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RESOLUTION NO. 98-54
A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO
EXCEED $49,000,000 CITY OF CLEARWATER, FLORIDA, WATER AND
SEWER REFUNDING REVENUE BONDS, SERIES 1998~ AWARDING THE,
SALE THEREOF TO WILLIAM R. HOUGH & CO. ON BEHALF OF ITSELF
AND THE CO-MANAGERS SELECTED BY THE CITY, SUBJECT TO THE
TERMS AND CONDITIONS OF A PURCHASE CONTRACT; PROVIDING
FOR THE ISSUANCE OF THE SERIES 1998 BONDS IN BOOK~ENTRY-
ONLY FORM; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY
OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT IN CONNEC-
TION WITH THE DELIVERY OF THE BONDS; 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; PROVIDING CERTAIN OTHER MATTERS IN
CONNECTION WITH THE ISSUANCE AND DELIVERY OF SUCH BONDS;
AND PROVIDING AN EFFECTIVE DArE.
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WHEREAS, on August 2, 1984, the City Commission of the City 0 f Clearwater, Florida
(the "City" or the "Issuer") enacted Ordinance No. 3674-84 (the "Original Ordinance") to provide
for the issuance of bonds payable from Net Revenues ofthe Water and Sewer System (as defined
therein); and
WHEREAS, on November 5, 1998, the City enacted Ordinance No. 6311~98 (the H1998
Bond Ordinance") which authorized the issuance of not to exceed, $49,000,000 City of
Clearwater, Florida, Water and Sewer Refunding Revenue Bonds, Series 1998 (the "Series 1998
BondsH), as Additional Bonds under the Original Ordinance to refund the outstanding principal
amount orthe City's Water and Sewer Revenue Bonds, Series 1988 (the Refunded Bonds"); and
WHEREAS, it is in the best interest of the City to provide for the negotiated sale of not to
exceed $49,000,000 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 the co-managers selected by
the City (collectively, the "Unden.vriters") subject to the tcnllS and conditions contained herein
and set forth in a Purchase Contract, a copy of which is attached hereto as Exhibit lIN' (the
lIPurchase Contrace') 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
thercofby the City Manager and City Financial Services Administrator; and
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WHEREAS, the Issuer now desires to approve the issuance of its Series 1998 Bonds, to
sell its Scries 1998 Bonds pursuant to thc. Purchase Contract, to authorize the distribution of a
Preliminary Official Statement and an Official Statement in connection with the issuance of the
Series 1998 Bonds and to take certain other actions in conncction with the issuance and sale of
the Series 1998 Bonds; and
WHEREAS, the Issuer will be provided all applicable disclosure infonnation by the
Undenvriters as required by Scction 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 constitutc a supplemental resolution under thc tenns of
the Bond Ordinance, and aU capitalized undefincd tcrrns used herein shaU have the meanings set
forth in the Bond Ordinance;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF CLEARWATER, FLORIDA:
(7~)
SECTION 1. The not to exceed $49,000,000 orthe Water and Sewer Refunding Revenue
Bonds, Series 1998 authorized by the Bond Ordinance being offered pursuant to this resolution
are hereby collectively designated as Series 1998 Bonds (the IISeries 1998 Bonds"). The
issuance of not to exceed $49,000,000 of the Series 19~8 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
Blanket Letter of Representations between the City and Depository Trust Company as previously
executed and delivered, the terms and provision's of the Blanket Letter of Representations shall
prevail.
SECTION 3. (a) Due to the willingness of the Undenvriters to purchase not to exceed
$49,000,000 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 conditions contained in the
Purchase Contract and herein is hereby authorized and approved, subject to the satisfaction of the
conditions set forth in Section 3(b) below.
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(b) The Financial Services Administrator is hereby authorized to receive the offer to
purchase the Series 1998 Bonds from the Underwriters in the fonn of an executed Purchase
Contract in the form approved herein. The City Manager and, the Financial Services
Administrator' arc 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 all of the Series
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1998 Bonds arc within the following parameters: (1) in the case of the Series 1998 Bonds, the
true interest cost rate shall not exceed 5.5%, (2) the refunding of that portion of the Refunded
Bonds to be refunded by the Series 1998 Bonds shall provide the City with a net present value
savings of not less than 5.0% of the par amount of such Refunded Bonds with an Underwriters'
Discount not in excess of 1.0% of the original principal amount thereof, and (3) the actual
principal amount of Series ] 998 Bonds shaH be limited to the lesser 0 f $49,000,000 or the actual
sum of the amounts required to (i) pay the cost of issuance of the Series 1998 Bonds, (ii) pay the
premium on the Municipal Bond Insurance Policy, (Hi) pay the costs of any additions to the
Reserve Fund caused by the issuance of the Series 1998 Bonds, if any, and (iv) retire the
Refunded Bonds in full on December I, 1998 (or such other date as shall be determined by the
City Manager and the Financial Services Administrator to be in the best interest of the City),
including any premium and accrued interest thereon to the date of redemption. The City
Manager and the Financial Services Administrator 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 the Series
1998 Bonds. 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 arc used to refund the Refunded Bonds
shall constitute a decision to refund the Refunded Bonds in accordance with the Bond Ordinance.
SECTION 4. The Series 1998 Bonds shall be sold to the Underwriters, upon the tenns
and conditions set forth in the Purchase Contract attached hereto as Exhibit "A" and incorporated
by reference, upon the satisfaction of the conditions set forth in Section 3(b) hereof. The Mayor-
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
lIA" upon the approval of the City Attorney as to fonn and legal sufficiency, with such additional
changes, insertions and omissions therein as do not change the substance thereof and as may be
approved by the said officers of the Issuer executing the same, such execution to be conclusive
evidence of such approval.
SECTION 5. The Series 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 ] 998 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 upon the approval of the City Attorney as to form and legal sufficiency, in
substantially the fonn 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. First Union National Bank, is hereby appointed Paying Agent and Registrar
for the Series 1998 Bonds.
SECTION 8. First Union National Bank is hereby appointed as the Escrow Agent under
the Escrow Deposit Agreement for the Series 1998 Bonds.
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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 Refunded Bonds in such
manner as may be approved by a certificate of the Financial Services Administrator 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, confinned 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 substantially the ronn attached hereto as Exhibit uB", with such additional
changes, insertions and omissions as may be made and approved by officers of the Issuer execut-
ing 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 foml attached hereto as Exhibit "B". The
execution of such Official Statement by such officers is hereby approved with such additional
changes, insertions and omissions as may be made and approved by such officers. For purposes
of Rule 15c2- I 2 of the United States Securities and Exchange Commission (the "Rule"), the
Preliminary Official Statement in the fonn 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 City with the secondary market disclosure requirements of the Rule, that it
will comply with and carry out all of the provisions of that certain Continuing Disclosure
Certificate in substantially the fonn attached hereto as Exhibit "C", to be executed by the City
and dated the date of issuance and delivery of the Series 1998 Bonds, as it may be amended from
time to time in accordance with the tenns thereof (the tlContinuing 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 mandatc or specific performance by court order, to cause the City to comply
with its obligations under this Section and the Continuing Disclosure Certificate. The Mayor-
Commissioner, or in her absence the Vice Mayor, the City Manager and the City Clerk are
hereby authorized to execute such Continuing Disclosure Certificate upon the approval of the
City Attorney as to ronn and legal sufficiency, in substantially the form attached as Exhibit "C",
with such additional changes, insertions and omissions therein as do not change the substance
thereof and as may be approved by the said officers of the Issuer executing the same, such
execution to be conclusive evidence of such approval.
SECTION 12. (a) The purchase of municipal bond insurance (the "Credit Facility") from
Financial Guaranty Insurance Company (the "Credit Facility Issuer") to irrevocably guarantee
the payment of principal and intcrest on the Series 1998 Bonds is hereby authorized, and
payment for such Municipal Bond Insurance Policy from proceeds of the Scries 1998 Bonds is
hereby authorized. The Issuer hereby acccpts the temls, conditions and agrecments relating to
the Municipal Bond Insurance Policy in accordance with thc Commitment for Municipal Bond
Insurance as attached hereto us Exhibit "D" and incorporated herein. A statement of insurance is
4
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hereby authorized to be printed on or attuched to the Series 1998 Bonds for the benefit and
infomlUtion of the holders of the Series 1998 Bonds.
(b) For so long as the Credit Facility is applicable to the Series 1998 Bonds, the
additional provisions set forth on Exhibit HE" attached hereto shall be applicable to the Series
1998 Bonds. In addition to the covenants and agrecments lIf the City previously contained in the
Bond Ordinance regarding the rights of the Credit Facility Issuer which arc incorporated herein
and in Exhibit "Eu hereto, 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 Issucr 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.
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(c) The City Manager and Financial Services Administrator are hereby authorized and
directed to detennine, 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 any increase in 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 Financial Services Administrator
detennine 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 the Credit Facility Issuer. The determination of the City Manager and Financial
Services Administrator shall be final. In the event the City Manager and Financial Services
Administrator detennine to use a Reserve Surety, then this Resolution shall be deemed to include
the provisions set forth in the commitment for such Reserve Surety, 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 upon the approval thereof as to from and legal sufficiency by
the City Attorney, a financial guaranty agreement or similar agreement, with such changest
insertions and omissions as may be approved by such officers. For p'urposes hereof, the Reserve
Requirement (as defined in the Original Ordinance) for the Series 1998 Bonds and the Parity
Bonds shall be the amount equal to the lesser of (i) the Maximum Bond Service Requirement of
the Series 1998 Bonds and the Parity Bonds, (ii) 125% of the average annual Bond Service
Requirement of the Series 1998 Bonds and the Parity Bonds, or (iii) 10% of the net proceeds of
the Series 1998 Bonds and the Parity Bonds.
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SECTION 13. All prior resolutions of the Issuer inconsistent with the provisions of this
resolution arc hereby modifiedt supplemented and amended to confonn with the provisions
herein contained and except as otherwise modifiedt 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 Financial Services Administrator, the City Attomey 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 Resolutiont the Purchase
Contract, the Escrow Deposit Agreement 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
5
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therein shall be deemed to be made on behalf of the' Issuer. In the event both the Mayor-
Commissioner and the Vice Mayor are unable to execute the documcnts related to the Scries
1998 Bonds, then any other member of the City Commission shall be authorized 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 furthernnce of the
issuance'ofthe'Series 1998 Bonds is hereby approvedJ confirmed and ratified.
'of
SECTION 15. This resolution shall become effe,ctive immediately upon its adoption.,
Passed and adopted by the City Commission of the City of Clearwater, Florida, this 5th
, day of November J 1998.
, (SEAL)
, ATTEST:,.'
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Approved as to fonn and
IC~J;t"ncY:
City Attorney
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EXHIBIT A
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PURCHASE CONTRACT
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EXHIBIT B
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PRELIMINARY OIi'FICIAL STATEMENT
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CONTINUING DISCLOSURE CERTIFICATE
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EXHIBIT D
. COl\'IMIJ'MENT FOR MUNICIPAL BOND INSURANCE
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EXHIBIT E
ADDITIONAL PROVISIONS REQUIRED BY MUNICIPAL BONn INSURANCE
1.
Definitions
(a) HBond Insurance Policyu shall mean the municipal bond new issue insurance
policy issued by the Bond Insurer that guarantees payment of principal of and
interest on the Series 1998 Bonds.
(b) uBond Insureru shall mean Financial Guaranty Insurance Company~ a New York
stock insurance company~ or any successor thereto.
2. Redemption Notices
(a) 'Notice of any redemption of Series 1998 Bonds shall either (i) explicitly state that
the proposed redemption is conditioned on there being on deposit in the
applicable fund or account on the redemption date sufficient money to pay the full
redemption price of the Series 1998 Bonds to be redeemed~ or (ii) be sent only if
sufficient money to pay the full redemption price of the Series 1998 Bonds to be
redeemed is on deposit in the applicable fund or account.
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3.
Default-Related Provisions
(a) , The applicable authorizing document provisions describing events of default shall
specify that in detem1ining whether a payment default has OCCUlTed or whether a
payment on the Series' 1998 Bonds has been made under the' authorizing
document(s), no effect shall be given to payments made under the Bond Insurance
Policy.
(b) Any acceleration of the Series 1998 Bonds or any annulment thereof shall be
subject to the prior written consent of the Bond Insurer (if it has not failed to
comply with its payment obligations under the Bond Insurance Policy).
(c) The Bond Insurer shall receive immediate notice of any payment default and
notice of any other default known to the Paying Agent or the Issuer within 30
days of the Paying Agent's or the Issuer's knowledge thereof.
(d) For all purposes of the authorizing document provisions governing events of
default and remedies~ except the giving of notice of default to Bondholders~ the
, Bond Insurer shall be deemed to be the sole holder of the Series 1998 Bonds it has
insured for so long as it has not [ailed to comply with its payment obligations
under the Bond Jnsurance Policy.
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(e)
The Bond Insurer shall be included as a party in interest and as a party entitled to
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(i) notify the Issuer, the Paying Agent, if any. or any applicable receiver of the
occurrence of un event of default and (ii) request the Paying Agent or receiver to
intervene in judicial proceedings that affect the Series 1998 Bonds or the security
therefor: The Paying Agent or receiver shall be required to accept notice of
default frol11 the Bond Insurer.
; ,
(f)
The following provisions shall be included:
(i) If, on the third day preceding any interest payment date for the Series 1998
Bonds there is not on deposit with the Paying Agent sufficient moneys
available to pay all principal of and interest on the Series 1998 Bonds due
on such date, the Paying Agent shall immediately notify the Bond Insurer
and State Street Bank and Trust Company, N.A., New York, New York or
its successor as its Fiscal Agent (the "Fiscal Agent") of the amount of such
deficiency. If, by said interest payment date, the Issuer has not provided
the amount of such deficiency, the Paying Agent shall simultaneously
, make available to the Bond Insurer and to the fiscal Agent the registration
books for the bonds maintained by the Paying Agent. In Addition:
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(A) The Paying Agent shall provide the Bond Insurer with a list of the
bondholders entitled to receive principal or interest payments from
the Bond Insurer under the terms of the Bond Insurance Policy and
shall make arrangements for the Bond Insurer and its Fiscal At)nt
(I) to mail checks or drafts to Bondholders entitled to receive full
or partial interest payments from the Bond Insurer and (2) to pay
principal of the Series 1998 Bonds surrendered to the Fiscal Agent,
by the Bondholders entitled to receive full or partial principal
payments from the Bond Insurer; and
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(B) The Paying Agent shall, at the time it makes the registration books
available to the. Bond Insurer pursuant to (a) above, notify
Bondholders entitled to received the payment of principal of or
interest on the Series 1998 Bonds from the Bond Insurer (1) as to
the fact of such entitlement, (2) that the Bond Insurer will remit to
them all or part of the interest payments coming due subject to the
terms of the Bond Insurance Policy, (3) that, except as provided in
paragraph (ii) below, in the event that any Bondholder is entitled to
receive full payment of principal from the Bond Insurer, such
Bondholder must tender his Bond with the instrument of transfer in
,the form provided on the Bond executed in the name of the Bond
Insurer, and (4) that, except as provided in paragraph (ii) below, in
the' event that such Bondholder is entitled to receive partial'
payment of principal from the Bond Insurer, such Bondholder must
tender his Series 1998 Bond for payment first to' the Paying Agent,
which shall note on such Bond the portion of principal paid by the
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Paying Agent, and then, with un acceptable fonn of assignment
executed in the name of the Bond Insurer, to the Fiscal Agent,
which will then pay the unpaid portion of principal to the
Bondholder subject to the tenns of the Bond Insurance Policy.
(ii)
In the event that the Paying Agent has notice that any payment of principal
of or interest on a Bond has been recovered from a Bondholder pursuant to
the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having
competent jurisdiction, the Paying Agent shall, at the time it provides
notice to the Bond Insurer, notify all Bondholders that in the event that
any Bondholder's payment is to recovered, such Bondholder will be
entitled to payment from the Bond Insurer to the extent of such recovery,
and the Paying Agent shall furnish to the Bond Insurer its records
evidencing the payments of principal of and interest on the Series 1998
Bonds which have been made by the Paying Agent and subsequently
recovered from Bondholders, and the dates on which such payments' were
made.
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(Hi) The Bond Insurer shall, to the extent it makes payment of principal of or
sub,rogation as to claims for past due interest, the Paying Agent shall note
the bond Insurer's rights as subrogee on the registration books'maintained
by the Paying Agent upon receipt from the Bond Insurer of proof of the,
payment of interest thereon to the Bondholders of such Series 1998 Bonds
and (B) in the case of subrogation as to claims for past due pdncipal, the
Paying Agent shall note the bond Insurer's rights as subrogee on the
registration books for the Series 1998 Bonds maintained by the Paying
Agent upon receipt of proof of the payment of principal thereof to the
Bondholders of such Series 1998 Bonds. Notwithstanding anything in this
Resolution or in the Bond Ordinance or the Series 1998 Bonds to the
contrary, the Paying Agent shall make payment of such past due interest
and past due principal directly to the Bond Insurer to the extent that the
Bond Insurer is a subrogee with respect thereto.
4. Amendments and Supplements
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(a) Any amendment or supplement to the authorizing documcnt or any other principal
financing documents shall be subject to the prior writtcn consent to the Bond
Insurer. Any rating agency rating the Series 1998 Bonds must receive notice of
each amendment and a copy thereof at least 15 days in advance of its execution or
adoption. The Bond Insurer shall be provided with a full transcript of all
proceedings relating to thc execution of any such'amcndmcnl or supplemcnt.
Defeasance Provisions '
5.
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(a)
Only cash, direct non-callable obligations of the United States of America and
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, securities fully and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America, to which direct obligation
or guarantee the full faith and credit of the United States of America has been
, pledged, Rercorp interest strips, CATS, TIGRS, STRPS, or dereased municipal
bonds rated AAA by S&P or Aaa by Moody's (or any combination of the
foregoing) shall be used to effect defeasance of thc Scries 1998 Bonds unless the
Bond Insurer otherwise approves. In the event of an advance refunding, the Issuer
shall cause to be delivered a verification report of an independent nationally
recognized certified public accountant. If a forward supply contract is employed
in connection with the refunding, (i) such verification report shall expressly state
'that the adequacy of the escrow to accomplish the refunding relies solely on the
initial escrowed investments and the maturing principal thereof and interest
income thereon and does not assume perfonnance under or compliance with the
forward supply contract and the escrow agreement (or the authorizing document,
if no separate escrow agreement is utilized), the timns of the escrow agreement or
authorizing document, if applicable, shall be controlling.
6.
Variable Rate Indebtedness
(a)
For' all purposes, variable rate indebtedness shall be assumed to bear interest at the
highest of: (i) the actual rate on the date of calculationt or if the indebtedness is
not yet outstanding, the initial rate (if established and binding), (ii) if the
indebtedness has been outstanding for a least twelve months, the average rate over,
the twelve months immediately preceding the date of calculation, and (Hi) (A) if
interest on the indebtedness is excludable from gross income under the applicable
provisions of the Internal Revenue Code, the most recently published Bond Buyer
"Revenue Bond Index" (or comparable index ifno longer published) plus 50 basis
points, or (B) if interest is not so excludable, the interest rate on direct U.S.
Treasury Obligations with comparable maturities plus 50 basis points; provided,
however, that for purposes of any rate covenant measuring actual debt service
coverage during a test period, variable rate indebtedness shall be deemed to bear
interest at the actual rate per annum applicable during the test period.
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(b) In the case of variable rate issues in which financial covenants are based on the
synthetic fixed rate under a swapt utilization of the synthetic fixed rate under a
Swap for purposes of perfonning any required calculations under the applicable
legal documentation shall be pem1itted only if such documentation and the
applicable Swap satisfy the requirements of the applicable Exhibit attached
hereto.
7. Reporting Requirements
(a) The Bond Insurer shall be provided with the following infonnation:
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(i)
Within 120 days after the end of each of the Issuer's, the budget for the
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succeeding year, the annual audited financial statements, a statement of the
amount on deposit in the debt service reserve fund as of the last valuation,
and, ifnot presented in the audited financial statements, a statement orthe
, revenues pledged to payment of bonds in each such fiscal year;
(ii)'
The official statement or other disclosure document, if any, prepared in
connection with the issuance of additional debt, whether or not on a parity
with the Series 1998 Bonds within 30 days after the sale thereof;
{iii}
Notice of any drawing upon or deficiency due to market fluctuation in the
amount, ifany, on deposit, in the debt service reserve fund;
(iv)
Notice of the redemption, other than mandatory sinking fund redemption,
of any of the Series 1998 Bonds, or of any advance refunding of the Series
1998 Bonds, including the principal amount, maturities and CUSIP
numbers thereof;
(v)
Simultaneously with the delivery of the annual audited financial
statements, a statement of:
(A)
(B)
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(C)
(D)
(E)
(F)
The number of system users as of the end of the fiscal year;
Notification of the withdrawal of any system user comprising 5%
or more of system sales measured in tenns of revenue dollars since
the last reporting date;
Any significant plant retirements or expansions planned or
undertaken since the last reporting date;
Maximum and average daily usage for the fiscal year;
Updated capita] plans for expansion and improvement projects;
and
Resu]ts of annual engineering inspections, if any, occurring at the
end of the fiscal year; und
(vi) Such additional information as the Bond Insurer may reasonably request
from time to time.
8. Payments Unconditional.
(a) In the case of bond issues payable from amounts received under a loan agreement,
lease, or other payment contract (UPayment Agreement"), the payment obligations
under said Payment Agreement shall be absolute and unconditional, free of
deductions and 'without any abatement, offset, recoupment, diminution or set-off
whatsoever.
