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RESOLUTION NO. 99~ 47
A RESOLUTION PROVIDING FOR THE SALE OF NOT TO EXCEED
$7,500,000 STORMW ATER SYSTEM REVENUE BONDS~ FIXING
REDEMPTION PROVISIONS FOR THE BONDS~ SETTING FORTH THE FORM
OF THE NOTICE OF BOND SALE AND SUMMARY NOTICE OF BOND SALE
RELATING TO THE SALE OF SUCH BONDS; DIRECTING PUBLICATION OF
THE SUMMARY NOTICE OF SALE RELATING TO SUCH BONDS; PRO-
VIDING FOR THE OPENING OF BIDS RELATING TO THE SALE OF THE
BONDS; SETTING FORTH THE OFFICIAL NOTICE OF SALE AND BID
FORMS; PROVIPING THAT SUCH BONDS SHALL BE ISSUED IN FULL
BOOK ENTRY FORM; APPROVING THE FORM OF A PRELIMINARY
OFFICIAL STATEMENT; PROVIDING FOR COMPLIANCE WITH A
CONTINUING DISCLOSURE CERTIFICATE; AUTHORIZING THE
SELECTION OF A REGISTRAR AND PAYING AGENT; AUTHORIZING THE
,PURCHASE OF MUNICIPAL BOND INSURANCE; AUTHORIZING THE
PURCHASE OF A DEBT SERVICE RESERVE FUND SURETY BOND;
PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH;
AND PROVIDING AN EFFECTIVE DATE.
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WHEREAS, on April 15, 1999, the City Commission of the City of Clearwater, Florida (the
"Cityll or the "Issuer") enacted Ordinance No. 6378-99 (the "Bond Ordinance") to provide for the
issuance of bonds in an aggregate principal amount of not to exceed $30,000,000 of the City's
Stormwater System Revenue Bonds, Series [to be determined], in one or more series from time to
time payable from Net Revenues of the Stormwater System (as defined therein); and
WHEREAS, it is in the best interest of the City to designate the initial portion of such bonds
to finance the Series 1999 Project as "Stonnwater System Revenue Bonds, Series 1999,11 (the "Series
1999 Bonds"); and
WHEREAS, it is in the best interest of the City to provide for the public sale of not to exceed
$7,500,000 of Series 1999 Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION or THE CITY
OF CLEARWATER, FLORIDA, as follows:
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SECTION I. AUTHORIZATION OF nONDS, SERIES DESIGNATION AND 1999
PROJECT. That portion of the not to exceed $30,000,000 of the Stormwater System Revenue
Bonds, Series [to be determined] authorized by the Bond Ordinance being alTered pursuant to this
resolution is hereby designated as the not to exceed $7,500,000 City of Clearwater, Florida,
Stormwater System Revenue Bonds, Series 1999 (the "Series 1999 Bonds"), which Series 1999
Bonds are hereby authorized to be issued. The proceeds of the Series 1999 Bonds shall be used to
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pay (i) a portion of the costs of the 1999 Project (as hereinafter identified), (ii) the costs ofissuing
the Series 1999 Bonds, (Hi) the premium on the Bond Insurance Policy and (iv) the premium for the
debt service reserve fund surety bond or to make a deposit to the Reserve Fund. The proceeds of the
Series 1999 Bonds not required to pay the amounts described in clauses (ii) through (iv) in the
immediately preceding sentence shall be deposited into the subaccount in the Construction Fund
(created by the Bond Ordinance) for the 1999 Project. The 1999 Project shall consist of those capital
projects of the System approved by action of the City Commission as part of the 1998-1999 fiscal
year capital budget. Interest on the Series 1999 Bonds shall be payable semiwannually on cach May
1, and November 1, commencing on November 1, 1999. Principal of the Serics 1999 Bonds shall bc
payable annually on May 1, each year, commencing May 1,2000.
SECTION 2. PUBLIC SALE. There is hereby authorized to be sold pursuant to a public
sale not to exceed $7,500,000 City of Clearwater, Florida. Stormwater System Revenue Bonds,
Series 1999.
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SECTION 3. PROVISIONS FOR REDEMPTION. The Series 1999 Bonds maturing
prior to or on November 1, 2008 are not subject to redemption prior to their maturity date. The
Series 1999 Bonds maturing after November I, 2008 are subject to redemption at the option of the
City prior to maturity on or after November 1, 2008, in whole at any time, or in part from time to
time, on 'any interest payment date in such manner as shall be determined by the City at the
redemption prices expressed as a percentage of the principal amount of the Series 1999 Bonds to be
redeemed as set forth below, together with accrued interest to the date fixed for redemption.
Period During Which Redeemed
Redemption Price
(Percentage of Par)
November 1, 2008 through October 31, 2009
November 1, 2009 and thereafter
101%
100
To the extent selected by the winning purchaser of the Series 1999 Bonds as set forth in such
purchaser's bid form, those maturities of the Series 1999 Bond selected to constitute one or more
Term Bonds shall be subject to Amortization Installments described in the Notice of Sale.
SECTION 4. SALE OF SERIES 1999 BONDS. The Financial Services Administrator is
hereby directed to arrange for the Series 1999 Bonds in the manner determined by the Financial
Services Administrator through the publication of the Summary Notice of Sale of the Bonds either
(i) in a newspaper regularly distributed in the City of Clearwater and in The Bond Buyer, or (ii) in
addition to the publication described in clause (I), through an auction website which may include
arrangements for such bids to be received through an auction website on the web site at an address
to be provided in the Official Notice of Sale, such publications to be on such date as shall be deemed
by the Financial Services Director to be in the best interest of the Issuer and such publications to be
not less than ten (10) calendar days prior to the date of sale as required by Section 218.385( 1).
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Florida Statutes; nnd to publish such Notice in such other newspapers on such dates as may be
deemed appropriate by the Financial Services Director.
Proposals for purchase of the Series 1999 Bonds will be received either (i) at an auction
website on the internet address to be provided on the Official Notice of Sale, or (ii) at the office of
the Financial Services Administrator of the City, 100 South Myrtle Avenue, Clearwater, Florida
33756-5520, as determined by the Financial Services Administrator, from the time that the Notice
of Bond Sale is published until I! :00 a.m., Eastern Time, on such date and time as may be established
by the Financial Services Administrator of the City or her designee, and if such date is subject to
change, communicated through Munifacts News Service not less than twenty-four (24) hours prior
to the time bids are to be received for the purchase of the City of Clearwater, Florida, Stormwatcr
System Revenue Bonds, Series 1999, as provided in the Notice of Sale (the !IBid Daten).
SECTION 5. APPROVAL OF FORMS. The Notice of Bond Sale, Summary Notice of
Sale of the Bonds and the Official Bid Form to be submitted for purchase of the Series 1999 Bonds
shall be in substantially the fonns annexed hereto, as Exhibits A, Band C, respectively, together with
such changes as shall be deemed necessary or desirable by the Financial Services Administrator
depending on the bidding method selected in accordance with Section 4 hereof) incorporated herein
by reference.
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SECTION 6. BOOK ENTRY ONLY BONDS. It is in the best interest of the City and the
residents and inhabitants thereof that the Series 1999 Bonds be issued utilizing a pure book-entry
system of registration. In furtherance thereof, the City has previously executed and delivered a
Blanket Letter of Representations with the Depository Trust Company. For so long as the Series
1999 Bonds remain in such book entry only system of registration, in the event of a conflict between
the provisions of the Bond Ordinance and of the Blanket Letter of Representations) the terms and
provisions of the Blanket Letter of Representations shall prevail.
SECTION 7. PRELIMINARY OFFICIAL STATEMENT AND OFFICIAL
STATEMENT. The City Manager and Financial Services Administrator are authorized and directed
to cause a Preliminary Official Statement to be prepared in substantially the form attached hereto as
Exhibit D, with such changes, insertions and omissions as shan be approved by the City Mantlger and
Financial Services Administrator) containing a copy of the attached Notice of Bond Sale and Official
Bid Fonn and to furnish a copy of such Preliminary Official Statement to interested bidders. The City
Manager and Financial Services Administrator are authorized to deem final the Preliminary Official
Statement prepared pursuant to this Section for purposes of Rule] Sc2-12 (the "Rule") of the
Securities and Exchange Commission. Upon the award orthe Series 1999 Bonds to the successful
bidder. the City shall also make available a reasonable number of copies of the Preliminary Official
Statement to such bidder, who may mail such Preliminary Official Statements to prospective
purchasers at the bidder's expense. Following the award of the Series 1999 Bonds, the City Manager
and the Financial Services Administrator shall cause to be prepared a final Official Statement dated
as of the Bid Date) reflecting such changes in the Preliminary Official Statement as may be necessary
to reflect the purchaser's bid. The May6rwCommissioner, and City Manager are hereby authorized
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to execute and delivery such final Official Statement, with such changes, insertions and omissions as
may be approved by such officers.
SECTION 8. CONTINUING DISCLOSURE. The City hereby covenants and agrees that,
in order to provide for compliance by the City with the secondary market disclosure requirements of
the Rule, that it will comply with and carry out all of the provisions of that certain Continuing
Disclosure Certificate in substantially the form attached hereto as Exhibit E, to be executed by the
City and dated the date ofissuance and delivery of the Series 1999 Bonds, as it may be amended from
time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate").
Notwithstanding any other provision of this Resolution, failure of the City to comply with such
Continuing Disclosure Certificate shalt not be considered an event of default; however, any
Bondholder may take such actions as may be necessary and appropriate, including seeking mandate
or specific performance by court order, to cause the City to comply with its obligations under this
Section.
SECfION 9. REGISTRAR AND PAYING AGENT. The Bank of New York, New York,
New York, is hereby appointed as Registrar and Paying Agent for the Series 1999 Bonds.
SECTION 10. MUNICIPAL BOND INSURANCE POLICIES AND RESERVE
ACCOUNT SURETY BONDS. Pursuant to the Bond Ordinance, MBIA Insurance Corporation
(uMBIA") has been selected to provide its Municipal Bond Insurance Policy (the Upolicy") as the
Bond Insurance Policy (as defined in the Bond Ordinance) as additional security for payment of
principal and interest on the Series 1999 Bonds, and to provide its debt service reserve surety bond
(the uSurety Bond") in the amount of the applicable Reserve Requirements to fund the Reserve Fund
for the benefit of the Series 1999 Bonds. Selection ofMBIA as the Bond Insurer (as defined in the
Bond Ordinance) and MBIA as the provider of the debt service reserve fund surety is hereby ratified
and confirmed and payment for such Bond Insurance Policy and debt service reserve surety bond
from proceeds of the Series 1999 Bonds is hereby authorized. The Issuer hereby accepts the terms,
conditions and agreements relating to the Bond Insurance Policy and the debt service reserve surety
bond in accordance with the Commitment for Municipal Bond Insurance and Commitment for Surety
Bond, each as attached hereto as Exhibit F and incorporated herein. A statement of insurance is
hereby authorized to be printed on or attached to the Series 1999 Bonds for the benefit and
information of the holders of the Series 1999 Bonds. The Mayor~Commissioner and City-Manager
are authorized to execute and the Clerk is authorized to attest, subject to the City Attorney approving
as to form. sufficiency and correctness, a Guaranty Agreement in substantially the form attached to
the Commitment for Surety Bond attached as Exhibit F hereto, with such changes, insertions and
omissions as may be approved by such officers.
In addition to the covenants and agreements of the City previously contained in the Bond
Ordinance regarding the rights of the Bond Insurer and the provider of the debt service reserve fund
surety bonds, which are hereby incorporated herein, the City hereby makes the following additional
covenants and agreements for the benefit ofMBIA and the Holders of the Series 1999 Bonds while
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the Bond Insurance Policy insuring the Series J 999 Bonds and the debt service reserve surety bond
are in full force and effect:
Payments under the Policy:
A. In the event that, on the second Business Day, and again on the Business Day, prior to
the payment date on the Obligations, the Paying Agent has not received sufficient moneys to pay all
principal of and interest on the Obligations due on the second following or following, as the case may
be, Business Day, the Paying Agent shall immediately notifY the Insurer or its designee on the same
Business Day by telephone or telegraph, confirmed in writing by registered or certified mail,' of the
amount of the deficiency.
B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying
Agent shall so notify the Insurer or its designee.
C. In addition, if the Paying Agent has notice that any Bondholder has been required to
disgorge payments of principal or interest on the Obligation to a trustee in Bankruptcy or creditors
or others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Bondholder within the meaning of any applicable
bankruptcy laws, then the Paying Agent shall notify the insurer or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by registered or certified mail.
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D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to
act as attorney-in-fact for Holders of the Obligations as follows:
1. If and to the extent there is a deficiency in amounts required to pay interest on the
Obligations, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust
Company, N.A., or its successors under the Policy (the "Insurance Paying AgentU), in form
satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for
such Holders in any legal proceeding related to the payment of such interest and an
assignment to the Insurer of the claims for interest to which such deficiency relates and which
are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying
Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent
with respect to the claims for interest so assigned, and (c) disburse the same to such
respective Holders, and
2. If and to the extent of a deficiency in amounts required to pay principal of the
Obligations, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in
fonn satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent
for such Holder in any legal proceeding relating to the payment of such principal and an
assignment to the Insurer of any of the Obligation surrendered to the Insurance Paying Agent
of so much of the principal amount thereof as has not previously been paid or for which
moneys are not held by the Paying Agent and available for such payment (but such assignment
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shall be delivered only irpayment from the Insurance Paying Agent is received), (b) receive
as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor
of the PoHcy payment therefor from the Insurance Paying Agent, and (c) disburse the same
to such Holders.
E. Payments with respect to claims for interest on and principal of Obligations disbursed by
the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of
the Issuer with respect to such Obligations, and the Insurer shall become the owner of such unpaid
Obligation and claims for the interest in accordance with the tenor of the assignment made to it under
, the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the
Paying Agent hereby agree for the benefit of the Insurer that:
1. They recognize that to the extent the Insurer makes payments, directly or indirectly
(as by paying through the Paying Agent), on account of principal of or interest on the
Obligations, the Insurer will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Issuer, with interest thereon as provided and solely
from the sources stated in this Indenture and the Obligations; and
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2. They will accordingly pay to the Insurer the amount of such principal and interest
(including principal and interest recovered under subparagraph (ii) of the first paragraph of
the Policy, which principal and interest shall be deemed past due and not to have been paid),
with interest thereon as provided in this Indenture and the Obligation, but only from the
sources and in the manner provided herein for the payment of principal of and interest on the
Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the
amount of such principal and interest.
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G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the
Insurer a copy of the disclosure document, if any, calculated with respect to such additional
Obligations.
H. Copies of any amendments made to the documents executed in connection with the
issuance of the Obligations which are consented to by the Insurer shall be sent to Standard & Poor's
Corporation.
1. The Insurer shall receive notice ofthe resignation or removal of the Paying Agent and the
appointment of a successor thereto.
1. The Insurer shall receive copies of all notices required to be delivered to Bondholders and,
on an annual basis, copies of the Issuer's audited financial statements and Annual Budget.
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Notices: Any notice that is required to be given to a holder of the Obligation or to the Paying
Agent pursuant to the Indenture shall also be provided to the Insurer. All notices required to be given
. to the Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail
addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention:
Insured Portfolio Management.
SECTION 11. AWARD OF BIDS. The Financial Services Administrator is hereby
authorized to accept the bids for the Series 1999 Bonds. The City Manager and the Financial
Services Administrator are hereby authorized to award the sale of the Series 1999 Bonds on their
determination of the best bid submitted in accordance with the terms of the Notice of Bond Sale
provided for herein so long as the true interest cost rate shall not exceed 6.0% on the Series 1999
Bonds. The City Manager and the Financial Services Administrator are hereby authorized to award
the sale of the Series 1999 Bonds as set forth above or to reject all bids for the Series 1999 Bonds.
Such award shall be final.
SECTION 12. PRIOR RESOLUTIONS. To the extent the provisions of this Resolution
are inconsistent with the provisions of Resolution No. 99-01, adopted by the City Commission of the
City on May 6, 1999, the provisions of this Resolution shall control and supercede the inconsistent
provisions of Resolution 99-01.
SECTION 12. EFFECTIVE DATE. This resolution shall take effect immediately upon
adoption.
Passed and adopted by the City Commission of the City of Clearwater, Florida, this 4thday
of November, 1999.
CITY OF CLEARWATER, FLORIDA
Approved as to form:
J!Jf.' K. Akin, City Attorney
Attest:
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. Goudeau, City Clerk =--, I
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EXHIBIT A
FORM OF NOTICE OF BOND SALE
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OFFICIAL NOTICE OF BOND SALE
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$7,500,000.
CITY OF CLEARWATER, FLORIDA
STORMW A TER SYSTEM REVENUE BONDS, SERIES 1999
Sealed proposals will be received by the City of Clearwater, Florida (the "City") at [Internet
Auction Website Address] [the offices of the Financial Services Administrator of the City, 100 South
Myrtle Avenue, Clearwater, Florida 33756-5520] by 11 :00 a.m. (Eastern Daylight Savings Time),
on November -' 1999, for the purchase of the City of Clearwater, Florida, Stormwater System
Revenue Bonds, Series 1999 (the "Series 1999 Bonds"). The proposal for the Series 1999 Bonds,
together with the good faith deposit described below, should bc enclosed in a sealcd envelope or
internet system marked "Proposal for $7,500,000'" City of Clearwater, Florida, Stormwater System
Revenue Bonds, Series 1999; Do Not Open Until 11 :00 a.m. (Eastern Daylight Savings Time),
November -' 1999", or such similar legend which appropriately identities the contents thercof
Form of Series 1999 Bonds
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The Series 1999 Bonds will be issued in book entry only form, without coupons, in
denominations of $5,000 or any integral multiples thereof, and shall be dated November 15, 1999.
Principal of and any redemption premium on the Series 1999 Bonds shall be paid to the registered
owners at the designated corporate trust office of The Bank of New York, New York, New York,
(the "Paying Agent II and "Registrar"), upon presentment and surrender of the Series 1999 Bonds.
Interest on the Series 1999 Bonds shall be paid to the registered owners as shown on the rcgistration
books maintained by the Registrar, by check or draft mailed to each such owner's addrcss as shown
on the registration books maintained by the Registrar as of the fifteenth (15th) day of the calendar
month preceding such interest payment date. Interest will be payable each May I and November 1,
commencing May 1,2000. Interest will be calculated on the basis ofa 360-day year of twelve 30-day
months. For so long as The Depository Trust Company, New York, New York, or its nominee, Cede
& Co. (collectively, "DTe') is the registered owner of the Series 1999 Bonds, payments of principal
of, redemption premium, if any, and interest on the Series 1999 Bonds will be made directly to DTC.
Disbursements of such payments to the DTC participants is the responsibility of DTC and further
disbursement of such payments from the DTC participants to the beneficial owners of the Series 1999
Bonds is the responsibility of the DTC participants.
Initially one bond will be issued for each maturity of the Series 1999 Bonds in the aggregate
principal amount of each such maturity and registered in the name of DTC. DTC, an automated
clearing house for securities transactions, will act as securities depository for thc Series 1999 Bonds.
Purchases of the Series 1999 Bonds will be made in book-entry-only form (without certification).
It shall be the responsibility of the Successful Bidder (as hereinafter defined) for the Series 1999
Bonds to furnish to DTC an underwriters' questionnaire and to the City the CUSIP numbers of the
Series 1999 Bonds not less than seven (7) days prior to the Closing Date (as hereinafter defined).
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"'Preliminary, subject to change.
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Maturity Schedule
.~ The Series 1999 Bonds will mature on November I of the following years in the following
principal amounts:
Series 1999 Bonds
Principal Principal Principal
Maturity Amount. Maturity Amount. Maturity -Amount*
11/01/2000 105,000 11/01/2010 175,000 11/01/2020 300,000
11101/2001 120,000 11/01/2011 185,000 11/01/2021 315,000
11/01/2002 125,000 11/0112012 195,000 11/01/2022 335,000
11/01/2003 130,000 11/01/2013 205,000 11/0 l/2023 350,000
11/01/2004 135,000 11/01/2014 215,000 11/01/2024 370,000
1110112005 140.000 11/01/2015 225.000 11/01/2025 390,000
11/01/2006 145,000 11/01/20] 6 240,000 ) 1/01/2026 4] 5,000
11/01/2007 155,000 11/01/2017 255,000 11/01/2027 440,000
11/01/2008 160,000 11/01/2018 270,000 ] 110112028 465,000
11/01/2009 170,000 1110112019 280,000 11/01/2029 490,000
.J Mandatory Redemption Provisions
If the Successful Bidder designates any Series 1999 Bonds as term bonds as described under
"Designation of Tenn Bonds/t the following mandatory redemption provisions shall apply with
respect to such designated term bonds:
The Series ] 999 Bonds maturing on November 1, 20_ will be subject to mandatory
redemption prior to maturity, selected by lot, or in such manner as the Registrar may deem
appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on
November 1, 20-, and each November 1 thereafter, from amounts deposited in the Redemption
Account in the Bond Service Fund established by the Ordinance, in the following years and amounts
as follows:
Year
Amount
*Preliminary, subject to change.
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Optional Redemption Provisions
The Series 1999 Bonds maturing on or prior to November 1, 2008 arc not subject to
redemption prior to their maturity date. The Series J999 Bonds maturing after November 1,2008
are subject to redemption at the option of the City prior to maturity on or after November 1,2008,
in whole at any time, or in part from time to time on any interest payment date, in such manner as
shall be determined by the City at the redemption prices expressed as a percentage of the principal
amount of the Series 1999 Bonds to be redeemed, as set forth below, together with accrued interest
to the date fixed for redemption.
