97-54RESOLUTION NO. 97-54
A RESOLUTION AUTHORIZING THE NEGOTIATED SALE OF NOT TO
EXCEED $9,000,000 CITY OF CLE��RWATER, FLORIDA, GAS
SYSTEM REVENUE BONDS, SERIES 1997A AND NOT TO EXCEED
$17,500,000 CITY OF CLEARWATER, FLORIDA, GAS SYSTEM
REVENUE REFUNDING BONDS, SERIES 1997B; AWARDING THE
SALE THEREOF TO WILLIAM R. HOUGH &- CO. ON BEHALF OF
ITSELF AND MERRILL LYNCH & CO. AND RAYMOND JAMES &
ASSOCIATES, INC., SUBJECT TO THE TERMS AIdD CONDITIONS
OF A PURCHASE CONTRACT; PROVIDING FOR THE ISSLTANCE OF
THE SERIES 1997 BONDS IN BOQK-ENTRY-ONLY FORM;
AUTFIORIZING THE DISTRIBUTIAN OF A PRELIMINP.�.Y OFFICIAL
STATEI�iiEATT AND AN OFFICIAL STATEMENT IN CONNECTION WITH
THE 1�ELIVER% OF THE BONDS; PROVIDING FOR COMPLIAI3CE
WITH A CONTINUING DISCLOSURE CERTIFICATE; APPOINTING A
PAYING AGENT AND REGISTRAR; APPOYNTING AN ESCROW AGENT;
AUTHORIZTING THE PURCHASE OF MUNICIPAL BOND INSURANCE;
AUTIiORIZING THE PURCHASE OF DEBT SERVICE RESERVE FUND
SURETY BONDS; PROVIDING CERTAIN OTHER MATTERS IN
CO�TIdECTION WITH THE ISSUANCE AND DELIVERY aF SUCH
BONDS; AND PROVIDING AN EFFECTSVE DATE.
� WdiEI3EAS, on Augus� 15, 1991, the City Commission of the
� City of Clearwater, Florida {the 1°City" or the "Sssuer") enacted
Ordinanc� .I�o. 5118-91 (the "Original Ordinance") to provide for
�he issuance of bonds payable from Net Revenu�s of the Gas Sys�em
(as defined therein); and
, ir]F%EREAS, on September 1, 1994, the City enacted Ordinance
No. 5665-94 (�he "1994 Bond Ordinance10) which authorized the
issuance of not to exceeci $2b,750,000 City of Clearwater,
Florida, Gas System Revenue Bonds, Series [to be determined], as
Additional Parity Obligations under the Original Ordinance to
finance the costs of the Series 1994B Projects (as defined in the
1994 Bond Ordinance); and
WHEREAS, on June 6, 1996, �he City enacted Ordinance No.
b030-96 (the "1991 Refunding Ordinance") which authorized the
issuance of not to exceed $8,500,000 City oi Clearwater, Florida,
Gas System Revenue 12efunding Bonds, Sex�`��s [To be determined]
(the "1991 Reiunding Bonds"), as Additional Parity Obligations
under the Original Ordinance to advance refund a portion of the
City's outstanding Gas System Revenue Bonds, Seriec 1991 (the
�t ].991 Refunded Bonds" ) ; and
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WHEREAS, on Septembez 18, 1997, the City enacted Ordinance
No. 6188-97 (�he "1994 Regunding Ordinancet0, and together with
" the Original Ordinance, �he 1994 Bond Ordinance and the 1991
Refunding Ordinance, collectively, the "Bond Ordinance") which
authorized the issuance of not to exceed $9,000,000 City of
Clearwater, r^lorida, Gas System Revenue Refunding Bonds, Series
[To be determined] (the "1994 Refunding Bonds"), as Additional
Parity Oblxga�ions under the Original Ordinance to advance refund
a portion of the City's outstanding Gas System Revenue Bonds,
Series 1994A (the "1994 Refunded Bonds"); and
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WHEI2EAS, it is in the k�est interest of the City to combine
the 1991 Refunding Bonds and the 1994 Refunding Bonds into one
series of bonds (the "Refunding Bonds") in order to achieve
additional �avings in the issuance thereof; and
WHER�S, it is in the best interest of the City to designate
i:he portion of such bonds authorized by the 1994 Bond Ordinance
to finance a portion of the Series 1994B Projects as "Gas System
Revenue Bonds, Series 1997A," (the "Series 1997A Bonds") and to
designate the Refunding Bonds as "Gas System Revenue Refunding
Bonds, Series 19978" to reflect the year of their issuance {the
Series 1997A Bonds and �he Refundinq Bonds collectively referred
to herein as the "Series 1997 Bonds"); and
WHEREAS, it is in the best interest of the City to provide
for the negotiated sale of not to exceed $9,000,000 of Series
1997A Bonds and not to exceed $17,500,000 of Refundinq Bonds; and
WHER�AS, �the Issuer intends on nego�ia�ing a sale of the
Series 1997 Bonds with William R. Hough & Co. on behalf of itself
and as repxesentative of Merrill Lynch & Co. and Raymond James &
Associates, Inc. (collectively, the "Underwriters01) subject to
the terms and conditions contained herein and set forth in a
Purchase Contract, a copy of which is attached hereto as Exhibit
"A" (the "Purchase Contract01) and authorizing its Mayor-
Commissioner and City Manager to execute such Purchase Contract
upon the approval of the terms thereof by the City Manager and
City Finance Direc�or; and
WHEREAS, the Issuer now desires to approve the issuance of
its Series 1997 Bonds, to sell its Series 1997 Bonds pursuant to
the Purchase Contract, to authorize the distribution of a Prelim-
inary Official Statement and an Official Statement in connection
w3th the issuance of the Series 1997 Bonds and to take certain
other actions in connection with the issuance and sale of the
5eries 1997 Bonds; and
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'�dHEREAS, �he Issuer will be provided all applicable
disclosure information by the Underwriters as required by Section
218.3g�, Florida S�atutes, prior to the execution of the Purahase
Contr�ct, a oopy of which disclosure is to be attached to the
Purchase Contract; and
WHEREAS, this resolution shall constitute a supplemental
resolutian under the terms of the Bond Ordinance and all
capitalized unde�ined terms used herein shall have the meanings
set forth in the Bond Ordinance;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF CLEARWATER, FLORIDA:
SECTION 1. The not to exceed $9,000,000 of the Gas System
Revenue Bonds, Series [to be determined] authorized by the Series
1994B Bond Ordinance being offered pursuant to this resolution
are hereby designated as Series 1997A Bonds (the "Series 1997A
�onds") and the no� �o exceed $8,500,000 of the Gas System
�evenu� Refunding Bonds, Series [to be determinedj authorized �y
the 1991 Refunding Ordinance being offered pursuant to this
resolution together with the not to exceed $9,000,000 �f �he �3s
System Revenue Refundinq Bonds, Series„ [to be determiri��]
authorized by the 1994 Refunding Ordinance being ofiered pursuant
to this resolution are hereby collectively designated as Series
1997B Bonds (�he "Series 1997B Bonds"). The issuance of no�t to
exceed $9,000,000 of the Series 1997A Bonds and not �,o exceed
$1T,500,000 of the Serie� 1997B Bonds, by the City is hereby
approved upan �he ter.ms and conditions set forth in the �ond
Ordinancc� and this Resolution.
SECTION 2. I� is in the best interest of the Issuer and the
residents and inhabi�ants �hereog that the Series 1997 Bonds be
issued utilizing a pure book-entry sys�em of registration. For
so lonq as the Series 1997 Bonds remain in such book entry only
system of registration, in the event of a conflict between the
provisions of the Bond Orda.nance and the provisions of the
Blanke� Letter of Representations between the City and Depository
Trust Company as previously executed and delivered, the terms and
provisions o� the Blanket Lette� of Representations shall
pxevail.
SECTION 3. (a) Due to the willingness of the Linderwriters to
purchase not to exoeed $26,500,000 in aggregate principal amount
of the Series 1997 Bonds at favorable interest costs and the
importance o� timing in the marketing of, such obligations, it is
hereby determined that it is in the best interest of the public
and the Issuer to sell the Series 1997 Bonds at a negotiated sale
and such sale to the Underwriters pursuant to the terms and con-
ditions contained in the Purchase Contract and herein is hereby
authorized and approved, sub�ect to the sa�isiaction of the
conditions set forth in Section 3(b) below.
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(b) The Finance Direc�or is h�reby authorized to receive the
offer to purchasa the Series 1997 Bonds fram the Underwriters in
the form of an executed Purchase Contract in the form approved
herein. The City Manager and the Finance Director are hereby
authorized to award the sale of the Series 1997A Bonds and/or the
Series 19978 Bonds, respectively, on their determination that the
of�er submi�ted by the Underwriters for the purchase of any or
all series of the Series 1997 Bonds or any portion thereof are
within the foZlowing pa�ameters: (1) in the case of the Series
1997A Bonds, the true interest cost rate shall not exceed 7.00�
with an Underwriters' Discount and original issue discount not in
excess of 2.00% of the principal amount thereof, and (2) in the
case of the Series 19978 Bonds, the true interest cost rate shall
not eatceed 7.00� and the refunding of that portion of the 1991
Refundec3 Bonds and that portion of the 1994 Refunded Bonds to be
re�uncled by the Series 1997B Bonds shall provide the Ci'ty with a
ne�. present value savings of not less than 4.0� of the par amount
o€ such Refunded Bonds with an Undercariters' Discount and
o�iginal issue discoun't not in excess of 2.00� of the principal
amoun� thereof. Th� Fi.nance Director, in coordination with the
City°s financial advisor and the Underwriters, is hereby
autho�ized and directed to determine what portions of the 1991
Refunded Boncis and urhat portions of the 1994 Refunded Bonds are
in the best interest of the City to be refunded through the
isauance of the Series 1997B Bonds. The City Manager and the
Finance Director are hereby authorized to award the sale of the
Series 1997A Bonds and/or the Series 1997B Bonds as set forth
above or �o reject the offer from �he Underwriters for any or all
series of Series 1997 Bonds or any portion thereof. Such award
shall be final. The aaceptance of the offer to purchase the
Series 1997B Bonds, to the extent a portion of the proceeds
thereaf are used to refund the 1991 Refunded Bonds shall
consti�tute a decision to ref�:�� the 1991 Refunded Bonds in
accordance with the 1991 Refunding Ordinance, and to the extent a
portion of the �roc�eeds thereof are used to refund the 1994
Refunded Bonds shall constitute a decision to refund the 1994
Refunded Bonds in accordance with the 1994 Refunding Ordinance.
SEGTION 4. The Series 1997 Bonds shall be sold to the
Underwriters, upon the terms and conditions set forth in the
Purchase Contract attached hereto as Exhi.bit "A" and incorporated
by reference, upon the satisfaction oi the conditions set forth
in Section 3(b) hereof. The Mayor-Commissioner, the City Manager
and the City Clerk are hereby au�thorizecl to execute such Purchase
Contract in substantially the form attached as Exhibit "A", with
such additional chanqes, insertions and omissions therein as do
not change the substance thereof and as may be approved by the
said officers of the Issuer executing the same, such execution to
be conclusive evidence of such approval.
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SECTION 5. The Series 1997 Bonds shall be dated, shall bear
interes� payable at the times, shall mature and shall be subject
f to redemption as pravided in the Purchase Contract. The use of
�he proc�eds o€ the Series 1997 Bonds, shall be as provided in
the Official Statem�nt xelating to the Series 1997 Bonds.
SECTiON 6. The Series 1997 Bonds shall be issued under and
secured by the Bond Ordinance and shall be executed and delivered
by the Mayor-Cammissioner, the City Manager and the City Clerk in
substantialZy the form set forth in the Bond Ordinance, with such
a8ditaanal changes and insertions therein as conform to the
provisions of the Purchase Contract and such execution and
delivery shall be conclusive evidence of the approval thereof by
such off icers.
SECTION 7. SunTrust Bank, Central Florida, Na�ional
Assoaiation, Orlando, Florida, is hereby appointed Paying Agent
and Registrar for the Series 1997 Bonds.
SECTION 8. First Union National Bank of Florida is hereby
appointed as the Escrow Agent under each respective Escrow
Deposit Agreement for the Series 199iB Boads.
SECTION 9. On the date of issuance of the Series 1997
Bonds, the Issuer may transfer the funds on hand in the various
funds and accounts established for the 1991 Refunded Bonds and
,� the 1994 Re€unded Bonds in such manner as may be approved by a
° certi�ica�e of �he Finance Director executed prior to or
simul�an�ously with the issuance of the Series 1997 Bonds.
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S�CTIQ� 10. The distribution by the Underwriters of the
pp�Zi�zn�xy Official Statemen� is hereby approved, confirmed and
ratified. The distribution of a final Official Statement of the
Iss�ser rela�ing to the issuance of the Series 1997 Bonds is
her�by appraved, such final Official Statement to be in sub-
stantially the form at�ached hereto as Exhibit "B", with such
addi�ional changes, inser�ions and omissions as may be made and
approved by officers of the Issuer executing the same, such
execution to be conclusive evidence of any such approval. The
Mayor-Commissioner and the City Manager are hereby authorized to
execute such Official Statement in substan�ially the form
attached hereto as Exhibit "B". Th� execution of such Official
Statement by such officers is hereby approved with such
additional changes, insertions and omissions as may be made and
approveci by such officers. For purposes of Rule 15c2-12 of the
United States Securities and Exchange Commission (the "Rule��),
the Preliminary Official Statement in the form attached hereto as
Exhibiti "B" is hereby deemed "final".
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SECTION 11. The City hereby covenants and agrees that, in
"�j order to provide for compliance by the City with th� secondary
�ark�t disclosure requirements of the Rule, that it will comply
�ith and carry out all of the provisions of that certain
Continuinq Disclosure Certificate in substan�ially the form
attached hegeto as Exhibit "C", to be executed by the City and
dated the date of issuance and delivery of the Series 1997 Bonds,
as it may be amended from time to time in accordance with the
terms thereaf (the "Continuing Disclosure Certificate°).
Notwithstanding any other provision of this Resolution failure
os �he City to comply with such Cantinuing Disclosure Certificate
shall not be considered an event of default; however, any holder
of Series 1997 Bonds may take such actions as may be necessary
and appropria�e, including seeking mandate or specific
per�or�nance by court order, to cause the City to comply with its
obZigations under th.is Section and the Continuing Disclosure
Certifiaa�e. The rlayor-Commissioner, the City Manager and the
City Clerk are hereby su�thorized to execute such Continuing
Disclosuxe Certificat� in substan�ially the form attached as
Exhibi�t 11C'�, with such additional changes, insertions and omis-
sions therein as do not change the substance thereof and as may
be approved by the said officers of the Issuer executing the
same, such execution to be conclusive evidence of such approval.
SECTION 12. (a) Pursuant to the Bond Ordinance, MBIA
Insurance Corporation ('�MBIA") has been selected to provide its
� I�unicipal Bond Insurance Policies as the Credit Facility (as
defined in the Bond Ordinance) as addi�ional security for payment
of principal and interes� on each series of the Series 1997
Bonds. 5election of MBIA as the Credit Facility Issuer (as
defined in the Bond Ordinance) is hereby ratified and confirmed
and payment for such Municipal Bond Insurance Policies from
proceeds of each of the series of the Series 1.997 Bonds is hereby
authorized. The Issuer hereby accepts the terms, conditions and
agreements relating to the Municipal Bond Insurance Policies in
accordance with the Commitment for Municipal Bond Insurance as
at�ached hereto as Exhibit "Dt° and incorporated herein. A
statement of insurance is hereby authorized �o be printed on or
attachad ta each series of the Series 1997 Bonds for the benefit
and information of the holders of the Series 1597 Bonds.
(b) For so long as the Credit Facility is applicalale to the
Series 1997 Bonds, the additional provisions set forth on Exhibit
"E" attached hereto shall be applicable to the Series 1997 Bonds.
In addition to the covenants and agreements of the City
previously contained in the Bond Ordinance regarding the rights
of the Credit Facility Issuer which are incorporated herein and
in Exhibit ��E�� hereto, the City hereby covenants and agrees for
the benefit of the Credit Facility Issuer and the holders of the
Series 1997 Bonds while the Credit Facility insuring the Series
1997 Bonds is in full force and effect, to provide�the Credit
Facility Issuer with copies of any notices to be given to any
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ursuant to the Bond Ordinance, and to provide prior notice
party p Issuer of any amendments to the Bond
to the Credit Facility
Ordinance.
(c) The City Manager and Finance Di u� �f�omathe Citybs
authorized and directed to determine, with inp
whether the purchase of a debt service��Reserve
Einancial advisor, rather than
fund surety policy or bond or similar instrument (a
Surety") would be in the best interest of the City available
funding the debt ser Se iese1997eBonds orrother legally 997 Bonds
with proceeds of the luianager and the Finance
funds of the City. In the event 'the City
serve Surety, they shall select the Reserve
Director determine tReat it would be in �he best interest of the
City to purchase a is in a
Suretg affered by the lowes� bidder whose Reserve Surety Manager
In the event the City
form accegtable to MBIA• The determination of the City
and Finance Director shall be final.
Manager and Finance Director deMa ager are author zed to execute
the Mayor-Commissioner and City uaranty
the form attached
and the o��rs �gl�ra�greement i�substantiallylnancia �he City
agreement accepted by
�o the commitmen� for the ResWi�h suchtchanges, insertions and
roved by such officers. For purposes
Managex' and �'ina�ce Director, as defined in the Original
omissions as may be aPP
hereog, the Reserve Requirement (
Ordinancej for each series of Seri es t�e9 � X°� m Bo a S rvi ce
amount equal to the lesser of � � 11 125� of the
Require�nent of each series of Series 1997 Bonds, (��)
averaqe annual Bond SQ���� of t elrnet nproceedsc of eeach serieslof
1997 Bonds, or (iii)
Series 1997 Bonds. the Issuer
SECTION 13. All prior resolutions of
inconsistent with the provisions of this resolution are hereby
modiiied, supplemented and amended to conform with thsu rlemented
herein contained ans all remain n full force and effectp
and amended hereby Manager, the
SECTION 14. The Mayox-Commissioner, the City
Attorney and the City C1erk or any
Finance Director,
the City authorized
other appropria�e officers of and all ecert fi ations or other
the Resolution, the Purchase
and directed to execute any other document
instruments or documents requiredreements or any
Contract, the Escrow Deposit Ag recondition to the
referred to above as a prerequisite °r psuch representation
issuance of the Series 1997 Bonds and any
n to date by the officers of the Issuer in
made therein sk►ael be deemed to be made on behalf of the Issue .
All action tak
furtherance of the and ratified the Series 1997 Bonds is here y
approved, confirmed
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SECTTON 15. This resolution shall become effective
imm�diate�y upon its adoption.
Passed and adopted by the City Commission of the City of
Clearwater, Florida, this lSth day of , 1997'.
(SEALj� gy;
Mayor-Commission
ATTEST:
~ � "'�
Cit ' EJ.e�k `
Approved as to form and .
correo�ness:
ity At orney
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E%HIBIT A
PURCHASE COrI°J.'RACT
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CITY OF CLEARWA'PER, FLORIDA
[Series 1997A Bond Amountj [Series 1997B Bond Amount]
Gas System Revenue Bonds Gas System Revenue Refunding Bonds
Series 1997A Series 1997B
BOND PURCHASE CONTRACT
City Council ofthe City of
Clearwater, Florida
Clearwater, Florida
Dear Council 1Vdembers:
September 5, 1997
� [LJndervvriter] (the "Underwriter") offers to enter into the following agreement with you (the
"City") which, upan your acceptance of this offer, will be binding upon the City and upon the
Underwriter. This �ffer is made subject to your acceptance on or before 11:59 p.m., E.D ;T., on the
date hereof, and if not so accepted, will be subject to withdrawal bythe Underwriter upon notice to
the City at any time prior to the acceptance hereof by you. All capitalized terms not othenvise
defined herein shall have the meanings set farth in the Of�icial Statement (as hereinafter defined).
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1. Purchase and Sale. Upon the terms and conditions and upon the basis of the
representatians, warranties and agreements set forth herein, the Undervrmter hereby agrees to
purchase from the City for offering to the public and the City hereby agrees to sell and deliver to the
Underwriterfor such purpose, all (but not less than all) of the City's [Series 1997A Bond Amount]
Gas System Revenue Bonds, Series 1997A (the "Series 1997A Bonds") and [Series 1997B Bond
Amount] Gas System Revenue Refunding Bonds, Series 1997B (the "Series 1997B
Bonds")(collectively, the "Series 1997 Bonds"). The Series 1997 Bonds shall be dated as of
September 1, 1997, shall be issued in such principal amounts and bear such rates of interest as set
forth in Exhibit A attached hereto. Interest on the Series 1997 Bonds shall be payable on March 1,
1998, and on each March 1 and September 1 thereafter to maturity. The aggregate purchase price
ofthe Series 1997 Bonds shall be [Purchase Price] (par less Underwriter's discount of [Discount]),
plus accrued interest on the Series 1997 Bonds from September 1, 1997 to the date of Closing (as
hereinafter clefined). The Series 1997 Bonds initialty shall be offered to the public at such prices or
yields (including discounts and premiums) as indicated on E�chibit A attached hereto. The Series 1997
Bonds are issued pursuant to the authority of, and in ful! compliance with, the Constitution of the
State of Florida, and other applicable provisions of law, particularly Chapter 166, Part II, Florida
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Statutes, as amended and supplemented, the City Charter, as amended and supplemented, and other
� applicable provisions of law. The Series 1997 Bonds are being issued more specificaily pursuant to
� Ordinance No. 5118-91 enacted by the City Commission of the City (the "Commission") on
August 15, 1991 (the "Original Ordinance"), which authorized the issuance of Gas System Revenue
Bonds, Series 1991 (the "Series 1991 Bonds"), as amended and supplemented and as further
supplemented by Ordinance No, 5665-94 adopted on September 1, 1994, Ordinance No. 6030-96
adopted on June 6, 1996 and Ordinance No. 6188-97 adopted on September 18, 1997, as further
supplemented by a resolution adopted on September 18, 1997 (as so supplemented, the "Authorizing
Ordinance") (the Original Ordinanc� az►d the Authorizing Ordinance are collectively refened to as the
"Ordinance"). The Series 1997 Bands are special, limited obligations of the City payable solely from
the Net Revenues derived rrom th� operation of the System, as provided in the Ordinance on a parity
with the Series 1991 Bonds, of �ihich [ ] will remain outstanding after the refunding from
the proceeds ofthe Series 1997� Bonds and with the Gas System Revenue Bonds, Series 1996 (the
"Series 1996 Bonds"), w!vch are currently Outstanding in the aggregate principal amount of
$8,750,000 {such unrefunded Series 1991 Bonds and the Series 1996 Bonds hereinafter being
referred to as the "Parity Bonds").
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The Series 1997 Bonds are being issued by the City to (i) in the case of the 1997A Bonds,
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 and Pasco Counties (the "1997
Project"); (ii) in the case of the Series 1997B Bonds, advance refund a portion of the Series 1991
Bonds and all of the Outstanding Gas System Revenue Bonds, Series 1994A (the "Series 199�iA
Bonds) (the "Refunded Bonds"); (iii) fund the Reserve Requirement for the Series 1997 Bonds; and
(iv) pay the costs of issuance of the Series 1997 Bonds.
The Underwriter is duly authorized to execute this Bond Purchase Contract.
2. Good Faith Deposi4. Delivered to you herewith, as a good faith deposit, is a
corporate check of the Underwriter payable to the order of the City in the amount of [Good Faith
Amount] as security for the performance by the Undenvriter of its obligation to accept and pay for
the Series 1997Bonds at Closing (as defined herein) in accordance with the provisions hereof. In the
event that you accept this offer, said check sh�ll be held uncashed by the City as a good faith deposit.
At the Closing, the check will be returned to the Underwriter. In the event you do not accept this
offer, the check shall be immediately returned to the Undecwriter. If the Underwriter fails (other than
for a reason permitted hereunder} to accept and pay for the Series 1997 Bonds at the Closing as
provided herein, the check may be cashed by you and the proceeds retained by the City as and for fuli
liquidated damages for such failure and for any and all defaults hereunder on the part of the
Underwriter, and the retention of such amounts shall constitute a full release and discharge of all
claims and damages for such failure and for any and all such defaults hereunder on the part of the
Underwriter.
In the event that the City fails to deliver the Series 1997 Sonds at the Closing, or if the City
is unable At or prior to the date of Closing to satisfy or cause to be satisfied the conditions to the
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obligations of the Underwriter contained in this Bond Purchase Contract, or if the obligations of the
� Underwriter contained herein shall be cancelled or terminated for any reason permitted by this Bond
Purchase Contract, the City shall be obligated to immediately retum the check to the Underwriter and
the return of such check shall constitute a full release and discharge of all claims and damages for
such failure and for any and all such defaults hereunder on the part of the City.
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3. Offering. It shall be a condition ofyour obligation to sell and deliver the Series 1997
Bonds to the Underwriter, and the obligation of the Underwriter to purchase and accept delivery of
the Series 1997 Bonds, that the entire aggregate principal amount of the 'Series 1997 Bonds shall be
sold and delivered by you and accepted and paid for by the Underwriter at the Closing.
The Underwriter agrees to make a public offering of all of the Series 1997 Bonds at the initial
affering prices set forth in Exhibit A attached hereto; provided, however, the Underwriter reserves
the right to make concessions to dealers and to change such initial offering prices as the Underwriter
shall deem necessary in connection with the marketing of the Series 1997 Bonds.
