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98-09 ~ ~ ~ ~ ------w- .d J..: . <.; :'.~ . , , RESOLUTIONS ,. .~', I # . 1 Y:, " c\ . !'. . . ~ " , . . " > L/g "->"'kJ'~~'___.'.~~":'lI ~....t{t:I<_;,-.-<.lj""T.:...~.~'r"""""~.~",.,,,,~ ';":'. ...t. ,,',":"".;J :...,,"':;.'. . ~. I.' "... ~.' . .'.. ... c. . . - j ..... ~ ~-:&,'\. , ;"'J.I' ,..,,)> I I" i ! RESOLUTION NO. 98-09 A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO EXCEED $9,000,000 CITY OF CLEARWATER, FLORIDA, GAS SYSTEM REVENUE REFUNDING BONDS, SERIES 1998; AWARDING THE SALE THEREOF TO WILLIAM R. HOUGH & CO. ON BEHALF OF ITSELF AND MERRILL LYNCH & CO. AND RAYMOND JAMES & ASSOCIATES, INC., SUBJECT TO THE TERMS AND CONDITIONS OF A PURCHASE CONTRACT; PROVIDING FOR THE ISSUANCE OF THE SERIES 1998 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 BONOS; PROVIDING FOR COMPLIANCE WITH A CONTINUING DISCLOSURE CERTIFICATE;" APPOINTING A PAYING AGENT AND REGISTRAR; APPOINTING AN ESCROW AGENT; AUTHORIZING THE PURCHASE OF MUNICIPAL BOND INSURANCE; A~~ORIZING THE PURCHASE OF A DEBT SERVICE RESERVE FUND SURETY BOND; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on August 15, 1991, the city Commission of the city of Clearwater, Florida (the "city" or the "Issuer") enacted Ordinance No. 5118-91 (the "Original ordinancell) to provide for the issuance of bonds payable from Net Revenues of the Gas System (as defined therein); and WHEREAS, on September 1, 1994, the city enacted Ordinance No. 5665-94 (the "1994 Bond Ordinance") which authorized the issuance of not to exceed $26,750,000 city of Clearwater, Florida, Gas System Revenue Bonds, Series [to be determined], as Additional Parity Obligations under the Original Ordinance to finance the costs of the Series 1994B Projects (as defined in the 1994 Bond ordinance); and WHEREAS, on September 18, 1997, the city enacted Ordinance No. 6188-97 (the 111994 Refunding Ordinance", and together with the original Ordinance and the 1994 Bond Ordinance, collectively, the "Bond OrdinaJ1.ceU) which authorized the issuance of not to exceed $9,000,000 city of Clearwater, Florida, Gas System Revenue Refundinq Bonds, series [TO be determined] (the "1994 Refunding Bonds"), . as Additional Parity Obligations under the Original Ordinance to advance refund all or a portion of the City' 5 outstanding Gas System Revenue Bonds, series 1994A (the "'1994 Refunded Bonds"); and WHEREAS, it is in the best interest of the city to designate the Refunding Bonds as "Gas System Revenue Refunding Bonds, Series 1998" to reflect the year of their issuance (the "Series 1998 Bonds"); and ~ WHEREAS, it is in the best interest of the city to provide for the negotiated sale of not to exceed $9,000,000 of Series 1998 Bonds; and WHEREAS, the Issuer intends on negotiating a sale of the Series 1998 Bonds with william R. Hough & Co. on behalf of itself and as representative of Merrill Lynch & Co. and Raymond James & Associates, Inc. (collectively, the "Underwriters") subject to the terms and conditions contained herein and set forth in a Purchase contract" a copy of which is attached hereto as Exhibit nA" (the "Purchase Contract") and authorizing its Mayor- Commissioner, or in her absence the Vice Mayor, and city Manager to execute such Purchase contract upon the approval of the terms thereof by the city Manager and city Finance Director; and WHEREAS, the Issuer now desires to approve the issuance of its Series 1998 Bonds, to sell its Series 1998 Bonds pursuant to the Purchase contract, to authorize the distribution of a Prelim- inary Official statement and an Official statement in connection with the issuance of the Series 1998 Bonds and to take certain other actions in connection with the issuance and sale of the series 1998 Bonds; and WHEREAS, the Issuer will be provided all applicable disclosure information by the Underwriters as required by Section 218.385, Florida Statutes, prior to the execution of the Purchase Contract, a copy of which disclosure is to be attached to the Purchase Contract; and . "'.(.') WHEREAS, this resolution shall constitute a supplemental resolution under the terms of the Bond Ordinance and all capitalized undefined terms used herein shall have the meanings set forth in the Bond ordinance; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA: SECTION 1. The not to exceed $9,000,000 of the Gas System Revenue Refunding Bonds, Series [to be determined] authorized by the 1994 Refunding Ordinance being offered pursuant to this resolution are hereby collectively designated as Series 1998 Bonds (the "Series 1998 Bondstt). The issuance of not to exceed $9,000,000 of the Series 1998 Bonds by the city is hereby approved upon the terms and conditions set forth in the Bond Ordinance and this Resolution. SECTION 2. It is in the best interest of the Issuer and the residents and inhabitants thereof that the Series 1998 Bonds be issued utilizing a pure book-entry system of registration. For so long as the Series 1998 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 2 ~-09 '~ ,":..,\ , \ . ~~ "~j) Blanket Letter of Representations between the city and Depository Trust Company as previously executed and delivered, the terms and provisions of the Blanket Letter of Representations shall prevail. SECTION 3. (a) Due to the willingness of the Underwriters to purchase not to exceed $9,000,000 in aggregate principal amount of the Series 1998 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 Issuer to sell the Series 1998 Bonds at a negotiated sale and such sale to the Underwriters pursuant to the terms and con- ditions 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 1998 Bonds from the Underwriters in the form of an executed Purchase Contract in the form approved herein. The city Manager and the Finance Director are hereby authorized to award the sale of the series 1998 Bonds on their determination that the offer submitted by the Underwriters for the purchase of any or all of the Series 1998 Bonds are within the following parameters: (1) in the case of the Series 1998 Bonds, the true interest cost rate shall not exceed 7.00%, and (2) the refunding of that' portion of the 1994 Refunded Bonds to be refunded by the Series 1998 Bonds shall provide the city with a net present value savings of not less than 4.0% of the par amount of such Refunded Bonds with an Underwriters' Discount and original issue discount not in excess of 4.00% of the principal amount thereof. The Finance Director, in coordination with the city's financial advisor and the Underwriters, is hereby authorized and directed to determine what portions of the 1994 Refunded Bonds are in the best interest of the city to be refunded through the issuance of the Series 1998 Bonds. The City Manager and the Finance Director are hereby authorized to award the sale of the Series 1998 Bonds as set forth above or to reject the offer from the Underwriters for any Series 1998 Bonds or any portion thereof. Such award shall be final. The acceptance of the offer to purchase the Series 1998 Bonds, to the extent a portion of the proceeds thereof are used to refund the 1994 Refunded Bonds shall constitute a decision to refund the 1994 Refunded Bonds in accordance with the 1994 Refunding Ordinance. SECTION 4. The Series 1998 Bands shall be sold to the Underwriters, upon the terms and conditions set forth in the Purchase Contract attached hereto as Exhibit UA" and incorporated by reference, upon the satisfaction of the conditions set forth in section 3 (b) hereof. The Mayor-commissioner, or in her absence the Vice Mayor, the city Manager and the city Clerk are hereby authorized to execute such Purchase Contract in substantially the form attached as Exhibit "An, with such addi- 3 qs-o? ~ ~j \~ tional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said off1.cers of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 5. The Series 1998 Bonds shall be dated, shall bear interest payable at the times, shall mature and shall be subject to redemption as provided in the Purchase Contract. The use of the proceeds of the Series 1998 Bonds, shall be as provided in the Official statement relating to the Series 1998 Bonds. SECTION 6. The Series 1998 Bonds shall be issued under and secured by the Bond ordinance and shall be executed and delivered by the Mayor-commissioner, the city Manager and the city Clerk 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. SunTrust Bank, Central Florida, National Association, Orlando, Florida, is hereby appointed Paying Agent and Registrar for the Series 1998 Bonds. , SECTION 8. First Union National Bank of Florida is hereby appointed as the Escrow Agent under the Escrow Deposit Agreement for the Series 1998 Bonds. SECTION 9. On the date of issuance of the Series 1998 Bonds, the Issuer may transfer the funds on hand in the various funds and accounts established for the 1994 Refunded Bonds in such manner as may be approved by a certificate of the Finance Director executed prior to or simultaneously with the issuance of the Series 1998 Bonds. SECTION 10. The distribution by the Underwriters of the Preliminary Official statement is hereby approved, confirmed and ratified. The distribution of a final Official Statement of the Issuer relating to the issuance of the Series 1998 Bonds is hereby approved, such final Official Statement to be in sub- stantially the form attached hereto as Exhibit liB", with such additional changes, insertions and omissions as may be made and approved by off icers of the Issuer executing the same, such execution to be conclusive evidence of any such approval. The Mayor-Commissioner, or in her absence the Vice Mayor, and the city Manager are hereby authorized to execute such Official Statement in substantially the form attached hereto as Exhibit liB". 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 Preliminary Official 4 9ro 'OCI '~ '~~, ,~.) - statement in the form attached hereto as Exhibit "B" is hereby deemed "final". SECTION 11. The city hereby covenants and agrees that, in order to provide for compliance by the eity with the secondary market disclosure requirements of the Rule, that it will comply with and carry out all of the provisions of that certain Continuing Disclosure certificate in substantially the form attached hereto as Exhibit II e" , to be executed by the city and dated the date of issuance and delivery of the Series 199B'Bonds, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate") . Notwithstanding any other provision of this Resolution, failure of the city to comply with such continuing Disclosure Certificate shall not be considered an event of default; however, any holder of Series 1998 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 ~.Jnder this Section and the Continuing Disclosure certificate. The Mayor-Commissioner, or in her absence the Vice Mayor, the city Manager and the City Clerk are hereby authorized to execute such continuing Disclosure Certificate in substantially the' form attached as Exhibit lie", with such addi- tional changes, insertions and omissions therein as do not change the substance thereof and as may be approved by the said officers of the Issuer executing the same, such execution to be conclusive evidence of such approval. SECTION 12. (a) Pursuant to the Bond Ordinance, MBIA Insurance corporation (UMBlA") has been selected to provide its Municipal Bond Insurance Policies as the credit Facility (as defined in the Bond Ordinance) as additional security for payment of principal and interest on the Series 1998 Bonds. selection of MBlA as the Credit Facility Issuer (as defined in the Bond Ordinance) is hereby ratified and confirmed and payment for such Municipal Bond Insurance policies from proceeds of the Series 1998 Bonds is hereby authorized. The Issuer hereby accepts the terms, conditions and agreements relating to the Municipal Bond Insurance Policies in accordance with the Commitment for Municipal Bond Insurance as attached hereto as Exhibit "0" and incorporated herein. A statement of insurance is hereby authorized to be printed on or attached to the Series 1998 Bonds for the benefit and information of the holders of the Series 1998 Bonds. (b) For so long as the credit Facility is applicable to the series 199B Bonds, the additional provisions set forth on Exhibit uE" attached hereto shall be applicable to the Series 1998 Bonds. In addition to the covenants and agreements of the city previously contained in the Bond Ordinance regarding the rights of. the Credit Facility Issuer which are incorporated herein and in Exhibit "E" hereto, the city hereby covenants and agrees for the benefit of the Credit Facility Issuer and the holders of the 5 Cft-09 ~ series 1998 Bonds while the Credit Facility insuring the Series 1998 Bonds is in full force and effect, to provide the Credit Facility Issuer with copies of any notices to be given to any party pursuant to the Bond Ordinance, and to provide prior notice to the Credit Facility Issuer of any amendments to the Bond Ordinance. (c) The City Manager and Finance Director are hereby authorized and directed to determine, with input from the City's financial advisor, whether the purchase of a debt service reserve fund surety policy or bond or similar instrument (a "Reserve Surety") would be in the best interest of the city rather than funding the debt service reserve fund for the Series 1998 Bonds with proceeds of the series 1998 Bonds or other legally available funds of the city. In the event the city Manager and the Finance Director determine that it would be in the best interest of the city to purchase a Reserve surety, they shall select the Reserve Surety offered by the lowest bidder whose Reserve Surety is in a form acceptable to MBIA. The city Manager and the Finance Director have reported to the city that the lowest bidder was AMBAC Assurance Corporation (ltAMBACU). The determination of the city Manager and Finance Director shall be final. In the event the City Manager and Finance Director determine to use a Reserve Surety, then this Resolution shall be deemed to include the provisions set forth in Exhibit F attached hereto, and the Mayor- Commissioner, or in her absence the Vice Mayor, and City Manager are authorized to execute and the Clerk is authorized to attest a financial guaranty agreement or similar agreement in substantially the form set forth in Exhibit F hereto, with such changes, insertions and omissions as may be approved by such off icers . For purposes hereof, the Reserve Requirement (as defined in the Original ordinance) for. the Series 199B Bonds shall be the amount equal to the lesser of (i) the Maximum Bond Service Requirement of the Series 1998 Bonds, (ii) 125% of the average annual Bond Service Requirement of the Series 1998 Bonds, or (iii) 10% of the net proceeds of the Series 1998 Bonds. SECTION 13. All prior resolutions of the Issuer inconsistent with the provisions of this resolution are hereby modified, supplemented and amended to c.)nform with the provisions herein contained and except as otherwise modified, supplemented and amended hereby shall remain in full force and effect. SECTION 14. The Mayor-Commissioner, or in her absence the Vice Mayor, the city Manager, the Finance Director, the city Attorney and the city Clerk or any other appropriate officers of the Issuer are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Resolution, the Purchase Contract, the Escrow Deposit Agreements or any other document referred to above as a prerequi- site or precondition to the issuance of the Series 1998 Bonds and .~~ any such representation made therein shall be deemed to be made ,"'.~l) 6 q~-o9 ~ ~ . . . ~ '. I. ~ ~ . > i~ i. i.:9 I !. on behalf of the Issuer. In the event both the Mayor- commissioner and the. Vice Mayor are unable to execute the documents related to the Series 1998 Bonds, then any other member of the City .Commission shall be authorlzed to execute such documents with the full force and effect as if the Mayor- Commissioner or the Vice Mayor had executed same. All action taken to date by the officers of the Issuer in furtherance of the issuance of the Series 1998 Bonds is hereby approved, conf~rmed and ratified. SECTION 15. This resolution shall become effective immediately upon its adoption. Passed and adopted by the city commission of the city. of Clearwater, Florida, this 15th day of January , 1998. ,. .. , . . (SEAL) By: ATTEST, : .' ., .. , . . ~~G.~a~,_ citeclerk...... .. . . Approved,as t~ form and ~"lrectn~' ss: 11 ~~. .city Att rney '.i:j .j', , '. " . i ~ ~ ; " , ("'.'~'i ~ 7. .q~"09 }: " , ) 1;...... .~..~~ ..1:'..;i~""~:"f::~'''',\''~:.:'+~TT,..~: -, , , .,~ .'. ..: '. ", ~. ' EXHIBIT A PURCHASE CONTRACT ~, < " ....~. . H " t>,".:" t.' . ":} , :'l >' ~". ; 'J :/~ :: j>;' , " ) " .J," ", 'J .. ~::~'". :';.. . .> .:.. . ,'.-;. \ . ), 'r., ,.0: .. ; . . ~ '.p " ! >11. .\:.... , " " " .~. ~ . 1,1 . . I d !. ", .: :~. . , o I I , i j , ! ~. '. , ~.: ,. . . " . . .:< ~:; ".- r: . ;, 'i ,\ , q<6 -09 ' ..:'~,,-~.Uorl-..J~""".":",:'''' . ..,J......... "...OJ ~ '.. .. t. I ~ " ~ CITY OF CLEARWATER, FLORIDA 58,105,000 Gas System Revenue Refunding Bonds Series 1998 BOND PURCHASE CONTRACT January 15, 1998 City Commission of the City of ClearWatert Florida Clearwatert Florida Dear Commission Members: .~ , r ~'f;.-o; William R Hough & Co. (the "Senior Manager")t on behalf of itself and Merrill Lynch & Co. . ., and Raymond James & Associates, Inc. (collectively with "the Senior Managert the "UnderwritersU) offers to enter into the following agreement with you (the "City") whicht upon your acceptance of this offert win be binding upon the City and upon the Undetwriters. This offer is made subject to your acceptance on or before 11 :59 p.m.t E.D.T., on the date hereof, and if not so accepted, will be subject to withdrawal by the Underwriters upon notice to the City at any time prior to the acceptance hereof by you. All capitalized teoos not otherwise defined herein shall have the meanings set forth in the Official Statement (as hereinafter defined). . , ~ 1. PUr'chase and Sale. Upon the terms and conditions and upon the basis of the representations. warranties and agreements set forth hereint the Underwriters hereby agree to purchase from the City for offering to the public and the City hereb"y agrees to sell and deliver to the Underwriters for such purpose. aU (but not Jess than all) of the City's $8t 10StOOO Gas System Revenue Refunding Bonds, Series 1998 (the IISeries 1998 Bonds"). The Series 1998 Bonds shall be dated as of January 1St 1998t shall be issued in such principal amounts and bear such rates ofinterest as set forth in Exhibit A attached hereto. Interest on the Series 1998 Bonds shall be payable on September 1, 1998t and on each March 1 and September I thereafter to maturity. The aggregate purchase price of the Series 1998 Bonds shall be [Purchase Price] (par Jess original issue discount of [OID] and less undezwriters' discount of [Discount]), plus accrued interest on the Series 1998 Bonds from February 1, 1998 to the date of Closing (as hereinafter defined). The Series 1998 Bonds initially shall be offered to the public at such prices or yields (including discounts and premiums) as indicated on Exhibit A attached hereto. The Series 1998 Bonds are issued pursuant to the authority of, and in full compliance with, the Constitution of the State of Florida, and other applicable provisions of law, particularly Chapter 166t Part lIt Florida Statutes, as amended and supplemented, the City Chartert as amended and supplemented, the Ordinance, and other applicable provisions oflaw. The 9'l ~()? ~ Series 1998 Bonds are special, limited obligations of the City payable solely from the Net Revenues of the System on a parity with the Parity Bonds. The Series 1998 Bonds are being issued by the City to (i) advance refund the Refunded Bonds; (ill) purchase the municipal bond insurance policy and reserve fund surety policy; and (iv) pay the costs of jssuance of the Series 1998 Bonds. The Underwriter is duly authorized to execute this Bond Purchase Contract. 2. Good Faith Deposit. Delivered to you herewith, as a good faith deposit. is a corporate check of the Underwriters payable to the order of the City in the amount of [Good Faith Amount] as security for the performance by the Underwriters of their obligations to accept and pay for the Series 1998 Bonds at Closing (as defined herein) in accordance with the provisions hereof. In the event that you accept this offer. said check shall be held uncashed by the City as a good faith deposit. At the Closing. the check will be returned to the Underwriters. In the event you do not accept this offer. the check shall be immediately returned to the Underwriters. If the Underwriters fail (other than for a reason pennitted hereunder) to accept and pay for the Series 1998 Bonds at the Closing as provided herein. the check may be cashed by you and the proceeds retained by the City as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriters, and the retention of such amounts shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults hereunder on the part of the Underwriters. ,.;.;:~) ,>, In the event that the City fails to deliver the Series 1998 Bonds at the Closing. or if the City is unable at or prior to the date of Closing to satisJY or cause to be satisfied the conditions to the obligations of the Underwriters contained in this Bond Purchase Contract. or if the obligations of the Underwriters contained herein shall be cancelled or terminated for any reason permitted by this Bond Purchase Contract, the City shall be obligated to immediately return the check to the Underwriters and the return of such check shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults hereunder on the part of the City. 3. Offering. It shall be a condition of your obligation to sell and deliver the Series 1998 Bonds to the Underwriters, and the obligation of the Underwriters to purchase and accept delivery of the Series 1998 Bonds, that the entire aggregate principal amount of the Series 1998 Bonds shall be sold and delivered by you and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a public offering ofall of the Series 1998 Bonds at the initial offering prices set forth in Exhibit A attached hereto; provided. however. the Underwriters reserve the right to make concessions to dealers and to change such initial offering prices as the Underwriters shall deem necessary in connection with the marketing of the Series 1998 Bonds. 4. Preliminary Official Statement and Official Statement. The City hereby confirms that it has heretofore made available to the Underwriters a Preliminary Official Statement of the City relating to the Series 1998 Bonds, dated [January . 1998J (which, together with the cover page and ~ appendices contained therein, is herein called the '1Preliminary Official Statementll), and authorizes 2 q~ -09 ,~ '~1 \.) ,'. ,"", ." " ". - and ratifies the use and distribution thereof to prospective purchasers and investors. Within seven business days of the acceptance hereof by the City, the City shall cause to be delivered the final Official Statement, dated the date hereof (which, together with the cover page and appendices contained therein, is herein called the "Official Statementll), executed on behalf of the City by its Mayor-Commissioner and by its City Manager and such reasonable numbers of conformed copies as the UnderWriters shalI request, which shall be sufficient in number to comply with paragraph (b)(3) of Rule 1 Sc2-12 of the Securities and Exchange Commission (17 CFR ~240.1 5c2-12) under the Securities Exchange Act of 1934 and with Rule G-32 and all other applicable rules of the Municipal Securities Rulemaking Board. The City, by its acceptance hereof, ratifies and approves the Preliminwy Official Statement and ratifies and approves and authorizes the Underwriters to' use the Official Statement and all documents described therein in connection with the public offering and the sale of the Series 1998 Bonds, The City hereby deems the Preliminary Official Statement "final" as of its date for purposes ofSEC Rule ISc2-12(b)(1). In accordance with Section 218,385, Florida Statutes. the Underwriters hereby discloses the infonnation required by such Section, including a truth-in-bonding statement, as provided in Exhibit B attached hereto. 5. U~e of Documents. You hereby authorize the use by the Underwriters of (a) the Ordinance, (b) the Preliminary Official Statement, (c) the Official Statement (including any supplements or amendments thereto), (d) the Escrow Deposit Agreement, dated as ofFebrnary 1, 1998 (the "Escrow Deposit Agreementt1), between the City and First Union National Bank, as Escrow Agent, relating to the refunding of the Refunded Bonds. (e) the Continuing Disclosure Certificate, of the City, dated as of February 1, 1998 (the "Continuing Disclosure Certificate"); and (t) any other documents related to the transactions contemplated in the Official Statement in connection with the public offering, ,sale and distribution of the Series 1998 Bonds. 6. Representations, Warranties and Agreements. The City hereby represents, warrants and agrees as follows: (a) As of the date of the Official Statement and at the time of Closing, the statements and information contained in the Official Statement will be true, correct and complete in all material respects and the Official Statement will not omit any statement or information which should be included therein for the purposes for which the Official Statement is to be used or which is necessary to make the statements or information contained therein, in light of the circumstances under which they were made, not misleading. (b) Between the date of this Bond Purchase Contract and the time of Closing. the City will not execute any bonds, notes or obligations for borrowed money (other than the Series 1998 Bonds which pledge either the full faith and credit of the City or any portion of the Net Revenues of the System, without giving prior written notice thereof to the Underwriters. (c) The City is, and will be at the date of Closing, duly organized and validly existing as a municipal corporation of the State of Florida, with the powers and authority set forth in the Act. 3 98 -()~ ., ',"" .01-'-' ...~::.I.~. . . ~ ',n " '.':,~': ",<:' .~. I'~' ,~. ! ...,..:,It.....'~<:...,....~:~,~:.~ "'r' ". ) ,"". ~ .~.1 I ~. t .........:,:,".,'".,_,. . ~_:t' . '" 't. ",.1 :'l,~a ~ 4 I'~ ~......", - ," ':. "..,.- . ;,' '.':,...,', ;.......,.,'..: ",..,' <' . "',.:' ':,,~;:~>;';:< ,>, " "~,":, : '~;', ,,~<:':, <,~?~;<.," )i'.:.::.~'" ,:' q, ,::; ',," ',. :;: .', >"\<::",,:: " ',.'<..}:' ':: ,:', '." , " :.:':':.'~':;'. '.', :' ,';.'. :'.:1:::"::': ':', :', :::': .""'-"':.>"';~"t7j;>:'.:"~/"I'f, ,,";'i;r'< 'o:'.'."}'j:\'~:>', 7': '.. '.~,' .'. ':,,,,,.. ," "':''::.;<':'':'" ;':'" ..' ,; ~' :,J..;-r, '::/~.<(, i::..j:,'~(::~:":~' '4Y.~ ":~: .~ ;. :'~\:~:,<.' '~"':> ' ,.: i.'."/,;'': , '; ,:'."~:'~':" ;',r I" . I' . ", .", 'I.,:".'.j ~ ""') .. ,. , v " '..... ... T '~ . '. ' '. ' ~ .< , . ~~.. .>' (d) The City has full legal right, power and authority to: (i) enter into this Bond Purchase Contract. the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (ii) adopt the Ordinance, (Hi) sell, issue and deliver the Series 1998 Bonds to the Underwriters as provided herein, and (iv) carry out and consummate the transactions contemplated by this Bond Purchase Contract, the Continuing Disclosure Certificate, the Escrow Deposit Agreement, the Ordinance and the Official Statement and the City has complied, and at the Closing will be in compliance, in all respects, with the tenns of the Act and with the obligations on its part in connection with the issuance of the Series 1998 Bonds contained in the Ordinance, the Series 1998 Bonds, the Escrow Deposit Agreement, the Continuing Disclosure Certificate and this Bond Purchase Contract. (e) By all necessary officiol action, the City has duly adopted the Ordinance, has duly authorized and approved the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the City, of this Bond Purchase Contract, the Escrow Deposit Agreement, the Continuing Disclosure Certificate and all other obligations on its part in connection with the issuance of the Series 1998 Bonds and the consummation by it of all other transactions contemplated by this Bond Purchase Contract in connection with the issuance of the Series 1998 Bonds~ upon delivery of the Series 1998 Bonds, each of the Ordinance, the Continuing Disclosure Certificate and the Escrow Deposit Agreement will each com:titute a legal, valid and binding obligation of the City. enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity, (f) When delivered to and paid for by the Underwriters at the Closing in accordance with the provisions of this Bond Purchase Contract, the Series 1998 Bonds will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the City in conformity with the Act and the Ordinance, and shall be entitled to the benefits of the Ordinance, including a prior pledge of and lien upon the Net Revenues of the System in accordance with the provisions ofthe Ordinance, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity. (g) The adoption of the Ordinance and the authorization, execution and delivery of this Bond Purchase Contract, the Continuing Disclosure Certificate, the Escrow Deposit Agreement and the Series 1998 Bonds, and compliance with the provisions hereof and thereof, will not conflict with, or constitute a breach of or default under any lawt administrative regulation, consent decree, ordinance. resolution or any agreement or other instrument to which the City was or is 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 City, or under the terms of any law. administrative regulation, ordinance, resolution or instrument, except as expressly provided by the Ordinance or the Series 1998 Bonds. (h) At the time of Closing, the City will be in compliance in all respects with the covenants and agreements contained in the Act and the Ordinance and no event of default and no event which. 4 19/09 . ~~r'.. '.: ". r ,": : c.... ~ ,.. .. . tl- . . " to J "..:....; "," ..' ,! .,".... ...r.>...,.....,.".:. ....: ~,~.. .~.~<. .~ .... . . . . ::.... ; .. ,.r: .*.: ..':.>.:~..:.~.:~:.:~~.:I:..1 . ~'c:' ." .:..!~..~.' t.,.,. ~ ....:... 'C'f .... c'",t+.::::/. ::.;..1....., ',:~~- '~. 0', ,......,.~. "; '..' "i.' . -, _ "T.f l' ~..':':'~.'.. ..' .' ....": .~.~...~>.:.~.~.....~; I". '......".. ~ . ",' . . ..<.... . , . .... 'to ',' . , .. . '"..' .. . /.' . . . . '1- .' :J'" . . " ....:.'>.:'.,., .. ..<':'::~ :,/ . ". ...~:.: tI~' ,:'.,.',":l'~::~I::J;;:::::' '<:>:'''I'~}~':~: . '~r/':'>: .:' '. ',,:', ,..' > .,.." .,'. ,i'.;:. ..... "'.'. ".. . ,. ..r" ,.... : . ..",~."., '.:J':", '-'::" , . .. '.' ' ''-. ,,.",_ ....,.....:'. .~ " ,el . ....-..- ~ ___ T.t~: i~ or',. '+' '\ .:......~: j':L~~.I":l.'" ..~. ".. .:f' '~.,' ',; . "'l":''':' - . ! ': ,~" (' d, ~< '- ~.:. .>'. .:...... .:,<:":',::; . , , . . I ~ L I. ". :: ~ .~ '. . , ". ~c' . +. . ~...:"..,. ~ ':": ~,"c. .,........ -: .... ..,. " . t-P. ~ " '. ., . . . ",),.. . . .... i' ....t... ".": . ~"'.. +.' "'c, ~'~L. . j:, .. ~ with the lapse oftime or giving of notice, or botht wou:d constitute an event of default under the Ordinance will have occurred or be continuing, I ! !' (i) Except as provided in the Official Statementt all approvals, consents, authorizations and orders of any governmental authority or agency having jurisdiction in any matter which would constitute a condition precedent to the performance by the City of its obligations hereunder and under the Ordinance, the Continuing Disclosure Certificate or the Escrow Deposit Agreement have been obtained and are in full force and effect. (j) The City is lawfully empowered to pledge and grant a lien upon the Net Revenues of the System for payment of the principal of and interest on the Series 1998 Bonds. ,~., (k) Except as disclosed in the Official Statement. to the best knowledge of the City. as of the date hereof; there is no action. suit. proceeding, inquiry or investigation, at law or in equity, before or by any court. government agency. public board or body. pending or threatened against the City. affecting or seeking to prohibit. restrain or enjoin the sale, issuance or delivery of the Series 1998 Bonds or the pledge of and lien on the Net Revenues of the System created by the Ordinance or contesting or affecting as to the City the validity or enforceability in any respect relating to the Series 1998 Bonds, the Ordinance. the Continuing Disclosure Certificate, the Escrow Deposit Agreement or this Bond Purchase Contract. or contesting the tax-exempt status of interest on the Series 1998 Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto. or contesting the powers of the City or the City Commission, or any authority for the issuance of the Series 1998 Bonds, the adoption of the Ordinance or the execution and delivery by the City of this Bond Purchase Contract. the Continuing Disclosure Certificate or the Escrow Deposit Agreement. (I) The City will furnish such informationt execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request in order to (i) qualify the Series 1998 Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate, and (ii) detennine the eligibility of the Series 1998 Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 1998 Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction or expend its own funds with respect to the foregoing. (m) The City 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 1998 Bonds to be applied in a manner contrary to that provided for in the Ordinance and as described in the Official Statement. ~ (n) Except as expressly disclosed in the Official Statement. the City neither is nor has been in default any time after December 31. 1975, as to payment of principal or interest with respect to an obligation issued or guaranteed by the City (except with respect to bonds for which it has acted solely as a "conduit issuer"). 5 9f -0 ? 1.:4. ':I.";'a. ~'1 . . " ..; ,:.t .: ',' .. . ~ : .'. . j.. . ,1- . ..,\ . .' >..;:" I ',"" ....1.. . . .. . i. : l'. ~ ~~ . T ~.< <: '.~ ~.." .,' '. -,' ":'i'~ " :. .' : . ": ~t.' '1,11. .. > ., . I J .,' .'<<'. .: ::"" ;':':," ,,', '..;:!:n' ';":':":":':, ,.', ;:,:.'.:i;~~,::.',tl' '~":~':}""'I:}t...;j,/::,;:-...:.. :. <~::. ':', ":'J~..L~..:' ",:':L.",:;>> ~.~f. .,,:.;.':.~,..:,~,!:'.::,;; " ,..' ~"':- ~ .1... ~ ~ ~ '" " ,I . +.~ . , , ,\ 4 I ~ ":. .t, ~.. : -' . ... " . ~ " .< a' .. : ~. -: . L' .... " '..t":'", .. '.' .< I' .'.. ," ('0' ,"'..\ c":.. ~ ..r.." . ':.. I ."; ~. .~~ ~ .:,' " , ,~ (0) The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (p) As of its date, the Preliminary Official Statement is hereby deemed "finaln by the City for purposes of SEC Rule 15c2-12(b)( 1), except for "permitted omissions" as defined in such Rule. ......l.\. :c 4/,,'.' (q) If, after the date of this Bond Purchase Contract and until the earlier of (i) 90 days from the end of the "underwriting period'! (as defined in SEC Rule 1 Sc2-12) or (ii) the time when the Official Statement is available to any person from a nationally recognized repository, but in no case less than 2S days following the end of the underwriting period, any event shall occur which might or would cause the Official Statement, a5 then supplemented or amended, to contain any untrue statement of a material fact or to 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 City shan notify the Underwriters thereof, and. ifin the opinion of the Underwriters such event requires the preparation and publication ofa supplement or amendment to the Official Statement, the City win at its own expense forthwith prepare and furnish to the Underwriters a sufficient number of copies of an amendment of or supplement to the Official Statement (in fonn and substance satisfactory to Counsel to the Underwriters) which win supplement or amend the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading. The Underwriters shall notifY the City in writing of the date on which the "underwriting periodll ends. (r) The City shall undertake, pursuant to the Ordinance, to comply with the Continuing Disclosure Certificate. 7. . Closing. At 1 :00 p.m.. E.D.T., on February [ ], 1998, or at such time on such earlier or later date as ~han be agreed upon, you will deliver to the Underwriters, at the location and place to be agreed upon by you and the Underwriters. the Series 1998 Bonds in definitive fonn, duly executed, together with the other documents herein mentioned~ and the Underwriters will accept such delivery and pay at such location as may be agreed upon by you and the Underwriters the purchase price of the Series 1998 Bonds as set forth in Section 1 hereof, plus accrued interest on the Series 1998 Bonds from January 15, 1998, by immediately available funds, payable to the order of the City. This delivery and payment is herein called the "Closing." The Series 1998 Bonds shall be made available to the Underwriters at least one business day before the Closing for purposes of inspecting and packaging. The Series 1998 Bonds shaH be prepared and delivered as fully registered Bonds. 8. Closing Conditions. The Underwriters have entered into this Bond Purchase Contract in reliance upon the representations and warranties of the City herein contained and the performance by the City ofits obligations hereunder, both as of the date hereof and as of the time of Closing. The obligations of the Underwriters under this Bond Purchase Contract are and shall be subject to the following conditions: .~ 6 c;~ '09 ~' , +>.' : . i- . ~ . I I ;..-., j '. ... Ie,. ;..... .":'~' ~, . .i" '. ~ a' .' + .". '... . i r ", .....I,...:.~.I;~:..:. .....'..t".1 ..' .+:J~"~I.' ',1" \....".:... "'\":~: 'f:.'.:~'."~," ..:.~...:. '0;' ..~... ..../r.....r..~.,: ';.: :'" .: >';~, :;''',-'' .::~I,:1:.';';Ii;,' <.:: ':< ~': I~'" ie',;o .', \'.;, :;:,' ~ .:. '.' ,.'~,f'........:... '1" ,~.'. ,', ',;,_,'. ":'~""'"' ~.' <'..r~,;::'.r..i..'."."':':"":" .." .'..1"'" ' ": " ":~ . . . . .. .:.:. ~ .. '.'\. '" . t. .... 'u.~'. ~ ~ ',' . 'e . ~. I " . "."., .' . . :.:""" +. .. ~ . ", '" t" . }'.::. '. .. ~ : ~ :. . 0':. ':. <. ,". .:...... .... ,"," , f..:" .' '; .oc' ;>.. " :' .- '. . . - . . ~ ('. ...!.. '. ~ . . '. >" , .'1"" . j< ,~ (a) The representations, warranties and agreements of the City contained herein shall be true and correct and complied with as of the date hereof and as of the date of the Closing, as ifmade on the date of the Closing. (b) At the time of the Closing, the Ordinance shaH be in full force and effect in accordance with its tenns and shaH not have been amended, modified or supplemented except as amended, modified or supplemented by a resolution incorporating the terms and conditions contained in the municipal bond insurance commitment of the Insurer (as defined herein), and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underv,.Titers. (c) At the time of Closing, a resolution of the City shall have incorporated the terms and conditions contained in the municipal bond insurance commitment of the Insurer into the Ordinance. (d) At the time of the Closing, all official action of the City relating to this Bond Purchase Contract, the Continuing Disclosure Certificate, the Escrow Deposit Agreement and the Series 1998 Bonds shall be in full force and effect in accordance with their respective terms and shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriters. .-:~<;. ... ..;~ f (e) The Underwriters shall have the right to cancel the agreem,ent contained herein to purchase, to accept delivery of and to pay for the Series 1998 Bonds by notitying you in writing of their intention to do so if: (i) between the date hereof and the Closing, legislation shall have been enacted by the Congress of the United States, or recommended to the Congress for passage by the President of the United States, or favorably reported for passage to either House of Congress by any Committee of such House, or passed by either House of Congress, or a decision shall have been rendered by a court of the United States or the United States Tax Court, or a ruling shall have been made or a regulation shall have been proposed or made by the Treasury Department of the United States or the Internal Revenue Service, with respect to the federal taxation of interest received on obligations of the general character of the Series 1998 Bonds, which, in the opinion of Counsel for the Underwriters has, or will have, the effect of making such interest subject to inclusion in gross income for purposes of federal income taxation, except to the extent such interest shall be includable in gross income on the date hereof, or (ii) between the date hereof and the Closing, legislation shall be enacted or any action shall be taken by the Securities and Exchange Commission which, in the opinion of Counsel for the Underwriters, has the effect of requiring the contemplated issuance or distribution of the Series 1998 Bonds to be registered under the Securities Act of 1933, as amended, or of requiring the Ordinance to be qualified under the Trust Indenture Act of 1939, as amended, or ,~ (Hi) an event described in paragraph (5) of Section 6 hereof shaU have occurred which requires an amendment or supplement to the Official Statement and which, in the 7 cn-09 - ~ ,<":");) . J'" ~~ .~.' : '." > ..~,., .' '~~.' '. ,I. <' . ": ;:,:'>".". :~,.;.:.:::' ,<' , . < .,;. ,,"'. 'J'; ~' "r '......, ~. ," .' . .: " ~:;, -. . ,1)".... -< '". reasonable opinion of the Underwriters, materially adversely affects the marketability of the Series 1998 Bonds or the market price thereof: or (iv) in the opinion of the Underwriters. payment for and delivery ofthe Series 1998 Bonds is rendered impracticable or inadvisable because (A) trading in securities generally shall have been suspended on the New York Stock Exchange, Inc., or (B) a general banking moratorium shall have been established by Federal, New York or Florida authorities, or (C) the engagement of the United States in a war or other hostilities or the threat of war or other hostilities, or (v) an order, decree or injunction of any court of competent jurisdiction, or any order, ruling, regulation or administrative proceeding by any governmental body or board, shall have been issued or commenced, or any legislation enacted, with the purpose or effect of prohibiting the issuance, offering or sale of the Series 1998 Bonds as contemplated hereby or by the Official Statement or prohibiting the adoption of the Ordinance or the performance thereof. or (vi) between the date hereof and the Closing, the City has, without the prior written consent of the Underwriters. offered or issued any bonds, notes or other obligations for borrowed money, or incurred any material liabilities, direct or contingent, other than as described in the Official Statement, in either case payable from the full faith and credit of the City or any portion of the Net Revenues of the System, or (vii) the President of the United States, the office of Management and Budget, the Department of Treasury, the Internal Revenue Service or any other governmental body, department, agency or commission of the United States or the State of Florida shall take or propose to take any action or implement or propose regulations, rules or legislation which, in the reasonable judgment of the Underwriters, materially adversely affects the market price of the Series 1998 Bonds or causes any material infonnation in the Official Statement, in light of the circumstances under which it appears, to be misleading in any material respect, or (viii) any executive order shall be announced, or any legislation, ordinance, rule or regulation shall be proposed by or introduced in, or be enacted by any governmental body, department. agency or commission of the United States or the State of Florida or the State of New York, having jurisdiction over the subject matter, or a decision by any court of competent jurisdiction within the United States or within the State of Florida or the State of New York shall be rendered which, in the reasonable judgment of the Underwriters, materially adversely affects the market price of the Series 1998 Bonds or causes any information in the Official Statement to be misleading in any material respect, or (ix) prior to Closing. either (A) Moody's Investors Service or Fitch Investors Service shall infonn the City or the Underwriters that the Series 1998 Bonds will not be rated at least AAA and Aaa., respectively or (8) MBIA (the "Insurer") shall inform the Underwriters or the City that it shall not deliver its municipal bond insurance policy (the "Policy") at the time of Closing, or 8 1ft - ()Cj . ,'. , ,t.. ...', I . . ~'.' .'. ...... 'c' ' ...... .... :::',' .' .<.,:", , .,1... ., ....<....:.~.:L.... ",.' ...,....... ..... ..i '.'~'. :.,:..~.;,..::.~..: .:..:", ........-l.~c ~.:.. .' ,.'. ,., .. ".. . .1 '. .. ..', ..',,:. ';o' .. :.', ;, I!':;' ',,' '::' . ,: ',.. ..<' . ... ."'. ..:',';: /.'. :':~:..t<,.:.;.::~ .:...::..:~.....':: '. ..' ." " , .'. :'< ~ f.,'.:. . ," .:', .:.' .," . ~ .,'~" :".':'/'::::,,:,:;,:;;"?t4..;li>, :tr:u ,,:::,~>,; ;: /+;i:.,:' -,':' "':' .... : ~""~I ~.,~I~.'.:~'...'.C..4' ..............~':.... '.:j.:'. ".::~. - :.": :::.. . .,', ., "",.;'." ....,. '."," '.... . , j . ," . /.: :_ ~ ~.I' .\ do ". \.' " ,',I . , .'. I' , '; ". ,'" ., , .. "1' .J .... . t' '. . <.-.:.!:....:. .::' - .,; . .1 j .. ..... t, . ;'.':, . ,c " '. .'" c, .~ " '. ..' .:. ". " -.... '~ (x) the rating of any class of security of the City shall have been downgraded or withdrawn by a national credit rating service. (0 At or prior to the date of the Closing, the Underwriters shall receive the following documents: (i) The Ordinance certified by the Clerk of the City under seal as having been duly enacted, adopted or executed, as the case may be, by the City and as being in effect, with only such supplements, modifications or amendments as may have been agreed to by the Underwriters. (ii) Fully executed counterparts of (A) the Escrow Deposit Agreement (B) the Continuing Disclosure Certificate, and (C) the Official Statement and copies of conformed Official Statements sufficient to satisfy the requirements of Section 4 hereof. (Hi) A final appro\wg opinion of Bryant, Miller and Olive, P.A., Bond Counsel to the City, addressed to you, dated the date of the Closing, in substantially the form included in the Official Statement as Appendix D. ....../~4:\ - " - ,. (iv) A letter of Bryant, Miller and Olive, P.A., addressed to the Underwriters, and dated the date of Closing, to the effect that their final approving opinion referred to in Section 8(f)(iii) hereofmay be relied upon by the Underwriters and the Insurer to the same extent as if such opinion were addressed to the Underwriters and the Insurer. (v) A supplemental opinion of Bryant, Miller and Olive, P.A., addressed to you and the Underwriters, and dated the date of Closing, to the effect that, (A) the information set forth in the Official Statement under the headings, ItINTRODUCTION," ItPURPOSES OF THE SERIES 1998 BONDS," "DESCRIPTION OF THE SERIES 1998 BONDS," "SOURCEOFPAn1ENT AND SECURITY FOR THE SERIES 1998 BONDS," "FLOW OF FUNDS," "COVENANTS," nLEGALITY/, and "VALIDATION" (other than the financial and statistical information included therein as to which no opinion need be expressed), insofar as such information purports to be descriptions or summaries of the Act, the Ordinance and the Series 1998 Bonds, constitute correct summaries of the matters set forth or the documents referred to therein, and the information under the heading ItT AX EXEMPTION" is correct, and (B) the Series 1998 Bonds are not required to be registered under the Securities Act of 1933, as amended, and it is not necessary to qualify the Ordinance under the Trust Indenture Act of 1939, as amended. . <.) (vi) An opinion of Pamela K. Akin, Esquire, City Attorney, addressed to you, the Insurer and the Underwriters, and dated the date of the Closing, to the effect that, (A) the City is a municipal corporation, duly created and validly existing and has full legal right, power and authority to adopt the Ordinance and perfonn its obligations under the Ordinance, and to authorize, execute and deliver and to perfoon its obligations under this Bond Purchase Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (B) the City has duly adopted the Ordinance and has duly authorized, executed and delivered this 9 98 -09 -- ~ ~ ~ Bond Purchase Contractt the Continuing Disclosure Certificate and the E.scrow Deposit Agreement, and assuming the due authorization, execution and delivery of this Bond Purchase Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement by the other parties thereto, each such instrument constitutes the legal. binding and valid obligation of the City, enforceable in accordance with its respective tenns; provided, however, the enforceability thereofmay be subject to bankruptcy, insolvencYt reorganization. moratorium and other similar Jaws affecting creditors' rights generally and subject, as to enforceabilitYt to general principles of equity and the Series 1998 Bonds have been properly executed by the proper officers of the City, (C) the information in the Official Statement as to legal matters relating to the City, the Actt the Series 1998 Bonds and the Ordinance is correct in all material respects and does not omit any statement, which in her opinion, should be included or referred to therein, and in addition, with respect to the infonnation in the Official Statement and based upon her review of the Official Statement as City Attorney and without having undertaken to determine independently the accuracy or completeness of the contents of the Official Statement, she has no reason to believe that the Official Statement (except for the financial and statistical data contained therein and the information relating to the Insurer and the Policy, as to which no view need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading, (D) the use of the Preliminary Official Statement by the Underwriters for the purpose of offering the Series 1998 Bonds for sale has been duly authorized and ratified by the City, (E) the Official Statement has been duly authorized, executed and delivered by the City>> and the City has consented to the use thereof by the Underwriters, (F) to the best of her knowledge, the adoption of the Ordinance, and the authorization, execution and delivery of this Bond Purchase Contract, the Escrow Deposit Agreement, the Continuing Disclosure , Certificate and the Series 1998 Bonds>> and compliance with the provisions hereof and thereof, will not conflict with, or constitute a breach of or default under, any lawt administrative regulation, consent decree, ordinance>> resolution or any agreement or other instrument to which the City was or is subjectt as the case may be, nor will such enactment, adoption, execution, deliveryt 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 CitYt or under the terms of any law, administrative regulation, ordinance, resolution or instrument, except as expressly provided by the Ordinance, (G) to the best of her knowledge, all approvals, consents, authorizations. and orders of any governmental authority or agency having jurisdiction in any matter which would constitute a condition precedent to the perfonnance by the City>> of its obligations hereunder and under the Ordinance have been obtained and are in full force and effectt (H) the City is lawfully empowered to pledge, and grant a prior lien on, the Net Revenues of the System for payment . of the principal of and interest on the Series 1998 Bonds as the same becomes due and payable, and (I) except as disclosed in the Official Statement, to the best of her knowledge, as of the date of such opinion>> there is no action, suit, proceeding, inquiry or invesrigation, at law or in equity, before or by any courtt govenunent agency, public board or body, pending or threatened against the City, affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Series 1998 Bonds, or the pledge of and lien on the Net Revenues of the System, or contesting or affecting the validity or enforc\;ability in any respect of the '" /? <.) 10 qf -09 .~ ,- "~') , .:;1 -J ..~ . ~ ~,"')-':~ . ~ '...;. .......c : . \ #:' .....~ : ~ . I"'," + -~ I.,'" . (......... j ,\~ .. V-- Series 1998 Bonds, the Ordinance, the Escrow Deposit Agreement, the Continuing Disclosure Certificate or this Bond Purchase Contract, or contesting the tax-exempt status of interest on the Series 1998 Bonds, or contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto, or contesting the powers of the City or the City Commission, or any authority for the issuance of the Series 1998 Bends, the adoption of the Ordinance or the execution and delivery by the City of this Bond Purchase Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement. \ (vii) A certificate, which shall be true and correct at the time of Closing, signed by . the Finance Director/City Treasurer of the City and the Managing Director and Executive Officer of the System, or such other officials satisfactory to the Underwriters, and in fonn and substance satisfactory to the Underwriters, to the effect that, to the best of their knowledge and belief (A) the representations, warranties and covenants of the City contained herein are true and correct in all material respects and are complied with as of the time of Closing, (B) the information appearing in the Official Statement under the caption liTHE SYSTEM, 11 11COMBINED DEBT SERVICE REQUIREMENTS," and 'HISTORICAL COVERAGE OF MAXTh1UM ANNUAL DEBT SERVICE BY THE SYSTEM NET REVENUES" has been provided by the City specifically for inclusion therein and is true, correct and complete as of . its date, (C) except as described under the caption referred to in (B) above, since the date of the audited financial statements contained in the Official Statement, there has been no material adverse change in the financial condition of the System, and (0) the Official Statement did not as of its date, and does not as of the date of Crosing, 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 the Official Statement is 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 (provided, that no opinion need be expressed regarding the information contained therein relating to the Insurer or the Policy). (viii) A certificate of an authorized representative of SunTrust Bank, Central Florida, National Association, Orlando, Florida (the lIBank"), as Registrar and Paying Agent to the effect that (A) the Bank is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and is duly authorized to exercise trust powers in the State of Florida, (8) the Bank has all requisite authority, power, licenses, pennits and franchises, and has full corporate power and regal authority to execute and perform its functions under the Ordinance, (C) the performance by the Bank of its functions under the Ordinance will not result in any violation of the Articles of Association or Bylaws of the Bank, any court order to which the Bank is subject or sny agreement, indenture or other obligation or instrument to which the Bank is a party or by which the Ban.'< is bound, and no approval or other action by any governmental authority or agency having supervisory authority over the Bank is required to be obtained by the Bank in order to perform its functions under the Ordinance, and (D) to the best of such representative's knowledge, there is no action, suit, proceeding or investigation at law or in equity before any court, public board or body pending or, to his or her knowledge, threatened against or affecting the Bank wherein an unfavorable decision, ruling or finding on an issue 11 qg -01 ,. '.. ~:.~r' '. , . . ': - :-.:. . Ie, ...;. :~:- j.'.:.~"; ,~ .' >:,':.,;~:._...'., ~.:", ....r . .. ,.::..;'::: :..../'.;:. '.. . ". . : ~'. 'f .. :.;'..::~~~ .;~.~:;}'~..~~":: ~:',: .. .;>.~ . - ",' . I . :....:...t~J '. '.":)J.." 0'",;, . , .' I :. , <;. .:....i(,: ':..: ~:>/ '., ::," ~ . ."'. , ," "t . .,.." . . "~: :~.~ 'II: ,..' .,.... . , '7 ,".. I~' ,.'" ,. ... ~ '..l' . : . . .. . , " .... " '....... i . .,;'i';.:f;i," . " -I. ,'.' ,'," . . ::. ~ ~ l' ',., ~ .; ~ : :1 : l..". ., .. .t \ ,... .' 'Ef<:' . jf;:::'~.?:.:;g::~::,C,:">;' .. .... .:1-' .:. ,. . .. <', , 'j . ~ . ..... I' " . ~ ,. .. " .~ t,' '. . '. ., . , .... ~. I ;....:r...J:> , , " ':" r, :;:.::::,.>,': .,.' . ',. ~' , "~ .. .,,; :, . I.... ~- .. ..,; .' .' .: :.- '.'~':" ..~ ~ . " '" 'ill. ~ (A!)~) .......... ~~.... .--J ': ._.'i : ",., ',L. - raised by any pany thereto is Hkely to materially and adversely affect the abiHty of the Bank to perform its obligations under the Ordinance, (viii) . A certificate of an authorized representative of First Union National Bank (the "Escrow Agent"), as Escrow Agent to the effect that (A) the Escrow Agent is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America and is duly authorized to exercise trust powers in the State of Florida, (B) the Escrow Agent has all requisite authority, power, licenses, permits and franchises, and has full corporate power and legal authority to execute and perform its fum.'tions under the Escrow Deposit Agreement, (C) the performance by the Escrow Agent of its functions under the Escrow Deposit Agreement will not result in any violation of the Articles of Association or Bylaws of the Escrow Agent, any court order to which the Escrow Agent is subject or any agreement. indenture or other obligation or instrument to which the Escrow Agent is a party or by which the Escrow Agent is bound, and no approval or other action by any governmental authority or agency having supervisory authority over the Escrow Agent is required to be obtained by the Escrow Agent in order to perform its functions under the Escrow Deposit Agreement, (0) the Escrow Deposit Agreement constitutes a vaJid and binding obligation of the Escrow Agent in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity and (E) to the best of such representative's knowledge, there is no action, suit, proceeding or investigation at law or hi equity before any coun, public board or body pending or, to his or her knowledge, threatened against or affecting the Escrow Agent wherein an unfavorable decision, ruling or finding on an issue raised by any party thereto is likely to materially and adversely affect the ability of the Escrow Agent to perform its obligations under the Escrow Deposit Agreement. (x) An executed copy of the Escrow Deposit Agreement. (xi) An executed copy of the verification report of McGladrey & Pullen, LLP, as described in the Official Statement under the heading "VERIFICATION OF MATHEMATICAL CO:MPUTATIONS," (xii) The Policy issued by the Insurer and the Surety Policy issued by AMBAC. (xiii) An opinion ofgeneraI counsel to the Insurer or a certificate of an officer of the Insurer dated the date of the Closing and addressed to the Underwriters, concerning the Insurer, the Policy, and the information relating to the Insurer and the Policy contained in the Official Statement, in fonn and substance satisfactory to Bond Counsel, the Underwriters and Counsel to the Underwriters. (xiv) A certificate of tile Mayor deeming the Preliminary Official Statement "final" as of its date for purposes of Rule 15c2-12; 12 crz-oq '... ~'. ~~:} . ~:,~"t., ,.' ,.. .. .:. . ~ . i.'. .: -' . '. . . ; '"::. , . .' ., ; '.'.' . . . rt." L~. > :.l, ' c. .' ... :\ .~~:..>.~.,.<.I..::,,: ."/ I'; ,'. ,'. ,., ,. ;, , . ~ ' . .. ., . ,\,,<.~+,~'/~' .:p. 'lI,'~ : :...~ . . ,~'." "'; '::, +;:".~' ~:~/~:,. . . . t . ~ :. . . . . .;,' '~'.' ., .~ :., . . ",\ ~,'" ,.'. . .,' ~t ~ '." , ',I '.' " . c, . . ~ . ; ". ,..;. " .. '. ~. . . .. . ..; . . ' ~ ill c' ... ..'~~ ':'., ..~.:...., ~ . . .. (/ ....! .{ .. ,:,~'.. ."~ #,1. .'., :'''~1 . .'. ,. ~ .. ~ . . .' .: '~~'~."" c ., " .:~ " . ~ I' ~.. tj'I-' .:" "'.":I~I' {'. 'C:/~;: .~:~. ,~.,.'..it(.~..'/ .. .:,:ti.r..'~,:::.'-': .~:',: ......', .;.:...J. ,', "CJ..... .... .' c';: . t,'. '~.:" .~ ' .;. ." f' ,.< .. : .... .' . ~. . .' ..:. ~,~. '. .. ' i .', . ~ .' ~~ '. . . ,.... '. ."" . , ./. .1," '. ;....... ;'.t.: 'I :......'..... . c. : ~', \ ~:.~r " " ~ ,,' \ .'~.: '._< ' ~', fool.: ...~..:.~ :..~....I).~.., -.~ , , , .. '. ........ '." . '. .... ,.... ...'.: ...:..... ...... ,.'" '. J.... '..'.. " ", \. + }>. ~.~. ' ..' '. ,. . ~:: - "" : ';. . . " ....' . ..... . , " . --. ... ~ . ...;" ).:':.,' ); ~'. , .. " .. ... .... ~ '. " ~ .;' : ~. . . .'. ';':. ., - " ,~ (xv) A certifiCation as a part of the general certificate of certain officials of the City to the effect that: (i) the unaudited financial statements of the System included in the Official Statement have been prepared in accordance with generally accepted governmental accounting principles consistently applied; (ii) nothing has come to the attention of such officials as of the date hereof which would lead such officials to believe that any material change to such unaudited financial statements of the System has been, or will be, proposed by the auditors; and (iii) such officials are not aware of any material adverse changes in the financial status or results of operations of the System from that set forth in such unaudited financial statements; (xvi) A letter of Fitch Investors Service to the effect that the Series 1998 Bonds have been assigned a rating no less favorable than "AAAu and a letter ofMoody's Investors Service to the effect that the Series 1998 Bonds have been assigned a rating no less favorable than IIAaa," both of which ratings shall be in effect as of the date of Closing. (xvii) Such additional legal opinions, certificates, instruments and other documents as the Underwriters may reasonably request to evidence the truth and accuracy. as of the date. hereof and as of the date of the O,osing. of the City's representations and warranties contained herein and of the statements and infonnation contained in the Official Statement and the due perfonnance or satisfaction by the City on or prior to the date of Closing of aU the agreements then to be perfonned and conditions then to be satisfied by it. .#.,;;) If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to ........,. purchase, to accept delivery of and to pay for the Series 1998 Bonds contained in this Bond Purchase Contract and the Underwriters does not waive such inability in writing, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Series 1998 Bonds shall be tenninated for any reason permitted by this Bond Purchase Contract, this Bond Purchase Contract shall terminate, the good faith deposit described in Section 2 hereof shall be returned to the Underwriters and neither the Underwriters nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriters set forth in Section 9 hereof shall continu~ in full force and effect. 9. Expenses. The Underwriters shall be under no obligation to pay, and the City shall pay, any expense incident to the perfonnance of the City's obligations hereunder including, but not limited to: (a) the cost of preparation, printing and delivery of the Ordinance; (b) the cost of preparation and printing of the Series 1998 Bonds; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel~ (d) the fees and disbursements of the City's certified public accountants; (e) the fees and disbursements of any experts, consultants or advisors retained by the City; (t) fees for bond ratings; (g) the fees and expenses of the Registrar. the Paying Agent, Escrow Agent. Verification Agent and of their respective counsel; and (h) the costs of preparing, printing and delivering the Preliminary Official Statement and the Official Statement and any supplements or amendments thereto. The Underwriters shall pay: (a) the cost of preparing. printing and delivery of this Bond .--J Purchase Contract; (b) all advertising expenses; and (c) all other expenses incurred by them or any 13 qg.;09 .' .~ of them in connection with the public offering of the Series 1998 Bonds. In the event that either party shall have paid obligations of the other as set forth in this Section 9, adjustment shall be made at the time of the Closing. 10. Notices. Any notice or other communication to be given to you under this Bond Purchase Contract may be given by mailiug the same to City of Clearwater, Florida, 100 South Myrtle Ave., Clearwater, Florida 34616-5520, to the attention of Finance Directorl City Treasurer. and any such notice or other communication to be given to the Underwriters may be mailed to William R. Hough & Co., 100 Second Avenue South, Suite 800, S1. Petersburg, Florida 33701. 11. Parties in Interest. This Bond Purchase Contract is made solely for the benefit of the City and the Underwriters and no other party or person shall acquire or have any right hereunder or by virtue hereof. All your representations, warranties and agreements in this Bond Purchase Contract shall remain operative and in full force and effect and shall survive the delivery of the Series 1998 Bonds. ''''') '.,~..4 ,. 12. Waiver. Notwithstanding any provision herein to the contrary, 'the performance of any and all obligations of the City hereunder and the performance of any and an conditions contained herein for the benefit of the Underwriters may be waived by the Underwriters, in their sole discretion, and the approval of the Underwriters when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing, signed by an appropriate officer or officers of the Underwriters and delivered to you. 13. No Liability. Neither the City Commission., nor any of the members thereof, nor any officer. agent or employee thereof, shall be charged personally by the Underwriters with any liability, or held liable to the Underwriters under any term or provision of this Bond Purchase Contract because of its execution or attempted execution, or because of any breach or attempted or alleged breach thereof. .1 , , , ; ..,:~ ,l.J 14 q~ -"09 " ~ 14. ,Governing Law. This Bond Purchase Contract, and the terms and conditions herein, shall constitute the fuU and complete agreement between the City and'the Underwriters with respect to the purchase and sale of the Series 1998 Bonds. This Bond Purchase Contract shall be governed by and construed in accordan,ce with the laws of the State of Florida. ' Very truly yours, , I WILLIAM It HOUGH & CO., AS SENIOR l\-IANAGER ON BEHALF OF THE UNDERWRITERS I BY: ~? Title: Senior Vice President . Accepted this day of February, 1998. CITY OF CLEARWATER, FLORIDA ATTEST: :' (::) Vice Mayor City Clerk City !vfanager Approved as to form: City Attorney \ .. , V's\: " , "/ '< 15 , 98 -09 ~''''''_''' .c. '.:~'i ;.~.~'.'T':'_ : .'~\ .' ........7~ ~.... i.... '1. .,. ~ EXHIBIT A SERIES 1998 BONDS MATURITY SCHEDULE Maturity (S.eptember J) Principal Amount ln1erest Rate Yield , , 'I' o , . Redemption Provisions Optional Redemption. The Series 1998 Bonds maturing prior to or. on September 1, are not subject to redemption prior to ~heir maturity date. The Series 1998 Bonds maturing after . September 1, are subject to redemption at the option of the City prior to maturity on or after September 1, , in whole at any timet or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as percentages of the principal amount of such Series 1998 Bonds to be redeemed, as set forth below, together with , .accrued interest to the date fixed for redemption: Redemption Period! (Both Dates Inclusive) . . Redemption Price :.:;; , September 1, September 1, through August 31 and thereafter A-I qf-()9 . .'+'.. ,..~. ., <~ ~ aJ,'..... - , - - . ~. j . _J q... ; (. \~' ," ',' ':' Mandat~ry Sinking Fund Redemption of the Series 1998 Term Bonds Maturing September 1, . The Series ,1998, Bonds maturing on September 1, are subject tom~datory sinking fund redemption by funds deposited in the Bond Amortization Account in the Sinking Fund prior to matuiity in part, by lot at a redemption price equal to their principal amount and the accrued interest on each September 1 in the years and amounts set forth below at a redemption price equal , to 100% of the unpaid principal amount of such Series 1998 Bonds being redeemed plus accrued interest ther~on to the date fixed for redemption, without premium: " . fiat Principal Amount " ~ ;, . \ : ~ '" ;, :(\. ... '. Final Maturity '0"\ ~ .... ~~ . (:) , . ..' (' , ,'"c "0 . . A-2 . , , ' qg ~09' ......~~.;;:.J~,:..;....~..i::i-:,;.tc.#jp.>.'.L_'.,'. . ~ .~::) () " . ~.' , " . . " .~.". ..1, :c' -'V"IIIJI'" EXHIBIT B DISCLOSURE STATEMENT AND TRUTH-IN-BONDING STATEMENT February) 1998 City Commission of the City of . Clearwater, Florida Clearwater, Florida Re: $8,105,000 City of Clearwater. Florida Gas System Revenue Refunding Bonds) Series 1998 Dear Commission Members: In connection with the proposed issuance by the City of Clearwater. Florida (the ItCity") of $8) 1 05)000 Gas System Revenue Revenue Refunding Bonds, Series 1998 (the uSeries 1998 Bondsll), William R. Hough & Co.! Merrill Lynch & Co. and Raymond James & Associates) Inc. (the "Underwriters'1) is underwriting a public offering of the Series 1998 Bonds. The purpose of the following seven paragraphs of this letter is to furnish. pursuant to the provisions of Section 218.385(6), Florida Statutes, as amended. certain information in respect of the arrangements contemplated for the purchase and sale of the Series 1998 Bonds, as follows: (a) The nature and estimated amount of expenses to be incurred by the Underwriters in connection with the purchase and re-offering of the Series 1998 Bonds are set forth in Schedule I attached hereto. (b) There are no "finders," as defined in Section 218.386, Florida Statutes. as amended, connected with the sale and purchase of the Series 1998 Bonds. (c) The combined underwriting spread, the difference between the price at which the Series 1998 Bonds will be initiaUy offered to the public by the Underwriters and the price to be paid to the City for the Series 1998 Bonds, exclusive of accrued interest. will be approximately $ per $1,000 of Series 1998 Bonds issued. The underwriting spread for the Series 1998A Bonds will be approximately $ ; the underwriting spread for the Series 1998B Bonds will be approximately $ (d) As part of the estimated underwriting spread set forth in paragraph (c) above, the Underwriters will charge a management fee of$ per $1,000 of Series 1998 Bonds issued. B-1 Cf6 ~()9 .:' . . . ~: ..'..' . '.' " . i . ....., ',:.: ,~...~:. ("'. . r'. ~ . . :. l '. " . .:. .'.. .. -~ ' .' . .:.,.' .. '.. .. .' 1 >~: ,:~'. <:... ,.:-. , ,~. c, \ ,. . .. . ~: . ': ". ,..... . ',' '.~ ,. , .:: 'I . ~.": 'L, . ' .' .' . " ':', :~:'.:i'{'" .' . '. '. . ...::.. '.' ..' ., ; ." ~.- .' ~ . . '..o::c . . # c", ~.. ,. .~....: '; ... ~ :..: t '. . ~ "'r- .'. ,. "\ . ... -" " L..' . ..... . I,"' ';"'.: ' ',. ." 'I ,'. .. .' . J ~.', . i : >u _! ,', ,T'," .. . ;" . ,".;' .: .' t" ~ .'. . ., ,. -:,' ". ' " . , . . ;1'. , .-.. . . . .' . ..' . . .,~ ':. . ..;. ::: . ",." ," .:"': .' ,:..._.:.::,,;,'"",:,;; .....:.....'._ ,...i.:,......,.. '." ..... .....: ~'. '..'.:.>.." ':,':.,'. .', .......:.:..::~:,.,.~... , :',"..:.'{'"i.8; ;':'J~I' ..tl:.::;".'ipr:,; t,,;:c.' · " ,~~. ....' ' < .':,'.' ~: -,..J,,,~"i.""'" .' ,~. I', _ ", ,.' . .. \. :. :' . .' ' :: \ . ""f. _._ . ~, cl' . J -..... ,- <. ,. t' c. < . ...c.. , ,~ i......1.. ". ....:.