the foregoing,
insurance premiums, administrative expenses of the City related solely to the
System, labor, cost of materials and supplies used for current operation and
charges for the accumulation of appropriate reserves for current expenses not
annually recurrent but which are such as may reasonably be expected to be
incurred in accordance with sound accounting practice, but excluding any reserve
for renewals or replacements, for extraordinary repairs or any allowance for
depreciation. The Series 1991 Bonds and the Series 1994A Bonds are further
secured by a prior lien on and pledge of the monies and investments deposited in
the Funds and Accounts established by the Ordinance except for monies and
investments deposited in the Operation and Maintenance Fund and the Rebate Fund.
Reserve Account
A Reserve Account within the Sinking Fund has been established pursuant to
the Ordinance. Within the Reserve Account, there will be established a separate
subaccount for each series of Bonds. Revenues must be applied by the City to
maintain in each subaccount in the Reserve Account a sum equal to the Reserve
Requirement, if any, for any subsequent year on each series of Bonds, which sum
will initially be deposited therein from the proceeds of the sale of the Series
1994A Bonds and other funds of the City. To the extent the City determines
pursuant to a subsequent resolution to fund a subaccount within the Reserve
Account for a respective series of Bonds, the City may provide that the
difference between the amounts on deposit in such subaccount and the Reserve
Requirement for such series of Bonds shall be an amount covered by obtaining bond
insurance issued by a reputable and recognized municipal bond insurer, by a
surety bond, by a letter of credit or any combination thereof or by such other
form of credit enhancement as shall be approved by a resolution of the City
adopted prior to the issuance of the series of Bonds for which such subaccount
is established. Such resolution may also provide for the substitution of such
credit enhancement. For further information concerning the Reserve Account,
please refer to the section entitled "Flow of Funds" contained herein.
Notwithstanding any provision of the Ordinance to the contrary, moneys in
each subaccount in the Reserve Account may be used only for the purpose of the
payment of maturing principal of or interest or making Amortization Installments
on the Bonds for which such subaccount was established when the other moneys in
the Sinking Fund are insufficient therefor, and for no other purpose including
the payment of any other series of Bonds.
FLOW OF FUNDS
Establishment of Funds and Accounts
The following Funds and Accounts have been established pursuant to the
Ordinance:
Revenue Fund
Operation and Maintenance Fund
Sinking Fund
Interest Account
Principal Account
Reserve Account
Bond Amortization Account
Renewal and Replacement Fund
A separate subaccount is required to be maintained in the Reserve Account
for each series of Bonds.
�s� -YJ
Priority of Flow of Funds
The entire Gross Revenues, except the income from investments (hereinafter
discussed), derived from the operation of the System must be deposited in the
Revenue Fund. The Revenue Fund constitutes a trust fund for the purpose provided
in the ordinance, and must be kept separate and distinct from all other funds of
the City and used only for the purposes and in the manner provided in the
Ordinance.
All revenues at any time remaining on deposit in the Revenue Fund must be
disposed of on or before the fifteenth (15th) day of each month only in the
following manner and in the following order or priority:
1. Revenues must first be used to deposit in the Operation and
Maintenance Fund, such sums as are necessary for the Cost of Operation and
Maintenance for the next ensuing month.
2. Revenues must next be used for deposit into the Interest Account,
such sums as will be sufficient to pay one -sixth (1/6) of all interest becoming
due on the Series 1994A Bonds and the Series 1991 Bonds on the next semi- annual
interest payment date.
3. Revenues must next be used for deposit into the Principal Account,
in any bond year in which a Serial Bond matures, such sums as will be sufficient
to pay one - twelfth (1/12) of the principal maturing on Serial Bonds in such year.
4. Revenues must next be used for deposit into the Bond Amortization
Account in any bond year in which an Amortization Installment is due, such sums
as will be sufficient to pay one - twelfth (1/12) of the Amortization Installment
required to be made in such year. Such payment will be credited to a separate
special account for each series of Term Bonds outstanding, and if there is more
than one stated maturity for Term Bonds of a series, then into a separate special
account in the Bond Amortization Account for each such separate maturity of Term
Bonds. The funds and investments in each such separate account are 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 will not be available for
payment, purchase or redemption of Term Bonds of any other series or within a
series, or for transfer to any other account in the Sinking Fund to make up any
deficiencies in required payments therein.
Moneys on deposit in each of the separate special accounts in the Bond
Amortization Account are required to be used for the open market purchase or the
redemption of Term bonds, pursuant to the Ordinance of the 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 required deposits to the Principal Account, Interest Account and Bond
Amortization Account are required to be adjusted in order to take into account
the amount of money currently on deposit therein.
51 Revenues must next be applied by the City to maintain in each
subaccount in the Reserve Account a sum equal to the Reserve Requirement, if any,
for any subsequent year on each series of Bonds, which sum will initially be
deposited therein from the proceeds of the sale of the Series 1994A Bonds and
other funds of the City. To the extent the City determines pursuant to a
subsequent resolution to fund a subaccount within the Reserve Account for a
respective series of Bonds, the City may provide that the difference between the
amounts on deposit in such subaccount and the Reserve Requirement for such series
of Bonds shall be an amount covered by obtaining bond insurance issued by a
reputable and recognized municipal bond insurer, by a surety bond, by a letter
of credit or any combination thereof or by such other form of credit enhancement
as shall be approved by a resolution of the City adopted prior to the issuance
of the series of Bonds for which such subaccount is established. Such resolution
may also provide for the substitution of such credit enhancement. Bond
insurance, a surety bond, a letter of credit or any combination thereof or such
other form of credit enhancement may in the future be deposited in the subaccount
in the Reserve Account for the Series 1994A Bonds as may be approved by
subsequent resolution of the City, provided that the provider of such credit
enhancement is then rated in one of the two highest rating categories (without
regard to gradation) by Standard & Poor's Corporation and Moody's Investors
Service, Inc.