9. Notice Addresses
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The notice addresses for the Bond Insurer and the Fiscal Agent shall be included
in the authorizing document, as follows: Financial Guaranty Insurance 'Company,
115 BroadwaYt New York, New York 10006, Attention: risk Management; and
,~tate Street Bank: and Trust company, N. A., 61 Broadway, New York, New York
:" 1 0006, Attention: Corporate Trust DcpartJnent:
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CITV OF CLEARWATER, FLORIDA
$49,000,000
Water and Sewer System Refunding Revenue Bonds
Series 1998
BOND PURCHASE CONTRACT
[Date] ,
City Commission of the City of
,Clearwater, Florida
Clearwater, Florida
Dear Commission Members:
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WiHiam R. Hough & Co. (the "Senior Manager"), on behalfofitself, A.G. Edwards & Sons,
Inc., Merrill Lynch & Co., Salomon Smith Barney and Raymond James & Associates; Inc.
(collectively with the Senior Manager, the, "Underwriters") offers to enter into the following
agreement with you (the ItCity") which, upon your acceptance of this offer, wiU be binding upon the
City and upon the Underwriters. This offer is made subject to your acceptance on or before 11 :59
p.m., 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 terms not otherwise: defined herein shall have the meanings set forth in the Official
Statement (as hereinafter defined).
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1. Purchase and Sale. Upon the terms and conditions and upon the basis of the
representations, warranties and agreements set forth herein, the Underwriters hereby agree to
purchase from the City for offering to the public and the City hereby agrees to sell and deliver to the
Underwriters for such purpose, all (but not less than all) of the City's $49,000,000 Water and Sewer
System Refunding Revenue Bonds, Series 1998 (the 11 Series 1998 Bonds"). The Series 1998 Bonds
shall be dated as of November I, 1998, shall be issued in such principal amounts and bear such rates
of interest as 'set forth in Exhibit A attached hereto. Interest on the current interest bearing Series
1998 Bonds shall be payable on June 1, 1999, and on each June 1 and December 1 thereafter to
maturity. The aggregate purchase price of the Series 1998 Bonds shall be $ (par less
underwriters' discount of$ . plus accrued interest on the current interest bearing Series 1998
Bonds of$ ), 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, par:ticularly Chapter 166, Part II, Florida
Statutes, as amended and supplemented, the City Charter, as amended and supplemented, the
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Ordinance, and other applicable provisions of law. The 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
~onds.
The Series 1998 Bonds arc being issued by the City to (i) advance refund the Refunded
Bonds; (ii) purchase the municipal bond insurance policy; (Hi) fund the Reserve Account with respect
to the Series 1998 Bonds, and (iv) pay the costs of issuance of the Series 1998 Bonds.
The Underwriter is duly authorized to execute this Bond Purchase Contract.
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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 $
security for the perfonnance 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 un cashed 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 otTer,
the check shall be immediately returned to the Underwriters. If the Underwriters fail (other than for
a reason permitted 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 satisfY or cause to be satisfied the conditions to the
obligations orthe 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 Undenvriters at the Closing.
The Underwriters agree to make a public offering of all of the Series 1998 Bonds at the initial
offering prices set forth in Exhibit A auached hereto; provided, however, the Underwriters reserve
the right to make concessions to dealers and to change such initial offering prices as the Undenvriters
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] 998 Bonds,' dated [POS Date] (which, together with the cover page and
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appendices contained therein. is herein called the "Preliminary Official Statementll). and authorizes
~ 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 "0flicial Statementlt), executed on behalf of the City by its
Mayor-Commissioner and by its City Manager and such reasonable numbers of contormed copies as
the Underwriters shall request, which shall be sufficient in number to comply with paragraph (b)(3)
of Rule lSc2M 12 of the Securities and Exchange Commission (17 CFR ~240.15c2-12) 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
Preliminary 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 ofthe Series 1998 Bonds. The City hereby deems the Preliminary Official Statement "finalll as
of its date for purposes of SEC Rule 15c2-12{b)(1).
In accordance with Section 218.385, Florida Statutes. the Underwriters hereby disclose the
infonnation required by such Section, including a truth-in-bonding statement. as provided in Exhibit
B attached hereto,
5. Use 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 of November I.
1998 (the tlEscrow Deposit Agreement"), 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 November I. 1998 (the ltContinuing 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. Reprcsentations, Warranties and Agreemcnts. 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
infonnation 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 p0l1ion 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
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(d) The City has full legal right, power and authority to: (i) enter into this Bond Purchase
'1 Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (ii) adopt the
Ordinance, (iii) sell, issue and deliver the Series 1998 Bonds to the Underwriters as provided herein,
and (iv) carry out and consummate the transactions contemplatcd 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 ofthe Act and with the obligations on its part in connection with the issuance of the Serics
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 official 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 constitute 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.
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(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 of the Ordinance, subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors1 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 law, 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.
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4
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with the lapse of time or giving of notice, or both, would constitute an event of default under the
.~ Ordinance will have occurred or be continuing.
(i) Except as provided in the Official Statement, 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, the Continuing Disclosure Certificate or the Escrow Deposit Agreement have been
obtained and are in full force and effect.
G> 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.
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(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.
(1) The City will furnish such infonnation, execute such instruments and take such other
action in cooperation with the Underwriters as the Undervvriters 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) determine 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
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(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 "final" by the City
for purposes of SEC Rule 15c2-12(b)( 1), except for "permitted omissions" as defined in such Rule.
(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 SEe Rule 15c2-12) or (ii) the time when the
Official Statement is available to any person from a nationally recognized repository, but in no case
less than 25 days following the end of the underwriting period, any event shall occur \vhich might or
would cause the Official Statement, as 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 shall
notify the Underwriters thereof: and, ifin the opinion orthe Underwriters such event requires the
preparation and publication ora supplement or amendment to the Official Statement, the City will at
, its own expense forthwith prepare and furnish to the Underwriters a sufficient number of copies of
an amendment of or supplement to t~e Official Statement (in form and substance satisfactory to
Counsel to the Underwriters) which will 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 period" ends.
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(r) , The City shall undertake, pursuant to the Ordinance, to comply with the Continuing
Disclosure Certificate,
7. Closing. At 1:00 p.m., E.DT" on [Closing Date], or at such time on such earlier or
later date as shall 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 form, 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 November 1, 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 shall 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 of its 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:
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(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 oCthe Closing, the Ordinance shall be in full force and effect in accordance
with its terms and shall 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 Underwriters.
(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 ofthe 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.
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(e) The Underwriters shall have the right to cancel the agreement 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
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(iii) an event described in paragraph (s) of Section 6 hereof shall have occurred
which requires an amendment or supplement to the Ot11cial Statement and which, in the
7,
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reasonable opinion of the Underwriters, materially adversely aflbcts the marketability of the
, Series 1998 Bonds or the market price thereof. or
(iv) in the opinion of the Underwriters, payment for and delivery orthe 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 ofthe 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 orthe Ordinance or the perfo'nnance
thereof. or
(vi) between the date hereof and the Closing, the City has, without the prior
written consent orthe 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
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(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 ofthe 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
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(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 (B) FOre (the "Insurer") shall inform the Underwrite~s
or the City that it shall not deliver its municipal bond insurance policy (the "Policy") at the
time of Closing, or
8
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(x) the rating of any class of security of the City shalt have been downgraded or
withdrawn by a national credit rating s'crvice.
(t) At or prior to the date of the Closing, the Undervvriters 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.
(iii) A final approving 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 E.
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(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(t)(iii) hereofrnay be relied upon by the UndelWriters 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, "INTRODUCTORY ST ATEMENT,"
"AUTHORITY FOR ISSUANCE," :'THE REFUNDING PLAN,II "DESCRIPTION OF THE
SERIES 1998 BONDS, II "SECURITY FOR THE SERIES 1998 BONDS, ""LEGALITY
FOR INVESTMENT," IIENFORCEABILITY OF REMEDIES" and IIAPPENDIX C w
Summary of Certain Provisions of the 1998 Ordinance and the Original Ordinance" (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 law, 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 "TAX
EXEMPTION'! is correct, and (8) 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,
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(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 perform its obligations under the Ordinance,
and to authorize, execute and deliver and to perfonn its obligations under this Bond Purchase
Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (B) the
9
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City has duly adopted the Ordinance and has duly authorized, executed and delivered this
Bond Purchase Contract, the Continuing Disclosure Ccttificate and the Escrow Deposit
Agreement, and assuming the due authorization, execution and delivcry of this Bond Purchase
Contract, the Continuing Disclosurc 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 terms; provided, however, the
enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and subjectl as to enforceability, 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 Otlicial Statement as to legal matters
relating to the City, the Act, 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 information 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 connict with, or constitute a breach of or default under, any law, administrative
regulation, consent decrce, ordinance, resolution or any agreement or other instrument to
which the City was or is subject, as thc case may be, 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, (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 performance by the City, of its obligations hereunder and under
the Ordinance have been obtained and are in full force and effect, (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 Onicial Statement, to the best of her knowledge,
as of the date of stich opinion, 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 threatcned against the City, affecting or seeking to prohibit, restrain or cnjoin the sale,
issuance or delivery orthe Series 1998 Bonds, or the pledge of and lien on the Net Revenues
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of the System, or contesting or affecting the validity or enforceability in any respect of the
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 Bonds, 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.
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(vii) , A certificate, which shall be true and correct at the time of Closing, signed by
the Financial Services Administrator of the City and the Managing Director of Public Works,
or such other officials satisfactory to the Underwriters, and in form 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 WATER AND SEWER
SYSTEM,11 "DEBT SE~VICE REQUIREMENTS, II "RATES, FEES AND CHARGES,"
"FINANCIAL ST A TEMENTS," and "YEAR 2000 COMPUTER COMP A TIBILITYII 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 (D) the Official
Statement did not as of its date, and does not as of the date of Closing, contain any untrue
statement ofa 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).
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(viii) A certificate of an authorized representative of First Union National Bank,
Jacksonville, Florida (the "Bank"), as Regist~ar 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, (B) the Bank has all requisite authority, power, licenses, permits and
franchises, and has full corporate power and legal 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 any agreement, indenture or other
obligation or instrument to which the Bank is a party or by which the Bank 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 raised by any party thereto is
11
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likely to materially and adversely affect the ability ofthe Bank to perform its obligations under
the Ordinance.
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(ix:) 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
, functions under the Escrow Deposit Agreement, (C) the perfonnance 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. (D) the Escrow Deposit Agreement constitutes a valid 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 in equity before any court, public board or body pending or, to his or' her
knowledge, threatened against or affecting the Escrow Agent wherein !\n unfavorable
decision, ruling or finding on an issue raised by any party thereto is likely to inaterially and ,
adversely affect the ability of the Escrow Agent to perform its obligations under the Escrow
Deposit Agreement,
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(x) An executed copy of the Escrow Deposit Agreement.
(xi) An executed copy of the verification report of [Verification Agent], as
described in the Official Statement under the heading "VERIFICA TION OF
ARITHMETICAL COMPUT A TrONS."
(xii) The Policy issued by the Insurer.
(xiii) An opinion of general 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 infonnation relating to the Insurer and the Policy contained in the
Official Statement, in form and substance satisfactory to Bond Counsel, the Underwriters and
Counsel to the Underwriters.
(xiv) A certificate of the Mayor deeming the Preliminary Official Statement "finaP'
as of its date for purposes of Rule 1 Sc2-l2~
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(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 wilt be, proposed
by the auditors~ and (Hi) 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 Moody's Investors Service to the effect that the Series 1998 Bonds
, have been assigned a rating no less favorable than II AAAu and a letter of Moody's hlvestors
SeIVice to the effect that the Series 1998 Bonds have been assigned a rating no less favorable
than "Aaa," both of which ratings shall be in effect as orthe 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 Closing. of the City.s representations and warranties contained
herein and ofthe statements and information contained in the Official Statement and the due
performance or satisfaction by the City on or prior to the date of Closing of all the agreements
then to be performed and conditions then to be satisfied by it.
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Ifthe City shall be unable to satisfY the conditions to the obligations of the Undenvriters to
purchase. to accept delivery of and to pay for the Series 1998 Bonds contained in this Bond Purchase
Contract and the Underwriters docs not waive such inability in writing. or if the obligations of the
UndelWriters to purchase. to accept delivery of and to pay for the Series 1998 Bonds shall be
terminated 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 UndclWriters 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 continue 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 performance 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 orthe 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~ (f) 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
Purchase Contract; (b) aU advertising expenses; and (c) aU other expenses incurred by them or any
13
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of them in connection with the public offering of the Series 1998 Bonds. In the cvent 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 mailing the same to City of Clearwater I Florida, 100 South Myrtle
Ave.t Clearwatert Florida 34616-5520, to the attention of Finance Director! City Treasurer, and any
such notice or other communication to be given to the UndcIWriters may be mailed to William R.
Hough & Co., 100 Second Avenue South, Suite 800~ St. 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.
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 all 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
satisfactionas 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 '
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14. ,Governing Law. This Bond Purchase Contract, and the terms and conditions herein, '
shall constitute the'full and complete agreement between the City and the Underwriters with respect
to the purchase and sale of the Series 1998 Bonds. Thi~ Bond Purchase Contract shall be governed
by and construed in accordance with the laws of the State of Florida, '
Very truly yours,
WILLIAM R. HOUGH & CO.t
AS SENIOR MANAGER ON BEHALF
OF THE UNDER\VRITERS '
BY: WILLIAM R. HOUGH & CO.~ as
representative of the Underwriters
Title: Vice President
Accepted this
day of
, 1998.
CITY OF CLEARWATER, FLORIDA
ATTEST:
Mayor
City Clerk
City Manager
Approved as to form:
City Attorney
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14. Govcnling Law. This Bond Purchase Contract, and the terms and conditiuns hereinJ
shall constitute the full 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 accordance with the laws of the State of Florida.,
Very truly yours,
WILLIAM R. HOUGH & CO.,
AS SENIOR MANAGER ON BEHALF
OF THE UNDERWRITERS
BY: WILLIAM R. HOUGH & CO., as
representative of the Underwriters
Title: Vice President
Accepted this'
day of
, 1998.
er.ry OF CLEARWATER, FLORIDA
ATTEST:
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Vice-Mayor
City Clerk
City Manager
Approved as to fonn:
City Attorney
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EXHIBIT A
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SERIES 1998 BONDS '
. MATURITY SCHEDULE
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~ITY OF CLEARWATER, FLORIDA
ELECTED OFFICIALS
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MAYOR - COMMISSIONER
Ri ta G'arvey
COMMISSIONERS
: '
Bob Clark
Ed Hooper
lB. Johnson. Jr.
Karen Seel
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APPOINTED OFFICIALS'
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'Michael 1. Roberto. City Manager'
, Pamela' K. Akin, ~sq.. City Attorney, .
, Margaret L. Simmons, CPA, Financial Services Manager
, , ,William C. Baier, Director of Public Works
'Cyndie Goudeau, City Clerk
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BOND COUNSEL
Bryant, Miller and Olive, P.A.
Tallahassee', Florida
FINANCIAL ADVISOR'
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First Union Capital Markets,
a' division of First Wheat Securities, Inc.
St. Petersburg, Florida
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VERIFICATION AGENT,
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No dealer. broker, salesman or other person has been authorized to give any information or
to make any representations, other than those contained in this Official Statement, in connection with
the offering of the Series 1998 Bonds described herein, and if given or made, such information or
representations must not be relied upon as having been authorized by the City or the Undelwriter.
This Official Statement does not constitut,e an offer to sell the Series 1998 Bonds or a solicitation of
an offer to buy nor shall there be any sale of the Series 1998 Bonds by any person in any jurisdiction
in which it is unlawful for such person to make such offer, solicitation or sale. The information set
forth herein has been furnished by the City and by other sources which arc believed to be reliable, but.
it is not 'guaranteed as to accuracy or completeness, and is not to be construed as a representation or
contract, by the Underwriter, The information and expressions of opinion herein are subject to
change without notice and neither the delivery of the Official Statement nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in the affairs of
the City' since the date hereof.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVER~ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
THE SERIES 1998 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH 8T ABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
The Series 1998 Bonds have not been registered with the Securities and Exchange,
Commission under the Securities Act of 1933, as ame'nded, nor has the Series 1998 Ordinance
been' qualified under the Trust Indenture Act of 1939, as amended, in reliance upon
exemptions contained in such acts. The registration or qualification of the Series 1998 Bonds
in accordance with applicable provisions of the securities laws of the States, if any, in which
the Series 1998 Bonds have been registered or qualificd,and the exemption from registration
or'qualification in certain other states cannot be regarded as a recommendation thereof.
Neither these States nor any of their agencies have passed upon the merits of the Series 1998
Bonds or the accuracy or completeness of this Official Statement. Any representation to the
contrary may be a criminal offense.
'/8"51
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TABLE OF CONTENTS
DISCLOSURE REQUIRED BY FLORIDA
BLUE SKY REGULATIONS", , , "., , 2S
FINANCIAL ADVISOR, , , , , , , , . . . . . . 2S
UNDERWRITING" . , , , , . . , , , , , , . , , , 26
YEAR 2000 COMPUTER COMPATIBILITY
: .. . .., , .., . ., . " , ." ... , ., , . .", . 26
MISCELLANEOUS , " , , , , . , . , . . , , . . . 26
Appendices:
Appendix A General, Description of the City
and Selected Statistics
Appendix B Excerpts from the City's
Comprehensive Annual Financial
Report for the Fiscal Year Ended
September 30. 1997
Appendix C Summary of Certain Provisions
of the Series 1998 Ordinance and
the Original Ordinance
Appendix D Form of Continuing Disclosure
Agreement
Appendix E Form of Bond Counsel Opinion
Appendix F Form of Municipal Bond
Insurance Policy
ii
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SUMMARY STATEMENT. ., . ".'"" Hi
INTRODUCTOR Y STATEMENT , , . . , . , 1
AUTHORITY FOR ISSUANCE. , , . , . , . . 1
THE REFUNDING PLAN ,.".."..,., 2
DESCRIPTION OF THE SERIES 1998
BONDS. , . . . . , . , . , . , . , : , . . , . . , . . , . . 3
,General ,..,.",.,.,.,..,..,...,.., 3
Optional Redemption . , . . . . , . , , . . . . , 4
Mandatory Redemption , . , , . . . . . . . . . 4
Notice of Redemption ....,..,." .'. , 5
Book-Entry Only System . . . . . . , . , . . . 6
SECURITY FOR THE SERIES 1998 BONDS
8
Series' 1998 Bonds Not a Debt of the City
.. . ~ .. . .. ~ ... ~ . . . . . . .. . .. .. .. . .. .. . .. . . 10
Outstanding Parity Bonds ",..,.,,; 10
MUNICIPAL BOND INSURANCE , . , . , 11
DEBT SERVICE REQUIREMENTS.,.. 12
SOURCES AND USES OF FUNDS . . , . . 13
THE WATER AND SEWER SYSTEM .. 13
Water System .."........,..".. 13
Sewer System .."....'.",.."., 15
Water and Sewer Capital Improvements
. , , . . , . . , . . , , . : . . . , . . .'. . . , . 17
RATES. FEES AND CHARGES. . , . , , , . 18
FINANCIAL STATEMENTS. , . , . , . . . . 21
LEGALITY FOR INVESTMENT. . . , . , . 21
TAXEXEMPTION ,......".,.,..,.21
Tax Treatment of Original Issue Discount
.,..."...,.,.,.,... .',... , 22
RATINGS. . , . . . , . . . , . , . . . . . . , . . . , . 23
LITIGATION .. , , , . , . . , , , , . . . . . , . . , 23
ADVISORS AND CONSULTANTS .... 23
CONTINUING DISCLOSURE, , . , . . , . . 24
ENFORCEABILITY OF REMEDIES. . . . 24
CERTAIN LEGAL MATTERS. , .,. ... . 25
VERIFICATION OF ARITHMETICAL
COMPUTATIONS, . . . . , . , . , . , . , , . . . . 25
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EXHIBIT B
DISCLOSURE STATEMENT AND TRUTH-IN-BONDING STATEMENT
November , 1998
, City Commission of the City of
Clearwater, Florida
Clearwater, Florida
Re: $49,000,000 City of Clearwater, Florida Water and Sewer System
Refunding Revenue Bonds, Series 1998 '
Dear Commission Members:
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In connection' with the proposed issuance by the City of Clearwater, Florida (the "City") of
$49,000,000 Water and Sewer System Refunding Revenue Bonds, Series 1998 (the It Series 1998
Bonds"), William R. Hough & Co" AG. Edwards & Sons, Inc" Merrill Lynch & Co., Salomon Smith
Barney and Raymond James & Associates, Inc. (the "Underwriters") are underwriting a public
offering of the Series 1998 Bonds.
f '
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
arrangef!1ents 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,'t 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 initially offered to the public by the Underwriters and the price to be paid
to the City for the Series 1998 Bonds, exclusive of original issue discount and accrued interest, will
be approximately $ per $1,000 of Series 1998 Bonds issued. The underwriting spread for the
Series 1998 Bonds will be approximately %. '
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(d) As part of the estimated underwriting spread set forth in paragraph (c) above, the
Underwriters wilt charge a management fce of $ per $1,000 of Series 1998 Bonds issued,
(c) No other lee, 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 Itfinderlt 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,
(t) The names and addresses of the Underwriters are:
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, 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: "
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(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 (iii) pay the costs of
issuance of the Series 1998 Bonds, The obligations are expected to be repaid over a period of
approximately years. At the interest rates set forth on Exhibit A to the Bond Purchase Contract
to which this is attached, total interest paid over th~,life of the obligation will 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 $
of such Net Revenues not being available to finance other services of the City each year for the
term of the issue. '
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WILLIAM R. HOUGH & CO.