~ . ',;;.:, ,'::. .... . .., '. " ~ ~: . ',':. .,' i.' .. ..; _.c. . '., . ,~, . :," - ~~ - ~ (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Series 1998 Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters, as set forth in paragraph (a) above. (f) The names and addresses of the Underwriters are: William R. Hough & Co. 100 Second Avenue South, Suite 800 S1. P~ersburg~ Florida 33701 Merrill Lynch & Co. 2502 Rocky Point Drive, Suite 900 Tampa, Florida 33607 Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 The purpose of the following two paragraphs is to furnish, pursuant to the provisions of Sections 218.385(2) and (3), Florida Statutes, as amended, the truth~in.bonding statement required (....) thereby, as follows: """.1; . (a). The City is proposing to issue the Series 1998 Bonds to (i) advance refund the Series 1994 Bonds; (ii) fund the Reserve Requirement for the Series 1998 Bonds; and (Hi) pay the costs of issuance of the Series 1998 Bonds. The obligations are expected to be repaid over a period C?f approximately 25 years. At the interest rates set forth on Exhibit A to the Bond Purchase Contrar.t to which this is attached, total interest paid over the life of the obligation win be approximately.$ (b) The source of repayment or security of the Series 1998 Bonds is the Net Revenues of the Gas System of the City. Authorizing this debt will result in an average of approximately $ in the years 1998 through 2023 of such Net Revenues not being available to finance other services of the City each year for the tenn of the issue. I ,.J B~2 qg -Of ........~l~:.~... '\ ~..~" , 'j' . " . ", !.< :. ,'\-' ",r' ',;', . ~ .::. 'w'" "I ~ < . 1""', .., ,'~ . ~f;;' The foregoing is provided for infonnation purposes only and shall not affect or control the actual tcons and conditions of the Series 1998 Bonds. ",'j , Very truly yours. , . Wn..LIAM R. BOUGH & CO. MERRILL LYNCH & CO. RA YMONDJAMES & ASSOCIATES, INC. By: William R. Hougb & Co., as representative of the Underwriters .:' ,',' ./ ; t ~ "':i. ~, ' :' i n " :. . ~.+" ,; ", ' Title: Senior Vice President '. . ~ :;: . " 'f,' , '" , , , " '':'<Z) ,; ..' , , '".., h, . ! ' '" I. " ;,':", , ' i. ' 'f '~, . ., " .'!.'~""" '" '\rJ '. . B-3 98 -0 c; ~~~<::.. ;~d:~.,i;~h..~(,ojt~'!'''-:'.+ . . , ......~.h..... .._,...q ..~... >. '., I ..... II ,., .: .' "'v. .~. .. , . :.(:\ SCHEDULE I \(. UNDERWRITERS'S ESTIMATED EXPENSES (Per $1,000 orSeries 1998 Bonds) Per Bond Arn01.U:u ' ! ~...~ Travel, Closing, Newspaper Advertising , . PostageIFaxlPhonelCourier .'. DTC/CUSIPlDaJnetIPSA Day Loan <to! . Total J;.< ':' c~ ",< \ "..0,-. . .,',<, ~ _~ c .~ ~ . . . .~ .. ,. ~ J '. . .- ", :.:. , . .... ;0 1-1 t-:_ !. QG/09 ..~ ........~";;...;1( ~;:~;; ;~,Ir~'\~"-""~"~'" :'....,............". - . ! ' .'..'-L'.".......~~"'~....~H....... ~'t" .', '<'. - --- ~~ - Pag. 1 0' :z CITY OF CLEARWATER. FLORIDA ,~ GAS UTILITY ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS UNAUDITED ~AR ENDED SEPTEMBER 30.1997 WITH COMPARATIVE TOTAL FIGURES FOR 1996 Unaudited Audited 1997 1996 Cuh Flows from Operating Activities: Cash Received 'rom Customers . .......... 16.000.900 Clllh Recalved from Other Funds Cash Payments to Supplier. (9,104,0861 (6.B90.3011 Clln Payment. to Employelll (3.325,8381 12.799.4511 Cain Payments to Other Funds 11,578,0621 (1,725.2241 Other R.venues 132,134 2 12.240 Net CIsh Provided (Usedl by Operating Activities 3.590,534 2.798.164 Cuh Flows from Noncapitlll Flnanclng Actlvitlu: Oparetlng Trensfers In Oplrltlng Transfers Out 11,165,7021 11.162.5181 Residual Equity Transfers Out Return of Contributions Gr.nt R,lvenue ., Intarest Paid i- ~, Receipt of Cuh on LOllns to/from Other Funds 847.975 ~,j .J.' Plymant of Cash on Loans to/from Othor Funds 1731.1791 11 ,538.3941 " Nat Clllh Provjdad (Usedl by Noncapltal Financing Activities 11.896.8811 11.852.9371 (~;) Cash Flows from Cllplteland Related Financing Actlvlllos: , .::.~ Principal Pllyments on Debt 1349.8531 1540.6981 Interost Peld 11 ,643.81 1 I 1852.6451 AcquIsition 0' Fixad Assets 13.776.6151 16.103.8831 Sale 0' flxod Assets Proceads from Issuance 01 Debt 8.815.000 Payment 0' Bond l~sull Costs 154,6801 Cepltel Contributed by: Other Funds 28,90B Othar Govllrnmantal Entities 741 Propeny Ownors 1.274 Developers Net Cuh Provided IUsed) for Capital and Related Financing Actlvltlas 15.740.5301 1.264.368 Cuh Flows 'rom Invtl5tlng Activities: Purchase of Investment Securitllll 3.847 Interest on Investments 422.508 46.161 Proceeds from tilll Sales and Maturiti"s of Investments , 750.653 Not Cash Provided bV InvlISting Activities 1.173.161 50,008 Net Increallt IDacrease)In Cash and Cash Equivalents (2.873.716) 2,259.603 Cuh and Cuh Equivalents at Beginning 0' Year 7.992.885 5.733.282 Cash Ind Cash Equivalents at End of Yaar . 5.119.169 7.992.885 COIh and Cash Equivalents: Callh on Hand end In ~nks . 1.600 1,500 Equity In Pooled Cnh and Investments ':';; Restricted Equity In Pooled Cuh and Invutments 5.117.669 7.991.385 . 5.119,169 7.992.885 IContlnu.d) See .ccompanying notu to financial Statlmlnts. qs-O~ ~ ; '. : :~ : <.'.' ~ :".; I ,. .' : . ~ f:". ". ~ I , '. ~ " , ~ . :.., . . - . ~ . .. ~:. ,. . , ' .:' . ~ . -~ j' ~ .,. "' I.,. c." '.'>' '........,., .', .' .~. ' . -: c '\ :.-',-;", ~ \., , ....,. . ..'.. ~ . ,'. ..Il ... . . . ',. ~ :.", ~. '. . r. . . ( . " ',' " ~. ~ : " :.... .. .' .' , . ; '.: "~: > . .... . I r. ~ a . + ,'I;. . '., .' ". ~ . r . . '" ';:" . ,'X;,';';,'::' ':":'I;'i,'~',~:':.~,". ';. :.;;:/': ":.::' '.. .... :.";.,~ ':' '.' :.:,'. :...;:... '.:' .. :." '<,::.: .,"" J : t . ~; ,~. ", ! "', ,":."; ',: '_. .....:: .... .; .... .. ',' ~ :. )':: ',';. . : ~ I . .. ,. '.,./.::".'.::>',~;::<..:> .... ":r. ,,::,,' <~. ~:fd'7' I ::.:.~: :::;: ',~ :.:; ':::\ ':":;:,' :':::::/,: . :'..',< ' " '." .....: +t',' c.,~..:.~.:.(~.:..:' ~.~'.l'. , . . 'j ~.., .:. ..;' , ~.' ':+..' ....~. , , , ", .. \...... .... I'" : "'.;) ~ :. " I '. ~ '.c:c:";]"\::~ ~"'. .'1' '~." :. .. "~,:: . ',;, ::\':':'J'~"i:'~ ./::< ~ ;< , . ".' .' .' '" , '., . . . :., '." I : . I ~ i' :. ~. ~., .... '.'; r:~L: 'F.! ~,,':' d' : .~. r ", . ." . .. . , ~: .:.) ':. ,., - , ., c } : .~ I' ~ ,; ,', ') : :' .~ . ,I'", ,', ~ :. , -'.'j. . . I c ~ ... " , 0 ~ _\:' ...... ~ t"" 'c : ~ ,c. '1 .< I . " !'~ '~ , , ., "''; cl,' EXHIBIT B ~ f "~v~:.' , ~' . t' PRELIH~NARY OPFICIAL STATEMENT l " ", ,. ,..., ;, .~, J ~:', ,~ .; ,; . , :;' .~ .~J>.;' I ~. ~ /; ~: ' . ~ . ), \( .,'1 ~":, ~ ' 'j.t,:~'. };..:.:, ~' , '.c . '. I ~~. ,'. ~. .,:- ., . c~>'<" ...,' >,~. 1,; \.'c ,.', ~:;I:::~~:, ,J,,:,'. ':>,".'> ".' }' . \','.' < ' . , 10 {~ -1', ':' .-:' .(," . ~ :..',: c .' . \~ .. ." ". ~ . i Or :. F f. , .. ;:, ::.- ., . 1''''<' i..:j' !;~ L ,C .:[.1!. ~~: fl T. . I ( 'i T' ~ ("'0 j ~ : ~> ~~. 'f. C,..':," . ' -;""~;i'~ri.~~~"~!.)-.'~""'~''',:~'.''" ...." Q(-01. 'no, .:..'p:: ~::':;T .. -1-' -,... ;.. "'f',~ ~... .........."'.,~......... '..,. ~, ~ .."...., .'~ ".':'.:'.' ..... ~ I ~.' .' " , - r '1Ia.. ... ~ -..... NEW ISSUE BOOK-E:'iTRY ONLY B.!!inJ:2: Mood)",: Fitch: MUlA Il1!Iur~ ~, (See "Rllting," herdn) . ln the opinion of Bond COll1ud under exlstlnB laws, regulations andjudlclal decl.sI01I.S t"teftst OIJ the Scrle.s 1998 Batle/.s Is !!xcl/lded from gros.r Income for plU'pOSD offctkralincome taxaUon and the Series 1998 Bonds are exempt from all prt.se"tlntanglble persollal proputy laxes Imposed pursuant to Chapter 199, Florida Statutes. See, howf!l'cr 'Tar Exemption" henlnfor a dtscrlplio" ofcertatnfederal mlnJnmm and alII!!,. sptclal taxes that may affict the tax tnatment oflmerest on the Serits /99B Bondr. CITY OF CLEARWATER, FLORIDA $8,105,000* Gas System Revenue Refunding Bonds Series 1998 Dated: January 15, 1998 Due: September 1, as shown on inside cover lhcCitycCCl~ater. Florida, Gu S)'Stan Revenue Refunding Boncb, Seriesl999 (the "Series 1998 Bondl")alC being ilSucd in the fonn offully regislered bonds.nd will be iniliaUy issued to and registacd in the IW1lC ofCc:de a. Co., u ncmince for The Depository Trust Company, New York. New York ("DTei, which will aclII lCeurilict d~itory fOl' the Series 1998 Bonds. The Series 1999 Bonds will be: av.i1able to purch.nen in prineipa I denominations 0($5,000 and integral multiplesthcn:of under the book-cntry s)'llcm mainlainc:d by DTC through brlJItcn and dcalcn who are, or act through. DrC Panicipanb. Pun:h.ners will not receive ph)'Iical delivery of the Series 1998 Bonds, FOI' $0 IonS al any purch.uc:r it the beneficial owner of a Series 1998 Bond, he must nuinlain an aceDllllt wiUla broker or dealer who is. or ,cll through. a DTC Participant in order 10 ICceivc p.1)'ment ofpinc:ipal of and inlcrcJt on luch Series 1998 Bond. For wlOflg 1.1 the book-cnlty ')'Ilem is in elTeclany ICfercncc to a Bondholder 01' Bondholdcn Ih,1I be deemed to be Cede &. Co. and nolthe beneficial ownen of the Series 1998 Bonda. See "Book.Entry Only Syslan~ under "DESCRIPTION OF TIlE SERIES 1998 BONDS.~ Inlereslon the Series 1998 Bonds ispa}'Iblcscmi-anlWUy,OOllllltcnr:ins~ t, 1998, andcachMarch 1 and Seplember 1 therufter, SunTrust Bank. Central Florida, N.tional Auoci'lion, Orlando, Florida. wil1l1ct u Paying Agent with rcspcctlo the Series 1998 Bonda. The Saics 1998 Bondul'uubjKltoopdonal and mandalol)' slnldne fund redrmptllln prior 10 Ihrlnl'lro malurily undrr Ihr Irrms and conditions dncribed hrrtin. The Series 1998 Bondi will be iuucd by the City ofClcarwaler, Florida (the ~Cily") (i) together with other funds provided by the Cily, to .dvance ICfund the City's GII System RCVQIuc Bonda. SeriCl 1994A (the ~SeriCl 1994 Bond.");(ii) to purcluae a municipal oolld hUUl'IJlce policy .1nd a rcscrvc fund 'IITCty to be iuucd by Amb.c Assurance Corporation to utilfy the RCIClVC Requirement fOl' the SmCl 1998 Bonds; and (iii) to p.1y the costs of iUUJnec of the Series 1998 Bondt. nlC Serica 199B Bonds an: Iimiled obligations of the City, payable solely &om the Nel RevCllllCl derived from the operation of the S)'1Icm.as provided in Ordillllncc No. -""'li\ 5118.9 J enacted by the Cily Commiuion (the "Conuniuioni on August 1 S. 1991 (the "Ori gilllll Ordinance"), .umended and lupplemented by Ordinance No.6 188.97. and II '., .,,~anentcd by rcsolutiDn.& of the Cily, nle Series 1998 Boncb and the intCRSt thcn:ollshall not be and shall not cOlUtilute an indebledncu of the Cily or of the Sule of Florida 01' , :..' any politica1lUbdivision lhcrcof within the meaning of any CorutituliDllllI. ltalutory. eb.1neT or olheT limitation of indebtedness, and neither the full fa ilh ~nd ered il not the lJ!ling powcn oftbc St&lc oCFlorida 01' the City arc pledged I.IICCur1ty fOl' the pa)mcnt of the principal of, ICdanplion pmnium, if any, or inlen:Jt on the Series 1999 Bondi and no holder 01' holden oCany Series 1998 Bondlllull c:vc:rhave the right to compclthe cxCTCiae of the .d valorem laxing powers of the City, 01' taxation in Iny fonn orany real property therein to pay the Series 1998 Bonds ot the intc:n:Jt t1IC1Con. The Series 1998 Bonds will be on a parity and nnlc eqUJlIy, II to lien on and source and security for pa)mcnl from the Net RevCRucsand in all other respects, with the CiI)'I Gal System R.evCl1vc Bonds. Series J9961\ OilS Splan Revenue Bondi, Series 1997 A and Gal Syslem Revenue Refunding Bond3, Series 1997B, al more pJnicularly described I=cin. Payment oflhe pincip.11 of and inlcrClI on the Series 1999 Bonds when due will be guaranteed \alder a munieip.l bond iruW'llnce pol icy 10 be issued concumntly with the delivery of the SmClI998 Bondi by MalA lruannce Corporalion. See "MID.1CIPAL BOND INSURA."CE" herein. r,.mIA Logo I . For. dllWlI5lon ofthr trrms llIId provislo~ ohuch pollcy,lndudln& Ihe Iimllatlo~, Ice "MG:'IolCIPAL BOm> lNSURA."IiCE" hl!rtllL This CCM:I' plIgc cml4ina ccrt.lin infmnation fill' quick rcfcrcncc only. it i. notasWlllllllI)' Ilflhe issllC. lnveslOD musl read the enlire Official 5tJlcmcnlto obtain informJlion r:ucnliallD making an infonncd investment decision. The Series 1998 Bmda wiIJ be 0fI'c:n:d when, II and if iuuc:d Ind delivered 10 the Undcnmler, subject to approval of Bry.nt. :>'filler Ind Olive, P.A., Tallahauce, Florid., Bini COlnc! III the Cily, and certain other conditions. Certain legll mallen will be: p.1ucd on for the City by ill City Attorney, Pamela K. Akin, Esquire, and ill di.closure eowucl, NaOOn. Giblin &; Nickcnon, P.A., 1'.I1lpI, Florida. JI it expecled thJl the SeriC1I998 Bondi in definilive fonn will be av.ilable for delivery in New York. New York. on or .boul Febnury . 1995. WILLIAM R. HOUGH & CO. MERRILL LYNCH & CO. RAYMOND JAMES & ASSOCIATES, INC. . Dated: January t 1998 \..~ · Preliminary, subject to clU1ngc. crt-oC{ >" ': .'~:, C I ~ ; ~":'r~~':' :,: :: . . I. . . .~\: . t ,." . t ",:: ~i' .~ I", . ( i.....' . ;,~ ,.' ': :.~ .:..::";'" """. :"',,". . ,,;" ':-. .:c, ......,f .'. ','c,. .........','.'.".. .""'. ,'.; ..~. ...........:.:,J.c.{..,....'~,....,......,:..~.r,.~.>. :~:<.. ...';>.::':.>:.".' ".:. , ; -.." . .,. ; , . . , . .' .., ',','. ," .'''';.,.~.;.~',<:,;'<> ' . ." . . ., ...... .. ":' ,.:"'~h":;.. :,is,,,: ";;";l~'.:i.)ri'.:.{\<):'; ,:;; ':'" ';, ,> : . . .' , ;, .:,......,/;. . '.7- ; ....; :'j ;",\;:::-.:<; '. ;;:..::i:::;,;:..:'.~..:.(.:.:.. '.. : " '.. ..' ,.. c';, .' .", ....... ., ~. .. c.,: . . . ..:. .:... .,_' ,~ I .1 .' \ '. .. " ' . . :.; L . '..' '1.. . . . :.~ . ',: : '.: . . ., \, r ' \ .'.o ':.J.. ':\. ,. .' .': .CI' :~; .' : i..>:' ,> . .>' . ~: >) <;. . ~.~. d . .., ... .. ~ . . , l.... . i . " . '~'. +. , '. .' - .\ ".' .~ " :1' /h ;"l;:'i'~';~~'.! :'"'". t;~/, ;, ;..' i:"." i', ' J'. , " I:. . r" r~ . :'.':~: Series 1998 Bonds MATURITIES. AMOUNTS. INTEREST RATES. PRICES. AND YIELD Maturity Principal. Amount Intcrc..t Rate llild .:;::'.+ :<.> .:~...., .',' .'!....;......: ,; 'j~~<;:: : ,. .. " :' ~;-" u .:.. '~" .. ~', ' ;~ " . ,:i . :~;:\':.:. '? ..' T': t~: ~ ~.~; .~'~:'S ;',"' ,T.' ,~~:~'/ :", \ . ~. .". ,.' " :, :'i.';'::- ~': ' (~.:j':i' . :r:~::/': ~,.' ~. ,~ . r. ._, . ~ ~ ~~:..' :", . y)>; ..,.... . 'I .I 4",' I :rj'~::'l:' / '. ," ',::'.".,' ;x:::~.o,. -'1"' ' t ;",: ~r:~~~~I": . " ~ ,. I:'...':'" .' $ % Tenn Bond Maturing September 1,2023 to Yield % '.. ., ., ': .,F' , " {:.I..,...: ' ~; , r:~\ } '.I' r : '.:'i. i' :.t. " ~. ~ :.' r . . J.~.~;:. . ., . :, . .," t:,',..'\..... ,.r ,"., rF;~ ;:~: ~: J. ~ " ~ ~\H :" , ~~-: .:.... . t.": {..' , ,:...!'~\ . (:.:,.',~". ;:':: .~. . , " f.' ,~ " ~t:" :~,q:.! ' '. :,: :~.:~~..~;,,~I:.tl.,.l,~.,;(......,.~....,~ .'" ': " .' q? -09 ,. ~ '. -,,', ~,j.: .. . .' _.' /, ,r. ... \ \ .'...... .' . , ......... 1 0-".'... \ ~ " . :~, r;'-':\':,"", ~!:! 'l~~:~'i:'.', . ~'<I:/'Y:'{I~ 1,t~. .'. "c.. ~. ~L:: ~.:~ ;.:, /: ~ ,\,. - ..,. !, . >. . . "'J , < ,'. . .. .' ~ ' ',~ . . .~ > ~ CITY OF CLEARW A TF.R, FLORIDA 112 South Osceola Avenue Cleanvater, Florida 34616 , , " , i . )' , i' , CITY COMMISSION ,", I ..t.. ' '. i, , i . ~ .! . " ',,) . 'I . J1. . 'l Rita Garvey, Mayor-Commissioner ,John B. Johnson, Jr. Commissioner Ed Hooper, Commissioner Robert Clark, Commissioner Karen Seel~ Commissioner . " ,i . I ~ r , , 1.1.. ' "J , I ,I , j :\. . .. !,: " " CITY OFFICIALS ~i".O' ;'1'.':;' , ~ ( ; I . ' ., '. Michael J. Roberto, City Manager Margaret Simmons, CPA, Finance Director/City Treasurer Cynthia E. Goudeau, City Clerk Charles S. Warrington. Jr., Managing Director & Executive Officer, Clearwater Gas System ' :"1. " 1 : ~: ".i' I j. ' CITY ATTORNEY . 'j ! 'j> Pamela K. Akin. Esquire BOND COUNSEL Bryant, Miller and Olive, P.A. Tallahassee, Florida DISCLOSURE COUNSEL TO THE CITY Nabors, Giblin & Nickerson, P.A. Tampa, Florida , FINANCIAL ADVISOR ":, '. First Union Capital Markets Corp. S1. Petersburg, Florida liii.~ ."W :T':'. . qr-Oq + . - .. . \. II' ~ . <" ~ . '.. . " . c ~, . ~, .., ., . ..~. ", d ._.. oJ' ' ') !',"' , " ~ No dealer, broker. salesperson or other person has been authorized by the City to give any infonnation or to make any representations other than as contained herein, and, if given or made, such information or representations must not be relied upon as having been authorized by any of the . foregoing. This Official Statement is not to be construed as a contract with the purchasers of the Series 1998 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale orthe Series 1998 Bonds by any person to make such. offer, solicitation or sate. The information set forth herein has been obtained from the City, MBIA, public documents, records and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of the City with respect to infonnation provided by MBIA. The information and expressions or opinion stated herein are subject to change without notice. and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the affairs of the City since the date hereof or the earliest date as of which such infonnation is given. IN CONNECTION WITH TIllS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1998 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED. MAY BE DISCONTINUED AT ANY TIME. ,!!H~ t .;}....,cJ All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 1998 Bonds are qualified in their entirety by reference to the fonn thereorincluded in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 1998 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COM:MISSION (THE "COl\1MISSION'I) OR WITH ANY STATE SECURITIES COrvlMISSION. THE SERIES 1998 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COt-AMlSSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES CO:MMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. ...;) , Q'l-09 ..' '.. ~ ..~., '.. '. ,",:; .~ . ~ I . /::~. .":' " ~ a .. ,., '.': . '~."~ ;' :: ..:", \~ . . ., t:" .. ...... ; . .~. . ," .-' .,#fIII....,.." . . ~\ . '. , . ~ , . .. TABLE OF CONTENTS Page , INTRODUCTION ............................,..,.....,.....,.............. 1 PURPOSES OF SERIES 1998 BONDS ...,.....,..',.......,..................,. 2 ESTIMATED SOURCES AND USES OF FUNDS ...,...........................,. 2 DESCPJPTION OF THE SERIES 1998 BONDS " . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . 3 General t, f . . I . .. . . . .. . .. . t . . . . . . . . . . . .. 4 '" t- '" _ 10 ,. .. ~ ~ . . . . . fit. . I .. . .. . I . . ; . . . 'it . . .. . 3 Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Redemption Provisions ................:....,.............................. 5 Notice of Redemption ..................,...........,....................... 7 SOUR.CE OF PAYMENT AND SECURITY FOR THE SERIES 1998 BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 General .,............,..,..........,... t _ . .. . . . . . . . . . . .. . . . . . . . .. . . t . .. ,. , . . . . . 8 Debt Service Reserve Account. . . . . . . . . . . . . . . . . . . . . . . . . . , . . . .. . . . . . . , . . . . . . . . 9 Ambac Assurance Corporation . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Available Information ..................................................., 11 Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 FLOW OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 , Establishment of Funds and Accounts .................. .'. . . . . . . . . . . . . . . . . . . . , 12 Priority of Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 COVENANTS ......................................,..................... 15 Rate Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .'. . . . . . . . . . . . . . . . . , . . . . . . . . . . . 15 Additional Parity Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . . ..' . . . . , . . . . . . . . . . . . . . . . . . . 16 Operating Budget ....................................................... 16 Annual Audit . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . ~ . . . . . . . . . . . . . . . . . . . . . . . . 16 No Mortgage or Sale of the System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . 16 No Free Service . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Enforcement of Collections .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 No Competing System . . . . . . . . . . . . . . . . . . . . , . . .', . . . . . . . '.' . . . . . . . . . . . . . . . . . . 18 Unlawful Connection Prohibited .......,.................................... 19 Amendment of the Ordinance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 TlIE SYSTEM ................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Physical Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . 19 Management ...........................,......,........................ 20 Gas Supply .......................................,.........:.......... 21 Rates, Fees and Charges ...........................,....................... 22 Service Area ................,...............,.......................... 23 . Clearwater Gas Strategic Plan .............................................. 25 Future Projects ...............................,.,.....................,. 26 Pasco County Territorial Dispute. . . . . . . . . . . . . . . . . . . . . . . '. . . . . . . . . . . . . . . . . . . . . 26 Environmental Remediation Costs; Environmental Imposition Rate Adjustment . . , . . . . . . 26 M"UNlCIPAL BOND INSURANCE .... . . . . . . . . . . ... . . . . , . . . . . . . . . . . . . . . . . . . . . . . 28 ii Q'3 --09 . ~ ~ . ," . ",<". '.. :,' ". ',:. >::. :.':'.. ": ." '. ",\',:: " . .;.~'. ..... . I . .' ." ,7'-'.( , . ,. ">':": c.'.....:<~;...t.:':~;.~.:,..:.:.......: ..... ,. "j. 'III .:' I . :., .~. .;, . .; :t".:~ ~,,: "0 .' '. , ' -' J ~ ..'t , '. I .' '. . (:: ':~.:.. .... _ ',~C:' \t...~,.,.. .t~"',,:~~ ....,.~..,.:7~., " ~ . . .. .' ~ '. . r .' ". . _ . ..' . ~ .. . I, i' . . . r :" ;;',.,. .'. ,..:':,:'"'''::''' . .1<~~~',:,.;;t\:::",Yf,. '13';,:ij ,.\:;,....'...... .... ".' ,;_, ".: ......\ ':::'~,.:. ~ :~/: ,+' :' ; I.=J .:::~:, ;;7.' ,;'i<);' .:" . ,,' :.,.....:.{.... ," .' ......'.., ':."",,'" ,'. ," ,', . ~. I ..' .....' , . '.. ~ ..~ : .:- ~ '. . . ; , . ,", . . .' I . ,", ': ,< ' ..,... . ,~ .... , ';~:' : , :"' ~ I . .~, ~-~ . '.' ':.' .~. .\~ t. ~ ,T .".:. , 4':' "' ... , " .' .' . .",.\ .' : . '.~ .. 1 . . .... I t~.. .:~ , : '.....<I'::~ . . , .. . ~ i;<'~ ,I ~~.J Q -" "":. . ~ ~~. '- , ., ,.' -... Rights Granted Insurer, . , . . . . , . . . . . . . . . , . . , , . , . . . . . . . , . . . . . . . , , . . . . . , . . . . . 30 THE CITY AND PINELLAS COUNTY. . , . . . , . . , . . . . . . , , . . . . . . . . . . . , . . . . . . , . . . . 30 COMBINED DEBT SERVICE REQUIREMENTS ........,.... 0 . . . . . , . . . 0 . , , , . . 0 , 32 HISTORICAL COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE BY THE SYSTEM NET REVENUES 0 0 0 , , , 0 0 , . , . 0 0 0 , . . . 0 . . . 0 . , 0 , . . . . , . . . . . . 33 RA T:INGS It. . t . , . ft.'. ill . . . . . . . . . . . '" , . . . t . . . . . . . . ~ . . It . t . . . . . . 4 . . ~ .. , .. f t + , . . . 33 LEGALITY. . . ~ . , . . . ~ ;. . . . I . 11 ~ ill ill . . . . . . .. . I . . . . . . . . ill ill I . t . . . ~ . . . . . . . . . . f . . . . . It 33 TAX. EXEMPTION .. 0 . . . . o. . . . . . , . . o. . 00' . 0 . . o' . 00' . . , . . . . 0 . . 0 . . . . . . . . . . . . 34 VEIUFICATION OF MATHEMATICAL COMPUTATIONS. ., o. .... "0' ... .,.' ... . 35 UNDERWRITING . 0 . . . . . . . 0 . . . . . , . . . . . . , . . . . . . . . . 0 , . . 0 , . . . 0 . . 0 0 , , . . , , . . 0 0 . 35 INVESTMENT POLICY OF THE CITY . . . . . 0 . . . 0 . . . . . , . . , . . . . . . . . . . . . . . . . . . . 0 . 36 ENFORCEABILITY OF REMEDIES. . 0 . . . . . 0 . . . . . 0 . . . . . . . . . . . . . . , . . . . . . . . . . . . . 36 LITIGATION .. 0 . 0' . . . . . . . . . . . . . 0 . . . . . . o' . . . . 0 0 . . , 0 . , . , . . . . . , . . . . . . . . . . . . . 37 GENERAL PURPOSE FINANCIAL STATEMENTS . 0 . . . 0 0 . , . 0 . . . 0 . . . . . . . . 0 . . . . . . 37 FINANCIAL ADVISOR. . '0 . . 0 . . . . . . , . . . . . . . , . . . . . . . . 0 . , . 0 . . . . 0 . . . . . . . . , , . . . , 37 ADVISORS AND CONSULTANTS .,...,. 0 . . . . . . . . , . . . . . . . . , , . 0 0 . . , , . . , , , . . 0 . 38 CONTINUING DISCLOSURE. . . . . . 0 . . . ; . 0 0 . . . . . . . . . . . . . . 0 . , , , . 0 . . , , . . 0 , . . . . . 38 MISCELLANEOUS 0...' . . . . . . . . . . . . . , . 0 0 , . . . . . . . . . . . 0 . . . . , . 0 0 . . , . . . . , . . . . . 39 AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT. . . . . ! . . . . . " . . . . . . . . . . . . . . . . . . . . . . . . 39 APPENDIX A GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA APPENDIX B - EXCERPTS FROM THE CITY OF CLEARWATER, FLORIDA GENERAL PURPOSE FINANCIAL ST A TErviENTS AND OTHER INFORM/\ TION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996 AND UNAUDITED FINANCIAL STATEMENTS OF THE SYSTEM FOR THE FISCAL YEAR ENDED SEPTElvIBER 30, 1997. APPENDIX C StJM1\.1AR Y OF CERTAIN PROVISIONS OF THE ORDINANCE APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE APPENDIX E FORM OF BOND COUNSEL OPINION APPENDIX F SPECIMEN BOND INSURANCE POLICY APPENDIX G SCHEDULES OF RATES Hi Q'l-09 . ....,> , . . . ", ~ -><,' ...;~c:''',',''~':'' 11~.r.::.,j'h '.~:" .'", "'~."...... ..."..:~ " "\':J;';~... .....'.l[J't'.'~('!:,~;';",,:,@:?;(:.;:j~,,',":, :: :".;,.',:>~,~". \ '" ,. [... . . . 71 .. '. ...:.:.:] ". I'.: ....::~..'.,::;.'..:'::(.,f:.:.: :~.~: :, ',.->,: :>, ..':: .<. 'i"lr,,:,"'.:.:':':::::'.~:::~~ .' ',' .....,;.7<:~, ,:..:"., "', " . .;" . ~'I"c.; !,?r;:: ',/, .~. .:/, t" . /., ~.~ , ~. . ,', ,'\ '. " ',.., :.;. I' ,': f ~ c " ~; ~,' .. ". : ~:. ?..;.... .' : I . ......' ". '. .' 't ',~ . ,: ~ .' . . , . . ~ ,. < , . .:.':- ,"z. +, ,", ." .'.' Ie - ' .~ :'::. ,I: ~ \ .::.';'.: 1;'/. ":~:'~'>c ~.' " ~ ~:. .. -" .' ,". ". ...".. '~ ,~ OFFICIAL STATEMENT $8,105,000. Gas System Revenue Refunding Bonds , Series 1998 INTRODUCTION The purpose of this Official Statement, which includes its cover page and certain enclosed Appendices, is to furnish information with respect to the issuance by the City of Clearwater, Florida (the "City") of its $8,105,000. Gas System Revenue Refunding Bonds, Series 1998 (the IISeries 1998 Bonds"). ~'<I'f.') . :. '~;.,J The Series 1998 Bonds are being issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, as amended and supplemented, the City Charter, as amended and supplemented, and other applicable provisions oflaw. The Series 1998 Bonds are being issued more specifically pursuant to Ordinance No. S118M91 enacted by the City Commission of the City (the IICommission") on August IS, 1991 (the "Original Ordinance"), which authorized the issuance of Gas System Revenue Bonds, Series 1991 (the IISeries 1991 Bonds"), as amended and supplemented and as further supplemented by Ordinance No. 6188-97 adopted on September 18.1997, as further supplemented by Resolution 98M 09 adopted on January IS, 1998 (as so supplemented, the "Authorizing Ordinance") (the Original Ordinance and the Authorizing Ordinance are collectively referred to as the 1I0rdinance"). The Series 1998 Bonds are special, limited obligations ofthe City payable solely from the Net Revenues derived from the operation of the System, as provided in the Ordinance on a parity with the City's Gas System Revenue Bonds. Series 1996A (the "Series 1996A Bonds"), which are currently Outstanding in the aggregate principal amount of $8) 750,000, the City's Gas System Revenue Bonds. Series 1997 A (the 111997 A Bonds"), which are currently Outstanding in the aggregate principal amount of $7)895,000 and the City's Gas System Revenue Refunding Bonds, Series 1997B (the "Series 1997B Bonds"). which are currently Oustanding in the aggregate principal amount of $6,710)000 (the Series ] 996A Bonds) the Series 1997 A Bonds and the Series 1997B Bonds hereinafter being referred to collectively as the "Parity Bonds"), all as further described under the heading "Additional Parity Obligations" herein. Capitalized terms not otherwise defined in this Official Statement shall have the same meanings assigned to such terms in the Summary of the Ordinance) which is set forth in APPENDIX C. The description of the Series 1998 Bonds, the Ordinance, and certain statutory provisions as well as the information from various reports and statements contained in this Official '~ · Preliminary, subject to change. 1 q<t-oq ,~ Statement are not comprehensive or definitive. AU references to such documents, reports and statements are qualified by the actual content of such documents, reports and statements~ copies of which may be obtained by contacting the Finance Director, City of Clearwater, Florida, 100 South Myrtle Avenue, Clearwater, Florida 34616. " , ., , ,. ! ~ , l !f ! I ,- , ! i I f \ . .f f' I I '. f 0 I I i I (. 1 ,. i I \ PURPOSES OF SERIES 1998 BONDS The Series 1998 Bonds are being issued by the City (i) together with other funds provided by the City to advance refund the City's Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds") which are currently outstanding in the aggregate principal amount of $8,110,000 (the . "Refunded Bondstl); (ii) to pay the premium for the cost of a municipal bond insurance policy and a , debt service reserve surety bond with respect to the Series 1998 Bonds; and (iii) to pay the costs of issuance ofthe Series 1998 Bonds. , ESTIMA TED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Series 1998 Bonds are expected to be applied as follows; Sources of Funds Par Amount Funds on Deposit for Refunded Bonds Accrued Interest Total Sources of Funds Uses of Funds '. Deposit to Escrow Fund Underwriter's Discount and Costs of Issuance (1) Total Uses of Funds (1) Includes the premium for the Municipal Bond Insurance Policy and Reserve Fund Surety. ..::;; 2 'q<g -oq ,j, ..~ \"+ ...... L ~ .", .):. ~. ~ - ~ DESCRIPTION OF THE SERIES 1998 BONDS General The Series 1998 Bonds will be issued in fully registered book-entry only form in authorized denominations of $5,000 and integral multiples thereof and will be dated January 15, 1998, will bear interest (payable semi-annually on March 1 and September 1 of each year commencing September 1, 1998) at the rates per annum and will mature on the dates and in the amounts, all as set forth on the cover page of this Official Statement. SunTrust Bank, Central Florida, National Association, Orlando, Florida, will act as Paying Agent and Registrar with respect to the Series 1998 Bonds, BookMEntry Only System THE INFORMATION IN THIS SECI10N CONCERNING DTC AND DTC'S BOOKM ENTRY SYSTEM HAS BEEN OBTAINED FROM SOURCES TIIATTHE CITY BELIEVES TO BE RELIABLE, BUT THE CITY TAKES NO RESPONSIBILITY FOR THE ACCURACY THEREOF. The Depository Trust Company ("DTe'), New York, New York, will act as securities depository for the Series 1998 Bonds. The Series 1998 Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered bond for . ".,~:) each matufrityhof eahc~ Series Wld '11 'Iblebisdsued ~ordthe. sheDrieTsC1998 Bonds, in the aggregate principal amount 0 eac suc Issue, an WI e eposlte Wlt . DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a l1c1earing corporation" within the meaning of the New York Uniform Commercial Code, and aUclearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of secu:-ities certificates. Direct Participants (the "Direct Participants") include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number ofits Direct Participants and by the New York Stock Exchange, Inc" the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. . J 3 cr6--oq .:.::. " I.. ". :'1' 'L': . t . . ~ . ~ . , .... . +,. ','. . '. ~.:. .: \. " . ," \' . ,. ,', "", ':l' :;. ~~ ,OJ. .: J . ".f " ~. . , " '.. I l'. ..;:L .,', '. ,'j. . ',. .' " ..... ,. " '. u .... ,.. . ': , , . . " . ',. - . .. .:: '. c, ;., -:::' .. ",' ',.'. . .:.... " ..",'" ',..;/" · ::'."0:".,"" '....Q'...;','~:',.,I~.../;:,'.rB~;.,...,'::., ..'~:'.'.>. ", . ~: . . .'" 1.1 .' . "",. ; ..'. :., ... ~ . " \1., ~. .T > , ,,' . ',"': .... . " ..... ".. . ., ',' F','":":' ':".:',., '.', .' " .' '" . ~ .1 .: Il ~ ...... ~ Purchases of the Series 1998 Bonds under the orc system must be made by or through Direct Participantst which will receive a credit for the Series 1998 Bonds on Dres records. The ownership interest of each actual purchaser of each Series 1998 Bond (the uBeneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records, Beneficial Owners will not receive written confirmation from OTC of their purchase, but Beneficial Owners are 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 1998 Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 1998 Bonds, except in the event that use of the book-entry system for the Series 1998 Bonds is discontinued. To facilitate subsequent transfers, all Series 1998 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nomineet Cede & Co. The deposit of Series t 998 Bonds with DTe and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTe has no knowledge of the actual Beneficial Owners of the Series 1998 Bonds~ DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 1998 Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain .\ responsible for keeping account of their holdings on behalf of their customers. .~t"l) , ~ ; 1 For every transfer and exchange of the Series 1998 Bonds, the Beneficial Owner may be charged a sum sufficient to cover any taxt fee or other governmental charge that may be imposed in relation thereto. 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 themt subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Series 1998 Bonds within an issue are being redeemed. DTC's practice is to detennine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to Series 1998 Bonds. 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 1998 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Scries 1998 Bonds will be made to DTC. DTe's practice is to crcdit Direct Participants' accounts on each payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payment date. 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,lI and will be the responsibility of such J 4 CfB'-oq ". .. . I"' f.~ ':, . .~ . . . . . . . I ,'. . . * .." .', .~.':I,'. ..'+, \',.. -.. .. '::: '.,." -~. " . .' i.:' : ": ~" .~.: I: . .' .... '. . . . ;. .' : . . . \ < . .' ~. . :"\', ",' ~ ,+... or. . .: 'J' ., .', ". . '" ~ .... ". .". ,.'~. " \" ,:,:,.'~~.;~" <:~.:,;:':".'I.:,.:.:l'.,,-':..,.'...;"":'" .....:..4.. ~l~..~... -. ~.~ '..":"', .. ,::. ,. .' ..:..."..... .... > .... ,~ I' '.'/~" t. ~'. ~, r'~.'~~,,1... '. '. .. I".; .'. Ii:' :' -, -i ... ..' ... ~. ~ . ...;:.......:::T: >' '<.~.. ~..., ....0. ~.. .... .. .:..:'.......,',."...::.~~..:>..,.;:.:;::.\i; '.. .. ,,/' .'::: '.:;",.,,": ,':,:.,L,"/::0 ,....:/\',f.<..;.;i~,i:,;.}~'Q);2"'i../,...-,,{'.':i..;'...... i ":<:.:.'.:. : ';\~..'~." ..';', \;:~.: ::.::~ ......:.:....:';..:.~F.;:.':;,,:..:!::.:>' ~:...~'..: ".~.'.::i':,.::':.::~:)":.:., . ..' '. ". .,.Ii . :..\ . ~. ri,..........~ .'. .." ~1:'~. '/~~. '; '.1 '.:'. ~ '........: . ~ . ..1. l : ~. :. '.. ..,..,.:: .' <',.:. "+ 'cl. . . "..:." . ;:' ',';. :.... p . ::r:' ";:.' '.0.:'.:':.:''";'.:'',;. ;,. :.... .' ..',;. . , ~ + ' ' , r . .~. .' . ~ ~. l t .,. . . . . ~. .'>.... .: ':.: ", >' ..... :,.. :!:~..".;I;.:<' ". '.... . !"I ;. ',' . . t . ~ . , T - ~ Participant and not of DTe, the Paying Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTe is'the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibHity ofDTe and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. The City cannot and does not give any assurances that DTC, Participants or others will distribute payments of principal of or interest on, or any premium on the Series 1998 Bonds paid to DTC or its nominee, as the registered owner, or any redemption (if applicable) or other notices, to . the Beneficial Owner or that they will do so on a timely basis or will service and act in a manner described in this Official Statement. Neither the City, the Bond Registrar nor the Paying Agent is responsible or liable for the failure of DTC. Participants or others to make any payment or give any notice to a Beneficial Owner in respect of the Series 1998 Bonds or any error or delay relating thereto. When reference is made to any action which is required or pennitted to be taken by the Beneficial Owners, such reference shall only relate to those pennitted to act (by statute. regulation 'or otherwise) on behalf of such Beneficial Owners for such purposes. When notices are given. they' shall be sent by the City. the Bond Registrar or the Paying Agent, as applicable, only to OTe. '.....,) . : ,.:~ DTC may discontinue providing its seJVices as securities depository with respect to the Series 1998 Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, the Series 1998 Bonds are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Series 1998 Bonds will be printed and delivered. In the event of an insolvency ofDTC. ifDTC has insufficient securities in its custody (e.g., due to theft or loss) to satisfY the claims of its Participants with respect to deposited securities and, is unable by application of (i) cash deposits and securities pledged to DTC to protect DTe against losses and liabilities; (il) the proceeds of insurance maintained by DTe and/or its Participants; or (iii) other resources, to obtain securities necessary to eliminate the insufficiency, no assurance can be given that Participants will be able to obtain all of their deposited securities. Redemption Provisions i I Optional Redemption. The Series 1998 Bonds maturing prior to or on September 1, are not subject to redemption prior to their maturity date. The Series 1998 Bonds maturing after September 1,' are subject to redemption at the option of the City prior to maturity on or after September 1, , in whole at any time, or in part from time to time on any interest payment date, in .:.J 5 crt -09 ,., such manner as shall be determined ~y the City at the redemption prices expressed as percentages of the principal amount of such Series 1998 Bonds to be redeemed, as set forth below, together with accrued interest to the date fixed for redemption: Redemption Periods (Both Dates Inclusive) Redemption Price September 1, September 1, through August 31, and thereafter '. - Mandatory Sjnldng Fund Redemption of the Series 1998 Term Bonds Maturing September 1, . The Series 1998A Bonds maturing on September 1, are subject to mandatory sinking fund redemption by funds deposited in the Bond Amortization Account in the Sinking Fund prior to maturity in part, by lot at a redemption price equal to their principal amount and the accrued interest on each September 1 in the years and amounts set forth below at a redemption price equal to 100% of the unpaid principal amount of such Series 1998 Bonds being redeemed plus accrued interest thereon to the date fixed for redemption, without premium: Yw: Principal Amount ,-. ~J ... Final Maturity Money held for the credit of the Bond Amortization Account is required to be applied to the retirement of term obligations as follows: (1) Subject to the provisions of paragraph (3) below, the City may purchase Tenn Bonds then outstanding at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal of such Tenn Bonds plus the accrued interest to the date of delivery thereof. The City is required to pay the interest accrued on such Tenn Bonds to the date of delivery thereof from the Interest Account and the purchase price from the Bond Amortization Account, but no such purchase may be made by the City within the period of 45 days immediately preceding any interest payment date on which Tenn Bonds are subject to call for redemption, except from money in excess of the amounts set aside or deposited for the redemption ofTenn Bonds. .'"h"\ ~ 6 qg -()q ~ (2) Subject to the provisions of paragraph (3) below, whenever sufficient money is on deposit in the Bond Amortization Account to redeem $5,000 or more principal amount of Term Bonds. the City may caU for redemption from money in the Bond Amortization Account such amount ofTenn Bonds then subject to redemption as, with the redemption premium, if any, will exhaust the money then held in the Bond Amortization Account as nearly as may be practicable. Prior to calling Tenn Bonds for redemption, the City is required to withdraw from the Interest Account and from the Bond Amortization Account and set aside in separate accounts or deposit with the paying agents the respective amounts required for paying the interest on and the principal of and redemption premium applicable to the Term Bonds so called for redemption. (3) Money in the Bond Amortization Account is required to be applied by the City in each fiscal year to the retirement of Term Bonds then outstanding in the following order: .......'::) '1",':1 (a) The Term Bonds of each series of Bonds, to the extent of the Amortization Installment, if any. for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium. if any, and, if the amount available in such Fiscal Year shall not be sufficient therefor, then in proportion to the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium, ifany; provided. however, that if the Term Bonds of any such series are not then subject to redemption from money in the Bond Amortization Account and if the City is at any time unable to exhaust the money applicable to the Term Bonds of such series under the provisions of this clause or in the purchase of such Term Bonds under the provisions of paragraph (1) above. such money or the balance of such money, as the case may be, must be retained in the Bond Amortization Account and. as soon as it is feasible, applied to the Term Bonds of such series; and (b) Any balance then remaining, other than money retained under the first clause ofthis paragraph (3). is required to be applied to the retirement of such Term Bonds as the City in its sole discretion determines, but only, in the case of the redemption ofTenn Bonds of any series, in such amounts and on such terms as may be provided in the resolution or ordinance authorizing the issuance of the obligations of such series. The City is required to pay from the Sinking Fund all expenses in connection with any such purchase or redemption. Notice of Redemption As long as the book-entry only system is used for determining beneficial ownership of the Series 1998 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be responsible for notifYing the DTC Participants, who will in turn be responsible for notifYing the Beneficial Owners. Any failure of Cede & Co. to notify any DTC Participant, or of any DTC Participant to notifY the Beneficial Owner of any such notice, will not affect the validity of the .~ 7 Qff-oq :.", ". ~:: i-t" . ....::'.. ,'.. ; ":;L ,. ...... ."> ". -.::: .' . c\. L ..., ::.'>; .!.'.' ., .:' ..' ... ....,.........c '" .,..:': \~'I' . . .' .11 ..' .;. " 11 "~";"' "e' H';'::.I", ,t' ".'~'" ..,; ,L.,O o ......' ..(....i~ "'.; .." \. "..'. "., ....: .~.. ~':. 'cf'"t ~:;..;.::,:'....! " './' ......... .:' .~. ;:" ~.>~ .'. .:.... ~ .' . ~ .. 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See "DESCRIPTION OF THE SERIES 1998 BONDS - Book-Entry Only System" for a description of DTC Participants and Beneficial Owners. In the event of the discontinuance of the book-entry only system, notice of redemption will be given by the Registrar (who shall be the Paying Agent for the Series 1998 Bonds, or such other person, firm or corporation as may from time to time be designated by the City as Registrar for the Series 1998 Bonds) by mailing a copy of the redemption notice by first-class mail (postage prepaid) not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for redemption to the Registered Owner of each Series 1998 Bond to be redeemed in whole or in part at the address shown on the registration books. Failure to give such notice by mailing to any Registered Owner of Bonds, or any defect therein, shall not affect the validity of any proceeding for the redemption of other Bonds. All Series 1998 Bonds or portions thereof so called for redemption will cease to bear interest after the specified redemption date provided funds for their redemption are on deposit at the place of payment at that time. Upon surrender of any Series 1998 Bond for redemption in part only, the City shall issue and deliver to the Registered Owner thereof, the costs of which shall be paid by the Registered Owner, a new Series 1998 Bond or Series 1998 Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion surrendered. :~) SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 1998 BONDS General The principal of, redemption premium, if any, and interest on the Series 1998 Bonds are payable from the Net Revenues equally and ratably with each other and the Parity Bonds. The Series 1998 Bonds and the Parity Bonds are secured by a first and prior lien on the Net Revenues derived from the operation of the System deposited in the Sinking Fund created 'and established under the Ordinance and from monies and investments deposited in certain funds and accounts established by the Ordinance and earnings thereon. The Series 1998 Bonds shall not constitute an indebtedness, liability, general or moral obligation, or a pledge of tbe faith, credit or taxing power of the City, the State, or any po1itica) subdivision thereof, within the meaning of any constitutional, statutory or charter provisions. Neither the State of Florida, nor any political subdivision thereof, nor the City shall be obligated (1) to levy ad valorenl taxes on any property to pay the principal of the Series 1998 Bonds, the interest thereon, or other costs incidental thereto or (2) to pay the same from any other funds of the City except from the Net Revenues, in the manner prClvided in the Ordinance. .,~ 8 q<3 -OC( ......, <. . .. ~ .'~J ., J The ~eries 1998 Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of the City, but shall constitute a first and prior lien only,on the Net Revenues in the manner provided in the Ordinance. . IINet Revenues" is defined in the Ordinance to mean Gross Revenues less the Cost of Operation and Maintenance. "Gross Revenuesll means alt monies received from rates, fees. rentals or other charges or income derived from the investment of funds, unless otherwise provided in the Ordinance, by the City or accruing to it in the operation of the System, all calculated in accordancc with sound accounting practice. IICost of Operation and Maintenance" of the System means all current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System. as calculated in accordance with sound accounting practice and includes, without limiting the generality ofthe foregoing, insurance premiums, administrative expenses of the City related solely to the System, labor, cost of materials and supplies used for current operation and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practicc, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation. The Bonds are further secured by a prior lien on and pledge of the monies and investments deposited in the Funds and Accounts established by the Ordinance except for monies and investments deposited in the Operation and Maintenance Fund and the Rebate Fund. Debt Service Reserve Account The Ordinance requires the establishment of a Reserve Account for the Series 1998 Bonds in an amount equal to the Reserve Account Requirement for the Series 1998 Bonds. The Ordinance authorizes the City to obtain the Surety Bond in place of fully funding the Reserve Account. Accordingly, application has been made to Ambac Assurance Corporation (" Ambac Assurancet1) for the issuance of a Surety Bond for the purpose of funding the Reserve Account for the Series 1998 Bonds. The Series 1998 Bonds will only be delivered upon the issuance of the Surety Bond. The premium on the Surety Bond is to be fully paid at or prior to the issuance and delivery ofthe Series 1998 Bonds. In the event and to the extent that moneys on deposit in the Sinking Fund, plus all amounts on deposit in and credited to the Reserve Account for the benefit of the Series 1998 Bonds, therein, in excess of the amount of the Surety Bond, are insufficient to pay the amount of principal and interest coming due, then, upon the later of(i) one (1) day after receipt by Ambac Assurance of a demand for payment executed by the Paying Agent certifying that provision for the payment of principal of or interest on the Series 1998 Bonds, when due, has not been made or (ii) the interest payment date specified in the Demand for Payment submitted to Ambac Assurance, the Surety Bond provides that Ambac Assurance will promptly deposit funds with the Paying Agent sufficient to enable the Paying Agent to make such payments due on the Series 1998 Bonds, but in no event exceeding the Surety Bond Coverage, as defined in the Surety Bond. Pursuant to the terms of the Surety Bond, Surety Bond Coverage is automatically reduced to the extent of each payment made by Ambac Assurance under the terms of the Surety Bond and the City is required to reimburse Ambac Assurance for any draws under the Surety Bond with interest 9 qrg-Oq - v - ~ ~t a market rate. Upon such reimbursement, the respective Surety Bond is reinstated to the extent of each principal reimbursement up to but not exceeding the Surety Bond Coverage. The reimbursement obligation of the City is subordinate to the Issuer's obligations with respect to the Series 1998 Bonds. In the event the amount on deposit in the Sinking Fund, plus all amounts on deposit in and credited to the Reserve Account for the benefit of the Series 1998 Bonds, therein, in addition to the amount available under the Surety Bond, includes amounts available under a letter of credit, insurance policy, surety bond or other such funding instrument (the "Additional Funding Instrumenf'), draws on the Surety Bond and the Additional Funding Instrument shall be made on a pro rata basis to fund the insufficiency for the Series 1998 Bonds. The Ordinance provides that the Reserve Account for the Series 1998 Bonds shall be replenished in the following priority: (i) principal and interest on the Surety Bond and on the Additional Funding Instruments shall be paid from first available Revenues on a pro rata basis; (ii) after all such amounts are paid in full, amounts necessary to fund the Reserve Account for the benefit of the Series 1998 Bonds to the required level, after taking into account the amounts available under the Surety Bond and the Additional Funding Instruments, if any, shall be deposited from next available Revenues. The Surety Bond does not insure against nonpayment caused by the insolvency or negligence of the Paying Agent. ..mol: j ~ . ',It Notwithstanding any provision of the Ordinance to the contrary, moneys in the Reserve Account for the Series 1998 Bonds may be used only for the purpose of the payment of maturing principal of or interest or making Amortization Installments on the Series 1998 Bonds when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose including the payment of any other series of Bonds. Ambac Assurance Corporation Ambac Assurance Corporation ("Amhac Assurance"). is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets of approximately $2,813,000,000 (unaudited) and statutory capital of approximately $1,605,000,000 (unaudited) as of September 30, 1997. Statutory capital consists of Ambac Assurance's policyholders' surplus and statutory contingency reserve. Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service and Fitch Investors Servicet L.P. have each assigned a triple-A claims-paying ability rating to Ambac Assurance. Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by Ambac Assurance will not affect the treatment for federal income tax purposes of interc:st on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy provisions substantially identical to those contained in the -..) 10 UfJ-ifI - ~ ~ Surety Bonds shall be treated for federal income tax purposes in the same manner as if such payments were made by the City. Ambac Assur'ance makes no representation regarding the Series 1998 Bonds or the advisability ofinvesting in the Series 1998 Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the infonnation supplied by Ambac Assurance and presented under the heading "SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 1998 BONDS - Debt Service Reserve Account" and "Alnbac Assurance Corporation. " Available Information ~ ,A""") . .. c~ {. The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the "Company"), is subject to the infonnational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other infonnation may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at 7 World Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 I West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the public reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the offices of the New York Stock Exchange, Inc. (the "NYSE") at 20 Broad Street, New York, New York 10005. The Company's Common Stock is listed on the NYSE. Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number are One State Street Plaza, 17th Floor, New York, New York 10004 and (212) 668-0340. Incorporation of Certain Documents by Reference The following documents filed by the Company with the Commission (File No. 1-10777) are incorporated by reference in this Official Statement: (1) The Company's Annual Report on Ponn IO-K for the fiscal year ended December 31, 1996, filed on March 31. 1997; (2) The Company's Current Report on Form 8-K dated March 12, 1997 and filed on March 12, 1997; (3) The Company's Quarterly Report on Fonn 10-Q for the fiscal quarterly period ended March 31, 1997 and filed on May 15, 1997; and ..~ II 0/3 -09 .- - ...- , . , J 1 1'~ , , (4) The Company's Quarterly Report on Form I Q-Q for the fiscal quarterly period ended June 30, 1997 and filed on August 14, 1997. (5) The Company's Quarterly Report on Form 1 Q-Q for the fiscal quarterly period ended September 30, 1997 and filed on November 14, .1997. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above under the heading It SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 1998 BONDS * Available Information. II FLOW OF FUNDS I' r I Establishment of Funds and Accounts The following Funds and Accounts have been established pursuant to the Ordinance: . . , (~) Revenue Fund Operation and Maintenance Fund Construction Fund Sinking Fund Interest Account Principal Account Reserve Account Bond Amortization Account Renewal and Replacement Fund A separate subaccount is required to be maintained in the Reserve Account for the Series 1998 Bonds. Priority of Flow of Funds The entire Gross Revenues, except the income from investments (hereinafter discussed), derived from the operation of the System must be deposited in the Revenue Fund. The Revenue Fund constitutes a trust fund for the purpose provided in the Ordinance, and must be kept separate and distinct from all other funds of the City and used only for the purposes and in the manner provided in the Ordinance. , All revenues at any time remaining on deposit in the Revenue Fund must be disposed of on or before the fifteenth (15th) day of each month only in the following manner and in the following order or priority: ,~ 12 Cfb-oq .~ I, Revenues must first be used to deposit in the Operation and Maintenance Fund. such sums as are necessary for the Cost of Operation and Maintenance for the next ensuing month. 2. Revenues must next be used for deposit into the Interest Account, such sums as will be sufficient to pay one-sixth (116) of all interest becoming due on the Series ] 998 Bonds and the Parity Bonds on the next semi-annual interest payment date. 3. Revenues must next be used for deposit into the Principal Account, in any bond year in which a Serial Bond matures, such sums as wilt be suffident to pay one-twelfth (1/12) of the principal maturing on Serial Bonds in such year. 4. Revenues must next be used for deposit into the Bond Amortization Account in any bond year in which an Amortization Installment is due, such sums as win be sufficient to pay. one- twelfth (1/12) of the Amortization Installment required to be made in such year. Such payment will . be credited to a separate special account for each series ofTenn Bonds outstanding, and if there is more than one stated maturity for Term Bonds of a series. then into a separate special account in the Bond Amortization Account for each such separate maturity of Term Bonds. The funds and investments in each such separate account are pledged solely to the payment of principal of the Term Bonds of the series or maturity within a series for which it is established and will not be available for payment, purchase or redemption ofTenn Bonds of any other series or within a series, or for transfer to any other account in the Sinking Fund to make up any deficiencies in required payments therein. .~.;,:) Moneys on deposit in each of the separate special accounts in the Bond Amortization Account are required to be used for the open market purchase or the redemption of Term bonds, pursuant to the Ordinance, of the series or maturity of Term Bonds within a series for which such separate special account is established or may remain in said separate special account and be invested until the stated date of maturity of the Term Bonds. . The required deposits to the Principal Account, Interest Account and Bond Amortization Account are required to be adjusted in order to take into account the amount of money currently on deposit therein. S. Revenues must next be applied by the City to maintain in each subaccount in the Reserve Account a sum equal to the Reserve Requirement. if any, for any subsequent year on each series of Bonds, which sum will initially be deposited therein from the proceeds of the sale of the Series ] 998 Bonds and other funds of the City. To the extent the City determines pursuant to a subsequent resolution to fund a subaccount within the Reserve Account for a respective series of Bonds, the City may provide that the difference between the amounts on deposit in such subaccount and the Reserve Requirement for such series of Bonds shall be an amount covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a surety bond, by a letter of credit or any combination thereof or by such other fonn of credit enhancement as shall be approved by a resolution of the City adopted prior to the issuance of the series of Bonds for which such subaccount is established. Such resolution may also provide for the substitution of such credit \....) 13 Cft-oCf ", " . .. -,~<) ~l . .~ .' .~ . '. ... ~ c ~, .... 'r," ; :r,. ; ." :. . ~:. ' ", . ~ . .' . ,~ . '. . .J~~":~..:". .~".I~, .1'..'>li......c. <~'.\ c.I'.....TI.;. ,'. .\.T~'" c , . .. .. ~.:.,:, '." ....:.. ~ . , " t., ~ . "e; .. " ... .' I:. :-":':" ".: .~. 'f:""': .:.... " '. '. .. '.' .. ; .. .....;" >,' '.' .' ~' ....... '.,.~ :n'::,i:"I'~I'." '.' /:'l~ ' , -;:2,\)',1">".... <<::,~ ....... ." ", :")iJ:,,': l: .,:'EI':CJ'.,":',.'i,':';;':.:,,:',.).. c... ".," + .,. ..~.I.:. ','.. '. ,...~.......c.~i".~.\. ",:, . .,... '.." ",'."; ',' '1:. "., ' . . ." '.. . '.' >.' . ~ . ~ :.,. .,.: ~ ' . ~ :.. I; .' '~" " I L ~ .". ::. . ;. :;'~ I . ....: :. ~ . . . "-1 ,'. . ..... ~:...~I .r' . , , / . ..';' ',' -. ii,,, .. I -, U ~ enhancement. Bond insurance, a surety bond, a letter of credit or any combination thereof or such other form of credit enhancement may in the future be deposited in the subaccount in the Reserve Account for any Series of Bonds as may be approved by subsequent resolution of the City, provided that the provider of such credit enhancement is then rated in one of the two highest rating categories (without regard to gradation) by Fitch and Moody's Investors Service, Inc. Any withdrawals from the Reserve Account are required to be subsequently restored from the first moneys available in the Revenue Fund on a pro rata basis as to aU sub accounts in the Reserve Account after all required current payments for the Operation and Maintenance Fund and Sinking Fund (including all deficiencies in prior payments to those Funds) have been made in full. Notwithstanding any provision of the Ordinance to the contrary, moneys in each subaccount in the Reserve Account may be used only for the purpose of the payment of maturing principal of or interest or making Amortization lnstcllments on the Bonds for which such subaccount was established when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose including the payment of any other series of Bonds. In the event of the refunding of any series of Bonds, the City may withdraw from the subaccount within the Reserve Account for such series of Bonds, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing the refunding of such series of Bonds. , .>'~ "'.'i' ~. ." 6. The City must next deposit into the Renewal and Replacement Fund an amount equal to one-twelfth (1112) ofan amount equaJ to 5% of prior year's Gross Revenues; provided, however) that so long as there shall be on deposit in such Renewal and Replacement Fund a balance of at least $300)000, no additional deposits in such Fund are required. The moneys in the Renewal and Replacement Fund may be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency repairs thereto. Such moneys on deposit in such Fund are also required to be used to supplement the Reserve Account if necessary, in order to prevent a default in the payment of the principal or Amortization Installments of and interest on the Bonds. 7. . The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may be used by the City for any lawful purpose. :.. 8. The Operation and Maintenance Fund. the Sinking Fund, the Renewal and Replacement Fund, the Revenue Fund. and all accounts therein and any other special funds established and created under the Ordinance constitute trust funds for the purposes provided in the Ordinance for such funds. All such funds shall be continuously secured in the same manner as City deposits are authorized to be secured by the laws of the State ofFJorida. ~ 14 ';i L'fg -09 r " . ~ . .. . . ;, . . ~ . ,. . ...... ' ~ '. ."," '. . ". . '" " I ',' . ,',.' <'. .~.~ ~...c'::.r.. ;,". .,:.....' :.. ....,,1./.: I .~. ........ "I.- ._....,:~.f.,w',.: '1,'.' ..... '. ............'.. . c .. ' . .... ,". .. . .. . . '.l~" . ".- .'r..":". . ." ' . ,,', :'~...:.,,::/.~~.t:.1~~.::.../........'~:,~~;..;-:.~.::.:.~. . ..~. ..", " ," .,.":~, .'..... .', .,~.l' ..;,.:i...:.:....:.\....!.:~..'.~ ..".' ,../..';.~.;::...;,..:-;..:,:....~...;:.,.?~: ,.;.:':/..../..~.',::.~..:..::<..,,;'.'........~.,:/._<'~. u.~ ;..>." ., >t '....~..~\..:.:.. I. '.,.' ,::~" .:f.::~.:~.:~.i. . \.~..':. C::..T~.>....~ f'" J .:..::....~:...:~.:..~.'.. '," .1>" . t ~:. . ... .+.':. . _ ".. " . ,,'. '"'. f....:<....:...\ ., ... .' (~ '>.::- ':.'. ,..... '.'; .' . , .' . ':. ,n'.:. :.. ':-:..;. '.~ :.:..,.::. ',,' ~,);. ". <;ti, '.::' ; .,.", ;::':;: n~ ',; j'L ,'/~ ;.:.,: :;::ii;;~;';:};''','',i '.~;I:;;-:.:,'" '\:, ,.\ ,:" ,', ",' ';;:');,:.;' ;"'.'''''' ~. '.. T .'{ " : :.~~.~ ::~>": .... : .~ COVENANTS Rate Covenant In and by the Ordinance, the City has covenanted that it will fix. establish, revise from time to time whenever necessary. maintain and collect alwayst such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which will always provide Revenues in each year sufficient to pay) and out of such funds paYt \00% of the Cost of Operation and Maintenance of the System in such year and aU reserve and other payments provided for in the Ordinance and 125% of the Bond Service Requirement due in such year on all outstanding Bonds. The City has covenanted that such rates, fees. rentals, or other charges shall not be reduced so as to be insufficient to provide Revenues for such purposes. Additional Parity Obligations Additional Parity Obligations, payable on a parity from Net Revenues of the System with the Series 1998 Bonds and the Parity Bonds, may be issued after the issuance of the Series 1998 Bonds. for construction and acquisition of additions, extensions and improvements to the System or for refunding purposes and upon the following conditions: ~:) '. . 1. The Net Revenues derived or which would have been derived, if adjusted as set forth below. from the System, either during the immediately preceding Fiscal Year. during any twelve (12) consecutive calendar months of the eighteen (18) calendar months immediately preceding the sale of the proposed Additional Parity Obligations or during the last twelve (12) month period for which the City has audited financial statements for the System, at the option of the City. shall have been not Jess than 125% of the Maximum Bond Service Requirement which will become due in any calendar year thereafter on (a) the Series 1998 Bonds then Outstanding, (b) any Additional Parity Obligations issued and then Outstanding (including the Parity Bonds), and (c) the Additional Parity Obligations then proposed to be issued. In determining the amount of Net Revenues for the purposes of paragraph (1) above, the Consulting Engineers may adjust the Net Revenues by adding thereto the following: a. The Net Revenues (computed for such utility on the same basis as net revenues are computed for the System) of any gas utility which the City shall have acquired prior to the issuance of such Additional Parity Obligations or which the City shall be acquiring from proceeds of such Additional Parity Obligations~ and b. In the event a change has been made in the rate schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (I) above, and such change has resulted in an increase in Net Revenues, such amount of additional Net Revenues which the consulting Engineers estimated would have been received by the City during such 12 month period if such change ,....) 15 qz-09 ~ in such rate schedule had been in effect during the entire 12 month period; and in the event a change has been made in the rate schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above. and such change has resulted in a decrease in Net Revenues, by subtracting therefrom such amount of the Net Revenues which the Consulting Engineers estimate would not have been received by the City during such 12 month period referred to in (I) above. if such change in such rate schedule had been in effect during the entire 12 month period. 2. Each resolution or ordinance authorizing the issuance of Additional Parity Obligations will recite that all of the covenants contained in the Ordinance win be applicable to such Additional Parity Obligations. 3. The City shall not be in default in perfonning any of the covenants and obligations of the Ordinance. if all payments required to have been made into the accounts and funds, as provided in the Ordinance. shall have been made to the full extent required. Operation and Maintenance . The City covenants it will maintain the System and all parts thereof in good condition and will operate the same in an efficient and economical manner making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. Operating Budget The City covenants to annually prepare and adopt prior to the beginning of each of its Fiscal Years) a detailed budget or budgets of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. Annual Audit At least once a year) within six months after the close of its Fiscal Year. the City covenants to cause the books) records and accounts relating to the System to be properly audited by a recognized independent finn of certified public accountants. No Mortgage or Sale of the System The City has covenanted not to sell, lease, mortgage. pledge or otherwise encumber the System, or any substantial part thereof, or any revenues to be derived therefrom, except as described below. . y 16 0/6-00 ,~ Notwithstanding the foregoing, the City has reserved the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which the City hereafter determines. in the manner provided in the Ordinance, to be no longer necessary, useful or profitable in the operation of the System. Prior to any such sale. lease or other disposition of said property. if the amount to be received therefor is not in excess of$50,OOO, the City Manager of the City or other duly authorized officer in charge thereof is required to make a finding in writing detennining that such property comprising a part of the System is no longer necessary. useful or profitable in the operation thereof. If the amount to be received from such sale, lease or other disposition of said property is in ex.cess of $50.000 but not in excess of $1 00,000 such City Manager or other officer is required to first make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof. and the governing body of the City must, by resolution or ordinance duly adopted, approve and concur in the finding of such City Manager or other officer, and authorize such sale, lease or other disposition of said property. , ,.,1') , . 'l"",:7 If the amount to be received from such sale, lease or other disposition of said property is in excess of$100,000 but not in excess of 10% of the value of fixed assets of the System according to the most recent annual audit report, such City Manager or other officer must first make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the Consulting Engineer must make a finding that it is in the best interest of the System that such property be disposed of, and the governing body of the City must by resolution or ordinance, duly adopted. approve and concur in the findings of such City Manager or other officer and of the Consulting Engineer, and authorize such sale, lease or other disposition of said property. Anything in this section to the contrary notwithstanding, nothing restricts the governing body of the City or, to the extent such authority has been vested in the City Manager by such governing body, the City Manager in exercising discretion, from authorizing the sale or other disposition of any of the property comprising a part of the System, if the Consulting Engineer certifies that the Net Revenues of the System will not be materially adversely affected by reason of such sale or disposition. Such proceeds must be placed in the Renewal and Replacement Fund or used for the retirement of outstanding Bonds, in such proportions to be determined by the governing body of the City upon the recommendations of the City Manager. The payment of such proceeds into the Renewal and Replacement Fund does not reduce the amounts required to be paid into such Fund by other provisions of the Ordinance. Anything in this section to the contrary notwithstanding, nothing prohibits the City from transferring ownership of the System to another governniental entity in accordance with the Ordinance without complying with the provisions described in this section. ;J 17 qg-Oq ~ No Free Service The City has covenanted in the Original Ordinance that it will not render or cause to be rendered any free services of any nature by the System, nor will any preferential rates be established for users of the same class. Whenever the City, including its departments, agencies and instrumentalities, avails itself of the product, facilities or services provided by the System, or any part thereof, the same rates. fees or charges applicable to other customers receiving like services under similar circumstances must be charged to the City and any such department, agency or instrumen- tality. Such charges must be paid as they accrue, and the City shall transfer from its general funds to the Revenue Fund sufficient sums to pay such charges. The revenues so received will be deemed to be Revenues derived from the operation of the System. and will be deposited and accounted for in the same manner as other Revenues derived from such operation of the System. Consistent with the foregoing, to the extent that certain marketing and sales programs may involve incentives to customers (other than free energy service), expenses of such incentives are paid by charges against appropriate marketing and sales expenses o~ the System. Enforcement of Collections ,'~~~l) The City has covenanted to enforce and collect the rates. fees and other charges for the . setvices and facilities of the System pledged under the Ordinance; to take all steps, actions and proceedings for the: enforcement and collection of such rates. charges and fees as shall become delinquent to the full extent permitted or authorized by law; and to maintain accurate records with respect thereof. AU such fees. rates, charges and revenues pledged pursuant to the Ordinance wiJJ, as collected. be held in trust to be applied as provided in the Ordinance. The City will, under reasonable rules and regulations, to the full extent pennitted by law, shut off the connection of any users of the System for non-payment offees, rentals and other charges for the services ofthe System and will not furnish him or permit him to receive from the System further service until all obligations owed by him to the City on account of services have been paid in full. No Competing System To the full extent permitted by law, the City has covenanted not to herealler grant, or cause. consent to, or allow the granting of, any franchise or pennit to any person. finn, corporation or body, or agency or instrumentality whatsoever. for the furnishing of competing gas services to or within the boundaries of the service area of the City; provided, however, that if the frdS System Manager renders an opinion that it would not be feasible for the City to provide such services to any specific area within the three years succeeding a request to provide such service. the City may authorize or allow the granting of such franchise or permit for such area upon such tenns and conditions as it may approve. .