Any withdrawals from any subaccount in the Reserve Account are required to
be subsequently restored from the first moneys available in the Revenue Fund on
a pro rata basis as to all subaccounts in the Reserve Account after all required
current payments for the Operation and Maintenance Fund and Sinking Fund
(including all deficiencies in prior payments to those Funds) have been made in
full.
Notwithstanding any provision of the Ordinance to the contrary, moneys in
each subaccount in the Reserve Account may be used only for the purpose of the
payment of maturing principal of or interest or making Amortization Installments
on the Bonds for which such subaccount was established when the other moneys in
the Sinking Fund are insufficient therefor, and for no other purpose including
the payment of any other series of Bonds.
In the event of the refunding of any series of Bonds, the City may withdraw
from the subaccount within the Reserve Account for such series of Bonds, all or
any portion of the amounts accumulated therein with respect to the Bonds being
refunded and deposit such amounts as required by the resolution authorizing the
refunding of such series of Bonds.
6. The City must next deposit into the Renewal and Replacement Fund an
amount equal to one - twelfth (1/12) of an amount equal to 5% of prior year's Gross
Revenues; provided, however, that so long as there shall be on deposit in such
Renewal and Replacement Fund a balance of at least $300,000, no additional
deposits in such Fund are required. The moneys in the Renewal and Replacement
Fund may 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 on deposit in such Fund are also
required to be used to supplement the Reserve Account if necessary, in order to
prevent a default in the payment of the principal or Amortization Installments
of and interest on the Bonds.
7. The balance of any moneys remaining in the Revenue Fund after the
above required payments have been made may be used by the City for any lawful
purpose.
8. The Operation and Maintenance Fund, the Sinking Fund, the Renewal and
Replacement Fund, the Revenue Fund, and all accounts therein and any other
special funds established and created under the Ordinance constitute trust funds
for the purposes provided herein for such funds. All such funds shall be
continuously secured in the same manner as city deposits are authorized to be
secured by the laws of the State of Florida.
COVENANTS
Rate Covenant
In and by the Ordinance, the City has covenanted that it will fix,
establish, revise from time to time whenever necessary, maintain and collect
always, such fees, rates, rentals and other charges for the use of the product,
services and facilities of the system which will always provide Revenues in each
year sufficient to pay, and out of such funds pay, 100% of the Cost of Operation
and Maintenance of the System in such year and all reserve and other payments
provided for in the Ordinance and 125% of the Bond Service Requirement due in
such year on all outstanding Bonds. The City has covenanted that such rates,
fees, rentals, or other charges shall not be reduced so as to be insufficient to
provide Revenues for such purposes.
Additional parity obligations
Additional Parity Obligations, payable on a parity from Net Revenues of the
System with the Series 1994A Bonds, may be issued after the issuance of the
Series 1994A Bonds, for construction and acquisition of additions, extensions and
improvements to the System or for refunding purposes and upon the following
conditions:
1. The Net Revenues derived or which would have been derived, if
adjusted as set forth below, from the System, either during the immediately
preceding Fiscal Year, during any twelve (12) consecutive calendar months of the
eighteen (18) calendar months immediately preceding the sale of the proposed
Additional Parity Obligations or during the last twelve (12) month period for
which the City has audited financial statements for the System, at the option of
the City, shall have been not less than 125% of the Maximum Bond Service
Requirement which will become due in any calendar year thereafter on (a) the
Series 1994A Bonds then outstanding, (b) any Additional Parity Obligations issued
and then outstanding (including the Series 1991 Bonds), and (c) the Additional
Parity Obligations then proposed to be issued.
In determining the amount of Net Revenues for the purposes of paragraph (1)
above, the Consulting Engineers may adjust the Net Revenues by adding thereto the
following:
a. The Net Revenues (computed for such utility on the same basis
as net revenues are computed for the System) of any gas utility which the
City shall have acquired prior to the issuance of such Additional Parity
Obligations or which the City shall be acquiring from proceeds of such
Additional Parity Obligations; and
b. In the event a change has been made in the rate schedules for
services from the System prior to the issuance of the proposed Additional
Parity Obligations for a part of such 12 month period referred to in (1)
above, and such change has resulted in an increase in Net Revenues, such
amount of additional Net Revenues which the consulting Engineers estimated
would have been received by the City during such 12 month period if such
change in such rate schedule had been in effect during the entire 12 month
period; and in the event a change has been made in the rate schedules for
services from the System prior to the issuance of the proposed Additional
Parity Obligations for a part of such 12 month period referred to in (1)
above, and such change has resulted in a decrease in Net Revenues, by
subtracting therefrom such amount of the Net Revenues which the Consulting
Engineers estimate would not have been received by the City during such 12
month period referred to in (1) above, if such change in such rate
schedule had been in effect during the entire 12 month period.
2. Each resolution or ordinance authorizing the issuance of Additional
Parity obligations will recite that all of the covenants contained in the
ordinance will be applicable to such Additional Parity obligations.
3. The City shall not be in default in performing any of the covenants
and obligations of the ordinance, if all payments required to have been made into
the accounts and funds, as provided in the ordinance, shall have been made to the
full extent required:
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operation and Maintenance
The City covenants it will maintain the System and all parts thereof in
good eondit�ion 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.
Operating Budget
The City covenants to annually prepare and adopt prior to the beginning of
each of its Fiscal Years, a detailed budget or budgets of the estimated
expenditures for the operation and maintenance of the System during such next
succeeding Fiscal Year.
Annual Audit
At least once a year, within six months after the close of its Fiscal Year,
the City covenants to cause the books, records and accounts relating to the
System to be properly audited by a recognized independent firm of certified
public accountants.
No Mortgage or Sale of the System
The City has covenanted not to sell, lease, mortgage, pledge or otherwise
encumber the System, or any substantial part thereof, or any revenues to be
derived therefrom, except as described below.
Notwithstanding the foregoing, the City has reserved the right to sell,
lease or otherwise dispose of any of the property comprising a part of the System
which the City hereafter determines, in the manner provided in the ordinance, to
be no longer necessary, useful or profitable in the operation of the System.