Redemption Period
Redemption Pri!;(~
November 1, 2008 through October 31, 2009
November 1) 2009 and thereafter
101%
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Adjustment of Principal Amount
After final computation of the bids, to achieve desired debt service levels, the City reserves
the right either to increase or decrease any Principal Amount of the Series 1999 Bonds (or any
Amortization Installment in the case of a Term Bond) shown on the schedule of Principal Amounts
set forth above (the UMaturity Schedulen), by an amount not to exceed five percent (5%) of the stated
amount of each such Principal Amount on the Maturity Schedule and correspondingly adjust the issue
size, all calculations to be rounded to the nearest $5,000.
In the event of any such adjustment in the Series 1999 Bonds, no rebidding or recalculation
of the bid submitted with respect to such Series 1999 Bonds wHl be required or permitted. If
necessary, the total purchase price of the Series 1999 Bonds will be increased or decreased in direct
proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 1999
Bonds specified herein; and the Series 1999 Bonds of each maturity, as adjusted, will bear interest
at thc same rate and must have the same initial reoffering yields as specified in the bid of the
Successful Bidder. However, the award will be made to the bidder whose bid produces the lowest
true interest cost, calculated as specified below, solely on the basis of the bid for the Series 1999
Bonds offered pursuant to the Bid Maturity Schedule of the relevant series of Series 1999 Bonds,
without taking into account any adjustment in the amount of Series 1999 Bonds set forth in the Bid
Maturity Schedule.
Designation of Term Bonds
Bidders may specify that the annual Principal Amounts ofihe Series 1999 Bonds coming due
in any two or more consecutive years may be combined to form one or more maturities of Series
1999 Term Bonds scheduled to mature in the last of such years with the preceding annual Principal
Amounts for such years constituting mandatory Amortization Installments of Series 1999 Bonds to
be selected by lot and redeemed at a price of par plus accrued interest in accordance with the
Resolution.
3
11-11
to
Basis of Award
~
Proposals must be unconditional and only for all the Series 1999 Bonds. The purchase price
bid for the Series 1999 Bonds may include a discount (including underwriters' discount and original
issue discount) not to exceed two percent (2%) of the principal amount of the Series 1999 Bonds and
shall specify how much of the discount is original issue discount. The purchase price bid for the
Series 1999 Bonds will not deduct the insurance premium. Said deduction of premium will be made
only for the purpose of calculating the true interest cost. No more than one (I) Proposal for the
Series 1999 Bonds from any bidder will be considered. The City reserves the right to determine the
Successful Bidder for the Series 1999 Bonds, to reject any or all bids and to waive any irregularity
or informality in any bid.
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The Series 1999 Bonds will be awarded to the bidder (herein referred to as the "Successful
Bidderll as to the Series 1999 Bonds) offering such interest rate or rates and purchase price which
will produce the lowest true interest cost to the City over the life of the Series 1999 Bonds. True
interest cost for the Series 1999 Bonds (expressed as an annual interest rate) will be that annual
interest fate being twice that factor of discount rate, compounded semiannually, which when applied
against each semiannual debt service payment (interest, or principal and interest, as due) for the Series
1999 Bonds will equate the sum of such discounted semiannual payments to the bid price (incll.lsive
of accrued interest). Such semiannual debt service payments begin on May I, 2000. The true interest
cost shall be calculated from December 10, 1999, the expected closing date of the Series 1999 Bonds
(the uClosing Date") and shall be based upon the principal amounts of each serial maturity set forth
in this Notice of Bond Sale and the bid price set forth in the Proposal for the Series 1999 Bonds
submitted in accordance with the Notice of Bond Sale. In case of a tie, the City may select the
Successful Bidder by lot. It is requested that each Proposal for the Series 1999 Bonds be
accompanied by a computation of such true interest cost to the City under the term of the Proposal
for Bonds, but such computation is not to be considered as part of the Proposal for Bonds.
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Interest Rates Permitted
The Series 1999 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-
twentieth (1120) of one percent. No interest rate specified for any maturity of the Series 1999 Bonds
may be lower than any interest rate specified for an earlier maturity of such series. There shall not
be a difference greater than two hundred fifty basis points (250 b.p.) between the lowest coupon and
highest coupon within the Series 1999 Bon~s. Should an interest rate be specified which results in
annual interest payments not being equally divisible between the semiannual payments in cents the
first semiannual payment will be reduced to the next lower cent and the second semiannual payment
will be raised to the next higher cent.
I
,
It shall not be necessary that all Series 1999 Bonds bear the same rate of interest, provided
that all Series 1999 Bonds maturing on the same date shall bear the same rate of interest. A rate of
interest based upon the use of split or supplemental interest payments or a zero rate of interest will
not be considered.
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4
QQ-'-I1
Paying Agent and Registrar
'J
The Paying Agent and Registrar for the Series 1999 Bonds is The Bank of New York, New
York, New York, through its designated office in Jacksonville, Florida.
Security
Principal of and interest on the Series 1999 Bonds to be issued pursuant to Ordinance No.
6347-98 and all required sinking fund, reserve and other payments shall be payable solely from the
Net Revenues of the City's Stonnwater System, together with the earnings thereon derived from the
investment thereof in the Funds and Accounts established in the Ordinance and as more fully
described in the Preliminary Official Sta'tement.
The Series 1999 Bonds do not constitute a general indebtedness of the City within the
meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall
ever have the right to require or compel the exercise of the ad valorem taxing power of the City or
taxation of any real or personal property therein for the payment of the principal of and interest on
the Series 1999 Bonds or the making of any debt service fund, reserve or other payments provided
for in the Resolution.
Purpose
C)
Pursuant to the Ordinance, the Series 1999 Bonds are being issued to finance additions,
extensions, supplements or replacements to the City's Stormwater System, to purchase a municipal
bond insurance policy and a reserve fund surety policy for deposit to the subaccount of the Debt
Service Reserve Fund for the benefit of the Series 1999 Bonds, and to pay the cost of issuance of the
Series 1999 Bonds.
Issuance of Series 1999 Bonds
The Series 1999 Bonds will be issued and sold by the City of Clearwater, Florida, a municipal
corporation organized and existing under the laws of the State of Florida. The Series 1999 Bonds
are being issued pursuant to Ordinance No. 6347-98 enacted April 15, 1999, as supplemented by
resolutions (collectively, ,the IlBond Ordinance") by the City of Clearwater, Florida (the "City") and
pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law.
Municipal Bond Insurance Policy
',J
A commitment to issue a municipal bond insurance policy guaranteeing payment of principal
and interest on the Series 1999 Bonds has been obtained from MBIA Insurance Corporation. The
price bid for purchase of the Series 1999 Bonds, as set forth on the Official Bid Form, will be reduced
by the amount of the bond insurance policy premium, for the purpose of calculating the true interest
cost rate ofthe.bid. Infonnation regarding the bond insurance commitment including the amount of
the premium, may be obtained from David Thornton of First Union Capital Markets Corp., Financial
Advisor to the City, (727) 898-0812.
5
qq~L/1
Proposals
'1
Proposals for the Series 1999 Bonds are desired on forms which will be furnishcd by the City,
and envelopes, containing Proposals for the Series 1999 Bonds should havc endorscd thereon
"Proposal for $7,500.000* City of Clearwater. Florida, Stormwater System Revcnue Bonds, Series
1999; Do Not Open Until 11 :00 a.m. (Eastern Daylight Savings Time). Novcmber _, 1999", or
words of equivalent impOlt, and should be addressed to the City at the above address.
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Each proposal for the Series 1999 Bonds must be accompanied by the sum of$75,OOO, in the
fonn of either (i) a Cashiers or Certified Check drawn upon an incorporated bank or trust company,
payable to the City of Clearwater, Florida, as evidence of good faith, or (ii). a Financial Surety Bond
from any insurance company licensed to issue such a surety bond in the State of Florida and approved
by the City (as of the date hereof only Financial Security Assurance Corporation has been so
approved) and submitted to the City prior to the opening of the bids, identifying each bidder whose
deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the part of
the bidder. Ifa check is delivered the check of the successful bidder may be cashed by the City and
the proceeds will be held as security for performance of the bid. If a financial Surety Bond is
provided by the successful bidder the good faith deposit shall be delivered by wire transfer to the City
by 3:00 p.m. on the next business day. If the Successful Bidder shall fail to comply promptly with
the terms of its Proposal, the amount of such check Of, wire will be forfeited to said payee as
liquidated damages. The checks of unsuccessful bidders will be returned to such bidders by registered
mail at the addresses stated in their Proposals, or delivered to a representative of such bidder
immediately after the award of the Series 1999 Bonds to the Successful Bidder. The proceeds of the
good faith check of the Successful Bidder will be applied to the payment of the purchase price of the
Series 1999 Bonds. Prior to the delivery of the Series 1999 Bonds, the City may cash and invest the
proceeds from the good faith check. No interest will be paid to any bidder upon any good faith
check.
Delivery and Payment
It is anticipated that the Series 1999 Bonds in book entry only form will be available for
delivery on December 10, 1999 in New York, New York, at The Depository Trust Company, or
some other date and place to be mutually agreed upon by the Successful Bidder and the City against
the payment of the purchase price therefor including accrued interest calculated on a 360-day year
basis, less the amount of the good faith check, in immediately available Federal Reserve funds without
cost to the City.
Closing Documents
The City will furnish to the Succcssful Biddcr upon delivery of the Series 1999 Bonds the
following closing documents in a form satisfactory to Bond Counsel: (1) signature and no-litigation
certificate~ (2) federal tax certificate; (3) certificate regarding information in the Official Statement;
and (4) seller's receipt as to payment. A copy of the transcript of the proceedings authorizing the
v
*Prcliminnry, bubjl.'Ct to change.
6
q1- L( 7
Series 1999 Bonds win be delivered to the Successful Bidder of the Series J 999 Bonds upon request.
l Copies of the form of such closing papers and certificates may be obtained from the City. '
Information Statement
Section 218.38(1 )(b) 1, Florida Statutes requires that the City file, within 120 days after
delivery of the Series 1999 Bonds, an infonnation statement with the Division of Bond Finance of the
State of Florida (the ttDivision") containing the following information: (a) the name and address of
the managing underwriter; if any, connected with the Series 1999 Bonds; (b) the name and address.
of any attorney or financial consultant who advised the City with respect to the Series 1999 Bonds;
and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter .or
financial consultant to any person not regularly employed or engaged by such underwriter or
consultant and (d) any other fee paid by the City with respect to the Series 1999 Bonds, including any
fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver to
the City at or prior to the time of delivery of the Series 1999 Bonds, a statement signed by an
authorized officer containing the same information mentioned in (a) and (c) above. The Successful
Bidder shall also be required, at or prior to the delivery of the Series 1999 Bonds, to furnish the City
with such infonnation concerning the initial prices at which a substantial amount of the Series 1999
Bonds of each maturity were sold to the public as the City shall reasonably request.
Pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, a truth-in-
bonding statement will be required from each bidder as to the Series 1999 Bonds as part of their bid
in the following form:
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liThe City of Clearwater, Florida, is proposing to issue $7,500,000* original aggregate
principaJ amount of Stonnwater System Revenue Bonds, Series 1999, for the purpose
of (i) financing capital projects for the City's Stormwater System, (ii) purchasing a
reserve fund surety policy for deposit in the subaccount of the Reserve Account for
, the benefit of the Series 1999 Bonds, and (iii) paying the costs of issuing the Series
1999 Bonds) all as further described in Ordinance No. 6347-98. The final maturity
date of the Series 1999 Bonds is November 1, 2029, and the Series 1999 Bonds are
expected to be repaid over a period of thirty (30) years. At a forecasted average
interest rate of _% per annum, total interest paid over the life of the Series 1999
Bonds win be $ . The source of repayment or security for this proposal
is the City's pledged funds, including the Net Revenues of its Stormwater System Cas
defined in the Ordinance) and moneys and investments held in the funds created under
the said Ordinance. Authorizing the Series 1999 Bonds will result in $
not being available to finance the other stonnwater services of the City. This truth-in-
bonding statement prepared pursuant to Section 218.385(2) and (3) of the Florida
Statutes, as amended, is for informational purposes only and shall not affect or control
the actual terms and conditions of the Series 1999 Bonds. II
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*Prcliminary I subject to change.
7
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Legnl OpjJJjon
The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant,
Miller and Olive, P.A., Tallahassee, Florida, to the effect that based on existing law, and assuming
compliance by the City with certain covenants and requirements of the Internal Revenue Code of
1986, as amended (the "Code"), regarding use, expenditures, investment of proceeds and the timely
payment of certain investment earnings to the United States Treasury, the interest on the Series 1999
Bonds is not includable in the gross income of individuals, however, interest on the Series 1999
Bonds will be included in the calculation of the alternative minimum tax liabilities of corporations.
The Code contains other provisions that could result in tax consequences, upon which Bond Counsel
renders no opinion, as a result of ownership of the Series 1999 Bonds or the inclusion in certain
computations (including, without limitation, those related to the corporate alternative minimum tax
and environmental tax) of interest that is excluded from gross income. '
Official Statement
The Preliminary Official Statement, copies of which may be obtained as described below, is
in a form IJdeemed final II by the City for purposes' of SEC Rule 15c2-12(b)( 1 ) (except for certain
pennitted omissions as described in such rule) but is subject to revision, amendment and completion
in a final Official Statement. Upon the sale of the Series ] 999 Bonds, the City will publish a final
Official Statement in substantially the same form as the Preliminary Official Statement. Copies of the
final Official Statement will be provided, at the City's expense, on a timely basis in such quantities 'as
may be necessary for the Successful Bidder's regulatory compliance.
It is not the intention or the expectation of the City to print the name(s) of the Successful
Bidder as to the Series 1999 Bonds on the cover of the Official Statement.
Continuing Disclosure
The City has covenanted to provide ongoing disclosure in accordance with Rule 15c2-12 of
the Securities and Exchange Commission. See It Appendix D -- Form of Continuing Disclosure
Certificate" attached to the Preliminary Official Statement.
CUSIP Number
It is anticipated that CUSIP identification numbers will be printed on the Series 1999 Bonds,
but neither the failure to print such number on any Series 1999 Bonds nor any error with respect
thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and
pay for the Series 1999 Bonds in accordance with its agreement to purchase the Series J 999 Bonds.
All expenses in relation to the printing ofCUSIP numbers on the Series 1999 Bonds shall be paid for
by the City~ provided, however, that the CUSIP Service Bureau charge for the assignment of said
number shall be the responsibility of and shall be paid for by the Successful Bidder.
8
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Copies of DQtuments
Copies of the Preliminary Official Statement, this Official Notice of Bond Sate and the Official
Bid Form and further information which may be desired, may be obtained from the City's Financial
Advisor, First Union Capital Markets Corp., III Second Avenue, N.E., Suite 815, St. Petersburg,
Florida 33701, telephone (727) 890-0812.
Amendment and Notices
Amendments hereto and notices, if any, pertaining to this offering shall be made by the
Munifacts News Service or similar information distribution service.
CITY OF CLEARWATER, FLORIDA
Isl Brian 1. Aungst
Mayor-Commissioner
9
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EXHIBIT B
FORM OF SUrvfMAR Y NOTICE OF SALE
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SUMMARY NOTICE OF SALE
$7,500,000'-
CITY OF CLEARWATER, FLORIDA
Stormwater System Revenue Bonds
Series 1999
Sealed bids will be received by the Financial Services Administrator of the City of Clearwater,
Florida, at [Internet Auction Website Address] [the office of the Financial Services Administrator,
100 South Myrtle Avenue, Clearwater, Florida 33756~5520], subject to the provisions of the Orucial
Notice of Bond Sale.
Sale Date:
November _, 1999
Time:
11 :00 a.m., E.S.T.
Bonds Dated: November 15,1,1999
Maturities: Payable November 1 in the years and amounts as follows:
Series 1999 Bonds
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Principal Principal Principal
Maturity Amount* Maturity Amount* Maturity Amount*
11/01/2000 105,000 11/01/2010 175,000 11/01/2020 300,000
11/01/2001 120,000 11/01/2011 185,000 11/0112021 315,000
11/01/2002 125,000 11/01/2012 195,000 11/01/2022 335,000
11/01/2003 130,000 11101/2013 205,000 11/01/2023 350,000
11/01/2004 135,000 11/01/2014 215,000 11/01/2024 370,000
11/01/2005 140,000 11/0112015 225,000 ] ]/0112025 390,000
11/01/2006 145,000 ] 1/0112016 240,000 11/01/2026 415,000
11/01/2007 155,000 11/01/2017 255,000 11/01/2027 440,000
11/01/2008 , 160,000 11/01/2018 270,000 11/01/2028 465,000
11/01/2009 170,000 11/0112019 280,000 1110112029 490,000
Interest
Payment Dates: Payable May 1 and November I, commencing May 1, 2000.
Legal Opinion: Bryant, MiHer and Olive, P.A.,
Tallahassee, Florida
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*Preliminary, subject to change.
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, For copies of the Official Notice of Bond Sale, the Preliminary Official Statement of the City
of Clearwater, Florida, and official Proposal Form, please contact the Financial Advisor, First Union
Capital Markets Corp., 111 Second Avenue, N. E., Suite 815, St. Petersburg, Florida 33701,
te~ephone (727) 898-0812,
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EXHIBIT C
. FORM OF BID PROPOSAL FOR SERIES 1999 BONDS
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PROPOSAL FOR
$7,500,000 'Ie
CITY OF CLEARWATER, FLORIDA
STORMWATER SYSTEM REVENUE BONDS, SERIES 1999
[Financial Services Administrator
Municipal Services Building
100 South Myrtle Avenue, Third Floor
Clearwater, Florida 33756-5520]
[Internet Auction W ebsite]
Ladies and Gentlemen:
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We understand that the Series 1999 Bonds will be insured by MBIA Insurance Company. The
insurance premium will be paid by the City from proceeds ofthe Series 1999 Bonds.
Said Series 1999 Bonds shall bear interest at the rates and shall be reofTered at prices or yields
specified below.
Principal Principal Principal
Jv1aturitx Amount~~ MillYriU: Amount* Maturity Amount.
11/01/2000 105,000 11/0112010 175,000 11/01/2020 300,000
11/01/2001 120,000 11/01/2011 185,000 11/01/2021 315,000
11/01/2002 125,000 11/0112012 195,000 11/0112022 335,000
11/01/2003 130,000 11/01/2013 205,000 11/01/2023 350,000
11/01/2004 135,000 11/01/2014 215,000 11/01/2024 370,000
11/01/2005 ' 140,000 11/01/2015 225,000 11/01/2025 390,000
11/01/2006 145,000 11/01/2016 240,000 1110112026 415,000
11/01/2007 155,000 11/01/2017 255,000 11/01/2027 440,000
11/01/2008 160,000 11/01/2018 270,000 11/01/2028 465,000
11/01/2009 170,000 11/01/2019 280,000 11/01/2029 490,000
~ .. Preliminary, subject to change
qCJ- '-/1
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Term Bonds Option, The interest rate or reofTering price or yield for any Tcrm Bonds shall
be indicated in the table above only in the year of final maturity, The annual Principal Amounts so
indicated shall be applied for the mandatory retirement of one Of morc Term Bonds maturing in thc
yeafs and amounts and bearing interest as follows:
$
$
$
$
$
Tcrm Bonds maturing on Novcmber 1, _ at
Tcrm Bonds maturing on No\'cmber 1, _ at
Term Bonds maturing on November 1, _ at
Term Bonds maturing on November 1, _ at
Term Bonds maturing on November I, _ at
% per annum at a price or yield of _'
% pcr annum 3t a price or yicld of _'
% per annum at a price or yield of _'
% per annum 3t a price or yield of _'
% per annum at a price or yield of _'
We will accept delivery of said Series 1999 Bonds through The Depository Trust Company,
with the closing occurring at the office of the Financial Services Administrator of the City of
Clearwater, 100 South Myrtle Avenue, Clearwater, Florida 33756-5520 on or about December 10,
1999, unless another date or place shall be mutually agreed upon, it being understood that the City
shall furnish to us, free of charge at the time of delivery of said Series 1999 Bonds, the opinion of
Bryant, Miller and Olive, P.A.. Bond Counsel, Tallahassee, Florida, approving the validity thereof
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In accordance with the Official Notice of Bond Sale, we either (i) enclose herewith a Cashier's
or Certified Check for $ payable to the order ofthe City of Clearwater, Florida, to be returned '
to the undersigned upon the award of said Series 1999 Bonds provided this Proposal is not accepted,
or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The check
is to be cashed and the amount of the check or wire retained by the City until the delivery of said
Series 1999 Bonds and payment therefor, and is to be applied to the payment of the Series 1999
Bonds or retained as and for liquidated damages in case of the failure of the undersigned to make
payment as agreed.
This proposal is not subject to any conditions not expressly stated herein or in the annexed
Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to the Series
1999 Bonds is hereby acknowledged. The names of the underwriters or members of the account or
joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either
below or on a sepafate sheet attached hereto.
Name of Firm
Address
City
State
Zip
By:
Name:
Title:
Telephone Number
(No addition or alteration is to be made to this Official Bid Form, and it must be submitted
with the Official Notice of Bond Sale.)
