HomeMy WebLinkAboutR-02-0797J-02-741
7/9/02
RESOLUTION NO.0 2 — 797
A RESOLUTION OF THE CITY OF MIAMI, FLORIDA, AUTHORIZING THE
ISSUANCE OF NOT TO EXCEED $160,000,000 IN AGGREGATE PRINCIPAL
AMOUNT OF CITY OF MIAMI, FLORIDA LIMITED AD VALOREM TAX
BONDS, SERIES 2002 (HOMELAND DEFENSE/ NEIGHBORHOOD CAPITAL
IMPROVEMENT PROJECTS), TO PAY FOR THE COSTS OF ACQUISITION,
CONSTRUCTION AND EQUIPPING OF CERTAIN HOMELAND
DEFENSE/NEIGHBORHOOD CAPITAL IMPROVEMENTS WITHIN THE CITY;
PROVIDING THAT SUCH LIMITED AD VALOREM TAX BONDS SHALL NOT
CONSTITUTE GENERAL OBLIGATIONS OF THE CITY BUT SHALL BE
SPECIAL LIMITED OBLIGATIONS PAYABLE FROM A LIMITED AD
VALOREM TAX TO BE LEVIED ANNUALLY ON ALL TAXABLE PROPERTY
IN THE CITY, WHICH LIMITED AD VALOREM TAX SHALL BE PLEDGED
FOR THE PAYMENT OF THE PRINCIPAL OF AND THE INTEREST ON SUCH
LIMITED AD VALOREM TAX BONDS; PROVIDING A SECONDARY SOURCE
OF PAYMENT FOR SUCH LIMITED AD VALOREM TAX BONDS; MAKING
CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH;
DELEGATING TO THE CITY MANAGER THE DETERMINATION OF
CERTAIN MATTERS AND DETAILS CONCERNING THE BONDS;
AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; APPROVING THE
FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND
PURCHASE AGREEMENT IN CONNECTION THEREWITH; APPROVING
UNCERTIFICATED, BOOK -ENTRY ONLY REGISTRATION OF SAID BONDS
WITH THE DEPOSITORY TRUST COMPANY; DELEGATING TO THE CITY
MANAGER AUTHORITY TO NEGOTIATE AND OBTAIN A MUNICIPAL
BOND INSURANCE POLICY TO INSURE SAID BONDS AND TO EXECUTE
AND DELIVER ANY RELATED AGREEMENTS; APPOINTING A PAYING
AGENT AND BOND REGISTRAR; APPROVING THE FORM AND
AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT
AND REGISTRAR AGREEMENT; PROVIDING FOR A PRELIMINARY
OFFICIAL STATEMENT AND AN OFFICIAL STATEMENT AND THE
SELECTION OF A FINANCIAL PRINTER THEREFOR; COVENANTING TO
PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS
IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE
15c2-12 AND APPROVING THE FORM AND AUTHORIZING THE EXECUTION
AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT WITH
RESPECT THERETO; AUTHORIZING ALL REQUIRED ACTIONS; AND
PROVIDING AN EFFECTIVE DATE.
fi T A C to , T
CITY C0
MEET _OR
j I_j !. Q 9 2002
Resolution No.
02- 797
WHEREAS, the City Commission (the "Commission") of the City of Miami, Florida (the
"City") enacted Ordinance No. 12137 on October 11, 2001 (the "Initial Ordinance" and, together
with this Resolution, the "Bond Resolution") providing, subject to the bond referendum described
below, for the issuance of bonds of the City in a principal amount not to exceed Two Hundred
Fifty-five Million Dollars (the "Voter Approved Bonds") to be payable from ad valorem taxes to
be levied on all taxable property in the City provided that the millage rate for the Voter Approved
Bonds, together with all other Debt Millage (as defined herein), does not exceed 1.218 mills to pay
for homeland security, neighborhood improvements, capital projects and infrastructure
improvements within the City as therein described (the "Homeland Defense/Neighborhood
Capital Improvements Projects"), authorizing the Homeland Defense/Neighborhood Capital
Improvements Projects and calling for a bond referendum to determine whether the qualified
electors of the City approve the issuance of the Voter Approved Bonds (it being understood that
the millage rate limitation described above applies only to the Voter Approved Bonds, and does
not apply to, or in any way affect, the City's obligation to assess, levy and collect ad valorem taxes,
without limitation as to rate or amount, on all taxable property within the corporate limits of the
City, for the payment of the principal of and interest on the City's full faith and credit general
obligation bonds); and
WHEREAS, by bond referendum duly held on November 13, 2001 in accordance with
applicable laws of the State of Florida, the issuance of the Voter Approved Bonds was approved by
the qualified electors of the City; and
WHEREAS, the City Clerk on November 14, 2001 accepted the certification by the
Miami -Dade County Canvassing Board of the results of such bond referendum approving the
issuance of the Voter Approved Bonds; and
WHEREAS, the Commission has determined that it is in the best interest of the City to
proceed at this time with the issuance of the Series 2002 Bonds (as defined herein) to finance a
portion of the costs of the Homeland Defense/Neighborhood Capital Improvements Projects; and
WHEREAS, the Initial Ordinance provided that the details and other matters with respect
to the issuance of the Voter Approved Bonds would be determined by resolution adopted by the
Commission prior to the time of sale of the Voter Approved Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF MIAMI, FLORIDA:
Section 1. Definitions. As used herein, unless the context otherwise requires:
"Accreted Value" means, as of any date of computation with respect to any Capital
Appreciation Bond, an amount equal to the principal amount of such Series 2002 Bond (the
principal amount on the date of original issuance), plus the interest accrued on such Series 2002
Bond from the date of original issuance to the interest payment date next preceding the date of
computation or the date of computation if an interest payment date, compounded periodically at
the times provided for in the Bond Purchase Agreement, and if such date of computation is not an
interest payment date, a portion of the difference between the Accreted Value as of the
immediately preceding interest payment date (or the date of original issuance if such date of
02- 797
computation is prior to the first interest payment date succeeding the date of original issuance) and
the Accreted Value as of the immediately succeeding interest payment date, calculated based on
the assumption that Accreted Value accrues during any period in equal daily amounts on the basis
of a year of twelve 30 -day months.
"Act" means the Constitution and laws of the State of Florida, including, without limitation,
Article VII, Section 12 of the Constitution, Chapter 166, Florida Statutes, and, to the extent not
inconsistent with and not repealed by the provisions of Section 166.021, Florida Statutes, the
Charter of the City of Miami.
"Amortization Installments" means the funds to be deposited in the Bond Amortization
Account in any given Fiscal Year for the payment at maturity or redemption of a portion of Term
Bonds, as established by the City prior to the delivery of the Series 2002 Bonds.
"Authorized Depository" means any bank, trust company, national banking association,
savings and loan association, savings bank or other banking association selected by the City as a
depository, which is authorized under Florida law to be a depository of municipal funds and which
has complied with all applicable state and federal requirements concerning the receipt of City
funds.
`Bond Amortization Account' means an account established with the Paying Agent for
the deposit of Amortization Installments, if any.
"Bond Purchase Agreement" means the Bond Purchase Agreement with respect to the
Series 2002 Bonds between the Underwriters and the City.
"Bond Resolution" means collectively, the Initial Ordinance and this Resolution.
"Bond Registrar" means initially Wachovia Bank, National Association and thereafter, the
City or any other agent designated from time to time by the City, by resolution, to maintain the
registration books for the Series 2002 Bonds issued hereunder or to perform other duties with
respect to registering the transfer of the Series 2002 Bonds.
"Bondholder", "holder" or "registered owner" means the person in whose name any Series
2002 Bond is registered on the registration books maintained by the Bond Registrar.
"Capital Appreciation Bonds" means any Series 2002 Bond issued under this Resolution as
to which interest is compounded periodically on the interest payment dates designated for
compounding in the Bond Purchase Agreement for such Series 2002 Bonds and payable in an
amount equal to the then current Accreted Value to the date of maturity or redemption prior to
maturity as designated in such Bond Purchase Agreement and which may be either Serial Bonds or
Term Bonds.
"City" means the City of Miami, Florida.
"City Attorney" means the City Attorney of the City or his or her designee.
2
e)
"City Clerk" means the City Clerk or his or her designee or the officer succeeding to his or
her principal functions.
"City Manager" means the City Manager or his or her designee or the officer succeeding to
his or her principal functions.
"Code" means the Internal Revenue Code of 1986, as amended, and all temporary,
proposed or permanent implementing regulations promulgated or applicable thereunder.
"Commission" means the City Commission of the City.
"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement
substantially in the form attached to this Resolution as Exhibit "D" hereto to be delivered by the
City in accordance with Section 15 of this Resolution.
"Current Interest Bonds" means Series 2002 Bonds the interest on which is periodically
payable to the Bondholder on the interest payment dates with respect to the Series 2002 Bonds
rather than only at the maturity or redemption thereof.
"Debt Millage" means the ad valorem tax millage rate levied with respect to a voter
approved bond referendum, excluding the Voter Approved Bonds.
"DTC" means The Depository Trust Company, New York, New York, its successors and
assigns.
"Finance Director" means the Director of Finance of the City or his or her designee or the
officer succeeding to his or her principal functions.
"Financial Advisor" means collectively Dunlap & Associates, Inc. and Fidelity Financial
Services, L.C.
"First Union Escrow Agreement" means that certain Escrow Agreement dated as of March
17, 1997, by and among First Union National Bank of Florida (now known as Wachovia Bank,
National Association), the Oversight Board, acting through its committee, the Fiscal Sufficiency
Advisory Board, and the City, as the same may be supplemented and amended.
"Fiscal Year" means the period commencing on October 1 of each year and ending on the
succeeding September 30, or such other consecutive 12 -month period as may hereafter be
designated as the fiscal year of the City.
"Government Obligations" means:
(a) direct obligations of, or obligations guaranteed as to timely payment by, the
United States of America;
(b) Any bonds or other obligations of any state of the United States of America
or of any agency, instrumentality or local governmental unit of any such state (i) which are
not callable prior to maturity or as to which irrevocable instructions have been given to the
3 02- 797
trustee of such bonds or other obligations by the obligor to give due notice of redemption
and to call such bonds for redemption on the date or dates specified in such instructions, (ii)
which are secured as to principal and interest and redemption premium, if any, by a fund
consisting only of cash or obligations of the character described in clause (a) hereof which
fund may be applied only to the payment of such principal of and interest and redemption
premium, if any, on such bonds or other obligations on the maturity date or dates thereof or
the redemption date or dates specified in the irrevocable instructions referred to in
subclause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and
interest on the obligations of the character described in clause (a) hereof which have been
deposited in such fund along with any cash on deposit in such fund are sufficient to pay
principal of and interest and redemption premium, if any, on the bonds or other obligations
described in this clause (b) on the maturity date or dates thereof or on the redemption date
or dates specified in the irrevocable instructions referred to in subclause (i) of this clause
(b), as appropriate;
(c) Evidences of indebtedness issued by the Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation (including participation certificates), Federal
Financing Banks, or any other agency or instrumentality of the United States of America
created by an act of Congress provided that the obligations of such agency or
instrumentality are unconditionally guaranteed as to timely payment by the United States
of America or any other agency or instrumentality of the United States of America or of
any corporation wholly-owned by the United States of America; and
(d) Evidences of ownership of proportionate interests in future interest and
principal payments on obligations described in clause (a) hereof held by a bank or trust
company as custodian.
"Homeland Defense/Neighborhood Capital Improvements Projects" means the portion of
the public safety and neighborhood capital improvements within the City, described in or provided
for in the Initial Ordinance, to be funded in whole or in part with the proceeds of the Series 2002
Bonds, as determined by the City.
"Initial Ordinance" means Ordinance No. 12137 enacted by the Commission on October
11, 2001 providing for the issuance of the Voter Approved Bonds, authorizing the Homeland
Defense/Neighborhood Capital Improvements Projects and calling for a bond referendum.
"Intent Resolution" means Resolution No. 02-41 adopted by the Commission on January
10, 2002 declaring the official intent of the City to issue bonds in accordance with the
requirements of the Code in a principal amount not to exceed $30,000,000 for Homeland
Defense/Neighborhood Capital Improvement Projects.
"Limited Ad Valorem Tax" means an ad valorem tax levied by the City on all the taxable
property within the City (excluding exemptions as provided by applicable law) for the purpose of
paying the principal of, Accreted Value (with respect to Capital Appreciation Bonds), redemption
premium, if any, and interest (with respect to Current Interest Bonds) on the Voter Approved
Bonds; provided, however, that such ad valorem tax shall be levied at such millage rate, that when
added together with the City's other Debt Millage, results in an aggregate millage rate that does
4
02- 797
not exceed 1.218 mills (it being understood that this millage rate limitation applies only to the
Voter Approved Bonds, and does not apply to, or in any way affect, the City's obligation to assess,
levy and collect ad valorem taxes, without limitation as to rate or amount, on all taxable property
within the corporate limits of the City, for the payment of the principal of and interest on the City's
full faith and credit general obligation bonds).
"Mayor" means the Mayor of the City or in his absence or inability to perform, such
member of the Commission as may be appointed as acting Mayor of the City.
"Maximum Annual Debt Service" means for any Fiscal Year, the largest amount required
to be deposited in the Principal and Interest Account and the Bond Amortization Account, if any,
from the sum of.
(1) The amount required to pay the interest coming due on the Current Interest
Bonds during such Fiscal Year;
(2) The amount required to pay the principal of Serial Bonds and Term Bonds,
and the Accreted Value of Capital Appreciation Bonds for such Fiscal Year; and
(3) The amount required to pay the Amortization Installments for all Term
Bonds for such Fiscal Year.
"Official Statement" means that certain Official Statement with respect to the issuance of
the Series 2002 Bonds, as such Official Statement shall be approved by the City Manager in
accordance with the provisions of this Resolution.
"Outstanding" or "Series 2002 Bonds outstanding" means all Series 2002 Bonds which
have been issued pursuant to this Resolution except:
(a) Series 2002 Bonds canceled after purchase in the open market or because of
payment at or redemption prior to maturity;
(b) Series 2002 Bonds for the payment or redemption of which cash funds or
Government Obligations or any combination thereof shall have been theretofore
irrevocably set aside in a special account with the Paying Agent (other than the City) or
other Authorized Depository, whether upon or prior to the maturity or redemption date of
any such Series 2002 Bond, in an amount which, together with earnings on such
Government Obligations, will be sufficient to pay the principal of, Accreted Value (with
respect to the Capital Appreciation Bonds) and interest (with respect to Current Interest
Bonds) and redemption premium, if any, on such Series 2002 Bonds at maturity or upon
their earlier redemption; provided that, if such Series 2002 Series 2002 Bonds are to be
redeemed before the maturity thereof, notice of such redemption shall have been given
according to the requirements of this Resolution or irrevocable instructions directing the
timely giving of such notice and directing the payment of the principal of, Accreted Value
(with respect to the Capital Appreciation Bonds) and interest (with respect to Current
Interest Bonds) on such Series 2002 Bonds at such redemption dates shall have been given
to the Paying Agent;
5 O ') -
(c) Series 2002 Bonds which are deemed paid pursuant to Section 5.G hereof;
and
(d) Series 2002 Bonds in exchange for or in lieu of which other Series 2002
Bonds have been authenticated and delivered pursuant to this Resolution.
"Paying Agent" means initially Wachovia Bank, National Association and thereafter, the
City or any other agent which is an Authorized Depository, designated from time to time by the
City, by resolution, to serve as a Paying Agent for the Series 2002 Bonds issued hereunder that
shall have agreed to arrange for the timely payment of the principal of, Accreted Value (with
respect to Capital Appreciation Bonds) redemption premium, if any, and interest (with respect to
Current Interest Bonds) on the Series 2002 Bonds to the registered owners thereof, from funds
made available therefor by the City.
"Principal and Interest Account" means the account established with the Paying Agent
pursuant to Section 8 hereof.
"Preliminary Official Statement" means the Preliminary Official Statement with respect to
the issuance of the Series 2002 Bonds, to be dated as of the date of its distribution.
"Resolution" means this resolution authorizing the issuance of the Series 2002 Bonds, as
amended from time to time to the extent permitted hereby.
"Serial Bonds" means all Series 2002 Bonds other than Term Bonds.
"Series 2002 Bond" or "Series 2002 Bonds" mean the City of Miami, Florida Limited Ad
Valorem Tax Bonds, Series 2002 (Homeland Defense/Neighborhood Capital Improvements
Projects), issued hereunder in an aggregate principal amount not to exceed $160,000,000.
"Term Bonds" means Series 2002 Bonds for which Amortization Installments are
established on or before the date of delivery of the Series 2002 Bonds in accordance with the
provisions of this Resolution.
"Underwriters" means, collectively, Morgan Stanley & Co. Incorporated, JP Morgan, UBS
PaineWebber Incorporated, Salomon Smith Barney, Inc., Jackson Securities Inc. and Lehman
Brothers.
Words in this Resolution importing singular numbers shall include the plural number in
each case and vice versa, and words importing persons shall include firms, corporations or other
entities including governments or governmental bodies. Words of the masculine gender shall be
deemed and construed to include correlative words of the feminine and neuter genders.
Section 2. Findings and Determinations. It is hereby ascertained, determined and
declared that:
A. The recitals to this Resolution are hereby incorporated herein as findings and
determinations.
6 02-M' 797
B. The Homeland Defense/Neighborhood Capital Improvements Projects consist
solely of "capital projects" as such term is used in Article VII, Section 12 of the Constitution of the
State of Florida.
C. On January 10, 2002 the Commission adopted the Intent Resolution.
D. The City will have advanced funds for costs incurred with respect to a portion the
Homeland Defense/Neighborhood Capital Improvements Projects prior to the issuance of the
Series 2002 Bonds.
E. In accordance with Section 218.385(1), Florida Statutes, as amended, the
Commission hereby finds, determines and declares, that a negotiated sale of the Series 2002 Bonds is
in the best interest of the City for the following reasons:
(i) the complex structure and timing of the issuance of the Series 2002 Bonds
require extensive planning, and it is not practical for the City and the Financial Advisor to
engage in such planning within the time constraints and uncertainties inherent in a
competitive bidding process; and
(ii) it is necessary to be able to sell the Series 2002 Bonds when market
conditions are most favorable in order to attain the most favorable interest rates on the Series
2002 Bonds; the vagaries of the current and near future municipal bond market demand that
the Underwriters have the maximum time and flexibility to price and market the Series 2002
Bonds, in order to obtain the most favorable interest rates available.
Section 3. Contract. In consideration of the acceptance of the Series 2002 Bonds
authorized to be issued hereunder by those who shall hold the same from time to time, this
Resolution shall be deemed to be and shall constitute a contract between the City, the Bondholders,
the Bond Registrar and the Paying Agent. The covenants and agreements herein set forth to be
performed by the City shall be for the equal benefit, protection and security of the Bondholders,
and all Series 2002 Bonds shall be of equal rank and without preference, priority or distinction
over any other thereof, except as expressly provided herein.
Section 4. Authorization of the Series 2002 Bonds, Sale and Award of the Series 2002
Bonds.
A. Subject and pursuant to the provisions of the Initial Ordinance and this Resolution,
a first series of Voter Approved Bonds of the City to be known as "City of Miami, Florida, Limited
Ad Valorem Tax Bonds, Series 2002 (Homeland Defense/Neighborhood Capital Improvement
Projects)" are hereby authorized to be issued in an aggregate principal amount of not exceeding
One Hundred Sixty Million Dollars ($160,000,000) for the purpose of paying the costs of the
Homeland Defense/Neighborhood Capital Improvements Projects and to pay costs of issuance of
the Series 2002 Bonds. The City Manager shall determine the aggregate principal amount of the
Series 2002 Bonds to be issued and may determine to issue the Series 2002 Bonds at one time or as
needed. In the event that Capital Appreciation Bonds or similar bonds are issued, only the original
principal amount of such Capital Appreciation Bonds shall be deemed issued on the date of
issuance for the purposes of the maximum amount of Series 2002 Bonds authorized to be issued
under the Bond Resolution.
0- 797
B. The City Manager is hereby authorized and directed to award the Series 2002
Bonds to the Underwriters at a purchase price of not less than ninety-nine percent (99%) (inclusive
of underwriters' discount, but not inclusive of original issue discount; the original issue discount may
be such as is necessary to market and sell the Series 2002 Bonds) of the original principal amount of
the Bonds and at a true interest cost rate ("TIC") not to exceed six percent (6.0%) (the "Maximum
TIC") per annum. The Series 2002 Bonds shall be dated such date, shall be issued in such principal
amount, shall bear interest from the date thereof, payable on the first day of January and July of
each year (with respect to Current Interest Bonds), commencing on such date, at the rates, and
shall mature on the first day of January of each year in accordance with the maturity schedule, but
not later than thirty (30) years from their date of issuance, be issued as either Current Interest
Bonds or Capital Appreciation Bonds and as Serial Bonds and/or Term Bonds and, if such Series
2002 Bonds are issued as Term Bonds, be subject to such Amortization Installments by operation
of the Bond Amortization Account, all as such dates, principal amount, rates, Accreted Values,
maturity schedule and Amortization Installments may be approved and determined by the City
Manager and set forth in the Bond Purchase Agreement, with the execution and delivery of the
Bond Purchase Agreement as described in Section 6 hereof being conclusive evidence of the
City's approval, provided that the TIC shall not exceed the Maximum TIC.
Section 5. Terms, Redemption and Form of Series 2002 Bonds.
A. The Series 2002 Bonds shall be issued as fully registered bonds in the
denomination of $5,000 each or any integral multiple thereof and shall be numbered consecutively
from 1 upward preceded by the letter "R" with respect to Current Interest Bonds, and preceded by
the letters "RCA" with respect to Capital Appreciation Bonds. The principal of and redemption
premium, if any, on the Series 2002 Bonds shall be payable upon presentation and surrender at the
designated office of the Paying Agent. Interest on the Current Interest Bonds shall be paid by
check or draft drawn upon the Paying Agent and mailed to the registered owners of such Series
2002 Bonds at the addresses as they appear on the registration books maintained by the Bond
Registrar at the close of business on the 15th day (whether or not a business day) of the month next
preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange
of such Series 2002 Bonds subsequent to such Record Date and prior to such interest payment date,
unless the City shall be in default in payment of interest due on such interest payment date;
provided, however, that (i) if ownership of Series 2002 Bonds is maintained in a book -entry only
system by a securities depository, such payment may be made by automatic funds transfer (wire)
to such securities depository or its nominee or (ii) if such Series 2002 Bonds are not maintained in
a book -entry only system by a securities depository, upon written request of the holder of
$1,000,000 or more in principal amount of Series 2002 Bonds, such payments may be made by
wire transfer to the bank and bank account specified in writing by such holder on or prior to the
Record Date (such bank being a bank within the continental United States), if such holder has
advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or
authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such
holder. In the event of any default in the payment of interest, such defaulted interest shall be
payable to the persons in whose names such Series 2002 Bonds are registered at the close of
business on a special record date for the payment of such defaulted interest as established by notice
deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the
Series 2002 Bonds not less than fifteen (15) days preceding such special record date. Such notice
8 02- 797
shall be mailed to the persons in whose names the Series 2002 Bonds are registered at the close of
business on the fifth day (whether or not a business day) preceding the date of mailing.
B. The Series 2002 Bonds shall be executed in the name of the City by the City
Manager and the seal of the City shall be imprinted, reproduced or lithographed on the Series 2002
Bonds and attested to by the City Clerk. In addition, the City Attorney or any Assistant City
Attorney shall sign the Series 2002 Bonds, showing approval as to the form and correctness
thereof. The signatures of the City Manager, the City Clerk and the City Attorney on the Series
2002 Bonds may be by facsimile. If any officer whose signature appears on the Series 2002 Bonds
ceases to hold office before the delivery of the Series 2002 Bonds, his signature shall nevertheless
be valid and sufficient for all purposes. In addition, any Series 2002 Bond may bear the signature
of, or may be signed by, such persons as at the actual time of execution of such Series 2002 Bond
shall be the proper officers to sign such Series 2002 Bond although at the date of such Series 2002
Bond or the date of delivery thereof such persons may not have been such officers.
C. Only such of the Series 2002 Bonds as shall have endorsed thereon a certificate of
authentication substantially in the form hereinafter set forth in Section 5.K hereof, duly manually
executed by the Bond Registrar, shall be entitled to any right or benefit under the Bond Resolution.
No Series 2002 Bond shall be valid or obligatory for any purpose unless and until such certificate
of authentication shall have been duly executed by the Bond Registrar, and such certificate of the
Bond Registrar upon any such Series 2002 Bond shall be conclusive evidence that such Series
2002 Bond has been duly authenticated and delivered under this Resolution. The Bond Registrar's
certificate of authentication on any Series 2002 Bond shall be deemed to have been duly executed
if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same
officer sign the certificate of authentication on all of the Series 2002 Bonds that may be issued
hereunder at any one time. The foregoing notwithstanding, if at any time, the City serves as the
Bond Registrar under the Bond Resolution, the Series 2002 Bonds shall be authenticated by the
manual signature of the Finance Director or his designee, and the registered owner of any Series
2002 Bond so authenticated shall be entitled to the benefits of the Bond Resolution.
D. Any Series 2002 Bond may be transferred upon the registration books maintained
by the Bond Registrar upon delivery thereof to the designated office of the Bond Registrar
accompanied by a written instrument or instruments of transfer in form and with guaranty of
signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his
attorney-in-fact or legal representative, containing written instructions as to the details of the
transfer of such Bond, along with the social security number or federal employer identification
number of such transferee. In all cases of a transfer of a Series 2002 Bond, the Bond Registrar
shall at the earliest practical time in accordance with the terms hereof enter the transfer of
ownership in the registration books and shall deliver in the name of the new transferee or
transferees a new fully registered Series 2002 Bond or Series 2002 Bonds of the same maturity and
of authorized denomination or denominations, for the same aggregate principal amount and
payable from the same source of funds. Series 2002 Bonds may be exchanged at the office of the
Bond Registrar for a like aggregate principal amount of Series 2002 Bonds, of other authorized
denominations of the same series and maturity. The City and the Bond Registrar may charge the
Bondholder for the registration of every transfer or exchange of a Series 2002 Bond an amount
sufficient to reimburse them for any tax, fee or any other governmental charge required (other than
9 02- 797
by the City) to be paid with respect to the registration of such transfer or exchange, and may
require that such amounts be paid before any such new Series 2002 Bond shall be delivered.
The City, the Bond Registrar, and the Paying Agent may deem and treat the registered
owner of any Series 2002 Bond as the absolute owner of such Series 2002 Bond for the purpose of
receiving payment of the principal thereof, Accreted Value (with respect to Capital Appreciation
Bonds) and the interest (with respect to Current Interest Bonds) and redemption premium, if any,
thereon. The Series 2002 Bonds may be exchanged at the office of the Bond Registrar for a like
aggregate principal amount of Series 2002 Bonds or other authorized denomination of the same
series and maturity.
E. If any Series 2002 Bond is mutilated, destroyed, stolen or lost, the City or its agent
may, in its discretion (i) deliver a duplicate replacement Series 2002 Bond, or (ii) pay a Series
2002 Bond that has matured or is about to mature. A mutilated Bond shall be surrendered to and
canceled by the Bond Registrar. The Bondholder must furnish the City and the Bond Registrar
proof of ownership of any destroyed, stolen or lost Series 2002 Bond; post satisfactory indemnity;
comply with any reasonable conditions the City and the Bond Registrar may prescribe; and pay the
City's and the Bond Registrar's reasonable expenses.
Any such duplicate Series 2002 Bond shall constitute an original contractual obligation on
the part of the City whether or not the destroyed, stolen or lost Series 2002 Bond be at any time
found by anyone, and such duplicate Series 2002 Bond shall be entitled to equal and proportionate
benefits and rights as to lien on, and source of payment of and security for payment from, the funds
pledged to the payment of the Series 2002 Bond so mutilated, destroyed, or stolen or lost.
F. The Series 2002 Bonds may be subject to redemption prior to their maturity at such
times and in such manner as set forth in the Bond Purchase Agreement and approved by the City
Manager pursuant to the authority described herein. Notice of redemption shall be given by
deposit in the U.S. mails of a copy of a redemption notice, postage prepaid, at least thirty (30) days
before the redemption date to all registered owners of the Series 2002 Bonds or portions of the
Series 2002 Bonds to be redeemed at their addresses as they appear on the registration books to be
maintained in accordance with the provisions hereof. Failure to mail any such notice to a
registered owner of a Series 2002 Bond, or any defect therein, shall not affect the validity of the
proceedings for redemption of any Series 2002 Bond or portion thereof with respect to which no
failure or defect occurred.
Such notice shall set forth the date fixed for redemption, the rate of interest borne by each
Series 2002 Bond being redeemed, the name and address of the Bond Registrar and Paying Agent,
the redemption price to be paid and, if less than all of the Series 2002 Bonds then outstanding shall
be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of
such Series 2002 Bonds to be redeemed and, in the case of Series 2002 Bonds to be redeemed in
part only, the portion of the principal amount thereof to be redeemed. If any Series 2002 Bond is to
be redeemed in part only, the notice of redemption which relates to such Bond shall also state that
on or after the redemption date, upon surrender of such Series 2002 Bond, a new Series 2002 Bond
or Series 2002 Bonds in a principal amount equal to the unredeemed portion of such Series 2002
Bond will be issued.
10 02->- 797
Any notice mailed as provided in this section shall be conclusively presumed to have been
duly given, whether or not the owner of such Series 2002 Bond receives such notice.
The Bond Registrar shall not be required to transfer or exchange any Series 2002 Bond
after the mailing of a notice of redemption nor during the period of fifteen (15) days next preceding
mailing of a notice of redemption.
G. Notice having been given in the manner and under the conditions provided in
Section 5.F above, the Series 2002 Bonds or portions of Series 2002 Bonds so called for
redemption shall, on the redemption date designated in such notice, become and be due and
payable at the redemption price provided for redemption for such Series 2002 Bonds or portions
of Series 2002 Bonds on such date. On the date so designated for redemption, moneys for payment
of the redemption price being held in separate accounts by the Paying Agent or other Authorized
Depository in trust for the registered owners of the Series 2002 Bonds or portions thereof to be
redeemed, all as provided in this Resolution, interest on the Series 2002 Bonds or portions of
Series 2002 Bonds so called for redemption shall cease to accrue, such Series 2002 Bonds and
portions of Series 2002 Bonds shall cease to be entitled to any lien, benefit or security under the
Bond Resolution and shall be deemed paid hereunder, and the registered owners of such Series
2002 Bonds or portions of Series 2002 Bonds shall have no right in respect thereof except to
receive payment of the redemption price thereof and, to the extent provided in the next subsection,
to receive Series 2002 Bonds for any unredeemed portions of the Series 2002 Bonds.
H. In case part but not all of an outstanding fully registered Series 2002 Bond shall be
selected for redemption, the registered owners thereof shall present and surrender such Series 2002
Bond to the Paying Agent for payment of the principal amount thereof so called for redemption,
and the City shall execute and deliver to or upon the order of such registered owner, without charge
therefor, for the unredeemed balance of the principal amount of the Series 2002 Bonds so
surrendered, a Series 2002 Bond or Series 2002 Bonds fully registered as to principal and interest.
I. Series 2002 Bonds or portions of Series 2002 Bonds that have been duly called for
redemption under the provisions hereof, or as to which irrevocable instructions to call for
redemption have been given by the City, and with respect to which amounts (including
Government Obligations) sufficient to pay the principal of, Accreted Value (with respect to
Capital Appreciation Bonds) redemption premium, if any, and interest (with respect to Current
Interest Bonds) to the date fixed for redemption shall be delivered to and held in separate trust
accounts by an escrow agent, any Authorized Depository or the Paying Agent (other than the City)
in trust for the registered owners thereof, as provided in this Resolution, shall not be deemed to be
Outstanding under the provisions of the Bond Resolution and shall cease to be entitled to any lien,
benefit or security under the Bond Resolution, except to receive the payment of the redemption
price on or after the designated date of redemption from moneys deposited with or held by the
escrow agent, Authorized Depository or Paying Agent (other than the City), as the case may be, for
such redemption of the Series 2002 Bonds and, to the extent provided in the preceding subsection,
to receive Series 2002 Bonds for any unredeemed portion of the Series 2002 Bonds.
J. If the date for payment of the principal of, redemption premium, if any, or interest
on the Series 2002 Bonds shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then
an entity other than the City, a day on which banking institutions in the city where the corporate
11
trust office of the Paying Agent is located are authorized by law or executive order to close, then
the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal
holiday or a day on which such banking institutions are authorized to close, and payment on such
day shall have the same force and effect as if made on the nominal date of payment.
K. The text of the Series 2002 Bonds, the authentication certificate to be endorsed
thereon and the form of assignment for such Series 2002 Bonds shall be substantially in the
following form, with such omissions, insertions and variations as may be necessary or desirable
and authorized by this Resolution or as may be approved and made by the officers of the City
executing the same, such execution to be conclusive evidence of such approval, including, without
limitation, such changes as may be required for the issuance of uncertificated public obligations:
12 0- 797
[Form of Series 2002 Bond]
[INSERT THE FOLLOWING ONLY FOR CURRENT INTEREST BONDS]
[No. R- $
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX BOND, SERIES 2002
(HOMELAND DEFENSE/NEIGHBORHOOD CAPTIAL IMPROVEMENT PROJECTS)
Interest Rate Maturity Dated Date CUSIP
% January 1,
Registered Owner:
Principal Amount:
Dollars
The City of Miami, Florida (hereinafter called the "City"), for value received, hereby
promises to pay to the Registered Owner identified above, or to registered assigns or legal
representatives, to the extent and from the sources provided therefor, as described herein, on the
Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified
above, upon presentation and surrender hereof at the designated office of Wachovia Bank,
National Association, in Miami, Florida, as the Paying Agent for the Series 2002 Bonds, or any
successor Paying Agent appointed by the City pursuant to the Bond Resolution hereinafter referred
to, and to pay, to the extent and from the sources herein described, interest on the principal sum
from the date hereof, or from the most recent interest payment date to which interest has been paid,
at the Interest Rate per annum identified above, until payment of the Principal Amount, or until
provision for the payment thereof has been duly provided for, such interest being payable
semiannually on the first day of January and the first day of July of each year, commencing on
January 1, 2003. Interest will be paid on each such interest payment date by check or draft mailed
to the Registered Owner hereof at his address as it appears on the registration books of the City
maintained by the Bond Registrar for the Series 2002 Bonds, at the close of business on the
fifteenth (15th) day (whether or not a business day) of the month next preceding the interest
payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2002
Bond subsequent to each Record Date and prior to such interest payment date, unless the City shall
be in default in payment of interest due on such interest payment date. In the event of any such
default, such defaulted interest shall be payable to the person in whose name such Series 2002
Bond is registered at the close of business on a special record date for the payment of such
defaulted interest as established by notice deposited in the U.S. mails, postage prepaid, by the
Bond Registrar to the Registered Owners of Series 2002 Bonds not less than fifteen (15) days
preceding such special record date. Such notice shall be mailed to the persons in whose names the
Series 2002 Bonds are registered at the close of business on the fifth (5th) day (whether or not a
business day) preceding the date of mailing.]
