19-37RESOLUTION NO. 19-37
A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO EXCEED
$25,000,000 CITY OF CLEARWATER, FLORIDA, WATER AND SEWER
REVENUE REFUNDING BONDS, SERIES 2020; AWARDING THE SALE
THEREOF TO RAYMOND JAMES & ASSOCIATES, INC., SUBJECT TO THE
TERMS AND CONDITIONS OF A PURCHASE CONTRACT; APPROVING THE
FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
PURCHASE CONTRACT; PROVIDING FOR THE ISSUANCE OF THE SERIES
2020 BONDS IN BOOK -ENTRY -ONLY FORM; AUTHORIZING THE
DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND AN
OFFICIAL STATEMENT IN CONNECTION WITH THE DELIVERY OF THE
BONDS; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE
AGREEMENT; APPOINTING A PAYING AGENT AND REGISTRAR;
APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND
DELIVERY OF A PAYING AGENT AND REGISTRAR AGREEMENT;
PROVIDING CERTAIN OTHER MATTERS IN CONNECTION WITH THE
ISSUANCE AND DELIVERY OF SUCH BONDS; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on August 2, 1984, the City Council of the City of Clearwater, Florida (the
"City") enacted Ordinance No. 3674-84 (the "1984 Ordinance") to provide for the issuance of
bonds payable from Net Revenues of the System (as defined therein); and
WHEREAS, on November 15, 2001, the City enacted Ordinance No. 6915-01 (the "2001
Ordinance" and, together with the 1984 Ordinance, the "Original Ordinance") which authorized
the issuance of the City of Clearwater, Florida Water and Sewer Revenue [Refunding] Bonds,
Series [to be determined], as Additional Bonds thereunder, which Original Ordinance was further
amended by Ordinance No. 8620-14 enacted on December 4, 2014, and upon issuance of the
City of its Water and Sewer Revenue Refunding Bonds, Series 2017B, became effective as of its
date of enactment (collectively with the Original Ordinance, the "Bond Ordinance"); and
WHEREAS, the City by this Resolution intends to provide for the issuance of its not to
exceed $25,000,000 City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds,
Series 2020 (the "Series 2020 Bonds") as Additional Bonds to refund all of the City's outstanding
Water and Sewer Revenue Refunding Bond, Series 2014 (the "Refunded Bond"); and
WHEREAS, other than the RefNded Bond, the City has currently outstanding under the
Bond Ordinance, its Water and Sewer Revenue Refunding Bonds, Series 2011, Water and Sewer
Revenue Refunding Bonds, Series 2017, and Water and Sewer Revenue Refunding Bond, Series
2017B (collectively, the "Parity Bonds"); and
WHEREAS, it is in the best interest of the City to provide for the negotiated sale of not to
exceed $25,000,000 of Series 2020 Bonds; and
WHEREAS, the City intends to negotiate a sale of the Series 2020 Bonds with Raymond
James & Associates, Inc., (the "Underwriter") subject to the terms and conditions contained herein
and set forth in a Purchase Contract, a copy of which is attached hereto as Exhibit A (the
"Purchase Contract") and authorize its Mayor, or in his absence the Vice Mayor, and the City
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Resolution No. 19-37
Manager or Assistant City Manager to execute such Purchase Contract upon the approval of the
terms thereof by the City Manager or Assistant City Manager and the City Finance Director; and
WHEREAS, the City now desires to approve the issuance of its Series 2020 Bonds, to sell
its Series 2020 Bonds pursuant to the Purchase Contract, to authorize the distribution of a
Preliminary Official Statement and an Official Statement in connection with the issuance of the
Series 2020 Bonds and to take certain other actions in connection with the issuance and sale of
the Series 2020 Bonds; and
WHEREAS, the City desires to appoint U.S. Bank National Association as the Paying
Agent and Registrar under the Bond Ordinance with respect to the Series 2020 Bonds and to
enter into a Paying Agent and Registrar Agreement in the form attached hereto as Exhibit B; and
WHEREAS, the City will be provided all applicable disclosure information by the
Underwriter as required by Section 218.385, Florida Statutes, prior to the execution of the
Purchase Contract, a copy of which disclosure is to be attached to the Purchase Contract; and
WHEREAS, this Resolution shall constitute a supplemental resolution under the terms of
the Bond Ordinance, and all capitalized undefined terms used herein shall have the meanings set
forth in the Bond Ordinance;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CLEARWATER, FLORIDA:
SECTION 1. The not to exceed $25,000,000 of the Water and Sewer Revenue Refunding
Bonds, Series [to be determined] authorized by the Bond Ordinance being offered pursuant to
this resolution are hereby designated as Series 2020 Bonds (the "Series 2020 Bonds"), provided
that the series designation shall reflect the year in which the Series 2020 Bonds are actually
issued. The issuance of not to exceed $25,000,000 of the Series 2020 Bonds by the City in one
or more subseries is hereby approved upon the terms and conditions set forth in the Bond
Ordinance and this Resolution.
SECTION 2. It is in the best interest of the City and the residents and inhabitants thereof
that the Series 2020 Bonds be issued utilizing a pure book -entry system of registration. For so
long as the Series 2020 Bonds remain in such book entry only system of registration, in the event
of a conflict between the provisions of the Bond Ordinance and the provisions of the Blanket Letter
of Representations between the City and Depository Trust Company as previously executed and
delivered, the terms and provisions of the Blanket Letter of Representations shall prevail.
SECTION 3. (a) Due to the willingness of the Underwriter to purchase not to exceed
$25,000,000 in aggregate principal amount of the Series 2020 Bonds at favorable interest costs
and the importance of timing in the marketing of such obligations, it is hereby determined that it
is in the best interest of the public and the City to sell the Series 2020 Bonds at a negotiated sale
and such sale to the Underwriter pursuant to the terms and conditions contained in the Purchase
Contract and herein is hereby authorized and approved, subject to the satisfaction of the
conditions set forth in Section 3(b) below.
(b) The Finance Director is hereby authorized to receive the offer to purchase the Series
2020 Bonds from the Underwriter in the form of an executed Purchase Contract substantially in
the form approved herein. The City Manager or Assistant City Manager and the Finance Director
are hereby authorized to award the sale of the Series 2020 Bonds on their determination that the
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Resolution No. 19-37
offer submitted by the Underwriter for the purchase of all of the Series 2020 Bond is within the
following parameters: (i) the refunding of that portion of the Refunded Bond to be refunded by
the Series 2020 Bonds shall provide the City with a net present value savings of not Tess than
5.0% of the par amount of such Refunded Bond so refunded, (ii) the Underwriter' Discount shall
not be in excess of 0.40% of the principal amount thereof, (iii) the final maturity shall not be later
than December 1, 2032, and (iv) the principal amount shall not be in excess of the amount
necessary to redeem the Refunded Bond plus costs of issuing the Series 2020 Bonds. The City
Manager or Assistant City Manager and the Finance Director are hereby authorized to award the
sale of the Series 2020 Bonds as set forth above or to reject the offer from the Underwriter for
any or all series of Series 2020 Bonds or any portion thereof. Such award shall be final. The
acceptance of the offer to purchase the Series 2020 Bonds, to the extent the proceeds thereof
are used to refund the Refunded Bond shall constitute a decision to refund the Refunded Bond in
accordance with the Bond Ordinance.
SECTION 4. The Series 2020 Bonds shall be sold to the Underwriter, upon the terms and
conditions set forth in the Purchase Contract attached hereto as Exhibit A and incorporated by
reference, upon the satisfaction of the conditions set forth in Section 3(b) hereof. The Mayor, or
in his absence the Vice Mayor, the City Manager or Assistant City Manager and the City Clerk
are hereby authorized to execute such Purchase Contract in substantially the form attached as
Exhibit A upon the approval of the City Attorney as to form and legal sufficiency, with such
additional changes, insertions and omissions therein as do not change the substance thereof and
as may be approved by the said officers of the City executing the same, such execution to be
conclusive evidence of such approval.
SECTION 5. The Series 2020 Bonds shall be dated, shall bear interest at a rate or rates
not exceeding the maximum rate permitted by law, payable at the times, shall mature and shall
be subject to redemption as provided in the Purchase Contract. In addition to such redemption
provisions, any notice of redemption of Series 2020 Bonds may be conditioned upon the deposit
of sufficient funds to pay the 2019 Bonds subject to redemption on the redemption date. The use
of the proceeds of the Series 2020 Bonds, shall be as provided in the Official Statement relating
to the Series 2020 Bonds.
SECTION 6. The Series 2020 Bonds shall be issued under and secured by the Bond
Ordinance and shall be executed and delivered by the Mayor, the City Manager or Assistant City
Manager and the City Clerk upon the approval of the City Attorney as to form and legal sufficiency,
in substantially the form set forth in the Bond Ordinance, with such additional changes and
insertions therein as conform to the provisions of the Purchase Contract and such execution and
delivery shall be conclusive evidence of the approval thereof by such officers.
SECTION 7. U.S. Bank National Association is hereby appointed Registrar and Paying
Agent for the Series 2020 Bonds to serve pursuant to a Paying Agent And Registrar Agreement
substantially in the form attached hereto as Exhibit B. The Mayor, or in his absence the Vice
Mayor, the City Manager or Assistant City Manager and the City Clerk are hereby authorized to
execute such Paying Agent And Registrar Agreement in substantially the form attached as Exhibit
B upon the approval of the City Attorney as to form and legal sufficiency, with such additional
changes and insertions therein as approved by the officers executing the same, and such
execution and delivery shall be conclusive evidence of the approval thereof by such officers.
SECTION 8. On the date of issuance of the Series 2020 Bonds, the City may transfer the
funds on hand in the various funds and accounts established for the Refunded Bond in such
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Resolution No. 19-37
manner as may be approved by a certificate of the Finance Director executed prior to or
simultaneously with the issuance of the Series 2020 Bonds.
SECTION 9. The distribution by the Underwriter of the Preliminary Official Statement is
hereby approved, confirmed and ratified. The distribution of a final Official Statement of the City
relating to the issuance of the Series 2020 Bonds is hereby approved, such final Official Statement
to be in substantially the form attached hereto as Exhibit C, with such additional changes,
insertions and omissions as may be made and approved by officers of the City executing the
same, such execution to be conclusive evidence of any such approval. The Mayor, or in his
absence the Vice Mayor, and the City Manager or Assistant City Manager are hereby authorized
to execute such Official Statement in substantially the form attached hereto as Exhibit C. The
execution of such Official Statement by such officers is hereby approved with such additional
changes, insertions and omissions as may be made and approved by such officers. For purposes
of Rule 15c2-12 of the United States Securities and Exchange Commission (the "Rule"), the City
Manager or Assistant City Manager and the Finance Director are hereby authorized and directed
to deem "final" the Preliminary Official Statement in substantially the form attached hereto as
Exhibit C.
SECTION 10. The City hereby covenants and agrees that, in order to provide for
compliance by the City with the secondary market disclosure requirements of the Rule, that it will
comply with and carry out all of the provisions of that certain Continuing Disclosure Agreement in
substantially the form attached hereto as Exhibit D, to be executed by the City and dated the date
of issuance and delivery of the Series 2020 Bonds, as it may be amended from time to time in
accordance with the terms thereof (the "Continuing Disclosure Agreement"). Notwithstanding any
other provision of this Resolution, failure of the City to comply with such Continuing Disclosure
Agreement shall not be considered an event of default; however, any holder of Series 2020 Bonds
may take such actions as may be necessary and appropriate, including seeking mandate or
specific performance by court order, to cause the City to comply with its obligations under this
Section and the Continuing Disclosure Agreement. The Mayor, or in his absence the Vice Mayor,
the City Manager or Assistant City Manager and the City Clerk are hereby authorized to execute
such Continuing Disclosure Agreement upon the approval of the City Attorney as to form and
legal sufficiency, in substantially the form attached as Exhibit D, with such additional changes,
insertions and omissions therein as do not change the substance thereof and as may be approved
by the said officers of the City executing the same, such execution to be conclusive evidence of
such approval.
SECTION 11. All prior resolutions of the City inconsistent with the provisions of this
resolution are hereby modified, supplemented and amended to conform with the provisions herein
contained and except as otherwise modified, supplemented and amended hereby shall remain in
full force and effect.
SECTION 12. The Mayor, or in his absence the Vice Mayor, the City Manager, the
Assistant City Manager, the Finance Director, the City Attorney and the City Clerk or any other
appropriate officers of the City are hereby authorized and directed to execute any and all
certifications or other instruments or documents required by the Resolution, the Purchase
Contract, Agreement Relating To Paying And Registrar Agency, or any other document referred
to above as a prerequisite or precondition to the issuance of the Series 2020 Bonds and any such
representation made therein shall be deemed to be made on behalf of the City, and the City
Manager or Assistant City Manager and the Finance Director are hereby authorized to take such
actions as may be necessary or desired to effect the refunding of the Refunded Bond. In the
event both the Mayor and the Vice Mayor are unable to execute the documents related to the
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Resolution No. 19-37
Series 2020 Bonds, then any other member of the City Council shall be authorized to execute
such documents with the full force and effect as if the Mayor, or the Vice Mayor had executed
same. All action taken to date by the officers of the City in furtherance of the issuance of the
Series 2020 Bonds is hereby approved, confirmed and ratified.
SECTION 13. For purposes hereof, the Reserve Requirement (as defined in the Bond
Ordinance) for the Series 2020 Bonds shall be $0.00, and the Series 2020 Bonds shall not be
entitled to any security provided by any monies on deposit in the Reserve Account.
SECTION 14. This resolution shall become effective immediately upon its adoption.
moA
Passed and adopted by the City Council of the City of Clearwater, Florida, this VT_ day of
December, 2019.
Approved as to form: Attest:
Pamela K. Akin
City Attorney
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CITY OF CLEARWATER, FLORIDA
By:
"C(,eert(t\cr tkttOr
George N. Cretekos
Mayor
t. --C
Rosemarie Call,
City Clerk
Resolution No. 19-37
EXHIBIT A
FORM OF PURCHASE CONTRACT
Resolution No. 19-37
BOND PURCHASE AGREEMENT
January _, 2020
City of Clearwater, Florida
100 South Myrtle Avenue, 3rd Floor
Clearwater, Florida 33756
Re: $[ ] City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds,
Series 2020 (the "Series 2020 Bonds")
Ladies and Gentlemen:
Raymond James & Associates, Inc. (the "Underwriter") offers to enter into this Bond
Purchase Agreement (the "Purchase Contract") with the City of Clearwater, Florida (the "Issuer"),
which, upon the Issuer's acceptance hereof, will be binding upon the Issuer and upon the
Underwriter. This offer is made subject to the Issuer's acceptance by execution of this Purchase
Contract and its delivery to the Underwriter on or before 6:00 P.M., Clearwater, Florida time, on
the date hereof. Terms not otherwise defined herein shall have the same meanings ascribed to
them in the Bond Ordinance and the Official Statement as each is described below.
1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance
upon the representations, warranties and covenants set forth herein, the Underwriter hereby agrees
to purchase from the Issuer for offering to the public, and the Issuer hereby agrees to sell to the
Underwriter for such purpose, all (but not less than all) of the aggregate principal amount of the
$[ ] City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2020
(the "Series 2020 Bonds"). If any of the Series 2020 Bonds are purchased pursuant to this Purchase
Contract, the Underwriter is obligated to purchase all of the Series 2020 Bonds. The aggregate
purchase price of the Series 2020 Bonds (the "Purchase Price") shall be $[ ] (calculated as
$[ ] principal amount of the Series 2020 Bonds, [plus][less] an original issue
[premium][discount] of $[ ], less an Underwriter's discount of $[ ]). The Purchase
Price shall be payable to the Issuer on the Closing Date (as such term is hereinafter defined), by
wire transfer of federal funds as provided in Section 8 below.
2. Description and Purpose of the Bonds. The Series 2020 Bonds shall be issued
pursuant to the Constitution and the laws of the State of Florida, including particularly the charter
of the City, Chapter 166, Part II, Florida Statutes, as amended, and other provisions of law, and
Ordinance No. 3674-84 enacted by the City on August 2, 1984, as amended and supplemented by
Ordinance No. 6915-01, enacted November 15, 2001, as further amended and supplemented by
Ordinance No. 8620-14, enacted on December 4, 2014 (collectively, the "Bond Ordinance"), and as
4835-6435-8058 v.5
further supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the
"Resolution).
The Series 2020 Bonds are being issued to provide funds, together with other legally
available funds, to (i) refund all of the City's Outstanding Water and Sewer Revenue Refunding
Bond, Series 2014 (the "Refunded Bond"), and (ii) pay costs of issuing the Series 2020 Bonds.
The Series 2020 Bonds are special limited obligations of the Issuer, secured and payable
solely by a pledge of and lien on the Net Revenues of the System (as defined in the Bond
Ordinance) in amounts sufficient to pay the principal of and interest on the Series 2020 Bonds, all
in the manner and to the extent provided in the Bond Ordinance and the Resolution. The Series
2020 Bonds shall mature, bear interest and be subject to redemption as set forth in Exhibit A
attached hereto, and have all such other terms and provisions, as set forth in the Bond Ordinance
and as described in the Official Statement (as hereinafter defined). The information required by
Section 218.385(6), Florida Statutes, to be provided by the Underwriter is set forth in Exhibit B
attached hereto. Further, in order to assist the Issuer in complying with Section 218.385(2) and
(3), Florida Statutes, the Underwriter is providing the Issuer with a completed truth -in -bonding
statement as set forth in Exhibit B. The Issuer, by its acceptance hereof, accepts such disclosure
and agrees that it does not require any further disclosure from the Underwriter prior to the delivery
of the Series 2020 Bonds with regard to the matters set forth in Section 218.385, Florida Statutes.
3. Good Faith Deposit. Upon execution of this Purchase Contract, the Underwriter
shall deliver to the Issuer a check in the amount of $[ 1 ([ 1) (the "Good Faith Deposit"),
as security for the performance by the Underwriter of its obligation to accept and pay for the
Series 2020 Bonds on the Closing Date in accordance with the provisions of this Purchase
Contract. In the event the Issuer does not accept this offer, such check shall be immediately
returned to the Underwriter. If the offer made hereby is accepted, the Issuer agrees to hold the
check uncashed until the Closing (as such term is hereinafter defined), as security for the
performance by the Underwriter of its obligation to accept and pay for the Series 2020 Bonds,
and in the event of its compliance with such obligations, such check shall be returned to the
Underwriter at the Closing. In the event of failure by the Issuer to deliver the Series 2020 Bonds
at the Closing, or if the Issuer shall be unable to satisfy the conditions of the Closing contained
herein, or if the obligations of the Underwriter shall be terminated for any reason permitted by
this Purchase Contract, such check shall be immediately returned to the Underwriter and such
return shall constitute a full release and discharge of any claims the Underwriter may have against
the Issuer arising out of the transactions contemplated hereby. In the event that the Underwriter
fails (other than for a reason permitted hereunder) to accept and pay for the Series 2020 Bonds at
the Closing as herein provided, such check shall be retained and cashed by the Issuer as and for
full liquidated damages for such failure and for any defaults hereunder on the part of the
Underwriter, and the Issuer's collection and retention of such check shall constitute a full release
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and discharge of all claims by the Issuer against the Underwriter arising out of the transactions
contemplated hereby.
4. Delivery of Official Statement and Other Documents.
(a) Prior to the date hereof, the Issuer has prepared for use in connection with
the public offering, sale and distribution of the Series 2020 Bonds, and has provided to the
Underwriter for its review, the Preliminary Official Statement dated December [ 1, 2019
(including the cover page, inside cover pages and appendices thereto, the "Preliminary Official
Statement"). The Issuer hereby represents and warrants that the Preliminary Official Statement
was deemed final by the Issuer as of its date, except for the omission of such information which is
dependent upon the final pricing of the Series 2020 Bonds for completion, all as permitted to be
excluded by Section (b)(1) of Rule 15c2-12 under the Securities and Exchange Act of 1934, as
amended (the "Rule"). Such Preliminary Official Statement, as amended to delete preliminary
language and reflect the final terms of the Series 2020 Bonds together with such supplements and
amendments as approved by the Issuer and agreed to by the Underwriter, is herein referred to as
the "Official Statement." If the Issuer makes any changes to the Official Statement that are not
also approved by the Underwriter, and if such changes result in the Official Statement omitting
material information or containing information that is materially misleading, then the Underwriter
may, in its discretion, terminate this Purchase Contract.
(b) The Issuer shall deliver, or cause to be delivered, at its expense, to the
Underwriter, within seven (7) business days after the date hereof or within such shorter period as
may be reasonably requested by the Underwriter, and in no event later than required to enable the
Underwriter to comply with its responsibilities under applicable rules of the Municipal Securities
Rulemaking Board ("MSRB"): (i) sufficient copies of the Official Statement to enable the
Underwriter to fulfill its obligations pursuant to the securities laws of the State of Florida and the
United States, in form and substance satisfactory to the Underwriter, and (ii) an executed original
counterpart or certified copy of the Official Statement at Closing. In determining whether the
number of copies to be delivered by the Issuer are reasonably necessary, at a minimum, the number
shall be sufficient to enable the Underwriter to comply with the requirements of the Rule, all
applicable rules of the MSRB, and to fulfill its duties and responsibilities under Florida and federal
securities laws generally.
(c) The Underwriter agrees to file the Official Statement with the Electronic
Municipal Market Access system ("EMMA") (accompanied by a completed Form G-32) by the
date of Closing. The filing of the Official Statement with EMMA shall be in accordance with the
terms and conditions applicable to EMMA.
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(d) From the date hereof until the earlier of (i) ninety days from the "end of the
underwriting period" (as defined in the Rule), or (ii) the time when the Official Statement is
available to any person from the MSRB (but in no case less than twenty-five (25) days following
the end of the underwriting period), if any event occurs or a condition or circumstance exists which
may make it necessary to amend or supplement the Official Statement so that it will not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
the Issuer shall promptly notify the Underwriter (and for the purposes of this clause provide the
Underwriter with such information as they may from time to time request) and if, in the reasonable
opinion of the Issuer or the reasonable opinion of the Underwriter, such event requires the
preparation and publication of an amendment or supplement to the Official Statement, the Issuer,
at its expense, promptly will prepare an appropriate amendment or supplement thereto, in a form
and in a manner reasonably approved by the Underwriter (and file, or cause to be filed, the same
with the MSRB, and mail such amendment or supplement to each record owner of the Series 2020
Bonds) so that the statements in the Official Statement, as so amended or supplemented, will not
contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading.
The Issuer will promptly notify the Underwriter of the occurrence of any event of which it has
knowledge or the discovery of such conditions or circumstance, which, in its reasonable opinion,
is an event described in the preceding sentence. If such notification shall be subsequent to the
Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other documents
as the Underwriter may deem necessary to evidence the truth and accuracy of such supplement or
amendment to the Official Statement. Unless the Issuer is otherwise notified by the Underwriter
in writing prior to the Closing Date, the end of the underwriting period will be deemed to be the
Closing Date.
(e) (i) The Underwriter agrees to make a bona fide public offering of
substantially all of the Series 2020 Bonds to the public at initial public offering prices not
greater than (or yields not Less than) the initial public offering prices (or yields) set forth in
Exhibit A hereto; provided, however, that the Underwriter reserves the right to make
concessions to certain dealers, certain dealer banks and banks acting as agents and to
change such initial public offering prices as the Underwriter shall deem necessary in
connection with the marketing of the Series 2020 Bonds.
(ii) The Underwriter agrees to assist the Issuer in establishing the issue
price of the Series 2020 Bonds and shall execute and deliver to the Issuer at Closing an
"issue price" or similar certificate substantially in the form attached hereto as Exhibit C,
together with the supporting pricing wires or equivalent communications, with
modifications to such certificate as may be deemed appropriate or necessary, in the
reasonable judgment of the Underwriter, the Issuer and Bryant Miller Olive P.A. as bond
4
counsel (the "Bond Counsel"), to accurately reflect, as applicable, the sales price or prices
or the initial offering price or prices to the public of the Series 2020 Bonds.
(iii) Except as set forth in Exhibit A attached hereto, the Issuer will treat
the first price at which 10% of each maturity of the Series 2020 Bonds (the "10% test") is
sold to the public as the issue price of that maturity. At or promptly after the execution of
this Purchase Contract, the Underwriter shall report to the Issuer the price or prices at which
the Underwriter has sold to the public each maturity of the Series 2020 Bonds. If at that
time the 10% test has not been satisfied as to any maturity of the Series 2020 Bonds, the
Underwriter agrees to promptly report to the Issuer the prices at which the Series 2020
Bonds of that maturity have been sold by the Underwriter to the public. That reporting
obligation shall continue, whether or not the Closing Date has occurred, until the 10% test
has been satisfied as to the Series 2020 Bonds of that maturity or until all Series 2020
Bonds of that maturity have been sold to the public, provided that, the Underwriter's
reporting obligation after the Closing Date may be at reasonable periodic intervals or
otherwise upon request of the Issuer or Bond Counsel. For purposes of this Section, if
Series 2020 Bonds mature on the same date but have different interest rates, each separate
CUSIP number within that maturity will be treated as a separate maturity of the Series 2020
Bonds.
(iv) The Underwriter confirms that the Underwriter has offered the
Series 2020 Bonds to the public on or before the date of this Purchase Contract at the
offering price or prices (the "initial offering price"), or at the corresponding yield or yields,
set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also
sets forth, as of the date of this Purchase Contract, the maturities, if any, of the Series 2020
Bonds for which the 10% test has not been satisfied and for which the Issuer and the
Underwriter agree that the restrictions set forth in the next sentence shall apply, which will
allow the Issuer to treat the initial offering price to the public of each such maturity as of
the sale date as the issue price of each such maturity as of the sale date as the issue price
of that maturity (the "hold -the -offering -price rule"). So long as the hold -the -offering -price
rule remains applicable to any maturity of the Series 2020 Bonds, the Underwriter will
neither offer nor sell unsold Series 2020 Bonds of that maturity to any person at a price
that is higher than the initial offering price to the public during the period starting on the
sale date and ending on the earlier of the following: (1) the close of the fifth (5th) business
day after the sale date; or (2) the date on which the Underwriters have sold at least 10% of
that maturity of the Series 2020 Bonds to the public at a price that is no higher than the
initial offering price to the public.
The Underwriter will advise the Issuer promptly after the close of the fifth (5th)
business day after the sale date whether it has sold 10% of that maturity of the Series 2020
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Bonds to the public at a price that is no higher than the initial offering price to the public.
The Issuer acknowledges that, in making the representation set forth in this
subsection, the Underwriter will rely on (i) the agreement of each Underwriter to comply
with the hold -the -offering -price rule, as set forth in an agreement among underwriters and
the related pricing wires, (ii) in the event a selling group has been created in connection
with the initial sale of the Series 2020 Bonds to the public, the agreement of each dealer
who is a member of the selling group to comply with the hold -the -offering -price rule, as
set forth in a selling group agreement and the related pricing wires, and (iii) in the event
that an Underwriter is a party to a retail distribution agreement that was employed in
connection with the initial sale of the Series 2020 Bonds to the public, the agreement of
each broker-dealer that is a party to such agreement to comply with the hold -the -offering -
price rule, as set forth in the retail distribution agreement and the related pricing wires.
