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94-79
RESOLUTION NO. 94 -79 A RESOLUTION AWARDING THE SALE OF $8,110,000 CITY OF CLEARWATER, FLORIDA, GAS SYSTEM REVENUE BONDS, SERIES 1994A; RATIFYING PREVIOUS ACTIONS TAKEN BY THE FINANCE DIRECTOR AND THE MAYOR - COMMISSIONER IN CONNECTION THEREWITH; APPROVING THE MATURITIES AND OTHER TERMS OF SUCH BONDS; PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on August 15, 1991, the City Commission of the City of Clearwater, Florida (the "City" or the "Issuer ") enacted Ordinance No. 5118 -91 (the "Original Ordinance ") to provide for the issuance of bonds payable from Net Revenues of the Gas System (as defined therein); and WHEREAS, on August 4, 1994, the Issuer enacted Ordinance No. 5564 -94 (the 111994 Ordinance ", which together with the Original Ordinance, is referred to herein collectively as the "Bond Ordinance ") which authorized the issuance of not to exceed $8,250,000 City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds ") as Additional Bonds under the Original Ordinance; and WHEREAS, pursuant to Resolution No. 94 -55, the City provided for the public sale of the Series 1994A Bonds pursuant to an Official Notice of Bond Sale; and WHEREAS, Resolution No. 94 -55 delegated certain responsibili- ties in connection with the award and issuance of such Series 1994A Bonds to the Mayor- Commissioner and the Finance Director and the City wishes to ratify the actions taken; and WHEREAS, the 1994 Ordinance authorized the City to supplement the terms thereof to provide additional covenants regarding municipal bond insurance requirements; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA, as follows: SECTION 1. In accordance with the provisions of Resolution No. 94 -55, the City published a Summary Notice of Sale in the St. Petersburg Times and in The Bond Buyer and distributed an Official Notice of Bond Sale calling for bids to be received by 12:00 noon on September 12, 1994. Such action is hereby ratified and confirmed. SECTION 2. In accordance with the provisions of Resolution 94 -55 the Finance Director accepted the bids submitted pursuant to the Official Notice of Bond Sale, and at the hour stated in said Official Notice of Bond Sale, bidding was closed and the bids attached as Exhibit A to this Resolution were found to have been filed and to comply in all respects with the terms of the said Yz/-11 Q Notice of Bond Sale. The Official Notice of Bond Sale set forth the maturities, subject to adjustment as provided therein, and redemption provisions for the Series 1994A Bonds, and such maturities, as may have been adjusted, and redemption provisions, are hereby ratified and approved. SECTION 3. The bid offering to purchase said Series 1994A Bonds at the lowest true interest cost in accordance with the Notice of Bond Sale was the bid of Prudential Securities Incorporated (the "Purchaser ") offering to purchase the Series 1994A Bonds for $7,964,020.00, plus accrued interest. The bid of Prudential Securities Incorporated is hereby accepted and $8,110,000 City of Clearwater, Florida Gas System Revenue Bonds, Series 1994A are hereby awarded to Prudential Securities Incorporated at the price offered for the Series 1994A Bonds, bearing interest at the rates set forth in the bid attached hereto as part of Exhibit A. SECTION 4. In accordance with the provisions of Resolution No. 94 -55, the Mayor - Commissioner and Finance Director deemed the Preliminary Official Statement final as of August 25, 1994. Such action is hereby ratified and confirmed. The Preliminary Official Statement attached hereto as Exhibit B is hereby ratified and approved. The Mayor - Commissioner and Finance Director are authorized and directed to execute and deliver an Official Statement in substantially the form attached as Exhibit B, with such changes, insertions and omissions as shall be approved by the Mayor - Commissioner and Finance Director. SECTION 5. Pursuant to Section 7 of Resolution No. 94 -55, Municipal Bond investors Assurance Corporation (the "Credit Facility Issuer ") has been selected as the Credit Facility Issuer, and, pursuant to the Purchaser's bid, the Purchaser has elected to insure the Series 1994A Bonds. Selection of the Credit Facility Issuer is hereby ratified and confirmed and payment for such insurance is hereby authorized from proceeds of the Series 1994A Bonds in accordance with the Commitment for Municipal Bond Insurance from the Credit Facility Issuer attached hereto as Exhibit C (to the extent applicable to a municipal bond insurance policy and exclusive of any conditions as to a debt service reserve fund policy, if any), and the terms, conditions and agreements relating to the City set forth in such Commitment for Municipal Bond Insurance are hereby accepted and incorporated herein. A statement of insurance is hereby authorized to be printed on or attached to the Series 1994A Bonds for the benefit and information of the holders of the Series 1994A Bonds. SECTION 6. In addition to the covenants and agreements of the City previously contained in the Bond Ordinance regarding the rights of the Credit Facility Issuer which are hereby incorporated herein, the City hereby makes the following additional covenants and agreements for the benefit of the Credit Facility Issuer and q1/- 7 7 the Holders of the Series 1994A Bonds while the Bond Insurance Policy insuring the Series 1994A Bonds is in full force and effect: (a) The Credit Facility Issuer shall be provided prior written notice of any amendment of the Bond Ordinance adopted pursuant to Section 17 of the Original Ordinance, and any amendments to the Bond Ordinance consented to by the Credit Facility Issuer shall also be sent to Standard & Poor's Corporation. (b) Any notice that is required to be given to a holder of the Series 1994 Bonds or to the Paying Agent shall also be provided to the Credit Facility Issuer. All notices required to be given to the Credit Facility Issuer under the Bond Ordinance shall be in writing and shall be sent by registered or certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Surveillance. (c) Pursuant to Section 16(N) of the Original Ordinance, the Credit Facility Issuer shall have the same rights conferred therein upon any Holder of Series 1994A Bonds issued under the provisions thereof or any trustee acting for such Holders to protect and enforce any and all rights contained in the Bond Ordinance, and, in the event that such remedies include acceleration of payment of the Series 1994A Bonds, the Credit Facility Issuer shall have the right to consent to such acceleration prior to the taking of such action by the Holders of the Series 1994A Bonds. (d) The City hereby covenants to limit Authorized Investments, as defined in the Original Ordinance, in which funds on deposit in the Reserve Account for the Series 1994A Bonds are invested to maturities of not more than 5 years, and all such Authorized Investments in the Reserve Account shall be valued at fair market value and marked to market at least once each year. (e) The City will not fund the Reserve Requirement with any form of credit enhancement as provided in Section 16(C)(5) of the Original Ordinance without the prior written consent of the Credit Facility Issuer. SECTION 7. The Mayor - Commissioner, Clerk, Finance Director, City Manager and City Attorney or any other appropriate officers of the City are hereby authorized and directed to execute any and all certifications or other instruments or documents required by the Bond Ordinance, Resolution No. 94 -55, the Official Notice of Bond Sale or any other document referred to above as a prerequisite or precondition to the issuance of the Series 1994A Bonds and any representation made therein shall be deemed to be made on behalf of the City. SECTION 8, This resolution shall take effect immediately upon its adoption. 3 9y�i9 r a, Passed and adopted bp the City Commission of the City of Clearwater, Florida, this 12th day of September 1994. e't&LWZ4 Rata Garvey Mayor- Commissioner l Attest: Cyn is E. Goudeau Cit Clerk_ i i i i i i 4 � CA TIC �• act 1 CITY OF CLEARWATER, FLORIDA �> $3,110,000 GAS SYSTEM RENTNUE BONDS, SERIES 1994A BIDDER CHECK OR INSURANCE SURETY ta;l\tam R• Ha.�h S �' • (Q . � 0 4 5 IVIeC'ri 11 Ly��h s Y 3. � • `i� l S Ga.�n p,,iO�,an `.� i� Y �. g (�.Rb-7y33 (.3q4p og G i Yxhibit A Bias OFFICIAL NOTICE OF BOND SALE $8,110,000* CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Sealed proposals will be received by the City of Clearwater, Florida (the "City") at the offices of the Finance Director of the City, 112 South Osceola Avenue, Clearwater, Florida 34616 by 12:00 Noon (Eastern Daylight Savings Time) on September 17 1994 for the purchase of the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds'). Each proposal, together with the good faith deposit described below, should be enclosed in a sealed envelope marked 'Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12 :00 Noon (Eastern Daylight Savings Time), September 12, 1994, or such similar legend which appropriately identifies the contents thereof. Form of Series 1994A Bonds The Series 1994A Bonds will be issued in fully registered form, without coupons, and in denominations of $5,000 or any integral multiples thereof. Principal of and any redemption premium on the Series 1994A Bonds shall be paid to the registered owners at the principal corporate trust office of First Union National Bank of Florida, Jacksonville, Florida (the "Paying Agent" and "Registrar "), upon presentment and surrender of the Series 1994A Bonds. Interest on the Series 1994A Bonds shall be paid to the registered owners as shown on the registration books maintained by the Registrar, by check or draft mailed to each such owner's address as shown on the registration books maintained by the Registrar as of the fifteenth (15th) day of the calendar month preceding such interest payment date. Interest will be payable each March 1 and September 1, commencing March 1, 1995. Interest will be calculated on the basis of a 360 -day year of twelve 30 -day months. Maturity Schedule The Series 1994A Bonds will mature on September 1 of the following years in the following principal amounts: Principal Principal Maturity Amount* Maturity Amount 2014 $540,000 2020 $ 770,000 2015 570,000 2021 815,000 2016 605,000 2022 865,000 2017 645,000 2023 920,000 2018 680,000 2024 975,000 2019 725,000 Redemption Provisions The Series 1994A Bonds are subject to redemption at the option of the City prior to maturity on or after September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal amount of the Series 1994A Bonds to be redeemed, as set forth below, together with accrued interest to the date fixed for redemption. 'Preliminary, subject to cltunge. d ' Redemption Period Redemption Price September 1, 2002 through August 31, 2003 102% September 1, 2003 through August 31, 2004 101 September 1, 2004 and thereafter 1Q0 Adiustment of Principal Amount After final computation of the bids, to achieve desired debt service levels, the City reserves the right either to increase or decrease any Principal Amount of the Series 1994A Bonds (or any Amortization Installment in the case of a Term Bond) shown on the schedule of Principal Amounts set forth above (the "Maturity Schedule "), by an amount not to exceed rive percent (5 01o) of the stated amount of each such Principal Amount on the Maturity Schedule and correspondingly adjust the issue size, all calculations to be. rounded to the nearest $5,000. In the event of any such adjustment, no rebidding or recalculation of the bid submitted will be required or permitted. If necessary, the total purchase price of the Series 1994A Bonds will be increased or decreased in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 1994A Bonds specified herein; and the Series 1994A Bonds of each maturity, as adjusted, will bear interest at the same rate and must have the same initial reoffering yields as specified in the bid of the successful bidder. However, the award will be made to the bidder whose bid produces the lowest true interest: cost, calculated as specified below, solely on the basis of the Series 1994A Bonds offered pursuant to the Bid Maturity Schedule, without taking into account any adjustment in the amount of Series 1994A Bonds set forth in the Bid Maturity Schedule. Designation of Term Bonds Bidders may specify that the annual Principal Amounts of the Series 1994A Bonds coming due in any two or more consecutive years may be combined to form one or more maturities of Term Bonds scheduled to mature in the last of such years with the preceding annual Principal Amounts for such years constituting mandatory Amortization Installments to be selected by lot and redeemed at a price of par plus accrued interest in accordance with the Resolution. Basis of Award Proposals must be unconditional and only for all the Series 1994A Bonds. The purchase price bid for the Series 1994A Bonds may include a discount (including underwriters' discount and original issue discount, but excluding any municipal bond insurance premium) not to exceed two percent (2 17c) of the principal amount of the Series 1994A Bonds and shalt specify how much of the discount is original issue discount. No more than one (1) Proposal from any bidder will be considered. The City reserves the right to determine the Successful Bidder (as dcrined below), to reject any or all bids and to waive any irregularity or informality in any bid. The Series 1994A Bonds will be awarded to the bidder (herein referred to as the "Successful Bidder ") offering; such interest rate or rates and purchase price which will produce the lowest true interest cost to the City over the life of the Series 1994A Bonds. True interest cost for the Series 1994A Bonds (expressed as an annual interest rate) will be that annual interest rate being twice that factor of discount rate, compounded semiannually, which when applied against each semiannual debt service payment (interest, or principal and interest, as due) for the Series 1994A Bonds will equate the sum of such discounted semiannual payments to the bid price (inclusive of accrued interest). Such semiannual debt service payments begin on March 1, 1995. The true interest cost shall be calculated fro +n the closing date of the Series 1994A Bonds (September 28, 1994) and shall be based upon the principal amounts of each serial maturity set forth in this Notice of Bond Sale and the bid price set forth in each Proposal For the Series 1994A Bonds submitted in accordance with the Notice of Bond Sale. In case of a tiv. the ON Inav %leet the Successful Bidder by lot. It is requested that each Proposal for the Series 1994A Bonds be accompanied by a computation of such true interest cost to the City under the term of the Proposal for Bonds, but such computation is not to be considered as part of the Proposal for Bonds. Interest Rates Permitted The Series 1994A Bonds Shall bear interest expressed in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent. No interest rate specified for any maturity may be lower than any interest rate specified for an earlier maturity. There shall not be a difference greater than fifty basis points (50 b.p.) between the lowest coupon and highest coupon. 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. It shall not be necessary that all Series 1994A Bonds bear the same rate of interest, provided that all Series 1994A Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based upon the use of split or supplemental interest payments or a zero rate of interest will not be considered. Paving Agent and Registrar The Paying Agent and Registrar for the Series 1994A Bonds is First Union National Bank of Florida, Jacksonville, Florida. Security Principal of and interest on the Series 1994A Bonds to be issued pursuant to Ordinance No. 5118 -91, as amended and supplemented by Ordinance No. 5564 -94 and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of the City's Gas System, together with the earnings thereon derived from the investment thereof in the Funds and Accounts established in the Resolution and as more fully described in the Preliminary Official Statement. The lien of the Series 1994A Bonds upon the Net Revenues is on a parity with the City's outstanding $7,680,000 Gas System Revenue Bonds, Series 1991. The Series 1994A Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Series 1994A Bonds or the making of any debt service fund, reserve or other payments provided for in the Resolution. Purpose Pursuant to the Ordinance, the Series 1994A Bonds are being issued to finance additions, extensions, supplements or replacements to the City's Gas System, to make a deposit to the Reserve Fund for the Series 1994A Bonds, and to pay the cost of issuance of the Series 1994A Bonds. Issuance of Series 1994A Bonds The Series 1994A Bonds will be issued and sold by the City of Clearwater, Florida, a municipal corporation organized and existing under the laws of the State of Florida. The Series 1994A Bonds are being issued pursuant to Ordinance No. 57.18 -91 enacted August 15, 1991, and Ordinance No. 5564 -94, enacted August 4, 1994 (collectively, the "Bond Ordinance ") by the City of Clearwater, Florida (the "City ") and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law, rr Municipal Bond Insurance Policy A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest on the Series 1994A Bonds has been obtained from Municipal Bond Investors Assurance Corporation. Bidders, at their option, may elect to utilize this bond insurance commitment in their bid. Alternatively, bidders may rely upon published ratings on the Series 1994A Bonds received from Moody's Investors Service and Standard & Poor's of "A" and "BBB ", respectively. If bond insurance is used, the price bid for purchase of the Series 1994A Bonds, as set forth on the Official Bid Form, will be reduced by the amount of the bond insurance policy premium, for the purpose of calculating the true interest cost rate of the bid. Information regarding the bond insurance commitment including the amount of the premium, may be obtained from David Thornton of Raymond James & Associates, Inc., Financial Advisor to the Issuer (813) 573 -8282. Proposals Proposals are desired on forms which will be furnished by the City, and envelopes, containing Proposals should have endorsed thereon "Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994 ", or words of equivalent import, and should be addressed to the City at the above address. Each proposal must be accompanied by the sum of $81,100 in the form of either (i) a Cashier's or Certified Check drawn upon an incorporated bank or trust company, payable to the City of Clearwater, Florida, as evidence of good faith, or (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 Capital Guaranty Insurance Company has been so approved) and submitted to the City prior to the opening of the bids, identifying each bidder whose deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the part of the bidder. If a check is delivered the check of the successful bidder may be cashed by the City and the proceeds will be held as security for performance of the bid. If a Financial Surety Bond is provided by the successful bidder the good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m. on the next business day. If the Successful Bidder shall fail to comply promptly with the terms of its Proposal, the amount of such check will be forfeited to said payee as liquidated damages. The checks of unsuccessful bidders will be returned to such bidders by registered mail at the addresses stated in their Proposals, or delivered to a representative of such bidder immediately after the award of the Series 1994A Bonds to the Successful Bidder. The proceeds of the good faith check of the Successful Bidder will be applied to the payment of the purchase price of the Series 1994A Bonds. Prior to the delivery of the Series 1994A Bonds, the City may cash and invest the proceeds from the good faith check. No interest will be paid to any bidder upon any good faith check. Delivery and Payment It is anticipated that the Series 1994A Bonds in fully registered form will be available for delivery on September 28, 1994 in New York, New York at The Depository Trust Company, or some other date and place to be mutually agreed upon by tha 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 Successful Bidder upon delivery of the Series 1994A Bonds the following closing documents in a form satisfactory to Bond Counsel: (1) signature and no- litigation certificate; (2) federal tax certificate; (3) certificate regarding information in the Official Statement; and (4) seller's receipt as to *Preliminary, subject to change. payment. A copy of the transcript of the proceedings authorizing the Series 1994A Bonds will be delivered to the Successful Bidder of the Series 1994A Bonds upon request. Copies of the form of such closing papers and certificates may be obtained from the City. Information Statement Section 21838(1)(b)1, Florida Statutes requires that the City file, within 120 days after delivery of the Series 1994A Bonds, an information statement with the Division of Bond Finance of the State of Florida (the "Division ") containing the following information: (a) the name and address of the managing underwriter, if any, connected with the Series 1994A Bonds; (b) the name and address of any attorney or financial consultant who advised the City with respect to the Series 1994A Bonds; and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant and (d) any other fee paid by the City with respect to the Series 1994A Bonds, including any fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver to the City at or prior to the time of delivery of the Series 1994A Bonds, a statement signed by an authorized officer containing the same information mentioned in (a) and (c) above. The Successful Bidder shall also be required, at or prior to the delivery of the Series 1994A Bonds, to furnish the City with such information concerning the initial prices at which a substantial amount of the Series 1994A Bonds of each maturity were sold to the public as the City shall reasonably request. Pursuant to Section 218385(2) and (3) of the Florida Statutes, as amended, a truth -in- bonding statement will be required from the Successful Bidder at closing substantially in the following form: "The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) fmancing capital projects for the City's Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of �% per annum, total interest paid over the life of the Series 1994A Bonds will be $ . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ not being available to finance the other gas system expenses of the City. This truth -in- banding statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds." Legal Opinion The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant, Miller and Olive, PA., Tallahassee, Florida, to the effect that based on existing law, and assuming compliance by the City with certain covenants and requirements of the Internal Revenue Code of 1986, as amended (the "Code'), regarding use, expenditures, 'investment of proceeds and the timely payment of certain investment earnings to the United States Treasury, the interest on the Series 1994A Bonds is not includable in the gross income of individuals, however, interest on the Series 1994A Bonds will be included in the calculation of the alternative minimum tax and environmental tax liabilities of corporations. The Code contains other provisions that could "Preliminary, subject to change. J,.,yrr I result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series 1994A Bonds or the inclusion in certain computations (including, without limitation, those related to the corporate alternative minimum tax and environmental tax) of interest that is excluded from gross income. Official Statement The Preliminary Official Statement, copies of which may be obtained as described below, is in a form "deemed final" by the City for purposes of SEC Rule 15c2- 12(b)(1) (except for certain permitted omissions as described in such rule) but is subject to revision, amendment and completion in a final Official Statement. Upon the sale of the Series 1994A Bonds, the City will publish a final Official Statement in substantially the same form as the Preliminary Official Statement. Copies of the final Official Statement will be provided, at the City's expense, on a timely basis in such quantities as may be necessary for the Successful Bidder's regulatory compliance. CUSIP Number It is anticipated that CUSIP identification numbers will be printed on the Series 1994A Bonds, but neither the failure to print such number on any Series 1994A Bonds nor any error with respect thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and pay for the Series 1994A Bonds in accordance with its agreement to purchase the Series 1994A Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 1994A Bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said number shall be the responsibility of and shall be paid for by the Successful Bidder. Copies of Documents Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form and further information which may be desired, may be obtained from the City's Financial Advisor, Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida 33716, telephone (813) 573 -8282. Amendment and Notices Amendments hereto and notices, if any, pertaining to this offering shall be made by the Munifacts News Service. CITY OF CLEARWATER, FLORIDA Isl Rita J Garvey Mayor - Commissioner 6 091 94 14153 $ 14074711003 q0 EW_ ;DS FL 09 PROPOSAL FOR 58111010110• CITY OF CLEARWATER. FWMIDA GAS SYSTEM REVMIM BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 1 1.G. E&O-ax _5 Ladies and Gentlemen: For the City of Clearwater, Florida, Gas System Revenue BOAds, Series 1MA. (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale, which is hereby ma p a part of this Proposal, we will pay you in immediately available federal reserve funds ��->i- 1 ,y, Dollars (S 44/4 1'00 ) (not less than S7,947,8W), plus accrued interest to the date of delivery of the Series 1994A BondsZ01 We do do not wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be Insured by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shalt bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturity A=unt* R1 a ro Yield Maturity Amount" Rate or Yjdg 2014 540,000 • 6.00 ?420 770,000 2035 570,000_ y,y�'� 2021 8151000 , i5. 2016 605,000 1„ 0—; 2022 865,000 !'l 2017 645,000 / .co 2023 920,000 L: ,2:L 2018 6801000 L. CO 2014 975,000 2019 725,000 L_ 0 'Perm Bonds Ontlon. The interest rate or reoffering pricC or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated 3haA be applied for the mandatory retirement of one or more Tcrm Bonds maturing in the years and amoutua and bearing interest as follows: S (5'. vGz' Term Bonds maturing on September i,%_?� at4.0' oper annum toyieA6/55 %per annum _ Term Boudt maturing oa September 1, f at f"� % per annum to yield per annum. S Term Bonds maturing on September 1, at —% per annum to yield �% per mmum. Term Bonds maturing an September 1, at —% per annum to yield gb per &= um. S r, Term Bonds maturing on September 1, at % per annum to yield 95 per am um. • Preliminary subject to cbange as stated in Official Notice of Sale. i v- 1'f i 09: 44 14152 2 14074711003 q0 ED';'RU5 FL 07 We will accept delivery of said Series M4A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryaot, Miller and Olive, P.A., Bond Cotmsei, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (1) a cashler's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this proposal is not accepted, or (ii) provided for a F"utancial Surety Bond in accordance with the official Notice of Sale. The amount of the check of the winning bidder is to be retuned and cashed by the City until the delivery of said Series 1994A Bond& and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds Is hereby acknowledged, The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. By.. t _fit T_ ~� Address. - City State Zip 4/i X17 Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount Less Original Issue Discount Less Underwriter's Discount Amount Bid Before Accrued Interest Less bond Insurance Premium (if applicable) S SLdLG}, Gc Bid Accrued Interest' True Interest Cost Rate, (To September 28, 1994. �. and Inclusive of Insurance Premium costs, if any) - r 09 -`1/94 14153 a 14074711003 AS Er- == -RDS FL 08 The following truth=m- bonding statcMeat is required to be completed !d compliance with Section 218385, Florida Statutes: The City of Clearwater, Florida is proposing to issue $8,130,000' original aggregate principal amount of Gas System Revenue Bonds, Scrics 1994A for the purpose of (i) financing capital projects for the City's Gas j System, (h') funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described is Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2M, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average intcrest rate of 9ii per annum, total interest paid over the life of the Series 1994A Bonds will be S / 2 `y 9.5 The source of repayment or security for this proposal is the City's Pledged Funds� incldding the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in S not being available to finance the other gas system expenses of tho City. This truth -ia- bonding statement prepared pursuant to Section 218365(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 Scrics 1994A Bonds. (No addition or alteration is to be made to this Official Bid Form, and it must be submitted with the Official Notice of Bond Sale.) °Prcllmiaary, subject to change. 3 PROPOSAL FOR $8,110,000* CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 Ladies and Gentlemen: For the City, of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of I this Pgposal we will pay you in immediateI available fede al reserve funds VP- P1 rn j corn d'1 i 'Y g k u' ✓.2,� f 0 U to {,k1�2 k .2K rr2 vtcvt S tX a. to PO /L00 Dollars ($ 60 r 049 (not less than $7,947,800), plds accrued interest to the date of delivery of the Series 1994 Bonds. We do V or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be insured by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield M- aturity Amount* Rate or Yield 2014 540,000 6.00 iq /� t7 2020 770,000 2015 570,000 2021 815,000 2016 605,000 2022 855,000 2017 645,000 7023 9201000 2018 680,000 2024 975,000 7019 725,000 Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: I ?�6 1000 Term Bonds maturing on September 1, at? %per annum to yield f %"per ann 0 J 0 Term Bonds maturing on September 1, at /f% per annum to yield %per�artnu� $ 3 1 Term Bonds maturing on September 1, a6a at l �% per annum to yield4 % per annum Term Bonds maturing on September 1, �V2q, at ^ r % per annum to yield %per aruxtun, � $ Term Bonds maturing on September 1, at % per annum to yield �% per annum, Prcliminary subject to change as stated in Official Notice of Sale. We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, P.A., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashices or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a F'mancial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. By. r_ °10 0 Address —{— J Q,G Kre si vL l e ;FL State Zip c�Ca�t(�'��r�L�r�u City 37 �r9 Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cos[ to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Paz Amount Less Original Issue Discount Less Underwriter's Discount Amount Bid Before Accrued Interest Less Bond Insurance Premium (if applicable) Bid Accrued Interest True Interest Cost Rate (To September 28, 1994 and Inclusive of Insurance Premium costs, if any) 2 $��, 00 $ IJ % © t7 `J �� O $ 3 7 Y0, eq 3 C� % A Ji Is �,e The following truth -in- bonding statement is required to be completed in compliance with Section 218385, Florida Statutes; The City of Clearwater, Florida is proposing to issue $8,110,000• original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve bind, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1 A Bonds a expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of 3'ar� annum, total interest paid over the life of the Series 1994A Bonds will be S 10- q ? ,:] � , 7 S:. The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $-2 O, J/S-/ , 7q. ,Zrnot being available to finance the other gas system expenses of the City. This truth -in- bonding sta ement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds. (No addition or alteration is to be made to this Official Bid Form, and it must be submitted with the Official Notice of Bond Sale.) 'Preliminary, subject to change. 3 ' f PROPOSAL FOR $8,110,000* CITY OF CLEARiVATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 37616 Ladies and Gentlemen: For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of this Proposal, Ive Will pay you in_immetliately available federal re$erve, funds —_ ° Dollars ($ O not less than $7,947,80A Pl a tee rdst to e date of delivery 9f theo/ Series 1994A Bonds. %t %hv�- f r, 8,d13,3ts(�, ?o> do h—be or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds insured by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield Maturity Amount* Rate or Yield 2014 540,000 &.00 6 a 2020 770,000 (0.10 99.2 S 2015 570,000 ( U o 5 SD 2021 815,000 .0 2016 605,000 00 i15- 2022 865,000 .2-O f 2017 645,000 (e.l a Od 2023 920,000 (n Z;o 1010 2018 680,000 &110 9 �I :7� 2024 975,000 11.20 I oO 2019 725,000 to ,10 qiSQ Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: $ Term Bonds maturing on September 1, at _% per annum to yield.% per annum. $ Term Bonds maturing on September 1, at �% per annum to yield �% per annum. $ Term Bonds maturing on September 1, at ✓% per annum to yield �% per annum. S Term Bonds maturing on September 1, at _% per annum to yield per annum. S Term Bonds maturing on September 1, at % per annum to yield % per annum. " Preliminary subject to change as Slated in Official Notice of Sale. We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, P.A., Bond Counsel., Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. By: Smith Barney Inc. 10.0 North T, g St Suite 3000 Address Sue Ann Corrigan, VP ap Tampa FL 33602 City State Zip 813 - 229 -227 Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount S11 I 0� 000 Less Original Issue .Discount $ Zfe ,637• �-O Less Underwriter's Discount — Amount Bid Before Accrued Interest $ ;.,o11,1KIP Less Bond Insurance Premium (if applicable) $ 0'.000 Bid $ 1. Accrued Interest $ -7� True Interest Cost Rate (To September 28, 1994 ZiO 7y� %a and Inclusive of Insurance Premium costs, if any) �E 2 The following truth -in- bonding statement is required to be completed in compliance with Section 218.385, Florida Statutes: The City of Clearwater, Florida is proposing to issue $8,110,000` original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the Citys Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The Final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of u% per annum, total interest paid over the life of the Series 1994A Bonds will be 5 . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in 5 not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds. (No addition or alteration is to be made to this Official Bid Form, and it must be submitted with the Official Notice of Bond Sale.) i t w r *Preliminary, subject to change. 3 ys}L� '• id 1 the Series 1994A Bonds be accompanied by a computation of such true interest cost to the City under the term of the Proposal for Bonds, but such computation is not to be considered as part of the Proposal for Bonds. Interest Rates Permitted The Series 1994A Bonds shall bear interest expressed in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent. No interest rate specified for any maturity may be lower than any interest rate specified for an earlier maturity. There shall not be a difference greater than fifty basis points (50 b.p.) between the lowest coupon and highest coupon. 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. It shall not be necessary that all Series 1994A Bonds bear the same rate of interest, provided that all Series 1994A Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based upon the use of split or supplemental interest payments or a zero rate of interest will not be considered. Paviva Agent and Reeistrar The Paying Agent and Registrar for the Series 1994A Bonds is First Union National Bank of Florida, Jacksonville, Florida. Security Principal of and interest on the Series 1994A Bonds to be issued pursuant to Ordinance No. 5118 -91, as amended and supplemented by Ordinance No. 5564 -94 and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of the City's Gas System, together with the earnings thereon derived from the investment thereof in the Funds and Accounts established in the Resolution and as more fully described in the Preliminary Official Statement. The lien of the Series 1994A Bonds upon the Net Revenues is on a parity with the City's outstanding $7,680,000 Gas System Revenue Bonds, Series 1991. The Series 1994A Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Series 1994A Bonds or the making of any debt service fund, reserve or other payments provided for in the Resolution. Purpose Pursuant to the Ordinance, the Series 1994A Bonds are being issued to finance additions, extensions, supplements or replacements to the City's Gas System, to make a deposit to the Reserve Fund for the Series 1994A Bonds, and to pay the cost of issuance of the Series 1994A Bonds. Issuance of Series 1994A Bonds The Series 1994A Bonds will be issued and sold by the City of Clearwater, Florida, a municipal corporation organized and existing under the laws of the State of Florida. The Series 1994A Bonds are being issued pursuant to Ordinance No. 51.18 -91 enacted August 15, 1991, and Ordinance No. 5564 -94, enacted August 4, 1994 (collectively, the "Bond Ordinance ") by the City of Clearwater, Florida (the "City ") and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law. r � I' Municipal Bond Insurance Polic A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest on the Series 1994A Bonds has been obtained from Municipal Bond Investors .Assurance Corporation. Bidders, at their option, may elect to utilize this bond insurance commitment in their bid. Alternatively, bidders may rely upon published ratings on the Series 1994A Bonds received from Moody's Investors Service and Standard & Poor's of "A" and "BBB ", respectively. If bond insurance is used, the price bid for purchase of the Series 1994A Bonds, as set forth on the Official Bid Form, will be reduced by the amount of the bond insurance policy premium, for the purpose of calculating the true interest cost rate of the bid. Information regarding the bond insurance commitment including the amount of the premium, may be obtained from David Thornton of Raymond James & Associates, Inc., Financial Advisor to the Issuer (813) 573 -8282. Proposals Proposals are desired on forms which will be furnished by the City, and envelopes, containing Proposals should have endorsed thereon "Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994 ", or words of equivalent import, and should be addressed to the City at the above address. Each proposal must be accompanied by the sum of $51,100 in the form of either (i) a Cashier's or Certified Check drawn upon an incorporated bank or trust company, payable to the City of Clearwater, Florida, as evidence of good faith, or (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 Capital Guaranty Insurance Company has been so approved) and submitted to the City prior to the opening of the bids, identifying each bidder whose deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the part of the bidder. If a check is delivered the check of the successful bidder may be cashed by the City and the proceeds will be held as security for performance of the bid. If a Financial Surety Bond is provided by the successful bidder the good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m. on the next business day.. if the Successful Bidder shall fail to comply promptly with the terms of its Proposal, the amount of such check will be forfeited to said payee as liquidated damages. The checks of unsuccessful bidders will be returned to such bidders by registered mail at the addresses stated in their Proposals, or delivered to a representative of such bidder immediately after the award of the Series 1994A Bonds to the Successful Bidder. The proceeds of the good faith check of the Successful Bidder will be applied to the payment of the purchase price of the Series 1994A Bonds. Prior to the delivery of the Series 1994A Bonds, the City may cash and invest the proceeds from the good faith check. No interest will be paid to any bidder upon any good faith check. Delivery and Payment It is anticipated that the Series 1994A Bonds in fully registered form will be available for delivery on September 28, 1994 in New York, New York at The Depository Trust Company, or some other date and place to be mutually agreed upon by the Successful Bidder and the City against the payment of the purchase price therefor including accrued interest calculated on a 360 -day year basis, less the amount of the good faith check, in immediately available Federal Reserve funds without cost to the City. Closing Documents The City will furnish to the Successful Bidder upon delivery of the Series 1994A Bonds the following closing documents in a form satisfactory to Bond Counsel: (1) signature and no- litigation certificate; (2) federal tax certificate; (3) certificate regarding information in the Official Statement; and (4) seller's receipt as to 'Preliminary, subject to change payment. A copy of the transcript of the proceedings authorizing the Series 1994A Bonds will be. delivered to the Successful Bidder of the Series 1994A Bonds upon request. Copies of the form of such closing papers and certificates may be obtained from the City. Information Statement Section 218.38(1)(b)], Florida Statutes requires that the City file, within 120 days after delivery of the Series 1994A Bonds, an information statement with the Division of Bond Finance of the State of Florida (the "Division ") containing the following information: (a) the name and address of the managing underwriter, if any, connected with the Series 1994A Bonds; (b) the name and address of any attorney or fmancial consultant who advised the City with respect to the Series 1994A Bonds; and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant and (d) any other fee paid by the City with respect to the Series 1994A Bonds, including any fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver to the City at or prior to the time of delivery of the Series 1994A Bonds, a statement signed by an authorized officer containing the same information mentioned in (a) and (c) above. The Successful Bidder shall also be required, at or prior to the delivery of the Series 1994A Bonds, to furnish the City with such information concerning the initial prices at which a substantial amount of the Series 1994A Bonds of each maturity were sold to the public as the City shall reasonably request. Pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, a truth -in- banding statement will be required from the Successful Bidder at closing substantially in the following form: "The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94, The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of '% per annum, total interest paid over the life of the Series 1994A Bonds will be $ . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds." Legal Opinion The ,Successful Bidder will be furnished, without cost, with the approving opinion of Bryant, Miller and Olive, PA., Tallahassee, Florida, to the effect that based on existing law, and assuming compliance by the City with certain covenants and requirements of the Internal Revenue Code of 1986, as amended (the "Code "), regarding use, expenditures, investment of proceeds and the timely payment of certain investment earnings to the United States Treasury, the interest on the Series 1994A Bonds is not includable in the gross income of individuals, however, interest on the Series 1994A Bonds will be included in the calculation of the alternative minimum tax and environmental tax liabilities of corporations. 'The Lode contains other provisions that could *Preliminary, subject in change. result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series 1994A Bonds or the inclusion in certain computations (including, without limitation, those related to the corporate alternative minimum tax and environmental tax) of interest that is excluded from gross income. Official Statement The Preliminary Official Statement, copies of which may be obtained as described below, is in a form "deemed final" by the City for purposes of SEC Rule 15c2- 12(b)(1) (except for certain permitted omissions as described in such rule) but is subject to revision, amendment and completion in a final Official Statement. Upon the sale of the Series 1994A Bonds, the City will publish a final Official Statement in substantially the same form as the Preliminary Official Statement. Copies of the final Official Statement will be provided, at the City's expense, on a timely basis in such quantities as may be necessary for the Successful Bidder's regulatory compliance. CUSIP Plumber It is anticipated that CUSIP identification numbers will be printed on the Series 1994A Bonds, but neither the failure to print such number on any Series LQ94A Bonds nor any error with respect thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and pay for the Series 1994A Bonds in accordance with its agreement to purchase the Series 1994A Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 1994A Bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said number shall be the responsibility of and shall be paid for by the Successful Bidder. Conies of Documents Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form and further information which may be desired, may be obtained from the City s Financial Advisor, Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida 33716, telephone (813) 573 -8282. Amendment and Notices Service. Amendments hereto and notices, if any, pertaining to this offering shall be made by the Munifacts News CITY OF CLEARWATER, FLORIDA Rita J. Garvey Mayor - Commissioner t4 r OFFICIAL NOTICE OF BOND SALE $8,110,000* CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Sealed proposals will be received by the City of Clearwater, Florida (the "City") at the offices of the Finance Director of the City, 112 South Osceola Avenue, Clearwater, Florida 34616 by 12:00 Noon (Eastern Daylight Savings Time) on September 12, 1994 for the purchase of the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds"). Each proposal, together with the good faith deposit described below, should be enclosed in a sealed envelope marked "Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A-, Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994, or such similar legend which appropriately identifies the contents thereof. Form of Series 1994A Bonds The Series 1994A Bonds will be issued in fully registered form, without coupons, and in denominations of $5,000 or any integral multiples thereof. Principal of and any redemption premium on the Series 1994A Bonds shall be paid to the registered owners at the principal corporate trust office of First Union National Bank of Florida, Jacksonville, Florida (the "Paying Agent" and "Registrar "), upon presentment and surrender of the Series 1994A Bonds. Interest on the Series 1994A Bonds shall be paid to the registered owners as shown on the registration books maintained by the Registrar, by check or draft mailed to each such owner's address as shown on the registration books maintained by the Registrar as of the fifteenth (15th) day of the calendar month preceding such interest payment (late. Interest will be payable each March 1 and September 1, commencing March 1., 1995. Interest will be calculated on the basis of a 360 -day year of twelve 30 -day months. Maturity Schedule The Series 1994A Bonds will mature on September 1 of the following years in the following principal amounts: Redemption Provisions The Series 1994A Bonds are subject to redemption at the option of the City prior to maturity on or after September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal amount of the Series 1994A Bonds to he redeemed, as set forth below, together with accrued interest to the date fixed for redemption. *Preliminary, subject to cllange. 1 , Principal Principal Maturity Amount* Maturity Amount 2014 $540,000 2020 $ 770,000 2015 570,000 2021 815,000 2016 605,000 2022 865,000 2017 645,000 2023 920,000 2018 680,000 2024 975,000 2019 725,000 Redemption Provisions The Series 1994A Bonds are subject to redemption at the option of the City prior to maturity on or after September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal amount of the Series 1994A Bonds to he redeemed, as set forth below, together with accrued interest to the date fixed for redemption. *Preliminary, subject to cllange. 1 , Redemption Period Redemption Price September .l, 2002 through August 31, 2003 102% September 1, 2003 through August 31, 2004 101 September 1, 2004 and thereafter 100 Adiustment of Principal Amount After final computation of the bids, to achieve desired debt service levels, the City reserves the right either to increase or decrease any Principal Amount of the Series 1994A Bonds (or any Amortization Installment in the case of a Term Bond) shown on the schedule of Principal Amounts set forth above (the "Maturity Schedule"), by an amount not to exceed five percent (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, no rebidding or recalculation of the bid submitted will be required or permitted. If necessary, the total purchase price of the Series 1994A Bonds will be increased or decreased in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 1994A Bonds specified herein; and the Series 1994A Bonds of each maturity, as adjusted, will bear interest at the same rate and must have the same initial reoffering yields as specified in the bid of the successful bidder. However, the award will be made to the bidder whose bid produces the lowest true interest cost, calculated as specified below, solely on the basis of the Series 1994A Bonds offered pursuant to the Bid Maturity Schedule, without taking into account any adjustment in the amount of Series 1994A Bonds set forth in the Bid Maturity Schedule. Designation of Term Bonds Bidders may specify that the annual Principal Amounts of the Series 1994A Bonds coming due in any two or more consecutive years may be combined to form one or more maturities of Term Bonds scheduled to mature in the last of such years with the preceding annual Principal Amounts for such years constituting mandatory Amortization Installments to be selected by lot and redeemed at a price of par plus accrued interest in accordance with the Resolution. Basis of Award Proposals must be unconditional and only for all the Series 1994A Bonds. The purchase price bid for the Series 1994A Bonds may include a discount (including underwriters' discount and original issue discount, but excluding any municipal bond insurance premium) not to exceed two percent (2 %) of the principal amount of the Series 1994A Bonds and shall specify how much of the discount is original issue discount. No more than one (1) Proposal from any bidder will be considered. The City reserves the right to determine the Successful Bidder (as defined below), to reject any or all bids and to waive any irregularity or informality in any bid. The Series 1994A Bonds will he awarded to the bidder (herein referred to as the "Successful Bidder ") offering such interest rate or rates and purchase price which will produce the lowest true interest cost to the City over the life of the Series 1994A Bonds. True interest cost for the Series 1994A Bonds (expressed as an annual interest rate) will be that annual interest rate being twice that factor of discount rate, compounded semiannually, which when applied against each semiannual debt service payment (interest, or principal and interest, as due) for the Series 1994A Bonds will cquate the sum of such discounted semiannual payments to the bid Price (inclusive of accrued interest). Such semiannual debt service payments begin on March 1, 1995, The true interest cost shall be calculated from the closing date of the Serics 1994A Bonds (September 28,1994) and shall be based upon the principal aniounls of each serial maturity set forth in this Notice of Bond Sale and the bid price set forth in each Proposal for the Series 1994A Bonds submitted in accordance with the Notice of Bond Sale. In cage u1' a tie, the city may select the Successful Bidder by lot. It is requested that each Proposal for 4 the Series 1994A Bonds be accompanied by a computation of such true interest cost to the City under the term of the Proposal for Bonds, but such computation is not to be considered as part of the Proposal for Bonds. Interest Rates Permitted The Series 1994A Bonds shall bear interest expressed in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent. No interest rate specified for any maturity may be lower than any interest rate specified for an earlier maturity. There shall not be a difference greater than fifty basis points (50 b.p.) between the lowest coupon and highest coupon. 