4. Preliminary Of�iceal Statement and Ofiicial Statement. The City hereby confirms
that it has heretofore made available to the Underwriter a Preliminary Official Statemsnt of the City
relating to the Series 1997 Bonds, dated [POS Date] (which, together with the cover page and
appendices contained therein, is herein called the "Preliminary Of�icial Statement"), and authorizes
and ratifies the use and distribution thereof to prospective purchasers and investors. Within seven
business days of the acceptance hereof by the City, the City shall cause to be delivered the final
Official Statement, dated the date hereof (which, together with the cover page and appendices
contained therein, is herein called the "O�cial Statement"), executed on behalf of the City by its
Mayor-Commissioner and by its City Manager and such reasonable numbers �of conformed copies as
the �Jnt£erwriter shall request, which shall be sufficient in number to comply with paragraph (b)(3)
of Rule i5a2-12 of the Securities and Exchange Commission (17 CFR §240.15c2-12) under the
Securities Exchange Act of 1934 and with Rule G-32 and all other applicable rules of the Municipal
3ecurities Rulemaking Board. The City, by its acceptance hereof, ratifies and approves the
Preliminary Official Statement and ratifies and approves and authorizes the Underwriter to use the
Official Statement and all documents described therein in connection with the public offering and the
sale ofthe Series 1997 Bonds. The City hereby deems tlie P:eliminary Official Statement "final" as
of its date for purposes of SEC Rule 15c2-12(b)(1).
In accordance with Section 218.385, Florida Statutes, the Underwriter hereby discloses the
information required by such Section, including a truth-in-bonding statement, as provided in Exhibit
B attached hereto.
5. Use of Documents. You hereby authorize the use by the Underwriter of (a) the
Ordinance, (b) the Preliminary Official Statement, (c) the Official Statement (including any
supplements or amendments thereto), (d) the Escrow Deposit Agreement, dated as of September 1,
1997 (the "Escrow Deposit Agreement"), between the City and [Paying AgentJ, as Escrow Agent,
relating to the refunding of the Refunded Bonds, (e) the Continuing Disclosure Certificate, of the
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City, dated as of September 1, 1997 (the "Continuing Disclosure Certificate"); and (fl any other
documents related to the transactions contemplated in the Official Statement in connection with the
public offering, sale and distribution of fhe Series 1997 Bonds.
6. Representations, Warranties and Agreements. The City hereby represents,
warrants and agrees as follows:
(a) As of the date of the O�cial Statement and at the time of Closing, the statements and
information contained in the Official Statement will be true, correct and complete in all material
respects and the Official Statement will not omit any statement or information which should be
included therein for the purposes for which the Official Statement is to be used or which is necessary
to make the statements or information contained therein, in light of the circumstances under which
they were made, not misleading.
(b) Between the date of this Bond ,�vrchase Contract and the time of Closing, the City
will not execute any bonds, notes or obligations for bonowed money (other than the Series 1997
�onds or obligations which pledge neither the full faith and credit of the City nor any portion of the
Net Revenues of the System, without giving prior written notice thereof to the Underwriter.
(c) The City is, and will be at the date of Closing, duly organized and validly existing as
a municipal corporation of the State of Flarida, with the powers and authority set forth in the Act.
� (d) The City has full tegal right, power and authority to: (i) enter into this Bond Purchase
Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (ii) adopt the
�rdinance, (iri) sell, issue and deliver the Series 1997 Bonds to the Underwriter as provided herein,
and (iv) carry out and consummate the transactions contemplated by this Bond Purchase Contract,
the Continuing Disclosure Certificate, the Escrow Deposit Agreement, the Ordinance and the Official
Statement and the City has complied, and at the Closing will be in compliance, in all respects, with
the terms of the Act and with the obligations on its part in connection with the issuance of the Series
1997 Bonds contained in the Ordinance, the Series 1997 Bonds, the Escrow Deposit Agreement, the
Continuing Disclosure Certificate and this Bond Purchase Contract.
�
(e) By all necessary official action, the City has duly adopted the Ordinance, has duly
authorized and approved the Official Statement, has duly authorized and approved the execution and
delivery of, and the performance by the City, of this Bond Purchase Contract, the Escrow Deposit
Agreement, the Continuing Disclosure Certificate and all other obligations on its part in connection
with the issuance of the Series 1997 Bonds and the consummation by it of all other transactions
contemplate�i by this Bond Purchase Contract in connection with the issuance of the Series 1997
Bonds; upon delivery of the Series 1997 Bonds, each of the Ordinance, the Continuing Disclosure
Certificate and the Escrow Deposit Agreement will each constitute a legal, valid and binding
obligation ofthe Ciry, enforceable in accordance with their respective terms, subject to applicai�le
bankruptcy, insolvency, and similar laws affecting creditors' rights generally and subjecf, as to
enforceability, to general principles of equiry.
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( fl When delivered to and paid for by the Underwriter at the Ciosing in accordance with
F� the provisions of this Bond Purchase Contract, the Series 1997 Bonds will have been duly authorized,
executed, issued.and delivered and will constitute valid and binding obligations of the City in
conformity withr the Act and the Ordinance, and shall be entitl�d to the benefits of the Ordinance,
including a prior pledge of and lien upon the Net Revenues of tne System in accordance with the
provisions of the Ordinance, subject to bankruptcy, insolvency, reorganization, moratorium and ather
similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles
of equity.
(g) The adoption of the Ordinance and the authorization, execution and delivery of this
Bond Purchase Contract, the Continuing Disclosure Certificate, the Escrow Deposit Agreement and
the Series 1997 Bonds, and compliance with the provisions hereof and thereof, will not conflict with,
or constitute a breach of or default under any law, administrative regulation, consent decree,
ordinance, resolution or any agreement or other instrument to which the City was or is subject, nor
will such enactment, adoptioq execution, delivery, authorization or compliance result in the creation
or impositian of any lien, charge or other security interest or encumbrance of any nature whatsoever
upon any of the property or assets of the City, or under the terms of any law, administrative
regWation, ordinance, resoluYion or instrument, except as expressly provided by the Ordinance or the
Series 1997 Bonds.
(h) At the time of Closing, the City will be in compliance in all respects with the covenants
and agreements contained in the Act and the Ordinance and no event of default and no event which,
� with the lapse of time or giving of notice, or both, would constitute an event of default under the
Ordinance will l�ave occurred or be continuing.
�
(i) Except as provided in the Official Statement, all approvals, consents, authorizations
and orders of any govemmental authority or agency having jurisdiction in any matter which would
constitute a condition precedent to the performance by the City of its obligations hereunder and under
the Ordinance, the Continuing Disclosure Certificate or the Escrow Deposit Agreement have been
obtained and are in full force and effect.
(j) The City is lawfully empowered to pledge and grant a lien upon the Net Revenues of
the System for payment of the principal of ar��i interest on the Series 1997 Bonds.
(k) Except as disclosed in the Official Statement, to the best knowledge of the City, as
of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any cowt, govemment agency, public board or body, pending or threatened against the
City, affecting or seeking to prohibit, restraia or enjoin the sale, issuance or delivery of the Series
1997 Bonds or the pledge of and lien on the Net Revenues of the System created by the Ordinance
or contesting or affecfing as fo the City the validity or enforceability in any respect relating to the
Series 1997 Bonds, the Ordinance, the Continuing Disciosure Certificate, the Escrow Deposit
Agreement or this Bond Purchase Contract, or contesting the t�-exempt status of interest on the
5enes 1997 Bands, or contesting the completeness or accuracy of the Ofiicial Statement or any
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supplement or amendment thereto, or contesting ths powers of the City or the City Council, or any
�''� authority for the issuance of the Series 1997 Bonds, the adoption of the Ordinance or the execution
' and delivery by the City of this Bond Purchase Contract, the Continuing Disclosure Certificate or the
Escrow Deposit Agreement.
(1) The City will fumish such information, execute such instruments and take such other
action in cooperation with the Underwriter as the Underwriter may reasonably request in order to (i)
qualify the Series 1997 Bonds for of%r and sale under the "blue sky" or other securities laws and
regulations of such states and other jurisdictions of the United States as the Underwriter may
designate, and (ii) determine the eligibility of the Series 1997 Bonds for investment under the laws
of such states and other jurisdictions, and will use its best efforts to continue such qualifications in
effect so long as required for the distribution of the Series 1997 Bonds; provided, however, that the
City shall not be required to execute a general or special consent to service of process or qualify to
do business in connection with any such qualification or determination in any jurisdiction or expend
its own funds witta respect to the foregoing.
(m) The City will not take or omit to take any action which action or omission will in any
way cause the proceeds frnm the sale of the Series 1997 Bonds to be applied in a manner contrary
to that provided for in the Ordinance and as described in the Ofi'icial Statement.
(n) Except as expressly disclosed in the Official Statement, the City neither is nor has been
in default any time after December 31, 1975, as to payment of principal or interest with respect to
,..� ari obligation issued or guaranteed by the City (except with respect to bonds for which it has acted
w� solety as a"conduit issuer").
�
(o) The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied
upon.
{p) As of its date, the Preliminary Official Statement is hereby deemed "final" by the Ciiy
for purposes of SEC Rule 15c2-12(b)(1), except for "permitted omissions" as defined in such Rule.
(q) If, after the date of this Bond Purchase Contract and until the earlier of (i) 90 days
from the end of the "underwriting period" (as defined in SEC Rule 15c2-12) or (ii) the time when the
Official Statement is available to any person from a nationally recognized repository, but in no case
less than 25 days following the end of the underwriting period, any event shall occur which might or
would cause the Official Statement, as then supplemented or amended, to contain any untrue
statement of a material fac4 or to omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, the City shall
notify the iJnderwriter thereof, and, if in the opirtion of the Underwriter such event requires the
prepara6on and publication of a supplement or amendment to the Official Statement, the City will at
its own expense forthwith prepaze and fumish to the Underwriter a sufficient number df Copies of an
amendment of or supplemerrt to the Official Statement (ut form and substance satisfactory to Ct�unsel
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to the Underwriter) which will supplement or amend the Official Statement so that it wil! not contain
i� an unWe statement of a material fact or omit to state a material fact necessary in order to make the
` statements therein, in light of the circumstances existing at such time, not misleading. The
Underwriter shall notify the City in writing of the date on which the "underwriting period" ends.
(r) The City shall undertake, pursuant to the Ordinance, to comply with the Continuing
Disclosure Certificate.
7: C[osing. At 10:00 A.M., E.D.T., on [Closing Date], or at such time on such earlier
or later date as shall be agreed upon, you will deliver to the Underwriter, at the location and place
to be agreed upon by you and the Undeiwriter, the Series 1997 Bonds in definiti�e form, duly
executed, together with the other documents herein mentioned; and the Underwriter will accept such
delivery and pay at such location as may be agreed upon by you and the Underwriter the purchase
price of the Series 1997 Bonds as set forth in Section 1 hereof, plus accrued interest on the Series
1997 Bonds from September 1, 1997, by immediatety available funds, payable to the order of the
City. This delivery and payment is herein called the "Closing." The Series 1997 Bonds shall be made
available to the Underwriter at least one business day before the Closing for purposes of inspecting
and packaging. The Series 1997 Bonds shall be prepared and delivered as fully registered Bonds.
8. Closing Conditions. The Underwriter has entered into this Bond Purchase Contract
in reliance upon the representations and warranties of the City herein contained and the performance
by the City of its obligations hereunder, both as of the date hereof and as of the time of Closing. The
�obligations of the Underwriter under this Bond Purchase Contract are and shalt be subject to the
,� following conditions:
(a) The representations, warranties and agreements of the City contained herein shall be
true and correct and complied with as of the date hereof and as of the date of the Closing, as if made
on the date ofthe Closing.
(b) At the tinne of the Closing, the Ordinance shall be in full force and effect in accordance
with its terms and shall not have been amended, modified or supplemented except as amended,
modified or supplemented by a resolution incorporating the terms and conditions contained in the
municipal bond insurance commitment of the Insurer (as defined herein), and the Official Statement
shall not have been supplemented or amended, except in any such case as may have been agreed to
by the Underwriter.
(c) At the time of Ctos'mg, a resolution of the City shall have incorporated the terms and
conditions contained in the municipal bond insurance commitment of the Insurer into the Ordinance.
(d) At the time ofthe Closing, all official action of the City relating to this Bond Purchase
Contract, the ContinuingDisclosure Certificate, the Escrow Deposit Agreement and the 5e�ies �9g7
Bonds shall be in full fbrce and effect in acc��dance with their respective terms and shall not have
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been amended, modified or supplemented in any material respect, except in each case as may have
been agreed to by the Underwriter.
(e) The Underwriter sha11 have the right to cancel the agreement contained herein to
purchase, to accept delivery of and to pay for the Series 1997 Bonds by notifying you in writing of
their intention to do so if:
(i) between the date hereof and the Closing, legislation shall have been enacted
by the Congress of the United States, or recommended to the Congress for passage by the
President ofthe United States, or favorabiy reported for passage to either House of Congress
by any Committee of such House, or passed by either House of Congress, or a decision shall
have been rendered by a court of the United States or the United States Tax Court, or a ruling
shall have been made or a regulation shall have been proposed or made by the Treasury
Department of the United States or the Internal Revenue Service, with respect to the federal
ta�cation ofinterest received on obligarions ofthe general character of the Series 1997 Bonds,
wl�ich, in the opinion of Counsel for the Underwriter has, or will have, the effect of making
such interest subject to inclusion in gross income for purposes of federal income taxation,
except to the extent such interest shall be includable in gross income on the date hereof, or
�}
(ii) between the date hereof and the Closing, legislation shall be enacted or any
action shall be taken by the Securities and Exchange Commission which, in the opinion of
Counsel for the Underwriter, has the effect of requiring the contemplated issuance or
distribution of the 5eries 1997 �onds to be registered under the Securities Act of 1933, as
amended, or of requiring the Ordinance to be qualified und�r the Tnist Indenture Act of 1939,
as amended, or
(iii) an event described in paragraph (s) of Section S hereof shall have occurred
which requires an amendment or supplement to the Official Statement and which, in the
reasonable opinion of the Underwriter, materially adversely affects the marketability of the
Series 1997 Bonds or the market price thereof, or
(iv) in the opinion of the UnrJerwriter, payment for and delivery of the Series 1997
Bonds is rendered impracticable or inadvisable because (A) trading in securities generally shall
have been suspended on the New York Stock Exchange, Inc., or (B) a general banking
moratorium shall have been established by Federal, New York or Florida authorities, or (C)
the engagement of the United States in a war or other hostilities or the threat of war or other
Itostilities, or
(v) an order, decree or injunction of any court of competent jurisdiction, or any
order, ruling� regulation or administrative proceeding by any governmental body or board,
shall have been issued or commenced, or any legis�atidn enacted, with the purpose or eff'ect
of prohi'biting the issu�ance, of�"ering or sale of th� Series 1997 Bonds as contemplated hereby
S
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or by the Official Statement or prohibiting the adoption of the Ordinance or the performance
thereof, or r;
{vi) between the date hereof and the Closing, the City has, without the prior
written consent of the Underwriter, offered or issued any bonds, notes or other obligations
for borrowed money, or incurred any material liabilities, direct or contingent, other than as
described in the Official Statement, in either case payable from the full faith and credit of the
City or any portion of the Net Revenues of the System, or
(vii) the President of the United States, the office of Management and Budget, the
Departm�nt of Treasury, the Internal Revenue Service or any other governmental body,
department, agency or commission of the United States or the State of Florida shall take or
propose to take any action or implement or propose regulations, rules or legislation which,
in the reasonable judgment of the Underwriter, materially adversely aifects the market price
ofthe Series 1997 Bonds or causes any material information in the Official Statement, in light
of the circumstances under which it appears, to be misleading in any material respect, or
(viii) any executive order shall be announced, or any legislation, ordinance, rule or
regulation shall be proposed by or introduced in, or be enacted by any governrnental body,
department, agency or commission of the United States or the State of Florida or the State
of New York, having jurisdiction over the subject matter, or a decision by any court of
competent jurisdiction within the United States or within the State of Florida or the State of
New �Iork shall be rendered which, in the reasonable judgment of the Underwriter, materially
adversely a$'ects the market price of the Series 1997 Bonds or causes any information in the
Official Statement to be misleading in any material respect, or
(ix) prior to Closing, either (A) Moody's Investors Service or Fitch Investors
Service shall inform the City or the Underwriter that the Series 1997 Bonds will not be rated
at least AAA and Aaa, respectively or (B) [Insurer Name] (the °Insurer") shail inform the
iJnderwriter or the City that it shall not deliver its municipal bond insurance policy (the
"Policy") at the time of Closing, or
(x) the rating of any class of security of the City shall have been downgraded or
withdrawn by a national credit rating service.
(� At or prior to the date of the Closing, the Underwriter shall receive the following
documents:
(i) The Ordinance certified by the Clerk of the City under seal as having been duly
enacted, adopted or executed, as the case may be, by the City and as being in effect, with only
such supplements, modifications or amendments as may have been agreed to by the
Underwriter.
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(ii) Fully executed counterparts of (A) the Escrow Deposit Agreement (B) the
Continuing Disclosure Certificate, and (C) the Official Statement and copies of conformed
Official Statements sufficient to satisfy the requirements of Section 4 hereof.
(iii) A final approving opinion o£Bryant, Miller and Otive, P.A., Bond Counsel to
the City, addressed to you, dated the date of the Closing, in substantially the form included
in the Official Statement as Appendix D.
(iv) A letter of Bryant, Miller and Olive, P.A., addressed to the Underwriter, and
dated the date of Closing, to the effect that their final approving opinion refened to in Section
8(fl(rii) hereof may be relied upon by the Underwriter and the Insurer to the same e�ctent as
if such opinion were addressed to the Underwriter and the Insurer.
(v) A supplemental opinion of Bryant, Miller and Olive, P.A., addressed to you
and the Underwriter, and dated the date of Closing, to the effect that, (A) the information set
forth in the Official Statement under the headings, "INTRODUCTION," "PURPOSES OF
THE SERIES 1997 �ONDS," "DESCRIPTION OF THE SERIES 1997 B�NDS,"
"SOURCE OF PAYMENT ANI� SECURITY FOR TI� SERIES 1997 BONDS," "FLOW
OF FiJNDS," "COVENANTS," "LEGALITY," and "VALIDATION" (other than the
financial and statistical information included therein �s to which no opinion need be
expressed), insofaz as such information purports to be descriptions or summaries of the Act,
the Ordinance and the Series 1997 Bonds, constitute accurate and fair statements or
summaries ofthe matters set forth or the documents referred to therein, and the information
under the heading "TAX EXEIvIPTION" is correct, and (B) the Series 1997 Bonds are not
required to be registered under the Securities Act of 1933, as amended, and it is not necessary
to qualify the Ordinance under the Trust Indenture Act of 1939, as amended.
(vi) An opinion of Pamela K. Akin, Esquire, City Attorney, addressed to you, the
Insurer and the Underwriter, and dated the date of the Closing, to the effer,t that, (A) the City
is a municipal corporation, duly created and validly existing and has full legal right, power and
authority to adopt the Ordinance and perform its obligations under the Ordinance, and to
authorize, execute and deliver and to perform its obligations under this Bond Purchase
Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement, (B) the
City has duly adopted the Ordinance and has duly authorized, executed and delivered this
Bond Purchase Contract, the Continuing Disclosure Certificate and the Escrow Deposit
Agreement, and assuming the due authorization, execution and delivery of this Bond Purchase
Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement by the
other parties thereto, each such instrument constitutes the legal, binding and valid obligation
of the City, enforceable in accorda��ce with its respective terms; provided, however, the
enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and subject, as to enforceability, to
general principles nf equity and the Series 1997 Bonds have been properly executed by the
prdper af�icers of the Ciry, (C) the informatian in the Offcial Statement as to tegal rnatters
1(1
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relating to the City, the Act, the Series 1997 Bonds and the Ordinance is correct in all
'""� material respects and does not omit any statement, which in her opinion, should be included
or referred to therein, and in addition, with respect to the information in the Official Statement
and based upon her review of the Official Statement as City Attorney and without having
undertaken to determine independently the accuracy or completeness of the contents of the
Official Statement, she has no reason to believe that the Official Statement (except for the
financial and statistical data contained therein and the information relating to the Insurer and
the Policy, as to which no view need be expressed) contains an untrue statement of a material
fact or omits to state a mat�rial fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were made, not
misleading, (D) the use of the Preliminary Ofi'icial Statement by the Underwriter for the
purpose of offering the Series 1997 Bonds for sale has been duly authorized and ratified by
the City, (E) the Official Statement has been duly authorized, executed and delivered by the
City, and the City has consented to the use thereof by the Underwriter, (F) to the best of her
knowledge, the adoption of the Ordinance, and the authorization, execution and delivery of
this Bond Purchase Contract, the Escrow I�eposit Agreement, the Continuing Disclosure
Certificate and the Series 1997 Bonds, and compliance with the provisions hereof and th�ereof,
will not conflict with, or constitute a breach of or defauit under, any law, administrative
regulation, consent decree, ordinance, resolution or any agreement or other instrument to
which the City was or is subject, as the case rnay be, nor will such enactment, adoption,
execution, delivery, authorization or compliance result in the creation or imposition of any
lien, charge or other security interest or encumbrance of any nature whatsoever upon any of
� the property or assets of the City, or under the terma of any law, administrative regulation,
ordinance, resolution or instrument, except as expressly provid�.d by the Ordinance, (G) to
the best of her knowledge, all approvals, consents, authorizations and orders of any
governmental authority or agency having jurisdiction in any matter which would constitute
a condition precedent to the performance by the City, of its obligations hereunder and under
the Ordinance have been obtained and are in full force and effect, (H) the City is lawfully
empowered to pledge, and grant a prior lien oq the Net Revenues of the System for payment
of the principal of and interest on the Series 1997 Bonds as the same becomes due and
payable, and (I) except as disclosed in the Official Statement, to the best of her knowledge,
as of the date of such opinion, there is no action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, government agency, public board or body, pending
or threatened against the City, affecting or seeking to prohibit, restrain or enjoin the sale,
issuance or delivery of tlie 5eries 1997 Bonds, or the pledge of and lien on the Net Revenues
of the System, or contesting or affecting the validity or enforceability in any respect of the
Series 1997 Bonds, the Ordinance, the Escrow Deposit Agreement, the Continuing
Disclosure Certificate or this Bond Purchase Contract, or contesting the tax-exempt status
of interest on the Series 1997 Bonds, or contesting the completeness or accuracy of the
Official Statement or any supplement or amendment thereto, or contesting the powers of the
City or the City Council, or any a�thority for the issuance of the Series 1997 Bonds, the
adoption of the Ordinance or the execution and delivery by the City of this Bond Purchase
Contract, the Continuing Disclosure Certificate and the Escrow Deposit Agreement.
�
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(vii) A certificate, which shall be true and correct at the time of Closing, signed by
`�i the Finance Director/City Treasurer of the City and the l�anaging Director and Executive
Officer ofthe System, or such other officials satisfactory to tl�e Underwriter, and in form and
substance satisfactory to the Underwriter, to the ef%ct that, to the best of their knowledge
and belief (A) the representations, wananties and covenants of the City contained herein are
true and correct in all material resnects and are complied with as of the time of Closing, (B)
the information appearing in the Official Statement under the caption "THE SYSTEM,"
"COMBINED DEBT SERVICE REQUIREMENTS," and "HISTORICAL COVERAGE OF
MAXIMUM ANNUAL DEBT SERVICE BY TI� SYSTEM NET REVENiJES" has been
provided by the City specifically for inclusion therein and is true, correct and complete as of
its date, (C) except as described under the caption refened to in (B) above, since the date of
the audited financial statements contained in the OH'icial Statement, there has been no materiai
adverse change in the financial condition of the System, and (D) the Ofiicial Statement did
not as of its date, and does not as of the date of Closing, contain any untrue statement of a
material fact or omit to state a material fact which should be included therein for the purposes
for which the Official Statement is to be used, or which is necessary in order to make the
statements contained therein, in light of the circumstances in which they were made, not
misleading (provided, that no opinion need be expressed regarding the information contained
therein relating to the Insurer or the Policy).
{viii) An opinion of Counsel to the Underwriter, addressed to the Underwriter, and
dated the date of Closing, substantially to the effect that, (A) with respect to the information
•� in the Official Statement and based upon said firm's participation in the preparation of the
-.-�'� Ofi6cial Statement as Counsel to the Underwriter and without having undertaken to determine
independently the accuracy or completeness of the contents of the Official Statement, said
firm has no reason to believe that the Official Statement (except for the financial and statistical
data contained therein and the information relating to the Insurer or the Policy, as to which
no view need be expressed) contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the statements made therein,
in light ofthe circumstances under which they were made, not misleading, and (B) the Series
1997 Bonds are exempt from registration under the Securities Act of 1933, as amended, and
the Ordinance is exempt from qualification under the Trust Indenture Act of 1939, as
amended.
(ix) A certificate of an authorized representative of [Paying Agent] (the "Bank"),
as Registrar, Paying Agent and Escrow Agent to the effect that (A) the Bank is a state bank
duly organized, validly existing and in good standing under the laws of the United States of
America and is duly authorized to exercise trust powers in the State of Florida, (B) the Bank
has all requisite authority, power, licenses, permits and franchises, and has full corporate
power and legal author'ity to execute and perfonn its functions under the Ordinance and the
Escrow Deposit Agreement, (C) the performance by the Bank of its functions under the
Ordinance and the Escrow Deposit Agreement will not result in any violation of the Articles
of Association or Bylaws of the Bank, any court order to which tite H�nle is subject or �ny
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agreement, indenture or other obligation or instrument to which the Bank is a party or by
�� which the Bank is bound, and no approval or other action by any governmental authority or
agency having supervisory authority over the Bank is required to be obtained by the Bank in
order to perform its functions under the Ordinance and the Escrow Deposit Agreement, (D)
the Escrow Deposit Agreement constitutes a valid and binding obligation of the Bank in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and subject, as to
enforceabiliry, to general principles of equity and (E) to the best of such representative's
knowledge, there is no action, suit, proceeding or investigatior� at law or in equity before any
court, public board or body pending or, to his or her knowledge, threatened against or
affecting the Bank wherein an unfavorable decision, ruling or finding on an issue raised by any
party thereto is likely to materially and adversely affect the ability of the Bank to perform its
obligations under the Ordinance and the Escrow Deposit Agreement.