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The following is our computation made in accordance with the Official Notice of Bond Sale
of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series
1999 Bonds, which is for informational purposes only and is subject to verification prior to award:
Par Amount
Less Original Issue Discount
Plus Original Issue Premium
Less Underwriter's Discount
Amount Bid Before Accrued Interest *
Less Bond Insurance Premium
Plus Accrued Interest
Bid
True Interest Cost Rate (To pecember 10, 1999)
$
$
$
$
$
$
$
$
%
The following truth-in-bonding statement is required to be completed in compliance with
Section 218.385, Florida Statutes:
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The City of Clearwater, Florida is proposing to issue $7,500,000** original aggregate
principal amount of Stonnwater System Revenue Bonds, Series 1999 for the purpose of 0) financing
capital projects for the City's Stormwater System, (ii) purchasing a reserve fund surety policy for
deposit in the Reserve Account for the benefit of the Series 1999 Bonds, and (Hi) paying the costs
of issuing the Series 1999 Bonds, all as further described in Ordinance No. 6347~98. The final
maturity date of the Series 1999 Bonds is November 1, 2029, and the Series 1999 Bonds are
expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of
_% per annum, total interest paid over the life of the Series 1999 Bonds will be $
The source of repayment or security for this proposal is the City's pledged funds, including the Net
Revenues ofits Stormwater System (as defined in the Ordinance) and moneys and investments held
in the funds created under said Ordinances. Authorizing the Series 1999 Bonds will result in
$ not being available to finance the other stormwater utility services of the City. This
truth-in-bonding statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes,
as amended, is for informational purposes only and shall not affect or control the actual terms and
conditions of the Series 1999 Bonds.
Receipt for the return of the good faith check is hereby acknowledged.
By:
II< Amount bid should match price bid on page I of this proposal
~*Preliminary. subject to change.
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EXHIBIT D
FORM OF PRELIMINARY OFFICIAL STATEMENT
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. CITY OF CLEARWATER, FLORIDA
ELECTED OFFICIALS
MAYOR w COMMISSIONER
Brian AungstJ Sr.
COMMISSIONERS
Ed Hart .
Ed Hooper
J.B. Johnson, Jr.
Bob Clark
APPOINTED OFFICIALS
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Michael 1. Roberto, City Manager
Pamela K. Akin, Esq., City Attorney
.Margaret L. Simmons, CPA, Financial Services Administrator
Richard J. BaierJ P.E., Public Works Administrator
Cyndie Goudeau, City Clerk
BOND COUNSEL
Bryant, Miller and OliveJ P.A.
. TallahasseeJ Florida
FINANCIAL ADVISOR
First Union Securities, Inc.
St. Petersburg, Florida
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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 1999 Bonds described herein, and if given or made, such information or
representations must not be relied upon as having been authorized by the City or the Underwriter.
This Official Statement does not constitute an offer to sell the Series 1999 Bonds or a solicitation
of an offer to buy nor shall there be any sale of the Series 1999 Bonds by any person in any
jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The
information set forth herein has been furnished by the City and by other sources which are believed
to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as
a representation or contract, by the Underwriter. The information and expressions of opinion herein
are subject to change without notice and neither the delivery ofthe 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 EFFECf TRANSACTIONS WHICH ST ABlLIZE OR MAINTAIN THE MARKET PRICE OF
THE SERIES 1999 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
The Series 1999 Bonds have not been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, nor has the Ordinance been
qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions
contained in such acts. The registration or qualification of the Series 1999 Bonds in
, accordance with applicable provisions of the securities laws of the States, if any, in which the
Series 1999 Bonds have been registered or qualified and the exemption from registration or
qualification in certain other states cannot be regarded as a recommendation thereof. Neither
these States nor any or their agencies have passed upon the merits of the Series 1999 Bonds or
the accuracy or completeness of this Official Statement Any representation to the contrary
may be a criminal offense.
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TABLE OF CONTENTS
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Page
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IN'TRODUCTOR y STATEMENT ...................II-,.....................,,.........,,...o/iI.............t I' ..................... ...................1
THE SERIES 1999 PROJECT ...........".,......,..............,............. ........."..... .~..........It.........,........,..............i+..3
DESCRfilTION OF TIm SERIES 1999 BONDS........................,................................................................5
General.. II I'.'. 1..................................-11......... .....,........... 11...............1................... It 11..................1..........................................,..... 1......5
Optional Redemption,.. I'" II.... ....... ......... ~ I" .......................... +.............................. II.. II.'....... II" """ ~..".,.....,.... .........6
Mandatoty' Redemption, of ,..,., ......,. .......,. .....".,.".,......, ........................"...,..". ~......,..,.........'... ......... ......... I'. ...6
Notice of Redemption ............II-.....,...~,..........................,..... oil" ...,. ........... ,..... ... ...........1,.,..,.......,............7
Book.... EntIy' Only System .......... .... ...... .................... ,...,....... ................. ,............... .................... ,........ ,...7
SECU'RITY FOR THE SERIES 1999 BONDS ..................,......................,...,.................. ..........................1 0
Series 1999 Bonds Not a Debt of the City ............u...............,.............................................................13
MUNl:C.IP AL BOND IN'SURA.NCE ........,.........................,.....................,.................,..,.........................13
Rights Granted Insurer............. ........... ,................,....,....... ,..,.,...................,.................. ........., ..... ,.. .16
DEBT SERVICE REQUIREMENTS.............,. ,...................,...................................:...........................17
SOURCES .AND USES OF FUNDS ...............,..... ............., .,...............,.....,..,...................................18
Tlffi STORM'W A TER MAN"AGE'ME.NT SYSTEM .................................".........................................,....18
FrnAN'CIAL ST A TEME.NTS .........................................,....,..,...................................................,......,..,......21
IN'V'ESTME.NT POLICY OF TIm CITY .............,..,......................,...."........,..,.,..,....,............,,,.,,..............21
LEG.AL.ITY FOR 'IN'VEST'ME.NT ......................................................................,................................21
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TAX EXElvf:PTION ................................................"..............,.....,....,.,..............,.............. ................,....,..............22
Tax. Treatn1ent of Original Issue Discount............,,,.. oil.........................."....... II...."..... III.. ............., .23
RA TIN'GS .... ... ,..."................... ....."................ ..-It................. ............................ ............, ......... ........ ........ ....... ..23
LITIGA nON ........ .......... .... ........ ...,.., ,..,... ..... ,............ +......,...,.........."..... ,... ................. .... ........... ,..,.., ....... ..24
ADVI"SORS AND CONSULT.AN'TS ............1............".............,...................................,..,..,............".."......,.24
CONTIN'UmG DISCLOSURE ...............,..,............"........"...,...........................,., ...,.................................25
E"NF"ORCEABILITY OF REMEDIES .t......................................... .....".........,. ,......................................25
CERTAIN" LEGAL MA TIERS ,......,....................... ...............................,.....,...............,......,..."..............t....26
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ...............................26
FIN'ANCIAL ADVISOR ..... ",..... ....." ........ ................ .......... ........... ......,..............".................... ........ .... ... .... ,... ..26
YE.AR 2000 COMPillER COW A TmI::I...ITY ...............,. ...............,............................,..............................,26
MISCELL.ANEOUS ....... ........ ............... ........... ,... ....... ..It ...............,....,. ..... ........ ....... ..... ,..."..".... ~........ .......... ..... .... ....27
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, 1998
Appendix C Summary of Certain Provisions of the Ordinance
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Appendix D Fonn of Continuing Disclosure Agreement
Appendix E Fonn of Bond Counsel Opinion
Appen'dix F Fonn ~fMunicipal Bond Insurance Policy
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OFFICIAL STATEMENT
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$7,500,000.
CITY OF CLEARWATER, FLORIDA
STORMW ATER REVENUE BONDS, SERIES 1999
INTRODUCTORY STATEMENT
The pwpose of this Official Statement, which includes the cover page and the Appendices,
is to provide infonnation concerning the City of Clearwater. Florida (the "City") and the City's
$7,500,000. Stonnwater Revenue Bonds, Series 1999 (the "Series 1999 Bonds"). The Series 1999
Bonds are 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. 6378M99 enacted by the City
on , 1999 (the "Ordinance").
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The Series 1999 Bonds are being issued for the purpose of (i) paying the costs of capital
improvements (as more particularly described herein under the caption "THE SERIES 1999
PROJECT," the "Series 1999 Project") to the City' stonnwater management system (as more
particularly described herein1 the "System"); (ii) purchasing a reserve fund surety policy for deposit
into the Reserve Fund for the benefit of the Series 1999 Bonds and any Additional Parity Obligations
issued under the Ordinance; and (Hi) paying certain costs of issuance of the Series 1999 Bonds,
including the municipal bond insurance premium. The Series 1999 Bonds and the interest thereon
are payable solely from the Net Revenues derived from the operation of the System. The Series
1999 Bonds are the first Bonds issued which are payable from Net Revenues of the System. The
scheduled payment of principal of and interest on the Series 1999 Bonds will be insured by a
municipal bond insurance policy to be issued simultaneously with the delivery of the Bonds by
MBIA as described herein. For a discussion of the tenns and provisions of such policy, including
the limitations thereof, see "MUNlCIP AL BOND INSURANCE" herein.
Neither the Series 1999 Bonds nor the interest thereon constitute a general obligation or
indebtedness of the City within the meaning of any constitutional, statutory or charter provision or
Jimitation. No owner or owners of any Series 1999 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 1999 Bonds or the interest thereon. The City
shall not be obligated to pay the Series 1999 Bonds or any interest thereon except from the Net
Revenues, in the manner provided in the Ordinance referred to herein.
A Reserve Account has been established for the benefit of the Series 1999 Bonds and any
Parity Obligations (as herein defined) which may be issued under the Ordinance. Upon issuance of
the Series 1999 Bonds, a Reserve Fund Surety Bond (hereinafter described under the caption see,
ASECURITY FOR THE SERIES 1999 BONDS - Reserve Account; Reserve Fund Surety Bond@)
....)
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will be deposited into the Reserve Account in a stated amount equal to the Maximum Bond Service
'). ,Requirement on the Series 1999 Bonds.
The City covenants in the Ordinance to fix, establish and maintain such rates, and collect
such fees, rentals and other charges for the services and facilities of the System (as herein defined)
and revise the same from time to time whenever necessary as will always provide Gross Revenues
in each Fiscal Year sufficient to pay (i) the Cost of Operation and Maintenance of the System in such
Fiscal Year, (ii) 115% of the Bond Service Requirement for such Fiscal Year on the Outstanding
1999 Bonds and on all Outstanding Additional Parity Obligations, plus (iii) 100% of all reserve and
other payments required to be made pursuant to the Ordinance (as herein defined).
The City may issue Additional Parity Obligations, payable on a parity from the Net
Revenues with the Series 1999 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 stormwater management systems which
are, to be consolidated with the System and operated as a single combined utility, provided that,
among other requirements, certain earnings tests relating historical Net Revenues to the Maximum
Bond Service Requirement of all Bonds outstanding after the issuance of such Additional Parity
Obligations can be met. Such historical Net Revenues may be adjusted by the Consulting Engineer
as provided in the Ordinance.
. .~~...
Definitions of certain words and terms having initial capitals used herein and in the
Ordinance (as defuled below in "Authority For Issuance") are contained in the "Summary of Certain
Provisions ofthe Ordinance" in Appendix C hereto~
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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 all such
docwnents for full and complete statements of all matters of fact relating to the Series 1999 Bonds,
the security for the payment of the Series 1999 Bonds, and the rights and obligations of holders
thereof. The information cO:'ltained in this Official Statement involving matters of opinion or of
estimates, whether or not so expressly stated, are set forth as ftuch and not as representations of fact.
and no representation is made that any of the estimates will be realized. Neither this Official
Statement nor any statement which may have been made verbally or in writing is to be construed as
a contract with the holders of the Series 1999 Bonds.
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THE SERIES 1999 PROJECT
Set forth below is a description of the components of the Series 1999 Project, which is
estimated to cost in the aggregate approximately $7,357,000:
Flushing Avenue & Glenmore Ct. Project ($130,000)
Upgrade existing storm system to eliminate flooding in 4 houses in the Morningside '
, Subdivision Pierce Street
Downtown Project (Town Pond) ($3,300,000)
Enlarge existing retention facility to resolve flooding for 8 individual property
oWners, improve water quality and enhance downtown aesthetics
1264 Burma @ ,Mooreland and Swnmerlin Project ($285,000)
Upgrade existing storm system and construct a retention pond to resolve major street
flooding
Stevenson Creek Watershed Plan ($200,000)
Only major drainage basin in City which does not have a comprehensive plan to
improve storm water drainage system and water quality treatment
Fainvood Avenue Bridge Project ($190,000)
Recommended as part of Alligator Creek watershed Management Plan to improve
stormwater conveyance and solve street flooding
Saturn Avenue and Sherwood Street Project ($650,000)
Install new pipe system to alleviate house and street flooding
Coachman Road Project ($322,000)
Repair and upgrade retention facility to comply with permit requirements
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Enterprise Road Crossing Channel AB@ Project ($75,000)
Replace failing and undersized culverts under roadway
Arcturas Pond to Gulfto Bay Blvd. Project ($1.300,000)
Significant erosion along open drainage channel which has migrated outside of City
easement lines and is threatening to damage private property
Cliff Stevens Park Project ($295,000)
Existing retention and park facility on Alligator Creek which needs to be dredged to
restore facility to its original design performWlce
North Greenwood Stormwater Retrofit Project ($160.000)
Construction of several in-line sediment and debris trap systems to prevent excessive
. organic materials from being delivered to the Stevenson Creek Estuary. Project is
also part of a multifaceted effort to address significant citizen concerns regarding the
health of the estuary and its use
Stevenson Creek Dredging Project (Estuary Restoration) ($450,000)
Environmental restoration project targeting the removal of excess organic debris
which has accumulated in the estuary due to significant channel modifications and
intense development of the upstream portions of the watershed
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DESCRIPTION OF THE SERIES 1999 BONDS
General
The Series 1999 Bonds will be dated November 15, 1999. The Series 1999 Bonds will bear
interest at the rates and mature on November 1 in the amounts and at the times set forth on the cover
page of this Official Statement. The Series 1999 Bonds are to be issued as fully registered bonds
in denominations of$S,OOO or integral multiples thereof. Interest on the Series 1999 Bonds will be
payable semiannually on May 1 and November 1 of each year, commencing May 1, 2000, by check
or draft mailed to the registered owners, at their addresses as they appear on the registration books
orthe City maintained by the Bond Registrar, as orthe 15th day (whether or not a business day) of
the month preceding the interest payment date (the ltRecord Date"). Owne'rs of $ 1,000,000 or more
in aggregate principal amount of Series 1999 Bonds may receive interest by wire transfer, at the
Owner's expense, to a bank account designated in writing by the Owner not later than the Record
Date. Principal of, and premium if any, are payable at maturity, or upon redemption prior to
maturity, 'upon presentation and sun'ender thereof at the corporate trust office of the Paying Agent.
The Bank of New York, New York, New York, is acting as Paying Agent and Bond Registrar for
the Series 1999 Bonds.
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The Series 1999 Bonds will be initially issued in the form ora single fully registered Bond
for each maturity of the Series 1999 Bonds. Upon initial issuance, the ownership of each such Series
1999 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 in bookwentry form, all payments of principal, interest and premium, if any, on the Series
1999 Bonds will be made to DTC or the DTC Nominee as the sole registered owner of the
Series 1999 Bonds and payments to Beneficial Owners will be the responsibility oC DTC and
the DTC Participants as described below. See ItBook-Entry Only System.1t
With respect to Series 1999 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 DTC
Participant or to any indirect DTC Participant. See "Book-Entry Only System" for the definition of
"DTC 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 of the records ofDTC or any DTe Participant with respect to any ownership interest
in the Series 1999 Bonds; (ii) the delivery to any DTC Participant or any other person other than a
registered owner, as shown in the registration books kept by the Bond Registrar, of any notice with
respect to the Series 1999 Bonds, including any notice of redemption; or (Hi) the payment to any
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 1999 Bonds. The City, the Bond Registrar and the Paying Agent may treat and
consider the person in whose name each Series 1999 Bonds is registered in the registration books
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kept by the Bond Registrar as the holder and absolute owner of such Bond for the purpose of
payment of principal of, premium, ifany, and interest with respect to such Bond, for the 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, ifany, and interest on the Series 1999 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
Ordinance, and all such payments will be valid and effectual to satisfy and discharge the City's
obligations with respect to payment of principal of, premium, ifany, and interest on the Series 1999
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, ifany, and interest on the Series
1999 Bonds pursuant to the provisions of the Ordinance.
Optional Redemption
The Series 1999 Bonds maturing November 1, 2000 to November 1, 2008 arc not callable
prior to their maturity dates. The Series 1999 Bonds maturing after November 1, 2008 are subject
to optional redemption by the City, on and after November 1, 2008, 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 ifless than an entire maturity is redeemed, at the redemption prices (expressed as
~-) percentages of principal amount) set forth below, together with accrued interest to the date of
j redemption:
Redemption Period
Price
November 1,2008 through October 31,2009
November 1,2009 and thereafter
101%
100
Mandatory Redemption
The Series 1999 Bonds maturing on November 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 principal amount thereof plus interest accrued to the redemption date,
on November 1, ,and on each November 1 thereafter, in the following principal amounts in the
years specified:
Year
Amortization
Installment
Year
Amortization
Installment
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As long as the book~entry~only system is used for determining beneficial ownership of the
Series 1999 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. wHl he
responsible for notifying the DTC Participants, who will in turn be responsible for notifYing the
Beneficial Owners (as such terms are described below under the heading "Book-Entry Only
System"). Any failure of Cede & Co. to notifY any DTC Participant, or of any DTC Participant to
notify the Beneficial Owner of any such notice, will not affect the validity of the redemption of the
Series 1999 Bonds.
Notice of Redemption
Not more L~an 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 1999 Bonds to be redeemed at their addresses as they 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 1999
Bonds. Interest shall cease to accrue on any Series 1999 Bonds duly called for prior redemption,
after the redemption date, ifpayment thcreofhas been duly provided.
BookREntry Only System
The Series 1999 Bonds will be available in book-entry form only, in denominations of
$5,000 or any integral multiple thereof. Purchasers of the Series 1999 Bonds will not receive
certificates representing their interests in the Series 1999 Bonds purchased. The Underwriter is to
confirm original issuance purchases with statements containing certain terms of the Series 1999
Bonds purchased.
The following information regarding The Depository Trust Company, New York, New York
(nOTCIl) 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.
The Series 1999 Bonds will be held by OTC as securities depository. The ownership oCone
fully registered Series 1999 Bonds for each maturity, as set forth on the cover page hereof, will be
registered in the name oCCede & Co., as nominee for OTC. DTC is a limited~pwpose trust company
organized under the New York Banking Law, a "banking organizationll within the meaning of the
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New York Banking Law, a mcmber of the Federal Reserve System. a "clcaring corporation/t within
'1 the meaning of the New York Uniform Commercial Codc, and a "clearing agencyU registered
pursuant to the provisions of Section 17 A of the Sccurities Exchange Act of 1934, as amended.
DTC was created to hold sccurities of its participants C'DTC Participants") and to facilitatc the
settlement of securities transactions among OTC 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 includc securitics 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 OTC system is also
available to other entities such as security brokers and dcalcrs, banks and trust companies that clear
through or maintain a custodial rclationship with a OTC Participant.
Purchases of the Series 1999 Bonds may be made by or through brokers and dealers who are,
or act through, OTC Participants. Such DTe Participants and the persons for whom they acquire
interests in the Series 1999 Bonds as nominees will not receive certificated bonds, but each DTe
Participant will receive a credit balance in the records of DTC in the amount of such Dre
Participant's interest in the Series 1999 Bonds, which will be confirmed in accordance with DTC's
standard procedures. The ownership interest of the actual purchaser of each Bond (the "Beneficial
Owner") will be recorded in the records of the ore Participant. orc Participants are required to
provide Beneficial Owners with a written confinnation of their purchase containing details of the
acquired Series 1999 Bonds. Transfers of ownership interests in the Series 1999 Bonds will be
accomplished by book entry made by DTC and by the DTC Participants who act on behalfofthe
Beneficial Owners.
. The Paying Agent will make payments of principal of, redemption premium. if any, and
interest on the Series 1999 Bonds to OTC or its nomineet Cede & Co., as registered owner of the
Series 1999 Bonds. The current practice ofOTC is to credit the accounts of the DTC Participants
immediately upon receipt of moneys in accordance with their rcspective holdings as shown on the
records ofDTC. Payments by DTe Participants to Beneficial Owners will be in accordance with
standing instructions and customary practices such as those which are now in effect for municipal
securities held by DTC Participants in bearer form or registered in "street name" for the accounts of
customers, and will be the responsibility ofOTC Participants and not the responsibility ofDTC, the
Paying Agent or the City subject to any statutory or regulatory requirements as may be in effect 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 OTC Participant, or of any DTC
Participant to notifY the Beneficial Owner, of any such notice and its content or effect will not affect
the validity of the redemption of the Series 1999 Bonds called for redemption or of any other action
premised on such notice. Redemption of portions of any maturity of the Serics 1999 Bonds will
reduce llJe outstanding principal amount of such maturity held by orc. In such event, DTC may
implement, through its book-entry system, a redemption of Series 1999 Bonds held for the account
ofDTC Participants in accordance with its own rules or other agreements with OTC Participants,
and then pre Participants may implement a redemption of Series 1999 Bonds for the Beneficial
Owners.