~ 18 Cfl-09 " Unlawful Connection Prohibited The City has enacted an ordinance making it unlawful for any person or persons to tamper wit~ change or make any connection with the System without the written consent ofthe City, or to make any reconnection with the System when service has been discontinued for delinquent charges, until such delinquent charges have been paid in full, including interest, reasonable penalties and reconnection charges. The City will diligently, to the full extent pennitted by lawJ enforce this covenant and prosecute any person violating the provisions of this covenant or any penal ordinance relating to the same. Amendment of the Ordinance ~ ~ In the Ordinance, the City has reserved the right to amend or supplement the Ordinance for certain purposes without the consent of Bondholders if the amendment or supplement does not adversely affect the rights of Bondholders. Otherwise, no material modification or amendment of the Ordinance may be made without the consent in writing of the Holders of fifty~one percent or more of the principal amount of the Bonds of each Series so affected and then outstanding. For purposes of the foregoing, to the extent that Bonds of any Series are secured by a Credit Facility and such Bonds are then rated in one of the two highest rating categories (without regard to gradation) by either Fitch or Moody's Investors Service, Inc., or successors and assigns, then the corisent of the Credit Facility issuer will be deemed to constitute the consent of the Bondholders of such Series and in such case no consent of the Bondholders of such Series is required. Notwithstanding the foregoing, no modification or amendment of the Ordinance may permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the City to pay the principal of and interest on the Bonds as the same become due from the Net Revenues of the System or reduce the percentage of the Bondholders required to consent to any material modification or amendment of the Ordinance without the consent of the Bondholders of all such obligations. THE SYSTEM Physical Description The Clearwater Gas System (the "System") began operations in the mid~] 9201s with the production, distribution and sale of manufactured gas. The System was converted to natural gas in 1959 when Florida Gas Transmission (FGT) extended pipelines into Florida. The System also provides propane (LP) service in areas where natural gas mains have not yet been extended. In addition to serving the City of Clearwater, the System has expanded into, and has franchise agreements with, the cities of BeHeair, Belleair Beach, Belleair Bluffs, Belleair Shores, Dunedin, Indian Rocks Beach, Largo, New Port Richey, Oldsmar,'Port Richey, Safety Harbor, and Tarpon Springs. The System also services the unincorporated area between these cities. The franchise agreements expire respectively in 2020, 2003, 2002, 2027, 2020, 20]8, 2000, 2025, 2014, 2025, v 19 q~'-Oq '~ 2001 and 20] 4, which in some instances is prior to the maturity of the Series 1998 Bonds. It is anticipated that such franchise agreements will be renewed upon their expiration~ however~ there is no assurance of such renewals. Each franchise agreement authorizes the respective municipality to terminate the franchise agreement in the event the City fails to furni~h gas for a period of 72 hours as required by the agreement for causes within the control of the City. In addition, the franchise agreements with Dunedin, Belleair Bluffs, Largo and Safety Harbor authorize the municipality to purchase from the City the property used with respect to each franchise at the expiration of the franchise. The franchise agreements with Oldsmar and Tarpon Springs authorize Oldsmar and Tarpon Springs to purchase such property during the term of the franchise as well as at expiration. The System currently serves 13.251 customers and has 571.6 miles of gas main as of July. 1997. According to a survey conducted by pjpeline & Gas Journal dated September, 1996, the System ranked as the fourth largest of 28 municipally owned natural gas system in Florida and the 42nd largest municipally-owned natural gas system in the United States of961 total. Management The City has a Commission-Manager form of municipal government. The Mayor- Commissioner and Commissioners are elected by the City's voters on an at-large basis. All have voting power at Commission meetings which are chaired by the Mayor-Commissioner. The City Commission appoints the City Manager and the City Manager is responsible for appointing all officers and employees in the administrative service of the City) including the Managing Director & Executive Officer of the Clearwater Gas System. :~~) " The Clearwater Gas System is administered by the Gas System Managing Director & Executive Officer who reports directly to the City Manager. The System is one of seven utilities (Water) Rec1aimed Water. Sewer, Gas, Solid Waste) Recycling, and Stormwater) billed on a consolidated basis by the Clearwater Utility Customer Service. Charles S. Warrington, Jr. currently serves as Managing Director & Executive Officer of the Clearwater Gas System and reports directly to the City Manager. He received his Bachelor of Electrical Engineering degree from the Georgia Institute of Technology in 1971 and is a 1982 graduate of the University of Michigan Public Utility Executive Program. He has been a registered Professional Engineer in the State of Florida since 1976. Prior to joining the City of Clearwater in February 1992, Mr. Warrington served as Director of Customer Services for Florida Power & Light Company (FPL). the largest electric utility in the State of Florida. Mr. Warrington was responsible for corporate.wide customer service policies) procedures, systems, training and regulatory interface. Prior to this position, he had served as a. District General Manager for two (2) of the largest FPL districts (Miami and Coral Gables). In total, Mr. Warrington has 27 years of public utility experience of increasing responsibility. Mr. Warrington currently serves on the Board of Directors of both the American Public Gas Association and the Florida Natural Gas Association, serves on the Municipal Gas System Advisory ,~J 20 Cf1 ~09 - 6~ Committee of the Gas Research Institute, serves on the Board of Directors of the Municipal Gas Authority of Florida, serves on the board of directors and as Vice President and Past President of the Florida Municipal Natural Gas Association, and serves on the Board of Directors and as Past President of the Florida Engineering Society - Pinellas Chapter. Terry Neenan has served as Assistant Director of CGS/Gas Supply and Operations since February, 1994. Prior to that he served as Gas Superintendent from 1986 until 1994, Assistant Superintendent from 1982 to 1986, Service Supervisor from 1979 to 1982 and Utilities Serviceman from 1968 to 1979 all with the Clearwater Gas System. He holds a Master Gas Contractor License with PineUas County, a Natural Gas Specialty Contractor License with the Pinellas County Construction Licensing Board, a 601 LP License from the Department of Agriculture and holds other licenses and certificates related to natural and LP gas. Mr. Neenan serves as the propane qualifier for the Clearwater Gas System in Pinellas County and serves as the natural gas qualifier in Pinetlas County. Mr. Neenan attended S1. Petersburg Junior College and the Florida Gas Transmission School in Sanford. He has served as a Secretary, Treasurer, Vice Chairman and Chairman of the Operating Section of the Florida Natural Gas Association. He has also served two years as Secretary to the Florida Municipal Natural Gas Association. He has also served as Secretary, Vice Chairman and twice elected as Chairman of the Municipal Gas Authority of Florida, ajoint gas buying agency. ""...) James M. Lewin, Sr. has served as Assistant Director of CGS/Gas Marketing & Planning since April 1994. Prior to that, he served as Assistant Superintendent from 1986 to 1994, Gas Supervisor from 1977 to 1986, and as a Distribution Serviceman from 1974 to 1977, all with the Clearwater Gas System. Mr. Lewin also holds a Natural Gas Specialty Contractor License with the Pinellas County Construction Licensing Board, a 601 LP License from the Department of Agriculture, and holds other licenses and certificates related to natural gas. He is three (3) credit hours from completing an Associate of Arts Degree in Business Administration from the S1. Petersburg Junior College. Robert Bublitz has served as Controller for the Clearwater Gas System since October 1994. Mr. Bublitz served as the Finance Director and Director of Administrative Services with the City of Tarpon Springs, Florida, for 15 years prior to joining the Clearwater Gas System as Controller. In total, Mr. Bublitz has 28 years of Municipal experience. He received his Bachelor of Business Administration degree in 1965 from Spencerian Business College in Milwaukee, Wisconsin. Gas Supply The City purchases its supply of natural gas from four gas suppliers through our gas management company, C.C. Pace. The four suppliers are: Coastal Gas marketing~ Western Resources; Aquila Gas marketing; and Texaco natural Gas Company. The present supply is based on service agreements between the City, the Municipal Gas Authority of Florida (MGAF), C.C. Pace (Engage Energy); and the Florida Gas Transmission Company (FGT). On August 1, 1990, the Federal Energy Regulatory Commission (FERC) deregulated the natural gas pipeline industry. This ~ 21 qct ~09 . .," '. .' ~. . .... "': t" I/~I ;~. ..,t.,...', ~ . I ~:r"'. l.~.~............v.; ~. j..... .~II;'~" '~. ,/. . r .~........ . . " '.' .. ,', ... ~ \ ,', ',' . ,...f.' , .\'" ' :::. ", l-.,I->~" 1}"',:.... "...~L. ~.';,I"". ,\c., ",...0' " " . '. " ~~" ;,},,:;'i": ',: ' " ,',' .', ",: "', ;:::;:,:;;\~:,','::::::,,::-!j.~g;;:,~.;t'~'.kf\C:::'Ltr:~.,:D>';8xi:~::9;;.k: ;., " . ,.'. . .' .. '.'- .',' ,,,.. ..~.i'I" ,', ""::'W~ ':,1...', '::'tn' . .'.", " "'. :". '~., 'I!"~ ',.,'..,-" ::' : " ,-' ".', ,,;::.;,/:i.i >c;::,<" :::111"'': '\", , . ,- l" " ,.... . , ' , )~:" . .',' " , . '. 1 ",., , _, ,'.'.~..:,-..:.~j.~",' .',:1',:~.~,:,:..::~.;,::,' :",:,: .,\.,.:_~:..,.,:.;.:;::.>... ,':,::':,.~,:"~,:,...',.",:,:,,,:,,'~~".':''''''.::;.,:.....:..:i.::.:..: '::'1..:~_.\.7,',:._'~,:.',",:.:/~:',:~.'~."';;"'" ., .', .' ., '. "'~':' :;, \ > '~" :..-~. :~ ,:~ ~'~._'<:.;.,'.: - .....; ;,~;~: ,:: /,,:,;,i. " '. .' . ' ,', . - -' ,.' ~" ,',. ,/ .~. "',:' ',~~ :,\, l:+, .;"."!' ~'..:<:r;~..~, .....,.. '\, ,n. . . ,,' . :;- f',: ,,': ,..'.., ". "._ .j ...;;' ':' '-t, ,_.:~'~".:~- :<:i .~:':.:t./;':"\':',;.:.,' :<:;'.) ::., ..:,: . . :;' .~.' : .. :\:~.' . ~ I' '::, ':(... ::, >' :.', ,- . :>. T,l t, - ,; ~ allows other natural gas supplicrs and local distribution com panics. like the Clearwater Gas System to transport gas over FGT pipelines as opposed to purchasing natural gas supply from only FGT. FGT at the present time is equally owned by Enron Corporation and Sonat, Inc. Enron Corporation, through its subsidiaries, operates or has interest in approximately 37,000 miles of transportation pipelines from Texas to the Canadian border and from California to Florida. Sonat, Inc. owns and has interest in natural gas transportation facilities that provide service in the states of Florida, Georgia, Alabama, South Carolina, Tennessee, Mississippi, and Texas as welt as the Federal Offshore Domain in and around the State of Louisiana. t'') MGAF is an inter-local municipal organization which purchases natural gas supplies for 14 municipally owned local distribution companies and gas districts served by FGT. Clearwater Gas System was a leader in forming MGAF. The City of Clearwater joined MGAF by Resolution 92.75 which was adopted by the City Commission on December 3, 1992. MGAF began purchasing gas supplies for Clearwater Gas System through a three year gas management and supply acquisition contract with Citrus Industrial Sales Company (CISC) in November, 1993. elSC's contract expired as of October 30, 1996. MGAF therefore decided to split up the gas management and gas supply contracts through the use ofRFP's. During the summer of 1996 MGAF issued an RFP for a gas management contract which was awarded to C.C. Pace of Fairfax, Virginia. The gas supply contracts were awarded to Coastal Gas Marketing, Western Resources, Aquila Gas Marketing and Texaco Natural Gas Company. These agreements provide Clearwater with a maximum daily quantity of approximately 10,219 Dekatherms (Dth) of natural gas during the months of November to April; 4,652 Dth's during the months of May to September; and 7,496 nth's for the month of October. The total annual entitlement is 2t803,990 Dth's of natural gas transportation excluding Phase III. FGT has constructed an additional gas pipeline along the west coast of Florida called Phase III, which increased the supplies of gas available to the System. The System has transportation contract agreements with FGT for an additionallt871 Dth's to be delivered during the summer and 1,348 nth's to be delivered in the winter. Phase III increased the System's early transportation entitlements by 572,174 nth's. This has established a new annual entitlement of 3.376,164 Dth's to be delivered by FGT pipelines, which will provide adequate capacity through at least the year 1999. It is anticipated that additional entitlements can be acquired from either the proposed Phase IV or use the additional excess capacity in the MGAF Group to satisfy the System's customers' needs into the twenty-first century. Rates, Fees and Charges The City Commission has established a schedule of rates and charges by ordinance, which includes a purchased gas cost adjustment provision allowing the City to pass-through to customers any increase or decrease in the purchased price of gas. The City is not subject to regulation by any State agency in establishing or revising its rates. Where competitive fuel sources or transportation service are available to the customer, the City Commission has authorized the City Manager to enter into contract gas service rates at special rates and/or conditions as required to obtain/retain the <;) 22 q~ -0 9 - ~ customer load. Such contract service must meet the normal construction feasibility formula to insure profitable payback to the City. As of November 1997, contract rates applied to 285 customer accounts and impacted less than 16.9% of total revenues. The current rates charged by the System are a part ofthe Phase I Gas Rate Case implemented October 1, 1995, which was based on a comprehensive cost of service study performed by the Utility Advisory Services Group of the international accounting firm of Coopers & Lybrand~ LLP (the "Rate Studyll). This Phase I implementation resulted in an extensive overhaul of the Gas System customer rates, providing numerous classes of service and a modernized billing methodology. The new rates were designed to be industry~based and responsive to the competitive energy challenges. The goal of the Rate Study was to establish rates which would be fair to atl classes of customers, provide funding to implement planned expansion in both existing northern Pinellas County service area and into the newly acquired southwestern Pasco service area, and provide an adequate growth potential in return to the City of Clearwater to further offset the ad valorem tax rates (current impact is about 0.5 mills). As the result of experience during the first seven months of the Phase I implementation adjustments in the Phase II rates were implemented on October 1, 1996. The Phase III rates were effective October 1, 1997. The total projected impact of both new phases of the rate case is $1.05 million or less than 7.9% of total gas sales revenues. :'-) ..... The first reading of the rate ordinance containing the proposed Phase II and Phase III rates changes was conducted by the City Commission on May 16, 1996 and the second reading and final approval occurred on June 6. 1996. The rate adjustments approved by the City Commission became effective as to the Phase II adjustments on October 1, 1996 and became effective, as to the Phase III rates, on October 1, 1997. Set forth in APPENDIX G hereto is a table containing current rates of the System. Service Area As of November. 1997, the System served over 13,396 customers (comprised of 12,384 natural gas customers and 1,012 L.P. gas customers) in 14 municipalities as well as the unincorporated areas of northern Pinellas County and southwestern Pasco County as fotlows: Municipalities served, BeUeair, Betleair Beach, Belteair Bluffs, Beltcair Shore, Clearwater, Dunedin. Indian Rocks Beach, Indian Shores, Largo, New Port Richey, Oldsmar, Port Richey, Safety Harbor and Tarpon Springs. In unincorporated Pinetlas County, the System serves, Crystal Beach, East Lake. Harbor Bluffs, Harbor Hills, Highpoint. Ozona, Palm Harbor and Top of the World. The System serves the unincorporated Pasco County areas of Anc1ote, Elfers, Gulf Harbors, Harbor Isles~ Holiday, Moon Lake, Odessa, Serenova and Trinity. ~ 23 tlf /09 I ~ . " L~:I '" .;. ',' ;.', .':'~:.':. ~ " '~"~"" p' l.'....~ ".... '" "' .,~I.~' .".' .:....:.'. ''''':'' ~.: ". ,-,'.' .',->'. . '. .' ," ',~' ~ ' '.,,; _." " """~' '<''',.' j;.'.," .,.:-::1_>-'-';'':,.;'':' ,..~.-'" ! ;f:',/ . <:.:., ". ::':.~;~;:: '~:Fl: ..;<< ,: ,::/' I' t,:'.,. ".,~/(~;;f ::.:.?>..:/i~'i.'(i ;:,::?';,';" . .' 1~' >""";.;:;~.~:',>,..';:' ':, I;J ,fl:,,, ' rD" .' . -, .... .>":'.".,, '~;':,'., ,.,' . '.. i.' ,;." ,:~ :"~"i ' .j ~ .',F:',>::t; :i:':E(;:: :~:.;;:,', .-);:~.:': ?J T..O " r :.'; , ... ~, ~<':.'. "!!!o. ...... ..... ,..,. -- /-., The northern Pinellas County service territory is approximately 135 square miles arid extends . from Ulmcrton and Walsingham Roads on the south to the Pasco County line on the north and from the Gulf of Mexico on the west to the HilIsborough County line on the east. The System is in the process of extending gas mains and services into a 117 square mile service territory in southwestern Pusco County which will extend from the Gulf of Mexico on the west inland approximately ten miles to just west of State Road 41 and Land Q'Lakes (general1y along the right-of-way for the proposed North Suncoast Parkway) and from the Pinellas and HilIsborough County lines on the south to generally State Road 52 on the north. Within the current service boundaries, there is significant opportunity for growth because the System already has installed approximately 515 miles of gas main in the current Pinetlas County service area with a 7% customer saturation. There is also significant opportunity to expand into the developing areas of southwestern Pasco County. In total the service territory encompasses approximately 252 square miles with a service population of over 600,000 people. The service area is bordered on the south, east and north by Peoples Gas System, Inc" an investor.:.owned gas utility. ' . As of September 30, 1997, the System's active natural gas customers were located as shown in the following table: Location Meters Percentage Belleair 303 2.56% Belleair Beach 66 0.56 Cw) Belleair Bluffs 14 0.12 Belleair Shores 10 0.08 Clearwater 6,318 53.3R Dunedin . 978 8.26 Indian Rocks Beach 24 0.20 Largo 1 , 162 9.82 New Port Richey 18 0.15 Oldsmar 25 . 0.21 Port Richey 5 0.04 . SRfety Harbor 567 4.79 Tarpon Springs 433 3.66 Ui1incorporated Areas Pasco 75 0.63 Unincorporated Areas Pinellas 1.839 15.54 Total 11,837 100.00% The System provides service to firm (non-interruptible) and interruptible classes of customers. The System derives less than two percent of its revenues from its largest finn customer. ,:) 24 tp/09 " '1"'" ./ . r ,r ~ ~ ~ Or.' (. . " /. ' , , , .. ,/ ~:'" ", i . . :1,.' .H ,',." : .... " ." ," " .,<."': ' ;.:.... TC '.' .... ,/'1,' ,~.'.cc' ""':','., ;"', ....'.., ,. ',".. .<.: ~ ' ., . I':;, '~ '.~ t, ~. ' . I , '. ~, . I, " I . , .' ~ :~,.~. . :"'1." .:,.";. "..f"" :'; " '-: '..,,' " ,,:',,:::,', ',;:; j:.)O:::/,,{,j,:- C-~)tf,::-:-,..'.'.t.8,[;':/;,'''i:n::,{:,: :_;~;;:' '. ,,'or C . ... .. .' .' .' "j:: ~;. ~.' ,:;.,.:;:.,.:,~, :~,I.'~~. I'; .oc" .I~.'.~~,~:' "~.' ::,.,,~'n1.', . .'.+ : '~'...JtI ," , .'..... . ~:.. ,- ,: c .' :. ~~ . .'-. ,Ir' ,.,' ,I ' . ~ . ...'. ~:, '.> -- - ,~ The following table shows the five largest interruptible customers by pcak monthly consumption and the percent of the System's revenues derived from such customers during the 12 months ending Septcmber 30, 1997: Customer Name Peak Monthly Therms %of. pross Revenues Morton F. Plant Hospital National Linen Services, Inc. Metal Industries, Inc. Clearwater l.:nen & Uniform Supply, Inc. Mease Hospital 142,553 86,966 66t899 2.50% 2.66 2.33 25,255 24,702 1.03 0.59 The System's natural gas ciJstomers have grown in the past six years from 10A90 in September of 1989 to 12,384 in November of 1997. The System's 13,396 customers represent a market penetration of approximately 5%, providing an opportunity for continued customer growth within the existing service area. The following table shows the breakdown of the System's customers by category as wen as the volume of gas sold and the sales revenues generated by each category for the fiscal year ending J Septembcr 30, 1997: Average No. Customers Gas Volume Gas ~ Interruptible . Residential Commercial 12 10,706 1,588 21.33% 22.94% 55.73% 11.88% 31.28% 56.84% Cleanvater Gas Strategic Plan The management of the Clearwater Gas System developed a comprehensive 111995-2002 Strategic Plan" which was presented to the City of Clearwater Commission on May 16, 1996. This Strategic Plan provided three (3) strategic opportunities: 1. Accelerate growth in Pinellas County - this is projccted to add an additional 5,300 new customers by the year 2002; 2. Expand gas service into Pasco County. this is projected to add an additional 4,500 new customers by the year 2002; and ,::; 25 qg -09 ~ *., >' ~, ".': "I" . .. 0 . ~ . ~ . > . . '". ." . , (' 1... t' :>:::'.\>.t.:~,'.:~..:~.;,:}t:. :;",:,,. " P,.' . :".. \. .. ", <.. :;:.:;: '.' ", ~'.':';< '.H '::' ,', .<'.!: . ',:,.~,:' '...~., " ' ..., . ".. ,,,,:,,,,:,"": >.......,'.:.~','.:.:.,.~..:'.;. "::-,".'1<'. ,,", , '-:;: ." :"("',.,. ~:".:i'}'~,.'i,.\;l~C::\';: :'<~/"':~~12,:,:"(,}:.~r>':;."~/i:.(:,'~~/t~?~:; .'j(:~;:i;!:;~:;~./ '''. ......., .:r."' I.> . ,. ~.,".:~>:..../ ...' .!:':"',"":/..: \::::--.< It,'/ :~L:'.'.:,~.:'::'."',~.' .~",.,. 01':,.'.:. '<":< c." H "..:, ,<. t 'J '!'".' "" ,',.. . f ~ .' .,". .' .... I,. ". 'i- " . ,. I'~ " , .;,....., ." ~ . '. /.....,' ',\ . .' .:. . ~~ :l.:} ,.' '"".-.. p,' \. ;:. " . ~ 3. Develop new Gas Markets - this would anow the System to expand services into new market opportunity areas such as natural gas vehicles and gas air conditioning. II ,.. ~. I cJ."" :~. I The City Commission approved the Strategic Plan in its entirety which contemplates the issuance of Gas Revenue Bonds as described below. ,,\ Future Projects -... The Strategic Plan projects future bond issues to be funded by the Gas System Revenue Bonds as follows: "" . . .... , . Future Strategic Previous Additional Lon\J Ranl!e Slrntctl1c Plan Bond Issues (1993.2002) fmn ~ ~ (in millions) Pinellns County Gas Main & Service Extensions $11.77 55.86 55.91 Pinellas Improvements 3.52 1.63 1.89 Pinellas .Reloc.o.tion 7.47 3.00 4.47 Pinellas Land, Bldg. & Equip 1.86 1.22 .64 Pasco County Gas Main &. Service Extensions & l.P 14.63 9.15 5.48 Pasco RelOCl1tion .43 .00 .43 Pasco Land, Bldg. & Equip 1.99 1.03 .96 /...~ Develop New Gas Markets -1...H ~ -.llil \ ). .."J ~ I." Subtotal Net Capital Requirements for Strntegic Plan Expansion .IDm. lli.ll ~ Allowance for Bond Expenses &. Debt Service Reserve Fund ~ ~ ~ Total Gas Revenue Bond Issues Projected $49.29 $25.85 $23.44 Pasco County Territorial Dispute " ;". , ; ..... ':,', :". ,j,.>' ..1' .~. > . , . . "i,. ~ . On June 21. 1994, Peoples Gas System, Inc., petitioned the Florida Public Service COI11IlUssion (FPSC) to resolve a territorial dispute between Peoples Gas System ePGSU) and the Clearwater Gas System relating to the Pasco County servicc territory. PGS asked the FPSC to deny the System the Pasco County territory and to certifY the area for PGS. The dispute was settled in the spring of 1995. with the settlement providing the Systcm with 117 square miles of expanded service territory in southwestern Pasco County. However, the settlement also precludes the System from expanding to the north and east in Pasco County, which service areas were assigned to PGS. Environmental Remediation Costs; Environmental Imposition Rate Adjustment In December 1993, the Florida Department of Environmental Protection f'FDEpn) informed the City that it intended to pursue an investigation of the City of Clearwater Manufactured Gas Plant ~ .. 26 qg ~()9 .'~' ... ~ , l~:."'l ~ ~ ~ ...~ '. .t ':':~: ~":;::':~>/~<::~:<::> ::'c'):: I%PC;~~:;N?:;,:;,,; ,; : ':;'. -~;~. -~ \ '.' ..' ". '. .......'.:~~:.....~. ..... ..i':..:'~. 1:......,:.:~:.'::.~1..:.;:1;,;:~: ,,' ',',,',~ ",1-1,',.... ;~";.:.:~...~'... .<~,J?/,.,'~.::.<.:::"..:..:;.':...,';.,...:.,...:.'.,..;'i:..,":',,{>:~.",.,:':'.':::.'_,:',.':, ,:-,,-"',-,":-:,",. ,. "..." ",:',,~"~':\.''';.::''.:.' .'. "'" .,' ''''':~'::''/;.4.:.:::'::',:;~.:,',,' .". _ ". .~. '. _ >.:..:", . ,",. '."'. '.',. .....,' """I.~.',~:'.. ,_ """':,":,,,.:,'::",..;,. '....,...,." ";,':::}/if"<~~.:,:.},:,;:/.c~\}~Jrt!:.:,~.)".~'.'..,.::.'~,'.'.:. ,,: .~.>, . '.:,. ' ',".,'<,! :',', ," .:<\:),':t::,'(; . ." .. " ". . .' '" :,":: ::::;~,\?~ 8"....,(::;;1~ \:,:{,J' :;"': ;:;;;~ I ,,'~': ,: .;: :,:' ,',,<Y' , ",~: >."". -:;... JJ ,," .... ,'c .:,~ .':..'" , . ,.. .:',' .' ,,':':.'.:. _<~"~"" c>" ~;,~,."'::C':.:;,'~:'~\'\.,:,.:, " ;.~.:',>:""",,. ~.':I.: ':':""'~.: " ".',.' . . ~ : t .. " ~ (the "Former Plant") site which was located from the I 920ts through about 1960 at the current site of the System's Administrative Offices and Pineltas Operations Center. The main components of the Former Plant were removed between 1960 and 1985 and the site is currently paved. An initial investigation by the Federal Environmental Protection Agency in the late 1980's determined that no serious health hazards existed at this site but referred it to the FDEP for future monitoring. During 1995, the System completed the required Comprehensive Assessment Plan (CAP) and removed two fuel oil storage tanks found during the 1995 site investigation. In 1998 the System will continue the site investigation for possible contamination, which may include contamination from the operations of not only the Fonner Plant but also the City Fleet Maintenance FacilitYt City Incinerator and City Paint Shop which were altlocated on this site over the years. CGS has abandoned several existing gas mains which were located on the site and have experienced leakage problems in recent years. The City has retained the services of both an environmental attorney and an environmental consultant to assist with the site investigation. The City has negotiated through its environmental attorney an interloca1 agreement with the FDEP to facilitate a review of the site investigation findings. The interlocal agreement was ratified by the City Commission on March 7, 1996, and appr\lved by the FDEP. ~) r, L~/ Although the System operated the Former Plant in full comp!iance with all thenwappticable environmental rules, the current review is being undertaken under more stringent environmental requirements imposed in recent years to ensure that any contamination at the site will not adversely affect the water supply. Environmental Consulting & Technology) Inc. (ECT) of Tampa, Florida, has been retained as the System's ~::1Vironmental consultant. During 1995 ECT, with the assistance of the System's crews, drilled holes and excavated a small segment of the Former Plant site in order to prepare the CAP. ' ECT submitted a revised Contamination Assessment Plan (I1CAPU) to FDEP on November 2, 1995. While there has been a conceptual agreement on the CAP, to date, no final FDEP approval has been received. At this time, it is not possible to estimate the cost of cleaning up the site as the amount or type of contamination is unknown at this time. The cost of the investigation and resulting remediation of the site will be funded through an Environmental Imposition Adjustment (EIA) applicable to all firm standard natural gas therm rates and standard propane (LP) gallon rates. The EIA permits the System to recover the cost of environmental costs imposed on the System by federal, state and local regulatory agencies. The current EIA is $O.OlO per therm or $0.009 per gallon of usage which has been collected since October It 1995. Through November) 1997, $282t113.04 of the total $326,154.92 of environmental costs actually expended has been recovered through the EIA. \,~~) 27 q<l -'09 - -- .....- ~~ .' '~ MUNICIPAL BOND INSURANCE The following information has been furnished by MBIA Insurance Corporation ("MBIA" or the "Insurer") for use in this Official Statement. Reference is made to Appendix F herein for a specimen of MUlA's bond insurance policy. MBIA's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the City to the Paying Agent or its successor of an amount equal to (1) the principal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 1998 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (2) the reimbursement of any such payment which is subsequently recovered from any owner of the Series 1998 Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a. "Preference"). ~~;~') MBIA's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Series 1998 Bond. MBIA's policy does not, under any circumstance, insure against loss relating to: (1) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (2) any payments to be made on an accelerated basis; (3) payments of the purchase price of Series 1998 Bonds upon tender by an owner thereof; or (4) any Preference relating to (1) through (3) above. rvlBIA's policy also does not insure against nonpayment of principal of or interest on the Series 1998 Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 1998 Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by MBIA from the Paying Agent or any owner of a Series 1998 Bond the payment of an insured amount for which is then due, that such required payment has not been made, MBIA on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New Yark, New York, or its successor, sufficient for the payment of any such insured amounts which are then due, Upon presentment and surrender of such Series 1998 Bonds or presentment of such other proof of ownership of the Series 1998 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 1998 Bonds as are paid by MBIA, and appropriate instruments to effect the appointment ofMBIA as agent for such owners of the Series 1998 Bonds in any legal proceeding related to payment of insured amounts on the Series 1998 Bonds. such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the , <~, 28 Cfl.roq ,',I .< '.de'. r' .~~: .\,.'.: ~'.:~,'...".I:,',~._.:.fL:.''':',:~~.. ,. _ .....~. 'B.o., 'Ie I. '.' .' .~. ..'. ... .. . " :' "':, '. .' ,q . :i,.'" ,'., :, . , .' ", .,. ,\.. . ,.,. . '. . '.,' '.. L _,:~.'.'.:' ,. ;.... ........ ". '.:; , .' ".,. . " '.. .-,' ". c.' , . I ,I f .' . . . ..... "-'. ',' ", "",' 1'+. ," ,. '-'.., ..... . ~ : . .1' . . .:.':, ;.~.' .~: .::. " ::,\.- . .'.., ,..' ". : ..:,.)',.., ." . :' . - ' . ' . . ". . . '. ,'.. . ..; .. .', '. _. 'c.. ' .. ..>\.~: '.':.~. "..I.,:,.,:,~".'. L ~.!. .....' .~....T1.'..;.. " . "..,.,'..,:,.:.'...;.:.:...:;.','.,','.;....:,~.:~.L...j'.<'.,:...'..'...:....._~>.".:;~.'>.~'.:.:,i......:.....,".........'..-1.. ~ .~, L ~.,.' ..' ',.. . ..... 1. ,'.' . ,'. "":./,.:".... ..... .' ..: ... .,. ., ,. ,.' ::',;,':..::: ":";:>':':::::-.' ':,'..:'> .,', :' ' -' ~ ,.. .' "'''''~,,:., c: ; ,., o,'.. ....., " ':..' , " . .,'.; .. , ,. ".": .\.:'~.~,:'\t",..:,::' <:,'. ..:..,: ,..,.,';'.>'~~::: .:(.' ,;.' ~.' .. .' ...::.... ;.:: ...... ..... .',.: : <.; .'. ..... t.-.....:<:.'::.'). "I':."':':'!":.';::.;':<~~" ,:,;' ;"!3 r'. .. ',..,' .:/~' >.P:: ..,;;"; '. . :,q.; ',:',:. "_"'<:;:,: 1.,.~.j.../.'.:d:':;". :.". >....;,.~>. .,:,:":'/: .':.. .,', c. ,,'... ... :. ';>.. ,.'. .' '~.,. ,".. , .'.;:: ::,:,,;., .:.:. '. ':. , . . \., . / + ',' '> . . ~. , ,\.. _ ~T'V"'W"l" '1 Paying Agent payment of the insured amounts due on such Series 1998 Bonds, less any amount held by the Paying Agent fOf the payment of such insured amounts and legally available therefor. MBIA is the principal operating subsidiary ofMBIA Inc., a New York Stock Exchange listed company. MBIA Inc. is not obligated to pay the debts of or claims against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and subject to regulation under the laws of all 50 states, the District of Columbia. the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the Territory of Guam. MBIA has two European branches. one in the Republic of France and the other in the Kingdom of Spain. New York has laws prescribing minimum capital requirements, limiting classes and concentrations ofinvestffients and requiring the approval of policy rates and forms. State laws also regulate the amount of both the aggregate and individual risks that may be insured, the payment of dividends by MBI~ changes in control and transactions among affiliates. Additionally, rvmIA is required to maintain contingency reserves on its liabilities in certain amounts and for certain periods oftime. On November 14, 1997, MBlA Inc. announced the signing ora definitive agreement to merge with CapMAC Holdings Inc. ("Cmn), the parent company of Capital Markets Assurance Corporation C'CapMAC"). in a stock-for-stock transaction valued at $607 million. The announcement also stated that all outstanding policies issued by CapMAC will be backed by the full financial resources of MBIA Inc., and that the agreement is subject to regulatory approvals and approval by CHI shareholders. . ,"'V4) ......."'.. As ofDecembef 31, 1996, MBlA had admitted assets of $4.4 biUion (audited), total liabilities of $3.0 billion (audited), and total capital and surplus of $1.4 billion (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of September 30, 1997, MBIA had admitted assets of $5.1 billion (unaudited), total liabilities of $3.4 billion (unaudited), and total capital and surplus of $1.7 billion (unaudited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. Furthermore, copies of:MBINs year end financial statements prepared in accordance with statutory accounting practices are available from MBlA. A copy ofthe Annual Report on Form 10-K of!\1B1A Inc. is available from MBIA or the Securities and Exchange Commission. The address of MBIA is 113 King Street. Armonk, New York 10504. The telephone number if: (914) 273-4545. Moody's Investors Service rates the claims-paying ability ofMBIA IIAaa." Standard & Poor's Ratings Services. a division of The McGraw-Hili Companies, Inc. rates the claims-paying ability ofMBIA "AAA." Fitch mc~ Inc. (formerly known as Fitch Investors Service, L.P.) rates the claims paying ability ofMBIA "AAA." ' ~ 29 qf/ -t)9 .' ~~ , , ." n i , .J <, " , , x, ., ". : .'.. ~ .. l.. '. ' , : .' .' .. ~:i' .r ."',"; I . :". :' ~~.c,;: .,' . . ~ . '; . ..' . ..~ '. ~.' :--T_ .....e ,,:>,:. c'I'".C ....: . ]~ ; :. / .' , ,I I ", 'J '. .,':'1 . , . .:~<.. ; " ..t' " ~: .:..., :' " . ..', ... t ~. . , . . ~.c -:.'~.;, :\. '." ..... , , " ' .. .; .." ,', ~l , '. .. :>. . . .;r., "' . . -l' " "jl.- .! -I.:J . ,.' ," , . :.'.~ :.',' , r ' C _. C . . L,', .... c. . .::.,: ,~., . -, I . : .- :" <.; "I ; .: ':' . ~ 'l- '.: .," " ~..J .~: '; " . . - '.. . . ....' '... , ~ ,. ~ . 'J ". . : :' : \.~. '.:" -' tT, ", :~. J.:.. .. I . . ." c, I . :. .. .. .', 'n '. '.": .". ":... '. I . , .' . '.,;'~~..:.',.....< C"'. .r... .. ~.""," r '~. ....::. .'..'~.. , , . ..''; .; ,g,;,:V{ .:,':~', t, .~';:H(".. J' .rl . ...' : ~ ~:, . . ':: , . . . " . '. '" . .' ... .,..'. , .:'. ~ '. I, " , ..;. ,J'. " .' ,)": ,': ,'. .- 1':1 \, ' . " ; 1 ~ " tJ.'r ~' '. . ~ /<,..., It : ~ ~..': :' .' ,( + \: , !' ,'<: : .1.';: '," '. .., ::. ~. . , ,~. .~. :;f" .. . >! ,0.: \~. ~.' " ',' ~~."' " .' t C," . ", , , o ~:. ~ ~, , ' C . ~. \. .,. 'c' . . . . J . : ~.": I '".. . ~ . ,.' . " . '.0' ;. ',. . '. . }:~.: ~.' ~ C ,,~' . f., " . ..' .' ~. . . <: ., .':' 1../ > !.; . ~ ~ '0."'.'. : ".~ .... ~ '",.' I'> - - ~ Each rating of MBIA should be evaluated independently. The ratings reflect the rcspective rating agcncy's current assessment of the creditworthiness of MBIA and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings am not recommendations to buy, sell or hold the Series 1998 Bondst and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of either or both ratings may have an adverse effect on the market price of the Series 1998 Bonds. :MalA does not guarantee the market price of the Series 1998 Bonds nor does it guarantee that the ratings on the Series 1998 Bonds will not be reversed or withdrawn. The insurance provided by this Policy is not covered by the Florida Insurance Guaranty Association created under Chapter 631 t Florida Statutes. Rights Granted Insurer ""'J .~ . :.:;' Generally. in connection with its insurance of an issue of municipal securities, the Insurer requires, among other thingst (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holderf, may not exercise such rights without the Insurer's consent, in each case so long as the Insurer has nc(failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to the Insurer's consent. The specific rights, if any, granted to the Insurer in connection with its insurance of the Bonds are set forth in lIAPPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE." , THE CITY AND PINELLAS COUNTY The City is a municipal corporation organized and existing under the laws of the State of Florida. The City is located in the middle of the west coast of Florida on the Gulf of Mexico and has a population of 103,326 as of 1996. Its City limits comprise approximately 26.4 squarc miles ofland and 8.5 square miles of waterways and lakes. The City is governed by a City Commission and operates under a Commission~Manager form of government. The City Commission appoints a full-time City Manager and a futl-timc City Attorney. A full-time Director of Finance has the responsibility for all financial operations of the City, and is appointed by the City Manager. Also, an internal audit director is appointed by the City Manager and scrves full time. The City is primarily a resort and residential community. The City has many recreational facilities including tennis, golf, boating, fishing, water sports, and recreational paths. During the u 30 q~-o9 . . ,~.:.. " r' :.~ ' "~' winter months, the hotels, motels, and restaurants fill with visiting tourists and winter residents. The City offers over 42 acres of public beach front. I , . ~.. The City of Clearwater and the other municipalities setved by the System arc located in Pinellas County, Florida. Pinetlas County is the second smallest county in the stat.e in land mass. but is the fourth most populated county in Florida and the most densely populated with nearly 870.722 residents. Major private employers in Pinellas County include an electric utility holding company, a television merchandiser, several hospitals. a newspaper publisher, and a retailer1s corporate headquarters. Tourism is the largest industry in Pinellas County. :i'. . Further information on the City is contained in "APPENDIX A INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA." GENERAL .:. i-. . < ~ . " .1 ,.,,0 .,....~ . .) . .), . .\ " +'. . , . 1. . .', ~ . !. . ~ , " " /. . , :",,0 31' ~\ \ ~ .' q<1.-01. : I ;~" U~~"'fj1~';~:':' '~t;~~'),:5/" fr r<'1J'~""",,'.. ~: t'-..,j... ~ .....,q....'~I:~'U.-.~~.,I/~~~. #.~'H ,i..oJ- ''-'.: ~'T ~ ~T'''''. ~'~': T"'I'" ~". ........ ': ~. ~. . ~. .. ".,p.~..: ~ I.. 'I.r I. It. I_i. " , '..e . " . ~. . . .. ." '\ . ,', . ~ ': ,: '""., '. ., ',,\".' ~. ~ : .,...,>.....' 'j.' ':. . . ~ /; . ,.... '> . . .' ,; ~.....': '. .: .:. ,\ ..~.<...:.''-. , , ., .',. . . . . '. . '.' ',' . ,'. :.~. -: ~ , f. ' . . , . '.. .1.' e: ....1. : '.. .'/', '~.' ~~'.., '~"",' .~,:"r' ,'.' . .; L~~ . ',',. . . . e ..~ '...' I . ~ ... . \.' . ~ .': . I ... " '. .' . :".'.'. .....,...:.,.'.. ,........._....e... ...'~..;'.'._.'., ~ ;:..'...,:....~-:~I:....~ ~~\. .,:" .I",!".. ,. ...j.,.. :". ,..~.,... ..J,.~..:.I..:..,.:......, .....,.',~.. ..,.....:~...:._.t.<..+ ,'.,..l ~., t", ~. . ... ,:.'. .....,. . ,'j .\t.. :. ~ .. . '. '. 4'1: . ~ . " ..;\'.:. "'.c .~..'.':~:t~.~...I.~.;~ ~e',":. .. n('~":~; , , ., \ .': f" C '. .. .. . ..... :':<: :,{:.'::~ ,':(,;\ i." .,~ '; '::/' S," ::'?)':!~;:'1' ,'; .:~,:: :/'F';,:,: :':f2;:r; : ~ ',:, i,:.', . ..' "'Jr, '.,. ,1' ,,".;.. ~.::~.~,':.' :':~"~"'~".:.::~''':''''.:':'''~~::~~:''''''I''''':.d':, : r. }:'." ~".'~'.l ..~ :~.>.;-:,'. .......,.:<:~.~ ~. ,.:. :.:~:"',:,""" '~,":'~~..:..;- .J.... .....;,....1.": .... ~"...... I <. ....+........:.,.....J.:... ,. 1 . :' ~ .' . ~ >. . . . . ....,. . . _. _ ~ I ,,:.." ~ . ... ..' r. ." e:, , : .' . ti't:,:;:- ).,...:!~':.!~. "~,,, I"':(~'.,:: ""e './ F " . ~ 'I ~ . , . COMBINED DEBT SERVICE REQUIREMENTS Set forth below are the amounts of principal and interest on the Parity Bonds and the Series 1998 Bonds and the combined debt service of each in the bond years indicated. Bond Year . ~~g:~f '.1 .1' c. 1998 1999 2000' 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 '2027 '() Parity Bonds Iotal Debt Service"" $1,590,058 1,685,74 I 1,685,439 1,683,759 1,686,199 1,682,519 1,681,899 1.684,836 1,685,710 1,684,410 ],686,672 1,686,511 1,684,046 1,684,396 1,682,316 1,681,722 1,143,637 1,148,662 1,147,038 1,144,000' 1,144,600 1,143,390 1,140,522 1,140,997 1,139,505 1,140,835 1,139,945 2,176,810 2,176,1'35 2,174,445 Totals $45,956,754 · Rounded to the nearest donar. '::J . i~t '., f:~~...:~-c;..."""'''''" '.' I , " '.".'.. . . .~ ",;.-" .' - i....' . ~ J'- , '~L ,~. " ~ . . , " , '. . . ' I . , ' . , !3 .., (. '. ...:' ,-:l j. ~ I;' ..'.... '.' 'r i' ..... .: . '" ; "~ . ". '.-". ",:',.' " . .". . " ,.' :,' '. ' . :;\:: ~ ',' ; . , ..:.y:,:;..,.:. . <'1, ,'. ' , :. fl,.' " " 't . ",' ;.:. ~ 1998 BOQQS Principal. Interest"" 32 " 'J ~ ". I' . ....'>t~I.:. . ~ t ~ I ..: .' .. ~,,~.~'t" '. . ~ :.~: ,:';:' ::", Combined Debt Service"" . qg -09 I." i,." . :... , ~. " > . I'~ .. . ... . ~ j ., ':':'.>t::'.:::. "":'" .,.-:;:.,<<",<>,::, .,,>>: ,;..... 'r." :....:~/.. ::: ", ,'.". '.:" ,.':, '::::::~/~;':'~'.~<:'~.,'. :'<:"'"':~;'.'.:,.;::,'~.'" .'..;....."......;< " . .....' ' $ , : .:: . ~ ~~I': ..... c.~..~.:......' /'..'.,. , ~ ,. > "I.' " . ',':.1 :: ," " .~. < '. . :' ~+;. :'... . ~ " " ...: . .-'.... ~ .:.~..' ..~.~.:':~.'..., .., ';: 'c :;~: ~ \~':~ :/..::,::cl.:':.' ,:. :(: ~ HISTORICAL COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE BY THE SYSTEM NET REVENUES Fiscal Year Ending l22!l l22.S. .l22Q Gross Revenues (1) $13,316,619 $13,672,905 $16,423.147 Cost of Operation and Maintenance (1) 10,220.164 10.555.346 13.199.962 Net Revenues 3,096,455 3,117,559 3,223,185 Maximum Annual Annual Debt Service(2) 2,176.810 2.176,810 2,176,810 Coverage of Projected Maximum Annual Debt Service by Net Revenues 1.42 1.43 1.48 (1) City of Clearwater, Annual Financial Reports (Audited). (2) Estimated, based upon assumed Debt Service for Series 1998 Bonds. RA TINGS '''J ' .. ' . . ~,..ii Moody's Investors Service, Inc. and Fitch have assigned the Series 1998 Bonds ratings of " II and It II, respectively, to the Series 1998 Bonds with the understanding that an insurance policy insuring the payment when due of the principal of and interest on the Series 1998 Bonds will be issued by the Insurer. Such ratings reflect the views of the rating agencies and an explanation of the significance of such ratings may be obtained only from the rating agencies furnishing the same. There is no assurance that such ratings may be continued for any given period of time or that they will not he revised downward or withdrawn entirely by such rating agencies, if in its judgment, circumstances so warrant. Any such downward revisions or withdrawal of such ratings may have an adverse effect on the market price of the Series 1998 Bonds. For any additional description of ratings and their meanings, Moody's Investors Service, Inc. and Fitch should be contacted. LEGALITY Certain legal matters in connection with the issuance of the Series 1998 Bonds are subject to the approval of Bryant, Miller and Olive, P.A., Tallahassee, Florida, Bond Counsel, whose Bond Counsel opinion wiIJ be available at the time of delivery of the Series 1998 Bonds. The proposed form of such opinion of Bond Counsel is attached to this Official Statement as APPENDIX E. Certain legal matters will be passed upon for the City by Pamela K. Akin, Esquire. City Attorney and by its disclosure counsel, Nabors, Giblin & Nickerson, P.A., Tampa, Florida. . , I..,J 33 q~ ~ OCI ~ 1~ , ,.I," ti;;'. (f f ,'" t "I J ,.. ..1 ~ ~. ... . ..... . '., .:.<:.!:::':,:'.~~ ',':"~ ':,: '. .", . '." .' , . t'< .. ~ . . . .' . <I > ~ TAX EXEMPTION The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 1998 Bonds in order that interest on the Series 1998 Bonds be and remain excluded from gross income for purposes offederal income taxation. Nonwcompliance may cause interest on the Series 1998 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 1998 Bonds, regardless ofthe 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 1998 Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Ordinance to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 1998 Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Series 1998 Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Series 1998 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals or corporations; however, interest on the Series 1998 Bonds may be subject to the alternative minimum tax when any Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will include interest on the Series 1998 Bonds. The Series 1998 Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of Series 1998 Bonds. Prospective purchasers. of Series 1998 Bonds should be aware that the ownership of Series 1998 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 1998 Bonds, (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by 15% of certain items, including interest on the Series 1998 Bonds, (Hi) the inclusion of interest on the Series 1998 Bonds in earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (iv) the inclusion of interest on Series 1998 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 ofinterest on the Series 1998 Bonds in "modified adjusted gross incomeu by recipients of certain Social Security and Railroad Retirement benefits for purposes of determining whether such benefits are included in gross income for federal income tax purposes. 34 q~-()q . '. . : .~. po. : . ,:1. .'., ,., '.".., :'., ~ . . ';" I" < : ~.~::\> ~ :':~"I..,,~:" .' ,. I ., ~ .... . . .... t . '.. .. . < . .' . .' .' '.h :.:::.:.. . 0.: .:~.>:':.. .\ . . ., .: ~ :.}':', :'l~" .. ,.' . ill 1'" . '. ...." -. c " 1, '~, ,::;>:.' '. '.', , : ,', :, ";~.'.")'..'. ,. /'.:" ;:.'.::: <<: ;".:':;: . ..... ...~..L\.::.<.::~f;...~,;:>,.<... . . ",'.,.....: :':",:.:,.,~':,/:.~.~.;':'~:.'.<..~>::.:,.;,.. . ..::::::>~.' ~. ,"..:. ,. . :.:. ' . I.'., . '."';'.;" . . .>.'::>'.,~~:~:':'/::' :. :\'-<;""<<~"" ,.'...~.:~ul.:'./,',.'::.",:, ,'r; ,';.' '. ::'..:~'. >.'~71' ;Y',,::: ".':': ~~~1"::" '~;;. ,~,.;,/.i~~'/>I". ::;;,:f&-;:.>~:.:';i';':,;.' ::: ::\ ,:'~:Y . .~Il"JI'j. ,," ~ ,.", ~",. .~'.: Lot! ...~...~~" '.' :"r.' ".,. '" _:"'~J_..~... ">."",';,. .',.t~:'~':. .:..:,;,~:'.\.."...:' -'.,.\' ;~~..,.."..,...,.;:.~. :.'..:.......,..;,. .",;'.' I'~ ..~ ,_ i'~ '-." q' " _': ..'" , ' .. ',: i:!:.:.',':,:"~:"::'" : .:.......~....;. .:;,:...:',' ;H~:;;'>;'''"~:,,,,''' "'.. "," .....:.,...::..~.;..~..I..;..-.> c'~'" , . ~'... ,:, <~ . . ~ I ~ . , . .'~ . . -', .....,. I ..' ,"'J ...: ~':,.~ ~. ........:.. 'I .,.... -.; ....1 :.. ~!: ~: I -:.:~ . I. ...., ' t.: ~'.. " . , " ;. ~ -'<,t,) , " ,;) . , ',;. :: '. c." ."\ ;. . ~ :: .:,: .~ ~ .:,..............-:..,. ",,;': ., '.'..'. ~ ,/ " ". . -- ~ " PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 1998 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERT ArN INDIVIDUAL AND CORPORATE BONDHOLDERS. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. During recent years legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 1998 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 alfected the market value of obligations similar to the Series ) 998 Bonds. Prom time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of Series 1998 Bonds and their market value. No assurance can be given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 1998 Bonds. VERIFICATION OF MATHEMATICAL COMPUTATIONS At the time of the delivery of the Series 1998, Bonds, McGladrey & Pullen, Minneapolis, Minnesota, a firm of independent certified public accountants, will deliver a report on the mathematical accuracy of the computations contained in schedules provided to them and prepared by the Underwriters on behalf of the City relating to (1) the sufficiency of the anticipated cash and maturing principal amounts and interest on the federal Securities to pay, when due, the principal, whether at maturity or upon prior redemption, interest and call premium requirements of the Refunded Bonds and (2) the "yield" on the Series 1998 Bonds and on the Federal Securities considered by Bond Counsel in connection with their opinion that the Series 1998 Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended. UNDERWRITING The Series 1998 Bonds are being purchased by the Underwriter from the City at an aggregate purchase price of$ (par less underwriter's discount of $ ), plus accrued interest on the Series 1998 Bonds. The Underwriter is obligated to purchase all the Series \998 Bonds if any are purchaserl. Following the initial public offering, the public offering prices may be changed from time to time by the Underwriter. The Series 1998 Bonds may be offered and sold to certain dealers (including underwriters and other dealers depositing such Bonds into investment trusts) and others at prices lower than the public offering prices set forth on the cover page of this Official Statement. 35 qg -09 ~: . ..~ :.':, :;.'.:,:..';: " ,.1., ,: , ~, . ~.. f ~ .. . . ~ c . ~.. .' . . , '. . .' ~ , ' ~ .... . >,' ; ..,:. . .'. I ... . .. . ..; , . 1, . < ~~< ,:. ' I ", .~. . '., . L . ~."~'::."'., ". " ,. .....<. TH, .... ,.,/ > :..':,'-; . ,_,<.,~'t;..,~.,..,." ". '"1-' '," . ", \ "-" ,. .". . l . 1 "',",-. .,",/"; " .,'.. ':;.: ';., ....~ < ~," ., .":' " :.,'.' ,.. ',- ,':', : .' "" ~:"",:-: <,.~.. ., " .' ... .,'" . .,',. '; 'I,,' . .. J' , ' ' ' ,.. ^. . ' .' .'" " ".(''': , .".:':'.:'.,.':~,:"~,,,:. :~";....: '., .. ,. " :'; :".,' :".'. ", .',; -: .:,'::' ~:...;,::(;:;W..(:",: V";,;\,~","f::,"'.."l0r?;::Y.r ..~.::"..::'i~ :/i,;-:ttt ::':;'.,...~':';:>:'/{::' '.:;',,;, : ; ,., ;';. ,: ,. ".:' :', '.~ :-,;' :, .f' ; ">".,:,' """,/, ::~': ;:;::;:, ,:::~..:. ': ;~,;::;:~::': ,:, '. " ~,,::,~.:-:<';>~:: ;:7.,;.: ~ ;'~, : '. '.:.,~" . .::,:'!;.;.: ': ~~.:,: '..:' '1';' ,l , , . .. ''': I". ."..,' , . . ~~ ~ . : ,..... ~:'C.E':...~.. :. ." .' :.~< :,". " '.' . ." .. -.. -"'.' _'f.. . , . .. ~ . ~;' t ~ . :. . \ '1'. '~...' ...... . " i- I:'~ " , . I' . " ' t~. '. . ~;., .' I~,i ' " " . "" ~:) ~ I..' f.' ..r",.. "., \ .~:. ....:.4' JI .' _no ~ INVESTMENT POLICY OF THE CITY PUfsuant to the requirements of Section 218.45, Florida Statutes. the City adopted a written investment policy which applies to all funds held by or for the benefit of the City Commission (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 objec~~ves of the investment policy, listed in order in order of importance. are,: 1. Safety of principal 2. Provision of sufficient liquidity 3. Optimization ofretum within the constraints of safety and liquidity The investment policy limits the securities eligible fOf inclusion in the City's portfolio. The City will attempt to maintain a weighted average maturity of its investments at or below three' years; however, the average maturity of investments may not exceed four years. To enhance safety, the investment policy requires the diversification of the portfolio to reduce the risk of loss resulting from over-concentration of assets in a specific class of security. The investment policy also requires the preparation of periodic reports for the City Commission of aU 'outstanding securities by class or type, book value) income earned and market value as of the report date. Notwithstanding the foregoing) moneys held in the funds and accounts established under the Ordinance may be invested only in Permitted Investments, as described in the Ordina,nce. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 1998 Bonds under the Ordinance (and the policy of municipal bond insurance referred to herein) are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified by the Federal Bankruptcy Code. the Ordinance and any policy of municipal bond insurance referred to hefein may not be feadily available or may be limited. The various legal opinions to be delivefed concurrently with the delivery of the Series 1998 Bonds (including Bond Counsers approving opinion) will be qualified, as to the enforceability of the various legal instruments. by limitations imposed by bankruptcy, reorganization, insolvency, or other similar laws affecting the rights of creditors or by such principles of equity as the court having jurisdiction may impose with respect to certain remedies which require or may require enforcement by a court of equity. 36 q~ -()Cj ': ,,'" " J";,:>,:: : . ,;. ',' . , , ~. ~; . '" . ~ '. . .' . ; ~ .: . ".' ..... ~ f . '.... ::. ,..' ".: . .' '., ";,' , .... .' ..:. .~" ",,\ , ' ., . '. . . . t., . ':.. .:\..' l. -'. ":'::,.. '," '\..t' ,: .,"':' .'t .. ,'. :. . : . .~ ,":' . ,. .... - I.~I.. . . . .' t . . t, _. " ~ '. . ~ : .' ,:}::.' ...'. < L " ",;. .' :,' ,'<'fJ':'/;>',:',::;::f H:~;:';"I':,,~'(' "'" ; ;'<. '<:,:,'::~:: .:. ;.::..' .~'~ ,<'::' .,' ,,~;.'.'; ,', ""," , " ,.. ." I . i . ': . '1: J' I,:'. " , < ~...' . ..~ <, . ,.. ," , , 'I'" 'I' ,.... . , : .; ..... I,"" . -., - ~ . .."l ,I . .' '..': 1 . ~.. "..; ,';'~',.'i.>.'..','~'!~,I;/'~~',... !~ I ::7",': ,;/:,;':,jr),'.::;,: ':; I'", H ':~...~>i':.~.'~."', ., '0..' . ...... 'to'. '1' .; - .~ ;-...., " ~~:, ,~ ,~; .~ '.~ ... .' T :~ ~ 1... '. .~. i:~ : "I. . " ~'.:. '. . ::..' . ,., ':I' ,,'. " ...., ~'~ ',:' .. - LITIGA TION There is no litigation or controversy of any nature now pending or threatened (i) to restrain or enjoin the issuance~ sale, eKecution or delivery of the Series 1998 Bonds or (ii) in any way questioning or affecting the validity of the Series 1998 Bonds, the Ordinance, any proceedings of the City taken with respect to the authorization, sale or issuance of the Series 1998 Bonds or the pledge or application of any moneys provided for the payment of the Series 1998 Bonds, including the Net Revenues of the System. The City is a party from time to time in various law suits involving the City generally, and believes that none of the actions currently pending will have a material effect upon the finances of the City or of the System. GENERAL PURPOSE FINANCIAL STATEMENTS The excerpts from the General Purpose Financial Statements and other information of the City for the fiscal year ended September 30, 1996, are included in APPENDIX B to this Official Statement. Also included in such Appendix are the unaudited financial statements of the System for the fiscal year ended September 30, 1997. Such excerpts from the City's Comprehensive Annual Financial Report, including the auditor's report thereon, have been included in this Official Statement . as public documents and consent from the auditors was not requested. The auditors have not performed any services relating to, and are therefore not associated with, the issuance of the Series 1998 Bonds. In addition, APPENDIX B contains unaudited financial statements of the System for the fiscal year ended September 30, 1997. While the audit of the financial statements of the City, which include those of the System, has not been completed on the date hereof, certain officials of the City has represented that: (i) such unaudited financial statements have been prepared in accordance with generally accepted governmental accounting principles consistently applied; (ii) nothing has come to the attention of such officials as of the date hereof which would lead such officials to believe that any material change to such unaudited financial statements has been, or will be, proposed by the auditors; and (iii) such officials are not aware of any material adverse changes in the financial status or results of operations of the System from that set forth in such unaudited financial statements. FINANCIAL ADVISOR The City has retained First Union Capital Markets Corp., S1. Petersburg, Florida, as financial advisor (the I1Financial Advisor") to the City in connection with the preparation of the City's plan of financing and with respect to the authorization and issuance of the Series 1998 Bonds. Although the Financial Advisor assisted in the preparation of this Official Statement, the Financial Advisor has not 37 q'3-oq L .' I ":t""'. c: .'. '. I ~ '.' :.";\..',;;...... ..o~",......,';"',,.,.".. '.' .",. " . ." " I' ';' ,,,' ,; ';";,' ,'",Ci?;::\,', ':: :,.':,., , .." ' ,,' ,;",,:' ,'" \' .' ;'<",: :~:,. '. ::_.~. +, .:::.. .','.' . ; . I "j 'c . -_'. . :"_:':' ....: ...' . ." ",'.' .' ...,' ;!' '. ' ' .' . '., . ' ,0. '. \. :,.'.': ::.::... .... .., ,,' .,., .......:i.A....".:.........:..;:"")_.....:,'.,,:'.';~'..:...;..>..~.,:..:.:,~,;'....':.~..I:,':..., :':;'" 0.' ,..::,' . ,'~ . .,' /" . ,',,' ,'." ,', :: ';';\',::; "'D"": ,i,d,': :,:0;(' , ~." ,. ,,>',,::::';;. gr:.."::~,,~,:.,.;,, ,,}~,;, ::";J~;;,.\';;>:'" '::', ;' .: ;': " J., . ..\;.'. :,.,:,,,..:,'.:. ':~t-" .~::. ""; ",'. ":.< I',: .... . ~ :<. .j.... ,""::', ,J, '.' - ~ ,~ undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. ADVISORS AND CONSULTANTS The City has retained advisors and consultants in connection with the issuance of the Series 1998 Bonds. These advisors and consultants are compensated from a portion of the proceeds of the Series 1998 Bonds, identified as IICosts of Issuance II under the heading t1ESTIMATED SOURCES AND USES OF FUNDS" herein; and other compensation, is, in some instances, contingent upon the issuance of the Bonds and the receipt of the proceeds thereof. Financial Advisor. The City has retained First Union Capital Markets Corp's S1. Petersburg, Florida, as financial advisor (the IIFinancial Advisorll) in connection with the preparation of the City's plan of financing and with respect to the authorization and issuance of the Series 1998 Bonds. The fees of the financial AdvisorwiU be paid from proceeds of the Series 1998 Bonds and such payment is contingent upon the issuance of the Series 1998 Bonds. Bond Counsel. Bryant, Miller and Olive, P .A., Tallahassee, Florida represents the City as Bond Counsel. The fees of Bond Counsel will he paid from proceeds of the Bonds. and such payment is contingent upon the issuance of the Bonds. ~,.,,;;} Disclosure Counsel. Nabors. Giblin & Nickerson, P.A., Tampa, Florida represents the City "',' as Disclosure Counsel. The fees of Disclosure Counsel will be paid from proceeds of the Bonds, and such payment is contingent upon the issuance of the Bonds. CONTINUING DISCLOSURE The City has covenanted for the benefit of the holders and beneficial owners of the Series 1998 Bonds to provide certain financial information and operating data relating to the City by not later than June 1 in each year commencing June 1, 1998 (the II Annual Report"), and to provide notices of the occurrence of certain enumerated events, if deemed by the City to he material. The Annual Report will be filed by the City with each Nationally Recognized Municipal Securities Information Repository ("NRMSIR"), and with the State of Florida Repository, if and when created. The notices of material events will be filed by the City with the NRMSIR and with the State of Florida Repository, if and when created. The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption "APPENDIX D M FORM OF CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in ordefto assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(S). The City has never failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events. ....) 38 QS-u9 ') .,~.. :, '. ~ ~ .... I ..... t " :" ,/. '..: \:',:, '., ' ... . . ", . \<...I'<......,~.. .... ,t'" l'.': \'>"<'P' " ..<~~":! .1 ~ + " lI' . : ~ j. ~ ~ " .. " '.', :>:~>::~:.:/:< '..';':' . .,?.,', '.>~':'!i';,:;}';~~':'.'"}'::;.Cf;; i:X\.:~: ; .... ~ :;',\.j'" 'l ;::. !.i~:Ti.:":; ..: :.::: ' · '..: ?'::. .::: ,;:.,;,,;}:,;..}:: . . ",.. C I:.' ~ ,.." 1 <,"f..;,. ~ ',: ." .,.~ :. :.:. .:' ~"... " , .. J', .., ~~~.- .... . f. 1 h. ~:~: ".'.,... . ...... . ~ :~<~. ~ ~ ~ MISCELLANEOUS All information included herein has been provided by the City, except where attributed to other sources. The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. Copies of all such documents referred to herein are on file with the City Clerk ofthe City at 112 South Osceola Avenue, Clearwater, Florida 34616. The information herein has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct. As far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations offact and no representation is made that any of the estimates will be realized. AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT , :~) The delivery of this Official Statement has been authorized by the City Commission. Concurrently with the delivery of the Series 1998 Bonds, the undersigned will furnish their certificate to the effect that, to the best of their knowledge, this Official Statement did not as of its date, and . does not as of the date of delivery of the Series 1998 Bonds, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purpose for which this Official Statement is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. CIlY OF CLEARWATER, FLORIDA By;. Vice Mayor~Commissioner By: City Manager .,.'} I.d 39 q7f -09 .. . (:,' ~1: ~ :' '. ~... . e , .' l. , .~~ ,. ~~::, !Cf,..... . APPENDIX A '" .~~ ,/.. 1"0' .. 'r ' '.'", . " (c': " " ~. ~ GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA " ' " , '. " . :;.: " .1, . " ,. .' . ,~ . . , . 'I' , 'f'. ::) J;2~ ".' ~ . Cf6 -09 I" .. '.~."""',,'i.~ ';'.Yi.i.~ j ,.t. ,,,; ; n'\"f"~r..."" t....-<r.d.... ..~.-.:..<.. oi-~ or; '?':"" PI ..~ ..,...... ..,.,' .~c.. ....>..' ~'.> n ...- .'<' ,. , . , . , , " . .j. ., ..... ... .,. " ' ~..I~'... . I .~. " ,>:f:., 't-',:'." . " I ' '0" ~. ~ ' ", ' . , .; . I' ~ I '.. _,' . ~ . . ......~~ 4 ~ . . I 'c ,.. :' \. I " :<. 'I.,;" ::~,1..:(o., ..i~.: ~.}'..'~.~ j -1 :~'<.T~;>:~:" t " '. ~.= .. ' '. - ~ ~. ~ :E,.~.t":'::l;" ., , : ~ '. ....0 , " r " " , . , ;' I "'. ~.~ .',", , . ~ . CfTV Of Cl~~Wt\mt flOf!tO~ COMBINED ITATEMENT Of CAIH FLOWS. AU. PROPRIETARY FUND TYPES AND S'MILAR TRUIT FUNDI YEAR ENDED SEPTEMBER 30. 1998 WITH COMPARATIVE TOTAL FlOURES FOR 1996 .' P.g. , .of 2 ,~ FIducl.ry Fund Type Non- Expend.blt Trwt 324,292 117.2831 Tot.Ie lM.mot'lndum OnM 1998 '195 eD,803,034 ea, 7 40, , "2 23,408,870 21,788.115 261,571 283.780 480.111 283,119 39,317 40,037 41.291,880) {7.47,8991 (40,273,271 ) (38,288,517) (20,188.072) (20.269,5821 41 3.033.157) n' ,e35,7111 418,201 381,597 19,029,1104 20,526,887 1.236,438 7",702, (4.178.827t (4.178,292) , 124,514) (255.443) (822,4351 300.782 251,918 (100.721) (88,452) 7,382.391 2,038,723 18,328.479) n 1 .009,458) (3,710,930) (13,353,737) (8,459.474) (8.065,217) (4,470.444) (5,255.8901 (20,2fi8,3:ze) C1 5.005.4481 258.860 1,067.818 9,155.970 128.655 (54,880) 41.110 3,258,946 7.864,278 149,388 106,87 3 75.716 158,249 184,945 780,995 (20.169,100) {18,390,3771 3.81,7 3,178, ",225,8' .2 4,/572,910 2.228,008 (7,18/5) 6,457 ,&67 4,868,902 1.607.441 (6.538.3251 53.275,715 59,814,040 54.883,156 53,275.715 20,805 23.21& 29.458,098 27,581,354 30,417 .809 27,65&.478 (5,013,356) n ,985.3331 54.883.156 53,275.715 -- (ContInued) B~19 q~ -0 CJ '.', " .f 251.61 , 4aa,Ill 39,397 (1.291.080) (88,200) (812,001) 307 ,009 <) 1304.992) <<7,043 '42,051 -: 10.155 6,145,252 (5,013,356) 142,051 O...~" , , ., o , . . TT ".. 'I~ , I'i.. .\ ,', J. J .,', - ~.,.~. .... - . < '"1'"1 - 9TV Of ClEARWATER. FlORIQA COMlINm ITATEMEHT Of: CASH FLOWl . AU PROPRIETA"V FUND TYPO AND ItMrlAft TRun FUND' YEA" ENDED 'EJITEM8E'R 30. '9~ yvrrH COMPAIY'TM! TOTAL F1QURES FOR Hlftl j~ ProprJ.tlry Fund TYIl" !ntl rp ri.. rntlmll ServlCII Reconelllldon of Op.r.tino 11'1Comt to Nn Cuh Pro'9'idtd (Uledl by Op.r.tlng ActMd..: - ep.r.t1ng Incom. (La..) t 7,343,302 1992,200. ~..~) "I!'"'" Adju,tmtnt. to Reconell. Op"etlng Incom. ILoII) to Net C..h Pto'o'kftd by Op.t.ting Act/viti..: Other Rewnue from Nonoper.t1ng Sletlon of Income Statlment O.ptlcl.tion P,o..nllon for Uncolltctibl. Accounts C8Pltlllz~ Labor tlnd lntllrllt ConltNet!on In Progr... R.cl...lfitd .. Exp.n.. Change I., A...t. .nd UtbUitln: _ D.or.... IInerll") In Accountt Rlollv.blt 0.0,.... (lner....) In LOll E,crow (fner....' In Mortglg. Lo.n. Rocelvabl. (lno,....) In Emergency Houllng LOin. Rlcelvable o.c"... (Incr....~ in Due 'torn Oth.,. C.er.... In Amount Dul from Other Govemmem.a Entltl.. (lncr....) In Inwntory D.c"... liner....) In Prepaid &pIn... (lnct....) In Ptop.rty H,ld for R..lllt lner.... (Diet....) In Account. IInd Contrlete P,yabl. lne,.... tOeer....) In Rehalbillt.tlon Advlnc.. P.yablt lno,.... In O.potlt. CDlcrlaol) In D.ratted Rovllnu. lnoreell In Accruod PlyToU 470,450 8.802,03 , 100,940 (385,303) {69,2001 81,674 2,899,119 {584.913~ 38,824 19,5e& 44,247 (321.024) 8,042 {8.797. 382,337 86,570 3.308,850 281,368 (39,6581 175,162 48,156 Nit Cllh Ptovided (U,edl bY' Opllr.ting Actlvlti.. $- 6,562,720 13.900,082 8,727 ~929 5.735.723 Totti Adjultmentl Nono..h '"vettlno. Ceoltel . and Fln.nclna Actl\litlll': During flle.a y..t liSe, the Pier &0 !ntarpri.. Fund WI' cloud and the opertt!on. moved to the GlIneral Fund. Tr.n.r.,.. to ZM G.n.,.a Fund Includtd p.ny cath, '600: .qulty In pooled cath, 1"52,971.84); Inv,ntory, '7,312.70; and mllcoll.n.ou. p'Vabl~I, ct" ,827.17). The.. Uln.r"l r..ulted In a net t..ldual lqulty tren,f" of t 157,080.31 ftom the Gantt" Fund to the Pllr eo Entlrpria. Fund. Addltlonelly a tot" of U,21 1,792.23 In fixed ....t. Wit. u.n.r.uld to tho Genettl Axad AI..t. Account GtOUP from tha Pillr &0 Ent.rprl.. Fund. J v S." accompanying notlO to Ananel" Statlmentl. 8-20 q~-oq ., :.':' /, "' 1 " :.~:c.~~~ ~ . , ~,~:. "'~<. " ":: ;_;'; >:~:,,>,_';:;,: ,J_:': ." '::', , . ',' ,. ,;';,', . t t ";.' ~..~,.1 " < ~. .' ,,- :..;<.'\~:~-:~~: " . c. .:~, . .' '. '. - . 1:1 . 'I' j,". I I /- " ,".;' ,- ',1' - " .,:....;. '.~..:L . ~ . ",. " " ",: ,', ;I"t1~', :,':,: ':, '~;"~/':~.':'i::I':tL> 'Lt5' , , . 'j; ".": ~ ~ 4', ~." .:,'" ::/:. '.,' " _ "/r~~'.~~.. J~'. ....::'.::~. ~. , : ". ' . .' .... ~ ~ " .. ---tot ~. ~ ~ (, 0- '. ..: . I,. :. '. :.:" I', ~. , , . I . . ~. .' ". , .. .. ."//. , . ;. ;" ~ . . ~ , " ~ .'. . " ".' ,. ..:" ., <.f. . ~ ~ : ,- f ~ ~ , .... ,,': 'f. ,,' ,- \ . .... '.' ..;. , ,- "C '-, , J ...._.. -, > ~. ,.'.' f, ,;" , . or' ':.... <<',~. " ' " J. , . .' '. -, . ,. r..., . - .... , ';i .'. ., ",1 , . - . .: ..- .....- . . ~ ' <.' \ , . . ' ,.,^",,;, V , . , . 8-21 qg ~01 r _. Y......".'.:T\.yt."'. >~~,,''h'tlc''~''~' . -. . T. .'., .." ~ '" Note 1. Note 2. ld Note 3. Note 4. o - CITY OF CLEARWATER, FLORIDA INDEX TO NOTeS TO FINANCIAL STATEMENTS SI;PTEMBER 30. 1996 Summary of SIgnificant Accounfing poncle.....u.....~..~",.."j1............,......ej..II..........iI.lI.....,................. 22 A. ReportJr1g Enlly. .... tl"'" ... ...n.... ............ ....... .,.... ...... .11.... ...11. ........ It.. '""'''' t4 ......, ,.......... ...., .......... ... '''.1 III It.. U II' .... 22 S. Fu nd Accountlr1g .. ... IIt..I.. ... .,. I... ......... ..... ,..... ". u.... '" '" ......... II ....... " ........ .... .... ...... u'..... ". ,.1. ....... ....... 22 Gowmme ntat Funds ..... .......... "".,,,.", ... .....,.., ...".. I" ,......... ..... ........ ..... II ....... .............. I" .,..... ........ ...... 22 ProprietafY' Funds,.. II.. ,.. ...,..,... ....... .......... u.... .......... ~........ u '..........,....,... .........,. ,..., u..". ......,. ........... ................. 24 Fict ucia.ry- Funds, ............"..... u.. ............ ............ ................... .,....., iii ...... ~.......... ,..,.,.. '..'.....11..,. ... ....... .... ..... ...... ..... ... 24 .Accou nt Groups ....., ... ........1-....... ............. .....1-......... .......14.' ..,... ,.., ...... ... ..Ii~. ..'.It.....,,.,,, ,.., .... ..".'" ................ 25 C.,. Pooled Cash and Inwstments ...................~".......It........u.........u.......,..................,.....................,.........".. 25 O. Inwntories ,... ..... ...., .t.,......... ............ ........,,, ..... .... ......... .... ........ .... ... ... ............ ....,........... ..........." ........."..., 28 E.. General Fund AdmlrtlstraUw Charges...,.....................................,.................................,..,........,14...,..28 F. Acaued Vacation and Sk:k. Leaw .,.........it.........,....'..h~..........,.................."................,,,.....................28 G" Budg"ets and Budgetary A.cCo.unlll1g.........II.,.....,.....,..,................"............,..."...:...........11I...01.......'..-....01..... 29 H. Rls.k f.4anage me nt ................".... ....".. .... ..'11'. ... t........ "'" ... ,. ..,,, II ...."..... ...... ,. ....... .... ........... ................ 30 L sta.tements of Cash FI()\fJS. .....,..........,....,....,............."