Subject to compliance with the provisions of subsection (v) below, the Issuer further
acknowledges that each Underwriter shall be solely liable for its failure to comply with its
agreement regarding the hold -the -offering -price rule and that no Underwriter shall be liable
for the failure of any other Underwriter, or of any dealer who .is a member of a selling
group, or of any broker-dealer that is a party to a retail distribution agreement, to comply
with its corresponding agreement regarding the hold -the -offering -price rule as applicable
to the Series 2020 Bonds.
(v) The Underwriter confirms that:
(1) any agreement among underwriters, any selling group agreement
and each retail distribution agreement (to which the Underwriter is a party) relating to the
initial sale of the Series 2020 Bonds to the public, together with the related pricing wires,
contains or will contain language obligating each Underwriter, each dealer who is a
member of the selling group, and each broker-dealer that is a party to such retail distribution
agreement, as applicable, to (A) report the prices at which it sells to the public the unsold
Series 2020 Bonds of each maturity allotted to it until it is notified by the Underwriter that
either the 10% test has been satisfied as to the Series 2020 Bonds of that maturity or all
Series 2020 Bonds of that maturity have been sold to the public, and (B) comply with the
hold -the -offering -price rule, if applicable, in each case if and for so long as directed by the
Underwriter and as set forth in the related pricing wires, and
(2) any agreement among underwriters relating to the initial sale of the
Series 2020 Bonds to the public (as such term is defined below), together with the related
pricing wires, contains or will contain language obligating each Underwriter that is a party
to a retail distribution agreement to be employed in connection with the initial sale of the
Series 2020 Bonds to the public to require each broker-dealer that is a party to such retail
distribution agreement to (A) report the prices at which it sells to the public the unsold
6
Series 2020 Bonds of each maturity allotted to it until it is notified by the Underwriter or
the Underwriter that either the 10% test has been satisfied as to the Series 2020 Bonds of
that maturity or all Series 2020 Bonds of that maturity have been sold to the public, and
(B) comply with the hold -the -offering -price rule, if applicable, in each case if and for so
long as directed by the Underwriter or the Underwriter and as set forth in the related pricing
wires.
(vi) The Underwriter acknowledges that sales of any Series 2020 Bonds
to any person that is a related party to the Underwriter shall not constitute sales to the
public for purposes of this section. Further, for purposes of this section:
(1) "public" means any person other than an underwriter or a
related party;
(2) "underwriter" means (A) any person that agrees pursuant to
a written contract with the Issuer (or with the lead underwriter to form an
underwriting syndicate) to participate in the initial sale of the Series 2020 Bonds
to the public and (B) any person that agrees pursuant to a written contract directly
or indirectly with a person described in clause (A) to participate in the initial sale
of the Series 2020 Bonds to the public (including a member of a selling group or a
party to a third -party distribution agreement participating in the initial sale of the
Series 2020 Bonds to the public);
(3) a purchaser of any of the Series 2020 Bonds is a "related
party" to an underwriter if the underwriter and the purchaser are subject, directly
or indirectly, to (A) more than 50% common ownership of the voting power or the
total value of their stock, if both entities are corporations (including direct
ownership by one corporation of another), (B) more than 50% common ownership
of their capital interests or profits interests, if both entities are partnerships
(including direct ownership by one partnership of another), or (C) more than 50%
common ownership of the value of the outstanding stock of the corporation or the
capital interests or profit interests of the partnership, as applicable, if one entity is
a corporation and the other entity is a partnership (including direct ownership of
the applicable stock or interests by one entity of the other), and
(4) "sale date" means the date of execution of this Purchase
Contract by all parties.
(f) The Issuer hereby authorizes the Underwriter to use the forms or copies of
the Bond Ordinance, the Resolution, the Continuing Disclosure Agreement related to the Series
7
2020 Bonds (the "Continuing Disclosure Agreement") and the Official Statement and the
information contained therein in connection with the public offering and sale of the Series 2020
Bonds and ratifies and confirms its authorization of the distribution and use by the Underwriter
prior to the date hereof of the Preliminary Official Statement in connection with such public
offering and sale. The Underwriter agrees that it will not confirm the sale of any Series 2020 Bonds
unless the confirmation of sale requesting payment is accompanied or preceded by the delivery of
a copy of the Official Statement. The Issuer hereby confirms that it does not object to the
distribution of the Official Statement in electronic form. The Underwriter shall notify the Issuer of
the occurrence of the "end of the underwriting period", as such term is defined in the Rule, and of
the passage of the date after which the Underwriter no longer remains obligated to deliver Official
Statements pursuant to paragraph (b)(4) of the Rule.
5. Representation of the Underwriter as to Authority. The Underwriter is duly
authorized to execute this Purchase Contract and has been duly authorized to act hereunder in
connection with the issuance of the Series 2020 Bonds.
6. Underwriter not Acting as Agent or Fiduciary. The Issuer acknowledges and agrees
that (i) the purchase and sale of the Series 2020 Bonds pursuant to this Purchase Contract is an
arm's-length commercial transaction between the Issuer and the Underwriter, (ii) in connection
therewith and with the discussions, undertakings and procedures leading up to the consummation
of such transaction, the Underwriter is and has been acting solely as principal and is not acting as
municipal advisor, financial advisor, agent or fiduciary to the Issuer, (iii) the Underwriter has not
assumed an advisory or fiduciary responsibility in favor of the Issuer with respect to the offering
contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective
of whether the Underwriter or any of its respective affiliates have provided other services or is
currently providing other services to the Issuer on other matters) and the Underwriter has no
obligation to the Issuer with respect to the offering contemplated hereby except the obligations
expressly set forth in this Purchase Contract, (iv) the Underwriter has financial and other interests
that differ from those of the Issuer and (v) the Issuer has consulted its own legal, financial and
other advisors to the extent it has deemed appropriate.
7. Representations, Warranties and Covenants of the Issuer. The Issuer hereby
represents and warrants to and covenants with the Underwriter that:
(a) The Issuer has reviewed the information in the Preliminary Official
Statement. Except for information which is permitted to be omitted pursuant to the Rule, the
Preliminary Official Statement (excluding the information regarding DTC and its book -entry
system of registration, as to which no representations or warranties are made), as of its date and as
of the date hereof was and is true and correct in all material respects and did not and does not
contain any untrue or misleading statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) The Official Statement (excluding the information regarding DTC and its
book -entry only system of registration, as to which no representations or warranties are made) is,
as of its date and (unless the Official Statement is amended or supplemented pursuant to paragraph
(d) of Section 4 of this Purchase Contract) at all times subsequent thereto during the period up to
and including the Closing Date will be, true and correct in all material respects and will not contain
any untrue or misleading statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading.
(c) If the Official Statement is supplemented or amended pursuant to paragraph
(d) of Section 4 of this Purchase Contract, at the time of each supplement or amendment thereto
and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times
subsequent thereto during the period up to and including the Closing Date, the Official Statement,
as so supplemented or amended, will not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The Issuer is, and will be on the Closing Date, a duly organized and validly
existing municipal corporation under the laws of the State of Florida, with the powers and authority
set forth in the Act and with full legal right, power and authority to enact the Bond Ordinance and
the Resolution, to issue, sell and deliver the Series 2020 Bonds to the Underwriter as provided
herein, to refund the Refunded Bond, to pledge the Net Revenues as provided in the Bond
Ordinance, and to execute, deliver and perform its obligations, as the case may be, under this
Purchase Contract, the Bond Ordinance, the Resolution, the Series 2020 Bonds, the Registrar and
Paying Agent Agreement, and the Continuing Disclosure Agreement (collectively, the "Issuer
Documents"), and to otherwise carry out the transactions contemplated by each of the Issuer
Documents and the Official Statement.
(e) The Issuer has duly enacted the Bond Ordinance and Resolution in
accordance with the Act, and each is in full force and effect and has not been amended, modified
or repealed. Concurrently with or prior to the acceptance hereof, the Issuer has (i) duly authorized
and approved the execution and delivery of the Series 2020 Bonds and the Issuer Documents, (ii)
duly authorized and approved the Official Statement and the distribution thereof and has deemed
the Preliminary Official Statement as of its date to be "final" for purposes of the Rule, (iii) duly
authorized and approved the sale of the Series 2020 Bonds to the Underwriter, (iv) duly authorized
the refunding of the Refunded Bond, and (v) duly authorized and approved the consummation by
the Issuer of all other transactions contemplated by the Official Statement and this Purchase
Contract. The Issuer Documents, when executed by the Issuer, and assuming the due
9
authorization and execution by the other parties thereto, if any, will each constitute the legal, valid
and binding limited obligations of the Issuer enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or other laws affecting creditors' rights and
remedies generally and to general principles of equity.
(f) As of the time of acceptance hereof and as of the Closing Date, except as
otherwise disclosed in the Official Statement, the Issuer is not and will not be in breach of or in
default under any applicable constitutional provision, law or administrative regulation of the State
of Florida or the United States relating to the Issuer or any applicable judgment or decree or any
trust agreement, loan agreement, indenture, bond, note, resolution, ordinance, certificate,
agreement or other instrument to which the Issuer is a party or to which the Issuer or its assets is
otherwise subject, and no event has occurred and is continuing which constitutes or with the
passage of time or the giving of notice, or both, would constitute a default or event of default by
the Issuer under any of the foregoing; the consequence of any of which or the correction of any
of which would materially and adversely affect the operations or financial condition of the Issuer,
or the collection or application of Net Revenues as of such dates; and, as of such times and except
as disclosed in the Official Statement, the execution and delivery of the Series 2020 Bonds, the
Issuer Documents and the enactment of the Bond Ordinance and Resolution and compliance with
the provisions on the Issuer's part contained in each such document do not and will not conflict
with or constitute a breach of or default under any applicable constitutional provision, law or
administrative regulation of the State of Florida or the United States or a breach of any applicable
judgment, decree, trust agreement, loan agreement, indenture, bond, note, resolution, ordinance,
agreement or other instrument to which the Issuer is a party or to which the Issuer or its assets is
otherwise subject, nor will such enactment, adoption, execution, delivery, authorization or
compliance result in the creation or imposition of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the property or assets of the Issuer, or under
the terms of any law, administrative regulation, ordinance, resolution or instrument, except as
expressly provided by the Bond Ordinance. The Issuer has not, as of the date hereof or as of the
Closing Date, failed to pay principal (and premium, if any) or interest when due on any of its
outstanding indebtedness.
(g) On the Closing Date, all approvals, authorizations, licenses, permits,
consents and orders of any governmental authority, legislative body, board, agency or commission
having jurisdiction of the matter which are required for the due authorization of, which would
constitute a condition precedent to, or the absence of which would materially adversely affect the
due performance by the Issuer of its obligations under the Bond Ordinance or the other Issuer
Documents will have been duly obtained.
(h) The financial statements and other financial information regarding the
Issuer, in the Official Statement fairly present the financial position and results of the Issuer,
10
including the Net Revenues as of the dates and for the periods therein set forth, and there are no
material liabilities, contingent or otherwise, of the Issuer that have not been disclosed in the
Official Statement. Between the date of the Official Statement and the Closing, there will be no
adverse change of a material nature in such financial position, results of operations or condition,
financial or otherwise, of the Issuer, including the Net Revenues. The Issuer is not a party to any
litigation or other proceedings pending or, to its knowledge, threatened which, if decided adversely
to the Issuer, would have a materially adverse effect on the financial condition of the Issuer.
(i) Except as described in the Official Statement, there is no legislation, action,
suit, proceeding, inquiry, or investigation at law or in equity before or by any court, government
agency, public board or body pending or, to the best knowledge of the Issuer, after having made
due inquiry with respect thereto, threatened against the Issuer, affecting the existence of the Issuer
or the titles of its members and officers to their respective offices, or affecting or seeking to
prohibit, restrain or enjoin the sale, issuance or delivery of the Series 2020 Bonds or the collection
and receipt of any of the Net Revenues or in any way contesting or affecting the validity or
enforceability of the Series 2020 Bonds, the Issuer Documents or any other material agreement or
instrument to which the Issuer is a party and which is used or contemplated for use in the
consummation of the transactions contemplated hereby or by the Official Statement or contesting
in any way the completeness or accuracy of the Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any
authority for the issuance of the Series 2020 Bonds, the enactment of the Bond Ordinance, the
adoption of the Resolution or the execution and delivery of the Issuer Documents, nor, to the best
knowledge of the Issuer, is there any basis therefor wherein an unfavorable decision, ruling or
finding could materially adversely affect the validity or enforceability of the Series 2020 Bonds,
the Bond Ordinance, the Resolution, the other Issuer Documents or any of them. The Issuer shall
advise the Underwriter promptly of the institution of any proceedings known to it by any
governmental agency prohibiting or otherwise affecting the use of the Preliminary Official
Statement or the Official Statement in connection with the offering, sale or distribution of the
Series 2020 Bonds.
(j) Between the date of this Purchase Contract and the Closing Date, the Issuer
will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or
other obligations for borrowed money or incur any material liabilities, direct or contingent, payable
from or secured by any of the revenues or assets which will secure or otherwise support the
payment of the Series 2020 Bonds.
(k) The Issuer has complied, and at the Closing will be in compliance, in all
respects, with the terms of the Act and with the obligations on its part in connection with the
issuance of the Series 2020 Bonds and contained in the Issuer Documents.
11
(1) When delivered to and paid for by the Underwriter at the Closing in
accordance with the provisions of this Purchase Contract, the Series 2020 Bonds will have been
duly authorized, executed, issued and delivered and will constitute valid and binding obligations
of the Issuer in conformity with the Act and the Bond Ordinance, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and subject to general principles of equity as to enforceability.
(m) The Issuer will not take or omit to take any action which action or omission
will in any way cause the proceeds from the sale of the Series 2020 Bonds to be applied in a manner
contrary to that provided for in the Bond Ordinance and as described in the Official Statement.
(n) Other than as described in the Official Statement, since December 31, 1975,
and at all times subsequent thereto up to and including the Closing Date, the Issuer has not been
and will not be in default with respect to payment of the principal of, or interest on, any bonds or
other debt obligations that it has issued or will issue or that it has guaranteed or will guarantee
(excluding bonds or other debt obligations for which it has served as a conduit issuer).
(o) The Issuer has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that the Issuer is a bond issuer whose arbitrage certifications
may not be relied upon.
(p) Except as disclosed in the Official Statement, within the last five (5) years,
the Issuer has not failed to comply in all material respects with any continuing disclosure
undertaking made by it pursuant to the Rule in connection with outstanding bond issues for which
the Issuer has agreed to undertake continuing disclosure obligations.
(q) No representation or warranty by the Issuer in this Purchase Contract, nor
any statement, certificate, document or exhibit furnished to or to be furnished by the Issuer
pursuant to this Purchase Contract or the Official Statement or in connection with the transactions
contemplated hereby contains, or will contain on the Closing Date, any untrue statement of
material fact or omits or will omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not misleading.
8. The Closing. At or before 1:00 p.m., New York time, on [ 1, 2020, or at
such other time or on such earlier or later business day as shall have been agreed upon by the Issuer
and the Underwriter (the "Closing" or the "Closing Date"), the Issuer shall deliver, or cause to be
delivered, subject to the terms and conditions hereof: (i) the Series 2020 Bonds, bearing proper
CUSIP numbers, to the Underwriter, in definitive form, duly executed and authenticated by the
Bond Registrar, via the FAST system as described below, and (ii) the closing documents
hereinafter mentioned. The Underwriter, subject to the terms and conditions hereof, will accept
12
k
such delivery and pay the Purchase Price as set forth in Section 1 hereof by wire transfer of federal
funds to the order of the Issuer. The Series 2020 Bonds shall bear proper CUSIP numbers and
shall be in typewritten form, with a single bond for each maturity and interest rate of the Series
2020 Bonds, each such bond to be in a principal amount equal to the principal amount thereof
maturing on each such date. The Series 2020 Bonds shall be registered in the name of Cede &
Co., as nominee of DTC, will be made available for inspection and checking by the Underwriter
not later than 3:00 P.M., New York City time, on the business day prior to the Closing Date and
will be delivered through the DTC FAST system.
9. Closing Conditions. The Underwriter is entering into this Purchase Contract in
reliance upon the representations, warranties, covenants and agreements of the Issuer contained
herein, and in reliance upon the representations, warranties, covenants and agreements to be
contained in the documents and instruments to be delivered at the Closing, and upon the
performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the
Closing Date. Accordingly, the Underwriter's obligations hereunder to purchase and pay for the
Series 2020 Bonds shall be subject to the performance by the Issuer of its obligations to be
performed hereunder and under such other documents and instruments to be delivered at or prior
to the Closing, and shall also be subject to the following additional conditions, including the
delivery by the Issuer of such documents as are enumerated herein, in form and substance
reasonably satisfactory to the Underwriter:
(a) The representations and warranties of the Issuer contained herein shall be
true, complete and correct in all material respects as of the date hereof and at the time of the
Closing, as if made at the time of the Closing, and the statements made in all certificates and other
documents delivered to the Underwriter at the Closing shall be true, complete and correct as of the
Closing Date and the Issuer shall be in compliance with each of the agreements made by it in this
Purchase Contract as of the Closing Date.
(b) At the time of the Closing (i) the Bond Ordinance and Resolution shall be
in full force and effect and shall not have been amended, modified or supplemented after the date
of this Purchase Contract except with the prior written approval of the Underwriter; (ii) the Issuer
Documents shall each have been duly executed and delivered by the Issuer and the other parties
thereto and shall not have been amended, modified or supplemented after the date of this Purchase
Contract (other than to conform to the description contained in the Official Statement) except with
the prior written approval of the Underwriter; and (iii) the Issuer shall perform or have performed
all of its obligations required under or specified in this Purchase Contract and the other Issuer
Documents to be performed at or before the Closing.
(c) The Issuer shall not be in default in the payment of principal or interest on
any of its bonds, notes, or other debt obligations.
13
(d) At the time of the Closing, there shall not have occurred any change or any
development involving a prospective change in the condition, financial or otherwise, or in Net
Revenues or operations of the Issuer, from that set forth in the Official Statement that, in the
reasonable judgment of the Underwriter, is material and adverse and that makes it, in the judgment
of the Underwriter, impracticable to market the Series 2020 Bonds on the terms and in the manner
contemplated in the Official Statement.
(e) All steps to be taken and all instruments and other documents to be
executed, and all other legal matters in connection with the transaction contemplated by this
Purchase Contract shall be reasonably satisfactory in legal form and effect to the Underwriter.
(f) The Underwriter shall have the right to terminate this Purchase Contract by
notification to the Issuer if, after the execution hereof and prior to the Closing any of the following
events shall occur in the sole and reasonable judgment of the Underwriter:
(i) an event shall occur which makes untrue or incorrect in any material
respect, as of the time of such event, any statement or information contained in the Official
Statement or which is not reflected in the Official Statement but should be reflected therein
in order to make the statements contained therein in the light of the circumstances under
which they were made not misleading in any material respect and, in either such event, (1)
the Issuer refuses to permit the Official Statement to be supplemented to supply such
statement or information in a manner satisfactory to the Underwriter, or (2) the effect of
the Official Statement as so supplemented is, in the reasonable judgment of the
Underwriter, to materially adversely affect the market price or marketability of the Series
2020 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the
contemplated offering prices (or yields), of the Series 2020 Bonds; or
(ii) legislation shall be introduced in, enacted by, reported out of
committee, or recommended for passage by Florida, either House of the Congress, or
recommended to the Congress or otherwise endorsed for passage (by press release, other
form of notice or otherwise) by the President of the United States, the Treasury Department
of the United States, the Internal Revenue Service or the Chairman or ranking minority
member of the Committee on Finance of the United States Senate or the Committee on
Ways and Means of the United States House of Representatives, or legislation is proposed
for consideration by either such committee by any member thereof or presented as an
option for consideration by either such committee by the staff of such committee or by the
staff of the Joint Committee on Taxation of the Congress of the United States, or a bill to
amend the Code (which, if enacted, would be effective as of a date prior to the Closing)
shall be filed in either House, or a decision by a court of competent jurisdiction shall be
14
rendered, or a regulation or filing shall be issued or proposed by or on behalf of the
Department of the Treasury or the Internal Revenue Service of the United States, or other
agency of the federal government, or a release or official statement shall be issued by the
President, the Department of the Treasury or the Internal Revenue Service of the United
States, in any such case with respect to or affecting (directly or indirectly) the federal or
state taxation of interest received on obligations of the general character of the Series 2020
Bonds which, in the reasonable judgment of the Underwriter, materially adversely affects
the market price or marketability of the Series 2020 Bonds or the ability of the Underwriter
to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series
2020 Bonds; or
(iii) a stop order, ruling, regulation, proposed regulation or statement
by or on behalf of the Securities and Exchange Commission or any other governmental
agency having jurisdiction of the subject matter shall be issued or made to the effect that
the issuance, offering, sale or distribution of obligations of the general character of the
Series 2020 Bonds (including any related underlying obligations) is in violation or would
be in violation of any provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended or the Trust Indenture Act of 1939, as amended; or
(iv) legislation introduced in or enacted (or resolution passed) by the
Congress or an order, decree, or injunction issued by any court of competent jurisdiction,
or an order, ruling, regulation (final, temporary, or proposed), press release or other form
of notice issued or made by or on behalf of the Securities and Exchange Commission, or
any other governmental agency having jurisdiction of the subject matter, to the effect that
obligations of the general character of the Series 2020 Bonds, including any or all
underlying arrangements, are not exempt from registration under or other requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or that the Bond Ordinance
is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or
that the issuance, offering, or sale of obligations of the general character of the Series 2020
Bonds, including any or all underlying arrangements, as contemplated hereby or by the
Official Statement or otherwise, is or would be in violation of the federal securities law as
amended and then in effect; or
(v) there shall have occurred (1) any outbreak or escalation of
hostilities, declaration by the United States of a national or international emergency or war,
or (2) any other calamity or crisis in the financial markets of the United States or elsewhere;
or (3) a downgrade of the sovereign debt rating of the United States by any major credit
rating agency or payment default on United States Treasury obligations which, in the
reasonable judgment of the Underwriter, materially adversely affects the market price or
marketability of the Series 2020 Bonds or the ability of the Underwriters to enforce
15
contracts for the sale, at the contemplated offering prices (or yields), of the Series 2020
Bonds; or
(vi) there shall have occurred a general suspension of trading, minimum
or maximum prices for trading shall have been fixed and be in force or maximum ranges
or prices for securities shall have been required on the New York Stock Exchange or other
national stock exchange whether by virtue of a determination by that Exchange or by order
of the Securities and Exchange Commission or any other governmental agency having
jurisdiction or any national securities exchange shall have: (1) imposed additional material
restrictions not in force as of the date hereof with respect to trading in securities generally,
or to the Series 2020 Bonds or similar obligations, or (2) materially increased restrictions
now in force with respect to the extension of credit by or the charge to the net capital
requirements of underwriters or broker-dealers which, in the reasonable judgment of the
Underwriter, materially adversely affects the market price or marketability of the Series
2020 Bonds or the ability of the underwriters to enforce contracts for the sale, at the
contemplated offering prices (or yields), of the Series 2020 Bonds; or
(vii) a general banking moratorium shall have been declared by federal
or New York or Florida state authorities or a major financial crisis or a material disruption
in commercial banking or securities settlement or clearances services shall have occurred
which, in the reasonable judgment of the Underwriter, materially adversely affects the
market price or the marketability for the Series 2020 Bonds or the ability of the Underwriter
to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series
2020 Bonds; or
(viii) a downgrading or suspension of any rating (without regard to credit
enhancement) by [S&P Global Ratings, a business unit of Standard & Poor's Financial
Services LLC ("S&P") or Moody's Investors Service ("Moody's)] of any debt securities
issued by the Issuer which are secured by the Net Revenues, or there shall have been any
official statement as to a possible downgrading (such as being placed on "credit watch" or
"negative outlook" or any similar qualification) of any rating by [S&P or Moody's] of any
debt securities issued by the Issuer which are secured by the Net Revenues, including the
Series 2020 Bonds, which, in the reasonable judgment of the Underwriter, materially
adversely affects the market price or marketability of the Series 2020 Bonds or the ability
of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or
yields), of the Series 2020 Bonds.