Prior to any such sale, lease or other disposition of said property, if the
amount to be received therefor is not in excess of $50,000, the City Manager of
the Issuer or other duly authorized officer in charge thereof is required to make
a finding in writing determining that such property comprising a part of the
System is no longer necessary, useful or profitable in the operation thereof.
If the amount to be received from such sale, lease or other disposition of
said property is in excess of $50,000 but not in excess of $100,000 such City
Manager or other officer is required to first make a finding in writing
determining that such property comprising a part of the System is no longer
necessary, useful or profitable in the operation thereof, and the governing body
of the Issuer must, by resolution or ordinance duly adopted, approve and concur
in the finding of such City Manager or other officer, and authorize such sale,
lease or other disposition of said property.
If the amount to be received from such sale, lease or other disposition of
said property is in excess of $100,000 but not in excess of 10% of the value of
fixed assets of the System according to the most recent annual audit report, such
City Manager or other officer must first make a finding in writing determining
that such property comprising a part of the System is no longer necessary, useful
or profitable in the operation thereof, and the Consulting Engineer must make a
finding that it is in the best interest of the System that such property be
disposed of, and the governing body of the City must by resolution or ordinance,
duly adopted, approve and concur in the findings of such City Manager or other
officer and of the Consulting Engineer, and authorize such sale, lease or other
disposition of said property.
Anything in this section to the contrary notwithstanding, nothing restricts
the governing body of the City or, to the extent such authority has been vested
in the City Manager by such governing body, the City Manager in exercising
discretion, from authorizing the sale or other disposition of any of the property
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1
I
comprising a part of the System, if the Consulting Engineer certifies that the
Net Revenues of the System will not be materially adversely affected by reason
of such sale or disposition.
Such proceeds must be placed in the Renewal and Replacement Fund or used
for the retirement of outstanding Series 1994A Bonds [or the parity bonds], in
such proportions to be determined by the governing body of the City upon the
recommendations of the City Manager. The payment of such proceeds into the
Renewal and Replacement Fund do not reduce the amounts required to be paid into
such Fund by other provisions of the Ordinance.
Anything in this section to the contrary notwithstanding, nothing prohibits
the City from transferring ownership of the system to another governmental entity
in accordance with the Ordinance without complying with the provisions described
in this section..
S
No Free Service
i
The City has covenanted not to render or cause to be rendered any free
services, except to the extent that certain marketing and sales programs may
involve incentives to the customer with such resulting expenses paid for by
appropriate marketing and sales expense funds of the System. Nor will any
preferential rates be established for users of the same class, except that the
City Commission has authorized by ordinance the use of discounted gas service
rates to avoid the loss of a customer who has decided to consent to a lower cost
alternate energy source. Whenever the City, including its departments, agencies
and instrumentalities, shall avail itself of the product, facilities or services
provided by the System, or any part thereof, the same rates, fees or charges
applicable to other customers receiving like services under similar circumstances
shall be charged to the City and any such department, agency or instrumentality.
Such charges shall be paid as they accrue, and the City is required to transfer
from its general funds to the Gas Revenue Fund sufficient sums to pay such
charges. The revenues so received will be deemed to be Revenues derived from the
operation of the System, and be deposited and accounted for in the same manner
as other Gas Revenues derived from a similar operation.
Enforcement of Collections
The City has covenanted to enforce and collect the rates, fees and other
charges for the services and facilities of the system herein pledged; to take all
steps, actions and proceedings for the enforcement and collection of such rates,
charges and fees as shall become delinquent to the full extent permitted or
authorized by law; and to maintain accurate records with respect thereof. All
such fees, rates, charges and revenues pledged pursuant to the Ordinance will,
as collected, be held in trust to be applied as provided in the ordinance.
The City will, under reasonable rules and regulations, to the full extent
permitted by law, shut off the connection of any users of the system for non -
payment of fees, rentals and other charges for the services of the System and
will not furnish him or permit him to receive from the System further service
until all obligations owed by him to the City on account of services have been
paid in full.
No Competing System
To the full extent permitted by law, the City has covenanted not to
hereafter grant, or cause, consent to, or allow the granting of, any franchise
or permit to any person, for the furnishing of competing gas services to or
within the boundaries of the service area of the city; provided, however, that
if the Gas System Manager renders an opinion that it would not be feasible for
the City to provide such services to any specific area within the three years
succeeding a request to provide such service, the city may authorize or allow the
12
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granting of such franchise or permit for such area upon such terms and conditions
as it may approve.
Unlawful Connection Prohibited
The City has enacted an ordinance making it unlawful for any person or
persons to tamper with, change or make any connection with the System without the
written consent of the City, or to make any reconnection with the System when
service has been discontinued for delinquent charges, until such delinquent
charges have been paid in full, including interest, reasonable penalties and
reconnection charges. The City will diligently, to the full extent permitted by
law, enforce this covenant and prosecute any person violating the provisions of
this covenant or any penal ordinance relating to the same.
Amendment of the Ordinance
In the Ordinance, the City has reserved the right to amend or supplement
the Ordinance for certain purposes without the consent of Bondholders if the
amendment or supplement does not adversely affect the rights of Bondholders.
otherwise, no material modification or amendment of the Ordinance may be made
without the consent in writing of a majority of the Bondholders of the principal
amount of the Series 1994A Bonds of each Series so affected and then outstanding;
provided, however, that no modification or amendment may permit a change in the
maturity of such Series 1994A Bonds or a reduction in the rate of interest
thereon or in the amount of the principal obligation thereof or affecting the
promise of the City to pay the principal of and interest on the Series 1994A
Bonds as the same become due from the Net Revenues of the System or reduce the
percentage of the Bondholders required to consent to any material modification
or amendment of the ordinance without the consent of the Bondholders of all such
obligatiot£f. -} For purposes of this paragraph, to the extent that any Series 1994A
Bonds are secured by a Credit Facility and such Series 1994A Bonds are then rated
in one of the two highest rating categories (without regard to gradation) by
either Standard & Poor's Corporation or Moody's Investors Service, Inc., or
successors and assigns, then the consent'of the Credit Facility issuer will be
deemed to constitute the consent of the Bondholders and in such case no consent
of the Bondholders is required.