................................,."..........................,.........31 J. C8pftal1z.8~n of Inte rest .. .......... .... .......... ...." ,.,.. ,......,........ ,., II ....... ..... ......, ... ,..... ... ....................... ,. ........ 31 K. Application ot FASB Pronouncements to Proprielary Funds .................................................. 32 L Comparatlw Data ..................... ... .......... ........... ~.... .........,......................., ,..,....... ... ...".................. II ,............,. ,., 32 M. Combill eel 'Filanc1a.llnfo m1atlcJn ... ......, ...... ...... ,......~...... ............................... .............. ......... ,........... ..., ...,., 32 Long-Tlnn Debt A. Summst} of Transactions i1 Long.. Teml Debt......."...".,.,.~..........,.......".,.............,.......u.................. 32 B. Summary of Debt Sel'\4ce Requi"ements ....u..u.........-III........'t........."..............u......~........,.....................33 C.. Oblit1aUons Under Lease Purchase Agreements..............................u............................................,.,..33 D.. Long-Tenn DeIJt. Genem1 Gowmment ........................................,.............................,."..........,....33 E. Long. Tenn Debt. PrtJprie-tary Funds .....................".....................................................,.."".................36 F. ~wnce. Refundil1g of Bonds.................,.........,......,.........................,..............,...,............"..,..........,..,...,.....42 G.. Long. TellTJ Debt, Debt SeJ'\lfce Funds.oI, ,.... '.01..01.......,,,.......................'..4........,... ... ,..... ........ ... ............. .... 43 Restricted Assets, Proprietary Fundi A Water and S-ewer UtUay Fund ...............,.,..,.......,.,."..................,....................,..,............."...............................43 B" Gas Utilly Fund .........,....... ......, ..... .....",.. ,.......... ,., ... ....... ..,.,... ... .... ......,." ...... ... ........ ... ....... .... ... ,..... .......... 44 C. Solicl Wa.ste Wily Furld............." ... .......... ...... ............t .......... ....... ..................... ,......... .........., ...,...............,... 45 0.. Stonnwater Utility Fu Ild ... ........ ......... .... ...."...,.... ........., .,.......... ...,.... ,..,.. ............ .........t ........., ,.., ............,.... 45 E.. Yacht Basil 8 nd Ma.rirla. ........................ ,... ,............ ,.......,.............,.".. ...... ........" ........ .... .........."............ ...... 46 F.. Pa rkilg S)'stem .... ,.................... ,... ..... ...., ,...... ...,..,...... ....,..,." ......., ........., ....,.,... ....... ...,..... ..... ... II......... ....., ....46 G. Harbol"Jie\rtt Center Fund ......... ,........... .., ............ ....., .......... .... .... ............. ....., ,... ........, ....................,..~....., 46 H. Garage Fu-nd ....,. ,......,...................... ,................ ,_..........,. .... ..... ......, .., .,., ,.., ................, ........ .....,......... '..II...... ........... 4B I. Current LlabBlIes Payable from Rest.rid..ed As.s.els"........",.......................u""...............,..............-6 Retirement Commitments A. B. C. D. E. Defiled Benefit pe nslc n Pia ns ............. .., ,.......... ........." .,. ........ ......, ,.... .............. ,......." ......... ,.. ......" .... ,... 47 1_ d . 52 PoJJc,e Supplemental Pensl'\Jn Fun ,......,."..,."............t,.....,.....................,...,.....,.......................t......, Firements Supple mental pe nsian Fund......... ,.... ,... ~,......... II .............. ........ .................,.. ....... ....... ....... S3 Deferred Compensat}c)n Fund.................,....,..."..........t.....,......",...............",."....... .,..,...,......,.01,...............54 po.st Retire ment BenefItS....,... ......., ,.... ..... ....,"~... ..... till, ,.,.. .............. "'" ,........ ,... ...." .... .......... ... ,......... ...,.... ,. 54 B-22 qg ~o9 CITY OF CLEARWATER, FLORIDA ,.., INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 l Note Ii. Fixed Assets .... t'41I1I1.... ". ...1.... ....,.."... 'I' .,.....,.... ... ,.......... ,.... ~'"'''I.''' ......, ." 111..,.,..... ""'_'1'.'"'' '.....1..... II "1 ...... .....54 Note 6. Property' Taxes oil iloilo. ...... ............. ,., .......... II... .,. .......... "" ,.. III.... II' ..... ........ .......11I ,oil II" U.. 'I' ...... II .... II ........ ........., 55 Note 7. Segment Inronnatlon for EnterprIse Funds.......lt..............................................u.....................uu.,56 Note I. Interfu nd Balances.. ...." ..".. 'I.. ... ....t... .... 11111., ... ....._ .... ..... ..... ill ......,. ....... .... III "11.. ... ,., .... II ... ....... ...... .,.... it sa. Note 9.. ContIngencIes and Commitments ..1......I........'....~...u...'u.n...ulil-UUUUI..."..............,,....,,..~............. 57 Noto 10. Individual Fund Notes A. CaprCa' Improvement Fund .........................1.......................................,...................,..,...,...............59 B. Water and Sewer Utility Fund ,.................,..................jI,....,.......................~...................................,.59 C. HarboNiew Enterprise Fund ................."...........,....... ",........ ............., .......... ..... .....11......" .........,.., ..,........ ...... .....59 D. Internal SeN'lce Funds .............. ......... ................. ............ ...... ........ ..,......... ...... ......... .... ..,... ...... ,.. ........59 Note 11. Excesses of Expenditures Over Appropriations ............................................................... 60 Note 12. Fund Oefi tIts ................... .....,.. ...,........ ....... ....., ... ,..... ....... ............ ........,. ..........,..... .....,.. ... ............."... ...... 60 Note 13. Residual Equity Transfers Bet:YIeen Funds .....................jI......".....~....,.............."n..........'.......H..60 """13. '~~;} Note 14. Contributed Capital. Proprietary Funds ...........................................................................60 Nole 15. PendIng LItIgatIon ........... ......... ............. t ......... iF.... .,.... ...... ........,..,.......#,..................~,,#.................. ,.jI............. ........,,,............ 60 ".", '-"' 8-23 C{3-oCf . t.... ~ ' " n : ~: " . " .:~.. . I. ,:; .. .' f" I . " '.',~,' ,'e '\ 'I , T~'I .' r"to " ~, . '. . . ''''.':'',.; 'ill .~ " ... .:. r .j.. .,.' .._.:..-::...,,~T'.-:.....~~.. ...... I" " . ' \, . .. . I. .. . .:.-' '., .',. .. , '. :~.. ~::.. . : .1.: . . {'.". ',;'; \'., ," ", ..' ". ' ;; ~ .:c " . J"' .,~,'.: "'-,~~:' ".. ".'. p. p..; .. ... ~.. .~~~,'/~-:' ~. I 'I..- . . '. I . .:.: : "~: . ~..:, ; , r . I. ;. I . ~ .. c. . -'"' . !'". ... . . . . . ~ ;_ . . ,p.; '",.., ...::. .. . .., '.;: ; Ft' , ':~::: .{.:,,' .... ;;::!\ :~'.:..',~.;,:;..;'l. i...<~.~.:.;.::,:..: \;:,' ...:: . .' ~ ~ . ~'" .. ".J. '_" I"! 1"........ . "'\ " ,.. .! .'... < .a., I . .'}' .. . I . . . , Q' ...... .'.. .:,. ~:,:",.C". .:C~': ;",: ~I : '. .:;.\'.;.:j.::,>:~::: - ',;:.:" .i"',,>, :"~:': '.":,.,.:: ~:;:; ':,x., . ",~: "::';;~~.:~ ,,:' ""'. d '..', ~ .., .. "" ~ , . : ~. >.' ".. .., . ~. .;.., . . .', . ". ,;. !.' '. . :T. :,1 __. ,. . ". '. . . ",-} : '." :.. I ~..:' _' ~ .: :.t . /, c: . ' I I ~ .. ,.... . ":. M:.',": < r.:.... I .It , , '.! ...... ,,'. -. <:'.:. . , I , . .. . . " .. 'I. '" ... ~.; I :. f . . ,. ., ~ ~ . , ";':'(;'~"~:.: ,~.~,~::',".: '.";'.:.,.~ ;;:', ~ .t '. ',i . ;' P, ". -.'. . { . .: I', .' "., ." :\:.: . ' .' . .. .. .... . .... . '. ....... " ~.,.,\::;\ '. ..:!l?:.:/,,~:...(;:>..t?:\,: '};".l:':':;~:'::~:.:.::;"::1::\~~;j/.;i},': ':::~:.'.::.., .',; .-., CITY OF CLEARWATER. FLORIDA NOTES TO FINAtiCIAl STATEMENTS SEPTEMBER 3Q. 1996 ''''''') Note (1) Summary or Slgnlficant Accounting Policies The 8ccountk1Q and reporting policies of tho City of Clearwater, Florida, -uJe CitY', relaUng to the funds indude<! kl the financial statements conform to generally accepted accounting principles of stale and local gowmments. The following represent the more signifICant accounting and reporting policies of the Cly: Note (1A) Reporting Entity The CIy of Clearwater is 8 munJclpal corporation gowrned by an elected f/Ve-omembcr board. As required by generally accepted accounting principles, these financial statements present the Cly of Clearwater (the primary gowmment) and Is component unls. Component units are Included In the reportilg eolly due to the s~nificance of their operational or rlllanc1al relationships with the City. The cry has adhered to the standards set forth In Statement No. 14 of the Gowmmental Accounting standards Board In reporting the primary gowmment (lI1c1udlng blended component unitS), discretely presented component units, the reporting entity and related organizations. BI!,nded Comconent Units - The Clearwater Redewlopment Agency (eRA), created by authority of AOridB Statute Chapter 163, Part III, and cry of Clearwater Resolullon 81-68, although it is legally separate, Is reported 85 if I were part of the City (blended component unit) due to the City Commission seMng as the gOYBmlng board of the eRA. Separate fUlancial statements for the eRA are not avaRable. Howewr financ1a1 statel;;ents for the eRA haw been Incorporated Into the Cly's comprehensive fmancial report. DiscretelY Presented Component Units . The Clearwater Downtown Development Board (OoB) was created by authority of Ffo~a statutes 71)..635 and 77--637, and City Ordinance 5347-93, but is legally separate from the City and gowmed by a separate board. The DOa Is accordingly reported In a separate column il the combined financial statements as a discretely presented component un. of the flllsncial reporting enlly. Since separate fll1anclal statements are not avaDable for the Downtown Dewlopment Board, the DDB's fll1ancial statements have been Incorporated into the combined and lndMdual fund sect.lons of the Ciy's comprehens~ annual financ1all'eport. Note (1B) Fund Accounting The accounts of the CRy are organized on the basis of funds and account groups, each of which Is conskjered to be a separate accounUng entlty. The operations of each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets, liabnities, fund equly, revenues and e~ndltura.s. or e)q)enses as appropriate. The various funds are grouped by generic type and three broad fund categories il the flnanc1a1 statements. The types of funds maintained by the City are as follows: Governmental Fund~ The City accounts for those tradiUonal gowmmenlal actMties financed primarily from tax rewnues through the use of various governmental funds. The basic dlstlnetlons of gowrnmentat funds are: Measurement Focus: Governmental funds are accounted (or on a spending or -financial flow" measurement focus. Thus. only current assets and current liabilities are generally included on their balance sheets. The reported fund balance represenUn~ net current assets renects -swDable spendable resources. at the balance sheet date. The operating statements of gowmmental funds report the changes In net current assets (avaOable spendable resources) during a period of time, the increases consisting of revenues and other fll1ancfng sources and the decreases consisting of e>q:lendftures and other rlllanclng uses. " ., ,; ~ 8-24 QS-09 ~'~ , 'c,L ... . . .'i. . , ji.~~\' . .,..... '0", .'. I I - ~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 I ....J....) .. ~ t .. ~ Accordingly, long-term debt and fua!d assets are segregated from the accounts of these funds and shown separately In the General Long-Term Cebt and the General Fb2d Assets Account Groups. Advances To Other Funds: Long-term advances receivable from other funds are reported on the balance sheets of governmental funds even though they do not constnute current assets. In order to exclude such assets from conslderaUon as -avanable spendable resources., an equivalent amount of fund balance is designated as reserwd. Encumbrances: Governmental funds employ the use of encumbrance accounting wherein purchase commitments are recorded as they are made In order to reseM that portion of the applicable appropriations. Encumbrances remaining outstanding at year.end do not constitute e"f'enditures or IlabnitJes. Fund balances are reserwd in an amount equal to the total of outstanding encumbrances. As described In Note 1 (G), the budget comparisons of certain funds are presented on the budgetary basis, which differs from generally accepted accountlng principles. In these presentations, encumbrances are treated as e>:pendnures In the year when the commitment Is made rather than the year of liquldaUon. Depreciation: Depreciation Is not recorded for the use of fixed assets in governmental funds. Basis Of Accountlna: Gowmmental Funds use the modified accrual basis of accountlng, whereby e>q>endnures, other than unmatured principal and i1terest on generallong-teon debt, are recognized it the accounting period when the lIabUit}' Is i1curred, If measurable, and revenues and other resources are recognlLed i1 the account.lng period when they become awDable and measurable. Rewnues are considered to meet the availabHIty test if they are collectible within the current period or soon enough thereafter for use il payment of liabnitles of the current period. Grant rewnues to be received as reImbursement for e>cpendftures incurred In the current year are recognized as revenue. General Fund. accrued revenues consist primariy of ub1ities service tS>2S and franchise ta>2S. ~eserves: Reserves haw been established for open encumbrances at year-end, for debt sel"'ke requirements, in accordance with applicable bond Indenture covenants, for long.tenn i1terfund advances, and In other cases to reflect legal res1licllons which limn the City's spending dlscreUon. . The following Bre the City's governmental fund types: General Fund: The General Fund is the general operatlng fund of the City. All financial transactions Bnd special assessments not property accounted for it other funds are accounted for ilthe General Fund. Soeclal Revenue Funds; Special Rewnue Funds are used to account for revenues derived from SpecifIC sources. Such revenues are usually required by law or regulallon to be accounted for separately and spent for particular purposes. Debt Service Funds: Debt SerAce Funds are used to account for the accumulation of resources for, and the payment of, Interest and principal on the City's General Long-leon Debt, which is not the liability of Proprietary Funds. '~J 8.-25 q8-oq " ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 CaDI!a' ProJects Fund.: Capbl Projects Funds are used to account for the acqulsKlon and constructlon of capital facillles and other food assets. PrODnetarv Funds Proprietary Funds am used to sccount for the CltYs organlzaUons snd actMJe.s which are slmQar to those found In the priwte sector. The basic dlsUnctJons of proprietary funds are: Basis of Accountlna: Proprietary Funds use the full accrual basis of accounting. Rewnues are recognized In the period in whJch they are earned, and e>cpenses are recognized il the period in which the IlabUitles are incurred. "''') Measurement Focusi. Proprietary funds are accounted for on a cost of services or -capital maintenance- measurement focus. Therefore, all assets and llabUiUesI regardless of whether they are current or noncurrent, are presented on the balance sheet Fund equity, consisting of net total assets, is segregated Into. contn'buted capital and retained earnings segments. The operating statements of lhese funds reflect rewnues, e>lpeoses, and other sources and uses which account for changes In net total assets during the period. Valuation Of Fixed Assets: Property, plant and equipment owned by Proprietary Funds are stated at cost e)tC8pt for certain water and saollal)' sewer lines of the Wily System which were donated to the Cly by contractors and subdivision dewlopers. These lines are stated at their estblated cost to the contractors and dewlopers which should appro>dmste fair market value at the date of donaUon. Depreciation Is recorded owr the estimated usefulllws using the stralght- line method (see Note 5). For all assets, depreclatlon elq)ense ilcludes amorfizaUon of assets recorded under capital leases. Wlen property is disposed, the related cost and accumulated depreciatiOn are removed from the accounts With gains or tosses on disposlJon being reflected as non-operaUng rewnue or e>q>ense. Reserves: Retained Earnings haw been reserved for debt seNice requtements. Reserws haw also been established to reflect legal restrictions which limit the Clly's spending dlscreUon. The fallowing are the City's proprietary fund types: Enterorise Funds: Enterprise Funds are used to fmance and account for the acquisition. operation and maintenance of gowmmental facilities and serkas that are supported primarily by user charges. Internal Service Funds: Internal SeNice Funds are utilized to finance and account for serka and commodltles fumlshed by a des~nated department to other departments within the CIy or to other gowmments on a cost-reimbursement basis. "..) Flduclarv Fundi Trust and Agency Funds are utilized to account (or resources that are managed h a tnJstee capacly or as an agent for other parties andlor other funds. These Include None>:pendable Trust. Pension Trust. and Agancy Funds. None>q>endable Trust and Pension Trust Funds are accounted for substantially In the same manner as proprietary funds with a -capital maintenance- measurement focus and employment of tho accrual basis of accounting. Agency Funds are not concerned wilh measurement of operaUng results, being essenUally concerned wlh a custodJaI responsIbility; assets and liabilities are measured on the modified accrual basis. / .' 8-26 Cfl-oq ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 I ..'~' ~~.t__ Reserves for Retirements have been established for the payment of future benefits. Reserves for Retirements for defined contribution plans are equivalent to the net assets of the plan, and for defined benefit plans they are equivalent to tho net assets of the plan, not to exceed the actuarial determined lIablllly of such plans. . Account G(OUPS - General Fixed Assets and General Lono-Tenn Debt General Fixed Assets Account Group: This account group accounts for all fixed assets of the City's Governmental Funds. Assets purchased are recorded as expendllures In the General Fund, Special Revenue Funds and Capital Projects Funds and are capitalized at cost In the General Flxed Assets account group. Generally accepted cccountlng principles provide an option whether Infrastructure Improvements such as streets, bridges and drainage systems are capitalized In the General Fixed Assels account group. The CIty has elected to capitalize these Improvements. No Interest capitalization or depreciation Is recorded on General Fixed Assets. Conlributed assets are stated at estimated fair market value on the date contributed, or In the case of assets contributed by developers, at estimated cost to the developer whIch should approximate fair market value. . General Lena-Term Debt Account Group: This account group accounts for long-Term Debt and Compensated Absences Which are liabilities of Governmental Funds but not payable from currently available expendable financial resources. Note (1C) Pooled Cash and Investments The City utl1lzes a consolidated cash pool to account for cash and Investments of all City funds other than those which are required by ordinance to be physically segregated. The consolidated cash pool concept allows each participating fund to benerrt from the economies of scale and Improved yield which are Inherent to a larger investment pool. Formal accounting records detail the individual equities of the participating funds. The cash pool utilizes a single checking account for all City receipts and disbursements: AU Individual fund cash equity In a deficit (overdraft) posilion with respect to the consolidated cash pool are reclassified at year~end to short-tenn Interfund payables to the Capltallrnprovement Fund, the fund selected by management to reflect the offsetllng Interfund receivables in such cases. The City has an agreement with Its depository bank to provide that all excess cash Is swept daily and automatically into an overnight repurchase agreement which pays Interest at %% less than the dally federal funds rate (5.625%) at September 30, 1996,.wllh no requIrement for a minimum compensating balance. Ttte collateral for this continuing repurchase agreement as of September 3D, 1996 was $11,525,000 of United States Treasury Notes at 8.5% due 7/15/97 and $500,000 of United Stales Treasury Notes at 6.75% due 2128/97. This collaleral securities are being held by the Federal Reserve Bank of Jacksonville jointly In the name of the depository bank and the City so that approval of both parties is required to liquidate or otherwise dispose of the securities. Market value of the collateral securities was $12,480,494 on September 30, 1996. ' Under City Charter and the current Investment Policy, which the City Commission adopted September.7. 1995, consolidated cash pool Investments are limited to the following: Unlled States Government Securities, Certificates of Deposit in Local Banks. Repurchase Agreements, Savings Account In local Banks, Federal Government Agency Securities, Municipal bonds (Other than CIly of Clearwater issues), State of Florida Bonds, and County Bonds Issued by Counties In Florida. :~ B-27 q<g-Oq ~ CfTY OF ClEARWATER, FLORIDA NOTES TO fiNANCIAL STATEMENTS SEPTEMBER 30. 1996 The CIy utilzes 8 wry conservaUw Inwstment phDosophy when llnwsts Is pooled cash funds In that the return 21 the princlpal is more knportant than the return .2Il the principal. The CIy has no Inwstmenls In dertvaUws or k1 collateralized mortgage obUgaUons (CMO's). The City does not actJvely trade Is portfolio and generally holds Inwstments until maturity. Through the use of a laddered approach to maturlJes and by timing maturitles to cash needs, we do not antJclpate the need to sell ilvestmenls to meet cash flow. . Under the Inwstment Policy, a perfonnance measure standard has been estabUshed (complying wih state law). The perfonnance measure chosen Is B weighted Bwrage of: the owmlght Interest rate, and three month, sbc month, one year, and three year Treasury rates respectM31y. For the fiscal year ended September 3D, 1996, the perfonnance measure weighted awrage is 5.43%. The actual pooled cash earnings perfonnance, before bank charges, was 5.49%. Inwstments being held outskfe of the consolidated cash pool are escrowed debt seNice lnvestments and employee retirement investments. Permissible escrowed debt service Inwstmonts are specifICally defined In each individual debt instrument, but generally follow the same Ilmiations whk:h apply to consolidated cash pool Investments. The City maintains flW different employee retirement programs, and each one has Is own list of permlted nvestments. Generally, each plan allows the same type of Inwstments as the consolkfated cash pool. but additionally allows some portion of Is assets to be Inwsted In stocks, bonds, and notes of corporations which are listed on one or more of the recognized national stock e>d1anges. ::) Govemmental Accountilg Standards Board (GAS8) statement Number 3 requires certain disclosures for deposb and investments, including managemenfs determinaUon of custodial credl risk, deflOed as follows: Fordeposls, the bank balance must be categorized as tallows: . Category 1: Insured or collateralized with securities held by the cay or Is agent In the Cly's name. Category 2: Collateralized with securities held by the pledging flllancial ilst.itutlon's trust department or agent in the Clis name. Category 3: Uncollaterallzed. For Inwstments other than deposits, the following categories apply: Category 1: Insured or registered, or held by the City or its agent In the City's name. Category 2: Uninsured and unregistered, held by the counterparty's (purchasing agent's) trust department or agent In the City's name. Category 3: Uninsured and unregistered, held by the counterparty its trust department or agent, but not In the City's name. As described abow, the Cly's depository banking agreement provides for the ilvestment of all excess cash deay into 8 collateralized repurchase agreement, whereby all deposits deemed to be collected are automatically deposited. Cly dcposls consist of relatively small cash balances held by Debt SerAce Trustees and Employee Retirement Custodians. The bank balances equal the carrying amount (or these deposits, and management's classification of custodial credit risk is indicated In the table below. Because these amounts are part of the trustee's and custodian's composite account, they are classified along with Investments on the balance sheel .;) Managed mutual funds, deferred compensation Section 457 mutual funds, and guaranteed Inwstment 8:-28 q~ "'-09 / ~ / CITY OF CLEARWATER. flORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 ...~ ' - .~ ~ ;:::. contracts are not susceptlbfe to classification by risk category and are disclosed but not categorized per GASB statement 3. Management has classlned all other Investments In(o Category 1. with the exception of certain employee retirement Investments which are being held by the financial Institution which Is also serving as Investment manager. and certain escrowed debt service Investments which are befng held by the financial Institution from which they were purchased. The carrying value for all Investments Is cost or amortized cost. except for deferred compensation Section <457 Investments, which are reported (and recorded) at ma~et value only. The Employees' Penslon Fund has invested In fIXed rate guaranteed Investment contracts (GIC's) which are backed solely by the full faith and credit of Issuing companies. totaling $23,500,000 as of September 30. 1996. Included In this total Is $4,000.000 (face value) of GIC's Issued by the American subsidiary of Confederation Ufe Insurance Company. Confederation Ufe Insurance Company' was seized by Canadian regulators and by Michigan regulators on August 1. 1994, due to an apparent Insolvency and a desire on the part of regulators to preserve the assets of the company. An association of Confederation life contract holders, Including City representation, has been fonned to represent the Interests of the contract holders with Industry and regulatory parties. The City has stopped accruing Interest Income 8S of August 1, 1994. for the Confederation Life GIC's and has written off 10% or the face value resu1tlng In a canytng value of $3.600,000. The $3.600.000 In Confederation life GIC's represents 15.32% of the total GIC's and 1.46% of the total assets in the Employees' Pension Fund. The City does not believe that the Confederation Ufe InSOlvency wUl have 8 material Impact upon the results of operations or financial postllon of the Employees' Pension Fund. Summary of deposits and Investments, Including management's assessment of custodial credit risk, follows: ' Investment Carrying Mar1<ot Otpos.lt Credl Cr.dit Value Value ~bk ClllOOI'V Risk ClIeaofy I. Ca\s.clidaled Cesh Pod Ind Canponent UNt Depo$Its and InwstmtnQ: U.S, Tr..wy N<:tet. rd BlIs $ 28,621.126 S 28.723,919 1 U.S. ,.,~ Slc:utIIs 85.533,m 64,8$7.203 1 RIWM1g R.purthue AgrMmrts 11.176,810 11.176.810 1 AecrU<<l'rUrMt Gfl/lMllmertl 1,835,228 1.835.228 NlA .rMSttnInt A.mortIDtion (327.362) (327,362) NJA Cash 737,237 737,237 NJA LIS' Olbbnding Checb It W3O'96 (3,572.080) (3,572,080) . NJA TobI Cult Poet and ~ Unl Eq~ 124,004,736 123.0430,955 .:;) B~29 q8 -oq .', I ~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Investmn Canying Market o.po..lt Ctldl Credit Value V.IUll Rbi!. CIttoory RI9 CIltg9Q' II. CcrwwctJon and Dtbt Slt'kl CIposb Ind IIMiIQ ,.u: ~BoncM 650,000 673,491 WA U.s. TI'MIl.IY NcCMIInd BondI 3,615,928 3,940.01. TCltII ConIln.Ictian Ind Debt s.cw:. DepoIb n:llfMISInWD .,265,928 ' ",613,505 Ill. En1*l>" RIIIrInwt DIposb rd InwstnwlIs: Cah on 0Ip0Ut ~ CusttdIn (11,244) (8,244) 1 Monty MIfbt Accoutll 15.063,080 15.093.520 1 Gua"If'IMClll'lWl$ll1lert eonr.dI 2J.100.lXXI 25,027.625 NlA Cctpona Equty ~ 122.230.838 17U20,910 1 U.s. T~Bib and~ 5Il,S.t.S11 ~,O~U .G1 1 Dcmes\lc CctponI8 Bonds 10,617.194 10,399.<<15 2 UoftQlVl8oc:bcI8oncl11 15,095,458 1..8211,812 1 AaMt BIcbcl8<rdl 5.35UW 5,21",2S1 1 Sieck "'-UI F.... 2,031,eri13 2~.sa N1A Fbced II'lCOlM ~ ",212.213 .c,25!5,G5 2 ,...:) o.tlfTld ~ SectIon 167 MLnaI FIntI 19,02".2&7 19.024,2S1 NlA TGtIi ~ R~ Il1'tIIIStrnerD 27S,29!5.m 327.m.125 . .~ f" TatIl o.p.ts Ind IlM&bnrIb, All FIrIdI , <<l3.537.5B3 I e.1l11l.!5Ill5 Notl (10) Inventories Inventories of proprietary funds are stated at cost and valued on the first-in first-out (FIFO) basis. In governmental funds, the majority of inventory Items such as materials and supplies, are accounted for under the purchases method, which provides that expenditures are recognized when the inventory item Is purchased. The only governmental fund Inventory that is accounted for under the consumption method is the General Fund Inventory of items for resale at the fishing pier. Under the consumption method, the expenditure Is recognlzecl when the inventory item is sold (or consumed). Note (1E) General Fund AdmInIstrative Charges The General Fund charges Proprietary Funds for their proportionate share of 'the costs of general government operations. The amounts charged to these Proprietary Funds are based on relaUve net expenditures (after deducting alllnterfund transactions). Note (1 F) Accrued Vacation And Sick Leave Full-time pennanent employees earn a paid vacation period of two calendar weeks after one year of service, Increasing on a graduated scale to a maximum vacation period of four calendar weeks per year after 16 years of service. Generally, employees may accumulate unused vacation not exceeding one current year of vacation credit. Sick leave accumulation ranges from approximately 6-9 hours per month. Upon retirement from City service an employee may, under certain circumstances, be paId on&- half of his accumulated unused sick leave. I .f ~ 8-30 qz -09 ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 I tl is the Cky's polley In Its Proprietary Funds to rened on an 8CCnJal basis the amounts of earned but unused vacation leaw and that portion of earned but unused sick leaw esUmated to be payable upon retirement. 'Nth respect to the current f&scal year, management has detennlned that no material amounts 0' accumulated unpakf vacation and sick leaw at the close of the year will be liqukjated with e>q>endable avanable resources; therefore the entire liability for such leave pertaIning 10 the Governmental Funds Is reflected In the General Long.Term Debt Account Group. The CkYs reporting of accrued vacation and sick leave has been recorded In accordance wil.h statement No.16 of the Governmental Accountlng standards Board. Note (1 G) Budgets And Budgetary Accounting Annual budgets are legally adopted for the City's General Fund and for the Special Development Fund, and the Community Redevelopment Agency Fund. The City of Clearwater obse~d the following procedures in establishIng the budgetary data for the General Fund and Spec1a1 Development Fund, as reOected In the flllancial statements: On June 30.,1995. the City Manager submitted to the ClealWater City Commission proposed budgets for the fiscal year commenclng October 1. 1995 and ending September 30. 1996. Public Hearings were held on september 7. 1995 and September 21, 1995 at the Clearwater Commission Chambers to obtain citizen comm.ents. on September 21, 1995 offICial budgets were legally adopted by Ordinance No. 591~95. SubSequent quarteny budget amendments were adopted on March 21, 1996 (Ordinance 6003-96) and July 18. 1996 (Ordinance 6056-96). The final amended budget was adopted September 19, 1996. (Ordinance 60a~96). The budget for the Special Development Fund is adopted on a basis consistent with GAAP, and appropriations lapse at year-end. AppropriaUons for open encumbered purchase orders at year-end In the General Fund do not lapse, but rather conlInue until Iquk:i'ated or otherwise canceled by City Commission acUon. On the General Fund budgetary comparison statements, actual e>q:>endilures have been adjusted to include end of year encumbrances and to exclude beginnIng of year encumbrances to provide for a meaningful comparison. f:)a;epl for the treatment or encumbrances and certain transactions relating to lnterfund loans, the General Fund Budget is adopted on a basis consistent wtth GAAP. and aU non. encumbered appropriations lapse at year~end. The lewl of budgetary control established by the legislatlw body, that is the lewl on which expendftures may not legally e)t;eed appropriations, is the IndMdual fund. In accordance with provisions of Ordinance S02S.90 and with Section 2.519(4) of the Clearwater Code, the City Manager may transfer part or all of any unencumbered appropriation balance among programs within an operating fund, provided such action does not result In the dlscontlnuance of a program. Such transfers must be Included In the ne>:! budget review presented to the City Commlsslon. Upon delalled written request by the City Manager. the City CommissJon may by ordInance transfer part or all of any unencumbered appropriation balance from one fund to another. r") As established by admlnlstratlw polley, department directors may transfer money from one operatlng code to another within a program without a formal written amendment. Fonnal requests for budget amendments tram department directors are required for transfers In caphaJ e>pendftures, transfers and reserves. Thus. certain object classlflCStlons within departmental and/or program budget appropriations are subject to admlnJstraUwly imposed controls in addition to the legal controls imposed by City Commission action described sbow. ~ B-31 0/3-09 '1 CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 The annual budget for the Community Redevelopment Agency Is adopted annually by the trustees of that agency In accordance With state law. For the current year, this buc1get was officially adopted on September 5. 1995, following a public hearing on that date. This budget Is adopted on a basis consistent with GAAP, end the level of budgetary control Is the total fund. Budget amounts presented In the accompanying financial statements renect all amendments adopted by the City Commission and the governing boards of component units. All amendments were adopted In confonnance with legal requlremen\s. Individual amendments. as well as the net effects of all amendments during the Oscal year, were not material In relation to the original appropriations for the governmental funds In the aggregate. Budgets are also adopted annually by the Clearwater City Commission for the Enterprise Funds, all Internal Service Funds, the Capllal Projects Fund and the Special Programs Fund. BUdgetary comparisons for the Enterprise and Internal Service funds are not required by NCGA Statement No. 1 for the general purpose financial statement~ and are not Included In this report. Budgets for the Capital Projects Funds and the Special Programs Fund are adopted on a multi-year completed program basis, where budgetary appropriations do not lapse at year-end, but may extend across two or more fiscal years. A comparison of annual results with these budgets would not be meaningful and Is therefore not Included In this report. The excess of revenues and other sources over expenditures and other uses for the Special Programs Fund Is shown as 8 reconciling item near the bottom of the Combined Statement of Revenues, Expenditures, and Changes In Fund Batanca - Budget and Actual. ."1) All City Commission adopted budgets are Integrated Into the fonnal a~untlng system to allow for monthly comparison of projected and actual experience tn all funds for which budgets are adopted. The annual budget for the ClealWater Downtown Development Board Fund, a discretely presented component unit of the C"y, Is adopted annually by the members of that board In accordance with state law. For the current year. this budget was officially adopted on September 12, 1995. Note (1H) Risk Management The eny Is self insured within certain parameters for losses ariSing from claims for general liability, auto liability. police professional liability, public official's liability, property damage, and workers~ compensation. Insurance coverage has been maintaIned by the City to pay for or Indemnify the City for losses In excess of certain specific retentions and up to specified maximum limits in the case of claims for lIabUlty. property damage, and wof1(ers' compensation. The liability excess coverage is $5,000,000 per occurrence with $5,000,000 policy aggregale limit with self-Insured retenlion of $500,000. The wo!1(ers' compensation excess coverage is statutory with $500,000 self.insured retention per occurrence, and the property damage excess coverage Is $70,000,000 with a $250,000 self-Insured retention. Settled daims have not exceeded excess coverage in any of the past three years. The transactIons relating to the self Insurance program are accounted for in the Central Insurance Fund, an Internal Service Fund. The billings by the Cenlrallnsurance Fund to the various operating funds (the Interfund premiums) are based on actuarial estimates of the amounts needed to pay prior and current year claims. The claims liability reported at September 30, 1996 is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported If informatton prior to the Issuance of the financial statements Indicates that It Is probable that a liability has been Incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes In the claims liability amounts In fiscal years 1996 and 1995 were: I ! ~.,:'ti.1 8-32 0/6 -09 - ~ II ,~ I CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Balance at October 1.199-i Current year claims and changes In estimates Claim payments Balance at September 30, 1995 Current year claims and changes In estimates Claim payments Balance at September 3D, 1996 Self Insurance $ 7,949,766 2,578,073 (2,306.612) 8,221,227 5,064,855 (2,232,312) $ 11,053,770 -,;.;) ,.' '.at" .f During fiscal year 1988-89, the City Commission authorized the establishment of a special health Insurance stabnizaUon fund to guard against future substanttal Increases In health care costs. The current accumulated balance In this fund is $3.437.057 which represents $558.102 refunded from Insurance carriers and $2,878,955 contnbuted by departmental bUllngs during the current and six Immedtately preceding fiscal years In e>CCess of Insurance premium e>:pense actually Incurred during those flW years. This fund Is a component of the unreserwd retained earnings balance of the Central Insurance Fund at September 30, 1996. The City is not currenUy self.lnsured with respect to major medical coverage. Note (11) Statements of Cash Flows For purposes of the statements of cash flows, Investments with original maturities of three months or less are considered to meet the definftion of cash equivalents. The majority of the investments In which the Cly's proprietary and none>q>endable trust funds have an equity are held by the crys consolkJated pool of cash and Investments. Since fund equities In this cash management pool have the general characteristics of demand deposits In that additional funds may be deposited at any time arid also funds may be withdrawn at any time wfthout prior notice or penalty, each fundls equity account is consk:fered a cash equivalent regardless of the maturities of Inwstments held by the pool. Those funds which have defICit (owrdraft) poslUons with the pool treat such deficits as Interlund payables to the City's Capbllmprovement Fund as e>.plalned in Nole 1 (C). Note.(1J) CapitaHzatlon of Interest In compliance with the requirements of Financial Accounting Standards Board statement No. 62, It is the policy of the City to capitalize all Interest costs of tax e>a:!:mpt borrowings, the proceeds of which are e>o1emally restricted to the financing of the acquisition of speclfJed qualifying assets,less any Interest earned on the temporary Investment of the proceeds of such borrowings until the specified qualifying assets acquired with the borrowings are ready for their Intended use. For other projects, the City follows the provisions of Financial Accounting standards Board stalement No. 34 and capitalizes interest ~sts i1curred during the constlUcUon period. This policy is applicable to the proprietary funds: It is not applied to general fixed assets. During the fIScal year, $6,870,095 of Interest cost was Incurred In the proprietary fund types. Interest capitalized, net of earnings on related inwstments was $60,492. "-0) &-33 qg /'O~ .... - ~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Noto (1K) Application of FASB Pronouncements to Proprietary Fundi The Cly has elected to Implement the provisions of GASB Statement 20 wtlh regard to the application of . FASB Pronouncements to Is proprietary funds. In accordance with the pro\llslons of GASB statement 20, the CIy has elected to not apply those FASB statements and lnterpretatJons issued after Nowmber 30, 1989. Noll (1L) Comparative Data Wlerewr possible, the accompanying financlal statements Include comparative total data for the prior year In order to proW:te 8 better understanding of changes In the City's owrall financial position and results of operatJon. Certain prior )'ear balances haw been recJassif.ed to conform wlh current year presenlatJons. Note (1M) Combined Financiallnfonnation The total columns Included In the combined financial statements which are capUoned -Memorandum Onlf represent a summation of the amounts presented In the columns by fund type and account group. Such totals do not elininate Interfund transactions, and are Included for Infonnatlonal purposes only. They are not Intended to present financial positJon. results of operations or cash nows for the gowmmental un. as 8 whole In confonnance will generally accepted accounting principles. Note (2) Long-Tenn Debt ..~ ~ , .. ~.....I f".,' Note (2A), Summary of Transactions In Long-Tenn Debt Not.. Mortgag., Gern loin Pool Accrued Obligation Revenue ~recmerh Compensatad General Lena-Term Debt kcol.l'lt Gr~ Bond. Borda & Contract. .6bsences Tal. Debt Payr.ble III Octob<<' 1, 1995 $ ~,ooo $ 13.828,646 $ 2.265,119 $ 4,033,072 $ 20.576,637 New Debt Issued: lea.. PlIchaIe Coriractl fO( Equlpmett kqlilltlon 1,870,967 1,870,967 NIl ChIIrge In Accrued Compensated Absences (17,014) (17,014) Debt Retlted (95,000) (476,656) (845,37S) (1,"'11,23iIJ~ Datt p.yable at September 30, 1996 $ 355,000 S 13.351,700 S 3,290,708 S 4,016,058 $ 21,013,556 Q 8-34 Q8'--oCf ,'I ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 I Note (28) Summary of Dabt SeNlee Requlrementl (all outltandlng Indebtedness III of Septembor 30. 1996. including interest paymentl of .121.676.287) Notes. Mortgages, General Loan Pool Year Ending Obligation Revenue Agreements Sept. 30th Bonds Bonds & Contracts Tatar 1997 $ 117,580 $ 10,505,061 $ 04,586.617 $ 15,203,258 1998 131,280 10,328.822 3.118,419 ; 13,576,521 1999 138,915 10,447,613 2,474,790 13,061,318 2000 10,079,875 1,689,596 11,769,471 2001 10,073,621 777 .322 10.850,943 Thereafter 189,942.164 189,942,164 $ 387,775 $ 241.375.156 $ 12.646,744 $ 254,409.675 Notes (2C) Obligations Under LC3se Purchese Agreements Future minimum lease payments under lease purchase agreements are as foflows: ,"'" l .":J;r.J Year Ending Sept. 30 Amount 1997 199B 1999 2000 2001 S 3,541.840 2,974.944 2.439.7o.t 1,689,596 7n ,322 11,423,406 Deduction of the Amount of Imputed Interest Necessary to Reduce Net Minimum Lease Payments to Present Value . 1,194,495 $10.228,911 Obligations under capital leases are included as a component of the balance under the caption MonaaDes, Notes. loan Pool Aoreements and ACQuisition Contracts Payable on the City's Combined Balance Sheet. Note (20) Long.Term Debt. General Government Accrued ComDensated Absences Long-term panion of accrued vacation and sick pay for governmental funds, as required by GASB Statement No. 16. $ 4.016.058 Serlaf Bonds Pavable ,General Obligation Bonds, 1978 Series, Interest and principal payable from ad valorem taxes. maturing serially from January 1, 1997 to January 1, 1999, interest rates 5.7% to 5.8%. 355.000 , ,-J 8-35 Cf3 /09 ~ CITY OF ClEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEp:T~rv1BER 30. 1996 Public Service TIX and Bridge Revenue Bonds, Seriol 1985, maturing serially from December 1 r 1996 to December 1 r 1995, with interest rates varying from 8.3% to 8.76%. The amount shown here represent. 66.02% of the serial portion of the Issue remaining after pan/al defeaseance on September 27, 1995. The amount representing 66.67% of the term ponlon of the total Issue II included in the balance of term bonds payable within the general long-term debt account group. The remainder of this issue, both term and serial portions, is reflected In the Parking System Enterprise Fund. The bonds haYe serial maturities ranging from $350,000 at 8.3% due December 31, 1996 to $415,000 at 8.75% due Decomber " 1998, and term bonds totaling $550,000 at 9.125% due December " 2005. CommunitY Redevelopment Agency of the City of Clearwator Tax Increment and Lease Revenue Bonds, Series 1986, maturing serially from October 1, 1996 to October " 2000, with Interest rates varying from 7.896 to 8.4%. Interest and principal payable from tax Increment revenues and from lease revenues. Community Redevelopment Agency of the City of Clearwater Tax Increment Revenue Bonds, Series 1987, maturing seriallv September 1, 1997, with an interest rate of 8.30%, Interest and principal payablo from tax Increment revenues. """\ r ~J '"t .--:" Improvement Revenue Bonds, Serlos 1996, with serial maturities from $145,000 at 4.70% due February 1, 1997 to $590,000 at 6.00% due February 1, 2021. The bonds have term maturities of $ 1,565,000 at 5.875% duo February 1, 2020 and $2,750,000 at 6.000% due February 1, 2025. Principal and interest payable from Public Service Tax revenues. Total Serial Bonds Payable Term BontJs Payable Public' Service Tax and Bridge Revenue Bonds, Series 1985, maturing December 1, 2006 with interest at 9.125%. The amount shown here represents 65.5796 of the term portion of issue remaining after partial defeaseance on September 27, 1995. The remainder of the issue Is reflected in the Parking System Enterprise Fund. The bonds have serial maturities ranging from $350,000 at 8.3% due December 31, 1996 to $415,000 at 8.75% due December " 1998, and term bonds totaling $650,000 at 9.126% due December 1, 2005. Community Redevelopment Agency of the City of Clearwater Tax Increment and lease Revenue Bonds, Series 1986, with Interest and principal payable from Tax Increment Revenue!i and Lease Revenues, maturing October 1, 2006, with interest at 8.50%. \.~ 8.36 ~ 641,460 415,000 165,000 6.265.000 7.841.4~Q 360,330 1,190,000 ! q6-09 ~ CITY OF CLEARWATER. FLORIDA NOTES TO ANANCfAl STATEMENTS SEPTEMBER 3(). 1996 I Improvement Revenue Bonds. Series 1995, with term maturities of .1,565,000 at 5.875% dUB February 1, 2020 and $2,750,000 at 6.000% dUB February 1, 2025. The bonds have serial maturities from .'45,000 at 4.7% due February 1, 1997 to '590,000 at 6.0096 due February 1,2021. Totat Term Bonds Payable 4.315.000 5.865.330 Notes. Moncaces. Contr~ts and loan poor Aareement Pavabh~ Pursuant to cenaln Master Lease Agreements, the City has entered Into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating departments of the General Fund. These agroements provide for 20 quarterly payments ranging In amount from $154 to $41,376. The cost of the equipment at the Inception of the leases was $4,450,797 with interest Imputed thereon of $632,387. the effective rates ranging from 5.03% to 6.81 %. 2,921,833 (''') \".1" Pool loan Agreement with Rrst Aorida Governmental Financing Commission authorized by the City Commission on JulV 2, 1987 through adoption of Ordinance 4437-87: provides for repayment of principal in an annual installment of $55,000 on July', 1997; interest on installments ranges from 6.6% to 6.7% and is payable semiannually; City is further obligated to pay certain additional paymonts, Including its proportionate share of the fees of the Commission as well as those of the Trustee, Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds Issued bV the Commission to provide tho funds for maldng the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this Loan Agreement; collateralized by non-ad valorem revenues or other legally available funds of the City. Loan was obtained to finance the purchase of an advanced mUlti-purpose fire fighting vehicte. Pool Loan Agreement with City of Gulf Sreeze Florida Local Government loan Program authorized by the City Commission on December 15, 1988, through adoption of Ordinance 4728-88; provides for repayment of principal in 120 monthly payments of $8,167 from February 1, 1989 to January 1, 1999; Interest is payable monthly at the floating rate determined by the Loan Program Rnanctal Advisor sufficient to pay the proportionate share of program Interest. costs and expenses (3.55% at September 30, 1996); the interest rate shall not exceed twenty-five percent (26%' per annum, exclusive of amounts Charged for costs and expenses of the loan program; collateralized by proceeds of the local government half-cent sates tax. Loan was obtained for the financing (or refinancing) of the cost of acquisition of the Vogel Property tract for park purposes. 55,000 220,600 v 8.37 C(6-09 ~ .: J CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Pool LOIn Agreement with City of Gulf Breeze florida Local Government Loan Program authorized by the City Commission on December 15, 1988, through adoption of Ordinance 4729.88: provides for repayment of principal in 120 monthly payments of $3,458 from February " 1989 to January " 1999; Interest ,. payable monthlv at the floating rate determinod by the Loan Program financial Advisor sufficient to pay the proportionate share of program Interest, costs and expenses (3.55%- at September 30, 1996); the Interest rate shall not exceed twenty.f1ve percent 126~) per annum, exclusive of amounts charged for costs and expenses of the loan programi collateralized by proceeds of the local government half-cent sales tax. Loan was obtained for the financing lor refinancing) of the cost of acquisition of environmentally sensitive Coopers Point tract for park purpose.. Total Notes, Mortgages, Contracts and Loan Pool Agreements Payable Total General Long.Term Debt Payable Noto 12E) Long.Term Debt. Proprietary FundI Water Bnd Sewer UtilitY Fund Water and Sewer Revenue Bonds, Series 1988; 6.60.7.60%. Current Interest Bonds with Serial maturitie~ due In annual principal Installments ranging from $460,000 to $2.985,000 on December 1 st In the years 2005, 2006, 2008, and 2010 through 2013; Capital Appreciation Bonds with an approximate yield to maturity ranging from 7.45 . 7.75% and having serial maturities due in annual Installments loriglnal principal amount plus Interest earned to date of maturity) rangIng from $625,000 to $6,840,000 from December 1, 2004 to December 1, 2018; interest is payable semiannually on Current Interest Bonds and at maturity (or prior redemption data) 011 Capital Appreciation Bonds; net of unamortized discount of $816,167 and in the case of the Capital Appreciation Bonds, unearned interest Included In the maturity amount outstanding at September 30, 1996 of $54,188,386 collateralized by net revonues of the Water and Water Pollution Control System. Water and Sewer Refunding Revenue Bonds, Series 1993; 3.760 - 5.625%. Current Interest Bonds with serial maturities due In annual principal installments ranging from $140,000 to $6,716,000 from December 1, 1996 to December 1, 2018; Interest Is payable semlannuaUy. net of unamortized discount and issue costs of $136,016, collateralized by net revenues of the Water and Water Pollution Control System. .~ . ,..,,~t"'J :.) 8-38 93.376 3.290.708 21.013.556 36,785,447 47,033,984 0f6 - 09 'l CITY OF CLEARWATER, FLORIDA NOTES TO FINANCJAL STATEMENTS ~EPTEMftgR 30. 1996 I Pursuant to cenaln Master lease Agreements, the City has entered Into Lease Purchase Agreements for the purchase of automotive equipment for use by operating divisions of the Water and Sewer UtilitY Fund, providing for 20 quanerly payments ranging from $1,168 to $3,856. The cost of the automotive equipment at the inception of the lease was $121,046 with interest imputed thereon of .'5,304, with effective rates ranging from 5.086% to 5.1 %. 76.934 83,896,365 less Current Ponion of long-Term Debt 4.' 62.636 79.733.729 long.Term Debt, Excrudlng Current Ponion Cash has been restricted and reserves established in the Water and Sewer Revenue Bonds Debt Service Fund pursuant to the ordinances authorizing the four outstanding series of Water and Sewer Reven~e Bonds. Amounts restricted are in compliance with the ordinances. .~) ">.. >;~., Gas Utility Fund Gas System Revenue Bonds, Series 1991, 5.6 - 6.5% Serial Bonds due In annual principal installments ranging from $255,000 to $380,000 from September 1, 1997 to September 1, 2004: 6.5% Term Bonds in the principal amount of $2,325~000 maturing on September 1, 2009 and 6.5% Term Bonds In the principal amount of $2,455,000 maturing on September 1, 2013; Interest is payabJe semiannuallv; net of unamortized discount of $132.078. collateralized by net revenues of the Gas Division. 7,157,922 Gas System Revenue Bonds, Series 1994A, 6.0% Serial Bonds due in annual principal installments ranging from $645,000 to $770,000 from September 1, 2017 to September 1,. 2020; 6.0% Term Bonds in the principal amount of $1,715,000 maturing on September " 2016 and 6.1 % Term Bonds in the principal amount of $3,575,000 maturing on September 1, 2024; interest Is payable semiannually: net of unamonized discount of $134.095, collateralized by net revenues of the Gas Division. 7,975,905 Gas System Revenue Bonds, Series 1996A, 4.25 - 5.75% Serial Bonds due in annual principal installments ranging from $65,000 to $270,000 from September 1, 1997 to September " 2014; 5.75% Term Bonds In the principal amount of $905,000 maturing on September, 2017: 5.75% Term Bonds In the principal amount of $1,460,000 maturing on September 1, 2021; and 5.8% Term Bonds in the principal amount of $4,465,000 maturing on September 1, 2026; interest is payable semiannually; net of unamortized discount of .'54,202, collateralized by net revenues of the Gas division. 8,660,79B Loan payable to the Water and Sewer Fund for the transfer of ownership of property from the Water and Sewer fund to the Gas Fund. Payment of the loan is Interest free, with the last of five equal Installments due 9/30/97. 104,264 ~ 8-39 tf2-cp; '-..... ~- .............-....... --- ' I- ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Pursuant to ceruln Master Lease Agreements, the City has entered Into Lease Purchase Agreements for the purchase of vehlcres and other equipment for use by operating divisions of the Gas Fund. providing for 20 quarterly payments ranging from .'.140 to $7.718. Tho cost of the automotive equipment at the inception of the lease was $187.217 with interest Imputed thereon of $24,435, with an effective rate of 6.1 %. Less Current Portion of Long-Term Debt 29.854 23.928.743 464.1'& 23.474.622 Long-Term Debt. Excluding Current Portion Cash has been restricted and reserves established In the Gas System Revenue Bondi Debt Service Funds pursuant to the ordinance authorizing the throe outstanding issues of Gas System Revenue Bonds. Amounts restricted are in compliance with the, ordinance. ,..-, '~.</!yJ Solid Waste Utllltv Fund Pool Loan Agreement with First Ronda Governmental Financing Commission o authorized by the City Commission on July 2, 1987 through adoption of Ordinance 4437-87; provides fat repayment of principal in annual installments ranging from $70.000 to $86,000 from July 1, 1996 to July 1. 1997; Interest on installments ranges from 6.15 % to 6.70% and is payable semiannually: City il further obligated to pay certain additional payments, incruding its proportionate share of the fees of the Commission as well as those of the Trustee and the Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds Issued by the Commission to provide the funds for making the pool loanl, snd in addition all fees and expenses of the Commission or Trustee that relate to this loan Agreement; collateralized by non-ad valorem revenues or other legally available funds of tho City. loan was obtained to finance the construction of a facility to be used by the Solid Waste Department (also finances improvements to real property and acquisition of equipment unrelated to the Utility System); net of unamortized discount and issue costs of $260. 84,740 An Internal twenty year construction loan from the City's Central Insurance Fund for the construction of administrative, container maintenance and truck wash facUlties and I paved yard for use by all cost centers of the Solid Waste Fund. The loan provides for 20 annual payments of $82,474 together with interest at the cash-pool rate. due on September 30 of each year, commencing September 30, 1994. The cost of the construction was $1.686.759. 1,402,053 ::) 8:40 to q8-oC} . I ~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEI:>>TEMBER 30. 1996 I Pursuant to certain Master leaso Agreements, the City has enterod Into lease Purchase Agreements for the purchase of equipment for tho use by the operating division of the Solid Waste Utility Fund. The agreements provide for 20 quarterlV payments ranging from .',055 to $4,667. The cost of the equipment at the Inception of the leanes was $100,054 with Interest Imputed thereon of .'4,379, with effective Interest rates ranging from 6.1 % to 6.41 %. 76.41Q 1,563,203 less Current portion of long.Term Debt 184.956 , .378.23~ Long.Torm Debt, Excluding Current Portion ~d,' T.J Recvclina Utilltv Fund An internal construction loan from the CitY's Central Insurance Fund for the purchase of a baling system and the construction of a recycling processing building for use by all the cost centers of the Recycling Fund. The foan provides for annual interest payable on September 30 each year, commencing on September 30~ 1995, at the cash.pool rate, for funds actually borrowed as they are borrowed. Periodic principal payments on October 1 of various fiscal years as provided in the proforma financial statements starting October 1. 1995. The total cost of the baling system at the inception of the loan totaled $129,836. The cost of constructing the processing building was $140,100. Pursuant to certain Master Lease Agreements, the Ctty has 'purchased automotive equipment for use by the operating divisions of the Recycling Fund. The agreements provide for 20 quarterly payments ranging from $991 to $20.327. The combined total principal amount of the loan at the inception of the leases was $820,131 with interest Imputed thereon of $190,890, with effective interest ratas ranging from 4.92% and 6.95%. 151,162 Less Current Portion of long.Term Debt 486.4~ 637,603 306.515 331.08Q . long-Term Debt, Excluding Current Portion Stormwater Utilitv Fund Pursuant to certain Master lease Agreements, the CitY has entered into a Lease Purchase Agreements for the purchase of street sweeping equipment for use by the operating division of the Stormwater UtilitY Fund, providing for 20 quarterly payments of $9,135. The COSt of the automotive equipment at the inception of the lease was $159,770 with interest imputed thereon of $22,865, with an effective rate of 6.41 %. Less ,Current Portion of Long-Term Debt Long-Term Debt, Excluding Current Panioo , { 144,377 29.0;U 115.346 o 8-41 q'B -oq ~ CITY OF CLEARWATER. FLORIDA NOTES TO FlNANClAl STATEMENTS SEPTEMBER aQ. '996 Yacht Basin and Marina 5% UncolJatorallzed Joan payable to the General Fund; $15.000 of the advance Is Icheduled for r~payment during the following fiscal year. Pool LOin Agreement with First Florida Governmental Financing Commission authorized by the City Commission on July 2. 1987 through adoption of Ordinance 4437-87; provides for repayment of principal In annual Installments ranging from $40,000 to $50,000 from July 1, 1992 to July 1, 1997; interest on Installments ranges from 6.15% to 6.70% and is payable semiannualfy; CItY la further obligated to pay certain additional payments, including its proportionate share of the feea of the Commission as well as those at the Trustee and the Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds issued bV the Commission to provide the funds for making the pool loanl, and In addition all fees and expenses of the Commission or Trustee that rerate to this Loan Agreement; collateralized by non-ad valorem revenues or other legally available funds of the City. Looan was obtained to finance the Seminole Boat launch dredging anli the renovation of the Marina Building (also finances Improvements to rElal property and acquisition of equipment unrelated to the Marina Fund); net of unamortized discount and issu& costs of $154. 15,324 ........, ..~if.J lesl Current Portion of Long-Term Debt long-Term Debt, Excluding Current Portion Parkina System Public Service Tax and Bridge Revenue Bonds, Series 1985: 43.98% and 34.43% of the serial bonds and term bondst respectively, outstanding after partial defeaseance on September 27. 1995. net of discount and issue costs (Parking Fund share only) of $17,166. The remainder of this issue is reflected in the General Long Term Debt Account Group. The bonds have serial maturities ranging from $350,000 at 8.3% due December 31, 1996 to $415,000 at 8.75% dUll December 31, 1998, and term bonds totaling $550.000 at 9.125% due Oecembflr 1. 2005. Loss Current Portion of long-Term Debt long-Term Debt, Excluding Current Ponion Cash has been restricted and reserves established pursuant to the ordinancos authorizing the Public Service Tax and Bridge Revenue Bonds. Amounts restricted are in compliance with the ordinances. 49.8ll 65,171 64.847 324 676,045 153.26~ 522.781 I J p-42 qS -0<"7 ~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 I ~araDe Pursuant to certain Master Lease Agreements, the CitY has entered Into Loase Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating divisions of the City. These agreements provide for 20 quarterlv payments ranging In amount from $1,335 to $54,854. The cost of the equipment at the inception of the leases was $8,398,707 with interost imputed thereon of $1,232,035, the effective ratos ranging from 5.035% to 6.59%. 4,526,066 Pool Loan Agreement with First Aorida Governmental Financing Commission authorized by the City Commission on July 2, 1987 through adOPtion of Ordinance 4437.87j provides for repayment of principal of $ 650,000 on July 1, 1997: Interest at 6.70% and is payable semiannually; City Is further obligated to pay certain additional payments, including Its proportionate share of the fees of the Commission as well as those of the Trustee and tho Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds Issued by the Commission to provide the funds for making the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this loan Agreement: collateralized by non-ad valorem revenues or other legally available funds of the City. Loan was obtained to finance the construction of a radio communications system for use by all City Departments, Including two radio towers, satellite and microwave receivers, and radios (also finances improvements to real property and acquisition of equipment unrelated to the Garage Fund); net of unamortized discount and issue costs of $2,109. Less Current Portion of Long-Term Debt 647.891 6.173,957 2.207.109 2.966.848 ~..') \'r:-....- Long-Term Debt, Excluding Current Portion Administrative S:ervices Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating divisions of the Administrative Services Fund. These agreements provide for either 20 or 28 quarterly payments ranging in amount from $657 to $48,611. The cost of the equipment at the inception of the leases was $2,811,758 with interest Imputed thereon of $431,115, the effective rates ranging from 5.03% to 8.189%. Less Current Portion of long-Term Debt Long-Term Debt, Excluding Current Portion 1,952,920 394.825 , .558.095 ....) 8-43 Q<t/o9 . .1,' .....,.. '" ..f. ..;.......,' ~..;- ..~.....~ ::.',.; ..'''''': ' " .-.~~.~:' '.~,., .' . ~ ." "< ;:.;. ',';i." ':',1': )/','ii r:i.\,~", ,', ',' ': " ',', " , :'. ,,' ./,:'::: .:' '"r. · : ~ :":<::'~:<"'::::.,:'~:\:....:::.'" .:: ':.~~ ,::;,';:, ,">;>: ':~:'~'\'t~//~ ~:;. .:';:';':>'.~','~"<:~>:,7:i<::;~:::: :::. '. .,.:.;: y~;/..':'~:",~,/,:::::'.:~~/\.~";:~~',(~::', ':"~"::':,':>>:.' .:'; ~;'., '";. ,. .. . ~ ,~.J .; c _~ ..' .:.. _'. . \ . ~::' ~ : ~ ", ..... It Ow :,..: .) .... ,,' CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. , 996 'I') ....~....~ Centrallnsuranl;Q Pursuant to a Master Lease Agreement, the Cjty has entered into a lease Purchase Agreement for the purchase of equipment for use by the Central Insurance Fund, providing for 20 quarterly payments of $1,201 commencing March 31, 1995; the cost of the equipment at the incePtion of the lease Agreement was $20,897 with interest imputed thereon of $3,115, an effective rate of 6.0386%. 14,076 LesD Current Portion of Long~Term Debt 4.043 Long~Term Debt. Excluding Current Portion 10.033: TOTAL PROPRIETARY FUNDS ~ LONG.TERM DEBT, EXCLUDiNG CURRENT PORTION 110.091.104 TOTAL LONG~TERM DEBT, ALL FUNDS EXCLUDING CURRENT PORTION FOR PROPRIETARY FUNDS $131.1 Q.4.65Q The official statements and commission resorutlons authorizing the issuance ot the revenue bonds described above contain certain restrictive covenants. The City has covenanted that, on a monthly . basis, it will deposit speCified amounts derived from specific revenue sources Into accounts and funds established by tho resolutions. The deposits Into these accounts and funds are used to repay principal and interest coming due on the bonds and to provide sinking funds estabUshed for the purpose of retiring term bonds due in future years. Certain of the covenants also require maintenance of specified coverage ratios. The City is in compliance with bond covenants. Noto 12F) Advance Refunding of Bondi In prior fiscal years, the City entered into various advance refunding transactions related to certain of Its bonded debt. A portion of the proceeds of the refunding bond issues was placed in trust and used to purchase securities of the United States Government and related agencies at various Interest rates and maturities sufficient to meet all debt service requirements of the refunded debt, of whIch $80,420.000 was outstandIng at Septembor 30, 1996, all of which rerate to enterprise funds. These assets are administered by trustees and are restricted to use for retirement of the refunded dabt. The liabilitY for tho refunded bonds and the related securities and escrow accounts are not included in tho accompanying financial statements as the City defeased its obligation for payment of the refunded bonded debt upon completion of the refunding transactions. Bond issues which have been rofundad and arB payable from escrow accounts are: Amount OutstandIng at September M 1QM S 18,295.000 26,635,000 4,575,000 2,850,000 1.160,000 Water Iilnd Sewer Revenue Bond, Series 19689 Water and SeYler Revenue Bond, Series 1965A utility Revenue Certificates, 1975 utility Revenue Certiflcates. 1972 Special Obligation Bonds, Series 1978A I i &-44 qg -09 '. .' f', . : ~~ ',,;1 "1 /:i,~'"../", .. . \...~.., . .;....,.1 :,,:: r _,:~:..._t....,:..:~;,~.'".""'.'.:'I~L"'I..,.<.,.'.,,.,.... ~ \.i":~1 ..... ,.. .ll.'.....:..::.~.;..:..~..I:.~.f ." , . '1 . ~ .'l.... ,.... t.' \'::"1' ,:,~:>':;""".;::...."~;."""""" .'.. o : " . I :, I ~.'. .". . ..' ." . 0 '. ' o. . . . ., '.:.~f'.':'.~'.,.., .~.~. "H~.. .'o~;":,'; ,",', ~......'\.. . . -' .... ....\... ',"" " ".,' ,'. ~ '.::...... ~'.~.. ...., 'I .I:....~~.'.,' ~..~>. 'r.-., ....f.....~(~..... ..\.,"..;'...., I", '.. ..~ .,. . 0,.., ,,0' . .~, ..... """'.' ,,', ". .~ 0'" "', '" ..',.," "'~::'.:'" :, · >. ...., ':', >.:,',.' '.\ ':;',,7 ,;;~ . ",,:(:,;,'., ;:;)1;: t:'{:~::::::iY::"::~ U'::,' ~:.i;;,' "','.' :..,,: : .....; " :::,>, :':' " '.,': ::',J,',:t<:::,:<i::,:.~,t>..:/~ '.. ;',:":;: ::'; :;:",:': ',)' . I.' " ,. T. .~'. '\ .. ., '/ ~ . . . ~ { . . ! '. ~ CITY OF CLEA~WATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996 I Utility R....enu. Bendl, Series 1978 UtI11t1et Tax and Bridge Revenue Bonds, Serle, 1977 Public Service Tax Ind Bridge Revenue Bends, Series 1985 UtlIltIes Tax Bonds, Serles 1977 20,895,000 2,655,000 975,000 2,380,000 $ 80,420,000 Note C2G) Long-Term Debt, Debt SeMee Fund. Debt Service Reserves. General Lona- Term Debt The reserves have boen established In compliance with the ordinances authorizing the debt and are equar to the amounts required by the ordinances. Reserves established to provide for the next succeeding maturities of principal and interest are as follows: Genef1l1 Obligation Bonds, 1978 Issue Improwment Revenue Bonds, Series 1995 Indebtedness of the Community Redevelopment Agency (Includes Tax Inctomant IInd Lease Revenue Bonds, Series 1986 and Tax Increment ReVenue Sond., Series 1987) . Public Service Tax Ind Bridge Revenue Bonds, PrincIpal S 75,000 96,667 Interest S 5,107 100,605 ...~ . ....,1:t;J 170,000 163,947 $ 505,614 149,300 29,197 $ 284.209 A contingency reserve has been established pursuant to the authorizing bond ordinance to meet principal and interest requirements for the Public Service Tax and Bridge Revenue Bonds should other resources be unavailable. The General Long-Term Debt panion of this reserve Is $274,461 as of September 30, 1996. A contingency reserve has been established pursuant to the authori2ing bond ordinance to maintain a sum equal to the Maximum Bond Service Requirement coming due on the 1986 Bonds, during any ensuring Bond Year. The reserve balance at September 30, 1996 is $257,450, which meets this requirement. A Debt Service Reserve Account has also been established pursuant to the Loan Pool Agreement with Rrst Rorida Governmental F:nancing Commission to pay the City's proportionate share of the principal and interest requirements of the underlying revenue bonds should an insufficiency of funds exist due to the City's failure to make a loan repayment in the fun amount or because of an event of default under the Loan Pool Agreement. The General Long-Term Oebt reserve balance at September 3D, 1996 1$ $43,230, which represents 6.6% of the total required reserve account. The remaining balance of the required reserve (93.4% of the total) is reflected in the Solid Waste, Yacht Basin & Marina, and Garage Proprietary Funds. Note (3) Restricted Assets, Proprietary Funds Note C3AJ Water end Sewer Utility Fund Assets In the Water and Sewer Utility Fund resUiCtfld for construction consist of the following: \....) 8.45 Qg-09 -.v-l'UliIf ~ .... ~ CllY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Proceed. of Utility Revenue Bonds. 