13 02— 797
[INSERT THE FOLLOWING ONLY FOR CAPITAL APPRECIATION BONDS]
[No. RCA -
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX BOND, SERIES 2002
(HOMELAND DEFENSE/NEIGHBORHOOD CAPTIAL IMPROVEMENT PROJECTS)
Interest Rate Maturity Date Original Issue Date CUSIP
% January 1,
Registered Owner:
Principal Amount:
Amount Due at Maturity:
Dollars
Dollars
The City of Miami, Florida (hereinafter called the "City"), for value received, hereby
promises to pay to the Registered Owner identified above, or to registered assigns or legal
representatives, to the extent and from the sources provided therefor, as described herein, on the
Maturity Date identified above (or earlier as hereinafter provided), the Amount Due at Maturity
identified above, upon presentation and surrender hereof at the designated office of Wachovia
Bank, National Association, in Miami, Florida, as the Paying Agent for the Series 2002 Bonds, or
any successor Paying Agent appointed by the City pursuant to the Bond Resolution hereinafter
referred to, and to pay, to the extent and from the sources herein described, interest on the principal
sum from the Original Issue Date set forth above, at the Interest Rate per annum identified above,
compounded on the first day of January and July of each year until payment of the Principal
Amount Due at Maturity or until provision for the payment thereof has been duly provided for.
The principal amount hereof plus interest so compounded to any earlier date shall be the Accreted
Value of this bond as of such date. A schedule setting forth the Accreted Values of this bond as of
January 1 and July 1 of each year for each $5,000 of amount due at maturity appears at the end of
this bond.]
This Series 2002 Bond is one of an authorized issue of bonds in the aggregate principal
amount of $ (the "Series 2002 Bonds") of like date, tenor and effect, except as to
number, maturity and interest rate, issued to pay the cost of acquisition, construction and
equipping of certain homeland defense/neighborhood capital improvements within the City,
pursuant to the authority of and in full compliance with the Constitution and laws of the State of
Florida, including particularly Article VII, Section 12 of the Constitution, Chapter 166, Florida
Statutes, to the extent not inconsistent with and not repealed by the provisions of Section 166.021,
Florida Statutes, the Charter of the City of Miami, Ordinance No. 12137 duly enacted by the City
on October 11, 2001 and Resolution No. 02-_ duly adopted by the City on July 9, 2002
14 0_, 797
(collectively, the "Bond Resolution"), and other applicable provisions of law. This Series 2002
Bond is subject to all the terms and conditions of the Bond Resolution, and capitalized terms not
otherwise defined herein shall have the same meanings ascribed to them in the Bond Resolution.
This Series 2002 Bond shall not be or constitute a general indebtedness within the meaning
of any constitutional or statutory provision or limitation and the City is not obligated to levy any ad
valorem taxes other than the Limited Ad Valorem Tax (as defined in the Bond Resolution) for the
payment thereof. Neither the full faith and credit nor the ad valorem taxing power of the State of
Florida or any political subdivision or agency thereof (except the taxing power of the City, but
only to the extent of the Limited Ad Valorem Tax) is pledged to the payment of this Series 2002
Bond, and it is expressly agreed by the Registered Owner of this Series 2002 Bond that, except for
the Limited Ad Valorem Tax, such Registered Owner shall never have the right to compel the
exercise of the ad valorem taxing power of the City or taxation in any form on any real or personal
property for the payment of the principal of, Accreted Value (with respect to Capital Appreciation
Bonds) and interest (with respect to Current Interest Bonds) on this Series 2002 Bond or for the
payment of any other amounts provided for in the Bond Resolution.
The Series 2002 Bonds are special limited obligations of the City payable from (i) the
Limited Ad Valorem Tax to be levied annually on all taxable property in the City, and (ii) to the
extent provided in the Bond Resolution, a covenant to budget and appropriate, in each fiscal year,
legally available non -ad valorem revenues of the City in an amount which together with the
amounts on deposit in the Principal and Interest Account and the Bond Amortization Account is
sufficient to pay the principal of, Accreted Value (with respect to Capital Appreciation Bonds),
redemption premium, if any and interest (with respect to Current Interest Bonds) on the Series
2002 Bonds then due and payable; provided, however, that not more than 10% of the Maximum
Annual Debt Service on the Series 2002 Bonds may be paid from such non -ad valorem revenues in
any Fiscal Year. In the event of a deficiency in the amount of ad valorem taxes collected to pay the
principal of and interest on the City's full faith and credit general obligation bonds, revenues
collected from the levy of the Limited Ad Valorem Tax shall be applied to cure any such
deficiency.
Reference is made to the Bond Resolution for the provisions, among others, relating to the
terms, lien and security for the Series 2002 Bonds, the custody and application of the proceeds of
the Series 2002 Bonds, the rights and remedies of the holders of the Series 2002 Bonds, and the
extent of and limitations on the City's rights, duties and obligations, to all of which provisions the
registered owner hereof assents by acceptance hereof.
[INSERT THE FOLLOWING REDEMPTION PROVISIONS ONLY IF THE SERIES
2002 BONDS ARE SUBJECT TO REDEMPTION]
[The Series 2002 Bonds maturing January 1, are subject to mandatory redemption
prior to maturity, in part, as selected by lot, at a redemption price of 100% of the principal amount
thereof on January 1, and on each January 1 thereafter in the following principal amounts
15
02- 797
Date
* Maturity.]
*
Principal Amount
[The Series 2002 Bonds maturing on 1, and thereafter shall be [further]
subject to redemption prior to their maturity, at the option of the City on or after 1,
as a whole or in part at any time (selected by the City among maturities and by lot within a
maturity), at the redemption prices (expressed as percentages of principal amount) set forth in the
following table, plus accrued interest from the most recent interest payment date to the redemption
date:
Redemption Periods Redemption
(Both Dates Inclusive) Prices
January 1, through December 31, %
January 1, and thereafter]
[Notice of call for redemption is to be given by mailing a copy of the redemption notice by
U.S. mail at least thirty (30) days prior to the date fixed for redemption to the registered owner of
each Series 2002 Bond to be redeemed at the address shown on the registration books maintained
by the City, as Bond Registrar, or any successor Bond Registrar appointed by the City pursuant to
the Bond Resolution. Failure to give such notice by mailing to any Bondholder, or any defect
therein, shall not affect the validity of the proceedings for the redemption of any Series 2002 Bond
or portion thereof with respect to which no such failure or defect has occurred. All such Series
2002 Bonds called for redemption and for the retirement of which funds are duly provided will
cease to bear interest on such redemption date.]
This Series 2002 Bond may be transferred upon the registration books of the City upon
delivery thereof to the designated office of the Bond Registrar accompanied by a written
instrument or instruments of transfer in form and with guaranty of signature satisfactory to the
Bond Registrar, duly executed by the registered owner of this Series 2002 Bond or by his
attorney-in-fact or legal representative, containing written instructions as to the details of transfer
of this Bond, along with the social security number or federal employer identification number of
such transferee. In all cases of a transfer of a Series 2002 Bond, the Bond Registrar shall at the
earliest practical time in accordance with the provisions of the Bond Resolution enter the transfer
of ownership in the registration books and shall deliver in the name of the new transferee or
transferees a new fully registered Series 2002 Bond or Series 2002 Bonds of the same maturity and
of authorized denomination or denominations, for the same aggregate principal amount and
payable from the same source of funds. Series 2002 Bonds may be exchanged at the office of the
Bond Registrar for a like aggregate principal amount of Series 2002 Bonds, of authorized
16
02- 797
denominations of the same series and maturity. The City and the Bond Registrar may charge the
owner of such Series 2002 Bond for the registration of every transfer or exchange of a Series 2002
Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge
required (other than by the City) to be paid with respect to the registration of such transfer or
exchange, and may require that such amounts be paid before any such new Series 2002 Bond shall
be delivered.
If the date for payment of the principal of, redemption premium, if any, or interest on this
Series 2002 Bond shall be a Saturday, Sunday, legal holiday or, if the Paying Agent is then an
entity other than the City, a day on which banking institutions in the city where the corporate trust
office of the Paying Agent is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal
holiday or a day on which such banking institutions are authorized to close, and payment on such
day shall have the same force and effect as if made on the nominal date of payment.
The City has established a book -entry system of registration for the series of Series 2002
Bonds of which this is one. Except as specifically provided otherwise in the Bond Resolution, an
agent will hold this Series 2002 Bond on behalf of the beneficial owner hereof. By acceptance of a
confirmation of purchase, delivery or transfer, the beneficial owner of this Series 2002 Bond shall
be deemed to have agreed to such arrangement.
It is hereby certified and recited that this Series 2002 Bond is authorized by and is issued in
conformity with the requirements of the Constitution and statutes of the State of Florida; that all
acts, conditions and things required to exist, to happen, and to be performed precedent to the
issuance of this Series 2002 Bond exist, have happened and have been performed in regular and
due form and time as required by the laws and Constitution of the State of Florida applicable
hereto; that the issuance of the Series 2002 Bonds of this issue does not violate any constitutional
or statutory limitation or provision; that due provision has been made for the levy and collection of
the Limited Ad Valorem Tax upon all taxable property within the corporate limits of the City
(excluding exemptions as provided by applicable law), to pay the principal of, Accreted Value
(with respect to Capital Appreciation Bonds), redemption premium, if any and interest (with
respect to Current Interest Bonds) on the Series 2002 Bonds as the same shall become due and
payable, which tax shall be assessed, levied and collected at the same time and in the same manner
as other ad valorem taxes are assessed, levied and collected within the corporate limits of the City.
This Series 2002 Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication
endorsed hereon shall have been manually signed by the Bond Registrar.
This Series 2002 Bond is and has all the qualities and incidents of, an investment security
under the Uniform Commercial Code -Investment Securities Law of the State of Florida.
17 (Q- 797
IN WITNESS WHEREOF, the City of Miami, Florida, has issued this Series 2002 Bond
and has caused the same to be signed by its City Manager and attested and countersigned by its
City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a
facsimile of its seal to be reproduced hereon as of the date hereof.
(SEAL)
ATTESTED AND COUNTERSIGNED:
City Clerk
CITY OF MIAMI, FLORIDA
LI -A
City Manager
APPROVED AS TO FORM
AND CORRECTNESS
City Attorney
18 0?- 797
CERTIFICATE OF AUTHENTICATION
This Series 2002 Bond is one of the Series 2002 Bonds designated in and executed under
the provisions of the within mentioned Bond Resolution.
Date of Authentication:
as Bond Registrar
Authorized Officer
19 02- 797
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned (the "Transferor") hereby sells, assigns and
transfers unto _
(the "Transferee")
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF TRANSFEREE
the within Series 2002 Bond and all rights thereunder, and hereby irrevocably constitutes and
appoints as attorney to register the transfer of the within Series 2002 Bond on the books kept for
registration and registration of transfer thereof, with full power of substitution in the premises.
Date:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a member firm of any other
recognized national securities exchange or a
commercial bank or a trust company.
NOTICE: No transfer will be registered and
no new Series 2002 Bond will be issued in
the name of the Transferee, unless the
signature(s) to this assignment correspond(s)
with the name as it appears upon the face of
the within Series 2002 Bond in every
particular, without alteration or enlargement
or any change whatever and the Social
Security or Federal Employer Identification
Number of the Transferee is supplied.
[INSERT THE FOLLOWING ONLY FOR CAPITAL APPRECIATION BONDS]
TABLE OF ACCRETED VALUES
Date Accreted Values
[End of Form of Series 2002 Bond]
20 7 9
Section 6. Authorization and Approval of Bond Purchase Agreement. The execution
and delivery of the Bond Purchase Agreement is hereby authorized and approved. The Commission
hereby authorizes and directs the City Manager to determine the final provisions of the Bond
Purchase Agreement, within the parameters for the Series 2002 Bonds set forth in Section 4.B. of this
Resolution. Upon compliance by the Underwriters with the requirements of Section 218.385(2) and
(3), Florida Statutes, and Section 218.385(6), Florida Statutes, by filing the "truth -in -bonding
statement" and the "disclosure statement" required by said statutory provisions, the City Manager, is
hereby authorized to execute and the Clerk is hereby authorized to attest to, seal and deliver the Bond
Purchase Agreement in substantially the form approved at this meeting and attached hereto as Exhibit
"A", subject to such changes, insertions and omissions and such filling in of blanks therein as
hereafter may be approved and made by the City Manager upon the advice of the City Attorney and
the City's bond counsel. The execution, attestation and delivery of the Bond Purchase Agreement, as
described herein, shall be conclusive evidence of the City's approval of any such determinations,
changes, insertions, omissions or filling in of blanks.
Section 7. Authorization and Approval of Negotiated Sale of the Series 2002 Bonds.
Based on the findings set forth in Section 2.E. hereof, the Commission hereby approves the
negotiated sale of the Series 2002 Bonds to the Underwriters, and the Series 2002 Bonds shall be
sold and awarded to the Underwriters, upon the terms and conditions set forth herein and as set forth
in the Bond Purchase Agreement.
Section 8. Application of Series 2002 Bond Proceeds. The proceeds, including accrued
interest and premium, if any, received from the sale of the Series 2002 Bonds shall be applied by
the City, simultaneously with delivery of the Series 2002 Bonds, as follows:
A. Accrued interest, if any, shall be deposited in the account designated "City of
Miami 2002 Limited Ad Valorem Tax Bonds Principal and Interest Account" (the "Principal and
Interest Account") which is hereby established with the Paying Agent, who shall apply such
moneys to pay interest on the Current Interest Bonds as the same becomes due.
B. An amount set forth in a certificate of the Finance Director delivered concurrently
with the delivery of the Series 2002 Bonds (the "Proceeds Certificate") shall be deposited in a
separate account designated "City of Miami 2002 Limited Ad Valorem Tax Bonds Construction
Account" (the "Construction Account") which is hereby established with the City and shall be
disbursed to pay the costs of the Homeland Defense/Neighborhood Capital Improvements Projects,
including reimbursement to the City of funds advanced for costs incurred with respect to the
Homeland Defense/Neighborhood Capital Improvements Projects, which may be reimbursed
pursuant to the Code under the Intent Resolution. Any balance remaining after payment or
provision for payment of such costs of the Homeland Defense/Neighborhood Capital
Improvements Projects, shall be transferred to the Paying Agent for deposit in the Principal and
Interest Account and the Bond Amortization Account, if any, and used solely to pay principal of,
Accreted Value (with respect to Capital Appreciation Bonds), Amortization Installments (with
respect to Term Bonds), and interest (with respect to Current Interest Bonds) on the Series 2002
Bonds. Any investment income earned with respect to deposits in the Construction Account may
be used, at the option of the City, to pay costs of the Homeland Defense/Neighborhood Capital
Improvements Projects or may be transferred to the Paying Agent for deposit in the Principal and
Interest Account and used to pay interest on the Current Interest Bonds.
21 02--' 797
C. The remainder of the proceeds as set forth in the Proceeds Certificate shall be
deposited in a separate account designated "City of Miami 2002 Limited Ad Valorem Tax Bonds
Cost of Issuance Account" which is hereby established with the City and shall be disbursed for
payment of expenses incurred in issuing the Series 2002 Bonds. Any balance remaining after
payment or provision for payment of such expenses has been made shall be transferred, at the
option of the City, to either the Construction Account for the payment of costs of the Homeland
Defense/Neighborhood Capital Improvement Projects or to the Paying Agent for deposit in the
Principal and Interest Account and the Bond Amortization Account, if any, and used solely to pay
principal of, Accreted Value (with respect to Capital Appreciation Bonds), Amortization
Installments (with respect to Term Bonds), and interest (with respect to Current Interest Bonds) on
the Series 2002 Bonds. In the event any portion of the Series 2002 Bonds are issued as Term
Bonds, there is hereby established with the Paying Agent, an account designated "City of Miami
2002 Limited Ad Valorem Tax Bonds Amortization Account" (the `Bond Amortization Account")
in which amounts are to deposited to pay the Amortization Installments on such Term Bonds.
Section 9. Investment of Series 2002 Bond Proceeds and Other Moneys. All proceeds
of the Series 2002 Bonds and other moneys held under the provisions of this Resolution may be
invested by the City and, with respect to the Principal and Interest Account and the Bond
Amortization Account, if applicable, shall be invested by the Paying Agent at the direction of the
Finance Director, in such investments as are permitted by applicable law.
Section 10. Levy of Limited Ad Valorem Tax; Payment and Pledge. In each Fiscal Year
while any of the Series 2002 Bonds are Outstanding, the City shall assess, levy and collect the
Limited Ad Valorem Tax to pay the principal of, Accreted Value (with respect to Capital
Appreciation Bonds), Amortization Installments (with respect to Term Bonds), and interest (with
respect to Current Interest Bonds) on the Series 2002 Bonds as the same shall become due.
The Limited Ad Valorem Tax shall be assessed, levied and collected in the same manner
and at the same time as other ad valorem taxes are assessed, levied and collected and the proceeds
of said tax shall be applied solely to the payment of the principal of, Accreted Value (with respect
to Capital Appreciation Bonds) Amortization Installments (with respect to Term Bonds),
redemption premium, if any, and interest (with respect to Current Interest Bonds) on the Series
2002 Bonds; provided, however, that in the event of a deficiency in the amount of ad valorem taxes
collected to pay the principal of and interest on the City's full faith and credit general obligation
bonds, revenues collected from the levy of the Limited Ad Valorem Tax shall be applied to cure
any such deficiency. On or before each interest or principal payment date for the Series 2002
Bonds, the City shall transfer to the Paying Agent for deposit in the Principal and Interest Account
and the Bond Amortization Account, if applicable, an amount sufficient to pay the principal of,
Accreted Value (with respect to Capital Appreciation Bonds) Amortization Installments (with
respect to Term Bonds), redemption premium, if any, and interest (with respect to Current Interest
Bonds) on the Series 2002 Bonds then due and payable and the Paying Agent is hereby authorized
and directed to apply such funds to said payment. The foregoing notwithstanding, the City shall
comply with the deposit requirements of the First Union Escrow Agreement, as such deposit
requirements apply to the Series 2002 Bonds, for so long as the First Union Escrow Agreement is
in full force and effect.
22 02- 797
The Bonds shall not be or constitute a general indebtedness within the meaning of any
constitutional or statutory provision or limitation and the City is not obligated to levy any ad
valorem taxes other than the Limited Ad Valorem Tax for the payment thereof. Neither the full
faith and credit nor the ad valorem taxing power of the State of Florida or any political subdivision
or agency thereof (except the taxing power of the City, but only to the extent of the Limited Ad
Valorem Tax) is pledged to the payment of the Series 2002 Bonds, and registered owners of the
Series 2002 Bonds shall never have the right to compel the exercise of the ad valorem taxing
power of the City or taxation in any form on any real or personal property for the payment of the
principal of, Accreted Value (with respect to Capital Appreciation Bonds) and interest (with
respect to Current Interest Bonds) on the Series 2002 Bonds or for the payment of any other
amounts provided for in this Resolution.
The City will diligently enforce its right to receive the Limited Ad Valorem Tax revenues
and will diligently enforce and collect such taxes. The City will not take any action that will
impair or adversely affect its right to levy, collect and receive said taxes, or impair or adversely
affect in any manner the pledge made herein or the rights of the Bondholders.
Section 11. Covenant to Budget and Appropriate. The City hereby covenants and agrees
to the extent permitted by and in accordance with applicable law and budgetary processes, to
prepare, approve and appropriate in its annual budget for each Fiscal Year, by amendment if
necessary, and to transfer to the Paying Agent for deposit to the Principal and Interest Account and
the Bond Amortization Account, if applicable, legally available non -ad valorem revenues of the
City in an amount which, together with the amounts on deposit from the Limited Ad Valorem Tax
in the Principal and Interest Account and the Bond Amortization Account, if any, is sufficient to
pay the principal of, Accreted Value (with respect to Capital Appreciation Bonds) Amortization
Installments (with respect to Term Bonds), if any, redemption premium, if any and interest (with
respect Current Interest Bonds) on the Series 2002 Bonds then due and payable; provided,
however, the amount of non -ad valorem revenues budgeted and appropriated with respect to the
Series 2002 Bonds in such Fiscal Year shall not exceed 10% of the Maximum Annual Debt
Service on the Series 2002 Bonds. Such covenant and agreement on the part of the City to budget
and appropriate sufficient amounts of legally available non -ad valorem revenues shall be
cumulative, and shall continue until such legally available non -ad valorem revenues in amounts
sufficient to make all required payments hereunder as and when due, including any delinquent
payments, shall have been budgeted, appropriated and actually paid into the appropriate funds and
accounts hereunder; provided, however, amounts so budgeted and appropriated shall not exceed
ten percent (10%) of the Maximum Annual Debt Service on the Series 2002 Bonds in any given
Fiscal Year. Such covenant shall not constitute a lien, either legal or equitable, on any of the City's
legally available non -ad valorem revenues or other revenues, nor shall it preclude the City from
pledging in the future any of its legally available non -ad valorem revenues or other revenues to
other obligations, nor shall it give the Bondholders a prior claim on the legally available non -ad
valorem revenues. The obligation of the City under this Section 11 shall be secured only by the
legally available non -ad valorem revenues actually budgeted and appropriated and transferred to
the Paying Agent for deposit in the Principal and Interest Account or the Bond Amortization
Account, as provided herein. The City may not expend moneys not appropriated or in excess of its
current budgeted revenues. The obligation of the City to budget, appropriate and to make
payments hereunder from its legally available non -ad valorem revenues is subject to the
availability of legally available non -ad valorem revenues after satisfying funding requirements for
23
02- 797
obligations having an express lien on or pledge of such revenues and after satisfying funding
requirements for essential governmental services of the City.
Section 12. Compliance with Tax Requirements. The City hereby covenants and agrees,
for the benefit of the holders from time to time of the Series 2002 Bonds, to comply with the
requirements applicable to it contained in the Code to the extent necessary to preserve the
exclusion of interest on the Series 2002 Bonds from gross income for federal income tax purposes.
Specifically, without intending to limit in any way the generality of the foregoing, the City
covenants and agrees:
A. to pay to the United States of America from any legally available funds, at the times
required pursuant to Section 148(0 of the Code, the excess of the amount earned on all nonpurpose
investments (as defined in Section 148(f)(6) of the Code) over the amount which would have been
earned if such non -purpose investments were invested at a rate equal to the yield on the Series
2002 Bonds, plus any income attributable to such excess (the "Rebate Amount");
B. to maintain and retain all records pertaining to and to be responsible for making or
causing to be made all determinations and calculations of the Rebate Amount and required
payments of the Rebate Amount as shall be necessary to comply with the Code;
C. to refrain from using proceeds from the Series 2002 Bonds in a manner that would
cause the Series 2002 Bonds or any of them, to be classified as private activity bonds under Section
141(a) of the Code; and
D. to refrain from taking any action that would cause the Series 2002 Bonds, or any of
them, to become arbitrage bonds under Section 148 of the Code or hedge bonds under Section
149(g) of the Code.
The City understands that the foregoing covenants impose continuing obligations on the
City to comply with the requirements of the Code so long as such requirements are applicable.
Section 13. Approval of Form of Pa3jng Agent and Registrar Agreement; Appointment
of Pajng Agent and Bond Registrar. The execution and delivery of the Paying Agent and
Registrar Agreement is hereby authorized and approved. The Commission hereby authorizes and
directs the City Manager to determine the final provisions of the Paying Agent and Registrar
Agreement. The City Manager, is hereby authorized to execute and the Clerk is hereby authorized to
attest to, seal and deliver the Paying Agent and Registrar Agreement in substantially the form
approved at this meeting and attached hereto as Exhibit "B", subject to such changes, insertions and
omissions and such filling in of blanks therein as hereafter may be approved and made by the City
Manager upon the advice of the City Attorney and the City's bond counsel. The execution,
attestation and delivery of the Paying Agent and Registrar Agreement, as described herein, shall be
conclusive evidence of the City's approval of any such determinations, changes, insertions,
omissions or filling in of blanks. Wachovia Bank, National Association, is hereby appointed as the
initial Paying Agent and the initial Bond Registrar for the Series 2002 Bonds.
Section 14. Preliminary Official Statement; Official Statement. The use of a Preliminary
Official Statement in connection with the marketing of the Series 2002 Bonds is hereby authorized.
The Preliminary Official Statement in substantially the form attached hereto as Exhibit "C" is
24
797
hereby approved with such changes, insertions and omissions and such filling in of blanks therein
as may be approved by the City Manager. The City Manager is hereby authorized to approve and
execute, on behalf of the City, an Official Statement relating to the Series 2002 Bonds with such
changes from the Preliminary Official Statement, within the authorizations and limitations
contained herein, as the City Manager in consultation with the City Attorney, the City's bond
counsel and the City's disclosure counsel, may approve. The execution and delivery of the Official
Statement, as described herein, shall be conclusive evidence of the City's approval of such Official
Statement. The City Manager is hereby authorized to deem the Preliminary Official Statement
final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule").
The City Manager or his designee is hereby authorized to provide for the printing of the
Preliminary Official Statement and the Official Statement by the lowest and most responsive
bidder therefor and the payment of the cost of such printing is hereby authorized to be paid from
the proceeds of the Series 2002 Bonds.
Section 15. Continuing Disclosure. For the benefit of the holders and beneficial owners
from time to time of the Series 2002 Bonds, the City agrees, in accordance with and as the only
obligated person with respect to the Series 2002 Bonds under the Rule, to provide or cause to be
provided such financial information and operating data, financial statements and notices, in such
manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe and
specify certain terms of the City's continuing disclosure agreement, including provisions for
enforcement, amendment and termination, the Finance Director is hereby authorized and directed
to sign and deliver, in the name and on behalf of the City, a Continuing Disclosure Agreement (the
"Continuing Disclosure Agreement"), in substantially the form attached hereto as Exhibit "D",
with such changes, insertions and omissions and such filling-in of blanks therein as may be
approved by the City Manager. The execution of the Continuing Disclosure Agreement, for and
on behalf of the City by the City Manager, shall be deemed conclusive evidence of the City's
approval of the Continuing Disclosure Agreement. Notwithstanding any other provisions of this
Resolution, any failure by the City to comply with any provisions of the Continuing Disclosure
Agreement or this Section 15 shall not constitute a default under the Bond Resolution and the
remedies therefor shall be solely as provided in the Continuing Disclosure Agreement.
The City Manager is further authorized and directed to establish, or cause to be established,
procedures in order to ensure compliance by the City with the Continuing Disclosure Agreement,
including the timely provision of information and notices. Prior to making any filing in
accordance with such agreement, the City Manager shall consult with, as appropriate, the City
Attorney, the City's bond counsel or the City's disclosure counsel. The City Manager, acting in
the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the
City Attorney, the City's bond counsel or the City's disclosure counsel in determining whether a
filing should be made.
Section 16. Municipal Bond Insurance. In order to produce the lowest true interest cost
possible for the Series 2002 Bonds or any portion thereof, the City Manager is hereby authorized
to secure a municipal bond insurance policy or policies with respect to any or all of the Series 2002
Bonds, if, after consultation with the Finance Director and the Financial Advisor, the City
Manager determines that obtaining such municipal bond insurance policy is in the best interests of
the City. The City is hereby authorized to provide for the payment of any premium on such
municipal bond insurance policy from the proceeds of the issuance of the Series 2002 Bonds and to
25
92- 797
enter into such agreements as may be necessary to secure such municipal bond insurance policy,
with the City Manager's execution of any such agreement to be conclusive evidence of the City's
approval thereof, provided, however, that such agreement shall be in form and substance
satisfactory to the Finance Director, the City Attorney and to the City's bond counsel. The
provisions of any such agreement shall supersede any inconsistent provision of this Resolution.
Section 17. Further Authorizations. The Mayor, the City Manager, the Finance Director,
the City Attorney and the City Clerk, or any of them and such other officers and employees of the
City as may be designated by the Mayor or the City Manager are each designated as agents of the
City in connection with the issuance and delivery of the Series 2002 Bonds and are authorized and
empowered, collectively or individually, to take all actions and steps and to execute all instruments,
documents and contracts on behalf of the City that are necessary or desirable in connection with
the execution and delivery of the Series 2002 Bonds and the negotiated sale thereof to the
Underwriters, and which are specifically authorized or are not inconsistent with the terms and
provisions of this Resolution, the Bond Purchase Agreement, the Continuing Disclosure
Agreement, the Paying Agent and Registrar Agreement or any action relating to the Series 2002
Bonds heretofore taken by the City. Such officers and those so designated are hereby charged with
the responsibility for the issuance of the Series 2002 Bonds.
Section 18. Modification or Amendment. After the issuance of the Series 2002 Bonds, no
modification or amendment of this Resolution or of any resolution amendatory hereof or
supplemental hereto materially adverse to the Bondholders may be made without the consent in
writing of the registered owners of not less than a majority in aggregate principal amount of the
Outstanding Series 2002 Bonds, but no modification or amendment shall permit a change (a) in the
maturity of the Series 2002 Bonds or a reduction in the rate of interest thereon, (b) in the amount of
the principal obligation of any Series 2002 Bond, (c) that would affect the unconditional promise
of the City to levy and collect the Limited Ad Valorem Tax as herein provided, or (d) that would
reduce such percentage of registered owners of the Series 2002 Bonds required above for such
modifications or amendments, without the consent of all of the Bondholders. For the purpose of
Bondholders' voting rights or consents, the Series 2002 Bonds owned by or held for the account of
the City, directly or indirectly, shall not be counted.
Section 19. Defeasance and Release. If, at any time after the date of issuance of the Series
2002 Bonds (a) all Series 2002 Bonds secured under the Bond Resolution or any maturity thereof
shall have become due and payable in accordance with their terms or otherwise as provided in this
Resolution, or shall have been duly called for redemption, or the City shall have given irrevocable
instructions directing the payment of the principal of, Accreted Value (with respect to the Capital
Appreciation Bonds), redemption premium, if any, and interest (with respect to Current Interest
Bonds) on such Series 2002 Bonds at maturity or at any earlier redemption date scheduled by the
City, or any combination thereof, (b) the full amount of the principal of, Accreted Value (with
respect to the Capital Appreciation Bonds), redemption premium, if any, and the interest (with
respect to Current Interest Bonds) so due and payable upon all of such Series 2002 Bonds then
Outstanding or any portion of such Series 2002 Bonds, at maturity or upon redemption, shall be
paid, or sufficient moneys shall be held by an escrow agent who shall be an Authorized Depository
or the Paying Agent (other than the City) in irrevocable trust for the benefit of such Bondholders
(whether or not in any accounts created hereby) which, when invested in Government Obligations
maturing not later than the maturity or redemption dates of such principal of, redemption premium,
26
0- 797
if any, and interest, together with the income realized on such investments, shall be sufficient to
pay all such principal of, Accreted Value (with respect to the Capital Appreciation Bonds),
redemption premium, if any, and interest (with respect to Current Interest Bonds) on said Series
2002 Bonds at the maturity thereof or the date upon which such Series 2002 Bonds are to be called
for redemption (if applicable) prior to maturity and (c) provision shall also be made for paying all
other sums payable hereunder by the City, including compensation due the Bond Registrar and the
Paying Agent, then and in that case the right, title and interest of such Bondholders hereunder shall
thereupon cease, determine and become void; otherwise, this Resolution shall be, continue and
remain in full force and effect. Notwithstanding anything in this Section 19 to the contrary,
however, the obligations of the City under Section 12 hereof shall remain in full force and effect
until such time as such obligations are fully satisfied.
Section 20. Severability. If any one or more of the covenants, agreements or provisions
of this Resolution shall be held contrary to any express provisions of law or contrary to the policy
of express law, though not expressly prohibited, or against public policy, or shall for any reason
whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void
and shall be deemed separate from the remaining covenants, agreements or provisions of this
Resolution or of the Series 2002 Bonds issued hereunder.
Section 21. No Third Party Beneficiaries. Except as herein otherwise expressly provided,
nothing in this Resolution expressed or implied is intended or shall be construed to confer upon
any person, firm or corporation other than the City, the registered owners of the Series 2002 Bonds,
the Bond Registrar and the Paying Agent, any right, remedy or claim, legal or equitable, under or
by reason of this Resolution or any provision hereof, this Resolution and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the registered owners from
time to time of the Series 2002 Bonds, the Bond Registrar and the Paying Agent.
Section 21. Controlling Law; Members of Commission or City Not Liable. This
Resolution shall be governed by and construed in accordance with the laws of the State of Florida
and all covenants, stipulations, obligations and agreements of the City contained herein shall be
deemed to be covenants, stipulations, obligations and agreements of the City to the full extent
authorized by the Act. No covenant, stipulation, obligation or agreement contained herein shall be
deemed to be a covenant, stipulation, obligation or agreement of any present or future member,
agent, independent contractor or employee of the Commission or the City in his individual
capacity, and neither the members of the Commission nor any official executing the Series 2002
Bonds shall be liable personally on the Series 2002 Bonds or the Bond Resolution or shall be
subject to any personal liability or accountability by reason of the issuance or the execution by the
Commission or such members thereof.
Section 22. Qualification for the Depository Trust Company. Notwithstanding any other
provision hereof, the City, the Bond Registrar and the Paying Agent are hereby authorized to take
such actions as may be necessary to qualify the Series 2002 Bonds for deposit with DTC, including
but not limited to those actions as may be set forth in the Blanket Issuer Letter of Representations
entered into by and between the City and DTC, dated October 4, 1995, wire transfers of interest
and principal payments with respect to the Series 2002 Bonds, utilization of electronic book entry
data received from DTC in place of actual delivery of Series 2002 Bonds and provisions of notices
with respect to Series 2002 Bonds registered by DTC (or any of its designees identified to the City,
27
() ( 9'7
the Bond Registrar of the Paying Agent) by overnight delivery, courier service, telegram, telecopy
or other similar means of communication.
Section 23. Effective Date. This Resolution shall become effective immediately upon
its adoption and signature of the Mayor.l'
PASSED AND ADOPTED this 9th day of July , 2002.
NUEL A. DIAZ, MAYOR
ATTEST:
PRIS ILLA A. THOMPSON
CITY CLERK
APPROVED AS TO FORM AND CORRECTNESS:
,AL JANDRO
(CITY ATTOR
W6494:BSS
1� If the Mayor does not sign this Resolution, it shall become effective
at the end of ten calendar days from the date it was passed and adopted.
If the Mayor vetoes this Resolution, it shall become effective
immediately upon override of the veto by the City Commission.
W
02- 797
EXHIBIT "A"
BOND PURCHASE AGREEMENT
02-- 79
$160,0009000*
THE CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX BONDS (HOMELAND
DEFENSE/NEIGHBORHOOD CAPITAL IMPROVEMENT PROJECTS)
SERIES 2002
PURCHASE CONTRACT
The City Commissioners
of the City of Miami, Florida
3500 Pan American Drive
Miami, Florida 33133
Ladies and Gentlemen:
July , 2002
1. Morgan Stanley & Co. (the "Representative"), Jackson Securities, Inc.,
J.P. Morgan Securities, Inc., Lehman Brothers, Incorporated, and Salomon Smith Barney and
UBS PaineWebber Inc. (collectively, the "Underwriters"), offer to enter into the following
agreement (this "Purchase Contract") with The City of Miami, Florida (the "City"), which
upon the City's acceptance hereof will be binding upon the City and upon the Underwriters.
This offer is made subject to the City's acceptance by execution of this Purchase Contract
and its delivery of same to the Underwriters at or before 5:00 p.m., New York City time,
today.