THE SYSTEM
Physical Description
The Clearwater Gas System ( "CGS" or "System) began operations in the mid -
1920's with the production, distribution and sale of manufactured gas. The
System was converted to natural gas in 1959 when Florida Gas Transmission (FGT)
extended pipelines into Florida. CGS also provides propane (LP) service in areas
where natural gas mains have not yet been extended. In addition to serving the
City of Clearwater, the CGS has expanded into, and has franchise agreements with,
the cities of Belleair, Belleair Beach, Belleair Bluffs, Dunedin, Indian Rocks
Beach, Largo, Oldsmar, Safety Harbor, and Tarpon Springs. The System also
services the unincorporated area between these cities. The franchise agreements
expire respectively in 2020, 2002, 2020, 2018, 2001, 2014, 2001 and 2013, which
in some instances is prior to the maturity of the Series 1994A Bonds. It is
anticipated that such franchise agreements will be renewed upon their expiration;
however, there is no assurance of such renewals. Each franchise agreement
authorizes the respective municipality to terminate the franchise agreement in
the event the City fails to furnish gas for a period of 72 hours as required by
the agreement for causes within the control of the City. In addition, the
franchise agreements with Dunedin, Belleair Bluffs, Largo and Safety harbor
authorize the municipality to purchase from the City the property used with
respect to each franchise at the expiration of the franchise. The franchise
agreements with Oldsmar and Tarpon Springs authorize Oldsmar and Tarpon Springs
to purchase such property during the term of the franchise as well as at
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expiration. CGS currently serves 12,010 customers and has 482 miles of gas main
as of June, 1994. According to a survey conducted by Pipeline & Gas Journal
dated September, 1993, the Clearwater Gas System ranked as the third largest
municipal natural gas system in Florida and the 39th largest in the United
States.
Management
The City has a Commission- Manager form of municipal government. The Mayor -
Commissioner and Commissioners are elected by the City's voters on an at -large
basis. All have voting power at Commission meetings which are chaired by the
Mayor - Commissioner. The City Commission appoints the City Manager and the City
Manager is responsible for appointing all officers and employees in the
administrative service of the City, including the Managing Director & Executive
Officer of the Clearwater Gas System.
The Clearwater Gas System is administered by the Gas System Managing
Director & Executive Officer who reports directly to the City Manager. CGS is
one (1) of six (6) utilities (Water, Sewer, Gas, Solid Waste, Recycling, and
Stormwater) billed on a consolidated basis by the Clearwater Utility Customer
Support.
Charles S. Warrington, Jr. currently serves as Managing Director &
Executive Officer of the Clearwater Gas System and reports directly to the City
Manager. He received his Bachelor of Electrical Engineering degree from the
Georgia Institute of Technology in 1971 and is a 1982 graduate of the University
of Michigan Public Utility Executive Program. He has been a registered
Professional Engineer in the State of Florida since 1976.
Prior to joining the City of Clearwater in February 1992, Mr. Warrington
served as Director of Customer Services for Florida Power & Light Company (FPL),
the largest electric utility in the State of Florida. Mr. Warrington was
responsible for Corporate -wide customer service policies, procedures, systems,
training and regulatory interface. Prior to this position, he had served as a
District General Manager for two (2) of the largest FPL districts (Miami and
Coral Gables). In total, Mr. Warrington has 23 years of public utility
experience of increasing responsibility.
Mr. Warrington currently serves on the Board of Directors of the Florida
Natural Gas Association, serves on the Board of Directors and as Secretary to the
Municipal Gas Authority of Florida, and serves on the Board of Directors and as
Vice President of the Florida Engineering Society - Pinellas Chapter.
Terry Neenan has served as Assistant Director of CGS /Gas Supply &
Operations since 1994. Prior to that he served as Gas Superintendent from 1986
until 1994, Assistant Superintendent from 1982 to 1986, Service Supervisor from
1979 to 1982, and utilities Serviceman from 1968 to 1982 all with the Clearwater
Gas System. He holds a Master Gas Contractor License with Pinellas County, a
Natural Gas Specialty Contractor License with the Pinellas County Construction
Licensing Board, a 601 LP License from the Department of Agriculture, and holds
other licenses and certificates related to natural and LP gas. Mr. Neenan serves
as qualifier for the Clearwater Gas System both in Pinellas and Pasco Counties.
Mr. Neenan graduated from Largo Senior High School in 1960 and has attended St.
Petersburg Junior College and the Florida Gas Transmission School in Sanford.
He has served as a Secretary, Treasurer, Vice chairman and Chairman of the
operating Section of Florida Natural Gas Association. He has also served two
years as Secretary to the Florida Municipal Natural Gas Association.
James M. Lewin, Sr. has served as Assistant Director of CGS /ras Marketing
& Planning since April 1994. Prior to that, he served as Assistant
Superintendent from 1986 to 1994, Gas Supervisor from 1977 to 1986, and as a
Distribution Serviceman from 1974 to 1977, all with the Clearwater Gas system.
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Mr. Lewin also holds a Natural Gas Specialty Contractor License with the Pinellas
County Construction Licensing Board, a 601 LP License from the Department of
Agriculture, and holds other licenses and certificates related to natural gas.
Mr. Lewin graduated from Largo High School in 1972. He is three (3) credit hours
from completing an Associate of Arts Degree in Business Administration.
Gas Supply
The City purchases its supply of natural gas from the Citrus Industrial
Sales Company, Inc. The present supply of gas is based on service agreements
between the City, the Municipal Gas Authority of Florida (MGAF) and Florida Gas
Transmission Company (FGT). On August 1, 1990, the Federal Energy Regulatory
Commission (FERC) deregulated the natural gas pipeline industry. This allows
other natural gas suppliers and local distribution companies (LDC), like the
Clearwater Gas System to transport gas over FGT pipelines as opposed to
purchasing natural gas supply from only FGT.
