HomeMy WebLinkAboutR-02-1181J-02-971
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RESOLUTION NO.
A RESOLUTION OF THE MIAMI CITY COMMISSION,
WITH ATTACHMENT(S), AMENDING RESOLUTION
NO. 02-1057 BY AMENDING THE DEFINITION OF
REFUNDED BONDS AND UNDERWRITERS AND MAKING
CERTAIN ADDITIONAL AMENDMENTS CONSISTENT
WITH SUCH CHANGES.
WHEREAS, the Miami City Commission (the "Issuer" or the
"City") adopted Resolution No. 02-1057 on September 26, 2002,
(the "Resolution"); and
WHEREAS, all capitalized undefined terms used shall have
the meanings ascribed in the Resolution; and
WHEREAS, the Issuer now desires to amend the Resolution to
provide for the issuance of the Bonds; and
WHEREAS, this amendatory Resolution is being adopted prior
to the issuance of the Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE
CITY OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are adopted by reference and
incorporated as if fully set forth in this Section.
Section 2. The following definitions in Section 2.01 of
the Resolution are amended to read as follows:
(a) "Refunded Bonds" means the obligation due the
Underwriters in regard to the payment made by
the Underwriters on October 17, 2002 in regard
to the loan payments due under those certain
loan agreements dated as of May 12, 1994 and as
of October 25, 1995 between the City and the
Sunshine State Governmental Financing
Commission (the "Outstanding Loan Agreements").
(b) "Underwriters" means any or all of Salomon
Smith Barney, Inc., Lehman Brothers, UBS
PaineWebber, Inc., Jackson Securities Inc.,
Morgan Stanley & Co., Incorporated and JP
Morgan Securities, Inc.
Section 3. Section 5.11(3) of the Resolution is amended
to read as follows:
"The amount agreed to between the Issuer and the
Underwriters sufficient to discharge the Refunded
Bonds shall be paid to the Underwriters."
Section 4. Section 5.12 of the Resolution is amended to
provide that the reference to the Bond Purchase Agreement in
said Section shall mean the Bond Purchase Agreement, attached
and incorporated.
Section S. Section 5.17 of the Resolution is amended to
provide that the reference to the Preliminary Official Statement
in said Section shall mean the Preliminary Official Statement,
attached and incorporated.
Section 6. Except as amended the Resolution shall
remain in full force and effect.
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Section 7. This Resolution shall become effective
immediately upon its adoption and signature of the Mayorll.
PASSED AND ADOPTED this 29th day of October 2002.
ATTEST:
PRISCILLA A. THOMPSON
CITY CLERK
TNESS:
A. DIAZ, MAYO
�i 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.
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DRAFT II
BOND PURCHASE AGREEMENT
October 30, 2002
Mayor and
Members of the City Commission
of The City of Miami, Florida
Miami, Florida
Re: City of Miami, Florida
Special Obligation Non -Ad Valorem Revenue Refunding Bonds
Series 2002C
Ladies and Gentlemen:
The undersigned, Salomon Smith Barney Inc. (the "Representative"), on behalf of
itself and Lehman Brothers, UBS PaineWebber Inc., Jackson Securities LLC, Morgan
Stanley & Co., Incorporated and JP Morgan Securities, Inc. (collectively, the
"Underwriters") does hereby offer to enter into this Bond Purchase Agreement (this
"Purchase Agreement") with The City of Miami, Florida (the "City"), which, upon the
City's acceptance hereof, will be binding upon The City of Miami, Florida and upon the
Underwriters. This offer is made subject to the City's acceptance by execution of this
Purchase Agreement and its delivery to' the Representative on or before 11:59 P.M., New
York time, on Friday, October 30, 2002. The parties hereto agree and acknowledge that
the obligations of the City hereunder do not constitute a general obligation of the City.
Terms not otherwise defined herein shall have the same meanings ascribed to them in the
Resolution and the Official Statement as each is described below.
1. Purchase and Sale. Upon the terms and conditions and upon the basis of
the representations, warranties and covenants herein, the Underwriters hereby agree to
purchase from the City for offering to the public, and the City hereby agrees to sell to the
Underwriters for such purpose, all (but not less than all) of the aggregate principal
amount of the $28,025,000 City of Miami, Florida Special Obligation Non -Ad Valorem
Revenue Refunding Bonds, Series 2002C (the "Bonds"). The Bonds are dated October
31, 2002, and mature at the times and in the amounts and bear interest at the rates set
forth in Exhibit "A" attached hereto, such interest being payable on April 1, 2003, and
semiannually thereafter on each April 1 and October 1. The Underwriters are obligated
to purchase all of the Bonds if any of the Bonds are purchased pursuant to this Purchase
Agreement.
The aggregate purchase price of the Bonds shall be $27,764,347.44 (the
"Purchase Price"), calculated as follows: (i) $28,025,000.00 fVe amount of the Bonds,
(ii) less net original issue discount of $92,873.25, and (iii) less an Underwriter's discount
of $167,779.31.
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On behalf of the City, the Underwriters shall wire transfer $126,755.42 to the Insurer for
payment of the premium due on the Reserve Policy.
The Bonds shall be issued pursuant to the provisions of the Constitution and the
laws of the State of Florida, including Chapter 166, Florida Statutes, Article VIII, Section
2 of the Constitution of the State of Florida; the City Charter of the City, and other
applicable provisions of law, and a resolution of the City adopted on September 26, 2002,
as amended on October 29, 2002 (the "Resolution"). The principal of and interest on the
Bonds will be payable solely from, and secured by a pledge of and lien on, (i) the legally
available non -ad valorem revenues budgeted and appropriated to pay the principal of,
redemption premium, if any, and interest on the Bonds pursuant to the Resolution, and
(ii) until applied in accordance with the Resolution, income received from the investment
of moneys deposited in the funds and accounts established under the Resolution
(excluding the Rebate Fund), all in the manner and extent provided in the Resolution
(collectively, the "Pledged Revenues"). The principal purpose of the Bonds shall be to
the obligation due the Underwriters for a payment made by the Underwriters which was
used to pay and defease the obligations of the City due under certain Loan Agreements
dated as of May 12, 1994, and October 25, 1995, each between the City and the Sunshine
State Governmental Financing Commission (the "Outstanding Loan Agreements").
The Bonds are more fully described in the Preliminary Official Statement of the
City, dated October 29, 2002, relating to the Bonds (the "Preliminary Official
Statement"). The Preliminary Official Statement, with such changes, modifications,
insertions, and deletions thereto as shall be approved by the City is referred to herein as
the "Official Statement." If the City makes any such changes to the Preliminary Official
Statement that are not also approved by the Underwriters, and if such changes result in
the Preliminary Official Statement omitting material information or containing
information that is materially misleading, then the Underwriters may, in their discretion,
terminate this Purchase Agreement.
The Bonds are subject to redemption as provided on Exhibit B attached hereto.
2. Delivery of Official Statement and Other Documents.
(a) On or prior to the date hereof, the City has provided to the
Underwriters for their review the Preliminary Official Statement that the City deemed
"final" (as defined in Rule 15c2-12 of the Securities and Exchange Commission ("Rule
15c2-12" or the "Rule")) as of its date, except for certain permitted omissions (the
"Permitted Omissions"), as contemplated by the Rule in connection with the pricing of
the Bonds. The Underwriters have reviewed the Preliminary Official Statement prior to
the execution of this Purchase Agreement. The City hereby confirms that the Preliminary
Official Statement was deemed "final" (as defined in the Rule) as of its date, except for
the Permitted Omissions.
(b) The City shall deliver, or cause to be delivered, at its expense, to
the Underwriters within one (1) business day after the date hereof, (i) sufficient copies of
the Official Statement to enable the Underwriters to fulfill their obligations pursuant to
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the securities laws of Florida and the United States, in form and substance satisfactory to
the Underwriters, and (ii) an executed original counterpart or certified copy of the
Official Statement and the Resolution. In determining whether the number of copies to
be delivered by the City are reasonably necessary, at a minimum, the number shall be
sufficient to enable the Underwriters to comply with the requirements of Rule 15c2-12,
all applicable rules of the Municipal Securities Rulemaking Board ("MSRB"), and to
fulfill their duties and responsibilities under Florida and federal securities laws generally.
(c) The Representative agrees to file the Official Statement with at
least one Nationally Recognized Municipal Securities Information Repository
("NRMSIR") which has been so designated by the Securities and Exchange Commission
pursuant to Rule 15c2-12 and with the MSRB (accompanied by a completed Form G-36)
not later than two (2) business days after the Closing (as hereinafter defined), and will
furnish a list of the names and addresses of each such NRMSIR receiving a copy to the
City. The filing of the Official Statement with each such NRMSIR shall be in
accordance with the terms and conditions applicable to such NRMSIR.
(d) The Underwriters agrees that they will not confirm the sale of any
Bonds unless the confirmation of sale requesting payment is accompanied or preceded by
the delivery of a copy of the Official Statement.
(e) From the date hereof until the earlier of (i) ninety days from the
"end of the underwriting period" (as defined in the Rule), or (ii) the time when the
Official Statement is available to any person from a NRMSIR (but in no case less than 25
days following the end of the underwriting period), if any event occurs which may make
it necessary to amend or supplement the Official Statement in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, the City shall notify the Representative and if, in the reasonable opinion of
the City or the reasonable opinion of the Underwriters, such event requires the
preparation and publication of an amendment or supplement to the Official Statement, the
City, at its expense, promptly will prepare an appropriate amendment or supplement
thereto (and file, or cause to be filed, the same with each NRMSIR having the Official
Statement on file, file with the MSRB if the MSRB is requiring or permitting the filing or
continuing disclosure information, and mail such amendment or supplement to each
record owner of Bonds) so that the statements in the Official Statement as so amended or
supplemented will not, in light of the circumstances under which they were made, be
misleading, in a form and in a manner reasonably approved by the Underwriters. The
amendments or supplements that may be authorized for use with respect to the Bonds are
hereinafter included within the term "Official Statement." The Representative shall
notify the City of the occurrence of the "end of the underwriting period," as such term is
defined in the Rule, on the date which is one day thereafter, and of the passage of the date
after which the Underwriters are no longer obligated to deliver Official Statements
pursuant to paragraph (b)(4) of the Rule.
(f) The City hereby authorizes the Underwriters to use the forms or
copies of the Resolution, the Preliminary Official Statement and the Official Statement
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and the information contained therein in connection with the public offering and sale of
the Bonds.
3. Representations of the Underwriters as to Authority. The Representative
is duly authorized to execute this Purchase Agreement on behalf of the Underwriters and
has been duly authorized to act hereunder in connection with the issuance of the Bonds.
4. Public Offerine. The Underwriters agree to make a bona fide offering to
the public (excluding bonds houses, brokers or similar persons or organizations acting in
the capacity of underwriters or wholesalers) of all of the Bonds at not in excess of the
initial public offering price or prices (or not below the yields) set forth on the inside
cover page of the Official Statement. If such public offering does not result in the sale of
the Bonds, the Underwriters may offer and sell the Bonds to certain bond houses, brokers
or similar persons or organizations acting in the capacity of underwriters or wholesalers
at prices lower than the public offering prices set forth on the inside cover page of the
Official Statement.
5. Disclosure Statement. Delivered to the City herewith by the Underwriters
is a disclosure statement of the Underwriters pursuant to Section 218.385, Florida
Statutes, is attached hereto as Exhibit "C."
6. Representations, Warranties and Agreements. The City represents and
warrants to, and agrees with, the Underwriters that:
(a) At the time of the City's acceptance hereof, the Preliminary
Official Statement does not, and the Official Statement, as of the date of its delivery, will
not, contain an untrue statement of material fact and the Preliminary Official Statement
does not, and the Official Statement will not, omit to state a material fact or a fact
necessary to make the statements made therein, in the light of the circumstances under
which they were made, not misleading, provided that no representation is made with
respect to the disclosure concerning The Depository Trust Company or the book -entry
system or the Insurer, the Municipal Bond Insurance Policy or the Debt Service Reserve
Fund Policy. If between the date of this Purchase Agreement and the earlier of (i) the
date set forth in the notice received by the City from the Representative pursuant to
Section 2(e) hereof that Official Statements are no longer required to be delivered under
the Rule, or (ii) ninety (90) days after the Closing, any event shall occur which, in the
opinion of the City or the Underwriters, might or would cause the Official Statement to
contain any untrue statement of a material fact or omit to state any material fact or fact
necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, the party making such determination shall
notify the other party hereto and if in the opinion of such other party hereto such event
requires the preparation and publication of a supplement or amendment to the Official
Statement, the City at its expense will supplement or amend the Official Statement;
provided, however, that if prior to the Closing either party hereto does not in good faith
approve the form and manner of such supplement or amendment, either party hereto may
terminate this Purchase Agreement; provided further, that if subsequent to Closing the
City determines that such event requires the publication of a supplement or amendment to
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the Official Statement, then the approval of the Underwriters shall not be required,
although the City agrees to seek the prior approval of the Underwriters to such
supplement or amendment, and the Underwriters shall use their reasonable best efforts to
distribute the supplement or amendment with the Official Statement to the purchasers of
the Bonds. The parties agree to cooperate in good faith with regard to the form and
manner of any supplement or amendment to the Official Statement.
(b) The City has duly adopted the Resolution in accordance with the
Act; and the City had at the time of execution, and will have at the time of the Closing,
full legal right, power and authority to enter into this Purchase Agreement, that certain
Debt Service Reserve Fund Policy Agreement expected to be dated as of October 31,
2002 (the "Policy Agreement"), by and between the City and Financial Guaranty
Insurance Company, (the "Insurer") and relating to the City's obligations to the Insurer
with respect to the keserve Policy to be issued by the Insurer, and that certain Disclosure
Dissemination Agent Agreement, expected to be dated as of October 31, 2002 (the
"Disclosure Agreement"), by and between the City and Digital Assurance Certification,
L.L.C. and to issue and deliver the Bonds to the Underwriters as provided herein and to
carry out the transactions contemplated by this Purchase Agreement, the Bonds, the
Resolution, the Policy Agreement and the Official Statement.
(c) Both at the time of acceptance hereof and at the Closing Date,
except as disclosed in the Official Statement, there shall not have been any material
adverse change since September 30, 2001, in the results of operations or financial
condition of the City other than changes in the ordinary course of business or any
material adverse change in the collection of the Pledged Revenues except as described in
the Preliminary Official Statement and the Official Statement.
(d) Concurrently with or prior to the acceptance hereof, the City has
(i) duly authorized and approved the execution and delivery of the Bonds, the Resolution,
the Policy Agreement and this Purchase Agreement, (ii) duly authorized and approved
the Preliminary Official Statement and the distribution thereof and has deemed the
Preliminary Official Statement as of its date to be "final" for purposes of the Rule, except
for the information not required to be included therein under the Rule and has authorized
and approved the final Official Statement, (iii) pursuant to the Resolution duly authorized
and approved the sale of the Bonds to the Underwriters, and (iv) duly authorized and
approved the consummation by the City of all other transactions contemplated by the
Official Statement and this Purchase Agreement.
(e) As of the time of acceptance hereof and as of the Closing Date,
except as otherwise disclosed in the Official Statement, the City is not and will not be in
breach of or in default under any applicable law or administrative regulation of the State
of Florida or the United States relating to the City or any applicable judgment or decree
or any trust agreement, loan agreement, indenture, bond, note, resolution, certificate,
agreement or other instrument to which the City is a party or to which the City or its
assets is otherwise subject, the consequence of which or the correction of which
materially and adversely affects the operations of the City as of such dates; and, as of
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such times and except as disclosed in the Official Statement, the execution and delivery
of this Purchase Agreement, the Policy Agreement and the Bonds and the adoption of the
Resolution and compliance with the provisions of each such document do not and will
not conflict with or constitute a breach of or default under any applicable law or
administrative regulation of the State of Florida or the United States or a breach of any
applicable judgment, decree, trust agreement, loan agreement, indenture, bond, note,
resolution, agreement or other instrument to which the City is a party or to which the City
or its assets is otherwise subject, the consequence of which or the correction of which
materially and adversely affects the operations of the City or the collection of the
Covenanted Revenues (as defined in the Resolution) as of such dates;
(f) On the Closing Date, all approvals, consents and orders of any
governmental authority, board, agency or commission having jurisdiction which would
constitute a condition precedent to the performance by the City of its obligations under
this Purchase Agreement, the Policy Agreement and the Resolution with respect to the
Bonds will have been duly obtained.
(g) At the time of acceptance hereof and as of the Closing Date, the
financial statements contained in Appendix C to the Preliminary Official Statement and
the Official Statement and the financial and operating data included in the Preliminary
Official Statement and the Official Statement do and will present fairly the financial
position and results of operations of the various funds and account groups of the City as
of the dates and for the periods therein set forth in accordance with generally accepted
accounting principles applicable to governmental bodies applied consistently except as
otherwise indicated in the Preliminary Official Statement and the Official Statement.