(x) An executed copy of the Escrow Deposit Agreement.
(xi) An executed copy of the verification report of [Verification Agent) as
described in the Official Statement under the heading "VERIFICATION OF
MATHEMATICAL COMPUTATIONS."
{xu) The Policy issued by the Insurer.
� (xiii) An opinion of general counsel to the Insurer or a certificate of an officer of the
Insurer daied the date of the Closing and addressed to the Underwriter, concerning the
Insurer, the Policy, and the information relating to the Insurer and the Policy contained in the
Official S4atement, in form and substance satisfactory to Bond Counsel, the Underwriter and
Counset to the Underwriter.
(xiv) A certificate of the Mayor deeming the Preliminary Official Statement "final"
as ofits date for purposes ofRule 15c2-12;
(xv) A comfort letter or certificate of the Finance Director/City Treasurer of the
City relating to the period commencing October 1, 1996 and continuing to the date of
Closing,
(xvi) A letter of Fif.ch Tnvestors Service to the effect that the Series 1997 Bonds
have been assigned a rating no less favorable than "" and a letter of Moody's Investors
Service to the effect that the Series 1997 Bonds have been assigned a rating no less favorable
than "," both of which ratings shall be in effect as of the date of Ctosing.
(xvii) Such additional legal opinions, certificates, instruments and other documents
as the Undervvriter may reasonably request to evidence the truth and accuracy, as of the date
herenfand as ofthe date rsfthe Closing, ofthe City's representations and warranties corttained
1�
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herein and ofthe statements and information contained in the Official Statement and the due
performance or satisfaction by the City on or prior to the date of Closing of all the agreements
then to be performed and conditions then to be satisfied by it,
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to
purchase, to accept delivery of and to pay for the Series 1997 Bonds contained in this Bond Purchase
Contract and the Underwriter does not waive such inability in writing, or if the obligations of the
Underwriter to purchase, to accept delivery of and to pay for the Series 1997 Bonds shall be
terminated for any reasorr permitted by this Bond Purchase Contract, this Bond Purchase Contract
shall terminate, the good faith deposit described in Section 2 hereof shall be returned to the
Underwriter and neither the Underwriter nor the City shall be under any further obligation hereunder,
except that the respective obligations of the City and the Underwriter set forth in Section 9 hereof
shall continue in full force and effect.
9. Expenses. The Underwriter shall be under no obligation to pay, and the City shall
pay, any expense incident to the performance of the C,ity's obligations hereunder including, but not
limited to: {a) the cost of preparation, printing and delivery of the Ordinance; (b) the cost of
preparation and printing of the Series 1997 Bonds; (c) the fees and disbursements of Bond Counsel
or Disclosure Counsel; (d) the fees and disbursements of tt�e City's certified public accountants; (e)
th� fees and disbursements of any experts, consultants or advisors retained by the City; (� fees for
bond ratings; (g) the fees and expenses of the Registrar, the Paying Agent, Escrow Agent,
Verification Agent and of their respective counsel; and (h) the costs of preparing, printing and
.�, delivering the Preliminary Official Statement and the Ofi'icial Statement and any supplements or
,,,,,,„� amendments thereto.
The Underwriter shall pay: (a) the cost of preparing, printing and delivery of this Bond
Purchase Contract; (b) the cost of all "blue sky" and legal investment memoranda and related filing
fees; (c) the fees and expenses of Counsel to the Underwriter; (d) all advertising expenses; and (e)
all other expenses incurred by them or any of them in connection with the public offering oFttie Series
1997 Bonds. In the event that either party shall have paid obligations of the other as set forth in this
Section 9, adjustment shall be made at the time of the Closing.
10. Notices. Any notice or other communication to be given to you under this Bond
Purchase Contract may be given by mailing the same to City of Clearwater, Florida, 100 South Myrtle
Ave, Clearwater, Florida 34616-5520, to the attention of Finance Director/ City Treasurer, and any
such notice or other conununication to be given to the Underwriter may be mailed to [Underwriter
Address].
ll. Parties in Interest. This Bond Purchase Contract is made solely for the benefit of
the City and the iJnderwriter and no other party or person shall acquire or have any right hereunder
or by virtue hereof. All your representations, warranties and agreements in this Bond Purchase
Con4ract shall remain operative and in full force and e�'ect and shall survive the delivery of the Series
1997 Bonds,
14
�� �
12. Waiver. Notwithstanding any provision herein to the contrary, the performance of
� any and all obligations of the City hereunder and the performance of any and all conditions contained
� herein for the benefit of the Underwriter may be waived by the Underwriter, in their sole discretion,
and the a,pproval of the Underwriter when required hereunder or the determination of their
satisfaction as to any document refened to herein shall be in writing, signed by an appropriate officer
or officers of the Underwriter and delivered to you.
13. No Liability. Neither the City Commission, nor any of the members thereof, nor any
officer, agent or employee thereof, shall be charged personally by the Underwriter with any liability,
or held liable to tl• , Underwriter under any term or provision of this Bond Purchase Contract because
of its execution or attempted execution, or because of any breach or attempted or alleged breach
thereof.
14. Governing Law. This Bond Purchase Contract, and the terms and conditions herein,
shall constitute the full and complete agreement between the City and the Underwriter with respect
to the purchase and sale of the Series 1997 Bonds. This Bond Purchase Contract shall be governed
by and construed in accordance with the laws of the State of Florida.
Very truly yours,
[UNDERV6�RITEI2]
�
Title:
'Accepted this day of September, 1997<
CTI'4' OF CLEARV6'ATER, FLOB2IDA ATTEST:
Mayor
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15
City Clerk
7 /'vT
SERIES 1997 BONDS
MATURITY SCHEDULE
EXHIBIT A
Maturity Principal
(Sentember 1) Aznount Interest Rate Yield
� Idedempteon Provesio�s
[Pull from 4SJ
A-1
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��'�T
EX�IIB�T B
DISCLOSUI2E STATEMENT AND TRUTH-IN-BONDING STATEMENT
Se�tember � 1997
City Council of the City of
Clearwater, Florida
Clearwater, Florida
Re: [Series 1997ABond Amount] City of Clearwater, Florida Gas System
Revenue Bonds, Series 1997A and [Series 1997B Bond Amount] City
of Clearwater, Florida Gas System Revenue Refunding Bonds, Series
1997B
Dear Council Members:
-�, In connection with the proposed issuance by the City of Clearwater, Florida (the "City") of
�;;9 jSeries 1997A Bond Amount] Gas System Revenue Bonds, Series 1997A (the "Series 1997A
Bonds") and [Series 1997B Bond Arnount] Gas System Revenue Refunding Bonds, Series 1997B
(the "Seriss 1997B Bonds")(collectively, the "5eries 1997 Bonds"), [iJnderwriter] (the
"U�derwriter") is underwriting a public offering of the Series 1997 Bonds.
The purpose of the following seven paragraphs of this letter is to furnish, pursuant to the
provisions of Section 218.385(6), Florida Statutes, as amended, certain information in respect of the
arrangements contemplated for the purchase and sale of the Series 1997 Bonds, as follows:
{a) The nature and estimated amount of expenses to be incurred by the Underwriter in
connection with the purchase and re-offering of the Series 1997 Bonds are set forth in Schedule I
attached hereto.
(b) There are no "finders," as defined in Section 218.386, Florida Statutes, as amended,
connected with the sale and purchase of the Series 1997 Bonds.
(c) Tlie underwriting spread, the difference between the price at which the Series 1997
Bonds will be inikially offered to the public by the Unden�riter and the price to be paid to the City for
the Series 1997 Bonds, exclusive of acciued interest, will be [ ] per $1,000 of Series 1997 Bonds
issued,
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(d) As part of the estimated underwriting spread set forth in paragraph (c) above, the
�
Underwriter will charge a management fee of [ ) per $1,000 of Series 1997 Bonds issued.
(e) No other fee, bonus or nther compensation is estimated to be paid by the Underwriter
in connection with the issuance of the Series 1997 Bonds to any person not regularly employed or
retained by the Underwriter (including any "finder" as defined in Section 218.386(1)(a), Florida
' Statutes), except as specifically enumerated as expenses to be incuned by the Underwriter, as set
forth in paragraph (a) above.
�
( fl The names and addresses of the Underwriter are:
The purpose of the following two paragraphs is to furnish, pursuant to the provisions of
Sections 218.385(2) and (3), Florida Statutes, as amended, the truth-in-bonding statement required
thereby, as follows:
{a) The City is proposing to issue the Series 1997 Bonds to (i) in the case of the 1997A
Bonds, 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 and Pasco Counties (the
"1997 Praject"); (ii) in the case of the Series 1997B Bonds, advance refund a portion of the Series
1991 Bonds and all of the Outstanding Gas System Revenue Bonds, Series 1994A (the "Series 1994A
Bonds); (iii) fund the Reserve Requirement for the Series 1997 Bonds; and (iv) pay the costs of
issuance of the Series 1997 Bonds. The obligations are expected to be repaid over a period of
approximately [] years. At the interest rates set forth on Exhibit A to the Bond Purchase Contract
to which this is attached, totai interest paid over the life of the obligation will Ue approximately [
�•
(b) The source of repayment or security of the Series 1997 Bonds is �he Net Revenues
of the gas system of the City. Authorizing this debt will result in an average of approximately [
] of such Net Revenues not being available to finance other services of the City each year
for the term of the issue.
B-2
�/M�
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The foregoing is provided for information purposes only and shall not affect or control the
actual terms and conditions of the Series 1997 Bonds.
f�
Very truly yours,
[UNDERWRITER]
Title:
���s�
�
SCHEDULEI
UNDERWRITER'S ESTIIVIATED EXPENSES
{Per 51,000 of Series 1997 Bonds)
Underv�mter's Counsel
Travel and Closing
Postage/Fax/Phone
Clearance/Computer
DTC/CUSIP/Dalnet
Day L�an
Total
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I-1
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EBHIBI'i' B
PR$�,3MTIdAitY OFF�CIAL 8°i'�TE2RENT
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NEW ISSUE
�QOK-F,N"i'RY ONLY
PRELINIINARY OFFICIAL STATEMENT IDATED , 1997
RaHnes: Aloady�'sp
Fitch:
(Insurer] Insured
(Sec "Ratin�s" herein)
In the opinion ofBond Counse! under extsting laws, regulatioiu andjudicial decisiau inlerest orr the Series 1997Bonds rs excludedfromgross inconre for
puslwses offedeml incmne taxation and rhe Series 1997 Bonds are exempt from al! presen! intangible personal property taxes in�posed pursuant !o Chapler
199, Flosfda S1a(utes. See, hawever "Tax Exemplton"herein for a description of certain jederal minimum m�d o1/ierspecia! laxes 1ha1 may aJJ'ect the 1ax
tmahnenl of interesl onlhe SerJes 1997Bonds.
CITY �F CLEARWAT�R, FLOItIDA
(Serie� 19�7A �ond Amxount]* [Series 1997B Bond Amount]*
Gas Systemn Reven�re �onds Gas System Redenue Refunding Bonds
Series 1997�.
Datealc �ctober 1,199i
Series 1997B
Due: September 1, as shown belovr
The City of Clearwater, Florida, Gas System Revrnue Bonds, Serics 1997A (the "Series 1997A Bonds'� and Gas System Revenue Refunding IIonds, Smea 1997B (the
"Saies 1997B Handa") (collcctively,. the "Smes� 1997 Bonds'� are bcing issued in Ihe fmm of fully registered bonds and will be initially issued to and registcicd in the name of Cede�
& Co:, as nonw�cc forThe DeposiWry Tiust Company, New York, Ncw York ('DTC"), which will act as seouritics depository for thc Smes 1997 Bands. The Serios 1997 Bonds will
be available to purchasas in p[incipal drnominations of 55,000 and integral multiples thereof under� the book-enVy system�maintained. by DTC ttuougli brokers and dealcrs who are,
or acttkwigf�, DTC Pmticipants. Purcluurs will not roceivephysical delivery of the Scrios 1997 Bonds. For so �long as any purchaser is the brneficial ouner of a Series 1997 Hond,
he anr,t mamtain an account with a broker m deala who is, or acts througty a DTC PariicipanYin oida ta rcceive paymrnt of principal of and interest on such Series 1997 Bond. For
sa irng as the book-arVy system is in affect any reference to a Bondholda or IIondholdrn shall be deemed to be Cede �. Co. and not lhe bcneficial oKners of the Series 1997 Bonds.
See "$ook-Entry Only $yst�m" under'DESCRIPTION OFT!-]E SERIES 1997 BONDS." Interest on thc Seriw 1997 Bonds is payable semi-annually, commrncing March 1, 1998,
and �chMarcli 1 and Septartberl thpes[ief. SunTnnt Bank,�Central Florida, National As.wciation, Orlando, Florida, will act as. Paying Agcnt with respcct to lhe Series 1997 Bonds.
. TRr. Series 19�7 Honds are subjed lu optional and mandatory sinking fund rcdemption priorto lheir stated maturity under the terms and conditions described herein..
11ro Series 1�97 Ba�ds will baisnud by ihe CityofClrarwatey florida (lhn "City") ro(i) in the case of ihe 1997A Honds, finance the costs of ccrtain additions, extensions,
s�iemcr.ts a repLlcemcnts of lhe exisling gas system owned and operated by the City (Lhe "Sy3lem'� wilh�n Pinellu and. Pasco Counties (the "1997� Project"); (ii) in the case of the
Serid� 1997E; Bnnds, advance rcfund a poRion of lhe City�e Gas System Rwrnue Bonds, Smes 1991 (the "1991 Bonds") and the City's Gas System RevcnUC Bonds, Series 1994A
(�hm"1944ABac�"},(i:i) fund. thc Rcserve Account in the Sinking Fund to satisfy the Reserve Requiremrnt for lhe Series 1997 Bonds; and (iv) pay the costs af issuance of the Smes
]597 Bosuls. The City may elecf W�educe the siu o� ar eliminate in its rnEisty, ihe issue of Series 1997B Bonds deprnding upon the levcl of interest rate savings which can be achieved
as !ha cesult of tha rofvnding.
� The Series 2497 Do�ds are limited� obligatiom of the City, payable solely &om lhe Net Revenues dmved from the operayon of lhe System, as�provided in Ordinance No.
"�5118-9I cnaceed by the City Commission (the "Commission") on August 15, 1991 (the "Originai Qrdinance"), as amended and supplemented, including by Ordinance No. 5665-94,
O�du�aMe No. �6030.96 md Qrdinaene No. 618&97, and aa suppiemrnted by rowlutions �of the City.' Thc Series 1997 Bonds and the interest lhereon shall not be and shall not constit�le
an indc6tuit�as ofthe City m� ofthe Stnle of Florida or any political subdivision thereoFwithin the mwning of any Constitutional, sWtu[ory, charler or olha limiWtian of indebtedness,
aml rcitha the full failh and credit nar the laxing powcn of the State of Florida or lhe City am pledgcd as security for the payment of thc principal of, redemption premium, if any, or
intctcst on thc Serics 1497 Bonds and no holder ar.holders oFany Series 1997 Bonds shall ever have Ihe right to compel lho exemise of the ad valorem Wcing powers of the City, or
taxation in any fmm of any real property Wercin to pay the Series 1997 Bonda or the inlerest thercoa
The Suia 1997 Bot�a will be on a parity and rank a�ually, as to lien on and sowce and security for payment from the Net Rcvenues and in all other respecls, with the 1991
Bonda u�d thc 1994ABmxlswt�ich are not tefwded trilhthe procceds ofthe Saies l997B Hond+ and lhc City'e Gas System Revrnue Bonds, Seriea 1996, as more paAicularly described
hetcin
P�ymrntofthe pt'vrcipal ofand intaest on the Smp 1997 Bonds whrn duo will be guaranteed wda a municipal band ireurance policy to be issued concurtently with the
delivery of ihe Scria 1997 Bonds by MB1A Insursnce Cmpomtion. Sce 'TQUNICIPAI. BOND INSURANCE" herein.
[;vIBIA Logo]
For a diuusston of the tertns ind provisions of such policy, including lhe limilatione, see "bIUP7ICIE'AL BOND L�SURANCE" herein.
1'hu cavu paga caNaire catain infatmation for quick rcfaerce only. It is not a surtunary of lhe iuuc. Investors must read the rntire OEf icial Statemrnt to obW in information
cssrntial to rtuking an inCamcd'urvatmrnt deciaion.
MATURTfIES. Ab10lJNfS. IN'fEREST RATES. PRICES�AIVI) YIF.LD
Principal Inferesl Price or
at 't mou at icld
S _%TertnBondaiNaturing ,20�atYield_,,90
77�e Saiu 1997 Hadswill be oftaed when, ai rnd ifissued and delivaed io Ifie Vndetariter, wbjttt to approvol of Hryanf, �lilla and Olive, P.A, Tallahassec, Florida,
Bmd Ca+nei to the City, and cchiain o�her conditirnu. Cetfain legal rtuttrn trill be puscd on for Ihe City by its City Attomey, f+amela K, Akin, �squis and iv disclosure aamtel,
Nabort, Giblin 8 Nickcnon, I'.A.. Tampa, florida. ]t ia expcckd tlut thc 5eria 1997 Bondy in defmitive fortn will bc avaiiable fm delivery in t�ew �mk, hew Yrnk� on or abart
(7ctabcr .1996.
�Datcd: OCtobcr ,1997
•Preliminary, subjc�t ta change.
��
CITY OF CLEAIi�'VA'PEia, FLORIDA
1i2 South Osccola Avenue
Clearwater, Florida 34616
CITY COMIVIISSION
Rita Garvey, Mayor-Commissioner
John B. Johnson, Jr. Commissioner
Ed Hooper, Commissioner
Robert Clark, Commissioner
Karen Seel, Commissioner
CITY O�"FICIALS
Michael J. Roberto, City Manager
IVlargaret Simmons, CPA, Finance Director/City Treasurer
Cynthia E. Goudeau, City Clerk
Charles S. V�larrington, Jr., Managing Director &
. Executive Officer, Clearwater Gas System
CI�Y ATTORIeTE�'
Pamela K. Akin, Esquire
BONID COUNSEI,
Bryant, Miller and Olive, P.A.
Tallahassee, Florida
DISCLOSURE COUNSEL TO THE CITY
Nabors, Giblin & Nickerson, P.A.
Tampa, Florida
FINANCIAL ADVISOR
First Union Capital Markets Corp.
St. Petersburg, Florida
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No dealer, broker, salesperson or other person has been authorized by the City 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 1997 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the Series 1997 Bonds by any person to make such
offer, solicitation or sale. The infonnation set fortti herein has been obtained from the City, [Insurer],
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 [Insurer]. The information and expressions of opinion stated
herein are subject to change without noiice, 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, TI� UNDERWRITER MAY OVERALLOT
OR EFFECT 1RAlVSACTIONS T�AT S'�ABILIZE OR MAINTAIN THE MARKET PRICE OF
THE SERIES 1997 BONDS AT LEVELS ABOUE THAT WE-IICH MIGHT OTHERWISE
PREVAII, IN THE OPEN MARKET. SUCH STABILIZING, IF COIvIlV1ENCED, MAY BE
DISCONT�D AT ANY TIIvIE.
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 1997 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 1997 BONDS HAS
BEEN FILE]D t7ViITH THE SECURITbES AND EXCHANGE CONIlVIISSION (THE
"COM1�iIISSION") OR WITH ANY STATE SECURITIES COMMISSION. THE SERIES 1997
BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY TI-�E COMIVIISSION OR ANY
STATE SECURITIES CONIlVIISSION, NOR HAS THE COI�IlVIISSION OR ANY STATE
SECURITIES COM��II5SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
OFFICIAL STATEI�IENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A
CRIlVIINAL OFFENSE.
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TABLE OF CONTENTS
Page
INTRODUCTION .... .....................................................1
PURPOSES OF SERIES 1997 BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SERIES 1997 PROJECT ......................................................2
ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
DESCRIl'TION OF THE SERIES 1997 BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General................................................................4
Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Redemption Provisions ....................................................6
Noticeof Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
' SOURCE OF PAYMENT ANT:) SECURITY FOR THE SERIES 1997 BONDS ........... 9
General................................................................9
Debt Service Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FLOWOF FUNDS .........................................................10
Establishment of Funds and Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
' Priority of Flow of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
COVENANTS.......................................................:....12
Rate Co�enant ..........................................................12
Additional Parity Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Operation and 1Vlaintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Operating�udget .......................................................14
.� AnnualAudit ...........................................................14
` No Mortgage or Sale of the System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
I�o Free Service ................:............ ...........................15
Enforcement of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
No Competing System ....................................................16
Unlawful Connection Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Amendment of the Ordinance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
THESYSTEM ............................................................17
Pl�ysical Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Management...... ........ ..........................................17
GasSupply..................................................... ..,..18
Rates,Feesand Charges .......................a..,...........,...........19
ServiceArea ...........................................................20
Clearwater Gas Strategic Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
FutureProjects .........................................................23
Pasco County Territorial Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Environmental Remediatian Costs; Environmental Imposition Rate Adjustment ......... 23
IVitJI�TICIPAT� BOND INSY:TItANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
RightsGranfedInsurer ....................................................27
TF� CITY AND PINELLAS COUNTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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: �
Page
COMBINED DEBT SERVICE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
HISTORICAL COVERAGE OF 1�ZA3�IMUM ANNUAI- DEBT SERVICE
BY TI-� SYSTEM NET REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
RATINGS................................................................29
LEGALTTY ...............................................................29
TAX EXEMPTION ........................................................30
UNDERWILI�'ING .........................................................31
1NVESTN�ENT POLICY OF THE CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
VALIDATION............................................................32
�NFORCEABII.ITY OF REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
LITIGATION.............................................................32
GENERAL PURPOSE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
FINANCIAL ADVISOR .....................................................33
ADVISORS AND CONSULTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
CONTINiJING DISCL�SU�tE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
MISCELLANEOiJS........................................................34
AUTHORIZATION OF AND CERTIFICATION
CONCEFtNING OFFICIAL STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
APPENDIX A— GENERAL 1NFORMATION RELATING TO THE CITY OF
CLEARWATER, FLORIDA
.�P�E1�dDIX B— EXCERPTS FROM TI� CITY (3F CLEARWATER, FLORIDA GENERAY,
PiJRT'OSE FINANCIAL STATEMENTS AND OTHER INFORMATION
FOR THE FISCAL YEAR ENDED SEPTENiBER 30, 1996.
APPENDIX C— SUIVIlVIARY OF CERTAIN PROVISIONS OF THE ORDINANCE
APPEi�D� D— FORM OF CONTINUING DISCLOSURE CERTIFICATE
t�PPE1�70►gX E— FQRM OF BOND COUNSEL OPINION
AI'PENIiIX F— SPECIlI�EN BOND INSURANCE POLICY
AF�'�NDIX G— SCHEDULES OF RATES
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OFFICIAL STATEMENT
[Series 1997A Bond Amount] [Series 1997B Bond Amount]
Gas System Revenue �onds Gas System Revenue Refunding Bonds
Series 1997A Series 1997B
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 [Series 1997A Bond Amount] Gas System Revenue Bonds, Series 1997A (the
"Series 1997A Bonds") and [Series 1997B Bond Amount] Gas System Revenue Refunding Bonds,
Series 1997B (the "Series 1997B Bonds")(collectively, the "Series 1997 Bonds").
The Series 1997 Bonds are being issued under the authority of and in full compliance with the
Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, as
amended and supplemented, the City Charter, as amended and supplemented, and other applicable
provisions oflaw. The Series 1997 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
(the "Original Ordinance"}, which authorized the issuance of Gas System Revenue Bonds, Series
1991 (the "Series 1991 Bonds"), as amended and supplemenied and as further supplemented by
Ordinance No. 5665-94 adopted on September 1, 1994, Ordinance No. 6030-96 adopted on June 6,
1996 and Ordinance No. 6188-97 adopted on September 1�, 1997, as further supplemented by a
resolution adopted on September 18, 1997 (as so supplemented, the "Authorizin� Ordinance") (the
Original Ordinance and the Authorizing Ordinance are collectively refened to as the "Ordinance").
The Series 1997 Bonds are special, limited obligations of the City p_a,yMble solely from the Net
Revenues derived from the operation of the System, as provided in the Ordinance on a parity with
the Series 1991 Bonds, of which [ ] will remain outstanding after the refunding from the
praceeds of the Series 1997B Bonds and with the Gas System Revenue Bonds, Series 1996 (the
"Series 1996 Bonds"), which are currently Outstanding in the aggregate principal amount of
$8,750,000 (such unrefunded Series 1991 Bonds and the Series 1996 Bonds hereinafter being
referred to as the "Parity Bonds"), all as further described under the heading "Additianal 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 1997 Bonds, the Ordinance, and certain statutory provisions as
well as the information from various reports and statements contained in this Ofiicial Statement are
not comprehensive or definitive. All references to such documents, reports and statements are
qualifi�d by the sctual content of such documents, reports and statements, copies of which may be
obtained by cantacting the Finance Director, City of Clearwater, Florida, 100 South Myrtle Avende,
Clearwater; Florida 34fi16.
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PURPOSES OF SERIES 1997 BONDS
The Series 1997 Bonds are being issued by the City to (i) in the case of the 1997A Bonds,
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 and Pasco Counties (the "1997
Project"); (ii) in the case of the Series 1997B Bonds, advance refund a portion of the Series 1991
�onds and all of the Outstanding Gas System Revenue Bonds, Series 1994A (the "Series 1994A
Bonds); (iii) fund the Reserve Requirement for the Series 1997 Bonds; and (iv) pay the costs of
issuance ofthe Series 1997 Bonds.