2. Upon the terms and conditions and upon the basis of the representations,
warranties, covenants and agreements hereinafter set forth, the Underwriters hereby agree to
purchase from the City for offering to the public, and the City hereby agrees to sell and
deliver to the Underwriters for such purpose, all (but not less than all) of the aggregate
principal amount of the City's Limited Ad Valorem Tax Bonds (Homeland
Defense/Neighborhood Capital Improvement Projects), Series 2002, dated as of
* Preliminary, subject to change.
02- '7 9'7
, 2002 (the "Series 2002 Bonds"). The Underwriters agree to pay to the
City for the purchase of the Series 2002 Bonds an amount equal to $ (which
represents the par amount of the Series 2002 Bonds, plus [minus] net original issue premium
[discount] of $ and less an Underwriters' discount of $ ), plus
accrued interest on the Series 2002 Bonds from , 2002 to the date of delivery
of the Series 2002 Bonds, such date being referred to herein as the "Closing." Such purchase
price shall be paid by the Underwriters to the City at the Closing as described in Section 7
hereof.
3. The Series 2002 Bonds are being issued by the City pursuant to the
Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes,
the Charter of the City, and other applicable provisions of law (the "Act") and pursuant to
Ordinance No. 12137 of the City adopted by the City Commission of the City on July _,
2002 and Resolution No. adopted by the City Commission of the City on July _, 2002
(collectively, the "Resolution"). The Series 2002 Bonds are being issued for the purpose of
(1) funding certain capital improvement projects with the City, including homeland security,
neighborhood improvements, capital projects and infrastructure improvements (collectively,
the "Project"), and (ii) paying certain costs and expenses incurred in connection with the
issuance of the Series 2002 Bonds, including the premium for a municipal bond insurance
policy. The payment of the principal of, redemption premium, if any, and interest on the
Series 2002 Bonds shall be secured by the Limited Ad Valorem Tax and a portion of the
Non -Ad Valorem Revenue of the City in the manner and to the extent described in the
Resolution. Payment of the principal of and interest on the Series 2002 Bonds, when due,
will be guaranteed under a policy of municipal bond insurance (the "Policy") to be issued at
the Closing by (the "Bond Insurer").
The Series 2002 Bonds shall be more fully described in the Preliminary Official
Statement, dated July , 2002, relating to the Series 2002 Bonds, the form of which is
attached to the Resolution. Such Preliminary Official Statement as amended to delete
preliminary language and reflect the final terms of the Series 2002 Bonds, and with only such
changes as shall be approved by the City and the Underwriters, and as amended and
supplemented prior to the Closing, is herein referred to as the "Official Statement." The
Series 2002 Bonds shall mature and bear interest as set forth in Exhibit A attached hereto and
shall be subject to redemption and have all such other terms and provisions, as set forth in the
Resolution and as described in the Official Statement. All terms not otherwise defined herein
shall have the meanings ascribed thereto in the Resolution.
4. Prior to the submission of the offer to purchase the Series 2002 Bonds pursuant
to this Purchase Contract, the Underwriters have provided the City all applicable disclosure
information required by Section 218.385, Florida Statutes, a copy of which is attached as
Exhibit B hereto, and the City, by its acceptance hereof, accepts such disclosure and agrees
that it does not require any further disclosure from the Underwriters prior to the delivery of
02-" 797
the Series 2002 Bonds with regard to the matters set forth in such Section. The Underwriters
agree to make a bona fide public offering of all the Series 2002 Bonds at not in excess of the
initial public offering price (which may be expressed in terms of yield), set forth in Exhibit A
attached hereto. The Series 2002 Bonds may be offered and sold to certain dealers (including
the Underwriters and other dealers or institutions depositing such Series 2002 Bonds into
investment trusts) at a price or prices lower than such public offering price. The City
covenants with the Underwriters to cooperate with it in qualifying the Series 2002 Bonds for
offer and sale under the securities or "Blue Sky" laws of such states as the Underwriters may
request; provided that in no event shall the City be obligated to take any action which would
subject it to general service of process in any state where it is not now so subject. The
Underwriters agree to provide at the Closing a certificate stating the price at which at least
10% of each maturity of the Series 2002 Bonds have been sold to the public.
Delivered herewith by the Representative on behalf of the Underwriters is a check
payable to the order of the City in an amount equal to $ If the City does not
accept the offer made hereby, such check shall be immediately returned to the Underwriters.
If the offer made hereby is so accepted, the City shall, as security for the performance by the
Underwriters of their obligations hereunder, hold such check uncashed until disposed of as
follows:
A. at the Closing, the uncashed check shall be returned by the City to the
Underwriters;
B. in the event the City shall fail to deliver the Series 2002 Bonds at the
date fixed for the Closing, or if the City shall be unable at or prior to the date fixed for the
Closing to satisfy the conditions to the obligations of the Underwriters contained herein, or if
the obligations of the Underwriters shall be terminated for any reason permitted hereby, the
uncashed chick shall be returned to the Representative on behalf of the Underwriters on or
prior to the date fixed for the Closing; and
C. if the Underwriters shall fail (other than for a reason permitted hereby)
to accept and pay for the Series 2002 Bonds upon tender thereof by the City as provided
herein, the check shall be retained by the City as and for full liquidated damages for such
failure and for any and all defaults on the part of the Underwriters, and the cashing 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.
The following statements are made in satisfaction of the requirements of Section
218.385(2) and (3), Florida Statutes.
The City is proposing to issue the Series 2002 Bonds in the aggregate principal
amount of $ for the purpose of (i) funding the Project, and (ii) paying
U2- 797
certain costs of issuance of the Series 2002 Bonds, including the premium for the
Policy. The Series 2002 Bonds are expected to be repaid over a period of
approximately years, at a true interest cost of approximately %,
resulting in total interest payments in the amount of $ being made
over the life of the Series 2002 Bonds.
The Series 2002 Bonds are payable from and secured by the Limited Ad
Valorem Tax and a portion of the Non -Ad Valorem Revenue of the City (as defined in
the Resolution). Authorizing the Series 2002 Bonds will result in approximately
$ (average annual debt service) of City's moneys not being available
to finance other services of the City each year over the next approximately
years.
5. Within seven business days of the acceptance hereof by the City, the City shall
cause to be delivered such reasonable number of copies of the final Official Statement as the
Underwriters shall request, which shall be sufficient in number to comply with paragraph
(b)(4) of Rule 15c2-12 of the Securities and Exchange Commission (17 CFR § 240.15c2-12)
under the Securities Exchange Act of 1934 (the "Rule") and with Rules G-32 and G-36 and
all other applicable rules of the Municipal Securities Rulemaking Board (the "MSRB"). The
City hereby authorizes the Underwriters to use and distribute the Resolution and the Official
Statement and the information contained in each such document in connection with the
public offering and the sale of the Series 2002 Bonds. The Underwriters agree that they will
not confirm the sale of any Series 2002 Bonds unless the confirmation of sale is accompanied
or preceded by the delivery of a copy of the Official Statement pursuant to the rules of the
MSRB.
6. The City represents, warrants, covenants and agrees with the Underwriters that:
i
A. The City is a municipal corporation of the State of Florida duly
organized and existing pursuant to the Constitution, the Charter of the City, and laws of such
State and is authorized and empowered by law, including particularly the Act, to issue the
Series 2002 Bonds and to use the moneys derived from the sale thereof to fund the Project; to
adopt the Resolution, to accept this Purchase Contract; to issue, sell and deliver the Series
2002 Bonds to the Underwriters as provided herein; to execute and perform its obligations
under a Disclosure Dissemination Agent Agreement, the form of which is attached to the
Preliminary Official Statement as Appendix F (the "Disclosure Agreement"); and to carry out
and consummate all other transactions contemplated by the Official Statement and by each of
the aforesaid documents, agreements and resolutions.
02 797
B. The City has duly authorized by all appropriate action, and complied
with all provisions of law with which compliance was required on or prior to the date hereof,
including the Act, with respect to the acceptance of this Purchase Contract, and the execution
and delivery of the Disclosure Agreement; the adoption of the Resolution; and the sale,
execution, issuance and delivery of the Series 2002 Bonds. Each of the aforementioned
agreements, ordinances, resolutions and other instruments constitute valid and binding
obligations of the CUy enforceable against the City in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and other laws affecting creditors' rights and
remedies and to general principles of equity.
C. When delivered to and paid by the Underwriters in accordance with the
terms of this Purchase Contract and the Resolution, the Series 2002 Bonds will have been
duly and validly authorized, executed, authenticated, issued and delivered and will constitute
legal, valid and binding limited obligations of the City enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency or other laws affecting creditors' rights
and remedies and to general principles of equity, and will be entitled to the benefits of the
Resolution.
D. The acceptance of this Purchase Contract, the execution and delivery of
the Series 2002 Bonds and the Disclosure Agreement, the adoption of the Resolution, and
compliance with the provisions thereof, do not and will not conflict with, or constitute on the
part of the City a violation of, breach of or default under, any indenture, mortgage, deed of
trust, resolution, note agreement or other agreement or instrument to which the City is a parry
or by which the City is bound, or, any constitutional provision or statute of the State of
Florida, any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the City or any of its activities or properties; and all consents of any
governmental authority of the State of Florida required in connection with the issuance or
sale of the Series 2002 Bonds by the City have .been obtained; provided, however, that no
representation is made concerning compliance with the Federal securities laws or the
securities or "Blue Sky" laws of the various States.
E. Except as described in the Preliminary Official Statement and in the
Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court or governmental agency or body pending or, to the best of its
knowledge, threatened against or affecting the City, nor is there any basis therefor, wherein
an unfavorable decision, ruling or finding would materially adversely affect the transactions
contemplated by this Purchase Contract, the Resolution and the Disclosure Agreement, or
which, in any way, would adversely affect the validity or enforceability of the Series 2002
Bonds, the Resolution, the Disclosure Agreement, or any agreement or instrument to which
the City is a party, used or contemplated for use in the consummation of the transactions
contemplated by this Purchase Contract, the Disclosure Agreement and the Resolution.
02- 797
F. The City will not take or omit to take any action which action or
omission will in any way cause the proceeds from the sale of the Series 2002 Bonds to be
applied in a manner contrary to that provided for in the Resolution and as described in the
Official Statement.
G. The Preliminary Official Statement as of the date thereof and the
Official Statement as of the date hereof (but in both instances not including information ip-
such documents under the headings "Municipal Bond Insurance" and "Description of the
Series 2002 Bonds — Book -Entry Only System") does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. If,
after the date of this Purchase Contract and until the earlier of (i) ninety (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 fact or to omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading, the City shall notify the Underwriters thereof, and, if in the opinion of the
Underwriters, such event requires the preparation and publication of a supplement or
amendment to the Official Statement, the City will at its own expense forthwith prepare and
furnish to the Underwriters a sufficient number of copies of an amendment of or supplement
to the Official Statement (in form and substance satisfactory to the Underwriters) which will
supplement or amend the Official Statement so that it will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
H. Except as disclosed in the Preliminary Official Statement and in the
Official Statement, the City neither is nor has been in default any time after December 31,
1975, as to principal or interest with respect to an obligation issued by the City.
I. 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.
J. As of its date, the Preliminary Official Statement was deemed "final" by
the City for purposes of SEC Rule 15c2 -12(b).
K. The City has, in connection with previous issues of securities,
undertaken in a written certificate for the benefit of holders of such securities, to provide
certain continuing disclosure information in accordance with Rule 15c2 -12(b)(5) of the
02- 797
Securities and Exchange Commission, and the City has complied with and is currently in
compliance with each such undertaking.
7. At 1:00 p.m., Eastern time, on July , 2002, or at such other time or on
such earlier or later business day as shall have been mutually agreed upon by the City and the
Underwriters, the City will deliver, or cause to be delivered, through the DTC FAST system
to the Underwriters the Series 2002 Bonds, in fully registered book entry form, duly executed
and authenticated, at a place in Miami, Florida to be mutually agreed upon by the City and
the Underwriters. Simultaneously, with the delivery of the Series 2002 Bonds, the City will
return the good faith check described in Section 4 hereof to the Underwriter. The City will
deliver, or cause to be delivered, to the Underwriters at such time and on such date and at a
place to be mutually agreed upon by the City and the Underwriters, the closing documents as
provided and described in Section 8 of this Purchase Contract. Upon compliance with all the
terms and provisions and subject to the conditions hereof, the Underwriters will accept such
delivery and pay the purchase price of the Series 2002 Bonds as set forth in Section 2, in
immediately available funds to the order of the , as Trustee under the
Resolution. The Series 2002 Bonds will be delivered in book -entry -only form and registered
in the name of Cede & Co.
8. The Underwriters have entered into this Purchase Contract in reliance upon the
representations, warranties, covenants and agreements of the City contained herein and to be
contained in the documents and instruments to be delivered at the Closing and upon the
performance by the City of its obligations hereunder, both as of the date hereof and as of the
date of Closing. Accordingly, the obligation of the Underwriters under this Purchase
Contract to purchase and pay for the Series 2002 Bonds shall be subject to the performance
by the City of such obligations at or prior to the Closing, and the obligations hereunder of
each party he shall be subject (i) to the performance by the City of the obligations to be
performed -At or prior to Closing, (ii) to the accuracy in all material respects of such
representations, warranties, covenants and agreements as of the date hereof and as of the date
of Closing and (iii) to the following conditions:
A. At the time of the Closing, the Disclosure Agreement shall have been
duly executed and delivered by the respective parties thereto in substantially the same form as
have been previously delivered to the Underwriters on the date hereof, shall be in full force
and effect and shall not have been amended, modified or supplemented except as may have
been agreed to in writing by the Underwriters and the Resolution shall not have been
amended, modified or supplemented, except as may have been agreed to in writing by the
Underwriters.
B. At the time of the Closing, all required official action of the City relating
to the authorization, sale and issuance of the Series 2002 Bonds and the transactions
contemplated thereby and hereby required to be taken by the City on or prior to the date
02- 797
thereof shall be in full force and effect and shall not have been amended, modified or
supplemented, except as may have been agreed to in writing by the Underwriters.
C. At the time of the Closing, the Series 2002 Bonds shall have been duly
executed and authenticated in accordance with the provisions of the Resolution.
D. At the time of the Closing, the Series2002 Bonds will be rated, "Aaa"
by Moody's Investors Service, "AAA" by Standard & Poor's Ratings Group ("S&P"), and
"AAA" by Fitch, Inc., which ratings shall be based upon the issuance of the Policy.
documents:
E. At or prior to the Closing, the Underwriters shall receive the following
(i) The Official Statement of the City executed by the City Manager;
(ii) A copy of the Resolution, certified as of the date of the Closing by the
City Clerk as having been duly adopted by the City Commission and as being in full
force and effect and not having been amended, modified or supplemented, except as
may have been agreed to in writing by the Underwriters;
(iii) The approving opinion of Squire, Sanders & Dempsey L.L.P. Bond
Counsel, dated the date of the Closing substantially in the form attached as Appendix
D to the Official Statement and addressed (or a separate "reliance letter" addressed) to
the City and the Underwriters;
(iv) The supplemental opinion of Squire, Sanders & Dempsey L.L.P. Bond
Counsel, dated the date of the Closing substantially in the form of Exhibit C attached
heret6,
(v) The opinion of Alejandro Vilarello, Esq., City Attorney, dated the date
of the Closing, substantially in the form of Exhibit D attached hereto;
(vi) The opinion of Counsel to Bond Insurer, dated the date of the Closing,
in form and substance satisfactory to the Underwriters and addressed (or a separate
"reliance letter" addressed) to the City and the Underwriters;
(vii) An opinion of Bryant, Miller and Olive, P.A., Coral Gables, Florida,
and Manuel Alonso-Poch, P.A., Co -Disclosure Counsel, addressed to (or a separate
"reliance letter" addressed to the City and the Underwriters, and dated the date of
Closing, to the effect that with respect to the information in the Official Statement and
based upon said firms' participation in the preparation and review of the Official
Statement and without having undertaken to determine independently the accura�v or -
0 2 _.Y.) .)
completeness of the contents of the Official Statement, nothing has come to the
attention of said firms that would cause them to believe that the Official Statement
(except for the financial and statistical data contained therein and information relating
to the book -entry -only registration system and the Policy, as to which no opinion need
be expressed) contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleadi�-g,
(viii) A certificate dated the date of Closing of the Mayor and City Manager
to the effect that:
(a) as of such date, except as disclosed in the Official Statement, no
litigation is pending or, to their knowledge, tb reatened in any court (1)
challenging the creation, organization or existence of the City, or (2) seeking
to restrain or enjoin the issuance or delivery of any of the Series 2002 Bonds,
or the collection of revenues or other moneys pledged to pay the principal of
and interest on the Series 2002 Bonds, or in any way contesting or affecting
the validity of the Series 2002 Bonds, the Resolution or the pledge of the
Limited Ad Valorem Tax and a portion of the Non -Ad Valorem Revenue of
the City, or contesting the powers of the City to issue the Series 2002 Bonds,
to adopt the Resolution, or (iii) in any way contesting or affecting the validity
of this Purchase Contract, the Disclosure Agreement or the Resolution;
provided, the Underwriters may in their sole discretion accept the opinion of
the City Attorney or Bond Counsel in lieu of the certifications required by
clauses (1), (2) and (3), in each case, acceptable in form and substance
satisfactory to the Underwriters, that in the opinion of the Underwriters, all
issues raised in any related or threatened litigation are without substance or the
contentions of any plaintiffs therein are without merit; and
(b) (1) the representations, warranties, covenants and agreements of
the City contained herein are true and correct in all material respects on and as
of the date of the Closing as if made on the date of the Closing; and (2) no
event affecting the City has occurred since the date of the Official Statement
which has not been disclosed therein and which should be disclosed in the
Official Statement for the purpose for which it is to be used or which it is
necessary to disclose therein in order to make the statements and information
therein, in light of the circumstances under which they were made, not
misleading in any material respect;
(ix) A certificate of Bond Insurer in form and substance satisfactory to the
Underwriters verifying the statements and information relating to Bond Insurer and
the Policy in the Official Statement;
02- '7 9'7
(x) A copy of a transcript of all proceedings relating to the authorization,
sale and issuance of the Series 2002 Bonds, including, among other documents, copies
of the Resolution and this Purchase Contract;
(xi) A true and correct copy of the Policy issued by Bond Insurer;
(xii) An executed Disclosure Agreement of the City, substantially in the form
provided therefor in Appendix F to the Official Statement; and
(xiii) Such additional legal opinions, certificates instruments and other
documents as the Underwriters may reasonably request.
If the obligations of the Underwriters shall be terminated for any reason permitted by
this Purchase Contract, this Purchase Contract shall terminate and the Underwriters shall be
under no further obligation hereunder, except as set forth in Section 10 hereof.
9. The Underwriters may terminate this Purchase Contract by notifying the City of
their election to do so if, after its execution and prior to the. Closing, the market price or
marketability, at the initial offering price set forth herein, of the Series 2002 Bonds shall have
been materially adversely affected, in the reasonable judgment of the Underwriters, by reason
of any of the following:
A. Legislation enacted by the Congress or recommended to the Congress
for passage by the President of the United States, or favorably reported for passage to either
House of the Congress by any committee of such House to which such legislation has been
referred for consideration, or a decision rendered by a court established under Article III of
the Constitution of the United States or by the Tax Court of the United States, or an order,
ruling, regulation (final, temporary or proposed) or official statement or pronouncement
issued or made:
(i) By or on behalf of the Treasury Department of the United States or the
Internal Revenue Service or other governmental agency having jurisdiction over the
subject matter, with the purpose or effect, directly or indirectly, of imposing federal
income taxation upon such revenues as would be received by the City or the Paying
Agent or upon such interest as would be received by the owners of the Series 2002
Bonds or which would have the effect of changing, directly or indirectly, the federal
income tax consequences with respect to the owners of the Series 2002 Bonds; or
(ii) By or on behalf of the Securities and Exchange Commission, or any
other governmental agency having jurisdiction of the subject matter, to the effect that
obligations of the general character of the Series 2002 Bonds, including any or all
(i2, '79e
underlying security, are not exempt from registration under the Securities Act of 1933,
as amended, or that the Resolution is not exempt from qualification under the Trust
Indenture Act of 1939, as amended.
B. The occurrence of any new outbreak of hostilities or any national or
international calamity or crises, including a financial crises, or any escalation of activities
involving the military forces of the United States, the effect of which on the financial markets
or the government of the United States is such as, in the reasonable judgment of the
Underwriters in consultation with the City, would materially adversely affect the market for
or market price of the Series 2002 Bonds (it being agreed to by the parties hereto that no such
hostilities, calamity or crisis was occurring as of the date hereof which had a material effect
upon the marketability of the Series 2002 Bonds).
C. The declaration of a general banking moratorium by federal, New York
or Florida authorities, or the general suspension of trading on the New York Stock Exchange.
D. The imposition by the New York Stock Exchange or any governmental
authority of any material restrictions not now in force with respect to the Series 2002 Bonds
or obligations of the general character of the Series 2002 Bonds or securities generally, or the
material increase of any such restrictions now in force, including those relating to the
extension of credit by, or the charge to the net capital requirements of, underwriters.
E. An order, decree or injunction of any court of competent jurisdiction, or
order, ruling, regulation or official statement by the Securities and Exchange Commission, or
any other governmental agency having jurisdiction of the subject matter, issued or made to
the effect that the issuance, offering or sale of obligations of the general character of the
Series 2002 Bonds or the issuance, offering or sale of the Series 2002 Bonds, including any
underlying obligations, as contemplated hereby or by the Official Statement, is or would be
in violation of the federal securities laws as amended and then in effect.
F. The withdrawal or downgrading of the rating of any bonds supported by
an insurance policy of the Bond Insurer.
G. The President of the United States, the Office of Management and
Budget, the Department of Treasury, the Internal Revenue Service or any other governmental
body, department, agency or commission of the United States or the State of Florida shall
take or propose to take any action or implement or propose regulations, rules or legislation
which, in the reasonable judgment of the Underwriters, materially adversely affects the
market price of the Series 2002 Bonds or causes the Official Statement to contain an untrue
statement of a material fact or to omit to state a material fact which is necessary in order to
make the statements therein, in light of the circumstances under which they are made, not
misleading in any material respect.
02- 797
H. Any executive order shall be announced, or any legislation, ordinance,
rule or regulation shall be proposed by or introduced in, or be enacted by any governmental
body, department, agency or commission of the United States or the State of Florida or the
State of New York, having jurisdiction over the subject matter, or a decision by any court of
competent jurisdiction within the United States or within the State of Florida or the State of
New York shall be rendered which, in the reasonable judgment of the Undewriters,
materially adversely affects the market price of the Series 2002 Bonds or causes the Official
Statement to be misleading in any material respect.
I. Bond Insurer's Commitment to insure the Series 2002 Bonds shall have
been repudiated by the Bond Insurer or any litigation or proceeding shall be pending or
threatened questioning the validity or enforceability thereof or seeking to enjoin performance
thereunder or the Underwriters or the City shall have received notice from Bond Insurer that
it will be unable to perform under the Policy.
J. An adverse ruling in the pending litigation described in the Official
Statement under the heading "LITIGATION," which materially impairs the ability of the City
to make payment on the Series 2002 Bonds.
K. Any event occurring, or information becoming known which, in the
reasonable judgment of the Underwriters, makes untrue in any material respect any statement
or information contained in the Official Statement, or has the effect that the Official
Statement contains any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
10. The Underwriters shall be under no obligation to pay any expenses incident to
the performance of the City's obligations hereunder, including but not limited to (A) the cost
of printing and preparation for printing or other reproduction of the Preliminary Official
Statement and the Official Statement, (B) the cost of printing and preparation for printing or
other reproduction or recording or filing or publishing (or paying any tax, fee or other
governmental charge with respect thereto) of any document or instrument referred to herein,
(C) the cost of preparation, printing, execution, safekeeping, transportation and delivery to
the Underwriters of the Series 2002 Bonds, (D) the fees and disbursements of Bond Counsel,
Disclosure Counsel, Counsel to the City, Counsel to Bond Insurer and any other experts or
consultants retained by the City, (E) the fees and expenses of the City under the Resolution,
(F) all fees and costs of, Moody's Investors Service, S&P and Fitch, Inc. for issuing the
ratings for the Series 2002 Bonds, and (G) the cost of the premium for the Policy.
02- 797
The Underwriters shall pay all sale, "Blue Sky" fees, fees and disbursements of
Counsel to the Underwriters and advertising expenses in connection with the public offering
of the Series 2002 Bonds.
11. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing in person or by certified or
registered mail, return receipt requested, at its address set forth above, addressed Attention:
City Clerk. Any notice or other communication to be given to the Underwriters under this
Purchase Contract may be given by delivering the same in person or be certified or registered
mail, return receipt requested, to Morgan Stanley & Co., 200 South Orange Avenue, Suite
1440, Orlando, Florida 32801, Attention: Rawn Williams. All notices or communications
hereunder by any party shall be given and served upon each other party.
12. This Purchase Contract shall constitute the entire agreement between the City
and the Underwriters and is made solely for the benefit of the City and the Underwriters. No
other person shall acquire or . have any rights hereunder or by virtue hereof. All
representations, warranties, covenants and agreements of the City in this Purchase Contract
shall remain operative and in full force and effect, regardless of (a) any investigation made
by or on behalf of the Underwriters, and (b) the delivery of any payment for the Series 2002
Bonds hereunder.
13. This Purchase Contract may be amended only by an agreement in writing
between the City and the Underwriters.
14. The validity, interpretation and performance of this Purchase Contract shall be
governed by the laws of the State of Florida.
[The remainder of this page is intentionally left blank]
0 797
15. This Purchase Contract may be executed in any number of counterparts, each
of which so executed and delivered shall constitute an original and all together shall
constitute but one and the same instrument.
MORGAN STANLEY & CO., INCORPORATED
as Representative of the Underwriters
Authorized Signatory
Accepted this day of July, 2002 by and on behalf of The City of Miami,
Florida, pursuant to the provisions of the Resolution.
THE CITY OF MIAMI, FLORIDA
ATTEST:
By: By:
City Clerk City Manager
Approved as to Form
and Correctness
By:
City Attorney
02- 797
EXHIBIT A
$160,0009000*
THE CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX BONDS (HOMELAND
DEFENSE/NEIGHBORHOOD CAPITAL IMPROVEMENT PROJECTS)
Maturity Date
Optional Redemption
SERIES 2002
TERMS OF SERIES 2002 BONDS
Principal Amount Interest Rate
Yield
The Series 2002 Bonds maturing on or prior to 1, are not redeemable
prior to their respective dates of maturity. The Series 2002 Bonds maturing on and after
* Preliminary, subject to change.
02- 797
_ 1, , are subject to redemption at the option of the City on or after
1, , in whole or in part at any time, in such manner as shall be determined by
the Bond Registrar, at a redemption price (expressed as a percentage of the principal amount
of the Series 2002 Bonds to be redeemed) plus accrued interest to the date fixed for
redemption as follows.
Redemption Period
(Both Dates Inclusive) Redemption Price
_ 1, through 31,
_ 1, through 31,
_ 1, and thereafter
Mandatory Redemption
The Series 2002 Bonds maturing on 1, will be subject to mandatory
redemption prior to maturity, by lot, in such manner as the Registrar may deem appropriate,
at a redemption price equal to par plus accrued interest to the redemption date, on September
1, and on each 1 thereafter, from moneys deposited in the Sinking Fund,
in the following principal amounts in the years specified:
Year
Principal
Amount
U2-~ 797
EXHIBIT B
$160,0009000*
THE CITY OF MIAMI, FLORIDA
LIMITED AD VALOREM TAX BONDS (HOMELAND
DEFENSE/NEIGHBORHOOD CAPITAL IMPROVEMENT PROJECTS)
SERIES 2002
DISCLOSURE STATEMENT
July , 2002
The City Commissioners
of The City of Miami, Florida
Miami, Florida 33133
Ladies and Gentlemen:
In connection with the proposed issuance by The City of Miami, Florida (the "City")
of the principal amount of the bonds referred to above (the "Series 2002 Bonds"), Morgan
Stanley & Co., Incorporated, Jackson Securities, Inc., J.P. Morgan Securities, Inc., Lehman
Brothers, and Salomon Smith Barney and UBS PaineWebber Inc. (collectively, the
"Underwriters"), have agreed to underwrite a public offering of the Series 2002 Bonds.
Arrangements for underwriting the Series 2002 Bonds will include a Purchase Contract
between the, City and the Underwriters, which will embody the negotiations in respect
thereof.
The purpose of this letter is to furnish, pursuant to the provisions of Section
218.385(6), Florida Statutes, certain information in respect of the arrangement contemplated
for the underwriting of the Series 2002 Bonds, as follows:
(a) The nature and estimated amount of expenses to be incurred by the
Underwriters in connection with the purchase and reoffering of the Series 2002 Bonds are set
forth on Schedule B-1 attached hereto.
(b) No person has entered into an understanding with the Underwriters for any paid
or promised compensation or valuable consideration, directly or indirectly, expressly or
* Preliminary, Subject to change.
02- 797
implied, to act solely as an intermediary between the City and the Underwriters or to exercise
or attempt to exercise any influence to effect any transaction in the purchase of the Series
2002 Bonds.
(c) The amount of underwriting spread expected to be realized is as follows:
Per $1,000 Bond Dollar Amount
Takedown
Management Fee
Underwriting Risk
Underwriters' Expenses*
Total Underwriting Spread
(d) No other fee, bonus or other compensation has or will be paid by the
Underwriters in connection with the issuance of the Series 2002 Bonds to any person not
regularly employed or retained by the Underwriters (including any "finder," as defined in
Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be
incurred and paid by the Underwriters, as set forth in Schedule B-1.
(e) The names and addresses of the Underwriters are:
Morgan Stanley & Co., Incorporated
Sun Bank Center
200 S. Orange Avenue, Suite 1440
Orlando, Florida 32801
i Jackson Securities, Inc.
801 Brickell Avenue, Suite 934
Miami, Florida 33131
Lehman Brothers
1111 Brickell Avenue
Miami, Florida 33131
J.P. Morgan Securities, Inc.
5201 Blue Lagoon Drive
Suite 889, 8`h Floor
Miami, Florida 33126
* Underwriters are responsible for to paying the fees of Hunton & Williams in the amount of $ for professional
services rendered to the Underwriters, which fees are to be paid from Underwriters' funds and will not be derived
from bond proceeds.
02-- 797
Salomon Smith Barney
110 E. Broward Boulevard, Suite 1850
Ft. Lauderdale, Florida 33301
UBS PaineWebber Inc.
200 South Orange Avenue, Suite 2200
Orlando, Florida 32801
We understand that you do not require any further disclosure from the Underwriters,
pursuant to Section 218.385(4), Florida Statutes.
MORGAN STANLEY & CO.,
INCORPORATED, on behalf of itself
and as Representative of the
Underwriters
L -11A
i�
Authorized Signatory
02- .'797
SCHEDULE B-1
UNDERWRITERS' EXPENSES*
/1000 Amount
Dalcomp/Dalnet Fee
Other Expenses
BMA Fee
Interest on Day Loan
Travel Expenses
CUSIP Fee
DTC Fee
Total
* Underwriters are responsible for to paying the fees of Hunton & Williams in the amount of $ for
professional services rendered to the Underwriters, which fees are to be paid from Underwriters' funds and will not be
derived from bond proceeds.
02- 797
EXHIBIT C
[Form of Supplemental Bond Counsel Opinion]
(LETTERHEAD OF BOND COUNSEL)
August , 2002
Morgan Stanley & Co., Incorporated
Orlando, Florida, as Representative
of the Underwriters
Re: $
Tax Bonds
The City of Miami, Florida Limited Ad Valorem
(Homeland Defense/Neighborhood Capital
Improvement Projects), Series 2002
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance on this date of the
obligations described above (the "Series 2002 Bonds"). This opinion is being delivered as
the "supplemental opinion" of Bond Counsel pursuant to the Purchase Contract, dated
July , 2002; all terms used herein shall have the meanings assigned thereto in said
Purchase Contract.
It is our opinion that:
1. The City has duly adopted the Resolution and authorized or ratified (i) the
execution, delivery and performance by the City of the Disclosure Agreement, and (ii) the
execution, delivery and distribution of the Official Statement, and (iii) the taking of any and
all such action as may be required on the part of the City to carry out, give effect to and
consummate the transactions contemplated by the aforesaid agreements and instruments.
2. The Resolution constitutes a legal, valid and binding special obligations of the
City enforceable in accordance with its respective terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors'
rights generally and to general principles of equity.
02- 797
3. The Series 2002 Bonds are not subject to the registration requirements of the
Securities Act of 1933, as amended and the Resolution is exempt from qualification under
the Trust Indenture Act of 1939, as amended.
4. The statements contained in the Official Statement under the headings
"Introduction," "Purpose of the Issue," and—' -`Description of the Series 2002 Bonds"
(excluding information relating to DTC and its book -entry only registration system),
"Security and Source of Payment for the Series 2002 Bonds" and "Continuing Disclosure,"
"APPENDIX B Form of Bond Resolution," excluding any financial, statistical or
demographic information therein, insofar as the same purport to describe the Resolution, the
Disclosure Agreement, the Series 2002 Bonds or the Act, and the statements contained in the
Official Statement under "Tax Matters," insofar as the same purport to describe the Internal
Revenue Code of 1986, as amended, fairly and accurately present the information purported
to be described therein.
Respectfully submitted,
02- 797
EXHIBIT D
[Form of City Attorney's Opinion]
(LETTERHEAD OF CITY ATTORNEY'S OFFICE)
August , 2002
Morgan Stanley & Co., Incorporated
Orlando, Florida,
as Representative of
the Underwriters
Re: $ The City of Miami, Florida Limited Ad Valorem
Tax Bonds (Homeland Defense/Neighborhood Capital
Improvement Projects), Series 2002
Ladies and Gentlemen:
This opinion is being delivered as the opinion of the City Attorney pursuant to the
Purchase Contract, dated July , 2002, relating to the above-described Series 2002 Bonds.
All terms used herein shall have the meanings assigned thereto in said Purchase Contract.
I am -6f the opinion that:
1. The City is a municipal corporation of the State of Florida duly organized and
validly existing under its charter, the Constitution and laws of the State of Florida.
2. The City has and had, as the case may be, full legal right, power and authority
to (a) pledge the Limited Ad Valorem Tax and a portion of the Non -Ad Valorem Revenue of
the City in the manner described in the Official Statement; (b) issue the Series 2002 Bonds,
for the purpose of funding certain capital improvement projects with the City, including
homeland security, neighborhood improvements, capital projects and infrastructure
improvements in the manner contemplated by the Resolution and the Official Statement;
(c) secure the Series 2002 Bonds in the manner contemplated by the Official Statement and
the Resolution; (d) execute and deliver the Purchase Contract, the Disclosure Agreement;
(e) deliver the Series 2002 Bonds to the Underwriters as provided in the Purchase Contract;
and (f) carry out and consummate all other transactions contemplated by the aforesaid
02- 797
agreements and instruments, and the City has complied with all provisions of applicable law
in all matters relating to such transactions required to be followed on or prior to the date
hereof.
3. The City has duly adopted the Resolution and has duly, authorized or ratified,
as the case may be (a) the execution, delivery and performance of the Purchase Contract, the
Disclosure Agreement, the Series 2002 Bonds, (b) the delivery and distribution of the
Preliminary Official Statement and the Official Statement, as well as the execution of the
Official Statement, and (c) the taking of any and all such action as may be required on the
part of the City to carry out, give effect to and consummate the transactions contemplated by
the aforesaid agreements and instruments.