~)
8
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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 WITH
RESPECT TO THE SERIES 1999 BONDS OR THE PROVIDING OF NOTICE OR
PAYMENT TO DTC PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION
OF SERIES 1999 BONDS FOR REDEMPTION.
In the event ofan insolvency ofDTe, ifDTC has insufficient securities in the fungible bulk
of securities in its custody (e.g., due to theft or loss) to satisfy the claims ofDTe Participants with
respect to deposited securities and is unable by application of (i) cash dcposits 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 (Hi) other resources~ to obtain securities necessary to eliminate the
insufficiency~ OTC 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 DTe,
DTe Participants or others will distribute payments of principal ot: premiwn, ifany, and interest on
the Series 1999 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 1999
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 ofbook~
entry transfers through DTC (or any successor securities depository). Under such circumstances~
the City and the Bond Registrar will authenticate and deliver certificated Series 1999 Bonds.
In the event that the book-entry only system is discontinued, the following provisions will
govern the transfer and exchange of Series 1999 Bonds. The Series 1999 Bonds will be exchanged
for an equal aggregate principal amount of corresponding bonds in other authorized denominations
and of the same series and maturity, upon surrender thereof at the principal corporate trust office of
the Bond Registrar. The transfer of any Series 1999 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 1999 Bonds, along with the social security number or federal employer identification number
of such transfere,e. The City and the Bond Registrar may charge the registered owners a sum
sufficient to reimburse them for any expenses incurred in making any exchange or transfer after the
first such exchange or transfer following the delivery of the Series 1999 Bonds. The Bond Registrar
or the City may also require payment from the registered owners or their transferees~ as the case may
be~ of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in
relation thereto. Such charges and expenses shall be paid before any such new Series 1999 Bonds
shall be delivered. Neither the City nor the Bond Registrar shall be required to register the transfer
or exchange of any Series 1999 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
~~
9
91- LI1
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~1
interest payment date or, in the case of any proposed redemption of a Series 1999 Bonds, after such
Series 1999 Bonds or any portion thereof has been selected for redemption.
SECURITY FOR THE SERIES 1999 BONDS
Net Revenues. The principal of and premium, if any, and interest on the Series 1999 Bonds
are payable solely from and secured by an irrevocable first lien upon and pledge orthe Net R~venues
(as hereinafter defined) derived and collected by the City from the operation of the stonnwater
management system of the City (the "Systemll). ItNet Revenueslt are defined by the Ordinance to
include aU 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 1999 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 1999 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 1999 Bonds or to make any of the required
debt service, reserve or other payments, and any failure to pay the Series 1999 Bonds shall not give
rise to a lien upon any property of or in the City, except the Net Revenues.
.-)
'j Rate Covenant. In the Ordinance, the City has covenanted to fix, establish, revise from time
to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges
for the use of the products, services and facilities of the System which will always provide Net
Revenues in each Fiscal Year sufficient to pay one hundred fifteen percent (115%) of the Bond
Service Requirement coming due in such Fiscal Year on the Outstanding Bonds. Such rates, fees,
rentals or other charges may not be reduced so as to render them insufficient to provide revenues for
the purposes provided therefor by the Ordinance.
Reserve Account; Reserve Fund Surety Bond. The Ordinance creates a Reserve Account
to be funded, or into which there shall be deposited a reserve fund surety policy providing coverage,
in an amount equal to the Reserve Requirement. The AReserve Requirement@ is the lesser of (i)
the Maximum Bond Service Requirement, (ii) 125% of the Average Annual Bond Service
Requirement or (iii) the largest amount as shall not adversely affect the exclusion of interest on the
Bonds from gross income for Federal income tax purposes.
Application has been made to the MBIA for a commitment to issue a surety bond (the "Debt
Service Reserve Fund Surety BondU) The Debt Service Reserve Fund Surety Bond will provide that
upon notice from the Paying Agent to MBlA to the effect that insufficient amounts are on deposit
in the Bond Service Fund to pay the principal of (at maturity or pursuant to mandatory redemption
requirements) and interest on the Series 1999 Bonds, MBIA will promptly deposit with the Paying
Agent an amount sufficient to pay the principal of and interest on the Series 1999 Bonds or the
.~
10
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available amount of the Debt Service Reserve Fund Surety Bond, whichever is less. Upon the later
of: (i) three (3) days after receipt by MBIA of a Demand for Payment in the form attached to the
Debt Service Reserve Fund Surety Bond, duly executed by the Paying Agent; or (ii) the payment
date of the Bonds as specified in the Demand for Payment presented by the Paying Agent to MBIA,
MBIA will make a deposit of funds in an account with State Street Bank and Trust Company, N.A.,
in New York, New York, or its successor, sufficient for the payment to the Paying Agent, of amounts
which are then due to the Paying Agent (as specified in the Demand for Payment) subject to the
Surety Bond Coverage.
The available amount of the Debt Service Reserve Fund Surety Bond is the initial face
amount of the Debt Service Reserve Fund Surety Bond less the amount of any pervious deposits by
MBIA with the Paying Agent which have not been reimbursed by the City. The City and MBIA
have entered into a Financial Guaranty Agreement dated as of November 1, 1999 (the "Agreement").
Pursuant to the Agreement, the City is required to reimburse MBIA, within one year of any deposit,
the amount of such deposit made by MBIA with the Paying Agent under the Debt Service Reserve
Fund Surety Bond. Such reimbursement shall be made only after payment of Cost of Operation and
Maintenance of the System and after the required deposits into the Bond Service Fund have been
made.
"
,
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Under the terms of the Agreement, the Paying Agent is required to reimburse MBIA, with
interest, until the face amount of the Debt Service Reserve Fund Surety Bond restored from the first
moneys available in the Revenue Fund after payment of Cost of Operation and Maintenance of the
System and after the required deposits into the Bond Service Fund have been made. No optional
redemption of Bonds may be made until MBINs Debt Service Reserve Fund Surety Bond is
reinstated. The Debt Service Reserve Fund Surety Bond will be held by the Paying Agent in the
Reserve Account and is provided as an alternative to the City depositing funds equal to the Reserve
Requirement for Outstanding Bonds. The Debt Service Reserve Fund Surety Bond will be issued
in the face amount equal to Maximum Bond Service Requirement for the Bonds under the premium
therefore will be fully paid by the City at the time of delivery of the Bonds.
Additional Parity Obligations. Additional Parity Obligations, payable on a parity from the
Net Revenues with the Series 1999 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
stormwater management systems which are to be consolidated with the System and operated as a
single combined utility. Additional Parity Obligations. other than for refunding purposes, will be
issued only upon compliance with all of the conditions set forth in the Ordinance, including the
following:
(1) There shall have been obtained and filed with the Clerk a certificate of an
independent certified public accountant stating: (a) that the books and records of the City relative
to the System and the Pledged Revenues have been reviewed; and (b) the amount of the Pledged
Revenues derived for any consecutive twelve (12) months out of the preceding twentywfour (24)
months preceding the date of issuance of the proposed Additional Parity Obligations as adjusted
~
11
11-L/1
pursuant to paragraphs 2, 3, 4 and/or 5 below, is equal to not less than 120% of the Maximum Bond
') Service Requirement becoming due in any Fiscal Year thereafter on (i) all Bonds issued under this
Ordinance, if any, then Outstanding, and (ii) on the Additional Parity Obligations with respect to
which such certificate is made.
(2) Upon recommendation of the Consulting Engineers, the Net Revenues
certified pursuant to paragraph l(b) above may be adjusted by including: (a) 100% of the additional
Net Revenues which in the opinion of the Consulting Engineer would have been derived by the City
from rate increases adopted before the Additional Parity Obligations are issued, if such rate increases
had been implemented during the test period described in paragraph l(b) above, and (b) 100% of the
. additional Net Revenues estimated by the Consulting Engineer to be derived during the first full
twelve month period after the facilities of the System are extended, enlarged, improved or added to
with the proceeds of the Additional Parity Obligations with respect to which such certificate is made.
(3) Upon recommendation of the Consulting Engineers if the Additional Parity
Obligations are to be issued for the purpose of acquiring an existing stonnwater system andlor any
other utility system, the Net Revenues certified pursuant to paragraph l(b) above may be adjusted
by including: 80% of the additional estimated Net Revenues which in the written opinion of the
Consulting Engineers will be derived from the acquired facility during the first full 12-month period
after the issuance of such Additional Parity Obligations (the Consulting Engineers' report shall be
based on the actual operating revenues of the acquired utility for a recent 12-month period adjusted
to reflect the City's ownership and the City's rate structure in effect with respect to the System at the
time of the issuance ofthe Additional Parity Obligations).
)
(4) Upon recommendation of the Consulting Engineer, if the City shall have
entered into a contract, which contract shall be for a duration of not less than the final maturity of
the proposed Additional Parity Obligations, with any public body, whereby the City shall have
agreed to furnish any services creating Gross Revenues, then the Net Revenues certified pursuant
to paragraph 1 (b) above may be increased (to the extent such amounts were not otherwise reflected
in such Net Revenues) by the minimum amount which the public body shall guarantee to pay in any
one year for the furnishing of services by the City, after deducting from such payment the estimated
Cost of Operation and Maintenance attributable in such year to such services.
(5) Upon recommendations of the Consulting Engineers, if there is an estimated
increase in Net Revenues to be received by the City as a result of additions, extensions or
improvements to the System during the period of three (3) years following the completion of such
additions, extensions or improvements financed with the proceeds of Bonds or Additional Parity
Obligations, then the Net Revenues certified pursuant to paragraph 1(b) above shall be increased by
fifty percent (50%) of the average annual additional Net Revenues calculated for such three year
period.
(6) The City need not comply with the provisions ofparagraph 1 above ifand to
the extent the Bonds to be issued are refunding bondst and jf the City shall cause to he delivered a
certificate of the Finance Director setting forth the Bond Service Requirements (i) for the Bonds then
Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that
I
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12
99-tf1
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the Bond Service Requirements in any particular year pursuant to (ii) above is not greater than the
Bond Service Requirements in the corresponding year set forth pursuant to (i) above.
(7) The City need not comply with the provisions of paragraph 1 above ifand to
the extent the Bonds to be issued are for the purpose of providing any necessary additional funds
required for completion of any improvements to the System ("Completion Bonds") if originally
financed with the proceeds of Bonds; provided that such Completion Bonds for which the City need
not comply with the provision of such paragraph (I) above may not exceed 10% of the total principal
amount of Bonds estimated to be required for such improvements to the System at the time of
issuance of the initial Series of Bonds to finance such improvements.
(8) The City shall not be in default in the carrying out of any ofthe obligations
asswned under this Ordinance and no event of default shall have occurred under this Ordinance and
shall be continuing, and all payments required by this Ordinance to be made into the funds and
accounts established hereunder shall have been made to the full extent required.
(9) The ordinance or resolution authorizing the issuance of the Additional Parity
Obligations shall recite that all of the covenants contained herein will be applicable to such
Additional Parity Obligations.
See Appendix C, "Swnmary of Certain Provisions of the Ordinance - Covenants of the Issuer
- Issuance of Additional Parity Obligations.1I
') Series 1999 Bonds Not a Debt of the City
The Series 1999 Bonds shall not constitute a general obligation or indebtedness of the City
within the meaning of any constitutional, statutory or charter provision or limitation, and no
Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the
City or taxation in any form of real or personal property therein for the payment of the principal of
and interest on the Series 1999 Bonds or to compel the City to pay such principal and interest from
any other funds of the City except the Net Revenues. The Series 1999 Bonds shall not constitute a
lien upon any property ofar in the City, but shall constitute a lien only on the Net Revenues all in
the manner proyided in the Ordinance.
MUNICIPAL BOND INSURANCE
The following information has been furnished by MBIA Insurance Corporation
('tMBIA" or the uInsurer") for use in this Omcial Statement. Reference is made to
APPENDIX F herein Cor a specimen DC MBIAts policy.
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13
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MBINs policy. unconditionally and irrevocably guarantees the full and complete payment
required to be made by or on behalf ofthe County to the Paying Agent or its successor of an amount
equal to (1) the principal of (either at the stated maturity or by an advancement of maturity pursuant
to a mandatory sinking fund payment) and interest on, the Series 1999 Bonds as such payments shall
become duc but shall not be so paid (except that in the event of any acccleration of the due date of
such principal by reason of mandatory or optional redemption or acceleration resulting from default
or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund
payment, the payments guaranteed by MBIA's Policy shall be made in such amounts and at such
times as such payments of principal would have been due had there not been any such acceleration);
and (2) the reimbursement of any such payment which is subsequently recovered from any owner
of the Series 1999 Bonds pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such owner within the meaning of any applicable
bankruptcy law (a npreference").
MBIA's policy does not insure against loss of any prepayment premium which may at any
time be payable with respect to any Series 1999 Bond. MBIA's Policy does not, under any
circumstance, insure against loss relating to: (1) optional or mandatory redemptions (other than
mandatory sinking fund redemptions); (2) any payments to be made on an accelerated basis; (3)
payments of the purchase price of Series 1999 Bonds upon tender by an owner thereof; or (4) any
Preference relating to (1) through (3) above. IvIBIA's policy also does not insure against nonpayment
of principal of or interest on the Series 1999 Bonds resulting from the insolvency, negligence or any
other act or omission of the Paying Agent or any other paying agent for the Series 1999 Bonds.
) Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
. ../ writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by:MBIA from the Paying Agent or any owner of a Series 1999 Bond the payment of an
insured amount for which is then due, that such required payment has not been made, MBIA on the
due date of such payment or within one business day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust
Company, N.A., in New York, New York~ or its successor, sufficient for the payment of any such
insured amounts which are then due. Upon presentment and surrender of such Series 1999 Bonds
or presentment of such other proof of ownership of the Series 1999 Bonds, together with any
appropriate instruments of assignment to evidence the assignment of the insured amounts due on the
Series 1999 Bonds as are paid by MBIA, and appropriate instruments to effect the appointment of
MBIA as agent for such ownern of the Series 1999 Bonds in any legal proceeding related to payment
of insured amounts on the Series 1999 Bonds, such instruments being in a form satisfactory to State
Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse
to such owners or the Paying Agent payment of the insured amounts due on such Series 1999 Bonds,
less any amount held by the Paying Agent for the payment of such insured amounts and legally
available therefor.
MBIA is the principal operating subsidiary ofMBIA Inc., aNew York Stock Exchange listed
company (the "Company"). MBIA Inc. is not obligated to pay the debts of or claims against IvIBIA.
MBIA is domiciled in the State of New York and licensed to do business in and subject to
regulation under the laws of all 50 states, the District of Columbia, the Commonwealth of Puerto
~J
14
91.-t/1
')
Rico, the Commonwealth of the Northem Mariana Islands, the Virgin Islands of the United States
and the Territory of Guam. MBIA has two European branches, one in the Republic of France WId
the other in the Kingdom of Spain. New York has laws prescribing minimum capital requirements,
limiting classes and concentrations of investments and requiring the approval of policy rates and
forms. State laws also regulate the amount of both the aggregate and individual risks that may be
insured, the payment of dividends by MBIA, changes in control and transactions among affiliates.
Additionally, MBIA is required to maintain contingency rcseIVes on its liabilities in certain amounts
and for certain periods oftime.
Effective February 17, 1998, the Company acquired all of the outstanding stock of Capital
Markets Assurance Corporation C'CMAC") through a merger with its parent CapMAC Holdings Inc.
Pursuant to a reinsurance agreement, CMAC has ceded all of its net insured risks (including any
amounts due but unpaid from third party reinsurers), as well as its unearned premiums and
contingency reseIVes, to MBIA and MBIA has reinsured CMAC's net outstanding exposure. The
Company is not obligated to pay the debts of or claims against CMAC.
As of December 31, 1998, MBIA had admitted assets of $6.5 billion (audited), total
liabilities of$4.2 billion (audited), and total capital and sWl'lus of$2.3 billion (audited) determined
in accordance with statutory accounting practices prescribed or permitted by insurance regulatory
authorities. As of March 31, 1999, MBIA had admitted assets of $6.7 billion (unaudited), total
liabilities of $4.4 billion (unaudited), and total capital and sWl'lus of $2.3 billion (unaudited)
detennined in accordance with statutory accounting practices prescribed or permitted by insurance
regulatory authorities.
Furthennore, copies ofMBIA's year end financial statements prepared in accordance with
statutory accounting practices are available from MBIA. A copy of the Annual Report on Form 10.
K ofMBIA Inc. is available from tvlBlA or the Securities and Exchange Commission. The address
ofMBIA is 113 King Street, Annonk, New York 10504. The telephone number is (914) 273-4545.
Moody's Investors Service rates the claims-paying ability ofMBIA "Aaa."
Standard & Poor's Ratings SeIVices, a division of The McGraw-Hill Companies, Inc. rates
the claims-paying ability ofMBIA "AAA."
Fitch mCA, Inc. (fonnerly known as Fitch Investors SeIVice, L.P.) rates the claims paying
ability ofMBIA "AAA."
Each rating ofMBIA should be evaluated independently. The ratings reflect the respective
rating agency's current assessment of the creditworthiness ofMBIA and its ability to pay claims on
its policies of insurance. Any further explanation as to the significance of the above ratings may be
obtained only from the applicable fating agency.
The above ratings are not recommendations to bUYt sell or hold the Series 1999 Bonds, and
such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any
downward revision or withdrawal of either or both ratings may have an adverse effect on the market
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price of the Series 1999 Bonds. MBIA does not guarantee the market price of the Series 1999 Bonds
nor does it guarantee that the ratings on the Series 1999 Bonds will not be reversed or withdrawn.
The insurance provided by this Policy is not covered by the Florida Insurance Guaranty
Association created under Chapter 631, Florida Statutes.
,Rights Granted Insurer
Generally, in connection with its insurance of an issue of municipal securities, the Insurer .
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 the Insurer's consent, in each
case so long' as the Insurer 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 the Insurer's consent. The specific rights, if any, granted to the Insurer in
connection with its insurance of the Bonds are set forth in "APPENDIX C - SUMMARY OF
CERTAIN PROVISIONS OF THE ORDINANCE.II
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16
99-L/7
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DEBT SERVICE REQUI~MENTS
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Fiscal Year
Ending
September 30 i
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Principal
Interest
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Total
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SOURCES AND USES OF FUNDS
/)
SOURCES
Principal Amount of Series 1999 Bonds
Accrued Interest
Total Sources
USES
Deposit to Construction Fund
Deposit to Interest Account
Costs of Issuance including Underwriter's
Discount and Bond Insurance Premium
Total Uses
.
Preliminary, subject to change.
THE STORMWATER MANAGEMENT SYSTEM
)
"~j Physical Description
The City of Clearwater was created in 1923 by Chapter 971 0, Special Laws of Florida, with
all governmental, corporate and proprietary powers to enable it to conduct municipal government,
perfonn municipal functions and render municipal services, and to exercise any power for municipal
purposes except where expressly prohibited by law. A major municipal function of the City of
Cleanvater is the efficient, economic, and safe operation of the City stonnwater infrastructure for
the health, safety, and general welfare of the public. The management of stOlIDwater in the City was
established in 1991 as a city utility enterprise in accordance with Florida Statutes and funded by a
stonnwater utility fee for stormwater management service, levied against all developed property
within the City to provide planning, design, construction, operation, maintenance, regulation,
surveying, and inspection of the stonnwater management facilities within the City. Those services
provide system management for approximately 120 miles of stann sewers, 9 square miles of open
water, and more than 14,400 structures (e.g. culverts, flumes, weirs, catch basins, etc.) to manage
drainage for the City, having a population of approximately 104,000 permanent residents and 20,000
winter residents.
Management
The City has a Commission-Manager fonn of municipal government. The Mayor-
Commissioner and Commissioners are elected by the City voters on an at-large basis. All have
":..J
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voting power at Commission meetings which are chaired by the Mayor-Commissioner. The City
Commission appoints the City Manager and the City Manager is responsible for appointing all
officers and employees in the administrative service of the City~ including the Public Works
Administrator.
Public Works Administration is administered by the Public Works Administrator who reports
to the City Manager through the Deputy City Manager. The stormwater system is one of seven
utilities (Water, Sewer, Reclaimed Water, Gas, Solid Waste~ Recycling~'and Stormwater) billed on
a consolidated basis by the Clearwater Utility Customer Service Department.
Richard J. Baier, P.E. currently serves as the Public Works Administrator. He received his
Bachelor of Science Degree in Civil Engineering from the University of South Florida in 1986 and
his Master of Science in Engineering Management from the University of South Florida in 1990.
Mahshid D. Arasteh, P.E. serves as the Director of the Engineering Department and reports
to the Public Works Administrator. She received her Bachelor of Science Degree in Civil
Engineering from the University of Pennsylvania in 1980 and her Masters of Science Degree in Civil
and Mechanical Engineering in 1982. She is a member of the Florida Engineering Society and the
Institute of Traffic Engineers, and has been a registered Professional Engineer in the state of Florida
since 1987.
\
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,
Gary A. Johnson serves as the Director of the Transportation and Drainage Department and
reports to the Public Works Administrator. He received his Bachelor of Building Construction
, degree in 1977 from the University of Florida and in 1979~ obtained his General Contractor License
from the State of Florida. He continues to serve on the Pinellas County Public Works Academy
Board of Trustees, a position he has held since 1989.