(h) Except as described in the Preliminary Official Statement, as it
may be amended or supplemented pursuant to Section 6(a) above, there is no action, suit,
proceeding, inquiry, or investigation at law or in equity or before or by any court, public
board or body pending or, to the knowledge of the City, threatened, against or affecting
the City or to which the City is a party wherein an unfavorable decision, ruling or finding
would (i) adversely affect the transactions contemplated hereby or by the Official
Statement or the validity of the Bonds, the Resolution, the Policy Agreement, this
Purchase Agreement or any other material agreement or instrument to which the City is a
party and which is used or contemplated for use in the consummation of the transactions
contemplated hereby or by the Official Statement and the Resolution, (ii) have a material
adverse affect on the financial condition of the City or the City's right to collect and
receive the Covenanted Revenues, or (iii) adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes and the exemption of the
Bonds from the Florida intangible personal property tax.
(i) Between the date of this Purchase Agreement and the time of
Closing, the City will not execute any bonds, notes or obligations for borrowed money,
other than the Bonds, without giving prior written notice thereof to the Underwriters.
0) The City Commission of the City (the "Commission") is, and will
be at the date of Closing, duly organized and validly existing as the governing body of
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the City, a municipal government duly created and validly existing under the Act, with
the powers and authority set forth in the Act, except as otherwise indicated in the
Preliminary Official Statement and the Official Statement.
(k) The City has full legal right, power and authority to: (i) enter into
this Purchase Agreement, the Disclosure Agreement and the Policy Agreement, (ii) adopt
the Resolution, (iii) sell, issue and deliver the Bonds to the Underwriters as provided
herein, and (iv) carry out and consummate the transactions contemplated by this Purchase
Agreement, the Policy Agreement, the Disclosure Agreement, the Resolution and the
Official Statement, and the City has complied, and at the Closing will be in compliance,
in all respects, with the terms of the Act and with the obligations on its part in connection
with the issuance of the Bonds contained in the Resolution, the Bonds, the Policy
Agreement, the Disclosure Agreement and this Purchase Agreement.
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(1) When delivered to and paid for by the Underwriters at the Closing
in accordance with the provisions of this Purchase Agreement, the Bonds will have been
duly authorized, executed, issued and delivered and will constitute valid and binding
obligations of the City in conformity with the Act and the Resolution, and shall be
entitled to the benefits of the Resolution, including a pledge of the City's Covenanted
Revenues in accordance with the provisions of the Resolution; subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
generally and subject to general principles of equity as to enforceability.
(m) The adoption of the Resolution and the authorization, execution
and delivery of this Purchase Agreement, the Policy Agreement, the Disclosure
Agreement and the Bonds, and compliance with the provisions hereof and thereof, will
not conflict with, or constitute a breach of or default under any law, administrative
regulation, consent decree, resolution or any agreement or other instrument to which the
City was or is subject, as the case may be, nor will such enactment, adoption, execution,
delivery, authorization or compliance result in the creation or imposition of any lien,
charge or other security interest or encumbrance of any nature whatsoever upon any of
the property or assets of the City, or under the terms of any law, administrative
regulation, resolution or instrument, except as expressly provided by the Resolution.
(n) At the time of Closing, the City will be in compliance in all
respects with the covenants and agreements contained in the Resolution and no event of
default and no event which, with the lapse of time or giving of notice, or both, would
constitute an event of default under the Resolution will have occurred or be continuing.
(o) The City will furnish such information, execute such instruments
and take such other action in cooperation with the Underwriters as the Representative
may reasonably request in order to (i) qualify the Bonds for offer and sale under the "blue
sky" or other securities laws and regulations of such states and other jurisdictions of the
United States as the Underwriters may designate, and (ii) determine the eligibility of the
Bonds for investment under the laws of such states and other jurisdictions, and will use
its best efforts to continue such qualifications in effect so long as required for the
distribution of the Bonds; provided, however, that the City shall not be required to
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execute a general or special consent to service of process or qualify to do business in
connection with any such qualification or determination in any jurisdiction.
(p) 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 Bonds to be applied in a
manner contrary to that provided for in the Resolution and as described in the Official
Statement.
(q) Except as expressly disclosed in the Official Statement, the City
neither is nor has been in default at any time after December 31, 1975, as to principal or
interest with respect to an obligation issued or guaranteed by the City.
(r) The City has not been notified of any listing or proposed listing by
the Internal Revenue Service to the effect that the City is a municipality whose arbitrage
certifications may not be relied upon.
(s) Except as disclosed in the Official Statement, the City has not
failed to timely make filings required by any continuing disclosure undertaking made by
it pursuant to Rule 15c2-12.
7. Closing. At or before 12:00 P.M., New York City time, on October 31,
2002, or at such other time or on such earlier or later business day as shall have been
agreed upon by the City and the Underwriters: (i) the City will deliver the Bonds in
definitive form and duly executed, to the Registrar under the "FAST" system of book -
entry registration with The Depository Trust Company, New York, New York, or by such
other means to be agreed upon by the City and the Underwriters, (ii) the City will deliver
to the Underwriters in Miami, Florida, the closing documents hereinafter mentioned, and
(iii) the Underwriters will accept such delivery and pay the Purchase Price of the Bonds
as set forth in Section 1 hereof. The foregoing payments and deliveries are herein
referred to as the "Closing" and the date of such deliveries and payments is herein
referred to as the "Closing Date." The Bonds shall bear proper CUSIP numbers and shall
be in typewritten form, with a single bond for each maturity of the Bonds, each such
bond to be in a principal amount equal to the principal amount thereof maturing on each
such date. The Bonds shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company, and will be made available for inspection and checking by
the Underwriters at least one business day prior to the Closing Date.
8. Closing Conditions. The Underwriters' obligations hereunder to purchase
and pay for the Bonds shall be subject to the performance by the City of its obligations to
be performed hereunder at or prior to the Closing, and shall also be subject to the
following conditions:
(a) The representations and warranties of the City contained herein
shall be true, complete and correct in all material respects as the date hereof and at the
time of the Closing, as if made at the time of the Closing.
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(b) At the time of the Closing (i) the Resolution shall be in full force
and effect and shall not have been amended, modified or supplemented after the date of
this Purchase Agreement (other than to conform to the description contained in the
Official Statement) except with the prior approval of the Underwriters, and (ii) the City
shall perform or have performed all of its obligations required under or specified in this
Purchase Agreement, the Official Statement and the Resolution to be performed at or
before the Closing.
(c) The City shall not be in default in the payment of principal or
interest on any of its bonds, notes, or other debt obligations or otherwise be in default
under the Resolution.
(d) At or before the Closing, the Underwriters shall receive the
following documents:
(1) The Official Statement, executed on behalf of the City;
(2) A certified copy of the Resolution;
(3) A copy of the audited financial statements of the City as of
and for the years ended September 30, 2001;
(4) The approving opinion of Akerman Senterfitt, Bond
Counsel, as to the Bonds, dated the Closing Date, substantially in the form
included as Appendix D to the Official Statement;
(5) A supplemental opinion of Akerman Senterfitt, Bond
Counsel, dated the Closing Date and addressed to the Underwriters, to the effect
that (i) the Underwriters may rely upon the opinion required pursuant to Section
8(d)(5) hereof to the same extent as if addressed to the Underwriters, (ii) the City
has duly authorized the distribution of the Preliminary Official Statement and the
Official Statement, (iii) based upon such counsel's participation in the preparation
of the Official Statement, without passing upon or assuming responsibility for the
accuracy, completeness or fairness of the statements contained therein, the
statements contained in the Preliminary Official Statement and the Official
Statement on the cover and under the captions "INTRODUCTION," "PURPOSE
OF THE ISSUE", "THE REFUNDING PLAN", "DESCRIPTION OF THE
BONDS" (excluding information about DTC or the book -entry system),
"SECURITY AND SOURCES OF PAYMENT FOR THE BONDS," "LEGAL
MATTERS," "DISCLOSURE REQUIRED BY FLORIDA BLUE SKY
REGULATIONS" (as to legal matters only and excluding any factual statements
therein), "TAX MATTERS," "ENFORCEABILITY OF REMEDIES," and in
"APPENDIX B — FORM OF THE BOND RESOLUTION," "APPENDIX D —
FORM OF BOND COUNSEL OPINION", insofar as such statements purport to
summarize certain provisions of law, the Bonds, the Resolution, the Policy
Agreement and the statutory provisions relating to the exclusion from federal or
Florida income taxation of interest on the Bonds, present a fair and accurate
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summary of the information and documents they purport to describe, (iv) the
Bonds are not subject to the registration requirements of the Securities Act of
1933, as amended, and the Resolution is not required to be registered under the
Trust Indenture Act of 1939, and the Bonds are secured by a pledge of the
Pledged Revenues under the Resolution and the Bonds have been issued in full
compliance with the provisions of the Resolution, and (v) a statement of the tax
treatment of original issue premium and original issue discount;
(6) An opinion of Akerman Senterfitt, Disclosure Counsel,
addressed to the Underwriters, in form and substance acceptable to the
Underwriters and their counsel, including without limitation, to the effect that, (i)
based upon such counsel's participation in the preparation of the Official
Statement, without passing upon or assuming responsibility for the accuracy,
completeness or fairness of the statements contained therein, the statements
contained in the Preliminary Official Statement and the Official Statement on the
cover and under the captions "CONTINUING DISCLOSURE" and "APPENDIX
F — FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT"
insofar as such statements purport to summarize certain provisions of law and the
Disclosure Agreement present a fair and accurate summary of the information and
documents they purport to describe; (ii) nothing has come to their attention
causing them to believe that the Preliminary Official Statement and the Official
Statement, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein or a
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except for the financial and
statistical information contained in the Preliminary Official Statement and the
Official Statement as to which no opinion need be expressed); and (iii) the
Underwriters have satisfied the requirements of Rule 15c2-12.
(7) An opinion, dated the date of Closing and addressed to the
Underwriters of Alejandro Vilarello, Esq., City Attorney of the City, to the effect
that (i) the City is a municipal corporation duly organized and validly existing
under the laws of the State of Florida; (ii) the City has full legal right, power and
authority to enter into this Purchase Agreement and the Policy Agreement and to
adopt the Resolution, to sell, issue and deliver the Bonds as provided in this
Purchase Agreement and to carry out and consummate the transactions
contemplated by this Purchase Agreement, the Policy Agreement, the Bonds, the
Resolution and the Official Statement; (iii) the City has the right and power and is
duly authorized to levy, impose, receive and collect the Covenanted Revenues,
(iv) this Purchase Agreement, the Disclosure Agreement and the Policy
Agreement have each been duly authorized, executed and delivered by the City
and constitute the valid, binding and enforceable agreements of the City in
accordance with their respective terms except to the extent that the enforceability
of the rights and remedies set forth therein may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally or general principles
of equity; (v) the City has duly authorized, executed and delivered the Official
10
\\MIA -SR V O I \1423471 v05\10/28/02\07335.018400
02-1181
Statement and has duly authorized the distribution of the Official Statement; (vi)
the information in the Preliminary Official Statement and the Official Statement
under the headings "SECURITY AND SOURCES OF PAYMENT FOR THE
BONDS," "INFORMATION REGARDING CITY AND COVENANT
REVENUES," "THE CITY OF MIAMI", "ISSUES RELATED TO FINANCIAL
EMERGENCY", "CURRENT FINANCIAL STATUS OF THE CITY",
"LIABILITIES OF THE CITY", "FUTURE BORROWINGS", "LITIGATION,"
"ENFORCEABILITY OF REMEDIES", "DISCLOSURE REQUIRED BY
FLORIDA BLUE SKY REGULATIONS," "AUDITED FINANCIAL
STATEMENTS," "CONTINUING DISCLOSURE," "AUTHORIZATION OF
OFFICIAL STATEMENT" and "APPENDIX A — GENERAL INFORMATION
REGARDING THE CITY OF MIAMI" and "APPENDIX C — GENERAL
PURPOSE FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL
YEAR ENDED SEPTEMBER 30, 2001" (excluding tax treatment of interest on
the Bonds, Blue Sky or other securities registration matters, and financial and
statistical information, as to which such counsel need not opine), is correct in all
material respects, as to matters of law and facts relating thereto, and does not omit
any statement, as to matters of law and facts relating thereto, which, in his
opinion, should be included or referred to therein, and, in addition, such counsel
shall state that, based upon his participation in the preparation of the Official
Statement as City Attorney and without having undertaken to determine
independently the accuracy, completeness or fairness of the statements contained
in the Official Statement (except to the extent expressly set forth in this
subsection (7)), as of the date of the Closing nothing has come to his attention
causing him to believe that, with respect to the information contained under the
headings described above in this Section, (A) the Preliminary Official Statement
and the Official Statement, as of their respective dates, contained any untrue
statement of a material fact or omitted 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 (except for the
financial and statistical information contained in the Preliminary Official
Statement and the Official Statement as to all of which no opinion need be
expressed), or (B) the information in the Official Statement (as supplemented and
amended in accordance herewith, if applicable), as of the date of the Closing,
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 (except as
aforesaid); (vii) the City is not in material breach of or material default under any
applicable constitutional provision, law or administrative regulation of the State
or the United States or any judgment or decree applicable to the City, and by
which it may be obligated, or the Resolution or any loan agreement, indenture,
bond, note, resolution, material agreement or other material instrument to which
the City is a party or to which the City or any of its property or assets is otherwise
subject, and no event has occurred and is continuing which with the passage of
time or the giving of notice, or both, would constitute a default or event of default
under any such instrument, except in each case as disclosed in the Preliminary
11
\\MIA -SR V01 \1423471 v05\10/28102\07335.018400
02_1181
Official Statement and the Official Statement; and the execution and delivery of
the Bonds, the Policy Agreement, and this Purchase Agreement and the adoption
of the Resolution and compliance with the provisions on the City's part contained
therein, will not conflict with or constitute a breach of or default under any
constitutional provision, law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or other instrument to
which the City is a party or to which the City or any of its property or assets is
otherwise subject, nor will any such execution, delivery, adoption or compliance
result in the creation or imposition of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the property or assets of the
City or under the terms of any such law, regulation or instrument, except as
expressly provided by the Bonds and the Resolution; (viii) the City has the right
and power urtder the Act to adopt the Resolution and the Resolution has been duly
and lawfully adopted by the City, is in full force and effect and constitutes the
legal, valid and binding obligation of the City, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject to general principles of equity as to
enforceability and no other authorization is required; (ix) the Bonds are valid and
binding special obligations of the City, enforceable in accordance with their terms
and the terms of the Resolution, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject to general principles
of equity as to enforceability and are entitled to the benefits of the Resolution and
the Act; (x) there is no action, suit, proceeding, inquiry or investigation at law or
in equity to which the City is a'party, before or by any court, government agency,
public board or body, pending or, to the, best of his knowledge, threatened against
or affecting the City, nor, to the best of his knowledge, is there any basis for any
such action, suit, proceeding, inquiry or investigation, wherein an unfavorable
decision, ruling or finding would have a materially adverse effect upon the
transactions contemplated by the Official Statement, or the validity of the Bonds,
the Resolution, the Policy Agreement or this Purchase Agreement, except as
described in the Official Statement; and (xi) except as provided in the Official
Statement, all authorizations, consents, approvals and reviews of governmental
bodies or regulatory authorities then required for the City's adoption, execution or
performance of the Bonds, the Resolution, the Policy Agreement and this
Purchase Agreement have been obtained or effected;
(8) An opinion of general counsel of the Insurer dated the date
of Closing and addressed to the Underwriters, in form and substance satisfactory
to the Underwriters, to the effect that: (i) the Insurer is duly qualified to do
business in the State of Florida, (ii) the Insurer has full corporate power and
authority to execute and deliver the Policy and the Reserve Policy and the Policy
and the Reserve Policy have each been duly authorized, executed and delivered
by the Insurer and each constitutes the legal, valid and binding obligation of the
Insurer enforceable in accordance with its respective terms, and (iii) the
information contained in the Preliminary Official Statement and the Official
Statement under the heading "MUNICIPAL BOND INSURANCE" and contained
12 02-1181.
1Vv1IA-SR V01 \ 1423471 v05\I 0/28/02\07335.018400
in "APPENDIX E — SPECIMENS OF MUNICIPAL BOND INSURANCE
POLICY AND DEBT SERVICE RESERVE FUND POLICY," is true and correct
in all material respects and does not omit any statement which in his opinion
should be stated therein in order to make the statements made therein, in light of
the circumstances in which made, not misleading;
(9) A certificate of the City dated the Closing Date signed by
its Mayor, the City Manager and Finance Director, in form and substance
satisfactory to the Underwriters, to the effect that (i) the representations and
warranties of the City contained herein are true and correct in all material respects
as of the date of Closing, as if made on the date of Closing; (ii) the City has
performed all obligations to be performed hereunder as of the date of Closing;
(iii) this Purchase Agreement, the Disclosure Agreement and the Policy
Agreement have been duly authorized, executed and delivered by the City and
constitute the valid, binding and enforceable agreements of the City in accordance
with their terms; (iv) the Resolution has been duly and lawfully adopted by the
City, is in full force and effect, has not been modified, amended or repealed
except as provided therein; (v) the Bonds have been duly authorized, executed
and delivered by the City and are payable from and secured by a lien on the
Pledged Revenues, (vi) except as disclosed in the Preliminary Official Statement
or the Official Statement, no litigation is pending or threatened (A) to restrain or
enjoin the issuance or delivery of the Bonds, (B) in any way contesting or
affecting any authority for the issuance of the Bonds or the validity of the Bonds,
the Resolution, the Policy Agreement or this Purchase Agreement, (C) in any way
contesting the existence or powers of.the City, (D) which may result in any
material adverse change in the business, properties, assets or financial condition
of the City, or (E) asserting that the Official Statement contains any untrue
statement of a material fact or omits to state any material fact or a fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (vii) since September 30, 2001, no material adverse
change has occurred in the financial position of the City except as set forth in or
contemplated by the Preliminary Official Statement and the Official Statement;
(viii) except as described in the Preliminary Official Statement and the Official
Statement, since September 30, 2001, no material adverse change has occurred in
the collection of non -ad valorem revenues legally available for payment of the
Bonds; and (ix) the Preliminary Official Statement and the Official Statement did
not as of their respective dates, and did not and does not as of the date of Closing,
contain any untrue statement of a material fact or omit to state a material fact
which should be included therein for the purposes for which the Preliminary
Official Statement and the Official Statement have been or are to be used, or
which is necessary in order to make the statements contained therein, in light of
the circumstances in which they were made, not misleading;
(10) Evidence that, assuming delivery of the Policy, Moody's
Investors Service has issued an "Aaa" rating for the Bonds, that Standard &
Poor's Public Finance Ratings, a Division of the McGraw-Hill Companies, has
13 '—�t8l.