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. It shall not be necessary that all Series 1994A Bonds bear the same rate of interest, provided that all Series 1994A Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based upon the use of split or supplemental interest payments or a zero rate of interest will not be considered. Paying Agent and Registrar The Paying Agent and Registrar for the Series 1994A Bonds is First Union National Bank of Florida, Jacksonville, Florida. Security Principal of and interest on the Series 1994A Bonds to be issued pursuant to Ordinance No, 5118 -91, as amended and supplemented by Ordinance No. 5564 -94 and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of the City's Gas System, together with the earnings thereon derived from the investment thereof in the Funds and Accounts established in the Resolution and as more fully described in the Preliminary Official Statement. The lien of the Series 1994A Bonds upon the Net Revenues is on a parity with the City's outstanding $7,680,000 Gas System Revenue Bonds, Series 1991. The Series 1994A Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Series 1994A Bonds or the making of any debt service fund, reserve or other payments provided for in the Resolution. Purpose Pursuant to the Ordinance, the Series 1994A Bonds are being issued to finance additions, extensions, supplements or replacements to the City's Gas System, to make a deposit to the Reserve Fund for the Series 1994A Bonds, and to pay the cost of issuance of the Series 1994A Bonds. Issuance of Series 1994A Bonds The Series 1994A Bonds will be issued and sold by the City of Clearwater, Florida, a municipal corporation organized and existing under the laws of the State of Florida. The Series 1994A Bonds are being issued pursuant to Ordinance No. 51.18-91 enacted August 15, 1991., and Ordinance No. 5564 -94, enacted August 4, 1994 (collectively, the "Bond Ordinance ") by the City of Clearwater, Florida (the "City") and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law. l x e~ ? I Municipal Bond Insurance Policy A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest on the Series 1994A Bonds has been obtained from Municipal Bond Investors Assurance Corporation. Bidders, at their option, may elect to utilize this bond insurance commitment in their bid. Alternatively, bidders may rely upon published ratings on the Series 1994A Bonds received from Moody's Investors Service and Standard & Poor's of "A" and "BBB", respectively. If bond insurance is used, the price bid for purchase of the Series 1994A Bonds, as set forth on the Official Bid Form, will be reduced by the amount of the bond insurance policy premium, for the purpose of calculating the true interest cost rate of the bid. Information regarding the bond insurance commitment including the amount of the premium, may be obtained from David Thornton of Raymond James & Associates, Inc., Financial Advisor to the Issuer (813) 573 -8282. Proposals Proposals are desired on forms which will be furnished by the City, and envelopes, containing Proposals should have endorsed thereon "Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994 ", or words of equivalent import, and should be addressed to the City at the above address. Each proposal must be accompanied by the sum of $81,100 in the form of either (i) a Cashier's or Certified Check drawn upon an incorporated bank or trust company, payable to the City of Clearwater, Florida, as evidence of good faith, or (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 Capital Guaranty Insurance Company has been so approved) and submitted to the City prior to the opening of the bids, identifying each bidder whose deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the part of the bidder. If a check is delivered the check of the successful bidder may be cashed by the City and the proceeds will be held as security for performance of the bid. If a Financial Surety Bond is provided by the successful bidder the good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m. on the neat business day. If the Successful Bidder shall fail to comply promptly with the terms of its Proposal, the amount of such check will be forfeited to said payee as liquidated damages. The checks of unsuccessful bidders will be returned to such bidders by registered mail at the addresses stated in their Proposals, or delivered to a representative of such bidder immediately after the award of the Series 1994A Bonds to the Successful Bidder. The proceeds of the good faith check of the Successful Bidder will be applied to the payment of the purchase price of the Series 1994A Bonds. Prior to the delivery of the Series 1994A Bonds, the City may cash and invest the proceeds from the good faith check. No interest will be paid to any bidder upon any good faith check. Delivery and Payment It is anticipated that the Series 1994A Bonds in fully registered form will be available for delivery on September 28, 1994 in New York, New York at The Depository Trust Company, or some other date and place to be mutually agreed upon by the Successful Bidder and the City against the payment of the purchase price therefor including accrued interest calculated on a 360 -day year basis, less the amount of the good faith check, in immediately available Federal Iteservc funds without cost to the City. Closing Documents The City will furnish to the Successful Bidder upon delivery of the Series 1994A Bonds the following closing documents in a form satisfactory to Bond Counsel: (t) signature and no- lidgation certificate, (2) federal tax certificate; (3) certificate regarding information in the Official Statement; and (4) seller's receipt as to *Preliminary, subject to change. a , payment. A copy of the transcript of the proceedings authorizing the Series 1994A Bonds will be delivered to the Successful Bidder of the Series 1994A Bonds upon request. Copies of the form of such closing papers and certificates may be obtained from the City. Information Statement Section 218.38(1)(b)1, Florida Statutes requires that the City file, within 120 days after delivery of the Series 1994A Bonds, an information statement with the Division of Bond Finance of the State of Florida (the "Division ") containing the following information: (a) the name and address of the managing underwriter, if any, connected with the Series 1994A Bonds; (b) the name and address of any attorney or financial consultant who advised the City with respect to the Series 1994A Bonds; and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant and (d) any other fee paid by the City with respect to the Series 1994A Bonds, including any fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver to the City at or prior to the time of delivery of the Series 1994A Bonds, a statement signed by an authorized officer containing the same information mentioned in (a) and (c) above. The Successful Bidder shall also be required, at or prior to the delivery of the Series 1994A Bonds, to furnish the City with such information concerning the initial prices at which a substantial amount of the Series 1994A Bonds of each maturity were sold to the public as the City shall reasonably request. Pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, a truth -in- bonding statement will be required from the Successful. Bidder at closing substantially in the following form: "The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve fund, and (in) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of _% per annum, total interest paid over the life of the Series 1994A Bonds will be $ . The source of repayment or security for this proposal is the City "s Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds." Legal Opinion The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant, Miller and Olive, P.A., Tallahassee, Florida, to the effect that based on existing late, and assuming compliance by the City with certain covenants and requirements of the Internal Revenue Code of 1986, as amended (the "Code"), regarding use, expenditures, investment of proceeds and the timely payment of certain investment earnings to the United States Treasury, the interest on the Series 1994A Bonds is not includable in the gross income of individuals, however, interest on the Series 1994A Bonds will be included in the calculation of the alternative minimum tax and environmental tax liabilities of corporations. The Code contains other provisions that could 'Preliminary, subject to change. result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series 1994A Bonds or the inclusion in certain computations (including, without limitation, those related to the corporate alternative minimum tae 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 "deemed final by the City for purposes of SEC Rule 15c2- 12(b)(1) (except for certain permitted omissions as described in such rule) but is subject to revision, amendment and completion in a final Official Statement. Upon the sale of the Series 1994A Bonds, the City will publish a final Official Statement in substantially the same form as the Preliminary Official Statement. Copies of the final Official Statement will be provided, at the City's expense, on a timely basis in such quantities as may be necessary for the Successful Bidder's regulatory compliance. CUSIP Number It is anticipated that CUSIP identification numbers will be printed on the Series 1994A Bonds, but neither the failure to print such number on any Series 1W4A Bonds nor any error with respect thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and pay for the Series 1994A Bonds in accordance with its agreement to purchase the Series 1994A Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 1994A Bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said number shall be the responsibility of and shall be paid for by the Successful Bidder, Copies of Documents Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Form and further information which may be desired, may be obtained from the City's Financial Advisor, Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida 33716, telephone (813) 573 -8282. Amendment and Notices Amendments hereto and notices, if any, pertaining to this offering shall be made by the Munifacts News Service. CITY OF CLEARWATER, FLORIDA /s/ Rita 3 Garvey Mayor- Commissioner PROPOSAL FOR $8,110,000; CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 Ladies and Gentlemen: For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of 58,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of this Proposal, we will pay you in immediately available federal reserve funds ($ (not less than $7,947,800), plus ac ed interest to the date of delivery of the Series 1994A onds. ,va IiTACROVQ V-0-M We do or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be insured by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be, reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturity Amount* Rate or Yield Maturi Amount" Rate or Yield 2014 540,000 �Qn 2020 770,000 LSD 4 • - s 2015 570,000 f • / 2021 815,000 4-3z:L !fir 2016 605,000 2022 865,000 -f m L-a'- 2017 645,000 c . as fe ll 20'3 920+000 lo, 3 Llll� 2018 680,000 2024 975,000 '3 4-as- 2019 725,000 Term Bonds Ontion. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: $ Term Bonds maturing on September 1,1)/ at k,,47o per annum to yield % per annum. $� Term Bonds maturing on September 1, _-2,2Lqat L,2S% per annum to yield(_% per annum. $ Term Bonds maturing on September 1, at 1,,,fo per annum to yield e J %a per annum. $ Term Bonds maturing an September 1, at % per annum to yield ___w._% per annum. Term Bonds maturing on September 1, at _% per annum to yield �% per annum. Preliminary subject to change as stated in Official Notice of Sale. „1 We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, PA., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. CLJ►TftD1liBiAlSpGAt�.ldg � €� L > //%/��?154.CJ By: Address City State Zip Diane Raymond. A.V 312.559.1683 Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount Less Original Issue Discount Less Underwriter's Underwriter's Discount $ Amount Bid Before Accrued Interest $ g= Less Bond Insurance Premium (if applicable) Bid Accrued Interest True Interest Interest Cost Rate (To September 28, 1994 and Inclusive of Insurance Premium costs, if any) 2 r PROPOSAL FOR $8,110,000* CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 Ladies and Gentlemen: For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of 38,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of this Proposal, we will pay you �p immediately available federal eserve funds G�(.t�v'Ti��Q,tuu —Zf ------- Dollars ($ 0 16 70 ) (not less than $7,947,800)1 p'ius ccrued interest to the date of delivery of the Series 1994A Bonds. ,wrti( �7'e\t�{338:Q B 39"A4�6! B7E}i°t:4S�r We do X or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be insured by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shall Bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield Maturity Amount` Rate or Yield 2014 540,000 4 • of D 2020 770,000 L, 2015 570,000 A. ay 2021 815,000 30 %. 3S` 2016 605,000 / =� 2022 865,000 V) 2017 645,000 // , a S G •'�'� 2023 920,000 �1 2018 680,000 & 2024 975,000 / 3y (. au 2019 725,000 L-1 215' t Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be i indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: $ .II). obj), Term Bonds maturing on September l,ad , at °% per annum to yield % per annum. � � J Term Bonds maturing on September 1, 2&Q at %per annum to yield�'/o per annum. &t6 Term Bonds maturing on September 1, at j o per annum to yield% per annum. S Tenn Bonds maturing on September 1, at % per annum to yield % per annum. $_ Term Bonds maturing on September 1, at "_ % per annum to yield _% per annum. * Preliminary subject to change as stated in Official Notice of Sale. �t r sa #6s We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, P.A., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. an>aa Leo By: �o L Address. Diane Raymond, AM c'312.559- 1683ate Zip Telephone Number The following is our computation made in accordance with the official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount Less Original Issue Discount $ Less Underwriter's Discount $ Amount Bid Before Accrued Interest $ Less Bond Insurance Premium (if applicable) Bid Accrued Interest S True Interest Cost Rate (To September 28, 1994 and Inclusive of Insurance Premium costs, if any) PROPOSAL FOR $8,110,000* CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 33616 Ladies and Gentlemen: t Ji116F �. {jot 1� E C0 . For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of thip. Proposal, we _ Il pa}y you in immediately available federal reserve / funds 1 � �(/ti -a -( i+� IA.< �� TC 92 -4wt4 gk g 5,k a. ,.1 7Won Dollars ($ %� `�$��JZ q2. i d ) (not less than $7,947,800), plus accrued interest to the date of delivery of the We do V or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be insured by Municipal Bond Investors Assurance Corporation (M01A) if insurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield Maturi Amount* Rate or Yield 2014 540,000 .60 2020 770,000 2015 570,000 04 2021 815,000 2016 605,000 .06 (,_ 2022 865,000 2017 645,000 • 9.16 2023 920,000 2018 680,000(10 2024 975,000 2019 725,000. 4 (t} Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: p/ r Term Bonds maturing on September 1,.260 at ,)O% per annum to yield6, 2% per annum. $ Term Bonds maturing on September 1, at ^% per annum to yield �% per annum. $ Term Bonds maturing on September 1, at _% per annum to yield _ % per annum. $ Term Bonds maturing on September 1, at _% per annum to yield °Jo per annum. $ Term Bonds maturing on September 1, at _01b per annum to yields% per annum. * Preliminary subject to change as stated in Official Notice of Sale. r-> We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, PA., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of 'Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged: The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose .of this Proposal are fisted either below or on a separate sheet attached hereto. By, WILLIAM R. HOUGH & CO. t7/71Lco4. -/ _ 0, 4,,•a , 0j-1 Address City State Zip J?)-7- ef sr- Aa3 Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount $ Less Original Issue Discount Less Underwriter's Discount $ J T •sot Amount Bid Before Accrued Interest r� S- y a O Less Bond Insurance Premium (if applicable) $ -a.0v6 _ Bid $ 3 2�32.d . 5 Accrued interest $d True interest Cost Rate (To September 28, 1994 and Inclusive of Insurance Premium costs, if any) 2c� Zq % l The following truth -in- bonding statement is required to be completed in compliance with Section 218385, Florida Statutes: The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate oq.2? % per annum, total interest paid over the life of the Series 1994A Bonds will be $ /Z �2 3Ob . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ /' D 9m not being available to finance the other gas system expenses of the City. This truth -in- ooadidg statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds. (No addition or alteration is to be made to this Official Bid Form, and it must be submitted with the Official Notice of Bond Sale.) *Preliminary, subject to change, OFFICIAL NOTICE OF BOND SALE $8,11t1,000' CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Sealed proposals will be received by the City of Clearwater, Florida (the "City") at the offices of the Finance Director of the City, 112 South Osceola Avenue, Clearwater, Florida 34616 by 12:00 Noon (Eastern Daylight Savings Time) on September 12, 1994 for the purchase of the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "). Each proposal, together with the good faith deposit described below, should be enclosed in a sealed envelope marked "Proposal for $8,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994, or such similar legend which appropriately identifies the contents thereof.. Form of Series 1994A Bonds The Series 1994A Bonds will be issued in fully registered form, without coupons, and in denominations of $5,000 or any integral multiples thereof. Principal of and any redemption premium on the Series 1994A Bonds shall be paid to the registered owners at the principal corporate trust office of First Union National Bank of Florida, Jacksonville, Florida (the "Paying Agent" and "Registrar "), upon presentment and surrender of the Series 1994A Bonds. Interest on the Series 1994A Bonds shall be paid to the registered owners as shown on the registration books maintained by the Registrar, by check or draft mailed to each such owner's address as shown on the registration books maintained by the Registrar as of the fifteenth (15th) day of the calendar month preceding such interest payment (late. Interest will be payable each March 1 and September 1, commencing March 1, 1995. Interest will be calculated on the basis of a 360 -day year of twelve 30 -day months. Maturity Schedule The Series 1994A Bonds will mature on September 1 of the following years in the following principal amounts: .Redemption Provisions The Series .1994A Bonds are subject to redemption at the option of the City prior to maturity on or after September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal amount of the Series 1994A Bonds to be redeemed, as set forth below, together with accrued interest to the (late fixed for redemption. *Preliminary, subject to change. Principal Principal Maturit Amount* Maturity Amount 2014 $540,000 2020 $ 770,000 2015 570,000 2021 815,000 2016 605,000 2022 865,000 2017 645,000 2023 920,000 2018 680,000 2024 975,000 2019 725,000 .Redemption Provisions The Series .1994A Bonds are subject to redemption at the option of the City prior to maturity on or after September 1, 2002, in whole at any time, or in part from time to time on any interest payment date, in such manner as shall be determined by the City at the redemption prices expressed as a percentage of the principal amount of the Series 1994A Bonds to be redeemed, as set forth below, together with accrued interest to the (late fixed for redemption. *Preliminary, subject to change. Redemption Period Redemption Price September 1, 2002 through August 31, 2003 102% September 1, 2003 through August 31, 2004 1.01 September 1, 2004 and thereafter 100 Adiustment of Principal Amount After final computation of the bids, to achieve desired debt service levels, the City reserves the right either to increase or decrease any Principal Amount of the Series 1994A Bonds (or any Amortization Installment in the case of a Term Bond) shown on the schedule of Principal Amounts set forth above (the "Maturity Schedule "), by an amount not to exceed five percent (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, no rebidding or recalculation of the bid submitted will be required or permitted. if necessary, the total purchase price of the Series 1994A Bonds will be increased or decreased in direct proportion to the ratio that the adjustment bears to the aggregate principal amount of the Series 1994A Bonds specified herein; and the Series 1994A Bonds of each maturity, as adjusted, will bear interest at the same rate and must have the same initial reoffering yields as specified in the bid of the successful bidder. However, the award will be made to the bidder whose bid produces the lowest true interest cost, calculated as specified below, solely on the basis of the Series 1994A Bonds offered pursuant to the Bid Maturity Schedule, without taking into account any adjustment in the amount of Series 1994A Bonds set forth in the Bid Maturity Schedule. Designation of Term Bonds Bidders may specify that the annual Principal Amounts of the Series 1994A Bonds coming due in any two or more consecutive years may be combined to form one or more maturities of Term Bonds scheduled to mature in the last of such years with the preceding annual Principal Amounts for such years constituting mandatory Amortization installments to be selected by lot and redeemed at a price of par plus accrued interest in accordance with the Resolution. Basis of Award Proposals must be unconditional and only for all the Series 1994A Bonds. The purchase price bid for the Series 1994A Bonds may include a discount (including underwriters' discount and original issue discount, but excluding any municipal bond insurance premium) not to exceed two percent (2 %) of the principal amount of the Series 1994A Bonds and shall specify how much of the discount is original issue discount. No more than one (1) Proposal from any bidder will be considered. The City reserves the right to determine the Successful Bidder (as defined below), to reject any or all bids and to waive any irregularity or informality in any bid. The Series 1994A Bonds will be awarded to the bidder (herein referred to as the "Successful Bidder ") offering such interest rate or rates and purchase price which will produce the lowest true interest cost to the City over the life of the Series 1994A Bonds. True interest cost for the Series 1994A Bonds (expressed as an annual interest rate) will be that annual interest rate being twice that factor of discount rate, compounded semiannually, which when applied against each semiannual debt service payment (interest, or principal and interest, as due) for the Scrics 1994A Bonds will cquate the sum of such discounted semiannual payments to the bid prier, (inclusive of accrued interest). Such semiannual debt service payments begin on March 1, 1995. The true interest cost shall be calculated from the closing (late of the Series 1.994A .Bonds (September 28, 1994) and shall be based upon the principal amounts of each serial maturity set forth in this Notice of Bond Sale and the bid price set forth in each Proposal for the Series 1994A Bonds submitted in accordance with the Notice of Bond Sale. In case of a lie, the City may select the Successful Bidder by lot. it is requested that each Proposal for the Series 1994A Bonds be accompanied by a computation of such true interest cost to the City under the term of the Proposal for Bonds, but such computation is not to be considered as part of the Proposal for Bonds. Interest Rates Permitted The Series 1994A Bonds shall bear interest expressed in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent. No interest rate specified for any maturity may be lower than any interest rate specified for an earlier maturity. There shalt not be a difference greater than fifty basis points (50 b.p.) between the lowest coupon and highest coupon. Should an interest rate be 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. It shalt not be necessary [hat all Series 1994A Bonds bear the same rate of interest, provided that all Series 1994A Bonds maturing on the same date shall bear the same rate of interest. A rate of interest based upon the use of split or supplemental interest payments or a zero rate of interest will not be considered. Paying Agent and Registrar The Paying Agent and Registrar for the Series 1994A Bonds is First Union National Bank of Florida, Jacksonville, Florida. Security Principal of and interest on the Series 1994A Bonds to be issued pursuant to Ordinance No. 5118 -91, as amended and supplemented by Ordinance No. 5564 -94 and all required sinking fund, reserve and other payments shall be payable solely from the Net Revenues of the City's Gas. System, together with the earnings thereon derived from the investment thereof in the Funds and Accounts established in the Resolution and as more fully described in the Preliminary Official Statement. The lien of the Series 1994A Bonds upon the Net Revenues is on a parity with the City's outstanding $7,680,000 Gas System Revenue Bonds, Series 1991. The Series 1994A Bonds do not constitute a general indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no Bondholder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Series 1994A Bonds or the making of any debt service fund, reserve or other payments provided for in the Resolution. Purpose Pursuant to the Ordinance, the Series 1994A Bonds are being issued to finance additions, extensions, supplements or replacements to the City's Gas System, to make a deposit to the Reserve Fund for the Series 1994A Bonds, and to pay the cost of issuance of the Series 1994A Bonds. Issuance or Series 1994A Bonds The Series 1.994A Bonds will be issued and sold by the City of Clearwater, Florida, a municipal corporation organized and existing under the laws of the State of Florida. The Series 1994A Bonds arc being issued pursuant to Ordinance No. 5118 -91 enacted August 15, 1991, and Ordinance No. 5564 -94, enacted August 4, 1994 (collectively, the "Bond Ordinance ") by the City of Clearwater, Florida (the "City") and pursuant to the provisions of Chapter 166, Florida Statutes, and other applicable provisions of law. Municipal Bond Insurance Poll A commitment to issue a municipal bond insurance policy guaranteeing payment of principal and interest on the Series 1994A Bonds has been obtained from Municipal Bond. Investors Assurance Corporation. Bidders, at their option, may elect to utilize this bond insurance commitment in their bid. Alternatively, bidders may rely upon published ratings on the Series 1994A Bonds received from Moody's Investors Service and Standard & Poor's of "A" and "BBB ", respectively. If bond insurance is used, the price bid for purchase of the Series 1994A Bonds, as set forth on the Official Bid Form, will be reduced by the amount of the bond insurance policy premium, for the purpose of calculating the true interest cost rate of the bid. Information regarding the bond insurance commitment including the amount of the premium, may be obtained from David Thornton of Raymond James & Associates, Inc., Financial Advisor to the Issuer (813) 573 -8282. Proposals Proposals are desired on forms which will be furnished by the City, and envelopes, containing Proposals should have endorsed thereon 'Proposal for $$,110,000* City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A; Do Not Open Until 12:00 Noon (Eastern Daylight Savings Time), September 12, 1994 ", or words of equivalent import, and should be addressed to the City at the above address. Each proposal must be accompanied by the sum of $81,100 in the form of either (i) a Cashier's or Certified Check drawn upon an incorporated bank or trust company, payable to the City of Clearwater, Florida, as evidence of good faith, or (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 Capital Guaranty Insurance Company has been so approved) and submitted to the City prior to the opening of the bids, identifying each bidder whose deposit is guaranteed by the Financial Surety Bond, which shall evidence good faith on the part of the bidder. If a check is delivered the check of the successful bidder may be cashed by the City and the proceeds will be held as security for performance of the bid. If a Financial Surety Bond is provided by the successful bidder the good faith deposit shall be delivered by wire transfer to the City by 3:00 p.m. on the next business day. If the Successful Bidder shall fail to comply promptly with the terms of its Proposal, the amount of such check will be forfeited to said payee as liquidated damages. The checks of unsuccessful bidders will be returned to such bidders by registered mail at the addresses stated in their Proposals, or delivered to a representative of such bidder immediately after the award of the Series 1994A Bonds to the Successful Bidder. The proceeds of the good faith check of the Successful Bidder will be applied to the payment of the purchase price of the Series 1994A Bonds. Prior to the delivery of the Series 1994A Bonds, the City may cash and invest the proceeds from the good faith check. No interest will be paid to any bidder upon any good faith check. Delivery and Payment It is anticipated that the Series 1994A Bonds'in fully registered form will be available for delivery on September 28, 1994 in New York, New York at The Depository Trust Company, or some other date and place to be mutually agreed upon by lh, 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 Successful Bidder upon delivery of the Series 1994A Bonds the following closing documents in a form satisfactory to Bond Counsel: (1) signature and no- litigation certificate; (2) federal tax certificate; (3) certificate regarding information in the official Statement, and (4) seller's receipt as to *Preliminary, sul jcct to change. payment. A copy of the transcript of the proceedings authorizing the Series 1994A Bonds will be delivered to the Successful Bidder of the Series 1994A Bonds upon request. Copies of the form of such closing papers and certificates may be obtained from the City. Information Statement Section 218.33(1)(b)1, Florida Statutes requires that the City file, within 120 days after delivery of the Series 1994A Bonds, an information statement with the Division of Bond Finance of the State of Florida (the "Division ") containing the following information: (a) the na...c and address of the managing underwriter, if any, connected with the Series 1994A Bonds; (b) the name and aauress of any attorney or financial consultant who advised the City with respect to the Series 1994A Bonds; and (c) any fee, bonus, or gratuity paid, in connection with the bond issue, by an underwriter or financial consultant to any person not regularly employed or engaged by such underwriter or consultant and (d) any other fee paid by the City with respect to the Series 1994A Bonds, including any fee paid to attorneys or financial consultants. The Successful Bidder will be required to deliver to the City at or prior to the time of delivery of the Series 1994A Bonds, a statement signed by an authorized officer containing the same information mentioned in (a) and (c) above. The Successful Bidder shall also be required, at or prior to the delivery of the Series 1994A Bonds, to furnish the City with such information concerning the initial prices at which a substantial amount of the Series 1994A Bonds of each maturity were sold to the public as the City shall reasonably request. Pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, a truth -in- bonding statement will be required from the Successful Bidder at closing substantially in the following form: "The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of _ %' per annum, total interest paid over the life of the Series 1994A Bonds will be $ . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218.385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds." Legal Opinion The Successful Bidder will be furnished, without cost, with the approving opinion of Bryant, Miller and Olive, P.A., Tallahassee, Florida, to the effect that based on existing law, and assuming compliance by the City with certain covenants and requirements of the Internal Revenue Code of 1986, as amended (the "Code'), regarding use, expenditures, investment of proceeds and the timely payment of certain investment earnings to the United States Treasury, the interest on the Series 1994A Bonds is not includable in the gross income of individuals, however, interest on the Series 1994A Bonds will be included in the calculation of the alternative minimum tax and environmental tax liabilities of corporations. The Code contains other provisions that could *Preliminary, subject to change, r r result in tax consequences, upon which Bond Counsel renders no opinion, as a result of ownership of the Series 1994A Bonds or the inclusion in certain computations (including, without limitation, those related to the corporate alternative minimum tax and environmental tax) of interest that is excluded from gross income. Official Statement The Preliminary Official Statement, copies of which may be obtained as described below, is in a form "deemed final" by the City for purposes of SEC Rule 15c2- 12(b)(1) (except for certain permitted omissions as described in such rule) but is subject to revision, amendment and completion in a final Official Statement. Upon the sale of the Series 1994A Bonds, the City will publish a final Official Statement in substantially the same form as the Preliminary Official Statement. Copies of the final Official Statement will be provided, at the City's expense, on a timely basis in such quantities as may be necessary for the Successful Bidder's regulatory compliance. CUSIP Number It is anticipated that CUSIP identification numbers wilt be printed on the Series 1994A Bonds, but neither the failure to print such number on any Series 1994A Bonds nor any error with respect thereto shall constitute cause for failure or refusal by the Successful Bidder to accept delivery of and pay for the Series 1994A Bonds in accordance with. its agreement to purchase the Series 1994A Bonds. All expenses in relation to the printing of CUSIP numbers on the Series 1994A Bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said number shall be the responsibility of and shall be paid for by the Successful Bidder. Conies of Documents Copies of the Preliminary Official Statement, this Official Notice of Bond Sale and the Official Bid Norm and further information which may be desired, may be obtained from the City's Financial Advisor, Raymond James & Associates, lnc, 880 Carillon Parkway, St. Petersburg, Florida 33716, telephone (813) 573 -8282. Amendment and Notices Amendments hereto and notices, if any, pertaining to this offering shall be made by the Munifacts News Service. CITY OF CLEARWATER, FLORIDA Ls/ Rita J. Garvey Mayor- Commissioner IA 6 PROPOSAL FOR 38,110,000# CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 Ladies and Gentlemen: For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale,;phich is hereby made a part of this Proposal, we will pay you in immediately available federal reserve funds it'gmg lwu10"V, V/APF. t!- i4 fiF�6N Tl f So4rUD IGNT f IND/21� �v� "'%,ty Dollars ($ 7 p (not less than $7,947,800), plus accrued interest to the date of delivery of the We do z or do not wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds will be insured _ by Municipal Bond Investors Assurance Corporation (MBIA) if insurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields specified below. Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield Maturi Amount* Rate or Yield 2014 540,000 .80 In •/� 2020 770,000 2015 570,000 .00 6.l7 2021 815,000 2016 605,000 2022 865,000 2017 645,000 2023 920,000 2024 975,000 1 O 2018 680,000 .! 7�- 2019 725,000 L. t Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows D Term Bonds maturing on September 1, ?-0 / at�,!ti5% per annum to yielz1911 per annum. $1 43 � t) Term Bonds maturing on September 1, � t per annum to yield , yA, per annum. $ Term Bonds maturing on September 1, at _% per annum to yield% per annum. $ Term Bonds maturing on September 1, at_% per annum to yield _____% per annum. Term Bonds maturing on September 1, at � o per annum to yield _ %u per annum. Preliminary subject to change as stated in Official Notice of Sale, We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, PA., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $81,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated'for the purpose of this Proposal are, listed either below or on a separate sheet att4ched hereto. By:�� Merrill Lynch and Gn. - Address 26301 U.S. Highway 19 North Clearwater, Florida 34621. City Telephone I<umber State Zip The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount $ I (� 00 O . 1;ess Original Issue Discount $ 13�/ psi- P's Less Underwriter's Discount $ . Amount Bid Before Accrued Interest - $�7 r f ®606� / Less Bond Insurance Premium (if applicable) S Bid Accrued Interest 4 $ True Interest Cost Rate (To September 28, 1994 J• and Inclusive of Insurance Premium costs, if any) 0 j��' The following truth -in- bonding statement is required to be completed in compliance with Section 218.385, Florida Statutes: The City of Clearwater, Florida is proposing to issue $8,110,000' original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City s Gas System, (u) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate ofC49%a per annum, total interest paid over the life of the Series 1994A Bonds will be SIj;� f /3,Qs . The source of repayment or security for this proposal is the City's Pledged Funds, inclu / ding the Net Revenues of its Gas System and moneys and investments hel the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in $ 3.7'C not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds. (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.) i i 'Preliminary, subject to change. 3 09/08/04 08:5' __ $415 885 8000 CAPITAL GUARANTY X1001 /001 Capital Guaranty Insurance Compai Steuart Tower - 22nd Floor One Market Plaza San Francisco, CA 94105 Sure -Bid Phone 415/995 -SASS Sure -Bid Fax 415/995 -8090 SURE -BID FAX CONFIRMA TION - DELIVER IMMEDIA TEL Y 2 /Clifford steinhaue or Sarah MCDaniei Account *: 103 -09 --.XI Lyacf3 -�ompany FAX fe 813/796 -6818 26301 U.S. Highway 19 North Page 1 of 1 total pages Clearwater, FL 34621 Capital Guaranty Insurance Company hereby confirms to you that it will ieeue its Good Faith Deposit Financial Surety Bond and include your name as an authorized principal (all in accordance with that certain reimbursement agreement) for the following issues which you have requested: Sale Date Issue 09/12/94 The City of Clearwater, Florida Par Value: $8,110,000 12:00 noon ET $8,110,000 Gas system Revenue Bonds, Good faith: $81,100 94 -0946 Series 1994A Due: 2014 -2024 Premium: $45 It io Capital Guaranty's privilege to be of service. Please Call the Sure -Bid Program Director at 415/995 -SD66 immediately if this confirmation is in any way inaccurate. Thank you for using Sure -aid. Capital Guaranty Insurance Company Date of Confirmation: 09/08/94 By: PROPOSAL FOR $3411,400* CITY OF CLURWATER, FLOPIDA GAS SYSTEM ROVENUE BONDS, SERMS 1894A Commission Chambers city Han 112 South Osceola Avenue Gleamwer; Florida 34616 Ladies and Goademea: For the City of Clearv:ater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series LIMA Bands"), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,400, described in the Official Notice of Bond Sale, which is hereby made a part of this Proposal, We ay you in iin adiateI avabble fedarak eserve funds p„( Dollars ($ (not less than S7, 7,1100); plus accused interest to a date of d6lft q of the Seri . 29940 Bonds. We do V or do not wish to have the Series 1W4A Bonds insured, We understand that the Series L994A Bonds will be insured by Municipal Bond Investors Assurance Corporation (bMIA) if irtsurance is designated. The Series 1994A Bonds shall bear interest at the rates and shall be reoffered at prices or yields specified below. Principal interest Price Principal laterest ,,,Prise amount° ate Qa Yleid Rate „meld 2014 544,000 � 202.0 770,0W 2013 570,000 .O / S 2021 515,E - 7016 60,000 SWIM 2017 645,000 2023 930,000 2018 6PA000 2024 975,W 2019 7zsoQO 7 xM Ba7 i ®oteon, The interest rate or reoffering price or yield for any Tem Bonus shall be indicated in the table above only in the year of final maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more 'Terse Bonds tuctuft in than was and amounts and bearing interest as fallow$: $1,110,000 _ - _ Term Bonds maturing on September per annum toyield� ") % per annum (e SS; ovo Term Bonds maturing oa September ItiLiL at6, r%per snnum to yieldG•2- per annum. 3` fS( 10Termaondtmaturing®aSaptewberI AV ar �' �pers=umtoyield�—%pw •. ; Term Bonds maturing; on September 1, „o,,,,_, at —% per annum toynald %pet sauum- ; Term Boadt maturing on September 1, at _% per annum to yield X% per annum. • preamint►ry subject to change as stated in Official Notice of Sale. w ►�,ic!' ��, f�eab�dy We will accept delivery of said Series IMA Bonds at New Yorbt, New York, on or about September ?S, 1994, unless another date or place shall be nmumally wed upost, it being understood that the City shall furnish to us, free of charge at the time of delivery of sxld Series 1994A Bonds, the opinion of Bryant, fvWer and Olive, i?A., Bond Counsel, Tallahassee, Florida, approving the vaM. ty thereof. In accordance with the Official Notice of Bond Sala, we enclose herewith either (i) a Cashier's or Certified Check for 581,100 payable to the order of the City of Clearwater, Florida► to be reined to the undersigned upon the award of said Series 1994A Bonds provided this )Proposal is not accepted, or (u) provided for a Futancial Surety Bond In aceordanec with the Official Plotice of Sale. 'The amount of the check of the winning bidder is to be retained and cashed by the City until the de livery .of said Series L994A Bonds and payment therefor, and to be applied to the payment of the Series 1994A Bonds or to be 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 is the, annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relaft to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if ray, who arc associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. Address City State ZIP � -- Telephone Number The following is our computation made in acctardance with the OfiicW Notice of Bond Sale of the.truc interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, whit ch is for informational purposes only and is subject to verification prior to award: Isar Amount i.esa Orignal Issue Discount Lm Underwriter's Dlicuunt Amount Bid Before Accrued Interest Liss Bond Insurance Premium (if appGcabin) Bld Aceraed Interest Trite Intemi Cast Rate (To September 28,1994 and Inclusive of InsurA.nce Premivat outs, if =y) 2 $ ' 6iV-,- U— VU0}DU 5 'f'0 S 1' q ?e �U ✓ � 9 The following tntth•ia•bonding statemcat is required to be completed in compliant with Section 21$385, Florida Stactues: The City of Clearwater, Florida is proposing to issue SS,12oxce arigiaml aggregate principal amount of ()as System Revenue Bonds, Series l994A for the purgae of (Q flualudag capital projects for the Ckys Gas System, (hj funding a reserve fund, and CQ payer the costs of jauizg the Series 1994A Bonds, all as farther described in ordinance No. 5584.94. The anal mane* date of the Series 1994A Bonds IS September 1, 204, and the Series A are expected to! be repaid over a period of thirty (30) yw& At a forera*d average interest rate of� annum, total interest paid over the life of the Sates 1994A Bonds will be S L The source of repayment or sewrity for this proposal is the City'a Pledged Funds, indu ' g the Net Revenues of its Gas System. and moseys and iavestm b� in the funds created under the said Ordinance. Authorizing the Series 1994A Brands will rasttlt in S V f0 not being available to finance the other gas system expenses of the Cary. This truth-in-bbndi4sW=cat prepared pursuant to Section 218385(2) and (3) of the Florida Statutes, as amended, is for informatiOnAl purposes only and shall not affect or control the actual terms and conditions *f the Series t994A Bands. (No addition or alteratioa is to be made to this Official Bid Form, and it mot be subalitted with the official Notice of Bond Sale.) - PreLimitAt . subjcet to change. PROPOSAL FOR $8,110,000' CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Commission Chambers City Hall 112 South Osceola Avenue Clearwater, Florida 34616 Ladies and Gentlemen: F61 �,�l��a� �vecu�tieS For the City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), dated September 1, 1994 and maturing on September 1, 2014 through September 1, 2024, in the principal amount of $8,110,000, described in the Official Notice of Bond Sale, which is hereby made a part of this Proposal, we will pay you in immediately available federal reserve funds 5 i�.P.v,�l.�t✓ N,I-e4"h,ovco 5il'L �5 k�� %ffoyJ w_ o �.c �� 0,4c 1-f co Dollars ($ g(v % eqo G. 00 ) (not less than $7,947,800), plus accrued interest to the date of delivery of the •Series:�,494A�Boac�s. ,.' 't ; � .:,. '�� ,: '• �� ` We do /or do not _ wish to have the Series 1994A Bonds insured. We understand that the Series 1994A Bonds Mg4be insured by, Municipal .Bdnd Investors Assurance Corporation (MBIA), if insurance is designated. �• . The Series 494A913onds shall bear,,intdte'st at the rates and shall be reoffered at prices or yields specified below. ` Principal Interest Price Principal Interest Price Maturi Amount* Rate or Yield Maturi Amount* Rate or Yield 2014 540,000 6.00 /00,60 2020 770,000 , 0 o i 9—a<) 2015 570,000 C.4,00 a o, o d 2021 815,000 C4 , /0 9, v 2016 605,000 1 013 joss, d o 2022 865,000 4/o �L , 5"_o 2017 645,000 �� , o d 17.i 2023 920,000 � / U SS. S_V L , 2018 680,000 a U 5 , So 2024 975,000 !a l u 5 7, ,1 ,o 2019 725,000 6, o 0 U—_ dS" Term Bonds Option. The interest rate or reoffering price or yield for any Term Bonds shall be indicated in the table above only in the year of final. maturity. The annual Principal Amounts so indicated shall be applied for the mandatory retirement of one or more Term Bonds maturing in the years and amounts and bearing interest as follows: $ // 1 stood Term Bonds maturing on September 1,02 0 that 6,OO % per annum to yields, ad% per annum. $_3 5-7 S' 0065 Term Bonds maturing on September 1,2L911 at w tth % per annum to yield (v o 14- per annum. S Term Bonds maturing on September 1, _ at _ %per annum to yield % per annum, $ Term Bonds maturing on September 1, __ _ at _17o per annum to yield _5o' per annum, $ _ . Term Bonds maturing on September 1, at _1 o per annum to yield _;$ per annum. • Preliminary subject to change as stated in Official Notice of Sale. d� ;z u We will accept delivery of said Series 1994A Bonds at New York, New York, on or about September 28, 1994, unless another date or place shall be mutually agreed upon, it being understood that the City shall furnish. to us, free of charge at the time of delivery of said Series 1994A Bonds, the opinion of Bryant, Miller and Olive, P.A., Bond Counsel, Tallahassee, Florida, approving the validity thereof. In accordance with the Official Notice of Bond Sale, we enclose herewith either (i) a Cashier's or Certified Check for $51,100 payable to the order of the City of Clearwater, Florida, to be returned to the undersigned upon the award of said Series 1994A Bonds provided this Proposal is not accepted, or (ii) provided for a Financial Surety Bond in accordance with the Official Notice of Sale. The amount of the check of the winning bidder is to be retained and cashed by the City until the delivery of said Series 1994A Bonds and payment therefor, and to be applied to the payment of the Series 1W4A Bonds or to be retained as and for liquidated damages in case of the failure of the undersigned to make payment as agreed. This proposal is not subject to any conditions not expressly stated herein or in the annexed Official Notice of Bond Sale. Receipt of the Preliminary Official Statement relating to these Series 1994A Bonds is hereby acknowledged. The names of the underwriters or members of the account or joint bidding accounts, if any, who are associated for the purpose of this Proposal are listed either below or on a separate sheet attached hereto. j By. d L�AI. • ° '� 0 Address ° t A ity State Zip C 33d•° � Telephone Number The following is our computation made in accordance with the Official Notice of Bond Sale of the true interest cost to the City of Clearwater, Florida, under terms of our Proposal for Series 1994A Bonds, which is for informational purposes only and is subject to verification prior to award: Par Amount S O 1 1 of L 00 , Oq Less Original Issue Discount $ 3�' v0 Less Underwriter's Discount $ jo9�`�S� `aa Amount Bid Before Accrued Interest Less Bond Insurance Premium (if applicable) $ 0 o c;, oG $ q goG� ozxo. 00 Bid Accrued Interest $ 34,' True Interest Cost Rate (To September 2S, 1994 ` % and Inclusive of Insurance Premium costs, if any) Y , The following truth -in- bonding statement is required to be completed in compliance with Section 218.385, Florida Statutes: The City of Clearwater, Florida is proposing to issue $8,110,000* original aggregate principal amount of Gas System Revenue Bonds, Series 1994A for the purpose of (i) financing capital projects for the City's Gas System, (ii) funding a reserve fund, and (iii) paying the costs of issuing the Series 1994A Bonds, all as further described in Ordinance No. 5564 -94. The final maturity date of the Series 1994A Bonds is September 1, 2024, and the Series 1994A Bonds are expected to be repaid over a period of thirty (30) years. At a forecasted average interest rate of6,1(1,c'9I-nI per annum, total interest paid over the life of the Series 1994A Bonds will be $1a, ssg,asr, oo . The source of repayment or security for this proposal is the City's Pledged Funds, including the Net Revenues of its Gas System and moneys and investments held in the funds created under the said Ordinance. Authorizing the Series 1994A Bonds will result in S j o, (, V q,.2S -S , cxs not being available to finance the other gas system expenses of the City. This truth -in- bonding statement prepared pursuant to Section 218385(2) and (3) of the Florida Statutes, as amended, is for informational purposes only and shall not affect or control the actual terms and conditions of the Series 1994A Bonds. (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.) *Preliminary, subject to change. rr � I � � ; � l t. P t i i d� p k E: N f. I' F 4 f 1' 2:9 o g � = o 'O v � N � E. ° U o�= � — N G C y m c 3 R � a � � V N N E 0 a $ c _ � O O m m m m > � a ° ° o v � E u==rn o to t� 3 =° � o c cs = 3 E = N r°a fDr vii m rn v `o c m ' o E 2 O t=i U v o°, c a, m � a C y m w W F ,G G h � c: O C T o 7@ .0 N C w C a C2 V p p r N N y M y a) ova aS m Ivl is PRELIXIINA.RY OFFICIAL S'TATF51ENT DATED AUGUST 2 "u, 1994 NEW ISSUE Ratings: (See "Ratings" herein) In the opinion of Bond Counsel under existing laws, regulations and judicial decisions interest art the Series I994A Bonds is excluded from gross income for purposes of federal income taxation and the $cries 1994A Bonds ore exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. See, however "Tux Exemption" heroin for a description of eertnin federal minimum and other special taxes that may affect the tax treatment of interest on the Series 1994A Bonds. CITY OF CLEARWATER,, FLORIDA, $8,110,000* Gas System Revenue Bonds Series 1994A Dated: September 1, 1994 Due: September 1, as shown below The City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds ") will be issued as fully registered bonds in principal denominations of $5,000 or any integral multiples thereof. Interest on the Series 1994A Bonds is payable semi - annually, commencing March 1, 1995, and each March 1 and September 1 thereafter by check or draft of First Union National Bank of Florida, Jacksonville, Florida, as Paying Agent and Bond Registrar, mailed to the Registered Owner thereof at the address shown on the registration books kept by the Bond Registrar on the 15th day of the month next preceding each interest payment date (the "Record Date "), provided, however, that at the written request of any Registered Owner of at least $1,000,000 aggregate principal amount of the Series 1994A Bonds, interest may be payable by wire transfer to the bank account on file with the Paying Agent on the applicable Record Date. Principal of the Series 1994A Bonds and redemption premium, if any, will be payable upon presentation and surrender of the Series 1994A Bonds at the designated corporate trust office of the Paying Agent. The Series 1994A Bonds are subject to optional and mandatory sinking fund redemption prior to their stated maturity under the terms and conditions described herein. The Series 1994A Bonds will be issued by the City of Clearwater, Florida (the "City') to (i) finance the costs of certain additions, extensions, supplements or replacements of the existing gas system owned and operated by the City (the "System ") within Pinellas County, Florida (the "1994A Project "); (ii) make a deposit to the Reserve Account in the Sinking Fund to satisfy the Reserve Requirement; and (iii) pay the costs of issuance of the Series 1994A Bonds. The Series 1994A Bonds are limited obligations of the City, payable solely from the Net Revenues derived from the operation of the System, as provided in Ordinance No. 5564 -94 of the City (the "Series 1994A Ordinance ") and in Ordinance No. 5118 -91 of the Issuer (the "Original Ordinance "), as amended and supplemented, on a parity with the City's Gas System Revenue Bonds, Series 1991, as herein described. The Series 1994A Bonds and the interest thereon shall not be and shall not constitute an indebtedness of the City or of the State of Florida or any political subdivision thereof within the meaning of any constitutional, statutory, charter provision or other limitation, and neither the full faith and credit nor the taxing powers of the State of Florida or the City are pledged as security for the payment of the principal of, redemption premium, the any, or interest on the Series 1994A Bonds and no holder or holders of any Series 1994A Bonds shall ever have the right to compel the exercise of the ad valorem taxing powers of the City, or taxation in any form of any real property therein to pay the Series 1994A Bonds or the interest thereon. The Series 1994A Bonds shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects, with the City's Gas System Revenue Bonds, Series 1991. Should the successful bidder for the Series 1994A Bond elect to insure the Series 1994A Bonds, payment of the principal of and interest on the Series 1994A Bonds will be guaranteed under a policy of municipal bond insurance to be issued simultaneously with the delivery of the Series 1994A Bonds by the Municipal Bond Investors Assurance Corporation. ror a discussion of the terms and provisions of such policy, including the limitations, see "MUNICIPAL BOND INSURANCE" herein. This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. MATURITIES, AMOUNTS, INTEREST RATES, PRICES, AND YIELD Sealed bids to the Seriea 1991:1 Bwol . mll N, rccvr vd at the ofilce of the Finance ihrect,r, 112 ;south Ugceala Avenue, Clearwau.r. Florida, until 12 noon P11parwatr r toff,,•+ 1,11 Su lit embrr 12. 1404 Please refer to the ttflfrml Notice of Sale dated August 25, 199.4 which outlineq tlu• I +rnr.:vid nor,irtonp•, inr the uta =liaat „n nt oihi i- to put dma a tlm SF ru• 1941A Bonds The Series 1994A Bonds will be offered when, as, and if issued and delivered to the Underwriters, subject to npproval of the Bryant Nliller and Olive, P.A., Tallahassee, Florida, Bond Counsel to the City, and certain other conditions. Certain legal matters will be paosea on for the City by its Interim City Attorney. Alan %unmet, Esquire It is expected that the Series 1994A Bonds in definitive form will be available for delivery in New Yerk. New York. nn or about September 28,1994. gated: September , 1994 *Preliminary, subject to change Principal Interest Maturity Amount Rate Price Yield 2014 $540,000 2015 570,000 2016 605,000 2017 645,000 2018 680,000 2019 . 725,000 2020 770,000 2021 815,000 2022 865,000 2023 920,000 2024 975,000 Sealed bids to the Seriea 1991:1 Bwol . mll N, rccvr vd at the ofilce of the Finance ihrect,r, 112 ;south Ugceala Avenue, Clearwau.r. Florida, until 12 noon P11parwatr r toff,,•+ 1,11 Su lit embrr 12. 