(g) At or before the Closing, the Underwriter shall receive the following documents:
16
(1) The Official Statement, and each supplement or amendment thereto, if any,
executed on behalf of the Issuer by its Mayor and City Clerk, or such other official as may have
been agreed to by the Underwriter;
(2) Certified copy of the Bond Ordinance;
(3) Certified copy of the Resolution;
(4) Each of the other Issuer Documents, fully executed by the respective parties
thereto;
(5) A copy of the Letter of Representations with DTC;
(6) The approving opinion of Bond Counsel, as to the Series 2020 Bonds, dated
the Closing Date, substantially in the form attached to the Official Statement together with a
letter of Bond Counsel addressed to the Underwriter, and dated the Closing Date, to the effect
that such bond approving opinion may be relied upon by the Underwriter to the same extent as
if such opinion were addressed to the Underwriter;
(7) A supplemental opinion of Bond Counsel, dated the Closing Date,
addressed to the Underwriter, to the effect that, (i) the statements contained in the Official
Statement under the captions "PLAN OF REFUNDING", "DESCRIPTION OF THE SERIES
2020 BONDS" (except for the information relating to DTC and its book -entry system of
registration, as to which no view need be expressed), and "SECURITY FOR THE SERIES
2020 BONDS", insofar as such information purports to summarize portions of the Bond
Ordinance, the Resolution, and the Series 2020 Bonds, constitute a summary of the information
purported to be summarized therein, and the statements contained under the caption "TAX
MATTERS" are accurate statements or summaries of the matters therein set forth, (ii) the
Series 2020 Bonds are exempt from registration under the Securities Act of 1933, as amended,
(iii) the Bond Ordinance is exempt from qualification under the Trust Indenture Act of 1939,
as amended and (iv) to the effect that, in reliance on schedules provided by the Financial
Advisor, the pledge of and lien created by the Bond Ordinance in favor of holders of the
Refunded Bond, shall no longer be in effect;
(8) An opinion of Pamela K. Akin, Esquire, City Attorney, dated the Closing
Date and addressed to the Underwriter, to the effect that:
(A) the Issuer is a municipal corporation of the State of Florida (the
"State"), duly created, organized and validly existing under the laws of the State,
and has full legal right, power and authority under the Act and the Bond Ordinance
(1) to enter into, execute and deliver the Issuer Documents and all documents
17
required hereunder and thereunder to be executed and delivered by the Issuer, (2)
to sell, issue and deliver the Series 2020 Bonds to the Underwriter as provided
herein, (3) to pledge the Net Revenues as provided in the Bond Ordinance, (4) to
refund the Refunded Bond, and (5) to carry out and consummate the transactions
contemplated by the Issuer Documents and the Official Statement, and the Issuer
has complied, and will at the Closing be in compliance in all respects, with the
terms of the Act and the Issuer Documents as they pertain to such transactions;
(B) by all necessary official action of the Issuer prior to or concurrently
with the acceptance hereof, the Issuer has duly authorized all necessary action to
be taken by it for (1) the enactment of the Bond Ordinance and Resolution and the
issuance and sale of the Series 2020 Bonds, (2) the approval, execution and delivery
of, and the performance by the Issuer of the obligations on its part contained in the
Series 2020 Bonds and the Issuer Documents, (3) the pledge of the Net Revenues
as provided in the Bond Ordinance, and (4) the consummation by it of all other
transactions contemplated by the Official Statement, the Issuer Documents and any
and all such other agreements and documents as may be required to be executed,
delivered and/or received by the Issuer in order to carry out, give effect to, and
consummate the transactions contemplated herein and in the Official Statement;
(C) the Bond Ordinance was duly and validly enacted by the Issuer and
is in full force and effect and has not been amended, modified or repealed; the Bond
Ordinance and all other proceedings pertinent to the validity and enforceability of
the Series 2020 Bonds and the receipt of the Net Revenues and all Issuer required
actions to receive all of the Net Revenues have been duly and validly adopted or
undertaken in compliance with all applicable procedural requirements of the Issuer
and in compliance with the Constitution and laws of the State, including the Act;
(D) the Issuer Documents have been duly authorized, executed and
delivered by the Issuer, and constitute legal, valid and binding obligations of the
Issuer enforceable against the Issuer in accordance with their respective terms,
except to the extent limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws and equitable principles of general application relating to or
affecting the enforcement of creditors' rights; and the Series 2020 Bonds, when
issued and delivered and paid for in accordance with the Bond Ordinance and this
Purchase Contract, will constitute legal, valid and binding obligations of the Issuer
entitled to the benefits of the Bond Ordinance and enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other similar laws and principles of equity relating to or affecting the enforcement
of creditors' rights; upon the issuance, authentication and delivery of the Series
18
2020 Bonds as aforesaid, the Bond Ordinance will provide, for the benefit of the
holders, from time to time, of the Series 2020 Bonds, the covenant to levy and
collect the Net Revenues it purports to create as set forth in the Bond Ordinance;
(E) the information in the Preliminary Official Statement and the
Official Statement under the captions "THE WATER AND SEWER SYSTEM",
"PENSION AND OTHER POST -EMPLOYMENT BENEFIT LIABILITIES",
"INVESTMENT POLICY OF THE CITY", and "LITIGATION" is true and
complete in all material respects, and with respect to the other information in the
Preliminary Official Statement and the Official Statement, based upon her review
of the Preliminary Official Statement and the Official Statement as counsel to the
Issuer and without having undertaken to determine independently the accuracy or
completeness of the contents of such other portions of the Preliminary Official
Statement and the Official Statement, she has no reason to believe that such other
portions of the Preliminary Official Statement, as of its date, and the Official
Statement, as of its date and the Closing Date (in each case, except for the financial
and statistical data contained therein and the information relating to DTC and its
book -entry system of registration, as to which no view need be expressed) contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading;
(F) the use of the Preliminary Official Statement by the Underwriter for
the purpose of offering the Series 2020 Bonds for sale has been duly authorized and
ratified by the Issuer;
(G) the Official Statement has been duly authorized, executed and
delivered by the Issuer and the Issuer has consented to the use thereof by the
Underwriter;
(H) the enactment of the Bond Ordinance and Resolution and the
authorization, execution and delivery of the Issuer Documents and the Series 2020
Bonds and compliance with the provisions hereof and thereof, will not conflict
with, or constitute a breach of or default under, any constitutional provision, law or
administrative regulation, or to the best of her knowledge, any consent decree,
ordinance, resolution or any agreement or other instrument to which the Issuer was
or is subject, as the case may be, nor will such adoption, execution, delivery,
authorization or compliance result in the creation or imposition of any lien, charge
or other security interest or encumbrance of any nature whatsoever upon any of the
property or assets of the Issuer, or under the terms of any law, administrative
regulation, ordinance, resolution or instrument;
(I) to the best of her knowledge, all approvals, authorizations, licenses,
permits, consents, and orders of any governmental authority, legislative body,
board, agency or commission having jurisdiction in any matter which would
constitute a condition precedent to the performance by the Issuer of its obligations
hereunder and under the Issuer Documents have been obtained and are in full force
and effect;
(J) except as disclosed in the Official Statement, there is no legislation,
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by
any court, government agency, public board or body, pending or, to the best of her
knowledge, threatened, against the Issuer, affecting the existence of the Issuer or
the titles of its members and officers to their respective offices, or affecting or
seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series
2020 Bonds or the collection and receipt of any of the Net Revenues, or in any way
contesting or affecting the validity or enforceability of the Series 2020 Bonds, the
Issuer Documents or any other material agreement or instrument to which the Issuer
is a party and which is used or contemplated for use in the consummation of the
transactions contemplated hereby or by the Official Statement or contesting in any
way the completeness or accuracy of the Preliminary Official Statement or the
Official Statement or any supplement or amendment thereto, or contesting the
powers of the Issuer or any authority for the issuance of the Series 2020 Bonds, the
enactment of the Bond Ordinance, or the execution and delivery of the Issuer
Documents, nor, to the best of her knowledge, is there any basis therefor, wherein
an unfavorable decision, ruling or finding would materially adversely affect the
validity or enforceability of the Series 2020 Bonds or the Issuer Documents;
(9) A certificate of the Issuer dated the Closing Date signed by its Mayor or
Vice Mayor and attested to by the City Clerk, in form and substance satisfactory to the
Underwriter, to the effect that (i) the representations, covenants, agreements and warranties of
the Issuer contained herein are true and correct in all material respects on and as of the Closing
Date as if made on the Closing Date; (ii) except as disclosed in the Official Statement, no
litigation or proceeding against it is pending or, to the best of his knowledge, threatened in any
court or administrative body nor is there a basis for litigation which would (A) contest the right
of the members or officials of the Issuer to hold and exercise their respective positions, (B)
contest the due organization and valid existence of the Issuer, (C) contest the validity, due
authorization and execution of the Series 2020 Bonds or the Issuer Documents, (D) attempt to
limit, enjoin or otherwise restrict or prevent the Issuer from levying and collecting Net
20
Revenues, (E) contest in any way the completeness or accuracy of the Preliminary Official
Statement or the Official Statement or any supplement or amendment thereto, or (F) which may
result in any material adverse change in the business, properties, assets or financial condition
of the Issuer; (iii) the Bond Ordinance is in full force and effect and has not been amended,
modified or repealed; (iv) to the best of his knowledge, no event affecting the Issuer has
occurred since the date of the Official Statement which should be disclosed in the Official
Statement for the purposes for which it is to be used or which is necessary to disclose therein in
order to make the statements and information therein, in light of the circumstances under which
made, not misleading in any respect as of the time of Closing; (v) Except for the information
provided by DTC or the Underwriter (as to which no representations are made), the Preliminary
Official Statement did not, as of its date, and the Official Statement did not as of its date, and
does not as of the Closing Date, contain any untrue statement of a material fact or omit to state
a material fact which should be included therein for the purposes for which such Official
Statements are to be used, or which is necessary in order to make the statements contained
therein, in light of the circumstances in which they were made, not misleading; (vi) the Issuer
has complied or is presently in compliance with all agreements related to the Series 2020 Bonds
and has satisfied all conditions on its part to be observed or satisfied under the Bond Ordinance
and this Purchase Contract as of the Closing Date; (vii) the Issuer Documents have been duly
authorized, executed and delivered by one or more duly authorized officers of the Issuer and
each of the Issuer Documents is a legal, valid and binding obligation of the Issuer enforceable
in accordance with its terms, except as such enforceability may be limited by (A) the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally, and (B) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and (viii) since September 30,
2018, no material adverse change has occurred in the financial position or results of the
operations of the Issuer, except as disclosed in the Official Statement;
(10) Evidence that the rating agencies who have rated the Series 2020 Bonds
have issued ratings of not lower than the respective ratings on the Series 2020 Bonds which are
published in the Official Statement and that such ratings are in full force and effect as of the
Closing Date;
(11) A certificate executed by the appropriate officer of the Issuer, delivered
pursuant to Rule 15C2-12 under the Securities Exchange Act of 1934, deeming the Preliminary
Official Statement to be final as of its date;
(12) An opinion of Disclosure Counsel, dated the Closing Date and addressed to
the Issuer, together with a letter addressed to the Underwriter authorizing the Underwriter to
rely upon the letter addressed to the Issuer, to the effect that in accordance with their
understanding with the Issuer, as Disclosure Counsel such firm has rendered legal advice and
21
assistance to the Issuer in the course of the preparation of the Official Statement; that assistance
involved, among other things, inquiries concerning various legal and related matters, their
review of certain records, documents and proceedings, participation in discussions with
representatives of the Issuer, the Issuer's Financial Advisor, and others concerning the contents
of the Official Statement and related matters; that in accordance with their understanding with
the Issuer, they are not passing upon, and do not assume responsibility for, the accuracy,
completeness or fairness of the contents of the Official Statement; that, however, they can
advise that, in their capacity as Disclosure Counsel and on the basis of the information that has
come to their attention, and in reliance on the certificates, opinions and documents they have
reviewed in the course of their performance of the services referred to above, and without
having undertaken to verify independently the accuracy, completeness or fairness of the
contents of the Official Statement, nothing has come to their attention which leads them to
believe that the Official Statement, as of its date and the Closing Date (in each case, excluding
the financial and statistical data included in the Official Statement and the appendices thereto,
and the information relating to DTC or its book -entry only system), as of its date and as of the
Closing Date, contained or contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading;
(13) An opinion of Underwriter' Counsel, dated the Closing Date and addressed
to the Underwriter, to the effect that: (i) the Series 2020 Bonds are not subject to the registration
requirements of the Securities Act; (ii) based upon their participation in the preparation of the
Preliminary Official Statement and the Official Statement as counsel to the Underwriter and
without having undertaken to determine independently the accuracy or completeness of the
statements contained in the Preliminary Official Statement or the Official Statement, as of the
Closing Date, nothing has come to the attention of such counsel that causes them to believe that
the Preliminary Official Statement, as of its date, and the Official Statement as of its date and
as of the Closing Date (in each case, excluding the financial statements, and the reports,
financial and statistical data and forecasts included therein, and the information regarding DTC
and its book -entry system of registration, as to all of which no opinion need be expressed)
contained or contains any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and (iii) based upon their review of
the appropriate documents regarding the Continuing Disclosure Agreement as it relates to
continuing disclosure under the Rule, the requirements of the Rule have been satisfied;
(14) A Blue Sky Memorandum, issued by Underwriter's Counsel;
(15) A certificate of U.S. Bank National Association, in its capacity as Registrar
and Paying Agent, dated the Closing Date, in a form reasonably satisfactory to the Underwriter;
22
(16) Such additional certificates, legal opinions, instruments, proceedings and
other documents as the Underwriter or its counsel may reasonably deem necessary to evidence
the truth and accuracy as of the time of the Closing of the representations of the Issuer, the
compliance of the Issuer with legal requirements and the due performance or satisfaction by the
Issuer on or prior to such time of all agreements then to be performed and all conditions then to
be satisfied by the Issuer.
By its execution of this Purchase Contract, the Issuer consents to the use by the
Underwriter of the documents listed above, including specifically the Official Statement, the
Bond Ordinance and the information contained therein, in connection with the public sale of
the Series 2020 Bonds.
If the Issuer shall be unable to satisfy the conditions contained in this Purchase
Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted
by this Purchase Contract, this Purchase Contract shall terminate and an amount equal to the
Good Faith Deposit shall be returned by the Issuer to the Underwriter as provided in Section
3, and neither the Underwriter nor the Issuer shall be under further obligation hereunder except
as expressly set forth in Sections 11.(a), (b) and (c) below.
10. The Issuer covenants with the Underwriter to cooperate with them in qualifying the
Series 2020 Bonds for offer and sale under the securities or "Blue Sky" laws of such states as the
Underwriter may request; provided that in no event shall the Issuer be obligated to take any action
which would subject it to general service of process in any state where it is not now so subject or
qualify to do business in connection with any such qualification or determination in any
jurisdiction. It is understood that the Issuer is not responsible for compliance with or the
consequences of failure to comply with applicable "Blue Sky" laws, or for any expenses incurred
in such compliance.
11. (a) The Issuer shall pay (i) the cost of the preparation and printing or other
reproduction (for distribution on or prior to the date hereof) of the Official Statement; (ii) the fees
and expenses of Bond Counsel, Disclosure Counsel, the Registrar and Paying Agent, and the
Issuer's Financial Advisor, and any other experts or consultants retained by the Issuer; (iii) the
costs and fees of the rating agencies; and (iv) out-of-pocket expenses of the Issuer. The Issuer
shall reimburse the Underwriter for actual expenses incurred or paid by the Underwriter on behalf
of the Issuer which are directly related to the marketing, issuance, and delivery of the Series 2020
Bonds, including, but not limited to, transportation, lodging, and meals for Issuer's employees and
representatives; provided, however, that (x) reimbursement for such expenses shall not exceed an
ordinary and reasonable amount for such expenses and (y) such expenses are not related to the
entertainment of any person and not prohibited from being reimbursed from the proceeds of an
23
offering of municipal securities under the MSRB's Rule G-20. Such reimbursement may be in the
form of inclusion in the expense component of the Underwriter's discount. The provisions of this
paragraph shall not obligate the Issuer to pay any fees or expenses that are contingent upon the
occurrence of the Closing, unless a successful Closing occurs. The Issuer's obligations to pay
expenses incurred by the Underwriter on behalf of the Issuer and its staff related to food and
lodging survive even if the underlying transaction fails to close or consummate.
(b) The Underwriter shall pay expenses related to the initial purchase and sale
of the Series 2020 Bonds as follows (which may be included as an expense component of the
Underwriter's discount) (x) the cost of printing or other reproduction of this Purchase Contract
and the cost of preparation and printing of the Blue Sky report, if any, to be used by them; (y) all
advertising expenses in connection with the public offering of the Series 2020 Bonds; and (z) all
other expenses incurred by them in connection with the public offering and distribution of the
Series 2020 Bonds, including the fees and expenses of counsel retained by it and the fees of Digital
Assurance Certification, L.L.C. for a continuing disclosure undertaking compliance review.
(c) If the Series 2020 Bonds are sold to the Underwriter pursuant to this
Purchase Contract, the Issuer shall pay, from the proceeds of the sale of the Series 2020 Bonds or
from other funds available to it, the costs of issuance with respect to the Series 2020 Bonds. If the
Issuer shall be unable to, or shall otherwise fail to, satisfy the conditions to the obligation of the
Underwriter to purchase, accept delivery of, and pay for the Series 2020 Bonds pursuant to the
terms of this Purchase Contract, or if the obligation of the Underwriter to purchase, accept delivery
of and pay for the Series 2020 Bonds shall be terminated for any reason permitted by this Purchase
Contract, then the Issuer shall reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of its counsel) reasonably incurred by the Underwriter in connection with
this Purchase Contract or the offering contemplated hereunder.
12. Any notice or other communication to be given to the Issuer under this Purchase
Contract shall be given by delivering the same in writing to the Issuer at City of Clearwater,
Florida, 100 South Myrtle Avenue, 3rd Floor, Clearwater, Florida 33756, Attention: City Manager.
Any notice or other communication to be given to the Underwriter under this Purchase Contract
shall be given by delivering the same in writing to Raymond James & Associates, Inc., 880
Carillon Parkway, St. Petersburg, Florida 33716, Attention: Rick W. Patterson.
13. This Purchase Contract shall constitute the entire agreement between the Issuer and
the Underwriter and is made solely for the benefit of the Issuer and the Underwriter (including
their respective successors or assigns). No other person shall acquire or have any rights hereunder
or by virtue hereof. All representations, warranties and agreements of the Issuer in this Purchase
Contract shall remain operative and in full force and effect, regardless of (a) any investigation
made by or on behalf of any of the Underwriter, and (b) the delivery of and payment for the Series
24
2020 Bonds hereunder.
14. This Purchase Contract may not be amended without the written consent of the
Issuer and the Underwriter.
15. The validity, interpretation and performance of this Purchase Contract shall be
governed by the internal laws of the State of Florida, without regard to conflict of law principles.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Contract to be
duly executed by their duly authorized officers as of the day and year first above written.
[Remainder of page intentionally left blank]
25
[Counterpart Signature Page to Bond Purchase Agreement, dated [ J, 2020]
RAYMOND JAMES & ASSOCIATES, INC.
By:
Rick W. Patterson
Managing Director
[Counterpart Signature Page to Bond Purchase Agreement, dated [ 1, 20201
Accepted:
CITY OF CLEARWATER, FLORIDA
By:
George N. Cretekos, Mayor
ATTEST: Approved as to form:
By: By:
Rosemarie Call, City Clerk Pamela K. Akin, City Attorney
EXHIBIT A
MATURITY SCHEDULE
City of Clearwater, Florida
Water and Sewer Revenue Refunding Bonds,
Series 2020
$[_______] Serial Bonds
Maturity Principal
(December 1) Amount Interest Rate Yield Price
2020 $ % %
2021 % %
2022 % %
2023 % %
2024 % %
2025 % %
2026 % %
2027 % %
2028 % %
2029 % %
2030 % %
2031 % %
2032 % %
$[ 1 [_]% Term Bond due December 14 1; Yield [ 1%, Price
$[ 1 [ 1% Term Bond due Decemberl, [ 1; Yield [ 1%, Price
Exhibit A-1
REDEMPTION PROVISIONS
Optional Redemption. The Series 2020 Bonds maturing on or before [ 1 are not
subject to optional redemption prior to their respective dates of maturity. The Series 2020 Bonds
maturing on or after [ 1, shall be subject to redemption at the option of the City prior to their
stated dates of maturity, in whole or in part, and if in part from such maturities selected by the City
(and by lot within a maturity if less than a full maturity), on [ 1 or any date thereafter, at a
redemption price equal to 100% of the principal amount thereof to be redeemed, together with
accrued interest to the date fixed for redemption.
Mandatory Sinking Fund Redemption. The Series 2020 Bonds maturing on [ 1 in the
year [ 1 are subject to mandatory redemption prior to maturity, in part, by lot, at a redemption
price equal to the unpaid principal amount of the Series 2020 Bonds to be redeemed, plus interest
accrued thereon to the date of redemption, on [ 11 of each year in the following Amortization
Installments and in the years specified:
Year
Amortization
Installment
r 1* $r1
Exhibit A-2
EXHIBIT B
FORM OF DISCLOSURE LETTER PURSUANT TO
SECTION 218.385, FLORIDA STATUTES
[ _1, 2020
City of Clearwater, Florida
100 South Myrtle Avenue, 3rd Floor
Clearwater, Florida 33756
Re: $[ 1 City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds,
Series 2020 (the "Series 2020 Bonds")
Ladies and Gentlemen:
In connection with the proposed issuance by the City of Clearwater, Florida (the "Issuer"),
of $[ 1 aggregate principal amount of its Water and Sewer Revenue Refunding Bonds, Series
2020 (the "Series 2020 Bonds") Raymond James & Associates, Inc. (the "Underwriter") has
agreed to underwrite a public offering of the Series 2020 Bonds. Arrangements for underwriting
the Series 2020 Bonds will include a Bond Purchase Agreement (the "Contract") between the
Issuer and the Underwriter that will embody the negotiations in respect thereof.
The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385,
Florida Statutes, certain information in respect of the arrangements contemplated for the
underwriting of the Series 2020 Bonds as follows:
(a) The underwriting spread, including the management fee, expected to be realized is
as follows:
ITEM $/1,000 AMOUNT
Average Takedown $[ 1 $[ ]
Underwriter's Expenses [ 1* [ 1
Total Underwriting Spread $[ 1* $[ 1
*May not add due to rounding.
(b) The nature and estimated amounts of expenses to be incurred by the Underwriter in
connection with the purchase and offering of the Bonds are set forth in Schedule I
attached hereto.
Exhibit B-1
(c) There are no "finders," as defined in Section 218.386, Florida Statutes, who have
been retained or who will be paid by the Underwriter in connection with the
issuance of the Series 2020 Bonds.
(d) No other fee, bonus or other compensation is estimated to be paid by the
Underwriter in connection with the issuance of the Series 2020 Bonds to any person
not regularly employed or retained by the Underwriter, except as specifically
enumerated as expenses referred to in paragraph (a) above to be incurred by the
Underwriter as set forth in Schedule I attached hereto.
(e) The name and address of the Underwriter is set forth below:
Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
(f) Based on representations of the Issuer, it is our understanding that the Issuer is
proposing to issue $[ 1 in aggregate principal amount of the Series 2020 Bonds
for the purposes of refunding all of the outstanding Refunded Bond, as described
in the Bond Ordinance, and paying certain costs and expenses relating to the
issuance of the Series 2020 Bonds. The Series 2020 Bonds are expected to be repaid
over a period of approximately [ 1 years. At a True Interest Cost of
approximately [ 1%, total interest paid over the life of the Series 2020 Bonds
will be $[ 1.
(g)
Based on representations of the Issuer, it is our understanding that the Series 2020
Bonds will be payable solely from the Net Revenues in amounts sufficient to pay
the principal of and interest on the Series 2020 Bonds, in the manner provided in
the Bond Ordinance. The Series 2020 Bonds carry an average annual debt service
of approximately $[ 1. Assuming the Issuer pays debt service on the Series
2020 Bonds from the Net Revenues, such funds equal to an average of $[ 1
that will not be available to finance the other services of the Issuer each year that
the Series 2020 Bonds will be outstanding, which is approximately [ 1 years.
Notwithstanding the foregoing, we are not accountants or actuaries, nor are we
engaged in the practice of law. Accordingly, while we believe the above-described
calculations to be correct, we do not warrant them to be so.
We understand that you do not require any further disclosure from the Underwriter
pursuant to Section 218.385, Florida Statutes.
Exhibit B-2
Very truly yours,
RAYMOND JAMES & ASSOCIATES,
INC.
By:
Rick W. Patterson
Managing Director
Exhibit B-3
SCHEDULE I
ESTIMATED EXPENSES
ITEM $/1,000 AMOUNT
Underwriter's Counsel $ $
Dalcomp
Dayloan
CUSIP Fee
DTC Fee
DAC Expense
Travel / Miscellaneous
TOTAL S S
Exhibit B- 4
EXHIBIT C
ISSUE PRICE CERTIFICATE
The undersigned, Raymond James & Associates, Inc. (the "Underwriter"), hereby certifies
as set forth below with respect to the sale and issuance by the City of Clearwater, Florida (the
"Issuer") of its $[ ] Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Issue").
[Select appropriate provisions below:]
1. [Alternative 115 — All Maturities Use General Rule: Sale of the Bonds. As of the
date of this certificate, for each Maturity of the Bonds, the first price at which at least 1 0% of
such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule
A.][Alternative 216 — Select Maturities Use General Rule: Sale of the General Rule Maturities.
As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price
at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price
listed in Schedule A.]
2. Initial Offering Price of the [Bonds][Hold-the-Offering-Price Maturities].
(a) [Alternative 117 — All Maturities Use Hold -the -Offering -Price Rule: The
Underwriting Group offered the Bonds to the Public for purchase at the respective initial offering
prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of
the pricing wire or equivalent communication for the Bonds is attached to this certificate as
Schedule B.] [Alternative 218 — Select Maturities Use Hold -the -Offering -Price Rule: The
Underwriting Group offered the Hold -the -Offering -Price Maturities to the Public for purchase at
the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or
before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is
attached to this certificate as Schedule B.]
15 If Alternative 1 is used, delete the remainder of paragraph 1 and all of paragraph 2 and
renumber paragraphs accordingly.
16 If Alternative 2 is used, delete Alternative 1 of paragraph 1 and use each Alternative 2
in paragraphs 2(a) and (b).
17 If Alternative 1 is used, delete all of paragraph 1 and renumber paragraphs accordingly.
18 Alternative 2(a) of paragraph 2 should be used in conjunction with Alternative 2 in
paragraphs 1 and 2(b).
Exhibit C- 1
(b) [Alternative 1 — All Maturities use Hold -the -Offering -Price Rule: As set forth in
the Purchase Contract, the Underwriters have agreed in writing that, (i) for each Maturity of the
Bonds, they would neither offer nor sell any of the Bonds of such Maturity to any person at a
price that is higher than the Initial Offering Price for such Maturity during the Holding Period for
such Maturity (the "hold -the- offering -price rule"), and (ii) any selling group agreement shall
contain the agreement of each dealer who is a member of the selling group, and any retail
distribution agreement shall contain the agreement of each broker-dealer who is a party to the
retail distribution agreement, to comply with the hold -the -offering -price rule. Pursuant to such
agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a
price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during
the Holding Period. [Alternative 2 - Select Maturities Use Hold -the -Offering -Price Rule: As set
forth in the Purchase Contract, the members of the Underwriting Group have agreed in writing
that, (i) for each Maturity of the Hold -the -Offering -Price Maturities, they would neither offer nor
sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial
Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the -
offering -price rule"), and (ii) any selling group agreement shall contain the agreement of each
dealer who is a member of the selling group, and any retail distribution agreement shall contain
the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply
with the hold -the -offering -price rule. Pursuant to such agreement, no Underwriter (as defined
below) has offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that
is higher than the respective Initial Offering Price for that Maturity of the Bonds during the
Holding Period.
3. Total Issue Price. The total of the issue prices of all the Maturities is
$
4. Defined Terms.
[(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A
hereto as the "General Rule Maturities."]
[(b) Hold -the -Offering -Price Maturities means those Maturities of the Bonds listed in
Schedule A hereto as the "Hold -the -Offering -Price Maturities."]
[(c) Holding Period means, with respect to a Hold -the -Offering -Price Maturity, the
period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day
after the Sale Date ( , 2020), or (ii) the date on which the Underwriters have sold at
least 10% of such Hold -the -Offering -Price Maturity to the Public at prices that are no higher than
the Initial Offering Price for such Hold -the -Offering -Price Maturity.]
(d) Issuer means the City of Clearwater, Florida.
(e) Maturity means Bonds with the same credit and payment
different maturity dates, or Bonds with the same maturity date but different
are treated as separate maturities.
(f) Public means any person (including an individual,
association, company, or corporation) other than an Underwriter
Exhibit C- 2
trust,
or a
terms. Bonds with
stated interest rates,
estate, partnership,
related party to an
Underwriter. The term "related party" for purposes of this certificate generally means any two or
more persons who have greater than 50 percent common ownership, directly or indirectly.
(g) Sale Date means the first day on which there is a binding contract in writing for
the sale of a Maturity of the Bonds. The Sale Date of the Bonds is , 2020.
(h) Underwriter means (i) any person that agrees pursuant to a written contract with
the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the
initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract
directly or indirectly with a person described in clause (i) of this paragraph to participate in the
initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail
distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing
in this certificate represents the Underwriter's interpretation of any laws, including specifically
Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder. The undersigned understands that the foregoing information will be
relied upon by the Issuer with respect to certain of the representations set forth in the [Tax
Certificate] and with respect to compliance with the federal income tax rules affecting the Bonds,
and by Bond Counsel in connection with rendering its opinion that the interest on the Bonds is
excluded from gross income for federal income tax purposes, the preparation of Internal Revenue
Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to
time relating to the Bonds.
[Signature page to follow]
Exhibit C- 3
Dated: [ __], 2020.
RAYMOND JAMES & ASSOCIATES, INC.
By:
James A. Wright
Managing Director—Municipal Underwriting
Exhibit C- 4
Schedule A
SALE PRICES OF THE GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD -THE -OFFERING -PRICE MATURITIES
(Attached)
Schedule B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
EXHIBIT B
FORM OF PAYING AGENT AND REGISTRAR AGREEMENT
Resolution No. 19-37
BMO Draft #3
PAYING AGENT AND REGISTRAR AGREEMENT
THIS PAYING AGENT AND REGISTRAR AGREEMENT (this "Agreement") is entered
into as of [January _], 2020 by and between the City of Clearwater, Florida (the "Issuer"), and
U.S. Bank National Association ("Bank"), as Paying Agent and Registrar.