4. The Purchase Contract and the Disclosure Agreement (the "Financing
Documents") have each been duly authorized, executed and delivered by the City and each of
such documents constitute legal, valid and binding obligations of the City enforceable in
accordance with its respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally or by
general principles of equity.
5. All approvals, consents and orders of and filings with any governmental
authority or agency which would constitute a condition precedent to the issuance of the
Series 2002 Bonds or the execution and delivery of or the performance by the City of its
obligations under the Financing Documents have been obtained or made and any consents,
approvals and orders so received or filings so made are in full force and effect; provided,
however, that no representation is made concerning compliance with the federal securities
laws or the securities or blue sky laws of the various states.
6. The authorization, execution, delivery and performance of the Financing
Documents and any other agreement or instrument to which the City is a party, used or
contemplated for use in the consummation of the transactions contemplated by the Official
Statement or the Financing Documents and compliance with the provisions of each such
instrument, do not and will not conflict with, or constitute or result in a violation or breach of
or a default under, the Constitution of the State of Florida, or any existing law, administrative
regulation, rule, decree or order, state or federal, or, a material provision of any agreement,
indenture, mortgage, lease, note or other agreement or instrument to which the City or its
properties or any of the officers of the City as such is subject.
7. Except as described in the Official Statement, no litigation or other proceedings
are pending, or to my knowledge threatened, before or by any court, government agency,
public board or body for which the City has received notice (a) restraining or enjoining, or
seeking to restrain or enjoin, the authorization, sale, execution, or delivery of any of the
Series 2002 Bonds, or (b) in any way questioning or affecting the validity of any provision of
U2-° 797
the Financing Documents, or (c) in any way questioning or affecting the validity of any of the
proceedings or authority for the authorization, sale, execution or delivery of the Series 2002
Bonds, or of any provision, program or transactions made or authorized for their payment, or
(d) questioning or affecting the organization or existence of the City or the title of any of its
officers to their respective offices, or (e) questioning or affecting the power or authority of
the City to fund the Project or (f) questioning or affecting the power of the City to fix, revise
and collect the -moneys and revenues pledged to the payment of the Series 2002 Bonds.
8. The statements contained in the Official Statement under the headings
"Introduction," "Purpose of the Issue," "Security and Source of Payment for the Series 2002
Bonds," "The City of Miami," "Litigation," "General Information Regarding City and
Covenant Revenues," "Disclosure Required by Florida Blue Sky Regulations" and
"APPENDIX A General Information Regarding the City of Miami" (excluding any financial,
statistical or demographic information therein) constitute fair and accurate descriptions of the
legal matters, agreements and ordinances relating to the City which are referred to therein.
9. With respect to the information contained in the Official Statement and based
upon my 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, I have no reason to believe that the information contained in the Official
Statement relating to legal matters affecting the City contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading.
Respectfully submitted,
02- 797
EXHIBIT "B"
PAYING AGENT AND REGISTRAR AGREEMENT
02- 797
PAYING AGENT AND REGISTRAR AGREEMENT
THIS PAYING AGENT AND REGISTRAR AGREEMENT (the "Agreement") is
entered into as of the I" day of July, 2002, by and between the CITY OF MIAMI, FLORIDA
(the "City"), and Wachovia Bank, National Association, a national banking association duly
organized and existing under the laws of the United States of America having its designated
corporate trust office in Miami, Florida (the "Bank"). `
WITNESSETH:
WHEREAS, the City has determined to issue $ in aggregate principal
amount of its City of Miami, Limited Ad Valorem Tax Bonds, Series 2002 (the "Series 2002
Bonds"), pursuant to the provisions of Ordinance No. 12137 enacted on October 11, 2001 by the
City Commission of the City (the "City Commission") and Resolution No. R-02-_-_-, adopted by
the City Commission on July 9, 2002 (collectively, the "Bond Resolution"); and
WHEREAS, the City represents that all things necessary to make the Series 2002 Bonds
the valid obligations of the City, in accordance with their terms, will be taken upon the issuance
and delivery thereof; and
WHEREAS, the City desires that the Bank acts as the Paying Agent of the City in paying
the principal of and interest on the Series 2002 Bonds, in accordance with the terms thereof, and
that the Bank acts as the Bond Registrar for the Series 2002 Bonds; and
WHEREAS, the Bank has represented that it is duly qualified to perform the duties
described herein as Paying Agent and Bond Registrar; and
WHEREAS, the City and the Bank each have duly authorized the execution and delivery
of this Agreement; and all things necessary to make this Agreement the valid agreement of the
City and the Bank, in accordance with its terms, have been done;
NOW, THEREFORE, for and in consideration of the premises and the covenants herein
contained, the City and the Bank hereby agree as follows:
ARTICLE 1
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
SECTION 1.01 Appointment.
The City hereby appoints the Bank to act as Paying Agent with respect to the Series 2002
Bonds, to pay to the Bondholders of the Series 2002 Bonds the principal of and interest on all or
any of the Series 2002 Bonds as the same shall become due and payable.
The City hereby appoints the Bank as Bond Registrar with respect to the Series 2002
Bonds.
02- '79'7
Miami: Docutnent M: 9732v
The Bank hereby accepts its appointment, and agrees to act as the Paying Agent and the
Bond Registrar for the Series 2002 Bonds, and as such, to perform the functions of Paying Agent
and Bond Registrar, as described herein and in the Bond Resolution, and in the event of conflict,
the terms of the Bond Resolution shall govern.
SECTION 1.02 Compensation.
As compensation for the Bank's services as Ptying Agent and Bond Registrar, the City
hereby agrees to pay the Bank the fees and amounts set forth in Exhibit A hereto.
In addition, the City agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Bank in accordance with any of
the provisions hereof. Such fees and expenses shall be paid to the Bank as billed.
ARTICLE 2
DEFINITIONS
SECTION 2.01 Definitions.
For all purposes of this Agreement, except as otherwise expressly provided, or unless the
context otherwise requires:
"Authorized Representative" shall mean an authorized representative of the City, as
designated by the City Commission from time to time and shall initially include the Mayor, City
Manager and the Director of Finance.
"Bond Insurance Agreement" shall mean that certain Agreement Regarding Bond
Insurance, dated as of July 1, 2002, by and between the City and the Bond Insurer.
"Bond Insurer" shall mean
"Bond Register" shall mean the registration books maintained by the Bond Registrar -for
the Series 2002 Bonds.
"Bondholder" shall mean a Person in whose name a Series 2002 Bond is registered in the
Bond Register.
"Municipal Bond Insurance Policy" shall mean Municipal Bond New Issue Insurance
Policy No. issued by the Bond Insurer insuring the payment of the principal of and
interest on the Series 2002 Bonds.
"Person" shall mean any individual, corporation, partnership, joint venture, association,
joint stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government.
"Predecessor Bonds" of any particular Series 2002 Bond shall mean every previous
Series 2002 Bond evidencing all or a portion of the same obligation as that evidenced by such
0)
Miartd; Document #: 9732 1
U2 79'7
particular Series 2002 Bond (for the purposes of this definition, any Series 2002 Bond registered
and delivered under the provisions of the Bond Resolution in lieu of a mutilated, lost, destroyed,
or stolen Series 2002 Bond shall be deemed to evidence the same obligation as the mutilated,
lost, destroyed, or stolen Series 2002 Bond).
"Record Date" shall mean the fifteenth day (whether or not a business day) of the month
next preceding the applicable interest payment date.
"Responsible Officer" when used with respect to the Bank shall mean the President, any
Vice President, any Trust Officer, Assistant Trust Officer or Client Service Officer, or any other
officer of the Bank customarily performing functions similar to those performed by any of the
above designated officers, and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of or familiarity with the
particular subject.
"Stated Maturity" shall mean the date specified as the fixed date on which the principal
of a Series 2002 Bond is due and payable.
SECTION 2.02 Other Definitions.
The terms "Bank", "City", "Bond Resolution" and "Series 2002 Bonds" have the
meaning assigned to them in the opening paragraph of this Agreement or in the preamble hereto.
The terms "Paying Agent" and "Bond Registrar" refer to the Bank when it is performing
the respective functions associated with such terms in this Agreement.
ARTICLE 3
THE SERIES 2002 BONDS
SECTION 3.0J Forms Generally.
The Series 2002 Bonds, the certificate of authentication and the assignment to be printed
on each of the Series 2002 Bonds, shall be in the forms set forth in the Bond Resolution, with
such appropriate insertions, omissions, substitutions, and other variations as are permitted or
required by the Bond Resolution and approved by an Authorized Representative of the City.
SECTION 3.02 Execution, Registration, Delivery, and Dating.
The Series 2002 Bonds shall be executed on behalf of the City as directed by, the Bond
Resolution. The signature of any of the officers of the City on the Series 2002 Bonds may be
manual or facsimile. Series 2002 Bonds bearing the manual or facsimile signatures of individuals
who were at the time the proper officers of the City shall bind the City, notwithstanding that such
individuals or any of them shall cease to hold such offices prior to the certification of registration
and delivery of the Series 2002 Bonds or shall not have held such offices at the date of the Series
2002 Bonds.
02- '79'7
3
Miami; Documcnt N: 9732v1
At any time and from time to time after the execution and delivery of this Agreement, the
Bondholder may deliver to the Bank for transfer or exchange Series 2002 Bonds accompanied by
instructions designating the Persons, maturities, and principal amounts to and in which such
Series 2002 Bonds are to be transferred, and the Bank shall thereupon, within not more than
three (3) business days, register and deliver such Series 2002 Bonds as provided herein and in
such instructions. Every Series 2002 Bond surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer, the signature on which has been
guaranteed by an officer of a federal or state bank or a member of the National Association of
Securities Dealers, in form satisfactory to the Bank, duly executed by the Bondholder thereof or
his attorney duly authorized in writing.
All Series 2002 Bonds registered and delivered by the Bank hereunder shall be dated as
provided in the Bond Resolution.
No Series 2002 Bond shall be entitled to any right or benefit under this Agreement, or be
valid or obligatory for any purpose, unless there appears on such Series 2002 Bond a certificate
of authentication substantially in the form provided in the Bond Resolution, executed by the
Bank by manual signature, and such certificate upon any Series 2002 Bond shall be conclusive
evidence, and the only evidence, that such Series 2002 Bond has been duly certified or registered
and delivered.
SECTION 3.03 Person Deemed Owners.
The City, the Bank, and any agent of the City or the Bank may treat the Person in whose
name any Series 2002 Bond is registered as the owner of such Series 2002 Bond for the purpose
of receiving payment of the principal of and interest on such Series 2002 Bond and for all other
purposes whatsoever whether or not such Series 2002 Bond be overdue, and, to the extent
permitted by law, the City, the Bank, and any such agent shall not be affected by notice to the
contrary, except to the extent expressly so provided in the Bond Resolution with respect to rights
that may be exercised by the issuer of any municipal bond 'insurance policy or other credit
facility relatirjg"to the Series 2002 Bonds.
ARTICLE 4
PAYING AGENT
SECTION 4.01 Duties of Paying Agent.
As Paying Agent the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the City, pay on the behalf of the City the principal of
the Series 2002 Bonds at their Stated Maturity to the Bondholder upon surrender of the Series
2002 Bonds to the Bank.
As Paying Agent the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the City, pay on behalf of the City on the payment date
the interest on the Series 2002 Bonds when due by computing the amount of interest to be paid
each Bondholder and (i) preparing and mailing checks by first-class mail, postage prepaid, to the
02_, 79'7
4
Miami: Document 0: 9732v!
Bondholders of the Series 2002 Bonds (or their Predecessor Bonds) on the Record Date,
addressed to their address appearing on the Bond Register; provided, however, that if ownership
of the Series 2002 Bonds is maintained in a book -entry only system by a securities depository,
such payment may be made by automated wire transfer to such securities depository or its
nominee or (ii) wiring funds to the Bondholders who have requested payment by wire transfer in
accordance with Section S.A. of the Bond Resolution, or (iii) utilizing such other customary
banking arrangements to which the Bondholders and the Bank agree.
r
The Bank expressly acknowledges its understanding and acceptance of its duties as
Paying Agent in the Bond Resolution, and the Bond Insurance Agreement. The Bank, as Paying
Agent, shall immediately notify Bond Insurer if on any interest payment date there are
insufficient moneys to make any payments of principal of and interest on the Series 2002 Bonds.
The Paying Agent shall also immediately notify Bond Insurer upon the occurrence of any
payment default under any related security agreement of which the Paying Agent has knowledge.
SECTION 4.02 Payment Dates.
The City hereby instructs the Bank to pay the principal of and interest on the Series 2002
Bonds on the dates specified or provided for in the Bond Resolution and other pertinent
documents relating to the Series 2002 Bonds.
ARTICLE 5
BOND REGISTRAR
SECTION 5.01 Transfer and Exchange.
The City shall keep at the Bank a register (herein sometimes referred to as the "Bond
Register"), which shall be maintained by the Bank, to provide for the registration of Series 2002
Bonds and transfers of the Series 2002 Bonds. The Bank is hereby appointed "Bond Registrar"
for the purpose of registering Series 2002 Bonds and transfers of Series 2002 Bonds as herein
provided. The Bank agrees to maintain the Bond Register while it is Bond Registrar.
Upon surrender for transfer of any Series 2002 Bond at the corporate trust office of the
Bank the Bank shall, not more than three (3) business days after request and presentation,
register and deliver, in the name of the designated transferee or transferees, one or more new
fully registered Series 2002 Bonds of the same maturity, of any authorized denominations, and of
a like aggregate principal amount. To the extent so provided with respect to the Series 2002
Bonds, at the option of the Bondholder, Series 2002 Bonds may be exchanged for other Series
2002 Bonds of the same maturity, of any authorized denominations, and of like aggregate
principal amount, upon surrender of the Series 2002 Bonds to be exchanged at the corporate trust
office of the Bank. Whenever any Series 2002 Bonds are to be surrendered for exchange, the
City shall execute and the Bank shall authenticate, register and deliver, the Series 2002 Bonds
which the Bondholder making the exchange is entitled to receive.
All Series 2002 Bonds issued upon any transfer or exchange, after authentication by the
Bank, shall be the valid obligations of the City, evidencing the same debt, and entitled to the
5 02- 797
Miami; Document K: 9732.1
same benefits hereunder and under the Bond Resolution, as the Series 2002 Bonds surrendered
upon such transfer or exchange.
Every Series 2002 Bond surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Bondholder thereof or his
f attorney duly authorized in writing, and shall be numbered in order of their authentication by the
Bank. The Bond Registrar may request any supporting documentation necessary to effect a re -
registration.
No service charge shall be made to the Bondholder for any registration, transfer, or
exchange of Series 2002 Bonds, but the City or the Bond Registrar may require payment of a
sum sufficient to cover any tax, fee or other governmental charge that may be imposed in
connection with any transfer or exchange of Series 2002 Bonds.
SECTION 5.02 Certificates.
In the event that the book -only entry system for the Series 2002 Bonds is terminated, the
City shall provide an adequate inventory of unauthenticated Series 2002 Bond certificates to
facilitate transfers. The Bank covenants that it will maintain any such Series 2002 Bond
certificates in safekeeping and will use reasonable care in maintaining such Series 2002 Bonds in
safekeeping, being not less than the care which it takes in connection with other governments or
corporations for which it serves as registrar, or which it maintains for its own securities.
SECTION 5.03 Form of Bond Register.
The Bank, as Bond Registrar, will maintain the record of the Bond Register in accordance
with the Bank's general practices and procedures in effect from time to time. The Bank shall not
be obligated to maintain such Bond Register in any form other than those which the Bank has
currently avai�le and currently utilizes at the time.
The Bond Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
SECTION 5.04 List of Bondholders.
The Bank will provide the City, at any time requested by the City, upon payment of any
copying costs, a copy of the information contained in the Bond Register. The City may also
inspect the Bond Register at any time the Bank is customarily open for business, provided that
reasonable time is allowed the Bank to provide an up to date listing or to convert the information
into written form.
The Bank will not release or disclose the content of the Bond Register to any person other
than to, or at the written request of, an Authorized Officer or employee of the City, except upon
receipt of a subpoena or court order. Upon receipt of a .subpoena or court order the Bank will
notify the City so that the City may contest a subpoena or court order.
0
IJi�mi� Ib........nr Y• 0717..1
02 .6, 79'7
SECTION 5.05 Return of Cancelled Certificates.
The Bank will surrender to the City, at such reasonable intervals as it determines,
certificates of destruction in lieu of which or in exchange for which other Series 2002 Bonds
have been issued, or which have been paid.
SECTION 5.06 Mutilated, Destroyed, Lost, or Stolen Bonds.
The City hereby instructs the Bank to authenticate and deliver Series 2002 Bonds in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Series 2002 Bonds as long as the
same does not result in an over -issuance, all in conformance with the requirements of the Bond
Resolution.
The Bank will authenticate and deliver a new Series -2002 Bond in exchange for a
mutilated Series 2002 Bond surrendered to it. The Bank will issue; a new Series 2002 Bond in
lieu of a Series 2002 Bond for which it received written representation from the Bondholder that
the certificate representing such Series 2002 Bond is destroyed, lost or stolen, without the
surrender or production of the original certificate. The Bank will pay on behalf of the City the
principal of a Series 2002 Bond for which it receives written representation that such Series 2002
Bond is destroyed, lost or stolen following the Stated Maturity of the Series 2002 Bond, without
surrender or production of the original certificate.
The Bank will not issue a replacement Series 2002 Bond or pay such replacement Series
2002 Bond unless there is delivered to the Bank such security or indemnity as it may require
(which may be by the Bank's blanket bond) to save both the Bank and the City harmless.
On satisfaction of the Bank and the City, the certificate number on the Series 2002 Bond
will be cancelled with a notation on the Bond Register that it has been mutilated, destroyed, lost,
or stolen, and a new Series 2002 Bond will be issued of the same series and of like tenor and
principal amount bearing a number (according to the Bond Register) not contemporaneously
outstanding.
The Bank may charge the Bondholder the Bank's reasonable fees and expenses in
connection with issuing a new Series 2002 Bond in lieu of or exchange for a mutilated,
destroyed, lost or stolen Series 2002 Bond.
SECTION 5.07 Surety Bond.
The City hereby accepts the Bank's current blanket bond for lost, stolen or destroyed
certificates and any substantially similar future substitute blanket bond for lost, stolen or
destroyed certificates that the Bank may arrange, and agrees that the coverage under any such
blanket bond is acceptable to it and meets the City's requirements as to security or indemnity.
The Bank need not notify the City of any changes in the bond or other company giving such
bond, or the terms of any such bond. The blanket bond then utilized by the Bank for the purpose
of lost, stolen or destroyed certificates by the Bank is available for inspection by the City upon
request.
02- '7 9'7
7
Miami: Document N: 9732v 1
SECTION 5.08 Transaction Information to City.
The Bank will, within a reasonable time after receipt of a written request from the City,
furnish the City information as to the Series 2002 Bonds it has paid pursuant to Section 4.01
hereof, Series 2002 Bonds it has delivered upon the transfer or exchange of any Series 2002
Bonds pursuant to Section 5.01 hereof, and Series 2002 Bonds it has delivered in exchange for or
in lieu of mutilated, destroyed, lost or stolen Series 2002 Bonds pursuant to Section 5.06 hereof.
ARTICLE 6
THE BANK
SECTION 6.01 Duties Of the Bank.
The Bank undertakes to perform the duties of Paying Agent and Bond Registrar as set
forth herein and in the Bond Resolution and agrees to use reasonable care in the performance
thereof, and in the event of conflict with the Bond Resolution, the terms of the Bond Resolution
shall govern. The Bank hereby agrees to use the funds deposited with it for payment of the
principal of and interest on the Series 2002 Bonds, to pay the Series 2002 Bonds as the same
shall become due and further agrees to establish and maintain all accounts and funds as may be
required for the Bank to function as Paying Agent.
SECTION 6.02 Reliance on Documents, Etc.
(a) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(b) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercisof any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(c) The Bank may rely and shall be protected in acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond,
note, security or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Bank shall not be bound to make any investigation
into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, note, security or other paper or document
supplied by the City.
(d) The Bank may consult with counsel and the written advice of such counsel or any
written opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
Yi
y9
02 79'7
(e) The Bank may exercise any of its powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
SECTION 6.03 Recitals of the City.
The recitals contained herein, in the Bond Resolution and in the Series 2002A Bonds
shall be taken as the statements of the City and the Bank assumes no responsibility for their
correctness.
The Bank shall in no event be liable from its own funds to the City, any Bondholder or
Bondholders of any Series 2002 Bond or any other Person for any amount due on any Series
2002 Bond.
SECTION 6.04 Bank May Hold Series 2002 Bonds.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Series 2002 Bonds and may otherwise deal with the City with the same rights it would have if it
were not the Paying Agent and Bond Registrar.
SECTION 6.05 Moneys Held by Bank.
Money held by the Bank hereunder shall be segregated from any other funds of the Bank
and the City, and such money shall be held in trust for the benefit of the Bondholders of the
Series 2002 Bonds.
Any money deposited with the Bank for the payment of the principal of or interest on any
Series 2002 Bonds and remaining unclaimed three (3) years following the final maturity of the
Series 2002 Bonds shall be paid by the Bank to the City, and the Bondholder of such Series 2002
Bonds shall thereafter look only to the City for payment thereof, and all liability of the Bank with
respect to such moneys shall thereupon cease.
SECTION 6.06 Bank Not a Trustee.
Notwithstanding Section 6.05 hereof with respect to the responsibility of the Bank to hold
moneys hereunder in trust, this Agreement shall not be construed to require the Bank to enforce
any remedy which any Bondholder may have against the City during any default or event of
default under any agreement between any Bondholder and the City, including the Bond
Resolution, or to act as trustee for such Bondholder, other than the duty to provide notice of such
events to the Bond Insurer and to perform the duties provided in the Bond Resolution, the Bond
Insurance Agreement with respect to payment under the Municipal Bond Insurance Policy.
9
Miami; Document 8; 97320
02-- '797
SECTION 6.07 Bank Not Responsible for Series 2002 Bonds.
The Bank shall not be accountable for the use of any Series 2002 Bonds or for the use or
application of the proceeds thereof.
SECTION 6.08 Interpleader.
The City and the Bank agree that the Zank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, waive personal service of any
process and agree that service of process by certified or registered mail, return receipt requested,
to the addresses set forth in Section 7.03 hereof shall constitute adequate service. The City and
the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of
competent jurisdiction to determine the rights of any person claiming any interest herein.
ARTICLE 7
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
SECTION 7.02 Assignment.
This Agreement may not be assigned by either party without the prior written consent of
the other.
SECTION 7.03 Notices; Waiver.
Any request, demand, authorization, direction, notice, consent, waiver, or other document
provided or permitted hereby to be given or furnished to the City, the Bank or the Bond Insurer
shall be mailed first-class postage prepaid or hand delivered to the City, the Bank, the Bond
Insurer, respectively, at the addresses shown below:
City of Miami, Florida
444 S.W. 2°a Avenue, 10`� Floor
Miami, Florida 33130
Attn: City Manager
Wachovia Bank, National Association
10
02-- '7 9'7
Any notice to Bondholders provided by this Agreement of any event shall be sufficiently
given if it is in writing and mailed, first-class—ostage prepaid, to each Bondholder, at the address
of such Bondholder as it appears in the Bond Register.
In any case where notice to Bondholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Bondholder shall affect the
sufficiency of such notice with respect to all other Bondholders. Where this Agreement provides
for notice in any manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Bank, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon such waiver.
SECTION 7.04 Effect of Headings.
The article and section headings herein are for convenience only and shall not affect the
construction hereof.
SECTION 7.05 Successors and Assigns.
All covenants and agreements herein by the parties hereto shall bind their successors and
assigns, whether so expressed or not.
SECTION 7.06 Severability.
In case, any provision herein shall be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 7.07 Benefits of Agreement.
Nothing herein, express or implied, shall give to any person, other than the Bondholders
and the parties hereto and their successors hereunder, any benefit or any legal or equitable right,
remedy or claim hereunder.
SECTION 7.08 Entire Agreement.
This Agreement and the Bond Resolution constitute the entire agreement between the
parties hereto relative to the Bank acting as Paying Agent and Bond Registrar, and if any conflict
exists between this Agreement and the Bond Resolution, the Bond Resolution shall govern.
n?_. 797
11
Miami: Document 0: 9732v1
SECTION 7.09 Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall constitute one and the same Agreement.
SECTION 7.10 Termination.
Su*ct to Section 19 of the Bond Resolution, this Agreement will terminate on the date
the Bank issues its check or wire transfer for the final payment of principal of, redemption
premium, if any, and interest on the Series 2002 Bonds.
This Agreement may be earlier terminated with or without cause. Upon notice of such
termination, the City reserves the right to appoint a successor Paying Agent and Bond Registrar.
The Bank shall deliver all records and any unclaimed funds to the City or such successor without
a right of set off for any fees, charges or expenses due to the Bank. However, the Bank is entitled
to payment of all outstanding fees and expenses before delivering records to the City. In the
event this Agreement is terminated by giving written notice, then the Bank agrees, upon request
by the City, to give notice by first-class mail to all registered Bondholders and to Bond Insurer of
the name and address of the successor Paying Agent and Bond Registrar. Expenses for such
notice shall be paid by the City.
SECTION 7.11 Governing Law.
This Agreement shall be construed in accordance with and governed by the laws of the
State of Florida.
SECTION 7.12 Indemnification.
To the extent permitted by law, the City agrees to indemnify the Bank for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or willful misconduct
on its part, arising out of or in connection with acceptance or administration of this Agreement,
including the reasonable costs and expenses of defending itself against such claim or liability in
connection with the exercise or performance of any of its powers or duties hereunder.
Notwithstanding any provision in this Agreement, the Bank's rights to immunities and protection
from liability hereunder and its rights to payment of its fees, expenses and indemnities shall
survive the termination of this Agreement.
o2_ 797
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
CITY OF MIAMI, FLORIDA
(SEAL)
f
By:
Attest:
By:
City Clerk
(SEAL)
Attest:
City Manager
APPROVED AS TO FORM
AND CORRECTNESS
LE
City Attorney
WACHOVIA BANK, NATIONAL
ASSOCIATION
as Paying Agent and Bond Registrar
By: By:
Name:
Title:
02-- 79'7
13
Miami; Document N: 9732v1
Schedule of Paying Agent and Bond Registrar Fees
1. Annual Paying Agent and Bond Registrar Fee - $
2. In addition to the foregoing annual fees, the Paying Agent and Bond Registrar
shall be entitled to reimbursement for its reasonable out-of-pocket costs and disbursements,
including, without limitation, the reasonable fees and expenses of its counsel, associated with the
performance of its duties under the Paying Agent and Registrar Agreement.
02- 79'7
Miami: Document A: 9732v1
EXHIBIT "C"
PRELIMINARY OFFICIAL STATEMENT
02- '7 9'7
BMO Draft #3
7/2/02
Electronic Distribution of the Preliminary Official Statement Disclaimer Language
S 160,000,000*
SITE CITY OF MIAMI, FLORIDA
Limited Ad Valorem Tax Bonds, Series 2002
(Homeland Defense/Neighborhood Capital Improvement Projects)
DISCLAIMER
Electronic access to the following Preliminary Official Statement (including the information incorporated by
reference) is being provided to you as a matter of convenience only. The only official version of the Preliminary Official
Statement is the printed version available for physical delivery. Although the information contained in the following
Preliminary Official Statement has been formatted in a manner which should exactly replicate the printed Preliminary
Official Statement, physical appearance may differ for various reasons, including electronic communication difficulties
or particular user equipment. In order to assure accuracy, users should obtain a copy of and refer to the printed
Preliminary Official Statement. The user of this Preliminary Official Statement assumes the risk of any discrepancies
between the printed Preliminary Official Statement and the electronic version of this document.
Copies of the printed Preliminary Official Statement may be obtained from:
Morgan Stanley & Co., Incorporated
200 South Orange Avenue, Suite 1440
Orlando, Florida 32801
Tel:(407) 422-2505
Rawn.Williams@MorganStanley.com
Attention: Rawn Williams
This Preliminary Official Statement and the information contained herein are subject to completion or amendment
without notice. The posting of this Preliminary 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 securities described in the Preliminary Oficial Statement in any
jurisdiction in which such offer, solicitation or sale would be unlax jid prior to the registration or qualification under
the securities ws of any such jurisdiction.
By clicking on the hyperlink at the bottom of this page and accessing the following Preliminary Official Statement,
you will have been deemed to have (i) accepted the provisions of this page, (ii) agreed not to print the Preliminary Official
Statement except in its entirety, and (iii) consented to the electronic transmission of the Preliminary Official Statement.
*Preliminary, subject to change.
02- 797
PRELIMINARY OFFICIAL STATEMENT DATED , 2002
NEW ISSUE — BOOK ENTRY ONLY
Insured Ratings:
Standard and Poor's:
Moody's:
Fitch:
(See "Ratings" herein)
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) assuming continuing
compliance with certain covenants and the accuracy of certain representations, interest on the Series 2002 Bonds is
excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the
federal alternative minimum tax imposed on individuals and corporations, and (ii) the Series 2002 Bonds and the
income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by
Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida
Statutes, as amended. Interest on the Series 2002 Bonds may be subject to certain federal taxes imposed only on
certain corporations, including the corporate alternative minimum tax on a portion of that interest. For a more
complete discussion of the tax aspects, see "TAXMATTERS" herein.
Dated: Date of Delivery
S 160,000,000*
THE CITY OF MIAMI, FLORIDA
Limited Ad Valorem Tax Bonds, Series 2002
(Homeland Defense/Neighborhood Capital Improvement Projects)
Due: January 1, as shown below
The Limited Ad Valorem Tax Bonds, Series 2002 (Homeland Defense/Neighborhood Capital Improvement Projects)
(the "Series 2002 Bonds") are being issued by The City of Miami, Florida (the "City") pursuant to the Constitution and
laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable
provisions of law (the "Act") and pursuant to Ordinance No. 12137 enacted on October 11, 2001 and Resolution No.
adopted on July _, 2002 (collectively, the "Resolution"). The issuance of the Series 2002 Bonds was
approved by the qualified electors of the City at a referendum election held on November 13, 2001 in satisfaction of the
requirements of Article VII, Section 12 of the Florida Constitution.
The ries 2002 Bonds are being issued for the purpose of (i) funding the Project, and (ii) paying certain costs
and expenses incurred in connection with the issuance of the Series 2002 Bonds, including the premium for a municipal
bond insurance policy.
This cover page contains certain information for quick reference only. It is not, and is not intended to be, a
summary of the issue. Investors must read the entire Official Statement to obtain information needed for the making of
an informed investment decision.
The Series 2002 Bonds are being issued by the City as fully registered bonds, which initially will be registered
in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual
purchases will be made in book -entry form only through Participants (defined herein) in denominations of $5,000 and
integral multiples thereof. Purchasers of the Series 2002 Bonds (the `Beneficial Owners") will not receive physical
delivery of certificates. Transfers of ownership interests in the Series 2002 Bonds will be effected by the DTC book -entry
system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and interest
payments will be made directly to such registered owner which will in tum remit such payments to the Participants (as
defined herein) for subsequent disbursement to the Beneficial Owners. Interest on the Series 2002 Bonds is payable
semi-annually on each January I and July 1, commencing January 1, 2003. Principal of, premium, if any, and interest on
the Series 2002 Bonds will be payable by Wachovia Bank, National Association, Miami, Florida, as Paying Agent and
Registrar.
02_. 797
Certain maturities of the Senes 2002 Bonds are subject to optional redemption prior to their respective maturities,
as described herein under "DESCRIPTION OF THE SERIES 2002 BONDS — Optional Redemption."
Payment of the principal of, Accreted Value, premium, if any, and interest on the Series 2002 Bonds shall be
secured by a pledge of the Limited Ad Valorem Tax, as defined herein (the "Limited Ad Valorem Tax") and a covenant
of the City to budget and appropriate a limited portion of its Non Ad Valorem Revenues. The Series 2002 Bonds do not
constitute general obligations of the City within the meaning of any constitutional or statutory provision or limitation
and the City is not obligated to levy any ad valorem taxes other than the Limited Ad Valorem Tax for the payment thereof.
Neither the full faith and credit nor the taxing power of the City, Miami -Dade County, the State of Florida nor any political
subdivision or agency thereof (except the Limited Ad Valorem Tax) is pledged to the payment of the principal of,
Accreted Value, premium, if any, and interest of the Series 2002 Bonds.
The scheduled payment of principal of and interest on the Series 2002 Bonds when due will be guaranteed by a
municipal bond insurance policy to be issued concurrently with the delivery of the Series 2002 Bonds by
(the "Insurer").
[Insert Logo]
See the inside cover page for maturities, principal amounts, interest rates, prices or yields and CUSIP numbers.
The Series 2002 Bonds are offered when, as, and if issued and received by the Underwriters, subject to the
opinion on certain legal matters relating to their issuance by Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond
Counsel. Certain legal matters will be passed upon for the City by Alejandro Vilarello, Esq., City Attorney and by
Bryant, Miller and Olive, P.A., Coral Gables, Florida and Manuel Alonso-Poch, P.A., Coral Gables, Florida, Co -
Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriters by Hunton & Williams,
Washington, D.C. Dunlap & Associates, Inc., Orlando, Florida and Fidelity Financial Services, L.C., Hollywood,
Florida are serving as Co -Financial Advisor to the City. It is expected that the Series 2002 Bonds in definitive form
will be available for delivery to the Underwriters in New York, New York at the facilities of DTC on or about
2002.
MORGAN STANLEY & CO., INCORPORATED
JPMORGAN
JACKSON SECURITIES INC.
LEHMAN BROTHERS
SALOMON SMITH BARNEY
UBS PAINEWEBBER INC.
Dated: , 2002
*Preliminary, subject to change.
02- 797
THE CITY OF MIAMI, FLORIDA
MAYOR
Manuel A. Diaz
CITY COMMISSIONERS
Tomas P. Regalado, Chairman
Johnny L. Winton, Vice Chairman
Angel Gonzalez
Joe M. Sanchez
Arthur E. Teele, Jr.
CITY MANAGER
Carlos A. Gimenez
ASSISTANT CITY MANAGER
Robert J. Nachlinger, CPA
FINANCE DIRECTOR
Scott Simpson, CPA
CITY ATTORNEY
Alejandro Vilarello, Esq.
BOND COUNSEL
Squire, Sanders & Dempsey L.L.P.
Miami, Florida
CO -DISCLOSURE COUNSEL
Bryant, Miller and Olive, P.A.
Coral Gables, Florida
Manuel Alonso-Poch, P.A.
Coral Gables, Florida
CO -FINANCIAL ADVISOR
Dunlap & Associates, Inc.
Orlando, Florida
Fidelity Financial Services, L.C.
Hollywood, Florida
02- 797
SERIES 2002 BONDS
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS
$ CURRENT INTEREST SERIAL BONDS
Maturity Initial
January 1 Principal Amount Interest Rate Price/Yield CUSIP Number
2003 $ % %
2044
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 -
2015
2016
2017
2018
2019
2020
2021
2022
Maturity
January i
CAPITAL APPRECIATION BONDS
$ Original Principal Amount Capital Appreciation Bonds
Original Principal Approximate Yield Initial CUSIP
Amount Maturity Value to Maturity Number
02- 797
No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any
information or to make any representations in connection with the Series 2002 Bonds, other than as contained in this
Official Statement, and, if given or made, such information or representations must not be relied upon as having been
authorized by the City. 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 2002 Bonds by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale.