1978 Series. the use of which Is restricted to construction of water and sewer Improvements authorized by the rolevant ordinance; assets remaining at September 30, 1996 Ire: Equity in Pooled Cash and Investments Water Improvement charges. the use of which is restricted by the ordinance authorizing the collection of such charges to the construction of additions and improvemonts to the water system; assets remaining at September 30, 1996 .re: $ 904,989 Equity in Pooled Cash and Investments Due from Other Funds Sewer Improvement charges, the use of which is restricted by the ordinance authorizing the collection of such charges to the construction of additions and improvements to the sewer system; assets remaining at September 30, 1996 are: 531,673 123,610 Equity in Poored Cash and rnvestments Due from Other Funds Assets of the Water and Sewer Utlllty Fund restricted under the provisions of the ordinance. authorizing the Issuance of Water and Sewer Revenue Bonds consisted of the fonawing at September 30, 1996 1,994,332 666,187 ~) 11,594,855 2.865,275 86, 196 4A33,721 2.491.891 $25.692.72Q Assets of the Water and Sewer Utility Fund representing Customers' Deposits and therefore restricted, amounted to $2,046,783 at September 30, 1996 consisting entirely of Equity in Pooled Cash and Investments. . Water and Sewer l1evenue Bonds Debt Service: Equity in Pooled Cash and Investments Investments [U.S. Government Socurities) Accrued Interest Receivable on Investments Water 8n~ Sewer Revenue Bonds Renewals and Reolacements: Equity in Pooled Cash and Investments Due 'from Other Funds Nota (38) GDI Utility Fund Assets In the Gas Utility Fund restricted under the provisions of the ordinance authorizing the Issuance of revenue bonds consisted of the following at September 30, 1996: Gas Svstem Revenue Bonds Debt Service: Equity In Pooled Cash and Investments investments (U.S. Government Securities) Interest Receivable $1.520,702 450,653 16.295 / v 8-46 crD-oCf APPENDIX A ~ GENERAL INFORMATION RELA TING TO THE CITY OF CLEARWATER, FLORIDA Location The City of Clearwater (the IICity"). the county seat of Pinellas County (the fifth most populous county in Florida), is geographically located in the middle of the west coast of Florida on the Gulf of Mexico. It is situated approximately 22 miles west of Tampa and 16 miles north of St. Petersburg. Standing on the highest coastal elevation of the State, the City limits comprise approximately 26.4 square miles ofland and 8.57 square miles of waterways and lakes. Clearwater Beach, a corporate part of the City, is a beach community connected to the mainland by Memorial Causeway, a four-lane, toll-free drive stretching almost two miles across the Intracoastal Waterway. Business on Clearwater Beach is mainly tourist oriented, with hotels, motels and gift shops. Many fine homes, apartments and condominiums offer pleasant, semi-tropical island accommodations to permanent residents and winter and summer visitors. . History The area now known.as Clearwater was first explored in 1528 by Panfile de Narvaez, a ~~ Spanish explorer who encountered a large tribe of Indians. which his army drove out. The Indians '~....~J recaptured their territory and held it until the Seminole Wars of 1835-42. The Indians who inhabited this area are said to have called it "Pocotopaug," meaning "clear water,1I for the many springs of clear, fresh water that bubbled along the shore and even below the waterline at low tide. Settlers began moving into the area around the time of the Seminole Wars. After the wars ended, the territory was opened by the federal government for homesteading under the Anned Occupation Act. The first land title was granted in 1842. The early settlement, named "Clear Water Harbor," was incorporated in 1897. "Clear Water" later became one word and "Harbor" was dropped in 1906 when Pinellas County was created by an act of the State Legislature. In May 1911, Clearwater became the County Seat and Clearwater was chartered as a municipality on May 27, 1915. Government and Administration Clearwater has a commission-city manager form of government. Four commissioners and a mayor-commissioner are elected at large to serve overlapping three~year terms. They appoint the city manager and the city attorney. All other administrative and professional positions are appointed by the city manager in accordance with the City's Civil Service System. ,...) A-I q<3-09 I, ~. .: . . ,i . f . ~ - . ." .,.....'l~ t~ "." "":::;';:"" .H~'I... -'. .\' .~t.:.':': , ~:~. . c."'" . . ~~ ' -10 of ~ ; . I . " ..;' '.: >..' ,..c,',..., ,.:." " . .... .j',: ......, ';;'.',';' /::...:,,";.~ ...,...., 'I'.,',e.:_ ~'\"'~'~'.~'.,'>.'~..:>~~:'~'~.c":...~i.~;:>+~;'" \... ':.0:..... "", ...J:~":." "c- '. . ',' "'~:'" ~':"l'.. t\"' : ~....+." .,~.., :".. '.:. ....,'~.,:'." .. " . ..' '. . .." '.' I. '..:~~::, I .' '. {" ( '\. ,'... '., .."; , ',. ;~1'1'.' '/. \'0.1 '::.+'~"" ~';/ . : '.',,>:'. . ....~:' :.~:, ......... "~/' ~~ ,'..:.~'" :,:,::< '>,";' 't:. ':C' , ""'~ ':..' ,; '.' :~~ '.., "::' ~'/. ~;'J".':. ,:. \'~ ~ :..', '.>.'. '~~::,:'L. : ':" ':'~":":'.:~f ::'.:':;:. :,,:/.~ ..','.,....: :.' ,> ...\~:..:: '., ','. '. ~>,".:.' ::.,'.':' ",' ,.:' -: ". .':: .. ...> .:'., ,,'::. ?:." ,. " ." ., .~'. \ . ~ ."; .' ......::\~..;.,.:~' -:- .'~ <.. I'. :c,'/lI. . ~ " ~ ., '. ". :;:,.':':::.': ;:/~'.> \. ,+", " ., .r,. 'j 'j. t . .....:. . ,....c \... " ;:.t " .' , .. 'c I' . . ~. > . ~ .. .' . .'. , -.. . ;. ~. ....~ .. ^ I"' .' , . ,', ~ .''';';'.J~ .........Tcf-1. ;~ J ~ .~~. . ";.. J.'! r:"<.'; '::':. T\ ~r . .1--. .~ ..... , ~ .. '1 ~'" 'l.'.' ~. . .' . c,' . -', v- ".. ~ "l ~ . . The City has approximately 1,660 employees, covered by the City's Civil Service law relating to recruitment, promotion, evaluation and discipline based on merit principles. Four employee unions represent the City's civil labor force: two units of the Fraternal Order of Police; one of the International Association of Fire Fighters; and one from the Communications Workers of America. Transportation Pinellas County and Clearwater are served by three major causeways and bridges over Tampa . Bay, by U.S. 19 and 1-275 to the north and south, by 1-4 and U.S. 60 to the east. State Roads 590, 686 and 55 also afford access to the City. Tampa International Airport, located approximately twenty miles from downtown Cleanvater, provides air travel access with approximately 260 national and international flights daily. Limousine and taxi service to and from the airport is available from Cleanvater and throughout Pinellas County. St. Petersburg/Clearwater International Airport, five miles from downtown Cleanvater, offers regularly scheduled passenger service and charter and special group flights, on a more limited basis to both domestic and foreign destinations, particularly to Canada, Mexico, and Central and South America. The Executive Airpark, which is slightly over a mite from the downtown business section, provides service and maintenance for private plane owners. The airport has one 3,000' foot hard- surface runway and facilities for visiting and locally based planes. The Port of Tampa (22 miles to the east) is the closest deep water port. The port is serviced by a variety of steamship agents and operators. The United States Coast Guard maintains an air station at the St. Petersburg/Clearwater International Airport, and a search and sea rescue cutter station on Clearwater Harbor opposite Sand Key. Gulf Coast Motor Lines provides service daily between Clearwater, St. Petersburg and Tampa and makes connections with Greyhound and Trailways Bus Lines in Tampa. Scenic tours are available via Gray Line out of Clearwater and St. Petersburg, and both Gray Line and Gulf Coast have buses for charter. PineUas Suncoast Transit System maintains 54 routes in 19 municipalities in Pinellas County. Utilities, Public Service and Community Facilities The City owns and operates its own water and wastewater collection systems. Water is obtained from 17 deep weUs owned and operated by the City (approximately 20M25%) and from wholesale purchases from the Pinellas County Water System (approximately 75-80%). Total daily average is approximately 29 million gallons per day. The wastewater collection program provides for the transmission of wastewater through the City's underground sewer mains. collectors and interceptor lines and for the maintenance, repair and replacement of322 miles of sanitary sewer lines. The Department of Public Works maintains 302 miles of paved streets, 11 miles of unpaved streets, approximately 120 miles of stonn sewer mains, and approximately 322 mites of sanitary sewer mains, A-2 4't-oq \', ., ~ 'J. I'... . . .~. . ,'.t",", .....~: . ';> /: ~ " ,; 'j" . . . "",>,~:::':i:'-,~ .~....,.'.,..' ;~.:: . -. . ,.'>:.. .'~ !.:'..~, '.;' "':. .",.l " .'.:'." "~'.'.' ~.I~'LO'-:.:.'4.'.:I~i ."" ,.,':';'~'.:~~',:" .,", " ."".~ . .j,~.;. . :"~;..~.", ;'. . . .'" . " .' ;.' .'., . " , '. ',. ",";.::""". '-".: .... , . "';..' ,.....,.. ....... , .....'e.: .;. '."." ..." ,:'.::,:. ,,'. "'d' ",,->. '.': " ", . ,',: " '" ':",.J ~ '.'. ',: ; c.',.; :;..;,.~:'::<' :'.' ',:~\,,: ::',;:, ;,' ';'!I~n,':?:':f.1i"::: ,', : '," ;'::,\:{i;;;:" , '"~I , ,: " '. ':.,.':,:':',~.:.,~ :.'....<>:.....'..:,':,,:..::t..I. .,<.:..:."':.:::r.:.:...., :.'.'~: .'."...7r,,: ".::~.~ ".',:;'., '..:,' 'c' ",' '::.":~' ',:..":: ," ' . ".,",... , .', . ~, . " . [ ,""" . ,~;, . - ',~. .:' . . ' -,<~'.. .. '. .';, . ::.'.: .':~~,' J,">,:;\'... .'~.<;.: ~ ... '.. ::.;'." ..:"'.' ;. " ::! ',.....J.:'... ....:~:::. ~<. ~ ,',:''<. .... ':,' .....: .. . '>: . " , ' ".'.: . ..... :,. :,r ....., ..., - :.. !, ~',.:.' ..; , . . . :'~';"'.. ; . . , ,'. .. .; ~ ~ ,a,. ~ Electric power is provided by Florida Power Corporation aild telephone service is provided by General Telephone Company. Time Wainer provides cable television service under a franchise with the City. Local editions of the daily St. Petersburg Times and The Tampa Tribune, plus weekly newspapers from adjacent Dunedin, Largo, Seminole and Clearwater Beach are widely distributed. nle Clearwater Public Library System consists of a main library and four branches which are spread evenly throughout the community for easy access. The City offers over 42 acres of public beach front, parks, playgrounds, atWetic courts and fields, pools, a 7,350 seat baseball and softball stadium, golf course. civic and recreational centers, 5.2 miles of recreational paths, boat ramps and a 210 slip yacht basin and marina. The Philadelphia Phillies conduct spring training at the municipal baseball stadium and have a long-term contract for farm club training on Clearwater's specially constructed facilities during the Winter Instructional League Program. Clearwater is the home of the Clearwater Bombers, a national amateur fastpitch softball team. Tourism The State Division of Tourism reported 43,000,000 tourists came to Florida during 1996 setting a new record high and an increase of 4.2% over 1995. Approximately 4,100,000 of them visited the Clearwater/St. Petersburg area, a 3.1% increase over 1995. Clearwater's Fun 'N Sun Festival each spring attracts thousands of visitors. Education ~~..."\ .'r.:::1 The Pinellas County School System operates a total of 142 schools comprising elementary through high school, exceptional, alternative and vocational schools within the County. In the fall of 1996 there were approximately 104,665 students enrolled in kindergarten through the 12th grade and a projection of 107,040 students for the 1997-1998 school year. Private schools and academies are also located within or near the City limits. The Pinellas County School System offers vocational and adult education at facilities in or adjacent to the City. In addition, St. Petersburg Junior College has a Clearwater campus. Eckerd College in St. Petersburg, Beacon College in Largo, Stetson University College of Law in Guffport, the University of South Florida and the University of Tampa in Tampa offer nearby cotlege and post-graduate education. Industry, Commerce and Labor Light, clean industrj is encouraged in Clearwater. In 1957, the City of Clearwater developed a 100 acre industrial park adjacent to the Clearwater Ahpark (Executive Airport) and to the CSX Transportation Company. There is also a privately owned. 35 acre industrial park. Large industries located near Cleatwater include Honeywell, General Electric, UNISYS, Concept and Hercules Defense Electronics Systems, Inc. v A-3 q~ -09 .' , 110 . '"'. . c . ~. t . Pension Plan . ~ The Employees' Pension Plan and the Fireman's Pension Plan are self-administered by the City. City contributions for fiscal year 1995-1996 were $2,867,835 to the Employees' Plan and $867,569 . to the Fireman's Plan, and were in accordance with actuariafly determined funding requirements. , ' ..' In addition, supplemental pensions exist for certified Police and Fire employees; funded solely from excise taxes on certain insurance premiums covering property in Clearwater, collected by the State and remitted to the City. Both plans require benefits to be adjusted to equal funds assets provided by. the defined contributions. [Remainder of page int~ntiona1ty left blank] '0 ,. ". .i , ' . ~! . " '. :)-. t-,.,~. ( A-4 qg-;oq "'~~4~""",",, ~.:c I;;,' \j<'''Ji.1v ~1 ,,'.~l>f"'''''''~~'''' ~"" f-.... ~"-"...... .... d...... . ~~ .o.r .<,. .... ~~... ..~" ! ...~ . . ",,~ ;\~.w h'.~ . " ,'.,' -~ - ~ Demographic Information Last Ten Fiscal Years (a) (b) (c) (d) (e) Permanent Per Capita Median School Unemployment Yw Population Income Ag(L. Enrollment Rate (%) 1987 99.124 17.947 Not avail. 10.797 5.0% 1988 100,202 19,317 Not avail. 10,922 4.7 1989 101,082 21.255 Not avail. 10,796 5.3 1990 98,784 21,881 Not avail. 10,732 4.8 1991 99,475 22.059 42.1 11,572 6.1 1992 100,166 22,958 42.3 11 ,921 504 1993 100,857 24,470 42.3 11,584 6.1 1994 101,548 Not avail. 42.9 10,043 5.5 1995 102,590 22,789 42.2 10,284 4.8 1996 103,326 24,696 42.1 11,906 4.2 Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending , . September 30, 1996. .~"1Jo,\ '''''---r.d (a) 1987~1989, U.S. Bureau of Census estimate~ 1990, Census~ 1991-1993, University of Florida, Bureau of Economic and Business Research~ 1994. U.S. Bureau of Census estimate; 1995-96, University of Florida, Bureau of Economic and Business Research. (b) Data is for Pinellas County, but should also approximate Clearwater levels. 1987-1989, U.S. Department of Commerce, Bureau of Economic Analysis~ 1990-1994, Florida Trend Magazine; 1995-1996, University of Florida, Bureau of Economic and Business Research, Florida Statistical Abstract. (c) 'Pinellas County level data, but should also approximate Clearwater levels. 1991-1992, U.S. Bureau of the Census; 1993, 81. Petersburg Times Research Bureau; 1994, Sales and Marketing . Management, Swvey of Buying Power; 1995~ 1996, University of Florida, Bureau of Economic and Business Research, Florida Statistical Abstract. (d) 1987-1990, Clearwater Planning Department population pro rata estimate of Pine lias County School Board County level data for public schools; 1991-1994, Pinellas County School Board; 1995-1996, University of Florida, Bureau of Economic and Business Research. Florida Statistical Abstract. (e) Data is for Tampa/St. Petersburg MSA. Source of data is the Florida Bureau of Labor Market Information. NOTE: Data is for an unspecified point in each year, nat specifically September 30. v A-5 qg -oq . + .:><. t' . ..., ... ~: . .. ~ - - ,~ '; 'f Property Values, Construction, and Bank Deposits Last Ten Fiscal Years /~ ~-:J Commercial Construction Residential Construction fiscal Year Number of Number of Year Permits Value Permits Value 1987 ' 626 $42,649,623 1,378 $46,939,249 1988 731 45,510,427 1,385 42,150,294 1989 705 121,554,308 1,127 37,140,105 1990 782 47,382,330 1,018 74,169,490 1991 626 24,250,916 1,260 34,937,357 1992 .557 32,765,807 1,137 25,956,314 . 1993 1,693. 42,051,081 3,885 29,296,168 1994 1,831 37,164,437 3,882 49,950,413 ,1995 . 1,775 77,486,099 3,747 53,614,754 1996 1,898 42,360,262 4,224 26,854,040 Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending September 30, 1996. (a) Includes institutions, churches, seawalls, pools and non-valued building permits. (b) Pi~ellas County Property Appraiser, values listed are for years of collections. (c) Includes balances in commercial, savings, savings and loan, and building and loan banking institutions for Pinellas County. Data from the Florida Bankers Association Branch Deposit Report of Florida Bank and Thrift Institutions. ,0 A~6 qg -09 '....,T... t~ .......~ ,.~...~'", ."'. '.>t~j . " ."~ . T '"'1' Miscellaneous Construction (a) 'J: ,'. Number of "Total Assessed Bank Deposits (c) , " Permits Value Property Value (b) (in thousand&) ,..... :." ... $4,396,348,982 ..... . 4,454 ' $ 9,198,587 $13,898,322 , . '" ., 3,411 13,219,492 4,702,670,638 14,807,126 > " 4,326 22,579,744 4,890,327,543 15,440,681 ~. . ~',. ., ~ ',' . 4,991 16,983,323 5,049,539,803 ' 15,600,212 , 'jT.' . \ '. . '5,906 17,452,664 . 5,356,661,219 15,285,415 ,.... +. ~: <. 5,940' 18,020,294 5,475,721,772 14,360,597 .' . , , " 6,799 ' 20,113,175 5,505,360,476 13,853,289 .. 6,063 ' 17,922,023 5,572,851,512 13,274,660 :; ~ ' ,,' 6,827 ' 28,843,480 5,641,202,905 13,362,164 " " ., " " ' ' 6,825 24,898,425 5,733,193,387' .'12,786,549 , :; :,::): ," " ~. , " , , t'- 'I... :",0 , . ~ ' . A-7 CJ~'-o9 ~~~iJ~.~flot,,~t~~"""'~"'''-.'''-'' .-~:...... .. ~ P, ......~...~.............._q~,.. ~'""..~..._'~...~.... "......~.,._...~."".. .'. ~ ~ B ., "~'~ .~1Io..n.'..:I'I~.' ~ . "., > ~--' ~. '" . .' " .' .l~ ,~\ \""".~,I 2) '. . :.~ i iif~'" , ~.' ""<<" + ' ..." l'l ." I ~ L I . ~ ~I .!:. I.. " t.,' .., .. '.. ". ~' ..~, ; . ~1Ii'I till "'CS 'C Q ~ a: Gol - till f; till Gol' a - Q .c U III c:: Q .... ... (IS = ~ ~ G.l ,Co e Co - = =- ... u -< "Cl G.l - (IS e .- ... 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(" ' ".::.: '., '.:..::': ~...;::; >"""~:;> ;:,', :<><:'" . ':". ' "'. '". .::.'" ~'~,.'>' ' " ". :'.' . ':" .,..: :','.: I'~:':>:' '. . .\~~.:}t.J :,:': '., . _' . ;:;:" .",'i. ,.,:.,":.... .., ;.: .....:.;;.:':<:(.~.:'.:'~/:_:.:~.<;.(.:~:.:~ :....: :.. ' >- :'.':':" '''' ;-; ....;: \.: ........ ...:. ..: ;;. :,,;...}/::,t.~:;:\:;..;(:)'~:}'.;t2r: ':<Ai!':: :': >::, "::"~;,),/<:~} ~;. ...; ;.::: ;,;;.. ." '::';.i:.'~:.;r~..;:fu:~:;;. :~::;. ,;./:. . . .~ :>t~~~:Y-"'.;:': ::?:. ." ":~r" :., ').. ~ ,\. '. . " .' . , " ,,0 IJ;l lI'i ~ ~ 0\ ~ ~ ~ "':t' ~ 0\ ~ q ~ 2 ~ ~ = ~ ~ ~ ~S.~_~g~~*~ ?i ~ ~ ~ ~ ~ ~ ~ ~ ~ * -- M cO 0\ N oq, 8 ~ 0\ a; C\ ~ r--. 00 0\ ~ M o - ~;g ~ g '" '" M - '" - a: a: 0\ 0\ C\ 0\ gg ~ 0\ l'"'I oC M ~ ~ ~ f"-.- - '-"t ~ _ 0 M NON ~ r--. r- l'"'I r- '<1' '" M. 00 ClO - IJ;l O. 0\'- -.:ivS~~O\ o '<1' 00 ~ ~ '<1' '<2' ..,... N.. r-:. -. f"-", tn.. C'... 0: ..... ...... - ---- -- --- _ N N M M N N M ~ ~ 8 ~ M MOM '" ~ DO IJ;l 00 - ~ ~ ~ N M - M N - ~ N ~ f"-. N ~ ~ ~ N 0\ ~ .,a r--: 0\ ori ~ 0\ 0\ tooi 0\ ~ f"-. ~.~ 0\ 0 C\ 9 ~ r- ~ -..... ~ r- N 00 C\ 0\ ~ cO 0\ '" o c\ 0\ r- 0 0\ <- cO 0\ 0\ 0\ N '" IJ;l 00 cO r--: 0\ 0\ o ~ 0\ 0\ 00 IJ;l 0\ C'\ o ~ a: 0\ IJ;l r- l'"'I '" ~ ~ ~ ~ N - '" 0 ~ N M '" 0\ ~ 0\ - ~ r- ~ M ~ ~ - ~ ~ ~ M ori 00 ~ ori ori ~ ~ oC ~ '<2' ~ r- '<2' r- '<2' ~ ~ r- ~ 00 00 ~ ~ q 0\ -- ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ _ _ _ N N N N N M ~ M r- QO ~ r- 0 0\ ~ M ~ r-. 00000 M.'<2'\O.-ooC\'o:2' "':t' rri 0\ 06 ..0 0\ oti ~ g; ~ ro ~.~_~_ ~~QO"~NM ~ '<1' 0 0 '<l" \0 M t-"" - 1"--.... - 00 ...... QO LTl ~ N.... -.:t'"", r-.. - - - N N M - N r- OO 0\ - 00 ~ 0\ 0\ 00 0\ - ~ 0\ - N ~ 0\ 0\ 0\ 0\ 0\ 0\ - - ~ 0\ 0\ ~ 0\ 0'1 - '<1' 0\ 0\ - A-9 .l'lI'V-~ _Ill! - , \ ,~ Property Tax Rates - All Direct and Overlapping Governments (Per $1,000 of Assessed Value) Last Ten Fiscal Years Downtown CounlY Emergency Fiscal Dcvelop- School Transit Medical ..Ym. ClIl ~ ...8J2an1. ~ J2i.m:k1 Services Qtb.u Imal 1987 4.4558 1.000 7.5020 4.258 . .4536 ,931 .7013 19.JD17 1988 5.??oo 1,000 7.3370 4.915 .4987 .931 I. 2933 20.9750 1989 5. I ()(X) .250 7.6500 4.909 .5135 .931 1.3775 20.7310 1990 5.1000 .860 8.5330 5.280 .5743 1.060 .9617 22.3690 1991 5.2037 1.000 8.7660 5.234 .5743 .700 1.0964 22.5744 1992 5.1158 1.000 8.6260 5.495 .5893. .700 1.1560 22.6821 1993 5.1158 1.000 9.??oo 5.417 .5893 .850 1.1820 23.1541 1994 5. t 158 1.000 9.0820 5.429 .6697 .872 1.4221 23.5906 1995 5.1158 1,000 9.3590 5.585 .6697 .806 1.6308 24.1663 1996 5.1158 1.000 . 9.3290 5.140 .6697 .752 1.6561(b) 24.0366 . Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending Scptl:1Tlber 3D, 1996. (ot) A separalC tldng district established by refcrendum which affects only downtown properties. (b) OIher includes PincILu Coon!)' Planning Council (.0214); Juvenile Welfare Board (.8117); SW Florida Water Management District (,4220); Pinellas AnclolC River Basin (.4010). I 1 ] I 1 \ . j I I ! '.0, [Remainder of page intentionally left blank] , I C:J A-to I, , qg /09 .' ..." '~~1"' .~. .:':'~:4:,..J ,..+t....~.. l" ~. ~ '. ~::~, T '.~ . . ~.., 1: ~,t t::~:>:::',~.'. ,~ . . ',/ .i< t' , ':1;-, : (.. ~ lf~' . '. +::.- '. T'I> J.~J, c ,.-\.-4 .. ' ..... ,'; . , .. ~ l' ' L' ;.... . .. oj. . '. ..: .... .,. I. .:: .' .' ;~ . ~.. .,T . ' . . . .; :.c . . . . .' ~ '. . . ~. . .. . t . _ .,' I.. .J:,'.'. I'" ',: "i~~;,,:/," ... :i. .... '.',~: ~:~(nr),"!\:\:;;~:.;'".;?;:';',~":\.:; :'.~.' ,~::' .'. "., ,"; f .. ';:] .. - . ,<'.'..::~.:.~:':.:'~:.,>;\.,:.':':,~ ," :.;'~'.:': .' ..:...~~.., ." :'~::.' '..:,::..::~.'::"::";::'\';:':.::;~:::~:,'.,:.~,';.. .', '. ".. . ~ ;,' , , . ; . i ~. . . ' .~. , '. . ~. :.;' ........ '., ..~~._.....~~~: + I... ~.". .. +. . . ~. .... . .c. ': " , . .; ~.... ,: :~I :. . '. ..., . '~;., .~.j .'1' ::......~.'..~ ..~~ . .,,1; ...,' ,~' '. . '~. .'. ,'. .,.6 > ':':.', .:' I . '.: .. .c ,_.. .' . "T" .. J . ", .~. . \. c . L L .r 1<<' " \ .'. 'r . . ." ,~-:,". ~.. f' ~.~'''.' ....:"~.4.> ..<':1-'..~~..,T~.~."'.;~'::.,~..:;..'."'.""., ,', ~.,.;.'>~.." . ,...:..-....'...... """,;,';' . ."........,.,;:.",....:>:;. ..... . .. ~. ... , . . -' '. ::'~. ~. ". '. . ~.' ..:.~...:. ','... .. >:. '." .. :<., ~ :; ~.:~ . .,<T. <';';'" ....:,y':...'.l. -:,>;::'~'.::i::':" , '"'''' ',. '. ,.... : . ~ .' :.; . ::.'. , '. f.'.'" ~ c j' . .... "," . .... ..~ ::." \ , ' . ~ .': . .~ . . .' '.' .i:' >."r. ,". ~. , .'. '!: ,\ .:., CT'"'+': , q .", . ..~ :'" ,,' ,~ Taxpayers ':, Bellwether Prop. LP Ltd. Holland Westshore. Inc. Taylor, John S. III Sand Key Association Ltd. WaImart Store, Inc. Regency Land Partnership H R E Properties Duff. And,rew R., Trustee Branch Sunset Association John Hancock Life Ins Co. Subtotal All Others Total ' Source: City of Clearwater, Florida Principal Taxpayers Year Ended' September 30, 1996 Type of Busines.s Shopping Center Shopping Center Landowner Hotel Shopping Center Adult Congregate Facility Shopping Center Hotel & Plaza Shopping Center Apartment Complex Assessed Value $ 75,664,400 60,389,900 31,493,600 19,212,400 18.181,800 17,857,700 14,473,300 14,400,500 14,545,000 13.500.Qilil 279,718,600 3.540.499.110 $3.820.217.71Q Percentage to Total Assessed Value 1.98% 1.58 0.82 0.50 0.48 0.47 0.38 0.38 0.38 ~ 7.32 92.68 100.00% City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 1996; Pinellas County Property Appraiser, 1995 tax rolls for 1996 collections. "":~. \ ',-, A-II qS-oq City of Clearwater, Florida ~ Ratio of Net General Bonded Debt to Taxable Assessed Value ." and Net Bonded Debt Per Capita Last Ten Fiscal Years Ratio of Net Net Taxable Net GeneraJ General Assessed General Bonded Debt Bonded Fiscal Value Bonded To Assessed Debt Year Population (000)( 1) Debt(2) Value Eer Capit(\ 1987 99,124 $3,395,306 $3,037,117 .09 30.64 1988 100,202 3,621,136 2,395,290 .07 23.90 1989. 101,082 3,742,237 1,723,137 .05 17.05 1990 98,784 3,856,684 1,036,234 .03 10.49 1991 99,612 4,124,564 567,950 .01 5.70 1992 99,856 4,179,582 452,779 .01 4.53 1993 100,857 4,188,105 348.478 .01 3.46 1994 101,548 4,181,314 242,700 .01 2.39 1995 102,590 4,186,108 133,597 .00 1.30 1996 103,326 4,252,433 21,598 .00 0.21 .:) Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period. ending September 30, 1996. (1) Values listed are for year of collections. (2) Gross general bonded debt less amounts on deposit in sinking funds or debt service funds. [Remainder of page intentionally left blank] / '.. -'\ V A-12 qg-D9 ~ - ~ ..'V""".......--- ~ .~ City of Clearwater, Florida Computation of Legal Debt Margin September 30, 1996' Assessed Valuation of Non-Exempt Real Est,ate(a) Times: Twenty Percent Limitation per City Charter Equals Legal Indebtedness Limitation $ 3,820,217,710 x .20 $ 764.043.542 Debt Subject to Indebtedness Limitation: Net Debt Less Sinking Subject to Gross Debt Fund Assets LimitatjQD General Obligation Bonds: " 1978 Series $ 355,000 $ 333,402 $ 21,598 Revenue Bonds: , 1985 Public Service Tax and Bridge Revenue Bonds. 1,695,001 775,011 919,990 .:) 1988 Water and Sewer Revenue Bonds 37,601.614 5,324.003 32,277,611 1993 Water and Sewer Revenue Bonds 47,170.000 8,183,500 38,986,500 . 1991 Gas System Revenue Bonds 7,290,000 742.280 6,547.720 1994A Gas System Revenue Bonds 8,110,000 1,035,595 7,074,405 1996A Gas System Revenue Bonds 8,815,000 5,417 8,809,583 . 1995 Improvement Revenue Bonds 10.580,000 197,272 10,382,728 1986 Community Redevelopment Agency Tax Increment and Lease Revenue Bonds 1,605,000 622.455 982,545 1987 Community Redevelopment Agency Tax Increment Revenue Bonds 165,000 165,000 -0- Notes, Mortgages and Contracts 11.382.786 657.475 10.725.311 Totals $134.769.401 $18.041.410 $116.727.991 Legal Indebtedness Margin $647.315.551 Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30, 1996. (a) Valuation listed is from 1995 tax year for 1996 collections. o'~ A-13 Cjg'09 ... ~. I ..',. . . , . I I ~ , . .- , (H ,t' .' . ~ .. . '. . ," ~ . I . ~ - . . ;. .,: .., ',' . . '. I ;::' "',:,>'~':'~'. ' ." .,~'".'.,'+:.:~~' :\........:~-~..... ", .~ .:_':.,'. ':':Jf~' ,," ....~':.. ...._ :'1"'~~~i."'.'~.':"":c" I:~I~":'" 'J'. ',', ...r.~...:~I>....c./...-.:..:"'.:";'.<:"" \; '; .' ,.<:,'. ,...l :,~.: ".' . .:.. ." d' ,'.. .,:".. ~';', .:, :, ; ~:.':'.:. :./ ":'::.',\< ". : ',:; .. . .... .... .,' .. 1 ,.. ','" '. .'oI"'.--J." '. . 'It ,~;_,_,,,)~ '.'. .'~:".'~~.'..~'~:":'."..'.',:':"":~>"X:r:'..':.......:.},..:':.:.:...'.'. '. "::.,<.,.../.<<....;..:-;':;.~'.'.~'<'....>..:',:;"':'.:." ..':.,:~J'..~..,...... .... . ". ;'1" ,........ . . ~,. ,...'; o'.' ".:' '; :.':.'>' 'i. .:: ;..~.:..:.:;".:, :.,..~,~'.....;.:....:~...;.,.~./. :'~> ':;',,:.: r: .-':' . ,:::<.~::>' Z(:;:" " '. . :;':".,~.'.<., .;,~ ".;:' :':'~~'~'~'~': '::. ~" .. ..~:~~;,. t....... ....:. :....,.". '.';" ,',;' ,~~. ... \. ,":... ".:'I,I~:." " .~. +, '. ~,"," -""r'.: .~<~., . 1 i' .....', ;.=', . . ~, . .', . .~,.; :..., f. . ~ I : ....; '..:..', " :;:': >..i ,';:!.: >":"<'.,::'" o"".:' . ~ '. .",.. . I ' T ',1 ,,',' . , '.. . " ".: ...... .' . ~ . I~ " '. > +.. . " /. ~ ',I, ~ ,~.. .. /' ,'" ~ ..r. ., .:) i ' ,0 ~. . . " .' . , Governmental Unit . City of Clearwater City of Clearwater, Florida Computation of Direct and Overlapping Debt , ' -September 30, 1996 Net Debt Outstandin~ Percent $ 355,000 . 100.00% Pinellas County School Board Total 883,422 13.82 % (a) , Amount $355,000 122.089 ~77.089 Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period ending September 30t 1996. . (a) Applicable Net Debt Percentage is based on ratio of City to County Taxable values for 1996 -collections ($3,820.217,710/ $27,637,296,185) ;'":_-t...,...~~~..,,'\.,~~.....:,.~. .If'r'""''''''''' ..-. . . .\:.:,: .~ .' . .... f..; :, ",. ~>. . ',.", ..,': 1..' .' .. . ," " . ". ~ I. , . ," 'I. .., " . .;.:1(- ',.. .'.'..' :, . .t ~ . I' : ':":'r ,',I "". A-14 I. :> < ~'. . > ".:' '. )', "" '. '........ .,' ." I..':....:. '..;'; . .' . . ... :.: <':' ," > ~ .':.~' ~, ,.:' , . . ".~ '. . , ;"\ .' , ,j. ':, ..', :.,': ":,','.": ,..' . .~. co, ... ,\ \ I . . ... · .',) ..:.;;.,;:,~( ..... ::ff':,.}~;ni;l;i: .:':'l~:'~'~.' ....... ":<<::'p'~r' ...:::... ~:,," '. "I"~(::~;'.:.~,:r:,.:>:";.:, . :.,. .' . . ' , .: ~ '.' : L' . ~ ,< ",' ' I' . 1 . '.. ".'; . I " : .'~:! : ,: .;. ,"' . ". ': .~ . .' .~. ~. ,.,J~'\~~': . '='. . qg~oi ,. t .. ~ ", 'j\. . .' ,; - .~. . : . .' .:. :.". " .. l. . > ~ ':: :: ~. . .. l~ . ., . '. . .... ~. ,c :'T .'," r~.\,'I.<:. ::~.::~~':, ~. ,," ",' , .,',' ~ .,1 . /': ~. ~ '. I . " . "'~ "', ~ " 'T, ~ ....' "', .:;' :', r.>:~...~4..~':: :~.:.: '.. . -.:,'" '.' (, ...::....){<.;:'. ,:,:: ,'" .' '::':: i:.:-:~, .>. .' ..' Fiscal Debt Service Requirements Yw: Principal Jnterest Io.1a.l , '~~ 1987 $75.000 $660,675 $735,675 ~"'-Ic~H(':' 1988 75.000 655,800 730,800 1989 80,000 850,550 730,550 1990 90,000 644,550 734,550 1991 95,000 637,620 732,620 1992 488,020 488,020 1993 488,020 488,020 1994 488,020 488,020 1995 150,000 978,195 1,128,195 1996 240,000 1,052,923 1,292,923 ~ ,2) ~ '.. _" T ...: I';. ',' ~.: ~ ,I :':' . ~: : I ~. .". ".'." , ,;" ~ ,i '. ;.;; .".(\ .; Source: (a) (b) (c) Note: " City of Clearwater, Florida Gas Revenue Bonds Coverage Last Ten Fiscal Years Fiscal Yw Net Revenues Available for Debt Service Gross Revenues(a) Expenses(b) 1987 1988 1989 1990 ,1991 1992 1993 1994 1995 1996 $8.967,911 9,467,621 9,170,280 9,566,159 9,865,958 11,586,605 12,562,105 13,316,619 13,672,905 16,423,147 $1,782.634 2.227.513 1,901,892 2,122,152 1 ,888~255 3,470,554 3,197,124 3,096,455 3,117,559 3,223,185 $7,205,277 7,240.108 7.268,388 7,444,007 7,977,703 8,116,051 9,364.981 10,220,164 10,555,346 13,199,962 Covera2e Maximum Debt Service Coverage(c) ,2.42 3.05 2.60 2.89 2.58 7.11 6.55 6.34 2.76 2.49 1.80 1.74 1.75 1.81 City of Clearwacer, Florida, Comprehensive Annual Financial Report for period ending September 3D, 1996. Includes interest earnings and gross revenues from Gas Syslem. Excludes depreciation (and similar noncash expenses), amortizalion of bond discount and issue COSlS, bond interest, and rcserve adjusbnents. Maxirr.um Debt Service coverage is presented for continuing disclosure on the Gas System Revenue Bonds, Series 1996Aand is ba.~ed upon the maximum debt service for the 1996A and parilY bonds in the amount of 51 ,778,308. In September, 1991,lhe CilY issued 57.680,000 Gas Syslem Revenue Bonds, Series 1991, to finance the cost of advanced refunding $7,100,000 Gas System Revenue Bonds, Series 1983 and to pay cenain l;:Osts of issuance of the , 1991 bonds. In Seplember, 1994, the City 'issued $8,110,000 Gas System Revenue Bonds, Series 1994A, for additions, eXlensions, supplements or replacements of the existing gas system in PineUas CounlY. Florida. Approximately $1,340,000 is to be used to develop new gas markets. A-IS erg ,.O~ ~ I' . ",' , "". ~:'::.,:' ',::,,' ", ~,~<, ::'::<:-., ';' ~;~ ".,.,,',:,' . , ' :_ ','. ' ..,:.':"':", " :' ,"'" '/:'. :,'. :,:- '",:;:,' n' . ~.' ': I ; ,,. '".,'. ..'. '. . .: ~ ;. ",: .~ . -...' c,' '.' . '. ".'., . . . .." , ..:. I :... .~"I. . . . .: ~:.; ::. ' .': ,I' . :.... . , ','.. I 1.1' . ,'>:':> ,.: /t,.,>\~,: ,',u,Z:' ~~;~ > 't/;,,;,;:i {', i, ,',; ',':,' :{a{"i."".~r!i.)',i.'~..;:'\ , ...., !.SJ' ,,' .~t, "" 9' ";tf ,"H.'" .., " ,:.:.,) ,::';:.;:;i, :;;;;; :. ::',:}":~,;"/;'i 'ii ,':, /:~:' :.' ::, ;".': ,,":',;;';{} '. ..' . . .... ,. . . .'e ' ~~ I . . ~ .. . .' , ".' . ~.: I' c' .' .' 'J" " ' " ...' .. I ~ ,_, '. ': -. . ~I. . c , " " + .'. ~,' ~. I.' '.;' . . " . . ,.' , : '''; ,,,::,,"1"'" ,. :,' <. J- " '.: < ~~" . . .. , ~. --~ ~ ~ -w-- - . . . 1,'1-~:' ',,' I, ~.~... ~ < ,..- . " ".'M ~' . ~ ~: "(;) i . . >~ ". ;:~f:, - ' , " :~ ~ ~ . , . - . i.....' . , ~M' : . '!. , . ~ . ,(. . < .'. <;':'. I ..... ,I ~!.' " \ > C " . \"t:. . " \~:>'; p\~.: .... " '. " '.' ~ , APPENDIX B ,..., - .' ~: \ ' .;:.... ,.;."'" > ~>::. :~'.' ,'~ { ./'.... . ',~ . .. . ..: '/,~lIIt\" . ..tt~ EXCERPTS FROM THE CITY. OF CLEARWATER, FLORIDA . . GENERAL PURPOSE FINANCIAL STATEMENTS . ' ' . .' AND OTHER IN FORMA TION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996 AND '. UNAUDITED FINANCIAL STATEMENTS OF THE SYSTEM FOR THE FIScAL YEAR ENDED SEPTEMBER 30, 1997 " " ;, ';. {.. " ...., . :.. \ ~ I : l~. ~\ .~: ,", ., .' F' ~ , ' ~> ;~ \'. . " II' 'I..' i'V''''':1! ~. '-." : ' '.:' . /,7D 16 ,.-tJ9 > . '1 ~ ,.c I, . '< . 11 I .. ~ , . :.. :' ~ 'h . ': ".',\. C r ': ..'j, '.. ! '. E.!J ERNST & YOUNG LLP . Ct'r1IIi~ Public Account.1nts SU"t 2200 100 NOI'lh T.amp.a Slt~1 P.O, Bo. 7.cO T.ampa. Florld~ ]3601 . Phone: a 13 1 H 4600 ~ I Report of Independent Auditors Honorable Mayor-Commissioner, City Commissioners and City Manager City of Cleanvater, Florida We have audited (he accompanying general purpose financial stafements and the combining and individual fund and account group financial statements of the City of Clearwater, Florida, as of and for the year ended September 30, 1996. These general purpose financial statements are the responsibility of the City of Clearwater, Florida's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United Slates. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a rea~onable basis for our opinion. "~) In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Clearwater, Horida, as of September 30, 1996, and the results of its operations and the cash flows of its proprietary fund types and nonexpendable trust funds for the year then ended in confonnity with generally acr.epted accounting principles. Also, in our opinion the combining and individual fund and account group financial statements referred to above present fairly, in all material respects, the financial position of each of the individual funds and account groups of the City of CleaIV.'ater, Florida, as of September 30, 1996, and the results of operations of such funds and the cash flows of individual propriety fund types and nonexpendable trust funds for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statemems taken as a whole and on the combining and individual fund and account group financial statements. The required supplemental information and schedules are presented for purposes of additional analysis and are not a required part of the general purpose financial' statements and the combining and individual fund and account group financial statements of the City of Clearwater, Florida. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and the combining and individual fund and account group financial statements and, in our opinion, is fairly . presented in all material respects in relation to the general purpose financial statements taken as a whale. The statistical data section has not been subjected to the auditing procedures applied in the audit of the general purpose financial stalements and, accordingly, we express no opinion on such data. ' In accordance with Government Auditing Standards, we have also issued a report dated January 10, 1997 on our consideration of the City's internal control structure and a repoM dated January 10, 1997 on its compliance with laws and regulations. ~ ~T hl.l.p January 10, 1997 B-1 Ernst & Young u, Is a member ~ tn-1St & Young International, ltd, 1f6 -D9 , . ,,' ., -. . . " ,,' ' '.",.. .ill ,.' ~r"_"" ,.' . ~I ..1.. ... \.J '/ . '. ..',.. .H' ", ' . " ~..; ,,'~;. ... .', ,';. .' ..'," "..... ,;:i}',;,/:;::}i:; ',,~.'. :? ',",:\:i.' ,;,,'\,\,:{;~c;;';,I;i; .~ ;'{i",i,' :/',';x ;:" ,".. ;;:,' .." '. C i , ' , ~. ~ "\. r .'c~>.'_ ~-: 'd~J, o J > , ,. .~, '; ...'. .: ":) ~..' ~ . " .......~ ; c,' 'r,.' I'. ,,',,' t~;:,: :. ' " , ,', :; .:' c.). 1 I '. ~ t:'., )~ ,c' ."../ ~ ~'. '~.~.:. :','. , y. :' ,C' ;: ~. 0,,'" I ' , ' ..... to ; ',' .' , ' f' i ". Ii " "'.1 .;. . '.; ~~ , , ~, ~ ~)' I' PAGE INTENTIONALLY LEFT BLANK , " B-2 1?c2 Qg-01 ".,.~...~~~..... ... ~r'~+' ... .......-;, I', ~ . , , ... 'V___ - . ~ - - fi.!.I ERNST & YOUNG LLP . CfrtHit'd Public Account.lnlJ SUlI~ 2200 100 Nor1h T.amp.a SI,eel PO. Bo~ '",0 T.lmpo1, Flo,id.l 33601 . Pho~: 813 22S ..aoo ~ r I. Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditing Standards ~ . , Honorable Mayor-Commissioner, City Commissioners and City Manager City of Clearwater. Florida We have audited tht.: general purpose financial statements of the City of Clearwater, Florida, as of and for the year ended September 30, 1996, and have issued our report thereon dated January 10, 1997. .-" I "'lI.OJ We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with Jaws, regulations, contracts, and grants applicable to the City of Clearwater, Florida, is the responsibility of the City of Clearwater, Florida's management. As pan of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed (ests of the City of Cleanvater, Florida's compliance with certain provisions of laws, regulations, contracts, and grants. However. the objective of our audit of the general purpose financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly. we do nOl express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported. herein under Government Auditing Standards. This report is intended for the infonnation of the Mayor~Commissioner. City Commissioners, City Manager and the management of the City of Clearwater, Florida. and agencies providing state and federal financial assistance to the City. However, this report is a matter of public record and its distribution is not limited. ~ofhLLP r:. .:a \riJJ January 10. 1997 B-~ Ernst & Young UP is a member oTE,",t & Young International. lid. CJ<6/0~ -.n.n ____--:;- ~JIIP!I."~, __ - .' . . " .'.c.:" \,1,..:"..:'1 t,: :..~. . ".'.'.: ;: ~.' ri;,....,':" \ ,." c >.....:: :. ....': ~, f' :, t7). ..... :'. .', . . . ,",' , ~ .., ~~<r ' /";,1.. } c, t ~, . . , e' , , , .:,':'<.:. : l: :!;',. ~..., ~ ,'.'. '..~'; . ; ~~\. I.... :"', ~ .' .. ~,I. ,~.'~' i~.': '.; " \ : . .r. ~.> . >~.; , ~'y,~, .'.0: ' '!~,:: :' .c ,. > , t.':,,:~,\.":I: >.",0,' i "', .' .....-;.. ..'; f, ~ <', .,. ',,\: '.' :;f:i:.,:>., .:~\~~:..;.~ ~;. ., ':i:(' I"::'..'. '::'~~I':" ,~~,~:" ~l,,; . " . ~. .: . ~ .. . ~.~. -' ~/:.(.~ T J, : ,. I~ ,~ . ", ;-..::: :.:, ; ~, , " ~.: '. \~; , '~~;c >'. , ' !")< ,',.> v.. " j. "~c,: . c: ; " , . . '\ , ',j I~ ' ., D". ~i .. ,., , ';.:;" ..'" < ~..' . """ . . ~ ' ,;..,' .,,' ,1 ',ii,'" . ...,':-0. ." , >'. ~ '. ',' ..< ;.,., . " I~ . " f,..' " .' ., ,. . . , PAGE. INTENTIONALLY LEFT BLANK ., ,,\ . .~. . , " .1 8-4 /71f q~',-O 9 ~.;~~:bl~i~)/~~~t.r:'f:.o.\ot.>~~:,,~~..-:-"to"""~"'~~'h"'''' ~~r~.,r 0" -'.' j'. J", .' .? '., .. ,~": c ': . ~ '" ,';'J:::i!{'iJ;ii~\:, :, , , r"'~ - .' ,'. "".., '. '" '~, . ~ . ~ . .". ..1, ".. ".' ........ . j ~. \ "l ....' ,," I .~ .': ;:, i~~;~:P::~;/;\, "":t";" c ~. ~ .. . ...,.. '.., ._, . ,. \.' <"', ,,'. ,." : 'r, .,",,' 'i'.. "', :','.; .' .'.. ','", . . .' ,.,'. "," , ',",' " 1 . ~:. \ . , . .', ' . . ' .:. ". .:, ~,,:..~,','I'~"',~,".,.,,; :"~, . .' . '".L'.: t .. ... '. .: J:. -;: ': ;.':.c~',' :,' ,':, .:'.;." -'>. '. ", ."': t.' ' ." " .' .' , ... '. . .. . " ',' ~ . ..:...:....:.',..:.~ ~:~.. '.~.... 1'" . . . ~ , ;'.' " .: '.. .'if '> ..' " ,': . .:;;::. .::' ;.;,., >,f ,,:,.,: :>.":, '. :,:::" . ;: . , ..' .':. . . . . ,: . .,~,;..>~::~,: ;,.:.,jY~{;',~/}: ~!':'i'i,j:'i:,,:f::;:<;t.. ~"';.i'.': \,::/;",:::,c\t.:;:.,.. , '..' :.' tl...,J,J.,S, . ,,'" ": I . ":'::.;.~ '::'~,:'~"':";".;':>;':::::-':;. <';, ;.':','. '".'. .,:;.:/.:: .\::,:,,:,,~,.,.:.:.., I'. , . :: . ~ I '.',. ~ I' .. ~T '.. '.': . . ~. - . . + ... ' . E.!J ERNST & YOUNG LLP '1 . Cer1lfitd Public Accountlnb Soile 2200 100 NorIn TolImp.a Slrtel P.O. 80'1{ 740 TolImp.. FIOficb 33601 . Phone; 61l :12501800 , , i Report of Independent Auditors on Internal Control Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditing Standards Honorable Mayor-Commissioner, City Commissioners and Cily Manager City of Clearwater, Florida We have audited the general purpose financial statements of City of Clearn'ater. Florida. as of and for the year ended September 30, 1996, and have issued our report dated January 10. 1997. C' We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Srandards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. ~:) The management of the City of Clearwater. Florida, is responsible for establishinB and . maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control policies and procedures. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financiaJ statemenrs in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control. errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. . ) ,. 'J :.~ l. " ~I: ... . In planning and 'perfonning our audit of the general purpose financial statements of City of Clearwater, Florida, for the year ended September 30. 1996, we obtained an understanding of internal control. With respect to internal control. we obtained an understanding of the design of - the relevant policies and procedures and whether they have been placed in operation, and we assessed contro] risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose. financial statements and not to provide an opinion on jnternal control. Accordingly, we do not express such an opinion. L. i1J~~ V 8-5 Ernst & Young t.t.1' (I a memb4!Il)( Ernlt & Young Inlefl'\a.llol'lal, ltd. CJCZ; --0 c; , " " . I' . t " ., ' ..: " , ~ ~,>.' '." '" .' I' " .::~ .~ ~.:i; ..:,. 'L.- ", ., , ;' ,. , " .... ,', ......., " . .' ,'.: . '. ~ . . . ,~ ',,", ,. ~ J. I ~..:,. j I ! I r " I' I' !, i ,. ;.. I I, , . . () , :-"'''J>.~ V ---....,.--... - . ','. .... OUf consideration of internal control would not necessarily disclose all matters in internal control' that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakne~s is a condition in which the design or operation of onc or more of the specific internal contro] components does not reduce toa relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of performing their assigned functions. We noted no matters involving internal control and its operation that we consider to be material weaknesses as defined above. However, .we noted others matters involving internal control and ~ts operation that we have reported to management of City of Clearwater, Florida, in a separate letter dated January 10, 1997. ... ... ... ... ... ... ... This report is intended for the information of the Mayor-Commissioner, City Conunissioners, City Manager and the management of the City of Clearwi}ter. Florida. However, this report is a . matter of public 'record. and its distribution is not limited. ~of hLLi' ", .'. January 10.1997' 8.;6 1f5 -Oi ' "~"""''"''''''~M.~.t; ......~'.l:... ..~"k.. '~...."'~"... .'. .," .,.,.... ,.;. ~ : ~ ~ .... .... ,. ~. .~.:'. .. ,. ~'ic I" ... '. .~.. . ~ -l .' L ..' " . 0:'. ':,- ,'" :':- :,:.... ~'.'. ::. '" .~: ~ ..~', ;.' . ': . ;: ':J .'::':.:,,'~ ,', . . /. :....:::::,;. (':'::;'.':~fl:',:::,.~,:" ,:.:": '. '.' .. ..~. ~:~""~"".'............,., ;..,:..:1~::."':-:" : J...~.:... .',;. ..'dl .' I'~.:" -..' F . .... r ~',:' .~.: ~"'I .:.... '. "':'., >',: ';..,. ....: ij;71 ":y::, :" ",: :7,:> >:>fji' 'i:, ': ,,:, ""':',"':'," '.'; ::',..' 1-.1,.1,<;..'..'" ..\:,.....~..J' '::,:-"'.. ,;,~,':-':"':.......;I.,..:.'...;;i:....,..._:.." .~,..:.;...:.. ...3~'~";:'.. ',:' '.' /., . . ..... '.',' " '.' f:/:.:.~'<.' :;....';.~.;:'.~,:,;.~;::~~,.. ::' "', . " . . .. " 'j- ":', :: ;:~ i..... ' . F\-' . '.:. ~ . ,j;. . ;; . .. '< :.: " . :. ": ." 11 .' .:". : ". ~ . " 'Il'''. " . ~ , . i. 1 . .... . . .".~ \: . ....: r ',' .' -/.' . c .. ~; . ;. ~ ~. ,:,~ I. -:. :'.. ',j j I, \. ': ~ I ~ I) ".>1 . ' t ~~-!. ~,,:~;,,?,~ ": ,.~.;.~ "{, '. ~:.~ i,...:i.,,! t . ., .,' .;~ f.:~tJ '".,; : .. ~, '.. .'. :'c ,:.....:. . ~ ' . . ',..' ~ '. . , . l ~~. .' ~,.- . \'T' . >;)/". 'c.~C. . ~~? i).... ;v < ~ :c ~;'~:.. . , >.;,!> , . >~,,;.":' I;, J' " I. ". ~~/;..,.~...\ .. ,,, " '.'. ,~"'.~ :.,J e:: . .; ~ .(. ,:.r> , .~. :.' :~! , . ~ ' . ,'" J."' . ~ , ;. .'~ . , . ~ c' ~ .' ; , "I. " '!:'.I .'.~ ". '. 'u' '" '1 '~ -', ~.; . ';". ~ ! I . j-"\ '::;" .' .'. {. J r'~\~\ -'0 .1. , n~' - ~ " \ ... " 1 GENERAL PURPOSE FINANCIAL STATEMENTS 177 8-7 q~ -oq '. ~:; .~"'IIIIi\~,\:;I-.~~ ~\J.4 ~:~'l ~ ;.~~.t.It-~..... ~"""'l~~''''''' '" . c{........~ _____.....c" ~ I .\ . . ,. " ' ..,1,,'" ,. ':. :,.:.i'._ ~'::~'?,::'e::,?:"?~?: 1""h~.' l . . ...' ....t ..~... ... "l.. ...)-0, ;c..... . . .1'\'0 ".,'., '. ',.;..... ~:... ~.. .:".\......, ~ s.. IICcompM'rIncI noli 1 10 RnancW StllllNlntl, 8-8 qg-oc; / . ' , . '. -. ' " ." "" '. ,,' ... , , " ' ,t. r... '," r,..., ..... ,r ", .. "fit{ ,. ,. , .. .' " ' . .' . d., .' . " ':; ~;; ~ .; ";.;" :;':~<'~'::. :;.:::;;"\\:?i,:/'::~f:':;,~::::),~.~: :'/':<~'/::;":':'.::.~': ~'. .t;t;.,: ~':, '.",:;:;'.~': \" :'~,; .;~(; ':',':.:.: ~ /i/;: \ :~ ;:::. :/, ~.::,~>,::.!~;:.~;;~: {:~/\:\.V;: ~/:~~(:~:~:~';~;~';;:+/(:::':i,:~,:';: :.:::.,: ;':\;', . 'I;. , of Z ~ i I TNlt and AlH'llC' Aetount Ol'Ouptl a.MIIIl ChIN_ RutS Long-Term A.llt. D.bt ,ritNry Gowm""n' foul. l"'-mofln4um Only I Component UriI a..twlt., Downlown D.wtoIopmlnt aa.", Reporting (nitty '.UN IM.lnOflndurn Onlyl 1111 llts fJdud.ry Fund "pi 10,165 5,1045.252 · 41,680 93,538,191 · 2,0409 275,299,67<4 10,125 121,B05 93.538,191 · 2,0409 275,299,87<4 131,946 100,188,772 · 3,226 2"3,842,593 275,2S6,77<4 7,664,297 7.6604,297 7,846.318 .,807,968 4,840,407 4,840,407 3,942,887 2,100,tlaO 2.100,880 2,213,553 442,008 442.008 2,885.982 2,886,415 2,886.05 2,6604,916 128,309 128,309 128,309 95.874 211,116 211,116 2304.781 173.371 257,223 257,223 191.267 18,419,316 18,419.316 19,798,265 <4,017, UI1 4,017.181 8,468,022 2,231,253 2.231.253 2.370,403 ,'........) 1,81 e.6oo 1.816.800 1,400,778 ....,.A 90,376 90,376 446,600 30.386,420 30,388,420 27,8515,478 " 31,390 31.390 31,390 a,143,361 0,143,361 10,801,214 4,223,028 4,223,028 ll,464.078 109,473 109.473 USe,281 10.461,455 10,461,455 8,019,374 1,1561,862 1,661,082 1,748,641 84,701 . 84,701 84,701 145,828,270 372,120,740 372,120,740 338,025,702 1.618,422 1,818,422 1.818.422 1,685,088 15,379,076 15,379,076 15,379,076 , 4,858,897 4.016.058 4.016.058 4.016,058 4.033,072 288,492,512 145.628.270 21,013,556 862,223,161 80.125 882,303.286 805,408,236 -- 17 (ContlnIMdl u B~9 Cfi-oq <:; See 8Ccomf'anyloo not.. to flnanclll Statamenta. B.lO q~ -OCJ P-a. 2 of 2 '~ CompoMn, FJduclery 'I1mary Un/1 'und Type Account OI'llUP1l OonmnMn' 0.. rw.lllr R.ponlnlllnUty O.n..... O.M'" T<ll.1. DOwnlOllm To I.. I TN" and find Lonll.Term IM.morandum Cewllop""n' fMtmo...ndum Onlyl I Agllley An"l D.bt Qnlyl lIurd 1118 "IIS :lIC,!!! 5,458,894 10,033 5,468,927 8,106,778 167,782 H57,782 187.782 19.024.385 19,024,385 19,024,385 16.279,192 3,606,327 435 3,600,782 3,151,932 4,0115,058 4,016,058 4.0HI.058 4.033,072 191,064 192.0&4 250,942 1 1 ,053,770 11,053.770 8.221.227 26.582,677 20,562,877 30,599.479 4,017,161 4,017.1151 8,466,1.)22 413,792 413.792 576.511 6.4,151 157,715 157,715 93,703 1,211,065 1,211,0155 1.888,459 442,008 442,008 ," 125,106 125,106 125,106 140.208 .' 9,131.601 9,131,601 B,664.547 10,461,455 10,461,455 8,019,374 355,000 355,000 355,000 450,000 13,351,790 117,744,171 117 . 744.171 1 12,826,998 3,290,708 11.380,263 " ,380,283 9,007,703 19.862,100 21.013.556 225,520,294 10,468 225.530,702 218.478.14S ._>'t) 145,628,270 145,828,270 145,828,270 123.418,062 106,011,944 106,011,944 104,924.71 2 " ..... il'~~ 20,220,349 20,220,349 20,084,747 62,876.334 62,876,334 61,275,103 51,407 51,407 37,250 7,313 7.313 15,066,118 15,066.118 17,871.774 1,364,964 1,364,964 1,444,312 324 324 15,324 28,226 28,226 157,959 263.585.350 263,585,350 263,585,350 231,842.001 '1,244.156 1,244,1511 1182.280 1.984,738 1.984.738 2. 138,096 253,458 253.458 240,1596 6,763.771 6,763.771 9,552.426, 5,245,062 11,15HI.145 69.657 " ,685,802 15,245,290 268.830,412 385.062,653 69,657 385,132.310 360,587,318 26&,830,412 145,628,270 636.702,867 69,657 636,772.524 5~8 ,9 30,091 288,492.512 145,628,270 ..21,013.556 862,223,1ISl BO,125 ITB62,303,28S B05.408,23& : '\ ~ 8-11 Q8' ,q \:J . '!.. ..,',' " 4' " ,.',. . . ...... . ....\'1. ;":: .. ':;:.. . ".: k: < .~~'. c', . T:: . h.. ~. ," , :~ .,.... s.. .ccompcnvinQ not.. to Rn.nclM Sf.tlrm"'.. .~. :>.~d' "," i . . : I" ".,. ,"' ... . , . '. , . ~ 'f ~. " ::.. i \";::'. ~ '..~ < ... ..... .~., ;.~, .",~~'...'. < ',;'.' > .. ''':~. <.( ",";.l-:' ,"'I': . ,,,:,. <,' 'l. , " " "'.'-. " ~ . " . \" ::....... ".' \""; 8..12 CfS /01, \ .:' :::. " " ,',~,': "','.'/::' ,::~:"~\>:r',::,:,:.~";':::!,,;':':"::;'< .~~ ~.~~,. .<" . ..",:'\' , .' "+ .< .' " i. '. . \ .. :,+:':: .. ,_ : . ..:' . ~( . , ' r . . . ," .l .' .' . . .' ". I . I,"' ~ .' C A ~. '.",.~'.." ~: <<,':',~ : '/''''t::l': ::>::'~,":~~:..' J"\'):"~';"'f~:,:,~6:':;~2i"; '..' q ... . ......'...)',:,;:}lJ).:;::'.:>:',: .p:'/t/t:'.'::, . I . . ~I . .. . ..,..1.. ...",. I . . , '...".,..; : \. . , , . ':;:7: :':,.""",\,: . ";\.'" 'fJ '.1 . . . L; :." '~'\""" :": .::', ~.:.:.., ~:.: .l-~' !:o, ~ f' . . .. ..! , . '; , ;:,:i':'~';";:,~;":,:.""~":', '. .. .. . ~ ~ '. :" . ;.,' ~~ ". '; ..;. ,.'. ;':~. }:". . . . >" .:,:.,'::,:.~~,? : \r::,?~, .. co,'.'.c ',," .... '.' : . ":.,: . " ~ .' . ~ - . .' , , :' 4' . '. 0 . .' .... .... ~ . 'f' ., . '" --.. - ...... ....~ ~ COmpOMnt Primlry UnIt Govern",.nt Clurwlte, "Iporting Entity i Totllt Downtown . Tote" I Caph.l lMemCHlndum D"wloplnlnt (Memorandum Onlyl PrOJlcta Onlyl Board 1998 1995 41,495,45. 128,lW8 41,824,100 40,028,444 2,937,688 2,937,588 3,820,89 I 13,028 20,817,058 20,817.058 19,814,366 6,232.824 5,2~2,82. 4,875.5 18 1,058,340 1,050,340 1,019,772 1,738,731 1.738,731 1.7S8,C80 1, lOS, 109 4,428,235 2.446 4,430,8Bl 3,838,285 1 ,1 18,1 3S 77,504,228 131,092 77 ,835,320 74,753,954 8.422,146 8,422,146 7,100,253 32.413. I 58 32,473,158 32,230,932 1,448,830 1,448,830 1,3158,074 4.935,058 4,935,058 4,727,961 1.857.311 142,240 1,999,551 1.871,488 893,940 893,940 760,198 13,582,7ge 13,582,796 13,172,327 23,"4,826 23,283,499 23,283.499 14.059,318 "Of" 1,417,235 1,417.235 1,289,15 19 1,078,876 1,078.876 713,377 h~\ 1158,813 23, 114.826 89,192,849 142,240 89.335.099 77.560,35B 121 ,998,8911 n I ,688.8211 ' n 1,148) nl.899,7ei91 12.808,4041 1,870,988 1,870,968 1,870,968 11,415,027 '4,514,435 22,266,525 22,266,525 20,904,000 26.960 26.960 34. "9 34,119 6,558 (210,0001 (1 B,733,924) 118,733,924) (17,404,8151 (34,119) 134.1 19) (6,558) (28,980) (28,980) 16,175.403 5,410,728 (7,1591 5,403,569 14.914,412 e5,821,2881 e8,277,893) (18,307) 18,298,2001 12,108,008 27.237,999 42,897.151 87,9154 42,9B5,l 15 37.388.418 ~ 2,2B8 2,2B15 1,199,270 13,485,988) 13,495,98151 (7,890,58" 21,418,711 33,135.558 89,1557 33,205,215 42,985.115 . ."i ,~ 8-13 qg~OCf . I .: ". . ~ ,I ;':',' ,'. . J_ " .~ an OF ClEARWATER. F\gRIO~ COMIINED STATEMENT OF REVENUES, EXPENOITURES. AND CHANOES IN fUND BAlANCES. BUDGET AND ACTUAL fNOH.oAAP IUOOETARY llASlS' . . GENERAL AND SPEOAL REVENUE FUND TYPES YEAR ENDED SEPTEMBER 30. 199' ExCM' (DefICiency) of RevWlu" .,d Other Fin.ncing Sourcerll Ovor Expenditures ."d Other Finlflcing u." {Budgetary SIIIsI Excn. of RevenuM WId Other F'lnlncng Sourcrll Over Exponditur&l and Oth_ Finoncing U... for Non.Budgeted Funda Encumb.red Purchll' Orde,.. Beginning of Vur EnOJrnblfed Purchlll Orde,.. End of Year Exc... (D.ficiency' of Reveriu.. end Other Financing Soure... Over Expenditur.. and othOf Finlltlcing Un. IOAAP Belli.) Fund aalancoe. aeginning of Var R..Jdu.J Equity T,anlf., Out Fund Bet.nc... End of YM, Oen.,,, Fund- V.n.n~ Favor.bl. Budg.t Actual IUnt evor.bl.t . 39.897,310 39,918,l!S41 19.331 2.402.000 2,43S,798 33.798 11,033,410 11,027,141 (36,21591 5,' SG,Sl!SO 5.232.824 75,85<4 1,041,820 1.0Sl!S.340 14.520 1.358.000 1,290.311 181.8281 1,508.770 1,307 ,083 4141.707) 82,428,270 "2.328,178 f102,0921 205.530 190.225 1 5.305 2.303.140 2,318.341 f15,201, 992.940 958.928 34.014 863,320 614.832 48.488 440,400 444.384 (3.984) , ,279,480 1,248.989 32.491 705.480 714,172 18,712) 1,1517,120 1.889,094 171,3741 20,91<<1,310 20,8S4.178 282.132 9,917,000 9.890,8lS0 88,140 1.83..280 1.611.124 23.158 4,863,170 4.747.301 115.288 10.205.977 9.964.714 241.283 3.195.840 3.18 1,077 14,563 1.822.130 1,074.346 162,216) 470,S10 39S.998 71.812 61,293.307 60.500,161 793.148 1.134,983 1.826.017 691 ,054 4.3152,350 4.247,983 It 14,367) (7.825.797) 17.8153.279) (37,482) 13,263.4471 {3.415,2981 (151,S491 (2,128.48.) (1,589.279) 539.205 It 86.201) (188.201) 413.178 413,178 12.126.484) (1.362,302) 715l!S.182 12,288.108 12.288,108 1157,088) (157,086) I . 10.159.1524 10,788,720 809.098 ~: Revtnu..: Tax.. Uctn.... PMmitl, ...d F... IntIWgovwnmont.J o.IID" fo, S.",Ic..: Admnieuativ. Chlrg.. to Oth.r Fund. OthIW Charg.. F'lI1N. ForfoiturOl. ond Ponaltlet Mltcelt<<teou. R.vtnu.. Total Rev~u" Exptnditu,..: Current: City Commi..1on Admwlilt,atlon Leoal City CJertc In'onn.tion Men.gemtnt F'.".,OI Human R..ourcu Non.oeplrtm...tl' Pob F"... ~ PubrlO Worb ''''',1 Eng.,-.mg '.".~j Parb...d Recreation Ubruy C....tr.l P..,-aittlng Economic Developm.,t To'al Expenditur.. (Budgetlry Basi.) Exo... of Revenu. Over Expenditur.. (Budgetllry Buil) Olh., F"Jnlnmg Sourc.. fUn.); Operating T'anaf.,. In Operating Trendo,. In . Componen' Unit (OOBI Op....,lng T'.....t.,.. Out Optlfeting Tran.fllt Out.. Component Unit IDDBI .', See Nota 10 '...-' SH KCOmpanying not.. to Financial Statement.. 9-14 C(6-0CJ ~ Totlll. Sp.dal R.v.nuI Fund Typ..' IMemorendum Only) / Vlrienc. V.,lance . Favorabl. Favortlbl. Budg.t Actu" (Unfavorable' Budg.t Actulll IUnfavorabl., 1.524,040 1,578.813 54.773 41.421.350 41,495.454 74,104 . 1585,000 1501.788 C183.2121 3.087,000 . 2.937,58& 1149,414) 7.14e.8S9 7.458,214 309.555 18,212,05D 18.485,355 273.285 5,158,9&0 5.232,824 75,8154 1,041,820 1.056,340 14,520 1,358,000 1,290.371 (157.829) 612,150 1,414.896 802,548 2.120.920 2.781,759 8150.839 9,9159,848 10.953.511 983.1562 72,398.119 13.279.GS9 881 .570 205.530 190,225 15.305 300.000 372.972 172,9721 2,603.140 2,691.313 188.1731 992.940 958.926 34.014 863.320 814,832 48,488 440.400 444,384 13,9841 1.279,480 1,246.989 32.491 705,460 714.172 (B.7121 1,1517.720 . 1.689.094 171.3741 20.9115.310 20,654.178 2152,132 9,977.000 9.890,8150 815,140 ~~'~ 1,1534,280 1,811.124 23,1515 ......1-~~.;..i,. 4,863.170 4,747,901 1 15,2159 , 0,205.977 9,964,7'" 241,283 3.195.640 3.181.077 14,563 1,822,130 1.874.3415 152,218) 201.4155 HI4.24'4 37,221 1572.275 563.2.i2 109.033 50~ ,485 537,216 (35.751) 81,794.772 61.037 .377 757.395 9,488.384 10.4115.295 947.911 10.803.347 12.242.312 1 ,1538.9155 131,483 141.463 10,000 4,493,B13 4,389.446 C1 04,367) 3".119 34,119 34.119 34.119 C1 0.055.438) (10.0B8,8741 (33,4361 . 117,681.2351 117.752.1531 170,91 B) (215,9150) (26,01501 (26.9601 126.9&01 19,91 8,B 115) (9.940,2521 (23,43151 (t 3.180.2631 (13.355.5481 1175.2B51 (448,432) 47e.043 924.475 (2,576.9115) 0.113.23&1 1,463.680 498.300 495.300 496.300 495,300 1186.2011 t186.201) 413.178 413.178 (448,432) 872,343 1,"20,775 (2,576.9161 (389.959) 2.1815.957 C1,528,U5) (1.528,945) 10,759.163 10.759.163 13,328.900) (3,328.9001 (3.328.9001 (3,.85.9851 (157.0861 C6,3015.2771 (3.885.5021 1.420.715 4.853.341 15.883.218 2.029.871 ,... """- ~ 8-15 ~..-oq ~ CITY OF CLEARWATER. FLOAlDIt COMIUNED STATEMENT OF REVENUES, EXPENSES, AND CHANOES IN RETAINED EARNINOSIFUND BALANCES. ALL PROPRIETARV FUND TYPES AND SIMILAR TRUST FUNDS YEAR (NDEl) SEPTEMBER 30. 1998 WITH COMPARATIVE TOTAL ~IOl}AES FOR 1995 P~prl.t.rt' Fund Typ.. Internal EIIt IfPrt.. S ..,,!c. Opetttlng R.V.flU.': &lie. to Cu.tom.,. SINk:, Charg.. to CUltom.,. U.., eMrge. to Cu.tom.,. BI1inge '0 Dep.rtm.nt. Rlnt.1I Col'ltributiono from EmpIaV'" Contributlona 'rom EmpIoV- EarnInga on 'nVlltm.nt. Int.....' on Loa,. St.t. To: on Inlurlne. Premiuml Im_governmlntll R,venu.. MllclUancou, Revlnul. . 62,288.D74 13,11',83& 3,&.48,402 23.262,60" ',13',348 Net Income CLolllt . 70.122.869 23.252.608 14.&915.788 6,682.112 14,840.488 1,696.922 2.462.8&3 389.911 3,631.788 171.054 1.eee.056 386.912 3.781,873 8,802.031 2,899,119 8.914.220 H12.186 8.193,222 12,988.490 82,779.297 24,244.716 7.343.382 1992.2081 3.169,712 1,004,888 18.164.6061 (393,944) 1188,7211 (4,791) (20,M3) 281.701 183,183) 12.8411 300,782 470,468 81.674 (2.478.1031 928.687 4.e87.269 H16.e19t 296.398 {4,121.129) (13.8771 14.121.1291 281.619 746.130 216,900 72,88C,610 8.473,280 8315,774 (62.8741 (9,0971 I . 74.418,800 8,880.083 Operating Expen..I: PeRonal Servlcll Purehl... 'Of Reaa'- , O~r.ting Met.rle'- and Supplies BtIll'1t p.vm.nt. R.,u~ Trlnapon.tlon UtIUty Servic. Solid Wa.tl Dumping Charge. ".,..Deprlciltlon "ttrfund Admlnlatr.tlv. Charg.. .....dUw Cunant eMrg.1 Operating Incom. Ilo..1 Nonoperating R.vlnue. (Expen...t: eamlngl; on Invlltmentl Int...llt Exponae and Fileal CharlJel Amortlz.tlon 0' Bond Dllcount and laeue COltl Olin (LOll' on Exchange 0' A..et. Lo.... from Wrlt.down. and Replaclmlntl of Fixed Allut. R.cycling Program Incentlvl Grant OthlC' lneoml Clol.) Bo'ote Op.retlng Tranl'.ra Operating Trln.'era In Operet!ng Tran.'.... Out Ret.IMd Eernlngl/Fund Balanc.. O,glnning 0' V.or Rllldull Equity Trana'''' In R..ldul' Equity Trena'." Out Retelned Earnlng./Fund Oolance. End 01 Vo., v Se. Iccomp.nVlng not.. to Finlncial S1.t.mlnt.. 8-16 qc; -(/1 ". _" . ~ . ,'. ' 4. \ .: h f:':::\' :., .: .'1 :' "':', :. " . .'l .' ':r:. " ;. . ,; \ '. : "1.1. :.- ." . "', "< . ~"", '.' . <. . . .' 1 .. \". .' 'I.. . . c . .. ,,:' . . \. . '. . . .:' ,.... " 4 '. c:...' ~ ~ ;. " I ," ~ ;;".,l:.:,:"'~'., .'.':"'c. >;' .'.L",. ~.,.':. '';.1.' ....,. 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'to . ~. .~~'\:, <:~. ~,': '\' t'~' .'~ CITY OF ClEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 , 300,000 5.587.799 '7 ~875.449 Assets of the Gas UtilitY Fund representing Customers' Deposits and therefore restricted, amounted to $882,884 at September 30, 1996, consisting entirely of EquitY in Pooled Cash and Investments. Renowals and Replacements: Investments (U.S. Government Securities' Construction: Equity in Pooled Cash and Investments Noee f3C) Sond Waste Utility Fund Restricted assets In the Solid Waste UtilitY Fund designated for construction consist of the following: Assets of the Solid Waste Utility Fund restricted under the provisions of the Loan Pool Agreement with the First Florida Governmental Financing Commission consisted of the following at September 30, 1996: Loan Pool Aareement Debt Service: Investments Held by Escrow Agent (Primarily Alachua County, Florida Revenue Bonds) Accrued Interest Receivable on Investments ~ "ft) $65,000 748 165.748 Assets of the Solid Waste Utility Fund representing customer deposits, and therefore restricted, amounted to $563,381 at September 30, 1996, and consisted entirely of Equity in Pooled Cash and Investments. . Note (3D) Storm water Utnlty Fund Restricted assets contributed to the Storm water Utlllty Fund by the Special Development Fund consist of the following: Proceeds of the Local Option Sales Tax designated as .Penny for Pinellas., which Is restricted by voter referendum and the terms of interloeal agreements between pjnellas County and the municipalities receiving the tax to the construction of specific infrastructure capital improvements; assets remaining at September 30, 1996 are: Due from Other Funds $4,611,951 Development Impact Fees restricted by City Code Section 183.03 to the construction of roads, public transit facilities and storm drainage In the City; assets remaining at September 30, 1996 are: Due from Other Funds 639 .:..;) 8-47 qg -09 -, ~ ~. " . " , ' , " .,(". ','" , .,">.. .....-: " . , . ',1 ~: . . ~ ~.'~.: . I -. .. ~. . .' :. i ~;>(i)i:,}ii' ~'~t:; ...., ...... :... ,>~ I -'r ..,. ::. ~ >'~... \ I:'" f'., " . d,:.'/.< ~ . . t :;'..:; '" ", .'.. ."":.;', .'"' ,"j Or ~ .~~.:~. "'......=1.::.: : ~. ~ .,' ..,~ . /. '... 0": .. I ., 0" ;."'~'~>:<.;~~ ....~':\:.:::::.~ ~. .:'''1" ::'.: )~...:., ..~I..... "j :'T ~, .,,', .::" " :.1'1'\0..-<,.... .,\ "00 ,.~ ," . ..",.: ". . :"'.'j .. . l~ ......, ,.. a lr ~'.~:.'~:"~'.';:.'.'.\.r.:.;';'..' , ' ..::'i:;,r4r' ::';';':~;'}:;~' ;;:';;,~}r~..!;,~:-?;.i/;!},(;:tl'F:A{:./t ,'. . .: "'~:' ;:',.': ;7<':./::'j: ;.:-}: i::~ ~.:;',<'::,':. :. +:: :'.>,.'i:<::'.~' ; ~: . :, :i,';" '<.~:..~~::':~ ~;;'>-/f~<: .<~, ~:~ ~~,/,>( .":'.'cn._;"IH .~~I'<"~.':I.;'- ..~.r~.:'.'. ,': .;'~"....:< ""Rr'." ... ....;., '\'.:' '. . ." ,.:....).Ic;..++ . I. . _ ..' ~ . _, . .. .' -. '.. - ' . .~.~. '. , . I ~ -'c , ~:t;, ':.'" ~ .' ~ ., I . I ~I!I"~- ~_~l ..... .... ,~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Contribution, bV tho Special Oevelopms,'1t Fund Include proceeds restricted by City Commission policV to be used for Improvements to the storm drainage system within the City, assets remaining at September 30, 1996 are: Due from Other Funds 104.216 $4,716.70~ Noto (3EJ Yacht Basin and Marina Assets of the Yacht Basin and Marina restricted under the provisions of the Loan Pool Agreement with First Florida Governmental Financing Commission consisted of the following at September 30, 1996: loan Pool AareemeOI Debt Service: 'nvestments Held by Escrow Agent IPrim&:lrily Alachua CountY, Florida Revenue Bonds) Accrued Interest Receivable on Investments $ 38,350 441 $ 38.79t ""') "'\"\f!' Note (3Ft Perking System Assets in the Parking System restricted under the provisions of the ordinances authorizing the Iss~nc8 of revenue bonds consisted of the following at SePtember 30, 1996: Public Seryice Tax and BrldQe Revenue Bonds Debt Sorvic,: . Equity in Pooled Cash and Investments .ua~ Note 13G) HBrborview Center Fund Restricted a.ljsets contributed to the Harborview Center Fund consist of: Contributions by the Special Development Fund incrude proceeds restricted by City Commission policy to be used for the renovation of a former department store building, assets remaining at September 30, 1996 are: Due from Other Funds .$ 144.961 Note (3H) Gerage Fund Assets of the Garage Fund restricted under the provisions of the loan poor Agreement with the First Aorlda Governmental Financing commission consisted of the following at September 30, 1996: Loan Pool Aareement Debt Service: Investments Held by Escrow Agency IPrim'arily Alachua County, florida, Revenue Bonds} Accrued Interest Receivable on Investments $503,750 5.793 $ 509~ 54~ Note (31l Current lIabDitles Payable from Restricted Assets As of September 30, t 996 with comparative figures for 1995, the current liabilities payable from restricted assets of the Enterprise Funds were as follows: ~ 8.48 qf)-oq '~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 September 30, 1996 Seplember 30, 1995 Accounts Payable Construction Conlracts Payable $ Accrued Interest Payable Current Portion of Long. Teon Debt (Revenue Bonds) Customer Deposits 477,563 1,263,269 3.897,720 3.493,049 9,131,601 $ 387.375 1,265,315 3,7~,541 3,267,316 8,6~,547 $ $ 0-"," , J Note (4) Retirement Commitments Note (4A) Defined Benefit Pension Plans The City contributes to two single.employer, self.administered pension plans covering approximately three.fourths of all City employees. The Employees' Pension Pian covers all permanent, full.time City employees who successfully pass the required physical examination, oxcept for firemen employed prior to July 1, 1963, and cenaln nonclass!fied (primarily managerial) employees. The Firemen's Relief and Pension Plan covers all firemen hired prior to July 1, 1983, who otherwise met eligibility requIrements. The Employees' Pension Plan Is authorized by and operates under the provisions of Sections 2.391 through 2.411 of the Municipal Code of the City of Clearwater. Plan provisions have been duly approved as required by the voters in referendums, the most recent of which was held on October 25, 1995. The normal retirement benefit is a monthly benefit equal to 2.3/4% of average monthly compensation for the final 5 years of service multiplied by the number of years of service to dato of retirement. The minimum benefit under the plan Is $300 per month. Eligibility for normal retirement occurs upon completion of at least 20 years of service and the attainment of age 55 or completion of 30 years of service for employees engaged in non.hazardous duty. For those engaged in hazardous duty, eligibility occurs upon completion of 20 years of service. The normal monthly benefits are payable for the life of the panicipant and continue, after the participant's death, to be paid at the same amount for 5 years to eligible surviving beneficiaries; after 5 years, the survivor annuity is reduced to 50% of the original amount. The plan also provides for disability and death benefits, vesting after completion of 10 years of service and the refund of employee contributions in case of a non.vested termination. Ther.e are five other options which are computed to be the actuarial equivalent of the normal benefit (life annuity; ten year cenaln and life annuity; 50% joint and survivor annuity; 75% joint and survivor annuity; and 100% joint and survivor annuity). There Is no provision for post retirement adjustments of benefits. Covered employees contribute 8% of their compensation. It is the citY's obligation' to provide a sufficient additional contribution to m31ntain the actuarial soundness of the fund but, In any event, not les~ than 7% (8% for calendar year 19S5) participating employees compensation. There are no other contributors to the plan. The Firemen's Relief and Pension Plan is authorized and operated under the provisions of Subpart B, Anicle I (Laws of Florida. Chapter 30658, 1955 and amendments), Sections 1 through 27 of the municipal Charter and Related Law of the City of Clearwater and Chapter 28, Article 111, Sections 28.60 through 26.52 of the Municipal Code of the City of Clearwater. The normal retirement benefit is a monthly benefit in the amount of 60% of the prevailing wage at the date of retirement of tho lowest rank held by the participant during the three years immediately preceding retirement plus 2% of such prevailing wage for each year of service In excess of 20 years up to a maximum of 60%. Participants retiring at the age of 65 years are entitled 10 a benefit of 80% of the prevailing wage of the lowest rank held by the participant during .the three years immediately preceding retirement. The ending rate of pay specified above may not exceed the highest rate of pay for the rank of Captain. Eligibility for normal retirement occurs upon completion of 20 years of service or a"aJnment of ago 65. The monthly benefits are payable for the life of tho participant and continue, after the participant's death, to be paid to certain eligible surviving beneficiaries at an amount that is one.half of the amount received by the panicipant. Benefits aro also provided for children of the ",,,jO . ,I B~49 q~,{)CJ " .~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 deceased participant who are under 18 years of age subject to certain limitations as.: to amount. The plan also provides for disability and death benefits and for vesting upon completion of at least 12 years of service. The plan provides for post retirsment cost of living Increases equal to the Incroase in the prevailing wage for the rank at which the participant retired with a limitation for those retiring on or after January 1. 1972 of 100% of the initial pension benefit for total cost of living increases. Participating emplovees are required to contribute 6% of their salaries up to the equivalent of the salary of a fireman holding the rank of Captain. The City Is required to contribute . sufficient additional amount to maintain the actuarial soundness of the plan for a period of 35 years commencing January 1, 1972; this contribution is based upon, but not limited to, the amount that a levy of 6/1 0 of one mm of ad valorem t41x would prOduce assuming assessed values of taxablo property equal to the values of January " 1972. As of the date of the most recent actuarial valuations, January 1, 1996. the current membership of the pJans Is as follows: Employees' Pension Fund Firemen's Relief and Pension Fund Retirees and Beneficiaries Currently R&celvlng Benefits Terminated Employees Entitled to Benefits But Not Yet Receiving Them Active Employess: Fully Vested Nonvosted Total Number of Participants 399 8 619 ....62a ~ 51 1 52 """....) ..~, For the fiscal year ended September 30, 1996, the covered payroll for the Employees' Pension Fund and tho Firemen's Retlef and Pension Fund Is ~48.002,286 and $45,011 respectively: the City's total payroll for the same period Is $55,343,791. Each pension fund is accounted for as a pension trust fund~ therefore each is accounted for In substantJalJy the same manner IS proprietary funds with a .capltal maintenance. measuremont focus and employment of the accrual basis of accounting. Fund assets, primarily Investments, are vaJued at cost or, in the case of cenaln credit instruments, at cost adjusted for the amortization of premium or the accumulation of discount for balance sheet purposes. Gains and losses on sales and exchanges of securities are recognized on the transaction date. AI of September 30, 1996, neither the Employees' Pension Fund nor the Firemen's Relief and Pension fund hold Investments (other than U.S. Government or U.S. Government guaranteed obllgationst in anyone organization comprising 5% or more of the net assets available for benefits. As of September 30, 1996, neither pension fund had Investment typo or similar relationships with any related party, Including officers and employees of the Pension Plan. the sponsoring City of Crearwater. and organizations included in the reporting entity. I v 8-50 qg-oq ~ CITY OF CLEARWATER. FlORIOA NOTES TO FINANCIAL STATEMENTS SEPTEMBE6 ;30. '996 In Iccordance with the requirements of Governmental Accounting Standards Board Statement No. 6, the most recent actuarial valuations as of January 1, 1996, utilize the actuarial present value of credited projected benefits In determining the pension benefit obligation at that date. This represents I standardized disclosure measuro of tho present value of pension benefits which takos Into _ceount the sHeets of projected future salary increases and any step-rate benefits that result from employee service to dats. This measure Is Intended to assist In the assessment, on a going concern basis, of the funding status of the penSion plan, including an Indication of the progress being made in accumulating sufficient assets to pay benefits as they become due; It also facilitates making comparisons among employers. This measure is not required to be utilized In detormlnlng the contributions to fund the pension plan. Significant actuarial assumptions utilized in the actuarial varuations as of January 1, 1996, In the determination of the pension benefit obligation are as follows. ,.<"""t, ~ ,) .... ~. ~mQlovees' Pension Fund (1) Assumed rate of return on investments of 7% per annum. t2) Projected salary Increase at a rate of 5% per year, Including both cost-of-IiYing adjustments of 3% and merit or seniorjty increases at 2%. (3) Mortality based on the 1983 Group Annuity Mortality Table for Males with female ages set back 6 years. (4) Pre-retirement withdrawals assumed to occur in accordance with standard scales of moderate turnover rates (Scale 255) for males and heavy turnover rates tScale 355) for females. (5) Pre-retirement incidence of disability assumed to occur In accordance with a standard scale of moderate disability rates (Class 1, 1952 Inter-Company); rates for females assumed to be twice that for males. firemen.s Relief snd Pension Fund t1) Assumed rate of return on investments of 6.5% compounded annualfy for both pre- and . posNetlrement. (2) Assumed sataries grow at annually compounded rate of 4 % related to cost-of-Jivlng adjustments only. (3) Mortality based on the 1983 Group Annuity Mortality Table for both active and retired participant; assumed disabled participants will experience mortality according to PBGC Tablos 3 and 4 for males and females, respectively. . t4) Assumed no withdrawals will occur. (5) Assumed probability of an active participant becoming disabled is zero. (6) Assumed value of ono mill of ad valorem tax will increaso at rate of 5% per year. As of January 1. 