RECITALS
WHEREAS the Issuer has duly authorized and provided for the issuance of its Bonds,
entitled Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Bonds") in an aggregate
principal amount of $ to be issued as fully registered bonds without coupons;
WHEREAS the Issuer will ensure all things necessary to make the Bonds the valid
obligations of the Issuer, in accordance with their terms, will be done upon the issuance and
delivery thereof;
WHEREAS the Issuer and the Bank wish to provide the terms under which Bank will act
as Paying Agent to pay the principal, redemption premium (if any) and interest on the Bonds, in
accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds;
WHEREAS the Bank has agreed to serve in such capacities for and on behalf of the Issuer
and has full power and authority to perform and serve as Paying Agent and Registrar for the Bonds;
WHEREAS the Issuer has duly authorized the execution and delivery of this Agreement;
and all things necessary to make this Agreement a valid agreement have been done.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.
All capitalized undefined terms shall have the same meanings as set forth in the Resolution.
In addition, the following terms, unless the context otherwise requires, shall have the meanings
specified in this Section:
"Bank" means U.S. Bank National Association, a national banking association organized
and existing under the laws of the United States of America.
"Bond Register" means the book or books of registration kept by the Bank in which are
maintained the names and addresses and principal amounts registered to each Registered Owner.
"Fiscal Year" means the fiscal year of the Issuer ending on September 30 of each year.
"Issuer" means the City of Clearwater, Florida.
"Paying Agent" means the Bank when it is performing the function of paying agent for the
Bonds.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government or any entity whatsoever.
"Registered Owner" means a Person in whose name a Bond is registered in the Bond
Register.
"Registrar" means the Bank when it is performing the function of registrar for the Bonds.
"Resolution" means, collectively, Ordinance No. 3674-84, Ordinance No. 6915-01,
Ordinance No. 8620=14 and Resolution No. 19-37.
"Stated Maturity" when used with respect to any Bond means the date specified in the Bond
as the date on which the principal of such Bond is due and payable.
ARTICLE TWO
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 2.01. Appointment and Acceptance.
The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to
pay to the Registered Owners in accordance with the terms and provisions of this Agreement the
principal of, redemption premium (if any), and interest on all or any of the Bonds.
The Issuer hereby appoints the Bank as Registrar with respect to the Bonds. As Registrar,
the Bank shall keep and maintain for and on behalf of the Issuer, books and records as to the
ownership of the Bonds and with respect to the transfer and exchange thereof as provided.
The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar.
Section 2.02. Compensation.
As compensation for the Bank's services as Paying Agent and Registrar, the Issuer hereby
agrees to pay the Bank a one-time fee of $2,250.00 on the date of closing of the Bonds.
2
In addition, the Issuer agrees to reimburse the Bank, upon its request, for all reasonable
out-of-pocket expenses, disbursements, and advances, including without limitation the reasonable
fees, expenses, and disbursements of its agents and attorneys, incurred or made by the Bank in
connection with entering into and performing under this Agreement or in connection with
investigating and defending itself against any claim or liability hereunder.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent.
As Paying Agent, the Bank, provided sufficient collected funds have been deposited for
such purpose by or on behalf of the Issuer in the account designated by the Bank hereunder (the
"Account"), shall pay on behalf of the Issuer the principal of, redemption premium, if any, and
interest on each Bond in accordance with the provisions of the Bond. The Bank has no obligation
to draw upon any account or pursuant to any letter of credit, insurance policy or other agreement
or take any other action to assist the Issuer to comply with its obligations except to the extent
expressly set forth in this Agreement.
Section 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of, redemption premium (if any)
and interest on the Bonds on the dates specified in the Bond, from the Account to the extent such
amounts are on deposit in the Account.
The Bank shall not be required to pay interest on any funds of the Issuer for any period
during which such funds are held by the Bank awaiting the presentation of the Bonds for payment.
Section 3.03 Receipt of Funds.
The Issuer shall deposit or cause to be deposited with the Bank sufficient funds from the
funds pledged for the payment of the Bonds under the Resolution to pay when due and payable
the principal of, premium, if any, and interest on the Bonds as follows: (1) payment by check must
be received by the Paying Agent at least 5 business days prior to payment date and (2) payment
by wire must be received by Paying Agent no later than 11:OOAM EST on each Payment Date.
3
ARTICLE FOUR
REGISTRAR
Section 4.01. Initial Delivery of Bonds.
The Bonds will be initially registered and delivered to the purchaser designated by the
Issuer as one Bond for each maturity. If such purchaser delivers a written request to the Bank not
later than five business days prior to the date of initial delivery, the Bank will, on the date of initial
delivery, deliver Bonds of authorized denominations, registered in accordance with the instructions
in such written request. Bonds issued as book -entry DTC bonds will be held by the
Registrar/Paying Agent and transferred electronically to DTC under the FAST system.
Section 4.02. Duties of Registrar.
The Bank shall provide for the proper registration of transfer, exchange and replacement
of the Bonds. Every Bond surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an eligible guarantor institution, in form acceptable to the Bank, duly executed by the Registered
Owner thereof or such Registered Owner's agent. The Registrar may request any supporting
documentation it deems necessary or appropriate to effect a re -registration.
Section 4.03. Unauthenticated Bonds.
The Issuer shall provide to the Bank on a continuing basis, an adequate inventory of
unauthenticated Bonds to facilitate transfers. The Bank agrees that it will maintain such
unauthenticated Bonds in safekeeping.
Section 4.04. Form of Bond Register.
The Bank as Registrar will maintain its records as Registrar in accordance with the Bank's
general practices and procedures in effect from time to time.
Section 4.06. Cancelled Bonds.
All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if
surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the Issuer, shall
be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank.
The Issuer may at any time deliver to the Bank for cancellation any Bonds previously authenticated
and delivered which the Issuer may have acquired in any manner whatsoever, and all Bonds so
delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank for its
retention period then in effect and shall thereafter be destroyed and evidence of such destruction
furnished to the Issuer upon its written request.
4
Section 4.07. Mutilated, Lost, Stolen or Destroyed Bonds.
In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall
deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution
for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such
Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the
Bank in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing by
the owner with the Bank of evidence satisfactory to the Bank that such Bond was destroyed, stolen
or lost, and of the ownership thereof, and upon furnishing to the Bank of an appropriate bond of
indemnity in form, substance and amount as may be required by law and as is otherwise
satisfactory to the Bank. All Bonds so surrendered to the Bank shall be canceled by it and evidence
of such cancellation shall be given to the Issuer. If the mutilated, destroyed, stolen or lost Bond
has already matured or been called for redemption in accordance with its terms it shall not be
necessary to issue a new Bond prior to payment, provided that the owner shall first provide the
Bank with a bond of indemnity as set forth above.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein, each of which is ministerial
and non -fiduciary in nature. No implied duties or obligations shall be read into this Agreement
against the Bank. The Bank hereby agrees to use the funds deposited with it for payment of the
principal of and interest on the Bonds to pay the same as it shall become due and further agrees to
establish and maintain such accounts and funds as may be required for the Bank to function as
Paying Agent.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness of
the opinions expressed therein, on certificates or opinions expressed therein, on certificates or
opinions furnished to the Bank by the Issuer.
(b) The Bank shall not be liable for any error of judgment made in good faith. The Bank
shall not be liable for other than its gross negligence or willful misconduct in connection with any
act or omission hereunder.
(c) No provision of this Agreement shall require the Bank to expend or risk its own funds
or otherwise incur any financial liability for performance of any of its duties hereunder, or in the
exercise of any of its rights or powers.
(d) The Bank may rely, or be protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
5
order, bond, note, security or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. The Bank need not examine the ownership
of any Bond, but shall be protected in acting upon receipt of Bonds containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Registered
Owner or agent of the Registered Owner.
(e) The Bank may consult with counsel, and the written advice or opinion of counsel shall
be full authorization and protection with respect to any action taken, suffered or omitted by it
hereunder in good faith reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder
either directly or by or through agents or attorneys and shall not be liable for the actions of such
agent or attorney if appointed by it with due care.
Section 5.03. Recitals of Issuer.
The recitals contained in the Bonds shall be taken as the statements of the Issuer, and the
Bank assumes no responsibility for their correctness.
Section 5.04. Mav Own Bonds: Other Transactions.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Bonds with the same rights it would have if it were not the Paying Agent and Registrar for the
Bonds. The Bank may engage in or be interested in any financial or other transaction with the
Issuer, any Bond owner or any other Person.
Section 5.05. Money Held by Bank.
Money held by the Bank hereunder need not be segregated from other funds. The Bank
shall have no duties with respect to investment of funds deposited with it and shall be under no
obligation to pay interest on any money received by it hereunder. Any money deposited with or
otherwise held by the Bank for the payment of the principal, redemption premium (if any) or
interest on any Bond and remaining unclaimed, by the Registered Owner (or by the Issuer (which
claim by the Issuer shall be made in writing) after maturity and prior to escheatment) will be
escheated pursuant to the applicable state law. If funds are returned to the Issuer, the Issuer and
the Bank agree that the Registered Owner of such Bond shall thereafter look only to the Issuer for
payment thereof, and that all liability of the Bank with respect to such moneys shall thereupon
cease.
Section 5.06. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, in a court of competent
jurisdiction. The Issuer and the Bank further agree that the Bank has the right to file an action in
interpleader in any court of competent jurisdiction to determine the rights of any person claiming
any interest herein.
6
Section 5.07. Indemnification.
To the extent authorized by law, the Issuer shall indemnify the Bank, its officers, directors
and employees ("Indemnified Parties") for, and hold them harmless against any loss, cost, claim,
liability or expense arising out of or in connection with the Bank's acceptance or administration of
the Bank's duties hereunder (except any loss, liability or expense as may be adjudged by a court
of competent jurisdiction to have been caused by the Bank's negligence or willful misconduct),
including the cost and expense (including its counsel fees) of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers, rights or duties under
this Agreement. Such indemnity shall survive the termination or discharge of this Agreement or
discharge of the Bonds. The Issuer is a governmental agency and is entitled to the benefits of
Sovereign Immunity and the limited waiver thereof as provided in Florida Statutes, Section 768.28,
and common law. Nothing contained in this Agreement shall be construed as a waiver of any
immunity or limitation of liability the Issuer may be entitled to under the doctrine of Sovereign
Immunity or section 768.28, Florida Statutes.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
Section 6.02. Assignment
This Agreement may not be assigned by either party without the prior written consent of
the other party.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver or other document
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed,
faxed, sent pdf or delivered to the Issuer or the Bank, respectively, at the address shown below, or
such other address as may have been given by one party to the other by fifteen (15) days written
notice:
If to the Issuer:
City of Clearwater
Municipal Services Building
100 S. Myrtle Avenue
Clearwater, Florida 33756-5520
Attention: Brian Jay Ravins, Finance Director
Phone: (727) 562-4538
Email: iay.ravins(wmyclearwater.com
7
If to the Bank: U.S. Bank Global Corporate Trust
225 East Robinson Street, Suite 250
Orlando, FL 32801
Attention: Valerie Barreto
Phone: (407) 835-3804
Email: Valerie.barreto@usbank.com
Section 6.04. Effect of Headings.
The Article and Section headings herein are for convenience of reference only and shall
not affect the construction hereof.
Section 6.05. Successors and Assigns.
All covenants and agreements herein by the Issuer and the Bank shall bind their successors
and assigns, whether so expressed or not.
Section 6.06. Severability.
If any provision of this Agreement shall be determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not
in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement.
Except with respect to the Indemnified Parties, this Agreement is intended to be for the
benefit of or to be enforceable by only the Issuer and the Bank, and no third party shall be entitled
to claim that it is a third party beneficiary hereof.
Section 6.08. Entire Agreement.
This Agreement shall constitute the entire agreement between the parties hereto relative to
the Bank acting as Paying Agent and Registrar.
Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same Agreement.
Section 6.10. Term and Termination.
This Agreement shall be effective from and after its date and until the Bank resigns;
provided, however, that no such termination shall be effective until a successor has been appointed
and has accepted the duties of the Bank hereunder.
8
The Bank may resign at any time by giving written notice thereof to the Issuer. If the Bank
shall resign, or become incapable of acting, the Issuer shall promptly appoint a successor Paying
Agent and Registrar. If an instrument of acceptance by a successor Paying Agent and Registrar
shall not have been delivered to the Bank within thirty 30 days after the Bank gives notice of
resignation, the Bank may petition any court of competent jurisdiction at the expense of the Issuer
for the appointment of a successor Paying Agent and Registrar. In the event of resignation of the
Bank as Paying Agent and Registrar, upon the written request of the Issuer and upon payment of
all amounts owing to the Bank hereunder the Bank shall deliver to the Issuer or its designee all
funds in the Account and unauthenticated Bonds and a copy of the Bond Register. The provisions
of Section 2.02 and Section 5.07 hereof shall survive and remain in full force and effect following
the termination of this Agreement.
Section 6.11. Governing Law and Venue.
This Agreement shall be construed in accordance with and shall be governed by the laws
of the State of Florida, with venue for any action in Pinellas County, Florida.
Section 6.12. Documents to be delivered to Bank.
At the time of the Bank's appointment as Paying Agent and Registrar, the Issuer shall
deliver to the Bank the following documents: (a) a specimen Bond; (b) a copy of the opinion of
bond counsel provided to the Issuer in connection with the issuance of the Bonds; and (c) such
other information that the Bank may request.
Section 6.13. Patriot Act Compliance.
To help the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record information that identifies
each person who opens an account. For a non -individual person such as a business entity, a charity,
a trust or other legal entity we will ask for documentation to verify its formation and existence as
a legal entity. The Bank may also ask to see financial statements, licenses, identification, and
authorization documents from individuals claiming authority to represent the entity or other
relevant documentation.
Section 6.14 Non -appropriation.
The obligations of the Issuer as to funding for any cost and expenses pursuant to this
Agreement shall be limited to an obligation in any given year to budget, appropriate and pay from
legally available funds, after monies for essential Issuer services have been budgeted and
appropriated, sufficient monies for the funding that is required during that year.
[Remainder of page intentionally left blank — Signature page follows]
9
IN WITNESS WHEREOF, the Issuer and the Bank have caused this Agreement to be
executed in their respective names by their duly authorized representatives, as of the day and year
first above written, in two counterparts, each of which shall be deemed an original.
CITY OF CLEARWATER, FLORIDA
By:
Name: George N. Cretekos
Title: Mayor
By:
Name: William B. Horne, II
Title: City Manager
ATTEST:
BY:
Rosemarie Call, City Clerk
Approved as to Form:
By:
Pamela K. Akin, City Attorney
[Issuer signature page to Paying Agent and Registrar Agreement]
S-1
U.S. BANK NATIONAL ASSOCIATION
By:
Name: Valerie Barreto
Title: Assistant Vice President
[Bank signature page to Paying Agent and Registrar Agreement]
S-2
EXHIBIT C
FORM OF PRELIMINARY OFFICIAL STATEMENT
Resolution No. 19-37
DRAFT #3: 11/27/19
180-00022.B3
PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER _, 2019
NEW ISSUE - FULL BOOK -ENTRY See "RATINGS" herein
In the opinion of bond counsel, assuming compliance by the City with certain
covenants, under existing statutes, regulations and judicial decisions, the interest on the
Series 2020 Bonds is excluded from gross income for federal income tax purposes of the
holders thereof and is not an item of tax preference for purposes of the federal alternative
minimum tax. See "TAX MATTERS" herein for a description of certain other tax
consequences to holders of the Series 2020 Bonds.
CITY OF CLEARWATER, FLORIDA
Water and Sewer Revenue Refunding Bonds, Series 2020
Dated: Date of Delivery Due: December 1, as shown below
The Water and Sewer Revenue Refunding Bonds, Series 2020 (the "Series 2020
Bonds") of the City of Clearwater, Florida (the "City") are being issued in fully registered
form and, when initially issued, will be registered to Cede & Co., as nominee of The
Depository Trust Company, New York, New York. U.S. Bank National Association,
Orlando, Florida, is acting as the Paying Agent and Registrar for the Series 2020 Bonds.
The Series 2020 Bonds will be purchased in book -entry form only, in the denomination of
$5,000 or any integral multiple thereof. There will be no physical delivery of bond
certificates to individual Bondholders. Interest on the Series 2020 Bonds will be payable
at the rates shown on the inside cover semi-annually beginning on June 1, 2020 and on
each December 1 and June 1 thereafter. Principal of, and premium, if any, on the Series
2020 Bonds will be payable on the dates and in the amounts shown on the inside cover or
upon redemption prior to maturity.
The Series 2020 Bonds will be issued pursuant to the authority of and in full
compliance with (a) the charter of the City, (b) the Constitution and the laws of the State
of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable
provisions of law, and (c) Ordinance No. 3674-84 enacted by the City on August 2, 1984,
as amended and supplemented by Ordinance No. 6915-01, enacted by the City on
November 15, 2001, as further amended and supplemented by Ordinance No. 8620-14,
enacted by the City on December 4, 2014 (as amended, the "Bond Ordinance"), and as
supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the
"Resolution"). See "APPENDIX C - Copies of Bond Ordinance and Resolution" attached
hereto.
Preliminary, subject to change.
The Series 2020 Bonds may be subject to optional and mandatory redemption
prior to maturity as described herein.
The Series 2020 Bonds are being issued for the purposes of (i) currently refunding
and redeeming all of the outstanding principal amount of the City's Water and Sewer
Revenue Refunding Bond, Series 2014 and (ii) paying the costs of issuing the Series 2020
Bonds.
The Series 2020 Bonds and the interest thereon are payable from and secured by a
lien on the Pledged Revenues, which consist of the Net Revenues derived from the
operation of the City's water, sewer and reclaimed water utility system (the "System"), as
further described herein. The lien of the Series 2020 Bonds on the Net Revenues of the
System is on parity with the holders of the City's outstanding Water and Sewer Revenue
Refunding Bonds, Series 2011, Water and Sewer Revenue Refunding Bonds, Series 2017,
and Water and Sewer Revenue Refunding Bond, Series 2017B (collectively, the "Parity
Bonds"), as further described herein.
Neither the Series 2020 Bonds nor the interest thereon constitute a general
obligation or indebtedness of the City within the meaning of any constitutional, statutory
or charter provision or limitation. No owner or owners of any Series 2020 Bonds shall
ever have the right to compel the exercise of the ad valorem taxing power of the City, or
any other taxing power in any form on any real or personal property of the City, to pay the
Series 2020 Bonds or the interest thereon. The City shall not be obligated to pay the Series
2020 Bonds or any interest thereon except from the Net Revenues of the System, in the
manner provided in the Bond Ordinance on parity with the Parity Bonds.
This cover page contains certain information for quick reference only. It is not a
summary of the issue. Investors must read this entire Official Statement to obtain
information essential to the making of an informed investment decision.
The Series 2020 Bonds are offered when, as and if issued and accepted by the
Underwriter subject to the approval of legality by Bryant Miller Olive P.A., Tallahassee,
Florida, Bond Counsel. Certain other legal matters will be passed upon for the City by
Pamela K Akin, Esquire, City Attorney, and by Nabors, Giblin & Nickerson, P.A., Tampa,
Florida, Disclosure Counsel to the City. Nelson Mullins Riley & Scarborough LLP,
Orlando, Florida is serving as counsel to the Underwriter. Public Resources Advisory
Group, Inc., St. Petersburg, Florida is serving as Financial Advisor to the City. It is
expected that the Series 2020 Bonds, in definitive book -entry form, will be available for
delivery through DTC in New York, New York on or about , 2020.
, 2020
RAYMOND JAMES
$
CITY OF CLEARWATER, FLORIDA
Water and Sewer Revenue Refunding Bonds, Series 2020
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES
AND INITIAL CUSIP NUMBERS
$ Serial Bonds
Maturity Principal Interest Initial CUSIP
(December 1)* Amount Rate Yield Price Numbert
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
$ % Term Bond, Due December 1, 20 Yield % Price CUSIP
* Preliminary, subject to change.
t Neither the City nor the Underwriter is responsible for the use of CUSIP numbers
referenced herein nor is any representation made by the City or the Underwriter as to
their correctness. CUSIP numbers are included herein solely for the convenience of the
readers of this Official Statement.
CITY OF CLEARWATER, FLORIDA
ELECTED OFFICIALS
MAYOR
George N. Cretekos
CITY COUNCIL
Jay Polglaze
Dr. Bob Cundiff
David Allbritton
Hoyt Hamilton
APPOINTED OFFICIALS
William B. Horne, II, City Manager
Michael Delk, Assistant City Manager
Micah Maxwell, Assistant City Manager
Pamela K. Akin, Esq., City Attorney
Brian J. Ravins, CGFO, Finance Director
David Porter, Public Utilities Director
BOND COUNSEL
Bryant Miller Olive P.A.
Tallahassee, Florida
FINANCIAL ADVISOR
Public Resources Advisory Group, Inc.
St. Petersburg, Florida
DISCLOSURE COUNSEL
Nabors, Giblin & Nickerson, P.A.
Tampa, Florida
REGISTRAR AND PAYING AGENT
U.S. Bank National Association
Orlando, Florida
RATE CONSULTANT
Stantec Consulting Services Inc.
Tampa, Florida
111
NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS OFFICIAL
STATEMENT, IN CONNECTION WITH THE OFFERING OF THE SERIES 2020
BONDS DESCRIBED HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE CITY OR THE UNDERWRITER. THIS OFFICIAL
STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL THE SERIES 2020
BONDS OR A SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THE SERIES 2020 BONDS BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE
SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH
HEREIN HAS BEEN FURNISHED BY THE CITY AND BY OTHER SOURCES
WHICH ARE BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO
ACCURACY OR COMPLETENESS, AND IS NOT TO BE CONSTRUED AS A
REPRESENTATION OR CONTRACT BY THE CITY OR THE UNDERWRITER. THE
INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO
CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THE OFFICIAL
STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE CITY SINCE THE DATE HEREOF.
THE SERIES 2020 BONDS HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, NOR HAS THE BOND ORDINANCE BEEN QUALIFIED
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE
UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR
QUALIFICATION OF THE SERIES 2020 BONDS IN ACCORDANCE WITH
APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY,
IN WHICH THE SERIES 2020 BONDS HAVE BEEN REGISTERED OR QUALIFIED
AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN
CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION
THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE
PASSED UPON THE MERITS OF THE SERIES 2020 BONDS OR THE ACCURACY
OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION
TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS
OFFICIAL STATEMENT PURSUANT TO ITS RESPONSIBILITIES TO INVESTORS
UNDER THE FEDERAL SECURITIES LAWS, BUT THE UNDERWRITER DOES
NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION.
THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A
CONTRACT WITH THE PURCHASERS OF THE SERIES 2020 BONDS.
STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT WHICH INVOLVE
ESTIMATES, FORECASTS OR MATTERS OF OPINION, WHETHER OR NOT
EXPRESSLY SO DESCRIBED IN THIS OFFICIAL STATEMENT, ARE INTENDED
SOLELY AS SUCH AND ARE NOT TO BE CONSTRUED AS REPRESENTATIONS
OF FACTS. THE INFORMATION AND EXPRESSIONS OF OPINION CONTAINED
IN THIS OFFICIAL STATEMENT ARE SUBJECT TO CHANGE WITHOUT NOTICE
AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE THE
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
CITY SINCE THE DATE OF THIS OFFICIAL STATEMENT OR THE EARLIEST
DA 1'E AS OF WHICH SUCH INFORMATION IS GIVEN.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE SERIES 2020 BONDS AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE
UNDERWRITER MAY OFFER AND SELL THE SERIES 2020 BONDS TO CERTAIN
DEALERS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING
PRICES STATED ON THE INSIDE COVER PAGE OF THIS OFFICIAL STATEMENT,
AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO
TIME BY THE UNDERWRITER.
CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY
REFERENCE IN THIS OFFICIAL STATEMENT CONSTITUTE "FORWARD-
LOOKING STATEMENTS." SUCH STATEMENTS GENERALLY ARE
IDENTIFIABLE BY THE TERMINOLOGY USED, SUCH AS "PLAN," "EXPECT,"
"ESTIMATE," "BUDGET" OR OTHER SIMILAR WORDS. SUCH FORWARD-
LOOKING STATEMENTS INCLUDE BUT ARE NOT LIMITED TO CERTAIN
STATEMENTS CONTAINED IN THE INFORMATION UNDER THE CAPTIONS
"ESTIMATED SOURCES AND USES OF FUNDS" AND "THE WATER AND SEWER
SYSTEM" IN THIS OFFICIAL STATEMENT. THE ACHIEVEMENT OF CERTAIN
RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS
EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH
SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED
UNDER "CONTINUING DISCLOSURE" HEREIN.
THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED
FINAL BY THE CITY FOR PURPOSES OF RULE 15C2-12 ISSUED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR
CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE
15C2 -12(B)(1).
TABLE OF CONTENTS
Page
INTRODUCTION 1
PLAN OF REFUNDING 3
DESCRIPTION OF THE SERIES 2020 BONDS 3
General 3
Redemption Provisions 4
Notice of Redemption 5
Book -Entry Only System 5
SECURITY FOR THE SERIES 2020 BONDS 8
Net Revenues 8
Rate Covenant 9
Disposition of Revenues 9
Reserve Account 12
Additional Bonds 13
Series 2020 Bonds Not a Debt of the City 14
Parity Bonds 15
DEBT SERVICE REQUIREMENTS 16
ESTIMATED SOURCES AND USES OF FUNDS 17
THE WATER AND SEWER SYSTEM 17
Management 17
Water System 19
Sewer System 21
Reclaimed Water System 24
Historical Debt Service Coverage 26
Future Water and Sewer System Capital Improvements 26
Regulation and Permitting 27
Establishment of Rates, Fees and Charges; Rate Study Recommendations 28
No Mortgage or Sale of the System 29
No Free Service 29
Mandatory Connection 30
Climate Change 30
Cybersecurity 30
PENSION AND OTHER POST -EMPLOYMENT BENEFIT LIABILITIES 31
Defined Benefit Pension Plans 31
Other Post -Employment Benefits (OPEB) 32
FINANCIAL STATEMENTS 33
INVESTMENT POLICY OF THE CITY 33
LITIGATION 34
RATINGS 34
TAX MATTERS 34
General 34
i
Information Reporting and Backup Withholding 36
Other Tax Matters 36
Tax Treatment of Original Issue Discount 36
Tax Treatment of Bond Premium 37
LEGAL OPINIONS 38
ENFORCEABILITY OF REMEDIES 38
FINANCIAL ADVISOR 38
UNDERWRITING 39
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS 39
CONTINGENT AND OTHER FEES 39
CONTINUING DISCLOSURE 40
CERTIFICATE CONCERNING OFFICIAL STATEMENT 40
MISCELLANEOUS 41
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
APPENDICES
General Information Regarding the City
Comprehensive Annual Financial Report of the City for the Fiscal Year
Ended September 30, 2018
Copies of Bond Ordinance and Resolution
Form of Continuing Disclosure Agreement
Form of Bond Counsel Opinion
Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue
Sufficiency Analysis (Rate Study)
Schedule of Rates, Fees and Charges
ii
OFFICIAL STATEMENT
CITY OF CLEARWATER, FLORIDA
Water and Sewer Revenue Refunding Bonds,
Series 2020
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and the
appendices, is to provide information concerning the City of Clearwater, Florida (the
"City") and the City's $ * Water and Sewer Revenue Refunding Bonds,
Series 2020 (the "Series 2020 Bonds"). For certain general information relating to the City,
see "APPENDIX A — General Information Regarding the City" attached hereto.