WIA-SRV 01 \ 1423471 v05\I 0/29/02\07335.018400
issued an "AAA" rating for the Bonds and Fitch Ratings has issued an "AAA"
rating for the Bonds, and that such ratings are in full force and effect as of the
date of Closing;
(11) A certificate executed by the appropriate officer of the
City, dated the date of Closing, satisfactory to Bond Counsel setting forth the
facts, estimates and circumstances which establish that it is not expected that the
proceeds of the Bonds will be used in a.manner that would cause the Bonds to be
"arbitrage bonds" within the meaning of the Internal Revenue Code of 1986, as
amended, and to the best of the knowledge and belief of such officer, such
expectations are reasonable;
(12) An opinion of counsel to the Underwriters, dated as of the
Closing Dafe, addressed to the Underwriters, in a form acceptable to the
Underwriters;
(13) The Policy of the Insurer insuring payment of the principal
of, and interest on, the Bonds when due and the Reserve Policy in an amount
equal to the Reserve Requirement;
(14) An authority and incumbency certificate of Wachovia
Bank, National Association, as Registrar and Paying Agent, in a form acceptable
to the Underwriter;
(15) An executed Disclosure Agreement; and
(16) Such additional certificates, legal opinions, instruments,
proceedings and other documents as the Underwriters or their counsel may
reasonably deem necessary to evidence the truth and accuracy as of the time of
the Closing of the representations of the City, the compliance of the City with
legal requirements and the due performance or satisfaction by the City on or prior
to such time of all agreements then to be performed and all conditions then to be
satisfied by the City.
If the City shall be unable to satisfy the conditions contained in this Purchase
Agreement, or if the obligations of the Underwriters shall be terminated for any reason
permitted by this Purchase Agreement, this Purchase Agreement shall terminate and
neither the Underwriters nor the City shall be under further obligation hereunder, except
as expressly set forth in Sections 10(a) and (b) hereof.
9. Termination. The Underwriters may terminate this Purchase Agreement
by notification to the City if at any time after the date hereof and before the Closing (i)
legislation shall be enacted by the Congress or adopted by either House thereof, or a
decision by a Court of the United States of America or the United States Tax Court shall
be rendered, or a ruling, regulation or official statement by or on behalf of the Treasury
Department of the United States of America, the Internal Revenue Service or other
governmental agency shall be made, with respect to federal taxation upon interest
14 02--1181
MLA-SRVO i \1423471 v05\ I0/28/02\07335.018400
received on bonds of the general character of the Bonds in a manner different than that
described in the Preliminary Official Statement, or with respect to the payment, pledge or
collection of the Covenanted Revenues, any of which, in the reasonable opinion of the
Underwriters, materially adversely affects the market price of the Bonds; (ii) there shall
have occurred since the date hereof any outbreak of hostilities or any national or
international calamity or crisis, the effect of such outbreak, calamity or crisis being such
as would cause a major disruption in the municipal bonds market and as, in the
reasonable judgment of the Underwriters, would make it impracticable for the
Underwriters to market the Bonds or to enforce contracts for the sale of the Bonds; (iii)
there shall be in force a general suspension of trading on The New York Stock Exchange,
Inc. or minimum or maximum prices for trading shall have been fixed and be in force, or
maximum ranges for prices for securities shall have been required and be in force on The
New York Stock Exghange, Inc., whether by virtue of a determination by The New York
Stock Exchange, Inc. or by order of the Securities and Exchange Commission or any
other governmental authority having jurisdiction; (iv) a general banking moratorium shall
have been declared by Federal, New York or Florida authorities having jurisdiction and
be in force; (v) prior to Closing, either (A) Standard & Poor's Public Finance Ratings, a
division of The McGraw Hill Companies, Moody's Investors Service, Inc. or Fitch
Ratings shall inform the City or the Underwriters that the Bonds will not be rated at least
"AAA", "Aaa" and "AAA", respectively, or the withdrawal or downgrading by a national
rating agency of any other securities insured by the Insurer; or (B) Financial Guaranty
Insurance Company (the "Insurer") shall inform the City or the Underwriters that it will
not deliver its municipal bond insurance policy (the "Policy") or Municipal Bond Debt
Service Reserve Fund Policy (the "Reserve Policy") on the date of Closing; (vi) legal
action shall have been filed against the City an adverse ruling on which would materially
adversely affect the transactions contemplated by this Purchase Agreement or by the
Official Statement or the validity of the Bonds, the Resolution, the Policy Agreement or
this Purchase Agreement; provided, however, that as to any such litigation, the City may
request and the Underwriters may accept an opinion by Bond Counsel, or of other
counsel acceptable to the Underwriters, that in such counsel's opinion the issues raised
by any such litigation or proceeding are without substance or that the contentions of any
plaintiff are without merit; (vii) the issuance of a stop order, release, regulation or no
action letter by or on behalf of the Securities and Exchange Commission or any other
governmental agency having jurisdiction of the subject matter (which is beyond the
control of the Underwriters to prevent or avoid) to the effect that the issuance, offering or
sale of the Bonds, or any document relating to the issuance, offering or sale of the Bonds,
is or would be in violation of any provision of the federal securities laws at the Closing,
including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, or the Trust Indenture Act of 1939, as amended; (viii) the enactment or
proposal of legislation, or a decision by a court of the United States, or a ruling or
regulation by or on behalf of the Securities and Exchange Commission or other
governmental agency having jurisdiction over the subject matter, to the effect of
requiring the Bonds or any securities of the type contemplated herein, to be subject to the
registration requirements of the Securities Act of 1933 or that the Resolution is not
exempt from qualification under, or other requirements of, the Trust Indenture Act of
1939, as amended; or (ix) any event shall have occurred or shall exist which makes
15
AMIA-SR V01\ 1423471 v05\ 10/28/02\07335.018400
02-1181
untrue or incorrect, as of its date, in any material respect, any material statement or
information contained in the Preliminary Official Statement or the Official Statement or
which is not reflected in the Preliminary Official Statement or the Official Statement, as
the same may have been revised from time to time pursuant to Section 2(e) hereof, but
should be reflected therein in order to make such material statements and information
contained therein not misleading as of such time, unless the City timely and appropriately
supplements or amends the Official Statement pursuant to Section 2(e) above.
10. Expenses.
(a) Except as provided in (b) below, the Underwriters shall be under
no obligation to pay, and the City shall pay or cause to be paid, from the proceeds of the
Bonds or other funds available to it, such expenses incident to the performance of its
obligations hereund6r, including but not limited to, (i) the cost of the preparation and
printing or other reproduction of the Preliminary Official Statement and the Official
Statement; (ii) the fees and disbursements of Bond Counsel and Disclosure Counsel,
Akerman Senterfitt, (iii) the fees and disbursements of the Paying Agent and Registrar,
(iv) the fees and disbursements of any other experts, accountants, consultants or advisors
retained by the City, including without limitation, RBC Dain Rauscher Inc., the City's
Financial Advisor; (v) the premiums for the Policy and Reserve Policy and any other
charges imposed by the Insurer; and (vi) the costs and fees of the rating agencies.
(b) The Underwriters shall pay expenses related to the initial purchase
and sale of the Bonds as follows: (i) all advertising expenses in connection with the
public offering of the Bonds; (ii) the fees and disbursements of Greenberg Traurig, P.A.,
counsel to the Underwriters, and (iii) all other expense incurred by them in connection
with the public offering and distribution of the Bonds.
11. Notices. Any notice or other communication to be given to the City under
this Purchase Agreement shall be given by delivering the same in writing to City of
Miami, Florida, 444 S.W. 2nd Avenue, 6th Floor, Miami, Florida 33130, Attention: Scott
Simpson, C.P.A., Finance Director. Any notice or other communication to be given to
the Underwriters under this Purchase Agreement shall be given by delivering the same in
writing to Salomon Smith Barney Inc., 110 E. Broward Boulevard, Suite 1850, Fort
Lauderdale, Florida 33131, Attention: John Rodstrom.
12. [Intentionally omitted]
13. Entire Agreement; Parties in Interest. This Purchase Agreement shall
constitute the entire agreement between the City and the Underwriters and is made solely
for the benefit of the City and the Underwriters (including their respective successors or
assigns). No other person shall acquire or have any rights hereunder or by virtue hereof.
All representations, warranties and agreements of the City in this Purchase Agreement
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 and payment for the
Bonds hereunder.
16
WNIA-SR V01 \ 1423471 v05\10/28/02\07335.01 9700
02-11.84
14. Effectiveness. This Purchase Contract shall become effective upon the
execution of the acceptance hereof on behalf of the City by its duly authorized officer,
and shall be valid and enforceable at the time of such acceptance.
15. Counterparts. This Purchase Contract may be executed in several
counterparts, which together shall constitute one and the same instrument.
16. Amendments. This Purchase Agreement may not be amended without the
written consent of the City and the Representative.
17. Truth -in -Bonding Statement. The City is proposing to issue $28,025,000
of Bonds for the purpose, together with other available moneys, of repaying the
obligation due the Underwriters for a payment made by the Underwriters which was used
to pay all of the City's obligations due under certain Loan Agreements dated as of May
12, 1994, and October 25, 1995, each between the City and the Sunshine State
Governmental Financing Commission (collectively, the "Outstanding Loan
Agreements"), paying certain costs associated with the Policy and Reserve Policy, issued
by the Insurer, and paying the costs of issuance of the Bonds. This debt or obligation is
expected to be repaid over a period of approximately 14.95 years. At a true interest cost
rate of 3.762939% total interest paid over the life of the debt or obligation will be
$10,292,305.50.
The Bonds will be payable from Covenanted Revenues of the City in the manner
provided in the Resolution. Authorizing this debt or obligation will result on average of
approximately $2,568,279.65 of the City's Covenanted Revenues not being available to
finance the other services of the City each year for approximately 14.95 years. The
foregoing computations are submitted for purposes of information only.
18. Governing Law. The validity, interpretation and performance of this
Purchase Agreement shall be governed by the internal laws of the State of Florida,
without regard to conflict of law principles.
19. Headings. The headings of the Sections of this Purchase Agreement are
inserted for convenience only and shall not be deemed to be part hereof.
[Signature pages follow]
17
\\MIA-SRV01\1423471 v05\ 10/28/02\07335.018400
02-1181
SALOMON SMITH BARNEY INC., as
Representative of the Underwriters
John Rodstrom, Director
Date: October 30, 2002
Accepted:
CITY OF MIAMI, FLORIDA
Carlos A. Gimenez, City Manager
Miami, Florida
APPROVED AS TO FORM:
Alejandro Vilarello, Esq., City Attorney
02-1181
AM IA -SRV 01 \ 142347 1 v05\ 10/28/02\07335.018400
EXHIBIT "A"
MATURITY SCHEDULE
City of Miami, Florida
Special Obligation Non -Ad Valorem Revenue Refunding Bonds,
Series 2002C
$28,025,000
Date
October 1
Principal
Interest Rate
Price
Yield
2003
$980,000
2.000%
100.180%
1.800%
2004
980,000
2.125
99.915
2.170
2005
1,025,000
2.500
100.000
2.500
2006
1,710,000
2.750
99.814
2.800
2007
1,760,000
3.000
99.590
3.090
2008
1,810,000
3.375
99.918
3.390
2009
1,875,000
3.500
99.390
3.600
2010
1,940,000
3.800
99.659
3.850
2011
2,015,000
3.900
99.550
3.960
2012
2,090,000
4.000
99.511
4.060
2013
2,175,000
4.125
99.605
4.170
2014
2,265,000
4.300
99.812
4.320
2015
2,360,000
4.375
99.557
4.420
2016
2,465,000
4.500
99.587
4.540
2017
2,575,000
4.600
99.569
4.640
A-1
\\MIA -SM 1\1 42347 1 v05\10/28/02\07335.018400
EXHIBIT "B"
Redemption Provisions
Optional Redemption. The Series 2002 Bonds are subject to optional
redemption by the City on or after October 1, 2012, in whole or in part on any date and, if
in part, in such amounts and of such maturities as the City shall determine, at a
redemption price equal to the principal amount of the Series 2002 Bonds to be redeemed,
plus accrued but unpaid interest to the date of redemption.
��
AMIA-SRV 0M] 42347 1 v05110/29/02\0733 5.018400
02-1181
EXHIBIT "C"
SALOMON SMITH BARNEY INC.
110 E. Broward Boulevard, Suite 1850
Fort Lauderdale, Florida 33131
October 30, 2002
City of Miami, Florida
444 S.W. 2nd Avenue, 6th Floor
Miami, Florida 33130
Re: $28,025,000 City of Miami, Florida Special Obligation Non -Ad Valorem
Revenue Refunding Bonds, Series 2002C
Ladies and Gentlemen:
In connection with the proposed issuance by the City of Miami, Florida (the
"City"), of $28,025,000 in aggregate principal amount of Special Obligation Non -Ad
Valorem Revenue Refunding Bonds, Series 2002C (the "Bonds"), Salomon Smith
Barney Inc. (the "Representative"), and Lehman Brothers, UBS PaineWebber Inc.,
Jackson Securities LLC, Morgan Stanley & Co., Incorporated and JP Morgan Securities,
Inc. (collectively, the "Underwriters") are preparing to underwrite a public offering of the
Bonds. Arrangements for underwriting the Bonds will include a Bond Purchase
Agreement between the City and the Underwriters that 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, as amended, certain information in respect of the
arrangements contemplated for the underwriting of the Bonds as follows:
(a) The nature and estimated amounts of expenses to be incurred by
the Underwriters in connection with the purchase and reoffering
of the Bonds are set forth in Schedule I attached hereto.
(b) Based upon the knowledge of the undersigned, there are no
"finders," as defined in Section 218.386, Florida Statutes, as
amended, connected with the issuance of the Bonds.
(c) The underwriting spread (i.e., the difference between the price at
which the Bonds will be initially offered to the public by the
Underwriters and the price to be paid to the City for the Bonds)
will be $5.99 per $ 1,000 bond, or $167,779.31.
(d) There is no fee, bonus or other compensation to be paid by the
Underwriters in connection with the issuance of the Bonds to any
person not regularly employed or retained by the Underwriters,
C-1 02-1181
AMIA-SR V01 \ 1423471 v05\10/28/02\07335.016400
except as specifically enumerated as expenses referred to in
paragraph (a) above to be incurred by the Underwriters as set
forth in Schedule I attached hereto.
The names and addresses of the Underwriters are:
Salomon Smith Barney Inc.
110 E. Broward Boulevard, Suite 1850
Fort Lauderdale, Florida 33301
Lehman Brothers
1111 Brickell Avenue
Miami, Florida 33131
UBS PaineWebber Inc.
100 S.E. 2nd Street, Suite 2500
Miami, Florida 33131
Jackson Securities LLC
801 Brickell Avenue, Suite 934
Miami, Florida 33131
Morgan Stanley & Co., Incorporated
Sun Bank Center
200 S. Orange Avenue, Suite 1440
Orlando, Florida 32801
JP Morgan Securities
5201 Blue Lagoon Drive, Suite 800
Miami, Florida 33126
We understand that you do not require any further disclosure from the
Underwriters pursuant to Section 218.385(6), Florida Statutes, as amended.
Very truly yours,
SALOMON SMITH BARNEY INC., as
Representative of the Underwriters
Lo
C-2
\\MIA -SRV 01 \ 1423471 v05\ 10/28/02\0733 5.018400
John Rodstrom
Director
02-1181
SCHEDULEI
EXPENSES
PER $1,000
ITEM BOND TOTAL
Legal Fees of Underwriter's Counsel
Expenses of Underwriter's Counsel
Dalcomp
Day Loan
TBMA
CUSIP
Miscellaneous Senior Manager Expenses
TOTAL
AMIA-SRV01\1 42347 1 v05\I 0/28/02\07335.018400
1.00000
$28,025.00
0.03568
1,000.00
0.06250
1,751.56
0.03000
840.75
0.03000
840.75
0.00856
240.00
0.03568
1,000.00
1.20242
$33.698.06
-1 02_11$1
Electronic Distribution of the Official Statement Disclaimer Language
$28,025,000
THE CITY OF MIAMI, FLORIDA
Special Obligation Non -Ad Valorem Revenue Refunding Bonds
Series 2002C
DISCLAIMER
Electronic access to the following 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 Official Statement is the
printed version available for physical delivery. Although the information contained in the following Official
Statement has been formatted in a manner which should exactly replicate the printed 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 Official Statement.