The information set forth herein has been obtained from the City, the Insurer, DTC and other sources that are
believed to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a
representation by the Underwriters. The Underwriters listed on the cover page hereof have reviewed the information
in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities
laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy
or completeness of such information. The information and expressions of opinion stated herein are subject to change,
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 matters described herein since the date hereof.
IN CONNECTION WITH THIS OFFERING OF THE SERIES 2002 BONDS, THE UNDERWRITERS MAY
OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH
SERIES 2002 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
All summaries herein of documents and agreements are qualified in their entirety by reference to such documents
and agreements, and all summaries herein of the Series 2002 Bonds are qualified in their entirety by reference to the form
thereof included in the aforesaid documents and agreements.
Other than with respect to information concerning ( the "Insurer") contained under the
caption "MUNICIPAL BOND INSURANCE" and "APPENDIX E - SPECIMEN MUNICIPAL BOND INSURANCE
POLICY" attached hereto, none of the information supplied in this Official Statement has been supplied or verified by
the Insurer and the Insurer makes no representation or warranty, express or implied, as to (i) the accuracy or
completeness of such information, (ii) the validity of the Series 2002 Bonds, or (iii) the tax exempt status of the interest
on the Series 2002 Bonds.
NO REGISTRATION STATEMENT RELATING TO THESERIES 2002 BONDS HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES
COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED,ITHE SERIES 2002 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR
ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE
NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION
TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE CITY FOR PURPOSES
OF RULE 15C2-12 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT
FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO RULE 15C2-12(6)(1).
02- 797
TABLE OF CONTENTS
Contents a e
INTRODUCTION................................................................................ I
PURPOSE OF THE ISSUE............................................................ ............
2
THEPROJECT..................................................................................
2
ESTIMATED SOURCES AND USES OF FUNDS ......................................................
2
DEBT SERVICE SCHEDULE......................................................................
3
DESCRIPTION OF THE SERIES 2002 BONDS .......................................................
4
General...................................................................................
4
Book -Entry Only System.....................................................................
4
OptionalRedemption.......................................................................
6
MandatoryRedemption......................................................................
6
Notice and Effect of Redemption..............................................................
6
Registration, Transfer and Exchange...........................................................
7
Replacement of Bonds Mutilated, Destroyed, Stolen or Lost ........................................
7
MUNICIPAL BOND INSURANCE..................................................................
8
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS .............................
9
General...................................................................................
9
Application of Series 2002 Proceeds...........................................................
9
Amendment of Resolution..................................................................
10
ADVALOREM TAXATION......................................................................
10
General..................................................................................
10
Save Our Homes Amendment................................................................
11
Truthin Millage Bill.......................................................................
11
Property Assessment Procedures.............................................................
11
Levy of Ad Valorem Taxes .................. ................................................
12
MillageRates.............................................................................
13
Assessed Valuations.......................................................................
13
TaxCollection............................................................................
14
TaxDeeds...............................................................................
14
THECITY OF MIAMI...........................................................................
24
Background..............................................................................
24
CityGovernment..........................................................................
24
ISSUES RELATED TO FINANCIAL EMERGENCY ..................................................
25
Backg/roiund..............................................................................
25
Appointment of Financial Oversight Board .....................................................
25
Securities and Exchange Commission Actions ..................................................
26
CURRENT FINANCIAL STATUS OF THE CITY ....................................................
27
Adoption of Financial Integrity and Anti -Deficiency Ordinances .....................................
27
Adoption of Five Year Financial Plan .........................................................
28
Adoption of Investment Policy...............................................................
28
Adoption of Debt Management Policy.........................................................
29
Capital Improvement Plan...................................................................
30
Information Technology....................................................................
30
Fiscal and Accounting Procedures............................................................
30
GASB34................................................................................
30
GeneralFund.............................................................................
31
LIABILITIES OF THE CITY......................................................................
33
Insurance Considerations Affecting the City ....................................................
33
02- 797
Ability to be Sued, Judgments Enforceable.....................................................
34
Indebtedness of the City....................................................................
35
DirectDebt..............................................................................
35
OverlappingDebt.........................................................................
36
DebtRatios..............................................................................
36
Other Obligations ........................................................................
36
OTHER BORROWINGS.........................................................................
37
LEGAL MATTERS.............................................................................
37
LITIGATION..................................................................................
38
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS .................................
38
TAXMATTERS................................................................................
39
General..................................................................................
39
Original Issue Discount and Original Issue Premium .............................................
39
RATINGS.....................................................................................
40
FINANCIAL ADVISOR..........................................................................
40
AUDITED FINANCIAL STATEMENTS............................................................
41
UNDERWRITING...................:..........................................................
41
CONTINGENT FEES............................................................................
41
ENFORCEABILITY OF REMEDIES...............................................................
41
CONTINUING DISCLOSURE....................................................................
41
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT .....................................
42
FORWARD-LOOKING STATEMENTS............................................................
42
MISCELLANEOUS.............................................................................
42
AUTHORIZATION OF OFFICIAL STATEMENT ....................................................
43
APPENDICES
APPENDIX A:
GENERAL INFORMATION REGARDING THE CITY OF MIAMI
APPENDIX B:
DESCRIPTION OF NON AD VALOREM REVENUES
APPENDIX C:
FORM OF THE BOND RESOLUTION
APPENDIX D:
GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR
FISCAL YEAR ENDED SEPTEMBER 30, 2001
APPENDIX E:
FORM OF BOND COUNSEL OPINION
APPENDIX F:
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
APPENDIX G:
FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT
APPENDIX H:
ACCRETED VALUE TABLE
02, 797
OFFICIAL STATEMENT
relating to
$160,000,000*
THE CITY OF MIAMI, FLORIDA
Limited Ad Valorem Tax Bonds, Series 2002
(Homeland Defense/Neighborhood Capital Improvement Projects)
INTRODUCTION
The purpose of this Official Statement, including the cover page and appendices, is to set forth information
concerning The City of Miami, Florida (the "City") and The City of Miami, Florida Limited Ad Valorem Tax Bonds, Series
2002 (Homeland Defense/Neighborhood Capital Improvement Projects) (the "Series 2002 Bonds"), in connection with
the sale of the Series 2002 Bonds.
The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay. It is the county seat
of Miami -Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City's
diversified economic base is comprised of light manufacturing, trade, commerce, wholesale, and retail trade and tourism.
For more information about the City, see "APPENDIX A — GENERAL INFORMATION REGARDING THE CITY OF
MIAMI."
The Series 2002 Bonds are being issued pursuant to the Constitution and laws of the State of Florida, including
Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (the "Act") and
pursuant to Ordinance No. 12137 enacted by the City on October 11, 2001 and Resolution No. adopted
by the City on July _, 2002 (collectively, the "Resolution"). On October 11, 2001, the City enacted Ordinance No. 12127
which authorized the issuance of not exceeding 5255,000,000 general obligation bonds, provided for the levy and
collection of ad valorem taxes at a rate not to exceed the debt millaee of 1.213 mills, together with other debt, and the
holding of an election. Subsequently, the issuance of the Series 2002 Bonds was approved by the qualified electors of
the City at a referendum election held on November 13, 2001 in satisfaction of the requirements of Article VII, Section
12 of the Florida Constitution.
The Series 2002 Bonds are being issued for the purpose of funding certain capital improvements within the City.
See "PURPOSE OF THE ISSUE" and "THE PROJECT" herein.
Payment of the principal of, Accreted Value, premium, if any, and interest on the Series 2002 Bonds shall be
secured by a pledge of the Limited Ad Valorem Tax, as defined herein (the "Limited Ad Valorem Tax") and a covenant
of the City toudget and appropriate a limited portion of its Non Ad Valorem Revenues. The Series 2002 Bonds do not
constitute general obligations of the City within the meaning of any constitutional or statutory provision or limitation
and the City is not obligated to levy any ad valorem taxes other than the Limited Ad Valorem Tax for the payment thereof.
Neither the full faith and credit nor the taxing power of the City, Miami -Dade County, the State of Florida nor any political
subdivision or agency thereof (except the Limited Ad Valorem Tax) is pledged to the payment of the principal of,
Accreted Value, premium, if any, and interest of the Series 2002 Bonds. See "SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2002 BONDS" herein.
Payment of the principal of and interest on the Series 2002 Bonds will be guaranteed by a municipal bond
insurance policy to be issued simultaneously with the delivery of the Series 2002 Bonds by (the
"Insurer").
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 summary and reference is qualified in its entirety
by reference to each such document, statute, report or instrument. All capitalized terms used in this Official Statement
02- 797
and not otherwise defined herein have the meanings set forth in the Resolution, unless the context would clearly indicate
otherwise. A copy of the Resolution is attached hereto as "APPENDIX C — FORM OF THE BOND RESOLUTION."
All documents of the City referred to herein may be obtained from Scott Simpson, CPA, Finance Director, 444 S.W.
2nd Avenue, 6" Floor, Miami, Florida 33130, Telephone (305) 416-1377.
*Preliminary, subject to change.
PURPOSE OF THE ISSUE
The Series 2002 Bonds are being issued by the City, pursuant to the Constitution and laws of the State of Florida,
including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law and
pursuant to Ordinance No. 12137 enacted by the City on October 11, 2001 and Resolution No. adopted by
the City on July_, 2002 (collectively, the "Resolution").
The Series 2002 Bonds are being issued for the purpose of (i) funding the Project and (ii) paying certain costs and
expenses incurred in connection with the issuance of the Series 2002 Bonds, including the premium for a municipal bond
insurance policy.
THE PROJECT
The project consists of certain capital improvements including, a homeland security program, neighborhood
improvements, capital projects and infrastructure improvements (the "Project"). A portion of the Project are
improvements within the City's five year capital improvement plan.
ESTIMATED SOURCES AND USES OF FUNDS
The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the
Series 2002 Bonds:
SOURCES:
Principal Amount of Series 2002 Bonds
[Plus Netffriginal Issue Premium]
[Less Net Original Issue Discount]
TOTAL SOURCES $
USES:
Deposit to Principal and Interest Account
Deposit to Construction Account
Costs of Issuances"
TOTAL USES $
Includes municipal bond insurance premium and underwriting discount, financial advisory and legal fees and
expenses, and miscellaneous costs of issuance.
DEBT SERVICE SCHEDULE
The following table sets forth the debt service requirements for the Series 2002 Bonds.
Total Debt
Januja I Principal Interest Service
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
TOTAL
3
92- 797
DESCRIPTION OF THE SERIES 2002 BONDS
General
The Series 2002 Bonds shall be issued as fully registered, book -entry only bonds in the denomination or $5,000
each or any integral multiple thereof through the book -entry only system maintained by The Depository Trust Company,
New York, New York. The Series 2002 Bonds shall be numbered consecutively from I upward preceded by the letter "R"
prefixed to the number. The principal of and redemption premium, if any, on the Series 2002 Bonds shall be payable upon
presentation and surrender at the principal office of Wachovia Bank, National Association, Miami, Florida, (the "Paying
Agent"). Interest on the Series 2002 Bonds is payable semi-annually on January 1 and July 1 of each year, commencing
January 1, 2003 and shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners
of the Series 2002 Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar
at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest
payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2002 Bonds subsequent to
such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due
on such interest payment date; provided, however, that (i) if ownership of Series 2002 Bonds is maintained in a
book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to
such securities depository or its nominee or (ii) if such Series 2002 Bonds are not maintained in a book -entry only system
by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Series 2002
Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder
(such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the
amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire
transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest
shall be payable to the persons in whose names such Series 2002 Bonds are registered at the close of business on a
special record date for the payment of such defaulted interest as established by notice deposited in the U.S. mails,
postage prepaid, by the Paying Agent to the registered owners of the Series 2002' Bonds not less than fifteen (15) days
preceding such special record date. Such notice shall be mailed to the persons in whose names the Series 2002 Bonds
are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of
mailing.
Book -Entry Only System
THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK -ENTRY ONLY SYSTEM HAS BEEN
OBTAINED FROM SOURCES THAT THE CITY BELIEVES TO BE RELIABLE, BUT THE CITY TAKES NO
RESPONSIBILITY FOR THE ACCURACY THEREOF.
The D6pository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the
"Series 2002 Bonds"). The Series 2002 Bonds will be issued as fully -registered Series 2002 Bonds registered in the name
of Cede & Co. (-DTC's partnership nominee) or such other name as may be requested by an authorized representative
of DTC. One fully -registered Series 2002 Bond certificate will be issued for each maturity of Series 2002 Bonds, and will
be deposited with DTC.
DTC, the world s largest depository, is a limited -purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing 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 Exchange Act of 1934. DTC holds and provides
asset servicing for over 2 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and
money market instruments from over 35 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC
also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited
securities, through electronic computerized book -entry transfers and pledges between Direct Participants accounts. This
eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S.
4
U2-- 797
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is
a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in tum, is owned by a
number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government
Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC,
MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to
others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations
that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file
with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Series 2002 Bonds under the DTC system must be made by or through Direct Participants, which
will receive a credit for the Series 2002 Bonds on DTC s records. The ownership interest of each actual purchaser of each
Series 2002 Bonds ("Beneficial Owner')is in tum to be recorded on the Direct and Indirect Participants records.
Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however,
expected to receive written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Series 2002 Bonds are to be accomplished by entries made on the books of Direct
and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Series 2002 Bonds, except in the event that use of the book -entry system for
the Series 2002 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2002 Bonds deposited by Direct Participants with DTC are registered
in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Series 2002 Bonds with DTC and their registration in the name of Cede & Co. or
such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Series 2002 Bonds. DTC s records reflect only the identity of the Direct Participants to whose
accounts such Series 2002 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners
of Series 2002 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events
with respect to the Series 2002 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series
2002 Bonds documents. For example, Beneficial Owners of Series 2002 Bonds may wish to ascertain that the nominee
holding the Sees 2002 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the
alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies
of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2002 Bonds within an issue are being
redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2002 Bonds
unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails
an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s
consenting or voting rights to those Direct Participants to whose accounts Series 2002 Bonds are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
02-- 797
Redemption proceeds, distributions, and dividend payments on the Series 2002 Bonds will be made to Cede &
Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit
Direct Participants accounts upon DTC's receipt of funds and corresponding detail information from the City or the
Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records. 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 nor its nominee, the Paying Agent, or the City, subject to any statutory or regulatory
requirements as maybe in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments
to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility
of the City or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Series 2002 Bonds at any time by
giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor
depository is not obtained, Series 2002 Bonds certificates 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, Series 2002 Bonds certificates will be printed and delivered.
Optional Redemption
The Series 2002 Bonds maturing on or prior to January 1, are not redeemable prior to their respective dates
of maturity. The Series 2002 Bonds maturing on and after January 1, _, are subject to redemption at the option of
the City on or after January 1, _, in whole or in part at any time, in such manner as shall be determined by the Bond
Registrar, at a redemption price (expressed as a percentage of the principal amount of the Series 2002 Bonds to be
redeemed) plus accrued interest to the date fixed for redemption as follows.
Redemption Period
(Both Dates Inclusive) Redemption Price
January 1, _ through December 31, _ %
January I, _ through December 31, _
January 1, and thereafter
Mandatory Redemption
The Series 2002 Bonds maturing on January 1, _ will be subject to mandatory redemption prior to maturity,
by lot, in such manner as the Registrar may deem appropriate, at a redemption price equal to par plus accrued interest
to the redemp�n date, on January 1, _ and on each January I thereafter, from moneys deposited in the Sinking Fund,
in the following principal amounts in the years specified:
Year
*Maturity
Notice and Effect of Redemption
Principal
Amount
Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice, postage
prepaid, at least thirty (30) days before the redemption date to all registered owners of the Series 2002 Bonds or portions
of the Series 2002 Bonds to be redeemed at their addresses as they appear on the registration books to be maintained
in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Series 2002 Bond,
U2-.. 797
or any defect therein, shall not affect the validity of the proceedings for redemption of any Series 2002 Bond or portion
thereof with respect to which no failure or defect occurred.
Such notice shall set forth the date fixed for redemption, the rate of interest bome by each Series 2002 Bond being
redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less
than all of the Series 2002 Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters,
including CUSIP numbers, if any, of such Series 2002 Bonds to be redeemed and, in the case of Series 2002 Bonds to be
redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 2002 Bond is to be
redeemed in part only, the notice of redemption which relates to such Series 2002 Bond shall also state that on or after
the redemption date, upon surrender of such Series 2002 Bond, a new Series 2002 Bond or Series 2002 Bonds in a
principal amount equal to the unredeemed portion of such Series 2002 Bond will be issued.
Any notice mailed as described in this Section shall be conclusively presumed to have been duly given, whether
or not the owner of such Series 2002 Bond receives such notice.
The Bond Registrar shall not be required to transfer or exchange any Series 2002 Bond after the mailing of a notice
of redemption nor during the period of fifteen (1 S) days next preceding mailing of a notice of redemption.
Registration, Transfer and Exchange
So long as the Series 2002 Bonds.are registered in the name of DTC or its nominee, the following paragraphs
relating to transfer and exchange of Bonds do not apply to the Series 2002 Bonds.
The Series 2002 Bonds issued under the Resolution shall be and have all the qualities and incidents of negotiable
instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions
for registration of transfer contained in the Resolution and in the Series 2002 Bonds. So long as any of the Series 2002
Bonds shall remain outstanding, the City shall maintain and keep, at the office of the Bond Registrar, books for the
registration of transfer of the Series 2002 Bonds.
The registration of any Series 2002 Bond may be transferred upon the registration books upon delivery thereof
to the principal office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and
with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attomey-in-fact
or legal representative containing written instructions as to the details of the transfer of such Series 2002 Bond, along
with the social security number or federal employer identification number of such transferee. In all cases of a transfer
of a Series 2002 Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms of the Resolution
enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees
a new fully regst(ered Series 2002 Bond or Bonds of the same maturity and of authorized denomination or denominations,
for the same aggregate principal amount and payable from the same source of funds. The City and the Bond Registrar
may charge the Bondholder for the registration of every transfer or exchange of a Series 2002 Bond an amount sufficient
to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with
respect to the registration of such transfer, and may require that such amounts be paid before any such new Series 2002
Bond shall be delivered.
The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Series 2002 Bond as
the absolute owner of such Series 2002 Bond for the purpose of receiving payment of the principal thereof and the
interest and redemption premium, if any, thereon. Series 2002 Bonds may be exchanged at the office of the Bond
Registrar for a like aggregate principal amount of Series 2002 Bonds, or other authorized denominations of the same series
and maturity.
02 797
Replacement of Bonds Mutilated, Destroyed, Stolen or Lost
If any Series 2002 Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver
a duplicate replacement Series 2002 Bond, or (ii) pay a Series 2002 Bond that has matured or is about to mature. A
mutilated Series 2002 Bond shall be surrendered to and canceled by the Bond Registrar. The Bondholder must furnish
the City or its agent proof of ownership of any destroyed, stolen or lost Series 2002 Bond; post satisfactory indemnity;
comply with any reasonable conditions the City or its agent may prescribe; and pay the City or its agent's reasonable
expenses.
Any such duplicate Series 2002 Bond shall constitute an original contractual obligation on the part of the City
whether or not the destroyed, stolen or lost Series 2002 Bond be at any time found by anyone, and such duplicate Series
2002 Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and
security for payment from, the funds pledged to the payment of the Series 2002 Bond so mutilated, destroyed, or stolen
or lost.
MUNICIPAL BOND INSURANCE
[TO COME]
APPLICATION OF SERIES 2002 PROCEEDS
The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2002 Bonds
shall be applied by the City, simultaneously with delivery of the Series 2002 Bonds, as follows:
A. Accrued interest, if any, shall be deposited in the account designated "City of Miami 2002 Limited Ad
Valorem Tax Bond Principal and Interest Account" (the "Principal and Interest Account") which is established with the
Paying Agent, who shall apply such moneys to pay interest on the Series 2002 Bonds as the same becomes due.
B. An amount set forth in a certificate of the Finance Director; delivered concurrently with the delivery of the
Series 2002 Bonds (the "Proceeds Certificate") shall be deposited in a separate account designated "City of Miami 2002
Limited Ad Valorem Tax Bond Construction Account" (the "Construction Account") which is established with the City
and shall be disbursed to pay the costs of the Project, including reimbursement to the City of funds advanced for costs
incurred with respect to the Project, which may be reimbursed pursuant to the Code under the Intent Resolution. Any
balance remaining after payment or provision for payment of such costs of the Project, shall be transferred to the Paying
Agent for deposit in the Principal and Interest Account and the Bond Amortization Account, if any, and used solely to
pay principal of, Accreted Value and interest, on the Series 2002 Bonds.
C. The remainder of the proceeds as set forth in the Proceeds Certificate shall be deposited in a separate
account designated "City of Miami 2002 Limited Ad Valorem Tax Bond Cost of Issuance Account" which is established
with the City and shall be disbursed for payment of expenses incurred in issuing the Series 2002 Bonds. Any balance
remaining after payment or provision for payment of such expenses has been made shall be transferred, at the option
of the City, to either the Construction Account for the payment of costs of the Project or to the Paying Agent for deposit
in the Principal and Interest Account and the Bond Amortization Account, if any, and used solely to pay principal of,
Accreted Value and interest, on the Series 2002 Bonds.
The City is currently operating under an Escrow Agreement dated March 17, 1997 entered into by First Union
National Bank, now known as Wachovia Bank, National Association ("First Union"), the Financial Oversight Board
(described later herein under "ISSUES RELATED TO FINANCIAL EMERGENCY"), and the City (the "Agreement").
The Agreement provides for the City to deposit into two separate holding accounts its pledged revenues and certain
ad valorem tax revenues which are paid to the City by Miami -Dade County, Florida. At least five days prior to the due
date of any principal, interest or redemption payment for any outstanding obligations as outlined in the Agreement, the
City shall give notice to First Union regarding the amount due and the appropriate paying agent. First Union shall then
pay the appropriate amount to the appropriate paying agent from the applicable account, including the Paying Agent
for the Series 2002 Bonds. The parties may terminate the Agreement at any time. There is no assurance that the
Agreement will be maintained for the life of the Series 2002 Bonds. If in the event that the Agreement is terminated, the
City will transfer payments directly to the Paying Agent for the Series 2002 Bonds for deposit into the account created
for the Series 2Q02 Bonds pursuant to the Resolution.
Amendment of Resolution
The Resolution may be modified and amended by the City from time to time prior to the issuance of the Series
2002 Bonds. Thereafter, no modification or amendment of the Resolution or of any resolution amendatory thereof or
supplemental thereto materially adverse to the Bondholders may be made without the consent in writing of the registered
owners of not less than a majority in aggregate principal amount of the Outstanding Series 2002 Bonds. Notwithstanding
the foregoing, no modification or amendment shall permit a change (a) in the maturity of the Series 2002 Bonds or a
reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Series 2002 Bond, (c) that
would affect the unconditional promise of the City to levy and collect taxes as herein provided, or (d) that would reduce
such percentage of registered owners of the Series 2002 Bonds required above for such modifications or amendments,
without the consent of all of the Bondholders. For the purpose of Bondholders' voting rights or consents, the Series
2002 Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted. See "APPENDIX
C — FORM OF THE BOND RESOLUTION."
02- '7 9'7
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS
General
The payment of the principal of, Accreted Value, premium, if any, and interest on the Series 2002 Bonds shall be
secured by a lien on the Limited Ad Valorem Tax and a covenant of the City to budget and appropriate its Non Ad
Valorem Revenue in an amount not to exceed 5% of maximum annual debt service on the Series 2002 Bonds in any given
Fiscal Year. The Limited Ad Valorem Tax is defined in the Resolution to mean the ad valorem tax levied by the City on
all taxable property within the City for the purpose of paying principal of, premium, Accreted Value, if any, and interest
with respect to the Series 2002 Bonds;provided however, that such levy when added together with the City's other ad
valorem tax millage levied with respect to a voter approved bond referendum (the "Debt Millage") does not exceed the
millage rate of 1.218. In each Fiscal Year while any of the Series 2002 Bonds are outstanding, there shall be assessed,
levied and collected a tax, when added together with all other Debt Millage of the City does not exceed the millage rate
of 1.218 on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable
law), in addition to all other taxes, sufficient in amount to pay the principal of, Accreted Value and interest on the Series
2002 Bonds as the same shall become due.
As of June 30, 2002, the City had $99,230,000 outstanding in general obligation bonds. The ad valorem tax which
secures the Series 2002 Bonds may not be levied in excess of 1.218 mills when added to the millage rate needed to meet
the debt service on the City's other outstanding general obligation bonds. Therefore, the amount of ad valorem tax
which may be levied for payment of the Series 2002 Bonds is limited by the amount of ad valorem tax levied for the
City's other outstanding general obligation debt. However, the City has covenanted to budget and appropriate a limited
portion of its legally available non ad valorem revenues in an amount not to exceed 5% of maximum annual debt service
on the Series 2002 Bonds to secure the Series 2002 Bonds.
The Limited Ad Valorem Tax assessed, levied and collected for the security and payment of the Series 2002 Bonds
shall be assessed, levied and collected in the same manner and at the same time as other taxes are assessed, levied and
collected and the proceeds of said tax, except as herein provided, shall be applied solely to the payment of the principal
of, Accreted Value and interest on the Series 2002 Bonds.
For more information on the Limited Ad Valorem Tax see "AD VALOREM TAXATION" herein. For more
information on the City's Non Ad Valorem Revenues see "NON AD VALOREM REVENUES" and APPENDIX B -
DESCRIPTION OF NON AD VALOREM REVENUES herein.
The City has covenanted in the Resolution to diligently enforce its right to receive tax revenues, to diligently
enforce and ciAlect such taxes and to not take any action that will impair or adversely affect its rights to levy, collect and
receive said taxes, or impair or adversely affect in any manner the pledge made in the Resolution or the rights of the
Bondholders. -
10
02- 797
AD VALOREM TAXATION
General
Under Florida law, the assessment of all properties and the collection of all City, municipal and property taxes
are consolidated in the office of the Miami -Dade County Property Appraiser and Miami -Dade County Tax Collector. The
laws of the State of Florida regulating tax assessment are designed to assure a consistent property valuation method
statewide.
Article VII, Section 9(b) of the Florida Constitution limits the aggregate rate of ad valorem taxes that may be
levied on real and personal property. The limitation, except as noted below, is ten (10) mills each for all City and
municipal purposes. A mill is equal to one-tenth (0.1) of one cent of one dollar or $1.00 for every $1,000 of assessed
value. Article VII, Section 9(b) excludes from the general 10 mill cap ad valorem taxes which are necessary to pay debt
service on general obligation bonds such as the Series 2002 Bonds.
Each respective millage rate, except as limited by law, is set on the basis of estimates of revenue needs and total
taxable property valuations within the taxing authority's respective jurisdiction. Ad valorem taxes are not levied in excess
of actual budget requirements.
In 1973, the State of Florida enacted legislation to encourage public awareness of spending and taxing decisions
made by local elected officials. This legislation provides that if the tax rate established by the governing board exceeds
the rolled -back tax rate, the taxing authority shall publish notice of the proposed tax increase prior to the public hearing
required to be held for the adoption of the final budget and millage rate. Under Section 200.065, Florida Statutes, a
"rolled -back tax rate" is defined as the millage rate that would produce the same amount of ad valorem taxes in each
current year as were levied in the prior year, exclusive of any increase in assessments resulting from new construction,
additions to structures, deletions and property added due to geographic boundary changes.
Section 4 of Article VII of the Constitution of the State provides, with certain exceptions: "By general law
regulations shall be prescribed which shall secure a just valuation of all real property for ad valorem taxation." The
factors considered in arriving at a just valuation, as set forth in Section 193.011, Florida Statutes, as amended, are
summarized as follows:
(1) the present cash value of the property:
(2) the highest and best use to which the property can be expected to be put in the immediate future and
the present use of the property;
(3) the location of the property:
(4) /' the quantity or size of the property:
(5) the cost of the property and the present replacement value of any improvements to the property;
(6) - the condition of the property:
(7) the income from the property; and
(8) the net proceeds of the sale of the property after deduction of certain reasonable fees and costs of
sale.
Save Our Homes Amendment
By voter referendum held on November 3, 1992, Article VII, Section 4 of the Florida Constitution was amended
by adding thereto a subsection which, in effect, limits the increases in assessed just value of homestead property to the
lesser of (a) 3% of the assessment for the prior year or (b) the percentage change in the Consumer Price Index for all
urban consumers, U.S. City Average, all items 1967-100, or successor reports for the preceding calendar year as initially
reported by the United States Department of Labor, Bureau of Labor Statistics (the "Save Our Homes Amendment").
Further, the Save Our Homes Amendment provides that (1) no assessment shall exceed just value; (2) after any change
02- 797
of ownership of homestead property or upon termination of homestead status, such property shall be reassessed at just
value as of January 1 of the year following the year of sale or change of status; (3) new homestead property shall be
assessed at just value as of January 1 of the year following the establishment of the homestead; and (4) changes,
additions, reductions or improvements to homestead shall initially be assessed as provided by general law, and thereafter
as provided in the Save Our Homes Amendment. The effective date of the Save Our Homes Amendment was January
15, 1993, and the base year for determining compliance with the restrictions is 1994. The 1995 tax roll year was the first
year such limitations were effective.
For the 2001 tax roll year, the increase in assessed just value of homestead property in the City was limited
pursuant to the Save Our Homes Amendment to 2.6% of the assessment for the prior year.
Truth in Millage Bill
The Florida Legislature enacted the Truth in Millage Bill (the "Trim Bill") requiring that only governing bodies
of taxing authorities fix the millage rate and requiring that all property be assessed at one hundred percent (100%) of just
value. Sections 200.071 and 200.091, Florida Statutes prohibit the millage for taxing authorities from being set by
referendum, except as provided in the Constitution of the State.
Property Assessment Procedures
Real and personal property valuations are determined each year as of January 1 by the Miami -Dade County
Property Appraiser's Office. The assessment roll is prepared between each January 1 and July 1, with each taxpayer
given notice of the proposed assessed value of his property.
The property owner has the right to file an appeal with the Miami -Dade County Property Appraisal Adjustment
Board, which considers petitions relating to assessments and exemptions. The Miami -Dade County Property Appraisal
Adjustment Board certifies the assessment roll upon completion of the hearing of all appeals. Millage rates are then
computed by the various taxing authorities and certified to the Miami -Dade County Property Appraiser, who applies the
millage rates to the assessment roll. This procedure creates the tax roll which is then annually turned over to the Miami -
Dade County Tax Collector on or about the first Monday in October.
Levv of Ad Valorem Taxes
A notice is mailed to each property owner on the tax roll for the taxes levied by cities, counties, School boards,
and other taxing authorities. All taxes are due and payable on November l of each year or as soon thereafter as the
certified tax -(oil is received by the Tax Collector. Taxes may be paid upon receipt of such notice with discounts at the
rate of 4% if paid in the month of November; 3% if paid in the month of December; 2% if paid in the month of January;
and 1% if paid in the month of February. Taxes paid during the month of March are without discount. Taxes become
delinquent on April I following the year in which they are assessed or 60 days after mailing of the original tax notice,
whichever is later. If the delinquency date for ad valorem taxes is later than April I of the year following the year in which
taxes are assessed, all dates or time periods specified in the Florida Statutes relative to the collection of, or administrative
procedures regarding, delinquent taxes shall be extended a like number of days.
Exemptions from the ad valorem tax include the first $25,000 of assessed value for a homestead; homestead
property of totally and permanently disabled persons: improved real property on which a renewable energy source
device is installed and operated; inventory: property used by not-for-profit hospitals, nursing homes and homes for
special services; property used by certain not-for-profit homes for the aged; property used exclusively for educational
purposes by educational institutions or other exempt organizations, including charter schools, for educational purposes:
property owned by certain charitable, literary, religious or scientific organizations and used predominately for such
purposes; property owned and used for educational purposes by labor organizations, property of certain community
12 ry
centers; certain property used for affordable housing; property owned and used by certain governmental units; property
of certain not-for-profit sewer and water companies; and the first $500 of property of every widow, widower, blind person
or disabled person.
In addition, pursuant to Section 196.075, Florida Statutes, beginning with fiscal year 2001, an additional homestead
exemption of $25,000 may be granted by a city or municipality relating to ad valorem taxes payable to persons 65 or older,
subject to certain income limitations. The City has adopted such exemption for the period commencing with fiscal year
2001. Such exemption should not have a material impact on the amount of ad valorem taxes levied or collected by the
City.
Millage Rates
The City has reduced its millage rate each year beginning with Fiscal Year 2000. Such reduction has made
property within the City less expensive to own and therefore more attractive. Further, the reduction gives the City
capacity to increase taxes for an emergency. The following table shows millage rates for the City for fiscal years ending
September 30, 1993 through September 30, 2002.
THE CITY OF MIAMI, FLORIDA
PROPERTY TAX RATES
Fiscal Year
City Operations
Debt Serviceli}
Total
2002
8.9950
1.2180
10.2130
2001
8.9950
1.2800
10.2750
2000
9.5000
1.4000
10.9000
1999
10.000
1.7900
11.7900
1998
9.5995
1.9200
11.5195
1997
9.5995
1.9200
11.5195
1996
9.5995
2.1060
11.7055
1995
9.5995
2.1060
11.7055
1994
9.5995
2.1060
11.7055
1993
9.5995
2.2126
11.8121
('I Millage for voted debt service on general obligation bonds is excluded from the 10 mill cap set forth in Article VII,
Section 9(b) of the Florida Constitution.
Source: The City of Miami, Florida FY 1999, FY 2000, FY 2001 and FY 2002 Budgets
The following table shows the millage rates for the general obligation debt and the Series 2002 Bonds for Fiscal
Years 1999- 2005. Figures for Fiscal Years 2003-2005 are projected for the Series 2002 Bonds.:
THE CITY OF MIAMI, FLORIDA
MILLAGE FOR VOTED DEBT SERVICE
Fiscal Year General Obligation Debt
2005
2004
2003
2002
2001
2000
13
Series 2002 Bonds Total
02- 797
1999
14
02- 797
Assessed Valuations
The following table shows the assessed valuations for the City for fiscal years ending September 30, 1993 through
September 30, 2002.
THE CITY OF MIAMI, FLORIDA
ASSESSED VALUE OF TAXABLE PROPERTY
Fiscal
Real
Personal
Homestead
Net Assessed
property
property
Total
ExemRtions
Value
Year
514,619,965,442
51,758,100,101
$16,378,065,543
$1,031,970,914
515,346,094,629
('12002
13,143,276,381
1,657,551,519
14,800,827,900
1,029,461,571
13,771,366,329
2001
12,655,367,383
1,750,211,283
14,405,578,666
1,022,522,356
13,383,056,310
2000
12,054,384,369
1,334,992,653
13,389,377,022
1,013,367,239
12,376,009,783
1999
11,383,265,849
1,329,476,797
12,712,742,646
1,015,773,092
11,696,969,554
1998
11,039,083,007
1,323,876,600
12,362,959,607
1,013,566,813
11,349,392,794
1997
10,702,353,382
1,301,197,462
12,003,550,844
4,012,060,207
10,991,490,637
1996
10,232,545,197
1,264,806,533
11,497,351,730
1,007,531,594
10,489,820,136
1995
9,991,788,807
1,241,431,753
11,233,220,560
1,006,367,133
10,226,853,427
1994
10,216,460,668
1,258,998,820
11,475,459,488
1,005,657,230
10,469,802,258
1993
Source: Miami -Dade County Property Appraiser's Office
01 Subject to final adjustment
Tax Collection
It is the Miami -Dade County Tax Collector's duty on or before June 1 of each year to advertise and sell tax
certificates on real property delinquencies extending from the previous April 1. The tax certificates must not be less than
the amount of the taxes plus interest from April 1 to the date of sale, together with the cost of advertising and expense
of sale. Delinquent real property taxes bear interest at the rate of 18% per year from April 1 until a certificate is sold at
auction, at which time the interest rate is as bid by the buyer of the certificate. Delinquent taxes may be redeemed prior
to sale of the tax certificates upon payment of all costs, delinquent taxes, and interest. The minimum interest for
delinquent tax -6s paid prior to the sale of a certificate is 3%.