A.G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
RAYMOND JAMES & ASSOCIA TES, INC.
By: WILLIAM R. HOUGH & CO." as . '
representative of the Underwriters '
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SCHEDULE I
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UNDERWRITERS'S ESTIMATED EXPENSES
(Per $1,000 of Series 1998 Bonds)
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OFFICIAL STATEMENT
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$49,000,000'"
CITY OF CLEARWATER, FLORIDA
WATER AND SEWER REFUNDING REVENUE BONDS, SERIES J998
INTRODUCTORY STATEMENT
The' purpose of this Official Statement, which includes the cover page, the Summary
Statement and the Appendices, is to provide information concerning the City of CJeaJVIater, Florida
(the "City") and the City's $49.000,000. Water and Sewer Refunding Revenue Bonds, Series 1998
(the It Series 1998 Bonds").
The Series 1998 Bonds are being issued for the purpose of (0 making funds available with
which to currently refund and redeem the Citis Outstanding Water and Sewer Revenue Bonds,
Series 1988 (the tlRefunded Bondsll) (as further described herein), and (ii) paying certain costs of
issuance of the Series 1998 Bonds; including the ITlunicipal bond insurance premium. The Series 1998
Bonds and the interest thereon are payable solely from the Net Revenues derived from the operation
of the City's water and sewer system, as further described herein. The lien of the Series 1998 Bonds
on the Net Revenues is on a parity with the holders of the City's Outstanding Water and Sewer
Revenue Refunding Bonds, Series 1993 (the IIParityBonds"), as further described herein. The'
C'~;) scheduled payment of principal of and interest on the Series 1998 Bonds will be insured by a
municipal bond insurance policy to be issued simultaneously with the delivery of the Bonds by
Financial Guaranty Insurance' Company as described herein, For a discussion of the terms and
provisions of such policy. including the limitations thereof, see "MUNICIPAL BOND INSURANCE"
herein.
Neither the Series 1998 Bonds nor the interest thereon constitute a general obligation or
indebtedness of the City within the meaning of any constitutional, statuti)l)f or charter provision or
limitation. No owner or owners of any Series 1998 Bonds shall ever have the right to compel the
exercise of the ad valorem taxing power of the City, or any other taxing power in any form on any
real or personal property of the City, to pay the Series) 998 Bonds or the interest thereon. The City
shall not be obligated to pay the Series 1998 Bonds or any interest thereon except from the Net
Revenues, in the manner provided in the Series 1998 Ordinance referred to herein.
A Reserve Account has been established for the benefit of the Series 1998 Bonds and the
outstanding Parity Bonds (as herein defined), Upon issuance of the Series 1998 Bonds, the Reserve
, Account will be funded in an amount equal to the Maximum Bond Service Requirement on the Series
1998 Bonds and the outstanding Parity Bonds.
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The City covenants in the Series 1998 Ordinance to fix, establish and maintain such rates, and
collect such fees, rentals and other charges for the services and facilities of the System (as herein
defined) and revise the same from time to time whenever necessary as will always provide Gross
Revenues in each Fiscal Year sufficient to pay (i) the Cost of Operation and Maintenance of the
Sy!:tcm in such Fiscal Year, (ii) 115% of the Bond Service Requirement for such Fiscal Year on the
Outstanding] 998 Bonds and on all Outstanding Additional Bonds, plus (Hi) 100% of all reserve and
other payments required to be made pursuant to the Series 1998 Ordinance and the Original
Ordinance (as herein defined).
The City may issue Additional Bonds. payable on a parity from the Net Revenues with the
Series 1998 Bonds and the Parity Bonds, for the purpose of refunding a part of the Outstanding
Bonds, or financing the cost of extensions, additions and improvements to the System and for the
acquisition and construction of. and extensions and improvements to. sewer and/or water systems
which are to be consolidated with the System and operated as a single combined utility, provided that,
among other requirements, certain earnings tests re\ating historical Net Revenues to the Maximum
Bond Service Requirement of all Bonds outstanding after the issuance of such Additional Bonds can
be met. Such historical Net Revenues may be adjusted by the Consulting Engineer as provided in the
Series 1998 Ordinance and the Original Ordinance.
Definitions of certain words and terms having initial capitals used herein and in the Series
1998 Ordinance (as defined below in "Authority For Issuancetl) are contained in the "Summary of
Certain Provisions of the Series 1998 Ordinance and the Original Ordinancetl in Appendix C hereto.
(~~:~ The references, excerpts and summaries of all documents referred to herein do not purport
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to be complete statements of the provisions of such documents, and reference is directed to all such
documents for full and complete statements of all matters of fact relating to the Series 1998 Bonds,
the security for the payment of the Series 1998 Bonds, and the rights and obligations of holders
thereof. The information contained in this Ollicial Statement involving matters of opinion or of
estimates, whether or not so expressly stated, are set forth as such and not as representations of fact,
and no representation is made that any of the estimates will be realized. Neither this Ollicial
Statement nor any statement which may have been made verbally or in writing is to be construed as
a contract with the holders of the Series 1998 Bonds.
AUTHORITY FOR ISSUANCE
The Series 1998 Bonds will be issued pursuant to the authority of and in full compliance with
(a) the charter of the City, (b) the Constitution and the laws of the State of Florida, particularly
Chapter 166, Part II, Florida Statutes, and other applicable provisions oflaw. and (c) Ordinance No,
3674-84 enacted by the City on August 2, 1984. as amended and supplemented (the "0riginal
Ordinance") and Ordinance No. 6311-98 enacted by the City on November 5, 1998. as amended and
supplemented (the t1Series 1998 Ordinance").
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THE REFUNDING PLAN
The City and First Union National Bank, Jacksonville, Florida (the I1Escrow Agent"), upon
delivery of the Series 1998 Bonds, will enter into an Escrow Deposit Agreement (the "Escrow
,Agreementlt), to provide for the advance refunding of the City.s Water and Sewer Revenue Bonds,
Series 1988 currently outstanding in the aggregate principal amount of [ 1988 Balance] (the" Series
1988 BondsU) from the date of issuance and delivery orthe Series 1998 Bonds to December 1, 1998
(the "Refunded BondsU), The Escrow Agreement creates an irrevocable escrow account (the
"Escrow Accountll) which is held by the Escrow Agent and the moneys and securities held therein
are to be applied to the payment of principal of and premium and interest on the Refunded Bonds at
maturity or upon earlier redemption thereof. Immediately upon the issuance and delivery of the
Series 1998 Bonds, the City will deposit certain of the proceeds from the sale of the Series 1998
Bonds together with certain other available funds of the City into the Escrow Account. Moneys
deposited in the Escrow Fund will be invested, at the direction of the City, in direct obligations of the
United States of America (the "Escrow Securities") maturing in amounts and bearing interest at rates
sufficient without reinvestment, together with cash held uninvested in the Escrow Fund, to refund the
Refunded Bonds. The maturing principal of and interest on the Escrow Securities and cash held in
the Escrow Fund, in the amounts needed to pay the principal of and interest on, and redemption
premium with respect to the Refunded Bonds are pledged solely for the benefit of the holders oCthe
Refunded Bonds.
The Refunded Bonds will be called for redemption on December I, 1998, at a redemption
(~~~,) price of 103 ~ % ofthe principal amount of the current interest bearing Refunded Bonds and 105%
of the Refunded Bonds which are capital appreciation bonds. The Escrow Securities will be
purchased from the Treasury Department of the United States of America or in the open market, in
each case at interest rates and prices which will cause the yield thereon, computed in accordance with
the provisions of Section 148 of the Internal Revenue Code of 1986, as amended, not to exceed the
applicable yield permitted by such provisions.
Under the ordinances authorizing the Refunded Bonds, by virtue of the provisions for
refunding described above, together with the irrevocable deposit and application of moneys and
Escrow Securities as provided in the Escrow Agreement and certain other provisions of such
agreement, and certain provisions of the resolutions authorizing such Bonds that will be complied
with upon the issuance of the Series 1998 Bonds, in the opinion of Bond Counsel, the Refunded
Bonds will be deemed to be no longer Outstanding under the ordinances authorizing their issuance
and, except for the purposes of any payment from such moneys and Escrow Securities, shall no
longer be secured by or entitled to the benefits of the respective ordinances authorizing their issuance,
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DESCRIPTION OF THE SERIES 1998 BONDS
Genernl
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The Series 1998 Bonds (other than Series 1998 Bonds which arc Capital Appreciation Bonds)
(the "CUlTcnt Interest Bearing Bonds") will be dated November 1, 1998. Series 1998 Bonds which
are Capital Appreciation Bonds will be dated the date of their initial issuance and delivery. The Series
1998 Bonds will bear interest at the rates and mature on December] in the amounts and at the times
set forth on the cover page of this Official Statement. The Sedes 1998 Bonds are to be issucd as fully
rcgistcred bonds in denominations of $5,000 or integral multiples thereof in the case of Series] 998
Bonds which are Current Interest Bearing Bonds and in Maturity Amounts of $5,000 in the case of
Series 1998 Bonds which are' Capital Appreciation Bonds. Interest on the Series 1998 Bonds which
arc Current Interest Bearing Bonds will be payable on June 1, ] 999 and semiannually thereafter on
June 1 and December 1 of each year. commencing June I, 1999, by check or draft mailed to the
registered owners, at their addresses as they appear on the registration books of the City maintained
by the Bond Registrar) as of the 15th day (whether or not a business day) of the month preceding the
interest payment date (the uRecord Date"). Owners of $1,000,000 or more in aggregate principal
amount of Series 1998 Bonds may receive interest by wire transfer, at the Owner's expense, to a bank
account designated in writing by the Owner not later than the Record Date, Principal and Maturity
Amount of, and premium ifany, are payable at maturity) or upon redemption prior to maturity, upon
presentation and surrender thereof at the corporate trust office of the Paying Agent. First Union
National Bank, Jacksonville, Florida, is acting as Paying Agent and Bond Registrar for the Series
1998 Bonds,
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The Series 1998 Bonds will be initially issued in the form of a single fully registered Bond for
each maturity of the Scries 1998 Bonds which are Current Interest Paying Series 1998 Bonds and
each maturity of the Series 1998 Bonds which are Capital Appreciation Bonds. Upon initial issuance,
the ownership of each such Series ] 998 Bonds will be registered in the registration books kept by the
Bond Registrar, in the name of Cede & Co., as nominee of The Depository Trust Company, New
York, New York ("DTC"). While held jn book-entry form, all payments of principal, interest
and premium, if any, on the Series 1998 Bonds will be made to DTC or the DTe' Nominee as
the sole registered owner of the Series 1998 Bonds and payments to Beneficial Owners will be
the responsibility orOTe and the DTC Participants as described below. See "Book-Entry Only
System."
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With respect to Series 1998 Bonds registered in the name of Cede & Co., as nominee of DTC,
neither the City, nor the Paying Agent will have any responsibility or obligation to any OTC
Participant or to any indirect DTC Participant. See "Book-Entry Only System" for the definition of
"DTe Participant." Without limiting the immediately preceding sentence, neither the City nor the
Bond Registrar and the Paying Agent will have any responsibility or obligation with respect to: (i)
the accuracy ofthe records of DTC or any DTC Participant with respect to any ownership interest
in'the Series 1998 Bonds; (ii) the delivery to any DTC Participant or any other person other than a
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registered owner, as shown in the registration books kept by the Bond Registrar, of any notice with
respect to the Serie's 1998 Bonds, including any notice of redemption; or (iii) the payment to Rny
DTC Participant or any other person, other than a registered owner. as shown in the registration
books kept by the Bond Registrar. of any amount with respect to principal of. premium, if any, or
interest on the Series 1998 Bonds, The City, the Bond Registrar and the Paying Agent may treat and
consider the person in whose name each Series 1998 Bonds is registered in the registration books
kept by the Bond Registrar as the holder and absolute owner of such Bond for the purpose of
payment of principal ot: premium, ifany. and interest with respect to such Bond, forthe purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of
registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying
Agent will pay all principal of, premium, if any. and interest on the Series 1998 Bonds only to or upon
the order of the respective registered owners, as shown in the registration books kept by the Bond
Registrar. or their respective attorneys duly authorized in writing. as provided in the Series 1998
Ordinance, and all such payments will be valid and effectual to satisfY and discharge the City's
obligations with respect to payment of principal ot: premium, if any, and interest on the Series 1998
Bonds to the extent of the sums so paid. No person other than a registered owner, as shown in the
registration books kept by the Bond Registrar, will receive a certificated Bond evidencing the
obligation of the City to make payments of principal of, premium, if any. and interest on the Series
] 998 Bonds pursuant to the provisions of the Series] 998 Ordinance.
Optional Redemption
The Series 1998 Bonds m'aturing December I, to December I, are not callable
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I..' ",':J prior to their maturity dates, The Series 1998 Bonds maturing after December I, are subject
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to optional redemption by the City, on and after December I, as a whole at any time, or in part
on any Interest Payment Date thereafter. from the maturities selected by the City, and by lot within
a maturity if less than an entire maturity is redeemed, at the redemption prices (expressed as
percentages of principal amount or Compound Accreted Value) set forth below, together with
accrued interest to the date of redemption:
Redemption Period
~
December 1.
December 1.
December I,
through November 3D,
through November 3D,
and thereafter
Mandatory Redemption
The Series 1998 Bonds maturing on December 1, will be subject to mandatoI)' redemption
prior to maturity, by lot, in such manner as the Registrar may deem appropriate, at a redemption price
equal to the Compound Accreted Value thereof on the redemption date, on December 1, , and on
each December 1 thereafter, in the following principal amounts in the years specified: '
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Year '
Amortization
~
fur
Amortization
I nstall m~nJ,
'Finnl maturity
The Series 1998 Bonds maturing on December 1, will be subject to mandatory redemption
prior to maturity, by lot, in such manner as the Registrar may deem appropriate, at a redemption price
equal to the Compound Accreted Value thereof on the redemption date, on December 1, , and on
each December 1 thereafter, in the following principal amounts in the years specified:
Year
Amortization
Installment
Ymlr
, Amortization
Installment.
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'Finnl mnturity
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 (as such tenns are described below under the heading IIBook.Entry Only System").
Any failure of Cede & Co. to notify any DrC Participant, or of any Drc Participant to notifY the
Beneficial Owner orany such notice, will not affect the validity of the redemption of the Series 1998
Bonds.
Notice of Redemption
Not more than 60 days and not less than 30 days prior to the expected redemption date, notice
of such redemption shall be filed with the Paying Agent and shall be mailed, postage prepaid to all
registered owners of the Series 1998 Bonds to be redeemed at their addresses as t~ey appear on the
registration books. Failure to give such notice by mailing to any registered owner, or any defect
therein, shall not affect the validity of any proceeding for the redemption of other Series 1998 Bonds.
Interest shall cease to accrue on any Series 1998 Bonds duly called for prior redemption, after the
redemption date, ifpayment thereof has been duly provided,
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Book-Entry Only System
~i
The Series 1998 Bonds will be available in book-entry form only, in denominations of$5,OOO
or any integral multiple thereof. Purchasers of the Series 1998 Bonds will not receive certificates
representing their interests in the Series 1998 Bonds purchased. The Underwriter is to confirm
original issuance purchases with statements containing certain terms of the Series 1998 Bonds
purchased.
The following information regarding The Depository Trust Company, New York, New York
(nOTC") and the book-entry only system of registration has been obtained by the City from OTC.
No representation is made by the City as to its accuracy or correctness.
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The Series 1998 Bonds will be held by DTC as securities depository. The ownership of one
fully registered Series 1998 Bonds for each maturity, as set forth on the cover page hereof. will be
registered in the name of Cede & Co" as nominee for DTC. DTC is a limited:'purpose trust company
organized under the New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a "clearing corporationtl within
the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934, as amended. DTC
was created to'hold securities of its participants ("DTC Participants") and to facilitate the settlement
of securities transactions among DTC Participants in such securities through electronic computerized
book-entry changes in accounts of the OTC Participants, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations, some of which own DTC
either directly or through their representatives. Access to the DTC system is also available to other
entities such as security brokers and dealers, banks and trust companies that clear through or maintain
a custodial relationship with a OTC Participant
Purchases of the Series 1998 Bonds may be made by or through brokers and dealers who arc,
or act through, DTC Participants. Such DTC Participants and the persons for whom they acquire
interests in the Series 1998 Bonds as nominees will not receive certificated bonds, but each OTC
Participant will receive a credit balance in the records of DTC in the amount of such OTC
Paliicipant's interest in the Series 1998 Bonds, which will be confirmed in accordance with DTC's
standard procedures. The ownership interest of the actual purchaser of each Bond (the "Beneficial
OwnerU) will be recorded in the records of the DTC Participant. DTC Participants arc required to
provide Beneficial Owners with a written confirmation of their purchase containing details of the
acquired Series 1998 Bonds. Transfers of ownership interests in the Series 1998 Bonds will be
accomplished by book entry made by DTC and by the OTC Participants who act on behalf of the
Beneficial Owners.
The Paying Agent will make payments of principal of. redemption premium, if any, and
interest on the Series 1998 Bonds to DTC or its nominee, Cede & Co" as registered owner of the
Series 1998 Bonds. The current practice of DTe is to credit the accounts of the DTC Participants
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immediately upon receipt of moneys in accordance with their respective holdings as shown on the
records of DTC, Payments by DTC Participants to Beneficial Owners will be in accordance with
standing instructions and customary practices such as those which are now in eireet for municipal
securities held by DTC Participants in bearer form or registered in "street namet! for the accounts of
cllstomers, and win be the responsibility of DTC Participants and not the responsibility of DTC, the
Paying Agent or the City subject to any statutory or regulatory requirements as may be in eilcct from
time to time.
The Bond Registrar, the Paying Agent and the City will send any notice of redemption or
other notice only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC
Participant to notity the Beneficial Owner, of any such notice and its content or effect will not affect
the validity orthe redemption of the Series 1998 Bonds called for redemption or of any other action
premised on such notice. Redemption of portions of any maturity of the Series 1998 Bonds will
reduce the outstanding principal amount of such maturity held by DTC. In such event, DTC may
implement, through its book~entry system, a redemption of Series 1998 Bonds held for the account
ofDTe Participants in accordance with its own rules or other agreements with DTC Participants, and
then DTC Participants may implement a redemption of Series 1998 Bonds for the Beneficial Owners.
.fw't:\
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NEITHER THE CITY NOR THE BOND REGISTRAR OR THE PAYING AGENT
WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS OR
THE PERSONS FOR WHOM DTC PARTICIPANTS ACT AS NOMINEES \VITO
RESPECT TO THE REFUNDED BONDS, THE ACCURACY OF RECORDS OF DTC,
CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE SERIES 1998
BONDS OR THE PROVIDING OF NOTICE OR PAYMENT TO DTC PARTICIPANTS OR
BENEFICIAL OWNERS OR THE SELECTION OF SERIES 1998 BONDS FOR
REDEMPTION.
In the e\\'nt of an insolvency of DTC, if DTC has insufficient securities in the fungible bulk
of securities in its custody (e,g., due to theft or loss) to satisfy the claims ofDTC Participants with
respect to deposited securities and is unable by application of (i) cash deposits and securities pledged
to DTC to protect DTC against losses and liabilities; (ii) the proceeds of insurance maintained by
DTC and/or DTC Participants; or (iii) other resources, to obtain securities necessary to eliminate the
insufticiency, DTC Participants may not be able to obtain all of their deposited securities.
The City, the Bond Registrar and the Paying Agent cannot give any assurances that DTC,
DTC Participants or others will distribute payments of principal of, premium, if any, and interest on
the Series 1998 Bonds paid to DTC or its nominee, or any redemption or other notices to the
Beneficial Owners or that they will do so on a timely basis or that DTC will serve or act in a manner
described in this Official Statement.
DTC may determine to discontinue providing its services with respect to the Series 1998
Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto
under applicable law, In addition, the City may determine to discontinue the use of book-entry
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transfers' through orc (or any successor securities depository), Under such circumstancest the City
. and the Bond Registrar will authenticate and deliver certificated Series 1998 Bonds.
In the event that the book~cntry only system is discontinuedt the following provisions will
govern the transfer and exchange of Series 1998 Bonds. The Series 1998 Bonds will be exchanged
for an equal aggregate principal amount of corresponding bonds in other authorized denominations
and of the same series and maturitYt upon surrender thereof at the principal corporate trust office of
the Bond Registrar. The transfer of any Series 1998 Bonds will be registered on the books
maintained by the Bond Registrar for such purpose only upon the surrender thereof to the Bond
Registrar with a duly executed written instrument of transfer in form and with guaranty of signatures
satisfactory to the Bond Registrar; containing written instructions as to the details of transfer of such'
Series 1998'Bonds, along with the social security number or federal employer identification number
of such transferee. The City and the Bond Registrar may charge the registered owners a sum
su~cient to reimburse them for any expenses incurred in making any exchange or transfer after the
first such exchange or transfer following the delivery of the Series 1998 Bonds. The Bond Registrar
or the City may also require payment from the registered owners or their transferees, as the case may
be, of a sum sufficient to C~'lVer any ta.x, fee or other governmental charge that may be imposed in
relation thereto. Such charges and expenses shall be paid before any such new Series 1998 Bonds
shall be delivered. Neither the City nor the Bond Registrar shall be required to register the transfer
or exchange of any Series 1998 Bonds during the period commencing on the fifteenth day (whether
or not a business day) of the month next preceding an interest payment date and ending on such
interest payment date or, in the case of any proposed redemption of a Series 1998 Bonds, after such,
Series 1998 Bonds or any portion thereof,has been selected for redemption,
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TABLE OF COMPOUND ACCRETED VALUES .'