1996, the pension benefit obligation based on the actuarial valuations is as follows: ,~ 8;51 qg -01 ... L .>. . Employees' ~ension FUlJd Firemen's Relief sl'ld Pension Fund I21itl1 '1 CITY OF CLEARWATER, FLORIDA NOTES TO FINAN~IAl STATEMENTS SEPTEMBER 30. 1 996 Retirees and Boneflciarles Cummtlv Receiving Benefits $; 64,235,874 Terminated Employees Benefits Entitled But Not Yet Receiving Them Current Employees: Accumulated Employee Contributions EmployerwFinanced Vested EmploverwFinanced Nonvested Total Pension Benefit Obligation Net Assets Available for Benefits as of January 1, 1996 at Cost or Accreted Cost Unfunded (Assets in Excess of) Pension Benefit Obligation Net Assets Available for Benefits aa of January ,# 1996 at Market Value $10,769,539 28,372,499 103,833,807 19.6B6.1aQ 216.838.870 48,859 418,368 $ 75,005,413 711,560 28.421,358 104,252,175 r 19.6135.130 228.075.636 711,560 11 .236.768 224,393,502 3,083.817 18;:, 1 52.9~ 227.477.319 $ 598,31' !.J1,554.63~) ',,~Q] .21 ~.1!}1 $ 3.360.076 1270.573.231 ''''''.') .' . r ~f Effective January " 1996, several changes look eHect In tho benefit provisions in the Employees' Pension Fund. These changes include Increasing from 2.5% to 2.75% of average compensation the benefit amount per year of service, decreasing the Une of service disability from 75% to 68.67% of average compensation, changing employee contributions from 6% (after tax basis) to 8% (pre tax basis), and provide for simple interest of 5% to be paid on contribution refunds. The above changes resulted in an Increase of $11,651,944 in the pension benefit obligation. There were no changes in either benefit provisions or in actuarial assumptions affecting the actuarial vaJuations as of January 1, 1996 of tho Firemen.s Relief and Pension Fund. It is the City's policy to fund pension costs accrued as determined on an actuarial basis. Required contributions for the Emplovees' pension Fund are calculated using the Entry Age Normal with Frozen Initial UabllltV method. The initial unfunded actuarial accrued liability determined at July 1, 1963 is being amortized over a 40-year periOd; changes made in 1 979 and subsequent yeara which have had the effect of either increasing or decreasing the actuarial liability are being amortized over a 30wyoar period from their effective dates in accordance with State law. Required contributions to Ute Aremen', Relief and Pension Fund are based on II variation of the aggregate actuarial cost method, under which the unfunded ponlon of the present value of the projected benefits Is allocated over the present value of a 6.0% per year increasing annuity for the remaining years in the 35wyear funding period which begin January 1, 1972, pursuant to an agreement between the City and the Plan participanu. For this purpose, the unfunded actuarial liability is determined after consideration of the available assets at the valuation date. The increasing fixed schedule produced by this method was established in 1988 and wiU be modified in tho future only to the extent that a current valuation Indicates a higher required cost level, or jf the resulting cost level exceeds 60% of a mlJl in 8 current year. \.J 8-52 q<6 /()~ - - - ,. PlII~ '~' CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 The significant actuarial assumptions that are used in computing actuarlally determined contribution requirements are the same as those used In computing the pension benefit obligation. The actuarlally determined contribution requlroments for the City's fiscal year ended September 30, 1996,' Ire based on actuarial valuations IS of January 1, 1995. Since the City', contributions Ire made during Its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval C?f State regulatory authorities, Is fOllowing the practice of adding interest to its required contributions at the assumed rate of return on investments for a period of one year In the case of the Employees' pension fund and for nine months In the case of the Firemen's Relief and Pension fund. Information relative to contributions Is as follows: . , Required Contributions per Actuarial Valuation of January 1, 1995: Employees' Pension Fund % of Current Year Covered Pavroll Amount Firemen's Relief and Pension Fund % of Current Year Covered Pavroll Amount i:> . , ... . Amount to Cover Normal Cost [Includes) Estimated Expenses Which Are Paid from Pension Fund) 9.60% . $4,609,679 Amount to Amortize Unfunded Frozen Initial liability . 2.85% 1,370,321 Interest Adjustment to Compensate for . Payments during Fiscal Year Beginning October 1, 1994 0.51 % 1,837.84% $827,241 N/A 244.797 a9.60~ 40.328 .12.96~ $6.224.797 !.927,44~ .$e:Q7.5~.~ Actual Contributions during F.Y.E. September 30, 1996: Employer's Contributions Including Interest Adjustment Employees' Contributions 5.97% $2,867,834 7.45% . 3,575,690 13,42~ $6.443.524 1,927.46% $S67,569 6.00% 2,701 6.31% 2.841 ~ .9~9.77~ ~873. 1 11 State Insurance Premium Tax o 8':',53 qrg-~CJ . .,..... I .'.: ~. . ;-. > .or. :.;. >' ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Certain three.year historical trend Information Is required to be disclosed bV Governmontal Accounting Standards Board Statement No.5. Employoes' Penslof'l Funsl Firemen's Relief and Pension Fund ,,~:.) Net Assets Available for Benefits Expressed as a Percentage of the Pension Benefit Obligation II of: January 1, 1994 January 1, 1995 J~nulrv " 1996 Unfunded (Assets In Excess of) Pension Benefit Obligation Expressed as a Percentage of of Annual Covered Payroll as of: January 1, 1994 January " 1995 January 1, 1996 For the three most recent fiscal years, Employer Contributions, which have been made In accordance with actuar;ally determined requirements, represent the following percentages of Annual Covered PayrOll: Fiscal Year Ended SCDtember 30. 1994 1995 1996 110.25% 115.61 % 123.23% 27.05% 27.86% 29.90% (45.31)% (29.13)% <<15.74)% 21.732.70% 19,692.09% 18,113.24% 6.67% 6.00% 6.93% 1,836.87% 1.926.41 % 1.927.46% Governmental Accounting Standards Board Statement No. 5 requires the presentation, as supplementary Information. of certain 10-year historical trend information. Since the required standardized measure of the pension benefit obligation was not determined prior to the actuarial valuation as of January 1, 1988. the historical trend data that is dependent upon the amount of the pension benefit obligation Is presented for only nine years. The prescribed disclosures relating to revenues by source and expenses by tYpe are presented for the most recent ten years. These disclosures are presented on pages 122 ~ 124 of the City's Comprehensive Annual Financial Report. NotD (4BI Poltco Supplemental Pension Fund A supplemental defined contribution pension plan exists for all eligible policemen which Is funded by earmarked revenues received from the State. These revenues. which comprise the plan contributlons of $665,644 in the year ended September 30, 1996. are obtained from an eighty~fjve one hundredths of one percent (.85)% excise tax on the gross receipts from premiums collected on casualty Insurance policies covering property within the City's corporate limits. The contributions represent 6.21 % of current year covered payroll. > .::J 8-54 q~. "09 . . t; .1 ~ ~:'o "..: t.": ," t 1lo'" + ~ ~ CITY OF CLEARWATER. FLORIDA NOTES TO ANANCIAL STATEMENTS SEPTEMBER 30. 1996 , ....') The Police Supplemental Pension Fund is authorized by and operates under the provisions of Sections 2.471 through 2.480 of the Municipal Code of the City of Clearwater and Chapter 185 of Florida Statutes. Under the plan provisions, the total monies received during each fiscal year, after payment or provision for all costs and expenses of management and operation of the plan, are allocated to participants on the basis of the total number of shares to which each panlcipant Is entitled at the close of the fiscal year. Each participant fs entitled to one share or a fractional share In the fund for each full year or a portion of a year of service as a police officer of the City, with fractional shares being determined by the number of days of service in each calendar year, assuming I 355-day year. . All police officers as defined in Section 26.70(0) of tho Code of Ordinances of the City of Clearwater who are elected. appointed, or employed full-time by the City are eligible to participate in the plan. There aro no employee contributions to tho supplemental plan. Benefits are fully vested fQr a lump sum distribution after twentY years from the date of hire, with provision for panial vesting after ten or more years under the plan. Accumulated benefits are payable In full in case of death while employed by the City or in case of total and permanent job-related disability. Non- vested participants' account values upon termination of employment during any fiscal year are added to tho monies received during that fiscal year for allocation to 1he remaining participants in the plan. For the fiscal year ended September 30,1996, the covered payroll Is $10,713.053; the City's total payroll for th.e same period Is $55,343,791, During this period, thero were no changes in plan provisions. As of September 30, 1996, the pension fund had no investment type or similar relationships with any related party Including officers and employees of the Pension Plan, the sponsoring City of Clearwater and organizations included in the reponing entity. Since the entitlement to benefits is based entirely upon the alfocation of monies received by the plan to the participants' share accounts, there is no actuarialliabllity on the part of either the State or the City. Note f4C) F1remen's SuppJement81 Pension Fund A supplemental defined contribution plan exists for all eligible firemen, which is funded by earmarked revenues received from the State. These revenues, which comprise the plan contributions, amounted to $436,933 in the year ended SePtember 30, 1996, and are obtained from a one and eightY-five one hundredths percent (1.85%t excise tax on the gross receipts from premiums collected on property Insurance policies covering property within the City's corporate limits. The contributions represent 6.67% of current year covered payroll. As the plan Is described as a money purchase p'ension plan whereby contributions are allocated based on the number of days worked during the fiscal year ended September 30. and interest earnings allocated based on the beginning balances in each paniclpant's account, there Is no actuarial liability on the pan of the State or City. The investments of the Pension Fund are managed by the Barnett Bank Trust Department. The Firemen's Supplemental Pension Fund Is authorized by and operates under the provisions of Sections 2.441 through 2.450 of the Municipal Code of the City of Clearwater and Chapter 175 of Florida Statutes. Eligibility requires two years of credited calendar year service as a firefighter with concurrent participation In the Employees' Pension Plan. There Is no employee contribution to the supplemental plan, and benefits are vested for 8 lump sum distribution at ten years unless there is early retirement, disability or death. Non-vested participants' account values upon termination of employment are reallocated among the remainIng participants. ~...J 8..55 qrg ~()GJ ~V~~~~~~ . ' " " " '..' ,.. ',...", ,,), :--,' "', , t,:4" ',,,", l"o,,,, "ffI .,'''' KJl.., .... ''''',', ','.' "." .' .... ;: .'.,,' \?h~"',;;'):';{:!i,:'~ :~!:;;;(;P'~< ~;.~1;:,tm,;j"\'ir;J!L:~%~;;r:';:Z,i~,j:?:!il[;,~;&/~'::;;;,;\!;;~;{i;r;:~; , , . ,- ,. . ,I ~ CITY OF CLEARWATER. FLORIDA NOTES TO FINANCIAl STATEMENTS SEPTEMBER 30. 1996 For the fiscal year onded September 30, 1996. the covered payroll Is $6.558,620 the City's total payroll for the same period Is $55,343.791. During this period, there were no changes In plan provisions. As of September 30, 1996, the pension fund had no investment type or similar relationships with any related party. Including officers and employees of the Pension ptan, the sponsoring City of Clearwater and organizations included In the reporting entity. Note (4D) Doferred Compensation Fund The City offera Its employeCfs 8 deferred compensation plan created In accordance with Into mal Revenue Code Section 457. The plan. available to all City employees, permits them to dofer a portion of their salary until future years. The deferred compensation Is not available to employees until termination, retirement. death, or unforeseeable emergency. All amounts of compensation deferred under the plan. all property and rights purchased with those amounts, and all Income anributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan~, subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City In an amount equal to the fair market value of the deferred account for each participant. It Is the City's opinion that it has no liability for 10sGes under the plan, but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors In the future. In aceordance with the requirements of GASe Statement No.2, the operations of the plan are accounted for In an Agency Fund in the accompanying financiaf statements, with the Invested assots being reflected therein at market value. .~') Noto (4EJ POlt Retirement Benefits The CitY provides no material post retirement benefits to retired employees or to their beneficiaries other than those described in preceding Notes (4AJ through (40). Note (6) FIxed Assets General Rxed Assets: A summary of changes in General Fixed Assets follows: land Buldlngs fmprowments Other Than BuildIngs Machinery end Equipment Construction in Progress Balance Octobor1,1995 $ 32,030,064 16.831,983 43,897,567 22,025,697 8,632.531 S 123,418,062 Additions $ 42,961 8,339,855 9,969,738 4,657,933 8,209,892 S 31.220,379 Oeletlons S 15,000 Balance September 30, 19 $ 32,058,045 25,171,838 53,887,305 26,321,190 8,209,892 $ 145,628,270 362,640 8,632,531 $ 9,010,171 Donated land: land accounted for in the General Fixed Assets Account Group includes a number of parcels that havo been donated to the City. With respect to certain parcels, tho instrument conveying title to the City contains restrictions as to the purpose for which the land may be used by tho City, with the proviSion that titfe shall revel1 to the donor jf such restrictions are not fol/owed. Land subject to such restrictions Is carried at estimated fair market value in the hands of the donor Immediately prior to the donation; therefore, the valuation used does not reflect the impact the restrictions as to use might have on the fair market value of such land in the ownorship of the City. I ..J 8..56 '16;OCf " .~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Proorietarv Funds: A summary of cost and accumulated depreciation of fixed assets at September 30, 1996 of the Proprietary Funds follows: Land BuDdings Improvements Other Than Bundings Machklery and EquIpment Construction in P10gress Enterprise $ 6,523,188 17,539,639 235,879,435 9,575,142 15.557,931 285,075,335 72.079,017 $ 212,996,318 Internal Sefvlce $ 696,681 3,056,373 475,447 32,156,649 '. 92,0-42 36,477,192 22.981,040 $13,496,152 ~ Estimated ~ful ute (Years) 10-40 5--50 1-33 less Accumulated Depredation Net Cpntributed Proo9rtv: As of September 30, 1996, water lines having an estimated cost of $4,628,805, sanitary sewer lines having an estimated cost of $7,301,370, and storm sewers having an estimated cost of $3,854,355 are reflected in the balances of the proprietary fixed assets. ........,) '.,... Assets Recorded Under CODital LeasfJ~: Assets recorded under capital leases and tho accumulated depreciation theraon (for proprietary fund assets) have been Included under the appropriate categories In the summaries and schedules presented previously In this note in combination with similar Information for owned assets. Note C6t Property Texes Property tax revenue is recognized In the fiscal year for which the taxes are levied provided the availabllity test Is met, In conformance with NCGA Interpretation H3. Property taxes for the following fiscal year are levied by commission action In September of each year. This levy Is apportioned to property owners based on the previous January 1 assessed values. Tax bills are mailed out on or about November 1, and the collection period runs from November 1 through March 31. On April 1 unpaid property taxes become delinquent and become a lien. Tax certificates are sold in June for real property with delinquent taxes. . Since taxes are not collected prior to November 1, the City does not record deferred tax revenue for advance collections. Unconecred taxes receivabre at year.end are recorded, with an appropriate allowance for estimated uncollectible amounts. The net amount deemed to be collectible but not current, I.e., not expected to be colle~ted within sixty days after the close of the fiscal year, is shown as a deferred revenue In the appropriate fund. All delinquent property taxes, except those levied specifically for the restricted purposes of financing activities accounted for in the Special Development Fund, are recorded In the General Fund. This is appropriate, slncl' for several years the budgetary and accounting treatment has been to recognize the tax revenues in the General Fund and to reflect the required transfers to the appropriate debt service or pension fund as operatlng transfers from the General Fund to the appropriate fund. ~~; 8-57 qg -09 ----..-~"'-- -- :~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 The City I. permitted bv State law to levy ten mills without referendum. Additional millage not subject to the ten mill limitation Is authorized if approved bv referendum. Tho tax rate for the vear onded September 30, 1996 was 5.1158 mills, of which .0289 mills represent the levy for general obligation bond debt service as approved in voter referendums In prior years. The non-voted tax rate of 5.0869 mills Is well below the statewide ten mill limitation. Note C7t Segment Information for Enterprise Fund. The City maintains nine Enterprise funds which provide utilities twater and sewer, gas, solid waste, recycling, and atormwater), marina, parking, pier fishing, and II combined retail center and convention center. Segment information for the year ended September 30, 1996 was as follows: DepreclaUon NIIt .nd Operlllng Operati~ Net Operating Amortintion Income Transfe,. Income ConCriblAlOfW Reven~ Expense (Loss) In (OIA) (LoIS) Owing V..r Wlter I~ SeMr S 32,243,586 S .4,382,250 $ 5,668.831 $ (1.397,435) $ 1.762,713 $ 334,195 0.. 16,1SC,T<46 810.222 2. 197,sn (1,162.518) 256,393 1,273 SoIkI WI.. , 1.819,358 363,603 707.78.4 (551,960) 331,605 Recyc:llng 1,554.339 206,048 1.43.985 (13,160) 3304,329 Sto.'mWliter 3,.454.221 835,345 (4C23.062) (855,9040) (1.076,856) 2,6.19,388 Marina 1,810,696 111.082 (156,775) (22,223) (2.286) Paridng 2.4114,880 139.701 93,998 (~<tO.l16) (17.87.4) PI8f' 60 '257,064 55,164 (123,289) (125,375) (2. no,5(6) Harborview 393,'769 67,107 (765.687) (6913,582) 785.169 ~,.'') S 70.122,659 S 6,970.752 $ 7.343.362 S (4,121.1~ T 7416,130 $ 969,233 '" ....~ Unre- hfdliont Dele60na to'll" TIIfm slri:fad to to o.bt Net Property Property Otbtanding W~ Planland ~ntand Total and Ottwt Capbl Food EClupmlnt ECluilment .Asset. liIbUies (Deficit) Equly Wrar and Sewer $ 6,1045.799 S (114.821) $ 205,252.028 S 79,m,T2!3 $ 23.590.574C $116,531,249 Ga. 6.103,883 (20,6043) 38.<06,208 23.474.625 &Ui.169 10.500.792 SoIlc1 WaD 525,5G8 (37.!i07) 10.J9.C,529 1,378,235 .4,-486,156 7.618,023 RecycRng 291.939 2.529,343 331.088 956.411 1.851,764 Stomn....ter 2,015,109 (500) 21,539,909 115.346 3,017,088 20,992,.4Gl! ....,... 173.413 1,600,063 324 281,159 1,6304,562 Pa~ 110,071 {11,S1n 4,300,913 522,78' 689,732 3,550,350 Pier &l 7.m (2.098,819) HatbofWrw 3,045.S63 14,551,118 {101.13O) 13.291..470 S 19,219,965 $ (2.343.807), $ 296,810,191 $105.556,128 $ 33.566,.59 $175.970,678 r Note (St Interfund Balance. As mentJoned in Note 11 C). individual fund deficits In the consolidated cash pool have been reclassified as of September 30, 1996 as Intorfund loans from the Capital Improvement Fund, which was selected by management for this purposo. This reclassification results In a corresponding reduction In the cash equity In the Capital Improvement Fund, offset by an Increase In Interfund recelvabl81. Tho amounts of the reclassified cash pool deficits, as well as other Individual fund Interfund payable and receivable balances (current), at SoPtember 30, 1996 were as fonowa: .1 .J ~-58 Cjg-oCJ ~7' -- i~ CITY OF CLEARWATER. FLORIDA NOTES TO fiNANCIAL STATEMENTS SEPTEMBER 30. 1996 Due from Other Funds Due to Other Funds DefICit i\ Other Oord In Other Fund Pooled Cash Receivables Pooled Cash Payables General S $ 15,000 $ $ 155,091 Spec1a1 Rewnue Fund: Special Program Fund 7.732 Caplal Projects Fund: Caplallmprowment 4,017,161 188.279 25,858,675 Ente~ Funds: Water and sewer Utility 13.599,763 Gas Utility 6B3,n.. 1.954,159 104,264 Solid Waste Utilly 999,817 82,474 Recycling WI)' "99.301 .151,162 Stonnwater UtIIIy 7,058,367 Yacht Basin and Marina 81.587 15.000 Parking System 310,010 HarboMew 1,144,967 684,869 Inlemal SeNlce Funds: Garage 1,647,801 1,378,133 AdmtnlstraUYe Serkes 188,279 ~) General Services 66,656 Central Insurance 267,355 $ 4,017,161 $ 26,562.677 4,017,161 $ 26,562,677 _I <:: 'ndlvidual interfund advances Uong.term) at September 3D, 1996 follow: Advances to Advances from Fund Other Funds Other Funds General S 324 $ 164,777 Special Revenue Fund: Special Development 8,956,774 Enterprise Funds: Solid Waste 1.31~.580 Yacht Basin and Marina 324 Parking 419,940 Internal Service Funds: Garage 134,B37 Central Insurance 10,276,354 $ 10,461,455 S 10,461,4155 Note (9) Contingencies end Commitments Utilities Services Tax Revenues . Public Service Tax Revenues of the General Fund are pledged as security for the Public Service Tax and Bridge Revenue Bonds, Series 1985 and for the Improvement Revenue Bonds, Series 1995, u PACT. Inc. PACT, Inc. Is a nonprofit corporation formed In 1978 for the purpose of financing, constructing, and operating I performing ans center. The City subsequently guaranteed $1,000,0000 plus accumurated interest on .. 1981 $5,500,000, mongage note for PACT, Inc., used for the 8-59 , qg~09 v- -----O'l'"'"""" - :~ . CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 construction of Ruth Eckerd Hall. As of September 3D, 1996, the remaining principal balance on the mortgage was .3,990,370, and the amount of the City's guarantee, including Interest, was approximately $2,437,443. City management does not consider it probable that this guarantee will ba called, and, accordingly, no amounts have yet been accrued or otherwise recorded on any of the ~ccompanyln" financial statemenu to reflect this possiblllty. Contineent Loan GuarantcQ On March 3D, 1992, the City Commission approved a contingent loan guarantee of .1,000,000 on . $2,500,000 note for the Chi Chi Rodriguez Youth Foundation, Inc. The proceeds of the note were used to refinance existing foundation debt Incurred to construct a golf course on I parcel of City owned land. The remaining principal balance on the note as of June 30, 1996 totaled $2,079,838. In the event of default, the City is obligated to contribute $1 million out of legally available non.ad . valorem revenues. In addition, the City has the option to retire the entire unpaid balance and assume ownership and operation of the golf course facilitY. At the present time, management expects the foundation to be able to meet aU debt service payments and does not consider it likely that the City's guarantee will be invoked. ",":.~) , '.c:'tl.~ Atrium Parklna Garace ODtion In November, 1993, the City sold the office tower and the top two floors and air rights above the Park Street parking garage it had purchased in March, 1993, to Atrium At Clearwater Umited (Atrium), I Florida limited partnership. The building and parking facilities sold for the original purchase price of $6.45 million. At the time of the property sale, the Community Redevelopment Agency of the City of Clearwater Florida lCRA) granted to Atrium the option to purchase the first two floors of the Park Street parking garage from the CRA before November 30, 1996. Atrium notified the CRA of Its Intent to exercise the option at a purchase price of $380,000, per an Independent appraisal of the propertY. The CRA subsequently notified Atrium that the appraisal was not performed in accordance with terms of the option and offered to proceed with the closing , on the property at a purchase price of $1,313,800. Currently the City and the CRA are engaged in good faith negotiations to reach an option price satisfactory to both parties. As of September 30, 1996 a total of $1,605,000 In CommunitY Redevelopment Agency of the City of Clearwater Tax Increment and Lease Revenue Bonds are outstanding and must be retired prior to a sale of the property. Outstandina Construction Commitmentli: At September 30, 1996, material outstanding construction commitments wore as follows: Construction Commitments .Q!.I.uta n dina . Capital Projects Funds Enterprise Funds Internal Service Funds $ 11,844;000 $ 6,446,000 $ 692,000 .~ 8-60 CfD--oq .' -, , ,," "0" "". -. ,.,'" ".. 't',.., ,,":].. ...., "J' "',,,, 'f ,', .'. ' "..;.. ,. , >', ~;,:,":;i,:':\:',,:')\"::):\i' %}),',/}t;;",,:j:;t, ;,',\:.:!'t;'".?",:"::;ii'..\" ',t",f'.'.' " ~. --- ~ -- "R' J- .. :~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL 5T A TEMENTS SEPTEMBER 30. 1 996 ,':."') ......:If Noto (10J Individual Fund Notes Noto (10A) CapltDllh1provement Fund The Capital Improvement Fund was created administratively to provide for combined accounting presentation of all capital projects from the City's various fund sources, except those projects financed from bond proceeds where bond ordinance provisions require the segregation of bond proceeds in separate funds. The majority of the resources of the Capital Improvement Fund are provided by transfers of capital project appropriations from source funds. The appropriations are held and Invested for the benefit of the source funds until the projects are completed or canceled, at which time the asset values are transferred back to the source fund or to the General Fixed Assets Account Group, as appropriate, and any unspent monies are returned to the donor fund. Transfers from the Proprietary Funds and expenditures for capital projects of such funds arc not reflected in the Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the Capital Improvement fund, but are reflected when expended as fixed assets in the respective Proprietary Funds. Note (10BJ Water and Sewer Utility Fund Contractual Commitment Under the terms of a 30-year contract between the City and Pinellas County which is effective through September 30. 2005, the City is required to purchase a minimum of 4 million gallons of water per day on an annual average basis from the County within each calendar year, with a maximum amount of water available to the City of 10 million gallons per day on an annual average basis. The rate for fiscal year 1995 charged by the County, which is set by the Board of County Commissioners, was $1 .3254 per 1,000 gallons, including a $.30 per 1,000 gallons surcharge designated by the supplier for funding capital projects. Effective October " 1995, the rate Increased to $1.7902 per 1,000 gallons, Including a $.60 per ',000 gallon surcharge for funding capital projects. The cost of water purchased from the County during fiscal years 1996 and 1995 was $7,434.927and $5,083,444, respectively. Nato (10C) Harborvlew Fund During fiscal year 1994, the City was Involved in the renovation of a former department store building to create a combined retail and convention center. An enterprise fund was created and space was leased for retail operations. The lease agreement is for ten years and contains a cancellation option under certain conditions after 42 months. Minimum future rentals as of September 30, 1996 are as follows: . Year Endina Seot. 30 1997 1998 $ 92,301 $ 75,000 \.~ Initial fund equity resulted from the following residual equitY transfers: General Fund, $ 535, 120; Special Development Fund, $3,180,000; Community Redevelopment Agency Fund, $150,000; and General Fixed Assets, $1,926,223. The Harborvlew Center began operations in January, 1996. '. Note (100) Internal Service Funds The function for overseeing the telephone charges was transferred from the General Services Fund to the Administrative Services Fund in fiscal year 1996. This function includes paying all telephone charges and collecting revenues from the various user funds. This resulted in a reduction In both revenues ;And expenses In the General Services Fund of approximately $700,000 in the current year as compared to fiscal year 1995. Conversely, the Administrative Services Fund had an Increase In both revenues and expenditures of approximatelv $700,000 in the current year as compared to the previous year. 8-61 qg-oC} %: fi"t:f :.,/;\}'~~'.i.}i.;;r ,>i f)Er}:i.rI;&,.\.~,:;1~1~~;\;!;:f;!~!:J!';j;:;;,g~.':;'\:i';::.~\~;!..'::'iSami:'; .......- ~ , , t"~ CITY OF CLEARWATER, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1996 Note (11 J EXCflSSIll of Expenditures Over Approprlatlon. Administration expenditures of the Special Development Special Revenue Fund totaled $372,972, whllo appropriations in this category for the current fiscal year were $300,000. Note (12) Fund Deficits The Special Oevelopment Special Revenue Fund has an unreserved accumulated deficit of $4,381,802 due to expenditures exceeding revenues. This deficit Is a budgeted deficit In anticipation of Local Option Sales Tax revenues ldesignated as .Penny for Pinellas.) to be received in future years. The Harborvlew Center Enterprise Fund accumulated deficit of $788,126 is a result of continued construction of the Harborvlew convention center which has not yet experienced a complete year of fun service operations. Note (13) Residual Equity Transfers Between Funds Residual equity transfers for all funds consisted of a net $6,328,749 transfer out. This includes a total of $3,353,438 net contributions to ProprietarY Funds with credits being made directly to contributed capital accounts ln the appropriate funds, a $839,060 return of contributIons with debits being made directly to contributed capital accounts, and net transfers Into the General Fixed Assets Account Group $2,136,251: Note (14) Contrlbuted Capital.. Proprietary Fund. The changes In contributod capital of the City's proprietary funds during fiscal year 1996 were as follows: V.cH :~'J WI.rand Bash .1Id SeWDr eaa StoI1l'MatIr Mlm.. PIer EO HarboMlw G.lr.~ "'-\t,..\' Utily Fund OOIy Fund Utiily Fund Fund Fund Fund Fund AddIio... ContJblllons from: 0lMr Funds . . $ 2.480,000 .s S $ 755,438 $ 118,000 Flderal and Stat. GBra BOG 37.500 o.wklplra 258,848 29,731 Pro~rt)' ~,. 704.441 1.273 Olhor Gownvnonlal Enttitt 151.022 Tctal Addtiona 3J.C,1~ 1.273 2,668,522 7a5,16i 11&,000 Rlwm of ContrbItt<S Capbl To Ohr Fundi (2.2eG) (2.nll,506) To OIhIr Go....rM'\II nIal EnlIiaa (39.13'0. Hit htdIIoRl (ReductioN.) 334,1e5 , .273 2,629.388 (2.2e6l l2.nll.506l 785.1eg 1111.000 Contrllutad Clptal October 1. 1895 es,lI70,lI04 e51 ,!SOtJ 18,37U75 397.t191 2,nll,&liS 13,294."28 3.ms,001 Conlrbuted ClpRll Stptl fri)er 30, 1 GSlO S M.204,m s ese.rn S 19,001.263 1395.005 1 S 1",079.595 S 3.123.001 The City's other proprietary funds had no change in contributed capital during fiscal year 1996. Note (15) Pending Utlgatlon In the normal course of operations the City is a defendant in various legal actions, the ultimate resolution of which is not expected to have a material effect on the financial statements, other than for amounts which have already been reserved and recorded as liabilities in the Central Insurance Fund. \~ 8-62 CJg ,,;OCJ '" - ~ ~-- / i 1 I ~ ENTERPRISE FUNDS Enterprise Funds are used to account for the financJng, acqulslUon. operaUon and maintenance of gowmmental facJIIUes and services that are supported prlmariy by user charges. Wator and Sewer Utility to account for tho rlllancJng, constructJon, operation and makltenance of the water and sewer serkes of the City from charges made to users of the serke. The serke area for water and sewer e>dends beyond the City limits. Gas Utility to account for the finandng, construction, operaUon and m~lntenance of the gas service of the City from charges made to users of the service. The service area for gas e:dends beyond the City limits. to account for the financing, constructJon, operation and maintenance of the solid waste serke of the City from charges made to users of the service. The service area for solid waste is cotennlnous with the City limits. Sofld Waste Utility Recycling to account for the financing, processing, aperaUon and maintenance of the City's recycling service from charges made to users of the services and funds re~iwd from the sale of recyclable commoditJes processed to meet market requirements. The service area extends beyond the City limits. ,~>t) "..~ \' Stonnwater Utility to account for the financing, construction, operaUon and maintenance of the stonnwater management system of the City from charges made for each dewloped property. The stormwater management area is cotennlnous with the City limits. . Yacht BasIn and Marina to account for the financing, operation and maintenance of the 20S. slip City marina and associated real property on Clearwater Beach from renls colleeled from users. Parking System to account for the financing, construction, operation and maintenance of the City's parting system, Including on- and off-street parking on Clearwater Beach and Downtown Clearwater from parking charges. to account for the operaUon and maintenance of the fishing pier from user charges. Pier 60 Harborvlew Center to account for the renovation, operation, and maintenance of a former department store buRdlng, creating a combined retail and convention center facility. " v 8-63 CJg-oCJ ': '," ",........""/".-...;,'. ..' "",' i ", .t.I"", '1,,', ',., ,'....l.,....".~.,.."..,'....., ' ..... ." . '..". '. .... . ~},i,:~.~}::\;.\~:/f.:>;~ :~:\:rYi;~?.':' ;': :~,":< :,>:.:::~,.'{~:;'!;: :':;::i.',&/':/~:; '/:..':\: t';,,{:~: ,,;,:::,:~); '~~ '/.'::;';.( ':/?f :r :: .'i:,~ i;:,.:.:,I,,;'>,;:,' ~::', ~:~/~': :';:'~;.:::~~; :::'..>'::i.::.(';:'; \: ;:' .j -~- - I' I 0"" :H ~.. a.. accompanying not.. to Financial St.tlment.. .8-64 qg~O~ ;. : , . .( t .0" ~f ~ .~, 1 . ..... . ..~. ~ Plge 1 or 2 ,. ~ , . , I 1 I .j: Yacht I. , . auln TIll..!' IItonnwI'., . ..,d p.,k1ng Pllr H.,borvl,w Utility Marine IVI'am 60 Cent.r , 81i18 1D96 J: I , . 'I I 1.450 5.100 100 8,475 8,718 I [ . 570.071 348,029 389,407 17,150,559 17,022,402 180.042 3,088 158,418 3,054,800 3,913,938 281.200 3,019.085 2."OO.oe3 ..e7.242 3,008 168.418 0.t173.951 t1.3a.ool .7,3871. U72,OlS} C159,285} 1, . 459,855 3,088 158,418 0,501,333 e,154,718 I. 2,341,eel 81,587 310.010 1.000.000 1 &,234,225 17,401,149 , 1. eO,09S ' 193.880 238,107 j 12.182 10,495 1.&24,207 . 1,304,495 5,283 13.32e 3,371,1587 448,338 775,707 1,158,518 41,717,942 42,742,913 , , , ,~) 325,300 30,388,(20 27,&58,478 '.",.., 31,390 31.390 31.390 4,71&,7oe 144,907 e, 143.3e 1 10,801,214 38,350 3.719,278 5,938.859 441 103,800 180,4BB 4,71t1,7oe 3B,791 35t1,t1eO 144.9&7 42,3114,129 44,590,429 49.940 49.940 .187,420 1,C01.Be2 1.748,e41 13,451,e9& 1,314,930 3,124,578 13,247,e33 212,G9lS,318 202,922,191 21,539,989 1 ,800,063 4,30t1,913 0 1<&,551,118 29B.910,191 292.189,594 ..- tContlnu.d1 , . ("',;'=. \:" , ' , B-65 qF'-o~ ,r;_,.~. '.;,~;.;~~;i!i})l1.:~'-'"u~",:--- . l~ S.. accomf'.nylng neu. to financial S,.tllMnu. 8-66 qg -09 T .... ~ ~ ....... "01 ~ 01 2 ,-, " "ann,',.,,, . Udlty Yacht Ia.ln and M,j(na TaUl. ,.rtdnll IrUe", n.r 10 tUrboNle w Ctn'., ,... '115 2<<n.728 30,1 28 ".670 425.171 2.271.871 3, , 61.822 . , 53,740 66,058 -'8,43 , '.432.477 1.206,486 1S2! 1BO,2t5 130,388 1 :. Hi,COO 352.1100 322,&U 1$84,008 2,15311,0211 3,1180, '88 13,416 7,430 82.758 83,812 27.1117 86.842 8S.B42 ClI.3M 25,6~ 7IEi,544 7111.852 .. 21.03t ",847 3811,216 311,1142 35.,41111 165,177 . 85,1175 , .259.~9 B. 1S1 ,704 8.690,113' 77,e78 477,5153 387,375 20,087 1,:Z1S3,:zn 1,265,315 127,720 3,8117.720 3.7...,64' 3,403,041 3,257.311I 77,1S711 147,007 11,131.80' 1I,M4, 1S;!1.. 432,176 165.177 233,782 1 ,2511,648 17.283,385 UI,:U5,1711 622,781 103,678,837 '8,000.418 ,~ 116,34e 551,387 5152,5110 ....~ &1.110 32. 1,319,10.4 ',872,803 115,348 32. _522,781 100,656.128 100,373,001 547.621 165.601 ?5ts.563 1,259,648 122,839,613 , 18.7111,171 115.1128,885 163,603 765,368 13.871.877 35:05-4.11 0 34,1112.3<< 37.600 17.7eo,4&O 17.7611,172 2U~ 2'07.1\8 34,1125.420 34.535,1543 232,002 ",881,31. 4,805,&00 ," ,11811 11.002.77. 8.890,888 19,001 , 283 395.605 755.358 "'.079,695 101.654,078 '00,584.1545 .38.645 20e,8S3 11.261.880 8,628.785 2,865,276 2.182,600 7,585,569 7,185,73\ 38,645 209,883 111,712.724 HI,fi77,"2 1,1181.205 t.2oo,312 2.586,100 1788.1261 64.703,876 63,3011,448 " 1.111,205 , .238.1157 2,7D.,DD2 (188, .,5) 7....'6,600 ",188,570 20,DI2.489 1 ,83-&,662 3.650,360 13.21n,470 175,170,<<178 173,"71,.'5 21,5311,1811 1.eoo,0f33 4.306,91 :I 0 "'.551.1111 2119.810.191 292,1111.5U ,~ 8-67 CJ8,dj I'.r;- " > . ,~ 0, . \~ f~~~0~,~~~ .',',. .. ,. . , d.',.. ',\. ...; . "... :,',' '..,< iii." .' J. ..... .,~..I.,'.. ....:...E/.,.,.,. . ...,.....,...,1"., :.~ : '....;:. ~, .. . ':"'., ::;:.;. ':";'~':' ',: ';'/ ,'. ., """':,;;;./>;'\:~>>'.'..:':':<~;,','~ ::',:,:'; :.;'/X':{/:;.,<"h7.::;,;).~::,.':.:;::.':'7!::'\:~:~::}"~:::',~>:;'..:;/!{>:\ :.;,..~.:;':::..:'::.:<.i~~;:.;:)":"'\~':/' : ;.:: .. ~ ~~-"~~ '. ~ Yacht ".h Totala Itormw.", aM Plrtlne PIer He~rv"w UtRty MorN I YUI", 10 Clnt'" 1880 111'" 3.433,988 1 .033.5~ 124.724 U.2lS9.874 48,080.124 20,223 144,Cl38 13.171.835 12,887,300 42,303 2,207.521 142.340 3,549.402 6.074,470 734,859 ~ 2,720 393.749 1.131.349 8:1:3,270 3.464,221 1,910,11915 2,41..880 2C17,O~ 3113.7119 70.122,Cl59 157,033,180 113&.0'8 620,803 643,353 150,fl8e 14.5llCl,7eo 14,768,016 785,301 92,339 111,011 14,S40,48C1 10,808.017 81,347 32.207 38.173 ~,502 300,8;& 2.4&2,863 2.1tS1.ti87 240,540 8,Cllile 211,307 &2 14.152" 3,&31,700 2.73-4.4117 115,040 2&,043 10,378 14,8&0 1.ClCllS.05C1 1,005.482 3,781,873 3,024.183 83&,345 110.739 133,807 55.104 87.107 CI,802,031 CI,035,ee, 409,Oeo 1 e3,210 702,270 Cl3,620 12,780 CI,914.220 CI,4tiO,&48 88,527 3,924 013,&74 1,358 429,467 1,773,9159 2,242,150 B,Bee 75.000 1,&05 110,480 Cl73.397 297,042 le,393 10,918 20,417 554 21,7"0 408,5815 367.340 1,tl39 1,178 263 12,309 24.lil80 23.305 8,540 49,390 1 CI.240 10,320 1.675 539,816 3415,090 1.10:0,100 70,981 1S,OClO 3,552 720 2,753,2Cl9 1,008,473 909 89.e30 2, , tl5 aS3 12!i1,47' 167,0415 27,408 25,600 1.~4 8.782 421,122 293,07& 27,&90 U,400 14.700 810 3211.030 234,850 .....) 45,102 60 841 8,225 1,038,833 573,530 .'1,....~ ~ 353 100,940 131,278 1,2711,SCl7 230,809 853.&49 23.532 tJOO.211 8,193,222 6.15&4.836 3.877,283 1,!il87,4" 2,320,882 390,363 1,169,4511 112,779.287 &4,tltl5,40e (423,Oe2) t1SIl,775} 113,089 1123,280) n1l5.08n 7.343,382 12,387,774 181.780 27,772 GO,3~8 014 3,159.712 3.7115,559 C2,870) n,088) 00.7891 ce,4271 121,0931 111,154,5081 C8,,"8.9521 C3431 (5,8141 (188,7211 C222.8501 120,0431 18,1841 C83. t03) Ci38.(42) elS.B!i4 300,782 105,080 23,25e 114.191 44,518 4,3-41 "'0 470,4511 "29.075 202.14e 1~.552 28,244 (2,086) 111.105 C2,47lS,103) 13.283,5141 1220,9' 81 122,2231 , 22,242 1125,375) 11199,5921 4,elS7,259 9,084.280 2.000 CB55,G40J, n"O,l1lS1 (4,121.1191 C4,143.2841 (96li,94~ (140,lll1t (4,121.1291 (4,141.2C4t (1,078,85e) 122,2231 C17.87") (125.375) (1198,582) 7415,130 ..942,0915 3,071,093 1,2Gl,1eO 2,837,404 4711,3991 189,5431 12,888,&70 72.513,158 838.774 83lS.774 (3.8221 C24.15381 (52.8741 C4.61l9.5S4J , 1,991,206 1.230,957 2.784.lt92 0 089.1251 74.418.000 72.08Ui70 = = ',~ 8-69 C;g-oCj CITY OF: ~EARWA~. R.ORIO!\ ENTERPNSE FUNDI ~ COMBINING 'TATEMENT OF CASH nows YEAR ENDED SEPTEMBER 3Q~ 1998 WfTH COMPARATlVE TOTAL FIGUFlES FOR 1996 W.ter Ind Bolld S. \'I\W 0.. Wilt. lbC)'dlng Utl1lty UtlUtv UtilitY UtllltY Ca." Row. 'rom Op.r.t1ng Acti\oitl..: C..h R.celvld from Cu.tomer. . 32,043,182 18.000.900 11.91 1,383 1,5904.170 C..h R.atlvld from Other Fund, C..h P.yment. 10 SlJppll.rl (11,871,1551 48,890,301) (4,028,3381 (177,5701 C..h Plymenll to Empfoy... 15,801,9091 12.799.451) 13.408,782) 1520,939) C..h Payment. to OtMr Fundi 44,845,004) C1 ,725.224) 13,250.9171 1600,0781 Other RlwnY" 39,803, 212,240 3 1 ,897 Ntt Cllh Provided (Ulldl by Operating Actlvlti.. 9,583,137 2,798.184 1,257,245 395,582 Cllh Flow. from Nonc.pllJll F1Mnclng Actl'Jitl..: Oper.ung Tr.n.fatw In Op.rating Tflnaf.... O\.It {1,3i7,"351 (1,162,5101 1551,960) (13,1601 Rufdutl EquItY Trtn.'", 0Vt 124,514) R.tum of Contributlona Gr.nt R.v.nu. 30,688 183,140 Intar.lt PakI Rltcllpt of Calh on Loana tonrom Othlr Fund. 104,268 847,975 173,974 Pavment 0' C,.", on Loan. to/from Other Fund. 1381,084) 11,538,3941 189,0991 (251 ,484) Ntt C..h Provided IU.Id) bV Nonceplt.1 FlnlRelna Actlvltttl IU98,787) 0,852,9371 14315,3971 l81,504t Cah Aowo from CapItal Ind Raleted Financing ActfvlUal: ;<;, Prtnd~ Paymlnts on C.bt (4,012,830) (540,698) 129,171) (134.8811 ',., ,,, Int.,..t P*d (3,081,<<9) (852,8.045) 11 ~O,153) 131,827} Aoqulsition 0' Fi:ud A...lI (5,578,955) t15,103,883) 1487,Oll3) (291,939) Sol. 0' RIC.ct A..ete Proc.ed. from 1"Ulnc. of Cabt 8,&15,000 181,200 PlyfNnt of Bond Ja,uI Co.ts (54,680) Cllpiul Contributed by: Othor fundi Other Govlrnmanla1 Entltlel Property Owne... 74,441 1.274 O.Vlfop.... 184,945 N.t Ca.'" Provided (U.odl for Capital and R,lated Financing Actl'Jitl.. (12,393,15481 1,2154,3158 (636,387J (283,047) C_h Flow. from Invtlung Acti'w'ftiea: Purchase of InVOIlmant S.curitl.. 3,847 InCtr.st on Inv'ltmln~ 2,588,548 40.161 255,908 51,991 Proceedl 'rom the sat.. end Maturitlet of InVUlmlnll 2,211,330 Nit C..h Provided bV lnveltlng ActlvltlClI 4,799,878 50,008 255,908 67,991 Nit 'r.cr...1 (06cr..n) In C."h and Ca.h EqulvllDntl 270,600 2.259.ts03 440,387 89.022 C'lh and C'lh Equlv6lent. .t Beginning 0' Yeer 33.228,549 5,733,282 3.289.0(12 596,512 Ca.h .nd Cllh EquIv.llnt. .t End 0' Yaar . 33.499,149 7,992.885 3,729,429 884,534 Colh Ind C..h Equlvat.nt.: Ca.h cn Hand and In Bank. . US 1,500 200 I Equity In PooItd Cllh and InvDltmentl 11,992,(17 1 3.185.848 1584,534 RIIlrictlKl Equity In Pool.d Caah .nd lnvulmen.. 21 ,5015,353 7,991,385 583,381 ~) . 33.499, t 49 .. 7,992.885 . 3, 729.42~ 684,534 il- S.o accomp.nylng not.. to Anenelal Statlmlnt.. 8-70 Qg"-09 __R...... --- ~ .. Pag. 1 01 2 ~ Vlcht ...In Tut.t. IlotmWac.r and Pllklng Pia, H.rbDfYkw UtJ1ltv M.rtn. CY"tom eo Cen,a, , 1998 '995 3,477,952 1,128,842 2,382,0851 287,OG4 317,472 89,803,034 88,740.102 89.e20 65.209 134,829 246.731 n, 305,71 01 (1.0150.5941 (870.1.....1 ' 1104,6051 (1,059,700) (29.374,8211 (22.581,0611 (927.8741 (511.7341 4529.5381 t1 55,789) (14,654,1181 114,728.0131 (711,9501 1340.1631 1705.&341 (77,t1331 433,6171 (12,359.4711 (10,445,2761 23,255 44,S71 309 4,341 410 358,627 308.0402 4&7,574 23,952 242,391 166.6221 (775,3411 13,908,082 19.538,945 2.000 (855,9401 (1 f14.t1541 (4,145,6671 (4.143.2641 424,5141 1123,1741 1822,4351 88,954 300,782 251,918 (4,6151 (21,381) (25,996) (4,6481 148.453 33.215 78.557 4,114,331 5,500,772 1,939,632 '367 .0091 129,859) 186,7061 '2.743,635) 16,841,0411 11,222,9491 118.5U (218,1441 73,942 4,179,904 11,138,2581 (9,741.012) ~:,.) (15.3931 145,000) 1443.1421 (5,220.7151 45.810,9811 (2,8701 (7,792) (58.8841 (4,141,4201 14,888,8221 (2,480.5341 1173.413) (38.5531 (7.7201 (4,160,7881 09.322,8281 114,133,5021 945.946 159,770 9.155,970 110,938 (54,8801 41.110 2,480,000 23.508 755.438 3.258,948 7.684,278 149,388 149,388 106.873 75,715 158,249 184,945 780.995 290,3f11 '202.8971 1540.5791 (7.7201 13.405,3301 115,914,6791 115.024,918) 3,847 3,178 1S1.7&O 29.408 eo,328 824 3,220,924 3,743,378 2,21 1,330 '\ 824 5.436,101 1111 .780 29.408 60,328 3.746.5511 1283,2541 (30.7451 (456,004) (4001 57 2,289,246 11,480,4291 853,325 380.224 1.207,201 ~ 43 45.287,598 46.7118.027 1570,071 349.479 751.187 0 100 47,576,844 45.287 .598 1,450 5,100 100 8.475 8.718 670.071 348,029 389,407 17,150,580 17,822.402 ',,) ---158,890 30.417,809 27,858,478 570.071 349.479 751,197 0 100 47 ,5715,844 45.287.598 , CConUntadl B -.:11 q8 -09 ~tII_y- ~ ~'o;>....... - ~- ~ CfTY OF et.EARWATtRf FLORIDA ~ ENTERPIUIE FUND. COMlUNlHGlaTATEMEHT OF CASH FLOWI. Contlnuad ~"ENDED '~IIEft 30. 1990 WJTH COM~~AAT1Vt TOTAL FIGURES FOR 19Q1 w.tar IInd 10114 "WM 0.. WMttI Jkcyclno UtmlY ~....!X.- U11tIty UtIIty , RtconclRatlon of Optritlng Income 11.011) to N.t C..h ProvidMi to.Mi) by Oper.tlng ActMtln: Operltlng Income (Lou' . 5.888,831 2.197,577 107,784 143,'815 Adju.tment. to Reconcil. Operating Income (Lo") to Net C..h Provided fUnd) by Op.rQtlng Actlvhi..: Other RIVlnuO from Nonoperetlng S.ctlon of Incoml Statement 39.803, 2. 12,240 31,897 Depreciation 4,283,322 767,207 363,212 206,048 Provlllol'! for Uncollectibl. Account. 93.177 fl.354 . 791 285 Cepltllllz.d labor and Interfund Chlro.. 1385,303) ConetNcdon In proo,... RecllltmOd a. Expen.. t89,2oo) Change In A..." Ind U.tlllltl..: Deer.... IInertell.) In Account. R.celvable (384,250' (191.707. 11,159 38.831 C.cr.... IIMrllll) In Amount Du. 'rom Other Gowrrvn.nlll Entltl.. 78,038 D.cr.... (Ine,....) In Invantory t7,5251 1329.1711 Deer.... (Incrllll' In Pr."lIId Up.nt" 0701 B.812 ~~) lne,.... ICler.uelln Accounts ,nd Contractl Pay.ble 103,709 81,757 1 4.709 4 '~,""'" lner.... In D,po"l# 107.797 37,851 80,075 COlero...) In D.f.rred RflW....D 110,000) Incr.... fDeCIlIIe) In ACCNed Plyroll 57,717 37.234 47,81& 5,453, Tot" ^d)u.tmln~ 3,894.308 600,597 549,481 2151,517 Not Cllh Provided IUud) by Operatlng AclMdlll . 9,583,137 .. 2, 79B,1 54 t 1,257.245 395,582 Nonclllh Invlltlna. Cl!loltllol . end Anllnclna ActiYitfl!.i During fillclll Yllr 1998, the Pillr eo Entlrpril. Fund w.. cloud end tho oporation. movld to thl Cenar" Fund. Tr.",I.,. to the Gln.r. Fund Incfuded pltty clIIh, '500: lqulty In pOolod clIIh, ('152.971.8"'; Inventory, 17,312.70; .nd mlle.nln.ou. pay.tll... I'" ,927.17). The.. tllnlfore rnullod In a nit rllldull equity trenaflr of '157,088.31 from tM G'Mr. Fund to the Pl.r eo Enr.~ri.. Fund. AddldoMIlV I fote! 0' 12..211,792,23 In fixed ".llt. 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P. 1 of 2 pITY OF CLEARWATER, FLORIDA .~ " GAS UTILlTV ENTERPRISE FUND COMBlNINCJ BALANCE SHEET UNAUDITED SEPTEMBER 30,1997 WITH COMPARATIVE TOTAL FIGURES fOR 1996 Unaudited Audited 1997 1996 , Assotll Current Assets: Cash on Hend and In Banks $ 1,500 1,500 Accounts and Contracts Receivable: BlIIed 920.649 914,217 Unbllled Charges EstImated 778,000 678,8QO 1,698,649 1.593,017 less: Allowance for Uncollectible Accounts '39.87S1 '36,0401 , Total Receivables, Net 1.658,771 1.556,977 Due from Other Funds 1.410,926 663,774 Inventories, at Cost 976.527 1,197.849 , Prepaid Expenses Bnd Other Assets 219 .,...-:; ',' Total Current Assets 4,047.943 3.440,100 " , "'''i'.'Jo ,RestrIcted Assets: Equity In Pooled Cash and Investments 5,117,669 7.991,385 Investments. At Cost or Amortized Cost 750.653 Interest ,Receivable 1 6,295 'I Total Restricted Assots 5,117,669 B.768,333 Deferred Chargee 413,290 434.802 Property, Plant and Equipment, Net of Accumulated Deprec1atlon 28,789.764 26,602,973 , , $ 38,368,666 38.436,208 (;) :qg-O? ,I .... "_'. .u ~ ~ 'f.... ",' P. 2 of 2 CITY OF CLEARWATER, FLORIDA. GAS UTILITY ENTERPRISE FUND , ~ COMBINING BALANCE SHEET '\ UNAUDITED SEPTEMBER 30. 1997 WITH COMPARATIVE TOTAL FIGURES FOR 1996 Unaudited Audited 1997 ' 1996 , Liabilities IInd Fund Eq\;I!!'l Current Llab1lities (Payable from Current Assetsl: Accounts end Contracts Peyable $ 388,611 399,553 Accrued Payroll 342,853 260.180 Accrued Interest Payable 45,921 Due to Other Funds 104,264 Duo to Olhor funds (Def/elt in Pooled Cash) 2,054,396 1,954,159 Current PortIon of Long-Term Lhibilities: Notes, loan Pool Agreement sot! Acquisition Contracts 29,854 Total Current Liabilities (Payable from Current Assetsl 2,785,860 2,793,931 Current liabilities (Payablo from Restricted A5s~tS): Construction Contracts Payable 37.000 259,617 Accrued Interest Payable 119,768 204.3,59 Current Portion of Long.Term Llab11itlos. Revenue Bonds 340,000 320,000 Customer Deposits ~~ 8B2.884 Total Current L1abllitles (Payable from Restricted Assetsl 1.516,~ 1.666,860 ,Total Current L1ebllltles 4.302.302 4.460,791 C~ ,- Long-Term Liabilities, Excluding Current Portion: Revenue Bonds 23.159,746 23.474,625 Total long- Term lIabllitios 23.159,746 23.474.625 Total Liabilities 27.462,048 27.935.416 Contributed Capital: Other Funds 654,532 625,624 Property Owners 33,896 33.165 Total Contributed Capital 688,428 668,779 Retained Earnings: Reserved for: Revenue Bond Requirements: Debt Servicll 1,766,626 1.756,626 Renewals and Replacements 300,000 300,000 2,056,625 2.066.626 Unreserved 8,161.565 7,785.388 Total Retained EarnIngs (Deficit) 10,218.190 9,842,013 Total Fund Equity 10,906.618 10.500,792 ~ 38,368.666 38,436.208 ::; Cf6 ~09 .~-_-r.,.,,~. .L.,..".'.L~""D : ~~. I"~I' . ~ Ie' ... l' I , I ! I CITY OF CLEARWATER, FLORIDA GAS UTlLlTY ENTERPRISE FUND , COMBINING STATEMENT OF REVENUES. EXPENSES ~ AND CHANGES IN RETAINED EARNINGS , . UNAUDITED SEPTEMBER 30, 1997 WITH COMPARATIVE TOTAL FIGURES FOR 1996 Unaudited Audited 1997 1996 Operating Revenun: 511 el to Cus10mers . 16,704,519 16,40B.6B7 S.,vlt:~ Charges to Cu.IOlfl/tfl 772.732 758,159 T otll Operltlng Revenues 17,477,251 16,164,746 Operating Expenses: Perianal Services 3,408,511 2,836,685 PurchlUS lor Resale 6,934,688 6.427,312 Operlting Mllerl.11 and Supplies 109,215 121,067 Trlnsportltlon 379,819 409,417 Utility Servlee 58.697 61,032 Oopraclltlon 789,724 767,207 tnterfund AdmJnlstrltlve.chargas 872,430 8'58,630 Other Current Chlrg ea: Profeulonll Felli 260,594 182,480 Advlrti.lng 337,322 407,093 Communlcl,lons 164,078 152,850 Printing Ind Binding 6,268 9.581 '::) Inluranca 183.650 184.280 Repal" Ind Malntenlnce 69,477 187,136 R.ntlls 37,360 35.784 MiscalJ.neolJ$ ]) 1,884 165,136 oltl Processing Chllglll 96,990 107.610 ' rllllts 1,068.220 987.515 Provlllon for Eltlmated Uncollectible Accounts 45.861 6,354 Toral Oth" Currenr Charges 2,380.704 2.485.819 Totll Operating Expen.n 14,913,788 13.967,169 Opelltlng Income CLoll1 2.563.463 2.197,677 Nonopllrltlng Revenun IExpensel!: Earnings on Investments 406.213 46,161 lntarlllt ElIpense IInd FI~clll Chlrges 11,513,2991 (971.4091 Amorti:atlon of Bond Oi.count Ind IlIIue Costs 146,6321 143.0151 Gain II 01511 on Exchenge of Assets 120,6431 Other 132,134 212.240 It ,021.5841 1776.6661 Incomll lLossl Before Operating Trlnsfllrs 1.541,879 1.420,911 Dperltlng Trlnsfers Out n.165.702) C1.162.5161 11.165,7021 n,162.51BI Net Income CLossl 376,177 258,393 :J Retained Elrnlngs IDoficlt}, Seginnlng DI Vilr 9,842,013 9,593,620 '. Retllned EarnIngs IOallcltl. End of VII' . 10.218,190 9.842,013 Q8' -()Cl Page 1 of 2 CITY OF CLEARWATER, FLORIDA tJ GAS UTILITY ENTERPRISE FUND COMBININO STATEMENT OF CASH FLOWS UNAUDITED YEAR ENDED SEPTEMBER 30.1997 WITH COMPARATIVE TOTAL FIGURES FOR 1996 Uneudlted Audltod 1997 1996 Cash Flows rrom Operating ACllvltlu: Cash Received rrom Customers $ ......... 16.000.900 Cash Received horn Other Funds Cuh Payments to Suppliers 19,104.0861 18.B90.3011 Cuh Payments to Employees 13.325,838! 12.799.4511 Cash Payments to Other Funds 11,678.0621 11,726,2241 Other Revenuos 132.134 212,240 Net Cash Provided IUsedl by Operating ActlvlUes 3,590.534 2.798,184 Clllh Flows horn Noncapitel FinancIng Activities: Operating Transfers In Operating Transrers Out 11.166,7021 11.162,5181 Reslduel Equity Trensfers Out Return of Contributions Grent Revenue Interest Paid Retelpt of Cash on Loens tolfrom Other Funds 847,975 Payment of Cash on Loans toffrom Other Fundi 1731,1791 11.538,3941 Net Cash JJrovlded IUslldl by Noncapltel finanCing Activities (1,B96,8811 (1,862.937! '~) Ce~h Flows from Capital and Related Financing Activities: Principal Payments on Debt 1349,B531 1540,698) "..... Interest Paid 11.643.8111 lB52,645! Acquisition of Fixod Assets 13,776.5161 16,103,8B31 5111e of Fixed Assets Proteeds from Issuance of Debt. 8.915,000 Payment of Bond Isr.;ue Costs l54.6aO! . Capitel Contributed by: Other Funds 28,90a Other Governmental Entltlos 741 Propeny Owners 1,274 Developers Net Cash Provided IUsedl for, Capital and Related Financing Activities 15,740,5301 1,264,368 Cash Flows 'rom Invostlng Activities: Purchase of InvBstment Securitiu 3.847 Interest on Investments 422,508 46,161 Procaeds from tho Sales end Maturities of Investments 750.663 Not Cuh Providod by Investing Activltios 1,173,161 50.00B Not IncrollSe IDacroaselln Cash end Cash Equivalents 12,873.7161 2,259,603 Cash and Cash Equivelents at geglnning of Yenr 7,992,885 5,733,282 Cash Imd Cash Equivalonts at End of Venr $ 5,119.169 7,992.886 Cash and Cash Equivalents: Cash on Hand and in Banks $ 1.500 1,500 Equity In Pooled Cash and Investments Restrlcttld Equity In Pooled Cash end Investments 6,117,669 7,991.3B5 <:J $ 5,119.169 7,992,886 . lContlnuad) 51111 accompanying notoa to FlnancJal Statement., 98' -OCJ , ;t< -" t,.' . "',.....', ",,,,.,,.,,, ," . .'..,',' ," 1;.-" .. ""D" ".".'(" (.'...',!l'O.' ....."'..". ':. ,:.', '..',.... ~,:,'.'.. :::':.,:';::::.['J:<':~'>~, :,\:','~:':"Ii1~~,i,~':l,\;;;%::(t":(::~:',;:.,~:l~./'\!X.:(: ,Y:.:~i.: ~t I . . ,<' ., " , , ~ r' I P. 2 of 2 CITY OF CLEARWATER, FLORIDA ~ , GAS UTILITY ENTERPRISE FUND COMBINING STATEMENT OF CASH FLOWS UNAUDITED YEAR ENDED SEPTEMBER 30,1997 WITH COMPARATIVE TOTAL FIGURES FOR '996 Unaudited ' AudIted 1997 1996 ,Reconciliation of Operl!ltlng Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating Incomo (Loss) '$ 2,563,463 2,197,577 Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operatlng Activities: Other Revenue from Nonoperating Section of Income Statement 132.134 212,240 Depreciation 789.724 767,207 , Provision for Uncollectible Accounts 45.861 '6,354 Capitalized labor and Interfund Ch~rges ConstructIon in Progress Reclassified as Expenso Chango In Assots and UabUitles: Dec~oase (Incroese) In Accountft Rocelvable (147.655) '(191,707) , ,::) Decrease lIncreasolln Amount Due from Other Governmental Entitles" Docroase lIncrease) In Inventory 221.322 (329,171) . ' Decrease (lncreaso) In Prepaid Expenses (219) 8.812 Increese IOocreaselln Accounts and Contracts Payable 1233.559) . 61,757 Increase IDecrouelin DeposIts 136,790 37.861 (Decrease) In Deferred Revenue 110,000) Increase (Docrease) In Accrued Payroll 82.673 37,234 . Total. Adjustments 1.027.071 600,587 Net Ca...h Provided (Used) by Operating Act/vities $ 3,590,534 2,798.164 Q 18 ;'OC;, ~.~...,""","< I(.'. /~" .:...t:'" ~ ..... , ,.-.- - . .' I. ". ,...~~':~' L~)',,~~_,~~:,'.~-l:,'i':;Io.c,.\t:~.~ .~.~.,~~I . : n' ,I.:: ., :~"'... .1 ,"' , " I'.. .',,:,' .i . <;;'~' ", .' : ir" ,"", ' ,..~l. r !. ~ ,'I" . . , ,1' . .:a .- l.:-' , ~ S .' , " " I . ~ > ,:'.. ',.', y(.1 c" " , \'",' , :~ I" .';T {';.,:\: ~ '; ~. .~. .~ ~~, .:.~'o. c -.,. ,C ~] . . o~<, . . ? "" " ~ ',.1 . ~(;<.. ;",~ t-'d.... ::/;,,: ' t.: ,;~~ ;., .. ~ ';;/'"'" .({' ." I" ",i,"" .~\:,'..\ ). ' . . : :,~, "tL'. . ,~..t:, . .... ..' . .::<.. . .,.:c .,' . f:- .:" :./':. " 1. ~ . ~ ~ . " ~.c "":~o ~:' . ;:',' ~ ' .' , " ',' , ' APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE . i ~ '. , t ", '" OJ ;;2 '{ qg -tJ 9 .~;:.: . to< . .. ~ ; .>~~~t1-j.""'.lii,."'\.'t~\l.~~:~.....~....._a_~...""~'.~I~"',\~ ~.,~, ..~ .....'~'i." >," I , ... T' ~ '. ~. l ;,., .. . . " ~ J t .; \ ~ ~ : ~ (., .~, c ;." J "'~ <'. , . l' ~ .' '.:, .'; \ ~ : ;.,.. . ,-" ~ . . : .: . ~ " .: i c: . .. ,:.. . ... . , ,~,.~.,<~~.;~>..~.. ~' <;\..,," :i,\ >.::.::'....:'\ ,~~:. ,. >':. :'~:~:~~;~ ,:::\ '< <:,:,': :>"'~ :>, :,..:./ ; ., .. '.. c. .. . ,'. ... ~ .. '. ' , ... -. ; ~ .. " ~, . . '...... '.. .. ,. I c. ~\. '. . . --- ~ , .. ::.; '. ... ;.:' .. .'. ____u, ';'. ~~:;&:?:' ':.I'rp:.'t!:"'::" " . ., -I: .,... .. l -:-.: ......~ r '...... ~.!... ..1..... ,. . i , I.. . ( I ...'...,.':'. ./..:..'I~.~.::':.: .'~.:". ,~:T'~':': ':"';:I~'/ ':':, +.",' ;., .'.'> ;or. . " .'. ~ < .' '.. .J ' , . .. :.. i ~ :. . . . ." ,.' . I . .. :.) '.. ..'. . r ~. ~ , .'.' ~ r ,. . . "'. .....-.' ,., , ..;";_:~::',:~,:..:":',: ::}'!:, fl';tt/':I.~J?::;:;n"16:b .,,",;::;' ':; >;: .., :,~ . . . .'. .' + .. i ., , . ~ '. \ " . ,~..' . t I. , '. >. "... . . . . ---.: '. '. '.: , '. ," ':""~,i',"":'::':':',~':~,,',:: " ',~; ."'..<')';, ';, ';,.... ,.. ""."." " . j. .. . . ',.:j r t. ,. .' I " , >, ~ ~.~:'~, ::+;~ '.,.... .'. '. /. ::..' . ... ..' .1', ' ,'. 'I :':'~l:'( ., '. ~~ '. I: . :',;:' <' '~, ~ :. ~ . , . .. .'.. ~ ~v- . T ~- -_ ~---..;r " APPENDIX C ,~ SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE ' The following is a summary of certain prm.i!lions of Ordinance No. 5118-91 (the tIOriginal Ordinance"), enacted on August 15, 1991, as supplcmented b)' Ordinance No. 6188-97 (the ItRefunding Ordinancetl) cnacted on September 18, 1997, which authorized thr.lssuancc of the Gas System Re\'cnue Refunding Bonds, Scrics 1998 (the "Series 1998 Bondstl), as further supplemented by Resolutiori No. 98-69 (the t1Resolutiontl) adopted on January 15, 1998 (the Original Ordinance, the Refunding Ordinante and the Resolution arc collectively referred' to herein as the "Ordinancetl). The statements contained herein do not purport to be complete and this summary is qualified in its entirety by reference to the Original Ordinance, the Refunding Ordinance and the Resolution, copies of which may be obtained from the City. Definitions "Additional Parity Obligations" shall mean additional obligations issued in compliance \lith the tenus, conditions and limitations contained in the Ordinance, and which (i) shall have a lien on the Pledged Revenues equal to that of the Parity Bonds and the Series 1998 Bonds, (ii) shall be payable from the Net Revenues on a parity \'rith the Parity Bonds and the Series 1998 Bonds. and (Ui) rank equally in all respects with the Parity Bonds and the Series 1998 Bonds. "Bond Registrar" or "Registrar" shall mean the officer of the Issuer or the bank or trust company which the Issuer may from time to time designate to pcrfonn the duties set forth in the Refunding Ordinance for the Registrar of the Series 1998 Bonds. ,...,~) ',~ ".-? "Bonds" shall mean (i) tile Bonds authorized under the Original Ordinance, including but not limited to the Parity Bonds and the Series 1998 Bonds and (il) any Additional Parity Obligations issued thereafter in accordance with the provisions of the Ordinance. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rnles Ulereunder in effect or proposed. "Consulting Engineer" shall mean such qualified and recognized independent consulting engineer, having favorable repute or skill and experience, "ith respect to the acts and duties to be provided to the Issuer, as employed or retained by the Issuer to perfonn the acts and carry out the duties provided in the Ordinance, "Contributions in Aid ofConstructlon'1 shall mean any amount or item ofmoncy, services, or property received by the Issuer, any portion of which is provided at no cost to the utility, which represents an addition or transfer to the capital of the System, and which is utilized to offset the acquisition, improvement or construction costs of the System. "Cost ofOpcration and Maintenance" of the System shall mean all current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with sound accounting practicc, and shall include, without limiting the generality of the foregoing, insurnnce premiums, administrative expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for current operation, and charges for the a~umulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation, "Credit Facility" or "Credit Facilities" shall mean either individually or collectively, as appropriate, any bond insurance policy. surety bond, lellcr of credit, line of credit, guaranty or other instrument or instruments that would , enhance the credit of the Bonds. The tcoo Credit Facility shall not include any bond insurance, surety bond or oUter credit enhancement deposited into or allocated to a subaccount in the Reserve Account in the Sinking Food. ' ,~.J C-l qCZ'-oCj ~~~~~~ ~ , '.,', ".",,'" .'.'.' ..' ,..,"... '''/i,:/'' .,I,~ ,.,.",2J..;.,.'.2J,.. .i"..'..,.'.. ""..".. j:,,:':Y'/:;~J!,;'::/{;;':;',;:,:{:~~:~!;:,;':!,:':,f.i::\ .'::,j~:t'St~r[~~,ii:;"'~G:,'0~;.,t'ilh:;,,:I~:';d;;,');,iD~;;}';~.;'\(;J.' -...... .................... r- ~ -- ~ "Credit Facility Issuer" shall mean the provider of a Credit Facility. "Gas System Managerl1 shall mean the Managing Director and Executive Officer oflhe System oflhe City of Clcanvater. Florida. "Gross Revenucs" or "Revenucs" shall mean alt moneys received from rates, fees,'rentals or other charges or income derived from the investment of funds, unless otherwise provided in the Ordinance. by the Issuer or accruing to it in the operation of the System. all calculated in accordance with sotJnd accounting practice. "Holder of Bonds" or "Bondholders" or any similar lenn shall mean any person who shalt be the registered owner ("Registered OMter") of any registered Series 1998 Bond, as shown on the books and records of the Bond Registmr. The Issuer may deem and treat the person in whose name any Series 1998 Bond is registered as the absolute o\\ner thcreoffor the purpose ofrccci\'ing payment of, or on account of, t11e principal or redemption price thereof and interest due thereon. and for alt other purposes. "Issuer" shall mean the City of Clearwater, Florida, "Net Revenues" shall mean Gross Revenues less Cost of Operation and Maintenance. "Parity Bonds" shall mean rhc outstanding Gas System Revenue Bonds. Series 1996A, Gas System Rcvcnue Bonds. Series 1997 A. Gas System Revenue Refunding Bonds, Series 1997B, and any bonds issued under the authority of the Original Ordinance or ordinances supplemental thereto. :) "Reserve Requirement" for each series of Bon cis shall be as determined by subsequent resolution oftlie Issuer. The Reserve Requirement for the Series 1998 Bonds shall be the lesser of (i) the Maximum Bond Service Requirement of such series of Bonds, (ii) 125% ofthe average annual Bond Service Requirement of such series of Bonds, or (iii) 10% of the net proceeds of such series of Bonds. "Series 1998 Bonds" shall mean the Gas System Revenue Refunding Bonds. Series 1998 authorized to be issued pursuant to the Ordinance. "System" shall mean the complete gas system now owned. operated and maintained by the Issuer, together \\iUl any and all assets, improvements, extensions and additions thereto hereafter constructed or acquired. Ordinance to Constitute Contract In consideration of the acceptance of the Bonds authorized to be issued under the Ordinance by those who shall hold the same from ti.ri1e to time, the Ordinance shall be deemed to be and shall constitute a contract between the Issuer and such Holders. The covenants and agreements therein sel forth to be perfonned by the Issuer shall be for the equal benefit. protection and security of the Icgal Holders of any and all OrUle Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other thCI'('')f, except as expressly provided therein. Registration and Transfer There shall be a Bond Registrar for !be Series 1998 Bonds wrueh shall be a bank or trust company located \\;thin or without the State of Florida. The Bond Registrar shall maint.1in the registration books of the issuer and be responsible for the transfer and exchange of the Series 1998 Bonds. The Issuer shall, prior to the proposed date of ddivery of the Series 1998 Bonds, by resolution designate Ule bank to serve as a Bond Registrar and Paying Agent. The Bond Registrar shaU maintain the books for the registration ofthc transfcr and exchange of the Bonds in compli- ance with an agreement to be executed between the Issuer and such bank as Bond Registrar on or prior to the date of '~.J C-2 18"'09 - delivery ofllie Series 1998 Bonds. Such agreement shall set forth in detail the duties, rights and responsibilities of the ,~ parties thereto. ' The Series 1998 Bonds may be transfemxl upon the registration books, upon delivery to the Registrar, together with written instructions as to the details for the transfer of such Series 1998 Bonds, along with the social security or federal employer identification nwnbcr of such transferee and. if such transferee is a trust, the name and social security or fcdernl emploj'er identification numbers of the settlor and beneficiaries of the trust, the date of the trust and the name ofLhe trustee. No transfer of any Series 1998 Bond shall be effective until entered on the registration books maintained by the Registrar, fn all cases oflhe transfer oflhe Series 1998 Bonds, the Registrar slmB enter the transfer of O\\ncrship in the registrntion books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered Series 1998 Bond or Series 1998 Bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount which the Registered Owner is entitled to receive at the earliest practicable time in accordance \\;th the provisions of the Ordinance. Any Series 1998 Bond or Bonds shall be exchangeable for a Serizs 1998 Bond or Bonds of the same series, maturity and interest rate, in any authorized denomination, but in a principal amount equal to the unpaid principal amount of the Series 1998 Bond or Bonds presented for exchange. Bonds to be exchanged shall be surrendered at Ille principal office of the Registrar, and the Registrar shall deliver in exchange therefor the Series 1998 Bond or Bonds which the Bondholder making the e",change shall be entitled to receive. The , Issuer or the Registrar may charge the Registered Owner of such Series 1998 Bond for eveI)' such transfer or exchange an amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or other governmental charge required to be paid with respect (0 such transfer or exchange, and may require that such charge be paid before any such . new Scries 1998 Bond shall be delivered, All Series 1998 Bonds delivered upon t.rnnsfer or exchange shall bear interest from such date that neither gain .. nor loss in interest shall result from the transfer or exchange. .....~ "'<f) All Series 1998 Bonds presented for transfer, exchange, redemption or payment (if so required by the Issuer), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in foml and with guaranty of signature satisfactory to the Issuer and the Registrar duly executed by the Registered Owner or by his duly authorized attorney. E.!tabJishmcnt of Funds and Accounts ' The Ordinance creates the following funds and accounts: the Construction Fund; the Revenue Fund; the Operation and Maintenance Fund; the Sinking Fund (with the Interest Account, Principal Account, Reserve Account and Bond Amortization Account therein, and a separate subaccount in the R~scrve Account for each series of Bonds) and the Renewal and Replacement Account. Construction Fund The Construction Fund shall be used only for payment of the cost of the Project for which the series of Bonds are issued, which shall include the payment of interest, and if due, principal, on the respective series of Bonds prior to the dale on which the related Projctt is fully placed in service. Moneys in the Construction Fund, until applied in payment of any item ofL'lc cost ofa Project, shall be held in trust by the fssuer and shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further securit)' of such Holders. The Issuer shan establish within the Construction Fund a separale account in the Construction Fund for each series of Bonds. ,~ C-3 qg /09 ~ The Issuer h.1s covenanted th.1t the acquisition, construction and installation of each Project will be completed without delay and in accordance "ith sound engineering practices, The Issuer shall make disbursements or payments from the Constmction Fund only to pay the cost of a Project. Promptly after the date of the completion of a Project, as determined by the Gas System Manager, and after paying or making provisions for the payment of all unpaid items of the cost of such Project, the Issuer shall deposit in the following order of priority any balance of moneys remaining in the Construction Fund in (I) another account of the Construction Fund for which the Gas System Manager h.1s stated that there arc insufficient moneys present to pay the cost oftlle related Project, (2) the Reserve Account, to the extent of any deficiency therein, and (3) such other fund or accomll cstabUshcd under the Ordinance, as shall be detennincd by the City Commission oCthe Issuer, provided the Issuer has TC(eived an opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for federal income tax purposes. Flow of Funds The cntire Gross Revenues, except the income from investments, derived from the operation of the System shall upon receipt thercofbe deposited in the Revenue Fund. Such Revenue Fund shall constitute a trust fund for the purposes provided in the Ordinance, and shall be kept separate and distinct from all other funds of the Issuer and used only for the purposes and in the manner therein provided. All revenues at any time remaining on deposit in the Revenue Fund shall be disposed of on or bzfore the fifteenth (15th) day of each month only in the following manner and in the following order of priority: (1) Revenucs shall first be used to deposit in the Operation and Maintenance Fund such sums as are nccessal}' for tbe Cost of Operation and Maintenance for tJle next ensuing month. ......."<,. .,,,,,,,) (2) Revenucs shall next be used for deposit into the Interest Account, such sums as \\ill be sufficient to pay one-sixth (1/6) of all interest becoming due on the Bonds on the next semiannual interest payment date. (3) Revcnues shall next be used for deposit into the Principal Account, in any bond year in which a Serial Bond matures, such sums as will be sufficicnt to pay one-twelfth (1/12) of the principal maturing on 'Serial Bonds in such year. (4) Revenucs shall next be used for deposit into the Bond Amortization Account, in any bond)'CM in which an Amortization Installment is due, such sums as will be sufficient to pay one-twclfth (1/12) of the Amortization Installmcnt required to be made in such year. Such payments shall be credited to a separate special account for each series ofTenn Bonds outstanding, and if there shall be more than onc slated maturity for Term Bonds ofa serics, Ulen into a separate special account in the Bond Amortization Account for each such separate maturity of Term Bonds. The funds and investments in each such separate account shaU be pledged solely to lbc payment of principal of the Term Bonds of the series or maturity within a series for which it is establishcd 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 any other account in the Sinking Fund to make up any deficiencies in required payments thcrein. Upon the sale of any series of Term Bonds, the Issuer shall, by resolution or ordinance, 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. ]n the cv(:ut the moneys deposited for retirement of a maturity of Term Bonds arc required to be invested, in the manner provided below, then tlle 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 InstnUmenl. ,.) C-4 9g"09 ~ Moneys on deposit in each of the separate special accounts in the Bond Amonimtion Account shall be used for the open market purchase or the redemption of Term Bonds. pursuant to the Ordinancc, of [he serics or maturiry of Term Bonds within a ,,;crics for which such separalc special account is estab- lished or may remain in said separate special account and be invested untUthe stated date of maturity of the Term , Boods. The resolution or ordinance establishing the Amortization Installments for any series or maturity of Term Bonds may limit the use of moneys to anyone or more of the uses set forth in lhe preceding sentence. The required deposits to the Principal Account, Interest Account and Bond Amorozntion Account shall be adjusted in order to takc into account the amount of money currently on deposit therein. (5) Revenues shall nc.