The user of this Official Statement assumes the risk of any discrepancies between the printed Official Statement and
the electronic version of this document.
Copies of the printed Official Statement may be obtained from:
Imagemaster Financial Publishing, Inc.
1174 Oak Valley Drive
Ann Arbor, Michigan 48108
Tel: (734) 327-1100
www.imagemaster.com
This Official Statement and the information contained herein are subject to completion or amendment
without notice. The posting of 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 securities described in the Official Statement in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities
laws of any such jurisdiction.
By clicking on the hyperlink at the bottom of this page and accessing the following Official Statement, you
will have been deemed to have (i) accepted the provisions of this page, (ii) agreed not to print the Official Statement
except in its entirety, and (iii) consented to the electronic transmission of the Official Statement.
02-1181
(OR546407;13 )
THE CITY OF MIAMI, FLORIDA
SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS, SERIES 2002C BONDS
MATURITIES, AMOUNTS, INTEREST RATES AND YIELDS
$28,025,000 SERIAL BONDS
Maturity
(October 1)
Amount
Interest Rate
Yield
2003
$ 980,000
2.000%
1.800%
2004
$ 980,000
2.125%
2.170%
2005
$1,025,000
2.500%
2.500%
2006
$1,710,000
2.750%
2.800%
2007
$1,760,000
3.000%
3.090%
2008
$1,810,000
3.375%
3.390%
2009
$1,875,000
3.500%
3.600%
2010
$1,940,000
3.800%
3.850%
2011
$2,015,000
3.900%
3.960%
2012
$2,090,000
4.000%
4.060%
2013
$2,175,000
4.125%
4.170%
2014
$2,265,000
4.300%
4.320%
2015
$2,360,000
4.375%
4.420%
2016
$2,465,000
4.500%
4.540%
2017
$2,575,000
4.600%
4.640%
(OM46407;13) 02-1181
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 & DISCLOSURE COUNSEL
Akerman, Senterfitt & Eidson, P.A.
Miami, Florida
FINANCIAL ADVISOR
RBC Dain Rauscher, Inc.
Fort Lauderdale, Florida
(OR546407;13) 02-1181
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 Financial Guaranty Insurance Company ( 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.
THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE CITY FOR
PURPOSES OF RULE 15C2-12 ISSUED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO
RULE 15C2 -12(B)(1).
NO REGISTRATION STATEMENT RELATING TO THE SERIES 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. THE 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 OFFICIAL STATEMENT SHALL NOT CONSTITUTE A CONTRACT BETWEEN THE CITY
OR THE UNDERWRITERS, AND ONE OR MORE OWNERS OF THE SERIES 2002 BONDS.
02-11si
{OR546407;13}
TABLE OF CONTENTS
Contents Page
INTRODUCTION........................................................................................................................................................ 1
PURPOSE OF THE ISSUE..........................................................................................................................................
2
THEREFUNDING PLAN...........................................................................................................................................
2
ESTIMATED SOURCES AND USES OF FUNDS....................................................................................................
3
DEBT SERVICE SCHEDULE....................................................................................................................................
3
DESCRIPTION OF THE SERIES 2002 BONDS.......................................................................................................
4
General...........................................................................................................................................................
4
Book -Entry Only System...............................................................................................................................
4
Redemption....................................................................................................................................................
6
Registration, Transfer and Exchange..............................................................................................................
6
Replacement of Bonds Mutilated, Destroyed, Stolen or Lost........................................................................
6
MUNICIPAL BOND INSURANCE............................................................................................................................
7
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS .....................................................
8
LimitedObligations........................................................................................................................................
8
PledgedRevenues...........................................................................................................................................
8
Creationof Funds and Accounts....................................................................................................................
9
Disposition of Covenant Revenues......................................................:..........................................................
9
EscrowAgreement.......................................................................................................................................
10
ReserveFund................................................................................................................................................
10
Debt Payable From Non -Ad Valorem Revenues..........................................................................................
11
INFORMATION REGARDING COVENANT REVENUES...................................................................................
11
Introduction..................................................................................................................................................
11
FranchiseFees..............................................................................................................................................
12
PublicService Tax........................................................................................................................................
12
Local Communications Service Tax............:................................................................................................
13
Licensesand Permits....................................................................................................................................
13
Intergovernmental....................................................... :................................................................................
14
Chargesfor Services.....................................................................................................................................
15
Other Revenue and Financing Sources.........................................................................................................
16
THECITY OF MIAMI...............................................................................................................................................
20
Background..................................................................................................................................................
20
CityGovernment..........................................................................................................................................
20
ProposedReorganization..............................................................................................................................
21
ISSUES RELATED TO FINANCIAL EMERGENCY.............................................................................................
21
Background..................................................................................................................................................
21
Appointment of Financial Oversight Board.................................................................................................
21
Securities and Exchange Commission Actions............................................................................................
22
CURRENT FINANCIAL STATUS OF THE CITY..................................................................................................
22
Adoption of Financial Integrity and Anti -Deficiency Ordinances................................................................
23
Adoption of Five Year Financial Plan..........................................................................................................
23
Adoptionof Investment Policy.....................................................................................................................
24
Adoption of Debt Management Policy.........................................................................................................
25
CapitalImprovement Plan............................................................................................................................
25
InformationTechnology...............................................................................................................................
25
Fiscal and Accounting Procedures...............................................................................................................
25
GASB34......................................................................................................................................................
26
GeneralFund................................................................................................................................................
26
Recent Financial Developments...................................................................................................................
28
LIABILITIESOF THE CITY....................................................................................................................................
28
Insurance Considerations Affecting the City................................................................................................
28
WorkersCompensation................................................................................................................................
29
HealthInsurance...........................................................................................................................................
29
{OR546407;13} i 02-1181
Ability to be Sued, Judgments Enforceable.................................................................................................. 29
Indebtednessof the City............................................................................................................................... 29
DirectDebt................................................................................................................................................... 30
OtherObligations......................................................................................................................................... 30
RECENTBORROWINGS......................................................................................................................................... 31
LEGALMATTERS.................................................................................................................................................... 31
LITIGATION............................................................................................................................................................. 32
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS............................................................. 32
TAXMATTERS........................................................................_.............................................................................. 33
RATINGS................................................................................................................................................................... 34
FINANCIALADVISOR............................................................................................................................................ 34
AUDITEDFINANCIAL STATEMENTS................................................................................................................. 34
UNDERWRITING..................................................................................................................................................... 35
CONTINGENTFEES................................................................................................................................................ 35
ENFORCEABILITYOF REMEDIES........................................................................................................................ 35
CONTINUINGDISCLOSURh.................................................................................................................................. 35
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT................................................................... 35
FORWARD-LOOKING STATEMENTS.................................................................................................................. 36
MISCELLANEOUS................................................................................................................................................... 36
AUTHORIZATION OF OFFICIAL STATEMENT.................................................................................................. 37
APPENDICES:
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
GENERAL INFORMATION REGARDING THE CITY OF MIAMI
FORM OF THE BOND RESOLUTION, AS SUPPLEMENTED
GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001
FORM OF BOND COUNSEL ®PIMON
SPECIMENS OF MUNICIPAL BOND INSURANCE POLICY AND DEBT SERVICE
RESERVE FUND POLICY
FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT
PROPOSED REORGANIZATION PLAN
(OR546407;13) ii 02-1181
OFFICIAL STATEMENT
relating to
$28,025,000
THE CITY OF MIAMI, FLORIDA
Special Obligation Non -Ad Valorem Revenue Refunding Bonds
Series 2002C
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 its Special Obligation Revenue Refunding Bonds,
Series 2002C (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," and "APPENDIX C — GENERAL PURPOSE AUDITED FINANCIAL
STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30,2001."
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 a Resolution adopted by the City Commission of the City on September 26, 2002, as
supplemented by that certain Supplemental Resolution adopted by the City Commission of the City on October 29,
2002 (collectively, the "Resolution"). A copy of the Resolution is attached hereto as "APPENDIX B — FORM OF
THE BOND RESOLUTION, AS SUPPLEMENTED."
The Series 2002 Bonds are being issued for the purpose of repaying an obligation used to retire certain
outstanding obligations of the City. See "PURPOSE OF THE'ISSUE" and "THE PLAN OF REFUNDING" herein.
The Series 2002 Bonds shall not be deemed to constitute general obligations or a pledge of the faith and
credit of the City, the State of Florida or any political subdivision thereof within the meaning of any constitutional,
legislative or charter provision of limitation, but shall be payable solely from and secured by a lien upon and pledge
of the Pledged Revenues, in the manner and to the extent described in the Resolution. No holder of the Series 2002
Bonds shall ever have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing
power of the City or any political subdivision of the State of Florida or taxation in any form on any real or personal
property to pay such Series 2002 Bond or the interest thereon, nor shall any Bondholder be entitled to payment of
such Series 2002 Bond from any moneys of the City other than the Pledged Revenues, all in the manner and to the
extent described in the Resolution.
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 Financial Guaranty
Insurance Company (the "Insurer"). A copy of the municipal bond insurance policy is attached hereto as
"APPENDIX E — SPECIMEN MUNICIPAL BOND INSURANCE POLICY."
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 and not otherwise defined herein have the meanings set forth in the Resolution, unless the context would
clearly indicate otherwise.
All documents of the City referred to herein may be obtained from Scott Simpson, CPA, Finance Director,
444 S.W. 2nd Avenue, 6th Floor, Miami, Florida 33130, Telephone (305) 416-1377.
l OR546407;13 } 02-1181
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 a Resolution adopted by the City Commission of the City on September 26, 2002 (the
"Resolution").
The Series 2002 Bonds are being issued for the purpose of (i) repaying an interim obligation of the City,
the proceeds of which were used to retire loans to the City from the Sunshine State Governmental Financing
Commission Tax -Exempt Commercial Paper Revenue Notes (governmental Financing Program) that were entered
into on May 12, 1994 in the original aggregate principal amount of $15,190,000, and on October 25, 1995 in the
original aggregate principal amount of $30,000,000 (collectively, the "Prior Notes"), (ii) purchasing a reserve fund
policy for the Series 2002 Bonds, and (iii) paying certain costs and expenses incurred in connection with the
issuance of the Series 2002 Bonds. The interim obligation was created when the managing underwriter wired
moneys that were used to pay the Prior Notes on October 17, 2002 (the "Intended Closing Date") before the
issuance of the Series 2002 Bonds. The issuance failed to occur on the Intended Closing Date primarily due to a
difference of opinion between the managing underwriter and the City regarding whether certain information with
respect to a proposed reorganization plan for the City should be included in the Official Statement. See "THE CITY
OF MIAMI - Proposed Reorganization" herein.
THE REFUNDING PLAN
The City has determined to issue the Series 2002 Bonds for the purpose of repaying the interim obligation
used to retire the Prior Notes in order to take advantage of the current environment of historically low fixed interest
rates. Such repayment will be accomplished through the issuance of the Series 2002 Bonds and the use of a portion
of the proceeds thereof to repay the interim obligation.
[Remainder of page intentionally left blank.]
1OR546407;13} 2 02-1181
2-1181
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
Less: Net Original Issue Discount
TOTALSOURCES
USES:
$28,025,000.00
(92,873.25)
27.926.75
Repayment of Interim Obligation $27,517,592.02
Costs of IssuanceM 414,534.73
TOTAL USES 27.932.126.75
Includes reserve fund policy premium, 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.
IOR546407;131 3 02-1181
2-1181
Total Debt
October 1,
Principal
Interest
Service
2003
$ 980,000
$963,790.40
$1,943,790.40
2004
980,000
1,028,631.26
2,008,631.26
2005
1,025,000
1,007,806.26
2,032,806.26
2006
1,710,000
982,181.26
2,692,181.26
2007
1,760,000
935,156.26
2,695,156.26
2008
1,810,000
882,356.26
2,692,356.26
2009
1,875,000
821,268.76
2,696,268.76
2010
1,940,000
755,643.76
2,695,643.76
2011
2,015,000
681,923.76
2,696,923.76
2012
2,090,000
603,338.76
2,693,338.76
2013
2,175,000
519,738.76
2,694,738.76
2014
2,265,000
430,020.00
2,695,020.00
2015
2,360,000
332,625.00
2,692,625.00
2016
2,465,000
229,375.00
2,694,375.00
2017
2,575,000
118,450.00
2,693,450.00
Total
28,025.000
10.292.305.50
38.317,305.50
IOR546407;131 3 02-1181
2-1181
DESCRIPTION OF THE SERIES 2002 BONDS
General
The Series 2002 Bonds shall be issued as fully registered, book -entry only bonds in the denomination of
$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 1 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
April 1 and October 1 of each year, commencing April 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 Depository 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 Bonds 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 85 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. 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 turn, 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
1OR546407;13 } 4
p2-111.
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 turn 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 Series 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).
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.
1OR546407;13) 5 02-1181
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.
Redemption
Optional Redemption. The Series 2002 Bonds are subject to optional redemption by the City on or after
October 1, 2012, in whole or in part on any date, and if in part, in such amounts and of such maturities as the City
shall determine at a redemption price equal to the principal amount of the Series 2002 Bonds to be redeemed, plus
accrued but unpaid interest to the date 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
attorney-in-fact or legal representative containing wtitten 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 registered 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.
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.
{OR546407;13) 6 02-1181
MUNICIPAL BOND INSURANCE
The following information has been furnished by Financial Guaranty Insurance Company ( the "Insurer"),
for use in this Official Statement. Reference is made to Appendix E for a specimen of the policy.
Concurrently with the issuance of the Series 2002 Bonds, Financial Guaranty Insurance Company
("Financial Guaranty") will issue its Municipal Bond New Issue Insurance Policy (the "Policy") for the Series 2002
Bonds described in the Policy (as used under the heading, the "Series 2002 Bonds"). The Policy unconditionally
guarantees the payment of that portion of the principal of and interest on the Series 2002 Bonds which has become
due for payment, but shall be unpaid by reason of nonpayment by the City. Financial Guaranty will make such
payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal Agent"), on the
later of the date on which such principal and interest is due or on the business day next following the day on which
Financial Guaranty shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or
written notice by registered or certified mail, from an owner of Series 2002 Bonds or the Paying Agent of the
nonpayment of such amount by the City. The Fiscal Agent will disburse such amount due on any Series 2002 Bond
to its owner upon receipt by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to
receive payment of the principal or interest due for payment and evidence, including any appropriate instruments of
assignment, that all of such owner's rights to payment of such principal or interest shall be vested in Financial
Guaranty. The term "nonpayment" in respect of a Series 2002 Bond includes any payment of principal or interest
made to an owner of a Series 2002 Bond which has been recovered from such owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having
competent jurisdiction.
The Policy is non -cancelable and the premium will be fully paid at the time of delivery of the Series 2002
Bonds. The Policy covers failure to pay principal of the Series 2002 Bonds on their respective stated maturity dates
or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other
date on which the Series 2002 Bonds may have been otherwise called for redemption, accelerated or advanced in
maturity, and covers the failure to pay an installment of interest on the stated date for its payment.
Generally, in connection with its insurance of an issue of municipal securities, Financial Guaranty requires,
among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities
upon the occurrence of an event of default, without the consent of such holders, and that such holders may not
exercise such rights without Financial Guaranty's consent, in each case so long as Financial Guaranty has not failed
to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or
other modification of the principal legal documents be subject to Financial Guaranty's consent. The specific rights,
if any, granted to Financial Guaranty in connection with its insurance of the Series 2002 Bonds are set forth in
"APPENDIX B — FORM OF THE BOND RESOLUTION, AS SUPPLEMENTED" of this Official Statement.
Reference should be made as well to such description for a discussion of the circumstances, if any, under which the
City is required to provide additional or substitute credit enhancement, and related matters.
This Official Statement contains a section entitled "RATINGS" regarding the ratings assigned to the Series
2002 Bonds and reference should be made to such section for a discussion of such ratings and the basis for their
assignment to the Series 2002 Bonds.
The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the
New York Insurance Law.
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware
holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither
the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial
Guaranty is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by
the State of New York Insurance Department. As of June 30, 2002, the total capital and surplus of Financial
Guaranty was approximately $1.01 billion. Financial Guaranty prepares financial statements on the basis of both
statutory accounting principles and generally accepted accounting principles. Copies of such financial statements
may be obtained by writing to Financial Guaranty at 125 Park Avenue, New York, New York 10017, Attention:
Communications Department (telephone number: 212-312-3000) or to the New York State Insurance Department at
25 Beaver Street, New York, New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau
(telephone number: 212-480-5187).
02-1181
(OR546407;13) 7
The insurance provided by the Insurer's Policy is not covered by the Florida Insurance Guaranty
Association created under Chapter 631, Florida Statutes.