1404 Please refer to the ttflfrml Notice of Sale dated August 25, 199.4 which outlineq tlu• I +rnr.:vid nor,irtonp•, inr the uta =liaat „n nt oihi i- to put dma a tlm SF ru• 1941A Bonds The Series 1994A Bonds will be offered when, as, and if issued and delivered to the Underwriters, subject to npproval of the Bryant Nliller and Olive, P.A., Tallahassee, Florida, Bond Counsel to the City, and certain other conditions. Certain legal matters will be paosea on for the City by its Interim City Attorney. Alan %unmet, Esquire It is expected that the Series 1994A Bonds in definitive form will be available for delivery in New Yerk. New York. nn or about September 28,1994. gated: September , 1994 *Preliminary, subject to change .z, CITY OF CLEARWATER, FLORIDA 112 South Osceola Avenue Clearwater, Florida 34616 CITY C014MISSION Rita J. Garvey, Mayor- Commissioner Sue Berfield, Commissioner Arthur X. Deegan, commissioner Fred Thomas, Commissioner Richard A. Fitzgerald, Commissioner CITY OFFICIALS Elizabeth Deptula, City Manager Margaret Simmons, CPA, Finance Director Cynthia E. Goudeau, City Clerk Charles S. Warrington, Jr., Managing Director & Executive Officer, Clearwater Gas System INTERIM CITY ATTORNEY Alan Zimmet, Esquire BOND COUNSEL Bryant, Miller and Olive, P.A. Tallahassee, Florida FINANCIAL ADVISOR Raymond James & Associates, Inc. St. Petersburg, Florida No dealer, broker, salesperson or other person has been authorized by the City or the Underwriters to give any information or to make any representations other than as contained herein, and, if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement is not to be construed as a contract with the purchasers of the Series 1994A Bonds. This Official Statement does not consti- tute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 1994A Bonds by any person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City, MBIA, public documents, records and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of the City with respect to information provided by MBIA or the Underwriters. The information and expressions of opinion stated herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances, any implication that there has been no change in the affairs of the City since the date hereof or the earliest date as of which such information is given. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 1994A BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 1994A Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 1994A BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION ") OR WITH ANY STATE SECURITIES COMMISSION. THE SERIES 1994A BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. TABLE OF CONTENTS Page INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PURPOSE OF SERIES 1994A BONDS . . . . . . . . . . . . . . . . . . . 1 PROJECT. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . 2 DESCRIPTION OF THE SERIES 1994A BONDS . . . . . . . . . . . . . . . . . . 3 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Negotiability, Registration and Cancellation . . . . . . . . . . . 3 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . 3 Redemption Provisions . . . . . . . . . . . . . . . . . . . . . . . 4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . 5 SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 1994A BONDS . . . . . . . . . . . . . . . . . . 6 General. . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . 7 i a FLOW OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . Establishment of Funds and Accounts . . . . . . . . . . . . . . . . Priority of Flow of Funds . . . . . . . . . . . . . . . . . . . . . COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rate Covenant . . . . . . . . . . . . . . . . . . . Additional Parity Obligations . . . . . . . . . . . . . . . . Operation and Maintenance . . . . . . . . . . . . . . . . . . . . . Operating Budget . . . . . . . . . . . . . . . . . . . . . . . . . Annual Audit . . . . . . . . . . . . . . . . . . . . . No Mortgage or Sale of the System . . . . . . . . . . . . . . . . . No Free service . . . . . . . . . . . . . . . . . . . . . Enforcement of Collections . . . . . . . . . . . . . . . . . . . . No Competing System . . . . . . . . . . . . . . . . . . . Unlawful Connection Prohibited . . . . . . . . . . . . . . . Amendment of the Ordinance . . . . . . . . . . . . . . . . . . . . THE SYSTEM • • • • • • • • • • • • . • • • • • • • . • • . Physical Description . . . . . . . . . . . . . . . . . . . . . . . Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gas Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . Rates, Fees and Charges . . . . . . . . . . . . . . . . . . . . . ServiceArea . . . . . . . . . . . . . . . . . . . . . . Clearwater Gas Strategic Plan . . . . . . . . . . . . . . . . . . . Future Projects . . . . . . . . . . . . . . . . . . . . . . Pasco County Territorial Dispute . . . . . . . . . . . . . . . . . Manufactured Gas Plant . . . . . . . . . . . . . . . . . . . . . ADDITIONALPROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . MUNICIPAL BOND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . THE CITY AND PINELLAS COUNTY . . . . . . . . . . . . . . . . . . . . COMBINED DEBT SERVICE REQUIREMENTS . . . . . . . . . . . . . . . . . . HISTORICAL COVERAGE OF MAXIMUM DEBT SERVICE BY THE SYSTEM NET REVENUES . RATINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TAXEXEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . UNDERWRITING. . . . . . . . . . . . . . . . . . . . . . . . . . . ENFORCEABILITY OF REMEDIES . . . . . . . . . . . . . . . . . . . . . . . LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GENERAL PURPOSE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . FINANCIALADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT . . . . . . . . . . . • • • • • ii 7 7 7 9 9 9 10 11 11 11 12 12 12 12 13 13 13 14 15 15 16 17 17 17 18 is is 20 21 21 22 22 22 23 24 24 24 25 25 25 APPENDIX A -- APPENDIX B -- APPENDIX C -- APPENDIX D -- APPENDIX E -- GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA EXCERPTS FROM THE CITY OF CLEARWATER, FLORIDA GENERAL PURPOSE FINANCIAL STATEMENTS AND OTHER INFORMATION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1993 SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE FORM OF BOND COUNSEL OPINION SPECIMEN BOND INSURANCE POLICY iii ..s 3 OFFICIAL STATEMENT $8,110,000" The city of Clearwater, Florida Gas System Revenue Bonds, Series 1994A INTRODUCTION The purpose of this official Statement, which includes its cover page and certain enclosed Appendices, is to furnish information with respect to the issuance by the City of Clearwater, Florida (the "City ") of its Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds ") in the aggregate principal amount of $8,110,000 *. The Series 1994A Bonds are being issued under the authority of and in full compliance with the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, as amended and supplemented, the City Charter, as amended and supplemented, and other applicable provisions of law. The Series 1994A Bonds are being issued more specifically pursuant to Ordinance No. 5118 -91 enacted by the City Commission of the City (the "Commission ") on August 15, 1991, which authorized the issuance of Gas System Revenue Bonds, Series 1991 (the "Original Ordinance ") , as supplemented by Ordinance No. 5564 -94, authorizing the issuance of the Series 1994A Bonds duly enacted by the Commission on August 4, 1994 (the "Series 1994A Ordinance ") and as further supplemented by an award resolution adopted on August 4, 1994 (the "Award Resolution ") (the Original ordinance, the Award Resolution, and the Series 1994A Ordinance are collectively referred to as the "Ordinance "). The Series 1994A Bonds are special, limited obligations of the City payable solely from the Net Revenues derived from the operation of the System, as provided in the Ordinance on a parity with the City's Gas System Revenue 'Bonds, Series 1991, of which $7,680,000 remains outstanding as of September 1, 1994 (the "Series 1991 Bonds "), all as further described under the heading "Additional Parity Obligations" herein. Capitalized terms not otherwise defined in this Official Statement shall have the same meanings assigned to such terms in the Summary of the Ordinance, which is set forth in Appendix "C ". The description of the Series 1994A Bonds, the Ordinance, and certain statutory provisions as well as the information from various reports and statements contained in this Official Statement are not comprehensive or definitive. All references to such documents, reports and statements are qualified by the actual content of such documents, reports and statements, copies of which may be obtained by contacting the Finance Director, City of Clearwater, Florida, 112 South Osceola Avenue, Clearwater, FL 34616, or during the offering period of the Series 1994A Bonds from Raymond ,lames & Associates, Inc., financial advisor to the City. PURPOSE OF SERIES 1994A BONDS The Series 1994A Bonds shall be issued by the City to (i) finance the costs of certain additions, extensions, supplements or replacements of the existing gas system owned and operated by the City (the "System ") within Pinellas County, Florida (the "1994A Project ") ; (ii) make a deposit to the Reserve Account in the * Preliminary; subject to change. Sinking Fund to satisfy the Reserve Requirement; and (iii) pay the costs of issuance of the Series 1994A Bonds. PROJECT A portion of the proceeds from the sale of the Series 1994A Bonds will be utilized by the City for the additions, extensions, supplements or replacements of the existing gas system (the "System ") within Pinellas County, Florida, for areas currently serviced by the System (the 111994A Project "). The estimated cost of the 1994A Project is $7,010,000 which will be funded [ ^] from Series 1994A Bond proceeds. The following chart shows the current components for the 1994A Project to be funded by the Series 1994A Bond proceeds, and the estimated costs of the components. Pinellas County Gas Main & Service Extensions $5,670,000 - commercial and Residential Main and Service Line Extensions 3,640,000 - Main Relocation due to Highway Improvements and Other Public Works Projects 890,000 - Indian Rocks Loop 500,000 - Pinellas Vehicles (8) and Computers (7) 150,000 - Engineering Design Services 200,000 - Gas Meter Changeout Program 200,000 - Propane Tanks and Installation 90,000 Develop New Gas Markets 1,340,000 - Natural Gas Vehicle Stations /Conversions and Gas Air Conditioning 1,300,000 - Marketing Vehicles (2) and Computers (3) 40,000 Total Net Capital Requirements for 1994A Project 57,010,000 ESTIMATED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Series 1994A Bonds are expected to be applied as follows: Sources of Funds Principal Amount of Series 1994A Bonds $ Less Original Issue Discount ( ) Accrued Interest Total Sources of Funds $ Uses of Funds $ Deposit to the Construction Fund Deposit to Interest Account (1) Deposit to the Reserve Account Underwriter's Discount Costs of Issuance (2) Total Uses of Funds $ (1) Accrued interest. (2) Includes the premium for the Municipal Bond Insurance Policy. 2 MCKIPTION OF T118 SBRII S 1994A BONDS General The Set ten 19114A M,u+t nhall be ieuued in fully registered form in dgnominatitano of S`.,,,)Ou x,rr l in +.t:1r.1Y multiples thereof and shall be dated, shall boar int.oretnt tpayaablo uviiti .itifiii.Ally on March 1 and September 1 of each year commrancing Match 1, 11UP0 ar t.ht~ gates per annum and shall mature on the dates and in the amoutttc, all av eset forth on the cover page of this official Statement. Interest tin than Series 1994A Bonds will be payable by First Union National Bank of Florida havintY Ito primary corporate trust office in Jacksonville, Florida, as Paying Agent, by check or draft mailed to the registered owner at the address shown on the registration books of the City maintained by the Paying Agent, also acting as Registrar, on the fifteenth (15th) day of the month prior to each Interest payment Date whether or not such day is a business day ( "Record Date "), provided that, at the request of any registered owner of at least $1,000,000 in aggregate principal amount of Series 1994A Bonds, interest may be payable by wire transfer to the batik account number on file with the Paying Agent as of the applicable Record Date. The principal of and premium, if any, on the Series 1994A Bundo are payable at maturity or earlier redemption to the registered owner upon presentation and surrender at the designated corporate trust office of the !laying Agent. Negotiability, registration and Cancellation At the option of any registered owner of one or more Series 1994A Bonds and upon surrender at the principal corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his or her duly authorized attorney, the Series 1994A Bonds may be exchanged for Series 1994A Bonds of the same maturity of any other authorized denominations. The Registrar shall keep books for the registration of the Series 1994A Bonds and for the registration of transfers of the Series 1994A Bonds as provided in the ordinance. The Serlcas 1994N Bonds shall be transferable by the registered owner thereof in pa=rson or by his attorney duly authorized in writing only upon the registration books of the City kept by the Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his or her duly authorized attorney. Upon the transfer of any such Series 1994A Bonds, the city shall issue in the name of the tranaferae a new Series 1994A Bond or Series 1994A Bonds. The City, the Paying Agent and the Registrar shall deem and treat the person whose names any Serloo 1994A Bond shall be registered upon the books kept by the Registrar as tho abooluto owner of such Series 1994A Bond, whether such Series 1994A Bond ahall he ovordue or not, for the purpose of receiving payment of, or on account of, the prfnciptrl of and interest on such Series 1994A Bond as the same becomea dual atrti t.a- till tithctr purposes. All such payments so made to any such regintered ownrrr of tilron hin order shall be valid and effectual to satisfy and disc=hartle thu liability upon such Series 1994A Bond to the extent of the sum or sums a,! l.,Aixi, tAwl rtoit:hor the City, the Paying Agent, nor the Registrar shall he affvvtexcl l,y any n„t.ivo to Lhe contrary. Transfer and Cxoltraiiget In all otwou in whi,'ti tho privilege of exchanging Series 1994A Bonds or transferring sorivo 10144A to oxorciHod, the city shall execute and the Registrar shall .tuthow i ,Art, ott,t doliver Sorioo 1.994A Bands in accordance with the provictittn t,t tile+ alai r,:tiwo. All 1994A llt,ndu uurretndered in any such exchangeo or tr,anirtvr ; ,h; i,! t- Ott hwit h r,t -3t -1 ivored to the Registrar and canceled -x , by the Registrar in the manner provided by the ordinance. There shall be no charge for any such exchange or transfer of Series 1994A Bonds, but the city or the Registrar may require payment of a sum sufficient to reimburse them for their reasonable fees and for any tax or other governmental charge required to be paid with respect to such exchange or transfer. Redemption Provisions Optional Redemption. The Series 1994A Bonds may, at the option of the City, from any funds legally available for such purpose, be redeemed in whole on any date on or after September 1, 2002, or in part on any interest payment date thereafter, in any manner as shall be determined by the City at the redemption prices (expressed as percentages of the principal amount of such Series 1994A Bonds to be redeemed) as set forth below if redeemed in the following redemption periods, plus accrued interest to the redemption date: Redemption Periods (Both Dates inclusive) Redemption Price September 1, 2002 through August 31, 2003 102% September 1, 2003 through August 31, 2004 101 September 1, 2004 and thereafter 100 Mandatory Sinking Fund Redemption of the Series 1994A Bonds. The Series 1994A Bonds maturing on September 1, are subject to mandatory sinking fund redemption by funds deposited in the Bond Amortization Account in the Sinking Fund prior to maturity in part, by lot at a redemption price equal to their principal amount and the accrued interest on each September 1 in the years and amounts set forth below at a redemption price equal to 100% of the unpaid principal amount of such Series 1994A Bonds being redeemed plus accrued interest thereon to the date fixed for redemption, without premium: Year * Final Maturity Principal Amount Mandatory Sinking Fund Redemption of the Series 1994A Bonds. The Series 1994A Bonds maturing on September 1, are subject to mandatory sinking fund redemption by funds deposited in the Bond Amortization Account in the Sinking Fund prior to maturity in part, by lot at a redemption price equal to their principal amount and the accrued interest on each September 1 in the years and amounts set forth below at a redemption price equal to 100% of the unpaid principal amount of such Series 1994A Bonds being redeemed plus accrued interest thereon to the date fixed for redemption, without premium: Year * Final Maturity Principal Amount Money held for the credit of the Bond Amortization Account is required to be applied to the retirement of term obligations as follows: (1) Subject to the provisions of paragraph (3) below, the City may purchase Term Bonds then outstanding at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal of such Term Bonds plus the accrued interest to the date of delivery thereof. The City is required to pay the interest accrued on such Term Bonds to the date of delivery thereof from the Interest Account and the purchase price from the Bond Amortization Account, but no such purchase may be made by the City within the period of 45 days immediately preceding any interest payment date on which Term Bonds are subject to call for redemption, except from money in excess of the amounts set aside or deposited for the redemption of Term Bonds. (2) Subject to the provisions of paragraph (3) below, whenever sufficient money is on deposit in the Bond Amortization Account to redeem $5,000 or more principal amount of Term Bonds, the City may call for redemption from money in the Bond Amortization Account such amount of Term Bonds then subject to redemption as, with the redemption premium, if any, will exhaust the money then held in the Bond Amortization Account as nearly as may be practicable. Prior to calling Term Bonds for redemption, the City is required to withdraw from the Interest Account and from the Bond Amortization Account and set aside in separate accounts or deposit with the paying agents the respective amounts required for paying the interest on and the principal of and redemption premium applicable to the Term Bonds so called for redemption. (3) Money in the Bond Amortization Account is required to be applied by the City in each fiscal year to the retirement of Term Bonds then outstanding in the following order: (a) The Term Bonds of each series of Bonds, to the extent of the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium, if any, and, if the amount available in such Fiscal Year shall not be sufficient therefor, then in proportion to the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium, if any; provided, however, that if the Term bonds of any such series are not then subject to redemption from money in the Bond Amortization Account and if the City is at any time unable to exhaust the money applicable to the Term Bonds of such series under the provisions of this clause or in the purchase of such Term Bonds under the provisions of paragraph (1) above, such money or the balance of such money, as the case may be, must be retained in the Bond Amortization Account and, as soon as it is feasible, applied to the Term Bonds of such series; and (b) Any balance then remaining, other than money retained under the first clause of this paragraph (3), is required to be applied to the retirement of such Term Bonds as the City in its sole discretion determines, but only, in the case of the redemption of Term Bonds of any series, in such amounts and on such terms as may be provided in the resolution or ordinance authorizing the issuance of the obligations of such series. The City is required to pay from the Sinking Fund all expenses in connection with any such purchase or redemption. Notice of Redemption Notice of call for redemption of the Series 1994A Bonds shall be mailed by first class mail, postage prepaid, by the Registrar at least fifteen (15) days and not more than thirty (30) Jaya, before the date fLxed for redemption to all d registered owners of the Series 1994A Bonds (or any portions thereof) to be redeemed, to their addresses as they appear on the registration books for the Series 1994A Bonds or to such other address as shall be furnished to the Registrar by such Bondholder. Failure of any registered owner of Series 1994A Bonds that are to be redeemed to receive such notice of redemption, or any defect in such notice, shall not affect the validity of the proceedings for such redemption of any other Series 1994A Bonds, When notice of redemption is given, the Series 1994A Bonds called for redemption will become due and payable on the redemption date at the redemption price stated in the notice. Interest on any Series 1994A Bonds duly called for redemption will cease to accrue after the date fixed for redemption if funds sufficient for payment of the redemption price has been deposited with the Paying Agent. SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 1994A BONDS General The principal of, redemption premium, if any, and interest on the Series 1994A Bonds are payable from the Net Revenues equally and ratably with each other and the Series 1991 Bonds. The Series 1994A Bonds and the Series 1991 Bonds are secured by a first and prior lien on the Net Revenues derived from the operation of the System deposited in the Sinking Fund created and established under the Ordinance and from monies and investments deposited in certain funds and accounts established by the Ordinance and earnings thereon. The Series 1994A Bonds shall not be and shall not constitute an indebtedness of the City or the State of Florida or any political subdivision thereof within the meaning of any Constitutional, statutory, charter or other limitation of indebtedness, and neither the full faith and credit nor the taxing power of the City, the State of Florida, or any political subdivision thereof, are pledged or obligated as security for the payment of the principal of, interest on, or redemption premium, if any, with respect to any Series 1994A Bonds. The holders of the Series 1994A Bonds shall have no right to compel the exercise of the ad valorem taxing power of the City or taxation in any form of real property therein to pay the Series 1994A Bonds or the interest thereon. The proceeds of the sale of the Series 1994A Bonds shall be and constitute trust funds for the purposes provided in the Ordinance and there is a lien upon such money, until so applied, in favor of the Holders of the Series 1994A Bonds. "Net Revenues" is defined in the Ordinance to mean Gross Revenues less the Cost of Operation and Maintenance. "Gross Revenues" means all monies received from rates, fees, rentals or other charges or income derived from the investment of funds, unless otherwise provided in the Ordinance, by the City or accruing to it in the operation of the System, all calculated in accordance with sound accounting practice. "cost of operation and Maintenance" of the System means all current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with sound accounting practice and includes, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the city related solely to the System, labor, cost of materials and supplies used for current operation and charges for the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation. The Series 1991 Bonds and the Series 1994A Bonds are further secured by a prior lien on and pledge of the monies and investments deposited in the Funds and Accounts established by the ordinance except for monies and investments deposited in the Operation and Maintenance Fund and the Rebate Fund. Reserve Account A Reserve Account within the Sinking Fund has been established pursuant to the ordinance. Within the Reserve Account, there will be established a separate subaccount for each series of Bonds. Revenues must be applied by the City to maintain in each subaccount in the Reserve Account a sum equal to the Reserve Requirement, if any, for any subsequent year on each series of Bonds, which sum will initially be deposited therein from the proceeds of the sale of the Series 1994A Bonds and other funds of the City. To the extent the City determines pursuant to a subsequent resolution to fund a subaccount within the Reserve Account for a respective series of Bonds, the city may provide that the difference between the amounts on deposit in such subaccount and the Reserve Requirement for such series of Bonds shall be an amount covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a surety bond, by a letter of credit or any combination thereof or by such other form of credit enhancement as shall be approved by a resolution of the City adopted prior to the issuance of the series of Bonds for which such subaccount is established. Such resolution may also provide for the substitution of such credit enhancement. For further information concerning the Reserve Account, please refer to the section entitled "Flaw of Funds" contained herein. Notwithstanding any provision of the Ordinance to the contrary, moneys in each subaccount in the Reserve Account may be used only for the purpose of the payment of maturing principal of or interest or making Amortization Installments on the Bonds for which such subaccount was established when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose including the payment of any other series of Bonds. FLOW OF FUNDS Establishment of Funds and Accounts The following Funds and Accounts have been established pursuant to the Ordinance: Revenue Fund operation and Maintenance Fund Sinking Fund Interest Account Principal Account Reserve Account Bond Amortization Account Renewal and Replacement Fund A separate subaccount is required to be maintained in the Reserve Account for each series of Bonds. Priority of Flow of Funds The entire Gross Revenues, except the income from investments (hereinafter discussed), derived from the operation of the System must be deposited in the Revenue Fund. The Revenue Fund constitutes a trust fund for the purpose provided in the ordinance, and must be kept separate and distinct from all other funds of the City and used only for the purposes and in the manner provided in the Ordinance. All revenues at any time remaining on deposit in the Revenue Fund must be disposed of on or before the fifteenth (15th) day of each month only in the following manner and in the following order or priority, I Revenues must first be used to deposit in the operation and Maintenance Fund, such sums as are necessary for the Cost of operation and Maintenance for the next ensuing month. 2. Revenues must next be used for deposit into the Interest Account, such sums as will be sufficient to pay one -sixth (1/6) of all interest becoming due on the Series 1994A Bonds and the Series 1991 Bonds on the next semi- annual interest payment date. 3. Revenues must next be used for deposit into the Principal Account, in any bond year in which a serial Bond matures, such sums as will be sufficient to pay one - twelfth (1/12) of the principal maturing on Serial Bonds in such year. 4. Revenues must next be used for deposit into the Bond Amortization Account in any bond year in which an Amortization Installment is due, such sums as will be sufficient to pay one - twelfth (1/12) of the Amortization Installment required to be made in such year. Such payment will be credited to a separate special account for each series of Term Bonds outstanding, and if there is more than one stated maturity for Term Bonds of a series, then into a separate special account in the Bond Amortization Account for each such separate maturity of Term Bonds. The funds and investments in each such separate account are pledged solely to the payment of principal of the Term Bonds of the series or maturity within a series for which it is established and will not be available for payment, purchase or redemption of Term Bonds of any other series or within a series, or for transfer to any other account in the Sinking Fund to make up any deficiencies in required payments therein. Moneys on deposit in each of the separate special accounts in the Bond Amortization Account are required to be used for the open market purchase or the redemption of Term bonds, pursuant to the ordinance of the series or maturity of Term Bonds within a series for which such separate special account is established or may remain in said separate special account and be invested until the stated date of maturity of the Term Bonds. The required deposits to the Principal Account, Interest Account and Bond Amortization Account are required to be adjusted in order to take into account the amount of money currently on deposit therein. 5. Revenues must next be applied by the City to maintain in each subaccount in the Reserve Account a sum equal to the Reserve Requirement, if any, for any subsequent year on each series of Bonds, which sum will initially be deposited therein from the proceeds of the sale of the Series 1994A Bonds and other funds of the City. To the extent the City determines pursuant to a subsequent resolution to fund a subaccount within the Reserve Account for a respective series of Bonds, the City may provide that the difference between the amounts on deposit in such subaccount and the Reserve Requirement for such series of Bonds shall be an amount Covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a surety bond, by a letter of credit or any combination thereof or by such other form of credit enhancement as shall be approved by a resolution of the City adopted prior to the issuance of the series of Bonds for which such subaccount is established. Such resolution may also provide for the substitution of such credit enhancement. Bond insurance, a surety bond, a letter of credit or any combination thereof or such other form of credit enhancement may in the future be deposited in the subaccount in the Reserve Account for the Series 1994A Bonds as may be approved by subsequent resolution of the City, provided that the provider of such credit enhancement is then rated in one of the two highest rating categories (without regard to gradation) by Standard & Poor's Corporation and Moody's Investors Service, Inc. Any withdrawals from any subaccount in the Reserve Account are required to be subsequetttly restored from the first moneys available in the Revenue Fund on r a pro rata basis as to all subaccounts in the Reserve Account after all required current payments for the Operation and Maintenance Fund and Sinking Fund (including all deficiencies in prior payments to those Funds) have been made in full. Notwithstanding any provision of the Ordinance to the contrary, moneys in each subaccount in the Reserve Account may be used only for the purpose of the payment of maturing principal of or interest or making Amortization Installments on the Bonds for which such subaccount was established when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose including the payment of any other series of Bonds. In the event of the refunding of any series of Bonds, the City may withdraw from the subaccount within the Reserve Account for such series of Bonds, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing the refunding of such series of Bonds. 6. The City must next deposit into the Renewal and Replacement Fund an amount equal to one- twelfth (1/12) of an amount equal to 5% of prior year's Gross Revenues; provided, however, that so long as there shall be on deposit in such Renewal and Replacement Fund a balance of at least $300,000, no additional deposits in such Fund are required. The moneys in the Renewal and Replacement Fund may be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency repairs thereto. Such moneys on deposit in such Fund are also required to be used to supplement the Reserve Account if necessary, in order to prevent a default in the payment of the principal or Amortization Installments of and interest on the Bonds. 7. The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may be used by the City for any lawful purpose. S. The Operation and Maintenance Fund, the Sinking Fund, the Renewal and Replacement Fund, the Revenue Fund, and all accounts therein and any other special funds established and created under the Ordinance constitute trust funds for the purposes provided herein for such funds. All such funds shall be continuously secured in the same manner as City deposits are authorized to be secured by the laws of the State of Florida. COVENANTS Rate Covenant in and by the Ordinance, the City has covenanted that it will fix, establish, revise from time to time whenever necessary, maintain and collect always, such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which will always provide Revenues in each year sufficient to pay, and out of such funds pay, 100% of the Cost of Operation and Maintenance of the System in such year and all reserve and other payments provided for in the Ordinance and 125% of the Bond Service Requirement due in such year on all outstanding Bonds. The City has covenanted that such rates, fees, rentals, or other charges shall not be reduced so as to be insufficient to provide Revenues for such purposes. Additional Parity Obligations Additional Parity Obligations, payable on a parity from Net Revenues of the System with the Series 1994A Bonds, may be issued after the issuance of the Series 1994A Bonds, for construction and acquisition of additions, extensions and improvements to the System or for refunding purposes and upon the following conditions: 1. The Net Revenues derived or which would have been derived, if adjusted as Set forth below, from the System, either during the immediately preceding Fiscal Year, during any twelve (12) consecutive calendar months of the eighteen (18) calendar months immediately preceding the sale of the proposed Additional Parity Obligations or during the last twelve (12) month period for which the City has audited financial statements for the System, at the option of the City, shall have been not less than 125% of the Maximum Bond Service Requirement which will become due in any calendar year thereafter on (a) the Series 1994A Bonds then outstanding, (b) any Additional Parity Obligations issued and then outstanding (including the series 1991 Bonds), and (c) the Additional Parity Obligations then proposed to be issued. In determining the amount of Net Revenues for the purposes of paragraph (1) above, the Consulting Engineers may adjust the Net Revenues by adding thereto the following: a. The Net Revenues (computed for such utility on the same basis as net revenues are computed for the System) of any gas utility which the City shall have acquired prior to the issuance of such Additional Parity Obligations or which the City shall be acquiring from proceeds of such Additional Parity Obligations; and b. In the event a change has been made in the rate schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above, and such change has resulted in an increase in Net Revenues, such amount of additional Net Revenues which the consulting Engineers estimated would have been received by the city during such 12 month period if such change in such rate schedule had been in effect during the entire 12 month, period; and in the event a change has been made in the rate schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above, and such change has resulted in a decrease in Net Revenues, by subtracting therefrom such amount of the Net Revenues which the Consulting Engineers estimate would not have been received by the City during such 12 month period referred to in (1) above, if such change in such rate schedule had been in effect during the entire 12 month period. 2. Each resolution or ordinance authorizing the issuance of Additional Parity Obligations will recite that all of the covenants contained in the Ordinance will be applicable to such Additional Parity obligations. 3. The City shall not be in default in performing any of the covenants and obligations of the Ordinance, if all payments required to have been made into the accounts and funds, as provided in the Ordinance, shall have been made to the full extent required. The City currently has outstanding its Gas System Revenue Bonds, Series 1991 of which $7,680,000 remains outstanding as of September 1, 1994. The City also currently expects to issue Additional Parity Obligations totalling approximately $26,750,000 over the course of the next six years. Operation and Maintenance The City covenants it will maintain the system and all parts thereof in good condition and will operate the same in an efficient and economical manner making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. 10 ww � i " u Operating Budget The City covenants to annually prepare and adopt prior to the beginning of each of its Fiscal Years, a detailed budget or budgets of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. Annual Audit At least once a year, within six months after the close of its Fiscal Year, the City covenants to cause the books, records and accounts relating to the System to be properly audited by a recognized independent firm of certified public accountants. No Mortgage or Sale of the System The City has covenanted not to sell, lease, mortgage, pledge or otherwise encumber the System, or any substantial part thereof, or any revenues to be derived therefrom, except as described below. Notwithstanding the foregoing, the City has reserved the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which the City hereafter determines, in the manner provided in the Ordinance, to be no longer necessary, useful or profitable in the operation of the System. Prior to any such sale, lease or other disposition of said property, if the amount to be received therefor is not in excess of $50,000, the City Manager of the Issuer or other duly authorized officer in charge thereof is required to make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof. If the amount to be received from such sale, lease or other disposition of said property is in excess of $50,000 but not in excess of $100,000 such City Manager or other officer is required to first make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the governing body of the Issuer must, by resolution or ordinance duly adopted; approve and concur in the finding of such City Manager or other officer, and authorize such sale, lease or other disposition of said property. If the amount to be received from such sale, lease or other disposition of said property is in excess of $100,000 but not in excess of 10% of the value of fixed assets of the System according to the most recent annual audit report, such City Manager or other officer must first make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the Consulting Engineer must make a finding that it is in the best interest of the System that such property be disposed of, and the governing body of the City must by resolution or ordinance, duly adopted, approve and concur in the findings of such City Manager or other officer and of the Consulting Engineer, and authorize such sale, lease or other disposition of said property. Anything in this section to the contrary notwithstanding, nothing restricts the governing body of the City or, to the extent such authority has been vested in the City Manager by such governing body, the City Manager in exercising discretion, from authorizing the sale or other disposition of any of the property comprising a part of the System, if the Consulting Engineer certifies that the Net Revenues of the System will not be materially adversely affected by reason of such sale or disposition. Such proceeds must be placed in the Renewal and Replacement Fund or used for the retirement of outstanding series 1994A Bonds or Additional Parity Obliga- tions, in such proportions to be determined by the governing body of the City 11 upon the recommendations of the City Manager. The payment of such proceeds into the Renewal and Replacement Fund do not reduce the amounts required to be paid into such Fund by other provisions of the Ordinance. Anything in this section to the contrary notwithstanding, nothing prohibits the City from transferring ownership of the system to another governmental entity in accordance with the ordinance without complying with the provisions described in this section.. No Free Service The City has covenanted not to render or cause to be rendered any free services, except to the extent that certain marketing and sales programs may involve incentives to the customer with such resulting expenses paid for by appropriate marketing and sales expense funds of the System. Nor will any preferential rates be established for users of the same class, except that the City Commission has authorized by ordinance the use of discounted gas service rates to avoid the loss of a customer who has decided to convert to a lower cost alternate energy source. Whenever the City, including its departments, agencies and instrumentalities, shall avail itself of the product, facilities or services provided by the System, or any part thereof, the same rates, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged to the City and any such department, agency or instrumentality. Such charges shall be paid as they accrue, and the City is required to transfer from its general funds to the Gas Revenue Fund sufficient sums to pay such charges. The revenues so received will be deemed to be Revenues derived from the operation of the system, and be deposited and accounted for in the same manner as other Gas Revenues derived from a similar operation. Enforcement of Collections The City has covenanted to enforce and collect the rates, fees and other charges for the services and facilities of the System herein pledged; to take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law; and to maintain accurate records with respect thereof. All such fees, rates, charges and revenues pledged pursuant to the ordinance will, as collected, be held in trust to be applied as provided'in the Ordinance. The City will, under reasonable rules and regulations, to the full extent permitted by law, shut off the connection of any users of the System for non- payment of fees, rentals and other charges for the services of the System and will not furnish him or permit him to receive from the System further service until all obligations owed by him to the City on account of services have been paid in full. No Competing System To the full extent permitted by law, the City has covenanted not to hereafter grant, or cause, consent to, or allow the granting of, any franchise or permit to any person, for the furnishing of competing gas services to or within the boundaries of the service area of the City; provided, however, that if the Gas System Manager renders an opinion that it would not be feasible for the city to provide such services to any specific area within the three years succeeding a request to provide such service, the City may authorize or allow the granting of such franchise or permit for such area upon such terms and conditions as it may approve. Unlawful Connection Prohibited The City has enacted an ordinance makinq it unlawful for any person or persons to tamper with, change or make any connection with the System without the 12 written consent of the City, or to make any reconnection with the System when service has been discontinued for delinquent charges, until such delinquent charges have been paid in full, including interest, reasonable penalties and reconnection charges. The City will diligently, to the full extent permitted by law, enforce this covenant and prosecute any person violating the provisions of this covenant or any penal ordinance relating to the same. Amendment of the Ordinance In the Ordinance, the City has reserved the right to amend or supplement the Ordinance for certain purposes without the consent of Bondholders if the amendment or supplement does not adversely affect the rights of Bondholders. Otherwise, no material modification or amendment of the Ordinance may be made without the consent in writing of a majority of the Bondholders of the principal amount of the Series 1994A Bonds of each Series so affected and then outstanding; provided, however, that no modification or amendment may permit a change in the maturity of such Series 1994A Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the City to pay the principal of and interest on the Series 1994A Bonds as the same become due from the Net Revenues of the System or reduce the percentage of the Bondholders required to consent to any material modification or amendment of the Ordinance without the consent of the Bondholders of all such obligations. For purposes of this paragraph, to the extent that any Series 1994A Bonds are secured by a Credit Facility and such Series 1994A Bonds are then rated in one of the two highest rating categories (without regard to gradation) by either Standard & Poor's Corporation or Moody's Investors Service, Inc., or successors and assigns, then the consent of the Credit Facility issuer will be deemed to constitute the consent of the Bondholders and in such case no consent of the Bondholders is required. THE SYSTEM Physical Description The Clearwater Gas System (the "System ") began operations in the mid- 1920's with the production, distribution and sale of manufactured gas. The System was converted to natural gas in 1959 when Florida Gas Transmission (FGT) extended pipelines into Florida. The System also provides propane (LP) service in areas where natural gas mains have not yet been extended. In addition to serving the City of Clearwater, the System has expanded into, and has franchise agreements with, the cities of Belleair, Belleair Beach, Belleair Bluffs, Dunedin, Indian Rocks Beach, Largo, Oldsmar, Safety Harbor, and Tarpon Springs. The System also services the unincorporated area between these cities. The franchise agreements expire respectively in 2020, 2002, 2020, 2018, 2001, 2014, 2001 and 2013, which in some instances is prior to the maturity of the Series 1994A Bonds. It is anticipated that such franchise agreements will be renewed upon their expiration; however, there is no assurance of such renewals, Each franchise agreement authorizes the respective municipality to terminate the franchise agreement in the event the City fails to furnish gas for a period of 72 hours as required by the agreement for causes within the control of the City. In addition, the franchise agreements with Dunedin, Belleair Bluffs, Largo and Safety Harbor authorize the municipality to purchase from the City the property used with respect to each franchise at the expiration of the franchise. The franchise agreements with Oldsmar and Tarpon Springs authorize Oldsmar and Tarpon Springs to purchase such property during the term of the franchise as well as at expiration. The System currently serves 12,010 customers and has 483 miles of gas main as of June, 1994. According to a survey conducted by Pipeline & Gas Journal dated September, 1993, the System ranked as the third largest municipal natural gas system in Florida and the 39th largest in the United States. 13 >. 't " Management The City has a Commission - Manager form of municipal government. The Mayor - Commissioner and Commissioners are elected by the City's voters on an at -large basis. All have voting power at Commission meetings which are chaired by the Mayor - Commissioner. The City Commission appoints the City Manager and the City Manager is responsible for appointing all officers and employees in the administrative service of the City, including the Managing Director & Executive officer of the Clearwater Gas System. The Clearwater Gas System is administered by the Gas System Managing Director & Executive Officer who reports directly to the City Manager. The System is one of six utilities (Water, Sewer, Gas, Solid Waste, Recycling, and Stormwater) billed on a consolidated basis by the Clearwater Utility Customer Service. Charles S. Warrington, Jr. currently serves as Managing Director & Executive Officer of the Clearwater Gas System and reports directly to the City Manager. He received his Bachelor of Electrical Engineering degree from the Georgia Institute of Technology in 1971 and is a 1982 graduate of the University of Michigan Public Utility Executive Program. He has been a registered Professional Engineer in the State of Florida since 1976. Prior to joining the City of Clearwater in February 1992, Mr. Warrington served as Director of Customer Services for Florida Power & Light Company (FPL), the largest electric utility in the State of Florida. Mr. Warrington was responsible for corporate -wide customer service policies, procedures, systems, training and regulatory interface. Prior to this position, he had served as a District General Manager for two (2) of the largest FPL districts (Miami and Coral Gables). In total, Mr. Warrington has 23 years of public utility experience of increasing responsibility. Mr. Warrington currently serves on the Board of Directors of the Florida Natural Gas Association, serves on the Board of Directors and as Secretary to the Municipal Gas Authority of Florida, serves as Vice President of the Florida Municipal Natural Gas Association, and serves on the Board of Directors and as Vice President of the Florida Engineering Society - Pinellas Chapter. Terry Neenan has served as Assistant Director of CGS /Gas Supply & operations since February, 1994. Prior to that he served as Gas Superintendent from 1986 until 1994, Assistant Superintendent from 1982 to 1986, Service Supervisor from 1979 to 1982, and Utilities Serviceman from 1968 to 1982 all with the Clearwater Gas System. He holds a Master Gas Contractor License with Pinellas County, a Natural Gas Specialty Contractor License with the Pinellas County Construction Licensing Board, a 601 LP License from the Department of Agriculture, and holds other licenses and certificates related to natural and LP gas. Mr. Neenan serves as qualifier for the Clearwater Gas System both in Pinellas and Pasco Counties. Mr. Neenan attended St. Petersburg Junior College and the Florida Gas Transmission School in Sanford. He has served as a Secretary, Treasurer, Vice Chairman and Chairman of the Operating Section of the Florida Natural Gas Association. He has also served two years as Secretary to the Florida Municipal Natural Gas Association. James M. Lewin, Sr. has served as Assistant Director of CGS /Gas Marketing & Planning since April 1994. Prior to that, he served as Assistant Superintendent from 1986 to 1994, Gas Supervisor from 1977 to 1986, and as a Distribution Serviceman from 1974 to 1977, all with the Clearwater Gas System. Mr. Lewin also holds a Natural Gas Specialty Contractor License with the Pinellas County Construction Licensing Board, a 601 LP License from the Department of Agriculture, and holds other licenses and certificates related to natural gas. He is three (3) credit hours from completing an Associate of Arts Degree in Business Administration frum the St. Petersburg Junior College. 14 /,i Gas Supply The City purchases its supply of natural gas from the Citrus Industrial Sales Company, Inc. The present supply of gas is based on service agre.!ments between the City, the Municipal Gas Authority of Florida (MGAF), Citrus Industrial Sales, and Florida Gas Transmission Company (FGT). On August 1, 1990, the Federal Energy Regulatory Commission (FERC) deregulated the natural gas pipeline industry. This allows other natural gas suppliers and local distribution companies, like the Clearwater Gas System to transport gas over FGT pipelines as opposed to purchasing natural gas supply from only FGT. FGT at the present time is equally owned by Enron Corporation and Sonat, Inc. Enron Corporation through its subsidiaries operates or has interest in approximately 37,000 miles of transportation pipelines from Texas to the Canadian border and from California to Florida. Sonat, Inc. owns and has interest in natural gas transportation facilities that provide service in the states of Florida, Georgia, Alabama, South Carolina, Tennessee, Mississippi, and Texas as well as the Federal Offshore Domain in and around the State of Louisiana. MGAF is an inter -local municipal organization which purchases natural gas supplies for fifteen (15) municipally owned local distribution companies and gas districts served by FGT. Clearwater Gas System was a leader in forming MGAF. The City of Clearwater joined MGAF by Resolution 92 -75 which was adopted by the City 'Commission on December 3, 1992. MGAF began purchasing gas supplies for Clearwater Gas System through a three (3) year gas management and supply acquisition contract with Citrus Industrial Sales Company in November 1993. These agreements provide a maximum daily quantity of approximately 10,219 MMBtu's of natural gas during the months of November to April; 4,652 MMBtuls during the months of May to September; and 7,496 MMBtu's for the month of October. The total annual entitlement is 2,793,771 MMBtu's of natural gas transportation. FGT is constructing an additional gas pipeline along the west coast of Florida called Phase III, which will increase the supplies of gas available to the System. The System has entered into Phase III transportation agreements with FGT for an additional 1,781 MMBtu's to be delivered during the summer and 1,348 MMStu's delivered in th °e winter. Phase III is projected to be in service by the end of December 1994. Phase III will increase the System's yearly transportation entitlement by 583,816 MMBtu's. This will establish a new annual entitlement of 3,377,587 MMBtu's to be delivered by the FGT pipeline, which will provide ade- quate capacity through at least the year 1998. It is anticipated that additional entitlements can be acquired from either the proposed FGT Phase IV or the proposed Sunshine Pipeline to satisfy the System's customers' needs into the twenty -first century. Rates, Fees and Charges The City Commission has established ordinance, which includes a purchased gas c City to pass - through to customers any incre of gas. The City is not subject to establishing or revising its rates. In t and interruptible rates have ranged from in July 1990 to highs of 830 per therm in J u 1992, respectively. The current rates ar a schedule of rates and charges by ost adjustment provision allowing the ase or decrease in the purchased price regulation by any State agency in he last five years the general (firm) I Rate Schedule General (Firm) interruptible 15 ows of 61.2360 and 42.1160 per therm ne 1993 and 600 per therm in December e as follows: Rate per Therm 800 580 Service Area The System's present service area covers all of northern Pinellas County, an area of approximately 135 square miles. The service area is generally bounded by Ulmerton Road on the south, the Gulf of Mexico on the west, the Pasco County line on the north and the Hillsborough County line and the Tampa Bay on the east. In addition to the City of Clearwater, the service area includes the cities of Belleair, Belleair Beach, Belleair Bluffs, Belleair Shores, Dunedin, Indian Rocks Beach, Largo, Oldsmar, Safety Harbor and Tarpon Springs, as well as portions of the unincorporated areas of northern Pinellas County. As of June 1994, the latest date as of which the information is readily available, the System's active natural gas customers were located as shown in the following table: Location Meters Percentage Belleair 261 2.3% Belleair Beach 9 0.1 Belleair Bluffs 10 0.1 Clearwater 6,433 57.2 Dunedin 982 8.7 Indian Rocks Beach 4 0.1 Largo 1,172 10.4 Oldsmar 22 0.2 Safety Harbor 504 4.5 Tarpon Springs 286 2.5 Unincorporated Areas 1,568 13.9 Total 11,251 100.0% The System provides service to firm (non - interruptible) and interruptible classes of customers. The System derives less than one percent of its revenues from its largest firm customer. The following table shows the five largest interruptible customers by peak monthly consumption and the percent of the System's revenues derived from such customers during the 12 months ending September 30, 1993: Peak % of Customer Name Monthly Therms Gross Revenues National Linen Services, Inc. 73,320 3.696 Metal Industries, Inc. 48,530 2.7% Morton F. Plant Hospital �y� 45,960 0.7% Aubrey T. Moorefield Paving Contractors, Inc. {2j 41,330 1.7% Clearwater Linen & Uniform Supply, Inc. 27,800 1.4% t11 Used an alternative fuel service until May, 1993. i2) Currently using an alternative fuel service since July, 1993. The System's customers have grown in the past five years from 10,490 in September of 1989 to 12,010 in June of 1994. The System's 12,010 Customers represent a market penetration of approximately 6 %, providing an opportunity for continued customer growth within the existing service area. The following table shows the breakdown of the System's customers by category as well as the volume of gas sold and the sales revenues generated by each category for the fiscal year ending September 30, 1993: 16 r . 