FGT at the present time is equally owned by Enron Corporation and Sonat,
Inc. Enron Corporation through its subsidiaries operates or has interest in
approximately 37,000 miles of transportation pipelines from Texas to the Canadian
border and from California to Florida. Sonat, Inc. owns and has interest in
natural gas transportation facilities that provide service in the states of
Florida, Georgia, Alabama, South Carolina, Tennessee, Mississippi, and Texas as
well as the Federal Offshore Domain in and around the State of Louisiana.
MGAF is an inter -local municipal organization which purchases natural gas
supplies for fifteen (15) municipally owned LDCS and Gas Districts served by FGT.
Clearwater Gas System was a leader in forming MGAF. The City of Clearwater
joined MGAF by Resolution 92 -75 which was adopted by the City Commission on
December 3, 1992. MGAF began purchasing gas supplies for Clearwater Gas System
through a three (3) year gas management and purchasing contract with Citrus
Industrial Sales Company in November 1993. These agreements provide a maximum
daily quantity of approximately 10,219 MMBtu's of natural gas during the months
of November to April; 4,652 MMBtu's during the months of May to September; and
7,496 MMBtu's for the month of October. The total annual entitlement is
2,793,771 MMBtu's of natural gas transportation.
FGT is constructing an additional gas pipeline along the west coast of
Florida called Phase III, which will increase the supplies of gas available to
the CGS. Clearwater Gas has entered into Phase III transportation agreements
with FGT for an additional 1,781 MMBtu's to be delivered during the summer and
1,348 MMBtu's delivered in the winter. Phase III is projected to be in service
date by the end of December 1994. Phase III will increase our yearly
transportation entitlement by 583,816 MMBtu's. This will establish a new annual
entitlement of 3,377,587 MMBtu's to be delivered by the FGT pipeline, which will
provide adequate capacity through at least the year 1998. It is anticipated that
additional entitlements can be acquired from either the proposed FGT Phase IV or
the proposed Sunshine Pipeline to satisfy CGS's customers' needs into the twenty -
first century.
Rates, Fees and Charges
The City Commission has established a schedule of rates and charges by
ordinance, which includes a purchased gas cost adjustment provision allowing the
City to pass - through to customers any increase or decrease in the purchased price
of gas. The City is not subject to regulation by any State agency in
establishing or revising its rates. In the last five years the general (firm)
and interruptible rates have ranged from lows of 61.2360 and 42.1160 per therm
in July 1990 to highs of 830 per therm in dune 1993 and 600 per therm in December
1992, respectively. The current rates are as follows
15
Rate Schedule Rate per Therm
General (Firm)
Interruptible
Service Area
CGS's present service area covers all of northern Pinellas County, an area
of approximately 135 square miles. The service area is generally bounded by
Ulmerton Road on the south, the Gulf of Mexico on the west, the Pasco County line
on the north and the Hillsborough County line and the Tampa Bay on the east. In
addition to the City of Clearwater, the service area includes the cities of
Belleair, Belleair Beach, Belleair Bluffs, Belleair Shores, Dunedin, Indian Rocks
Beach, Largo, Oldsmar, Safety Harbor and Tarpon Springs, as well as portions of
the unincorporated areas of northern Pinellas County.
As of June 1994, the latest date as of which the information is readily
available, CGS's active natural gas customers were located as shown in the
following table:
Location Meters Percentage
Belleair 261 2.3%
Belleair Beach 9 0.1
Belleair Bluffs 10 0.1
Clearwater 6,433 57.2
Dunedin 982 8.7
Indian Rocks Beach 4 0.1
Largo 1,172 10.4
Oldsmar 22 0.2
Safety Harbor 504 4.5
Tarpon Springs 286 2.5
Unincorporated Areas 1.568 13.9
Total 11,251 100.0%
CGS provides service to firm (non - interruptible) and interruptible classes
of customers. CGS derives less than one percent of its revenues from its largest
firm customer.
The following table shows the five (5) largest interruptible customers by
peak monthly consumption and the percent of the CGS's revenues derived from such
customers during the 12 months ending September 30, 1993:
Peak % of
Customer ,Name Monthly Therms Gross Revenues
National Linen Services, Inc. 73,320 3.6%
Metal Industries, Inc. 48,530 2.7%
Morton F. Plant Hospital 0) 45,960 0.7%
Aubrey T. Moorefield Paving
Contractors, Inc. (Z) 41,330 1.7%
Clearwater Linen & Uniform
Supply, Inc. 27,800 1.4%
(1) Used an alternative fuel service until May, 1993.
(2) Currently using an alternative fuel service since July, 1993.
Cas's customers have grown in the past five years from 10,490 in September
1989 to 12,010 in June 1994. Cas's 12,010 customers represent a market
16
penetration of approximately 5 %, providing a significant opportunity for
continued customer growth within the existing service area.
The following table shows the breakdown of CGS's customers by category as
well as the volume of gas sold and the sales revenues generated by each category
for the fiscal year ending September 30, 1993:
Clearwater Gas Strategic Plan
The management of Clearwater Gas System developed a comprehensive "1993-
2000 Strategic Plan" which was presented to the City of Clearwater Commission on
August 10, 1993. This Strategic Plan provided four (4) aggressive strategic
opportunities:
1. Continue the existing level of gas service operations and
growth rate in Pinellas County - this is projected to add
2,800 new customers by the year 2000;
2. Accelerate growth in Pinellas county - this is projected to
add an additional 2,500 new customers by the year 2000;
3. Expand gas service into Pasco County - this is projected to
add an additional 1,900 new customers by the year 2000; and
4. Develop new Gas Markets - this would allow CGS to expand
services into new market opportunity areas such as Natural Gas
Vehicles and Gas Air Conditioning.
All four strategies by the City Commission are projected to allow
Clearwater Gas System to grow by 60% to 19,000 customers by the year 2000. It
is estimated that its growth would provide gross revenues of $25 million and net
income of $6.1 million by the year 2000.