Set forth below is a tabl,e of Compound Accreted Values for Capital Appreciation Bonds for
'the resp~ctive dates set forth below. Such Compound Accreted Values will be determinativc of the ,
"" r~demption price payable with - respect to such Capital Appreciation, Bondson any datc set forth
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SECURITY FOR THE SERIES 1998 BONDS
Net Revenues. The principal of and premium, if any, and interest on the Series 1998 Bonds
are payable solely from and secured by an irrevocable first lien upon and pledge of the Net Revenues
(as hereinafter defined) derived and collected by the City from the operation of the water and sewer
system orthe City (the "Systemfl), on a parity with the Parity Bonds, "Net Revenues" are defined by
the Series 1998 Ordinance to include all income or earnings, including any income from the
investment of funds. derived by the City from the operation of the System after deduction of current
expenses, either paid or accrued, for the operation, maintenance and repair of the System. but not
including reserves for renewals and replacements, for extraordinary repairs or any allowance for
depreciation.
The Series 1998 Bonds do not constitute a general indebtedness of the City within the
meaning of any constitutional. statutory or charter provision or limitation. The principal of and
interest on the Series 1998 Bonds and all required reserve and other payments shall be made solely
from the Net Revenues. The City shall never be required to levy ad valorem taxes on any property
therein to pay the principal of and interest on the Series 1998 Bonds or to make any of the required
debt service, reserve or other payments. and any failure to pay the Series 1998 Bonds shall not give
rise to a lien upon any property of or in the City, except the Net Revenues.
Rate Covenant. In the Series 1998 Ordinance and the Original Ordinance, the City has
,:~:, covenanted to fix and maintain such rates and collect such fees, rentals and other charges for the
services and facilities of the System and revise the same from time to time whenever necessary which
will provide Gross Revenues in each Fiscal Year sufficient to pay (i) the Cost of Operation and
Maintenance of the System. (ii) one hundred fifteen per centum (115%) of the Bond Service
Requirement becoming due in such Fiscal Year on the outstanding Parity Bonds. on the outstanding
Series 1998 Bonds and on all outstanding Additional Bonds, plus (Hi) one hundred per centum
(100%) of all reserve and other payments required to be made pursuant to the Series 1998 Ordinance
and the Original Ordinance. Such rates. fees, rentals and other charges will not be reduced so as to
render them insufficient to provide Gross Revenues for such purposes,
Reserve Account. The Original Ordinance creates a Reserve Account in a sum equal to and
sufficient to pay the Maximum Bond Service Requirement on all outstanding Bonds becoming due
in any ensuing Fiscal Year. The Reserve Account will be fully funded after the issuance of the Series
1998 Bonds, No further payments will be required to be made into such Reserve Account as long
as there shall remain on deposit therein a sum equal to the Maximum Bond Service Requirement on
all outstanding Bonds becoming due in any ensuing Fiscal Year,
Moneys in the Reserve Account shall be used only for the purpose of payment of maturing
principal of or interest on the Bonds when the moneys in the Sinking Fund arc insufficient therefor.
Interest earnings on funds held in the Reserve Account will be transferred to the Revenue Fund. In
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lieu of or in substitution for all or any part of the requircd deposits to the Rcscrvc Account, thc City
may provide for the deposit of a surcty bond or insurance policy from a reputablc insurer in
accordance with the provisions of the Scries 1998 Ordinance,
Any withdrawals from the Reserve Account wilt be subsequently restored from the first
moneys available in the Revenue Fund aftcr all required current payments into the Sinking Fund and
into the Reserve Account, including all deficiencies for prior payments, have been made in filII.
Additional Bonds. Additional Bonds, payable on a parity from the Net Revenues with the
Series 1998 Bonds and the Parity Bonds, may be issued for the purpose of refunding a part of the
outstanding Bonds or financing the cost of extensions, additions and improvements to the System and
for the acquisition and construction of. and extensions, additions and improvements to, sewer andlor
water systems which are to be consolidated with the System and operated as a single combined utility,
Additional Bonds, other than for refunding purposes, wilt be issued only upon compliance with all
of the conditions set forth in the Series 1998 Ordinance, including the following:
(1) As certified by a firm of independent certified public accountants, the aggregate
amount of Net Revenues for the Fiscal Year preceding the date of issuance of the proposed
Additional Bonds, or for any twelve consecutive months during the preceding eighteen months,
adjusted as provided below, is not less than 120% of the Maximum Bond Service Requirement in any
Fiscal Year thereafter on (a) all Bonds then outstanding, and (b) on the proposed Additional Bonds.
"~,~')
(2) Upon recommendation of the Consulting Engineers, the computation of Net Revenues,
for purposes of issuing Additional Bonds, may be adjusted by including; (a) 100% of the additional
Net Revenues which, in the opinion of the Consulting Engineers, would have been derived by the City
from rate increases adopted before the Additional Bonds are issued, if such rate increases had been
implemented before the commencement of the period for which such Net Revenues are being
certified, and (b) 100% of the additional Net Revenues estimated by the Consulting Engineer to be
derived during the first full twelve month period after the facilities of the System are extended,
enlarged, improved or added to with the proceeds of the proposed Additional Bonds, provided that
the adjustments described in clause (b) may only be made if the Net Revenues, as adjusted under
clause (a), equal at least 1.00 times the Maximum Bond Service Requirement in any Fiscal Year
thereafter on (i) all Bonds then outstanding, and (ii) on the proposed Additional Bonds.
See Appendix C. "Summary of Certain Provisions of the Series] 998 Ordinance and the
Original Ordinance - Covenants of the Issuer - Issuance of Additional Bonds, II
Series 1998 Bonds Not a Debt of the City
, '
The Series 1998 Bonds shall not constitute a general obligation or indebtedness of the
City within the meaning of any constitutional, statutory or charter provision or limitntion, and
no Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power
of the City or taxation in any form of real or personal property therein for the payment of the
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principal of and intcrest on the Series 1998 Bonds or to comllel the City to pay such principal
nnd interest from any other funds of the City except the Net Revenues. The Series 1998 Bonds
shall not constitute a lien upon any property of or in the City, but shall constitute a lien only
on the Net Revenues all in the manner provided in the Series 1998 Ordinance.
Outstanding Parity Bonds
The City has issued its Water and Sewer Revenue Bonds, Series 1993 (the "Series 1993
Bonds") in the aggregate face amount of $53,445,000, of which [ ] currently remains
outstanding (the t1Series 1993 Bondstl). The Outstanding Parity Bonds are comprised of Serial Bonds
maturing through 2004 and Term Bonds maturing December 1,2011 and December 1,2018,
MUNICIPAL BOND INSURANCE
The following information has been furnished by Financial Guaranty Insurance
Company (tlFinancial Guaranty" or the "Insurertl) for use in this Official Statement.
Reference is made to Appendix F herein for a specimen of Financial Guaranty's policy.
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Concurrently with the issuance ofthe Bonds, Financial Guaranty will issue its Municipal Bond
New Issue Insurance Policy for the Bonds (the 11policy"). The Policy unconditionally guarantees the
payment of that portion of the principal of and interest on the Bonds which has become due for
payment, but shall be unpaid by reason of nonpayment by the issuer of the Bonds (the "Issuern),
Financial Guaranty will make such payments to State Street Bank and Trust Company, N.A., or its
successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and
interest is due or on the business day next following the day on which Financial Guaranty shall have
received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by
registered or certified mail, from an owner orBonds or the Paying Agent of the nonpayment of such
amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its owner
upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the ownerts right to
receive payment of the principal and interest due for payment and evidence, including any appropriate
instruments of assignment, that all of such owner's rights to payment of such principal and interest
shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any
payment of principal or interest made to an owner of a Bond which has been recovered from such
owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with
a final, nonappealable order of a court having competent jurisdiction.
The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the
Bonds, The Policy covers failure to pay principal of the Bonds on their respective stated maturity
dates or dates on which the same shall have been duly called for mandatory sinking fund redemption,
and not on any other date on which the Bonds may have been otherwise called for redemption,
accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the
stated date for its payment.
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Generally, in connection with its insurance of an issue of municipal securities; Financial
Guaranty requires. among other things, (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 holders may not exercise such rights without Financial Guaranty's
consent. in each case so long as Financial Guaranty has not failed to comply with its payment
obligations under its insurance policy; and (ii) that any amendment or supplement to or other
modification afthe principal legal documents be subject to Financial Guaranty's consent. The specific
rights, if any, granted to Financial Guaranty in connection with its insurance of the Bonds are set forth
in the description of the principal legal documents appearing elsewhere in this Official Statement.
Reference should be made as well to such description for a discussion of the circumstances, ifany,
under which the Issuer is required to provide additional or substitute credit enhancement, and related
matters. '
This Oflicia] Statement contains a section regarding the ratings assigned to the Bonds and
references should be made to such section for a discussion of such ratings and the basis for their
assignment to the Bonds, Reference should be made to the description of the Issuer for a discussion
of the ratings, ifany, assigned to such entity's outstanding parity debt that is not secured by credit
enhancement.
The Policy is not covered by the Property/Casualty Insurance Security Fund specified in
Article 76 of the New York Insurance Law or by the Florida Insurance Guaranty Association (Florida
Insurance Code, ~~631.50 et seq.). '
Financial Guaranty is a wholly-owned subsidiary of FOIC Corporation (the "Corporation"),
a Delaware holding company. The Corporation is a subsidiary of Genera] Electric Capital
Corporation eGE Capital"), Neither the Corporation nor GE Capital is obligated to pay the debts
of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial guaranty
insurer domiciled in the State of New York and subject to regulation by the State of New York
Insurance Department. As of June 30, 1998; the total capital and surplus ofFinancia] Guaranty was
$1,282,692,798. Financia] Guaranty prepares financial statements on the basis of both statutory
accounting principles and generally accepted accounting principles, Copies of such financial
statements may be obtained by writing to Financial Guaranty at 115 Broadway. New York, New,
York 10006, Attention: Communications Department (telephone number: (212) 312-3000) or to
the New York State Insurance Department at 25 Beaver Street. New York. New York 10004-23 ]9.
Attention: Financia] Condition Property/Casualty Bureau (telephone number: (212) 480-5187).
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Fiscal Year, :
'Ending'
September lQ 'earity Bonds
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1999
200,0
.2001
, 2002
" '2003
,,2004 .
2005
2006
2007
2008
2009 '
2010
2011.
,20]2
2013
2014
20]5 '
,,2016 '
2017 '
2018
,2019
Totals
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6,284,015
6,286,402
'6,278,690
6,282,880
6,288;170
, 6,294,545
'5,669,735 :
298,950,
296,112
297,863
294,200
299,988 '
304,950
29'9,362
, 303,094
305.859
302.922
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': 304.797
304,469
303.297
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DEBT SERVICE REQUIREMENTS
Series] 998 Bonds
;~incipallnterest ' . Totat
Parity and
Series 1998
, BOIids Total
Debt Service
, Requirements
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SOURCES AND USES OF FUNDS
SOURCES
Principal Amount of Series 1998 Bonds
Original Issue Discount '
Accrued Interest
Other Available Funds of the Cityll)
Total Sources
$49,000.000
USES
Deposit to Escrow Account
Deposit to Interest Account
Costs of Issuance including Underwriter's
Discount and Bond Insurance Premium
Total Uses
,( I) Includes $ to be rclcnscd from the Refunded Bonds debt service funds and $
Reserve Account 'lith respect to the Refunded Bonds.
to be released from the
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4'f:'}"
THE WATER AND SEWER SYSTEM
Water System
Water Supply. Water supply for the area served by the System is currently, derived from'
existing City well fields and by the purchase of water from Pinellas County. The City has a bulk water
purchase agreement with Pinellas County that supplies up to 80 percent of the service area's water
needs on an as needed basis. The City currently has fifteen (15) production wells scattered
throughout the selVice area. each equipped with automatic control systems, The City water system
and the Pinellas County water system are interconnected at seven (7) locations.
Under the City's contract with Pinellas County, Pinctlas County agrees to supply the City with
sufficient water for the designated service area. based on a formula set forth therein. and the City
agrees to purchaRe a minimum of 1,460,000,000 gallons of water from Pinellas County within each
calendar year. The current contract'rate is approximately $1.79 per thousand gallons. The rate is set
by the Board of County Commissioners and is based on a prorated share of revenue cost requirements
of the Pinellas County water system including production and transmission costs required for the
, supply of water to the Pinellas County water users. Pinellas County obtains approximately 70 million
gallons per day or 100% of its water supply from Tampa Bay Water. a Regional Water Supply
Authority C'Tampa Bay Water") (the successor to West Coast Regional Water Supply Authority).
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'~>',.. '~,};'i}:f:::'L::"":"?:;:'J,:,/':;;~:'}:(:~'{;\:':!i;:''";~;;!"/'~i;'.i:',:',lS,,, :'..... ,:"~',,>'}i '.,,',; ,":" "", :,"', , ',' ", '
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...:+.'.t...L>....~ "> ..... /!",tc' ~t ,- I' <l ,',';> ...t..c".~""'.~j~1-~:., 0'-.:,":. .,.1.. . ,j:'I.'
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It is entitled under contract to obtain 100% of its water needs per day from Tampa Bay Water. The
,....., City currently acquires approximately 10.4 million gallons per day from Pinellas County,
, The City's water distribution system consists of approximately 515 miles of water mains
ranging up to 20 inches in diameter. The distribution system contains numerous interconnections
between piping, making larger size mains unnecessary for existing flow conditions. City water
storage within the distribution system consists of a series of ground-level water storage pumping
systems and elevated tank water storage. The City currently has four 5-million gallon ground-level
water storage reservoirs and three I-million gallon elevated water storage tanks, The City's elevated
storage tanks are all steel vessels designed to ride on the distribution system, They provide immediate
response to pressure and flow demands in the local areas.
"
Raw water within the City of Clearwater has historically been of adequate quality to meet
,minimum 'regulatory requirements and has received treatment only in the form of disinfection via
chlorination with a limited amount of aeration for sulfide control. Additional treatment has been
added in the form of corrosion control (polyphosphate). This type of treatment to date has been
compatible with the quality of bulk water purchased from the County. Continual use of the City's
wells has led to increasing mineralization of the City supply, but there has been no danger to public
health.
The following chart shows the average daily water flow on an annualized basis over the past
ten years.
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Source and Volume of Water Pumped*
..EY..
City Wells
County
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
9,6'14
10. 146
11. 851
12.472
11. 169
,
12.890
10.025
9.456
11. 024
10.901
10.412
6,058
5,893
4.345
3.272
2.872
2.338
3.856
3.467
3.810
3.528
3.448
.Figures Sh0\\11 arc million gallons per day, averuged over the Fiscal Year.
Th1al
15.672
16.039
16.196
15.744
14.041
15.228
13.881
12.923
14,834
14.429
13.860
The number of customers served by the water system has steadily increased over the past
years. Table I illustrates ,the growth in number of customers over the past ten years.
Q
17
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Historical Growth in Number ofWnter Customers'"
,~
Year
Water Customers
mr
Water Customers
1998
1997
1996
1995
1994
38,440
38,294
38,546
38,278
38,173
1993
1992
1991
1990
1989
37,996
37,852
37,771
36,766
36,517
"'All figures ore os ofScplcmbcr oflhe year indicnlcd,
The ten largest water customers and their 1997 water use including water revenues received
are shown in Table II as follows:
Ten Largest Water Customers
Fiscal Year Ending September 30, 1997
Name of User
Water Used
(in 100 Cubic Feet)
Revenues
Produced
.~'
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. 1. Morton Plant Hospital
2. Mission Hills Condominium Association
3. Lane Clearwater Ltd. partnership
4. Double Tree Resort - Surfside
5. Church of Scientology
6. Bay Winds Ltd. Partnership
7. 880 Mandalay Apartments
8. Friendly Village of Kapok Mobile Home Park
9. Baptist Estates ofFloridai
10. HBE Florida Corporation
62,167
40,062
37,830
36,560
36,209
35,039 '
29,541
27.613
26.381
25.830
$123,400
95.350
85,100
69,470
65.540
76,390
59,970
66,270
51, 180
52.176
Total
357,232
$744.846
Source: Cily ofClcarwolcr
Sewer System
The City1s sanitary sewage collection system is composed of slightly more than 321 miles of
connector mains, utilizing 79 lift stations. Three treatment plants with a combined design capacity
of28.5 mgd (million gallons per day) are on line and operational. These three plants are the Marshall
Street Facility, the Northeast Facility and the East Facility.
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The wastewater pollution control plants, Marshall Street, constructed in the 1950ts, East,
constructed in the 1960's and Northeast, constructed in the 1970's, have been expanded several times
to their current design capacities often million, five million and thirteen and oneMhalfmillion gallons
per day respectively. All three plants utilize Advanced Wastewater Treatment processes. Their
current systems include nitrogen and phosphorous removal, anaerobic digestion, sludge thickening
and provide highly treated reclaimed water for private, commercial and municipal use. The Marshall
Street and Northeast plants also provide for sludge dewatering.
The Northeast Biosolids Management Facility was constructed in 1994. It is designed to
process thirtYRthree dry tons per day of sludge that meets EP A and Florida Department of
Environmental Protection sludge criteria. '
The following chart shows the' average daily sewage flow on an, annualized basis over the last
eight years.
Average Sewage Flow
Fiscal Year'
Annual Avg. Daily Flow
In MGD
~}
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
15.6
13.7
14.7
15.2
15.6
15.8
15.2
14.7
16.1
15.8
14,9
The number of customers served by the sewer system has steadily increased over the past
years. Table III illustrates the growth in number of customers over the past ten years.
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Historical Growth in Number of Sewer Customers III
~
Ym
Sewer Customers
.Ym
Sewer Customer
,/
1998
1997
1996
, '1995
1994
33,174
33,017
32,868
, 32,787
, 32,610
1993
1992
199]
1990
, ]989
32,445
32,373
3] ,854
31,7]4
,31,523
.All figurcs nre liS ofScptcmbcr 30 of the YCllf indiealcd,
,. The ten largest sewer customers and their 1997 water use including sewer revenues received
are shown in Table IV as follows:
, :.
Ten Largest Sewer Customers
Fiscal Year Ending September 30, 1997
Name orUser
Sewer Used
(in ] 00 Cubic Feet)
Revenues
Produced
o
'.
1. Morton Plant Hospital
2. Mission Hills Condominium Association
3. Lane Clearwater Ltd. partnership
4. Doubletree Resort ~ Surfside
5. Church of Scientology
6, 'Bay Winds Ltd. partnership
7. Clearwater Linen & Uniform Supply
8. 880 Mandalay Apartments
. 9. Friendly Village of Kapok Mobile Home Park
10. HBE Florida Corporation
62,167
40,062
37,830
36,560
36,209
35,039
30,583
29,541
27,613
26.381
$146,700
94,550
89,280
86,280
85,450
82,700
72,180
69,720
65,170
62.260
Total
361,985
$854,290
Source: City ofClcnrwutcr
Water and Sewer Capital Improvements
[Information regarding Capital Improvement Program]
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RATES, FEES AND CHARGES '
. The City uses a three-tiered rate structure for water and sewer usage. The base rate includes
a minimum usage for residential and nonresidential water rates. Any usage over the minimum is billed
at one rate per 100 cubic feet up to a designated level and at a second rate for usage over that level.
For irrigation, there is a base rate, with no minimum, and a charge per 100 cubic feet of water usage
up to a designated level and a higher charge for usage over that amount. The sewer base rate'
includes a minimum usage and a fixed charge per 100 cubic feet of water usage over the basic
allowance. The minimum usage and second tier usage level vary with the size of the meters.
21
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'\ October I, October' 1, October !, October ! October J, '
Size of Meter 1994 1995 1996 1997 1998
Sewer Rntes
Minimum ' -- Under 1 inch 9.44 9.44 9,.... 9.44 9.72
-- 1 inch 21.24 21.24 ' 21.24 21.24 21.87
'-- 1.5 hlch ~ 16.24 ' 316,24 316.24 3 r 6.24 325.62
-- 2 inch 733.96 733.96 ' 733.96 733.96 ;55.73
- 3 inch or 2 inch manifold 1,132.80 1,132.80 1,132,,80 ' , 1,132.80 1,166.40
..; 4 inch 2,]80.64 , 2,] 80.64 2, I 80.64 2,180.64 2,245.32
';- () inch' , S,600.2~ 5,600,28 5,600.28 5,600.28 ' 5,766.39
-- 8 inch 9.440.00 9,440.00 9,440,00 ,9,720.00
Per 100 cubic fcClof\\.'3ter used
,', ' ovcr thc allowcd in minimum 2.36 2.36 2.36 2.36 2.43
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(I) Excluding depredntion
(2) Includes the Pnrity Bonds (Series 1993) and the Refunded Bonds (Scries 1988).
(3) Maximum Bond Service Requirement on thc Pority Bonds nnd the Series 199R Bonds, for purposes of comparison, is $7,192,228.
Source: City ofClclllwnter.
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In May, 1998, the City obtained a rate study from Burton & Associates, Jacksonville, Florida (the
"Rate Study"). The Rate Study compared six rate scenarios based upon a five year,$54 million capital
improvements program (nCIpl1) prepared by the utility statT. The summary of the Rate Study concludes:
11 ,Under current circumstances, the System's costs, including the $54 million CIP can be
funded by annual rate increases of 5, 1 % beginning in Fiscal Year 1999, However. sometime
during this period, the City will be unable to continue providing 25% ofits own water supply,
resulting in complete reliance upon Pinellas County. If this occurs in Fiscal Year 2000, rate
increases of6.9% will be required each year. Rates are higher because System costs cannot
be reduced enough to offset the increased cost of water, The City has some control over the
timing of the rate increases. For example, a price index increase could be adopted (about 3%
annually) with additional increases in each year from 2000 through 2002 to "catch-up" the
rates enough to fund the CIP. This results in a 3% increase in 1999 and 2003 with higher
increases in between. II The City Commission has elected the rate option which results in a
3% increase in 1999 and 2003 with higher increases in the years 2000, 200] and 2002.