SERIES 1997 PROJECT
A portion of the proceeds from the sale oftheSeries 1997A Bonds will be utilized by the City
for the additions, extensions, supplements or replacements of the existing gas system (the "System")
within Pinellas and Pasco Counties (the "1997 Project"). The estimated cost of the 1997 Project is
$7,710,000 which will be funded from Series 1997A Bond proceeds.
The following chart shows the current components for the 1997 Project to be funded by the
Series 1997A Bond proceeds, and the estimated costs of the components.
Series 1997 Prgjgct Amount
� Pinellas County Gas Main & Service Extensions & LP . . . . . . . . . . . . . . . . . . . . . . $1,300,000.00
�inellas Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370,OOO.QO
Pinellas Relocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790,000.00
Pinellas Land, Building & Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000.00
`: Pasco Counry Gas Main & Service Extensions and LP . . . . . . . . . . . . . . . . . . . . . . . 3,730,000.00
Pasco Landi, Building and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520,000.00
Total net Ca}�ital Reyuirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7 710.000.00
For a further discussion of the System and the 1997 Project, see, "THE SYSTEM" herein.
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ESTIMATED SOURCES AND USES OF FU1�iDS
The proceeds to be received from the sale of the Series 1997 Bonds are expected to be
applied as follows:
Sourees of Funds
Principal Amount of Series 1997 Bonds
Total Sources ofFunds(1)
iTses of Funds
Depo§it to Escrow Account to Advance Refund Prior Bonds
Degosit to the Series 1497 Construction Fund
Deposit to Interest Account {1)
Underwriter's Discount
Costs of Issuance (2)
Total Uses of Funds
(1) Does not include accrued interest from October 1, 1997.
(2) Includes the premium for the Municipal Bond Insurance Policy and Reserve Fund Surety
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D�SC�2IPTION OF THE SE�IES 1997 BONDS
General
The Series 1997 Bonds will be issued in fully registered book-entry only form in authorized
denominations of $5,000 and integral multiples thereof and will be dated, will bear interest (payable
semi-annually on March 1 a��d September 1 of each year commencing March 1, 1998) at the rates per
annum and will mature on the dates and in the amounts, all as set forth on the cover page of this
Official Statement. SunTrust Bank, Central Florida, National Association, Orlando, Florida, will act
as Paying Agent and Registrar with respect to the Series 1997 Bonds.
Book-Entry Only System
THE INFOR1i�IATION IN THIS SEC�'ION CONCEIdNING DTC AND DTC'S BOOK-
ENTRY SYSTEM HASBEEN OBTAINED FROM SOURCES THAT THE C1TY BELIE�ES
�'O BE R]EI,TABL�, �iJT THIE CITY Tr�I�ES NO RESPONSIBILITY FOR T�E
ACCiJ1�ACI' THEI2EOF.
The Depository Trust Company ("DTC"), New York, New York, will act as securities
depository for the Series 1997 Bonds. The Series 1997 Bonds will be issued as fully-registered bonds
registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered bond for
each maturity of each Series will be issued for the Series 1997 Bonds, in the aggregate principal
,.�,,� amount of each such issue, and will be deposited with DTC.
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DTC is a limited-purpose trust company organized under the New York Banking Law, a
"banldng organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a"clearing agency" registered pursuant to the provisions of Section 17A of the Securities
�xchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with
i�TC. DTC also facilitates the settlement among Participants of securities transactions, such as
4ransfers and pledges, in deposited securities through electronic computerized book-entry changes
in Participants' accounts, thereby eliminating the need for physical movement of securities certificates.
Direct Farticipants (the "Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. Access to the DTC system is also available
to others such as securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly (the °Indirect
Partieipants"). The rules applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
Purchases of the Series 1997 Bonds under the DTC system must be made by or thrav�h
Direct Participants, which will receive a credit for the 5enes �997 Sonds on DTC's records. The
ownership interest df each actual purchaser of each Series 1997 Bond (the "Beneficial Owner"j is in
� turn to be recorded dn the Direct and Indirect Pzrticipants' records. Beneficial Owners will n�t
receive written car►firmation frorn DTC of their purchase, but Ben�ficial Owners are expected tt�
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receive written confirmations providing details of the transaction, as well as periodic statements of
� their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered
� into the transaction. Transfers of ownership interests in the Series 1997 Bonds are to be
j: accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interests in the Series
1997 Bonds, except in the event that use of the book-entry system for the Series 1997 Bonds is
discontinued.
To faciiitate subsequent transfers, all Series 1997 Bonds deposited by Participants with DTC
are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 1997
Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial
ownerslvp. DTC has no lrnowledge ofthe actual Beneficial Owners of the Series 1997 Bonds; DTC's
records reIIect only the identity of the Direct Participants to whose accounts such Series 1997 Bonds
are credited, which may or may not be_the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
For every transfer and exchange of the Series 1997 Bonds, the Beneficial Owner may be
charged a sum sufiicient to cover any tax, fee or other governmental charge that may be imposed in
relation thereto.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
,a-.� Owners will be governed by anangements among them, subject to any slatutory or regulatory
requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co.
If less than all of the Series 1997 Bonds within an issue are being redeemed, DTC's practice is ta
determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Series 1997 Bonds. Under its
usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date.
The Omnibus Proxy assigns Cede �c Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Series 1997 Bonds are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Principal and interest payments on the Series 1997 Bonds will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on each payment date in accordance with their
respective holdings shawn an DTC's records unless DTC has reason 4o believe that it will not receive
payment on such payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the responsibility of such
Participant and not of DTC, the Paying Agent or the City, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and interest to DTC is the
responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants
shall be the responsibility ofDTC and disbursement of such payments to the Bene6cial Owners shall
be the responsibility of Direct and Indirect Participants.
The City cannot and c�oes not give any assurances that DTC, Participant$ r�r others will.
disEribute payments of pnncipal ofor interest on, or any premium on the Series 1997 Bdnds paid to
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DTC or its nominee, as the registered owner, or any redemption (if applicable) or other notices, to
"� the Beneficial Owner or that they will do so on a timely basis or will service and act in a manner
described in this Official Statement. Neither the City, the Bond Registrar nor the Paying Agent is
responsible or liable for the failure of DTC, Participants or others to make any payment or give any
notice to a Beneficial Owner in respecf of the Series 1997 Bonds or any enor or delay relating
thereto.
When reference is made to any action v�hich is required or permitted to be taken by the
Beneficial Owners, such reference shall only relate to those permitted to act (by statute, regulation
or otherwise) on behalf of such Beneficial Owners for such purposes. When notices are given, they
shall6e sent by the City, the Bond Registrar or the Paying Agent, as applicable, only to DTC.
DTC may discontinue providing its services as securities depository with respect to the Series
1997 Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such
circumsYances, in the svent that a successor securities depository is not obtained, the Series 1997
Bonds are required to be printed and delivered. The City may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities depository). In that event, the Series
1997 �onds will be printed and delivered.
In the event of an insolvency of DTC, if DTC has insufficient securities in its custody (e.g.,
due to theft or loss) to satisfy the claims of its Participants with respect to deposited securities and
is unable by application of (i) cash deposits and securities pledged to DTC to protect DTC against
,� losses and liabilities; (ri) the proceeds of insurance maintained by DTC and/or its Participants; or {iii)
other resources, to obtain securities necessary to eliminate the insufficiency, no assurance can be
given that Participants will be able to obtain all of their deposited securities.
Redemption Provisions
Optional Redemption. The Series 1997 Bonds maturing prior to or on 5eptember 1, are
not subject to redemption prior to their maturity date. The Series 1997 Bonds maturing after
September 1, are subject to redemption at the option of the City prior to maturity on or after
September 1, , in whole at any time, or in part frorn time to time on any interest payment date, in
such manner as shall be determined by the City at the redemption prices expressed as percentages of
the principal amount of such Series 1997 Bonds to be redeemed, as set forth below, together with
accrued interest to the date fixed for redemption:
Redemption Periods (Both Dates Inclusivg� Redemption Price
Mandatory Sinking Fund Redemption oi' the Series 1997 Term Bonds Maturin�
September 1, . The Senes 1997' Bonds maturi�g on September 1, are subject to mandatnry
k;� sinking fi�nd redemption by fands deposited in the Bc�nd Atnortization Account in t�ie 5inking �`und
`'�'� prior to rr►aiuri�` in part, by lot �t a redentptit�n pri�e equ�l to their prin�ip�l amr�unC and the �ccntecl
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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 1997 Bonds being redeemed plus accrued
interest thereon to the date fixed for redemption, without premium:
Principal
Year Amount
* Final Maturity
Money held for the credit of the Bond Amortization Account is required to be applied to the
retirement of tecm obligations as follows:
(1) Subject to the provisions of paragraph (3) below, the City may purchase Term Bonds
then outstandi�ag at the most advantageous price obtainable with reasonable diligence, such price not
,,,� to exceed the principal of such Term �onds plus the accrued interest to the date of delivery thereof.
,,,�,� The Gity 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 exl2aust 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 ths
respective amaunts 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 or8er:
(a) The Term Bonds of each series ofBonds, to the extent ofthe Amortization
Tnstaliment, i£ any, for such �iscal Year for the Term Bonds of each such series th�n
� outstanding, plus the applicable premiurn, ifany, and, ifthe amopnt available in such Fiscal
Year shall not be suf�cient th�refory then in prc►portian to the Amortiz�tion Installment, if
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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
nct then subject ta 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 deternunes, but only, in the case oithe 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.
'�he City is required to pay from the Sinking Fund all expenses in connection with any such
purchase or redemption.
Notice of Redemption
As long as the book-entry-only system is used for determining beneficial ownership of the
Series 1997 Bonds, notice of redemption will only be sent to Cede & Co. Cede & Co. will be
� responsible for notiiying the DTG Participants, who will in t�.�rn be responsible for notifying the
Beneficial Owners. Any failure of Cede & Co. to notify any DTC Participant, or of any DTC
Participant to notify the Beneficial Owner of any such notice, will not affect the validity of the
redemption ofthe Series 1997 Bonds. See "DESCRII'TION OF THE SERIES 1997 BOND -Book-
Entry-Only System" for a description of DTC Participants and Beneficial Owners.
In the event of the discontinuance of the book-entry only system, notice of redemption will
be given by the Registrar (who shall be the Paying Agent for the Series 1997 Bonds, or such other
person, firm or corporation as may from time to time be designated by the City as Registrar for the
Series 1997 Bonds) by mailing a copy of the redemption notice by first-class mait (postage prepaid)
not more than thirty (30) days and not less than fifteen (15) days prior to the date fixed for
redemption to the Registered Owner of each Series 1997 Bond to be redeemed in whole or in part
at the address shown on the registration books. Failure to give such notice by mailing to any
Registered Owner ofBonds, or any defect therein, shall not affect the validity of any proceeding for
the redemption of other Bonds. All Series 1997 Bonds or portions thereof so called for redemption
will cease to bear interest after the specified redemption date provided funds for their redemp�.tion are
on deposit at the place of payment at that time.
Upon surrender of any Series 1997 Bond for redemption in part on1y, the City shalt issue and
deliver ta the Registered Owner thereof, the costs of which sha11 be paid by the Registered Ownet`,
a new 5eries 1997 Bond or Series 1997 Bonds of authnrized denomir�aEions in �ggregate principal
am�unt equal to the unredeemed pnrtion surrendered.
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SOURCE OlF P�►i�1MENT AND 3ECURITY
FOR'I'HE SERIES 1997 BONDS
General
The principal of, redemption premium, if any, and interest on the Series 1997 Bonds are
payable from the Net Revenues equally and ratably with each other and the Parity Bonds. 'The Series
1997 Bonds and the Parity Bonds are secured by a first and prior lien on the Net Revenues derived
from the operation of the System deposited in the Sinking Fund created and established under the
Ordinance and from monies and investments deposited in certain funds and accounts established by
the Ordinance and earnings thereon.
�hs Series 1997 �onds shall not constitu#e an indebtedness, liabitity, geaxeral or moral
obligation, or a pledge oi ihe faith, credit or tazing power of the City, the State, or any po9etical
suba�iv6sion thea�eof, within the meaning of any eonslitationa9, s4atutory or charter provisions.
1�1eilhcr the State of Fiorida, nor any political subdivision thereof, nor the City shalfl be
oblzgateal (1) to levy ad vaEorena taAes on any property to pay the principal of the Series 1997
Bonds, the ieeterest thereon, or other costs inciciental thereto or (2) to pay the same fxom any
o#her fue�ds of the City except froan the Net Iievenues, in the manner provided in the
Ordinance.
The Series 1997 Bonds shall nat constitute a lien upon the System, or any part thereof, or on
any other property of the City, but shall constitute a first and prior lien only on the Net Revenues in
the manner provided in the Ordinance.
"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
curren4 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 cunent 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 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 Pund and the Rebate Fund.
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Debt Service Reserve Acconnt
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FI.OW OF Fi1NDS
EstAlbli�hinent of Funds anci Accounts
The following Punds and Accounts have been established pursuant to the Ordinance:
Revenue Fund
Operation and Maintenance Fund
Constniction Furid
Sinking Fund
Interest Account
Principal Account
Reserve Account
Bond Amortization Account
Renewal and Replacement Fund
A separate subaccount is required to be maintained in the Reserve Account for the Series
1997 Bonds.
Frfioraty o$' Fiow of Fund�
: 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;
1. Revenues must first be used to deposit in the Operation and Maintenance Fund, such
r'' 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 sufiicie�t to pay one-sixth (1/6) of all interest becoming due on the Series 1997 Aonds and the
Parity P�r�nds 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 Amorfization I�stallment is due, such sums as wi11 be sufficient to pay one-
� twelfth (1/12) of the Amortization Insfallment required to be made in such year. Such payment will
be credited to a separate special acc�unt far each senes of Term Bonds outstanding, and if there is
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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 pay�.ent 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 �he 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 1997 �onds 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 Ciry 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 any Series of Bonds as may be approved by subsequent resolution of tl�e City, provided
that the provider of such credit enhancement is then rated in one of the two highest rating categories
(without regard to gradation) by Fitch and Moody's Investors Service, Inc.
Any withdrawals from any subaccount in the Reserve Account aze required to be subsequently
restored from the first moneys available in the Revenue Fund on a pro rata basis as to all subaccounts
in the Reserve A�ccount 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 far the purpose of the payment of maturing principal of or
interest or making Amortization Installments on the Bonds for which such subaccount vvas 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.
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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
$300,000, no additional deposits in such Fund are required. The moneys in the Renewal and
Iteplacement Fund may be used only for the purpose of paying the cost of extensions, enlargements
or additions to, or the replacement of capital assets of the System and emergency repairs thereto.
Such moneys on deposit in sueh Fund are also required to be used to supplement the Reserve
Account if necessary, in order to prevent a default in the payment of the principal or Amortization
Instaliments of and interest on the Bonds.
7. The balance of any moneys remaining in the Revenue Fund a$er the above required
payments have been made may be used by the City for any lawful purpose.
8. The Operation and Maintenance Fund, the Sinking Fund, the Renewal and
Replacement Fund, the Revenue Fund, and all accounts therein and any other special fur.ds
established and created under the Ordinance constitute trust funds for the purposes provided in the
Ordinance for such funds. All such funds shall be continuously secured in the same manner as City
deposits are authorized to be secured by the laws of the State of Florida.
COVENAN'I'S
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 ofthe 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 Parsity Obligations •
Additional Parity Obligations, payable on a parity from Net Revenues of the System with the
Series 1997 Bonds and the Parity Bonds, may be issued after the issuance of the Series 1997 Bonds,
fcar construction and acquisition of additions, extensions and improvements to the System or for
refunding purposes and upon the following conditions:
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1. The Net Revenues derived or which would have been derived, if adjusted as set forth
x� below, from t1�e System, either during the immediately preceding Fiscal Year, during any twelve (12)
consecutive calendar months ofthe eighieen (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, shalt 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 1997 Bonds then Outstanding, (b) any Additional Parity Obligations
issued and then Outstanding (including the Parity Bonds), and (c) the A.dditional Parity Obligations
then proposed to be issued.
In determining the amount ofNet Revenues for the purposes ofparagraph (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 t,he 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
esrimate would not have been received by the City during such 12 month period refened 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 perfornung 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, shail have been made to the full extent required.
The City currently has outstanding its Gas 5ystem Revenue Bonds, Series 1991 of which
[$1,359,390.00] will ramain outstanding after giving effect to the refunding from the proceeds of the
5eries 1997B Bonds and its Gas System Revenue Bonds, Series 1996A which are current(y
Outstanding in the aggregate principal amount of $8,750,000. The Strategic Plan for the 5ystem
,� projects that Additional Parity Obligations of up to [Future 5ystem Bonds] may be issued through
2002.
13
9�-��
�4.
Operation and Maintenance ��
The City covenants it will maintain the System and all parts thereof in good condition and will
operate the same in an efficient and economical manner making such expenditures for equipment and
for renewals, repairs and replacements as may be proper for the economical operation and
maintenance thereof.
Operating Budget
� �a n
F:�Y
The City covenants to annually prepare and adopt prior to xhe 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 t1tadit
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 Salc 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 dete�rr�ines,
in the manner provided in the Ordinance, to be no lon�er 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 City 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.
Ifthe amount to be received from such sale, lease c�r other disposition of said property is in
excess of $50,000 but not in excess of $100,000 such Cit�� Manager or other officer is required to
first make a finding in writing determining that such properity comprising a part of the System is na
longer necessary, useful or profitable in the operation ther�of, and the governing body of the City
must, by resolution or ordinance duly adopted, approve an�i concur in the finding of such City
Manager or other officer, and authorize such sale, lease or other disposition of said property.
Tf the amount ta be received from such saIe, lease or other disposition of said property is in
excess of �1(30,(l00 but not in excess of 14% of the value of fixed assets of the 5ystem accorc3ing to
the mbst recent annual audit report, such City Manager or other officer must first make a finding in
� writing determining that such property compnsing 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
14
9� �
the best interest of the System that such property be disposed of, and the governing body of the City ;;�iys�
°'",1 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 outstar�ding Bonds, in such proportions to be determined by the governing body of the
City upon the recommendations of the City Manager. The payment of such proceeds into the
Renewal and Replacement Fund does not reduce the amounts required to be paid into such Fund by
other provisions of the Ordinance.
Anything in this section to the contrary notwithstanding, nothing prohibits the City from
transferring ownership of the System to another governmental entity in accordance with the
Ordinance without complying with the provisions described in this section.
No Free Service
� The City has covenanted in the �riginal Ordinance that it will not render or cause to be
rendered any free services of any nature by the System, nor will any preferential rates be established
for users of the same class. Whenever the City, including its departments, agencies and
instiumentalities, avails itself of the product, facilities or services provided by the System, or any part
thereof, the same rates, fees or charges applicable to other customers receiving like services under
similar circumstances must be charged to the City and any such department, agency or instrumen-
tality. Such charges must be paid as they accrue, and the City shall transfer from its general funds
to the Revenue Fund suf�cient sums to pay such charges. The revenues so received will be deemed
to be Revenues derived from the operation of the 3ystem, and will be deposited and accounted for
in the same manner as other Revenues derived from such operation of the System.
Consistent with the foregoing, to the extent that certain marketing and sales programs may
involve incentives to customers (other than free energy service), expenses of such incentives are paid
by charges against appropriate marketing and sales expenses of the System.
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 pledged under the Ordinance; to take all steps, actions and
proceedings for the enforcement and collection of such rates, charges and fees as shall become
delinquent ta the full extent pernutted or authorized by laW; and to maintain accurate records with
,,' respect thereof. Alt 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.
I5
����
The City will, under reasonable n.iles and regulations, to the full extent permitted by law, shut
�4� offthe connection of any users of the System for non-payment of fees, rentals and ofher charges for
� the services ofthe System and will not furnish him or permit him to receive from the System further
secvice 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 ganting of, any franchise or pernut to any person, firm, corporation or body,
or agency or instrumentality whatsoever, for the fumishing 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.
�Jnlaevful Connection Prohibited
The City 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 w�ritten 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, in.cluding 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.
Amendn��n6 0€ gl�e Ord'enance
In the Ordinance, the City has reserved the right to amend or supplement the Ordinance for
certain purposes without the consent of Bondholdees if the amendment or supplement does not
adversely affect the rights of Bondholders. Otherwise, no material modification or amendment of the
Ordinance maybe made without the cansent in writing of the Holders of fifty-one percent or more
of the principal amount of the Bonds of each Series so affected and then outstanding. For purposes
of the foregoing, to the extent that Bonds of any Series are secured by a Credit Facility an@ such
Bonds are then rated in one of the two highest rating categories (without regard to gradation) by
either Fitch or Moody's Investors Service, Inc., or successors and assigns, then the consent of the
Credit Facility issuer will be deemed to constitute the consent of the Bondholders of such Series and
in such case no consent of the Bondholders of such Series is required. I`TOtwi4hstanding the
foregoing, no modification or amendment of the Ordinance may permit a change in the maturity of
such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation
thereof or affecting the promise of the City to pay the principal of and interest on the Bonds as the
same become due from the Net Revenues of the System or reduce the percentage of the Bondholders
required to consent to any matesial modification or amendment of the Ordinance without the consent
of the Bondholders of all such obligations.
16
9�-s�
THE SYSTEM
Physical Description
The Clearwater Gas System (the "Syst�m") began operations in the mid-1920's with the
production, distribution and sale of m�anufactured gas. The System was converted to natural gas in
1959 when Florida Gas Transmission (FGT) extended pipelines into Florida. The System atso
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, Belleair Shores, Dunedin,
Indian Rocks Beach, Largo, New Port �i.ichey, Oldsmar, Port Richey, Safety Harbor, and Tarpon
Springs. The System also services the unincorporated area between these cities. The franchise
agreements expire respectively in 2020, 2003, 2002, 2027, 2020, 2018, 2000, 2025, 2014, 2025,
2001 and 2014, which in some instances is prior to the maturity of the Series 1997 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 13,251 customers and has 571.6 miles of gas main as of July, 1997.
According to a survey conducted by Pineline & Gas Journai dated September, 1996, the System
ranked as the fourth largest of 28 municipally owned natural gas system in Florida and the 42nd
largest municipally-owned natural gas system in the United States of 961 total.
l0�iansgement
The City has a Commission-1Vlanager 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 �ias System Managing Director �i
Executive Of�icer who reports directly to the City Manager. The System is one of seven utilities
(Water, Reclaimed Water, Sewer, Gas, Solid Waste, Recycling, and 3tormwater) billed on a
consolidated basis by the Clearwater Utility Customer Service.
Charles S. Warringtoq Jr. currently serves as Managing Director & Executive Ofiicer of the
Clearwater Gas System and reports directly to the City Manager. He received his Bachelor of
Electrical �ngineering degree from the Georgia lnstitute of Technology in 1971 and is a 1982
a� graduate ofthe University ofMichigan Public Utility Executive Program. He has been a registered
Professional Engineer in the State of Florida since 1976.
17
9� �
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 25 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 of the Municipal Gas Authority of Florida, serves on
the board of directors and as Vice President and Past President of the Florida Municipal Natural Gas
Association, and serves on the Board of Directors and as Past President of the Florida Engineering
Society - Pinellas Chapter.
�
Terry Neenan has served as Assistant Director of CGS/Gas Supply and Operations since
February, 1994. Prior to that he served as Gas Superintendent from 1986 until 1994, Assistant
Superintendent from 1982 to 1986, Service Supervisor from 1979 to 1982 and Utilities Serviceman
from 1968 to 1979 all with the Clearwater Gas System. He holds a Master Gas Contractor License
with 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 the propane qualifier
for the Clearwater Gas System in Pinellas County and serves as the natural gas qualifier in Pinellas
County. 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. He has also served as Secretary, Vice Chairman
and twice elected as Chaimian ofthe Municipal Gas Authority ofFlorida, a joint gas buying agency.
James M. Lewin, Sr. has served as Assistant Director of CGS/Gas Marketing & Planning
since April 1994. Prior to that, he served as Assistant Superintendent from 1986 to 1994, Gas
Supervisor from 1977 to 1986, and as a Distribution Serviceman from 1974 to 1977, all with the
Clearwater Gas System. Mr. Lewin also holds a Natural Gas Specialty Contractor License with the
Pinellas County Construction Licensing Board, a 601 LP License from the Department of
Agriculture, and holds other licenses and certificates related to natural gas. He is three (3) credit
hours from completing an Associate of Arts Degree in Business Administration from the St.
Petersburg Junior College.
Robert Bublitz has served as Controller for the Clearwater Gas System since October 1994.
Mr. Bublitz served as the Finance Director and Director of Administrative Services with the City of
Tarpon Springs, Florida, for 15 years prior to joining the Clearwater Gas System as Controller. In
total, Mr. Bublitz has 28 years of Municipal experience, He received his Bachelor of Business
Administration degree in 1965 from Spencerian Business College in Milwaukee, Wisconsin,
Gas Supply
The City purchases its supply of natural gas from four gas suppliers through our gas
�� management company, C.C. Pace. The four suppliers are: Coastal Gas marketing; Western
18
%�-�
Resources; Aquiia Gas marketing; and Texaco natural Gas Company, The present supply is based
�''"� on service agreements between the City, the Municipal Gas Authority of Florida (MGAF), C.C. Pace
(Engage Energy), and the Florida Gas Transmission Company (FGT). On August 1, 1990, the
Federal En�rgy 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 inte.��st in approximately 37,000 miles of
transportation pipelines from Texas to the Canadian bordei°�nd 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 ofLouisiana.