The City Commission approved this Strategic Plan in its entirety and began
the process of authorizing a total of $35 million in additional Gas Revenue Bonds
to support this Strategic Plan by approval of City of Clearwater Resolution 94 -21
(Gas System Bond Reimbursement Declaration of Intent) on February 28, 1994 and
by subsequent approval of City of Clearwater Ordinance 5564 -94 (Gas System
Revenue Bond Issue 1994A) on August 4, 1994. The Series 1994A Bonds are the
first issue of bonds required to implement the funding for the overall Strategic
Plan.
[Remainder of page intentionally left blank.]
17
Average No.
Gas
Gas
Customers
Volume
Sales
Interruptible
10
17.5%
13.1%
Residential
9,029
23.5%
25.1%
Commercial
1,926
59.0%
61.8%
Clearwater Gas Strategic Plan
The management of Clearwater Gas System developed a comprehensive "1993-
2000 Strategic Plan" which was presented to the City of Clearwater Commission on
August 10, 1993. This Strategic Plan provided four (4) aggressive strategic
opportunities:
1. Continue the existing level of gas service operations and
growth rate in Pinellas County - this is projected to add
2,800 new customers by the year 2000;
2. Accelerate growth in Pinellas county - this is projected to
add an additional 2,500 new customers by the year 2000;
3. Expand gas service into Pasco County - this is projected to
add an additional 1,900 new customers by the year 2000; and
4. Develop new Gas Markets - this would allow CGS to expand
services into new market opportunity areas such as Natural Gas
Vehicles and Gas Air Conditioning.
All four strategies by the City Commission are projected to allow
Clearwater Gas System to grow by 60% to 19,000 customers by the year 2000. It
is estimated that its growth would provide gross revenues of $25 million and net
income of $6.1 million by the year 2000.
The City Commission approved this Strategic Plan in its entirety and began
the process of authorizing a total of $35 million in additional Gas Revenue Bonds
to support this Strategic Plan by approval of City of Clearwater Resolution 94 -21
(Gas System Bond Reimbursement Declaration of Intent) on February 28, 1994 and
by subsequent approval of City of Clearwater Ordinance 5564 -94 (Gas System
Revenue Bond Issue 1994A) on August 4, 1994. The Series 1994A Bonds are the
first issue of bonds required to implement the funding for the overall Strategic
Plan.
[Remainder of page intentionally left blank.]
17
Gas System Revenue Bonds
A breakdown of the Gas System Revenue Bond issues planned is as follows:
ISSUE
Loncr Range Stratecfic Plan Bond Issues 1993 -2000 TOTAL 1994A
Pinellas County Gas Main & Service Extensions
Pasco County Gas Main & Service Extensions
Develop New Gas Markets (NG Vehicles & Gas A /C)
Subtotal Net Capital Requirements for Strategic
Plan Expansion
Allowance for Additional Authorized Expansion
Projects
Allowance for Bond Expenses & Debt. Service
Reserve Fund
Total 1994 Gas Revenue Bond Issue Requested
Pasco County Territorial Dispute
$12.93 $5.67
9.56 -0-
2.24 1.34
$24.73 $7.01
ISSUE
1994B
$ 7.26
9.56
.90
$17.72
5.00 -0- 5.00
5.27 1.24 4.03
$35.00 $8.25 $26.75
On June 21, 1994, Peoples Gas System, Inc., petitioned the Florida Public
Service Commission (FPSC) to resolve a territorial dispute between Peoples Gas
System (PGS) and Clearwater Gas System relating to the Pasco County Service
territory. PGS has asked the FPSC to deny CGS the Pasco County territory and
certify the area for Peoples Gas. The City intends to vigorously defend its
right to serve this area which is immediately adjacent to the City's existing
service territory and a logical extension thereto, whereas PGS's nearest
facilities are over 16 miles away. Resolution of this territorial dispute in
favor of the City must occur before the issuance of bonds may be undertaken to
fund that project.
Manufactured Gas Plant
Clearwater Gas System operated a manufactured gas plant at the site of the
System's existing Administrative Offices & Operations Center at 400 North Myrtle
Avenue near downtown Clearwater from the mid- 1920's to approximately 1960. The
plant has since been dismantled and the gas holder removed around 1984
on October 17, 1988, the Florida Department of Environmental Regulation
(FDER) completed a preliminary assessment at the site and concluded that a site
screening investigation was warranted. The U.S. Environmental Protection Agency
(EPA) retained a contractor to conduct this investigation in 1990 and determined
that there was "no evidence that on -site or near off -site disposal of
gasification by- products ever took place." However, due to "poor housekeeping
and waste disposal practices at other gasification plants," they concluded that
"gasification by- products may also be present at this site." EPA recommended a
medium priority for a FDER site screening investigation.
In December 1993 the Florida Department of Environmental Protection (FDEP)
informed the City that they were ready to proceed with the site investigation.
The City has retained a licensed Environmental Contractor who is experienced in
manufactured gas plant site investigations to perform a Contamination Assessment
Plan for the former gas plant site. Currently under negotiation are the terms
of an Inter- governmental Agreement between the City and the FDEP to establish the
parameters of the site assessment.
The City does not believe that the site will require extensive clean -up;
however, the extent of such clean -up (if any is required) will not be known until
the Contamination Assessment Plan is concluded.
18
ADDITIONAL PROJECT
The following chart shows the current components for the 1994E Project to
be funded by the Series 1994B Bond proceeds and certain investment earnings:
Pasco County Gas Main and Service Extensions
- Trunk Main Line Extension
- Commercial and Residential Main and
Service Line Extensions
- Engineering Design Services and Other
Consultants
- Pasco vehicles (0) and Computers (0)
[MUNICIPAL BOND INSURANCE]
[To come]
THE CITY AND PINELLAS COUNTY
The City is a municipal corporation organized and existing under the laws
of the State of Florida. The City is located in the middle of the west coast of
Florida on the Gulf of Mexico and has a population of Its City limits
comprise of approximately 32 -1/2 square miles of land and 8.5 square miles of
waterways and lakes.