Rates, Fees and Charges ,
The City uses a measurement of one equivalent residential unit or ERU as the basis for the
stonnwater management utility fee. The fate per ERU was unchanged from the inception of the
utility on January 1, 199] until 1998 when annual increases were adopted for five fiscal years
beginning October 1, 1998. The monthly rates at inception and as adopted in 1998 are:
Effective Date
January 1, 1991
October 1, 1998
October 1, 1999
October 1, 2000
October 1, 2001
October 1, 2002
Rate Per ERU
$3.00
4.00
4.17
4.35
4.54
4.73
{J~J3
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19
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Single-family homes, multifamily units, condominium units. apartments and mobile homes
are rated as one ERU per dwelling unit. Nonresidential property is charged at the rate of 1,830
square feet of impervious area per ERU.
Historical Net Revenues
, .
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FINANCIAL STATEMENTS
')
The combined financial statements and Stonnwater enterprise fund financial statements of
the City at September 30, 1998 and for the Fiscal Year then ended, appended hereto as Appendix
B, have been excerpted from the financial statements contained in the City's Comprehensive Annual
Financial Reports for the Fiscal Year ending September 30, 1998.
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 an 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
~')
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 Pennitted Investments, as described in the Ordinance.
LEGALITY FOR INVESTMENT
The Series 1999 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 aU state, county, municipal and other public funds.
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TAX EXEMPTION
.-.....
,
The Internal Revenue Code of 1986, as amended (the "Code") establishes certain
requirements which must be met subsequent to the issuance and delivery of the Series 1999 Bonds
in order that interest on the Series 1999 Bonds be and remain excluded from gross income for
purposes of federal income taxation. Non-compliance may cause interest on the Senes 1999 Bonds
to be included in federal gross income retroactive to the date of issuance of the Series 1999 Bonds
regardless of the date on which such nonwcompliance 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 1999 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
oCthe United States. The City has covenanted in the Ordinance to comply with such requirements
in order to maintain the exclusion from federal gross income of the interest on the Series 1999
Bonds.
In the opinion of Bond Counsel, asswning compliance with the aforementioned covenants,
under existing laws, regulations, judicial decisions and rulings, interest on the Series 1999 Bonds
is excluded from gross income for purposes of federal income taxation. Interest on the Series 1999
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 1999 Bonds may be subject to the
alternative minimum tax when any Series 1999 Bond is held by a corporation. The alternative
minimum taxable income of a corporation must be increased by 75% of the excess of such
corporation's adjusted current earnings over its alternative minimum taxable income (before this
adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will
include interest on the Series 1999 Bonds. The Series 1999 Bonds are exempt from aU 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 1999 Bonds. Prospective purchasers of Series 1999 Bonds should be aware that
the ownership of Series 1999 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 1999 Bonds, (ii) the reduction of the loss reserve deduction for property and casualty
insurance companies by 15% of certain items, including interest on the Series 1999 Bonds, (Hi) the
inclusion of interest on the Series 1999 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 1999 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 1999 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, OWNERSIllP, SALE OR DISPOSITION OF THE SERIES 1999 BONDS
AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HA VB ADVERSE
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FEDERAL TAX CONSEQUENCES FOR CERTAJN INDIVIDUAL AND CORPORATE
REGISTERED OWNERS. PROSPECTIVE SERIES 19Q9 REGISTERED OWNERS SHOULD
CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.
<~
During recent years legislative proposals have been introduced in Congresss and in some
cases enacted that altered certain federal tax consequences resulting from the ownership of
obligations that are similar to the Series 1999 Bonds. In some cases these proposals have contained
provisions that altered these consequences on a retroactive basis. Such alteration of federal tax
consequences may have affected the market value of obligations similar to the Series 1999 Bonds.
From time to times legislative proposals are pending which could have an effect on both the federal
tax consequences resulting from ownership of Series 1999 Bonds and their market value. No
assurance can be given that legislative proposals will not be introduced or enacted that would or
might apply tat or have an adverse effect upont the Series 1999 Bonds.
Tax Treatment of Original Issue Discount
~
,
Under the Codet the difference between the maturity amount of the Series 1999 Bonds
maturing.in the years through (the "Discount Bonds") and the initial
offering price to the publics excluding bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters or wholesalerst at which price a substantial amount of Series
1999 Bonds of the same maturity was sold is "original issue discount." Original issue discount will
accrue over the lenn of such Series 1999 Bonds at a constant interest rate compounded periodically.
A purchaser who acquires such Series 1999 Bonds in the initial offering at a price equal to the initial
offering price thereofto 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 1999 Bonds, and will increase his adjusted basis in such Series 1999
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 1999 Bonds. The federal income tax consequences of the
purchases ownership and redemptions sale or other disposition of the Series 1999 Bonds which are
not purchased in the initial offering at the initial offering price may be detennined according to rules
which differ from those above. Owners of such Series 1999 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 1999 Bonds and with respect to the state and
local tax consequences of owning and disposing of such Series 1999 Bonds.
RATINGS
Standard & Poor's Corporation ("Standard & POOr'S") and Moody's Investors SelVice, Inc.
("Moody's") are expected to issue their ratings of II II and II /' respectivelys with respect to the
Series 1999 Bonds, based on the issuance of the Policy by MBIA. The ratings reflect the view of
Standard & Poor's and Moody's and any explanation of the significance of such ratings may be
'-.)
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obtained only from Standard & Poorls and Moody's. There is no assurance that such ratings will
remain in effect for any given period oftime 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
downward revision or withdrawal ofthe ratings may have an adverse effect on the market price and
marketability of the Series 1999 Bonds.
LITIGATION
[Describe tbe Pinellas County School Board and St. Pete Junior College litigation which was
excluded from the validation Judgment]
Except as described above, 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 1999 Bonds or (ii)
questioning or affecting the validity of the Series 1999 Bonds, the Ordinance or the pledge of the Net
Revenues by the City or the proceedings for the authorization, sale, execution or delivery of the
Series 1999 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 JiabiHty, in excess of applicable
insurance coverage, resulting therefrom will not materially adversely affect the financial position or
results of operations of the City.
.--.~
,
VALIDATION
The Series 1999 Bonds were validated and confirmed by a fin'al judgment of the Circuit
Court of the Sixth Judicial Circuit of the State of Florida in and for Pinellas County, Florida on
August 24, 1999 and the time for taking an appeal from such judgment has expired, with no appeal
having been taken.
ADVISORS AND CONSULTANTS
The City has retained advisors and consultants in connection with the issuance ofthe Series
1999 Bonds. These advisors and consultants are compensated from a portion ofthe proceeds of the
,Series 1999 Bonds, identified as "Costs of Issuance" under the heading "ESTIMATED SOURCES
AND USES OF FUNDS" herein; and such compensation, is, in some instances, contingent upon the
issuance of the Bonds and the receipt of the proceeds thereof.
Financial Advisor. The City has retained First Union Securities, Inc., St. Petersburg,
Florida, as financial advisor (the "Financial Advisor") in connection with the preparation of the
.~
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City's plan of financing and with respect to the authorization and issuance of the Selies 1999 Bonds.
The fees of the Financial Advisor will be paid from proceeds of the Series 1999 Bonds and such
payment is contingent upon the issuance of the Series 1999 Bonds.
Bond COll1,sel. 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.
Disclosure Cou1Isel. 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 ofthe Bonds.
CONTINillNG DISCLOSURE
~)
The City has covenanted for the benefit of the holders and beneficial owners of the Series
1999 Bonds to provide certain financial infonnation and operating data relating to the City by not
later than June 1 in each year commencing June 1, 1999 (the "Annual Report"), and to provide
notices ofthe occurrence of certain enumerated events, if deemed by the City to be material. The
Atmual Report will be filed by the City with each Nationally Recognized Municipal Securities
Information Repository ("NRMSIR"), and with the State of Florida Repository, ifand 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 infonnation 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. II These covenants
have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
The City has never failed to comply in all material respects with any previolls 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 1999 Bonds upon an event of
default under the Ordinance are in many respects dependent upon judicial actions which are often
subject to discretion and delay. Under existing constitutional and statutory law and judicial
decisions, including specifically Title IT of the United States Code, the remedies specified by the
federal bankruptcy code, the Ordinance and the Series 1999 Bonds may not be readily available or
may be limited. The various legal opinions to be delivered concurrently with the delivery of the
Series 1999 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.
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CERT AlN LEGAL MATTERS
Certain legal matters in connection with the issuance of the Series 1999 Bonds are subjcct
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 1999 Bonds and wiU be
printed on such Bonds. The proposed fonn of Bond Counsel opinion is attached hereto as Appendix
E and reference is made to such form of opinion for the complete text thereof. Certain legal matters
wHl 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.
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 indushial 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.
FINANCIAL ADVISOR
The Financial Advisor for the City is First Union Securities, Inc., with offices located at 111
2nd Avenue N.E., Suite 815, St. Petersburg, Florida 33701, telephone nwnber (813) 898-0812.
YEAR 2000 COMPUTER COMPATIBILITY
On January 1, 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 1") 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
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1 review and has detennined 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 1, 2000. The City cannot, and does not, provide
any assurance that vendors, paying agents and other third parties providing sezvices to the City have
or are effectively dealing with year 2000 issues as the year 2000 approaches.
The following information has been provided by DTC, regarding year 2000 compatibility
by DTC. DTC management is aware that some computer applications, systems, and the like for
processing data ("Systemslt) that are dependent upon calendar dates, including dates before, on, and
after Janumy 1,2000, may encounter "Year 2000 problems. It DTC has infonned its Participants and
other members of the financial community (the ItIndustryll) that it has developed and is implementing
a program so that its Systems, as the same relate to the timely payment of distributions (including
principal and income payments) to securityholders, book-entry deliveries, and settlement of trades
with DTC C'DTC Services"), continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally, DTC's plan includes
a testing phase, which is expected to be completed within appropriate time frames.
..')
However, DTC's ability to perform properly its services is also dependent upon other parties,
including but not limited to issuers and their agents, as well as third "arty vendors from whom DTe
licenses software and hardware, and third party vendors on whom DTC relies for infonnation or the
provision of services, including telecommunication and electrical utility service providers, among
others. DTC has infonned the Industry that it is contacting (and will continue to cOI:1tact) third party
vendors from whom DTC acquires services to: (i) impress upon them the importance of such
services being Year 2000 compliant; and (ii) detennine the extent of their efforts for Year 2000
remediation (and, as appropriate testing) of their services. In addition, DTC is in the process of
developing such contingency plans as it deems appropriate.
According to DTC, the foregoing infonnation with respect to DTC has been provided to the
Industry for information purposes only and is not intended to serve as a representation, warranty, or
contract modification of any kind.
MISCELLANEOUS
The references, excerpts and summaries of aU documents referred to herein do not purport
to be complete statements of the provisions of such docwnents, and reference is directed to all such
documents for full and complete statements ofal1 matters of fact relating to the Series 1999 Bonds,
the security for the payment of the Series 1999 Bonds, and the rights and obligations of holders
thereof.
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The infonnation contained in this Official Statement involving matters of ~pinion or of
estimates, whether or not so expressly stated, are set forth as such and not as representations of fact,
and no representation is made that any of the estimates will be realized. Neither this Official
, Statement nor any statement which may have been made verbally or in writing is to be construed as
a contract with the holders of the Series 1999 Bonds.
The execution and delivery ofthis Official Statement by its Mayor and its City Manager has
been duly authorized by the City Commission.
CITY OF CLEARWATER, FLORIDA
Brian Aungst, Sr., Mayor-Commissioner
Michael J. Roberto, City Manager
I
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99-11
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate") is exccutcd and
delivered by the City of Clearwater~ Florida (the "Issuer") in connection with the. issuance of its $
Stonnwater Revenue Bonds, Series 1999 (the "Series 1999 Bonds"). The Series 1999 Bonds
are being issued pursuant to Ordinance No. 6378-99 enacted by the City on April 15, 1999 (the
"Ordinance"). 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 1999
Bondholders and,in order to assist the original undetwriters ofthe Series 1999 Bonds in complying
with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission ("SEe") pursuant
to the Securities Exchange Act of 1934 (the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise
provided herein, the Issuer shall provide to all of the nationally recognized municipal securities
information repositories described in Section 4 hereof (the "NRMSlRs"), and to any state
information depository that is established within the State of Florida (the lISID"), on or before June
30 of each year, commencing June 30, 2000, the infonnation set forth below in this Section 2.
Notwithstanding the immediately preceding sentence, to the extent any such information does not
become available to the Issuer before June 30 of any year, the Issuer shall provide such information
when it becomes available, but no later than one year following the end of the Issuer's Fiscal Year.
(A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding
Fiscal Year (the "CAFR"), which shall include the audited financial statements ofthe Issuer for the
immediately preceding Fiscal Year prepared in accordance with Generally Accepted Accounting
Principles, as modified by applicable State of Florida requirements and the governmental accounting
standards promulgated by the Government Accounting Standards Board; provided, however, if the
audited financial statements of the Issuer are not completed prior to April 30 of any year, the Issuer
shall provide unaudited financial statements on such date and shall provide the audited financial
statements as soon as practicable following their completion; and
(B) to the extent not set forth in the CAFR, additional financial infonnation 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 1999 Bonds (as amended, the "Official
Statement"), as set forth below:
1. Updates ofthe financial information set forth in the Official Statement under
the subcaptions ARates, Fees and Charges@ and AHistorical Net Revenues@ under the
principal captions "THE STORMW A TER MANAGEMENT SYSTEMlI ( in the case of the
material under the caption A.Historicul Net Revenues,@ 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
1999 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 NRl\1SIRs or the Municipal Securities Rulcmaking Board (the "MSRB") and to the SID, on
a timely basis, notice of any of the following events, if such event is material with respect to the
Series 1999 Bonds or the Issuer's ability to satisfy its payment obligations with respect to the Series
1999 Bonds:
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on the debt service reserve fund reflecting financial difficulties;
(0) Unscheduled draws on credit enhancement reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perfonn;
(F) Adverse tax opinions or events affecting the tax-exempt status of the Series 1999
Bonds;
(G) Modifications to rights of Series 1999 Bondholders;
(H) Redemptions;
(I) Defeasances;
(1) Release, substitution, or sale of property securing repayment of the Series 1999
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.
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
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the Issuer, such other events are matcrial with respect to the Series 1999 Bonds, but the Issuer docs
not specifically undertake to commit to provide any such additional notice of the occurrence of any
material event except those events listed above.
Whenever the Issuer obtains knowledge of the occurrcnce of a significant event described
in this Section 3, the Issuer shall as soon as possible detennine if such event would be material under
applicable federal securities law to holders of Series 1999 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:
. Bloomberg Municipal Repositories
P.O. Box 840Princeton, N.J. 08542 -0840Phone: (609) 279-3225Fax: (609) 279M
5962E-mail: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive Fort Lee, NJ 07024Phone: (201) 346-0701Fax: (201) 947-
0107E-maiJ: nnnsir@dpcdata.com
Standard & Poor===s J. J. Kenny Repository
55 Water Street45th FloorNew. York, NY 1004 1 Telephone: (212) 438-
4595Facsimile: (212) 438-3975
Thomson NRMSIR
Attn: Municipal Disclosure395 Hudson Street, 3d FloorNew York, NY 10014Phone:
(212) 807-5001 OR (800) 689-8466Fax: (212) 989-2078E-mail: Disclosure@tfu.com
(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
cUlTently be obtained by calling the SEes Fax on Demand Service at 202/942-8088 and requesting
document number 0206.
SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision
in the Ordinance to the contrary, failure of the Issuer to comply with the provisions ofthis Disclosure
Certificate shall not be considered an event of default under the Ordinance; provided, however, any
DH3
99-'17
,""' Series 1999 Bondholder may take such actions as may be neccssary and appropriateJ including
} pursuing an action for mandamus or specific perfonnanceJ as applicablcJ by court ordcrt to cause the
Issuer to comply with its obligations hereunder. For purposes of this Disclosurc CcrtificatcJ lIScrics
1999 Bondholder" shall mean any person who (A) has the powcr, directly or indircctlYt to vote or
consent with respect tOt or to dispose of ownership oft any Series 1999 Bonds (including persons
holding Series 1999 Bonds through nominees, depositories or other intenncdiaries), or (B) is treated
as the owner of any Series 1999 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 entitiest which have been
submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document incorporated
by reference is a final official statementJ 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 timcJ
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 tenninate upon (A) the legal defeasance, prior redemption or payment in full of all
~ ~", of the Series 1999 Bonds, or (B) the termination of the continuing disclosure requirements of the
, Rule by legislativeJ judicial or administrative action.
SECTION 9. AMENDMENTS. Notwithstanding any other provision of this
Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be
waived, if such amendment or waiver is supported by an opinion of counsel that is nationally
recognized in the area of federal securities lawst to the effect that such amendment or waiver would
not, in and of itselfJ cause the undertakings herein to violate the Rule if such amendment or waiver
had been effective on the date hereof but taking into account any subsequent change in or official
interpretation of the Rule.
SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure
Certificate shall be deemed to prevent the Issuer from disseminating any other information, using
the means of dissemination set forth in this Disclosure Certificate or any other means of
communication, or including any other information in its annual information described in Section
2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to
that which is required by this Disclosure Certificate. If the Issuer chooses to include any information
in its annual information or notice of occurrence of a significant event in addition to that which is
specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this
Disclosure Certificate to update such information or include it in its future annual information or
notice of occurrence of a significant event.
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SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer,
becomes an Obligated Person (as defined in the Rule) relating to the Series 1999 Bonds, the Issuer
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shall use its best efforts to require such Obligated Person to comply with all provisions ofthe Rule
applicable to such Oblig'ated Person.
Dated as of November 1 t 1999, .
.~TIEST: .
City Clerk
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EXHIBIT E
CONTINUING DISCLOSURE CERTIFICATE
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CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosurc Certificate (thc "Disclosurc Certificatel1) is executed and
delivered by the City of Clearwater, Florida (the "Issuer") in connection with the issuance of its $
Stormwater Revenue Bonds, Series 1999 (the uSeries 1999 Bonds"). The Series 1999 Bonds
are being issued pursuant to OrdinWlcc No. 6378~99 enactcd by the City on April 15, 1999 (the
"Ordinance"). The Issuer covenants and agrees as foJlows:
SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure
Certificate is being executed and delivered by the Issuer for the benefit of the Series 1999
Bondholders and in order to assist the original underwriters of the Series 1999 Bonds in complying
with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission ("SEC") pursuant
to the Securities Exchange Act of 1934 (the "Rule").
SECTION 2. PROVISION OF ANNUAL INFORMATION. Except as otherwise
provided herein, the Issuer shall provide to aU of the nationally recognized municipal securities
information repositories described in Section 4 hereof (the "NRMSIRs"), and to any state
information depository that is established within the State of Plorida (the "SIDtI), on or before June
30 of each year, commencing June 30, 2000, 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, thc Issuer shall provide such information
when it becomes available, but no later than one year following the end of the Issuer's Fiscal Year.
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<A) the Issuer's Comprehensive Annual Financial Report for the immediately preceding
Fiscal Year (the t1CAFRU), 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
standnrds promulgated by the Government Accounting Standards Board; provided, howevert if the
audited financial statements of the Issuer are not completed prior to April 30 of any yeart 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 1999 Bonds (as amended, the "Official
Statementll), as set forth below:
I. Updates of the. financial information set forth in the Official Statement under
the subcaptions ARates, Fees and Charges@ and AHistorical Net Revenues@ under the
principal captions tiTHE STORM WATER MANAGEMENT SYSTEM" (in the case of the
material under the caption AHistorical Net Revenues,@ 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 infonnation or operating data of the type included in the
Official Statement which would be material to a holder or prospective holders of the Series
1999 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") 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 1999 Bonds or the Issuers ability to satisfy its payment obligations with respect to the Series
1999 Bonds:
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(e) Unscheduled drdws on the debt service reserve fund reflecting financial difficulties;
(D) Unscheduled draws on credit enhancement reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perfonn;
(F) Adverse tax opinions or events affecting the tax-exempt status of the Series 1999
Bonds;
(G) Modifications to rights of Series 1999 Bondholders;
(H) Redemptions;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the Selies 1999
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.
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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 Serits 1999 Bonds, but the Issuer does
not specifically undertake to commit to provide any such additional notice of the occurrence of any
material event except those events listed above.
Whenever the Issuer obtains knowledge of the occurrence of a significant event described
in this Section 3, the Issuer shall as soon as possible detennine if such event would be material under
applicable federal securities law to holders of Series 1999 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:
Bloomberg Municipal Repositories
P.o. Box 840Princeton, N.J. 08542 -0840Phone: (609) 279.3225Fax: (609) 279.
5962E-mail: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive Fort Lee, NJ 07024Phone: (201) 346.0701Fax: (201) 947-
0107E-rnail: nrmsir@dpcdata.com
Standard & Poor==s J. J. Kenny Repository
55 Water Street45th FJoorNew York, NY 10041 Telephone: (212) 438-
4595Facsimile: (212) 438-3975
Thomson NRMSIR
Attn: Municipal Disclosure395 Hudson Street, 3d FloorNew York, NY 10014Phone:
(212) 807-5001 OR (800) 689-8466Fax: (212) 989-2078E-mail: Disclosure@tfn.com
(F) Any NRMSIRs that are established subsequently and approved by the SEC.
(0) A list of the names and addresses of all designated NRMSIRs as of any date may
currently be obtained by calling the SEes Fax on Demand Service at 202/942-8088 and requesting
document number 0206.