A tax certificate may be redeemed by paying the Miami -Dade County Tax Collector the face value of the
certificate, interest, costs, charges and omitted taxes, if any, plus a redemption fee of $5. The redeemer must pay the
interest rate due on the certificate or 5% of the face amount of the certificate, whichever amount is greater, unless the
certificate was bid at no interest.
Florida law provides a different method for the collection of delinquent tangible personal property taxes, which
includes the possible seizure and sale of the tangible personal property.
15
02- 797
Tax Deeds
After two years from April 1 of the year of issuance of the tax certificate and before seven years of the date of
issuance, a private holder of any unredeemed tax certificate may apply for a tax deed to the property. Miami -Dade
County, for tax certificates that it has acquired, also has a two-year minimum wait for purchase of a tax deed, beginning
April 1 of the year of issuance of the certificate. Such procedures are governed by State law applicable to all Florida
counties.
The request for a tax deed is referred to the Clerk of the Circuit Court of Miami -Dade County who will hold an
auction after the proposed sale of the tax deed has been advertised for four consecutive weeks in a newspaper as
prescribed by law.
[Remainder of page intentionally left blank.]
The following table shows tax levies and tax collections in the City for the last ten fiscal years.
THE CITY OF MIAMI, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
(1) Includes levies for general operations and debt service.
(2) Net of reserve of approximately 5% of total tax levy.
Source: The City of Miami. Florida
17
02- 797
COLLECTION
PERCENT
COLLECTION OF
FISCAL
TOTAL TAX
OF CURRENT
OF LEVY
DELINQUENT
YEAR
LEVY[')
YEAR'S TAXES
COLLECTED
DELINQUENT
2001
$141,425,410
5134,535,715
95.13%
TAXES
2000
142,932,314
136,028,063
95.17
$2,291,707
1999
145,913,155
143,515,000
98.36
2,255,654
1998
134,743,241
127,911,000
94.93
2,522,000
1997
132,850,000
128,783,000
96.94
2,496,000
1996
128,661,000
120,519,000
93.67
2,990,000
1995
120,805,000
115,936,000
95.97
2,945,000
1994
125,169,000
113,966,000
91.05
3,707,000
1993
130,702,000
115,746,000
88.56
5,754,000
1992
128,832,000
118,396,000
91.90
5,631,000
1992
124,176,000
96.3860
5,077,000
5,780,000
(1) Includes levies for general operations and debt service.
(2) Net of reserve of approximately 5% of total tax levy.
Source: The City of Miami. Florida
17
02- 797
TOTAL
OUTSTANDING
COLLECTIONS
OUTSTANDING
DELINQUENT
FISCAL
TOTAL TAX
AS % OF
DELINQUENT
TAXES AS % OF
YEAR
COLLECTIONS
CURRENT LEVY
TAXES(=1
CURRENT LEVY
2001
S 136,827,422
96.7500
S2,255,654
1.59%
2000
138,283,717
96.7500
3,633,429
2.54
1999
143,485,898
98.3365
2,427,257
1.66
1998
130,407,000
96.7818
1,666,079
3.22
1997
131,773,000
99.1893
4,067,000
0.81
1996
123,464,000
95.9607
1,552,000
4.04
1995
119,643,000
99.0381
2,683,000
0.96
'f994
119,720,000
95.6467
1,673,000
4.35
1993
121.377,000
92.8654
3,942,000
7.13
1992
124,176,000
96.3860
5,077,000
3.61
(1) Includes levies for general operations and debt service.
(2) Net of reserve of approximately 5% of total tax levy.
Source: The City of Miami. Florida
17
02- 797
TEN LARGEST TAX ASSESSMENTS
2001 ASSESSED VALUES
1ICi111IO
$14,800,827,900 100.00%
[Remainder of page intentionally left blank]
18
02_. 797
NATURE OF
ASSESSED
TAXPAYER
ACTIVITY
VALUE
PERCENT
1.
SRI AETNA Life Insurance Co.
Real Estate Investments
$178,100,000
1.20%
2.
Florida Power & Light
Utility
149,163,031
1.01
3.
Metropolitan Life Insurance
Real Estate Investments
135,950,000
0.92
4.
Bellsouth
Utility
133,972,769
0.91
5.
Prudential Insurance Co.
Real Estate Investments
117,000,000
0.79
6.
Brickell Associates
Office Building
83,000,000
0.56
7.
Cedeara Healthcare Group LTD
Medical
60,750,852
0.41
8.
NOP LLC
Real Estate Investments
60,100,000
0.41
9.
Brickell Equities Corp.
Real Estate Investments
57,015,028
0.39
10.
Brickell Square
Office Building
51,190,595
0.35
All Others
Various
13.714.585.625
93.07
1ICi111IO
$14,800,827,900 100.00%
[Remainder of page intentionally left blank]
18
02_. 797
NON AD VALOREM REVENUES
The City has covenanted in the Resolution, to the extent permitted by and in accordance with applicable law
and budgetary processes, to prepare, approve and appropriate in its annual budget for each Fiscal Year, by amendment
if necessary, and to transfer to the Paying Agent for deposit to the Principal and Interest Account and Bond
Amortization Account, if applicable, legally available non -ad valorem revenues in an amount which, together with the
amounts on deposit from the Limited Ad Valorem Tax in the Principal and Interest Account and Bond Amortization
Account, if any, is sufficient to pay the principal of, Accreted Value, redemption premium, if any, and interest on the
Series 2002 Bonds then due and payable; provided however, the amount of non ad valorem revenues budgeted and
appropriated with respect to the Series 2002 Bonds in such Fiscal Year shall not exceed 5% of the maximum annual debt
service on the Series 2002 Bonds. Such covenant and, agreement on the part of the City to budget and appropriate
sufficient amounts of legally available non -ad valorem revenues shall be cumulative, and shall continue until such legally
available non -ad valorem revenues in amounts sufficient to make all required payments under the Resolution; provided,
however, such amounts do not exceed 5% of maximum annual debt service on the Series 2002 Bonds in any given Fiscal
Year, as and when due, including any delinquent payments, shall have been budgeted, appropriated and actually paid
into the appropriate funds and accounts under the Resolution; provided, further, that such covenant shall not constitute
a lien, either legal or equitable, on any of the City's legally available non -ad valorem revenues or other revenues, nor shall
it preclude the City from pledging in the future any of its legally available non -ad valorem revenues or other revenues
to other obligations, nor shall it give the Bondholders a prior claim on the legally available non -ad valorem revenues.
Anything in the Resolution to the contrary notwithstanding, and except for the lien and pledge of the Limited Ad
Valorem Tax, all obligations of the City under the Resolution shall be secured only by the legally available non -ad
valorem revenues actually budgeted and appropriated and deposited into the funds and accounts created under the
Resolution. The City may not expend, in any year, moneys not appropriated or in excess of revenues budgeted in such
year. The obligation of the City to budget, appropriate and make payments under the Resolution from its legally available
non -ad valorem revenues is subject to the availability of non -ad valorem revenues after satisfying funding requirements
for obligations having an express lien on or pledge of such revenues and after satisfying funding requirements for
essential governmental services of the City. Such covenant is, however, cumulative and shall cant' over from year to
year.
Enforcement of the City's obligation to budget and appropriate legally available non ad valorem revenues shall
be through appropriate judicial proceedings. The City may issue other bonds or debt obligations secured by a similar
covenant. In addition, various contracts of the City which do not constitute debt may be secured in a similar manner.
The City has not covenanted to maintain any programs or other activities which generate non ad valorem
Revenues. Furthermore, the obligation of the City to budget and appropriate non -ad valorem revenues is subject to a
variety of factors, including the payment of essential governmental services of the City and the obligation of the City
to have a balaFr6ed budget.
19
0 2 � 797
THE CITY OF MIAMI
Background
Now 106 years old, the City is part of the nation's eleventh largest metropolitan area. Incorporated in 1896, the
City is the only municipality conceived and founded by a woman - Julia Tuttle. According to the U.S. Census Bureau,
the City's population in 1900 was 1,700 people. Today it is a city rich in cultural and ethnic diversity with more than
362,000 residents, 60% of them foreign bom. In physical size the City is not large, encompassing only 34.3 square miles.
In population, the City is the largest of the 31 municipalities that make up Miami -Dade County and is the county seat.
For additional information concerning the City, see "APPENDIX A — GENERAL INFORMATION REGARDING THE
CITY OF MIAMI."
City Government
Since 1997, the City has been governed by a form of government known as the "Mayor -Commissioner plan."
There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four
years. As official head of the City, the Mayor has veto authority over actions of the Commission. The Mayor appoints
the City Manager who functions as chief administrative officer.
The Mayor of the City is presently Manuel A. Diaz.
The current members of the City Commission and expiration of their current terms of office are:
Commission Members
Tomas P. Regalado, Chairman
Johnny L. Winton, Vice Chairman
Angel Gonzalez
Joe M. Sanchez
Arthur E. Teele, Jr.
Date Term ExRj es
November, 2003
November, 2003
November, 2003
November, 2005
November, 2005
The City Manager, Carlos A. Gimenez, is a full-time employee and is the chief administrative officer of the City.
The City Manager is responsible for directing the administrative and operational aspects of the City in compliance with
the policies set by the Commission and the Mayor. Mr. Gimenez has been City Manager since May 9, 2000. He is
responsible for an organization that has more than 3,400 employees and administers a budget of more than 5500 million.
Prior to his current position, he served as Fire Chief of the City for nine years and gave more than twenty-six years of
service in the City's Fire Department. He holds a Bachelors Degree in Public Administration from Barry University.
The Ciry's Assistant City Manager for Finance and Administration is Robert J. Nachlinger. He is responsible
for the following departments: finance, human resources, information technology, risk management, purchasing and the
civil service board. He was appointed the Assistant City Manager for Finance and Administration in July 2000. Prior
to that he was the Finance Director for the City of Homestead, Florida. Mr. Nachlinger has been the Chief Accountant
for Dallas County, Texas, Internal Auditor and Treasurer for the Dallas Independent School District, Finance Director
for the City of Beaumont, Texas, Finance Director for the City of Miami Beach and an Assistant City Manager for the
City in 1997 before being hired by the City of Homestead. He holds a BBA degree in accounting and a MBA in finance.
He is also licensed as a CPA in the State of Texas and is a member of the Florida Government Finance Officers
Association.
The City's Finance Director is Scott Simpson, CPA, CGFO. He reports to the Assistant City Manager for
Finance & Administration. He is responsible for managing and investing public funds. The finance department is
responsible for accounts payable, general ledger, grants monitoring, payroll, treasury management and preparation of
20
.i
U•) 797
routine accounting reports as well as the City's annual financial statement. Mr. Simpson joined the City in October 1998
as the Assistant Finance Director and was appointed the Finance Director in June 2001. Prior to his joining the City, Mr.
Simpson was the Chief Accountant for the City of Winter Park, Florida for approximately three years. Mr. Simpson has
been previously employed in private industry in the position of Accounting Manager and Controller. Mr. Simpson
graduated from North Carolina State University with a B.A. in Accounting. He is licensed as a CPA in the State of North
Carolina and is a member of the American and Florida Institutes of Certified Public Accountants and the Government
Finance Officers Association of the United States and Canada.
ISSUES RELATED TO FINANCIAL EMERGENCY
Background
For the period 1984 through 1995, the General Fund of the City had a small but positive fund equity. During
the same twelve year period the enterprise funds were recording losses in each year. The internal service funds recorded
losses in eight of the twelve fiscal years. While the General Fund equity was being supported by transfers from the
proprietary funds, the retained earnings in the proprietary funds were becoming more negative each year. By 1995, the
enterprise funds had negative retained earnings of over S65 million and the internal service funds had negative retained
earnings of over $7 million. In the 1996 Comprehensive Annual Financial Statements, the City recognized that the
General Fund was the guarantor of the "proprietary operations" and collapsed the proprietary funds into the General
Fund since they were not being operated as proprietary funds. This resulted in a negative equity of S21.8 million in the
General Fund.
Appointment of Financial Oversight Board
In 1996, both Standard and Poor's Rating Group and Moody's Investors Service lowered the City's bond rating
to below investment grade. Unable to obtain credit, and projecting a cash deficit hampering the City's ability to make
payroll, or pay bills, the City requested that the Governor advance its State shared revenue payments to the City prior
to the date they were due. Pursuant to Executive Order 96-318, the Governor advanced $22 million to the City. Although
the City was not technically in a financial emergency, as defined by the Florida Statutes, the Executive Order required
the City to adopt a plan to resolve the financial situation by November 17, 1996. Unable to establish a plan to resolve
the situation, the City Commission declared the City to be in a financial emergency. Pursuant to the City's request, the
Governor issued Executive Order 96-391 effective December 11, 1996, creating the Financial Oversight Board (the "FOB")
to monitor the financial affairs of the City. The FOB was established as a five -member board, appointed by the Governor.
Also, Executive Order 96-391 directed the FOB to enter into an Intergovernmental Cooperation Agreement (the "ICA").
The ICA was entered into between the City, the Governor and the FOB and it is through the ICA that the FOB received
its power and authority. Further, the ICA established a corrective action plan and outlined an approval process for all
functions key'to the financial recovery process.
Pursuant to the corrective action plan the City implemented the following: (1) A financial recovery plan for fiscal
year 1996-97 shall be developed by the City and approved by the FOB to eliminate the S68 million deficit and structurally
balance recurring revenues with recurring expenditures; (2) All budgets developed by the City for five fiscal years of
balanced operations were approved by the FOB before final adoption; (3) Monthly financial reports were prepared by
the City and submitted to the FOB, which monitored budget to actual revenues and expenditures and explained trends
and variances; (4) A five year plan was developed by the City and approved by the FOB for fiscal year 1996-97 through
fiscal year 2000-01. The plan included forecasts of revenues and expenditures (both recurring and non-recurring),
addressed managerial, operational and other deficiencies and set forth how the City planned to balance its operations
in each year. This plan was updated annually by the City and approved by the FOB; (5) The City was prohibited from
expending funds on anything but debt service payments if it was not operating under an FOB approved budget; (6) An
official Estimating Conference made up of professional staff including the FOB's financial advisor, reviewed and
approved all revenue and expenditure estimates used in the budgets and Five Year plans of the City, (7) A Fiscal
Sufficiency Advisory Board was created to ensure the City establishes and maintains segregated debt service payment
21
92- 797
accounts and that appropriate balances in the debt service funds were kept, and timely payment of debt service on bonds
was made by the City; (8) A Contract Review Committee was established and the City was required to submit any
amendment, renewal, extension or new contract with a value of $4,500 or more to the Contract Review Committee for
approval before the City could enter into the contract. The amount was later amended upward to $10,000 or more; and
(9) A time frame was provided for all required actions in the ICA. See "CURRENT FINANCIAL STATUS OF THE CITY"
for a description of City policies resulting from the ICA's corrective plan.
Since 1997, the FOB met 46 times in fulfillment of its role and pursuant to the requirements set forth in the ICA.
Pursuant to its terms, the ICA terminates once the City has ended each of five consecutive fiscal years with balanced
operations. The City's external auditors have confirmed the City's balanced operations each of the past five fiscal years
(fiscal years 1996 through 2000). No other financial emergency conditions pursuant to Section 218.503, Florida Statutes
have arisen concluding the terms of the ICA. With the release of the fiscal year 2001 Audited Financial Statement, which
was released March 7, 2002, the City has fulfilled all of its obligations pursuant to the ICA. Consequently, the Governor,
by letter dated March 19, 2002, declared that the City is no longer in a state of financial emergency. Therefore, the FOB
was officially dissolved.
Securities and Exchange Commission Actions
On September 22, 1999, the Securities and Exchange Commission instituted an Administrative Proceeding
against the City of Miami, Florida, its former City Manager, Cesar Odio, and its former Finance Director, Manohar Surana,
AP File No. 3-10022. The SEC's Division of Enforcement (the "Division") alleged that the City violated Sections 17(a)(1),
17(a)(2) and 17 (a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule
I0(b)(5) thereunder, in connection with the sale of three bond offerings (the "Bond Offerings"), all of which occurred
in 1995. The Division also alleged that the City's two former officials were a cause of these violations. Messrs. Odio
and Surana each subsequently reached settlements with the SEC.
The Division alleged, among other things, that the Official Statements for the Bond Offerings and the City's
1994 Comprehensive Annual Financial Report omitted to disclose that the City's cash position had materially declined
since the close of fiscal year 1994 and the Official Statements for the Bond Offerings failed to disclose that "Operation
Right -Size" (a plan instituted by the City to reduce costs), would not have been sufficient to remedy the City's immediate
economic problems. The SEC does not seek to impose monetary fines or penalties against the City, nor has the City been
requested to re -state any previously issued financial statements. The sole remedy sought against the City was the entry
of a cease and desist order.
In March 2000, the Division and the City proceeded to trial. On June 22, 2001, the Administrative Law Judge
("ALJ") issu,9d an Initial Decision ("Initial Decision"), in which the ALJ concluded that the City violated the federal
securities laws and ordered that the City cease and desist from further violations of Exchange Act Section 10(b) and Rule
10(b)(5) thereunder, and Section 17(a) of the Securities Act.
The City appealed from the Initial Decision contending that the ALF's Initial Decision was erroneous and
should be reversed and set aside by the SEC. The parties have fully briefed the issues and are awaiting the SEC's
decision.
In connection with the foregoing proceedings, the SEC instituted an action against Rauscher Pierce Refsnes,
Inc., now known as RBC Dain Rauscher Inc. ("Rauscher") alleging that as underwriter of the City's $72 million Pension
Bond Offering in 1995, Rauscher should have known certain material information regarding the City's financial condition
and that the official statement failed to disclose the City's true financial condition to investors. On September 27, 2001,
the SEC ordered Rauscher to (1) cease and desist from committing or causing any violation and any future violation of
Sections (I 7(a)(2) and (3) of the Securities Act, Section 1513(c)(1) of the Exchange Act and MSRB Rule G-17; (2) pay a
civil money penalty in the amount of $200,000 to the United States Treasury and (3) comply with all provisions of the
SEC Order.
22 M j Q .►/{
In 1997, the City filed a pro°�-ssional malpractice action against the City's former external auditing firm. A
counterclaim was filed against the City alleging abuse of process in which the compensatory damages being sought are
not specified. Both parties have come to an agreement and the cases have been settled.
CURRENT FINANCIAL STATUS OF THE CITY
The City has made progress toward implementing the ICA's corrective plan. The FOB provided leadership and
guidance to the City when and where necessary. The City's present management has been stable and its key senior
management positions (those positions which report to the City Manager) are filled with trained professionals. However,
the City still has four department head positions vacant and are in the process of filling such vacancies. The City has
adopted several policies, as outlined below, to help it to continue its long term growth and prevent significant problems
from developing again.
Adoption of Financial Integrity and Anti -Deficiency Ordinances
The City's Anti -Deficiency Ordinance was passed in fiscal year 1999. The Anti -Deficiency Ordinance includes
several provisions aimed at financial accountability, including holding department heads personally responsible for
departmental overruns. The Anti -Deficiency Ordinance provides that no contract or other agreement may be entered
into for future payment of money in excess of those funds approved in the current year budget. Further, if it is
reasonably believed or anticipated that the annual budget of an agency or department may exceed the sum appropriated
in the approved budget, then written notice shall be provided to the Mayor, City Commission, City Manager, City
Attorney, City Clerk and the Director of the Department of Management and Budget.
In January 2000, the FOB and the City's staff developed a Financial Integrity Ordinance. The ordinance
augments the City's Anti -Deficiency Ordinance. The Financial Integrity Ordinance was enacted as a preventative
measure setting forth financial practices that would prevent the recurrence of a financial emergency. It also includes a
self-governing provision whereby the City Auditor is required to prepare an annual report on the City's adherence to
these principles. The Financial Integrity Ordinance addresses the following integrity principles: (i) Structurally Balanced
Budget, (ii) Estimating Conference Process, (iii) Interfund Borrowing, (iv) Reserve Policies, (v) Multi-year Financial and
Capital Plan, (vi) Financial Oversight and Reporting, (vii) Basic Financial Policies, (viii) Evaluation Committees, (ix) Full
Cost of Service and (x) Promoting Operating Efficiencies. The City has begun implementation of this ordinance.
The City's Auditor issued its first report on July 3, 2001 for the period of February 1, 2000 through September
30, 2000. Although, the City's Auditor found some areas which the City needs to improve upon, such as the filing for
reimbursements on a timely basis and recording of reimbursements due to the City as accounts receivable, overall, the
report was sat factory. Since the date of the report, the City has taken steps to improve those areas identified.
(Remainder of page left intentionally blank.]
23
92 797
Adoption of Five Year Financial Plan
On October 12, 2000, the City adopted its Five Year Financial Plan for fiscal years 2001- 2005 (the "Five Year
Plan"). The City's total budget is projected to grow from the $510.4 million approved for fiscal year 2001 to $535.9 million
in fiscal year 2005. The Five Year Plan contemplates no increase in the ad valorem tax rate, no increase in the fire fee
and a five percent increase in business licenses for fiscal year 2002 and fiscal year 2004. The chart below shows a
summary of the remaining four years projection of revenues and expenses by fund:
Revenues
FY 2002
FY 2003
FY 2004
_ FY 2005
General Fund
$326,897,785
$334,590,402
$343,475,342
5355,911,253
Special Revenue Funds
150,872,791
151,709,660
142,562,153
143,430,573
Debt Service Fund
39,933,886
39,583,611
37,947,005
36,508,987
Total All Funds
$517,704,462
5525,883,673
$523,984,500
$535,850,813
Expenditures
General Fund
$326,897,785
$334,590,402
$343,475,342
5355,911,253
Special Revenue Funds
150,872,791
151,709,660
142,562,153
143,430,573
Debt Service Fund
39,933,886
39,583,611
37,947,005
36,508,987
Total All Funds
$517,704,462
5525,883,673
$523,984,500
5535,850,813
Source: The City of Miami, Florida
The Five Year Plan anticipates that the City will have a structurally balanced budget with recurring revenue
capacity to resolve small deficits projected in expenditures over revenues in fiscal year 2004 and fiscal year 2005. Reserve
levels are consistent throughout the period.
The City is preparing a five year capital improvement plan that is separate from the Five Year Plan discussed
above. See "CURRENT FINANCIAL STATUS OF THE CITY -Capital Improvement Plan" herein.
Adoption of Investment Policy
The City adopted a detailed written investment policy on May 10, 2001, that applies to all cash and investmdnts
held or controlled by the City and identified as "general operating funds" of the City with the exception of the City's
Pension Funds, Deferred Compensation & Section 401(a) Plans, and such funds related to the issuance of debt where
there are other existing policies or indentures in effect for such funds. Additionally, any future revenues, which have
statutory investment requirements conflicting with the City's Investment Policy and funds held by state agencies (e.g.
Department of Revenue), are not subject to the provisions of the policy.
The foremost objective of the investment program is the safety of the principal of those funds within the
portfolios. Investment transactions shall seek to keep capital losses at a minimum, whether they are from securities
defaults or erosion of market value. To attain this objective, diversification is required in order that potential losses on
individual securities do not exceed the income generated from the remainder of the portfolio. The portfolios are required
to be managed in such a manner that funds are available to meet reasonably anticipated cash flow requirements in an
orderly manner. Investment portfolios are required to be designed with the objective of attaining a market rate of return
throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs.
Return on investment is of least importance compared to the safety and liquidity objectives described in the policy. In
24
012- 797
accordance with the City's Administrative Policies, the responsibility for providing oversight and direction in regard to
the management of the investment program resides with the City's Finance Director. The Finance Director has
established written procedures for the operation of the investment portfolio and a system of internal accounting and
administrative controls. Pursuant to the policy, the City may employ an Investment Advisor to assist in managing some
of the City's portfolios, but has not done so at this time. To the extent possible, an attempt shall be made to match
investment securities with known cash needs and anticipated cash flow requirements.
The City's investment policy may be modified from time to time by the City Commission.
Subject to the exceptions in the City's investment policy, the City may invest in the following types of
securities: (a) The Florida Local Government Surplus Funds Trust Fund, (b) United States Government Securities, (c)
United States Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time Deposit or,Savings
Accounts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i) Bankers' Acceptances, 6) State
and/or Local Government Taxable and/or Tax -Exempt Debt, (k) Registered Investment Companies (Money Market Mutual
Funds) and (1) Intergovernmental Investment Pool. Also, the City may invest in investment products that include the
use of derivatives as long as the dollar amount invested by the investment product is minuscule to the total dollar
amount invested by the investment product.
The City's Finance Department strives to achieve maximum permissible financial return on available cash
resources. Idle cash balances are invested on a daily basis within the constraints imposed by applicable law and City
policies. Substantially all of the City's investments are either insured, registered or physically held in the City's name
in order to safeguard its investments. For purposes of maximizing interest earnings, substantially all of the City's cash
and investments are pooled, except where separate cash and investments accounts are maintained in accordance with
applicable legal requirements. The City's cash equivalents and investments consist of demand deposits with banks, and
money market fund investments with original maturities of three months or less and equity in the City's cash management
pool.
As of May 31, 2002, approximately 78.45% of the City's investment portfolio was invested in United States
Treasury Obligation and obligations of agencies of the United States Government. Approximately 21.55% of the City's
investment portfolio was invested in commercial paper.
Adoption of Debt Management Policy
The City adopted a Debt Management Policy on July 21, 1998 to provide guidance governing the issuance,
management, continuing evaluation of and reporting on all debt obligations issued by the City and to provide for the
preparation and, implementation necessary to assure compliance and conformity with the policy. It is the responsibility
of the City's fi ance committee to review and make recommendations regarding the issuance of debt obligations and the
management of outstanding debt. The finance committee consists of seven voting members - five members of the local
business community which are appointed by the City Commission, the City Manager or his designee and the City's
Finance Director. The finance committee considers all issues related to outstanding and proposed debt obligations,
votes on issues affecting or relating to the credit worthiness, security and repayment of such obligations, including but
not limited to procurement of services, structure, repayment terms and covenants of the proposed debt obligation, and
issues which may affect the security of the bonds and ongoing disclosure to bondholders and interested parties.
In the Debt Management Policy, the following policies concerning the issuance and management of debt were
established: (a) the City will not issue debt obligations or use debt proceeds to finance current operations; (b) the City
will utilize debt obligations only for acquisition, construction or remodeling of capital improvement projects that cannot
be funded from current revenue sources or in such cases wherein it is more equitable to the users of the projects to
finance the project over its useful life; and (c) the City will measure the impact of debt service requirements of
outstanding and proposed debt obligations on single year, five, ten and.twenty year periods. This analysis will consider
debt service maturities and payment patterns as well as the City's commitment to a pay as you go budgetary capital
25
02-.'797
allocation.
The finance committee has approved the Series 2002 Bonds and their negotiated sale to the Underwriters.
Capital Improvement Plan
The City does not currently have a capital plan, but has hired Post, Buckley, Shuh and Jernigan as consultants
to prepare a twenty-year capital plan along with a current condition assessment of the City's infrastructure. The study
is currently underway and is expected to be completed in October, 2002. Proceeds of the Series 2002 Bonds and all other
series of the approved limited ad valorem tax revenue bonds, together with additional revenue bonds and other legally
available funds of the City will be used to fund the capital improvement plan. Such capital plan shall be implemented
subject to the approval of the City Commission.
Information Technology
Improvements in the City's intellectual infrastructure will be stressed during the next five years. As the City
emerges from its financial difficulties it has the additional resources to address software and hardware needs.
Information technology will constitute a critical element in the overall strategic plan formulated by the City. The City has
formulated a long-term strategic plan and is in the process of the implementing of the plan. The City Manager has
created an Information Technology Steering Committee composed of senior executives from all the City's critical
functional areas. This committee is charged with the responsibility of reviewing and approving all major technology
projects based on a sound business evaluation, establishing the priorities of major projects, allocating resources of time,
personnel and equipment to meet the needs of these projects, approving major software development and/or hardware
and software acquisitions, and setting the goals and scope of a disaster recovery and business continuity plan. The
technology improvements will be partially funded under the capital improvement plan. See "CURRENT FINANCIAL
STATUS OF THE CITY- Capital Improvement Plan" herein.
Fiscal and Accounting Procedures
The accounts of the City are organized on the basis of funds or account groups, each of which is considered
a separate accounting entity in accordance with generally accepted accounting principles, as defined by the
Governmental Accounting Standards Board ("GASB"). The operation of each fund is accounted for in a separate self -
balancing set of accounts which comprise its assets and other debits, liabilities, fund equities and other credits, revenues
and expenditures. Individual funds that have similar characteristics are combined into fund types.
For,�h'e past 2 years the City has received the Certificate of Achievement for Excellence in Financial Reporting
from the Government Finance Officers Association of the United States and Canada. For a complete description of the
fund types and account groups, see Notes to General Purpose Financial Statements of the City in Appendix "C" herein.
GASB 34
In June 1999, the General Accounting Standards Board ("GASB") issued GASB Statement No. 34, Basic
Financial Statements — and Management's Discussion and Analysis — for State and Local Governments. This
statement will substantially affect the City's financial data accumulation and financial statement presentation processes.
The effective date of the new pronouncement will require implementation by the City for its fiscal year ending September
30, 2002. The City staff has participated in various GASB Statement No. 34 training sessions offered by the Florida
Institute of Certified Public Accountants, Governmental Finance Officers Association and Florida Governmental Finance
Officers Association and have prepared internally a pro forma GASB 34 Model. The City believes the implementation
of GASB 34 will proceed as scheduled.
General Fund
26 02— i
The General Fund is the general operating fund of the City. It accounts for all financial resources except for
those required to be accounted for in another fund. The largest source of revenue in this fund is generated from ad
valorem taxation. The revenues and expenditures of the General Fund have stabilized at levels below the 1996
combination of proprietary operations into the fund. In addition to the five years of balanced budgets, the City has
rebuilt its reserves. Operations will be removed from the General Fund only when they can be operated as true enterprise
operations.
The following chart shows information regarding the General Fund over the five year period ending September
30, 2001.
[Remainder of page intentionally left blank.]
27
02- 797
Summary Schedule of Revenues, Expenditures and Changes in Fund Balance(Deficit)
$24,592,817
$23,025,280
for the General Fund and Fund Balance (Deficit)
Beginning of Year
$61,743,000
Planning & development
5,759,424
_
5,481,237
Fiscal Year ended Sevtember
30"
Public works
40,975,451
Revenues
2001
2000
1999
1998
1997
Taxes
$119,683,851
$120,426,167
$120,781,649
$108,172,648
$105,493,000
Franch. Fees/Other Taxes
19,081,242
10,960,340
14,383,175
14,419,801
14,075,000
Licenses and permits
20,333,532
19,833,395
16,050,882
16,641,532
9,816,000
Intergovernmental
33,688,246
44,454,300
34,032,189
33,841,573
42,814,000
Charges for services
84,334,277
75,470,338
54,241,929
41,866,305
50,387,000
Fines and forfeitures
4,818,554
4,249,201
3,703,068
2,814,571
2,761,000
Interest
15,909,309
11,134,284
6,916,561
6,132,593
2,939,000
Other
5506,192
6,751,637
2,963,999
18,070.3551"
6,503,000
Total Revenues
$303,355,203
$293,279,662
$253,073,452
$241,959,378
$233,560,000
Expenditures
General government
$24,592,817
$23,025,280
$20,509,297
$18,022,017
$61,743,000
Planning & development
5,759,424
5,041,707
5,481,237
5,330,525
3,714,000
Public works
40,975,451
37,015,471
38,799,233
35,728,747
31,142,000
Public safety
132,844,965
135,173,374
126,287,513
116,894,329
107,127,000
Public facilities
4,547,020
4,379,971
3,819,893
3,556,522
7,337,000
Parks and recreation
9,358,344
8,746,720
8,221,325
6,994,947
6,770,000
Pensions
18,653,241
16,066,694
13,780,194
35,777,750
29,436,000
Organizational support
23,148,843
21,341,763
17,556,879
--
--
Risk management
33,305,868
27,224,122
21,393,616
21,631,701
--
Other
--
--
--
--
13,204,00013'
Non -departmental
7,891,729
3,083,482
4,373,074
23,560,648
--
Total Expenditures
$301,077,702
$281,098,584
$260.222,261
5267,497,186
$260,473,000
Excess (Deficiency) of
Revenues Over (Under)
Expenditures
2,277,501
12,181,078
(7,148,809)
(25,537,808)
(26,913,000)
Other financing sources
and (uses):
Operating transfers in 42,369,469 37,752,300 37,894,600 84,601,710'2' 59,605,000'
Operating transfers out (32,934,411) (13,985,473) (28,054,155) (29,868,163) (9,041,000)
Total other financing
sources, net 9,435,058 23,766,827 9,840.445 54,733,547 50,564,000
Excess of Revenues and
Other Financing Sources
Over Expenditures and
Other Financing Uses 11,712,559 35,947,905 2,691,636 29,195,739 23,651,000
Fund balance (deficit) at
beginning of year 75,466,134 43,039,538 40,973,658 1,835,000 (21,816,000)
Equity transfers in (out) (13,662) (3,521,309)62f 5,756) 9,942,919 —
Fund balance at end of year X87, 165.03 I X75,466.134 $43,039.538 40 973 658 1 835,0.00
(1) Includes pension contributions of $12,725,420.
(2) Includes proceeds from land sales of $49,457,418.
(3) Includes interest charges of $5,285,000.
(4) Includes proceeds from land sales of $9,094,000.
Source: The City of Miami, Florida
28
02 797
LIABILITIES OF THE CITY
Insurance Considerations Affecting the City
Section 768.28, Florida Statutes, provides limits on the liability of the State of Florida and its subdivisions of
$100,000 to any one person, or $200,000 for any single incident or occurrence. See "Ability to be Sued, Judgments
Enforceable" below. Under the protection of this limit and Chapter 440, Florida Statutes, covering Workmen's
Compensation, the City established a Self Insurance Fund to provide coverage for all areas of liability including
Workmen's Compensation, General Liability, Auto Liability, Police Professional Liability and Public Officials Liability.
The City is self-insured for most liability activities. In addition, the City has purchased an excess liability policy (the
"Excess Coverage") to limit catastrophic losses. This Excess Coverage policy has a self-insured retention of $350,000
with limit of $5,000,000. The City also purchases commercial insurance for property, liability coverage for the James L.
Knight Center and Bayfront Park and Marinas Operators Liability for the City's marinas. The property insurance has
a deductible of $100,000 for all perils except windstorm, which has a separate deductible of 3% of the insured value to
a maximum of $6,000,000. The liability policies have a $5,000 and $500 deductible for James L. Knight Center and Bayfront
Park respectively and the Marinas policy has a $2,500 deductible.