The City is governed by a City Commission and operates under a Commission -
Manager form of government. The City Commission appoints a full -time City
Manager and a full -time City Attorney. A full -time Director of Finance has the
responsibility for all internal auditing and financial record keeping operations
of the City, and is appointed by the City Manager. Also, an internal audit
director is appointed by the City Manager and serves full time.
The City is primarily a resort and residential community of well -kept homes
and recent developments of condominium apartments. The City has many
recreational facilities including tennis, golf, boating, fishing, water sports,
and recreational paths. During the winter months, the hotels, motels, and
restaurants fill to capacity with visiting tourists and winter residents. The
City offers over 42 acres of public beach front.
The City of Clearwater and the other municipalities served by the System
are located in Pinellas County, Florida. Pinellas County is the second smallest
county in the state in land mass, but is the most populated county in
Florida and the most densely populated with nearly residents. Major
private employers in the County include an electric utility holding company, a
television merchandiser, several hospitals, a newspaper publisher, and a
retailer's corporate headquarters. Tourism is the largest industry in the County
employing over people in hotels, shops, restaurants and other related
businesses. Annual visitors exceed million people.
Further information on the City is contained in Appendix A - "GENERAL
INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA ".
19
{4
1�
COMBINED DEBT SERVICE REQUIREMENTS
Set forth below are the amounts of principal and interest on the Series
1991 Bonds and the Series 1994A Bonds and the combined debt service of each in f
the bond years indicated,
Bond
Year
Ending Series 1991 Bonds Series 1994A Bonds Combined
Sept. 1 Principal Interest Principal Interest Debt Service
1995
1996
1997
1996
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
` 2018
2019
2020
2021
2022
2023
2024
Total
20
HISTORICAL COVERAGE OF MAXIMUM DEBT SERVICE BY NET REVENUES
Fiscal Year Ending 1991 1992 1993
Gross Revenues (1) $9,865,958 $11,586,605 $12,562,105
Cost of Operation
and Maintenance (1) 7,977,703 8,116,051 9,364,981
Net Revenues 1,888,255 3,470,554 3,197,124
Projected Maximum
Annual Debt Service (2) 1,250,313 1,250,313 1,250,313
Coverage of Projected
Maximum Annual Debt
Service by Net Revenues 1.51x 2.78x 2.56x
(1) City of Clearwater, Annual Financial Reports (Audited)
(2) Assumes $8,180,000 in par amount of Series 1994A Bonds at 6.64% true
interest cost.
i
RATINGS
Moody's Investors Service, Inc. and Standard & Poor's Corporation have
assigned the Series 1994A Bonds ratings of and ,respectively. Such
ratings reflect the views of the rating agencies and an explanation of the
significance of such ratings may be obtained only from the rating agencies
furnishing the same. There is no assurance that such ratings may be continued
for any given period of time or that they will not be revised downward or
withdrawn entirely by such rating agencies, if in its judgment, circumstances so
warrant. Any such downward revisions or withdrawal of such ratings may have an
adverse effect on the market price of the Series 1994A Bonds. If the successful
purchaser in the competitive bidding on the Series 1994A Bonds elects to cause
the issuance of the Municipal Bond Insurance Policy referred to herein, then
Standard & Poor's Corporation and Moody's Investor Services, Inc. will assign
their municipal bond ratings of "AAA" and "Aaa ", respectively, to the Series
1994A Bonds with the understanding that upon delivery of the Series 1994A Bonds,
a policy insuring the payment when due of the principal of and interest on the
Series 19945 Bonds will be issued by For any additional description of
ratings and their meanings, Moody's Investors Service, Inc. and Standard & Poor's
Corporation should be contacted.
LEGALITY
Certain legal matters in connection with the issuance of the Series 1994A
Bonds are subject to the approval of Bryant, Miller and Olive, P.A., Tallahassee,
Florida, Bond Counsel, whose Bond Counsel opinion will be available at the time
of delivery of the Series 1994A Bonds. The proposed form of such opinion of Bond
Counsel is attached to this Official Statement as Exhibit D. certain legal
matters will be passed upon for the City by Alan Zimmet, Esquire, Interim City
Attorney.
TAX EXEMPTION
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 1994A Bonds in order that interest on the Series 1994A Bonds be and
remain excluded from gross income for purposes of federal income taxation. Non-
compliance may cause interest on the Series 1994A Bonds to be included in federal
grass income retroactive to the date of issuance of the Series 1994A Bonds,
regardless of the date on which such non - compliance occurs or is ascertained.
Those requirements include, but are not limited to, provisions which prescribe
yield and other limits within which the proceeds of the Series 1994A Bonds and
the other amounts are to be invested and require that certain investment earnings
21
on the foregoing must be rebated on a periodic basis to the Treasury Department
of the United States. The city has covenanted in the Ordinance to comply with
such requirements in order to maintain the exclusion from federal gross income
of the interest on the Series 1994A Bonds.
In the opinion of Bond Counsel, assuming compliance with the aforementioned
covenants, under existing laws, regulations, judicial decisions and rulings,
interest on the Series 1994A Bonds is excluded from gross income for purposes of
federal income taxation. Interest on the Series 1994A Bonds is not an item of tax
preference for purposes of the federal alternative minimum tax imposed on
individuals or corporations; however, interest on the Series 1994A Bonds may be
subject to the alternative minimum tax when any Bond is held by a corporation.
The alternative minimum taxable income of a corporation must be increased by 75%
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 1994A Bonds. The Series 1994A Bonds are exempt from all
present intangible personal property taxes imposed pursuant to Chapter 199,
Florida Statutes.