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SECTION 5. NO EVENT OF DEFAULT. Notwithstanding any other provision
in the Ordinance to the contrary~ failure of the Issuer to comply with the provisions of this Disclosure
Certificate shall not be considered an event of default under the Ordinance; provided, however, any
Series 1999 Bondholder may take such actions as may be necessary and appropriate, including
pursuing an action for mandamus or specific performance~ as applicable, by court order, to cause the
Issuer to comply with its obligations hereunder. For purposes of this Disclosure Certificate, "Series
1999 Bondholder" shaJ] 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 1999 Bonds (including persons
holding Series 1999 Bonds through nominees, depositories or other intermediaries), or (B) is treated
as the owner of any Series 1999 Bond for federal income tax purposes.
SECTION 6. INCORPORATION BY REFERENCE. Any or all of the
infonnation required herein to be disclosed may be incorporated by reference from other documents,
including official statements or debt issues of the Issuer of related public entities, which have been
submitted to each of the NRMSIRs and the SID, if any, or the SEC. If the document incorporated
by reference is a final official statemellt~ it must be available from the MSRB. The Issuer shall
clearly identify each document incorporated by reference.
SECTION 7. DISSEMINATION AGENTS. 111e 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 Issuer1s obligations under this Disclosure
Certificate shall terminate upon (A) the legal defeasance, prior redemption or payment in full of all
of the Series 1999 Bonds, or (8) the termination of the continuing disclosure requirements of the
Rule by legislative, judicial or administrative action.
SECTION 9. AMENDMENTS. Notwithstanding any other provision of this
Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision may be
waived, if such amendment or waiver is supported by an opinion of counsel that is nationally
recognized in the area of federal securities laws, to the effect that such amendment or waiver would
not, ill 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 infonnution, using
the means of dissemination set forth in this Disclosure Certificate or any other means of
communication, or including any other information in its annual information described in Section
2 hereof or notice of occurrence of a significant event described in Section 3 hereof, in addition to
that which is required by this Disclosure Certificate. If the Issuer chooses to include any information
in its annual information or notice of occurrence of a significant event in addition to that which is
specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this
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. notice of occurrence of a significant cvent.
SECTION 11. OBLIGATED PERSONS. If any person, other than the Issuer,
becomes an Obligated Person (as defined in the Rule) rclating to the Series 1999 Bonds, the Issucr
shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule
applicable to such Obligated Person.
Dated as of November 1, 1999
A TIEST:
CITY OF CLEARWATER, FLORIDA
'. City Clerk
By:
Mayor
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EXHIBIT F
. COMMITMENTS FOR MUNICIPAL BOND INSURANCE POLICY AND
DEBT SERVICE RESERVE SURETY BOND
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REIVSED AS OF OCTOBER 19, 1999
COMMITMENT TO ISSUE A
FINANCIAL GUARANTY INSURANCE POLICY
Application No.: 1999-001595-01
Salc Datc: October 1999 (T)
Program Type: Negotiated DP
Re: $7,200,000 (Est.) ,City of Cleanvater, Florida, Stormwater Revenue Bonds, Series 1999
(the ItObligations")
This commitment to issue a financial guaranty insurance policy (the HCommitment")
dated October 19, 1999, constitutes an agreement between CITY OF CLEARWATER,
FLORIDA the CtApplicanttt) and MBIA Insurance Corporation (the "Insurerlt), a stock insurance
company incorporated under the laws of the State of New York.
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Based on an approved application dated October 13, 1999, the Insurer agrees, upon
satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date
or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance
policy (the npolicy") for the Obligations,.insuring the payment of principal of and interest on the
Obligations when due. The issuance of the Policy shall be subject to the following terms and
conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date
of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
.259% of total debt service, premium rounded to the nearest thousand. The premium set out in
this paragraph shall be the total premium required to be paid on the Policy issued pursuant to
this Commitment.
2. The Obligations shall have received the unqualified opinion of bond counsel with
respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations or the
Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance
of the Obligations or in the final official statement or other similar document, including the
financial statements included therein.
4. There shaH have been no material adverse change in any information submitted to
the Insurer as a part of the application or subsequently submitted to be a part of the application
to the Insurer.
5. No event shaH have occurred which would aUow any undenvriter or any other
purchaser of the Obligations not to be required to purchase the Obligations at closing.
6. A Statement of Insurance satisfactory to the Insurer shall be printed on the
Obligations.
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7. Prior to the delivery of and payment for the Obligations, none of the information or
documents submitted as a pirrt of the application to the Insurer shaU be detcnnJned to contain
any untrue or misleading statement of a material fact' or fail to state a material fact required to
be stated therein or necessary in order to make the statements contained therein not misleading.
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8. No materia) adverse change affecting any security for the Obligations shall have
occurred prior to the delivery of and payment for the Obligations.
9. This Commitment may be signed in counterpart by the parties hereto.
10. Compliance with the Insurer's General Document Provisions (see attached).
Dated this 19th day ofOct9ber, 1999.
MBIA Insurance Corporation
By .~Ad~}
Assis t Secretary .
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CITY OF CLEARWATER, FLORIDA
By:
Title:
11-tf1
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GENERAL DOCUMENT PROVISIONS
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A. Notice to the Insurer Thc basic lcgal documents must provide that any notices rcquircd to
be given by any party should also be givcn to the Insurer, Attn: Insured Portfolio
Management.
B. Amendments. In the basic legal document, there arc usualJy two methods of amendment.
The first, which typically docs not require the consent of the bondholders, is for
amendments which will cure ambiguities, correct formal defects or add to the security of
the financing. The second, in which bondholder consent is a prerequisite, covers the more
substantive types of amendmenl~. For all financings, the Insurcr must be given notice of
any amendments that are of the first type and the Insurer's conscnt must be required for all
amendments of the second type. All documents must contain a provision which requires
copies of any amendments to such documents which are consented to by the Insurer to be
sent to Standard & Poor's.
C. Supplemental Legal Document. If the basic legal document provides for a supplemental
legal docwnent to be issued for reasons other than (1) a refunding to obtain savings; or (2)
the issuance of additional bonds pursuant to an additional bonds test, there must be a
requirement that the Insurer's consent also be obtained prior to the issuance of any
additional bonds and/or execution of such supplemental legal document.
D. Events of Default and Remedies. All documents normally contain provisions which define
the events of default and which prescribe the remedies that may be exercised upon the
occurrence of an event of default. At a minimum, events of default will be defined as
follows:
I. the issuer/obligor fails to pay principal when due;
2. the issuer/obligor fails to pay interest when due;
3. the issuer/obligor fails to observe any other covenant or condition of the docum~nt
and such failure continues for 30 days and
4. the issuer/obligor declares bankruptcy.
The Insurer, acting alone, shall have the right to direct all remedies in the event of a default. TIle
Insurer shall be recognized as the registered owner of each bond which it insures for the purposes
of exercising all rights and privileges available to bondholders. For bonds which it insures, the
Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under
the same teons as a bondholder in accordance with applicable provisions of the governing
documents. Other than the usual redemption provisions, any acceleration of principal payments
must be subject to the Insurer's prior written consent.
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E. Defeasance requires the deposit of:
1. Cash
2. U.S. Treasury Ccrtificatest Notes and Bonds (including State and Local Government
Series ~- 11 SLGs")
3. Direct obligations of the Treasury which have been stripped by the Treasury itself,
CA TS, TIGRS and similar securities
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4: Resolution Funding Corp. (REFCORP) Only the interest componcnt of REFCORP
strips which have bcen stripped by rcquest to the Federal Reserve Bank of New York in
book entry fonn are acceptable.
5. Pre-refunded municipal bonds ratcd "Aaatl by Moody's and "AAA" by S&P. If
however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-
refunded bone'3 must have been pre-refunded with cash. direct U.S. or U.S. guaranteed
obligations, or AAA rated pre-refunded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith and
credit of the U.S.:
a. U.S. Exoort-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
f.. U.S. Department of Housing and Urban Develooment (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public
housing notes and bonds
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F. Agents:
]. In transactions where there is an agent/enhancer (other than the Insurer), the trustee,
tender agent (if any), and paying agent (if any) must be commercial banks with trust
powers.
2. The remarketing agent must have trust powers if they are responsible for holding
moneys or receiving bonds. As an alternative, the documents may provide that if the
remarketing agent is removed, resigns or is unable to perform its duties, the trustee
must assume the responsibilities of remarketing agent until a substitute acceptable to
the Insurer is appointed.
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'11-11
I'
MBIA
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REIVSED AS OF OCTOBER 19, 1999
COMMITMENT TO ISSUE A
DEBT SERVICE RESERVE SURETY BOND
Application No.: 1999-001595-02
Sale Date: October 1999 (T)
Program Type: Negotiated OP
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RE: $720,000 (Est.) Debt Service Reserve Fund for the $7,200,000 (Est.) City of Clearwater.
Florida, Stormwater Revenue Bonds, Series 1999
(the "Obligationstt)
, This commitment to issue a debt service reserve surety bond (the "Commitment")
constitutes an agreement between CITY OF CLEARWATER, FLORIDA, (the "Applicant"),
and MBIA Insurance Corporation (the "Insurerll), a stock insurance company incorporated under
the laws of the State of New York.
Based on an approved application dated October 13, 1999, the Insurer agrees, upon
satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date
or (ii) on the date of delivery of and payment for the Obligations, a debt service reserve surety
bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to the issuer of up to
$720,000 (Est.) on the Obligations. The issuance of the Surety Bond shall be subject to the
following terms and conditions:
1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date
of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
2.75% of total surety bond amount, premium rounded to the nearest thousand. The premium set
out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant
to this Commitment.
2. The Obligations shall have received the unqualified opinion of bond counsel with
respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations or the
Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance
of the Obligations or in the final official statement or other similar document, including the
financial statements included therein.
4. There shall have been no material adverse change in any information submitted to
the Insurer as a part of the Application or subsequently submitted to be a part of the Application
to the Insurer.
5. No event shall have occurred which would allow any underwriter or any other
purchaser of the Obligations not to be required to purchase the Obligations at closing.
6. Prior to the delivery of and payment for the Obligations, none of the information or
documents submitted as a part of the Application to the Insurer shall be determined to contain
any untrue or misleading statement of a material fact or fail to state a material fact required to be
stated therein or necessary in order to make the statements contained therein not misleading.
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7. ' No material adverse change affecting any security for the Obligations shall have
occurred prior to the delivery of and payment for the Obligations.
. 8. This Commitment may be signed in counterpart by the parties hereto.
9. Compliance with the Insurer's Term Sheet for Debt Service Reserve Fund Program
(see Attachment A).
Dated this 19th day of October, 1999.
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MBIA Insurance Corporation
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By . " . r~ k-(fJ ---
.'!}. st 1 ~efu~t'ary ,
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CITY OF CLEARWATER, FLORIDA
By: '
Title:
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.MElIA
(Attachment A)
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TERM SHEET FOR DEBT SERVICE RESERVE FUND PROGRAM
Introduction
The Insurcr can, undcr ccrtain circumstances, issue a debt scrvice reservc fund surety bond
(the IISurety Bond"), to be used as a replacement for a cash funded rescrvc, in any amount up to
the full amount of the dcbt scrvicc rescrve fund requirement.
The Insurcr requires that the issucr and/or the underlying obligor of the bonds enter into a
Financial Guaranty Agreement with the Insurer providing for, among other things, the
,reimbursement to the Insurer of amounts drawn under the Surety Bond. A sample draft of such
an agreement is attached.
The Insurer will undertake its standard credit analysis of the issuer and/or obligor which
may result in requests for modifications of the structure or certain provisions of the bond
documents. These changes would be in addition to the specific changcs requircd in all
financings where a Surety Bond will be issucd (see Re9uircd Terms below).
The Surety Bond may be structured to provide debt service reserve fund replacement for the
current issue of bonds and any other debt issued on a parity therewith. However, in all cases, the
Surety Bond wi)) expire on the final maturity datc of the current issue.
The program criteria are subject to change by the Insurer.
General Terms
Provision should be made in the bond documents for the creation of a debt service reserve
fund and there should be a requircmcnt to maintain that fund at a certain level. It should also be
provided that this requirement may be satisfied by cash or a qualified surety bond or a
combination of these two (Note: A IIqualified surety bondlt means a surety bond issued bv an
insurance company rated in the highest rating category by Standard & Poor's and Moody's and.
if rated by A.M. Best & Company. must also be rated in the highest rating category by A.M.
Best & Company).
In those instances whcre the issuance of parity debt will cause the debt service reserve fund
requirement to increase, the Insurer requires that at the time of issuance of such varity debt,
either cash or a qualified surety bond be provided so that the increased requirement will be
satisfied.
In any event where the debt service reserve fund contains both an the Insurer Surety Bond
and cash, the Insurer requires that the cash be drawn down completely before any demand is
made on the Surety Bond. In any event where the debt service reserve fund contains a surety
bond from another entity and an INSURER Surety Bond, the documents should provide for a
pro-rata draw on each of the surety bonds.
With regard to replenishment, any available monies, as defined in the Indenture or
Resolution, should be used first to reimburse the Insurer, thereby reinstating the Surety Bond,
and second to replenish the cash in the debt service reserve fund.
The rate covenant should be expanded so that, in addition to all other coverage requirements,
there are sufficient monies available to pay a)) amounts owed to the Insurer under the terms of
the Financial Guaranty Agreement.
If the documents provide for the issuance of additional bonds that do not share a common
reserve fund with the current issue, the Insurer can issue a surety bond that is, by its terms,
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available only as a reserve for the current issue. In such cases, the Insurer would require a
covenant that any revenues available for debt service must De distributed between the current
issue and any additional bonds on a pro rata basis without regard to the existence of a funded
debt service reserve or a surety bond.
The bond documents should require the Trustee to deliver a Demand For Payment (see
attached fonn) at least three days prior to the date on which funds are required.
Required Terms
With respect to any security interest in collateral granted to the bondholders, the Insurer
should be granted that same interest subject only to that of the bondholders. This would apply to
existing security, if any, as well as any to be granted in the future.
The Insurer should receive an opinion from counsel to the issuer/obligor that the Financial
Guaranty Agreement is a legal, valid and binding obligation of the issuer/obligor and is
enforceable against the issuer/obligor in accordance with its terms.
, In general terms, the "flow of funds" would be structured as f~llows:
All gross revenues should be paid in the following order with the priority indicated:
(I) expenses of operation and maintenance;
(2) debt service on the bonds;
(3) reimbursement of amounts advanced by the Insurer under the Surety Bond;
(4) reimbursement of cash amounts, ifany, drawn from the reserve fund;
(5) replenishment of Renewal and Replacement Fund;
(6) payment to the Insurer of interest on amounts advanced under the Surety
Bond;
(7) all other lawful uses, including the debt service payment on any subordinate
bonds.
Provision must be made for the Insurer to be paid all amounts owed to it under the tenus of
the Financial Guaranty Agreement or any other documents before the bond documents may be
tenninated.
It will be the responsibility of the trustee/paying agent to maintain adequate records, verified
with the Insurer, as to the amount available to be drawn at any given time under the Surety Bond
and as to the amounts paid and owing to the Insurer under the terms of the Financial Guaranty
Agreement.
There may be no optional redemption of bonds or distribution of funds to the issuer and/or
the underlying obligor unless all amounts owed to the Insurer under the terms of the Financial
Guaranty Agreement or any other documents have been paid in full.
8/12/93
19-11
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THE MElA INSURANCE CORPORA nON INSURANCE POLICY
The foUowing information has boen fwnlshed by MBlA Insurance Corporation (the "lnsurcT1 for use in this Official Statement Reference is made 10
Appendix for a sp.:cimen of the I.n.sun:ts policy.
The Insurers policy unconditionally and irrcvoc3bly guar.mtees the full and complete p.1)ment required to be mad.e by or on behalf of the Issuer to the
" Pa:ing Agent or its successor of an amount equal to (i) the principal of (either at the staled maturity or by an advancement of manuity pursuant to a
) mandatory sinking fund pa)mCnt) and interest on, the Bonds as SUch ~ shall become due but shall not be so paid (except that in the lMnl of an)
acceleration of the due date of such principal by reason of mand.1101)' or optional redemption or acceleration resulting from. ddhult or otherwise. other than
any advancement of matUrity pursuant to a mandatory sinking fund payment. the payments guaranteed by the Insurer's policy sha.U be made in such
amounts and at such times as such payments of principal would 11.'lVe been due had there not been any such o.ccelerntion); and (ii) the reirnbursemeru of
all)' such payment which is subsequently recovered from any own~r of the Bonds purntant to n final judgment by a court of competent jurisdiction thaI
such payment constitules an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a ''Preference'').
TIle Insurer's policy does not insure against loss of any prepayment premiwn which may at any time be payable with respect to any Bond. The
1nsurer's policy does not, under any circumstance. insure against loss relating to: (0 optional or mandatory redemptions (other than mandatory sinking
fund redemptions); (ii) any payments to be made on an acx:elerated basis; (ill) payments of the plll'Chase price of Bonds upon tender by an owner thereof, or
(iv) any Prefcrence relating to (i) through (ill) above. The Insurers policy also does not insure agninst nonpayment of principal of or interest on the Bends
resulting from the insolvency, negligence or any other act or omission afthe Paying Agent or any other paying agent for the Bonds.
Upon receipt of telephonic or telegrnphic notice, such notice subsequently confinned in writing by registered or certified mail or upon ro::cipt of
written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of a Bond the payment of an insured arnowu for which is
then due, that such required payment 11.15 not been made, the Insurer an the due date of such payment or within one business day after receipt of notice of
such nonpayment, whichever is later, will make a deposit offunds. in an account Yritb Stale Strecl Bank and Trust Company, NA, in New York, New
York. or its successor, sufficient for the payment of any such insured amOW1tS which are then due. Upon presenttnent and surrender of such Bonds or
presentment of such other proof of OMlefShip af the Bonds, together with any appropriate instruments of assigrunent to evidence the assignment of the
insured amounts due on the Bonds as arc paid by the Insurer, and appropriate instruments to effect the app:lintment of the Insurer as agent for such owners
of the Bonds in any legal proceeding related to payment of insured amounts on the Bonds, such instruments being in a fonn satisfactory to State Street
Bank and Trust Company, NA, State Street Bank and Trust Company, NA shall di5turse to such mvners or the Paying Agent payment of tlle insured
amounts due on such Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor.
The Insurer is the principal operating subsidiary ofMBlA Inc.. a New Yolk Stock Exchange \isted company (the "Company"), The Company is not
obligated to pay the debts oforclaims against the Insurer. The Insurer is domiciled in the Slate of New Yorl< and licensed to do business in and subject to
regulation under the 1am; of all 50 states. the District of Colwnbia, the Commonwealth of Pueno Rico. the Commonwealth of the Nonhern Mariana
Islands, the Vrrgin Islands of tile United States and the Territory of Guam The Insurer has two European branches, one in the Republic afFrnnce and the
odler in the Kingdom of Spain. New York has laws prescnbing minimum capital requirements, limiting classes and concentrations of investments and
requiring the approval of policy rates and fonns. State laws also regula1e the amount of both the aggregate and individu.11 ~ that may be insured the
payment of dividends by the Insurer, changes in control and transactions among affiliates. Additionally, the Insurer is required to maintain contingency
reseIVeS on its liabilities in certain amounts and forcenain periods of time.
As of December 31, 1998, MBlA had admitted assets ofS6.5 billion (audited), lOUllliabilities ofS4.2 billion (audited), and total C3pital and surplus of
$2.3 billion (audited) detennined in accordance with staMm)' accounting pmctices prescnbed or permitted by iosurnnce regulatory authorities. As of JlUle
30. 1999, MalA had admitted assets af$6.8 billion (unaudited), totalliabilitics af$4.5 billion (unaudited), and total C3pital and surplus of $2.3 billion
(unaudited) detennined in accordance with statutoty accounting pmctices prescribed or pennitted by insurance regulatory authorities.
Furthennore, copies of the InsureTs year cod financial statements prepared in accordance with statutory accounting pmctices are available withoUl
charge from the Insurer. A copy of the Armuat Report on Fonn 10-K of the Company is available from the Insurer or the Securities and Exchange
CommissioIt TIle address of the Insurer is 113 King Street, Annonk, New Yode 10504. The telephone nwnber of the Insurer is (914) 273-4545.
Year 2000 Readiness Disclosure
The Company is actively managing a high-priority Year 2000 C'Y2K'1 program. The Company bas established an independent Y2K testing lab in
its Annonk he3dquarters. with a committee of business unit managers overseeing the project The Company has a budget of $1.13 million for its 1998-
2000 Y2K dfons. Expenditures are proceeding as anticipated. and the Company does not expect the project budget to materially exceed this amount
The Company bas initiated a comprehensive Y2K plan that includes assessmern, remediation, testing and contingency planning. This plan covers
"mi.ssion<ritic:al" internally developed systemS. vendor software, hardware and certain third-party entities through which the Company conducts its
business. Testing to dale indicates that functions critical to the financ:iaI guarantee business, both domestic and international, were Y2K-re2dy as of
December 31,1998. Additional testing will continue throughout 1999.
Moody's Investors SetVice, Inc, rates the financial strength of the Insurer" Ana".
Standard & Poors Ratings Servi~ a division of TIle McGraw-Hill Companies, Inc., rates the financi.ll strength of the Insurer "AAA".
Fitch mCA, Inc. (fonnerI)' 1rnown as Filch Investors SeMce. L.P.) roleS the fillancial strength of the Insurer "AAA".
Each rating of the Insurer should be evaluated independently, The ratings reflect tlle respective rating agency's current assessment of the
credll.".unhiness of the Insurer and its :lbilit)' to pay claims on its policies of insurance. Any fwilier expL1nation as to the significance of the above ratings
may be obtained only from the appliC<1ble rating agency.