MGAF is an inter-locat muf'�tpai organization which purchases natural gas supplies for 14
municipaily owned local distribution companies and gas districts served by FGT. Clearwater Gas
System was a leader in fomvng MGAF. The City of Clearwater joined MGAF by Resolution 92-75
which was adopted by the City Commission on December 3, 1992. MGAF began purchasing gas
supplies for Clearwater Gas System through a three year gas management and supply acquisition
cor,tract with Citrus Industrial Sales Company (CISC) in November, 1993. CISC's contract expired
as of October 30, 1996. MGAF therefore decided to split up the gas management and gas supply
contracts through the use of RFP's. During the summer of 1996 MGAF issued an RFP for a gas
,,-,,� management contract which was awarded to C.C. Pace of Fairfax, Virginia. The gas supply contracts
� were awarded to Coastal Gas Marketing, Western Resources, Aquila Gas Marketing and Texaco
Natural Gas Company. These agreements provide Clearwater with a maximum daily quantity of
approximately 10,219 Dekatherms (Dth) of natural gas during the months of November to April;
4,652 Dth's during the months of Ma.y to September; and 7,496 Dth's for the month of October. The
total annual entitlement is 2,803,990 Dth's of natural gas transportation excluding Phase III.
FGT has constructed an additional gas pipeline along the west coast of Florida called Phase
III, which increased the supplies of gas available to the System. The System has transportation
contract agreem:�ts with FGT for an additional 1,871 Dth's to be delivered during the summer and
1,348 Dth's to be delivered in the winter. Phase III increased the System's early transportation
entidements by 572,174 Dth's. This has established a new annual entitlement of 3,376,164 Dth's to
be cielivered by FGT pipelines, which will provide adequate capacity through at least the year 1999.
It is an6cipated that additional entitlements can be acquired from either the proposed Phase IV or use
the additional excess capacity in the MGAF Group to satisfy the System's customers' needs into the
twenty-first century.
Rates, Fees and Charges
The City Commission has established a schedule of rates and charges by ordinance, which
includes a purchased gas cost adjustment provision allowing the City to pass-through to customers
any increase or decrease in the purchased price of gas. The City is not subject to re�ulation by any
w� State agency in establishing or revising its rates. Where competitive fuel sources or transportation
service are available to the customer, the City Commission has authoriz�ed the City Manager to enter
19
%� �
�
into contract gas service rates at special rates and/or conditions as required to obtain/retain the
�� customer load. Such contract service must meet the normal construction feasibility formula to insure
profitable payback to the City. As of July, 1997, contract rates applied to 196 customer accounts and
impacted less than 12.5% of total revenues.
The current rates charged by the System are a part of the Phase I Gas Rate Case imptemented
October 1, 1995, which was based on a comprehensive cost of service study performed by the Utility
Advisory Services Group of the international accounting firm of Coopers & Lybrand, LLP (the "Rate
Study"). This Phase I implementation resutted in an extensive overhaul of the Gas System customer
rates, providing numerous classes of service and a modernized billing methodology.
The new rates were designed to be industry-based and responsive to the competitive energy
challenges. The goal of the Rate Study was to establish rates which would be fair to all classes of
customers, provide funding to implement planned expansion in both existing northern Pinellas County
service area and into the newly acquired southwestern Pasco service area, and provide an adequate
growth potential in return to the City of Clearwater to further offset the ad valorem tax rates (cunent
impact is about 0.5 mills).
As the result of experience during the first seven months of the Phase I implementation
adjustments in the Phase II rates were implemented on October 1, 1996. The Phase III rates are
effective October 1, 1997. The total projected impact of both new phases of the rate case is $1.05
million or less than 7.9% of total gas sales revenues.
J� The first reading of the rate ordinance containing the proposed Phase II and Phase III rates
changes was conducted by the City Commission on May 16, 1996 and the second reading and final
approval occurred on June 6, 1996. The rate adjustments approved by the City Commission became
e$'ective as to the Phase II adjustments on October 1, 1996 and will become effective, as to the Phase
III rates, on October 1, 1997.
Set forth in Appendix G hereto is a table containing current rates of the System.
Service Area
As ofJuly, 1997, the System served over 13,251 customers (comprised of 12,705 natural gas
customers and 546 L.P. gas customers) in 14 municipalities as well as the unincorporated areas of
northern Pinellas County and southwestem Pasco County as follows: Municipalities served, Belleair,
Belleair Beach, Belleair Bluffs, Belleair Shore, Clearwater, Dunedin, Indian Rocks Beach, Indian
Shores, Largo, New Port Richey, Oldsmar, Port Richey, Safety Harbor and Tarpon Springs. In
unincorporated Pinellas County, the System serves, Crystal Beach, East Lake, Harbor Bluffs, Harbor
Hills, Highpoint, Ozona, Palm Harbor and Top of the World. The System serves the unincorporated
Pasco County areas of Anclote, Elfers, Gulf Harbors, Harbor Isles, Holiday, Moon Lake, Odessa,
Serenova and Triiiity.
The northern Pinellas County service temtory is approximately 135 square miles and extends
;�, from Ulmerton and Walsingham Roads on the south to the Pasco County line on the north and from
�` the Gulf af Mexico on the west to the Hillsborough County line on the east. The System is in the
2U
�/'`� T
process Qf extending gas mains and services into a 117 square mile service territory in southwestern
E""�, Pasca County which will extend from the Gulf of Mexico on the west inland �pproximately ten miles
ta just wesi of State Road 41 and Land O'Lakes (generally along the right-of-way for the proposed
North Suncoast Farkway) and from the Pinellas and Hillsborough County lines on the south to
generally State Road 52 on the north. Within the current service boundaries, there is significant
opportunity for growth because the Systsm already has installed approximately 515 miles of gas main
in the current Pinellas County service area with a 7% customer saturation. There is also significant
opportuzuty to expand into the developing areas of southwestern Pasco County. In total the service
territory encompasses approximately 252 square miles with a service population of over 600,000
people. The service area is bordered on the south, east and north by Peoples Gas System, Inc., an
investor-owned gas utility.
�
As of September 30, 1996, #he System's active natural gas customers were located as shown
in the fallowing table:
Location
Belleair
�elleair Beach
Belleair Bluffs
Belleair Shores
�learwater
Dunedin
Indian Rocks Beach
Largo
New Port Richey
Oldsmar
1'ort Richey
Safety Harbor
Tatpon Springs
Unincorporated Areas Pasco
Unincorporated Areas Pinellas
Total
Meters
283
54
13
3
6,420
978
13
1,158
8
22
2
512
407
16
1 783
11,672
Percentaee
2.42%
0.46
0.11
0.03
55.00
8.38
0.11
9.92
0.07�
0.19
0.02
4.39
3.49
0.14
15.28
100.00%
The System provides service to firm (non-intetruptible) and interruptible olasses of customers.
The System derives less than two percent of its revenues from its largest firm custom.er.
The following table shows the five largest interruptible customers by peak monttily
consumption and the percent of the System's revenues derived from such customers during the J2
months ending September 30, 1996:
Z� 9���.�
�
Customer Name
National Linen Services, Inc.
Morton F. Plant Hospital
Metal Industries, Inc.
Mease Hospital
ClearwaterLinen & Uniform
Supply, Inc.
Peak
Monthl�Therms
95,013
72,849
53,023
29,812
25,081
% of
Gross Revenues
2.88%
2.01
2.09
0.66
�..
The Sys2em's customers have grown in the past six years from 10,490 in September of 1989
to 12,705 in July of 1997. The System's 13,251 customers represent a market penetration of
approximately 5%, providing an opportunity For continuec� 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, 1996:
Average No.
Customers
Interruptible
Residential
Commerciat
Cleanvater Gas Strategic Plan
9
10,594
1,580
Gas
Volume
1 �.31%
26.56
55.13
Gas
Sales
10.36%
32.84
56. �0
The mana�ement of the Clearwater Gas System developed a comprehensive "1995-2002
Strategic Plan" wYuch was presented to the City of Clearwater Commission on May 16, 1996. This
Strategic Plan provided three (3) strategic opportunities:
1
2
3
Accelerate growth in Pinellas County - this is projected to add an additional
5,300 new customers by the yeaz 2002;
Expand gas service into Pasco County - this is projected to add an additionai
4,500 new customers by the year 2002; and
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 which contemplates the
issuance of Gas Revenue Bonds as described below. The Series 1997 Bonds are the third issue of
bonds required to implement the funding for the overall Strategic Plan.
.
22
9�-.��i
�
�
�
Future Projects
The Strategic Plan projects future bond issues to be funded by the Gas System Revenue
Bonds as follows: ,�. `,
�:x.�;
Long Range Strategic Plan Bond Issues (1995-20021
(in millions)
Pinellas County Gas Main & Service Extensions
Pinellas Improvements
Finellas Relocation
Pinellas Land, Bldg. & Equip
Pasco County Gas Main & Service Extensions & LP
�asco Relocaiion
Pasco Land, Bldg. & Equip
Subtotal Net Capital Requirements for Strategic
Plan Expansion
Allowance for �ond Expenses & Debt Service
ateserve Fund
�otal Gas Revenue Bond Issues Projected
i'asco County Territorial Dispute
TQTAL
$6.72
2.26
5.26
1.64
9.22
.43
1.48
Series
1997 ,
Bonds
$1.30
37
.79
1.00
3.73
0
52
$27.01 $7.71
3.78 1.08
$30.79 $8.79
Future
Additional
Bonds
$5.42
1.�9
4.47
.64
5.49
.43
96
$19.30
2.70
$22.00
On June 21, 1994, Peoples Gas System, Inc., petitioned the Florida Public Service
Commission (FPSC) to resolve a territorial dispute between Peoples Gas System ("PGS") and the
Clearwater �Gas System relating to the Pasco County service territory. PGS asked the FPSC to deny
the System the Pasco Countiy territory and to certify the area for PGS. The dispute was settled in
the spring of 1995, with the settlement providing the System with 117 square miles of expanded
service territory in southwestern Pasco County. However, the settlement also precludes the System
from expanding to the north and east in Pasco County, which service areas were assigned to PGS.
Environusett�g�! daemediation Costs; Environmental Imposition Rate Adjustment
In December 1993, the Florida Department of Environmental Protection ("FDEP") informed
the City that it intended to pursue an investigation of the City.of Clearwater Manufactured Gas Plant
(the "Former Plant") site which was located frorn the 1920's through about 1960 at the current site
ofthe System's Administrafive Oflices and Pinellas Operations Center. The main components of the
Former Plant were removed between 1960 and 1985 and the site is currently paved. An initial
investigation by tHe Federal Environmental Protection Agency in the late 1980's determined that no
serious health hazards existed at this site but referred it to the FDEP for future monitnring.
23
9���-�
During 1995, the System completed the required Comprehensive Assessment Plan (CAP) and
�� removed two fuel oil storage tanks found durin� the 1995 site investigation. In 1997 the System will
continue the site investigation for possible contamination, which may include contamination from the
operations of not only the Former Plant but also the City Fleet Maintenance Facility, City Incinerator
and City Paint Shop which were all located on this si�e over the years. CGS has abandoned several
existing gas mains which were located on the site and have experienced leakage problems in recent
years.
The City has retained the services of both an environmental attorney and an environmental
consultant to assist with the site investigation. The City has negotiated through its environmental
attomey an interlocal agreement with the FDEP to facilitate a review of the site investigation findings.
The interlocal agreement was ratified by the City Commission on March 7, 1996, and approved by
the FDEP.
Although the System operated the Former Plant in full compliance with all then-applicable
environmental rules; the current review is being undertaken under more stringent environmental
requirements imposed in recent years to ensure that any contamination at the site will not adversely
affect the water supply.
Environrnental Consulting & Technology, Inc. (ECT) of Tampa, Florida, has been retained
as the System's environmental consultant. During 1995 ECT, with the assistance of the System's
crews, drilled holes and excavated a small segment of the Former Plant site in order to prepare the
� CAP. ECT submitted a revise� Contamination Assessment Plan ("CAP") to FDEP on November 2,
1995. While there has been a conceptual agreement on the CAP, to date, no final FDEP approval has
been received.
At this time, it is not possible to estimate the cost of cleaning up the site as the amount or type
of contamination is unknown at this time. The cost of the investigation and resulting remediation of
the site will be funded thraugh an Environmental Imposition Adjustment (EIA) applicable to all firm
standard natural gas therm rates and standard propane (LP) gallon rates. The EIA permits the System
to recover the cost of environmental costs imposed on the System by federal, state and local
regulatory agencies. The cunent EIA is $0.015 per therm or $0.014 per gailon of usage which has
been collected since October 1, 1995. Through 3uly, 1997, $257,908.24 of the total $311,401.44 of
environmenta! costs actually expended has been recovered through the EIA.
MUNICIPAL BOND INSURANCE
The following infformation has been furnished by MBIA Insurance Corporation
("MBiA" or the "Insurer") for use in this Oi'iicial Statement. Reference is made to t#pp�ndix
F herein for a specimen of 169[BIA's policy.
MBIA's policy unconditionally and irrevocably guarantees the full and complete payment
required to be made by nr on behalf of the County to the Paying Agent or its successor of an amount
� equal to (1) the principal of (either at the stated matunty or by an advancement of maturity pursuant
to a mandatory sinking fund payment) and interest on, the Series 1997 Bonds as such payments sh�ll
24
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become due but shall not be so paid (except that in the event of any acceleration of the due date of
�'� such principal by reason of mandatory or optional redemption or acceleration resulting from default
or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment,
the payments guaranteed by MBIA's Policy shall be made in such amounts and at such times as such
payments of principal would have been due had there not been any such acceleration); and (2) the
reimbursement of any such payment which is subsequently recovered from any owner of the Series
1997 Bonds pursuant to a final judgment by a,court of cornpetent jurisdiction that such payment
�onstitutes an avoidable preference to such ow`��r within the meaning of any applicable bankruptcy
law (a "Preference").
MBIA's policy does not insure against loss of any prepayment premium which may at any time
bepayable with respect to any Series 1996 Bond. MBIA's Policy does not, under any circumstance,
insure against loss relating to: (1) optional or mandatory redemptions (other than mandatory sinking
fund redemptions); (2) any payments to be made on an accelerated basis; (3) payments of the
purchase price of Series 1997 Bonds upon tender by an owner thereof; or (4) any Preference relating
to (1) through (3) above. MBIA's policy also does not insure against nonpayment of principal' of or
interest on the Series 1997 Bonds resulting from the insolvency, negligence or any other act or
omission of the Paying Agent or any other paying agent for the Series 1997 Bonds.
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified mail,
by MBIA from the Paying Agent or any owner of a Series 1996 Bond the payznent of an insured
amount for which is then due, that such required payment has not been made, MBIA on the due date
of such payment or within one business day after receipt of notice of such nonpayment, whichever
is later, will make a deposit of funds, in an account with State Street Bank and Trust �ompany, N.A.,
in New York, New York, or its successor, sufficient for the payment of any such insured amounts
which are then due. Upon presentment and sunender of such Series 1997 Bonds or presentment of
such other proof of ownership of the Series 1997 Bonds, together with any appropriate instruments
of assignment to evidence the assignment of the insured amounts due on the Series 1997 Bonds as
are paid by MBIA, and appropriate instrurnents to effect the appointment of MBIA as agent for such
owners of the Series 1997 Iionds in any legal proceeding related to payment of insured amounts on
the Series 1997 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 ofthe insured amounts due on such Series 1997 Bonds, less any amount held
by the Paying Agent for the payment of such insured amounts and legally available therefor.
MBIA is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange tisted
company. MBIA Inc. is not oblig�ted to pay the debts of or claims against MBIA. MBIA is
domiciled it*. the 5tate ofNew York and licensed to do business in and subject to regulation under the
laws of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the
Comrnonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the
Territory of Guam. MBIA has two European branches, one in the Republic of France and the other
in the Kingdom of Spain. New York has laws prescribing minimum capital re9uiremenES,limiting
classes and Concentrations of investments and requiring the approval of policy rates and forms. State
laws also regulate the amount of both the aggregate and individual risks th�t may be insured, the
payment ofdividends by MBIA, changes in controi and transactions among affiliates. Additionalty,
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MBIA is required to maintain contingency reserves pn its liabilities in certain amounts and for certain
periods of time.
As ofDecember 31, 1996, MBIA had admitted assets of $4.4 billion (audited), total liabilities
of $3.0 billion (audited), and total capital and surplus o� $1.4 billion (audited) determined in
accordance with statutory accounting practices prescribed or permitted by insurance regulatory
authorities. As of June 30, 1997, MBIA had admitted assets of $4.8 billion (unaudited), total liabilities
of $3.2 billion (unaudited), and total capital and surplus of $1.6 billion (unaudited) determined in
accordance with statutory accounting practices prescribed or permitted by insurance regulatory
authorities.
Furthermore, copies of MBIA's year end financial statements prepared in accordance with
statutory accounting practices are available from MBIA. A copy of the Annual Report on Form 10-IC
ofMBIA Inc. is available from MBIA or the Securities and Exchange Commission. The address of
MBIA is 113 King Street, Armonk, New York 10504. The telephone number is (914) 273-4545.
Moody's Investors Service rates the claims-paying ability of MBIA "Aaa."
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. rates
the claims-paying ability ofMBIA "AAA."
Fitch Investors Service, L.P., rates the claims paying ability of IV�IA "AAl�."
'�„� Each rating of iViBIA should be evaluated independently. The ratings reflect the respective
rating agency's current assessment of the creditworthiness of 1VIBIA 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 1997 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 1997 Bonds. MBIA does not guarantee the market price of the Series 2 997 Bonds
nor does it �aarantee that ihe ratings on the Series 1997 Bonds will not be reversed or withdrawn.
The insurance provided by this Policy is not covered by the Florida Ynsurance Guaranty
Association created under Chapter 631, Florida Statutes.
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Rights Granted Insurer
,� Generally, in connection with its insurance of an issue of municipal securities, the Insurer
requires, among other things, (i) that it be granted the power to exercise any rights granted to the
holders of such securities upon the occurrence of an event of default, without the consent of such
holders, and that such holders may not exercise such rights without the Insurer's consent, in each case
so long as the Insurer has not failed to comply with its payment obligations under its insurance policy;
and (ii) that any amendment or supplement to or other modification of the principal legal documents
be subject to the Insurer's consent. The specific rights, if any, granted to the Insurer in connection
with its insurance af the Bonds are set forth in "APPENDIX C- SUMMARY OF CERTAIN
PROVISIONS OF THE ORDINANCE."
THE CITY AND PINELLAS COUNTY
The City is a municipal corporation organized and existing under the laws of the State of
Florida. The Ciry is located in the middle of the west coast of Florida on the Gulf of Mer.ico and has
a population of 103,326 as of 1996. Its City limits comprise approximately 26.4 square mil�s of land
and �.5 square miles of waterways and lakes.
The City is govemed by a City Commission and operates under a Commission-Manager form
of government. The City Commission appoints a full-time City Manager and a fult-time City
�� Attorney. A full-time Director ofFinance has the responsibility for all financial operations of the City,
and is appointed by the City Manager. Also, an internal audit director is appointed by the City
Manager and serves full time.
The City is primarily a resort and residential community. The City has many recreational
facilities including tennis, golf, b�ating, fishing, water sports, and recreationai paths. During the
winter months, the hotels, motels, and restaurants fiil with visiting tourists and winter residents. The
City offers over 42 acres of public beach front.
The City of Clearvvater 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 8�0,722
residents. Major privaxe 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 infonnafion on the City is contained in Appendix A-"GENERAL 1NF�RMATION
RELATdNG 1'O TI� CITY OF CLEARWATER, FLORIDA."
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COMBINED DEBT SERdI�E RE�UII2EMENTS
Set forth below are the amounts of principal and interest en the Parity Bonds and the Series
1997 Bonds and the combined debt service of each in the bond years indicated.
Bond Year
Ending
Se�t. 1
1998
1999
2000
2001
2002
2003
2004
2005
2006
2Q07
2008
2009
2010
2011.
2012
2013
20I4
2015
2016
20I7
2018
2019
2020
2021
2022
2023
2024
2025
2026
Tatals*
�urrently Outstandinp�Bonds �eries 1997 Bonds Combined
Total Debt Serv�ce Pn'ncipal In r Debt Service
* May not add due to rounding:
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HIS'�'O�tICAL COVERAGE OF MAXIMUM ANNUAL DEBT SERVICE
"� BY THE SYSTEM NET REVENUES
Fiscal Yeaz Ending 1994 1995 1996
Gross Revenues (1)
Cost of Operation
and Maintenance (1)
Net Revenues
Projected Maximum Annual
Annual Debt Service (2)
Coverage ofProjected
Maximum Annual Debt
Service by Net itevenues
$13,316,619
10.220,164
3,096,455
2,263,643
1.37
$13,672,905
I 0,555,346
3,117,559
2,263,643
138
$16,423,147
13,199 962
3,223,185
2,263,643
1.42
(1) City of �learwater, Annual Financial Reports (Audited).
(2) Projected Maximum Annual Debt Service for Series 1997 Bonds and Parity Bonds.
RATINGS
,� 1�Yoody's Investors Service, Inc. and Fitch have assigned the Series 1997 Bonds ratings of
"Aaa" and "AAA", respectively, to the Series 1997 Bonds with the understanding that an insurance
policy insuring the payment when due of the principal of and interest on the Series 1997 Bonds will
be issued by the Insurer. Such ratings reflect the views of the rating agencies and an explanation of
the significance of such ratings may be obtained only from the rating agencies furnishing the same.
There is no assurance that such ratings may be continued for any given period of iime or that they will
not b� 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 e�ect on the market price of the Series 1997 Bonds. For any additional description of ratings
and their nneanings, Moody's Investors Service, Inc. and Fitch should be contacted.
�
LEGALITY
Certain legal matters in connection with the issuance of the Series 1997 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 1997 Bonds. The praposed
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 Pamela K. Akin, Esquire, City Attorney and by its
disclosure counsel, Nabors, Giblin & Nickerson, P.A., Tampa, Florida.
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TAX EXEIVIPTION
The Internal Revenue Code of 19�6, as amended (the "Code") establishes certain
requirements which must be met subsequent to the issuance and delivery of the Series 1997 Bonds
in order that interest on the Series 1997 Bonds be and remain excluded from gross income for
purposes offederal income taxation. Non-comptiance may cause interest on the Series 1997 Bonds
to be included in federal gross income retroactive to the date of issuance of the Series 1997 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 ofthe Series 1997 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 5tates. 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 1997 Bonds.
In the opinion of Bond Counsel, assuming comp�iance with the aforementioned covenants,
under existing laws, regulations, judicial decisions and rulings, interest on the Series 1997 Bonds is
excluded from gross income for purposes of federal income taxation. Interest on the Series 1997
�onds is not an item of tax preference for purposes of the federal alternative minimum t� imposed
on individuals or corporations; however, interest on the Series 1997 Bonds may be subject to the
alterna6ve 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 s;a:,h corporation's adjusted
current earnings over its alternative minimum taxable income (before this adjustment and the
alternative tax net operating loss deduction). "Adjusted Current Earning5" will include interest on
the Series 1997 Bonds. The Series 1997 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 1997 Bonds. Prospective purchasers of Series 1997 Bonds should be aware that
the ownership of Series 1997 Bonds may result in collateral federal incom� tax consequences,
including (i) the denial of a deductian for interest on indebtedness incurred or continued to purchase
or carry Series 1997 Bonds, (ri) the reduction of the loss reserve deduction for property and casualty
insurance companies by 15%0 of certain items, including interest on the 5eries 1997 Bonds, (iii) the
inclusion of interest on the Series 1997 Bonds in earnings of certain foreign corporations doing
business in the United States for purposes of a branch profits tax, (iv) the inclusion oi interest on
Series 1997 Bonds in passive income subject to federal income taxation of certain Subchapter S
corporations with Subchapter C earnings and profits at the close of the taxable year, and (v) the
inclusion of interest on the Series 1997 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 1997 BONDS
AND THE REC�IPT OIt ACCRUAI.. OF THE INTEREST THER�ON MAY HAV� ADVERSE
FEDERAL TAX CONSEQUENCES �'OR CERTAIN INDIVIDUAL AIVD CORPORATE
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BONBHOLDERS. PROSPECTIVE BOI�tDHOLDERS 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 consec�uences resulting from the ownership of obligations that
are similar to the Series 1997 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 affecEed the market value of obligations similar to the Series 1997 Bonds. From time to time,
legislative proposals are pending which could have an effect on both the federal ta�c consequences
resulting from ownership of Series 1997 Bonds and their market value. No assurance can be given
4hat legislarive proposals will not be introduced or enacted that would or might apply to, or have an
adverse effect upon, the Series 1997 Bonds.
UNDERWRI'd'ING
The Series 1997 Bonds are being purchased by the Underwriter from the City at an aggregate
purchase price of [Purchase Price] (par less underwriter's discount of [Underwriter's Discoun.t]), plus
accrued interest on the Series 1997 Bonds. The Underwriter is obligated to purchase ali the Series
1997 Bonds if any aze purchased. Following the initial public offering, the public offering prices may
be changed from time to time by the Underwriter.
The Series 1997 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.
INV�STMENT POLICY OF THE CITY
Pursuant to the requirements of Section 218.45, Florida Statutes, the City adopted a written
investment policy which applies to all funds held by or for the benefit of the City Commission (except
for proceeds of bond issues which are deposited in escrow and debt service funds and governed by
their bond documents} and funds of Constitutional Officers and other component units of th� City.
The objectives of the investment policy, listed in order in order of importance, are:
Safety of principal
Provision of sufficient liquidity
Optimization of return within the constraints of safety and liquidity
The investrnent policy limits the securities eligible for inclusion in the City's portfolio. The
City will attempt to maintain a weighted average maturity of its investments at or below three years;
however, the average maturity of investments may not exceed fottr years.
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To enhance safety, the investment policy requires the diversification of the portfolio to reduce
'� the risk of loss resulting from over-concentration of assets in a specific class of security. The
investment policy also requires the preparatior. of periodic reports for the City Commission of all
outstanding securities by class or type, book value, income earned and market value as of the report
date.