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;' 2NY;::/;:i;:,,';~';~:;,;,,t;;'~};i: r:r;:;;:: ~i~;;ir.: :>:'" i'&r::s~:,:;;:C: c';;': :,:8:,' ,.;'. ...' ,:',. '..; >" ..:. ,',' '..'
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CIl)' of C.1cllrwllter. .lurldll
'Vater and Se" cr S)'lIlem
Combining Stutcmt'nt of Rc\'cnut" t:xpt'lI,ell and CIIlIII~n In 1{l:'luhlt't1 Ellrnlnj.tll
--.l993 199,1 ~- \91)(. 1997
Operaling Revenues:
S/Jlelllo Cu,tO/llt.'tS S29,781,894 S29,7D',524 S29,905.507 S31,?49,S58 532,209,843
Service Charges to Customers 471.434 ':l4.2~Q 574.2'-1 ---i2:!.2l!l. 517,3R6
Total Opc:raling Revenues 30.253.3'211 30.23?1l0-l 30.479.7(,.1 32,243.5!l6 32.727.229
(}peTlIling ElqlCl1SCs:
l'crtlOflal Scnices 4,706,729 ',213,979 5,'127,711 5,629,251 5,649,949
Purcha.~cs for Resale ',901,265 ',148,591 s.o1l3,444 7,.134,927 7,250,011
Opernting Materillls Ilnd Supplies 1,318,499 I ,4 119,73 0 1,604,O1l9 1,707,665 1,694,244
TrallsPQltation 170,434 237.393 355,373 556,889 490,083
Utility Service 1,168,626 1,"6,712 1,357,336 1,309,745 1,351,587
lkprceilllion J,G05,S7S 3,905,520 4,176,566 4,263.322 4,459,169
Intcrfund Administrative Charges 3,062,307 3.IS3,71l1 3,0~16.{j61l 3,377,170 4,05 I ,540
Other Current Chllfgcs:
Pror~'SlJjonlll Fees 487,894 304,065 299,229 423,135 789,746
Communieations ' 119,145 174,547 112,741 100,345 108,314
Insurance 94,970 RI.940 ' 92,500 15R,620 174,000
Repairs llJ\d Maiutenance 1,690,544 651,163 1l09,649 1,299,076 1,577,711
MiscellllJ\eous 113,976 R6, J.lH 100.938 133,683 130,017
Data PrQCcssing Charni:5 31,140 56,4\ 0 61,3110 87,750 102,890
Provi~jon for Estimllled Uncollectible Accounts 97.131 6O.2Q.J 124.902 93.177 47,511
Tolal Other Cu~t Chlllges 2.635.400 1.414.471 1.571.339 2.29'.7116 2.930.19]
Tolal Operating Expenses 22,'68,ll35 21.7JO,~40 12.672.'26 26.574,755 27,1l76.774
Opl:fating Income (Loss) 7,684.493 1l.50!Ut'i4 7.R01.238 5.6611.RJI 4.11'OA55
Nonoperating Revenues (Expc:nscs);
'/'Ir",) ElUl1in~ on In\'cstments 2,568,860 2,163,268 2,546,805 2,531,740 3,022,703
Inlerest ,Eli.-pcnsc and Fiscal Charges (4,953,043) (4,447,458) (4,894,051 ) (4,9\5,447) (4,937,866)
1~,\,~~ Amortiution of Bond Dis.:ount and Issue Com (I I 1,81l8) (125,372) (124,143) (1\8,958) (112,8116)
Oain Closs) on Exchange of Ao;scts
1..oss~'S from Wriledo\\1U llJ\d Rcplllccmcnts of Fixed As....cts (2,684 ) (854,915) (45,621)
Other IJ8,947 126.00i 31.7211 39.603 66.507
(2.357.124) C2.2K6.214} 0.294,576) (2.50K.6K3) (1.961.542)
Income (loss) lkfol'l: Operating Trallsfc:n: 5,327,36') 6,223,320 4,512,662 3,160,148 2,888,913
Op.:1'lltlng Transfm In
Opc:rati ng Trol.lufm OUt ( 1.143,354) (1.26J,6110) (1.43 1.149) (1.397.435) (1.449,709)
(1.14'\':\54) f1.263,(110) , (1,431.749) (1.397.4:15) CI.449 , 709)
Net Income (Loss) ()cfure Extraordinary JI~'IT\ 4,11l4,015 4,959,640 3,080,9113 1,762,713 1,439,204
ExtraorcJinary Item - J~ 011 Early
Extinguishment orDc:bt (5.145.5;\(')
Net Income: (Loss) (%1,521 ) 4,959,640 3,080,913 1,762,713 1,439,204
RClained Enmin&!, (Delleit), Beginning of Year 41,534,005 40,572,484 45,507,\38 48,5R8,051 50,326,250
Rcsidual Equity Transfers Out (24,986) (24,514) (52.454)
Retained Earnings (Ddicil), End of Yea!" S.W,,72.4H4 $4'.5CJ7,138 5.48.5118.05 I 550.326.250 551.713.000
Source: City ofC1carwntLlr, Comprehensive Annuul Fil1uncitd Repurls for Fiscu1 Years ended September 30, 1993 through 1997,
.;)
, 24
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FINANCIAL STATEMENTS
'1
The combined financial statements and Water and Sewer enterprise fund financial statements
of the City at September 30, 1997 and for the Fiscal Year then ended, appended hereto as Appendix
a, have been excerpted from the financial statements contained in the City's Comprehensive Annual
Financial Reports for the Fiscal Year ending September 30, 1997.
INVESTMENT POLICY OF THE CITY
Pursuant to the requirements of Section 218.45, Florida Statutes, the City adopted a written
investment policy which applies to all funds held by or for the benefit of the City 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 objectives of the investment policy, listed in order in order of importance, are:
1. Safety of principal
2. Provision of sufficient liquidity
3, Optimization of return within the constraints of safety and liquidity
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The investment policy limits the securities eligible for inclusion in the City's portfolio. The
City will attempt to maintain a weighted average maturity of its investments at or below three years;
however, the average maturity ofinvestments 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 all
outstanding securities by class or type, book value, income earned and market value as of the report
date.
Notwithstanding the foregoing, moneys ,held in the funds and accounts established under the
Ordinance may be invested only in Permitted Investments, as described in the Ordinance.
LEGALITY FOR INVESTMENT
The Series 1998 Bonds constitute legal investments in the State of Florida for state, county.
municipal and all other public funds and for banks, savings banks, insurance companies, executors,
administrators, trustees and all other fiduciaries, and also constitute securities eligible as collateral
security for all state, county, municipal and other public funds.
TAX EXEMPTION
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The Internal Revenue Code of 1986, as amended (the HCode") 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. 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 Series J 998 Ordinance to comply with such
requirements in order to maintain the exclusion from federal gross income of the interest on toe Series
1998 Bonds.
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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 Series 1998 Bonds is held by a corporation. The alternative
minimum taxable income of a corporation must be increased by 75% of the excess of such
corporationts adjusted current earnings over its alternative minimum taxable income (before this
adjustment and the alternative tax net operating loss deduction). II Adjusted Current Earningsll 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 J 5% of certain items, induding interest on the Series 1998 Bonds, (iii) 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 S corporations with
Subchapter C earnings and profits at the close of the taxable year, and (v) the inclusion of interest on
the Series ] 998 Bonds in "modified adjusted gross income" by recipients of certain Social Security
and Railroad Retirement benefits for purposes of determining whether such benefits are included in
gross income for federal income tax purposes,
PURCHASE. OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 1998 BONDS
AND THE RECEiPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE,
FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE
'..J
26
9Y,S'/
REGISTERED OWNERS. PROSPECTIVE SERIES 1998 REGISTERED OWNERS SHOULD
''1 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 aflected the market value of obligations similar to the Series 1998 Bonds, From time to time,
legislative proposals are pending which could have an eflect 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. '
Tax Treatment of Original Issue Discount
:,~,;~:\
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Under the Code, the difference between the maturity amount of the Series ] 998 Bonds
maturing in the years through (the "Discount Bonds") and the initial
offering price to the public, excluding bond houses, brokers or similar persons or organizations acting
in the capacity of underwriters or wholesalers, at which price a substantial amount of Series ] 998
Bonds of the same maturity was sold is Itoriginal issue discount. n Original issue discount will accrue
over the term of such Series 1998 Bonds at a constant interest rate compounded periodically. A
purchaser who acquires such Series 1998 Bonds in the initial offering at a price equal to the initial
offering price thereof to the public will be treated as receiving an amount of interest excludable from
gross income for federal income tax purposes equal to the original issue discount accruing during the
period he holds such Series 1998 Bonds, and will increase his adjusted basis in such Series 1998
Bonds by the amount of such accruing discount for purposes of determining taxable gain or loss on
the sale or other disposition of such Series 1998 Bonds, The federal income tax consequences orthe
purchase, ownership and redemption, sale or other disposition orthe Series 1998 Bonds which are
not purchased in the initial offering at the initial offering price may be determined according to rules
which differ from those above, Owners of such Series 1998 Bonds should consult their own tax
advisors with respect to the precise determination for federal income tax purposes of interest accrued
upon sale, redemption or other disposition of Series J 998 Bonds and with respect to the state and
local tax consequences of owning and disposing of such Series 1998 Bonds,
RA TINGS
Standard & Poorls Corporation (" Standard & Poor's") and Moodyls Investors Service, Inc.
("Moody's") are expected to issue their ratings of II AM" and II Aaa, II respectively, with respect to the
Series 1998 Bonds, based on the issuance of the Policy by FGIC. The ratings reflect the view of
Standard & Poor's. and Moody's and any explanation of the significance of such ratings may be
obtained only from Standard & Poor's and Moody's, There is no assurance that such ratings will
remain in effect for any given period of time or that such ratings may not be lowered or withdrawn
entirely by the rating agencies, if in their opinion or judgment, circumstances so warrant. Any
1,'It$)
27
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downward revision or 'withdrawal of the ratings may have an adverse effect on the market pricc and
marketability ofthe Scries 1998 Bonds,
LITIGA TION
In the opinion of the City Attorney there is no litigation now pending or threatened (i) to
restrain or enjoin the issuance or sale of the Series 1998 Bonds or (ii) questioning or affecting the
, validity of the Series 1998 Bonds, the Series 1998 Ordinance or the pledge of the Net Revenues by
the City or the proceedings for the authorization, sale, execution or delivery of the Series 1998
Bonds.
The City is involved in certain litigation and disputes incidental to its operations. Upon the
basis ofinfonnation presently available, the City Attorney believes that there are substantial defenses
to such litigation and disputes and that, in any event, any ultimate liability, in excess of applicable
insurance coverage, resulting therefrom will not materially adversely affect the financial position or
'results of operations of the City.
ADVISORS AND CONSULTANTS
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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 I1Costs of Issuance" under the heading "ESTIMA TED SOURCES
AND USES OF FUNDSIt 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., St. Petersburg,
Florida, as financial advisor (the "Financial Advisorlt) 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 Advisor will 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 be paid from proceeds of the Bonds, and such
payment is contingent upon the issuance of the Bonds.
DMc/osllre 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.
~
28
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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 ] in each year commencing June J. J 998 (the" Annual Report"), and to provide
notices of the occurrence of certain enumerated events, if deemed by the City to be material. The
Annual Report will be filed by the City with each Nationally Recognized Municipal Securities
Information Repository (ItNRMSIRII), 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 - FORM OF CONTINUING DISCLOSURE CERTIFICATE." These covenants
have been made in order to assist the Underwriter in complying with S.E.C. Rule J5c2-12{b)(5), The
City has never failed to comply in all material respects with any previous undertakings with regard
to said Rule to provide annual reports or notices of material events. '
"
ENFORCEABILITY OF REMEDIES
The remedies available to the registered owners of the Series 1998 Bonds upon an event of
default under the Series 1998 Ordinance are in many respects dependent upon judicial actions which
, are often subject to discretion and delay. Under existing constitutional and statutory law and judicial
decisions, including specifically Title II of the United States Code, the remedies specified by the
federal bankruptcy code, the Series 1998 Ordinance and the Series 1998 Bonds may not be readily
available or may be limited, The various legal opinions to be delivered concurrently with the delivery
of the Series 1998 Bonds (including Bond Counsel's approving opinion) will be qualified, as to the
enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization,
insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery,
CERTAIN LEGAL MATTERS
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 approving
opinion will be available at the time of delivery of the Series 1998 Bonds and will be printed on such
Bonds. The proposed fonn of Bond Counsel opinion is attached hereto as Appendix Eand reference
is made to such form of opinion for the complete text thereof. Certain legal matters will be passed
upon for the City by Pamela K. Akin, Esquire, City Attorney and by Nabors, Giblin & Nickerson,
P.A., Tampa, Florida, disclosure counsel to the City.
29
9f. ~ s-f
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.
.
.
VERIFICATION OF ARITHMETICAL COMPUTATIONS
o
The accuracy of (a) the arithmetical computation of the adequacy of the maturing principal
amounts and interest earnings thereon of the Federal Securities deposited under the Escrow
Agreement to pay when due all principal of and interest on the Refunded Bonds and (b) the
arithmetical computation supporting the conclusion that the Series 1998 Bonds arc not "arbitrage
bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, will
bci verified for the City by [Verification Agent], Independent Certified Public Accountants. Such
verification will be based on certain information supplied to [Verification Agent] by the Underwriter.
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Section 517.051, Florida Statutes, and the regulations promulgated thereunder (the
"Disclosure Act") require that the City make a full and fair disclosure of any bonds or other debt
obligations that it has issued or guaranteed and that are or have been in default as to principal or
interest at any time after December 31, 1975 (including bonds or other debt obligations for which it
has served only as a conduit issuer such as industrial development or private activity bonds issued on
behalf of private businesses), The City is not, and has not since December 31, 1975, been in default
as to principal and interest on bonds or other debt obligations for which ad valorem or non-ad
valorem revenues of the City are pledged.
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FINANCIAL ADVISOR
The Financial Advisor for the City is First Union Capital Markets, a division of Wheat First
Securities, Inc., with offices located at III 2nd Avenue N.E., Suite 815, St. Petersburg, Florida
33701, telephone number (813) 898-0411.
UNDERWRITING
The Series 1998 Bonds are being purchased by William R. Hough & Co., A.G. Edwards &
Sons, Inc., Merrill Lynch & Co., Salomon Smith Barney and Raymond James & Associates, Inc. (the
"UnderwritersU). The Underwriters have agreed to purchase the Series] 998 Bonds at an aggregate
. purchase price of$ (net of Underwriters' discount of $ ) plus accrued interest on
the Series 1998 Bonds from the date thereof to the date of delivery. The Bond Purchase Contract
provides that the Underwriters will purchase all the Series ] 998 Bonds if any are purchased, and that
their obligation is subject to the delivery of certain documents at or prior to delivery of the Series
] 998 Banns. The initial public offering prices set forth on the cover page may be changed by the
, Underwriters.
YEAR 2000 COMPUTER COMPATIBILITY
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On January I, 2000, computer systems worldwide will undergo a date transition that may
cause major problems and errors if corrective measures are not taken, The problem arises in those
systems in which either the hardware or software recognize only 2-digit date codes. These codes will
recognize the year 2000 as the year 1900, causing many of the systems to malfunction or fail. Such
malfunctions could include an inability to account for or bill System Revenues,
Computer users have generally undertaken a two phase process to cope with this potential
problem - the first phase being an analysis of the extent to which software or hardware is incompatible
,with year 2000 ("Phase 111) and the second phase being application of software fixes or acquisition
, of new hardware to become year 2000 compatible, The City has completed its Phase 1 review and
has determined which of its systems or software are not year 2000 compatible. Over the last few
years, the City has replaced most of its key computer systems with new hardware and software.
computer vendors have assured the City are year 2000 compatible. The remaining hardware and
software are scheduled to be replaced and new hardware and software placed in service during the'
last quarter of 1999. Accordingly, the City believes that its computer systems are now or will be year
,2000 compatible prior to January I, 2000. The City cannot, and does not. provide any assurance that
vendors, paying agents and other third parties providing services to the City have or are effectively
, dealing with year 2000 issues as the year 2000 approaches. '
MISCELLANEOUS
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The references. excerpts and summaries of all documents referred to herein do not purport
to be complete statements of the provisions of such documents, and reference is directed to a11 such
documents for fbll and complete statements of all matters of fact relating to the Series 1998 Bonds.
the security for the payment of the Series 1998 Bonds, and the rights and obligations of holders
ilie~o[ ,
The information contained in this Official Statement involving matters of opinion or of
estimates, whether or not so expressly stated. are set forth as such and nbt as representations of fact.
and no represeritation is made that any of the estimates will be realized. Neither this Official
Statement nor any statement which may have been made verbally or in writing is to be construed as
a contract with the holders of the Series 1998 Bonds. '
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. The execution and delivery of this Official Statement by its Mayor and its' Gity Manager has
been duly'authorized by the City Commission.
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,; CITY OF CLEARWATER, FLORIDA
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Rita Garvey, Mayor and Commissioner
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Michael 1. Roberto, City Manager"
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PRf."/./MINARI' OFFICIAl. STtlTEMHST nil TIm SOJ'HMllHR ,1998
iSf:W ISSUE - FUI.I. nOOK-ENTRY
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In Ihl! opinion of Bond COlfllSCl, assumillR comlllui"R complfmlce by IIII! Cily willt various cOl'I!mmls IlIlltc Serie.f 199R Orellllllllce, IlI/der exiMing
slall/IL's, n'gll/oliOlU andjlldlda/ dec/sfe)l1s, Ihe in/en:s/ on/hL' Series /99.'/ Bondv will he e'xc/m/edfrolll gross iI/come for ff!dercrf in CO/Ill: lax pllrpo.ves 10 IIIl!
ol17wr.flllcrcnj 71/f: Series )998 BOllds a1'l!, IUlder exlsllng fail's alld rrgufatiollS, af,~o exempl from inlclngibll' la.n:s imposl'J pl4rsuatlllO Clmpll'r 199, Florida
Slahlfl's, See 'Ta:c E:remplfotl" Ite1'l!illfor it dr-Script/OIl of allenm/n>e milllmllm leu: Ircarmelll and cerlalll otlter lay comeqm:llcl's to owners of Ihe Seril's 1998
BOllds.
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CITY OF CLEARWATER, FLORIDA
'Vatel' and Sewer Refundin~ Revenue Bonds
Series 1998"'
Dated: CUfrenllnterest Bearing Bonds - No\'cmbcr I, 1998
Capital Apprel:il1tion Bonds - Date of Issue
Due: Dc:cember I, os shO\\n below
The Water lUld Sewer Refunding Reven\lc Bonds. Series 1998 (the "Series 1998 Bonds") of Ihe City of Cteanvaler, Florida (Ihe "Cily") arc being
i~cd in fully registcred fOI1l1 and. when initinlly i!\SUed, nill be regislen:d to Cede & Co" as nominee ofThe Deposilory Trust ComplUlY. New York, New York,
First Union Nlltiooul. Bllllk. Jacksonville, Florida, is aeling liS the Pllying ^gent llnd Bond Registmr for the Serie!! 1998 Bonds. The Series 1998 Donus will be
purehnsed in book-entry fonn only, in the denomination ofSS,OOO or any integral multiple thereof, There will be no physical delivery of bond certilil:ntes 10
indi\idunl Bondholders, (nterest 0/1 the Current Interest Benrinp. Series 199800nd5 will be Pll)'llble scmi-annually bel!inning on June I, 1999 and on each June
1 and J:kccmlx:r I thcrcnfter, Principalnnd Maturity Amounl of and premium, if any. on the Series 1998 Bonds wiff be paynble al maturity or upon redemption
prior to maturity.
Till,' Sede~ 1998 Bonds are ,ubject to redempllon prior Co maturity as described herein.
11le Series 1998 Boods arc bdng issued for the purpo~ of (i) making funds Il\'llilablc \\;Ih which to advlUlce refund the Series 1988 Bonds heretofore
issued by the Cily (ns further deseribed herein) aud (ii) paying certuin 1:0515 of issullllce of the Series 1998 Bonds, induding Ihe municipal bond insumnce
premium.
The scheduled payment of principal of. Malurily AmounllUld inleresl on lhe Series 1998 B01IUS will be insured by a municipal bond insurance policy
to be issued simullaneously \\;Ih tho delivery of the Bonus by Financial Guaranty Insurance Company us described herein. For a discussion of the lerms and
provisions of such policy, Including the Iimitlltions thereof, see "MUNICIPAL DOND INSURANCE" herein,
[FGlC 1.000J
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The Series 1998 Bonds and the inleresllhereon are payable solely from the Net Revl:nues derived from Ihe operation oCthe City's Wilier nnd seWer
syslem, as furthcrdescnbcd herein. The lien of the Series 1998 BOllds on the Net Revenues is on II pllrit}' with Ihe holders of Ihe City's Outstanding Wilier nnd
Sewer Revenue Bonds, Series 1993, as further described herein.