TIle aOO\'e ratings are nOI recommendations to buy. sell or hold the Bonds, and such ratings may be subjea to revision or \\ithdrnwal at any time by
the rating agencies. Any dO\\1lward revision or \\ithdrm...at of any of the above ratings may have an adverse effect on tlle market price of the Bonds. The
Insurer does not guaranty the market price of the Bonds nor does it guaranty that thc ratings on tlle Bonds will not be revised or withdra\\1t
......) TIle insurance provided by tllis Policy is not covered by the Florida Insurance Guarnnt), Associalion created wu:fer chapter 631, Florida Statutes.
FL
11-11
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DEBT SERVICE RESERVE FUND SURETY BONQ
,,) Application has been made to the MBlA Insurance Corporation (Lhe 11Insurer") for 3 commitment to issue a surety bond (the
,..Jcbt Service Reserve Fund Surety Bondll). The Debt Service Reserve Fund Surety Bond wiU provide that upon notice from the
Paying Agent to the Insurer to the effect that insufficient amounts nre on deposit in the Debt Service Fund to pay the principal of (at
maturity or pursuant to mand.'ltory redemption requirements) and interest on the 1989 Obligations, the Insurer will promptly deposit
with the Paying Agent an amount sufficir.nt to pay the principal of ilnd interest on the 1989 Obligations or the available amount of
the Debt Service Reserve Fund Surcty Bond, whichever is Jess. Upon OIC later of: (i) Utrce (3) days aftcr receipt by the Insurer of a
Demand for Payment in the form attached to the Debt Service Reserve Fund Surety Bond, duJy executed by the Paying Agent; or (ii)
the payment date of the Obligations as specified in the Demand for Payment presentcd by the Paying Agent to the Insurer. the
Insurer will make a deposit offunds in an account with State Street Bank and Trust Company, N.A., in New York, New York. or its
suc<:cssor, sufficient for the payment to the Paying Agcnt, of amounts which are Ulcn duc to thc Paying Agent (as specified in the
Demand for Payment) subject to thc Surety Bond Coverage.
The available amount of the Debt Service ReSClVe Fund SUICly Bond is the initial face amount of the Debt Service Reservc Fund
Surely Bond less the amount of any previous deposits by the Insurer with tbe Paying Agent which have not been reimbursed by the
~ The Cit'{ and the Insurer have entered into a Financial Guaranty Agreement dated r ] (the 11Agreement"). Pursuant to
the Agreement, the City is required to reimburse the Insurer, within one year of any deposit. the amount of such deposit made by the
Insurer with the Paying Agent under the Debt Service Reserve Fund Surety Bond. Such reimbursement shall be made only after all
~uired deposits to the Operation and Maintenance Fund and the Debt Service Fund have been made.
Under the terms of the Agreement, the Paying Agent is required to reimburse the Insurer. with interest. until the face amount of
the Debt Service Reserve Fund Surety Bond is reinst<lted before any deposit is made to the General Fund, No optional redemption of
'Obligations may be made until the Insurer's Debt Service Reserve Fund Surety Bond is reinstated. The Debt Service Reserve Fund
Surety Bond will be held by the Paying Agent in the Debt Service Reserve Fund and is provided as an alternative to the City
depositing funds equa110 the Debt Service Requirement for outstllnding Obligations. The Debt Service Reserve Fund Surety Bond
will be issued in the face amount equal to Maximum Annual Debt Service for tlie Obligations and the premium therefor will be fully
... '1:Ud by the City at the time of delivery of the Obligations.
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91-'11
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MBIA
FINANCIAL GUARANTY INSURANCE POLICY
MBIA Insurance Corporation
Armonk, New York 10504
Policy No. [NUMBER]
MBJA Insurance Corporation (the "Insurer"), in consideration of the pa)1l1cnt of the premium and subject to the tenus of this policy, hereby
unconditionally and irrevocably guarantees to any O'Mlcr, as hereinafter defined, of the following described obligations, the full and complete payment
required to be made by or on beh:11f oCthe Is.'iUCf to [INSERT NAME OF PA YlNG AGENTJ or its successor (tlle "Paying Agcntt~ of an amount equal
to (i) the principal of (either at the star.cd maturity or by any advancement of maturity pursuant to a mandatory sinking fund pa)1l1ent) and interest on,
the Obligations (as that term is defined below) as such pa)1l1cnts shall become due but shall not be so paid (except that in the cvent of any accelcration
of the due date of such principal by reason of mandatory or optional redemption or ~lc:ration resulting from default or otherwise, other than any
advancement of malUrity pwsuant to a mandatory sinking fund paymen~ the payments guaranteed hereby shall be made in such amounts and at such
times as such payment<; of principal would have been due had there not been any such acceleration); and (iJ) the reimbur.;emcnt of any such payment
which is subsequently recovered fiom any o'MlCf ~t to a fmal judgment by a court of competent jurisdiction that such payment constitutes an
avoidable preferc:nce to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (i1) of the
preceding sentence shall be referred to herein collectively as the "InsW'ed Amounts." "Obligations" shall mean:
(PAR}
[LEGAL NAME OF ISSUE}
Upon receipt of telephonic or teJegrnphic notice, such notice subsequently confinned in writing by registered or certified mail, or ujxm nxeipt ofwritten
notice by registered or certified mail; by the Insurer fium the Paying Agent or any owner of an Obligation the pa)ment of an Insured Amount for which
is then due, that such required payment has not been made, the Insurcr on the due date of such payment or within one business day after receipt of notice
of such nonpayment, whichever is later, will make a deposit offunds, in an actOUJlt with State Street Bank and Trust Company, N.A., in New York,
New Yode, or its successor, sufficient for the payment of any such Insured AmOWlts which are then due. Upon presentment and surrender of such
Obligations or presentment of such other proof of o'Mlership of the Obligations, together with any appropriate instruments of assignment to evidence
1be assignment of me Insured ArnoWlts due on the Obligations as are pakI by the Insurer, and appropriate instruments to effect the appointment of the
Insurer as agent for such owner.; of the Obligations in any legal proceeding related to payment oflnsured ArnOtmts on the Obligations, such instruments
"being in a form satisfuctory to State Street Bank and Trust Company, NA., State Street Bank and Trust Company, NA. shall disburse to such owners,
or the Paying Agent payment of the Insured Amounts due on such Obligations, less ;my amount held by the Paying Agent for the payment of such
Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
AS used herein, the tenn "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the
Issuer. or any designee of the Issuer for such purpose. The term owner shan not include the Issuer or any party whose agreement with the Issuer
constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Annonk, New York 10504 and such service
of process shall be valid and binding.
This policy is non-cancellable for any reason. The premiwn on this policy is not refimdable for any reason including the payment prior to maturity of
the Obligations.
The insurnnce provided by this policy is not covered by the Florida Insurance Guaranty Association created under chapter 631, Florida StalUles.
IN WITNESS WHEREOF, the Insurer has caused this policy to be executed in facsimile on its behalf by its duly authorized officers, this [DAY] day of'
[MONTIJ, YEAR].
COUNTERSIGNED:
:MBIA Insurance Corporation
Resident Licensed Agent
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Alle.q, Ass;''''"' See..",,!)' C 111I1t2--At-
, City, State
y
STD.RCS.FL-6
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STATEMENT OF INSURANCE
MBlA Insurance Corporation (the "Insurer") has issued a polley containing the following provisions, such policy
being on file at (INSERT NAME OF tRUSTEE OR PAYING AGENT,INCLUDING CITY. STATE].
The Insurer, in consideration of the payment of the premium and subject to the tenns of this policy, hereby
unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Issuer to {INSERT NAME O~ TRUSTEE 01\
PA YING AGENT] or its successor (the "Paying Agent") of an amount equal to (i) the principal of (either at the stated
maturity or by any advancement of maturity pursuant to a mandatory sin~ing fund payment) and interest on, the Obligations
(as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from
default or.otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had
there not been any such acceleration)j and (ii) the reimbursement of any such payment which is subsequently recovered from
any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable
preference 10 such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (I) and
(ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean:
[INSERT LEGAL TITLE OF BONDS. CENTERED AS FOLLOWS:}
[$ PAR AMOUNT]
[lSSUERJ
[DESCRIPTION OF BONDS]
Upon receipt of telephonic or telegraphic notice, such notice subsequently confumed in writing by registered or
certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any
owner of an Obligation the payment of an Insured Amount for which is then due, l.llBt such required payment has not been
made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New
York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together
with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as
are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such mstruments being in a
fonn satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust CompwlY, N.A. shall disburse
to such owners or tIle Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the
Paying Agent for the payment of such Insured Amounts and legally available therefor; This policy does not insure against
. loss of any prepayment premium which may at any time be payable with respect to any Obligation. '
As used herein, the tenn "owner" shall mean the registered owner of any Obligation as indicated in the books
maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The tenn owner shall not include
the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations.
Any liervice of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Annonk,
New York 1.0504 and such service of process shaJJ be valid and binding.
This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason inCluding
the payment prior to maturity of the Obligations.
This policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York
Insurance Law.
MBIA Insurance Corporation
STD-R-NY-l
11-'11
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PAYMENTS UNDER TIIEPOUCY
, A. In the event that, on the second Business Day, and again on the Business ~ay.. prior to the payment date on the Obligations, the Paying
Ar"4\a,s n~t receMd suffici~t moneys to pay all p~pa1 of ~ intereSt on th~ Obli~on.s due on the SO:O~d foUowing or follOwing, as the C3Se
ma. c) Busu:ess Day, the P8}'Ulg Agent shall immediateJy notify Ole Insurer or us designee on the same Busmess Day by telephone or telegraph.
confinned in writing by registmd or cenilied mall, of the amount of the deficiency.
B. Iftheddiciency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its d.esigne:.
C. In addition, if the ~ Agent has notice that any Bondholder has be:n requiredto-disgorge payments of principal or inte~ on the
ObUgation to a tIU.sl1:e in Ban.kIUptcy or creditorn or others pursuant to a final judgment by a COI.IIt of co~ jurisdiction that ~h paym..~
coD.Slitutl:s an avoidable p~ to such Bondholder within the meaning of any applicable bankruptcy I.aws, then the Paying Agent shall notift the
lnsu.ter or iTS ~ eu~ of such fact by telephone or telegraphic notice, confinnoi in writing by registered or c:::ertified mail
D. The Paying Agent is hereby iIrevo.::ilily cksigna.tcci; appointed, ~ and authorized to act as attorncy.in-fuct for HoldeIs of the
Obligations as tOUows:
L If and to the e>:tcuI there is a deficiency in amounts required to pay im.e.tr.st on ,the Obligations, the Paying Agent shall (a) exe:::.ne
and deliver to State sttiet Bank and Trust Company. N.A, or its S1.1CCtS9Jrn under the Policy (the ''Insurnnce Pajing Agent'? in fmm
~ri~~ to the ~ Paying Agent, an instrument appointing the Insun::r as agent for such Holders in any leia1 pro:eeding re!ated [Q
the paymeDt of such intmst and an asSignment,to the Insurer of the c1aims fur iIItcrest to which such deficiency rel21es and which are paid
by the Insurer, (b) n:ocive as desigIlO' at ~ tesp:aive Holders (and not as Paying Agent) in acaJrdance 'With the tenor of the Polity
~ from the Insurnnce Paying Agent with Iespe:t to the daims for interest 00 assigned, and (c) cfuburse the _ to such xespective
Holdels; and
2. If and to the extctt: of a ddiciency in a.mounts requimi to pay principal of the Cbligations, the Paying Agent shall (a) execute and
deliver to the Insumnce Paying Agt-.ot in fonn ~tjc;furml}' to the Insmano: Paying Agent an instrument appointing the losurer as agent for
such Holder in any legal ~Tlg zela.ting to the ~ of such principal and an asstgnmc:n! to the Instm:r of any of the Ctlig:arion
suneMcred to the Insuranc=Paying agemafoo much of the principal amount tbeJeofas has not previously b=n paid or forwh.ich moneys
are nochdd by the Pa:yiog AgcataDd available for .sucl1 ~ (but such assignmc:m shall be delive.red only ifpaymcnt from the l'.n.sunux:e
Paying Agmt is rec:eiwd), (b) receive as designee of the respe:tivc Holdcs (and not as Paying Agent) in accordance with the tenor afthe
PoficypaylUem therctbr:from the Insur.mce Paying Ageor. aIJd (c) disbttrs= the same to soch Halden.
,E. Pa:ymems with Iesped to claims fur interest on and principal of ctJUgations disbuISl:d by the Paying Agwmt from p~ of the Policy
shall DOt be consiCtred to dis::b.ar}r-; the OOligation of the Issuer with respe:::t to such Obligations, and the Insurer shall be:ome the 0Mler of such
unpaid Obligation and claims for the inm:st in ao:o~ with the tenor of the ~g;mne'm made to it under the provisions of this sub9::ction or
otb.crwise.
F. Imspective cfwhether any such assignment is executed and delivered, the!.ssuc' a:od the Paying Agent hereby agree for the benefit of the
l1.'ISUICr that
1. They recOgnize that to the cxteItt the Insurer makes ~ directly or indire::tly (as by paying through the Paying Agem), on
ao:oUDt of principal of or infi=rest on the Obligations, the Insurer will b: subrogated to tbe riglus rrf such Hold=s to reo:ive the amount of
such principal and interest from the Issuer, with interest thereon as provided ami solely from the SOwo=i star.ed in this TD.;~ and the
CbligBIions; and
2. They will ao::orcllngly pay to the ~ the amount oi such principal and interest (mcluding principal and !nrerest recovered UIlritr
subparagraph (n) of the fust paragraph of the Folicy, which principal and iInerest shall be de=ned past d:ue and IlOt to have been paid). wi1h
intcn!st tb=an as provided in this Indenture and the CUUgariOll, but only from th: .sources and in the man.oer provickd h:rrin for the
pa:yment of principal of and interest on the ctligations to Holdczs, and will otherWise treat the Insurer as the OMler of such rig:hIs to the
amount afsuch princi:paJ and. immst
G. In conne.:tion vrith the issuance of additional ctligatioDS, the Issu:r shall deliver to the ~ a copy of the disclosure dccJmeoo: if allY,
cittula!o:i with 1espect to such additional CbUgalions.
,H. Copies ofany am~ made to the dccuments exe::uted in conne:tiOl1 with the issu:ir.:e of the Ctlig3rions which are co~ to by
the ~ shall be rent to Standard & Poor's CoxpotatiOIt
1 The IDsurer shall re::dve notice of the ~gnarion or removal of the Paying ..\.gent aDd the a:pp;limmem of a 5l;Ico~'ssx the:-eto.
J. The Insurer sb.all re:cive copies of all notices required to be delivero:i to Bondhol~ arcl, aD. an annual basis, copies of tb: ~ 5 audited
\~::= :=~ to be given to a holder of the Obligation or to the Paying Agent pursuant to the Ind~lJDlte shall a.l.9J b:
providai to tile Insurer. All notices ~ to be given to the lnsurer undo' the ~ sba!l b: in miring and shall be ~m by ~gist:rei or
o:nified mail address:d to lYffiIA Insurance Corporation. 113 King Street, Annook, New York 10504 Att.."1Jlion: SutVeillan~. '
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FINANCIAL GUARANTY AGREEMENT
FINANCIAL GUARAN1Y AGREEMENT made as of [CLOSING DATE], 1998, by and between
[ISSUER] (the "Issuerll) and MBIA Insurance Corporation (the lIlnsurerrl), organized under the laws of the
state of New York
WITNESSETH:
WHEREAS, the Issuer has or will issue the Obligations; and
WHEREASt pursuant to the tenns of the Document the Issuer agrees to make certain payments on the
Obligations; and
WHEREAS, the Insurer will issue its Surety Bond, substantially in the form set forth in Annex A to this
Agreement, guaranteeing certain payments by the Issuer subject to the tenns and limitations of the Surety
Bond; and
WHEREASt to induce the Insurer to issue the Surety Bond, the Issuer has agreed to pay the premium
for the Surety Bond and to reimburse the Insurer for all payments made by the Insurer under the Surety
Bond, all as more fully set forth in this Agreement; and
WHEREAS, the Issuer understands that the Insurer expressly requires the delivery of this Agreement as
part of the consideration for the execution by the Insurer of the Surety Bond; and .
NOW, THEREFORE, in consideration of the premises and of the agreements herein contained and of
the execution of the Surety Bond, the ~er and the Insurer agree as follows:
,
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Section 1. 0 1.
Annex B hereto.
Section 1.02. Surety Bond.
(a) The Insurer will issue the Surety Bond in accordance with and subject to the tenns and
conditions of the Commitment.
(b) The maximwn liability of the Insurer under the Surety Bond and the coverage and tenn
thereof shall be subject to and limited by the tenns and conditions of the Surety Bond,
Section 1.03. Premium. In consideration of the Insurer agreeing to issue the Surety Bond heramder,
the Issuer hereby agrees to payor cause to be paid the Premium set forth in Annex B hereto. The Premium
on the Surety Bond is not refundable for any reason.
Section 1.04. Certain Other Expenses. The Issuer will pay all reasonable fees and disbursements of the
Insurers special counsel related to any modification ofthis Agreement or the Surety Bond.
ARTICLE I
DEFINITIONS; SURElY BOND
Definitions. The tenns which are capitalized herein shall have the meanings specified in
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ARTICLE n
REIMBURSEMENT AND INDEMNIFICA nON
OBLIGA nONS OF ISSUER AND SECURITY THEREFOR.
Section 2.01. Reimbursement for Payments Under the Surety Bond and Ex-penses: Indemnification.
(a) The Issuer will reimburse the Insurer, within the Reimbursement Period, without demand or
notice by the Insurer to the Issuer or any other person, to the extent of each Surety Bond Payment
with interest on each Surety Bond Payment from and including the date made to the date of the
reimbursement at the lesser of the Reimbursement Rate or the maximwn rate of interest pennitted by
then applicable law.
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(b) The Issuer also agrees to reimburse the Insurer immediately and unconditionally upon
demand, to the extent pennitted by state law, for all reasonable expenses incurred by the Insurer in
connection with the Surety Bond and the enforcement by the Insurer of the Issuers obligations under
this Agreement, the Document, and any other document executed in connection with the issuance of
the Obligations, together with interest on all such expenses from and including the date incurred to the
date of payment at the rate set forth in subsection (a) of this Section 2.01.
(c) The Issuer agrees to indemnifY the Insurer, to the extent permitted by state law, against any
and allliabilityt claims, loss, costst damages, fees of attorneys and other expenses which the Insurer
may sustain or incur by reason of or in consequence of 0) the failure of the Issuer to perfonn or
comply Vlith the covenants or conditions of this Agreement or (li) reliance by the Insurer upon
representations made by the Issuer or (Ui) a defau1t by the Issuer under the terms of the Document or
any other documents executed in connection with the issuance of the Obligations.
(d) The Issuer agrees that all amowlts owing to the Insurer pursuant to Section 1.03 hereof and
this Section 2.01 must be paid in full prior to any optional redemption or refunding of the Obligations.
(e) All payments made to the Insurer under this Agreement shall be paid in lawful currency of the
United States in immediately available funds at the Insurers office at 113 King Street, Annonk, New
York 10504, Attention: Accounting and Insured Portfolio Management Departments, or at such
. other place as shall be designated by the Insurer.
Section 2.02. Allocation of Payments. The Insurer and the Issuer hereby agree that each payment
received by the Insurer from or on behalf of the Issuer as a reimbursement to the Insurer as required by
Section 2.0 I hereof shall be applied by the Insurer first, toward payment of any unpaid premiwn; second,
toward repayment of the aggregate Surety Bond Payments made by the Insurer and not yet repaid, payment
of which will reinstate all or a portion of the Surety Bond Coverage to the extent of such repayment (but not
to exceed the Surety Bond Limit); and third, upon full reinstatement of the Surety Bond Coverage to the
Surety Bond Limit, toward other amounts, including, without limitation, any interest payable with respect to
any Surety Bond Payments then due to the Insurer.
Section 2.03. Security for Payments: Instruments of Further Assurance. To the extent, but onJyto the
extent, that the Document, or any related indenture, trust agreement, ordinance) resolution, mortgage,
security agreement or similar instrument, if anYt pledges to the Owners or any trustee therefor, or grants a
security interest or lien in or on any collateral, property, revenue or other !)ayments CUCollateral and
Revenues") in order to secure the Obligations or provide a source of payment for the Obligations, the Issuer
hereby grants to the Insurer a security interest in or lien on, as the case may be, and pledges to the Insurer all
such Collateral and Revenues as security for payment of all amounts due hereunder and under the DOClUTIent
or any other document executed in connection with the issuance of the Obligations, which security interest,
lien and/or pledge created or granted under this Section 2.03 shall be subordinate only to the interests of the
Owners and any trustee therefor in such Collateral and Revenues, except as otherwise provided. The Issuer
agrees that it will, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and ail financing statements, if applicable, and all other further instruments
as may be required by law or as shall reasonably be requested by the Insurer for the perfection of the security
interest, if any, granted under tlns Section 2.03 and for the preservation and protection of all rights of the
Insurer under this Section 2.03.