3 Clearwater Gas Strategic Plan The management of the Clearwater Gas System developed a comprehensive 111993 -2000 Strategic Plan" which was presented to the City of Clearwater Commission on August 10, 1993. This Strategic Plan provided four (4) aggressive strategic opportunities: 1. Average No. Gas Gas growth Customers Volume Sales Interruptible 10 17.5% 13.1% Residential 9,029 23.5% 25.1% Commercial 1,926 59.0% 61.8% Clearwater Gas Strategic Plan The management of the Clearwater Gas System developed a comprehensive 111993 -2000 Strategic Plan" which was presented to the City of Clearwater Commission on August 10, 1993. This Strategic Plan provided four (4) aggressive strategic opportunities: 1. Continue the existing level of gas service operations and 9.56 growth rate in Pinellas County - this is projected to add 1.34 2,800 new customers by the year 2000; $7.01 2, Accelerate growth in Pinellas County - this is projected to 27 add an additional 2,500 new customers by the year 2000; $35.00 3. Expand gas service into Pasco County - this is projected to add an additional 1,900 new customers by the year 2000; and 4. Develop new Gas Markets - this would allow the System to expand services into new market opportunity areas such as natural gas vehicles and gas air conditioning. The City Commission approved the Strategic Plan in its entirety and began the process of authorizing a total of $35 million in Gas Revenue Bonds to fund the Strategic Plan. The Series 1994A Bonds are the first issue of bonds required to implement the funding for the overall Strategic Plan. Future Projects A breakdown of the projects to be funded by the Gas System Revenue Bond issues currently planned is as follows: Series Future 1994A Additional Long Range Strategic Plan Bond Issues (1993- 2000) TOTAL Bonds Bonds (in millions) Pinellas County Gas Main & Service Extensions Pasco County Gas Main & Service Extensions Develop New Gas Markets (NG Vehicles & Gas A /C) Subtotal Net Capital Requirements for Strategic Plan Expansion Allowance for Additional Authorized Expansion Projects Allowance for Bond Expenses & Debt Service Reserve Fund Total Gas Revenue Bond Issues Projected Pasco County Territorial Dispute $12.93 $5.67 $ 7.26 9.56 -0- 9.56 2.24 1.34 .90 $24.73 $7.01 $17.72 5.00 -0- 5.00 27 1.24 4.03 $35.00 $8.25 $26.75 On June 21, 1994, Peoples Gas System, Inc., petitioned the Florida Public Service Commission (FPSC) to resolve a territorial dispute between Peoples Gas System ( "Peoples ") and the Clearwater Gas System relating to the Pasco County service territory. Peoples has asked the FPSC to deny the System the Pasco county territory and to certify the area for Peoples. The City intends to vigorously defend its right to serve this area which is .immediately adjacent to 17 the City's existing service territory and an extension thereto. Resolution of this territorial dispute in favor of the City must occur before the issuance of Additional Parity Obligations may be undertaken to fund that project. Manufactured Gas Plant Clearwater Gas System operated a manufactured gas plant at the site of the System's existing Administrative Offices & Operations Center at 400 North Myrtle Avenue near downtown Clearwater from the mid- 1920's to approximately 1959. The plant has since been dismantled and the gas holder was removed around 1984. On October 17, 1988, the Florida Department of Environmental Regulation (FDER) completed a preliminary assessment at the site and concluded that a site screening investigation was warranted. The U.S. Environmental Protection Agency (EPA) retained a contractor to conduct this investigation in 1990 and determined that there was "no evidence that on -site or near off -site disposal of gasifica- tion by- products ever took place." However, due to "poor housekeeping and waste disposal practices at other gasification plants," they concluded that "gasifica- tion by- products may also be present at this site." EPA recommended a medium priority for a FDER site screening investigation. In December 1993 the Florida Department of Environmental Protection (FDEP) informed the City that they were ready to proceed with the site investigation. The City has retained a licensed environmental contractor who is experienced in manufactured gas plant site investigations to perform a Contamination Assessment Plan for the former gas plant site. Currently under negotiation are the terms of an Inter - governmental Agreement between the City and the FDEP to establish the parameters of the site assessment. The City does not believe that the site will require extensive clean -up; however, the extent of such clean -up (if any is required) will not be known until the Contamination Assessment Plan is concluded. ADDITIONAL PROJECTS The following chart shows the portion of the current capital components for the proposed expansion project to be funded by proceeds from debt issued on parity with the Series 1994A Bonds of Additional Parity Obligations within the next year: Pasco County Gas Main and Service Extensions Amount (in millions) - Trunk Main Line Extension $5.40 - Commercial and Residential Main and Service Line Extensions 1.40 - Engineering Design Services and other Consultants .20 - Pasco Vehicles (3) and Computers (2) .06 TOTAL $7.06 MUNICIPAL BOND INSURANCE The following information has been furnished by Municipal Bond Investors Assurance Corporation (the "Insurer ") for use in this official Statement. Reference is made to Appendix E for a specimen of the Insurer's policy. The Insurer's policy unconditionally and irrevocably guarantees the full and complete payment required to be made by or on behalf of the City to the Paying Agent or its succensnr of an amount equal to (i) 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 1994A Bonds as such payments 18 shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the Insurer'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 (ii) the reimbursement of any such payment which is subsequently recovered from any owner of the Series 1994A Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference "). The insurer's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Series 1994A Bond. The Insurer's policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of Series 1994A Bonds upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii) above. The Insurer's policy also does not insure against nonpayment of principal of or interest on the Series 1994A Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 1994A 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 the Insurer from the Paying Agent or any owner of a Series 1994A Bond the payment of an insured amount for which is then due, that 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 succes- sor, sufficient for the payment of any such insured amounts which are then due. Upon presentment and surrender of such Series 1994A Bonds, or presentment of such other proof of ownership of the Series 1994A Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 1994A Bonds as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Series 1994A Bonds in any legal proceeding related to payment of insured amounts on the Series 1994A 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 1994A 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 of MBIA Inc., a New York Stock Exchange listed company. MBIA Inc. is not obligated to pay the debts of or claims against the Insurer. The Insurer is a limited liability corporation rather than a several liability association. The Insurer is domiciled in the State of New York and licensed to do business in all 50 states, the District of Columbia and the Commonwealth of Puerto Rico. As of December 31, 1992, the Insurer had admitted assets of $2.6 billion (audited), total liabilities of $1.7 billion (audited), and total capital and surplus of $896 million (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of December 31, 1993, the Insurer had admitted assets of $3.1 billion (audited), total liabilities of $2.1 billion (audited), and total capital and surplus of $978 million (audited) determined in accordance with statutory accounting practices prescribed or permitted by insurance regulatory authorities. Copies of the Insurer's year end financial statements prepared in accordance with 19 r M statutory accounting practices are available from the Insurer. The address of the Insurer is 113 King Street, Armonk, New York 10504. Moody's Investors service rates all bond issues insured by the Insurer "Aaa" and short term loans "MIG 1," both designated to be of the highest quality. Standard & Poor's Ratings Group, a division of McGraw Hill ( "Standard & Poor's "), rates all new issues insured by the Insurer "AAA" Prime Grade. The Moody's Investors Service rating of the Insurer should be evaluated independently of the Standard & Poor's rating of the Insurer. No application has been made to any other rating agency in order to obtain additional ratings on the Series 1994A Bonds. The ratings reflect the respective rating agency's current assessment of the creditworthiness of the Insurer and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 1994A 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 price of the Series 1994A Bonds. The insurance provided by the Municipal Bond Insurance Policy is not covered by the Florida Insurance Guaranty Association created under Chapter 631, Florida Statutes. THE CITY AND PINELLAS COUNTY The City is a municipal corporation organized and existing under the laws of the State of Florida. The City is located in the middle of the west coast of Florida on the Gulf of Mexico and has a population of 100,768 as of April 1, 1993. Its City limits comprise approximately 32 -1/2 square miles of land and 8.5 square miles of waterways and lakes. The City is governed by a City commission and operates under a commission - Manager form of government. The City Commission appoints a full -time City Manager and a full -time City Attorney. A full -time Director of Finance has the responsibility for all internal auditing and financial record keeping operations of the city, and is appointed by the City Manager. Also, an internal audit director is appointed by the City Manager and serves full time. The City is primarily a resort and residential community. The City has many recreational facilities including tennis, golf, boating, fishing, water sports, and recreational paths. During the winter months, the hotels, motels, and restaurants fill with visiting tourists and winter residents. The City offers over 42 acres of public beach front. The City of Clearwater and the other municipalities served by the System are located in Pinellas County, Florida. Pinellas County is the second smallest county in the state in land mass, but is the fourth most populated county in Florida and the most densely populated with nearly 864,953 residents. Major private employers in Pinellas County include an electric utility holding company, a television merchandiser, several hospitals, a newspaper publisher, and a retailer's corporate headquarters. Tourism is the largest industry in Pinellas County. Further information on the City is contained in Appendix A - "GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA." 20 COMBINED DEBT SERVICE REQUIREMENTS Set forth below are the amounts of principal and interest on the Series 1991 Bonds and the Series 1994A Bonds and the combined debt service of each in the bond years indicated. Bond Year Ending Series 1991 Bonds Series 1994A Bonds Combined Sept. 1 Principal Interest Principal Interest Debt Service 1995 $ 150,000 $ 488,020 1996 240,000 479,620 1997 255,000 465,820 1998 270,000 451,030 1999 285,000 435,100 2000 300,000 418,000 2001 320,000 399,700 2002 340,000 379,860 2003 360,000 358,440 2004 380,000 335,400 2005 410,000 310,700 2006 435,000 284,050 2007 465,000 255,775 2008 490,000 225,550 2009 525,000 193,700 2010 560,000 159,575 2011 595,000 123,175 2012 635,000 84,500 2013 665,000 43,225 2014 2015 2016 2017 2018 2019 2020 2021 20'22 2023 2024 Total 21 HISTORICAL COVERAGE OF MAXIMUM DEBT SERVICE BY THE SYSTEM NET REVENUES Fiscal Year Ending 1991 1992 1993 Gross Revenues (1) $9,865,958 $11,586,605 $12,562,105 Cost of operation and Maintenance (1) 7,977,703 8,116,051 9,364,981 Net Revenues 1,888,255 3,470,554 3,197,124 Projected Maximum Annual Debt Service (2) 1,217,373 1,217,373 1,217,37& Coverage of Projected Maximum Annual Debt Service by Net Revenues 1.55x 2.85x 2.63x (1) City of Clearwater, Annual Financial Reports (Audited) (2) Assumes $8,110,000 in par amount of Series 1994A Bonds at 6.28% true interest Cost. RATINGS Moody's Investors Service, Inc. and Standard & Poor's Corporation have assigned the Series 1994A Bonds ratings of "A" and "BSS ", respectively, relating to the System, Such ratings do not reflect the presence of the municipal bond insurance policy which will be issued by the Insurer if so designated by the winning bidder. Such ratings reflect the views of the rating agencies and an explanation of the significance of such ;ratings may be obtained only from the rating agencies furnishing the same. There is no assurance that such ratings may be continued for any given period of time or that they will not be revised downward or withdrawn entirely by such rating agencies, if in its judgment, circumstances so warrant. Any such downward revisions or withdrawal of such ratings may have an adverse effect on the market price of the Series 1994A Bonds. If the successful purchaser in the competitive bidding on the Series 1994A Bonds elects to cause the issuance of the Municipal Bond Insurance Policy referred to herein, then Standard & Poor's Corporation and Moody's Investor Services, Inc. will assign their municipal bond ratings of "AAA" and "Aaa ", respectively, to the Series 1994A Bonds with the understanding that upon delivery of the Series 1994A Bonds, a policy insuring the payment when due of the principal of and interest on the Series 1994A Bonds will be issued by the Insurer. For any additional description of ratings and their meanings, Moody's Investors Service, Inc. and Standard & Poor's Corporation should be contacted. LEGALITY Certain legal matters in connection with the issuance of the Series 1994A Bonds are subject to the approval of Bryant, Miller and olive, P.A., Tallahassee, Florida, Bond Counsel, whose Bond Counsel opinion will be available at the time of delivery of the Series 1994A Bonds. The proposed form of such opinion of Bond Counsel is attached to this official Statement as Exhibit D. certain legal matters will be passed upon for the City by Alan Zimmet, Esquire, Interim City Attorney. Mr, Zimmet has been acting as the City's attorney on an interim basis and although he has assisted in preparing and reviewing this official Statement he has not undertaken to make an independent verification of the information herein. TAX EXEMPTION The Internal Revenue Code of 1986, as amended (the "Code ") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 1994A Bonds, in order that interest on the Series 1994A Bonds be and remain excluded from grows income for purposes of federal income taxation. Non- compliance may cause interest on the Series 1994A Londs to be included in federal zz gross income retroactive to the date of issuance of the Series 1994A Bonds, regardless of the date on which such non - compliance occurs or is ascertained. These requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 1994A Bonds and the other amounts are to be invested and require that certain investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The city has covenanted in the Ordinance to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 1994A Bonds. In the opinion of Bond Counsel, assuming compliance with the aforementioned covenants, under existing laws, regulations, judicial decisions and rulings, interest on the Series 1994A Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Series 1994A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals or corporations; however, interest on the Series 1994A Bonds may be subject to the alternative minimum tax when any Bond is held by a corporation. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (before this adjustment and the alternative tax net operating loss deduction). "Adjusted Current Earnings" will include interest on the Series 1994A Bonds. The Series 1994A Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of Series 1994A Bonds. Prospective purchasers of Series 1994A Bonds should be aware that the ownership of Series 1994A Bonds may result in collateral federal income tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 1994A Bonds, (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by 15% of certain items, including interest on the Series 1994A Bonds, (iii) for taxable years beginning before January 1, 1996, the inclusion of interest on Series 1994A Bonds' in "modified alternative minimum taxable income" for purposes of the environmental tax imposed on corporations, (iv) the inclusion of interest on the Series 1994A Bonds in earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax, (v) the inclusion of interest on Series 1994A Bonds in passive income subject to federal income taxation of certain Subchapter s corporations with Subchapter C earnings and profits at the close of the taxable year, and (vi) the inclusion of interest on the Series 1994A Bonds in "modified adjusted gross income" by recipients of certain Social Security and Railroad Retirement benefits for purposes of determining whether such benefits are included in gross income for federal income tax purposes. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 1994A BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITH THEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD. During recent years legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 1994A Bonds. in some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the series 1994A Sands. Frum time to time, legislative proposals are pending which could have an effoct on both the federal tax consequences resulting from ownership of Series 1994A Bonds and their market value. No assurance can be 23 given that legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 1994A Banda. UNDERWRITING The Series 1994A Bonds are being purchased by the Underwriters from the City at an aggregate purchase price of $ (the face amount of the Series 1994A Bonds less underwriter's discount and original issue discount on certain of the Series 1994A Bonds), plus accrued interest on the Series 1994A Bonds. The Underwriters are jointly and severally obligated to purchase all the Series 1994A Bonds if any are purchased. Following the initial public offering, the public offering prices may be changed from time to time by the Underwriters. The Series 1994A Bonds may be offered and sold to certain dealers (including underwriters and other dealers depositing such Bonds into investment trusts) and others at prices lower than the public offering prices set forth on the cover page of this official Statement. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 1994A Bonds under the ordinance (and the policy of municipal bond insurance referred to herein, if any) are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified by the Federal Bankruptcy Code, the Ordinance and any policy of municipal bond insurance referred to herein may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 1994A Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency, or other similar laws affecting the rights of creditors or by such principles of equity as the court having jurisdiction may impose with respect to certain remedies which require or may require enforcement by a court of equity. LITIGATION There is no litigation or controversy of any nature now pending or threatened (i) to restrain or enjoin the issuance, sale, execution or delivery of the Series 1994A Bonds or (ii) in any way questioning or affecting the validity of the Series 1994A Bonds, the ordinance, any proceedings of the City taken with respect to the authorization, sale or issuance of the Series 1994A Bonds or the pledge or application of any moneys provided for the payment of the Series 1994A Bonds, including the Net Revenues of the System. The City is a party from time to time in various law suits involving the City generally, and believes that none of the actions currently pending will have a material effect upon the finances of the city or of the System. GENERAL PUR_AOSE FTNANCIATU STATEMENTS The excerpts from the General Purpose Financial Statements and other information of the City for the fiscal year ended September 30, 1993, are included in Appendix B to this Official Statement. Such excerpts from the City's Comprehensive Annual Financial Report, including the auditor's report thereon, have been included in this Official Statement as public documents and consent from the auditors was not requested. The auditors have not performed any services relating to, and are therefore not associated with, the issuance of the Series 1994A Bonds. 24 FINANCIAL ADVISOR The City has retained Raymond James & Associates, Inc., St. Petersburg, Florida, as financial advisor (the "Financial Advisor ") to the City in connection with the preparation of the City's plan of financing and with respect to the authorization and issuance of the Series 1994A Bonds. Although the Financial Advisor assisted in the preparation of this official Statement, the Financial Advisor has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this official Statement. MISCELLANEOUS All information included herein has been provided by the City, except where attributed to other sources. The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. Copies of all such documents referred to herein are on file with the City Clerk of the City at 112 South Osceola Avenue, Clearwater, Florida 34616. The information herein has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct. As far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact and no representation is made that any of the estimates will be realized. AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL STATEMENT The delivery of this Official Statement has been authorized by the City Commission. Concurrently with the delivery of the Series 1994A Bonds, the undersigned will furnish their certificate to the effect that, to the best of their knowledge, this Official Statement did not as of its date, and does not as of the date of delivery of the Series 1994A Bonds, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purpose for which this Official Statement is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. CITY OF CLEARWATER, FLORIDA By: Mayor- Commissioner By: City Manager 25 i- 4�< , 1. ,' , i'�% `�G� [This page intentionally left blank] ? -/ ? �/ GENERAL INFORMATION RELATING TO THE CITY OF CLEARWATER, FLORIDA Location APPENDIX A The City of Clearwater (the "City"), the county seat of Pinellas County (the fourth most populous county in Florida), is geographically located in the middle of the west coast of Florida on the Gulf of Mexico. It is situated approximately 22 miles west of Tampa and 16 miles north of St. Petersburg. Standing on the highest coastal elevation of the State, the City limits comprise approximately 32 -1/2 square miles of land and 8.5 square miles of waterways and lakes. Clearwater Beach, a corporate part or the City, is a beach community connected to the mainland by Memorial Causeway, a four -lane, toll -free drive stretching almost two miles across Clearwater Harbor. Business on Clearwater Beach is mainly tourist oriented, with hotels, motels and gift shops. Many fine homes, apartments and condominiums offer pleasant, semi - tropical island accommodations to permanent residents and winter and summer visitors.. History The area now known as Clearwater was first explored in 1528 by Pantile de Narvaez, a Spanish explorer who encountered a large tribe of Indians, which his army drove out. The Indians recaptured their territory and held it until the Seminole Wars of 1835 -42. The Indians who inhabited this area are said to have called it "Pocotopaug," meaning "clear water," for the many springs of clear, fresh water that bubbled along the shore and even below the waterline at low tide. Settlers began moving into the area around the time of the Seminole Wars. After the wars ended, the territory was opened by the Federal government for hon>,� �.,teading under the Armed Occupation Act. The first land title was granted in 1842. The early settlement, na�ited "Clear Water Harbor," was incorporated in 1897. "Clear Water" later became one word and "Harbor" was dropped in 1906 when Pinellas County was created by an act of the State Legislature. In May 1911, Clearwater became the County Seat and Clearwater was chartered as a municipality on May 27, 1915. Government and Administration Clearwater has a commission -city manager form of government. Four commissioners and a mayor - commissioner are elected at large to serve overlapping three-year terms. They appoint the city manager and the city attorney. All other administrative and professional positions are appointed by the city manager in accordance with the City's Civil Service System. The City has approximately 1,609 employees, covered by the City's Civil Service law relating to recruitment, promotion, evaluation and discipline based on merit principles. Four employee unions represent the Citys civil labor force: two units of the Fraternal Order of Police; one of the International Association of Fire Fighters; and one from the Communications Workers of America. Transportation Pinellas County and Clearwater are served by three major causeways and bridges over Tampa Flay, by U.S. 19 and 1 -275 to the north and south, by 1 -4 and U.S. 60 to the cast. State Roads 590, 080 and 55 also afford access to the City. Tampa International Airport, located approximately twenty miles from downtowns Clearwater, provides air travel access with approximately 260 national and international flights daily. Limousine and taxi service to and from the airport is available from Clearwater and throughout Pinellas County. St. Petersburg /Clearwater Internationa = irport, five miles from downtown Clearwater, offers regularly scheduled passenger service and charter an :,jecial group flights, on a more limited basis to both domestic and foreign destinations, particularly to Canada, Mexico, and Central and South America. The Executive Airpark, which is slightly over a mile from the downtown business section, provides service and maintenance for private plane owners. The airport has one 3,000 foot hard- surface runway and facilities for visiting and locally based planes. The Port of Tampa (22 miles to the cast) is the closest deep water port. The port is serviced by a variety of steamship agents and operators. The United States Coast Guard maintains an air station at the St. Petersburg /Clearwater International Airport, and a search and sea rescue cutter station on Clearwater Harbor opposite Sand Key. Gulf Coast Motor Lines provides service daily between Clearwater, St. Petersburg and Tampa and makes connections with Greyhound and Trailways Bus Lines in Tampa. Scenic tours are available via Gray Line out of Clearwater and St. Petersburg, and both Gray Line and Gulf Coast have buses for charter. Pinellas Suncoast Transit System maintains 54 routes in 19 municipalities in Pinellas County. Utilities, Public Service and Community Facilities The City owns and operates its own water, sewer, gas and solid waste systems. Water is obtained from 18 deep wells owned and operated by the City and from wholesale purchases from the Pinellas County Water System. Sewage is treated at three pollution control sewage treatment plants with a total capacity of 28.5 million gallons per day. Natural gas, purchased under wholesale agreements with Florida Gas Transmission Company, is distributed through 483 miles of gas mains to approximately 12,010 connections. It is the policy of the City to set rates and charges for utility and other public services so that each enterprise activity is self- sustaining. The Public Service Department maintains approximately 350 miles of paved streets, 17 miles of unpaved streets, 9 miles of alleys, 120 miles of storm sewers, 35 miles of drainage ditches and 37 ponds or lakes. Solid waste is collected City-wide on a regular basis and transported to the resource recovery plant in Pinellas County. Electric power is provided by Florida Power Corporation and telephone service is provided by General Telephone Company. Vision Cable of Pinellas, Inc. provides cable television service under a franchise with the City. Local editions of the daily St. Petersburg Times and The Tampa Tribune, plus weekly newspapers from adjacent Dunedin, Largo, Seminole and Clearwater Beach are widely distributed. The Clearwater Public Library System consists of a main library and four branches which are spread evenly throughout the community for easy access. The City offers over 42 acres of public beach front, parks, playgrounds, athletic courts and fields, pools, a 4,370 seat baseball and softball stadium, golf course, civic and recreational centers, 3.5 miles of recreational paths, boat ramps and a 210 slip yacht basin and marina. The Philadelphia Phillies conduct spring training at the municipal baseball stadium and have a long -term contract for farm club training on Clearwater's specially constructed facilities during the Winter Instructional League Program. Clearwater is the home of the Clearwater Bombers, a national amateur fastpitch softball team. Tourism The State Division of Tourism reported that approximately 41,000,000 tourists came to Florida during 1993. Approximately 3,857,118 of them visited the Clearwater /St. Petersburg area. Clearwater's Fun 'N Sun Festival each Spring attracts thousands of visitors. Education The Pinellas County School System operates 79 elementary schools, 21 middle schools and 15 high schools and 5 exceptional, 19 alternative and 11 vocational schools within the County which are attended by over 126,668 students in kindergarten through the 12th grade. Private schools and academies are also located within or near the City limits. The Pinellas County School System offers vocational and adult education at facilities in or adjacent to the City. In addition, St. Petersburg Junior College has a Clearwater campus. Eckerd College in St. Petersburg, Beacon College in Largo, Stetson University College of Law in Gulfport, the University of South Florida and the University of Tampa in Tampa offer nearby college and post - graduate education Industry, Commerce and Labor Light, clean industry is encouraged in Clearwater. In 1957, the City of Clearwater developed a 100 acre industrial park adjacent to the Clear-water Airpark (Executive Airport) and to the CSX Transportation Company. There is also a privately owned, 35 acre, industrial park. Large industries located near Clearwater include Honeywell, General Electric, UNISYS, Concept and Hercules Defense Electronics Systems, Inc. Pension Plan The Employees' Pension Plan and the Fireman's Pension Plan are self - administered by the City. Both plans had unfunded liabilities as of September 30, 1993, the funding of which is being amortized over a 35 year period for the Fireman's Plan, and over a 40 year period for the Employees' Plan (except for a portion of net actuarial deficiency resulting from Plan amendments approved in December 1978, and from changes in actuarial assumptions which are being funded over 30 year periods). City contributions for fiscal year 1992 -1993 were $3,322,567 to the Employees' Plan and $719,229 to the Fireman's Plan, and were in accordance with actuarially determined funding requirements. In addition, supplemental pensions exist for eligible Police and Fire employees, funded from excise taxes on gross receipts from premiums on certain insurance policies covering property in Clearwater, collected by the State and remitted to the City. Neither the City nor the employees contribute under these plans. Both plans require benefits to be adjusted to equal funds assets provided by the defined contributions. Demographic Information Last Ten Fiscal Years (a) (b) (c) (d) (e) Permanent Per Capita Median School Unemployment Year Population Income Age Enrollment Rate (01o) 1984 93,648 $14,601 44,7 10,349 4.6% 1985 95,330 15,902 453 10,432 5.7 1986 97,882 17,039 Not avail. 10,494 53 1987 99,124 17,947 Not avail. 10,797 5.0 1988 100,202 19,317 Not avail. 10,922 4.7 1989 101,082 21,255 Not avail. 10,796 53 1990 98,784 Not avail. Not avail. 10,732 4.8 1991 99,612 21,636 42,1 11,572 6.1 1992 99,856 Not avail. 423 11,921 5.4 1993 100,857 Not avail. Not avail. 11,584 6.1 (a) 1984 -1989, U.S. Bureau or Census estimate; 1990 Census; 1991 -1993: University of Florida, Bureau of Economic and Business Research. (b) Data is for Pinellas County, but should also approximate Clearwater levels. Source of data is the U.S. Department of Commerce, Bureau of Economic Analysis. (c) Pinellas County level data, but should approximate Clearwater levels. Source of data is the St. Petersburg Times Research Bureau, 1984 -1985; 1991, 1992: U.S. Bureau of the Census. (d) 1984 -1990, Clearwater Planning Department population pro rata estimate of Pinellas County School Board County level data for public schools; 1991 -1993 Pinellas County School Board. (e) Data is for the Tampa /St. Petersburg SMSA. Published by the Florida Department of Labor and Employment Security, Property Value, Construction, and Bank Deposits Last Ten Fiscal Years Commercial Construction Residential Construction Miscellaneous Construction(a) Fiscal Number Number Number Bank Deposits(b) Year of Permits Value of Permits Value of Permits Value (in thousands) 1984 310 $ 30,363,076 935 $103,345,695 4,590 $15,712,857 $11,574,449 1985 569 51,469,008 1,267 54,011,436 4,005 5,934,005 13,082,104 1986 597 61,726,247 1,244 83,486,773 3,005 6,766,508 13,685,840 1987 626 42,649,623 1,378 46,939,249 4,454 9,198,587 14,981,795 1988 731 45,510,427 1,385 42,150,294 3,411 13,219,492 15,480,740 1989 705 121,554,308 1,127 37,140,105 4,326 22,579,744 17,120,300 1990 782 47,382,330 1,018 74,1.69,490 4,991 16,983,323 18,646,122 1991 026 24,250,916 1,260 34,937,357 5,906 17,452,664 20,432,162 1992 557 32,765,807 1,137 25,956,314 5,940 18,020,294 20,476,972 1993 1,693 42,051,081 3,885 29,296,168 6,799 20,113,175 N/A (a) Includes institutions, churches, seawalls, pools and non - valued building permits. (b) Includes balances in commercial, savings, savings and loan, and building and loan banking institutions for Pinellas County. Data from the St, Petersburg Times Research Bureau. 4 Ten Largest Employers In Pinellas County 1993 Number Name of Employer Tvpe of Business of Employees 1. Pinellas County School System Public education 151000 2. Pinellas County Government Government services 4,100 3. Times Publishing Co. Newspaper publishing 3,900 4. Home Shopping Network Merchandising 3,781 5. Honeywell Space Systems Aerospace, avionics 3,600 6. City of St. Petersburg City government 3,119 7. Morton Plant Hospital Hospital 3,000 8. Florida Power Corp. Utility 2,832 9. AT &T Paradyne Corp. Data communications 2,500 10. St. Petersburg /Clearwater Int'l. Airport* Airport 2,500 *Includes employees at 38 businesses. Assessed and Estimated Actual Property Valuations Last Ten Fiscal Years Assessed Valuations(") Fiscal Non- Exempt Personal Other Total Total Year Real Estate Property Property(b) Taxable Exempt(c) Total All 1,984 $2,278,052,100 $248,990,190 $510,380 $2,527,552,670 $ 883,746,177 $3,411,298,847 1985 2,446,057,910 269,949,700 944,907 2,736,952,517 923,634,695 3,660,587,212 1986 2,724,424,890 289,744,250 586,416 3,014,755,556 977,758,085 3,992,513,641 1987 3,080,652,280 313,835,680 817,629 3,395,305,589 1,001,043,393 4,396,348,982 1988 3,270,695,390 349,895,280 545,157 3,621,135,827 1,081,534,811 4,702,670,638 1989 3,388,838,210 352,914,960 484,002 3,742,237,172 1,148,090,371 4,890,327,543 1990 3,485,372,470 370,827,590 484,376 3,856,684,436 1,192,855,367 5,049,539,803 1991 3,745,222,768 378,841,070 500,188 4,124,564,026 1,232,097,193 5,356,661,219 1992 3,799,734,064 379,338,740 509,202 4,179,582,006 1,296,139,766 5,475,721,772 1993 3,789,902,836 390,841,880 569,338 4,181,314,054 1,391,537,458 5,572,851,512 (a) Valuation is established by the County Property Appraiser as of December 31 of the calendar year preceding the beginning of the applicable Fiscal Year of the City that begins October 1 of the following calendar year. (b) Railroad and Telegraph Companies. (c) Includes governmental, educational, qualified religious, literary, scientific, and health care properties and special exemptions for individual property owners. Qualified property owners are entitled to a $25,000 homestead exemption based on residency requirement. 5 Property Tax Levies and Collections Last Ten Fiscal Years * Collections are reported at the gross amount before any discount allowances. Property Tax hates - All Direct and Overlapping Governments (Per $1,000 of Assessed Value) Last Ten Fiscal Years Downtown County Emergency Percent School Percent of Medical Year City Men (a) Board County District of Total Other(b) Delinquent 1984 4.3690 1.000 7.0710 4.311 Current Percent of Delinquent 185292 Collections Outstanding Taxes to Fiscal Total Tax Levy Tax Total Tax To Current Delinquent Current Year Tax Levy Collections* Collected Collections Collections Le Taxes %RW 1984 510,957,983 510,835,796 98.8895 S93,510 $10,929,306 99.74% $ 305,103 2.78% 1985 11,766,901 11,605,379 98,63 25,761 11,631,140 98.85 440,864 3.75 1986 13,442,331 13,259,621 98.64 12,077 13,271,698 98.73 611,497 4.55 1987 15,104,352 14,842,656 98.27 6,252 14,848,908 98.31 866,941 5.74 1988 18,093,427 17,855,707 98.69 77,643 17,933,350 99.12 1,027,018 5.68 1989 18,999,668 18,818,443 99.05 189,760 19,008,203 100.04 1,018,483 5.36 1990 19,676,174 19,474,325 98.97 35,223 19,509,548 99.15 1,185,109 6.02 1991 21,336,807 21,145,636 99.10 95,735 21,741,371 9955 1,280,545 6.00 1992 21,369,980 21,075,554 98.62 109,316 21,184,870 99.13 1,387,456 6.49 1993 21,408,489 20,301,860 94.83 199,638 20,501,498 95.76 1,438,116 6,72 * Collections are reported at the gross amount before any discount allowances. Property Tax hates - All Direct and Overlapping Governments (Per $1,000 of Assessed Value) Last Ten Fiscal Years Downtown County Emergency Fiscal Develop- School Transit Medical Year City Men (a) Board County District Services Other(b) Total 1984 4.3690 1.000 7.0710 4.311 .2042 .926 .6480 185292 1985 4.3030 1.000 6.8994 4.093 .3295 .932 .7452 18.3021 1986 4.4558 1.000 7.2450 4.139 .4315 .886 .6955 18.8528 1987 4.4558 1.000 75020 4.258 .4536 .931 .7013 19.3017 1988 5.0000 1.000 7.3370 4.915 .4987 .931 1.2933 20.9750 1989 5,1000 .250 7.6500 4.909 5135 .931 13775 20.7310 1990 5.1000 .860 85330 5.280 5743 1.060 .9617 22.3690 1991 5.2037 1.000 8.7660 5.234 5743 .700 1.0964 225744 1992 S.1158 1.000 8.6260 5.495 5893 .700 1.1560 22.6821 1993 5.1158 1.000 9.0000 5.417 5893 .850 1.1820 23.1541 (a) A separate taxing district established by referendum which affects only downtown properties. (b) Other includes Pinellas County Planning Council (.02$6); Juvenile Welfare Board (.6274); SW Florida Water Management District (.3220); Pinellas Anclote River Basin (.2040). 6 -r _ w Source: Pinellas County Property Appraiser City of Clearwater, Florida Ratio of Net General Bonded Debt to Taxable Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Ten Largest Taxpayers Ratio of Net Year Ended September 30, 1993 Taxable Net General Percentage Assessed to Total Bonded Debt Bonded Assessed Assessed Taxpayers Type of Business Value Value Bellwether Prop. LP Ltd. Shopping Center $ 75,074,500 1.98 % MacLean, Aubrey Shopping Center 60,646,600 1.60 John S. Taylor, III Landowner 34,226,700 0.90 Church of Scientology Conglomerate 24,366,700 0.64 Sand Key Association Ltd. Hotel 18,700,800 0.49 Sylvan Abbey Adult Congregate Facility 17,370,100 0.46 Equitel Motels 16,722,300 0.44 John Hancock Mutual Life 30.64 1988 100,202 Insurance Company Apartment Complex 13,735,800 0.36 First Florida Bank Hotel 13,631,400 0.36 MAS One LTD Partnership Office Building 13.542.000 0.36 Total 1,036,234 $288,016,900 7.58% Source: Pinellas County Property Appraiser City of Clearwater, Florida Ratio of Net General Bonded Debt to Taxable Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years (1) Gross general bonded debt less amounts on deposit in sinking funds or debt service funds. 7 Ratio of Net Net Taxable Net General General Assessed General Bonded Debt Bonded Fiscal Value Bonded To Assessed Debt Year Population 000 Debt (l) Value Per Capita 1984 93,648 $2,527,553 $4,815,155 .19% 51.42 1985 95,330 2,736,953 4,250,761 .16 44.59 1986 97,882 3,014,756 3,657,278 .12 37.36 1987 99,124 3,395,306 3,037,117 .09 30.64 1988 100,202 3,621,136 2,395,290 .07 23.90 1989 101,082 3,742,237 1,723,137 .05 17.05 1990 08,784 3,856,684 1,036,234 .03 10.49 1991 99,612 4,124,564 567,950 .01 5.70 1992 99,856 4,179,582 452,779 .01 4.53 1993 100,857 1,181,314 348,478 .01 3.46 (1) Gross general bonded debt less amounts on deposit in sinking funds or debt service funds. 7 �h City of Clearwater, Florida Computation of Direct and Overlapping Debt September 30, 1993 Principal City Amount Share of General Obligation Debt Outstanding Percent Debt City of Clearwater, Series 1978 $ 635,000 100 Pinellas County School Board 10,722,239 14.28* Total * Applicable Net Debt Percentage is based on ratio of City to County Taxable values ($ 3,789,902,836/$26,547,437,039). City of Clearwater, Florida Computation of Legal Debt Margin September 30, 1993 Assessed valuation of Non - Exempt Real Estate as of January 1., 1993 Times: Twenty Percent Limitation per City Charter Equals Legal Indebtedness Limitation 8 $ 3,789,902,836 x .20 $ 757,980,567 $ 725,000 1,531,136 $2,166,136 Debt Outstanding Subject to City's Legal Debt Margin September 30, 1993 General Obligation Bonds: 1978 Series Revenue Bonds: 1985 Public Service Tax and Bridge Revenue Bonds 1984 Water and Sewer Revenue Bonds 1988 Water and Sewer Revenue Bonds 1993 Water and Sewer Revenue Bonds 1984 Capital Improvement Revenue Bonds 1983 Parking Revenue Bonds 1991 Gas System Revenue Bonds 1985 Community Redevelopment Agency Tax Increment and Lease Revenue Bonds 1985 Community Redevelopment Agency Tax Increment Revenue Bonds Notes, Mortgages and Contracts Totals Legal Indebtedness Margin 9 Net Debt Less Sinking Subject to Gross Debt Fund Assets Limitation $ 635,000 $ 286,522 $ 348,478 5,215,000 2,469,845 2,745,155 4,355,000 3,690,616 664,384 26,565,063 5,596,884 20,968,179 53,445,004 4,532,734 48,912,266 128,000 -- 128,000 455,000 325,794 129,206 7,680,000 721,030 6,958,970 1,625,000 607,766 1,017,234 580,000 435,000 145,000 9,462,093 685,435 8,776,658 $110,145,156 $19,351,626 $ 90,793,530 $667,187,037 [This page intentionally left blank] LL /i Y a; :�. �. ■ � , —+ a �' ��� e; [This page intentionally left blank] -. 1 coopers�0�t�co�ni�caccou�tal�s &L Y brand REPORT OF INDEPENDENT ACCOUNTANTS The Honorable Mayor - Commissioner City Commissioners, and City Manager City of Clearwater, Florida We have audited the accompanying general purpose financial statements and the combining and individual fund and account group financial statements and schedules of the City of Clearwater, Florida, as of September 30, 1993, and for the year then ended, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Clearwater, Florida, as of September 30, 1993, and the results of its operations and the cash flows of its proprietary and similar trust fund types for the year then ended, in conformity with generally accepted accounting principles. Also, in our opinion, the combining and individual fund and account group financial statements and schedules referred to above present fairly, in all material respects, the financial position of each of the individual funds and account groups of the City of Clearwater, Florida, as of September 30, 1993, and the results of operations of such funds and the cash flows of individual proprietary and similar trust funds for the year then ended, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole and on the combining and individual fund and account group financial statements and schedules. The required supplemental schedule for the defined benefit pension plans is not a required part of the general purpose financial statements, but is supplemental information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplemental information. However, we did not audit the information and express no opinion on it. The supplemental schedules listed in the table of contents and the information presented in the statistical section are presented for the purposes of additional analysis and arc not a required pan of the general purpose financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements, and accordingly, we express no opinion on it As discussed in Note 15 to the general purpose financial statements, the City is a defendant in a lawsuit alleging violations of the Federal Age Discrimination in Employment Act, as well as a matter alleging a civil rights violation involving the City Police Department. The ultimate outcome of this litigation cannot presently be determined. Accordingly, no provision for any liability that may result upon adjudication has been made in the accompanying financial statements. Tampa, Florida ;.larch 19, 1994 1 d_ , CITY OF CLEARWATER, FLORIDA COMBINED BALANCE SHEET — ALL FUND TYPES AND ACCOUNT GROUPS SEPTEMBER 30, 1993 W_ ITH COMPARATIVE TOTAL FIGURES FOR 1992 Governmental Fund Types Special Debt General Revenue Service Capital Projects ASSETS AND OTHER DEBITS Cash on Hand and in Banks $ 20,295 Equity in Pooled Cash and Investments' 9,082.171 10,678,713 1,681,235 27,393,797 Cash with Escrow Agent 4,211 Investments 285,077 Receivables (Net Where Applicable, of Allowances for Estimated Uncollectibie Amounts): Accounts and Contracts 944,227 Mortgages, Notes and Other Loans 61,565 Accrued Revenues 1,458,303 5,000 7,952 Interest and Dividends Rehabilitation Advances Delinquent Property Taxes 493,020 41,946 Other Due from Other funds 15,000 Due from Other Funds (Deficit in Pooled Cash) 3,917,384 Due from Other Govemmental Entities 517,869 1,306,038 24,804 Inventories, at Cost Prepaid Expenses /Expenditures and Other Assets 14,877 Restricted Assets: Equity in Pooled Cash and Investments Due from Other Funds Due from Other Governmental Entities Investments, At Cost or Amortized Cost Interest Receivable Advances to Other Funds 45,324 Deferred Charges Property, Plant and Equipment (Net of Accumulated Depreciation) Amount Available in Debt Service Funds Amount to be Provided for Retirement of General Long -Term Debt Amount to be Provided for Compensated Absences S 1Z.591,086 12,093,262 1,978,A75 31,335,585 #Includes nonexpendable trust fund cash and cash equivalents of £61,812 for 1993 and $50,940 for 11992. See accorripanyng notes to Financial Statements. N Page 1 of 2 5,631,582 Fiduciary Totals Proprietary Fund Types Fund Type Account Groups (Memorandum Only) 3,342,817 General General Internal Trust and Fixed Long —Term 1,346,313 Enterprise Service Agency Assets Debt 1993 1992 20.125 1,700 546,223 21,751 588,343 54,537 12,923.456 13,382,371 3,651,062' 78,792,805 • 70,640,803 395,000 140,862 4,211 4,790 174,972 202,871,947 1,797,055 203,157,024 180,522,329 5,631,582 19,434 6,595,243 6,013,990 3,281,252 3,342,817 3,222,105 1,471,255 1,346,313 2,540,191 2,540,191 3,172,654 21,751 21,751 235 534,966 533,364 395,000 140,862 535,862 174,972 12,459,383 1,797,055 14,271,440 16,846,968 3,917,384 3,746,774 554,381 2,403,092 2.466,299 936.980 166,644 1,103,624 1,205,053 14.668 27,972 57,517 229,357 22,944.012 22,944,012 27,908,516 7,248,933 7,248.933 4,990,806 769 769 141,646 6,793,961 525,350 7,319,311 7,137,341 186.904 5,743 192,647 194,393 457,657 2.651,558 3,154,539 3,023,998 1,600,468 1,800,468 1,797,127 194,169,564 11,937,991 7,000 100,478,792 306,593,347 289,932,290 1,978,475 1,978,475 2,096,574 4,862,382 4,862,382 4,832,282 3,109,875 3,109,875 2,657,968 266.142.645 30.910,618 213,060.288 100,418,792 9,950.732_ 678.542,263 634,893,484 3 ■ CITY OF CLEARWATER, FLORIDA COMBINED BALANCE SHEET — ALL FUND TYPES AND ACCOUNT GROUPS, CONTINUED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 Governmental Fund Types Special Debt Capital General Revenue Service Projects LIABILITIES Accounts and Contracts Payable $ 92,127 56,884 82,635 Deterred Compensation Accrued payroll 1,150,036 3,199 Accrued Compensated Absences Accrued Interest Payable Claims Payable Due to Other Funds Due to Other Funds (Deficit in Pooled Cash) Due to Other Governmental Entities Deposits Other Miscellaneous Payables Payable from Restricted Assets Advances from Other Funds General Obligation Bonds Payable Revenue Bonds Payable Mortgages. Notes. Loan Pool Agreements end Acquisition Contracts Payable interest Earnings Rebatabte to U,S. Treasury Deferred Revenue Total liabilities 129,184 21,271,923 5,309 178,190 5,312 4,140 637,141 2,159,278 1,407,659 41,946 3,426,768 2,443,637 21,354,558 EQUITYAND OTHER CREDITS Investment in General Feted Assets Contributed Capital Retained Earnings; Reserved for: Revenue Bond Requirements Unreserved Fund Balances: Reserved for: Prepaid Expenditures 14,877 Encumbrances 114,372 2,581,488 Debt Service Requirements 1,768,461 Capital Projects Requirements 5,313,576 Advances to Other Funds 45,324 Noncurrent Notes Receivable 48,252 Employee Retirement Special Programs 649,385 Unreserved; Designated for Special Programs 1,090,487 Designated for Debt Service 209,994 Designated for Capital Projects Appropriations 791,205 7,399,939 Undesignated 8,989,745 1,756,720 Total Retained Earnings/ Fund Balances 9,164.318 9,649,625 1,978,475 9,981,427 Total Equity and Other Credits 9,164,318 9,649,625 1,978,475 9,981,427 12 093,262 1.978.475 31,335.985 See accompanying notes to Financial Statements 4 9 Page 2 of 2 Fiduciary Totals Proprietary Fund Types Fund Type Account Groups (Memorandum Only) General General Internal Trust end Fixed Long -Term Enterprise Service Agency Assets Debt 1993 1992 2,453,139 1,526,619 227,354 4,438,758 4,543,662 12,261, 902 12,261, 902 10,1 19,112 1,081,617 454.223 2,699,075 2,446,413 3,109,875 3,109,875 2.657,968 83,004 37,744 120,748 57,805 6,655,168 6,655,168 4.724,649 119,2156 21,520,373 21,837,774 1,415,395 2.501,989 3,917,384 3.746,774 183,499 294,465 36,070 52,968 98,490 83,629 91,461 91,461 35,888 7,562,720. 7,562,720 7,011,514 358,120 3,154,539 3,023,998 635,000 635,000 725,000 98,146,409 3,929,336 102,075,745 98,998,323 669,958 6,447,021 2,276,521 9,393,500 10,603,364 1,083,295 1,083,295 1,083,295 1,449,605 798,946 113,008,993 17,632,764 12,633,685 9,950,732 180,451,137 172,782,579 100,478,792 100,478,792 95,141,654 88,431,943 4,590,923 93,022,866 83,606,335 16,693,043 531,093 17,224,136 19,213,793 48,008,866 8.156,038 56,164,904 52,362,902 14,877 13,174 2,695,860 1,637,387 1,768,4 81 1,902,130 5,313,576 5,336,704 45,324 60,324 48,252 66,397 196,943,183 196,943,183 175,719,437 649,385 485,091 1,090,487 578,0^99 299,994 194,444 8,191,144 9,406,743 3,483,420 14,229,885 16,385,391 64,701,909 8.687,131 200,426,603 304,589,488 283,362,916 153,133,652 13,276,054 200,426,603 100,478,792_ 498,091,146 462,110,905 266,142.845 30.910.818 213.060288 100,478 792 __9 678.542.283 634.893.484 CITY OF CLEARWATER, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — ALL GOVERNMENTAL FUND TYPES YEAR ENDED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 General Revenues: S 34,821,085 Taxes 2,141,737 Licenses, Permits, and Fees 10,130,427 lntergovemented Revenues m Charges for Services: 4,663,688 Administrative Charges to Other Funds Other Charges 842.168 1,543,066 Fines, Forfeitures, and Penalties 1,232.994 Miscellaneous Revenues 55,375.158 Toted Revenues Expenditures: Current 6,710,1 12 General Government 28,542.330 Public Safety 1'414'236 Physical Environment 4,625,720 Transportation 657' Economic Environment 856,016 Human Services 11,891,579 Culture and Recreation Capital Outlay Debt Service: Principal Retirement 99'813 interest and Fiscal Charges Total Expenditures 54,247.610 Excess (Deficiency) of Revenues 1,127,548 Over Expenditures Other Financing Sources (Uses): Proceeds of indebtedness 9'220'211 Operating Tranfers In (3' ) Operating Transfers Out (86,019) Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures 1'041'529 and Other Financing Uses Fund Balances, Beginning of Year 11,065,So3 (2,442'7741 Residual Equity Transfer Out 5 9.164,318 Fund Balances, End of Year See accompanying notes to Financial Statements. Totals Special Debt Capitol (Memorandum Only) Revenue Service Projects 1993 1992 1,681,182 36,502,267 35,320,118 868,312 3,010,049 3,267,159 7,175,202 228,290 17,533,919 16,554,256 4,663,681 4,492,640 842,168 1,108,563 222,031 1,765,097 1,709,010 1,755,081 130,517 41,193 3,159,785 5,126,454 11,701:808 130,517 269,483 67,476,966 67,578,200 332,930 7,043,042 7,008,971 201,303 28,743,633 27,830,892 13,941 1,428,177 1,434,840 4,625,720 4,946,295 396,219 704,023 1,041,651 656,016 436,002 49,824 11,941, 403 12,127, 429 136,918 7,158,181 7,295,099 9,791,407 918,675 918,675 806,404 501,813 601,626 587,270 1,131,135 1,420,488 7,158,181 63,957,414 66,011,161 10,570,673 (1,289,971) (6,888,698) 3,519,552 1,567,039 830,676 830,676 464,447 718,662 1,171,872 8,276,922 13,387,667 8,689,210 (7,553,457) (219,066) (11,078,753) (6.004,945) (6,834,795) 1,171,872 8,888,532 3,139,590 3,148,712 3,735,878 (118,099) 1,999,834 6,659,142 4,715,751 11,470,398 2,096,574 8,208,903 32,841,438 29,258,041 (5,556,651) (227,310) (8,726,735) (1,132,354) 9.649,62,5_ 1,978,475 9,981.427 30,773,845 32,841.438. REVENUES; Taxes Licenses, Permits, and Fees Intergoysrnmental Charges for Services: Administrative Charges to Other Funds Other Charges Fines, Forie'rhxes, and Penalties Miscellaneous Revenues Total Revenues CITY OF CLEARWATER COMBINED STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCE — BUDGET AND ACTUAL (NON —GAAP BUDGETARY BASIS) — GENERAL AND SPECIAL REVENUE FUND TYPES YEAR ENDED SEPTEMBER 30, 1993 EXPENDITURES: General Fund* Currant Veriancs 1e2,633 9.277 Favorable Budget Achrnl (Uraavorahle) 2 34,507,150 34,821,085 313,935 2,008,700 2.141,737 133,037 9,920,170 10,130,427 210.257 4,889.580 4.583,681 (5.879) 915,810 842.188 (79.642) 1.484,540 1,543.066 58,526 1.396.590 1.232,994 1183.50 54,902,520 5513756158 4720638 EXPENDITURES: Currant 172.110 1e2,633 9.277 City Commission 1.656,150 1.595,562 60,588 Administration 847,130 901,980 (54,850) Legal 531,800 525,737 5.883 City Clerk 1,763.505 1,722,871 40,034 Administrative Se+vices 809,380 805,917 3,443 Human Resources 1,542,700 1,513,249 29,451 Non — Departmental 18.538,880 18,144,737 394,143 Police 9.140,750 9,002,884 137,880 Fire 6,115,877 5,942,770 172,907 Public Waft 9,067,826 8,975,979 91,847 Parks and Recreation 2,589.490 2,579,885 9,825 Library 2,357,860 2,312,915 44,745 Planning and Development Downtown Development Board Community Redevelopment Agency Capital Outlay - Total Expenditures (Budgetary, Basis) 55,132,838 54,187,079 045,759 Excess of Revenue Over Expenditures (2=31 8) 1.188,079 1,418,307 (Budgetary Basis) OTHER FINANCING SOURCES (USES): 3'220'211 48,671 Operating Transfers In 6,486,540 (6,486.398) (3.