The Series 2020 Bonds are being issued for the purposes of (i) currently refunding
and redeeming all of the outstanding principal amount of the City's Water and Sewer
Revenue Refunding Bond, Series 2014 (the "Refunded Bond") and (ii) paying the costs of
issuing the Series 2020 Bonds.
The Series 2020 Bonds are payable from and secured by a lien on the Pledged
Revenues, which consist of the Net Revenues of the City's water, sewer and reclaimed
water system (the "System"), as further described herein. The lien of the Series 2020 Bonds
on the Pledged Revenues is on parity with the lien of the holders of $3,940,000 outstanding
principal amount of the City's Water and Sewer Revenue Refunding Bonds, Series 2011
(the "Series 2011 Bonds"), $69,270,000 outstanding principal amount of the City's Water
and Sewer Revenue Refunding Bonds, Series 2017 (the "Series 2017 Bonds") and
$28,705,000 outstanding principal amount of the City's Water and Sewer Revenue
Refunding Bond, Series 2017B (the "Series 2017B Bond" and collectively with the
Series 2011 Bonds and the Series 2017 Bonds, the "Parity Bonds"), as further described
herein.
The Series 2020 Bonds will be issued pursuant to the authority of and in full
compliance with (a) the charter of the City, (b) the Constitution and the laws of the State
of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable
provisions of law, and (c) Ordinance No. 3674-84 enacted by the City on August 2, 1984,
as amended and supplemented by Ordinance No. 6915-01, enacted by the City on
November 15, 2001, as further amended and supplemented by Ordinance No. 8620-14,
enacted by the City on December 4, 2014 (as amended, the "Bond Ordinance"), and as
supplemented by Resolution No. 19-37, adopted by the City on December 19, 2019 (the
* Preliminary, subject to change.
"Resolution"). See "APPENDIX C — Copies of Bond Ordinance and Resolution" attached
hereto.
Neither the Series 2020 Bonds nor the interest thereon constitute a general
obligation or indebtedness of the City within the meaning of any constitutional, statutory
or charter provision or limitation. No owner or owners of any Series 2020 Bonds shall
ever have the right to compel the exercise of the ad valorem taxing power of the City, or
any other taxing power in any form on any real or personal property of the City, to pay the
Series 2020 Bonds or the interest thereon. The City shall not be obligated to pay the Series
2020 Bonds or any interest thereon except from the Pledged Revenues, in the manner
provided in the Bond Ordinance on parity with the Parity Bonds.
The City covenants in the Bond Ordinance to fix, establish and maintain such rates,
and collect such fees, rentals and other charges for the services and facilities of the System
and revise the same from time to time whenever necessary as will always provide Gross
Revenues in each Fiscal Year sufficient to pay the Cost of Operation and Maintenance of
the System in such Fiscal Year, one hundred fifteen percent (115%) of the Bond Service
Requirement becoming due in such Fiscal Year on the outstanding Series 2020 Bonds and
on all outstanding Additional Bonds and Parity Bonds, plus one hundred percent (100%)
of all reserve and other payments required to be made pursuant to the Bond Ordinance.
The City may issue Additional Bonds, payable on a parity from the Pledged
Revenues with the Series 2020 Bonds and the Parity Bonds, for the purpose of refunding
all or a portion of the outstanding Bonds upon receipt of a certificate of the Finance Director
setting forth the annual debt service (i) for the Bonds then Outstanding and (ii) for all Series
of Bonds to be immediately Outstanding thereafter and stating that the Bond Service
Requirement in any year pursuant to (ii) above is not greater than the Bond Service
Requirement in the corresponding year set forth pursuant to (i) above. Additional Bonds
may also be issued for the purpose of financing the cost of extensions, additions and
improvements to the System and for the acquisition and construction of, and extensions
and improvements to, sewer and/or water or reclaimed water systems which are to be
consolidated with the System and operated as a single combined utility, provided that,
among other requirements, certain earnings tests relating historical Net Revenues to the
Maximum Bond Service Requirement of all Bonds Outstanding after the issuance of such
Additional Bonds can be met. Such historical Net Revenues may be adjusted by the
Consulting Engineer as provided in the Bond Ordinance. See "SECURITY FOR THE
SERIES 2020 BONDS —Additional Bonds" herein. It is anticipated that the City will issue
Additional Bonds in the future to provide additional funds needed for the capital
improvement program. See "THE WATER AND SEWER SYSTEM — Future Water and
Sewer System Capital Improvements" herein and "APPENDIX F — Fiscal Year 2019
Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached
hereto.
2
All capitalized terms used in this Official Statement that are defined in the Bond
Ordinance and not defined herein shall have the respective meanings set forth in the Bond
Ordinance, a copy of which appears in composite APPENDIX C attached hereto.
The references, excerpts and summaries of all documents referred to herein do not
purport to be complete statements of the provisions of such documents, and reference is
directed to all such documents for full and complete statements of all matters of fact
relating to the Series 2020 Bonds, the security for the payment of the Series 2020 Bonds,
and the rights and obligations of holders thereof. The information contained in this Official
Statement involving matters of opinion or of estimates, whether or not so expressly stated,
are set forth as such and not as representations of fact, and no representation is made that
any of the estimates will be realized. Neither this Official Statement nor any statement
which may have been made verbally or in writing is to be construed as a contract with the
holders of the Series 2020 Bonds.
PLAN OF REFUNDING
On the date of issuance of the Series 2020 Bonds, a portion of the proceeds of the
Series 2020 Bonds will be transferred to the holder of the Refunded Bond (the "2014
Bondholder") in an amount sufficient to pay and redeem the Refunded Bond at the
redemption price of 100% of the principal amount thereof plus accrued interest to the date
of redemption. Upon such transfer, the Refunded Bond will be deemed paid and the pledge
of the Pledged Revenues created by or pursuant to the Bond Ordinance with respect to such
Refunded Bond and all covenants, agreements and other obligations of the City to the 2014
Bondholder, shall cease, terminate and become void and be discharged and satisfied.
DESCRIPTION OF THE SERIES 2020 BONDS
General
The Series 2020 Bonds will be dated the date of their initial issuance and delivery
and will bear interest at the rates and mature on December 1 in the amounts and at the times
set forth on the inside cover page of this Official Statement. The Series 2020 Bonds are to
be issued as fully registered bonds in denominations of $5,000 or integral multiples
thereof. Interest on the Series 2020 Bonds will be payable on June 1, 2020 and
semiannually thereafter on December 1 and June 1 of each year to the person appearing on
the registration books of the City as the registered Holder thereof, by check or draft mailed
to such registered Holder at his address as it appears on such registration books or by wire
transfer to Holders of $1,000,000 or more in principal amount of the Series 2020 Bonds.
The Series 2020 Bonds shall bear interest from the interest payment date next
preceding the date on which it is authenticated, unless authenticated on an interest payment
3
date, in which case it shall bear interest from such interest payment date, or, unless
authenticated prior to the first interest payment date, in which case it shall bear interest
from its date; provided, however, that if at the time of authentication payment of any
interest which is due and payable has not been made, such Series 2020 Bond shall bear
interest from the date to which interest shall have been paid.
Principal of, and premium if any, are payable at maturity, or upon redemption prior
to maturity, upon presentation and surrender thereof at the corporate trust office of the
Paying Agent. U.S. Bank National Association, Orlando, Florida, is acting as Paying
Agent and Registrar for the Series 2020 Bonds. No provision of the Bond Ordinance or
Resolution provides for an adjustment of the interest rate borne by the Series 2020 Bonds
in the event the interest on the Series 2020 Bonds should become included in gross income
for federal income tax purposes.
The Series 2020 Bonds will be initially issued in the form of a single fully registered
Bond for each maturity of the Series 2020 Bonds. Upon initial issuance, the ownership of
each such Series 2020 Bond will be registered in the registration books kept by the
Registrar in the name of Cede & Co., as nominee of The Depository Trust Company, New
York, New York ("DTC"). While held in book -entry form, all payments of principal,
interest and premium, if any, on the Series 2020 Bonds will be made to DTC or the DTC
nominee as the sole registered owner of the Series 2020 Bonds and payments to Beneficial
Owners will be the responsibility of DTC and the DTC Participants. See "— Book -Entry
Only System" below.
Redemption Provisions
Optional Redemption
The Series 2020 Bonds maturing on December 1, 20_ and thereafter will be subject
to optional redemption prior to their respective maturity dates beginning on December 1,
20_ at 100% of the par value thereof.
Mandatory Sinking Fund Redemption
The Series 2020 Bonds maturing on December 1, 20 will be subject to mandatory
redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem
appropriate, at a redemption price equal to par plus accrued interest to the redemption date,
on December 1, 20_, and each December 1 thereafter, from amounts deposited in the
Bond Amortization Account in the Sinking Fund established by the Bond Ordinance, in
the years and amounts as follows:
4
Year Amount
* Maturity
Notice of Redemption
Notice of redemption, identifying the Series 2020 Bonds or portions thereof called
for redemption (i) shall be filed with the Paying Agent and any Registrar; and (ii) shall be
mailed by the Registrar, first-class mail, postage prepaid, to all registered owners of the
Series 2020 Bonds to be redeemed not more than sixty (60) days and not less than thirty
(30) days prior to the date fixed for redemption at their addresses as they appear on the
registration books to be maintained in accordance with the provisions of the Bond
Ordinance. Failure to give such notice by mailing to any owner of Series 2020 Bonds, or
any defect therein, shall not affect the validity of any proceeding for the redemption of
other Series 2020 Bonds.
Notice having been mailed and filed in the manner and under the conditions
described above, the Series 2020 Bonds or portions of Series 2020 Bonds so called for
redemption shall, on the redemption date designated in such notice, become and be due
and payable at the redemption price provided for redemption of such Series 2020 Bonds or
portions of Series 2020 Bonds on such date. On the date so designated for redemption,
notice having been mailed and filed and moneys for payment of the redemption price being
held in separate accounts in trust for the holders of the Series 2020 Bonds or portions
thereof to be redeemed, all as provided in the Bond Ordinance, interest on the Series 2020
Bonds or portions of Series 2020 Bonds so called for redemption shall cease to accrue,
such Series 2020 Bonds and portions of Series 2020 Bonds shall cease to be entitled to any
lien, benefit or security under the Bond Ordinance, and the holders or Registered Owners
of such Series 2020 Bonds or portions of Series 2020 Bonds, shall have no rights in respect
thereof, except the right to receive payment of the redemption price thereof.
Any notice of redemption of Series 2020 Bonds may be conditioned upon the
deposit of sufficient funds to pay the Series 2020 Bonds subject to redemption on the
redemption date.
Book -Entry Only System
THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK -
ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM DTC AND NEITHER THE
CITY NOR THE UNDERWRITER MAKES ANY REPRESENTATION OR
WARRANTY OR TAKES ANY RESPONSIBILITY FOR THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION.
5
DTC will act as securities depository for the Series 2020 Bonds. The Series 2020
Bonds will be issued as fully -registered bonds registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One fully -registered bond certificate will be issued for each
maturity of the Series 2020 Bonds and will be deposited with DTC.
DTC, the world's largest securities depository, is a limited -purpose trust company
organized under the New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues
of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market
instruments (from over 100 countries) that DTC's participants (the "Direct Participants")
deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants
of sales and other securities transactions in deposited securities, through electronic
computerized book -entry transfers and pledges between Direct Participants' accounts. This
eliminates the need for physical movement of securities certificates. Direct Participants
include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary
of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of
its regulated subsidiaries. Access to the DTC system is also available to others such as
both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (the "Indirect Participants"). DTC has a Standard
& Poor's rating of AA+. The DTC rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at
www.dtcc.com.
Purchases of the Series 2020 Bonds under the DTC system must be made by or
through Direct Participants, which will receive a credit for such Series 2020 Bonds on
DTC's records. The ownership interest of each actual purchaser of each Series 2020 Bond
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from
the Direct or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Series 2020 Bonds are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on
behalf of the Beneficial Owners. Beneficial Owners will not receive certificates
6
representing their ownership interests in the Series 2020 Bonds, except in the event that
use of the book -entry system for the Series 2020 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2020 Bonds deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee, Cede &
Co., or such other name as may be requested by an authorized representative of DTC. The
deposit of Series 2020 Bonds with DTC and their registration in the name of Cede & Co.
or such other DTC nominee do not effect any change in beneficial ownership. DTC has
no knowledge of the actual Beneficial Owners of the Series 2020 Bonds; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Series 2020
Bonds are credited, which may or may not be the Beneficial Owners. The Direct and
Indirect Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them, subject
to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Series 2020 Bonds are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each
Direct Participant in such bonds, as the case may be, to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to the Series 2020 Bonds unless authorized by a Direct Participant in
accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Series 2020 Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Series 2020
Bonds will be made to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts,
upon DTC's receipt of funds and corresponding detail information from the City or the
Registrar on the payable date in accordance with their respective holdings shown on DTC's
records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the responsibility of
such Participant and not of DTC, the Registrar or the City, subject to any statutory and
regulatory requirements as may be in effect from time to time. Payment of redemption
proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as
may be requested by an authorized representative of DTC) is the responsibility of the City
and/or the Paying Agent for the Series 2020 Bonds. Disbursement of such payments to
7
Direct Participants will be the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners will be the responsibility of the Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to
the Series 2020 Bonds at any time by giving reasonable notice to the City. Under such
circumstances, in the event that a successor securities depository is not obtained, Series
2020 Bond certificates are required to be printed and delivered.
The City may decide to discontinue use of the book -entry only transfers through
DTC (or a successor securities depository). In that event, Series 2020 Bond certificates
will be printed and delivered to DTC.
SECURITY FOR THE SERIES 2020 BONDS
Net Revenues
The principal of, premium, if any, and interest on the Series 2020 Bonds are payable
solely from and secured by an irrevocable first lien upon and pledge of the Pledged
Revenues, which consist of the Net Revenues derived and collected by the City from the
operation of the System, on a parity with the Parity Bonds and Additional Bonds hereafter
issued. "Net Revenues" is defined in the Bond Ordinance to mean the Gross Revenues
after deduction of the Cost of Operation and Maintenance. "Gross Revenues" includes all
income or earnings, including any income from the investment of funds, derived by the
City from the operation of the System. "Cost of Operation and Maintenance" includes the
current expenses, paid or accrued, of operation, maintenance and repair of the System as
calculated in accordance with sound accounting practice, but does not include any reserves
for renewals and replacements, for extraordinary repairs or any allowance for depreciation
or amortization. See "THE WATER AND SEWER SYSTEM — Historical Debt Service
Coverage" herein.
The Series 2020 Bonds do not constitute a general indebtedness of the City within
the meaning of any constitutional, statutory or charter provision or limitation. The
principal of and interest on the Series 2020 Bonds and all required reserve and other
payments shall be made solely from the Pledged Revenues, which includes only the Net
Revenues of the System. The City shall never be required to levy ad valorem taxes on any
property therein to pay the principal of and interest on the Series 2020 Bonds or to make
any of the required debt service, reserve or other payments, and any failure to pay the Series
2020 Bonds shall not give rise to a lien upon any property of or in the City, except the Net
Revenues of the System.
8
Rate Covenant
In the Bond Ordinance, the City has covenanted to fix, establish and maintain such
rates and collect such fees, rentals and other charges for the services and facilities of the
System and revise the same from time to time whenever necessary, as will always provide
Gross Revenues in each Fiscal Year sufficient to pay the Cost of Operation and
Maintenance of the System in such Fiscal Year, one hundred fifteen percent (115%) of the
Bond Service Requirement becoming due in such Fiscal Year on the outstanding Series
2020 Bonds and on all outstanding Additional Bonds and Parity Bonds, plus one hundred
percent (100%) of all reserve and other payments required to be made pursuant to the Bond
Ordinance. Such rates, fees, rentals and other charges shall not be reduced so as to be
insufficient to provide Gross Revenues for such purposes. See "THE WATER AND
SEWER SYSTEM — Historical Debt Service Coverage" herein.
Disposition of Revenues
The entire Gross Revenues shall upon receipt thereof be deposited in the Revenue
Fund created and established by the Bond Ordinance. Such Revenue Fund shall constitute
a trust fund for the purposes provided in the Bond Ordinance and shall 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 Bond Ordinance.
All funds at any time remaining on deposit in the Revenue Fund shall be disposed
of on or before the twentieth day of each month for so long as any Bonds remain
outstanding, only in the following manner and in the following order of priority:
(1) Funds shall first be used for deposit into the Operation and Maintenance
Fund, which was established by the Bond Ordinance, of such sums as are necessary for the
Cost of Operation and Maintenance, for the next ensuing month.
(2) A sum as shall be determined by supplemental resolution of the City shall be
deposited into the Construction Fund and used for the purpose of paying Project Costs.
(3) From the moneys remaining in the Revenue Fund, the City shall next deposit
into the Sinking Fund created by the Bond Ordinance, such sums as will be sufficient to
pay (a) one-sixth (1/6) of all interest becoming due on the Bonds on the next semi-annual
interest payment date; (b) commencing in the first month which is twelve (12) months or
six (6) months prior to the first annual or semi-annual maturity date, respectively, of any
Serial Bonds, one -twelfth (1/12) or one-sixth (1/6), respectively, of the amount of Serial
Bonds which will become due and payable on the next annual or semiannual principal
maturity date, respectively, and (c) one -twelfth (1/12) of the Amortization Installment
required to be made on the next annual payment date or one-sixth (1/6) of the Amortization
Installment required to be made on the next semi-annual payment date into a "Bond
Amortization Account", created and established in the Sinking Fund by the Bond
9
Ordinance. Such payments shall be credited to a separate special account for each series
of Term Bonds outstanding, and if there shall be more than one stated maturity for Term
Bonds of a series, then into a separate special account in the Sinking Fund for each such
separate maturity of Term Bonds. The funds and investments in each such separate account
shall be pledged solely to the payment of principal of the Term Bonds of the series or
maturity within a series for which it is established and shall not be available for payment,
purchase or redemption of Term Bonds of any other series or within a series, or for transfer
to the Sinking Fund to make up any deficiencies in required payments therein. The
Amortization Installments may be due either annually or semiannually, but in any event,
the required payments as set forth above shall be made monthly commencing in the first
month which is six (6) months or twelve (12) months, as the case may be, prior to the date
on which the Amortization Installment is required to be made pursuant to (c) above.
Upon the sale of any series of Term Bonds, the City shall by resolution, establish
the amounts and maturities of such Amortization Installments for each series, and if there
shall be more than one maturity of Term Bonds within a series, the Amortization
Installments for the Term Bonds of each maturity. In the event the moneys deposited for
retirement of a maturity of Term Bonds are required to be invested, in the manner provided
below, the Amortization Installments may be stated in terms of either the principal amount
of the investments to be purchased on, or the cumulative amounts of the principal amount
of investments required to have been purchased by, the payment date of such Amortization
Installment.
Moneys on deposit in each of the separate special accounts in the Bond
Amortization Account shall be used for the open market purchase or the redemption of
Term Bonds 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 resolution establishing
the Amortization Installments for any series or maturity of Term Bonds may limit the use
of moneys to any one or more of the uses set forth in the preceding sentence and may
specify the type or types of investments permitted under the Bond Ordinance to be
purchased.
(4) Moneys remaining in the Revenue Fund shall next be applied by the City to
maintain either the Reserve Account or a separate Reserve Subaccount, which Reserve
Account was created and established by the Bond Ordinance and which each Reserve
Subaccount is created by subsequent Resolution relating to a specific Series of Bonds
adopted prior to the issuance of such Bonds, in a sum equal to the Reserve Requirement
for each applicable Series of Bonds, all or a portion of which sum may be initially provided
from the proceeds of the sale of the respective Series of Bonds and/or other moneys of the
City. The City shall thereafter deposit into said Reserve Account or Reserve Subaccount,
as applicable, an amount equal to one -twelfth (1/12) of twenty percent (20%) of the
difference between the amount, if any, so deposited upon the delivery of the Bonds and the
10
amount of the Reserve Requirement for the applicable Series of Bonds. No further
payments shall be required to be made into such Reserve Account or Reserve Subaccount,
as applicable, when there has been deposited therein and as long as there shall remain on
deposit therein a sum equal to the Reserve Requirement on all applicable Series of
outstanding Bonds becoming due in any ensuing Fiscal Year.
Any withdrawals from the Reserve Account or a Reserve Subaccount shall be
subsequently restored from the first moneys available in the Revenue Fund after all
required current payments into the Sinking Fund and into the Reserve Account and each
Reserve Subaccount, as applicable, including all deficiencies for prior payments into the
Sinking Fund, have been made in full.
Moneys in the Reserve Account or a Reserve Subaccount, as applicable, shall be
used only for the purpose of the payment of maturing principal (including Amortization
Installments) of or interest on the Series of Bonds secured by such Reserve Account or
Reserve Subaccount, as applicable, when the moneys in the Sinking Fund and allocated to
such Series of Bonds are insufficient therefor, and for no other purpose. Upon the issuance
by the City of any Additional Bonds under the terms, limitations and conditions provided
in the Bond Ordinance, the payments into the Reserve Account or Reserve Subaccount, as
applicable, shall be increased so that the amount on deposit therein shall be equal to the
Reserve Requirement established for such Series of Additional Bonds in accordance with
the subsequent Resolution authorizing such Series of Additional Bonds.
Whenever the amount on deposit in the Reserve Account or any Reserve
Subaccount exceeds the Reserve Requirement applicable to such Reserve Account or
Reserve Subaccount, the excess may be withdrawn and deposited into the Sinking Fund to
pay debt service on the respective Series of Bonds.
The City shall not be required to make any further payments into the Sinking Fund
or into the Reserve Account or any Reserve Subaccount when the aggregate amount of
moneys in the Sinking Fund and the Reserve Account or any Reserve Subaccount, as
applicable, is at least equal to the aggregate principal amount of Bonds then outstanding
and secured by the Sinking Fund and the respective Reserve Account or Reserve
Subaccount, plus the amount of interest then due or thereafter to become due on the
respective Series of Bonds then outstanding.
Notwithstanding the foregoing provisions, in lieu of the required deposits of
Revenues into the Reserve Account, the City may cause to be deposited into the Reserve
Account or a Reserve Subaccount a surety bond or an insurance policy issued by a
reputable and recognized insurer for the benefit of the Bondholders of the Series of Bonds
to be secured by such Reserve Account or Reserve Subaccount in an amount equal to the
difference between the Reserve Requirement for such Series of Bonds and the sums then
on deposit in the applicable Reserve Account or Reserve Subaccount, if any, which surety
bond or insurance policy shall be payable (upon the giving of notice as required thereunder)
11
on any interest payment date on which a deficiency exists which cannot be cured by funds
in any other account held pursuant to the Bond Ordinance and available for such purpose.
The insurer providing such surety bond or insurance policy shall be an insurer whose
municipal bond insurance policies insuring the payment, when due, of the principal of and
interest on municipal bond issues results in such issues being rated in one of the three
highest rating categories by Standard & Poor's Corporation or Moody's Investors Service,
Inc., or their successors. If a disbursement is made from a surety bond or an insurance
policy provided pursuant to this paragraph, the City shall be obligated to either reinstate
the maximum limits of such surety bond or insurance policy immediately following such
disbursement or to deposit into the Reserve Account or Reserve Subaccount, as applicable,
as herein provided in this paragraph for restoration of withdrawals from the Reserve
Account or a Reserve Subaccount, as applicable, funds in the amount of the disbursement
made under such policy, or a combination of such alternatives.
(5) The City shall next apply and deposit the moneys in the Revenue Fund into
the Renewal and Replacement Fund created by the Bond Ordinance. The City shall deposit
into such Renewal and Replacement Fund an amount equal to one -twelfth (1/12) of five
percent (5%) of the Gross Revenues of the System for the previous Fiscal Year, or such
other amount as is certified as necessary for the purposes of the Renewal and Replacement
Fund by the Consulting Engineer and as approved by the City Council. The moneys in
said Renewal and Replacement Fund shall be used only for the purpose of paying the cost
of extensions, enlargements or additions to or the replacement of capital assets of the
System and emergency repairs thereto. Such moneys on deposit in such Fund shall also be
used to supplement the Reserve Account if necessary in order to prevent a default in the
payment of the principal of and interest on the Bonds.
(6) To the extent junior lien bonds are issued and outstanding (which
subordinated bonds the City reserves the right to issue), the City shall next apply moneys
in the Revenue Fund to the payment of principal of, redemption premium, if any, and
interest on such subordinated debt of the City.
(7) The balance of any moneys remaining in the Revenue Fund after the above
required payments have been made may either be deposited into either the Renewal and
Replacement Fund or the Sinking Fund, or may be used for the purchase or redemption of
Bonds, or may be used by the City for any lawful purpose of the City.
Reserve Account
The "Reserve Requirement" shall be such amount as determined by subsequent
Resolution of the City relating to a specific Series of Bonds adopted prior to the issuance
of such Bonds, which may not exceed the lesser of (i) the Maximum Bond Service
Requirement, (ii) 125% of the average annual Bond Service Requirement or (iii) the largest
amount as shall not adversely affect the exclusion of interest on the Bonds from gross
income for Federal income tax purposes. The City shall determine by subsequent
12
Resolution relating to a specific Series of Bonds adopted prior to the issuance of such
Bonds whether such Series of Bonds will be secured by the Reserve Account, and if such
Series of Bonds will be secured by a Reserve Account or a Reserve Subaccount, whether
such Series of Bonds will be secured by a separate Series specific Reserve Subaccount or
on a parity with other Series of Bonds in the Reserve Account or a Reserve Subaccount,
and if secured with other Series of Bonds on a parity basis, which Series of Bonds will be
so secured. Pursuant to the Resolution, the Reserve Requirement for the Series 2020 Bonds
shall be $0.00 and the Series 2020 Bonds will not be entitled to any security provided by
any monies in the Reserve Account.
Moneys in the Reserve Account or a Reserve Subaccount, as applicable, shall be
used only for the purpose of the payment of maturing principal (including Amortization
Installments) of or interest on the Series of Bonds secured by such Reserve Account or
Reserve Subaccount, as applicable, when the moneys in the Sinking Fund and allocated to
such Series of Bonds are insufficient therefor, and for no other purpose. Upon the issuance
by the City of any Additional Bonds under the terms, limitations and conditions provided
in the Bond Ordinance, the payments into the Reserve Account or Reserve Subaccount, as
applicable, shall be increased so that the amount on deposit therein shall be equal to the
Reserve Requirement established for such Series of Additional Bonds in accordance with
the subsequent Resolution authorizing such Series of Additional Bonds.
Any withdrawals from the Reserve Account or a Reserve Subaccount shall be
subsequently restored from the first moneys available in the Revenue Fund after all
required current payments into the Sinking Fund and into the Reserve Account and each
Reserve Subaccount, as applicable, including all deficiencies for prior payments into the
Sinking Fund, have been made in full.