Notwithstanding the foregoing, moneys held in the funds and accounts established under the
Ordinance may be invested only in Permitted Investments, as described in the Ordinance.
VAL�DATION
The Series 1997A Bonds were validated pursuant to Chapter 75, Florida Statutes, by
judgment rendered on May 12, 1995, of the Circuit Court of the Sixth Judicial Circuit, in and for
i'inellas County, Florida. The time for filin� an appeal of said judgment has expired with no such
appeal having been filed.
ENFORCEABYLITY OF REMEDIES
The remedies available to the owners of the Series 1997 Bonds under the Ordinance (and the
policy ofmunicipal bond insurance referred to herein) are in many respects dependent upon judicial
� actions which are often subject to discretion and delay. Under existing constitutional and statutory
law and judicial decisions, including specifically Title 11 of the United States Code, the remedies
specified by the Federal Bankruptcy Code, the Ordinance and any policy of m�nicipal bond insurance
refsrred to herein may not be readily available or may be limited. The various legal opinions to be
delivered concunently with the delivery of the Series 1997 Bonds (including Bond Counsel's
approving opinion) will be qualified, as to the enforceability of the various legal instruments, Uy
limitations imposed by bankruptcy, reorganization, insolvency, or other similar laws affecting the
rights of creditors or by such principles oi 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 1997 Bonds or (ii} in any way
questioning or affecting the validity ofthe Series 1997 Bonds, the Ordinance, any proceedings of the
City taken with respect to the authorization, sale or issuance of the Series 1997 Bonds or the pledge
or applicaUon of arry moneys provided for the payment of the Series 1997 Bonds, including the Net
Revenues of the System.
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The City is a party from time to time in various law suits involving the City generally, and
believes tt�at none of the actions currently pending will have a material effect upon the finances of the
City or of the System.
GENERA.L PUItPOSE FINAIVCIAL S�'ATEMEN'�S
The excerpts from the General Purpose Financial Statements and other information of the City
for the fiscal year ended September 30, 1996, are included in Appendix B to this Officiat 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 1997 Bonds.
�INANCL�L ADVISOR
The City has retained First Union Capital Markets Corp., 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 1997 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 faimess of the information contained in this Off'icial Statement.
ADVISORS AND CONSULTANTS
The City has retained advisors and consultants in conn�ction with the issuance of the Series
1997 Bonds. These advisors and consultants are compensated from a portion of the proceeds of the
S�ries 1997 �onds, identified as "Costs of Issuance" under the heading "ESTIMATED SOURCES
ANI3 USES �F F[JNDS" herein; and other compensatioq is, in some instances, contingent upon the
issuance of the Bonds and the receipt of the proceeds thereof.
Fir:ancial �dvisor. The City has retained First Union Capital Markets Corp., St. Petersburg,
Florida, as financial advisor (the "Financial Advisor") in connection with the preparatian of the City's
plan offinancing and with respect to the authorization and issuance of the Series 1997 �onds, The
fees of the Financial Advisor will be paid from proceeds of the Series 1997 Bonds and such payment
is cantingent upon the issuance of the Series 1997 Bonds.
13ond Cow�.sel. Bryant, Miller and Olive, P.A., Tallahassee, Florida represents the City as
Bond Counsel, The fees of Bond Counsel wili be paid from proceeds of the Bnnds, and such
payment is contingent upnn the issuance of the Bonds.
3�
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DiscPosure Counsel. Nabors, Giblin & Nickerson, P.A., Tampa, Florida represents the City
&� as Disclosure CounseL The fees of Disclosure Counsel wiEl be paid from proceeds of the Bonds, and
such payment is contingent upon the issuance of the Bonds.
�
COI+IT�IU�1G IDISC�OSURE
The City has covenanted for the benefit of the holders and beneficial owners of the Series
1997 Bonds to provide certain financial i�iformation and operating data relating to the City by not
later than June 1 in each year commencing June 1, 1998 (the "Annual Report"), and to provide
notices of the occurrence of certain enumerated events, if deemed by the City to be material. The
Annual Report will be filed by the City with each Nationally Recognized Municipal Securities
Inforrnation Repository ("NRMSIR"), and with the State of Florida Repository, if and when created.
The notices of material events will be filed by the City with the NRMSIR and with the State of
Florida Repository, if and when created. The specific nature of the information to be contained in
the Annual Report or the notices of material events is summarized below under the caption
"APPENDIX E- Summary of Continuing Disclosure Certiiicate." These covenants have been made
in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). The City has never
failed to comply in all material respects with any previous undertakings with regard to said Rule to
provide annual reports or notices of material events.
MISCELLAl0�E0US
i�ill 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 vvill
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 ofthe Series 1997 Bonds, the undersigned will furnish their certificate
34
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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 1997 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 #his Official Statement is to be usecl, 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, �Y.ORIIDA
.�
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By:
Mayor-Commissioner
By:.
City Manager
����
�
�����n� �
GENERAL INF�ItI�3r�TION RELATING �'O
THE CITY OF CLEARWATER, FLORIDA
����
GEliT�RA� �1F�RMATION �
REI.ATING TO THE CITY f�F CLEARWATER, FLORIDA
Location
APPENDIX A
The City of Clearwater (the "City"), the county seat of Pinellas County (the fifth most
populous county in Florida), is geographically located in the middle of the west coast of Florida on
the Gulf of Mexica It is situated approximately 22 miles west of Tampa ar.d 1G miles north of St.
Petersburg. Standing on the highest coastal elevation of the State, the City limits comprise
approximately 26.4 square mites of land and 8.57 square miles of waterways and lakes. �, .
Clearwater Beach, a corporate part of the City, is a beach community connected to the
mainland by Memorial Causeway, a four-lane, toll-free drive stretching almost two miles across the
Intracoastal Waterway. Business on Clearwater Beach is mainly tourist oriented, with hotels, matels
and gift shops. Many fine hames, apartments and condominiums offer pleasant, semi-tropical island
accommodations to permanent residents and winter and summer visitors.
History
The area now known as Clearwater was first explored in 1528 by Panfile de Narvaez, a
� Spanish explorer who encountered a large tribe of Indians, which his army drove out. The Indians
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 'snto the area around the time of the Seminole Wars. After the wars
ended, the territory was opened by the Federal government for homesteading under the Armed
Occupation P,ct. The first land title was granted in 1842. The early settlement, named "Clear Water
Harbor," was incorporated in 1�97. "Clear Water" later became one word and "I-Iarbor" 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 Adminisfration
Clearwater has a commission-city manager form of government. Pour commissioners and a
mayor-commissioner aze elected at lazge to serve overlapping three-year terms. They appoint the city
manager and the city attorney. All other administrative and professional posifiions are appointed by
the city manager in acco���nce with the City's Civil Service System.
A-1
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The City has approxirnately 1,660 employees, covered by the City's Civil Service law relating
� to recruitment, promotion, evaluation and discipline based on merit principles. Four employee unions
represent the City's civil labor force: two units of the Fraternal Order of Police; one of the
International Association of Fire Fighters; and one from the Communications Workers of America.
Transportation
Pinellas County and Clearwater are served by three major causeways and bridges over Tampa
Bay, by U.S. 19 and I-275 to the north and south, by I-4 and U.S. 60 to the east. State Roads 590,
686 and 55 also afford access to the City.
Tampa International Airport, located approximately twenty miles from downtown 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 International Airport, five miles from downtown Clearwater, offers
regularly scheduled passenger service and charter and special group flights, on a more limited basis
to both domestic and foreign destinations, particularly to Canada, Mexico, and Central and South
America. The Executive Airpark, which is slightly over a 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 east) is the closest deep �vater 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 Clearv�aier Harbor opposite Sand Key.
Gulf Coast Motor Lines provides service daily between Cleatwater, 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 5ervice and Comm►anfty Facilities
The City owns and operates its own water and wastewater collection systems. Water is
obtained from 17 deep wells owned and operated by the City (approximately 20-25%) and from
wholesale purchases from the Pinellas County Water System (approximately 75-80°/a}. Total daily
average is approximately 29 million gallons per day. The wastewater collectian program provides
for the transmission of wastewater through the City's underground sewer mains, coll�ctors and
interceptor lines and far the maintenance, repair and replacement of 322 miles of sanitary sewer lines,
The Department ofi'ublic Works maintains 302 miles of paved streets, 11 miles of unpaved streets,
approximately 120 miles of storm sewer mains, and approximately 322 miles of sanitary sewer mains.
A-2
9���i
Electric power is provided by Florida Power Corporation and telephone service is provided
,� by General Telephone Company. Time Warner 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 Cleaiwater 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 7,350 seat baseball and soRball
stadium, golf course, civic and recreational centers, 5.2 miles of recreational paths, boat ramps and
a 210 slip yacht basin and marina. The Philadelphia Phillies conduct spring training at the municipal
baseball stadium and have a long-term contract for farm club training on Cleanvater's specially
constructed facilities daring the Winter Instructional LeaguE Program. Clearwater is the home of the
Clearwater Bombers, a national amateur fastpitch softball team.
Tourism
The State Division of Tourism reported 43,000,000 tourists came to Florida during 1996
setting a new record high and an increase of 42% over 1995. Approximately 4,100,000 of them
visited the Clearwater/St. Petersburg area, a 3.1% increase over 1995. Clearwater's Fun N Sun
Festival each spring attracts thousands of visitors.
Education
The Pinellas County School System operates a total of 142 schools comprising elementary
through high school, exceptional, alternative and vocational schools within the County. In the fall
of 1996 there were approximately 104,665 students enrolled in kindergarten through the 12th grade
and a projection of 147,040 students for the 1997-1998 school year. Private schools and academies
are aiso 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 7uniar College
has a Clearwater campus. Eckerd College in St. Petersburg, Beacon College in Largo, Stetson
University �ollege ofLaw in Gulfport, the University of South Florida and the LTniversity oiTa►npa
in Tampa offer nearby college and post-graduate education.
Andustry, 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 Clearwater Airpark (Executive Airport) and to the CSX
Transportation Company. There is also a privately owned, 35 acre industrial park. Large industries
loaated near Clearwater include Honeywell, General Electric, iTNISYS, Concept and Hercules
Defense Electronics Systems, Inc.
A-3
�� ��
�
�
Pension Plan
The Employees' Pension Plan and the Fireman's Pension Plan are self-administered by the City.
City contriburions for fiscal year 1995-I996 were $2,867,835 to the EmpIoyees' Plan and $867,569
to the Fireman's Plan, and were in accordance with actuarially determined funding requirements.
In addirion, supplemental pensions exist for certified Police and Fire employees, funded solely
from excise taxes on certain insurance premiums covering property in Ciearwater; collected by the
State and remitted to the City. Both plans require benefits to be adjusted to equal funds assets
provided by the defined contributions.
[Remainder of page intentionally left blank]
A-4
9� s�
Year
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
{a)
Permanent
Population
99,124
100,202
101,082
98,784
99,475
100,166
100,857
101;548
102, 590
103,326
Demographic Information
Last Ten Fiscal Years
(b)
Per Capita
Income
17,947
19,317
21,255
21,881
22,059
22,958
24,470
Not avail.
22,789
24,696
(c)
Median
Age
Not avail.
Not avail.
Not avail.
Not avail.
42.1
423
42.3
42.9
422
42.1
(d)
School
Enrollment
10,797
10,922
10,796
10,732
11,572
11,921
11,584
10,043
10,284
11,906
(e)
Unemployment
Rate (%1
5.0%
4.7
5,3
4.8
6.1
5.4
6.1
5.5
4.8
4.2
Source: City of Clearwater, Florida Comprehensive Annual Financial Report for period ending
September 30, 1996.
�a) 1987-1989, U.S. Bureau of Census estimate; 1990, Census; 1991-1993, University ofFlorida,
,� Bureau ofEconomic and Business Research; 1994, U.S. Bureau of Census estimate; 1995-96,
University of Florida, �ureau of Economic and Business Research.
�
(b) Data is for Pinellas County, but should also approximate Clearwater levels. 1987-1989, U.�.
Department ofCommerce, Bureau ofEconomic Analysis; 1990-1994, Florida Trend Magazine;
1995-1996, University of Florida, Bureau of Economic and Business Research, Florida
Statistical Abstract.
(c) Pinellas County level data, but should also approximate Clearwater levels. 1991-1992, U.S.
Bureau of the Census; 1993, St. Petersbur� Times Research Bureau; 1954, �aleG and Marketing
Mana� m n, Survey of Buying Power; 1945-1996, University of �'lorida, Bureau of Economic
�nd �3usiness Research, Florida Statistical Abstract.
(d) 1987-1990, Clearwater Planning Department population pro rata estimate of Pinelias County
School Board Countylevel data for public schools; 1991-1994, Pinellas County School Board;
1995-1996, University of Florida, Bureau of Economic and Business Research, Florida
Statistical Abstract.
(e) Data is for Tampa/St. Petersburg M5A. Source of data is the Florida Bureau of Labor Market
Information.
NOTE: Data is for an unspecified point in each year, not specificaliy September 30.
A-5
9�-�
�.
�
Property Values, Construction, and Bar�k Depasits
Last Ten Fiscal Years
Commercial Congtruction
Fiscal Year Number of
Year Pesmits Value
198'1
1988
1989
199Q
1991
1992
1993
1994
1995
1996
626
731
705
782
626
557
1,693
1,831
1,775
1,898
$42,649,623
45,510,427
121,554,308
47,382,33Q
24,250,916
32,765,807
42,051,081
37,164,437
77,486,099
42,360,262
Residenti�l Construction
Number of
Fermits Value
1,378
1,385
1,127
1,Q18
1,260
1,137
3,885
3,882
3,747
4,224
$�6,939,249
42,150,29G
3 7,140,105
74,169,49Q
34,937,357
�25,956,31 �
29,296,168
49,950,413
53,614,754
26,854,040
Source: Cify af Clearwater, Florida Comprehensive Annual Financial Report for period ending
September 30, 1996.
(a)
ro>
��)
h�
Includes institutions, churches, seawalls, pools and non-valued building permits.
Pinellas County Property Appraiser, values listed are For yaars of collections.
Includes balances in commerciai, savings, savings arid loan, and building and loan banking
institutions for Pinellas Cownty. Data from the Florida Bankers Assaciation Branch Deposit
Report of Flor.ida Bank and Thrift Institutions.
A-6
�� �
0
�,,r�
. �
Miscellaneous Construction (al
Number of
Permits Value
4,454
3,411
4,326
4,991
5,906
5,940
6;799
6,063
6,&27
G,�25
$ 9,198,587
13,219,492
22,579,744
16,983,323
17,452,664
18,020,294
20,113,175
17,922,023
28,843,480
24,898,425
Tota1 Assessed Bank Deposits (c)
Proper�,y_Value (bl .. (in thousandsl
A-'l
$4,396,348,982
4,702,670,638
4, 890,327, 543
5,049,539,803
5,356,661,219
5,475,721,772
5,505,360,476
5,572,851,512
5,641,202,905
5,733,193,387
$13,898,322
14, 807,126
15,440,681
15,600,212
15,2�5,415
14,360,597
13,853,289
13,274,660
13,362,164
12,7�6,549
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A-9
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Property Tax Rates - All Direct and Overlapping Governments
(I'er �i,00U of r�.ssessed Value)
Last Ten Tiscal 1'cars
Downtown Counry Emergency
Fiscal Develop- School Trensit Medical
Year it mentt,� �Qal� oa ' tric arv� ntlier �1
1987 4.4558 1.000 7.5020 4.258 .4536 .931 .7013 19.3017
1988 5.0000 I.Q00 7.3370 4.915 .4987 .931 I.2933 2Q.4756
1989 5.1000 .250 7,6500 4.909 .5135 .931 1.3775 20.7310
2990 5.2000 .860 8.5330 5.280 .5743 S.ObO .9617 22.3G90
1991 53037 I.000 8.7660 5.234 .5743 .700 1.0964 22.5744
1992 5.7158 1.000 �.6260 5.495 .5893 .700 1.1560 22.6821
1993 5'.1158 I.OI)0 4.00Od 5.417 .5893 .SSO 1.1820 23.1541.
1994 5.1158 1.000 9.0820 5.429 ,6697 .872 1.4221 23.5906
1995 5.1158 1.000 9.3590 5.585 .6697 .�Qb 1.6308 24.1663
1996 5.1158 l.000 9.3290 5.140 .6697 .752 1.6561(b) 24.0366
Soumx: City ofCtcatwatet; F►orida, Comprehensive Annual Financia! RegwR fot period endeng Sep2cmber 30, 1996,
(a) A separate razing district asrablished by referendum wUich aff cts only downrown properties.
(b) Other includes Pinellas Counry Planning Council (.0214); Juvenile Welfare Board (.8117): SW Florida Water Management Districe (.4220);
Pinellas Anc]ote River Basin f.4010).
[Rernainder of page intentionally left blank]
A-10
��'`�
Taxna�
Bellwether Prop. LP Ltd.
giolland BVestshore, Inc.
Taylor, 3ohn S. iII
Sand Key Association Ltd.
�Valmart Store, Inc.
Itegency Land Partnership
H R E Propertaes
Duff, Andrew I�. , Trustee
Branch Sunset Association
John �Iancock Life Ins Co.
Subtotai
All Others
Total
City of Clearwatsr, �lorida
Primcipal Taxpayers
Year Ended 3epterriber 30, 1996
Type of Busin�ss
Shopping Center
Shopping Center
Landowner
Hotel
Shopping Center
Adult Congregate Facility
Shopping Center
Hotel & Plaza
Shopping Center
Apartment Complex
Assessed
Value
$ 75,664,400
60,3�9,9Q0
31,493,fr00
19,212,400
18,1�1,800
17,857,700
14,473,300
14,400, 500
14,545,000
_ 13,500.000
279,71�,600
�,540,499. � 10
$3.820.217.710
Percentage
to Total
Assessed
V ue
1.98%
1.58
0.82
0.50
0.48
0.47
0.38
0.38
0.38
0.35
7.32
_92.6$
1Q0•00%
Source: City of Clearwater, Florida, Comprehensive Annual Financial Iteport for period
ending September 30, 1996; T'inellas County Property Appraiser, 1995 tax rolls for
1996 collections.
A-11
/ I ya.✓ 7
City of Clearwater, Florxda
� Ratio of 1�Iet General Bonded Debt io T�acable Assessed Value
and letet Boa�ded Debt Per Capita
Last Ten Fiscal Years
Ratio of Net Net
Taxable Net General General
Assessed General Bonded Debt Bonded
Fiscal Value Bonded To Assessed Debt
Year lPopulation (0001f11 pebt(21 Value Per Ca�
1987 99,124 $3,395,306 $3,037,117 .09 30.64
i988 100,202 3,621,136 2,395,290 .�7 23.90
1989 lO1,Q82 3,742,237 1,723,137 .OS 17.05
1990 98,784 3,856,684 1,036,234 .03 10.49
1991 99,612 4,124,564 567,950 .O1 5.70
1992 99,856 4,179,582 452,779 A1 4.53
1993 100,557 4,188,105 348,478 .O1 3.46
Y994 101,548 4,181,314 242,700 .O1 2.39
1995 102,590 4,186,108 133,597 .00 1.30
i996 103,326 4,252,433 21,598 .00 0.21
� Source: City of Clearwater, Florida, Comprehensive Annual Financial I%port for period
ending 5eptember 30, 1996.
(i) Values listed are for year of collections.
(2) Gross general bonded debt less amounts on deposit in sinking funds or debt service funds.
[Itemainder of page intentionally left blank]
A-12
����
City of Clearwater, Florida
`� Computataon of Legal Debt Margin
°� ; �eptember 30, 1996
Assessed Valuatian of Non-Exempt Real Estate(a)
Times: Twenty Percent Limitation per City Charter
Equals Legai Indebtedness Limitation
Iiebt 5ubject to Indebtedness ]Limitation:
General Obligatian �onds:
1978 Series
It�venue Boa�ds:
i985 Public Service Tax and
Bridge Revenue Bonds
� 1988 Water and 5swer Revenue Bonds
1993 Water and Sewer Revenue Bonds
1991 Gas 5ystem Revenue Bonds
1994A Gas System Revenue Bonds
1996A Gas System Revenue Bonds
1995 Improvement Revenue Bonds
1986 Community Redevelopment Agency
Tax Increment and Lease Revenue Bonds
1987 Community Redevelopment Agency
�
$ 3,820,217,710
X .zo
$ 764.043.542
Net Debt
I.ess Sinking Subject to
Gross Debt Fur�d Assets Limitation
$ 355,000 $ 333,402 $ 21,598
1,695,001
37,601,614
�7,170,000
7,290,Q00
8,110,QQ0
8,815,Odd
10,580,Ofl0
1,605,00(3
775,011
5,324,003
$,1�3,500
742,28Q
1,035,595
5,417
197,272
622,455
9I9,990
32,277,611
38,986,500
6,547,72Q
7,074,405
8,809,583
10,382,728
9�2,545
Tax Increment Revenue Bonds 165,000 165,Q00 -Q-
l�otes, Mortgages and Contracts 11.382,786 , f,557,475 1�
fiotals $1��• 67 9.40� $.1$.�1..410 $]lb.'127991
I.egal Indebtedness Margin $647.��15:551
Source. City of Cleairwater, Florida, Comprehensi�+e Annual Financxal R�port foz period
end'u1g September 30, 1996,
{a) Valuation listed is �fram 19'95 tax �+ear for 1996 collections.
A 13
�f "� l
� - �����- z: _ �
City of Clearwater
City of Clearwater, Florida
Computatian of Direct and Overlapping Debt
5eptember 30, 1996
Net Debt
Qutstandine
$ 355,000
Percent
1Q0.00%
' �; —
$355,000
Pinellas Connty School Board 883,422 13.82%(a) 22 0
Total �� g
Source: City of Clearwater, Florida, Comprehensive Annual Financial Report for period
ending September 30, 1996.
(a) Applicable Net Debt Percentage is based on ratio of City to County Taxable values for 1996
collections($3,820,217,710 / $27,637,296,185)
�:;
A-14
�� ��
�
Fiscal
�
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
City of Ciearwater, Floriaias
Gas Revenue Bonds Coverage
Last Ten Fiscal Years
Gross
Revenuesfal
$8,967,911
9,467,621
9,170,280
9,566,159
9,865,958
11,586,605
12,562,105
13,316,619
I3,672,905
16,423,147
�xpenses(bl
$7,205,277
7,240,108
7,268,388
7,444,007
7,977,703
8,116,051
9,364,981
10,220,164
10,555,346
13,199,962
Fiscal Debt Service Requirements
y� Principal n ere t Total
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
$75,000
75,000
�O,Q40
90,000
95,000
150,000
240,000
$660,675
655,800
850,550
644,550
637,620
488,020
4�8,020
488,020
978,195
1,052,923
$735,675
730, 800
730,550
734,550
732,620
488,020
488,020
488,020
1,128,195
1,292,923
Covera�e
2.42
3.05
2.60
2.89
2.58
7.11
6.55
6.34
2.76
2.49
Net Revenues
Available for
Debt Service
$1,782,634
2,227,513
1,901,892
2,122,152
1,8�8,255
3,470,554
3,197,124
3,096,455
3,117,559
3,223,185
Maximum
Debt Service
Coveraee(cl
1.80
1.74
1, 75
1.81
Source: City of Clearwater, Florida, Comprehensive Annual Financiai Report for period ending September 30, 1996.
(a) Includes interest earnings and gross revenues from Gas System.
(b) Excludes depreciation (and similaz noncash expenses), amortization of bond discount and issue costs, bond
interest, and reserve adjustments.
(c) Maximum Debt Service coverage is presented for continuing disclosure on the Cas System Revenue Bonds,
Series 1996A and is based upan the maximum debt service for the 1446A and parity bonds in the unount of
$1,778,308.
Note: In September, 1991, the City issued $7,6�0,000 Gas System Revenue Bonds, Series 199I, to finance the cost
of advancecl refunding $7,100,000 Gas System Revenue Bonds, Series 1983 and to pay certain costs of issuance
of the 1991 bonds. In September, 1994, the City issued $8,110,000 Gas System Revenue Bonds, Series 1494A,
for additions, extensions, supplements or replacements of the existing gas sysCem in Pinellas Counry, Florid�.
Approximately $1,340,000 is fo be used to develop new gas markets.
A-15
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APPENDIX B
"� EXCERPTS FRO1Vi �'HE CITY OF CLEAIBWATER, FLO�i1E4,
GENE�bAL P�OSE FIlVANCIAY., S7['A3'EII�NT�
AND OTHER INFORMATid)1!T �'�It
THE FISCAL YEA�2 EPIDED SEP�!'EIVIPE� 30, �996
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_._ � - _
APfl'ENID� C
SUMMAI3�' OF CERT'�T PROVISIONS �� THE ORDIl�IANCE
�/'�°�'' /
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APl'ENDIX I➢
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F'ORM OF COATTINITING DISCLOSURE C�RTI�ICATE
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APPENDIX E
" FOItNI OF BOND COUNSE]L OPi1VI�N
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AFPENDIX F
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SPECIl�YEN BO�PdD YNSURt�1mi�E P°OI.ICY
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APPEI�DIX G
SCHEDULE� OF RA�S
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EXBIBIT C
�f��°i°�b?IIIIdf� DI�LI�QS�E Cb�'ttTIFiC�►�'E
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08/05J97 15742 '�'819 281 0129 N G& A' TAMPA C� 002/007
COI�'Y'YRTUIlVG I?ZSCI.��U� ��2TiFYCATE
Thas Carmruiiz� Dasclosure Certificate (the "Disclosure Certif cate") is executed and delivered
by rhe City of Clearwater, Fioiida (the "Issuer"} in connection wiih the issuance of its [Series 1997A
�orul Amount] C-as Syst�m Revvenue �onds, Series 1997A (the "Series 1947A $onds") and [Series
19978 Bond Amountj Gas System Revenue F�tef'unding Bonds, Scaies 19978 (the "Series 1997$
Sonds"}(coltectivel�, the "Series 1997 Bonds"). The Series 199? �onds ar� bein� issu�i puasuani
to Ordinance No. 5118-91 tnacted by the Ciry Commission of 4he City (the "�ommission") on
Augtast l5, I491 (the "Or'sgin�l Ordiatasice"), as amended and supplemernc.cl aad as further
supplceneeted by an fFrdinarace adopted on , 1997, as further sugpl�ented by a resolution
acpoptr�i on . i9s37 (as so s�spsplear�e.nted, 4he "Authorizing Qrd'anance") (the tN�gi�a] Ordinance
�nd 4hs Authoai�g Ordinanc� ace c�lleaively referned 40 �s the "Ordinanee").. The Yssuer covenants
artd agrees as foliows:
�E�'IO11T 1. ��SE OF DISCI.�S�i�E C�gtTaFI�,�"Y'E. 'a'his I)isciosure
Certific�te is being executed and del'avered by tha Issuer for the benefie of the Series 1997
�ondhvlde� atad in order to assist the original undenairiters of the 5eries 1997 Bonds in complying
vvith Rulc lSc2-D2(bx5) gromul��ted by the Sesuri2ies and Exchaz►ge Commission ("S�C") pursuam
to thc Securities �xxc&ange Act of l 934 (the "Rule").