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2002 BONDS
Limited Obligations
The Series 2002 Bonds are limited obligations of the City, payable solely from and secured only by
Pledged Revenues as provided in the Resolution and as further described herein. The Series 2002 Bonds shall not
be deemed to constitute general obligations or a pledge of the faith and credit of the City, the State of Florida or any
political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation,
but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Revenues, in the manner
and to the extent provided in the Resolution. No Bondholder shall ever have the right, directly or indirectly, to
require or compel the exercise of the ad valorem taxing power of the City or any political subdivision of the State of
Florida or taxation in any form on any real or personal property to pay such Series 2002 Bonds or the interest
thereon, nor shall any Bondhdlder be entitled to payment of such principal and interest from any other funds of the
City other than the Pledged Revenues, all in the manner and to the extent provided in the Resolution. The Series
2002 Bonds and the indebtedness evidenced thereby shall not constitute a lien upon any real or personal property of
the City, or any part thereof, or any other tangible personal property of or in the City, but shall constitute a lien only
on the Pledged Revenues, all in the manner and the extent provided in the Resolution.
Pledged Revenues
The Series 2002 Bonds are limited obligations of the City payable solely from and secured by the Pledged
Revenues. All Series 2002 Bonds will be equally and ratably secured by an irrevocable lien upon and a pledge of
the Pledged Revenues. The Pledged Revenues consist of (1) Covenant Revenues deposited into the Sinking Fund
established under the Resolution, and (2) income received from the investment of moneys deposited in the funds and
accounts established under the Resolution.
"Covenant Revenues" have been defined in the Resolution to mean the legally available non -ad valorem
revenues budgeted and appropriated to pay the principal of, premium, if any, and interest on the Series 2002 Bonds.
No Covenant Revenues will be subject to the lien for the benefit of Bondholders until they are deposited into the
Sinking Fund. 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 deposit to the credit of the Sinking Fund, legally available non -ad valorem
revenues in an amount which is equal to the Bond Service Requirement with respect to the Series 2002 Bonds
outstanding under the Resolution for the applicable Fiscal Year, plus an amount sufficient to satisfy all other
payment obligations of the City under the Resolution for such Fiscal Year, including, without limitation, the
obligations of the City to fund and cure deficiencies in the Reserve Fund. 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 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,
however, 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, 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 carry over from year to year.
(OR546407; 13 } 8 02-1181
Enforcement of the City's obligation to budget and appropriate Covenant Revenues shall be through
appropriate judicial proceedings. The City may issue other bonds or debt obligations secured by a similar covenant.
See "Debt Payable From Non -Ad Valorem Revenues" herein. 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 Covenant
Revenues.
Creation of Funds and Accounts
The Resolution provides that there shall be established the: "Sinking Fund" and the "Reserve Fund" and
within the Sinking Fund there is established three separate accounts therein designated as the "Interest Account", the
"Principal Account" and the "Bond Amortization Account."
Disposition of Covenant Revenues
(1) Commencing immediately following the issuance of the Series 2002 Bonds, and continuing
thereafter so long as any Series 2002 Bonds shall be Outstanding under the Resolution, the City shall deposit to the
credit of the Funds and Accounts listed below on or before the twenty-fifth day of each month, from Covenant
Revenues, amounts which, together with funds on deposit therein, will be sufficient to satisfy the cumulative deposit
requirements described in clauses (a) and (b) below. Covenant Revenues shall be deposited in the following order
and priority:
(a) First, by deposit into the Interest Account within the Sinking Fund an amount which,
together with any other amounts required to be deposited therein pursuant to the Resolution, will equal one-sixth
(1/6) of the interest payable on the Series 2002 Bonds on the next semiannual interest payment date; by deposit into
the Principal Account within the Sinking Fund one -twelfth (1/12) of all principal maturing or becoming due during
the current Bond Year on the various Serial Bonds that mature annually; and by deposit into the Bond Amortization
Account within the Sinking Fund one -twelfth (1/I2) of the Amortization Installments and unamortized principal
balances of Term Bonds coming due during the current Bond Year with respect to the Series 2002 Bonds, until there
are sufficient funds then on deposit equal to the sum of the interest, principal and Amortization Installments due on
the Series 2002 Bonds on the next interest, principal and redemption dates in such Bond Year.
(b) Second, by deposit into the Reserve Fund, the amounts, if any, which, together with
funds on deposit therein, will be sufficient to make the funds on deposit therein, except as otherwise provided in the
Resolution, equal to the Reserve Requirement for the Series 2002 Bonds.
(c) Thereafter any remaining Covenant Revenues shall be available to the City to be used for
any lawful purpose.
(2) The deposits to the Sinking Fund described above shall be increased to the extent required to pay
principal (including Amortization Installments) and interest coming due, after taking into account deficiencies in
prior months' deposits.
(3) Deposits required pursuant to this Section shall be cumulative and the amount of any deficiency in
any month shall be added to the amount otherwise required to be deposited in each month thereafter until such time
as all such deficiencies have been cured.
(4) In lieu of or in substitution for cash or securities on deposit in the Reserve Fund, the City may
fund the Reserve Requirement with a Reserve Product issued by a Reserve Product Provider in an amount equal to
the difference between the Reserve Requirement and the sums then on deposit in the Reserve Fund. Such Reserve
Product must provide for payment on any interest or principal payment date (provided adequate notice is given) on
which a deficiency exists (or is expected to exist) in moneys held under the Resolution for a payment with respect to
the Series 2002 Bonds which cannot be cured by funds in any other account held pursuant to the Resolution and
available for such purpose, and which shall name the Paying Agent or an Authorized Depositary who has agreed to
serve as trustee for the benefit of the Bondholders as the beneficiary thereof. For additional information concerning
the Reserve Fund and the Reserve Product, see "APPENDIX B - FORM OF THE BOND RESOLUTION, AS
SUPPLEMENTED", attached hereto. The City has determined to initially fund the Reserve Requirement with
respect to the Series 2002 Bonds with the Reserve Product described below under the caption "Reserve Fund."
( O R546407;13) 9 2
1181
18
(5) The City shall not be required to make any further payments into the Sinking Fund, including the
accounts therein, and the Reserve Fund when the aggregate amount of funds in the Sinking Fund and the Reserve
Fund, including the accounts therein, are at least equal to the aggregate principal amount of the Series 2002 Bonds
issued pursuant to the Resolution and then Outstanding, plus the amount of interest then due or thereafter to become
due on the Series 2002 Bonds then Outstanding, or if all of the Series 2002 Bonds then Outstanding have otherwise
been defeased pursuant to the Resolution.
Escrow Agreement
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. 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 funds and accounts created for the Series 2002 Bonds pursuant to the Resolution.
Reserve Fund
The Reserve Fund created pursuant to the Resolution shall be held in trust only for the benefit of the
holders of the Series 2002 Bonds. The Reserve Fund shall be funded at all times in the amount of the Reserve
Requirement. The Reserve Requirement for the Series 2002 Bonds initially is $2,696,923.76, which is the
maximum annual debt service of the Series 2002 Bonds.
Concurrently with the issuance of the Series 2002 Bonds, Financial Guaranty Insurance Company
("Financial Guaranty") will issue its Municipal Bond Debt Service Reserve Fund Policy (the "Reserve Policy").
The Reserve Policy unconditionally guarantees the payment of that portion of the principal of and interest on the
bonds described therein (as used under this heading, the "Series 2002 Bonds") which has become due for payment,
but shall be unpaid by reason of nonpayment by the Issuer, provided that the aggregate amount paid under the
Reserve Policy may not exceed the maximum amount set forth in the Reserve Policy, $2,696,923.76. Financial
Guaranty will make such payments to the paying agent (the "Paying Agent") for the Series 2002 Bonds on the later
of the date on which such principal or interest is due or on the business day next following the day on which
Financial Guaranty shall have received telephonic or telegraphic notice subsequently confirmed in writing or written
notice by registered or certified mail from the Paying Agent of the nonpayment of such amount by the Issuer. The
term "nonpayment" in respect of a Series 2002 Bond includes any payment of principal or interest made to an owner
of a Series 2002 Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code
by a trustee in bankruptcy in accordance with a final nonappealable order of a court having competent jurisdiction.
The Reserve Policy is non -cancelable and the premium will be fully paid at the time of delivery of the
Series 2002 Bonds. The Reserve Policy covers failure to pay principal of the Bonds on their respective stated
maturity dates, or dates on which the same shall have been called for mandatory sinking fund redemption, and not
on any other date on which the Series 2002 Bonds may have been accelerated, and covers the failure to pay an
installment of interest on the stated date for its payment. The Reserve Policy shall terminate on the earlier of the
scheduled final maturity date of the Series 2002 Bonds or the date on which no Series 2002 Bonds are outstanding
under the authorizing document.
Generally, in connection with its issuance of a Reserve Policy, Financial Guaranty requires, among other
things, (i) that, so long as it has not failed to comply with its payment obligations under the Reserve Policy, it be
granted the power to exercise any remedies. available at law or under the authorizing document other than
(A) acceleration of the Series 2002 Bonds or (B) remedies which would adversely affect holders in the event that the
City fails to reimburse Financial Guaranty for any draws on the Reserve Policy; and (ii) that any amendment or
supplement to or other modification of the principal legal documents be subject to Financial Guaranty's consent.
The specific rights, if any, granted to Financial Guaranty in connection with its issuance of the Reserve Policy are
(OR546407;13) 10 012-1181
l2-1181
set forth in the description of the principal legal documents appearing elsewhere in this Official Statement.
Reference should be made as well to such description for a discussion of the circumstances, if any, under which the
issuer of the Series 2002 Bonds is required to provide additional or substitute credit enhancement, and related
matters.
The Reserve Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76
of the New York Insurance Law.
Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware
holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither
the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial
Guaranty is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by
the State of New York Insurance Department. As of June 30, 2002, the total capital and surplus of Financial
Guaranty was approximately $1.01 billion. Financial Guaranty prepares financial statements on the basis of both
statutory accounting principles and generally accepted accounting principles. Copies of such financial statements
may be obtained by writing to Financial Guaranty at 125 Park Avenue, New York, New York 10017, Attention:
Communications Department (telephone number: 212-312-3000) or to the New York State Insurance Department at
25 Beaver Street, New York, New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau
(telephone number: 212-480-5187).
The insurance provided by the Reserve Policy is not covered by the Florida Insurance Guaranty
Association created under Chapter 631, Florida Statutes.
Debt Payable From Non -Ad Valorem Revenues
The City will not issue any obligations (other than the Series 2002 Bonds) secured by or payable from the
Pledged Revenues, or any portion thereof, or voluntarily create or cause to be created any debt, lien, pledge,
assignment, encumbrance or other charge, in each case, having priority to or being on a parity with the lien securing
any Series 2002 Bonds issued pursuant to the Resolution upon the Pledged Revenues or any portion thereof.
The City further covenants in the Resolution not to issue or incur any other debt obligation secured by or
payable from a covenant to budget and appropriate all or a portion of the City's legally available non -ad valorem
revenues or secured by or payable from specific non -ad valorem revenues, unless the issuance of debt complies with
the following:
There shall have been obtained and filed with the Governing Body on or prior to the issuance or incurrence
of debt, that is payable from all or a portion of the legally available non -ad valorem revenues of the City, a
certificate of the Director of Finance evidencing compliance with the requirement contained in the Resolution that
the total amount of legally available non -ad valorem revenues for the prior Fiscal Year were: (i) at least 2.00 times
the aggregate maximum annual debt service of all debt (including all long-term financial obligations appearing on
the City's most recent audited financial statements and the debt proposed to be incurred) to be paid from legally
available non -ad valorem revenues (collectively, "Debt"), including any Debt payable from one or several specific
revenue sources, and (ii) so long as the Series 2002 Bonds are outstanding and if a Reserve Product is in effect, at
least 1.00 times the obligation of the City to repay any Policy Costs then due and owing to the Reserve Product
Provider.
INFORMATION REGARDING COVENANT REVENUES
Introduction
The City receives revenue from two general sources. These are ad valorem taxes and non -ad valorem
revenues. Ad valorem taxes may not be pledged for the payment of debt obligations of the City without approval of
the electorate of the City.
The other primary source of revenue for the City is non -ad valorem revenues. This includes a broad
category of revenues, including but not limited to revenues received from the State, investment income and income
produced from certain facilities of the City, as described below.
{OR546407;13) 11 02-1181
As more fully described herein, the City has covenanted, subject to certain restrictions and limitations, to
budget and appropriate sufficient non -ad valorem revenues in each year to pay debt service on the Series 2002
Bonds. As described herein, the holders of the Series 2002C Bonds do not have a lien on any non -ad valorem
revenues of the City and the City has certain other debt obligations payable in the same manner as the Series 2002
Bonds and also has outstanding certain other debt obligations payable from a prior lien upon and pledge of certain of
the non -ad valorem revenues of the City.
A large percentage of the revenues of the City, including ad valorem taxes and non -ad valorem revenues,
are deposited in the General Fund. See "CURRENT FINANCIAL STATUS OF THE CITY - General Fund" herein.
Furthermore, as described herein, under "SECURITY AND SOURCES FOR THE SERIES 2002 BONDS", 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 balanced budget.
The following describes the sources of the City's non -ad valorem revenues:
Franchise Fees 1.
Franchise fees are imposed annually on utility companies by the City in return for granting a privilege,
sanctioning a monopoly or permitting the use of public property to conduct utility business during the term of the
franchise granted by the City. 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.
Florida law authorizes any municipality iii 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 which originated or terminated within the City.
Effective October 1, 2001, this optional tax on telecommunication services was repealed, and replaced with a
separate communications services tax. See "Local Communications Services Tax" herein 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 by
the seller to the City. Such tax will appear on a periodic bill rendered to consumers for electricity, metered and
bottled gas, water service 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. Upon receipt by the City, Public Service Tax revenues
are deposited into the General Fund.
10"46407;131 12 02-1181
Local Communications Service 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 communications 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) 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, 2002, 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 5.22%. This rate was reduced from 5.62% which
was in effect for Fiscal Year 2002. The City currently anticipates that the existing rate shall remain in effect for
succeeding fiscal years. 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.
The proceeds of said local communication services tax less the Florida Department of Revenue's cost of
administration is deposited in the local communication services tax clearing trust fund and distributed monthly to the
appropriate jurisdictions, including the City. Upon receipt, such tax proceeds are deposited into the General Fund.
Licenses and Permits
These non -ad valorem revenues are derived from the issuance of local licenses and permits, including
(i) professional and occupational licenses required for the privilege of engaging in certain trades, occupations and
other activities; (ii) permits issued by the Building and Zoning Departments for construction of new buildings and
additions, construction, alterations, roofing, paving, etc. and (iii) non -business licenses and permits levied according
to the benefits presumably conferred by the license or pen -nit, i.e. fireworks permits, traffic permits and burglary
(OR546407;13) 13 02-1181
alarm permits. The City charges a fee as a condition to the issuance of a particular license or permit and such
revenues are deposited upon receipt into the General Fund.
Intergovernmental
This category of non -ad valorem revenues 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 Act" J. 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 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.
[Remainder of page intentionally left blank.]
{OR546407;131 14 02-1181
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 unincorporated 2/3 incorporated
Sales Tax receipts) area population + area population
total county + 2/3 incorporated
population area population
Municipality Share
(percentage of total Half -Cent municipality
Sales Tax receipts) 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 Miami -Dade County and the City would be reduced.
The Local Government Half -Cent Sales Tax is distributed from the Trust Fund on a monthly basis to
participating units of local government, including the City. Upon receipt, the City's allocable share of the Local
Government Half -Cent Sales Tax is deposited into the General Fund. 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 of Revenue.
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.
(OR546407;13 ) 15t , -ills
Engineering Services (includes special inspection fees, sidewalk cuts and repairs, and excavation
utilities).
Other: fees for services not specifically mentioned above, i.e., public hearing fees.
Other Revenue and Financing Sources
This category of non -ad valorem revenues includes a variety of revenues and transfers from other funds,
including:
(OR546407;13)
Interest earnings on invested funds.
Fines and forfeitures imposed by local courts.
16
The following table represents the City's determination of legally available non -ad valorem revenues for the
Fiscal Years Ending September 30, 1997 through September 30, 2001.
THE CITY OF MIAMI, FLORIDA
LEGALLY AVAILABLE NON -AD VALOREM REVENUES
FISCAL YEARS ENDED SEPTEMBER 30, 1997 THROUGH 2001
Revenues:
Franchise and Utility Taxes
Licenses and Permits:
Business Licenses and Permits
Construction Permits
Intergovernmental:
State and Revenue Sharing
Half Cent Sales Tax
Fine and Forfeitures
Other
Charges for Services:
Engineering Services
Public Safety
Recreation
Other
Interest Income
Other
Operating Transfers In('�
Component Units Transfers In
Proceeds from State of Florida
Land Sale Proceeds
Total Sources of Legally Available
Non -Ad Valorem Revenues
1997
1998
1999
2000
2001
$14,075,000
$14,419,801
$14,383,175
$10,960,340
$19,081,242
9,736,000
8,034,355
6,889,146
5,969,672
5,987,513
80,000
8,607,177
9,161,736
13,863,723
14,346,019
9,816,000
16,641,532
16,050,882
19,833,395
20,333,532
6,716,000
3,402,351
3,344,072
8,831,436
8,008,077
18,399,000
19,175,911
20,001,945
21,261,030
21,901,606
2,761,000
2,814,571
3,703,068
4,249,201
4,818,554
17,699,000
11,263,311
10,686,172
14,361,834
3,778,563
45,575,000
36,656,144
37,735.257
48,703,501
38,506,800
7,573,000
2,231,364
8,262,086
8,509,359
14,061,255
13,568,000
9,611,766
7,554,339
10,791,502
7,309,338
6,384,000
683,520
238,320
236,087
209,945
21,634,000
29,339,655
38,187,184
55,933,390
62,753,739
49,159,000
41,866,305
54,241,929
75,470,338
84,334,277
2,939,000
6,132,593
6,916,561
11,134,284
15,909,309
6,503,000
5,344,935
2,963,999
6,751,637
5,506,192
37,134,000
35,144,292
35,613,080
35,234,015
39,959,469
13,377,000
--
2,281,520
2,518,285
2,410,000
--
--
--
1,036,152
--
9,094,000
49,457,418
--
--
--
59,605,000
84,601,710
37,894,600
38.788.452
42.369.469
$187,672,000 $205,663,020 $170,186,403 $211,641,947 $226,040,821
Source: City of Miami, Florida
(') includes Public Service Tax, and Local Communications Service Tax.