(88.01 3.280,108 Operating Transfers. Out (3.294.858) (88,019) 3.208.839 Excess (0eficiancy) of Revenues and Other Financing Sources (3,525,178) 1,102,080 A,827,238 Over Expenditures and Oer Financing Uses (Budgetary Basis) th Excess of Revenues and Other Financing Sources Ova Exp4nditures and Other Financing Uses fee Non — Budgeted Funds Encumbered Purchase Orders, Beginning of Year Encumbered Purchase Orders, End of Yea( Excess (Deficiency) of Ravenues and Other Financing SOutc0s Oval Expendrhxes and other Financing Uses (GAAP Basis) Fund Balances, Beginning of Year Residual Equity Trandw Out Fund Balancer. End of Year • See Note 1 O SN accompanying rebtas to Financial Statements (174,903) (174,903) 114,372 114.372 (3,525,176) 1,041,529 4,588,705 11,085.543 11,065,563 (2.942.774) (2.042,774) 9,284 X18 1827 Q31 Special Revenue Fund Types* 1.556,428 .1,022,038 Variance 10,134,863 Favorable Budget Actual (Urfavorab)e) 1.,675,633 1.681,182 5,549 790,000 550,592 (239.408) 6,429,829 6.346,661 (83,168) 534,390 1.556,428 .1,022,038 9.429,852 10,134,863 705.011 140,000 104,040 35,951 173.792 151,827 21,065 30.015 40,217 (10,202) 70,000 67,517 2,483 413.807 363,010 50,197 9,016.045 9.771,253 755,208 18,340,099 16,477,088 270,428 270,428 4,683,681 (13,848,020) (7,001,488) 6.846,532 (13,577,592) (6,731,060) 6,846,532 (4,581,547) 3,040,193 7,601,740 695,685 605,685 (4,561,547) 3,795,878 E,297,425 11,470,998 11,470,398 (S,swasi} (5,554.651 .0.9-8-51 2.24077! 9 Totals emarandum On 64,332,372 65,510,021 VarianQG - 172,110 162,833 Favorable Budget Actual (Unfavorable) 36,182,783 36,502,267 319,484 2,708.700 2,102,320 (106,371) 18,340,099 16,477,088 127,080 4,669,560 4,683,681 (5,879) 915,810 842,168 (73,642) 1,484,540 1,543,068 58,526 1,930,980 2,789,422 858,442 64,332,372 65,510,021 1,177,649 172,110 162,833 9,277 1,706,150 1,699,611 96,539 847,130 901,980 (54,850) 531,600 525,737 5,863 1,763,505 1,722,871 40,634 809,360 805,917 3,443 1,542,700 1,513,249 29,451 18,538,880 18,144,737 394,143 9,140,750 9,002,864 137,886 6,115,677 5,942,770 172,907 9,067,826 8,975,979 91,847 2,589,490 2,579,665 9,825 2,357,560 2,312,915 44,745 173,792 151,827 21,965 30,015 40,217 (10,202) 70.000 67,517 2,483 55.546,645 54,550,089 - 995,956 8,785,727 10,950,332 2.173,605 3,441,968 3,490,639 48,571 (20,314,418) (10,307,718) 10,006,700 (16,872,450) (6,817,070) 10,055,371 (8,086,723) 4,142,253 12,228,978 695,685 005,685 (174,903) (174,903) 114,372 114,372 (8,086,723) 4,777,407 12,864,190 22,535,961 22,535,961 (8,499,425) (8.409,425) 14,442.23b 18,813.943 4,364.705 CITY OF CLEARWATER, FLORIDA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN 3,277,699 COMBINED RETAINED EARNINGS /FUND BALANCES — ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST TYPES YEAR ENDED SEPTEMBER 30 1993 WTTH COMPARATIVE TOTAL FIGURES FOR 1992 (494,141) interest Expense and Fiscal Charges Proprietart Fund Types Amortization of Bond Discount and Issue Costs Internal Gain on Exchange of Assets Enterprise Service Operating Revenues: $ 58,415,078 Sales to Customers 1.072.652 Service Charges to Customers 3 894 956 8,278 User Charges to Customers 2,193,632 18,511.760 Billings to Departments 1,499,404 (1,321,249) Rentals Contributions from Employees 21.000 233,481 Contributions from Employer (2,793,058) _ Earnings on Investments (2.7-72,0581 233,481 Interest on Loans 8,045,649 (1,087,768) State Tax on Insurance Premiums Intergovernmental Revenues (9'145'536) Miscellanecus Revenues 64,882,090 18,511,760 Operating Expenses: 12,650,422 5,183,550 Personal Services 11,351,705 1,578,053 Purchases for Resale 1,922,684 453,816 Operating Materials and Supplies Benefit Payments Refunds 2,622,861 132,267 Transportation 1,479,871 280,683 Utility Service 3,817,836 Solid Waste Dumping Charges 5,944,248 2,766,953 Depreciation 6,465,923 135,560 Interfund Administrative Charges 5,615,201 0.688,499 Other Current Charges 51,870,751 20.419,381 13,011,339 (1,907,621) Operating Income (Loss) Nonoperating Revenues (Expenses): 3,277,699 866,594 Earnings on Investments (5 797 317) (494,141) interest Expense and Fiscal Charges (162.586) (11,930) Amortization of Bond Discount and Issue Costs 217,571 Gain on Exchange of Assets Losses on Sale of Assets (269 184) Losses from Writedowns and Replacements of Fixed Assets 99,484 Recycling Program Incentive Grant 658,272 8,278 Other 2,193,632 586,372 10,817,707 (1,321,249) Income Before Operating Transfers 21.000 233,481 Operating Transfers In (2,793,058) _ Operating Transfers Out (2.7-72,0581 233,481 8,045,649 (1,087,768) Net Income Before Extraordinary Item Extraordinary Item — Loss on Early Extinguishment of Debt (9'145'536) 21900,113 (1,087,768) Net income Retained Earnings /Fund Balance. Beginning of Year 61,801,796 9,774,899 Residual Equity Transfer In (Out) Retained EarninostFund Balance, End of Year See accompanying notes to Financial Statement.&, 10 .{ c.f„ ri e! � Totals Fiduciary Fund Types (Memorandum Only) Pension Non - Expendable Trust Trust 1993 1992 58,415,078 53,958,329 1,072,652 856,170 3.894,956 3,528,216 18,511, 760 18,959, 386 1,499,404 663,387 3,089,147 3,089,147 3,159,960 4,041,796 4,041,796 4,271,170 20,332,894 3,154 20,336,048 20,092,054 25.920 25.920 29,797 897,003 897,003 863,987 106,778 106,778 16,637 3,553 37,000 40,553 30,904 28,364, 393 172:852 111,931,095 106.429,997 17,833,972 17,568,098 12,929, 758 12,751,145 2,376,500 2,298,675 5,937,761 5,937,761 6,112,292 329.485 329,485 225,334 2,755,128 3,034,795 1,760,554 1,679,126 3,817,836 3,648,614 8,711,201 8.321,374 6,601,483 6,214,856 873,401 144,441 16,521, 542 13,829,107 7,140,647 144.441 79,575, 220 75,W3,416 21, 223, 746 28.411 32.355,875_ 30,745, 581 4,144, 293 4,237,988 (6,291,458) (5,769,827) (174,516) (173,770) 217,571 (8195 (1,606) (269,184) 142,089 99,484 230,036 666,550 401,557 (1,607,260) (942,488) 21,223,746 28,411 30,748,615 29,804,093 229,663 484,144 537,771 (2,793,058)_ (3,222,036) _ 229.663 (2,308,914) (2,664,265) 21,223,746 258,074 28,439, 701 27,119,828 (5,145,536) 21,223,746 258,074 23,294,165 27,119,828 175,719 ,437 3,225,346 250,521,478 224,124,638 22,988 14619_43_183 w3 d83 A2Q_ 273.815_643_ 250,621,47 CITY OF CLEARWATER FLORIDA COMBINED STATEMENT OF CASH FLOWS — Purchase of Investment Securities ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS Interest on Investments ' YEAR ENDED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 72'840 Proprietary Fund Types 7037 8,713 Proceeds from the Sales and Maturities of Investments Internal Enterprise Service Cash Flows from Operating Activities: Net Cash Provided in Investing Activities 3,088,757 Cash Received from Customers 5 64•544•364 97,790 18,511,760 Cash Received from Otter Funds Cash and Cash Equivalents at Beginning of Year 31.958,268 Principal Collected on Loans and Advances Cash and Cash Equivalents at End of Year i 35.88.7_.593 Grant Revenue See accompanying notes to Financial Statements. Interest Earnings on Loans and Investments 12 Cash Disbursed for Additional Loans and Advances (21,952,940) (8,928,784) Cash Payments to Suppliers (12,673,631) (5,196,497) Cash Payments to Employees (10,428,279) (1,093,917) Cash Payments to Other Funds 560,955 168.553 Other Revenues Net Cash Provided (Used) by Operating Activities 20,148,259 3,459,115 Cash Flows from Noncaphal Financing Activities: 233,481 Operating Transfers In 21,000 Operating Transfers Out (2,793,058) Contributions to Other Funds Grant Revenue 70,026 Insurance Proceeds (11,055) Interest Paid Loans (to) from Other Funds, Net (384,131) 534' 495 Net Cash Provided (Used) by Noncaphal Financing Activities (3,086,163) 756,921 Cash Flows from Capital and Related Financing Activities: Principal Payments on Debt (3,166,515) (2,060,720) Interest Paid (4,319,473) (493,801) Acquisition of Faced Assets (17,379,573) (718,237) Proceeds from Sales of Assets 219'200 53'054 Proceeds from Issuance of Debt 53,210.440 Cash Deposited with Escrow Agent for Bond Defeasance (53,210,440) Payment of Bond Issue Costs (773,498) Contributions Other Funds 8,726,735 Other Governmental Entities 405,022 Property Owners 76,316 Developers Net Cash Used for Capital and Related Financing Activities 208,458 (16,222,528) (3,000,504) Cash Flows from Investing Activities: Purchase of Investment Securities (265,216) 866,599 Interest on Investments ' 3,279,836 72'840 Cash Received on Receivables 7037 8,713 Proceeds from the Sales and Maturities of Investments Interest Rebatable to the U.S. Treasury 948'152 Net Cash Provided in Investing Activities 3,088,757 Net Increase in Cash and Cash Equivalents 3,928,325 2,163,684 Cash and Cash Equivalents at Beginning of Year 31.958,268 11'220'387 Cash and Cash Equivalents at End of Year i 35.88.7_.593 13.384.071 See accompanying notes to Financial Statements. 12 i ,ie 1 012 Fiduciary Fund Type Totals Non— (Memorandum Only Expendable Trust 1993 1992 64,544,364 57,892,717 18,609,550 18,958,143 136,285 136.285 53,012 37,888 37,888 50.863 29,074 29,074 15,836 (307.303) (307,303) (281,063) (94,735) (30,976,459) (29,651,482) (17,872,128) (17,332,607) (11,522,195) (10.583,870) 729,508 1,759,699 (198,791) 23,408, 583 20.881, 248 229,663 484,144 536,053 (2.793,058) (3,222,036) 53,169 70,026 254,992 35,750 r 150.364 2,949.577 229,663 (2,088,524) 607,505 (5,227,235) 5 (4,845,918) (4,813,274) (5,227,860) (18,097,810) (16,695,295) 219,200 152,025 53,263,494 2,768,350 (53,210,440) (773,498) 8,726,735 1,080, 206 405,022 485,229 76,316 70,615 208,458 698,981 (19,223,032) (21.513,667) M (265,216) (496,978) 4,146,435 4,231,252 72,840 82,850 (159,583) 4,036,909 3,574,691 30,872 61133,936 3,549,777 50,940 46,866.282 43,318,505 81.812 53,002,218 46,6W.282 13 CITY OFCLEARWATER, FLORIDA COMBINED STATEMENT OF CASH FLOWS — ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS YEAR ENDED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Other Revenue from Nonoperating Section of Income Statement Depreciation Provision for Uncollectible Accounts Amortization Miscellaneous Expense Change in Assets and Liabilities: Decrease (increase) in Accounts Receivable (increase) in Loss Escrow (Increase) in Mortgage Loans Receivable Decrease (Increase) in Emergency Housing Loans Receivable (increase) in Due from Others Decrease (increase) in Amount Due from Other Governmental Entities Decrease (Increase) in Inventory Decrease (increase) In Prepaid Expenses Decrease (increase) in Property Held for Resale Increase in Accounts and Contracts Payable Increase (Decrease) in Rehabilitation Advances Payable Increase (Decrease) in Deposits Increase (Decrease) in Accrued Payroll Total Adjustments Net Cash Provided (Used) by Operating Actviti es See accompanying notes to Financial Statements. Proprietary Fund Types Internal Enterprise Service $ 13,011,339 (1,907,621) 658,272 8,278 5,944,248 2,766,953 154,85'7 16015W 591,423 2,571,218 (529,386) 129,691 130,110 (255,000) (64,159) 101,472 (43) 12,957 16015W 102,891 2,571,218 34.235 130,110 (14,947) 7.136,920 5.366,736 5 20,148,259 3.459.115 � - / rj � 14 +� P,.,,a 2 of 2 Fiduciary t; fund Type Totals Non— _ (Memorandum Only) Expendable Trust 1993 1992 28,411 11,132,129 9,427,873 i 666,550 365,807 8,711,201 8,321,374 154,857 207,250 3,822 3,822 73,135 591,423 (399,695) (728,406) (255,000) (65,000) (142,679) (142,679) (191,866) (21,516) (21,516) 765 (105,890) (105.890) (30,185) r (64,159) 1,292,705 101,429 (191,681) 173,543 (168,625) (7,000) (7.000) 45,000 3,151 2,677,260 2,416,671 42,910 42,910 (14,666) $4,235 (114,393) 115,163 235,490 p (227,202) 12,276,454 11,453,375 (198,7911 23.408,583 20,881,248 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Note 1. Summary of Significant Accounting Policies ........... • .................... i8 A. Reporting Entity ....................... .............................18 B. Fund Accounting: ........... . .......... 19 r,nvarnmontn1Funds . - - - - - � ............ .............................19 Proprietary Funds ................ ............................... ..20 Fiduciary Funds ....................... .............................21 Account Groups ...................... .............................21 C. Pooled Cash and investments ...... ............................... ... 22 D. Inventories ........................... .............................24 E. General Fund Administrative Charges ..... ............................... 24 F. Accrued Vacation and Sick Leave ..................... 24 G. Budgets and Budgetary Accounting ...... ............................... 25 H. Self Insurance Program ................. .............................26 1. Statements of Cash Flows ................ . ........................... 27 J. Capitalization of Interest .............................................. 27 K. Application of FASB Pronouncements to Proprietary Funds ................... 27 LComparative Data .......... ............................... ........ 27 M. Combined Financial Information ...... ............................... • .. 27 Note 2. Long -Term Debt A. Summary of Transactions in Long -Term Debt .............................. 28 B. Summary of Debt Service Requirements ... ............................... 29 C. Obligations Under Lease Purchase Agreements ............................ 29 D. Long -Term Debt, General Government .... ............................... 29 E. Long Term Debt, Proprietary Funds ...... ............................... 32 F. Advance Refundings ................... .............................37 G. Sinking Fund for Term Bond Maturities .... . .............................. 38 H. Long -Term Debt, Debt Service Funds ..... ............................... 38 Note 3. Restricted Assets, Proprietary Funds A. Water and Sewer Utility Fund ........... ............................... 39 B. Gas Utility Fund ....................... .............................40 C. Solid Waste Utility Fund ............... ............................... 40 D. Stormwater Utility Fund ............... ............................... 41 E. Toll Causeway and Bridge Fund ......... ............................... 42 F. Yacht Basin and Marina ......................... . .................... 42 G. Parking System ....................... .............................42 H. Pier 60 Fund .... ............................... ..................42 1. Garage Fund ........... .............................43 J. ............. Current Liabilities Payable from Restricted Assets .. I . I ................ • ..... 43 Note 4. Retirement Commitments A. Defined Benefit Pension Plans ............................ . • . , • .. • • . B. Police Supplemental Pension Fund .............................. • . • .... 48 C. Firemen's Supplemental Pension Fund ................... • ......... • .... • 49 D. Deferred Compensation Fund .............................. • • ......... 50 E. Post Retirement Benefits ....................... . ...... . . ............ 50 NoteS. Fixed Assets ........... .............. .I...''.........I.....I........ 50 Note 6, Property Taxes ............ ............................... ........... 51 16 4t i " f CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Note 7. Segment Information for Enterprise Funds .................................. 52 Note a. Interfund Payables and Receivables (Current) ............. . ................ 53 Note 9. Contingencies and Commitments .......... ............................... 53 Note 10. Individual Fund Notes A. Capital Improvement Fund ............. ............................... 54 B. Water and Sewer Utility Fund ........... ............................... 54 C. Toil Causeway and Bridge Fund ......... ............................... 54 D. Atrium Fund .......................... .............................55 E. Garage Fund .... ....................... ..........................55 Note 11. Fund Deficits ........................... .............................55 Note 12. Residual Equity Transfers Between Funds ... ............................... 55 Note 13. Contributed Capital - Proprietary Funds ..... ............................... 56 Note 14. Subsequent Events ..................... ............................... 56 Note 15. Pending Litigation ...................... ............................... 56 Note 16. Extraordinary Item .............................. 57 Note 17. Joint Venture with PACT, Inc .............. ............................... 57 17 % a P CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30.1993 Note (1) Summary of Significant Accounting Policies The accounting and reporting policies of the City of Clearwater, Florida, the City', relating to the funds included in the financial statements conform to generally accepted accounting principles of state and local governments. The following represent the more significant accounting and reporting policies of the City: Note (1A) Reporting Entity These financial statements incorporate all funds and account groups under the direct control of the City, as well as the Clearwater Downtown Development Board (DDB), and the Community Redevelopment Agency (CRA). Both the DDB and the CRA are separate entities created by the Clearwater City Commission under the provisions of Florida Statutes Chapters 70 -635 and 163, respectively. Both entities exist to promote and encourage economic development in the downtown area. The DDB has separate ad valorem taxing authority and the CRA is funded with tax increment revenues as provided by the appropriate respective enabling legislation. Management believes that both entities meet the criteria established by NCGA Statement No 3, 'Defining The Governmental Reporting Entity', and the subsequent NCGA interpretation No. 7 for inclusion in the City's Comprehensive Annual Financial Report as component units. According to Statement No. 3 and the subsequent NCGA Interpretation No. 7, the basic criteria to be used in deciding whether to include an entity is the exercise of oversight responsibility over the entity by the City's elected officials. Oversight responsibility includes, but is not limited to, the following: financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters, The fact that the DDB and the CRA both depend on City ordinances for their existence is strong evidence of oversight responsibility. Financial statements for both entities are included as separate special revenue funds in this report. Each of the following entities has been considered for inclusion in the reporting entity. At this point in time, management does not believe that any of them evidence sufficient manifestations of oversight responsibility as outlined above to justify inclusion in the reporting entity. Management continues to monitor the circumstances surrounding each agency for significant changes which would be reason to include them in a future report. Clearwater Housing Authority (CHA) This is a public housing authority created under Section 421.04 of the Florida Statutes, The agency receives the bulk of its funding from the Federal Department of Housing and Urban Development (HUD), and reports in accordance with policies and procedures prescribed by HUD, The City has no financial interdependency or accountability for fiscal matters. Even though the CHA Board members are appointed by the Mayor of Clearwater, this process does not involve the other elected City officials. Further, there is no evidence of ability to significantly influence operations of the authority. Based on the above, management believes oversight responsibility is insufficient to justify inclusion in the reporting entity. PACT. Inc. As described in detail in Nate 17, the City has an on going relationship with PACT, inc,, a corporation formed to finance, construct, and operate a performing arts center on a parcel of donated land in east Clearwater. PACT, Inc„ selects its own Board of Directors, hires its own management, makes its own operating decisions, and functions completely independent of the City. While there is some evidence of financial interdependency, there are virtually none of the other manifestations of oversight responsibility referenced above, and management continues to believe that PACT, Inc. should not be considered as a component unit of the City. Nevertheless, the relationship may be appropriately considered a joint venture as defined by NCGA Statement No 7, 'Financial Reporting For Component Units Within The Governmental Reporting Entity'. The appropriate additional disclosures, as well as a complete discussion of the specific terms of the relationship, can be found in Note 17. 18 i CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30.1993 Note (18) Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of seL'- balancing accounts which comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses as appropriate. The various funds are grouped by generic type and three broad fund categories in the financial statements, The types of funds maintained by the City are as follows: Governmental Funds The City accounts for those traditional governmental activities financed primarily from tax revenues through the use of various governmental funds. The basic distinctions of governmental funds are: Measurement Focus: Governmental funds are accounted for on a spending or 'financial flow' measurement focus. Thus, only current assets and current liabilities are generally included on their balance sheets. The reported fund balance representing net current assets reflects *available spendable resources' at the balance sheet date. The operating statements of governmental funds report the changes in net current assets (available spendable resources) during a period of time, the increases consisting of revenues and other financing sources and the decreases consisting of expenditures and other financing uses. Accordingly, long -term debt and fixed assets are segregated from the accounts of these funds and shown separately in the General Long -Term Debt and the General Fixed Assets Account Groups. Advances To Other Funds: Long -term advances receivable from other funds are reported on the balance sheets of governmental funds even though they do not constitute current assets. In order to exclude such assets from consideration as 'available spendable resources,' an equivalent amount of fund balance is designated as reserved. Encumbrances: Governmental funds employ the use of encumbrance accounting wherein purchase commitments are recorded as they are made in order to reserve that portion of the applicable appropriations. Encumbrances remaining outstanding at year -end do not constitute expenditures or liabilities. Fund balances are reserved in an amount equal to the total of outstanding encumbrances, As described in Note 1(G), the budget comparisons of certain funds are presented on the budgetary basis, which differs from generally accepted accounting principles. In these presentations, encumbrances are treated as expenditures in the year when the commitment is made rather than the year of liquidation. Depreciation: There is no depreciation recorded for the use of fixed assets in governmental funds. Basis Of Accounting: Governmental Funds use the modified accrual basis of accounting, whereby expenditures, other than unmatured principal and interest on general long -term debt, are recognized in the accounting period when the liability is incurred, if measurable, and revenues and other resources are recognized in the accounting period when they become available and measurable. Revenues are considered to meet the availability test if they are collectible within the current period or soon enough thereafter for use in payment of liabilities of the current period. Certain grants are recognized prior to receipt of the monies where appropriate under the terms of the agreerrient with the grantor. General Fund accrued revenues consist primarily of utilities service taxes and franchise taxes. 19 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 1993 Reserves: Reserves have been established for open encumbrances at year -end, for debt service requirements, in accordance with applicable bond indenture covenants, for long -term interfund advances, and in other cases to reflect legal restrictions which limit the City's spending discretion. The following are the City's governmental fund types: General Fund: The General Fund is the general operating fund of the City. All financial transactions and special assessments not properly accounted for in other funds are accounted for in the General Fund. Special Revenue Funds: Special Revenue Funds are used to account for revenues derived from specific sources. Such revenues are usually required by law or regulation to be accounted for separately and spent for particular purposes. Debt Service Funds: Debt Service Funds are used to account for the accumulation of resources for, and the payment of, interest and principal on the City's General Long -Term Debt, which is not the liability of Proprietary Funds. Capital Projects Funds: Capital Projects Funds are used to account for the acquisition and construction of capital facilities and other fixed assets. Proprietary Funds Proprietary Funds are used to account for the City's organizations and activities which are similar to those found in the private sector. The basic distinctions of proprietary funds are: Basis of Accounting: Proprietary Funds use the full accrual basis of accounting. Revenues are recognized in the period in which they are earned, and expenses are recognized in the period in which the liabilities are incurred. Measurement Focus: Proprietary funds are accounted for on a cost of services or 'capital maintenance, measurement focus. Therefore, all assets and liabilities, regardless of whether they are current or noncurrent, are presented on the balance sheet. Fund equity, consisting of net total assets, is segregated into contributed capital and retained earnings segments. The operating statements of these funds reflect revenues, expenses, and other sources and uses which account for changes in net total assets during the period. ■ Valuation Of Fixed Assets: Property, plant and equipment owned by Proprietary Funds are stated at cost except for certain water and sanitary sewer lines of the Utility System which were donated to the City by contractors and subdivision developers, These lines are stated at their estimated cost to the contractors and subdivision developers which should approximate fair market value at the date of donation. Depreciation is recorded over the estimated useful lives using the straight4ine method. (See Note 5.) for all assets, depreciation expense includes amortization of assets recorded under capital leases. When property is disposed, the related cost and accumulated depreciation are removed from the accounts with gains or losses on disposition being reflected as non-operating revenue or expense, Reserves: Retained Earnings have been reserved for debt service requirements. Reserves have also been established to reflect legal restrictions which limit the City's spending discretion. 20 '� CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 The following are the City's proprietary fund types: Enterprise Funds: Enterprise Funds are used to finance and account for the acquisition, operation and maintenance of governmental facilities and services that are supported primarily by user charges, Internal Service Funds: Internal Service Funds are utilized to finance and account for service and commodities furnished by a designated department to other departments within the City or to other governments on a cost - reimbursement basis. Fiduciary Funds Trust and Agency Funds are utilized to account for resources that are managed in a trustee capacity or as an agent for other parties and/or other funds. These include Nonexpendable Trust, Pension Trust, and Agency Funds. Nonexpendable Trust and Pension Trust Funds are accounted for substantially in the same manner as proprietary funds with a capital maintenance' measurement focus and employment of the accrual basis of accounting. Agency Funds are not concerned with measurement of operating results, being essentially concerned with a custodial responsibility; assets and liabilities are measured on the modified accrual basis. Reserves for Retirements have been established for the payment of future benefits. Reserves for Retirements for defined contribution plans are equivalent to the net assets of the plan, and for defined benefit plans they are equivalent to the net assets of the plan, not to exceed the actuarial determined liability of such plans. Account Groups - General Fixed Assets and General Long -Term Debt General Fixed Assets Account Group: This account group accounts for all fixed assets of the City's Governmental Funds, Assets purchased are recorded as expenditures in the General Fund, Special Revenue Funds and Capital Projects Funds and are capitalized at cost in the General Fixed Assets account group, Generally accepted accounting principles provide an option whether infrastructure improvements such as streets, bridges and drainage systems are capitalized in the General Fixed Assets account group. The City has elected to capitalize these improvements, No interest capitalization or depreciation is recorded on General Fixed Assets. Contributed assets are stated at estimated fair market value on the date contributed, or in the case of assets contributed by developers, at estimated cost to the developer which should approximate fair market value. General Long -Term Debt Account Group: This account group accounts for Long -Term Debt and Compensated Absences which are liabilities of Governmental Funds but not payable from currently available expendable financial resources. �1 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1993 Note (1 C) Pooled Cash and Investments The City utilizes a consolidated cash pool to account for cash and investments of all City funds other than those which are required by ordinance to be physically segregated. The consolidated cash pool concept allows each participating fund to benefit from the economies of scale and improved yield which are inherent to a larger investment pool. Formal accounting records detail the individual equities of the participating funds. The cash pool utilizes a single checking account for all City receipts and disbursements. All individual fund cash equity in a deficit (overdraft) position with respect to the consolidated cash pool are reclassified at year -end to short-term interfund payables to the Capital Improvement Fund, the fund selected by management to reflect the offsetting interfund receivables in such cases. The City has an agreement with its depository bank to provide that all excess cash is swept daily and automatically into an overnight repurchase agreement which pays interest at Y.% less than the daily federal funds rate (3.250) at September 30, 1993, with no requirement for a minimum compensating balance. The collateral for this continuing repurchase agreement as of September 30, 1993 was $10,000,000 of United States Treasury Notes at 5.375% due 4/30/94. This collateral security is being held by the Federal Reserve Bank of Jacksonville jointly in the name of the depository bank and the City so that approval of both parties is required to liquidate or otherwise dispose of the securities. Market value of the collateral securities was $10,106,000 on September 30, 1993. Under City Charter and related resolutions, consolidated cash pool investments are limited to the following: United States Government Securities, Certificates of Deposit in Local Banks, Repurchase Agreements, Savings Account in Local Banks, Federal Government Agency Securities, Municipal bonds (Other than City of Clearwater issues), State of Florida Bonds, and County Bonds issued by Counties in Florida. Investments being held outside of the consolidated cash pool are escrowed debt service investments and employee retirement investments. Permissible escrowed debt service investments are specifically defined in each individual debt instrument, but generally follow the same limitations which apply to consolidated cash pool investments. The City maintains five different employee retirement programs, and each one has its own list of permitted investments. Generally, each plan allows the same type of investments as the consolidated cash pool, but additionally allows some portion of its assets to be invested in stocks, bonds, and notes of domestic corporations which are listed on one or more of the recognized national stock exchanges. Governmental Accounting Standards Board (GASB) Statement Number 3 requires certain disclosures for deposits and investments, including management's determination of custodial credit risk, defined as follows: For deposits, the bank balance must be categorized as follows: Category 1: Insured or collateralized with securities held by the City or its agent in the City's name. Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent in the City's name. Category 3: Uncollateralized. Par investments other than deposits, the following categories apply: Category 1: Insured or registered, or held by the City or its agent in the City's name. 22 �_, CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Category 2: Uninsured and unregistered, held by the counterparty's (purchasing agent's) trust department or agent in the City's name. Category 3: Uninsured and unregistered, held by the counterparty its trust department or agent, but not in the City's name. As described above, the City's depository banking agreement provides for the investment of all excess cash daily into a collateralized repurchase agreement, whereby all deposits deemed to be collected are automatically deposited. City deposits consist of relatively small cash balances held by Debt Service Trustees and Employee Retirement Custodians. The bank balances equal the carrying amount for these deposits, and management's classification of custodial credit risk is indicated in the table below, Because these amounts are part of the trustee's and custodian's composite account, they are classified along with investments on the balance sheet. Managed Mutual Funds and the ICMA and PEBSCO Retirement Trust Section 457 Investment Pool investments and guaranteed investment contracts are not susceptible to being classified by risk category, and are not required to be classified by GASH Statement 3. Management has classified all other investments into Category 1, with the exception of certain employee retirement investments which are being held by the financial institution which is also serving as investment manager, and certain escrowed debt service investments which are being held by the financial institution from which they were purchased. The carrying value for all investments is cost or, amortized cost, except for investments in the ICMA Retirement Trust Section 457 Investment Pool, which are reported (and recorded) at market value only, The general employee's pension plan has invested in fixed rate guaranteed investment contracts which are backed solely by the full faith and credit of issuing companies. Summary of deposits and investments, including management's assessment of custodial credit risk, follows: Consolidated Cash Pool Deposits and Investments: Overnight Repurchase Agreement SBA Loans Federal Home Loan Bank Notes Federal National Mortgage Association Notes Federal Farm Credit Bank Notes U.S. Treasury Notes and Bonds FHLMC Money Market Accounts Accrued Interest on Investments Less Outstanding Checks at 9/30193 Total Cash Pool Equity II. Construction Fund And Debt Service Deposits and Investments, Corporate Cash Management Fund Municipal Bonds U S. Treasury Notes and Bonds Total Construction Fund and Debt Setvrco Deposits and Investments 7.604,398 _ 8.373,5669 23 Investment Carrying Market Deposit Credit Credit Value Value Risk Category Risk Category S 4,419,000 $ 4,419,000 1 2,622 2,622 1 28,526,886 28,804,431 1 10,513,713 10,667,326 1 2,000,000 2,019,050 1 51,732,904 52,946,003 1 2,895,135 2,927,795 1 388,385 388,385 1 1,519,616 1,519,616 N/A (261.4441 (261,4441 N/A 1 01,736.817 103,432,784 28,032 28,032 NrA 650,000 719,102 1 6,926,356 7,626,425 1 7.604,398 _ 8.373,5669 23 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Investment Carrying Market Deposit Credit Credit Value Value Risk Category Risk Category III. Employee Retirement Deposits and Investments: Cash on Deposit with Custodian 14,113 14,113 1 Money Market Accounts 15,231,029 15,231,027 1 Guaranteed Investment Contracts 35,772,195 35,772,195 N/A Domestic Corporate Equity Securities 87,249,762 116,544,908 1 U.S. Treasury Bills and Notes 16,540,477 17,524,773 1 Domestic Corporate Bonds 13,667,513 14,182,348 2 Managed Mutual Funds 5,875,782 6,450,486 N/A U.S. Federal Agencies 16,259,173 16,199,073 2 ICMA Retirement Trust Section 457 Investment 10,962,665 10,962,665 N/A PEBSCO Retirement Investment Pool 1,299.238 1.299.238 N/A Total Employee Retirement Investments 202.871.947 234.180.826 Total Deposits and Investments. All Funds 6312.213152 $345.987.169 Note (1 D) Inventories Inventories of proprietary funds are stated at cost and valued on the first -in first -out (FIFO) basics. In governmental funds, inventory items such as materials and supplies, are accounted for under the purchases method, which provides that expenditures are recognized when the inventory item is purchased. Note (1E) General Fund Administrative Charges The General Fund charges Proprietary Funds for their proportionate share of the costs of general government operations, The amounts charged to these Proprietary Funds are based on relative net expenditures (after deducting all interfund transactions). Note (1F) Accrued Vacation And Sick Leave Full -time permanent employees earn a paid vacation period of two calendar weeks after one year of service, increasing on a graduated scale to a maximum vacation period of four calendar weeks per year after 18 years of service. Employees may accumulate unused vacation not exceeding one current year of vacation credit. Sick leave is accumulated at approximately 10 hours per month. Upon retirement from City service an employee may, under certain circumstances, be paid one -half of his accumulated unused sick leave. Pursuant to the requirements of Financial Accounting Standards Board Statement No. 43, "Accounting for Compensated Absences,` it is the City's policy in its Proprietary Funds to reflect on an accrual basis the amounts of earned but unused vacation leave and that portion of earned but unused sick leave estimated to be payable upon retirement. In accordance with Statement No. 4 of the National Council on Governmental Accounting, accumulated unpaid vacation and sick pay are subject to accrual in Governmental Funds to the extent that such amounts would normally be liquidated with expendable available resources on hand at the close of the fiscal year. The remaining portion of the liability is to be reflected in the General Long -Term Debt Account Group. With respect to the current fiscal year, management has determined that no material amounts of accumulated unpaid vacation and sick leave at the close of the year will be liquidated with expendable available resources, therefore the entire liability for such leave pertaining to the Governmental Funds is reflected in the General Long -Term debt Account Group. 24 '�: o CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (1 G) Budgets And Budgetary Accounting Annual budgets are legally adopted for the City's General Fund and for the Special Development Fund, the Clearwater Downtown Development Board Fund and the Community Redevelopment Agency Fund. The City of Clearwater observed the following procedures in establishing the budgetary data for the General Fund and Special Development Fund, as reflected in the financial statements.. On July 1, 1992, the City Manager submitted to the Clearwater City Commission proposed budgets for the fiscal year commencing October 1, 1992 and ending September 30, 1993. Public Hearings were held on September 3, 1992 and September 17, 1992 at the Clearwater Commission Chambers to obtain citizen comments. On September 17, 1992 official budgets were legally adopted by Ordinance No. 5281 -92. Subsequent quarterly budget amendments were adopted on March 4, 1993 (Ordinance 5345 -93) and July 17, 1993 (Ordinance 5402 -93). The final amended budget was adopted October 7, 1993, (Ordinance 5479 -93). The budget for the Special Development Fund is adopted on a basis consistent with GAAP, and appropriations lapse at year -end. Appropriations for open encumbered purchase orders at year -end in the General Fund do not lapse, but rather continue until liquidated or otherwise canceled by City Commission action. On the General Fund budgetary comparison statements, actual expenditures have been adjusted to include end of year encumbrances and to exclude beginning of year encumbrances to provide for a meaningful comparison. Except for the treatment of encumbrances and certain transactions relating to interfund loans, the General Fund Budget is adopted on a basis consistent with GAAP, and all non - encumbered appropriations lapse at year -end. The level of budgetary control established by the legislative body, that is the level on which expenditures may not legally exceed appropriations, is the inclMduai fund. In accordance with provisions of Ordinance 5021--90 and with Section 2.519(4) of the Clearwater Code, the City Manager may transfer part or all of any unencumbered appropriation balance among programs within an operating fund, provided such action does not result in the discontinuance of a program. Such transfers must be included in the next budget review presented to the City Commission. Upon detailed written request by the City Manager, the City Commission may by ordinance transfer part or all of any unencumbered appropriation balance from one fund to another. As established by administrative policy, department directors may transfer money from one operating . code to another within a division without a formal written amendment, with the exception of central service charges and employee expense codes. Formal requests for budget amendments from department directors are required for transfers in personal service codes, capital expenditures, transfers and reserves. Thus, certain object classifications within departmental and /or divisional budget appropriations are subject to administratively imposed controls in addition to the legal controls imposed by City Commission action described above, The annual budget for the Clearwater Downtown Development Board Fund is adopted annually by the members of that board in accordance with state law. For the current year, this budget was officially adopted on September 14, 1992, following a public hearing on that date. This budget is adopted on a basis consistent with GAAP, and the level of budgetary control is the total fund. The annual budget for the Community Redevelopment Agency is adopted annually by the trustees of that agency in accordance with state law. For the current year, this budget was officially adopted on September 18, 1992, following a public hearing on that date. This budget is adopted on a basis consistent with GAAP, and the level of budgetary control is the total fund. CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Budget amounts presented in the accompanying financial statement reflect all amendments adopted by the City Commission and the governing boards of component units. All amendments were adopted in conformance with legal requirements. Individual amendments, as well as the net effects of all amendments during the fiscal year, were not material in relation to the original appropriations for the governmental funds in the aggregate. Budgets are also adopted annually by the Clearwater City Commission for the Enterprise Funds, all Internal Service Funds, the Capital Improvement Fund and the Special Programs Fund. Budgetary comparisons for the Enterprise and Internal Service funds are not required by NCGA Statement No. 1 for the general purpose financial statements and are not included in this report. Budgets for the Capital Improvement and Special Programs Fund are adopted on a multi -year completed program basis, where budgetary appropriations do not lapse at year -end, but may extend across two or more fiscal years. A comparison of annual results with these budgets would not be meaningful and is therefore not included in this report. The excess of revenues and other sources over expenditures and other uses for the Special Programs Fund is shown as a reconciling item near the bottom of the combined budgetary comparison statement (pages 8 and 9 of this report). All City Commission adopted budgets are integrated into the formal accounting system to allow for monthly comparison of projected and actual experience in all funds for which budgets are adopted. Note (1 H) Self Insurance Program The City is self insured within certain parameters for losses arising from claims for property damage, general liability, auto liability and physical damage and workers' compensation. Insurance coverage is currently maintained to indemnify the City for losses in, excess of certain specific retentions and up to specified maximum limits in the case of claims for property damage and workers' compensation. In addition, prior to July 1, 1988, a layer of insurance coverage (most recently in the amount of $1,000,000) was in effect that provides reimbursement to the City whenever claim payments within the specified retained risk levels exceed, in the aggregate for the year to which coverage applies, an annual amount specified in the relevant insurance policies. This coverage applies to all categories of claims for which the City is partially self insured provided the event giving rise to the claim occurred prior to July 1, 1988. The transactions relating to the self insurance program are accounted for in the Central Insurance Fund, an Internal Service Fund. The billings by the Central Insurance Fund to the various operating funds (the interfundpremiums) are reflected as quasi - external transactions in the accompanying financial statements. Based upon the criteria provided in Financial Accounting Standards Board Statement No. 5, a liability has been established with an offsetting charge to appropriate expense accounts for estimated losses due to claims arising out of events that have occurred and been reported to the City's representatives as of the close of the fiscal year. in a similar manner, provision has been made for estimated losses resulting from claims Incurred but not reported. During fiscal year 1988 -89, the City Commission authorized the establishment of a special health insurance stabilization fund to guard against future substantial increases in health care costs. The current accumulated balance in this fund is $2,224,071 which represents $558,102 refunded from insurance carriers and $1,$65,969 contributed by departmental billings during the current and three immediately preceding fiscal years in excess of insurance premium expense actually incurred during those three years. This fund is a component of the unreserved retained earnings balance of the Central Insurance Fund at September 30, 1953, The City is not currently self - insured with respect to major medical coverage. 26 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1953 Note (11) Statements of Cash Flows For purposes of the statements of cash flows, investments with original maturities of three months or less are considered to meet the definition of cash equivalents. The majority of the investments in which the City's proprietary and nonexpendable trust funds have an equity are held by the City's consolidated pool of cash and investments. Since fund equities in this cash management pool have the general characteristics of demand deposits in that additional funds may be deposited at any time and also funds may be withdrawn at any time without prior notice or penalty, each fund's equity account is considered a cash equivalent regardless of the maturities of investments held by the pool. Those funds which have deficit (overdraft) positions with the pool treat such deficits as interfund payables to the City's Capital Improvement Fund as explained in Note 1(C). Note (1d) Capitalization of Interest In compliance with the requirements of Financial Accounting Standards Board Statement No. 62, it is the policy of the City to capitalize all interest costs of tax exempt borrowings, the proceeds of which are externally restricted to the financing of the acquisition of specified qualifying assets, less any interest earned on the temporary investment of the proceeds of such borrowings until the specified qualifying assets acquired with the borrowings are ready for their intended use. For other projects, the City follows the provisions of Financial Accounting Standards Board Statement No. 34 and capitalizes interest costs incurred during the construction period. This policy is applicable to the proprietary funds; it is not applied to general fixed assets. During the fiscal year, $7,357,383 of interest cost was incurred in the proprietary fund types, Interest capitalized, net of earnings on related investments, was $661,785. Note (1 K) Application of FASB Pronouncements to Proprietary Funds The City has elected to implement the provisions of GASB Statement 20 with regard to the application of FASB Pronouncements to its proprietary funds. In accordance with the provisions of GASB Statement 20, the City has elected to not apply those FASB statements and interpretations issued after November 30, 1989. Note (1 L) Comparative Data Wherever possible, the accompanying financial statements include comparative total data for the prior year in order to provide a better understanding of changes in the City's overall financial position and results of operation. Certain prior year balances have been reclassified to conform with current year presentations. Note (1 M) Combined Financial Information The total columns included in the combined financial statements which are captioned 'Memorandum Only' represent a summation of the amounts presented in the columns by fund type and account group. Such totals do not eliminate interfund transactions, and are included for informational purposes only. They are not intended to present financial position, results of operations or cash flows for the governmental unit as a whole in conformance with generally accepted accounting principles. 27 ' " CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (2) Long -Term Debt Note (2A) Summary of Transactions in Long -Term Debt General Long -Term Debt Account Group Debt Payable at October 1, 1992 New Debt Issued: Lease Purchase Contracts for Equipment Acquisition Net Change in Accrued Compensated Absences Debt Retired Debt Payable at September 30, 1993 Proprietary Funds Debt Payable at October 1, 1992 New Debt Issued: Revenue Bonds Lease Purchase Contracts for Equipment Acquisition Increase in Book Value of Capital Appreciation Bonds Due to Interest Accretion Debt Retired Unamortized Discount and Issue Costs Debt Payable at September 30, 1993 Notes, Mortgages, General Loan Pool Accrued Obligation Revenue Agreements Compensated Bonds Bonds & Contracts Absences Total $725,000 54,199,822 $2,004,034 $2,657,968 $9,586,824 830,676 830,676 451,907 451,907 90.000 (270.486) (558,189) (918,675) $ 635.000 53.929.336 $2.276,521 $3.109.875 59.950,732 $98,548,647 $8,687,749 $107,236,396 53,445,000 53,445,000 716,524 716,524 1,465,830 1,465, 830 (51,265,119) (2,218,731) (53,483,850) (1.405.753) (28,574) (1,434,327) $100.788.605 57,156,968 S107.945,573 Outstanding debt in the above schedule is not adjusted for amounts accumulated in sinking funds for term maturities of revenue bonds (par value $239,260 for General Long -Term Debt Account Group and $4,860,740 for Proprietary Funds). 28 ,�, CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (28) Summary of Debt Service Requirements (All Outstanding Indebtedness as of September 30, 1993, Including Interest Payments of S107,339,453) Notes (2C) Obligations Under Lease Purchase Agreements Future minimum lease payments under lease purchase agreements are as follows: Year Ending Sept._ 30 Amount 1994 52,241,172 1995 Notes, 1996 1,242,494 1997 729,136 Mortgages, 162,329 General Deduction of the Amount of Imputed Loan Pool Interest Necessary to Reduce Net Obligation Revenue Agreements & Year Ending Sept. 30 Bonds Bonds Contracts Total 1994 5123,615 $ 9,282,427 S3,303,411 $ 12,709,453 1995 123,457 9,173,990 2,871,627 12,169,074 1996 118,114 9,223,773 2,291,193 11,633,080 1997 117,580 9,228,903 1,771,838 11,118,321 1998 131,280 9,043,836 359,154 9,534,270 Thereafter 138.915 161,122.011 35.086 161, 296, 012 S752.961 $207,074,940 $10,632.309 $218,460.210 Notes (2C) Obligations Under Lease Purchase Agreements Future minimum lease payments under lease purchase agreements are as follows: Year Ending Sept._ 30 Amount 1994 52,241,172 1995 1,816,386 1996 1,242,494 1997 729,136 1998 162,329 6,191,517 Deduction of the Amount of Imputed Interest Necessary to Reduce Net Minimum Lease Payments to Present Value 570,990 55.620.527 Obligations under capital leases are included as a component of the balance under the caption Mortgages, Notes, Loan Pool A_ greements and Acauisition Contracts Payable on the City's Combined Balance Sheet. Note (20) Long-Term Debt, General Government Accrued Compensated Absences Long -term portlon of accrued vacation and sick pay for governmental funds, as required by NCGA Statement No. .. 