S�CC"Y"It�N 2. PR�47I���1�T OF A11TrTYJ,�I. IrTFOItNitlTdOlv. Except as otheiwise
provided hese�a, itss issuar shall provide to all oi the nationally rccognized municipal s�irities
itafannaYion a�po�tories desclib� in 3ecUion 4 hereaf (the "2WRMSIE%s"), and to any stat� informacion
.� d�pa5etoay that is eytablish�d within the State of F[orid� (the "SID"}, an or b�bre 3une 30 oi' each
yetat, wa��g June 3Q 1998, the information set fortb belov� in ttais 5e�tion 2. No2withstanding
thc im�ediat�ly preceding strateace, to the extent any sueh information does not become available
:o the issuer before June 30 of any year, th� Tssuer shat! provid� such informatian .vta�n it �ecomes
available, but no later than one year foAowing the end af the Yss��r's Fiscal �'ear.
�
(A) th� Issuer's Comprehtnsive Annual Financial R�port for tt4o unmediaiely prec.�din$
Fisca! Xear (the "CA��t."), which shall include tiie auditsd fira�la! stat�ersts of eh� Issuer for the
imntediatciy preceding k'iscal Year prepared in accordanco wi3h Cer,er�lly A.ccepted Accounting
Prinpp3�s, as modi6ed by applicable State of �'lorida requir�uua�nts and tise governmeni�l accouming
st�sndards promulgated by the Government Aecoumin� Standards Boasd; pao'e�ided, howcwer, if the
audited finar�cial statemems of the Tssuer ae�e not completed prior to Apri130 nf any y�ar, tht Issucr
shall provide unaudited financial statanents on such date ausd shal! provid� the audi4cd financial
statements as soon as praeticablt following their camplefio�; and
(B) to the exteni not set forth in the CAFR, addiaonai fir�acial inferan�tion and operating
data of the type included with respect to the Issuer in tho Snal offici�l stateme»t prepared in
cormection with the sale and issuance of the Series 1997 Bonds (as amended, the "Officiat
Statemart"), as set forth below:
1, Updates of the historica] financial info�on �s2 forth in the Qffi�ial
Statemrnt uader the subheadings "Rates, Fces and Charges" and "Senricc Area" un�er the
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09/05/97 15:42 "�"81� 281 0129 N G& N TAMPA � 003/00T
principal caption "THE �YS t'�M" and "HISTpRICAL, CO�.�RAGE OP MA3IDVIUM
peN'�IUAI. A�BT SER`dIC& BY TF�iE SYSTEM Pi+I�T RE�TLJES" (for the then-
i�cnedia4ety pr�ceding fiv� fiscal years.
2. 1ee.cription of anyy additional indei�tedness payable in whole or in part from
the 5yst�n Net Redenues (as defined in 2he prdinance).
3. An�y oiher 6nanciaii informataon or operating data of the type iaaciuded in the
O�ciai 5tat�tnent whieh would be xnatcrial4o a holder or prospective h�lders of 4h€ Seeies
1497 �onds.
Fur pucp�ses of this Disclosura Certaficate, "Fiscal Year" mn�e►s 3he pesaod eomrraencing on
Octob�r 1�ud ending on September 30 of the next succe�ding y�ar, or se�ch other period of time
provid� by apglicabl� law.
SECTIt�N 3. dLEIaQR'Jf�t1TG SIGNN�TT�� �t�NT�. TIIE ISStsCf" Stk1II pIOVI1�v°
to che IVI81�l�IRs or ihe l�unicipa! Securities Rulemakin� ]Daard (the "1V%51�3") and to th� 5dY3, osa
a ti�rsely basis, namce of any oftihe fallow;ng �vera�, iisuch e�+ent is m�eeraat with respe�s to the 5eries
1397 Boads or ths Issuer's abitity ed satfsfy ats payment obligations with respect to the Seri�s 1997
�onds:
(E�) Principal and interest payment delinquencies;
� (�) Nor�-payment related defauits;
{C) TJnsche+�uled dravrs on the debt servicc ressrve �nd reflecting iva�nc��l difia�ulties;
(I3) Unschcduled draws on credit enhancement refl�cting finaa��ial difficulties;
(E) Substitution of credit ar liquidity providers, or their faalwe to per�orm;
(� Adverse ta�c opinions or evercts affecting the tax-exempt status of the $eries 1997
Bonds;
(G) Modifications to rights of Series 1997 $ondhotders;
(� Re�e�tptions;
(� I]efeasaaces;
(J) Release, substitudon, or sale of property securing r�payment of the Sa�ies 1997
Bonds;
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09/OS/97 15:4J '�'815 281 0129 N G& N TAbdPA __ _ � _ C� 004/097 �
t
(IC) Rating changes; and
(�) Notice of any failure on the part of fhe �ssuer or any other Obligated Person (as
defined herein) to meet the requirements of Se�tion 2 hereof.
The Issuer rsaay from time to 4ime, ua� its discretion, ckoose to provide notice o�' the
or„currence oice�tain o4�er cvents, in addition to those listed ite this Sectio�a 3, if in t}re judgm�it oi
ths I.�er, sveh �er �vents a:� raa�terial w+iYh respect to the Series 1997 Bonds, but th� Issuer does
not �ifically under4ake to commit to provide any such additional notice of the occurrence of any
matc�81 event excepe those evznts Iisted above.
i�evsr tiie Issu�r obtaiaas lrnowl�dge of the occrarrr�nce uf a sigirificant cvert described in
this 5�ctiosa 3, the Issuer shal! as sot� as possible determine if such evezat wovtd be material under
�pplic�ble federal sscurides law ta holders of Series 1997 Bonds, rog�, t9aat any evemt undes
c�ause� (D), (]E), (F), (�) cr (L,)' above will always be de�med to be matereal.
SECZTOI�T �. �I�YS�s. T'he 1�SIRs to which the Issuer �hall provide the
informado�a described in 5ections i and 3 above, to the extene reqeaared, sha[t tse 2he foIlowing
oaganizations, thar �ccessors and assigns:
(A) Blovmberg Munieipa! Reposaeory
P,O. Box 840
Princeton, N�w Jcrs�y 08542-0840
I'hone: 609/�79-3200
Fax: 609/274-59b2
(B) 7fhomson NRMSIR
A,ten: Municipal Bisclos�ue
395 diudson Street, 3rd Ftoor
New 'York, New York 10004
Phone: 212/80T-5001
Fax: 2l2/989-2078
(C) Disclosure,, Inc.
5161 River Road
�thesda, Maryland 20816
Attn: I3ocument AcquisitionslMun9cipal Securities
Phone: 301/951-1450 (issuer-r�B�4ed qu�5tions}
800/638-8241 (for ptuchase csf doeumeuts%
Fax: 301/718-2329
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08/05/97 15:43 'O'819 281 0129 N G& N TAb1PA
(D) MOOdy'S NRMSIR
Public Finance Inf'amiation Center
99 Church Street
Ncw York, Nevv York 10007
Phone: 8Q0/334-6306
Fax : Z12/553�14�0
(E) Kenny Inforrnstioa 5ystems, Inc.
65 Br+oadway, 16th Floor
New York, New York I0006
Phone: 2]2/770-4595
Fax: 212/797-7994
(F) Doru,elley Financial
Mueucipal Securities Disclosure Archive
559 Main Stre�t
Hudson, Massachu5etts 01749
Phone: 800/580-3670
Fax: 5081562-1969
(G) DFC Data Inc.
One Executeve Driv�
, Fort I.ee, New Jers�y 07024
�hone: 201/346-0701
��x: Z01/947-OY07
(I� Any NltMSYRs that ar� established saabs�quently and apgroved by the SEC.
t�oosioo�
(I) A list of the namas and addresses of all designated NRN1SIRs as of any date may
wzre�tly be obtsined by calti�ig the SEC's Fax on �emand Serv�ce at 202/942-80�8 and requcstin�
document member 0206. �
S��TION 5. 1rTO EVENT OF D�FAULT. Ioiotw+�thsfanding any other provisiv�a
an tt�e Ucdinanct to itse cont�ary, failure oFthe iss►ter 4o eomply with the provisions of this DiscDosur�
�e�ifissTe si�aD not be corasidered an event of d�faua.t under the Ordinance; providcd, however, any
Series 1997 Bond6older may take such �etions as may be necessary and appropriate, in�luding
pursuing an ac�tion for mandamus or spoci8c petforn�ace, as appiic�ble, by c�aurt or�ier, ta cause the
Issuer to c�mpiy with its obligations hereunder. For pwposcs of this Di3closure Certificate, ^5eries
199'7 $ondholder" shall mean any person wha (A) has the power, dir'ectly or indirectly, to vots or
coasent with respedt to, or to disgose of ownecship nf, any �eries 1997 Bonds (including persons
hnlding Saiss 1997 Baaxis ttnough r�rmnees� depositories or other intermgdiarits), or (B) is treat�d
as the ovmer of any 5eries i997 lBond for federal incflme tax purpasss.
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09/05/97 15:44 '�819 281 0128 N G& N TAMPA _ I� 008/007 _
F"� '� � SECTION 6. INCORPOYtATI01� BY ��'EREi�TCE. Any or all of tlie
u►�'o�na�iaa r�quired herein to be disciosed may be incorporated by reference from ather documents,
including o�cial statements or debt issues of the Issuer of related public entiries, which have been
submitted to each of the NRMSIRs and the SID, if any, or the SlEC, If the document mcorporated
by refecence is a final official statemem, it must be available from the MS�LB. The Issuer shall clearly
identify each documem incorporated by reference.
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SECTION '7. DISSEMINATION AGEleT�'S. The Issuer may, from eime to rime,
appoint or engage a dissemination agent to assist it in carrying out its obligations under this
Disclosure Certificate, and may discharge any such ageart, with or wathout appointing a successor
d'assemenating a$�ut.
SECT'Ip1�i 8• TERIVYIP�TATTON. The Issuer's obligations unda this I)isalossare
C�£icate shall t�rminate upon (t�) 4he legal defeasance, prior redemption or paymeirt in full of �11
of the Series 1997 Bonds, or (B) the ter�nination of'the corrtinuing disclosure requirements of the
Rule by legislative, judicial or administrativc attion.
SE�ON 9. A.MEI�lD1Vi�NTSo Notwithstanding any other provision of this
Disclosure Ce�tificate, the Issuer may amend this �isclosure Certificate, and any provision may be
waived, if such stnendment or waiver is supaorted by an opinion oi counse] t9xae is nationally
nco�zed in the area of federal securities laws, to the effect that such am�ndrnent or waiver wo�dd
not, in and of itself, cause the underealdngs h�:rein to violats the Rule if suah amendment or waiver
had been effeceive on the date hera�f but taking into account any subsequent chang� in or vfficial
imerpretation ofthc Rule.
SIE+C�'DI�N im. ADiiX7fiUNAL iDI��,1�trii�TlC/lv. 3Vothiaig iss Elris l,�isclosure
C.rxtificatc shall be dee�r►sd to prevem the Issuer from dissesninating �ny othcr information, using the
means ofdissemination set forth in t}us Disclosure Ceetifacate or any other mesn5 of communicatian,
or including any �tthea' information in it� aru►ual information d�scribed in Section 2 hereof or notice
ofoccurnerecc ofn signifcant evmt descn'bai in Section 3 h�r�f, in addition to that which i5 requu'ed
by tltis Disclosure Certificate. If the Issuer choases to include any inforenaiaon in its annual
informatian or noace of oceurrenct of a gignifican4 ev�t in additaon to thai which is specificalty
required by this Disclosure Certificate, thc Issucr shaIl have no v�li�ation un�ier this Disclosure
Ce�tificate Eo update such information or include it in its future �u�l infrorrn�tion or notice of
occuRen�e of a significsnt event.
SECTION 11. OBLIGAT'ED PEIB,S�iV�s. If any person, other than the IsSUer,
becomes an Obligated Person (as defined in 4he Rulc) relating to the Stri�s 3997 Bonds, thc Issuer
g���
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09/OS/97 15:44 'Q81a 281 0129 N G& N TAbIPA �007/007._
�� shall usc dts best efforts to require such Obligated Person to compty with all provisions of the Rule
applicabl� to such Obligatcd Person.
Dated Septeu�ber 1, 1997
ATTEST: CI'I'1' OF CLEARWATER, FLORIDA
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City Cierk
6
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Mayor
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EBBIBY't' D
COi�MITMENT FOR MUNiCYPAR', BOND INSIIR�►NCE
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COMMiTMEN�' TO ISSUE A
TINANCIAL GUAId.�NTY INSURANCE POLICY
Application No.: 1497-005853-02
Sale Date: September 1997 (t)
Program Type: Negotiated DP
Re: $8,660.000 (est.) City of Clearwater, Florida, Gas System Revenue Bonds, Series 1997A
(the "Obligations")
This commitment to issue a financial guaranty insurance policy (the "Commitment")
dated September 3, 1997, constitutes an agreement between CITY OF CLEARWATER,
FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance
company incorporated under the laws of the State of Nevv York.
Based on an approved application dated September 3, 1997, the Insurer agrees, upon
satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date
or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance
policy (the "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 Triastee on behalf of the Applicant, on the date
of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
.195% of total debt service, premium rounded to the neazest thousand. The premium set out in
this paragraph shall be the total premium required to be paid on the Policy issued pursuant to
this Commitment.
2. The Obligations shall have receiv�d 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 o: the
Resolution, Bond Ordinance, TrusY indenture or other official document authorizing the issuance
of the Obligations or in the final official statement or other similar document, including the
financial statements included therein.
4. There shall have been no material adverse change in any information submitted to
the Insurer as a part of the application or subsequently submitted to be a part of the application
to the Insurer.
5. No event shall have occurred which would allow any underwriter or any other
purchaser of the Obligations not to be required to purchase the Obligations at closing.
6: A Statement of Insurance satisfactory to the Insurer shall be printsd on the
Obligations.
7. Prior to the delivery of and payment for the Obligations, none of the information or
� documents submitted as a part of the application to the Insurer shall be determined to contain
any untrue or misleading statement of a material fact or fail to state a material fact required to
be stated therein or necessary in ord.�r to make the statements contained therein not misleading:
7/'�'7
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8. No material adverse change affecting any security for the Obligations shall have•
occurred prior to the delivery of and payment for the Obligations.
9. This Commitment may be signed in counterpart by the parties hereto.
10. Compliance with the Insurer's General Document Provisions (see attached).
Dated this 3rd day of September, 1997.
MBIA Insurance Corporation
By /..����'%'� �
Assistant Secretary
CITY OF CLEAR�IVA'1'ER, FLORIDA
By:
y�Title:
9�-�f
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GENERAL DOCUMENT PROVISIONS
A. Notice to the Insurer The basic legal documents must provide that any notices required to
be given by any party should also be given to the Insurer, Attn: Insured Portfolio
Management.
B. Amendments. In the basic legal document, there are usually two methods of amendment.
The first, whicli typically does not require the consent of the bondholders, is for
amendments which will cure ambiguities, conect formal defects or add to the security of
the financing. The second, in which bondholder consent is a prerequisite, covers the more
substantive types of amendments. For all financings, the Insurer must be given notice of
any amendments that are of the first type and the Insurer's consent must be required for all
amendments of the second type. Ali documents must contain a provision which requires
copies of any amendments to such documents which are consented to by the Insurer to be
sent to Standard & Poor's.
C. Su�plemental Le�al Document. If the basic legal document provides for a supplemental
legal document to be issued for reasons other than (1) a refunding to obtain savings; or (2)
the issuance of addational bonds pursuant to an additional bonds test, there must be a
requirement that the Insurer's consent also be obtained prior to the issuance of any
additionaI bonds and/or execution of such supplemental legal document.
D. Events of Default and Remedies. All documents normally contain provisions which define
the events of default and which prescribe the remedies that may be exercised upon the
occurrence of an event of defaulF. At a minimum, events of default will be defined as
follows:
1. the issuer/obligor fails to pay principal when due;
2. the issuer/obligor fails to pay interest when due;
3. the issuer/obligor fails to observe any other covenant or condition of the document
and such failure continues for 3Q days and
4. the issuer/obligor declares bankruptcy.
The Insurer, acting alone, shall have the right to direct all remedies in the event of a default. The
Insurer shall be recognized as the registered owner of each bond which it insures for the purposes
of exercising all rights and privileges available to bondholders. For bonds which it insures, the
Insurer shall have the right to institute any suit, action, or proceeding at lativ or in equity under
the same terms as a bondhalder in accordance with applicable provisions of the governing
documents. Other than the usual redemption provisions, any acceleraYion of principal payments
must be subject to the Insurer's prior written consent:
E, Defeasance requires the deposit of
1. Cash
2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government
%�"�
I _ _.0 ,r
Series -- " SLGs")
3. Direct obligations of the Treasury which have been stripped by the Treasury itself,
CATS, TIGRS and similar securities
4. Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP
strips which have been stripped by request to the Federal Reserve Bank of New York in
book entry form are acceptable.
5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If
however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-
refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed
obligations, or AAA rated pre-refanded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith and
credit of the U.S.:
a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guazanteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
� c. Federal Financin@ Bank
i d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
�
f. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.3. �overnment guaranteed deUentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public
housing notes and bonds
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F. A ents:
E
In transactions where there is an agendenhancer (other than the Insurer), the trustee,
tender agent (if any), and paying agent (if any) must be commercial banks with trust
powers.
2. The remazketing agent must have trust povvers if they aze responsible for holding
moneys or receiving bonds. As an alternative, the documents may provide that if the
remarketing agent is removed, resigns or is unable to perform its duties, the trustee
riztst assume the responsibilities of remarketing agent until a substitute acceptable to
ttie Insurer is appointed.
:/7 ✓7"
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C` :"
• COMMITMEPI'I' '�O ISSU� A
FINAIo1CIAL GUARAIN�'Y INSURANCE POLICI'
Application No.: 1997-005853-01
Sale Date: September 1997 (t)
Program Type: Negotiated DP
�w� Re: $14,395,000 (est.) City of Clearwater, Florida, Gas System Revenue Refunding Bonds,
Series 1997B
(the "Obligations")
This commitment to issue a financial guaranty insurancs policy (the "Commitment")
dated September 3, 1997, constitutes an agreement between CITY OF CLEARWATER,
FLORIDA (the "Applicant") and MBIA Insurance Corporation (the °Insurer"), a stock insurance
company incorporated under the laws of the State of New Yorlc.
Based on an approved application dated September 3, 1997, the Insurer agrees, upon
satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date
or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insuranca
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 A�plicant, on the date
of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of
.195% of total debt service, premium rounded to the nearest thousand. The premium set out in
this paragraph shall be the total premium required to be paid on the Policy issued pursuant to
this Commitment.
2. The Obligations shall have received the unqualified opinion of bond counsel with
respect to the tax-exempt status of interest on the Obligations.
3. There shall have been no material adverse change in the Obligations or the
Resolution, �ond Ordinance, Trust Indenture or other official document authorizing the issuance
of the Obligations or in tlie 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 subsequentiy submitted to be a part of the application
to the Insurer.
5. No event shall have occurred which would allow any underwriter or any other
purchaser of the Obli�ations not to be required to purchase the Obligations at closing.
6. A Statement of Insurance satisfactory to the Insurer sha11 be printed on the
Obligations.
,� 7. Prior to the deli�ery of and payment for the Obligations, n�ne of the informatinn or
do�uments subrnitted as a part of the applicatian td the Insurer shall be determined ta contain
a�ny untcue or rnisle�ding statement of a m�terial fact or fail ta state a mttceriai fact required t�
be stateci therein or necess�ry in arder to m�ice the statements cdntained therein ndt inisle�ding.
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8, No cnaterial �dverse change affecting any security for the Obligations shall have
occurred prior to the delivery of and payment for the Obligations.
9. Tl�is Gommitment may be signed in counterpart by the parties hereto.
10. Compliance with the Insurer's General Document Provision (see attached).
11. Cnmpliance with the Insurer's 5tandard Conditions for Refundings (see attached).
Bated this 3rd day of September, 1997.
1l�FIA Itesurance Corpoa°ation
By G��C/,��< �� .
Assistan4 Secretary
� CI'd'it OF CLEARVVA'Y'ER, FI,ORIDA
By:
Title:
�
9�`�7
C
GENERAL DOCUMENT PROVISIONS
A, Notice ta the Insurer The basic legal documents must provide that any notices required to
be given by any party should also be given to the Insurer, Attn: Insured Portfolio
Management.
B. - Amendments. In the basic legal document, there are usually two methods of amendment.
s�� The first, which typically does not require the consent of the bondholders, is for
amendments which will cure anibiguiti�s, correct formal defects or add to the security of
the financing. The second, in which bondholder consent is a prerequisite, covers the more
substantive types of amendments. For all financings, the Insurer must be given notice of
any amendments that are of the first type and the Insurer's consent must be required for all
amendments of the second type. Al! documents must contain a provision which requires
copies of any amendments to such documents v�hich are consented to by the Insurer ta be
sent to Standard & Paor's.
C. Sunulemental Le�al Document. If the basic legal document provides for a supplemental
legal document to be issued for reasons other than (1) a refunding to obtain savings; or (2}
ihe issuance of additional bonds pursuant 4o an additional bonds test, there must be a
requirement that the Insurer's consent also be obtained piior to the issuance of any
additional bonds and/or execution of such supplemental legal document.
E: . D. �vents of Default and Remedies. All documents normally contain provisions which define
the events of default and which prescribe the remedies that may be eaercised upon the
occurrence of an event of default. At a minimum, events of default will be defined as
follows:
1. the issuer/obligor fails to pay principal when due;
2. the issuer/obligar fails to pay interest when due;
3. the issuer/obligor fails to observe any other covenant or condition of the document
and such failure continues for 30 days and
4. the issuer/obligor declares bankruptcy.
The Insurer, acting alone, shall have the right to direct all remedies in the event of a default. The
Insurer shall be recognized as the registered owner of each bond which iY insures for the purposes
of exercising all rights and privileges available to bondholders. For bonds which it insures, the
Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under
the same terms as a bondholder in accordance with applicable provisions of th� governing
documents: Other than the usual redemption provisions, any acceleration of principal payments
must be subject to the Insurer's prior written consent.
E. Defeasance requires ihe deposit of:
��1. Cash
2, U.S. Treasury Certificates, Nntes ra»td Bonds (including State ancl Lac�l Govemment
��`�
I �
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Series -- " SLGs")
3. Birect obligations of the Treasury which have'ueen stripped by the Treasury itself,
CATS, TIGRS and similar securities
4. Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP
strips which have been stripped by request to the Pederal Reserve Bank ofNew York in
book entry form aze acceptable.
5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If
however, the issue is anly rated by S&P (i.e., there is no Moody's rating), then the pre-
refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed
obligations, or AAA rated pre-refunded municipals to satisfy this condition.
.6,. Obligations issued by the following agenc:es which are backed by the full faith and
credit of the U.S.:
a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranieed certificates of beneficial ownership
b. Fanners Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financing Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guaranteed Title XI financing
f. U:S. Department of Housin� and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debenturey - U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds - U.S. government guaranteed public
housing notes and bonds
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F. Aeents:
1, In transactions where there is an agent/enhancer (other than the Insurer), the trustee,
tender agent (if any), and paying agent (if any) must be commercial banks with trust
powers.
2. The remarketing agent must have trust powers if they are responsible for holding
moneys or receiving bonds. As an alternative, the documents may provide that if the
remarketing agent is removed, resigns or is unable to perform its duties, the trustee
must assume the responsibilities of remazketing agent until a substitute acceptable to
the Insurer is appointed.
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STANDARD CONDITIONS FOR REFUNDINGS
A. Receipt by the Insurer of the final debt service schedule on the issue within three business
days from the sale date.
B. Receipt, satisfaatory review and subsequent oral approval by the Insurer at least ten days
in advance of closing of draft aopies of:
1. a verification by an independent CPA firm of the sufFiciency of the escrow to
timely retire the refunded bonds;
2. the escrow securities purchase contracts of SLG subscription forms or open
market confirmations; and,
3. the escrow agreement
Final and signed copies of all the above documents to Ue sent via overnight mail from
closing.
An independent CPA firm is defined as a licensed CPA firm acting at arms length of the
transaction on behalf of the bondhoiders. It may not be the underwriter, bond counsel or
financial adviser for the refunding issue. The firm must carry enors and omissions
insurance. The Insurer reserves the right to review the provider of the verification on a deal
by deal basis. .