Additional Bonds
Additional Bonds, payable on a parity from the Pledged Revenues with the Series
2020 Bonds and all other Outstanding Bonds, may be issued for the purposes of refunding
all or a portion of the outstanding Bonds or financing the cost of extensions, additions and
improvements to the System and for the acquisition and construction of, and extensions,
additions and improvements to, sewer and/or water or reclaimed water systems which are
to be consolidated with the System and operated as a single combined utility. Additional
Bonds, other than for refunding purposes, will be issued only upon compliance with all of
the conditions set forth in the Bond Ordinance, including the following:
(1) There shall have been obtained and filed with the Clerk a certificate of the
Finance Director stating: (a) that the books and records of the City relative to the System
have been audited by a qualified and recognized firm of independent certified public
accountants; (b) based on such audited financial statement, that the amount of the adjusted
Net Revenues derived for the Fiscal Year preceding the date of issuance of the proposed
Additional Bonds or for any twelve (12) consecutive months during the eighteen (18)
13
months immediately preceding the date of issuance of the Additional Bonds with respect
to which such certificate is made, adjusted as herein below provided; and (c) based on such
audited financial statement, that the aggregate amount of such Net Revenues, as adjusted,
for the period for which such Net Revenues are being certified is equal to not less than
120% of the Maximum Bond Service Requirement becoming due in any Fiscal Year
thereafter on (i) all Parity Bonds and the Bonds issued under the Bond Ordinance, if any,
then Outstanding, and (ii) on the Additional Bonds with respect to which such certificate
is made.
(2) Upon recommendation of the Consulting Engineers, the Net Revenues
certified pursuant to (b) in the previous paragraph may be adjusted by including: (a) 100%
of the additional Net Revenues which in the opinion of the Consulting Engineer would
have been derived by the City from rate increases adopted before the Additional Bonds are
issued, if such rate increases had been implemented before the commencement of the
period for which such Net Revenues are being certified, and (b) 100% of the additional Net
Revenues estimated by the Consulting Engineer to be derived during the first full twelve
month period after the facilities of the System are extended, enlarged, improved or added
to with the proceeds of the Additional Bonds with respect to which such certificate is made.
The adjustments described in (b) of this paragraph may only be made if the Net Revenues
as adjusted under (a) of this paragraph for the period for which such Net Revenues are
being certified equals at least 1.00 times the Maximum Bond Service Requirement
becoming due in any Fiscal Year thereafter on (i) all Bonds then outstanding; and (ii) on
the Additional Bonds with respect to which such certificate is made.
The City need not comply with the provisions of paragraph (1) above if and to the
extent the Additional Bonds to be issued are refunding bonds, and if the City shall cause to
be delivered a certificate of the Finance Director setting forth the annual debt service (i)
for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately
Outstanding thereafter and stating that the Bond Service Requirement in any year pursuant
to (ii) above is not greater than the Bond Service Requirement in the corresponding year
set forth pursuant to (i) above.
See "APPENDIX C - Copies of Bond Ordinance and Resolution" attached hereto
and "— Parity Bonds" below.
Series 2020 Bonds Not a Debt of the City
The Series 2020 Bonds shall not be or constitute general indebtedness of the City
within the meaning of any constitutional, statutory or charter provision or limitation, but
shall be payable solely from and secured by a prior lien upon and pledge of the Pledged
Revenues as provided in the Bond Ordinance. No Bondholder shall ever have the right to
compel the exercise of the ad valorem taxing power of the City or taxation in any form of
any real property therein to pay the Series 2020 Bonds or the interest thereon or be entitled
14
to payment of such principal and interest from any other funds of the City except from the
Pledged Revenues in the manner provided in the Bond Ordinance.
Parity Bonds
Upon the issuance of the Series 2020 Bonds, there will be outstanding under the
Bond Ordinance $3,940,000 principal amount of the Series 2011 Bonds, $69,270,000
principal amount of the Series 2017 Bonds and $28,705,000 principal amount of the Series
2017B Bond. The Series 2011 Bonds, Series 2017 Bonds and Series 2017B Bond rank on
parity with the Series 2020 Bonds as to the lien and pledge of the Pledged Revenues and
are referred to collectively as the "Parity Bonds." It is anticipated that the City will continue
to issue Additional Bonds from time to time on parity with all Bonds then outstanding in
order to finance additions, expansions and improvements to the System and to refund
outstanding Bonds. See "THE WATER AND SEWER SYSTEM — Future Water and
Sewer System Capital Improvements" herein and "APPENDIX F — Fiscal Year 2019
Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)" attached
hereto.
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15
Fiscal Year
Ending
September 30
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
DEBT SERVICE REQUIREMENTS
Debt Service
on Outstanding
Parity Bonds')
$ 1,943,485
6,575,240
6,568,530
6,582,880
6,584,880
6,578,685
6,584,110
6,571,155
6,574,760
6,569,615
6,560,780
6,558,070
6,561,115
6,554,790
9,455,050
9,452,775
9,454,500
9,458,500
9,452,900
9,453,700
9,450,300
$153,545,820
Series 2020 Bonds
Total Debt
Principal Interest Total Serviced>(2
(1) Reflects the impact of the refunding of the Refunded Bond; Fiscal Year 2020 payment excludes
debt service paid on December 1, 2019.
(2) Totals may not add due to rounding.
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16
ESTIMATED SOURCES AND USES OF FUNDS
SOURCES
Principal Amount of Series 2020 Bonds
Plus/Less: Net Original Issue Premium/Discount
Other Legally Available Funds (1)
Total Sources
USES
Payment of the Refunded Bond $
Costs of Issuance (2)
Total Uses $
(1) Includes Sinking Fund transfer in the amount of $
(2) Includes Underwriter's discount, financial advisory fees, rating agency fees, printing costs
and other miscellaneous costs of issuance.
THE WATER AND SEWER SYSTEM
Management
The responsibility for the operational activities for the City's Public Utilities
Department, consisting of potable water distribution, sanitary sewer, and reclaimed water
systems, is assigned to the Director of Public Utilities. The Director of Public Utilities
(David W. Porter, P.E.) reports to the Assistant City Manager (Micah Maxwell) who
reports to the City Manager (William B. Horne, II) who is responsible to the City Council
of the City of Clearwater (the "City Council") to administer the policies established by the
City Council.
William B. Horne, II — City Manager
Mr. Horne has been employed by the City as City Manager since 2001. He is a
credentialed City Manager as recognized by the International City/County Management
Association since 2005. Mr. Horne earned his Bachelor of Science in Chemistry from the
University of Tulsa, a Master's in Human Resources Management from Pepperdine
University, and a Masters in Political Science from Auburn University. He has over 40
years of progressive leadership and management experience with documented success in
the area of human resources, training, and operations at various organizational levels. Prior
17
to accepting his position with the City, he was in the United States Air Force retiring with
the rank of Colonel.
Micah Maxwell — Assistant City Manager
Mr. Maxwell joined the City in 2017 as an Assistant City Manager. His duties
include assisting the City Manager in the day to day management of the City by directly
overseeing Finance/Budget, Information Technology, Parks and Recreation, Planning and
Development, Public Utilities, Solid Waste/General Services and the Library.
Mr. Maxwell earned his Bachelor of Arts in Political Science from the University
of Florida in 1999 and a Master's in Public Administration from the University of South
Florida in 2001. Additionally, Mr. Maxwell attended the Senior Executive Institute at the
University of Virginia and is a graduate of the Leadership ICMA program of the
International City/County Management Association. In 2019, Mr. Maxwell was appointed
to serve as President -Elect for the Florida City/County Management Association and has
served on the association's board of directors since 2014.
Mr. Maxwell first worked for the City in 2003 as a Management Intern for City
Manager Bill Horne. Mr. Maxwell left the City to serve as the Assistant to the City
Manager in the neighboring community of Belleair in 2004 and was promoted to Assistant
Town Manager in 2005. In 2006, Micah was hired to be Belleair's Town Manager, a
position he held until 2017 when he accepted his current position with the City.
David Porter — Public Utilities Director
Mr. Porter began his employment with the City in 2010 as the Wastewater
Environmental Technologies Manager. In May of 2015 he was promoted to Public Utilities
Assistant Director and in August of that year he was again promoted to Public Utilities
Director.
Mr. Porter has over 46 years of experience in all facets of utility
operations/maintenance, engineering and administration and has worked with utilities
throughout the United States and the world. For 13 years just prior to joining the City, he
was the owner and principal engineer at an engineering consulting firm that provided
preliminary and final design services, operations/maintenance assistance, regulatory
permitting and compliance services, Public Utilities Commission rate case and quality of
service support to investor owner utilities, forensic engineering and expert witness support
to investor owned utilities, and numerous other services to his clients.
Mr. Porter is a graduate of the University of Massachusetts with a Bachelor of Civil
Engineering (BSCE) degree. He has held wastewater treatment plant operator certification
at the highest levels in Florida since 1981 and Massachusetts since 1973. He became a
Licensed Professional Engineer in Florida in 1985. He is a member of numerous
18
professional organizations related to utility system operations and management. Mr. Porter
has published journal articles and papers and been a featured presenter at professional
conferences during his 46 year career.
Water System
The City's water distribution system consists of approximately 592 miles of water
mains ranging up to 20 inches in diameter and contains numerous interconnections between
piping making larger size mains unnecessary for existing flow conditions. Water storage
within the distribution system consists of a series of six ground level water storage pumping
systems and two elevated tank water storage facilities. The two elevated storage tanks are
currently off-line. Total current water storage capacity currently sits at 23.5 million
gallons.
The water supply for the area served by the System is currently derived from
existing City well fields and the purchase of water from Pinellas County (the "County").
The City currently has 44 Floridan Aquifer wells throughout the service area permitted for
14.3 million gallons per day ("MGD"), each equipped with automatic control systems. The
City operates three potable water plants. Two of these plants, Reverse Osmosis One
("R01") and Reverse Osmosis Two ("RO2"), utilize reverse osmosis treatment plus the
addition of polyphosphate for corrosion control and chlorination/chloramination for
disinfection. The raw water source for RO 1 is water from the upper zone A of the Floridan
aquifer. RO2 treats brackish water from the lower zone A to the semi confining layer
between lower zone A and zone B of the Floridan aquifer. The City also operates one
traditional water treatment plant, Water Treatment Plant Three ("WTP3"), which utilizes
only chlorination/chloramination for disinfection plus polyphosphate for corrosion control.
The raw water source for WTP3 is water from the upper zone A of the Floridan aquifer.
An expansion of RO1 was completed in 2014. ROI has a current capacity of 4.5
MGD of finished water. RO2 was completed and placed into service in June 2015. RO2
has a current capacity of 6.25 MGD of finished water. WTP3 has a current capacity of
12.0 MGD of finished water. In all, the City has the plant capacity to produce up to 22.75
MGD of finished water. In Fiscal Year 2019, the City produced on average approximately
8.645 MGD from City well fields. Converting WTP3 to a reverse osmosis plant is currently
in the design phase, with anticipated completion of the project scheduled for the 2021-2023
time frame. This conversion will provide the City with additional City -produced water
production. In addition, as new and/or rehabilitated wells are placed into operation over
the next two years, RO2 will produce more water, increasing City water production rates.
The City's Fiscal Year 2019 water demand was approximately 11.0 MGD. In order
to fulfill this demand, the City purchased an average of 4.3 MGD from the County. The
City has a bulk water purchase agreement with the County which provides that the County
will supply up to 15 MGD of the City's service area water needs on an as -needed basis.
Supply under the contract commenced on October 1, 2005 and will terminate on September
19
30, 2035. The average purchase over the last five years has been approximately 35% of
the agreed upon amount. The contract rate in Fiscal Year 2019 was $4.1742 per 1,000
gallons. This rate is set by the Pinellas County Board of County Commissioners and is
based on a prorated share of revenue cost requirements of the County water system,
including production and transmission costs required for the supply of water to County
water users. The County has been reliably providing the City with supplemental finished
water supplies for many years with an excellent record of consistently meeting the City's
needs.
The County obtains its water from Tampa Bay Water, a regional water supply
authority ("Tampa Bay Water"). Tampa Bay Water has a contractual obligation to provide
the County with 100% of its water requirements. Currently, Tampa Bay Water produces
approximately 160 MGD of finished water of which the County receives approximately 49
MGD. The County has in the past obtained as high as 70 MGD from Tampa Bay Water.
Tampa Bay Water is the regional water supplier for the entire Tampa Bay area and is made
up of six member governments, which include the counties of Pinellas, Hillsborough, and
Pasco and the cities of New Port Richey, St. Petersburg, and Tampa.
The following chart shows the average daily water flow on an annualized basis over
the past five years:
Source and Volume of Water Pumped
(in MGD, averaged over the Fiscal Year)
Fiscal Year City Wells Coun Total
2015 7.0 5.1 12.1
2016 8.2 3.7 11.7
2017 6.7 5.4 11.4
2018 7.3 5.0 12.3
2019 (unaudited) 7.9 4.2 12.1
Source: The City of Clearwater
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20
years.
The table below illustrates the number of water service customers over the past five
Historical Numbers of Water Service Customers
(as of September 30 of the year indicated)
Fiscal Year
2015
2016
2017
2018
2019 (unaudited)
Source: The City of Clearwater
Water Service Customers
37,018
37,302
37,598
37,773
37,848
The 10 largest water customers in Fiscal Year 2019 based upon revenues produced
are provided in the table below:
Ten Largest Water Customers
Fiscal Year Ended September 30, 2019 (unaudited)
Rank Name of User
1 City of Clearwater
2 Church of Scientology
3 Morton Plant Hospital
4 Pinellas County Schools
5 K&P Clearwater Estate
6 Pinellas County Government
7 Sheraton Sand Key
8 The Sandpearl Resort
9 CP Clearwater
10 Madison Place Clearwater
Total
Source: The City of Clearwater
Revenues Produced
$1,203,026
913,776
804,079
437,889
258,348
240,944
212,417
208,216
187,024
182,288
of Total Revenues
3.18%
2.41
2.12
1.16
0.68
0.64
0.56
0.55
0.49
0.48
$4,648,007 12.28%
Sewer System
The City's sanitary sewage collection and transport system is composed of
approximately 363 miles of gravity mains and 38 miles of force mains, utilizing 75 lift
stations. The age of the various components which make up the City's wastewater
collection and transport system varies from less than one-year old to over 50 years old.
The City has an on-going inspection, repair and replacement program which is utilized to
locate infrastructure that requires repair and replacement. Upon the determination of the
21
need for repair or replacement, such facilities are either lined or replaced in the case of
gravity lines and force mains or repaired or components replaced in the case of lift stations.
As portions of the collection and transport system age to the end of their useful life the City
plans infrastructure replacement to ensure the integrity of the System overall.
Three water reclamation facilities ("WRF") with a combined design capacity of 28.5
MGD provide treatment for the wastewater produced by the City's residents. These three
plants are the Marshall Street WRF (10 MGD capacity), the Northeast WRF (13.5 MGD
capacity) and the East WRF (5.0 MGD capacity).
The Marshall Street WRF was constructed in the 1950's, the East WRF was
constructed in the 1960's and the Northeast WRF was constructed in the 1970's. These
plants have been expanded and upgraded numerous times to their current design capacities
and to add advanced wastewater treatment capabilities. The facilities include a number of
advanced treatment processes, such as nitrogen and phosphorus removal, effluent filtration,
and high rate disinfection. All three facilities produce highly treated reclaimed water for
private, commercial and municipal use. The Northeast WRF and the Marshall Street WRF
also provide for sludge stabilization by anaerobic digestion, sludge thickening and
dewatering by centrifugation. The three facilities are maintained to ensure their continued
operation and performance. Numerous major components at each facility have been
replaced/renewed in the past five years including secondary clarifiers, effluent filters,
electronic controls, emergency generators, process components such as aeration devices
and mixers, and in -plant pumping systems. As facility components reach the end of their
useful life, components are replaced or entire units are replaced.
The City has entered into an Interlocal Agreement with the City of Safety Harbor,
Florida ("Safety Harbor") to share operations and maintenance costs of the Northeast WRF.
Pursuant to the agreement, the City bills Safety Harbor on the basis of usage calculated by
(i) an operating cost charge, which is total cost of operations allocated on the basis of
average use, plus (ii) a capacity cost charge, which is a reimbursement for replacement of
the facility. The Interlocal Agreement was renewed in July of 2018 and expires in July of
2048.
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22
The following table shows the average daily sewage flow on an annualized basis
over the past five years:
Average Daily Sewage Flow
(in MGD, averaged over the Fiscal Year)
Fiscal Year Flow In MGD
2015 13.8
2016 13.5
2017 12.5
2018 12.5
2019 (unaudited) 13.3
Source: The City of Clearwater
years:
The table below illustrates the number of sewer service customers over the past five
Historical Number of Sewer Service Customers
(as of September 30 of the year indicated)
Fiscal Year Sewer Service Customers
2015 33,390
2016 33,763
2017 33,947
2018 33,111
2019 (unaudited) 34,183
Source: The City of Clearwater
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23
The 10 largest sewer customers in Fiscal Year 2019 based upon sewer revenues are
shown in the table below:
Ten Largest Sewer Customers
Fiscal Year Ended September 30, 2019 (unaudited)
Revenues
Rank Name of User Produced % of Total Revenues
1 Morton Plant Hospital $ 856,048 2.00%
2 City of Clearwater 728,654 1.71
3 Church of Scientology 716,132 1.68
4 Pinellas County Schools 559,410 1.31
5 Sheraton Sand Key 269,790 0.63
6 K&P Clearwater Estate 265,461 0.62
7 CP Clearwater, LLC 247,632 0.58
8 Pinellas County Government 232,922 0.55
9 Clearwater Housing Authority 227,342 0.53
10 CCRC — Regency Oaks 225,563 0.53
Total
Source: The City of Clearwater
Reclaimed Water System
$4,328,952 10.14%
The City's reclaimed water system was established in 1988 and expanded in 1998.
It operates under a master reuse permit with allowable distribution of 12 MGD for
beneficial use. The reclaimed system uses treated effluent to produce high quality
reclaimed water at all three water reclamation facilities. The storage capacity is currently
15 million gallons, with five million gallons each at the Northeast WRF, Marshall Street
WRF and Skycrest Reclaimed Water Booster Pump Station.
The reclaimed water system has 141 miles of completed pipeline distribution, which
supplied City customers with 6.1 MGD in Fiscal Year 2019. In addition, pursuant to an
Interlocal Agreement with the County, the reclaimed water system offers 3 MGD for sale
to the County. This Interlocal Agreement was renewed in 2012 and expires in 2037. The
operation of the reclaimed water system has enabled the City to meet various permitting
requirements relating to its wastewater treatment facilities, reduced the number of separate
water meters for irrigation, and has significantly reduced the use of potable water for
irrigation purposes.
24
years:
The table below lists the average daily flows of reclaimed water over the past five
Annual Daily Reclaimed Water Flow
(in MGD, averaged over the Fiscal Year)
Fiscal Year Flow
2015 4.7
2016 5.2
2017 6.4
2018 5.5
2019 (unaudited) 6.1
Source: The City of Clearwater
The table below illustrates the number of reclaimed water service customers over
the past five years:
Historical Number of Reclaimed Water Service Customers
(as of September 30 of the year indicated)
Reclaimed Water Service
Fiscal Year Customers
2015 7,218
2016 7,441
2017 7,677
2018 7,713
2019 (unaudited) 7,739
Source: The City of Clearwater
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25
Historical Debt Service Coverage
The following table is a schedule of the Water & Sewer System debt service
coverage for the past five years.
Historical Debt Service Coverage By Net Revenues
Fiscal Years Ended September 300)
(In Thousands of $)
2014 2015 2016 2017 2018
Gross Revenues(2) $68,601 $72,303 $76,164 $81,897 $83,739
Costs of Operations & Maintenance(2) $44,732 $47,680 $42,131 $50,177 $46,484
Net Revenues Available for Debt Service(2) $23,869 $24,623 $34,033 $31,720 $37,255
Annual Debt Service $13,779 $13,560 $13,635 $12,634 $12,166
Coverage (1.15x required) 1.73 1.82 2.50 2.51 3.06
(1)
(2)
Though the audited financial statements for the Fiscal Year ended 2019 are unavailable, the Rate
Consultant (hereinafter defined) has estimated the debt service coverage for such Fiscal Year to be
3.45. See Schedule 8 of "APPENDIX F - Fiscal Year 2019 Water, Sewer and Reclaimed Water
Revenue Sufficiency Analysis (Rate Study)" attached hereto.
Revenues used in the calculation include interest earnings and exclude extraordinary gain and
contributed revenues. Expenses used exclude depreciation (and similar non-cash expenses),
amortization of bond discount, bond interest, sinking fund and reserve requirements and
extraordinary loss.
Source: The City of Clearwater
For a pro forma of forecasted Net Revenues and debt service coverage for the Fiscal
Years 2019 through and including 2029, see Schedule 8 of "APPENDIX F - Fiscal Year
2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis (Rate Study)"
attached hereto.
Future Water and Sewer System Capital Improvements
The City of Clearwater Fiscal Year 2019 Water, Sewer and Reclaimed Water
Revenue Sufficiency Analysis (the "Rate Study") forecasts a capital improvement program
("CIP") for the System over the 11 -year period from 2019 through 2029 in the amount of
approximately $634 million. Of this amount, it is anticipated that the City will incur long-
term revenue bond financing of approximately $196 million from the future issuance of
revenue bonds, including an anticipated bond issue in 2022. The balance of the costs of
the capital improvement program are expected to be paid from impact fees, infrastructure
sales tax revenues, grant funding, renewal and replacement and unexpended amounts on
deposit in the Revenue Fund after payment of debt service on Bonds. See "APPENDIX F
- Fiscal Year 2019 Water, Sewer and Reclaimed Water Revenue Sufficiency Analysis
26
(Rate Study)" attached hereto and "— Establishment of Rates, Fees and Charges; Rate Study
Recommendations" below.
Regulation and Permitting
The System is regulated by the United States Environmental Protection Agency and
by the State of Florida's Department of Environmental Protection ("FDEP"). The water
supply permitting is regulated under the Southwest Florida Water Management District
("SWFWNID"), which grants water use permits. The current water use permit allows an
annual average daily withdrawal of 14.3 MGD and is set to expire in December, 2039.
Wastewater treatment plants operate under 5 -year FDEP permits. The Marshall Street
WRF Operating Permit expires in February 2022, the Northeast WRF Operating Permit
expires in July 2022, the East WRF Operating Permit expires in June 2022, and the Master
Reuse System Operating Permit expires in August 2023. The System is currently operating
in compliance with the FDEP Wastewater Facility Operating Permits.
The City is currently in discussions with FDEP regarding three regulatory issues:
1. - As is the case for most utilities in Florida, the City occasionally experiences
sanitary sewer overflows due to occasional piping damage as a result of (a) contractors
hitting wastewater pipelines, (b) sewer clogging, and (c) excessive storm events caused by
rain and ground water infiltration and inflow. The FDEP has indicated that they will be
issuing a Settlement Agreement that will require the City to pay minimal administrative
costs and complete in-kind projects to resolve the issues they have identified. The City has
not yet received the Settlement Agreement. However, the City has sufficient funding in
place as part of the CIP program to fund the anticipated in-kind projects required by the
Settlement Agreement. The City currently has CIP projects underway designed to address
infiltration and inflow issues and such problems are anticipated to diminish as the projects
are completed.
2. A contractor damaged one of the groundwater monitor wells that are required
by the City's Master Reuse System FDEP Operating Permit. The City is in discussions
with FDEP related to modifying the current groundwater monitoring system to address the
loss of this well and better utilize the monitoring system. The City does not anticipate any
regulatory action will be required to resolve this issue.
3. The City is seeking to obtain approval for a minor Operating Permit
modification to alter the operation of the brine disposal injection well at the RO2 water
plant to reflect updated operating conditions. The City does not anticipate any regulatory
action, other than the issuance of the requested Operating Permit modification.
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Establishment of Rates, Fees and Charges; Rate Study Recommendations
The City establishes by ordinance rates, fees and charges for use of the System. The
ordinance is adopted in response to periodic rate studies conducted by Stantec, the City's
utility rate consultant (the "Rate Consultant"). The most recent study, "FY 2019 Water,
Sewer and Reclaimed Water Revenue Sufficiency Analysis," dated September 10, 2019, is
the basis for establishing future rates, fees, and charges for System services based upon a
planning period of Fiscal Year 2019 through Fiscal Year 2029.
The Rate Study notes that:
"In recent years, many challenges have affected the financial performance of
the Utility. Pinellas County, the City's wholesale water provider, has continued to
increase its wholesale rates. Aging infrastructure continues to drive the need for
additional renewal and replacement projects within the Utility's capital
improvement plan. Moreover, a combination of recent economic conditions and
continued conservation awareness has caused many of the Utility's customers to
reduce the quantity of water they are using."
Therefore, the objective of the current Rate Study, taken together with previous
annual rate studies, is to evaluate the sufficiency of the System's current rates and proposed
annual rate adjustments for water and wastewater and to identify a plan of future increases
that would provide adequate revenue to fund the System's cost requirements over a multi-
year projection period while recognizing the effects of recent minor customer and demand
growth, increasing purchased water costs, and increasing renewal and replacement
requirements. The Rate Study states that annual 4.0% rate increases beginning Fiscal Year
2020 through Fiscal Year 2029 "should provide adequate revenue to meet the projected
requirements of the Utility during each remaining year of the projection period." On
September 7, 2017, the City Council adopted Ordinance 9054-17 approving a rate increase
of 6.25% for Fiscal Year 2018 and annual rate increases of 4.0% from Fiscal Year 2019
through Fiscal Year 2022.
The Rate Study also recommends that the City should continue to review the
financial performance of the System on an annual basis and evaluate the adequacy of its
revenues and current plan of rate increases. Doing so will allow for the recognition of
updated revenue and expense information and changes in economic conditions so that any
necessary adjustments can be made to planned rate increases in order to allow the System
to meet its requirements during the projection period and minimize rate impacts to
customers from future events occurring differently than currently projected.
The complete Rate Study is included herein as APPENDIX F and a schedule of
rates, fees, and charges is attached hereto as APPENDIX G.
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No Mortgage or Sale of the System
Pursuant to the Bond Ordinance, the City irrevocably covenants, binds and obligates
itself not to sell, lease, encumber or in any manner dispose of the System as a whole until
all of the Bonds shall have been paid in full as to both principal and interest, or payment
shall have been duly provided for under the Bond Ordinance.
The foregoing provision notwithstanding, the City may sell or dispose of, for fair
market value, any properties or parts of the System which the Consulting Engineer shall
certify in writing are not necessary for the continued operation of the System and that the
sale or disposal of which will not adversely affect the Gross Revenues to be derived from
the System to such an extent that the City will fail to comply with the covenants contained
in the Bond Ordinance.
The proceeds derived from any sale or disposal of any properties or parts of the
System as provided for in the above paragraph shall, in the discretion of the City, be (1)
deposited in the Renewal and Replacement Fund and used exclusively for the purpose of
paying the cost of extensions, enlargements or additions to, or the replacement of capital
assets of the System and for unusual or extraordinary repairs thereto, or for the construction
or acquisition of additions, extensions and improvements to the System, or (2) for the
purchase or retirement of the Bonds then outstanding. However, if the Consulting Engineer
certifies that proceeds are necessary for the purposes stated in part (1) above, such proceeds
shall remain in the Renewal and Replacement Fund until such certified requirements are
satisfied, and the proceeds shall not be used for any other purpose allowed by the Bond
Ordinance.