3,109 875 Serial Bonds Payable General Obligation Bonds, 1978 Series, interest and principal payable from ad valorem taxes, maturing serially from January 1, 1594 to January 1, 1999, interest rates 5.559; to 5,80% 635,000 29 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Public Service Tax and Bridge Revenue Bonds, Series 1985, maturing serially from December 1, 1993 to December 1, 1998, with interest rates varying from 7.75 0/. to 8.75 %, The amount shown here represents 33.065 % of the serial portion of the total issue. The amount representing 33.065% of the term portion of the total issue is included in the balance of term bonds payable within the general long -term debt account group. The remainder of this issue, both term and serial portions, is reflected in the Toll Causeway and Bridge Fund (40.541 %) and in the Parking System Fund (26.394 %). The bonds have serial maturities ranging from $475,000 at 7.75% due December 31, 1993 to $700,000 at 8.75% due December 1, 1998, and term bonds totaling $1,740,000 at 9.125% due December 1, 2005. Funds are being held in a sinking fund as described in Note (2G) to assist in the 2005 maturity. 1,149,006 Community Redevelopment Agency of the City of Clearwater Tax Increment and Lease Revenue Bonds, Series 1986, maturing serially from October 1, 1994 to October 1, 2000, with interest rates varying from 7.4% to 8.4 %. Interest and principal payable from tax increment revenues and from lease revenues. 435,000 Community Redevelopment Agency of the City of Clearwater Tax Increment Revenue Bonds, Series 1987, maturing serially from September 1, 1994 to September 1, 1997, with interest rates varying from 7.75 ° /Q to 8.30°/x. Interest and principal payable from 580,000 tax increment revenues. Total Serial Bonds Payable 2.799.006 Term Bonds Payable Public Service Tax and Bridge Revenue Bonds, Series 1985, maturing December 1, 2005 with interest at 9.125 %. The amount shown here represents 33.065% of the term portion of total issue. The remainder of the issue is reflected in the Toll Causeway and Bridge Fund (40.541 %) and in the Parking System Fund (26.394 %). The bonds have serial maturities ranging from $475,000 at 7.75% due December 31, 1993 to $700,000 at 8.75% due December 1, 1998, and term bonds totaling $1,740,000 at 9.125% due December 1, 2005. Funds are being held in a sinking fund as described in Note (2G) to assist in the 2005 maturity. 575,330 Community Redevelopment Agency of the City of Clearwater Tax Increment and Lease Revenue Bonds, Series 1986, with interest and principal payable from Tax Increment Revenues and Lease Revenues, maturing October 1, 2006, with interest 1,190,000 at 8.50 %. Total Term Bands Payable 1.765.330 Notes„ Mortgages Contracts and Loan Pool Agreement Payable Contractual obligation arising from lease agreement with Pier Pavilion, Inc., lessee, dated July 3, 1980, providing for reimbursement by the City to the lessee for certain structural improvements to the Pier Pavilion up to a limit of $50,000; obligation is being satisfied by allowing a credit of $4,161 each year against rentals owed to the City by lessee under the terms of the lease. 4,161 30 n CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating departments of the General Fund. These agreements provide for 20 quarterly payments ranging in amount from $671 to $11,102. The cost of the equipment at the inception of the leases was $2,024,404 with interest imputed thereon of $334,285, the effective rates ranging from 6.15% to 8.60 %. 1,339,985 Pool Loan Agreement with First Florida Governmental Financing Commission authorized by the City Commission on July 2, 1987 through adoption of Ordinance 4437 -87; provides for repayment of principal in annual installments ranging from $40,000 to $55,000 from July 1, 1992 to July 1, 1997; interest on installments ranges from 5.75% to 6.70% and is payable semiannually; City is further obligated to pay certain additional payments, including its proportionate share of the fees of the Commission as well as those of the Trustee, Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds issued by the Commission to provide the funds for making the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this Loan Agreement; collateralized by non -ad valorem revenues or other legally available funds of the City. Loan was obtained to finance the purchase of an advanced multi - purpose fire fighting vehicle. 200,000 Pool Loan Agreement with City of Gulf Breeze Florida Local Government Loan Program authorized by the City Commission on December 15, 1988, through adoption of Ordinance 4728 -88; provides for repayment of principal in 120 monthly payments of $8,167 from February 1, 1989 to January 1, 1999; interest is payable monthly at the floating rate determined by the Loan Program Financial Advisor sufficient to pay the proportionate share of program interest, costs and expenses (3.6% at September 30, 1993); the interest rate shall not exceed twenty -five percent (25 %) per annum, exclusive of amounts charged for costs and expenses of the loan program; collateralized by proceeds of the local government half -cent sales tax, Loan was obtained for the financing (or refinancing) of the cost of acquisition of the Vogel Property tract for park purposes. 514,500 Pool Loan Agreement with City of Gulf Breeze Florida Local Government Loan Program authorized by the City Commission on December 15, 1988, through adoption of Ordinance 4729 -88; provides for repayment of principal in 120 monthly payments of $3,458 from February 1, 1989 to January 1, 1999; interest is payable monthly at the floating rate determined by the Loan Program Financial Advisor sufficient to pay the proportionate share of program interest, costs and expenses (3.6% at September 30, 1993); the interest rate shall not exceed twenty -five percent (25 %) per annum, exclusive of amounts charged for costs and expenses of the loan program; collateralized by proceeds of the local government half -cent sales tax. Loan was obtained for the financing (or refinancing) of the cost of acquisition of environmentally sensitive Coopers Point tract for park purposes. 217.875 Total Notes, Mortgages, Contracts and Loan Pool Agreements Payable 2,276,521 Total General Long -Term Debt Payable 9.950.732 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (2E) Long -Term Debt, Proprietary Funds Water and Sewer Utility Fund Water and Sewer Revenue Bonds, Series 1964; 8.75 - 9.005' . Current Interest Bonds with serial maturities due in annual principal installments ranging from $2,090,000 to $2,265,000 from December 1, 1993 to December 1, 1994; interest is payable semiannually, net of unamortized discount and issue costs of S8,378, collateralized by net revenues of the Water and Water Pollution Control System. 4,346,622 Water and Sewer Revenue Bonds, Series 1988; 6.50 - 7.60 %. Current Interest Bonds with Serial maturities due in annual principal installments ranging from 5460,000 to $2,985,000 on December 1st in the years 2005, 2006, 2008, and 2010 through 2013; Capital Appreciation Bonds with an approximate yield to maturity ranging from 7.45 - 7.75 % and having serial maturities due in annual installments (original principal amount plus interest earned to date of maturity) ranging from $625,000 to $6,840,000 from December 1, 2004 to December 1, 2018; interest is payable semiannually on Current Interest Bonds and at maturity (or prior redemption date) on Capital Appreciation Bonds; net of unamortized discount of $908,338 and in the case of the Capital Appreciation Bonds, unearned interest included in the maturity amount outstanding at September 30, 1993 of $59,149,306 collateralized by net revenues of the Water and Water Pollution Control System. 31,732,356 Water and Sewer Refunding Revenue Bonds, Series 1993; 2.60 - 5.625 %. Current Interest Bonds with serial maturities due in annual principal installments ranging from $140,000 to S5,715,000 from December 1, 1993 to December 1, 2018; interest is payable semiannually, net of unamortized discount and issue costs of $220,639, collateralized by net revenues of the Water and Water Pollution Control System. 53,224,361 Pursuant to a Master Lease Agreement, the City has entered into a Lease Purchase Agreement for the purchase of automotive equipment for use by an operating division of the Water and Sewer Utility Fund, providing for payments of $1,040 for 20 quarters commencing December 31, 1989 and 51,168 for 20 quarters commencing September 30, 1992. The cost of the automotive equipment at the inception of the lease was $38,000 with interest imputed thereon of $6,159, with effective rate of 7.71% for the 1989 lease and 5.1% for the 1992 lease, 19,819 Interest earnings on the investment of unspent proceeds of the Water and Sewer Revenue Bonds, Series 1988A and 19888 (including related reserve account) estimated to be rebatable to the United States Treasury, 1,083.295 90,406,453 Less Current Portion of Long -Term Debt 2.887.904 Long -Term Debt, Excluding Current Portion 87,518,549 Cash has been restricted and reserves established in the Water and Sewer Revenue Bonds Debt Service Fund pursuant to the ordinances authorizing the four outstanding series of Water and Sewer Revenue Bonds. Amounts restricted are in compliance with the ordinances, CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Gas Utility Fund Gas System Revenue Bonds, Series 1991, 5.6% to 6.5% Serial Bonds due in annual principal installments ranging from S150,000 to $380,000 from September 1, 1995 to September 1, 2004; 6.5% Term Bonds in the principal amount of $2,325,000 maturing on September 1, 2009 and 6.5% Term Bonds in the principal amount of $2,455,000 maturing on September 1, 2013; interest is payable semiannually; net of unamortized discount of $172,047, collateralized by net revenues of the Gas Division. 7,507,953 Loan payable to the Water and Sewer Fund for the transfer of ownership of property from the Water and Sewer fund to the Gas Fund. Payment of the loan is to be interest free, in five equal installments beginning 9/30/93 and ending 9/30/97. 417,062 Obligations under lease purchase agreement, relating to purchase of vehicles and equipment, original principal amount of $187,217, payable over 5 years with an effective rate of 5.1 to 5.525 %, quarterly payments of $10,583. 142.600 8,067,615 Less Current Portion of Long -Term Debt 139,944 Long -Term Debt, Excluding Current Portion 7,927,671 Cash has been restricted and reserves established in the Gas System Revenue Bonds Debt Service Fund pursuant to the ordinance authorizing the 5.6 - 6.5% Gas System Revenue Bonds. Amounts restricted are in compliance with the ordinance. Solid Waste Utility Fund Pool Loan Agreement with First Florida Governmental Financing Commission authorized by the City Commission on July 2, •1987 through adoption of Ordinance 4437 -87; provides for repayment of principal in annual installments ranging from $70,000 to $85,000 from July 1, 1994 to July 1, 1997; interest on installments ranges from 6.15% to 6.70% and is payable semiannually; City is further obligated to pay certain additional payments, including its proportionate share of the fees of the Commission as well as those of the Trustee and the Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds issued by the Commission to provide the funds for making the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this Loan Agreement; collateralized by non -ad valorem revenues or other legally available funds of the City. Loan was obtained to finance the construction of a facility to be used by the Solid Waste Division (also finances improvements to real property and acquisition of equipment unrelated to the Utility System); net of unamortized discount and issue costs of $2,946. 302,816 Capital Improvement Revenue Bonds, Series 1984, 9.50 %, due in equal principal installments of $64,000 each on November 16 1993 and 1994; interest is payable quarterly; net of unamortized issue cost of $350 collateralized by an irrevocable lien upon guaranteed entitlement portion of state revenue sharing trust funds, proceeds of local government half -cent sales tax and all investment income derived from Investment of funds held under the authorizing ordinance; In addition, the bonds are collateralized by a subordinate lien on public service tax revenues. 127,650 33 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Lease Purchase Agreement for the purchase of data processing equipment for the use by the operating division of the Solid Waste Utility Fund. The agreement provides for 20 quarterly payments of $1,055. The cost of the equipment at the inception of lease was $18,554 with interest imputed thereon of $2,539, with an effective rate of 5.1%. 18.554 449,020 Less Current Portion of Long -Term Debt 137.556 Long -Term Debt, Excluding Current Portion 311.464 Certain assets on deposit with an escrow agent pursuant to the requirement to establish and maintain aDebt Service Account contained in the Loan Pool Agreement with the First Florida Governmental Financing Commission have been classified as restricted assets and a reserve has been established in the Solid Waste Utility Fund. Amounts restricted are in compliance with the ordinance and the Loan Pool Agreement. Toll Causeway and Bridge 40.541% of the Public Service Tax and Bridge Revenue Bonds, Series 1985. Bridge Revenues are pledged to collateralize this portion of the total bond issue. Liability shown is net of unamortized discount and issue costs (Bridge Fund share only) totaling $60,055. 2,054,157 Less Current Portion of Long -Term Debt 192,570 Long -Term Debt, Excluding Current Portion 1.861.587 Cash has been restricted and reserves established pursuant to the ordinance, authorizing the Public Service Tax and Bridge Revenue Bonds, Series 1985. Amounts restricted are in compliance with the ordinance. Yacht Basin and Marina 5% Uncollateralized loan payable to the General Fund; S15,000 of the advance is scheduled for repayment during the following fiscal year. 60,324 Pursuant to a Master Lease Agreement, the City has entered into a Lease Purchase Agreement for the purchase of computer equipment for use by the operating division of the Yacht Basin and Marina Fund, providing for 20 quarterly payments of $1,401, commencing on June 1, `1990', the cost of the equipment at the inception of the Lease Agreement was $23,555 with interest imputed thereon of 54,456, an effective rate of 7.345 %. 7,889 Pool Loan Agreement with First Florida Governmental Financing Commission authorized by the City Commission an July 2, 1987 through adoption of Ordinance 4437 -87; provides for repayment of principal in annual installments ranging from $40,000 to $50,000 from July 1, 1992 to July 1, 1997; interest on installments ranges from 6,15% to 6,70% and is payable semiannually; City is further obligated to pay certain add ttonal payments, including its proportionate share of the fees of the Commission as well as those of the Trustee and the Registrar and Paying Agent 34 ?. + CITY OF CL15ARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 created pursuant to the terms of the Revenue Bonds issued by the Commission to provide the funds for making the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this Loan Agreement; collateralized by non -ad valorem revenues or other legally available funds of the City. Loan was obtained to finance the Seminole Boat Launch dredging and the renovation of the Marina Building (also finances improvements to real property and acquisition of equipment unrelated to the Marina Fund); net of unamortized discount and issue costs of $1,720. 178.280 246,493 Less Current Portion of Long -Term Debt 60.163 Long -Term Debt, Excluding Current Portion 186,330 Parking System 9.1 - 9.5% Parking System Revenue Bonds, Series 1983, due in annual installments ranging from $75,000 to $110,000 plus semiannual interest, through January 1, 1998, net of unamortized discount and issue costs of S5,200 collateralized by net revenues of the Parking System. 374,800 26.394% of the Public Service Tax and Bridge Revenue Bonds, Series 1985, net of unamortized discount and issue costs (Parking Fund share only) of S30,746. 1,420.707 1,795,507 Less Current Portion of Long -Term Debt 200.372 Long -Term Debt, Excluding Current Portion 1,595,135 Cash has been restricted and reserves established pursuant to the ordinances authorizing the 9.1 % to 9.5% Parking Revenue Bonds and the Public Service Tax and Bridge Revenue Bonds. Amounts restricted are in compliance with the ordinances, Garage Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating divisions of the City. These agreements provide for 20 quarterly payments ranging in amount from S991 to $38,065. The cost of the equipment at the inception of the leases was $6,895,172 with interest imputed thereon of $1,131,442, the effective rates ranging from 4.71% to 8.5997 %, 3,353,365 Pool Loan Agreement with First Florida Governmental Financing Commission authorized by the City Commission on July 2, 1987 through adoption of Ordinance 4437 -87; provides for repayment of principal in annual installments ranging from $540,000 to S650,000 from July 1, 1993 to July 1, 1997; interest on installments ranges from 6.15% to 6.70% and is payable semiannually; City is further obligated to pay certain additional payments, including its proportionate share of the fees of the Commission as well as those of the Trustee and the Registrar and Paying Agent created pursuant to the terms of the Revenue Bonds issued by the Commission to provide the funds for making the pool loans, and in addition all fees and expenses of the Commission or Trustee that relate to this Loan Agreement; collateralized by nomad valorem revenues or other legally available funds of the City. Loan was 35 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30`1993 obtained to finance the construction of a radio communications system for use by all City Departments, including two radio towers, satellite and microwave receivers, and radios (also finances improvements to real property and acquisition of equipment unrelated to the Garage Fund); net of unamortized discount and issue costs of $23,908. 2.351,092 5,704,457 Less Current Portion of Long -Term Debt 1,702.030 Long -Term Debt, Excluding Current Portion 4.002,427 Administrative Services Pursuant to certain Master Lease Agreements, the City has entered into Lease Purchase Agreements for the purchase of automotive and other types of equipment for the use by the operating divisions of the Administrative Services Fund. One of these agreements provides for 84 monthly payments ranging in amount from $10,283 to $14,588. Nine of these agreements provide for either 20 or 28 quarterly payments ranging in amount from $372 to $25,925. The cost of the equipment at the inception of the leases was $1,716,501 with interest imputed thereon of 5469,655, the effective rates ranging from 5.03% to 8.9 %. 725,635 Less Current Portion of Long -Term Debt 322.279 Long -Term Debt, Excluding Current Portion 403,356 General Services Pursuant to certain Master Lease Agreements, the City has entered into a Lease Purchase Agreement for the purchase of computer equipment for use by the operating divisions of the General Services Fund. The agreement provides for 20 quarterly payments in the amount of $1,449. The cost of the equipment at the inception of the tease was $24,160 with interest imputed thereon of $4,812 the effective rate of 7.558% 10,663 Less Current Portion of Long -Term Debt 5.132 Long -Term Debt, Excluding Current Portion 5,531 Central Insurance Pursuant to a Master Lease Agreement, the City has entered into a Lease Purchase Agreement for the purchase of equipment for use by the Central Insurance Fund (also finances the acquisition of equipment unrelated to the Central Insurance Fund), providing for 20 quarterly payments of $1,113 commencing June 30, 1990; the cost of the equipment at the Inception of the Lease Agreement was $18,711 with interest imputed thereon of $3,540, an effective rate of 7,345 %. 6,266 Less Current Portion of Long,Term Debt 4.101 Long - Term Debt, Excluding Current Portion 2,165 36 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 TOTAL PROPRIETARY FUNDS - LONG -TERM DEBT, EXCLUDING CURRENT PORTION 103,814,215 TOTAL LONG -TERM DEBT, ALL FUNDS EXCLUDING CURRENT PORTION FOR PROPRIETARY FUNDS S 113,764.947 The official statements and commission resolutions authorizing the issuance of the revenue bonds described above contain certain restrictive covenants. The City has covenanted that, on a monthly basis, It will deposit specified amounts derived from specific revenue sources into accounts and funds established by the resolutions. The deposits into these accounts and funds are used to repay principal and interest coming due on the bonds and to provide sinking funds established for the purpose of retiring term bonds due in future years. Certain of the covenants also require maintenance of specified coverage ratios, The City is in compliance with bond covenants. Note (217) Advance Refunding of Bonds In prior fiscal years, the City entered into various advance refunding transactions related to certain of its bonded debt. A portion of the proceeds of the refunding bond issues was placed in trust and used to purchase securities of the United States Government and related agencies at various interest rates and maturities sufficient to meet all debt service requirements of the refunded debt, of which $120,942,592 was outstanding at September 30, 1993, all of which relate to enterprise funds. These assets are administered by trustees and are restricted to use for retirement of the refunded debt. The liability for the refunded bonds and the related securities and escrow accounts are not included in the accompanying financial statements as the City defeased its obligation for payment of the refunded bonded debt upon completion of the refunding transactions, Bond issues which have been refunded and are payable from escrow accounts are: Water and Sewer Revenue Bond, Series 1988B Water and Sewer Revenue Bond, Series 1988A Gas System Revenue Bonds, Series 1983 Utility Revenue Certificates Special Obligation Bonds, Series 1978 Utility Revenue Bonds, Series 1978 Water and Sewer Revenue Bonds, Series 1987 Water and Sewer Revenue Bonds, Series 1984 (partial refunding) Utilities Tax and Bridge Revenue Bonds, Series 1577 Utilities Tax Bonds, Series 1977 Amount Outstanding at September 30 1993 S 21,352,145 26,635,000 6,400,000 11,235,000 2,745,000 24,790,000 16,430,000 4,840,447 4,135,000 2,380,000 5120,942, 592 37 '} -'' ' CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (2G) Sinking Fund for Term Bond Maturities Public Service Tax And Bridge Revenue Bonds On August 27, 1985, Sinking funds for the 1977 Utilities Tax and Bridge Revenue Bonds and for the 1977 Utilities Tax Bonds were liquidated with the proceeds being placed into escrow as part of an advance refunding of both of these issues. These amounts, plus S4,149,699 from the 1985 Public Service Tax and Bridge Revenue Bonds were used to purchase United States Government Securities which will mature in sufficient amounts to make all required principal and interest payments on both 1977 issues. Under agreements dated November 1, 1977 and amended March 14, 1978, the City exercised an option obligating it to purchase securities from Barnett Bank through December 1, 1987 for both of the original 1977 sinking funds. As part of the refunding plan, all securities purchased subsequent to the refunding date became part of the sinking fund for the term maturity of the 1985 bonds. As of September 30, 1993, securities totaling 51,090,898 (at amortized cost, market value 51,264,364) were being held by Barnett Bank for this purpose. All securities will mature May 5, 2005 and will be applied toward the final payment on the 1985 bonds due on December 1, 2005. Note (2H) Long -Term Debt, Debt Service Funds Debt Service Reserves - General Long -Term Debt The reserves have been established in compliance with the ordinances authorizing the debt and are equal to the amounts required by the ordinances. Reserves established to provide for the next succeeding maturities of principal and interest are as follows: A sinking fund reserve has been established to provide for term maturity of the Public Service Tax and Bridge Revenue Bonds. The General Long -Term Debt portion of this reserve, based on the original allocation of bond proceeds, is S240,557 as of September 30, 1993. A contingency reserve has been established pursuant to the authorizing bond ordinance to meet principal and interest requirements for the Public Service Tax and Bridge Revenue Bonds should other resources be unavailable. The General Long -Term Debt portion of this reserve is 8183,508 as of September 30, 1993. A contingency reserve has been established pursuant to the authorizing bond resolution to meet principal and interest requirements of the Tax Increment Revenue Bonds, Series 1987 should other resources be unavailable. The reserve balance at September 30, 1993 IS $718,931, which exceeds the maximum required balance of 8116,700 required by the authorizing resolution. 38 'j'`! Principal Interest General Obligation Bonds: 1978 Issue $67,500 S 9,028 Indebtedness of the Community Redevelopment Agency (includes Tax Increment and Lease Revenue Bonds, Series 1986 and Tax Increment Revenue Bonds, Series 1987) 140,000 183,835 Public Service Tax and Bridge Revenue Bonds, (this represents 33.065% of the total issue - see Note (2F)) 130.882 49.231 $338,382 5242,094 A sinking fund reserve has been established to provide for term maturity of the Public Service Tax and Bridge Revenue Bonds. The General Long -Term Debt portion of this reserve, based on the original allocation of bond proceeds, is S240,557 as of September 30, 1993. A contingency reserve has been established pursuant to the authorizing bond ordinance to meet principal and interest requirements for the Public Service Tax and Bridge Revenue Bonds should other resources be unavailable. The General Long -Term Debt portion of this reserve is 8183,508 as of September 30, 1993. A contingency reserve has been established pursuant to the authorizing bond resolution to meet principal and interest requirements of the Tax Increment Revenue Bonds, Series 1987 should other resources be unavailable. The reserve balance at September 30, 1993 IS $718,931, which exceeds the maximum required balance of 8116,700 required by the authorizing resolution. 38 'j'`! CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 A Debt Service Reserve Account has also been established pursuant to the Loan Pool Agreement with First Florida Governmental Financing Commission to pay the City's proportionate share of the principal and interest requirements of the underlying revenue bonds should an insufficiency of funds exist due to the City's failure to make a loan repayment in the full amount or because of an event of default under the Loan Pool Agreement. The General Long -Term Debt reserve balance at September 30, 1993 is $45,009, which represents of 6.6% the total required reserve account. The remaining balance of the required reserve (93.4% of the total) is reflected in the Garage and Solid Waste Utility Funds. Note (3) Restricted Assets, Proprietary Funds Note (3A) Water and Sewer Utility Fund Assets in the Water and Sewer Utility Fund restricted for construction consist of the following: Proceeds of Utility Revenue Bonds, 1978 Series, and Water and Sewer Revenue Bonds, 1987, 1988A and 19888 Series, the use of which is restricted to construction of water and sewer improvements authorized by the relevant ordinances; assets remaining at September 30, 1993 are: Equity in Pooled Cash and Investments 5,735,664 Water Improvement charges, the use of which is restricted by the ordinance authorizing the collection of such charges to the construction of additions and improvements to the water system; assets remaining at September 30, 1993 are: Equity in Pooled Cash and investments 246,718 Due from Other Funds 287,224 Sewer Improvement charges, the use of which is restricted by the ordinance authorizing the collection of such charges to the construction of additions and improvements to the sewer system; assets remaining at September 30, 1993 are: Equity in Pooled Cash and Investments 981,152 Due from Other Funds 1,989,489 Proceeds of the Local Option Sales Tax designated as 'Penny for Pinellas', which is restricted by voter referendum and the terms of the interlocal agreements between Pinellas County and the municipalities receiving the tax to the construction of specific infrastructure capital improvements; assets remaining at September 30, 1993 are; Due from Other Funds 74,847 39 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Assets of the Water and Sewer Utility Fund restricted under the provisions of the ordinances authorizing the issuance of revenue bonds consisted of the following at September 30, 1993: Water and Sewer Revenue Bonds Debt Service; Equity in Pooled Cash and Investments $ 8,603,924 Investments (U.S. Government Securities) 5,073,266 Accrued Interest Receivable on Investments 143,055 Renewals and Replacements: 2,275,289 Equity in Pooled Cash and Investments 300,000 Due from other Funds 2,662,701 Due from Other Governmental Entities 769 Equity in Pooled Cash and Investments 516,759,004 Assets of the Water and Sewer Utility Fund representing Customers' Deposits and therefore restricted, amounted to $1,751,122 at September 30, 1993, consisting entirely of Equity in Pooled Cash and Investments. Note (38) Gas Utility Fund Assets of the Gas Utility Fund restricted under the provisions of the ordinance authorizing the issuance of revenue bonds consisted of the following at September 30, 1993: Gas System Revenue Bonds Debt Service: S 283,210 Equity in Pooled Cash and Investments Investments (U.S. Government Securities) 462,194 Interest Receivable 16,295 Renewals and Replacements: 300,000 Investments (U.S. Government Securities) Construction: 393,582 Equity in Pooled Cash and Investments $1,455,281 Assets of the Gas Utility Fund representing Customers' Deposits and therefore restricted, amounted to $627,066 at September 30, 1993, consisting entirely of Equity in Pooled Cash and investments. Note (3C) Solid Waste Utility Fund Restricted assets in the Solid Waste Utility Fund designated for construction consist of the following: Assets of the Solid Waste Utility Fund restricted under the provisions of the Loan Pool Agreement with the First Florida Governmental Financing Commission consisted of the following at September 30, 1993: Loan Pool Agreement Debt Service: investments Held by Escrow Agent (Primarily Alachua S67,801 County, Florida Revenue Bonds) Accrued Interest Receivable on Investments 736 S68,537 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Proceeds of the Local Option Sales Tax designated as 'Penny for Pinellas', which is restricted by voter referendum and the terms of interlocal agreements between Pinellas County and the municipalities receiving the tax to the construction of specific infrastructure capital improvements; assets remaining at September 30, 1993 are: Due from Other Funds $22.369 Assets of the Solid Waste Utility Fund representing customer deposits, and therefore restricted, amounted to $288,853 at September 30, 1993, and consisted entirely of Equity in Pooled Cash and Investments. Note (313) Stormwater Utility Fund Restricted assets contributed to the Stormwater Utility Fund by the Special Development Fund consist of the following: Drainage impact Fees restricted by City Code Section 43.24 to increasing the capacity of the City's drainage system; assets remaining at September 30, 1993 are: Due from Other Funds $ 19,807 Proceeds of the Local Option Sales Tax designated as 'Penny for Pinellas', which is restricted by voter referendum and the terms of interlocal agreements between Pinellas County and the municipalities receiving the tax to the construction of specific infrastructure capital improvements; assets remaining at September 30, 1993 are: Due from Other Funds 98,446 Development Impact Fees restricted by City Code Section 183.03 to the construction of roads, public transit facilities and storm drainage in the City; assets remaining at September 30, 1993 are: Due from Other Funds 477,941 Road and Drain Millage restricted to fund various activities associated with roads and drainage; assets remaining at September 30, 1993 are: Due from Other Funds 11,565 $607,759 4.1 a' !� CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (3E) Toll Causeway and Bridge Fund Assets of the Toll Causeway and Bridge Fund restricted under the provisions of the ordinances authorizing the issuance of revenue bonds consisted of the following at September 30, 1993: Debt Service: Equity in Pooled Cash and Investments Investments (U,S. Government Securities) Accrued Interest Receivable on Investments $ 979,902 562,394 17,448 $1, 559.744 Note (317) Yacht Basin and Marina Assets of the Yacht Basin and Marina restricted under the provisions of the Loan Pool Agreement with First Florida Governmental Financing Commission consisted of the following at September 30, 1993: Loan Pool Aoreem_ e_n_t Debt Service: Investments Held by Escrow Agent (Primarily Alachua County, Florida Revenue Bonds) $40,359 Accrued Interest Receivable on Investments 437 540,796 Note (3G) Parking System Assets in the Parking System restricted under the provisions of the ordinances authorizing the issuance of revenue bonds consisted of the following at September 30, 1993: Parking System Revenue Bonds Debt Service: Equity in Pooled Cash and Investments $ 325,793 Renewals and Replacements: 135,035 Equity in Pooled Cash and Investments Public Service Tax and Bridge Revenue Bonds Debt Service: 354,481 Equity in Pooled Cash and Investments Investments (U.S. Government Securities) 287,947 Accrued Interest Receivable on Investments 8.933 1.112.189 Note (3H) Pier 60 Fund Restricted assets contributed to the Pier 60 Fund by the Special Development Fund consist of the following: Proceeds of the Local Option Sales Tax designated as 'Penny for Pinellas', which is restricted by voter referendum and the terms of interlocal agreements between Pinellas county and the municipalities receiving the tax to the construction of specific infrastructure capital improvements; assets remaining at September 30, 1993 are: Due from Other Funds $ 1.566,765 •�-- 42 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (31) Garage Fund Assets of the Garage Fund restricted under the provisions of the Loan Pool Agreement with the First Florida Governmental Financing commission consisted of the following at September 30,1993: Loan Pool Agreement Debt Service: Investments Held by Escrow Agency (Primarily Alachua County, Florida Revenue Bonds) $ 525,350 Accrued interest Receivable on Investments 5.743 $ 531.093 Note (3J) Current Liabilities Payable from Restricted Assets As of September 30, 1993 with comparative figures for 1992, the current liabilities payable from restricted assets of the Enterprise Funds were as follows: September 30. 1993 September 30, 1992 Accounts Payable $ 12,304 Construction Contracts Payable 543,014 152,046 Accrued Interest Payable 1,710,467 1,747,616 Due Other Funds Current Portion of Long -Term Debt (Revenue Bonds) 2,642,198 2,447,928 Customer Deposits 2,667,041 2,651,620 57.562.720 $7.011,514 Note (4) Retirement Commitments Note (4A) Defined Benefit Pension Plans The City contributes to two single - employer, self - administered pension plans covering approximately three - fourths of ail City employees. The Employees' Pension Plan covers all permanent, full -time City employees who successfully pass the required physical examination, except for firemen employed prior to July 1, 1963, and certain nonclassified (primarily managerial) employees. The Firemen's Relief and Pension Plan covers ail firemen hired prior to July 1, 1963, who otherwise met eligibility requirements. The Employees' Pension Plan is authorized by and operates under the provisions of Chapter 26, Article III, Sections 26.30 through 26.49 of the Municipal Code of the City of Clearwater. Plan provisions have been duly approved as required by the voters in referendums, the most recent of which was held on November 8, 1988. The normal retirement benefit is a monthly benefit equal to 2 -1/2% of average monthly compensation for the final 5 years of service multiplied by the number of years of service to date of retirement. The minimum benefit under the plan is $300 per month. Eligibility for normal retirement occurs upon completion of at least 20 years of service and the attainment of age 55 or completion of 30 years of service for employees engaged in non- hazardous duty. For those engaged in hazardous duty, eligibility occurs upon completion of 20 years of service. The monthly benefits are payable for the life of the participant and continue, after the participant's death, to be paid at the same amount for 5 years to eligible surviving beneficiaries: after 5 years, the survivor annuity is reduced to 50% of the original amount. The plan also provides for disability and death benefits, vesting after completion of i 0 years of service and the refund of employee contributions in case of a non - vested termination. There is no provision for post retirement adjustments of benefits. Prior to June 27, 1993, participating employees were required to contribute 8% of their compensation. This percentage was reduced to 6% effective with the pay period ending June 27, 1993. It is the city's obligation to provide a sufficient additional contribution to maintain the actuarial soundness of the fund but, in any event, not less than the amount contributed by the participating employees. There are no other contributors to the plan. 43 "a �" CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 The Firemen's Relief and Pension Plan is authorized and operated under the provisions of Subpart B, Article I (Laws of Florida, Chapter 30658, 1955 and amendments), Sections 1 through 27 of the municipal Charter and Related Law of the City of Clearwater and Chapter 26, Article III, Sections 26.50 through 26.52 of the Municipal Code of the City of Clearwater. The normal retirement benefit is a monthly benefit in the amount of 50% of the prevailing wage at the date of retirement of the lowest rank held by the participant during the three years immediately preceding retirement plus 2% of such prevailing wage for each year of service in excess of 20 years up to a maximum of 60 %. Participants retiring at the age of 65 years are entitled to a benefit of 60% of the prevailing wage of the lowest rank held by the participant during the three years immediately preceding retirement. The ending rate of pay specified above may not exceed the highest rate of pay for the rank of Captain. Eligibility for normal retirement occurs upon completion of 20 years of service or attainment of age 65. The monthly benefits are payable for the fife of the participant and continue, after the participant's death, to be paid to certain eligible surviving beneficiaries at an amount that is one -half of the amount received by the participant. Benefits are also provided for children of the deceased participant who are under 18 years of age subject to certain limitations as to amount. The plan also provides for disability and death benefits and for vesting upon completion of at least 12 years of service. The plan provides for post retirement cost of living increases equal to the increase in the prevailing wage for the rank at which the participant retired with a limitation for those retiring on or after January 1, 1972 of 100% of the initial pension benefit for total cost of living increases. Participating employees are required to contribute 6% of their salaries up to the equivalent of the salary of a fireman holding the rank of Captain. The City is required to contribute a sufficient additional amount to maintain the actuarial soundness of the plan for a period of 35 years commencing January 1, 1972; this contribution is based upon, but not limited to, the amount that a levy of 6/10 of one mill of ad valorem tax would produce assuming assessed values of taxable property equal to the values of January, 1, 1972. As of the date of the most recent actuarial valuations, January 1, 1993, the current membership of the plans is as follows: Employees` Firemen's Relief Pension Fund and Pension Fund Retirees and Beneficiaries Currently Receiving Benefits 348 50 Terminated Employees Entitled to Benefits But Not Yet Receiving Them 9 Active Employees: Fully Vested 573 1 Nonvested 734 Total Number of Participants 1664 56 For the fiscal year ended September 30, 1993, the covered payroll for the Employees' Pension Fund and the Firemen's Relief and Pension Fund is $41,370,115 and $41,592 respectively; the City's total payroll for the same period IS $49,121,756. Each pension fund is accounted for as a pension trust fund; therefore each is accounted for in substantially the same manner as proprietary funds with a 'capital maintenance' measurement focus and employment of the accrual basis of accounting, Fund assets, primarily investments, are valued at cost or, in the case of certain credit instruments, at cost adjusted for the amortization of premium or the accumulation of discount for balance sheet purposes. Gains and losses on sales and exchanges of securities are recognized on the transaction date. As of September 30, 1993, neither the Employees' Pension f=und nor the Firemen's Relief and Pension fund held investments (either than U.S. Government or U.S, Government guaranteed obligations) in any 44 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 one organization comprising 5% or more of the net assets available for benefits. As of September 30, 1993, neither pension fund had investment type or similar relationships with any related party, including officers and employees of the Pension Plan, the sponsoring City of Clearwater, and organizations included in the reporting entity. In accordance with the requirements of Governmental Accounting Standards Board Statement No. 5, the most recent actuarial valuations as of January 1, 1993, utilize the actuarial present value of credited projected benefits in determining the pension benefit obligation at that date. This represents a standardized disclosure measure of the present value of pension benefits which takes into account the effects of projected future salary increases and any step -rate benefits that result from employee service to date. This measure is intended to assist in the assessment, on a going concern basis, of the funding status of the pension plan, including an indication of the progress being made in accumulating sufficient assets to pay benefits as they become due; it also facilitates making comparisons among employers. This measure is not required to be utilized in determining the contributions to fund the pension plan. Significant actuarial assumptions utilized in the actuarial valuations as of January 1, 1993, in the determination of the pension benefit obligation are as follows. Employees' Pension Fund (1) Assumed rate of return on investments of 7% per annum. (2) Projected salary increase at a rate of 5% per year, including both cost -of- living adjustments of 3% and merit or seniority increases at 2 %. (3) Mortality based on the 1983 Group Annuity Mortality Table for Males with female ages set back 6 years. (4) Pre - retirement withdrawals assumed to occur in accordance with standard scales of moderate turnover rates (Scale 255) for males and heavy turnover rates (Scale 355) for females. (5) Pre- retirement incidence of disability assumed to occur in accordance with a standard scale of moderate disability rates (Class 1, 1952 Inter - Company); rates for females assumed to be twice that for males. Firemen's Relief and Pension Fund (1) Assumed rate of return on investments of 6.5% compounded annually for both pre- and post - retirement. (2) Assumed salaries grow at annually compounded rate of 4% related to cost -of- living adjustments only. (3) Mortality based on the 1983 Group Annuity Mortality Table for both active and retired participant; assumed disabled participants will experience mortality according to PBGC Tables 3 and 4 for males and females, respectively. (4) Assumed no withdrawals will occur. (5) Assumed probability of an active participant becoming disabled is zero. (6) Assumed value of one mill of ad valorem tax will increase at rate of 5% per year.. 45 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 As of January 1, 1993, the pension benefit obligation based on the actuarial valuations is as follows The actuarial valuation of the Firemen's Relief and Pension Fund as of January 1, 1993 reflected several changes in actuarial assumptions. An investment yield of 6.5% for both pre and post retirement was assumed whereas the prior valuation assumed 8 %; the impact of this change is to increase the pension benefit obligation by S880,257. The 1983 Group Annuity Mortality Table for active and retired participants was changed from PBGC Tables 5 and 6 to PBGC Tables 3 and 4 for disabled participants; the impact of this change is to increase the pension benefit obligation by $349,170. Salary increase are assumed to increase at 4% per year due to inflation while the prior valuation assumed an increase of 6,5 %; this change had no impact on the pension benefit obligation separate from its impact on post retirement benefits since the one remaining active employee was assumed to retire on the valuation date. Post retirement benefits are assumed to increase at 5% per year whereas the prior valuation assumed an increase of 6.5 %; this change resulted in a decrease of S233,967 in the pension benefit obligation. There were no other changes in either benefit provisions or in actuarial assumptions affecting the actuarial valuations as of January 1, 1993 of either the Employees' Pension Fund or the Firemen's Relief and Pension Fund. It is the City's policy to fund pension costs accrued as determined on an actuarial basis. Required contributions for the Employees' pension Fund are calculated using the Entry Age Normal with Frozen Initial Liability method. The initial unfunded actuarial accrued liability determined at July 1, 1963 is being amortized over a 40 -year period; changes made in 1979 and subsequent years which have had the effect of either increasing or decreasing the actuarial liability are being amortized over 30 -year period from their effective dates in accordance with State law. Required contributions to the Firemen's Relief and Pension Fund are based on a variation of the aggregate actuarial cost method, under which the unfunded portion of the present value of the projected benefits is allocated over the present value of a 6.5% per year increasing annuity for the remaining years in the 35 -year funding period which begin January 1, 1972, pursuant to an agreement between the City and the Plan participants. For this purpose, the unfunded 46 u Employees' Firemen's Relief Pension Fund and Pension Fund Totals Retirees and Beneficiaries Currently Receiving Benefits S 49,246,414 $12,044,308 S 61,290,722 Terminated Employees Entitled to Benefits But Not Yet Receiving Them 896,393 896,393 Current Employees; Accumulated Employee Contributions 22 ,466,830 34,037 22,500,867 Employer- Financed Vested 67,290,421 400,265 67,690,686 Employer- Financed Nonvested 17.736,463 17,736.463 Total Pension Benefit Obligation 157.636.521 12.478,610 170.115.131 Net Assets Available for Benefits as of January 1, 1993 at Cost or Accreted Cost 168,417,367 2,907,448 171,324.815 Unfunded (Assets in Excess of) Pension Benefit Obligation 5(10.780,846) S 9,571.162 S (1.209.684) Net Assets Available for Benefits as of January 1, 1993 at Market Value $198.315,690 SS 3.223,760 S201.539.450 The actuarial valuation of the Firemen's Relief and Pension Fund as of January 1, 1993 reflected several changes in actuarial assumptions. An investment yield of 6.5% for both pre and post retirement was assumed whereas the prior valuation assumed 8 %; the impact of this change is to increase the pension benefit obligation by S880,257. The 1983 Group Annuity Mortality Table for active and retired participants was changed from PBGC Tables 5 and 6 to PBGC Tables 3 and 4 for disabled participants; the impact of this change is to increase the pension benefit obligation by $349,170. Salary increase are assumed to increase at 4% per year due to inflation while the prior valuation assumed an increase of 6,5 %; this change had no impact on the pension benefit obligation separate from its impact on post retirement benefits since the one remaining active employee was assumed to retire on the valuation date. Post retirement benefits are assumed to increase at 5% per year whereas the prior valuation assumed an increase of 6.5 %; this change resulted in a decrease of S233,967 in the pension benefit obligation. There were no other changes in either benefit provisions or in actuarial assumptions affecting the actuarial valuations as of January 1, 1993 of either the Employees' Pension Fund or the Firemen's Relief and Pension Fund. It is the City's policy to fund pension costs accrued as determined on an actuarial basis. Required contributions for the Employees' pension Fund are calculated using the Entry Age Normal with Frozen Initial Liability method. The initial unfunded actuarial accrued liability determined at July 1, 1963 is being amortized over a 40 -year period; changes made in 1979 and subsequent years which have had the effect of either increasing or decreasing the actuarial liability are being amortized over 30 -year period from their effective dates in accordance with State law. Required contributions to the Firemen's Relief and Pension Fund are based on a variation of the aggregate actuarial cost method, under which the unfunded portion of the present value of the projected benefits is allocated over the present value of a 6.5% per year increasing annuity for the remaining years in the 35 -year funding period which begin January 1, 1972, pursuant to an agreement between the City and the Plan participants. For this purpose, the unfunded 46 u CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 actuarial liability is determined after consideration of the available assets at the valuation date. The increasing fixed schedule produced by this method was established in 1988 and will be modified in the future only to the extent that a current valuation indicates a higher required cost level, or if the resulting cost level exceeds 60% of a mill in a current year. The significant actuarial assumptions that are used in computing actuarially determined contribution requirements are the same as those used in computing the pension benefit obligation. The actuarially determined contribution requirements for the City's fiscal year ended September 30, 1993, are based on actuarial valuations as of January 1, 1992. Since the City's contributions are made during its fiscal year, which commences nine months after the date of the actuarial valuations, the City, with approval of State regulatory authorities, is following the practice of adding interest to its required contributions at the assumed rate of return on investments for a period of one year in the case of the Employees' pension fund and for nine months in the case of the Firemen's Relief and Pension fund. Information relative to contributions is as follows: 47 Employees' Firemen's Relief Pension Fund and Pension Fund % of Current % of Current Year Covered Year Covered Payroll Amount Payroll Amount Required Contributions per Actuarial Valuation of January 1, 1992: Amount to Cover Normal Cost (includes) Estimated Expenses Which Are Paid from Pension Fund) 5.46% $2,258,868 1631.37% $678,518 Amount to Amortize Unfunded Frozen Initial Liability 2.63% 1,089,628 N/A Interest Adjustment to Compensate for Payments during Fiscal Year Beginning October 1, 1992 .07% 29.301 97.88% 40,711 8.16 % _$3,377.997 1729.25% $719,229 Actual Contributions during F.Y.E. September 30, 1993: Employer's Contributions Including Interest Adjustment 8.03% $3,322,567 1729.25% $719,229 Employees' Contributions 7.46% 3,086,651 6100% 2,496 State Insurance Premium Tax 5.54% 2,304 15.49 0,c S6.4�09.218 1740.791° $724,029 47 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Certain three -year historical trend information is required to be disclosed by Governmental Accounting Standards Board Statement No. 5. Employees' Firemen's Relief Pension Fund and Pension Fund Net Assets Available for Benefits Expressed as a Percentage of the Pension Benefit Obligation as of: January 1, 1991 101.88% 25.34% January 1, 1992 105.13% 24.73% January 1, 1993 106.83% 23.30% Unfunded (Assets in Excess of) Pension Benefit Obligation Expressed as a Percentage of Annual Covered Payroll as of: January 1, 1991 (7.04)% 23,518.25% January 1, 1992 (19.78)°% 23,502.98% January 1, 1993 (27.84)% 22,740.63% For the three most recent fiscal years, Employer Contributions, which have been made in accordance with actuarially determined requirements, represent the following percentages of Annual Covered Payroll: Fiscal Year Ended September 30 , 1991 10.72% 1,677.22% 1992 9.11°% 1,606.05°% 1993 8.03% 1,729.25% Governmental Accounting Standards Board Statement No. 5 requires the presentation, as supplementary information, of certain 10 -year historical trend information. Since the required standardized measure of the pension benefit obligation was not determined prior to the actuarial valuation as of January 1, 1988, the historical trend data that is dependent upon the amount of the pension benefit obligation is presented for only six years. The prescribed disclosures relating to revenues by source and expenses by type are presented for the most recent ten years. These disclosures are presented on pages 117 - 119 of the City's Comprehensive Annual Financial Report. Note (4B) police Supplemental Pension Fund A supplemental defined contribution pension plan exists for all eligible policemen which is funded by earmarked revenues received from the State. These revenues, which comprise the plan contributions of $535,571 in the year ended September 30, 1993, are obtained from an eighty4lve one hundredths of one percent (.85)% excise tax on the gross receipts from premiums collected on casualty Insurance policies covering property within the City's corporate limits. The contributions represent 5.71 °% of current year covered payroll. 48 ea Y CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30. 