\1 be applied by the Issuer to maintain in each subaccount in lhe Reserve Account a sum equal to the Reserve Requirement, if any. for any subsequent yenr on each series of Bonds, which sum shall initially be deposited therein from the proceeds of the sale ofthe Bonds and other funds of the Issuer. To the extent the Issuer detennines pursuant to a subsequent resolution to fund a subaccount within the Reserve Account for a respectivc series of Bonds, the Issuer may provide that the difference bern'CCn the amounts on deposit in such subaccount and the Rese,,'c Requirement for such series of Bonds shalt be an amount covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a surety bond, by a letter of credit or any combination thereof or by such other fonn of credit enhancement as shalt be approved by a resolution of the Issuer adopted prior to the issuance Qf the series of Bonds for which such subaccount is established. Such resolution may also provide for the substitution of such credit enhancement. Bond insurance, a sW'Cty bond, a letter of credit or any combination thereof or such other fonn of credit enhancement may in the fulure be deposited in the subaccount in the Reserve Account for the Bonds as shaH be approved by subsequent resolution of the Issuer, provided that the provider of such credit enhancement is then rated in one of the two highest rating categories (without regard to gradation) by Standard and Poor's Corporation and Moody's Investors Scr.icc, Inc. . "'-'Vb. , ) '. .rJ/ Any withdrawals from any subalXOunt in the Rcsc,,'e Account slmll be subsequently restored from the first moneys available in the Revenuc Fund on a pro rat.1 basis as to aH subaccounts in the Reserve Account aIlcr all required curren[ payments (or tlle Operation and Maintenance Fund and Sinking Fund (including all deficiencies in prior payments to those Funds) have been made in full. Notwithstanding any provision of the Ordinance to the contrary, moneys in each subaccount in the Reserve Account shall be used only for the purpose of the payment of maturing principal of or interest or making Amortization Installments on the Bonds for which such subaccount was established when the other moneys in the Sinking Fund are insufficient therefor. and for no other purpose, including the payment of any other series of Bonds. In the event of the refunding ofnny series of Bonds. the Issuer may withdraw from the subaccount within the Reserve Account for such series of Bonds. all or any portion of the amounts nccumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing thc refunding of such series of Bonds. (6) The Issuer shall not be required to make any further payments into the Sinking Fund when the aggregate amount of money in lhe Sinking Fund is at Icast equal to tIle rotal Bond Service Requirement of the Bonds then outstanding, plus the amount of redemption premium, if any, then due and thereafter to become due on such Bonds then outstanding by operation of the Bond Amortization Account. (7) The Issucr shall next apply and deposit the moneys in the Revenue Fund into the RenC\\m and Replacement Fund an amount equal to one-twelfth (1/12) of an amount equal to 5% of prior year's Gross Rcvenues~ provided, however, that so long as there shall be on deposit in such Renewal and Replacement Fund a balance ofat least $300,000, no additional deposits in such Fund shall be required. The moneys in the Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to, i~ C-5 Qg"-09, ~- ~~ ---......- ,~ 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 nccess.1T)', in order to prevcnt a default in the payment of the principal or Amortization Installments of and interest on rhe Bonds, (8) The balance of any moneys remaining in the Rc"enue Fund aftcr tlle above required payments have been made may be used by the Issuer for any lawful purpose. (9) The Operation and M.1intenance Fund, the Sinking Fund, the Renewal and Replacement Fund. the Revenue Fund. and all accounts therein and any other s~ial funds established in tlle Ordinance shall constitute trust funds for the purposes provided in the Ordinance for such funds. All such funds shall be continuously secured in the same manner as city deposits arc authorizcd to be secured by the laws of the State of Florida. MonC}'S on deposit in tile Revenue Fund and the Sinking Fund (e;.:cept thc Reserve Accountthcrein) may be invested and reinvested in the manner provided by law provided such invcstmcnts either mature or arc redeemablc .1t not less tlmn par at the option of the Issuer not later than the dates on which thc moneys on deposit therein will be nceded for thc pwposc of such fund The moneys in the Reserve Account in the Sinking Fund and in tlu~ Rcncwal and Replacement Fund may be invested and reinvested only in Authorized Investments, in the manner provided by law. All income on such investments shall be deposited into tllC Rcvenue Fund; provided. however, that investment income earned in the Bond Amortization Account shall remain therein or be transferred to the Principal Account or the Interest Account and used to pay maturing principal, Amortization Installments and interest on the Bonds. /") " .. .~" The cash required to be accounted for in each of the foregoing funds and accounts may be deposited in a single bank account, and funds allocated to the various accounts established under the Ordinance may be invested in a common investment pool, provided that adequate acccl\mting records arc maintained to reflect and control the restricted allocation of the cash on deposit therein and such investments for the various purposcs of such funds and accounts 3S , provided in the Ordinance. The designation and establishment oftbe various funds and accounts by me Ordinance shall not be construed to require the establishment of any completely independent, self-balancing funds as such tenn is commonly defined and used in government accounting, but rather is intcnded solely to constitute an earmarking of cenain revenucs for ccrt.1in purposes and to establish cenain priorities for application of such revenues as provided in the Ordinance. Operation of Bond Amortlzation Account Money held for the credit of thc Bond Amortization Account shall be applied to the retirement of tenn obligations as (ol1ows: ' (1) Subject to the provisions of Paragraph (3) below, the Issuer may purchase Tenn Bonds then outstanding at the most advantngeous price obtainable \\;th reasonable diligence, such price not to exceed the principal of such Tenn Bonds plus the accrued interest to the dale of delivery thereof. The Issuer shall pay the interest accrued on such Tenn Bonds to the date of delivery thereof from the Interest Account and the purchase price from the Bond Amortization Account. but no such purchase shall be made by the Issuer within the period of 4S days immedi. atcly preceding any interest payment date on which Tcnn Bonds arc subject to caU for redemption, except from money in excess ofthe amounts set aside or deposited for the redemption ofTenn Bonds. (2) Subject to the prO\isions of Paragraph (3) below, whenever sufficient money is on deposit in the Bond Amortization Account to redeem S5,OOO or more principal amount ofTenn Bonds, the Issuer may call for redemption from money in the Bond Amortization Account such amount of Tenn Bonds then subject to redemption as, with the redemption premium, if any, will exhaust the mClDey thcn hcld in the Bond Amortization Accowll as nearly as may be practicable, Prior to calling Tenn Bonds for redemption, the Issuer shall withdraw from the Interest Account and from the Bond Amortization Account and set aside in separate accounts or deposit with the ,.'..,) C-6 98 /()9' ~~------........~ -..,.. ~ p3};ng agents thc respectivc amounts required for paying the interest on and the principal of and redemption premium applicable to the Term Bonds so called for redempUon. (3) MonC}' in the Bond Amorti7..,tion Account shall be applied by the Issuer in each fiscal year to the reUrement of Term Bonds then outstanding in the follO\\ing ordcr: (a) The Term Bonds of each series of Bonds, to the extent of the Amorti7.ation Installment, irany, for such Fiscal Year for the Term Bonds of c.1ch such series then outstanding, plus the applicable premium, if any, and, if the amount available in such Fiscal Year shall not be sufficient therefor, then in proportion to the Amortization Installment, ifany, for such Fiscal Year for the Term Bonds of c.1ch such scries then outstanding, plus the applicable premium. irany; provided, however, that irthe Term Bonds of any such series shaU not then be subject to redemption from monC)' in the Bond Amorti?..ation Account and if the Issuer shall at any time be unable to exhaust the mOIlC}' applicable to the Term Bonds of such series under the provisions of this clause or in the purchase of such Tenn Bonds under the prm;sions of Pamgraph 1 above, such money or the balance of such money, as the case may be, shaH be retained in the Bond Amortization Account and, as soon as it is feasible, applied to the Term Bonds of such scries~ and (b) Any balance then remaining, other than money retained under the first clause of this paragraph (3), may be applied to the retirement of such Term Bonds as the Issuer in its solc discretion shall detennine, but only, in the case of the redemption of Term Bonds of any series, in such amounts and on such tcnns as may be provided in the resolution or ordinance authorizing the issuance of the obligations of such series. (4) TIle Issuer shall deposit into the Bond Amortization Account Amortization Installments for the amortization of the principal of the Tenn Bonds, together ",illl any deficiencies for prior required deposits, into the Bond Amortization Account. such Amortization Installments to be in such amounts and to be due in such years as shaH be determined by resolution or ordinance of the governing body of the Issuer prior (0 the delivery of the Bonds. ':'''"') ..l......... The Issuer shall pay from tJle Sinking Fund all c~nscs in connection with any such purchase or redemption, Co"cnants of the I!Isucr Operation and A.faintenance - The Issuer has covenanted to maintain the System and all parts thereof in good condition and operate the same in an efficient and economical manner making such expenditures for equipment and' for renewals. repairs and replacements as may be proper for the economical opcmtion and maintenance thereof. Operating Budget - The Issuer has covenanted to annually, prior to commencement of cnch ofits Fiscal Years, prepare and adopt a detailed budget or budgets of the estimated expenditures for lhe operation and maintenance of the System during such next succeeding Fiscal Year. The Issuer shall mail copies of such annual budget or budgets (including any amendments thereto) to any Holder or Holders of Bonds who shall file his address with the Issuer and request in writing that copies of all such budgets be furnished him and shall make available such budgets of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders, provided that the cost of reproducing and mailing such budget or budgets shall be borne by the Holder requesting such budget or budgets. Rate Ordinance - The Issuer has covenanted to fix. establish, revise from time to time whenever necessary, ' maintain and collect always such fees, rates. rentals and other charges for the use of the product. services and facilities of the System which will always provide Revenues in each year sufficient to pay, and out of such funds pay, 100% of all Costs of Operation and Maimcnance of tIlC Systcm in such year and all reserve and other payments provided for in the Ordinance and 125% of the Bond Service Requirement due in such year on all outstanding Bonds, Such mtes, fees, rentals or other charges shall not be reduced so as to be insufficient to provide Revenues for such purposes. '-.:; C~7 Qg/09 .- --- ,'~ The Issuer has further covenanted and agreed that the Issuer ....ill annually within thirty (30) days after adoption of thc budget dcscribed abo\'c rcvise such fccs, rates, rcnlals and other charges for the use of the producl, sen.ices and facilities of the System to the extentllccessary for the estimated Gross Revenues to be derived from the opcmtion of the System during the next succeeding Fiscal Yc.1r to increase o\'er the amount ofnctual Gross Revenues from the operation oflhe System for the next preceding Fiscal Year by the amount that the estimated expenditures for operation and maintenance oCthe System during such nc.,1 succeeding Fiscal Year shall exceed the actual expenditures for operation and maintenance of the System during such next preceding Fiscal Year. Books and Records - The Issuer has covenanted to keep books and records of the Net Revenues of the System which shall be kept separate and apart from all other books, records and accounts of the Issuer, and the Holders shall have the right at all reasonable limes to inspect all records. accounts and data of the Issuer relating thereto. Annual Audit- The Issuer shall also, at least once a )'car, wiiliin six months after the close of its Fiscal Year, cause the books. records and accounts relating to the System to be properly audited by a recognized independent finn of certified public accountants and shall make generally available the report of such audits to any Holder or Holders of Bonds. Such audits shall contain a complete presentation of financial statements in accordance with generally accepted accounting principles. A copy of such annual audit shall regularl)' be furnished to any nationally recognized bond rating service which, upon application of the Issuer prior to the issuance of the Bonds, shall have published a rating on the Bonds and to any Holder of any Bonds who shall have requested in writing that a copy of such reports be furnished him, provided that the cost of reproducing and mailing such reports shall be borne by the Holder requesting such reports. No Mortgage or Sale of the System - The Issuer \\ill not sell, lease, mortgage, pledge or othenvise encumber the System, or any subslantiaJ pari thereof, or any revenues to be derived therefrom. except as provided in the Ordinance. ,.;'~'t TIlc foregoing provision not\vithstanding, the Issuer shall have and in the Ordinance rescn'es the ",...) right to seU, lease or otherwise dispose of any of the property comprising a pan of the System which lhe Issuer shaH hereafter detennine, in the manner provided therein, to be no longer necessat)', useful or profitable in the operation of the System. Prior to any such sale, lease or other disposition of said propert)', if the amount to be received therefor is not in excess of $50,000, the City Manager of the Issuer or other duly authorized officer in charge thereof shall make a finding in writing detennining that such property comprising a part ofthc System is no longer neces5a1)', USCfill or profitable in the operation thereof. If the amount to be received from such sale, lease or othcr disposition of said property shall be in excess of$50,OOO but not in e.xcess ofSl00,OOO such City Manager or other officer shall first make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the governing body of the Issuer shall, by resolution or ordinance duly adopted, approve and concur in the finding of such City Manager or other officer, and autlJorize such sale, lease or otl1er disposition of said property. If the amount to be received from such sale. lease or other disposition of said property shall be in excess of $100,000 but not in excess of 10% of the vatue of fixed asscts of the System according to tlle most recent annual audit report, such City Manager or other officcr shall first make a finding in writing detennining that such property comprising a part of the Systcm is no longer ncccs5at)', useful or profitable in the operation thereof, and the Consulting Engineer shall make a finding that it is in the best intercst of the System that such property be disposed of, and the governing body of the Issuer shall by rcsolution or ordinance. duly adopted, approve and concur in the findings of such City Manager or other officer and of the Consulting Engineer, and shall authorize such sale, lease or other disposition of said property, All)thing in this subsection to the contrary notwithstanding, nothing in the Ordinance shall rcstrict the governing body of the Issuer or, to the extent such authority has been vested in him by such governing body, the ~J C-8 qg /() 9 ", ' ' ',.. "" ,," .' , ,. -,' ,,, '" "I2.l' " :..' 'J~ i ,/, ',' Jd. .,' ,/ fH...,., ".' ,..'.'. .::...., ~<" .;',::r' ,;::,);:,,~';,c;2 .,i; <."':: ,:,,;.'.. .,' :::,;::;::{"\':7J,.'\}';$ti,:',::r:;;;;,.":'!::: J::\ :',Xk,D;; ~ City Managcr in lbc exercise of his discrelion, from authorizing the sale or other disposilion of any of the property comprising a part oflh:: System, if the Consulting Engineer shall certify that the Net Revenues of the System will not be materially adversCly affected by rcason of such sale or disposition. Such proceeds shall be placed in the Renewal and Replacement Fund or used for the retirement of outstanding Bonds, in such proportions to be detcnnined by the governing body of the Issuer upon the recommendations of tile City Manager. The payment of such proceeds into lhe Renewal and Replacement Fund shall not reduce the amounts required to be paid into such Fund by other provisions in the Ordinance, Anything in this subsection to the contrary nOl\\;thstanding, nothing in the Ordinance shall prohibit the Issuer from transferring o\mcrship of the System to another govcmmental entity in accordance \\;th the Ordinance without complying \\;th the provisions described in the Ordinance. Insurance - For so long as any of the Bonds arc outstanding, the Issuer has covenanted to carry adequate fire and windstonn insurance on all buildings and structures of the works and properties of the System which arc subject to loss through fire or windslonn, and to othcnvise cany insurance of all kinds and in lhe amounts nonnally carried in the operation of similar facilities and properties in Florida; provided, however, that in lieu of such insurance the Issuer may establish a qu.1lified plan of self-insurance. Any such insurance shall be carried for the benefit of the ,Holders of the Bonds. All moneys rcc:cived for losses under any of such insurance, except public liability, are pledged by the Issuer as sccwity for the Bonds, until and unless such proceeds arc used to remedy the loss or damage for which such proceeds are received, either by repairing the property damaged or replacing the property destroyed as soon as . practicable. :.,....,,) No Free Service - The Issuer has covenanted to not render or cause to be rendered any frcc services of any nature by its System, nor to establish any prctcrcntial rales for users of the same class. Whenever the Issuer, including itS departments, agencies and instrumentalities, shall avail itself of the product, facilities or services provided by the System, or any part thereof, the same mtes, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged to the Issuer and any such depanment, agency or instrumentality. Such charges shall be paid as they accrue, and the Issuer shall transfer from its general funds to the Revenue Fund sufficient sums to pay such charges, The revenues so received shall be deemed to be Revenues derived from the operation of the System, and shall be deposited and accounted [or in the same manner as other Rel'cnues derived from sllch operation of the System. EnfOrcement a/Collections - The Issuer has covcnanted to diligently enforce and collect the rates. fees and other charges for the services and facilities of the System pledged in tbe Ordinance; (0 take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law; and to maintain accurate records with respect thereof. All such fees, rates, charges and revenues pledged in the Ordinance shall, as collected. be held in trust to be applied as therein provided and not otherwise. The Issuer will, under reasonable rules and regulations. to the full extent pcnniucd by law, shut off the connection of any users of Ole syslem for non-payment of fees, rentals and olher chargcs for the services of the System and shall not furnish him or permit him to receivc from the System further scrvice until all obligations owed by him to the Issuer on account of services shall have been paid in full. Consulting Engineer - TIle Consulting Engineer shall provide the Issuer nith competent engineering counsel affecting the proper, efficient and economical operation and mainlenance of the System and in connection WiOl the making of capital improvements and renewals and replacements to the System. The Gas System Manager may undertake the duties of Consulting Engineer for purposes of the Ordinance so long as such Gas System Manager is a registered engineer in tile State of Florida~ provided however, that the Gas System Manager shall not pcrfonn certain duties of Consulting Engineer as set forth in the Ordinance. ,~ C-9 c;g ~() ~ '.""" ,. , " .' .'....;, ;... .'. ,~., t, ..; . ,..... . '." . .,."1:1.;"...,,..1_ . . ',;,.. .JH......, .. t.L,.....,'" '. " .. ;" " ;. ,., ..,,,", .,."...., :,:,~' ';,.: ' ',.'::': ': ;',,',\: '::::::::::,:/ :'t':,:',:: "',:':,> ':<;':;::,i) ':,:':;' >i;,{i,/,:,'.'~ :,:':(;;:'~~'::;,::).:'i.; ~:;-;R~,:~L~\::';:::':}~},'{, ),-': ;\'t:f.'>:>;:>~,'::'~:::-;::::'? :r'::\'::,,/ iC::::.!'f;~,/,/:)?t '1 City Alanager Reports - On an annual basis, the Issuer has covenanted to cause to be prepared by the City Manager a report or survey of the S)'stem, with respcctto the management of the properties thereof, the sufficiency of the rates and charges for services, the proper maintenance of the properties of the System, and the necessity for capital impl'O\'cments and recommendations therefor. Such a report or survey shall also show any failure of the Issuer to perfonn or comply with the covenants contained in the Ordinance. lfany such report or survey of the City Manager reflects that the rates and charges arc insufficient to protect the rights of the Bondllolders, then the Issuer shan take such steps as arc required by law to raise the rates and charges for services of the System, No Competing System - To the full extent pennilled by taw, the Issuer has covenanted to not hereafter grant, or cause, consent to, or allow the granting of, any franchise or pennit to any person, firm, corporation or body, or agency or instnuncntality whatsocver, for the furnishing of competing gas ,services to or within the boundaries of the Issuer; provided, however, that if the Gas System Manager renders an opinion that it would not be feasible for the Issuer to provide such services to any specific area within thc threc }'cars succeeding a request to provide such service, the Issuer may authorize or allow the granting of such franchise or permit for such area upon such terms and conditions as it may approve. UnlawjUl Connection Prohibited - The Issuer has enacted an ordinance making it unla"ful for any person or persons to tamper with, change or make any connection with lhe System \\ithoUl the written consent of the Issuer, or to make any reconnection with the System when service. has been discontinued for delinquent charges, until such delinquent charges havc been paid in full, including interest, reasonable penalties and rcconnection charges. The Issuer will diligently, to the full extent penniued by law, enforce this covenant and prosecute any person violating the provisions of lhis covenant or any penal ordinance relating to the same, Issuance of Other Obligations ,..', ) . :.~} The Issuer has covenanted to not issue any other obligations payable from the Gross Revenues of the System nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien of the Bonds and the interest thereon upon said Revenues except under the conditions and in the manner provided in the Ordinance, Any obligations issued by the Issuer other than the Bonds authorized in Ule Ordinance and Additional Parity Obligations provided for therein, payable from such Revenues, shall contain an express statement that such obligations arc junior and subordinate in all respects to the Bonds, as to lien on and source and security for payment from such Revenues. Issuance of Additional Parity Obligations Addition.ll Parity Obligations, payable on a parity from the Net Revenues of the System with the Bonds, may be issued after the issuance of any Bonds, for the construction and acquisition of additions, extensions and improvements to the System or for refunding purposes and upon the following conditions: (1) The Net Revenues derived iJr which would have been derived, if adjusted as provided in the Ordinance and herein, from the System, either during the immediately preceding Fiscal Year, during any twelve (12) consecutive calendar months of the eighteen (18) calendar montlls immediately preceding the sale of lhe proposed AdditionaJ Parity Obligations or during thc last twch'c (12) month period for which the Issuer has audited financial statements for the System, at the option of the Issuer, shall have been natless than 125% of the Maximum Bond Service Requirement which will become due in any calendar year thereafter on (a) the 1991 Bonds then outstanding, (b) any Additional Parity Obligations issued and then outstanding, and (c) the Additional Parity Obligations then proposed to be issued. In determining the amount of Net Revenues for the purposes of paragraph (1) above, the Consulting Engineers may adjust the Net Revenues by adding thereto the following: .....) C.1D qf5 -' 0 9 ", ',' ", .' ".., "",,',, ,,""." . .'''''", ,., ,c,'" ',' , ',',' 1jjJ'" ..,' ,,, 'lii:L", ."" 'ff ,,'. " ",. /' '." \'" " ,'" ,",.. ",.." "",,, .,,:;,~ ~':,:~\ · ::,: /:':. :;,;'. ,i"j)::;'::::,,',); ': {'i.: ~.";/:,):::}:irt;,'/;;';:";!f'., ...,:',.::,', :,: ': '"i .:;':i ;~~;{j/:'::::(i:iii::;{,3: ,- ---. ......... ..... ,~ (a) The Net Revenues (computed (or such utility on the same basis as net revenues arc computed for the System) of any gas utility which the Issuer shall have acquired prior to the issu3ltcc of such Additional Parity Obligations or which the Issuer shall be acquiring from proceeds of such Additional Parity Obligations; and (b) In Ule C\'enl a change has been lllnde in Ule rale schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above. and such change has resulted in an increase in Net Revenues, such amount of additional Net Revenues which the Consulting Engineers estimate would have been received by the Issuer during such 12 month periOd if such change in such rale schedule had been in effect during the entire 12 month period and in the event a change has been made in the rale schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (I) above, and such change has resulted in a decrease in Net Revenues, by sublracting therefrom such amount of the Net Revenues which the Consulting Engineers estimate would not have been received by the Issuer during such 12 month period referred to in (1) above, if such change in such rate schedule had been in effect during the entire 12 month period, (2) Each resolution or ordinance authorizing the issuance of Additional Parity Obligations \\ill recite that all oflh~ covenants contained in the Ordinance will be applicable to such Additional Parity Obligations. (3) The Issuer shall not be in default in performing any of the covenanls and obligations assumed hereundcr, and alt payments required in the Ordinance to have been made into the accounts and funds, as provided hereunder, shall have been made to the full extent required. Remedies ":'~) Any Holder of Bonds issued under the pTCJ\.1sions of the Ordinance or any trustee acting for the Holders of such Bonds, may either at law or in equity. by suit, action, mandamus or other proceedings in any court of competent jurisdiction, prolect and enforce any and all rights, including the right to the appointment of a receiver. existing under the laws of the State of Florida, or granted and contained in the Ordinance, and may enforce and compel the performance of all dutics required in the Ordinance or by any applicable statutes to be performed by the Issuer or by any officer thcreof. Nothing in the Ordinance, howcver. shall be construed to grant to any Holder of tile Bonds any fien on the System or any real property of the Issuer. Amending and Supplementing of Ordinance Without Consent of Registered Owners of Bonds The Issuer, from time to time and at any time and without the consent or concurrence of any Registered Owner of any Bond, may adopt an ordinance or resolution amendatory or supplemental to the Ordinance, if the provisions of such supplemental ordinance or resolution shall not adversely affect the rights of the Regislered Owners of the Bonds then Outstanding, for anyone or more of Ule following purposes: , (A) To make any changes or cOI:Tections in the Ordinance as to which the Issuer shalt have been advised by COWt'iC1 that arc required for the purpose of curing or correcting any ambiguity or defective or inconsistent provision or omission or mistake or manifest error contained in the Ordinance, or to insen in Ule Ordinance such p~visions clarifying matters or questions arising under the Ordinance as are necessary or desirable; (8) To add additional covenants and agreements of the Issuer for the purpose of funher securing the payment of the Bonds~ l~) C-ll qg-oCj :. ~ : ". ~ '.''' ",."",, ,,,,,.,' .. ','" ,.....'.,' "'," .,'t:":]d"'"'''''21''''' ,\ ...,;3..,....,.., ..W', .i',', ...."....,..',...'f". ','f..' ;:'} :iiWY:';;';k)::/;:;\hd;::L;:i;W'-:r{:1ira'-;,c;;::"TIf~?,t(;i:~:{".;-:<~7'iji:H;;;i;':-Btij,:\;~:iW:,i1:;\':::., ~----...- ~~ - (C) To suncnder any right, power or privilege reserved to or conferred upon the Issuer by the tenns '~ of the Ordinance; (0) To confinn as furthcr assurancc any lien, pledge or change, or the 5ubjeclion to any lien, pledge or change, created or to be created by the provisions of the Ordinance; (E) To grant to or confer upon the Registered O\\l1ers any additional right, remedies, powers, authority or security that lawfully may be grantcd to or conferred upon them; (F) To assure compliance with Fcderal "arbitrage" prO\;sions in effect from time to time; (G) To bring all or a portion oflhe Systcm into compliance \\1th applicable state or fedemllaws; and (H) To modify any of the provisions of the Ordinance in any other rcspects provided that such modification shall not be effective until after the Bonds Outstanding at the time such supplemental ordinance or resolution is adopted shall cease to be Outstanding, or until the Holdcrs thereof consent thereto pursuant to the Ordinance, and any Bonds issued subsequcnt to any such modification shall contain a specific reference to the modifi- cations contained in such supplemental ordinance or resolution. Amendment of Ordinance with Consent of Registered Owner of Bonds /,',(;10\ ';,'11 Except as othernisc provided in the Ordinance, no material modification or amendment of the Ordinance or of any ordinance amendatory thereof or ordinance or resolution supplemental thereto may be made without the consent in writing of the Registered Owners of f1fty-one percent or more in the principal amount of the Bonds of each Scries so affected and thcn outstanding; provided, however, that no modification or amendment shall pennit a change in the maturity of such Bonds or a reduction in the rnte ofintercst thereon or in the amount of the principal obligation thereof or affecting the promise of the Issuer to pay the principal of and interest on the Bonds as the same shall become due from the Net Revenues of the System or reduce tbe percentage of the Registered Owners of the Bonds required to consent to any material modification or amendment of the Ordinance without the consent of the Registered Chvner or Registered Chmers of all such obligations. For purposes of this paragraph, to the extent any Bonds are secured by a Credit Facility anCl such Bonds arc then rnted in one of the two highest rating categories (without regard to gradation) by either Standard & Poor's Corporntion or Moody's Investors Service, Inc., or successors and assigns, then the consent of the Credit Facility Issuer shall be deemed to constitute tbe consent of the Registered Chvner of such Bonds and in such case no consent of the Registered o.vners of such Bonds shall be required; providcd, however, a copy of such amendment shall be provided to such rating agencies not less than thiny (30) days prior to the effective date thereof. Defeasance If, at any time, the Issuer shall have paid, or shall have made pro\;sion for payment. of, the principal, interest and redemption premiums, if any. \\-ith respect to the Bonds, then, and in that event, the pledge of and lien on the Net Revenues in favor of the Holders of the Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of Federal Securitics or bank certificates of deposit fully secured as to principal and interest by Federal Securities in irrevocable trust with a banking instilution or trust company, for the sole benefit of the Bondholders, in rcspect to which such Federal Securities or cenificates of deposit. the principal of which, togethcr with tbe income thereon, will be sufficient to make timely payment of the principal, interest. and redemption premiums, if any, on the outstanding Bonds, shall be considered "provision for payment." Nothing in the Ordinance shall be deemed to require thc Issuer to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair OlC discretion of the Issuer in delennining whether to exercise any such option for early redemption. , ~dJ C-12 Cjg -09 -----w- . _ T- . - ~ Fcdcrallncomc Tax Connant!! ~ The lssuer has covenanted with the Registered Owners of each series of Bonds that it shall not use the p~ of such series of Bonds in any manner which would cause the interest on such series of Bonds to be or become includable in the gross income of the Registered Owner thereof for Cederal income tax purposes. The Issuer has covenanted nith the Registered Owners of each series of Bonds that neither the Is.mer nor any person under its control or direction will make any use of the proceeds of such series of Bonds (or amounts deemed to be proceeds under the Cooe) in any manner which would cause such series of Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither the Issuer nor an)' other person shall do any act or fail to do any act which would cause the interest on such series of Bonds to become includable in the gross income ofthe Registered Owner thereof for federal income tax purposes. The Issuer has covenanted with the Registered Owners of each series of Bonds that it will comply with aJJ provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income oC the Registered Owner thercoffor federal income tax purposes., including. in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. Covenants with MBIA Insurance Corporation to Series 1998 Bonds ""'-') ~ - . {'l~' ' The Issuer has selected MBIA Insurance Corpomtion ("MBIA") to provide its Municipal Bond Insurance Policy as a Credit Facility for the Series 1998 Bonds. Pursuant to the Ordinance, in the Resolution authorizing the selection ofMBIA, the Issuer has made certain additional covenants relating to the Series 1998 Bonds regarding the rights ofMBIA as Credit Facility Issuer, as long as such Credit Facility are in full force and effect, including, among oUler things, the following: For so long as the Credit Facility is applicable to the Series 1998 Bonds, the additional provisions set forth below shall be applicable to the Series 1998 Bonds. In addition to the covenants and agreements of the City previously contained in the Ordinance regardiug the rights of the Credit Facility Issuer, the City hereby covenants and agrees for the benefit of the Credit Facility Issuer and the holders of the Series 1998 Bonds while the Credit Facility insuring the Series 1998 Bonds is in full force and effect, to provide the Credit Facility Issuer with copies of any notices to be given to any party pursuant to the Bond Ordinance, and to provide prior notice to the Credit Facility Issuer of any amendments to the Bond Ordinance. PAYMENTS UNDER TIlE POLICY A. In the event lhat, on the second Business Day, and again on the Business Day, prior to the payment date on the Obligations, the Paying Agent has not reCeived sufficient moneys to pay all principal of and interest on the Obligations due on the second following or foilowing, as the case ma)' be, Business Day, the Paying Agent shall immediately notIfY the Insurer or its designee on the same Business Day by telephone or telegraph confinned in writing by registered or certified mail, of the amoun! oflhe deficiency. B, If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its designee. C. In addition, ifthe Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Obligation to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court ofcompctentjurisdiction that such payment constitutes an avoidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or its designee of such fact by telephone or telcgraphic notice, confimlcd in writing by registered or certified mail. D, The Paying Agent is hereby irrevocably designated, appointed. directed an authorized to act as attorney-in- fact for Holders of the Obligations as follows: ' ~,) C-13 1f! - rfj ~ - ---- ..,.......-- - 1. ~ If and to the c.....tenlthere is a deficiency in amounts required to pay interest on the Obligations, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust Company. N.A., or is successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the pa}nlent of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which arc paid by the [nsurer, (b) receive as designee of the respcttive Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Pa};ng Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Paying Agent shall (a) c.....ccute and deliver to the Insurance Paying Agent in fonn satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Holder in any legal proccc:xfjng relating to the payment of such principal and an assignment to the Insurer of any of the Obligation surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance \\ith the tenor ofthe Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holde~. E, Payments with respect to claims for interest on and principal of Obligations disbursed by the Paying Agent , from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer wilh respect to such Obligations, and the Insurer shall become the o\mer of such unpaid Obligation and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or othenvise. ..:-..:..:.... ""'~) F. Irrespective of whether any such assignment is executed and delivcred, the Issuer and the Paying Agent hereby agree for the benefit of the Insurer that: 1. They recognize that to the cxtcnt the Insurer makes payments, directly or indirectly (as by paying through the pajing Agent), on account of principal of or interest on the Obligations, the Insurer will be subrogated to the rights of such Holde~ to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations; and 2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) or the first paragraph of the Policy, which principal and interest shall be deemed past due and not to havc been paid), with interest thereon as provided in this Indenture and the Obligation, but only from the sources and in the manner provided herein for tile payment ofprincipaJ orand interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights 10 Ihe amount of such principal and interest. G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the Insurer a copy of the disclosure document, if any, circulated with res(X.'ttto such additional Obligations. H. Copies of any amendments made to the documents executed in connection with the issuance of the Obligations which are consented to by the Insurer shall be sent to Standard & Poor's Corporation, I. The Insurer shall receive notice of tile resignation or removal OftJIC paying Agent and the appoinunent of a successor thereto. 1. The Insurer !ihall receive copies of aU notices required to be delivered to Bondholders and, on an annual basis, copies ofthe Issuer's audited financial statements and Annual Budget. ;~ C-14 qf - 01 ./:: tic........; ;:;i;: ."r.l(i:~;'.',U;';\:',j;:iL;~\:";;.ib.{i;(;}i!*~\;}/N;!~:,i;~:~;Di;8i(';::;!~j'itf})f;~;.W::!F: ~}": -...... - ~ .~ ~oticcs: Any notice that is required to be givcn to a holder of the Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to the Insurcr. All notices required to be given to the Insurer under the Indenture shall be in writing nnd shall be sent by registcred or ccrtilicd man addresscd to MBIA Insurancc Corporation, 113 King Street. Annonk, New York 10504 Attention: Surveillance, Co\'cnants with Ambac Allsurance Corporation to Serics 1998 Bonds The Issuer has selected Ambac Assurance Corporation (" Ambac") to provide. a reserve. fund surety policy (the. "Surety Bond") for the Series 1998 Bonds. Pursuant to the Ordinance, in the Resolution autltorizing the selection of Ambac, the Issuer has made certain additional covenants relating to the Series 1998 Bonds regarding the rights of Ambae as provider of the Surety Bond, as long as such Surety Bond arc in full force and effect, including, among other things, the fol1owing: Definitions The fol1owing definitions shall be added to the Bond Ordinance applicable to the Series 1998 Bonds. "Ambac Assurance" shall mean Ambac Assurance Corporation, a Wisconsin domiciled stock insurance company. "Surety Bond" shall mean the surety bond issued by Ambac Assurance guaranteeing certain payments into the Debt Service Reserve Fund \\1th respect to the Bonds as provided therein and subject to the limitations set forth th,erein. AMBAC Consent Language Ambac required that the Financing Document contain the follo\\ing consent language: !"''Y~ ~.~.~~.. The Bond Ordinance is hercby supplemented to incorporate the fo11o\\ing provisions applicable to the Series 1998 Bonds. A. Consent of Ambac Assurance. Any provision of the Bond Ordinance expressly recognizing or granting rights in or to Anlbac Assurance may not be emended in any manner which affccts the rights of Ambac Assurance hereunder without the prior written consent of Arnbac Assurance. B. Consent of Ambac Assurance in Addition to Bondholder Consent. Unless otherwise provided in this Section, Ambac Assurance's consent shall be required in addition to Bondholder consent. when required, for the following purposes: (i) execution and delivery of any supplemental Bond Ordinance~ (ii) removal of the Paying Agent or selection and appointment of any successor paying agent; and (Hi) initiation or approval orany action not described in (i) or (ii) above which requires Bondholder consent. IN FORMA TION TO BE GIVEN TO AMBAC ASSURANCE The following notice provisions are hereby incorporated into the Bond Ordinance refating to the Series 1998 Bonds, A. While the Surety Bond is in effect, the Issuer shall furnish to Ambac Assurance: (a) as soon as practicable after the filing thereof, a copy of any financial statement of the issuer and a copy of any audit and annual report of the Issuer: . "\ '~ C-15 9f -09' ,:/: l,.; ,,,'I' "" ',,'u,", ,',"" ','" ,n'.",,,. t'./-".,..J21,.",,'..tt1"'. ",Nl. '.. .... ",'.' ',' :' , +:~'.,' ~",::\:,:.;, .:}\':::, ',:, ---- ~.:-.~,~;'.:_~:.::~,.:.:;.':;.'::<:).;:":,:,~:;~ ':..: ,;:~ ;7:,;!~?'; (>(:~:/;.:,fff)'::~,:i,',:i,':::;::./;::',,:,;i(>.)~>\",~,~.::.:'i~;,>..:::,;::::::,~.::,:,~;~,){ :,:>;:',:~:, ,::)<:, (b) a copy of any notice to be given to thc regislcrcd owners of thc Scrics 1998 Bonds and any certificate rendered pursuant to the Bond Ordinance or this Resolution relnting to thc security for the Series 1998 Bonds; and ~ (c) such additional infonnation it may reasonably requcst B. The Issuer will pcnnit Ambac Assurance to discuss the affairs. finances and accounts of the Issuer or any infonnation Ambac Assurance may reasonable request regarding the security for the Series 1998 Bonds \\;th appropriate officers ofthe Issuer. The Issuer will pcnnit Ambac Assurance to have access to and to make copics of aU books and records relating to the Bonds at any rc.1sonable lime. C, Notwithstanding any oUler provision of the Bond Ordinance. the Issuer shall immediately notify Arnbac Assurance if at any time there arc insufficient moneys to make any payments of principal nnd interest as required and immediately upon the occurrence of (i) any event of default hereunder or (U) any payment default under any related security agreement. D. To the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Series 1998 Bonds, Ambac Assurance shaH be included as party to be notified, PAYMENT PROCEDURE PURSUANT TO THE SURETY BOND As long as the Surety Bond shall be in full force and effect, the Issuer and Paying Agent agree (0 comply with the following provisions: :,,\,,) <\U1-1- A. In the event and to the extent that moneys on deposit in the Sinking Fund, plus all amounts on deposit ' in and credited to the Account allowable to the Series 1998 Bonds in excess ofthe amount ofthe Surety Bond, arc insufficient to pay the amount of principal and interest coming due, then upon the later of: (i) one (1) day after receipt by the General Counsel of Ambac ofa demand for payment in the ronn attached to the Surety Bond as Attachment 1 (the "Demand for Payment"), duly executed by the Paying Agent certif)ing that payment due under the Bond Ordinance has not been made to the Paying Agent; or (ii) the payment date of the Obligations as specified in the Demand for Payment presented by the Paying Agent to the General Counsel of Ambac, Ambac will make a deposit offunds in an account with the paying Agent or its successor, in New York. New York, sufficient for the payment to the Paying Agent, of amounts which are then due to the Paying Agent under the Bond Ordinance (as specified in the Demand for Payment) up to but not in excess of the surety Bond Coverage, as defined in the Surety Bond; provided, however, that in the event that the amount on deposit in, or credited to, the Reserve Account allowable to the Series 1998 Bonds, in addition to the amount available under the Surety Bond, includes amounts availnble under a Jetter of credit, insurance policy, surety bond or other such funding instrument (the" Additional Funding Instrument"), draws on the Surety Bond and Ole Additionnl Funding Instrument shall be made on a pro rata basis to fund the insufficiency. B. The Paying Agent shaJl, after submitting to Ambac Assurance the Demand for Payment as provided in (a) above, make available to Ambac Assurance all records relating to the Funds and Accounts maintained under the Bond Ordinance, C. The Paying Agent shall, upon receipt of moneys received from the draw on the Surety Bond. as specified in the Demand for Payment, credit the Reserve Account allowable to the Series 1998 Bonds to the extent of moneys received pursuant to such Demand, D. The Reserve Account aIlowable (0 the Series 1998 Bonds shall be replenished in Hlc following priority; (i) principal and interest on the Surety Bond shall be paid from first available Revenues; (ii) after all such amounts arc paid in full, amounts neccssary to fund the Reserve Account allowable to the Series 1998 Bonds shall be deposited from next available Revenues. '~ C-16 qg-o'1 , I 'i':'~~ .1 >/../: '. ,f,'I:':"'-I-",.t .."~. n .J~ r H ~' " I'.,' 'cl' ~ ' .~ . " '. , , , : ,I.' l: ....., ,'. " ~..1 ~ . . ,., >, ArPENDIX D ~~. -'l_ , ! n " ' <', " ' ~ ...~. ;.. . " FORM OF CONTINUING DISCLOSURE CERTIFICATE :',. '~. I . " I. ~. } I. " ", ' l' ,', i, I ., .\, 'I, 'I. . \,' , I:, . ~ I , 1 " ,~ . ~: , ~.. \ :1.' <"> . " " ! 1 .I ':\ T' '" ~ 'I I' ! 'I, l () '\ 1 I :'1',' ( .I : I" '!":"'~~i:':'f"';"."" ",.,....... " .. " qg-ofj ..........':" ~,f....... .~d " 'L< ~... >.>.1' .'.l," ;':':: ... " . :, . ~'. '. , , -" j ;. .~ _ T.;,. ( ------~--- ..- - - ............... ,~ CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Clearwater, Florida (the ItIssuertl) in connection with the issuance of its $8,105,000 Gas System Revenue Refunding Bonds, Series 1998 (the "Series 1998 Bondstt). The Series 1998 Bonds are being issued pursuant to Ordinance No, 5118-91 enacted by the City Commission of the City (the , lICommission") on August 15, 1991 (the "Original Ordinance"), as amended and supplemented by Ordinance No. 5665-94 enacted by the Commission on September I, 1994, Ordinance No. 6030-96 enacted by the Co mission on June 6, 1996 and Ordinance No.6 188-97 enacted by the Commission on September 18, 1997 (collectively the "Ordinance"), and as further supplemented by a resolution adopted on February [ ], 1998 (as so supplemented, the nAuthorizing Ordinance") (the Original Ordinance and the Authorizing Ordinance are collectively referred to as the nOrdinance"). The Issuer covenants and agrees as follows: SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure, Certificate is being executed and delivered by the Issuer for the benefit of the Series 1998 Bondholders and in order to assist the original underwriters of the Series 1998 Bonds in complying with Rule 15c2-12(b}(5) promulgated by the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 (the IIRule"). ~,:,) SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as othenvise provided hereinJ the Issuer shall provide to all of the nationally recognized municipal securities information repositories described in Section 4 hereof(the INRMSIRs"), and to any state information depository that is established within the State of Florida (the "SID"), on or before June 30 of each yearJ commencing June 30J 1998J the information set forth below in this Section 2. Notwithstanding the immediately preceding sentence, to the extent any such information does not become available to the Issuer before June 30 of any yearJ the Issuer shall provide such information when it becomes available, but no later than one year following the end of the Issuerfs Fiscal Year. (A) the Issuer1s Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the flCAFR"), which shall include the audited financial statements of the Issuer for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting PrinciplesJ as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Government Accounting Standards Board; provided, however, if the audited financial statements of tile Issuer arc not completed prior to April 30 of any yearJ the Issuer shall provide unaudited financial statements on such date and shall provide the audited financial statements as soon as practicable following their completion; and (8) to the extent not set forth in the CAFR, additional financial information and operating data of the type included with respect to the Issuer in the final official statement prepared in connection with the sale and issuance of the Series 1998 Bonds (as amended, the "0fficial Statement"), as set forth below: ---) I. Updates of the historical financial information set forth in the Official Statement under the subheadings URates, Fees and Charges" and "Service AreaU under the Qg-09 - ~ -~." ~ ,~ principal caption liTHE SYSTEMlt and "HISTORICAL COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE BY THE SYSTEM NET REVENUES" (for the then- immediately preceding five fiscal years, 2. Description of any 'additional indebtedness payable in whole or in part from the System Net Revenues (as defined in the Ordinance). 3. Any other financial information or operating data of the type included in the Official Statement which would be material to a holder or prospective holders of the Series 1998 Bonds. For purposes of this Disclosure Certificate, "Fiscal Year" means the period commencing on October 1 and ending on September 30 of the next succeeding year, or such other period of time provided by applicable law. ' SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer shaH provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the t1MSRB") and to the SID, on a timely basis, notice of any of the following events, if such event is material with respect to the Series 1998 Bonds or the Issuer's ability to satisfY its payment obligations with respect to the Series 1998 Bonds: , (A) (~ (B) . ~",? (C) (D) (E) (F) (G) (H) (1) (J) ::; Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on the debt service reserve fund reflecting financial difficulties~ Unscheduled draws on credit enhancement reflecting financial difficulties~ Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the Series 1998 Bonds; Modifications to rights of Series 1998 Bondholders; Redemptions; Defeasances; Release, substitution, or sale of property securing repayment of the Series 1998 Bonds; 2 9C6-o~ ,.... ..', "l- ~I ". . .... - "I -. ';r-~;P---. ~ p } , .. ~ (K) Rating changes: and (L) Notice of any failure on the part of the Issuer or any other Obligated Person (as defined herein) to meet the requirements of Section 2 hereof. The Issuer may from time to time, in its discretion, choose to provide notice of the occurrence of certain other events, in addition to those listed in this Section 3, it: in the judgment of the Issuer, such other events are material with respect to the Series 1998 Bonds, but the Issuer does not specifically undertake to commit to provide any such additional notice of the occurrence of any material event except those events listed above. Whenever the Issuer obtains knowledge of the occurrence of a significant event described in this Section 3, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities law to holders of Series 1998 Bonds, provicted. that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall'provide the information described in Sections, 2 and 3 above, to the extent required, shall be the following , organizations, their successors and assigns: " ' , ~~, ~I (A) Bloomberg Municipal Repository P,Q. Box 840 Princeton, New Jersey 08542-0840 Phone: 609/279~3200 Fax: 6091279~5962 (B) , Thomson NRMSIR AUn: Municipal Disclosure 395 Hudson Street, 3rd Floor New York, New .york 10004 , Phone: 212/807-5001 Fax: 212/989~2078 (C) Kenny Information Systems, Ine, 65 Broadway, 16th Floor New York, New York 10006 Attn: Kenny Repository Service Phone: ' 212/770.4595 Fax: 212/797-7994 '::) 3 98 ~ () 9 ..~. ~ .'~,,~. ._ ,,' - ': ., I. '.... ,., . " :..' ~.:' " '.I.'.\"~ ' ,'....:,.~,:...:...:':-..::..~...c,.:::'...... '} ....', .....~:...,'.~ "... .,. ("I ," :- . ..',' ,.'., ;.:,', .",;,:::, ".;",:"".::::,;:,,:::,::-:./,>',: :.. ')::~'" ~.'~.,,,,>,,.,,, .' ' ",?'::'?:;;f:.;';i..(:s.:;j;;;::'I8:'i:'\::"i;,;,~L;r.\j:;:: !'{'~:,:~;<,:;~:':;;:;;'/". " . ',..,' ,lE}' ,,'J.c , "",.4- ,..,..', ./.."'" ',','> ,'. .. "',, j '~"""';:~':-::':','''~~' ','; .~, '''.''~''':/;,:7:t::,~:' ",~;:;:,'>(',:-:' ':"';.",",;;';::;,:,',<,~ ",,:::,/;::':,'" .,>, 0'" ~...., . d. . .;' :..,.",. Ii. , : .:~~~.:,' .::~. . " t' ,... c.: . ::~,'1 , . " : : ' '.. ...", , ~:.:'\:.';;,::),~. ~:',~::~":. ," ~ . ~ "..., l:c.::.. ..'~ I " , -' '. .... :. . ' . ~ . .,'. .' ~- ~Il" .. - ~ (D) Donnelley Financial Municipal Securities Disclosure Arch,ive 559 Main Street Hudson; Massachusetts 01749 Phone: 800/580-3670 Fax: 508/562-] 969 (E) DPC Data Inc. One Executive Drive Fort Lee, New Jersey Phone: 20 1I346M070 1 Fax: 2011947-0107, (F) Any NRMSIRs that are established subsequently and approved by the SEC. (G) A list of the names and addresses of all designated NRMSIRs as of any date may currently be obtained by caning the SECts Fax on Demand Service at 202/942-8088 and requesting document number 0206. SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provisi~n , in the Ordinance to the contrary; failure of the Issuer to comply with the provisions of this Disclosure Certificate shall not be considered an event of default under the Ordinance; provided, however, any ,.:~... Series 1998 Bondholder may take such actions as may be necessary and appropriate, including ',.~} pursuing an action for mandamus or specific performance, as applicable, by court order, to cause the Issuer to comply with its obligations hereunder. For purposes of this Disclosure Certificate; It Series, 1998 Bondholderlt shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of. any Series 1998 Bonds (including persons holding Series 1998 Bonds through nominees; depositories or other intermediaries), or (B) is treated as the owner of any Series 1998 Bond for federal income tax purposes. SECTION 6. IN CORPORA TION BY REFERENCE. Any or aU of the infonnation required herein to be disclosed may be incorporated by reference from other documents, including official statements or debt issues of the Issuer of related public entities, which have been submitted to each of the NRMSIRs and the SID; ifany, or the SEC. If the document incorporated by reference is a final official statement; it must be available from the MSRB, The Issuer shall clearly identify each document incorporated by reference. SECTION 7. DISSEMINA TION AGENTS. The Issuer may, from time to time; appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate. and may discharge any such agent, with or without appointing a successor , disseminating agent. ' '~ 4 98 "0<1 : .~.: :~ ~ ~. " f:.:,:I.-~ ,: ';'..::::.: . . L , . :'~'......' ;.,; ..1.". ~.: :". ..~. ," /., .. .,. r ..." I " ..{'....., ....... .' , " ,; ,.."."; ;'.' ::, ': .. ,;': ' '.; " "I,'.." ,,"", ., ":, >" ':,,~':, :": ". ' ,I ':.:,;:.:';~J..:;.>::.. ,,':<.../..' /:',~,> '; : /: ..' .' ',"; >,' .,..../,:~', ,,:' 'ii>'..'>: ;{,..,;";" 'i,: ""::';:.);:?~<:"}":"~-:';:~:,: .,,:; ,>'::;";//):/',.::.~...,~,' ..,.."s ".':!)/~' : ,/,\.,>:,'..'}ili~t\;::.. .:{::...}: .~' '/:-: .t): ....1, , '.' ",. ,,' '..., ,.."", . .." ',... . 8 ", "I~ "w '".. '".,. "'" ' :>:~~,,:,:::~ '~):':Y.::';' \'(:,' :-,~'~,~,:~::'~~ '::<::'-' i'i::;::'\,,;~:":,~,;:,:"/"'~ 'f;.. -:":',: :.! ":,':,. ,.,'./ '~<:~: ~': ':..~T'::' >:~:,.' :~:'~"~ ;,>. ..':,'~,::,.>\><,,:,:( ,~':. ::~" ;':...>,;~;~\;: .. ~.:. ,I .' . ,- ." )'I~ "':','.::t'~' .., +.,' ""..1. . , . '. _ . .' i .' . i '. .,~: '. " 1 ~ . '.. ~ / .'!:, """1 -.-' -....... ~ SECTION 8. TERMINATION. The Issuer1s obligations under this Disclosure Certificate shall terminate upon (A) the legal defeasance. prior redemption or payment in fun of all of the Series 1998 Bonds. or (B) the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administrative action, SECTION 9. AMENDMENTS. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be waived, if such amendment or waiver is supported by an opinion of counsel that is nationaJly " recognized in the area offederal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule ifsuch amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule, .:) SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communicatio'n, or including any other jnformation in its annual information described in Section 2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to that which is required by this Disclosure' Certificate. If the Issuer chooses to include any information in its annual information or notice of occurrence of a significant event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such infonnation or include it in its future annual information or notice of occurrence of a significant event. SECTION 11. OBLIGATED PERSONS~ If any person, other than the Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series 1998 Bonds, the Issuer shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person. Dated as of February I, 1998 ATTEST: CITY OF CLEARWATER, FLORIDA By; City Clerk Vice Mayor 'J 5 Cjg .;() '1 "":,>,: ~, , .... :'~.~"::>':', :",:,:,:~',~. ,:; \'~,:-:: ',<:':::':"':,';~"':';':;:i<:.;':'><:':'~':;"~~,'::''J~:',: I',;:'; ::;,':.::',' :J:\::f<i". i.',.'::;.. ... '.', :;::.', "<_:. ;; ,..,.",,'..,..., ,',. ,.' ',' '.' -" ,',',.' '> " ,I,', ",. ,.. ,'.. ~;',:';',.;.:::;':;:'::,,':,., ',':'~,'.,.,\ '.'<":<::.':'~:",~'~,>,7. I "1":,::":",..".'.",,.',, ' ,;"',..,,":. ',.', '.','.',' : ; . I. ~ ".',., C.j' " '"('. '" .. , ' ~. ; , " , , , i;....ld<~~r..{.~:~~~f i\:.:';~;.~~.~; ;:J'.J:~ > '.. ~'. ,1 "0' ':; ~ ; . . , '.. . , . .."';'"' t4~ , ,.... , ", , .' :, ~,. ! ,,' , , .~.. , ,." ; t " I AP~ENDIX E .' O~. ~ :'! , FORM OF BOND COUNSEL OPINION (;, ;t~f.' " " ,,' p , ", >:1, :;. " . " :z:. ;;' ~': ' " ' ~. t . ,{: ~ t.',i' ~~; . {~~~::' , "::~. ',I:, . . .:;c .,. j. , ,. )", .' ',C) ",:,t~\ : r......., <~' . I ;0. ~ " ....; "I- .\, 1,,: {.,' " " 1,,+ t ~c., -;~:v~:tJ~f~?,~~''';:~~ ~ 98 -0'1 . , "L .. .........,.~... ..... F,........ " , ..' ~~....~ ;~"'..q '.~ " ,', .,.. ..h ,~1;'~" . r ,:',:;:::7 C,':,," ','2:: ":~'. ''J ~)~ ~, \..;J APPENDIX E FORM OF BOND COUNSEL OPINION Upon delivery of the Series 1998 Bonds in definitive fonn, Bryant, Miller and Olive, P .A., Bond Counsel, proposes to render its final approving opinion in substantially the following fonn: [dated date of delivery] City Commission City of Clearwater Clearwater. Florida $ CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE REFUNDING BONDS, SERIES 1998 Ladies al1d Gentlemen: We have acted 35 bond counsel in connection with the issuance by the City of Clearwater, Florida (the "Issuer") of its $ Gas System Revenue Refunding Bonds. Series 1998 (the "Series 1998 Bonds") pursuant to the Constitution and laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, Ordinance No. 5118w91, enacted by the City Commission of the Issuer on August IS, 1991 (the "Original Ordinance"). as amended and supplemented by Ordinance No, 6188-97, enacted by the City Commission of the Issuer on September lB. 1997 (the "1997 Ordinance". together with the Original Ordinance, collectively. the "Ordinance"), The proceeds of the Series 1998 Bonds are to be used to refund the Issuer's outstanding Gas System Revenue Bonds, Series 1994. pay a portion of the costs of issuance of the Series 1998 Bonds and to purchase a debt service reserve surety bond for the Series 1998 Bonds, Any capitalized undefined tenns used herein shall have the meaning set forth in the Ordinance. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Ordinance and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not undertaken an independent audit, examination, investigation or inspection of such matters and have relied solely on the facts, estimates and circumstances described in such proceedings and certifications. We have assumed the genuineness of signatures on all documents and instrumenrs. the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not been engaged or undertaken to review the accuracy. completeness or sufficiency of any offering material relating to the Series 1998 Bonds. This opinion should not be construed as offering material. an offering circular, prospectus or official statement and is not intended in any way to be a disclosure statement used in connection with the sale or delivery of the Series 1998 Bonds. Furthennore, we are not passing on the accuracy or sufficiency of an)' CUSIP numbers appearing on the Series 1998 Bonds. In addition. we have not been engaged to and. therefore, express no opinion as to compliance by the Issuer or the underwriter with any federal or state statute, regulation or ruling with respect to the sale and distribution of the Series 1998 Bonds. In rendering this opinion, we have examined and relied upon the opinion of even date herewith of Pamela K. Akin, Esquire, Counsel for the Issuer. as to the due creation and valid existence of the Issuer. the due enactment of the Ordinance, the due authorization, execution and delivery of the Series 1998 Bonds and the compliance by the Issuer with aU conditions precedent to the issuance of the Series Cjg .- 09 'J City Commission City of Clearwater Page 2 1998 Bonds. As to matters regarding arbitrage yield and related matters. we have examined and relied upon the verification repon of McGladrey & Pullen, prepared on behalf of the City in connection with the issuance of the Series 1998 Bonds and the advance refunding of the Series 1994 Bonds. The Series 1998 Bonds are being issued on a parity whh the Issuer's Gas System Revenue Bonds, Series 1996 (the .Series 1996 Bonds"), the Issuer's Gas System Revenue Bonds, Series 1997A (the IISeries 1997A Bonds"), and the Issuer's Gas System Revenue Refunding Bonds. Series 1997B (the IISerics 1997B Bonds", and together with the Series 1996 Bonds and the Series 1997 A Bonds, collectively the "Parity Bonds"). Pursuant to the tenns, conditions and limitations contained in the Ordinance, the Issuer has reserved the right to issue obligations in the future which shall have a lien on the Net Revenues equal to that of the Parity Bonds and the Series 1998 Bonds. The Series 1998 Bonds do not constitute a general obligation or indebtedness of the Issuer within the meaning of any constitutional, statutory or other limitation of indebtedness and the holders thereof shall never have the right to compel the exercise of any ad vaJorem taxing power of the Issuer or taxation in any form of any real or personal property for the payment of the principal of or interest on the Series 1998 Bonds. The opinions set forth below are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United Slates of America. j";':"\ '1.;~;{;I Based on our examination, we are of the opinion, as of the date of delivery of and payment for the Series 1998 Bonds, as follows: 1. The Ordinance has been duly enacted by the Issuer and constitutes a valid and binding obligation of the Issuer enforceable upon the Issuer in accordance with its tenns. 2. The Series 1998 Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding special obligations of the Issuer enforceable in accordance with their teons, payable solely from the sources provided therefor in the Ordinance. 3. The Internal Revenue Code of 1986. as amended (the "Code"), establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 1998 Bonds in order that interest on the Series 1998 Bonds be and remain excluded from gross income for purposes of federal income taxation, Non-compliance may cause interest on the Series 1998 Bonds to be included in federal gross income retroactive to the date of issuance of the Series 1998 Bonds, regardless of the date on which such non-compliance occurs or is ascertained. The Issuer has covenanted in the Ordinance to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 1998 Bonds. ;~ Subject to compliance by the Issuer with the aforementioned covenants, (a) interest on the Series 1998 Bonds is excluded from gross income for purposes of federal income taxation, and (b) interest on the Series 1998 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in detennining adjusted current earnings for the purpose of computing the alternative rninimwn tax imposed on such corporations. We express no opinion regarding other federal tax consequences arising with respect to the Series 1998 Bonds. 4. The Series 1998 Bonds are exempt from intangible taxes imposed pursuant to Chapter 199, Florida Statutes. qg ~ DCj '--: ~.,JlIlIl. ~ ..... > J.' ,. <.J ':. ~' , .... c' .,'1 .. . '. :'~<I>:~':.~ .~{\' .~ >~.~.;.: ! . ,. ...: I. : ;~:-.J. . 'J': ~." . ". ,',' __ lP. '" '" L, , ' :"l~, .' ..!...;.:,.' , ......; City Commission City of Clearwaler . Page 3 <,' ~~ .. . ~. l " It is to be understood that the rights of the owners of the Series 1998 Bonds and the enforceability thereof may be,5ubject to the exercise of judicial discretion in accordance with general principles of equity, to the valid exercise of the 'sovereign police powers of the State of Florida and of the constitutional powers of the' United States of America and to bankruptcy" insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enact,ed. , "Our'opinions expressed herein are predicated upon present lawJ facts and circumStances, and we assume no affirmative obligation to update the opinions expressed herein if such laws, facts or circum;' , .stances change after the date hereof. ' Very truly yours,' BRY ANT,MILLER'AND OLIVE, P.A. , , I:, , . ," .~.' I. " " ~- ", ". -. . '> . ,..J. , ~ :- n. . ,~ [C;' ..:. .'. .~ . .. 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',',"'"1.,',, :f>;.... ,::., ~'. 1,::c:::c: . ..':.'c~.~.~...<"..:,.:.: ":';./.~...;cl::. .i,./~;' . ., ..~, '.>'. ,'"'".,~:.I,:'.,.,:~.:,',:'.::-:,,,';:.::!.';:~::: :<;.':. ""C', ,', >i.:'..' ":"':'.':."::::: ,;..'.,',...:", :.; ...j"., ..' : ,\ ~.. .::', ~~I:.c~:::~I:~~~..: C'-". :.",;'.:.: ..:.:.:....:::.:.~.;<.:.~:.:,::.~.;!, .. .. ,', . 1 .' ~ ..' : .cc.::.!.> >. c '... .r , . . t.\ " \ :' .., .. ,I'" :.... ..' .' , .. . ..< ...,. : l:,~':':> ~~, .:.,":. '::.~:::', <:.,i ,,,::,' :'.' '.:,..,'" ..' ~.' ':' ,',-:': '. ':..':,,','...:: ' . '. .. ,.'. --' I: '~~;:-:1.: ,: ~:..' I'~ . '. . '. '" '.' ",:., ,~:.;'.':';',.,,"":-...,:::'.':.!.' 'Jd':-:'~'>':;'~/'" ':":",."'>'~'::;" ,".':' , :..,:.':;,f;:l::>,'::;:..',<J~~>..';:::-:. '~:l~:":'/' 1".,<', ",,;: ':", ''''::'':::''~':'':;,' ',::- ;','~:.'.':::",;<::::":~(:,:'.:::,:/)':,';,';':. ,'<','~: '::.,' "; :'.,:' L ,. ~".~f;:.';: ~,....:.,...c ." :.i'.. .,:.~.:. c.:.,,..:.',::'..:;:::.',: ~.I .' ',;' < .... c .: ..t. ,..n. _ .. . .... . .: '.. ....> ':, .'..,',,',>,;,;,":,'.;,'.:.,:,',,;.,:,~,~,:.:,;.':,,',.'"::,.:..',::,:'..,';,:',:,:,',:.,:,.'>",.'"",,,:-:,'\:,',..';' " ,i; ',,' '.. ' " , " ~: ',:,i'" , : "',.~'.',;;:,,:,.: ".;",:r\.,c" ':, \;;:,(; '.::f"., ,', ' " ,. . , . : '\ r ..:.... .. . ,1. I..' I' '" ~ . ,. ~ .. . ..' " . .,: ..':,' , : .;, :,"','. :., ' , ' 1 ' . . ~ ,~,I,:.,.:" '.:. ,~.,..-: . ..,: : .:. .". I .. : ~ ' .. ~'~ .:' ;<;. . , . , ..M,~,>. ~.,I.,.~~:. ~,.'. , " (f~~j r:';':,':>' ';5:~;,:: ',',';';:,":,~~,<? ~i'D'.:' ;,:: :..... ". ,,'... ...........-- - ~..,.. '11 .' ."1. ..:, . ..'. ~.;~. . ~ ". . .. -.. ~, .' ..... ,. '.' " . ~: \, ,...J: , J " . '. ,.' " ,'" , .'1. J.~. . ~ ~ . , " " (:!\" " ; ~. ',' ..,:'. " ',',! ':; ~;;, :~\":~'~;' Y:~N:{t; i:~':';!:'i:\5':~.;;; i :; ,; ~ ~ '. . .. f' . , , '.. ~ '.0 , " " ' .\. ;/ ~.I. i :. ',. ,} .. '..' .. ,~,.:; .: {(;'>'::", .. '.~~r-o' ' , }~*. j./ ", ' ,\"::..\",'''.)~ .v~..,' ,. ~ 0., 1:\!, j\:r. ~'11:' , r'.~., .. i\..' i~t>, . .1.;."\'.';.' ..... ..~ . ~!'{1};;' '\,', ~r~:'<'~:'.' .': " " ,,' ..,\. , " .: ',: ~ . . \.., " 'r'.. ...' < L " c:. .' " " . ~' ./. ,.. '! APPENDIX 'F "":"Q,,..!. <::\'0 \" ' .. I ..~. SPECIMEN BOND. INSURANCE POLICY :. ,) I';. I, ;.:'~, ; i;,~', '-,; < , , ,.., lr.;~:;.; ~' ;1; .' ' ,,' : .t,~ .:.:. .. !~' . - , /!t1;.'::':. 'l, ~. t : . . . \'" . ~> . (: ~.. ' I'. ... I ..~;., ~. f:: ..1 ;J:~>; ,; > , ~~\; f. .. . .Jt:/.~..".o}'. . f;~.{,; , , f.'",,:, 't': O,<;14t ~ " ,,-. . 1,. . '., ;~:~:... ~ ... .;.', .j; ,., ~~'f.' !~,I; , -: , qft ---ocr ;.: .' .l<~~Ii;i?tAW~~?~?~"";'~~~""" '~:..'.; '".' . . L " r "t ., . ~ ... . r . .,. ,i~;/:<~//:~~i~';~i-~f:.~: ~::i' :, ::.'~':: r::' , :' ":" "'I"'~'-_ .......L.... ~.....~< ........... . ....,;. ''-'... Y'~:."...~I,.:...::I, .~-1I'.._."h#...~~.'P., _I.~'~ ~l. .\I~~^~ '" 'I' ~;!:r:"~:.!