Except as described above, Bond Counsel will express no opinion regarding
the federal income tax consequences resulting from the ownership of, receipt or
accrual of interest on, or disposition of Series 1994A Bonds. Prospective
purchasers of Series 1994A Bonds should be aware that the ownership of Series
1994A Bonds may result in collateral federal income tax consequences, including
(i) the denial of a deduction for interest on indebtedness incurred or continued
to purchase or carry Series 1994A Bonds, (ii) the reduction of the loss reserve
deduction for property and casualty insurance companies by 15% of certain items,
including interest on the Series 1994A Bonds, (iii) for taxable years beginning
before January 1, 1996, the inclusion of interest on Series 1994A Bonds in
"modified alternative minimum taxable income" for purposes of the environmental
tax imposed on corporations, (iv) the inclusion of interest on the Series 1994A
Bonds in earnings of certain foreign corporations doing business in the United
States for purposes of a branch profits tax, (v) the inclusion of interest on
Series 1994A Bonds in passive income subject to federal income taxation of
certain Subchapter S corporations with Subchapter C earnings and profits at the
close of the taxable year, and (vi) the inclusion of interest on the Series 1994A
Bonds in "modified adjusted gross income" by recipients of certain Social
Security and Railroad Retirement benefits for purposes of determining whether
such benefits are included in gross income for federal income tax purposes.
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 1994A BONDS AND THE
RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX
CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS. PROSPECTIVE
BONDHOLDERS 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 1994A
Bonds. In some cases these proposals have contained provisions that altered
these consequences on a retroactive basis. Such alteration of federal tax
consequences may have affected the market value of obligations similar to the
Series 1994A Bonds. From time to time, legislative proposals are pending which
could have an effect on both the federal tax consequences resulting from
ownership of series 1994A Bonds and their market value. No assurance can be
given that legislative proposals will not be introduced or enacted that would or
might apply to, or have an adverse effect upon, the Series 1994A Bonds.
22
UNDERWRITING
The Series 1994A Bonds are being purchased by the Underwriters from the
City at an aggregate purchase price of $ (the face amount of the
Series 1994A Bonds less underwriter's discount [and original issue discount on
certain of the series 1994A Bonds]), plus accrued interest on the Series 1994A
Bonds. The Underwriters are jointly and severally obligated to purchase all the
Series 1994A Bonds if any are purchased. Following the initial public offering,
the public offering prices may be changed from time to time by the Underwriters.
The Series 1994A Bonds may be offered and sold to certain dealers
(including underwriters and other dealers depositing such Bonds into investment
trusts) and others at prices lower than the public offering prices set forth on
the cover page of this official Statement.
ENFORCEABILITY OF REMEDIES
The remedies available to the owners of the Series 1994A Bonds under the
Ordinance (and the policy of municipal bond insurance referred to herein, if any)
are in many respects dependent upon judicial actions which are often subject to
discretion and delay. Under existing constitutional and statutory law and
judicial decisions, including specifically Title 11 of the United States Code,
the remedies specified by the Federal Bankruptcy Code, the Ordinance and any
policy of municipal bond insurance referred to herein may not be readily
available or may be limited. The various legal opinions to be delivered
concurrently with the delivery of the Series 1994A Bonds (including Bond
Counsel's approving opinion) 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 or by such
principles of equity as the court having jurisdiction may impose with respect to
certain remedies which require or may require enforcement by a court of equity.
LITIGATION
There is no Litigation or controversy of any nature now pending or
threatened (i) to restrain or enjoin the issuance, sale, execution or delivery
of the Series 1994A Bonds or (ii) in any way questioning or affecting the
validity of the Series 1994A Bonds, the Ordinance, any proceedings of the City
taken with respect to the authorization, sale or issuance of the Series 1994A
Bonds or the pledge or application of any moneys provided for the payment of the
Series 1994A Bonds, including the Net Revenues of the System.
The City is a party from time to time in various law suits involving the
City generally, and believes that none of the actions currently pending will have
a material effect upon the finances of the City or of the System.
GENERAL PURPOSE FINANCIAL STATEMENTS
The excerpts from the General Purpose Financial Statements and other
information of the City for the fiscal year ended September 30, 1993, are
included in Appendix B to this official Statement. Such excerpts from the City's
Comprehensive Annual Financial Report, including the auditor's report thereon,
have been included in this Official Statement as public documents and consent
from the auditors was not requested. The auditors have not performed any
services relating to, and are therefore not associated with, the issuance of the
Series 1994A Bonds.
FINANCIAL ADVISOR
The City has retained Raymond James & Associates, Inc,, St, Petersburg,
Florida, as financial advisor (the "Financial Advisor ") to the City in connection
with the preparation of the City's plan of financing and with respect to the
23
authorization and issuance of the Series 1994A Bonds. Although the Financial
Advisor assisted in the preparation of this Official Statement, the Financial
Advisor 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.
MISCELLANEOUS
All information included herein has been provided by the City, except where
attributed to other sources. The summaries of and references to all documents,
statutes, reports and other instruments referred to herein do not purport to be
complete, comprehensive or definitive, and each such reference or summary is
qualified in its entirety by reference to each such document, statute, report or
other instrument. Copies of all such documents referred to herein are on file
with the City Clerk of the City at 112 South Osceola Avenue, Clearwater, Florida
34616. The information herein has been compiled from official and other sources
and, while not guaranteed by the City, is believed to be correct. As far as any
statements made in this official Statement and the appendices attached hereto
involve matters of opinion or of estimates, whether or not expressly stated, they
are set forth as such and not as representations of fact and no representation
is made that any of the estimates will be realized.
AUTHORIZATION OF AND CERTIFICATION
CONCERNING OFFICIAL STATEMENT
The delivery of this Official Statement has been authorized by the City
Commission. Concurrently with the delivery of the Series 1994A Bonds, the
undersigned will furnish their certificate to the effect that, to the best of
their knowledge, this Official Statement did not as of its date, and does not as
of the date of delivery of the Series 1994A Bonds, contain any untrue statement
of a material fact or omit to state a material fact which should be included
therein for the purpose for which this Official Statement is to be used, or which
is necessary in order to make the statements contained therein, in the light of
the circumstances in which they were made, not misleading.
J:lBONDSk4O5l�PGSA217 /28/94 G @D!R
24
CITY OF CLEARWATER, FLORIDA
By:
Mayor - Commissioner
By:
City Manager