1993 The Police Supplemental Pension Fund is authorized by and operates under the provisions of Chapter 26, Article V, Sections 26.65 and 26.70 through 26.78 of the Municipal Code of the City of Clearwater and Chapter 185 of Florida Statutes. Under the plan provisions, the total monies received during each fiscal year, after payment or provision for ail costs and expenses of management and operation of the plan, are allocated to participants on the basis of the total number of shares to which each participant is entitled at the close of the fiscal year. Each participant is entitled to one share or a fractional share in the fund for each full year or a portion of a year of service as a police officer of the City, with fractional shares being determined by the number of days of service in each calendar year, assuming a 365 -day year. All police officers as defined in Section 26.70(g) of the Code of Ordinances of the City of Clearwater who are elected, appointed, or employed full -time by the City are eligible to participate in the plan. There are no employee contributions to the supplemental plan. Benefits are fully vested for a lump sum distribution after twenty years from the date of hire, with provision for partial vesting after ten or more years under the plan. Accumulated benefits are payable in full in case of death while employed by the City or in case of total and permanent job - related disability. Non - vested participants' account values upon termination of employment during any fiscal year are added to the monies received during that fiscal year for allocation to the remaining participants in the plan. For the fiscal year ended September 30, 1993, the covered payroll is S9,373,894; the City's total payroll for the same period is 549,121,756. During this period, there were no changes in plan provisions. As of September 30, 1993, the pension fund had no investment type or similar relationships with any related party including officers and employees of the Pension Plan, the sponsoring City of Clearwater and organizations included in the reporting entity. Since the entitlement to benefits is based entirely upon the allocation of monies received by the plan to the participants' share accounts, there is no actuarial liability on the part of either the State or the City. Note (4C) Firemen's Supplemental Pension Fund A supplemental defined contribution plan exists for all eligible firemen, which is funded by earmarked revenues received from the State. These revenues, which comprise the plan contributions, amounted to $359,128 in the year ended September 30, 1993, and are obtained from a one and eighty-five one hundredths percent (1.85 %) excise tax on the gross receipts from premiums collected on property insurance policies covering property within the City's corporate limits, The contributions represent 5.41 % of current year covered payroll. ■ As the plan is described as a money purchase pension plan whereby contributions ar allocated based on the number of days worked during the fiscal year ended September 30, and interest earnings allocated based on the beginning balances in each participant's account, there is no actuarial liability on the part of the State or City. The investments of the Pension Fund are managed by the NationsBank Trust Department. The Firemen's Supplemental Pension Fund is authorized by and operates under the provisions of Chapter 26, Article IV, Sections 26.53 through 26.62 of the Municipal Code of the City of Clearwater and Chapter 175 of Florida Statutes. (Eligibility requires two years of credited calendar year service as a firefighter with concurrent participation in the Employees' Pension Plan, There is no employee contribution to the supplemental plan, and benefits are vested for a lump sum distribution at ten years unless there Is early retirement, disability or death, Non-vested participants' account values upon termination of employment are reallocated among the remaining participants. 49 T CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL 'TATEMENTS SEPTEMBER 30, 1993 For the fiscal year ended September 30, 1993, the covered payroll is $6,637,416 the City's total payroll for the same period is $49,121,756. During this period, there were no changes in plan provisions. As of September 30, 1993, the pension fund had no investment type or similar relationships with any related party, including officers and employees of the Pension Plan, the sponsoring City of Clearwater and organizations included in the reporting entity. Note (413) Deferred Compensation Fund The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the City's opinion that it has no liability for losses under the plan, but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. In accordance with the requirements of GASB Statement No. 2, the operations of the plan are accounted for in an Agency Fund in the accompanying financial statements, with the invested assets being reflected therein at market value. Note (4E) Post Retirement Benefits The City provides no material post retirement benefits to retired employees or to their beneficiaries other than those described in preceding Notes (4A) through (4D), Note (b) Fixed Assets General Fixed Assets: A summary of changes in General Fixed Assets follows: Balance Balance Oct. 1, 1992 Additions Deletions Sept. 30, 1993 Land $28,453,216 S 2,583,698 $ 31,036,914 Buildings 14,531,883 915,742 15,447,625 Improvements Other Than Buildings 27,146,651 6,757,981 33,904,632 Equipment 17,212,441 2,321,397 S 510,423 19,023,415 Construction in Progress 7.797 463 1,066,206 7,797,463 1,066.206 595.141,654 S8.307,886 S100,478,792 50 1 `` CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 Donated Land: Land accounted for in the General Ffxe -' Assets Account Group includes a number of parcels that have been donated to the City. With respect to certain parcels, the instrument conveying We to the City contains restrictions as to the purpose for which the land may be used by the City, with the provision that title shall revert to the donor of such restrictions are not followed. Land subject to such restrictions is carried at estimated fair market value in the hands of the donor immediately prior to the donation; therefore, the valuation used does not reflect the impact the restrictions as to use might have on the fair market value of such land in the ownership of the City. Proprietary Funds: A summary of cost and accumulated depreciation of fixed assets of the Proprietary Funds at September 30, 1993 follows: Estimated Internal Useful Life Enterprise Service ears Land S 6,390,238 S 680,197 Buildings 11,096,546 2,918,975 10-40 Improvements Other Than Buildings 211,800,528 442,249 5 -50 Machinery and Equipment 8,114,269 25,373,261 1-33 Construction in Progress 15.714.200 92.042 253,115,781 29, 506,724 Less Accumulated Depreciation 58.946.217 17,568.733 Net $ 194.169.564 $11,937.991 Contributed Property: As of September 30, 1993, water lines having an estimated cost of S4,244,548, sanitary sewer lines having an estimated cost of 87,204,465, and storm sewers having an estimated cost of $3,832,365 are reflected in the balances of the proprietary fixed assets. Assets Recorded Under Capital Leases: Assets recorded under capital leases and the accumulated depreciation thereon (for proprietary fund assets) have been included under the appropriate categories in the summaries and schedules presented previously in this note in combination with similar information for owned assets. Note (6) Property Taxes ■ Property tax revenue is recognized in the fiscal year for which the taxes are levied provided the availability test is met, in conformance with NCGA Interpretation #3. Property taxes for the following fiscal year are levied by commission action in September of each year. This levy is apportioned to property owners based on the previous January 1 assessed values. Tax bills are mailed out on or about November 1, and the collection period runs from November 1 through March 31, resulting in almost 99% of the taxes being collected in the fiscal year for which they are levied, Since no taxes are ever collected prior to November 1, the City does not record deferred tax revenue for advance collections. Uncollected taxes receivable at year -end are recorded, with an appropriate allowance for estimated uncollectible amounts, The net amount deemed to be collectible but not current, Le., not expected to be collected within sixty days after the close of the fiscal year, is shown as a deferred revenue In the appropriate fund, All delinquent property taxes, except those levied specifically for the restricted purposes of financing activities accounted for in the Special Development Fund, are recorded in the General Fund, This is appropriate, since for several years the budgetary and accounting treatment has been to recognize the tax revenues in the General Fund and to reflect the required transfers to the appropriate debt service or pension fund as operating transfers from the General Fund to the appropriate fund, a CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 The City is permitted by State law to levy ten mills without referendum. Additional millage not subject to the ten mill limitation is authorized if approved by referendum. The tax rate for the year ended September 30, 1993 was 5.1158 mills, of which .0318 mills represent the levy for general obligation bond debt service as approved in voter referendums in prior years. The non -voted tax rate of 5.084 mills is well below the statewide ten mill limitation. Note (7) Segment Information for Enterprise Enterprise Funds funds which utilities (water and sewer, gas, solid waste, and The City maintains nine stormwater), toll bridge, marina, parking, provide pier fishing, and office rental.. Segment information for the year ended September 30, 1993 was as follows: Depreciation Net and Operating Operating Net Contri- Operating Amortization Income Transfers Income butions Revenue Expense Loss In (Out). jq§§1 During Year Water and Sewer 530,253,328 $3,717,463 $ 7,684,493 $ (1,143,354) $ (961,521) $ 688,549 Gas 12,192,509 583,422 2,273,532 (682,904) 1,465,511 879 Solid Waste 12,633,424 337,288 1,412,809 (500,870) 1,213,679 368 262,978 Stormwater 3,390,461 647,941 930,042 (465,930) 582,571 Toll Bridge 1,639,827 560,997 467,042 442,167 Marina 1,531,243 83,419 (49,385) 99,109 Parking System 2,240,469 147,141 29,163 (405) (177,649) 21,000 18,024 (440,286) 1,820,160 Pier 60 140,646 Atrium 860.153 470.860 480.859 6.643,597 $64.882.080 56,106.834 $13.011.339 52.772.058 52.9 00.113 $9.416 531 Long -Term Unre- Debt Out- stricted Additions Deletions standing Net to to Excluding Working Plant and Plant and Total Current Capital Fund Equipment Equipment Assets Portion JQef1JcftJ Equity Water and Sewer $ 7,969,497 $ $199,847,725 $87,518,549 $17,367,749 $104,116,406 9,983,519 Gas 1,861,224 20,709,857 7,927,671 1,131,224 Solid Waste 265,082 (56,762) 6,855,550 311,464 2,948,331 3,188,773 5,503,864 14,571,350 Stormwater 620,457 Toll Bridge 603,231 (5,960) 14,622,847 7,357,638 1,861,587 617,058 5,078,250 Marina 34,094 130,588 (47,656) 1,701,219 5,154,865 186,330 1,595,135 429,632 353,796 1,394,777 3,722,793 Parking System Pier 60 893,439 (269,184) 2,612,764 (22,382) 2,138,437 Atrium 6,643.597 $19.021.209 _ _ 7.280,380 §(379,562 $2�_ 66_142,845 4801859 $99,400 736 526 495_.040 7.124,456 153 85 sz CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (8) Interfund Payables and Receivables (Current) As mentioned in Note (1C), individual fund deficits in the consolidated cash pool have been reclassified as of September 30, 1993 as interfund loans from the Capital Improvement Fund, which was selected by management for this purpose. This reclassification results in a corresponding reduction in the cash equity in the Capital Improvement Fund, offset by an increase in interfund receivables. The amounts of the reclassified cash pool deficits, as well as other individual fund interfund payable and receivable balances (current), at September 30, 1993 were as follows: Fund General Fund Capital Projects Fund: Capital Improvement Enterprise Funds: Water and Sewer Utility Gas Utility Solid Waste Utility Stormwater Utility Toll Causeway and Bridge Yacht Basin and Marina Parking System Pier 60 Internal Service Funds: Garage Administrative Services General Services Central Insurance Net Interfund Receivables Net Interfund Pavables Deficit in Other Deficit in Other Pooled Cash Receivables Pooled Cash Pavables $3,917,384 15,000 11,616,880 1,457,562 1,230,382 2,731,707 393,196 311,713 400,113 1,566,765 1,490,336 23,000 250,000 33.719 $3,917,384 $21,520,373 S 129,184 21,271,923 $1,400,228 104,266 15,000 15,167 2,043,733 458,256 $3.917.384 $21,520,373 Note (9) Contingencies and Commitments Utilities Services Tax Revenues Utilities Services Tax Revenues of the General Fund are pledged as security for the Public Service Tax and Bridge Revenue Bonds, Series 1985, PACT._ Inc. As more fully disclosed in Note 17, the City has contingently guaranteed $1,000,000 plus accumulated interest on a 1981 $5,500,000 mortgage note used for the construction of Ruth Eckerd Hail. As of September 30, 1993, the remaining principal balance on the mortgage was $4,548,000, and the amount of the City's guarantee, including interest, was approximately $2,206,267. As indicated in Note 17, PACT, Inc. and its related fund raising arm, The Performing Arts Centel' Foundation, Inc., had combined net increases in fund balance for the fiscal year ended September 30, 1993, marking only the fourth consecutive year this has happened. These results continue to be achieved through efforts on the part of PACT management to increase fund raising and reduce expenditures. City management does not consider it probable that this guarantee will be called, anti, accordingly, no amounts have yet been accrued or otherwise recorded on any of the accompanying financial statements to reflect this possibility. 53 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEM6ER 30 1993 Contingent Loan Guarantee On March 30, 1992, the City Commission approved a contingent loan guarantee of S1 million for the Chi Chi Rodriguez Youth Foundation, Inc. for the purpose of refinancing existing foundation debt which was used to construct a golf course on a parcel of City owned land. The new foundation loan totals $2,5 million. In the event of default, the City is obligated to contribute S1 million out of legally available non -ad valorem revenues. in addition, the City has the option to retire the entire unpaid balance and assume ownership and operation of the golf course facility. The foundation is currently operating the course at a profit and expects to be able to meet all debt service payments. At the present time, management does not consider it likely that the City's guarantee will be invoked. Note (10) Individual Fund Notes Note (10A) Capital improvement Fund The Capital Improvement Fund was created administratively to provide for combined accounting presentation of all capital projects from the City's various fund sources, except those projects financed from bond proceeds where bond ordinance provisions require the segregation of bond proceeds in separate funds. The majority of the resources of the Capital Improvement Fund are provided by transfers of capital project appropriations from source funds. The appropriations are held and invested for the benefit of the source funds until the projects are completed or canceled, at which time the asset values are transferred back to the source fund or to the General Fixed Assets Account Group, as appropriate, and any unspent monies are returned to the donor fund. Transfers from the Proprietary Funds and expenditures for capital projects of such funds are not reflected in the Combining Statement of Revenues, Expenditures and Changes in Fund Balances of the Capital Improvement fund, but are reflected when expended as fixed assets in the respective Proprietary Funds. Note (106) Water and Sewer Utility Fund Contractual Commitment Under the terms of a 30 -year contract between the City and Pinellas County which is effective through September 30, 2003, the City is required to purchase a minimum of 4 million gallons of water per day on an annual average basis from the County within each calendar year, with a maximum amount of water available to the City of 10 million gallons per day on an annual average basis. The current rate at September 30, 1993 charged by the County, which is set by the Board of County Commissioners, is $1.3254 per 1,000 gallons, including a 5.30 per 1,000 gallons surcharge designated by the supplier for funding capital projects. The cost of water purchased from the County during fiscal years 1993 and 1992 was S5,901,265 and 56,247,788, respectively. Note (10C) Toll Causeway and Bridge Fund During the 1958 fiscal year, the City engaged the engineering firm of David Volkert & Associates to perform a comprehensive analysis and recommendation regarding the future of the Clearwater Pass Sridge. Their report, dated August 1998, recommended replacement of the existing bridge with a high level, fixed bridge, currently estimated to cost S17 million. The City applied to the State of Florida for funding assistance, and this project is included in the state's five -year capital improvement program, with construction scheduled to begin in January 1994. The City currently anticipates the new bridge opening to traffic in January 1996. Since state funding will require no tolls and no debt on the new bridge, the City adopted toll increases effective October 1, 1988, which are projected to generate funds sufficient to defease all remaining bridge debt before the new bridge is open to traffic. 54 .r.. _ CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1993 As a result, the City anticipates termination of operation of the existing toll bridge, and depreciable lives on all assets have been shortened as necessary to accomplish full depreciation on September 30, 1995. It is currently expected that nondepreciable assets, consisting of bridge approaches (cost $170,943) and constructed jetties (cost $3,051,366) will be transferred to the General Fixed Asset Account Group, at cost, on the date the existing Bridge ceases operations. Note (1 OD) Atrium Fund During fiscal year 1993, the City purchased an office tower in downtown Clearwater which was originally intended to be used as a consolidated city hall facility. However, changes in the composition of the City Commission reversed that decision and the building was offered for sale. In the meantime, the office tower was operated as an enterprise fund, leasing space in the building to numerous clients. The lease agreements have up to eight years remaining until the expiration of the leases. Minimum future rentals on noncancelable leases as of September 30, 1993 are as follows: Year Endino Sept. 30 1994 51,088,087 1995 840,651 1996 576,292 1997 166,650 1998 166,650 Note (10E) Garage Fund The Garage Fund is an Internal Service Fund which provides motorized vehicles and related services to other City departments. Charges to user departments have been set in excess of actual expenses incurred to enable the fund to accumulate resources for the stated purpose of replacing the fleet as required. This policy has been clearly articulated and has been consistently followed by City management. It is consistent with annual budgets for the Garage Fund presented to and adopted by the Clearwater City Commission. Note (11) Fund Deficits The General Services Internal Service Fund had an unreserved accumulated deficit of $318,961. This deficit results primarily from differences between the projected costs of services rendered by this fund upon which departmental billings are based and the actual costs of such services; adjustments in future billings will eventually eliminate the deficit, The Pier 60 Enterprise Fund has an unreserved accumulated deficit of 5599,400. Note (12) Residual Equity Transfers Between Funds Residual equity transfers out for all funds consisted of 58,726,735 net contributions to Proprietary Funds with credits being made directly to contributed capital accounts in the appropriate funds. dW CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (13) Contributed Capital - Proprietary Funds The changes in contributed capital of the City's proprietary funds during fiscal year 1993 were as follows: Water and Sewer Gas Solid Waste Stormwater utility utility utility utility Pier 60 Atrium Fund Fund Fund Fund Fund Fund Additions: Contributions from: $ 262,978 $1,820,760 $6.643597 Other Funds Federal and State Grants Developers $ 208,458 Property Owners 75,069 $ 879 $ 368 Other Governmental Entities 405.022 262878 1,820,tfi0 6,643,597 Total Additions 688,549 879 366 Contributed Capital, October 1, 1992 62.855.373 635.380 207.055 12.554.464 917.677 Contributed Capital, September 30, 1993 563.543 922 5 63a" ".259 8207 423 $12,817.44 $2.7 56.643.597 The City's other proprietary funds had no change in contributed capital during fiscal year 1993. Note (14) Subsequent Event In November 1993 the City sold the office tower it had purchased in March 1993 located in downtown Clearwater. The building sold for the original purchase price of $6.45 million. The original intended use for this building was as a consolidated city hall facility. Changes in the composition of the City Commission reversed this decision and the building was sold. This building was accounted for as the Atrium, an enterprise fund. Note (15) Pending Litigation There is pending against the City a class action suit brought by approximately 130 current and former employees alleging violations of the Federal Age Discrimination in Employment Act. Prior to 1988, employees who were age 45 or older on the date of hire were considered ineligible to participate in the General Employees' Pension Plan, and were enrolled in social security instead. The age 45 exclusion was deleted in 1988 by a pension plan amendment approved by the voters at referendum, as required by the pension ordinance. Outside counsel engaged by the City has estimated that the City's chances of incurring some loss as a result of this lawsuit is probable, Therefore, we have accrued an amount which we feel to be reasonable in the Central Insurance Fund, an Internal Service Fund. In addition, there is pending against the City a case related to a Clearwater Police Department Swat Team shooting brought by the heirs of the decedent. The City is vigorously defending the acts of the City and its employee's as reasonable and justifiable under the circumstances. This case will likely be determined based upon sympathy and passion, regardless of jury instructions to the contrary. Outside counsel engaged by the City has estimated that if the jury should rule against the City, tho °rdict c.uuld be up to $2.5 million, plus attorneys fees and costs that could range up to S250,000. Because the loss is neither probable, nor reasonably estimated in amount, no liability has been recorded on the accompanying financial statements. In the normal course of operations, the City is also a defendant in various other legal actions, the ultimate resolution of which is not expected to have a material effect on the financial statements, other than for amounts which have already been reserved and recorded as liabilities in the Central Insurance Fund, 56 CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Note (16) Extra ordin.; ry Item The Water and Sewer Financial Statements reflect an extraordinary item, 'Loss on Advance Refunding' of 55,145,536. This results from the sale of the Water and Sewer Revenue Bonds, Series 1993, which sold on April 15, 1993. The 1993 Bonds were sold exclusively to refund the outstanding 1988A and 1988B Water and Sewer Bonds, to take advantage of significantly lower interest rates. The analysis prepared by the City's Underwriter showed a total reduction in overall debt service of $2,879,712, with a present value savings of S1,619,860. Note (17) Joint Venture With PACT, Inc. PACT, Inc, is a nonprofit corporation which was formed in 1978 for the purpose of financing, constructing, and operating a performing arts center on a parcel of donated land located in east Clearwater. In 1981, the City of Clearwater guaranteed S1,000,000 of the first mortgage obtained locally by PACT to construct Ruth Eckerd Hall, which subsequently opened in 1983. In addition, the City of Dunedin guaranteed $1,000,000, Pinellas County guaranteed 51,000,000, and Herald Company, a local corporation, guaranteed $1,500,000. The City's guarantee takes priority over the other guarantees, and increases each year by an amount determined by multiplying the current mortgage interest rate times the previous guarantee amount. As of September 30, 1993, the total amount of the City's guarantee was approximately $2,206,267. The City has also entered into a cancelable agreement to make a $400,000 per year facility use payment to PACT, in return for which the City reserves the right to rent the facility on 200 occasions per year at substantially reduced rental rates. Under certain circumstances, the agreement also provides that the City is entitled to receive a portion of PACT operating surpluses, after deducting operating and debt service expenditures. Ultimate title to the physical facility will revert to the City upon retirement of the mortgage, but PACT, Inc. will continue as a separate corporate entity, which may agree to continue operations at the same location leasing the facility from the City or they may choose to continue operations at a different location, The City also owns and maintains a parking facility at the PACT site which is leased to PACT, inc. The current five -year lease extends from October 1, 1993 through September 30, 1998, and provides for annual payments of S132,940 adjusted for subsequent increases in the City's estimated cost of operating the parking facility. Actual lease payments were approximately $126,848 for fiscal year 1993, On October 1, 1988 a reorganization created an additional corporate entity subsequently renamed The Performing Arts Center Foundation, Inc. ('the Foundation'), This new corporation was created to serve as the fund raising arm of PACT, Inc. As a separate corporate entity, the Foundation can provide assurances to potential contributors that contributions and endowments will be safeguarded and used only in accordance with the contributor's wishes. Some assets previously owned by PACT but restricted, were transferred to the Foundation at net book value, as were many of PACT's liabilities, primarily deferred revenue from future pledges and short term debt other than mortgages. The Foundation has provided operating grants to PACT, inc. for fiscal years 1993 and 1992 in the amounts of $993,268 and $1,074,289 respectively. in March of 1990, the boards of the Foundation and PACT became totally separate entities, and each entity has provided separate audited financial statements since that time. Even though the City's contractual relationship is only with PACT, Inc., management believes that financial information from both related entities is relevant in assessing PACT's overall financial condition and its potential impact on the City, As discussed in Note 1(A), City management does not believe there is sufficient evidence of oversight responsibility to warrant inclusion in the City's comprehensive annual financial report as a component unit, however, the relationship may meet the definition of 'Joint Venture' under NCGA Statement No, 7. Accordingly, the following summary financial information has been extracted from the separate audited financial statements for the year ended September 30. 1993, and is not included anywhere else in this report. CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Performing Arts Center PACT Foundation Inc. Inc. Total in 000's in 000's in 000's Year Ended September 30, 1993 Financial Data Summary: $ 9,593 $ 7,663 $ 17,256 Total Assets Total Liabilities 7,639 2,835 10,474 Fund Balances (Deficit)- Unrestricted (1,772) 375 (1,397) Fund Balances - Restricted 3,725 4,452 8,177 Revenues - Unrestricted 6,272 1,314 7,586 Revenues Restricted - 1'188 1,188 Total Expenses 6,886 1,500 8,386 Foundation Grants to PACT 993 (993) - Net Change in Fund Balances (485) 1,242 757 Outstanding Debt Summary: 170 Current Mortgage Maturity 170 - Non - Current Mortgage Balance 4,378 4,378 Year Ended September 30, 1992 Financial Data Summary: 9,199 7,078 16,277 Total Assets Total Liabilities 6,760 3,492 10,252 Fund Balance (Deficit)- Unrestricted (1,466) 375 (1,091) Fund Balance Restricted 3,905 3,211 7,116 Revenues - Unrestricted 6,146 1,394 7,540 Revenues - Restricted - 951 951 Total Expenses 6,791 1,675 8,466 Foundation Grants To PACT 1,074 (1,074) - Net Change Fund Balance (371) 670 299 Outstanding Debt Summary: 1 Line of Credit - Secured - 1 157 Current Mortgage Maturity 157 - 4,547 Non - Current Mortgage Balance 4,547 i The line of credit is collateralized by pledged contributions receivable. This mortgage is collateralized by the land and the original building, with secondary guarantees from the City and others, as described above. 58 "# C" CITY OF CLEARWATER INDEX TO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30 1993 Since none of the other contingent guarantors on the mortgage possess any residual equity interest in the property, and none, other than the City, have any annual use payment commitment, it appears that only the City, and PACT, Inc., could be considered participants in the joint venture, although it is not possible to assign a 'participation percentage' to the City. It is also not possible to determine the City's share of assets, liabilities, equity, or changes therein during the year. PACT, Inc., selects its own management and Board of Directors, and the City has no control over budgeting and financing other than the indirect influence that its annual facility use payment and contingent mortgage guarantee may provide. The recent existence of the Foundation serves to stabilize the projected operations of PACT, Inc., and in the opinion of management provides additional assurances of its ongoing financial viability. 59 J L s' r-= 60 ENTERPRISE FUNDS Enterprise Funds are used to account for the financing, acquisition, operation and maintenance of governmental facilities and services that are supported primarily by user charges. Water and Sewer Utility to account for the financing, construction, operation and maintenance of the water and sewer services of the City from charges made to users of the service. The service area for water and sewer extends beyond the City limits. Gas Utility to account for the financing, construction, operation and maintenance of the gas service of the City from charges made to users of the service. The service area for gas extends beyond the City limits. Solid Waste Utility to account for the financing, construction, operation and maintenance of the sanitation service of the City from charges made to users of the service. The service area for sanitation is coterminous with the City limits. Stormwater Utility to account for the financing, construction, operation and maintenance of the stormwater management system of the City from charges made for each developed property. The stormwater management area is coterminous with the City limits. Toll Causeway and Bridge to account for the financing, operation and maintenance of the toll bridge crossing Clearwater Pass, from tolls paid by users of the bridge. Yacht Basin and Marina to account for the financing, operation and maintenance of the 2D5- slip City marina and associated real property on Clearwater Beach from rents collected from users. Parking System to account for the financing, construction, operation and maintenance of the City's parking system, including on- and off- street parking on Clearwater Beach and Downtown Clearwater from parking charges. Pier 60 to account for the operation and maintenance of the fishing pier from user charges. This fund was closed for reconstruction for most of fiscal year 1993. Atrium to account for the operation of the office tower temporarily owned by the City in downtown Clearwater, This building was purchased in fiscal year 1993 and sold in fiscal year 1994. elu,,r'.`cr r CITY OF CLEARWATER, FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEET SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 ASSETS Current Assets: Cash on Hand and in Banks Equity in Pooled Cash and Investments Cash with Escrow Agent Accounts and Contracts Receivable: Billed Unbilled Charges Estimated Less: Allowance for Uncollectible Accounts Total Receivables, Net Due from Other Funds Due from Other Governmental Entities Inventories, at Cost Prepaid Expenses and Other Assets Total Current Assets Restricted Assets: Equity in Pooled Cash and Investments Due from Other Funds Due from Other Governmental Entities Investments, At Cost or Amortized Cost (Market Value, $3.348.248 for Water and Sewer, $797,813 for Gas, $71.910 tar Solid Waste, $651,833 for Toll Causeway end Bridge, $42,427 for Yacht Basin and Marina, and 5333,718 for Parking System) Interest Receivable Total Restricted Assets Advances to Other Fund Deferred Charges Property, Plant and Equipment, Net of Accumulated Depreciation Soo accompanying notes to Financial Statemarlts. Water and Sewer Gas Solid Waste Utility Utility_ _ utility $ 325 400 200 9,724,297 16295 1,215,365 1,471,564 675,118 629,693 1,479,800 5413.600 596•400 2,951,364 1,258,718 1,226,093 (133,816) (50,335) (49,479) 2.817.548 1,208.383 1,176,614 6,564,840 1,457,562 1,208,013 429,663 99,508 337.963 564,368 59856 8,812 19,880,492 3.239,525 3,699,700 19,556,090 1,303,858 288,853 5,052,040 22,369 769 5,073,266 762,194 67.801 143.055 16295 736 29,825,220 2.082,347 379,759 312,796 1,595,533 204,935 148,233,684 15,183,050 2,776,091 Si 199847.725 _ 20 709.857 6855.550 _ t Page 1 of 2 1.:.� < uo Toll Yacht Causeway Basin Totals Stormwater and and Parking Pier Utility Bridge Marina System 50 Atrium 1993 1992 15.500 900 2,800 20,125 20,525 687,285 395.326 221,321 43,079 636,783 12,923,456 4,030,227 293 168,801 2,945,176 3,069,163 273,500 2,933,300 2.637,051 442,301 5,878,476 5,706,214 (13.264) (246,894) (172,758) 429,037 _ 5,631,582 5,533,456 2,123,948 393,196 311,713 400,113 12,459,385 15,293,834 25,210 554,381 319,887 10,000 15,810 8,839 936,980 1,038,452 14,668 27,625 3,240,270 814,022 549,744 480,041 636,783 32.540,577 26,264,299 979.902 815,309 22,944,012 27,908,516 607;759 1,566,765 7,248,933 4,990,806 769 141,646 562,394 40,359 287,947 6,793,961 6,603,278 17.448 437 8,933 186,904 188,645 607,759 1,559,744 40,796 1.112.189 1,566,765 37,174,579 39,832,891 144,861 457,657 171,838 1,800,468 1,797,127 10,774,818 4.983,872 1,110,679 3,417,774 1,045,999 6,643,597 194,169,564 181,472,165 14,622.647 7,357.638 1.701.219 5.154.865 2. 12 .6764 7.280.380 266.142.845 249,538.320 1.:.� < uo CITY OF CLEARWATEM FLORIDA ENTERPRISE FUNDS COMBINING BALANCE SHEET. Continued SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 Water and Sewer Gas Solid Waste Utility Utility _ Utility LIABILITIES AND FUND EQUITY Current Liabilities (Payable from Current Assets): S 1,404,440 411,821 340,568 Account and Contracts Payable 475,790 156,308 258,711 Accrued Payroll 65,609 14,534 Accrued Interest Payable 104,266 Due to Other Funds 1,400.228 Due to Other Funds (Deficit in Pooled Cash) Deposits Current Portion of Lang —Term Liabilities'. 64.000 Revenue Bonds 7,904 35,678 35.678 73,556 Notes, Loan Pod Agreement and Acquisition Contracts 751,369 Total Current Liabilities (Payable from Current Assets) 2,512,743 2.108,301 Current Liabilities (Payable from Restricted Assets): Accounts Payable Ccnstruc9on Contracts Payable 91,069 Accrued Interest Payable 1,W6,836 63,300 Current. Portion of Lang —Term liabilities, Revenue Bonds 2,321,000 1,751.122 627,066 288.853 Customer Deposits To Curren Liabilities (Payable from Restricted Assets) tal 5,700,027 690.366 268,853 Total Current Liabilities 8,212,770 2,798,667 1,040,222 Long —Term Llabit'r w, Excluding Current Portion: 86,423,339 7,507,953 63.650 Revenue Bonds Notes, Loan Pod Agreement and Acquisition Contracts 11,915 106,922 247,814 Interest Earnings Rebatable to U,S. Treasury 1,083,295 Advances from Other Funds 87,518,549 312.796 7,927,671 311,464 Total Long -Term Liabilities Total Uabii'rties 95,731,319 10,726,338 1,351,686 Contributed Capital: 379,887 610,930 116,861 Other Funds 17,661,858 90,194 Federal and State Grants Developers 32,763, 466 4,267,398 25,329 368 Property Owners Other Governmental Entities 8,471,313 63,543,922 636,259 207,423 Total Contributed Capital Retained Earnings: Reserved for: Revenue Bond Requirements: 7,192,227 721,030 68.537 Debt Service Sinking Fund — Term hiaturities 2,857,266 Renewals and Replacements 3,274,714 13,324.207 300,000 1,021,030 68,537 27,248.277 8,326,230 5,227,904 Unreserved 40,$72,48.1 9.347.260 5,296,44( Total Retained Earnings (Deficit) 104,116,406 9,983,519 5,503,864 Total Fund Equity 1491847 725 0 7 0 918 57 _ 6.8551550_ _2 See accompanying notes to Financial Statements Y Page 2 of 2 14,622.647 �7�357 63E! t�70�19, $ 15,0,965 _ 2.612,7fr4 7,280180 - 26614142 845 249.538.320 Toll Yacht Causeway Basin Totals Stormwater and and Parking Pier Utility Bridge Marine System 60 Atrium 1993 1992 10,766 95,625 6,700 45,778 137,441 2,453,139 1,465,842 40,731 69,244 38,494 35,124 7,215 1,081,617 951,507 2,861 83,004 9,345 15,000 119,266 536,328 15,167 1,415,395 1,970,763 11,894 5,693 18,483 36,070 17,256 32,095 39,650 694,745 548,424 45,163 162,301 158,503 51,497 196,964 120,112 126,245 22,382 155,924 6,045,537 5,657,968 12,304 451,945 543,014 152.046 60,362 49,969 1,710,467 1,747,616 160,475 160,723 2,642,198 2,447,928 2,667,041 2,651,620 220,837 210,692 451,945 7,562,720 7,011,514 51,497 417,801 120.112 336,937 474.327 155,924 13,608,257 12,669,482 1,861,587 1,595,135 97,451,664 94,240,077 141,006 507,657 667,934 1,083,295 1,083,295 45,324 358,120 60,324 1,861,587 186,330 1,595,135 99,400,736 96,051,630 51,497 2.279,388 306,442 1.932,072 474,327 155,924 113,008,993 108,721,112 12,817,442 632,281 1,777 753,581 2,730,717 6,643,597 24,687,073 15,960,338 7.120 .17,759,172 17,759,172 32,763,466 32,555,008 225,822 232,002 4,750,919 4,674,603 8,471,313 8,066,291 12,817,442 858.103 233,779 753.581 2.737.837 6,643,597 88,431,943 79,015,412 429,011 40,796 478,515 8,930,116 12,727,777 562,394 288,081 3,707,741 3,705,332 345,437 135,035_ 41055,186 2,249,572 1,336,842 _40,796_ 901431 _ 16,693,043 18,682,681 1,753,908 2.863.305_ 1.120,202 1,567,581 (599,4,00) 480,859 48,008,866 43,li9,115 1,753,908 4,220,147 f.,160,998 2.469,212 (599,400) _ ,480,859 64,701,909 61,861,796 14.1;71.350 _9074,250 1,394,777_ 3,222,793 2.138,437 7,124,456 -153,133,652 140.817,209 14,622.647 �7�357 63E! t�70�19, $ 15,0,965 _ 2.612,7fr4 7,280180 - 26614142 845 249.538.320 CITY OF CLEARWATER, FLORIDA ENTERPRISE FUNDS CoM61NING STATEMENT OF REVENUES, D(PENSFS AND CHANGES W RETAINED EARNINGS YEAR ENDED SEPTEMBER 30 1993 WR}i COiAPARATIVE TOTAL FIGURES FOR 1992 Water surd Sawar Gas Solid Waal* Utility _ Utility _ Utility Operating Revenues: S 29,781,$04 17,790;685 12,570,081 Sal" to Customers 471,434 401,824 53,343 Swvice Charges to Customers User Charges to Customers RenorAs Total Opsrating Revenues 30.2536328 12,192.500 12.633,424 Operating Experts": Persanalsetvices 4,706,729. 2.069,068 3,496,873 Purchases for Resale 51901.265 ' 4.760.589 Operating Materials and Supplies 1.318,499 211,137 105.591 Tr roportation 170.434- 282.562 1.957,829 Utility Service 1.188,626 , 46,117 32,567 Solid Waste Dumping Charges 3,817,836 Deprendation 3,605,575 553.996 335,514 Intnrfund Administrative Charges 3,062,307, 789,151 1,001.154 Otl,w Current Charges: Professional Fees 487.894 184,053 69,697 Advertising. 130,109 Communications 119,145. 84,592 66,789 Printing and Binding 5.080 Insurance 04,970• 120,000 88.210 Repairs and Maintonanee 1,690,544 113,726 136,905 Rentals 5,932 Miseellar*= 113,976 42,225 58,004 Amortization Data Processing Charges 31,740- 20,150 24,210 Taxas 471,200 Provision for Estimated Uneollectible Accounts 97,131 29.290 28,436 Total Other Current Charges 216351400 1206,357 473,151 Total Operating Expenses 22.588.835 9.918.077 11.224.615 Operatingln orno (Loss) 7,684,493 2,273.532 1,412.809 Nonoperatin9 Revenues (Expenses): Earnings onInvsatrrwft 2.568,860 145.307 127,493 Intarest Expense and Fracal Charges (4,953.043) (465.287) (48,511) Amatimtionof Bond Discount and Issue Costs (111,888)• (29.425) (1.774) Gain (Ions) on Exohango of Assets Lcacssfrom nMftedowns and Replacements of Fixed Assets Recycling Program Incentive Grant �' O'w 138.947 224.289 125.048 (2.957,124) (125,117) 301,740 Income (Loco) Before Operating Transfers 5,327,369 2,148,415 1,714,540 Operating Transfers In (1,143,354) (682,9pd) (500.870) OperatingTmnsforsOut (1,143.354) _ (682.904] (500.870) Netlncomo (Loss) Before Extraordinary Item 4,184.015 1,465,511 1;213,679 Extraordinary Item - Loss on EwV Extinguishment of Debt 5,145,536 Net Income (Loss) (961,521) 1,4851511 1,213,679 Retained Earnings (DefiCi), Beginning of Year 41,534,005 7,881,749 4,082,782 ResiduAl EqultyTr6nsfer In ��-- Retained Earnings (Defect), End of Year #_. 40.572.484_ 97.260 5.294.441. See accompam/ind not21 to Financial Statements. (5J45,S36) 592,571 442,167 99,169 18,024 (440,286) 480,659 2,900,113 5,601,709 1,171,337 3,7n.96o 1,051,889 2,451,168 (159,114) 61,801,796 55,132$63 67.144 1.75J7 908 4320.147. .1.180.098_ 2.46 ®.212 1590.400) 480.859 84.701.900 _6160J 708 4� / �I 3 708 Yacht Gaus~y Basin Totak Skorm"Ll r and and Parldng Pier Uti&ty Bridge Marina System ---S- Atrium 1093 1992 3. 370, 749 843 ,881 57,788 58,415,078 53,058,329 19,732 116,310 1,072,652 858,170 1,639,827 30,701 2,118,912 82,868 13,648 3,894,958 3,528,216 647,687 5,238 848,505 1,499.404 663,387 3.390,481 1,630,827 1,531,243 2.240.469 140 ,858 860,153 64,882,090 59,008,102 923,858 363,743 470,081 519,922 100,150 12,650,422 12,400,107 650,501 39,350 11,351,705 10,928,463 180,997 10,377 35,640 50,051 5.273 5,019 1,022,684 1,808,250 185,558 498 8,244 19,736 2,622,881 2,911,039 7,158 94,103 20,118 4,401 108,783 1,479,871 1,411,428 3,817,838 3,648,614 647,041 550,128 82,558 139,373 29,153 5,944,248 5,629,034 380,748 82,848 136,560 992.640 0,670 10,847 6.485,923 6,083,876 88,884 91,516 12,345 313,142 111,878 172,554 1,529.963 678,992 4,368. 1,807 13,412 149,696 94,752 12,460 1,661 8,478 16,443 381 307,949 307,800 324 5,404 8,150 7,610 37,580 5,880 3,350 365,550 889,240 7,171 26.528 17,036 25,164 2,277 2,584 2,021.935 421.214 24,071 1,130 126.203 5,598 5,778 168,712 150,909 16,765 4,989 17,850 8,472 3,870 4,089 271,109 148,875 68,988 3,350 1,850 7,570 3,880 375 93,035 90,430 200 50 753 68,227 540,430 411,805. 11,561 161,418 207,250 141,341 158,035 104,941 499,034 130.298 266,644 5.615.201 3.468,255 2,480.439 1,172.785 1,580.828 2.240,874 318,305 389:293 51,870,751 48,579.156 930.042 487,042 (49.385) (405) (177.649) 470,880 13,011.339 10,428,946 118,459 134,954 32,907 138,591 1,129 0,099 3,277,69 3,110,787 (148,975) (17,045) (163,556) (5,797,317) (5,250,173) (10,889) (861) (7.788) (162,586) (159,404) (8, =55) (269,184) (269,184) 99,484 230,038 15 134.393 30,162 6.418 658.272 351,803 118,459 (24,875) 148,494 (2,571) (262.637) 9,999 (2,193.532) (1,716,818) 1,048,501 442,167 99,109 (2,970) (440,288) 480,859 10,817,707 8,710,130 21,000 21,000 55,9% (485.930) (2,703,058) (3.104.420) (485,930) 211000 (2,772,056) (3,108.421} 592,571 442,167 99,109 18,024 (440,286) 480,850 8,045,840 5,601,709 (5J45,S36) 592,571 442,167 99,169 18,024 (440,286) 480,659 2,900,113 5,601,709 1,171,337 3,7n.96o 1,051,889 2,451,168 (159,114) 61,801,796 55,132$63 67.144 1.75J7 908 4320.147. .1.180.098_ 2.46 ®.212 1590.400) 480.859 84.701.900 _6160J 708 4� / �I 3 CITY OF CLEARWATER, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 Cash Flows from Operating Activities: Cash Received from Customers Cash Received from Other Funds Cash Payments to Suppliers Cash Payments to Employees Cash Payments to Other Funds Other Revenues Net Cash Provided (Used) by Operating Activities Cash Flows from Noncapital Financing Activities: Operating Transfers In Operating Transfers Out Contributions From Other Funds Grant Revenue Loans from Other Funds, Net Net Cash Provided (Used) by Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities: Principal Payments on Debt Interest Paid Acquisition of Fired Assets Proceeds from Issuance of Debt Cash Deposited with Escrow Agent for Bond Defeasence Payment of Bond Issue Costs Capital Contributed by: Other Funds Other Governmental Entities Property Owners Developers Net Cash Provided (Used) for Capital and Related. F=inancing Activities Cash Flows from Investing Activities: Purchase of Investment Securities Interest on Investments Proceeds from the Sales and Maturities of Investments Interest Rebatabie to the U.S. Treasury Net Cash Provided (Used) in Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash equivalents at End of Year Sea accompatlyirlg notes to Financial Statements. Water (5,703,441) and Solid Sewer Gas Waste Utility Utility Utility $ 30,294,610 11,890.568 12,566,613 (10,022,222) (5,703,441) (4,053,911) (4,787,934) (2,056,415) (3,484,507) (3,776,695) (1,420,973) (3,224,480) 138,947 224,762 125,048 11,846,706 2.934,501 1,928,763 (1,143,354) (682,904) 70,026 1,778,929 155,02 (180,108) 635,575 (837,931) (610,952) (2,587,419) (33,899) (135,884) (3,404,909) (499,907) (39,869) (7,033,990) (1,803,972) (265,082) 53,210,440 (53,210,440) (773,498) 405,022 75,069 879 368 208,458 (13,111,267) (2,336,899) (440,467) (265,216) 2.570.8-13 145,084 127,499 74,130 7 2,6446943 (120,132) 127,506 2,015,957 (360,461) 1,004,850 27,264,755 1,664,719 499,568 S 29.280.712 1.304.258 1.504,418 _ :ice t Page i of 2 (178,379) (44,801) (188,283) (18,537) (611,189) (466,430) (34,094) 262,978 (186,133) (167,968) (79,725) (441,494) (6,643,597) 1,820,160 6,643,597 (348,211) (833,092) (97,432) (433,8262 1,378,666 (3,166,515) Toll Yacht (4,700,892) (17,379,573) (13,123,905) 53,210,440 197,153 (53,210,440) Causeway Basin 138,725 8,726,735 1,080,206 Totals Slormwater and and Parking Pier 74,137 Utility Bridge Marina System 60 Atrium 1993 1992 (28,320) 118,459 135,215 32.913 138,725 1,129 3,356,591 1,639,827 1.554,877 2,240,469 140 .656 860,153 64,544,364 57,892,717 636,783 3,928,325 97,790 472.841 865,334 264,029 97,790 147,882 (295,026) (158,799) (828,618) (511,303) (174,956) (204,664) (21,952,940) (21,045,802) (914,811) (345,733) (464,902) (517,424) (101,905) (12,673,631) (12,232,522) (602,484) (100,637) (205,958) (1,052,757) (15,590) (28,705) (10,428,279) (9,784,336) 15 36,603 30,162 5,418 560,955 1,901,031 1,544,270 1,034,673 189,792 189,147 (146,377) 626,784 20,148,259 16,878,970 21,000 21,000 55,999 (465,930) (2,793,058) (3,164,420) 53,169 70,026 254,992 (634.144) 188,598 (167,081) 32,130 (1,247,428) (384,131) 1,395,064 (1,100,074) 188,598 (167,081) 53,130 (1,247,428) (3.066,163) (1,405,196) (178,379) (44,801) (188,283) (18,537) (611,189) (466,430) (34,094) 262,978 (186,133) (167,968) (79,725) (441,494) (6,643,597) 1,820,160 6,643,597 (348,211) (833,092) (97,432) (433,8262 1,378,666 (3,166,515) (2:865,467) (4,319,473) (4,700,892) (17,379,573) (13,123,905) 53,210,440 197,153 (53,210,440) 135,215 (773,498) 138,725 8,726,735 1,080,206 405,022 485,229 76,316 70,615 208,458 698,981 (16,222,528) (18,158,080) ✓Y �i � / rJ (265,216) (496,978) 118,459 135,215 $2,913 138,725 1,129 9,999 3,279,836 3,121,694 74,137 (28,320) 118,459 135,215 32.913 138,725 1,129 9,999 3,088,757 2,596,398 214,444 525,394 (41,808) (52,824) (14,010) 636,783 3,928,325 (87,910) 472.841 865,334 264,029 914.012 14,010 31,959,268 32,047,178 687285 _„___1390728_ 222.221 _ 861.188 0 636.783 35.887,593_ 31.959.268 ✓Y �i � / rJ CITY OF CLEARWATER, FLORIDA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS, Continued YEAR ENDED SEPTEMBER 30 1993 WITH COMPARATIVE TOTAL FIGURES FOR 1992 Peconciliation of Operating Income (Lass) to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Other Revenue from Nonoperating Section of Income Statement Depreciation Provision for Uncollectible Accounts Amortization Miscellaneous Expense Change in Assets and Liabilities: Decrease (Increase) in Accounts Receivable Decrease (increase) in Amount Due from Other Governmental Entities Decrease (increase) in Inventory Decrease (Increase) in Prepaid Expenses Increase (Decrease) in Accounts and Contracts Payable Increase (Decrease) in Deposits Increase (Decrease) in Accrued Payroll Total Adjustments Net Cash Provided (Used) by Operating Activities Sea accompemytng notes to Fmericbt $tatement3. Water and Solid Sewer Gas Waste Utility Utility Utility $ 7,684,493 2.273,532 1,412,809 138,947 224,289 125,049 3,605,575 553,996 335,514 97,131 29,290 28,436 534,661 24,445 56,762 82,815 (326,386) (261,423) (64,159) '11,122 93.698 (1,456) 473 (139,336) 48,511 53,075 (175,200) 24,445 166,176 72,113 12,653 12,366 4,162,213 660,969 515,954 $ 11.846.706 2934.501 1,926,763 t' B Page 2 o12 -, ;, . Toll Yacht Causeway Basin Totals Stormwater and and Parking Pier utility Bridge Marina System 60 Atrium 1993 1992 930,042 467,042 (49,385) (405) (177,649) 470,860 13,011,339 10,426,946 15 134,393 30,162 5,418 658,272 351,893 647,941 550,128 82,558 139,373 29,163 5,944,248 5,829,034 154,857 207,250 66,988 591,423 (33,890) 9,498 (529,386) (579,281) (64,159) 1,292,705 (1,140) (2,208) 101,472 (210,189) 13,940 12,957 (13,379) (8,868) (523) (5,447) 19,592 (1,554) 137,441 102,891 (546,278) 196 135 18,483 34,235 (114,393) 9,045 18,011 5,179 2,498 (1.755) 130,110 167,674 614,228 567,631 239,177 189,552 31272 155,924 7,136,920 6,452,024 1.544.270 1.034.673 189.792 189.147 (146.377) 626.784 20:148.259 16.678.970 -, ;, . \ t el All 7 0 �WNr _ ��� < Iii ✓ ✓r? ° '' :'i:i' "� ' ti TI s %fZ, ' ��" a U2,41V MOM [This page intentionally left blank] APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE ORDINANCE The following is a summary of certain provisions of Ordinance No. 5118-91 (the "Original Ordinance "), enacted on August 15, 1991, as supplemented by Ordinance No. 5564-94, enacted on August 4, 1994 (the "Series 1994A Ordinance" and, collectively with the Original Ordinance, the "Ordinance "). The statements contained herein do not purport to be complete and this summary is qualified in its entirety by reference to the Original Ordinance and the Series 1994A Ordinance, copies of which may be obtained from the City. Definitions "Additional Parity Obligations" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Original Ordinance and in the Series 1994A Ordinance and which (i) shall have a lien on the Pledged Revenues equal to that of the Parity Bonds and the 1994A Bonds, (ii) shall be payable from the Net Revenues on a parity with the Parity Bonds and the 1994A Bonds, and (iii) rank equally in all respects with the Parity Bonds and the 1994A Bonds. "Bond Registrar" or 'Registrar" shall mean the officer of the Issuer or the bank or trust company which the Issuer may from time to time designate to perform the duties set forth in the Series 1994A Ordinance for the Registrar of the 1994A Bonds. "Bonds" shall mean (i) the Bonds authorized under the Original Ordinance, including but not limited to the Parity Bonds and the 1994A Bonds and (ii) any Additional Parity Obligations issued thereafter in accordance with the provisions of the Ordinance. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "Construction Fund" shall mean the Construction Fund created and established pursuant to the Series 1994A Ordinance. "Consulting Engineer" shall mean such qualified and recognized independent consulting engineer, having favorable repute or skill and experience, with respect to the acts and duties to be provided to the Issuer, as employed or retained by the Issuer to perform the acts and carry out thu duties provided in the Series 1994A Ordinance. "Contributions in Aid of Construction" shall mean any amount or item of money, services, or property received by the Issuer, any portion of which is provided at no cost to the utility, which represents an addition or transfer to the capital of the System, and which is utilized to offset the acquisition, improvement or construction costs of the System. "Cost of Operation and Maintenance" of the System shall mean all current expenses, paid or accrued, for the operation, maintenance and repair of all facilities of the System, as calculated in accordance with sound accounting; practice, and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the Issuer related solely to the System, labor, cost of materials and supplies used for current operation, and charges fur the accumulation of appropriate reserves for current expenses not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with sound accounting practice, but excluding any reserve for renewals or replacements, for extraordinary repairs or any allowance for depreciation. C�1 "Credit Facility" or "Credit Facilities" shall mean either individually or collectively, as appropriate, any bond insurance policy, surety bond, letter of credit, line of credit, guaranty or other instrument or instruments that would enhance the credit of the Bonds. The term Credit Facility shall not include any bond insurance, surety bond or other credit enhancement deposited into or allocated to a subaccount in the Reserve Account in the Sinking Fund. "Credit Facility Issuer" shall mean the provider of a Credit Facility. "Gas System Manager" shall mean the Managing Director and Executive Officer of the System of the City of Clearwater, Florida. "Gross Revenues" or "Revenues" shall mean all moneys received from rates, fees, rentals or other charges or income derived from the investment of funds, unless otherwise provided in the Series 1994A Ordinance, by the Issuer or accruing to it in the operation of the System, all calculated in accordance with sound accounting practice. "Holder of Bonds" or "Bondholders" or any similar term shall mean any person who shall be the registered owner ( "Registered Owner`) of any registered 1994A Bond, as shown on the books and records of the Bond Registrar. The Issuer may deem and treat the person in whose name any 1994A Bond is registered as the absolute owner thereof for the purpose of receiving payment of, or on account of, the principal or redemption price thereof and interest due thereon, and for all other purposes. "Issuer" shall mean the City of Clearwater, Florida. "Net Revenues" shall mean Gross Revenues less Cost of Operation and Maintenance. "1994A Bonds' shall mean the obligations of the Issuer authorized to be issued pursuant to the Series 1994A Ordinance, which 1994A Bonds are to be issued as one series, designated the Series 1994A Bonds. "1994A Project" or 1994A Projects" shall mean the additions, extensions, supplements or replacements of the existing System within Pinellas County, Florida, for areas currently served by the System, pursuant to plans and specifications on file with the Gas System Manager and the City Clerk and such other capital expenditures as set forth in the plans and specifications on file with the Gas System Manager and the City Clerk, or any other lawful purpose related to the System or the 1994A Project, all as subsequently determined by the Issuer. "Parity Bonds" shall mean the outstanding Gas System Revenue Bonds, Series 1991. "Project Costs" shall mean all costs authorized to be paid from the Construction Fund pursuant to the Series 1994A Ordinance to the extent permitted under the laws of the Slate of Florida. It is intended that this definition be broadly construed to encompass all costs, expenses and liabilities of the Issuer related to the System which an the date of the Series 1994A Ordinance or in the future shall be permitted to be funded with the proceeds of any series of Bonds pursuant to the laws of the State of Florida. "Reserve Requirement" for each series of Bonds shall be as determined by subsequent resolution of the Issuer. The Reserve Requirement for the 1994A Bonds shall be the lesser of (i) the Maximum Bond Service Requirement of the 1994A Bonds, (ii) 125 % of the average annual Bond Service Requirement of the 1994A Bonds, or (iii) 10 %u of the net proceeds of the 1994A Bonds. "Systetn" shall mean the complete gas system now owned, operated and maintained by the Issuer, together with any and all asset;,, improvements, extensions and additions thereto hereafter constructed or acquired. ( %2 Ordinance to Constitute Contract In consideration of the acceptance of the 1994A Bonds authorized to be issued under the Ordinance by those who shall hold the same from time to time, the Ordinance shall be deemed to be and shall constitute a contract between the Issuer and such Holders. The covenants and agreements therein set forth to be performed by the Issuer shall be for [lie equal benefit, protection and security of the legal Holders of any and all of the Bonds, all of which shall be of equal rank and without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein. Registration and Transfer There shall be a Bond Registrar for the 1994A Bonds which shall be a bank or trust company located within or without the State of Florida. The Bond Registrar shall maintain the registration books of the Issuer and be responsible for the transfer and exchange of the 1994A Bonds. The Issuer shall, prior to the proposed date of delivery of the 1994A Bonds, by resolution designate the bank to serve as a Bond Registrar and Paying Agent. The Bond Registrar shall maintain the books for the registration of the transfer and exchange of the Bonds in compliance with an agreement to be executed between the Issuer and such bank as Bond Registrar on or prior to the date of delivery of the 1994A Bonds. Such agreement shall set forth in detail the duties, rights and responsibilities of the parties thereto. The 1994A Bonds may be transferred upon the registration books, upon delivery to the Registrar, together with written instructions as to the details for the transfer of such 1994A Bonds, along with the social security or federal employer identification number of such transferee and, if such transferee is a trust, the name and social security or federal employer identification numbers of the settlor and beneficiaries of the trust, the date of the trust and the name of the trustee. No transfer of any 1994A Bond shall be effective until entered on the registration books maintained by the Registrar. In all cases of the transfer of the 1994A Bonds, the Registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver in the name of the transferee or transferees a new fully registered 1994A Bond or 1994A Bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount which the Registered Owner is entitled to receive at the earliest practicable time in accordance with the provisions of the Series 1994A Ordinance. Any 1994A Bond or Bonds shall be exchangeable for a 1994A Bond or Bonds of the same maturity and interest rate, in any authorized denomination, but in a principal amount equal to the unpaid principal amount of the 1994A Bond or Bonds presented for exchange. Bonds to be exchanged shall be surrendered at the principal office of the Registrar, and the Registrar shall deliver in exchange therefor the 1994A Bond or Bonds which the Bondholder making the exchange shall be entitled to receive. The Issuer or the Registrar may charge the Registered Owner of such 1994A Bond for every such transfer or exchange an amount sufficient to reimburse them for their reasonable fees and for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange, and may require that such charge be paid before any such new 1994A Bond shall be delivered. All 1994A Bonds delivered upon transfer or exchange shall bear interest from such date that neither gain nor loss in interest shalt result from the transfer or exchange. All 1994A Bonds presented for transfer, exchange, redemption or payment (if so required by the Issuer), shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the Issuer and the Registrar duly executed by the Registered Owner or by his duly authorized attorney. C -3 Establishment of Funds and Accounts The Ordinance creates the following funds and accounts: the Construction Fund; the Revenue Fund; the Operation and Maintenance Fund; the Sinking Fund (with the Interest Account, Principal Account, Reserve Account and Bond Amortization Account therein, and a separate subaccount in the Reserve Account for each series of Bonds) and the Renewal and Replacement Account. Construction Fund The Construction Fund shall be used only for payment of the cost of the 1994A Project, which shall include the payment of interest, and if due, principal, on the 1994A Bonds prior to the date on which the 1994A Project is fully placed in service. Moneys in the Construction Fund, until applied in payment of any item of the cost of a Project, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. The Issuer shall establish within the Construction Fund a separate account in the Construction Fund for each series of Bonds. The Issuer has covenanted that the acquisition, construction and installation of each Project will be completed without delay and in accordance with sound engineering practices. The Issuer shall make disbursements or payments from the Construction Fund only to pay the cost of a Project. Notwithstanding any of the other provisions, prior to the date the 1994A Project is placed in service, and thereafter, to the extent that other moneys are not available therefor, amounts in the Construction Fund shall be applied to the payment of principal and interest on Bonds when due. Promptly after the date of the completion of a Project, as determined by the Gas System Manager, and after paying or making provisions for the payment of all unpaid items of the cost of such Project, the Issuer shall deposit in the following order of priority any balance of moneys remaining in the Construction Fund in (1) another account of the Construction Fund for which the Gas System Manager has stated that there are insufficient moneys present to pay the cost of the related Project, (2) the Reserve Account, to the extent of any deficiency therein, and (3) such other fund or account established under the Ordinance, as shall be determined by the City Commission of the Issuer, provided the Issuer has received as opinion of Bond Counsel to the effect that such transfer shall not adversely affect the exclusion, if any, of interest on the Bonds from gross income for federal income tax purposes. Flow of Funds The entire Gross Revenues, except the income from investments, derived from the operation of the System shall upon receipt thereof be deposited in the Revenue Fund, Such Revenue Fund shall constitute a trust fund for the purposes provided in the Ordinance, and shall be kept separate and distinct from all other funds of the Issuer and used only for the purposes and in the manner therein provided. All revenues at any time remaining on deposit in the Revenue Fund shall be disposed of on or before the fifteenth (15th) day of each month only in the following manner and in the following order of priority: (1) Revenues shall first be used to deposit in the the Operation and Maintenance Fund such sums as are necessary for the Cost of Operation and Maintenance for the next ensuing month. (2) Revenues shall next be used for deposit into the Interest Account, such sums as will he sufficient to pay one -sixth (1 /h) of all interest becoming due on the Bonds on the next semiannual interest payment date. C'..4 (3) Revenues shall next be used for deposit into the Principal Account, in any bond year in which a Serial Bond matures, such sums as will be sufficient to pay one - twelfth (1/12) of the principal maturing on Serial Bonds in such year. (4) Revenues shall next be used for deposit into the Bond Amortization Account, in any bond year in which an Amortization Installment is due, such sums as will be sufficient to pay one - twelfth (1/12) of the Amorti ~nation Installment required to be made in such year. Such payments shall be credited to a separate special account for each series of Term Bonds outstanding, and if there shall be more than one stated maturity for Term Bonds of a series, then into a separate special account in the Bond Amortization Account for each such separate maturity of Term Bonds. The funds and investments in each such separate account shall be pledged solely to the payment of principal of the Term Bonds of the series or maturity within a series for which it is established and shall not be available for payment, purchase or redemption of Term Bonds of any other series or within a series, or for transfer to any other account in the Sinking Fund to make up any deficiencies in required payments therein. Upon the sale of any series of Term Bonds, the Issuer shall, by resolution or ordinance, establish the amounts and maturities of such Amortization Installments for each series, and if there shall be more than one maturity of Term Bonds within a series, the Amortization Installments for the Term Bonds of each maturity. In the event the moneys deposited for retirement of a maturity of Term Bonds are required to be invested, in the manner provided below, then the Amortization Installments may be stated in terms of either the principal amount of the investments to be purchased on, or the cumulative amounts of the pr'inc'ipal amount of investments required to have been purchased by, the payment date of such Amortization Installment. Moneys on deposit in each of the separate special accounts in the Bond Amortization Account shall be used for the open market purchase or the redemption of Term Bonds, pursuant to the Ordinance, of the series or maturity of Term Bonds within a series for which such separate special account is established or may remain in said separate special account and be invested until the stated date of maturity of the Term Bonds. The resolution or ordinance establishing the Amortization Installments for any series or maturity of Term Bonds may limit the use of moneys to any one or more of the uses set forth in the preceding sentence, The required deposits to the Principal Account, Interest Account and Bond Amortization Account shall be adjusted in order to take into account the amount of money currently on deposit therein. (5) Revenues shall next be applied by the Issuer to maintain in each subaccount in the Reserve Account a sum equal to the Reserve Requirement, if any, for any subsequent year on each series of Bonds, which sum shall initially be deposited therein from the proceeds of the sale of the Bonds and other funds of the Issuer. To the extent the Issuer determines pursuant to a subsequent resolution to fund a subaccount within the Reserve Account for a respective series of Bonds, the Issuer may provide that the difference between the amounts on deposit in such subaccount and the Reserve Requirement for such series of Bonds shall be an amount covered by obtaining bond insurance issued by a reputable and recognized municipal bond insurer, by a surety bond, by a letter of credit or any combination thereof or by such other form of credit enhancement as shall be approved by a resolution of the Issuer adopted prior to the issuance of the series of Bonds for which such subaccount is established. Such resolution may also provide for the substitution of such credit enhancement. Bond insurance, a surety bond, a letter of credit or any combination thereof or such other form of credit enhancement may in the future be deposited in the subaccount in the Reserve Account for the Bonds as shall be approval by subsequent resolution of the Issuer, provided that the provider of such credit enhancement is then rated in one of the two highest rating categories (without regard to gradation) by Standard and Poor's Corporation and Moody',,, Investors Service, Inc. C -5 Any withdrawals from any subaccount in the Reserve Account shall be subsequently restored from the First moneys available in the Revenue Fund on a pro rata basis as to all subaccounts in the Reserve Account after all required current payments for the Operation and Maintenance Fund and Sinking Fund (including all deficiencies in prior payments to those Funds) have been made in full. Notwithstanding any provision of the Ordinance to the contrary, moneys in each subaccount in the Reserve Account shall be used only for the purpose of the payment of maturing principal of or interest or making Amortization Installments on the Bonds for which such subaccount was established when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose, including the payment of any other series of Bonds. In the event of the refunding of any series of Bonds, the Issuer may withdraw from the subaccount within the Reserve Account for such series of Bonds, all or any portion of the amounts accumulated therein with respect to the Bonds being refunded and deposit such amounts as required by the resolution authorizing the refunding of such series of Bonds. (6) The Issuer shall not be required to make any further payments into the Sinking Fund when the aggregate amount of money in the Sinking Fund is at least equal to the total Bond Service Requirement of the Bonds then outstanding, plus the amount of redemption premium, if any, then due and thereafter to become due on such Bonds then outstanding by operation of the Bond Amortization Account. (7) The Issuer shall next apply and deposit the moneys in the Revenue Fund into the Renewal and Replacement Fund an amount equal to one - twelfth (1/12) of an amount equal to 5% of prior year's Gross Revenues; provided, however, that so long as there shall be on deposit in such Renewal and Replacement Fund a balance of at least $300,000, no additional deposits in such Fund shall be required. The moneys in the Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency repairs thereto. Such moneys on deposit in such Fund shall also be used to supplement the Reserve Account, if necessary, in order to prevent a default in the payment of the principal or Amortization Installments of and interest on the Bonds. (S) The balance of any moneys remaining in the Revenue Fund after the above required payments have been made may be used by the Issuer for any lawful purpose. (9) The Operation and Maintenance Fund, the Sinking Fund, the Renewal and Replacement Fund, the Revenue Fund, and all accounts therein and any other special funds established in the Ordinance shall constitute trust funds for the purposes provided in the Ordinance for such funds. All such funds shall be continuously secured in the same manner as city deposits are authorized to be secured by the laws of the State of Florida. Moneys on deposit in the Revenue Fund and the Sinking Fund (except the Reserve Account therein) may be invested and reinvested in the manner provided by law provided such investments either mature or are redeemable at not less than par at the option of the Issuer not later than the dates on which the moneys on deposit therein will be needed for the purpose of such fund. The moneys in the Reserve Account in the Sinking Fund and in the Renewal and Replacement Fund may be invested and reinvested only in Authorized Investments, in the manner provided by law. All income on such investments shall be deposited into the Revenue Fund; provided, however, that investment income earned in the Bond Amortization Account shall remain therein or be transferred to the Principal Account or the Interest Account and used to pay maturing principal, Amortization installments and interest on the Bonds. The cash required to he accounted for in each of the foregoing funds and accounts may be deposited in a single hank acruunl, and funds allocated to the various accounts established tinder the Ordinance maybe C-6 invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the cash on deposit therein and such investments for the various purposes of such funds and accounts as provided in the Ordinance. The designation and establishment of the various funds and accounts by the Ordinance shall not be construed to require the establishment of any completely independent, self- balancing funds as such term is commonly defined and used in government accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as provided in the Ordinance. Operation of Bond Amortization Account Money held for the credit of the Bond Amortization Account shall be applied to the retirement of term obligations as follows: (1) Subject to the provisions of Paragraph (3) below, the Issuer may purchase Term Bonds then outstanding at the most advantageous price obtainable with reasonable diligence, such price not to exceed the principal of such Term Bonds plus the accrued interest to the date of delivery thereof. The Issuer shall pay the interest accrued on such Term. Bonds to the date of delivery thereof from the Interest Account and the purchase price from the Bond Amortization Account, but no such purchase shall be made by the Issuer within the period of 45 days immediately preceding any interest payment date on which Term Bonds are subject to call for redemption, except from money in excess of the amounts set aside or deposited for the redemption of Term Bonds. (2) Subject to the provisions of Paragraph (3) below, whenever sufficient money is on deposit in the Bond Amortization Account to redeem $5,004 or more principal amount of Term Bonds, the Issuer may call for redemption from money in the Bond Amortization Account such amount of Term Bonds then subject to redemption as, with the redemption premium, if any, will exhaust the money then held in the Bond Amortization Account as nearly as may be practicable. Prior to calling Term Bonds for redemption, the Issuer shall withdraw from the Interest Account and from the Bond Amortization Account and set aside in separate accounts or deposit with the paying agents the respective amounts required for paying the interest on and the principal of and redemption premium applicable to the Term Bonds so called for redemption. (3) Money in the Bond Amortization Account shall be applied by the Issuer in each fiscal year to the retirement of Term Bonds then outstanding in the following order: (a) The Term Bonds of each series of Bonds, to the extent of the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium, if any, and, if the amount available in such Fiscal Year shall not be sufficient therefor, then in proportion to the Amortization Installment, if any, for such Fiscal Year for the Term Bonds of each such series then outstanding, plus the applicable premium, if any; provided, however, that if the Term Bonds of any such series shall not then be subject to redemption from money in the Bond Amortization Account and if the Issuer shall at any time be unable to exhaust the money applicable to the Term Bonds of such series under the provisions of this clause or in the purchase of such Term Bonds under the provisions of Paragraph 1 above, such money or the balance of such money, as the case may be, shall be retained in the Bond Amortization Account and, as soon as it is feasible, applied to the Term Bonds of such series; and (b) Any balance then remaining, other than money retained under the first clause of this paragraph (3), may be applied to the retirement of such 'Perm Bonds as the Issuer in its sole discretion shall determine, but only, in the case of the redemption of Term Bonds of any series, in Such amounts and on such terms as may be provided in the resolution or ordinance authorizing the issuance of the obligations of such series. C -7 (.t) The Issuer shall deposit into the Bond Amortization Account Amortization Installments for the amortization of the principal of the Term Bonds, together with any deficiencies for prior required deposits, into the Bond Amortization Account, such Amortization Installments to be in such amounts and to be due in such years as shall be determined by resolution or ordinance of the governing body of the Issuer prior to the delivery of the Bonds. The Issuer shall pay from the Sinking Fund all expenses in connection with any such purchase or redemption. Covenants of the Issuer Operation and Afaintenm(ce - The Issuer has covenanted to maintain the System and all parts thereof in good condition and operate the same in an efficient and economical manner making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. Operating Budget - The Issuer has covenanted to annually, prior to commencement of each of its Fiscal Years, prepare and adopt a detailed budget or budgets of the estimated expenditures for the operation and maintenance of the System during such next succeeding Fiscal Year. The Issuer shall mail copies of such annual budget or budgets (including any amendments thereto) to any Holder or Holders of Bonds who shall file his address with the Issuer and request in writing that copies of all such budgets be furnished him and shall make available such budgets of the System at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders, provided that the cost of reproducing and mailing such budget or budgets shall be borne by the Holder requesting such budget or budgets. Rate Ordinance - The Issuer has covenanted to fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the product, services and facilities of the System which will always provide Revenues in each year sufficient to pay, and out of such funds pay, 100% of all Costs of Operation and Maintenance of the System in such year and all reserve and other payments provided for in the Ordinance and 125% of the Bond Service Requirement due in such year on all outstanding Bonds. Such rates, fees, rentals or other charges shall not be reduced so as to be insufficient to provide Revenues for such purposes. The Issuer has further covenanted and agreed that the Issuer will annually within thirty (30) days after adoption of the budget described above revise such fees, rates, rentals and other charges for the use of the product, services and facilities of the System to the extent necessary for the estimated Gross Revenues to be derived from the operation of the System during the next succeeding Fiscal Year to increase over the amount of actual Gross Revenues from the operation of the System for the next preceding Fiscal Year by the amount that the estimated expenditures for operation and maintenance of the System during such next succeeding Fiscal Year shall exceed the actual expenditures for operation and maintenance of the System during such next preceding Fiscal Year. Books and Records - The Issuer has covenanted to keep books and records of the Net Revenues of the System which shall be kept separate and apart from all other books, records and accounts of the Issuer, and the Holders shall have the right al, all reasonable times to inspect all records, accounts and data of the Issuer relating thereto. Antnual A« (lit - The Issuer shall also, at least once a year, within six months after the close of its Fiscal Year, cause the books, records and accounts relating to the System to be properly audited by a recognized independent firm of certified public accountants and shall make generally available the report of such audits to any Holder or Holders of Bonds, Such audits shall contain a complete presentation of financial statements in C -H QV `r accordance with generally accepted accounting principles, A copy of such annual audit shall regularly be furnished to any nationally recognized bond rating service which, upon application of the Issuer prior to the issuance of the Bonds, shall have published a rating on the Bonds and to any Holder of any Bonds who shall have requested in writing that a copy of such reports be furnished him, provided that the cost of reproducing and mailing such reports shall be borne by the Holder requesting such reports. No Aforrgage, or Sale of the System - The Issuer will not sell, lease, mortgage, pledge or otherwise encumber the System, or any substantial part thereof, or any revenues to be derived therefrom, except as provided in the Ordinance. The foregoing provision notwithstanding, the Issuer shall have and in the Ordinance reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which the Issuer shall hereafter determine, in the manner provided therein, to be no longer necessary, useful or profitable in the operation of the System. Prior to any such sale, lease or other disposition of said property, if the amount to be received therefor is not in excess of $50,000, the City Manager of the Issuer or other duly authorized officer in charge thereof shall make a finding in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof. If the amount to be received from such sale, lease or other disposition of said property shall be in excess of $50,000 but not in excess of $100,000 such City Manager or other officer shall first make a fording in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the governing body of the Issuer shall, by resolution or ordinance duly adopted, approve and concur in the finding of such City Manager or other officer, and authorize such sale, lease or other disposition of said property. If the amount to be received from such sale, lease or other disposition of said property shall be in excess of $100,000 but not in excess of 10 % of the value of fixed assets of the System according to the most recent annual audit report, such City Manager or other officer shall first make a fording in writing determining that such property comprising a part of the System is no longer necessary, useful or profitable in the operation thereof, and the Consulting Engineer shall make a finding that it is in the best interest of the System that such property be disposed of, and the governing body of the Issuer shall by resolution or ordinance, duly adopted, approve and concur in the findings of such City Manager or other officer and of the Consulting Engineer, and shall authorize such sale, lease or other disposition of said property. Anything in this subsection to the contrary notwithstanding, nothing in the Ordinance shall restrict the governing body of the issuer or, to the extent such authority has been vested in him by such governing body, the City Manager in the exercise of his discretion, from authorizing the sale or other disposition of any of the property comprising a part of the System, if the Consulting Engineer shall certify that the Net Revenues of the System will not be materially adversely affected by reason of such sale or disposition. Such proceeds shall be placed in the Renewal and Replacement Fund or used for the retirement of outstanding Bonds, in such proportions to be determined by the governing body of the Issuer upon the recommendations of the City Manager. The payment of such proceeds into the Renewal and Replacement Fund shall not reduce the amounts required to be paid into such Fund by other provisions herein. Anything in this subsection to the contrary notwithstanding, nothing in the Ordinance shall prohibit the Issuer from transferring ownership of the System to another governmental entity in accordance with the Ordinance without complying with the provisions described herein. Insurance • For so long as any of the Bonds are outstanding, the Issuer has covenanted to carry adequate fire and windstorm insurance on all buildings and structures of the works and properties of the System which C-9 are subject to loss through fire or windstorm, and to otherwise carry insurance of all kinds and in the amounts normally carried in the operation of similar facilities and properties in Florida; provided, however, that in fieu of such insurance the Issuer may establish a qualified plan of self-insurance, Any such insurance shall be carried for the benefit of the Holders of the Bonds. All moneys received for losses under any of such insurance, except public liability, are pledged by the Issuer as security for the Bonds, until and unless such proceeds are used to remedy the toss or damage for which such proceeds are received, either by repairing the property damaged or replacing the property destroyed as soon as practicable. No Free Service - The Issuer has covenanted to not render or cause to be rendered any free services of any nature by its System, nor to establish any preferential rates for users of the same class. Whenever the Issuer, including its departments, agencies and instrumentalities, shall avail itself of the product, facilities or services provided by the System, or any part thereof, the same rates, fees or charges applicable to other customers receiv- ing like services under similar circumstances shall be charged to the Issuer and any such department, agency or instrumentality. Such charges shall be paid as they accrue, and the Issuer shall transfer from its general funds to the Revenue Fund sufficient sums to pay such charges. The revenues so received shall be deemed to be Revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other Revenues derived from Such operation of the System. Enforcement of Collections - The Issuer has covenanted to diligently enforce and collect the rates, fees and other charges for the services and facilities of the System herein pledged; to take all steps, actions and proceedings for the enforcement and collection of such rates, charges and fees as shall become delinquent to the full extent permitted or authorized by law; and to maintain accurate records with respect thereof. All such fees, rates, charges and revenues pledged in the Ordinance shall, as collected, be held in trust to be applied as therein provided and not otherwise. The Issuer will, under reasonable rules and regulations, to the full extent permitted by law, shut off the connection of any users of the system for non - payment of fees, rentals and other charges for the services of the System and shall not furnish him or permit him to receive from the System further service until all obligations owed by him to the Issuer on account of services shall have been paid in full. Consulting Engineer - The Consulting Engineer shall provide the Issuer with competent engineering counsel affecting the proper, efficient and economical operation and maintenance of the System and in connection with the making of capital improvements and renewals and replacements to the System. The Gas System Manager may undertake the duties of Consulting Engineer for purposes of the Ordinance so long as such Gas System Manager is a registered engineer in the State of Florida; provided however, that the Gas System Manager shall not perform certain duties of Consulting Engineer as set forth in the Ordinance. City Manager Reports - On an annual basis, the Issuer has covenanted to cause to be prepared by the City Manager a report or survey of the System, with respect to the management of the properties thereof, the sufficiency of the rates and charges for services, the proper maintenance of the properties of the System, and the necessity for capital improvements and recommendations therefor. Such a report or survey shall also show any failure of the Issuer to perform or comply with the covenants contained in the Ordinance. If any such report or survey of the City Manager reflects that the rates and charges are insufficient to protect the rights of the Bondholders, then the Issuer shall take such steps as are required by law to raise the rates and charges for services of the System. No Competing S)slent - To the full extent permitted by law, the Issuer has covenanted to not hereafter grant, or cause, consent to, or allow the granting of, any franchise or permit to any person, firm, corporation or body, or agency or instrumentality whatsoever, for the furnishing of competing gas services to or within the boundaries of the Issuer; provided, however, thru if the Gas System Manager renders an opinion that it would C.1.1) not be feasible for the Issuer to provide such services to any specific area within the three years succeeding a request to provide such service, the Issuer may authorize or allow the granting of such franchise or permit for such area upon such terms and conditions as it may approve. Unlawful Connection Prohibited - The Issuer has enacted an ordinance making it unlawful for any person or persons to tamper with, change or make any connection with the System without the written consent of the Issuer, or to make any reconnection with the System when service has been discontinued for delinquent charges, until such delinquent charges have been paid in full, including interest, reasonable penalties and reconnection charges. The Issuer will diligently, to the full extent permitted by law, enforce this covenant and prosecute any person violating the provisions of this covenant or any penal ordinance relating to the same. Issuance of Other Obligations The Issuer has covenanted to not issue any other obligations payable from the Gross Revenues of the System nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien of the Bonds and the interest thereon upon said Revenues except under the conditions and in the manner provided herein. Any obligations issued by the Issuer other than the Bonds authorized in the Ordinance and Additional Parity Obligations provided for therein, payable from such Revenues, shall contain an express statement that such obligations are junior and subordinate in all respects to the Bonds, as to lien on and source and security for payment from such Revenues. Issuance of Additional Parity Obligations Additional Parity Obligations, payable on a parity from the Net Revenues of the System with the Bonds, may be issued after the issuance of any Bonds, for the construction and acquisition of additions, extensions and improvements to the System or for refunding purposes and upon the following conditions: (1) The Net Revenues derived or which would have been derived, if adjusted as provided herein, from the System, either during the immediately preceding Fiscal Year, during any twelve (12) consecutive calendar months of the eighteen (18) calendar months immediately preceding the sale of the proposed Additional Parity Obligations or during the last twelve (12) month period for which the Issuer has audited financial statements for the System, at the option of the Issuer, shall have been not less than 125% of the Maximum Bond Service Requirement which will become due in any calendar year thereafter on (a) the 1991 Bonds then outstanding, (b) any Additional Parity Obligations issued and then outstanding, and (c) the Additional Parity Obligations then proposed to be issued. In determining the amount of Net Revenues for the purposes of paragraph (1) above, the Consulting Engineers may adjust the Net Revenues by adding thereto the following: (a) The Net Revenues (computed for such utility on the same basis as net revenues are computed for the System) of any gas utility which the Issuer shall have acquired prior to the issuance of such Additional Parity Obligations or which the Issuer shall be acquiring from proceeds of such Additional Parity Obligations; and (b) In the event a change has been made in the rate schedules for services from the System prior to flu issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above, and such change has resulted in an increase in Net Revenues, such amount of additional Net Revenues which the Consulting Engineers estimate would have been received by the Issuer during such 12 month period if such change in such rate schedule had been in effect during the entire 12 month period and in the event. a change has been made in the rate schedules for services from the System prior to the issuance of the proposed Additional Parity Obligations for a part of such 12 month period referred to in (1) above, and such change has resulted in a decrease in Net Revenues, by subtracting therefrom such amount of the Net Revenues which the Consulting Engineer, estimate would not have been received by the Issuer during such 12 C-1I month period referred to in (1) above, if such change in such rate schedule had been in effect during the entire 12 month period. (2) Each resolution or ordinance authorizing the issuance of Additional Parity Obligations will recite that all of the covenants herein contained will be applicable to such Additional Parity Obligations. (3) The Issuer shall not be in default in performing any of the covenants and obligations assumed hereunder, and all payments herein required to have been made into the accounts and funds, as provided hereunder, shall have been made to the full extent required. Remedies Any Holder of Bonds issued under the provisions of the Ordinance or any trustee acting for the Holders of such Bonds, may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the laws of the State of Florida, or granted and contained herein, and may enforce and compel the performance of all duties required herein or by any applicable statutes to be performed by the Issuer or by any officer thereof. Nothing herein, however, shall be construed to grant to any Holder of the Bonds any lien on the System or any real property of the Issuer. Amending and Supplementing of Ordinance Without Consent of Registered Owners of Bonds The Issuer, from time to time and at any time and without the consent or concurrence of any Registered Owner of any Bond, may adopt an ordinance or resolution amendatory or supplemental to the Ordinance, if the provisions of such supplemental ordinance or resolution shall not adversely affect the rights of the Registered Owners of the Bonds then Outstanding, for any one or more of the following purposes: (A) To make any changes or corrections in the Ordinance as to which the Issuer shall have been advised by counsel that are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provision or omission or mistake or manifest error contained in the Ordinance, or to insert in the Ordinance such provisions clarifying matters or questions arising under the Ordinance as are necessary or desirable; (B) To add additional covenants and agreements of the Issuer for the purpose of further securing the payment of the Bonds; (C) To surrender any right, power or privilege reserved to or conferred upon the Issuer by the terms of the Ordinance; (D) To confirm as further assurance any lien, pledge or change, or the subjection to any lien, pledge or change, created or to be created by the provisions of the Ordinance; (E) To grant to or confer upon the Registered Owners any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (F) To assure compliance with Federal "arbitrage" provisions in effect from time to time; (G) To bring all or a portion of the System into compliance with applicable state or federal laws; and C -12 1,' ° ' (H) To modify any of the provisions of the Ordinance in any other respects provided that such modification shall not be effective until after the Bonds Outstanding at the time such supplemental ordinance or resolution is adopted shall cease to be Outstanding, or until the Holders thereof consent thereto pursuant to the Ordinance,and any Bonds issued subsequent to any such modification shall contain a specific reference to the modifications contained in such supplemental ordinance or resolution. Amendment of Ordinance with Consent of Registered Owner of Bonds Except as otherwise provided in the Ordinance, no material modification or amendment of the Ordinance or of any ordinance amendatory thereof or ordinance or resolution supplemental thereto may be made without the consent in writing of the Registered Owners of fifty -one percent or more in the principal amount of the Bonds of each Series so affected and then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the Issuer to pay the principal of and interest on the Bonds as the same shall become due from the Net Revenues of the System or reduce the percentage of the Registered Owners of the Bonds required to consent to any material modification or amend- ment of the Ordinance without the consent of the Registered Owner or Registered Owners of all such obligations. For purposes of this paragraph, to the extent any Bonds are secured by a Credit Facility and such Bonds are then rated in one of the two highest rating categories (without regard to gradation) by either Standard & Poor's Corporation or Moody's Investors Service, Inc., or successors and assigns, then the consent of the Credit Facility Issuer shall be deemed to constitute the consent of the Registered Owner of such Bonds and in such case no consent of the Registered Owners of such Bonds shall be required; provided, however, a copy of such amendment shall be provided to such rating agencies not less than thirty (30) days prior to the effective date thereof. Defeasance If, at any time, the Issuer shall have paid, or shall have made provision for payment of, the principal, interest and redemption premiums, if any, with respect to the Bonds, then, and in that event, the pledge of and lien on the Net Revenues in favor of the Holders of the Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of Federal Securities or bank certificates of deposit fully secured as to principal and interest by Federal Securities in irrevocable trust with a banking institution or trust company, for the sole benefit of the Bondholders, in respect to which such Federal Securities or certificates of deposit, the principal-of which, together with the income thereon, will be sufficient to make timely payment of the principal, interest, and redemption premiums, if any, on the outstanding Bonds, shall be considered "provision for payment" Nothing herein shall be deemed to require the Issuer to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise, any such option for early redemption. Federal Income Tax Covenants The Issuer has covenanted with the Registered Owners of each series of Bonds that it shall not use the proceeds of such series of Bonds in any manner which would cause the interest on such series of Bonds to be or become includable in the gross income of the Registered Owner thereof for federal income tax purposes. The Issuer has covenanted with the Registered Owners of each series of Bonds that neither the Issuer nor any person under its control or direction will make any use of the proceeds of such series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such series of Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither the Issuer nor any other person shall do any act or fail to do any act which would cause the interest on such series of Bonds to become includable in the gross income of the Registered Owner thereof for federal income tax purposes. The Issuer has covenanted with the Registered Owners of each series of Bonds that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income 013 of the Registered Owner thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. i C -14 I m U22wff W, [This page intentionally left blank] FORM OF BOND COUNSEL OPINION [Delivery date of issue] City Commission City of Clearwater Clearwater, Florida CITY OF CLEARWATER, FLORIDA GAS SYSTEM REVENUE BONDS, SERIES 1994A Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Clearwater, Florida (the "Issuer "), of its $ Gas System Revenue Bonds, Series 1994A (the "Series 1994A Bonds "), pursuant to the Constitution and laws of the State of Florida, Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, Ordinance No. 5118 -91, enacted by the City Commission of the Issuer on August 15, 1991 (the "Original Ordinance ") , as amended and supplemented by Ordinance No. 5564 -94, enacted by the City Commission of the Issuer on August 4, 1994, as amended and supplemented (the "Series 1994A Ordinance" and together with the Original ordinance, the "Ordinance ") . Any capitalized undefined terms used herein shall have the meaning set forth in the Ordinance. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Ordi- nance and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not undertaken an independent audit, examination, investigation or inspection of such matters and have relied solely on the facts, estimates and circum- stances described in such proceedings and certifications. We have assumed the genuineness of signatures on all documents and instru- ments, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of any offering material relating to the Series 1994A Bonds. This opinion should not be construed as offering material, an offering circular, prospectus or official statement and is not intended in any way to be a disclosure state- ment used in connection with the sale or delivery of the Series 1994A Bonds. Furthermore, we are not passing on the accuracy or sufficiency of any CUSIP numbers appearing on the Series 1994A city Commission [Delivery Date of Issue] Page 2 Bonds. In addition, we have not been engaged to and, therefore, express no opinion as to compliance by the Issuer or the under- writer with any federal or state statute, regulation or ruling with respect to the sale and distribution of the Series 1994A Bonds. In rendering this opinion, we have examined and relied upon the opinion of even date herewith of Alan Zimmet, Esquire, counsel for the Issuer, as to the due creation and valid existence of the Issuer, the due enactment of the Ordinance, the due authorization, execution and delivery of the Series 1994A Bonds and the compliance by the Issuer with all conditions precedent to the issuance of the Series 1994A Bonds. The Series 1994A Bonds are being issued on a parity with the Issuer's $7,680,000 Gas System Revenue Bonds, Series 1991 (the "Series 1991 Bonds "), issued under the Original Ordinance. Pursuant to the terms, conditions and limitations contained in the Ordinance, the Issuer has reserved the right to issue obligations in the future which shall have a lien on the Net Revenues equal to that of the Series 1991 Bonds and the Series 1994A Bonds. The Series 1994A Bonds do not constitute a general obligation or indebtedness of the Issuer within the meaning of any constitu- tional, statutory or other limitation of indebtedness and the holders thereof shall never have the right to compel the exercise of any ad valorem taxing power of the Issuer or taxation in any form of any real or personal property for the payment of the principal of or interest on the Series 1994A Bonds. The opinions set forth below are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United States of America. Based on our examination, we are of the opinion, as of the date of delivery of and payment for the Series 1994A Bonds, as follows: 1. The Ordinance has been duly enacted by the Issuer and constitutes a valid and binding obligation of the Issuer enforce- able upon the Issuer in accordance with its terms. 2. The Series 1994A Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding special obli- gations of the Issuer enforceable in accordance with their terms, payable solely from the sources provided therefor in the Ordinance. 3. The Internal Revenue code of 1986, as amended (the "Code "), establishes certain requirements which must be met d city commission [Delivery Date of Issue] Page 3 subsequent to the issuance and delivery of the Series 1994A Bonds in order that interest on the Series 1994A Bonds be and remain excluded from gross income for purposes of federal income taxation. Non- compliance may cause interest on the Series 1994A Bonds to be included in federal gross income retroactive to the date of issuance of the Series 1994A Bonds, regardless of the date on which such non - compliance occurs or is ascertained. The Issuer has covenanted in the ordinance to comply with such requirements in order to maintain the exclusion from federal gross income of the interest on the Series 1994A Bonds. Subject to compliance by the Issuer with the aforementioned covenants, (a) interest on the Series 1994A Bonds is excluded from gross income for purposes of federal income taxation, and (b) interest on the Series 1994A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. We express no opinion regarding other federal tax consequences arising with respect to the Series 1994A Bonds. 4. The Series 1994A Bonds are exempt from intangible taxes imposed pursuant to Chapter 199, Florida Statutes. It is to be understood that the rights of the owners of the Series 1994A Bonds and the enforceability thereof may be subject to the exercise of judicial discretion in accordance with general principles of equity, to the valid exercise of the sovereign police powers of the State of Florida and of the constitutional powers of the United States of America and to bankruptcy, insolvency, reorga- nization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted. Our opinions expressed herein are predicated upon present law, facts and circumstances, and we assume no affirmative obligation to update the opinions expressed herein if such laws, facts or circum- stances change after the date hereof. Very truly yours, BRYANT, MILLER AND OLIVE, P.A. [This page intentionally left blank] r-s ti! APPENDIX E FINANCIAL GUARAN'T'Y INSURANCE P0L1,,.Y Municipal Bond Investors Assurance Corporation Armonk, New York 10504 Policy No. iNUMBER] Municipal Bond Investo a Assurance Corporation (the "Insurer"), in consideration of the payment of the prtr aium and subject to the testis of this policy, ltemkry unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following desc:ribed obligations, tike full and corripkto payment required to be made by or on bdalfof the Issuer to [INSERT NAME OF PAYING AGSNM or its SuoaSSor (tile "Pa)ing Agatt.") of an amamt equal to n the principal of (either at the stated trhanrity, or by any, advancem�[ of maturity Went to a mandatory sinking fiord paymrnt) and intereston, the Obligabi (as that term is defined below) as such payments shall bed due but shall not be so paid (esxgrt that in the M_ d' arty aoeelaation of the due date of such principal by reason of mardatay or optional region or acceleration resulting from default or even C( other than any advanameent of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed � shall be made in such amouns and at mch times as such pwfalays of prnnapal would have been due had there >ice been any such aaxdcxation); and (u) the reurdaasanatt of aWsLch paymaht v Wch is subsequently recovered firm any owns putstrant to a finaliudgmatt by a court of competent jurisdiction that surer payment ooh an avoidable prd== to such owner within the meaning of arty applicable bar*ruptry law. The amounts referred to in clauses n and (u) of the preceding satte nc a shall be referred to herein toll Y as tlne'Tnared Amounts." "Obligation" shall meant [LEGAL NAME OF ISSUE] Upon recap( of telephonic cc telegraphic notice such notice �y confirmed in writing by or armed mail' or upon receipt of watt notice by registemd or certified mail, by the Insurer from the Paying Agent or any owner ofan Obligation the payment of an Inured Amount for which is then due, that such negttited payment has not been made, the Insurer on the dtte date of such payment or within one btsiriess day after receipt of'nolice ofmch nonpaymertt, whichever is latex, will make a deposit of funds, in an account with State Strut Bank and Trust Company, N.A., in New York, New Yori4 or its sticoessor, sufficient for the paymerd of arty such Insured. Amounts which are that due. Upon presentnicnt and surrmder of sadr Obligations or presattrrrent of such other proof of ownership of the Obligations, together with any appropriate instruments of assigmrsett to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insures, and appropriate ir>stturnents to effect tip appmtntma it of On Insures as agent for such owners of the Obligations in any legal proceeding related to pay nait of Insured Anoints on the ObligatiolA such iii being in a form satisfactory to State Street Bank and Trust Company, N.A. State Sued Bank and Trust Company, NA shall disburse to such owners, or the Paying Agent payment of the Insured Amounts doe on such Obligations, less any amount held by the Paying Agent for the payment of such Instued Amounts and legally available therdor. This polity does not insure against loss of any prepayment prerniu m which may at any time be payable with respect to any Obligation As used herein the term "owns" shall mean the registered owner of arty Obligation as ithdiexied in the books maintained by the Paying Agent, tlhe Issuer, or any d=grvx of the lssu ' for such purpose. The term owner shall not induce the Issuer or any party whose agreement with the Issuer constitutes the underlying secrrity for the Obligation. Any service of process on the big= may be trade to the Insuuer at its offices located at 113 King Street, Armonk New York 10504 and such service of process shall be valid and boding. Thu policy is rton-canwlWe for arty reason. The pranium on this policy is not refundable for any reason including the payrnait prior to maturity of the Obligations. TThe innrrnnoe provided by this policy is not co%vLd by the llodda Insu ante Guaranty Association created uncles clapecr 631, Florida Statutes. IN WIT14FM WHEREOF, the Insurer has caused this policy to be executed in facsimile on its behalf by its dully audhonzed Officers, this [DAY] day of [MONTH, YEARI. COUNTERSIGNED: MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION Ije &sitU_ox exkAgent ____ . President Alin:# (i,v, St:1lC Mvstarr[ Sccrtxrtry - ,S13LV4 t " 1 194 ire � tro.i �r y AI BIA COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Application No.: 94 -07 -6332 Sale Date: September 1994 Program Type: Competitive DP Re: $8,250,000 (Est) City of Clearwater, Florida, Gas System Revenue Bonds, Series 1994A (the "Obligations ") This commitment to issue a financial guaranty insurance policy (the "Commitment ") constitutes an agreement between CITY OF CLEARWATER, FLORIDA the ( "Applicant ") and MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION (the "Insurer "), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated July 25, 1994, 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 an payment for the Obligations, a financial guaranty insurance policy (the "Policy ") 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, the following payments: a. a nonrefundable premium in the amount of .275% 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; b. Standard & Poor's Ratings Group rating agency fees in an amount to be billed directly by Standard & Poor's Ratings Group, based on the final par and other factors as determined by Standard & Poor's Ratings Group, and . c. Moody's Investors Service rating agency fees in an amount to be billed directly by Moody's Investors Service, based on the final par and other factors as determined by Moody's Investors Service. 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 ct cnt 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. E� N► (�l7"' � YT Al BIA i 6. All documents executed in connection with the issuance of the Obligations shall s contain a provision which requires copies of any amendments to such documents consented to by the Insurer to be sent to Standard & Poor's. l 7. A Statement of Insurance satisfactory to the Insurer shall be printed on the t Obligations. a 8. 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 s i be stated therein or necessary in order to make the statements contained therein not misleading. 9. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. } 10. This Commitment may be signed in counterpart by the parties hereto. Dated this 25th day of August, 1994. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION By � l Assistant Secretary CITY OF CLEARWATER, FLORIDA i By: Title: Finance Director t i 1 w i sir