Nejthcr thc Seri~ J998 Dond'Hlor the JlIlerest tbereon cOIutllUte 'ullellcrlll obUfllltlll1l or Jndebtednen of the City wllhinthe mCllnlnlluf an,)'
constitutional, statutory ur charter prmidon or limitation. 1':0 oWllcr or ownen of IIny Series 1998 Bonds shall e\'er hll"\! the ri~hl tll compellhe
eJl.udse of che ad \'lIloreln Cllllng puwer of the Cit)', ur Ilny other taxing Iwwer In an)' form 011 nny real or per:'lonlll propcrt)' of Ihe CIl)" CO pay the
SerlC!l1998 Bonds or the inCerest thereon, The ell)' shllll not be obllgaCed to pay the Series 1998 Honds tlr Any interesC thereou except from Ihe Net
Re\'enues, in che manner pru\'lded In the Scrie~ 1998 Ordinance referred to herein.
MATURITY scmmuu:
(Accrued Inlerc!llto he added)
Tlte Series J 998 BOllds are offeredfor delivery wlll!n, as and if IS.l'Iwd by 1111: C11}' (11111 rl!ce.wd by Ihe Uncll!MI'riler,\', .""'.ieclto till' I'pprol'"f '1
legality byBryalll, Miller and OIlV/:, PA., Tallahassee, Florida, lJundCormsd, Cerlain legltl m,lIfl!rs eJr(' ndtlg peu.wd'If/11IJjilr lIlt' CII)' by PCllm'11I A', ,IMII,
Esq,. City,lllor7u,'}' (Slid by Nabors. GiM.n & Nicker.felll, PA.. Tampq, Florida, di.lclos/lre cO/lnsel. 11 i,f e.ypecll!d /1/11//111: Sail'S J lJ9,'i IJoml,f III ntlllk'l'IIIry-on(l'
form 11'1/1 he availablefor dl'livery ill New York, Nell' York 01/ orabDuI November 24, 1998.
William R. Hough & Co.
A.G. Edwards & Sons, Inc.
Salomon Smith Barney
Merrill Lynch & Co.
Raymond James & Associates, Jile.
,\,~.)
This Officiol SIUlcmeut is dllled
.Prclim1li'iifY.S"ubjecf iOChangc,
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CONTINUING DISCLOSURE CERTIFICATE
")
This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered
by the City of Clearwater, Florida (the ttlssuer") in connection with the issuance of its $49,000,000
Water and Sewer System Refunding Revenue Bonds, Series 1998 (the "Series 1998 Bonds"), The
Series 1998 Bonds are being issued pursuant to Ordinance No. 3674~84 enacted by the City on
August 2, 1984, as amended and supplemented (the "Original Ordinance") and Ordinance No. 6311-
98 cnactcd by the City on November 5, 1998, as amended and supplemented (the "Series 1998
Ordinance") (collectively the Original Ordinance and the 1998 Ordinance arc referred to as the
"Ordinancelf). 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 ) 998
Bondholders and in order to assist the original underwriters of the Series 1998 Bonds in complying
with Rule 15c2-12(b)(S) promulgated by the Securities and Exchange Commission ("SEC') pursuant
to the Securities Exchange Act of 1934 (the "Rule'}
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SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise
provided herein, the Issuer shaH provide to all of the nationatly recognized municipal securities
infonnation repositories described in Section 4 hereof (the "NRMSIRs"), and to any state information
depository that is established within the State of Florida (the "SIDH), on or before June 30 of each
year, commencing June 30, 1999, 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 sllch 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 ItCAFR"), 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 arc not completed prior to April 30 cfany 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 ) 998 Bonds (as amended, the "Official
Statement"), as set forth below:
] . Updates of the historical financial information set forth in the Oflicial
Statement under the principal captions "THE WATER AND SEWER SYSTEM" and
liRA TES, FEES AND CHARGES" for the then-immediately preceding five fiscal years.
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2. Description of any additional indebtedness payable, in whole or in part from
the Net Revenues (as defined in the Ordinance).
.3, Any other financial information or operating data of the type included in the
Official Statement which would be material to a holder or prospective holders of the Series
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 shall provide
to the NRMSIRs or the Municipal Securities Rulemaking Board (the "MSRB It) 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)
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 reflectillg 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;
(G) Modifications to rights of Series 1998 Bondholders~
(H) Redemptions~
(1) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the Series 1998
Bonds;
(K) Rating changes; and
(L) Notice of any failure on the part of the Issuer or any other Obligated Person (as
defined herein) to meet the requirements of Section 2 hereof.
J"..
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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 undel1ake to commit to provide any such additional notice of the occurrence of any
mate~al event except those events listed above. ,
, Whenever the Issuer obtains knowledge of the occurrence ofa 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, 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:
, (A) Bloomberg Municipal Repositories
P.O. Box 840
Princeton, New Jersey 08542-0840
Phone: 609/279-3200
Fax:, 609/279-5962
Email: munis@bloomberg.com
c)
,
(B) Thomson NRMSIR
Attn: Municipal Disclosure
395 Hudson Street, 3rd Floor
New York, New York 10014
Phone: 212/807-5001
800/689-8466
Fax: 212/989.2078
. Email: .Disc1osure@muller.com
,(C) Kenny Information Systems, Inc.
65 Broadway, ] 6th Floor
,New York, New York 10006
Attn: Kenny Repository Service
Phone: 212/770-4595
Fax: 212/797-7994
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(D) . ope Data Inc.
One Executive Drive
Fort Lee, New Jersey 07024
Phone: 201/346-070 I
Fax: 201/947-0107
Email: NRMSIR@dpcdata.com
I (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 calling the SEe's Fax on Demand Service at 2021942-8088 and requesting
document number 0206.
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SECTION 5. NO EVENT OF DEFAVL T. 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
pursuing an action for mandamus or specific perfommnce, as applicable, by court order, to cause the
Issuer to comply with its obligations hereunder. For purposes of this Disclosure Certificate, "Series
1998 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Series 1998 Bonds (including persons
holding Series 1998 Bonds through nominees, depositories or other intermediaries), or (8) 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, ifany, 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. DISSEMINATION AGENTS. The Issuer may, from time to time;
appoint or engage a dissemination agent to assist it in carrying out its obligations under this
Disclosure Certificate, and may discharge any such agent, with or without appointing a successor
disseminating agent.
SECTION 8. TERMINATION. The Issuer's obligations under this Disclosure
Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all
of the Series 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
y
4
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waivcdt if such amendment or waiver is supported by an opinion of counsel that is nationally
recognized in the area offederal securities lawst to the effect that such amendment or waiver would
nott in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver
had been effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule.
!:-..:
SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure
Certificate shall be deemed to prevent the Issuer from disseminating any other informationt 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 ofa 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.
: .1,
"
SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuert
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.
,::'0
Dated as o~Noveinber 1, 1998
ATTEST:
CITY ,OF CLEARWATER, FLORIDA
By:
City Clerk
Mayor
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A GE Capital Coolpany
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.FGIC.
Conunitnlcnt
For NlmllcipaJ Bond Inslu'illlCC
Issuer: City of Clearwater, Florida
Date of Commitment: October 8. 1998
Expiration Date: December 8. 1998-
Bonds Insured: Not to exceed $49,000,000 in
principal amount of Water and Sewer Refunding
Revenue Bonds, Series 1998
Premium: .159% of total debt service on the
Bonds Insured"
FINANCIAL GUARANTY INSURANCE COMPANY
("Financial Guaranty")
(j
A Stock Insurance Company
hereby commits to issue a Municipal Bond New Issue Insurance Policy (the "Policy"). in the
form attached hereto as Exhibit At relating to the above-described debt obligations (the
"Bonds"). subject to the terms and conditions contained herein or added hereto,
To keep this Commitment in effect after the Expiration Date set forth above. a request for
renewal must be submitted to Financial Guaranty prior to such Expiration Date. Financial
Guaranty reserves the right to refuse wholly or in part to grant a renewal.
THE MUNICIPAL BOND NEW ISSUE INSURANCE POLICY SHALL BE ISSUED IF
THE FOLLOWING CONDITIONS ARE SATISFIED:
1. The documents to be executed and delivered in connection with the issuance and sale of
the Bonds shall not contain any untrue or misleading statement of a material fact and
shall not fail to state a material fact necessary in order to make the information contained
therein not misleading,
Subject to written acceptance of [his Commitment being furnished to Financial Guaranty
by the earlier of the date on which the disclosure document relating to the Bonds is
circulated and Octcber 15, 1998.
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The amount of Bond proceeds deposited With the Trustee or Paying Agent at closing for
the payment of accrued interest shaH not be applied as a credit in calculating total debt
service on the Bonds lnsured.
18'~51
EX, D
Page 1 of5
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2, No event shaH occur which would permit any purchaser of the Bonds, otherwise
required, not to be required to purchase the Bonds on the date scheduled for the issuance
and delivery thereof.
3. ll1ere shall be no material change in or affecting the Bonds (including, without
limitation, the security for the Bonds) or the financing documents or the official
statement (or any similar disclosure documents) to be executed and delivered in
connection with the issuance and saJe of the Bonds from the descriptions or forms
thereof approved by Financial Guaranty,
4. The Bonds shall contain no reference to Financial Guaranty, the Policy or the municipal
bond insurance evidenced thereby except as may be approved by Financial Guaranty.
5. Financial Guaranty shall be provided with the following:
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(a) (i) Executed copies of all financing documents, the official statement (or any
similar disclosure document), and all Bond documentation evidencing the
Issuer's ability and intent to comply with the Internal Revenue Code of 1986, as
amended (if in the opinion of bond counsel (described below) ongoing
compliance would be necessary to maintain the exemption from federal income
taxation of interest on the Bonds), which shall be in form and substance
acceptable to Financial Guaranty; (ii) the various legal opinions delivered in
connection with the issuance and sale of the Bonds, including, without limitation,
, the unqualified approving opinion of bond counsel rendered by a law firm
acceptable to Financial Guaranty and addressed to (or with a reliance letter
addressed to) Financial Guaranty, which opinion shall include a statement to the
.., ''', effect that the interest on the Bonds is excludable from gross income of the
holders thereof for federal income tax purposes under the Internal Revenue Code
of 1986, as amended (if the Bonds are issued as tax-exempt obligations); and
(iii) opinion(s) of counsel, addressed to and in form and substance satisfactory to
Financial Guaranty, as to the due authorization, validity and enforceability of all
financing and bond documentation. Copies of all drafts of such documents and
legal opinions (blacklined as appropriate) prepared subsequent to the date of this
Commitment shall be furnished to Financial Guaranty, Final drafts of such
documents shaH be provided to Financial Guaranty at least five (5) business days
prior to the issuance of the Policy unless Financial Guaranty shall approve a
shorter period and such documents shall be satisfactory to Financial Guaranty in
all respects.
(b) Evidence of wire transfer in federal funds in an amount equal to the insurance
premium, unless alternative arrangements for the payment of the premium
acceptable to Financial Guaranty have been made prior to the delivery date of the
Bonds,
(c)
On or prior to the date of delivery of the Policy, Financial Guaranty shall receive
a letter from bond counsel staring that all requirements of Exhibit D to this
Commitment have been satisfied and incorporated into the appropriate bond
, documents.
v
Page 2 of 5
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6. All drafts of the preliminmy official statement, official statement or any other disclosure
documents and the form of the Bonds should be directed to the attention of Sonia Leon-
Williamson (212-312-3282) at Financial Guaranty for approval. All other
documentation and any inquiries concerning this Commitment should be directed to
Harvey M. Zachem (212-312-3393), the Financial Guaranty analyst assigned to this
transaction, '
7. AU authorizing documents shall be subject to Financial GuarantY's review and approval
and shall incorporate all of the, terms and conditions set forth in Exhibit D hereto, all of
which provisions may, at bond counsel's election, be incorporated into one article of, or
as an exhibit to, the appropriate authorizing documents, or may be incorporated into the
appropriate specific sections of the appropriate authorizing documents.
8. The following refunding conditions shall apply:
(a)
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(b)
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Page 3 of 5
The Escrow Agreement (the "Escrow Agreement") providing for the refunding
of the bonds to be refunded with the proceeds of the Bonds (the "Prior Bonds")
shall permit the deposit solely of cash, direct non-callable obligations of the
United States of America and securities fully and unconditionally guaranteed as
to the timely payment of principal and interest by the United States of America,
to which direct obligation or guarantee the full faith and credit of the United
States of America has been pledged, Refcorp interest strips, CATS, TIGRS,
STRPS, or defeased municipal bonds rated AAA by S&P or Aaa by Moody's
(or any combination thereof) ("Direct Obligations") and shall permit substitution
of Direct Obligations for other Direct Obligations solely upon the receipt by the
escrow agent of (i) ,a new verification of the sufficiency of the escrowed
securities (assuming' such substitution has been mad~) to provide for the
payment of the Prior Bonds in accordance with the terms of the escrow
agreement and (ii) an opinion of bond cOWlsel to the effect that such substitution
shall not affect the tax-exempt status of interest on the Prior Bonds or the Bonds,
Modification of the Escrow Agreement shall not be permitted unless the holders
oEall of the Prior Bonds consent to such modification.
At least five business days prior to the proposed date for delivery of the Policy,
Financial Guaranty shall receive for its review and approval (i) the verification by
independent cerrified public accountants satisfactory to Financial Guaranty of the
accuracy of the mathematical computation of the adequacy of the escrow
established to provide for the payment of the Prior Bonds in accordance with the
terms and provisions of the Escrow Agreement, (ii) as applicable, copies of the
subscription forms for the purchase and issue of U.S. Treasury Securities - State
and Local Government Series which have been stamped as received by the
Federal Reserve Bank or copies of the confirmations of purchase of open market
Direct Obligations, and (iii) the form of W1 opinion of bond counsel addressed to
Financial Guaranty (or a reliance letter relating thereto) to the effect that, upon
the making of the required deposit to the escrow, the legal defeasance of the
Prior Bonds shaH have occurred. An executed copy of such opinion shall be
forwarded to Financial Guaranty, together with the documentation requested by
Condition 5 hereof.
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(e) The Escrow Agreement may provide that cash rcceived by the escrow agent not
required for purchase of the initial investments that arc referenced in the
verification repon may be invested. in accordance with an opinion of bond
counsel as described in Condition (a)(ii) abovc, by the escrow agent, but only in
noncaJlable Direct Obligations that mature in an amount at least equal to the
purchase price of such Direct Obligations prior to the next scheduled interest
payment date for the Prior Bonds. The escrow agent shaJI be responsible for
deterniining compliance with this requirement.
(d) A forward supply contract relating to the provision of such investments which is
acceptable to Financial Guaranty may be entered into at closing if (i) the terms
thereof are consistent with the foregoing requirements, (ii) the Escrow
Agreement provides that in the event of any discrepancy or difference between
the terms of the forward supply contract and the Escrow Agreement, the terms
of the Escrow Agreement shall be controlling, and (iii) the verification report
shall expressly state that the adequacy of the escrow to accomplish the refunding,
, project relies solely on the ihitial escrowed investments and the maturing
principal thereof and interest income thereon and does not assume performance
under or compliance with the forward supply contract.
9.
TIle Bonds shall bear a Statement of Insurance in the form attached hereto as Exhibit B.
BOND PROOFS SHALL BE APPROVED BY FINANCIAL GUARANTY PRIOR
TO PRINTING.
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1 O. The preliminary official statement and the official statement shall (a) be satisfactory in
fonn and substance to Financial Guaranty and (b) shaJI contain the language attached
hereto as Exhibit C and only such other references to Financial Guaranty as we shall
supply or approve,
11. Promptly .after the closing of the Bonds, Financial Guaranty shall receive three
completed sets of executed documents (one riginal and two photocopies), copies of
which we will deliver to e.ch .genting I: tS' /_'
. / cn- (). 1.1jV\--11
Howard J. Cure
Senior Analyst
o
Page 4 of 5
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To' keep this commitment in' effect' to the Expiration Date set forth on the first page. Financial
Guw'ant}r must receive a dtiplicate'ofthis Commitment executed by an appropriate officer,ofthe
Issuer by the earlier of the date on which the disclosure document relnting to the Bonds is
. circulated and October 15, 1998., '
. . ' .
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rhe undersigned agrees that if the Bonds are insured by a policY of municipal bond insurance,
such insurance shall be provided by Financial Guaranty in accordance with the terms of this
Cominitment. . ,
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Accepted as of
. 1998 by the City of Clearwater, Florida.
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Financial Guaranty Insurance
Company
liS Broadway
New York, NY 10006
(212) 312-3000
(800) 352-0001
Exhibit A
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FGIC.
A GEE Capital Company
Municipal Bond
New Issue Insurance Policy
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Issuer: Policy Number:
.. ~ber' 0010001
Bonds: ~ V
Fioooeial Oooranty Insnmoce Company ("Fin..,f,.G..~..). a Ne.v York stock insurance company, in
consideration of the payment of the pre~~t to the tenns of this Policy, hereby unconditionally
and irrevocably agrees to pay to State St nk and Trust Company, N.A" or its successor, as its agent (the
"Fiscal Agent"), for the benefit of Bon ders. that portion of the principal and interest on the above-
described debt obligations (the "Bonds") which shall become Due for Payment but shall be unpaid by reason of
Nonpayment by the Issuer,
,Financial Guaranty will make such payments to the Fiscal Agent on the date such principal or interest
becomes Due for Payment or on the Business Day next following the day on which Financial Guaranty shall
have received Notice of Nonpayment. whichever is later. The Fiscal Agent will disburse to the Bondholder the
face amount of principal and interest which is then Due for Payment but is unpaid by reason of Nonpayment
by the Issuer but only upon receipt by the Fiscal Agent. in fonn reasonably satisfactory to it. of (i) evidence of
the Bondholder's right to receive payment of the principal or interest Due for Payment and (ii) evidence.
including any appropriate inslnuncnts of assignment. that all of the Bondholder's rights to payment of such
principal or interest Due for Payment shalllhereupon vesl in Financial Guaranty. Upon such disbursement.
Financial Guaranty shall become the owner of the Bond. appurtenant coupon or right to payment of principal
or interest on such Bond and shall be fully subrogated to all of the Bondholder's rights thereunder, including
the Bondholder's right to payment thereof.
This Policy is non-cancellable for any reason. The premium on this Policy is not refundable for any reason,
including the payment of the Bonds prior to their maturily. This Policy does not insure against loss of any
prepayment premium which may at any time be payable with respect to any Bond.
As used herein, the tenll "Bondholder" means, as to a particular Bond, the person other than the Issuer who, at
the time of Nonpayment. is entitled under the tenns of such Bond to payment thereof. "Due for Payment"
means, when referring to the principal of a Bond, the stated maturity date thereof or the date on which the
same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date
on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption),
acceleration or other advnncement of maturity and mcans. when referring Lo interest on a Bond, the stated date
~
FGIC i~ n re!!:i~ered Sl.'r\'ice mnrk lI~cd hv Finntlcinl CiunrnrllV rn~lIr11nce Cnr.!![l:lnV IIl\llcl' liccn~e Ii-om lis pnrcnt comp;\nY, rOle COlPOrntiotl,
Fom\ 9000 (10/93) I'nge t 01'2
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Financial Gunranty,lnsurnnce
Company
115 Broadway
New York, NY 10006
(212) 312~3000
(800) 352.QOO 1
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FGIC.
A GEE Capital Company
Municipal Bond
New Issue Insurance Policy
~
for payment of interest. "Nonpayment" in respect of a Bond means the failure of the Issuer 10 have provided
sufficient funds to the paying agent for payment in full of all principal d interest Due for Payment on such
Bond. uNotice" means telephonic or telegraphic notice. 5ubsequen lcd in writing, or written notice by
registered or certified mail, from u Bondholder or a p~yin a r 1e Bonds to Financial Guaranty.
"Business Day" means any day other than a Saturday, Su on which the Fiscal Agent is authorized
by law to remain closed.
us Policy to be affixed with its corporate seal and to be
Ie t become effective and binding upon Financial Guaranty by
rized representative.
In Witness Whereof, Financial Guaranty
signed by its duly authorized officer in
virtue of the countersignature of its duly
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President
Effective Date~
Authorized Representative
State Street Bank and Trust Company, N.A.. acknowledges that it has agreed to pcrform the duties of Fiscal
Agent under this POlicy.
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FGIC is n n!~is1ered service mArk u~ed hv FinnnciAI OUAranl\' lnsurnncll COl11l1l1ny under IicClt~e Imnl il~~l1renl COnll1:InV, FOIe COfTlOrlIlion.
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Financial Guarant). Insurance
Company
115 Broadway
New York. NY 10006
(212) 312-3000
(800) 352-0001
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FGIC.
A GEE Capital Company
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
0010001
It is further understood Ulalthe tcnn "Nonpaymcnt" in r ond includcs any payment of principal or
interest made to a Bondholder by or on behalf of ISSU r such Bond which has been recovered from such
Bondholder pursuant to the United States B de by a trustee in bankruptcy in accordance ,\ith a
final. nonappealabJe order of a court hay' jurisdiction.
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NOTHING HEREIN SHALL BE CONS D TO WAIVE, ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE POLlCY. IF FOUND CONTRARY TO THE POLICY LANGUAGE,
TIlE TERMS OF THIS ENDORSEMENT SUPERSEDE TIlE POLICY LANGUAGE,
In Witness Whereof, Financial Guaranty has caused this Endorsement to be affixcd with its corporate seal and
to be signed by its duly authorized officer in fhcsimilc to become cffective and binding upon Financial
Guaranty by virtue of the countersignature of its duly authorized representative.
Presidcnt
Effective Dnte:
Authorized Representative
AcltDOWlcdgcd as of the Effccth'c Datc written aho\'c:
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State Street Bank nnd Trost Com pun)', N.A., as Fiscal Agent
FGIC il n r~l!;istered ~jce mnrk u~d hv Fhmncinl Ounrnnlv Insurance COnlllRny under Iicen\c 11'001 ill pnrenl COmrlllnv, FmC~Co",orntion,
Form E-0002 (10/93) Page I of!