1OR546407;131 17 02-1181
Set forth below is the City's historical Non -Ad Valorem Revenues and Debt Service for Fiscal Years 1997
through 2001, as well as its calculation of two -hundred percent (200%) of Debt Service evidencing compliance with
the City's anti -dilution covenant.
THE CITY OF MIAMI, FLORIDA
HISTORICAL ANTI -DILUTION TEST
YEARS ENDED SEPTEMBER 30, 1997 THROUGH 2001
1997 1998 1999 2000 2001
Non -Ad Valorem Revenues $187,672,000 $205,663,020 $170,186,403 $211,641,947 $226,040,821
Available to Pay Debt Service
Debt Service 111(2) $23,926,968 $23,919,283 $21,127,371 $21,526,990 $25,938,942
200% Debt Service $47,853,939 $47,838,566 $42,254,742 $43,053,980 $51,877,884
(')Projected Debt Service is based on the maximum estimated annual loan payments
by the City on the Sunshine State Governmental Financing Commission Loans (the
"Sunshine Loans") during the remaining fiscal years until the date of maturity of
such loans and maximum annual debt service on bonds or other debt obligations
payable from non -ad valorem revenues outstanding as of September 30th. With
respect to those Sunshine Loans constituting the Prior Notes, the City has
conservatively assumed that the Prior Notes were not repaid, and has included in -
the Debt Service numbers presented above the maximum estimated loan payments
by the City on the Prior Notes through their respective previously scheduled
maturity dates.
(Z)Variable Interest Rate Debt on the Sunshine Loans (including the Prior Notes) is
calculated at 15%, per annum which is the maximum rate pursuant to the covenants
of loan agreements securing the indebtedness of the City frorh'the Sunshine State
Governmental Financing Commission.
Source: City of Miami, Florida
{OR546407;13 } 18 q
02-1181
The following table represents current debt service on obligations payable from legally available non -ad valorem revenues as of August 31, 2002.
THE CITY OF MIAMI, FLORIDA
SCHEDULE
OF PRINCIPAL AND INTEREST
FOR NON -AD VALOREM REVENUE BONDS AND LOANS
$6,500,000
$72,000,000
$4,290,000
Special Ob.
$18,000,000
$15,190,000
$30,000,000 $3,500,000
$22,000,000
Special Ob.
$11,500,000
$13,170,000
Fiscal
$65,271,325
Special
$27,630,000
Guaranteed
Special Ob.
SSGFC
SSGFC SSGFC
Special Ob.
Non -Ad Val.
Comm
Sp. Ob. Non-
Total
Year
Special Rev.
Ob. Bonds
SSGFC
Ent.
Non -Ad Val.
Com Paper
Com Paper Secondary
Non -Ad Val.
Tax Rev. Grand
Redev.
Ad. Val. Rev.
Principal
Ending
Ref. Bonds
Series
Loans
Bonds,
Rev. Bonds
Program
Program Loan
Rev. Bonds
Pension Bond Central
Bonds,
Ref. Bonds,
and
9/30
Series 1987
1986A
1988
Series 1989
Series 1994
1994*
1995' 1995
Series 1995
Series 1995 Loan
Series 1990
Series 2002B
Interest
2002
$5,894,400
$412,794
$3,725,155
$609,800
$1,523,129
$617,000
$4,769,750 $587,250
$1,631,480
$5,810,509
$357,675
$210,000
$26,148,942
2003
5,896,260
411,406
3,621,645
609,950
1,525,879
594,250
4,687,000 570,250
1,635,730
5,808,478
357,900
3,800,000
29,518,748
2004
5,900,000
408,544
3,516,935
608,350
1,525,648
570,750
4,599,000 556,750
1,633,855
5,810,646
357,275
1,840,000
27,327,753
2005
5,900,000
409,206
3,401,675
610,000
1,527,335
546,500
4,510,750 536,000
1,635,855
5,811*1
355,800
1,885,000
27,129,59''
2006
5,900,000
408,025
3,280,715
609,550
1,525,355
521,500
4,416,500 518,750
1,636,730
5,810,590
353,475
1,940,000
26,921,1
2007
5,900,000
-
3,150,155
612,000
1,525,030
500,750
4,316,250 499,250
1,635,835
5,807,640
355,300
2,000,000
26,302,210
2008
5,895,000
-
3,014,545
607,000
1,525,990
473,500
4,215,000 472,500
1,637,600
5,808,165 $1,708,864
355,850
1,495,000
27,209,014
2009
5,896,205
-
2,867,685
609,900
1,522,850
445,500
4,107,000 454,250
1,637,073
5,811,794
358,125
23,707,382
2010
5,894,295
2,714,125
--
1,525,500
421,750
3,997,250 428,000
1,639,320
5,812,210
354,425
22,790,575
2011
5,896,668
2,550,665
--
1,527,100
391,500
3,880,000 399,500
1,639,140
5,810,435
354,450
22,449,433
2012
5,615,180
2,376,705
--
1,524,500
365,500
3,755,250- 373,750
1,645,650
5,810,785
357,775
--
21,821,770
2013
5,620,336
--
1,522,700
333,000
3,628,000
1,643,800
5,810,985
358,975
-
18,916,596
2014
5,547,336
-
--
1,526,400
304,750
3,497,500
1,644,400
5,810,335
358,050
18,689,696
2015
5,165,000
--
--
--
--
--
3,353,000
1,647,450
5,808,135 -
--
16,331,635
2016
-
-
--
--
3,210,000
1,647,650
5,808,510
10,666,410
2017
-
-
-
-
-
3,182,750
1,649,850
5,812,300
10,644,900
2018
-
-
-
-
3,136,000
1,653,900
5,808,240
10,598,890
2019
-
-
3,070,750
1,654,500
5,807,980
10,533,230
2020
--
--
--
--
--
2,978,250
1,656,500
5,810,080
10,444,830
2021
--
--
--
--
--
-
2,863,500
1,659,750
5,808,280
10,331,500
2022
-
-
--
1,658,950
5,811,140.
7,470,0
2023
-
-
1,663,950
5,812,040
7,475,990
2024
--
--
--
--
--
--
--
1,664,450
5,809,540
7,473,990
2025
--
--
--
--
--
--
--
1,665,150
5,811,840
7,476,990
2026
--
5,811,960
5,811,960
Total
$80,920,680
$1049.975
$34,220,005
$4,876,550
$19,826,416
$6,086,250
$76,174,500 $5,396,25 96,250
$39,518,568
$145,254,088 $1,708,864
$4990.200
$13,170,000
$434,193,346
*These are the Prior
Notes, which
were repaid
with the
interim obligation, which
interim obligation is being repaid with the proceeds of the Series
2002 Bonds. See "PURPOSE OF
C: THE ISSUE" herein.
zz
1 As described herein,
the obligation
and the ability
of the City to budget and appropriate non -ad valorem revenues
is subject to a variety of factors,
including the obligation
of the City
to provide essential governmental services and the obligation of the City to have a balanced budget.
GOSource: City of Miami, Florida
{OR546407;13 } 19
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 born. 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," and "APPENDIX C — GENERAL
PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED
SEPTEMBER 30,2001."
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 of the City.
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 Expires
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 $500 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 Bachelor's Degree in Public
Administration from Barry University. Mr. Gimenez has recently announced his resignation as City Manager,
effective January 6, 2003. The City is conducting a national search for the City Manager position.
The City'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 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 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
(OR546407;13) 20
02-1
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.
Proposed Reorganization
On October 15, 2002, Mayor Diaz announced a proposal for a new organizational structure for the City (the
"Proposed Plan"). The Proposed Plan was submitted to the City Commission on October 29, 2002. The Proposed
Plan has not been approved, is subject to further review, and any reorganization adopted by the City may be
different from the Proposed Plan. See Appendix G - "Proposed- Reorganization Plan" attached hereto for a copy of
the Mayor's press release describing the Proposed Plan.
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 such 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 $65 million and the internal service
funds had negative retained earnings of over $7 million. In its 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 $21.8 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 Govemor 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 was developed by the City and approved by the FOB to eliminate the $68 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, which 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 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
IOR546407;13) 21 02-1181
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 10(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. Odic, 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") issued 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 (17(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.
In 1997, the City filed a professional 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 currently has four department head positions vacant
awaiting appointment of the City Manager. See "THE CITY OF MIAMI - Proposed Reorganization" herein. The
{OR546407;131 22
v2 -x.181
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) Interf ind 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 satisfactory. Since the date of the report, the City has taken steps to improve
those areas identified.
On July 1, 2002, the City's Auditor issued its report for the period October 1, 2000 through September 30,
2001. Once again, the City Auditor's report concluded that the City's adherence to the Financial Integrity Ordinance
was satisfactory. The City Auditor's report did indicate that the City needs to improve some areas, such as filing for
reimbursements on a timely basis, and the need to enhance the process of identifying City programs intended to
benefit from state and federal grants on a timely basis. The City Auditor's report further indicated a significant
improvement in the timeliness of financial reporting by the City. The City is taking steps, which include the hiring
of additional staff, to address the areas identified in the report.
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:
FY 2002 FY 2003 FY 2004 FY 2005
Revenues
General Fund $326,897,785 $334,590,402 $343,475,342 $355,911,253
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 $525,883,673 $523,984,500 $535,850,813
Expenditures
General Fund $326,897,785 $334,590,402 $343,475,342 $355,911,253
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 $525,883,673 $523,984,500 02-1181
�$535,850,813
V
{OR546407;131 23 2- 1 1 8 1
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 (the "Investment Policy"), that
applies to all cash and investrpents 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 primary objective of the Investment Policy is the safety of the principal of those funds subject to the
Investment Policy. Investment transactions must 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 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.
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,
0) 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 derivative investment product is small
to the total dollar amount invested by the investment product.
The City's investment policy may be modified from time to time by the City Commission.
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.
{OR546407;131 24 02-1181
2-1♦81
As of August 31, 2002, approximately 81.15% of the City's investment portfolio was invested in United
States Treasury Obligations and obligations of agencies of the United States Government. Approximately 18.85% 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 finance 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 who 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 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 improvement 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
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 a portion of the capital improvement plan. Such capital improvement plan
shall be implemented subject to the approval of the City Commission. See "FUTURE BORROWINGS" herein.
Information Technology
Improvements in the City's information technology 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.
IOR546407;13 } 25
For the past two 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, Government Finance Officers Association and
Florida Government Finance Officers Association and has prepared internally a pro forma GASB 34 Model. The
City believes the implementation of GASB 34 will proceed as scheduled.
General Fund
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.]
{0R546407;13, 26 02-1181
Summary Schedule of Revenues, Expenditures and Changes in Fund Balance(Deficit)
for the General Fund and Fund Balance (Deficit) Beginning of Year
(1) Includes pension contributions of $12,725,420.
(2) Includes interest charges of $5,285,000.
(3) Includes proceeds from land sales of $9,094,000.
(4) Includes proceeds from land sales of $49,457,418
Source: City of Miami, Florida
{OR546407;13} 27 02-1181
Fiscal Year Ended September 30'b
Revenues
1997
1998
1999
2000
2001
Taxes
$105,493,000
$108,172,648
$120,781,649
$120,426,167
$119,683,851
Franch.Fees/Other Taxes
14,075,000
14,419,801
14,383,175
10,960,340
19,081,242
Licenses and permits
9,816,000
16,641,532
16,050,882
19,833,395
20,333,532
Intergovernmental
42,814,000
33,841,573
34,032,189
44,454,300
33,688,246
Charges for services
50,387,000
41,866,305-
54,241,929
75,470,338
84,334,277
Fines and forfeitures
2,761,000
2,814.571
3,703,068
4,249,201
4,818,554
Interest
2,939,000
6,132,593
6,916,561
11,134,284
15,909,309
Other
6,503,000
18,070,355'1
2,963,999
6,751,637
5,506,192
Total Revenues
$233,560,000
$241,959,378
$253,073,452
$293,279,662
$303,355,203
Expenditures
General government
$61,743,000
$18,022,017
$20,509,297
$23,025,280
$24,592,817
Planning & development
3,714,000
5,330,525
5,481,237
5,041,707
5,759,424
Public works
31,142,000
35,728,747
38,799,233
37,015,471
40,975,451
Public safety
107,127,000
116,894,329
126,287,513
135,173,374
132,844,965
Public facilities
7,337,000
3,556,522
3,819,893
4,379,971
4,547,020
Parks and recreation
6,770,000
6,994,947
8,221,325
8,746,720
9,358,344
Pensions
29,436,000
35,777,750
13,780,194
16,066,694
18,653,241
Organizational support
--
--
17,556,879
21,341,763
23,148,843
Risk management
--
21,631,701
21,393,616
27,224,122
33,305,868
Other
13,240,000121
Non -departmental
--
23,560,648
4,373,074
3,083,482
7,891,729
Total Expenditures
$260,473,000
$267,497,186
$260,222,261
$281,098,584
$301,077,702
Excess (Deficiency) of
Revenues Over (Under)
Expenditures
(26,913,000)
(26,537,808)
(7,148,809)
12,181,078
2,277,501
Other financing sources
and (uses):
Operating transfers in
59,605,00031
84,601,71041
37,894,600
37,752,300
42,369,469
Operating transfers out
(9,041,000)
(29,868,163)
(28,054,155)
(13,985,4730)
(32,934,411)
Total other financing
sources, net
50,564,000
54,733,547
9,840,455
23,766,827
9,435,058
Excess of Revenues and
Other Financing Sources
Over Expenditures and
Other Financing Uses
23,651,000
29,195,739
2,691,636
35,947,905
11,712,559
Fund balance (deficit) at
beginning of year
(21,816,000)
1,835,000
40,973,658
43,039,538
75,466,134
Equity transfers in (out)
--
9,942,919
(625,756)
(3,521,309)
(13,662)
Fund balance at end of
year
$1,835,000
$40,973,658
$43,039,538
$75,466,134
$87,165,031
(1) Includes pension contributions of $12,725,420.
(2) Includes interest charges of $5,285,000.
(3) Includes proceeds from land sales of $9,094,000.
(4) Includes proceeds from land sales of $49,457,418
Source: City of Miami, Florida
{OR546407;13} 27 02-1181
Recent Financial Developments
The City's Fiscal Year 2002 Budget was adopted on September 25, 2001. The Fiscal Year 2002 Budget
has been amended to date to increase the Fiscal Year 2002 Budget from $319.5 million to $331 million. Such
amendments were a combination of recurring and non-recurring changes as a result of various actions taken by the
City Commission. The most significant changes resulted from a change in the financial presentation of the fire fee
exemptions, increases in appropriation and personnel for the fire department and the appropriation of management
reserve balances to cover pre-existing special revenue fund deficits. Due to the events of September 11, 2001, the
City provided for additional funding for risk management in the amount of $2.7 million and the police department in
the amount of $500,000. Further, the solid waste department anticipates an increase in the amount of $1.8 million
for costs associated with trash collection due to scale fees and the Mayor's "Clean Up Miami" initiative. The City
also expects to recognize an additional $12 million in parking surcharge revenues and an additional $8 million from
local communication services tax revenues.
The Fiscal Year 2002 Budget did not differ significantly from the Fiscal Year 2001 Budget. However,
there was a significant chan& in the police department's sworn personnel due to a reduction of 95 vacant sworn
police officer positions in their general fund budget. There was a $7 million overall decrease in expenses throughout
the City's departments and a larger than expected increase in property tax revenues of approximately $10 million
between Fiscal Year 2001 and Fiscal Year 2002. Additionally, no parking surcharge was included in the Fiscal
Year 2002 Budget.
In Fiscal Year 2001, there was a decrease in property tax revenue because of a reduction of the City's
millage rate during that year from 9.50 to 8.995 mills. In addition, revenues over expenditures decreased by
$9,903,577 primarily due to a $6 million decrease in a federal grant for the training -of police officers. In Fiscal Year
2002, although the millage rate remained the same, property tax revenues increased as a result of an increase in the
assessed values. Fiscal Year 2001 was the first year of the Save our Seniors program, which provides an additional
homestead exemption of up to $25,000 for persons age 65 and over, with an impact of $2.2 million.
The above -referenced developments are the only recent financial developments since the date of the
Audited Financial Statements attached hereto as Appendix C.
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 a 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 $3,300,000 in such fund.
{OR546407;131 28
02-
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)
*IBNR - incurred but not reported.
Source: The City of Miami, Florida
Health Insurance
Change
$ 862
1,132
493
382
266
2,724
$5,859
The City has a group accident and health policy whose premiums are tied to the 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 any one 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.