Section 2.04. Unconditional Obligation. The obligations hereunder are absolute and unconditional and
will be paid or perfonned strictly in accordance with this Agreement, subject to the limitations of the
Document, irrespective of:
(a) any lack ofvalidity or enforceability of, or any amendment or otller modification of, or waiver
with respect to the Obligations, the Document or any other document executed in connection with the
issuance of the Obligations; or
(b) any exchange, release or nonperfection of any security interest in property securing the
Obligations or this Agreement or any obligations hereunder; or
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~ (c) any circumstances that might otherwise constitute a defense available to, or discharge of, the
Issuer with respect to.the Obligations) the Document or any other document executed in connection
with the issuance of the Obligations; or
(d) whether or not such obligations are contingent or matured, disputed or undisputed, liquidated
or unliquidated.
Section 2.05. Insurer's Rights. The Issuer shalf repay the Insurer to the extent of payments made and
expenses incurred by the Insurer in connection with the Obligations and this Agreement. The obligation of
the Issuer to repay such amounts shall be subordinate only to the rights of the Owners to receive regularly
scheduled principal and interest on the Obligations.
Section 2.06. On-Going Infonnation Obligations oflssuer.
(a) Quarterly Reports, The Issuer will provide to the Insurer within 45 days of the close of each
quarter interim financial statements covering all fund balances W1der the Document, a statement of
operations (mcome statement), balance sheet and changes in fund balances. These statements need
not be audited by an independent certified public accountant, but if any audited statements are
produced, they must be provided to the Insurer.
I (b) Annual Reports. The Issuer will provide to the Insurer annual financial statements audited by
an independent certified public accountant within 90 days of the end of each fiscal year;
(c) Access to Facilities. Books and Records. The Issuer will grant the Insurer reasonable access
to the project financed by the Obligations and will make available to the Insurer, at reasonable times
and upon reasonable notice all books and records relative to the project financed by the Obligations;
and
(d) Compliance Certificate. On an annual basis the Issuer will provide to the Insurer a certificate
confuming compliance with all covenants and obligations hereunder and under the Revenue
Agreement, the Document or any other document executed in connection with the issuance of the
Obligations.
ARTICLE ill
AMENDMENTS TO DOCUMENT
So long as this Agreement is in effect, the Issuer agrees that it will not agree to amend the Document or
any other document executed in connection with the issuance of the Obligations, without the prior written
consent of the Insurer.
ARTICLE IV
EVENlS OF DEFAULT; REMEDIES
Section 4.01. Events ofDefuult. nle following events shall constitute Events ofDefuult hereunder:
(a) The Issuer shall fui] to pay to the Insurer when due any amount payable under Sections ] .03~
or
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(b) The Issuer shall fail to pay to the Insurer any amOlmt payable under Sections 1.04 and 2.01
hereofand such failure shall have continued for a period in excess of the Reimbursement Period; or
(c) Any material representation or warranty made by the Issuer under the Document or
hereunder or any statement in the application for the Surety Bond or any report, certificate, financial
statement, document or other instrument provided in connection with the Commitment, the Surety
Bond, the Obligations, or herewith shall have been materially false at the time when made; or
(d) Except as otherwise provided in this Section 4.01, the Issuer shaU fiill to perfonn any of its
other obligations under the Document) or any other document executed in connection with the
issuance of the Obligations, or hereunder, provided that such failure continues for more than 30 days
after receipt by the Issuer of written notice of such failure to penbnn; or
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(e) The Issuer shall (i) voluntarily commence any proceeding or file any petition seeking re~ef
under the United States Bankruptcy Code or any other FederaL state or foreign bankruptcy,
insolvency or similar law, (Ii) consent to the institution o~ or fui1 to controvert in a timely and
appropriate manner, any such proceeding or the filing of any such petition, (ill) apply for or consent to
the appointment ofa receiver, trustee, custodian, sequestrator or sunilar official for such party or for a
substantial part of its property, (IV) file an answer admitting the material allegations of a petltion filed
against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fiill generally to pay its debts as they become due or
(vii) take action for the purpose of effecting any of the foregoing; or
(t) An involuntary proceeding shall be commenced or an involuntary petition shalJ be filed in a
court of competent jurisdiction seeking (i) relief in respect of the Issuer, or of a substantial part of its
property, under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy,
msolvency or similar law or (ll) the appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Issuer or for a substantial part of its property; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for 30 days.
Section 4.02. Remedies. If an Event ofDefauIt shall occur and be continuing, then the Insurer may
take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due
and thereafter to become due under this Agreement or to enforce performance of any ob~gation of the Issuer
to the Insurer under the Document or any related instrument, and any obligation, agreement Of covenant of
the Issuer under this Agreement; provided, however, that the Insurer may not take any action to direct or
require acceleration or other early redemption of the Obligations or adversely affect the rights of the Owners.
In addition, ifan Event ofDefuult shall occur due to the failure to pay to the Insurer the amounts due under
Section 1.03 hereo( the Insurer shall have the right to cancel the Surety Bond in accordance with its terms.
All rights and remedies of the Insurer under this Section 4.02 are cumulative and the exercise of anyone
remedy does not preclude the exercise of one or more of the other available remedies.
ARTICLE V
SE'ITLEMENT
The Insurer shall have the exclusive right to decide and detemllne whether any c1a.in1, liability, suit or
judgment made or brought against the Insurer, the Issuer or any other party on the Surety Bond shall or shall
not be paid, compromised, resisted, defended, tried or appealed, and the Insurers decision thereon, ifmade in
good faith, shall be final and binding upon the Insurer, the Issuer and any other party on the Surety Bond.
An itemized stAtement ofpayrnents made by the Insurer, certified by an officer of the Insurer, or the voucher
or vouchers for such payments, shall be prima facie evidence of the liability of the Issuer, and if the Issuer fails
to immediately reimburse the Insurer upon the receipt of such statement of payments, interest shall be
computed on such amount from the date of any payment made by the Insurer at the rate set forth in
subsection (a) of Section 2.01 hereof.
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ARTICLE VI
MlSCELLANEOUS
Section 6.01. Interest Computations. All computations of interest due hereunder shall be made on the
basis of the actual number of days elapsed over a year of360 days.
Section 6.02. Exercise of Rights. No failure or delay on the part of the Insurer to exercise any right,
power or privilege under this Agreement and no course of dealing between the Insurer and the Issuer or any
other party shall operate as a waiver of any such right; power or privilege, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or furthef exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Insurer would otherwise have pursuant to law or equity.
No notice to or demand on any party in any case shall entitle such party to any other or further notice or
demand in similar or other circumstances, or constitute a waiver of the right of the other party to any other or
further action in any circumstances without notice Of demand.
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Section 6.03. Amendment and Waiver. Any provision of this Agreement may be amended. waived,
supplemented, discharged or tenninated only with the prior written consent of the Issuer and the Insurer.
The Issuer hereby agrees that upon the written request of the Paying Agent, the Insurer may make or
consent to issue any substitute for the Surety Bond to cure any ambiguity or fonnal defect or omission in the
Surety Bond which does not materially change the tenns of the Surety Bond nor adversely affect the rights
of the Owners, and this Agreement shall apply to such substituted surety bond. The Insurer agrees to deliver
to the Issuer and to the company or companies, if any, rating the Ob~gations, a copy of such substituted
surety bond.
Section 6.04. Successors and Assigns: Descriptive Headings.
(a) This Agreement shall bind, and the benefits thereof shall inure to, the Issuer and the Insurer
and their respective successors and assigns; provided, that the Issuer may not transfer or assign any or
all of its rights and obligations hereunder without the prior \Vritten consent of the Insurer.
(b) The descriptive headings of the various provisions of this Agreement are inserted for
convenience of reference only and shall not be deemed to affect the meaning or construction of any of
the provisions hereof.
Section 6.05. Other Sureties. If the Insurer shall procure any other surety to reinsure the Surety Bond,
this Agreement shall inure to the benefit of such other surety) its successors and assigns, so as to give to it a
direct right of action against the Issuer to enforce this Agreement, and lithe Insurer." wherever used herein,
shall be deemed to include such reinsuring surety, as its respective interests may appear.
Section 6.06. Signature on Bond. The-Issuers liability shall not be affected by its failure to sign the
Surety Bond nor by any claim that other indemnity or security was to have been obtained nor by the release
of any indemnity, nor the return or exchange of any collateral that may have been obtained.
Section 6.07. Waiver. The Issuer waives any defense that this Agreement was executed subsequent to
the date of the Surety Bond, admitting and covenanting that such Surety Bond was executed pursuant to the
Issuers request and in reliance on the Issuers promise to execute this Agreement.
Section 6.08. Notices. Requests. Demands. Except as otherwise expressly provided herein, all written
notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed
to have been given or made when actually received, or in the case of telex or telecopier notice sent over a
telex or a telecopier machine owned or operated by a party hereto, when sent, addressed as specified below
or at such other address as any of the parties may hereafter specifY in writing to the others:
If to the Issuer: [ISSUER]
[STREET ADDRESS]
[CITY, STATE ZIP]
Attention: [pERSON AT ISSUER]
If to the ~aying Agent: [P A YlNG AGENT]
Attention: Corporate Trust Officer
If to the Insurer: IvIBIA Insurance Corporation
113 King Street
Annonk. New York 10504
Attention: Insured Portfo~o
Management Group
Section 6.09. Swvival of Representations and Warranties. AU representations, warranties and
ob~gations contained herein shall survive the execution and delivery of this Agreement and the Surety Bond.
Section 6.10. Governing Law. This Agreement and the rights and obligations of the parties under this
Agreement shall be governed by and construed and interpreted in accordance with the laws of the State.
Section 6. I 1. Counterparts. This Agreement may be executed in any number of copies and by the
different parties hereto on the same or separate counterparts. each of which shall be deemed to be an original
instrument. Complete counterparts of this Agreement shall be lodged with the Issuer and the Insurer.
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, Section 6.12. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 6.13. Survival of Obligations. Notwithstanding anything to the contraJy contained in this
Agreemen~ the obligation of the Issuer to pay all amounts due hereunder and the rights of the Insurer to
pursue all remeclies shall survive the expiration, tennmation or substitution of the Surety Bond and this
Agreement.
. IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be
duty executed and delivered as of the date first above written.
[ISSUER]
By:
Title:
MBIA Insurance Corporation
, \
President
Attest
Assistant Seaeta1y,
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DEBT SERVICE RESERVE
SURETY BOND
MBIA Insurance Corporation
Armonk, New York 10504
Surety Bond No. XXXXXX
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of lhe premium and subject to the
tcnns of this Surely Bond, hereby unconditiollally and irrevocably guarantees the full and complete payments that
are to be applied to payment of principal of and interest on the Obligations (as hereinafter defined) and that are
required to be made by or on behalf of [NAME OF ISSUER} (the t1lssucrll) under the [TITLE OF THE
DOCUMENT] (the "Document") to [NAME OF PAYING AGENT), (tJ\C "Paying Agent"), as such payments are
due but shall not be 50 paid. in connection with the issuance by the Issuer of [TITLE OF TIlE OBLIGATIONS]
(the "Obligations'!), [IF PARITY "together with any bonds issued on a parily therewith,"l. provided. that the
amoWlt available hereunder for payment pursuant to anyone Demand for Payment (as hereinafter defined) shall not
exceed [a: FIXED COVERAGE [Dollar Amount of Coverage I or tJle [Debt Service Reserve Fund Requirement] (as
,defined in the Document) for the Obligations. whichever is less (the "Surely Bond Limit"); provided, further, that
the amount available at any particular time to be paid 10 the Paying Agent under the terms hereof (the "Surety Bond
Coverage") shall be reduced and may be reinstated from time to time as set forth herein.] or [b: VARIABLE
COVERAGE the annual amount set forth for the applicable bond year on Exhibit A attached hereto (the ItSurcty
Bond Limittl); provided. further, tbat the amount available at any particular time to be paid to the Paying Agent
under the tenus hereof (the "Surety Bond Coverage") shaU be reduced and may be reinstated from time to time as
set forth herein.]
1. As used herein, the tenn "Ownertl shall mean the registered owner of any Obligation as indicated in tllc books
maintained by the applicable paying agent, the Issuer or any designee of the Issuer for such purpose. The tenn
"Owner" shnIl not includc tile Issuer or any person or entity whose obligation or obligations by agreement constitute
the underlying security or source of payment far the Obligations.
2. Upon tlle later of: (i) three (3) days after receipt by the Insurer of a demand for payment in the fonn attached
hereto as Attacluncnt 1 (the "Demand for Paymcne'), duly executed by the Paying Agent; or (ii) Ibe payment date of
the Obligations as specified in the Demand for Payment presented by the Paying Agent to the Insurer, the Insurer
will make a deposit of funds in an account with State Street Bank and Trust Company, N.A, in New York. New
York. or its successor, sufficient for the payment to the Paying Agent., of amounts tIwt are then due to the Paying
Agent (as speciiied in the Demand for Payment) subject to the Surety Bond Coverage.
3. Demand for Payment hereunder may be made by prepaid telecopy, telex, TWX or telegram of the executed
Demand for Payment clo the Insurer. If a Demand for Payment made hereunder does not, in any instance, confonn
to the teons and conditions of this Surety Bond, the Insurer shall give notice to tbe Paying Agent., as promptly as
reasonably pmcticable. that such Demand for Payment was not effected in accordance with the tenus and conditions
of this Surely Bond and briefly state the reason(s) therefor. Upon being notified that such Demand for Payment
was not effected in accordance with this Surely Bond, the Paying Agent may attempt to correct any such
nODconfonning Demand for Payment if, and to Ule extent that, the Paying Agent is entitled and able to do so.
4. The amount payable by the Insurer under this Surety Bond pursuant to a partiCUlar Demand for Payment shall
be limited to the Surety Bond Coverage. The Surety Bond Coverage shall be reduced automatically to the extent of
each payment made by the Insurer hereunder and will be reinstated to the extent of each reimbursement of the
Insurer pursuant to the provisions of Article II of the Financial Guarnnty Agreement dated the date hereof between
the Insurer and tJ1C [ISSUER OR OBLIGOR) (the "Financial Guaranty Agreementll); provided, [ANNUAL
PREMIUM OPTION: that no premiwn is due and unpaid on UUs Surety Bond and] that in no event shall such
reinstatement exceed the Surety Bond Limit TIle Insurer will notify tbe Paying Agent., in writing witIlin five (5)
days of such reimbursement, that the Surety Bond Coverage has been reinstated to the extent of such
reimbursement pursuant to the Financial Guaranly Agreement and such reinstatement shall be effective as of the
date the Insurer gives such notice. TIle notice to the Paying Agent will be substantially in the fonn attached hereto
as Attachment 2.
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5. Any service of process on the Insurer or notice to the Insurer may be made to the Insurer at its offices located
at 113 King Street, Annonk, New York 10504 and such service of process shall be valid and binding. '
6. The tenn of this Surety Bond shall expire [ANNUAL PREMIUM OPTION: ,unless cancelled pursuant to
paragraph 9 hereof,] on the earller of (i) [MATURITY D ATE] (the maturity date of the Obligations being currently
issued), or (ii) the date on wWch the Issuer has made aU payments required to be made" on the Obligations pursuant
to the Document
7. The premium payable on this Surety Bond is not refundable for any reason, including the payment prior to
maturity of the Obligations.
8. [OPTIONAL FIRST SENTENCE: This Surety Bond shall be governed by and interpreted under the laws of
the State of (STATE)}. Any suit hereunder in connettion with any payment may be brought only by the Paying
Agent witlUn [lor 3 years] after (i) a Demand for Payment, with respect to such payment., is made pursuant to the
tenns of this Surety Bond and the Insurer has failed to make such payment, or (ii) payment wouJd otherwise have
been due hereunder but for the failure on the part of the Paying Agent to deliver to the Insurer a Demand for
Payment pursuant to the terms of this Surety Bond. whichever is earlier.
[NOS. 9 and 11 are OPTIONAL]
9. Subject to the terms of the Document, tlle Issuer shall have the right, upon 30 days prior written notice to the
Insurer and the Paying Agent, to tenninate this Surety Bond. In the event of a failure by the Issuer to pay the
premiwn due on this Surety Bond pursuant to the terms of the Financial Guaranty Agreement, the Insurer shall have
the right upon (No. of days] days prior written notice to the Issuer and the Paying Agent to cancel this Surety Bond.
No Demand for Payment shall be made subsequent to such notice of cancellation unless payments are due but shall
not have been so paid in connection with the Obligations.
10. There sha11 be no acceleration payment due Wlder this Policy unless such acceleration is at the sole option of
the Insurer.
11. This poticy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
In witness whereof. the Insurer has caused this Surety Bond to be executed in facsimile on its behalf by its duly
authorized officers, tltis [DATE] day of [MONTH, YEAR]
MBIA Insurance Corporation
Presjdent
Attest
Assistant SccrctDy
SB-DSRF~9[STATE CODE]
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Bond Year
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EXBmlT A
Surety Bond No. XXXXXX
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Maximum Annuai Debt Service
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Attnchmcnt 1
Surety Bond No. xxxx:x:x
DEMAND FOR PAYMENT
.19_
, MBIA Insurnnce Corporation
113 King Street
Annonk, New York 10504
Attention: President
. Reference is made to the Surety Bond No. XXXXXX (the "Surety Bond") issued by the MBIA Insurance
Corporation (the rtInsurer"). The tenus which are capitalized herein and not otherwise defined have the meanings
specified in the Surety Bond unless the context otherwise requires.
The Paying Agent hereby certifies that:
(a) In accordance with the provisions of the Docwnent (attached hereto as Exhibit A), payment is due to the
Owners of the Obligations on (the "Due Datell) in an amount equal to $ (the "Amount Due").
(b) The [Debt Service Reserve Fund Requirement] for the Obligations is $
(c) 'The amounts legally available to the Paying Agent on the Due Date will be $_ less than the Amount
Due (the "Deficiencil). ~
(d) The Paying Agent has not heretofore made demand under the Surety Bond for the Amount Due or any
portion thereof.
The Paying Agent hereby requests that payment of the Deficiency (subject to the Surety Bond Coverage) be
made by the Insurer under the Surety Bond and directs that payment under the Surety Bond be made to the
following account by bank wire transfer of federal or other immediately available funds in accordance with the
tenns of the Surety Bond:
[paying Agent's Account)
lP A YING AGENT]
By _
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Attachment 2
Surety Bond No. XXXXXX
NOTICE OF REmSTATEMmNT
.19_
[paying Agent]
{Address}
Reference is made to the Surety Bond' No. XXXXXX (the IISurety Bond") issued by the MBIA Insurance
COIpomtioo (the "Insurer"). The terms which arc capitalized herein and oot otherwise defined have the meanings
specified in the Surety Bond unless the context oUlelWise requires.
The Insurer hereby delivers notice that it is in receipt of payment' from the Obligor pursuant to Article II of the
Financial Guaranty Agreement and as of the date hereof the Surety Bond Coverage is $
MBIA Insurance Corporation
President
Attest:
Assistant Secretary
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ANNEX B
DEFINITIONS
For all purposes of this Agreement and the Surety Bond, except as otherwise expressly provided herein
or unless the context otherwise requires, all capitalized tenns shall have the meaning as set out below, which
shall be equally applicable to both the singular and pluraJ fonns of such tenns.
"Agreement" means this Financial Guaranty Agreement.
I1Closing Date" means [CLOSING DATE], 1998.
"Commitment" means the commitment to issue Municipal Bond Guaranty Insurance in the form
attached hereto as Ann~ C. '
IIDebt Service Payments" means those payments required to be made by or on behalf of the Issuer
which will be applied to payment of principal of and interest on the Obligations.
"Demand for' Payment" means the certificate submitted to the Insurer for payment under the Surety
Bond substantially in the fonn attached to the Surety Bond as Attaclunent I.
tlDocument" means (DOCUMENT].
"Event ofDefuu]t" shall mean those events of default set forth in Section 4.01 of the Agreement.
IIInsurer' has the same meaning as set forth in the first paragraph of this Agreement.
I1Issuer" means [ISSUER].
"Obligationstl means [LEGAL TITIE OF ISSUE] [IF APPLICABLE: together with any bonds
issued on a parity therewith].
"Ownerstl means the registered owner of any Obligation as indicated in the books maintained by the
Paying Agent, the Issuer or any designee of the Issuer for such purpose.
ttpaying Agentll means (pAYlNG AGENT].
"Premium" means [PREMIUM} payable to the Insurer on or prior to the Closing Date.
"Reimbursement Period" means, with respect to a particular Surety Bond Payment, the period
commencing on the date of such Surety Bond Payment and ending on the earlier of the date of cancellation
of the Surety Bond due to nonpayment of Premiwn when due or on the expiration of x following such .
Surety Bond Payment.
11Reimbursement Ratell means Citibank's prime rate plus three (3) percent per annum, as of the date of
such Surety Bond Payment, said "prime ratell being the rate of interest announced from time to time by
Cibbank, N,A, New York, New York, as its prime rate. The rate of interest shall be calculated on the basis
of the actual nwnber of days elapsed over a 360-day year.
IIStatell means [STATE].
nsurety Bond" means that surety bond attached hereto as Annex A and issued by the Insurer
guaranteeing subject to the terms and limitations thereof, Debt Service Payments required to be made by the
Issuer under the Docwnent.
"Surety Bond Coverage" means the amount available at any particular time to be paid under the tenns
of the Surety Bond, which amount shall never exceed the Surety Bond Limit.
"Surety Bond Limit" means [SURETI' BOND LIMIT].
"Surety Bond Payment" means an amount equal to the Debt Service Payment required to be made by
the Issuer pursuant to the Document less (I) that portion of the Debt Service Payment paid by or on behalf of
the Issuer, and (ii) other funds legally available for payment to the Owners. all as certified in a Demand for
Payment.
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