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Financial Guaranty Insumncc
Company
liS Broadway
New York. NY 10006
(212) 312.3000
(800) 3S2~OOI
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FGIC.
A GEE Capital Company
Endorsement
To Financial Guaranty Insurance Company
Insuran'ce Policy
Policy Number:
Control Number: 0010001
The insurance providcd by this Policy is not co\'cred by ~he F r
Insurance Code. Sec. 631.50 et seq,). '
NOTHING HEREIN SHALL BE CONSTRUE W , ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTHER SECTION OF THE POI CONTRARY TO TIlE POLICY LANGUAGE.
TIlE TERMS OF nns ENDORSEtvIE DE TIlE POLICY LANGUAGE.
r ce Guaranty Association (Florida
c,:,
In WiUlcss Whereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial
Guaranty by virtUe of the countersignature of its duly authorized representative.
President
Effective Date:
Authorized Reprcsentative
Acknowledged all of the Effecth'c Date written nbovc:
COUNTERSIGNA TURE:
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Authorized Officer Licensed Resident Agent
State Street Bank and Trust Compnny, N.A., as Fiscal Agent
FGIC is a relrl!l1ered lIerviCcl m~rk IIsed h\' Financial GUamn\\' InsuOI.ncc Coml'nnv under Iicen~c Irom il511arcnl Comlll\J\V. FOle Comomlion,
Fonn E.Q032 (10/93) Page I ort
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Company
115 Broadway ,
New York, NY 10006
(212) 312-3000
(800) 352-0001
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FGIC.
A GE CBpJtal Company
Endorsement
To Financial Guaranty Insurance Company
Insurance Policy
Policy Number:
Control Number: 0010001
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It is further understood that with respect to the Bonds m~t , the amount insured under this
Policy is that portion of the accreted value (as set forth . I Q documents under which the Bonds are
iSSUed) of said Bonds which shnll become Due ?Jf!)~ u shall be unp.id by reason of Nonpayment by
tl1e Issuer. f&.V
NOTIDNG HEREIN SHALL BE CON TO WAIVE, ALTER, REDUCE OR AMEND COVERAGE
IN ANY OTIIER SECTION OF TIlE P CY. IF FOUND CONTRARY TO TIIE POLICY LANGUAGE,
TIlE TERMS OF TIIIS ENDORSEMENT SUPERSEDE THE POLICY LANGUAGE.
In Witness Wl1ereof, Financial Guaranty has caused this Endorsement to be affixed with its corporate seal and
to be signed by its duly authorized officer in facsimile to become effective and binding upon Financial
Guaranty by virtue of the countersignature of its duly authorized representative.
President
Effective Datc:
Authorized RCltresentative
Acknowlcdged as of thc Effecth'e Date written above:
...
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Authorized Officer
State Street Bank llnd Tnlst Company, N.A., us Fiscul Agent
FGIC is II rc istered ~ervicc milt\.; u~cd Iw Fimmcinl (iullrnnlv In5urnncc Com allv under Iicelt~e Irom il5
Fonn E.Q014
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( :lIll11'nny .
EXHIBIT n
Page B-)
''"l
(To be printed on the Bonds)
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial Guaranty") has issued a policy containing
the following provisions with respect to the City of Clearwater, Florida, \Vater and Sewer
Refunding Revenue Bonds, Series 1998 (the "Bonds"), such policy being on file at the principal
office of [the] , as paying agent (the "Paying Agent"):
Financial Guaranty hereby unconditionally and irrevocably agrees to pay for disbursement to the
Bondholders that portion of the principal of and interest on the Bonds which is then due for
payment and which the issuer of the Bonds (the "Issuer") shall have failed to provide. Due for
payment means, \vith respect to principal, the stated maturity date thereof, or the date on which
the same shall have been duly called for mandatory sinking fund redemption and does not refer
to any earlier date on which the payment of principal of the Bonds is due by reason of call for
redemption (other than mandatory sinking fund redemption), acceleration or other advancement
of maturity, and with respect to interest, the stated date for payment of such interest.
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Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or written
notice by registered or certified mail, from a Bondholder or the Paying Agent to Financial
Guaranty that the required payment of principal or interest has not been made by the Issuer to the
Paying Agent, Financial Guaranty on the due date of such payment or within one business day
after reCeipt of notice of such nonpayment, which~ver is later, will make a deposit of funds, in an
account with State Street Bank and Trust Company, N,A., or its successor as its agent (the
"Fiscal Agent"), sufficient to make the portion of such payment not paid by the Issuer. Upon
presentation to the Fiscal Agent of evidence satisfactory to it of the Bondholder's right to receive,
such payment and any appropriate instruments of assignl1Jent required to vest all of such
Bondholder's right to such payment in Financial Guaranty, the Fiscal Agent will disburse such
amount to the Bondholder.
As used herein the term "Bondholder" means the person other than the Issuer or the borrower(s)
of bond proceeds who at the time of nonpayment of a Bond is entitled under the terms of such
Bond to payment thereof. '
The policy is non-cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
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EXHIBIT C
Page C-l
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[Disclosure Language For Official Statement]
Bond Insurance
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Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial
Guaranty") will issue its Municipal Bond New Issue Insurance Policy for the Bonds (the
"Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of
and interest on the Bonds which has become due for payment. but shall be unpaid by reason of
nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such
payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the
uFiscal Agent"), on the later of the date on which such principal and interest is due or on the
business day next following the day on which Financial Guaranty shall have received telephonic
or telegraphic notice, subsequently confirmed in writing, or written notice by registered or
certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of such amount
by the Issuer, nle Fiscal Agent will disburse such amount due on any Bond to its owner upon
receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to
receive payment of the principal and interest due for payment and evidence, including any
appropriate instruments of assignment. that all of such owner's rights to payment of such
principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect
of a Bond includes any payment of principal or interest made to an owner of a Bond which has
been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with a final. nonappealable order of a court having competent
jurisdiction.
The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the
Bonds. The Policy covers failure to pay principal of the Bonds on their respective stated
maturity dates or dates on which the same shall have been duly called for mandatory sinking
fund redemption, and not on any other date on which the Bonds may have been otherwise called
for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment
of interest on the stated date for its payment.
Generally, in connection with its insurance of an issue of municipal secuntles, Financial
Guaranty requires, among other things, (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 holders may not exercise such rights without Financial
Guaranty's consent, in each case so long as Financial Guaranty has not 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 Financial Guaranty's consent.
The specific rights, if any, granted to Financial Guaranty in connection with its insurance of the
Bonds are set forth in the description of the principal legal documents appearing elsewhere in
this Official Statement. Reference should be made as well to such description for a discussion of
the circumstances, if any, under which the Issuer is required to provide additional or substitute
credit enhancement, and related matters.
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This Official Statement contains a section regarding rhe ratings assigned to the Bonds and
reference should be made to such section for a discussion of such ratings and the basis for their
assignment to the Bonds, Reference should be made to the description of the Issuer for a
discussion of the ratings, if any, assigned to such entity's outstanding parity debt that is not
secured by credit enhancement.
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Finlll1cilll GUllrulltV 11I~lIrulll'I'
CnlllpUIIY .
EXHIBIT C
Page C-2
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Th~ Pol~cy is not covered by the Property/Casua!ty Insurance Security Fund specified in Article
76 of the New York IllSUffmce Law or by the Florida Insurance Guaranty Association (Florida
Insurance Code. ~~ 631.50 et seq.).
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the '.Corporation"), a
Delaware holding company. The Corporation is a subsidiary of General Electric' Capital
Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the
debts of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial
guaranty insurer domiciled in the State of New York and subject to regulation by the State of
New York Insurance Department. As of June 30, ] 998. the total capital and surplus of Financial
Guaranty was $1,282,692,798. Financial Guaranty prepares financial statements on the basis of
both statutory accounting principles and generally accepted accounting principles. Copies of
such financial statements may be obtained by writing to Financial Guaranty at 115 Broadway,
New York. New York 10006, Attention: Communications Department (telephone number: 212-
. 312-3000) or to the New York State Insurance Department at 25 Beaver Street, New York,
New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau (telephone
number: 212-480-5187).
NOTE TO DRAFTER OF DISCLOSURE DOCUMENT:
The above disclosure statement uses the term "Official Statement." If the disclosure document
has a different descriptive title, the disclosure statement should be modified accordingly.
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EXHIBIT D
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WATER AND/OR SEWER TRANSACTIONS
(LEGAL DOCUMENTATION REQUIREMENTS)
1. Definitions
'(a) A definition of "Bond Insurance Policy" shall bc includcd, to rcad as follows: uthc
municipal bond new issue insurance policy issucd by the Bond Insurcr that
guarantees payment of principal of and intercst on the Bonds....
(b) A definition of uBond Insurer" shall be included, to'read as follows: "Financial
Guaranty Insurancc Company, a Ncw York stock insurancc company, or any
successor thereto."
2. Redemotion Noticcs
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(a) Noticc of any redcmption of Bonds shall either (i) cxplicitly state that thc proposed
redcmption is conditioncd on therc being on deposit in the applicable fund or
account on the rcdcmption datc sufficicnt money to pay the full redemption price of
the Bonds to be rcdcemed, or (ii) bc sent only if sufficient money to pay the full
redemption price of the Bonds to be redeemed is on dcposit in the applicablc fund or
account.
3.
Default-Related Provisions
(n) Thc Trustcc shall, to thc cxtcnt thcrc arc no othcr available funds hcld under thc
authorizing document, use the remaining funds in the construction fund to pay
principal of or interest on the Bonds in the event of a payment default.
(b) 111C applicable authorizing document provisions describing events of dcfault shall
specifY that in dctermining whethcr a payment dcfault has occurred or whethcr a
payment on the Bonds has been made undcr the authorizing documcnt(s), no cffect
shall bc givcn to payments made under thc Bond Insurancc Policy.
(e) Any acceleration of the Bonds or any armulmcnt thcreof shall bc subject to the prior
writtcn consent of thc Bond Insurcr (if it has not failed to comply with its payment
obligations undcr the Bond Insurance Policy).
(d) The Bond Insurcr shall reccivc immediate notice of any payment dcfault and notice
of any other dcfault known to the Trustce or the Issucr within 30 days of the
Trustee's or thc Issucr's knowledgc thereof.
(e) For all purposes of the authorizing document provisions governing events of default
and remedies, except thc giving of noticc of default to Bondholders, the Bond
Insurcr shall be decmed to be the sole holdcr of thc Bonds it has insured for so long
~.)
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As used in this Exhibit D. "Bonds" means the Series of Bonds refcrred to in the Commitment
Lettcr.
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Page D-2
as it has not failcd to comply with its paymcnt obligations under the Bond Insurance
Policy.
(f) The Bond Insurer shall be included as a party in intercst and as a party entitled to (i)
notify thc Issucr, the Trustce. if any, or any applicable rcceiver of ~hc occurrencc of
an event of default and (ii) requcst the Trustec or rccciver to intcrvene in judicial
proceedings that affect thc Bonds or the security therefor. The Trustce or rcccivcr
shall bc rcquircd to accept noticc of default from the Bond Insurer.
(8) TIle following provisions shall be included:
(i) If. on the third day preceding any intcrcst paymcnt date for thc Bonds there
is not on deposit with the Trustce sufficient moneys available to pay all
principal of and intcrest on the Bonds due on such date, thc Trustee shall
immediately notify the Bond Insurer and Statc Street Bank and Trust
Company, N.A., New York, New York or its successor as its Fiscal Agent
(the "Fiscal Agent") of the amount of such deficiency. If, by said interest
payment datc, thc Issucr has not providcd the amount of such deficiency,
thc Trustec shall simultancously make available to the Bond Insurer and to
the Fiscal Agent the registration books for the Bonds maintained by the
Trustee. In addition: .
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(A)
(B)
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The Trustee shall provide thc Bond Insurer with a list of the
Bondholders entitled to receive principal or intcrcst paymcnts from
thc Bond Insurer under the tcnns of the Bond Insurancc Policy and
shall make arrangcments for the Bond Insurcr and its Fiscal Agent
( 1) to mail checks or drafts to Bondholders entitled to receive full
or partial intercst payments from the Bond Insurer and (2) to pay
principal of the Bonds surrcndered to the Fiscal Agent by the
Bondholders entitled to receive full or panial principal payments
from the Bond Insurer: and
111C Trustee shall, at the time it makes the registration books
available to the Bond Insurcr pursuant to (A) above, notify
Bondholders entitled to receive the payment of principal of or
interest on the Bonds from th~ Bond Insurer (I) as to the fact of
such entitlement, (2) that the Bond Insurer will remit to them aU or
part of thc interest payments coming due subject to the tenus of thc
Bond Insurance Policy, (3) that, except as provided in paragraph
(ii) below, in the event that any Bondholder is cntitled to reccive full
payment of principal from the Bond Insurer, such Bondholder must
tcnder his Bond with the instrument of transfcr in thc fonn provided
on the Bond exccutcd in the namc of the Bond Insurer, and (4) that,
exccpt as provided in paragraph (ii) below, in thc cvcnt that such
Bondholdcr is entitled to receive partial paymcnt of principal from
the Bond Insurcr, such Bondholdcr must tcndcr his Bond for
payment first to the Trustee, which shaH notc on such Bond the
portion of principal paid by thc Trustec, and then, with an
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acceptable ronn of assignmcnt executcd in the name of the Bond
Insurer, to the Fiscal Agent, which will then pay the unpaid portion
of principal to the Bondholder subject to the tcnns of the Bond
Insurance Policy.
(ii) In the event that the Trustee has notice that any paymcnt of principal of or
intcrcst on a Bond has been recovered from a Bondholder pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in accordance
with the final, nonappealable order of a court having competcnt jurisdiction,
thc Trustcc shall, at the timc it providcs notice to the Bond Insurer, notify
all Bondholders that in thc evcnt that any Bondholdcr's payment is so
rccovered, such Bondholder will hc entitlcd to payment from the Bond
Insurer to the extent of such recovery, and the Trustee shall furnish to the
Bond Insurcr its rccords evidcncing the payments of principal of and
intercst on the Bonds which have bcen madc by the Trustce and
subsequently recovered from Bondholders. and the dates on which such
payments werc made.
, (Hi)
111C Bond Insurer shall, to the extent it makes payment of principal of or
intcrest on the Bonds. beeomc subrogatcd to the rights of the rccipients of
such paymcnts in accordancc with thc tenus of the Bond Insurance Policy
and, to evidence such subrogation, (A) in the case of subrogation as to
claims for past due interest, the Trustce shall note the Bond Insurcr's rights
as subrogee on the registration books maintained by the Trustcc upon
receipt from the Bond Insurcr of proof of the payment of interest thereon to
the Bondholders of such Bonds and (B) in the casc of subrogation as to
claims for past due principal, the Trustec shall note the Bond Insurer's
rights as subrogee on thc registration books for the Bonds maintaincd by thc
Trustee upon rcceipt of proof of the payment of principal thercof to the
Bondholdcrs of such Bonds. Notwithstanding anything in this [BOND
COUNSEL: insert correct name for authorizing documentl or the Bonds to
the contrary, the Trustee shall make payment of such past due intercst and
past due principal directly to the Bond Insurer to thc cxtent that the Bond
Insurcr is a subrogee with respect thereto.
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4. Amendments and Supplements
(a) Any amendment or supplement to the authorizing document or any other principal
financing documents shall be subject to the prior written conscnt of the Bond
Insurer. Any rating agency rating the Bonds must receive notice of cach amendment
and a copy thereof at lcast 15 days in advance of its execution or adoption. The
Bond Insurcr shall be provided with a full transcript of all proceedings relating to
the execution of any such amendment or supplement.
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5. Defeasancc Provisions
(a) Only cash, direct non-callablc obligations of the Unitcd States of Amcrica and
securities fully and unconditionally guarantccd as to thc timcly payment of principal
and interest by the Unitcd Statcs of America, to which direct obligation or guarantce
the full faith and crcdit of the Unitcd Statcs of Amcrica has been pledgcd, Refcorp
interest strips, CATS, TIORS. STRPS. or defcascd municipal bonds ratcd AAA by
, S&P or Aaa by Moody's (or any combination of the foregoing) shall be used to
effect defeasance of the Bonds unless thc Bond Insurer othcrwise approves. ]n the
evcnt of an advancc rcfunding, thc Issuer shall cause to bc delivcrcd a verification
report of an independent nationally rccognized certified public accountant. ]f a
forward supply contract is employed in connection with the refunding, (I) such
verification report shall expressly state that thc adequacy of thc escrow to
accomplish the rcfunding relics solely on the initial escrowed investments and the
maturing principal thereof and intercst incomc thcrcon and does not assume
perfonuance undcr or compliance with the forward supply contract. and (ii) thc
,applicable cscrow agrccment shall providc that in the event of any discrepancy or
diffcrcnce betwccn the tenus of the forward supply contract and thc escrow
agreement (or thc authorizing document, if no separate escrow agreemcnt is
utilized), the tcnus of thc cscrow agrccment or authorizing document, if applicable,
shall be controlling.
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6.
Variable Rate Indebtedncss
(a) For all purposcs, variablc ratc indebtcdncss shall be assumed to bear intcrcst at thc
highcst of: (i) thc actual rate on the datc of calculation, or if thc indcbtedness in not
yct outstanding, thc initial ratc (if cstablished and binding), (ii) if the indebtcdness
has been outstanding for at lcast twclve months, the average rate over thc twelve
months inuncdiatcly prcccding thc datc of calculation, and (iii) (A) if intcrcst on the
indebtedness is excludable from gross incomc under thc applicable provisions of the
Internal Revenue Code, the most rccently publishcd Bond Buycr "Revenue Bond
Index" (or comparablc index if no longer published) plus 50 basis points, or (B) if
intercst is not so excludablc, thc interest rate on direct U.S, Treasury Obligations
with comparable maturities plus 50 basis points: providcd, howcver, that for
purposcs of any ratc covenant mcasuring actual dcbt scrvice covcrage during a tcst
pcriod, variablc ratc indcbtcdness shall be dcemcd to bear interest at the actual rate
per annum applicablc during the test period.
(b) In the case of variablc ratc issucs in which financial covenants are bascd on thc
s}71thetic fixed ratc under a swap, utilization of the synthctic fixed ratc under a
Swap for purposes of pcrfonning any rcquircd calculations undcr the applicable
Icgal documcntation shall bc pennittcd only if such documcntation and the
applicablc Swap satisfy thc rcquiremcnts of the applicable Exhibit attached hereto.
(c)
]n thc case of FOIC-insured variablc ratc bond issues, the liquidity facility
requircmcnts attachcd as Exhibit IH] attachcd hercto shall be incorporatcd into aU
appropriatc scctions of the authorizing documents.
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, 1. R9porting Requirements
(a) 111e Bond Insurer shall be provided with the following information:
(i) Within 120 days after the end of each of the Issuer's, and, if applicable, the
Borrower's, fiscal years, the budget for the succeeding year, the annual
audited financial statements. a statement of the amount on deposit in the
debt service reserve fund as of the last valuation, and, if not presented in the
audited financial statements. a statemcnt of the rcvcnues pledged to
payment of Bonds in each such fiscal ycar;
(ii) 111e official statement or other disclosure document, if any, prepared in
connection with the issuance of additional debt, whether or not on parity
with the Bonds within 30 days after the sale thereof;
(Hi) Notice of any drawing upon or deficicncy due to market fluctuation in the
amount. if any, on deposit. in the debt service reserve fund;
(iv) Notice of the redemption, other than mandatory sinking fund redemption, of
any of the Bonds, or of any advance refunding of the Bonds, including the
principal amount, maturities and CUSIP numbers thereof;
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(v)
Simultaneously with the delivery of the annual auditcd financial statements,
a statcment of:
(A) The number of system users as of the end of the fiscal year;
(B) Notification of the withdrawal of any system uscr comprising 5%
or more of system sales measured in terms of revenue, dollars since
the last reporting date:
(C) Any significant plant retirements or cxpansions planned or
undertaken since the last reporting date;
(D) Maximum and avcrage daily usage for the fiscal year;
(E) Updated capital plans tor expansion and improvement projects; and
(F) Results of annual engincering inspections, if any, ocr.urring at the
end of thc fiscal year; and
(vi) Such additional information as the Bond Insurer may rcasonably request
from time to timc,
8. Payments Unconditional'
(a) In thc case of bond issucs payable from amounts received undcr a loan agrecment,
leasc, or other payment contract ("Payment Agreement"), the payment obligations
undcr said Payment Agreement shall be absolutc and unconditional, frce of
dcductions and without any abatement. offset, recoupment, diminution or set-off
whatsoever.
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9. ' Noticc Addresses
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11le notice addrcsses for'the Bond Insurer and thc fiscal Agent shall be included in
thc authorizing document as' folloi.ys: Financial Guaranty Insurance Company, 115
'., Broadway, New York, New York ,10006, Attention: Risk Management; and State
,Street 'Bank and Trust Company. N.A, ,61 Broadway, New York, Ncw York
10006, Attcntion:'Corporatc Trust Department. '
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FINANCIAL GUARANTY INSURANCE COMPANY
PROCEDURE'S FOR
PAYMENT OF PREMIUM
Financial Guarantyfs issuance of its Municipal Bond New Issue
Insurance Policy at bond closing is contingent upon its receipt of
the premium. NO POLICY MAY BE RELEASED UNTIL RECEIPT OF SUCH
AMOUNT HAS BEEN CONFIRMED. Set forth below are the procedures to
be followed for confirming the amount of the premium to be paid and
for paying such amount:
Confirmation of Upon'determination of the final debt
Amount to be Paid: service schedule, provide such schedule to
Financial Guaranty, Attention: Sonia Leon-
Williamson at 212/312-3282 and subsequently
confirm with her the amount of the premium.