C. Receipt by the Insurer at teast five business days prior to closing of a draft opinion from
Bond Counsel (or Special Tax Counsel) to the effect that the refunding bonds are being
issued in compliance with state law and that the interest on the refunding 6onds is tax-
exempt.
D. Receipt by the Insurer at least five business days prior to closing of a draft opinion from
Bond Counsel stating that the refunded bonds have been legally defeased. (This condition is
only applicable in those situations where the refunding issue is legally defeasing the
refunded issue.) Final executed copies of items C and D to be sent via overnight mail.
E. If the escrow agreement allows for the substitution of securities in the escrow account,
then it should be provided in the escrow agreement that no such substitution may occur
unless there has first been delivered to the escrow agendtrustee, (1) a CPA verification that
the escrow investments, as substituted, are su�cient to pay debt service, as it becomes due,
on the refunded bonds and (2) an opinion of nationally recognized bond counsel to the effect
that the substitution is permitted under the documents and the substitution has no adverse
effect on the tax-exempt nature of the refunding bonds. See 2 above for th� definition of an
independent CPA.
F. Escrow investments must be limited ta:
1. Cash
2. U.S. Treasury Certificates, Notes and Bonds (including State and Local
Government Series -- "SLGS").
3. Direct obligatit►ns of the Treasury which have been sfripped by the Treasury itself.
CATS, T'IGRS and similar securities.
q���
C
� 4. Resolution Fundin Co
g rp. (REFCORP) Only the interest component of
REFCORP strips which have been stripped by request to the Federal Reserve Bank of New
York in book entry form are acceptable.
5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If
however, the issue is only rated by S&P (i.e., there is no Moody's rating), 'then the pre-
refunded bonds must have been pre-refunded.with cash, direct U.S. or U.S. guaranteed
obligations, or AAA rated pre-refunded municipals to satisfy this condition.
6. Obligations issued by the following agencies which are backed by the full faith
and credit of the U.S.:
a. U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guazanteed certificates of beneficial ownership
b. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
c. Federal Financin� Bank
d. General Services Administration
Participation certificates
e. U.S. Maritime Administration
Guazanteed Title XI ianancing
f. U,S. Denartment of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures - U.S. government guaranteed
debentures
U.S. Public Housing Notes and Bonds -U.S. government guaranteed public
housing notes and bonds
G. If a forward supply contract is being executed in conjunction with the refunding (or
subsequent to the closing of the refunding transaction), the following conditions must also
be met:
1 The Insurer must review and approve the .forward sapply contract at least five
business days prior to closing (or after closing, at least five business days prior to execution
if not contemplated at the time of closing).
2 The forward supply contract must provide by its terms that the securities delivered
under the forward supply are su�cient (when taken with other funds remaining in the
escrow) as to amount and timeliness to retire the refunded bonds.
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3 The Insurer requires an opinion from a nationally recognized bankruptcy counsel
that the securities in escrow and payments to owners of refunded bonds will not constitute
assets of the fsc supplier and will not be subject to automatic stay in the event of bankru�tcy
andlor insolvency of the supplier.
4. The supplier of the securities delivered under the forward supply contract must
affirm in the contract that it has no rights to or interest in the monies or securities held in the
escrow.
5. The escrow agent must be acceptable to the Insurer. The Insurer reserves the right
to replace the escrow agent for cause.
6. See 6 above for investments permitted under the forward supply contract.
Investments must be non-callable.
7. The supplier should have no right to substitute the original escrow securities. The
supplier may substitute securities previously delivered by the supplier under the forward
supply contract only if:
a. The substituted securities mature on a date that is later than the previously
delivered securities would have matured; and
b. The suhstituted securities mature prior to the date needed to pay principal
and/or interest on ehe bonds.
8. Two days before each delivery date for the forward supply securities, the escrow
agent must notify ih�e Insurer in writing of the securities to be delivered, the maturity amount
of the securities and the maturity date.
9. T'he forward supply contract ca��►not be amended or modified without the Insurer's
written consent.
5/6/93
9�-�
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THE MBiA INSURANCE dORPORATTON INSUFtANCE POLICY
The follawing Womiarion has been furnisi��t by MBIA Insuruxe Corporation (the "Innuec") for use in il�is OfGcial Statement Reference is
to Appendix _ for a specimen of the Iluutec's poGc,y.
Tiie lnsure�'s polic,y unoondi6onalty and inevorably guarantas the full and complete payn�ent roquirod to be made by or on belialf of ti�e Issuer to
the Paying Agent or its suooessor of an amount aqual to (i) the principel of (either at the slaled maturity or by an advu�cement of maturity pursuant to
a mandatory sinldng fiuul peyment) and interest on, tlie Bonds as such paymeents shall bacome due bui sliall not be so paid (excYpt that in tlie event of
any �celeiation of tt�e due date of s�ch prinapal by rea�n of ma�latnry or optional mdemption or aocele`aiion resulting from det'ault or od�eawise,
ott�er tlian any advancement of maduity pwsuant to a mandatnry sinldng fiu►d payment, the payments guuantead by the �uet's polic,y shall be
made in �x3� acra�u�ts and at such rimes as such payn�ents of prinapral wouid have been due had theae not been any sxh aoceleration); and (ri) tlie
ntimbiuse�nt of any such payment wiich is su�t}y � from any owzier o� the Bonds pu�suant to a final judgne�t by a oou�t of
oom�rt j�isd'►dion tliat �ch paymeni constihrtes an avoidable pmSere� to �ch vwner wilhin the u�eaning of any applicable banluuptcy law (a
���ry.
�Le Inuue�s polic,y does not inAUe against loss of anY P�Y� Preminm which may at aay time be payable with n�pact to any Bond. The
In�'s polic.y does not, �der any anaun�ance, ia�ue a&vast 1� ielating to: () aptional or manclatory �ons (othes tk�w mandatory
�ang 5md iedem�dans); Cn� auY paycn�s to be made on an aoa�]erated basi� Cvi) payme� of the pucrl�ase prioe of Bonds upon tender by an
owme�'t}�a� or (rv) any Pid� relating to i7 ��Sh Cu►) ab�• 'I�e 7ns�ue�'s policy aLso dces not inAUe a�tiQSt nonpay�nt of prinapel of or
i�t on tLe Boffls m�lting from tl�e insolven�}', ne�igenoe or auy other �t or omission of the Paying Age�t or any alhea' paying ag�t for We
Bottds.
. Upon ieoeapt of bele�honic or �elc�rapluc nofioe, s�ch natic� �y oonfiitmad in wti6ng bY �ered or cefified mail, or upon ceoeipt of
vv�i4te� nobice by �sbexed or o�tified naail, by the Ins�uer from We PaY►ng Agent or any awnea of a Baud the �ryn�ent of an insured amovuit for
wlrich is th� d�, that �ch cacgrieed p�yn�ent has notbeea► made, the In� on ths due dafe af �h payment oc within one busine� day a8er reoeipt
af noti� of ����rent, whicl3ever is iatr�r, will make a�it �fu�s, in an �000uni with State Stre� Bank and Tnut Compauy, N.A, in
NewYo�c, NewYo�k, or its �r, �aentfor the gaymeut of any su� in�tted amamfs which aze then d�. Upon p�t aad �r
af sur�Bonds or p�V of� oth� pn�of of rnv�ip af the Bon�ls, togetl�er with auy apg►opciate inst�nYs of assignment to evidenoe lhe
a�ign�►ent of d�e in�d amo�mts d�e on the Bands as ane gaid by tt� In.s�u�ea; and appmpriate in�nun�nts to e� ttie a�oiNment of tYie Insurer as
a�nt far suct► awneas of ihe Bonds in anY le�i Proo�ding re�te� to Pay��t af inslued amovnts on the Bonds, such instruments being in a fom�
satisfa�ory to StateStceet Bank and Tnut Company, N.A, State Sheet Bank and Tnut Cou�pany, N.A shall disinuse to s�xh owners or the Payuig
� PaY� ofdye in�ced amounts due on such Bonds, le�s any anw�mt held by the Paying Agent for the payment of sach insu�cl amounts and
Ie�allqavaifable tt�'or.
,''�1Lc Ims►uer is tB�e pri�agal opecating �bsidiary o�MBIA Inc., a New Yodc Sta� Exd�ange lis�ed oump�►ny. MBtA Inc. is �t oblipated to pay
� ci� af oz daims against ti� Insuma: The In�uer is domiciled in the State of New York anci liou�rl to do � in and aa�Ct tn regulation
uuder the laws ofall 50 srat�, the Di�ict of Colim�bia, the Commo�s�ealth c�Pirato Riw, tt►e Co�nwYalth of the Nortlian Mariana lslands, the
V'iagin Islands ofthc United Sta�s and the Tercitory of Quam Tt�e Ins�uea has two Eurapean brancl�s, ome in ttae R�ublic ofFrange aad tt�e other in
yl� K.au�Ham af Spaia New Yodc t�as laws pcescn'bing cninimum capihal seqiri�n�eats, luniting cl�es and mnce�haflons of imrc�nis and
r�x�u;c;ng the approval af poficy rates ana forms. state laws als� regulate uae amamc of both the ag�ga.te anci indivi�al risls abac may be ins�,
ti� paymeat of divideads by the Insu�ea, cUanges in oo�rol and transac6ions among affdia�es. Addiflonalty, the Inau� is roquired to maintain
cantinge�x.y �esaves on its liabilities in oedain amo�uus and for oertain periods a�time.
As af Daoemlxr 31, 1946 the In�cer had admitted asse9s ��4.4 billion (audit�> tWal liabili6es af 53.0 billion (audit�, and wsal capitat aad
smpiu.s � 51.4 billion (audited) de4�minad in a000ida�e with stahriory a�ouming P� �'bed or pennittad by inaua�e regulatory
a�lhaaities, As of hme 30,1997, the Tns�uer had admitted as�ts of $4.8 billion (u�audite,d)> total liabili5ies of $3.2 billion (unauditern. and total rapitat
and auphu af 51.6 billion (�mauditad) determinad in a000rcianoe with stadrtory aocouoling p�cticrs pn�nbed or pamitted by insuatwe cegulatory
airti�oridies.
Fmil�rey capies af the Inwma's year ea� finuxaal �ate�nts prepeied in a000sdarAe with statia2ory a000iwting Pra�oes are available without
cbarge fmm t}� Insura. A oo�y of the Anm�al Report on Fomt 10�C of MB1A Tuc. is available �ivm flee Insurer or tt� S�eities and Exd�ange
Oam��ission. '!Le addc�ss �the Icuanee is 113 King StreeB, Arnxink, NewYosic l0504. The tei�ho� m�mber of the Insurer is (914) 273-4545.
Moody's Im�esto�s Seavioe, I�. ra�es the clain�s paying ability af tLe 1n�er «Aaa„
S1�ard8cPooe'sRatings Setvices, adivision �TheMeGraw-Hill Companies, Ina, rat�the c3eim�spayingatsility oftheInnue�'"AAA".
• 1�11W1111Y411171D Nlavawf L�C. aP1a.J I1G ��^'�9 `�"'° 7 lll ILLG /lOill W µt1t1f1���
Eac9i rdting af d�e InNn� shouid be evatuatad inde�}y. 'fl�e iatingS ae2lea We re�ve iahnS a�ncY's amart asse�ment of the
ar�vNune� of the Iaauer and its ability to pay claims on iL5 pulicies �' n�uuame. A�ry fiIIti�cx eac�lanation as In the significan� o� 11� above
c�n� n�aY tre ul�i°'od ooty fcom the �pli�ab3e rating a@e�.y.
'Ibe �bove ratin�s are not taoommeadations to buy, sell a Ibld thc Soa�,, �nd ax� ratiag.s may be a►bject ta �risun a vritbdrav�al ai any time
by d�e ratiag e9�sa. AnY ��vnevard te.vison or iviti�deawal of atry of't}� atwwe caling,s mr�Y bave an advcrse � on tt�e macket pcice of U�e
Bo�. 'ILe Ins�urr does nnt guaza�.y the ma�oet piioe a�f the Honds�oc.does$.guar.uuy: that:tI�.n#i�s�ar�B�nds nn'tl-net be.ma�ci or
`��'��oePcwidadbYthis Policy is notcan�eclby theFbcida Tnauanae C�racantyA�oaatiou aeaWdunderci�apter631, Florida Stw�s.
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FINANCIAL GUARANT�' INSURANCE POLICY
MBIA Insa�rance Corporation
Armonk, New Xork 10504
PolicyNo. (NUMBER]
IvIDIA Insuru►ce Co�poration (the "Insurer"), in considetarion of the payment of the premium and subject to the temis of this policy, he►�by
unconditionally and 'mevocably gua�a�itces to any owner, as he�einafter defined, of the following descdbed obligations, the fiill and complete payment
�equicedto be made by a on behalf ofthe Lssu� ta [INSERT NAME OF PAYING AGEIVTJ or its successor (th�'Paying AgenY� of an amount equal
to (ij the prmcipal of (either at the slated maturity or by any advancement of maturity pursuant w a mandatory sinlQng fund payme,nt) and 'mterest on,
the Qbligaliotu (as that tam is defined below) as such payments shall become due but shall not be so paid (except that in the ev�COf any acceleiation
cf 8he due daze of sudi prinoipal by �tson of mandafnry a optional redem�on or acoelerafion res�ilting &nm default or othawise, other than any
advm.o�a�t of maduity pucsuant to a mandatory sinldng fund payment, the paym�is guarantced l�creby shall be made in such amovnts and at such
cimes as such �ents of pru►c�al would have been due had thae not bee� any such acc�leratian); and (a� fl�e reimbucsen�ent of any such payment
whid► is asbsequ�tty �e�vaed f�t atty owner pu�rsuant to a fmal judgnent by a oourt of competent jurisdiction d�at sach paym�t constitemes an
avoidabk pref� to such owner within 4he meanfi�g of any applicable bantm�ptcy law. The amwmts referred to u► clauses () and (a� of the
� sentence shall be refared to hereut �llectively ac 9he "lnaued Amo�mts." "Obligations" shall mean;
���
[Y.�'�AL 1V.4,B�� ��'+ i�iJ�]
Upon t+e�i�pt oftelephonic or tetegaphic notice, such notice sut�quendy confmned an writing by �ed or oatified mail, oc upon receipt of written
Q� �Y� ���1, �Y the Insvcxr fin� Phe Paymg Ag�►t orazry own�r ofan Obligation the payme,nt ofan ins� Amount forwhich
i�then due, thatsuditequinedpaytneatb� nati� �nadr, the Iasu� an the due date ofsuch paymeat orwithin ane business day afterreceg�t ofn�tice
of suc� nonpaym�t, whicleeva is I�, will n�ake a deposit of fimcls, in an acccxant wilh State Sheet Bank and Tnut ComQany, N.A., in New York,
New Yaic, aa� ffi successar, sufficiart far the payment of any suc� LtAU�ed 1lmoiurts which aic th� due. Upon pres�tm�t and suaender of such
Obligations ot� gxirsentan�t of such ather proof of owneiship of the Obligations, togett►er with any appropriate mswments of assignment w evidence
dte �tetrt of tl�e in�tue� Amamffi due on si�e Obligations as aze paid by �ae In�umr, and aPPmp�ia� inshiunenis to effe�t ffie ag�spumrinent of the
Insiu�er as agr,ni for such aewaie�ss offhe t3bligavions in any legal p�g relateci to paymeart of tns�ned Amaunts on the Obligations, �uch inshuments
��m a fotm � tn State S9re�t Bank and Tivst ComFanR N.A., S�te Sh,re� Banlc xnd Tnut ComFanY, NA. shall disburse to surl� owners,
e Payittg t�ea�t p�aymecrt of the ins�d Amanets due on suc}► Qbligffiions, less any amount held by the Paying Agent for the gayment of such
L�s�ued Amtounts aad legally available ti�erefor. This policy does not uu�r� agauist lflss of any prepaymene premium which may � any time be payable
with � Do atry Obligation.
As usPd heccio, the tam "owna" shall mean the tegisbe�ed owner of any Obligation as indicated 'm the books maintained by the Paying Agent the
issttea; a tmy designee of the Tssuer for such pu�pose. The te�m owner shail not include the Lssuer or any pazty whose agreement wifh the Issuer
oorshibutes the untledyuig security for the Obligations.
Atty � of � a� the In�uer may be made to the Luums at its ofiices l� at 113 King Street, Armonk, New Yaic 10504 and such s�xvice
ofps�ooess s�all be valici and binding.
This policy is non�cancellable for any reason 'Ihe p►�nium on this �+licy is not n:fundable for any reason including the paymmt prior to maturity of
the Obligaiions.
7i�e insuiance pmvided by this policy is not covened by the Florida In.s�nance Gw3ranty Association creairxl under chapter 631, Florida Stawtes.
IN WTINFSS Wf�RFAF, the Insurer has caused this policy to bc execute� in f�imile on iIS t�ehalf by i1� duly authorized offic�s, tttis [DAY] day of
��� ��•
COUNT�RSIGNED:
Resldrnt Liansod Agent
a�t
^�ty, State
�
STD-R(5�.6
4195
10'�BIA Insurance Corp��°aHon
Pres' �
��'
Attcst:
Assistant Se�ry
9����
STATEMENT OFINSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a polic�� containing the following provisions, such policy
i�ein, an filc at [INSPRT NAME c��' TRUSTE�F C)R P4YI�G AGFNT I'�CI UDING C1TY STATI=].
The Insurer, in consideration of the pa}ment of the premium and subjec[ to the terms of this policy, hcreb}•
uncunditionally and irrevocably guarantees to an} o��ner, as hereinaf[er defined, of the folio�vin� described obli�ations, the
full and complete payment required to be made by or on behalf of the Issuer to [1NSERT NAME OP I f2USTEE OR
PAYING AGENTI or its successor (the "Paying AgenP') of an amount equal to {i) the principal of (either at the stated
maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations
(as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from
default or othenvise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had
there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequentfy recovered from
any owner 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. The amounts refened to in clauses (i) and
(ii) of the preceding sentence shall be referred to herein coi(ectively as the "Insured Amounts." "Obligations" shall mean;
jiNSERT I,EGAL TITL� OF BONDS. CENTERED AS FOLLOWS:1
j$ PAR AMOUNTI
ISSUER
(DESCRIVTION OF BONDSI
Upon receip[ 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 tnsurer from the Paying Agent or any
owner of an Obligation 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, witl make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New
York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together
with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Ob(igations as
are paid by th� Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such 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 Obligations, less any amount held by the
Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books
maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The teirn owner shall not include
the Issuer or any party whose agreement with the Issuer constitutes the underlying security for die Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at I 13 King Street, Armonk,
New York 10504 and such service of process shall be valid and binding.
This policy is non-cancellable for any reason. 17ie premium on this policy is not refundable for any reason including
the payment prior to maturity of the Obligations.
The insurance provided by this Policy is not covered by the Flonda Insurance Gu�ranty Association created under
chapter 631, Florida Statutes.
`
STD�R FL-1
lYIBIA Insurance Corpor�tion
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ADAI'1'IOIdAL PROVISIOEJS RE�iJ%i%ED BY ASIINICYPAL BOND iN8Ui2A1dCE
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PAYMENTS UIvDER Tf� POLICY
A In the event Qiat, on tlie se�ond Business Day, and ag,ain on the Business Day, prior to Uie payment date on the ObGgations, the Paying
t has not mceivcd sufficient moneys to pay all principal of and interest on Uie Obligations due on tl�e seoond follo�ving or fopo�ving, as die case
.`'. be, Btuuiess Day, tlie Paying Agent shall umnedialely notify Q�e Luwer or its designec: on the same Business Day by telephone or te[egapl�,
confirtned in �vriting by cegisten�! or ceNSed mail, of the amount of die de5cienc,y.
g, If tiie deficiency is made up in whole or in pazt prior to oron the payment date, the Paying Agent st�a11 s4 notify the I�isueror its designee.
C. In addition, if the Paying Agent has norice that any Bondholder has t�een �equi�xl to disgorge paymenLs of principal or intemst on the
Ot�lig�tion to a tn�stee in Banlaupicy or cmdiw[s or othas pursuant to a final judgment bY a oomt of competent jurisdiction that such payment
oonstidnFS aa avoidable pmfe�enoe ro such Bondholder within the meaning of acry applicable banlaupt�y 1aws, ti�► the Paying Agent shall notify the
I�unr or its de.vgnee of �ch fad by telephone or 4elegaphic notioe, confimxd in writinS by re�ste�ed or oe�tified maiL
D. The Paying Agc�mL is t�aeby inevocably dmgnated, appointed, direded aad authori�d to act as aUomey-in fad for Holders of the
Obligations asfolloa�s:
1. If and w the extent thae is a d�bicaency in amounLs re�uired to paY intem� on the Obli�tions, the Paying Agent st�a11(a) ex�e
and ckliver to S�te Street Bank and Tn�st Company, N.A, or its s�zoc�sois v� ttze Policy (the °Ins�uanoe Paying A�au�i, in form
satisfadnry ro ihe Ins�uanoe Paying Agea� an inst�ument appointiog the Innuea' as agent for �ch Holdeas in any legal Pmoeoding m,lated to
We paymrnt of �ct► inbe� and an assig�un�nt to the Ins�uer af the claims for interest to which such aefiaenc,y relates and wlrich are paid
by the I�; (b) re�ve as designee of the cespa� Holc3�is (aaxi not as Paying Ageat) in aomrdance with the tennr of the Policy
paymeai fmm the Ins�ua�aoe Paying ASent with respect to the claims fos � so as�ignod, and {c) disinuse the same to �ch �
Iiolde� and
2. If and to tLe eadent Qf a defiaency in an�auVs �z�ui�d to PaY Pri�ci�� a�t6e Obligations, it►e PayinB Agent sba1� (a) exearte and
deliver to the im�uanoe �'aying ASeat in foem �ory to the Ins�uacwe Fa)�►g A�t an in�cument ap�minring We Insiurr as agent for
srh Holda' in any legal Piooeeding re�a�►g to ittti. payment of s+xah prinapal a�l an ass►ginQ►ent to tl� Tnsurer of any of the Obligation
aure�daed tn the Ia�uance Paying ag�t of so much of the prinapal amamt Ux�eof as has �t greviously beea paid os for which moneys
are notlrldtty thePaying Agentaud availablefor such payme�t (but �ch assi� shaIl be deliveted only ifparycnentfrom ihe Insuranoe
payiog ABent is �ved), (b) a�ceive as desi� of ihe r�ive Holdees (and �t as Payeng Agent) in aa�rdance with the tenor of the
;� Policy pey�ntthes�orfrom the Iu�ranoe Paying Agent, and (c) di� tbe same to �h Holdas.
E, payme,nts with re�x to claims for iuterest on and principal of Wli�ions disL�used by the Paying Agent 9'rom ptoceeals of the Policy
s6all �t be oonsid�ecl W dischatge We obligation of the L�' with m�Ct to �a Obli�lions. aud the Tnuuer s�iall berome tt�e owner of s�ch
unpaid Obli�tion and claims for tl� i�. in a000idaix�e with the iamr af tt� a:�ignu�Y m�de to it under tlae pnnasions of this �on or
ofl�wise.
F. Ic�pactive ofwhedher any such assig_nment is exewted and delivea�ci, the Lss�' and the Paying Agent i�erebY ag�ee for the benefit of the
lnsutertbat: .
i, 'Ttic.y reooguiae that co the exient the Insurer makes payu�enLs, duectlY Qr i�lY (as U5' Pa5'u►g d►rouSil the PayinB Age�t)> on
a000uni a�princapal af or inter�t on She �ligarons, the Tnsarpr will be subro� to the rights of such Haldas to ceoeive the amamt of
such pcindpal and 'ante�4 from the issuer, with inteaest tlxaean as pnsvided and sois�y from ti�e sauoes statad in this Iiuie�ue azd the
Obli�ptioa� and
a. �rncy w;u aooaaingty pay co th� r�mx tlne am�nc of sua► priaapat and i� C�� p� ana iat�� re��d �'
subparagraph (u) �'the fitst �h af the Policy, w}ridi priaGipal aced inke�sk shall be � past due and �t ta have baen gaid), with
iufe�t tt►e�eon as p�wided in tLis � ancl ti� Ohli�tion, b�d only fmna tl�e sauoes acrd in tt�e manver gcvvidad t�rein for t6e
paymeat af prinapal a� and i� on the Obligations to Holcle�s, and will � treat t}►� f��' as the ativner af �ch riglits to the
acno�mt of such pcinc�pal a�! inta�
G. In ooanodion with We i�uame afadditional Obli�iions, tt�e Is�sver shall �liv�' to ti�e In�uer a oopy af tl�e disd�re doam�t, if anY,
arculamdwith tespe�ctfn �chaddidonal Obligitioas.
H. � of any ameodme�ts made tn the doaun�Ls aceartad in conacxtion vvitli the i�e a�'U�e �bligations �� a� oansent�l to by
the Taaua'shallbesentto Standan! &Poors Cocpotation.
L Tl�elrmuershalltaoeiv�nodoeafthe�►�remarralt�thePayingAgr��mclti��po`u�eutofa��oo�sorthaefn.
Y. Tt�eImumrshallieoeiveaop+es�allnotioesmrndmdtobedelin,r�xitinEaadho�dasa�d,onananm�albaas,oapi�sdthels�a�a's�ited
�'�u�cial � and An.mm1 �ud�t.
� 2�',oe� Aty notioe t}raf ia rocNicfld to be gvcn te a iwlder of tl�e Obti�tion a ta tI� Paying Ag� Pw�na� � t� �rrc stral! atao be
prov,dod � tLe r,� Au notias �rad to t�e ��o the L�urex w�dc� the Yndc� s�alt � i� amnng ana sfrat� bc s�ta t�+ �gs� a'
cafdiod ma� � t� MB1A 1rm�rarroe C�Srpo+atioe,113 2�ing �troel. Ar�t�o�s, Nes�`Ya�Sc 105tld t1�i�tion: �im+ati�
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