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
(OR546407;13) 29 02-1181
Estimated
Selected
Policy
Selected
Reported
Paid
Total
Case
IBNR*
Ultimate
Year
Ultimate
Amounts
Amounts
Reserve
Reserve
Reserve
9/00
1996
$11,994
$ 6,940
$ 5,820
$ 5,308
$1,120
$ 5,054
$11,132
1997
10,985
5,811
4,770
6,215
1,041
5,175
9,853
1998
8,769
4,247
3,461
5,308
787
4,521
8,275
1999
9,484
3,709
2,837
6,647
872
5,775
9,102
2000
11,041
4,089
2,644
8,397
1,445
6,953
10,775
2001
13,746
5,622
1,284
12,462
4,338
8,125
11,022
Total
$66,019
$30,418
$20,816
$45,203
$9,603
$35,603
$601.59
*IBNR - incurred but not reported.
Source: The City of Miami, Florida
Health Insurance
Change
$ 862
1,132
493
382
266
2,724
$5,859
The City has a group accident and health policy whose premiums are tied to the 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 any one 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.
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
(OR546407;13) 29 02-1181
the earlier of: (a) the estimated useful life of the capital improvements being financed, (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 August 31, 2002, including that which is payable from sources
other than ad valorem taxes.
Special Obligation and Revenue Bonds:
Special Revenue Refunding Bonds, Series 1987
Amount
Outstanding
DESCRIPTION
Issued
Balance
General Obligations:
18,000,000
745,000
Public Parks & Recreational Facilities, Series 1977
$14,040,000
$550,000
Storm Sewer, Housing, Fire Fighting, Series 1981
9,150,000
2,195,000
General Obligation Ref inding:Bonds, Series 1992
70,100,000
39,390,000
General Obligation Refunding Bonds, Series 1993
31,860,000
21,880,000
General Obligation Refunding Bonds, Series 2002
32,510,000
32,510,000
General Obligation Bonds, Series 2002A
153,186,406
153,186,406
Total General Obligation Bonds
$310,846,406
$249,711,406
Special Obligation and Revenue Bonds:
Special Revenue Refunding Bonds, Series 1987
$65,271,325
$39,540,022
Community Entitlement Rev. Bonds, Series 1990
11,500,000
2,855,000
Special Non -Ad Valorem Rev. Bonds, Series 1994
18,000,000
745,000
Special Obligation Non -Ad Valorem Revenue Bonds, Series 1995
22,000,000
4,300,000
Special Obligation Non -Ad Valorem Revenue Bonds, Series 1995
72,000,000
66,745,000
Special Obligation Non -Ad Valorem Revenue Refunding Bonds,
Series 2002A
27,895,000
27,895,000
Special Obligation Non -Ad Valorem Revenue Refunding Bonds,
Series 2002B
13,170,000
13,170,000
Total Special Obligation and Revenue Bonds
$229,836,325
$155,250,022
Loans:
Sunshine State Gov. Financing Commission Loans
Revenue Bond Program $27,630,000 $16,068,300
Commercial Paper Program* 15,190,000 2,695,000
Commercial Paper Program* 30,000,000 25,780,000
Section 108 HUD Loan 5,100,000 4,500,000
Section 108 HUD Loan 2,500,000 1,050,000
Section 108 HUD Loan - Wynwood Foreign Trade Zone, Inc. 5,500,000 4,540,000
Sunshine State Gov. Financing Commission — Secondary Loan 3,500,000 2,535,000
Grand Central Corporation Loan 1,708,864 1,708,864
Total Loans $91,128,864 $58,877,164
Total Debt $631,811,595 $463,838,592
*These loans are the Prior Notes that were repaid with the proceeds of an interim obligation, which interim
obligation is being repaid with the proceeds of the Series 2002 Bonds. See "PURPOSE OF THE ISSUE" herein.
Other Obligations
Pension Plans. 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 Trust ("GESE"). The plans cover substantially all City employees who
contribute a percentage of their base salary or wage on a bi-weekly basis.
1OR546407;131 30 02-1181
12_.118
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 called 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 GESE 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 of market value. The Pension Ordinance also provides for the FIPO Board of Trustees'
actuary to use the actuarial assumptions adopted by 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 a normal cost contribution of $5.5 million in October 2001, 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 $52,219,028. 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.
RECENT BORROWINGS
The City Commission approved $255 million of limited ad valorem tax bonds by Ordinance No. 12137
enacted on October 11, 2001 and the citizens approved such bonds by referendum on November 13, 2001. In
August, 2002, the City issued its first series of limited ad valorem tax bonds in the amount of $153,186,406. Such
limited ad valorem tax bonds are secured, to the extent necessary, by a covenant to budget and appropriate non -ad
valorem revenues in an amount not to exceed 10% of the Maximum Annual Debt Service (as defined in the
resolution authorizing such bonds) on such bonds in any given Fiscal Year. The next series of limited ad valorem
tax bonds is anticipated to be issued in 2005. The proceeds will be used for acquiring, constructing and improving
parks, streets and drainage and quality of life, historic preservation improvements, and homeland security capital
projects all of which are expected to be included in the City's capital improvement plan.
LEGAL MATTERS
Certain legal matters incident to the validity of the Series 2002 Bonds are subject to the approval of
Akerman, Senterfitt & Eidson, P.A., Bond Counsel, Miami, Florida whose approving opinion in the form attached
hereto as "APPENDIX D —FORM OF BOND COUNSEL OPINION" will be furnished 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
Akerman, Senterfitt & Eidson, P.A., Miami, Florida, Disclosure Counsel to the City.
(OR546407;13) 31 02-1181
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
assessment or imposition of non -ad valorem taxes, fees and charges 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.
Parking_ Surcharge Ordinance Litigation. 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 appealed to the Supreme
Court of Florida, oral argument was held in February 2002 and the Supreme Court ruled on July 11, 2002, that the
statute was unconstitutional and the case was remanded to the Third District Court of Appeal for further
proceedings. 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. On October 11, 2002, the City Commission approved
a settlement pursuant to which the City is required to contribute no more than $8,000,000 to a settlement fund (the
"Settlement Fund"). The proposed settlement is subject to court approval. The City has previously reserved
approximately $4,600,000 which will be applied towards the City's deposit to the Settlement Fund. The City
currently anticipates applying surplus revenues from Fiscal Year 2002 to satisfy its remaining deposit obligation to
the Settlement Fund. The application of such surplus revenues will not materially adversely affect the City's
financial condition.
Fire Rescue Assessment Litigation. 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 similar 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. 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. The decision of the Fourth Circuit Court of Appeals was appealed to the
Florida Supreme Court, and the Florida Supreme Court recently held that the City of North Fort Lauderdale's fire
rescue assessment was unconstitutional to the extent that it included a charge for emergency medical services. The
City's Assessment for the 1999 and 2000 Fiscal Years included a charge for emergency medical services.
Assessments in subsequent Fiscal Years did not. Litigation is continuing regarding the amount, if any, of
Assessments attributable to emergency medical services for the 1999 and 2000 Fiscal Years that the City may be
required to refund. The City could be required to return as much as $27 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
{ OR546407; t 3 } 32
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 reasonable investor.
TAX (MATTERS
The Internal Revenue Code of 1986, as amended (the "Code") establishes certain requirements which must
be met subsequent to the issuance and delivery of the Series 2002 Bonds for interest thereon to be and remain
excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause
the interest on the Series 2002 Bonds to be included in gross income for federal income tax purposes retroactive to
the date of issue of the Series 2002 Bonds. Those requirements include, but are not limited to, provisions which
prescribe yield and other limits within which the proceeds of the Series 2002 Bonds and other amounts are to be
invested and require, under certain circumstances, that certain excess investment earnings on the foregoing must be
rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the
Resolution to comply with each such requirement.
In the opinion of Bond Counsel, assuming, continuous compliance by the City with the Code and the
covenants in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and
subject to the conditions described below, interest on the Series 2002 Bonds is excludable from gross income for
federal tax purposes. Bond Counsel is further of the opinion that interest on the Series 2002 Bonds is not an item of
tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,
although such interest is taken into account in determining adjusted current earnings for the purpose of computing
the alternative minimum tax on corporations. Failure by the City to comply subsequent to the issuance of the Series
2002 Bonds with certain requirements of the Code regarding the use, expenditure and investment of Series 2002
Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may
cause interest on the Series 2002 Bonds to become included in gross income for federal income tax purposes
retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the
Code necessary to, among other things, maintain the exclusion from gross income of interest on the Series 2002
Bonds. In rendering its opinion, Bond Counsel has -assumed continuing compliance with such covenants.
The opinion on federal tax matters will be based on and will assume the accuracy of certain representations
and certifications and compliance with certain covenants of the City 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 the certifications and representations made by the City.
Prospective purchasers of the Series 2002 Bonds should be aware that ownership of the Series 2002 Bonds
may result in other federal tax consequences to certain taxpayers.
In the opinion of Bond Counsel, the Series 2002 Bonds are exempt from all present intangible personal
property taxes imposed pursuant to Chapter 199, Florida Statutes.
Interest on the Series 2002 Bonds may be subject to state or local income taxation under applicable state or
local laws in other jurisdictions. Purchasers of the Series 2002 Bonds should consult their tax advisors as to the
income tax status of interest on the Series 2002 Bonds in their particular state or local jurisdictions.
During recent years, legislative proposals have been introduced in Congress, and in some cases, enacted,
that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series
2002 Bonds. In some cases these proposals have contained provisions that altered these consequences on a
retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations
similar in nature to the Series 2002 Bonds. From time to time, legislative proposals may be introduced which could
have an effect on both the federal tax consequences resulting from the ownership of the Series 2002 Bonds and their
market value. No assurance can be given that any such legislative proposals, if enacted, would not apply to, or
would not have an adverse effect upon, the Series 2002 Bonds.
Tax Treatment of Original Issue Discount
Under the Code, the difference between the stated principal amounts of the Series 2002 Bonds maturing on
October 1, 2004 and October 1, 2006 through 2017, inclusive, and the initial offering price to the public, excluding
bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at
{OR546407;13 } 33
02-1181
which price a substantial amount of Series 2002 Bonds of the same maturity was sold is "original issue discount."
Original issue discount will accrue over the term of such Series 2002 Bonds. A member of the public who acquires
such Series 2002 Bonds in the initial offering at a price equal to the initial offering price thereof as set forth on the
inside cover of this Official Statement will be treated as receiving an amount of interest excludable from gross
income for federal income tax purposes equal to the original issue discount accruing during the period he or she
holds such Series 2002 Bonds, and will increase his or her adjusted basis in such Series 2002 Bonds by the amount
of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such
Series 2002 Bonds. The federal income tax consequences of the purchase, ownership, sale, or other disposition of
Series 2002 Bonds which are not purchased in the initial offering at the initial offering price may be determined
according to rules which differ from those above. Owners of such Series 2002 Bonds should consult their own tax
advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale or
other disposition of Series 2002 Bonds and with respect to the state and local tax consequences of owning and
disposing of Series 2002 Bonds.
Tax Treatment of Bond Premium
The difference between the principal amount of the Series 2002 Bonds maturing on October 1, 2003 and
the initial offering price to the public (excluding bond houses, brokers or similar persons or organizations acting in
the capacity of underwriters or wholesalers) at which price a substantial amount of such Series 2002 Bonds of the
same maturity was sold constitutes, to an initial purchaser, amortizable bond premium which is not deductible from
gross income for federal income tax purposes. The amount of amortizable bond premium for a taxable year is
determined actuarially on a constant interest rate basis over the term of such Series 2002 Bond. For purposes of
determining gain or loss on the sale or other disposition of such a Series 2002 Bond, a purchaser of such Series 2002
Bond at an initial offering price is required to decrease such purchaser's adjusted basis in such Series 2002 Bond
annually by the amount of amortizable bond premium for the taxable year.
Prospective purchasers of the Series 2002 Bonds (or book entry interest in such Bonds) should consult their
own tax advisers as to the determination for federal income tax purposes of the amount of bond premium properly
accruable in any period with respect to the Series 2002 Bonds and as to other federal tax consequences and the
treatment of bond premium for state and local tax purposes.
RATINGS
Moody's Investor's Service ("Moody's"), Fitch Ratings ("Fitch") and Standard & Poor's Ratings Group
("S&P") have assigned their municipal bond ratings of "Aaa," "AAA" and "AAA," 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.
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.
FINANCIAL ADVISOR
The City has retained RBC Dain Rauscher, Inc. as 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 Advisor
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 C — GENERAL PURPOSE AUDITED FINANCIAL
STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED 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. Such statements
{ OR546407;13 } 34 02-1181
speak only as of September 30, 2001. Except as otherwise disclosed herein, there have been no material adverse
changes in the financial position of the City since the date of the Audited Financial Statements.
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 $27,764,347.44 (the par amount of the
Series 2002 Bonds, less net original issue discount of $92,873.25, less Underwriters' discount of $167,779.31). The
Underwriters' obligations are subject to certain conditions precedent described in the Bond Purchase Agreement
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, Financial Advisor and 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.
The remedies available to the owners of the Series 2002 Bonds upon an event of default under the
Resolution and the 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 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 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 F -- 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 15c2-12
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
{OR546407;131 35 02-1181
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 these 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.
[Remainder of page intentionally left blank.]
(OM46407;13) 36 02-1181
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 effect 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 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
LM
(OR546407,13) 37 02-1181
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'spopulation 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 of 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
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.
City elections 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 terms. 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. See also, "THE CITY OF MIAMI - Proposed
Reorganization" in the Official Statement, and "APPENDIX G - PROPOSED REORGANIZATION PLAN"
attached hereto.
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.
{OR546407;13} 02-
1181
g81
City of
Percent
Miami -Dade
Percent
State of
Percent
Year
Miami
Change
County
Change
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
348,865
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
2,253,352
16.3
15,982,378
23.5
2010
N/A
N/A
2,196,100
-2.5
17,760,000
2015
N/A
N/A
2,173,300
-1.0
18,690,300
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.
City elections 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 terms. 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. See also, "THE CITY OF MIAMI - Proposed
Reorganization" in the Official Statement, and "APPENDIX G - PROPOSED REORGANIZATION PLAN"
attached hereto.
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.
{OR546407;13} 02-
1181
g81
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 learning. 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
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-
tOR546407;131 A-2 02 -1181
2 -♦1Q4
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 2001 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
$4.8 billion expansion to service 39 million passengers through 2015.
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 1992 to 2001, the number of passengers sailing from the Port
increased from 3,095,487 to 3,391,091, an increase of 10%. 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 $64.5 million in
1999. With tighter fiscal control, new long-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, $346 million capital improvement program.
Economy
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:
The Gap, Inc. Barclays Bank PLC Sony Latin America
Caterpillar Americas Co. IBM Corporation Mercedes Benz Latina
Les Must de Cartier International Epson Latin America AIB Financial Group
Federal Express Corporation Oracle Corporation Eastman Chemical Latin America
Ericsson, Inc. Canon Latin America Sanofi Beaute Miami
Eastman Chemical Latin America Credit Lyonnais Nera Latin America
Lucent Technologies ABN AMRO Bank Volkswagen Group Latin America, Inc.
Telefonica International USA, Inc. Acer Latin America Olympus America
Polaroid Corporation Telia Swedtel
{OR546407;13} A-3 0 04-1181
Distribution of Major Employment Classifications
for City of Miami, Florida
Source: Miami -Dade County, Florida
Percentage
Occupational Title
Employees
of Total
Executive/Managerial
13,215
8.7
Professional
13,065
8.6
Technician
3,573
2.4
Sales
17,378
11.5
Administrative Support including Clerical
22,618
14.9
Private Household
2,784
1.8
Protective Services
3,060
2.0
Other Service Occupations
25,037
16.5
Farming, Forestry & Fishing
2,830
2.0
Precision Production, Craft and Repair Occupations
18,471
12.1
Machine Operators; Assemblers and Inspectors
13,448
8.9
Transportation & Material Moving Occupations
6,891
4.6
Handlers, Equipment Cleaners, Helpers and Laborers
9,076
6.0
Total Employed
151,446
100.0
Source: Miami -Dade County, Florida
(OM46407;13 ) A-4 2
Labor Force and Employment Statistics
City of Miami, Florida
Civilian Unemployment
Florida
Period
Employment
Labor Force Rate
Unemployment Rate
1997
163,174
181,785 10.4%
4.8
1998
162,951
179,732 7.3
4.3
1999
165,324
180,502 8.4
3.9
2000
167,648
181,589 7.7
3.6
Source: University of Florida, Florida Statistical Abstract 2001
(OM46407;13 ) A-4 2
Major Employers
Public Employers: Number of Employees
Name
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:
Name
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
21400
United Parcel Service
2,400
Miami Herald Publishing
2,108
Source: The Beacon Council -2000/2001 Miami Business Profile
Miami, Florida
Bank Deposits, 1996 - 2001
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
international 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.
10"46407;131 A-5
02-1181
June 30
2001
2000
1999
1998
1997
1996
Number of Banks
72
72
69
67
69
72
Total Deposit
$45,064,000,000
40,543,000,000
39,633,149,000
28,996,024,000
28,229,233,000
26,748,125,000
Source: (1) F.D.I.C. was not available. This data was providedby the Florida Bankers Association.