Settled claims have not exceeded coverage in the past three years. The General Fund accounts for all risk of
loss to which the City is exposed, including general liability, property and casualty, workers' compensation, employee
health and accident and environmental. Claims expenditures and liabilities are reported when it is probable that a loss
has occurred and the amount of that loss can be reasonably estimated based on an independent actuarial valuation. The
budgeting process utilizes information developed in the previous year's actuarial report in addition to historical
information and present knowledge on the status of claims. The City is building a fund to meet unanticipated losses at
the rate of $1,100,000 per year. Currently, there is 53,300,000 in such fund.
Workers Compensation. The City has been working very hard to reduce the backlog of workers compensation
claims recently. The City has reduced the total number of open workers compensation claims from a high of 2,971 to
approximately 1,648 over the last two years. Such reduction equates to a 45% decrease. The City is continuing to work
on a program to further reduce claims and costs. They are currently reviewing the Worker's Compensation area and are
searching for a new head of the Risk Management Department. The table below shows the six year history of the
amounts paid by the City.
City of Miami
Workers Compensation Reserve Analysis as of September 30, 2001
Ultimate Reconciliation
($000's)
Estimated Selected
Policy Selected Reported Paid Total Case IBNR* Ultimate
Year Ultimate Amounts Amounts Reserve Reserve Reserve @2M Change
2001 513,746 $5,622 $1,284 $12,462 54,338 $8,125 $11,022 $2,724
2000 11,041 4,089 2,644 8,397 1,445 6,953 10,775 266
1999 9,484 3,709 2,837 6,647 872 5,775 9,102 382
1998 8,769 4,247 3,461 5,308 787 4,521 8,275 493
1997 10,985 5,811 4,770 6,215 1,041 5,175 9,853 1,132
1996 11.994 6.940 5,820 5.308 1.120 LQJI 11132 862
Total $66,019 JAL203 9 603 jj 859
*IBNR - incurred but not rcportcd.
Source: The City of Miami. Florida
29
02-- 797
Health Insurance. The City has a group accident and health policy whose premiums are tied to !tie City's
experience rating. Certain employees and retirees of the City contribute through payroll deductions or deductions from
pension payments, to the cost of group benefits. The remainder of the funds necessary are contributed by the City
based upon the number of participants in the plan. There was a less than 20% increase in the premiums of the City's
plan this past year and the City anticipates an additional increase next year.
Ability to be Sued, Judgments Enforceable
Notwithstanding the liability limits described below, the laws of the State of Florida provide that each city has
waived sovereign immunity for liability in tort to the extent provided in Section 768.28, Florida Statutes. Therefore, the
City is liable for tort claims in the same manner and, subject to limits stated below, to the same extent as a private
individual under like circumstances, except that the City is not liable for punitive damages or interest for the period prior
to judgment. Such legislation also limits the liability of a city to pay a judgment in excess of $100,000 to anyone person
or in excess of $200,000 because of any single incident or occurrence. Judgments in excess of $100,000 and $200,000 may
be rendered, but may be paid from City funds only pursuant to further action of the Florida Legislature. See "Insurance
Considerations Affecting the City" herein. Notwithstanding the foregoing, the City may agree, within the limits of
insurance coverage provided, to settle a claim made or a judgment rendered against it without further action by the
Legislature, but the City shall not be deemed to have waived any defense or sovereign immunity or to have increased
the limits of its liability as a result of its obtaining insurance coverage for tortious acts in excess of the $100,000 or
$200,000 waiver provided by Florida Statutes. See "LITIGATION" herein.
(Remainder of page left intentionally blank.)
31
02- 797
Indebtedness of the City
Pursuant to the Debt Management Policy, the City's debt issuance is subject to the following constraints: (i)
the Net Debt Per Capita and the Net Debt to Taxable Assessed Value percentages, which shall be determined by the
finance committee by bench marking the City to current industry standards, and (ii) the maximum maturity shall be the
earlier of (a) the estimated useful life of the capital improvements being financed or (b) thirty years or (c) in the event they
issued to refinance outstanding debt obligations the final maturity of the debt obligations being refinanced, unless a
longer term is recommended the finance committee.
Direct Debt
The City has met certain of its financial needs through debt financing. The table which follows is a schedule
of the outstanding debt of the City as of June 30, 2002, including that which is payable from sources other than ad
valorem taxes.
DESCRIPTION
Amount
Outstanding
General Obligations:
Issued
Balance
Public Parks & Recreational Facilities, Series 1977
$14,040,000
5550,000
Storm Sewer, Housing, Fire Fighting, Series 1981
9,150,000
2,355,000
General Obligation Refunding Bonds, Series 1992
70,100,000
39,390,000
General Obligation Refunding Bonds, Series 1993
31,860,000
24,425,000
General Obligation Refunding Bonds, Series 2002A
32.510,000
32.510.000
Total General Obligation Bonds
S 157,660.000
599,230.00
Special Obligation and Revenue Bonds:
Special Obligation Bonds, Series 1986A
54,290,000
51,375,000'
Special Revenue Refunding Bonds, Series 1987
65,271,325
45,030,022
Guaranteed Entitlement Rev. Bonds, Series 1989
6,500,000
3,640,000
Community Entitlement Rev. Bonds, Series 1990
11,500,000
2,855,000
Special Non -Ad Valorem Rev. Bonds, Series 1994
18,000,000
13,625,000
Special Obligation Non -Ad Valorem Rev. Bonds
22,000,000
20,065,000
Special Obligation Non -Ad Valorem Revenue
Bonds, Series 1995
72.000,000
66.745.000
Total Special Obligation and Revenue Bonds
S 199,561.325
S 153.335.022
/
Loans:
Sunshine State Gov. Financing Commission Loans
Revenue Bond Program
$27,630,000
$17,211,700
Commercial Paper Program
15,190,000
2,695,000
Commercial Paper Program
30,000,000
25,780,00
Section 108 HUD Loan
5,100,000
4,700,000
Section 108 HUD Loan
2,500,000
1,400,000
Section 108 HUD Loan - Wynwood Foreign
Trade Zone, Inc.
5,500,000
4,860,000
Sunshine State Gov. Financing Commission -
Secondary Loan
3,500,000
2,715,000
Gran Central Corporation Loan
1.708.864
1.708.864
Total Loans
$91,128.864
$61.070,564
Total Debt
$448,350,189
$313,635.586
32
02- 797
..............
Overlapping Debt
The table set forth below summarizes the general obligation debt of the Miami -Dade County and the School
Board of Miami -Dade County as of September 30, 2001. While the City believes the amount of debt of the School Board
of Miami -Dade County and Miami -Dade County set forth below to be accurate, it should be understood that this amount
was derived from source materials which were not complied and are not subject to verification by the City. Accordingly,
no assurance can be given as to the absolute accuracy of these amounts.
Miami -Dade County
Total net debt net of reserves $264,763,778
Percent applicable to the City - 190/61" S50,305,118
Miami -Dade County School Board 121
Total net debt net of reserves $1,008,525,781
Percent applicable to the City - 19%1" 191,619,898
241.925,016
(" Based upon the percentage of the County tax roll valuation
-
comprised of real and personal property situated in the City of Miami.
t'-' The amounts provided by the school board are as of fiscal year ended June 30, 2001.
Debt Ratios*
Net direct general obligation debt as a percentage of taxable assessed valuation
0.75%
Combined net direct and overlapping general obligation debt as a percent of
taxable assessed valuation
2.51%
Net direct general obligation debt per capita
$286.44
Combined net direct general and special obligation debt per capita
$781.16
Combined net direct and overlapping general obligation debt per capita
$953.87
Combined net direct and overlapping general and special obligation per capita
$1,448.59
'As of September 30. 2002
Other Obligations
Pension Fund. The City's employees participate in two separate single employer defined benefit contributory
pension plans under the administration and management of separate Boards of Trustees: The City of Miami Fire Fighters'
and Police Officers' Retirement Trust ("FIPO") and the City of Miami General Employees and Sanitation Employees'
Retirement Trusl ("GESE"). The plans cover substantially all City employees who contribute a percentage of their base
salary or wage on a bi-weekly basis.
The City's elected officials participate in a single employer defined benefit non-contributory pension plan under
the administration and management of a separate Board of Trustees, the City of Miami Elected Officers' Retirement Trust
("EORT"). This plan covers all elected officials with 10 or more years of elected service.
City employees are required to contribute 10% of their salary to GESE and no more than 7% to FIPO. The EORT
is a non-contributory plan. Contributions from employees for FIPO and GESS are recorded in the period the City makes
payroll deductions from participants. The City is annually required to contribute such amounts as necessary on an
actuarial basis to provide FIPO and GESE with assets sufficient to meet the benefits to -be paid. The ordinance covering
the FIPO (the "Pension Ordinance") provides for actuarial methodology for evaluating assets to be a moving market
value averaged over three years. The result cannot be greater than 100 percent of market value or less than 80 percent
33
02- 797
of market value. The Pension Ordinance also provides for the FIPO Board of Trustees' actuary to use the actuarial
assumptions adopted the FIPO Board. Currently, the City and the FIPO are in discussions regarding the amount needed
for contribution. However, if the City's actuary and the FIPO's actuary cannot agree, together they may appoint a third
independent actuary. The third actuary is required to submit a funding recommendation to the FIPO Board and the City
Commission. The City Commission is then required to fund the amount recommended by either the FIPO's actuary or
the City's actuary, whichever recommendation is closer to the recommendation of the third actuary.
The City has challenged the normal costs contributions for the last two years and arbitration of this issue is
still pending. As a result, the City only paid a normal cost contribution of $5.4 million in October 2000 instead of $6.9
million and in October 2001, a normal cost contribution of $5.5 million instead of $5.6 million. The projected $23 million
normal cost contribution by the FIPO actuary for October 2002 has not yet been adopted by the FIPO Board and is still
subject to review and revision. If after review and any subsequent revisions of the required normal cost contribution
of the City, the City and the FIPO Board are still not in agreement, the City would only be required to pay $5.4 million
until this issue is resolved through arbitration. The City believes it will have sufficient funds from its general funds to
fund the recommended amount accepted by the City Commission.
Accrued Compensated Absences. Under terms of Civil Service regulations, labor contracts and administrative
policy, City employees are granted vacation and sick leave in varying amounts. Additionally, certain overtime hours can
be accrued and carried forward as earned time off. Unused vacation and sick time is payable upon separation from
service, subject to various limitations depending upon the employee's seniority and civil service classification. The
amount accrued is currently 548,376,190. The City has set aside $4,500,000 in the budget for fiscal year 2002 and pays
such amounts as needed. Every three years the maximum number of hours which can be carried forward is renegotiated
with FIPO and GESE.
Collective Bargaining Agreements. The City operates under four labor agreements covering police, fire,
general and sanitation employees. The labor agreements covering police, fire and general employees were authorized
and approved by the City Commission on March 27, 2002. Although the labor agreement for the sanitation employees
has expired, the labor contract continues under status quo until a new contract is negotiated and ratified. The City's
negotiating team includes the Labor Relations Officer for the City, the Fire Chief, the Budget Director and the City
Manager. The parties are continuing to meet and negotiate a new contract with respect to sanitation employees, and
the City expects the negotiations to conclude within the next 30 days.
OTHER BORROWINGS
The City is currently in the process of issuing its Special Obligation Non -Ad Valorem Revenue Refunding
Bonds, Serie- and its Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002B in the
aggregate amount of $40,500,000 for the purpose of refunding certain outstanding debt. Such bonds are secured by a
covenant to budget and appropriate Non -Ad Valorem Revenues.
LEGAL MATTERS
Certain legal matters incident to the validity of the Series 2002 Bonds are subject to the approval of Squire,
Sanders & Dempsey L.L.P., Bond Counsel, Miami, Florida whose approving opinion in the form attached hereto as
"APPENDIX E —FORM OF BOND COUNSEL OPINION" will be fumished without charge to the purchasers of the Series
2002 Bonds at the time of their delivery. The actual legal opinion to be delivered may vary from that text if necessary to
reflect facts and law on the date of delivery.
Certain legal matters will be passed upon for the City by Alejandro Vilarello, Esq., City Attorney, and by Bryant,
Miller and Olive, P.A., Coral Gables, Florida and Manuel Alonso-Poch, P.A., Coral Gables, Florida, Co -Disclosure Counsel
to the City.
02-- 797
Certain legal matters will be passed upon for the Underwriters by Hunton & Williams, Washington, D.C.
LITIGATION
There is no pending or, to the knowledge of the City, any threatened litigation against the City of any nature
whatsoever which in any way questions or affects the validity of the Series 2002 Bonds, or any proceedings or
transactions relating to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the levy of the
ad valorem taxes. Neither the creation, organization or existence, nor the title of the present members of the City
Commission, or other officers of the City is being contested.
The City experiences claims, litigation, and various legal proceedings which individually are not expected to
have a material adverse effect on the operations or financial condition of the City, but may, in the aggregate, have a
material impact thereon. In the opinion of the City Attorney, however, except as described below, the City will either
successfully defend such actions or otherwise resolve such matters without any material adverse consequences to the
financial condition of the City.
On July 13, 1999, the City Commission approved Ordinance No. 11813 (the ,Parking Surcharge Ordinance")
pursuant to Section 218.503(5), Florida Statutes, which institutes a 20% surcharge for parking transactions at parking
facilities within the limits of the City. The effective date for the implementing of the surcharge was September 1, 1999.
The surcharge is applicable to all parking facilities, public or private, where there is a charge, fee or exchange for parking.
It also applies to parking associated with valet service, events and parking validations. Various parties sued the City
challenging the Parking Surcharge Ordinance. The above lawsuits involve a class action claim wherein invalidation of
the City's Parking Surcharge Ordinance is sought on the grounds that the enabling statute is a special, rather than
general, law. The statute was upheld by the trial court, but invalidated by the Third District Court of Appeals in July
2001. The City has appealed to the Supreme Court of Florida and oral argument was held in February 2002. Although
the statute was amended in November, 2001 and the legislature ratified the statute and all acts and proceedings taken
in connection with the surcharge imposed, if the statute is invalidated by the Supreme Court, the City could be required
to return all revenues collected before the amendment which would be approximately $25 million, or could be required
to return only the sums collected between July, 2001 and the date of the amendment, approximately S5 million. The City
has reserved approximately 54.600,000 for the payment of any refunds to date.
A class action suit was filed to challenge the City's Fire Rescue Assessment (the '`Assessment"). The plaintiffs
contend that the Assessment is an unconstitutional tax on real property and, further, that it is not properly apportioned.
The City's motion for summary judgment is pending. However, a challenge to the City of North Lauderdale, Florida's
fire rescue assessment resulted in the Fourth District Court of Appeal concluding that the same was unconstitutional.
That decision is currently being appealed to the Supreme Court of Florida. Since the date of the decision of the Fourth
District Court of Appeal, the City amended the Assessment to comply with the judgment of the Fourth District Court
of Appeal in the North Lauderdale case. However, if the Assessment is declared unconstitutional, the City could be
required to return as much as 527 million.
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell
securities of the City except by an offering circular containing full and fair disclosure of all defaults as to principal or
interest on its obligations since December 31, 1975, as provided by rule of the Florida Department of Banking and Finance
(the "Department"). Pursuant to Rule 3E-400.003, Florida Administrative Code, the Department has required the
disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee
or receiver has been appointed over the assets of the City, and certain additional financial information, unless the City
believes in good faith that such information would not be considered material by a reasonable investor. The City is not
and has not been in default on any bond issued since December 31, 1975 which would be considered material by a
35
02- 797
reasonable investor.
TAX MATTERS
General
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law (i) interest on the Series
2002 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"), and is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, and (ii) the Series 2002 Bonds and the income thereon are exempt
from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as
amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel will
express no opinion as to any other tax consequences regarding the Series 2002 Bonds.
The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and
certifications, and continuing compliance with certain covenants, of the Issuer to be contained in the transcript of
proceedings and that are intended to evidence and assure the foregoing, including that the Series 2002 Bonds are and
will remain obligations the interest on which is excluded from gross income for federal income tax purposes. -Bond
Counsel will not independently verify the accuracy of those certifications and representations.
The Code prescribes a number of qualifications and conditions for the interest on state and local government
obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future
or continued compliance after issuance of the obligations in order for the interest to be and to continue to be so excluded
from the date of issuance. Noncompliance with these requirements by the Issuer may cause the interest on the Series
2002 Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax
retroactively to the date of issuance of the Series 2002 Bonds. The Issuer has covenanted to take the actions required
of it for the interest on the Series 2002 Bonds to be and to remain excluded from gross income for federal income tax
purposes, and not to take any actions that would adversely affect that exclusion.
Under Code provisions applicable only to certain corporations (as defined for federal income tax purposes), a
portion of the excess of adjusted current earnings (which includes interest on all tax-exempt obligations, including the
Series 2002 Bonds) over other alternative minimum taxable income is included in alternative minimum taxable income that
may be subject to a corporate alternative minimum tax. In addition, interest on the Series 2002 Bonds may be subject to
a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed
on excess net passive income of certain S corporations.
Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain
adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial
institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are
deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible
for the earned income tax credit. The applicability and extent of these or other tax consequences will depend upon the
particular tax status or other tax items of the owner of the Series 2002 Bonds. Bond Counsel will express no opinion
regarding those consequences.
Purchasers of the Series 2002 Bonds at other than their original issuance at the respective prices indicated on
the cover of this Official Statement should consult their own tax advisers regarding other tax considerations such as the
consequences of market discount.
Original Issue Discount and Original Issue Premium
36
02- 79A
Certain of the Series 2002 Bonds ("Discount Bonds") as indicated on the cover page of this Official Statement
were offered and sold to the public at an original issue discount ("OID"). OID is the excess of the stated redemption price
at maturity (the principal amount) over the "issue price" of a Discount Bond. The issue price of a Discount Bond is the
initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of
underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant
to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to
maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding
interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond
purchased in the initial offering at the price for such Discount Bond stated on the cover of this Official Statement (i) is
interest excludable from the owner's gross income for federal income tax purposes to the same extent, and subject to the
same considerations discussed above, as other interest on the Series 2002 Bonds, and (ii) is added to the owner's tax
basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition. of that
Discount Bond. A purchaser of a Discount Bond at its issue price in the initial public offering who holds that Discount
Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond.
Certain of the Series 2002 Bonds ("Premium Bonds") as indicated on the cover of this Official Statement were
offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That
excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity
of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior
to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call
date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium
is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale,
redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner's tax basis in the
Premium Bond is reduced by the amount of bond premium that accrues during the period of ownership. As a result, an
owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for
an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond
at its issue price in the initial public offering who holds that Premium Bond to maturity (or, in the case of a callable
Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss
upon the retirement of that Premium Bond.
Owners of Discount and Premium Bonds should consult their own tax advisers as to the determination for
federal income tax purposes of the amount of OID or bond premium properly accruable in any period with respect to the
Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and bond premium for
purposes of state and local taxes on, or based on, income.
RATINGS
Moody's Investor's Service ("Moody's"), Fitch Ratings and Standard & Poor's Ratings Group ("S&P") are
expected to assign their municipal bond ratings of " ;' " " and " ," respectively, to the Series 2002
Bonds with the understanding that upon delivery of the Series 2002 Bonds, the municipal bond insurance policy will be
issued by the Insurer.
In addition, and have assigned underlying ratings of " "_" and .. ",
respectively, without giving any regard to such municipal bond insurance policy. The ratings reflect only the views of
said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no
assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn
entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in
or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2002 Bonds.
37
02" 797
FINANCIAL ADVISOR
The City has retained Dunlap & Associates, Inc. and Fidelity Financial Services, L.C., as Co -Financial Advisor
in connection with the City's financing plans and with respect to the authorization and issuance of the Series 2002 Bonds.
The Financial Advisors did not participate in the underwriting of the Series 2002 Bonds.
AUDITED FINANCIAL STATEMENTS
The General Purpose Audited Financial Statements of the City for the fiscal year ending September 30, 2001(the
"Audited Financial Statements"), and report thereon of KPMG LLP (the "Independent Certified Public Accountant") are
attached hereto as "APPENDIX D — GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF
MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30,2001.- Such statements speak only as of September 30, 2001.
The Audited Financial Statements have been included as a public document and the Independent Certified Public
Accountant has not consented to the inclusion of such Audited Financial Statements in this Official Statement.
UNDERWRITING
The Series 2002 Bonds are being purchased by the underwriters shown on the cover of the Official Statement
(collectively, the "Underwriters") at an aggregate purchase price of $ (the par amount of the Series 2002
Bonds, [plus net original issue premium][less net original issue discount] of S less Underwriters'
discount of S and plus accrued interest of S ). The Underwriters' obligations are subject to certain
conditions precedent described in the Bond Purchase Contract entered into between the City and the Underwriters, and
they will be obligated to purchase all of the Series 2002 Bonds if any Series 2002 Bonds are purchased. The Series 2002
Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2002 Bonds into investment
trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time,
by the Underwriters.
CONTINGENT FEES
The City has retained Bond Counsel, Co -Financial Advisor and Co -Disclosure Counsel with respect to the
authorization, sale, execution and delivery of the Series 2002 Bonds. Payment of the fees of such professionals and an
underwriting discount to the Underwriters are each contingent upon the issuance of the Series 2002 Bonds.
ENFORCEABILITY OF REMEDIES
TW remedies available to the owners of the Series 2002 Bonds upon an event of default under the Resolution
and the Municipal Bond Insurance Policy 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
the federal bankruptcy code, the remedies specified by the Resolution, the Series 2002 Bonds and the Municipal Bond
Insurance Policy may not be readily available or may be limited. The various legal opinions to be delivered concurrently
with the delivery of the Series 2002 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the
enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery.
CONTINUING DISCLOSURE
The City will covenant for the benefit of the Series 2002 Bondholders to provide certain financial information
and operating data relating to the City and the Series 2002 Bonds in each year, and to provide notices of the occurrence
of certain enumerated material events. The City has agreed to file annual financial information and operating data and
its audited financial statements with each nationally recognized municipal securities information repository then
approved by the Securities and Exchange Commission (the "NRMSIRs"), as well as any state information depository
38
02-_ 797
that is established in the State (the "SID"). Currently, there are no such SIDS. The City has agreed to file notices of
certain enumerated material events, when and if they occur, with the NRMSIRs or the Municipal Securities Rulemaking
Board, and with the SIDS, if any.
The specific nature of the financial information, operating data, and of the type of events which trigger a
disclosure obligation, and other details of the undertaking are described in "APPENDIX G -- FORM OF DISCLOSURE
DISSEMINATION AGENT AGREEMENT" attached hereto. The Disclosure Dissemination Agent Agreement shall be
executed by the City prior to the issuance of the Series 2002 Bonds. These covenants have been made in order to assist
the Underwriters in complying with the continuing disclosure requirements of Rule 1Sc2-12 promulgated by the Securities
and Exchange Commission (the "Rule").
With respect to the Series 2002 Bonds, no party other than the City is obligated to provide, nor is expected to
provide, any continuing disclosure information with respect to the Rule. The City has never failed to comply with any
prior agreements to provide continuing disclosure information pursuant to the Rule.
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT
The references, excerpts, and summaries of all documents, statutes, and information concerning the City and
certain reports and statistical data referred to herein do not purport to be complete, comprehensive and definitive and
each such summary and reference -is qualified in its entirety by reference to each such document for full and complete
statements of all matters of fact relating to the Series 2002 Bonds, the security for the payment of the Series 2002 Bonds
and the rights and obligations of the owners thereof and to each such statute, report or instrument.
The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety
together with all foregoing statements. The information and expressions of opinions herein are subject to change
without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any
circumstances, any implication that there has been no change in the affairs of the City from the date hereof.
FORWARD-LOOKING STATEMENTS
This Official Statement contains certain "forward-looking statements" concerning the City's operations,
performance and financial condition, including its future economic performance, plans and objectives and the likelihood
of success in developing and expanding. These statements are based upon a number of assumptions and estimates
which are subject to significant uncertainties, many of which are beyond the control of the City. The words "may,"
"would, "'could;' "will," "expect," "anticipate," "believe," "intend, "`plan, "`estimate" and similar expressions are meant
to identify th,6se forward-looking statements. Actual results may differ materially from those expressed or implied by
these forward-looking statements.
MISCELLANEOUS
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so
expressly stated are set forth as such and not as representations of fact, and no representation is made that any of the
estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in
writing is to be construed as a contract with the owners of the Series 2002 Bonds.
39
U2-- 797
AUTHORIZATION OF OFFICIAL STATEMENT
The execution and delivery of this Official Statement has been duly authorized and approved by the City. At
the time of delivery of the Series 2002 Bonds, the City will furnish a certificate to the effcct that nothing has come to their
attention which would lead it to believe that the Official Statement (other than information herein related to the Insurer,
the Municipal Bond Insurance Policy, DTC, the book -entry only system of registration and the information contained
under the caption "TAX MATTERS" as to which no opinion shall be expressed), as of its date and as of the date of
delivery of the Series 2002 Bonds, contain an untrue statement of a material fact or omits to state a material fact which
should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary
to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.
THE CITY OF MIAMI, FLORIDA
By:
Mayor
By:
City Manager
40
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY OF MIAMI
General
Now 106 years old, the City of Miami, Florida (the "City") is part of the nation's eleventh largest metropolitan
area. Incorporated in 1896, the City is the only municipality conceived and founded by a woman - Julia Tuttle.
According to the U.S. Census Bureau, the City's population in 1900 was 1,700 people. Today it is a city rich in cultural
and ethnic diversity with more than 362,000 residents, 60% of them foreign born. In physical size the City is not large,
encompassing only 34.3 square miles. The City is situated at the mouth of the Miami River on the western shore of
Biscayne Bay, the main port entry in Florida. The City is the southernmost major city and seaport in the continental
United States. The nearest foreign territory is the Bahamian Island of Bimini, 50 miles from the City's coast. In
population, the City is the largest of the 31 municipalities that make up Miami -Dade County and is the county seat.
Population
Since 1997, the City has been governed by a form of government known as the "Mayor -Commissioner plan."
There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four
years. As official head of the City, the Mayor has veto authority over actions of the Commission. The Mayor appoints
the City Manager who functions as chief administrative officer.
Ci"ections are held in November every two years on a non-partisan basis. Candidates for Mayor must run
as such and not for the Commission in general. At each election, two or three members of the Commission are elected
for four-year teems. Thus, the terms are staggered so that there are always at least two experienced members of the
Commission.
The City Manager serves as the administrative head of the municipal government, charged with the
responsibility of managing the City's financial operations and organizing and directing the administrative infrastructure.
The City Manager also retains full authority in the appointment and supervision of department directors, preparation
of the City's annual budget and initiation of the investigative procedures. In addition, the City Manager takes
appropriate action on all administrative matters.
Climate
Miami's climate is sub -tropical -marine, characterized by long summers with abundant rain fall and mild, dry
winters. The average temperature in the summer is 81.4 degrees Fahrenheit and 69.1 degrees Fahrenheit in the winter,
with an average annual temperature of 75.3 degrees.
02- 797
City of
Percent
Miami -Dade
Percent
State of
Percent
Year
Miami
Chanee Countv Chanee
Florida
Change
1960
291,688
---
935,047
---
4,951,560
--
1970
331,553
13.6
1,267,792
35.6%
6,791,418
37.2%
1980
346,865
4.6
1,625,509
28.2
9,746,961
43.5
1990
358,648
3.4
1,937,194
19.2
12,938,071
32.7
2000
362,470
1.0
2,253,362
16.3
15,982,378
23.5
2010
N/A
N/A
2,196,100
-2.5
17,760,000
11.1
2015
N/A
NIA
2,173,300
-1.0
18,690,300
5.2
Source: University of Florida, Florida Statistical Abstract 2001
Government
Since 1997, the City has been governed by a form of government known as the "Mayor -Commissioner plan."
There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four
years. As official head of the City, the Mayor has veto authority over actions of the Commission. The Mayor appoints
the City Manager who functions as chief administrative officer.
Ci"ections are held in November every two years on a non-partisan basis. Candidates for Mayor must run
as such and not for the Commission in general. At each election, two or three members of the Commission are elected
for four-year teems. Thus, the terms are staggered so that there are always at least two experienced members of the
Commission.
The City Manager serves as the administrative head of the municipal government, charged with the
responsibility of managing the City's financial operations and organizing and directing the administrative infrastructure.
The City Manager also retains full authority in the appointment and supervision of department directors, preparation
of the City's annual budget and initiation of the investigative procedures. In addition, the City Manager takes
appropriate action on all administrative matters.
Climate
Miami's climate is sub -tropical -marine, characterized by long summers with abundant rain fall and mild, dry
winters. The average temperature in the summer is 81.4 degrees Fahrenheit and 69.1 degrees Fahrenheit in the winter,
with an average annual temperature of 75.3 degrees.
02- 797
Parks and Recreation
Outdoor recreational activities like golf, tennis, running, bicycling, rollerblading, boating and fishing can be
enjoyed year-round. Altogether, Miami -Dade County has 327 parks and recreational areas totaling 1.05 million acres,
including Everglades and Biscayne National Parks. Sixteen public golf courses and 590 public tennis courts are available
throughout the county.
Miami -Dade County's area's 22 public beaches comprise 1,400 acres, which are freely accessible and are
enjoyed year round by residents and tourists.
Athletics for spectator sports fans are held at the City -owned Orange Bowl Stadium, the Miami Convention
Center and the Miami Arena. Pro Player Stadium, which is used by the Miami Dolphins and the Florida Marlins, is
located in North Central Dade County. Sports competition includes professional and college football, basketball,
baseball and championship boat races. Other athletic events include amateur football, basketball, soccer, baseball,
motorcycle speedway racing and rowing events.
Education
Miami -Dade County's public school system is the fourth largest in the United States. The countywide school
district offers a wide variety of programs to meet the needs of its 350,000 -plus students. For example, Miami-Dade's
magnet schools provide intensive levels of instruction in subjects like science and technology, foreign languages, health
care, architecture, the performing arts and marine sciences. Other public school programs serve students with different
academic, physical or emotional needs, including gifted, advanced and remedial courses.
More than 68 percent of graduating seniors continue their education, and approximately 78.000 residents pursue
vocational and adult education studies.
Miami -Dade County is also noted for its high quality private schools, which include Guliver Academy, Miami
Country Day School and Ransom Everglades, as well as numerous schools affiliated with religious organizations.
Approximately 107,000 college students are studying at institutions of higher teaming. Miami -Dade Community
College is the largest comprehensive community college in the United States. Florida International University has two
convenient and highly rated academic programs. The University of Miami, a private undergraduate and graduate
institution, includes diversified research facilities and exceptional schools of law, music, medicine, and marine sciences.
Barry University, St. Thomas University, and Florida Memorial College offer degrees in a variety of subjects.
Medical
Miami -Dade County has the largest concentration of medical facilities in Florida, with 28 hospitals and more
than 29,000 licensed health care professionals. Nursing homes, adult congregate living facilities and home health care
services also serve the region.
The University of Miami Jackson Memorial Medical Center, the second-largest public hospital in the nation,
forms the hub of the region's medical centers, which includes world-renowned specialized facilities like Bascom Palmer
Eye Institute, the Mailman Center for Child Development and the Sylvester Comprehensive Cancer Center.
Miami -Dade County has an extensive network of community hospitals, such as Mount Sinai Medical Center,
Cedars Medical Center, Baptist Hospital, Mercy Hospital and Miami Children's Hospital. Nine area hospitals have
formed the Miami Medical Alliance, a cooperative effort to serve patients from Latin America and the Caribbean.
Transportation
A-2
02_. 797
Miami -Dade County has a comprehensive transportation network designed to meet the needs of residents,
travelers and area businesses. The county's internal transportation system includes Metrorail, a 21.1 mile above -ground
system linking Kendall, South Miami, Coral Gables, Brickell Avenue, Downtown Miami, the Medical Center, Northwest
Dade and Hialeah. Metromover, a 4.4 mile automated loop, carries passengers around downtown Miami, Brickell Avenue
and the Omni shopping center areas. More than 500 square miles of Miami -Dade County are covered by Metrobus,
which carries about 200,000 passengers daily. A new express bus route connects Cutler Ridge with Metrorail. Cargo
rail service is available from both the airport and seaport, and Amtrak has a passenger station in the City. Tri -Rail, a 67 -
mile train system, links West Palm Beach, Boca Raton, Fort Lauderdale, Hollywood and Miami International Airport.
Miami International Airport. Miami International Airport is one of the busiest airports in the world for both
passengers and cargo traffic. It ranks second in the nation and ninth in the world in passenger traffic through the airport.
The airport ranks second in the nation and fourth in the world in tonnage of domestic and international cargo movement.
In 2000 over 33 million air travelers were serviced by Miami International Airport, and approximately 3.6 billion pounds
of cargo were handled. More than 120 airlines serve Miami International Airport, flying passengers to more than 175
destinations on four continents. Miami International Airport is in the midst of a one billion dollar expansion planned
to service over 45 million passengers by the year 2005.
Port of Miami. The Port of Miami, known as the "cruise capital of the world," is operated by the Seaport
Department of the Miami -Dade County. From 1991 to 2000, the number of passengers sailing from the Port increased
from 2,928,532 to 3,364,643, and increase of 15%. The Port is currently the world's most active port in number of
passengers and frequency of sailings. Cargo movement through the Port has increased by 101% in the last ten years
of operation. The Port's operating revenues are increasing, reaching an estimated 564.5 million in 1999. With tighter
fiscal control, new Ion; -term contracts with major port customers and diligent collection of fees and rents, the revenue
stream should remain strong into the next century. The Port's fiscal health is important to the local economy,
contributing in excess of $8 billion annually and supporting 45,000 jobs. The Port has begun a five year, 5346 million
capital improvement program.
conomv
The economic base of the City has diversified in recent years, shifting from reliance on the tourism industry to
a combination of manufacturing, services industries and international trade. The area's advantages in terms of climate,
geography, low taxes and skilled labor have combined to make the Miami area a prime relocation area for major
manufacturing firms and international corporate headquarters.
The following major companies have their Latin American headquarters located in the City :
i
The Gap, Inc.
Federal Express -Corporation
Lucent Technologies
Barclays Bank PLC
Oracle Corporation
ABN AMRO Bank
Sony Latin America
Eastman Chemical Latin America
Volkswagen Group Latin America, Inc
Caterpillar Americas Co.
Ericsson, Inc.
Telefonica International USA, Inc.
IBM Corporation
Canon Latin America
Acer Latin America
Mercedes Benz Latina
Sanofi Beaute Miami
Olympus America
A-3
Les Must de Cartier International
Eastman Chemical Latin America
Polaroid Corporation
Epson Latin America
Credit Lyonnais
Telia Swedtel
AIB Financial Group
Nera Latin America
02- 797
Distribution of Major Employment Classifications
for City of Miami, Florida
Occupational Title
Emplovees
Executive/Managerial
13,215
Professional
13,065
Technician
3,573
Sales
17,378
Administrative Support including Clerical
22,618
Private Household
2,784
Protective Services
3,060
Other Service Occupations
25,037
Farming, Forestry & Fishing
2,830
Precision Production, Craft and Repair
2000
Occupations
18,471
Machine Operators; Assemblers and
Inspectors
13,448
Transportation & Material Moving
Occupations
6,891
Handlers, Equipment Cleaners, Helpers
and Laborers
9,076
Total Employed
151.446
Source: Miami -Dade County, Florida
Source: University of Florida, Florida Statistical Abstract 2001
A-4
Percentage
of Total
8.7
8.6
2.4
11.5
14.9
1.8
2.0
16.5
2.0
12.1
8.9
4.6
6.0
100.0
Florida
Unemployment Rate
4.8
4.3
3.9
3.6
U2- 797
t..