No Free Service
Pursuant to the Bond Ordinance, the City will not render or cause to be rendered
any free services of any nature by its System, nor will any preferential rates be established
for users of the same class. This covenant shall not prevent individual contracts with other
governmental entities for the wholesale delivery of services of the System. The City,
including its departments, agencies and instrumentalities, shall avail itself of the facilities
or services provided by the System or any part thereof, and the same rates, fees or charges
applicable to other customers receiving like services under similar circumstances shall be
charged to the City and any such department, agency or instrumentality. Such charges
shall be paid as they accrue, and the City shall transfer from its general funds sufficient
sums to pay such charges. The revenues so received shall be deemed to be Gross Revenues
derived from the operation of the System and shall be deposited and accounted for in the
same manner as other Gross Revenues derived from such operation of the System.
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Mandatory Connection
To the full extent permitted by law, the City will adopt and keep in force and effect
an ordinance requiring that all improved premises with respect to which water or sewer
services from the System are available shall connect such premises to the System and shall
obtain available water and sewer services only from the System.
Climate Change
The State of Florida is naturally susceptible to the effects of extreme weather events
and natural disasters, including floods, droughts, and hurricanes, which could result in
negative economic impacts on coastal communities like the City. Such effects can be
exacerbated by a longer-term shift in the climate over several decades (commonly referred
to as climate change), including increasing global temperatures, rainfall intensification and
rising sea levels. The occurrence of such extreme weather events could damage the local
infrastructure that provides essential services to the City, including the System. The
economic impacts resulting from such extreme weather events could include a decline in
Net Revenues, interruption of service and escalated recovery costs. No assurance can be
given as to whether future extreme weather events will occur that could materially impair
the financial condition of the City or damage the System. While the City believes that it
maintains adequate insurance to cover any loss arising from such natural disasters, there
can be no assurance that in severe circumstances such insurance will be adequate to rebuild
its facilities. Additionally, there can be no assurance that after experiencing natural
disasters, citizens will continue to choose to live in or travel to areas affected by such
disasters. Such decisions could have an adverse impact on the revenues of the City.
[CLIMATE CHANGE PLAN TO BE PROVIDED]
Cybersecurity
Computer networks and systems used for data transmission and collection are vital
to the efficient operations of the City. City systems provide support to departmental
operations and constituent services by collecting and storing sensitive data, including
intellectual property, security information, proprietary business process information,
information applying to suppliers and business partners, and personally identifiable
information of customers, constituents and employees. The secure processing,
maintenance and transmission of this information is critical to departmental operations and
the provision of citizen services. Increasingly, governmental entities are targeted by
cyberattacks seeking to obtain confidential data, disrupt critical services or obtain ransoms.
A rapidly changing cyber risk landscape may introduce new vulnerabilities that
attackers/hackers can exploit in attempts to effect breaches or service disruptions.
Employee error and/or malfeasance may also affect confidentiality, integrity and
availability of systems and the information stored there. The potential disruption, access,
modification, disclosure or destruction of data could result in interruption of the efficiency
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of City commerce, initiation of legal claims or proceedings, liability under laws that protect
the privacy of personal information, regulatory penalties, disruptions in operations and the
services provided, and the loss of confidence in City operations, ultimately adversely
affecting City revenues.
The City maintains a comprehensive information security program to protect the
confidentiality, integrity, and availability of the City's critical systems and sensitive data.
The solution is designed to assess and mitigate current threats and the risk of data breaches
to local government. The City also maintains a comprehensive insurance policy covering
various aspects related to cybersecurity incidents. [TO BE CONFIRMED BY THE CITY]
PENSION AND OTHER POST -EMPLOYMENT BENEFIT LIABILITIES
Defined Benefit Pension Plans
The City maintains and self -administers two separate single employer defined
benefit pension plans. The Employees' Pension Plan covers all permanent, full-time City
employees who successfully pass the required physical examination; except for firefighters
employed prior to July 1, 1963, and certain unclassified (primarily managerial) employees.
The Firefighters' Relief and Pension Plan covers eligible firefighters hired prior to July 1,
1963, and is closed to new entrants.
Net Pension Liability/(Asset) for the Employees' Pension Plan and the Firefighters'
Relief and Pension Plan for the five years ended on September 30, 2018 was as follows:
Employees' Pension Plan
September 30, 2018
September 30, 2017
September 30, 2016
September 30, 2015
September 30, 2014
Firefighters' Relief and Pension Plan
September 30, 2018
September 30, 2017
September 30, 2016
September 30, 2015
September 30, 2014
Source: The City of Clearwater
Total Pension
Liability
$939,291,240
$902,629,886
$880,355,998
$847,358,253
$819,598,826
$2,709,051
$3,162,699
$3,360,237
$3,771,835
$3,797,780
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Plan Fiduciary Net Pension
Net Position Liability/(Asset)
$1,043,759,224 $(104,467,984)
$980,288,359 $(77,658,473)
$905,239,823 $(24,883,825)
$840,268,849 $7,089,404
$863,589,949 $(43,991,123)
$3,566,898 $(857,847)
$3,842,781 $(680,082)
$4,360,757 $(1,000,520)
$4,615,299 $(843,464)
$4,860,303 $(1,062,523)
The Employees' Pension Plan liability was determined by an actuarial valuation as
of January 1 updated to September 30 using the following actuarial assumptions applied to
all measurement periods:
Inflation 2.5%
Salary increases 3.5% to 7.9% depending upon service, including
inflation
Discount rate 7.0%
Investment rate of return 7.0%
The Firefighters' Relief and Pension liability was determined by an actuarial
valuation as of September 30 using the following actuarial assumptions applied to all
measurement periods:
Inflation 2.0%
Salary increases Not applicable
Discount rate 3.0%
Investment rate of return 3.0%
See Note IV D, Employee retirement systems and pension plans, included in the
Notes to the Basic Financial Statements in APPENDIX B hereto for more information
regarding the City's defined benefit pension plans.
Other Post -Employment Benefits (OPEB)
The City administers a single -employer defined benefit healthcare plan that
provides medical insurance benefits to its employees and their eligible dependents. The
City is required by State Statute to provide eligible retirees the opportunity to participate
in the plan as the same cost that is applicable to active employees. The City provides no
explicit medical insurance subsidy to retirees, only the implicit subsidy required by State
Statute. Additionally, the City provides and pays for $1,000 of term life insurance for
retirees who retired before October 1, 2008.
The City's total OPEB liability and OPEB annual expense since the Fiscal Year
2018 implementation of GASB Statement #75 were as follows:
Total OPEB
Fiscal Year Ended Total OPEB Cost Expense
9/30/2018 $ 27,262,128 $2,539,925
9/30/2017 $ 26,640,313 unavailable
See Note IV E, Post -Employment benefits other than pension, included in the Notes
to the Basic Financial Statements in APPENDIX B hereto for a description of the actuarial
assumptions applied with respect to the City's actuarial accrued OPEB liability.
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FINANCIAL STATEMENTS
The combined financial statements and Water and Sewer enterprise fund financial
statements of the City as of September 30, 2018, are contained in the City's Comprehensive
Annual Financial Report for the Fiscal Year ended September 30, 2018, attached hereto as
APPENDIX B, which financial statements have been audited by Cherry Bekaert LLP as
stated in their report. The consent of Cherry Bekaert LLP to include in this Official
Statement the aforementioned report was not requested, and the general purpose financial
statements of the City are provided only as publicly available documents. Cherry Bekaert
LLP, the City's independent auditor, has not been engaged to perform and has not
performed, since the date of its report included herein, any procedures on the financial
statements addressed in that report. Cherry Bekaert LLP also has not performed any
procedures relating to this Official Statement.
INVESTMENT POLICY OF THE CITY
Pursuant to the requirements of Section 218.415, Florida Statutes, the City adopted
a written investment policy, which applies to all funds held by or for the benefit of the City
Council (except for proceeds of bond issues which are deposited in escrow and debt service
funds and governed by their bond documents) and funds of Constitutional Officers and
other component units of the City.
The objectives of the investment policy, listed in order of importance, are:
1. Safety of principal
2. Provision of sufficient liquidity
3. Optimization of return within the constraints of safety and liquidity
The investment policy limits the securities eligible for inclusion in the City's
portfolio. The City will attempt to maintain a weighted average maturity of its investments
at or below three years; however, the average maturity of investments may not exceed five
years.
To enhance safety, the investment policy requires the diversification of the portfolio
to reduce the risk of loss resulting from over -concentration of assets in a specific class of
security. The investment policy also requires the preparation of periodic reports for the
City Council of all outstanding securities by class or type, book value, income earned and
market value as of the report date.
Notwithstanding the foregoing, moneys held in the funds and accounts established
under the Bond Ordinance may be invested only in Authorized Investments, as described
in the Bond Ordinance.
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LITIGATION
In the opinion of the City Attorney, no legal proceedings are pending, as to which
the City has received service of process or, to the best of her knowledge, threatened that
materially affect the City's ability to perform its obligations to the holders of the Series
2020 Bonds or that materially affect the Pledged Revenues.
In the opinion of the City Attorney, there is no litigation or controversy of any nature
now pending or, to the City's knowledge, threatened to restrain or enjoin the issuance, sale,
execution or delivery of the Series 2020 Bonds or in any way contesting the validity of the
Series 2020 Bonds or any proceedings of the City taken with respect to the authorization,
sale or issuance of the Series 2020 Bonds or the pledge or application of any moneys
provided for the payment of the Series 2020 Bonds.
RATINGS
[S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC
("S&P") and Moody's Investors Service ("Moody's")] have assigned ratings of ""
( outlook) and " " ( outlook) respectively, to the Series 2020 Bonds.
Such ratings reflect only the views of such organizations and any desired explanation of
the significance of such ratings should be obtained from the respective rating agency at the
following addresses: [S&P, 55 Water Street, 38th Floor, New York, New York 11238] and
[Moody's, 7 World Trade Center, New York, New York 10007]. Generally, a rating agency
bases its rating on the information and materials furnished to it and on investigations,
studies and assumptions of its own. There is no assurance that such ratings will continue
for any given period of time or that such ratings will not be revised downward or withdrawn
entirely by the rating agencies, if in the judgment of such rating agencies, circumstances
so warrant. Any such downward revision or withdrawal of such ratings may have an
adverse effect on the market price of the Series 2020 Bonds.
TAX MATTERS
General
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements which must be met subsequent to the issuance of the Series 2020 Bonds in
order that interest on the Series 2020 Bonds be and remain excluded from gross income for
purposes of federal income taxation. Non-compliance may cause interest on the Series
2020 Bonds to be included in federal gross income retroactive to the date of issuance of
the Series 2020 Bonds, regardless of the date on which such non-compliance occurs or is
ascertained. These requirements include, but are not limited to, provisions which prescribe
yield and other limits within which the proceeds of the Series 2020 Bonds and the other
34
amounts are to be invested and require that certain investment earnings on the foregoing
must be rebated on a periodic basis to the Treasury Department of the United States. The
City has covenanted in the Resolution to comply with such requirements in order to
maintain the exclusion from federal gross income of the interest on the Series 2020 Bonds.
In the opinion of Bond Counsel, assuming compliance with certain covenants, under
existing laws, regulations, judicial decisions and rulings, interest on the Series 2020 Bonds
is excluded from gross income for purposes of federal income taxation. Interest on the
Series 2020 Bonds is not an item of tax preference for purposes of the federal alternative
minimum tax.
Except as described above, Bond Counsel will express no opinion regarding other
federal income tax consequences resulting from the ownership of, receipt or accrual of
interest on, or disposition of Series 2020 Bonds. Prospective purchasers of Series 2020
Bonds should be aware that the ownership of Series 2020 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 2020 Bonds; (ii) the
reduction of the loss reserve deduction for property and casualty insurance companies by
fifteen percent (15%) of certain items, including interest on the Series 2020 Bonds; (iii) the
inclusion of interest on the Series 2020 Bonds in earnings of certain foreign corporations
doing business in the United States for purposes of the branch profits tax; (iv) the inclusion
of interest on the Series 2020 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 (v) the inclusion of interest on the Series 2020 Bonds in "modified
adjusted gross income" by recipients of certain Social Security and Railroad Retirement
benefits for the purposes of determining whether such benefits are included in gross income
for federal income tax purposes.
As to questions of fact material to the opinion of Bond Counsel, Bond Counsel will
rely upon representations and covenants made on behalf of the City in the Resolution,
certificates of appropriate officers and certificates of public officials (including
certifications as to the use of proceeds of the Series 2020 Bonds and of the property
financed or refinanced thereby).
PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2020
BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY
HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL
AND CORPORATE HOLDERS OF THE SERIES 2020 BONDS, INCLUDING, BUT
NOT LIMITED TO, THE CONSEQUENCES DESCRIBED ABOVE. PROSPECTIVE
HOLDERS OF THE SERIES 2020 BONDS SHOULD CONSULT WITH THEIR TAX
SPECIALISTS FOR INFORMATION IN THAT REGARD.
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Information Reporting and Backup Withholding
Interest paid on tax-exempt bonds such as the Series 2020 Bonds is subject to
information reporting to the Internal Revenue Service in a manner similar to interest paid
on taxable obligations. This reporting requirement does not affect the excludability of
interest on the Series 2020 Bonds from gross income for federal income tax purposes.
However, in conjunction with that information reporting requirement, the Code subjects
certain non -corporate owners of Series 2020 Bonds, under certain circumstances, to
"backup withholding" at the rate specified in the Code with respect to payments on the
Series 2020 Bonds and proceeds from the sale of Series 2020 Bonds. Any amount so
withheld would be refunded or allowed as a credit against the federal income tax of such
owner of Series 2020 Bonds. This withholding generally applies if the owner of Series
2020 Bonds (i) fails to furnish the payor such owner's social security number or other
taxpayer identification number ("TIN"), (ii) furnished the payor an incorrect TIN, (iii) fails
to properly report interest, dividends, or other "reportable payments" as defined in the
Code, or (iv) under certain circumstances, fails to provide the payor or such owner's
securities broker with a certified statement, signed under penalty of perjury, that the TIN
provided is correct and that such owner is not subject to backup withholding. Prospective
purchasers of the Series 2020 Bonds may also wish to consult with their tax advisors with
respect to the need to furnish certain taxpayer information in order to avoid backup
withholding.
Other Tax Matters
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 2020 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 2020 Bonds. From time to time, legislative proposals are
pending which could have an effect on both the federal tax consequences resulting from
ownership of the Series 2020 Bonds and their market value. No assurance can be given
that legislative proposals will not be enacted that would apply to, or have an adverse effect
upon, the Series 2020 Bonds.
Prospective purchasers of the Series 2020 Bonds should consult their own tax
advisors as to the tax consequences of owning the Series 2020 Bonds in their particular
state or local jurisdiction and regarding any pending or proposed federal or state tax
legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Tax Treatment of Original Issue Discount
Under the Code, the difference between the maturity amount of the Series 2020
Bonds maturing on (collectively, the "Discount Bonds"), and the initial
36
offering price to the public, excluding bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters or wholesalers, at which price a
substantial amount of the Discount Bonds of the same maturity and, if applicable, interest
rate, was sold is "original issue discount." Original issue discount will accrue over the term
of the Discount Bonds at a constant interest rate compounded periodically. A purchaser
who acquires the Discount Bonds in the initial offering at a price equal to the initial offering
price thereof to the public will be treated as receiving an amount of interest excluded from
gross income for federal income tax purposes equal to the original issue discount accruing
during the period he or she holds the Discount Bonds, and will increase his or her adjusted
basis in the Discount Bonds by the amount of such accruing discount for purposes of
determining taxable gain or loss on the sale or disposition of the Discount Bonds. The
federal income tax consequences of the purchase, ownership and redemption, sale or other
disposition of the Discount Bonds which are not purchased in the initial offering at the
initial offering price may be determined according to rules which differ from those above.
Bondholders of the Discount Bonds should consult their own tax advisors with respect to
the precise determination for federal income tax purposes of interest accrued upon sale,
redemption or other disposition of the Discount Bonds and with respect to the state and
local tax consequences of owning and disposing of the Discount Bonds.
Tax Treatment of Bond Premium
The difference between the principal amount of the Series 2020 Bonds maturing on
(collectively, the "Premium Bonds"), and the initial offering price to
the public (excluding bond houses, brokers or similar persons or organizations acting in
the capacity of underwriters or wholesalers) at which price a substantial amount of such
Premium Bonds of the same maturity and, if applicable, interest rate, was sold constitutes
to an initial purchaser amortizable bond premium which is not deductible from gross
income for federal income tax purposes. The amount of amortizable bond premium for a
taxable year is determined actuarially on a constant interest rate basis over the term of each
of the Premium Bonds, which ends on the earlier of the maturity or call date for each of
the Premium Bonds which minimizes the yield on such Premium Bonds to the purchaser.
For purposes of determining gain or loss on the sale or other disposition of a Premium
Bond, an initial purchaser who acquires such obligation in the initial offering is required to
decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of
amortizable bond premium for the taxable year. The amortization of bond premium may
be taken into account as a reduction in the amount of tax-exempt income for purposes of
determining various other tax consequences of owning such Premium Bonds. Bondholders
of the Premium Bonds are advised that they should consult with their own tax advisors
with respect to the state and local tax consequences of owning such Premium Bonds.
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LEGAL OPINIONS
Legal matters incident to the authorization, issuance and sale of the Series 2020
Bonds are subject to the approval of Bryant Miller Olive P.A., Tallahassee, Florida, Bond
Counsel, whose approving opinion will be in substantially the form set forth in APPENDIX
E. Certain other legal matters will be passed upon for the City by Pamela K. Akin, Esquire,
City Attorney and by Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Disclosure
Counsel to the City. Nelson Mullins Riley & Scarborough, Orlando, Florida is serving as
counsel to the Underwriter.
ENFORCEABILITY OF REMEDIES
The remedies available to the holders of the Series 2020 Bonds upon an Event of
Default under the Bond Ordinance are in many respects dependent upon judicial actions
which are often subject to discretion and delay. Under existing constitutional and statutory
law and judicial decisions, the remedies specified by the Bond Ordinance may not be
readily available or may be limited. The various legal opinions to be delivered concurrently
with the delivery of the Series 2020 Bonds will be qualified, as to the enforceability of the
various legal instruments, by limitations imposed by bankruptcy, reorganization,
insolvency or other similar laws affecting the rights of creditors enacted before or after
such delivery. The remedies granted to the Bondholders under the Bond Ordinance do not
include the power to accelerate the principal of the Series 2020 Bonds.
FINANCIAL ADVISOR
Public Resources Advisory Group, Inc., St. Petersburg, Florida, is serving as
Financial Advisor to the City with respect to the sale of the Series 2020 Bonds. The
Financial Advisor assisted in the preparation of this Official Statement and in other matters
relating to the planning, structuring and issuance of the Series 2020 Bonds. The Financial
Advisor is not obligated to undertake and has not undertaken to make an independent
verification or to assume responsibility for the accuracy, completeness or fairness of the
information contained in this Official Statement and is not obligated to review or ensure
compliance with the undertakings by the City to provide continuing secondary market
disclosure.
Public Resources Advisory Group, Inc., is an independent advisory firm and is not
engaged in the business of underwriting, trading or distributing municipal or other public
securities.
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UNDERWRITING
The Series 2020 Bonds are being purchased by Raymond James & Associates, Inc.
(the "Underwriter") at an aggregate purchase price of $ (representing the par
amount of the Series 2020 Bonds, plus/minus net original issue premium/discount of
$ and less Underwriter's discount of $ ), subject to certain terms
and conditions set forth in a Bond Purchase Agreement between the City and the
Underwriter, including the approval of certain legal matters by Bond Counsel and the
existence of no material adverse changes in the condition of the City or the System from
that set forth in this Official Statement. The Underwriter is obligated to purchase all the
Series 2020 Bonds if any are purchased. Following the initial public offering, the public
offering prices may be changed from time to time by the Underwriter.
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Section 517.051, Florida Statutes, and the regulations promulgated thereunder
require that the City make a full and fair disclosure of any bonds or other debt obligations
of such entity that have been in default as to principal or interest at any time after December
31, 1975, as provided by rule of the Florida Department of Banking and Finance (the
"Department"). Pursuant to Rule 69W-400.003, Florida Administrative Code, the
Department has required the disclosure of the amounts and types of defaults, any legal
proceedings resulting from such defaults, whether a trustee or receiver has been appointed
over the assets of the City, and certain additional financial information, unless the City
believes in good faith that such information would not be considered material by a
reasonable investor. The City is not and has not been in default on any bond issued since
December 31, 1975 which would be considered material by a reasonable investor. The
City has not undertaken an independent review or investigation of securities for which it
has served as conduit issuer. The City does not believe that any information about any
default on such securities is appropriate and would be considered material by a reasonable
investor in the Series 2020 Bonds because the City would not have been obligated to pay
the debt service on any such securities except from payments made to it by the private
companies on whose behalf such securities were issued and no funds of the City would
have been pledged or used to pay such securities or the interest thereon.
CONTINGENT AND OTHER FEES
The City has retained Bond Counsel, Disclosure Counsel, the Financial Advisor and
the Underwriter with respect to the authorization, sale, execution and delivery of the Series
2020 Bonds. Payment of the fees of such professionals is contingent upon the issuance of
the Series 2020 Bonds.
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CONTINUING DISCLOSURE
In order to comply with the continuing disclosure requirements of Rule 15c2 -
12(b)(5) of the Securities and Exchange Commission (the "SEC Rule"), the City and
Digital Assurance Certification LLC, as dissemination agent (the "Dissemination Agent")
will enter into a Continuing Disclosure Agreement (the "Disclosure Agreement"), the form
of which is attached hereto as APPENDIX D. Pursuant to the Disclosure Agreement, the
City has covenanted for the benefit of the holders and beneficial owners of the Series 2020
Bonds to provide to the Dissemination Agent certain financial information and operating
data relating to the City by not later than April 30 in each year commencing April 30,
[2020] (the "Annual Report"), and to provide notices of the occurrence of certain
enumerated events, if deemed by the City to be material.
The Annual Report will be filed by the Dissemination Agent to the Municipal
Securities Rulemaking Board ("MSRB") through its Electronic Municipal Market Access
system ("EMMA"). The notices of material events will be filed by the Dissemination
Agent with the MSRB. The form of Disclosure Agreement containing the specific nature
of the information to be contained in the Annual Report or the notices of material events
appears in APPENDIX D. The Disclosure Agreement will be executed by the City and the
Dissemination Agent at the time of issuance of the Series 2020 Bonds. The foregoing
covenants have been made in order to assist the Underwriter in complying with the SEC
Rule.
For the Fiscal Year ended 2014, the City failed to update the tables of Average Daily
Flow (MGD) for the City's Reclaimed Water System as required continuing disclosures for
the City's Water and Sewer Revenue Bonds, Series 2009A and the Series 2011 Bonds. The
City filed a Notice to Cure Prior Continuing Disclosure Omission on March 10, 2016, in
order to cure the omission.
For the Fiscal Year ended 2014, the City inadvertently failed to post the State of
Florida and Pinellas County Florida Comprehensive Annual Financial Reports to the
MSRB's EMMA website as required continuing disclosures for the City's Revenue Bonds
(Spring Training Facility), Series 2002, appearing under principal CUSIP 185278. The City
filed a Notice to Cure Prior Continuing Disclosure Omission on March 10, 2016, in order
to cure the omissions.
CERTIFICATE CONCERNING OFFICIAL STATEMENT
Concurrently with the delivery of the Series 2020 Bonds, the City will furnish its
certificate, executed by the Mayor or Vice -Mayor of the City, to the effect that, to the best
of his or her knowledge, this Official Statement, as of its date and as of the date of delivery
of the Series 2020 Bonds, does not contain any untrue statements of material fact and does
not omit to state a material fact, which should be included herein for the purpose for which
40
this Official Statement is to be used, or which is necessary to make the statements contained
herein, in light of the circumstances under which they were made, not misleading.
MISCELLANEOUS
The references, excerpts and summaries of all documents, resolutions and/or
ordinances referred to herein do not purport to be complete statements of the provisions of
such documents, resolutions and/or ordinances and reference is directed to all such
documents, resolutions and/or ordinances for full and complete statements of all matters of
fact relating to the Series 2020 Bonds, the security for and the repayment of the Series 2020
Bonds and the rights and obligations of the Holders thereof. Copies of such documents,
resolutions and ordinances may be obtained from the City Clerk's Office.
So far as any statements made in this Official Statement involve matters of opinion
or of estimates, whether or not expressly stated, they are set forth as such and not as
representations of fact. No representation is made that any of such statements will be
realized. Neither this Official Statement nor any statement which may have been orally or
in writing is to be construed as a contract with the holders of the Series 2020 Bonds.
[Remainder of Page Intentionally Left Blank]
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The execution and delivery of this Official Statement by the Mayor of the City has
been duly authorized by the City Council.
CITY OF CLEARWATER, FLORIDA
George N. Cretekos, Mayor
William B. Horne, II, City Manager
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APPENDIX A
GENERAL INFORMATION REGARDING THE CITY
APPENDIX B
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 2018
APPENDIX C
COPIES OF BOND ORDINANCE AND RESOLUTION
APPENDIX D
FORM OF CONTINUING DISCLOSURE AGREEMENT
APPENDIX E
FORM OF BOND COUNSEL OPINION
APPENDIX F
FISCAL YEAR 2019 WATER, SEWER AND RECLAIMED WATER
REVENUE SUFFICIENCY ANALYSIS (RATE STUDY)
APPENDIX G
SCHEDULE OF RATES, FEES AND CHARGES
EXHIBIT D
FORM OF CONTINUING DISCLOSURE AGREEMENT
Resolution No. 19-37
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated as of
, 2020, is executed and delivered by and between THE CITY OF
CLEARWATER, FLORIDA (the "Issuer") and DIGITAL ASSURANCE
CERTIFICATION, L.L.C., as exclusive Disclosure Dissemination Agent (the
"Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter
defined) of the Bonds (hereinafter defined) and in order to assist Raymond James &
Associates, Inc. (the "Underwriter") in processing certain continuing disclosure with
respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and
Exchange Commission under the Securities Exchange Act of 1934, as the same may be
amended from time to time (the "Rule").
The services provided under this Disclosure Agreement solely relate to the
execution of instructions received from the Issuer through use of the DAC system and do
not constitute "advice" within the meaning of the Dodd -Frank Wall Street Reform and
Consumer Protection Act (the "Act"). DAC will not provide any advice or
recommendation to the Issuer or anyone on the Issuer's behalf regarding the "issuance of
municipal securities" or any "municipal financial product" as defined in the Act and
nothing in this Disclosure Agreement shall be interpreted to the contrary. DAC is not a
"Municipal Advisor" as such term is defined in Section 15B of the Securities Exchange
Act of 1934, as amended, and related rules.
SECTION 1. Definitions. Capitalized terms not otherwise defined in this
Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in
conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized
terms shall have the following meanings:
"Annual Filing Date" means the date, set in Sections 2(a) and 2(0 hereof, by
which the Annual Report is to be filed with the MSRB.
"Annual Financial Information" means annual financial information as such term
is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this
Disclosure Agreement.