Record of Building Permits, 1997 through 2000
City of Miami, Florida
Fiscal Year
1997-98
1998-99
1999-00
(through 6/20/00)
Commercial
Buildine Permits
3,199
2,918
2,370
Source: City of Miami, Florida
Estimated Cost
$322 million
$697 million
$302 million
Residential
Buildine Permits
4,285
4,552
3,631
Per Capita Personal Income
Estimated Cost
$44.2 million
$50.5 million
$33.0 million
Year Miami(l)
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
(1) Data is for Metropolitan Statistical Area
Millage Rates
The following table shows millage rates for the City for fiscal years ending September 30, 1993 through
September 30, 2002.
{ OR546407;13 } A-6
02-1181
The City of Miami, Florida
Property Tax Rates
Fiscal Year
City Operations
Debt Servicell]
Total
2002
8.9950
1.2180
10.2130
2001
8.9950
1.2800
10.2750
2000
9.5000
1.4000
10.9000
1999
10.0000
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
['3 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
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
Year
Property
Property
Total
Exemptions
Value
2002']
$14,619,965,442
$1,758,100,101
$16,378,065,543
$1,031,970,914
$15,346,094,629
2001
13,143,276,381
1,657,551,519
14,800,827,900
1,029,461,571
13,771,366,329
2000
12,655,367,383
1,750,211,283
14,405,578,666
1,022,522,356
13,383,056,310
1999
12,054,384,369
1,334,992,653
13,389,377,022
1,013,367,239
12,376,009,783
1998
11,3 83,265,849
1,329,476,797
12,712,742,646
1,015,773,092
11,696,969,554
1997
11,039,083,007
1,323,876,600
12,362,959,607
1,013,566,813
11,349,392,794
1996
10,702,353,382
1,301,197,462
12,003,550,844
1,012,060,207
10,991,490,637
1995
10,232,545,197
1,264,806,533
11,497,351,730
1,007,531, 594
10,489,820,136
1994
9,991,788,807
1,241,431,753
11,233,220,560
1,006,367,133
10,226,853,427
1993
10,216,460,668
1,258,998,820
11,475,459,488
1,005,657,230
10,469,802,258
In addition, on July 1, 2002, the Miami -Dade County Property Appraiser's Office certified the assessed
value of taxable property for Fiscal Year 2003 in the amount of $17,316,928,299.
Source: Miami -Dade County Property Appraiser's Office
E'1 Subject to final adjustment
{OR546407;13} A-7 02-1181
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 taxes 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.
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.]
{OR546407;13 } A-8
02--118
(1)
(2)
Tax Levies and Collections
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
Includes levies for general operations and debt service.
Net of reserve of approximately 5% of total tax levy.
Source: The City of Miami, Florida
{OM46407;13} A-9 02-1181
Collection
Percent
Collection of
Fiscal
Total Tax
of Current.
of Levy
Delinquent
Year
Levy('I
Year's Taxes
Collected
Taxes
2001
$141,425,410
$134,535,715
95.13%
$2,291,707
2000
142,932,314
136,028,063
95.17
2,255,654
1999
145,913,155
143,515,000
98.36
2,522,000
1998
134,743,241
127,911,000
94.93
2,496,000
1997
132,850,000
128,783,000
96.94
2,990,000
1996
128,661,000
120,519,000
93.67
2,945,000
1995
120,805,000
115,936,000
95.97
3,707,000
1994
125,169,000
113,966,000
91.05
5,754,000
1993
130,702,000
115,746,000
88.56
5,631,000
1992
128,832,000
118,396,000
91.90
5,780,000
Total
Outstanding
Collections
Outstanding
Delinquent
Fiscal
Total Tax
as % of
Delinquent
Taxes as % of
Year
Collections
Levy
Taxes 121
Current Lew
2001
$136,827,422
96.7500
$2,255,654
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
1994
119,720,000
95.6467
1,673,000
4.35
1993
121,377,000
92.6854
3,942,000
7.13
1992
124,176,000
96.3860
5,077,000
3.61
Includes levies for general operations and debt service.
Net of reserve of approximately 5% of total tax levy.
Source: The City of Miami, Florida
{OM46407;13} A-9 02-1181
Taxpayer
SRI AETNA Life Insurance Co.
Florida Power & Light
Metropolitan Life Insurance
Bellsouth
Prudential Insurance Co.
Brickell Associates
Cedeara Healthcare Group LTD
NOP LLC
Brickell Equities Corp.
Brickell Square
All Others
TOTAL
Ten Largest Tax Assessments
2001 Assessed Values
Nature of
Assessed
Activity
Value
Percent
Real Estate Investments
$178,100,000
1.20%
Utility
149,163,031
1.01
Real Estate Investments
135,950,000
0.92
Utility
133,972,769
0.91
Real Estate Investments
117,000,000
0.79
Office Building
83,000,000
0.56
Medical
60,750,852
0.41
Real Estate Investments
60,100,000
0.41
Real Estate Investments
57,015,028
0.39
Office Building
51,190,595
0.35
Various
13,774,585,625
93.07
$14,800,827,900
100.00%
APPENDIX B
FORM OF THE BOND RESOLUTION, AS SUPPLEMENTED
RESOLUTION NO. _
A RESOLUTION OF THE CITY OF MIAMI, FLORIDA, AMENDING
RESOLUTION NO. 02-1057 BY AMENDING THE DEFINITION OF
REFUNDED BONDS AND UNDERWRITERS AND MAKING CERTAIN
ADDITIONAL AMENDMENTS CONSISTENT WITH SUCH
CHANGES; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI, FLORIDA AS
FOLLOWS:
WHEREAS, the City Commission of The City of Miami, Florida (the "Issuer" or the "City") adopted
Resolution No. 02-1057 on September 26, 2002, (the "Resolution"); and
WHEREAS, all capitalized undefined terms used herein shall have the meanings ascribed thereto in the
Resolution; and
WHEREAS, the Issuer now desires to amend the Resolution to provide for the issuance of the Bonds; and
WHEREAS, this Resolution is being adopted prior to the issuance of the Bonds.
Section 1. The definition of "Refunded Bonds" in Section 2.01 of the Resolution is hereby amended
to read as follows:
"Refunded Bonds" means the obligation due the Underwriters in regard to the payment
made by the Underwriters on October 17, 2002 in regard to the loan payments due under
those certain loan agreements dated as of May 12, 1994 and as of October 25, 1995
between the City and the Sunshine State Governmental Financing Commission (the
"Outstanding Loan Agreements")."
Section 2.
read as follows:
The definition of Underwriters in Section 2.01 of this Resolution is hereby amended to
{OR546407;131 A-10 02- 1181
"Underwriters" means any or all of Salomon Smith Barney, Inc., Lehman Brothers, UBS
PaineWebber, Inc., Jackson Securities Inc., Morgan Stanley & Co., Incorporated and JP
Morgan Securities, Inc."
Section 3. Section 5.11(3) of the Resolution is hereby amended to read as follows:
"The amount agreed to between the Issuer and the Underwriters sufficient to discharge the
Refunded Bonds shall be paid to the Underwriters."
Section 4. Section 5.12 of the Resolution is hereby amended to provide that the reference to the
Bond Purchase Agreement in said section shall mean the Bond Purchase Agreement attached hereto.
Section 5. Section 5.17 of the Resolution is hereby amended to provide that the reference to the
Preliminary Official Statement in said section shall mean the Preliminary Official Statement attached hereto.
Mayor.
Section 6. EXcept as hereby amended the Resolution shall remain in full force and effect.
Section 7. This Resolution shall take effect immediately upon its adoption and signature of the
PASSED AND ADOPTED this 29th day of October, 2002.
MANUEL A. DIAZ, MAYOR
ATTEST:
PRISCILLA A. THOMPSON,
CITY CLERK
APPROVED AS TO FORM AND CORRECTNESS:
ALEJANDRO VILARELLO,
CITY ATTORNEY
(OM46407;13) B-11 02-1181
APPENDIX C
GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001
(0"46407;13) 02-1181
APPENDIX D
FORM OF BOND COUNSEL OPINION
Upon delivery of the Series 2002 Bonds in definitive form,
Akerman Senterfitt Bond Counsel, proposes to render its opinion
with respect to such Series 2002'. Bonds in substantially the
following form:
(Date of Delivery)
Mayor and City Commission
City of Miami, Florida
$28,025,000
CITY OF MIAMI, FLORIDA
SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING
BONDS, SERIES 2002C
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance by the City of Miami,
Florida (the "Issuer") of its $28,025,000 Special Obligation Non -Ad Valorem Revenue
Refunding Bonds, Series 2002C (the "Series 2002 Bonds"), pursuant to the Constitution and
laws of the State of Florida, including particularly Chapter 166, Florida Statutes, Article VIII,
Section 2 of the Constitution of the State of Florida, the City Charter and other applicable
provisions of law (collectively the "Act"), and Resolution No. 02-1057 of the Issuer, as amended
and supplemented, (the "Resolution"). Any capitalized undefined terms used herein shall have
the same meaning as such term has under the Resolution.
As to questions of fact material to our opinion, we have relied upon representations of the
Issuer contained in the Resolution and in the certified proceedings and other certifications of
public officials furnished to us, without undertaking to verify the same by independent
investigation.
Reference is made to the opinion of even date herewith of legal counsel to the Issuer, on
which we have solely relied, as to the due creation and valid existence of the Issuer, the due
adoption of the Resolution, the due execution and delivery of the Series 2002 Bonds and the
compliance by the Issuer with all conditions precedent to the issuance of the Series 2002 Bonds
contained in the City Charter or resolutions or ordinances of the Issuer.
In addition to the foregoing, we have examined and relied upon such other agreements,
certificates, documents, representations and opinions submitted to us, including certifications and
representation of public officials and other officers and representatives of the various parties
participating in this transaction, as we have deemed relevant and necessary in connection with
the opinions expressed below. We have not undertaken an independent audit, examination,
{OR546407;131 D-1 1
V
investigation or inspection of the matters described or contained in such agreements, certificates,
documents, representations and opinions submitted to us and have relied solely on the facts,
estimates and circumstances described and set forth therein.
In our examination of the foregoing, we have assumed the genuineness of the signatures
on all documents and instruments, the authenticity of documents submitted as originals, the
conformity to originals of documents submitted as copies and the legal capacity of all natural
persons.
The scope of our engagement in relation to the issuance of the Series 2002 Bonds has
been limited solely to the examination of facts and law incident to rendering the opinions
expressed herein.
This opinion should not be construed as offering material or an offering circular,
prospectus or official statement and is not intended in any way to be a disclosure statement used
in connection with the sale or delivery of the Series 2002 Bonds. Furthermore, we are not
passing on the accuracy or sufficiency of any CUSIP numbers appearing on the Series 2002
Bonds. In addition, we have not been engaged to and, therefore, do not express any opinion as to
the compliance by the Issuer with any federal or state statute, regulation or ruling with respect to
the sale and distribution of the Series 2002 Bonds.
Neither the Series 2002 Bonds nor the interest and premium, if any, payable thereon shall
constitute a general obligation or general indebtedness of the Issuer within the meaning of the
Constitution and laws of Florida. The Series 2002 Bonds are payable solely from the Pledged
Revenues as provided in the Resolution. No owner of the Series 2002 Bonds or any other person
shall ever have the right, directly or indirectly, to require or compel the exercise of any ad
valorem taxing power of the Issuer or any other public authority or governmental body to pay
any other amounts required to be paid pursuant to the Resolution or the Series 2002 Bonds.
The opinions set forth below are expressly limited to, and we opine only with respect to,
the laws of the State of Florida and the federal income tax laws of the United States of America.
Based upon the foregoing, we are of the opinion that:
The Issuer has been duly created and validly exists as a municipal corporation of the
State of Florida.
The Resolution has been duly adopted by the Issuer and constitutes a valid and binding
obligation of the Issuer and is enforceable in accordance with its terms.
The Series 2002 Bonds have been duly authorized, executed and delivered by the Issuer
and are valid and binding special obligations of the Issuer, payable solely from the sources
provided therefore in the Resolution.
The interest on the Series 2002 Bonds is excludable from gross income for federal
income tax purposes and is not treated as an item of tax preference for purposes of the federal
alternative minimum tax imposed on individuals and corporations; however, it should be noted
that for the purpose of computing the alternative minimum tax imposed on corporations (as
defined for federal income tax purposes), such interest is taken into account in determining
{OR546407;13} D-2 ;1 ,I
adjusted current earnings. The opinions set forth in the immediately preceding sentence are
subject to the condition that the Issuer comply with all requirements of the Internal Revenue
Code of 1986, as amended, and the regulations there under (the "Code"), that must be met or
satisfied in order that interest thereon be, or continue to be, excludable from gross income for
federal income tax purposes. The Issuer has covenanted to comply with each such requirement.
Failure of the Issuer to comply with any of such requirements may cause the inclusion of interest
on the Series 2002 Bonds in gross income for federal income tax purposes retroactive to the date
of issuance of the Series 2002 Bonds. Other provisions of the Code may give rise to adverse
federal income tax consequences to particular holders of the Series 2002 Bonds. The scope of
this opinion is limited to the matters addressed above and we express no opinion regarding other
federal tax consequences arising with respect to the Series 2002 Bonds.
In rendering the opinion expressed above, we have assumed continuing compliance with
the tax covenants referred to above that must be met after the issuance of the Series 2002 Bonds
in order that interest on the Series 2002 Bonds not be included in gross income for federal
income tax.
The Series 2002 Bonds and the interest thereon are exempt from all present intangible
personal property taxes imposed pursuant to Chapter 199, Florida Statutes.
It is to be understood that the rights of the owners of Series 2002 Bonds and the
enforceability of the Series 2002 Bonds and the Resolution may be subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors' rights and
laws and equitable principles that may affect remedies or injunctive or other equitable relief, and
to the exercise of judicial discretion in appropriate cases.
Our opinions expressed herein are predicated upon present law (and interpretations
thereof), facts and circumstances, and we assume no affirmative obligation to update the
opinions expressed herein if such laws (and interpretations thereof), facts or circumstances
change after the date hereof.
Very truly yours,
AKERMAN SENTERFITT
{OR546407;13} D-3 02-1181
APPENDIX E
SPECIMEN OF MUNICIPAL BOND INSURANCE POLICY
AND DEBT SERVICE RESERVE FUND POLICY
{OR546407;13 } E-1
APPENDIX F
FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT
This Disclosure Dissemination Agent Agreement (this "Disclosure Agreement"), dated as of October _
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 terrps 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 the Finance Director or his designee, 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 1513(b)(1) of
the Securities Exchange Act of 1934.
1OR546407;131 F-1 02-1181
2-1j81
"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 William 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
45th 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 Depositories:
1. Municipal Advisory Council of Michigan
1445 First National Building
Detroit, Michigan 48226-3517
(313) 963-0420 (phone)
(313) 963-0943 (fax)
(OR546407;13} F-2 02-1181
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 30th of each year, commencing with the fiscal year ending
September 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 Notice Event as described in Section 4(a)(12) has occurred
and 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.
(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).
(e) The Disclosure Dissemination Agent shall:
(i) determine the name and address of each Repository each year prior to the Annual Filing
Date;
(ii) upon receipt, promptly file each Annual Report received under Section 2(a) with each
National Repository, and the State Depository, (if any);
(OR546407;13) F-3 02-1181
(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," pursuant
to Sections 4(c) and 4(a)(10);
11. "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.
(0 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.
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:
i) The City of Miami, Florida Legally Available Non -Ad Valorem Revenues
ii) The City of Miami, Florida Historical Anti -Dilution Test
1OR546407;13) F-4 02-1181
iii) Summary Schedule of Revenues, Expenditures and Charges in Fund Balance for the
General Fund
iv) Direct Debt
V) City of Miami, Florida Schedule of Principal and Interest for Non -Ad Valorem Revenue
Bonds
(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 30th 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:
difficulties;
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
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;
11. 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. 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
{OR546407;13} F -5A 2 g
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 Obligations. The Issuer acknowledges and understands that other
state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-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").
(b) Nothing 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.
SECTION 9. Disclosure Dissemination Aeent. 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
{OR546407;131 F-6 02-1181
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 Hplders 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 DISCLOSURE 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 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.
(OR546407;131 F-7QQ ii
02,r—��Ol
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:
1OM46407;131 F'_g
0�-1181
Name of Issuer
Obligated Person(s)
Name of Bond Issue:
Date of Issuance:
Date of Official Statement
CUSIP Number:
EXHIBIT A
NAME AND CUSIP NUMBERS OF BONDS
The City of Miami, Florida
The City of Miami, Florida
Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2002C
October 2002
October 2002
{OR546407;13} F-9 02-1181
EXHIBIT B
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Issuer The City of Miami, Florida
Obligated Person: The City of Miami, Florida
Name of Bond Issue: The City of Miami, Florida Special Obligation Non -Ad Valorem Revenue
Refunding Bonds, Series 2062C
Date of Issuance: October , 2002
NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-
named Bonds as required by the Disclosure Agreement, dated as of , between the Issuer
and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the
Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by
Dated:
Digital Assurance Certification, L.L.C., as Disclosure
Dissemination Agent, ori behalf of the Issuer
cc: Issuer
Obligated Person
{ OR546407;131 F-10
02-1181
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.
and interest payment delinquencies
2.
_Principal
_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 liquidity 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.
02-1.81
l OR546407;13) F-11
APPENDIX G
PROPOSED REORGANIZATION PLAN
{OR546407;13} F"1 02-1181