," Payment: Premium Due Date
Method of Payment: Wire Transfer of Federal Funds
Wire Transfer
Instructions:
BANKERS TRUST NEW YORK
ABA Number 021-001-033
16 Wall Street, New York, New York
For Credit to Financial Guaranty Insurance
Company
Account #50-256-127
FGIC Policy #
Sonia Leon-Williamson 212/312-3282)
FGIC CONTACT:
Any questions concerning these procedures or any premium payment
method other than outlined above should be directed to the
attention of Sonia Leon-Williamson at least two banking days prior
to the scheduled payment date.
CONFIRMATION OF RECEIPT OF PREMIUM
Financial Guaranty will accept as confirmation of the premium
payment a wire transfer number and the name of the sending
bank, to be communicated on the closing date to Sonia Leon-
Williamson 212/312-3282.
Upon confirmation of the premium payment and satisfaction of
the other conditions set forth in the commitment letter,
Financial Guaranty will release the Policy.
REQUESTS FOR FURTHER INFORMATION OR
ALTERNATIVE PAYMENT ARRANGEMENTS
Requests for additional information regarding the procedures
described above or as to the acceptability of alternate payment
procedures should be directed to Sonia Leon-Williamson 212/312-3282
at least two business days prior to the closing date.
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Logo Presentation for Official Statement
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,All offering circulars relating to securities insured by
Financial Guaranty are 'required to bear, our "FGIC"'Loqo,
attacheQ~ 'It is essential that the following legend
accompany the Logo on all such materials:
"FGIC is areqistered serVice mark used by
Financial Guaranty Insurance Company" a
private company 'not affiliated with any
u.s. :;overnment agency.1t
The legend must appear in bold face type, adjacent tQthe
Lo~o;" and not' as, a f.OQtnote~
, Thank you for your cooperation in this matter and do not
besitateto contact us with any questions, on the use ot ,the
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:,lIrMJ Rrmuu CadI 01/9&6. Q.J 4/fUNJld, S'I IW'tWWr. "'T.1.X TRE.ATME.vr', .ltt'/"Wf I'of> a fiutlt". OUC'WJ'tOII of C't714tn olllrr l.cU
J.nHCU Bcrui CouJUrI Lf ;writ" of lit, OprlllC/I"indl lit I Smn /991 BoruU "114 lit, lJ\alm, tltrt'ftJ1I d1'I urmpt jroIf1 ia.xal1OlI lU\d,.,. II"
,a"'J 0/ Iltl S14U o,l FIoruJ4. r.:u:rpt Q.J tD 'nAil l.a':UJ and I4UI Imposui !Jy ChDpttr 1:0. rtandA Stamtu. 00'1 IJUITUt, II\aJMI or PratW
PI J' 0 t "" iI r a I tD I'U OW II ,d fly c:arpot'CUlDlU. 0<Vf IC.J a.J'I.d Javt II rJ Q.JJCdQ no fU. a.1 d rfil\.ld lit tm1t.
522..500.000
TIlE CITY OF MIA1\1L no RID A
GENERAL OBUGATION BONDS.
SERIES 1995
(SAJ'\TITARY SEWER SYSTEM)
,.,~
Oated: JaDe 150 1"" DIIC Juury 1. u .baWD beJaw
I Dte mt on lb.e Sc ric.t 1995 Boadlu Plya.bJ I t.emi"lJ1Dually ens J l.l1":I'Y I &nd J uJy I 1D c&ch )'Ut. carum enCU1l J ;unary I. 1 m
(lb.e "IDte~J( Paymenr Olres"). The Senu 1995 8cmda.... bcrma wucd ID reptlM booltoCtltr')' only (al"C1 to lUuoCl.UUQac.l o( SS.ooo
;lnnctpaJ &mown. ar an)' IlUe,nJ multiple thereaf. WbfD uecuted and deUwreci, the Senea 1995 Beads will be rq1Itef'ed to the Il..Unt
o( Cede .t Ca.. IS nOOUDU of lb., Oc~nory TI'\lI1 Company ("0TC"). 1kuc6c:ia1 O\ll11m ot the Scnu 1995 Boac1l wUl Dat reeelve
;enmc.atu l"l!J'reseDaDJ tbe,r interesu in the Senea 1995 Boada pun:b.u.cd. Principa! aDd larerat OD the Scric.a 199' Bauds VI\U be !'&la
to OTe or Its nal1\lDU, as ,b, ~psteftd own., th.rsot. by lb.e Bw ot N.. Yon: Trun Company af Aarid.L N.A.. Ju:baD't'\JJe.
F1orid.a. IS Rel1unr and Pa)'iq AI'CDt. and OTC is rupcmibl. (or mniniJ31 sueh paymcau to its pamc:t~u (or subsequeDt
cilibunemcnl to lbe bcccticia! OW'll.n. Tho rqutercd OW1l.f wtIl remu such payments 10 DTC pam=pauu, The DTe PUUc:tp&DU, vrill.
lQ tUrn. remn sucb paymeau 10 lb., benaidaJ o"elt of the Series 1995 Bcadl.. 501 '"THE SERIES 1995 BONDS - BooIl:.E,nry
0uJ)' Symm" blmD.
The Sena 1995 Bonds ani beiD, wued to PlY lb.. COd at V1J'IOUS uniwy ~r pn:ljccu lceated .;lhiD the auwctpal bclUl.d.uta
of lb.e City, and ro pay tbe COIl of W\W1C8 related to the Series 19'9' Boad&. '
The Senu 1995 BoZld.l UII subjll;l UI Ol'tioa.aJ rtldtmptiou u pnmd&d hmiz:L.
The s.n. 1795 BoINb ....1ft'ftI .IIllpdctu or tJM CltT. (0' whldt lu rQu r.ltk. CNdU ud r.uiJll pcl'WU''''' pledpd ud an
pl1lbkt rrom uaHmiud ad 'uonlll taUI 01 all cuaihl pru,.ny _IUtill d1. Ocr (ad.~lIll11o_...d a&lDpUOIU U rI'IlIllirsII ~
Florida law).
'1"'''\ Payment ot the principal ot aDd LntlT'Clt oa lb., Stria 1995 Boada wbeD claw will be I\W1UItecd by a IUwsic:ip&l bond imu.nno:
:, ,/ policy wUld simuJtancou.sJy with the dIlinry of th. Series 1995 Bocdl by F'uWl.C::w GlWInty In.swuQl Cl:Impaay.
-------
FGIC.
Financial Guaranty Insurance
Company
rete II . "-'" __ __ _ .. n-o.. co-. '--' '- . _ ~ _ ....... .. ... u ....-- ....,.
This ~ver pap =nrl1c.1 "rum intormaDOu (ar quick refcrm" anly. It is nor I SIUUJ'lW')'. Patma.a! purcbucl'1 sbowd nar rely
Jl)Cn tbu Pile Inc1cpcndenr of th. body o( Ilus OtBciIJ Stat.meat wbicb musr-si read in IU manty before rnUu1t an wormed
U1Yestment deC1SIQQ.
MA TUI.ITIES. AMOtJ1rn'S. tN'1'1:UST ItA TIS AND PIlCI.$ oa YJElJ)5
(AIIftClt II'''' aa .. N4")
\-lll'lMtY Dlte PriIO.... l.carw MAmtIy 0... Prt.a~ I.....
h..~ I AICM.. R.ue VIeW J...., I ~m R.au ~
- - -
i996 S -. -to 1006 S 100,000 5.1OO'J. U~
1997 1001 100.000 5.100 S.no
1991 100.CXIO ..~ ".150 1001 100.000 5.300 5. 350
1999 100.000 ..500 ..lOG 1009 1.000.000 5.375 5.450
:000 I 00.000 ".soa U50 1010 l. OC:O.OOO 5.315 tHO
:(1)1 lOO.a .,600 UOO 1011 1.000.000 5.400 5.600
:002 100.000 4.700 ".100 1012 1.700.000 5.400 5.650
:003 100.000 HOO 4.100 1013 3.700.000 5. -'00 5.700
: 000t 100.000 1.9130 UGO 101' ..100.000 6.503 UOO
:005 I 00,000 5.00) 5.000 :aU 5.100.000 6,j()Q 5.100
T7t, S'"U 1991 Bew Grt od,'Nd ~b)tc' UI pno,. 11111. wit,", (U Gild 'I iJnud by th, Cil'l. IIIbj<<114 th. f'I"'P' ef lh, Gpprovlllt
'011110"" of AdOl'l"lo ri Z,d", P ...4.. Mil:Jnu. Fl0n4 84N1 u,ulU,L Q.J to fh, validiry Qtull,dl1'G/l4.t 114lW o/llIt".,n ell ,II. Smrl J 991
8elld,.< CUfCtll ItIC! m4flrf'Z 'It eo'"wcrUl" willi th. Smrz 1991 &"4l Will ~ pdUrd UPO" lor Ih. Cil)1 by A. QUUlII Je,," 1/1. Clf)'
Aflornl)/, Howard GrJI'1 4 Compa"". Mil"'''. FloM4. aNi RaymoNJ Ja1t1'~ 4 A,tJoc:sDtu. Iltc.. St. '"m/nur, FloM4 af'l II",'It, III
FrnallCl41 Advuorl '0 ,hi Clf)'. Jr U UfJlCluJ Iltat tltr S,"r~ 199J BoNU Will ~ I2VtJJU2blr fOl' a,liwlY III Nrw YOI'k. Nrw YOf'k. ell 01'
\'I)ooout Jun, 11. /99'.
. :YIerrill Lynch & Co. Prudential Securities, IDe.
Date: JUDe 20. 1995
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Official b(atenlent and l"hnlhstone
, Logotype Configuration
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FGIC.
Financial Cuaranty Inslu'ant1e
" .
COlllpany
F1;U: 1'"1 r,'wi.trrr.I','nh'l' ",urk 11....1 h~ nn'In,.j'''';lIlirlinl~ 1r'-lIrnlll't" "lIlll1lll~. 111'1'1>1111' 1'''IIIf1,'n~ II'" "lIl1ll1l1',1 nilh IItll I .:o..I.lIll'nm.pnl .lllptl"'.
. . . ,
---- -
FGIC.
Financial Guaranty Insurance
Company
I
FGIC t. II ruhlr~ M'nh'r mm uud by FlnanrlBI Gunlllnfy In~W'llnrr '~umrnn~.u prl"II" .'flhlpun~ not lIr.lIlulr" ~llh IIny l'_'i. l:n,pmml'nl nt:rn,'y.
---- w"
FGIC.
Financial Guarantv Insurance
..
Company
,ui4~
(;::3l'
FGIC I. a ",~'lllrrd It'nl~ mark u_1 by f1nanrllll CuarlUlty In.W'an~ Company.
. priv61e company nol anlllalrd "llh any l:.5. Go'rmmrnllll!:rncy.
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FGIC.
Financial Guaranty Insurance
Company
fGIC Is II l'rlriur~ R",lrr mark ..oW b~ I'Inandul CUllran~ In~ura1lrl' Cllmplln~'.
11 private rompBIIY nOI affillllolrtl "hh IIny LS. (:ml'mmrntllltrnr~'.
---.-
FGIC.
Financial Guaranty Insurance Company
FGIC I. Il n:~.tertd semt'l! marll.lUed by f1nanclal Guaranty In'W'lLIIrl' Corllpany.a priVlUC' rompBIIY not nJlIIIIIlMl "lth any t.S. GOYl'mmC'nl apncy.
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-..... -
FGIC.
Financial Guaranty Insurance Company
fGIC I. II ",~b'frni IC'rvlre mark IlIC'd by nnanrllll Guarunly In,W'anrr Cnmpan}'. u priYIIIC' company nOI nJlillalrd "lth any l'.S. (;mpmmrnl ~nry.
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W Moody's Investors Service
Statement on Ratings and Fees for Insured Issues
Disclosure to Issuer$ of Moody's Rating Practices
and Obligations tor FGIC Insured Issues
Assignment of FGIC's Claims-PayIng RatIng to Insured Issues
Moody's Investors Service currently rates the insurance claims-paying ability of Financial Guaranty
In,iUrance Company (FGIC) Aaa for long-term obligations. In connection with FGIC's commitment to
insure your upcoming issuance of debt. FGIC has applied to Moody's to assign a credit rating to the issue.
Pursuant to FGIC's application, Moody's has undenaken to assign such a rating. and to maintain and revise
the rating as may from time to time be appropriate.
Prior to assigning a rating to your insured obligation, Moody's will review whether. in its judgment, FGIC's
, insurance policy for the issue guarantees full and timely payment of all principal and interest when due. and
is permanent and unconditional for the life of the insured obligation.
After Moody's assigns a rating, written confirmation of that action will be provided to you, with a copy pro-
vided to FOIC. Your issue and its rating will then be included in appropriate Moody's published ratings
, '') directories and rating verification services.
Moody's Review of Information From Issuers
As part of Moody's overall evaluation of the insured ponfolio of FOIC. Moody's may review the under-
lying credit quality of your insured obligation: In the course of such review. you may be contacted by a
Moody's analyst to answer questions and to verify infonnation in hand.
In accordance with its general practices, Moody's may also publish the underlying credit rouing of your issue.
Rating Fees for Insured Issues
Pursuant to Moody's B&reemeot with FGIC. Moody's bilUnV practices (or insured oblieations are:
a) for each fully insured obligation rated by Moody's. Moody's will bill you (or the purchaser of the
insurance, if different) directly;
b) If an issue has received a Moody's rating on an uninsured basis and the issue (or a ponion thereoO
is subsequently insured on a secondary market basis (a 'secondary market obligation'), Moody's
will bill FGIC without an additional charge to you for the insured rating; or
c) If an issue has received a Moody's rating and the insurance contract covers less than the entire
amount of principal and interest due (a 'partially insured obligation'), Moody's will bill FOIC,
if appropriate, without an additional charge to you for the rating.
The invoice for your fully insured issue will be forwarded to you from Moody's Financial Guarantee
'",t;:) Services desk or can be quoted to you by calling Moody's at (212) 553-1631.
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FITCH 1~7 ESTORS SER\'(CE. L.P.
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, Insured Issue Rating Fee Schedule
PUBLIC FINANCE
:'-iotesl
Issue Size I S ~1il.l Tax. Backed Short- I{rm Debt R~\'enue He:l.lth C-u::. '
L'nder 5 S 1.500 51.500 52.000 53.000
"
5-~O 53.000 ' 52.000 53.750 55.000
20-50 54.000 53.500 SS .000 58.000
50-100 56.500 55.000 57.500 S 11.000
Over 100 510.000 57,500 S 10.000 ' 516.000 ~
Secondary market I.S basis points of par. 53.000 maximum
d;';v'1\. '
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MUNICIPAL STRUCTURED FINANCe
Assct-Backed/Mortgagc-Backed C.P.
\
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$1'.000 first year
510,000 per year thereafter
1.25 basis pointS
$40,000 maximum '
Long-Term Transactions
.
Variable-RaIe Transactions with Tender Options
Inswance fee based on issue size and type of transaction listed above under
Public Fmance plus $5,000. E.g. 52.5 million Health Care deal with a tender
option will be $8.000 + 5.5,000 for a total of S 13,000.
, .
To request a rating, please call1nsurcd Market Services at (307) 754-02012 or (800) as-FITCH.
o
Schedule ,ffectivt March 11. J 996.
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THE FOLLOWING IS PROVIDED FOR THE ISSUER'S CONVENIENCE AND
IS NOT INTENDED FOR INCLUSION IN ANY DISCLOSURE DocuMENT l"~
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,.:: ,'\:~,"':~'We h~~~~~,;J6i~~e~{'b~~fr1; ~~teri~s' p;~~~~d' bY' M~~'dy'~"IIi~esio~~ Se~&~;;:~ ~.i; ana,~}.':t:::~,
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~1'" '( ;:,':\:~~> F~tc , ?3~~. In.~.', ..,re~e,cti.y:lr' a~ th~lr. r,~~uest : a.n9. ,f~~.. ~e 1~,~uer'.~. ~,f,~~:S~~.~~~~::.~~,::;'~",?"
" ":. ,':.:.,:,Fmanclal Guaranty. assumes no. responslblbtyfor such infonnation and~m8.kes no '.',:>.
': ~ '. . ,::,-; '.;;representatlon '85'tO the'accuracy-or completeness ofstlch"lnformatioo:' 'f:;;~~ q~!?t1F,:>~
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'.)' ... '. .>:. . . Issuer and the respective ratmg agency. Fmancla1 Guaranty IS not respons161e.Jo~'oany'., '. ~
',: ,:'.' , :.::r;..: ,; such' fees .and '\villo not s'eek'"to confiim the lss'uer' gt.payment'o'f- sucltfees. :, ThJ;te1~l~~~~ff~. ~'./:'
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'... ,;' '::,.", an Issuer has any questions relating to such ratings or the payment of ratmg.agen~ fees, . '. ....:
'.' " ~": '~e issuer'slio'wd ~~ntact the applicable rating '~genCydirectly~ '-i<,,};.:<': :i~:(~~ "'~1t~~et1~t;," .
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All rjllhl~ ru('rved. AU. INFORMAnON COI'ITAINEO HEREIN IS COPYR)CiHT'ED IN iliE NAME OF Mooors INVESTORS SERVICE. INC.
(.~fOOO\"S.,. A."it) NONE OF SUCH INFORMAllON MAY BE COPIED OR 01HERW1:SE REPROOUCED, REPACKAGED. fllR1HER TR.\NSMlI1EO. TIlA.'1s.
FERREO, DlSSDtINATfD. REDlSt'RIBtnEO OR RESOlD. OR StORED FOR SUBSEQUENt' USE FOR ANY SUCH PURPOSE. IN WHOLE OR IN V.~T.
IN A.W FORM OR MANNER OR BY ANY MEANS WllAlSOEVER. BY It.N'( PEICSON wrmOl1T Mooors PRJOR WRITTEN CONSENT.
AU WOrlNUoII (onWJIed hl!fftll it obbint'Cl b)I MOOOrs rrom SQU~ ~~~ by ~ to be XC'IInle a.o.d reiiablr. Because ulthe plnlIIbllity III hUINn or m~hll\l(';J error
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expreu lit impUed, .lS III LIlt! :m:urao.T, umelin~. ,"omplctrne,s, merrhlllUblU/y Ot IiUlna for ~, llarlil,;uLv ~ Ilf IIII' luch mformation. l'nd,r no dr~umlu.n~u
.h.t.U .\tooors have m, lUbwty to iIIll' ~~n Ot tnUtI' lor (a.! IIII' loll ot.wnace ill wholr at ID PIIt ~auscd by. mullin, from, or relwn. to. any trror (nu:hlltnl Ot
Iltherwiulur lither dr~'\Im.W\ce Ot cOlltinlltncv with"' or olllSide the cOllual o( MOODY'S Of in., "I iu wn:non. olliun. employers or alen\3 In (onne~UOI1 "'Ith
the pro~ultment. ~lIUt'~'1.illn, compllaUon. anaJ)'fi.. inlellltetalioll. commua.icatiol1. pllbUution or deli'l'ery of illY such Information. or Ibl &Ill' direct, indirect. lPt'cLll,
~onllCqut'lIlial. tumpenfoWlry Ilr lIIC1denuJ d&nucrs whJUoevff rUlcJudia.r wllhoUlIimI~1I. Iou profill), n'en Ii MOOOr5 illdvlsed ID adnlIct 01 the poulbdllY III
~lII:l\ ~ ft'IUliliI, (rom \he us.e of or inabIlitY \0 \I~.IllY such itJormal.lOl). ,
The crl'1lit nlinp,1i IIII', c:onatilUlllll p.Ifl of lht WOm\.WOlI C:OIluU1ed hereiJI are. .wi must be c:onslnltd tolely II, IlIltme IIl1 III opUl1On ;and llIX suumt'lIl1 ull~1l1r trot.
lImmtndalionl to purrh~, 11:11 ot hold &III' S<<Uritin. NO WARRAN1Y. EXPRESS OR IMPUED, AS TO 11IE ACCURACY. TIMELlNESS. COMPLETENESS,
MERt'HANl'ABlLn'Y OR fT1'l'fESS FOR ANY PARnC\J1.AR I'\JRPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFOR."MTION IS m\"liN
OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rauq or other OPIlllQII must be wellhl:li 101t'1-, as une fKUlr in III)' l/IY"tlntnl de.:~
IjOIl made by Ot un ~halluf any UlI:r 0' Ilu' lII!ormanon conWDtd hereia. .wi neh II.IdI user must acc:otilinrlr INlu!' 1\3 0W1I1tUt!y ~ evalUoUlOllaf tlch teC'llruy alId "I
e:ICh iuut'f and lfUJRI\lor 0(. ;and uch prlMdrr 0( crrdA suppon 1M. each ~ tN& 11 may can~r P\lrc~. ho~ or Il!lllnt. Punu,UIt to Se~'tlon lilb, ul L~t
$e(unlin i\ct of 19JJ. )fOOD\"S hereby di$cloln th.u mou isl\iers 01 debt JtC'IIt1t.Ie1 (incluWnI corporue &Ild mUIUCip&! bands. de~l\lurtt, nuleS 3Ild ~ummt'tcI;d
paper' and preferred stock fllrd by )1000\"5 han. prior III uJllrunent ot;any 1"lI1UI.. ~rted 10 pay 10 .'fOODY'S far apprawJ IIId nUnll SUVlctt rt'nllerttl by lllrt'~
r;an.~ from ~ \.f).)I,) 10 5~SO,\lOO.
ISI~"1
1f,51
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