"Annual Report" means an Annual Report containing Annual Financial
Information and operating data for the System (as defined in the Official
Statement) described in and consistent with Section 3 of this Disclosure
Agreement.
"Audited Financial Statements" means the annual financial statements of the
Issuer for the prior fiscal year, certified by an independent auditor as prepared in
accordance with generally accepted accounting principles, or otherwise, as such
term is used in paragraph (b)(5)(i)(B) of the Rule and specified in Section 3(b) of
this Disclosure Agreement.
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"Bonds" means the bonds as listed on the attached Exhibit A, with the 9 -digit
CUSIP numbers relating thereto.
"Certification" means a written certification of compliance signed by the
Disclosure Representative stating that the Annual Report, Audited Financial
Statements, Notice Event notice, Failure to File Event notice, Voluntary Event
Disclosure or Voluntary Financial Disclosure delivered to the Disclosure
Dissemination Agent is the Annual Report, Audited Financial Statements, Notice
Event notice, Failure to File Event notice, Voluntary Event Disclosure or
Voluntary Financial Disclosure required to be submitted to the MSRB under this
Disclosure Agreement. A Certification shall accompany each such document
submitted to the Disclosure Dissemination Agent by the Issuer and include the full
name of the Bonds and the 9 -digit CUSIP numbers for all Bonds to which the
document applies.
"Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C,
acting in its capacity as Disclosure Dissemination Agent hereunder, or any
successor Disclosure Dissemination Agent designated in writing by the Issuer
pursuant to Section 9 hereof.
"Disclosure Representative" means the Debt Manager of the Issuer or his or her
designee, or such other person as the Issuer shall designate in writing to the
Disclosure Dissemination Agent from time to time as the person responsible for
providing Information to the Disclosure Dissemination Agent.
"Failure to File Event" means the Issuer's failure to file an Annual Report on or
before the Annual Filing Date.
"Financial obligation" as used in this Disclosure Agreement is defined in the Rule
as (i) a debt obligation; (ii) derivative instrument entered into in connection with,
or pledged as a security or a source of payment for, an existing or planned debt
obligation; or (iii) guarantee of (i) or (ii). The term "financial obligation" shall not
include municipal securities as to which a final official statement has been
provided to the MSRB consistent with the Rule.
"Force Majeure Event" means: (i) acts of God, war, or terrorist action; (ii) failure
or shut -down of the Electronic Municipal Market Access system maintained by
the MSRB; or (iii) to the extent beyond the Disclosure Dissemination Agent's
reasonable control, interruptions in telecommunications or utilities services,
failure, malfunction or error of any telecommunications, computer or other
electrical, mechanical or technological application, service or system, computer
virus, interruptions in Internet service or telephone service (including due to a
virus, electrical delivery problem or similar occurrence) that affect Internet users
generally, or in the local area in which the Disclosure Dissemination Agent or the
MSRB is located, or acts of any government, regulatory or any other competent
2
authority the effect of which is to prohibit the Disclosure Dissemination Agent
from performance of its obligations under this Disclosure Agreement.
"Holder" means any person (a) having the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including
persons holding Bonds through nominees, depositories or other intermediaries) or
(b) treated as the owner of any Bonds for federal income tax purposes.
"Information" means, collectively, the Annual Reports, the Audited Financial
Statements, the Notice Event notices, the Failure to File Event notices, the
Voluntary Event Disclosures and the Voluntary Financial Disclosures.
"MSRB" means the Municipal Securities Rulemaking Board, or any successor
thereto, established pursuant to Section 15B(b)(1) of the Securities Exchange Act
of 1934.
"Notice Event" means any of the events enumerated in paragraph (b)(5)(i)(C) of
the Rule and listed in Section 4(a) of this Disclosure Agreement.
"Obligated Person" means any person, including the Issuer, who is either generally
or through an enterprise, fund, or account of such person committed by contract or
other arrangement to support payment of all, or part of the obligations on the
Bonds (other than providers of municipal bond insurance, letters of credit, or other
liquidity facilities), as shown on Exhibit A.
"Official Statement" means the Official Statement prepared in connection with the
issuance of the Bonds.
"Voluntary Event Disclosure" means information that is accompanied by a
Certification of the Disclosure Representative containing the information
prescribed by Section 7(a) of this Disclosure Agreement.
"Voluntary Financial Disclosure" means information that is accompanied by a
Certification of the Disclosure Representative containing the information
prescribed by Section 7(b) of this Disclosure Agreement.
SECTION 2. Provision of Annual Reports.
(a) The Issuer shall provide, annually, an electronic copy of the Annual Report
and Certification to the Disclosure Dissemination Agent not later than the Annual Filing
Date. Promptly upon receipt of an electronic copy of the Annual Report and the
Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the
MSRB not later than April 30 following the end of each fiscal year of the Issuer,
commencing with the fiscal year ending September 30, [2019]. Such date and each
anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a
3
single document or as separate documents comprising a package, and may
cross-reference other information as provided in Section 3 of this Disclosure Agreement.
(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure
Dissemination Agent has not received a copy of the Annual Report and Certification, the
Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone
and in writing (which may be by e-mail) to remind the Issuer of its undertaking to
provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure
Representative shall either (i) provide the Disclosure Dissemination Agent with an
electronic copy of the Annual Report and the Certification no later than two (2) business
days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent
in writing that the Issuer will not be able to file the Annual Report within the time
required under this Disclosure Agreement, state the date by which the Annual Report for
such year will be provided and instruct the Disclosure Dissemination Agent to
immediately send a Failure to File Event notice to the MSRB in substantially the form
attached as Exhibit B, which may be accompanied by a cover sheet completed by the
Disclosure Dissemination Agent in the form set forth in Exhibit C-1.
(c) If the Disclosure Dissemination Agent has not received an Annual Report
and Certification by 10:00 a.m. Eastern time on the Annual Filing Date (or, if such
Annual Filing Date falls on a Saturday, Sunday or holiday, then the first business day
thereafter) for the Annual Report, a Failure to File Event shall have occurred and the
Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a
Failure to File Event notice to the MSRB in substantially the form attached as Exhibit B
without reference to the anticipated filing date for the Annual Report, which may be
accompanied by a cover sheet completed by the Disclosure Dissemination Agent in the
form set forth in Exhibit C-1.
(d) If Audited Financial Statements of the Issuer are prepared but not available
prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements
are available, provide at such time an electronic copy to the Disclosure Dissemination
Agent, accompanied by a Certification, for filing with the MSRB.
(e) The Disclosure Dissemination Agent shall:
(i)
verify the filing specifications of the MSRB each year prior to the
Annual Filing Date;
(ii) upon receipt, promptly file each Annual Report received under
Sections 2(a) and 2(b) hereof with the MSRB;
(iii) upon receipt, promptly file each Audited Financial Statement
received under Section 2(d) hereof with the MSRB;
(iv) upon receipt, promptly file the text of each Notice Event received
under Sections 4(a) and 4(b)(ii) hereof with the MSRB, identifying
4
the Notice Event as instructed by the Issuer pursuant to Section 4(a)
or 4(b)(ii) hereof (being any of the categories set forth below) when
filing pursuant to Section 4(c) of this Disclosure Agreement:
1. "Principal and interest payment delinquencies;"
2. "Non -Payment related defaults, if material;"
3. "Unscheduled draws on debt service reserves reflecting
financial difficulties;"
4. "Unscheduled draws on credit enhancements reflecting
financial difficulties;"
5. "Substitution of credit or liquidity providers, or their failure to
perform;"
6. "Adverse tax opinions, IRS notices or events affecting the tax
status of the security;"
7. "Modifications to rights of securities holders, if material;"
8. "Bond calls, if material, and tender offers;"
9. "Defeasances;"
10. "Release, substitution, or sale of property securing repayment
of the securities, if material;"
11. "Rating changes;"
12. "Bankruptcy, insolvency, receivership or similar event of the
obligated person;"
13. "Merger, consolidation, or acquisition of the obligated person,
if material;"
14. "Appointment of a successor or additional trustee, or the
change of name of a trustee, if material;"
15. "Incurrence of a financial obligation of the obligated person,
if material, or agreement to covenants, events of default,
remedies, priority rights, or other similar terms of a financial
obligation of the obligated person, any of which affect
security holders, if material;"
16. "Default, event of acceleration, termination event,
modification of terms, or other similar events under the terms
of a financial obligation of the obligated person, any of which
reflect financial difficulties;" and
(v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this
Disclosure Agreement, as applicable), promptly file a completed
copy of Exhibit B to this Disclosure Agreement with the MSRB,
identifying the filing as "Failure to provide annual financial
information as required" when filing pursuant to Section 2(b)(ii) or
Section 2(c) of this Disclosure Agreement;
(f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year
by providing written notice of such change and the new Annual Filing Date to the
Disclosure Dissemination Agent and the MSRB, provided that the period between the
existing Annual Filing Date and new Annual Filing Date shall not exceed one year.
(g) Anything in this Disclosure Agreement to the contrary notwithstanding, any
Information received by the Disclosure Dissemination Agent before 10:00 a.m. Eastern
time on any business day that it is required to file with the MSRB pursuant to the terms of
this Disclosure Agreement and that is accompanied by a Certification and all other
information required by the terms of this Disclosure Agreement will be filed by the
Disclosure Dissemination Agent with the MSRB no later than 11:59 p.m. Eastern time on
the same business day; provided, however, the Disclosure Dissemination Agent shall
have no liability for any delay in filing with the MSRB if such delay is caused by a Force
Majeure Event provided that the Disclosure Dissemination Agent uses reasonable efforts
to make any such filing as soon as possible.
SECTION 3. Content of Annual Reports.
(a) Each Annual Report shall contain Annual Financial Information with respect to
the Issuer, including the financial information and operating data of the type included
with respect to the Issuer, in the Official Statement, including but not limited to:
1. Updates of the historical financial information set forth in the
Official Statement under the principal captions "THE WATER AND
SEWER SYSTEM" for the then -immediately preceding five fiscal
years and "APPENDIX G - SCHEDULE OF RATES, FEES AND
CHARGES."
2. Description of any additional indebtedness payable in whole or in
part from the Net Revenues (as defined in the Ordinance).
3. Any other financial information or operating data of the type
included in the Official Statement which would be material to a
holder or prospective holders of the Bonds.
(b) Audited Financial Statements will be included in the Annual Report. If
Audited Financial Statements are not available, then unaudited financial statements,
6
prepared in accordance with GAAP will be included in the Annual Report. In such event,
Audited Financial Statements (if any) will be provided pursuant to Section 2(d).
Any or all of the items listed above may be included by specific reference from
other documents, including official statements of debt issues with respect to which the
Issuer is an "obligated person" (as defined by the Rule), which have been previously filed
with the Securities and Exchange Commission or available on the MSRB Internet
Website. If the document incorporated by reference is a final official statement, it must be
available from the MSRB. The Issuer will clearly identify each such document so
incorporated by reference.
If the Annual Financial Information contains modified operating data or financial
information different from the Annual Financial Information agreed to in this continuing
disclosure undertaking related to the Bonds, the Issuer is required to explain, in narrative
form, the reasons for the modification and the impact of the change in the type of
operating data or financial information being provided.
SECTION 4. Reporting of Notice Events.
(a) The occurrence of any of the following events with respect to the Bonds
constitutes a Notice Event:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to
perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the Bonds, or other
material events affecting the tax status of the Bonds;
7. Modifications to rights of Bond holders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
7
10. Release, substitution, or sale of property securing repayment of the
Bonds, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the
Obligated Person;
Note to subsection (a)(12) of this Section 4: For the purposes of
the event described in subsection (a)(12) of this Section 4, the event
is considered to occur when any of the following occur: the
appointment of a receiver, fiscal agent or similar officer for an
Obligated Person in a proceeding under the U.S. Bankruptcy Code
or in any other proceeding under state or federal law in which a court
or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the Obligated Person, or
if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to
the supervision and orders of a court or governmental authority, or
the entry of an order confirming a plan of reorganization,
arrangement or liquidation by a court or governmental authority
having supervision or jurisdiction over substantially all of the assets
or business of the Obligated Person.
13. The consummation of a merger, consolidation, or acquisition
involving an Obligated Person or the sale of all or substantially all of
the assets of the Obligated Person, other than in the ordinary course
of business, the entry into a definitive agreement to undertake such
an action or the termination of a definitive agreement relating to any
such actions, other than pursuant to its terms, if material;
14. Appointment of a successor or additional trustee or the change of
name of a trustee, if material;
15. Incurrence of a financial obligation of the Borrower, if material, or
agreement to covenants, events of default, remedies, priority rights,
or other similar terms of a financial obligation of the Borrower, any
of which affect security holders, if material; and
16. Default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of a financial
obligation of the Borrower, any of which reflect financial
difficulties.
The Issuer shall, in a timely manner not later than nine (9) business days after its
occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a
8
Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the
occurrence pursuant to subsection (c) and shall be accompanied by a Certification. Such
notice or Certification shall identify the Notice Event that has occurred (which shall be
any of the categories set forth in Section 2(e)(iv) of this Disclosure Agreement), include
the text of the disclosure that the Issuer desires to make, contain the written authorization
of the Issuer for the Disclosure Dissemination Agent to disseminate such information,
and identify the date the Issuer desires for the Disclosure Dissemination Agent to
disseminate the information (provided that such date is not later than the tenth business
day after the occurrence of the Notice Event).
(b) The Disclosure Dissemination Agent is under no obligation to notify the
Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In
the event the Disclosure Dissemination Agent so notifies the Disclosure Representative,
the Disclosure Representative will within two business days of receipt of such notice (but
in any event not later than the tenth business day after the occurrence of the Notice Event,
if the Issuer determines that a Notice Event has occurred), instruct the Disclosure
Dissemination Agent that either (i) a Notice Event has not occurred and no filing is to be
made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to
report the occurrence pursuant to subsection (c) of this Section 4, together with a
Certification. Such Certification shall identify the Notice Event that has occurred (which
shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Agreement),
include the text of the disclosure that the Issuer desires to make, contain the written
authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such
information, and identify the date the Issuer desires for the Disclosure Dissemination
Agent to disseminate the information (provided that such date is not later than the tenth
business day after the occurrence of the Notice Event).
(c) If the Disclosure Dissemination Agent has been instructed by the Issuer as
prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice
Event, the Disclosure Dissemination Agent shall promptly file a notice of such
occurrence with MSRB in accordance with Section 2 (e)(iv) hereof. This notice may be
filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set
forth in Exhibit C-1.
SECTION 5. CUSIP Numbers. The Issuer will provide the Dissemination
Agent with the CUSIP numbers for (i) new bonds at such time as they are issued or
become subject to the Rule and (ii) any Bonds to which new CUSIP numbers are
assigned in substitution for the CUSIP numbers previously assigned to such Bonds;
provided, however, that a failure to do so shall not be a breach by the Issuer of this
Disclosure Agreement.
SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges
and understands that other state and federal laws, including but not limited to the
Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of
1934, may apply to the Issuer, and that the duties and responsibilities of the Disclosure
9
Dissemination Agent under this Disclosure Agreement do not extend to providing legal
advice regarding such laws. The Issuer acknowledges and understands that the duties of
the Disclosure Dissemination Agent relate exclusively to execution of the mechanical
tasks of disseminating information as described in this Disclosure Agreement.
SECTION 7. Voluntary Filing.
(a) The Issuer may instruct the Disclosure Dissemination Agent to file a
Voluntary Event Disclosure with the MSRB from time to time pursuant to a Certification
of the Disclosure Representative. Such Certification shall identify the Voluntary Event
Disclosure, include the text of the disclosure that the Issuer desires to make, contain the
written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate
such information, and identify the date the Issuer desires for the Disclosure
Dissemination Agent to disseminate the information. If the Disclosure Dissemination
Agent has been instructed by the Issuer as prescribed in this Section 7(a) to file a
Voluntary Event Disclosure, the Disclosure Dissemination Agent shall promptly file such
Voluntary Event Disclosure with the MSRB. This notice may be filed with a cover sheet
completed by the Disclosure Dissemination Agent in the form set forth in Exhibit C-2.
(b) The Issuer may instruct the Disclosure Dissemination Agent to file a
Voluntary Financial Disclosure with the MSRB from time to time pursuant to a
Certification of the Disclosure Representative. Such Certification shall identify the
Voluntary Financial Disclosure, include the text of the disclosure that the Issuer desires to
make, contain the written authorization of the Issuer for the Disclosure Dissemination
Agent to disseminate such information, and identify the date the Issuer desires for the
Disclosure Dissemination Agent to disseminate the information. If the Disclosure
Dissemination Agent has been instructed by the Issuer as prescribed in this Section 7(b)
hereof to file a Voluntary Financial Disclosure, the Disclosure Dissemination Agent shall
promptly file such Voluntary Financial Disclosure with the MSRB. This notice may be
filed with a cover sheet completed by the Disclosure Dissemination Agent in the form set
forth in Exhibit C-3.
(c) The parties hereto acknowledge that the Issuer is not obligated pursuant to
the terms of this Disclosure Agreement to file any Voluntary Event Disclosure pursuant
to Section 7(a) hereof or any Voluntary Financial Disclosure pursuant to Section 7(b)
hereof.
(d) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer
from disseminating any other information through the Disclosure Dissemination Agent
using the means of dissemination set forth in this Disclosure Agreement or including any
other information in any Annual Report, Audited Financial Statements, Notice Event
notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial
Disclosure, in addition to that required by this Disclosure Agreement. If the Issuer
chooses to include any information in any Annual Report, Audited Financial Statements,
Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or
10
Voluntary Financial Disclosure in addition to that which is specifically required by this
Disclosure Agreement, the Issuer shall have no obligation under this Disclosure
Agreement to update such information or include it in any future Annual Report, Audited
Financial Statements, Notice Event notice, Failure to File Event notice, Voluntary Event
Disclosure or Voluntary Financial Disclosure.
SECTION 8. Termination of Reporting Obligation. The obligations of the
Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall
terminate with respect to the Bonds upon the legal defeasance, prior redemption or
payment in full of all of the Bonds, when the Issuer is no longer an obligated person with
respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure
Dissemination Agent of an opinion of counsel expert in federal securities laws to the
effect that continuing disclosure is no longer required.
SECTION 9 . Disclosure Dissemination Agent. The Issuer has appointed
Digital Assurance Certification, L.L.C. as exclusive Disclosure Dissemination Agent
under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the
Disclosure Dissemination Agent, replace or appoint a successor Disclosure
Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination
Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor
Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of
Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the
Holders of the Bonds. Notwithstanding any replacement or appointment of a successor,
the Issuer shall remain liable to the Disclosure Dissemination Agent until payment in full
for any and all sums owed and payable to the Disclosure Dissemination Agent. The
Disclosure Dissemination Agent may resign at any time by providing thirty days' prior
written notice to the Issuer.
SECTION 10. Remedies in Event of Default. In the event of a failure of the
Issuer or the Disclosure Dissemination Agent to comply with any provision of this
Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement
shall be limited solely to a right, by action in mandamus or for specific performance, to
compel performance of the parties' obligation under this Disclosure Agreement. Any
failure by a party to perform in accordance with this Disclosure Agreement shall not
constitute a default on the Bonds or under any other document relating to the Bonds, and
all rights and remedies shall be limited to those expressly stated herein.
SECTION 11. Duties, Immunities and Liabilities of Disclosure
Dissemination Agent.
(a) The Disclosure Dissemination Agent shall have only such duties as are
specifically set forth in this Disclosure Agreement. The Disclosure Dissemination
Agent's obligation to deliver the information at the times and with the contents described
herein shall be limited to the extent the Issuer has provided such information to the
Disclosure Dissemination Agent as required by this Disclosure Agreement. The
11
Disclosure Dissemination Agent shall have no duty with respect to the content of any
disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination
Agent shall have no duty or obligation to review or verify any Information or any other
information, disclosures or notices provided to it by the Issuer and shall not be deemed to
be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other
party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's
failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to
determine the materiality thereof. The Disclosure Dissemination Agent shall have no
duty to determine, or liability for failing to determine, whether the Issuer has complied
with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively
rely upon Certifications of the Issuer at all times.
The obligations of the Issuer under this Section shall survive resignation or removal of
the Disclosure Dissemination Agent and defeasance, redemption or payment of the
Bonds.
(b) The Disclosure Dissemination Agent may, from time to time, consult with
legal counsel (either in-house or external) of its own choosing in the event of any
disagreement or controversy, or question or doubt as to the construction of any of the
provisions hereof or its respective duties hereunder, and shall not incur any liability and
shall be fully protected in acting in good faith upon the advice of such legal counsel. The
reasonable fees and expenses of such counsel shall be payable by the Issuer.
(c) All documents, reports, notices, statements, information and other materials
provided to the MSRB under this Agreement shall be provided in an electronic format
and accompanied by identifying information as prescribed by the MSRB.
SECTION 12. Amendment; Waiver. Notwithstanding any other provision
of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may
amend this Disclosure Agreement and any provision of this Disclosure Agreement may
be waived, if such amendment or waiver is supported by an opinion of counsel expert in
federal securities laws acceptable to both the Issuer and the Disclosure Dissemination
Agent to the effect that such amendment or waiver does not materially impair the
interests of Holders of the Bonds and would not, in and of itself, cause the undertakings
herein to violate the Rule if such amendment or waiver had been effective on the date
hereof but taking into account any subsequent change in or official interpretation of the
Rule; provided neither the Issuer or the Disclosure Dissemination Agent shall be
obligated to agree to any amendment modifying their respective duties or obligations
without their consent thereto.
Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent
shall have the right to adopt amendments to this Disclosure Agreement necessary to
comply with modifications to and interpretations of the provisions of the Rule as
announced by the Securities and Exchange Commission from time to time by giving not
less than 20 days written notice of the intent to do so together with a copy of the proposed
12
amendment to the Issuer. No such amendment shall become effective if the Issuer shall,
within 10 days following the giving of such notice, send a notice to the Disclosure
Dissemination Agent in writing that it objects to such amendment.
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely
to the benefit of the Issuer, the Disclosure Dissemination Agent, the Underwriter, and the
Holders from time to time of the Bonds, and shall create no rights in any other person or
entity.
SECTION 14. Governing Law. This Disclosure Agreement shall be
governed by and construed in accordance with the laws of the State of Florida without
regard to any conflict of laws provisions thereof.
SECTION 15. Counterparts. This Disclosure Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute
but one and the same instrument.
[Remainder of page intentionally left blank.]
13
The Disclosure Dissemination Agent and the Issuer have caused this Continuing
Disclosure Agreement to be executed, on the date first written above, by their respective
officers duly authorized.
DIGITAL ASSURANCE CERTIFICATION
LLC, as Disclosure Dissemination Agent
By:
Name:
Title:
THE CITY OF CLEARWATER, FLORIDA
as Issuer
By:
Name:
Title:
14
EXHIBIT A
NAME AND CUSIP NUMBERS OF BONDS
Name of Issuer The City of Clearwater, Florida
Obligated Person(s) The City of Clearwater, Florida
Name of Bond Issue: The City of Clearwater, Florida Water and Sewer Revenue
Refunding Bonds, Series 2020
Date of Issuance:
Date of Official Statement
CUSIP Numbers:
A-1
EXHIBIT B
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Issuer: The City of Clearwater, Florida
Obligated Person: The City of Clearwater, Florida
Name(s) of Bond Issue(s): The City of Clearwater, Florida Water and Sewer Revenue
Refunding Bonds, Series 2020
Date of Issuance:
Date of Disclosure
Agreement:
CUSIP Numbers:
B-1
NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report
with respect to the above-named Bonds as required by the Disclosure Agreement between
the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination
Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that
the Annual Report will be filed by
Dated:
cc:
Digital Assurance Certification, L.L.C., as
Disclosure Dissemination Agent, on behalf of
the Issuer
B-2
EXHIBIT C-1
EVENT NOTICE COVER SHEET
This cover sheet and accompanying "event notice" may be sent to the MSRB, pursuant to
Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).
Issuer's and/or Other Obligated Person's Name:
The City of Clearwater, Florida
Issuer's Six -Digit CUSIP Number:
or Nine -Digit CUSIP Number(s) of the bonds to which this event notice relates:
Number of pages attached:
Description of Notice Events (Check One):
1. "Principal and interest payment delinquencies;"
2. "Non -Payment related defaults, if material;"
3. "Unscheduled draws on debt service reserves reflecting financial
difficulties;"
4. "Unscheduled draws on credit enhancements reflecting financial
difficulties;"
5. "Substitution of credit or liquidity providers, or their failure to perform;"
6. "Adverse tax opinions, IRS notices or events affecting the tax status of the
security;"
7. "Modifications to rights of securities holders, if material;"
8. "Bond calls, if material, and tender offers;"
9. "Defeasances;"
10. "Release, substitution, or sale of property securing repayment of the
securities, if material;"
11. "Rating changes;"
12. "Bankruptcy, insolvency, receivership or similar event of the obligated
person;"
13. "Merger, consolidation, or acquisition of the obligated person, if material;"
14. "Appointment of a successor or additional trustee, or the change of name of
a trustee, if material;"
15. "Incurrence of a financial obligation of the obligated person, if material, or
agreement to covenants, events of default, remedies, priority rights, or other
similar terms of a financial obligation of the obligated person, any of which affect
security holders, if material;"
C-1
16. "Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a financial obligation of the obligated
person, any of which reflect financial difficulties;" and
17. "Termination, revocation or non -renewal of the Charter, or material
amendments or changes thereto."
Failure to provide annual financial information as required.
I hereby represent that I am authorized by the Issuer or its agent to distribute this
information publicly:
Signature:
Name: Title:
Date:
Digital Assurance Certification, L.L.C.
315 E. Robinson Street
Suite 300
Orlando, FL 32801
407-515-1100
C-2
EXHIBIT C-2
VOLUNTARY EVENT DISCLOSURE COVER SHEET
This cover sheet and accompanying "voluntary event disclosure" may be sent to the
MSRB, pursuant to the Disclosure Dissemination Agent Agreement dated as of
between the Issuer and DAC.
Issuer's and/or Other Obligated Person's Name:
The City of Clearwater, Florida
Issuer's Six -Digit CUSIP Number:
or Nine -Digit CUSIP Number(s) of the bonds to which this notice relates:
Number of pages attached:
Description of Voluntary Event Disclosure:
I hereby represent that I am authorized by the Issuer or its agent to distribute this
information publicly:
Signature:
Name: Title:
Date:
Digital Assurance Certification, L.L.C.
315 E. Robinson Street
Suite 300
Orlando, FL 32801
407-515-1100
C-3
EXHIBIT C-3
VOLUNTARY FINANCIAL DISCLOSURE COVER SHEET
This cover sheet and accompanying "voluntary financial disclosure" may be sent to the
MSRB, pursuant to the Disclosure Dissemination Agent Agreement dated as of
, between the Issuer and DAC.
Issuer's and/or Other Obligated Person's Name:
The City of Clearwater, Florida
Issuer's Six -Digit CUSIP Number:
or Nine -Digit CUSIP Number(s) of the bonds to which this notice relates:
Number of pages attached:
Description of Voluntary Financial Disclosure:
I hereby represent that I am authorized by the Issuer or its agent to distribute this
information publicly:
Signature:
Name: Title:
Date:
Digital Assurance Certification, L.L.C.
315 E. Robinson Street
Suite 300
Orlando, FL 32801
407-515-1100
C-4