Labor Force and Employment Statistics
City of Miami, Florida
Civilian Unemployment
Period
Employment
Labor Force Rate
1997
163,174
181,785 10.4%
1998
162,951
179.732 7.3
1999 /'
165,324
180,502 8.4
2000
167,648
181,589 7.7
Source: University of Florida, Florida Statistical Abstract 2001
A-4
Percentage
of Total
8.7
8.6
2.4
11.5
14.9
1.8
2.0
16.5
2.0
12.1
8.9
4.6
6.0
100.0
Florida
Unemployment Rate
4.8
4.3
3.9
3.6
U2- 797
t..
Major Employers
Public Employers:
Name
Number of Employees
Miami -Dade County Public Schools
35,469
Miami -Dade County
30,000
U.S. Federal Government
18,276
State of Florida
18,100
Public Health Trust/Jackson Memorial Hospital
8,191
City of Miami
3,400
Florida International University
2,591
Miami -Dade Community College
2,345
Miami Veteran Affairs Medical Center
2,000
Private Employers:
2,500
Name
Number of Employees
American Airlines
9,000
Precision Response Corporation
8,000
University of Miami
7,800
Baptist Health Systems of South Florida
7,500
Bell South Telecommunications
4,240
Publix Super Markets
4,000
Florida Power & Light Company
3,823
Mount Sinai Medical Center of Greater Miami
2,868
Winn Dixie Stores
2,672
Royal Caribbean International/Celebrity Cruises
2,500
First Union National Bank of Florida
2,500
United Airlines
2,488
MasTec
2,400
United Parcel Service
2,400
Miami Herald Publishing
2,108
Source: The Bcacop Council -2000/2001 Miami Business Profile
A-5
0- 797
Miami, Florida
Bank Deposits, 1996 - 2000
Miami -Dade County is second only to New York in the greatest concentration of international and Edge Act
Banks in North America with 61 foreign bank agencies operating in the community. There are 12 Edge Act Banks that
are located in Miami -Dade County. These include: Banco Cafetero International, Banco de Bogota International, Banco
de Venezuela International, Banco Latino International, Banco Santander International, Bank of Boston International,
Citibank International, Coutts & Company (U.S.A.) International, I.B.J. Schroder International, Republic International
Bank of New York, American Express Bank International and Riggs International Corp. The Federal Reserve Edge Act
Amendment adopted in 1979, permits banks to open intemational banking subsidiaries outside their home state. The
Federal Reserve System has established a branch office in Miami -Dade county to assist the Atlanta office with financial
transactions in the South Florida area.
JUNE 30
NUMBER OF BANKS
TOTAL DEPOSIT
2000
72
$40,543,000,000
1999
69
39,633,149,000
1998
67
28,996,024,000
1997
69
28,229,233,000
1996
72
26,748,125,000
Source: ()) F.D.I.C. was not available. This data was provided by the Florida Bankers Association.
Fiscal Year
1997-98
1998-99
1999-00
(through 6/20/00)
Record of Building Permits, 1997 through 2000
City of Miami, Florida
Commercial
Building Permits
Source: City of Miami, Florida
Per Capita Personal Income
3.199
2,918
2,370
Estimated Cost
S322 million
$697 million
5302 million
Residential
Building Permits
4,285
4,552
3,631
Estimated Cost
544.2 million
550.5 million
533.0 million
Year
Miami"'
Florida
US
1997
23,020
25,721
25,894
1998
23,972
26,931
27,321
1999
24,733
27,781
28,546
Source: University of Florida, Florida Statistical Abstract 2001
"' Data is for Metropolitan Statistical Arca
A-6
02- '797
APPENDIX B
DESCRIPTION OF NON AD VALOREM REVENUES
The following describes the sources of the City's non -ad valorem revenues:
Franchise Fees
Franchise fees are levied annually on utility companies by the City in return for granting a privilege sanctioning
a monopoly or permitting the use of public property. Such fees are currently levied against Florida Power and Light Co.
and Southern Bell,
Public Service Tax
The Public Services Tax is imposed, levied and collected by the City pursuant to Section 166.231, Florida
Statutes, and other applicable provisions of -law, on the purchase of electricity, fuel oil, metered or bottled gas (natural
liquefied petroleum gas or manufactured), water service, and other services on which a tax may be imposed by law, and
until October 1, 2001 also included the purchase of telecommunication service.
Florida law authorizes any municipality in the State of Florida to levy a public service tax on the purchase within
such municipality of electricity, metered natural gas, liquefied petroleum gas either metered or bottled, manufactured gas
either metered or bottled, water service and fuel oil as well as any services competitive with those specifically
enumerated. This tax may not exceed 10% of the payments received by the sellers of such services from purchasers
(except in the case of fuel oil, for which the maximum tax is four cents per gallon). The purchase of natural gas or fuel oil
by a public or private utility either for resale or for use as fuel in the generation of electricity, or the purchase of fuel oil
or kerosene for use as an aircraft engine fuel or propellant or for use in internal combustion engines, is exempt from the
levy of such tax. Prior to October 1, 2001, a municipality also had the option to levy a tax on the purchase of
telecommunications services of either (a) not to exceed 10% of the monthly recurring customer service charges upon the
purchases within such municipality of local telephone service or (b) not to exceed 7% of the monthly recurring customer
service charges upon purchases within the municipality of telecommunications service which originates and terminates
in the State based on the total amount charged for anv telecommunications service provided within the municipality or,
if the location of the telecommunications provided cannot be determined, the total amount billed for such
telecommunications service to a telephone or telephone number, a telecommunications number or device, a service
address or a customer's billing address located within the municipality, excluding variable usage charges on
telecommunication service. See "Local Communications Services Tax" for a discussion of the taxation of
telecommunication services under the Local Communications Services Tax after October 1, 2001.
Pursuant to the Constitution of the State of Florida, Florida Statutes and a resolution of the City, the City levies
a Public Services Tax, within the incorporated area of the City at the rate of 10% on sales of all services for which it is
allowed to tax, except telecommunications service, and with the restriction that the tax on fuel oil cannot exceed 4 cents
per gallon.
Florida law provides that a municipality may exempt from the public service tax the first 500 kilowatts of
electricity per month purchased for residential use. The City has not adopted such an exemption but it does exempt
purchases by the United States Government, the State of Florida, Miami -Dade County, the City and its agencies, boards,
commissions and authorities from the levy of such tax. In addition, the City exempts purchases used exclusively for
church purposes by any State of Florida recognized church.
The Public Services Tax must be collected by the seller from purchasers at the time of sale and remitted to the
City. Such tax will appear on a periodic bill rendered to consumers for electricity, metered and bottled gas, water service
02 79'7
and fuel oil. A failure by a consumer to pay that portion of the bill attributable to the public service tax may result in a
suspension of the service involved in the same fashion as the failure to pay that portion of the bill attributable to the
particular utility service.
Local Communication Services Tax
The Communications Services Tax Simplification Act, enacted by Chapter 2000-260, Laws of Florida, as amended
by Chapter 2001-140, Laws of Florida, and now codified in part as Chapter 202, Florida Statutes (the " Communications
Services Tax Act") established, effective October 1, 2001, a communications services tax on the sale of cornmunications
services as defined in Section 202.11, Florida Statutes, and as of the same date repealed Section 166.231(9), Florida
Statutes, which previously granted municipalities the authority to levy a utility services tax on the purchase of
telecommunication services. Florida Statute Section 202.19 provides that counties and municipalities may levy a
discretionary communications services tax (the "local communications services tax") on communications services, the
revenues from which may be pledged for the repayment of current or future bonded indebtedness. The City set the rates
for its local communication services tax pursuant to a resolution adopted on June 14, 2001.
Prior to the effective date of the Communications Services Tax Act, the City exercised the option to levy a public
service tax at the rate of seven percent (7%) on the purchase of telecommunications services which originated or
terminated within the City.
One effect of the Communications Services Tax Act was to replace the former public services tax on
telecommunication services, as well as revenues from franchise fees on cable and telecommunication service providers,
with the local communications services tax. This change in law is intended to be revenue neutral to the counties and
municipalities. The local communications services tax is applied to a broader base of communications services than the
former public service tax on telecommunications.
Communication services are defined as the transmission, conveyance, or routing of voice, data, audio, video,
or any other information or signals, including cable services, to a point, or between or among points, by or through any
electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised,
regardless of the protocol used for such transmission or conveyance. The term does not include:
(a) Information services.
(b) Installation or maintenance of wiring or equipment on a customer's premises.
(c) The sale or rental of tangible personal property.
(d) The sale of advertising, including, but not limited to, directory advertising.
(e) z Bad check charges.
(f) Late payment charges.
(g) - Billing and collection services.
(h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line
services.
Effective October 1, 2001, any sale of communications services charged to a service address in the City is
subject to the City's local communications services tax at a rate of 5.62%. The Communications Services Tax Act further
provides that, to the extent that a provider of communications services is required to pay a tax, charge, or other fee under
any franchise agreement or ordinance with respect to the services or revenues that are also subject to the tax, such
provider is entitled to a credit against the amount of such tax payable to the State in the amount of such tax, charge, or
fee with respect to such service or revenues.
M►
02- 797
The proceeds of said local communication services tax less the Florida Department of Revenue's cost of
administration is deposited iir the local communication services tax clearing trust fund and distributed monthly to the
appropriate jurisdictions.
Intergovernmental
This category includes federal, state and other local units grants, and revenues shared by the state and other
local units. The largest component is the half -cent sales tax.
The Local Government Half -Cent Sales Tax is remitted to the City pursuant to Chapter 218, Part VI, Florida
Statutes, as amended (the "Half -Cent Sales Tax"). The Florida Revenue Act of 1949, Chapter 212, Part I, Florida Statutes,
as amended (the "Sales Tax Act"), authorizes the levy and collection by the State of Florida of a sales tax upon, among
other things, the sales price of each item or article of tangible personal property sold at retail in the State of Florida of
a sales tax upon, among other things, the sales price of each item or article of tangible personal property sold at retail
in the State of Florida, subject to certain exceptions and dealer allowances as set forth in the Sales Tax Act. The sales
tax in the State of Florida is currently six percent.
The sales tax is collected on behalf of the State of Florida by businesses at the time of sale at retail, use,
consumption, or storage for use or consumption, of taxable property and remitted to the State on a monthly basis. The
Sales Tax Act provides for penalties and fines, including criminal prosecution, for non-compliance with the provisions
thereof.
All funds received and collected by the State of Florida are required to be deposited in the General Revenue
Fund of the State and then distributed to various funds as enumerated in the Sales Tax Act. After various enumerated
distributions, a portion of the amount remitted by a sales tax dealer within a participating county (the "Local Government
Half -Cent Sales Tax") is required to be transferred into the Local Government Half -Cent Sales Tax Clearing Trust Fund
(the "Trust Fund") and earmarked for distribution to the governing body of that participating county and of each
participating municipality within that county pursuant to formulas set forth in Chapter 218, Part VI, Florida Statues, as
amended, (the "Half -Cent Sales Tax Act"). The Local Government Half -Cent Sales Tax is 9.653% of the amount remitted
by a sales tax dealer within a participating county.
The Local Government Half -Cent Sales Tax collected within a county and distributed to local government units
is distributed among the county and the municipalities therein in accordance with the following formula:
County Share
(percentage of total Half -Cent
Sales Ta<receipts)
Municipality Share
(percentage of total Half -Cent =
Sales Tax receipts)
unincorporated +
area population
total county
population
2/3 incorporated
area population.
municipality population
2/3 incorporated
area population
total county + 2/3 incorporated
population area population
For purposes of the foregoing formula, "population" is based upon the latest official State estimate of population
certified prior to the beginning of the local government fiscal year. Should any unincorporated area of Miami -Dade
County become incorporated as a municipality, the share of the Local Government Half -Cent Sales Tax received by
S-3
02- 797
Miami -Dade County and the City would be reduced. tl
The Local Government Half -Cent Sales Tax is distributed from the Trust Fund on a monthly basis to participating
units of local government. The Half -Cent Sales Tax Act permits the City to pledge its share of the Local Government
Half -Cent Sales Tax for the payment of principal of and interest on any capital project.
To be eligible to participate in the Local Government Half -Cent Sales Tax, the counties and municipalities must
comply with certain requirements set forth in the Half -Cent Sales Tax Act. These requirements include those concerning
the reporting and auditing of its finances, the levying of ad valorem taxes or receipt of other revenue sources, and
certifying certain requirements pertaining to the employment and compensation of law enforcement officers, the
employment of fire fighters, the auditing of certain dependent special districts, and the method of fixing millage rates for
the levying of ad valorem taxes.
Although the Half -Cent Sales Tax Act, does not impose any limitation upon the number of years during which the
City can receive distribution of the Local Government Half -Cent Sales Tax from the Trust Fund, there may be future
amendments to the Half -Cent Sales Tax. To be eligible to participate in the Trust Fund in future years, the City must
comply with certain eligibility and reporting requirements of Chapter 218, Part VI, Florida Statutes, otherwise, the City
will not be entitled to any Trust Fund distributions for twelve (12) months following a "determination of noncompliance"
by the State Department or Revenue.
Licenses and Permits
These are revenues derived from the issuance of local licenses and permits, including professional and occupational
licenses required for the privilege of engaging in certain trades, occupations and other activities.
Charges for Services
Charges for various services provided by the City to residents, property owners, and grants received from other
governments, including the following:
General Government: all money resulting from charges for current services. i.e., photographs, reports and
ordinances.
Public Safety: fees for police services, fire protection services and emergency services.
Physical Environment: charges include cemetery fees.
Building and Zoning Inspections: fees for inspections such as plumbing, electrical, elevator and
mechanical inspections.
Marina Fees: all fees associated with operations of the various City marinas.
Recreational and Special Events: fees for parks and recreation activities and events.
Other: fees for services not specifically mentioned above, i.e., engineering services, public hearing fees.
Im
()�,- 797
Other Revenue and Financing Sources
This category includes a variety of revenues and transfers from other funds, including:
Interest earnings on invested funds.
Fines and forfeitures imposed by local courts.
The following table represents the City's determination of legally available non -ad valorem revenues for the Fiscal
Years Ending September 30, 1997 -September 30, 2001.
THE CITY OF MIAMI, FLORIDA
LEGALLY AVAILABLE NON -AD VALOREM REVENUES
YEAR ENDED SEPTEMBER 30
A v a i l a b l e 42,369,469 38,788,452 1999 1998
Revenues: N o n- A d
Franchise and Utility Taxes V a l o r e m S 14,383,175 S 14,419,801
Revenues
Licenses and Permits:
S226.040,821 5211,641.947
Business Licenses and
20012000
6,889,146
8,034,355
Permits
9,161,736
8.607.177
Construction Permits
519,081.242
$10.960,340
16,050,882
16,641.532
Intergovernmental:
3,344,072
3,402,351
State and Revenue Sharing
5,987,513
5,969,672
20,001,945
19,175,911
Half Cent Sales Tax
14,346.019
13.863.723
3,703,068
2,814,571
Fine and Forfeitures
20.333.532
19,833.395
10.686.172
11263,311
Other
37,735,257
36.656.144
8,008,077
8,831,436
21,901,606
21,261,030
Charges for Services:
4,818,554
4,249,201
8,262,086
2.231,364
Engineering Services
3.778,563
14.361,834
7,554,339
9,611,766
Public Safety
38,506,800
48 703.501
238,320
683,520
Recreation
38.187,184
29,339,655
Othcr /
54,241.929
41,866305
_
14,061,255
8,509,359
-
7,309,338
10,791,502
6,916,561
6,132,593
Interest Income
209,945
236,087
62.753.739
55,933.390
2,963,999
5 344,935
Other
84.334277
75.470.338
35,613,080
35,144,292
Operating Transfers In
15.909309
1 1.134.284
2,281,520
-
Component Units Transfers
-
49,457.418
In
5.506.192
6,751.637
37,894,600
84,601.710
Proceeds from State of Florida
39,959,469
35,234,015
2,410,000
2,518,285
Total Sources of Legally
-
103615
5170.186.403
205.663.020
B-5
02-- 797
L
$14,075,000
9,736,000
80.000
9.816.000
6,716,000
18,399,000
2,761,000
17,699.000
45.575.000
7,573,000
13,568,000
6,384,000
21.634.000
49,159,000
2,939.000
6.503.000
37,134,000
13,377,000
9.094.000
59.605,000
5187,672.000
i
B -60,2-.
-6j
U kZ _. 1797
M.
The following table represents current debt service on obligations payable from legally available non -ad valorem revenues as of September 30, 2001.
CITY
OF MIAMI,
FLORIDA
SCHEDULE
OF PRINCIPAL. & INTEREST
FOR
NON -AD VALOREM REVENUE BONDS AND LOANS
$6,500,000
$18,000,000
$22,000,000
S72,000,000
$65,271,325
$4,290,000
Special Ob.
Special Ob.
$15,190,000
$30,000,000
53,500,000
Special Ob.
Special Ob.
$11,500,000
Discal Year
Special Rev.
Special
$27,630,000
GuanRvecd
Non -Ad Val.
SSGFC Com.
SSGFC Com.
SSGFC
Non
NonAdVal.
Comm. Redev.
Ending
Ref. Bonds
Ob. Bonds
SSGFC
Ent. Bongs,
Rev. Bonds
Paper Program
Paper Program
Secondary
Ad Valorem
Tax.
Grand Central
Bonds, Series
Total
9/30
Series 1987
Series 1986A
Loans 1988
Series 1994
1994 .
1995
Loan 1995
Rev. Bonds
Rev.PensionBn
Loan
1990
Principal &
2002
$5,894,400
$412,794
$3,725,155
Series 1989
$1,523,129
$617,000
$4,769,750
$587,250
Series 1995
d Series 1995
S--
$357,675
Interest
2003
5,896,260
411,406
3,621,645
$609,800
1,525,879
594,250
4,687,000
570,250
51,631,480
$5,810,509
357,900
$25,938,942
2004
5,900,000
408,544
3,516,935
609,950
1,525,648
570,750
4,599,000
556,750
1,635,730
5,808,478
357,275
25,718,748
2005
5,900,000
409,206
3,401,675
608,350
1,527,335
546,500
4,510,750
536,000
1,633,855
5,810,646
355,800
25,487.7"
2006
5,900,000
408,025
3,280,715
610,000
1,525,355
521,500
4,416,500
518,750
1,635,855
5,811,471
353,475
25,244.
2007
5,900,000
3,150,155
609,550
1,525030
500,750
4,316,250
499,250
1,636,730
5,810,590
355,300
24.981,190
2008
5,895,000
3,014,545
612,000
1,525,990
473,500
4,215,000
472,500
1,,635,835
5,807,640
1,708,864
355,850
24,302,210
2009
5,896,205
2,867,685
607,000
1,522,850
445,500
4,107,000
454,250
1,637,600
5,808,105
358,125
25,714,014
2010
5,894,295
2,714,125
609,900
1,525,500
421,750
3,997,250
428,000
1,637,073
5,811,794
354,425
23,707,382
2011
5,896,668
2,550,665
1,527,100
391,500
3,880,000
399,500
1,639,320
5,812,210
354,450
22,790,575
2012
5,615,180
2,376,705
1,524,500
365,500
3,755,250
373,750
1.639,140
5,810,435
357,775
22,449,433
2013
5,620,336
1,522,700
333,000
3,628,000
1,645,650
5,810,785
358,975
21,821,770
2014
5,547,336
1,526,400
304,750
3,497,500
1,643,800
5,810,985
358,050
18,916,596
2015
5,165,000
3,353,000
1,644,400
5,810,335
18,689,696
2016
3,210,000
1,647,450
5,808,135
16,331,635
2017
3,182,750
1,647,650
5.808,510
10,666,410
2018
3,136,000
1,649,850
5,812,300
10,644,900
2019
3,070,750
1,653,900
5,808,240
10,598,890
2020
2,978,250
1,654,500
5,807,980
10,533,230
2021
2,863,500
/ 1,656,500
5,810,080
10,444,830
2022
1,659,750
5,808,280
10,331,5
2023
-
1,658,950
5,811,140
7,470,01,-
2024
1,663,950
5.812,040
7,475,990
2025
1,664,450.
5,809,540
7,473,990
2026
1,665,150
5,811,840
7,476,990
5,811.960
5.811.960
Total
JL2L9 975
$34,220.005
$19.827,41 G6
086 250
$76.174,500
$5.396 .250
1708 864
4 9 00
�
4 876 550
$ 39,518,568
5145.254.088
4 102 4G
t
M.
EXHIBIT "D"
CONTINUING DISCLOSURE AGREEMENT
0 797
DISCLOSURE DISSEMINATION AGENT AGREEMENT
This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated as of
2002, is executed and delivered by The City of Miami, Florida (the "Issuer") and Digital
Assurance Certification, L.L.C., as exclusive Disclosure Dissemination Agent (the "Disclosure Dissemination Agent"
or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide
certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities
and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time
(the "Rule").
SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have
the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter
defined). The capitalized terms shall have the following meanings:
"Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure
Agreement.
"Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed
with the Repositories.
"Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(i)
of the Rule and specified in Section 3(a) of this Disclosure Agreement.
"Audited Financial Statements" means the financial statements (if any) of the Issuer for the prior fiscal year,
certified by an independent auditor as prepared in accordance with generally accepted accounting principles or
otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure
Agreement.
"Bonds" means the bonds as listed on the attached Exhibit A, with the 9 -digit CUSIP numbers relating thereto.
"Certification" means a written certification of compliance signed by the Disclosure Representative stating that
the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered to the Disclosure
Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice
required to be submitted to the Repositories under this Disclosure Agreement. A Certification shall accompany each
such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds
and the 9 -digit CUSIP numbers for all Bonds to which the document applies.
"Disclosure Representative" means Finance Director or his designee, the senior member of the Issuer or his or
her designee�`8r such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from
time to time as the person responsible for providing Information to the Disclosure Dissemination Agent.
"Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as
Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by
the Issuer pursuant to Section 9 hereof.
"Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or
to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other
intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes.
"Information" means the Annual Financial Information, the Audited Financial Statements (if any) the Notice
Event notices, and the Voluntary Reports.
"Notice Event" means an event listed in Sections 4(a) of this Disclosure Agreement.
"MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the
02-- 797
Securities Exchange Act of 1934.
"National Repository" means any Nationally Recognized Municipal Securities Information Repository for
purposes of the Rule. The list of National Repositories maintained by the United States Securities and Exchange
Commission shall be conclusive for purposes of determining National Repositories. Currently, the following are National
Repositories:
DPC Data Inc.
One Executive Drive
Fort Lee, New Jersey 07024
(201) 346-0701 (phone)
(201) 947-0107 (fax)
Email: nrmsir@dpcdata.com
FT Interactive
Attn: NMSIRS
100 Williams Street
New York, New York 10038
(212) 771-6999 (phone)
(212) 771-7390 (fax for secondary market information)
(212) 771-7391 (fax for primary market information)
Email: NRMSIR@FTID.com
Bloomberg Municipal Repositories
100 Business Park Drive
Skillman, New Jersey 08558
(609) 279-3225 (phone)
(609) 279-5962 (fax)
Email: Munis@Bloomberg.com
Standard & Poor's J.J. Kenny Repository
55 Water Street
45" Floor
New York, New York 10041
(212) 438-4595 (phone)
(212) 438-3975 (fax)
Email: nrmsir_repository@sandp.com
"Official Statement" means that Official Statement prepared by the Issuer in connection with the Bonds, as listed
on Appendix A:
"Repository" means the MSRB, each National Repository and the State Depository (if any).
"State Depository" means any public or private depository or entity designated by the State of Florida as a state
information depository (if any) for the purpose of the Rule. The list of state information depositories maintained by the
United States Securities and Exchange Commission shall be conclusive as to the existence of a State Depository.
Currently, the following depositories are listed by the Securities and Exchange Commission as available State
gepositories:
Municipal Advisory Council of Michigan
1445 First National Building
Detroit, Michigan 48226-3517
(313)963-0420(phone)
(313) 963-0943 (fax)
02- 797
Municipal Advisory Council of Texas
600 W. Eighth Street
PO Box 2177
Austin, TX 78701
(512) 476-6947 (phone)
(512) 476-6403 (fax)
3. Ohio Municipal Advisory Council
9321 Ravenna Road, Unit K
Twinsburg, OH 44087-2445
(330) 963-7444 (phone)
(800) 969-OMAC (6622) (phone)
(330) 963-7553 (fax)
"Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer
pursuant to Section 7.
SECTION 2. Provision of Annual Reports.
(a) The Issuer shall provide, annually, an electronic copy of the Annual Report and Certification to the
Disclosure Dissemination Agent, together with a copy for the Paying Agent, not later than 30 days prior to the Annual
Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure
Dissemination Agent shall provide an Annual Report to each National Repository and the State Depository (if any) not
later than not later than June 30" of each year, commencing with the fiscal year ending Septemer 30, 2002. Such date and
each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a single document or as
separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this
Disclosure Agreement.
(b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has
not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the
Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking
to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either
(i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification) no
later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in
writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Agreement,
state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination
Agent that a�otice Event as described in Section 4(a)(12) has occurred and to immediately send a notice to e0ch
National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B.
(c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 12:00
noon on the first business day following the Annual Filing Date for the Annual Report, a Notice Event described in
Section 4(a)(12) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to
immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially
the form attached as Exhibit B.
(d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing
Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy
to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with each National Repository and the
State Depository (if any).
(c) The Disclosure Dissemination Agent shall:
(i) determine the name and address of each Repository each year prior to the Annual Filing
Date:
upon receipt, promptly file each Annual Report received under Section 2(a) with each
National Repository, and the State Depository, (if any);
(iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d)
with each National Repository, and the State Depository (if any);
(iv) upon receipt, promptly file the text of each disclosure to be made with each National
Repository or the MSRB and the State Depository (if any) together with a completed copy
of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing
the event by checking the box indicated below when filing pursuant to the Section of this
Disclosure Agreement indicated:
"Principal and interest payment delinquencies," pursuant to Sections 4(c) and
4(a)(1);
2. "Non -Payment related defaults," pursuant to Sections 4(c) and 4(a)(2)
3. "Unscheduled draws on debt service reserves reflecting financial difficulties,"
pursuant to Sections 4(c) and 4(a)(3);
4. "Unscheduled draws on credit enhancements reflecting financial difficulties,"
pursuant to Sections 4(c) and 4(a)(4).
5. "Substitution of credit or liquidity providers, or their failure to perform," pursuant
to Sections 4(c) and 4(a)(5);
6. "Adverse tax opinions or events affecting the tax-exempt status of the security,"
pursuant to Sections 4(c) and 4(a)(6);
7. "Modifications to rights of securities holders," pursuant to Sections 4(c) and
4(a)(7):
8. "Bond calls," pursuant to Sections 4(c) and 4(a)(8):
9. "Defeasances," pursuant to Sections 4(c) and 4(a)(9).
10. "Release, substitution, or sale of property securing repayment of the securities,"
i
pursuant to Sections 4(c) and 4(a)(10);
H. . "Ratings changes," pursuant to Sections 4(c) and 4(a)(11);
12. "Failure to provide annual financial information as required," pursuant to Section
2(b)(ii) or Section 2(c), together with a completed copy of Exhibit B to this
Disclosure Agreement;
13. "Other material event notice (specify)," pursuant to Section 7 of this Agreement,
together with the summary description provided by the Disclosure Representative.
(v) provide the Issuer evidence of the filings of each of the above when made, which shall be
by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent
under this Disclosure Agreement.
(f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written
notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent and the Repositories,
provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year.
02-. 797
SECTION 3. Content of Annual Reports.
(a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer, including the
information provided in the Official Statement under the headings:
a)
b)
C)
d)
e)
f)
g)
h)
(b) Audited Financial Statements prepared in accordance with generally accepted accounting principles
("GAAP") will be included in the Annual Report; provided, however, if the audited financial statements of the Issuer
are not completed prior to June 30`h of any year, the Issuer shall provide unaudited financial statements on such date and
shall provide the audited financial statements as soon as practicable following their completion. Audited Financial
Statements (if any) will be provided pursuant to Section 2(d).
Any or all of the items listed above may be included by specific reference from other documents, including
official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule),
which have been previously filed with each of the National Repositories or the Securities and Exchange Commission.
If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer
will clearly identify each such document so incorporated by reference.
SECTION 4. Reporting of Notice Events.
(a) The occurrence of any of the following events, if material, with respect to the Bonds constitutes a
Notice Event:
1. Principal and interest payment delinquencies:
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties;
5. - Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of Bond holders;
8. Bond calls;
9. Defeasances:
10. Release, substitution, or sale of property securing repayment of the Bonds;
H. Rating changes on the Bonds;
12. Failure to provide annual financial information as required;
The Issuer shall promptly notify the Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event.
02-r 797
Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c). Such
notice shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of
the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for
the Disclosure Dissemination Agent to disseminate the information.
(b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure
Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so
notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such
notice, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made
or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to
subsection (c), together with the text of the disclosure that the Issuer desires to make, the written authorization of the
Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the
Disclosure Dissemination Agent to disseminate the information.
(c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection
(a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall
promptly file a notice of such occurrence with the State Depository (if any) and (i) each National Repository, or (ii) the
MSRB.
SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent,
including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited
Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Section 7(a), the Issuer shall
indicate the full name of the Bonds and the 9 -digit CUSIP numbers for the Bonds as to which the provided information
relates.
SECTION 6. Additional Disclosure Oblieations. The Issuer acknowledges and understands that other
state and federal laws, including but not limited to the Securities Act of 1933 and Rule lOb-5 promulgated under the
Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of the Disclosure Dissemination Agent to.
so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and
responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the
Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as
described in this Disclosure Agreement.
SECTION 7. Voluntary Reports.
(a) The Issuer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from
time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary
Report"). j
(b) Noihing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other
information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure
Agreement or including any other information in any Annual Report, Annual Financial Statement, Voluntary Report or
Notice Event notice, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any
information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to
that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this
Disclosure Agreement to update such information or include it in any future Annual Report, Annual Financial Statement,
Voluntary Report or Notice Event notice.
SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and the Disclosure
Dissemination Agent under this Disclosure Agreement shall terminate with respect to an issue of the Bonds upon the
legal defeasance, prior redemption or payment in full of all of the Bonds of such issue, when the Issuer is no longer an
obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure
Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no
longer required.
U2-.. 797
SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification,
L.L.C. as exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days
written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure
Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of
the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to
assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the
Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable
until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure
Dissemination Agent may resign at any time by providing thirty days' prior written notice to the Issuer.
SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure
Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the
provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to
compel performance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in
accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document
relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein.
SECTION 11. Duties. Immunities and Liabilities of Disclosure Dissemination Agent.
(a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this
Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with
the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure
Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty
with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure
Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information,
disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the
Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility
for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the
materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to
determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may
conclusively rely upon certifications of the Issuer at all times.
THE ISSUER AGREES TO INDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS. HARMLESS AGAINST ANY LOSS, EXPENSE
AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE EXERCISE OR PERFORMANCE OF
THEIR POWERS AND DUTIES HEREUNDER. INCLUDING THE COSTS AND EXPENSES (INCLUDING ATTORNEYS
FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT EXCLUDING LIABILITIES DUE TO THE
DISCLOSU13� DISSEMINATION AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
The obligations -of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination
Agent and defeasance, redemption or payment of the Bonds.
(b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house
or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the
construction of any of the provisions hereof or its respective duties hereunder, and neither of them shall incur any
liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and expenses
of such counsel shall be payable by the Issuer.
SECTION 12. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement,
the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this
Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in
federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such
amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself,
cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but
02- 797
taking into account any subsequent change in or official interpretation of the Rule; provided neither the Issuer or the
Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or
obligations without their consent thereto.
Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt
amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the
provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less
than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such
amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice
to the Disclosure Dissemination Agent in writing that it objects to such amendment.
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the
Trustee of the Bonds, the Disclosure Dissemination Agent, the underwriter, and the Holders from time to time of the
Bonds, and shall create no rights in any other person or entity.
SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of
New York (other than with respect to conflicts of laws).
SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be
executed, on the date first written above, by their respective officers duly authorized.
DIGITAL ASSURANCE CERTIFICATION, L.L.C., as
Disclosure Dissemination Agent
By:_
Name:
Title:
THE CITY OF MIAMI, FLORIDA,
as Issuer
By:_
Name:
Title:
02-- 797
EXHIBIT C
MATERIAL EVENT NOTICE COVER SHEET
This cover sheet and material event notice should be sent to the Municipal Securities Rulemaking Board or to
all Nationally Recognized Municipal Securities Information Repositories, and the State Information Depository, if
applicable, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D).
Issuer's and/or Other Obligated Person's Name:
Issuer's Six -Digit CUSIP Number:
or Nine -Digit CUSIP Number(s) of the bonds to which this material event notice relates:
Number of pages of attached material event notice:
Description of Material Events Notice (Check One):
1. _Principal and interest payment delinquencies
2. _Non -Payment related defaults
3. _Unscheduled draws on debt service reserves reflecting financial difficulties
4. _Unscheduled draws on credit enhancements reflecting financial difficulties
5. _Substitution of credit or Iiquidity providers, or their failure to perform
6. _Adverse tax opinions or events affecting the tax-exempt status of the security
7. _Modifications to rights of securities holders
8. _Bond calls
9. _Defeasances
10. _Release, substitution, or sale of property securing repayment of the securities
11. _Rating changes
12. _Failure to provide annual financial information as required
13. _Other material event notice (specify)
I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly:
Signature:
Name: .............
.........................
Title: .......................................
Employer: Digital Assurance Certification, L.L.C.
Address: -
City, State, Zip Code:
Voice Telephone Number:
Please print the material event notice attached to this cover sheet in 10 -point type or larger, The cover sheet and notice
may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 1900 Duke
Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797-6600 with questions regarding this form
or the dissemination of this notice.
02- 797
CITY OF MIAMI, FLORIDA 25
INTER -OFFICE MEMORANDUM
TO: The Honorable Mayor & Members DATE: JUL — 2 2,02 FILE:
of the City Commission
SUBJECT: Resolution to Provide
First Issuance -
Homeland Defense/
Neighborhood
FROM: REFERENCES: Improvement Bonds
enez,
City Manag
ENCLOSURES:
ADMINISTRATIVE RECOMMENDATION
The Administration recommends that the City Commission adopt the resolution providing
for the issuance of not more that $160,000,000 in Limited Tax General Obligation Bonds
for the Homeland Defense/Neighborhood Improvement program.
BACKGROUND
This resolution establishes the parameters under which the City Manager may complete
this transaction as to the acquisition of municipal bond insurance, a secondary revenue
pledge, and maximum interest rate allowable. Attached to the resolution is a draft of the
Bond Purchase Agreement, the Registrar and Paying Agent Agreement, the Preliminary
Official Statement and the Continuing Disclosure Agreement. All of these documents
have been drafted by or reviewed by our bond counsel, Squire, Sanders and Dempsey,
and our disclosure counsel, Bryant Miller and Olive.
CAG/RJN:bd
enclosure
02- 797