~~;;'\;~:;'~; -- .- .""-.- - I~ MBlA FINANCIAL GUARANTY INSURANCE POLICY MBIA Insurance Corporation Armonk, Ne\\1 York 1050-1 Policy No. MBlA InsWWlce Corporation (the "Insurer"). in considcmtion of the payment of the premiwn and subjctt to the terms of this policy, hereby unconditionaUy and irrevocably guamntees to any O\\nc:r, as hereinafter defined, of the following described obligations, the full and complete pa}ment required to be made by or on behalf of the Issuer to or its successor (the "Paying Agent") ofan amount equal to (i) the principal of(either at the staled maturity or by any advancement ofmalWity pursuill11 to a mandatoI)' sinking fund payment) and interest on, the Obligations (as that term is defined below) as such p3)ments shall beeome due but shall nOl be so paid (except that in the event of any acceleration of the due dale of such principal by reason ofmandmory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandalory sinking fund pa}ment, the pa}ments guaranleed hereby shall be made in such amounts and at such times as such pa}ments of principal would ha'..e been due had there not been any such acceleration); and (ii) the reimblmementofany such pa}ment which is subsequently recovered from any o\\ner pur.;uant to a final judgment by a court ofcompetent jurisdiction that such pa}ment constitutes an avoidable preference to such o\\<ner within the meaning of any applicable bankruPlcy law. The amounts referred to in clauses (i) and (ii) orthe preceding sentence shall be referred to herein co\lectively as the "Insured Amounts," "Obligations" shall mean: Upon receipt of telephonic or telegraphic notice, such notice subsequently confinned in \\Titing by registered or cenified mail, or upon n.>eeipt of\'oTilten notice by registered or certified mail, by the Insurer from the Paying Agent or any o\\ner of an Obligalion the pa>ment of an Insured Amount for which is then due, that such required pa)ment has not been made, the Insurer on the due dale of such pa~ ment or within one business day after rcteipt of notice of such nonpa}ment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N,A., in New York. ~4:w York, or its successor. sufficient for the pa}ment or any such Insured Amounts which are then due, Upon presenonenl and sUJTender of such :".. Jiigations or presenttnent of such other proof of O\\nership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured AmolUllS due on the Obligations as are paid by the Insurer, and appropriate ins:ruments to effect the appointment of the Insurer as agent for sudl o\mers of the Obligations in any legal proceeding relaled to payment of Insw-ed Amounts on the Obligations, such instruments being in a fonn satisfactory to Slale SlTCet Bank and TnJSt: Company, NA, Slate Street Bank and Trust Compan}', N.A. shall disbLlrn! 10 such o\mers, or the Paying Agent JX1} ment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent fOl' the pa) menl of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which ma)' at any time be p3)'able with re5pt.'Ct to any Obligation. As used herein, the tenn "O\\'l1er" shall mean the registered O\\l1er of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The telTt\ owner shan not include the lssuer or any pasty whose agreement with lhe Issuer constiwtes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located all13 King Street, Annonk, New Vork 10504 and such service ofproccss shall be valid and binding. This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the pa}rnent prior 10 manuity of the Obligations. TIle inswance provided by this policy is not covered by the Florida Insurance GUar.lr1ty Association created under chapter 631. Florida Statutes. IN WITNESS WHEREOF, the Insurer has caused this policy to be execuled in facsimile on its behalfby its duly authorized officers, this day of COUNTERSIGNED: IVIBIA Insurance Corporation C~~~ presS\' € Assistant Secretary Resident Licensed Agent '~, Smte Attest: S1n-RCS.FL~ 4~S 19 -09 " . ~~. ~ .t'.';:..'::' I.}..'t:; .~~'r;; >: ~~I. ":. ~. I, , " 'I .I '\ 'I, , , '1' ',' I }~ + ,'.' \~I.. 'I""'" " . '." " . ':... ;. )", " '...' ' ,I:, , I', ' '. ' 1. '. I" .. I;,'::" . J.".,.l.. .t.._, I"~:',>,' " 'I'. " . f,.. " .. .' f':'" ',.' 'zl. . " !'.:. . (.f , ~, ~. ,- " ' APPENDIX G r~" :1~ ,;: . . ' ,.., SCHEDULES OF RATES , .. " I, " ;11 \" 'c' " I', ' '. ' ,1'."', '. .:. ,\ .' ~.: . '! ' t~ll& .. , ' ":-: . ~ .".. ,.' <~ ~~.. 18 -oct t...\.. t.. : ~~, ~.....:-\ ........,-";~>~.,~ .1 \, ~ 'i.:". . c ... "~~".. c.... ~/l"'I'" '.l,.~'~'" ~'.'~'. . '~ +r ,..1". ,... " ..' . .----~'~......'-~. \,- ~c.'.. ';'.";.,"> >~..." I.~.I.' ",-' ~ i r: I,,:" i"r':" '>~I":r: q;.~ .T.:'.:C~.:< ~.. . L.,c';, , " "., '.',,,..' ':' ',," "','" ,.,,'.. "'" ,.ti,J'" ,> " 'w" ;:"""'71 ,.., .' /../".'. '" ,', "', "'''.1 :' ,,' .,'.. 5:"t',.:, ...j::{:i":..... 'i:,;,;.:, ;,)\".'. '.~:+7':....,,;~::b':::::'.' f:i?i" {'. ".":;::t:~::<"i'i;. '.; "",'.~:"',"".;" . .;':. . ~;... ".10 . 1. , .. , , ' , , ' ~. , . ..: \ . , .',"\ ,.,....:. r~'I'..'" ~ ~'''.I' r: r .,.. '. \ '.. t ' ~ j , . " \ ' !' i;, ' 10 F. ",' I.' " F: ' !:;' < . \, j' !.':, ~; .' , f.,~~ ,', . I; . ' ,,;': ':,' l~ ; '\ ,:1".'. . \, , ~, '~ t:3 \ l~ ~a , II - ,~S, , ~ ... ~l a ~ ;! , fj "II :1 = \ fl'.,l. " , " " ""0 ',"I. . .:! >'. J.' , " "'! , j.i ..' '.':-cl'. .~~ . '; I ).' , i-: ;: { , . ' ~ : , . :',0 I ;.' ~, " ;.'. '. "i- '., '........n :I i. ~ ! " 8' 88 a ~~ "" ..,- ..........~ ~ ~ ~ :a I ~ '2 '8 If.I CI U ~ '0, u -5 '~ ] li '- o. ,~ <5 i 1""1 i . i ii:$ .- e ii ." ~~~ ' 8~ ~ M P- iilJ ~ 'is. '0 o~'ij ~.5 "I -5J!~ ~~ .s fiE~ ll1 ~,gl .1!~"" S"tl'Q ..aR j!j 88r "tl"tl 66 .............. =:..c.c. '\ '\ ,j , ,/ , " 98~09" . '." ,.. . , ~888 8 ,..: g 8 g " g Mt:i..;; R :S~ :z; 0<<; , 8888 ~g~~ Vi!;lloOlt:! 888' 8 8, QOO ,,; ',,; ........ ..., ,i,\ ~ Io"ItoI'I.., ........,.... ... 88g g8 ' g 000 vi ..0 ~ ,,; en;; t; Nt:! ,t; .... ... ... &I... ... ..... ..... ~88g 8;8~ 8888 ~...-i....vl. .nOaGM ~";M.n ....t;;Z;~ ~.~ i;; v; .....--...... """""""" -- ~gg8, ~Zi~ti 8~8~ ~~~~ g~8g ti~~~ , , ;.. G' t:' """,Ii!:: .....li!::c;.,;- , g;;;~8 . -"'-, - ~' g ~ .~ .:~ ~y i€~ls II!].... - c~....== j6iJJ ~' .~ 1 ~ ,U lJ' ll$' 'iib R ~ :ol lE ~r-<CI3~ Bll'sr i':;.~.~ -COUU 5 :e ~ 'ij to: , 'a.~ 1= ::i "":.::: lo is ~.jd~ lOti: l' u ~.a ..lS .~] f~. 8 U ... Ji ..............,...'. ...-- ... .. ,.. i .',- "l-, .. '.':.. .;..:.,... .; ,r .. J~(: ~< ..<:;' : 1;".,:,> f, .; , . ., .' ~....; ~i~~' :~;:~ :?'~!?;;f;~ '~;>.\.(:~>'.~:P '; J. I r, 'j ~. I'".. " , , ..r ~. ::~ '(';'~ <I'; . ~;~'~~J". EXBIBXT C , .. ''': T,,: . .:~J;.~ '.' '-: ' ~j~,~,:. :' . 'CONTINUING DISCLOSURE CERTIFICATE .lF1: '.;.;,.. ~I:~ '... ~ '. ....~ . .. :~:,',;~:'. :::; ~ ' .'...:' lf~.~ "~~>. ~ ~ ~ . (~~.:y",.., ~~ ~ ' ;.> ~ . ~ ...... , f '~~;;:{.,~ <:",.' . ; ~." i: " . r'~':'; ,,'. . :r<',.., '. ",. ;~;'''~\.::>'' ~;,:;, .. ~,~~: :~':~~' .:' ti.:;;',f'" j).f~~:;>:':\;'" 'l:'~ "', ',::}:. '''''' ~., '. ~!;i':i; ...... ~)~.:.~ 'c" c ' 'I f. " .' , ., .'- .~ , , .1 .;;. " ~~I ,.. :.rl-r.:. :' ~'<: .,. c ~fL): i~:\.:'"r , c' ~. .~ f/', U,i <~'. + ,c, J i."'\c C" ~Y::>' .. ! , i; >.~: , ~. '. ,j .\ ' ),'f , 'j : :. " I' ;.; ~ : . I:: ,'; ,", ~f;:,; ,;', i:,'. : C :::- :.'.~: ~ ': ~~,:;;;;'. '\ "~\ ~ . f:,l'~:. (.T'::, ' KF ;',..:. r' '.' f\::O ~l:' .. . r':" / ; , " ~:~t ::: + \',. 'fv.'" '. ~" I, <\.' '. I qg -09 ':":'i!f-i1l~~\lIT~#l~:."':"',> . ' : .} ~: :':.:", ~ :'. . , ,: ~:: ,~~~.'~ .'. :. . :, ~~, . :':;: : n: >~ ~.I~ ..... :~. ":..~:). .~. . .~l .~i:-:--"'''''\''"''''''''''~'''''"1I..It-~!;o-,.'''("lo............",.. , . .., , ~ "';~"''':.'~'. .~~......... ..hl....~":... " " , ~ '.~'''''..j.''" ....."f. >f.>.~.:.\,... .~~,. 1"0. . . I. ," .. ,",". v ::.....,e . <(: " ':", '...',..: .~' :"':;';:.<', '::,.. /.: ,,:::">: " ;: ".:..... .' '," ,:.', ,", ,',.' .... I ' , ..' "",.'~',.;':.:,:';:.;:,'::\<'<';,:..:...:' \~7\,,':0i22~iJ1i:,:~~~'::'i',:,' ' ":~.::.',: <... ,> ; ,', ' - ..-.r~____ ~'~.':l .,:~".:..:' ....:.c +: , . :. '.~, ",.. } ., .:,. , . . l :. .. '..'. ~ . .", ~ . .,....'. : ... .<..:.... '.:.,,':~,','~".",:,,:..; ;", /'. . .~." .>~ I ';.f ...~: /:~. ~,. . :"..,.,. c.... ill I :::: . ~,' ;"... :,': f' ..i. " :".. I . ~. - : . . ...l. . . .' ~,c ; ". I :. :'<:.':.~ <,. ':: ,..~\ ......~ .,. . ,. '., " " :~. ~. "" ,',' ~ ~,' . . ..'. :. ,"." .. '. ,. ." , . ""'1 ' ; ~' .:, +.~\~; :';'>,' .. >. {~;~~l~ J,t~, r. ~~:~~~1r.~\t; ~.t~: \?:~I; ~~~~l~ W;;:!;';i:!,::ti:i":':.. '.i,'.;\:\;: , ! '. ' .' ....:::..> ~.::.)::/",::,' ,",~.'r,',,~~. .,11 4 ",.',':" .... ,,'. _,: _', . 1_..." "'d, ~:i, ", ' "';"- ',' ",.":,.."..,.."..' "',':,';" ") ,..:,<:,;,.',".,>~..,..,:" " ,;:.......:,.>'::. .:.<:.,\,,". .":,~">'..":/~,'~'<:'>, , . . I . . .' . I ' ; < ~ . ::+ :< .'. . . <,. 'T" . . ., J -'.'... ". ",:',<,<';:,':::',". ' . I. . ~ - ---- ""'lr ~ CONTINUIN,G DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Clearwater, Florida (the "Issuerll) in connectilln with the issuance of its $8,105,000 Gas System Revenue Refunding Bonds, Series 1998 (the II Series 1998 Bondslt). The Series 1998 Bonds are being issued pursuant to Ordinance No. 5118-91 enacted by the City Commission of the City (the "Commission") on August 15, 1991 (the "Original Ordinance"), as amended and supplemented by Ordinance No. 5665..94 enacted by the Commission on September I, 1994, Ordinance No. 6030-96 enacted by the Comission on June 6, 1996 and Ordinance No. 6188-97 enacted by the Commission on September 18, 1997 (collectively the "Ordinance"), and as further supplemented by a resolution adopted on February [ ], 1998 (as so supplemented, the" Authorizing Ordinance") (the Original Ordinance and the Authorizing Ordinance are coUectively referred to as the "Ordinance"), The Issuer covenants and agrees as follows: SECTION 1. PURPOSE OF DISCLOSURE CERTlFICA TE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Series 1998 Bondholders and in order to assist the original underwriters of the Series 1998 Bonds in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission ("SEen) pursuant to the Securities Exchange Act of 1934 (the "Rule"). '-::) SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise provided herein, the Issuer shall provide to all of the nationally recognized municipal securities infonnation repositories described in Section 4 hereof(the "NRMSIRsIt), and to any state infonnation depository that is established within the State of Florida (the II SID"), on or before June 30 of each year. commencing June 30, 1998, the information set forth below in this Section 2. Notwithstanding the immediately preceding sentence, to the extent any such information does not become available to the Issuer before June 30 of any year, the Issuer shall provide such information when it becomes available. but no later than one year following the end of the Issuer's Fiscal Year. (A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding Fiscal Year (the "CAPR"), which shall include the audited financial statements of the Issuer for the immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting Principles. as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Government Accounting Standards Board~ provided, however, if the audited financial statements of the Issuer are not completed prior to Apri130 of any year, the Issuer shall provide unaudited financial statements on such date and shall provide the audited financial statements as soon as practicable following their completion~ and (B) to the extent not set forth in the CAFR, additional financial information and operating data of the type included with respect to the Issuer in the final official statement prepared in connection with the sale and issuance of the Series 1998 Bonds (as amended, the "0fficial Statement"), as set forth below: ;.~J 1. Updates of the historical financial information set forth in the Official Statement under the subheadings "Rates, Fees and Charges" and "Service Areall under the q~orq -- ~~-~ - - I' 'J' principal caption tTHE SYSTEM" and IlHISTORICAL COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE BY THE SYSTEM NET REVENUES" (for the thenw immediately preceding five fiscal years, 1 .' i I' I ! 2, Description of any additional indebtedness payable in whole or in part from the System Net Revenues (as defined in the Ordinance), j , ] ! < ' 3. Any other financial information or operating data of the type included in the Official Statement which would be material to a holder or prospective holders of the Series 1998 Bonds, !' For purposes of this Disclosure Certificate, "Fiscal Yearlt means the period commencing on October 1 and ending on September 30 of the next succeeding year. or such other period of time provided by applicable law. SECTION 3. REPORTING SIGNIFICANT EVENTS. The Issuer shall provide to the NRMSIRs or the Municipal Securities Rulemaking Board (the IIMSRBII) and to the SID, on a timely basis, notice of any of the following events, ifsuch event is material with respect to the Series 1998 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series 1998 Bonds: l:J (A) ".;,t! (8) (C) (D) (E) (F) Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on the debt service reserve fund reflecting financial difficulties; Unscheduled draws on credit enhancement reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perfonn; Adverse tax opinions or events affecting the taxwexempt status of the Series 1998 Bonds; (G) Modifications to rights of Series 1998 Bondholders; (H) Redemptions; (I) Defeasances; (J) , Release, substitution. or sale of property securing repayment of the Series 1998 Bonds; l' ::,:';}, W 2 Cjl-09 .~.'-;.'.~ ('.. , " " '.. . ,.<.., .,.., (K) Rating changes~ and (L) Notice of any failure on the part of the Issuer or any other Obligated Person (as defined herein) to meet the requirements of Section 2 hereof. The Issuer may from time to time, in its discretion, choose to provide notice of the occurrence of certain other events, in addition to those listed in this Section 3, if, in the judgment of the Issuer, such other events are material with respect to the Series 1998 Bonds, but the Issuer does not specifically undertake to commit to provide any such additional notice of the occurrence of any material event except those events listed above. Whenever tbe Issuer oqtains knowledge of the occurrence of a significant event described in this Section 3, the Issuer shall as soon as possible determiile if such event would be material under applicable federal securities law to holders of Series 1998 Bonds,' provided, that any event under clauses (D), (E), (F), (K) or (L) above will always be deemed to be material. SECTION 4. NRMSIRs. The NRMSIRs to which the Issuer shall provide the information described in Sections 2 and 3 above, to the extent required, shall be the following organizations. their successors and assigns: ' .-'<l~ .,~/.i (A) , Bloomberg Municipal Repository P,Q. Box 840 Princeton. New Jersey 08542~0840 Phone: 609/279~3200 Fax: 609/279~5962 (B) Thomson NRMSIR Attn: Municipal Disclosure 395 Hudson Street, 3rd Floor New York, New York 10004 Phone: 212/807~5001 Fax: 212/989-2078 .(C) Kenny Information Systems, Inc. 65 Broadway, 16th Floor New York, New York 10006 Attn: Kenny Repository Service Phone: 2121770~4595 Fax: 212/797~7994 " '::; 3 'qeg -09 ,.,.... .', <... ~~~;~~I~~~~~. .... . . '. .,..1-11"""-8"" ,""'" JJ.;'" "".' '.of ;:..". ~ :, ::"...@,",c\';';: ....:, '.S-{;r.~>~,~",::',,'.-?-Yi;~j, :,', ::,...'.:.:,..~",:,~.FJ::<.::.~~l ,\~, :':; '::::,::>': C;.: . ,,:y',r,~~ :;,', . ~.,;.:.. . .... .. . , " .,. :' "\.:-... 'q ...'..c ,.r.",..:~: ,.:'. .".:.l:~~~..:~~:";:~:.:'.~....~, ':.,' ~,\ (D) Donnelley Financial Municipal Securities Disclosure Archive SS9 Main Street Hudson, Massachusetts 01749 Phone: 800/580~3670 Fax: S08/S62~ 1969 (E) DPC Data Inc. One Executive Drive Fort Lee. New Jersey Phone: 2011346-070] Fax: 201/947~0107 (F) Any NRMSIRs that are established subsequently and approved by the SEC. (G) A list of the names and addresses of all designated NRMSIRs as of any date may cutTently be obtained by calling the SEe's Fax on Demand Service at 202/942-8088 and requesting document number 0206. SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision in the Ordinance to the contrary. failure of the Issuer to comply with the provisions of this Disclosure Certificate shall not be considered an event of default under the Ordinance; provided, however. any :> Series 1998 Bondholder may take such actions as may be necessary and appropriate. including ':'!I pursuing an action for mandamus or specific performance. as applicable, by court order. to cause the Issuer to comply with its obligations hereunder. For purposes of this Disclosure Certificate, uSeries 1998 Bondholder" shaH mean any person who (A) has the power. directly or indirectly, to vote or consent with respect t01 or to dispose of ownership of, any Series ] 998 Bonds (including persons holding Series] 998 Bonds through nominees; depositories or other intermediaries), or (B) is treated as the owner of any Series 1998 Bond for federal income tax purposes. ,~ SECTION 6. INCORPORATION BY REFERENCE. Any or all of the infonnation required herein to be disclosed may be incorporated by reference from other documents, including official statements or debt issues of the Issuer of related public entities, which have been submitted to each of the NRMSIRs and the SID. if any, or the SEe, If the document incorporated by reference is a final official statement. it must be available from the MSRB. The Issuer shall clearly identify each document incorporated by reference, SECTION 7. DISSEMINA TION AGENTS. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate. and may discharge any such agent. with or without appointing a successor disseminating agent. 4 Cft-09 " <. ~ ~~ ' . -w ~ ~. rr .- ~............-- I (~ SECTION 8. TERMINATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all of the Series 1998 Bonds, or (B) the termination of the continuing disclosure requirements of the Rule by legislative. judicial or administrative action. , , , ' I \ ; I ' ! ' SECTION 9. AMENDMENTS. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate. and any provision may be waived, if such amendment or waiver is supported by an opinion of counsel that is nationally recognized in the area offederal securities laws, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule, ~ \'....'(1 SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in its annual information described in Section 2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in its annual information or notice of occurrence of a significant event in addition to that which is specifically required by this Disclosure Certificate) the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in its future annual information or notice of occurrence of a significant event. SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer, becomes an Obligated Person (as defined in the Rule) relating to the Series 1998 Bonds) the Issuer shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person. , Dated as of February I, 1998 ATTEST: CITY OF CLEARWATER, FLORIDA By: City ClerK Vice Mayor \.J 5 Qg-09 ..' . .~:, .... \' ~.., ' ",":.' . / '. .l~:.;, .....I,~;' >.~ ': I' ~"T" . '., . , " . l-, ., .. ! ;. t~~: :'.r;~~;:r'i;:~~~~.T:~:~::f.~.::~.z::~>, ~.\.~ .::~ I ~~.,... 1", .~.. . .. ." ~ ~ '.,,~ ~:'~ ' c, :..~ '~'. > :"/<c:'l'. .,',~ . + ~'. ';-:':..' .', .. ~ I,::.fP . EXHIBIT D :/: ," 4' COMMITMENT FOR MUNICIPAL BOND INSURANCE .' u"" ~ r Y>:' /.;' .~:" : 'of ~ ~ ...'., i1.... ~~ >' ,\'. .. , ~r:~'". 7::.. .. .. . ~,. c . ~~. I .~. . ' <~.1 ~.. .:(.. " ~,...::. . . ~..; , !~! '.; ~: t~';:. '~.. .,! , ~. ::. . :,..~," : t: ~::C> \. ~J ." ~ t{';;.'.'.c,. '.. ,i~1;':>':' :",' , , '. . ~.. ~.\;~ ~ ~ :~f:;': ~ " .' . " :c'" '0 j' i' ,: ;" , .. ;~:r~:0 "/'..:;J,, {'" ;':)\ '. c,: :, '3J. c ~: :. ," ~. .' c',\'. ~:c : . t.. " " " , \('" \:' ~ 'c .~ j " ;;: r.~ ;'; j ~- : { . . ~f < ~ .~ . ~'.~' ~ j:'.f: :< . ~ ';",'. " ,. ""P,, . ..oc, ~~\:. .:' , 1,';,::,IO'C' ~:; I ~ . I" ,; !>:~ ~ " ~.:'. . ~,,": ' . i i:~. , ';, .: ' y;," .... ~ T ~I.~ :' '\. ,', 1~~:~if~~~f~r~>~'" ..~:: ~:' ;",> ':' : ,',;, i;.,.:,:::a:i.':Ji;:::i::~'<;,"""'~: . 'c' ,<, .... ":.--......_.....~~ '1/~+.1o .~."'.1)- .~"'." r ' . . ~ .;' . ". :~.'. J '. < '.. . : ;:",,>:: :';':';'~:'>,~; :;:;::<:,,';', . '. ~<~:.;:..>.~.,'"":..: \... ::' ..' " " .~ ~ .: '" .;, . i. : .. -'.._~~~_. ;'F . t. ~ ..'" :.,.t'.. . :. ". a / ~ . '. . ~ ' ... . ~.: ~ .. '." '. . .'.,. ... ~ .. ., , . . . . . ~ ': ',.: ~ ;'~. t. .' > :;...:,' ~ ;. '..~, .'.:./ (-' ,~:'. . I . " . -, . . . .. ~~_:' "I~":"> ,<':: :,...:.",' ':':";"""";', ... '):',.'....,;,.::,>,,~,:;:.' '::,:," , ';::',':::::::""',: ,..",:',:.'~;'\,: <,~ ;,:, :;>;:':.,..:,.:,...::.,,'>:' . ." ;:.: . .. . . .. . " . I..~ _~+\' :. --:-- l. ..~ \ .. :'~ I .. ': f' . .'. , . . . '::',~' ..., .". ,'. " ~ ' ,,' ... . I t. . ~. 'F I " . ... .": . :. ' i ': I ?\;'\,:;""I""(~'; ,~1,\;:ff.';:" ~"'~'l1\:"tf: ~i:e~':;~i{\:..;,:;,' r ;}:.l'\;.:,:>, :~; 'b ','"''")'''!''' ..~~~.~{:r~~,:~l:.. .~>.~'.. \. .. 'I ", " , " ..';.r' .. I "';.:\.. ~. . .~ .,. ~<.....L ,. .. '.~ .."p.....,'i- ~)-..' L,,' .'. " , , ,; ~,. . . .l.<~'~~ ..' .".'. " , .~ ; , " ' . . ~ ,..'.. . ~ .. '.: ~.. J, 'l.. ,,' .t", '.' ..;; ,. '; :',:;,:: :I'~":"":' , " ,I" .. ,'" , .;: ,.," J. Ie: i... .. ': :.: ~~'~~.: ,:..." ,~.>. :.:~ ~ <,.'. I " q<t ~OCf .,\,"':l:"I'\';". .. \. ... ......';.. ',,~. '..~ '\ 1'. '".f;.;..,......:. %.. ~~. '_~ .~. . :t-. ~ .. ....' r. . '" ~\ ., ., . ~..' . . .. ! :.~ ,i.. I'.. .,' ,~ . ..~ e: ~'. . ':. ,...1 .,' ,< L .. ~ . ... . , .. ,. . ..L ~ .. . .. I .....,::.,:. . .... " '., . e ..'. "..."" . ...;. '. I... '. . , ... .. I I' , :.'~ ~ . : (, ;; . .. ",<" ..., ; ".,:, .,f, !'" .. L., , ., ' .., , . . ~ . ;i~'< 'I::;>'P" ',~:,:: ~"','<': :,~~, ',:;; " ",',71 ";' ..;.. , , , ' , \ :' :'.. I " . .: > ~, . ;, , .. " ".. :., ~;..:'. . ,.';.,~.', ' . < .>. " ,. , . ~ Uw...."" ~,..,.'.. ,'.". ~:...-~':'~~; nr 'J~..~j ~. ~ I .,..' . ':' .. ,.. 'ee . ~p.,.. ::.'.. I., > ,. ", .' : '.. " " "~ :~) ,..) ~ ~ '-~~r"- ~- _ _ JAN 09 '98 H,J: S7AI1 BRYRNT MILLER OLIVE P.Zl'lG MBIA COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Application No.; 1997..005853-04 Sale Date: January 1998 (T) Program Type: Negotiated DP Ilc: $8,105,000 (Est.) City of Cleanvater, Florida, Gas System Revenue Refunding Bonds, Series 1998 (the "Obligations") This commitment to issue a financial gulU'anty insurance policy (the 11Conunitmentll) dated January 8. 1998, constitutes an agreement between CITY OF CLEARWATER. FLORIDA the ("Applicant") and MBIA Insurance Corporation (the ltInsurer't a stock insurance company incorporated under the law:; of the State of New York. Based on an approved application dated January 8, 1998, the Insurer agrees. upon saUstaction of the conditions herein, to issue on tbe earlier of (i) 120 days of said approval date or (U} on the date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the "Policy h) for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the Policy shall be subject to the following tenns and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of dclivety orand pilyment for the Obligations, ofa nonrefundable premium in the amount of ,195% (premium rate) of total debt service, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2, The ObUgations shall have received the unqualified opinion of bond counsel with respect to the tax.exempt status of inter en on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance. Trust Indenture or other official document authorizing the issuance of the Obligations or-in the final oftjcia1.at~tement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any infonnation submitted to the Insurer as n part of the application or subsequently submitted to be a pan of the application to the Insurer. s. No event shall have occurred which would allow any underwriter or any other purchaser orlbe Obligatjons not to be required to purchase the Obligations at closing. 6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obligations, 7. Prior to the dcllvery of and payment for the Obligations, none of the information or documents submitted ns a part of the application to the Insurer shall be determined to contain any untroe or misleading statement of a materiaJ fact or fall to state a material fact required to be stated therein or necessaJy in order to make the statements contained therein not misleading. 8. No material adverse change affecting my security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. .. w -()Cj . d '. .-' "-'" fil-r-, 'j, ""'",." :,:; :7;{ \)(:,:,, ~<,.;;,';3) :~,-;?\y;;/;:,,<: ,: - ;:'::;'i:~(!,qn:; ".;.:,:; .;, '::::: (:2;,:;.... :,::,":,',':,:; .,;:: :";::" ,,' "".: l . . . .I..~ " ., , _ ! '., --. T.....,..- " ""'f , , rJ :.. ~~.":I.c:;::t:~~\~..:\I..~....;;.~~~:, ..>.l~~'>.;~;"", ~.".; "~, ,JAN a9'98 la:SB#=lM BRYANT HILLER OLIVE: P.3/16 ..NIBIA , ',", :. . '., \'.::"i-' , , ',9. This Commit'ment may be signed in counterpart by the parties hereto, 10. Compli~ce with the Insurer's following (see attached); , ,a) Standard Conditions For Refundings; b) Generll Document Provisions; and , c) List' ofPennissible Investments For ~dentured Funds. Dated this alia day oflanua:y, 1998. " " ~.:.. \ I . " MBIA Insurance Corporation ~ C.. ./.,~ By ,4l/,;?j..r . &~~f~ .' . 1.. ,:,' , ' j.. ::.{' , , ' ,.i.. , ' CITY OF CLEARWATER, FLORIDA " ::, . " , . . .' , By: Title: ~(.:. ':)' :,' ,!., ' .~ . . .. : . ~.... I , , ,., '. .". . I" " ,.,., ;<'. 1. ~: . ~ .. I , , " \." .. . , , I ' , ,?, " ' ~ ' ~ . , , ,,", , ;, ,.... . .. I, ~ ".0. \" .... , c. V 0' , ' , , qC( ~o9 " .t).~!j~J1f~/,.:.k,:~'ll: A't.:"':h\i'i;~i,.;or~...,~. ....~ \ .: .,. Cc . .1"," .,..,(~."Cf\,~.:I.("".:"~"'~~: .',r. ...,~ ., ">\,.'. ,".. , ,. , ',' ,....'1'. . L,.. '............,.t:."r~~'~{,,\~~t~.;,..l;:; , ~ . . : .. .'.' . :. ',~ ~ .r. '::.,~: ? l . :. .... ' .. .....'1. ':..:'.,' .: 3 j' ;' ,.,: ',: ~ :'[ \ :', ;:" :'''''',;, " ' " < I.:.. , ,t . >. ..: . . ... .... "',:' .,"" '.. '>O~':"/<":"":'/':;>:':<::':""""j: -- ,',,' "', ',' ""'"",','",:,:...:',;..:,:..,;,,... >""" "', ..., IillIII'!!"': " ~. ',' " ,.:'.>:;~:"':',:';':' , , , ,', ~;t~">;:,~':-::::;:',;':>;~ ;i'",;ii,;:i:>:,~':,,:;!~<,:~(f}12,,;:,.:~);(/:t~,',::~;:',;' y};:'g;;}"~~"~~;)':i':rr:: , ; i<;/'}:,::'/:,n,-: ::"'::,:/'~;t {{;';,':,','; ,;': <,f' \,,:/ ' , " >' '. ;:: " ,,:,~;::: ::\::':: .'. .1" r: t. ..... ,.,.. ... ~,r:i.;"';"'~""::" :T:~!' .. .... ~...... _Ib... ......-- .' JAr'l 09 '98 IfHS8AM BRYANT /1ILLER OLIVE P.4"'16 MElIA " 'J ...,......... sr ANPARD CONDITIONS FOR RJ;;FU]IDlNGS A. Receipt by the Insurer of the final debt service schedule on the issue within three business days from the sale date. B. R<<eipt, satisfactory review and subsequent oral approval by the: Insurer at least ten days in advance of Closing of draft. copies of: 1. a verification by an independent CPA finn of the sufficiency of the escrow to timely retire tbe refunded bonds; 2. the escrow securities purchase contracts of SLG subscription fonns or open market confinnations; and, J.' the escrow agreement Final and signed copies of aU the above documents to be sent via overnight mall from closing. An independent CPA firm is defined as a Ucensed CPA finn acting at arms length of the tranSaction on behalf of the bondholders. It may not be the underwriter, bond counsel or financial adviser for the refunding issue. The Bnn must carry errors and omissions insurance. The Insurer reserves the right to review the provider of the verification on a deal by deal basis. C. Receipt by the Insurer at least five business days prior to closing of a draft opinion from Bond Cou.nse1 (or Special Tax Counsel) to the effect that the refunding bonds are being issued in compliance with state law and that the interest on the refunding bonds is tax- exempt. D. Receipt by the Insurer at least five business days prior to closing of a draft opinion from Bond Counsel stating that the refunded bonds have been legaDy defeased. (This condition is only applicable in those situations where the refunding issue is legally dcfcasing tlle refunded issue.) Final executed copies oritems C and D to be sent via overnight mail. E. If the escrow agreement allows for the substitution of securities in the escrow accountJ then it should be provided in the escrow agreement that no such substitution may occur unless there has first been deliven:d to the escrow agent/trustee" 0) .a. Cf 1\ verification that the escrow investments, as substituted, are sufficient to pay debt service, as it becomes due, on the refunded bonds and (2) an opinion of nationally recognized bond counsel to tbe effect that the substitution is pennitted under the documents and the substitution has no adverse effect on the tax-exempt nature of the refunding bonds. See 2 above for the ddinition ofan independent CPA. F. Escrow invesnnents must be limited to: ,1. Cash 2. U.S, Treasury Certificates, Notes and Bonds (including State and Local Government Series - "SLGS"). 3. DireCt obligations of the Treasury which have been stripped by the Treasury itsel(. CATS, nORS and similar securities, ',:';; 1S/09 Ij:lM e9 '98 101 59A1'I BRYANT I'1tLLER OLIVE P. '5/16 NlBIA ~ :J 4. ResoJution Funding Corp. (REFCORP) OnJy the interest component of REF CORP strips which have been stripped by request to the Federal Reserve Bank of New YOlk in book entry form are acceptable. 5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "MAtt by S&P. If however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre- refunded bonds must have been prc.refundcd with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre.refunded municipals to satisfy this condition, 6. Obligations issued by the followmg a.gencles which are backed by the full faith and credit of the U.S.: a. U.S. E)CJlOLt-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. farmers Home AdminislGJion (YmHA) Certificates ofbeneficial ownership c. Federal Financing Bank d. General Services Administratiol} Participation certificates e. V,S. Maritime Administration Guaranteed Title XI financing f. y.S. Department of Housing and Urban Development (HUD) Project Notcs Local Authority Bonds New Communities Debentures. U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds. U.S. government guaranteed public housing notes and bonds G. If a ~ard 5\l9oJX contract is being executed in conjunction with the refunding (or subsequent to the closing of the refunding tronsaction), the fonowing conditions mu.st also be met: ,..J 1 The Insurer mu.st review and approve the fol'\Yard supply contract at least five business days prior to closing (or after closing, at least five business days prior to execution if not contemplated at the time of closing), 2 The forward supply contract must provide by its terUlS that the securities delivered under the forward supply are sufficient (when taken with other funds remaining in the escrow) as to amount and timeliness to retire the refunded bonds. 3 The Insurer requires an opinion from a natibnally recognized bankruptcy counsel that the :securities in escrow and payments to owners of refunded bonds will not constitute assets of the fsc supplier and will not be subject to automatic stay in the event of bankruptcy and/or insolvency of the supplier. q~ ..~ 09 .. - ,-", - JAN 09 ' 96 11 : 0aAf't BRYANT m LLER OL IVe: P.G/16 MBIA ~ i. , ! 4. The supplier of the securities delivered under the forward supply contract must affirm in the contract that it has no rights to or interest in the monies or securities held in the escrow, 1 " , 1 > ' s. The escrow agent must be acceptable to the Insurer. The Insurer reserves the right to replace the escrow agent for cause. 6, See 6 above for investments pennitted under the fonvard supply contract. Investments must be non-caUablc. 7. ' The supplier should have no right to substitute the original escrow securities. The supplier may substitute securities previously delivered by the supplier under the forward supply contract only if: " a. The substituted securities mature on a date that is later than the previously delivered securities would have matured; and b. The substituted securities mature prior to the date nceded to pay principal and/or interest on the bonds. 8. Two days before each delivery date for the forward supply securities, the escrow agent mu5t notifY the Insurer in writing of the securities to be deliv~ tho maturity amount of the securities and the'maturity date., !; , 9. The forward supply contract cannot be amended or modified without the Insurer's written consent. 5/6/93 I, , i j ( I t. ! I, ,:) t ....."..1 ~ 0CJ -09 . . . ~.~ . '. ,. ".' I ~ ~'. . '. h........ .... ~ . ' -"""'IIiIIIIJI ~ ... --" -- JRN 03 · 98 11 : OOAM BRY~NT 111 LLl:R 01.. I VE P.i/1G MBIA '~ YBNERAL ~OCUMENT PROVISIONS I~".q. ~~~;, h.) A. Noti~ to the lnsurer The basic legal documents must provide that any notices required to be given by any party ,hould also be given to the Insurer, Attn: Insured Portfolio Management. B. &nendments. In the basic legal document~ there are usually two methods of amendment. The first, which typically docs not require the consent of the bondholders, is for amendments which will cure ambiguities, correct ronnal defects or add to the security of the financing. Tho .second, in which bondholder consent is a prerequisite, covers the more substantive types ofamcndments. For aU financmgs, the Infurer must be given notice afany amendments that are of the first type and the Insurer's consent must be required for all amendments of the second type. All documents must cohtain a provision which requires copies of any amendments to such documents which are consented to by the Insurer to be sent to Standard & Poor's. c. SuW1t;WenlaI Legal Do~nment. If the basic legal document provides for a supplementel legal document to be issued for reasons other than (1) it refunding to obtain savings; or (2) the issuance of additional bonds pursuant to an additional bonds test~ there must be 11 requirement that the Insurers consent also be obtained prior to tbe,isSUWlce ofany additional bonds and/or execution of such supplemental legal document. D. Event~ of Default and Remedies. All documents nonnaUy contain provisions which define the events of default ud which prescribe the remedies that may be exercised upon the occurrence of an event of default. At a minimum, events of default will be defined as follows: 1. the issuer/obligor f.1jJs to pay principal when due; 2. the issuer/obligor fails to pay interest when due; 3. the issuer/obligor fails to observe any other covenant or condition afthe document and such fiillure continues for 30 days and 4. tile issuer/obligor declares bankruptcy. The Insurer, acting alone, sball have the right to direct all remedies in the event of a default. The Insurer shall be recognized 85 the registered owner of each bond which it insures for the purposes of exercising all rights and privileges available to bondholders, For bonds which it insures~ the Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under the same tenns a! a bondholder in accotdance with applicable provioions of the governing documents. Other than the usual redemption provisions. any acceleration of principal payments must be subject to the Insurer"s prior written consent, E. Ul;fcasance requires the deposit of: 1. Cash 2. U.S. Treasury Certi.ficates~ Notes and Bonds (including State and Local Govenuncnt .....,J Series .... II SLGs") qg- -OC; :':;: j' ~;;.:.'.':.". ',". " '.;: ',;:;'?;';:,:;}. ,//'? .t:{:Y~~~:::"~D;}'.(, ~h\ .,};..~., ;,1'~?':,.. ','. \!:/:;. f,i,'..',}// "'" --- "III!- ~~~........- . - JRN 09 '98 11:01AM BRYANT MILLER OLIVE P.8;16 AlBIA ,~ ~' ' ',"~,~) , 3. Direct obligations of the Treasury which have been stripped by the Treasury itselt: CATS, TIGRS and similar securities 4. Resolution Funding Corp. (REFCORP) Only the interest component of REF CORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. S. Pre-refunded municipul bonds nited "Aaalt by Moody's and IlMAII by S&P. lfhowever, ,the issue is only rated by S&P (i.e , thCte is no Moody's rating), then the pre~refunded bonds must have been pre.refimded with cash, direct U.S. or U,8. guaranteed obligations, or AM rated pre-refunded municipals to satisfy this condition. 6. Obligations issued by the following agencies which are backed by the full faith and credit ofthe U.S.: a. Jl.S, E-xpon-Import Bonk (Eximbank) Direct obligations or fuUy guaranteed certificates ofbentficial ownership b. EWJ'letS Home Aqministration (FmHA) " .' Certificates ofbeneficial ownership c, Eede(31 financing BanJe d. General Services AdJl1injstrat~ Participation certificates e, !.L.S..,Maritime AdpUnistration Guaranteed Title XI financing f. U,S, Degartm~t of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Conununities Debentures - U.S. government guaranteed debentures V,S. Public Housing Notes and Bonds - U,S. govenunent Buanweed public housing note$ and bonds , F. Agents: 1. In transactions where there is an agent/enhancer (other than the Insuter)1 the trustee, tender agent Of any), and paying agent (if any) must be commercial banks with ttust powers, ;..:; , , 2. The remarketing agent must have trust powers if they are responsible for holding moneys or receiving bonds. As an alternative, the documents may provide that if the remnrketing agent is removed, resigns or is unable to petfonn its duties, the trustee must assume the responsibilities of remarketing agent until a substitute acceptable to the Insurer is appointed. ' qtj-09 JAN 09 '98 u:mAN BRWltiT MILLER OLIVE P.9/16 MelA ~ LIST OF PERMIS~JBLE INVES~S FOR '(MgENTURED FUNDS A Direct obligations of the United States of America (including obligations iS5u'ed or held in book~tly fonn on the books of the Department of the Treasury, and CA 15 and TIGRS) or obliga.tions the principal of and interest on which are unconditionally guaranteed by the , United States of America. B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of , the following federal agencies and provided such obligations are backed by the fuU faith and credit of the United States of America (stripped securities are only permitted ather have been stripped by the agency itself): 1. U.S. Expo(t~Impo~D~ (Eximbank) , Direct obligations or fully guaranteed certificates of beneficial ownership 2. f~ers Hgme AdminiS1t8tio~ (FmHA) Certificates ofbencficial ownership 3. Eederal Filtancina Bank .~) ~. ' c ;"\.-: 4. Federal H'l-l}Sine AdmiqjSration Debentur~ (FHA) S. ~end Services Administration Participation certificates , 6. Government Nationall\1ortgagc: Association (GNMA or "Ginnie Maeff) GNMA - guaranteed mortgage-backed bonds GNMA - guaranteed pass-through obligations (not acce.ptable ($IT certain cash-flow sensitive issues.) 7. O,S, Maritime Administration Guaranteed Title XI financing 8. U.S. D6l'artment ofHousing-tnd Urban Development (HOD) Project Notes Local Authority Bonds New Communities Debentures ~ U.S. government guaranteed debentures U.S, Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non.full faith and credit U.S. government agencies (stripped securities arc only permitted if they have been stripped by the agency itself): ~j 1. Federal Home Loan B.ilnk' System Senior debt obligations q~ -09 .~. -><...' l JAM 09 '98 11: 02Ar1 BR't'AtlT 11ILLER OLIVE P. 10/16 MBIA ~ 2. federal Home Loan MOrJgag.e CO('JJOrati9n (FHLMC or "Freddie Mac") Participation Certificates Senior debt obligations 3. Eed~ National ~ortgage Assocjation (FNMA or "Fannie Mac") Mongage.-backed securities and scrlior debt obligations 4. Student Loan MiU:lcetini Association (SLMA or "Sallie Mae") Senior debt obligations S. Resolution Fundin.s-CQrp. (REFCORP) obfigations 6. F8I111 Cr~t System Consolidated systemwide bonds and notes D, Money market funds registered Wlder the Federal Investment Company Act of 19401 whose sIwes are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAA-m; or AA-m and ifratcd by Moody's rated Aaa, Aal or Aa2. !J~i ': ~ :",;...~w E. CertificateS of deposit secured at aU times by collateral described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collatenal must be held by a third party and the bondholders must have a perfected first sec;urity interest in the collateral. F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fiilly insured by FDIC, incruding BI:f and SAIF. G. Investment Agreements, including GIC's, Forward Purchase Agreements and Reserve Fund Put ABreemcnts acceptable to MBIA (Investment Agreemrnt criteria is available upon request). H. Commercial paper rated~ at the time ofpun;hase, "Prime. lit by Moody's and "A~l" or better by S&P. I. Bonds Or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies. J. Federal funds or bankers acceptances with a maximum tenn of one year of any bank which bas an unsecured. uninsured and unguaranteed obligation rating of "Prime - 1" or .. AJlf or better by,Moody's and ., A-I" or n A" or better by S&P. K. Repurchase Agreements for 30 days or less must follow the following criteria. Repurchase Agreements which exCC2d 30 days must be acceptable to MalA (criteria available upon n:quest) :~ 1'1- 0 9 JAN 09 '98 11 : 03HM BRYANT MILLE:R OLIVE P.11/16 .MBIA '~. Repurchase agceements provide for the transfer of securities from a dealer bank or securities. firm (sellerlboJTOwer) to a municipal entity (buyerllender), and the transfer of cash from a municipal entity to the dealer bank or securities fIrm with an agreement that the deafer bank or securities finn will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date. 1. R~Qs must be belween,the municipal entity and a dealer bank or securities linn a. Prirmuy dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard & Poor's COJPoration and Moody's Investor Services. or b, ~ rated "A" or above by Standard &' Poor's Corporation and Moody's Investor Services. 2. 1j1e written repo contract ruU5t includ" the foUawing: 3. Securities which are acceptable far transfer are: (l) Direct U,S. governments, or $,/,) ~"-J'J\-.'; (2) Federal agencies backed by the full faith and credit of the U.S. govenunent (and FNMA & FHLMC) b. The term of the ~po m~ be up to 30 days c. The collateral must be delivered to the municipal entity, trustee (if trustee is not supplying the collateral) or third party acting as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). d, ValuatiQtl ofCoUatC{!l1 (l) The securities must be valued weekly. marked-ta-market at current market price plus accrued interest {a} The value of collateral muSt be equal to 104% of the amount of cash transferred by the municipal entity to the dealer bank or security finn under the repo plus accrued interest. (f the value of securities held as collateral slips below 104% of the value of the cash transferred by municipality, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or FHLMC, then the value ofcoUateral must equa110S%. ~) 3. l&aa1 opinion which must be delivered to the municipal entity: a, Repo meets guidelines under State law for legal investment of public funds. qct -()9 ,', , > I >, ~ \ . . I. .",' ~ :.c .,.:' '~~...}: r .!, , , '" ~ r. . ., . t. ~ .. . ., .' JAN 09 '98 11:03RM BRYRNT'MILLER OLIVE P.12/16 , MBIA ":~)' ->7.. .1} ., i q . ',' 'I ,t':- . ~. ,. ; , .;:. : :f ' t, ; , '\ ' '" i,. ~,'''', F .........; .l. ',' ,I, r ," . '.' I, , ! \ ' "I" . r; . f:':',,' J " ' l".. (", ' i :'", t(:,,: ': . . '. . Additional Notes (i) There is no list of. pennitted investments for non. indentured funds. Your own " credit judgment and the relevant circumstances (e,g., amount of investment and timing ofinvcstment) should dictate what is pennissible. ' (ii) (iii) Any state 'administered pool investment fund in which the issuer is statutorily 'p~ttcd or required to invest will be deemed a pennittcd investment. DSRF inveStments should be valued at fair market value and 'marked to market at '. least once per year. ' DSRF investments may not have maturities extending beyond , 5 years, except for Investment Agreements approved by the Insurer. I:C.' , . , , , , , .... ..... (, ~ " :; C , , .' , , ". r-\ I.,:.. ~~rJ .,.. ~ . ~ . \., I' ~ > t '/.. . ",:' .. ' <,'i- > 0 .; :1 . ' . . .' c1~~ 'W .: .. q'3~()9 '~,.~,~lfj' ......... -~ ...'.:.....~..Cf. ,,' ..+': . ., t ~.' ~ '. ~ .. ......,. I , " , ,,. -- ~II --- - ~ JAN ()9 '~8 1 1: O~AN BRYAtlT /1lLLE:P. I)LI VC P.13/16 WE MIlIA INSURANCE CORPORATION lNSUMNCE roUcy lb: fetlewing in!'ormation has been fumislxd by MBtA tJtsurnno: Collx1Ii1(lon (tlu: IfIMan:(') for use ill Ws omcW S~nent. RderenlX IS In.1de It) ~ _ for aspcdnlen oflhc Inswds pollio)'. . . . ., TIle ~s policy \1IltOnditionally and 11m OOlbl)' ~ the full ;tnd complete payment ItqUiJtd 10 b! made by or Ol1ldlc'll( of the (!&Jet 10 (he ~ Agent or lts 5UXlC:SSQr of an iUTlOOIU ~W1l to (i) the prindpl! of (citl\er i\l the 5t1lOO maturity or by M oovnnccmcl\l of 1N\Wri\y pursuanl to u mand.11ory sioking fund payment) and in!atst on. die Bonds as ~11Xl}'ttIC1[S shall bcxx)tne due but slraU IIIJt be Sf) plid (e<cq>f that in lhe C\'ClU of lJJl)' ac:r;eba1ion tithe due dati: of such principal by n:ason of mandalOIY or optionall~on or acx:clcr.ilion n:sulling from ddiwlt or ~ <<her thaJ.1 any adv.un:ma\t of maturity pursuant to a m3nda1Oly sinking fund JXIYU1I:I1t, the JUYIDet1U ~ by lhc In.surets polley shall be nlC'lde in such am::AU:lSs and nl such ti.rocs a'i web paYUlI:OI:s oC principal would have been due ll.1d tb:re not been any such acx:elesation); aOO. (ii) the ltimbunemc:U of any Sld1 ~ which is ~ n:c:cYmd fn>m aay owner m dlc Boods purstmtt to a 1iD3ljudgmenl by a coun of oom.pctart jurisdic.tion \hat Rrh pI)'1t1aJt~ anavoldable pttIa~to sucbownerwithln the meaning c{any ~Ie lmI.laupcC)' law (a ~''), The Imura's policy dQC:S ncl insuR: against loss of;my prcpa:ymcnt pteml.um which 1m)' al any ~ be payable with ~ to any Bond. The ~ pc1i:y 00es mt, UDrkr :my d.remnst.1noe, i1lsun: against loss relating co: (i) opdomI or moudatoty l~ons (otIt=' lhan manda1tny sinking fiI11dll"k~Wi4ion.s); (1i) any p1)'IDCDtS to be nmde on an ~cran:d basis; (Ill) payrncnt; tithe ~ pia: afDonds upon tmder by 211 0WDCf ~ or (IV) any "dct~ Ida!ing to (i) throuib (w) ~ the Insura's polley aW docs DOl insure apnst DClDpI}1IItt1t af~ or or ~ on tb: J30ads n:su1WIgfrom. the ~I ~ or any o<her act or otnis;ion rl:tbe Paying Afj!:CI. orany otbapayil1a ~ fur tbeBarrls. Upoa ~ of vr~ << rdq;mpbic nOOa; &uch mace ~ coufilmed in Wrilirlg by .rcgisten:d or c;ati.fied man. ur upon m;Cpt tlf WJiut:n ~by ~ or a:rtifi,ed mail. by the Insurttfi'om tboP'aylng AgtDt or any owna' d.a J.3ODd the payment of an insured amoumfor wbi~ is then cIul; that such requiRd p:l)mCUt bas DOt bem muk, the Instmt U'l the due da%e or such IXl)1DOI1 or within QDC bJsi.nt:ss day a1ttr ~ or notice rI. :aJCb ~ ~ is Iatcr, \liJ1 mala: 3 dqmit offi1ods, in an ax:oont wid! Sm1a Stmet Bank aod Trust Company, NA, in New York, New V.. orits~ ~for the ~ m any such insund B.DXJUlUS \\tid1 ~ lbell due. Upon jAe9 nln~ and sum:oder of such Bonds or Pl~tl~ Edler proof of owoet$h!p of the Bonds. together MIh any ~Ul"iate iustmmems cf~ to ~ the ~~ oflbe insu<<d Jl~ ducm ~ Boom i1S arc pUd by the ~ auclappropriate imtrumcw to df.ttt &be appoimmel:ltoftbo lnsurcras ~& such 0VI'l'QS ollbe B<ub in any !eGaI proa:aiing rdat.l:d to ~ ofi.nsum1 amowns O.Q tbe Beals. such ~ beiD& in a form ~ to SWc Slm:t BaDkml Trust ~")', NA, StttC smu Bank aDd Trust ~, NA IibaU di!tmm: to $ld1 awnext or the Paying Agr:m payx:IU1 o!the ~ fIl:DOOpU d&le OD ru;h Boais.les$ aay amouut hcld by the Paying Agtnt for the paymr:m ofw::b insured alOOlJl11S aM t~ 0lV3iJable tbc:R:fbr. . 'Ibc!muh:r is dJe: ~ (lIICl'31iq ~ C1fMBIA Inc.. a New YOlk Stock. &tbangc listm 00ll1p31I)'. MBIA Inc. is uot CIbllgan:d to pay (be d::bts ofocdaims ~ rhc lnsun:r. Th: Insurer is doJniclkd in the saw: of New YOlk and~ to do ~ in lUXl ~ (1) IqJIIarion undct \be 1aMci'~ 50 ~ the Diliuic:td.0:l1umbia, the ~ oClJucrto Rico,Ibc C'omIoonwcalth oftbe NonbemMariaoa Is1aDds, the Vugin 1dands ~rbe UnlIr:d St1tc:s and 1bc Ten:irmy ~Guam. 'Ik ~ IDs two Ewopetm bmzEbcs, om in the Rqdllic mFnmce lUId Ute olber in fh: Kingdom m Spain. New York has laws ~ miuimum capi1aJ rc:quiremetJts.1imirmg da9sl:s ud ~o: of'iIMsl:mcnrs and R:qUiriDg the approval of , "'~ rIIa IDIi fimns. StIle laws also regu1a!e We ilInOWlt ofbotb tb: aggn:ga1caro individual rUks tMt maybe insured. the paymcntofdividea1lk by che .bsuier, changes iD oomrol aDd b)~ amcog ~ffi1~ AddiWnaIly. lbc Iiwru in RQUirc:d to mainr2in ~ resems 011 iCs JiabiIitie:s in a:rt.JiA;Cmoums andfora:rtain periOOsolliu1e. On ~ 14, 1997, MBIA Inc. a:nmuncrd the sigzili1g of a ddioithe ~ to lDCl8C with CapMAC Ho1d.ings Ioc::. C'0Jt'J. !be pam1l ~d.0Jpi!31 MaIRrs ~ Ol)AU~n ("CapMAC'), in a stock-tOMtoCk uansaction valutd al S607 millioo. 1he ~ll'1If also r;Wtd thatUlWt'fttyfiQgpoljdisilaJtdbyCapMACwill be t<<iclby the full fin.'IIJcial rcscmt:l:SofMBIA Ior:., and that~ ~ is subja:t to retiuWorY appw.oaIs BOi appIQVrA by au sbatclIo1ckrs. . Asof1Jco:mbez" J!, 1996 tbe 1.nsutcr had admirted ~ ofS4.4 biDiQn (~ toCBI ~ ofSJ.O billion (audited), and total arpirnl and ~ ff 51.4 bi1J1on (au4i1ed) dctcrroina1 in ~ wilh $t3.IUlDty ~ prn.:ticrs prescribed or pc:nniUtd by inswana: E'CgIJJa.tory BlI1bxiril:s. As or Sql(r.mbcr30. 1991, tbc Imurer had Admi1:ud u;dS c:I$5.1 billiro <IIMIIrlIrPQ), tr.CIIllblbili.lies or 53.4 biWcm (tm:u~, and tDC3l capitl1 am SUJplus of Sl.7bil1ioa(t~diW)~in~wilhstatutmy~pra;tioe.sJlfC5Qibcdorpe:miLtcdbyinsuraDce~ au1borities. ~ cqJfcsdca, lnstua'1 year em ~J ~ ~ iD~ with ~ ac:carnting paWa:s an: available witmu1 cbatgc from tile 111suRr.. A CI:IJIY of the ADIIualltqlon CD Farm 10-K of MBIA me. is IlV3i1ab3e !rom 1M lnMcr or the Sc:auitics aDd ~ Con'laDssion The~ ofthc Imwtr is 113 King Slto:t. Annoa1c. New York 10504, The trJc:pb:me D11DJbc% fJftbc lmun:r is (914) 273-4545. Moody., IsM$U)rs ~ Inc. rates the c:I:Wm p.1)ing:mility d'tbc Jnsun:r"/UIa". StmcSard &Poot$RmiD&& ~ a ~ ot1'bc ~-Hill Companio:$.lnc., ~ the daims JXlYingability oCtbe I.mtucr WI MA". Fitl:h JBCA.lD:. (fotmedy la:om1 as F'm:b lJM:stoB 5elvio:, LP,) ~ the daims &DYiDg ability aftbe ltt!un:r"AAA", P..ac:h I&ti.ng m the In$urcr sbCJuld be evaluam~. The' mtings a:Bc:a the ~ zaliDg agc:a;y's cum:m ~ of the ~ rltbt ~lUId i1s Jibi1ity to pay claims CIG itS poUcic:s of.insur.mo:. Arrj furtb:r ccplamlion as to the 6igrIi~ oflhe ebovc ratings maybed:itAlDCd onJyfitm Em ~ A!iP8 8fJ:OCY. 1bc abM; radD(;s an: not ~ \0 buy, sell or bold the Boods, l1Dd ilXh rnfiDgs may,be Sltljcct to ~ or~ a1 any time by JhcI'i1%iDi~ &rt~ ~ (1f~ many atlbe abal'C r.zziat:; ~ h:rve lln advcm:db:t on the tDarla:tpricc tflbcBo&xk The Imu:cr dOtS m gn.1DdY 1bc nwket price of'tll: Barm nor does it ~ tba.t a= ratings (Xl the BoWs will tII:It be R:Yised orwitldrawo. The ~pnMdedbythis Polictk mtaMrOdby lbcFklrida~Gnramy ~malr:d uodercbapter631, Aorirh.Statub:s. FL ..".,.~) 115 -tJ9 ~ ~J ........--....--..... Jj:lH 09 '98 11 :O'SH/1 BRYRNT I'lILLER OLIVe: P. 14/16 :~ MEliA FINANCIAL GUARANTY INSURANCE POLICY MBIA Insurance Corporation Armonk,' New York 10504 PoUcy No, [NUMBER] MBIA Insurance CoIpcntion (die: "lnsllrer'), in <:Ol\~idcr.uion of the paymcttl of the premium aa.d subjec;t to 1hc: tcnnS of Ibis poUCYt hmby ~ and iI:Rvo=bly JUmatees to any owner, as herefna.ftcr defined. oflhc followine desaibccl obUptioos, tho fiill and complete payment RI{U.ired to ~ made by C1r0tl bdWf of1bc Issuer to [tNSER.TNAME OF PA YlNG AGENTj Q' its ~ (the: ~ ~1 oran amouat equal to (i) the pmcipa1 m(eiIher lit the 5lZlled ~ or by any edvancanmt ofmalWity pnulInt to . mm~ sinking fimrJ pl)mem) trnd iIltI:n:st oa, !be ()hI~ (as Ibat!am Is defined below) as such paymcats shaU bocome due but shall DIX be so pI1d (c:xccpt dill in the eVCDt of any ZlCCdaaricIil of~ dac &lc of S\lCb piDcipal by rtamll oflJ1lmdstocy or opcional rakmpdon tt II&XlCkmrioa rcsuhfng fitm dcf'.auh ot otbawise, dba- dJm ;my Idvm1o:menr ofmarurity JUSUlII2l to. maudaray sinking ftmd ~ the pa)'111COU gtISlMlrccd bcftby sball be made in such mnoums sad It m:h Iimr.s as IUtb pe:ymc:atS ofpridcipal wouldhavc boca due luld Ibtzc not been any IJd1 occebatioQ); aad. (it) me ~ ofarrj such paymrnt ~ is ~ recove:red fiom ID.Y ownet pnuMt to a finaljudgmtzU by a toult of ~odbA jw.~ tbBt sua. piI)'IDent (Q]Jtib~ III ~ l.t~ to such gwmr wti11bc: memiDg of:my Ilpp1icablc bmkzuptcy law. The ImWDb n:ftmd to in cIm1sa (i) aid (ii) of Ibc . ~ sc:ntencc rmn be refcrrc:d toJxmD coDedivdy iL1 ~"In9.ftd AmOUl1ts." "Ob~" sballmerm: (PAR} (LEGALNAME OFlSStJE] ~ Up;arca:iptoftdcp1oo1corrdcglapblc:~ sutbnatkc~c:oofinncdio writiDg by~orccnificdmaif,aupgn ~of\WiUm DOtice by .~-..clort:afifkdm&iJ. by the: 1nsur<< fi1xn the Payiag Aamt U"myowmrotlD ObUgcfca 1ho p;I)'mlmofm Insured.AJawnt fir which is 1bta u,1l1a1Mo"Cb RqIIirW pamcutbils DOlbcqamade, tbr: llIRmal tbI: due _oflUCh plI)'IDCDU" wiaJi1 one busincm day IfIrrrt.oeipt ofDQtfce offldl~ ~is falo', \riU nJIke a~ of~ iuQ~ with St&tcSlmtI3lnkIDl TMtCompmy. NA. in New Yodc. New YOlk, or its Il~. ~dJieimt b'lIx pll)'DV:Dt vf lID)' 5Utb Iu.Red AmlMds wbir;h IR' dm tb:. Ufm ~1l:.....m aDd. sum:ndtr of:ub ~ or t-del~ll otlUCh ctb:rpoororO'MJCnhip of1bc ObJiptioas. ~wi!b ID)' .....oprtate ~ of&Sligmnent ~ tMdmcc 1= ~e14 of1b:: lmumlAmouDts due 111 the Ob1lgaSiom IS;R paid by tbc Jmm:rr.1Dd ~~ imInInc:mJ 10 dftcrbl tlppOiDlmmt orb: lDsurcras Ir6'CDtfirmc:h UMJa:! ora., ObIlptkm in BlIj' Icg;d por-nucgtdatcd to paymmtofJDsumlAmcums m the ()h1~:sudl ~ baDe In. fOrm ~~IO Sr*ShctBdeod TlUStCompmy. ~ Sra:eSbeetBankIlld Trus.tCompany. NA sbaD d1sbm:cto sudtownea. ,...."'\d:tc ~ Agmt ~ oflbc Imurcd AmouiJEs due oa .such ~ I=; IIIij' IlllMU bdd by dw p,yiag AtJ:at for Ibc pI}'ml'Jlt of such ",,:~.baI:Amouats aDdkpUy JMWablc rf1cn:ttr. This polley does not insure egairut Io5:s ofmypqmyrnau.paufum wbkbmay IE mytfme be payable wi!b~mFlrlOb5gmica. AS ~ hercia.1bc tenD "ownct' sb31l mean Ibt ~ owner of tInY. Obli&atioo as ~ in Ibc: bId;s MJ~d~ by me Paying ~ the hmcr. or any designee of'tbt: bsua for such purpose. 1he ttJ1D owner sImll DOt ~dc the lsMr tIC' lID)' puy whose Ijp~ wid11bc hmer um1Itm:es me UDdi:d}iJg secudty forme Oblrg,rivts , Any s:c:nicc oCprexcs en 1be Insurer may be made to Ihc In.surc:r at its offices Ioar:cd at 113 King SIrccf, Armook. New Yod;: lOS04 und 9.dl!l::r'Yke cfproa:u WlI be vaIic! Ind bioding. . This pOJicy is bOU~oelW71e h rlnj ~n. The prtmium on this poUcy is not refiDlcbbIe fIK any IU\lQI1 inctuWng tb1: p;syau:tlt pier to DUillIris:y of ttwObI~o:. The iD:sunmce povXkd by ibis policy is not covc:c.1 by the FJorid.1lmur.mcc GWIrBl11y ~cn aarrd under chapter631, floridaSta1utcs. IN WITNESS WHEREOF.1hc Insurer has caustd this polley to be cxc:cutcd in factimi1e en its bcha1Cby its duly DIJtborizld offia::rr.. this (DAY) day or {M0NTfJ, YEAR}, COVNTERSJGNED: :MBIA Insurance Corporation Residtm lJl:mso;I. Agent ~I2CI. City, Slate A5siswu Sc:cn:azy Attest S"I'D-RCS..fL.6 ~~ Q8'-01 JAN 09 '98 11:0SAM BRYANT f'lILLER OLIVE P. 15d& STATEMENT OF INSURANCE ",.~ MBlA Insurance Corporation (the "insurer") hIlS issued a policy containing the following provisions, such policy beini, on flIe at ONS,ERT NAME OF IRUSTEE OR PAYING AGENT. INCLUDlNG CITY. STAUl. The Insurer. in consideration of the payment of the premium and 5Ubject to the tenns of this policy. hereby unconditionally and irrevocably guarantees to any owner. as hereinafter dcfllled, of the folll)wmg described obligations, the fWl and eomplete payment required to be made by or on behalf of the Issuer to (INSERT NA.ME OF rn.USTEE OR fA YlNG AGENT} or its successor (the "Paying Agent") of an amount equal to (i) the. principlJ of (either at the stated maturity or by any .dviUl~mt of maturity pursuant to a mand.atcry slnking fund payment) ~d interest o~ the Obligmons (as thai tem1ls defined below) as such payments shall ~me due but shall net be SO paid (except illlt in tht e.vent of eny attelr:nztion of the due date of such prineipal by reason of mandmoly or optional redemption or acceleration resulting fItJm default or crtberwise. other than any advancement of maturiL)' plInUlmt to a IJUID.datwy siDIdng fund payment, the payments guaranteed hereby shall be made in such amounts and a! such times IS such payments of principal would have been due bad then: not betn any sucb acceleration); and (ii) the n:imburr;ement of aD)' such payment which is subsequently m;overcd ftoIn any owner purswmt to a finaJ judgment by. court of COD'lpetent jurisdiction that such payment constitutes an avoidable pd'mnce to such owner withia Ihe meming of any appUcable bRlkntptcy law. The amountS referred to in clauses (I) and (ii) of tho pROCding sentl:DCe sJ1aU be reftrrtd U? herein collectively as the "[nsured Amounts," "ObUgatlons" shall mean: pNSR'I I.EGAL 1TIl..E OF BONDS. CENIERED AS FOLLQyIS~] ~ PAR AMOUNIJ nSSUERJ IDESCltJUION OF BOND!ij " ') Upoa receipt of tekphouic or telegraphic notice, such notice subsequently confirmed in writing by n:gistued or catified mail, or upon receipt of written notice by Rgbtetcd or cmified mail, by the lDswu from the Pay~ Aim or any owner of lID ObUption tho pl)'DZent or au ln$ured Amount for which is thm due. thzt such required paymCDt bas Dot been made, lhe IoJurcr on the due date of such payment or within onc busineu day after receipt of notice of lucb nonpayment. whichever' is later, wid make a dept>>it of fund$, in an account wIth State SII=I Bank and Trust Company, N.A., in New Y01'k. New York. or its SlKtessof, auftlclcnt for the payment of euy web Iwuwi AtDO\LDt$ wb.it:h are then due. Upon presentme:Dt and SUR'CIldet of such ObUgations or prcscnlmcut oCsuch other proof of owm:nhip of the ObUptions. together 'with Illy ~uc: instntmentI of wlgoment to r:vJdCllCC the uslgmnent ofthr: Insured Amounb due on the ObUgations as In paid by the Imum', .00 'waO'J,l,:are instrumentS to df'ccc the appoinbnellt ofthc Insurer as qent for such owners of the Obligl.tioDl in any lepl prac:eed1Dg rcJatcd to payment of Iil.surcd Amounts CD the Obligations. such iDstnIments pdDg in II. fonD. utte4'lIl'fOS)' to StItc Street Baak and Trust Company, N.A., State Street Bank and Trust Company, NA shall dis1nu1c to such 0'W'J1eB or the Paying Agcm payment of the Ia5ulcd Amounts duo on such Obligations, less any Bmount held by the Paying Ageat for the payment of sueh Insured Amounts and leg&11y available therefor. This poUey doeJ not insure against Iou of aD)' prepayment premium which !Day at any time be payable with IUpect to illY Ob1ig1tioD. As used hereiD, the tam "owner" shaH mean the rcglstc:cd owner of any ObUptiou as indiea1c<l in the books maintained by the Paylog Agalt, me Issuer, or any dc$jgDee oftbo lssuer for such purpose. The n:nn owucr sbBll not include . the Issuer or 1m)' party whose ~ent with the Issuer consWutes the underlying security for tho ObUgaticmJ. -... .... ~ _ _ -. .. _ -.zo . &2y service of process on the I.I1sura' may bo mado to the Insurer at its offices located at 113 King Street. Armonk, New York 10504 md such scnke of proms shall be valid and binding. This polley is non.canccllablc for any reason, The pmnium on this polley is not refimdablc for my n:uon mcluding rim payment prior fa I11l1t1Jtdy orEbe ObUgatiom. 'Ibo insurance provided by this Poticy is Dot covered by the Florida Insurmcc Guaranty A5s0ciation C;fClted under chIptcr 631, Florida StanmI. MDIA Insurance Corporation STD-ltRFL-1 ...) q5 -09 '. " . .'. , .. ., ,. y:~.,~~:,lt~:: ,,/ ~~ : ~\..,;~~;;~~~ C<1.:: ~~ ~:~'? .~'.,~~ ___: .l~ .~.' " , ,~ ." ~', : ~.",'~.i;J :','1 ~ . ~; ,~~ ;',- '!: ' \ :.... -~ ~ , ' ,', \ , , [ . ::'~ !:' , ., ." :r ': :;1,' ,-'.'. ; ~.~. . .~~;: > '. ~... ....:. f'~ ~'" ,; f~~\,;, ):~ :,~~: ,:..:. ~ r~:': :~~: ,. c \,(0 . ~. . ;r;.:YC . I .;-".. .~,". J,: 0 .\\ : 1.::, ,l 1. ~.,~ " I' (.. L..... 1:, ~; .'. , . ," ; ,'.:' , , , ,:::) r' 'I, .; !; !t.: .\ '. . r.i' .~' EXHIBIT E MDITIONAL PROVISIONS: REQUIRED BY,HUNICIPAL BOND INSURANCE ,,' ,.' .I'C " ,. .! ," " 't, q~-o9 ..~.::..>. .....~'~'.r.N\,iijo.t:t:~,;i-.,,~P.~>+~~. :.1...... --. , " "~;.~)// :5~ ;,~. "':;j"'!""~:' . ~ '" .', ., ~ _. . .1.. c 'I.,+- .' .,.<,.' ,.."....... ....,.. :. t . ~ .,' -.-....-- ~ ~ u:..~ ~.II7~ -,-..... ..... ____ V-~ JAr~ 09 '98 1l:05A1'1 BRYANT JlILLER OLIVE P.16' 16 PAY?vfENTS UNDER TI-IEPOLlCY A. In the CVtt\l tlw. on the Sl:(:Ond Business Day. and ~ on the Business Day, prior to the p.l)11len[ dati:: on the Obligations, the Paying I ~ has nol m::civt.d sufficient mo~ 10 pa)' all principal of and interest on the ObUgalioll$ du: on Ihe 9:C()M fullowing or full~ llS die case In..J oc. Business Day, tho Po1ying Agent $h3ll immcdiatl:ly nOlllY Ihe Insurer or lis designc:c on !he same: BusInc:s:s OiIJ by telephone or lclegraph. CJ)nfumt:d in writing by ~ orttrtified mail, of the amount of the deficiency. B. Iflheddideney is madcup in whole cr in part prior to ~ran lhepaymcru dale. thePa.yinc A;entshall sonctify lhe lmurerot' its designee, C. In additica, iftbe PDyiog AgeGt has notice that 3D)' Bondholder has teen ~ to dis&Drgc ~ or ~ or inLaesl Oft the ~iptm to . austee in BanknJplcy ~ cmiitmi Of dbcIs p.usuant to a final jtwtgJmm by a coort of cc~ jurisdiaion th3t ~ pa:ymc:;u a..miq1lO an avoidable ~ Co RdI. ~within the. m:aning of any ~ bmbvplq l:mR.lhl:D 1he}Jayiog AgeD1 stWl DOtifY the J.n.uuw bckSgnee dad! fact by ltJcpboDc or rclegmpbicnoOc.c. oonfirmcd in writing by regismd or ca1i6ed wail D. 'Ik PayirIg AfPJ1 is bercbt 1aevocably ~~ ~ dInx:tcd and :wIluizr:d to oa 83 ~ fix ~ ~ the ~ltSfoUows: l IfaDd to rM~1here isa~ iDamotlDIs nquircd (D PJY ~CI1lbc W~ !he P>>JinB Agr:ush1D (8) ~ aod ddMr 10 &ate &nit Bmk am Thtst Oxnpmy. NA. or its !I:I.~ mD:r cb:: Poliey (tbo ~iI:',..o\k~ ~ AIPJt'). b1 bm ~l)chcfm1~ P.1,yiDg ItpI. mziDmummt [Ippoil1tiog 1beImurer 8& ~formchHoldem in IllY Jq,l ~l11g IdIb:d to 1hc~<:fS&d1 iDlz:n:itmd BD ~mrn:.tD Cbc 1'osu1u aCtbeclai1m 1br imz:mst to wbi:h Iitd1 ~ rd=es IDll 'I\ti:h axe pM by the loImer. (b) RD:itoe lIS ~ dlba ~ Hokbs (aod wt &5 PayiDg At/:tJf) m ~ 'WiSh ~ ~ dtbe PoJJc;y paymcolfimn the Jf\1WD:le Payio,s Agt1J1 ~ mp:a to th: daims for interest so ~ md (q c!bbuuc tb! ~ to Sldll'C!i{lCtthoe ~aM 2. Itaod 10 d1e Q1.CDt d'a~ in GJ:DmIDlS p:quf.rM kJ IllY piDcipJJ m1be CbZ~ tbc PIJ'iD& Atf.rI. 8baIl (8) ecr.alIc aud delhUtD ~ JI~...~~Pa,illgAt;.uiD1im1~ CO ~ 1m1~1n:~ ^=1DiD5rl:u.mtd~1beIl1U'tr.IIFJt& IU:h Hjder ill m11 Jqa1 ~"I JdaliDg. to III: piI)'1DCIll f:I su:h pdo:ip1l amlllll ~ 10 tbe Ioflma' rl8D.1 lithe O11l.pt1oa Juq~ 10 Ibc lna~ h:1iDtaptrlm nu:t1fllhe pio::ipa1 aaum tb::ndas w DOt Jll'CYkxdyb:r:D pai4 or fbrlrbich J'UODe)'I amDOtIdd~fbe PIgtiDg AtpIJ.8td~b'm::h p3}'IDCD1(butso:bassivmIW dmIlbeddivmd oo!y ifp.flD:lltfi'oal the J..... "'''~ P.I,)izJ& Ar1=1s ~ (b) ftlCCMUS ~ctCbc ~ HcldeR (a.cd IBIS ~ AgtIlQ in-..a..iu..4 'CYid1 tb: fJ:Dx'clme PoUcypl,)'JDlXlldaerdbrfmm tm:l~ Pzying Ap. aad (c) dbtun;e!be AmCtD L'UI:i1Ho1dtn. ., ")2. PaymcQa.lridL teSpI:t to daiIm; fOr irc:m.It OIl ex! pM:ipaJ ot'Qii8;1tiom ~ by 1be PaJWg AFn frora. ~ cltb: PW;y a...:-'aat be ~of k:I dls:ba%F (be obUgarioa oftb: 1Auet with retpo::t to m:h ~ mI BIe lImm:r sfmU bCI:ot;De tbc CJMD' ci stdJ mIPdd Ctilt,atioo. am. dalms for the iarma in aoo..,.u.~ with tbc lraJr c:Ltbc ~ ome fD it. UDl:kr tho pmriIiu dthb ->> ~ or ~ P. ln~of'wbeCberanyQdl~ isc:m::ntrrl ond ck:llvatd. tbels3uerandtbcPayjng AIP4~apcfilrtbebenc&oftbc Insurcrtbat 1. 'Ib:!y .~ chat to the exrtal1bc Jmmr JD3la=s pl1)'DItDlS. clinatr cst im:tiro:dy (u by fE1iDg 1hR1ush Ib:l P<<ying AfpJf). OIl IaXlUDt ~~ otoc intI:mt on !be ~ the!DsJrer v.i11 be ~ to IlK: rights c& QZCh 1ilJdln., rweive Ihe 8DICUIlt cf ad1 pdDcipa1 ami imI:m.t fiom. tbc bI:r. 'With iDtr;rest lbereoD as pnMdaf ard sokIyWm lbc wtmX'IJ QI:(Qf in tms ~ atJd dJe Obli~ 11DI1 . _ , . 2. .Tbcywill~pIY.,tbeIrlrma'tbr:annmtof5uchpriq::ipal:adim=!l(indtJdj~pi~lmdu.caRCXM:n:dmdcr It~ (U)cI"lbefiJlt~ m1bc~, v.tidlpriDcipa1aad.~sba3l b:deamd_cblcdIUDbawbeeupdd). wUh iDSacst tberaca as puykbl in dd:s Jixkml:rc.. tho Q1i1gaUoo. Wt ooJy !itm III:; rDI1ta aDd ill Ihc I1IlI:DJXf' provkkd htmn iT the piI)'DlCDt or~ d:auJ ~ ClG ~ t'I1I~ to HD!dl:n:. am will ~ txeIl tbe I1m=' as ibis 0Vt'DCt mRXh lips to Ibc ll1DOUI% ctax:hpi~ mxlirrt=st G. ID.tnIt~1rilhdlo~~d.ttIftlitv-1 ~ (be ls3uer1ibaU ddim'to 11m lmurcraaJP1cf1be~17'C rb..~ ifaJJy, d1wlw:l wilhlC'SpOlllO 9JCh:tM"1fiM:I1 ~ . K ~cl.aD1 tD'nI~lJZIdctD die mn_ ~1Wd i.Q, COIll'ICd1l:G mtb Ibcis:iualxlo cflbcftilp'lt- mlich am CC)t,VI~ 10 by tm~dJa11 bca'Jt1O SIaod.ml&:Po:c'I a..~.dioo. L 1bc 1nsuRr.m1l m:ciw DCtloer:l.dlCmipionorRUXMl calbc ~ ApJl m:Illhcwill'tmPlr#d.a a.~tbcmo. J. 1b: InuYr dIaD RICdYc~ dall agtiQcs =Pro1 to be delMRd. to ~ aDd, OI1l!lamml~ ~cflhe J&t.ut.n1lDfib:xl 1imr:r:iaJ ~adAmmlJ3udF. ~ 1m:! IDia: tbat is ItlqUimt 10 be pym to a bolder ci tho 0bIigalim a' ~ Ihc PdyiIJB Ar;:a. p.Y~ fa Ibe Imcml.Re &haD. also be r 'i:Ied 10 lbe lmun:r. AU DCIdc:rlJ raquind to be: Biwa 10 the I.aswcr uzdcr me ~ dJ.IU br: in writing IUd shall be am by I~g:f or ",,'(.&dmaU~IOMB1'AInsus:anoeo:.~ 113l<1ngStrecc.Anoook,NewYock 10504 ~; SUrvd1bnoe. 1? - c)9 .,'.,: " , . ~ ...;.~ .." ...... .. 'i'.'~~,0;~~tc,\.. .... '.' ;, '. ,".' ~)'":""I"'''''''''' '..,." .. ""..,,,,.,,.t:~XI'. "-",, CJ'"~' "'.,' .(J.'I.,'I',Iii.:;""."" ","(' I~' 'J"" ".".";' ~:.~;{ii;'::i.;;:::;{;%\\~:~'~{:;:i,i',;'i\/'i:;X ;'~,~:':?};;, 'j ~;{'X;;'::Mi,,;) t?i;iJ;~,ii?,;;;,:\i.,:;;);:;,;~t'ti;.::;iO'i'; , ,- .. '.. : ~ ~ ' " . ~. ), 'I..' <.l~~'~~ - - '111 ""iPr1llL - ~----....- .' ~ EXHIBIT P AHBAC ASSORANCE STANDARD PACKAGE DEFINITIONS The following definitions shall be added to the Bond Ordinance applicable to the Series 1998 Bonds. UAmbac Assurance" shall mean Ambac Assurance corporation, a wisconsin domiciled stock insurance company. "Surety Bond" shall mean the surety bond issued by Ambac Assurance guaranteeing certain payments into the Debt Service Reserve Fund with respect to the Bonds as provided therein and subject to the limitations set forth therein. AMBAC CONSENT LANGUAGE Ambac required that the Financing Document contain the following consent, language: ' The Bond Ordinance is hereby supplemented to incorporate the following provisions applicable to the Series 1998 Bonds. A. Consent of Ambaa Assurance. ."~) ,..1 Any provision of the Bond Ordinance expressly recognizing or granting rights in or to Ambac Assurance may not be amended in any manner which affects the rights of Ambac Assurance hereunder without the prior written consent of Ambac Assurance. B. Consent of Ambac Assurance in Addition to Bondholder Consent~ , Unless otherwise provided in this Section, Ambac Assurance's consent shall be required in addition to Bondholder consent, when required, for the following purposes: (i) execution and delivery of. any supplemental Bond ordinance; (ii) removal of the Paying Agent or selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires Bondholder consent. INFORMATION TO BE GIVEN TO AMBAC ASSURANCE The following notice provisions are hereby incorporated into the Bond Ordinance relating to the Series 1998 Bonds. A. While the Surety Bond is in effect, the Issuer shall furnish to Ambac Assurance: () (a) as soon as practicable after the filing thereof, a copy of any financial statement of the issuer and a copy of any audit < q?{-Oq v V" 1M ~ .--.-----.... ~ (b) owners pursuant security a copy of any notice to be given to the registered of the Series 1998 Bonds and any certificate rendered to the Bond Ordinance or this Resolution relating to the for the Series 1998 Bonds; and . (c) such additional information it may reasonably request. B. The Issuer will permit Ambac Assurance to discuss the affairs, finances and accounts of the Issuer or any information Ambac Assurance may reasonable request regarding the security for the Series'1998 Bonds with appropriate officers of the Issuer. The Issuer will permit Ambac Assurance to have access to and to make copies of all books and records relating to the series 1998 Bonds at any reasonable time. C. Notwithstanding any other provision of the Bond Ordinance, the Issuer shall immediately notify Ambac Assurance if at any time there are insufficient moneys to make any payments of principal and interest as required and immediately upon the occurrence of (i) any event of default hereunder or (ii) any payment default under any related security agreement. :':) D. To the extent that the Issuer has entered into a continuing disclosure agreement with respect to the Series 1998 Bonds, Ambac Assurance shall be included as party to be notified. PAYMENT PROCEDURE PURSUANT TO THE SURETY BOND As long as the Surety Bond shall be in full force and effect, the Issuer and Paying Agent agree to comply with the following provisions: \J A. In the event and to the extent that moneys on deposit in the Sinking Fund, plus all amounts on deposit in and credited to the Account allowable to the Series 1998 Bonds in excess of the amount of the Surety Bond, are insufficient to pay the amount of principal and interest coming due, then upon the later of: (i) one (1) day after receipt by the General Counsel of Ambac of a demand for payment in the form attached to the Surety Bond as Attachment 1 (the "Demand for paymentn), duly executed by the Paying Agent certifying that payment due under the Bond Ordinance has not been made to the Paying Agent; or (ii) the payment date of the Obligations as specified in the Demand for Payment presented by the Paying Agent to the General counsel of Ambac, Ambac will make a deposit of funds in an account with the paying Agent or its successor, in New York~ New York, sufficient for the payment to the Paying Agent, of amounts which are then due to the Paying Agent under the Bond Ordinance (as specified in the Demand for Payment) up to but not in excess of the surety Bond Coverage, as defined in the surety Bond; provided, however, that in the event that the amount on deposit in, or credited to, the Reserve Account allowable to the Series 1998 Bonds, in addition to the q~-Oq ~-......... -... - .......... , ,< C 'j ~. ;,,'..:.~, . .. ~ amount available under the surety Dond, includes amounts available under a letter of credit, insurance policy, surety bond or other such .funding instrument (the' "Additional Funding InstrumentU), draws on the Surety Bond and the Additional Funding Instrument shall be made on a pro rata' basis to fund the insufficiency. B. The Paying Agent shall, after submitting to Ambac Assurance the Demnnd for Payment as provided in (a) above, make available to Ambac Assurance all records relating to the Funds and Accounts maintained under the Bond Ordinance. ,': c. from the PaYment, Bonds to The Paying Agent shall, upon receipt of moneys received draw on the Surety Bond, as specified in the Demand for credit the Reserve Account allowable to the Series 1998 the extent of moneys received pursuant to such ,Demand. " D. The Reserve Account allowable to the Series 1998 Bonds shali be replenished in the following priority: (i) principal and interest on the Surety Bond shall be paid from first available Revenues; (ii) after all such amounts are paid in full, amounts necessary to fund the Reserve Account allowable to the Series '1998 Bonds shall be deposited from next available Revenues. (-I' l :'c : ..cl:) r ' , C '". c~l~ .. , '.! . '" ~ . '. ; < ( " j , , , ~:;, Cl'B'-09 . ~ '..."<. r _ " , ~ ~. _... , J .....\-1, p.--.' . . 0 ",'" I"!'",,"'''' ~......_ ~ c. . c . IV.... .. ... c.". J > \~ . ; . . t". 'c ~ , ,